8–2–96 friday vol. 61 no. 150 august 2, 1996 pages … 40472–40473 comptroller of the currency...

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FridayAugust 2, 1996Vol. 61 No. 150

Pages 40289–40504

8–2–96

Briefings on How To Use the Federal RegisterFor information on briefings in New York, NY andWashington, DC, see announcement on the inside coverof this issue.

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Federal Register / Vol. 61, No. 150 / Friday, August 2, 1996

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Contents Federal Register

III

Vol. 61, No. 150

Friday, August 2, 1996

Agricultural Marketing ServiceRULESAvocados grown in Florida, 40290–40292Oranges, grapefruit, tangerines, and tangelos grown in

FloridaGrade standards, 40289–40290

Agriculture DepartmentSee Agricultural Marketing ServiceSee Animal and Plant Health Inspection ServiceSee Food and Consumer ServiceSee Forest Service

Air Force DepartmentNOTICESEnvironmental statements; availability, etc.:

Hardwood Range expansion, Wood County, IA, et al.,40408–40409

Alcohol, Tobacco and Firearms BureauNOTICESAgency information collection activities:

Proposed collection; comment request, 40478–40480

Animal and Plant Health Inspection ServiceRULESExportation and importation of animals and animal

products:Hog cholera and swine vesicular disease; disease status

change—Netherlands, 40292–40293

PROPOSED RULESPlant-related quarantine, domestic:

Karnal bunt disease—Public forums, 40361–40362Seed planting and regulated articles movement, 40354–

40361Plant-related quarantine, foreign:

Camellia, gardenia, rhododendron, rose, and lilac;imported cut flowers, 40362–40364

Antitrust DivisionNOTICESCompetitive impact statements and proposed consent

judgments:Alex. Brown & Sons Inc. et al., 40433–40451

Arms Control and Disarmament AgencyRULESFreedom of Information Act; implementation, 40332–40336

Arts and Humanities, National FoundationSee National Foundation on the Arts and the Humanities

Blind or Severely Disabled, Committee for Purchase FromPeople Who Are

See Committee for Purchase From People Who Are Blind orSeverely Disabled

Centers for Disease Control and PreventionNOTICESAgency information collection activities:


Commerce DepartmentSee Foreign-Trade Zones BoardSee International Trade AdministrationSee Minority Business Development AgencySee National Oceanic and Atmospheric Administration

Committee for Purchase From People Who Are Blind orSeverely Disabled

NOTICESProcurement list; additions and deletions, 40394–40395,

40395–40396

Committee for the Implementation of Textile AgreementsNOTICESCotton, wool, and man-made textiles:

Philippines, 40472–40473

Comptroller of the CurrencyRULESManagement official interlocks, 40293–40311

Consumer Product Safety CommissionRULESPoison prevention packaging:

Substances requiring special packaging; CFR correction,40317

Copyright Office, Library of CongressNOTICESDigital performance right in sound recordings;

precontroversy discovery schedule, 40464–40466

Defense DepartmentSee Air Force Department

Drug Enforcement AdministrationNOTICESApplications, hearings, determinations, etc.:

Ansys, Inc., 40451

Employment and Training AdministrationNOTICESAdjustment assistance:

AT&T Corp., 40455Ralph Lauren Womenswear, Inc., 40455Shepard’s/McGraw-Hill Companies, 40455Synergy Services, Inc.; correction, 40455–40456

Adjustment assistance and NAFTA transitional adjustmentassistance:

Owens-Illinois, Inc., et al., 40453–40455NAFTA transitional adjustment assistance:

AT&T Corp., 40456Kinney Shoe Corp., 40456

Employment Standards AdministrationSee Wage and Hour DivisionNOTICESMinimum wages for Federal and federally-assisted

construction; general wage determination decisions,40456–40458

Energy DepartmentSee Federal Energy Regulatory Commission

IV Federal Register / Vol. 61, No. 150 / Friday, August 2, 1996 / Contents

Environmental Protection AgencyRULESConflict of interests, 40500–40504Pesticides; tolerances in food, animal feeds, and raw

agricultural commodities:Bacillus thuringiensis CryIA(b) delta-endotoxin, 40340–

40343CP4 Enolpyruvylshikimate-3-D, 40338–40340Phosphinothricin acetyltransferase, 40337–40338

PROPOSED RULESSuperfund program:

National oil and hazardous substances contingencyplan—

National priorities list update, 40371–40373NOTICESClean Air Act:

Acid rain provisions—Opt-in permits, 40413

Committees; establishment, renewal, termination, etc.:Industrial Combustion Coordinated Rulemaking Advisory

Committee, 40413–40414Environmental statements; availability, etc.:

Agency statements—Comment availability, 40415Weekly receipts, 40414–40415

Meetings:Common sense initiative—

Automobile manufacturing sector, 40415–40416Reporting and recordkeeping requirements, 40416Superfund; response and remedial actions, proposed

settlements, etc.:Lorentz Barrel and Drum Site, CA, 40416–40417

Water pollution; discharge of pollutants (NPDES):North Slope of Brooks Range, AK; oil and gas extraction;

general permit, 40417

Federal Aviation AdministrationRULESAirworthiness directives:

Hamilton Standard, 40313–40315Class E airspace, 40315–40317PROPOSED RULESClass E airspace, 40365–40366NOTICESPassenger facility charges; applications, etc.:

Portland International Airport, OR, 40473–40474

Federal Communications CommissionRULESCommon carrier services:

Commercial mobile radio services—Wireless services compatibility with enhanced 911

systems, 40348–40352PROPOSED RULESCommon carrier services:

Commercial mobile radio services—Enhanced 911 emergency calling systems, 40374–40377

Federal Deposit Insurance CorporationRULESManagement official interlocks, 40293–40311NOTICESMeetings; Sunshine Act, 40418Stored value cards; General Counsel’s opinion, 40490–

40494Stored value cards and other electronic payment systems,

40494–40497

Federal Emergency Management AgencyNOTICESDisaster and emergency areas:

Indiana, 40418North Carolina, 40418–40419Ohio, 40419Pennsylvania, 40419Virgin Islands, 40419

Federal Energy Regulatory CommissionNOTICESEnvironmental statements; availability, etc.:

Pacific Gas & Electric Co., 40409Hydroelectric applications, 40409–40411Natural gas certificate filings:

Southern Natural Gas Co. et al., 40411–40413

Federal Financial Institutions Examination CouncilNOTICESNegotiable order of withdrawal (NOW) accounts

advertising; interagency policy statement withdrawn,40419–40420

Federal Highway AdministrationPROPOSED RULESEngineering and traffic operations:

Uniform Traffic Control Devices Manual—Center and edge line markings; standards, 40484–40487

NOTICESEnvironmental statements; notice of intent:

Stearns County, MN, 40474

Federal Housing Finance BoardRULESFederal home loan bank system:

Bank or trust company deposits; definition modification,40311–40313

PROPOSED RULESFederal home loan bank system:

Advances; terms and conditions, 40364–40365

Federal Reserve SystemRULESManagement official interlocks, 40293–40311NOTICESBanks and bank holding companies:

Formations, acquisitions, and mergers, 40420Permissible nonbanking activities, 40421

Meetings; Sunshine Act, 40421

Fish and Wildlife ServiceRULESImportation, exportation, and transportation of wildlife:

Miscellaneous amendmentsCorrection, 40481

Food and Consumer ServicePROPOSED RULESChild nutrition programs:

National school lunch, school breakfast, child and adultcare food, and summer food service programs—

Meat alternates; correction, 40481

Food and Drug AdministrationRULESFood for human consumption:

Food labeling—Restaurant foods; nutrient content and health claims,

40320–40332

VFederal Register / Vol. 61, No. 150 / Friday, August 2, 1996 / Contents

GRAS or prior-sanctioned ingredients:Ferrous lactate, 40317–40320

Foreign-Trade Zones BoardNOTICESApplications, hearings, determinations, etc.:

Kansas, 40396

Forest ServiceNOTICESEnvironmental statements; availability, etc.:

Californa spotted owl; national forests, CA, 40394

General Services AdministrationNOTICESFederal travel:

Special actual subsistence expense reimbursementceiling—

Oshkosh (Winnebago County), WI; correction, 40481

Health and Human Services DepartmentSee Centers for Disease Control and PreventionSee Food and Drug AdministrationSee Health Care Financing AdministrationSee National Institutes of Health

Health Care Financing AdministrationRULESMedicare:

Special enrollment periods and waiting period, 40343–40347

NOTICESAgency information collection activities:


Hearings and Appeals Office, Interior DepartmentRULESHearings and appeals procedures:

Public land and surface coal mining hearings andappeals; special procedures and rules; SolicitorOffice addresses update, 40347–40348

Indian Affairs BureauNOTICESTribal-State Compacts approval; Class III (casino) gambling:

Confederated Tribes and Bands of Yakama Indian Nation,WA, 40429

Walker River Paiute Tribe, NV, 40429

Interior DepartmentSee Fish and Wildlife ServiceSee Hearings and Appeals Office, Interior DepartmentSee Indian Affairs BureauSee Land Management BureauSee Surface Mining Reclamation and Enforcement OfficeNOTICESAlternative dispute resolution use, 40424–40429

International Trade AdministrationNOTICESAntidumping:

Calcium aluminate flux from—France, 40396–40399

Corrosion-resistant carbon steel flat products from—Australia, 40399–40400

Internal-combustion industrial forklift trucks from—Japan, 40400–40403

Large power transformers from—France, 40403–40406

Stainless steel butt-weld pipe fittings from—Taiwan, 40406

Committees; establishment, renewal, termination, etc.:U.S. Automotive Parts Advisory Committee, 40407–40408

Countervailing duties:Cotton shop towels from—

Peru, 40408Applications, hearings, determinations, etc.:

Johns Hopkins University et al., 40406–40407Mississippi State University et al., 40407Princeton University et al., 40407

Justice DepartmentSee Antitrust DivisionSee Drug Enforcement AdministrationSee Parole Commission

Labor DepartmentSee Employment and Training AdministrationSee Employment Standards AdministrationSee Labor Statistics BureauSee Pension and Welfare Benefits AdministrationSee Wage and Hour DivisionPROPOSED RULESWage rates predetermination procedures; and construction

and nonconstruction contracts; labor standardsprovisions:

Davis-Bacon helper regulations suspension continuation,40366–40368

NOTICESAgency information collection activities:

Submission for OMB review; comment request, 40452North American Agreement on Labor Cooperation:

Ministry of the Environment, Natural Resources, andFishing; representation by Single Trade Union ofWorkers of the Fishing Ministry, Mexico City,Mexico, 40453

Labor Statistics BureauNOTICESAgency information collection activities:


Land Management BureauPROPOSED RULESMinerals management:

Mineral materials disposal; bonding and certificates ofdeposit requirements, 40373–40374

NOTICESEnvironmental statements; availability, etc.:

Dos Pobres/San Juan copper ore bodies, AZ, 40429–40430Meetings:

Resource advisory councils—Northwest Colorado, 40430

Realty actions; sales, leases, etc.:Nevada, 40430–40431, 40431

Resource management plans, etc.:Challis Resource Area, ID, 40431–40433

Library of CongressSee Copyright Office, Library of Congress

Minority Business Development AgencyNOTICESBusiness development center program applications:

South Carolina, 40408

VI Federal Register / Vol. 61, No. 150 / Friday, August 2, 1996 / Contents

National Archives and Records AdministrationNOTICESAgency information collection activities:


National Foundation on the Arts and the HumanitiesNOTICESAgency information collection activities:

Submission for OMB review; comment request, 40394

National Institutes of HealthNOTICESMeetings:

National Institute of Environmental Health Sciences,40423

Research Grants Division special emphasis panels,40423–40424

National Labor Relations BoardPROPOSED RULESSummary judgment motions and advisory opinions; Federal

regulatory review, 40369

National Oceanic and Atmospheric AdministrationRULESFishery conservation and management:

Alaska; fisheries of Exclusive Economic Zone; Federalregulatory reform

Correction, 40481Bering Sea and Aleutian Islands groundfish, 40353Gulf of Alaska groundfish, 40353

Tuna, Atlantic bluefin fisheries, 40352PROPOSED RULESFishery conservation and management:

North Pacific fisheries research plan; implementation,40380–40393

Marine mammals:Incidental taking—

Naval activities; USS Seawolf submarine shock testing,40377–40380

National Science FoundationNOTICESPrivacy Act:

Systems of records, 40468

Nuclear Regulatory CommissionNOTICESMeetings:

Agreement States; technical and program managementissues in regulation of Atomic Energy Act radioactivematerials, 40469

Applications, hearings, determinations, etc.:Commonwealth Edison Co. et al., 40468–40469

Parole CommissionNOTICESMeetings; Sunshine Act, 40451

Pension and Welfare Benefits AdministrationNOTICESEmployee benefit plans; class exemptions:

Restoration of delinquint contributions to plans, 40459–40462

Pension payback program; restoration of delinquentparticipant contributions voluntary complianceprogram, 40462–40464

Public Health ServiceSee Centers for Disease Control and PreventionSee Food and Drug AdministrationSee National Institutes of Health

Railroad Retirement BoardNOTICESAgency information collection activities:

Submission for OMB review; comment request, 40469–40470

Securities and Exchange CommissionNOTICESSelf-regulatory organizations; proposed rule changes:

Delta Clearing Corp., 40471–40472Applications, hearings, determinations, etc.:

Public utility holding company filings, 40470Renaissance Capital Growth & Income Fund III, Inc.,

40470–40471

Social Security AdministrationNOTICESAgency information collection activities:

Proposed collection; comment request, 40472

Surface Mining Reclamation and Enforcement OfficePROPOSED RULESPermanent program and abandoned mine land reclamation

plan submissions:Oklahoma, 40369–40371

Surface Transportation BoardNOTICESRailroad operation, acquisition, construction, etc.:

Cen-Tex Rail Link, Ltd., 40474–40475CSX Corp. et al., 40475–40476

Railroad services abandonment:New Hampshire & Vermont Railroad Co., 40477

Textile Agreements Implementation CommitteeSee Committee for the Implementation of Textile

Agreements

Thrift Supervision OfficeRULESManagement official interlocks, 40293–40311

Transportation DepartmentSee Federal Aviation AdministrationSee Federal Highway AdministrationSee Surface Transportation Board

Treasury DepartmentSee Alcohol, Tobacco and Firearms BureauSee Comptroller of the CurrencySee Thrift Supervision OfficeNOTICESAgency information collection activities:

Submission for OMB review; comment request, 40477–40478

Wage and Hour DivisionPROPOSED RULESWage rates predetermination procedures; and construction

and nonconstruction contracts; labor standardsprovisions:

Davis-Bacon helper regulations suspension continuation,40366–40368

VIIFederal Register / Vol. 61, No. 150 / Friday, August 2, 1996 / Contents

Separate Parts In This Issue

Part IITransportation Department, Federal Highway

Administration, 40484–40487

Part IIIFederal Deposit Insurance Corporation, 40490–40497

Part IVEnvironmental Protection Agency, 40500–40504

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

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.

VIII Federal Register / Vol. 61, No. 150 / Friday, August 2, 1996 / Contents

5 CFRCh. LIV.............................405007 CFR51.....................................40289915...................................40290Proposed Rules:220...................................40481226...................................40481301 (2 documents) .........40354,

40361319...................................403629 CFR94.....................................4029212 CFR26.....................................40293212...................................40293348...................................40293563...................................40293931...................................40311Proposed Rules:935...................................4036414 CFR39.....................................4031371 (2 documents) ...........40315,

40316Proposed Rules:71.....................................4036515 CFR679...................................4048116 CFR1700.................................4031721 CFR73.....................................40317101...................................40320184...................................4031722 CFR602...................................4033223 CFRProposed Rules:655...................................4048429 CFRProposed Rules:1.......................................403665.......................................40366102...................................4036930 CFRProposed Rules:936...................................4036940 CFR3.......................................40500180 (3 documents) .........40337,

40338, 40340Proposed Rules:300...................................4037142 CFR406...................................40343407...................................40343408...................................40343416...................................4034343 CFR4.......................................40347Proposed Rules:3600.................................403733610.................................403733620.................................4037347 CFR20.....................................40348Proposed Rules:20.....................................40374

50 CFR13.....................................4048114.....................................40481285...................................40352679 (2 documents) ..........40353Proposed Rules:216...................................40377679...................................40380

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

40289

Vol. 61, No. 150


DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 51

[Docket Number FV–96–301]

Florida Grapefruit, Florida Orangesand Tangelos, and, Florida Tangerines;Grade Standards

AGENCY: Agricultural Marketing Service,USDA.ACTION: Interim final rule with requestfor comments.

SUMMARY: This rule will revise theUnited States Standards for Grades ofFlorida Grapefruit, United StatesStandards for Grades of Florida Orangesand Tangelos, and, United StatesStandards for Grades of FloridaTangerines. This rule revises the‘‘Application of Tolerances’’ sections,which establishes the limitations ofdefective fruit per sample. It also sets aminimum sample size of twenty-fivefruit.EFFECTIVE DATE: August 5, 1996.Comments must be received by October1, 1996.ADDRESSES: Interested persons areinvited to submit written commentsconcerning this interim final rule.Comments must be sent to theStandardization Section, Fresh ProductsBranch, Fruit and Vegetable Division,Agricultural Marketing Service, U.S.Department of Agriculture, P.O. Box96456, Room 2065 South Building,Washington, DC 20090–6456.Comments should make reference to thedate and page number of this issue ofthe Federal Register and will be madeavailable for public inspection in theabove office during regular businesshours.FOR FURTHER INFORMATION CONTACT:Frank O’Sullivan, at the above addressor call (202) 720–2185.

SUPPLEMENTARY INFORMATION: The U.S.Department of Agriculture (USDA) isissuing this rule in conformance withExecutive Order 12866.

Pursuant to the requirements set forthin the Regulatory Flexibility Act (RFA),the Agricultural Marketing Service(AMS) has considered the economicimpact of this action on small entities.

The purpose of the RFA is to fitregulatory actions to the scale ofbusinesses subject to such actions inorder that small businesses will not beunduly or disproportionately burdened.The United States standards issuedpursuant to the Act, and issuedthereunder, are unique in that they arebrought about through group action ofessentially small entities acting on theirown behalf. Thus, both statutes havesmall entity orientation andcompatibility.

There are approximately 150 handlersof Florida citrus who are subject toregulation under these standards andapproximately 11,000 producers ofcitrus in Florida. Small agriculturalservice firms, which includes handlers,have been defined by the SmallBusiness Administration (13 CFR121.601) as those having annual receiptsof less than $5,000,000, and smallagricultural producers are defined asthose having annual receipts of less than$500,000. A majority of handlers andproducers of Florida citrus may beclassified as small entities.

These revisions will be a benefit tohandlers and producers of Floridacitrus, regardless of the size, byminimizing the destruction of packagesand allowing more defective fruit inindividual packages while maintainingoverall quality levels. Accordingly,AMS has determined that the issuanceof this interim final rule will not havea significant economic impact on asubstantial number of small entities.

This rule has been reviewed underExecutive Order 12988, Civil JusticeReform. This action is not intended tohave retroactive effect. This rule willnot preempt any State or local laws,regulations, or policies, unless theypresent an irreconcilable conflict withthis rule. There are no administrativeprocedures which must be exhaustedprior to any judicial challenge to theprovisions of the rule.

The United States Standards forGrades of Florida Grapefruit, UnitedStates Standards for Grades of Florida

Oranges and Tangelos, and UnitedStates Standards for Grades of FloridaTangerines were recently revisedfollowing extensive discussions withthe Florida citrus industry and a 60 daycomment period. The final rule to revisethe standards was published in theFederal Register on May 8, 1996, andwill become effective August 1, 1996.However, we received two requests afterthe publication date concerning therevisions to the standards. One wasfrom the Florida Citrus Packers, Inc.,which ‘‘represents nearly 90 percent ofFlorida’s fresh commercial citrusindustry, growers and shippers’’ andfrom the Commissioner of the FloridaDepartment of Agriculture andConsumer Services (FDACS). Bothrequested revision of the ‘‘Applicationof Tolerances’’ sections of the standardsand they requested a minimum samplesize of twenty-five fruit for each of theU.S. standards for Florida citrus.

The ‘‘Application of Tolerances’’sections in the standards effectiveAugust 1, 1996, are based on thecontents of individual packages with nospecified sample size. At that time, itwas AMS’ understanding that aspecified sample was no longer neededand that defects were to be based onindividual packages. After publicationin the Federal Register on May 8, 1996,the Florida citrus industry and FDACSstated the following concerns to AMS.

The industry stated that withoutfurther revisions to the standards itwould be very costly to the Floridacitrus industry. If the standards are notrevised an excessive amount ofdestruction to consumer packages couldoccur, resulting in costly repacking offruit and replacing of these destroyedpackages. Also, the tolerances are toorestrictive for these consumer packagesultimately resulting in failing to marketcitrus account of one piece of defectivefruit. They also indicated that theminimum sample size should be aminimum of twenty-five fruit.

The FDACS states that ‘‘* * *inspections based on small containerswill require inspection procedureswhich are more time consuming andless efficient than the present.’’ TheState also expresses their concern inadopting and implementing therevisions to the ‘‘Application ofTolerances’’ sections and the minimumsample size of twenty-five fruitexpeditiously, in order to train

40290 Federal Register / Vol. 61, No. 150 / Friday, August 2, 1996 / Rules and Regulations

inspectors for the 1996/1997 citrusseason.

Therefore, this rule will changeSections 51.760, 51.1151, and 51.1820‘‘Tolerances,’’ to set a minimum samplesize of twenty-five fruit; which will readas follows: ‘‘In order to allow forvariations incident to proper gradingand handling in each of the foregoinggrades, the following tolerances, bycount, based on a minimum 25 countsample, are provided as specified:’’ TheSections 51.761, 51.1152, and 51.1821‘‘Application of Tolerances,’’ will alsochange from individual packagelimitations to limitations on individualsamples and will read as follows:‘‘Individual samples are subject to thefollowing limitations, unless otherwisespecified in §§ 51.760, 51.1151, 51.1820,respectively. Individual samples shallhave not more than one and one-halftimes a specified tolerance of 10 percentor more, and not more than double aspecified tolerance of less than 10percent: Provided, that at least onedecayed or wormy fruit may bepermitted in any sample: And providedfurther, that the averages for the entirelot are within the tolerances specifiedfor the grade.’’

Pursuant to 5 U.S.C. 553, it is foundand determined upon good cause that itis impracticable, unnecessary, andcontrary to the public interest to givepreliminary notice prior to putting thisrule into effect and that good causeexists for not postponing the effectivedate of this rule 30 days afterpublication in the Federal Registerbecause: (1) The standards werepublished in the Federal Register onMay 8, 1996, and will become effectiveAugust 1, 1996; (2) harvesting for the1996/1997 Florida citrus season willbegin in early Fall and USDA incooperation with the FDACS needsample time to train inspectors andinform the industry of these changes;and (3) this interim final rule providesa 60 day comment period, and allcomments timely received will beconsidered prior to finalization of thisrule.

List of Subjects in 7 CFR Part 51

Agricultural commodities, Foodgrades and standards, Fruits, Nuts,Reporting and recordkeepingrequirements, Trees, Vegetables.

For reasons set forth in the preamble,7 CFR Part 51 is amended as follows:

PART 51—[AMENDED]

1. The authority citation for Part 51continues to read as follows:

Authority: 7 U.S.C. 1621–1627.

2. Section 51.760 is amended byrevising the introductory text to read asfollows:

§ 51.760 Tolerances.

In order to allow for variationsincident to proper grading and handlingin each of the foregoing grades, thefollowing tolerances, by count, based ona minimum 25 count sample, areprovided as specified:* * * * *

3. Section 51.761 is revised to read asfollows:

§ 51.761 Application of Tolerances.

Individual samples are subject to thefollowing limitations, unless otherwisespecified in § 51.760. Individualsamples shall have not more than oneand one-half times a specified toleranceof 10 percent or more, and not morethan double a specified tolerance of lessthan 10 percent: Provided, that at leastone decayed or wormy fruit may bepermitted in any sample: And providedfurther, that the averages for the entirelot are within the tolerances specifiedfor the grade.



In order to allow for variationsincident to proper grading and handlingin each of the foregoing grades, thefollowing tolerances, by count, based ona minimum 25 count sample, areprovided as specified:* * * * *

5. Section 51.1152 is revised to readas follows:

§ 51.1152 Application of Tolerances.

Individual samples are subject to thefollowing limitations, unless otherwisespecified in § 51.1151. Individualsamples shall have not more than oneand one-half times a specified toleranceof 10 percent or more, and not morethan double a specified tolerance of lessthan 10 percent: Provided, that at leastone decayed or wormy fruit may bepermitted in any sample: And providedfurther, that the averages for the entirelot are within the tolerances specifiedfor the grade.



In order to allow for variationsincident to proper grading and handlingin each of the foregoing grades, thefollowing tolerances, by count, based on

a minimum 25 count sample, areprovided as specified:* * * * *

7. Section 51.1821 is revised to readas follows:

§ 51.1821 Application of Tolerances.Individual samples are subject to the

following limitations, unless otherwisespecified in § 51.1820. Individualsamples shall have not more than oneand one-half times a specified toleranceof 10 percent or more, and not morethan double a specified tolerance of lessthan 10 percent: Provided, that at leastone decayed or wormy fruit may bepermitted in any sample: And providedfurther, that the averages for the entirelot are within the tolerances specifiedfor the grade.

Dated: July 29, 1996.Robert C. Keeney,Director, Fruit and Vegetable Division.[FR Doc. 96–19637 Filed 8–01–96; 8:45 am]BILLING CODE 3410–02–P

7 CFR Part 915

[Docket No. FV96–915–1 FIR]

Avocados Grown in South Florida;Assessment Rate

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

SUMMARY: The Department ofAgriculture (Department) is adopting asa final rule, without change, theprovisions of an interim final rule thatestablished an assessment rate for theAvocado Administrative Committee(Committee) under Marketing Order No.915 for the 1996–97 and subsequentfiscal periods. The Committee isresponsible for local administration ofthe marketing order which regulates thehandling of avocados grown in SouthFlorida. Authorization to assess avocadohandlers enables the Committee to incurexpenses that are reasonable andnecessary to administer the program.EFFECTIVE DATE: Effective on April 1,1996.FOR FURTHER INFORMATION CONTACT:Caroline C. Thorpe, Marketing OrderAdministration Branch, Fruit andVegetable Division, AMS, USDA, P.O.Box 96456, room 2523–S, Washington,DC 20090–6456, telephone (202) 720–5127, FAX (202) 720–5698, or TershirraYeager, Program Assistant, MarketingOrder Administration Branch, Fruit andVegetable Division, AMS, USDA, P.O.Box 96456, room 2522–S, Washington,DC 20090–6456, telephone (202) 720–5127, FAX (202) 720–5698. Small

40291Federal Register / Vol. 61, No. 150 / Friday, August 2, 1996 / Rules and Regulations

businesses may request information oncompliance with this regulation bycontacting: Jay Guerber, MarketingOrder Administration Branch, Fruit andVegetable Division, AMS, USDA, P.O.Box 96456, Room 2523–S, Washington,D.C. 20090–6456; telephone: (202) 720–2491, FAX# (202) 720–5698.SUPPLEMENTARY INFORMATION: This ruleis issued under Marketing AgreementNo. 121 and Order No. 915, both asamended (7 CFR part 915), regulatingthe handling of avocados grown inSouth Florida, hereinafter referred to asthe ‘‘order.’’ The marketing agreementand order are effective under theAgricultural Marketing Agreement Actof 1937, as amended (7 U.S.C. 601–674),hereinafter referred to as the ‘‘Act.’’

The Department is issuing this rule inconformance with Executive Order12866.

This rule has been reviewed underExecutive Order 12988, Civil JusticeReform. Under the marketing order nowin effect, South Florida avocadohandlers are subject to assessments.Funds to administer the order arederived from such assessments. It isintended that the assessment rate asissued herein will be applicable to allassessable avocados beginning April 1,1996, and continuing until amended orterminated. This rule will not preemptany State 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 toreview the Secretary’s ruling on thepetition, provided an action is filed notlater than 20 days after the date of theentry of the ruling.

Pursuant to requirements set forth inthe Regulatory Flexibility Act (RFA), theAgricultural Marketing Service (AMS)has considered the economic impact ofthis rule on small entities.

The purpose of the RFA is to fitregulatory actions to the scale ofbusiness subject to such actions in order

that 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 65 producersof avocados in the production area andapproximately 95 handlers subject toregulation under the marketing order.Small agricultural producers have beendefined by the Small BusinessAdministration (13 CFR 121.601) asthose having annual receipts of less than$500,000, and small agricultural servicefirms are defined as those whose annualreceipts are less than $5,000,000. Themajority of avocado producers andhandlers may be classified as smallentities.

The avocado marketing orderprovides authority for the Committee,with the approval of the Department, toformulate an annual budget of expensesand collect assessments from handlersto administer the program. Themembers of the Committee areproducers and handlers of South Floridaavocados. They are familiar with thecosts for goods and services in theirlocal area and are thus in a position toformulate an appropriate budget andassessment rate. The assessment rate isformulated and discussed in a publicmeeting. Thus, all directly affectedpersons have an opportunity toparticipate and provide input.

The Committee met on December 13,1995, and unanimously recommended1996–97 expenditures of $122,200 andan assessment rate of $0.16 per bushelof avocados. In comparison, last year’sbudgeted expenditures were $107,570.The assessment rate of $0.16 is the sameas last year’s established rate. Majorexpenditures recommended by theCommittee for the 1996–97 year include$24,500 for local and nationalenforcement, and $24,830 for research.In comparison, last year’s budgetedexpenditures were $15,600 and $10,000,respectively.

The assessment rate recommended bythe Committee was derived by dividinganticipated expenses by expectedshipments of South Florida avocados.Avocado shipments for the year areestimated at 750,000 bushels whichshould provide $120,000 in assessmentincome. Income derived from handlerassessments, along with interest incomefunds from the Committee’s authorizedreserve, will be adequate to coverbudgeted expenses. Funds in the reservewill be kept within the maximumpermitted by the order.

An interim final rule regarding thisaction was published in the May 2,1996, issue of the Federal Register (61FR 19512). That rule provided for a 30-day comment period. No commentswere received.

While this rule will impose someadditional costs on handlers, the costsare in the form of uniform assessmentson all handlers. Some of the additionalcosts may be passed on to producers.However, these costs will be offset bythe benefits derived by the operation ofthe marketing order. Therefore, the AMShas determined that this rule will nothave a significant economic impact ona substantial number of small entities.

The assessment rate established inthis rule will continue in effectindefinitely unless modified,suspended, or terminated by theSecretary upon recommendation andinformation submitted by theCommittee or other availableinformation.

Although this assessment rate iseffective for an indefinite period, theCommittee will continue to meet priorto or during each fiscal period torecommend a budget of expenses andconsider recommendations formodification of the assessment rate. Thedates and times of Committee meetingsare available from the Committee or theDepartment. Committee meetings areopen to the public and interestedpersons may express their views at thesemeetings. The Department will evaluateCommittee recommendations and otheravailable information to determinewhether modification of the assessmentrate is needed. The Committee’s 1996–97 budget and those for subsequentfiscal periods will be reviewed and, asappropriate, approved by theDepartment.

After consideration of all relevantmaterial presented, including theinformation and recommendationsubmitted 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 that good causeexists for not postponing the effectivedate of this rule 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 1996–97 fiscal periodbegan on April 1, 1996, and themarketing order requires that the rate ofassessment for each fiscal period applyto all assessable avocados handledduring such fiscal period; (3) handlersare aware of this action which was


unanimously recommended by theCommittee at a public meeting and issimilar to other assessment rate actionsissued in past years; and (4) an interimfinal rule was published on this actionand provided for a 30-day commentperiod, no comments were received.


Avocados, Marketing agreements,Reporting and recordkeepingrequirements.

PART 915—AVOCADOS GROWN INSOUTH FLORIDA

Accordingly, the interim final ruleamending 7 CFR part 900 which waspublished at 61 FR 19512 on May 2,1996, is adopted as a final rule withoutchange.

Dated: July 29, 1996.Robert C. Keeney,Director, Fruit and Vegetable Division.[FR Doc. 96–19636 Filed 8–01–96; 8:45 am]BILLING CODE 3410–02–P

Animal and Plant Health InspectionService

9 CFR Part 94

[Docket No. 96–014–2]

Change in Disease Status of TheNetherlands Because of Hog Choleraand Swine Vesicular Disease

AGENCY: Animal and Plant HealthInspection Service, USDA.ACTION: Final rule.

SUMMARY: We are declaring TheNetherlands free of hog cholera andswine vesicular disease. As part of thisaction, we are adding The Netherlandsto the list of countries that, althoughdeclared free of swine vesicular disease,are subject to restrictions on pork andpork products offered for importationinto the United States. Declaring TheNetherlands free of hog cholera andswine vesicular disease is appropriatebecause there have been no confirmedoutbreaks of hog cholera or swinevesicular disease in The Netherlandssince 1992 and 1994, respectively. Thisrule relieves certain restrictions on theimportation of pork and pork productsinto the United States from TheNetherlands. However, because TheNetherlands shares common landborders with countries affected by swinevesicular disease, the importation intothe United States of pork and porkproducts from The Netherlands willcontinue to be restricted.EFFECTIVE DATE: August 19, 1996.

FOR FURTHER INFORMATION CONTACT: Dr.John Cougill, Staff Veterinarian,Products Program, National Center forImport and Export, VS, APHIS, 4700River Road Unit 40, Riverdale, MD20737–1231, (301) 734–8688; or e-mail:[email protected].

SUPPLEMENTARY INFORMATION:

Background

The regulations in 9 CFR part 94(referred to below as the regulations)govern the importation into the UnitedStates of specified animals and animalproducts in order to prevent theintroduction of various animal diseases,including rinderpest, foot-and-mouthdisease, African swine fever, hogcholera, and swine vesicular disease(SVD). These are dangerous anddestructive communicable diseases ofruminants and swine.

Sections 94.9(a) and 94.10(a) of theregulations provide that hog choleraexists in all countries of the worldexcept those listed in §§ 94.9(a) and94.10(a), which are declared to be freeof hog cholera. Section 94.12(a) of theregulations provides that SVD isconsidered to exist in all countries ofthe world except those listed in§ 94.12(a), which are declared to be freeof SVD.

On April 4, 1996, we published in theFederal Register (61 FR 14999–15000,Docket No. 96–014–1) a proposal toamend the regulations by adding TheNetherlands to the lists of countries in§§ 94.9(a), 94.10(a), and 94.12(a) of theregulations that have been declared freeof hog cholera and SVD. We furtherproposed to add The Netherlands to thelist of countries in § 94.13 that, althoughdeclared free of swine vesicular disease,are subject to restrictions on pork andpork products offered for importationinto the United States. These actionswould relieve certain restrictions on theimportation of pork and pork productsinto the United States from TheNetherlands.

We solicited comments concerningour proposal for 60 days ending June 3,1996. We did not receive any comments.The facts presented in the proposed rulestill provide the basis for this final rule.

Therefore, based on the rationale setforth in the proposed rule, we areadopting the provisions of the proposalas a final rule without change.

Effective Date

This is a substantive rule that relievesrestrictions and, pursuant to theprovisions of 5 U.S.C. 553, may be madeeffective less than 30 days afterpublication in the Federal Register.This rule relieves certain restrictions on

the importation of pork and porkproducts into the United States fromThe Netherlands. We have determinedthat approximately 2 weeks are neededto ensure that the Animal and PlantHealth Inspection Service personnel atports of entry receive official notice ofthis change in the regulations.Therefore, the Administrator of theAnimal and Plant Health InspectionService has determined that this ruleshould be effective 15 days afterpublication in the Federal Register.

Executive Order 12866 and RegulatoryFlexibility Act

This rule has been reviewed underExecutive Order 12866. For this action,the Office of Management and Budgethas waived its review process requiredby Executive Order 12866.

This rule amends the regulations inpart 94 by adding The Netherlands tothe lists of countries that have beendeclared free of hog cholera and SVD.This action relieves certain restrictionson the importation of pork and porkproducts into the United States fromThe Netherlands. However, theimportation of pork and pork productsinto the United States from TheNetherlands will continue to berestricted because The Netherlandsshares a common land border withBelgium, where SVD is considered toexist. While there are inspection andcertification procedures for ensuringthat commingling of pork and porkproducts from the two countries doesnot take place, these procedures are notwithout cost. Therefore, recognition ofThe Netherlands as free of hog choleraand SVD is not expected to significantlyaffect pork exports to the United States.The total value of pork exported to theUnited States from The Netherlands in1994 was $13.2 million (less than twopercent of the value of all U.S. porkimports). There were no live swineexported from The Netherlands to theUnited States in 1994.

Under these circumstances, theAdministrator of the Animal and PlantHealth Inspection Service hasdetermined that this action will nothave a significant economic impact ona substantial number of small entities.

Executive Order 12988

This rule has been reviewed underExecutive Order 12988, Civil JusticeReform. This rule: (1) Preempts all Stateand local laws and regulations that areinconsistent with this rule; (2) has noretroactive effect; and (3) does notrequire administrative proceedingsbefore parties may file suit in courtchallenging this rule.


Paperwork Reduction Act

This rule contains no newinformation collection or recordkeepingrequirements under the PaperworkReduction Act of 1995 (44 U.S.C. 3501et seq.).


Animal diseases, Imports, Livestock,Meat and meat products, Milk, Poultryand poultry products, Reporting andrecordkeeping requirements.

Accordingly, 9 CFR part 94 isamended as follows:

PART 94—RINDERPEST, FOOT-AND-MOUTH DISEASE, FOWL PEST (FOWLPLAGUE), VELOGENICVISCEROTROPIC NEWCASTLEDISEASE, AFRICAN SWINE FEVER,HOG CHOLERA, AND BOVINESPONGIFORM ENCEPHALOPATHY:PROHIBITED AND RESTRICTEDIMPORTATIONS

1. The authority citation for part 94continues to read as follows:

Authority: 7 U.S.C. 147a, 150ee, 161, 162,and 450; 19 U.S.C. 1306; 21 U.S.C. 111, 114a,134a, 134b, 134c, 134f, 136, and 136a; 31U.S.C. 9701; 42 U.S.C. 4331 and 4332; 7 CFR2.22, 2.80, and 371.2(d).

§ 94.9 [Amended]

2. In § 94.9, paragraph (a) is amendedby adding ‘‘The Netherlands,’’immediately after ‘‘Iceland,’’.

§ 94.10 [Amended]

3. In § 94.10, paragraph (a) isamended by adding ‘‘The Netherlands,’’immediately after ‘‘Iceland,’’.

§ 94.12 [Amended]

4. In § 94.12, paragraph (a) isamended by adding ‘‘The Netherlands,’’immediately after ‘‘Mexico,’’.

§ 94.13 [Amended]

5. In § 94.13, the introductory text, thefirst sentence is amended by adding‘‘The Netherlands,’’ immediately after‘‘Luxembourg,’’.

Done in Washington, DC, this 29th day ofJuly 1996.A. Strating,Acting Administrator, Animal and PlantHealth Inspection Service.[FR Doc. 96–19720 Filed 8–1–96; 8:45 am]BILLING CODE 3410–34–P

DEPARTMENT OF THE TREASURY

Office of the Comptroller of theCurrency

12 CFR Part 26

[Docket No. 96–15]

RIN 1557–AB39

FEDERAL RESERVE BOARD

12 CFR Part 212

[Docket No. R–0907]

FEDERAL DEPOSIT INSURANCECORPORATION

12 CFR Part 348

RIN 3064–AB71


Office of Thrift Supervision

12 CFR Part 563f

[Docket No. 96–62]

RIN 1150–AA95

Management Official Interlocks

AGENCIES: Office of the Comptroller ofthe Currency, Treasury; Board ofGovernors of the Federal ReserveSystem; Federal Deposit InsuranceCorporation; Office of ThriftSupervision, Treasury.ACTION: Joint final rule.

SUMMARY: The Office of the Comptrollerof the Currency (OCC), Board ofGovernors of the Federal ReserveSystem (Board), Federal DepositInsurance Corporation (FDIC), andOffice of Thrift Supervision (OTS)(collectively, the agencies) are revisingtheir rules regarding managementinterlocks. This final rule conforms theinterlocks rules to recent statutorychanges, modernizes and clarifies therules, and reduces unnecessaryregulatory burdens where feasible,consistent with statutory requirements.In so doing, it reflects commentsreceived on the proposed rule and theagencies’ further internalconsiderations.EFFECTIVE DATE: This joint rule iseffective October 1, 1996.FOR FURTHER INFORMATION, CONTACT:OCC: Sue E. Auerbach, Senior Attorney,Bank Activities and Structure Division(202) 874–5300; Emily R. McNaughton,National Bank Examiner, Credit &Management Policy (202) 874–5170;Jackie Durham, Senior Licensing PolicyAnalyst (202) 874–5060; or Mark J.Tenhundfeld, Senior Attorney,

Legislative and Regulatory Activities(202) 874–5090, 250 E Street, SW.,Washington, DC 20219.

Board: Thomas M. Corsi, SeniorAttorney (202/452–3275), or Tina Woo,Attorney (202/452–3890), LegalDivision, Board of Governors of theFederal Reserve System. For the hearingimpaired only, TelecommunicationDevice for Deaf (TDD), DorotheaThompson (202/452–3544), Board ofGovernors of the Federal ReserveSystem, 20th and C Streets, NW.,Washington DC 20551.

FDIC: Curtis Vaughn, ExaminationSpecialist, Division of Supervision,(202) 898–6759; or Mark Mellon,Counsel, Regulation and LegislationSection, Legal Division, (202) 898–3854,Federal Deposit Insurance Corporation,550 17th Street, NW., Washington, DC20429.

OTS: David Bristol, Senior Attorney,Business Transactions Division, (202)906–6461; or Donna Deale, ProgramManager, Supervision Policy, (202) 906–7488.


Background

Section 303 of the Riegle CommunityDevelopment and RegulatoryImprovement Act of 1994 (CDRI Act)

Section 303(a) of the CDRI Act (12U.S.C. 4803(a)) requires the agencies toreview their regulations in order tostreamline and modify the regulations toimprove efficiency, reduce unnecessarycosts, and eliminate unwarrantedconstraints on credit availability.Section 303(a) also requires the agenciesto work jointly to make uniform allregulations and guidelinesimplementing common statutory orsupervisory policies. The agencies havereviewed their respective managementinterlocks regulations with thesepurposes in mind and are amending theregulations in ways designed to meetthe goals of section 303(a).

The agencies have made the followingchanges to their respective managementinterlocks rules in order to comply withthe mandate of section 303(a):

• The final rules revise the definitionof ‘‘senior management official’’ toeliminate uncertainty as to when anemployee of a depository institutionwill be considered to be a seniormanagement official for purposes of theDepository Institution ManagementInterlocks Act (12 U.S.C. 3201–3208)(Interlocks Act). Moreover, the finalrules conform this definition todefinitions of similar terms usedelsewhere in the agencies’ regulations.

• The final rules revise the definitionof ‘‘representative or nominee’’ to clarify


1 The agencies completed their review of requestsfor extensions by March 23, 1995, as directed by thestatute. Therefore, the provision regardingextending the grandfather period is moot forpurposes of this regulation.

2 The Board received 10 comments from thepublic, while the OCC, FDIC, and OTS received 6,6, and 4, respectively.

that the agencies will determine that aperson is acting as a representative ornominee on behalf of another persononly when there is an agreement,express or implied, obligating the firstperson to act on the second person’sbehalf with respect to managementresponsibilities.

• The final rules reflect areinterpretation of the Interlocks Act bythe agencies that permits managementinterlocks within a relevantmetropolitan statistical area (MSA)when either of the depositoryinstitutions in the MSA has assets ofless than $20 million (the agenciespreviously interpreted the InterlocksAct to permit interlocks betweenunaffiliated institutions in MSA only ifboth depository institutions have assetsof less than $20 million). This expandsthe pool of available managerial talentfor small depository institutions.

In implementing the Interlocks Act’s‘‘regulatory standards’’ exemption(Regulatory Standards exemption) andthe exemption under a ‘‘managementofficial consignment program’’(Management Consignment exemption),the final rules contain certainpresumptions and define key terms soas to eliminate unnecessary burdens.

The final rules remove the provisionconcerning statutorily grandfatheredmanagement interlocks, given that it isunnecessary in light of the changesmade to the Interlocks Act by the CDRIAct.

The agencies believe that thesechanges will streamline and modifytheir respective management interlocksregulations, thus furthering the goals ofsection 303 of the CDRI Act. Thesechanges are explained more fully in thediscussion of the final rule andcomments received.

Summary of Statutory ChangesThe CDRI Act amended the Interlocks

Act by removing the agencies’ broadauthority to exempt otherwiseimpermissible interlocks and replacingit with the authority to exemptinterlocks under more narrowcircumstances. The CDRI Act alsorequired a depository organization witha ‘‘grandfathered’’ interlock to apply foran extension of the grandfather period ifthe organization wanted to keep theinterlock in place.1

Pursuant to the changes made by theCDRI Act, a depository institutionseeking an exemption from theInterlocks Act’s restrictions must qualify

either for a Regulatory Standardsexemption or a ManagementConsignment exemption. An applicantseeking a Regulatory Standardsexemption must submit a boardresolution certifying that no othercandidate from the relevant communityhas the necessary expertise to serve asa management official, is willing toserve, and is not otherwise prohibitedby the Interlocks Act from serving.Before granting the exemption request,the appropriate agency must find thatthe individual is critical to theinstitution’s safe and sound operations,that the interlock will not produce ananticompetitive effect, and that themanagement official meets anyadditional requirements imposed by theagency. Under the ManagementConsignment exemption, theappropriate agency may permit aninterlock that otherwise would beprohibited by the Interlocks Act if theagency determines that the interlockwould: (1) improve the provision ofcredit to low- and moderate-incomeareas; (2) increase the competitiveposition of a minority- or women-ownedinstitution; or (3) strengthen themanagement of a newly charteredinstitution or an institution that is in anunsafe or unsound condition (see textfollowing ‘‘Management Consignmentexemption’’ in this preamble for adiscussion regarding interlocksinvolving a newly chartered institutionor an institution that is in an unsafe orunsound condition).

The ProposalOn December 29, 1995, the agencies

published a joint notice of proposedrulemaking (proposal) (60 FR 67424) toimplement these statutory changes. Inaddition, the proposal permittedinterlocks involving two institutionslocated in the same relevantmetropolitan statistical area (RMSA) ifthe institutions were not also located inthe same community and if at least oneof the institutions had total assets of lessthan $20 million. Finally, the proposalstreamlined and clarified the agencies’interlocks rules in various respects.

The Final Rule and Comments ReceivedThe agencies received a total of 26

comments,2 some of which were sent tomore than one agency. Commentersoverwhelmingly supported theproposal. A few commenters, whilesupporting the proposal, suggested thatthe agencies make additional changes asdiscussed later in this preamble. Most of

the provisions in the proposal receivedeither no comments or uniformlyfavorable comments. Accordingly,except where noted in the text thatfollows, the agencies have adoptedwithout revision the changes to theirrespective interlocks rules that were setforth in the proposal.

The following discussion summarizesthe amendments to the agencies’management interlock rules and thecomments received.

Authority, Purpose, and Scope

This section in the agencies’ finalrules identifies the Interlocks Act as thestatutory authority for the managementinterlocks regulation. It also states thatthe purpose of the rules governingmanagement interlocks is to fostercompetition between unaffiliatedinstitutions. Finally, this sectionidentifies the types of institutions towhich each agency’s regulation applies.The OCC rule uses the term ‘‘Districtbank’’ to describe banks operating underthe Code of Laws of the District ofColumbia. (See definition of ‘‘Districtbank’’ at § 26.2(k).)

Definitions

Anticompetitive effect

The final rules define the term‘‘anticompetitive effect’’ to mean ‘‘amonopoly or substantial lessening ofcompetition,’’ a definition derived fromthe Bank Merger Act (12 U.S.C. 1828(c)).The term ‘‘anticompetitive effect’’ isused in the Regulatory Standardsexemption. Under the RegulatoryStandards exemption, the appropriateagency may approve a request for anexemption to the Interlocks Act if,among other things, the agency findsthat continuation of service by themanagement official does not producean anticompetitive effect with respect tothe affected institution.

The statute does not define the term‘‘anticompetitive effect,’’ nor does thelegislative history to the CDRI Act pointto a particular definition. The context ofthe Regulatory Standards exemptionsuggests, however, that the agenciesshould apply the term ‘‘anticompetitiveeffect’’ in a manner that permitsinterlocks that present no substantiallessening of competition. By prohibitingan interlock that would result in amonopoly or substantial lessening ofcompetition, the definition preservesthe free flow of credit and other bankingservices that the Interlocks Act isdesigned to protect. Moreover, use of adefinition familiar to the bankingindustry enables the agencies toaccomplish the legislative purpose of


3 See, e.g., 12 U.S.C. 4502(10) (defining‘‘moderate-income’’ in the context of the statuteaddressing government sponsored enterprises).

the Interlocks Act without imposingunnecessary regulatory burdens.

Area Median IncomeThe final rules define ‘‘area median

income’’ as the median family incomefor the MSA in which an institution islocated or the statewidenonmetropolitan median family incomeif an institution is located outside anMSA. The term ‘‘area median income’’is used in the definition of ‘‘low- andmoderate-income areas,’’ which in turnis used in the implementation of theManagement Consignment exemption.

CriticalThe final rules define ‘‘critical’’ as

‘‘important to restoring or maintaining adepository organization’s safe andsound operations.’’ The term ‘‘critical’’is used in the Regulatory Standardsexemption. Under that exemption, theappropriate agency must find that aproposed management official is criticalto the safe and sound operations of theaffected institution. 12 U.S.C.3207(b)(2)(A).

Neither the statute nor its legislativehistory defines ‘‘critical.’’ The agenciesare concerned that a narrowinterpretation of this term would nullifythe Regulatory Standards exemption. Ifsomeone were ‘‘critical’’ to the safe andsound operations of an institution onlyif the institution would fail but for theservice of the person in question, theexemption would have little relevance,because the standard would beimpossible to meet. Given that Congressclearly intended for the RegulatoryStandards exemption to permitinterlocks under some circumstances,the question thus becomes how todefine those circumstances.

The agencies believe that thedefinition adopted in these final rules isconsistent with the legislative intent byinsuring that only persons ofdemonstrated expertise and importanceto the institution’s safe and soundoperations may serve pursuant to aRegulatory Standards exemption.

Depository InstitutionThe final rules make no substantive

change to the definition of ‘‘depositoryinstitution.’’ Two commenters notedthat several of the agencies interpret‘‘depository institution’’ to include onlythose institutions that accept deposits(see, e.g., Board Staff Opinion of March29, 1983, I F.R.R.S. 3–838; OCC No-Objection Letter No. 93–01, October,1993; FDIC Interpretive Letter No. 85–27), and requested that the agenciesclarify that these interpretations will notbe affected by the final rules. The OCC,Board, and FDIC note that the final rules

change neither the definition of‘‘depository institution’’ nor theapplication of that definition, and thatthe interpretations cited remain accuratestatements of the positions of theseagencies.

Low- and Moderate-income AreasThe final rules define this term as a

census tract (or, if an area is not in acensus tract, a block numbering areadelineated by the United States Bureauof the Census) in which the medianfamily income is less than 100 percentof the area median income. This term isused in the Management Consignmentexemption that permits an otherwiseimpermissible interlock if the interlockwould improve the provision of creditto a low- and moderate-income area.The final rules clarify that the agencieswill evaluate whether an area is low- ormoderate-income by comparing themedian family income for the censustract to be helped (or, if there is nocensus tract, the block numbering areadelineated by the United States Bureauof the Census) with the area medianincome. Income data will be derivedfrom the most recent decennial census.

One commenter requested that theagencies use a cutoff of 120 percent ofthe area median income for determiningwhether an area is ‘‘low- or moderate-income.’’ This commenter suggestedthat this higher cutoff would beconsistent with the flexibility vested inthe agencies to implement theManagement Consignment exemption ina way designed to make it easier forinstitutions to serve economicallydisadvantaged areas.

The agencies agree that a cutoff above80 percent of the area median income isappropriate, given that ‘‘low-income’’ isdefined in Title I, Subtitle A of the CDRIAct (titled ‘‘Community DevelopmentBanking and Financial Institutions’’) tomean not more than 80 percent of thearea median income. 12 U.S.C. 4702(17).The agencies believe that Congress, byusing the term ‘‘moderate-income’’ inaddition to ‘‘low-income’’ in section338(b) of the CDRI Act (which createdthe Management Consignmentexemption), intended for that term toapply to an area where the medianfamily income exceeds the cutoff forlow income established elsewhere in theCDRI Act.

The agencies disagree, however, thata cutoff above 100 percent of areamedian income is appropriate. Theagencies continue to believe that the 100percent cutoff proposed best effectuatesthe Congressional purpose of facilitatingthe flow of credit to economicallydisadvantaged areas. Moreover, thethreshold adopted is a commonly used

definition for ‘‘moderate-income’’ inother statutory provisions.3

Management OfficialThe final rules define ‘‘management

official’’ to include a senior executiveofficer, a director, a branch manager, atrustee of an organization under thecontrol of trustees, or any person whohas a representative or nominee servingin such capacity. The definitionexcludes (1) A person whosemanagement functions relate eitherexclusively to the business of retailmerchandising or manufacturing orprincipally to business outside theUnited States of a foreign commercialbank and (2) a person excluded bysection 202(4) of the Interlocks Act (12U.S.C. 3201(4)).

The final rules remove the phrase ‘‘anemployee or officer with managementfunctions,’’ which appeared in theformer rule. In its place, the agencieshave used the term ‘‘senior executiveofficer’’ as defined by each agency in itsregulation pertaining to the prior noticeof changes in senior executive officers,which implement section 32 of theFederal Deposit Insurance Act (FDI Act)(12 U.S.C. 1831i) as added by section914 of the Financial Institutions Reform,Recovery, and Enforcement Act of 1989(FIRREA) (Pub. L. No. 101–73, 103 Stat.183). The agencies have made thischange to eliminate the uncertainty andattendant compliance burden created bythe ambiguous term ‘‘managementfunctions.’’ The final rules incorporatespecific illustrative examples ofpositions at depository organizationsthat will be treated as senior executiveofficers. See 12 CFR 5.51(c)(3) (OCC); 12CFR 225.71(a) (Board); 12 CFR303.14(a)(3) (FDIC); and 12 CFR574.9(a)(2) (OTS). The agencies believethat these definitions will allowdepository organizations to identifyimpermissible interlocks with greatercertainty and thus will enhancecompliance.

One commenter requested that theagencies amend the rules to expand theexemption that exists for individualswhose management functions relate tothe business of retail merchandising ormanufacturing. In response to thisrequest, the agencies carefully reviewedtheir respective rules and concludedthat the rules as drafted are sufficientlybroad to address the concerns expressedby the commenter. This commenter alsorequested that the agencies clarify theprocedures by which someone mayconfirm that an organization complies


4 A community as that term is defined in the rulesis smaller than an RMSA. There may be severalcommunities in one RMSA.

5 The Interlocks Act contains an additionalexemption for savings associations and savings andloan holding companies that have issued stock inconnection with a qualified stock issuance pursuantto section 10(q) of the Home Owners’ Loan Act (12U.S.C. 1467a(q)). See 12 U.S.C. 3204(9). The OTStherefore will continue to list an additionalexemption in its interlocks regulation that the otheragencies do not list. Another exemption providesfor interlocks as a result of an emergencyacquisition of a savings association authorized inaccordance with section 13(k) of the FederalDeposit Insurance Act (12 U.S.C. 1823(k)) if theFDIC has given its approval to the interlock. TheFDIC will continue to list an additional exemptionin its management interlocks regulation that theother agencies do not list.

with the regulation. The agencies notethat an organization may request fromthe appropriate regulator at any timeconfirmation that a given interlockcomplies with applicable law. Theagencies have elected not to impose anyprocedural requirements in theregulation on this type of request.

Relevant Metropolitan Statistical Area(RMSA)

The final rules, like the former rules,define ‘‘relevant metropolitan statisticalarea (RMSA)’’ as an MSA, a primaryMSA, or a consolidated MSA that is notcomprised of designated primary MSAs.However, unlike the former rules, thefinal rules clarify that this definitionwill be used to the extent that the Officeof Management and Budget (OMB)defines and applies the terms MSA,primary MSA, and consolidated MSA.This change reflects the fact that OMBdefines ‘‘consolidated MSA’’ to includetwo or more primary MSAs. Given thata consolidated MSA, by OMB’sdefinition, is comprised of primaryMSAs, the reference to a consolidatedMSA in the Interlocks Act and theagencies’ regulations is inappropriate.The final rules enable the agencies toimplement the statute in a way thatcomplies with both the spirit and theletter of the Interlocks Act.

Representative or NomineeThe final rules define ‘‘representative

or nominee’’ as someone who serves asa management official and has anobligation to act on behalf of someoneelse. The final rules remove the rest ofthe definition that appeared in theformer rule, however, and insert in lieuthereof a statement that the appropriateagency will find that someone has anobligation to act on behalf of someoneelse only if there is an agreement(express or implied) to act on behalf ofanother. This change clarifies that thedetermination of whether someoneserves a representative or nominee willdepend on whether there is a basis toconclude that an agreement exists to acton someone’s behalf.

ProhibitionsThe former rules prohibited interlocks

in the following three instances. First,no two unaffiliated depositoryorganizations may have an interlock ifthey (or their depository institutionaffiliates) have depository institutionoffices in the same community. Second,a depository organization may not havean interlock with any unaffiliateddepository organization if eitherdepository organization has assets of$20 million or more and the depositoryorganizations (or depository institution

affiliates of either) have depositoryinstitution offices in the same RMSA.4Third, if a depository organization hastotal assets exceeding $1 billion, it (andits affiliates) may not have an interlockwith any depository organization withtotal assets exceeding $500 million (oraffiliate thereof), regardless of location.

The final rules amend the restrictionapplicable to institutions with assetsequal to or exceeding $20 million tobetter conform to the purposes of theInterlocks Act. Whereas the former rulesprohibited interlocks in an RMSA if oneof the organizations has total assets of$20 million or more, the final rulesapply the RMSA-wide prohibition onlyif both organizations have total assets of$20 million or more. Interlocks withina community involving unaffiliateddepository organizations will continueto be prohibited, regardless of the sizeof the organizations.

The agencies believe that this changeis consistent with both the language andthe intent of the Interlocks Act. Whilethe statute uses the plural ‘‘depositoryinstitutions’’ in section 203(1) of theInterlocks Act (12 U.S.C. 3202(1)), incontext, the wording is ambiguous andneither the statute nor its legislativehistory compels the conclusion that theinterlock must involve two institutionswith less than $20 million in assetsbefore the less restrictive prohibitionapplies.

The Interlocks Act seeks to prohibitinterlocks that could enable twoinstitutions to engage in anticompetitivebehavior. However, an institution withtotal assets of less than $20 million islikely to derive most of its business fromthe community in which it is locatedand is unlikely to compete withinstitutions that do not have offices inthat community. Therefore, an interlockinvolving one institution with assetsunder $20 million and anotherinstitution with assets of at least $20million not in the same community isnot likely to lead to the anticompetitiveconduct that the Interlocks Act isdesigned to prohibit.

The agencies believe, moreover, thatthe change will promote rather thaninhibit competition. Expanding the poolof managerial talent for institutions withassets under $20 million could enhancethe ability of smaller institutions tocompete by improving the managementof these institutions.

Every comment on this change eithersupported the change withoutqualification or supported the changeand asked the agencies go even farther.

A few commenters suggested that theagencies should raise the assetthresholds discussed earlier and/orprovide blanket exceptions forinstitutions with total assets belowcertain levels. The agencies note that theInterlocks Act, which establishes thethresholds at which the variousprohibitions apply, does not vest theagencies with authority to change theselevels or to exempt classes oforganizations from the statute’sprohibitions. Accordingly, the agencieshave not adopted the changes proposedby these commenters.

Interlocking Relationships ExpresslyPermitted by Statute

The final rules state the exemptionsfound in 12 U.S.C. 3204 (1)–(8).5 Thefinal rules reorder the exemptions setforth in the current regulations in orderto conform the list of exemptions to thelist set forth in the Interlocks Act.

Regulatory Standards Exemption

The final rules set forth therequirements that a depositoryorganization must satisfy in order toobtain a Regulatory Standardsexemption. The rules implement therequirement regarding certification byallowing a depository organization’sboard of directors (or the organizers ofa depository organization that is beingformed) to certify to the appropriateagency that no other qualified candidatehas been found after undertakingreasonable efforts to locate qualifiedcandidates who are not prohibited fromservice under the Interlocks Act. If readnarrowly, the Interlocks Act couldrequire a depository organization toevaluate every person in a given localethat might be qualified and interested.This would create a requirement that, inpractice, would be impossible to satisfy.Given that Congress would not haveincluded an exemption that would haveno practical application, the agenciesbelieve that the ‘‘reasonable efforts’’standard is consistent with thelegislative intent.


6 See, e.g., the OCC’s Bank Merger CompetitiveAnalysis Screen (OCC Advisory Letter 95–4, July18, 1995); Department of Justice Merger Guidelines(49 FR 26823, June 29, 1984) (applied by the Board);FDIC Statement of Policy: Bank MergerTransactions (54 FR 39045, Sept. 22, 1989).

7 This presumption also applies to individualswhose service as a senior executive officer isapproved by the OCC pursuant to the standardconditions imposed on newly chartered nationalbanks and to individuals whose service as amanagement official is approved by the FDIC as acondition of a grant of deposit insurance prior tothe opening of the depository institution.

The final rules also set forthpresumptions that the agencies willapply when reviewing an applicationfor a Regulatory Standards exemption.First, each agency will presume that aninterlock will not have ananticompetitive effect if it involvesinstitutions that, if merged, would nottrigger a challenge from the agencies oncompetitive grounds. This presumptionis unavailable, however, for interlockssubject to the Major Assets prohibition.

Generally, the agencies will not objectto a merger on competitive grounds ifthe post-merger Herfindahl-HirschmanIndex (HHI) for the market is less than1800 and the merger increases the HHIby 200 points or less. This presumptionwill enable applicants to avoid theunnecessary burden of submitting acompetitive analysis in severalinstances. The agencies have found thisHHI benchmark to be a useful guide toevaluating anticompetitive effects ofinterlocks.6 However, the agencies maydecide that this presumption should notbe conclusive in appropriatecircumstances, such as when approvalof an interlock request would lead toseveral institutions being linked byoverlapping management.

Second, the agencies will presumethat a person is critical to aninstitution’s safe and sound operationsif the agencies also approved thatindividual under section 914 of FIRREAand the institution in question eitherwas a newly chartered institution, failedto meet minimum capital requirements,or otherwise was in a ‘‘troubledcondition’’ as defined in the reviewingagency’s section 914 regulation at thetime the section 914 filing wasapproved.7

The final rules also address theduration of an interlock permitted underthe Regulatory Standards exemption.The statute does not require that theseinterlocks terminate. In light of thisopen-ended grant of authority, theagencies have not adopted a specificterm for a permitted exemption. Instead,an agency may require an institution toterminate the interlock if the agencydetermines that the management officialin question either no longer is critical to

the safe and sound operations of theaffected organization or that continuedservice will produce an anticompetitiveeffect. The agencies will provideaffected organizations an opportunity tosubmit information before they make afinal determination to requiretermination of an interlock.

One commenter suggested that theagencies clarify that the 15-month graceperiod that applies when an interlockmust be terminated due to a change incircumstances also applies in the case ofa Regulatory Standards exemption thatmust be terminated. The agencies agreewith the commenter that it isappropriate in most cases to grant agrace period following the terminationof a Regulatory Standards exemption inorder to minimize the disruption of theaffected institution that otherwise mightbe caused by the loss of a managementofficial.

There may be circumstances,however, where immediate terminationof a regulatory standards exemptionwould be appropriate. For instance, ifan organization obtains an exemptionon the basis of misleading information,the organization’s primary regulator willrequire the organization to takeappropriate steps to immediatelyremedy the situation. The final rulesthus provide for the possibility of agrace period, with the caveat that theagencies may, under appropriatecircumstances, order the immediatetermination of a Regulatory Standardsexemption.

Another commenter suggested thatthe agencies limit the term of aRegulatory Standards exemption whenthe exemption is granted. Thiscommenter opined that depositoryorganizations would benefit from thegreater certainty by avoiding questionsconcerning whether a director mustvacate his or her position on a board.The agencies believe that the proceduresin the final rules for terminating aRegulatory Standards exemption willprovide an affected organization withample certainty concerning thepermissibility of continued service.

Grandfathered InterlockingRelationships—Removed

Section 338(a) of the CDRI Actauthorizes the agencies to extend agrandfathered interlock for anadditional five years if the managementofficial in question satisfies the statutorycriteria for obtaining an extension.

The final rules remove the sectionsaddressing the grandfather exemptionbecause they are unnecessary andredundant in light of the statute.Individuals who wished to extend theirexemption already have applied for and

received an exemption if they met thestatutory criteria.

Management Consignment ExemptionThe final rules implement the

Management Consignment exemption,set forth in section 209(c) of theInterlocks Act (12 U.S.C. 3207(c)), byrestating the statutory criteria with threeclarifications. First, the final rules statethat the agencies consider a ‘‘newlychartered institution’’ to be aninstitution that has been chartered forless than two years at the time it filesan application for exemption. Thisstandard is consistent with certain otherbanking agency thresholds fordetermining when an institution isconsidered newly chartered (see, e.g., 12CFR 5.51(d), 225.72(a)(1); 303.14(b)).

Second, the final rules clarify that theexemption available for ‘‘minority- andwomen-owned institutions’’ is availablefor an institution that is owned either byminorities or women. In analyzing theexemptions to the Interlocks Act thatthe Federal banking agencies haveapproved, the House Conference Reportto the CDRI Act (H.R. Conf. Rep. No.652, 103d Cong., 2d Sess. 181 (1994))(Conference Report) states that the typesof institutions that have receivedexemptions include those that are‘‘owned by women or minorities.’’These exemptions ultimately werecodified in the Interlocks Act.Accordingly, the agencies haveconcluded that Congress intended theManagement Consignment exemption toassist institutions owned by womenand/or by minorities, but did not intendto require the institution to be owned byboth.

Third, the final rules permit aninterlock if the interlock wouldstrengthen the management of either anewly chartered institution or aninstitution that is in an unsafe orunsound condition. Section 209(c)(1)(C)of the Interlocks Act (12 U.S.C.3207(c)(1)(C)) permits an exemption ifthe interlock would ‘‘strengthen themanagement of newly charteredinstitutions that are in an unsafe orunsound condition.’’ However, thisprovision contains what appears on itsface to be an error, given that anexemption limited to situationsinvolving newly chartered institutionsthat also are in an unsafe and unsoundcondition would have no practicalutility. The chartering agencies do notapprove an application for a bank orthrift charter unless the applicantseeking a charter can demonstrate thatthe proposed new financial institutionwill operate in a safe and sound mannerfor the foreseeable future. While theremay be an extraordinary instance where


8 This presumption also applies to an individualwhose service as a senior executive officer of anational bank is approved pursuant to the standardconditions imposed by the OCC on newly charterednational banks and to an individual whose serviceas a management official is approved by the FDICas a condition of a grant of deposit insurance priorto the opening of the depository institution.

a newly chartered institutionimmediately experiences unforeseenproblems so severe that they threatenthe safety and soundness of thatinstitution, there is nothing in thelegislative history to suggest thatCongress intended to limit theManagement Consignment exemption tosuch rare instances.

Moreover, the legislative history ofthe CDRI Act suggests that the agenciesare to apply the ManagementConsignment exemption in casesinvolving either newly charteredinstitutions or institutions that are in anunsafe or unsound condition. TheConference Report notes that theagencies have used their exemptiveauthority to grant exemptions in limitedcases where institutions ‘‘areparticularly in need of managementguidance and expertise to operate in asafe and sound manner.’’ Id. TheConference Report goes on to state that‘‘Examples of exceptions permissibleunder an agency management officialconsignment program includeimproving the provision of credit tolow- and moderate-income areas,increasing the competitive position ofminority- and women-ownedinstitutions, and strengthening the [sic]management of newly charteredinstitutions or institutions that are in anunsafe or unsound condition.’’ Id. at 182(emphasis added).

Finally, Congress used theexemptions in the agencies’ currentrules as the model for the ManagementConsignment exemption. See id. at 181–182. These exemptions distinguishnewly chartered institutions frominstitutions that are in an unsafe orunsound condition. The reference in theCDRI Act’s legislative history to thecurrent regulatory exemptions suggeststhat Congress intended to codify theseexemptions.

For these reasons, the agencies willpermit Management Consignmentexemptions if the management officialwill strengthen either a newly charteredinstitution or an institution that is in anunsafe or unsound condition.

The final rules set forth twopresumptions that the agencies willapply in connection with an applicationfor an exemption under theManagement Consignment exemption.First, the agencies will presume that anindividual is capable of strengtheningthe management of an institution thathas been chartered for less than twoyears if the reviewing agency approvedthe individual to serve as a managementofficial of that institution pursuant to

section 914 of FIRREA.8 Second, theagencies will presume that anindividual is capable of strengtheningthe management of an institution that isin an unsafe or unsound condition if thereviewing agency approved theindividual to serve under section 914 asa management official of that institutionat a time when the institution was notin compliance with minimum capitalrequirements or otherwise was in a‘‘troubled condition.’’

The agencies believe thatpresumptions of suitability are lessvalid when applied to the otherManagement Consignment exemptionsbecause there is no reason to concludethat a management official approvedunder section 914 necessarily willimprove the flow of credit to low- andmoderate-income areas or increase thecompetitive position of minority- orwomen-owned institutions. Moreover,the final rules do not contain apresumption regarding effects oncompetition, given that this is not afactor to be considered by the agencieswhen reviewing an application for aManagement Consignment exemption.

The final rules set forth the limits onthe duration of a ManagementConsignment exemption. The InterlocksAct limits a Management Consignmentexemption to two years, with a possibleextension for up to an additional twoyears if the applicant satisfies at leastone of the criteria for obtaining aManagement Consignment exemption.The final rules implement thislimitation by requiring interested partiesto submit an application for anextension at least 30 days before theexpiration of the initial term of theexemption and by clarifying that thepresumptions that apply to initialapplications also apply to extensionapplications.

One commenter suggested that theagencies should be consistent in howthey address the duration of aManagement Consignment exemptionwith how the agencies address theduration of a Regulatory Standardsexemption, and permit a ManagementConsignment exemption to last until theappropriate agency orders the interlockterminated. The statute is clear,however, that a ManagementConsignment exemption may not lastmore than one initial two-year term andone extension of up to an additional two

years in appropriate circumstances.Accordingly, the agencies have notadopted the approach suggested by thecommenter.

Change in CircumstancesThe final rules provide a 15-month

grace period for nongrandfatheredinterlocks that become impermissibledue to a change in circumstances. Thisperiod may be shortened by the agenciesunder appropriate circumstances.

Paperwork Reduction ActOCC: The collection of information

requirements contained in this final rulehave been reviewed and approved bythe Office of Management and Budget inaccordance with the PaperworkReduction Act of 1995 (44 U.S.C.3507(d)) under control number 1557–0196. Comments on the collections ofinformation should be sent to the Officeof Management and Budget, PaperworkReduction Project (1557–0196),Washington, DC 20503, with copies tothe Legislative and Regulatory ActivitiesDivision (1557–0196), Office of theComptroller of the Currency, 250 EStreet, SW, Washington, DC 20219.

The collection of informationrequirements in this final rule are foundin 12 CFR 26.4(h)(1)(i), 26.5(a)(1),26.5(a)(2), 26.6(a), and 26.6(c). Thisinformation is required by the InterlocksAct, and will be used by the OCC toevaluate compliance with therequirements of the Interlocks Act bynational banks and District banks. Thecollections of information are requiredto obtain a benefit.

Respondents are not required torespond to the foregoing collection ofinformation unless it displays acurrently valid OMB control number.The likely respondents are nationalbanks and District banks.

Estimated average annual burdenhours per respondent: 3 hours.

Estimated number of respondents:100.

Start-up costs to respondents: None.Board: In accordance with section

3506 of the Paperwork Reduction Act of1995 (44 U.S.C. Ch. 35; 5 CFR 1320Appendix A.1), the Board reviewed thefinal rule under the authority delegatedto the Board by the Office ofManagement and Budget. Comments onthe collections of information should besent to the Office of Management andBudget, Paperwork Reduction Project(7100–0046, 7100–0134, 7100–0171,7100–0266), Washington, DC 20503,with copies of such comments to be sentto Mary M. McLaughlin, FederalReserve Board Clearance Officer,Division of Research and Statistics, MailStop 97, Board of Governors of the


Federal Reserve System, Washington,DC 20551.

The collection of informationrequirements in this final rule are foundin 12 CFR 212.4(h)(1)(i), 212.5(a)(1),212.5(a)(2), 212.6(a), and 212.6(c). Thisinformation is required to evidencecompliance with the requirements of theInterlocks Act as amended by section338 of the CDRI Act. The respondentsare state member banks and subsidiarydepository institutions of bank holdingcompanies.

Currently, information onmanagement official interlocks isgathered as a part of the followingapplications: membership in the FederalReserve System (OMB No. 7100–0046);state member bank mergers (OMB No.7100–0266); changes in bank control(OMB No. 7100–0134); and bankholding company acquisitions ofdepository institutions (OMB No. 7100–0171). The estimated portion of burdenfor each application that is attributableto management interlocks averages 4hours, and the burden ranges from asmuch as 6 hours to as little as 0.5 hours.It is estimated that 822 applications arefiled annually, with an estimate of 3,288hours of annual burden. Based on anhourly cost of $20, the annual cost tothe public is estimated to be $65,760.The Federal Reserve believes that thefinal rule will have a minimal effect onrespondent burden.

The Federal Reserve may not conductor sponsor, and an organization is notrequired to respond to, theseinformation collections unless theydisplay currently valid OMB controlnumbers.

No issues of confidentiality under theprovisions of the Freedom ofInformation Act normally arise for theapplications.

FDIC: The collections of informationcontained in this final rule have beenreviewed and approved by the Office ofManagement and Budget under controlnumber 3064–0118 in accordance withthe Paperwork Reduction Act of 1995(44 U.S.C. 3507(d)). Comments on thecollections of information should besent to the Office of Management andBudget, Paperwork Reduction Project(3604–0118), Washington, DC 20503,with copies of such comments to be sentto Steven F. Hanft, Office of theExecutive Secretary, Room F–453,Federal Deposit Insurance Corporation,550 17th Street, NW., Washington, DC20429.

The collection of informationrequirements in this final rule are foundin 12 CFR 348.4(i)(1)(i), 348.5(a)(1),348.5(a)(2), 348.6(a), and 348.6(c). Thisinformation is required by the InterlocksAct as amended by section 338 of the

CDRI Act, and will be used by the FDICto evaluate compliance with therequirements of the Interlocks Act byinsured nonmember banks. The likelyrespondents are insured nonmemberbanks.

Estimated number of respondents: 6applicants per year.

Estimated average annual burden perrespondent: 4 hours.

Estimated annual frequency ofrecordkeeping: Not applicable (one-timeapplication).

Estimated total annual recordkeepingburden: 24 hours.

OTS: The collection of informationrequirements contained in this rule havebeen reviewed and approved by theOffice of Management and Budget forreview in accordance with thePaperwork Reduction Act of 1995 (44U.S.C. 3507(d)). Comments on thecollection of information should be sentto the Office of Management andBudget, Paperwork Reduction Project(1550–0051), Washington, DC 20503,with copies to the BusinessTransactions Division (1550–0051),Office of Thrift Supervision, 1700 GStreet, NW., Washington, DC.

The collection of informationrequirements in this final rule are foundin 12 CFR 563f.4(h)(1)(i), 563f.5(a)(1),563f.5(a)(2), 563f.6(a), and 563f.6(c).This information is required by theInterlocks Act, and will be used by theOTS to evaluate compliance with therequirements of the Interlocks Act bysavings associations. The collections ofinformation are required to obtain abenefit.

Respondents are not required torespond to the foregoing collection ofinformation unless it displays acurrently valid OMB control number.The likely respondents are savingsassociations.

Estimated average annual burdenhours per respondent: 4 hours.

Estimated number of respondents: 8.Start-up costs to respondents: None.

Regulatory Flexibility ActPursuant to section 605(b) of the

Regulatory Flexibility Act (RFA) (5U.S.C. 605(b)), the regulatory flexibilityanalysis otherwise required undersection 603 of the RFA (5 U.S.C. 603) isnot required if the head of the agencycertifies that the rule will not have asignificant economic impact on asubstantial number of small entities andthe agency publishes such certificationand a succinct statement explaining thereasons for such certification in theFederal Register along with its finalrule.

Pursuant to section 605(b) of the RFA,the agencies hereby certify that this rule

will not have a significant economicimpact on a substantial number of smallentities. The agencies expect that thisrule will not (1) have significantsecondary or incidental effects on asubstantial number of small entities or(2) create any additional burden onsmall entities. The changes to theexemptions are required by theInterlocks Act. The agencies have addedpresumptions that will streamline andsimplify the application procedures forobtaining an exemption from theInterlocks Act prohibitions, and havedefined key terms used in theprovisions implementing theseexemptions in a way that is intended toeliminate any unnecessary burden. Asnoted in the preamble discussion of thechanges made by the final rule, theagencies have made substantive changesthat will permit more flexibility toinstitutions with total assets of less than$20 million, clarified the circumstancesunder which someone will be deemedto be a ‘‘representative or nominee,’’ andamended the definition of ‘‘seniormanagement official’’ so as to providegreater clarity and to conform thisdefinition with definitions of similarterms used in other regulations.

The impact of these changes will beto minimize, to the extent possible, thecosts of complying with this final rule.


OCC and OTS: The OCC and OTShave determined that this rule is not asignificant regulatory action underExecutive Order 12866.

Unfunded Mandates Act of 1995

OCC and OTS: Section 202 of theUnfunded Mandates Act of 1995(Unfunded Mandates Act) requires thatan agency prepare a budgetary impactstatement before promulgating a rulelikely to result in a Federal mandate thatmay result in the annual expenditure of$100 million or more in any one year byState, local, and tribal governments, inthe aggregate, or by the private sector. Ifa budgetary impact statement isrequired, section 205 of the UnfundedMandates Act requires an agency toidentify and consider a reasonablenumber of alternatives beforepromulgating the rule.

The OCC and OTS have determinedthat this final rule will not result inexpenditures by State, local, and tribalgovernments, or by the private sector, ofmore than $100 million in any one year.Accordingly, neither the OCC nor theOTS has prepared a budgetary impactstatement or specifically addressed theregulatory alternatives considered.


List of Subjects

12 CFR Part 26

Antitrust, Banks, banking, Holdingcompanies, Management officialinterlocks, National banks.

12 CFR Part 212

Antitrust, Banks, banking, Holdingcompanies, Management officialinterlocks.

12 CFR Part 348

Antitrust, Banks, banking, Holdingcompanies.

12 CFR Part 563f

Antitrust, Holding companies,Management official interlocks, Savingsassociations.

Office of the Comptroller of theCurrency

12 CFR Chapter I

Authority and IssuanceFor the reasons set out in the joint

preamble, the OCC revises part 26 ofchapter I of title 12 of the Code ofFederal Regulations to read as follows:

PART 26—MANAGEMENT OFFICIALINTERLOCKS

Sec.26.1 Authority, purpose, and scope.26.2 Definitions.26.3 Prohibitions.26.4 Interlocking relationships permitted by

statute.26.5 Regulatory Standards exemption.26.6 Management Consignment exemption.26.7 Change in circumstances.26.8 Enforcement.

Authority: 12 U.S.C. 93a and 3201–3208.

§ 26.1 Authority, purpose, and scope.(a) Authority. This part is issued

under the provisions of the DepositoryInstitution Management Interlocks Act(Interlocks Act) (12 U.S.C. 3201 et seq.),as amended, and the OCC’s generalrulemaking authority in 12 U.S.C. 93a.

(b) Purpose. The purpose of theInterlocks Act and this part is to fostercompetition by generally prohibiting amanagement official from serving twononaffiliated depository organizationsin situations where the managementinterlock likely would have ananticompetitive effect.

(c) Scope. This part applies tomanagement officials of national banks,District banks, and affiliates of either.

§ 26.2 Definitions.For purposes of this part, the

following definitions apply:(a) Affiliate. (1) The term affiliate has

the meaning given in section 202 of theInterlocks Act (12 U.S.C. 3201). For

purposes of that section 202, shares heldby an individual include shares held bymembers of his or her immediate family.‘‘Immediate family’’ means spouse,mother, father, child, grandchild, sister,brother, or any of their spouses, whetheror not any of their shares are held intrust.

(2) For purposes of section 202(3)(B)of the Interlocks Act (12 U.S.C.3201(3)(B)), an affiliate relationshipinvolving a national bank based oncommon ownership does not exist if theOCC determines, after giving theaffected persons the opportunity torespond, that the asserted affiliation wasestablished in order to avoid theprohibitions of the Interlocks Act anddoes not represent a true commonalityof interest between the depositoryorganizations. In making thisdetermination, the OCC considers,among other things, whether a person,including members of his or herimmediate family, whose shares arenecessary to constitute the group ownsa nominal percentage of the shares ofone of the organizations and thepercentage is substantiallydisproportionate to that person’sownership of shares in the otherorganization.

(b) Anticompetitive effect means amonopoly or substantial lessening ofcompetition.

(c) Area median income means:(1) The median family income for the

metropolitan statistical area (MSA), if adepository organization is located in anMSA; or

(2) The statewide nonmetropolitanmedian family income, if a depositoryorganization is located outside an MSA.

(d) Community means a city, town, orvillage, and contiguous or adjacentcities, towns, or villages.

(e) Contiguous or adjacent cities,towns, or villages means cities, towns,or villages whose borders touch eachother or whose borders are within 10road miles of each other at their closestpoints. The property line of an officelocated in an unincorporated city, town,or village is the boundary line of thatcity, town, or village for the purpose ofthis definition.

(f) Critical means important torestoring or maintaining a depositoryorganization’s safe and soundoperations.

(g) Depository holding companymeans a bank holding company or asavings and loan holding company (asmore fully defined in section 202 of theInterlocks Act (12 U.S.C. 3201)) havingits principal office located in the UnitedStates.

(h) Depository institution means acommercial bank (including a private

bank), a savings bank, a trust company,a savings and loan association, abuilding and loan association, ahomestead association, a cooperativebank, an industrial bank, or a creditunion, chartered under the laws of theUnited States and having a principaloffice located in the United States.Additionally, a United States office,including a branch or agency, of aforeign commercial bank is a depositoryinstitution.

(i) Depository institution affiliatemeans a depository institution that is anaffiliate of a depository organization.

(j) Depository organization means adepository institution or a depositoryholding company.

(k) District bank means any State bankoperating under the Code of Law of theDistrict of Columbia.

(l) Low- and moderate-income areasmeans census tracts (or, if an area is notin a census tract, block numbering areasdelineated by the United States Bureauof the Census) where the median familyincome is less than 100 percent of thearea median income.

(m) Management official. (1) The termmanagement official means:

(i) A director;(ii) An advisory or honorary director

of a depository institution with totalassets of $100 million or more;

(iii) A senior executive officer as thatterm is defined in 12 CFR 5.51(c)(3);

(iv) A branch manager;(v) A trustee of a depository

organization under the control oftrustees; and

(vi) Any person who has arepresentative or nominee serving inany of the capacities in this paragaph(m)(1).

(2) The term management officialdoes not include:

(i) A person whose managementfunctions relate exclusively to thebusiness of retail merchandising ormanufacturing;

(ii) A person whose managementfunctions relate principally to thebusiness outside the United States of aforeign commercial bank; or

(iii) A person described in theprovisos of section 202(4) of theInterlocks Act (12 U.S.C. 3201(4))(referring to an officer of a State-chartered savings bank, cooperativebank, or trust company that neithermakes real estate mortgage loans noraccepts savings).

(n) Office means a principal or branchoffice of a depository institution locatedin the United States. Office does notinclude a representative office of aforeign commercial bank, an electronicterminal, or a loan production office.

(o) Person means a natural person,corporation, or other business entity.


(p) Relevant metropolitan statisticalarea (RMSA) means an MSA, a primaryMSA, or a consolidated MSA that is notcomprised of designated primary MSAsto the extent that these terms aredefined and applied by the Office ofManagement and Budget.

(q) Representative or nominee meansa natural person who serves as amanagement official and has anobligation to act on behalf of anotherperson with respect to managementresponsibilities. The OCC will find thata person has an obligation to act onbehalf of another person only if the firstperson has an agreement, express orimplied, to act on behalf of the secondperson with respect to managementresponsibilities. The OCC willdetermine, after giving the affectedpersons an opportunity to respond,whether a person is a representative ornominee.

(r) Total assets. (1) The term totalassets means assets measured on aconsolidated basis and reported in themost recent fiscal year-end ConsolidatedReport of Condition and Income.

(2) The term total assets does notinclude:

(i) Assets of a diversified savings andloan holding company as defined bysection 10(a)(1)(F) of the Home Owners’Loan Act (12 U.S.C. 1467a(a)(1)(F))other than the assets of its depositoryinstitution affiliate;

(ii) Assets of a bank holding companythat is exempt from the prohibitions ofsection 4 of the Bank Holding CompanyAct of 1956 pursuant to an order issuedunder section 4(d) of that Act (12 U.S.C.1843(d)) other than the assets of itsdepository institution affiliate; or

(iii) Assets of offices of a foreigncommercial bank other than the assetsof its United States branch or agency.

(s) United States means the UnitedStates of America, any State or territoryof the United States of America, theDistrict of Columbia, Puerto Rico,Guam, American Samoa, and the VirginIslands.

§ 26.3 Prohibitions.(a) Community. A management

official of a depository organization maynot serve at the same time as amanagement official of an unaffiliateddepository organization if thedepository organizations in question (ora depository institution affiliate thereof)have offices in the same community.

(b) RMSA. A management official of adepository organization may not serve atthe same time as a management officialof an unaffiliated depositoryorganization if the depositoryorganizations in question (or adepository institution affiliate thereof)

have offices in the same RMSA and eachdepository organization has total assetsof $20 million or more.

(c) Major assets. A managementofficial of a depository organizationwith total assets exceeding $1 billion (orany affiliate thereof) may not serve atthe same time as a management officialof an unaffiliated depositoryorganization with total assets exceeding$500 million (or any affiliate thereof),regardless of the location of the twodepository organizations.

§ 26.4 Interlocking relationships permittedby statute.

The prohibitions of § 26.3 do notapply in the case of any one or more ofthe following organizations or to asubsidiary thereof:

(a) A depository organization that hasbeen placed formally in liquidation, orwhich is in the hands of a receiver,conservator, or other official exercisinga similar function;

(b) A corporation operating undersection 25 or section 25A of the FederalReserve Act (12 U.S.C. 601 et seq. and12 U.S.C. 611 et seq., respectively) (EdgeCorporations and AgreementCorporations);

(c) A credit union being served by amanagement official of another creditunion;

(d) A depository organization thatdoes not do business within the UnitedStates except as an incident to itsactivities outside the United States;

(e) A State-chartered savings and loanguaranty corporation;

(f) A Federal Home Loan Bank or anyother bank organized solely to servedepository institutions (a bankers’ bank)or solely for the purpose of providingsecurities clearing services and servicesrelated thereto for depositoryinstitutions and securities companies;

(g) A depository organization that isclosed or is in danger of closing asdetermined by the appropriate Federaldepository institutions regulatoryagency and is acquired by anotherdepository organization. This exemptionlasts for five years, beginning on thedate the depository organization isacquired; and

(h)(1) A diversified savings and loanholding company (as defined in section10(a)(1)(F) of the Home Owners’ LoanAct (12 U.S.C. 1467a(a)(1)(F)) withrespect to the service of a director ofsuch company who also is a director ofan unaffiliated depository organizationif:

(i) Both the diversified savings andloan holding company and theunaffiliated depository organizationnotify their appropriate Federaldepository institutions regulatory

agency at least 60 days before the dualservice is proposed to begin; and

(ii) The appropriate regulatory agencydoes not disapprove the dual servicebefore the end of the 60-day period.

(2) The OCC may disapprove a noticeof proposed service if it finds that:

(i) The service cannot be structured orlimited so as to preclude ananticompetitive effect in financialservices in any part of the United States;

(ii) The service would lead tosubstantial conflicts of interest or unsafeor unsound practices; or

(iii) The notificant failed to furnish allthe information required by the OCC.

(3) The OCC may require that anyinterlock permitted under thisparagraph (h) be terminated if a changein circumstances occurs with respect toone of the interlocked depositoryorganizations that would have provideda basis for disapproval of the interlockduring the notice period.

§ 26.5 Regulatory Standards exemption.(a) Criteria. The OCC may permit an

interlock that otherwise would beprohibited by the Interlocks Act and§ 26.3 if:

(1) The board of directors of thedepository organization (or theorganizers of a depository organizationbeing formed) that seeks the exemptionprovides a resolution to the OCCcertifying that the organization, after theexercise of reasonable efforts, is unableto locate any other candidate from thecommunity or RMSA, as appropriate,who:

(i) Possesses the level of expertiserequired by the depository organizationand who is not prohibited from serviceby the Interlocks Act; and

(ii) Is willing to serve as amanagement official; and

(2) The OCC, after reviewing anapplication submitted by the depositoryorganization seeking the exemption,determines that:

(i) The management official is criticalto the safe and sound operations of theaffected depository organization; and

(ii) Service by the managementofficial will not produce ananticompetitive effect with respect tothe depository organization.

(b) Presumptions. The OCC appliesthe following presumptions whenreviewing any application for aRegulatory Standards exemption:

(1) An interlock will not have ananticompetitive effect if it involvesdepository organizations that, if merged,would not cause the post-mergerHerfindahl-Hirschman Index (HHI) toexceed 1800 and would not cause theHHI to increase by more than 200points. This presumption does not


apply to depository organizationssubject to the Major Assets prohibitionof § 26.3(c).

(2) A proposed management official iscritical to the safe and sound operationsof a depository institution if:

(i) That official is approved by theOCC to serve as a director or seniorexecutive officer of that institutionpursuant to 12 CFR 5.51 or pursuant toconditions imposed on a newlychartered national bank; and

(ii) The institution had operated forless than two years, was not incompliance with minimum capitalrequirements, or otherwise was in a‘‘troubled condition’’ as defined in 12CFR 5.51 at the time the service underthat section was approved.

(c) Duration of interlock. An interlockpermitted under this section maycontinue until the OCC notifies theaffected depository organizationsotherwise. The OCC may require anational bank to terminate any interlockpermitted under this section if the OCCconcludes, after giving the affectedpersons the opportunity to respond, thatthe determinations under paragraph(a)(2) of this section no longer may bemade. A management official maycontinue serving the depositoryorganization involved in the interlockfor a period of 15 months following thedate of the order to terminate theinterlock. The OCC may shorten thisperiod under appropriatecircumstances.

§ 26.6 Management Consignmentexemption.

(a) Criteria. The OCC may permit aninterlock that otherwise would beprohibited by the Interlocks Act and§ 26.3 if the OCC, after reviewing anapplication submitted by the depositoryorganization seeking an exemption,determines that the interlock would:

(1) Improve the provision of credit tolow- and moderate-income areas;

(2) Increase the competitive positionof a minority- or women-owneddepository organization;

(3) Strengthen the management of adepository institution that has beenchartered for less than two years at thetime an application is filed under thispart; or

(4) Strengthen the management of adepository institution that is in anunsafe or unsound condition asdetermined by the OCC on a case-by-case basis.

(b) Presumptions. The OCC appliesthe following presumptions whenreviewing any application for aManagement Consignment exemption:

(1) A proposed management official iscapable of strengthening the

management of a depository institutiondescribed in paragraph (a)(3) of thissection if that official is approved by theOCC to serve as a director or seniorexecutive officer of that institutionpursuant to 12 CFR 5.51 or pursuant toconditions imposed on a newlychartered national bank and theinstitution had operated for less thantwo years at the time the service under12 CFR 5.51 was approved; and

(2) A proposed management official iscapable of strengthening themanagement of a depository institutiondescribed in paragraph (a)(4) of thissection if that official is approved by theOCC to serve as a director or seniorexecutive officer of that institutionpursuant to 12 CFR 5.51 and theinstitution was not in compliance withminimum capital requirements orotherwise was in a ‘‘troubled condition’’as defined under 12 CFR 5.51 at thetime service under that section wasapproved.

(c) Duration of interlock. An interlockgranted under this section may continuefor a period of two years from the dateof approval. The OCC may extend thisperiod for one additional two-yearperiod if the depository organizationapplies for an extension at least 30 daysbefore the current exemption expiresand satisfies one of the criteria specifiedin paragraph (a) of this section. Theprovisions set forth in paragraph (b) ofthis section also apply to applicationsfor extensions.

§ 26.7 Change in circumstances.(a) Termination. A management

official shall terminate his or her serviceor apply for an exemption to theInterlocks Act if a change incircumstances causes the service tobecome prohibited under that Act. Achange in circumstances may include,but is not limited to, an increase in assetsize of an organization, a change in thedelineation of the RMSA or community,the establishment of an office, anacquisition, a merger, a consolidation,or any reorganization of the ownershipstructure of a depository organizationthat causes a previously permissibleinterlock to become prohibited.

(b) Transition period. A managementofficial described in paragraph (a) of thissection may continue to serve thedepository organization involved in theinterlock for 15 months following thedate of the change in circumstances.The OCC may shorten this period underappropriate circumstances.

§ 26.8 Enforcement.Except as provided in this section, the

OCC administers and enforces theInterlocks Act with respect to national

banks, District banks, and affiliates ofeither, and may refer any case of aprohibited interlocking relationshipinvolving these entities to the AttorneyGeneral of the United States to enforcecompliance with the Interlocks Act andthis part. If an affiliate of a nationalbank or a District bank is subject to theprimary regulation of another Federaldepository organization supervisoryagency, then the OCC does notadminister and enforce the InterlocksAct with respect to that affiliate.

Dated: July 22, 1996.Eugene A. Ludwig,Comptroller of the Currency.

Federal Reserve System

12 CFR Chapter II

Authority and IssuanceFor the reasons set forth in the joint

preamble, the Board revises part 212 ofchapter II of title 12 of the Code ofFederal Regulations to read as follows:


Sec.212.1 Authority, purpose, and scope.212.2 Definitions.212.3 Prohibitions.212.4 Interlocking relationships permitted

by statute.212.5 Regulatory Standards exemption.212.6 Management Consignment

exemption.212.7 Change in circumstances.212.8 Enforcement.212.9 Effect of Interlocks Act on Clayton

Act.Authority: 12 U.S.C. 3201–3208; 15 U.S.C.

19.

§ 212.1 Authority, purpose, and scope.(a) Authority. This part is issued

under the provisions of the DepositoryInstitution Management Interlocks Act(Interlocks Act) (12 U.S.C. 3201 et seq.),as amended.


(c) Scope. This part applies tomanagement officials of state memberbanks, bank holding companies, andtheir affiliates.

§ 212.2 Definitions.For purposes of this part, the


the meaning given in section 202 of theInterlocks Act (12 U.S.C. 3201). Forpurposes of that section 202, shares held


by an individual include shares held bymembers of his or her immediate family.‘‘Immediate family’’ means spouse,mother, father, child, grandchild, sister,brother, or any of their spouses, whetheror not any of their shares are held intrust.

(2) For purposes of section 202(3)(B)of the Interlocks Act (12 U.S.C.3201(3)(B)), an affiliate relationshipbased on common ownership does notexist if the Board determines, aftergiving the affected persons theopportunity to respond, that theasserted affiliation was established inorder to avoid the prohibitions of theInterlocks Act and does not represent atrue commonality of interest betweenthe depository organizations. In makingthis determination, the Board considers,among other things, whether a person,including members of his or herimmediate family, whose shares arenecessary to constitute the group ownsa nominal percentage of the shares ofone of the organizations and thepercentage is substantiallydisproportionate to that person’sownership of shares in the otherorganization.





(d) Community means a city, town, orvillage, and contiguous and adjacentcities, towns, or villages.


(f) Critical, as used in § 212.5, meansimportant to restoring or maintaining adepository organization’s safe andsound operations.


(h) Depository institution means acommercial bank (including a privatebank), a savings bank, a trust company,a savings and loan association, a

building and loan association, ahomestead association, a cooperativebank, an industrial bank, or a creditunion, chartered under the laws of theUnited States and having a principaloffice located in the United States.Additionally, a United States office,including a branch or agency, of aforeign commercial bank is a depositoryinstitution.



(k) Low- and moderate-income areasmeans census tracts (or, if an area is notin a census tract, block numbering areasdelineated by the United States Bureauof the Census) where the median familyincome is less than 100 percent of thearea median income.

(l) Management official. (1) The termmanagement official means:



(iii) A senior executive officer as thatterm is defined in 12 CFR 225.71(a);



(vi) Any person who has arepresentative or nominee, as defined inparagraph (p) of this section, serving inany of the capacities in this paragraph(l)(1).



(ii) A person whose managementfunctions relate principally to a foreigncommercial bank’s business outside theUnited States; or

(iii) A person described in theprovisos of section 202(4) of theInterlocks Act (referring to an officer ofa State-chartered savings bank,cooperative bank, or trust company thatneither makes real estate mortgage loansnor accepts savings).

(m) Office means a principal orbranch office of a depository institutionlocated in the United States. Office doesnot include a representative office of aforeign commercial bank, an electronicterminal, a loan production office, orany office of a depository holdingcompany.

(n) Person means a natural person,corporation, or other business entity.

(o) Relevant metropolitan statisticalarea (RMSA) means an MSA, a primary

MSA, or a consolidated MSA that is notcomprised of designated Primary MSAsto the extent that these terms aredefined and applied by the Office ofManagement and Budget.

(p) Representative or nominee meansa natural person who serves as amanagement official and has anobligation to act on behalf of anotherperson with respect to managementresponsibilities. The Board will findthat a person has an obligation to act onbehalf of another person only if the firstperson has an agreement, express orimplied, to act on behalf of the secondperson with respect to managementresponsibilities. The Board willdetermine, after giving the affectedpersons an opportunity to respond,whether a person is a representative ornominee.

(q) Total assets. (1) The term totalassets means assets measured on aconsolidated basis and reported in themost recent fiscal year-end ConsolidatedReport of Condition and Income.





(r) United States means the UnitedStates of America, any State or territoryof the United States of America, theDistrict of Columbia, Puerto Rico,Guam, American Samoa, and the VirginIslands.

§ 212.3 Prohibitions.

(a) Community. A managementofficial of a depository organization maynot serve at the same time as amanagement official of an unaffiliateddepository organization if thedepository organizations in question (ora depository institution affiliate thereof)have offices in the same community.

(b) RMSA. A management official of adepository organization may not serve atthe same time as a management officialof an unaffiliated depositoryorganization if the depositoryorganizations in question (or adepository institution affiliate thereof)have offices in the same RMSA and each


depository organization has total assetsof $20 million or more.


§ 212.4 Interlocking relationshipspermitted by statute.








(g) A depository organization that isclosed or is in danger of closing asdetermined by the appropriate Federaldepository institution’s regulatoryagency and is acquired by anotherdepository organization. This exemptionlasts for five years, beginning on thedate the depository organization isacquired; and


(i) Both the diversified savings andloan holding company and theunaffiliated depository organizationnotify their appropriate Federaldepository institutions regulatory

agency at least 60 days before the dualservice is proposed to begin; and


(2) The Board may disapprove anotice of proposed service if it findsthat:



(iii) The notificant failed to furnish allthe information required by the Board.

(3) The Board may require that anyinterlock permitted under thisparagraph (h) be terminated if a changein circumstances occurs with respect toone of the interlocked depositoryorganizations that would have provideda basis for disapproval of the interlockduring the notice period.

§ 212.5 Regulatory Standards exemption.(a) Criteria. The Board may permit an


(1) The board of directors of thedepository organization (or theorganizers of a depository organizationbeing formed) that seeks the exemptionprovides a resolution to the Boardcertifying that the organization, after theexercise of reasonable efforts, is unableto locate any other candidate from thecommunity or RMSA, as appropriate,who:



(2) The Board, after reviewing anapplication submitted by the depositoryorganization seeking the exemption,determines that:



(b) Presumptions. The Board appliesthe following presumptions whenreviewing any application for aRegulatory Standards exemption:

(1) An interlock will not have ananticompetitive effect if it involvesdepository organizations that, if merged,would not cause the post-mergerHerfindahl-Hirschman Index (HHI) toexceed 1800 and would not cause theHHI to increase by more than 200

points. This presumption does notapply to depository organizationssubject to the Major Assets prohibitionof § 212.3(c).


(i) That official is approved by theBoard to serve as a director or seniorexecutive officer of that institutionpursuant to 12 CFR 225.71; and


(c) Duration of interlock. An interlockpermitted under this section maycontinue until the Board notifies theaffected depository organizationsotherwise. The Board may requiretermination of any interlock permittedunder this section if the Boardconcludes, after giving the affectedpersons the opportunity to respond, thatthe determinations under paragraph(a)(2) of this section no longer may bemade. A management official maycontinue serving the depositoryorganization involved in the interlockfor a period of 15 months following thedate of the order to terminate theinterlock. The Board may shorten thisperiod under appropriatecircumstances.


(a) Criteria. The Board may permit aninterlock that otherwise would beprohibited by the Interlocks Act and§ 212.3 if the Board, after reviewing anapplication submitted by the depositoryorganization seeking an exemption,determines that the interlock would:




(4) Strengthen the management of adepository institution that is in anunsafe or unsound condition asdetermined by the Board on a case-by-case basis.

(b) Presumptions. The Board appliesthe following presumptions inreviewing any application for aManagement Consignment exemption:

(1) A proposed management official iscapable of strengthening themanagement of a depository institution


described in paragraph (a)(3) of thissection if that official is approved by theBoard to serve as a director or seniorexecutive officer of that institutionpursuant to 12 CFR 225.71 and theinstitution had operated for less thantwo years at the time the service wasapproved; and

(2) A proposed management official iscapable of strengthening themanagement of a depository institutiondescribed in paragraph (a)(4) of thissection if the official is approved by theBoard to serve as a director or seniorexecutive officer of the institutionpursuant to 12 CFR 225.71 and theinstitution was not in compliance withminimum capital requirements orotherwise was in a ‘‘troubled condition’’as defined under 12 CFR 225.71 at thetime service was approved.

(c) Duration of interlock. An interlockgranted under this section may continuefor a period of two years from the dateof approval. The Board may extend thisperiod for one additional two-yearperiod if the depository organizationapplies for an extension at least 30 daysbefore the current exemption expiresand satisfies one of the criteria specifiedin paragraph (a) of this section. Theprovisions set forth in paragraph (b) ofthis section also apply to applicationsfor extensions.



(b) Transition period. A managementofficial described in paragraph (a) of thissection may continue to serve the statemember bank or bank holding companyinvolved in the interlock for 15 monthsfollowing the date of the change incircumstances. The Board may shortenthis period under appropriatecircumstances.


Board administers and enforces theInterlocks Act with respect to statemember banks, bank holdingcompanies, and affiliates of either, andmay refer any case of a prohibited

interlocking relationship involvingthese entities to the Attorney General ofthe United States to enforce compliancewith the Interlocks Act and this part. Ifan affiliate of a state member bank or abank holding company is subject to theprimary regulation of another Federaldepository organization supervisoryagency, then the Board does notadminister and enforce the InterlocksAct with respect to that affiliate.

§ 212.9 Effect of Interlocks Act on ClaytonAct.

The Board regards the provisions ofthe first three paragraphs of section 8 ofthe Clayton Act (15 U.S.C. 19) to havebeen supplanted by the revised andmore comprehensive prohibitions onmanagement official interlocks betweendepository organizations in theInterlocks Act.

Dated: July 10, 1996.William W. Wiles,Secretary of the Board.

Federal Deposit Insurance Corporation

12 CFR Chapter III

Authority and Issuance

For the reasons set forth in the jointpreamble, pursuant to its authorityunder section 209 of the DepositoryInstitution Management Interlocks Act(12 U.S.C. 3207), the Board of Directorsof the FDIC revises part 348 of chapterIII of title 12 of the Code of FederalRegulations to read as follows:


Sec.348.1 Authority, purpose, and scope.348.2 Definitions.348.3 Prohibitions.348.4 Interlocking relationships permitted

by statute.348.5 Regulatory Standards exemption.348.6 Management Consignment

exemption.348.7 Change in circumstances.348.8 Enforcement.

Authority: 12 U.S.C. 3207, 12 U.S.C.1823(k).

§ 348.1 Authority, purpose, and scope.

(a) Authority. This part is issuedunder the provisions of the DepositoryInstitution Management Interlocks Act(Interlocks Act) (12 U.S.C. 3201 et seq.),as amended.


(c) Scope. This part applies tomanagement officials of insurednonmember banks and their affiliates.

§ 348.2 Definitions.

For purposes of this part, thefollowing definitions apply:

(a) Affiliate. (1) The term affiliate hasthe meaning given in section 202 of theInterlocks Act (12 U.S.C. 3201). Forpurposes of section 202, shares held byan individual include shares held bymembers of his or her immediate family.‘‘Immediate family’’ means spouse,mother, father, child, grandchild, sister,brother or any of their spouses, whetheror not any of their shares are held intrust.

(2) For purposes of section 202(3)(B)of the Interlocks Act (12 U.S.C.3201(3)(B)), an affiliate relationshipinvolving an insured nonmember bankbased on common ownership does notexist if the FDIC determines, after givingthe affected persons the opportunity torespond, that the asserted affiliation wasestablished in order to avoid theprohibitions of the Interlocks Act anddoes not represent a true commonalityof interest between the depositoryorganizations. In making thisdetermination, the FDIC considers,among other things, whether a person,including members of his or herimmediate family whose shares arenecessary to constitute the group, ownsa nominal percentage of the shares ofone of the organizations and thepercentage is substantiallydisproportionate to that person’sownership of shares in the otherorganization.







(f) Critical means important torestoring or maintaining a depository


organization’s safe and soundoperations.


(h) Depository institution means acommercial bank (including a privatebank), a savings bank, a trust company,a savings and loan association, abuilding and loan association, ahomestead association, a cooperativebank, an industrial bank, or a creditunion, chartered under the laws of theUnited States and having a principaloffice located in the United States.Additionally, a United States office,including a branch or agency, of aforeign commercial bank is a depositoryinstitution.







(iii) A senior executive officer as thatterm is defined in 12 CFR 303.14(a)(3);



(vi) Any person who has arepresentative or nominee serving inany of the capacities in this paragraph(l)(1).



(ii) A person whose managementfunctions relate principally to thebusiness outside the United States of aforeign commercial bank; or


(m) Office means a principal orbranch office of a depository institutionlocated in the United States. Office doesnot include a representative office of aforeign commercial bank, an electronicterminal, or a loan production office.


(o) Relevant metropolitan statisticalarea (RMSA) means an MSA, a primaryMSA, or a consolidated MSA that is notcomprised of designated Primary MSAsto the extent that these terms aredefined and applied by the Office ofManagement and Budget.

(p) Representative or nominee meansa natural person who serves as amanagement official and has anobligation to act on behalf of anotherperson with respect to managementresponsibilities. The FDIC will find thata person has an obligation to act onbehalf of another person only if the firstperson has an agreement, express orimplied, to act on behalf of the secondperson with respect to managementresponsibilities. The FDIC willdetermine, after giving the affectedpersons an opportunity to respond,whether a person is a representative ornominee.

(q) Total assets. (1) The term totalassets includes assets measured on aconsolidated basis and reported in themost recent fiscal year-end ConsolidatedReport of Condition and Income.



(ii) Assets of a bank holding companythat are exempt from the prohibitions ofsection 4 of the Bank Holding CompanyAct of 1956 pursuant to an order issuedunder section 4(d) of that Act (12 U.S.C.1843(d)) other than the assets of itsdepository institution affiliate; or


(r) United States means the UnitedStates of America, any State or territoryof the United States of America, theDistrict of Columbia, Puerto Rico,Guam, American Samoa, and the VirginIslands.


(a) Community. A managementofficial of a depository organization maynot serve at the same time as amanagement official of an unaffiliateddepository organization if thedepository organizations in question (or

a depository institution affiliate thereof)have offices in the same community.

(b) RMSA. A management official of adepository organization may not serve atthe same time as a management officialof an unaffiliated depositoryorganization if the depositoryorganizations in question (or adepository institution affiliate thereof)have offices in the same RMSA and eachdepository organization has total assetsof $20 million or more.


§ 348.4 Interlocking relationshipspermitted by statute.







(f) A Federal Home Loan bank or anyother bank organized solely to servedepository institutions (a bankers’ bank)or solely for the purpose of providingsecurities clearing services and servicesrelated thereto for depositoryinstitutions and securities companies;

(g) A depository organization that isclosed or is in danger of closing asdetermined by the appropriate Federaldepository institutions regulatoryagency and is acquired by anotherdepository organization. This exemptionlasts for five years, beginning on thedate the depository organization isacquired;

(h) A savings association whoseacquisition has been authorized on anemergency basis in accordance withsection 13(k) of the Federal Deposit


Insurance Act (12 U.S.C. 1823(k)) withresulting dual service by a managementofficial that would otherwise beprohibited under the Interlocks Actwhich may continue for up to 10 yearsfrom the date of the acquisitionprovided that the FDIC has given itsapproval for the continuation of suchservice; and

(i)(1) A diversified savings and loanholding company (as defined in section10(a)(1)(F) of the Home Owners’ LoanAct (12 U.S.C. 1467a(a)(1)(F)) withrespect to the service of a director ofsuch company who is also a director ofan unaffiliated depository organizationif:

(i) Both the diversified savings andloan holding company and theunaffiliated depository organizationnotify their appropriate Federaldepository institutions regulatoryagency at least 60 days before the dualservice is proposed to begin; and


(2) The FDIC may disapprove a noticeof proposed service if it finds that:



(iii) The notificant failed to furnish allthe information required by the FDIC.

(3) The FDIC may require that anyinterlock permitted under thisparagraph (h) be terminated if a changein circumstances occurs with respect toone of the interlocked depositoryorganizations that would have provideda basis for disapproval of the interlockduring the notice period.

§ 348.5 Regulatory Standards exemption.(a) Criteria. The FDIC may permit an


(1) The board of directors of thedepository organization (or theorganizers of a depository organizationbeing formed) that seeks the exemptionprovides a resolution to the FDICcertifying that the organization, after theexercise of reasonable efforts, is unableto locate any other candidate from thecommunity or RMSA, as appropriate,who:



(2) The FDIC, after reviewing anapplication submitted by the depository

organization seeking the exemption,determines that:



(b) Presumptions. The FDIC appliesthe following presumptions whenreviewing any application for aRegulatory Standards exemption:

(1) An interlock will not have ananticompetitive effect if it involvesdepository organizations that, if merged,would not cause the post-mergerHerfindahl-Hirschman Index (HHI) toexceed 1800 and would not cause theHHI to increase by more than 200points. This presumption shall notapply to depository organizationssubject to the Major Assets prohibitionof § 348.3(c).


(i) That official is approved by theFDIC to serve as a director or a seniorexecutive officer of that institutionpursuant to 12 CFR 303.14; and

(ii) The institution had operated forless than two years, was not incompliance with minimum capitalrequirements, or otherwise was in a‘‘troubled condition’’ as defined by 12CFR 303.14(a)(4) at the time the serviceunder that section was approved.

(c) Duration of interlock. An interlockpermitted under this section maycontinue until the FDIC notifies theaffected depository organizationsotherwise. The FDIC may requiretermination of any interlock permittedunder this section if the FDICconcludes, after giving the affectedpersons the opportunity to respond, thatthe determinations under paragraph(a)(2) of this section no longer may bemade. A management official maycontinue serving the depositoryorganization involved in the interlockfor a period of 15 months following thedate of the order to terminate theinterlock. The FDIC may shorten thisperiod under appropriatecircumstances.


(a) Criteria. The FDIC may permit aninterlock that otherwise would beprohibited by the Interlocks Act and§ 348.3 if the FDIC, after reviewing anapplication submitted by the depositoryorganization seeking an exemption,determines that the interlock would:




(4) Strengthen the management of adepository institution that is in anunsafe or unsound condition asdetermined by the FDIC on a case-by-case basis.

(b) Presumptions. The FDIC appliesthe following presumptions whenreviewing any application for aManagement Consignment exemption:

(1) A proposed management official iscapable of strengthening themanagement of a depository institutiondescribed in paragraph (a)(3) of thissection if that official is approved by theFDIC to serve as a director or a seniorexecutive officer of that institutionpursuant to 12 CFR 303.14 and theinstitution had operated for less thantwo years at the time the service under12 CFR 303.14 was approved; and

(2) A proposed management official iscapable of strengthening themanagement of a depository institutiondescribed in paragraph (a)(4) of thissection if that official is approved by theFDIC to serve as a director or a seniorexecutive officer of that institutionpursuant to 12 CFR 303.14 and theinstitution was not in compliance withminimum capital requirements orotherwise was in a ‘‘troubled condition’’as defined under 12 CFR 303.14 at thetime service under that section wasapproved.

(c) Duration of interlock. An interlockgranted under this section may continuefor a period of two years from the dateof approval. The FDIC may extend thisperiod for one additional two-yearperiod if the depository organizationapplies for an extension at least 30 daysbefore the current exemption expiresand satisfies one of the criteria specifiedin paragraph (a) of this section. Theprovisions set forth in paragraph (b) ofthis section also apply to applicationsfor extensions.


official shall terminate his or her serviceor apply for an exemption to theInterlocks Act if a change incircumstances causes the service tobecome prohibited under that Act. Achange in circumstances may include,but is not limited to, an increase in assetsize of an organization, a change in thedelineation of the RMSA or community,the establishment of an office, anacquisition, a merger, a consolidation,


or any reorganization of the ownershipstructure of a depository organizationthat causes a previously permissibleinterlock to become prohibited.

(b) Transition period. A managementofficial described in paragraph (a) of thissection may continue to serve theinsured nonmember bank involved inthe interlock for 15 months followingthe date of the change in circumstances.The FDIC may shorten this period underappropriate circumstances.


FDIC administers and enforces theInterlocks Act with respect to insurednonmember banks and their affiliatesand may refer any case of a prohibitedinterlocking relationship involvingthese entities to the Attorney General ofthe United States to enforce compliancewith the Interlocks Act and this part. Ifan affiliate of an insured nonmemberbank is subject to the primary regulationof another federal depositoryorganization supervisory agency, thenthe FDIC does not administer andenforce the Interlocks Act with respectto that affiliate.

Dated at Washington, DC, this 16th day ofJuly, 1996.

By order of the Board of Directors.Federal Deposit Insurance CorporationRobert E. Feldman,Deputy Executive Secretary.

Office of Thrift Supervision

12 CFR Chapter V

Authority and IssuanceFor the reasons set out in the joint

preamble, the OTS revises part 563f ofchapter V of title 12 of the Code ofFederal Regulations to read as follows:

PART 563f—MANAGEMENT OFFICIALINTERLOCKS

Sec.563f.1 Authority, purpose, and scope.563f.2 Definitions.563f.3 Prohibitions.563f.4 Interlocking relationships permitted

by statute.563f.5 Regulatory Standards exemption.563f.6 Management Consignment

exemption.563f.7 Change in circumstances.563f.8 Enforcement.563f.9 Interlocking relationships permitted

pursuant to Federal Deposit InsuranceAct.

Authority: 12 U.S.C. 3201–3208.

§ 563f.1 Authority, purpose, and scope.(a) Authority. This part is issued

under the provisions of the DepositoryInstitution Management Interlocks Act(Interlocks Act) (12 U.S.C. 3201 et seq.),as amended.


(c) Scope. This part applies tomanagement officials of savingsassociations, savings and loan holdingcompanies, and affiliates of either.

§ 563f.2 Definitions.For purposes of this part, the


the meaning given in section 202 of theInterlocks Act (12 U.S.C. 3201). Forpurposes of that section 202, shares heldby an individual include shares held bymembers of his or her immediate family.‘‘Immediate family’’ means spouse,mother, father, child, grandchild, sister,brother, or any of their spouses, whetheror not any of their shares are held intrust.

(2) For purposes of section 202(3)(B)of the Interlocks Act (12 U.S.C.3201(3)(B)), an affiliate relationshipinvolving a savings association orsavings and loan holding companybased on common ownership does notexist if the OTS determines, after givingthe affected persons the opportunity torespond, that the asserted affiliation wasestablished in order to avoid theprohibitions of the Interlocks Act anddoes not represent a true commonalityof interest between the depositoryorganizations. In making thisdetermination, the OTS considers,among other things, whether a person,including members of his or herimmediate family, whose shares arenecessary to constitute the group ownsa nominal percentage of the shares ofone of the organizations and thepercentage is substantiallydisproportionate to that person’sownership of shares in the otherorganization.






(e) Contiguous or adjacent cities,towns, or villages means cities, towns,or villages whose borders touch each

other or whose borders are within 10road miles of each other at their closestpoints. The property line of an officelocated in an unincorporated city, town,or village is the boundary line of thatcity, town, or village for the purpose ofthis definition.

(f) Critical means important torestoring or maintaining a depositoryorganization’s safe and soundoperations.


(h) Depository institution means acommercial bank (including a privatebank), a savings bank, a trust company,a savings and loan association, abuilding and loan association, ahomestead association, a cooperativebank, an industrial bank, or a creditunion, chartered under the laws of theUnited States and having a principaloffice located in the United States.Additionally, a United States office,including a branch or agency, of aforeign commercial bank is a depositoryinstitution.







(iii) A senior executive officer as thatterm is defined in 12 CFR 574.9(a)(2);



(vi) Any person who has arepresentative or nominee serving inany of the capacities in this paragraph(l)(1).



(ii) A person whose managementfunctions relate principally to the


business outside the United States of aforeign commercial bank; or


(m) Office means a principal orbranch office of a depository institutionlocated in the United States. Office doesnot include a representative office of aforeign commercial bank, an electronicterminal, or a loan production office.


(o) Relevant metropolitan statisticalarea (RMSA) means an MSA, a primaryMSA, or a consolidated MSA that is notcomprised of designated Primary MSAsto the extent that these terms aredefined and applied by the Office ofManagement and Budget.

(p) Representative or nominee meansa natural person who serves as amanagement official and has anobligation to act on behalf of anotherperson with respect to managementresponsibilities. The OTS will find thata person has an obligation to act onbehalf of another person only if the firstperson has an agreement, express orimplied, to act on behalf of the secondperson with respect to managementresponsibilities. The OTS willdetermine, after giving the affectedpersons an opportunity to respond,whether a person is a representative ornominee.

(q) Savings association means:(1) Any Federal savings association

(as defined in section 3(b)(2) of theFederal Deposit Insurance Act (12U.S.C. 1813(b)(2));

(2) Any state savings association (asdefined in section 3(b)(3) of the FederalDeposit Insurance Act (12 U.S.C.1813(b)(3)) the deposits of which areinsured by the Federal DepositInsurance Corporation; and

(3) Any corporation (other than a bankas defined in section 3(a)(1) of theFederal Deposit Insurance Act (12U.S.C. 1813(a)(1)) the deposits of whichare insured by the Federal DepositInsurance Corporation, that the Board ofDirectors of the Federal DepositInsurance Corporation and the Directorof the Office of Thrift Supervisionjointly determine to be operating insubstantially the same manner as asavings association.

(r) Total assets. (1) The term totalassets means assets measured on aconsolidated basis and reported in themost recent fiscal year-end ConsolidatedReport of Condition and Income.





(s) United States means the UnitedStates of America, any State or territoryof the United States of America, theDistrict of Columbia, Puerto Rico,Guam, American Samoa, and the VirginIslands.

§ 563f.3 Prohibitions.(a) Community. A management

official of a depository organization maynot serve at the same time as amanagement official of an unaffiliateddepository organization if thedepository organizations in question (ora depository institution affiliate thereof)have offices in the same community.

(b) RMSA. A management official of adepository organization may not serve atthe same time as a management officialof an unaffiliated depositoryorganization if the depositoryorganizations in question (or adepository institution affiliate thereof)have offices in the same RMSA and eachdepository organization has total assetsof $20 million or more.


§ 563f.4 Interlocking relationshipspermitted by statute.

The prohibitions of § 563f.3 do notapply in the case of any one or more ofthe following organizations or to asubsidiary thereof:


(b) A corporation operating undersection 25 or section 25A of the FederalReserve Act (12 U.S.C. 601 et seq. and

12 U.S.C. 611 et seq., respectively) (EdgeCorporations and AgreementCorporations);





(g) A depository organization that isclosed or is in danger of closing asdetermined by the appropriate Federaldepository institutions regulatoryagency and is acquired by anotherdepository organization. This exemptionlasts for five years, beginning on thedate the depository organization isacquired;


(i) Both the diversified savings andloan holding company and theunaffiliated depository organizationnotify their appropriate Federaldepository institutions regulatoryagency at least 60 days before the dualservice is proposed to begin; and


(2) The OTS may disapprove a noticeof proposed service if it finds that:



(iii) The notificant failed to furnish allthe information required by the OTS.

(3) The OTS may require that anyinterlock permitted under thisparagraph (h) be terminated if a changein circumstances occurs with respect toone of the interlocked depositoryorganizations that would have provideda basis for disapproval of the interlockduring the notice period; and

(i) Any savings association or anysavings and loan holding company (asdefined in section 10(a)(1)(D) of theHome Owners’ Loan Act) which has


issued stock in connection with aqualified stock issuance pursuant tosection 10(q) of such Act, except thatthis paragraph (i) shall apply only withregard to service by a singlemanagement official of such savingsassociation or holding company, or anysubsidiary of such savings association orholding company, by a singlemanagement official of the savings andloan holding company which purchasedthe stock issued in connection withsuch qualified stock issuance, and shallapply only when the OTS hasdetermined that such service isconsistent with the purposes of theInterlocks Act and the Home Owners’Loan Act.

§ 563f.5 Regulatory Standards exemption.(a) Criteria. The OTS may permit an

interlock that otherwise would beprohibited by the Interlocks Act and§ 563f.3 if:

(1) The board of directors of thedepository organization (or theorganizers of a depository organizationbeing formed) that seeks the exemptionprovides a resolution to the OTScertifying that the organization, after theexercise of reasonable efforts, is unableto locate any other candidate from thecommunity or RMSA, as appropriate,who:



(2) The OTS, after reviewing anapplication submitted by the depositoryorganization seeking the exemption,determines that:



(b) Presumptions. The OTS appliesthe following presumptions whenreviewing any application for aRegulatory Standards exemption:

(1) An interlock will not have ananticompetitive effect if it involvesdepository organizations that, if merged,would not cause the post-mergerHerfindahl-Hirschman Index (HHI) toexceed 1800 and would not cause theHHI to increase by more than 200points. This presumption shall notapply to depository organizationssubject to the Major Assets prohibitionof § 563f.3(c).


(i) That official is approved by theOTS to serve as a director or seniorexecutive officer of that institutionpursuant to 12 CFR 574.9; and


(c) Duration of interlock. An interlockpermitted under this section maycontinue until the OTS notifies theaffected depository organizationsotherwise. The OTS may requiretermination of any interlock permittedunder this section if the OTS concludes,after giving the affected persons theopportunity to respond, that thedeterminations under paragraph (a)(2) ofthis section no longer may be made. Amanagement official may continueserving the depository organizationinvolved in the interlock for a period of15 months following the date of theorder to terminate the interlock, unlessthe order terminating the interlockprovides otherwise.

§ 563f.6 Management Consignmentexemption.

(a) Criteria. The OTS may permit aninterlock that otherwise would beprohibited by the Interlocks Act and§ 563f.3 if the OTS, after reviewing anapplication submitted by the depositoryorganization seeking an exemption,determines that the interlock would:



(3) Strengthen the management of adepository institution that has beenchartered for less than three years at thetime an application is filed under thispart; or

(4) Strengthen the management of adepository institution that is in anunsafe or unsound condition asdetermined by the OTS on a case-by-case basis.

(b) Presumptions. The OTS appliesthe following presumptions whenreviewing any application for aManagement Consignment exemption:

(1) A proposed management official iscapable of strengthening themanagement of a depository institutiondescribed in paragraph (a)(3) of thissection if that official is approved by theOTS to serve as a director or seniorexecutive officer of that institutionpursuant to 12 CFR 574.9 and theinstitution had operated for less thantwo years at the time the service under12 CFR 574.9 was approved; and

(2) A proposed management official iscapable of strengthening themanagement of a depository institutiondescribed in paragraph (a)(4) of thissection if that official is approved by theOTS to serve as a director or seniorexecutive officer of that institutionpursuant to 12 CFR 574.9 and theinstitution was not in compliance withminimum capital requirements orotherwise was in a ‘‘troubled condition’’as defined under 12 CFR 574.9 at thetime service under that section wasapproved.

(c) Duration of interlock. An interlockgranted under this section may continuefor a period of two years from the dateof approval. The OTS may extend thisperiod for one additional two-yearperiod if the depository organizationapplies for an extension at least 30 daysbefore the current exemption expiresand satisfies one of the criteria specifiedin paragraph (a) of this section. Theprovisions set forth in paragraph (b) ofthis section also apply to applicationsfor extensions.

§ 563f.7 Change in circumstances.(a) Termination. A management


(b) Transition period. A managementofficial described in paragraph (a) of thissection may continue to serve thedepository organization involved in theinterlock for 15 months following thedate of the change in circumstances.The OTS may shorten this period underappropriate circumstances.

§ 563f.8 Enforcement.Except as provided in this section, the

OTS administers and enforces theInterlocks Act with respect to savingsassociations, savings and loan holdingcompanies, and affiliates of either, andmay refer any case of a prohibitedinterlocking relationship involvingthese entities to the Attorney General ofthe United States to enforce compliancewith the Interlocks Act and this part. Ifan affiliate of a savings association orsavings and loan holding company issubject to the primary regulation ofanother Federal depository organization


1 See Bank Board General Counsel opinion 015(Dec. 7, 1936) at 1–2. The Bank Board GeneralCounsel concluded that ‘‘Congress * * * intendedto limit the trust companies authorized to receive[FHLBank] deposits to those which actually receivedeposits as part of their regular course of business.’’Id. at 4.

2 See e.g., Home Owners’ Loan Act of 1933(HOLA), ch. 64, sec. 5(b), 48 Stat. 132 (June 13,1993) (savings and loan associations ‘‘shall raisetheir capital only in the form of payments on suchshares as are authorized in their charger * * * nodeposits shall be accepted’’); Horace Russell,Savings and Loan Associations 166–67, n.21 (1956)

(‘‘savings and loan associations * * * issue savingsaccounts, sometimes called share accounts andsometimes share savings accounts * * * by federallaw, the use of the word ‘deposit’ by savings andloan associations is prohibited’’); Indep BankersAss’n of Am. v. Clarke, 917 F.2d 1126, 1128 (8thCir. 1990) (‘‘traditionally, of course, and originally,savings and loan associations * * * did not acceptdemand deposits’’).

supervisory agency, then the OTS doesnot administer and enforce theInterlocks Act with respect to thataffiliate.

§ 563f.9 Interlocking relationshipspermitted pursuant to Federal DepositInsurance Act.

A management official or prospectivemanagement official of a depositoryorganization may enter into anotherwise prohibited interlockingrelationship with another depositoryorganization for a period of up to 10years if such relationship is approved bythe Federal Deposit InsuranceCorporation pursuant to section13(k)(1)(A)(v) of the Federal DepositInsurance Act, as amended (12 U.S.C.1823(k)(1)(A)(v)).

Dated: July 1, 1996.Jonathan L. Fiechter,Acting Director.[FR Doc. 96–19400 Filed 8–1–96; 8:45 am]BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P;6720–01–P

FEDERAL HOUSING FINANCE BOARD

12 CFR Part 931

[No. 96–48]

Modification of Definition of Depositsin Banks or Trust Companies

AGENCY: Federal Housing FinanceBoard.ACTION: Final rule.

SUMMARY: The Board of Directors of theFederal Housing Finance Board(Finance Board) has adopted a final ruleto modify the definition of ‘‘deposits inbanks or trust companies’’ in theFinance Board’s regulations. The finalrule will: Make clear that the term‘‘banks’’ includes savings associations;and expressly include federal fundstransactions as eligible to fulfill theliquidity requirement imposed on theFederal Home Loan Banks (FHLBanks)by section 11(g) of the Federal HomeLoan Bank Act (Bank Act).EFFECTIVE DATE: September 3, 1996.FOR FURTHER INFORMATION CONTACT:Janice A. Kaye, Attorney-Advisor, Officeof General Counsel, (202) 408–2505,Federal Housing Finance Board, 1777 FStreet, NW., Washington, DC 20006.


I. Statutory and Regulatory Background

Under section 11(e)(1) of the BankAct, the FHLBanks have the power toaccept deposits from their members,other FHLBanks, or instrumentalities ofthe United States. See 12 U.S.C.

1431(e)(1). To ensure that eachFHLBank has sufficient liquid assets tomeet deposit withdrawal demands,section 11(g) of the Bank Act imposes aliquidity requirement. See id. section1431(g). The liquidity requirementprovides that each FHLBank mustinvest, upon such terms and conditionsas the Board of Directors of the FinanceBoard may prescribe, an amount equalto the current deposits the FHLBankholds in specified types of assets. Id.Among the specified assets are‘‘deposits in banks or trust companies.’’Id. section 1431(g)(2).

The phrase ‘‘deposits in banks or trustcompanies’’ appeared in, and has notbeen changed since enactment of, theBank Act in 1932. See ch. 522, sec. 11,47 Stat. 733 (July 22, 1932). Thelegislative history of section 11(g) of theBank Act does not discuss use of thephrase, but suggests only that thepurpose of the liquidity requirement isto ensure that the FHLBanks havesufficient liquid assets to meet theiradvance and deposit withdrawaldemands. See Bank Act: Hearings on S.2959 Before a Subcomm. of the SenateComm. on Banking and Currency, 72dCong., 1st Sess. 36 (Jan. 14, 1932)(statement of John O’Brien, AssistantLegislative Counsel). Although thelegislative history of section 11(g) islimited, a legal opinion issued severalyears after enactment of the Bank Act bythe General Counsel of the FederalHome Loan Bank Board (Bank Board),the Finance Board’s predecessor agency,stated that ‘‘Congress, in using thephrase ‘deposits in banks or trustcompanies’ * * * intended to refer tothose financial institutions whichaccept deposits in their regular course ofbusiness.’’ 1 The Bank Board GeneralCounsel based his determination on theplain meaning of the term ‘‘banks’’ atthat time. Id. at 2–3. To decide if afinancial institution is a ‘‘bank’’ forpurposes of section 11(g)(2), ‘‘theprincipal test or criterion * * * iswhether the financial institution acceptsdeposits as one of the primary purposesfor which it was created.’’ Id. at 2. Sincesavings associations did not acceptdeposits at that time,2 the Bank Board

General Counsel concluded that‘‘savings associations did not fall withinthe strict meaning of ‘banks.’ ’’ BankBoard General Counsel opinion at 3.

In 1978, the Bank Board defined byregulation the phrase ‘‘deposits in banksor trust companies’’ to include a depositin another FHLBank, a demand accountwith a Federal Reserve Bank, or adeposit in a depository designated by aFHLBank’s board of directors that is amember of the Federal Reserve System(FRS) or the Federal Deposit InsuranceCorporation (FDIC). See 43 FR 46835,46836 (Oct. 11, 1978), codified at 12CFR 521.5 (superseded). When the BankBoard adopted this definition, depositsin federal and some state savingsassociations were insured by the formerFederal Savings and Loan InsuranceCorporation (FSLIC), and deposits inbanks (and some savings banks) wereinsured by the FDIC. The Bank Board’sregulation provided that only depositsin FDIC-insured institutions wereeligible investments for purposes of the‘‘deposits in banks or trust companies’’provision of section 11(g) of the BankAct. Since, generally speaking, onlybanks were members of (or, moreprecisely, insured by) the FDIC, depositsin FSLIC-insured savings associationscould not be counted toward theliquidity requirement under theregulation. When Congress abolishedthe Bank Board and FSLIC in 1989, seeFinancial Institutions Reform, Recoveryand Enforcement Act of 1989 (FIRREA),Pub. L. 101–73, sec. 401, 103 Stat. 183(Aug. 9, 1989), the Finance Boardtransferred the definition of ‘‘deposits inbanks or trust companies,’’ without anychange in substantive or technicalmatters, to § 931.5 of its regulations. See54 FR 36757 (Aug. 28, 1989), codified at12 CFR 931.5.

On September 22, 1993, the Board ofDirectors of the Finance Board approvedfor publication a proposed rule tomodify the definition of ‘‘deposits inbanks or trust companies’’ in § 931.5 ofits regulations. The notice of proposedrulemaking (Notice) was published inthe Federal Register on September 29,1993, with a 60-day public commentperiod that closed on November 29,1993. See 58 FR 50867 (Sept. 29, 1993).The Notice proposed to make twochanges to the definition of ‘‘deposits inbanks or trust companies.’’ First, it


3 ‘‘A bank is an institution * * * whose businessit is to receive money on deposit * * *.’’ 131Black’s Law Dictionary (5th ed. 1979). The word‘‘bank’’ means ‘‘an institution for receiving, lending,exchanging, and safeguarding money.’’ 106 TheRandom House College Dictionary (rev. ed. 1980)(emphasis added).

4 In 1968, Congress amended section 5(b) ofHOLA. See Pub. L. 90–448, Title XVII, sec. 1716(a),82 Stat. 608 (Aug. 1, 1968); supra n.2. Theamendment eliminated provisions that permittedsavings associations to raise their capital only in theform of payments on shares and prohibitedacceptance of deposits, and inserted provisionspermitting savings associations to raise capital inthe form of savings deposits, shares, or otheraccounts. Id., codified at 12 U.S.C. 1464.

proposed to replace the reference todepositories that are FRS or FDICmembers with a reference to banks, asdefined in section 3 of the FederalDeposit Insurance Act (FDI Act), see 12U.S.C. 1813(a), and trust companies thatare members of the FRS or insured bythe FDIC. The intent of thismodification was to make clear thatdeposits in savings associations wouldcontinue to be ineligible investments forpurposes of section 11(g) of the BankAct. Second, the Notice proposed toexpand the definition to specificallyinclude as deposits the sale of federalfunds.

II. Analysis of the Final Rule

A. Meaning of the Term ‘‘Banks’’

In the Notice, the Board of Directorsof the Finance Board proposed to limitthe meaning of ‘‘banks’’ to thoseinstitutions included in the technicaldefinition of the term ‘‘banks’’ under theFDI Act. Under that definition, the term‘‘banks’’ does not include savingsassociations. See id. section 1813 (a),(b). As a result of reviewing thecomments received by the FinanceBoard, one from a FHLBank and theother from an industry trade association,and the factors discussed below, theBoard of Directors of the Finance Boardhas determined that deposits in savingsassociations should be eligibleinvestments for purposes of theliquidity requirement in section 11(g) ofthe Bank Act. The Board of Directors ofthe Finance Board has modified theproposed rule to make clear that theterm ‘‘banks’’ will include savingsassociations for purposes of section11(g)(2) of the Bank Act. The publiccomments support this interpretation.

Neither the legislative history of theBank Act nor the Bank Board inadopting its regulatory definition,articulated any policy reasons tosupport the exclusion of deposits inFSLIC-insured savings associations. Seesupra section I. One commentersuggested that the rationale for theexclusion of savings associations mighthave been to avoid any conflict ofinterest that might arise as a result ofplacing deposits in FHLBank memberinstitutions. If this was the concernwhen Congress enacted the Bank Act in1932, or when the Bank Boardpromulgated its regulatory definition in1978, it was obviated in 1989, whenbanks for the first time became eligibleas FHLBank members. See FIRREA, sec.704(a), codified at 12 U.S.C. 1424(a)(1).The commenter urged the FinanceBoard to treat bank and savingsassociation FHLBank members equally.

The other commenter offered that thereason for disparate treatment of banksand savings associations might havebeen to ensure that FHLBank liquiditydeposits be transacted only with ‘‘low-risk’’ counterparties, implying thatFDIC-insured deposits were less riskythan FSLIC-insured savings accounts.Because Congress dissolved FSLIC in1989 and transferred responsibility foradministering the insurance funds forboth savings associations and banks tothe FDIC, see FIRREA, sections401(a)(1), 205, the commenter arguedthat, if there ever were such differences,there are now no material differences inoverall credit risk between deposits inFDIC-insured banks and deposits inFDIC-insured savings associations. Thecommenter pointed out also that soundfinancial management and the dictatesof the Finance Board’s FinancialManagement Policy, see Board ofDirectors Res. 93–133 (Dec. 15, 1993),Board of Directors Dec. Mem. 94–DM–48 (Nov. 10, 1994), require theFHLBanks to select only the mostcreditworthy counterparties.

Permitting the FHLBanks to countdeposits in savings associations towardsthe statutory liquidity requirement alsois sound as a matter of statutoryconstruction. Congress enacted the BankAct a year before it created the FDIC.See ch. 89, sec. 8, 48 Stat. 168 (June 16,1933). Thus, the technical definition ofthe term ‘‘bank’’ provided for purposesof deposit insurance coverage could nothave been the contemplated meaning ofthe word as used in section 11(g)(2) ofthe Bank Act. See supra section I. Itappears that Congress’ intent in usingthe phrase ‘‘deposits in banks or trustcompanies’’ was to permit theFHLBanks to make deposits only infinancial institutions that accepteddeposits in the ordinary course of theirbusiness. Id. Clearly, the plain meaningof the term ‘‘bank’’ at the time Congressenacted the Bank Act was a financialinstitution that accepts deposits. Id.This also is the ordinary dictionarydefinition of the term ‘‘bank’’ today.3

Although there continue to bedifferences between banks and savingsassociations, even the courts haveacknowledged that ‘‘the clear, bright-line distinctions between commercialbanks and savings and loans have, overthe years, gradually become blurred.’’Indep. Bankers, 917 F.2d at 1128.Indeed, for purposes of other statutes,

the term ‘‘banks’’ has been defined toinclude savings associations, and viceversa. For example, under HOLA, theOffice of Thrift Supervision considerscertain types of banks to be savingsassociations for purposes of thequalified thrift lender test. See 12 U.S.C.1467a(1)(A), (l); 12 CFR 583.21. Further,under the Internal Revenue Code, themeaning of the term ‘‘bank’’ includessavings associations for purposes ofassessing taxes on certain situationscommon to both types of financialinstitutions. See 26 U.S.C. 581; HoraceRussell, Savings and Loan Associations307 (2d ed. 1960) (‘‘ ‘black,’ therefore, is‘white’ ’’). And, for purposes of theMcFadden Act, 12 U.S.C. 36, whichauthorizes national banks to establishbranches only to the extent that statebanks within the same state may branchunder state law, the Comptroller of theCurrency has determined that savingsassociations are state banks. Severalcourts have upheld as reasonable theComptroller of the Currency’sdetermination.

For all of the above reasons, includingthe fact that savings associations nowhave statutory authority to acceptdeposits,4 it is reasonable for the Boardof Directors of the Finance Board toconclude that deposits in savingsassociations should be eligibleinvestments for purposes of section11(g) of the Bank Act.

B. Federal Funds TransactionsThe Board of Directors of the Finance

Board has adopted the provisions of theNotice that concern federal fundstransactions as proposed. The Board ofDirectors of the Finance Board hasdecided that federal funds transactions,which are highly liquid investmentsessentially equivalent to deposits,constitute investments that are‘‘deposits’’ within the meaning ofsection 11(g)(2) of the Bank Act.Therefore, the final rule amends § 931.5to include expressly the sale of federalfunds to banks and trust companies asa deposit the FHLBanks may use tofulfill the liquidity requirement insection 11(g) of the Bank Act. Since theBoard of Directors of the Finance Boardhas concluded that the term ‘‘banks’’includes savings associations, savingsassociations, as well as banks and trustcompanies, are eligible counterparties


5 Section 19(b)(2)(A) of the Federal Reserve Actrequires each depository institution to maintainreserves against its transaction accounts, as the FRSBoard of Governors may prescribe, for the purposeof implementing monetary policy. See 12 U.S.C.461(b)(2)(A). These reserves are commonly referredto as ‘‘federal funds.’’ A depository institutionmeets the reserve requirement by maintainingaccounts at its direct Federal Reserve Bank or byholding cash in its vaults. A depository institutionmay sell excess reserves to another depositoryinstitution in need of additional funds to meet itsreserve requirement.

for federal funds transactions. Thepublic comments received by theFinance Board support thisinterpretation.

For purposes of the final rule, a saleof federal funds means either aconventional federal funds transactionor a correspondent-respondent federalfunds transaction. A conventional saleof federal funds involves the unsecuredsale of funds held by a FHLBank in anaccount maintained at its districtFederal Reserve Bank to a bank in needof additional funds to meet its statutoryreserve requirement.5 A correspondent-respondent federal funds sale involvesthe sale of unsecured funds directlyfrom a FHLBank (the respondent) to acorrespondent bank in need of funds tomeet its statutory reserve requirement.

III. Regulatory Flexibility ActUnder the Regulatory Flexibility Act

(RFA), 5 U.S.C. 601, et seq., theFHLBanks are not ‘‘small entities.’’ Id.section 601(6). Since this final ruleapplies only to the FHLBanks, it doesnot impose any additional regulatoryrequirements on small entities. Thus, inaccordance with section 605(b) of theRFA, Id. section 605(b), the Board ofDirectors of the Finance Board herebycertifies that this final rule will not havea significant economic impact on asubstantial number of small entities.

List of Subjects in 12 CFR Part 931Banks, banking, Federal home loan

banks.Accordingly, the Board of Directors of

the Federal Housing Finance Boardhereby amends chapter IX, title 12, part931, Code of Federal Regulations, asfollows:

PART 931—DEFINITIONS

1. The authority citation for part 931is revised to read as follows:

Authority: 12 U.S.C. 1422a, 1422b, 1427,and 1431(g).


§ 931.5 Deposits in banks or trustcompanies.

Include:(a) A deposit in another Bank;

(b) A demand account in a FederalReserve Bank; and

(c) A deposit in, or a sale of federalfunds to:

(1) An insured depository institution,as defined in section 2(12)(A) of the Act(12 U.S.C. 1422(12)(A)), that isdesignated by the Bank’s board ofdirectors; or

(2) A trust company that is a memberof the Federal Reserve System orinsured by the Federal DepositInsurance Corporation, and isdesignated by the Bank’s board ofdirectors.

Dated: July 3, 1996.By the Board of Directors of the Federal

Housing Finance Board.Bruce A. Morrison,Chairperson.[FR Doc. 96–19525 Filed 8–1–96; 8:45 am]BILLING CODE 6725–01–U

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 96–ANE–04; Amendment 39–9705, AD 96–08–01 R1]

Airworthiness Directives; HamiltonStandard Model 14RF–9 Propellers

AGENCY: Federal AviationAdministration, DOT.ACTION: Final rule; request forcomments.

SUMMARY: This amendment revisesairworthiness directive (AD) 96–08–01,that is applicable to Hamilton StandardModel 14RF–9 propellers. The currentAD superseded priority letter AD 95–24–09, and requires an ultrasonic shearwave inspection, adds a one-time visualand fluorescent penetrant inspection,and repair of the propeller blade shank.This revision will add a new shankeddy current inspection and will allowrepair of certain blade shanks removedfrom service under the current AD. Theactions specified by this AD areintended to prevent propeller bladeseparation due to propeller blade shankcracking that can result in loss ofcontrol of the aircraft.DATES: Effective August 2, 1996.

The incorporation by reference ofHamilton Standard Service Bulletins(SB) Nos. 14RF–9–61–86, Revision 4,dated November 9, 1995, Alert ServiceBulletin No. 14RF–9–61–A90, Original,dated November 9, 1995, and AlertService Bulletin No. 14RF–9–61–A92,Revision 2, dated March 6, 1996, andlisted in the regulations was approved

by the Director of the Federal Registeras of May 1, 1996 (61 FR 16618, 4/16/96). The incorporation by reference ofHamilton Standard Service Bulletin No.14RF–9–61–105, Original, dated July 24,1996, is approved by the Director of theFederal Register as of August 2, 1996.

Comments for inclusion in the RulesDocket must be received on or beforeSeptember 16, 1996.ADDRESSES: Submit comments intriplicate to the Federal AviationAdministration (FAA), New EnglandRegion, Office of the Assistant ChiefCounsel, Attention: Rules Docket No.96–ANE–04, 12 New England ExecutivePark, Burlington, MA 01803–5299.Comments may also be submitted to theRules Docket by using the followingInternet address:‘‘[email protected]’’. Allcomments must contain the Docket No.in the subject line of the comment.Comments may be inspected at thislocation between 8:00 a.m. and 4:30p.m.

The service information referenced inthis AD may be obtained from HamiltonStandard, One Hamilton Road, WindsorLocks, CT 06096–1010; telephone (203)654–6876. This information may beexamined at the FAA, New EnglandRegion, Office of the Assistant ChiefCounsel, 12 New England ExecutivePark, Burlington, MA; or at the Office ofthe Federal Register, 800 North CapitolStreet, NW., suite 700, Washington, DC.FOR FURTHER INFORMATION CONTACT:Frank Walsh, Aerospace Engineer,Boston Aircraft Certification Office,FAA, Engine and Propeller Directorate,12 New England Executive Park,Burlington, MA 01803–5299; telephone(617) 238–7158, fax (617) 238–7199.SUPPLEMENTARY INFORMATION: On April1, 1996, the Federal AviationAdministration (FAA) issuedairworthiness directive (AD) 96–08–01,applicable to Hamilton Standard Model14RF–9 propellers, which supersededpriority letter AD 95–24–09, andrequires an ultrasonic shear waveinspection for cracks or surfaceindications, a one-time visual andflourescent penetrant inspection formechanical damage, and repair of thepropeller blade shank. That action wasprompted by a report of an inflight lossof a Hamilton Standard Model 14RF–9propeller blade installed on an EmbraerEMB–120 aircraft. The loss of thepropeller blade resulted in thesubsequent loss of the propeller andportions of the gearbox. The propellerblade separated due to a crackapproximately 9 inches from the buttend of the blade. The FAA determinedthat the crack initiated on the outer


surface of the blade shank in an area ofmechanical damage induced as a resultof a localized interference conditionbetween the blade spar and the foammold which occurred during blademanufacture. That condition, if notcorrected, could result in propellerblade separation due to propeller bladeshank cracking, which could result inloss of control of the aircraft.

Since the issuance of that AD, themanufacturer has developed newinspection and repair procedures formechanical damage (dents) greater than.005 inches deep to a maximum of .010inches in depth. The new inspectionand repair procedures will ensure thatthe structural integrity of the blades ismaintained. Also, the new inspectionand repair procedures will allow certainblades having dents greater than .005inches deep that were removed fromservice in accordance with AD 96–08–01 to be inspected and repaired inaccordance with Hamilton StandardService Bulletin No. 14RF–9–61–105,dated July 24, 1996, and returned toservice.

The new inspection procedure canfind damage in areas of the propellerblade shank that might have beendamaged by interference with thepropeller blade foam mold duringmanufacture. The damage will be visiblewhen the overlying fiberglass andadhesive layers are removed. Prior toreturning damaged propeller blades toservice, blades must be repaired inaccordance with the applicable serviceor alert service bulletin.

The FAA has reviewed and approvedthe technical contents of HamiltonStandard Service Bulletin (SB) No.14RF–9–61–86, Revision 4, and AlertService Bulletin (ASB) No. 14RF–9–61–A90, both dated November 9, 1995, thatdescribe procedures for an ultrasonicshear wave inspection of propeller bladeshanks for cracks or surface indications;and Hamilton Standard ASB No. 14RF–9–61–A92, Revision 2, dated March 6,1996, that describes procedures for aninspection and repair for mechanicaldamage. In addition, the FAA hasreviewed and approved the technicalcontents of Hamilton Standard SB No.14RF–9–61–105, Original, dated July 24,1996, which describes eddy currentinspection and repair procedures forthose propeller blades with dents thatexceed .005 inches deep to a maximumof .010 inches in depth.

Since an unsafe condition has beenidentified that is likely to exist ordevelop on other propellers of this sametype design, this AD revises AD 96–08–01, by adding a new paragraph (d)which allows inspection and repair ofpropeller blades with mechanical

damage greater than .005 inches deep toa maximum of .010 inches in depth inaccordance with Hamilton StandardService Bulletin No. 14RF–9–61–105,dated July 24, 1996. This revision willalso enable those propellers that wereremoved from service in accordancewith AD 96–08–01, and that aredetermined repairable in accordancewith SB 14RF–9–61–105, to be returnedto service.

Since a situation exists that requiresthe immediate adoption of thisregulation, it is found that notice andopportunity for prior public commenthereon are impracticable, and that goodcause exists for making this amendmenteffective in less than 30 days.

Comments InvitedAlthough this action is in the form of

a final rule that involves requirementsaffecting flight safety and, thus, was notpreceded by notice and an opportunityfor public 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 specifiedunder the caption ADDRESSES. Allcommunications received on or beforethe closing date for comments will beconsidered, and this rule may beamended in light of the commentsreceived. Factual information thatsupports the commenter’s ideas andsuggestions is extremely helpful inevaluating the effectiveness of the ADaction and determining whetheradditional rulemaking action would beneeded.

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 this ADwill 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 Number 96–ANE–04.’’ Thepostcard will be date stamped andreturned to the commenter.

The regulations adopted herein willnot have substantial direct effects on theStates, on the relationship between thenational government and the States, or

on 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 regulationthat must be issued immediately tocorrect an unsafe condition in aircraft,and is not a ‘‘significant regulatoryaction’’ under Executive Order 12866. Ithas been determined further that thisaction involves an emergency regulationunder DOT Regulatory Policies andProcedures (44 FR 11034, February 26,1979). If it is determined that thisemergency regulation otherwise wouldbe significant under DOT RegulatoryPolicies and Procedures, a finalregulatory evaluation will be preparedand placed in the Rules Docket. A copyof it, if filed, may be obtained from theRules Docket at the location providedunder the caption ADDRESSES.


Air transportation, Aircraft, Aviationsafety, Incorporation by reference,Safety.

Adoption of the Amendment

Accordingly, pursuant to theauthority delegated to me by theAdministrator, the Federal AviationAdministration amends part 39 of theFederal Aviation Regulations (14 CFRpart 39) as follows:

PART 39—AIRWORTHINESSDIRECTIVES


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

§ 39.13 [Amended]

2. Section 39.13 is revised to read asfollows:96–08–01R1 Hamilton Standard:

Amendment 39–9707. Docket No. 96–ANE–04, revises AD 96–08–01,Amendment No. 39–9567.

Applicability: Hamilton Standard Model14RF–9 propellers, installed on but notlimited to Embraer EMB–120 series aircraft.

Note: This airworthiness directive (AD)applies to each propeller identified in thepreceding applicability provision, regardlessof whether it has been modified, altered, orrepaired in the area subject to therequirements of this AD. For propellers thathave been modified, altered, or repaired sothat the performance of the requirements ofthis AD is affected, the owner/operator mustuse the authority provided in paragraph (e)to request approval from the Federal AviationAdministration (FAA). This approval may


address either no action, if the currentconfiguration eliminates the unsafecondition, or different actions necessary toaddress the unsafe condition described inthis AD. Such a request should include anassessment of the effect of the changedconfiguration on the unsafe conditionaddressed by this AD. In no case does thepresence of any modification, alteration, orrepair remove any propeller from theapplicability of this AD.

Compliance: Required as indicated, unlessaccomplished previously.

To prevent propeller blade separation dueto propeller blade shank cracking, whichcould result in loss of control of the aircraft,accomplish the following:

(a) Propeller blades that have beenultrasonically shear wave inspected inaccordance with the requirements of AD 95–24–09 or AD 96–08–01 need not undergoanother ultrasonic shear wave inspection inaccordance with paragraph (b) of this AD. Allaffected propeller blades with S/N’s less than885751, however, must be inspected formechanical damage in accordance withparagraph (c) of this AD by August 31, 1996.Propeller blades with S/N’s less than 885751that have not been ultrasonically shear waveinspected in accordance with AD 95–24–09or AD 96–08–01 must undergo ultrasonicshear wave inspection in accordance withparagraph (b) of this AD prior to furtherflight, and must be inspected for mechanicaldamage in accordance with paragraph (c) ofthis AD by August 31, 1996; or must beinspected for mechanical damage inaccordance with paragraph (c) of this ADprior to further flight.

(b) Prior to further flight, perform anultrasonic shear wave inspection for cracksor surface indications in accordance with theapplicable Hamilton Standard ServiceBulletin (SB) or Alert Service Bulletin (ASB)described in paragraphs (b)(1) and (b)(2) ofthis AD unless accomplished previously inaccordance with AD 95–24–09 or AD 96–08–01. Prior to further flight, remove fromservice propeller blades with ultrasonic shearwave readings that exceed the acceptablelimits described in the applicable SB or ASB,and replace with serviceable propellerblades:

(1) Inspect, and if necessary, remove andreplace with a serviceable propeller blade, inaccordance with the AccomplishmentInstructions of Hamilton Standard SB No.14RF–9–61–86, Revision 4, dated November9, 1995, propeller blade shanks withpropeller blade spars, Part Number (P/N)792231–1. These propeller blades may beidentified by, but not limited to, SerialNumbers (S/N’s) 853445 and higher exceptfor the S/N’s listed in Table 1 of this SB.Propeller blades inspected in accordancewith the Original, Revision 1, Revision 2, orRevision 3 of Hamilton Standard SB No.14RF–9–61–86, and which passedinspection, need not be ultrasonically shearwave inspected again.

(2) Remove propeller blade for off-winginspection, inspect, and if necessary, replacewith a serviceable propeller blade, inaccordance with the AccomplishmentInstructions of Hamilton Standard ASB No.14RF–9–61–A90, dated November 9, 1995,

propeller blade shanks with propeller bladespars, P/N 782683–1. These propeller bladesmay be identified by, but not limited to, S/N’s less than 853445, and propeller bladeswith S/N’s greater than 853445 that are listedin Table 1 of this ASB.

(c) Perform a one-time visual andfluorescent penetrant inspection of thepropeller blade shank for mechanical damageby August 31, 1996, in accordance with theAccomplishment Instructions of HamiltonStandard ASB No. 14RF–9–61–A92, Revision2, dated March 6, 1996, on all propeller bladeshanks with S/N’s before 885751. Propellerblades inspected in accordance with theoriginal or Revision 1 of Hamilton StandardASB No. 14RF–9–61–A92, and which passedinspection or were repaired, need not beinspected again.

(1) Prior to further flight, remove fromservice propeller blades with mechanicaldamage that exceed repair limits specified inASB No. 14RF–9–61–A92, Revision 2, datedMarch 6, 1996, and replace with serviceableparts.

(2) Prior to further flight, repair propellerblades with repairable damage in accordancewith the procedures described in ASB No.14RF–9–61–A92, Revision 2, dated March 6,1996.

(d) Propeller blades removed from servicein accordance with paragraph (c) of this AD,may be returned to service provided theblades are inspected for cracks and repairedin accordance with the procedures describedin Hamilton Standard SB No. 14RF–9–61–105, dated July 24, 1996. Blades with damagethat exceed repair limits specified inHamilton Standard SB 14RF–9–61–105,dated July 24, 1996, cannot be returned toservice.

(e) An alternative method of compliance oradjustment of the compliance time thatprovides an acceptable level of safety may beused if approved by the Manager, BostonAircraft Certification Office. The requestshould be forwarded through an appropriateFAA Principal Maintenance Inspector, whomay add comments and then send it to theManager, Boston Aircraft Certification Office.

Note: Information concerning the existenceof approved alternative methods ofcompliance with this airworthiness directive,if any, may be obtained from the BostonAircraft Certification Office.

(f) Special flight permits may be issued inaccordance with sections 21.197 and 21.199of the Federal Aviation Regulations (14 CFR21.197 and 21.199) to operate the aircraft toa location where the requirements of this ADcan be accomplished.

(g) The actions required by this AD shallbe performed in accordance with HamiltonStandard Service Bulletin (SB) No. 14RF–9–61–86, Pages 1–34, Revision 4, datedNovember 9, 1995, Hamilton Standard AlertSB No. 14RF–9–61–A90, Pages 1- 39,Original, dated November 9, 1995; HamiltonStandard Alert SB No. 14RF–9–61–A92,Pages 1–44, Revision 2, dated March 6, 1996,and Hamilton Standard SB No. 14RF–9–61–105, Pages 1–23, Original, dated July 24,1996. The incorporation of HamiltonStandard ASB Nos. 14RF–9–61- 86, 14RF–9–61–A90, and 14RF–9–61–A92, was approvedpreviously in accordance with 5 U.S.C.

552(a) and 1 CFR part 51 as of May 1, 1996(61 FR 16618, 4/16/96). The incorporation byreference of Hamilton Standard ServiceBulletin No. 14RF–9–61–105, Pages 1–23,Original dated July 24, 1996, was approvedby the Director of the Federal Register inaccordance with 5 U.S.C. 552(a) and 1 CFRpart 51 as of August 2, 1996. Copies may beobtained from Hamilton Standard, OneHamilton Road, Windsor Locks, CT 06096–1010; telephone (203) 654–6876. Copies maybe inspected at the FAA, New EnglandRegion, Office of the Assistant Chief Counsel,12 New England Executive Park, Burlington,MA; or at the Office of the Federal Register,800 North Capitol Street, NW., suite 700,Washington, DC.

(h) This amendment revises AD 96–08–01,issued April 1, 1996.

(i) This amendment becomes effective onAugust 2, 1996.

Issued in Burlington, Massachusetts, onJuly 27, 1996.Jay J. Pardee,Manager, Engine and Propeller Directorate,Aircraft Certification Service.[FR Doc. 96–19560 Filed 7–31–96; 10:38 am]BILLING CODE 4910–13–U


14 CFR Part 71

[Airspace Docket No. 96–ANM–012]

Establishment of Class E Airspace;Grants Pass, OR

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

SUMMARY: This action establishes theGrants Pass, Oregon, Class E airspace toaccommodate a Global PositioningSystem (GPS) Standard InstrumentApproach Procedure (SIAP) to theGrants Pass Airport.EFFECTIVE DATE: 0901 UTC, December 5,1996.FOR FURTHER INFORMATION CONTACT:James C. Frala, Operations Branch,ANM–532.4, Federal AviationAdministration, Docket No. 96–ANM–012, 1601 Lind Avenue, SW., Renton,Washington 98055–4056; telephonenumber: (206) 227–2535.


HistoryOn June 12, 1996, the FAA proposed

to amend part 71 of the Federal AviationRegulations (14 CFR part 71) to establishClass E airspace at Grants Pass, Oregon,to accommodate a new GPS SIAP to theGrants Pass Airport (61 FR 29699).Interested parties were invited toparticipate in the rulemakingproceeding by submitting writtencomments on the proposal. Nocomments were received.


The coordinates for this airspacedocket are based on North AmericanDatum 83. Class E airspace areasextending upward from 700 feet or moreabove the surface of the earth arepublished in paragraph 6005 of FAAOrder 7400.9C dated August 17, 1995,and effective September 16, 1995, whichis incorporated by reference in 14 CFR71.1. The Class E airspace listed in thisdocument will be publishedsubsequently in the Order.

The RuleThis amendment to part 71 of Federal

Aviation Regulations establishes Class Eairspace at Grants Pass, Oregon. TheFAA has determined that this regulationonly involves an established body oftechnical regulations for which frequentand routine amendments are necessaryto keep them operationally current. It,therefore, (1) is not a ‘‘significantregulatory action’’ under ExecutiveOrder 12866; (2) is not a ‘‘significantrule’’ under DOT Regulatory Policiesand Procedures (44 FR 11034; February26, 1979); and (3) does not warrantpreparation of a regulatory evaluation asthe anticipated impact is so minimal.Since this is a routine matter that willonly affect air traffic procedures and airnavigation, it is certified that this rulewill not have a significant economicimpact on a substantial number of smallentities under the criteria of theRegulatory Flexibility Act.

List of Subjects in 14 CFR Part 71Airspace, Incorporation by reference,

Navigation (air).

Adoption of the AmendmentIn consideration of the foregoing, the

FAA amends 14 CFR part 71 as follows:

PART 71—[AMENDED]

1. The authority citation for 14 CFRpart 71 continues to read as follows:

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 in

14 CFR 71.1 of the Federal AviationAdministration Order 7400.9C, AirspaceDesignations and Reporting Points,dated August 17, 1995, and effectiveSeptember 16, 1995, is amended asfollows:

Paragraph 6005 Class E airspace areasextending upward from 700 feet or moreabove the surface of the earth.* * * * *

ANM OR E5 Grants Pass, OR [New]Grants Pass Airport, OR

(lat. 42°30′37′′N, long. 123°23′17′′W)

That airspace extending upward from 700feet above the surface within a 7-mile radiusof the Grants Pass Airport and within 7 mileseach side of a 331° bearing from the GrantsPass Airport extending from the 7-mileradius to 25 miles northwest of the airport.* * * * *

Issued in Seattle, Washington, on July 23,1996.Richard E. Prang,Acting Assistant Manager, Air TrafficDivision, Northwest Mountain Region.[FR Doc. 96–19675 Filed 8–1–96; 8:45 am]BILLING CODE 4910–13–M

14 CFR Part 71

[Airspace Docket No. 96–ANM–013]

Establishment of Class E Airspace;Libby, MT

AGENCY: Federal AviationAdministration (FAA), DOT.

ACTION: Final rule.

SUMMARY: This action establishes theLibby, Montana, Class E airspace toaccommodate a Global PositioningSystem (GPS) Standard InstrumentApproach Procedure (SIAP) to the LibbyAirport.

EFFECTIVE DATE: 0901 UTC, December 5,1996.

FOR FURTHER INFORMATION CONTACT:James C. Frala, Operations Branch,ANM–532.4, Federal AviationAdministration, Docket No. 96–ANM–013, 1601 Lind Avenue, SW., Renton,Washington 98055–4056; telephonenumber: (206) 227–2535.


History

On June 12, 1996, the FAA proposedto amend part 71 of the Federal AviationRegulations (14 CFR part 71) to establishClass E airspace at Libby, Montana, toaccommodate a new GPS SIAP to theLibby Airport (61 FR 29700). Interestedparties were invited to participate in therulemaking proceeding by submittingwritten comments on the proposal. Nocomments were received.

The coordinates for this airspacedocket are based on North AmericanDatum 83. Class E airspace areasextending upward from 700 feet or moreabove the surface of the earth arepublished in paragraph 6005 of FAAOrder 7400.9C dated August 17, 1995,and effective September 16, 1995, whichis incorporated by reference in 14 CFR71.1. The Class E airspace listed in thisdocument will be publishedsubsequently in the Order.

The Rule

This amendment to part 71 of FederalAviation Regulations establishes Class Eairspace at Libby, Montana. The FAAhas determined that this regulation onlyinvolves an established body oftechnical regulations for which frequentand routine amendments are necessaryto keep them operationally current. It,therefore, (1) Is not a ‘‘significantregulatory action’’ under ExecutiveOrder 12866; (2) is not a ‘‘significantrule’’ under DOT Regulatory Policiesand Procedures (44 FR 11034; February26, 1979); and (3) does not warrantpreparation of a regulatory evaluation asthe anticipated impact is so minimal.Since this is a routine matter that willonly affect air traffic procedures and airnavigation, it is certified that this rulewill not have a significant economicimpact on a substantial number of smallentities under the criteria of theRegulatory Flexibility Act.


Airspace, Incorporation by reference,Navigation (air).

Adoption of the Amendment

In consideration of the foregoing, theFAA amends 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 the Federal AviationAdministration Order 7400.9C, AirspaceDesignations and Reporting Points,dated August 17, 1995, and effectiveSeptember 16, 1995, is amended asfollows:

Paragraph 6005 Class E airspace areasextending upward from 700 feet or moreabove the surface of the earth.

* * * * *

ANM MT E5 Libby, MT [New]Libby Airport, MT

(lat. 48°17′02′′N, long. 115°29′25′′W)That airspace extending upward from 700

feet above the surface within a 7-mile radiusof the Libby Airport and within 4 miles eachside of the 345° bearing from the LibbyAirport extending from the 7-mile radius to10 miles northwest of the airport; thatairspace extending upward from 1,200 feetabove the surface within an area bounded bya line beginning at lat. 48°19′00′′N, long.115°50′00′′W; to lat. 48°19′00′′N, long.115°16′00′′W; to lat. 48°45′00′′N, long.


115°22′00′′W; to lat. 48°45′00′′N, long.115°50′00′′W, to the point of beginning.* * * * *

Issued in Seattle, Washington, on July 23,1996.Richard E. Prang,Acting Assistant Manager, Air TrafficDivision, Northwest Mountain Region.[FR Doc. 96–19674 Filed 8–1–96; 8:45 am]BILLING CODE 4910–13–M

CONSUMER PRODUCT SAFETYCOMMISSION

16 CFR Part 1700

Poison Prevention Packaging

CFR Correction

In Title 16 of the Code of FederalRegulations, parts 1000 to End, revisedas of January 1, 1996, on page 685, in§ 1700.14, paragraph (a)(25) wasinadvertently omitted. The omitted textshould read as follows:

§ 1700.14 Substances requiring specialpackaging.

(a) * * *(25) Naproxen. Naproxen

preparations for human use andcontaining the equivalent of 250 mg ormore of naproxen in a single retailpackage shall be packaged inaccordance with the provisions of§ 1700.15 (a), (b), and (c).BILLING CODE 1505–01–M

DEPARTMENT OF HEALTH ANDHUMAN SERVICES

Food and Drug Administration

21 CFR Parts 73 and 184

[Docket No. 93G–0017]

Direct Food Substances Affirmed asGenerally Recognized as Safe; Listingof Color Additives Exempt FromCertification; Ferrous Lactate

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

SUMMARY: The Food and DrugAdministration (FDA) is amending itsregulations to affirm that ferrous lactateis generally recognized as safe (GRAS)as a color fixative on ripe olives. Theagency is adding this use of ferrouslactate as a color fixative on ripe olivesto the other uses for ferrous lactate. Theagency is also amending this regulationto permit additional methods ofsynthesis for ferrous lactate. This actionis in response to a petition filed by

Purac America, Inc. The agency, on itsown initiative, is also amending itscolor additive regulations to provide forthe safe use of ferrous lactate for thecoloring of ripe olives.DATES: The amendments to § 184.1311(21 CFR 184.1311) will be effective onAugust 2, 1996. New § 73.165 will beeffective on September 4, 1996, exceptas to any provisions that may be stayedby the filing of proper objections;written objections by September 3,1996. The Director of the Office of theFederal Register approves theincorporations by reference inaccordance with 5 U.S.C. 552(a) and 1CFR part 51 of certain publicationslisted in § 184.1311(b), effective August2, 1996; and in new § 73.165(b) effectiveSeptember 4, 1996.ADDRESSES: Submit written objections tonew § 73.165 to the DocketsManagement Branch (HFA–305), Foodand Drug Administration, 12420Parklawn Dr., rm. 1–23, Rockville, MD20857.FOR FURTHER INFORMATION CONTACT:Robert L. Martin, Center for Food Safetyand Applied Nutrition (HFS–217), Foodand Drug Administration, 200 C St. SW.,Washington, DC 20204, 202–418–3074.SUPPLEMENTARY INFORMATION:

I. BackgroundIn accordance with the procedures

described in 21 CFR 170.35, PuracAmerica, Inc., c/o 700 13th St. NW.,suite 1200, Washington, DC 20005,submitted a petition (GRASP 3G0396)requesting that the regulations in§ 184.1311 be amended to affirm thatferrous lactate is GRAS as a colorfixative in black olives.

FDA published a notice of filing ofthis petition in the Federal Register ofDecember 27, 1993 (58 FR 68437), andgave interested parties an opportunity tosubmit comments to the DocketsManagement Branch (HFA–305), Foodand Drug Administration, 12420Parklawn Dr., rm. 1–23, Rockville, MD20857. Also, in this notice, FDAannounced that, on its own initiative,the agency would amend the coloradditive regulations to provide for thesafe use of ferrous lactate as a coloradditive for the coloring of ripe olives.No comments were received in responseto this notice of filing.

Since the filing of this petition, theagency has come to recognize thatferrous lactate is being used as a colorfixative in ripe, rather than black, olives.The Agricultural Marketing Service ofthe U. S. Department of Agriculturedefines ‘‘ripe type’’ olives as ‘‘* * *those which have been treated andoxidized in processing to produce a

typical dark brown to black color’’ (7CFR 52.3752(a)). Also, in 21 CFR73.160, the use of ferrous gluconate isapproved for the coloring of ripe olives.Ferrous lactate is a potential substitutefor ferrous gluconate. Therefore, tomaintain consistency, the agency willrefer to ripe olives instead of blackolives.

II. Standards for GRAS AffirmationUnder § 170.30 (21 CFR 170.30),

general recognition of safety may bebased only on the views of expertsqualified by scientific training andexperience to evaluate the safety ofsubstances added to food. The basis ofsuch views may be either: (1) Scientificprocedures, or (2) in the case of asubstance used in food prior to January1, 1958, experience based on commonuse in food (§ 170.30(a)). Generalrecognition of safety based uponscientific procedures requires the samequantity and quality of scientificevidence as is required to obtainapproval of a food additive regulationand ordinarily is to be based uponpublished studies, which may becorroborated by unpublished studiesand other data and information(§ 170.30(b)). General recognition ofsafety through experience based oncommon use in food prior to January 1,1958, may be determined without thequantity or quality of scientificprocedures required for approval of afood additive regulation but ordinarilyis to be based upon generally availabledata and information concerning thepre-1958 history of use of the foodingredient (§ 170.30(c)). In its petition,Purac America, Inc., relied on thescientific procedures that have beenused to support the regulated uses offerrous lactate in § 184.1311, and onadditional submitted published andunpublished data, to establish thatferrous lactate is GRAS for use as a colorfixative on ripe olives.

III. Use, Estimated Exposure Levels,and Synthesis of Ferrous Lactate

Ferrous lactate is currently affirmedas GRAS for use as a nutrientsupplement under § 184.1311. Becauseferrous lactate is used interchangeablywith several other iron salts that alsomay be used as nutrient supplements,FDA considered the exposure to ferrouslactate resulting from its use on ripeolives in relation to total exposure fromiron.

Based on information supplied in thepetition, FDA has estimated that theexposure to iron from the consumptionof ferrous lactate-treated olives wouldbe no greater than 0.14 milligrams perperson per day (mg/person/day) (Ref. 1).


This represents a small contribution tothe reference daily intake (RDI) of 18mg/day for iron (21 CFR 104.20(d)(3)).As ferrous lactate can replace ferrousgluconate for coloring or fixing color inripe olives, no actual increase inexposure to iron is expected.

Lactic acid is GRAS (21 CFR184.1061) and is a ubiquitouscomponent of the human body. FDA hasestimated that exposure to lactate fromthe petitioned use would not contributesignificantly to the overall dietaryexposure to lactate (Ref. 1).

Section 184.1311(a) describes ferrouslactate as a greenish-white powderprepared by reacting calcium lactate orsodium lactate with ferrous sulfate or bydirect reaction of lactic acid with ironfilings. The petitioner described twoadditional methods for preparingferrous lactate: (1) Reaction of ferrouschloride with sodium lactate and (2)reaction of ferrous sulfate withammonium lactate.

The petitioner also submitted a draftcopy of specifications for ferrous lactatethat has been incorporated into the 4thedition of the Food Chemicals Codexrecently published by the NationalAcademy of Sciences. The agency hasreviewed these additional methods ofsynthesis and specifications for ferrouslactate and has concluded that they areacceptable (Ref. 1).

IV. SafetyFDA discussed the safety of ferrous

lactate in a proposal that published inthe Federal Register on April 21, 1987(52 FR 13086). As noted above, ferrouslactate is affirmed as GRAS for use as anutrient in food under § 184.1311.Ferrous lactate is also recognized as acoloring adjunct and nutrient by theFood and Agriculture Organization/World Health Organization and the JointExpert Committee on Food Additives.Ferrous lactate is listed as a colorretention agent in the Registry of FoodAdditives of the EuropeanCommunities. Ferrous lactate is alsolisted by the Spanish Ministry of Healthfor color fixation of black olives. Thepetitioner has relied primarily on theabove data to support its proposed useof ferrous lactate as a color fixative forripe olives.

FDA has considered the informationin the petition, along with otheravailable information, concerningferrous lactate and other iron salts andhas concluded that ferrous lactate is safefor use as a color fixative for ripe olives(Ref. 2). This determination is based onthe fact that lactate is a normalconstituent of food and a normalintermediary metabolite in humans.Ferrous salts are present in many foods,

particularly meats and poultry and areused as nutrients in food processing.The exposure to iron from theconsumption of ferrous lactate-treatedolives represents only a smallcontribution to the RDI of 18 mg/day foriron.

V. Conclusions on Use of FerrousLactate as a Color Fixative on RipeOlives

FDA has evaluated all of the availableinformation on ferrous lactate. Based onits review, the agency concludes that thedata are adequate to demonstrate thesafety of ferrous lactate for thepetitioned use. Therefore, the agencyconcludes, based upon scientificprocedures, that ferrous lactate is GRASfor use as a color fixative on ripe olivesat levels consistent with current goodmanufacturing practice. The agency istherefore amending § 184.1311 toprovide for this use.

The agency is also amending§ 184.1311 to provide for the additionalmethods of synthesis for ferrous lactatethat were discussed above.Additionally, the agency is amending§ 184.1311 to require that the ingredientmeets the specifications listed in theFood Chemicals Codex. In the existingGRAS regulation for food use of ferrouslactate (§ 184.1311), the agencyindicated that it was developingspecifications for ferrous lactate incooperation with the National Academyof Sciences. The agency, as noted above,has reviewed the specifications forferrous lactate that published in the 4thedition of the Food Chemicals Codexand has found them acceptable.Therefore, the agency is amending§ 184.1311 to require that ferrous lactatemeet the specifications in the FoodChemicals Codex, 4th edition, pages 154and 155.

VI. Use of Ferrous Lactate as a ColorAdditive

In the document announcing thefiling of Purac America, Inc.’s, GRASaffirmation petition for ferrous lactate,FDA proposed, on its own initiative, toamend the color additive regulations inpart 73 (21 CFR part 73) to provide forthe safe use of ferrous lactate as a coloradditive for the coloring of ripe olives.The agency undertook this actionbecause of questions as to whetherferrous lactate, when used for thepetitioned purpose, is functioning as acolor fixative or as a color additive.Section 721(b)(4) of the Federal Food,Drug, and Cosmetic Act (the act) (21U.S.C. 379e(b)(4), provides that ‘‘* * *a color additive shall be deemed to besuitable and safe for the purpose oflisting under this subsection for use

generally in or on food, while there isin effect a published finding of theSecretary declaring such substanceexempt from the term ‘food additive’because of its being generallyrecognized by qualified experts as safefor its intended use, as provided insection 201(s).’’ Therefore, to eliminateany questions with respect to the use offerrous lactate on ripe olives, the agencyproposed to amend part 73 to providefor the safe use of ferrous lactate for thecoloring of ripe olives.

Having concluded that ferrous lactateis GRAS for use as a color fixative onripe olives, the agency is amending part73 to provide for the use of ferrouslactate as a color additive for thecoloring of ripe olives.

The agency has also determined thatthe Food Chemicals Codexspecifications for ferrous lactate areacceptable for the color additive use offerrous lactate in coloring ripe olives,and in the regulation, the agency isrequiring that the substance conform tothese specifications. Section 721(c) ofthe act provides that GRAS substanceswhen listed as color additives areexempt from certification. Therefore,ferrous lactate, when used as a coloradditive for coloring ripe olives, isexempt from certification.

In accordance with § 71.15 (21 CFR71.15), the petition and the documentsthat FDA considered and relied upon inreaching its decision to approve thepetition are available for inspection atthe Center for Food Safety and AppliedNutrition by appointment with theinformation contact person listed above.As provided in § 71.15, the agency willdelete from the documents anymaterials that are not available forpublic disclosure before making thedocuments available for inspection.

VII. Environmental EffectThe agency has carefully considered

the potential environmental effects ofthis action. FDA has concluded that theaction will not have a significant impacton the human environment, and that anenvironmental impact statement is notrequired. The agency’s finding of nosignificant impact and the evidencesupporting that finding, contained in anenvironmental assessment, may be seenin the Dockets Management Branch(address above) between 9 a.m. and 4p.m., Monday through Friday.

VIII. Economic Effects of GRASAffirmation

FDA has examined the economicimplications of this final rule affirmingthat the use of ferrous lactate is GRASas a color fixative on ripe olives and ofamending § 184.1311 to permit


additional methods of synthesis forferrous lactate under Executive Order12866 and the Regulatory Flexibility Act(Pub. L. 96–354). Executive Order 12866directs 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 safetyeffects; distributive impacts; andequity). The Regulatory Flexibility Actrequires analyzing options for regulatoryrelief for small businesses.

FDA finds that this final rule is not asignificant regulatory action as definedby Executive Order 12866. Thecompliance costs to firms are zerobecause no current activity is prohibitedby affirming the GRAS status of ferrouslactate as a color fixative for ripe olives,or by amending the regulations topermit additional methods of synthesisfor ferrous lactate. Because this finalrule will not increase the health risksfaced by consumers, total health costsare also zero. Potential benefits includethe ability to use additional methods tosynthesize ferrous lactate and anyresources saved by eliminating the needto prepare further petitions to affirm theGRAS status of this substance.

Affirming that ferrous lactate is GRASas a color fixative for ripe olives underconditions of current goodmanufacturing practice and permittingadditional methods of synthesis forferrous lactate will expand theformulation possibilities for foodmanufacturers, including smallbusinesses. Therefore, in accordancewith the Regulatory Flexibility Act, FDAhas also determined that this rule willhave a positive impact on smallbusinesses.

IX. ReferencesThe following references have been

placed 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. Memoranda from Chemistry ReviewBranch, HFS–247, to Direct AdditivesBranch, HFS–217, dated December 19, 1994,July 28, 1995, and November 21, 1995.

2. Memorandum from AdditivesEvaluation Branch no. 1, HFS–226, to DirectAdditives Branch, HFS–217, datedSeptember 9, 1993.

X. Objections to § 73.165Any person who will be adversely

affected by new § 73.165 may at anytime on or before September 3, 1996, filewith the Dockets Management Branch(address above) written objections

thereto. Each objection shall beseparately numbered, and eachnumbered objection shall specify withparticularity the provisions of theregulation to which objection is madeand the grounds for the objection. Eachnumbered objection on which a hearingis requested shall specifically so state.Failure to request a hearing for anyparticular objection shall constitute awaiver of the right to a hearing on thatobjection. Each numbered objection forwhich a hearing is requested shallinclude a detailed description andanalysis of the specific factualinformation intended to be presented insupport of the objection in the eventthat a hearing is held. Failure to includesuch a description and analysis for anyparticular objection shall constitute awaiver of the right to a hearing on theobjection. Three copies of all documentsshall be submitted and shall beidentified with the docket numberfound in brackets in the heading of thisdocument. Any objections received inresponse to the regulation may be seenin the Dockets Management Branchbetween 9 a.m. and 4 p.m., Mondaythrough Friday. FDA will publish noticeof the objections that the agency hasreceived or lack thereof in the FederalRegister.

List of Subjects

21 CFR Part 73Color additives, Cosmetics, Drugs,

Medical devices.

21 CFR Part 184Food ingredients.Therefore, under the Federal Food,

Drug, and Cosmetic Act and underauthority delegated to the Commissionerof Food and Drug and redelegated to theDirector, Center for Food Safety andApplied Nutrition, 21 CFR parts 73 and184 are amended as follows:

PART 73—LISTING OF COLORADDITIVES EXEMPT FROMCERTIFICATION


Authority: Secs. 201, 401, 402, 403, 409,501, 502, 505, 601, 602, 701, 721 of theFederal Food, Drug, and Cosmetic Act (21U.S.C. 321, 341, 342, 343, 348, 351, 352, 355,361, 362, 371, 379e).

2. New § 73.165 is added to subpart Ato read as follows:

§ 73.165 Ferrous lactate.(a) Identity. The color additive ferrous

lactate is the ferrous lactate defined in§ 184.1311 of this chapter.

(b) Specifications. Ferrous lactateshall meet the specifications given in

the Food Chemicals Codex, 4th ed.(1996), pp. 154 to 155, which isincorporated by reference in accordancewith 5 U.S.C. 552(a) and 1 CFR part 51.Copies are available from the NationalAcademy Press, 2101 Constitution Ave.NW., Washington, DC 20418, or may beexamined at the Center for Food Safetyand Applied Nutrition’s Library, 200 CSt. SW., rm. 3321, Washington, DC, orat the Office of the Federal Register, 800North Capitol St. NW., suite 700,Washington, DC.

(c) Uses and restrictions. Ferrouslactate may be safely used in amountsconsistent with good manufacturingpractice for the coloring of ripe olives.

(d) Labeling. The label of the coloradditive shall conform to therequirements of § 70.25 of this chapter.

(e) Exemption from certification.Certification of this color additive is notnecessary for the protection of thepublic health, and therefore batchesthereof are exempt from the certificationrequirements of section 721(c) of theFederal Food, Drug, and Cosmetic Act(the act).

PART 184—DIRECT FOODSUBSTANCES AFFIRMED ASGENERALLY RECOGNIZED AS SAFE

Authority: Secs. 201, 402, 409, 701 of theFederal Food, Drug, and Cosmetic Act (21U.S.C. 321, 342, 348, 371).

3. Section 184.1311 is amended byrevising paragraphs (a), (b), and (c) toread as follows:

§ 184.1311 Ferrous lactate.(a) Ferrous lactate (iron (II) lactate,

C6H10FeO6, CAS Reg. No. 5905–52–2) inthe trihydrate form is a greenish-whitepowder or crystalline mass. It isprepared by reacting calcium lactate orsodium lactate with ferrous sulfate,direct reaction of lactic acid with ironfilings, reaction of ferrous chloride withsodium lactate, or reaction of ferroussulfate with ammonium lactate.

(b) The ingredient meets thespecifications of the Food ChemicalsCodex, 4th ed. (1996), pp. 154 to 155,which is incorporated by reference inaccordance with 5 U.S.C. 552(a) and 1CFR part 51. Copies are available fromthe National Academy Press, 2101Constitution Ave. NW., Washington, DC20418, or may be examined at theCenter for Food Safety and AppliedNutrition’s library, 200 C St. SW., rm.3321, Washington, DC, or at the Officeof the Federal Register, 800 NorthCapitol St. NW., suite 700, Washington,DC.

(c) In accordance with § 184.1(b)(1),the ingredient is used in food as anutrient supplement as defined in


§ 170.3(o)(20) of this chapter and as acolor fixative for ripe olives, with noother limitation other than current goodmanufacturing practice. The ingredientmay also be used in infant formula inaccordance with section 412(g) of theFederal Food, Drug, and Cosmetic Act(the act) (21 U.S.C. 350a(g)) or withregulations promulgated under section412(a)(2) of the act (21 U.S.C.350a(a)(2)).* * * * *

Dated: July 19, 1996.Janice F. Oliver,Deputy Director for Systems and Support,Center for Food Safety and Applied Nutrition.[FR Doc. 96–19305 Filed 8–1–96; 8:45 am]BILLING CODE 4160–01–F

21 CFR Part 101

[Docket No. 93N–0153]

RIN 0910–AA19

Food Labeling; Nutrient ContentClaims and Health Claims; RestaurantFoods

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

SUMMARY: The Food and DrugAdministration (FDA) is amending itsfood labeling regulations to remove theprovisions that exempt restaurantmenus from the requirements for hownutrient content claims and healthclaims are to be made and from therequirements for the provision ofnutrition information with respect to thenutrients that are the basis for the claim,when claims are made. Because asignificant number of meals areconsumed outside of the home, theextension of these requirements tomenus will help to increase theawareness of the American consumer tothe relationships between diet andhealth. FDA is issuing this final rule atthis time in response to a decision bythe United States District Court for theDistrict of Columbia.DATES: This regulation is effective May2, 1997. Written comments on theinformation collection requirementsshould be submitted by October 1, 1996.ADDRESSES: Submit written commentson the information collectionrequirements to the DocketsManagement Branch (HFA–305), Foodand Drug Administration, 12420Parklawn Dr., rm. 1–23, Rockville, MD20857. All comments should beidentified with the docket numberfound in brackets in the heading of thisdocument. Persons who believe it

would be useful for the agency to holda public meeting on what is required bythis rule should also send their lettersto the Dockets Management Branch.FOR FURTHER INFORMATION CONTACT:Michelle A. Smith, Center for FoodSafety and Applied Nutrition (HFS–158), Food and Drug Administration,200 C St. SW., Washington, DC 20204,202–205–5099.


I. Background

A. Requirements for Nutrition Labelingand Nutrient Content Claims andHealth Claims

The Nutrition Labeling and EducationAct of 1990 (the 1990 amendments) andthe final regulations that implement the1990 amendments (58 FR 2066, January6, 1993, as modified at 58 FR 44020,August 18, 1993) provide for a numberof fundamental changes in how food islabeled, including mandatory nutritionlabeling on most foods, uniformdefinitions for terms that characterizethe level of nutrients in a food, and theuse of claims about the relationshipbetween nutrients and diseases orhealth-related conditions. Thesechanges apply to virtually all foods inthe food supply, including foods sold inrestaurants.

The provision on nutrition labelingthat was added to the Federal Food,Drug, and Cosmetic Act (the act) by the1990 amendments, section 403(q) (21U.S.C. 343(q)), includes an exemptionfor foods that are served or sold inrestaurants or other establishments inwhich food is served for immediatehuman consumption (section403(q)(5)(A)(i)). This exemption,however, is contingent on there beingno claims or other nutrition informationon the label or labeling, or in theadvertising, for the food. The use ofnutrient content claims, health claims,or other nutrition information on thelabel or labeling of a food sold in arestaurant or other establishment inwhich food is served for immediateconsumption will subject that food tothe nutrition labeling provisions of theact (see sections 403 (q) and (r) of theact and § 101.9 (j)(2)(i) through (j)(2)(iii)(21 CFR 101.9 (j)(2)(i) through(j)(2)(iii))). Consistent with theseprovisions, in this discussion the term‘‘restaurant foods’’ refers to foods servedin restaurants and in otherestablishments in which food that isready for human consumption is sold(e.g., institutional food service,delicatessens, catering) or sold only insuch establishments. Firms selling suchfoods will be referred to as‘‘restaurants,’’ and responsible

individuals in these firms will bereferred to as ‘‘restaurateurs.’’

In the January 6, 1993, final rules onnutrient content claims and healthclaims (entitled ‘‘Food Labeling:Nutrient Content Claims, GeneralPrinciples, Petitions, Definitions ofTerms; Definitions of Nutrient ContentClaims for the Fat, Fatty Acid, andCholesterol Content of Food’’ (58 FR2302); and ‘‘Food Labeling; GeneralRequirements for Health Claims forFood’’ (58 FR 2478), respectively(hereinafter referred to as the ‘‘nutrientcontent claims final rule’’ and the‘‘health claims final rule,’’ andcollectively, as the ‘‘claims finalrules’’)), the agency concluded that ifclaims on restaurant foods are to beuseful to consumers, they must be valid.Thus, FDA stated that the samestandards will apply to restaurant foodsas to other foods with respect to basicdefinitions for nutrient content claims.FDA also stated that when a restaurantmakes explicit or implied reference to afood or substance in food, and directlyor indirectly links that substance to aneffect on a disease or health-relatedcondition (i.e., when both basicelements of a health claim are present),the restaurant must comply with thehealth claims regime (58 FR 2478 at2516). At the same time, FDAacknowledged that how a restaurantdemonstrates compliance with theserequirements is a difficult matter. FDApointed out, in the claims final rules (58FR 2302 at 2386 and 58 FR 2478 at2515), that it is not obligated under theact to regulate claims on restaurantfoods in a manner identical to that inwhich it regulates claims on packagedfoods. In the nutrient content claimsfinal rule (58 FR 2302), the agencyamended § 101.10 Nutrition labeling ofrestaurant foods (21 CFR 101.10) toprovide flexibility for restaurants indetermining compliance with FDA’srequirements for the claims regime andin providing nutrition labeling for foodsthat bear a claim.

Consequently, although restaurantfood must comply with the samestandards as other foods to bear a claim,the way in which a restaurantdetermines the nutrient content of afood or meal, and the way in whichnutrition information is communicatedto consumers, may be different forrestaurant foods than for foods fromother sources. For example, § 101.10provides that nutrient levels inrestaurant foods may be determinedthrough the use of nutrient data bases,cookbooks, or other reasonable basesthat provide assurance that the food ormeal meets the nutrient requirementsfor the claim. For compliance purposes,


a restaurant is required to provideinformation on its reasonable basis formaking a claim. Further, restaurantsmaking a claim are required to provideconsumers, upon request, with nutritioninformation on the nutrient that is thesubject of the claim. However, § 101.10provides that nutrition labeling may bepresented in various forms, includingthose provided in § 101.45 (21 CFR101.45) for raw fruit, vegetables, andfish, or by other reasonable means.

Thus, although FDA encouragesrestaurants to provide full nutritioninformation according to § 101.9whenever possible, the agency hasdetermined that information on thenutrient amounts that are the bases forclaims (e.g., if the claim is a ‘‘low fat’’claim, the nutrition information mustonly state that ‘‘this meal provides lessthan 10 grams of fat’’) may, in arestaurant setting, serve as thefunctional equivalent of completenutrition information as described in§ 101.9. Further, this information maybe provided by reasonable means, e.g.,in a flier, brochure, poster, notebook, ororally. FDA concluded that theseflexibilities (e.g., the ‘‘reasonable basis’’criterion) would help to ensure that arestaurateur is provided with a readilyachievable way to make claims for hisor her food, while the consumer isprovided with a reasonable assurancethat the claim is valid (58 FR 2302 at2387 and 58 FR 2478 at 2516).

The claims final rule contained twoadditional provisions. First,§ 101.13(q)(5) (21 CFR 101.13(q)(5))exempts nutrient content claims madeon menus from the requirement thatsuch claims comply with therequirements and definitions governingnutrient content claims. There is asimilar provision with respect to healthclaims made on restaurant menus in§§ 101.10 and 101.14 with respect tonutrition labeling requirements for arestaurant food that makes a nutrientcontent claim or a health claim. Theagency’s decision to exempt restaurantmenus from the requirements fornutrient content claims and healthclaims was based, in part, on thefrequency with which menus change(sometimes daily) (58 FR 2302 at 2388and 58 FR 2478 at 2517).

Second, because of concerns about thedemands that the new labelingrequirements would impose on smallrestaurants, FDA decided to use itsenforcement discretion to delay for 1year the effective date of its regulationsgoverning the use of claims by thesefirms. The agency defined ‘‘smallrestaurants’’ as ‘‘restaurant firmsconsisting of 10 or fewerestablishments’’ (58 FR 2302 at 2388

and 58 FR 2478 at 2517). Consequently,FDA provided that its requirements forhealth claims and nutrient contentclaims on restaurant labeling (exceptmenus) would be effective on May 8,1993, and May 8, 1994, respectively, forother than small restaurants (i.e.,restaurant firms with more than 10establishments), and on May 8, 1994,and May 8, 1995, for small restaurants.

FDA concluded that these additionalmeasures of flexibility would help toensure that restaurants, especially smallrestaurants, would not be deterred bythe 1990 amendments from providinguseful nutrition-related information totheir customers. It is the latter twodecisions that FDA decided toreconsider.

B. Decision to ReconsiderAmong the final rules that FDA issued

in the Federal Register of January 6,1993, was one entitled ‘‘Food LabelingRegulations Implementing the NutritionLabeling and Education Act of 1990;Opportunity for Comments’’ (58 FR2066) (hereinafter referred to as the‘‘implementation final rule’’). Amongother things, the implementation finalrule provided 30 days for thesubmission of comments on technicalissues, such as inconsistencies orunintended consequences of specificprovisions not raised in earliercomments. Two comments receivedduring the technical comment periodcriticized the menu exemption andquestioned its legality under both the1990 amendments and theAdministrative Procedure Act (theAPA). One comment received duringthe technical comment periodmaintained that the effort required forsmall restaurants to comply with thenew labeling requirements is nodifferent from that required by mediumand large restaurants. Another commentargued that delaying the effective datesfor small restaurants is not consistentwith the 1990 amendments.

After careful consideration of thecomments and further study of theadministrative record, the agencydecided to reconsider these provisions.Based on its reconsideration, in theFederal Register of June 15, 1993 (58 FR33055), FDA proposed to remove theexemption for menus from the coverageof the claims provisions. In thisproposed rule (hereinafter referred to asthe June 15, 1993, proposed rule), FDAtentatively concluded that the menuexemption is not consistent with the actor with the statutory charge provided bythe 1990 amendments. FDA stated thatit was concerned that health claims andnutrient content claims in menus willbe of little utility if they fail to comply

with the standards in the claimsregulations, which are designed toensure the validity of these claims.Further, FDA stated that the menuexemption could create a situation inwhich confusion about the validinformation provided by authorizedclaims in non-menu labeling wouldresult from the use of unauthorizedclaims in menus. FDA emphasized that(except for the deletion of the menuexemption) the proposed amendmentsdo not alter the substance or status ofthe current regulations governing theuse of nutrient content claims andhealth claims in restaurants (58 FR33055 at 33057). Finally, the agencynoted that it is virtually impossible todistinguish menus from other types ofrestaurant labeling, such as signs,placards, and other point of purchaseinformation, that are covered by theclaims final rules.

FDA also tentatively concluded that,in establishing dates of applicability forits requirements, it had no reasonablebasis for differentiating amongrestaurants based on size. Consequently,the agency proposed to remove theprovisions that delayed by 1 year theeffective dates for compliance for smallrestaurants. However, because theagency was unable to publish a finalrule before the May 8, 1994, and May 8,1995, compliance dates for non-menulabeling, this aspect of the proposal, i.e.,to shorten the delay in effective datesfor small restaurant firms, is moot.Therefore, FDA is withdrawing thataspect of its June 15, 1993, proposedrule.

In deciding whether to publish a finalrule, several concerns were raised forthe agency’s consideration. Theseconcerns involved evaluation of theextent to which the nutrient contentclaims and health claims that werebeing made on restaurant menus failedto meet FDA’s definitions, and ofwhether consumers were experiencingconfusion or were concerned aboutvariations between the labeling ofrestaurant and packaged foods.Concerns were also raised aboutwhether both nutrient content claimsand health claims needed to be covered,about whether the regulations wouldcause restaurants to stop making claimsand/or the associated foods, and aboutwhat the effect of the regulations wouldbe on small restaurants.

Before the agency had fully resolvedthese issues, other events intervened. Asnoted in the June 15, 1993, proposedrule, FDA had been sued by two publicinterest groups and two individuals onthe grounds that the menu exemptionviolates the 1990 amendments and theAdministrative Procedure Act (Public


Citizen, Inc., et al. v. Shalala, CivilAction No. 93 0509 (D.D.C.)). On June28, 1996, the court declared that theparts of the regulations that exemptedrestaurant menus from the nutrientcontent claim and health claimprovisions of the 1990 amendments arecontrary to the statute and ordered FDAto amend its regulations to includemenus. Therefore, FDA is issuing thisfinal rule. However, as explained below,in doing so, the agency remainscommitted to ensuring that the changesmade by this final rule do not adverselyaffect either small restaurants or theflow of information from restaurantmenus to consumers.

II. CommentsThe agency received 37 letters, each

containing 1 or more comments on itsJune 15, 1993, proposed rule, fromconsumers and consumer groups,restaurateurs, trade associations,registered dieticians, academia, andState officials. Some letters supportedthe proposal to delete the exemption forrestaurant menus, stating, for example,that exempting restaurant menus thatmake claims from the new labelingrequirements would undermine theability of consumers to make improveddietary choices. Conversely, other lettersopposed applying the new labelingrequirements to restaurant menus,stating that the requirements areburdensome and not appropriate for arestaurant situation. Many of thesecomments, however, expressedconfusion as to how the agency wouldimplement its requirements with respectto restaurant foods.

In response to the latter comments,FDA prepared a guidance document onthe labeling of restaurant foods. Theagency announced in the FederalRegister of September 19, 1995 (60 FR48516), the availability of the guidancedocument. The agency also published,as an appendix to that notice ofavailability, answers to some of the mostfrequently asked questions. Theguidance document, entitled ‘‘FoodLabeling: Questions and Answers,Volume II; A Guide for Restaurants andOther Retail Establishments,’’ explainshow FDA will implement itsrequirements for restaurant labeling thatbears a health claim or characterizes thelevel of a nutrient in a food.

Several comments addressed issuesthat are outside the scope of thisrulemaking, such as modifying thecriteria for nutrient content and healthclaims set out in the claims final rules.These comments are not responded to inthis document. A summary of thecomments that did address the proposal,and the agency’s responses, follow.

A. Menu Exemption

1. A number of comments supportedthe proposal, stating that FDA is legallybound to include menus under the 1990amendments. Comments stated thatrestaurant menus are labeling under theact and appropriate case law and, assuch, are covered by the 1990amendments. Comments further statedthat Congress neither provided for norintended an exemption for menus, and,therefore, FDA cannot grant one.

Other comments cited the importanceof restaurant foods in the American diet,stating that applying the requirements ofthe 1990 amendments to menus wouldplay a critical role in the ability ofconsumers to make healthy dietarychoices. Comments maintained thatmenus are the primary means by whicha consumer discovers information aboutthe foods available in a restaurant. Thus,these comments argued, the newlabeling requirements should apply toall types of restaurant labeling,including menus. As evidence of theneed to apply the new requirements torestaurant menus, several commentssubmitted menus that, in their opinion,bear claims that do not comply withFDA’s requirements.

Conversely, a number of commentsmaintained that many restaurateurscurrently offer ‘‘healthier’’ menu itemsand promote the nutritional quality ofthese foods to consumers in a variety ofways that are truthful and notmisleading. These commentsmaintained that applying therequirements of the 1990 amendmentsto restaurant menus is redundant andunnecessary because restaurant menusare already covered by section 403(a) ofthe act. Several comments stated thatmenus are also regulated by States and,because they are considered to beadvertising, by the Federal TradeCommission (FTC).

FDA agrees that many restaurantscurrently provide consumers withuseful information in a way that is notinconsistent with FDA’s newrequirements. Nonetheless, FDAconcludes, based at least in part on theact, that it is necessary to make theproposed changes. Thus, the agencydisagrees with the comments that statethat applying the requirements of the1990 amendments to restaurant menusis redundant and unnecessary.

As stated in the nutrient contentclaims final rule (58 FR 2302 at 2388),before the 1990 amendments, whenrestaurants provided nutritioninformation they were subject to§ 101.10, FDA’s pre-1990 amendmentnutrition labeling regulation. FDAenforcement of that regulation was

virtually nonexistent, however. Further,while section 403(a) of the act prohibitslabeling that is ‘‘false or misleading inany particular,’’ section 403(r) providesfor requirements with respect to claimsthat are in addition to those establishedin section 403(a) of the act. FDA’sstatutory charge under the 1990amendments is to ensure that nutrientcontent claims and health claims madefor food accurately characterize the foodand are scientifically valid. Finally,although FTC has jurisdiction overnational advertising, restaurant menusare more akin to labeling thanadvertising in their use and function.Thus, they are appropriately includedwithin the regulatory scheme designedfor food labeling.

FDA notes that restaurant foods are animportant part of the food supply. Asstated in the nutrient content claimsfinal rule (58 FR 2302 at 2387), as muchas 30 percent of the American diet iscomposed of foods prepared in foodservice operations. The agency agreeswith comments that menus are aprimary source of information forconsumers making purchase decisionsin a restaurant or other establishmentwhere food is sold for immediateconsumption.

In the claims final rules, the agencyjustified the menu exemption on thegrounds that it will help ensure thatrestaurants are not deterred by therequirements of the 1990 amendmentsfrom providing useful nutrition-relatedinformation. FDA also noted that fastfood chains and other restaurantsfrequently use non-menu media, such asposters and placards, to conveynutrition information to consumers, andstated that it would focus its efforts onthese media. However, FDA notes thatmenus are used to present informationabout the choices available in arestaurant or other establishment inwhich food is served for immediateconsumption. Consequently, FDAconcludes that menus that bear anutrient content claim, health claim, orother nutrition information have asignificant bearing on the ability ofconsumers to select foods that are usefulin maintaining healthy dietary practices.Therefore, FDA finds that claims onrestaurant menus should be subject tothe same standards as claims on otherfood labels and in labeling.

FDA finds that, if it were to maintainthe exemption for restaurant menus, itwould have no specific criteria fordetermining whether a nutrient contentclaim made in a menu appropriatelydescribes the food, or for determiningwhether a health claim is scientificallyvalid. Consequently, there would be noassurance that claims made in


restaurant menus are consistent withclaims on other restaurant labeling or onthe labeling of other foods, or that suchclaims would help consumers selectfoods that are useful in maintaininghealthy dietary practices.

On further review of the legislativehistory, FDA noted that section 405 ofthe act (21 U.S.C. 345), whichauthorizes exemptions to the act, wasamended by the 1990 amendments tostate: ‘‘This section does not apply tothe labeling requirements of section403(q) and 403(r).’’ Because the menuexemption is an exemption from section403(r) of the act, FDA tentativelyconcluded that it is barred by section405 of the act.

FDA also noted that section403(r)(5)(B) of the act limits the extentto which the nutrient content claimsand health claims provisions of the actapply to restaurants by, e.g., exemptingrestaurant foods from certain disclosurestatements that apply to claims onpackaged food labels. In its discussionof whether Congress intended to applythe 1990 amendments to restaurantmenus (58 FR 33055 at 33056), theagency cited a sponsors’ reportexplaining this section. That reportstated that restaurants that use nutrientcontent claims in connection with thesale of a food must comply withregulations issued by the Secretary ofHealth and Human Services undersection 403(r)(2)(A)(I). In that report, thesponsors specifically gave the exampleof the use of the word ‘‘light’’ or ‘‘low’’on a menu as the type of labeling thatmust comply with FDA’s requirements(136 Congressional Record H5841 (July30, 1990)). This part of the bill waspassed by the Senate unchanged. Thus,FDA concludes that the menuexemption is not consistent with thecongressional intent in adopting the1990 amendments, and that there is nobasis for exempting menus from thecoverage of section 403(r) of the act.(See also Public Citizen v. Shalala,supra.)

2. A number of comments stated thatconsumers’ need for useful nutritioninformation outweighs any burden thatthe requirements might place onrestaurants making claims on theirmenus. One comment stated that it didnot believe that the new requirementswould be burdensome for restaurantsbecause, according to the comment, a‘‘good’’ restaurant ordinarily keeps trackof ingredient quantities to evaluate foodpreparation costs. Several commentsstated that ample resources exist to aidrestaurants in developing menu itemsthat comply with FDA’s requirements.They noted that applying the newrequirements to menus would not

interfere with a restaurant’s ability toprovide dietary guidance on a menu,e.g., to identify those foods with anutrient content such that the foodcould be helpful to consumers inachieving a diet consistent with thedietary guidelines of a professionalhealth organization.

A number of comments stated that itis important that claims be used in aconsistent manner across the foodindustry. One comment argued thatexempting menus from the nutrientcontent claims and health claimsprovisions would create an unevenplaying field between restaurateurs andfood processors. Another commentmaintained that the need for a singlerule for the use of claims is furtherevidenced by FTC’s decision to adoptFDA’s definitions for nutrient contentclaims.

Conversely, a number of commentsstated that the menu exemptionprovides critical flexibility to therestaurant industry. Comments citednumerous differences betweenrestaurant foods and standardized,processed foods, including: Ingredientsupply sources, methods of preparation,and marketing. One comment stated thatmany food service operations find thenew regulations to be burdensome andpoorly suited to the food serviceindustry. Another comment argued thatthe nutrition labeling regulations wouldimpose a greater burden on restaurantsthan on food manufacturers becauserestaurants may change their menusmore than once a day, for example,between lunch and dinner. Severalcomments stated that revoking the menuexemption would create a barrier to thedissemination of beneficial informationto the consumer, would increase thecost of creating and promotingnutritionally improved foods, andwould ultimately limit the number ofnutritionally improved foods inrestaurants.

In response to comments thatcompliance with the requirements of the1990 amendments will be burdensome,FDA notes that these rules place noaffirmative requirements on restaurantsthat do not make claims. In other words,a restaurant would be in completecompliance with the new regulations ifit simply refrained from making anutrient content claim or a health claim.However, FDA does not believe such asituation would be the most desirableoutcome.

As stated in the nutrient contentclaims final rule (58 FR 2302), two ofthe goals of the 1990 amendments are toprovide for information that can assistconsumers in maintaining healthydietary practices and to encourage

product innovation through thedevelopment and marketing ofimproved foods. FDA has concludedthat, for information to be useful toconsumers, nutrient content and healthclaims must be valid. At the same time,the agency has recognized that there aresources of variation unique to restaurantfoods (e.g., methods of preparation).Consequently, to ensure that the newrequirements do not place anunreasonable burden on restaurants,FDA has included a number ofprovisions to provide flexibility in howthese requirements can be met in arestaurant situation. For example, asstated above, §§ 101.13(q)(5)(ii) and101.14(d)(2)(vii)(B) provide that arestaurant may make a nutrient contentclaim or a health claim for a food aslong as it has a ‘‘reasonable basis’’ forbelieving that the food contains therequisite level of the nutrient inquestion (58 FR 2302 at 2387 and 58 FR2478 at 2516). The ‘‘reasonable basis’’criterion provides that nutrient contentlevels may be determined by use ofnutrient data bases, cookbooks,analyses, or other sources that providereasonable assurance that the foodmeets the criteria for a claim.

FDA also notes that restaurants maydevelop and market menu items thathelp consumers to achieve certaindietary goals without subjecting thefood to the requirements of the 1990amendments. For example, restaurantsmay offer alternative selections whosevalue in a diet that conforms to dietaryguidelines may be recognized byconsumers without elaboration, e.g., rawvegetables, steamed vegetables, pastawith a tomato based sauce instead of acream sauce, a grain dish, or a fresh fruitplate. Optional preparation or servingmethods may be highlighted on menusby statements such as ‘‘may be preparedwith half the oil on request,’’ ‘‘smallerportions,’’ or ‘‘dressings and saucesavailable on the side.’’

Further, foods that meet the dietaryguidelines of a recognized dietaryauthority or health professionalorganization may be highlightedwithout subjecting the food to thenutrient content claims regime,provided the statement that a foodmeets dietary guidelines does not go onto characterize the level of a nutrient inthe food (§ 101.13(q)(5)(iii)). Forexample, a restaurateur may signal toconsumers by the use of a term orsymbol that a meal is formulated incomplete accordance with the DietaryGuidelines for Americans (e.g.,moderate calories, less than 30 percentof calories from fat, less than 10 percentof calories from saturated fat, emphasison vegetables, fruits, and grain products,


and moderate use of sugars andsodium). Likewise, dietary guidancethat, within the context of the labeling,does not meet the definition of a healthclaim, i.e., does not include both thefood or substance element and thedisease-related element (e.g., ‘‘eatingfive fruits and vegetables a day is animportant part of a healthy diet’’),would be considered dietary guidanceand not a health claim subject to section403(r) of the act (§ 101.14(a)(1)). FDAadvises that foods bearing statementsoutside the coverage of section 403(r) ofthe act are still subject to section 403(a)of the act, which requires that the labelbe truthful and not misleading, and tosection 201(n) of the act whichdescribes the circumstances in whichlabeling is misleading.

The agency acknowledges that asignificant effort will be required on thepart of some restaurants to examinetheir meals and menus to ensure thatthey are in compliance with the newregulations. However, many of thecomments that argued that therequirements for nutrient content claimsand health claims would be burdensomefor restaurants consistently evidenced asignificant misunderstanding of therelevant provisions, such as theapplication of ‘‘reference amountscustomarily consumed’’ and the needfor a ‘‘reference food’’ when makingsome types of claims. For example,several comments seemed to believethat restaurants would be forced to altertheir portion sizes to be identical to theestablished reference amounts. Anothercomment expressed the belief thatrestaurants would be required to declarethe serving size of its food as the sameas the reference amount, even if theamount served differed from thereference amount. A number ofcomments expressed concern thatrestaurateurs would be required todevelop recipes for, analyze, andmarket, a reference food for every foodthat bears a claim. Several commentsmaintained that there is not enoughroom on menus to provide the nutritioninformation that they assumed FDAwould require.

The agency advises that there is nobasis for the concerns expressed bythese comments. In a January 6, 1993,final rule, entitled ‘‘Food Labeling;Serving Sizes’’ (58 FR 2229) (hereinafterreferred to as the ‘‘serving size finalrule’’), FDA defined reference amounts,and the serving sizes derived from them,on the basis of the amount of foodcustomarily consumed per eatingoccasion (reference amount customarilyconsumed or ‘‘reference amount’’) inorder to facilitate comparison of thenutrient content of similar foods. FDA

established reference amounts for 139food product categories (§ 101.12 (21CFR 101.12)). The agency provided that,in order to make certain nutrientcontent claims or health claims, a foodmust meet the criteria for the claimbased on the amount of the particularnutrient present in the reference amountof the food. For example, the referenceamount for all soups is 245 grams (g)based on a serving size of 1 cup.However, restaurants may offer soup inmore than one portion size, e.g., by thecup and by the bowl. In order to beara ‘‘low fat’’ claim a cup of soup maycontain up to 3 g of fat per referenceamount (245 g). If this same soup isserved to customers in a bowl thatcontains 367 g of soup (367 g serving/245 g per reference amount for all soups= 1.5), it may contain up to 4.5 g of fat(3 g of fat per reference amount x 1.5 =4.5 g of fat) and still be labeled ‘‘lowfat.’’

Criteria for claims on meals and maindishes (as defined in § 101.13(l) and(m)) are generally based on the level ofa nutrient in 100 g of the food. Forexample, a ‘‘low fat’’ meal weighing 333g can contain up to 10 g of fat (333 gserving /100 g = 3.3; 3 g of fat per 100g of food x 3.3 = 10 g of fat). Again, arestaurant serving a larger portion of ameal or main dish item is not at adisadvantage compared to other foodsources when making a ‘‘low fat’’ claim.FDA advises, however, that someclaims, e.g., ‘‘free’’ claims andcholesterol claims, have additionalcriteria based on the labeled or actualserving size. The criteria for specificnutrient content and health claims areset out in part 101 (21 CFR part 101).

FDA advises that it is not necessaryfor restaurants to produce and market areference food in order to sell a foodthat bears a claim. Reference foods arenecessary only for comparative nutrientcontent claims, i.e., claims about thelevel of a nutrient in one food comparedto another, such as ‘‘reduced sodium’’ or‘‘less fat.’’ Provisions for the use of databases and other means to determinenutrient values for an appropriatereference food are set out in§ 101.13(j)(1)(ii). FDA also advises that,while restaurants are required toprovide nutrition information onrequest for foods that make a claim,FDA is providing considerableflexibility in § 101.10 as to the type ofnutrition information that must beprovided and on how this informationcan be provided. For example, in arestaurant situation, nutritioninformation may be presented in variousforms, including those provided in§ 101.45 and by other reasonable means(e.g., using posters, fliers, brochures,

notebooks, or communicated orally byrestaurant staff). In sum, FDA notes thatthe types of misconceptions presentedby these comments have resulted in aperception of burdens that do not in factexist.

Given the flexible provisions, such asthe ‘‘reasonable basis’’ criterion that theagency set out in the claims final rules,FDA concludes that most restaurantsthat wish to make claims will be able todo so. Further, as stated in severalcomments, many resources, includingFederal, State, and local governments;professional health organizations; anddietary professionals, are available toaid restaurants in their efforts to complywith FDA’s requirements. Moreover, asstated above, FDA has made availablethe labeling guidance document to assistrestaurants and other retailestablishments in developing or revisingtheir labeling to comply with the newrequirements.

Although these resources will likelybe sufficient to meet the needs ofrestaurateurs for information, FDA iswilling, if necessary, to take other stepsto help restaurants, particularly smallrestaurants, to understand and respondto the requirements established in thisfinal rule. The agency requests thatrestaurateurs contact the agency (seeaddress above) if they believe that itwould be useful to have a nationalmeeting or regional meetings to discusswhat is required for health or nutrientcontent claims made on menus tocomply with FDA’s regulations. If theagency receives a sufficient expressionof interest, it will hold such a meetingor meetings. If it decides to hold ameeting, FDA will provide ample noticeof the time and place in the FederalRegister.

While FDA acknowledges that somerestaurants may discontinue offeringimproved food selections becausemenus have to comply with therequirements for claims, the agencyconcludes that most restaurants willcontinue to work to develop improvedfoods about which they can makeclaims. Consumer interest in improvedfood choices provides a continuingincentive for such efforts. The numberof menus that currently bear claims andother nutrition information evidencesthe impact of consumer demand. FDAintends to work, as described above, tohelp restaurants to minimize thenumber of claims that are removed andto monitor the extent of this effect.

3. One comment argued that the FirstAmendment to the Constitution protectsmenus through its guarantee of freedomof the press. Another comment statedthat FDA is not authorized to regulaterestaurant foods under the Tenth


Amendment, as this power is not oneprovided for in Article I, Section 8, ofthe Constitution.

The agency disagrees. FDA’s authorityto regulate the content of the labels andlabeling of food in interstate commercehas been broadly upheld against FirstAmendment and other constitutionalchallenges. The agency’s authority toregulate food labeling, including thelabeling of restaurant foods, is discussedat length in the claims final rules (58 FR2302 at 2392 and 58 FR 2478 at 2524),which are incorporated herein byreference. The comments did notprovide any information, or make anyarguments, that the agency has notpreviously considered and found to bewithout merit.

4. Several comments maintained thatFDA cannot legally justify reversing itspolicy with respect to restaurant menus.These comments maintained that FDAhas received no new information orfacts since the claims final rules onwhich to base its reconsideration. Theyfurther maintained that the proposal todelete the menu exemption without, inthe comments’ opinion, adequatelyexplaining the departure from the pastnorm constitutes arbitrary andcapricious rulemaking and is a violationof the APA.

FDA disagrees with these comments.An agency may always change its mindand alter its policies. Conference ofState Bank Examiners v. Office of ThriftSupervision, 792 F. Supp. 837, 845(D.D.C. 1992). While the burden is onthe agency to justify the change from thestatus quo, that justification need notconsist of an affirmative demonstrationthat the status quo is wrong. It may alsoconsist of a demonstration that there isno cause to believe that the status quois right, so that the existing rule has norational basis to support it. Center forAuto Safety v. Peck, 751 F.2d 1336,1349 (D.C. Cir. 1985).

Concern about whether a rationalbasis existed for the agency’s rule isexactly what motivated FDA. In its June15, 1993, proposed rule, the agencypointed out that, in confronting theissue of what defines a menu in thewake of the publication of the January6, 1993, final rules, it found that it wasvirtually impossible to distinguishmenus from other types of restaurantlabeling, such as signs, placards, andother types of point of purchaseinformation that are covered under theagency’s rules (58 FR 33055 at 33056).Thus, the agency had ample basis to beconcerned about the distinction that ithad drawn in the final rules. Thisconcern was underscored by technicalcomments that the agency received onthe menu exemption (id). The

conclusion that the agency has reachedbased on its consideration of thecomments that it received on the June15, 1993, proposed rule is that there is,in fact, no rational basis fordistinguishing menus from other typesof restaurant labeling, and, therefore,FDA is revoking the provisions thatestablished that distinction.

5. One comment objected to what itperceived as the agency’s inability todefine menus in the June 15, 1993,proposed rule. The commentmaintained that this problem was not areasonable basis for deleting the menuexemption. The comment argued that, atthe least, FDA should issue an advancednotice of proposed rulemaking on thisissue.

FDA believes that the commentmisinterpreted the agency’s statement inthe June 15, 1993, proposed rule (58 FR33055 at 33056), about distinguishingbetween menus and other restaurantlabeling. FDA did not say that it couldnot define menus, but rather, that theagency found that it is virtuallyimpossible to distinguish menus fromother types of restaurant labeling, suchas signs, placards, and other point ofpurchase information, that the agencysaid in the claims final rules would becovered.

The agency notes that if its problemwere one of defining ‘‘menu,’’ it hasnumerous sources to which it couldturn. Webster’s II New RiversideUniversity Dictionary defines ‘‘menu’’as ‘‘A list of the food and drink availableor to be served for a meal.’’ Commentsreceived during the 30-day technicalcomment period to the claims final rulesprovided additional guidance, statingthat a menu ‘‘includes any mediumavailable to consumers in a restaurantthat can be consulted in making apurchasing decision in terms of foodselection or price.’’ One comment statedthat ‘‘A broad range of formats are usedto convey selection and priceinformation on which consumers rely.These formats are all properly‘‘menus’.’’

However, the problem that the agencystated that it was having in June of 1993was one of drawing a rationaldistinction that would justify itstreatment of menus on the one hand andof other types of restaurant labeling onthe other. Such a distinction isparticularly difficult to draw given thatsome of the same types of restaurantmedia that FDA said were covered inthe claims final rules, e.g., signs,posters, and placards, are used, likemenus, to convey purchase informationto consumers. Both menus and non-menu media may be used to provide

restaurant patrons with informationabout the foods available in a restaurant.

Accordingly, for the foregoingreasons, FDA is amending its foodlabeling regulations by removing theprovisions of the regulations thatexempt nutrient content claims andhealth claims made on restaurant menusfrom the coverage of these regulations.Specifically, FDA is amending theregulations by removing: (1) From§ 101.10, pertaining to nutrition labelingof restaurant foods, the language thatreads ‘‘* * * (except on menus)’’; (2)from § 101.13(q)(5), pertaining tonutrient content claims on restaurantfoods, the language that reads ‘‘* * *(except on menus)’’; and (3) from§ 101.14(d)(2)(vii)(B), pertaining tohealth claims on restaurant foods, thelanguage that reads ‘‘* * * (except if theclaim is made on a menu).’’ Thus, therequirements of FDA’s food labelingregulations will be applied to all formsof restaurant labeling, including menus,signs, posters, or placards, that bear anutrient content claim, health claim, orotherwise characterize the level of anutrient in a food.

6. One comment suggested that FDAspecify that the term ‘‘menu’’ applies toall types of menus, includingwallboards, take- out menus, and menusdelivered to the table.

FDA advises that, in the claims finalrules, it differentiated between menusand non-menu media by describingthose media that it did not consider tobe menus, e.g., posters, signs, andplacards. However, as discussed inresponse to the preceding comment, theagency has determined that it isvirtually impossible to distinguishbetween menus and other media that areused to convey purchase information toconsumers. Therefore, FDA is amendingits food labeling regulations byremoving the provisions that exemptmenus from the coverage of theseregulations. Because the requirementswill be applied to all forms of restaurantlabeling that bear a claim, the issue ofdistinguishing between menus and non-menu labeling is rendered moot.

B. Modification of Effective DateThe claims final rules provided that

regulations governing the use of healthclaims in restaurant labeling (other thanmenus) would become effective on May8, 1993, except for small restaurantfirms consisting of 10 or fewerestablishments for which theseprovisions were to become effective 1year later, i.e., May 8, 1994. Withrespect to the use of nutrient contentclaims and other nutrition informationin restaurant labeling (except formenus), FDA’s requirements were to


become effective on May 8, 1994, formedium and large restaurant firms andon May 8, 1995, for small firms.

In the claims final rules, FDA statedthat it recognized that a significant effortwould be necessary on the part ofrestaurants to show that they have areasonable basis to believe that theirfood complies with FDA’s regulationsfor the use of nutrient content claimsand health claims. At that time, theagency believed that it would beespecially difficult for small restaurantsto become familiar with Federalrequirements and to determine how toapply these requirements to theirindividual food selection andpreparation methods in a short time.Consequently, FDA had decided thatsmall restaurants should be given theadditional time (i.e., 1 year) to comeinto compliance.

During the technical comment period,FDA received information thatconvinced the agency that it wasappropriate to reconsider its decision todelay the effective date of the claimsrequirements for small restaurants.Thus, in its June 15, 1993, proposed rule(58 FR 33055 at 33057), FDA proposedto modify the delay in the effectivedates for small restaurant firms.However, based in part on numerousdemands associated with implementingthe 1990 amendments and the agency’slimited resources, this speed-up did nothappen. FDA’s efforts to move up thosedates have effectively been renderedmoot by the agency’s inability to issuea final rule. Consequently, the followingcomments are now only relevant as theyapply to restaurant menus.

1. Delay for Small Restaurants7. One comment argued that

compliance would be more difficult forsmall firms compared to large restaurantchains because of limited resources. Thecomment did not, however, provide anyinformation that the agency had notpreviously considered. Anothercomment maintained that an extensionfor small restaurants is justified by the‘‘lack of real harm’’ to the public fromsuch a delay.

Conversely, the majority of letters thataddressed the proposed modification ineffective dates supported the agency’sproposal to establish uniform effectivedates for all restaurants. Thesecomments maintained that there is noappropriate basis for differentiatingamong restaurants based on size whenestablishing a date by which each mustcomply with FDA’s requirements. Thus,the comments stated, the agency shouldenforce its labeling requirements forlarge and small restaurants, at the sametime. However, the comments contained

numerous and varied suggestions as towhen the new effective dates should be.

Having considered the comments,FDA concludes that, although there aresome areas where small restaurants maybe at a disadvantage compared to largerestaurants, e.g., the cost of a one-timemenu change relative to more limitedresources, in most respects, thedistinction between small restaurantsand larger restaurants is not as great asthe agency had believed when it issuedthe January 6, 1993, final rules. Forexample, not all restaurant firms withgreater than 10 establishments arefamiliar with the new requirements orhave established nutrition supportpersonnel. Further, in establishing therequirements for restaurant labeling inthe claims final rules, the agencyworked with restaurant industryrepresentatives to make its requirementsfeasible for both large and smallrestaurants. FDA advises that theflexibility built into these requirements,e.g., the ‘‘reasonable basis’’ criterion,provides a wide range of options forhow a restaurant may determine thenutrient content of its food, and how itcommunicates this information toconsumers. FDA finds that this flexibleapproach will allow most restaurants,including small restaurants, to chooseoptions that fit their own needs andresources. Thus, FDA finds nothing inthe comments that would provide abasis for differentiating amongrestaurants based on size whenestablishing a date by which restaurantsmust comply with these requirements.

2. Establishment of Effective Date forMenus

FDA is removing the exemption formenus that it adopted inappropriately.While, in light of overwhelming supportfrom comments and in the absence ofany new information to the contrary,FDA has concluded that the same dateof applicability should apply to menusin all restaurants, regardless of size, theagency wants to be sure that the effectof its decision is not punitive forrestaurants. FDA finds that it hasflexibility in setting the date by whichmenus must comply with itsrequirements for claims. Thus, theagency is using that discretion in settingthe date by which menus must complywith the rules on the use of claims. Theissue that FDA has considered is whateffective date will provide allrestaurants with a reasonable amount oftime to make any necessary changes intheir menus while providing consumerswith useful information as quickly aspossible.

8. A few comments stated thatrestaurant menus should comply with

FDA’s requirements by the same date aslabeling on foods from other sources,i.e., May 8, 1994. These commentsstated that to delay the effective date forcompliance by restaurant menus beyondMay 8, 1994, would create an unevenplaying field between restaurants andfood processors. The comments furtherargued that any extension forrestaurants beyond May 8, 1994, wouldviolate the mandatory effective datesprovided by the 1990 amendments.Another comment also tied the effectivedate for restaurant labeling with the dateof applicability for other foods, exceptthat it suggested that restaurants shouldhave an additional 4 months after theMay 8, 1994, deadline (i.e., untilSeptember 8, 1994) to bring their menusinto compliance.

FDA does not agree that it mustestablish the same effective dates forrestaurant menus as for other foodlabeling. As stated above, FDA must actin an equitable manner in removing theexemption for restaurant menus.Although the agency continues to strivefor consistency within the framework ofthe 1990 amendments, this rulemakingto amend certain provisions of theJanuary 6, 1993, final regulations cannotreasonably impose the same deadlinesthat the agency imposed in the finalregulations implementing the 1990amendments that it promulgated over 40months ago. Further, the date ofpublication of this final rule obviouslymakes an effective date of May 8, 1994,moot.

9. One comment suggested thatcompliance with FDA’s requirementsbegin 1 year from the date of the lastmenu printing. In support of itssuggestion, the comment stated thatmany restaurants change their menusyearly, and that it would be costly forrestaurants to change menus in midyearto comply with the new regulations. Thecomment did not, however, providedata on the number of restaurants thatwill need to make changes in theirmenus or on the number of restaurantsthat do not normally change theirmenus more than once a year.

FDA notes that restaurants varywidely in the frequency with whichthey print new menus. Comments to theJune 15, 1993, proposed rule, stated thatmenus may be printed infrequently,annually, daily, or even for each meal.Given the wide variance in practiceswithin the industry, the agency findsthat establishing a compliance date thatis based on a date that is a given periodof time from the last menu printingwould be impractical from anenforcement standpoint. It would beextremely difficult to ensure compliancewith an application date that varies


from one establishment to another. Insuch a situation, compliance checkswould require not merely looking at thelabeling but also determining the dateon which labels had last been revised.

Further, establishing an applicationdate that, as it is phased in, affects onlysome establishments, is inconsistentwith the establishment of a singleeffective date for labels on foods fromother sources. As stated in the August18, 1993, technical amendments (58 FR44033 at 44035), the nutrition labelingrequirements apply to food labeled afterMay 8, 1994. The agency stated that theterm ‘‘labeled’’ means the date that thelabel is affixed to the food. FDA notesthat each time a menu is used in arestaurant to convey purchaseinformation about a food served in therestaurant, such use is analogous toaffixing a label to a packaged food.Thus, establishing a specific date ofapplicability for restaurant menus, suchthat the date applies to the date that anymenu is used as labeling in anyrestaurant, would be consistent with thetreatment of labels on foods from othersources.

Finally, confusion could result from asituation in which, for example, twoneighboring restaurants use identicalclaims on identical menus, onerestaurant that makes claims would useterms in a manner that complies withFDA’s requirements, while therestaurant that printed its menus lessthan a year earlier would not. Moreover,a restaurant that has not changed itsmenu in some time because of limitedresources could be forced to change itsmenu sooner than a larger restaurantthat had recently printed new menus.Such an outcome would make no sense.

FDA concludes that it is moreappropriate to establish an effective datefor applying its requirements to menusbased on a given amount of timefollowing the date on which this finalrule publishes rather than an arbitrarydate, such as the date of the last menuchange, that may vary betweenrestaurants. This approach will ensurethat all restaurants will have a specifiedamount of time to change menus tocomply with any applicablerequirements, and that the amount oftime will be based on anaccommodation of both consumer andindustry needs, rather than an arbitrarydate that will vary between restaurants.

10. A number of comments agreedwith FDA’s proposal that the modifiedeffective dates for restaurant menulabeling should allow restaurants toachieve compliance within an amountof time similar to the time that otherfood producers have had, and that theeffective dates should be uniform for all

restaurants, regardless of size. Thesecomments stated that all restaurantsshould be required to comply withhealth claims regulations 4 months afterpublication of a final rule and withnutrient content claims regulations 1year after publication, as proposed. Onecomment stated that the date ofapplicability for requirements for menusbearing nutrient content claims shouldbe based on the same amount of timethat packaged foods had, i.e., 16 monthsafter publication of the January 6, 1993,final rules.

Alternatively, several commentsmaintained that compliance with thenutrient content claims regulationswould be no more difficult thancompliance with the requirements forthe use of health claims, and that,consequently, restaurant menus shouldbe required to comply with bothregulations at the same time. Commentswere divided, however, as to whetherthe single effective date for bothnutrient content claims and healthclaims should be 4 months or 12 monthsafter the date of publication of a finalrule.

FDA has carefully considered howmuch time should be given forrestaurant menus to be brought intocompliance with the nutrient contentclaim and health claim labelingrequirements. FDA’s consideration hasbeen guided by section 10 of the 1990amendments. That provision made thenutrient content claim and health claimprovisions effective 6 months afterenactment but gave FDA the authority todelay application of the nutrient contentclaim requirements for up to 1 year if itfound that compliance with thoserequirements would cause undueeconomic hardship (section 10(a)) of the1990 amendments). FDA took advantageof the latter provision. FDA notes thata number of the factors that influencedthe agency’s decision to delay theapplication of the nutrient contentclaims requirements in the January 6,1993, final rule do not have equalapplication with respect to thisrulemaking.

One factor that influenced FDA’sdecision to delay the applicability datewas the amount of effort that would benecessary to learn about how to comeinto compliance with the new rules (56FR 60856 at 60862, November 27, 1991).The agency notes that, since publicationof the January 6, 1993, final rules, FDAand other organizations have beenactive in disseminating informationabout the new food labelingrequirements. Because access toinformation about these requirements,and the number of resources available tofacilitate compliance with these

requirements, have grown, the effortrequired on the part of a restaurateurwho is not familiar with therequirements to obtain informationabout them has been reduced comparedto that which was required for makersof other types of food. Moreover, theeffort required for compliance byrestaurateurs is even further reduced bythe flexible provisions that FDA hasestablished specifically for restaurantsituations, e.g., providing the‘‘reasonable basis’’ criterion for nutrientcontent determinations.

A second factor that influenced FDA’sdecision was the amount of time neededto come into compliance with thelabeling requirements (56 FR 60856 at60862). The type of labeling used inrestaurants reduces the amount of time,compared to other food sources, that isreasonably necessary to achievecompliance. For example, for packagedfoods that bear nutrient content claims,manufacturers needed time to use uppreexisting labels to reduce the cost ofcomplying with the new requirements.Conversely, menu inventory is generallynot affected by a food purchase. Further,many restaurants use menus that may berevised, printed, and copied in-house,thereby avoiding the queue at printersthat affected many food manufacturers.Therefore, providing time for bringingmenus into compliance will not havethe same effects on the costs of arestaurateur that it had on the costs ofthe manufacturer. Consequently, FDAconcludes that significant circumstancesthat justified a1-year delay in theapplicability of the nutrient contentclaims provisions for packaged foods donot apply to restaurant foods.

Moreover, in the June 15, 1993,proposed rule (58 FR 33055 at 33058),FDA cited an informal survey by theNational Restaurant Associationindicating that up to 89 percent of allprinted menus include at least oneclaim. Based on information in thesurvey, FDA had assumed that morerestaurants were making nutrientcontent claims than health claims, andthat, consequently, a larger effort wouldbe required on the part of restaurants toensure compliance with requirementsfor nutrient content claims compared tohealth claims. The agency tentativelyconcluded that a date of applicability of4 months after the publication of a finalrule would be sufficient to ensurecompliance with the requirements forhealth claims.

FDA continues to believe that few ifany restaurant menus bear expresshealth claims, such as ‘‘a diet low insodium may contribute to a reduced riskof high blood pressure, a diseaseassociated with many factors,’’ on their


menus. However, a number ofcomments to the June 15, 1993,proposed rule provided examples ofmenus that bear terms and symbols (e.g.,heart symbols and terms such as ‘‘hearthealthy’’) in a manner that makes themimplied health claims under the act.Based on this information, and oninformation gleaned by FDA frominformal inquiries from the industry(Ref. 1), FDA concludes that the numberof restaurants making health claims isgreater than it had previously assumed.

Furthermore, because of the flexibleprovisions that FDA has established forrestaurant foods, it may be easier for arestaurant to establish that a foodqualifies to bear a nutrient content claim(e.g., that a ‘‘low fat’’ food contains nomore than 3 g of fat per referenceamount) than that it qualifies to bear ahealth claim (i.e., that, in addition to thecriterion for the nutrient in the claim,the food contains less than thedisqualifying levels for fat, saturated fat,sodium, and cholesterol, and 10 percentor more of the Reference Daily Intake orDaily Reference Value for vitamin A,vitamin C, iron, calcium, protein, orfiber per reference amount prior tonutrient addition). The agencyconcludes that the effort required on thepart of restaurants that want to makehealth claims in their menus (e.g., toobtain, read, and understand FDA’sregulations; to develop a ‘‘reasonablebasis’’ for making claims; to generatenutrition information for consumers;and, in some cases, to modify a food orits labeling) will be as great, if notgreater, than that required of restaurantsmaking nutrient content claims.

The agency notes that, in establishinga specific effective date, its goal is toensure that consumers have access touseful nutrition-related information asquickly as possible while providingrestaurateurs with sufficient time tomake necessary changes. FDA does notbelieve that all restaurant menus couldbe reasonably expected to comply withthe health claims requirements withinthe proposed 4-month timeframe. Whilemany restaurants have already begunactions to come into compliance,especially larger restaurants that makeclaims on non-menu labeling, somerestaurants that use only menus toconvey purchase information may notbe familiar with the requirements orknow how to obtain the necessaryinformation to determine whether theirmenus are in compliance. FDA furthernotes that an effective date for itsrequirements for restaurant menus thatbear nutrient content claims of 4 monthsafter the publication of this final rule, assuggested by some comments, wouldprovide restaurant foods significantly

less time than had been afforded foodsfrom other sources. Thus, a complianceperiod of 4 months after publicationwould place restaurants offeringimproved foods and promoting thesefoods on their menus at a disadvantagecompared to other food manufacturers.

Conversely, FDA concludes that it isnot necessary for restaurant menus tohave the same amount of time that otherfood labeling producers were given.Based in part on the amount of time thatinformation on the criteria that will beapplied to menus has been available(i.e., since January 6, 1993), and on theflexible rules it has adopted forrestaurants, FDA concludes that acompliance period of 12 or 16 monthsis longer than is necessary for menus,and that such a time period wouldunduly delay consumer access to usefulinformation.

After considering the foregoing, FDAhas decided to establish a single date ofapplicability for both the nutrientcontent claim and health claimrequirements for menus and to establishthat date as May 2, 1997. This date willprovide restaurateurs with 9 months tobring their menus into compliance. FDAhas decided to provide 9 months basedon the following three factors: First, 6months is the amount of time thatCongress provided for compliance withthese provisions in the absence ofundue economic hardship (section 10 ofthe 1990 amendments). Second, FDAfinds that, based on the economicimpact analysis in this rulemaking,unlike for non-restaurant foods,economic hardship does not exist.Consequently, the agency has no basisfor providing an additional year forcompliance by restaurant menus. Third,in Pub. L. 103–261, Congress providednon-restaurant food manufacturers withan additional 3 months to achievecompliance with the new labeling rules.Consequently, FDA finds thatestablishing May 2, 1997 as the effectivedate for the amendments that it ismaking to §§ 101.10, 101.13(q)(5), and101.14(d)(2)(vii)(B) and (d)(3), and, thus,as the date that menus must be incompliance, is consistent with thetreatment of non-restaurant foods. FDAbelieves that establishing a single datewill benefit both consumers andindustry. FDA notes that the differenteffective dates for nutrient contentclaims and for health claims in non-menu labeling in small restaurants andin larger restaurants have created a greatdeal of confusion about whatrequirements are effective at a giventime. The agency concludes thatestablishing different dates for the use ofhealth claims and of nutrient contentclaims in menus would only further

compound this confusion. FDA findsthat, in light of the confusion expressedby comments and in informalcommunications with the agency (Ref.1), establishing a uniform date for alltypes of claims on menus makes themost sense. The agency further findsthat a single effective date for menuswill prevent the consumer confusionthat could result from a restaurant usinga menu that bears some types of claimsthat are consistent with the newrequirements and other claims that arenot. In addition, a single effective datefor all menu claims will aid complianceby giving restaurants a single date bywhich to make necessary changes,regardless of the kind of statement (e.g.,nutrient content claim, health claim,third party endorsement, or dietaryguidance) used to present nutrientinformation to consumers. Thus, asingle date will avoid the need tochange menus twice within thecompliance period. The agencyconcludes that, for efficient enforcementof the act, establishing a single effectivedate for both nutrient content claimsand health claims on menus is desirableand appropriate.

Moreover, given the amount of timethat FDA’s labeling rules have been inplace, an effective date of May 2, 1997,will provide ample time for restaurantsto bring their menus into compliancewithout unduly delaying consumeraccess to useful nutrition-relatedinformation. An effective date of May 2,1997, will also provide time for FDAand other regulatory officials to workwith restaurants, consumers, dietitians,health professional organizations, andother interested parties to ensure thatthe agency’s regulations are adequatelyimplemented with respect to restaurantmenus.

Thus, the deletion of the phrase‘‘(except for menus)’’ that exemptedmenus from nutrient content claimrequirements in §§ 101.10 and101.13(q)(5) will be effective on May 2,1997. Likewise, the deletion of thephrase ‘‘(except on menus)’’ thatexempted menus from health claimrequirements in § 101.10 and the phrase‘‘(except if the claim is made on amenu)’’ in § 101.14(d)(2)(vii)(B) willalso be effective on that date.

III. Environmental Impact

The agency has determined under 21CFR 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.


IV. Analysis of Impacts

FDA has examined the economicimplications of the final rule as requiredby Executive Order 12866 and theRegulatory Flexibility Act (5 U.S.C.601–612). Executive Order 12866 directsagencies to assess all costs and benefitsof available regulatory alternatives and,when regulation is necessary, to selectthe regulatory approach that maximizesnet benefits (including potentialeconomic, environmental, public healthand safety effects; distributive impacts;and equity). If a rule has a significanteconomic impact on a substantialnumber of small entities, the RegulatoryFlexibility Act requires agencies toanalyze regulatory options that wouldminimize the significant economicimpact of that rule on those smallentities. FDA finds that this final rule isa significant rule as defined byExecutive Order 12866, and finds underthe Regulatory Flexibility Act, that thefinal rule will not have a significanteconomic impact on a substantialnumber of small entities.

A. Background

In the Federal Register of January 6,1993 (58 FR 2927), FDA published afinal regulatory impact analysis (RIA) ofthe final rules implementing the 1990amendments (hereinafter referred to asthe January 6, 1993, RIA). In thatdocument (58 FR 2927 at 2934), FDApresented costs of compliance with the1990 amendments for food serviceestablishments. Although the agencydid not include menus in its regulatorycoverage of the nutrient content claimsand health claims final rules, it assumedthat restaurants would alter their menusto comply with the agency’s definitionsbecause of the possibility ofenforcement by the States.Consequently, FDA included the cost ofaltering menus in its assessment.

In the June 15, 1993, proposed rule,FDA proposed to remove the provisionsthat exempt restaurant menus from therequirements for how nutrient contentclaims and health claims are to be made.Because the agency originally assumedthat restaurants would alter their menusin order to comply with the regulationsso as to avoid State enforcement, FDAassumed that the proposed action toinclude menus in the agency’sregulatory coverage would not result inany significant increase in costs to foodservice establishments beyond thatestimated in the January 6, 1993, RIA.

B. Costs of the Final Regulation

The following estimates are based onboth quantitative and anecdotalinformation provided in the comments.

However, FDA has previously statedthat it lacks in-depth data on a numberof issues related to the food serviceindustry (56 FR 60537 at 60554,November 27, 1991). Therefore, whilethese estimates represent the bestinformation available to the agency,FDA acknowledges that there isuncertainty in these estimates.

In the January 6, 1993 (58 FR 2927 at2934), RIA, FDA estimated that 75percent of restaurants, including allsmall restaurants, would normally altermenus before the applicable compliancedate for nutrient content claims andhealth claims on non-menu labeling(based on a 16-month complianceperiod). The agency also assumed that,in revising their menus, mostrestaurants would make changes tocomply with the regulations so as toavoid enforcement by the States.Consequently, FDA estimated that only14,500 commercial establishmentswould incur costs attributable to thenutrient content claims and healthclaims final rules. In the June 15, 1993,proposed rule, FDA repeated theassumptions stated in the January 6,1993, RIA, i.e., that most restaurantswould alter their menus in order tocomply with the regulations.

FDA received very few commentsregarding its economic analysis of theJune 15, 1993, proposed rule. However,a few comments indicated that theagency’s assumption that mostrestaurants would alter menus tocomply with the agency’s requirementsbecause of the possibility ofenforcement by the States was notcorrect. FDA has anecdotal informationindicating that at least some restaurantshave not yet altered menus to complywith the claims requirements andwould, therefore, bear some cost of theagency’s action to remove theexemption for menus. However, thecomments did not provide informationregarding the proportion of the industrythat has not yet altered its menus.

FDA notes that the costs of revisingmenus to comply with the newrequirements are one-time costs only.However, costs of ensuring that claimsare made on a reasonable basis and arein conformance with FDA rules, andcosts of maintaining that informationand presenting it to consumers ondemand, are on-going costs, changingwith new claims only in the formercase. FDA does not have informationwith which to estimate these costs.However, those firms that wouldnormally redesign their menus withinthe compliance period will not incurcosts attributable to FDA’s regulations.In the analysis of the proposed rule,FDA estimated that 75 percent of all

menus would normally be revisedduring the compliance period ending inMay 1994.

FDA received comments regarding thefrequency of menu changes. Commentsvaried in their estimates of thefrequency of menu redesign, rangingfrom several times a day to once a year.FDA concludes that, taken as a whole,these comments do not significantlyalter its original assumptions about therates at which restaurants alter menus,that is, that an average of 5 percent ofall restaurants would normally altertheir menus in a month and, thus, 45percent of all restaurants wouldnormally alter their menus during a 9-month compliance period.

In previous analyses, FDA noted that,because it is requiring only a reasonablebasis to support claims in restaurantlabeling, no analytical testing isnecessary. FDA has described a numberof methods by which a restaurant maydetermine the nutrient content of a foodthat are less costly than chemicalanalyses. For example, a claim may bebased on nutrient data published inFDA’s regulations for the voluntarynutrition labeling of fresh fruits,vegetables, and fish. A claim may alsobe based on nutrient data provided inUSDA’s Handbook 8, information in acookbook, or an analysis using a reliabledatabase. However, the cost ofdetermining whether or not a reasonablebasis exists to support a claim is notzero. Estimates of the cost of thesesources range from $10 to $175 perclaim (Ref. 2).

FDA now assumes that approximately50 percent of the industry has alreadyredesigned menus to comply with thenutrient content and health claimsregulations. This rulemaking provides 9months for menus to come intocompliance with the claimsrequirements. FDA assumes thatapproximately 45 percent of restaurantswill normally alter their menus duringthis compliance period; thoserestaurants can incorporate therequirements of this regulation intotheir normally scheduled menurevisions and, thus, will incur noregulatory costs associated with menuchanges.

According to the National RestaurantAssociation, there are approximately262,000 commercial establishments and36,000 institutions with a combinedtotal of approximately 460,000 printedmenus. Based on a review of menusentered in the National RestaurantAssociation’s annual menu contest, theassociation estimated that 89 percent ofall printed menus include at least onenutrient content or health claim.Although FDA has not challenged this


number, it has no basis on which todetermine whether this number fairlyrepresents the situation in restaurants.Nonetheless, FDA is using the 89percent survey result as an upper-boundestimate of the likelihood of typicalmenus bearing claims. The associationalso indicated that at least 18 percent ofthe printed menus that it reviewedwould require more complex changes,such as the revision of an entire sectionor symbol program (e.g., programs usinga heart logo).

Based on the association’s estimatesand on the agency’s revised estimate ofthe number of menus that have alreadybeen changed to comply with thenutrient content and health claimsrequirements, FDA estimates thatapproximately 90,000 individual menus[460,000×(.89¥.18)×(1¥.45)×(1¥.50)]would require simple changes valued at$500 per menu, or $45 million. Inaddition, approximately 23,000 menus[406,000×.18×(1¥.45)×(1¥.50)] wouldrequire more complex changes valued at$1,700 per menu, or $39 million. Thecost of establishing a reasonable basis tosupport a claim ranges between $10 and$175 per claim for each of the 113,000menus, or a total cost of between $1 and$20 million. FDA estimates that the totalcost of compliance for food serviceestablishments would be between $85million and $104 million if none of therestaurants currently making claims onmenus have a reasonable basis tosupport their claims. However, becausesignificant time has elapsed sincepublication of the nutrient content andhealth claims final rules, it is likely thatat least one-third of restaurants have areasonable basis for believing that theirfoods meet the nutrient requirements forthe claims that they are making.Therefore, the total costs of complianceare estimated to be between $57 millionand $69 million. However, if as many as90 percent of restaurants have areasonable basis to support claimscurrently being made, the regulationswill result in costs of between $8.5million and $10 million.

C. BenefitsRequiring that health claims and

nutrient content claims on menus beconsistent with FDA’s definitions andwith these types of claims made onpackaged foods will provide consumerswith consistent, reasonably basedsignals from restaurant menus withregard to health claims and nutrientcontent claims that they can use toachieve dietary goals. It is possible thatinformation that is now on menus thatcomplies with FDA’s requirements andthat would aid consumers in meetingdietary goals may be removed if a

restaurateur believes that the burden ofproof to support a claim is too costly.However, FDA believes that in manycircumstances this will not be the case,because the minimum amount of effortthat a restaurant would have to gothrough to validate a claim is not overlyburdensome.

D. Regulatory Flexibility

FDA has examined the economicimplications of the final rule as requiredby the Regulatory Flexibility Act(5 U.S.C. 601–612).

In this final rule FDA defines smallcommercial food service establishmentsconsistent with the Small BusinessAdministration’s (SBA’s) definitions (13CFR part 121) as firms with $5 millionor less in total annual revenue. Inaddition, small institutional foodservice establishments defined as thosewith less than $15 million in sales. FDAestimates that approximately 66 percentof all of the firms affected by this ruleare small by SBA’s definitions. Usingthat figure, FDA estimates that there areapproximately 173,000 commercial foodestablishments and 24,000 institutionalfood establishments that may be definedas small under these definitions. Usingthe same assumptions as in the previousanalysis, i.e., that 89 percent of allprinted menus contain at least onenutrient content or health claim, thenthere are approximately 175,000 smallestablishments with 270,000 menus thatcontain claims. Using the sameassumptions as above ((1) 50 percenthave already revised their menus, (2) 55percent of the remaining establishmentswould not normally revise their menuswithin the compliance period for thisrule, and (3) 18 percent of these latterestablishments will have to makecomplex changes), approximately 9,700small establishments will potentiallyhave one-time costs of $1,700 to makecomplex changes to each menu. Inaddition, approximately 38,000 smallestablishments will potentially haveone-time costs of $500 to make simplerevisions to each menu.

In addition, firms will have initial andrecurring costs of ensuring that healthclaims and nutrient content claims aresupported by a reasonable basis and arein conformance with FDA’s definitionsof terms. For each claim, a firm mustestablish via books, databases, or bysome reasonable means that the claimfalls within FDA’s definition. Thesupporting information must be kept aslong as the claim appears on the menuand must be presented to customers ondemand. Thus, as menu items andclaims change, the cost of establishing areasonable basis is incurred.

FDA has no data on how often firmschange claims or how often restaurantcustomers will ask to see the nutritioninformation for foods that bear theseclaims. However, as stated earlier, costestimates of establishing a reasonablebasis for a claim run between $10 and$175 per claim. Assuming one futureclaim change or addition per menu peryear and an average of 1.5 menus perfirm, costs to determine a reasonablebasis per firm will be between $15 and$260 per year. As stated earlier, forexisting claims, many firms alreadyhave or would be likely to haveestablished a reasonable basis for suchclaims, and this analysis will continueto presume that at least one third to asmuch as 90 percent of all firms woulddo so. Thus, average total cost per smallfirm may range from as high as $2,135to as low as $765 in the first year forthose who have menus with claims andbetween $15 and $260 per firm for eachsubsequent year. Firms that neither haveclaims nor would be expected to havethem on their menus in the future willnot incur cost.

It is important to note that this ruleprovides flexibility for restaurateurs inhow they determine the nutrient contentof a food and in how they communicatethis information to consumers, asdescribed above in the preamble. Thatis, for enforcement purposes,restaurateurs need only show that theyhave a reasonable basis for the claimand that the method of preparation doesnot violate the basis for the claim.Therefore, the costs of this regulation forsmall businesses have been minimized.Accordingly, under the RegulatoryFlexibility Act, 5 U.S.C. 605(b) theSecretary certifies that this final rulewill not have a significant economicimpact on a substantial number of smallentities.

E. Summary

FDA has examined the impact of thefinal rule in accordance with ExecutiveOrder 12866 and has determined that,while it is a significant rule, it is not aneconomically significant rule. The rulewill result in total costs to restaurants ofbetween $8.5 million and $69 million,depending on the number of restaurantsthat can provide a reasonable basis tosupport the claims currently in use.

FDA has also examined the impact ofthe final rule on small entities inaccordance with the RegulatoryFlexibility Act and has determined thatit will not result in a significant burdenon a substantial number of smallentities.


V. Paperwork Reduction ActThis final rule contains information

collection requirements that are subjectto review by the Office of Managementand Budget (OMB) under the PaperworkReduction Act of 1995 (44 U.S.C. 3501–3520). The title, description, andrespondent description of the collectionof information are shown below with anestimate of the annual recordkeepingburden. Included in the estimate is thetime for reviewing instructions,gathering necessary information,maintaining records of that information,and making that information availableupon request.

Title: Food Labeling: Nutrient ContentClaims and Health Claims; RestaurantFoods.

Description: This regulation removesthe provisions that exempt restaurantmenus from the requirements for hownutrient content claims and healthclaims are to be made and fromtherequirements for the provision ofnutrition information with respect to thenutrients that are the basis of the claim,when claims are made. Once it becomeseffective, §§ 101.13(q)(5) and101.14(d)(2)(vii)(B) will require thatnutrient content claims and healthclaims appearing on menus complywith FDA’s regulations for nutrientcontent claims in § 101.13 and subpartD of part 101 of this chapter and forhealth claims in § 101.14 and subpart Eof part 101. Restaurants using nutrientcontent claims or health claims onmenus will be required by § 101.10 toprovide nutrition information for thefood that bears the claim. Information

on the nutrient that is the basis of theclaim may serve as the functionalequivalent of complete nutritioninformation as described in § 101.9.

Because of the flexibility provided forrestaurants in determining the nutrientcontent of a food (they need only havea reasonable basis that providesassurance that the food meets therequirements for the claim) and in howthis information may be communicatedto consumers, a wide range of optionsis available to restaurants in meeting theinformation collection requirementsimposed by this rule. For example, arestaurant may choose to run a fullnutrient profile analysis on a group ofitems listed under a heading of ‘‘lowfat’’ on its menu. alternatively, it maychood to offer an item purchases froma commercial manufacturer where theitem is appropriately labeled by themanufacturer as ‘‘low fat.’’ In such acase, the restaurant requirement for theprovision of nutrituin information withrespect to the nutrients that are the basisof the claim, when claims are made.Once it becomes effective,§ § 101.13(q)(5) and 101.14(d)(2)(vii)(B)will require that nutrient content claimsand health claims appearing on menuscomply with FDA’s regulations fornutrient content claims in § 101.13 andsubpart D of part 101 of this chapter andfor health claims in § 101.14 andsubpart E of part 101. Restaurants usingnutrient content claims or health claimson menus will be required by § 101.10to provide nutrition information for thefood that bears the claim. Informationon the nutrient that is the basis of the

claim may serve as the functionalequivalent of complete nutritioninformation as described in § 101.9.

Because of the flexibility provided forrestaurants in determining the nutrientcontent of a food (they need only havea reasonable basis that providesassurance that the food meets therequirements for the claim) and in howthis information may be communicatedto consumers, a wide range of optionsis available to restaurants in meeting theinformation collection requirementsimposed by this rule. For example, arestaurant may choose to run a fullnutrient profile analysis on a group ofitems listed under a heading of ‘‘lowfat’’ on its menu. Alternatively, it maychoose to offer an item purchased froma commercial manufacturer where theitem is appropriately labeled by themanufacturer as ‘‘low fat.’’ In such acase, the restaurant would not have tocollect any additional information. All arestaurant must do to satisfy thenutrition information requirement in§ 101.10 is provide information todemonstrate that the food meets therequirements for any nutrient contentclaim or health claim being made aboutthe food. The agency expects thatrestaurants will choose the leastburdensome option that complies with§ 101.10. Thus, FDA concludes that theinformation collection requirements inthis final rule will create a minimalburden for restaurants.

Description of Respondents:Businesses or other for profitorganizations.

ESTIMATED ANNUAL RECORDKEEPING BURDEN

21 CFR No. of rec-ordkeepers

Annual fre-quency of

record-keeping

Total annualrecords

Hours perrecord-keeping

Total hours

§§ 101.10, 101.13(q)(5), and 101.14 (d)(2)(vii)(B) and (d)(3) .................. 265,000 1.5 397,500 1 397,500

Note: There are no operation and maintenance costs or capital costs associated with this information collection.

Although the June 15, 1993, proposedrule provided a 60-day comment period,and this final rule incorporates thecomments received, FDA is providingan additional opportunity for publiccomment under the PaperworkReduction Act of 1995, which applies tothis final rule but which was enactedafter the expiration of the commentperiod for the June 15, 1993, proposal.FDA invites comments on: (1) Whetherthe proposed collection of informationis necessary for the proper performanceof the functions of the agency, includingwhether the information will havepractical utility; (2) the accuracy of the

agency’s estimate of the burden of theproposed collection of information; (3)ways to enhance the quality, utility, andclarity of the information to becollected; and (4) ways to minimize theburden of the collection of informationon those who are to respond, includingthrough the use of automated collectiontechniques or other forms of informationtechnology, when appropriate.Individuals and organizations maysubmit comments on the informationcollection requirements by October 1,1996. Comments should be directed tothe Dockets Management Branch(address above).

At the close of the 60-day commentperiod, FDA will review the commentsreceived, make revisions as necessary tothe information collection requirements,and submit the requirements to OMB forreview and approval. FDA will publisha notice in the Federal Register whenthe information collection requirementsare submitted to OMB, and anopportunity for public comment to OMBwill be provided at that time. Additionaltime will be allotted for public commentto OMB. Prior to the effective date ofthis final rule, FDA will publish a noticein the Federal Register of OMB’sdecision to approve, modify, or


disapprove the information collectionrequirements. An agency may notconduct or sponsor, and a person is notrequired to respond to, a collection ofinformation unless it displays acurrently valid OMB control number.

VI. ReferencesThe following references have been

placed on display in the DocketsManagement Branch (HFA–305), Foodand Drug Administration, 12420Parklawn Dr., rm. 1–23, Rockville, MD20857, and may be seen by interestedpersons between 9 a.m. and 4 p.m.,Monday through Friday.

1. Smith, M.A., communications regardinglabeling of restaurant foods that bear a claimor other nutrition information, memorandumto file, November 9, 1994.

2. Bush, L.M., communication regardingthe cost of establishing a reasonable basis fora claim, memorandum of telephoneconversation, September 14, 1994.

List of Subjects in 21 CFR Part 101Food labeling, Nutrition, Reporting

and recordkeeping requirements.Therefore, under the Federal Food,

Drug, and Cosmetic Act and underauthority delegated to the Commissionerof Food and Drugs, 21 CFR part 101 isamended as follows:

PART 101—FOOD LABELING


Authority: Secs. 4, 5, 6 of the FairPackaging and Labeling Act (15 U.S.C. 1453,1454, 1455); secs. 201, 301, 402, 403, 409,701 of the Federal Food, Drug, and CosmeticAct (21 U.S.C. 321, 331, 342, 343, 348, 371).


§ 101.10 Nutrition labeling of restaurantfoods.

Nutrition labeling in accordance with§ 101.9 shall be provided upon requestfor any restaurant food or meal forwhich a nutrient content claim (asdefined in § 101.13 or in subpart D ofthis part) or a health claim (as definedin § 101.14 and permitted by aregulation in subpart E of this part) ismade, except that information on thenutrient amounts that are the basis forthe claim (e.g., ‘‘low fat, this mealprovides less than 10 grams of fat’’) mayserve as the functional equivalent ofcomplete nutrition information asdescribed in § 101.9. Nutrient levelsmay be determined by nutrient databases, cookbooks, or analyses or byother reasonable bases that provideassurance that the food or meal meetsthe nutrient requirements for the claim.Presentation of nutrition labeling maybe in various forms, including those

provided in § 101.45 and otherreasonable means.

3. Section 101.13 is amended byrevising the introductory text ofparagraph (q)(5) to read as follows:

§ 101.13 Nutrient content claims—generalprinciples.

* * * * *(q) * * *(5) A nutrient content claim used on

food that is served in restaurants orother establishments in which food isserved for immediate humanconsumption or which is sold for sale oruse in such establishments shall complywith the requirements of this sectionand the appropriate definition insubpart D of this part, except that:* * * * *

4. Section 101.14 is amended byrevising paragraphs (d)(2)(vii)(B) and(d)(3), introductory text, and addingparagraph (d)(3)(i) to read as follows:

§ 101.14 Health claims; generalrequirements.

* * * * *(d) * * *(2) * * *(vii) * * *(B) Where the food that bears the

claim is sold in a restaurant or in otherestablishments in which food that isready for immediate humanconsumption is sold, the food can meetthe requirements of paragraphs (d)(2)(vi)or (d)(2)(vii) of this section if the firmthat sells the food has a reasonable basison which to believe that the food thatbears the claim meets the requirementsof paragraphs (d)(2)(vi) or (d)(2)(vii) ofthis section and provides that basisupon request.* * * * *

(3) Nutrition labeling shall beprovided in the label or labeling of anyfood for which a health claim is madein accordance with § 101.9; forrestaurant foods, in accordance with§ 101.10; or for dietary supplements ofvitamins or minerals, in accordancewith § 101.36. The requirements of thisparagraph are effective as of May 8,1993, except:

(i) For menus, for which therequirements of paragraph (d)(3) of thissection will be effective May 2, 1997.* * * * *

Dated: July 25, 1996.David A. Kessler,Commissioner of Food and Drugs.

Donna E. Shalala,Secretary of Health and Human Services.[FR Doc. 96–19645 Filed 7–30–96; 12:21 pm]BILLING CODE 4160–01–U

ARMS CONTROL AND DISARMAMENTAGENCY

22 CFR Part 602

Freedom of Information Policy andProcedures

AGENCY: Arms Control and DisarmamentAgency.ACTION: Final rule.

SUMMARY: The United States ArmsControl and Disarmament Agency(ACDA) is revising and restating in theirentirety its rules that govern theavailability and release of information.Clarifying these rules will help thepublic to interact better with ACDA andis part of ACDA’s effort to update andstreamline its regulations.EFFECTIVE DATE: August 2, 1996.FOR FURTHER INFORMATION CONTACT:Frederick Smith, Jr., United States ArmsControl and Disarmament Agency,Room 5635, 320 21st Street, N.W.,Washington, DC 20451, telephone (202)647–3596.SUPPLEMENTARY INFORMATION: On May30, 1996, ACDA published a notice ofproposed rulemaking (61 FR 27031–27036) with a 39-day comment period.No comments were received during thecomment period. Accordingly, the rulesare adopted as proposed.

List of Subjects in 22 CFR Part 602Freedom of Information Act.Chapter VI of Title 22 of the Code of

Federal Regulations is amended byrevising part 602 to read as follows:

PART 602—FREEDOM OFINFORMATION POLICY ANDPROCEDURES

Authority: 5 U.S.C. 552; 22 U.S.C. 2581;and 31 U.S.C. 9701.

Subpart A—Basic Policy

Sec.602.1 Scope of part.602.2 Definitions.602.3 General policy.

Subpart B—Procedure for RequestingRecords

602.10 Requests for records.602.11 Requests in person.602.12 Availability of records at the ACDA

Office of Public Affairs.602.13 Copies of records.602.14 Records of other agencies,

governments and internationalorganizations.

602.15 Overseas requests.602.16 Responses and time limits on

requests.602.17 Time extensions.602.18 Inability to comply with requests.602.19 Predisclosure notification for

confidential commercial information.


Subpart C—Fees602.20 Fees for records search, review,

copying, certification, and relatedservices.

602.21 Waiver or reduction of fees.602.22 [Reserved]602.23 GPO and free publications.602.24 Method of payment.

Subpart D—Denials of Records602.30 Denials.602.31 Exemptions.

Subpart E—Review of Denials of Records602.40 Procedure for appealing initial

determinations to withhold records.602.41 Decision on appeal.

Subpart F—Annual Report to the Congress

602.50 Requirements for annual report.Authority: U.S.C. 552; 22 U.S.C. 2581; and

31 U.S.C. 9701.

Subpart A—Basic Policy

§ 602.1 Scope of part.This part 602 establishes the policies,

responsibilities and procedures forrelease to members of the public ofrecords which are under the jurisdictionof the U.S. Arms Control andDisarmament Agency.

§ 602.2 Definitions.As used throughout this part, the

following terms have the meanings setforth in this section:

(a) The term Agency and the acronymACDA stand for the U.S. Arms Controland Disarmament Agency.

(b) The term records includes allbooks, papers, maps, photographs, orother documentary materials, regardlessof physical form or characteristics, madeor received by the Agency in pursuanceof Federal law or in connection with thetransaction of public business andpreserved or appropriate forpreservation by the Agency or itslegitimate successor as evidence of theorganization, functions, policies,decisions, procedures, operations, orother activities of the Government orbecause of the informational value ofdata contained therein. Library ormuseum material made or acquiredsolely for reference or exhibitionpurposes is not included within thedefinition of the term ‘‘records.’’

(c) Deputy Director means the DeputyDirector of the Agency.

(d) The acronym FOIA stands for theFreedom of Information Act, asamended (5 U.S.C. 552).

§ 602.3 General policy.(a) In accordance with section 2 of the

Arms Control and Disarmament Act, asamended (22 U.S.C. 2551), it is thepolicy of ACDA to carry out as one ofits primary functions the disseminationand coordination of public information

concerning arms control,nonproliferation, and disarmament.

(b) In compliance with the FOIA,ACDA will make available upon requestby members of the public to the fullestextent practicable all Agency recordsunder its jurisdiction, as described inthe FOIA, except to the extent that theymay be exempt from disclosure underthe FOIA and § 602.31

Subpart B—Procedure for RequestingRecords

§ 602.10 Requests for records.(a) A written request for records

should be addressed to: FOIA Officer,U.S. Arms Control and DisarmamentAgency, 320 21st Street, NW.,Washington, DC 20451. To facilitateprocessing, the letter of request andenvelope should be conspicuouslymarked ‘‘FOIA request.’’

(b) The request should identify thedesired record or reasonably describe it.The identification should be as specificas possible so that a record can be foundreadily. Blanket requests or requests for‘‘the entire file of’’ or ‘‘all mattersrelating to’’ a specified subject will notbe accepted. The Agency will make anyreasonable effort to assist the requesterin sharpening the request to eliminateextraneous and unwanted materials andto keep search and copying fees to aminimum.

(c) If a fee is chargeable under subpartC of this part for search or duplicationcosts incurred in connection with arequest for an Agency record, therequest should include the anticipatedfee or should ask for a determination ofsuch fee. Any chargeable fee must bepaid in full prior to issuance ofrequested materials. The method ofpayment is described in § 602.24.

§ 602.11 Requests in person.A member of the public may request

an Agency record by making anappointment to apply in person betweenthe hours of 8:30 a.m. and 4 p.m. at theACDA Office of Public Affairs, 320 21stStreet, NW., Washington, DC 20451.Form ACDA–21, Public InformationService Request, is available at theACDA Office of Public Affairs for theconvenience of members of the publicin requesting Agency records.

§ 602.12 Availability of records at theACDA Office of Public Affairs.

(a) A current index identifying allavailable records is kept on file at theACDA Office of Public Affairs. Copies ofthis index may be obtained free uponrequest.

(b) In addition, the ACDA Office ofPublic Affairs will maintain or haveavailable, unless authorized to bewithheld, certain types of unclassified

records, including but not necessarilylimited to the following:

(1) A copy of the ACDA Manual andother Agency regulations, including acopy of title 22 of the Code of FederalRegulations (CFR) and any other title ofthe CFR in which Agency regulationshave been published;

(2) Copies of arms control anddisarmament treaties or agreements inforce;

(3) Research contracts between theAgency and universities or other non-Government organizations; and

(4) Reimbursable agreements withother Government agencies.

(c) Copies of records available to thepublic may be inspected by a requesterin the ACDA Office of Public Affairsduring the business hours stated in§ 602.11. Copies of records madeavailable for inspection may not beremoved by any requester from theACDA Office of Public Affairs.

§ 602.13 Copies of records.(a) The Agency will provide copies of

requested records of the same type andquality that it would provide topersonnel of another U.S. Governmentagency in the course of official business.It will not accept requests for specialtypes of copying processes or for specialstandards of quality of reproduction.

(b) Copies of records requested will bereproduced as promptly as possible andmailed to the requester. Chargeable feeswill be determined according to theschedule set forth in subpart C of thispart. The FOIA Officer is authorized tolimit copies of each requested record toten or fewer when there exists anextraordinary demand for the number ofavailable copies or when requirementsplace excessive demands on theAgency’s copying facilities.

§ 602.14 Records of other agencies,governments and internationalorganizations.

(a) Requests for records that wereoriginated by or are primarily theconcern of another U.S. Governmentdepartment or agency shall beforwarded to the particular departmentor agency involved, and the requesternotified in writing.

(b) Requests for records that havebeen furnished to the Agency by foreigngovernments or by internationalorganizations will not normally bereleased unless the organization orgovernment concerned has indicatedthat the particular information should ormay be made public. Whereinternational organizations or foreigngovernments concerned have not madesuch a determination, the requester willbe so advised, and if possible, furnished


the address to which the request may besent.

§ 602.15 Overseas requests.Pursuant to the general policy

outlined in § 602.3, ACDA has madearrangements to provide the UnitedStates Information Agency (USIA) withmaterial for dissemination abroad, suchas information on official U.S. positionson arms control and disarmamentpolicy. Requests originating in an areaserved by a USIA office which arereceived at Agency headquarters, will bereferred to USIA when appropriate fordirect response to the requester.

§ 602.16 Responses and time limits onrequests.

(a) The FOIA requires an initialdetermination on a request for anAgency record to be made within tenworking days after receipt of therequest.

(b) If it is determined that therequested record (or portions thereof)will be made available, the requestedmaterial will be forwarded promptlyafter the initial determination, providedany applicable fee has been paid in full.

(c) If prior to making an initialdetermination it is anticipated that thecosts chargeable for a request willamount to more than $25.00 or morethan the amount of the paymentaccompanying the request, whichever islarger, the requester shall be promptlynotified of the total amount of theanticipated fee or such portion thereofas can readily be estimated. In theseinstances, an advance deposit in theestimated amount of the search, review,and copying costs may be required. Therequest for an advance deposit shallextend an offer to the requester toconsult with Agency personnel in orderto reformulate the request in a mannerthat will reduce the fee, yet still meetthe needs of the requester.

(d) In instances where the Agency hasrequested an advance deposit, the dateof receipt of the deposit will beconsidered as the request date whichbegins the period of response by theAgency.

(e) Receipt of a request for Agencyrecords will be determined by the timeand date the request is received.

(f) Where an obvious delay in receiptof a request has occurred, such as incases where the requester has failed toaddress the request properly, or wherea delay has been caused in the mails,the Agency will dispatch to therequester an acknowledgment of thereceipt of the request.

§ 602.17 Time extensions.(a) In unusual circumstances, the time

limit for an initial or final determination

may be extended, but not to exceed atotal of ten working days in theaggregate in the processing of anyspecific request for an Agency record.

(b) ‘‘Unusual circumstances’’ means,but only to the extent reasonablynecessary to the proper processing ofthe particular case:

(1) The need to search for and collectthe requested records from otherestablishments that are physicallyseparate from ACDA headquarters;

(2) The need to search for, collect, andappropriately examine a voluminousamount of separate and distinct recordswhich are demanded in a single request;or

(3) The need for consultation, whichshall be conducted with all practicablespeed, with another agency having asubstantial interest in the determinationof the request.

§ 602.18 Inability to comply with requests.(a) When a request cannot be fulfilled,

the requester will be so informed withreasons, and any fees returned afterdeduction of applicable search costs.Such reasons may include, but are notlimited to the following:

(1) Insufficient or vague identifyinginformation which makes identificationor location of the record impossible;

(2) No such record in existence;(3) Record available for purchase from

the Government Printing Office orelsewhere; or

(4) Records destroyed pursuant to theRecords Disposal Act.

(b) Inability to comply with requestsshall be processed the same as denialsof records, i.e., notification to therequester shall be in writing, shall setforth the reasons therefor, shall besigned by the name and title of the FOIAOfficer, and shall include anexplanation of the requester’s right toappeal, including the address to whichan appeal may be directed.

§ 602.19 Predisclosure notification forconfidential commercial information

(a) When notification is required. If arequest under the FOIA seeks a recordthat contains information submitted bya person or entity outside the Federalgovernment that arguably is exemptfrom disclosure under exemption 4 ofthe FOIA because disclosure couldreasonably be expected to causesubstantial competitive harm, theAgency shall notify the submitter thatsuch a request has been made whenever:

(1) The submitter has made a goodfaith designation of information, lessthan ten years old, as confidentialcommercial or financial information, or

(2) The Agency has reason to believethat disclosure of the information could

reasonably be expected to causesubstantial competitive harm.

(b) Notification to submitter. Thenotice to the submitter shall eitherdescribe the exact nature of the businessinformation requested or provide copiesof the records or portions of recordscontaining the information. The noticeshall afford the submitter a reasonableperiod of time, based on the amountand/or complexity of the information,within which to object to disclosure.

(c) Objection by submitter. Anyobjection by a submitter to disclosuremust be made in writing and sent to:FOIA Officer, U.S. Arms Control andDisarmament Agency, 320 21st Street,NW., Washington, DC 20451. It shouldidentify the portion(s) of theinformation to which disclosure isobjected, and should include a detailedstatement of all claimed grounds forwithholding any of the informationunder the FOIA and, in the case ofexemption 4, an explanation of why theinformation constitutes a trade secret orcommercial or financial informationthat is privileged and confidential,including a specification of any claim ofcompetitive or other business harm thatwould result from disclosure.

(d) Notification to requester. TheAgency shall notify the requester inwriting when any notification to asubmitter is made pursuant to paragraph(a) of this section.

(e) When notification is not required.Notification to a submitter is notrequired if:

(1) The Agency determines that theinformation requested should not bedisclosed;

(2) Disclosure is required by statute(other than FOIA) or by regulation; or

(3) The information has previouslybeen lawfully published or officiallymade available to the public.

(f) Notice of intent to disclose. If theAgency determines that despite theobjection of the submitter the requestedinformation should be disclosed, inwhole or in part, it shall notify both therequester and the submitter of thedecision and shall provide to thesubmitter in writing:

(1) A brief explanation of why thesubmitter’s objections were notsustained;

(2) A description of the information tobe disclosed; and

(3) A specified disclosure date thatprovides a reasonable period of timebetween receipt of the notice and thedisclosure date.

(g) Notice of lawsuit. (1) Whenever arequester brings legal action to compeldisclosure of information covered byparagraph (a) of this section, the Agency


shall promptly notify the submitter inwriting.

(2) Whenever a submitter brings legalaction to prevent disclosure ofinformation covered by paragraph (a) ofthis section, the Agency shall promptlynotify the requester in writing.

Subpart C—Fees

§ 620.20 Fees for records search, review,copying, certification, and related services.

The fees for search, review, andcopying services for Agency recordsunder the FOIA or the Privacy Act areas follows:

(a) When documents are requested forcommercial use, requesters will beassessed the full direct costs forsearching for, reviewing for release, andcopying the records sought. A‘‘commercial use’’ request refers to arequest from or on behalf of one whoseeks information for a use or purposethat furthers the commercial, trade, orprofit interests of the requester or theperson on whose behalf the request ismade.

(b) Requesters from educational andnoncommercial scientific institutionswill be assessed only copying costs.

(c) Requesters who are representativesof the news media (persons activelygathering news for an entity that isorganized and operated to publish orbroadcast news to the public) will beassessed only copying costs.

(d) All other requesters will beassessed fees which recover the full andreasonable direct cost of searching for,reviewing for release, and copyingrecords that are responsive to therequest.

(e) Requesters from educational andnoncommercial scientific institutions,representatives of the news media, andall other noncommercial users, will notbe assessed for the first 100 pages ofcopying or the first two hours of searchtime. Commercial use requesters willnot be entitled to these free services.

(f) The search and review hourly feeswill be based upon employee gradelevels in order to recoup the full,allowable direct costs attributable totheir performance of these functions.

(g) The fee for paper copyreproduction will be $.20 per page.

(h) The fee for duplication ofcomputer tape or printout reproductionor other reproduction (e.g., microfiche)will be the actual, cost, includingoperator time.

(i) If the cost of collecting any feewould be equal to or greater than the feeitself, it will not be assessed.

(j) A fee may be charged for searchesthat are not productive and for searchesfor records or parts of records that

subsequently are determined to beexempt from disclosure.

(k) Interest charges may be assessedon any unpaid bill starting on the 31stday following the day on which thebilling was sent, at the rate prescribedin 31 U.S.C. 3717 and will accrue fromthe date of billing. The Debt CollectionAct, including disclosure to consumerreporting agencies and the use ofcollection agencies, will be utilized toencourage payment where appropriate.

(l) If search charges are likely toexceed $25.00, the requester will benotified of the estimated fees unless therequester’s willingness to pay whateverfee is assessed has been provided inadvance.

(m) An advance payment (before workis commenced or continued on arequest) may be required if the chargesare likely to exceed $250.00. Requesterswho have previously failed to pay a feein a timely fashion (i.e., within 30 daysof the date of billing) may be requiredto pay this amount plus any applicableinterest (or demonstrate that the fee hasbeen paid) and them make an advancepayment of the full amount of theestimated fee before the new or pendingrequest is processed.

§ 602.21 Waiver or reduction of fees.Documents shall be furnished without

any charge or at a charge reduced belowthe fees set forth in § 602.20 ifdisclosure of the information is in thepublic interest because it is likely tocontribute significantly to publicunderstanding of the operations oractivities of the government and is notprimarily in the commercial interest ofthe requester. The following six factorswill be employed in determining whensuch fees shall be waived or reduced:

(a) The subject of the request:Whether the subject of the requestedrecords concerns ‘‘the operations oractivities of the government;’’

(b) The informative value of theinformation to be disclosed: Whetherthe disclosure is ‘‘likely to contribute’’to an understanding of governmentoperations or activities;

(c) The contribution to anunderstanding of the subject by thegeneral public likely to result fromdisclosure: Whether disclosure of theinformation will contribute to the‘‘public understanding;’’

(d) The significance of thecontribution to public understanding:Whether the disclosure is likely tocontribute ‘‘significantly’’ to publicunderstanding of government operationsor activities;

(e) The existence and magnitude of acommercial interest: Whether therequester has a commercial interest that

would be furthered by the requesteddisclosure; and, if so

(f) The primary interest in disclosure:Whether the magnitude of the identifiedcommercial interest of the requester issufficiently large, in comparison withthe public interest in disclosure, thatdisclosure is ‘‘primarily in thecommercial interest of the requester.’’

§ 602.22 [Reserved]

§ 602.23 GPO and free publications.

(a) The index of records available inthe Agency’s Office of Public Affairswill list the sales offices of recordspublished by the Government PrintingOffice (GPO). The Agency will refereach requester to the appropriate salesoffice and refund any fee paymentsaccompanying the request. Publishedrecords out of print at the GPO may becopied by the Agency for the requesterat the requester’s expense in accordancewith the fee schedule established forcopying service. In some instances theAgency may have extra copies of out ofprint GPO records. These extra copieswill be provided to requesters at theprinted GPO price.

(b) The Agency makes somepublications or records available to thepublic without charge. Theseregulations neither change that practicenor require payment of a fee by arequester unless the original stock hasbeen exhausted any copying services arenecessary to satisfy a request.

§ 602.24 Method of payment.

(a) Payment may be in the form ofcash, a personal check or bank draftdrawn on a bank in the United States,or a postal money order. Remittancesshall be made payable to the Treasuryof the United States and mailed ordelivered to the FOIA Officer, U.S.Arms Control and Disarmament Agency,320 21st Street, NW., Washington, DC20451. Cash should not be sent by mail.

(b) A receipt for fees paid will begiven upon request.

Subpart D—Denials of Records

§ 602.30 Denials.

(a) Requests for inspection or copiesof records may be denied where theinformation or record is exempt fromdisclosure for reasons stated in § 602.31.

(b) Denials shall be in writing, shallset forth the reasons therefor, shall besigned by the FOIA Officer and shallinclude an explanation of therequester’s right to appeal, including theaddress to which an appeal may bedirected.


§ 602.31 Exemptions.The requirements of this part to make

Agency records available do not applyto matters that are:

(a) Specifically authorized undercriteria established by an ExecutiveOrder to be kept secret in the interest ofnational defense or foreign policy andare in fact properly classified pursuantto such Executive Order;

(b) Related solely to the internalpersonnel rules and practices of theAgency;

(c) Specifically exempted fromdisclosure by statute;

(d) Trade secrets and commercial orfinancial information obtained from aperson and privileged or confidential;

(e) Inter-agency or intra-agencymemoranda or letters that would not beavailable by law to a private party inlitigation with the Agency;

(f) Personnel and medical files andsimilar files the disclosure of whichwould constitute a clearly unwarrantedinvasion of personal privacy;

(g) Records or information compiledfor law enforcement purposes, but onlyto the extent that the production of suchlaw enforcement records or information.

(1) Could reasonably be expected tointerfere with enforcement proceedings;

(2) Would deprive a person of a rightto a fair trial or impartial adjudication;

(3) Could reasonably be expected toconstitute an unwarranted invasion ofpersonal privacy;

(4) Could reasonably be expected todisclose the identity of a confidentialsource, including a State, local orforeign agency or authority or anyprivate institution that furnishedinformation on a confidential basis, and,in the case of a record or informationcompiled by a criminal law enforcementauthority in the course of a criminalinvestigation, or by an agencyconducting a lawful national securityintelligence investigation, informationfurnished by a confidential source;

(5) Would disclose techniques andprocedures for law enforcementinvestigations or prosecutions, or woulddisclose guidelines for law enforcementinvestigations or prosecutions if suchdisclosure could reasonably be expectedto risk circumvention of the law; or

(6) Could reasonably be expected toendanger the life or physical safety ofany individual.

(h) Contained in or related toexamination, operating or conditionreports prepared by, on behalf of, or forthe use of an agency responsible for theregulation or supervision of financialinstitutions; or

(i) Geological and geophysicalinformation and data, including maps,concerning wells.

Subpart E—Review of Denials ofRecords

§ 602.40 Procedure for appealing initialdeterminations to withhold records.

(a) A member of the public who hasrequested an Agency record inaccordance with subpart B of this partand who has received an initialdetermination that does comply fullywith the request, may appeal such adetermination.

(b) The appeal shall:(1) Be in writing;(2) Be initiated within 30 working

days of the initial determinationdenying the request;

(3) Include a copy of the initialwritten request, a copy of the letter ofdenial, and the requester’s reasons forappealing the denial; and

(4) Be addressed to the DeputyDirector, U.S. Arms Control andDisarmament Agency, 320 21st Street,NW., Washington, DC 20451.

(c) The 30-day period for appealing adenial begins on he date of the denialletter. The 30-day limitation may bewaived by the Agency for good causeshown. The Agency will consider anyrequest closed if, within 30 workingdays after a complete or partial denial,the requester fails to appeal the denial.

§ 602.41 Decision on appeal.

(a) Review and final determination onan appeal shall be made by the DeputyDirector.

(b) [Reserved](c) Review of an appeal shall be made

on the submitted record. No personalappearance, oral argument, or hearingshall be permitted.

(d) The final determination on anappeal from a denial shall be made bythe Deputy Director within 20 workingdays of receipt of the appeal by theAgency.

(e) If the final determination is torelease the withheld material, therequester will be notified immediatelyand the material will be forwardedpromptly in accordance with theprocedure described in § 602.16 fornotifications of initial determinations.

(f) If the final determination is tocontinue to withhold material in wholeor in part, the requester will be notifiedimmediately of the determination, thereasons therefore, and the right tojudicial review.

(g) All decisions will be indexed andavailable for inspection and copying inthe same manner as other Agency finalorders and opinions, if any, under 5U.S.C. 552(a)(2).

Subpart F—Annual report to theCongress

§ 602.50 Requirements for annual report.

(a) On or before March 1 of eachcalendar year, ACDA shall submit areport covering the preceding calendaryear to the Speaker of the House ofRepresentatives and the President of theSenate for referral to the appropriatecommittees of the Congress. The reportshall include the following information:

(1) The number of determinationsmade by ACDA not to comply withrequests for records made to the Agencyunder this part and the reasons for eachsuch determination;

(2) The number of appeals made bypersons under subpart E of this part, theresult of such appeals, and the reasonfor the action upon each appeal thatresults in a denial of information;

(3) The names and titles or positionsof each person responsible for the denialof records requested under this part, andthe number of instances of participationfor each;

(4) The results of each proceedingconducted pursuant to 5 U.S.C.552(a)(4)(F), including a report of thedisciplinary action taken against theofficer or employee who was primarilyresponsible for improperly withholdingrecords or an explanation of whydisciplinary action was not taken;

(5) A copy of this part 602 and anyother rule or regulation made by ACDAregarding 5 U.S.C. 552;

(6) A copy of the fee schedule and thetotal amount of fees collected by ACDAfor making records available under thispart; and

(7) such other information asindicates efforts to administer fully thispart.

(b) The FOIA Officer will beresponsible for preparing the report forreview and submission to the Congress.

Dated: July 15, 1996.Mary Elizabeth Hoinkes,General Counsel.[FR Doc. 96–18884 Filed 8–1–96; 8:45 am]BILLING CODE 6820–32–M


ENVIRONMENTAL PROTECTIONAGENCY

40 CFR Part 180

[PP 5E4517/R2270; FRL–5391–4]

RIN 2070–AB78

Phosphinothricin Acetyltransferase(PAT) and the Genetic MaterialNecessary for Its Production (PlasmidVector pZ01502) in Corn; Exemptionfrom Requirement of a Tolerance

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Final rule.

SUMMARY: This rule establishes anexemption from the requirement of atolerance for residues of the plantpesticide inert ingredientphosphinothricin acetyltransferase andthe genetic material necessary for itsproduction (plasmid vector pZ01502) incorn. A request for an exemption fromthe requirement of a tolerance wassubmitted by Northrup King Company(NK). This regulation eliminates theneed to establish a maximumpermissible level for residues of thisplant pesticide inert ingredient in allraw agricultural commodities of fieldcorn, sweet corn, and popcorn.EFFECTIVE DATE: Effective on August 2,1996.ADDRESSES: Written objections andhearing requests, identified by thedocket number [PP 5E4517/R2270] maybe submitted to: Hearing Clerk (1900),Environmental Protection Agency, Rm.M3708, 401 M St., SW., Washington,DC. 20460. A copy of any objections andhearing requests filed with the HearingClerk should be identified by the docketnumber and submitted to: PublicResponse and Program ResourcesBranch, Field Operations Division(7506C), Office of Pesticide Programs,Environmental Protection Agency, 401M St. SW., Washington, Dc 20460. Inperson, bring copy of objections andhearing requests to: Rm. 1132, CM #2,1921 Jefferson Davis Highway,Arlington, Va. 22202. Feesaccompanying objections shall belabeled ‘‘tolerance Petition Fees’’ andforwarded to: EPA HeadquartersAccounting Operations Branch, OPP(tolerance Fees) P.O. Box 360277M,Pittsburgh, PA 15251.

An electronic copy of objections andhearing requests filed with the HearingClerk may be submiited to OPP bysending electronic mail to: [email protected].

Copies of electronic objections andhearing requests must be submitted asan ASCII file avoiding the use of special

characters and any form of encryption.Copies of electronic objections andhearing requests be accepted on disks inWordPerfect 5.1 file format or ASCII fileformat. All copies of electronicobjections and hearing requests must beidentified by the docket number [PP5E4517/R2270]. No ConfidentialBusiness Information (CBI) should besubmitted through e-mail. Copieselectronic objections and hearingrequests on this rule may be filed onlineat many Federal Depository Libraries.Additional information on electronicsubmissions can be found below in thisdocument.

FOR FURTHER INFORMATION CONTACT: Bymail: Michael L. Mendelsohn,Biopesticides and Pollution PreventionDivision (7501W), Office of PesticidePrograms, U. S. EnvironmentalProtection Agency, 401 M St., SW.,Washington, DC 20460. Office locationand telephone number: 5th Floor CS,2800 Crystal Drive, Arlington, VA22202, (Telephone No. 703–308–8715);e-mail:[email protected] INFORMATION: EPAissued a notice, published in theFederal Register of October 25, 1995 (60FR 54689)(FRL–4982–4), whichannounced that Northrup KingCompany, 7500 Olson Memorial Hwy.,Golden valley, MN 55427, hadsubmitted a pesticide petition (PP)5E4517 to EPA requesting that theAdministrator, pursuant to section408(d) of the Federal Food, Drug, andCosmetic Act (FFDCA), 21 U.S.C.346a(d), establish an exemption fromthe requirement of a tolerance for theplant pesticide inert ingredientphosphinothricin acetyltransferase(PAT) as produced in corn by the PATgene and its controlling sequences asfound on plasmid vector pZ01502. EPAhas assigned the inert ingredient of thisproduct the name phosphinothricinacetyltransferase and the geneticmaterial necessary for its production(plasmid vector pZ01502) in corn.‘‘Genetic material necessary for itsproduction’’ means the genetic materialwhich comprise (1) genetic materialencoding the phosphinothricinacetyltransferase and (2) its regulatoryregions. ‘‘Regulatory regions’’ are thegenetic material that control theexpression of the genetic materialencoding the phosphinothricinacetyltransferase, such as promoters,terminators, and enhancers. There wereno adverse comments, or requests forreferral to an advisory committeereceived in response to the notice offiling of the pesticide petition 5E4517.

Toxicology Assessment

Data regarding the in vitrodigestibility of PAT as well asinformation on the similarity of the PATenzyme to other proteins were cited andsubmitted. These data support theprediction that the PAT protein wouldbe non-toxic to humans and have aminimal potential for allergenicity.Residue chemistry data were thereforenot required.

The Agency expects that proteinswith no significant amino acidhomology to known mammalian proteintoxins and which are readily inactivatedby heat or mild acidic conditions andreadily degraded in an in vitrodigestibility assay have little likelihoodfor displaying oral toxicity. The in vitrodigestibility studies indicate that thePAT enzyme would be rapidly degradedfollowing ingestion. Further, the PATenzyme was shown to have nosignificant amino acid homology toknown mammalian protein toxins.

Current scientific knowledge suggeststhat common food allergens tend to beresistant to degradation by heat, acid,and proteases, are glycosylated and arepresent at high concentrations in thefood. The in vitro digestibility studiesindicate the PAT protein is rapidlydegraded in the gastric environment andis also readily denatured by heat or lowpH. Thus, the potential for PAT to be afood allergen is minimal

The genetic material necessary for theproduction of PAT are the nucleic acids(DNA) which comprise (1) geneticmaterial encoding the PAT and (2) itsregulatory regions. ‘‘Regulatory regions’’are the genetic material that control theexpression of the genetic materialencoding PAT, such as promoters,terminators, and enhancers. DNA iscommon to all forms of plant andanimal life and the Agency knows of noinstance where these nucleic acids havebeen associated with toxic effectsrelated to their consumption. Theseubiquitous nucleic acids as they appearin the subject active ingredient havebeen adequately characterized.Therefore, no mammalian toxicity isanticipated from dietary exposure to thegenetic material necessary for theproduction of PAT in corn.

Conclusions

Based on the information considered,the Agency concludes thatestablishment of a tolerance is notnecessary to protect the public health.Therefore, the exemption from toleranceis established as set forth below.

Any person adversely affected by thisregulation may, within 30 days afterpublication of this document in the


Federal Register, file written objectionsto the regulation and may also requesta hearing on those objections.Objections and hearing requests must befiled with the Hearing Clerk, at theaddress given above (40 CFR 178.20). Acopy of the objections and/or hearingrequests filed with the Hearing Clerkshould be submitted to the OPP docketfor this rulemaking. The objectionssubmitted must specify the provisionsof the regulation deemed objectionableand the grounds for the objections (40CFR 178.25). Each objection must beaccompanied by the fee prescribed by40 CFR 180.33(i). If a hearing isrequested, the objections must include astatement of the factual issue(s) onwhich a hearing is requested, therequestor’s contentions on such issues,a summary of any evidence relied uponby the objector as well as the othermaterials required by 40 CFR 178.27. Arequest for a hearing will be granted ifthe Administrator determines that thematerial submitted shows the following:There is genuine and substantial issueof fact; there is reasonable possibilitythat available evidence identified by therequestor would, if established, resolveone or more of such issues in favor ofthe requestor, taking into accountuncontested claims or facts to thecontrary; and resolution of the factualissue(s) in the manner sought by therequestor would be adequate to justifythe action requested (40 CFR 178.32).

EPA has established a record for thisrulemaking under docket number [PP5E4517/R2271] (including anycomments and data submittedelectronically). A public version of thisrecord, including printed, paperversions of electronic comments, whichdoes not include any informationclaimed as CBI, is available forinspection from 8 a.m. to 4:30 p.m.,Monday through Friday, excluding legalholidays. The public record is located inRoom 1132 of the Public Response andProgram Resources Branch, FieldOperations Division (7506C), Office ofPesticide Programs, EnvironmentalProtection Agency, Crystal Mall #2,1921 Jefferson Davis Highway,Arlington, VA.

Electronic comments may be sentdirectly to EPA at:

[email protected].

Electronic comments must besubmitted as an ASCII file avoiding theuse of special characters and any formof encryption.

The official record for thisrulemaking, as well as the publicversion, as described above will be keptin paper form. Accordingly, EPA willtransfer any copies of objections and

hearing requests received electronicallyinto printed, paper form as they arereceived and will place the paper copiesin the official rulemaking record whichwill also include all commentssubmitted directly in writing. Theofficial rulemaking record is the paperrecord maintained at the address in‘‘ADDRESSES’’ at the beginning of thisdocument.

Under Executive Order 12866 (58 FR51735, October 4, 1993), this action isnot a ‘‘significant regulatory action’’and, since this action does not imposeany information collection requirementsas defined by the Paperwork ReductionAct, 44 U.S.C. 3501 et seq., it is notsubject to review by the Office ofManagement and Budget. In addition,this action does not impose anyenforceable duty or contain anyunfunded mandate as described in theUnfunded Mandates Reform Act of 1995(Pub. L. 104–4), or require priorconsultation with State officials asspecified by Executive Order 12875 (58FR 58093, October 28, 1993), or specialconsiderations as required by ExecutiveOrder 12898 (59 FR 7629, February 16,1994).

Pursuant to the requirements of theRegulatory Flexibility Act (5 U.S.C.601–612), the Administrator hasdetermined that regulations establishingnew tolerances or raising tolerancelevels or establishing exemptions fromtolerance requirements do not have asignificant economic impact on asubstantial number of small entities. Astatement containing the factual basisfor this certification was published inthe Federal Register of May 4, 1981 (46FR 24950).

Under 5 U.S.C. 801(a)(1)(A) of theAdministrative Procedure Act (APA) asamended by the Small BusinessRegulatory Enforcement Fairness Act of1996 (Title II of Pub. L. 104–121, 110Stat. 847), EPA submitted a reportcontaining this rule and other requiredinformation to the U.S. Senate, the U.S.House of Representatives and theComptroller General of the GeneralAccounting Office prior to publicationof the rule in today’s Federal Register.This rule is not a ‘‘major rule’’ asdefined by 5 U.S.C. 804(2) of the APAas amended.


Environmental protection,Administrative practice and procedure,Agricultural commodities, Pesticidesand pests, Reporting and recordkeepingrequirements.

Dated: July 30, 1996.

Daniel M. Barolo,

Director, Office of Pesticide Programs.

Therefore, 40 CFR part 180 isamended as follows:

PART 180—[AMENDED]


Authority: 21 U.S.C. 346a and 371.

2. In subpart D, by adding § 180.1175,to read as

§ 180.1175 Phosphinothricinacetyltransferase (PAT) and the geneticmaterial necessary for its production(plasmid vector pZ01502) in corn;exemption from the requirement of atolerance.

Phosphinothricin acetyltransferase(PAT) and the genetic materialnecessary for its production (plasmidvector pZ01502) in corn is exempt fromthe requirement of a tolerance whenused as a plant pesticide inertingredient in all raw agriculturalcommodities of field corn, sweet corn,and popcorn. ‘‘Genetic materialnecessary for its production’’ means thegenetic material which comprise geneticmaterial encoding the phosphinothricinacetyltransferase and its regulatoryregions. ‘‘Regulatory regions’’ are thegenetic material that control theexpression of the genetic materialencoding the phosphinothricinacetyltransferase, such as promoters,terminators, and enhancers.

[FR Doc. 96–19812 Filed 8–01–96; 8:45 am]BILLING CODE 6560–50–F

40 CFR Part 180

[PP 5E4516/R2269; FRL–5391–2]

RIN 2070–AB78

Plant Pesticide Inert Ingredient CP4Enolpyruvylshikimate-3-D and theGenetic Material Necessary for ItsProduction in All Plants


SUMMARY: This rule establishes anexemption from the requirement of atolerance for residues of the plantpesticide inert ingredient CP4Enolpyruvylshikimate-3-D (CP4 EPSPS)and the genetic material necessary forits production in all plants. A requestfor an exemption from the requirementof a tolerance was submitted byMonsanto Company (Monsanto). This


regulation eliminates the need toestablish a maximum permissible levelfor residues of these plant pesticideinert ingredients in all plants.EFFECTIVE DATE: Effective on August 2,1996.ADDRESSES: Written objections andhearing requests, identified by thedocument control number, [PP 5E4516/R2269], may be submitted to: HearingClerk (1900), Environmental ProtectionAgency, Rm. M3708, 401 M St., SW.,Washington, DC 20460. A copy of anyobjections and hearing requests filedwith the Hearing Clerk should beidentified by the document controlnumber and submitted to: PublicResponse and Program ResourcesBranch, Field Operations Division(7506C), Office of Pesticide Programs,Environmental Protection Agency, 401M St., SW., Washington, DC 20460. Inperson, bring copy of objections andhearing requests to Rm. 1132, CM #2,1921 Jefferson Davis Hwy., Arlington,VA 22202. Fees accompanyingobjections shall be labeled ‘‘TolerancePetition Fees’’ and forwarded: EPAHeadquarters Accounting OperationsBranch, OPP (Tolerance Fees), P.O. Box360277M, Pittsburgh, PA 15251.

An electronic copy of objections andhearing requests filed with the HearingClerk may be submitted to OPP bysending electronic mail (e-mail) to: [email protected]

Copies of electronic objections andhearing requests must be submitted asan ASCII file avoiding the use of specialcharacters and any form of encryption.Copies of electronic objections andhearing requests will also be acceptedon disks in WordPerfect 5.1 file formator ASCII file format. All copies ofelectronic objections and hearingrequests must be identified by thedocket number [PP 5E4516/R2269] . NoConfidential Business Information (CBI)should be submitted through e-mail.Copies of electronic objections andhearing requests on this rule may befiled online at many Federal DepositoryLibraries. Additional information onelectronic submissions can be foundbelow in this document.FOR FURTHER INFORMATION CONTACT: Bymail: Michael L. Mendelsohn,Biopesticides and Pollution PreventionDivision (7501W), Office of PesticidePrograms, U. S. EnvironmentalProtection Agency, 401 M St., SW.,Washington, DC 20460. Office locationand telephone number: 5th Floor CS,2800 Crystal Drive, Arlington, VA22202, Telephone No. 703–308–8715; e-mail:[email protected].

SUPPLEMENTARY INFORMATION: EPAissued a notice, published in theFederal Register of October 25, 1995 (60FR 54689)(FRL–4984–4), whichannounced that Monsanto Company,700 Chesterfield Parkway North, St.Louis, MO 63198, had submitted apesticide petition (PP) 5E4516 to EPArequesting that the Administrator,pursuant to section 408(d) of the FederalFood, Drug, and Cosmetic Act (FFDCA),21 U.S.C. 346a(d), establish anexemption from the requirement of atolerance for the plant pesticide inertingredient CP4 EPSPS and the geneticmaterial necessary for the production ofthis protein in or on all raw agriculturalcommodities when used as a plantpesticide inert ingredient. EPA hasassigned these inert ingredients thename CP4 EPSPS and the geneticmaterial necessary for its production inplants. ‘‘Genetic material necessary forits production’’ means the geneticmaterial which comprise (1) geneticmaterial encoding the CP4 EPSPS and(2) its regulatory regions. ‘‘Regulatoryregions’’ are the genetic material thatcontrol the expression of the geneticmaterial encoding the CP4 EPSPS, suchas promoters, terminators, andenhancers.

There were no adverse comments, orrequests for referral to an advisorycommittee received in response to thenotice of filing of the pesticide petition5E4516.


Product Characterization

CP4 EPSPS protein produced in E.coli gave SDS-PAGE, western blot, N-terminal amino acid sequence andenzyme activity similar to the referencestandard. The E. coli preparation lackeddetectable glycosylation based on thestaining reaction compared totransferritin and horseradish peroxidasepositive controls.

CP4 EPSPS protein as expressed ineither E. coli or corn line 523–06–1 werecompared by SDS-PAGE, western blot,N-terminal amino acid sequence andspecific enzyme activity againstshikimate-3-phosphate and shown tohave essentially equivalentcharacteristics save the specific activitywhich was lower in the plantpreparation. The similarity of the CP4EPSPS expressed in corn line 523–06–1 and MON80100 were shown to yieldidentical banding patterns indicatingsimilar molecular weight andimmunoreactivity.

Western blot and enzymatic activityassays indicate that CP4 EPSPS isreadily degraded in less than 2 minutesby incubation in simulated gastric fluid.

In simulated intestinal fluid the enzymeactivity and immunoreactivity lastslonger being still detectable at 10minutes and undetectable by 270minutes.

CP4 EPSPS is an enzyme involved inaromatic amino acid synthesis. CP4EPSPS is not closely related in aminoacid homology to other described EPSPSenzymes. CP4 EPSPS is no more than51.1% similar and 26.0% identical toEPSPS in plants and 59.3% similar and41.1% identical to EPSPS in otherbacteria. The unique character of CP4EPSPS is its ability to function in thepresence of glyphosate which is acompetitive inhibitor with PEP for theactive site of other EPSPS enzymes.

ToxicologyIn an acute oral toxicity test of

bacterially-derived CP4 EPSPS protein,no test substance related deathsoccurred at a dose of 572 mg/kg.

The Agency expects that proteinswith no significant amino acidhomology to known mammalian proteintoxins and which are readily inactivatedby heat or mild acidic conditions andare readily degraded in an in vitrodigestibility assay would have littlelikelihood for displaying oral toxicity.

The data submitted and cited byMonsanto support the prediction thatthe CP4 EPSPS protein would be non-toxic to humans. When proteins aretoxic, they are known to act via acutemechanisms and at very low dose levels[Sjobald, Roy D., et al. ‘‘ToxicologicalConsiderations for Protein Componentsof Biological Pesticide Products,’’Regulatory Toxicology andPharmacology 15, 3-9 (1992)].Therefore, since no significant acuteeffects were observed, even at relativelyhigh dose levels, the CP4 EPSPS is notconsidered acutely or chronically toxic.Adequate information was submitted toshow that the test material derived frommicrobial cultures was biochemicallysimilar to the CP4 EPSPS as producedby the plant-pesticide in corn.Production of microbially producedprotein was chosen in order to obtainsufficient material for testing.

The genetic material necessary for theproduction of the CP4 EPSPS are thenucleic acids (DNA) which comprise (1)genetic material encoding the CP4EPSPS and (2) its regulatory regions.‘‘Regulatory regions’’ are the geneticmaterial that control the expression ofthe genetic material encoding CP4EPSPS, such as promoters, terminators,and enhancers. DNA is common to allforms of plant and animal life and theAgency knows of no instance wherethese nucleic acids have been associatedwith toxic effects related to their


consumption. These ubiquitous nucleicacids as they appear in the subjectactive ingredient have been adequatelycharacterized by the applicant.Therefore, no mammalian toxicity isanticipated from dietary exposure to thegenetic material necessary for theproduction of the CP4 EPSPS in anyplant.

ConclusionBased on the information considered,

the Agency concludes thatestablishment of a tolerance is notnecessary to protect the public health.Therefore, the exemption from toleranceis established as set forth below.

Any person adversely affected by thisregulation may, within 30 days afterpublication of this document in theFederal Register, file written objectionsto the regulation and may also requesta hearing on those objections.Objections and hearing requests must befiled with the Hearing Clerk, at theaddress given above (40 CFR 178.20). Acopy of the objections and/or hearingrequests filed with the Hearing Clerkshould be submitted to the OPP docketfor this rulemaking. The objectionssubmitted must specify the provisionsof the regulation deemed objectionableand the grounds for the objections (40CFR 178.25). Each objection must beaccompanied by the fee prescribed by40 CFR 180.33(i). If a hearing isrequested, the objections must include astatement of the factual issue(s) onwhich a hearing is requested, therequestor’s contentions on such issues,a summary of any evidence relied uponby the objector as well as the othermaterials required by 40 CFR 178.27. Arequest for a hearing will be granted ifthe Administrator determines that thematerial submitted shows the following:There is genuine and substantial issueof fact; there is reasonable possibilitythat available evidence identified by therequestor would, if established, resolveone or more of such issues in favor ofthe requestor, taking into accountuncontested claims or facts to thecontrary; and resolution of the factualissue(s) in the manner sought by therequestor would be adequate to justifythe action requested (40 CFR 178.32).

A record has been established for thisrulemaking under the docket number[PP 5E4516/R2269] (including anycomments and data submittedelectronically). A public version of thisrecord, including printed, paperversions of electronic comments, whichdoes not include any informationclaimed as CBI, is available forinspection from 8 a.m. to 4:30 p.m.,Monday through Friday, excluding legalholidays. The public record is located in

Room 1132 of the Public Response andProgram Resources Branch, FieldOperations Division (7506C), Office ofPesticide Programs, EnvironmentalProtection Agency, Crystal Mall #2,1921 Jefferson Davis Highway,Arlington, VA 22202.

Electronic comments can be sentdirectly to EPA at:

[email protected]


The official record for thisrulemaking, as well as the publicversion, as described above will be keptin paper form. Accordingly, EPA willtransfer any copies of objections andhearing requests received electronicallyinto printed, paper form as they arereceived and will place the paper copiesin the official rule-making record whichwill also include all commentssubmitted directly in writing. Theofficial rulemaking record is the paperrecord maintained at the address in‘‘ADDRESSES’’ at the beginning of thisdocument.

Under Executive Order 12866 (58 FR51735, October 4, 1993), this action isnot a ‘‘significant regulatory action’’and, since this action does not imposeany information collection requirementsas defined by the Paperwork ReductionAct, 44 U.S.C . 3501 et seq., it is notsubject to review by the Office ofManagement and Budget. In addition,this action does not impose anyenforceable duty or contain anyunfunded mandate as described in theUnfunded Mandates Reform Act of 1995(Pub. L. 104–4), or require priorconsultation with State officials asspecified by Executive Order 12875 (58FR 58093, October 28, 1993), or specialconsiderations as required by ExecutiveOrder 12898 (59 FR 7629, February 16,1994).

Pursuant to the requirements of theRegulatory Flexibility Act (Pub. L. 96–354, 94 Stat. 1164, 5 U.S.C. 601–612),the Administrator has determined thatregulations establishing new tolerancesor raising tolerance levels orestablishing exemptions from tolerancerequirements do not have a significanteconomic impact on a substantialnumber of small entities. A statementcontianing the factual basis for thiscertification was published in theFederal Register of May 4, 1981 (46 FR24950).

Under 5 U.S.C. 801(a)(1)(A) of theAdministrative Procedure Act (APA) asamended by the Small BusinessRegulatory Enforcement Fairness Act of1996 (Title II of Pub. L. 104–121, 110

Stat. 847), EPA submitted a reportcontaining this rule and other requiredinformation to the U.S. Senate, the U.S.House of Representatives and theComptroller General of the GeneralAccounting Office prior to publicationof the rule in today’s Federal Register.This rule is not a ‘‘major rule’’ asdefined by 5 U.S.C. 804(2) of the APAas amended.


Environmental protection,Administrative practice and procedure,Agricultural commodities, Pesticidesand pests, Reporting and recordkeepingrequirements.


Daniel M. Barolo,

Director, Office of Pesticide Programs.


Therefore, 40 CFR Part 180 isamended as follows:


Authority: 21 U.S.C. 346a and 371.2. In subpart D, by adding new

§ 180.1174, to read as follows:

§ 180.1174 CP4 Enolpyruvylshikimate-3-phosphate (CP4 EPSPS) and the geneticmaterial necessary for its production in allplants.

CP4 Enolpyruvylshikimate-3-phosphate (CP4 EPSPS) and the geneticmaterial necessary for its production inall plants are exempt from therequirement of a tolerance when used asplant pesticide inert ingredients in allraw agricultural commodities. ‘‘Geneticmaterial necessary for its production’’means the genetic material whichcomprise genetic material encoding theCP4 EPSPS and its regulatory regions.‘‘Regulatory regions’’ are the geneticmaterial that control the expression ofthe genetic material encoding the CP4EPSPS, such as promoters, terminators,and enhancers.


40 CFR Part 180

[PP 5F4473/R2270; FRL–5391–3]

RIN 2070–AB78

Bacillus Thuringiensis CryIA(b) Delta-Endotoxin and the Genetic MaterialNecessary for Its Production in AllPlants; Exemption from Requirementof a Tolerance

AGENCY: Environmental ProtectionAgency (EPA).


ACTION: Final rule.

SUMMARY: This rule establishes anexemption from the requirement of atolerance for residues of the plantpesticide active ingredients Bacillusthuringiensis CryIA(b) delta-endotoxinand the genetic material necessary forits production in all plants. A requestfor an exemption from the requirementof a tolerance was submitted byMonsanto Company. This regulationeliminates the need to establish amaximum permissible level for residuesof these plant pesticides in all plant rawagricultural commodities.EFFECTIVE DATE: Effective on August 2,1996.ADDRESSES: Written objections andhearing requests, identified by thedocket number [PP 5F4473/R2270] maybe submitted to: Hearing Clerk (1900),Environmental Protection Agency, Rm.M3708, 401 M St., SW., Washington,DC. 20460. A copy of any objections andhearing requests filed with the HearingClerk should be identified by the docketnumber and submitted to: PublicResponse and Program ResourcesBranch, Field Operations Division(7506C), Office of Pesticide Programs,Environmental Protection Agency, 401M St. SW., Washington, DC 20460. Inperson, bring copy of objections andhearing requests to: Rm. 1132, CM #2,1921 Jefferson Davis Highway,Arlington, VA. 22202. Feesaccompanying objections shall belabeled ‘‘Tolerance Petition Fees’’ andforwarded to: EPA HeadquartersAccounting Operations Branch, OPP(tolerance Fees) P.O. Box 360277M,Pittsburgh, PA 15251.

Comments and data may also besubmitted electronically by sendingelectronic mail (e-mail) to: [email protected]. Electroniccomments must be submitted as anASCII file avoiding the use of specialcharacters and any form of encryption.Comments and data will also beaccepted on disks in WordPerfect 5.1file format or ASCII file format. Allcomments and data in electronic formmust be identified by the docket number[PP 5F4473/R2270]. No ConfidentialBusiness Information (CBI) should besubmitted through e-mail. Electroniccomments on this proposed rule may befiled online at many Federal DepositoryLibraries. Additional information onelectronic submissions can be foundbelow in this document.FOR FURTHER INFORMATION CONTACT: Bymail: Michael L. Mendelsohn,Biopesticides and Pollution PreventionDivision (7501W), Office of PesticidePrograms, U. S. Environmental

Protection Agency, 401 M St., SW.,Washington, DC 20460. Office locationand telephone number: 5th Floor CS,2800 Crystal Drive, Arlington, VA22202, Telephone No. 703–308–8715),e-mail:[email protected] INFORMATION: Monsantohas genetically modified corn plants toproduce a truncated version of thepesticidal CryIA(b) delta-endotoxinprotein (derived from the soil microbeBacillus thuringiensis). EPA issued anotice, published in the FederalRegister of October 25, 1995 (60 FR54689)(FRL–4982–4), which announcedthat the Monsanto Company, 700Chesterfield Parkway North, St. Louis,MO 63198 had submitted a pesticidepetition (PP) 5F4473 to EPA requestingthat the Administrator, pursuant tosection 408(d) of the Federal Food,Drug, and Cosmetic Act (FFDCA), 21U.S.C. 346a(d), establish an exemptionfrom the requirement of a tolerance forthe Bacillus thuringiensis subsp.kurstaki Insect Control Protein(CryIA(b)) as produced in plant cells.EPA has described the activeingredients covered by this descriptionas Bacillus thuringiensis CryIA(b) delta-endotoxin and the genetic materialnecessary for its production in allplants. ‘‘Genetic material necessary forits production’’ means the geneticmaterial which comprise (1) geneticmaterial encoding the CryIA(b) delta-endotoxin and (2) its regulatory regions.‘‘Regulatory regions’’ are the geneticmaterial that control the expression ofthe genetic material encoding theCryIA(b) delta-endotoxin, such aspromoters, terminators, and enhancers.

There were no adverse comments, orrequests for referral to an advisorycommittee received in response to thenotice of filing of the pesticide petition5F4473.

Product Analysis

Data was presented which showedthat the truncated CryIA(b) toxin can beextracted from corn leaf tissue and thispurified material displays charactersand activities similar to that producedin E. coli which has been transformed toproduce CryIA(b). The similarities areshown for the tryptic core proteins inmolecular weight after SDS-PAGE,immunorecognition in Western blotsand ELISA, partial amino acid sequenceanalysis, lack of glycosylation andbioactivity against either European cornborer or corn earworm. This analysisjustifies the use of the microbiallyproduced toxin as an analogue for theplant produced protein in mammaliantoxicity testing.


ToxicityThe toxicology data provided are

sufficient to demonstrate that there areno foreseeable human health hazardslikely to arise from the use of Bacillusthuringiensis CryIA(b) delta-endotoxinand the genetic material necessary forits production in all plants.

The data submitted regardingpotential health effects includeinformation on the characterization ofthe expressed CryIA(b) delta-endotoxinin corn, the acute oral toxicity, and invitro digestibility of the delta-endotoxin.In an acute oral toxicity test ofbacterially-derived CryIA(b) protein, notest substance related deaths occurred ata dose of 4,000 mg/kg.

The Agency expects that proteinswith no significant amino acidhomology to known mammalian proteintoxins and which are readily inactivatedby heat or mild acidic conditions andare readily degraded in an in vitrodigestibility assay would have littlelikelihood for displaying oral toxicity,as demonstrated.

The data submitted by Monsantosupport the prediction that the CryIA(b)protein would be non-toxic to humans.When proteins are toxic, they are knownto act via acute mechanisms and at verylow dose levels [Sjobald, Roy D., et al.‘‘Toxicological Considerations forProtein Components of BiologicalPesticide Products,’’ RegulatoryToxicology and Pharmacology 15, 3-9(1992)]. Therefore, since no significantacute effects were observed, even atrelatively high dose levels, the CryIA(b)delta-endotoxin is not consideredacutely toxic. Adequate information wassubmitted to show that the test materialderived from microbial cultures werebiochemically and insecticidally similarto the delta-endotoxin as produced bythe plant-pesticide in corn. Productionof microbially produced CryIA(b) delta-endotoxin was chosen in order to obtainsufficient material for testing. Inaddition, the in vitro digestibilitystudies indicate the delta-endotoxinwould be rapidly degraded followingingestion.

The genetic material necessary for theproduction of the Bacillus thuringiensisCryIA(b) delta-endotoxin are the nucleicacids (DNA) which comprise (1) geneticmaterial encoding the CryIA(b) delta-endotoxin and (2) its regulatory regions.‘‘Regulatory regions’’ are the geneticmaterial that control the expression ofthe genetic material encoding theCryIA(b) delta-endotoxin, such aspromoters, terminators, and enhancers.DNA is common to all forms of plantand animal life and the Agency knows


of no instance where these nucleic acidshave been associated with toxic effectsrelated to their consumption. Theseubiquitous nucleic acids as they appearin the subject active ingredient havebeen adequately characterized by theapplicant. Therefore, no mammaliantoxicity is anticipated from dietaryexposure to the genetic materialnecessary for the production of theBacillus thuringiensis CryIA(b) delta-endotoxin in any plants.

AllergenicityCurrent scientific knowledge suggests

that common food allergens tend to beresistant to degradation by heat, acid,and proteases, are glycosylated andpresent at high concentrations in thefood. Monsanto has submitted datademonstrating that the CryIA(b) delta-endotoxin is rapidly degraded by gastricfluid in vitro and is non-glycosylated.

Studies submitted to EPA done inlaboratory animals also have notindicated any potential for allergicreactions to Bacillus thuringiensis or itscomponents, including the delta-endotoxin in the crystal protein. Recentin vitro studies also confirm that thedelta-endotoxin would be readilydigestible in vivo, unlike known foodallergens that tend to be resistant todegradation.

Despite decades of widespread use ofBacillus thuringiensis as a pesticide (ithas been registered since 1961), therehave been no confirmed reports ofimmediate or delayed allergic reactionsto the delta-endotoxin itself despitesignificant oral, dermal and inhalationexposure to the microbial product.Several reports under FIFRA section6(a)2 have been made for variousBacillus thuringiensis products claimingallergic reactions. However, the Agencydetermined these reactions were not dueto Bacillus thuringiensis itself or any ofthe cry toxins.

Residue Chemistry DataResidue chemistry data were not

required because of the lack ofmammalian toxicity of this activeingredient. In the acute mouse oraltoxicity study, the CryIA(b) delta-endotoxin was shown to have an LD50

greater than 4,000 mg/kg. When proteinsare toxic, they are known to act viaacute mechanisms and at very low doselevels [Sjobald, Roy D., et al.‘‘Toxicological Considerations forProtein Components of BiologicalPesticide Products,’’ RegulatoryToxicology and Pharmacology 15, 3-9(1992)]. Therefore, since no significantacute effects were observed, even atrelatively high dose levels, the CryIA(b)delta-endotoxin is not considered

acutely. This is similar to the Agencyposition regarding toxicity and therequirement of residue data for themicrobial Bacillus thuringiensisproducts from which this plantpesticide was derived. [See 40 CFR158.740(b)] For microbial products,further toxicity testing to verify theobserved effects and clarify the sourceof the effects (Tiers II and III) andresidue data are triggered by significantacute effects in studies such as themouse oral toxicity study.

The genetic material necessary for theproduction of the Bacillus thuringiensisCryIA(b) delta-endotoxin are the nucleicacids (DNA) which comprise: (1)Genetic material encoding the CryIA(b)delta-endotoxin and (2) its regulatoryregions. ‘‘Regulatory regions’’ are thegenetic material that control theexpression of the genetic materialencoding the CryIA(b) delta-endotoxin,such as promoters, terminators, andenhancers. As stated above, nomammalian toxicity is anticipated fromdietary exposure to the genetic materialnecessary for the production of theBacillus thuringiensis CryIA(b) delta-endotoxin in any plant. Therefore, noresidue data are required in order togrant an exemption from therequirements of a tolerance for the plantpesticides, Bacillus thuringiensisCryIA(b) delta-endotoxin and thegenetic material necessary for itsproduction in plants.

ConclusionsBased on the information considered,

the Agency concludes thatestablishment of a tolerance is notnecessary to protect the public health.Therefore, the exemption from toleranceis established as set forth below.

Any person adversely affected by thisregulation may, within 30 days afterpublication of this document in theFederal Register, file written objectionsto the regulation and may also requesta hearing on those objections.Objections and hearing requests must befiled with the Hearing Clerk, at theaddress given above (40 CFR 178.20). Acopy of the objections and/or hearingrequests filed with the Hearing Clerkshould be submitted to the OPP docketfor this rule making. The objectionssubmitted must specify the provisionsof the regulation deemed objectionableand the grounds for the objections (40CFR 178.25). Each objection must beaccompanied by the fee prescribed by40 CFR 180.33(i). If a hearing isrequested, the objections must include astatement of the factual issue(s) onwhich a hearing is requested, therequestor’s contentions on such issues,a summary of any evidence relied upon

by the objector as well as the othermaterials required by 40 CFR 178.27. Arequest for a hearing will be granted ifthe Administrator determines that thematerial submitted shows the following:There is genuine and substantial issueof fact; there is reasonable possibilitythat available evidence identified by therequestor would, if established, resolveone or more of such issues in favor ofthe requestor, taking into accountuncontested claims or facts to thecontrary; and resolution of the factualissue(s) in the manner sought by therequestor would be adequate to justifythe action requested (40 CFR 178.32).

EPA has established a record for thisrulemaking under docket number [PP5F4473/R2270] (including anycomments and data submittedelectronically). A public version of thisrecord, including printed, paperversions of electronic comments, whichdoes not include any informationclaimed as CBI, is available forinspection from 8 a.m. to 4:30 p.m.,Monday through Friday, excluding legalholidays. The public record is located inRoom 1132 of the Public Response andProgram Resources Branch, FieldOperations Division (7506C), Office ofPesticide Programs, EnvironmentalProtection Agency, Crystal Mall #2,1921 Jefferson Davis Highway,Arlington, VA.

Electronic comments may be sentdirectly to EPA at:

[email protected].


The official record for thisrulemaking, as well as the publicversion, as described above will be keptin paper form. Accordingly, EPA willtransfer any copies of objections andhearing requests received electronicallyinto printed, paper form as they arereceived and will place the paper copiesin the official rulemaking record whichwill also include all commentssubmitted directly in writing. Theofficial rulemaking record is the paperrecord maintained at the address in‘‘ADDRESSES’’ at the beginning of thisdocument.

Under Executive Order 12866 (58 FR51735, October 4, 1993), this action isnot a ‘‘significant regulatory action’’and, since this action does not imposeany information collection requirementsas defined by the Paperwork ReductionAct, 44 U.S.C. 3501 et seq., it is notsubject to review by the Office ofManagement and Budget. In addition,this action does not impose anyenforceable duty or contain any


unfunded mandate as described in theUnfunded Mandates Reform Act of 1995(Pub. L. 104–4), or require priorconsultation with State officials asspecified by Executive Order 12875 (58FR 58093, October 28, 1993), or specialconsiderations as required by ExecutiveOrder 12898 (59 FR 7629, February 16,1994).

Pursuant to the requirements of theRegulatory Flexibility Act (Pub. L. 96-354, 94 Stat. 1164, 5 U.S.C. 601-612),the Administrator has determined thatregulations establishing new tolerancesor raising tolerance levels orestablishing exemptions from tolerancerequirements do not have a significanteconomic impact on a substantialnumber of small entities. A certificationstatement to this effect was published inthe Federal Register of May 4, 1981 (46FR 24950).

Under 5 U.S.C. 801(a)(1)(A) of theAdministrative Procedure Act (APA) asamended by the Small BusinessRegulatory Enforcement Fairness Act of1996 (Title II of Pub. L. 104–121, 110Stat. 847), EPA submitted a reportcontaining this rule and other requiredinformation to the U.S. Senate, the U.S.House of Representatives and theComptroller General of the GeneralAccounting Office prior to publicationof the rule in today’s Federal Register.This rule is not a ‘‘major rule’’ asdefined by 5 U.S.C. 804(2) of the APAas amended.

List of Subjects in 40 CFR Part 180Environmental protection,

Administrative practice and procedure,Agricultural commodities, Pesticidesand pests, Reporting and record keepingrequirements.


Daniel M. Barolo,

Director, Office of Pesticide Programs.Therefore, 40 CFR Part 180 is

amended as follows:



Authority: 21 U.S.C. 346a and 371.

2. In subpart D, by adding new§ 180.1173, to read as follows:

§ 180.1173 Bacillus thuringiensis CryIA(b)delta-endotoxin and the genetic materialnecessary for its production in all plants.

Bacillus thuringiensis CryIA(b) delta-endotoxin and the genetic materialnecessary for its production in all plantsare exempt from the requirement of atolerance when used as plant pesticidesin all plant raw agricultural

commodities. ‘‘Genetic materialnecessary for its production’’ means thegenetic material which comprise geneticmaterial encoding the CryIA(b) delta-endotoxin and its regulatory regions.‘‘Regulatory regions’’ are the geneticmaterial that control the expression ofthe genetic material encoding theCryIA(b) delta-endotoxin, such aspromoters, terminators, and enhancers.



Health Care Financing Administration

42 CFR Parts 406, 407, 408, and 416

[BPD–752–FC]

RIN 0938–AH33

Medicare Program: Special EnrollmentPeriods and Waiting Period

AGENCY: Health Care FinancingAdministration (HCFA), HHS.ACTION: Final rules with commentperiod.

SUMMARY: These rules provide anadditional way for certain disabledindividuals under age 65 to qualify forspecial enrollment periods (SEPs);extend from 1991 through 1998 theperiod during which certain disabledindividuals under age 65 who arecovered under large group health plans(LGHPs) may qualify for SEPs; and makeclear that a second 24-month waitingperiod is not required for disability-based reentitlement if the currentimpairment is the same as, or directlyrelated to, the impairment on which theprevious period of entitlement wasbased.

The changes made by these rulesconform the HCFA regulations to certainprovisions of the Omnibus BudgetReconciliation Acts of 1987, 1989, 1990,and 1993 (commonly referred to asOBRA ’87, OBRA ’89, OBRA ’90, andOBRA ’93, respectively), and the SocialSecurity Act (SSA) Amendments of1994 (Pub. L. 103–432).

In OBRA ’93, Congress amendedsection 1862(b) of the Social SecurityAct (the Act), to extend throughSeptember 30, 1998 the MedicareSecondary Payer (MSP) provisions fordisabled beneficiaries. Congress did notmake a conforming amendment tosection 1837(i) of the Act, whichauthorizes SEPs for disabledbeneficiaries who stop working.However, the SSA Amendments of 1994made the conforming change to section

1837(i), retroactive to the OBRA ’93effective date.

The purpose of the special enrollmentperiod amendments is to ensure that adisabled individual under age 65 whomeets the conditions for enrollment inMedicare Part B will be able to enroll assoon as his or her group health plancoverage based on current employmentends; and to extend until September 30,1998 the protection afforded by thespecial enrollment periods to disabledindividuals covered under LGHPs.DATES: Effective date: These rules areeffective on September 3, 1996.

Comment date: We will considercomments received by October 1, 1996.ADDRESSES: Please mail original and 3copies of your comments to thefollowing address: Health CareFinancing Administration, Departmentof Health and Human Services,Attention: BPD–752–FC, P.O. Box26688, Baltimore, Maryland 21207.

If you prefer, you may deliver originaland 3 copies of your comments to eitherof the following addresses:Room 309–G, 200 Independence

Avenue, S.W., Washington, DC 20201,Room C5–09–26, 7500 Security

Boulevard, Baltimore, Maryland21244–1850.Because of staffing and resource

limitations, we cannot accept commentsby facsimile (FAX) transmission. Incommenting, please refer to file codeBPD–752–FC. Comments receivedtimely will be available for publicinspection as they are received,generally beginning approximately 3weeks after publication of a document,in Room 309–G of the Department’soffices at 200 Independence Avenue,SW., Washington, DC on Mondaythrough Friday of each week from 8:30a.m. to 5 p.m. (Phone: (202) 690–7890).

Although we cannot respond toindividual comments, if we revise theserules as a result of comments, we willdiscuss all timely comments in thepreamble to the revised rules.FOR FURTHER INFORMATION CONTACT:Margaret Jefferson, (410) 786–4482.


I. Background

A. Amendments to the Statute: SpecialEnrollment Periods and Waiting Period

1. Section 4033 of OBRA ’87 (Pub. L.100–203) amended section 226(f) of theAct to provide that, effective as ofMarch 1988, a second 24-month waitingperiod is not required for disability-based reentitlement if the currentimpairment is the same as, or directlyrelated to, the impairment on which the


previous period of entitlement wasbased.

2. Section 6202(c) of OBRA ’89 (Pub.L. 101–239) amended section 1837(i) ofthe Act to provide, effective July 1,1990, an additional way for certaindisabled individuals under age 65 toqualify for a SEP. Before enactment ofthis amendment, a disabled ‘‘activeindividual’’ could qualify for a SEP onlyif he or she was covered (directly or aspart of the family of another coveredindividual) under a large group healthplan (LGHP). (The statute defined‘‘active individual’’ as ‘‘an employee (asmay be defined in regulations), theemployer, self-employed individual(such as the employer) an individualassociated with the employer in abusiness relationship, or a member ofthe family of any such person’’). AnLGHP is a plan of an employer of 100or more employees or of a group ofemployers at least one of which has 100or more employees. Under theamendment, a disabled individual canalso qualify for a SEP under the rulesthat previously applied only to anindividual age 65 or over, that is, byhaving been covered under a grouphealth plan (GHP) on the basis of his orher own employment or that of aspouse. This rule applies regardless ofthe number of employees an employerhas. However, since the SEPqualification provisions for individualsage 65 or over refer specifically to theplan of the individual or theindividual’s spouse, this additional wayof qualifying for a SEP is not availableto a child or other family member whois disabled. Those individuals qualifyfor SEPs only if covered under an LGHP.

3. Section 4203(b) of OBRA ’90(Public Law 101–508) and section13561(b) of OBRA ’93 (Public Law 103–66) amended section 1862(b)(1)(B)(iii) ofthe Act to change, first from December31, 1991 to September 30, 1995, andthen to September 30, 1998, thetermination date of the MSP provisionsfor the disabled. Moreover, sections13561(e)(1)(E) and (e)(1)(F) of OBRA ’93amended section 1862(b)(1)(B)(i) of theAct to eliminate the ‘‘active individual’’language. Before this amendment,‘‘active individual’’ identified thebeneficiaries to whom the MSPprovisions applied. Because of thischange to the ‘‘current employment’’criterion, Medicare is secondary payerfor a disabled beneficiary who is underage 65 and who is covered under anLGHP—

• Through August 9, 1993, as adisabled ‘‘active individual’’; and

• From August 10, 1993 throughSeptember 1998, ‘‘by virtue of the

individual’s current employment statuswith an employer’’.

Section 1862(b)(1)(B) of the Actestablishes October 1, 1998 as the sunsetdate of the MSP provisions for disabledindividuals. As noted above, section1837(i) of the Act, which pertains toSEPs, was amended by the SSAAmendments of 1994 to conform tosection 1862(b(1)(B) of the Act. Sincethe availability of SEPs to disabledindividuals depends upon the existenceof section 1862(b)(1)(B) of the Act, wehave interpreted that the October 1,1998 sunset date in that section appliesalso to those SEP provisions. (The MSPprovisions for the aged, set forth atsection 1862(b)(1)(A) of the Act have nosunset date.)

4. Section 147(f) of the Social SecurityAmendments of 1994 (Pub. L. 103–432).

• Amended section 1837(i)(3) of theAct so that a SEP may begin earlier andlast longer; and

• Amended section 1838(e) of the Actto provide options for the beginning ofMedicare coverage that is based onenrollment during specified months of aSEP.

Under the section 1837 amendment—• Instead of beginning on the first day

of the first month during which theindividual is no longer enrolled in aGHP or LGHP on the basis of currentemployment status, the SEP mayinclude each month during any part ofwhich the individual is so enrolled; and

• Instead of ending ‘‘seven monthslater’’, the SEP ends on the last day ofthe eighth consecutive month in whichthe individual is no longer so enrolled.

Under the section 1838 amendment,with respect to the beginning ofcoverage—

• For one who enrolls in Medicare ina month during any part of which he orshe is enrolled in a GHP or LGHP on thebasis of current employment status, orthe first full month when not soenrolled, Medicare coverage begins onthe first day of the month of enrollmentor, at the option of the individual, onthe first day of any of the followingthree months.

• For one who enrolls in any othermonth of the SEP, there is no change:Medicare coverage begins on the firstday of the month following the monthof enrollment.

B. Conforming Changes in theRegulations: Special Enrollment Periodsand Waiting Period

1. To reflect the statutory changesdiscussed above, we have made thefollowing changes:

• Added a new paragraph (b)(3) to§ 406.12, to specify that a second 24-month waiting period is not required for

reentitlement to hospital insurancebenefits if the previous period ofentitlement ended on or after March 1,1988 and the current impairment is thesame as, or directly related to, theimpairment on which the previousperiod of entitlement was based.

• Revised § 407.20(d) to set forth thenew rule under which a disabledindividual may qualify for a SEP if heor she had GHP coverage on the basis ofthe current employment of theindividual or the individual’s spouse,and to restate the rule for those whomust qualify on the basis of LGHPcoverage.

• Revised § 407.20(f) to specify thebeginning date of a SEP for a disabledindividual who had GHP coverage onthe basis of current employment.

• Revised § 408.24(a)(8)(i) to change‘‘January 1992’’ to ‘‘October 1998’’ andadd a new paragraph (a)(9) to specifythe months excluded in computingMedicare Part B premium increases (forlate enrollment or reenrollment) fordisabled individuals who had GHPcoverage on the basis of currentemployment. The revisions to§ 408.24(a)(8)(i) reflect the extension ofthe MSP provisions for the disabled.The new paragraph 408.24 (a)(9) isneeded because the OBRA ’89amendment that extended the SEPprovisions to disabled beneficiariescovered under a GHP (as distinguishedfrom an LGHP) was effective July 1990.

C. Technical and Clarifying Changes1. In § 406.6, we have amended

paragraph (b) to clarify that anindividual who is under age 65 and hasbeen entitled, for more than 24 months,to monthly social security or railroadretirement benefits based on disability isalso (in addition to those currentlyidentified in the paragraph)automatically entitled to Medicare PartA without filing an application. Thisprovision is part of section 226(b) of theAct and, through an oversight, thisprovision had not been reflected in ourregulations.

2. Paragraph (e) of § 406.21, revised toreflect the statutory changes that affectSEPs, is redesignated as a new § 406.24.

3. In § 407.20(a), we have made thefollowing changes:

• Removed the definitions andreplaced them with reference to thedefinitions in Part 411 of the HCFArules.

• Used the initials ‘‘GHP’’ and‘‘LGHP’’ wherever appropriate.

• Explained, under paragraph (a)(1)why the ‘‘former employee’’ language ofthe § 411.101 definitions of GHP andLGHP does not apply with respect toSEPs.


4. In § 407.25, we have revisedparagraph (c) to remove the currentoutdated content on beginning ofentitlement and referenced new§ 406.24. This new section incorporatesthe statutory changes that pertain toSEPs and apply to Medicare Part B aswell as Medicare Part A.

5. In § 408.24(a), we have—• Corrected the cross-reference to

§ 405.340, which has been redesignatedas § 411.170.

• Used the initials ‘‘GHP’’ and‘‘LGHP’’ wherever appropriate.

• Referenced the definitions in§§ 411.101, 411.104, and 411.201 of theHCFA regulations, which incorporatethe Internal Revenue Code language.

• Removed references to Public Lawsbecause reference to the implementingrules provides more precise guidanceand is sufficient.

6. We have also taken advantage ofthis opportunity to make minortechnical and editorial changes that weoverlooked when § 416.35, whichpertains to ambulatory surgical centers,was amended.

II. Waiver of Proposed RulemakingWe ordinarily publish a notice of

proposed rulemaking in the FederalRegister and invite public comment.The Notice describes the terms andsubstance of the proposed rules andreferences the legal authority underwhich they are proposed. However, thisprocedure may be waived if the agencyfinds that notice and public commentrulemaking is impracticable,unnecessary, or contrary to the publicinterest.

These rules conform HCFAregulations to statutory amendmentsthat are already in effect. Publication ofthese conforming amendments willensure better understanding ofbeneficiary rights, but will have nofiscal or program impact. The technicaland clarifying amendments make nosubstantive changes in the rules. Forthese reasons, we find that notice andopportunity for comment areunnecessary and that there is goodcause to waive notice of proposedrulemaking procedures.

However, as indicated above underDATES, we will consider timelycomments from anyone who believesthat the conforming changes go beyondwhat the statute requires or permits, orthat any of the technical amendmentsaffect the substance of the rules.

III. Regulatory Impact StatementConsistent with the Regulatory

Flexibility Act (RFA) (5 U.S.C. 601through 612), we prepare a regulatoryflexibility analysis for each rule unless

the Secretary certifies that it will nothave a significant economic impact ona substantial number of small entities.States and individuals are not includedin the definition of small entities.

In addition, section 1102(b) of the Actrequires the Secretary to prepare aregulatory impact analysis if a rule mayhave a significant impact on theoperations of a substantial number ofsmall rural hospitals. This analysis mustconform to the provisions of section 604of the RFA. For purposes of section1102(b) of the Act, we define a smallrural hospital as a hospital that islocated outside of a MetropolitanStatistical Area and has fewer than 50beds.

These rules conform the HCFAregulations to certain provisions ofOBRA ’87, OBRA ’89, OBRA ’90, OBRA’93, and the Social Security ActAmendments of 1994. The statutoryeffective dates of these provisions havealready passed and the changes arealready in effect.

These amendments to the regulationswill have no fiscal or program impact.We are not preparing analyses for eitherthe RFA or section 1102(b) of the Actbecause we have determined, and theSecretary certifies, that these rules willnot have a significant economic impacton a substantial number of small entitiesor a significant impact on the operationof a substantial number of small ruralhospitals.

We have reviewed these rules anddetermined that, under the provisions ofPublic Law 104–121, they are not majorrules.

In accordance with the provisions ofExecutive Order 12866, these final ruleswith comment period were notreviewed by the Office of Managementand Budget.

IV. Paperwork Reduction ActThese rules contain no information

collection requirements subject toreview by the Office of Management andBudget under the Paperwork ReductionAct.

List of Subjects

42 CFR Part 406Health Facilities, Kidney diseases,

Medicare.

42 CFR Part 407Medicare.

42 CFR Part 408Medicare.

42 CFR Part 416Health facilities, Kidney diseases,

Medicare, Reporting and recordkeepingrequirements.

42 CFR Chapter IV is amended asfollows:

A. Part 406 is amended as set forthbelow:

PART 406—HOSPITAL INSURANCEELIGIBILITY AND ENTITLEMENT


Authority: Secs. 1102 and 1871 of theSocial Security Act (42 U.S.C. 1302 and1395hh), unless otherwise noted.

2. Section 406.6 is amended to reviseparagraph (b) to read as follows:

§ 406.6 Application or enrollment forhospital insurance.* * * * *

(b) Individuals who need not file anapplication for hospital insurance. Anindividual who meets any of thefollowing conditions need not file anapplication for hospital insurance:

(1) Is under age 65 and has beenentitled, for more than 24 months, tomonthly social security or railroadretirement benefits based on disability.

(2) At the time of attainment of age 65,is entitled to monthly social security orrailroad retirement benefits.

(3) Establishes entitlement to monthlysocial security or railroad retirementbenefits at any time after attaining age65.

3. Section 406.12(b) is amended toremove footnote ‘‘1’’, revise theintroductory text, remove the semicolonand the word ‘‘or’’ from the end ofparagraph (b)(1) and insert a period inits place, and add a new paragraph(b)(3), to read as follows:

§ 406.12 Individual under age 65 who isentitled to social security or railroadretirement disability benefits.* * * * *

(b) Previous periods of disabilitybenefits entitlement. Months of aprevious period of entitlement ordeemed entitlement to disabilitybenefits count toward the 25-monthrequirement if any of the followingconditions is met:* * * * *

(3) The previous period ended on orafter March 1, 1988 and the currentimpairment is the same as, or directlyrelated to, the impairment on which theprevious period of entitlement wasbased.* * * * *

4. In § 406.21, paragraph (e) isremoved and reserved.

5. A new § 406.24 is added, to read asfollows:


1 Before August 1986, SEPs were available onlyfor enrollment in supplementary medical insurance,not for enrollment in premium hospital insurance.

2 Before March 1995, SEPs began on the first dayof the first month the individual was no longercovered under a GHP or LGHP by reason of currentemployment status.

3 Before August 10, 1993, an individual under age65 could qualify for a SEP only if he or she had

LGHP coverage as an ‘‘active individual’’, which thestatute defined as ‘‘an employee, employer, self-employed individual (such as the employer),individual associated with the employer in abusiness relationship, or as a member of the familyof any of those persons’’.

4 Under the current statute, the SEP provisionapplicable to disabled individuals covered under anLGHP expires on September 1998. Unless Congresschanges that date, the last SEP available underthose provisions will begin with June 1998.

§ 406.24 Special enrollment period.1

(a) Terminology. As used in thissubpart, the following terms have theindicated meanings.

(1) Current employment status has themeaning given this term in § 411.104 ofthis chapter.

(2) Family member has the meaninggiven this term in § 411.201 of thischapter.

(3) Group health plan (GHP) and largegroup health plan (LGHP) have themeanings given those terms in § 411.101of this chapter, except that the ‘‘formeremployee’’ language of those definitionsdoes not apply with respect to SEPsbecause—

(i) Section 1837(i)(1)(A) of the Actexplicitly requires that GHP coverage ofan individual age 65 or older, be byreason of the individual’s (or theindividual’s spouse’s) currentemployment status; and

(ii) The sentence following section1837(i)(1)(B), of the Act refers to ‘‘largegroup health plan’’. Under section1862(b)(1)(B)(i), as amended by OBRA’93, LGHP coverage of a disabledindividual must be ‘‘by virtue of theindividual’s or a family member’scurrent employment status with anemployer’’.

(4) Special enrollment period (SEP) isa period provided by statute to enablecertain individuals to enroll in Medicarewithout having to wait for the generalenrollment period.

(b) Duration of SEP.2 (1) The SEPincludes any month during any part ofwhich—

(i) An individual over age 65 isenrolled in a GHP by reason of thecurrent employment status of theindividual or the individual’s spouse; or

(ii) An individual under age 65 anddisabled—

(A) Is enrolled in a GHP by reason ofthe current employment status of theindividual or the individual’s spouse; or

(B) Is enrolled in an LGHP by reasonof the current employment status of theindividual or a member of theindividual’s family.

(2) The SEP ends on the last day ofthe eighth consecutive month duringwhich the individual is at no timeenrolled in a GHP or an LGHP by reasonof current employment status.

(c) Conditions for use of a SEP.3 Inorder to use a SEP, the individual mustmeet the following conditions:

(1) When first eligible to enroll forpremium hospital insurance under§ 406.20(b) or (c), the individual was—

(i) Age 65 or over and covered undera GHP by reason of the currentemployment status of the individual orthe individual’s spouse;

(ii) Under age 65 and covered underan LGHP by reason of the currentemployment status of the individual ora member of the individual’s family ; or

(iii) Under age 65 and covered undera GHP by reason of the currentemployment status of the individual orthe individual’s spouse.

(2) For all the months thereafter, theindividual has maintained coverageeither under hospital insurance or aGHP or LGHP.

(d) Special rule: Additional SEPs. (1)Generally, if an individual fails to enrollduring any available SEP, he or she isnot entitled to any additional SEPs.

(2) However, if an individual fails toenroll during a SEP, because coverageunder the same or a different GHP orLGHP was restored before the end ofthat particular SEP, that failure to enrolldoes not preclude additional SEPs.

(e) Effective date of coverage. (1) If theindividual enrolls in a month duringany part of which he or she is coveredunder a GHP or LGHP on the basis ofcurrent employment status, or in thefirst full month when no longer socovered, coverage begins on the first dayof the month of enrollment or, at theindividual’s option, on the first day ofany of the three following months.

(2) If the individual enrolls in anymonth of the SEP other than the monthsspecified in paragraph (e)(1) of thissection, coverage begins on the first dayof the month following the month ofenrollment.

B. Part 407 is amended as set forthbelow.

PART 407—SUPPLEMENTARYMEDICAL INSURANCE (SMI)ENROLLMENT AND ENTITLEMENT


Authority: Secs. 1102 and 1871 of theSocial Security Act (42 U.S.C. 1302 and1395hh).


§ 407.20 Special enrollment period relatedto coverage under group health plans.

(a) Terminology—(1) Group healthplan (GHP) and large group health plan

(LGHP). These terms have the meaningsgiven them in § 411.101 of this chapterexcept that the ‘‘former employee’’language of those definitions does notapply with respect to SEPs for thereasons specified in § 406.24(a)(3) ofthis chapter.

(2) Special enrollment period (SEP).This term has the meaning set forth in§ 406.24(a)(4) of this chapter. In order touse a SEP, an individual must meet theconditions of paragraph (b) and ofparagraph (c) or (d) of this section, asappropriate.

(b) General rule. All individuals mustmeet the following conditions:

(1) They are eligible to enroll for SMIon the basis of age or disability, but noton the basis of end-stage renal disease.

(2) When first eligible for SMIcoverage (4th month of their initialenrollment period), they were coveredunder a GHP or LGHP on the basis ofcurrent employment status or, if not socovered, they enrolled in SMI duringtheir initial enrollment period; and

(3) For all months thereafter, theymaintained coverage under either SMIor a GHP or LGHP. (Generally, if anindividual fails to enroll in SMI duringany available SEP, he or she is notentitled to any additional SEPs.However, if an individual fails to enrollduring a SEP because coverage underthe same or a different GHP or LGHPwas restored before the end of thatparticular SEP, that failure to enrolldoes not preclude additional SEPs.)

(c) Special rule: Individual age 65 orover. For an individual who is or wascovered under a GHP, coverage must beby reason of the current employmentstatus of the individual or theindividual’s spouse.

(d) Special rules: Disabledindividual.4 Individuals entitled on thebasis of disability (but not on the basisof end-stage renal disease) must meetconditions that vary depending onwhether they were covered under a GHPor an LGHP.

(1) For a disabled individual who isor was covered under a GHP, coveragemust be on the basis of the currentemployment status of the individual orthe individual’s spouse.

(2) For a disabled individual who isor was covered under an LGHP,coverage must be as follows:

(i) Before August 10, 1993, as an‘‘active individual’’, that is, as anemployee, employer, self-employedindividual (such as the employer),individual associated with the employer


in a business relationship, or as amember of the family of any of thosepersons.

(ii) On or after August 10, 1993, byreason of current employment status ofthe individual or a member of theindividual’s family.

(e) Effective date of coverage. The ruleset forth in § 406.24(d) for Medicare PartA applies equally to Medicare Part B.

3. In § 407.25, paragraph (c) is revisedto read as follows:

§ 407.25 Beginning of entitlement:Individual enrollment.

* * * * *(c) Enrollment or reenrollment during

a SEP. The rules set forth in § 406.24(d)of this chapter apply.

C. Part 408 is amended as set forthbelow:

PART 408—SUPPLEMENTARYMEDICAL INSURANCE PREMIUMS



2. Section 408.24 is amended torepublish the introductory text ofparagraph (a), to revise paragraphs(a)(6), (a)(7), and (a)(8), to add a newparagraph (a)(9), and to revise paragraph(b)(2)(i), to read as follows:

§ 408.24 Individuals who enrolled orreenrolled before April 1, 1981 or afterSeptember 30, 1981.

(a) Enrollment. For an individual whofirst enrolled before April 1, 1981 orafter September 30, 1981, the periodincludes the number of months elapsedbetween the close of the individual’sinitial enrollment period and the closeof the enrollment period in which he orshe first enrolled, and excludes thefollowing:* * * * *

(6) For premiums due for monthsbeginning with September 1984 andending with May 1986, the following:

(i) Any months after December 1982during which the individual was—

(A) Age 65 to 69;(B) Entitled to hospital insurance

(Medicare Part A); and(C) Covered under a group health plan

(GHP) by reason of current employmentstatus.

(ii) Any months of SMI coverage forwhich the individual enrolled during aspecial enrollment period as providedin § 407.20 of this chapter.

(7) For premiums due for monthsbeginning with June 1986, thefollowing:

(i) Any months after December 1982during which the individual was:

(A) Age 65 or over; and(B) Covered under a GHP by reason of

current employment status.(ii) Any months of SMI coverage for

which the individual enrolled during aspecial enrollment period as providedin § 407.20 of this chapter.

(8) For premiums due for monthsbeginning with January 1987, thefollowing:

(i) Any months after December 1986and before October 1998 during whichthe individual was:

(A) A disabled Medicare beneficiaryunder age 65;

(B) Not eligible for Medicare on thebasis of end stage renal disease, under§ 406.13 of this chapter; and

(C) Covered under an LGHP asdescribed in § 407.20 of this chapter.


(9) For premiums due for monthsbeginning with July 1990, the following:

(i) Any months after December 1986during which the individual met theconditions of paragraphs (a)(8)(i)(A) and(a)(8)(i)(B) of this section, and wascovered under a GHP by reason of thecurrent employment status of theindividual or the individual’s spouse.


(b) * * *(2) * * *(i) The periods specified in

paragraphs (a)(1) through (a)(9) of thissection; and* * * * *

D. Part 416 is amended as set forthbelow.

PART 416—AMBULATORY SURGICALSERVICES



§ 416.35 [Amended]

2. In § 416.35, the following changesare made:

a. In paragraph (b)(1)(i), ‘‘§ 416.39’’ isrevised to read ‘‘§ 416.26’’.

b. In the introductory text ofparagraph (d), ‘‘shall be given’’ isrevised to read ‘‘is given’’.(Catalog of Federal Domestic AssistanceProgram No. 93.773, Medicare—HospitalInsurance and No. 93.774, Medicare—Supplementary Medical Insurance)

Dated: July 26, 1996.Bruce C. Vladeck,Administrator, Health Care FinancingAdministration.[FR Doc. 96–19558 Filed 8–1–96; 8:45 am]BILLING CODE 4120–01–P

DEPARTMENT OF THE INTERIOR

Office of the Secretary

43 CFR Part 4

Department Hearings and AppealsProcedures

AGENCY: Office of Hearings and Appeals,Office of the Secretary, Interior.ACTION: Final rule.

SUMMARY: This document updatesaddresses for the Office of the Solicitor.EFFECTIVE DATE: August 2, 1996.FOR FURTHER INFORMATION CONTACT:Will A. Irwin, Administrative Judge,Interior Board of Land Appeals, Officeof Hearings and Appeals, U.S.Department of the Interior, 4015 WilsonBlvd., Arlington, VA 22203. Telephone:703–235–3750.SUPPLEMENTARY INFORMATION: Becausethis action reflects agency managementin announcing a change of address, theDepartment has determined that theprovisions of the AdministrativeProcedure Act, 5 U.S.C. 553 (b) and (d),allowing for public notice and commentand a 30-day delay in the effective dateof a rule, are unnecessary andimpracticable.

List of Subjects in 43 CFR Part 4Administrative practice and

procedure, Mines, Public lands, Surfacemining.

Therefore, part 4 of title 43 of theCode of Federal Regulations, isamended as follows:

PART 4—[AMENDED]

Subpart E—Special ProceduresApplicable to Public Land Hearingsand Appeals

1. The authority citation for subpart Eof part 4 continues to read as follows:

Authority: Sections 4.470 to 4.478 alsoissued under authority of sec. 2, 48 Stat.1270; 43 U.S.C. 315a.

2. Section 4.413 is amended byrevising the address in paragraph(c)(2)(iv) to read as follows:

§ 4.413 Service of notice of appeal and ofother documents.

* * * * *(c) * * *


1 The Notice of Proposed Rulemaking initiatingthis proceeding may be found at 59 FR 54878,November 2, 1994.

2 The term ‘‘code identification,’’ when used inthis Order in conjunction with 911 calls, means (1)in the case of calls transmitted over the facilities ofa covered carrier other than a Specialized MobileRadio carrier that is subject to the requirements ofthis Order, a call originated from a mobile unitwhich has a Mobile Identification Number (MIN);and (2) in the case of calls transmitted over thefacilities of a Specialized Mobile Radio carrier thatis subject to the requirements of this Order, a calloriginated from a mobile unit which has thefunctional equivalent of a MIN. A MIN is a 34-bitbinary number that a PCS or cellular handsettransmits as part of the process of identifying itselfto wireless networks. Each handset has one MIN,and it is derived from the ten-digit North AmericanNumbering Plan (NANP) telephone number that isprogrammed into the handset by a CMRS providergenerally when it initiates service for a newsubscriber. See, e.g., EIA/TIA Standard 553, MobileStation—Land Station Compatibility Specification,September 1989, at 2.3.1.

(2) * * *(iv) * * *Regional Solicitor, Rocky Mountain

Region, U.S. Department of the Interior,755 Parfet Street, Suite 151, Lakewood,CO 80215;* * * * *

Subpart L—Special Rules Applicableto Surface Coal Mining Hearings andAppeals

3. The authority citation for subpart Lof part 4 continues to read as follows:

Authority: 30 U.S.C. 1256, 1260, 1261,1264, 1268, 1271, 1272, 1275, 1293; 5 U.S.C.301.

§ 4.1109 [Amended]

4. In § 4.1109(a)(2), the sevenundesignated paragraphs are designatedas (i) through (vii).

5. In § 4.1109, newly designatedparagraphs (a)(2) (iii), (v), and (vii) arerevised to read as follows:

§ 4.1109 Service.

(a) * * *(2) * * *(iii) For mining operations in

Colorado, Montana, North Dakota,South Dakota, and Wyoming, includingmining operations located on Indianlands within those States: RegionalSolicitor, Rocky Mountain Region, U.S.Department of the Interior, 755 ParfetStreet, Suite 151, Lakewood, CO 80215;Telephone: (303) 231–5350; FAX: (303)231–5360.* * * * *

(v) For the challenge of permittingdecisions affecting mining operationslocated on Indian lands within Arizona,California, and New Mexico: RegionalSolicitor, Rocky Mountain Region, U.S.Department of the Interior, 755 ParfetStreet, Suite 151, Lakewood, CO 80215;Telephone: (303) 231–5350; FAX: (303)231–5360.* * * * *

(vii) For the challenge of permittingdecisions affecting mining operations inWashington: Regional Solicitor, RockyMountain Region, U.S. Department ofthe Interior, 755 Parfet Street, Suite 151,Lakewood, CO 80215; Telephone: (303)231–5350; FAX: (303) 231–5360.* * * * *

Dated: June 12, 1996.Brooks B. Yeager,Acting Assistant Secretary—Policy,Management and Budget.[FR Doc. 96–19392 Filed 8–1–96; 8:45 am]BILLING CODE 4310–79–M

FEDERAL COMMUNICATIONSCOMMISSION

47 CFR Part 20

[CC Docket No. 94–102; FCC 96–264]

Compatibility of Wireless ServicesWith Enhanced 911

AGENCY: Federal CommunicationsCommission.ACTION: Final rule.

SUMMARY: The Federal CommunicationsCommission has adopted a Report andOrder and Further Notice of ProposedRulemaking that creates rules to governthe availability of basic 911 services andthe implementation of Enhanced 911(E911) for wireless services. (Thesummary of the Further Notice ofProposed Rulemaking portion of thisdecision may be found elsewhere in thisedition of the Federal Register). Theprimary goal of this proceeding is topromote safety of life and propertythrough the use of wirelesscommunications, ensure broadavailability of wireless 911 services, bycreating a uniform, nationwide standardconcerning the processing of 911 callsfrom wireless handsets, and establish atimetable for the development anddeployment of technologies that willenable wireless carriers and emergencyservice providers to identify the locationof wireless 911 callers.EFFECTIVE DATE: October 1, 1996.FOR FURTHER INFORMATION CONTACT:Peter G. Wolfe, Policy Division,Wireless Telecommunications Bureau,(202) 418–1310.SUPPLEMENTARY INFORMATION: This is asummary of the Report and Order(‘‘R&O’’) portion of the Commission’sReport and Order and Further Notice ofProposed Rulemaking in CC Docket No.94–104; FCC 96–264, adopted June 12,1996, and released July 26, 1996. Thesummary of the Further Notice ofProposed Rulemaking portion of thisdecision may be found elsewhere in thisedition of the Federal Register. Thecomplete text of this R&O is availablefor inspection and copying duringnormal business hours in the FCCReference Center (Room 239), 1919 MStreet, N.W. Washington, D.C., and maybe purchased from the Commission’scopy contractor, InternationalTranscription Service, (202) 857–3800,2100 M Street, N.W., Suite 140,Washington, D.C. 20037.

Synopsis of the Report and Order

1. In the R&O, the Commissionadopted several requirements and madethem applicable to all cellular licensees,

broadband Personal CommunicationsService (PCS), and certain SpecializedMobile Radio (SMR) licensees.1 TheseSMR providers include 800 MHz and900 MHz SMR licensees that holdgeographic area licensees, as well asincumbent wide area SMR licenseesdefined as licensees who have obtainedextended implementationauthorizations in the 800 MHz or 900MHz SMR service, either by waiver orunder Section 90.629 of theCommission’s Rules. The covered SMRproviders include only licensees thatoffer real-time, tow-way switched voiceservice that is interconnected with thepublic switched network, either on astand-alone basis or packaged withother telecommunications services.These classes of licensees are hereafterreferred to as ‘‘covered carriers.’’ Certainother SMR licensees and MobileSatellite Service (MSS) carriers areexempt from our requirements.

2. For basic 911 services, the R&O firstrequires that, not later than 12 monthsafter the effective date of the rulesadopted in this proceeding, coveredcarriers must process and transmit toany appropriate PSAPs all 911 callsmade from wireless mobile handsetswhich transmit a code identification,2including calls initiated by roamers. Theprocessing and transmission of suchcalls shall not be subject to any uservalidation or similar procedure thatotherwise may be invoked by thecovered carrier.

3. In the case of 911 calls made fromwireless mobile handsets that do nottransmit a code identification, not laterthan 12 months after the effective dateof the rules adopted in this proceeding,covered carriers must process andtransmit such calls to any appropriatePSAP which previously has issued aformal instruction to the carrier


3 Subtitle II of the CWAAA is ‘‘The SmallBusiness Regulatory Enforcement Fairness Act of1996,’’ (SBREFA), codified at 5 U.S.C. § 601.

involved that the PSAP desires toreceive such calls from the carrier.

4. Not later than 12 months after theeffective date of the rules adopted inthis proceeding, covered carriers mustbe capable of transmitting calls byindividuals with speech or hearingdisabilities through devices used inconjunction with or as a substitute fortraditional wireless mobile handsets,e.g., through the use of Text TelephoneDevices (TTY) to local 911 services.

5. The implementation anddeployment of enhanced 911(E911)features and functions will beaccomplished in two phases. UnderPhase I, not later than 12 months afterthe effective date of the rules adopted inthis proceeding, covered carriers musthave initiated the actions necessary toenable them to relay a caller’sAutomatic Number Identification (ANI)and the location of the base station orcell site receiving a 911 call to thedesignated PSAP. Not later than 18months after the effective date of therules adopted in this R&O, such carriersmust have completed these actions.These capabilities will allow the PSAPattendant to call back if the 911 call isdisconnected.

6. Under Phase II, not later than fiveyears after the effective date of the rulesadopted in this proceeding, coveredcarriers are required to achieve thecapability to identify the latitude andlongitude of a mobile unit making a 911call, within a radius of no more than125 meters in 67 percent of all cases.

7. The E911 (Phase I and Phase II)requirements imposed upon coveredcarriers in the Order shall apply only if(1) a carrier receives a request for suchE911 services from the administrator ofa PSAP that is capable of receiving andutilizing the data elements associatedwith the services; and (2) a mechanismfor the recovery of costs relating to theprovision of such services is in place. Ifthe carrier receives a request less than6 months before the implementationdates of Phase I and Phase II, then itmust comply with the Phase I and PhaseII requirements within 6 months afterthe receipt of the notice specifying therequest.

8. Covered carriers, in coordinationwith the public safety organizations, arealso directed to resolve certain E911implementation issues, including gradeof service and interface standards,through industry consensus inconjunction with standard-settingbodies.

Final Regulatory Flexibility Analysis9. As required by Section 603 of the

Regulatory Flexibility Act, 5 U.S.C. 603(RFA), an Initial Regulatory Flexibility

Analysis (IRFA) was incorporated in theNotice. The Commission sought writtenpublic comments on the proposals inthe Notice, including on the IRFA. TheCommission’s Final RegulatoryFlexibility Analysis (FRFA) in thisOrder conforms to the RFA, as amendedby the Contract With AmericaAdvancement Act of 1996, Public LawNo. 104–121, 110 Stat. 847 (1996)(CWAAA).3

I. Need For and Objective of the Rules10. This Report and Order adopts

policies concerning the operation of 911and enhanced 911 (E911) emergencycalling service and the servicesprovided by cellular, broadbandpersonal communications services(PCS), and geographic area specializedmobile radio (SMR) licensees.Commenters responding to the Notice inthis proceeding have identified anumber of ways in which 911 and E911might be available through the use ofwireless telephones, and have indicatedthat more widely available 911 andE911 services will save lives andproperty. Commenters also haveindicated that various enhancements towireless 911 service, such as the abilityof the carrier to provide precise callerlocation information to the public safetyanswering point administrators, wouldmake significant contributions to theeffectiveness of wireless 911 services.

11. We find that the benefit ofproviding for more widely available andmore effective 911 and E911 services forusers of wireless telephones exceed anynegative effects that may result from thepromulgation of rules for this purpose.Thus, we conclude that the publicinterest is served by requiring thatwireless telephones operate effectivelywith E911 systems.

II. Summary of Issues Raised by thePublic Comments In Response to theInitial Regulatory Flexibility Analysis

12. No comments were submitted indirect response to the Initial RegulatoryFlexibility Analysis. In generalcomments on the Notice, however, anumber of commenters raised issuesthat might affect small entities. Most ofthe wireless industry supportedexemption for site-specific SpecializedMobile Radio (SMR) licensees due totheir limited interconnection with thepublic switched network. Rural cellularproviders argued that they should beexempted from E911 requirementsbecause of the high expense in lowdensity markets, as well as the lack of

emergency service provider capabilitiesin such markets.

III. Projected Reporting, Recordkeepingand Other Compliance Requirements ofthe Rule

13. There are no general reporting orrecordkeeping requirements. There are,however, requirements for a group oftrade and consumer organizations toreport to the Commission on the statusof industry discussions of technicalstandards and other implementationissues. We assume that these reportswill be prepared by the professionalstaff of these associations, and we donot intend to impose any unnecessaryburdens or costs on the entities involvedin the preparation and submission of thereports. The rule will require cellular,broadband PCS, and geographic areaSMR licensees to upgrade theirequipment so that:

(1) 911 calls from wireless mobilehandsets which transmit a codeidentification will be transmittedwithout delay or credit verification.

(2) 911 calls from any mobile handsetwill be transmitted without delay orcredit verification to any emergencyservice provider who requests that theybe transmitted.

(3) 911 calls may be transmitted byspeech or hearing impaired individualsthrough Text Telephone Devices.

(4) Emergency service providers willbe enabled to call back 911 calls whichare disconnected.

(5) Emergency service providers willbe sent the location of the 911 callerwithin a radius of 125 meters bylongitude and latitude in 67 percent ofall cases.

14. These upgrades will requireengineering and construction work onswitches, protocols, and networkarchitectures. We recognize that fullimplementation of wireless E911 willincur additional expenses. However, wehave found that E911 service to be inthe public interest and that theserelatively fixed costs will be spread overa widening base of subscribers aswireless subscribership grows, loweringunit costs per subscriber.

IV. Description and Estimate of SmallEntities Subject to the Rules

15. The rule adopted in this Reportand Order will apply to providers ofcellular, broadband PCS, and geographicarea 800 MHz and 900 MHz SpecializedMobile Radio (SMR) services, includinglicensees who have obtained extendedimplementation authorizations in the800 MHz or 900 MHz SMR services,either by waiver or under Section90.629 of the Commission’s Rules.However, the rule will apply to SMR


4 13 CFR § 121.201, Standard IndustrialClassification (SIC) Code 4812.

5 U. S. Small Business Administration 1992Economic Census Employment Report, Bureau ofthe Census, U.S. Department of Commerce, SICCode 4812 (radiotelephone communicationsindustry data adopted by the SBA Office ofAdvocacy).

6 U.S. Bureau of the Census, U.S. Department ofCommerce, 1992 Census of Transportation,Communications, and Utilities, UC92–S–1, SubjectSeries, Establishment and Firm Size, Table 5,Employment Size of Firms: 1992, SIC Code 4812(issued May 1995).

7 See Implementation of Section 309(j) of theCommunications Act—Competitive Bidding, PPDocket No. 93–253, Fifth Report and Order, 9 FCCRcd 5532, 5581–84 (1994).

8 See Amendment of Parts 2 and 90 of theCommission’s Rules to Provide for the Use of 200Channels Outside the Designated Filing Areas inthe 896–901 MHz and the 935–940 MHz BandsAllotted to the Specialized Mobile Radio Pool, PRDocket No. 89–583, Second Order onReconsideration and Seventh Report and Order, 11FCC Rcd 2639, 2693–702 (1995); Amendment ofPart 90 of the Commission’s Rules to FacilitateFuture Development of SMR Systems in the 800MHz Frequency Band, PR Docket No. 93–144, FirstReport and Order, Eighth Report and Order, andSecond Further Notice of Proposed Rulemaking, 11FCC Rcd 1463 (1995).

licensees only if they offer real-time,two-way voice service that isinterconnected with the public switchednetwork.

a. Estimates for Cellular Licensees16. The Commission has not

developed a definition of small entitiesapplicable to cellular licensees.Therefore, the applicable definition ofsmall entity is the definition under theSmall Business Administration (SBA)rules applicable to radiotelephonecompanies. This definition providesthat a small entity is a radiotelephonecompany employing fewer than 1,500persons.4 Since the RegulatoryFlexibility Act amendments were not ineffect until the record in this proceedingwas closed, the Commission was unableto request information regarding thenumber of small cellular businesses andis unable at this time to make a preciseestimate of the number of cellular firmswhich are small businesses.

17. The size data provided by the SBAdoes not enable us to make a meaningfulestimate of the number of cellularproviders which are small entitiesbecause it combines all radiotelephonecompanies with 500 or moreemployees.5 We therefore used the 1992Census of Transportation,Communications, and Utilities,conducted by the Bureau of the Census,which is the most recent informationavailable. That census shows that only12 radiotelephone firms out of a total of1,178 such firms which operated during1992 had 1,000 or more employees.6Therefore, even if all 12 of these largefirms were cellular telephonecompanies, all of the remainder weresmall businesses under the SBA’sdefinition. We assume that, for purposesof our evaluations and conclusions inthe Final Regulatory FlexibilityAnalysis, all of the current cellularlicensees are small entities, as that termis defined by the SBA. Although thereare 1,758 cellular licenses, we do notknow the number of cellular licensees,since a cellular licensee may ownseveral licenses.

18. We assume that all of the currentrural cellular licensees are small

businesses. Comments filed by smallbusiness associations, the Organizationfor the Protection and Advancement ofSmall Telephone Companies(OPASTCO), state that 2⁄3 of its 440members provide cellular service, andcomments filed by the Rural CellularAssociation (RCA) state that itsmembers serve 80 cellular service areas.We recognize that these numbersrepresent only part of the current ruralcellular licensees because there mightbe other rural companies notrepresented by either association.

b. Estimates for Broadband PCSLicensees

19. The broadband PCS spectrum isdivided into six frequency blocksdesignated A through F. Pursuant to 47CFR § 24.720(b), the Commission hasdefined ‘‘small entity’’ for Blocks C andF licensees as firms that had averagegross revenues of less than $40 millionin the three previous calendar years.This regulation defining ‘‘small entity’’in the context of broadband PCSauctions has been approved by theSBA.7

20. The Commission has auctionedbroadband PCS licenses in Blocks A, B,and C. We do not have sufficient datato determine how many smallbusinesses under the Commission’sdefinition bid successfully for licensesin Blocks A and B. As of now, there are90 non-defaulting winning bidders thatqualify as small entities in the Block Cauction. Based on this information, weconclude that the number of broadbandPCS licensees affected by the ruleadopted in this Report and Orderincludes the 90 non-defaulting winningbidders that qualify as small entities inthe Block C broadband PCS auction.

21. At present, no licenses have beenawarded for Blocks D, E, and F forspectrum. Therefore, there are no smallbusinesses currently providing theseservices. However, a total of 1,479licenses will be awarded in the D, E,and F Block broadband PCS auctions,which are scheduled to begin on August26, 1996. Eligibility for the 493 F Blocklicensees is limited to ‘‘entrepreneur’’with the average gross revenues of lessthan $125 million. However, we cannotestimate how many small businessesunder the Commission’s definition willwin F Block licensees, or D and E Blocklicensees. Given the facts that nearly allradiotelephone companies have fewerthan 1,000 employees and that noreliable estimate of the number of

prospective D, E, and F Block licenseescan be made, we assume, for purposesof our evaluations and conclusions inthis FRFA, that all of the licenses willbe awarded to small entities, as thatterm is defined by the SBA.

c. Estimates for SMR Licensees22. Pursuant to 47 C.F.R. 90.814(b)(1),

the Commission has defined ‘‘smallentity’’ for geographic area 800 MHz and900 MHz SMR licenses as firms that hadaverage gross revenues of less than $15million in the three previous calendaryears. This regulation defining ‘‘smallentity’’ in the context of 800 MHz and900 MHz SMR has been approved by theSBA.8

23. The rule adopted in this Reportand Order applies to SMR providers inthe 800 MHz and 900 MHz bands thateither hold geographic area licenses orhave obtained extended implementationauthorizations. We do not know howmany firms provide 800 MHz or 900MHz geographic area SMR servicepursuant to extended implementationauthorizations, nor how many of theseproviders have annual revenues of lessthan $15 million. Since the RegulatoryFlexibility Act amendments were not ineffect until the record in this proceedingwas closed, the Commission was unableto request information regarding thenumber of small businesses in thiscategory. We do know that one of thesefirms has over $15 million in revenues.We assume, for purposes of ourevaluations and conclusions in thisFRFA, that all of the remaining existingextended implementationauthorizations are held by smallentities, as that term is defined by theSBA.

24. The Commission recently heldauctions for geographic area licenses inthe 900 MHz SMR band. There were 60winning bidders who qualified as smallentities under the Commission’sdefinition in the 900 MHz auction.Based on this information, we concludethat the number of geographic area SMRlicensees affected by the rule adopted inthis Report and Order includes these 60small entities.

25. No auctions have been held for800 MHz geographic area SMR licenses.


Therefore, no small entities currentlyhold these licenses. A total of 525licenses will be awarded for the upper200 channels in the 800 MHzgeographic area SMR auction. However,the Commission has not yet determinedhow many licenses will be awarded forthe lower 230 channels in the 800 MHzgeographic area SMR auction. There isno basis to estimate, moreover, howmany small entities within the SBA’sdefinition will win these licenses. Giventhe facts that nearly all radiotelephonecompanies have fewer than 1,000employees and that no reliable estimateof the number of prospective 800 MHzlicensees can be made, we assume, forpurposes of our evaluations andconclusions in this FRFA, that all of thelicenses will be awarded to smallentities, as that term is defined by theSBA.

V. Steps Taken To Minimize theBurdens on Small Entities

26. The Commission in thisproceeding has considered commentson ways of achieving wider 911availability and E911 compatibility withwireless telephone services. In doing so,the Commission has adoptedalternatives which minimize burdensplaced on small entities. First, it haslimited the regulations to mass markettwo-way voice services. In doing so, itexcluded small local specialized mobileservices which provide mainly dispatchservices and do not provide the massmarket services which most users relyon to send 911 calls. It has alsoexcluded mobile satellite systems.Second, it provided for waivers forsmall rural cellular carriers, and alsoprovided that most services would notbe required unless specificallyrequested by the local emergencyservice providers. Third, it has takenindustry concerns into account bybasing the schedule for implementingE911 on that recommended by theConsensus Agreement between theCellular Telephone Industry Associationand public safety organizations, whichdoes not require caller locationinformation until five years after therules adopted in the Order becomeeffective. Finally, it has made the E911requirements conditional on (1) arequest by a local emergency serviceprovider that is capable of receiving andusing the information; and (2) amechanism for the recovery of costsrelating to the provision of the service.Therefore, the burden on small entitieswill be offset by the requirement that acost recovery mechanism will be inplace before their E911 obligations needto be implemented.

VI. Significant Alternatives Consideredand Rejected

27. The Commission rejected thealternative proposal that the rulesshould be applicable to all providers ofCommercial Mobile voice servicesbecause not all CMRS services are massmarket voice services whose usersexpect to be able to use them to call 911.Specifically, the Commission found thatthe costs of requiring local SMR servicesto comply with the rules wouldoutweigh the benefits and application ofthe rules to them, and would give theman incentive to eliminate theirinterconnection to the public network,which would not be in the publicinterest. The Commission did notexempt rural cellular carriers from theserequirements, as requested by some ofcommenters, but instead provided forwaivers. The Consensus Agreementbetween the Cellular TelephoneIndustry Association and public safetyorganizations indicated that thesignatories would work with ruralcellular carriers to resolve theirproblems in good faith, and that theissue of how such carriers would betreated need not delay the final rule,which would be required in the publicinterest. Instead, reviewing the need forapplying the rules to rural cellularcarriers could be reviewed on anindividualized basis. Moreover, theCommission relied on therepresentations that many emergencyservice providers do not use 911 in ruralareas, so that the requirement that theemergency service providers wouldhave to request and be capable ofreceiving and using the E911 serviceswould protect carriers from theobligation to provide unneeded services.Further, the requirement that there be acost recovery mechanism would protectsmall carriers from having to absorbexcessive costs.

28. The Commission rejectedproposals to delay the provision of theupgrades necessary to expand theavailability of 911 and the accuracy oflocation technology because theseupgrades will result in saving lives andproperty and because the requirementsof the rules were included in theConsensus Agreement. We rejected theargument that imposing 911 availabilityrequirements on wireless carriers wouldcompetitively disadvantage wirelesscarriers, since several wireless carriershave been voluntarily transmitting 911calls without a validation requirement.Moreover, the Commission rejectedproposals that Federal grade of serviceand other standards should bedeveloped by the Commission, andinstead determined that parties should

be allowed to develop standards withmonitoring by the Commission, sincethese issues require a level of expertisewhich can best be achieved by intra-industry discussions.

VII. Report to Congress

29. The Commission shall send a copyof this Final Regulatory FlexibilityAnalysis along with this Order in areport to Congress pursuant of the SmallBusiness Regulatory EnforcementFairness Act of 1996, codified at 5U.S.C. Section 801(a)(1)(A). A copy ofthis RFA will also be published in theFederal Register.

Ordering Clauses

30. Accordingly, it is ordered that therule amendments specified below shallbecome effective October 1, 1996.

31. It is further ordered That thePetition of the Ad Hoc Alliance forPublic Access to 911 is granted in part,as set forth in the text of the Order.

32. It is further ordered That thesignatories to the Consensus Agreement,the Personal Communications IndustryAssociation, and the Ad Hoc Alliancefor Public Access to 911 file joint annualreports within 30 days after the end ofeach calendar year, as set forth in thetext of this Order.

33. It is further ordered That thesignatories to the Consensus Agreement,the Personal Communications IndustryAssociation, and Telecommunicationsfor the Deaf, Inc. file a joint reportwithin one year of the effective date ofthe rules adopted herein, as set forth inthe text of the Order.

34. This action is taken pursuant toSections 1, 4(i), 201, 208, 215, 303, and309 of the Communications Act of 1934,as amended, 47 U.S.C. 151, 154(i), 201,208, 215, 303, 309.


Communications common carriers,Federal Communications Commission.Federal Communications Commission.William F. Caton,Acting Secretary.

Rule Changes

Part 20 of Title 47 of the Code ofFederal Regulations is amended asfollows:

PART 20—COMMERCIAL MOBILERADIO SERVICES


Authority: Sections 4, 303 and 332, 48 Stat.1066, 1082, as amended; 47 U.S.C. 154, 303,and 332.


2. Section 20.03 is amended byadding the following definitions inalphabetical order to read as follows:

§ 20.3 Definitions.Automatic Number Identification. A

system which permits the identificationof the caller’s telephone number.* * * * *

Code Identification. A MobileIdentification Number for calls carriedover the facilities of a cellular orBroadband PCS licensees, or thefunctional equivalent of a MobileIdentification Number in the case ofcalls carried over the facilities of aSpecialized Mobile Radio Services.* * * * *

Mobile Identification Number. A 34-bit number that is a digitalrepresentation of the 10-digit directorytelephone number assigned to a mobilestation.* * * * *

Pseudo Automatic NumberIdentification. A system whichidentifies the location of the base stationor cell site through which a mobile calloriginates.

Public Safety Answering Point. Apoint that has been designated toreceive 911 calls and route them toemergency service personnel.* * * * *

3. Section 20.18 is added to read asfollows:

§ 20.18 911 Service.(a) The following requirements are

only applicable to Broadband PersonalCommunications Services (part 24,subpart E of this chapter) and CellularRadio Telephone Service (part 22,subpart H of this chapter), GeographicArea Specialized Mobile Radio Servicesin the 800 MHz and 900 MHz bands(included in part 90, subpart S of thischapter) and offer real-time, two-wayvoice service that is interconnected withthe public switched network, andIncumbent Wide Area SMR Licensees.

(b) As of October 1, 1997, licenseessubject to this section must process all911 calls which transmit a CodeIdentification and must process all 911wireless calls which do not transmit aCode Identification where requested bythe administrator of the designatedPublic Safety Answering Point which iscapable of receiving and utilizing thedata elements associated with 911service.

(c) As of October 1, 1997, licenseessubject to this section must be capableof transmitting 911 calls fromindividuals with speech or hearingdisabilities through means other thanmobile radio handsets, e.g., through theuse of Text Telephone Devices.

(d) As of April 1, 1998, licenseessubject to this section must relay thetelephone number of the originator of a911 call and the location of the cell siteor base station receiving a 911 call fromany mobile handset or text telephonedevice accessing their systems to thedesignated Public Service AnsweringPoint through the use of PseudoAutomatic Number Identification andAutomatic Number Identification.

(e) As of October 1, 2001, licenseessubject to this section must provide tothe designated Public ServiceAnswering Point the location of a 911call by longitude and latitude within aradius of 125 meters using root meansquare techniques.

(f) The requirements set forth inparagraphs (d) and (e) of this sectionshall be applicable only if theadministrator of the designated PublicService Answering Point has requestedthe services required under thoseparagraphs and is capable of receivingand utilizing the data elementsassociated with the service, and amechanism for recovering the costs ofthe service is in place.

[FR Doc. 96–19662 Filed 8–1–96; 8:45 am]BILLING CODE 6712–01–P

DEPARTMENT OF COMMERCE

National Oceanic and AtmosphericAdministration

50 CFR Part 285

[I.D. 072996C]

Atlantic Tuna Fisheries; Closure

AGENCY: National Marine FisheriesService (NMFS), National Oceanic andAtmospheric Administration (NOAA),Commerce.ACTION: Fishery closure.

SUMMARY: NMFS closes the Anglingcategory fishery for large school andsmall medium Atlantic bluefin tuna(ABT). Closure of this fishery isnecessary because the annual quota of100 metric tons (mt) of large school andsmall medium ABT allocated to theAngling category is projected to beattained by July 31, 1996. The intent ofthis action is to prevent overharvest ofthe quota established for this fishery.EFFECTIVE DATE: The closure is effectivefrom 2330 hours local time July 31through December 31, 1996.FOR FURTHER INFORMATION CONTACT: BillHogarth, 301–713–2347.SUPPLEMENTARY INFORMATION:Regulations implemented under theauthority of the Atlantic Tunas

Convention Act (16 U.S.C. 971 et seq.)governing the harvest of ABT by personsand vessels subject to U.S. jurisdictionare found at 50 CFR part 285.

Implementing regulations for theAtlantic tuna fisheries at 50 CFR 285.22provide for a total annual quota of largeschool and small medium ABT(measuring between 47 inches (119 cm)and 73 inches (185 cm) total curved forklength) to be harvested from theregulatory area. The AssistantAdministrator for Fisheries, NOAA(AA), is authorized under § 285.20(b)(1)to monitor the catch and landingstatistics and, on the basis of thosestatistics, to project a date when thecatch of ABT will equal any quota under§ 285.22. The AA is further authorizedunder § 285.20(b)(1) to prohibit fishingfor, or retention of, ABT by those fishingin the category subject to the quotawhen the catch of tuna equals the quotaestablished under § 285.22. The AA hasdetermined, based on the reported catchand estimated fishing effort, that theannual quota of large school and smallmedium ABT will be attained by July31, 1996. Fishing for, catching,possessing, or landing any large schoolor small medium ABT must cease by2330 hours local time on July 31, 1996.

However, anglers may continue to fishfor ABT 47 inches (119 cm) or greaterunder the NMFS tag and releaseprogram (50 CFR 285.27). The Anglingcategory fishery for school ABT(measuring between 27 inches (69 cm)and 47 inches (119 cm)) in the watersoff Delaware and south was previouslyclosed on July 25, 1996 (61 FR 38656,July 25, 1996). The Angling categoryfishery for school ABT for waters offNew Jersey and states north (north of38°47′ N. lat.) is not affected by thisclosure, and continues to remain open.

Classification

This action is taken under 50 CFR285.20(b) and 50 CFR 285.22 and isexempt from review under E.O. 12866.

Authority: 16 U.S.C. 971 et seq.

Dated: July 29, 1996.Richard W. Surdi,Acting Director, Office of FisheriesConservation and Management, NationalMarine Fisheries Service.[FR Doc. 96–19635 Filed 7–29–96; 5:02 pm]BILLING CODE 3510–22–F


50 CFR Part 679

[Docket No. 960129018–6018–01; I.D.072696B]

Groundfish of the Gulf of Alaska;‘‘Other Rockfish’’ Species Group in theEastern Regulatory Area

AGENCY: National Marine FisheriesService (NMFS), National Oceanic andAtmospheric Administration (NOAA),Commerce.ACTION: Modification of a closure.

SUMMARY: NMFS is opening the directedfishery for the ‘‘other rockfish’’ speciesgroup in the Eastern Regulatory Area ofthe Gulf of Alaska (GOA). This action isnecessary to fully utilize the totalallowable catch (TAC) of the ‘‘otherrockfish’’ in that area.EFFECTIVE DATE: 1200 hours, Alaskalocal time (A.l.t.), July 31, 1996, until2400 hours, A.l.t., December 31, 1996.FOR FURTHER INFORMATION CONTACT:Andrew Smoker, 907–586-7228.SUPPLEMENTARY INFORMATION: Thegroundfish fishery in the GOA exclusiveeconomic zone is managed by NMFSaccording to the Fishery ManagementPlan for Groundfish of the Gulf ofAlaska (FMP) prepared by the NorthPacific Fishery Management Councilunder authority of the MagnusonFishery Conservation and ManagementAct. Fishing by U.S. vessels is governedby regulations implementing the FMP atSubpart H of 50 CFR part 600 and 50CFR part 679.

The annual TAC for the ‘‘otherrockfish’’ species group in the EasternRegulatory Area of the GOA, wasestablished by the Final 1996 HarvestSpecifications of Groundfish (61 FR4304, February 5, 1996) as 750 metrictons (mt) (see § 679.20(c)(3)(ii)). TheFinal 1996 Harvest Specifications ofGroundfish also closed the directedfishery for the ‘‘other rockfish’’ in theEastern Regulatory Area of the GOA (see§ 679.20(d)(1)(iii)) in anticipation thatthe TAC would be needed as incidentalcatch to support other anticipatedgroundfish fisheries during 1996. NMFShas determined that as of July 13, 1996,700 mt remain in the directed fishingallowance.

The Director, Alaska Region, NMFS,has determined that the 1996 directedfishing allowance of the ‘‘other

rockfish’’ species group in the EasternRegulatory Area of the GOA has notbeen reached. Therefore, NMFS isterminating the previous closure and isopening directed fishing for the ‘‘otherrockfish’’ species group in the EasternRegulatory Area of the GOA.

All other closures remain in full forceand effect.

ClassificationThis action is taken under § 679.20

and is exempt from review under E.O.12866.


Dated: July 29, 1996.Richard W. Surdi,Acting Director, Office of FisheriesConservation and Management, NationalMarine Fisheries Serivce.[FR Doc. 96–19686 Filed 7–30–96; 12:40 pm]BILLING CODE 3510–22–F

50 CFR Part 679

[Docket No. 960129019–6019–01; I.D.072696A]

Groundfish of the Bering Sea andAleutian Islands Area; Atka Mackerel inthe Central and Eastern AleutianDistrict and the Bering Sea Subarea

AGENCY: National Marine FisheriesService (NMFS), National Oceanic andAtmospheric Administration (NOAA),Commerce.ACTION: Modification of a closure.

SUMMARY: NMFS is opening directedfishing for Atka mackerel in the Centraland Eastern Aleutian District and theBering Sea subarea of the Bering Seaand Aleutian Islands management area(BSAI). This action is necessary to fullyutilize the total allowable catch (TAC) ofAtka mackerel in these areas.EFFECTIVE DATE: 1200 hours, Alaskalocal time (A.l.t.), July 31, 1996, until2400 hours, A.l.t., December 31, 1996.FOR FURTHER INFORMATION CONTACT:Andrew N. Smoker, 907 586-7228.SUPPLEMENTARY INFORMATION: Thegroundfish fishery in the BSAI exclusiveeconomic zone is managed by NMFSaccording to the Fishery ManagementPlan for the Groundfish Fishery of theBering Sea and Aleutian Islands Area(FMP) prepared by the North PacificFishery Management Council under

authority of the Magnuson FisheryConservation and Management Act.Fishing by U.S. vessels is governed byregulations implementing the FMP at 50CFR parts 600 and 679.

The Final 1996 Harvest Specificationsof Groundfish (61 FR 4311, February 5,1996) for the BSAI (see§ 679.20(c)(3)(iii)) and subsequentreserve apportionment (61 FR 16085,April 11, 1996) established 33,600metric tons (mt) as the TAC of Atkamackerel for the Central AleutianDistrict and 26,700 mt as the TAC forthe Eastern Aleutian District and theBering Sea subarea, respectively.

The directed fisheries for Atkamackerel for the Central AleutianDistrict (61 FR 16883, April 18, 1996; 61FR 37403, July 18, 1996) and the EasternAleutian District and the Bering Seasubarea (61 FR 6323, February 20, 1996;61 FR 36306, July 10, 1996) were closedto directed fishing in order to reserveamounts anticipated to be needed forincidental catch in other fisheries (see§ 679.20(d)(1)). NMFS has determinedthat as of July 13, 1996, 1,000 mt in theCentral Aleutian District and 800 mt inthe Eastern Aleutian District and BeringSea subarea remain in the respectivedirected fishing allowances.

The Director, Alaska Region, NMFS,has determined that the 1996 directedfishing allowances for Atka mackerel inthe Central Aleutian District and EasternAleutian District and the Bering Seasubarea have not been reached.Therefore, NMFS is terminating theprevious closures and is reopeningdirected fishing for Atka mackerel in theCentral Aleutian District and EasternAleutian District and the Bering Seasubarea.

All other closures remain in full forceand effect.

Classification

This action is taken under § 679.20and is exempt from review under E.O.12866.


Dated: July 29, 1996.Richard W. Surdi,Acting Director, Office of FisheriesConservation and Management, NationalMarine Fisheries Service.[FR Doc. 96–19685 Filed 7–30–96; 12:40 pm]BILLING CODE 3510–22–F

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

40354

Vol. 61, No. 150



Animal and Plant Health InspectionService

7 CFR Part 301

[Docket No. 96–016–10]

Karnal Bunt

AGENCY: Animal and Plant HealthInspection Service, USDA.

ACTION: Proposed rule.

SUMMARY: We are proposing to establishcriteria for levels of risk for areas withregard to Karnal bunt, and to establishcriteria for seed planting and movementof regulated articles based on those risklevels. We believe this action iswarranted because it would relieveunnecessary restrictions on areasregulated because of Karnal bunt, whileguarding against the artificial spread ofthat disease.

DATES: Consideration will be given onlyto comments received on or beforeSeptember 3, 1996.

ADDRESSES: Please send an original andthree copies of your comments toDocket No. 96–016–10, RegulatoryAnalysis and Development, PPD,APHIS, suite 3C03, 4700 River RoadUnit 118, Riverdale, MD 20737–1238.Please state that your comments refer toDocket No. 96–016–10. Commentsreceived may be inspected at USDA,room 1141, South Building, 14th Streetand Independence Avenue SW.,Washington, DC, between 8 a.m. and4:30 p.m., Monday through Friday,except holidays. Persons wishing toinspect comments are requested to callahead on (202) 690–2817 to facilitateentry into the comment reading room.

FOR FURTHER INFORMATION CONTACT: Mr.Mike Stefan, Operations Officer,Domestic and Emergency Operations,PPQ, APHIS, 4700 River Road Unit 134,Riverdale, MD 20737–1236, (301) 734–8247.


BackgroundKarnal bunt is a serious fungal disease

of wheat (Triticum aestivum), durumwheat (Triticum durum), and triticale(Triticum aestivum X Secale cereale), ahybrid of wheat and rye. Karnal bunt iscaused by the smut fungus Tilletiaindica (Mitra) Mundkur and is spreadby spores. The spores can be carried ona variety of surfaces, including plantsand plant parts, seeds, soil, elevators,buildings, farm equipment, tools, andeven vehicles. Spores and the sporidiathey produce also can be windborne.Although the sporidia are fragile andmay be able to move only shortdistances, teliospores are thought tomove longer distances.

Karnal bunt is a serious disease thatcan affect both yield and grain qualitywhen present at levels over 3 to 5percent. It adversely affects the color,odor, and palatability of flour and otherfoodstuffs made from heavily infestedwheat. Wheat containing a significantamount of bunted kernels is reduced inquality. Karnal bunt does not present arisk to human or animal health.

On March 8, 1996, Karnal bunt wasdetected in Arizona during a seedcertification inspection done by theArizona Department of Agriculture. OnMarch 20, 1996, the Secretary ofAgriculture signed a ‘‘Declaration ofExtraordinary Emergency’’ authorizingthe Secretary to take emergency actionunder 7 U.S.C. 150dd with regard toKarnal bunt within the States ofArizona, New Mexico, and Texas. In aninterim rule effective on March 25,1996, and published in the FederalRegister on March 28, 1996 (61 FR13649–13655, Docket No. 96–016–3),the Animal and Plant Health InspectionService (APHIS) established the Karnalbunt regulations (7 CFR 301.89–1through 301.89–11), and quarantined allof Arizona and portions of New Mexicoand Texas because of Karnal bunt. Theregulations define regulated articles andrestrict the interstate movement of theseregulated articles from the quarantinedareas.

After the establishment of theregulations, Karnal bunt was detected inlots of seed that were either planted orstored in certain areas in California. OnApril 12, 1996, the Secretary ofAgriculture signed a ‘‘Declaration ofExtraordinary Emergency’’ authorizingthe Secretary to take emergency action

under 7 U.S.C. 150dd with regard toKarnal bunt within California. In aninterim rule effective on April 19, 1996,and published in the Federal Registeron April 25, 1996, APHIS alsoquarantined portions of Californiabecause of Karnal bunt (61 FR 18233–18235, Docket No. 96–016–5). In aninterim rule effective on June 27, 1996,and published in the Federal Registeron July 5, 1996, APHIS removed certainareas in Arizona, New Mexico, andTexas from the list of areas quarantinedbecause of Karnal bunt (61 FR 35107–35109, Docket No. 96–016–6). That listwas amended in a technical amendmenteffective on July 9, 1996, and publishedin the Federal Register on July 15, 1996(61 FR 36812–36813, Docket No. 96–016–8). In an interim rule effective June27, 1996, and published in the FederalRegister on July 5, 1996, APHISamended the regulations to providecompensation for certain growers andhandlers, owners of grain storagefacilities, and flour millers in order tomitigate losses and expenses incurredbecause of Karnal bunt (61 FR 35102–35107, Docket No. 96–016–7).Comments on each of the interim rulesmust be received on or beforeSeptember 3, 1996.

On July 17, 1996, APHIS conducted apublic forum in Washington, D.C., toaccept public comment on the Karnalbunt regulations, and, in a separatenotice in today’s Federal Register, givesnotice of three additional public forumson Karnal Bunt to be held in mid-August. Members of the public areinvited to comment on this proposedrule and the interim rules at the threeremaining public forums.

APHIS developed the provisions ofthis proposed rule in consultation withState regulatory officials. The purpose ofthis proposal is to relieve unnecessaryrestrictions on the movement of articlesregulated because of Karnal bunt, whileat the same time maintainingrestrictions on movement that areadequate to guard against the spread ofthe disease.

In § 301.89–3 of the existingregulations, criteria for quarantiningareas because of Karnal bunt are setforth, along with a list of quarantinedareas. Under the existing regulations,regulated articles from all quarantinedareas are subject to the samerestrictions, regardless of the relative

40355Federal Register / Vol. 61, No. 150 / Friday, August 2, 1996 / Proposed Rules

1 The 1996–1997 crop season is that season inwhich wheat is harvested in 1997.

risks posed by different fields within thequarantined areas.

We considered such broad restrictionsnecessary immediately following thedetection of Karnal bunt, in order toguard against the artificial spread of thedisease. However, based on subsequentinformation, including preharvestsurvey data, investigations of the sourceand destination of contaminated seed,and our experience enforcing theregulations, we believe that establishinglevels of risk for fields and regulatedarticles is warranted, and would beadequate in protecting against theartificial spread of Karnal bunt.

In the existing Karnal buntregulations, areas regulated because ofKarnal bunt are referred to asquarantined areas. Under this proposal,however, the type of restrictionsimposed on regulated articles would insome cases differ depending on the risklevel of individual areas within thecurrently quarantined areas. Therefore,we believe it would clarify the proposedregulations to use the term ‘‘regulatedareas’’ rather than ‘‘quarantined areas.’’Regulated areas would then be classifiedaccording to specific risk categories. Weare proposing to make this terminologychange throughout the Karnal buntregulations.

The current regulations in § 301.89–3set forth criteria for quarantining all orpart of State due to Karnal bunt, and listthose areas that are quarantined becauseof the disease. In addition to retainingthe general criteria in the currentregulations for regulating a State or partof a State, we are proposing to add anew paragraph (f) to § 301.89–3 thatwould set forth criteria for classifyingregulated fields according to thefollowing risk categories:

1. Fields in which preharvest samplestested positive for Karnal bunt;

2. Fields known to be planted in thepast 5 years with seed contaminatedwith Karnal bunt;

3. Fields adjacent to fields in whichpreharvest samples tested positive;

4. Fields associated only throughownership, management, the movementof equipment, or proximity within adistinct definable area with fields inwhich preharvest samples testedpositive; and

5. Fields within a regulated area thatare not fields described in ‘‘2’’ or ‘‘4’’above, and that are part of a distinctdefinable area that includes no fields inwhich preharvest samples testedpositive for Karnal bunt.

A definition of distinct definable areawould be added to § 301.89–1 to mean‘‘a commercial wheat production area ofcontiguous fields that is separated fromother wheat production areas by desert,

mountains, or other nonagriculturalterrain as determined by an inspector.’’Additionally, a definition ofcontaminated seed would be added tomean ‘‘seed from sources in which theKarnal bunt pathogen (Tilletia indica(Mitra) Mundkur) has been determinedto exist.’’

Fields for which notification ofclassification has not been given to theowner or the person in possession of thefield shall be considered to be in thesame category as fields associatedthrough ownership, management, themovement of equipment, or proximitywithin a distinct definable area withfields in which preharvest samplestested positive.

Planting

We are proposing to establishrestrictions on the planting of wheat,durum wheat, and triticale seed incertain fields within a regulated area.Because the pathogen of Karnal buntcan remain viable in soil for extendedperiods of time, it is important in thecontrol of the disease to restrict theplanting of wheat, durum wheat, andtriticale in fields that present a high riskof containing the Karnal bunt pathogen.Therefore, we are proposing to add anew § 301.59–4 to the regulations thatwould provide that for the 1996–1997crop season 1 (1) wheat, durum wheat,and triticale may not be planted infields in which preharvest samplesconducted by Federal or State officialtested positive for Karnal bunt, and (2)wheat, durum wheat, and triticale maynot be planted in fields known to havebeen planted in the past 5 years withseed contaminated with Karnal bunt.Additionally, proposed § 301.89–4would require that, prior to planting, theseed of wheat, durum wheat, andtriticale to be planted within a regulatedarea must have been treated with afungicide that is registered with theEnvironmental Protection Agency andbe sampled and tested negative forKarnal bunt.

Cleaning and Disinfection

In § 301.89–12 of this proposed rule,we are proposing to establish cleaningand disinfection requirements for farmequipment and soil-moving equipmentaccording to the risk category of thefield from which the equipment will bemoved. Cleaning would be required forthat equipment moved within theregulated area from fields considered topose a significant risk of containing thecausal agent of Karnal bunt.

Specifically, these would include thefollowing categories of fields:


2. Fields known to be planted in thepast 5 years with seed contaminatedwith Karnal bunt; and

3. Fields adjacent to fields in whichpreharvest samples tested positive.

Under § 301.89–12(b) of this proposal,equipment only from the abovedescribed fields would need to bedisinfected before being moved from aregulated area.

Movement Within a Regulated AreaIn the current regulations, conditions

are set forth in § 301.89–4 for theinterstate movement of regulatedarticles from regulated areas. In somecases, articles moved from a regulatedarea must be accompanied by certificateor limited permit. In other cases,because of mitigating measures, acertificate or limited permit is notrequired. In this proposed rule, we areproposing to establish conditions forcertain movements of regulated articleswithin a regulated area. In § 301.89–5(a)(3) of this proposal, we areproposing that a regulated article neednot be moved with a certificate orlimited permit if it is moved within aregulated area, and if the regulatedarticle has been cleaned as provided in§ 301.89–12 and 301.89–13 of theproposed rule.

VegetablesUnder § 301.89–12(b) of this proposal,

vegetable crops would need to becleaned free of soil and plant debrisprior to movement, or be moved underlimited permit to processing facilitiesapproved by the Administrator whenmoving from any of the following typesof fields:


2. Fields known to be planted in thepast 5 years with seed contaminatedwith Karnal bunt; or

3. Fields adjacent to fields in whichpreharvest samples tested positive.

Treatment of MillfeedMillfeed, a byproduct of the process

of milling grain, is used as feed forlivestock. Teliospores of telletia indicain millfeed are not destroyed in themilling process, nor in the process ofbeing digested by livestock. Therefore,manure from animals that have been fedmillfeed contaminated with thepathogen of Karnal bunt is consideredcapable of introducing that agent to afield. Protocols developed for thecontrol of Karnal bunt have requiredthat millfeed from grain moved

40356 Federal Register / Vol. 61, No. 150 / Friday, August 2, 1996 / Proposed Rules

interstate from a quarantined area betreated with heat to destroy any Karnalbunt pathogen that might be present.However, we believe that millfeed fromgrain from certain fields in regulatedarea poses such an insignificant risk ofspreading Karnal bunt that it need notbe heat treated. Therefore, § 301.89–13(c) requires that millfeed be treatedwith heat only if it is milled from grainfrom one of the following types of fields:

(1) Fields in which preharvestsamples tested positive for Karnal bunt;

(2) Fields known to be planted in thepast 5 years with seed contaminatedwith Karnal bunt;

(3) Fields adjacent to fields in whichpreharvest samples tested positive; or

(4) Fields associated only throughownership, management, the movementof equipment, or proximity within adistinct definable area with fields inwhich preharvest samples testedpositive.

We are proposing millfeed treatedwith heat be treated with a moist heattreatment of 170 °F for at least 1 minute.This treatment is considered effectivebased on the information currentlyavailable to us. The public would benotified in the Federal Register of anychanges to this treatment that aredeveloped through additional research.

Executive Order 12866 and RegulatoryFlexibility Act

This rule has been reviewed underExecutive Order 12866. For this action,the Office of Management and Budgethas waived its review process requiredby Executive Order 12866.

This action amends the regulations toestablish criteria for levels of risk forareas with regard to Karnal bunt, and toestablish criteria for seed planting andmovement of regulated articles based onthose risk levels. This proposed rule isbeing published on an emergency basisin order to give affected growers theopportunity to make planting decisionsfor the 1996–1997 crop season on atimely basis. This emergency situationmakes compliance with section 603 andtimely compliance with section 604 ofthe Regulatory Flexibility Act (5 U.S.C.603 and 604) impracticable. This rulemay have a significant economic impacton a substantial number of smallentities. If we determine this is so, thenwe will discuss the issues raised bysection 604 of the Regulatory FlexibilityAct in our Final Regulatory FlexibilityAnalysis.

Executive Order 12372This program/activity is listed in the

Catalog of Federal Domestic Assistanceunder No. 10.025 and is subject toExecutive Order 12372, which requires

intergovernmental consultation withState and local officials. (See 7 CFR part3015, subpart V.)

Executive Order 12988This proposed rule has been reviewed

under Executive Order 12988, CivilJustice Reform. If this proposed rule isadopted: (1) All State and local laws andregulations that are inconsistent withthis rule will be preempted; (2) noretroactive effect will be given to thisrule; and (3) administrative proceedingswill not be required before parties mayfile suit in court challenging this rule.

Paperwork Reduction ActThis proposed rule contains no new

information collection or recordkeepingrequirements under the PaperworkReduction Act of 1995 (44 U.S.C. 3501et seq.).

List of subjects in 7 CFR Part 301Agricultural commodities, Plant

diseases and pests, Quarantine,Reporting and recordkeepingrequirements, Transportation.

PART 301—DOMESTIC QUARANTINENOTICES

Accordingly, 7 CFR part 301 would beamended as follows:

1. The authority citation for part 301would continue to read as follows:

Authority: 7 U.S.C. 150bb, 150dd, 150ee,150ff, 161, 162, and 164–167; 7 CFR 2.22,2,80, and 371.2(c).

2. Part 301 would be amended byrevising ‘‘Subpart—Karnal Bunt,’’§§ 301.89–1 through 301.89–11, to readas follows

Subpart—Karnal BuntSec.301.89–1 Definitions.301.89–2 Regulated articles.301.89–3 Regulated areas.301.89–4 Planting.301.89–5 Movement of regulated articles

from or within regulated areas.301.89–6 Issuance of a certificate or limited

permit.301.89–7 Compliance agreements.301.89–8 Cancellation of a certificate,

limited permit, or complianceagreement.

301.89–9 Assembly and inspection ofregulated articles.

301.89–10 Attachment and disposition ofcertificates and limited permits.

301.89–11 Costs and charges.301.89–12 Cleaning and disinfection.301.89–13 Treatments.301.89–14 Compensation.

§ 301.89–1 Definitions.Administrator. The Administrator,

Animal and Plant Health InspectionService, or any person authorized to actfor the Administrator.

Animal and Plant Health InspectionService (APHIS). The Animal and PlantHealth Inspection Service of the U.S.Department of Agriculture.

Certificate. A document in which aninspector or a person operating under acompliance agreement affirms that aspecified regulated article meets therequirements of this subpart and may bemoved to any destination.

Compliance agreement. A writtenagreement between APHIS and a personengaged in growing, handling, ormoving regulated articles that aremoved, in which the person agrees tocomply with the provisions of thissubpart and any conditions imposedunder this subpart.

Contaminated seed. Seed fromsources in which the Karnal buntpathogen (Tilletia indica (Mitra)Mundkur) has been determined to exist.

Conveyances. Containers used tomove wheat, durum wheat, or triticale,or their products, including trucks,trailers, railroad cars, bins, and hoppers.

Distinct definable area. A commercialwheat production area of contiguousfields that is separated from other wheatproduction areas by desert, mountains,or other nonagricultural terrain asdetermined by an inspector.

Farm tools. An instrument worked orused by hand, e.g., hoes, rakes, shovels,and axes.

Infestation (infected). The presence ofKarnal bunt, or any stage ofdevelopment of the fungus Tilletiaindica (Mitra) Mundkur, or theexistence of circumstances that make itreasonable to believe that Karnal bunt ispresent.

Inspector. An APHIS employee ordesignated cooperator/collaboratorauthorized by the Administrator toenforce the provisions of this subpart.

Karnal bunt. A plant disease causedby the fungus Tilletia indica (Mitra)Mundkur.

Limited permit. A document in whichan inspector affirms that a specifiedregulated article not eligible for acertificate is eligible for movement onlyto a specified destination and inaccordance with conditions specified onthe permit.

Mechanized cultivating equipmentand mechanized harvesting equipment.Mechanized equipment used for soiltillage, including tillage attachments forfarm tractors—e.g., tractors, disks,plows, harrows, planters, andsubsoilers; mechanized equipment usedfor harvesting purposes—e.g., combines,cotton harvesters, and hay balers.

Milling products and byproducts.Products resulting from processingwheat, durum wheat, or triticale,


including animal feed, and waste anddebris.

Movement (moved). The act ofshipping, transporting, delivering, orreceiving for movement, or otherwiseaiding, abetting, inducing or causing tobe moved.

Person. Any association, company,corporation, firm, individual, joint stockcompany, partnership, society, or anyother legal entity.

Premises. All structures, conveyances,or materials associated with a grainstorage facility at a single location.

Soil. That part of the upper layer ofearth in which plants can grow.

Soil-moving equipment. Equipmentused for moving or transporting soil,including, but not limited to,bulldozers, dump trucks, or roadscrapers.

State. The District of Columbia,Puerto Rico, the Northern MarianaIslands, or any State, territory, orpossession of the United States.

§ 301.89–2 Regulated articles.The following are regulated articles:(a) Conveyances, including trucks,

railroad cars, and other containers usedto move wheat, durum wheat, ortriticale;

(b) Grain elevators/equipment/structures used for storing and handlingwheat, durum wheat, and triticale;

(c) Milling products or byproducts,except flour;

(d) Plants, or plant parts, includinggrain, seed, or straw of all varieties ofthe following species:

Wheat: Triticum aestivum;Durum wheat: Triticum durum; andTriticale: Triticum aestivum X Secale

cereale;(e) Tilletia indica (Mitra) Mundkur;(f) Root crops with soil;(g) Soil from areas where field crops

are produced;(h) Manure from animals that have fed

on wheat, durum wheat, or triticale;(i) Used bags, sacks and containers;(j) Used farm tools;(k) Used mechanized cultivating

equipment;(l) Used mechanized harvesting

equipment;(m) Used seed conditioning

equipment;(n) Used mechanized soil-moving

equipment; and(o) Any other product, article or

means of conveyance when:(1) An inspector determines that it

presents a risk of spreading Karnal buntdue to its proximity to an infestation ofKarnal bunt; and

(2) The person in possession of theproduct, article, or means of conveyancehas been notified that it is regulatedunder this subpart.

§ 301.89–3 Regulated areas.

(a) The Administrator will regulateeach State or each portion of a State thatis infected.

(b) Less than an entire State will belisted as a regulated area only if theAdministrator:

(1)(i) Determines that the State hasadopted and is enforcing restrictions onthe intrastate movement of the regulatedarticles listed in § 301.89–2 that areequivalent to the movement restrictionsimposed by this subpart; and

(ii) Determines that designating lessthan the entire State as a regulated areawill prevent the spread of Karnal bunt;or

(2) Exercises his or her extraordinaryemergency authority under 7 U.S.C.150dd.

(c) The Administrator may includenoninfected acreage within a regulatedarea due to its proximity to aninfestation or inseparability from theinfected locality for regulation purposes,as determined by:

(1) Projections of the spread of Karnalbunt along the periphery of theinfestation;

(2) The availability of natural habitatsand host materials within thenoninfected acreage that are suitable forestablishment and survival of Karnalbunt; and

(3) The necessity of includinguninfected acreage within the regulatedarea in order to establish readilyidentifiable boundaries.

(d) The Administrator or an inspectormay temporarily designate anynonregulated area as a regulated area inaccordance with the criteria specified inparagraphs (a), (b), and (c) of thissection. The Administrator will givewritten notice of this designation to theowner or person in possession of thenonregulated area, or, in the case ofpublicly owned land, to the personresponsible for the management of thenonregulated area. Thereafter, themovement of any regulated article froman area temporarily designated as aregulated area is subject to this subpart.As soon as practicable, this area eitherwill be added to the list of designatedregulated areas in paragraph (e) of thissection, or the Administrator willterminate the designation. The owner orperson in possession of, or, in the caseof publicly owned land, the personresponsible for the management of, anarea for which the designation isterminated will be given written noticeof the termination as soon aspracticable.

(e) The following areas are designatedas regulated areas:

ArizonaCochise County. The entire county.Graham County. The entire county.LaPaz County. The entire county.Maricopa County. The entire county.Mohave County. Beginning at the

intersection of Arizona/Nevada State line andState Route 68; then east along State Route68 to U.S. Highway 93; then southeast alongU.S. Highway 93 to Interstate 40; then eastalong Interstate 40 to U.S. Highway 93; thensouth along U.S. Highway 93 to the Mohave/Yavapai County line; then south along theMohave County line to the Mohave/La PazCounty line; then west along the MohaveCounty line to the Arizona/California Stateline; then north along the State line to thepoint of beginning.

Pima County. Beginning at the intersectionof the Pima County line, the Pinal Countyline, and the Papago Indian Reservationboundary; then east along the Pima Countyline to its easternmost point; then southalong the Pima County line to the Cochiseand Santa Cruz County lines; then west alongthe Pima County line to the United States/Mexico boundary; then west along the UnitedStates/Mexico boundary to the Papago IndianReservation boundary; then north along thePapago Indian Reservation boundary to thepoint of beginning.

Pinal County. The entire county.Yuma County. The entire county.

CaliforniaImperial County. The entire county.Riverside County. That portion of Riverside

County in the Blythe and Ripley areasbounded by a line drawn as follows:Beginning at the intersection of StateHighway 62 and the Riverside-SanBernardino County line, then east along theRiverside-San Bernardino County line to itsintersection with the California-Arizona Stateline; then south along the California-ArizonaState line to its intersection with theRiverside-Imperial County line; then westalong the Riverside-Imperial County line toits intersection with Graham Pass Road; thennortheast along Graham Pass Road to itsintersection with Chuckwalla Valley Road;then west and northwest along ChuckwallaValley Road to its intersection with InterstateHighway 10; then west along InterstateHighway 10 to its intersection with StateHighway 177; then northeast and north alongState Highway 177 to its intersection withState Highway 62; then northeast along StateHighway 62 to the point of beginning.

New Mexico

Dona Ana County. The entire county.Hidalgo County. Beginning at the

intersection of the Arizona/New Mexico Stateline and Interstate 10; then east alongInterstate 10 to the Hidalgo/Grant Countyline; then south and east along the HidalgoCounty line to the Luna County line; thensouth along the Hidalgo County line to itssouthernmost point; then west and northalong the Hidalgo county line to point ofbeginning.

Luna County. Beginning at the intersectionof the Grant/Luna County line and Interstate10; then east along Interstate 10 to U.S.Highway 180; then north along U.S. Highway


1 The 1996–1997 crop season is that season inwhich wheat is harvested in 1997.

2 Criteria that laboratories must meet to becomeapproved to process, test, or analyze soil, and thelist of currently approved laboratories, may be

obtained from the Animal and Plant HealthInspection Service, Plant Protection andQuarantine, Domestic and Emergency Operations,4700 River Road Unit 134, Riverdale, Maryland20737–1236.

3 Inspectors are assigned to local offices of APHIS,which are listed in local telephone directories.Information concerning such local offices may alsobe obtained from the Animal and Plant HealthInspection Service, Plant Protection andQuarantine, Domestic and Emergency Operations,4700 River Road Unit 134, Riverdale, Maryland20737–1236, or from Karnal Bunt Project, 1688 W.Adams St. Phoenix, Arizona 85007.

4 Section 105 of the Federal Plant Pest Act (7U.S.C. 105dd) authorizes the Secretary ofAgriculture to impose emergency measuresnecessary to prevent the spread of plant pests newto, or not widely prevalent or distributed withinand throughout, the United States.

180 to State Route 26; then north along StateRoute 26 to State Route 27; then northeastalong State Route 27 to the Luna/SierraCounty line; then east along the Luna Countyline to the Dona County line; then southalong the Luna County line to the UnitedStates/Mexico boundary; then west along theUnited States/Mexico boundary to theHidalgo County line; then north along theLuna County line to the point of beginning.

Sierra County. Beginning at intersection ofthe Luna/Sierra County line and State Route27; then north along State Route 27 to StateRoute 152; then east along State Route 152to Interstate 25; then north along Interstate 25to State Route 52; then northwest along StateRoute 52 to the Sierra/Socorro County line;then east along the Sierra County line to theLincoln County line; then south along theSierra County line to the Dona County line;then west along the Sierra County line to thepoint of beginning.

Texas

El Paso County. The entire county.Hudspeth County. Beginning at the

intersection of the El Paso/Hudspeth Countyline and U.S. Highway 62/U.S. Highway 180;then east along U.S. Highway 62/U.S.Highway 180 to County Road 1111; thensouth along County Road 1111 to itsterminus; then west along an imaginary lineto the United States/Mexico boundary; thennorthwest along the United States/Mexicoboundary to the El Paso/Hudspeth Countyline; then north along the El Paso/HudspethCounty line to the point of beginning.

(f) The Administrator will classifyfields in regulated areas according to thefollowing categories, and will notify theowner or person in possession of thefield of the field’s classification:



(3) Fields adjacent to fields in whichpreharvest samples tested positive;

(4) Fields associated only throughownership, management, the movementof equipment, or proximity within adistinct definable area with fields inwhich preharvest samples testedpositive; and

(5) Fields within a regulated area thatare not fields described in paragraphs(f)(2) and (f)(4) of this section, and thatare part of a distinct definable area thatincludes no fields in which preharvestsamples tested positive.

(g) Fields for which the Administratorhas given no notification ofclassification to the owner or the personin possession of the field shall beconsidered to be fields as described inparagraph (f)(4) of this section.

§ 301.89–4 Planting.(a) Wheat, durum wheat, and triticale

may be planted in all fields within andoutside a regulated area, except asfollows:

(1) For the 1996–1997 crop season 1,wheat, durum wheat, and triticale maynot be planted in fields in whichpreharvest samples conducted byFederal or State official tested positivefor Karnal bunt;

(2) For the 1996–1997 crop season 1,wheat, durum wheat, and triticale maynot be planted in fields known to havebeen planted in the past 5 years withseed contaminated with Karnal bunt.

(b) Prior to planting, wheat seed,durum wheat seed, and triticale seed tobe planted within a regulated area must:

(1) Have been treated with a fungicidethat is registered with theEnvironmental Protection Agency; and

(2) Be sampled and test negative forKarnal bunt.

§ 301.89–5 Movement of regulated articlesfrom or within regulated areas.

(a) Any regulated article may bemoved from a regulated area into orthrough an area that is not regulatedonly if moved under the followingconditions:

(1) With a certificate or limited permitissued and attached in accordance with§§ 301.89–6 and 301.89–10;

(2) Without a certificate or limitedpermit, provided that each of thefollowing conditions is met:

(i) The regulated article was movedinto the regulated area from an area thatis not regulated;

(ii) The point of origin is indicated ona waybill accompanying the regulatedarticle;

(iii) The regulated article is movedthrough the regulated area withoutstopping, or has been stored, packed, orhandled at locations approved by aninspector as not posing a risk ofcontamination with Karnal bunt, or hasbeen treated in accordance with themethods and procedures prescribed in§ 301.89–13 while in or moving throughany regulated area; and

(iv) The article has not been combinedor commingled with other articles so asto lose its individual identity;

(3) Without a certificate or limitedpermit, for movement within theregulated area, if the regulated articleshas been cleaned as provided in§ 301.89–12 and 301.89–13 of thissubpart; or

(4) Without a certificate or limitedpermit, provided the regulated article isa soil sample being moved to alaboratory approved by theAdministrator 2 to process, test, oranalyze soil samples.

(b) When an inspector has probablecause to believe a person or means ofconveyance is moving a regulatedarticle, the inspector is authorized tostop the person or means of conveyanceto determine whether a regulated articleis present and to inspect the regulatedarticle. Articles found to be infected byan inspector, and articles not incompliance with the regulations in thissubpart, may be seized, quarantined,treated, subjected to other remedialmeasures, destroyed, or otherwisedisposed of. Any treatments will be inaccordance with the methods andprocedures prescribed in § 301.89–13.

§ 301.89–6 Issuance of a certificate orlimited permit.

(a) An inspector 3 or person operatingunder a compliance agreement willissue a certificate for the movement ofa regulated article outside or within aregulated area if he or she determinesthat the regulated article:

(1) Is eligible for unrestrictedmovement under all other applicableFederal domestic plant quarantines andregulations;

(2) Is to be moved in compliance withany emergency conditions theAdministrator may impose under 7U.S.C. 150dd to prevent the artificialspread of Karnal bunt 4; and

(3)(i) Is free of Karnal bunt infestation,based on laboratory results of testing,and history of previous infestation;

(ii) Has been grown, produced,manufactured, stored, or handled in amanner that would prevent infestationor destroy all life stages of Karnal bunt;

(iii) Meets the conditions of § 301.89–12(b); or

(iv) Has been treated in accordancewith methods and proceduresprescribed in § 301.89–13.

(b) An inspector or a person operatingunder a compliance agreement willissue a limited permit for the movementwithin or outside the regulated area ofa regulated article not eligible for a


5 Compliance agreements may be initiated bycontacting a local office of Plant Protection andQuarantine, which are listed in telephonedirectories. The addresses and telephone numbersof local offices of Plant Protection and Quarantinemay also be obtained from the Animal and PlantHealth Inspection Service, Plant Protection andQuarantine, 4700 River Road Unit 134, Riverdale,Maryland 20737–1236, or from the Karnal BuntProject, 1688 W. Adams St., Phoenix, Arizona85007. 6 See footnote 2.

certificate if the inspector determinesthat the regulated article:

(1) Is to be moved to a specifieddestination for specified handling,utilization, or processing (thedestination and other conditions to belisted in the limited permit and/orcompliance agreement), and thismovement will not result in theartificial spread of Karnal bunt becauseKarnal bunt will be destroyed or the riskmitigated by the specified handling,utilization, or processing;

(2) Is to be moved in compliance withany additional emergency conditionsthe Administrator may impose under 7U.S.C. 150dd to prevent the artificialspread of Karnal bunt; and

(3) Is eligible for movement under allother Federal domestic plantquarantines and regulations applicableto the regulated article.

(c) An inspector shall issue blankcertificates and limited permits to aperson operating under a complianceagreement in accordance with § 301.89–7 or authorize reproduction of thecertificates or limited permits onshipping containers, or both, asrequested by the person operating underthe compliance agreement. Thesecertificates and limited permits maythen be completed and used, as needed,for the movement of regulated articlesthat have met all of the requirements ofparagraph (a) or (b), respectively, of thissection.

§ 301.89–7 Compliance agreements.

Persons who grow, handle, or moveregulated articles may enter into acompliance agreement 5 if such personsreview with an inspector eachstipulation of the complianceagreement, have facilities andequipment to carry out disinfestationprocedures or application of chemicalmaterials in accordance with § 301.89–13, and meet applicable State trainingand certification standards under theFederal Insecticide, Fungicide, andRodenticide Act, as amended (7 U.S.C.136b). Any person who enters into acompliance agreement with APHIS mustagree to comply with the provisions ofthis subpart and any conditionsimposed under this subpart.

§ 301.89–8 Cancellation of a certificate,limited permit, or compliance agreement.

Any certificate, limited permit, orcompliance agreement may be canceledorally or in writing by an inspectorwhenever the inspector determines thatthe holder of the certificate or limitedpermit, or the person who has enteredinto the compliance agreement, has notcomplied with this subpart or anyconditions imposed under this subpart.If the cancellation is oral, thecancellation will become effectiveimmediately and the cancellation andthe reasons for the cancellation will beconfirmed in writing as soon ascircumstances allow, but within 20 daysafter oral notification of thecancellation. Any person whosecertificate, limited permit, orcompliance agreement has beencanceled may appeal the decision, inwriting, within 10 days after receivingthe written cancellation notice. Theappeal must state all of the facts andreasons that the person wants theAdministrator to consider in decidingthe appeal. A hearing may be held toresolve any conflict as to any materialfact. Rules of practice for the hearingwill be adopted by the Administrator.As soon as practicable, theAdministrator will grant or deny theappeal, in writing, stating the reasonsfor the decision.

§ 301.89–9 Assembly and inspection ofregulated articles.

(a) Persons requiring certification orother services must request the servicesfrom an inspector 6 at least 48 hoursbefore the services are needed.

(b) The regulated articles must beassembled at the place and in themanner the inspector designates asnecessary to comply with this subpart.

§ 301.89–10 Attachment and disposition ofcertificates and limited permits.

(a) The consignor must ensure that thecertificate or limited permit authorizingmovement of a regulated article is, at alltimes during movement, attached to:

(1) The outside of the containerencasing the regulated article;

(2) The article itself, if it is not in acontainer; or

(3) The consignee’s copy of theaccompanying waybill: Provided, thatthe descriptions of the regulated articleon the certificate or limited permit, andon the waybill, are sufficient to identifythe regulated article; and

(b) The carrier must furnish thecertificate or limited permit authorizingmovement of a regulated article to theconsignee at the shipment’s destination.

§ 301.89–11 Costs and charges.The services of the inspector during

normal business hours will be furnishedwithout cost to persons requiring theservices.

The user will be responsible for allcosts and charges arising frominspection and other services providedoutside of normal business hours.

§ 301.89–12 Cleaning and disinfection.(a) Used mechanized cultivating

equipment, used mechanized harvestingequipment, used farm tools, and usedmechanized soil-moving equipmentmust be cleaned of all soil and plantdebris prior to movement within aregulated area, and cleaned anddisinfected prior to movement outsidethe regulated area from the followingfields:


(2) Fields known to have been plantedin the past 5 years with seedcontaminated with Karnal bunt; and

(3) Fields adjacent to a field in whichpreharvest samples tested positive forKarnal bunt.

(b) Vegetable crops must be cleaned ofall soil and plant debris prior tomovement, or be moved under limitedpermit to processing facilities approvedby the Administrator, for movementfrom any fields described in paragraphs(a)(1), (a)(2), and (a)(3) of this section.

§ 301.89–13 Treatments.(a) All conveyances, mechanized farm

equipment, seed-conditioningequipment, soil-moving equipment,farm tools, grain elevators andstructures used for storing and handlingwheat, durum wheat, or triticalerequired to be cleaned and disinfectedunder this subpart must be cleaned byremoving all soil and plant debris anddisinfected by:

(1) Wetting all surfaces to the point ofrunoff with a solution of sodiumhypochlorite mixed with water appliedat the rate of 1 gallon of commercialchlorine bleach (5.2 percent sodiumhypochlorite) mixed with 2.5 gallons ofwater. The equipment or site should bethoroughly washed down after 15minutes to minimize corrosion; or

(2) Applying steam to all surfacesuntil the point of runoff;

(3) Cleaning with a solution of hotwater and detergent, under highpressure (at least 30 pounds per squareinch), at a minimum temperature of180° F.; or

(4) Fumigating with methyl bromideat the dosage of 15 pounds/1000 cubicfeet for 96 hours.

(b) Soil, and straw/stalks/seed headsfor decorative purposes must be treated


by fumigation with methyl bromide atthe dosage of 15 pounds/1000 cubic feetfor 96 hours.

(c) Millfeed must be treated with amoist heat treatment of 170 oF for atleast 1 minute if the millfeed resultedfrom the milling of grain from one of thefollowing types of fields:



(3) Fields adjacent to fields in whichpreharvest samples tested positive; or

(4) Fields associated only throughownership, management, the movementof equipment, or proximity within adistinct definable area with fields inwhich preharvest samples testedpositive.

§ 301.89–14 Compensation.The following individuals are eligible

to receive compensation from theUnited States Department of Agriculture(USDA) for losses or expenses incurredbecause of the Karnal bunt regulationand emergency actions, as follows:

(a) Growers who have destroyed crops.Growers in New Mexico and Texas whohave destroyed crops of wheat pursuantto an Emergency Action Notification(PPQ Form 523) issued by an inspectorare eligible to be compensated at therate of $300 per acre of destroyed crop.To claim compensation, the growermust complete and submit to aninspector whichever of the followingthree forms are applicable, asdetermined by the inspector: ASCSForm 574, ASCS Form 578, and FCIForm 73. The forms will be furnished byUSDA.

(b) Growers and handlers who sellnonpropagative wheat grown in theregulated area. Growers and handlerswho sell nonpropagative wheat grownin the regulated area are eligible to becompensated for the loss in value oftheir wheat due to the regulation forKarnal bunt, as follows:

(1) Growers who sell nonpropagativewheat. For growers who sell wheatgrown for nonpropagative purposes,compensation will be as described inparagraphs (b)(1)(ii) and (b)(1)(ii) of thissection. However, compensation willnot exceed $2.50 per bushel under anycircumstances.

(i) If the wheat was grown undercontract, compensation will equal thecontracted price minus the salvagevalue, as described in paragraph (b)(3)of this section.

(ii) If the wheat was not grown undercontract, compensation will equal theestimated market price for the relevantclass of wheat (meaning type of wheat,

such as Durum or Hard red winter)minus the salvage value, as described inparagraph (b)(3) of this section. Theestimated market price will becalculated by APHIS for each class ofwheat, taking into account the pricesoffered by relevant terminal markets(animal feed, milling, or export) for theperiod between May 1 and June 30,1996, with adjustments fortransportation and other handling costs.

(2) Handlers who sell nonpropagativewheat. Handlers are eligible to becompensated only under thecircumstances described in paragraphs(b)(2)(i) and (b)(2)(ii) of this section.Compensation for both circumstanceswill equal the estimated market price forthe relevant class of wheat (meaningtype of wheat, such as Durum or Hardred winter) minus the salvage value, asdescribed in paragraph (b)(3) of thissection. The estimated market price willbe calculated by APHIS for each class ofwheat, taking into account the pricesoffered by relevant terminal markets(animal feed, milling, or export) for theperiod between May 1 and June 30,1996, with adjustments fortransportation and other handling costs.However, compensation will not exceed$2.50 per bushel under anycircumstances.

(i) Handlers who honor contracts bypaying the grower full contract price onwheat grown for nonpropagativepurposes in the regulated area that wastested by APHIS and found positive forKarnal bunt; or

(ii) Handlers who purchase contractedor noncontracted wheat grown fornonpropagative purposes in theregulated area that was tested by APHISand found negative for Karnal bunt priorto purchase but that was tested byAPHIS and found positive for Karnalbunt after purchase.

(3) Salvage value. Salvage values willbe as follows:

(i) If the wheat is positive for Karnalbunt and is sold for use as animal feed,salvage value equals $6.00 perhundredweight or $3.60 per bushel forall classes of wheat.

(ii) If the wheat is positive for Karnalbunt and is sold for a use other thananimal feed, salvage value equalswhichever is higher of the following:The average price paid in the region ofthe regulated area where the wheat issold for the relevant class of wheat(meaning type of wheat, such as Durumor Hard red winter) for the periodbetween May 1 and June 30, 1996; or,$3.60 per bushel.

(iii) If the wheat is negative for Karnalbunt and is sold for any use, salvagevalue equals whichever is higher of thefollowing: The average price paid in the

region of the regulated area where thewheat is sold for the relevant class ofwheat (meaning type of wheat, such asDurum or Hard red winter) for theperiod between May 1 and June 30,1996; or, $3.60 per bushel.

(4) To claim compensation. To claimcompensation, a grower or handler mustcomplete and submit to an inspectorwhichever of the following three formsare applicable, as determined by theinspector: ASCS Form 574, ASCS Form578, and FCI Form 73. The forms willbe furnished by USDA. Growers mustalso submit a copy of the contract thegrower has for the wheat, if the wheatwas under contract; handlers must alsosubmit a copy of the contract thehandler had with the grower for thewheat, if the wheat was under contract.Finally, a grower or handler mustsubmit a copy of the receipt for the finalsale of the wheat, showing the intendeduse for which the wheat was sold.

(c) Nonpropagative wheat that is notsold. If a grower or handler ofnonpropagative wheat in the regulatedarea is not able to or elects not to selltheir wheat, they will be eligible toreceive compensation at the rate of$2.50 per bushel. Compensation willonly be paid if the grower or handlerhas destroyed the wheat by burying it ina sanitary landfill. To claimcompensation, the grower or handlermust complete and submit to aninspector whichever of the followingthree forms are applicable, asdetermined by the inspector: ASCSForm 574, ASCS form 578, and FCIForm 73. The forms will be furnished byUSDA. In addition, the grower orhandler must submit a receipt from thesanitary landfill verifying how muchwheat was buried.

(d) Decontamination of grain storagefacilities. Owners of grain storagefacilities that have been decontaminatedpursuant to an Emergency ActionNotification (PPQ Form 523) issued byan inspector are eligible to becompensated, on a one time only basis,for up to 50 percent of the cost ofdecontamination. However,compensation will not exceed $20,000per premises (as defined in § 301.89–1).Compensation is limited to the directcosts of decontaminating facilities.General clean-up, repair, andrefurbishment costs are excluded fromcompensation. To claim compensation,the owner of the grain storage facilitymust submit to an inspector recordsdemonstrating that decontaminationwas performed on all structures,conveyances, or materials ordered to bedecontaminated by the EmergencyAction Notification on the facilitypremises. The records must include a


copy of the Emergency ActionNotification, contracts with individualsor companies hired to perform thedecontamination, receipts forequipment and materials purchased toperform the decontamination, timesheets for employees of the grain storagefacility who performed activitiesconnected to the decontamination, andany other documentation that helpsshow decontamination has beencompleted.

(e) Flour millers. Flour millers who, inaccordance with a complianceagreement with APHIS, heat-treatmillfeed made from wheat produced inthe regulated area are eligible to becompensated at the rate of $35.00 pershort ton of millfeed. The amount ofmillfeed compensated will be calculatedby multiplying the weight of wheat fromthe regulated area received by the millerby 25 percent (the average percent ofmillfeed derived from a short ton ofgrain). To claim compensation, themiller must submit to an inspector acopy of the limited permit under whichthe wheat was moved to the mill and acopy of the bill of lading for the wheat(showing the weight of the wheat inshort tons). Flour millers must alsosubmit verification that the millfeed washeat treated, in the form of a copy of thelimited permit under which the wheatwas moved to a treatment facility and acopy of the bill of lading accompanyingthat movement.

Done in Washington, DC, this 30th day ofJuly 1996.Terry L. Medley,Administrator, Animal and Plant HealthInspection Service.[FR Doc. 96–19757 Filed 8–1–96; 8:45 am]BILLING CODE 3410–34–P

7 CFR Part 301

[Docket 96–016–11]

Karnal Bunt; Public Forums

AGENCY: Animal and Plant HealthInspection Service, USDA.ACTION: Notice of public forums.

SUMMARY: We are advising the publicthat the Animal and Plant HealthInspection Service is hosting threeadditional public forums on theAgency’s program to control anderadicate Karnal bunt. One forum hasalready been held in Washington, DC.The forums will provide an additionalopportunity for the public to commenton the regulations established andamended by a series of interim rulespublished in the Federal Register sinceMarch, 1996. Additionally, the forums

will provide the public an opportunityto comment on proposed changes to theregulations contained in a proposed rulepublished elsewhere in this issue of theFederal Register. The regulationsquarantine portions of Arizona,California, New Mexico, and Texasbecause of infestations of Karnal bunt,restrict the movement of regulatedarticles from the quarantined areas, andprovide compensation for certainindividuals in order to mitigate lossesand expenses incurred because ofKarnal bunt. Comments will also beaccepted addressing any aspect of theKarnal bunt program not included in theregulations, including control andsurvey activities conducted in thequarantined areas, the national Karnalbunt survey program, and thecertification of wheat for export.Information gathered at the publicforums will be considered by theDepartment in developing guidelinesand procedures for conducting theKarnal bunt program for the 1996–97wheat growing season.DATES: The public forums will be heldin Kansas City, MO, on August 13; inPhoenix, AZ, on August 14; and inImperial, CA, on August 15. Each publicforum will begin at 9 a.m and isscheduled to end at 5 p.m. each day.ADDRESSES: The public forums will beheld at the following locations:

1. Kansas City, MO: Holiday InnInternational Airport, Heartland Rooms1 and 2, 11832 Plaza Circle, Kansas City,MO.

2. Phoenix, AZ: Embassy Suites Hotel,Manzana Room, 3210 Grand Avenue,Phoenix, AZ.

3. Imperial, CA: Veterans MemorialHome, 247 South Imperial Avenue,Imperial, CA.

Any persons who are unable to attendthe forum, but who wish to comment onany aspect of the Karnal bunt program,may send written comments.Consideration will be given only tocomments received on or beforeSeptember 3, 1996. Please send anoriginal and three copies of writtencomments to Docket No. 96–016–11,Regulatory Analysis and Development,PPD, APHIS, Suite 3C03, 4700 RiverRoad, Unit 118, Riverdale, MD 20737–1238. Please state that your commentsrefer to Docket No. 96–016–11.Comments received, includingtranscripts from the public forums, maybe inspected at USDA, room 1141,South Building, 14th Street andIndependence Avenue SW.,Washington, DC, between 8 a.m. and4:30 p.m., Monday through Friday,except holidays. Persons wishing toinspect comments are requested to call

ahead on (202) 690–2817 to facilitateentry into the comment reading room.FOR FURTHER INFORMATION CONTACT: Mr.Stephen Poe, Operations Officer,Domestic and Emergency Operations,PPQ, APHIS, 4700 River Road Unit 134,Riverdale, MD 20737–1236, (301) 734–8247.SUPPLEMENTARY INFORMATION: Thepublic forums are being held concerningthe Animal and Plant Health InspectionService’s (APHIS) program to controland eradicate Karnal bunt. Commentswill be accepted on the regulationsestablished and amended by a series ofinterim rules published by APHIS in theFederal Register since March, 1996.Comments will also be accepted on aproposed rule (Docket No. 96–016–10,‘‘Karnal Bunt’’) published in the‘‘Proposed Rules’’ section of this issueof the Federal Register, which wouldamend the Karnal bunt regulations.

The interim rules were published onMarch 28, 1996 (61 FR 13649–13655,Docket No. 96–016–3), April 25, 1996(61 FR 18233–18235, Docket No. 96–016–5), and July 5, 1996 (61 FR 35107–35109, Docket No. 96–016–6 and 61 FR35102–35107, Docket No. 96–016–7).Comments are required to be receivedon the interim rules by September 3,1996. Comments on the proposed rule(Docket No. 96–016–10) must bereceived by September 3, 1996.

A representative of the United StatesDepartment of Agriculture (USDA) willpreside at the public forums. Anyinterested person may appear and beheard in person, or through an attorneyor other representative. Persons whowish to speak at the public forums willbe asked to provide their names andaffiliations. Parties wishing to make oralpresentations may register in advanceby calling the Legislative and PublicAffairs staff of APHIS, USDA, at (202)720–2511. Registration will also be heldfor each forum at that forum site from8 a.m. until 8:45 a.m. on the day of theforum. Speakers will be scheduled inthe order their registration is received.Advance registrations for the forumsmust be made no later than thefollowing:

1. Kansas City, MO: 4 p.m. e.d.s.t.,August 9, 1996;

2. Phoenix, AZ: 4 p.m. e.d.s.t., August12, 1996; and

3. El Centro, CA: 4 p.m. e.d.s.t.,August 13, 1996.

The public forums will begin at 9 a.m.and are scheduled to end at 5 p.m. localtime. However, the forums may beterminated at any time after they beginif all persons desiring to speak havebeen heard. The presiding officer maylimit the time for each presentation so


that all interested persons have anopportunity to participate. Attendeeswho wish to speak but who did notregister will be provided time to speakonly after all registered speakers havebeen heard.

The purpose of the forums is to giveinterested persons an opportunity fororal presentation of data, views, andinformation to the Departmentconcerning APHIS’ program to controland eradicate Karnal bunt. Questionsabout the content of the interim rulesand the proposed rule concerningKarnal bunt may be part of thecommenters’ oral presentations.However, neither the presiding officernor any other representative of theDepartment will respond to thecomments on the interim rules andproposed rule at the forums, except toclarify or explain provisions of theinterim rules and the proposed rule.

We ask that anyone who reads astatement provide two copies to thepresiding officer at the forum. Atranscript will be made of the publicforums and the transcript will be placedin the rulemaking record and will beavailable for public inspection.


7 CFR Part 319

[Docket No. 95–082–1]

Importation of Cut Flowers

AGENCY: Animal and Plant HealthInspection Service, USDA.ACTION: Proposed rule.

SUMMARY: We are proposing to amendthe cut flowers regulations byeliminating the import permit andnotice of arrival requirements forimported cut flowers of camellia,gardenia, rhododendron, rose, and lilac.All cut flowers are routinely inspectedupon arrival in the United States and, ifnecessary, fumigated. Cut flowers ofcamellia, gardenia, rhododendron, rose,and lilac appear to present no greaterrisk than other cut flowers ofintroducing plant pests, includingserious plant diseases. We believe thatthis action would reduce barriers totrade and eliminate an unnecessarypaperwork burden without increasingthe risk of imported cut flowersintroducing exotic plant pests into theUnited States.

DATES: Consideration will be given onlyto comments received on or beforeSeptember 3, 1996.ADDRESSES: Please send an original andthree copies of your comments toDocket No. 95–082–1, RegulatoryAnalysis and Development, PPD,APHIS, suite 3C03, 4700 River RoadUnit 118, Riverdale, MD 20737–1238.Please state that your comments refer toDocket No. 95–082–1. Commentsreceived may be inspected at USDA,room 1141, South Building, 14th Streetand Independence Avenue SW.,Washington, DC, between 8 a.m. and4:30 p.m., Monday through Friday,except holidays. Persons wishing toinspect comments are requested to callahead on (202) 690–2817 to facilitateentry into the comment reading room.FOR FURTHER INFORMATION CONTACT: Mr.Peter M. Grosser, Senior Staff Officer,Port Operations, PPQ, APHIS, 4700River Road Unit 139, Riverdale, MD20737–1236, (301) 734–8891.


BackgroundThe regulations in 7 CFR part 319.74

through 319.74–7 (referred to below as‘‘the regulations’’) govern theimportation of certain cut flowers intothe United States. These regulations,among other things, require that all cutflowers imported into the United Statesbe inspected for serious plant pests and,if necessary, treated to eliminate anyinjurious plant pest. Sections 319.74–2a,319.74–4, and 319.74–5 of theregulations also provide that importshipments of cut flowers of camellia(Camellia spp.), gardenia (Gardeniaspp.), rhododendron (Rhododendronspp. [including Azalea]), rose (Rosaspp.), and lilac (Syringa spp.) beaccompanied by an import permit andthat a notice of arrival be submitted tothe Collector of Customs immediatelyafter a shipment of these cut flowersarrives in the United States. Currently,no other varieties of cut flowers requirean import permit or a notice of arrivalwhen they are imported into the UnitedStates.

In 1947, we determined that importedcut flowers of camellia, gardenia,rhododendron, rose, and lilac presenteda special risk of introducing injuriousinsects and plant diseases whenimported into the United States and,therefore, should be accompanied by animport permit and should be subject tonotice of arrival requirements. However,based on our experience enforcing theregulations, we have since determinedthat the import permit and notice ofarrival requirements are no longernecessary for these varieties of cut

flowers. Instead, procedures standard tothe importation of all varieties of cutflowers appear to be sufficient tomitigate the risk of camellia, gardenia,rhododendron, rose, and lilacintroducing exotic plant pests into theUnited States.

Our port inspectors are routinelynotified of the arrival of imported cutflowers by examining a shipment’smanifest or by receiving electroniccorrespondence from importers orshippers. After arrival at the port ofentry in the United States, all cutflowers are routinely inspected forinjurious insects, including agromyzids,and for symptoms of plant diseases byan inspector of the Animal and PlantHealth Inspection Service (APHIS), and,if necessary, the cut flowers are treatedin accordance with § 319.74–3. We havedetermined that these standardprocedures are sufficient to allow thesafe importation of cut flowers ofcamellia, gardenia, rhododendron, rose,and lilac into the United States.Therefore, we are proposing to eliminatethe import permit and notice of arrivalrequirements for imported cut flowers ofcamellia, gardenia, rhododendron, rose,and lilac. This action would reducebarriers to trade in cut flowers betweenthe United States and other countries, inaccordance with the General Agreementon Tariffs and Trade (GATT) and theNorth American Free Trade Agreement(NAFTA), and would eliminate anunnecessary paperwork burden withoutincreasing the risk of imported cutflowers introducing exotic plant pests,including plant diseases, into theUnited States.

Because cut flowers of camellia,gardenia, rhododendron, rose, and lilacare the only varieties of cut flowers forwhich we require an import permit ornotice of arrival, we are, therefore,proposing that all import permit andnotice of arrival requirements, and allreferences to both, be removed from theregulations. If we remove the importpermit requirement, APHIS will nolonger need to confirm that an importpermit has been issued for a shipmentof cut flowers, and importers will nolonger need to apply for import permitsor seek renewels of import permits inorder to import cut flowers into theUnited States. In addition, if we removethe notice of arrival requirement, therewill be no need for importers to submita notice of arrival to APHIS. Theseactions would save time and effort andwould reduce the paperwork burdenboth for importers of cut flowers and forAPHIS.

We are also proposing to removeparagraph (c) of § 319.74–2 in order tostreamline the regulations and to make


the regulations consistent with theproposed changes in this document. Byremoving this paragraph, we wouldeliminate a provision that allows theDeputy Administrator of PlantProtection and Quarantine to denycertain importations of cut flowers intoa State, Territory, or District of theUnited States by refusal of an importpermit or by other means. Historically,this provision has not been utilized,and, if this proposed rule is adopted,this paragraph would no longer benecessary.

We believe that these actions wouldsimplify and streamline importprocedures and make compliance easierwhile maintaining high standards forthe prevention of the introduction ofexotic plant pests into the United States.Executive Order 12866 and RegulatoryFlexibility Act.

This proposed 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.

We are proposing to eliminate theimport permit and notice of arrivalrequirements for imported cut flowers ofcamellia, gardenia, rhododendron, rose,and lilac.

The United States importedapproximately $408 million worth offresh cut flowers in 1994. Rosesconstitituted the largest category of freshcut flowers imported into the UnitedStates in 1994, accounting for 36percent of the total value.

Although the United States importscut flowers from many countries, in1994, five countries representedapproximately 92 percent of the totalvalue of cut flowers imported into theUnited States. Colombia supplied thegreatest percentage, 66 percent, of thetotal value of cut flowers imported intothe United States in 1994, followed byThe Netherlands with 13 percent,Ecuador with 6.4 percent, Costa Ricawith 3.7 percent, and Mexico with 3.3percent. In 1994, four countriesaccounted for approximately 96.9percent of the total value of rose importsinto the United States; Colombiasupplied the greatest percentage, 71.2percent, of the total value, followed byEcuador with 13.6 percent, Mexico with6.8 percent, and Guatemala with 5percent.

Entities in the United States that maybe affected by this rule are U.S.producers, importers, and wholesalersof cut flowers. Of the estimated 1,409producers of cut flowers in the UnitedStates, approximatly 85 percent areconsidered small entities. We do not

expect that the volume of cut flowersimported into the United States willincrease because of the proposedchanges to the regulations, and,therefore, we expect little, if any, changein the market price of cut flowers ofcamellia, gardenia, rhododendron, rose,and lilac. As a result, we expect that theimpact on domestic producers of thesevarieties of cut flowers would beinsignificant.

At this time, we cannot determine thenumber of importers of cut flowers.However, we do not expect ourproposed changes to affect the supply ofcut flower importations, and, therefore,we expect any changes in costs orcompetition of the importation of cutflowers of camellia, gardenia,rhododendron, rose, and lilac to beinsignificant. As a result, we anticipatethat the effect on domestic importers ofcut flowers of camellia, gardenia,rhododendron, rose, and lilac would beinsignificant.

Of the estimated 3,043 wholesalers ofcut flowers, approximately 96 percentare considered small entities. We do notexpect that the volume of cut flowersimported into the United States willincrease, and, therefore, we do notexpect the price of cut flowers to beaffected by the changes we areproposing. As a result, we expect thatthe effect of the proposed changes onwholesalers of imported cut flowers ofcamellia, gardenia, rhododendron, rose,and lilac would be insignificant.

Under these circumstances, theAdministrator of the Animal and PlantHealth Inspection Service hasdetermined that this action would nothave a significant economic impact ona substantial number of small entities.


This proposed rule has been reviewedunder Executive Order 12988, CivilJustice Reform. If this proposed rule isadopted: (1) All State and local laws andregulations that are inconsistent withthis rule will be preempted; (2) noretroactive effect will be given to thisrule; and (3) administrative proceedingswill not be required before parties mayfile suit in court challenging this rule.


This proposed rule contains no newinformation collection or recordkeepingrequirements under the PaperworkReduction Act of 1995 (44 U.S.C. 3501et seq.). Further, this proposed rulewould reduce information collection orrecordkeeping requirements in 7 CFR319.74 from 10,495 hours to 10,036hours.

Regulatory ReformThis action is part of the President’s

Regulatory Reform Initiative, which,among other things, directs agencies toremove obsolete and unnecessaryregulations and to find less burdensomeways to achieve regulatory goals.

List of Subjects in 7 CFR Part 319Bees, Coffee, Cotton, Fruits, Honey,

Imports, Incorporation by reference,Nursery stock, Plant diseases and pests,Quarantine, Reporting andrecordkeeping requirements, Rice,Vegetables.

Accordingly, 7 CFR part 319 would beamended to read as follows:

PART 319—FOREIGN QUARANTINENOTICES

1. The authority citation for part 319would continue to read as follows:

Authority: 7 U.S.C. 150dd, 150ee, 150ff,151–167, 450, 2803, and 2809; 21 U.S.C. 136and 136a; 7 CFR 2.22, 2.80, and 371.2(c).

§ 319.74–1 [Amended]2. In § 319.74–1, paragraph (c) would

be removed.

§ 319.74–2 [Amended]3. Section 319.74–2 would be

amended as follows:a. By removing paragraph (b).b. By removing paragraph (c).c. By removing the designation ‘‘(a)’’

preceding the first paragraph.

§ 319.74–2a [Removed]4. Section 319.74–2a would be

removed.

§ 319.74–3 [Amended]5. Section 319.74–3 would be

amended as follows:a. By removing paragraph (b).b. By redesignating paragraphs (c) and

(d) as paragraphs (b) and (c),respectively.

c. In paragraph (a), in the firstsentence, by removing the words‘‘imported from the named foreigncountries and localities, whether or notsubject to permit requirements,’’.

d. In paragraph (a), in the secondsentence, by removing the reference‘‘(d)’’ and adding in its place thereference ‘‘(c)’’.

§ 319.74–4 [Removed]6. Section 319.74–4 and footnote 1

would be removed.

§ 319.74–5 [Removed]7. Section 319.74–5 would be

removed.

§ 319.74–6 [Redesignated]8. Section 319.74–6 would be

redesignated as § 319.74–4.


1 An ‘‘advance’’ is a loan from a FHLBank that isprovided pursuant to a written agreement,supported by a note or other written evidence of theborrower’s obligation, and fully secured bycollateral in accordance with the Bank Act andFinance Board regulations. See 12 CFR 935.1.

§ 319.74–7 [Removed]

9. Section 319.74–7 would beremoved.


FEDERAL HOUSING FINANCE BOARD

12 CFR Part 935

[No. 96–47]

Terms and Conditions for Advances

AGENCY: Federal Housing FinanceBoard.ACTION: Proposed rule.

SUMMARY: The Board of Directors of theFederal Housing Finance Board(Finance Board) is proposing to amendits regulation on terms and conditionsfor advances. The proposed rulerequires a Federal Home Loan Bank(FHLBank) that wants to make putableadvances available to memberinstitutions to provide appropriatedisclosures and to offer replacementadvance funding if the FHLBankterminates the putable advance prior toits stated maturity date.DATES: Comments on this proposed rulemust be received in writing on or beforeSeptember 3, 1996.ADDRESSES: Mail comments to Elaine L.Baker, Executive Secretary, FederalHousing Finance Board, 1777 F Street,N.W., Washington, D.C. 20006.Comments will be available for publicinspection at this address.FOR FURTHER INFORMATION CONTACT:Christine M. Freidel, Assistant Director,Financial Management Division, Officeof Policy, (202) 408–2976, or, Janice A.Kaye, Attorney-Advisor, Office ofGeneral Counsel, (202) 408–2505,Federal Housing Finance Board, 1777 FStreet, N.W., Washington, D.C. 20006.


I. Statutory and Regulatory Background

Under section 10 of the Federal HomeLoan Bank Act (Bank Act), eachFHLBank has the authority to makesecured advances to its members. See 12U.S.C. 1430. To ensure that theFHLBanks operate their advanceprograms in a safe and sound manner,id. § 1422a(a)(3)(A), and pursuant to itsauthority to supervise the FHLBanksand ensure that the FHLBanks carry outtheir housing finance mission and

remain adequately capitalized and ableto raise funds in the capital markets, id.§ 1422a(a)(3)(B), the Finance Boardpromulgated a final rule governingFHLBank advance programs in May1993. See 58 FR 29456 (May 20, 1993),codified at 12 CFR part 935.

Since that time, the FHLBanks havedeveloped a new type of advance 1

product called a ‘‘putable advance.’’ A‘‘putable advance’’ is an advance that aFHLBank may, at its discretion,terminate and put back to the memberfor immediate repayment after aspecified period of time and on certaindates prior to the maturity date of theputable advance. A member borrowinga putable advance faces the risk that theFHLBank will exercise its discretionand terminate the putable advance priorto its maturity date. For example, aFHLBank might terminate a putableadvance prior to its maturity date in arising interest rate environment. Anyreplacement advance funding offered tothe member would be extended at thencurrent higher market interest rates.Since the member takes on the interestrate risk associated with putableadvances, the FHLBank is able to offeradvance funding at an interest rate thatcan be significantly lower than themarket interest rate. Members haveexpressed considerable interest intaking advantage of the lower costfunding a FHLBank can offer throughputable advances.

The Finance Board’s advancesregulation does not address putableadvances, and the practices with respectto this type of advance funding varyfrom FHLBank to FHLBank. To providefor consistency among the FHLBanksthat offer putable advances and toreinforce the role of the FHLBanks assources of liquidity for memberinstitutions, the Finance Board isproposing to amend its advancesregulation to address specifically theissuance of putable advances. TheFinance Board requests comment on anyaspect of this proposed rule.

II. Analysis of the Proposed RuleThe Finance Board proposes to add a

new paragraph (d), putable advances, to§ 935.6 of its advances regulation, whichconcerns the terms and conditions foradvances. To ensure that members arefully apprised of the risks associatedwith putable advance funding, proposed§ 935.6(d)(1) would require a FHLBankthat provides a putable advance to a

member to disclose in writing to suchmember the risks associated withputable advance funding. Such risksinclude the interest rate risk describedabove in section I and the potentiallyadverse impact on a member’s liquidityif a FHLBank exercises its discretion toterminate a putable advance prior to thestated maturity date. To preclude thepossibility that putable advance fundingmight cause undue liquidity problemsfor members, proposed § 935.6(d)(2)would require a FHLBank thatterminates a putable advance prior to itsmaturity date to offer replacementfunding to the member at current marketrates for the remaining term to maturityof the putable advance. The replacementfunding would be considered aconversion of the putable advancerather than the extension of a newadvance.

Proposed § 935.6(d)(3) provides adefinition of the term ‘‘putableadvance.’’ For purposes of proposed§ 935.6(d), a putable advance wouldmean an advance that a FHLBank may,at its discretion, terminate and requirethe member to repay prior to the statedmaturity date of the putable advance.

III. Regulatory Flexibility ActThis proposed rule contains only

technical revisions to an existing ruleand, therefore, does not impose anyadditional regulatory requirements onsmall entities. Thus, in accordance withthe provisions of the RegulatoryFlexibility Act, 5 U.S.C. 601, et seq., theBoard of Directors of the Finance Boardhereby certifies that this proposed rule,if promulgated as a final rule, will nothave a significant economic impact ona substantial number of small entities.Id. section 605(b).

List of Subjects in 12 CFR Part 935Credit, Federal home loan banks.Accordingly, the Board of Directors of

the Federal Housing Finance Boardhereby proposes to amend chapter IX,title 12, part 935, Code of FederalRegulations, as follows:

PART 935—ADVANCES


Authority: 12 U.S.C. 1422b(a)(1), 1426,1429, 1430, 1430(b), and 1431.

2. In § 935.6, paragraph (d) is addedto read as follows:

§ 935.6 Terms and conditions foradvances.

* * * * *(d) Putable advances. (1) A Bank that

provides a putable advance to a membershall disclose in writing to such member


the risks associated with putableadvance funding.

(2) If a Bank terminates a putableadvance prior to the stated maturity dateof such advance, the Bank shall offer toprovide market rate replacementfunding to the member for theremaining term to maturity of theputable advance.

(3) For purposes of this paragraph (d),the term putable advance means anadvance that a Bank may, at itsdiscretion, terminate and require themember to repay prior to the statedmaturity date of the advance.

Dated: July 3, 1996.By the Board of Directors of the Federal

Housing Finance Board.Bruce A. Morrison,Chairperson.[FR Doc. 96–19526 Filed 8–01–96; 8:45 am]BILLING CODE 6725–01–U



14 CFR Part 71

[Airspace Docket No. 96–ACE–9]

Proposed Establishment of Class EAirspace; Mosby, MO

AGENCY: Federal AviationAdministration (FAA), DOT.ACTION: Notice of proposed rulemaking.

SUMMARY: Construction is nearcompletion of the new Clay CountyRegional Airport at Mosby, MO, with aprojected opening in late 1996. TheFAA has developed StandardInstrument Approach Procedures (SIAP)to the Clay County Regional Airportbased on the Global Positioning System(GPS) and the Non-directional RadioBeacon (NDB) which have made thisaction necessary. The effect of this ruleis to provide additional controlledairspace for aircraft executing the SIAPsat the Clay County Regional Airport.DATES: Comments must be received onor before September 6, 1996.ADDRESSES: Send comments on theproposal in triplicate to: Manager,Operations Branch, ACE–530, FederalAviation Administration, Docket No.96–ACE–9, 601 East 12th Street, KansasCity, MO 64106.

The official docket may be examinedin the Office of the Assistant ChiefCounsel for the Central Region at thesame address between 9:00 a.m. and3:00 p.m., Monday through Friday,except Federal holidays.

An informal docket may also beexamined during normal business hours

in the office of the Manager, OperationsBranch, Air Traffic Division, at theaddress listed above.

FOR FURTHER INFORMATION CONTACT:Kathy Randolph, Air Traffic Division,Operations Branch, ACE–530C, FederalAviation Administration, 601 East 12thStreet, Kansas City, MO 64106;telephone (816) 426–3408.

SUPPLEMENTARY INFORMATION

Comments Invited

Interested parties are invited toparticipate in this proposed rulemakingby submitting such written data, views,or arguments as they may desire.Comments that provide the factual basissupporting the views and suggestionspresented are particularly helpful indeveloping reasoned regulatorydecisions on the proposal. Commentsare specifically invited on the overallregulatory, economic, environmental,and energy-related aspects of theproposal. Communications shouldidentify the airspace docket number andbe submitted in triplicate to the addresslisted above. Commenters wishing theFAA to acknowledge receipt of theircomments on this notice must submitwith those comments a self-address,stamped postcard on which thefollowing statement is made:‘‘Comments to Airspace Docket No. 96–ACE–9.’’ The postcard will be date/timestamped and returned to thecommenter. All communicationsreceived on or before the closing datefor comments will be considered beforetaking action on the proposed rule. Theproposal contained in this notice maybe changed in light of commentsreceived. All comments submitted willbe available for examination in theRules Docket both before and after theclosing date for comments. A reportsummarizing each substantive publiccontact with FAA personnel concernedwith this rulemaking will be filed in thedocket.

Availability of NPRMs

Any person may obtain a copy of thisNotice of Proposed Rulemaking (NPRM)by submitting a request to the FederalAviation Administration, Office ofPublic Affairs, Attention: Public InquiryCenter, APA–230, 800 IndependenceAvenue, SW, Washington, DC 20591, orby calling (202) 267–3484.Communications must identify thenotice number of this NPRM. Personsinterested in being placed on a mailinglist for future NPRMs should alsorequest a copy of Advisory Circular No.11–2A, which described the procedures.

The Proposal

The FAA is considering anamendment to Part 71 of the FederalAviation Regulations (14 CFR Part 71) toprovide additional controlled airspacefor the new SIAPs at the Clay CountyRegional Airport. The additionalairspace would segregate aircraftoperating under Visual Flight Rules(VFR) conditions from aircraft operatingunder Instrument Flight Rules (IFR)procedures. The area would be depictedon appropriate aeronautical chartsthereby enabling pilots tocircumnavigate the area, continue tooperate under VFR to and from theairport, or otherwise comply with IFRprocedures. Upon publication of theprocedures, the airport status willchange from VFR to IFR. Class Eairspace designations for airspace areasextending upward from 700 feet or moreabove the surface of the earth arepublished in paragraph 6005 of FAAOrder 7400.9C, dated August 17, 1995,and effective September 16, 1995, whichis incorporated by reference in 14 CFR71.1. The Class E airspace designationlisted in this document would bepublished subsequently in the order.

The FAA has determined that thisproposed regulation only involves anestablished body of technicalregulations for which frequent androutine amendments are necessary tokeep them operationally current.Therefore, this proposed regulation (1)is not a ‘‘significant regulatory action’’under Executive Order 12866; (2) is nota ‘‘significant rule’’ under DOTRegulatory Policies and Procedures (44FR 11034; February 26, 1979); and (3)does not warrant preparation of aRegulatory Evaluation as the anticipatedimpact is so minimal. Since this is aroutine matter that will only affect airtraffic procedures and air navigation, itis certified that this proposed rule willnot have a significant economic impacton a substantial number of small entitiesunder the criteria of the RegulatoryFlexibility Act.


Airspace, Incorporation by reference,Navigation (air).

The Proposed Amendment

Accordingly, pursuant to theauthority delegated to me, the FederalAviation Administration proposes toamend Part 71 of the Federal AviationRegulations (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 in

14 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 6005 Class E airspace areasextending upward from 700 feet or moreabove the surface of the earth.* * * * *ACE MO E5 Mosby, MO [New]Clay County Regional Airport

(Lat 39°19′50′′ N., long. 94°18′36′′ W.)Mosby NDB

(Lat. 39°20′46′′ N., long. 94°18′27′′ W.)That airspace extending upward from 700

feet above the surface within a 6.4-mileradius of Clay County Regional Airport andwithin 2.5 miles each side of the 007° bearingfrom the Mosby NDB extending from the 6.4-mile radius to 7.9 miles north of the airport.* * * * *

Issued in Kansas City, MO, on July 17,1996.Herman J. Lyons, Jr.,Manager, Air Traffic Division Central Region.[FR Doc. 96–19676 Filed 8–1–96; 8:45 am]BILLING CODE 4910–13–M

DEPARTMENT OF LABOR

Employment StandardsAdministration; Wage and HourDivision



Procedures for Predetermination ofWage Rates (29 CFR Part 1); LaborStandards Provisions Applicable toContracts Covering Federally Financedand Assisted Construction and toCertain Nonconstruction Contracts (29CFR Part 5)

AGENCY: Wage and Hour Division,Employment Standards Administration,Labor.ACTION: Proposed rule.

SUMMARY: This document seekscomment on the Department’s proposalto continue the suspension of theimplementation of regulationspreviously issued under the Davis-Bacon and Related Acts while theDepartment conducts additionalrulemaking proceedings to determinewhether further amendments should bemade to those regulations. Theseregulations govern the employment of‘‘semi-skilled helpers’’ on federally-

financed and federally-assistedconstruction contracts subject to theprevailing wage standards of the Davis-Bacon and Related Acts (DBRA).DATES: Comments are due September 3,1996.ADDRESSES: Submit written commentsto Maria Echaveste, Administrator,Wage and Hour Division, EmploymentStandards Administration, U.S.Department of Labor, Room S–3502, 200Constitution Avenue, N.W.,Washington, DC 20210. Anycommenters desiring notification ofreceipt of comments should include aself-addressed, stamped post card.FOR FURTHER INFORMATION CONTACT:William W. Gross, Director, Office ofWage Determinations, Wage and HourDivision, Employment StandardsAdministration, U.S. Department ofLabor, Room S–3028, 200 ConstitutionAvenue, NW., Washington, DC 20210.Telephone (202) 219–8353. (This is nota toll free number.)

SUPPLEMENTARY INFORMATION

I. Paperwork Reduction ActThis rule does not contain any new

information collection requirements anddoes not modify any existingrequirements.

Thus, the rule contains no reportingor recordkeeping requirements subjectto the Paperwork Reduction Act of 1995.

II. BackgroundOn May 28, 1982, the Department

published revised final Regulations, 29CFR Part 1, Procedures forPredetermination of Wage Rates, and 29CFR Part 5, Subpart A—Davis-Baconand Related Acts Provisions andProcedures (47 FR 23644 and 23658,respectively), which, among otherthings, would have allowed contractorsto use semi-skilled helpers on Davis-Bacon projects at wages lower thanthose paid to skilled journeymen,wherever the helper classification, asdefined in the regulations, was‘‘identifiable’’ in the area. These rulesrepresented a reversal of a longstandingDepartment of Labor practice byallowing some overlap between theduties of helpers, and journeymen andlaborers. To protect against possibleabuse, a provision was includedlimiting the number of helpers whichcould be used on a covered project to amaximum of two helpers for every threejourneymen. See 29 CFR 1.7(d), 29 CFR5.2(n)(4), 29 CFR 5.5(a)(1)(ii)(A), and 29CFR 5.5(a)(4)(iv).

As a result of a lawsuit brought by theBuilding and Construction TradesDepartment, AFL–CIO, and a number ofindividual unions, implementation of

the regulations was enjoined. Buildingand Construction Trades Department,AFL–CIO, et al. v. Donovan, et al., 553F. Supp. 352 (D.D.C. 1982). The U.S.Court of Appeals for the District ofColumbia issued a decision upholdingthe Department’s authority to allowincreased use of helpers and approvingthe regulatory definition of a helper’sduties, but struck down the provisionfor issuing a helper wage rate wherehelpers were ‘‘identifiable,’’ therebyrequiring a modification to theregulations to provide that the helperclassification be ‘‘prevailing’’ in the areabefore it may be used. Building andConstruction Trades Department, AFL–CIO, et al., v. Donovan, et al., 712 F.2d611 (D.C. Cir. 1983), cert. denied, 464U.S. 1069 (1984).

On January 27, 1989, DOL publisheda final rule in the Federal Register (54FR 4234) to add the requirement that theuse of a particular helper classificationmust prevail in an area in order to berecognized, and to define thecircumstances in which the use ofhelpers would be deemed to prevail. (54FR 4234). Following the Court’s liftingof the injunction by Order datedSeptember 24, 1990, the Departmentpublished a Federal Register notice onDecember 4, 1990, implementing thehelper regulations effective February 4,1991 (55 FR 50148).

In April 1991, Congress passed theDire Emergency SupplementalAppropriations Act of 1991, Public Law102–27 (105 Stat. 130), which wassigned into law on April 10, 1991.Section 303 of Public Law 102–27 (105Stat. 152) prohibited the Department ofLabor from spending any funds toimplement or administer the helperregulations. In support of theprohibition, Chairman Ford of theHouse Education and Labor Committeestated that ‘‘Congress should insist thatthe administration recognize thatauthorizing legislation is the onlyappropriate vehicle for dealing withfundamental changes in the operation ofthe Davis-Bacon Act.’’ In compliancewith the Congressional directive, theDepartment did not implement oradminister the helper regulations for theremainder of fiscal year 1991.

After fiscal year 1991 concluded andsubsequent continuing resolutionsexpired, a new appropriations act waspassed which did not include a banrestricting the implementation of thehelper regulations. The Departmentissued All Agency Memorandum No.161 on January 29, 1992, instructing thecontracting agencies to include thehelper contract in contracts for whichbids were solicited or negotiations wereconcluded after that date.


During the course of the ongoinglitigation in this matter, the U.S. Courtof Appeals for the District of Columbia(by decision dated April 21, 1992)upheld the rule defining thecircumstances in which helpers wouldbe found to prevail and the remaininghelper provisions, but invalidated theprovision of the regulations thatprescribed a maximum ratio governingthe use of helpers (Building andConstruction Trades Department, AFL–CIO v. Martin, 961 F.2d 269 (D.C. Cir.1992)). To comply with this ruling, onJune 26, 1992, the Department issued aFederal Register notice removing 29CFR 5.5(a)(4)(iv) from the Code ofFederal Regulations. (57 FR 28776).

Subsequently, Section 103 of the 1994Department of Labor AppropriationsAct, Public Law 103–112, prohibited theDepartment of Labor from expendingfunds to implement or administer thehelper regulations during fiscal year1994. Accordingly, on November 5,1993, the Department published aFederal Register notice (58 FR 58954)suspending the helper regulations andreinstituting the Department’s priorpolicy regarding the use of helpers. The1995 Department of LaborAppropriations Act again barred theDepartment from expending funds toimplement the helper regulations(Section 102. Pub. L. 103–333); thisprohibition extended into fiscal 1996through several continuing resolutions.There is no such prohibition in theDepartment of Labor’s AppropriationsAct for fiscal year 1996, Public Law104–134, signed into law by PresidentClinton on April 26, 1996.

III. DiscussionDuring the brief period since the

passage of the appropriations act forfiscal year 1996, the Department hascarefully considered whether thesuspended regulation governing the useof helpers should be modified. Fourteenyears have passed since the Departmentfirst promulgated the regulation, andmore than four years have passed sincethe Department last attempted to put arevised version of that regulation ineffect. During the extended period oftime in which the regulation wassuspended, additional information hasbecome available which warrantsreview of the suspended rule.

The suspended helper regulation wasproposed and adopted principallybecause it was believed that it wouldresult in a construction workforce onFederal construction projects that moreclosely mirrored the privateconstruction workforce’s widespreaduse of helpers and, at the same time,effect significant cost savings in federal

construction costs. However, datadeveloped from the Department’sexperience implementing the helperregulation (which was not availableduring the rulemaking proceedings andupon which the public has had noopportunity to comment) reveals thatthe use of helpers might not be aswidespread as previously thought. TheDepartment conducted 78 prevailingwage surveys during the period January29, 1992, through October 21, 1993,when the (now suspended) semi-skilledhelper regulations were in effect. In 45of the 78 areas surveyed, theDepartment determined that the use ofhelpers was not the prevailing practicein any of the job classificationsanalyzed. In the remaining 33 areas, theuse of helpers was the prevailingpractice in only about 7 percent (i.e., 65of 888) of job classifications surveyed.The Department is preparing apreliminary regulatory impact analysisto accompany a proposed rule whichwill discuss the Department’s updatedestimate of costs savings which wouldbe realized from the suspended helperrule.

The Department is concerned that thehelper regulation may create anunwarranted potential for abuse of thehelper classification to justify paymentof wages which are less than theprevailing wage in the area. As initiallyproposed, the 1982 helper regulationimposed a numerical limitation on theuse of helpers under which there couldbe no more than two helpers for everythree journeymen. 47 FR 23655. As theCourt of Appeals stressed in its 1983decision, this limitation ‘‘increased thelikelihood that gross violations will becaught, or at least that evasion will notget too far out of line.’’ However, thespecific ratio adopted by theDepartment was subsequentlyinvalidated by the Court in 1992. TheDepartment’s subsequent efforts todevelop enforcement guidelines led it toconclude that administration of therevised helper criteria would be muchmore difficult than anticipated,particularly in light of the court-orderedabandonment of the ratio provision.When the Department implemented theCourt’s decision in 1992, it did notconduct notice and commentrulemaking proceedings on theregulation as revised. Instead, theCourt’s order was implemented bypublication of a notice in the FederalRegister removing the numerical ratiofrom the regulation. Consequently, thepublic has never had an opportunity tocomment on the regulation in its currentform.

The Department is also concernedabout the possible impact of the helper

regulations on formal apprenticeshipand training programs. These factors,and the obvious Congressionalcontroversy over the regulation, haveled the Department to conclude that thebasis and effect of the semi-skilledhelper regulation should be reexamined.Accordingly, the Department intends topropose, and seek public comment on,a rule that would amend the currentlysuspended helper regulations, 29 C.F.R.1.7(d), 29 C.F.R. 5.2(n)(4), and 29 C.F.R.5.5(a)(1)(ii). The Department anticipatesthat these rulemaking proceedings willbe concluded, and any final amendmentto the regulations promulgated, withinone year.

The Department has carefullyconsidered whether the regulationswhich have been in effect during thepast three years, while the suspensionhas been in effect, should continue toapply during the interim period or,alternatively, whether the suspendedhelper regulation in its current formshould be made effective during thatperiod. Given the information nowavailable, the fact that the public hasnever had an opportunity to commenton the suspended regulation in itspresent form, and the Department’sdecision to initiate proceedingsproposing further amendments to therule, the Department has decided toseek public comment concerningwhether or not to continue thesuspension of the helper regulationwhile further action is being taken withrespect to possibly amending the rule.

In addition to the problems with thesuspended helper regulation discussedabove, the Department is preliminarilyof the view that implementation of theregulation on a short-term basis wouldcreate unwarranted disruption anduncertainty for both federal agenciesand the contracting community.Accordingly, the rule proposed herewould make no change to theregulations currently in effect, andthereby continue the suspension of thehelper regulations that has been in effectsince October 1993, while theDepartment engages in substantiverulemaking concerning the helperregulations.

The Department’s past experienceindicates that implementation of thesuspended helper regulations, even onan interim basis, would likely require asubstantial period of time. When theDepartment promulgated the helperregulations in 1982 (47 FR 23658, May28, 1982) and in 1990 (55 FR 50149,December 4, 1990), it provided a 60-dayeffective date, applicable to bidsadvertised or negotiations concludedafter the date, to allow agencies anopportunity to amend their


implementing regulations and theircontract clause forms to incorporate thenew provisions. Solicitations for bidsare ordinarily advertised for at least 30to 60 days before a contract may beawarded. In accordance with theDepartment’s usual practice, an effectivedate at least 60 days after publicationwould be afforded if the Departmentwere to begin implementation of thesuspended rule today.

Conforming changes then have to bemade by the appropriate responsiblefederal agencies to the FederalAcquisition Regulations (FAR) and theDefense Acquisition Regulations (DAR),which are applicable to contractssubject to the Davis-Bacon Act. It islikely that such changes would alsohave an effective date 60 days after theirpublication, as did amendments to theFAR and DAR following theDepartment’s 1992 notice ofimplementation (September 1992–November 1992). In fact, when theDepartment implemented the helperrule in January 1992, conformingchanges in the FAR and the DAR didnot actually become effective untilNovember 1992, approximately tenmonths after the Department issued itsnotice implementing the rule.

Moreover, under the suspended rule,helpers could be used on a givencontract only after the Departmentdetermines that the use of helpers is theprevailing practice in a particular jobclassification in the area in which thework will be performed. Thus, the timenecessary for the Department to performsurveys in response to requests to usehelper classifications adds further delaybefore contractors may lawfully paytheir workers at helper rates.

Thus, the suspended regulationwould be fully effective for only a briefperiod, if at all, before the Departmentexpects it would complete substantiverulemaking proceedings to consideramending the regulation. Given thependency of those proceedings, and thehistory of the regulation, contractorswould be uncertain to reconfigure theirstaffing patterns and work siteprocedures for the purpose ofsubmitting bids in reliance upon aregulation which they are aware theDepartment may amend shortlythereafter. Similarly, repeated changesin the regulations within a short periodof time would create unwarranteddisruption in the contracting process offederal agencies which would berequired to amend their regulations andcontract forms on an interim basis onlyto repeat the entire process if proposedamendments to the helper regulation arefinalized. Finally, the Department ofLabor would have to postpone or

abandon planned surveys needed toupdate prevailing wage determinationsin order to divert resources to thecollection and analysis of prevailingpractice and wage data under helperregulations which may be modifiedshortly thereafter.

In short, the Department believes thatthe disruption and uncertaintyassociated with implementation of thesuspended helper regulations for such abrief period would be unwarranted. TheDepartment expects to complete itsanalysis of public comments on thisproposed rule to continue thesuspension of the helper regulations,and publish a final rule within 120 daysafter the date of publication.

IV. Executive Order 12866; § 202 of theUnfunded Mandates Reform Act of1995; Small Business RegulatoryEnforcement Fairness Act

This proposed rule is not‘‘economically significant’’ within themeaning of Executive Order 12866; nordoes it require a statement under § 202of the Unfunded Mandates Reform Actof 1995. This rule merely continues thesuspension of the helper regulationsthat has been in effect since November1993 in order that the Department mayproceed with rulemaking whileavoiding the unnecessary disruptionand confusion that would result fromimplementation of the helperregulations during the interim.Therefore, there would be no cost orsavings that would result fromcontinuing the suspension since thiswould merely preserve the status quo.Moreover, as discussed above, asubstantial period of time is requiredbefore the regulations would beimplemented by their incorporation incontracts, and the Department’sexperience in the brief period in 1992and 1993 when the suspendedregulation was in effect was thatrelatively few surveys were completedin which helpers were found to prevail.

Thus, any theoretical savings thatwould be lost from a failure toimplement the helper regulations duringthe rulemaking period would beminimal. Accordingly, it is expectedthat this proposal will not result in arule that may have an annual effect onthe economy of $100 million or more, oradversely affect in a material way theeconomy or a sector of the economy.Because this rule will not have asignificant economic impact, noeconomic analysis is required. For thesame reason, this rule does notconstitute a ‘‘major rule’’ within themeaning of section 804(2) of the SmallBusiness Regulatory EnforcementFairness Act.

Because the alternative to theproposed rule—lifting of the suspensionand implementing the helperregulations while rulemaking isongoing—could possibly interfere withactions planned or taken by othergovernment agencies, the Departmenthas concluded that it will treat theproposed rule as a ‘‘significantregulatory action’’ within the meaningof section 3(f)(2) of Executive Order12866.

V. Regulatory Flexibility Act

The Department has determined thatthe proposed rule will not have asignificant economic impact on asubstantial number of small entities. Asa continuation of the status quo, thereis no economic impact. Furthermore,the Department has determined that ifthe suspension were lifted and theregulation implemented, there wouldnot be a significant economic impact ona substantial number of small entitiesduring the interim period prior tocompletion of rulemaking action on thehelper regulations—expected to becompleted within a year. Because of thelag times in agency procedures toamend their regulations and incorporatethe contract clauses, and the relativelysmall number of helper classificationswhich the Department found prevailingin its surveys in 1992 and 1993, it isunlikely that a substantial number ofsmall entities would have theopportunity to use helper classificationsduring the period before the rulemakingis completed. Accordingly, the proposedrules are not expected to have a‘‘significant economic impact on asubstantial number of small entities’’within the meaning of the RegulatoryFlexibility Act, and the Department hascertified to this effect to the ChiefCounsel for Advocacy of the SmallBusiness Administration. Thus, aregulatory flexibility analysis is notrequired.

VII. Document Preparation

This document was prepared underthe direction and control of MariaEchaveste, Administrator, Wage andHour Division, Employment StandardsAdministration, U.S. Department ofLabor.

Signed at Washington, D.C., this 29th dayof July 1996.John R. Fraser,Deputy Administrator, Wage and HourDivision.[FR Doc. 96–19649 Filed 7–31–96; 8:45 am]BILLING CODE 4510–27–M


NATIONAL LABOR RELATIONSBOARD

29 CFR Part 102

Procedure Governing AdvisoryOpinions and Rules GoverningSummary Judgment Motions andAdvisory Opinions

AGENCY: National Labor RelationsBoard.ACTION: Notice of extension of time forfiling comments to proposedrulemaking.

SUMMARY: Pursuant to a request from theAmerican Bar AssociationSubcommittee on NLRB Practice andProcedure, the NLRB gives notice that itis extending by approximately 30 daysthe time for filing comments on theproposed rule changes published onJuly 5, 1996 (61 FR 35172) which wouldeliminate the notice-to-show-causeprocedure in summary judgment casesand remove provisions which permitparties to pending state proceedings tofile petitions with the Board for anadvisory opinion on jurisdiction.DATES: The comment period whichcurrently ends on August 5, 1996, isextended to September 5, 1996.ADDRESSES: Comments on the proposedrulemaking should be sent to: Office ofthe Executive Secretary, 1099 14thStreet, NW, Rm 11600, Washington,D.C. 20570.FOR FURTHER INFORMATION CONTACT: JohnJ. Toner, Executive Secretary,Telephone: (202) 273–1940.

Dated, Washington, D.C., July 29, 1996.By direction of the Board.

John J. Toner,Executive Secretary.[FR Doc. 96–19696 Filed 8–1–96; 8:45 am]BILLING CODE 7545–01–P


Office of Surface Mining Reclamationand Enforcement

30 CFR Part 936

[SPATS No. OK–019–FOR]

Oklahoma Regulatory Program

AGENCY: Office of Surface MiningReclamation and Enforcement (OSM),Interior.ACTION: Proposed rule; public commentperiod and opportunity for publichearing on proposed amendment.

SUMMARY: OSM is announcing receipt ofa proposed amendment to the Oklahoma

regulatory program (hereinafter, the‘‘Oklahoma program’’) under theSurface Mining Control andReclamation Act of 1977 (SMCRA). Theproposed amendment consists ofadditions and revisions to Oklahoma’sregulations pertaining to repair orcompensation for material damageresulting from subsidence caused byunderground coal mining operationsand to replacement of water suppliesadversely impacted by undergroundcoal mining operations. The amendmentis intended to revise the Oklahomaprogram to be consistent with thecorresponding Federal regulations.DATES: Written comments must bereceived by 4:00 p.m., c.d.t., September3, 1996. If requested, a public hearingon the proposed amendment will beheld on August 27, 1996. Requests topresent oral testimony at the hearingmust be received by 4:00 p.m., c.d.t. onAugust 19, 1996.ADDRESSES: Written comments shouldbe mailed or hand delivered to Jack R.Carson, Acting Director, Tulsa FieldOffice at the address listed below.

Copies of the Oklahoma program, theproposed amendment, and all writtencomments received in response to thisdocument will be available for publicreview at the addresses listed belowduring normal business hours, Mondaythrough Friday, excluding holidays.Each requester may receive on free copyof the proposed amendment bycontacting OSM’s Tulsa Field Office.Jack R. Carson, Acting Director, Tulsa

Field Office, Office of Surface MiningReclamation and Enforcement, 5100East Skelly Drive, Suite 470, Tulsa,Oklahoma 74135–6547, Telephone:(918) 581–6430.

Oklahoma Department of Mines, 4040N. Lincoln Blvd., Suite 107,Oklahoma City, Oklahoma 73105,Telephone: (404) 521–3859.

FOR FURTHER INFORMATION CONTACT:Jack R. Carson, Telephone (918) 581–6430.


I. Background on the OklahomaProgram

On January 19, 1981, the Secretary ofthe Interior conditionally approved theOklahoma program. General backgroundinformation on the Oklahoma program,including the Secretary’s findings, thedisposition of comments, and theconditions of approval of the Oklahomaprogram can be found in the January 19,1981, Federal Register (46 FR 4902).Subsequent actions concerningOklahoma’s program and programamendments can be found at 30 CFR936.15 and 936.16.

II. Proposed AmendmentBy letter dated July 17, 1996,

Oklahoma submitted a proposedamendment to its program pursuant toSMCRA (Administrative Record No.OK–975). Oklahoma submitted theproposed amendment in response to aMay 20, 1996, letter that OSM sent toOklahoma in accordance with 30 CFR732.17(c). Oklahoma proposed to revisethe Oklahoma Coal Rules andRegulations at OklahomaAdministrative Code (OAC) 460:20–3–5,definitions; OAC 460:20–31–7,hydrologic information; OAC 460:20–31–13, subsidence control plan; OAC460:20–45–8, hydrologic-balanceprotection; and OAC 460:20–45–47,subsidence control. Specifically,Oklahoma proposes the followingadditions and revisions to itsregulations.

1. OAC 460:20–3–5 DefinitionsOklahoma proposes to add definitions

for the terms ‘‘drinking, domestic orresidential water supply’’; ‘‘materialdamage’’; ‘‘non-commercial building’’;and ‘‘replacement of water supply.’’

2. OAC 460:20–31–7 HydrologicInformation

Oklahoma proposes to add a newprovision at OAC 460:20–31–7(e)(3)(D)that requires the PHC determination toinclude findings on ‘‘whether theunderground mining activitiesconducted after October 24, 1992 mayresult in contamination, diminution orinterruption of a well or spring inexistence at the time the permitapplication is submitted and used fordomestic, drinking, or residentialpurposes within the permit or adjacentareas.’’

3. OAC 460:20–31–13 SubsidenceControl Plan

Oklahoma proposes to remove theexisting introductory paragraph and toreplace it with new subsections (a) and(b). Paragraphs (a) (1) through (3)contain requirements for an applicationto include a map, a narrative, and a pre-subsidence survey indicating thelocation, type, and condition ofstructures and renewable resource landsthat subsidence may materially damageor diminish in value and of drinking,domestic, and residential water suppliesthat subsidence may contaminate,diminish, or interrupt.

Subsection (b) contains revisedrequirements for a subsidence controlplan. A new introductory paragraphprovides that no further informationneed be provided in the application ifthe survey conducted under paragraph(a) shows that no structures; drinking,


domestic, or residential water supplies;or renewable resource lands exist or thatno material damage or diminution invalue or reasonably foreseeable use ofsuch structures or lands and nocontamination, diminution, orinterruption of such water supplieswould occur as a result of minesubsidence. The Department must agreewith the conclusion of the survey. Asubsidence control plan is required ifthe survey identifies the existence ofstructures, renewable resource lands, orwater supplies; if subsidence couldcause material damage or diminution invalue or foreseeable use, orcontamination, diminution, orinterruption of protected water supplies;or if the Department determines thatsuch damage or diminution could occur.

The language in existing paragraph (7)was removed and new language wasadded to require operators conductingoperations that result in planned andcontrolled subsidence to describe thesubsidence control measures they willuse to minimize subsidence andsubsidence-related material damage tonon-commercial buildings and occupiedresidential dwellings and relatedstructures; or to submit the writtenconsent of the owner of the structure orfacility that minimization measuresneed not be taken; or to demonstratethat the costs of minimizing damage tothese structures exceed the anticipatedcost of repair and are not needed toprevent a threat to health or safety.

Existing paragraph (8) wasredesignated paragraph (b)(9) and newparagraph (b)(8) requires a descriptionof the measures to be taken to replaceadversely affected protected watersupplies or to mitigate or remedy anysubsidence-related material damage toprotected land and structures.

4. OAC 460:20–45–8 Hydrologic-balance protection

Oklahoma proposes to add newsubsection (j) that requires the permitteeto replace any drinking, domestic orresidential water supply that iscontaminated, diminished orinterrupted by underground miningactivities conducted after October 24,1992.

5. OAC 460:20–45–47 SubsidenceControl

Oklahoma proposes to revisesubsection (a) by adding the title‘‘Operator measures to prevent orminimize damage’’; by numbering theexisting provision (1); and by addingtwo new provisions. Paragraph (a)(2)provides that if planned subsidence isused, the operator must minimizematerial damage to the extent

technologically and economicallyfeasible unless he has the writtenconsent of the owners or the costswould exceed the anticipated costs ofrepair. Paragraph (a)(3) provides that thestandard method of room-and-pillarmining is not prohibited.

Oklahoma proposes to revisesubsection (b) by adding the title‘‘Operator compliance.’’

Oklahoma proposes to revisesubsection (c) by adding the title‘‘Repair of damage to surface lands’’; bydeleting the existing language andadding new language in paragraph (2);and by adding new paragraphs (3), (4),and (5). New paragraph (c)(2) requiresthe operator to repair or compensate theowner for subsidence-related materialdamage to non-commercial buildings oroccupied residential dwellings thatexisted at the time of mining.

New paragraph (c)(3) provides forrepair or compensation for subsidence-related material damage to structures orfacilities not protected by paragraph(c)(2).

New paragraph (c)(4)(A) provides thatif damage to non-commercial buildingsor occupied residential dwellings andrelated structures occurs as a result ofearth movement within the areadetermined by projecting a specifiedangle of draw from underground mineworkings to the surface, a rebuttablepresumption exists that the permitteecaused the damage. The presumptionwill normally apply to a 30-degree angleof draw. New paragraph (c)(4)(B)provides that the operator may requestthat the presumption apply to adifferent site-specific angle of drawbased on a site-specific geotechnicalanalysis of the potential surface impactof the mining operation thatdemonstrates that the proposed angle ofdraw has a more reasonable basis thanthe one established in the Oklahomaprogram. New paragraph (c)(4)(C)provides that no rebuttable presumptionwill exist if the operator is deniedaccess to the land or property for thepurpose of conducting a pre-subsidencesurvey. New paragraph (c)(4)(D)provides for a rebuttal of presumptionunder specified circumstances. Newparagraph (c)(4)(E) provides that allrelevant and reasonably availableinformation will be considered indetermining whether damage toprotected structures was caused bysubsidence. New paragraph (c)(5)provides for an adjustment of bondamount for subsidence-related materialdamage to protected land, structures, orfacilities and for contamination,diminution, or interruption to a watersupply. No additional bond is requiredif repairs, compensation or replacement

is completed within 90 days of theoccurrence of damage. Oklahoma mayextend the 90-day time frame, not toexceed one year, under specifiedcircumstances.

III. Public Comment ProceduresIn accordance with the provisions of

30 CFR 732.17(h), OSM is seekingcomments on whether the proposedamendment satisfies the applicableprogram approval criteria of 30 CFR732.15. If the amendment is deemedadequate, it will become part of theOklahoma program.

Written CommentsWritten comments should be specific,

pertain only to the issues proposed inthis rulemaking, and includeexplanations in support of thecementer’s recommendations.Comments received after the timeindicated under DATES or at locationsother than the Tulsa Field Office willnot necessarily be considered in thefinal rulemaking or included in theadministrative record.

Public HearingPersons wishing to testify at the

public hearing should contact theperson listed under FOR FURTHERINFORMATION CONTACT by 4:00 p.m., c.d.t.on August 19, 1996. The location andtime of the hearing will be arrangedwith those persons requesting thehearing. Any disabled individual whohas need for a special accommodation toattend a public hearing should contactthe individual listed under FOR FURTHERINFORMATION CONTACT. If no one requestsan opportunity to testify at the publichearing, the hearing will not be held.

Filing of a written statement at thetime of the hearing is requested as itwill greatly assist the transcriber.Submission of written statements inadvance of the hearing will allow OSMofficials to prepare adequate responsesand appropriate questions.

The public hearing will continue onthe specified date until all personsscheduled to testify have been heard.Persons in the audience who have notbeen scheduled to testify, and who wishto do so, will be heard following thosewho have been scheduled. The hearingwill end after all persons scheduled totestify and persons present in theaudience who wish to testify have beenheard.

Public MeetingIf only one person requests an

opportunity to testify at a hearing, apublic meeting, rather than a publichearing, may be held. Persons wishingto meet with OSM representatives to


discuss the proposed amendment mayrequest a meeting by contacting theperson listed under FOR FURTHERINFORMATION CONTACT. All such meetingswill be open to the public and, ifpossible, notices of meetings will beposted at the locations listed underADDRESSES. A written summary of eachmeeting will be made a part of theadministrative record.

IV. Procedural Determinations

Executive Order 12866This rule is exempted from review by

the Office of Management and Budget(OMB) under Executive Order 12866(Regulatory Planning and Review).

Executive Order 12988The Department of the Interior has

conducted the reviews required bysection 3 of Executive Order 12988(Civil Justice Reform) and hasdetermined that this rule meets theapplicable standards of subsections (a)and (b) of that section. However, thesestandards are not applicable to theactual language of State regulatoryprograms and program amendmentssince each such program is drafted andpromulgated by a specific State, not byOSM. Under sections 503 and 505 ofSMCRA (30 U.S.C. 1253 and 1255) andthe Federal regulations at 30 CFR730.11, 732.15, and 732.17(h)(10),decisions on proposed State regulatoryprograms and program amendmentssubmitted by the States must be basedsolely on a determination of whether thesubmittal is consistent with SMCRA andits implementing Federal regulationsand whether the other requirements of30 CFR Parts 730, 731, and 732 havebeen met.

National Environmental Policy ActNo environmental impact statement is

required for this rule since section702(d) of SMCRA (30 U.S.C. 1292(d))provides that agency decisions onproposed State regulatory programprovisions do not constitute majorFederal actions within the meaning ofsection 102(2)(C) of the NationalEnvironmental Policy Act of 1969 (42U.S.C. 4332(2)(C)).

Paperwork Reduction ActThis rule does not contain

information collection requirements thatrequire approval by OMB under thePaperwork Reduction Act (44 U.S.C.3507 et seq.).

Regulatory Flexibility ActThe Department of the Interior has

determined that this rule will not havea significant economic impact on asubstantial number of small entities

under the Regulatory Flexibility Act (5U.S.C. 601 et seq.). The State submittalthat is the subject of this rule is basedupon counterpart Federal regulations forwhich an economic analysis wasprepared and certification made thatsuch regulations would not have asignificant economic effect upon asubstantial number of small entities.Accordingly, this rule will ensure thatexisting requirements previouslypromulgated by OSM will beimplemented by the State. In making thedetermination as to whether this rulewould have a significant economicimpact, the Department relied upon thedata and assumptions for thecounterpart Federal regulations.

Unfunded MandatesThis rule will not impose a cost of

$100 million or more in any given yearon any governmental entity or theprivate sector.

List of Subjects in 30 CFR Part 936Intergovernmental relations, Surface

mining, Underground mining.Dated: July 25, 1996.

Deborah Watford,Acting Regional Director, Mid-ContinentRegional Coordinating Center.[FR Doc. 96–19610 Filed 8–1–96; 8:45 am]BILLING CODE 4310–05–M


40 CFR Part 300

[FRL–5545–6]

National Oil and HazardousSubstances Pollution ContingencyPlan; National Priorities List

AGENCY: Environmental ProtectionAgency.ACTION: Notice of Intent to DeleteNorthwest 58th Landfill Site from theNational Priorities List: request forcomments.

SUMMARY: The Environmental ProtectionAgency (EPA) Region IV announces itsintent to delete the Northwest 58thStreet Landfill Site from the NationalPriorities List (NPL) and requests publiccomment on this proposed action. TheNPL constitutes Appendix B of 40 CFRpart 300 which is the National Oil andHazardous Substances PollutionContingency Plan (NCP), which EPApromulgated pursuant to Section 105 ofthe Comprehensive EnvironmentalResponse, Compensation, and LiabilityAct (CERCLA) of 1980, as amended.EPA and the State of FloridaDepartment of Environmental Protection

(FDEP) have determined that the Siteposes no significant threat to publichealth or the environment and therefore,further response measures pursuant toCERCLA are not appropriate.DATES: Comments concerning this Sitemay be submitted on or before:September 3, 1996.ADDRESSES: Comments may be mailedto: Richard D. Green, Acting Director,Waste Management Division, U.S.Environmental Protection Agency, 345Courtland Street NE, Atlanta, Georgia30365.

Comprehensive information on thisSite is available through the Region IVpublic docket, which is available forviewing at the Northwest 58th Streetinformation repositories at twolocations. Locations, contacts, phonenumbers and viewing hours are:U.S. EPA Record Center, 345 Courtland

Street, NE, Atlanta, Georgia 30365,Phone: (404)347–0506, Hours: 8:00a.m. to 4:00 p.m., Monday throughFriday By Appointment Only

Metropolitan Dade County, Departmentof Environmental ResourceManagement, Hazardous WasteSection, 33 S.W. 2nd Avenue, Suite800, Miami, Florida 33130, Phone:(305) 372–6804, Hours: 8:00 a.m. to5:00 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT:Pamela Scully, U.S. EPA Region IV,Mail Code: WD–SSRB, 345 CourtlandStreet NE, Atlanta, Georgia 30365,(404)347–2643 x6246.SUPPLEMENTARY INFORMATION:

Table of Contents:I. IntroductionII. NPL Deletion CriteriaIII. Deletion ProceduresIV. Basis for Intended Site Deletion

I. IntroductionThe EPA Region IV announces its

intent to delete the Northwest 58thStreet Site, Dade County, Florida, fromthe NPL, which constitutes Appendix Bof the NCP, 40 CFR Part 300, andrequests comments on this deletion.EPA identifies sites on the NPL thatappear to present a significant risk topublic health, welfare, or theenvironment. Sites on the NPL may bethe subject of remedial actions financedby the Hazardous Substance SuperfundTrust Fund (Fund). Pursuant to Section300.425(e)(3) of the NCP, any sitedeleted from the NPL remains eligiblefor Fund-financed remedial actions ifconditions at the site warrant suchaction.

EPA will accept commentsconcerning this Site for thirty days afterpublication of this notice in the FederalRegister.


Section II of this notice explains thecriteria for deleting sites from the NPL.Section III discusses procedures thatEPA is using for this action. Section IVdiscusses how this Site meets thedeletion criteria.

II. NPL Deletion Criteria

The NCP establishes the criteria thatthe Agency uses to delete sites from theNPL. In accordance with 40 CFR300.425(e), sites may be deleted from orrecategorized on the NPL where nofurther response is appropriate. Inmaking this determination, EPA shallconsider, in consultation with the state,whether any of the following criteriahave been met:

(i) Responsible or other parties haveimplemented all appropriate responseactions required;

(ii) All appropriate Fund-financedresponses under CERCLA have beenimplemented and no further action byresponsible parties is appropriate; or

(iii) The remedial investigation hasshown that the release poses nosignificant threat to public health or theenvironment and, therefore, taking ofremedial measures is not appropriate.

If a site is deleted from the NPL wherehazardous substances, pollutants, orcontaminants remain at the site abovelevels that allow for unlimited use andunrestricted exposure, EPA’s policy isthat a subsequent review of the site willbe conducted at least every five yearsafter the initiation of the remedial actionat the site to ensure that the site remainsprotective of public health and theenvironment. If new informationbecomes available which indicates aneed for further action, EPA may initiateremedial actions. Whenever there is asignificant release from a site deletedfrom the NPL, the site may be restoredto the NPL without the application ofthe Hazardous Ranking System.

III. Deletion Procedures

EPA will accept and evaluate publiccomments before making a finaldecision on deletion. The followingprocedures were used for the intendeddeletion of the Site:

1. FDEP has concurred with thedeletion decision;

2. Concurrently with this Notice ofIntent, a notice has been published inlocal newspapers and has beendistributed to appropriate federal, stateand local officials and other interestedparties announcing a 30-day publiccomment period on the proposeddeletion from the NPL; and

3. The Region has made all relevantdocuments available at the informationrepositories.

The Region will respond to significantcomments, if any, submitted during thecomment period.

Deletion of the Site from the NPL doesnot itself create, alter, or revoke anyindividual rights or obligations. TheNPL is designed primarily forinformational purposes to assist Agencymanagement.

A deletion occurs when the RegionalAdministrator places a final notice inthe Federal Register. Generally, the NPLwill reflect any deletions in the finalupdate following the Notice. Publicnotices and copies of theResponsiveness Summary, if any, willbe made available to local residents bythe Regional office.

IV. Basis for Intended Site DeletionThe following site summary provides

the Agency’s rationale for the intentionto delete this Site from the NPL.

The Northwest 58th Street Landfill isa one square mile site in NorthwestDade County, Florida, near the westernperimeters of the Town of Medley andthe City of Miami Springs. The Sitebegan operation as an open dump in1952. Shallow trenches were dug forwaste disposal, resulting in depositionof refuse in the saturated zone of theBiscayne Aquifer. The landfill receivedan estimated one million tons of wasteeach year during its latter years ofoperation. In January 1975, a program ofproviding daily cover was instituted.Initially, this cover consisted of muckand crushed rock, but subsequently,calcium carbonate sludge from theCounty’s water treatment plants wasused as cover.

In 1975, the U.S. Geologic Surveycompleted a study, which defined amigrating groundwater contaminantplume, downgradient of the Site. Thestudy estimated the location of theleading edge of the plume to be one mileeast (downgradient) of the landfill. Afeasibility study (FS) was completed inJanuary 1976. Six alternatives wereconsidered for remediating groundwater contamination at the Site,including: site groundwater recovery,onsite groundwater recovery with deepwell injection, containment ofcontaminants, excavation of the landfilland leachate control measures.

In June 1979, Dade County and theFlorida Department of EnvironmentalProtection entered into a Consent Orderwhich required the county to ceaseaccepting waste at the Northwest 58thStreet Landfill by August 1, 1981. DadeCounty continued to operate the landfilluntil October 1982. Since then, thelandfill has received only constructiondebris, quarry wastes, and water plantsludges; no municipal waste has been

received. In October 1981, the landfillwas proposed for the National PrioritiesList (NPL). The site was placed on theNPL in September 1983.

In 1982 EPA initiated the BiscayneAquifer Study to determine the effect ofthree NPL sites on the Biscayne aquifer:The Varsol Spill Site; the Miami DrumSite; and the Northwest 58th StreetLandfill. The regional study was notable to define a groundwater plumeassociated with the site. Rather, awidespread low-to-moderate plume wasfound throughout most of the studyarea. A 1986 Endangerment Assessmentidentified the following as site-relatedgroundwater contaminants of concern:arsenic, chromium, zinc, benzene,chlorobenzene, 1,1,2,2-tetrachloroethane, trichloroethene andvinyl chloride. These contaminantswere found in exceedence of existingfederal or State of Florida maximumcontaminant levels, and were found tobe of concern due to their relativemobility, persistence and toxicity.

Based on the USGS study, the 1976FS, and the Biscayne aquifer study, EPAapproved a Record of Decision (ROD)for the Northwest 58th Street Landfillon September 21, 1987. The remedyselected by the ROD was closure of thelandfill. The closure was to includeleachate control through a combinationof stormwater management, grading,drainage control, leachate collection,and capping techniques. Thesemeasures were expected to minimizethe infiltration of rainwater into thelandfill, thus controlling the productionof leachate. Methane gas migration andodor controls were also to beimplemented. Long-term monitoring ofground water quality and O&M of thelandfill closure was also required.

In addition to closure of the landfill,the remedy required that the countyprovide public drinking water to thoseresidences and businesses located eastof the landfill, where it had beendetermined exposure to ground watercontaminated by the landfill causedunacceptable risk.

On April 26, 1988, Dade Countysigned a Consent Decree with EPA, toimplement the remedial actionsidentified in the ROD. The closure planwas submitted to EPA June 27, 1988.Municipal water was provided toprivate well users east of the landfill inJanuary 1989. A leachate interceptortrench was installed along the easternperimeter of the landfill, in an areadesignated as Zone 1, by April 1989.Construction of the landfill coversystem began in August 1991, andconstruction completion was completedJanuary 1995.


A statutory five-year review of theremedy was conducted in 1993. Becausethe remedial action was not complete,EPA recommended that another five-year review be conducted by November22, 1998.

EPA, with concurrence of FDEP, hasdetermined that all appropriate actionsat the Northwest 58th Street LandfillSite have been completed, and that nofurther remedial action is necessary.Therefore, EPA is proposing deletion ofthe Site from the NPL.

Dated: July 18, 1996.A. Stanley Meiburg,Acting Regional Administrator, USEPARegion IV.[FR Doc. 96–19432 Filed 8–1–96; 8:45 am]BILLING CODE 6560–50–P


Bureau of Land Management

43 CFR Parts 3600, 3610, and 3620

[WO–420–1050–00–24 1A]

RIN 1004–AC68

Mineral Materials Disposal

AGENCY: Bureau of Land Management,Interior.ACTION: Proposed rule.

SUMMARY: The Bureau of LandManagement (BLM) proposes to amendthe mineral materials sales regulationsby accepting qualified certificates ofdeposits as surety bonds, and bychanging bonding requirements for salesof $2,000 or more. For such sales, thecurrent rule sets the bond amount at$500 or 20 per cent of the contractedprice, whichever is greater. The newrule will be more flexible. The bond willbe set at 5 percent of the contract valueplus an amount large enough to meetthe anticipated reclamation work. Therule still requires $500 as the minimumamount for the bond. The rule makesthe bond amount more realistic andensures that the amount of bond isadequate to accomplish the projectedreclamation work. Other changessimplify certain paragraphs byamending or removing confusinglanguage.DATES: Comments on the proposed rulemust be received by September 3, 1996to be assured of consideration.Comments received or postmarked afterthis date may not be considered in thepreparation of the final rule.ADDRESSES: Comments should be sentto: Director (420), Bureau of LandManagement, Room 401 LS, 1849 C

Street NW., Washington, DC 20240, orthe Internet address:[email protected][For Internet, please include ‘‘ATTN:AC68’’, and your name and returnaddress.] You may also hand delivercomments to the Bureau of LandManagement Administrative Record,Room 401, 1620 L Street NW.,Washington, DC.

Comments will be available for publicreview at the L Street address duringregular business hours (7:45 a.m. to 4:15p.m.), Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Dr.Durga N. Rimal, Resource Use andAuthorization Team, at (202) 452–0350.

SUPPLEMENTARY INFORMATION: Theproposed rule would amend 43 CFRGroup 3600, subpart 3602, part 3610,and Part 3620 in order to simplifycertain paragraphs by amending orremoving confusing language. Changesproposed on bonding (§ 3610.1–5) willreduce unnecessary financial burden tosome operators, while assuring that theamount of bond required is not less thanthat projected for the reclamation work.Certificates of deposit issued byFederally insured financial institutionswould be acceptable as bonds. Suchcertificates of deposit would be held bythe BLM. Accrued interest would bereturned to the purchaser.

The principal author of this proposedrule is Dr. Durga N. Rimal of theResource Use and Authorization Team,assisted by the Regulatory ManagementTeam, BLM.

BLM has determined that thisproposed rule does not constitute amajor Federal action significantlyaffecting the quality of the humanenvironment, and that no detailedstatement pursuant to section 102(2)(C)of the National Environmental PolicyAct of 1969 (42 U.S.C. 4332(2)(C)) isrequired. The BLM has determined thatthis proposed rule is categoricallyexcluded from further environmentalreview pursuant to 516 DepartmentalManual (DM), Chapter 2, Appendix 1,Item 1.10, and that the proposal wouldnot significantly affect the ten criteriafor exceptions listed in 516 DM 2,Appendix 2. Pursuant to the Council ofEnvironmental Quality regulations (40CFR 1508.4) and environmental policiesand procedures of the Department of theInterior, ‘‘categorical exclusions’’ meansa category of actions which do notindividually or cumulatively have asignificant effect on the humanenvironment and which have beenfound to have no such effect inprocedures adopted by a Federal agencyand for which neither an environmental

assessment nor an environmentalimpact statement is required.

The proposed rule would have littleeffect on costs or prices for consumers,nor would there be a need for increasingFederal, State, or local agency budget orpersonnel requirements. The proposedrule will not have a gross annual effecton the economy of more than $100million, nor will it cause majorincreases in costs or prices for anyprivate or government section of theeconomy.

The Department has determinedunder the Regulatory Flexibility Act (5U.S.C. 601 et seq.) that this rule will nothave a significant economic impact ona substantial number of small entities.The BLM issues or manages anestimated 2,500 mineral materials salescontracts per year, valued at $4.4million. The percentage of small entitiesinvolved in these contracts is unknown.Small entities such as subcontractorsand local construction companies aswell as larger companies buy mineralmaterials. The proposal favors nodemographic group, imposes no director indirect costs on small entities, anddoes not change the application processand requirements of contract issuance,which do not favor or disfavor smallentities.

The Department certifies that thisproposed rule does not represent agovernmental action capable ofinterference with constitutionallyprotected property rights. The rule willresult in no taking of private property.As required by Executive Order 12630,the Department of the Interior hasdetermined that the rule will not causea taking of private property.

BLM has submitted the informationcollection requirement contained in thisrule to the Office of Management andBudget for approval as required by 44U.S.C. 3501 et seq. The collection of thisinformation would not be required untilit has been approved by the Office ofManagement and Budget.

List of Subjects for 43 CFR Parts 3600,3610, 3620

Government contracts, Public lands-mineral resources, Appraisal, Reportingand recordkeeping requirements, Suretybonds.

Under the authorities of the MaterialsAct of July 31, 1947, as amended (30U.S.C. 601, 602), Parts 3600, 3610, and3620, Group 3600, subchapter C,chapter II, subtitle B, title 43 of the Codeof Federal Regulations is proposed to beamended as follows:


PART 3600—MINERAL MATERIALSDISPOSAL; GENERAL


Authority: 30 U.S.C. 601, 602.

Subpart 3602—Disposal of MineralMaterials: General

2. Section 3602.1–3 is revised to readas follows:

§ 3602.1–3 Approval and modification ofmining and reclamation plans.

(a) After reviewing the mining andreclamation plans, the BLM willpromptly notify the applicant of anydeficiencies in the plans and willrecommend the changes necessary toprevent unnecessary or unduedegradation of the lands, and hazards topublic health and safety. Mining andreclamation plans as approved, will beattached to, and made a part of thecontract or permit.

(b) The permittee’s operation must notdeviate from the plan approved by theBLM.

(c) The BLM and the permittee mayagree to modify an approved mining orreclamation plan to adjust to changedconditions, or to correct any oversightthat could result in unnecessary orundue degradation. Any change must beconsistent with the requirements of§ 3601.1–3.

(d) When a permittee requests tochange an approved mining orreclamation plan, the BLM will reviewthe proposed modification and within30 days will notify the permittee of itsapproval, needed changes, or denial.

PART 3610—SALES

3. The authority citation for 43 CFRpart 3610 is revised to read as follows:


Subpart 3610—Mineral Material Sales

4. Section 3610.1–2 is amended byrevising paragraph (b) to read as follows:

§ 3610.1–2 Appraisal, reappraisal andmeasurements.

* * * * *(b) Two years after the contract or

reappraisals the BLM may reappraisethe value of mineral materials disposedof and adjust the contract priceaccordingly.* * * * *

5. Section 3610.1–5 is amended byrevising the heading and paragraph (a),amending paragraphs (b) by removingthe phrase ‘‘reclamation or’’ and (c)introductory text by removing thephrase ‘‘and reclamation’’, revising

paragraphs (c)(2) and (c)(3), and addingnew paragraph (c)(4), to read as follows:* * * * *

§ 3610.1–5 Performance bond.

(a) The BLM will require, for contractsof $2,000 or more, a performance bondof:

(1) at least 5 percent of total contractvalue, plus; and

(2) an amount large enough to meetthe reclamation standards provided forin the contract or permit, but at least$500. Where contract sales or permitsare made from a community pit and areclamation fee is paid by the permittee,BLM will not require this sum forreclamation for the bond amount.* * * * *

(c) * * *(2) Certificate of deposit which:(i) Is issued by a financial institution

whose deposits are Federally insured;(ii) Does not exceed the maximum

insurable amount set by Federal DepositInsurance Corporation;

(iii) Is made payable or assigned to theUnited States;

(iv) Grants the BLM authority todemand immediate payment for failureto meet the terms and conditions of thecontract or permit;

(v) Indicates that the BLM’s approvalis required before any party can redeemit; and

(vi) Otherwise conforms to BLM’sinstructions as found in the contractterms.

(3) Cash bond, with a power ofattorney to the BLM to convert it uponthe permittee’s failure to meet the termsand conditions of the contract or permit;or

(4) Negotiable Treasury bond of theUnited States of a par value equal to theamount of the required bond, togetherwith a power of attorney to the BLM tosell it upon the permittee’s failure tomeet the terms and conditions of thecontract or permit.* * * * *

§ 3610.3–2 [Amended]

6. In § 3610.3–2 paragraph (a) (7) isamended by removing the term‘‘require’’ and adding in its place‘‘required’’.

PART 3620— FREE USE

7. The authority citation for 43 CFRpart 3620 is revised to read as follows:


8. Sec. 3621.1–6 is revised to read asfollows:* * * * *

§ 3621.1–6 Performance bond.The BLM may require a bond to

guarantee faithful performance of theprovisions of the permit and applicableregulations.

Dated: July 8, 1996.Sylvia V. Baca,Deput Assistant Secretary for Land andMinerals Management.[FR Doc. 96–18945 Filed 8–1–96; 8:45 am]BILLING CODE 4310–84–P

FEDERAL COMMUNICATIONSCOMMISSION

47 CFR Part 20

[CC Docket No. 94–102: FCC 96–264]

Enhanced 911 Emergency CallingSystems

AGENCY: Federal CommunicationsCommission.ACTION: Proposed rule.

SUMMARY: The Commission adopts aReport and Order and Further Notice ofProposed Rulemaking regarding theavailability of the advanced emergencycapabilities of E911 systems to wirelessservice providers and customers. TheReport and Order portion of thisdecision is summarized elsewhere inthis issue of the Federal Register. TheFurther Notice of Proposed Rulemaking(FNPRM) seeks comment on a variety ofrelevant issues. The Commission alsotentatively concludes that coveredcarriers should continue to upgrade andimprove 911 service to increase itsaccuracy, availability, and reliability,and that a consumer education programshould be initiated to inform the publicof the capabilities and limitations of 911service. This action is taken to ensurethat E911 system performance keepspace with the latest technologies.DATES: Comments are due on or beforeAugust 26, 1996, and reply commentsare due on or before September 10,1996. Written comments by the publicon the proposed and/or modifiedinformation collections are due byAugust 26, 1996. Written commentsmust be submitted by the Office ofManagement and Budget (OMB) on theproposed and/or modified informationcollections on or before October 1, 1996.ADDRESSES: Federal CommunicationsCommission, Washington, D.C. 20554.In addition to filing comments with theSecretary, a copy of any comments onthe information collections containedherein should be submitted to DorothyConway, Federal CommunicationsCommission, Room 234, 1919 M Street,N.W., Washington, DC 20554, or via the


1 The term ‘‘non-code identification,’’ when usedin this decision in conjunction with 911 calls,means (1) in the case of calls transmitted over thefacilities of a covered carrier other than aSpecialized Mobile Carrier that is subject to therequirements of this Order, a call originated froma mobile unit which does not have a MobileIdentification Number (MIN); and (2) in the case ofcalls transmitted over the facilities of a SpecializedMobile Carrier that is subject to the requirementsof this Order, a call originated from a mobile unitthat does not have the functional equivalent of aMIN.

Internet to [email protected], and toTimothy Fair, OMB Desk Officer, 10236NEOB, 725—17th Street, N.W.,Washington, DC 20503, or via theInternet to [email protected] FURTHER INFORMATION CONTACT:Peter Wolfe, WirelessTelecommunications Bureau (202) 418–1310. For additional informationconcerning the information collectionscontained in this FNPRM, contactDorothy Conway at 202–418–0217, orvia the Internet at [email protected] INFORMATION: This is asynopsis of the Further Notice ofProposed Rulemaking segment of theReport and Order and Further Notice ofProposed Rulemaking in CC Docket No.94–102, FCC 96–264, adopted June 12,1996, and released July 26, 1996. TheReport and Order portion of thisdecision is summarized elsewhere inthis edition of the Federal Register. Thecomplete text of this decision isavailable for inspection and copyingduring normal business hours in theFCC Reference Center (Room 239), 1919M Street, N.W., Washington, D.C., andalso may be purchased from theCommission’s copy contractor,International Transcription Service,(202) 857–3800, 2100 M Street, NW.,Suite 140, Washington, DC 20037. ThisFNPRM contains proposed or modifiedinformation collections subject to thePaperwork Reduction Act of 1995(PRA). It has been submitted to theOffice of Management and Budget(OMB) for review under the PRA. OMB,the general public, and other Federalagencies are invited to comment on theproposed or modified informationcollections contained in thisproceeding.

Synopsis of Further Notice of ProposedRulemaking

1. In this Report and Order andFurther Notice of Proposed Rulemaking,the Commission takes several importantsteps to foster major improvements inthe quality and reliability of 911services available to the customers ofwireless telecommunications serviceproviders. The Notice of ProposedRulemaking initiating this proceedingmay be found at 59 FR 54878, November2, 1994. The Commission issues theFNPRM to develop additional means ofensuring that improvements madepossible by technological advances areincorporated into E911 systems. TheFNPRM portion of the decisionrepresents the Commission desire toensure continuity of our dedication tonew and innovative 911 services byseeking comment on further refinementsof the Commission’s wireless 911 rules.

2. The FNPRM first seeks comment onpossible approaches to avoid customerconfusion that could be generated by asystem under which customers in thesame geographic area may or may not beable to complete non-codeidentification 1 911 calls dependingupon the practices of the various PublicSafety Answering Points (PSAPs)serving that area. Specifically, theCommission requests commentregarding whether, within a reasonabletime after the one-year period, PSAPsshould no longer have the option torefuse to accept non-code identification911 calls. Thus, covered carriers wouldbe obligated to transmit all 911 calls toPSAPs.

3.The Commission next tentativelyconcludes that covered carriers shouldcontinue to upgrade and improve 911service to increase its accuracy,availability, and reliability, while alsorecognizing that our rules should ensurethat covered carriers’ development andapplication of new technologies forE911 services also contribute to theoverall quality of service and range ofservices that carriers provide to all theircustomers. These efforts will ensure thatthe public benefits from technologicalinnovations, through the application ofthose innovations to public safetyneeds.

4. The Commission seeks comment ona range of related issues, including thefollowing: (1) Should covered carriersprovide PSAPs information that locatesa wireless 911 caller within a radius of40 feet, using longitude, latitude, andaltitude data, and that provides thisdegree of accuracy for 90 percent of the911 calls processed? (2) Should wirelessservice providers be required to supplylocation information to the PSAPregarding a 911 caller within a certainnumber of seconds after the 911 call ismade? (3) Should wireless serviceproviders be required to update thislocation information throughout theduration of the call? (4) What stepscould be taken to enable 911 calls to becompleted or serviced by mobile radiosystems regardless of the availability (inthe geographic area in which a mobileuser seeks to place a 911 call) of the

system or technology utilized by theuser’s wireless service?

5. The Commission also tentativelyconcludes that a consumer educationprogram should be initiated to informthe public of the capabilities andlimitations of 911 service, and we seekcomment regarding the scope of such aprogram and carrier obligations thatcould be established in connection withsuch a program. One purpose of such aprogram would be to address a concernthat consumers currently may not havea sufficient understanding oftechnological limitations that canimpede transmission of wireless 911calls and the delivery of emergencyassistance.

Administrative Matters6. Pursuant to applicable procedures

set forth in Sections 1.415 and 1.419 ofthe Commission’s Rules, 47 CFR 1.415and 1.419, interested parties may filecomments on or before August 26, 1996,and reply comments on or beforeSeptember 10, 1996. To file formally inthis proceeding, you must file anoriginal plus four copies of allcomments, reply comments, andsupporting comments. If you want eachCommissioner to receive a personalcopy of your comments, you must filean original plus nine copies. You shouldsend comments and reply comments toOffice of the Secretary, FederalCommunications Commission,Washington, D.C. 20554. Comments andreply comments will be available forpublic inspection during regularbusiness hours in the FCC ReferenceCenter (Room 239), 1919 M Street, N.W.,Washington, D.C. 20554.

7. This is a non-restricted notice andcomment rulemaking proceeding. Exparte presentations are permitted,except during the Sunshine Agendaperiod, provided they are disclosed asprovided in the Commission Rules. Seegenerally 47 CFR 1.1202, 1.1203, and1.1206(a).

Paperwork Reduction Act8. This FNPRM contains either a

proposed or modified informationcollection. The Commission, as part ofits continuing effort to reduce paperwokburdens, invites the general public andthe Office of Management and Budget(OMB) to comment on the informationcollections contained in this FNPRM, asrequired by the Paperwork ReductionAct of 1995, Public Law No. 104–13.Public and agency comments are due atthe same time as other comments onthis FNPRM; OMB notification of actionis due October 1, 1996. Commentsshould address: (a) whether theproposed collection of information is


necessary for the proper performance ofthe functions of the Commission,including whether the information shallhave practical utility; (b) the accuracy ofthe Commission’s burden estimates; (c)ways to enhance the quality, utility, andclarity of the information collected; and(d) ways to minimize the burden of thecollection of information on therespondents, including the use ofautomated collection techniques orother forms of information technology.

OMB Approval Number:Title: Consumer Education

Concerning Wireless 911.Form No.:Type of Review: New collection.Respondents: Cellular, broadband

PCS, and certain SMR carriers subject tothe proposed rule.

Number of Respondents: 2,500.Estimated Time Per Response: 30

Minutes—1 Hour.Total Annual Burden: 1,562.5 Hours.Needs and Uses: The information will

be used by consumers to determinerationally and accurately the scope oftheir options in accessing 911 servicesfrom mobile handsets.

Initial Regulatory Flexibility ActStatement

9. As required by Section 603 of theRegulatory Flexibility Act, theCommission has prepared an InitialRegulatory Flexibility Analysis (IRFA)of the expected impact on small entitiesof the proposals suggested in thisdocument. Written public comments arerequested on the IRFA. These commentsmust be filed in accordance with thesame filing deadlines as comments onthe rest of this Further Notice ofProposed Rulemaking, but they musthave a separate and distinct headingdesignating them as responses to theInitial Regulatory Flexibility Analysis.The Secretary shall send a copy of thisFurther Notice of Proposed Rulemaking,including the Initial RegulatoryFlexibility Analysis, to the ChiefCounsel for Advocacy of the SmallBusiness Administration in accordancewith paragraph 603(a) of the RegulatoryFlexibility Act. Public Law No. 96–354,94 Stat. 1164, 5 U.S.C. Section 601 etseq. (1981).

Initial Regulatory Flexibility AnalysisFor Further Notice of ProposedRulemaking

I. Reason for Action

10. This FNPRM responds to thepetition submitted by the Ad HocAlliance for Public Access to 911 toamend the Commission’s Rules torequire that all newly constructedmobile and portable units be equipped

to select the strongest signal whenevera 911 call is placed. Telephone stationsfor wireless services are not adequatelyidentifying caller location to permit atimely response by emergency servicespersonnel and are not providing 911service for all caller locations.

II. Objectives and Legal Basis forProposed Rules

11. One objective of this FNPRM is tocollect additional information on thetechnical issues related to theimprovement of wireless E911 services,including higher accuracy standards forthe Automatic Location Identification(ALI), a latency period requirement, andthe provision of 911 services withoutinterruption where one wirelessprovider does not provide complete areacoverage. Another objective is to collectinformation with respect to informingconsumers what their wireless phonescan and cannot do. A third objective isto determine whether all 911 callsshould be transmitted without anypreconditions.

12. The proposed action is authorizedunder Sections 1, 4(i), 201, 208, 215,303, 309 of the Communications Act of1934, as amended, 47 U.S.C. 151, 154(i),201, 208, 215, 303, 309.

III. Description and Estimate of SmallEntities Subject to the Rules

13. The proposed changes in theregulations will apply to providers ofcellular, broadband PCS, and geographicarea 800 MHz and 900 MHz specializedmobile radio services, includinglicensees who have extendedimplementation authorizations in the800 MHz or 900 MHz SMR services,either by waiver or under Section90.629 of the Commission’s Rules.However, the rule will apply to SMRlicensees only if they offer real-time,two-way voice service that isinterconnected with the public switchednetwork.

14. In the full text of this decision, wehave estimated the number of smallentities for each category, or elsestipulated that all providers are smallentities where we were unable to makean estimate. We request comment onwhether these estimates should beimproved or refined. We especiallyrequest comment on the number ofsmall entities in the categories that wewere unable to estimate, i.e., cellularservice providers; PCS service providersin the D, E, and F Blocks; 800 MHzgeographic area SMR licensees; andproviders of 800 MHz or 900 MHzgeographic area SMR service pursuantto waiver or pursuant to Section 90.629of our rules.

IV. Reporting, Recordkeeping, and OtherCompliance Requirements

15. Commercial mobile radio serviceswill be required to improve the accuracyand time of the identification of thelocation of mobile transmitters and topermit interoperability of their 911service with those of their competitorsand to provide consumer educationmaterials. Equipment used forcommercial mobile radio services willhave to be capable of providing thisinformation to the local telephoneexchanges to which they are connected.Local telephone exchanges will incurcosts storing and relaying thisinformation to E911 public safetyanswering points. We request commentwith respect to ways in which theseproposed requirements can be modifiedto reduce the burden on small entitiesand at the same time meet the objectivesof this proceeding.

V. Significant Alternatives Consideredand Rejected

16. The Commission concluded that itis also necessary to begin the task ofexploring the need for further action tospur improvements in the features anddelivery of the 911 and E911 services.We believe that continuing involvementof the Commission in developing rulesthat take the resources of smallbusinesses into account as well as thepublic safety needs are in the publicinterest. Therefore, the Commissionrejected alternative proposals that thefuture development of the E911technologies should be left to the marketforces and the industry without theCommission’s involvement.

17. The Commission considered andrejected proposals that the rules shouldbe expanded to apply to all providers ofCommercial Mobile Radio Services(CMRS) because not all CMRS servicesare mass market voice services whoseusers expect to be able to use them tocall 911. Specifically, the Commissionbelieves that the costs of requiring localSMR services and 220 MHz licenseesoperating on 5 kHz channels to complywith the proposed rules wouldoutweigh the benefits and application ofthe proposed rules to them, and wouldgive them an incentive to eliminate theirinterconnection to the public network,which would not be in the publicinterest. Similarly, because it is notcertain how multilateration Locationand Monitoring Service (LMS) willdevelop, we concluded that it ispremature to propose to require suchlicensees to provide E911 at this time.In the future if these wireless serviceproviders not covered by the currentrules develop into a mobile telephone


service like cellular or broadband PCS,we may revisit this decision.

18. The Commission considered andrejected proposals to adopt a specifictechnology for providing ALI, becausewe believe that various technologies arecurrently under development which canprovide more advanced public safetytechnology than those that are currentlyavailable. The Commission alsoconsidered and rejected proposals toadopt rules to require a minimumlatency period to locate 911 callers atthis time, because the record isinsufficient to determine the technicalfeasibility and the costs ofimplementing such requirements,especially the financial impact on smallbusiness entities. The Commissioninstead decided to seek comment onthese proposals, including the benefitsand feasibility of such requirements.

VI. Federal Rules That Overlap,Duplicate, or Conflict with TheseProposed Rules

19. There are no Federal rules whichoverlap, duplicate, or conflict with therules we are proposing.


Communications common carriers,Federal Communications Commission.Federal Communications Commission.William F. Caton,Acting Secretary.[FR Doc. 96–19661 Filed 8–1–96; 8:45 am]BILLING CODE 6712–01–P



50 CFR Part 216

[Docket No. 960318084–6199–02; I.D.071596C]

RIN 0648–AG55

Taking and Importing MarineMammals; Taking Marine MammalsIncidental to Naval Activities

AGENCY: National Marine FisheriesService (NMFS), National Oceanic andAtmospheric Administration (NOAA),Commerce.ACTION: Proposed rule; notice of publicmeetings and request for comments.

SUMMARY: NMFS has received anapplication from the U.S. Navy for anincidental small take exemption underthe Marine Mammal Protection Act(MMPA) to take a small number ofmarine mammals incidental to shocktesting the USS SEAWOLF submarine in

the offshore waters of the U.S. Atlanticcoast in 1997. By this notice, NMFS isproposing regulations to govern thattake. NMFS also announces the times,dates, and locations of public meetingsin order to receive comments from thegeneral public on the Navy applicationand the proposed regulations. In orderto grant the exemption and issue theregulations, NMFS must determine thatthese takings will have a negligibleimpact on the affected species andstocks of marine mammals. NMFSinvites comment on the application andthe proposed regulations.DATES: Comments must be received nolater than September 17, 1996. Publicmeetings are scheduled as follows:1. August 19, 1996, 10 a.m.–4 p.m.

Silver Spring, MD.2. August 20, 1996, 7–10 p.m. Norfolk,

VA.3. August 21, 1996, 7–10 p.m. Atlantic

Beach, FL.ADDRESSES: Comments should beaddressed to Chief, Marine MammalDivision, Office of Protected Resources,National Marine Fisheries Service, 1315East-West Highway, Silver Spring, MD20910–3226. A copy of the applicationmay be obtained by writing to the aboveaddress, telephoning the person below(see FOR FURTHER INFORMATION CONTACT)or by leaving a voice mail request at(301) 713–4070. A copy of the draftenvironmental impact statement (draftEIS) may be obtained from Will Sloger,U.S. Navy, at (803) 820–5797.

The public meetings will be held atthe following locations:1. Norfolk—Lafayette Winona Middle

School auditorium, 1701 AlsaceAvenue, Norfolk, VA.

2. Atlantic Beach—Mayport MiddleSchool cafeteria, 2600 Mayport Road,Atlantic Beach, FL.

3. Silver Spring—Silver Spring MetroCenter Building 4, 1st floor, 1305East-West Highway, Silver Spring,MD.Comments regarding the burden-hour

estimate or any other aspect of thecollection of information requirementcontained in this rule should be sent tothe above individual and to the Officeof Information and Regulatory Affairs,Office of Management and Budget(OMB), Attention: NOAA Desk Officer,Washington, D.C. 20503.FOR FURTHER INFORMATION CONTACT:Kenneth R. Hollingshead, NMFS, (301)713–2055.


Background

Section 101(a)(5)(A) of the MMPA (16U.S.C. 1361 et seq.) directs NMFS to

allow, upon request, the incidental, butnot intentional taking of marinemammals by U.S. citizens who engagein a specified activity (other thancommercial fishing) within a specifiedgeographical region if certain findingsare made and regulations are issued.

Permission may be granted for periodsof 5 years or less if NMFS finds that thetaking will have a negligible impact onthe species or stock(s) of marinemammals, will not have an unmitigableadverse impact on the availability ofthese species for subsistence uses, andregulations are prescribed setting forththe permissible methods of taking andthe requirements pertaining to themonitoring and reporting of such taking.

Summary of RequestOn June 7, 1996, NMFS received an

application for an incidental, small takeexemption under section 101(a)(5)(A) ofthe MMPA from the U.S. Navy to takemarine mammals incidental to shocktesting the USS SEAWOLF submarineoff the U.S. Atlantic coast. The USSSEAWOLF is the first of a new class ofsubmarines being acquired by the Navy.In accordance with 10 U.S.C. 2366, eachnew class of ships constructed for theNavy cannot proceed beyond initialproduction until realistic survivabilitytesting of the ship and its componentsare completed. Realistic survivabilitytesting means testing for vulnerability incombat by firing munitions likely to beencountered in combat. This testing andassessment is commonly referred to as‘‘Live Fire Test & Evaluation (LFT&E).’’Because realistic testing by detonatingtorpedoes or mines against a ship’s hullcould result in the loss of a multi-billiondollar Navy asset, the Navy hasestablished an LFT&E programconsisting of computer modeling,component and surrogate testing, andshock testing the entire ship. Together,these components complete thesurvivability testing as required by 10U.S.C. 2366.

The shock test component of LFT&Eis a series of underwater detonationsthat propagate a shock wave through aship’s hull under deliberate andcontrolled conditions. Shock testssimulate near misses from underwaterexplosions similar to those encounteredin combat. Shock testing verifies theaccuracy of design specifications forshock testing ships and systems,uncovers weaknesses in shock sensitivecomponents that may compromise theperformance of vital systems, andprovides a basis for correctingdeficiencies and upgrading ship andcomponent design specifications. Whilecomputer modeling and laboratorytesting provide useful information, they


1 Blaylock, Robert A., James W. Hain, Larry J.Hansen, Debra L. Palka, and Gordon T. Waring.1995. U.S. Atlantic and Gulf of Mexico MarineMammal Stock Assessments. NOAA TechnicalMemorandum NMFS–SEFC–363. 211 pp.

cannot substitute for shock testingunder realistic, offshore conditions. Tominimize cost and risk to personnel, thefirst ship in each new class is shocktested and improvements are applied tolater ships of the class.

The Navy proposes to shock test theUSS SEAWOLF by detonating a single4,536-kg (10,000-lb) explosive chargenear the submarine once per week overa 5-week period between April 1 andSeptember 30, 1997. If the Mayport, FLsite is selected, the shock tests would beconducted between May 1 andSeptember 30, 1997 in order tominimize risk to sea turtles. Detonationswould occur 30 m (100 ft) below theocean surface in a water depth of 152 m(500 ft). The USS SEAWOLF would beunderway at a depth of 20 m (65 ft) atthe time of the test. For each test, thesubmarine would move closer to theexplosive so the submarine wouldexperience a more severe shock.

As part of a separate review under theNational Environmental Policy Act(NEPA), two sites are being consideredby the Navy for the USS SEAWOLFshock test effort. The Mayport site islocated on the continental shelf ofGeorgia and northeast Florida and theNorfolk site is located on thecontinental shelf offshore of Virginiaand North Carolina. The Mayport site isthe preferred location because of a lowerabundance of marine mammals at thatsite. Because of the potential impact tomarine mammals, the Navy hasrequested NMFS to grant an exemptionunder section 101(a)(5)(A) of the MMPAthat would authorize the incidentaltaking and issue regulations governingthe take.

Comments

On June 14, 1996 (61 FR 30212),NMFS published a notice of receipt ofthe Navy’s application for a small takeexemption and requested comments,information and suggestions concerningthe request and the structure andcontent of regulations to govern thetake. The comment period closed onJuly 15, 1996, but no comments werereceived.

Description of Habitat and MarineMammals Affected by Shock Testingthe USS SEAWOLF

A description of the U.S. Atlanticcoast environment, its marine life andmarine mammal abundance,distribution and habitat can be found inthe draft EIS on this subject and is notrepeated here. Additional informationon Atlantic coast marine mammals can

be found in Blaylock et al. (1995).1These documents are available uponrequest.

Summary of Potential ImpactsPotential impacts to the several

marine mammal species known to occurin these areas from shock testinginclude both lethal and non-lethalinjury, as well as harassment. Death orinjury may occur as a result of theexplosive blast, and harassment mayoccur as a result of non-injuriousphysiological responses to theexplosion-generated shockwave and itsacoustic signature. The Navy believes itis very unlikely that injury will occurfrom exposure to the chemical by-products released into the surfacewaters, and no permanent alteration ofmarine mammal habitat would occur.While the Navy does not anticipate anylethal takes would result from thesedetonations, theoretical calculationsindicate that the Mayport site has thepotential to result in 1 lethal take, 5injurious takes, and 570 harassmenttakes, while the Norfolk site has thepotential to result in 8 lethal takes, 38injurious takes, and 4,819 harassmenttakes. Detailed descriptions on thedefinitions of take categories;calculation of ranges for potentialmortality, injury, and harassment;incidental take calculations; andimpacts on marine mammal habitat canbe found in the Navy application, whichis available upon request (seeADDRESSES).

Summary of Proposed Mitigation andMonitoring Measures

The Navy’s proposed action includesmitigation that would minimize risk tomarine mammals and sea turtles. TheNavy would: (1) Through pre-detonationaerial surveys, select a test area withpotentially, the lowest number ofmarine mammals and turtles; (2)monitor the area visually (aerial andshipboard monitoring) and acousticallybefore each test and postponedetonation if either (a) any marinemammal or sea turtle is detected withina safety zone of 3.8 km (2.05 nmi) or abuffer zone of an additional 1.8 km (0.05nmi), or (b) the sea state exceedsBeaufort 4 (i.e., wind velocity >16 kt), orthe visibility is not 1.85 km (1 nmi) orgreater and the ceiling is not 305 m(1,000 ft) or greater; and (3) monitor thearea after each test to find and treat anyinjured animals. If post-detonationmonitoring shows that marine mammals

or sea turtles were killed or injured asa result of the test, testing would behalted until procedures for subsequentdetonations could be reviewed andchanged as necessary.

A detailed description on theproposed measures for mitigation andmonitoring the shock test can be foundin the Navy application and draft EIS,which are available upon request (seeADDRESSES).

Reporting

Within 120 days of the completion ofshock testing, the Navy would berequired to submit a final report toNMFS. This report must include thefollowing information: (1) Date and timeof each of the detonations; (2) a detaileddescription of the pre-test and post-testactivities related to mitigating andmonitoring the effects of explosivesdetonation on marine mammals andtheir populations; (3) the results of themonitoring program, including numbersby species/stock of any marinemammals noted injured or killed as aresult of the detonations and numbersthat may have been harassed due toundetected presence within the safetyzone; and (4) results of coordinationwith coastal marine mammal/sea turtlestranding networks.

Preliminary Conclusions

While NMFS believes that detonationof five 4,536-kg (10,000-lb) charges mayaffect some marine mammals, the latestabundance and seasonal distributionestimates indicate that such taking willhave a negligible impact on thepopulations of marine mammalsinhabiting the waters of the U.S.Atlantic Coast. NMFS concurs with theU.S. Navy that impacts can be mitigatedby mandating a conservative safetyrange for marine mammal exclusion,incorporating aerial and acoustic surveymonitoring efforts in the program bothprior to, and after detonation ofexplosives, and provided detonationsare not conducted whenever marinemammals are detected within the safetyzone, or if weather and sea conditionspreclude adequate aerial surveillance.

NEPA

On June 14, 1996 (61 FR 30232), theEnvironmental Protection Agency notedthe availability for public review andcomment a draft EIS prepared by theU.S. Navy under NEPA on this action.NMFS is a cooperating agency asdefined by the Council onEnvironmental Quality regulations (40CFR 1501.6).


Endangered Species Act (ESA)

NMFS will be consulting with theU.S. Navy under section 7 of the ESAfor this action. In that regard, the Navysubmitted to NMFS a BiologicalAssessment under the ESA. Thisconsultation will be concluded prior toa determination on issuance of a finalrule and exemption.

Classification

This action has been determined to benot significant for purposes of E.O.12866.

The Assistant General Counsel forLegislation and Regulation of theDepartment of Commerce certified tothe Small Business Administration thatthis proposed rule, if adopted, wouldnot have a significant economic impacton a substantial number of small entitiessince it would apply only to the U.S.Navy and would have no effect, directlyor indirectly, on small businesses.

This proposed rule containscollection-of-information requirementssubject to the provisions of thePaperwork Reduction Act (PRA). Thiscollection has been approved previouslyby OMB under section 3504(b) of thePRA issued under OMB Control No.0648–0151. Notwithstanding any otherprovision of law, no person is requiredto respond to nor shall a person besubject to a penalty for failure to complywith a collection of information subjectto the requirements of the PRA unlessthat collection of information displays acurrently valid OMB control number.

The reporting burden for thiscollection is estimated to beapproximately 80 hours, including thetime for gathering and maintaining thedata needed, and completing andreviewing the collection of information.It does not include time for monitoringthe activity by observers. Sendcomments regarding these reportingburden estimates or any other aspect ofthe collections of information, includingsuggestions for reducing the burdens, toNMFS and OMB (see ADDRESSES).


Administrative practice andprocedure, Imports, Indians, Marinemammals, Penalties, Reporting andrecordkeeping requirements,Transportation.

Dated: July 30, 1996.Charles Karnella,Acting Director, Office of OperationsManagement Information.

For reasons set forth in the preamble,50 CFR part 216 is proposed to beamended as follows:

PART 216—REGULATIONSGOVERNING THE TAKING ANDIMPORTING OF MARINE MAMMALS



2. Subpart O is added to read asfollows:

Subpart O—Taking of Marine MammalsIncidental to Shock Testing the USSSEAWOLF by Detonation of ConventionalExplosives in the Offshore Waters of theU.S. Atlantic CoastSec.216.161 Specified activity, geographical

region and incidental take levels.216.162 Effective dates.216.163 Permissible methods of taking;

mitigation.216.164 Prohibitions.216.165 Requirements for monitoring and

reporting.216.166 Modifications to the Letter of

Authorization.216.167–216.169 [Reserved]

Subpart O—Taking of Marine MammalsIncidental to Shock Testing the USSSEAWOLF by Detonation ofConventional Explosives in theOffshore Waters of the U.S. AtlanticCoast

§ 216.161 Specified activity, geographicalregion, and incidental take levels.

(a) Regulations in this subpart applyonly to the incidental taking of marinemammals specified in paragraph (b) ofthis section by U.S. citizens engaged inthe detonation of conventional militaryexplosives within the waters of the U.S.Atlantic Coast offshore Mayport, FL orNorfolk, VA for the purpose of shocktesting the USS SEAWOLF.

(b) The incidental take of marinemammals under the activity identifiedin paragraph (a) of this section is limitedto the following species: Blue whale(Balaenoptera musculus); fin whale (B.physalus); sei whale (B. borealis);Bryde’s whale (B. edeni); minke whale(B. acutorostrata); humpback whale(Megaptera novaeangliae); northernright whale (Eubalaena glacialis); spermwhale (Physeter macrocephalus); dwarfsperm whale (Kogia simus); pygmysperm whale (K. breviceps); pilot whales(Globicephala melas, G.macrorhynchus); Atlantic spotteddolphin (Stenella frontalis); Pantropicalspotted dolphin (S. attenuata); stripeddolphin (Stenella coeruleoalba); spinnerdolphin (S. longirostris); Clymenedolphin (S. clymene); bottlenosedolphin (Tursiops truncatus); Risso’sdolphin (Grampus griseus); rough-toothed dolphin (Steno bredanensis);killer whale (Orcinus orca); false killerwhale (Pseudorca crassidens); pygmy

killer whale (Feresa attenuata); Fraser’sdolphin (Lagenodelphis hosei); harborporpoise (Phocoena phocoena); melon-headed whale (Peponocephala electra);northern bottlenose whale (Hyperoodonampullatus); Cuvier’s beaked whale(Ziphius cavirostris), Blainville’s beakedwhale (Mesoplodon densirostris);Gervais’ beaked whale (M. europaeus);Sowerby’s beaked whale (M. bidens);True’s beaked whale (M. mirus);common dolphin (Delphinus delphis);Atlantic white-sided dolphin(Lagenorhynchus acutus); and harborseals (Phoca vitulina).

(c) The incidental take of marinemammals identified in paragraph (b) ofthis section is limited to a total of 8mortalities, 38 injuries and 4,819harassment takes for detonations in theNorfolk, VA area, or 1 mortality, 5injuries and 570 harassment takes fordetonations in the Jacksonville, FL area,except that the taking by serious injuryor mortality for species listed inparagraph (b) of this section that are alsolisted as threatened or endangeredunder § 17.11 of this title, is prohibited.

§ 216.162 Effective dates.

Regulations in this subpart areeffective from April 1, 1997, throughSeptember 30, 1997.

§ 216.163 Permissible methods of taking;mitigation.

(a) Under a Letter of Authorizationissued pursuant to § 216.106, the U.S.Navy may incidentally, but notintentionally, take marine mammals byharassment, injury or mortality in thecourse detonating five 4,536 kg (10,000lb) conventional explosive chargeswithin the area described in § 216.161(a)provided all terms, conditions, andrequirements of the regulations in thissubpart and such Letter ofAuthorization are complied with.

(b) The activity identified inparagraph (a) of this section must beconducted in a manner that minimizes,to the greatest extent possible, adverseimpacts on marine mammals and theirhabitat. When detonating explosives,the following mitigation measures mustbe utilized:

(1) If marine mammals are observedwithin the designated safety zoneprescribed in the Letter ofAuthorization, or within the buffer zoneprescribed in the Letter of Authorizationand on a course that will put themwithin the safety zone prior todetonation, detonation must be delayeduntil the marine mammals are no longerwithin the safety zone or on a course


within the buffer zone that is takingthem away from the safety zone.

(2) If weather and/or sea conditions asdescribed in the Letter of Authorizationpreclude adequate aerial surveillance,detonation must be delayed untilconditions improve sufficiently foraerial surveillance to be undertaken.

(3) If post-test surveys determine thatan injurious or lethal take of a marinemammal has occurred, the testprocedure and the monitoring methodsmust be reviewed and appropriatechanges must be made prior toconducting the next detonation.

§ 216.164 Prohibitions.Notwithstanding takings authorized

by § 216.161(b) and by a Letter ofAuthorization issued under § 216.106,the following activities are prohibited:

(a) The taking of a marine mammalthat is other than unintentional.

(b) The violation of, or failure tocomply with, the terms, conditions, andrequirements of this part or a Letter ofAuthorization issued under § 216.106.

(c) The incidental taking of anymarine mammal of a species notspecified in this subpart.

§ 216.165 Requirements for monitoringand reporting.

(a) The holder of the Letter ofAuthorization is required to cooperatewith the National Marine FisheriesService and any other Federal, state orlocal agency monitoring the impacts ofthe activity on marine mammals. Theholder must notify the appropriateRegional Director at least 2 weeks priorto activities involving the detonation ofexplosives in order to satisfy paragraph(f) of this section.

(b) The holder of the Letter ofAuthorization must designate qualifiedon-site individuals, as specified in theLetter of Authorization, to record theeffects of explosives detonation onmarine mammals that inhabit theAtlantic Ocean test area.

(c) The Atlantic Ocean test area mustbe surveyed by marine mammalbiologists and other trained individuals,and the marine mammal populationsmonitored, approximately 3 weeks priorto detonation, 48–72 hours prior to ascheduled detonation, on the day ofdetonation, and for a period of timespecified in the Letter of Authorizationafter each detonation. Monitoring shallinclude, but not necessarily be limitedto, aerial and acoustic surveillancesufficient to ensure that no marinemammals are within the designatedsafety zone nor are likely to enter thedesignated safety zone prior to or at thetime of detonation.

(d) Under the direction of a certifiedmarine mammal veterinarian,

examination and recovery of any deador injured marine mammals will beconducted. Necropsies will beperformed and tissue samples takenfrom any dead animals. Aftercompletion of the necropsy, animals notretained for shoreside examination willbe tagged and returned to the sea. Theoccurrence of live marine mammals willalso be documented.

(e) Activities related to the monitoringdescribed in paragraphs (c) and (d) ofthis section, or in the Letter ofAuthorization issued under § 216.106,including the retention of marinemammals, may be conducted withoutthe need for a separate scientificresearch permit. The use of retainedmarine mammals for scientific researchother than shoreside examination mustbe authorized pursuant to subpart D ofthis part.

(f) In coordination and compliancewith appropriate Navy regulations, at itsdiscretion, the National MarineFisheries Service may place an observeron any ship or aircraft involved inmarine mammal reconnaissance, ormonitoring either prior to, during, orafter explosives detonation in order tomonitor the impact on marinemammals.

(g) A final report must be submittedto the Director, Office of ProtectedResources, no later than 120 days aftercompletion of shock testing the USSSEAWOLF. This report must contain thefollowing information:

(1) Date and time of all detonationsconducted under the Letter ofAuthorization.

(2) A description of all pre-detonationand post-detonation activities related tomitigating and monitoring the effects ofexplosives detonation on marinemammal populations.

(3) Results of the monitoring program,including numbers by species/stock ofany marine mammals noted injured orkilled as a result of the detonation andnumbers that may have been harasseddue to presence within the designatedsafety zone.

(4) Results of coordination withcoastal marine mammal/sea turtlestranding networks.

§ 216.166 Modifications to the Letter ofAuthorization.

(a) In addition to complying with theprovisions of § 216.106, except asprovided in paragraph (b) of thissection, no substantive modification,including withdrawal or suspension, tothe Letter of Authorization issuedpursuant to § 216.106 and subject to theprovisions of this subpart shall be madeuntil after notice and an opportunity forpublic comment.

(b) If the Assistant Administratordetermines that an emergency existsthat poses a significant risk to the well-being of the species or stocks of marinemammals specified in § 216.161(b), orthat significantly and detrimentallyalters the scheduling of explosivesdetonation within the area specified in§ 216.161(a), the Letter of Authorizationissued pursuant to § 216.106 may besubstantively modified without priornotice and an opportunity for publiccomment. A notice will be published inthe Federal Register subsequent to theaction.

§§ 216.167–216.169 [Reserved]

[FR Doc. 96–19659 Filed 8–1–96; 8:45 am]BILLING CODE 3510–22–W

50 CFR Part 679

[Docket No. 960717195–6195–01; I.D.070196E]

RIN 0648–AI95

Fisheries of the Exclusive EconomicZone Off Alaska; North PacificFisheries Research Plan; InterimGroundfish Observer Program

AGENCY: National Marine FisheriesService (NMFS), National Oceanic andAtmospheric Administration (NOAA),Commerce.ACTION: Proposed rule; request forcomments.

SUMMARY: NMFS issues a proposed rulethat would implement Amendment 47to the Fishery Management Plan forGroundfish of the Gulf of Alaska,Amendment 47 to the FisheryManagement Plan for the GroundfishFishery of the Bering Sea and AleutianIslands Area (Groundfish FMPs), andAmendment 6 to the FisheryManagement Plan for the CommercialKing and Tanner Crab Fisheries in theBering Sea and Aleutian Islands Area(Crab FMP). This action also wouldrepeal regulations implementing theNorth Pacific Fisheries Research Plan(Research Plan). This action is necessaryto respond to the North Pacific FisheryManagement Council’s (Council)recommendation to repeal the ResearchPlan and implement Amendments 47and 47 to the Groundfish FMPs toestablish mandatory groundfishobserver coverage requirements through1997. Amendment 6 to the Crab FMPwould remove reference to the ResearchPlan. This action is intended toestablish an Interim GroundfishObserver Program until a long-termprogram that addresses concerns aboutobserver data integrity, equitabledistribution of observer coverage costs,


and observer compensation and workingconditions is recommended by theCouncil and implemented by NMFS.DATES: Comments must be received bySeptember 16, 1996.ADDRESSES: Comments should be sent toRonald J. Berg, Chief, FisheriesManagement Division, Alaska Region,NMFS, P.O. Box 21668, Juneau, AK99802, Attn: Lori J. Gravel, or deliveredto the Federal Building, 709 W. 9thStreet, Juneau, AK.

Copies of the EnvironmentalAssessment/Regulatory Impact Review/Initial Regulatory Flexibility Analysis(EA/RIR/IRFA) prepared for theproposed Interim Groundfish ObserverProgram may be obtained from theNorth Pacific Fishery ManagementCouncil, Suite 306, 605 West 4thAvenue, Anchorage, AK 99501–2252;telephone: 907–271–2809. Sendcomments regarding burden estimates orany other aspect of the datarequirements, including suggestions forreducing the burdens, to NMFS and tothe Office of Information and RegulatoryAffairs, Office of Management andBudget (OMB), Washington, D.C. 20503,Attn: NOAA Desk Officer.

Copies of the Observer Plan andinformation regarding observerqualifications, observer training/briefingrequirements, and NMFS’ selectioncriteria for observer contractors areavailable from the Observer ProgramOffice, Alaska Fisheries Science Center,Building 4, 7600 Sand Point WayNortheast, Seattle, WA 98115,telephone: 206–526–4197.FOR FURTHER INFORMATION CONTACT: KimS. Rivera, 907–586–7228.


Background

The U.S. groundfish fisheries of theGulf of Alaska (GOA) and the Bering Seaand Aleutian Islands management area(BSAI) in the exclusive economic zoneare managed by NMFS under theGroundfish FMPs. The FMPs wereprepared by the Council under theMagnuson Fishery Conservation andManagement Act (16 U.S.C. 1801, etseq.; Magnuson Act) and areimplemented by regulations for the U.S.fisheries at 50 CFR part 679. Generalregulations that also pertain to U.S.fisheries are codified at 50 CFR part 620.Regulations that implement theResearch Plan appear at 50 CFR part679. The Crab FMP delegatesmanagement of the crab resources in theBSAI to the State of Alaska (State) withFederal oversight. Regulations necessaryto carry out the Crab FMP appear at 50CFR part 679.

A data collection program to obtaininformation necessary for conservationand management of the groundfishfisheries was authorized by regulationsimplementing Amendments 18 and 13to the Groundfish FMPs (54 FR 50386,December 6, 1989). One of the measuresin Amendments 18 and 13 authorized acomprehensive U.S. fishery observerprogram. NMFS, in consultation withthe Council, prepared and implementedan Observer Plan to implementprovisions of that program (55 FR 4839;February 12, 1990; 56 FR 30874, July 8,1991; 59 FR 22133, April 29, 1994). TheAlaska Board of Fisheries implementeda Shellfish Onboard Observer Programfor the king and Tanner crab fisheriesoff Alaska in April 1988 (5 AAC 39.645).

A final rule implementing theResearch Plan was published in theFederal Register (59 FR 46126,September 6, 1994), under the authorityof section 313 of the Magnuson Act, asamended by section 404 of the HighSeas Driftnet Fisheries Enforcement Act,Public Law 102–582. The Research Planrequires that observers be stationed oncertain fishing vessels and U.S. fishprocessors participating in the BSAIgroundfish, GOA groundfish, and BSAIking and Tanner crab fisheries. Theserequirements may be extended to thehalibut fishery off Alaska. Observers aredeployed for the purpose of collectingdata necessary for the conservation,management, and scientificunderstanding of fisheries under theCouncil’s authority. The Research Planalso established a system of fees to payfor the costs of implementing theResearch Plan. Minor additions and/orchanges to the regulations implementingthe Research Plan were published in theFederal Register on January 9, 1995 (60FR 2344); July 5, 1995 (60 FR 34904);and August 16, 1995 (60 FR 42470).

Full implementation of the ResearchPlan was delayed until 1997 (60 FR66755; December 26, 1995) after theCouncil requested additional time toreconsider certain elements of theResearch Plan that it had previouslyadopted. This action maintained 1995observer coverage requirements through1996 and retained effectiveness of thefollowing sections of the Observer Plan:(1) Standards of observer conduct; and(2) description, specifications, and workstatement for certified observercontractors, including conflict ofinterest standards for NMFS-certifiedobservers and contractors andconditions for contractor and observercertification revocation.

At its December 1995 meeting, theCouncil requested that NMFS repeal theResearch Plan and pursue an alternativeto the Research Plan that would revert

back to direct payment for observerservices rather than a fee-basedprogram. The proposed repeal of theResearch Plan is explained further in aninterim final rule published in theFederal Register on March 28, 1996 (61FR 13782), and in a notice of availabilitypublished in the Federal Register onJuly 12, 1996 (61 FR 36702).

One alternative long-term observerprogram being considered by theCouncil to supersede the Research Planwould require NMFS to contract with athird party to serve as a liaison betweenpersons requiring observer services andcompanies providing those services.NMFS met with the Council’s newlynamed Observer Advisory Committee(OAC) in March 1996 to review theproposed Research Plan alternatives.The OAC highlighted to the Council atits April 1996 meeting that even thoughobserver compensation and certainother costs were not currentlyquantifiable, the third-party alternativewould be more expensive than theobserver program prior to the ResearchPlan. At its April 1996 meeting, theCouncil reviewed a draft analysis ofalternatives to the Research Plan anddetermined that additional costcomparisons of these alternatives mustbe completed before it adopts analternative to the Research Plan. TheCouncil is scheduled to receive moreinformation on a long-term replacementto the Research Plan at its September1996 meeting.

Existing observer coveragerequirements under Amendment 1 tothe Research Plan are scheduled toexpire on December 31, 1996. At itsApril 1996 meeting, the Counciladopted an Interim Groundfish ObserverProgram that would supersede theResearch Plan and authorize mandatorygroundfish observer coveragerequirements through 1997. The InterimGroundfish Observer Program wouldextend 1996 groundfish observercoverage requirements as well as vesseland processor responsibilities relating tothe observer program. Proposed changesto the groundfish observer program aredescribed below. The InterimGroundfish Observer Program wouldremain effective through December 31,1997, unless superseded by a long-termprogram that addresses concerns aboutobserver data integrity, equitabledistribution of observer coverage costs,observer compensation and workingconditions, and other concerns raised bythe Council’s OAC. Under this action,observer coverage requirements for theBSAI king and Tanner crab fisherieswould no longer be specified in Federalregulations. Observer coveragerequirements for the crab fisheries


would revert back to a category 3measure in the Crab FMP and would bespecified by the Alaska Board ofFisheries.

Elements of the Proposed InterimGroundfish Observer Program

1. Observer coverage requirementswould apply to vessels issued a Federalfisheries permit and processors issued aFederal processor permit. Fishingoperations by these vessels andprocessors in Federal and state waterswould be subject to Federal observercoverage requirements. Thisapplicability of the Observer Programwould be unchanged from theapplicability of the domestic observerprogram implemented prior to theResearch Plan.

2. Current observer coveragerequirements for groundfish vessels andshoreside processors receivinggroundfish would remain unchangedand are set out in this proposed rule at§ 679.50 (c) and (d). Participants in thegroundfish fisheries would continue tobe responsible for making their ownarrangements with certified observercontractors and paying for requiredobserver coverage.

3. The Director, Alaska Region,NMFS, (Regional Director) could makeinseason adjustments in observercoverage requirements similar to theResearch Plan. Any inseason adjustmentwould be based on specified findingsand implemented using the procedurefor inseason adjustments at § 679.25(c).Similar to the Research Plan, anyinseason adjustment to observercoverage requirements would bepublished in the Federal Register atleast 10 calendar days prior to theeffective date. Regulationsimplementing the Regional Director’sability to make inseason adjustments inobserver coverage requirements are setout in this proposed rule at § 679.50(e).

4. Vessel and shoreside processorresponsibilities would remainunchanged. These regulations are setout in this proposed rule at § 679.50(f).

5. The interim program would expandregulations governing the ObserverProgram to include criteria andprocedures for observer and observercontractor certification, suspension, anddecertification. Previously, these criteriaand procedures were included in theObserver Plan. Certification,suspension, and decertification criteriaand procedures now are included in thisproposed rule at § 679.50(h), (i), and (j).The proposed criteria and proceduresare essentially unchanged from theprovisions under the Observer Plan,except that:

a. Observer contractors certified byNMFS prior to January 1, 1997, wouldreceive a 1-year certification extensionthat expires December 31, 1997. Thecurrently certified observer contractorswould not have time to go through anew certification process, nor wouldNMFS have adequate time to carry outthe administrative procedures necessaryfor their recertification prior toimplementation of the ObserverProgram on January 1, 1997. Anycertified observer contractor could bedecertified according to thedecertification procedures that are setout in this proposed rule.

b. Observers and observer contractorscannot have a direct financial interest ora conflict of interest in any commercialfishery in State or Federal waters offAlaska. The conflict of intereststandards in the Observer Plan weremore narrowly applied to the observedfishery.

c. Observer qualifications have beenrevised as follows and would beavailable from the Observer ProgramOffice (see ADDRESSES.):

A. Prospective observers must have abachelor’s degree or higher from anaccredited college or university with amajor in one of the natural sciences.

B. Candidates must have a minimumof 30 semester hours or equivalent inapplicable biological sciences and mustalso have successfully completed atleast one undergraduate course each inmath and statistics (minimum of 5semester hours total). In addition, allapplicants are required to havecomputer skills that enable them towork competently with standarddatabase software and computerhardware.

C. Prospective observers are alsorequired to successfully complete anyscreening test(s) administered by NMFS.These tests would measure basic math,algebra, and computer skills as well asother abilities necessary for successfuljob performance.

D. If a sufficient number of candidatesmeeting these educational prerequisitesis not available, the observer contractormay seek approval from NMFS tosubstitute individuals with either asenior standing in an acceptable major,or with an Associate of Arts (A.A.)degree in fisheries, wildlife science, oran equivalent.

E. If a sufficient number ofindividuals meeting the abovequalifications is not available, theobserver contractor may seek approvalfrom NMFS to hire individuals withother relevant experience or training.

F. To qualify for certification, allprospective observers would undergosafety and cold water survival training

that requires the prospective observersto demonstrate their ability to properlyput on an immersion suit in a specifiedtime period, enter the water, travelapproximately 50 m to a ladder, andclimb out of the water.

The additional math, statistics, andcomputer skills requirements reflect theincreased responsibilities of observersand are similar to the observerqualifications under the Research Plan,had it been fully implemented. Theobserver qualifications are presentedhere to provide an opportunity forpublic comment.

d. Training/briefing requirements forcertification have been revised asfollows and would be available from theObserver Program Office (SeeADDRESSES.):

A. Observers who have completed adeployment must be recertified prior toanother deployment. Individuals whoselast deployment was within 12 monthsmust complete a 2-day briefing andindividuals whose last deployment was12 to 24 months ago must complete a 4-day briefing. If 2 years have passedsince the completion of an individual’slast deployment, he or she mustcomplete the full training course.

B. If an observer remains undeployedfrom 1 to 3 months after completion oftraining, the individual must complete a2-day briefing. If the individual is notdeployed from 3 to 6 months aftertraining, a 4-day briefing must becompleted. If more than 6 months havepassed since the completion of training,the individual must retake the fulltraining course.

C. Briefings (2- or 4-day) expire after1 month. Individuals may be required tocomplete a 4-day briefing or the fulltraining course if deemed necessary bythe Observer Program Office.

These recertification requirements areidentical to those under the ResearchPlan, had it been implemented and arepresented here to provide anopportunity for public comment.

e. Selection criteria for observercontractors would be used by NMFS togauge the adequacy of the applicant toprovide observer services. These criteriaare unchanged from the Observer Planand would be available from theObserver Program Office (SeeADDRESSES.). They are presented here toprovide an opportunity for publiccomment. Applicants for observercontractor certification would beevaluated by NMFS using the followingcriteria:

A. Ability to supply required observerservices:

i. Methods to be used to recruit,evaluate, and select qualified applicantsto serve as observers.


ii. Methods to be used in establishing,organizing and performing all logisticsassociated with the deployment ofobservers.

iii. Methods to be used in schedulingobservers for certification training orbriefing, observer deployments,assignments to vessels and shoresidefacilities so that observer coverage andsampling requirements are met.

iv. Provisions for communicationswith observers, vessels, shoresidefacilities, and NMFS to provide andexchange required information onscheduling, weekly logistics reports,emergencies, and instructions forobservers, vessels, and shoresidefacilities.

v. Methods to be used in monitoringobserver performance, observer workbetween vessels and upon return fromsea or duty station, NMFS debriefingupon completion of each deploymentand final preparation and submission ofreports and data.

B. Expertise and capability ofapplicant’s organization:

i. Technical competence of staff basedon resumes of key personnel that showtheir abilities, education, training, andexperience in relation to their proposedassignments and areas ofresponsibilities on a particular project.

ii. Organizational structure includingnumber of personnel to be assigned, incategories of professional, technical, andclerical positions, to each phase of theproject including provisions for thebackup of each key staff member duringplanned and unplanned absences.

C. Expressed understanding of thepurpose of the Observer Program, therole of the observer contractor, and theimportant aspects of this type of projectthat lead to successful performance ofwork.

D. Summaries of similar workrecently completed, includingdescription of work and contact personand telephone number of client.

f. Observer contractors must provide acertificate of insurance that verifiescompliance with the insurance coveragerecommendations of the Council’sInsurance Technical Committee. Thiscoverage must include the followingprovisions:

A. Maritime Liability to cover‘‘seamen’s’’ claims under the MerchantMarine Act (Jones Act) and GeneralMaritime Law ($1 million minimum).

B. Coverage under the U.S. Longshoreand Harbor Workers’ Compensation Act($1 million minimum).

C. States Worker’s Compensation asrequired.

D. Contractual General Liability.g. Observer contractors would be

required to submit information to NMFS

that would be used to: Coordinate andconduct effective and efficientscheduling of observers for training,briefing, and debriefing sessions,maintain an observer deploymentdatabase, and monitor the requirementsof a certified observer contractor. Thisinformation would include:

A. A list of prospective observers tobe hired upon approval by NMFS andobserver training/briefing registration.

B. Projected observer assignments.C. Observer deployment/logistics

reports.D. Observer debriefing registration.E. Notification that prospective

observers have passed a physicalexamination during the 12 months priorto deployment.

F. A copy of each type of signed andvalid contract an observer contractor haswith vessels and shoreside processorsrequiring observer services and withobservers. Copies of signed and validcontracts with specific entities requiringobserver services or with specificobservers also may be requested.

G. Reports of observer harassment,concerns about vessel or processorsafety, or observer performanceproblems.

Observers’ social security numbers arerequested with the training/briefingregistration to provide a uniquenumerical identifier for each observer.This information has been requested inthe past and observers’ social securitynumbers are included in the existingObserver Program database. Regulationsfor the information collection are set outin this proposed rule at§ 679.50(i)(2)(xiv).

7. Criteria for the suspension and/ordecertification of observers or observercontractors include the followingappeals process whereby documentaryevidence, disputes, and petitions maybe submitted:

a. Within 30 days of receipt of asuspension or decertification notice,observers and observer contractors mayprovide written documentary evidenceand argument in opposition to thenotice. They are also afforded theopportunity to submit additionalevidence that was previouslyunavailable and in some instances, mayappear in person and present witnesses.

b. Observers and observer contractorsalso may petition for review of asuspension or decertification decisionwithin 30 days after the date thedecision was served.

These criteria are unchanged from theObserver Plan. Regulations for thisinformation collection are set out in thisproposed rule at § 679.50(k) (6), (7), and(8).

8. Observer contractors would berestricted in how they could assignobservers to vessels or shoresideprocessors in the following ways:

a. Observers must not be deployed onthe same vessel for more than 90 daysin a 12-month period;

b. A deployment to a vessel or ashoreside processing facility cannotexceed 90 days without approval fromthe Observer Program Office (SeeADDRESSES.); and

c. A deployment cannot includeassignments to more than four vesselsand/or shoreside processors. NMFSbegan instituting these policies in 1990to reduce the likelihood of conflicts ofinterest and to ensure that debriefingsoccurred more frequently, so that NMFScould process the observers’ collectedfisheries data.

9. A revision to regulations at§ 679.7(g)(2) would clarify NMFS’ intentthat fish sorting of any kind prior toobserver sampling procedures isprohibited. Concerns exist thatmechanical and/or physical sortingcould be occurring. For example,modifications to the angle and speed ofincline belts in processing lines and binopenings that restrict the flow of fish acteffectively to sort fish prior to observersampling procedures. NMFS specificallyrequests comments on what, if any,impact this clarification could have onvessel or processor operations.

10. A prohibition at § 679.7(f)(14)would be removed to maintainconsistency with the proposed removalof Research Plan regulations at part 679.Section 679.7(f)(14) prohibits permittedregistered buyers required to obtain aFederal processor permit fromtransferring or receiving sablefishharvested in Federal waters or halibut,unless the person possesses a validFederal processor permit. The intent ofthis prohibition was to reinforce therequirement that all Research Planprocessors pay their fees in a timelymanner and would thus be eligible fora Federal processor permit. Thisprohibition is no longer necessarybecause Research Plan fee collectionshave been terminated.

Three elements of the proposedInterim Groundfish Observer Programwould not be codified in regulation: (1)Observer qualifications, (2) observertraining/briefing requirements, and (3)NMFS’ selection criteria for observercontractors. These elements areavailable upon request. Although theywould not be codified, they are viewedas a part of the rule and are presentedin the preamble specifically to provideopportunity for public comment. Priorto proposing future changes to thesethree elements, NMFS would publish a


notice in the Federal Registerdescribing the proposed change(s) andproviding an opportunity for publiccomment.

ClassificationSection 304(a)(1)(D) of the Magnuson

Act requires NMFS to publishregulations proposed by a Councilwithin 15 days of receipt of an FMPamendment and regulations. At thistime, NMFS has not determined that theFMP amendments this rule wouldimplement are consistent with thenational standards, other provisions ofthe Magnuson Act, and other applicablelaws. NMFS, in making thatdetermination, will take into accountthe data, views, and comments receivedduring the comment period.

This proposed rule has beendetermined to be not significant forpurposes of E.O. 12866.

NMFS prepared an IRFA as part of theregulatory impact review, whichdescribes the impact this proposed rulewould have on small entities, ifadopted. Based on that analysis, it wasdetermined that this proposed rulecould, if issued in final, have asignificant economic impact on asubstantial number of small entities.Observer costs are based on whether anobserver is aboard a vessel and onoverall coverage needs. Higher costs areborne by those vessels and shoresideprocessors that require higher levels ofcoverage. For individual vessels, theimpact would increase as the percentageof observer costs relative to totalexvessel value of catch increases. In1995, about 400 vessels carriedobservers; of these vessels about 280were catcher vessels. About one half ofthe catcher vessels equal to or greaterthan 60-ft (18.3-meters (m)) lengthoverall (LOA) but less than 125-ft (38.1-m) LOA paid observer costs that wereequal to or less than 1 percent of theexvessel value of catch. About 20percent of vessels incurred observercosts that ranged from 2 to almost 8percent of the exvessel value of catch.This represents cost increases fromResearch Plan costs that were limited to2 percent of the exvessel value of catch.For motherships and shoresideprocessors, the impact also wouldincrease as the percentage of observercosts relative to total exvessel value ofprocessed catch increases. In 1995,about 26 motherships and shoresideprocessors carried observers. About 35percent of these processors incurredobserver costs that ranged from 1 to 7percent of the exvessel value of catchreceived and processed from catchervessels. This represents cost increasesfrom the processor’s portion of Research

Plan costs that were limited to 1 percentof the exvessel value of catch. TheResearch Plan represents an alternativeto this proposed rule which couldminimize the economic impact on somesmall entities. But for reasons alreadyexplained elsewhere (this preamble; 61FR 13782, March 28, 1996; and 61 FR36702, July 12, 1996), this proposed rulewould repeal the Research Plan. Copiesof the EA/RIR/IRFA can be obtainedfrom NMFS (see ADDRESSES).

This proposed rule contains a newcollection-of-information requirementsubject to the Paperwork Reduction Act(PRA). This collection of informationhas been submitted to OMB forapproval. The new informationrequirement consists of certificationapplications for new observercontractors, reports submitted byobserver contractors to NMFS thatwould be used by NMFS to facilitateObserver Program Office operations andto monitor the ongoing requirements ofa certified observer contractor, andappeals of suspension and/ordecertification from observers andobserver contractors. The annual publicreporting burden for this collection ofinformation is estimated to be: 60 hoursper certification application (acontractor would apply every 3 years);3 minutes per certificate of insurance; 7minutes per training/briefingregistration; 2 minutes per notificationof observer physical examination; 2hours per physical examination; 7minutes per projected observerassignment; 7 minutes per weeklydeployment/logistics report; 7 minutesper debriefing registration; 15 minutesper copies of five contracts; 2 hours perreport of observer harassment, observersafety concerns, or observerperformance problems; 80 hours persuspension/decertification appeal by anobserver contractor (projected to occuronly once in 5 years); and 4 hours persuspension/decertification appeal by anobserver, including the time forreviewing instructions, searchingexisting data sources, gathering andmaintaining the data needed, andcompleting and reviewing the collectionof information. This proposed rulecontains requirements for electronictransmission of observer data by vesselsand shoreside processors receivingpollock harvested in the catcher vesseloperational area. This informationcollection already was approved byOMB (OMB control number 0648–0307).Send comments regarding burdenestimates or any other aspect of the datarequirements, including suggestions forreducing the burdens, to NMFS andOMB (see ADDRESSES).

Notwithstanding any other provisionof the law, no person is required torespond to, nor shall any person besubject to a penalty for failure to complywith a collection of information, subjectto the requirements of the PRA, unlessthat collection of information displays acurrently valid OMB control number.

List of Subjects in 50 CFR Part 679Fisheries, Reporting and

recordkeeping requirements.Dated: July 29, 1996.

Charles Karnella,Acting, Program Management Officer,National Marine Fisheries Service.

For the reasons set out in thepreamble, 50 CFR part 679 is proposedto be amended as follows:

PART 679—FISHERIES OF THEEXCLUSIVE ECONOMIC ZONE OFFALASKA


Authority: 16 U.S.C. 773 et seq. and 1801et seq.

2. In § 679.1, paragraph (f) is revisedto read as follows:

§ 679.1 Purpose and scope.* * * * *

(f) Groundfish Observer Program.Regulations in this part govern elementsof the Groundfish Observer Program forthe BSAI groundfish and GOAgroundfish fisheries under the Council’sauthority (see subpart E of this part).* * * * *

3. In § 679.2, the following definitionsare removed: ‘‘Bimonthly’’, ‘‘Exvesselprice’’, ‘‘Fee percentage’’, ‘‘ResearchPlan’’, ‘‘Research Plan fisheries’’, ‘‘Retained catch’’, and ‘‘Standardexvessel price’’.

a. In § 679.2, the following definitionsare added: ‘‘Briefing’’, ‘‘Debriefing’’,‘‘Deployment’’, ‘‘Direct financialinterest’’, ‘‘North Pacific fishery’’,‘‘Observer contractor’’, and ‘‘ObserverProgram Office’’,.

b. In § 679.2, the following definitionsare revised: ‘‘Buying station’’, paragraph(3) of ‘‘Catcher/processor’’, paragraph(1) of ‘‘Catcher vessel’’, ‘‘Fishing day’’,paragraph (3) of ‘‘Fishing trip’’,paragraph (2) or ‘‘Mothership’’,‘‘Observed or observed data’’,‘‘Observer’’, ‘‘Processor’’, ‘‘Roundweight or round-weight equivalent’’,and ‘‘Shoreside processor’’.

§ 679.2 Definitions.* * * * *

Briefing means a short (usually 2–4day) training session that observersmust complete to fulfill certificationrequirements.


Buying station means a person orvessel that receives unprocessedgroundfish from a vessel for delivery ata different location to a shoresideprocessor or mothership and that doesnot process those fish.* * * * *

Catcher/processor * * *(3) With respect to subpart E of this

part, a processor vessel that is used for,or equipped to be used for, catching fishand processing that fish.

Catcher vessel * * *(1) With respect to groundfish

recordkeeping and reporting andsubpart E of this part, a vessel that isused for catching fish and that does notprocess fish on board.* * * * *

Debriefing means the post-deployment process that includes a one-on-one interview with NMFS staff, aNMFS preliminary data review,observer completion of all datacorrections noted, observer preparationof affidavits and reports, andcompletion of tasks related to biologicalspecimens or special projects.

Deployment means the periodbetween an observer’s arrival at thepoint of embarkation and the date theobserver disembarks for travel todebriefing.

Direct financial interest means anysource of income to, or capitalinvestment or other interest held by, anindividual, partnership, or corporationor an individual’s spouse, immediatefamily member or parent that could beinfluenced by performance or non-performance of observer or observercontractor duties.* * * * *

Fishing day means a 24-hour period,from 0001 A.l.t. through 2400 A.l.t., inwhich fishing gear is retrieved andgroundfish are retained. Days duringwhich a vessel only delivers unsortedcodends to a processor are not fishingdays.* * * * *

Fishing trip * * *(3) With respect to subpart E of this

part, one of the following time periods:(i) For a vessel used to process

groundfish or a catcher vessel used todeliver groundfish to a mothership, aweekly reporting period during whichone or more fishing days occur.

(ii) For a catcher vessel used todeliver groundfish to other than amothership, the time period duringwhich one or more fishing days occurthat starts on the day when fishing gearis first deployed and ends on the daythe vessel offloads groundfish, returnsto an Alaskan port, or leaves the EEZ off

Alaska and adjacent waters of the Stateof Alaska.* * * * *

Mothership * * *(2) With respect to subpart E of this

part, a processor vessel that receives andprocesses groundfish from other vesselsand is not used for, or equipped to beused for, catching groundfish.* * * * *

North Pacific fishery means anycommercial fishery in State or Federalwaters off Alaska.

Observed or observed data refers todata collected by observers (see§ 679.21(f)(7) and subpart E of this part).

Observer means any individual that isawarded NMFS certification to serve asan observer under this part, is employedby an observer contractor for thepurpose of providing observer servicesto vessels or shoreside processors underthis part, and is acting within the scopeof his/her employment.

Observer contractor means any personthat is awarded NMFS certification toprovide observer services to vessels andshoreside processors under subpart Eand who contracts with observers toprovide these services.

Observer Program Office means theadministrative office of the GroundfishObserver Program located at AlaskaFisheries Science Center, Building 4,7600 Sand Point Way Northeast, Seattle,WA 98115, telephone: 206–526–4197.* * * * *

Processor means any shoresideprocessor, catcher/processor,mothership, any person who receivesgroundfish from fishermen forcommercial purposes, any fishermanwho transfers groundfish outside of theUnited States, and any fisherman whosells fish directly to a restaurant or to anindividual for use as bait or personalconsumption.* * * * *

Round weight or round-weightequivalent, for purposes of this part,means the weight of groundfishcalculated by dividing the weight of theprimary product made from thatgroundfish by the PRR for that primaryproduct as listed in Table 3 of this part,or, if not listed, the weight of groundfishcalculated by dividing the weight of aprimary product by the standard PRR asdetermined using the best availableevidence on a case-by-case basis.* * * * *

Shoreside processor means anyperson or vessel that receivesunprocessed groundfish, except catcher/processors, motherships, buyingstations, restaurants, or persons

receiving groundfish for personalconsumption or bait.* * * * *

4. In § 679.4, paragraph (g) is removedand paragraphs (f)(1)(i), (f)(1)(ii), and(f)(2)(ii) are revised to read as follows:

§ 679.4 Permits.

* * * * *(f) Federal Processor permit—(1)

General—(i) Applicability. In additionto the permit and licensingrequirements in paragraphs (b) and (d)of this section, and except as providedin paragraph (f)(1)(ii) of this section, aprocessor of groundfish must have aFederal processor permit issued by theRegional Director.

(ii) Exception. Any fisherman whotransfers groundfish outside the UnitedStates, or any fisherman who sellsgroundfish directly to a restaurant or toan individual for use as bait or forpersonal consumption is not required tohave a Federal processor permit.

(2) * * *(ii) The fishery or fisheries for which

the permit is requested.* * * * *

5. In § 679.5, paragraph (a)(2) isrevised to read as follows:

§ 679.5 Recordkeeping and reporting.

* * * * *(a) * * *(2) Applicability, Federal processor

permit. Any processor that retainsgroundfish is responsible for complyingwith the applicable recordkeeping andreporting requirements of this section.* * * * *

6. In § 679.7, paragraph (b)(1) isremoved, paragraphs (b)(2) through(b)(4) are redesignated as paragraphs(b)(1) through (b)(3), respectively,paragraph (f)(14) is removed, paragraph(f)(15) is redesignated as paragraph(f)(14), paragraphs (g)(5) through (g)(7)are removed, paragraphs (g)(3) and (g)(4)are redesignated as paragraphs (g)(4)and (g)(5), respectively, a new paragraph(g)(3) is added, paragraphs (g)(8) and(g)(9) are redesignated as paragraphs(g)(6) and (g)(7), respectively, andparagraphs (a)(3), (g)(2), and newlyredesignated paragraph (g)(7) are revisedto read as follows:


* * * * *(a) * * *(3) Groundfish Observer Program.

Fish for groundfish except incompliance with the terms of theGroundfish Observer Program asprovided by subpart E of this part.* * * * *

(g) * * *


(2) Interfere with or bias the samplingprocedure employed by an observer,including physical, mechanical, or othersorting or discarding of catch beforesampling.

(3) Tamper with, destroy, or discardan observer’s collected samples,equipment, records, photographic film,papers, or personal effects without theexpress consent of the observer. * * *

(7) Require, pressure, coerce, orthreaten an observer to perform dutiesnormally performed by crew members,including, but not limited to, cooking,washing dishes, standing watch, vesselmaintenance, assisting with the settingor retrieval of gear, or any dutiesassociated with the processing of fish,from sorting the catch to the storage ofthe finished product.* * * * *

7. In § 679.21, paragraph (c)(3) isrevised to read as follows:

§ 679.21 Prohibited species bycatchmanagement.

* * * * *(c) * * *(3) Exemption. Motherships and

shoreside processors that are notrequired to obtain observer coverageduring a month under § 679.50 (c) and(d) are not required to retain salmon.* * * * *

8. Subpart E is revised to read asfollows:

Subpart E—Groundfish Observer Program

Sec.679.50 Groundfish Observer Program

Subpart E—Groundfish ObserverProgram

§ 679.50 Groundfish Observer Programapplicable through December 31, 1997.

(a) General. Operators of vesselspossessing a Federal fisheries permitunder § 679.4(b)(1) and processors thatpossess a Federal processor permitunder § 679.4(f)(1), must comply withthis section. The owner of a fishingvessel subject to this part or a processorsubject to this part must ensure that theoperator or manager complies with thissection and is jointly and severallyliable for such compliance.

(b) Purpose. The purpose of theGroundfish Observer Program is toallow observers to collect Alaskafisheries data deemed by the RegionalDirector to be necessary and appropriatefor management, compliancemonitoring, and research of groundfishfisheries and for the conservation ofmarine resources or their environment.

(c) Observer requirements for vessels.(1) Observer coverage is required asfollows:

(i) A mothership of any length thatprocesses 1,000 mt or more in roundweight or round-weight equivalent ofgroundfish during a calendar month isrequired to have an observer aboard thevessel each day it receives or processesgroundfish during that month.

(ii) A mothership of any length thatprocesses from 500 mt to 1,000 mt inround weight or round-weightequivalent of groundfish during acalendar month is required to have anobserver aboard the vessel at least 30percent of the days it receives orprocesses groundfish during that month.

(iii) Each mothership that receivespollock harvested by catcher vessels inthe catcher vessel operational areaduring the second pollock season thatstarts on August 15 under § 679.23(e)(2)is required to have a second observeraboard, in addition to the observerrequired under paragraphs (c)(1) (i) and(ii) of this section, for each day of thesecond pollock season until the chumsalmon savings area is closed under§ 679.21(e)(7)(vi), or October 15,whichever occurs first.

(iv) A catcher/processor or catchervessel 125 ft (38.1 m) LOA or longermust carry an observer during 100percent of its fishing days except for avessel fishing for groundfish with potgear as provided in paragraph (c)(1)(vii)of this section.

(v) A catcher/processor or catchervessel equal to or greater than 60 ft (18.3m) LOA, but less than 125 ft (38.1 m)LOA, that participates for more than 3fishing days in a directed fishery forgroundfish in a calendar quarter mustcarry an observer during at least 30percent of its fishing days in thatcalendar quarter and at all times duringat least one fishing trip in that calendarquarter for each of the groundfishfishery categories defined underparagraph (c)(2) of this section in whichthe vessel participates.

(vi) A catcher/processor or catchervessel fishing with hook-and-line gearthat is required to carry an observerunder paragraph (c)(1)(v) of this sectionmust carry an observer at all timesduring at least one fishing trip in theEastern Regulatory Area of the Gulf ofAlaska during each calendar quarter inwhich the vessel participates in adirected fishery for groundfish in theEastern Regulatory Area.

(vii) A catcher/processor or catchervessel equal to or greater than 60 ft (18.3m) LOA fishing with pot gear thatparticipates for more than 3 fishing daysin a directed fishery for groundfish in acalendar quarter must carry an observerduring at least 30 percent of its fishingdays in that calendar quarter and at alltimes during at least one fishing trip in

a calendar quarter for each of thegroundfish fishery categories definedunder paragraph (c)(2) of this section inwhich the vessel participates.

(2) Groundfish fishery categoriesrequiring separate coverage—(i) Pollockfishery. Directed fishing for groundfishthat results in a retained catch ofpollock, during any fishing trip, that isgreater than the retained catch of anyother groundfish species or speciesgroup that is specified as a separategroundfish fishery under this paragraph(c)(2).

(ii) Pacific cod fishery. Directedfishing for groundfish that results in aretained catch of Pacific cod, during anyfishing trip, that is greater than theretained catch of any other groundfishspecies or species group that is specifiedas a separate groundfish fishery underthis paragraph (c)(2).

(iii) Sablefish fishery. Directed fishingfor groundfish that results in a retainedcatch of sablefish, during any fishingtrip, that is greater than the retainedcatch of any other groundfish species orspecies group that is specified as aseparate groundfish fishery under thisparagraph (c)(2).

(iv) Rockfish fishery. Directed fishingfor groundfish that results in a retainedaggregate catch of rockfish of the generaSebastes and Sebastolobus, during anyfishing trip, that is greater than theretained catch of any other groundfishspecies or species group that is specifiedas a separate groundfish fishery underthis paragraph (c)(2).

(v) Flatfish fishery. Directed fishingfor groundfish that results in a retainedaggregate catch of all flatfish species,except Pacific halibut, during anyfishing trip, that is greater than theretained catch of any other groundfishspecies or species group that is specifiedas a separate groundfish fishery underthis paragraph (c)(2).

(vi) Other species fishery. Directedfishing for groundfish that results in aretained catch of groundfish, during anyfishing trip, that does not qualify as apollock, Pacific cod, sablefish, rockfish,or flatfish fishery as defined underparagraphs (c)(2) (i) through (v) of thissection.

(3) Assignment of vessels to fisheries.At the end of any fishing trip, a vessel’sretained catch of groundfish species orspecies groups for which a TAC hasbeen specified under § 679.20, in roundweight or round-weight equivalent, willdetermine to which fishery categorylisted under paragraph (c)(2) of thissection the vessel is assigned.

(i) Catcher/processors. A catcher/processor will be assigned to a fisherycategory based on the retainedgroundfish catch composition reported


on the vessel’s weekly production reportsubmitted to the Regional Directorunder § 679.5(i).

(ii) Catcher vessel delivery in Federalwaters. A catcher vessel that delivers toa mothership in Federal waters will beassigned to a fishery category based onthe retained groundfish catchcomposition reported on the weeklyproduction report submitted to theRegional Director for that week by themothership under § 679.5(i).

(iii) Catcher vessel delivery in AlaskaState waters. A catcher vessel thatdelivers groundfish to a shoresideprocessor or to a mothership processorvessel in Alaska State waters will beassigned to a fishery category based onthe retained groundfish catchcomposition reported on one or moreADF&G fish tickets as required underAlaska Statutes at A.S. 16.05.690.

(d) Observer requirements forshoreside processors. Observer coverageis required as follows:

(1) A shoreside processor thatprocesses 1,000 mt or more in roundweight or round-weight equivalent ofgroundfish during a calendar month isrequired to have an observer present atthe facility each day it receives orprocesses groundfish during that month.

(2) A shoreside processor thatprocesses 500 mt to 1,000 mt in roundweight or round-weight equivalent ofgroundfish during a calendar month isrequired to have an observer present atthe facility at least 30 percent of thedays it receives or processes groundfishduring that month.

(3) Each shoreside processor thatoffloads pollock at more than onelocation on the same dock and hasdistinct and separate equipment at eachlocation to process those pollock andthat receives pollock harvested bycatcher vessels in the catcher vesseloperational area during the secondpollock season that starts on August 15,under § 679.23(e), is required to have anobserver, in addition to the observerrequired under paragraphs (d) (1) and(2) of this section, at each locationwhere pollock is offloaded, for each dayof the second pollock season until thechum salmon savings area is closedunder § 679.21(e)(7)(vi), or October 15,whichever occurs first.

(e) Inseason adjustments in observercoverage requirements. (1) The RegionalDirector may adjust the observercoverage requirements set out underparagraphs (c) and (d) of this section atany time to improve the accuracy,reliability, and availability of observerdata, so long as the standards of theMagnuson Act and other applicableFederal regulations are met, and the

changes are based on one or more of thefollowing:

(i) Adjustment. A finding that fishingmethods, times, or areas, or catch orbycatch composition for a specificfishery or fleet component havesignificantly changed, or are likely tochange significantly.

(ii) A finding that such modificationsare necessary to improve dataavailability or quality in order to meetspecific fishery management objectives.

(2) Procedure. The procedure for aninseason adjustment of observercoverage requirements will comply with§ 679.25(c). No change to observercoverage requirements may beimplemented under this paragraph (e)until NMFS has published changes inobserver coverage requirements in theFederal Register, with the reasons forthe changes and any special instructionsto vessels or shoreside processorsrequired to carry observers, at least 10calendar days prior to their effectivedate.

(f) Responsibilities—(1) Vesselresponsibilities. An operator of a vesselrequired to carry one or more observersmust provide the following:

(i) Accommodations and food.Provide, at no cost to observers or theUnited States, accommodations andfood on the vessel for the observer orobservers that are equivalent to thoseprovided for officers, engineers,foremen, deck-bosses or othermanagement level personnel of thevessel.

(ii) Safe conditions. (A) Maintain safeconditions on the vessel for theprotection of observers by adhering toall U.S. Coast Guard and otherapplicable rules, regulations, or statutespertaining to safe operation of thevessel.

(B) Have onboard:(1) A valid Commercial Fishing Vessel

Safety Decal issued within the past 2years that certifies compliance withregulations found in Titles 33 CFRChapter I and 46 CFR Chapter I;

(2) A certificate of compliance issuedpursuant to 46 CFR 28.710; or

(3) A valid certificate of inspectionpursuant to 46 U.S.C. 3311.

(iii) Transmission of data. Facilitatetransmission of observer data by:

(A) Allowing observers to use thevessel’s communication equipment andpersonnel, on request, for the entry,transmission, and receipt of work-related messages, at no cost to theobservers or the United States.

(B) Ensuring that each mothershipthat receives pollock harvested in thecatcher vessel operational area duringthe pollock season that starts on August15, under § 679.23(e), is equipped with

INMARSAT Standard A satellitecommunication capabilities, cc:Mailremote, and the data entry softwareprovided by the Regional Director foruse by the observer. The operator ofeach mothership shall also makeavailable for the observers’ use thefollowing equipment compatibletherewith and having the ability tooperate the NMFS-supplied data entrysoftware program: A personal computerwith a 486 or better processing chip, aDOS 3.0, or better operating system with10 megabytes free hard disk storage, and8 megabytes RAM.

(C) Ensuring that the communicationequipment that is on motherships asspecified at paragraph (f)(1)(iii)(B) ofthis section, and that is used byobservers to transmit data, is fullyfunctional and operational.

(iv) Vessel position. Allow observersaccess to, and the use of, the vessel’snavigation equipment and personnel, onrequest, to determine the vessel’sposition.

(v) Access. Allow observers free andunobstructed access to the vessel’sbridge, trawl or working decks, holdingbins, processing areas, freezer spaces,weight scales, cargo holds, and anyother space that may be used to hold,process, weigh, or store fish or fishproducts at any time.

(vi) Prior notification. Notifyobservers at least 15 minutes before fishare brought on board, or fish and fishproducts are transferred from the vessel,to allow sampling the catch or observingthe transfer, unless the observersspecifically request not to be notified.

(vii) Records. Allow observers toinspect and copy the vessel’s DFL,DCPL, product transfer forms, any otherlogbook or document required byregulations, printouts or tallies of scaleweights, scale calibration records, binsensor readouts, and productionrecords.

(viii) Assistance. Provide all otherreasonable assistance to enableobservers to carry out their duties,including, but not limited to:

(A) Measuring decks, codends, andholding bins.

(B) Providing the observers with a safework area adjacent to the samplecollection site.

(C) Collecting bycatch when requestedby the observers.

(D) Collecting and carrying baskets offish when requested by observers.

(E) Allowing observers to determinethe sex of fish when this procedure willnot decrease the value of a significantportion of the catch.

(ix) Transfer at sea. (A) Ensure thattransfers of observers at sea via smallboat or raft are carried out during


daylight hours, under safe conditions,and with the agreement of observersinvolved.

(B) Notify observers at least 3 hoursbefore observers are transferred, suchthat the observers can collect personalbelongings, equipment, and scientificsamples.

(C) Provide a safe pilot ladder andconduct the transfer to ensure the safetyof observers during transfers.

(D) Provide an experienced crewmember to assist observers in the smallboat or raft in which any transfer ismade.

(2) Shoreside processorresponsibilities. A manager of ashoreside processor must do thefollowing:

(i) Safe conditions. Maintain safeconditions at the shoreside processingfacility for the protection of observers byadhering to all applicable rules,regulations, or statutes pertaining to safeoperation and maintenance of theprocessing facility.

(ii) Operations information. Notify theobservers, as requested, of the plannedfacility operations and expected receiptof groundfish prior to receipt of thosefish.

(iii) Transmission of data. Facilitatetransmission of observer data by:

(A) Allowing observers to use theshoreside processor’s communicationequipment and personnel, on request,for the entry, transmission, and receiptof work-related messages, at no cost tothe observers or the United States.

(B) Ensuring that each shoresideprocessor that is required to haveobserver coverage under paragraph(d)(3) of this section and that receivespollock harvested in the catcher vesseloperational area during the pollockseason that starts on August 15, under§ 679.23(e), makes available to theobserver the following equipment orequipment compatible therewith: Apersonal computer with a minimum ofa 486 processing chip with at least a9600-baud modem and a telephone line.The personal computer must beequipped with a mouse, Windowsversion 3.1, or a program having theability to operate the NMFS-supplieddata entry software program, 10megabytes free hard disk storage, 8megabytes RAM, and data entrysoftware provided by the RegionalDirector for use by the observers.

(C) Ensuring that the communicationequipment that is in the shoresideprocessor as specified at paragraph(f)(2)(iii)(B) of this section, and that isused by observers to transmit data isfully functional and operational.

(iv) Access. Allow observers free andunobstructed access to the shoreside

processor’s holding bins, processingareas, freezer spaces, weight scales,warehouses, and any other space thatmay be used to hold, process, weigh, orstore fish or fish products at any time.

(v) Document access. Allow observersto inspect and copy the shoresideprocessor’s DCPL, product transferforms, any other logbook or documentrequired by regulations; printouts ortallies of scale weights; scale calibrationrecords; bin sensor readouts; andproduction records.

(vi) Assistance. Provide all otherreasonable assistance to enable theobserver to carry out his or her duties,including, but not limited to:

(A) Assisting the observer in movingand weighing totes of fish.

(B) Cooperating with product recoverytests.

(C) Providing a secure place to storebaskets of sampling gear.

(g) Procurement of observer services.Owners of vessels or shoresideprocessors required to carry observersunder paragraphs (c) and (d) of thissection must arrange for observerservices from an observer contractor orcontractors. A list of observercontractors is available upon requestfrom the Observer Program Office.

(h) Certification and decertification ofobservers.—(1) Certification ofobservers—(i) Requirements. NMFS willcertify individuals who:

(A) Meet education and/or experiencestandards available from the ObserverProgram Office.

(B) Have successfully completed aNMFS-approved observer training and/or briefing as prescribed by NMFS andavailable from the Observer ProgramOffice.

(C) Have not been suspended ordecertified under paragraph (j) of thissection.

(ii) Term. An observer’s certificationexpires upon completion of adeployment. Observers can bedecertified or suspended by NMFSunder paragraph (j) of this section.

(2) Standards of observer conduct—(i)Conflict of interest.

(A) Observers:(1) May not have a direct financial

interest in a North Pacific fishery, otherthan the provision of observer services,including, but not limited to, vessels orshoreside facilities involved in thecatching or processing of the products ofthe fishery, concerns selling supplies orservices to said vessels or shoresidefacilities, or concerns purchasing raw orprocessed products from said vessels orshoreside facilities.

(2) May not solicit or accept, directlyor indirectly, any gratuity, gift, favor,entertainment, loan, or anything of

monetary value from anyone whoconducts activities that are regulated byNMFS, or who has interests that may besubstantially affected by theperformance or nonperformance of theobservers’ official duties.

(3) May not serve as observers on anyvessel or at any shoreside facility ownedor operated by a person who previouslyemployed the observers.

(4) May not serve as observers duringthe 12 consecutive months immediatelyfollowing the last day of the observer’semployment as paid crew members oremployees in a North Pacific fishery.

(B) Provisions for remuneration ofobservers under this section do notconstitute a conflict of interest underthis paragraph (h)(2).

(ii) Standards of behavior. Observersmust avoid any behavior that couldadversely affect the confidence of thepublic in the integrity of the ObserverProgram or of the government, includingbut not limited to the following:

(A) Observers must diligently performtheir assigned duties.

(B) Observers must accurately recordtheir sampling data, write completereports, and report honestly anysuspected violations of regulationsrelevant to conservation of marineresources or their environment that areobserved.

(C) Observers must not disclosecollected data and observations made onboard the vessel or in the processingfacility to any person except the owneror operator of the observed vessel orprocessing facility, an authorizedofficer, or NMFS.

(D) Observers must refrain fromengaging in any illegal actions or anyother activities that would reflectnegatively on their image asprofessional scientists, on otherobservers, or on the Observer Programas a whole. This includes, but is notlimited to:

(1) Engaging in excessive drinking ofalcoholic beverages;

(2) Engaging in the use or distributionof illegal drugs; or

(3) Becoming physically oremotionally involved with vessel orprocessing facility personnel.

(i) Certification and decertification ofobserver contractors—(1) Certificationof observer contractors—(i) Application.An applicant seeking to become anobserver contractor must submit anapplication to the Regional Directordescribing the applicant’s ability tocarry out the responsibilities and dutiesof an observer contractor as set out inparagraph (i)(2) of this section and thearrangements and methods to be used.Observer contractors certified prior to


January 1, 1997, are exempt fromsubmitting an application.

(ii) Selection. The Regional Directormay select one or more observercontractors based on the informationsubmitted by applicants underparagraph (i)(1)(i) of this section and onother selection criteria that are availablefrom the Observer Program Office.

(iii) Term. Observer contractors willbe certified through December 31, 1997.Observer contractors can be decertifiedor suspended by NMFS under paragraph(j) of this section.

(2) Responsibilities and duties ofobserver contractors include but are notlimited to the following:

(i) Recruiting, evaluating, and hiringof qualified candidates to serve asobservers, including minorities andwomen.

(ii) Ensuring that only observersprovide observer services.

(iii) Providing observer coverage asrequested by vessels and processors tofulfill requirements under paragraphs(c) and (d) of this section.

(iv) Providing observers’ salary,benefits and personnel services in atimely manner.

(v) Providing all logistics to place andmaintain the observers aboard thefishing vessels or at the site of theprocessing facility. This includes alltravel arrangements, lodging and perdiem, and any other services required toplace observers aboard vessels or atprocessing facilities. Placement ofobservers must occur according to thefollowing:

(A) Observers must not be deployedon the same vessel for more than 90days in a 12-month period.

(B) A deployment to a vessel or ashoreside processor cannot exceed 90days without approval from theObserver Program Office.

(C) A deployment cannot includeassignments to more than four vesselsand/or shoreside processors.

(vi) Supplying alternate observers orprospective observers if one or moreobservers or prospective observers arerejected by NMFS, fail to successfullycomplete observer training or briefing,are injured and must be replaced, orresign prior to completion of duties.

(vii) Maintaining communicationswith observers at sea and shoresidefacilities. Each observer contractor mustmake arrangements to have an employeeresponsible for observer activities oncall 24 hours a day whenever they haveobservers at sea, stationed at shoresidefacilities, in transit, or in port awaitingboarding, to handle emergenciesinvolving observers, or problemsconcerning observer logistics.

(viii) In cooperation with vessel orprocessing facility owners, ensuring thatall observers’ in-season catch messagesand other required transmissionsbetween observers and NMFS aredelivered to NMFS within a timespecified by the Regional Director.

(ix) Ensuring that observers completemid-deployment data reviews whenrequired.

(x) Ensuring that observers completedebriefing as soon as possible after thecompletion of their deployment and atlocations specified by the RegionalDirector.

(xi) Ensuring all data, reports, andbiological samples from observerdeployments are complete andsubmitted to NMFS at the time of thedebriefing interview.

(xii) Ensuring that all sampling andsafety gear are returned to the ObserverProgram Office and replacing any gearand equipment lost or damaged byobservers according to NMFSrequirements.

(xiii) Monitoring observers’performance to ensure satisfactoryexecution of duties by observers andobserver conformance with NMFS’standards of observer conduct underparagraph (h)(2) of this section.

(xiv) Providing the followinginformation to the Observer ProgramOffice by electronic transmission (e-mail) or by fax at fax number 206–526–4066.

(A) Observer training and briefingregistration. Observer trainingregistration consisting of a list ofindividuals to be hired upon approvalby NMFS and a copy of each person’sacademic transcripts and resume. Thelist must include the person’s name andsex. The person’s social security numberis requested. Observer briefingregistration consisting of a list of theobserver’s name and requested briefingclass date. This information must besubmitted to the Observer ProgramOffice at least 5 working days prior tothe beginning of a scheduled observercertification training or briefing session.

(B) Projected observer assignmentsthat include the observer’s name, vesselor shoreside processor assignment,vessel length and type, port ofembarkation, target species, and area offishing. This information must besubmitted to the Observer ProgramOffice prior to the completion of thetraining or briefing session.

(C) Observer deployment/logisticsreports that include the observer’sname, cruise number, current vessel orshoreside processor assignment andcode, embarkation date, and estimatedand actual disembarkation dates. Thisinformation must be submitted weekly

as directed by the Observer ProgramOffice.

(D) Observer debriefing registrationthat includes the observer’s name,cruise number, vessel or shoresideprocessor name(s), and requesteddebriefing date.

(E) Copies of ‘‘certificates ofinsurance’’ that name the NMFSObserver Program Task Leader as a‘‘certificate holder’’. The certificates ofinsurance shall verify the followingcoverage provisions and state that theinsurance company will notify thecertificate holder if insurance coverageis changed or cancelled:

(1) Maritime Liability to cover‘‘seamen’s’’ claims under the MerchantMarine Act (Jones Act) and GeneralMaritime Law ($1 million minimum).

(2) Coverage under the U.S. Longshoreand Harbor Workers’ Compensation Act($1 million minimum).

(3) States Worker’s Compensation asrequired.

(4) Contractual General Liability.(F) Notification that, based upon a

physical examination during the 12months prior to an observer’sdeployment, examining physicians havecertified that observers do not have anyhealth problems or conditions thatwould jeopardize their safety or thesafety of others while deployed, orprevent them from performing theirduties satisfactorily, and that prior toexamination, the certifying physicianwas made aware of the dangerous,remote and rigorous nature of the work.This information must be submittedprior to the completion of the trainingor briefing session.

(G) A copy of each type of signed andvalid contract an observer contractor haswith those entities requiring observerservices under paragraphs (c) and (d) ofthis section and with observers. Copiesof contracts with specific entitiesrequiring observer services or withspecific observers must be submitted tothe Observer Program Office uponrequest.

(H) Reports of observer harassment,concerns about vessel or processorsafety, or observer performanceproblems. These reports must besubmitted within 24 hours of when theobserver contractor becomes aware ofthe problem.

(3) Conflict of interest. (i) Observercontractors:

(A) Must not hold any direct financialinterest in a North Pacific fishery, otherthan the provision of observer services,including, but not limited to, vessels orshoreside facilities involved in thecatching or processing of the products ofthe fishery, concerns selling supplies orservices to said vessels or shoreside


facilities, or concerns purchasing raw orprocessed products from said vessels orshoreside facilities.

(B) Must assign observers withoutregard to any preference byrepresentatives of vessels and shoresidefacilities based on observer race, gender,age, religion, or sexual orientation.

(C) Must not solicit or accept, directlyor indirectly, any gratuity, gift, favor,entertainment, loan, or anything ofmonetary value from anyone whoconducts activities that are regulated byNMFS, or who has interests that may besubstantially affected by theperformance or nonperformance of theofficial duties of observer contractors.

(j) Decertification Process—(1)Applicability. This paragraph (j) setsforth the procedures for suspension anddecertification of observers and observercontractors under this section.

(2) Policy. (i) NMFS must certifyresponsible and qualified observers andobserver contractors only. Suspensionand decertification are discretionaryactions that, taken in accordance withthis section, are appropriate means toeffectuate this policy.

(ii) The serious nature of suspensionand decertification requires that theseactions be taken only in the publicinterest for the promotion of fisheryconservation and management and notfor purposes of punishment. NMFS mayimpose suspension or decertificationonly for the causes and in accordancewith the procedures set forth in thissection.

(3) Definitions. (i) Adequate evidencemeans information sufficient to supportthe reasonable belief that a particular actor omission has occurred.

(ii) Affiliates means businessconcerns, organizations, or individualsare affiliates of each other if, directly orindirectly, either one controls or has thepower to control the other, or a thirdparty controls or has the power tocontrol both. Indicators of controlinclude, but are not limited to,interlocking management or ownership,identity of interests among familymembers, shared facilities andequipment, common use of employees,or a business entity organized followingthe decertification, suspension, orproposed decertification of an observercontractor that has the same or similarmanagement, ownership, or principalemployees as the observer contractorthat was decertified, suspended, orproposed for decertification.

(iii) Civil judgment means a judgmentor finding of a civil offense by any courtof competent jurisdiction.

(iv) Conviction means a judgment orconviction of a criminal offense by anycourt of competent jurisdiction, whether

entered upon a verdict or a plea, andincludes a conviction entered upon aplea of nolo contendere.

(v) Decertification, as used in thisparagraph (j) means action taken by adecertifying official under paragraph(j)(8) of this section to revokeindefinitely certification of observers orobserver contractors under this section;an observer or observer contractorwhose certification is so revoked isdecertified.

(vi) Decertifying official means adesignee authorized by the RegionalDirector to impose decertification.

(vii) Indictment means indictment fora criminal offense. An information orother filing by competent authoritycharging a criminal offense must begiven the same effect as an indictment.

(viii) Legal proceedings means anycivil judicial proceeding to which theGovernment is a party or any criminalproceeding. The term includes appealsfrom such proceedings.

(ix) NMFS investigator means adesignee authorized by the RegionalDirector to conduct investigations underthis section.

(x) Preponderance of the evidencemeans proof by information that,compared with that opposing it, leads tothe conclusion that the fact at issue ismore probably true than not.

(xi) Suspending official means adesignee authorized by the RegionalDirector to impose suspension.

(xii) Suspension, as used in thissection, means action taken by asuspending official under this paragraph(j) to suspend certification of observersor observer contractors temporarily untila final decision is made with respect todecertification.

(4) Public availability of suspension ordecertification records. Publicavailability of suspension ordecertification records will dependupon the provisions of the Freedom ofInformation Act and other applicablelaw.

(5) Effect and timing of suspension ordecertification. (i) Observers or observercontractors decertified or suspendedmust not provide services prescribed bythis section to vessels and shoresideprocessors.

(ii) Suspension and decertificationactions may be combined and imposedsimultaneously.

(6) Suspension—(i) General. (A) Thesuspending official may, in the publicinterest, suspend observers or observercontractors for any of the causes inparagraph (j)(6)(ii) of this section, usingthe procedures in paragraph (j)(6)(iii) ofthis section.

(B) Suspension is a serious action tobe imposed on the basis of adequate

evidence, pending the completion ofinvestigation or legal proceedings, whenNMFS determines that immediate actionis necessary. In assessing the adequacyof the evidence, the suspending officialshould consider how much informationis available, how credible it is given thecircumstances, whether or notimportant allegations are corroborated,and what inferences can reasonably bedrawn as a result.

(C) Suspension includes all divisionsor other organizational elements ofobserver contractors, unless thesuspension decision is limited by itsterms to specific divisions ororganizational elements. Thesuspending official may include anyaffiliates of observer contractors if theyare specifically named and givenwritten notice of the suspension and anopportunity to respond.

(ii) Causes for suspension. (A) Thesuspending official may suspendobservers or observer contractors upon adetermination, based upon adequateevidence, that observers or observercontractors committed any acts oromissions constituting a cause fordecertification under paragraph (j)(7)(ii)of this section.

(B) Indictment for any of the causesfor decertification in paragraphs(j)(7)(ii)(A)(1) or (j)(7)(ii)(B)(1) of thissection constitutes adequate evidencefor suspension.

(iii) Procedures.—(A) Review. Thesuspending official must review allavailable evidence and must promptlydetermine whether or not to proceedwith suspension. The suspendingofficial may refer the matter to theNMFS investigator for furtherinvestigation, or to the decertifyingofficer.

(B) Notice of suspension. Whenobservers or observer contractors andany specifically named affiliates aresuspended, they must be immediatelyadvised personally or by certified mail,return receipt requested, at the lastknown residence or place of business:

(1) That they have been suspendedand that the suspension is based on anindictment or other adequate evidencethat observers or observer contractorshave committed acts or omissionsconstituting grounds for suspensionunder paragraph (j)(6)(ii) of this section.Such acts or omissions may bedescribed in terms sufficient to placeobservers or observer contractors onnotice without disclosing NMFS’evidence.

(2) That the suspension is for atemporary period pending thecompletion of an investigation and suchdecertification proceedings as mayensue.


(3) Of the cause(s) relied upon underparagraph (j)(6)(ii) of this section forimposing suspension.

(4) Of the effect of the suspension.(5) That, within 30 days after receipt

of the notice, the observers or observercontractors may submit, in writing,documentary evidence and argument inopposition to the suspension, includingany additional specific documentaryevidence that raises a genuine disputeover the material facts.

(6) That additional proceedings todetermine disputed material facts willbe conducted unless:

(i) the action is based on anindictment; or

(ii) a determination is made, on thebasis of NOAA General Counsel advice,that the substantial interests of thegovernment in pending or contemplatedlegal proceedings based on the samefacts as the suspension would beprejudiced.

(C) Dispute. In actions not based on anindictment, if NMFS determines that theobservers’ or observer contractors’submission in opposition raises agenuine dispute over facts material tothe suspension and if no determinationhas been made, on the basis of NOAAGeneral Counsel advice, that substantialinterests of the government in pendingor contemplated legal proceedings basedon the same facts as the suspensionwould be prejudiced, the suspendingofficial:

(1) Must afford observers or observercontractors an opportunity to submitadditional documentary evidence upona showing that such documentaryevidence was unavailable during the 30-day period following receipt of thenotice of suspension.

(2) May, at his or her sole discretion,afford observers or observer contractorsan opportunity to appear in person,present witnesses, and confront anyperson NMFS presents. The suspendingofficial must make an audio tape of theproceedings and make a copy availableat cost to observers or observercontractors upon request, unlessobservers or observer contractors andNMFS, by mutual agreement, waive therequirement for an audio tape.

(D) Suspending official’s decision. (1)The suspending official’s decision mustbe based on all the information in theadministrative record, including anysubmission made by observers orobserver contractors on action based onan indictment:

(i) in which observers or observercontractors’ submission does not raise agenuine dispute over material facts; or

(ii) in which additional proceedings todetermine disputed material facts have

been denied on the basis of NOAAGeneral Counsel advice.

(2) In actions in which additionalproceedings are necessary as to disputedmaterial facts, written findings of factmust be prepared. The suspendingofficial must base the decision on thefacts as found, together with anyinformation and argument submitted byobservers or observer contractors andany other information in theadministrative record.

(3) The suspending official may refermatters involving disputed materialfacts to another official for findings offact. The suspending official may rejectany such findings, in whole or in part.

(4) The suspending official’s decisionmust be made after the conclusion of theproceedings with respect to disputedfacts.

(5) Prompt written notice of thesuspending official’s decision to affirm,modify or terminate the notice ofsuspension issued under this paragraph(j)(6) must be served on observers orobserver contractors and any affiliatesinvolved, personally or by certifiedmail, return receipt requested, at the lastknown residence or place of business.

(E) Period of suspension. (1)Suspension must be for a temporaryperiod pending the completion ofinvestigation and any ensuing legalproceedings or decertificationproceedings, including anyadministrative review under paragraph(j)(8) of this section, unless soonerterminated by the suspending official oras provided under this paragraph (j). Ifsuspension is in effect, the decertifyingofficial will expedite any relateddecertification proceedings.

(2) If legal proceedings ordecertification proceedings are notinitiated within 12 months after the dateof the suspension notice, the suspensionmust be terminated.

(F) Scope of suspension for observercontractors. The scope of suspensionmust be the same as that fordecertification under paragraph (j)(7)(v)of this section, except that theprocedures set out under paragraph(j)(6) of this section must be used inimposing suspension.

(7) Decertification—(i) General. (A)The decertifying official may, in thepublic interest, decertify observers orobserver contractors for any of thecauses in paragraph (j)(7)(ii) of thissection using the procedures inparagraph (j)(7)(iii) of this section. Theexistence of a cause for decertificationdoes not necessarily require thatobservers or observer contractors bedecertified; the seriousness of the acts oromissions and any mitigating factorsshould be considered in making any

decertification decision. The existenceor nonexistence of any mitigating factorsis not necessarily determinative of anobservers’ or observer contractors’present fitness. Accordingly, if a causefor decertification exists, observers orobserver contractors have the burden ofdemonstrating, to the satisfaction of thedecertifying official, present fitness andthat decertification is not necessary.

(B) Decertification of observercontractors includes all divisions orother organizational elements of theobserver contractor, unless thedecertification decision is limited by itsterms to specific divisions ororganizational elements. Thedecertifying official may, at his or hersole discretion, include any affiliates ofobserver contractors if they arespecifically named and given writtennotice of the proposed decertificationand an opportunity to respond underparagraph (j)(7)(iii)(C) of this section.

(ii) Causes for decertification—(A)Observers. (1) The decertifying officialmay decertify observers for a convictionof or civil judgment for the following:

(i) Commission of fraud or a criminaloffense in connection with obtaining orattempting to obtain certification, or inperforming the duties of observers asprescribed by NMFS;

(ii) Commission of embezzlement,theft, forgery, bribery, falsification ordestruction of records, making falsestatements, or receiving stolen property;or

(iii) Commission of any other offenseindicating a lack of integrity or honestythat seriously and directly affects thepresent fitness of observers.

(2) The decertifying official maydecertify observers, based upon apreponderance of the evidence, upon adetermination that observers have:

(i) Failed to satisfactorily perform theduties of observers as prescribed byNMFS; or

(ii) Failed to abide by the standards ofconduct for observers as prescribedunder paragraph (h)(2) of this section.

(B) Observer contractors. (1) Thedecertifying official may decertifyobserver contractors for a conviction ofor civil judgment for the following:

(i) Commission of fraud or a criminaloffense in connection with obtaining orattempting to obtain certification, or inperforming the responsibilities andduties of observer contractors asprescribed under paragraph (i)(2) of thissection;

(ii) Commission of embezzlement,theft, forgery, bribery, falsification ordestruction of records, making falsestatements, or receiving stolen property;or


(iii) Commission of any other offenseindicating a lack of business integrity orbusiness honesty that seriously anddirectly affects the present fitness ofobserver contractors.

(2) The decertifying official maydecertify observer contractors, basedupon a preponderance of the evidence,upon a determination that observercontractors have:

(i) Failed to satisfactorily perform theresponsibilities and duties of observercontractors as prescribed underparagraph (i)(2) of this section; or

(ii) A conflict of interest as set outunder paragraph (i)(3) of this section.

(iii) Procedures—(A) Investigationand referral. NMFS personnel mustpromptly report to the NMFSinvestigator matters appropriate forfurther investigation. The NMFSinvestigator must investigate matters soreferred and submit the investigativematerial to the decertifying official or, ifappropriate, to the suspending official.

(B) Review. The decertifying officialmust review all available evidence andmust promptly determine whether ornot to proceed with decertification. Thedecertifying official may refer the matterto the NMFS investigator for furtherinvestigation or, if appropriate, to thesuspending official.

(C) Notice of proposed decertification.If the decertifying official determines toproceed with decertification, he or shemust serve a notice of proposeddecertification upon observers orobserver contractors and anyspecifically named affiliates, personallyor by certified mail, return receiptrequested, at the last known residenceor place of business, advising:

(1) That decertification is beingconsidered.

(2) Of the reasons for the proposeddecertification in terms sufficient to putobservers or observer contractors onnotice of the conduct or transaction(s)upon which it is based.

(3) Of the cause(s) relied upon underparagraph (j)(7)(ii) of this section forproposing decertification.

(4) That, within 30 days after receiptof the notice, observers or observercontractors may submit, in writing,documentary evidence and argument inopposition to the proposeddecertification, including any additionalspecific documentary evidence thatraises a genuine dispute over thematerial facts.

(5) Of NMFS’ procedures governingdecertification decision making.

(6) Of the effect of the issuance of thenotice of proposed decertification.

(7) Of the potential effect of an actualdecertification.

(D) Dispute. In actions not based upona conviction or civil judgment, if it isfound that observers’ or observercontractors’ submission raises a genuinedispute over facts material to theproposed decertification, thedecertifying official:

(1) Must afford observers or observercontractors an opportunity to submitadditional documentary evidence upona showing that such documentaryevidence was unavailable during the 30-day period following receipt of thenotice of proposed decertification.

(2) May, at his or her sole discretion,afford observers or observer contractorsan opportunity to appear in person,present witnesses, and confront anyperson NMFS presents. The decertifyingofficial must make an audio tape of theproceedings and make a copy availableat cost to observers or observercontractors upon request, unlessobservers or observer contractors andNMFS, by mutual agreement, waive therequirement for an audio tape.

(E) Decertifying official’s decision. (1)In actions based upon a conviction orjudgment, or in which there is nogenuine dispute over material facts, thedecertifying official must make adecision on the basis of all theinformation in the administrativerecord, including any submission madeby observers or observer contractors.The decision must be made after receiptof any timely information and argumentsubmitted by observers or observercontractors.

(2) In actions in which additionalproceedings are necessary as to disputedmaterial facts, written findings of factmust be prepared. The decertifyingofficial must base the decision on thefacts as found, together with anyinformation and argument submitted byobservers or observer contractors andany other information in theadministrative record.

(3) The decertifying official may refermatters involving disputed materialfacts to another official for findings offact. The decertifying official may rejectany such findings, in whole or in part.

(4) The decertifying official’s decisionmust be made after the conclusion of theproceedings with respect to disputedfacts.

(5) In any action in which theproposed decertification is not basedupon a conviction or civil judgment, thecause for decertification may beestablished by a preponderance of theevidence.

(F) Notice of decertifying official’sdecision. (1) If the decertifying officialdecides to impose decertification,observers or observer contractors andany affiliates involved must be given

prompt notice personally or by certifiedmail, return receipt requested, at the lastknown residence or place of business.Such notice must:

(i) Refer to the notice of proposeddecertification;

(ii) Specify the reasons fordecertification; and

(iii) Advise that the decertification iseffective immediately, unless thedecertifying official determines thatthere is a compelling reason formaintaining certification for a specifiedperiod under conditions and restrictionsnecessary and appropriate to protect thepublic interest or promote fisheryconservation and management andstates the reasons in the notice.

(2) If decertification is not imposed,the decertifying official must promptlynotify observers or observer contractorsand any affiliates involved, by certifiedmail, return receipt requested, at the lastknown residence or place of business.

(iv) Period of decertification. (A)Decertification must be in forceindefinitely or until rescinded.

(B) The decertifying official mayrescind decertification, upon observersor observer contractors’ request,supported by documentation, forreasons such as:

(1) Newly discovered materialevidence;

(2) Reversal of the conviction or civiljudgment upon which thedecertification was based;

(3) Bona fide change in ownership ormanagement;

(4) Elimination of other causes forwhich the decertification was imposed;or

(5) Other reasons the decertifyingofficial deems appropriate.

(v) Scope of decertification. (A) Thefraudulent, criminal, or other seriouslyimproper conduct of any officer,director, shareholder, partner,employee, or other individualassociated with observer contractorsmay be imputed to the observercontractor when the conduct occurredin connection with the individual’sperformance of duties for or on behalfof observer contractors, or with observercontractors’ knowledge, approval, oracquiescence. Observer contractors’acceptance of the benefits derived fromthe conduct must be evidence of suchknowledge, approval, or acquiescence.

(B) The fraudulent, criminal, or otherseriously improper conduct of observercontractors may be imputed to anyofficer, director, shareholder, partner,employee, or other individualassociated with observer contractorswho participated in, knew of, or hadreason to know of the contractors’conduct.


(8) Administrative review ofsuspension or decertification. (i)Observers or observer contractors maypetition for review of a suspensiondecision issued under paragraph(j)(6)(iii) of this section or adecertification decision issued underparagraph (j)(7)(iii) of this sectionwithin 30 days after the date thedecision was served. The petition mustbe addressed to the appeals officeridentified in the notice of suspension ordecertification. Any petitionedsuspension will remain in effectpending the appeals officer’s writtendecision to affirm, modify or terminatethe suspension.

(ii) Administrative review isdiscretionary. Petitions for discretionaryreview may be filed only upon one ormore of the following grounds:

(A) A finding of material fact isclearly erroneous based upon theadministrative record;

(B) A substantial and importantquestion of policy or discretion isinvolved; or

(C) A prejudicial error has occurred.(iii) If the appeals officer declines

review based on the written petition,observers or observer contractors mustbe immediately advised of the decisionto decline review personally or bycertified mail, return receipt requested,at the last known residence or place ofbusiness.

(iv) If the appeals officer grants reviewbased on the written petition, he or shemay request further written explanationfrom observers, observer contractors, orthe decertifying officer or suspendingofficer. The appeals officer will thenrender a written decision to affirm,modify or terminate the suspension ordecertification or return the matter tothe suspending or decertifying officialfor further findings. The appeals officermust base the decision on theadministrative records compiled underparagraph (j)(6) or (i)(7) of this section,as appropriate. The appeals officer will

serve the decision on observers orobserver contractors and any affiliatesinvolved, personally or by certifiedmail, return receipt requested, at the lastknown residence or place of business.

(v) An appeals officer’s decisionimposing suspension or decertificationor an unpetitioned suspending ordecertifying official’s decision is thefinal administrative decision of the U.S.Department of Commerce.

(k) Release of observer data to thepublic—(1) Summary of weekly data.The following information collected byobservers for each catcher processor andcatcher vessel during any weeklyreporting period may be made availableto the public:

(i) Vessel name and Federal permitnumber;

(ii) Number of chinook salmon and‘‘other salmon’’ observed;

(iii) The ratio of total round weight ofhalibut or Pacific herring to the totalround weight of groundfish in sampledcatch;

(iv) The ratio of number of king crabor C. bairdi Tanner crab to the totalround weight of groundfish in sampledhauls;

(v) The number of observed trawlhauls or fixed gear sets;

(vi) The number of trawl hauls thatwere basket sampled; and

(vii) The total weight of basketsamples taken from sampled trawlhauls.

(2) Haul-specific data. (i) Theinformation listed in paragraphs (k)(2)(i)(A) through (M) of this section andcollected by observers from observedhauls onboard vessels using trawl gearto participate in a directed fishery forgroundfish other than rockfish,Greenland turbot, or Atka mackerel maybe made available to the public:

(A) Date.(B) Time of day gear is deployed.(C) Latitude and longitude at

beginning of haul.(D) Bottom depth.

(E) Fishing depth of trawl.(F) The ratio of the number of chinook

salmon to the total round weight ofgroundfish.

(G) The ratio of the number of othersalmon to the total round weight ofgroundfish.

(H) The ratio of total round weight ofhalibut to the total round weight ofgroundfish.

(I) The ratio of total round weight ofherring to the total round weight ofgroundfish.

(J) The ratio of the number of kingcrab to the total round weight ofgroundfish.

(K) The ratio of the number of C.bairdi Tanner crab to the total roundweight of groundfish.

(L) Sea surface temperature (whereavailable).

(M) Sea temperature at fishing depthof trawl (where available).

(ii) The identity of the vessels fromwhich the data in paragraph (k)(2)(i) ofthis section are collected will not bereleased.

(3) Competitive harm. In exceptionalcircumstances, the owners andoperators of vessels may provide to theRegional Director written justification atthe time observer data are submitted, orwithin a reasonable time thereafter, thatdisclosure of the information listed inparagraphs (k) (1) and (2) of this sectioncould reasonably be expected to causesubstantial competitive harm. Thedetermination whether to disclose theinformation will be made pursuant to 15CFR 4.7.

Nomenclature Amendments


9. In part 679, remove ‘‘NMFS-certified’’ wherever it occurs.


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

40394

Vol. 61, No. 150



Forest Service

California Spotted Owl—SierraNevada—Management Direction forNational Forests in California

AGENCY: Forest Service, USDA.

ACTION: Issue a Revised DraftEnvironmental Impact Statement (EIS)and change the anticipated date forfiling the Final EIS.

SUMMARY: The USDA, Forest Service,Pacific Southwest Region, will issue aRevised Draft EIS for amending thePacific Southwest Regional Guide andsignificantly amending 10 NationalForest Plans. Changes, including a newpreferred alternative, have been madefrom the original Draft EIS in responseto public comments. The Forest Servicenow anticipates filing the Final EISduring the first quarter of Calendar Year1997.

ADDRESSES: Send written comments toJanice Gauthier, California Spotted OwlEIS Team Leader, EcosystemConservation, 2999 Fulton Avenue,Sacramento, CA 95821.

FOR FURTHER INFORMATION CONTACT:Janice Gauthier, California Spotted OwlEIS Team Leader, EcosystemConservation, (916) 979–2026.

SUPPLEMENTARY INFORMATION: On March18, 1993, a Notice of Intent (NOI) toprepare an EIS was published in theFederal Register (Vol. 58, No. 51, Pages14554–14555). A Revised NOI waspublished in the Federal Register onMarch 1, 1996 (Vol. 61, No. 42, Page8025).

Dated: July 29, 1996.Katherine Clement,Assistant Regional Forester, EcosystemConservation.[FR Doc. 96–19648 Filed 8–1–96; 8:45 am]BILLING CODE 3410–11–M

NATIONAL FOUNDATION ON THEARTS AND THE HUMANITIES

Institute of Museum Services;Submission for OMB Review;Comment Request

July 26, 1996.The Institute of Museum Services has

submitted the following publicinformation request to the Office ofManagement and Budget for review andapproval in accordance with thePaperwork Reduction Act of 1995 (Pub.L. 104–13,44 U.S.C. Chapter 35). A copyof this ICR, with applicable supportingdocumentation, may be obtained bycalling the Institute of MuseumServices, Program Director, RebeccaDanvers (202) 606–8539. Individualswho use a telecommunications devicefor the deaf (TTY/TDD) may call (202)606–8636.

Comments should be sent to Office ofInformation and Regulatory Affairs,Attn.: OMB Desk Officer for Education,Office of Management and Budget,Room 10235, Washington, DC 20503(202) 395–7316, within 30 days from thedate of this publication in the FederalRegister.

The OMB is particularly interested incomments which:

• Evaluate whether the proposedcollection of information is necessaryfor the proper performance of thefunctions of the agency, includingwhether the information will havepractical utility;

• Evaluate the accuracy of theagency’s estimate of the burden of theproposed collection of information,including the validity of themethodology and assumptions used;

• Enhance the quality, utility, andclarity of the information to becollected; and

• Minimize the burden of thecollection of information on those whoare to respond, including through theuse of appropriate automated,electronic, mechanical, or othertechnological collection techniques orother forms of information technology,e.g., permitting electronic submission ofresponses.

Agency: Institute of Museum Services.Title: Status of Educational

Programming between Museums andSchools.

OMB Number: N/A.Agency Number: 3136.Frequency: One time.

Affected Public: Not-for-profitinstitutions.

Estimated Time Per Respondent: 30minutes.

Total Burden Hours: 200 hours.Total Annualized capital/startup

costs: 0.Total annual costs (operation/

maintaining systems or purchasingservices): 0.

Description: IMS supports museumschool partnerships for K–12 schoolchildren through the MuseumLeadership Initiative program. In the fallof 1995, IMS sponsored a conference onmuseum school partnerships.Information about the projects IMS hassupported an on selected conferenceproceedings will be published anddisseminated widely to the museum andschool communities. IMS also intendsto collect, analyze and disseminate datato document the current status ofeducational programming activitybetween museums and schools.

Currently, no body of data exists toidentify how museums are interactingwith schools to advance the educationof the nation’s school age population.Therefore, we propose to survey aportion of the museums communitywith a brief questionnaire to collect thisinformation. The data collection isintended to provide the basis ofstatistical conclusions about the natureand level of educational programmingbetween museums and schools, butrather to illustrate the current status andthe possibilities for furtherdevelopment.Diane B. Frankel,Director.[FR Doc. 96–19630 Filed 8–1–96; 8:45 am]BILLING CODE 7036–01–M

COMMITTEE FOR PURCHASE FROMPEOPLE WHO ARE BLIND ORSEVERELY DISABLED

Procurement List; Additions

AGENCY: Committee for Purchase FromPeople Who Are Blind or SeverelyDisabled.ACTION: Additions to the ProcurementList.

SUMMARY: This action adds to theProcurement List services to befurnished by nonprofit agenciesemploying persons who are blind orhave other severe disabilities.

40395Federal Register / Vol. 61, No. 150 / Friday, August 2, 1996 / Notices

EFFECTIVE DATE: September 3, 1996.ADDRESSES: Committee for PurchaseFrom People Who Are Blind or SeverelyDisabled, Crystal Square 3, Suite 403,1735 Jefferson Davis Highway,Arlington, Virginia 22202–3461.FOR FURTHER INFORMATION CONTACT:Beverly Milkman (703) 603–7740.SUPPLEMENTARY INFORMATION: OnJanuary 26 and May 10, 1996, theCommittee for Purchase From PeopleWho Are Blind or Severely Disabledpublished notices (61 FR 2494 and21444) of proposed additions to theProcurement List.

Comments were received from thecompany which is the currentcontractor for these proposed additionsto the Procurement List. The contractorlisted its current contracts, and notedthat two thirds of them, including thetwo affected by the Committee’sproposals, will expire in 1998 if alloptions are exercised. The contractorclaimed that loss of all these contractswould reduce its total revenuessubstantially.

According to information available tothe Committee, the contracts for thesetwo services represent only a fifth of thetotal revenue loss which the contractorpredicted to occur in 1998, and even asmaller percentage of the contractor’stotal sales. The contractor admitted tothe Committee staff that it would not beprecluded from bidding on thesuccessor contracts to those expiring in1998, other than for the two servicesbeing added to the Procurement List,and that the company could seek otherbusiness as well.

Under these circumstances, theCommittee does not believe that addingthese two services to the ProcurementList would have a severe adverse impacton the contractor. The sales loss isbelow the level which the Committeeconsiders to cause severe adverseimpact, the contractor has opportunitiesto mitigate the loss, and the length oftime until the contracts expire will givethe contractor both motive andopportunity to find replacementbusiness for the contracts being addedto the Procurement List.

After consideration of the materialpresented to it concerning capability ofqualified nonprofit agencies to providethe services and impact of the additionson the current or most recentcontractors, the Committee hasdetermined that the services listedbelow are suitable for procurement bythe Federal Government under 41 U.S.C.46–48c and 41 CFR 51–2.4.

I certify that the following action willnot have a significant impact on asubstantial number of small entities.

The major factors considered for thiscertification were:

1. The action will not result in anyadditional reporting, recordkeeping orother compliance requirements for smallentities other than the smallorganizations that will furnish theservices to the Government.

2. The action will not have a severeeconomic impact on current contractorsfor the services.

3. The action will result inauthorizing small entities to furnish theservices to the Government.

4. There are no known regulatoryalternatives which would accomplishthe objectives of the Javits-Wagner-O’Day Act (41 U.S.C. 46 - 48c) inconnection with the services proposedfor addition to the Procurement List.

Accordingly, the following servicesare hereby added to the ProcurementList:Switchboard Operation, Oklahoma City Air

Logistics Center, Tinker Air Force Base,Oklahoma

Unclassified Technical Order & DecalDistribution, Oklahoma City AirLogistics Center, Tinker Air Force Base,Oklahoma

This action does not affect currentcontracts awarded prior to the effectivedate of this addition or options that maybe exercised under those contracts.Beverly L. Milkman,Executive Director.[FR Doc. 96–19699 Filed 8–01–96; 8:45 am]BILLING CODE 6353–01–P

Procurement List; Proposed Additions

AGENCY: Committee for Purchase FromPeople Who Are Blind or SeverelyDisabled.ACTION: Proposed additions toProcurement List.

SUMMARY: The Committee has receivedproposals to add to the Procurement Lista commodity and services to befurnished by nonprofit agenciesemploying persons who are blind orhave other severe disabilities.COMMENTS MUST BE RECEIVED ON ORBEFORE: September 3, 1996.ADDRESSES: Committee for PurchaseFrom People Who Are Blind or SeverelyDisabled, Crystal Square 3, Suite 403,1735 Jefferson Davis Highway,Arlington, Virginia 22202–3461.FOR FURTHER INFORMATION CONTACT:Beverly Milkman (703) 603–7740.SUPPLEMENTARY INFORMATION: Thisnotice is published pursuant to 41U.S.C. 47(a) (2) and 41 CFR 51–2.3. Itspurpose is to provide interested personsan opportunity to submit comments on

the possible impact of the proposedactions.

If the Committee approves theproposed additions, all entities of theFederal Government (except asotherwise indicated) will be required toprocure the commodity and serviceslisted below from nonprofit agenciesemploying persons who are blind orhave other severe disabilities.

I certify that the following action willnot have a significant impact on asubstantial number of small entities.The major factors considered for thiscertification were:

1. The action will not result in anyadditional reporting, recordkeeping orother compliance requirements for smallentities other than the smallorganizations that will furnish thecommodity and services to theGovernment.

2. The action does not appear to havea severe economic impact on currentcontractors for the commodity andservices.

3. The action will result inauthorizing small entities to furnish thecommodity and services to theGovernment.

4. There are no known regulatoryalternatives which would accomplishthe objectives of the Javits-Wagner-O’Day Act (41 U.S.C. 46 - 48c) inconnection with the commodity andservices proposed for addition to theProcurement List.

Comments on this certification areinvited. Commenters should identify thestatement(s) underlying the certificationon which they are providing additionalinformation.

The following commodity andservices have been proposed foraddition to Procurement List forproduction by the nonprofit agencieslisted:

CommodityPouchfastener, Swivel Assembly

P.S. NIB 38 NPA: Mississippi Industries forthe Blind, Jackson, Mississippi

ServicesJanitorial/Custodial, Luke Air Force Base,

ArizonaNPA: The Centers for Habilitation/TCH,

Tempe, ArizonaJanitorial/Custodial, Base Fitness Center,

MacDill Air Force Base, FloridaNPA: The Pinellas Association for Retarded

Children St. Petersburg, FloridaJanitorial/Custodial, Caven Point USARC,

Chapel Avenue, Jersey City, New JerseyNPA: The First Occupational Center of New

Jersey, Orange, New JerseyMilitary Unique Subsistence Items Coord.,

Defense Personnel Support Center,Philadelphia, Pennsylvania

40396 Federal Register / Vol. 61, No. 150 / Friday, August 2, 1996 / Notices

NPA: The Advocacy and Resources Corp.(ARC), Cookeville, Tennessee

Beverly L. Milkman,Executive Director.[FR Doc. 96–19700 Filed 8–1–96; 8:45 am]BILLING CODE 6353–01–P


Foreign-Trade Zones Board

[Docket 61–96]

Foreign-Trade Zone 17—Kansas City,Kansas Area Application forExpansion

An application has been submitted tothe Foreign-Trade Zones Board (theBoard) by the Greater Kansas CityForeign Trade Zone, Inc., grantee ofForeign-Trade Zone 17, requestingauthority to expand its zone in theKansas City, Kansas area, adjacent to theKansas City, Missouri, Customs port ofentry. The application was submittedpursuant to the provisions of theForeign-Trade Zones Act, as amended(19 U.S.C. 81a–81u), and the regulationsof the Board (15 CFR Part 400). It wasformally filed on July 24, 1996.

FTZ 17 was approved on December20, 1973 (Board Order 97, 39 FR 26, 1/2/74) and expanded on January 31, 1989(Board Order 428, 54 FR 5992, 2/7/89)and January 15, 1993 (Board Order 631,58 FR 6112, 1/26/93). The zone projectcurrently consists of five sites in theKansas City area: Site 1 (405,000 sq.ft.)—6500 Inland Drive, Kansas City;Site 2 (220,000 sq. ft.)—5203 SpeakerRoad, Kansas City; Site 3 (5 acres,26,000 sq. ft.)—30 Funston Road,Kansas City; Site 4 (50,000 sq. ft.)—830Kindleberger Road, Kansas City; and,Site 5 (23 acres)—1800 South SecondStreet, Leavenworth.

The applicant is now requestingauthority to expand the general-purposezone to include two sites in Topeka,Kansas (proposed Sites 6 and 7):Proposed Site 6 (2,400 acres)—ForbesField Airport/Topeka Air IndustrialPark, 6700 South Topeka Blvd., Topeka;and, Proposed Site 7 (972 acres)—PhilipBillard Airport/Industrial ParkComplex, 3600 Sardue, Topeka. Bothsites are owned and managed by theMetropolitan Topeka Airport Authorityand include air cargo facilities and jetfuel storage/distribution facilities. Nospecific manufacturing requests arebeing made at this time. Such requestswould be made to the Board on a case-by-case basis.

In accordance with the Board’sregulations, a member of the FTZ Staffhas been designated examiner to

investigate the application and report tothe Board.

Public comment on the application isinvited from interested parties.Submissions (original and 3 copies)shall be addressed to the Board’sExecutive Secretary at the addressbelow. The closing period for theirreceipt is October 1, 1996. Rebuttalcomments in response to materialsubmitted during the foregoing periodmay be submitted during the subsequent15-day period (to October 16, 1996).

A copy of the application andaccompanying exhibits will be availablefor public inspection at each of thefollowing locations:U.S. Department of Commerce Export

Assistance Center, 601 East 12thStreet, Rm. 635, Kansas City, MO64106.

Office of the Executive Secretary,Foreign-Trade Zones Board, Room3716, U.S. Department of Commerce,14th and Pennsylvania Avenue, NW.,Washington, DC 20230.Dated: July 25, 1996.

John J. Da Ponte, Jr.,Executive Secretary.[FR Doc. 96–19723 Filed 8–1–96; 8:45 am]BILLING CODE 3510–DS–P

INTERNATIONAL TRADEADMINISTRATION

[A–427–812]

Calcium Aluminate Flux From France;Preliminary Results of AntidumpingDuty Administrative Review

AGENCY: Import Administration,International Trade Administration,Department of Commerce.ACTION: Notice of preliminary results ofantidumping duty administrativereview.

SUMMARY: In response to a request fromone respondent, Lafarge FonduInternational (LFI) and its U.S.subsidiary, Lafarge Calcium Aluminates,Inc. (LCA) (collectively, Lafarge), theDepartment of Commerce (theDepartment) is conducting anadministrative review of theantidumping duty order on calciumaluminate (CA) flux from France. Thisreview covers one manufacturer/exporter of the subject merchandise tothe United States, Lafarge, for the periodJune 15, 1994 through May 31, 1995.

We have preliminarily determinedthat U.S. sales have been made belownormal value (NV). If these preliminaryresults are adopted in our final resultsof administrative review, we willinstruct the U.S. Customs Service

(Customs) to assess antidumping dutiesequal to the differences between theUnited States Price (USP) and NV.

Interested parties are invited tocomment on these preliminary results.Parties who submit arguments in thisproceeding are requested to submit withthe argument (1) a statement of theissues, and (2) a brief summary of theargument.EFFECTIVE DATE: August 2, 1996.FOR FURTHER INFORMATION CONTACT:Maureen McPhillips or John Kugelman,Office 8 of the Deputy AssistantSecretary’s Enforcement Group 3,Import Administration, InternationalTrade Administration, U.S. Departmentof Commerce, 14th Street andConstitution Avenue, N.W.,Washington, D.C. 20230, telephone:(202) 482–5253.

The Applicable Statute

Unless otherwise indicated, allcitations to the statute are references tothe provisions effective January 1, 1995,the effective date of the amendmentsmade to the Tariff Act of 1930 (the Act)by the Uruguay Round Agreements Act(URAA). In addition, unless otherwiseindicated, all citations to theDepartment’s regulations are to thecurrent regulations, as amended by theinterim regulations published in theFederal Register on May 11, 1995 (60FR 25130).


BackgroundOn June 13, 1994, the Department

published in the Federal Register (59FR 30337) the antidumping duty orderon CA flux from France. On June 6,1995 (60 FR 29821), the Departmentpublished in the Federal Register anotice of opportunity to request anadministrative review of theantidumping duty order on CA fluxfrom France. In accordance with 19 CFR353.22(a)(1)(1995), we received a timelyrequest for review from a respondent,Lafarge. We published a notice ofinitiation of this antidumping dutyadministrative review on July 14, 1995(60 FR 36260), for the period June 15,1994 through May 31, 1995.

The Department is now conductingthis administrative review inaccordance with section 751 of the Act.

Scope of the ReviewImports covered by this review are

shipments of CA flux, other than white,high purity CA flux. This productcontains by weight more than 32percent but less than 65 percentalumina and more than one percenteach of iron and silica.


CA flux is currently classifiable underthe Harmonized Tariff Schedule of theUnited States (HTSUS) subheading2523.10.0000. The HTSUS subheadingis provided for convenience and U.S.Customs’ purposes only. The writtendescription of the scope of this orderremains dispositive.

Constructed Export PriceIn calculating Lafarge’s USP, the

Department treated respondent’s salesas CEP sales, as defined in section772(b) of the Act, because the subjectmerchandise was sold to the firstunaffiliated purchaser after importationinto the United States.

We calculated CEP based on packedor bulk, ex-U.S. warehouse or deliveredprices to unaffiliated customers in theUnited States. We made deductionsfrom the gross unit price, whereappropriate, for the following movementcharges: loading material at the Fosplant in France, foreign inland freightfrom plant to port, international freight,marine insurance, U.S. brokerage andhandling, inland freight from port toU.S. warehouse, unloading costs, inlandfreight to processors, demurragecharges, and U.S. freight from thewarehouse to the customer, inaccordance with section 772(c)(2)(A) ofthe Act. Pursuant to section772(d)(1)(B), we also deducted creditexpenses, product liability insurance,and travel expenses for technicalservices. Pursuant to section772(d)(1)(D), we deducted U.S. indirectselling expenses and inventory carryingcosts incurred in the United States. Wedid not deduct indirect selling expenses(i.e., administrative expenses, inventorycarrying costs, personnel costs fortechnicians) incurred by LFI in Francebecause we did not deem theseexpenses to be specifically related tocommercial activity in the UnitedStates. We also deducted commissionsin accordance with section 772(d)(1)(A)of the Act.

For reasons stated in the level-of-tradesection of this notice, we grantedLafarge a CEP offset under section773(a)(7)(B) of the Act. Whereapplicable, in accordance with 19 CFR§ 353.56(b), we offset any commissionpaid on a U.S. sale by reducing the NVby any home market indirect sellingexpenses remaining after the deductionfor the CEP offset.

Further ManufactureIn addition, we adjusted CEP, where

appropriate, for all value added in theUnited States, including theproportional amount of profitattributable to the value added,pursuant to section 772(d)(2) and

772(d)(3) of the Act. The value addedconsists of the costs associated with theproduction of the further manufacturedproducts, other than costs associatedwith the imported products. Todetermine the costs incurred to producethe further manufactured products, weincluded (1) the costs of manufacture,(2) movement and repacking expenses,(3) selling, general and administrativeexpenses, and interest expenses. Profitwas calculated by deducting allapplicable costs, charges, adjustments,and expenses from the sales price. Thetotal profit was then allocatedproportionally to all components ofcost. We deducted only the profitattributable to the value added in theUnited States. No other adjustments toCEP were claimed or allowed.

Normal Value (NV)

A. Viability

Based on a comparison of theaggregate quantity of home market andU.S. sales, we determined that thequantity of the foreign like product soldin the exporting country by Lafarge wassufficient to permit a proper comparisonwith Lafarge’s sales of the subjectmerchandise to the United States,pursuant to section 773(a)(1)(B)(i) of theAct. Therefore, in accordance withsections 773(a)(1)(B)(i) and 773(a)(5), webased NV on the prices at which theforeign like products were sold to thefirst unaffiliated purchaser forconsumption in the exporting country.

B. Model Match

In accordance with section 771(16)(B)of the Act, we considered all productsproduced by the respondent, covered bythe description in the Scope of theReview section above, and sold in thehome market during the POR, to beforeign like products for purposes ofdetermining appropriate productcomparisons to U.S. sales. Since therewere no sales of identical merchandisein the home market to compare to U.S.sales, we matched U.S. sales to the mostsimilar foreign like product based on thephysical characteristics reported by therespondent, Lafarge. Among similarproducts sold in the home market wechose that product with the leastdifference in variable costs ofmanufacture between the home marketand the U.S. product. We did not useany home market product which, whencompared to the U.S. model, had avariable cost of manufacture in excess of20 percent of the total cost ofmanufacture of the U.S. model (seeCertain Stainless Steel Cooking Warefrom the Republic of Korea: PreliminaryResults of Antidumping Duty

Administrative Review, 61 FR 8253,8254 (March 4, 1996)).

C. Level of TradeAs set forth in section 773(a)(1)(B)(i)

of the Act and in the Statement ofAdministrative Action (SAA)accompanying the URAA, at 829–831,the Department will, to the extentpracticable, calculate NV based on salesat the same level of trade as the U.S.sales. When the Department is unable tofind a sale of the foreign like product inthe comparison market at the same levelof trade as the U.S. sale, the Departmentmay compare the U.S. sales to sales ata different level of trade in thecomparison market.

In accordance with section773(a)(7)(A) of the Act, if sales atdifferent levels of trade are compared,the Department will adjust the NV toaccount for the difference in levels oftrade if two conditions are met. First,there must be differences between theactual selling functions performed bythe seller at the level of trade of the U.S.sale and at the level of trade of thecomparison market sale used todetermine NV. Second, the differencesmust affect price comparability asevidenced by a pattern of consistentprice differences between sales at thedifferent levels of trade in the market inwhich NV is determined.

Section 773(a)(7)(B) of the Actestablishes that a constructed exportprice (CEP) ‘‘offset’’ may be made whentwo conditions exist: (1) NV isestablished at a level of trade whichconstitutes a more advanced stage ofdistribution than the level of trade of theCEP; and (2) the data available do notprovide an appropriate basis for a level-of-trade adjustment.

To implement these principles in thisreview, we requested information on theselling activities associated with eachchannel of distribution in each ofLafarge’s markets. We asked Lafarge toestablish any claimed levels of tradebased on the selling functions providedto each proposed customer group, andto document and explain any claims fora level-of-trade adjustment.

To determine whether a separate levelof trade existed within or between theUnited States and the home market, weexamined the selling functionsperformed by Lafarge for each of thecustomer groups. Since all of Lafarge’sU.S. sales were CEP sales, weconsidered the selling functionsreflected in the price after the deductionof expenses and profit under section772(d) of the Act.

In the home market Lafarge claimedtwo customer groups: end-users anddistributors. We reviewed the sales


functions between these two types ofcustomers in the home market. Therewere no significant distinctions in theselling functions performed for end-users and distributors in the homemarket. The distribution systems,pricing policies, inventory maintenance,sales order processing, and salesagreements were very similar withincustomer groups in each market. Weconcluded, therefore, that Lafarge’shome market sales were made at thesame level of trade because theaggregate selling functions performedwithin each channel of distributionwere essentially identical.

We then examined the level of tradeof the CEP sale in the U.S. market (i.e.,the level of trade for sales from LFI toLCA). We determined that the sellingfunctions of the level of trade of thehome market sales were sufficientlydifferent from the level of trade ofLafarge’s CEP sales to establish adifferent level of trade. For example, thelevel of trade of the CEP sale did notinvolve extensive technical assistance,product liability, credit insurance,inventory maintenance, and salesadministration costs. Since the samelevel of trade as that of the CEP did notexist in the home market, we could notmatch U.S. sales to home market salesat the same level of trade, nor could wedetermine whether there was a patternof consistent price differences between

the levels of trade, in accordance withsection 773(a)(7)(A) of the Act, based onLafarge’s home market sales ofmerchandise under review. However,the SAA states that ‘‘if information onthe same product and company is notavailable, the adjustment may also bebased on sales of other products by thesame company. In the absence of anysales, including those in recent timeperiods, to different levels of trade bythe exporter or producer underinvestigation, Commerce may furtherconsider the selling experience of otherproducers in the foreign market for thesame product or other products.’’ SAAat 830. Accordingly, we examined thealternative methods for calculating alevel-of-trade adjustment. In this review,we did not have information that wouldallow us to apply these alternativemethods.

Because the data available do notprovide an appropriate basis for makinga level-of-trade adjustment, but the levelof trade in the home market is at a moreadvanced stage than the level of trade ofthe CEP sales, a CEP offset isappropriate, in accordance with section773(a)(7)(B) of the Act. We alsodetermined NV at the same level oftrade as the starting price for the CEPand made a CEP offset adjustment. Wededucted from NV the general andadministrative overhead expenses andinventory carrying costs reported by

Lafarge as home market indirect sellingexpenses. We limited the home marketindirect selling expense deduction bythe amount of indirect selling expensesincurred in the United States asdetermined under section 772(d)(1)(A).

D. Price to Price Comparisons

Pursuant to section 777(A)(d)(2) of theAct, we compared the CEPs ofindividual transactions to the monthlyweighted-average price of sales of theforeign like product.

We based NV on the price at whichthe foreign like product is sold forconsumption in the exporting country tothe first unaffiliated party, in the usualcommercial quantities and in theordinary course of trade in accordancewith sections 773(a)(1)(B)(i) and773(a)(5) of the Act. Where appropriate,we deducted loading expenses, inlandfreight, credit, credit insurance, travelexpenses incurred by technicians,product liability insurance, andpacking. Prices were reported net ofvalue-added taxes (VAT) and, therefore,no adjustment for VAT was necessary.No other adjustments were claimed orallowed.

Preliminary Results of Review

As a result of this review, wepreliminarily determine that thefollowing weighted-average dumpingmargin exists:

Manufacturer/exporter Period of review Margin(percent)

Lafarge Fondu Inter’l. Inc. ................................................................................................................................ 06/15/94–05/31/95 16.15All Others ......................................................................................................................................................... 06/15/94–05/31/95 37.93

Parties to the proceeding may requestdisclosure within five days of the dateof publication of this notice. Anyinterested party may request a hearingwithin 10 days of publication. Anyhearing, if requested, will be held 44days after the date of publication, or thefirst workday thereafter. Interestedparties may submit case briefs within 30days of the date of publication of thisnotice. Rebuttal briefs and rebuttals towritten comments, limited to issuesraised in the case briefs and comments,may be filed not later than 37 days afterthe date of publication. Parties whosubmit arguments in this proceeding arerequested to submit with the argument(1) a statement of the issue and (2) abrief summary of the argument. TheDepartment will issue the final resultsof this administrative review, includingthe results of its analysis of issues raisedin any such written comments.

The Department shall determine, andCustoms shall assess, antidumpingduties on all appropriate entries.Individual differences between CEP andNV may vary from the percentage statedabove. The Department will issueappraisement instructions directly toCustoms. The final results of this reviewshall be the basis for the assessment ofantidumping duties on entries ofmerchandise covered by thedetermination and for future deposits ofestimated duties.

Furthermore, the following depositrequirements will be effective upon thepublication of the final results of thisadministrative review for all shipmentsof CA flux from France entered, orwithdrawn from warehouse, forconsumption on or after the publicationdate of the final results of thisadministrative review, as provided bysection 751(a)(2)(C) of the Act: (1) Thecash deposit rate for Lafarge will be the

rate established in the final results ofthis administrative review; (2) formerchandise exported by manufacturersor exporters not covered in thesereviews but covered in the originalLTFV investigation or a previousreview, the cash deposit will continueto be the most recent rate published inthe final determination or final resultsfor which the manufacturer or exporterreceived a company-specific rate; (3) ifthe exporter is not a firm covered in thisreview, or the original less-than-fair-value investigation, but themanufacturer is, the cash deposit ratewill be the rate established for the mostrecent period for the manufacturer ofthe merchandise; and (4) for all otherproducers and/or exporters of thismerchandise, the cash deposit rate willbe 37.93 percent, the rate established inthe less-than-fair value investigation (59FR 5994, February 9, 1994).


This notice also serves as apreliminary reminder to importers oftheir responsibility under 19 CFR353.26 to file a certificate regarding thereimbursement of antidumping dutiesprior to liquidation of the relevantentries during this review period.Failure to comply with this requirementcould result in the Secretary’spresumption that reimbursement ofantidumping duties occurred and thesubsequent assessment of doubleantidumping duties.

This administrative review and noticeare in accordance with section 751(a)(1)of the Act (19 U.S.C. 1675(a)(1)) and 19CFR 353.22.

Dated: July 26, 1996.Robert. L. LaRussa,Acting Assistant Secretary for ImportAdministration.[FR Doc. 96–19726 Filed 8–1–96; 8:45 am]BILLING CODE 3510–DS–P


International Trade Administration

[A–602–803]

Certain Corrosion-Resistant CarbonSteel Flat Products From Australia:Amendment to Final Results ofAntidumping Duty AdministrativeReview

AGENCY: Import Administration,International Trade Administration,Department of Commerce.ACTION: Notice of Amendment to FinalResults of Antidumping DutyAdministrative Review.

SUMMARY: On March 29, 1996, theDepartment of Commerce published thefinal results of its administrative reviewof the antidumping duty order oncertain corrosion-resistant carbon steelflat products from Australia. The reviewcovered one manufacturer/exporter andthe period February 4, 1993, throughJuly 31, 1994. Based on the correctionof a ministerial error, we are amendingthe final results.EFFECTIVE DATE: August 2, 1996.FOR FURTHER INFORMATION CONTACT:Robert Bolling or Jean Kemp, Office ofAgreements Compliance, InternationalTrade Administration, U.S. Departmentof Commerce, Washington, DC 20230;telephone (202) 482–3793.


Background

On March 29, 1996, the Department ofCommerce (the Department) publishedin the Federal Register the final results

of its administrative review of theantidumping duty order on certaincorrosion-resistant carbon steel flatproducts from Australia (61 FR 14049).The review covered one manufacturer/exporter, The Broken Hill ProprietaryCompany Ltd. (BHP), and the periodFebruary 4, 1993, through July 31, 1994.

After publication of our final results,we received a timely allegation fromrespondent that the Department hadmade ministerial errors in calculatingthe final results for corrosion-resistantsteel from Australia. The petitioners(Bethlehem Steel Corporation, U.S. SteelCompany, a Unit of USX Corporation,Inland Steel Industries, Inc., GenevaSteel, Gulf States Steel Inc. of Alabama,Sharon Steel Corporation, and LukensSteel Company) filed a timely rebuttal torespondent’s ministerial errorallegation.

BHP alleges that the Departmentincorrectly applied a BIA credit rate forcertain sales by BHP Steel BuildingProducts USA (Building Products). BHPagrees that for sales in whichrespondent did not report paymentdates it was appropriate for theDepartment to use a BIA rate for creditexpenses. However, BHP states that inapplying the BIA rate to all sales wherethe credit expense equaled zero, theDepartment applied the punitive rate toa certain number of sales for which apayment date was in fact reported.Petitioners argue that in correcting itsprogram in response to BHP’s allegation,the Department should ensure that BIAwill only be applied to those saleswhich had missing payment andshipment dates. We agree withrespondents that we incorrectly applieda BIA credit rate on certain sales byBuilding Products in which paymentdates had been submitted. We also agreewith petitioners’ rebuttal that theDepartment must continue to apply BIAto those sales in which payment andshipment dates were not reported.Therefore, we have recalculated creditcosts using BIA only for those saleswhere payment and shipment dateswere inaccurately reported.

In addition, respondent alleges thatthe Department incorrectly used boththe average foreign manufacturing costand average profit as derived fromCoated Steel Corp. (Coated) to calculatea surrogate further manufacturing costfor BHP Trading, Inc. (Trading). BHPstated that once Coated’s average foreignmanufacturing figure was derived in theDepartment’s calculation of furthermanufacturing costs for Trading, anactual profit could have been calculatedusing Trading’s data, and using asurrogate profit from Coating wasunnecessary. Petitioners argue the

Department made a reasonable andcorrect decision to apply BIA (i.e.,surrogate amounts for average foreignmanufacturing cost and average profit)to certain of Trading’s sales becauserespondent failed to provide theDepartment with the necessaryinformation for calculating furthermanufacturing cost and profit for thesesales. Petitioners state that theDepartment was correct to rely onCoated’s further manufacturing cost andprofit in calculating the same forTrading and that this is not a ministerialerror as defined in 19 CFR section353.28(d) as ‘‘an error in addition,subtraction, or other arithmeticfunction, clerical error resulting frominaccurate copying, duplication, or thelike, and any other type of unintentionalerror which the Secretary considersministerial.’’

The determination to calculate asurrogate profit on Trading’s furthermanufactured sales of subjectmerchandise by relying on the averageprofit of Coating’s sales of the samemerchandise was intentional. TheDepartment determined that sinceTrading had not submitted its cost ofmanufacturing and actual profit for eachof these sales, calculating an averageprofit, then applied to each sale at issue,was an appropriate methodology,regardless of whether Trading made aprofit on every sale. Respondent iscorrect in stating that the Departmentcould have constructed Trading’s actualprofit on every sale in which Tradinghad a profit because the Departmentcould have derived Trading’s actualprofit by using Coating’s surrogateforeign manufacturing costs andTrading’s’s gross unit price. However,the Department rejected thismethodology as inappropriate under thecircumstances. Therefore, using asurrogate profit was not a ministerialerror and the Department will notamend its final results.

Amended Final Results of ReviewAs a result of our correction of the

ministerial error, we have determinedthe following margin exists for theperiod February 4, 1993, through July31, 1994:

Manufacturer/exporter Margin (per-cent)

BHP ........................................... 39.05

The Department shall determine, andthe U.S. Customs Service shall assess,antidumping duties on all appropriateentries. The Department shall issueappraisement instructions directly tothe Customs Service. Furthermore, the


following deposit requirements shall beeffective, upon publication of this noticeof amended final results ofadministrative review, for all shipmentsof the subject merchandise fromAustralia that are entered, or withdrawnfrom warehouse, for consumption on orafter the publication date, as providedfor by section 751(a)(1) of the Tariff Act:(1) The cash deposit rate for BHP willbe the rate established above; (2) forpreviously investigated companies notlisted above, the cash deposit rate willcontinue to be the company-specific ratepublished for the most recent period; (3)if the exporter is not a firm covered inthis review, or the original investigation,but the manufacturer is, the cashdeposit rate will be the rate establishedfor the most recent period for themanufacturer of the merchandise; and(4) the cash deposit rate for all othermanufacturers or exporters willcontinue to be 24.96 percent, the allothers rate established in the finalresults of the less than fair valueinvestigation (58 FR 44161, August 19,1993).

The deposit requirements, whenimposed, shall remain in effect untilpublication of the final results of thenext administrative review.

This notice serves as a final reminderto importers of their responsibilityunder 19 CFR 353.26 to file a certificateregarding the reimbursement ofantidumping duties prior to liquidationof the relevant entries during thisreview period. Failure to comply withthis requirement could result in theSecretary’s presumption thatreimbursement of antidumping dutiesoccurred and the subsequent assessmentof double antidumping duties.

This notice serves as the onlyreminder to parties subject toadministrative protective order (APO) oftheir responsibility concerning thedisposition of proprietary informationdisclosed under APO in accordancewith section 353.34(d) of theDepartment’s regulations. Timelywritten notification of return/destruction of APO materials orconversion to judicial protective order ishereby requested. Failure to complywith the regulation and the terms of anAPO is a sanctionable violation.

This notice is published inaccordance with section 751 of theTariff Act of 1930, as amended and 19CFR 353.28(c).

Dated: July 29, 1996.Robert S. LaRussa,Acting Assistant Secretary for ImportAdministration.[FR Doc. 96–19728 Filed 8–1–96; 8:45 am]BILLING CODE 3510–DS–P

[A–588–703]

Certain Internal-Combustion IndustrialForklift Trucks From Japan PreliminaryResults of Antidumping DutyAdministrative Review

AGENCY: Import Administration,International Trade Administration,Department of Commerce.

ACTION: Notice of preliminary results ofAntidumping Duty AdministrativeReview.

SUMMARY: In response to a request by aninterested party, the Department ofCommerce (the Department) isconducting an administrative review ofthe antidumping duty order on certaininternal-combustion industrial forklifttrucks from Japan. The review covers 3manufacturers/exporters. The period ofreview (the POR) is June 1, 1994,through May 31, 1995.

We have preliminarily determinedthat sales have been made below normalvalue (NV) by one of the companiessubject to this review. If thesepreliminary results are adopted in ourfinal results of this administrativereview, we will instruct U.S. Customs toassess antidumping duties equal to thedifference between the constructedexport price (CEP) and NV.

We invite interested parties tocomment on these preliminary results.Parties who submit comments in thisproceeding are requested to submit witheach argument (1) a statement of theissue and (2) a brief summary of theargument.

EFFECTIVE DATE: August 2, 1996.

FOR FURTHER INFORMATION CONTACT: Forfurther information, please contactThomas O. Barlow, Davina Hashmi orKris Campbell at Import Administration,International Trade Administration,U.S. Department of Commerce,Washington, D.C. 20230; telephone:(202) 482–4733.


The Applicable Statute

Unless otherwise indicated, allcitations to the Tariff Act of 1930, asamended (the Act), are references to theprovisions effective January 1, 1995, theeffective date of the amendments madeto the Act by the Uruguay RoundAgreements Act (URAA). In addition,unless otherwise indicated, all citationsto the Department’s regulations are tothe current regulations, as amended bythe interim regulations published in theFederal Register on May 11, 1995 (60FR 25130).

Background

On June 7, 1988, the Departmentpublished in the Federal Register (53FR 20882) the antidumping duty orderon certain internal-combustion,industrial forklift trucks from Japan. OnAugust 16, 1995, we initiated anadministrative review of this order forthe period June 1, 1994 through May 31,1995 (60 FR 42500). On March 14, 1996,we extended the time limits forpreliminary and final results for thisadministrative review since wedetermined that it was not practicable tocomplete the review within the timelimits mandated by the Act (61 FR10562). The Department is conductingthis administrative review inaccordance with section 751 of the Act.

Scope of Review

The products covered by this revieware certain internal-combustion,industrial forklift trucks, with liftingcapacity of 2,000 to 15,000 pounds. Theproducts covered by this review arefurther described as follows: Assembled,not assembled, and less than complete,finished and not finished, operator-riding forklift trucks powered bygasoline, propane, or diesel fuelinternal-combustion engines of off-the-highway types used in factories,warehouses, or transportation terminalsfor short-distance transport, towing, orhandling of articles. Less than completeforklift trucks are defined as importswhich include a frame by itself or aframe assembled with one or morecomponent parts. Component parts ofthe subject forklift trucks which are notassembled with a frame are not coveredby this order.

Imports of these products areclassified under the followingHarmonized Tariff Schedules (HTS)subheadings: 8427.20.00, 8427.90.00,and 8431.20.00. The HTS item numbersare provided for convenience andCustoms purposes. The writtendescriptions remain dispositive.

This review covers the followingfirms: Toyota Motor Corporation (TMC),Nissan Motor Company (Nissan), andToyo Umpanki Company, Ltd (Toyo).

Verification

As provided in section 782(i) of theAct, we verified information providedby TMC using standard verificationprocedures, including on-site inspectionof TMC’s sales facility, the examinationof relevant sales and financial records,and original documentation containingrelevant information. Our verificationresults are outlined in the publicversion of the verification report.


No Shipments

Nissan and Toyo reported noshipments or sales subject to this reviewand the Department has preliminarilyconfirmed these facts with the U.S.Customs Service. Based on theinformation on the record, theDepartment has preliminarilydetermined that Nissan and Toyo hadno shipments to the United Statesduring the POR.

Constructed Export Price

The Department based its margincalculation on CEP as defined in section772(b) of the Act because the subjectmerchandise was first sold in the UnitedStates to a person not affiliated withTMC after importation by a selleraffiliated with TMC.

We calculated CEP based on thepacked, f.o.b. or delivered price tounaffiliated purchasers in the UnitedStates (the starting price). We madedeductions for any movement expensesin accordance with section 772(c)(2)(A)of the Act.

In accordance with section 772(d)(1)of the Act and the Uruguay RoundAgreements Act Statement ofAdministrative Action (SAA) (at 823–824), we made additional adjustments tothe starting price by deducting sellingexpenses associated with economicactivities occurring in the United States,including commissions, direct sellingexpenses (including direct advertisingincurred by TMC in Japan), expensesassumed on behalf of the buyer and U.S.indirect selling expenses. Whereappropriate, in accordance with section772(d)(2) of the Act, we also deductedthe cost of any further manufacture orassembly. Finally, we made anadjustment for an amount of profitallocated to these expenses inaccordance with section 772(d)(3) of theAct.

With respect to subject merchandiseto which value was added in the UnitedStates prior to sale to unaffiliated U.S.customers, e.g., ‘‘swapping’’ of forks,masts, etc., and installation of certainaccessories by a U.S. affiliate of TMC,we determined that the special rule formerchandise with value added afterimportation under section 772(e) of theAct did not apply because the valueadded in the United States by theaffiliated person did not exceedsubstantially the value of the subjectmerchandise. Therefore, for subjectmerchandise further manufacturered inthe United States, we used the startingprice of the subject merchandise anddeducted the further manufacturing todetermine the CEP for suchmerchandise.

Normal ValueBecause the aggregate quantity of the

foreign like product sold in the homemarket was more than 5% of theaggregate quantity of sales of the subjectmerchandise to the U.S., in accordancewith sections 773(a)(1) (c) and(a)(1)(B)(i) of the Act, we based NV onthe prices at which the foreign likeproducts were first sold forconsumption in the exporting country.

We treated sales to affiliates as madeat arm’s length and therefore used themin our NV calculations, as wedetermined that the prices to bothaffiliated and unaffiliated customerswere based exclusively on a publishedprice-list.

Based on an allegation of sales belowthe cost of production (COP), theDepartment had reasonable grounds tobelieve or suspect that sales of theforeign product under consideration forthe determination of NV in this reviewmay have been made at prices below theCOP as provided by section773(b)(2)(A)(i) of the Act. Therefore,pursuant to section 773(b)(1) of the Act,we initiated a COP investigation of salesby TMC in the home market.

In accordance with section 773(b)(3)of the Act, we calculated the COP, ona model-specific basis, based on the sumof the costs of materials and fabricationemployed in producing the foreign likeproduct plus selling, general andadministrative (SG&A) expenses and allcosts and expenses incidental to placingthe foreign like product in conditionpacked ready for shipment. In our COPanalysis, we used the home market salesand COP information provided by TMCin its questionnaire and supplementalresponses.

After calculating COP, we testedwhether home market sales of theforeign like product were made at pricesbelow COP within an extended periodof time in substantial quantities andwhether such prices permitted therecovery of all costs within a reasonableperiod of time. We compared model-specific COPs to the reported homemarket prices less any applicableadjustments.

Pursuant to section 773(b)(2)(C) of theAct, where less than 20 percent of therespondent’s sales of a given modelwere at prices less than COP, we did notdisregard any below-cost sales of thatmodel because the below-cost saleswere not made in substantial quantities.Where 20 percent or more of therespondent’s sales of a given modelwere at prices less than the COP, wedisregarded the below-cost sales if they(1) were made within an extendedperiod of time in substantial quantities

in accordance with sections 773(b)(2)(B) and (C) of the Act, and (2) based oncomparisons of prices to weighted-average COPs for the POR, were atprices which would not permit recoveryof all costs within a reasonable periodof time in accordance with section773(b)(2)(D) of the Act. Based on thistest, we disregarded below-cost saleswith respect to TMC.

We calculated NV using sales of theforeign like product in the home market.Where the Department could not matchto identical merchandise in the homemarket, the Department matched tosimilar merchandise based on loadcapacity and six matching criteria, eachassigned specific weight factors whichreflected the criterion’s relativeimportance. For a more detaileddescription of the product-matchingcriteria see Appendix III, Department’sSales Questionnaire, July 31, 1995.

Home market prices were based onex-factory or delivered prices topurchasers in the home market. Whereapplicable, we made adjustments forpacking and for movement expenses inaccordance with sections 773(a)(6) (A)and (B) of the Act. We also madeadjustments for differences in costattributable to differences in physicalcharacteristics of the merchandisepursuant to section 773(a)(6)(C)(ii) ofthe Act and for differences incircumstances of sale (COS) inaccordance with section 773(a)(6)(C)(iii)of the Act and 19 C.F.R. 353.56. Wemade COS adjustments by deductinghome market discounts and rebates andwarranty expenses. Based on the resultsof verification, we are disallowingTMC’s reported home market directadvertising expense and we areadjusting TMC’s home marketREBATE2H downward. We added to NVrevenue earned on home market sales,including revenue from transportationinsurance received by a TMC affiliateand for interest revenue. Based on theresults of verification, we are usinginterest revenue earned on U.S. sales asfacts otherwise available for homemarket interest revenue. We also madeadjustments, where applicable, forcertain home market indirect sellingexpenses to offset U.S. commissions andU.S. indirect selling expenses in CEPcalculations. Because we preliminarilydetermined that TMC’s sales to thehome market which are used toestablish normal value were at a level oftrade which constitutes a moreadvanced stage of distribution than thelevel of trade of the CEP, and becausethe data available do not permit anappropriate basis to determine a level-of-trade adjustment pursuant to section773(a)(7)(A)(ii) of the Act, we allowed a


CEP ‘‘offset’’ pursuant to section773(a)(7)(B) of the Act (see Level ofTrade, below). This offset was permittedonly with respect to those claimed homemarket indirect selling expenses that wewere able to verify. Based on the resultsof verification, we are disallowingreported home market indirectadvertising and sales promotionexpenses, TMC’s wage and salaryexpense and TMC’s general &administrative (G&A) expenses.

In accordance with section 773(a)(4)of the Act, we used CV as the basis forNV when there were no usable sales ofcomparable merchandise in the homemarket. We calculated CV in accordancewith section 773(e) of the Act. Weincluded the cost of materials andfabrication, SG&A expenses, and profit.In accordance with section 773(e)(2)(A)of the Act, we based SG&A expensesand profit on the amounts incurred andrealized by TMC in connection with theproduction and sale of the foreign likeproduct in the ordinary course of tradefor consumption in the foreign country.For selling expenses, we used theweighted-average home market sellingexpenses. We included U.S. packingpursuant to section 773(e)(3) of the Act.Where appropriate, we madeadjustments to CV in accordance withsection 773(a)(8) of the Act and 19 CFR353.56 for COS differences and level-of-trade differences. We made COSadjustments by deducting home marketdirect selling expenses. We also madeadjustments, where applicable, forcertain home market indirect sellingexpenses to offset U.S. commissions.Since CV was calculated at a moreadvanced level of trade than the level oftrade of the CEP, we made an adjusmentin accordance with sections 773(a)(7)and (a)(8) of the Act, i.e., the CEP offset.See Level of Trade, below.

Level of TradeAs set forth in section 773(a)(1)(B)(i)

of the Act and in the SAAaccompanying the URAA at 829–831, tothe extent practicable, the Departmentwill calculate NV based on sales at thesame level of trade as the U.S. sales.When the Department is unable to findsales of the foreign like product in thecomparison market at the same level oftrade as the U.S. sale, the Departmentmay compare the U.S. sale to sales at adifferent level of trade in thecomparison market.

In accordance with section773(a)(7)(A) of the Act, if sales atallegedly different levels of trade arecompared, the Department will adjustthe NV to account for the difference inlevel of trade if two conditions are met.First, there must be differences between

the actual selling activities performedby the exporter at the level of trade ofthe U.S. sale and the level of trade of thecomparison market sales used todetermine NV. Second, the differencesmust affect price comparability asevidenced by a pattern of consistentprice differences between sales at thedifferent levels of trade in the market inwhich NV is determined.

When CEP is applicable, section773(a)(7)(B) of the Act establishes that aCEP ‘‘offset’’ may be made when twoconditions exist: (1) NV is established ata level of trade which constitutes a moreadvanced stage of distribution than thelevel of trade of the CEP; and (2) thedata available do not provide anappropriate basis for a level-of-tradeadjustment.

In implementing these principles inthis review, we obtained informationabout the selling activities performed byTMC for each channel of distributionand asked TMC to establish claimedlevels of trade based on these sellingactivities. TMC claimed that the level oftrade of the CEP was different than thelevel of trade of its home market sales.TMC claimed one level of trade and onechannel of distribution with regard to itssales to its U.S. affiliate, Toyota MotorSales U.S.A., Inc. (TMS). For its homemarket, TMC claimed only one channelof distribution, from TMC to dealers,which it claimed to be at a moreadvanced stage of distribution than thelevel of trade of the CEP (i.e., the salesfrom TMC to TMS) based on the sellingfunctions performed for the particularmarkets.

In order to determine whether theCEP and the home market sales were atdifferent levels of trade, we reviewedthe selling activities associated with theCEP and those associated with homemarket sales. For CEP sales, weconsidered only the selling activitiesreflected in the price after the deductionof expenses and profit under section772(d) of the Act. Whenever sales weremade by or through an affiliatedcompany as agent, we considered allselling activities of both affiliatedparties, except for those sellingactivities related to the expensesdeducted under section 772(d) of theAct in CEP situations.

In this review, we determined that theselling functions performed by TMC forthe home market were dissimilar tothose performed by TMC for CEP sales,and that TMC’s home market level oftrade constituted a more advanced stageof distribution than the level of trade ofthe CEP. For further discussion seeAnalysis Memorandum to File, July 26,1996.

Further, we examined whether alevel-of-trade adjustment wasappropriate. In this review, the samelevel of trade as that of the CEP did notexist in the home market as TMC’shome market sales were made at a moreadvanced stage of distribution than itsCEP sales. We could not determinewhether there was a pattern ofconsistent price differences between thelevels of trade, in accordance withsection 773(a)(7)(A) of the Act, based onTMC’s home market sales ofmerchandise under review becauseTMC had only one level of trade in thehome market and such data did notexist. However, the SAA states that, ‘‘ifinformation on the same product andcompany is not available, theadjustment may also be based on salesof other products by the same company.In the absence of any sales, includingthose in recent time periods, to differentlevels of trade by the exporter orproducer under investigation,Commerce may further consider theselling experience of other producers inthe foreign market for the same productor other products.’’ SAA at 830.Accordingly, we examined thealternative methods for calculating alevel-of-trade adjustment. In this review,we did not have information that wouldallow us to apply these alternativemethods. Therefore, for TMC, inaccordance with section 773(a)(7)(B) ofthe Act, because we determined thatTMC’s home market sales upon whichwe established NV were at a level oftrade which constituted a moreadvanced stage of distribution than thelevel of the CEP, but no data wereavailable to adjust for differences inlevel of trade, we made a CEP offset toNV.

Fair Value ComparisonsTo determine whether sales of forklift

trucks to the United States were madeat less than fair value, we compared theCEP to the NV, as described in the‘‘Constructed Export Price’’ and‘‘Normal Value’’ sections of this notice.In accordance with section 777A(d)(2),we calculated monthly weighted-average prices for NV and comparedthese to individual U.S. transactions.

Preliminary Results of ReviewAs a result of our review, we

preliminarily determine the weighted-average dumping margins (in percent)for the period June 1, 1994, through May31, 1995 to be as follows:

Manufacturer/exporter Margin(percent)

TMC .......................................... 41.29


Manufacturer/exporter Margin(percent)

Nissan ....................................... 1 7.36Toyo .......................................... 1 4.48

1 No shipments or sales subject to this re-view. Rate is from the last relevant segment ofthe proceeding in which the firm had ship-ments/sales.

Parties to this proceeding may requestdisclosure within 5 days of the date ofpublication of this notice. Anyinterested party may request a hearingwithin 10 days of the date of publicationof this notice. A hearing, if requested,will be held 44 days from the date ofpublication of this notice at the mainCommerce Department building.

Issues raised in hearings will belimited to those raised in the respectivecase briefs and rebuttal briefs. Casebriefs from interested parties are duewithin 30 days of publication of thisnotice. Rebuttal briefs, limited to theissues raised in the respective casebriefs, may be submitted not later than37 days of publication of this notice.Parties who submit case briefs orrebuttal briefs in this proceeding arerequested to submit with each argument(1) a statement of the issue and (2) abrief summary of the argument.TheDepartment will subsequently publishthe final results of this administrativereview, including the results of itsanalysis of issues raised in any suchwritten briefs or hearing. TheDepartment will issue final results ofthis review within 180 days ofpublication of these preliminary results.

The Department shall determine, andthe U.S. Customs Service shall assess,antidumping duties on all appropriateentries. Because the inability to linksales with specific entries preventscalculation of duties on an entry-by-entry basis, we have calculated animporter-specific ad valorem dutyassessment rate for the merchandisebased on the ratio of the total amount ofantidumping duties calculated for theexamined sales made during the POR tothe total customs value of the sales usedto calculate those duties. This rate willbe assessed uniformly on all entries ofthat particular importer made during thePOR. (This is equivalent to dividing thetotal amount of antidumping duties,which are calculated by taking thedifference between statutory NV andstatutory CEP, by the total statutory CEPvalue of the sales compared, andadjusting the result by the averagedifference between CEP and customsvalue for all merchandise examinedduring the POR.) The Department willissue appropriate appraisementinstructions directly to the CustomsService upon completion of this review.

Furthermore, the following depositrequirements will be effective for allshipments of the subject merchandiseentered, or withdrawn from warehouse,for consumption on or after thepublication date of the final results ofthis administrative review, as providedby section 751(a)(1) of the Act: (1) Thecash deposit rates for the reviewedcompanies will be those ratesestablished in the final results of thisreview; (2) for previously reviewed orinvestigated companies not listed above,the cash deposit rate will continue to bethe company-specific rate published forthe most recent period; (3) if theexporter is not a firm covered in thisreview, a prior review, or the originalless than fair value (LTFV)investigation, but the manufacturer is,the cash deposit rate will be the rateestablished for the most recent periodfor the manufacturer of themerchandise; and (4) the cash depositrate for all other manufacturers orexporters will be 39.45 percent, the ‘‘AllOthers’’ rate made effective by the finaldetermination of sales at LTFV, asexplained below.

On May 25, 1993, the Court ofInternational Trade (CIT) in FloralTrade Council v. United States, 822F.Supp. 766 (CIT 1993), and Federal-Mogul Corporation and The TorringtonCompany v. United States, 822 F.Supp.782 (CIT 1993), decided that once an‘‘All Others’’ rate is established for acompany it can only be changedthrough an administrative review. TheDepartment has determined that, inorder to implement these decisions, it isappropriate to reinstate the ‘‘All Others’’rate from the LTFV investigation (or thatrate as amended for correction ofclerical errors or as a result of litigation)in proceedings governed byantidumping duty orders. Therefore, theDepartment is reinstating the ‘‘AllOthers’’ rate made effective by the finaldetermination of sales at LTFV (seeAntidumping Duty Order andAmendment to Final Determination ofSales at Less Than Fair Value; CertainInternal-Combustion, Industrial ForkliftTrucks From Japan (53 FR 20882 (June7, 1988)).

These deposit requirements, whenimposed, shall remain in effect untilpublication of the final results of thenext administrative review.

This notice also serves as apreliminary reminder to importers oftheir responsibility under 19 CFR353.26 to file a certificate regarding thereimbursement of antidumping dutiesprior to liquidation of the relevantentries during this review period.Failure to comply with this requirementcould result in the Secretary’s

presumption that reimbursement ofantidumping duties occurred and thesubsequent assessment of doubleantidumping duties.

This administrative review and noticeare in accordance with section 751(a)(1)of the Act and 19 CFR 353.22(c)(5).

Dated: July 26, 1996.Robert S. LaRussa,Acting Assistant Secretary, for ImportAdministration.[FR Doc. 96–19725 Filed 8–01–96; 8:45 am]BILLING CODE 3510–DS–P

[A–427–030]

Large Power Transformers FromFrance; Final Results of AntidumpingAdministrative Review

AGENCY: Import Administration,International Trade Administration,Department of Commerce.ACTION: Notice of final results ofantidumping duty administrativereview; Large power transformers fromFrance.

SUMMARY: On April 8, 1996, theDepartment of Commerce (theDepartment) published the preliminaryresults of its administrative review ofthe antidumping finding on large powertransformers (LPTs) from France. Thereview covers one manufacturer/exporter and the period June 1, 1994through May 31, 1995.

We gave interested parties anopportunity to comment on ourpreliminary results. Based on ouranalysis of the comments received, wehave changed the results from thosepresented in the preliminary results ofreview.EFFECTIVE DATE: August 2, 1996.FOR FURTHER INFORMATION CONTACT:Elisabeth Urfer or Maureen Flannery,Import Administration, InternationalTrade Administration, U.S. Departmentof Commerce, 14th Street andConstitution Avenue, N.W.,Washington, D.C. 20230; telephone:(202) 482–4733.

Applicable StatuteUnless otherwise indicated, all

citations to the statute are references tothe provisions effective January 1, 1995,the effective date of the amendmentsmade to the Tariff Act of 1930 (the Act)by the Uruguay Round Agreements Act(URAA). In addition, unless otherwiseindicated, all citations to theDepartment’s regulations are to thecurrent regulations, as amended by theinterim regulations published in theFederal Register on May 11, 1995 (60FR 25130).



BackgroundThe Treasury Department published

in the Federal Register an antidumpingfinding on LPTs from France on June 14,1972 (37 FR 11772). On June 6, 1995, wepublished in the Federal Register (60FR 29821) a notice of opportunity torequest an administrative review of theantidumping finding on LPTs fromFrance covering the period June 1, 1994through May 31, 1995.

In accordance with 19 CFR 353.22(a),Jeumont Schneider Transformateurs(JST) requested that we conduct anadministrative review of its sales. Wepublished a notice of initiation of thisantidumping duty administrative reviewon July 14, 1995 (60 FR 36260).

On April 8, 1996, the Departmentpublished the preliminary results in theFederal Register (61 FR 15461). TheDepartment has now completed thereview in accordance with section 751of the Act.

Scope of the ReviewImports covered by the review are

shipments of LPTs; that is, all types oftransformers rated 10,000 kVA (kilovolt-amperes) or above, by whatever namedesignated, used in the generation,transmission, distribution, andutilization of electric power. The term‘‘transformers’’ includes, but is notlimited to, shunt reactors,autotransformers, rectifier transformers,and power rectifier transformers. Notincluded are combination units,commonly known as rectiformers, if theentire integrated assembly is importedin the same shipment and entered onthe same entry and the assembly hasbeen ordered and invoiced as a unit,without a separate price for thetransformer portion of the assembly.This merchandise is currentlyclassifiable under the Harmonized TariffSchedule (HTS) item numbers8504.22.00, 8504.23.00, 8504.34.33,8504.40.00, and 8504.50.00. The HTSitem numbers are provided forconvenience and Customs purposes.The written description remainsdispositive.

This review covers one manufacturer/exporter of transformers, JST, and theperiod June 1, 1994, through May 31,1995.

Analysis of the Comments ReceivedWe gave interested parties an

opportunity to comment on thepreliminary results of review. Wereceived comments from JST.

Comment 1: JST asserts that theDepartment should average its SG&Aand profit over a three-year period. JST

notes that the Department in itspreliminary results used JST’s actualSG&A expenses for sales of LPTs inFrance, but ignored the actual profitmargin associated with those sales. JSTargues that the decision to ignore JST’sactual profit was apparently the result ofthe Department’s conclusion that JST’shome market sales were not in thenormal course of trade. JST notes thatthe URAA amended Section 773(e) ofthe Act to instruct the Department toinclude in its constructed valuecalculation the actual SG&A and profitrealized by a foreign producer.

JST argues that, at the very least, theremust be symmetry in the Department’streatment of SG&A and profit, and thatthe ‘‘ordinary course of trade’’requirement of Section 773(e)(2)(A) ofthe statute applies to the derivation ofamounts for both profit and SG&Aexpense. JST argues that, where theDepartment concludes that it cannot useSG&A actually incurred, or profitsactually realized, by the producer ofexported merchandise on its reviewperiod sales in the home market, thestatute provides three alternativemethodologies for calculating the SG&Aand profit components of constructedvalue. JST contends that, given thisflexibility, there is no excuse for usingamounts for SG&A and profit that arenot reasonable approximations of JST’snormal experience.

JST notes that the first statutoryalternative is to calculate SG&A andprofit incurred by the producer on salesof merchandise of the same general typeas the exports in question. JST arguesthat there is no requirement that thesesales be ‘‘in the normal course of trade.’’JST also argues that this alternativewould not prevent the Department fromapplying JST’s actual profit realized onits home market sales of LPTs.

JST notes that the second statutoryalternative is the average SG&A andprofit for other producers of the foreignlike product. JST states that this optionis not available in this case, as it is theonly producer of LPTs subject to review.

JST argues that the third alternativegives the Department the latitude to relyon any other reasonable method,thereby allowing the Department tocalculate average amounts for SG&A andprofit from data on JST’s operations overa representative period. JST argues thataverage SG&A and profit from 1992–1994 are representative of JST’s profitand SG&A experience during the periodof review, are reasonable proxies forJST’s actual 1994 results, and fullysatisfy the requirements of theantidumping statute. JST cites to aDepartment memorandum from HollyA. Kuga, Director of the Office of

Antidumping Compliance, to Joseph A.Spetrini, Deputy Assistant Secretary forCompliance, dated March 29, 1996,‘‘Large Power Transformers fromFrance—Additional ProprietaryDiscussion of Profit for the PreliminaryResults of Review,’’ that discusses theprofit calculation. JST argues that theDepartment, in this memorandum,indicated that it had an interest inevaluating JST’s SG&A and profitexperience in ‘‘a historical context.’’

JST argues that, if the Departmentdoes not use SG&A and profit for the1992–1994 period, it should continue touse the profit figure used in thepreliminary results, which is the profitmargin calculated for JST’s parentcompany, Schneider S.A. JST states thatthis figure is reasonable insofar as (1)the source is a company that is relatedto JST, and (2) it is lower than theprofits that JST has reported on its homemarket sales in years in which itsdomestic sales were strong. However,JST also argues that use of this figure istroubling in two respects. JST states thatits operations are a minor factor in theconsolidated financials of SchneiderS.A. and that JST operatesindependently of Schneider S.A. Onbalance, though, JST concludes that themethodology used in the preliminaryanalysis is acceptable because itproduces a result that avoids the sort ofgross distortion that would be createdby the imputation of a high profitmargin to sales during a period ofdepressed demand.

Department’s Position: We agree withJST, in part. Section 773(e)(2)(B) setsforth three alternatives for computingprofit without establishing a hierarchyor preference among these alternativemethods. We did not have the necessarycost data for methods one (calculatingSG&A and profit incurred by theproducer on sales of merchandise of thesame general type as the exports inquestion) or two (averaging SG&A andprofit for other producers of the foreignlike product). The third alternative(section 773(e)(2)(B)(iii)) is any otherreasonable method, capped by theamount normally realized on sales inthe foreign country of the generalcategory of products. The Statement ofAdministrative Action (SAA) states that,if Commerce does not have the data todetermine amounts for profit underalternatives one and two or a profit capunder alternative three, it may applyalternative three on the basis of ‘‘thefacts available.’’ Accordingly, althoughwe did not have data to determine theprofit cap, for the preliminarydetermination we used an alternativemethod pursuant to section773(e)(2)(B)(iii) on the basis of facts


available. In the preliminarydetermination, we used a worldwideprofit amount calculated for JST’sparent company, Schneider S.A. andinvited comment on this issue.

Based on additional information nowon the record, we have determined thatthe most appropriate methodology forcalculating SG&A and profit in this caseis to use the three-year average homemarket profit submitted by JST. Theexpenses incurred, and the resultingprofit realized coincide with the periodduring which costs were incurred forthe production of the subjectmerchandise by JST. Furthermore, thismethodology relies on data specific toJST’s LPT production and sales.Therefore, for these final results wehave calculated SG&A and profit usingdata for the years 1992–1994.

Comment 2: JST argues that theDepartment improperly calculated netinterest expense by applying to JST’smanufacturing costs the ratio of interestexpense to the cost of manufacture thatappears in Schneider S.A.’s 1994income statement. JST argues thatSchneider S.A.’s interest expense was inno way related to JST’s production orsales of LPTs.

JST asserts that in the lastadministrative review of this finding,the same financing cost issue arose. JSTargues that the Department shouldfollow its own precedent in this reviewand rely on JST’s actual net interestexpense in calculating the constructedvalue for its review period exports. JSTargues that to do otherwise would be todisregard the emphasis placed on aproducers’ actual costs by the URAAand its accompanying SAA. JST quotesthe SAA at 834–835, which says:

Consistent with existing practice * * *Commerce normally will calculate cost onthe basis of the records kept by the exporteror producer of the merchandise, providedsuch costs are kept in accordance withgenerally accepted accounting principles* * * and reasonably reflect the costsassociated with the production and sale ofthe merchandise.

JST argues that Schneider S.A. did notfund JST’s operations through loans,equity infusions or any other means,and imputing a cost that does not existsimply because one company is relatedto the other violates the actual coststandard of the Agreement onImplementation of Article VI of theGeneral Agreements on Tariffs andTrade 1994 (1994 GATT agreement) andthe URAA.

Department’s Position: We disagreewith JST. It is our longstanding practiceto base interest expense on an amountderived from audited consolidatedfinancial statements and to calculate

interest as a percentage of cost. Forexample, see Certain Corrosion-Resistant Carbon Steel Flat ProductsFrom Korea: Final Results ofAntidumping Duty AdministrativeReview, 61 FR 18547 (April 26, 1996),and Certain Cut-To-Length Carbon SteelPlate From Finland: Final Results ofAntidumping Duty AdministrativeReview, 61 FR 2792 (January 29, 1996).

We also disagree with JST thatapplying Schneider S.A.’s interestexpense violates the actual coststandard of the 1994 GATT agreementand the URAA. Schneider S.A.’sownership interest in JST places theparent in a position to influence JST’sborrowing and lending as well as JST’soverall capital structure. There is noevidence on the record to indicate thatJST’s operations are independent ofSchneider S.A. to the extent that weshould ignore our normal practice ofimputing interest. (See memorandumfrom Elisabeth Urfer, Case Analyst, tothe File, ‘‘Large Power Transformersfrom France—Additional ProprietaryDiscussion of Net Interest Expense forthe Final Results of Review.’’)Therefore, for these final results wehave continued to apply SchneiderS.A.’s interest expense to cost ofmanufacture ratio to JST’smanufacturing costs to calculate JST’sinterest expense.

Comment 3: JST asserts that theDepartment miscalculated JST’s creditexpense on its review-period sale. JSTargues that the Department should haveused information submitted in JST’ssupplemental questionnaire responsethat showed that payment had beenreceived in two installments to JST,rather than based its calculation on theassumption of a single payment-in-fullafter a certain number of days fromshipment that was reported elsewherein JSTs questionnaire response. JSTstates that, with its supplementalquestionnaire response, it submittedbank advices showing payment thatestablish payment date and sales price.

Department’s Position: We agree withJST and have revised the creditcalculation accordingly. The bankadvices submitted with JST’ssupplemental questionnaire responsedemonstrate that payment was receivedas JST outlines above.

Final Results of Review

As a result of our review, wedetermine that the following weighted-average margin exists:

Manufacturer/exporter Period ofreview

Margin(per-cent)

Jeumont SchneiderTransformateurs .... 06/01/94–

05/31/950.00

The Department shall determine, andthe Customs Service shall assess,antidumping duties on all appropriateentries. Individual differences betweenexport price and normal value may varyfrom the percentage stated above. TheDepartment will issue appraisementinstructions on each exporter directly tothe Customs Service.

Furthermore, the following depositrequirements will be effective uponpublication of this notice of final resultsof review for all shipments of LPTs fromFrance entered, or withdrawn fromwarehouse, for consumption on or afterthe publication date, as provided bysection 751(a)(1) of the Act: (1) The cashdeposit rate for the reviewed companywill be the rate listed above; (2) forpreviously reviewed or investigatedcompanies not listed above, the cashdeposit rate will continue to be thecompany-specific rate published for themost recent period; (3) if the exporter isnot a firm covered in this review, a priorreview or the original less-than-fair-value investigation, but themanufacturer is, the cash deposit ratewill be the rate established for the mostrecent period for the manufacturer ofthe merchandise; and (4) for all otherproducers and/or exporters of thismerchandise, the cash deposit rate shallbe 24 percent, the rate established in thefirst notice of final results ofadministrative review published by theDepartment (47 FR 10268, March 10,1982). These deposit requirements shallremain in effect until publication of thefinal results of the next administrativereview.

This notice serves as a final reminderto importers of their responsibilityunder 19 CFR 353.26 to file a certificateregarding the reimbursement ofantidumping duties prior to liquidationof the relevant entries during thisreview period. Failure to comply withthis requirement could result in theSecretary’s presumption thatreimbursement of antidumping dutiesoccurred and subsequent assessment ofdouble antidumping duties.

Notification to Interested PartiesThis notice also serves as a reminder

to parties subject to administrativeprotective order (APO) of theirresponsibility concerning thedisposition of proprietary informationdisclosed under APO in accordance


with 19 CFR 353.34(d). Timely writtennotification of return/destruction ofAPO materials or conversion to judicialprotective order is hereby requested.Failure to comply with the regulationsand the terms of an APO is asanctionable violation.

This administrative review and noticeare in accordance with section 751(a)(1)of the Act (19 U.S.C. 1675(a)(1)) and 19CFR 353.22.

Dated: July 29, 1996.Robert S. LaRussa,Acting Assistant Secretary for ImportAdministration.[FR Doc. 96–19727 Filed 8–1–96; 8:45 am]BILLING CODE 3510–DS–P

[A–583–816]

Certain Stainless Steel Butt-Weld PipeFittings From Taiwan; Termination ofAntidumping Duty AdministrativeReview

AGENCY: Import Administration,International Trade Administration,Department of Commerce.ACTION: Notice of termination ofantidumping duty administrativereview.

SUMMARY: On July 14, 1995, theDepartment of Commerce (theDepartment) initiated an administrativereview of the antidumping duty orderon certain stainless steel butt-weld pipefittings (pipe fittings) from Taiwancovering the period June 1, 1994through May 31, 1995. We are nowterminating that review.EFFECTIVE DATE: August 2, 1996.FOR FURTHER INFORMATION CONTACT:Robert James or John Kugelman,Enforcement Group III, ImportAdministration, International TradeAdministration, U.S. Department ofCommerce, 14th and ConstitutionAvenue, N.W., Washington, D.C. 20230;telephone (202) 482–5222.


Background

On June 7, 1995, Ta Chen StainlessPipe, Ltd. (Ta Chen), a manufacturer ofmerchandise subject to this order,requested that the Department conductan administrative review of theantidumping duty order on pipe fittingsfrom Taiwan. The period of review isJune 1, 1994 through May 31, 1995.

On July 14, 1995, the Departmentpublished in the Federal Register (60FR 36260) a notice of initiation of anadministrative review of the order withrespect to Ta Chen and the period June1, 1994 through May 31, 1995.

Ta Chen, on November 20, 1995,requested that it be allowed to withdrawits request for a review and that thereview be terminated.

The Department’s regulations, at 19CFR 353.22(a)(5) (1994), state that ‘‘theSecretary may permit a party thatrequests a review under paragraph (a) ofthis section to withdraw the request notlater than 90 days after the date ofpublication of notice of initiation of therequested review. The Secretary mayextend this time limit if the Secretarydecides that it is reasonable to do so.’’In light of the fact that no significantwork has been done in this review, andin light of the burden upon the partiesand the Department in completing thisreview, we have determined that it isreasonable to allow Ta Chen towithdraw its request for review. SeeSteel Wire Rope From Japan; PartialTermination of Antidumping DutyAdministrative Reviews, 56 FR 41118(August 19, 1991). Accordingly, theDepartment is terminating this review.

This notice serves as a reminder toparties subject to administrativeprotective orders (APOs) of theirresponsibility concerning disposition ofproprietary information disclosed underAPO in accordance with § 353.34(d) ofthe Department’s regulations. Timelywritten notification of the return ordestruction of APO materials, orconversion to judicial protective order,is hereby requested. Failure to complywith the regulations and terms of anAPO is a sanctionable violation.

We will issue appraisementinstructions directly to the U.S. CustomsService.

This notice is in accordance with§ 353.22(a)(5) of the Department’sregulations (19 CFR 353.22(a)(5)).

Dated: July 26, 1996.Joseph A. Spetrini,Deputy Assistant Secretary, EnforcementGroup III.[FR Doc. 96–19724 Filed 8–1–96; 8:45 am]BILLING CODE 3510–32–P

Johns Hopkins University, et al.;Notice of Consolidated Decision onApplications for Duty-Free Entry ofScientific Instruments

This is a decision consolidatedpursuant to Section 6(c) of theEducational, Scientific, and CulturalMaterials Importation Act of 1966 (Pub.L. 89–651, 80 Stat. 897; 15 CFR part301). Related records can be viewedbetween 8:30 A.M. and 5:00 P.M. inRoom 4211, U.S. Department ofCommerce, 14th and ConstitutionAvenue, N.W., Washington, D.C.

Comments: None received. Decision:Approved. No instrument of equivalentscientific value to the foreigninstruments described below, for suchpurposes as each is intended to be used,is being manufactured in the UnitedStates.

Docket Number: 95–097R. Applicant:Johns Hopkins University, Baltimore,MD 21218. Instrument: Stopped-FlowSpectrophotometer, Model SX.17MV.Manufacturer: Applied PhotophysicsLtd., United Kingdom. Intended Use:See notice at 60 FR 57222, November14, 1995. Reasons: The foreigninstrument provides: (1) Sensitivefluorescence analysis, (2) sequentialmixing capability and (3) minimumsample volume of 50 µl per shot after avolume of 100 µl to prime the first shot.Advice received from: The NationalInstitutes of Health, June 5, 1996.

Docket Number: 96–016. Applicant:University of Iowa Hospitals andClinics, Iowa City, IA 52242.Instrument: [11C] Methylation SynthesisModule. Manufacturer: NuclearInterface GmbH, Germany. IntendedUse: See notice at 61 FR 25622, May 22,1996. Reasons: The foreign instrumentprovides: (1) An integrated preparativechromatography unit, (2) automatedsolid phase purification and (3)radioactivity detection and monitoringof reactor products andchromatographic effluent. Advicereceived from: The National Institutes ofHealth, March 28, 1996.

Docket Number: 96–024. Applicant:The University of Georgia, Athens, GA30602–2352. Instrument: MassSpectrometer, Model VG AutoSpec.Manufacturer: Fisons Instruments,United Kingdom. Intended Use: Seenotice at 61 FR 25622, May 22, 1996.Reasons: The foreign instrumentprovides: (1) Matrix-assisted laserdesorption/ionization and (2) precursorion resolution to 10 000. Advicereceived from: The National Institutes ofHealth, March 29, 1996.

The National Institutes of Healthadvises in its memoranda that (1) thecapabilities of each of the foreigninstruments described above arepertinent to each applicant’s intendedpurpose and (2) it knows of no domesticinstrument or apparatus of equivalentscientific value for the intended use ofeach instrument.

We know of no other instrument orapparatus being manufactured in theUnited States which is of equivalent


scientific value to any of the foreigninstruments.Frank W. Creel,Director, Statutory Import Programs Staff.[FR Doc. 96–19730 Filed 8–01–96; 8:45 am]BILLING CODE 3510–DS–P

Mississippi State University, et al.;Notice of Consolidated Decision onApplications for Duty-Free Entry ofScientific Instruments

This is a decision consolidatedpursuant to Section 6(c) of theEducational, Scientific, and CulturalMaterials Importation Act of 1966 (Pub.L. 89–651, 80 Stat. 897; 15 CFR part301). Related records can be viewedbetween 8:30 A.M. and 5:00 P.M. inRoom 4211, U.S. Department ofCommerce, 14th and ConstitutionAvenue, N.W., Washington, D.C.


Docket Number: 95–088R. Applicant:Mississippi State University,Mississippi State, MS 37962.Instrument: Stopped-FlowSpectrometer, Model SX.17MV.Manufacturer: Applied PhotophysicsLtd., United Kingdom. Intended Use:See notice at 60 FR 54337, October 23,1995. Reasons: The foreign instrumentprovides a fiber optic light guideinterface permitting sampleillumination within the confines of aninert atmosphere glove box. Advicereceived from: The National Institutes ofHealth, April 15, 1996.

Docket Number: 95–114R. Applicant:Research Triangle Institute, ResearchTriangle Park, NC 27709. Instrument: (2)Mass Spectrometers, ModelPlasmaQuad 2. Manufacturer: FisonsInstruments, Inc., United Kingdom.Intended Use: See notice at 60 FR64157, December 14, 1995. Reasons: Theforeign instrument provides a detectionlimit of less than 1 ppt for lead anddetection limits less than 10 ppt forarsenic and selenium. Advice receivedfrom: The National Institutes of Health,June 10, 1996.

Docket Number: 96–032. Applicant:University of California, Santa Barbara,Santa Barbara, CA 93106–9510.Instrument: Stopped-FlowSpectrophotometer, Model SX.18MV.Manufacturer: Applied PhotophysicsLtd., United Kingdom. Intended Use:See notice at 61 FR 28176, June 4, 1996.Reasons: The foreign instrumentprovides sequential mixing and

complete anaerobic operation. Advicereceived from: The National Institutes ofHealth, March 29, 1996.

The National Institutes of Healthadvises in its memoranda that (1) thecapabilities of each of the foreigninstruments described above arepertinent to each applicant’s intendedpurpose and (2) it knows of no domesticinstrument or apparatus of equivalentscientific value for the intended use ofeach instrument.

We know of no other instrument orapparatus being manufactured in theUnited States which is of equivalentscientific value to any of the foreigninstruments.Frank W. Creel,Director, Statutory Import Programs Staff.[FR Doc. 96–19731 Filed 8–01–96; 8:45 am]BILLING CODE 3510–DS–P

Princeton University, et al.; Notice ofConsolidated Decision on Applicationsfor Duty-Free Entry of ScientificInstruments

This is a decision consolidatedpursuant to Section 6(c) of theEducational, Scientific, and CulturalMaterials Importation Act of 1966 (Pub.L. 89–651, 80 Stat. 897; 15 CFR part301). Related records can be viewedbetween 8:30 a.m. and 5:00 p.m. inRoom 4211, U.S. Department ofCommerce, 14th and ConstitutionAvenue, N.W., Washington, D.C.


Docket Number: 96–015. Applicant:Princeton University, Princeton, NJ08544–0033. Instrument:Spectrophotometer/Fluorimeter System.Manufacturer: Hi-Tech Scientific,United Kingdom. Intended Use: Seenotice at 61 FR 25622, May 22, 1996.Reasons: The foreign instrumentprovides (1) a diode array detector forsimultaneous monitoring of allfrequencies and (2) the ability tofunction at the low temperaturesdemanded by experimental conditions.

Docket Number: 96–018. Applicant:Texas A&M University, College Station,TX 77843–2128. Instrument: Multi-Mixing Stopped-Flow Spectrometer,Model SX.18MV. Manufacturer:Applied Photophysics Ltd., UnitedKingdom. Intended Use: See notice at 61FR 25622, May 22, 1996. Reasons: Theforeign instrument provides (1) amicrovolume automatedspectrofluorimeter module with full

anaerobic capability and (2) multi-mixing capabilities through the use ofmultiple injection syringes.

Docket Number: 96–020. Applicant:National Institutes of Health, Phoenix,AZ 85014. Instrument: MassSpectrometer, Model Delta S.Manufacturer: Finnigan MAT, Germany.Intended Use: See notice at 61 FR25622, May 22, 1996. Reasons: Theforeign instrument provides (1) a dualviscous gas flow inlet system withvariable volume bellows for both thesample and reference gases and (2) aFriederichsen H2O–CO2 equilibrator forautomated analysis of 18O/16O of H2O.

Docket Number: 96–022. Applicant:Howard Hughes Medical Institute,Chevy Chase, MD 20815–6789.Instrument: 4 Syringe Stopped-FlowModule, Model SFM–4/S. Manufacturer:BioLogic, France. Intended Use: Seenotice at 61 FR 25622, May 22, 1996.Reasons: The foreign instrumentprovides four independently controlledsyringes for variable ratio, multi-mixingexperiments and low convection mixerdesign to reduce viscosity artifacts.

Docket Number: 96–028. Applicant:Florida International University, Miami,FL 33199. Instrument: (2) MassSpectrometers, Model Delta C.Manufacturer: Finnigan MAT, Germany.Intended Use: See notice at 61 FR28176, June 4, 1996. Reasons: Theforeign instrument provides an internalprecision of 0.006 per mil for 10 bar µlsamples of CO2 and automated analysesof 15N and 13C from the same sample.

The capabilities of each of the foreigninstruments described above arepertinent to each applicant’s intendedpurposes. We know of no instrument orapparatus being manufactured in theUnited States which is of equivalentscientific value to any of the foreigninstruments.Frank W. Creel,Director, Statutory Import Programs Staff.[FR Doc. 96–19729 Filed 8–1–96; 8:45 am]BILLING CODE 3510–DS–P

Renewal of the U.S. Automotive PartsAdvisory Committee

AGENCY: International TradeAdministration, Commerce.ACTION: Renewal of the U.S. AutomotiveParts Advisory Committee.

SUMMARY: Having determined that thecommittee’s work continues to be in thepublic interest in connection with theperformance of duties imposed on theDepartment by law, the U.S. AutomotiveParts Advisory Committee (APAC) wasrenewed. The renewal of the committeeis in accordance with the Federal


Advisory Committee Act, 5 U.S.C. App.2, and 41 CFR Subpart 101–6.10 (1990),Federal Advisory CommitteeManagement Rule.

The APAC was established by theSecretary of Commerce on June 6, 1989,to advise Department of Commerceofficials on issues related to sales ofU.S.-made auto parts to Japanesemarkets.

The Committee functions as anadvisory body in accordance with theFederal Advisory Committee Act.Authority for the committee iscontained in 15 U.S.C. § 4704, asamended by section 510 of Public Law103–236 (April 30, 1994).FOR FURTHER INFORMATION CONTACT:Robert Reck, U.S. Department ofCommerce, International TradeAdministration, Trade Development,Office of Automotive Affairs, (202) 482–1418.

Dated: July 24, 1996.Henry P. Misisco,Director, Office of Automotive Affairs.[FR Doc. 96–19624 Filed 8–1–96; 8:45 am]BILLING CODE 3510–DR–P

[C–333–401]

Cotton Shop Towels From Peru: IntentTo Terminate Suspended Investigation

AGENCY: Import Administration,International Trade Administration,Department of Commerce.ACTION: Notice of intent to terminatesuspended investigation.

SUMMARY: The Department of Commerce(the Department) is notifying the publicof its intent to terminate the suspendedcountervailing duty investigation ofcotton shop towels from Peru. Domesticinterested parties who object totermination of the suspendedinvestigation must submit theircomments in writing not later than 30days from the publication of this notice.EFFECTIVE DATE: August 2, 1996.FOR FURTHER INFORMATION CONTACT: RickJohnson or Jean Kemp, Office ofAgreements Compliance, ImportAdministration, International TradeAdministration, U.S. Department ofCommerce, 14th Street and ConstitutionAvenue, N.W., Washington, D.C. 20230;telephone: (202) 482–3793.


Background

The Department may terminate asuspended investigation if the Secretaryof Commerce concludes that it is nolonger of interest to interested parties.Accordingly, as required by the

Department’s regulations (at 19 C.F.R.355.25(d)(4)), we are notifying thepublic of our intent to terminate thesuspended countervailing dutyinvestigation of cotton shop towels fromPeru, for which the Department has notreceived a request to conduct anadministrative review for the mostrecent four consecutive annualanniversary months.

In accordance with section355.25(d)(4)(iii) of the Department’sregulations, if no domestic interestedparty (as defined in sections 355.2 (i)(3),(i)(4), (i)(5), and (i)(6) of the regulations)objects to the Department’s intent toterminate the suspended investigationpursuant to this notice, we shallconclude that the suspension agreementis no longer of interest to interestedparties and proceed with thetermination. However, if a domesticinterested party does object to theDepartment’s intent to terminatepursuant to this notice, the Departmentwill not terminate the suspendedinvestigation.

Opportunity To Object

Not later than 30 days from thepublication of this notice, domesticinterested parties may object to theDepartment’s intent to terminate thissuspended investigation. Anysubmission objecting to the terminationmust contain the name and case numberof the suspension agreement and astatement that explains how theobjecting party qualifies as a domesticinterested party under sections 355.2(i)(3), (i)(4), (i)(5), or (i)(6) of theDepartment’s regulations.

Seven copies of any such objectionsshould be submitted to the AssistantSecretary for Import Administration,International Trade Administration,Room B–099, U.S. Department ofCommerce, 14th Street and ConstitutionAve., N.W., Washington, D.C. 20230.

This notice is in accordance with 19CFR 355.25(d)(4)(i).

Dated: July 26, 1996.Joseph A. Spetrini,Deputy Assistant Secretary.[FR Doc. 96–19722 Filed 8–1–96; 8:45 am]BILLING CODE 3510–DS–M

Minority Business DevelopmentAgency

Business Development CenterApplications: Charleston, SC

AGENCY: Minority BusinessDevelopment Agency, Commerce.ACTION: Amendment.

SUMMARY: On page 29737, issue datedWednesday, June 12, 1996, solicitationto operate the Charleston MinorityBusiness Development Center isamended to read: Pre-ApplicationConference: Wednesday, July 24, 1996,at 9:00 a.m., at the Atlanta RegionalOffice, 401 W. Peachtree Street, N.W.,Suite 1715, Atlanta, Georgia 30308–3516. The closing date for applicationsis August 12, 1996.FOR FURTHER INFORMATION AND ANAPPLICATION PACKAGE, CONTACT: RobertHenderson at (404) 730–3300.11.800 Minority Business DevelopmentCenter(Catalog of Federal Domestic Assistance)

Dated: June 18, 1996.Frances B. Douglas,Alternate Federal Register Liaison Officer,Minority Business Development Agency.[FR Doc. 96–19625 Filed 8–1–96; 8:45 am]BILLING CODE 3510–21–P

DEPARTMENT OF DEFENSE

Department of the Air Force

Notice of Intent Modification toHardwood Range Expansion andRelated Airspace Actions, HardwoodRange, Juneau County, WI

The United States Air Force and theAir National Guard announced theirintent to prepare an EnvironmentalImpact Statement (EIS) 20 Jan 95 toanalyze the proposed action regardingthe Hardwood Range expansion intoWood County Wisconsin andmodification and/or expansion ofrelated airspace in the states of Iowa,Minnesota and Wisconsin. Theseactions collectively are known as theHardwood EIS.

Falls 1 and 2 Military OperationsAreas will be added into the proposedactions for increased utilization.

The Air Force and Air National Guardare planning to conduct a scopingmeeting at 7:00 PM on August 19, 1996at Black River Falls Armory, Black RiverFalls, WI. The purpose of this meetingis to present information concerning theproposed actions under considerationand solicit public input on issues to beaddressed. Questions or clarificationsconcerning the proposal, or any otherinformation presented, will be answeredas they relate to the scope of the effortanticipated.

The Air Force and Air National Guardwill accept comments at the addressbelow at any time during theenvironmental impact analysis process.To ensure the Air Force and the AirNational Guard have sufficient time to


consider public input in the preparationof the Draft EIS, comments should besubmitted to the address below byOctober 18, 1996. For furtherinformation concerning the preparationof the Hardwood EIS, or to providewritten comment, contact: ProgramManager, Hardwood EIS, Air NationalGuard Readiness Center, ANGRC/CEVP,3500 Fetchet Avenue, Andrews AirForce Base, MD 20762–5157.Patsy J. Conner,Air Force Federal Register Liaison Officer.[FR Doc. 96–19684 Filed 8–1–96; 8:45 am]BILLING CODE 3910–01–P

DEPARTMENT OF ENERGY

Federal Energy RegulatoryCommission

[Project No. 2105–037 & –038]

Pacific Gas and Electric Company;Notice of Availability of DraftEnvironmental Assessment

July 29, 1996.A draft environmental assessment

(DEA) is available for public review.The DEA was prepared in support ofdam safety repairs to be made pursuantto 18 CFR 12.4 at the Upper North ForkFeather River Project. The work will beconducted to improve the seismicstability of the project’s Butt Valley andCanyon Dams. The DEA finds that workwould not constitute a major federalaction significantly affecting the qualityof the human environment. The UpperNorth Fork Feather River Project islocated on Butt Creek and the NorthFork Feather River in Plumas County,California.

The DEA was written by staff in theOffice of Hydropower Licensing,Federal Energy Regulatory Commission.Copies of the DEA can be viewed at theCommission’s Reference andInformation Center, Room 2A, 888 FirstStreet, NE., Washington, DC 20426.Copies can also be obtained by callingthe project manager listed below.

Please submit any comments within14 days from the date of this notice. Anycomments, conclusions, orrecommendations that draw uponstudies, reports or other working papersof substance should be supported byappropriate documentation.

Comments should be addressed toLois D. Cashell, Secretary, FederalEnergy Regulatory Commission, 888First Street, NE., Washington, DC 20426.Please affix Project No. 2105–037 &–038 to all comments. For furtherinformation, please contact the project

manager, John Mudre, at (202) 219–1208.Lois D. Cashell,Secretary.[FR Doc. 96–19670 Filed 8–1–96; 8:45 am]BILLING CODE 6717–01–M

[Project Nos. P–11565–000, et al.]

Hydroelectric Applications [ThermalitoPower Company, et al.]; Notice ofApplications

Take notice that the followinghydroelectric applications have beenfiled with the Commission and areavailable for public inspection:

1 a. Type of Application: OriginalLicense for Major Project.

b. Project No.: 11565–000.c. Date filed: December 1, 1995.d. Applicant: Thermalito Power

Corporation.e. Name of Project: Therm II Project.f. Location: At the California

Department of Water Resources’Thermalito afterbay dam, in ButteCounty, California. Township 19 N,Range 1 E, Section 33.

g. Filed Pursuant to: Federal PowerAct 16 USC 791(a)–825(r).

h. Applicant Contact: Mr. StanMalinky, 311 D Street, West SacramentoCA 95605, (916) 372–0534.

i. FERC Contact: Michael Strzelecki at(202) 219–2827.

j. Deadline for Interventions andProtests: September 26, 1996.

k. Status of Environmental Analysis:The project is not ready forenvironmental analysis at this time—seeattached paragraph D8.

l. Description of Project: The proposedproject would develop the excesscapacity of the Feather River Project(FERC No. 2100), and would consist of:(1) A new gated outlet structureinstalled at the dam; (2) a powerhousecontaining three generating units withan installed capacity of 10,900 kW; (3)a 400-foot-long, 200-foot-wide tailracecanal leading to the Feather River; (4)the existing Sutter-Butte canal to beused for releases (5) a 350-foot-longtransmission line; and (6) appurtenantfacilities.

m. This notice also consists of thefollowing standard paragraphs: A2, A9,B1, and D8.

n. A copy of the application isavailable for inspection andreproduction at the Commission’sPublic Reference and Files MaintenanceBranch, located at 888 First Street, NE,Washington, DC, 20426, or by calling202–208–1371. A copy is also availablefrom the applicant at the addressprovided in item ‘‘h’’ above.

2 a. Type of Application: PreliminaryPermit.

b. Project No.: 11584–000.c. Date filed: July 1, 1996.d. Applicant: Whitewater Engineering

Corporation.e. Name of Project: Power Creek

Project.f. Location: On Power Creek, near the

city of Cordova, in Alaska. Sections 4,5, 6, 7, 8, and 9 in T15S, R2W; sections12, 13, 23, 24, 26, and 27 in T15S, R3W.

g. Filed Pursuant to: Federal PowerAct, 16 U.S.C. 791(a)–825(r).

h. Applicant Contact: Thom A.Fischer, President, WhitewaterEngineering Corporation, 1050 LarrabeeAvenue, Suite 104–707, Bellingham,WA 98225, (360) 733–3008.

i. FERC Contact: Mr. MichaelStrzelecki, (202) 219–2827.

j. Comment Date: September 26, 1996.k. Description of Project: The

proposed project would consist of: (1) A20-foot-high diversion structure onPower Creek; (2) an 5,700-foot-longwater conveyance system consisting oftwo pipelines and a tunnel; (3) apowerhouse containing three generatingunits with an installed capacity of 6.0MW; (4) a tailrace returning the water toPower Creek; (5) a 7.2-mile-long buriedtransmission line interconnecting withan existing transmission line at the EyakSubstation; (6) about 2.5 miles of accessroads; and (7) appurtenant facilities.

There are no federal lands within theproject boundary.

l. This notice also consists of thefollowing standard paragraphs: A5, A7,A9, A10, B, C, and D2.

3 a. Type of Application: Amendmentof License.

b. Project No: 2233–027.c. Date Filed: July 3, 1996.d. Applicant: Portland General

Electric Company, Smurfit NewsprintCorporation, Simpson Paper Company.

e. Name of Project: Willamette FallsProject.

f. Location: Willamette River,Clackamas County, OR .

g. Filed Pursuant to: Federal PowerAct, 16 USC Section 791(a)–825(r).

h. Applicant Contact: Richard Reiten,Portland General Electric Company, 121S.W. Salmon Street, Portland, OR97204, (503) 464–8005.

i. FERC Contact: Hillary Berlin, (202)219–0038.

j. Comment Date: September 6, 1996.k. Description of Application: The

proposed amendment is todecommission the six water power unitscurrently licensed for the Simpsonfacilities, which are uneconomical dueto high maintenance costs and restrictedwater usage. The total installed capacity


would be reduced from 27,080 kW to16,785 kW.

l. The notice also consists of thefollowing standard paragraphs: B, C1,and D2.

4 a. Type of Application: JointApplication for Transfer of License.

b. Project No.: 2851–011.c. Date Filed: June 17, 1996.d. Applicants: James River Paper

Company, Inc. and The Fonda Group,Inc.

e. Name of Project: Natural DamHydroelectric Project.

f. Location: On the Oswegatchie River,Village of Gouverneur, St. LawrenceCounty, New York.

g. Filed Pursuant to: Federal PowerAct, 16 USC 791(a)–825(r).

h. Contacts:Mr. Clifford A. Cutchins, IV, Senior

Vice President, James River PaperCompany, Inc., 120 Tredegar Street,Post Office Box 2218, Richmond,VA 23218, (804) 649–4444.

Mr. Harvey L. Friedman, The FondaGroup, Inc., 115 Stevens Avenue,Valhalla, NY 10593–1252, 1–(800)723–6876 Ex. 226 or (914) 747–2600.

i. FERC Contact: Mr. Lynn R. Miles,(202) 219–2671.

j. Comment Date: September 5, 1996.k. Description of the Proposed Action:

The licensee, James River PaperCompany, Inc. seeks to transfer theproject license to The Fonda Group, Inc.

l. This notice also consists of thefollowing standard paragraphs: B, C1,and D2.

5 a. Type of Application: As-BuiltExhibits.

b. Project No.: 2547–064.c. Date Filed: July 20, 1995, April 17,

1996, and June 19, 1996.d. Applicant: Swanton Village,

Vermont.e. Name of Project: Highgate Falls

Project.f. Location: On the Missisquoi River

in Franklin County, Vermont.g. Filed Pursuant to: Federal Power

Act, 16 U.S.C. 791(a)–825(r).h. Applicant Contact: Mr. Harold

Titemore, Electric Systems Manager,Village of Swanton, 120 First Street,Swanton, VT 05488, (802) 868–4200.

i. FERC Contact: Paul Shannon, (202)219–2866.

j. Comment Date: September 6, 1996.k. Description of Filings: Swanton

Village, Vermont, filed as-built exhibitsJ, K, L, and M with the Commission forthe Highgate Falls Project, in accordancewith article 30 of the May 24, 1984,Order Issuing License. The exhibitsshow and describe the constructedproject features. The original license

authorized the project to have a normalreservoir elevation of 200 feet USGS. ACommission order dated January 7,1992, amended the license to lower thecrest elevation of the project’s dam to190 feet USGS. The licensee’s filingrevises the project boundary on the as-built exhibit K to reflect operating theproject at a reservoir elevation of 190feet USGS.

l. This notice also consists of thefollowing standard paragraphs: B, C1,and D2.

6 a. Type of Application: Amendmentof Exemption.

b. Project No.: 4908–011.c. Date Filed: November 28, 1995.d. Applicant: Tannery Island Power

Company.e. Name of Project: Tannery Island

Hydroelectric Project.f. Location: On the Black River in the

town of Wilna, Jefferson County, NewYork.

g. Filed Pursuant to: Federal PowerAct, 16 U.S.C. 791(a)–825(r).

h. Applicant Contact: Ms. Mary J.Ruderman, 30 North Main Street,Carthage, NY 13619, (315) 493–1472.

i. FERC Contact: Robert Gwynn, (202)219–2764.

j. Comment Date: September 6, 1996.k. Description of Filing: Tannery

Island Power proposes to install 1-foothigh flashboards on the Big Spicer andLittle Spicer Dams. The flashboards willbe placed seasonally from April 15, atthe earliest, until December 17, at thelatest, when they will be removed. Theflashboards on Big Spicer dam willcontain 5 openings to direct 88 cfs ofdischarge to specific downstream areas.The flashboards on Little Spicer damwill contain 3 openings to direct 18 cfsof discharge to specific downstreamareas.

The dams have an irregular crestelevation and currently need aminimum discharge of 500 cfs toprovide adequate water to downstreamreaches of the river. The proposedflashboards will provide a more uniformdistribution of water to the downstreamreaches with a lower minimumdischarge of 106 cfs.

l. This paragraph also consists of thefollowing standard paragraphs: B, C1,and D2.

Standard ParagraphsA2. Development Application—Any

qualified applicant desiring to file acompeting application must submit tothe Commission, on or before thespecified deadline date for theparticular application, a competingdevelopment application, or a notice ofintent to file such an application.Submission of a timely notice of intent

allows an interested person to file thecompeting development application nolater than 120 days after the specifieddeadline date for the particularapplication. Applications forpreliminary permits will not beaccepted in response to this notice.

A5. Preliminary Permit—Anyonedesiring to file a competing applicationfor preliminary permit for a proposedproject must submit the competingapplication itself, or a notice of intent tofile such an application, to theCommission on or before the specifiedcomment date for the particularapplication (see 18 CFR 4.36).Submission of a timely notice of intentallows an interested person to file thecompeting preliminary permitapplication no later than 30 days afterthe specified comment date for theparticular application. A competingpreliminary permit application mustconform with 18 CFR 4.30(b) and 4.36.

A7. Preliminary Permit—Anyqualified development applicantdesiring to file a competingdevelopment application must submit tothe Commission, on or before aspecified comment date for theparticular application, either acompeting development application or anotice of intent to file such anapplication. Submission of a timelynotice of intent to file a developmentapplication allows an interested personto file the competing application nolater than 120 days after the specifiedcomment date for the particularapplication. A competing licenseapplication must conform with 18 CFR4.30(b) and 4.36.

A9. Notice of Intent—A notice ofintent must specify the exact name,business address, and telephone numberof the prospective applicant, and mustinclude an unequivocal statement ofintent to submit, if such an applicationmay be filed, either a preliminarypermit application or a developmentapplication (specify which type ofapplication). A notice of intent must beserved on the applicant(s) named in thispublic notice.

A10. Proposed Scope of StudiesUnder Permit—A preliminary permit, ifissued, does not authorize construction.The term of the proposed preliminarypermit would be 36 months. The workproposed under the preliminary permitwould include economic analysis,preparation of preliminary engineeringplans, and a study of environmentalimpacts. Based on the results of thesestudies, the Applicant would decidewhether to proceed with the preparationof a development application toconstruct and operate the project.


B. Comments, Protests, or Motions toIntervene—Anyone may submitcomments, a protest, or a motion tointervene in accordance with therequirements of Rules of Practice andProcedure, 18 CFR 385.210, .211, .214.In determining the appropriate action totake, the Commission will consider allprotests or other comments filed, butonly those who file a motion tointervene in accordance with theCommission’s Rules may become aparty to the proceeding. Any comments,protests, or motions to intervene mustbe received on or before the specifiedcomment date for the particularapplication.

B1. Protests or Motions to Intervene—Anyone may submit a protest or amotion to intervene in accordance withthe requirements of Rules of Practiceand Procedure, 18 CFR 385.210,385.211, and 385.214. In determiningthe appropriate action to take, theCommission will consider all protestsfiled, but only those who file a motionto intervene in accordance with theCommission’s Rules may become aparty to the proceeding. Any protests ormotions to intervene must be receivedon or before the specified deadline datefor the particular application.

C. Filing and Service of ResponsiveDocuments—Any filings must bear inall capital letters the title‘‘COMMENTS’’, ‘‘NOTICE OF INTENTTO FILE COMPETING APPLICATION’’,‘‘COMPETING APPLICATION’’,‘‘PROTEST’’, ‘‘MOTION TOINTERVENE’’, as applicable, and theProject Number of the particularapplication to which the filing refers.Any of the above-named documentsmust be filed by providing the originaland the number of copies provided bythe Commission’s regulations to: TheSecretary, Federal Energy RegulatoryCommission, 888 First Street, NE.,Washington, DC 20426. An additionalcopy must be sent to Director, Divisionof Project Review, Federal EnergyRegulatory Commission, at the above-mentioned address. A copy of anynotice of intent, competing applicationor motion to intervene must also beserved upon each representative of theApplicant specified in the particularapplication.

C1. Filing and Service of ResponsiveDocuments—Any filings must bear inall capital letters the title‘‘COMMENTS’’,‘‘RECOMMENDATIONS FOR TERMSAND CONDITIONS’’, ‘‘PROTEST’’, OR‘‘MOTION TO INTERVENE’’, asapplicable, and the Project Number ofthe particular application to which thefiling refers. Any of the above-nameddocuments must be filed by providing

the original and the number of copiesprovided by the Commission’sregulations to: The Secretary, FederalEnergy Regulatory Commission, 888First Street, NE., Washington, DC 20426.A copy of any motion to intervene mustalso be served upon each representativeof the Applicant specified in theparticular application.

D2. Agency Comments—Federal,state, and local agencies are invited tofile comments on the describedapplication. A copy of the applicationmay be obtained by agencies directlyfrom the Applicant. If an agency doesnot file comments within the timespecified for filing comments, it will bepresumed to have no comments. Onecopy of an agency’s comments must alsobe sent to the Applicant’srepresentatives.

D8. Filing and Service of ResponsiveDocuments—The application is notready for environmental analysis at thistime; therefore, the Commission is notnow requesting comments,recommendations, terms andconditions, or prescriptions.

When the application is ready forenvironmental analysis, theCommission will issue a public noticerequesting comments,recommendations, terms andconditions, or prescriptions.

All filings must (1) Bear in all capitalletters the title ‘‘PROTEST’’ or‘‘MOTION TO INTERVENE,’’ ‘‘NOTICEOF INTENT TO FILE COMPETINGAPPLICATION,’’ or ‘‘COMPETINGAPPLICATION;’’ (2) set forth in theheading the name of the applicant andthe project number of the application towhich the filing responds; (3) furnishthe name, address, and telephonenumber of the person protesting orintervening; and (4) otherwise complywith the requirements of 18 CFR385.2001 through 385.2005. Agenciesmay obtain copies of the applicationdirectly from the applicant. Any of thesedocuments must be filed by providingthe original and the number of copiesrequired by the Commission’sregulations to: The Secretary, FederalEnergy Regulatory Commission, 888First Street, NE., Washington, DC 20426.An additional copy must be sent toDirector, Division of Project Review,Office of Hydropower Licensing,Federal Energy Regulatory Commission,at the above address. A copy of anyprotest or motion to intervene must beserved upon each representative of theapplicant specified in the particularapplication.

Dated: July 25, 1996 in Washington, DC.Lois D. Cashell,Secretary.[FR Doc. 96–19668 Filed 8–1–96; 8:45 am]BILLING CODE 6717–01–P

[Docket No. CP96–643–000, et al.]

Southern Natural Gas Company, et al.Natural Gas Certificate Filings

July 25, 1996.Take notice that the following filings

have been made with the Commission:

1. Southern Natural Gas Company

[Docket No. CP96–643–000]Take notice that on July 16, 1996,

Southern Natural Gas Company(Southern), Post Office Box 2563,Birmingham, Alabama 35202–2563,filed in Docket No. CP96–643–000 arequest pursuant to Sections 157.205and 157.211 of the Commission’sRegulations under the Natural Gas Act(18 CFR 157.205 and 157.211) forauthorization to construct and operatenew delivery point facilities in CarrollCounty, Georgia, to accommodatedeliveries of natural gas to SouthwireCorporation (Southwire), underSouthern’s blanket certificate issued inDocket No. CP82–406–000 pursuant toSection 7 of the Natural Gas Act, all asmore fully set forth in the request thatis on file with the Commission and opento public inspection.

Southern requests authorization toconstruct and operate facilitiesconsisting of a dual 4-inch meter stationand appurtenant facilities, to be locatedon Southern’s 20-inch North Main Loopand 24-inch North Main 2nd Loop. Thecost of the facilities is estimated at$260,900. It is stated that Southwire willreimburse Southern for the constructioncost. Southern states that it willtransport gas for Southwire under itsRate Schedule IT. It is asserted thatSouthern has the capability toaccomplish the deliveries proposedwithout detriment or disadvantage to itsother customers. It is further assertedthat the deliveries at the proposedfacilities will have no adverse effect onSouthern’s peak day capacity.

Comment date: September 9, 1996, inaccordance with Standard Paragraph Gat the end of this notice.

2. ANR Pipeline Company


ANR Pipeline Company (ANR) filed inDocket No. CP96–646–000 a requestpursuant to section 7(b) of the NaturalGas Act (NGA), for an order permittingand approving the abandonment, by


1 See, 21 FERC ¶ 62,235 (1982).2 See, 51 FERC ¶ 61,309 (1990).

sale, of ANR’s fifty percent interest incertain 4-inch metering facilities toTranswestern Pipeline Company(Transwestern), all as more fully setforth in the application on file with theCommission.

The 4-inch metering facilities arelocated at an interconnection betweenANR and Transwestern in RobertsCounty, Texas. Transwestern operatesthe facilities and delivers natural gas toANR at this interconnection. Presently,the 4-inch metering facilities are jointlyowned by Transwestern (50%) and ANR(50%).

The 4-inch metering facilities consistof two 4-inch meter runs, flow controland pressure regulation facilities. Thesale price of the facilities will be equalto their net book value as contained inthe sales agreement entered into by ANRand Transwestern. As of April 30, 1996,the net book value of ANR’s interest inthe 4-inch metering facilities was$18,841.

Comment date: August 15, 1996, inaccordance with Standard Paragraph Fat the end of this notice.

3. Great Lakes Gas TransmissionLimited Partnership


Great Lakes Gas Transmission LimitedPartnership (Great Lakes), OneWoodward Avenue, Suite 1600, Detroit,Michigan 48226, filed an application inDocket No. CP96–647–000 pursuant to7(c) of the Natural Gas Act for acertificate of public convenience andnecessity authorizing it to construct andoperate various segments of pipelineloop, additional compression andcompression replacement equipment,and certain minor appurtenant andabove-ground facilities, all as more fullyset forth in the application on file withthe Commission and open to publicinspection.

Great Lakes proposes to construct andoperate (1) Three separate segments (22miles, 26.7 miles and 22.8 miles) of 36-inch pipeline loop totalling 71.5 milesin Kittson, Clearwater, Beltrami,Hubbard, and Carlton CountiesMinnesota and in Douglas County,Wisconsin; (2) install two 7,400horsepower (HP) unit additions, one atthe existing St. Vincent CompressorStation, and one at its existing FarwellCompressor Station, located in KittsonCounty and Clare County, Michigan,respectively; (3) replace an aerodynamicassembly at the Thief River FallsCompressor Station, located in MarshallCounty, Minnesota; and (4) constructand operate permanent above-groundfacilities in Kittson, Beltrami, andCarlton Counties, Minnesota and

Douglas County, Wisconsin, consistingof three loop-end crossover assemblies,the expansion of four existing mainlinevalve sites and, within the existingboundaries of the St. VincentCompressor Station, a loopline valveand crossover assembly.

Great Lakes states that the proposedfacilities are necessary to permit it totransport an additional 126,000 Mcf perday (Mcfd) of natural gas between apoint on the Unites States-Canadainternational boundary near St. Vincent,Minnesota, and a point on the UnitedStates-Canada international boundarynear St. Clair, Michigan, while at thesame time serving existing firmrequirements. Great Lakes states it hasexecuted precedent agreements withfive shippers which fully subscribe theproposed expansion. Great Lakes furtherstates that the project facilities willprovide system-wide benefits in theform of increased reliability, lowermaintenance costs, and by eliminating aperiodic capacity bottleneck at thebeginning of Great Lakes’ system. GreatLakes indicates that it is seeking pre-approval for rolled-in rate treatment, inaccordance with the guidelinesestablished by the Commission’s PricingPolicy for New and Existing FacilitiesConstructed by Interstate Natural GasPipelines (Docket No. PL94–4–000).Great Lakes states that prior to filing theapplication, it solicited its existing firmcustomers to determine if any werewilling to release capacity on apermanent basis in order to meet theadditional market requirements as analternative to construction of newfacilities. No shipper offered torelinquish its capacity entitlement.

Great Lakes proposes to construct itsproject in two phases so to avoidconstructing the majority of its facilitiesduring an environmentally sensitiveperiod. Great Lakes seeks to construct26.7 miles of pipeline looping inClearwater, Beltrami, and HubbardCounties Minnesota between October 1,1997 and February 15, 1998, and toconstruct the remaining facilities duringthe 1988 construction season. GreatLakes proposes to have all facilities inservice by November 1, 1998.

Great Lakes estimates that the projectwill cost $149,300,000 and that rolled-in rate treatment will have less than a5 percent impact on existing rates.

Comment date: August 15, 1996, inaccordance with Standard Paragraph Fat the end of this notice.

4. Florida Gas Transmission Company


Florida Gas Transmission Company(Applicant), P.O. Box 1188, Houston,

Texas 77251–1188, filed in Docket No.CP96–649–000 a request pursuant toSections 157.205 and 157.212 of theCommission’s Regulations under theNatural Gas Act for authorization toconstruct and operate a new deliverypoint, under blanket certificate issued inDocket No. CP82–553–000,1 all as morefully set forth in the request forauthorization on file with theCommission and open for publicinspection.

Applicant proposes to construct anew delivery point in Wakulla County,Florida for the City of Tallahassee toaccommodate gas deliveries to certainnew industrial customers on aninterruptible basis. Tallahassee electedto reimburse Applicant for allconstruction costs relating to the newmeter station in lieu of customerownership; estimated to be $114,000.Applicant proposes to deliver up to1000 MMBtu of gas per day at 60 psig.Applicant explains that the proposedquantities would be served from currentexisting certificated volumes.

Applicant holds a blankettransportation certificate pursuant toPart 284 of the Commission’sRegulations issued in Docket No. CP89–555–000.2 Applicant states thatconstruction of the proposed deliverypoint is not prohibited by its existingtariff and that it has sufficient capacityto accommodate the service proposedherein without determent ordisadvantage to Applicant’s othercustomers.

Comment date: September 9, 1996, inaccordance with Standard Paragraph Gat the end of this notice.

Standard ParagraphsF. Any person desiring to be heard or

make any protest with reference to saidfiling should on or before the commentdate file with the Federal EnergyRegulatory Commission, 888 FirstStreet, N.E., Washington, D.C. 20426, amotion to intervene or a protest inaccordance with the requirements of theCommission’s Rules of Practice andProcedure (18 CFR 385.211 and385.214) and the Regulations under theNatural Gas Act (18 CFR 157.10). Allprotests filed with the Commission willbe considered 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 a proceeding or toparticipate 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 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 thisfiling if no motion to intervene is filedwithin the time required herein, if theCommission on its own review of thematter finds that a grant of thecertificate is required by the publicconvenience and necessity. If a motionfor leave to intervene is timely filed, orif the Commission on its own motionbelieves that a formal hearing isrequired, further notice of such hearingwill be duly given.

Under the procedure herein providedfor, unless otherwise advised, it will beunnecessary for the applicant to appearor be represented at the hearing.

G. Any person or the Commission’sstaff may, within 45 days after theissuance of the instant notice by theCommission, file pursuant to Rule 214of the Commission’s Procedural Rules(18 CFR 385.214) a motion to interveneor notice of intervention and pursuantto § 157.205 of the Regulations underthe Natural Gas Act (18 CFR 157.205) aprotest to the request. If no protest isfiled within the time allowed therefore,the proposed activity shall be deemed tobe authorized effective the day after thetime allowed for filing a protest. If aprotest is filed and not withdrawnwithin 30 days after the time allowedfor filing a protest, the instant requestshall be treated as an application forauthorization pursuant to Section 7 ofthe Natural Gas Act.Lois D. Cashell,Secretary.[FR Doc. 96–19669 Filed 8–1–96; 8:45 am]BILLING CODE 6717–01–P


[FRL–5545–9]

Acid Rain Program: Notice of FinalOpt-in Permits

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Notice of final opt-in permits.

SUMMARY: The U.S. EnvironmentalProtection Agency is issuing two finalfive-year opt-in permits: one for theDuPont-Johnsonville Plant facility(Dupont) in Tennessee and one for theWarrick Power Plant facility (Warrick)in Indiana, in accordance with the Acid

Rain Permits and Opt-in regulations (40CFR parts 72 and 74, respectively).FOR FURTHER INFORMATION CONTACT: ForDupont: Jenny Jachim, (404) 347–3555,extension 4166, EPA Region 4; forWarrick: Cecilia Mijares, (312) 886–0968, EPA Region 5.

Dated: June 27, 1996.Brian J. McLean,Director, Acid Rain Division, Office ofAtmospheric Programs, Office of Air andRadiation.[FR Doc. 96–19709 Filed 8–1–96; 8:45 am]BILLING CODE 6560–50–P

[AD–FRL–5546–6]

Notice of Establishment of theIndustrial Combustion CoordinatedRulemaking Advisory Committee

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Establishment of IndustrialCombustion Coordinated RulemakingAdvisory Committee.

SUMMARY: As required by section 9(a)(2)of the Federal Advisory Committee Act(FACA), 5 U.S.C. App. 2, section 9(c),EPA hereby gives notice of theestablishment of the IndustrialCombustion Coordinated RulemakingAdvisory Committee (hereafter referredto as the Coordinating Committee). TheEPA has determined that this action isin the public interest and that theCoordinating Committee will supportEPA in performing its duties andresponsibilities under sections 111, 112,and 129 of the Clean Air Act (the Act).

The Coordinating Committee has beenestablished and members will include abalanced representation of interestedpersons with professional qualificationsand experience to contribute to thefunctions of the CoordinatingCommittee. Members will be drawnfrom: environmental, public health,pollution prevention, andenvironmental justice groups; State/local regulatory agencies; affectedsources (includes a variety of industrial,commercial, and institutionalestablishments as well as smallbusinesses and government and tribalagencies that own boilers, processheaters, waste incinerators, combustionturbines, and/or IC engines);manufacturers—including smallbusiness manufacturers—of combustors,emission controls, emission monitoring/testing equipment, and pollutionprevention techniques; fuel producersand suppliers; labor and academicresearch; and EPA.

Another Federal Register notice willbe published to announce the initial

meeting dates and the members selectedby EPA to be on the CoordinatingCommittee. The EPA is actively seekingnominations for the CoordinatingCommittee and the Work Groups. TheFederal Register notice announcing theintent to form an Advisory Committee,requesting nominations for candidates,and announcing a public meeting to beheld on July 24, 1996 was published onJune 21, 1996 (61 FR 31883).DATES: The first meeting of theIndustrial Combustion CoordinatedRulemaking Coordinating Committeewill be held in early October. The firstWork Group meetings are also expectedto be held in October.INSPECTION OF DOCUMENTS: Docket.Minutes of the meetings, as well asother relevant materials, will beavailable for public inspection at EPAAir Docket No. A–96–17, and is alsoavailable on the Technology TransferNetwork (see below). The docket is openfor public inspection and copyingbetween 8 a.m. and 4 p.m., Mondaythrough Friday except for Federalholidays, at the following address: U.S.Environmental Protection Agency, Airand Radiation Docket and InformationCenter (6102), 401 M Street SW.,Washington, DC 20460. The docket islocated at the above address in RoomM–1500, Waterside Mall (ground floor).Copies of docket items may be mailedon request from the Air and RadiationDocket and Information Center bycalling (202) 260–7548 or 7549. TheFAX number for the Center is (202) 260–4000. A reasonable fee may be chargedfor copying.

Technology Transfer Network. TheTTN is one of the EPA’s electronicbulletin boards. Information on theICCR can be downloaded by choosingthe ‘‘ICCR-Industrial CombustionCoordinated Rulemaking Process’’selection from the TechnicalInformation Areas menu. The service isfree except for the cost of a phone call.Dial (919) 541–5472 for up to a 14,400bits-per-second (bps) modem. If moreinformation on the TTN is needed, callthe help desk at (919) 541–5384.ADDRESSES: The location of theupcoming Work Group meetings andCoordinating Committee meeting will beannounced in a later Federal Registernotice.FOR FURTHER INFORMATION CONTACT: FredPorter, Combustion Group, U.S.Environmental Protection Agency,Research Triangle Park, NC 27711;telephone number (919) 541–5251.SUPPLEMENTARY INFORMATION: Twocopies of the Coordinating Committeecharter are filed with appropriatecommittees of Congress and the Library


of Congress and are available uponrequest. The purpose of theCoordinating Committee is to assist EPAin the development of regulations tocontrol emissions of air pollutants fromindustrial, commercial, and institutionalcombustion of fuels and non-hazardoussolid wastes. The CoordinatingCommittee will attempt to developrecommendations for national emissionstandards for hazardous air pollutants(NESHAP) implementing section 112and solid waste combustion regulationsimplementing section 129 of the Act,and may review and makerecommendations for revising anddeveloping new source performancestandards (NSPS) under section 111 ofthe Act. The regulations will coverboilers, process heaters, industrial/commercial and other (non-hazardous)waste incinerators, stationary internalcombustion engines, and stationary gasturbines.

The Coordinating Committee willprovide a means for consideringimportant regulatory issues andbuilding stakeholder consensus on theseissues prior to proposal. TheCoordinating Committee will establishWork Groups as necessary to fulfillthese objectives. The CoordinatingCommittee approach will lead to betterregulations and is consistent withagency initiatives to use flexible,common-sense approaches, avoidduplication, and involve stakeholders inthe regulatory process.

The Coordinating Committee willcoordinate information collection andanalysis for the various combustionsource categories and makerecommendations on all aspects of theregulation including, but not limited to,applicability, definitions, emissionslimitations, testing, monitoring,recordkeeping, and reportingrequirements. The CoordinatingCommittee shall hold meetings, collectand analyze information, analyze issues,conduct reviews, perform studies,produce reports, and make regulatoryrecommendations. In developingregulatory recommendations, theCoordinating Committee will strive toreach consensus, where consensus isdefined as a recommendation that allparties can accept or support, althoughit may not be their first choice. Ifconsensus is not reached, theCoordinating Committee shall reportmajority and minority recommendationsto EPA. The EPA retains its full andindependent decision-making authorityand responsibility. A consensus-basedrecommendation to EPA will, however,be given great consideration in thesedecisions.

The Coordinating Committee likelywill need several closely-spacedmeetings during the initial phases of theIndustrial Combustion CoordinatedRulemaking. After that, regular quarterlymeetings may be sufficient. The FACArequires that these meetings be open tothe public and that there be anopportunity for interested persons to filecomments before or after meetings, or tomake statements as permitted by theCoordinating Committee’s guidelinesand to the extent time permits. Inaccordance with these requirements, thefirst and subsequent meetings of theCoordinating Committee will be open tothe public. Any comments can be sentto the docket at the address listed under‘‘Inspection of Documents’’.

Dated: July 26, 1996.Mary D. Nichols,Assistant Administrator.[FR Doc. 96–19705 Filed 8–1–96; 8:45 am]BILLING CODE 6560–50–P

[ER–FRL–5471–8]

Environmental Impact Statements;Notice of Availability

Responsible Agency: Office of FederalActivities, General Information (202)564–7167 or (202) 564–7153.

Weekly receipt of EnvironmentalImpact Statements Filed July 22, 1996Through July 26, 1996 Pursuant to 40CFR 1506.9.EIS No. 960340, FINAL EIS, FRC, ME,

Lower Androscoggin River BasinHydroelectric Project, Gulf Island-Deer Rips Project (FERC No. 2283–005) and Marcal Project (FERC No.11482–000) Relicensing andLicensing, Androscoggin County, ME,Due: September 03, 1996, Contact:Allan E. Creamer (202) 219–0365.

EIS No. 960341, FINAL EIS, FRC, WA,Nisqually Hydroelectric Project(FERC. No. 1862) Issuing New License(Relicense), Nisqually River, Pierce,Thurston and Lewis Counties, WA,Due: September 03, 1996, Contact:Edward R. Meyer (202) 208–7998.

EIS No. 960342, FINAL EIS, COE, MN,Northwestern Minnesota Basin FloodControl Impoundments and FloodDamage Reduction Project,Construction and Operation, RedRiver, St. Paul District, MN, Due:September 03, 1996, Contact: Robert J.Whiting (612) 290–5264.

EIS No. 960343, DRAFT EIS, NPS, CA,San Francisco Maritime NationalHistorical Park, General ManagementPlan, Implementation, San FranciscoCounty, CA, Due: September 27, 1996,Contact: Alan Schmierer (415) 744–3971.

EIS No. 960344, DRAFT EIS, FEM, GA,Albany Flood Recovery Activities,Replacement of Damaged PublicSchools, Housing and Businesses,Albany and Dougherty Counties, GA,Due: September 16, 1996, Contact:Todd Davidson (404) 853–4401.

EIS No. 960345, FINAL EIS, COE, LA,Amite River and Tributaries FloodControl Project, Implementation, EastBaton Rouge Parish Watershed,Florida Parishes, LA, Due: September03, 1996, Contact: Bill Wilson (504)862–2527.

EIS No. 960346, FINAL EIS, AFS, AR,Renewal of the Shortleaf Pine/Bluestem Grass Ecosystem andRecovery of the Red-cockadedWoodpecker, Amendment No. 22 tothe Ouachita National Forest Landand Resource Management Plan, Scottand Polk Counties, AR, Due:September 03, 1996, Contact: JohnCleeves (501) 321–5251.

EIS No. 960347, FINAL EIS, NPS, CA,Lava Beds National Monument,General Management Plan,Implementation, Siskiyou and ModocCounties, CA, Due: September 03,1996, Contact: Dan Olson (415) 744–3968.

EIS No. 960348, FINAL EIS, FHW, CA,River Street Widening in Santa Cruz,Improvements from Water Street toHighway 1, Funding and Right-of-Way Grant, Santa Cruz County, CA,Due: September 03, 1996, Contact:John Schultz (916) 498–5041.

EIS No. 960349, DRAFT EIS, NRC, OH,Shieldalloy Fernoalloy PlantDecommissioning Plan, Approval,Cambridge, Geurnsey County, OH,Due: September 16, 1996, Contact:Mark Thaggard (301) 415–6718.

EIS No. 960350, DRAFT SUPPLEMENT,FHW, VA, DC, MD, Woodrow WilsonBridge Improvements, UpdatedInformation concerning SubsequentDevelopment of Two Alternativessince the January 1996 DSEIS, I–95/I–495 (Capital Beltway), Telegraph Roadto MD–210, Funding, COE Section 10and 404 Permits and CGD BridgePermit Issuance, City of Alexandria,Fairfax County, VA; Prince George’sCounty, MD and DC. Due: September20, 1996, Contact: David C. Gramble(410) 962–2542.

EIS No. 960351, DRAFT EIS, FHW, MO,MO–19, MO–107 and US 54Improvements and Extension, US 61near Bowling Green and New Londonon the East to Mark Twain Lake andthe Mexico Bypass on the West,Funding and COE Section 404 PermitsIssuance, Pike, Monroe, Ralls andAudrain Counties, MO, Due:September 20, 1996, Contact: DonNeumann (573) 636–7104.


EIS No. 960352, DRAFT EIS, COE, MS,LA, Pearl River in the Vicinity ofWalkiah Bluff, Wetland Restoration,Implementation, Picayune, PearlRiver County, MS and St. TammanyParish, LA, Due: September 16, 1996,Contact: Gary Young (601) 631–5960.

Amended NoticesEIS No. 960231, DRAFT EIS, NPS, CA,

Santa Rosa Island ResourcesManagement Plan, Improvements ofWater Quality and Conservation ofRare Species and their Habitats,Channel Islands National Park, SantaBarbara County, CA, Due: September09, 1996, Contact: Allen Schmierer(415) 744–3971.Published FR 05–24–96—Review

Period extended.Dated: July 30, 1996.

William D. Dickerson,Director NEPA Compliance Division, Officeof Federal Activities.[FR Doc. 96–19714 Filed 8–1–96; 8:45 am]BILLING CODE 6560–50–U

[ER–FRL–5471–9]

Environmental Impact Statements andRegulations; Availability of EPAComments

Availability of EPA commentsprepared July 15, 1996 Through July 19,1996 pursuant to the EnvironmentalReview Process (ERP), under Section309 of the Clean Air Act and Section102(2)(c) of the National EnvironmentalPolicy Act as amended. Requests forcopies of EPA comments can be directedto the Office of Federal Activities at(202) 564–7167.

An explanation of the ratings assignedto draft environmental impactstatements (EISs) was published in FRdated April 05, 1996 (61 FR 15251).

Draft EISs

ERP No. DA–AFS–L82010–00 RatingLO, Pacific Northwest Region NationalForests, Nursery Pest ControlManagement Plan, AdditionalInformation concerning Changes to aList of Chemical Pesticides andStreamlining the Process for FutureChanges Approved for Use at J. HerbertStone, Bend Pine and Wind RiverNurseries and Dorena TreeImprovement Center, WA and OR.

Summary: Review of the Final EISwas not deemed necessary. No formalcomment letter was sent to thepreparing agency.

Final EISs

ERP No. F–AFS–L65208–AKShamrock Timber Sales, Timber

Harvesting and Road Construction,Stikine Area, Kupreanof Island, TongassNational Forest, Implementation, AK.

Summary: Review of the final EIS wasnot deemed necessary. No formalcomment letter was sent to thepreparing agency.

ERP No. F–AFS–L65250–ID WhiteSand Planning Area EcosystemManagement Project, Implementation,Clearwater National Forest, PowellRanger District, Idaho County, ID.

Summary: Review of the Final EIS hasbeen completed and the project found tobe satisfactory. No formal commentletter was sent to the preparing agency.

ERP No. F–AFS–L65254–AK 1995Mendenhall Glacier Recreation AreaManagement Plan, Implementation,Tongass National Forest, Juneau RangerDistrict, Chatham Area, AK.

Summary: Review of the Final EIS hasbeen completed and the project found tobe satisfactory. No formal commentletter was sent to the preparing agency.

ERP No. F–BLM–K67035–NVBootstrap/Capstone and Tara Open-PitGold Mine Project, Construction andOperation Approval, Plan of Operation,Elk and Eureka Counties, NV.


ERP No. F–BLM–L65243–OR LakeAbert Area Designation as an Area ofCritical Environmental Concerns(ACEC), High Desert ManagementFramework Amendment Plan, Right-of-Way Grant and Drilling Permit, ValleyFalls, Lake County, OR.

Summary: Review of the Final EISwas not deemed necessary. No formalletter was sent to the preparing agency.

ERP No. F–DOE–A09825–00Disposition of Surplus Weapons-UsableHighly Enriched Uranium (HEU) to LowEnriched Uranium (LEU), Site Selection,Y–12 Plant Oak Ridge, TN; SavannahRiver Site, Aiken, SC; Babcock & WilcoxNaval Nuclear Fuel Division,Lynchburg, VA and Nuclear FuelServices Plant, Erwin, TN.

Summary: EPA’s previousenvironmental concerns have beenadequately addressed, therefore, EPAhad no objections to the project asproposed.

ERP No. F–MMS–L02025–AK BeaufortSea Planning Area Proposed 1996 Oiland Gas Lease Sale No. 144, LeaseOfferings, Alaska Outer ContinentalShelf (OCS), AK.


ERP No. F–NRC–A00164–00 NuclearPower Plants Operating Licenses,NUREG–1437, Renewal, NPDES Permit.

Summary: EPA expressed concernswith the proposed approach to purposesand need, the level of consideration ofenvironmental justice, and a number ofradiation issues and provided detailedcomments for consideration for theRecord of Decision and the final rule.

ERP No. FS–COE–L39045–AK ChignikSmall Boat Harbor Development andConstruction, Updated Informationconcerning Selected Alternative Site 2,Anchorage Bay, Alaska Peninsula, AK.


Dated: July 30, 1996.William D. Dickerson,Director, NEPA Compliance Division, Officeof Federal Activities.[FR Doc. 96–19715 Filed 8–1–96; 8:45 am]BILLING CODE 6560–50–U

[FRL–5546–5]

Common Sense Initiative Council(CSIC), Automobile ManufacturingSector Subcommittee Meeting

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Notification of Public AdvisoryCSIC Automobile Manufacturing SectorSubcommittee Meeting; open meeting.

SUMMARY: Pursuant to the FederalAdvisory Committee Act, Public Law92–463, notice is hereby given that theAutomobile Manufacturing SectorSubcommittee of the Common SenseInitiative Council will meet on August20, 1996, in Washington, DC. Themeeting is open to the public.OPEN MEETING NOTICE: Notice is herebygiven that the Environmental ProtectionAgency is holding an open meeting ofthe Automobile Manufacturing SectorSubcommittee (CSIC–AMS) on Tuesday,August 20, 1996, from 9:00 a.m. EDT to4:30 p.m. EDT. The meeting will be heldat the Omni Shoreham Hotel, (HampdenRoom), 2500 Calvert Street, N.W.,Washington, DC. During the August 20meeting, discussions will include howthe teams or subcommittee should moveindividual or a group of projectsforward and how to handle sectorprojects that have implications outsidethe auto sector.

The CSIC–AMS has formed threeproject teams—Regulatory Initiatives;Alternative Sector Regulatory System/Community Technical Assistance; andLife Cycle Management/Supplier


Partnership. An Agenda will beavailable August 9, 1996.

Seating may be limited, therefore,advance registration is recommended.Any person or organization interested inattending the meeting should contactMs. Carol Kemker, Designated FederalOfficial (DFO), no later than August 13,1996, at (404) 347–3555 extension 4222.Each individual or group wishing tomake oral presentations will be alloweda total of three minutes.

Inspection of Subcommittee Documents

Documents relating to the aboveSector Subcommittee meeting, will bepublicly available at the meeting.Thereafter, these documents, togetherwith the official minutes for themeeting, will be available for publicinspection in room 2821M of EPAHeadquarters, Common Sense InitiativeProgram Staff, 401 M Street, SW.,Washington, DC 20460, telephonenumber (202) 260–7417. Common SenseInitiative information can be accessedelectronically through contactingKatherine Brown [email protected] FURTHER INFORMATION: For moreinformation about this AutomobileManufacturing Sector SubcommitteeMeeting, contact Carol Kemker, DFO on(404) 347–3555 extension 4222, KeithMason, Alternate DFO at (202) 260–1360, or Julie Lynch, alternate DFO at(202) 260–4000.

Dated: July 29, 1996.Robert English,Acting Designated Federal Officer.[FR Doc. 96–19706 Filed 8–1–96; 8:45 am]BILLING CODE 6560–50–P

[FRL–5546–7]

Agency Information CollectionActivities Under OMB Review

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Notice.

SUMMARY: In compliance with thePaperwork Reduction Act (44 U.S.C.3501 et seq.), this notice announces theOffice of Management and Budget’s(OMB) responses to Agency PRAclearance requests. An agency may notconduct or sponsor, and a person is notrequired to respond to, a collection ofinformation unless it displays acurrently valid OMB control number.The OMB control numbers for EPA’sregulations are listed in 40 CFR Part 9and 48 CFR Chapter 15.FOR FURTHER INFORMATION CONTACT:Sandy Farmer, (202) 260–2740.

Please refer to the appropriate EPAICR Number.


OMB Responses to Agency PRAClearance Requests

OMB Approvals

EPA ICR No. 1504.03; Data Generationfor Registration Activities; wasapproved 07/10/96; OMB No.2070¥0107; expires 07/31/99.

EPA ICR No. 1131.05; NSPS for GlassManufacturing Plants (Subpart CC); wasapproved 7/22/96; OMB No. 2060–0054;expires 07/31/99.

EPA ICR No. 1081.05; NESHAP forInorganic Arsenic Emissions from GlassManufacturing Plants; was approved 07/12/96; OMB No. 2060–0043; expires 07/31/99.

EPA ICR No. 0282.08; Emission DefectInformation and Voluntary EmissionsRecall Reports; was approved 07/12/96;OMB No. 2060–0048; expires 07/31/99.

EPA ICR No. 0095.08; Pre-Certification and Testing ExemptionsReporting and RecordkeepingRequirements; was approved 07/12/96;OMB No. 2060–0007; expires 07/31/99.

EPA ICR No. 1739.02; NationalEmission Standards for Hazardous AirPollutants for the Printing andPublishing Industry; was approved 07/19/96; OMB No. 2060–0335; expires 07/31/99.

EPA ICR No. 1656.03; InformationCollection Requirements for Registrationand Documentation of Risk ManagementPlans under Section 112(r) of the CleanAir Act, as Amended; was approved 07/18/96; OMB No. 2050–0144; expires 07/31/99.

EPA ICR No. 1769.01; Design for theEnvironment (DFE) Screen PrintingSurvey; was approved 06/14/96; OMBNo. 2070–0150; expires 06/30/99.

EPA ICR No. 1764.01; NationalVolatile Organic Compound EmissionStandards for Consumer Products; wasapproved 06/28/96; OMB No. 2060–0348; expires 06/30/99.

EPA ICR No. 1626.05; NationalRecycling and Emissions ReductionProgram; was approved 06/28/96; OMBNo. 2060–0256; expires 06/30/99.

Dated: July 26, 1996.Richard Westlund,Acting Director, Regulatory InformationDivision.[FR Doc. 96–19702 Filed 7–30–96; 5:03 pm]BILLING CODE 6560–50–M

[FRL 5545–8]

Notice of Proposed AdministrativeSettlement; Lorentz Barrel and DrumSuperfund Site

AGENCY: Environmental ProtectionAgency.ACTION: Notice; request for publiccomment.

SUMMARY: In accordance with Section122(i)(1) of the ComprehensiveEnvironmental Response, Compensationand Liability Act of 1980, as amended(‘‘CERCLA,’’ commonly referred to asSuperfund), 42 U.S.C. 9622(i) andSection 7003(d) of the ResourceConservation and Recovery Act, asamended (‘‘RCRA’’), 42 U.S.C. 6973,notice is hereby given of a proposed costrecovery administrative settlementconcerning the Lorentz Barrel and DrumSuperfund Site in San Jose, California(the ‘‘Site’’). The United StatesEnvironmental Protection Agency(‘‘EPA’’) is proposing to enter into a deminimis settlement pursuant to Section122(g)(4) of CERCLA. This proposedsettlement is intended to resolve theliabilities under CERCLA and RCRA of60 de minimis parties for all past andfuture response costs associated withthe Lorentz Barrel and Drum Site. Thenames of the settling parties are listedbelow in the SupplementaryInformation section. These 60 partiescollectively have agreed to pay$1,838,224.30 to EPA and $865,046.72to the California Department of ToxicSubstances Control (‘‘DTSC’’).

EPA is entering into this agreementunder the authority of Section 122(g)(4)of CERCLA. Section 122(g) authorizesearly settlements with de minimisparties to allow them to resolve theirliabilities at Superfund sites withoutincurring substantial transaction costs.A de minimis party is one thatcontributed a minimal amount ofhazardous substances to a site incomparison to other hazardoussubstances at a site, and contributedhazardous substances that are notsignificantly more toxic or ofsignificantly greater hazardous effectthan other hazardous substances at asite. Under the authority granted bySection 122(g), EPA proposes to settlewith 60 potentially responsible partiesat the Lorentz Barrel and DrumSuperfund Site, each of whom isresponsible for no more than onepercent of the total hazardoussubstances sent to the Site, as that totalis reflected on the July 29, 1994 waste-in list developed by EPA.

De minimis settling parties will berequired to pay their allocated share of


all past response costs and the estimatedfuture response costs at the LorentzBarrel and Drum Site, including allfederal and state response costs, and apremium to cover the risks of remedyfailure and cost overruns. One settlingde minimis party was a party to anearlier settlement with EPA (‘‘priorsettlor’’) under which the prior settlorsconducted clean up work at the Site.EPA has calculated the value of theprior settlors’ work and has arrived at anequitable amount which this priorsettlor has agreed to pay to enter intothis settlement to resolve its liability toEPA and DTSC for the Site.

EPA may withdraw or withhold itsconsent to this settlement if commentsreceived during the 30 day publiccomment period disclose facts orconsiderations which indicate theproposed settlement is inappropriate,improper, or inadequate.DATES: Pursuant to Section 122(i)(1) ofCERCLA and Section 7003(d) of RCRA,EPA will receive written commentsrelating to this proposed settlement forthirty (30) days following the date ofpublication of this Notice. If EPAreceives a request for a public meetingwithin thirty (30) days following thedate of publication of this Notice,pursuant to Section 7003(d) of RCRA,EPA will hold a public meeting.ADDRESSES: Comments and requests fora public meeting should be addressed tothe Docket Clerk, U.S. EPA Region IX(RC–1), 75 Hawthorne Street, SanFrancisco, CA 94105 and should referto: Lorentz Barrel and Drum SuperfundSite, San Jose, California, U.S. EPADocket No. 96–01. A copy of theproposed Administrative Order onConsent may be obtained from theRegional Hearing Clerk at the addressprovided above. EPA’s response to anycomments received will be available forinspection from the Regional HearingClerk; at the Dr. Martin Luther King, Jr.Public Library, Reference Desk, 180 W.San Carlos Street, San Jose, CA 95113;and at San Jose State University, ClarkLibrary, Government Publications Desk,One Washington Square, San Jose, CA95192.FOR FURTHER INFORMATION CONTACT:Karen Goldberg, Assistant RegionalCounsel, (415) 744–1382, U.S.Environmental Protection Agency (RC–3), Region 9, 75 Hawthorne Street, SanFrancisco, CA 94105.SUPPLEMENTARY INFORMATION: Theproposed de minimis settlementresolves EPA and DTSC’s claims underSection 107 of CERCLA and Section7003 of RCRA against the followingRespondents: Adhesives ConsultantsCorp., Alcal Roofing, American

Contracting, Amoco, Anacomp, AngrayMerchandising Corp., B & W Chemicals,Inc., Bell Industries, Burke IndustriesCo., Central Solvents & Chemicals,Chem Art Laboratories, CrownZellerbach Corp., Del Monte Corp.,Dopaco Inc., E.F. Houghton & Co., FullerO’Brien Corporation, General PrintingInk Co., Glasforms Inc., Industrial Labs,Intel, International Paper Co., JerryMello, Jhirmack, John Jones, JonesChemicals Inc., Kaiser Aluminum &Chemical, Kaiser Cement, LubricatingSpecialties Co., McKesson Corp., MicroMetallics Corp., NBK Corp., Norda Inc.,Owens Illinois Glass Co., PacificFiberglass, Personal Products Co.,Pyramid Painting Inc., Raytheon Co.,Rheem Manufacturing Co., RimIndustries Inc., Rohm & Haas CaliforniaInc., Romic Chemical Co., Santa ClaraCounty Transit, Schlage Lock Co.,Signetics Corp., Simpson Lee Paper Co.,Stucco Stone Prod., Stutts ScientificService, Tandy Corp., TechnicalCoating, Thomas J. Lipton Inc., TrescoPaint Co., Tri-Cal Inc., U.S. CelluloseCo. Inc., Unisys, Varian Associates,Velcon Filters Inc., Vic Hubbard Speed& Marine, Viking Container Co., WrigleyChewing Gum Co., and Zycon Corp.

Dated: July 19, 1996.Michael Heely,Acting Director Superfund Division.[FR Doc. 96–19707 Filed 8–1–96; 8:45 am]BILLING CODE 6560–50–M

[FRL–5546–3]

Proposed General NPDES Permit forFacilities Related to Oil and GasExtraction on the North Slope of theBrooks Range, Alaska

AGENCY: Environmental ProtectionAgency, Region 10.ACTION: Notice of a proposed generalpermit.

SUMMARY: This proposed general permitis intended to regulate activities relatedto the extraction of oil and gas on theNorth Slope of the Brooks Range in thestate of Alaska. The activities coveredinclude sanitary and domesticdischarges from exploration,development and construction camps;gravel pit dewatering and the use of thiswater for the construction of icestructures and road watering; andconstruction dewatering. This permitwill be used to cover dischargers thathave been previously unpermitted dueto resource constraints. When issued,the proposed permit will establisheffluent limitations, standards,prohibitions and other conditions ondischarges from covered facilities. These

conditions are based on existingnational effluent guidelines, the state ofAlaska’s Water Quality Standards andmaterial contained in the administrativerecord. A description of the basis for theconditions and requirements of theproposed general permit is given in thefact sheet.

DATES: Interested persons may submitcomments on the draft general permit toEPA, Region 10 at the address below.Comments must be received in theOperations Office by September 16,1996.

ADDRESSES: Comments on the proposedgeneral permit should be sent to CindiGodsey; U.S. EPA, Region 10; AlaskaOperations Office, 222 W. 7th Street#19, Anchorage, Alaska, 99513–7588.

FOR FURTHER INFORMATION CONTACT:Copies of the Permit and Fact Sheet areavailable upon request. Requests may bemade to Jeanette Carriveau at (206) 553–1214 or to Cindi Godsey at (907) 269–7692. Requests may also beelectronically mailed to:CARRIVEAU.JEANETTE @EPAMAIL.EPA.GOV or [email protected]


Request for Coverage

Written request for coverage andauthorization to discharge under thegeneral permit shall be provided to EPA,Region 10, as described in Part I.B. ofthe draft permit. Authorization todischarge requires written notificationfrom EPA that coverage has beengranted and that a specific permitnumber has been assigned to theoperation.


The Office of Management and Budgethas exempted this action from thereview requirements of Executive Order12866 pursuant to Section 6 of thatorder.

Regulatory Flexibility Act

After review of the facts presented inthe notice printed above, I hereby certifypursuant to the provision of 5 U.S.C.605(b) that this general NPDES permitwill not have a significant impact on asubstantial number of small entities.Moreover, the permit reduces asignificant administrative burden onregulated sources.

Dated: July 25, 1996.Roger K. Mochnick,Acting Director, Office of Water.[FR Doc. 96–19710 Filed 8–1–96; 8:45 am]BILLING CODE 6560–50–P



Notice of Agency; Sunshine ActMeeting

Pursuant to the provisions of the‘‘Government in the Sunshine act’’ (5U.S.C. 552b), notice is hereby given thatat 10:00 a.m. on Tuesday, July 30, 1996,the Board of Directors of the FederalDeposit Insurance Corporation met inclosed session to consider the following:

Matters relating to the Corporation’ssupervisory activities.

Matters relating to the probable failure ofan insured depository institution.

In calling the meeting, the Boarddetermined, on motion of ViceChairman Andrew C. Hove, Jr.,seconded by Director Joseph H. Neely(Appointive), concurred in by Ms. JulieWilliams, acting in the place and steadof Director Eugene A. Ludwig(Comptroller of the Currency), JonathanL. Fiechter (Acting Director, Office ofThrift Supervision), and Chairman RickiHelfer, that Corporation businessrequired its consideration of the matterson less than seven days’ notice to thepublic; that no earlier notice of themeeting was practicable; that the publicinterest did not require consideration ofthe matters in a meeting open to publicobservation; and that the matters couldbe considered in a closed meeting byauthority of subsections (c)(6), (c)(8),(c)(9)(A)(ii) and (c)(9)(B) of the‘‘Government in the Sunshine Act’’ (5U.S.C. 552b (c)(6), (c)(8), (c)(9)(A)(ii),and (c)(9)(B)).

The meeting was held in the BoardRoom of the FDIC Building located at550—17th Street, NW., Washington, DC.

Dated: July 30, 1996.Federal Deposit Insurance CorporationValerie J. Best,Assistant Executive Secretary.[FR Doc. 96–19883 Filed 7–31–96; 2:52 pm]BILLING CODE 6714–01–M

FEDERAL EMERGENCYMANAGEMENT AGENCY

[FEMA–1125–DR]

Indiana; Amendment to Notice of aMajor Disaster Declaration

AGENCY: Federal EmergencyManagement Agency (FEMA).ACTION: Notice.

SUMMARY: This notice amends the noticeof a major disaster for the State ofIndiana, (FEMA–1125–DR), dated July3, 1996, and related determinations.EFFECTIVE DATE: July 23, 1996.

FOR FURTHER INFORMATION CONTACT:Pauline C. Campbell, Response andRecovery Directorate, FederalEmergency Management Agency,Washington, DC 20472, (202) 646–3606.SUPPLEMENTARY INFORMATION: The noticeof a major disaster for the State ofIndiana, is hereby amended to includethe following areas among those areasdetermined to have been adverselyaffected by the catastrophe declared amajor disaster by the President in hisdeclaration of July 3, 1996:

Montgomery and Posey Counties forIndividual Assistance (already designated forPublic Assistance and Hazard Mitigation).(Catalog of Federal Domestic Assistance No.83.516, Disaster Assistance)Dennis H. Kwiatkowski,Deputy Associate Director, Response andRecovery Directorate.[FR Doc. 96–19690 Filed 8–01–96; 8:45 am]BILLING CODE 6718–02–P

[FEMA–1127–DR]

North Carolina; Major Disaster andRelated Determinations


SUMMARY: This is a notice of thePresidential declaration of a majordisaster for the State of North Carolina(FEMA–1127–DR), dated July 18, 1996,and related determinations.EFFECTIVE DATE: July 18, 1996.FOR FURTHER INFORMATION CONTACT:Pauline C. Campbell, Response andRecovery Directorate, FederalEmergency Management Agency,Washington, DC 20472, (202) 646–3606.SUPPLEMENTARY INFORMATION: Notice ishereby given that, in a letter dated July18, 1996, the President declared a majordisaster under the authority of theRobert T. Stafford Disaster Relief andEmergency Assistance Act (42 U.S.C.5121 et seq.), as follows:

I have determined that the damage incertain areas of the State of North Carolina,resulting from severe storms, high wind,flooding, and related effects of HurricaneBertha on July 10–13, 1996, is of sufficientseverity and magnitude to warrant a majordisaster declaration under the Robert T.Stafford Disaster Relief and EmergencyAssistance Act (‘‘the Stafford Act’’). I,therefore, declare that such a major disasterexists in the State of North Carolina.

In order to provide Federal assistance, youare hereby authorized to allocate from fundsavailable for these purposes, such amounts asyou find necessary for Federal disasterassistance and administrative expenses.

You are authorized to provide IndividualAssistance, Public Assistance, and Hazard

Mitigation in the designated areas. Consistentwith the requirement that Federal assistancebe supplemental, any Federal funds providedunder the Stafford Act for Public Assistanceor Hazard Mitigation will be limited to 75percent of the total eligible costs.

The time period prescribed for theimplementation of section 310(a),Priority to Certain Applications forPublic Facility and Public HousingAssistance, 42 U.S.C. 5153, shall be fora period not to exceed six months afterthe date of this declaration.

Notice is hereby given that pursuantto the authority vested in the Director ofthe Federal Emergency ManagementAgency under Executive Order 12148, Ihereby appoint Graham Nance of theFederal Emergency Management Agencyto act as the Federal CoordinatingOfficer for this declared disaster.

I do hereby determine the followingareas of the State of North Carolina tohave been affected adversely by thisdeclared major disaster:

Brunswick, Craven, Jones, New Hanover,Onslow, and Pender Counties for IndividualAssistance, Public Assistance, and HazardMitigation; and

Lenoir County for Individual Assistance.(Catalog of Federal Domestic Assistance No.83.516, Disaster Assistance)James L. Witt,Director.[FR Doc. 96–19692 Filed 8–1–96; 8:45 am]BILLING CODE 6718–02–P

[FEMA–1127–DR]

North Carolina; Amendment to Noticeof a Major Disaster Declaration


SUMMARY: This notice amends the noticeof a major disaster for the State of NorthCarolina, (FEMA–1127–DR), dated July18, 1996, and related determinations.EFFECTIVE DATE: July 26, 1996.FOR FURTHER INFORMATION CONTACT:Pauline C. Campbell, Response andRecovery Directorate, FederalEmergency Management Agency,Washington, DC 20472, (202) 646–3606.SUPPLEMENTARY INFORMATION: The noticeof a major disaster for the State of NorthCarolina, is hereby amended to includethe following area among those areasdetermined to have been adverselyaffected by the catastrophe declared amajor disaster by the President in hisdeclaration of July 18, 1996:

Pamlico County for Individual Assistance(already designated for Public Assistance andHazard Mitigation).


(Catalog of Federal Domestic Assistance No.83.516, Disaster Assistance)Dennis H. Kwiatkowski,Deputy Associate Director, Response andRecovery Directorate.[FR Doc. 96–19693 Filed 8–1–96; 8:45 am]BILLING CODE 6718–02–P

[FEMA–1127–DR]

North Carolina; Amendment to Noticeof a Major Disaster Declaration


SUMMARY: This notice amends the noticeof a major disaster for the State of NorthCarolina, (FEMA–1127–DR), dated July18, 1996, and related determinations.EFFECTIVE DATE: July 22, 1996.FOR FURTHER INFORMATION CONTACT:Pauline C. Campbell, Response andRecovery Directorate, FederalEmergency Management Agency,Washington, DC 20472, (202) 646–3606.SUPPLEMENTARY INFORMATION: The noticeof a major disaster for the State of NorthCarolina, is hereby amended to includethe following areas among those areasdetermined to have been adverselyaffected by the catastrophe declared amajor disaster by the President in hisdeclaration of July 18, 1996:

Beaufort, Carteret, Duplin, Hyde and PittCounties for Individual Assistance, PublicAssistance and Hazard Mitigation.

Lenoir County for Public Assistance andHazard Mitigation (already designated forIndividual Assistance).

Pamlico County for Public Assistance andHazard Mitigation.(Catalog of Federal Domestic Assistance No.83.516, Disaster Assistance)William C. Tidball,Associate Director, Response and RecoveryDirectorate.[FR Doc. 96–19694 Filed 8–1–96; 8:45 am]BILLING CODE 6718–02–P

[FEMA–1122–DR]

Ohio; Amendment to Notice of a MajorDisaster Declaration


SUMMARY: This notice amends the noticeof a major disaster for the State of Ohio(FEMA–1122–DR), dated June 24, 1996,and related determinations.EFFECTIVE DATE: July 25, 1996.FOR FURTHER INFORMATION CONTACT:Pauline C. Campbell, Response andRecovery Directorate, Federal

Emergency Management Agency,Washington, DC 20472, (202) 646–3606.SUPPLEMENTARY INFORMATION: Notice ishereby given that the incident period forthis disaster is May 2, 1996 through andincluding June 24, 1996.(Catalog of Federal Domestic Assistance No.83.516, Disaster Assistance)Dennis H. Kwiatkowski,Deputy Associate Director, Response andRecovery Directorate.[FR Doc. 96–19689 Filed 8–01–96; 8:45 am]BILLING CODE 6718–02–P

[FEMA–1130–DR]

Pennsylvania; Amendment to Notice ofa Major Disaster Declaration


SUMMARY: This notice amends the noticeof a major disaster for theCommonwealth of Pennsylvania,(FEMA–1130–DR), dated July 26, 1996and related determinations.EFFECTIVE DATE: July 26, 1996.FOR FURTHER INFORMATION CONTACT:Pauline C. Campbell, Response andRecovery Directorate, FederalEmergency Management Agency,Washington, DC 20472, (202) 646–3606.SUPPLEMENTARY INFORMATION: The noticeof a major disaster for theCommonwealth of Pennsylvania, ishereby amended to include thefollowing areas among those areasdetermined to have been adverselyaffected by the catastrophe declared amajor disaster by the President in hisdeclaration of July 26, 1996:

Clarion and Jefferson Counties for PublicAssistance (already designated for IndividualAssistance and Hazard Mitigation).(Catalog of Federal Domestic Assistance No.83.516, Disaster Assistance)Dennis H. Kwiatkowski,Deputy Associate Director, Response andRecovery Directorate.[FR Doc. 96–19695 Filed 8–1–96; 8:45 am]BILLING CODE 6718–02–P

[FEMA–1126–DR]

U.S. Virgin Islands; Amendment toNotice of a Major Disaster Declaration


SUMMARY: This notice amends the noticeof a major disaster for the U.S. VirginIslands, (FEMA–1126–DR), dated July11, 1996, and related determinations.

EFFECTIVE DATE: July 23, 1996.FOR FURTHER INFORMATION CONTACT:Pauline C. Campbell, Response andRecovery Directorate, FederalEmergency Management Agency,Washington, DC 20472, (202) 646–3606.SUPPLEMENTARY INFORMATION: The noticeof a major disaster for the U.S. VirginIslands, is hereby amended to includeassistance under the Public Assistanceprogram limited to Category E for repairof public buildings and equipment,Category F for repair of public utilities,and Category G for parks andrecreational facilities in the followingareas:

St. Croix, St. John, and St. Thomas forreimbursement for restoration of publicbuildings, utility systems and parks andrecreational facilities. These islands arealready designated for Individual Assistance,Hazard Mitigation and reimbursement fordebris removal and emergency protectivemeasures under the Public Assistanceprogram.(Catalog of Federal Domestic Assistance No.83.516, Disaster Assistance)Dennis H. Kwiatkowski,Deputy Associate Director, Response andRecovery Directorate.[FR Doc. 96–19691 Filed 8–01–96; 8:45 am]BILLING CODE 6718–02–P

FEDERAL FINANCIAL INSTITUTIONSEXAMINATION COUNCIL

Interagency Policy StatementRegarding Advertising of NOWAccounts

AGENCIES: Office of the Comptroller ofthe Currency (OCC), Department of theTreasury; Board of Governors of theFederal Reserve System (FRB); FederalDeposit Insurance Corporation (FDIC);Office of Thrift Supervision (OTS),Department of the Treasury.ACTION: Withdrawal of statement ofpolicy.

SUMMARY: The OCC, FRB, FDIC, andOTS (the Agencies) are withdrawingtheir joint statement of policy entitled‘‘Interagency policy statement regardingadvertising of Negotiable Order ofWithdrawal (NOW) Accounts’’ (theStatement) on the ground that it isobsolete.EFFECTIVE DATE: The removal of theStatement of Policy is effective August2, 1996.FOR FURTHER INFORMATION CONTACT:OCC: Paul Utterback, National Bank

Examiner, (202/874–5461), 250 EStreet, S.W., Washington, D.C. 20219.

FRB: J. Ericson Heyke III, Staff Attorney,(202/452–3688), 20th and C Streets,N.W., Washington, D.C. 20551.


1 The authorization only applies to certainaccounts, however: namely, those that belong tonatural persons, to nonprofit organizations, and topublic units. See 12 U.S.C. 1832(2).

FDIC: Marc J. Goldstrom, Counsel, (202/898–8807), Legal Division, 550–17thSt., N.W., Washington, D.C. 20429.

OTS: Richard Blanks, (202/906–7037),Counsel (Banking and Finance),Office of Thrift Supervision, 1700 GStreet, N.W., Washington, D.C. 20552.

SUPPLEMENTARY INFORMATION: ‘‘NOWaccounts’’ are, in essence, interest-bearing checking accounts. Federal lawexpressly authorizes depositoryinstitutions to offer such accounts:

* * * [A] depository institution isauthorized to permit the owner of a depositor account on which interest or dividends arepaid to make withdrawals by negotiable ortransferable instruments for the purpose ofmaking transfers to third parties.12 U.S.C. 1832(1).1

At first, Congress only allowed suchwithdrawals to be made inMassachusetts and New Hampshire. Actof August 16, 1973, Public Law 93–100,section 2, 87 Stat. 342. Congressextended this permission to other statesover the next several years. Act ofFebruary 27, 1976, Public Law 94–222,section 2, 90 Stat. 197 (Connecticut,Rhode Island, Maine, and Vermont);Financial Institutions Regulatory andInterest Rate Control Act of 1978, PublicLaw 95–630, section 1301, 92 Stat. 3641,3712 (1978) (New York); Act ofDecember 28, 1979, Public Law 96–161,section 106, 93 Stat. 1233, 1235 (NewJersey). Congress finally discardedgeographic restrictions entirely,effective December 31, 1980. SeeDepository Institutions Deregulationand Monetary Control Act of 1980,Public Law 96–221, section 303, 94 Stat.132, 146 (1980).

During these years, the variousAgencies had well-established and long-standing rules governing the advertisingof interest paid on deposits. SeeRegulation Q, 12 CFR 217.6 (1980)(issued by the FRB, and applicable to allmember banks, including nationalbanks); id. § 329.8 (issued by the FDIC,and applicable to insured statenonmember banks); id. § 526.6 (issuedby the Federal Home Loan Bank Board,and applicable to any member of aFederal Home Loan Bank, except anFDIC-insured savings bank, or aninstitution in Guam) and § 563.27(issued by the Federal Savings and LoanInsurance Corporation, and applicableto all institutions insured by that entity).

The Statement says that it is intendedto ‘‘remind’’ depository institutions that,when they advertise the interest-ratesthat they pay on NOW accounts, they

must comply with these rules. 45 FR67464 (1980).

This aspect of the Statement hasbecome obsolete. Congress has adoptedthe Truth-In-Savings Act (TISA).Federal Deposit Insurance CorporationImprovement Act of 1991, Public Law102–242, 261–74, 105 Stat. 2236, 2334–43 (Dec. 19, 1991); 12 U.S.C. 4301–13.The TISA prescribes statutoryrequirements for the advertisement andpayment of interest on deposits, andcalls for the FRB to issue any necessaryregulations. 12 U.S.C. 4308. The FRBhas responded by adopting RegulationDD, 12 CFR part 230. See 57 FR 43337(1992).

The Agencies have acknowledged thatRegulation DD has superseded theirown advertising rules, and havetherefore rescinded them. See id. 43336(removing the advertising provisions ofRegulation Q); 58 FR 4308 (removing allbut the most general advertisingregulations of the Office of ThriftSupervision); 58 FR 27921 (1993)(repealing the FDIC’s advertisingregulation).

The Statement also provides adviceregarding the advance promotion andadvertisement of NOW accounts bydepository institutions that receivedNOW account authority for the first timeon December 31, 1980. The Statement isobsolete in this respect as well.

The Agencies’ ActionThe Agencies hereby withdraw the

Statement.Dated: July 26, 1996.

Joe M. Cleaver,Executive Secretary, Federal FinancialInstitutions Examination Council.[FR Doc. 96–19555 Filed 8–1–96; 8:45 am]BILLING CODE 6210–01–P

FEDERAL RESERVE SYSTEM

Formations of, Acquisitions by, andMergers of Bank Holding Companies

The companies listed in this noticehave applied to the Board for approval,pursuant to the Bank Holding CompanyAct of 1956 (12 U.S.C. 1841 et seq.)(BHC Act), Regulation Y (12 CFR Part225), and all other applicable statutesand regulations to become a bankholding company and/or to acquire theassets or the ownership of, control of, orthe power to vote shares of a bank orbank holding company and all of thebanks and nonbanking companiesowned by the bank holding company,including the companies listed below.

The applications listed below, as wellas other related filings required by theBoard, are available for immediate

inspection at the Federal Reserve Bankindicated. Once the application hasbeen accepted for processing, it will alsobe available for inspection at the officesof the Board of Governors. Interestedpersons may express their views inwriting on the standards enumerated inthe BHC Act (12 U.S.C. 1842(c)). If theproposal also involves the acquisition ofa nonbanking company, the review alsoincludes whether the acquisition of thenonbanking company complies with thestandards in section 4 of the BHC Act,including whether the acquisition of thenonbanking company can ‘‘reasonablybe expected to produce benefits to thepublic, such as greater convenience,increased competition, or gains inefficiency, that outweigh possibleadverse effects, such as undueconcentration of resources, decreased orunfair competition, conflicts ofinterests, or unsound banking practices’’(12 U.S.C. 1843). Any request fora hearing must be accompanied by astatement of the reasons a writtenpresentation would not suffice in lieu ofa hearing, identifying specifically anyquestions of fact that are in dispute,summarizing the evidence that wouldbe presented at a hearing, and indicatinghow the party commenting would beaggrieved by approval of the proposal.Unless otherwise noted, nonbankingactivities will be conducted throughoutthe United States.

Unless otherwise noted, commentsregarding each of these applicationsmust be received at the Reserve Bankindicated or the offices of the Board ofGovernors not later than August 26,1996.

A. Federal Reserve Bank of Cleveland(R. Chris Moore, Senior Vice President)1455 East Sixth Street, Cleveland, Ohio44101:

1. Merchants Bancorp, Inc., Hillsboro,Ohio; to become a bank holdingcompany by acquiring 100 percent ofthe voting shares of Merchants NationalBank, Hillsboro, Ohio.

2. Wesbanco, Inc., Wheeling, WestVirginia; to acquire 100 percent of thevoting shares of Vandalia NationalCorporation, Morgantown, WestVirginia and thereby indirectly acquireThe National Bank of West Virginia,Morgantown, West Virginia.

Board of Governors of the Federal ReserveSystem, July 29, 1996.Jennifer J. Johnson,Deputy Secretary of the Board.[FR Doc. 96–19641 Filed 8–1–96; 8:45 am]BILLING CODE 6210–01–F


Notice of Proposals to Engage inPermissible Nonbanking Activities orto Acquire Companies that areEngaged in Permissible NonbankingActivities

The company listed in this notice hasgiven notice under section 4 of the BankHolding Company Act (12 U.S.C. 1843)(BHC Act) and Regulation Y, (12 CFRPart 225) to engage de novo, or toacquire or control voting securities orassets of a company that engages eitherdirectly or through a subsidiary or othercompany, in a nonbanking activity thatis listed in § 225.25 of Regulation Y (12CFR 225.25) or that the Board hasdetermined by Order to be closelyrelated to banking and permissible forbank holding companies. Unlessotherwise noted, these activities will beconducted throughout the United States.

The notice is available for inspectionat the Federal Reserve Bank indicated.Once the notice 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 the proposal complieswith the standards of section 4 of theBHC Act, including whetherconsummation of the proposal can‘‘reasonably be expected to producebenefits to the public, such as greaterconvenience, increased competition, orgains in efficiency, that outweighpossible adverse effects, such as undueconcentration of resources, decreased orunfair competition, conflicts ofinterests, or unsound banking practices’’(12 U.S.C. 1843). 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 application must bereceived at the Reserve Bank indicatedor the offices of the Board of Governorsnot later than August 16, 1996.

A. Federal Reserve Bank ofMinneapolis (James M. Lyon, VicePresident) 250 Marquette Avenue,Minneapolis, Minnesota 55480:

1. Otto Bremer Foundation, St. Paul,Minnesota; and Bremer FinancialCorporation, St. Paul Minnesota, toacquire the lease servicing program andrelated assets of CFS Financial Corp.,Minnetonka, Minnesota, pursuant to §225.25(b)(5) of the Board’s Regulation Y.This activity will be conducted by

Notificants through a wholly-ownednonbank subsidiary, Bremer BusinessFinance Corporation, St. Paul,Minnesota.

Board of Governors of the Federal ReserveSystem, July 29, 1996.Jennifer J. Johnson,Deputy Secretary of the Board.[FR Doc. 96–19642 Filed 8-1-96; 8:45 am]BILLING CODE 6210-01-F

Sunshine Act Meeting

AGENCY HOLDING THE MEETING: Board ofGovernors of the Federal ReserveSystem.TIME AND DATE: 10:00 a.m., Wednesday,August 7, 1996.PLACE: Marriner S. Eccles FederalReserve Board Building, C Streetentrance between 20th and 21st Streets,N.W., Washington, D.C. 20551.STATUS: Open.MATTERS TO BE CONSIDERED:1. Proposed amendments to the Federal

Reserve Board’s risk-based capitalguidelines to incorporate a measure formarket risk in foreign exchange andcommodity activities and in the trading ofdebt and equity instruments (proposedearlier for public comment; Docket No. R–0884).

2. Any items carried forward from apreviously announced meeting.Note: This meeting will be recorded for the

benefit of those unable to attend. Cassetteswill be available for listening in the Board’sFreedom of Information Office, and copiesmay be ordered for $5 per cassette by calling(202) 452–3684 or by writing to: Freedom ofInformation Office, Board of Governors of theFederal Reserve System, Washington, D.C.20551.

CONTACT PERSON FOR MORE INFORMATION:Mr. Joseph R. Coyne, Assistant to theBoard; (202) 452–3204.

Dated: July 31, 1996.Jennifer J. Johnson,Deputy Secretary of the Board.[FR Doc. 96–19795 Filed 7–31–96; 10:05 am]BILLING CODE 6210–01–P

Sunshine Act Meeting

AGENCY HOLDING THE MEETING: Board ofGovernors of the Federal ReserveSystem.TIME AND DATE: Approximately 11:00a.m., Wednesday, August 7, 1996,following a recess at the conclusion ofthe open meeting.PLACE: Marriner S. Eccles FederalReserve Board Building, C Streetentrance between 20th and 21st Streets,N.W., Washington, D.C. 20551.STATUS: Closed.

MATTERS TO BE CONSIDERED:1. Personnel actions (appointments,

promotions, assignments, reassignments,and salary actions) involving individualFederal Reserve System employees.

2. Any items carried forward from apreviously announced meeting.

CONTACT PERSON FOR MORE INFORMATION:Mr. Joseph R. Coyne, Assistant to theBoard; (202) 452–3204. You may call(202) 452–3207, beginning atapproximately 5 p.m. two business daysbefore this meeting, for a recordedannouncement of bank and bankholding company applicationsscheduled for the meeting.

Dated: July 31, 1996.Jennifer J. Johnson,Deputy Secretary of the Board.[FR Doc. 96–19796 Filed 7–31–96; 10:06 am]BILLING CODE 6210–01–P


Centers for Disease Control andPrevention

[INFO–96–19]

Proposed Data Collections Submittedfor Public Comment andRecommendations

In compliance with the requirementof Section 3506(c)(2)(A) of thePaperwork Reduction Act of 1995 foropportunity for public comment onproposed data collection projects, theCenters for Disease Control andPrevention (CDC) will publish periodicsummaries of proposed projects. Torequest more information on theproposed projects or to obtain a copy ofthe data collection plans andinstruments, call the CDC ReportsClearance Officer on (404) 639–7090.

Comments are invited on: (a) Whetherthe proposed collection of informationis necessary for the proper performanceof the functions of the agency, includingwhether the information shall havepractical utility; (b) the accuracy of theagency’s estimate of the burden of theproposed collection of information; (c)ways to enhance the quality, utility, andclarity of the information to becollected; and (d) ways to minimize theburden of the collection of informationon respondents, including through theuse of automated collection techniquesfor other forms of informationtechnology. Send comments to WilmaJohnson, CDC Reports Clearance Officer,1600 Clifton Road, MS–D24, Atlanta,GA 30333. Written comments should bereceived within 60 days of this notice.


Proposed Projects

1. National Disease SurveillanceProgram—II. Disease Summaries (0920–0004)—Reinstatement—Surveillance ofthe incidence and distribution ofdisease has been an important functionof the U.S. Public Health Service since1878. Through the years, PHS/CDC hasformulated practical methods of diseasecontrol through field investigations. TheCDC surveillance program is based onthe premise that diseases cannot bediagnosed, prevented or controlled untilexisting knowledge is expanded andnew ideas developed and implemented.Over the years the mandate of CDC hasbroadened to include preventive healthactivities and the surveillance systemsmaintained have expanded. This

surveillance program is authorizedunder the provisions of Section 301 ofthe Public Health Service Act.

Data on disease and preventableconditions are collected in accordancewith jointly approved plans by CDC andthe Council of State Territorial HealthEpidemiologists. Changes in thesurveillance program and in reportingmethods are effected in the samemanner. At the onset of this surveillanceprogram in 1968, the CSTE and CDCdecided on which diseases warrantedsurveillance. These diseases arereviewed and revised based onvariations in the public health.Surveillance forms are distributed to theState and local health departments whovoluntarily submit these reports to CDCon variable frequencies, either weekly or

monthly. CDC then calculates andpublishes weekly statistics via theMMWR, providing the states withtimely aggregates of their submissions.

The following diseases/conditions areincluded in this program: Influenzavirus, respiratory and enterovirus,arboviral encephalitis, rabies,salmonella, campylabacter, shigella,foodborne outbreaks, waterborneoutbreaks, and enteric virus. Thisrequest is for extension of the datacollection for three years with minorrevisions. A new form has been addedfor Enteric Virus Surveillance tomonitor national patterns in theepidemiology of rotovirus.

Increased use of electronicsubmission will reduce the burdenduring the next three years.

Respondents No. of re-spondents

No. of re-sponses/re-spondent

Avg. bur-den/re-

sponse (inhrs.)

Total bur-den (in hrs.)

State/Local health department staff ................................................................................. 864 28 0.25 6048

Dated: July 29, 1996.Wilma G. Johnson,Acting Associate Director for Policy Planningand Evaluation, Centers for Disease Controland Prevention (CDC).[FR Doc. 96–19646 Filed 8–1–96; 8:45 am]BILLING CODE 4163–18–P

Health Care Financing Administration

Agency Information CollectionActivities: Proposed Collection;Comment Request

AGENCY: Health Care FinancingAdministration, HHS.

In compliance with the requirementof section 3506(c)(2)(A) of thePaperwork Reduction Act of 1995, theHealth Care Financing Administration(HCFA), Department of Health andHuman Services, is publishing thefollowing summaries of proposedcollections for public comment.Interested persons are invited to sendcomments regarding this burdenestimate or any other aspect of thiscollection of information, including anyof the following subjects: (1) Thenecessity and utility of the proposedinformation collection for the properperformance of the agency’s functions;(2) the accuracy of the estimatedburden; (3) ways to enhance the quality,utility, and clarity of the information tobe collected; and (4) the use ofautomated collection techniques orother forms of information technology to

minimize the information collectionburden.

1. Type of Information CollectionRequest: Reinstatement, without change,of previously approved collection forwhich approval has expired; Title ofInformation Collection: AmbulatorySurgical Center (ASC) Request forCertification and Survey Report andSupporting Regulation 42 CFR 416;Form No.: HCFA–377, HCFA–378; Use:The HCFA–377 is the application usedan ASC wanting to participate in theMedicare program. The HCFA–378 isthe survey form used by State surveyagencies to determine ASC compliancewith individual conditions of coverage.42 CFR 416 is the regulation supportingthe data collected on the HCFA–377 andHCFA–378; Frequency: Annually;Affected Public: State, local, or tribalgovernments, business or other for-profit, not-for-profit institutions;Number of Respondents: 1,900; TotalAnnual Responses: 1,900; Total AnnualHours: 475.

2. Type of Information CollectionRequest: Reinstatement, without change,of previously approved collection forwhich approval has expired; Title ofInformation Collection: MedigapComplaint Database and SupportingRegulation 42 CFR 403.210 (b); FormNo.: HCFA–R–156; Use: The Medigapdatabase is maintained by the NationalAssociation of InsuranceCommissioners, which in turn, sendsthe Medigap-relevant data to HCFA. Theinformation is used to monitor State

handling of Medigap related complaints;Frequency: Quarterly; Affected Public:Business or other for-profit; Number ofRespondents: 1; Total AnnualResponses: 4; Total Annual Hours: 160.

3. Type of Information CollectionRequest: Reinstatement, without change,of previously approved collection forwhich approval has expired; Title ofInformation Collection: ProviderOverpayment Report and SupportingRegulations 42 CFR 405.370, 405.374,405.376; Form No.: HCFA–481; Use:This report is completed daily byMedicare intermediaries and submittedto HCFA. It lists provider overpaymentinformation and shows whether or notan intermediary is taking prompt andaggressive action to recover suchoverpayments, in accordance withapplicable laws and regulations;Frequency: Daily; Affected Public:Federal government, business or otherfor-profit, not-for-profit institutions;Number of Respondents: 61; TotalAnnual Responses: 36,600; TotalAnnual Hours: 3,300.

4. Type of Information CollectionRequest: New collection; Title ofInformation Collection: HospitalStandard for Potentially HIV InfectiousBlood and Blood Products InformationCollection Requirements Contained in42 CFR 482.27 (c)(2), (c)(4), (c)(7) ; FormNo.: HCFA–R–190; Use: Hospitals mustestablish policies/procedures anddocument patient notification efforts ifthey have administered potentially HIVinfectious blood and blood products.


Frequency: On occasion; AffectedPublic: Business or other for-profit andnot-for-profit institutions; Number ofRespondents: 16; Total AnnualResponses: 16; Total Annual HoursRequested: 16.

To obtain copies of the supportingstatement for the proposed paperworkcollections referenced above, accessHCFA’s WEB SITE ADDRESS at http://www.hcfa.gov, or to obtain thesupporting statement and any relatedforms, E-mail your request, includingyour address and phone number, [email protected], or call the ReportsClearance Office on (410) 786–1326.Written comments andrecommendations for the proposedinformation collections must be mailedwithin 60 days of this notice directly tothe HCFA Paperwork Clearance Officerdesignated at the following address:HCFA, Office of Financial and HumanResources, Management Planning andAnalysis Staff, Attention: John Burke,Room C2–26–17.

Dated: July 24, 1996.Edwin J. Glatzel,Director, Management Planning and AnalysisStaff, Office of Financial and HumanResources, Health Care FinancingAdministration.[FR Doc. 96–19629 Filed 8–1–96; 8:45 am]BILLING CODE 4120–03–P

National Institutes of Health

National Institute of EnvironmentalHealth Sciences; Notice of a ClosedMeeting

Pursuant to Section 10(d) of theFederal Advisory Committee Act, asamended (5 U.S.C. Appendix 2), noticeis hereby given of the followingNational Institute of EnvironmentalHealth Sciences Special Emphasis Panel(SEP) meeting:

Name of SEP: The Use of TransgenicModel Systems in Molecular Toxicology(Telephone Conference Call).

Date: July 30, 1996.Time: 4:00 p.m.Place: National Institute of Environmental

Health Sciences, South Campus, Building 17,Room 1713, Research Triangle Park, NC.

Contact Person: Dr. Carol Shreffler,National Institute of Environmental HealthSciences, P.O. Box 12233, Research TrianglePark, NC 27709, (919) 541–1445.

Purpose/Agenda: To review and evaluateone grant application.

The meeting will be closed in accordancewith the provisions set forth in sections552b(c)(4) and 552b(c)(6), Title 5, U.S.C.Applications and the discussions couldreveal confidential trade secrets orcommercial property such as patentablematerial and personal informationconcerning individuals associated with the

applications, the disclosure of which wouldconstitute a clearly unwarranted invasion ofpersonal privacy.

This notice is being published less thanfifteen days prior to this meeting due to theurgent need to meet timing limitationsimposed by the grant review and fundingcycle.(Catalog of Federal Domestic AssistancePrograms Nos. 93.113, Biological Response toEnvironmental Agents; 93.114, AppliedToxicological Research and Testing; 93.115,Biometry and Risk Estimation; 93.894,Resource and Manpower Development,National Institutes of Health)

Dated: July 26, 1996.Susan K. Feldman,Committee Management Officer, NIH.[FR Doc. 96–19638 Filed 8–1–96; 8:45 am]BILLING CODE 4140–01–M

National Institute of EnvironmentalHealth Services; Notice of ClosedMeeting

Pursuant to Section 10(d) of theFederal Advisory Committee Act, asamended (5 U.S.C. Appendix 2), noticeis hereby given of the followingNational Institute of EnvironmentalHealth Services Special Emphasis Panel(SEP) meeting:

Name of SEP: Determination of GeneticSusceptibility to Lung Cancer in Familiesfrom Southern Louisiana (TelephoneConference Call).

Date: August 7, 1996.Time: 1:00 p.m.Place: National Institute of Environmental

Health Science, North Campus, Rm. 1719,Research Triangle Park, NC 27709.

Contact Person: Mr. David P. Brown,National Institute of Environmental HealthSciences, P.O. Box 12233, Research TrianglePark, NC 27709, (919) 541–4964.

Purpose/Agenda: To review and evaluateproposals.

The meeting will be closed inaccordance with the provisions set forthin sections 552b(c)(4) and 552b(c)(6),Title 5, U.S.C. Grant applications andproposals and the discussions couldreveal confidential trade secrets orcommercial property such as patentablematerial and personal informationconcerning individuals associated withthe applications, the disclosure ofwhich would constitute a clearlyunwarranted invasion of personalprivacy.

This notice is being published lessthan 15 days prior to the meeting dueto the urgent need to meet timinglimitations imposed by the review andfunding cycle.(Catalog of Federal Domestic AssistancePrograms Nos. 93.113, Biological Response toEnvironmental Agents; 93.114, AppliedToxicological Research and Testing; 91.115,Biometry and Risk Estimation; 93.894,

Resource and Management Development,National Institutes of Health)


Division of Research Grants; Notice ofClosed Meetings

Pursuant to Section10(d) of theFederal Advisory Committee Act, asamended (5 U.S.C. Appendix 2), noticeis hereby given of the following Divisionof Research Grants Special EmphasisPanel (SEP) meetings:

Purpose/Agenda: To review individualgrant applications.

Name of SEP: Chemistry and RelatedSciences.

Date: August 7–9, 1996.Time: 12:00 p.m.Place: Sheraton Mayfair, Milwaukee, WI.Contact Person: Dr. Asher Hyatt, Scientific

Review Administrator, 6701 Rockledge Drive,Room 4160, Bethesda, Maryland 20892, (301)435–1724.

Name of SEP: Biological and PhysiologicalSciences.

Date: August 8, 1996.Time: 1:00 p.m.Place: NIH, Rockledge 2, Room 4206,

Telephone Conference.Contact Person: Dr. Betty Hayden,

Scientific Review Administrator, 6701Rockledge Drive, Room 4206, Bethesda,Maryland 20892, (301) 435–1223.

Name of SEP: Clinical Sciences.Date: August 13, 1996.Time: 1:00 p.m.Place: NIH, Rockledge 2, Room 4214,

Telephone Conference.Contact Person: Dr. Dan McDonald,



Date: August 16, 1996.Time: 8:00 a.m.Place: Holiday Inn, Chevy Chase, MD.Contact Person: Dr. Krish Krishnan,


This notice is being published lessthan 15 days prior to the above meetingsdue to the urgent need to meet timinglimitations imposed by the grant reviewand funding cycle.


Date: August 19, 1996.Time: 9:30 a.m.Place: NIH, Rockledge 2, Room 5200,

Telephone Conference.Contact Person: Dr. Robert Weller,



Name of SEP: Behavioral andNeurosciences.

Date: August 20, 1996.Time: 9:00 a.m.Place: Embassy Suites Hotel, Washington,

DC.Contact Person: Dr. Joseph Kimm,


Name of SEP: Chemistry and RelatedSciences.


Telephone Conference.Contact Person: Dr. Zakir Bengali,


Name of SEP: Microbiological andImmunological Sciences.


Telephone Conference.Contact Person: Dr. Gerald Liddel,


Name of SEP: Clinical Sciences.Date: August 26, 1996.Time: 1:00 p.m.Place: NIH, Rockledge 2, Room 4138,

Telephone Conference.Contact Person: Dr. Anthony Chung,



Date: August 28, 1996.Time: 1:00 p.m.Place: NIH, Rockledge 2, Room 5196,

Telephone Conference.Contact Person: Ms. Carol Campbell,


Name of SEP: Microbiological andImmunological Sciences.

Date: October 25, 1996.Time: 1:00 p.m.Place: NIH, Rockledge 2, Room 4200,

Telephone Conference.Contact Person: Dr. Gilbert Meier,


The meetings will be closed inaccordance with the provisions set forthin sections 552b(c)(4) and 552b(c)(6),Title 5, U.S.C. Applications and/orproposals and the discussions couldreveal confidential trade secrets orcommercial property such as patentablematerial and personal informationconcerning individuals associated withthe applications and/or proposals, thedisclosure of which would constitute aclearly unwarranted invasion ofpersonal privacy.

(Catalog of Federal Domestic AssistanceProgram Nos. 93.306, 93.333, 93.337, 93.393–93.396, 93.837–93.844, 93.846–93.878,93.892, 93.893, National Institutes of Health,HHS)




RIN 1094–AA–45

Use of Alternative Dispute Resolution

AGENCY: Office of the Secretary.ACTION: Notice of final AlternativeDispute Resolution Policy andopportunity for comment.

SUMMARY: The Department of theInterior (Department) has developed thisfinal Alternative Dispute Resolution(ADR) policy (Final ADR Policy) toimplement a comprehensive programwithin each of its bureaus and offices(bureaus). This Final ADR Policy alsoaddresses the Negotiated RulemakingAct, Public Law No. 101–648. TheDepartment is adopting this Final ADRPolicy to apply tested practices andtechniques to selected programdisputes. The Department, through itsbureaus, will implement ADR pilotprograms and other program initiativesin an effort to establish a baseline ofexperience in the practical uses of ADR.The Department will continue to assessthe results of the ADR initiatives inconjunction with both external andinternal comments received, afterpublication of a Final ADR Policy in theFederal Register. The Department seekscomments from the public, including,among others, those persons whoseactivities the Department regulates, onany aspect of this Final ADR Policy andits implementation, and those personswho have engaged in or may in thefuture engage in ADR processes with theDepartment. At the end of the 60-daycomment period, the Department willconsider issues raised by interestedpersons and may modify the Final ADRPolicy based on public comment.DATES: Comments must be received onor before October 1, 1996.ADDRESSES: Written comments shouldbe mailed or delivered to James P. Terry,Deputy Director, Office of Hearings andAppeals, U.S. Department of theInterior, 4015 Wilson Boulevard,Arlington, Virginia 22203.FOR FURTHER INFORMATION CONTACT:

James P. Terry, Deputy Director, and theAlternate Dispute Resolution Specialist,OHA (703) 235–3810.


I. Department of the Interior Policy onADR

The Department’s ADR policy, firstpromulgated June 13, 1994, as aninterim ADR policy for a period of 2years, authorized and encouragedbureaus within the Department toemploy consensual methods of disputeresolution as alternatives to litigation.59 FR 30368. Under the Interim ADRPolicy, bureaus were required: (1) Todesignate a senior official as a BureauDispute Resolution Specialist (BDRS);(2) to establish training programs in theuse of dispute resolution methods; (3) toadopt a plan on the use of ADRtechniques; and (4) to review thestandard language in bureau contracts,grants, or other agreements, todetermine whether to include aprovision on ADR. Bureaus were alsorequired to consult with theDepartment’s Dispute ResolutionCouncil (IDRC) on the implementationof their ADR plans.

Additionally, the Interim ADR Policyrequired each bureau to adopt a formalpolicy as to how it intended toimplement ADR in each of the followingareas: (a) Formal and informaladjudications; (b) rulemakings; (c)Enforcement actions; (d) issuing andrevoking licenses or permits; (e)Contract administration; (f) Litigationbrought by or against the Department;and (g) other Departmental action.

The Secretary promulgated theInterim ADR Policy to reduce the time,cost, inefficiencies, and contentiousnessthat are too often associated withlitigation and other adversarial disputemechanisms. Moreover, experience atother Federal agencies has demonstratedthat ADR can help achieve mutuallyacceptable solutions to disputes moreeffectively than either litigation oradministrative adjudication. In fact,Vice President Al Gore recommended inSeptember 1993 that Federal agencies‘‘increase the use of alternative means ofdispute resolution.’’ NationalPerformance Review, RecommendationREG06 (Sept. 7, 1993).

While ADR techniques have proven tobe useful in resolving serious conflicts,the day-to-day operations of theDepartment’s bureaus should alsoprovide conflict avoidance methods,wherever possible. Moreover, theInterim ADR Policy, specificallycautioned that:

[A bureau] shall consider not using adispute resolution proceeding if—


(1) A definitive or authoritative resolutionof the matter is required for precedentialvalue, and such a proceeding is not likely tobe accepted generally as an authoritativeprecedent;

(2) The matter involves or may bear uponsignificant questions of Government policythat require additional procedures before afinal resolution may be made, and such aproceeding would not likely serve to developa recommended policy for the [bureau];

(3) Maintaining established policies is ofspecial importance, so that variations amongindividual decisions are not increased andsuch a proceeding would not likely reachconsistent results among individualdecisions;

(4) The matter significantly affects personsor organizations who are not parties to theproceeding;

(5) A full public record of the proceedingis important, and a dispute resolutionproceeding cannot provide such a record;and

(6) The [bureau] must maintain continuingjurisdiction over the matter with authority toalter the disposition of the matter in the lightof changed circumstances, and a disputeresolution proceeding would interfere withthe [bureau’s] fulfilling that requirement.

The decision whether to use ADR,however, remains within each bureau’sdiscretion, and participation in ADRprocesses is by mutual consent of thedisputants.

The Interim ADR Policy fostered theuse of ADR by ensuring appropriateprotection of parties’ and neutrals’communication. The ADR policy,however, is not a statute exemptingdisclosure under the Freedom ofInformation Act (FOIA). 5 U.S.C. 552.To establish a baseline ofunderstanding, concerned partiesshould establish confidentialityguidelines consistent with FOIArequirements before entering intonegotiations.

Within the limitations set forth in theInterim ADR Policy, and elsewhere, theDepartment plans to establish, in theFinal ADR Policy, those contexts inwhich the use of ADR facilitates fairer,faster, or more rational resolutions ofdisputes than present dispute resolutionmethods provide. Additionally, theDepartment will continue to review theFinal ADR Policy. On the basis of thisevaluation, the Department willconsider modifying any of its currentprocedures or rules in the future, asappropriate, to allow for greater use ofADR.

II. Negotiated Rulemaking Act

In enacting the NegotiatedRulemaking Act, Public Law No. 101–648, Congress indicated its concern thattraditional notice and commentrulemaking procedures may discourageagreement among the potentially

affected parties and the FederalGovernment. Congress addressed thisconcern by purposefully designing theNegotiated Rulemaking Act’sprocedures to facilitate the cooperativedevelopment of regulations byinterested persons and agencies.Moreover, Vice President Gore’s reportrecently recommended improvingagencies’ regulatory systems by‘‘[e]ncourag[ing] agencies to usenegotiated rulemaking more frequentlyin developing new rules.’’ NationalPerformance Review, RecommendationREG03 (1993).

Negotiated rulemaking (Reg-Neg) doesnot replace the traditional notice andopportunity for public commentrulemaking. Rather, Reg-Negsupplements the more traditionalprocess by developing consensusaround the candidate proposed rulebefore an agency publishes it in theFederal Register. Combining earlyconsensus-building and information-gathering with an opportunity for broadpublic consideration, the Reg-Negprocess meets the prescription of theAdministrative Procedure Act, 5 U.S.C.551 et seq., and can facilitate moreeffective regulatory development andregulations. Moreover, on September 30,1993, President Bill Clinton issued amemorandum in conjunction with theissuance of Exec. Order No. 12866 onregulatory planning and review. Thememorandum required each Departmentto identify to the Office of Informationand Regulatory Affairs at least onerulemaking within the upcoming year tobe developed through Reg-Negrulemaking or to explain why negotiatedrulemaking would not be feasible, 58 FR52391 (Oct. 7, 1993).

Decisionmakers should view Reg-Negas one of a variety of information-gathering and consensus-building orconsultative processes used to achieveeffective, efficient, rational, and fairagency policy. Although the NegotiatedRulemaking Act does not address lessformal decisionmaking processes,including, among others, policyroundtables and public meetings, suchnonadversarial processes may helpgather information to assist theDepartment in policy development.

Participation in informal regulatorydevelopment processes can requiresignificant commitment of resources onthe part of all participants, includingFederal agencies. The Department’sexperience, however, has shown thatconsensus-building techniques canresult in better policy, reduce the highrate of litigation, and lower the costs ofprogram implementation for theDepartment’s bureaus and the regulatedcommunity.

III. Final Policy

A. Application of the Final ADR PolicyThe Department encourages the

effective use of ADR and Reg-Neg to thefullest extent compatible with existinglaw, and the Department’s resources andmissions. Based on long experience, theDepartment recognizes that the use ofconsensus-building techniques andnonadversarial planning processes canincrease the wisdom, efficiency, equity,and long-term stability of Departmentaldecisions.

The Final ADR Policy is intended togovern both the programmatic side ofthe Department’s broad responsibility,as well as many of the human resourcesaspects. With regard to humanresources, the Final ADR Policyembraces the ADR policy of theDepartment’s Office for EqualOpportunity. The use of ADR isexpected to be very useful in mattersinvolving equal employmentopportunity. Workplace dispute issuesbeyond those governed by regulationsissued by the Merit Systems ProtectionBoard will also be governed by thispolicy. Where the use of ADR wouldimpede effective supervisory action inroutine matters of employee disciplineor performance appraisal, supervisorsmay elect not to use ADR.

B. Purpose of the Final ADR PolicyThe Department has developed this

Final ADR Policy in response to theexperience gained under the InterimADR Policy. The Final ADR Policyencourages the Department’s bureaus tocontinue to identify disputes amenableto ADR and to use ADR, wheneverpracticable. After testing ADR methodsin a variety of contexts during the 2-yearinterim period, the Department, throughthe IDRC, has assessed theappropriateness of the use of ADR anddetermined which program areas couldmost benefit from theinstitutionalization of ADR processes.Existing bureau ADR efforts shouldcontinue as this final policy isimplemented.

The Department’s Final ADR Policy isalso designed to disseminate knowledgeabout ADR both within the Departmentand to those whom the Departmentserves, as well as to introduce new ADRinitiatives and to provide guidelines forbureaus to apply in the implementationof ADR pilot programs. These initiativeswill produce a baseline of experiencethat will be useful in successfullyimplementing the Department’s FinalADR Policy. Without the fullcommitment and cooperation of allbureaus, the Department will lose avaluable opportunity to learn what


works, what does not, and how best tocapture potential benefits from ADRuse.

C. Implementation of the Final ADRPolicy

1. Role of the Department’s DisputeResolution Specialist

Pursuant to the guidance promulgatedby the Secretary in the June 13, 1994,Interim ADR Policy, the Director, Officeof Hearings and Appeals (OHA), wasappointed to serve as the Department’sDispute Resolution Specialist (DRS).This high level, Department official wasappointed as the DRS in order: (1) Tofacilitate intra-Departmentalcoordination and communication; (2) toensure consistent, quality training; (3) toestablish minimum qualifications formediators, arbitrators, and certainDepartmental employees with ADRresponsibilities; and (4) to reduceadministrative redundancy. Under theFinal ADR Policy, the Director, OHA,will continue these responsibilities. TheDRS will maintain an ‘‘open door’’policy, welcoming inquiries from andoffering assistance to the bureaus andinterested persons. During the periodthat the Final ADR Policy is beingimplemented, ongoing input from thepublic is encouraged. Despite this focalpoint for ADR activity, the Department’sFinal ADR Policy encouragesdecentralized decisionmaking to thegreatest extent possible.

2. Role of IDRC

In order to keep the Department’sbureaus informed during theimplementation of the Final ADRPolicy, the DRS shall, within 120 daysafter publication of the Department finalpolicy, convene the IDRC to addressprogress by the bureaus inimplementing their ADR programs.Composed of the Department’s AssistantSecretaries, Solicitor, and the Director ofthe Office of Regulatory Affairs (ORA),or their respective designees, andchaired by the DRS, the IDRC shallmonitor and evaluate the Department’suse of ADR and Reg-Neg and assist inintra-Departmental policy and processcoordination. The IDRC shall act as aninformation clearinghouse, recommendpersonnel training courses in ADRtechniques and program design, and actas the liaison between the Departmentand the Federal Mediation andConciliation Service.

3. Training in ADR

The Department recognizes,consistent with the philosophy of theNational Performance Review, thatbureaus can best evaluate and develop

specific ADR programs and initiatives tomeet bureau needs. Therefore, eachbureau head has appointed a BDRS. TheBDRSs have been trained in ADRconsensus-building techniques, conflictresolution, and program design.

The DRS recommended appropriateBDRS training, with such trainingcompleted during the interim policyperiod. Additionally, the DRS shallprovide ADR training opportunities forselected groups of senior managers ofthe Department, whose jobresponsibilities include determining orinfluencing how disputes will bemanaged. The DRS will also identifyopportunities for advanced training infacilitation and mediation for Judgesand attorneys within OHA, asappropriate.

4. Implementation of Bureau ADR PlansThe BDRS shall fully implement the

bureau’s alternate dispute resolutionplan (ADRP) in the 12 months followingpromulgation of the Final ADR Policy.To facilitate the monitoring andevaluation of the bureau’s initiative(s),the BDRS should address, in his/heryearly review, among other topics, the:(1) goals; (2) objectives; (3) timetables;(4) implementation strategy; (5)monitoring criteria; and (6) evaluationmethodology. It is permissible if two ormore bureaus adopt the same objectivesand goals.

In selecting appropriate ADR pilotinitiatives, the bureaus have focused, forexample, on a particular category ofdispute (e.g., contract cases), on avariety of disputes involving aparticular organizational segment orregion of the agency, or on a particularADR process that would be applied ina variety of disputes across the bureau.In selecting a focus for an ADR pilotinitiative, the Department hasencouraged bureaus to consider usingsome of the disputes that are central tothe Department’s mission. Whilebureaus have been advised not to avoididentifying personnel and small contractdisputes, for example, as candidates fora pilot initiative, they have beenencouraged not to focus exclusively onthese areas so that the effectiveness ofADR for a bureau can be judged in aprogrammatic context.

Some offices of the Department, suchas the Office of the Solicitor, areassisting bureaus in carrying out theirprograms rather than conductingprograms of their own. For the purposesof this policy, such offices should assistbureaus in implementing ADR in aprogrammatic context.

Consistent with the many activitiesand functions of the Department and theFederal Acquisition Regulations’

recognition of the usefulness of ADR inGovernment contracts, each BDRS, orappointed designee, should reviewcategories of all proposed new andrenewal contracts, agreements, permits,memoranda of understanding, and otherdocuments, to determine whether toinclude ADR provisions. Moreover, theDepartment encourages the use of ADRin contact disputes prior to thesedisputes reaching the Interior Board ofContract Appeals. To avoid duplicationof effort by bureau personnel, the Officeof the Solicitor, working with theDepartment’s senior procurementofficial, will develop standardized ADR-related clauses that bureaus can use incontracts and other documents.

The Department expects, as well, thatthose bureaus with comparatively moredispute resolution experience will, on avoluntary basis, assist bureaus lessfamiliar with dispute resolution in thedevelopment of the ADRP. TheDepartment expects, as well, that inter-bureau initiatives such as ‘‘one stoppermitting,’’ for example, becoordinated with a BDRS. Each BDRSand others involved with theimplementation of the final policy areencouraged to consult with otherFederal agencies, and others in thedispute resolution field in thedevelopment of their ADR initiatives.The DRS is available to provide thenames of contact persons within variousFederal agencies who have effectivelyutilized ADR methods in resolvingdisputes.

Judges within OHA have beenencouraged to utilize, whereappropriate, ADR methods, including,among others, the use of settlementjudges, minitrials, and the referral oflitigants to mediation or arbitration inadvance of a judge’s consideration of acase on the merits.

D. Monitoring and EvaluationEach BDRS shall monitor the

implementation of his or her bureau’sdispute resolution initiatives on anongoing basis, using the criteriadeveloped in their ADRP. Each BDRSshall submit to the IDRC, through theproper bureau head and AssistantSecretary, every year, an evaluation ofthe bureau’s progress toward meetingthe goals, objectives, and timetables onthe basis of the methodology outlined inthe ADRP. The evaluation should alsodiscuss any unanticipated issues thateach bureau may have encountered andhow those issues have been or are beingresolved.

A BDRS, in conjunction with theIDRC, shall catalogue and evaluate thebureaus’ respective initiatives andexperiences under their ADRP in its


yearly report to the Secretary. Thisevaluation, coordinated by the DRS, aschair of the IDRC, will focus on thecategories of disputes and types of DRmethods that were most helpful inachieving resolution of disputes.

Moreover, because the usefulness ofADR to the Department is dependent onthe processes’ ability to facilitaterational, fair, efficient, and stablesolutions among the Department’sbureaus, the regulated community, andthe public, evaluation of the final policyshould receive the benefit of publiccomment and participation. Aconcluding section of the evaluationshould explain how dispute resolutionis being integrated on a permanent basisinto each bureau’s program offices. Thisprocess of review, evaluation, andmodification will allow each bureau tosystematically and regularly improve itsADR programs.

E. Negotiated Rulemaking

Pursuant to Exec. Order No. 12866and the Presidential memorandum onnegotiated rulemaking, issuedSeptember 30, 1993, the Departmentwill use, where appropriate, Reg-Neg orother consensus-building techniques todevelop rules that are fair, technicallyaccurate, and clear. Each bureau willevaluate, prior to drafting or amendingany regulation, whether Reg-Neg isappropriate for developing or amendingthat regulation and will explain, on theregulatory alert form submitted to theORA, the basis for determining whetheror not the regulation will be developedor amended using Reg-Neg.

In explaining whether Reg-Neg shouldbe used for a particular rulemaking,each bureau should address at least thefollowing:

(1) Whether there exists a small andidentifiable group of constituents (the‘‘parties’’) with significant interests inthe rulemaking, so that all reasonablyforeseeable significant interests can berepresented by individuals in thenegotiation;

(2) Whether the parties believe it to bein their best interest to enter into anegotiated rulemaking;

(3) Whether the parties are willingand able to enter into negotiatedrulemaking in good faith;

(4) Whether any single party has, oris perceived to have, the ability todominate negotiations, thereby making acompromise solution unlikely;

(5) Whether there are clear andidentifiable issues that are agreed to beripe for a negotiated solution;

(6) Whether a negotiated solutionwould require one or more parties tocompromise a fundamental value;

(7) Whether the use of negotiatedrulemaking is reasonably likely to resultin an agreement or course of actionsatisfactory to all parties; and

(8) Whether there are legal deadlinesor other legal issues that either mitigateagainst negotiation or provideincentives to reach a negotiatedsolution.

If a bureau has decided to enter intoa negotiated rulemaking, it will preparea brief report describing the goals,objectives, anticipated parties, andprojected timetables of the negotiation.Throughout the negotiation, the bureauwill prepare brief periodic reportsdiscussing the progress towardachieving the goals, objectives, andtimetables of the negotiation, andhighlighting any successes andunanticipated events or issuesencountered during the negotiation.These reports shall be submitted to ORAand the IDRC.

At the end of the initial 12 monthsunder the Final ADR Policy, ORA, theDRS, and IDRC shall prepareinformation to be included in the yearlyADR report to the Secretary evaluatingthe Department’s experiences withnegotiated rulemaking. This report willfocus upon the types of policies,categories of rulemakings, and methodsof negotiation that were most successfulin achieving customer satisfaction andthe cost-effective implementation ofmutually agreeable rulemakings. Thisreport will be based upon evaluationsconducted by the Bureaus andsubmitted to ORA, IDRC, and the DRSfor review and assimilation into thereport to the Secretary.

IV. Executive Order No. 12866

This final policy was not subject toOffice of Management and Budgetreview under Executive Order No.12866.

Dated: July 15, 1996.Bonnie R. Cohen,Assistant Secretary—Policy, Managementand Budget.

Appendix I—Glossary of ADR Terms

The following terms are commonlyassociated with ADR and negotiatedrulemaking and contain manyrecognized forms of ADR. They areprovided for the reader’s convenienceand have been adapted from the ADRAct (now expired), the NegotiatedRulemaking Act, and other sources.

Alternative means of disputeresolution—an inclusive term used todescribe a variety of problem-solvingprocesses that are used in lieu oflitigation or administrative adjudicationto resolve issues in controversy,

including but not limited to, settlementnegotiations, conciliation, facilitation,mediation, fact-finding, minitrials, andarbitration, or any combination thereof.

Arbitration—a process, quasi-judicialin nature, whereby a dispute issubmitted to an impartial and neutralthird party who considers the facts andmerits of a case and decides the matter.To be revised consistent with 5 U.S.C.588, et seq.

Conciliation—procedures intended tohelp establish trust and opennessbetween the parties to a dispute.

Dispute—an issue which is materialto a decision concerning anadministrative or mission-relatedprogram of an agency and with whichthere is disagreement between theagency and a person or persons whowould be substantially affected by thedecision.

Dispute resolution communication—any oral or written communicationprepared for the purposes of a disputeresolution proceeding, including anymemoranda, notes, or work product ofthe neutral, parties, or nonpartyparticipants. A written agreement toenter into a dispute resolutionproceeding, or a final written agreementor arbitration award reached as a resultof a dispute resolution proceeding, isnot dispute resolution communication.

Dispute resolution proceeding—anyprocess in which an alternative meansof dispute resolution is used to resolvean issue in controversy in which aneutral is appointed and specifiedparties participate.

Facilitation—involves the assistanceof a third party who is impartial towardthe issues under discussion and whoworks with all participants in a wholegroup session providing proceduraldirections on how the group caneffectively move through the problem-solving steps of the meeting and arriveat the jointly agreed upon goal.

Fact-finding—involves the use ofneutrals acceptable to all parties todetermine disputed facts. This can beparticularly useful where disagreementsabout the need for or the meaning ofdata are impeding resolution of adispute, or where the disputed facts arehighly technical and would be betterresolved by experts. Fact-findingusually involves an informalpresentation of its case by each party.The neutral(s) then provides an advisoryopinion on the disputed facts, whichcan be used by the parties as a basis forfurther negotiation.

Litigation—a dispute brought in acourt of law to enforce a statute, right,or legally created cause of action thatwill be decided based upon legalprinciples or evidence presented.


Mediation—involves the interventioninto a dispute of an impartial andneutral third party, who has nodecisionmaking authority but who willprocedurally assist the parties to reachvoluntarily an acceptable settlement ofissues in dispute.

Minitrial—a structured settlementprocess in which the disputants agreeon a procedure for presenting their casesin highly abbreviated versions (usuallyno more than a few hours or a few days)to senior officials for each side withauthority to settle the dispute. Thisprocess allows those in senior positionsto see firsthand the relative strengthsand weaknesses of their cases and canserve as a basis for more fruitfulnegotiations. Often, a neutral presidesover the hearing, and may,subsequently, mediate the dispute orhelp parties evaluate their cases.

Negotiating rulemaking—rulemakingaccomplished through the use of anegotiated rulemaking committee.

Negotiated rulemaking committee—an advisory committee established by anagency in accordance with theNegotiated Rulemaking Act and theFederal Advisory Committee Act toconsider and discuss issues for thepurpose of reaching a consensus in thedevelopment of a proposed rule.

Negotiation—involves a bargainingrelationship between two or moreparties who have either perceived oractual conflicts of interest. Theparticipants join voluntarily in atemporary relationship to educate eachother about their needs and interest andexchange specific resources or promisesthat will resolve one or more issues.Almost all of the ADR procedures, inwhich the parties maintain control overthe outcome of the conflict, arevariations upon or elaborations of thenegotiation process.

Neutral—an individual, who withrespect to an issue in controversy,functions specifically to aid the partiesin resolving the controversy. Theindividual may be a permanent ortemporary officer or employee of theFederal Government, or any otherindividual who is acceptable to theparties to a dispute resolutionproceeding. A neutral shall have noofficial, financial, or personal conflict ofinterest with respect to the dispute,unless such interest is fully disclosed inwriting to all parties and all partiesagree that the neutral may serve.

Ombudsman—a person designated toaddress selected categories of disputesby investigation the circumstances thatgave rise to the matter; and based uponthe investigative findings,recommending corrective action, asappropriate.

Roster—a list of persons qualified toprovide services as neutrals that ismaintained by the agency.

Appendix II—Examples of ADRInitiatives

All bureaus and offices within theDepartment have been involved inimplementing ADR processes. Some ofthe more prominent examples of ADRinitiatives that reflect the Department’scommitment to ADR include:

In 1990, the Department disseminatedto each of the Department’s bureaus andoffices an ADR survey designed toidentify program areas that could beamendable to ADR techniques. Amongthe questions asked were: (1) Thecategories of disputes in which theorganization is typically involved; (2)the number of cases during the prior 2fiscal years that were docketed, settled,and litigated, and the approximate costinvolved; and (3) the organization’sexperience to date in utilizing ADRtechniques.

The Department initially conductedan orientation program on ADR.Included in the orientation program wasSenator Charles Grassley, one of thesponsors of the ADR Act, together withrepresentatives of the AdministrativeConference of the United States (ACUS)and the Federal Mediation andConciliation Service (FMCS).

The Department then conducted a oneday training program on ADR. Thetraining focused on the various methodsof ADR and included representativesfrom the U.S. Army Corps of Engineers,the Environmental Protection Agency,the Department of Health and HumanServices, and the Department ofTransportation, each of whom sharedtheir experiences in developingsuccessful ADR programs.

The Department’s Office for EqualOpportunity (OEO) provided training inbasic and advanced mediation skills forOEO and personnel program officialsand Equal Employment Opportunity(EEO) counselors. OEO also issued adirective to bureaus and officesproviding guidance on the developmentand implementation of ADR pilotprograms consistent with 29 CFR Part1614. Under this directive each bureauand office is to submit an ADR pilotprogram plan delineating specificactions to be taken to incorporate ADRtechniques into the EEO complaintsprocess.

The Department encourages the use ofADR in the resolution of discriminationcomplaints and has designated aDepartmental EEO/ADR Coordinatorand directed each bureau to designate aBureau EEO/ADR Coordinator.

The Department designated theBureau of Reclamation (Reclamation) asa pilot bureau in fiscal year 1993 for thepurpose of testing the effectiveness ofmediation in the resolution of EEOcomplaints and administrativegrievances.The bureau has reliedexclusively on contract neutrals to serveas mediators for all disputes referred forADR. Mediation has also been utilizedby Reclamation in other program areas,including resource management andcontract administration.

The Department’s Office of Hearingsand Appeals has implemented ADR asan alternative to administrativelitigation. The Board of Indian Appealsand the administrative law judgesvested with authority for adjudicatingIndian probate cases have encouragedthe use of settlement agreements toresolve these matters. Under 43 CFR4.207, administrative law judges havebeen authorized to affect compromisesettlements in probate actions where theparties concerned agree to compromiseand where the judge establishes that allnecessary conditions have been met.The Board of Contract Appeals has beeneffectively implementing ADR processesover the last 3 years in its cases. At thetime a case is docketed, the Board issuesan order notifying the parties to thedispute of the availability and benefitsof ADR. Through actively promotingADR as a viable alternative, the Boardhas settled a majority of its caseswithout the need to conduct a hearing.

The Bureau of Land Management(BLM) has recognized the benefits ofADR techniques, and, in partnershipwith the Bowie State University’s Centerfor Alternative Dispute Resolution, hasprovided basic Conflict ManagementADR training to Personnelists and EEOpractitioners, as well as to keymanagement officials.

The Minerals Management Service(MMS) has a rich history of ADR. MMSexamples include (1) a process targetedat settling outstanding and contentiousmineral royalty claims which hasreduced appeals and litigation andincreased royalty collections, and (2)more than a decade of conflictresolution training for offshore mineralsmanagement personnel andestablishment and conduct of a jointreview panel for constituent review ofenvironmental documents.

During the interim period that is justending, the U.S. Fish and WildlifeService has recorded particular successin implementing its ADR plan. Out of 41instances of utilizing ADR, 33 (80percent) have been successful. Theunsuccessful instances resulted infurther processing under EEOprocedures. Mediation was conducted


by EEO counselors in all instancesexcept for three which were processedthrough the Federal Mediation andConciliation Service. The cost and timesavings were significant with theavoidance of expenditures inconnection with EEO investigations,hearings, transcripts, and staff time.

The program Department-wide thusfar has focused on EEO and relatedpersonnel matters. Only MMS, amongthe bureaus, has concentrated onresolving conflicts with outside groups.The interim policy signed by theSecretary in June 1994, upon which thefinal policy is based, made clear that theprogram is to be broader based. TheIDRC will continue to encourage otherbureaus to adopt the MMS model forresolving conflicts with constituents,customers and outside groups.

[FR Doc. 96–19623 Filed 8–1–96; 8:45 am]BILLING CODE 4310–79–M

Bureau of Indian Affairs

Indian Gaming

AGENCY: Bureau of Indian Affairs,Interior.ACTION: Notice of approved tribal-statecompact.

SUMMARY: Pursuant to 25 U.S.C. 2710, ofthe Indian Gaming Regulatory Act of1988 (Pub. L. 100–497), the Secretary ofthe Interior shall publish, in the FederalRegister, notice of approved Tribal-StateCompacts for the purpose of engaging inClass III (casino) gambling on Indianreservations. The Assistant Secretary—Indian Affairs, Department of theInterior, through her delegatedauthority, has approved the Tribal-StateClass III Gaming Compact between theConfederated Tribes and Bands of theYakama Indian Nation and the State ofWashington, which was executed onJune 9, 1996.DATES: This action is effective August 2,1996.FOR FURTHER INFORMATION CONTACT:George T. Skibine, Director, IndianGaming Management Staff, Bureau ofIndian Affairs, Washington, D.C. 20240,(202) 219–4068.

Dated: July 26, 1996.Ada E. Deer,Assistant Secretary—Indian Affairs.[FR Doc. 96–19679 Filed 8–1–96; 8:45 am]BILLING CODE 4310–02–M

Indian Gaming, Walker River PaiuteTribe

AGENCY: Bureau of Indian Affairs,Interior.

ACTION: Notice of approved Tribal-StateCompact.

SUMMARY: Pursuant to 25 U.S.C. 2710, ofthe Indian Gaming Regulatory Act of1988 (Pub. L. 100–497), the Secretary ofthe Interior shall publish, in the FederalRegister, notice of approved Tribal-StateCompacts for the purpose of engaging inClass III (casino) gambling on Indianreservations. The Assistant Secretary—Indian Affairs, Department of theInterior, through her delegatedauthority, has approved the Slot RouteCompact between the Walker RiverPaiute Tribe and the State of Nevada,which was executed on March 25, 1996.DATES: This action is effective August 2,1996.FOR FURTHER INFORMATION CONTACT:George T. Skibine, Director, IndianGaming Management Staff, Bureau ofIndian Affairs, Washington, DC 20240,(202) 219–4068.

Dated: July 26, 1996.Ada E. Deer,Assistant Secretary—Indian Affairs.[FR Doc . 96–19678 Filed 7–M–96; 8:45 am]BILLING CODE 4310–02–M

Bureau of Land Management

[AZ040–7122–00–5513; AZA 28793, AZA29640]

Notice of Intent to Prepare anEnvironmental Impact StatementAnalyzing the Impacts of a ProposedPublic Land Exchange and anAssociated Mining Plan of Operationsfor the Dos Pobres/San Juan CopperOre Bodies near Safford, AZ

AGENCY: Bureau of Land Management,Interior.

Cooperating Agency: Army Corps ofEngineers, Department of Defense.SUMMARY: The Bureau of LandManagement (BLM), Safford District, incooperation with the Army Corps ofEngineers (COE) is preparing anEnvironmental Impact Statement (EIS)to analyze impacts of a proposed landexchange and the Mining Plan ofOperations (MPO) for the Dos Pobres/San Juan copper ore bodies.

1. Identification of the geographic areainvolved: The proposed land exchangeinvolve approximately 17,000 acres ofpublic lands currently managed by theSafford District, Bureau of LandManagement that are located near thecity of Safford, Graham County,Arizona. The MPO addresses thedevelopment of the San Juan and DosPobres ore bodies and involvesapproximately 3,900 acres of publiclands in the same area. The

approximately 5,000 acres of privatelands offered for exchange are located insouthern Arizona.

2. Analysis of alternatives: TheProposed Action is an exchange ofFederal land for private land betweenthe BLM and Phelps Dodge Corporation,Inc. The No Action alternative andalternatives that consider variouscombinations of selected and offeredlands as well as various aspects of theMPO will be analyzed. COE will utilizethe analysis presented in the EIS todecide whether or not to issue a CleanWater Act 404 permit to Phelps Dodge,Inc., for operation of the Dos Pobres/SanJuan mining operation.

3. General types of issues anticipated:The proposed land exchange and MPOinvolves issues related to the naturalresource values and uses of the publiclands in question. These issues areexpected to involve impacts on watersof the United States, riparian habitats,threatened and endangered species,drainage and erosion impacts, surfaceand groundwater quality and quantity,water rights, Gila River impacts, airquality, cultural resources,transportation, access to recreationareas, socioeconomic resources, Indiantrust lands and assets, mineral rights,and other issues that may be identifiedduring public scoping.

4. Disciplines to be represented andused to prepare the environmentalimpact statement: Hydrology, botany,wildlife, recreation, realty, range,economics, geology, and archaeology.DATES: The kind and extent of publicparticipation: Three public open housemeetings have been scheduled to informthe public of this project and to obtainpublic input on the issues to beanalyzed in the EIS. These meetings willbe held in Safford, Tucson, and Phoenixat the following times and locations:September 5, 1996, from 4:00 to 8:00

p.m., BLM District Office, 711 14thAvenue, Safford, Arizona 85546

September 10, 1996, from 4:00 to 8:00p.m., Tucson Main Public Library,101 North Stone Avenue, Tucson,Arizona 85701

September 11, 1996, from 4:00 to 8:00p.m., BLM State Office, 3707 North7th Street, Phoenix, Arizona 85014.Public input may be submitted during

the public meetings or in writing to theaddress in the address section. Publiccomments will be accepted untilOctober 12, 1996.

Complete records of all phases of theNEPA process will be maintained forpublic review at the Safford DistrictOffice, 711 14th Avenue, Safford,Arizona 85546.


ADDRESSES: Written commentsconcerning the environmental impactstatement should be submitted toMargaret Jensen, Gila Resource AreaManager, Bureau of Land Management,Safford District Office, 711 14thAvenue, Safford, Arizona 85546.

SUPPLEMENTARY INFORMATION: PhelpsDodge, Inc., is planning to develop theDos Pobres and San Juan copper orebodies that are primarily located onprivate lands owned by Phelps Dodge,Inc. Phelps Dodge seeks to eitheracquire additional public lands in thevicinity of these ore bodies through theexchange process or utilize them formining purposes under the GeneralMining Law of 1872, as amended. Tothis purpose, Phelps Dodge hasproposed an exchange of land andsubmitted a MPO for the use of theselands to the BLM.

The 17,000 acres of public landsidentified for exchange are adjacent toand surround approximately 20,000acres of Phelps Dodge’s private land.These lands have been selected byPhelps Dodge, Inc., to consolidate itsland position, provide buffer areas forenvironmental compliance purposes,and accommodate development offuture mining operations at Dos Pobres/San Juan and Lone Star ore bodies.

In exchange, Phelps Dodge, Inc., isoffering approximately 5,000 acres ofprivate lands that it owns for publicacquisition. These lands possessresource qualities considered to be ofsignificant value to the public, and havebeen identified for acquisition by theBLM.

The Dos Pobres/San Juan projectwould involve open pit mining ofleachable copper ore and theconstruction and operation of a solventextraction/electrowinning (SX/EW)process facility designed to produceabout 200 million pounds of high-quality cathode copper per year whenfully operational.

The proposed mining would involveconventional drill, blast, load and haultechniques. During project construction,employment is expected to averagenearly 600 workers with peakemployment reaching about 1,000 full-time jobs. Direct employment by PhelpsDodge during the life of the project isestimated at 300 to 400 full-timeemployees.

FOR FURTHER INFORMATION CONTACT: TomTerry, Project Leader, or MikeMcQueen, Planning and EnvironmentalCoordinator, 711 14th Avenue, Safford,Arizona 85546; telephone (520) 428–4040.

Dated: July 16, 1996.Frank L. Rowley,Acting District Manager.[FR Doc. 96–19626 Filed 8–1–96; 8:45 am]BILLING CODE 4310–32–M

[CO–010–06–1020–00–241A]

Northwest Colorado ResourceAdvisory Council Meeting

AGENCY: Bureau of Land Management,Interior.

ACTION: Notice of meetings.

SUMMARY: Notice is hereby given thatthe next meeting of the NorthwestColorado Resource Advisory Councilwill be held on August 16, 1996.

DATES: The meeting is scheduled forFriday, August 16, 1996 in Hayden,Colorado.

ADDRESSES: For further information,contact Lynda Boody, Bureau of LandManagement (BLM), Grand JunctionDistrict Office, 2815 H Road, GrandJunction, Colorado 81506; Telephone(970) 244–3000; TDD (970) 244–3011.

SUPPLEMENTARY INFORMATION: Themeeting is scheduled to begin at 9:00a.m.

This meeting will be held at TheNature Conservancy’s Carpenter Ranch,13250 U.S. Hwy. 40 West, Hayden,Colorado 81639.

The agenda for this meeting will focuson general Council business, recentlyheld public meetings on standards andguidelines for grazing, new business,and committee reports.

All Resource Advisory Councilmeetings are open to the public.Interested persons may make oralstatements to the Council, or writtenstatements may be submitted for theCouncil’s consideration. Publiccomment will be taken throughout themeeting. Depending on the number ofpersons wishing to make oralstatements, a per-person time limit maybe established by the Grand Junction/Craig District Manager.

Summary minutes for the Councilmeeting will be maintained in the GrandJunction and Craig District Offices andwill be available for public inspectionand reproduction during regularbusiness hours within thirty (30) daysfollowing the meeting.

Dated: July 22, 1996.Mark Morse,Grand Junction/Craig District Manager.[FR Doc. 96–19622 Filed 8–1–96; 8:45 am]BILLING CODE 4310–70–P

[NV–943–1430:N–61015]

Notice of Realty Action: Conveyancefor Recreation and Public Purposes

AGENCY: Bureau of Land Management,Interior.ACTION: Recreation and public purposesconveyance.

SUMMARY: The following describedpublic land near Moapa Valley, ClarkCounty, Nevada, has been examined andfound suitable for conveyance for publicpurposes under the provisions of theRecreation and Public Purposes Act, asamended (43 U.S.C. 869 et seq.). TheClark County Department of PublicWorks proposes to use the land for asolid waste transfer station.

Mount Diablo Meridian, Nevada

T. 15 S., R. 67 E.,Sec. 16: E1⁄2NW1⁄4, W1⁄2NE1⁄4.Acreage: 160 acres.

The entire amount of land describedwill not be required for the transferstation, likely no more than a total of 10acres. The exact location will bedetermined through survey and theexcess parcels removed fromclassification and segregation. The landis not required for any Federal purpose.The conveyance is consistent withcurrent Bureau planning for this areaand would be in the public interest. Thepatent, when issued will be subject tothe provisions of the Recreation andPublic Purposes Act and applicableregulations of the Secretary of theInterior, and will contain the followingreservations to the United States:

1. A right-of-way thereon for ditchesor canals constructed by the authority ofthe United States, Act of August 30,1890 (43 U.S.C. 945).

2. All minerals shall be reserved tothe United States, together with theright to prospect for, mine and removesuch deposits from the same underapplicable law and such regulations asthe Secretary of the Interior mayprescribe, and will be subject to: validexisting rights, if any.

Detailed information concerning thisaction is available for review at theoffice of the Bureau of LandManagement, Las Vegas District, 4765W. Vegas Drive, Las Vegas, Nevada89108. Upon publication of this noticein the Federal Register, the abovedescribed land will be segregated fromall other forms of appropriation underthe public land laws, including thegeneral mining laws, except fromconveyance under the Recreation andPublic Purposes Act, leasing under themineral leasing laws and disposalsunder the mineral material disposal


laws. For a period of 45 days from thedate of publication of this notice in theFederal Register, interested parties maysubmit comments regarding theproposed conveyance for classificationof the lands to the District Manager, LasVegas District, 4765 W. Vegas Drive, LasVegas, NV 89108.

Classification Comments: Interestedparties may submit comments involvingthe suitability of the land for a transferstation. Comments on the classificationare restricted to whether the land isphysically suited for the proposal,whether the use will maximize thefuture use or uses of the land, whetherthe use is consistent with local planningand zoning, or if the use is consistentwith State and Federal programs.

Application Comments: Interestedparties may submit comments regardingthe specific use proposed in theapplication and plan of development,whether the BLM followed properadministrative procedures in reachingthe decision, or any other factor notdirectly related to the suitability of theland for a transfer station facility.

Any adverse comments will bereviewed by the State Director.

In the absence of any adversecomments, the classification of the landdescribed in this Notice will becomeeffective 60 days from the date ofpublication in the Federal Register. Thelands will not be offered for conveyanceuntil after the classification becomeseffective.

Dated: July 23, 1996.Donette Gordon,Acting Associate District Manager.[FR Doc. 96–19616 Filed 8–1–96; 8:45 am]BILLING CODE 1430–HC–U

[NV–030–1430–01; N–57155]

Cancellation of Realty Action

AGENCY: Bureau of Land Management,Interior.ACTION: Cancellation of realty action.

The Notice of Realty Action—Noncompetitive Sale of Federal Landsin Douglas County, Nevada—publishedin the Federal Register, Vol. 58, No. 67,Pg. 18413, on April 9, 1993, is herebycancelled in its entirety.

The federal lands had been foundsuitable for direct sale to accommodateprivate improvements on them, placedthere as the result of an erroneousprivate survey. However, these landswere later determined to have somelevel of hazardous contamination, theresult of past nearby mining andmineral processing. The transfer of thelands, under these conditions, was

determined not to be in the interest ofeither the United States or the saleproponent. A private well and pipeline,on these federal lands, were authorizedthrough the issuance of a right-of-way.

Dated: July 24, 1996.James M. Phillips,Assistant District Manager. Non-RenewableResources.[FR Doc. 96–19618 Filed 8–1–96; 8:45 am]BILLING CODE 4310–03–P

[ID–040–4610–00]

Notice of Availability of the ChallisDraft Resource Management Plan(RMP) and Environmental ImpactStatement (EIS)

AGENCY: Bureau of Land Management,Labor.ACTION: Notice of proposed ACECdesignations.

SUMMARY: Pursuant to section 202 of theFederal Land Policy and ManagementAct of 1976, section 102(2)(C) of theNational Environmental Policy Act of1969, and BLM Planning Regulations(43 CFR part 1600), the Bureau of LandManagement (BLM), Upper Columbia—Salmon Clearwater Districts hasprepared a Draft Resource ManagementPlan/Environmental Impact Statement(Draft RMP/EIS) for the Challis ResourceArea. The Challis Draft RMP/EIS hasbeen published and is available forreview and comment by requesting acopy from the address indicated in the‘‘Addresses’’ section below. Incompliance with 43 CFR 1610.7–2(b),this notice of availability of the ChallisDraft RMP/EIS also constitutes notice ofACEC designations proposed in theChallis Draft RMP/EIS. More detailedinformation about the existing andproposed ACECs described in theChallis Draft RMP/EIS is provided in the‘‘Supplementary Information’’ section ofthis notice.

The Challis Draft RMP/EIS describesand analyzes five alternative ways ofmanaging approximately 792,657 acresof BLM public lands in the ChallisResource Area, located in Custer andLemhi counties of east-central Idaho.When implemented, the Challis RMPwould replace the three ManagementFramework Plans currently used by theChallis Resource Area. The Challis RMPmay also amend the Little Lost-BirchCreek Management Framework Plan(BLM 1981), if Alternatives 2, 4, or 5 areselected and the Donkey Hills Area ofCritical Environmental Concern (ACEC)is designated to include 4,714 acreswithin the Big Butte Resource Area,

managed by the Idaho Falls District—BLM in Butte County, Idaho.

DATES: Written comments on the ChallisDraft RMP/EIS must be submitted orpostmarked no later than November 21,1996. Meetings will be held to receivepublic comments on the Challis DraftRMP/EIS. The dates and locations ofpublic meetings will be announcedthrough the local media and a mailinglist, as appropriate.

ADDRESSES: Copies of the Challis DraftRMP/EIS may be obtained upon requestby contacting the Bureau of LandManagement, Salmon Field Office,Route 2, Box 610, Salmon, Idaho 83467;phone (208) 756–5400. Writtencomments on the Challis Draft RMP/EISshould be sent to Kathe Rhodes,Planning and EnvironmentalCoordinator, Bureau of LandManagement, Salmon Field Office,Route 2, Box 610, Salmon, Idaho 83467.

FOR FURTHER INFORMATION CONTACT:Kathe Rhodes, Planning andEnvironmental Coordinator, Bureau ofLand Management, Salmon Field Office,Route 2, Box 610, Salmon, Idaho 83467;phone (208) 756–5440. Documentsrelevant to the Challis Draft RMP/EISplanning process are available at theabove address for public viewing duringnormal office hours.

SUPPLEMENTARY INFORMATION: TheChallis Draft RMP/EIS describes andanalyzes five alternative land use plansto address the planning issues identifiedthrough public involvement and BLMinput. Each alternative proposesresource condition objectives, land useallocations, and management actionsand direction to guide resourcemanagement of the Challis ResourceArea on a long term, sustainable basisduring the next 15 to 20 years.Alternative 1, the ‘‘no action’’alternative, describes resourcemanagement of the Challis ResourceArea as of approximately 1991, whenthe planning process was initiated. Thefour ‘‘action’’ alternatives (Alternatives2, 3, 4, and 5) differ in how much theyemphasize three aspects of resourcemanagement: (a) the protection,restoration, and enhancement of naturalvalues (e.g., visual quality), (b)traditional commodity production (e.g.,timber harvest, livestock grazing,mineral production), and (c) non-commodity resource uses (e.g.,recreation).

Four issues and related managementconcerns were identified during thescoping process for the Challis DraftRMP:


Issue Related managementconcern(s)

Range Manage-ment.

Livestock Grazing, WildHorse and Burro Man-agement, Wildlife Habi-tat Management, Nox-ious Weed Infestation,Vegetation TreatmentProjects, Upland Water-shed, Fire Manage-ment.

Water RelatedResource Man-agement.

Riparian Areas, Flood-plain/Wetland Areas,Water Quality, MinimumStreamflow, Fisheries.

Land Tenure andAccess.

Land Tenure.

Special Manage-ment Areas.

Wild and Scenic Rivers,Areas of Critical Envi-ronmental Concern,Management of Wilder-ness Study Areas if Re-leased from WildernessReview.

In order to provide completedisclosure and analysis of resource uses

in the Challis Resource Area, the ChallisDraft RMP/EIS also discusses thefollowing management concernsidentified during the scoping process:Forested Areas; Special Status SpeciesManagement; Managing for BiologicalDiversity; Oil, Gas, Geothermal,Locatable, and Saleable Minerals; VisualQuality Management; RecreationOpportunities and Visitor Use; Off-highway Vehicle Use; Cultural ResourceManagement; Paleontological ResourceManagement; Tribal Treaty Rights;Transportation; Hazardous MaterialsManagement; Air Quality.

The four ‘‘action’’ alternatives for theChallis RMP propose and analyze thedesignation of additional Areas ofCritical Environmental Concern(ACECs). Under existing management,eight ACECs totaling 14,069 acres aredesignated in the Challis Resource Areato highlight various values andresources for management andprotection, including unique plantcommunities, petrified trees, fragile

soils, and a bighorn sheep population.These existing ACECs include 5,997acres of Research Natural Areasdesignated for study of natural, pristine,or unique characteristics. Depending onthe alternative, future proposed ACECdesignations would include thefollowing: (a) expansion of one existingACEC by approximately 269 acres; and(b) designation of six to eight additionalACECs totaling from 48,889 acres up to129,354 acres. The proposed ACECswould highlight values and resourcesincluding unique plant communities, anadditional bighorn sheep population,elk winter range and calving habitat,cultural resources, anadromous fishhabitat, fragile soils, and geological,special status fish, and roadless-primitive resources. The chart belowlists the expanded and proposed ACECsby alternative, including any resourceuse limitations which would occur ifthe ACECs were formally designated(per 43 CFR 1610.7–2(b)).

ACEC/RNAAcres proposed for designation; potential resource use limitations if designated

Alternative 1 Alternative 2 Alternative 3 Alternative 4 Alternative 5

Thousand SpringsACEC/RNA.

824 acres ACEC252 acres RNA;fencing to controllivestock use inthe RNA.

1,093 acres ACEC 252 acresRNA; fencing to controllivestock use on all areasof the ACEC.

Same as Alt 2 .............. Same as Alt 2 ....... Same as Alt 2.

Dry Gulch ACEC/RNA.

0 acres .................. 400 acres ACEC/RNA, as anextension of the existingCronk’s Canyon ACEC;fence an undeveloped nat-ural spring; limit motorizedvehicle use to the existingroad.

Same as Alt 2 .............. Same as Alt 2 ....... Same as Alt 2, ex-cept close theACEC to motor-ized vehicle use.

Pennal Gulch ACEC 0 acres .................. 4,975 acres ACEC; limit mo-torized vehicle use to theexisting road.

Same as Alt 2 .............. Same as Alt 2 ....... Same as Alt 2, ex-cept close theACEC to motor-ized vehicle use.

Herd Creek Water-shed ACEC.

0 acres .................. 18,155 acre ACEC, which in-cludes 2,064 acres of theexisting Lake Creek ACEC/RNA (i.e., new designationof 16,091 acres); limit mo-torized vehicle use to exist-ing roads and vehicleways, except close the ex-isting trail above HerdLake.

Same as Alt 2, exceptmaintain the existingtrail above Herd Lakefor motorized vehicleuse if suitable por-tions of the JerryPeak WSA are re-leased from wilder-ness review.

Same as Alt 2 ....... Same as Alt 2.

Sand Hollow ACEC/RNA.

0 acres .................. 3,905 acres ACEC/RNA;continue to close the SandHollow watershed to live-stock and wild horse graz-ing and motorized vehicleuse; remove wild horsesfrom the area as nec-essary.

Same as Alt 2 .............. Same as Alt 2, ex-cept, in addition,incorporate theSand HollowACEC/RNA intothe Road CreekWatershedACEC.

Same as Alt 4.


ACEC/RNAAcres proposed for designation; potential resource use limitations if designated

Alternative 1 Alternative 2 Alternative 3 Alternative 4 Alternative 5

Donkey Hills ACEC 0 acres .................. 28,826 acres ACEC, includ-ing 4,714 acres in the BigButte Resource Area; sea-sonal OHV closure; OHVuse limited the remainderof the year to existingroads and vehicle ways;timber harvest stipulations.

13,500 acres ACEC;resource use limita-tions the same as Alt2.

33,026 acresACEC, including4,714 acres inthe Big Butte RA;resource use lim-itations the sameas Alt 2, except,in addition, 5,069acres would beremoved fromthe commercialtimber base.

Same as Alt 4, ex-cept the ACECwould be closedto motorized ve-hicle use.

Birch Creek ACEC 0 acres .................. 9,687 acres ACEC; seasonalOHV closure; OHV uselimited the remainder ofthe year to existing roadsand vehicle ways; maintaincurrent livestock water de-velopment restrictions.

0 acres ......................... 9,687 acres ACEC;closed yearlongto motorized ve-hicle use; closedto livestock graz-ing.

Same as Alt 4.

Lone Bird ACEC ..... 0 acres .................. 10,018 acres ACEC; phys-ically close portions of theexisting road; close theACEC to motorized vehicleuse, rockhounding, collec-tion of mineral materials,and mineral material sales.

Same as Alt 2, exceptlimit motorized vehi-cle use to existingroads and vehicleways.

Same as Alt 2 ....... Same as Alt 2

Road Creek Water-shed ACEC.

0 acres .................. 0 acres .................................. 0 acres ......................... 55,157 acresACEC, includingincorporation ofthe 3,905-acreproposed SandHollow ACEC;restrict motorizedvehicle use tofour existingroads/ways.

Same as Alt 4.

The Challis Draft RMP/EIS alsopresents suitability findings for most ofthe 57 river segments found eligible forfurther Wild and Scenic Rivers studyduring the Challis Resource Area’s Wildand Scenic Rivers eligibility evaluationconducted in 1992 and 1993. Dependingon the alternative, three to nine eligibleriver segments would have a suitabilityfinding deferred until a coordinatedriver suitability study with the U.S.Forest Service and the State of Idahocan be completed. In addition, under allfive alternatives, one river segmentwould have an eligibility determinationdeferred pending further coordinatedstudy. In order to provide a range ofalternatives, most eligible riversegments were found suitable under atleast one alternative and unsuitableunder at least one alternative.Suitability findings described in theChallis Draft RMP are as follows: 0 riversegments found suitable underAlternative 1; 5 river segments foundsuitable under Alternative 2; 0 riversegments found suitable underAlternative 3; 19 river segments foundsuitable under Alternative 4; and 54

river segments found suitable underAlternative 5.

Public participation will continuethroughout the remainder of the ChallisRMP planning process. Following the90-day public review and commentperiod for the Challis Draft RMP/EISwhich ends November 21, 1996, theBLM will prepare a Proposed RMP/Final EIS. The public will then beinvited to review the Proposed RMP/Final EIS.

Dated: July 29, 1996.Fritz U. Rennebaum,District Manager.[FR Doc. 96–19647 Filed 8–1–96; 8:45 am]BILLING CODE 4310–GG–U

DEPARTMENT OF JUSTICE

Antitrust Division

United States v. Alex. Brown & Sons,Inc., et al.; Stipulation and Order andCompetitive Impact Statement

Notice is hereby given pursuant to theAntitrust Procedures and Penalties Act,

15 U.S.C. 16(b)–(h), that a Stipulationand Order (‘’proposed order’’) and aCompetitive Impact Statement havebeen filed in the United States DistrictCourt for the Southern District of NewYork in United States v. Alex, Brown &Sons Inc., et. al, Civil No. 96–5313 (filedJuly 17, 1996).

The Complaint alleges that thetwenty-four market making firms namedin the Complaint and others, throughthe adherence to and enforcement of a‘‘quoting convention,’’ inflated the‘‘inside spread’’ of certain stocks quotedon The Nasdaq Stock Market, Inc.(‘‘Nasdaq’’). (The inside spread is thedifference between the best price to buystock being quoted by any market makerand the best price to sell stock beingquoted by any market maker.) As aresult, according to the Complaint,investors have been required to paymore to buy and sell such stocks thatthey would have in a competitivemarket.

Under the quoting convention, marketmakers are required to quote prices atwhich they are willing to buy and sellstocks in even-eighth amounts (25 cents)


rather than odd-eighth amounts (12.5cents), whenever their individual‘‘dealer spreads’’ are 75 cents or moreper share. (A ‘‘dealer spread’’ is thedifference between the price at whichan individual market maker offers tobuy a stock and the price at which itoffers to sell the same stock, on a pershare basis.) A narrower dealer spreadincreases the financial risk of tradingstock and, in some instances, theconvention operated to deter a traderfrom improving his or her quote by aneighth of a point, when the trader wouldhave been willing to do so, absent theconvention. The Complaint alleges thatthe quoting convention constitutes anagreement to fix prices in violation ofSection 1 of the Sherman Act, asamended, 15 U.S.C. § 1.

If entered by the Court, the proposedorder will prohibit the defendantsecurities firms from agreeing with eachother or with other market makers toadhere to the quoting convention, or tofix, raise, lower or maintain the price ofany Nasdaq security. In addition toother prohibitions, the proposed orderwill also prohibit the defendant firmsfrom harassing or intimidating eachother or other market makers fornarrowing their dealer spreads or fornarrowing the inside spread in anyNasdaq security.

If entered, the proposed order willrequire each defendant firm to designatean antitrust compliance officer toinstruct traders and company officialsabout the requirements of the proposedorder, and to supervise the firm’s reviewof audio tapes of trader conversationsthat are to be created under the order,in order to detect possible violations ofthe proposed order.

Public comments on the proposedorder are invited within the statutory60-day comment period. Suchcomments and responses thereto will bepublished in the Federal Register andfiled with the Court. Comments shouldbe directed to John F. Greaney, Chief,Computers and Finance Section,Antitrust Division, U.S. Department ofJustice, 600 E Street, N.W., Room 9500,Washington, D.C. 20530 (telephone:202/307–6200).Rebecca P. Dick,Deputy Director of Operations, AntitrustDivision.

United States District Court for theSouthern District of New York

United States of America,. Plaintiff, v.Alex. Brown & Sons Inc.; Bear, Stearns & Co.Inc.; CS First Boston Corp.; Dean WitterReynolds Inc.; Donaldson, Lufkin & JenretteSecurities Corp.; Furman Selz LLC; Goldman,Sachs & Co.; Hambrecht & Quist LLC; Herzog,Heine, Geduld, Inc.; J.P. Morgan Securities,

Inc.; Lehman Brothers, Inc.; Mayer &Schweitzer, Inc.; Merrill Lynch, Pierce,Fenner & Smith, Inc.; Morgan Stanley & Co.,Inc.; Nash, Weiss & Co.; Olde Discount Corp.;Painewebber Inc.; Piper Jaffray Inc.;Prudential Securities Inc.; Salomon BrothersInc.; Sherwood Securities Corp.; SmithBarney Inc.; Spear Leeds & Kellogg, LP; andUBS Securities LLC, Defendants; [CivilAction No. 96–5313]

Stipulation and OrderWheareas, plaintiff, United States of

America, having filed its complaint onJuly 17, 1996, and plaintiff anddefendants, by their respectiveattorneys, having agreed to the entry ofthis stipulation and order without trialor adjudication of any issue of fact orlaw herein and without this stipulationand order constituting any evidenceagainst or an admission by any partywith respect to any such issue;

Now, therefore, before the taking ofany testimony and without trial oradjudication of any issue of fact or lawherein,

Plaintiff and defendants hereby agreeas follows:

I

Jurisdiction and VenueThis Court has jurisdiction over the

subject matter of and the parties to thisaction. Venue is proper in the SouthernDistrict of New York.

II

DefinitionsAs used in this stipulation and order:A. ‘‘Any’’ means one or more.B. ‘‘Ask’’ or ‘‘offer’’ means the price

quoted on Nasdaq at which a marketmaker offers to sell a specific quantityof a particular Nasdaq security.

C. ‘‘Bid’’ means the price quoted onNasdaq at which a market maker offersto buy a specific quantity of a particularNasdaq security.

D. ‘‘Dealer spread’’ means thedifference between a market maker’s bidand ask on Nasdaq for a particularNasdaq security at any given time.

E. ‘‘Defendant’’ means a defendantthat has executed this stipulation andorder.

F. ‘‘Effective date’’ means the date onwhich plaintiff and defendants haveindicated their agreement by executingthis stipulation and order.

G. ‘‘Inside spread’’ means thedifference between the highest bid andthe lowest ask on Nasdaq of all marketmakers for a particular Nasdaq securityat any given time.

H. ‘‘Market maker’’ means a NASDmember firm that qualifies as a marketmaker under Section 3(a)(38) of theSecurities Exchange Act of 1934, asamended.

I. ‘‘NASD’’ means the NationalAssociation of Securities Dealers, Inc.

J. ‘‘Nasdaq’’ means the computerizedstock quotation system operated by theNasdaq Stock Market, Inc. that displaysthe quotes of market makers in Nasdaqsecurities.

K. ‘‘Nasdaq security’’ means anyNasdaq National Market System stock orany Nasdaq Small Cap Security stockquoted on Nasdaq, or, should theseterms be changed or amended, anysuccessor group of stock quoted onNasdaq.

L. ‘‘Or’’ means and/or.M. ‘‘OTC desk’’ means any

organizational element of a defendantengaged in market making, or itssuccessor, that accounted for tenpercent (10%) or more of suchdefendant’s total market-makingvolume, measured in shares, in Nasdaqsecurities in the immediately precedingfiscal year.

N. ‘‘Person’’ means any individual,corporation, partnership, company, soleproprietorship, firm, or other legalentity. ‘‘Other person’’ means a personwho is not an officer, director, partner,employee, or agent of a defendant.

O. ‘‘Price’’ means the price at whicha Nasdaq security is bought or sold.

P. ‘‘Quote increment’’ means thedifference between a market maker’s bidor ask on Nasdaq and that marketmaker’s immediately preceding orimmediately subsequent bid or ask onNasdaq for a particular Nasdaq security.

Q. ‘‘Quote’’ means a bid or an ask onNasdaq.

R. ‘‘Quoting convention’’ means anypractice of quoting Nasdaq securitieswhereby stocks with a three-quarter (3⁄4)point or greater dealer spread are quotedon Nasdaq in even eighths and areupdated in quarter-point (even eighth)quote increments.

S. ‘‘SEC’’ means the United StatesSecurities and Exchange Commission.

T. ‘‘Trader hours’’ means the numberderived by multiplying the number oftraders and assistant traders on the OTCdesk and any other persons actuallyengaged in making markets in Nasdaqsecurities on the OTC desk of adefendant by the number of hoursNasdaq operates per day.

III

Applicability

This stipulation and order applies toeach defendant; to each of its executiveofficers, directors, partners, successors,and assigns, during the respectiveperiods that they serve as such; and toany agents or employees assigned todefendant’s OTC desk, includingsupervisory employees, whose duties or


responsibilities include market makingin any Nasdaq security, during therespective periods that they serve assuch; and applies to all other persons inactive concert or participation with anyof them who shall have received actualnotice of this stipulation and order bypersonal service or otherwise.

IV.

Prohibited Conduct

A. Unless permitted to engage inactivities by Section IV. B. of thisstipulation and order, each defendantshall not, directly or through any tradeassociation, in connection with theactivities of its OTC desk in makingmarkets in Nasdaq securities:

(1) Agree with any other marketmaker to fix, raise, lower, or maintainquotes or prices for any Nasdaq security;

(2) Agree with any other marketmaker to fix, increase, decrease, ormaintain any dealer spread, insidespread, or the size of any quoteincrement (or any relationship betweenor among dealer spread, inside spread,or the size of any quote increment (orany relationship between or amongdealer spread, inside spread, or the sizeof any quote increment), for any Nasdaqsecurity;

(3) Agree with any other marketmaker to adhere to a quotingconvention;

(4) Agree with any other marketmaker to adhere to any understanding oragreement (other than an agreement onone or a series of related trades)requiring a market maker to trade at itsquotes on Nasdaq in quantities of sharesgreater than either (1) the minimum sizerequired by Nasdaq or NASD rules or (2)the size displayed or otherwisecommunicated by that market maker,whichever is greater;

(5) Engage in any harassment orintimidation of any other market maker,whether in the form of written,electronic, telephonic, or oralcommunications, for decreasing itsdealer spread or the inside spread inany Nasdaq security;

(6) Engage in any harassment orintimidation of any other market maker,whether in the form of written,electronic, telephonic, or oralcommunications, for refusing to trade atits quoted prices in quantities of sharesgreater than either (1) the minimum sizerequired by Nasdaq or NASD rules or (2)the size displayed or otherwisecommunicated by that market maker;

(7) Engage in any harassment orintimidation of any other market maker,whether in the form of written,electronic, telephonic, or oralcommunications, for displaying a

quantity of shares on Nasdaq in excessof the minimum size required byNasdaq or NASD rules; and

(8) Refuse, or threaten to refuse totrade, (or agree with or encourage anyother market maker to refuse to trade)with any market maker at defendant’spublished Nasdaq quotes in amounts upto the published quotation size becausesuch market maker decreased its dealerspread, decreased the inside spread inany Nasdaq security, or refused to tradeat its quoted prices in a quantity ofshares greater than either (1) theminimum size required by Nasdaq orNASD rules or (2) the size displayed orotherwise communicated by that marketmaker.

B. Notwithstanding the provisions ofSection IV.A (1)–(8), any defendantshall be entitled to:

(1) Set unilaterally its own bid andask in any Nasdaq security, the prices atwhich it is willing to buy or sell anyNasdaq security, and the quantity ofshares of any Nasdaq security that it iswilling to buy or sell;

(2) Set unilaterally its own dealerspread, quote increment, or quantity ofshares for its quotations (or set anyrelationship between or among itsdealer spread, inside spread, or the sizeof any quote increment) in any Nasdaqsecurity;

(3) Communicate its own bid or ask,or the price at or the quantity of sharesin which it is willing to buy or sell anyNasdaq security to any person, for thepurpose of exploring the possibility of apurchase or sale of that security, and tonegotiate for or agree to such purchaseor sale;

(4) Communicate its own bid or ask,or the price at or the quantity of sharesin which it is willing to buy or sell anyNasdaq security, to any person for thepurpose of retaining such person as anagent or subagent for defendant or for acustomer of defendant (or for thepurpose of seeking to be retained as anagent or subagent), and to negotiate foror agree to such purchase or sale;

(5) Engage in any conduct or activityauthorized or required by the federalsecurities laws, including but notlimited to the rules, regulations, orinterpretations of the SEC, the NASD, orany other self-regulatory organization,as defined in Section 3(a)(26) of theSecurities Exchange Act of 1934, asamended;

(6) Engage in any underwriting (orany syndicate for the underwriting) ofsecurities to the extent permitted by thefederal securities laws;

(7) Act as Qualified Block Positionersas defined in SEC Rule 3b-8(c),promulgated under the SecuritiesExchange Act of 1934, as amended, to

the extent permitted by the federalsecurities laws;

(3) Except as provided in SectionsIV.A.(5)—(8) of this stipulation andorder, take any unilateral action or makeany unilateral decision regarding themarket makers with which it will tradeand the terms on which it will trade;and

(9) Engage in conduct protected underthe Noerr-Pennington doctrine.

No finding of any violation of thisstipulation and other may be madebased solely on parallel conduct.

C. In order to ensure compliance withthe provisions of Section IV.A. of thestipulation and order, each defendantshall:

(1) Initiate and maintain an antitrustcompliance program, which shallinclude designating, within ninety (90)days of the effective date hereof, anAntitrust Compliance Officer, who shallbe responsible for establishing andmaintaining an antitrust complianceprogram designed to provide reasonableassurance of compliance with thisstipulation and order and with thefederal antitrust laws by the defendantin its market making activities inNasdaq securities on its OTC desk. TheAntitrust Compliance Officer shallpersonally or through his designee:

(a) Distribute, within thirty (30) daysfrom the effective date hereof or fromthe date of designation of the AntitrustCompliance Officer, whichever is later,a copy of this stipulation and order to:(i) All members of the board of directorsof the defendant (or if there is no boardof directors, to such persons as havesubstantially equivalentresponsibilities); and (ii) all employeesand all officers of the defendant whoseduties or responsibilities include marketmaking in any Nasdaq security onNasdaq;

(b) Distribute within thirty (30) daysof appointment or assignment a copy ofthis stipulation and order (i) to anyperson who becomes a member of theboard of directors of the defendant (orif there is no board of directors, to suchpersons as have substantially equivalentresponsibilities) and (ii) any employeeor officer of the defendant whose dutiesor responsibilities include marketmaking in any Nasdaq security onNasdaq;

(c) Brief semi-annually those personsdesignated in paragraphs (a)(ii) and(b)(ii) of this subsection on the meaningand requirements of the federal antitrustlaws and this stipulation and order inconnection with defendant’s marketmaking activities on its OTC desk inNasdaq securities, and inform them thatthe Antitrust Compliance Officer or adesignee of the Antitrust Compliance


Officer is available to confer with themregarding compliance with such lawsand with this stipulation and order;

(d) Obtain from each persondesignated in paragraphs a (i) and b (i)of this subsection a one timecertification that he or she: (i) Has readand agrees to abide by the terms of thisstipulation and order; and (ii) has beenadvised and understands that aviolation of this stipulation and order bysuch person may result in his or herebeing found in civil or criminalcontempt of court;

(e) Obtain from each persondesignated in paragraphs (a)(ii) and(b)(ii) of this subsection an annualwritten certification that he or she: (i)Has read and agrees to abide by theterms of this stipulation and order; and(ii) has been advised and understandsthat a violation of this stipulation andorder by such person may result in hisor her being found in civil or criminalcontempt of court; and

(f) Maintain a record of persons towhom this stipulation and order hasbeen distributed and from whom thecertification required by paragraphs (d)and (e) of this subsection has beenobtained.

(2) Within forty-five (45) days of entryof this stipulation and order by theCourt, each defendant is required toinstall a system or systems capable ofmonitoring and recording anyconversation on the telephones on itsOTC desk used by such defendant tomake markets in Nasdaq securities.

(3) The Antitrust Compliance Officerof each defendant shall devise amethodology for complying withparagraph 2, 3, and 4 of this Section. Notape recorded segment shall be shorterthan fifteen (15) minutes. Within thirty(30) days of entry of this stipulation andorder by the Court, the methodologyproposed to be employed shall besubmitted to the Antitrust Division forreview and approval.

(4) The Antitrust Compliance Officer,with such trained staff as necessary,shall record (and listen to) not less thanthree and one-half percent (3.5%) of thetotal number of trader hours of suchdefendant; provided, however, that inno case shall the total number of hoursrequired to be recorded (and listened to)exceed seventy (70) hours per week.Persons whose conversations are subjectto monitoring as provided by thisparagraph (4) shall be told of theexistence of the taping system but shallnot be informed as to the times whentheir conversations will or might bemonitored or recorded.

(5) Upon discovery of a conversationwhich the Antitrust Compliance Officerof a defendant believes may violate this

stipulation and order, the AntitrustCompliance Officer shall retain a tape ofsuch conversation, and, shall within ten(10) business days, furnish such tape,and any explanation thereof to theAntitrust Division, in standard audiocassette format, or such other format asmay be acceptable to the AntitrustDivision.

(6) Tapes made pursuant to thisstipulation and order shall be retainedby each defendant for at least thirty (30)days from the date of recording, andmay be recycled thereafter. Tapes madepursuant to this stipulation and ordershall not be subject to civil processexcept for process issued by theAntitrust Division, the SEC, the NASD,or any other self-regulatoryorganization, as defined in Section3(a)(26) of the Securities Exchange Actof 1934, as amended. Such tapes shallnot be admissible in evidence in civilproceedings, except in actions,proceedings, investigations, orexaminations commenced by theAntitrust Division, the SEC, the NASD,or any other self-regulatoryorganization, as defined in Section3(a)(26) of the Securities Exchange Actof 1934, as amended.

(7) The Antitrust Division may visit,during regular business hours, anydefendant’s facilities unannounced, andmay, while there, from a location notobservable by traders, monitorconversations required to be monitoredand recorded pursuant to paragraphs (2)and (4) of this Section in real time inorder to ensure compliance with thisstipulation and order.

(8) Upon request of the AntitrustDivision, a defendant shall immediatelyidentify all tape recordings madepursuant to this stipulation and orderthat are in its possession or control,shall provide the Antitrust Divisionwith the opportunity to listen to anytape recording made pursuant to thisstipulation and order, and shall produceto the Antitrust Division such tapes asthe Antitrust Division may request.

(9) The Antitrust Division may receivecomplaints or referrals concerningasserted possible violations of thestipulation and order and may, basedupon such complaints or referrals, or forthe purpose of monitoring or enforcingcompliance with the stipulation andorder, require the Antitrust ComplianceOfficer (a) to use the system or systemsrequired by Section IV.C.(2) of thisstipulation and order to tape theconversations of a particular person orgroup of persons on its OTC desk forany period of time and (b) not to givenotice of such recordation to suchperson(s). Such requests to tape shall be

subject to the time limitations set forthin paragraph (4) of this subsection.

(10) Each Antitrust ComplianceOfficer shall (in addition to makingreports of violations within ten (10)business days) report quarterly to theAntitrust Division concerning activitiesundertaken to ensure the defendant’scompliance with the stipulation andorder and, specifically, the requirementsof paragraphs (2)–(9) of this Section.Such reports shall detail the precisetimes when conversations weremonitored by the Antitrust ComplianceOfficer pursuant to the requirements ofthis stipulation and order and the nameof each person employed by thedefendant whose conversations wererecorded during such times.

V

CertificationsEach defendant shall certify in the

form attached hereto:A. Within ninety (90) days from the

effective date of this stipulation andorder, that the defendant has designatedan Antitrust Compliance Officer,specifying his or her name, businessaddress, and telephone number;

B. Within forty-five (45) days from theentry of the stipulation and order by theCourt, that the defendant has compliedwith the requirements of SectionsIV.C.(1) (a) and (b); and

C. For five (5) years after entry of thisstipulation and order by the Court,within thirty (30) days of theanniversary of its entry, each defendantshall certify annually (i) whetherdefendant has complied with theprovisions of Sections IV.A. and IV.C. ofthis stipulation and order; and (ii)whether defendant has made changes inits organizational structure likely tohave a significant effect on itscompliance with this stipulation andorder.

VI

Plaintiff’s AccessA. For the sole purpose of

determining or securing compliancewith this stipulation and order, andsubject to any legally recognizedprivilege or work product protection,from time to time duly authorizedrepresentatives of the Department ofJustice shall, upon written request of theAttorney General or of the AssistantAttorney General in charge of theAntitrust Division, and on reasonablenotice to any defendant at its principaloffice, be permitted:

(1) Access during office hours of suchdefendant, which may have counselpresent, to inspect and copy (or torequire defendants to produce copies of)


all records and documents, excludingindividual customer records, in thepossession or under the control of suchdefendant, and which relate tocompliance with this stipulation andorder; and

(2) Subject to the reasonableconvenience of such defendant andwithout restraint or interference fromthe defendant, to interview officers,employees, or agents of such defendant,each of whom may have counselpresent, regarding compliance with thisstipulation and order.

B. Upon the written request of theAttorney General or the AssistantAttorney General in charge of theAntitrust Division made to anydefendant, such defendant shall prepareand submit such written reports, underoath if requested, relating to defendant’scompliance with this stipulation andorder as may be requested.

C. No information, tape recordings, ordocuments obtained by the meansprovided in Sections IV, V, and VI shallbe divulged by any representative of theDepartment of Justice to any personother than a duly authorizedrepresentative of the Executive Branchof the United States, or the SEC, exceptin the course of legal proceedings towhich the United States is a party, or forthe purpose of securing compliancewith this stipulation and order, or asotherwise required by law.

D. If at the time information, taperecordings, or documents are furnishedby any defendant to plaintiff, suchdefendant represents and identifies inwriting the material in any suchinformation or documents to which aclaim of protection may be assertedunder Rule 26(c)(7) of the Federal Rulesof Civil Procedure and said defendantmarks each page of such material,‘‘Subject to Claim of Protection underRule 26(c)(7) of the Federal Rules ofCivil Procedure,’’ then ten (10) daysnotice shall be given by plaintiff to suchdefendant at its Office of GeneralCounsel prior to divulging such materialin any legal proceeding (other than agrand jury proceeding) to which thatdefendant is not a party.

E. Defendants may claim (whichclaim plaintiff shall honor to the extentlegally permissible) protection frompublic disclosure, under the Freedom ofInformation Act, 5 U.S.C. § 552, or anyother applicable law or regulation, forany material submitted to the AntitrustDivision under this stipulation andorder.

VII

Rescission by Plaintiff

The parties agree that the Court mayenter this stipulation and order, uponmotion of any party or upon the Court’sown motion, at any time aftercompliance with the requirements of theAntitrust Procedures and Penalties Act,15 U.S.C. 16, and without further noticeto any party or other proceedings,provided that plaintiff has not notifiedthe parties and the Court that it wishesto rescind its agreement to entry of thestipulation and order. Plaintiff mayrescind its agreement to entry of thestipulation and order at any time beforeentry of the stipulation and order by theCourt by serving notice thereof on thedefendants and by filing that noticewith the Court. In the event plaintiffrescinds its agreement to entry of thestipulation and order, the stipulationand order shall be of no effect whatever,and the agreement among the partiesshall be without prejudice to any partyin this or any other proceeding.

VIII

Jurisdiction Retained

Jurisdiction shall be retained by theCourt to enable any of the parties to thisstipulation and order to apply to theCourt at any time for such further ordersand directions as may be necessary orappropriate for the construction orimplementation of this stipulation andorder, for the enforcement ormodification of any of its provisions, orfor punishment by contempt.

IX

Expiration of Stipulation and Order

This stipulation and order shallexpire ten (10) years from its date ofentry by the Court, except that (a)Section IV.C.(2)–(10) shall expire five(5) years from the date of entry of thisstipulation and order by the Court,except that the Antitrust Division may,after two (2) years, in its sole discretion,notify in writing any defendant that itshall no longer be subject to SectionIV.C.(2)–(10); and (b) Section VI.C., D.,and E. shall not expire.

For Plaintiff United States of America:Anne K. Bingaman (AB–1463),Assistant Attorney General.Hays Gorey, Jr. (HG–1946),John D. Worland Jr. (JW–1962),George S. Baranko (GB–9336),Jessica N. Cohen (JC–2089),Birgitta C. Dickerson (BD–6839),Scott A. Scheele (SS–0496),Allen P. Grunes (AG–4775),Weeun Wang (WW–8178),Richard L. Irvine (RI–8783),William J. Hughes, Jr. (WH–1924),Attorneys, U.S. Department of Justice,Antitrust Division, 600 E Street, N.W., Room9500, Washington, D.C. 20530, 202/616–5119phone, 202/616–8544 fax.

For Defendants: Piper & MarburyBy: Lewis A. Noonberg (LN–8864),1200 19th Street NW., Washington, DC20036–2430, Tel: (202) 861–3900.Attorneys for Alex. Brown & SonsIncorporated.Kramer, Levin, Naftalls & FrankelBy: Robert M. Heller (RH–1297),919 Third Avenue, New York, New York10022, Tel: (212) 715–9100.Attorneys for Bear, Sterns & Co., Inc.Kirkland & EllisBy: Frank M. Helozubiec (FH–0442),Citicorp Center, 153 E. 53rd Street, 39thFloor, New York, New York 10022, Tel: (212)446–4800.Attorneys for Dean Witter Reynolds, Inc.Rogers & WellsBy: Richard A. Cirillo (RC–7472),200 Park Avenue, 53rd Floor, New York, NewYork 10166, Tel: (212) 878–8000.Epstein Becker & Green, P.C.By: Stuart M. Gerson (SG–3017),1227 25th Street NW., Suite 750, Washington,DC 20037, Tel: (202) 861–0900.Attorneys for CS First Boston Corp.Davis Polk & WardwellBy: Robert F. Wise, Jr. (RW–1508),450 Lexington Avenue, New York, New York10017, Tel: (212) 450–4000.Attorneys for Donaldson, Lufkin & JenretteSecurities Corporation.Sullivan & CromwellBy: John L. Warden (JW–6918),125 Broad Street, New York, New York10004, Tel: (212) 558–4000.Attorneys for Goldman, Sachs & Co.Simpson Thacher & BartlettBy: Charles E. Koob (CK–1601)425 Lexington Avenue, New York, New York10017, Tel: (212) 455–2000.Attorneys for Hambrecht & Quist LLC.Shearman & SterlingBy: James T. Halverson (JH–0732),153 East 53rd Street, New York, New York10022, Tel: (212) 848–4000.Attorneys for Herzog, Heine, Geduld, Inc.Davis Polk & WardwellBy: Robert F. Wise, Jr., (RW–1508),


450 Lexington Avenue, New York, New York10017, Tel: (212) 450–4000.Attorneys for J.P. Morgan Securities Inc.Cadwalader, Wickersham & TaftBy: Jeffrey Q. Smith (JS–7435),100 Maiden Lane, New York, New York10038, Tel: (212) 504–6000.Attorneys for Lehman Brothers Inc.Morgan, Lewis & BockiusBy: Catherine A. Ludden (CL–4326),101 Park Avenue, New York, New York10178, Tel: (212) 309–6133.Attorneys for Mayer & Schweitzer, Inc.Weil, Gotshal & MangesBy: Otto G. Obermaier (OO–4399),767 Fifth Avenue, New York, New York10153, Tel: (212) 310–8000.Attorneys for Merrill Lynch, Pierce, Fenner &Smith.Davis Polk & WardwellBy: Robert F. Wise, Jr. (RW–1508),450 Lexington Avenue, New York, New York10017, Tel: (212) 450–4000.Attorneys for Morgan Stanley & Co.Incorporated.Donahue Brown Mathewson & SmythBy: Norman J. Barry, Jr. (NB–6904),20 North Clarke Street, Suite 900, Chicago,Illinois 60602, Tel: (312) 422–0908.Attorneys for OLDE Discount Corporation.Wilmer, Cutler & PickeringBy: A. Douglas Melamed (AM–4601),2445 M. Street NW., Washington, DC 20037–1420, Tel. (202) 663–6000.Attorneys for PaineWebber Incorporated.Shanley & Fisher, P.C.By: Neil Cartusciello (NC–2460),One World Trade Center, 89th Floor, NewYork, New York 10048, Tel: (212) 321–1812.Attorneys for Piper Jaffrey Inc.Skadden, Arps, Slate, Meagher & FlomBy: William P. Frank (WF–7504),919 Third Avenue, New York, New York10022, Tel: (212) 735–3000.Attorneys for Prudential SecuritiesIncorporated.Rosenman & Colin LLPBy: James J. Calder (JC–8095)575 Madison Avenue, New York, New York10022, Tel: (212) 940–8800.Attorneys for Furman Selz LLC.Salomon Brothers Inc.By: Robert H. Mundheim (RM–3766),Managing Director.Seven World Trade Center, New York, NewYork 10048, Tel: (212) 783–7508.Crummy, Del-Deo, Dolan Griffinger &Vecchione, P.C.By: Brian J. McMahon (BM–2377),One Riverfront Plaza, Newark, New Jersey,07102, Tel: (201) 596–4500.Attorneys for Sherwood Securities Corp.Cahill Gordon & ReindelBy: Charles A. Gilman (CG–3924),80 Pine Street, New York, New York 10005,Tel: (212) 701–3000.Attorneys for Smith Barney Inc.Dickstein Shapiro Morin & Oshinsky, L.L.P.

By: Howard Schiffman (HS–7601),2102 L Street NW., Washington, DC 20037,Tel: (202) 785–9700.Attorneys for Spear, Leeds & Kellogg, LP(Troster Singer).Sullivan & CromwellBy: Philip L. Graham, Jr. (PG–5028),125 Broad Street, New York, New York10004, Tel: (212) 558–4000.Attorneys for UBS Securities LLC.Nash, Weiss & Co.Paul B. UhlenhopLawrence, Kamin, Saunders & Uhlenhop, 208South LaSalle Street, #1750, Chicago, Illinois60604, Tel: 312/372–1947, Fax: 312/372–2389.

The Court having reviewed theComplaint and other filings by theUnited States, having found that thisCourt has jurisdiction over the parties tothis stipulation and order, having heardand considered the respective positionsof the United States and the defendants[at a hearing on llllll, 1996,]and having concluded that entry of thisstipulation and order is in the publicinterest, it is hereby ORDERED:

THAT the parties comply with theterms of this stipulation and order;

THAT the Complaint of the UnitedStates is dismissed with prejudice;

THAT the Court retains jurisdiction toenable any of the parties to thisstipulation and order to apply to theCourt at any time for such further ordersand directions as may be necessary orappropriate for the construction orimplementation of this stipulation andorder, for the enforcement ormodification of any of its provisions, orfor punishment by contempt.

SO ORDERED this ll day ofllll, 1996.lllllllllllllllllllllUnited States District Judge

Certification Form (Attachment toStipulation and Order)

On behalf of [Name of Defendant], I[Name] hereby certify in accordancewith Section V of the Stipulation andOrder, dated llll, in [caption ofcase] that:(Check All Applicable Certifications):( ) [Name of Defendant] has designated

an Antitrust Compliance Officer,whose name, business address, andtelephone numbers are:

Name: lllllllllllllllllAddress: lllllllllllllllllllllllllllllllllllllTelephone No.: lllllllllllll

( ) [Name of Defendant], under thesupervision of its AntitrustCompliance Officer, has distributedcopies of the Stipulation and Orderto all persons designated inSections IV.C.(1) (a) and (b) of theStipulation and Order.

( ) [Name of Defendant], under thesupervision of its AntitrustCompliance Officer, has:

(a) Initiated and maintained anantitrust compliance program, asprovided for in Section IV.C.(1) ofthe Stipulation and Order;

(b) Briefed semi-annually thosepersons designated in SectionsIV.C.(1) (a)(ii) and b(ii) of theStipulation and Order on themeaning and requirements of thefederal antitrust laws and theStipulation and Order inconnection with its market makingactivities in Nasdaq securities onNasdaq;

(c) Obtained the certificationsidentified in Sections IV.C.(1) (d)and (e) of the Stipulation and Orderand maintained a record thereof;

(d) Established monitoring andrecording system or systems(Section IV.C.(2) of the Stipulationand Order), obtained the approvalof the Antitrust Division of therelevant methodology (SectionIV.C.(3) of the Stipulation andOrder), and recorded (and listenedto), in accordance with theapproved methodology, not lessthan the lesser of three and one-halfpercent (3.5%) of the total numberof trader hours of seventy (70) hoursper week (Sections IV.C.(2) and (4)of the Stipulation and Order);

(e) Retained and provided to theAntitrust Division any tape calledfor by Section IV.C.(5) of theStipulation and Order;

(f) Complied with the requests, if any,of the Antitrust Division pursuantto Sections IV.C.(8) and (9) of theStipulation and Order; and

(g) Made quarterly reports to theAntitrust Division concerningactivities undertaken to ensurecompliance with the Stipulationand Order, as provided for bySection IV.C.(10).

Based upon the foregoing, therepresentations of market makersemployed on the OTC desk and theirimmediate supervisors, and such otherprocedures as have been established toprovide reasonable assurance ofcompliance with Sections IV.A. andIV.C. of the Stipulation and Order, Ihave no reasonable cause to believe that,during the year ended ll, 199l,[Name of Defendant] has failed tocomply with Sections IV.A. and IV.C. ofthe Stipulation and Order, [except to theextent previously reported to theAntitrust Division in reports,dated ll]. In addition, I am aware ofno change in [Name of Defendant’s]organization structure likely to have a


1 The term ‘‘Nasdaq’’ was originally an acronymfor the ‘‘National Association of Securities DealersAutomated Quotation System.’’ The automatedquotation system is now operated by The NasdaqStock Market, Inc.

2 All of the private cases have been consolidatedand assigned to Judge Robert W. Sweet in theSouthern District of New York, M.D.L. 1023.

significant effect on its compliance withthis Stipulation and Order, [exceptfor llll].lllllllllllllllllllllAntitrust Compliance Officer [Name ofDefendant][Date], 199lHays Gorey, Jr. (HG 1946)United States Department of JusticeAntitrust Division600 E Street, N.W., Room 9500Washington, D.C. 20530(202) 307–6200Attorney for Plaintiff United States of

America

Competitive Impact StatementPursuant to Section 2(b) of the

Antitrust Procedures and Penalties Act(‘‘APPA’’ or ‘‘Tunney Act’’), 15 U.S.C.16(b)–(h), the United States submits thisCompetitive Impact Statement relatingto the proposed Stipulation and Ordersubmitted for entry with the consent ofdefendants in this civil antitrustproceeding.

I

Nature and Purpose of the ProceedingOn July 17, 1996, the United States

filed a Complaint alleging that thedefendants have engaged in price fixingin violation of Section 1 of the ShermanAct, 15 U.S.C. § 1. On the same day, theUnited States and the defendants fileda Stipulation and Order (‘‘proposedOrder’’) to resolve the allegations in theComplaint. Entry of the proposed Orderis subject to the APPA.

The defendants are all major ‘‘marketmakers’’ in over-the-counter (‘‘OTC’’)stocks quoted for public trading on thecomputerized stock quotation systemknown as Nasdaq.1 The United Statesalleges in its Complaint that thedefendants and others adhered to andenforced a ‘‘quoting convention’’ thatwas designed to and did deter pricecompetition among the defendants andother market makers in their trading ofNasdaq stocks with the general public.The United States believes thatinvestors have incurred highertransaction costs for buying and sellingNasdaq stocks than they would haveincurred had the defendants notrestrained competition through theirillegal agreement.

The proposed Order will eliminatethe anticompetitive conduct identifiedin the Compliant and establishprocedures that will ensure that suchconduct does not recur. Specifically, theproposed Order prevents the defendants

from agreeing with other market makesto adhere to the quoting convention, orto fix, raise, lower, or maintain prices orquotes for Nasdaq securities. Theproposed Order also requires eachdefendant to adopt an antitrustcompliance program and designate anantitrust compliance officer to ensurethe firm’s future compliance with theantitrust laws. To this end, the proposedOrder requires the compliance officer to(1) randomly monitor and tape recordtelephone conversations between stocktraders and (2) report any violations ofthe proposed Order within ten businessdays to the Antitrust Division of theDepartment of Justice (‘‘theDepartment’’).

The proposed Order also requires thatthese tape recordings be made availableto the Department for its review. Theproposed Order gives the Departmentauthority to receive complaints ofpossible violations, to visit defendants’offices unannounced to monitor traderconversations as they are ongoing, todirect taping of particular suspectedviolators, and to request copies of tapesas they are made. The Court may punishviolations of its proposed Order withcivil or criminal contempt, includingfines and incarceration for willfulflouting of the Court’s order. See, e.g.,United States v. Schine, 260 F.2d 552(2d Cir. 1958), cert. denied, 358 U.S. 934(1959), and 18 U.S.C. § 401.

The United States and the defendantshave agreed that the proposed Ordermay be entered after compliance withthe APPA, provided that the UnitedStates has not withdrawn its consent toentry of the proposed Order. Theproposed Order provides (as is standardin the Department’s settlements) that itsentry does not constitute any evidenceagainst or admission by any party withrespect to any issue of fact or law. Entryof the proposed Order will terminatethis civil action as to the defendants,except that the Court will retainjurisdiction for further proceedings thatmay be required to enforce or modifythe order entered, or to punishviolations of any of its provisions.

II

The Department’s InvestigationThe Complaint and proposed Order

are the culmination of a major, two-yearinvestigation by the Department of thetrading activities of Nasdaq securitiesdealers. The Department’s investigationbegan in the summer of 1994, shortlyafter the public disclosure of aneconomic study by Professors WilliamChristie of Vanderbilt University andPaul Schultz of Ohio State University(the ‘‘Christie/Schultz study’’). The

Christies/Schultz study suggested thatsecurities dealers on Nasdaq may havetacitly colluded to avoid odd-eighthprice quotations on a substantialnumber of Nasdaq stocks, includingsome of the best known and mostactively traded issues, such as MicrosoftCorp., Amgen, Apple Computers, Inc.,Intel Corp., and Cisco Systems, Inc.After the Christie/Schultz study hadreceived wide-spread publicity, andshortly before the Department openedits investigation, several class actionlawsuits alleging antitrust violationswere filed against the defendants andother Nasdaq market makers.2

During the course of its investigation,the Department has reviewed thousandsof pages of documents that wereproduced by the defendants and othermarket participants in response to over350 Civil Investigative Demands(‘‘CIDs’’) issued by the Department. TheDepartment has reviewed hundreds ofresponses to interrogatories that weresubmitted by the defendants (andothers). The Department has taken over225 depositions of individuals withknowledge of the trading practices ofNasdaq market makers, includingcurrent and former officers andemployees of the defendants and otherNasdaq market makers, as well asofficials and committee members of theNational Association of SecuritiesDealers, Inc. ‘‘NASD’’), the organizationresponsible for oversight of the Nasdaqmarket.

The Department conducted numeroustelephone and in-person interviews ofcurrent and former Nasdaq stocktraders, Nasdaq investors, and otherswith relevant knowledge of theindustry, and listened to approximately4500 hours of audio tapes of telephonecalls between stock traders employed bythe defendants and other Nasdaq marketmakers. These audio tapes had beenrecorded by certain of the defendants(and other market makers) in theordinary course of their business andwere produced to the Department inresponse to its CIDs.

The Department has reviewed andanalyzed substantial quantities ofmarket data produced in computer—readable format by the NASD. Thesedata include data showing all marketmaker quote changes on Nasdaq duringa twenty-month period betweenDecember 1993 and July 1995, and forselected months thereafter, includingMarch 1996. The Department alsoreviewed eighteen months of data ontrades in Nasdaq stocks. Finally, the


3 Various other forms of public stock marketshave arisen in the United States and elsewhere toprovide the service of bringing together investororders to buy and sell. The most commonlyrecognized form of organized stock market in theUnited States is the so-called ‘‘auction market,’’such as the New York Stock Exchange or theAmerican Stock Exchange. The auction marketsystems provide ‘‘immediacy’’ to the investingpublic by bringing all of the buy and sell orders forthe stocks together on the ‘‘floor’’ of the exchangefor execution. For each stock so traded on anexchange, the exchange designates a ‘‘specialist.’’The job of the specialist is to match the public’s buyand sell orders, and to the extent that there is animbalance in those orders, the specialist issupposed to use his own capital to ensure that themarket clears in an ‘‘orderly’’ fashion. The exchangespecialist is by design a monopolist, and his roleis heavily required.

4 Not all market makers make markets in the samestocks. There are currently over 4000 stocks in theNasdaq National Market System (‘‘NMS’’), andalmost 2000 stocks in the Nasdaq Small CapMarket. The defendants trade man of the largerNasdaq issues in common with one another.

5 The inside spread in a stock is not alwaysconstant. Instead, as market makers displaydifferent bid and ask quotes, it may vary—possibly,for example, beginning at 1⁄8, widening to 1⁄4, thento 3⁄8, narrowing to 1⁄4 again and then back to 1⁄8.

Department reviewed numeroustranscripts of depositions taken by theSecurities and Exchange Commission(‘‘SEC’’) in a concurrent inquiry into theoperations and activities of the NASDand the Nasdaq market since the fall of1994.

Based on the evidence uncoveredduring this substantial investigativeeffort, the Department concluded thatthe defendants and others had beenengaged for a number of years inanticompetitive conduct in violation ofthe Sherman Act, as is now alleged inthe Complaint. The next section of thisStatement will summarize the evidencethat the United States believes supportsthe specific allegations in its Complaint.

III

Summary of Evidence in Support ofComplaint

A. The Nasdaq Market

Nasdaq is a computerized publicmarket in which investors buy and sellOTC stocks. It is the second largestsecurities market in the United States.Nasdaq is a ‘‘dealer market.’’ In a dealermarket, a number of securities dealers‘‘make markets’’ in the same stock. To‘‘make a market,’’ securities dealers—ormarket makers as they are known—quote a price at which they are willingto buy a particular stock, andsimultaneously quote another higherprice at which they are willing to sellthat same stock. The market makers onthe Nasdaq ‘‘dealer market’’ aresupposed to provide the investingpublic with ‘‘immediacy’’ or ‘‘liquidity’’in competition with each other.3 Thus,in principle, the orders of the investingpublic are supposed to be able to findthe best available prices to buy or sellfrom many different market makers,who are supposed to be using theircompeting prices to attract those orders.To the extent that these market makers

do not compete in this fashion, theinvesting public is disadvantaged.4

1. Dealer Quotes and the Dealer SpreadNasdaq market makers publicize the

prices at which they are willing to buyor sell a stock by entering those‘‘quotes’’ for display on the Nasdaqcomputerized quotation system. Theprice at which a market maker is willingto buy a security is called its ‘‘bid’’ or‘‘bid price.’’ The price at which a marketmaker is willing to sell a security iscalled its ‘‘ask’’ or ‘‘ask price’’ (or its‘‘offer’’ or ‘‘offer price’’). Each marketmaker must simultaneously quote botha bid and an offer price. The differencebetween an individual market maker’sbid price and its offer price in a specificsecurity is known as its ‘‘dealer spread.’’Thus, for example, if a market maker’sbid price in a stock (the price it iswilling to pay to buy stock from acustomer or another market maker) is$20 and its offer price (the price atwhich it is willing to sell stock to acustomer or another market maker) is$203⁄4, the market maker has a dealerspread in that stock of 3⁄4 point (75 centsper share).

2. Inside Quotes and the Inside SpreadIn the case of each Nasdaq stock, there

are at least two market makers. Onaverage, there are between ten andtwelve market makers in each NasdaqNMS stock, although the number ofmarket makers in specific stocks varieswidely. The Nasdaq computer screencollects and displays the bid and offerprices of all the market makers in eachstock. The highest bid and the lowestoffer from among the quotes of all themarket makers in a stock are called the‘‘inside bid’’ and the ‘‘inside ask,’’ or the‘‘inside quotes.’’ The difference betweenthe inside bid and the inside ask in astock is called the ‘‘inside spread.’’Thus, for example, it there are threemarket makers in a stock displaying thefollowing bid and ask prices—

Bid Ask

Market Maker No. 1: ......... 191⁄2 201⁄4Market Maker No. 2: ......... 193⁄4 201⁄2Market Maker No. 3: ......... 20 203⁄4

—the inside spread in the stock wouldbe 1⁄4 (25 cents), based upon thedifference between Market Maker No.3’s high bid of 20 and Market Maker No.1’s low offer of 201⁄4.

As a general rule, market makers atany given point in time have a greaterinterest in buying than in selling asecurity, or vice versa. Market makersmay reflect that interest in the quotesthey post on Nasdaq. Market makerswith a greater buying interest may, andoften do, display a higher bid; marketmakers with a greater selling interestmay, and often do, display a lower offer.It is extremely unusual to see a singlemarket maker on both sides of the insidespread.5

3. The Importance of the Inside SpreadMarket makers trade as principals

with other market makers and also fillcustomer orders. Customer orders canbe from retail brokers who route ordersfrom investors seeking to buy (or sell) asmall quantity of Nasdaq stock—referred to as ‘‘retail customers’’—orfrom a large institutional investor suchas a mutual or pension fund seeking tobuy (or sell) many thousands of sharesof Nasdaq stock. If a customer does notlimit or specify the price it will pay tobuy (or accept to sell) a stock, which isthe case of most orders received fromretail customers, the order is called a‘‘market order.’’

In executing a market order on behalfof a retail customer, market makershistorically bought from the customer atthe inside bid, and sold to the customerat the inside ask. This execution by themarket maker satisfied the retailbroker’s obligation of ‘‘best execution’’for the retail customers. For retailcustomers, the inside Nasdaq quote isthe price at which most retailtransactions with market makers in factoccurred.

Market makers’ compensation is inlarge part derived from the spread—thedifference between the price at whichthe market makers can buy and, in turn,sell the stock in question. Thus, whenthe inside spread is wider, the marketmaker receives more compensation, andthe retail customer pays a higher price,for the market maker’s services.

The width of the inside spread alsoaffects institutional trades. While largeinstitutional customers may be able tonegotiate prices that are better than theinside spread, the inside spreadinfluences many of the negotiationsbetween the market maker and itsinstitutional customers.

Market makers thus have a significantinterest in each others’ price quotesbecause those quotes can either set eachothers’ actual transaction prices or


6 All Nasdaq stocks may be quoted in 1⁄8 pointincrements.

7 That the use of only even-eighths will result ina minimum inside spread of no less than 1⁄4 pointcan be shown simply. If market makers alwaysmove in quarter-point increments, and all initiatetheir bid and ask quotes on even-eighths, all odd-eighth quotes will have been eliminated from thenumber set. The set of numbers remaining—wholenumbers, 1⁄4, 1⁄2, and 3⁄4—would be the onlynumbers on which market maker quotes could fall.Hence, the difference between those even numberswould also be an even number, meaning the insidespread could not narrow to less than 1⁄4 point.

significantly affect those prices. Thiscreates an incentive for market makersto discourage bid and ask pricecompetition that may have the effect ofnarrowing the inside spread. Theevidence obtained during the Division’sinvestigation shows that the marketmakers have discouraged competition,to great effect, through the adoption andenforcement of the quoting convention,as is discussed below.

B. The Quoting Convention

The Department’s investigationuncovered the existence of a long-standing, essentially market-widecommitment among market makers toadhere to a two-part ‘‘quotingconvention’’ that dictates the priceincrements a market maker can use toadjust or ‘‘update’’ bid and ask pricequotes on the Nasdaq system. Under thefirst part of the quoting convention, if amarket maker’s dealer spread in a stockis 3⁄4 point (75 cents) or wider, themarket maker is required to quote its bidand ask prices in even-eighthincrements (e.g., 1⁄4 (25 cents), 1⁄2 (50cents), 3⁄4 (75 cents) or 4⁄4 ($1).6 Thisensures that the inside spread in thosestocks is maintained at 1⁄4 point (25cents), or greater.7

Under the second part of the quotingconvention, market makers can quotebid and ask prices on Nasdaq in odd-eighth increments, e.g., 1⁄8 (12.5 cents),3⁄8 (37.5 cents), 5⁄8 (62.5 cents) or 7⁄8(87.5 cents), only if they have a dealerspread of less than 3⁄4 point. Thisrequirement has deterred market makersfrom quoting bid and ask prices in odd-eighth increments because a narrowerdealer spread is likely to create a greatereconomic risk to the market maker intrading that stock. When the differencebetween a market maker’s bid and askquotes is 1⁄2 rather than 3⁄4, a marketmaker may be called upon to buy (orsell) more stock than the trader wants,or buy stock when the market makerwants to sell (or vice versa).

The fact that the quoting conventionhas existed for at least three decades inthe OTC and Nasdaq markets was well-known throughout the industry, andfully described to the Department by a

number of traders at prominent firmsduring the Department’s investigation.These traders testified that they weretaught to follow the convention, thatthey in fact followed it, and that theyunderstood and expected traders atother firms to follow it as well. Thefollowing deposition excerpts areexamples of the testimony on thissubject obtained by the Department andthe SEC during their investigations,from a variety of deponents. As onetrader testified:

Q. If—if the firm spread in aparticular stock is three-quarter-point orgreater, the—when—when the firmmoves its quote, it will move inincrements of at least a quarter; is thatright?

A. That’s correct; in quarters, plural.So either one—you either move it up aquarter or up a half. You would notmove it up three-eighths or five-eighthsor anything.

Q. Right. And that—that’s oneconvention.

A. That’s correct.Q. And another convention is that if

the stock—if the firm spread in a stockis one half or less, the—the incrementof movement of quotes would be inincrements of an eighth.

A. That’s correct.Q. * * * generally speaking, these

conventions have been understood andfollowed by market makers in theNasdaq market; is that right?

A. Yes, to my knowledge.Another trader described the

convention as an ‘‘historicalrelationship’’ between dealer spreadsand the size of quote increments:

Q. Let’s come back to that in a littlewhile. Is there a relationship betweenthe width of the spread and theincrement by which quotes are made?

A. Yes, there is a historicalrelationship. The width of the spread ofa dealer and how quotes are made.

Q. What’s the historical relationshipthat you’re talking about?

A. That dealer spreads of a half apoint historically trade in 1⁄8 of a pointincrement, and dealer spreads of 3⁄4 ofa point and higher historically havetraded for 1⁄4 of a point increment.

Another trader confirmed theoperation of the quoting convention andits lengthy duration:

Q. And in terms of dealer spreads thatwere three-quarters, when the dealerspread was three-quarters, marketmakers moved in quarter pointincrements for a large number of years.Is that correct?

A. Traditionally, if your spread wasthree-quarters of a point or more, uh,you moved your market in quarter pointincrements.

Q. And that was because it wasunprofessional to move in eighthswithout closing the dealer spread to ahalf; is that correct?

A. Yes, ma’am.[A] And if the stock trades with a

* * * you think you’ll have to tradewith a three-quarter point spread. Thenyou should be moving your quotation inquarter point increments. And it’s oneof those things I can’t tell you why. It’ssomething that I think all of us havebeen doing for a gazillion, G-A-Z-A-L-L-I-O-N years, certainly for 30 years, andit has everything to do with theprofessional appearance of that, thatmarketplace.

The evidence adduced by theDepartment does not disclose the originof the quoting convention. No deponentwas found who could testify as to howor precisely when the quotingconvention began, although numerouswitnesses testified that the Nasdaqmarket had operated under this‘‘tradition,’’ or ‘‘practice,’’ or‘‘convention’’ for many years. There isno evidence that the quoting conventionwas the result of an express agreementreached among all of the market makersin a smoke-filled room. Nevertheless,there is substantial evidence that thisquoting convention—however it arose—distilled or hardened over time into thevery type of ‘‘agreement’’ condemned bythe Sherman Act—a ‘‘consciouscommitment to a common schemedesigned to achieve an unlawfulobjective,’’ which has restrained pricecompetition among the defendants andothers in the Nasdaq market. SeeMonsanto Co. v. Spray-Rite Serv. Corp.465 U.S. 752, 764 (1984).

Additional evidence of agreement toadhere to the quoting convention,alleged in the complaint andsummarized briefly below, includes: (1)market data demonstrating thatdefendants’ price quoting behavior wasremarkably and unnaturally parallel,and in conformance with the quotingconvention; (2) evidence showing thatthe quoting convention was vigorouslyenforced through industry-wide peerpressure, and intimidating telephonecalls to, and refusals to deal with,market makers who did not quote bidand ask prices in conformance with theconvention; (3) evidence that it was notin the economic self-interest of marketmakers to rigidly adhere to the quotingconvention to the degree they did,absent the understanding that all othermarket makers would comply; (4)market data showing that market makersbegan to change their price quotingpractices when confronted by theadverse publicity from the Christie/Schultz study and the increasing


8 The twenty-six excluded stocks were all pricedat less than $10, and, as a result, could be quotedin ‘‘sixteenths’’ (1⁄16 point increments) on Nasdaq.

9 The Department’s findings, although covering adifferent time period and a different sample ofstocks, were consistent with the Christie/Schultzstudy, which found virtually no odd-eighth pricequotes in approximately 70% of the stocks in theirsample.

10 The structure of the Nasdaq market facilitiesdetection of deviations from the well-understoodquoting convention. All Nasdaq price quotes by allmarket makers are entered on the Nasdaq computersystem and are immediately known to thoseinterested. Thus, deviations are obvious, and can beresponded to immediately.

pressures from the governmentinvestigations; and (5) market datashowing that market makers used anelectronic trading system known asInstinet on which to quote and trade, atodd-eighth prices, the same Nasdaqstocks that they quoted only in even-eighths on the Nasdaq system.

The evidence addressed in each ofthese points is of the type that courtshave found sufficient to establish anagreement in violation of Section 1 ofthe Sherman Act, as is discussed brieflybelow.

C. Defendants’ Adherence to theConvention is Confirmed by MarketData

Until confronted by the adversepublicity from the Christie/Schultzstudy and the increasing pressure fromgovernment investigations, thedefendants routinely, and with rareexceptions, adhered to the quotingconvention. As a result, their pricequoting behavior was remarkably andunnaturally parallel. Despite thehundreds of thousands of bid and askprices that were quoted by thedefendants (and other market makers)on the Nasdaq system, very few odd-eighth prices were entered in stocks inwhich defendants’ dealer spreads were3⁄4 point or wider. When defendantsentered odd-eighth quotes in thesestocks, those quotes were largelymistaken entries—usually of shortduration, and promptly corrected.

The market data analyzed by theDepartment during its investigationshow this adherence to the quotingconvention. The Department based itsanalysis on the NASD’s Market MakerPrice Movement Reports (‘‘MMPMRs’’),which contain detailed informationregarding the price quotes by marketmakers for all Nasdaq stocks, and theNASD’s Equity Audit Trail Report,showing all trades by all market makersin all stocks. The Department receivedfrom the NASD monthly MMPMR datafor the period December 1993 throughJuly 1995, plus September andDecember 1995 and March 1996. Tocreate a manageable subset of these data,the Department used the Equity AuditTrail to calculate the volume, in dollarterms, for all Nasdaq stocks for theeighteen months from February 1994through July 1995. From thesecalculations, the Department selectedthe 250 stocks with the largest dollarvolume of transactions for theseeighteen months. Twenty-six stockswere excluded from this sample,8

resulting in the final data set of 224 ofthe top-dollar volume Nasdaq stocksduring the defined time period.

An analysis of quotes in the 224 stocksample shows the dramatic extent towhich the defendants avoided odd-eighth quotes in Nasdaq stocks. Asshown in Exhibit A, in early 1994, fully65–70% of the sample, had virtually noodd-eighth bid and ask price quotes.9Exhibit B illustrates that the defendantsachieved this unexpected result bysystematically avoiding odd-eighthquotes in stocks with dealer spreads of3⁄4 point or more. The remaining 30–35% of stocks in the sample generallyhad dealer spreads less than 3⁄4 andwere quoted in both even- and odd-eighths. Thus, the sample reflectsalmost uniform adherence to theconvention.

By way of further illustration, ExhibitC demonstrates the systematicavoidance of odd-eighth quotes in ten ofthe largest volume stocks on Nasdaq.The fact that there are virtually no odd-eighth bid and ask prices quoted insome of the most heavily traded stockson Nasdaq is remarkable, particularlywhen one considers that each marketmaker is likely updating its price quotesin these stocks numerous times eachday. This unnatural price parallelismprovides some—but not conclusive—evidence of an antitrust agreement inviolation of Section 1 of the ShermanAct. See e.g., Theatre Enters., Inc. v.Paramount Film Distrib. Corp., 346 U.S.537, 540 (1954), and Apex Oil Co. v.DiMauro, 822 F.2d 246, 258 (2d Cir.1987).

D. The Evidence Shows ThatDefendants Enforced the QuotingConvention Through Peer Pressure,Intimidation, and Refusals to Deal

The Department’s investigation hasuncovered substantial evidence thatNasdaq market makers have enforcedthe quoting convention by reminding,pressuring, harassing, and intimidatingeach other into conformity.10 Thequoting convention protocol waselevated to the status of a ‘‘professional’’or ‘‘ethical’’ rule. The industry evencoined a derisive term—‘‘Chinesemarket’’—as a shorthand to describe a

market in which a trader has entered aquote inconsistent with the establishedpatterns. And the evidence indicatesthat market makers have attempted topunish economically those marketmakers who deviate from the agreed-upon pricing norms. Under AmbookEnterprises v. Time, Inc., 612 F.2d 604(2d Cir. 1979), cert. dism’d, 448 U.S. 914(1980), United States v. Foley, 598 F.2d1323 (4th Cir. 1979) cert. denied, 444U.S. 1043 (1980); In re Nasdaq MarketMakers Antitrust Litigation, 894 F.Supp. 703 (S.D.N.Y. 1995); and unitedStates v. Paramount Pictures, Inc., 334U.S. 131, 161 (1948), the trier of factmay draw an inference of an antitrustagreement, where coercion is proved inaddition to unnatural uniformity ofpricing.

1. Violating the Quoting ConventionWas Considered to Be ‘‘Unprofessional’’or ‘‘Unethical’’

The Nasdaq market is highlyinterdependent, making it easy toenforce compliance with ‘‘professional’’quoting standards. Market makers relyon each other to provide order flow,information, and cooperation to helpthem trade positions profitably. Theyactively work to develop and maintainfriendly relationships with traders fromother firms. Traders do not want othermarket makers to perceive them as beinguncooperative, ‘‘unethical,’’ or‘‘unprofessional’’ because that veryperception may result in their loss ofaccess to the trader networks thatprovide order flow, information, andcooperative trading opportunities.Retaliatory actions—even simplyputting offenders ‘‘last in line’’ whenbuying or selling stock—serve to detervigorous competition and punishmarket makers who violate theunwritten ‘‘ethical’’ and ‘‘professional’’requirements of the Nasdaq market.

Over the years, it has become well-known throughout the industry thatviolating the convention—in theparlance of the traders, ‘‘breaking thespread’’—is considered to be‘‘unprofessional’’ or ‘‘unethical’’ tradingbehavior. Market makers who deviatefrom the convention are derisively saidto be creating a ‘‘Chinese market.’’Numerous witnesses testified to thisfact. One trader defined a ‘‘Chinesemarket’’ as follows:

Q. Let me understand what you meanby a Chinese market. What’s thedefinition you’re giving to the term—

A. That’s when you have a 3⁄4 pointspread and you move in 1⁄8th of a pointincrements.

Another trader testified that marketmakers were trained not to put in quotes


11 However, evidence of enforcement activityvaries significantly from firm to firm.

that created Chinese markets, becausethey were deemed ‘‘unprofessional’’:

[Q] And through the period December‘93 through December of ‘94, do youobserve the market makers entered very-relatively few odd-eighths. And by that,I mean with perhaps one or twoexceptions, under 10 percent of theirquotes were odd eighths in McCormick.

A. Yes, ma’am.Q. And again, is that, in your

professional opinion, because thosemarket makers had three-quarter pointdealer spreads and did not want to enterwhat were termed ‘‘unprofessionalmarkets’’?

A. Yes, ma’am.Q. How is it that all of the market

makers knew that entering an oddeighth quote could be unprofessional?* * * * *

A. Young traders were trained overthe years not to put in unprofessionalmarkets, ‘‘Chinese markets.’’ * * ** * * * *

This was part of the—of thetraditional and ethical on-the-jobtraining that all of us got, and itecompasses not only that you don’t putin unprofessional-looking ‘‘Chinesemarkets,’’ it * * * grew out of a self-imposed industry standard of ethics andconduct. So that’s my answer as to whyeverybody seems to be doing this,because most of the people were trainedthe same way.

Another trader acknowledged that theterm Chinese market referred to whatthe industry considered ‘‘unethical’’trading practices:

Q. Have you ever heard that peopleusing the term—strike that. Wouldsomebody making a Chinese marketcause another market maker to beangered?

A. I believe that’s possible.Q. Under what circumstances?A. I think that in—like I said before,

in coming up, I think Chinese markets,as they’re called, were looked downupon so are considered unethical. so bymaking a Chinese market, You’remaking yourself unethical and,therefore, I guess upsetting other marketmakers.

That it was deemed unethical to‘‘make a Chinese market’’ was evenpublicized in a newsletter published bythe Security Traders Association of NewYork (‘‘STANY’’), the largest regionalaffiliate of the Security TradersAssociation (‘‘STA’’), the principalnational trade association for securitiestrading professionals. STANY’Squarterly newsletter for the third quarterof 1989 reported on the presentations atan ‘‘Ethics Conference’’ held in April1989. The article misreported that a

speaker had said that ‘‘making a Chinesemarket’’ was ‘‘clearly ethical.’’ Tocorrect the incorrect report, STANYpublished an ‘‘update,’’ at the top ofwhich was printed, in large type, thefollowing ‘‘Editor’s Note’’:

In the recently issued STANYNEWSLETTER, we are certain you willrealize that * * * was grosslymisquoted when a portion of his speechwas extracted for publication. Acorrected copy is featured below.

As * * * and you are all aware, it isclearly UNETHICAL to make a ChineseMarket or to run ahead of an order.(emphasis and Caps in original of word‘‘unethical’’)

The evidence shows that peerpressure was used by market makers toensure that so-called ‘‘professional’’ and‘‘ethical’’ pricing standards weremaintained. Trader testimony alsodemonstrates that ‘‘peer pressure’’ waseffective in keeping spreads wide.

2. Phone Calls Were Used To ObtainCompliance

Much of the business of Nasdaqtraders is done on the telephone. Thus,it is not surprising that phone calls wereemployed market-wide to securecompliance with the quotingconvention. At times, all that wasneeded to correct a Nasdaq trader’snonconforming spread or quote was asimple ‘‘friendly’’ inquiry, as illustratedby the following evidence. As one tradertestified:

Q. Did you ever see other firms, whenyou were watching trading on theNASDAQ screen, make Chinesemarkets?

A. Uh-hum. Yes.Q. What was your reaction when you

would see that?A. Didn’t like it.Q. What would you do?A. I’d call them up and say, would

you please close your spread? If you’regoing to bid that price, close yourspread.

Q. Meaning what?A. If you’re going to bid that—you

know, that eighth, close your spread toa half a point.

In response to the Department’sinterrogatories, another firm stated:

[A trader] recalled that once, whenshe first started trading (probably a yearor two ago) she intended to update hermarket in Chiron CP (CHIR) by movingfrom the offer to the bid after her offerhad been taken by another trader, butshe mistakenly moved up 1⁄8 instead of1⁄4. Subsequently, a [trader from anotherfirm] called and asked why she wasquoting in 1⁄8s. [The trader] checked herquotes, realized she had not fully

updated her market, and moved up anadditional 1⁄8.

On other occasions, traders resorted tomore intimidating telephone calls toexact compliance with the quotingconvention. Some of the more dramaticexamples of these were captured on theaudio tapes that were produced by thedefendants, as the following exampleillustrates:

Trader 1: Who trades CMCAF in yourplace without yelling it out?

Trader 2: * * * SammyTrader 1: Sammy who?Trader 2: It may be the foreign

department * * *Trader 1: What?Trader 2: The foreign didn’t realize

they had to trade it.Trader 1: Well, he’s trading it in an

eighth and he’s embarrassing * * *Trader 2: * * * foreign departmentTrader 1: He’s trading it in eighths

and he’s embarrassing your firm.Trader 2: I understand.Trader 1: You know. I would tell him

to straighten up his [expletive deleted]act and stop being a moron.

The record of the investigation isreplete with proof that market makersused the telephone to securecompliance with their understandingsabout ‘‘proper’’ quoting protocols.11

Indeed, a NASD employee responsiblefor interacting with the market makingcommunity recognized that telephonecalls, which he described on oneoccasion as ‘‘price fixing calls,’’ werefrequently used to enforce compliancewith the quoting convention.

3. Refusals to Trade Were Used toPunish Maverick Market Makers

Firms that repeatedly enter quotationsin violation of the quoting conventionwere subject to other types of discipline,with a more direct economic impact ontheir businesses. The most effectivesuch discipline was refusal to deal.

A refusal to deal in the context of theNasdaq market has far reachingconsequences for a market maker.Market makers are competitors to attractorder flow, but they also frequentlytrade with one another. When a marketmaker does not want to fill a retail orinstitutional order from its own account,it must be able to find other marketmakers willing to fill those orders;otherwise, its retail and institutionalclients will soon look elsewhere fortrading services. Similarly, a marketmaker must be able to go to other marketmakers to lay off risk from long or short


12 A ‘‘short’’ position occurs when a trader sellsstock that he or she does not own. A ‘‘long’’position occurs when a trader owns stock that is notpledged for sale to a customer or another marketmaker.

13 The Trading Committee, which consistedlargely of market makers, was one of the mostpowerful of the NASD’s ‘‘self-regulatory’’committees. It was the principal committeeresponsible for recommending changes to the NASD

Board of Governors in the trading rules governingNasdaq.

positions.12 Consequently, the merethreat that other firms will not tradewith them was often sufficient todiscourage market makers fromviolating the convention.

Maverick market makers thatimproved the best quote often wouldnot get an execution, even though otherorders were being filled at themaverick’s quoted price. This refusal totrade is referred to in the industry as‘‘trading around.’’ The same maverickfirm would also frequently notice ordersbeing filled at inferior prices to theprices they had quoted on Nasdaq whentheir quotes were inconsistent with thequoting convention. This practice isknown as being ‘‘traded through.’’ Theeffect of being ‘‘traded through’’ or‘‘traded around’’ taught traders thatthere was no benefit to improving themarket by an odd-eighth in a stock witha 3⁄4 point or wider dealer spreadbecause their orders would not be filled,or would be filled only when the marketreversed directions.

Maverick firms were also subject to‘‘backing away’’ and being made ‘‘lastcall’’ by other firms. ‘‘Backing away’’involves the failure of one market makerto honor its posted quote to anothermarket maker, as required by SEC andNASD rules. Firms that violated thequoting convention were more subjectto ‘‘backing away’’ by other firms. Beingmade ‘‘last call’’ involves only tradingwith the maverick market maker whenthe market begins to turn against themaverick, or when a firm has no otheralternative but to trade with themaverick. Mavericks also observed thatthey were made ‘‘last call.’’

4. Market Makers Fully Understood theSignificance of the Quoting Conventionand Its Enforcement in MaintainingWide Spreads on Nasdaq

The effect of the quoting conventionin maintaining wide spreads on Nasdaqwas known even to employees andmembers of the industry’s self-regulatory organization, the NASD;moreover, the NASD recognized thecausal connection between wideningspreads on Nasdaq and ‘‘peer pressure’’applied to keep spreads wide.

The Department discovered during itsinvestigation that, in the spring of 1990,the NASD’s Trading Committee 13 began

to address ‘‘the problem of spreads.’’The issue became a matter of concernbecause the New York Stock Exchange(‘‘NYSE’’) had begun to use the fact ofwide spreads on Nasdaq to attractissuers to the NYSE. In a meeting onJune 27, 1990, Trading Committeemembers discussed the widelyunderstood effect of the quotingconvention and the notion of ‘‘Chinesemarkets’’ as contributing to widerspreads. According to notes of themeeting, a member of the committee—representing a small market makingfirm—indicated that market makers gotcalls from big firms when they ‘‘brokespreads’’ or made ‘‘Chinese markets.’’ Inhis view, the problem was the‘‘arrogance of mandate’’ exercised by thelarger firms.

In his testimony before theDepartment, this senior TradingCommittee member confirmed thattraders from competing firms discussedthe quoting convention and Chinesemarkets at this meeting. In addition, hetestified:

A. I think the establishment of thisacceptance of spreads [sic]. And I thinkit went way back. My opinion and whatI was trying to get across, and maybedidn’t do, was that this was a historicalthing. This is something that hadevolved from trading in the ’50s and the’60s and the ’70s and so forth. And thateveryone accepted this protocol, that aspread is a spread is a spread. And it’snot your place to change it.

The spread is a result of almost a Godgiven natural phenomenon. That it isnot some up-stark [sic] traders place tochange that. That was the acceptedprotocol for years and years and years,to my knowledge.

And so I was trying to get across thatthat’s where we have been. And to tryto break that protocol and change itwould have gotten a call from someold—somebody that had been aroundfor a long time saying, hey, don’t breakthe spread. That shouldn’t be anymore.

My lesson, that I was trying to bring,is that can’t—we can’t be doing that inthe 90’s. No one can be, no matter howarrogant they may think of themselves,no matter who it is, whether it is thebiggest money firm on Wall Street or theperson with the biggest moneycommitment. No matter who they are,they should not be allowed tointimidate you. If you want to break aspread that is your prerogative.

Q. And is it your best interpretationof this problem with arrogance andmandate, the fact that there was certainarrogance in the industry about spreads

and that if you try and alter spreads, youget telephone calls. Is that the generalgist of that?

A. I think that the word arrogancewould have to do with a trader’s—eitherhis impression of himself or his firm,that he was big enough to influencesomeone not to narrow spreads. But thatis the only way I can conceptualize howto use the word arrogance, which wasused.

Subsequent to this meeting, theQuality of Markets Subcommittee of theTrading Committee was formed toexamine two issues, one of which wasthe ‘‘spreads problem.’’ The Quality ofMarkets Subcommittee was composedexclusively of representatives of leadingmarket-making firms; however, certainNASD staff attended these meetings aswell. At one such meeting, on March 24,1992, a NASD staff member took notes.These notes indicate that theparticipants at the March 24 meetingdiscussed the quoting convention,Chinese markets, and the fact thatmarket makers who tightened spreadswere subjected to ‘‘intimidation’’ fromothers. This meeting apparently led tothe NASD’s hiring of an industryconsultant to help explain ‘‘Why doesthe ‘Chinese market’ syndrome has [sic]such impact on NASDAQ while listedmarkets seem to continuously quote incombinations of 1⁄8’s, 1⁄4’s.’’

On June 30, 1992, having completedhis research into the ‘‘spreads problem,’’an NASD employee wrote amemorandum entitled simply‘‘Spreads,’’ and sent it to the NASDsenior management group. Thememorandum stated, in pertinent part:

Spreads increased absolutely from the1st Quarter of 1989 to May 1992 from.226 to .369. The % increase was 63%.Our method of calculating spreads i.e.volume weighted, actually portrays thesituation better than it actually is. Astock by stock comparison would beworse.

3. Unlike auction markets, dealers donot change prices one side at a time andthere is a stigmatism [sic] associatedwith making so called ‘‘Chinese’’markets * * * [n]o one attempts to dojust a ‘‘little’’ better with their publishedquote change * * *

* * * I understand that whenattempts are made by individual dealersto [narrow spreads], peer pressure isbrought to bear to reverse any narrowingof spreads. I have no hard evidence ofthis and the information is onlyanecdotal and this was not described ashappening in every case. However,enough people have said it for me tobelieve it to be true.

Spreads became a more troublingtopic for the NASD, as well as the


market-making community in general,following the publication in August1993 of a Forbes magazine articleentitled ‘‘Fun and Games on Nasdaq.’’The article alleged, among other things,that market makers who narrowedspreads were harassed:

[N]ovice traders learn quickly that ifthey want to keep their jobs on an OTCdesk, they will do well not to beat theprice of fellow market makers. Breakingthe spread, as it is called, just isn’t done.One veteran who tried on occasion tonarrow an OTC spread told Forbes, ‘‘Iused to get phone calls from people.They’d scream, ‘Don’t break the spread.You’re ruining it for everybody else.’ ’’

Asked to give his input about thesecharges, a NASD employee detailed,point by point, the merits of the claims.With respect to the allegations ofharassment, he wrote: ‘‘I believe this tobe true.’’

E. Adherence to the Convention WasOften Inconsistent With the MarketMakers’ Economic Self-Interest

Under the law, if the behaviordictated by a hypothesized antitrustconspiracy is economically ‘‘irrational,’’or makes no sense, or is contrary toindependent self-interest unless theconspiracy posited actually exists, acourt may find an agreement inviolation of the antitrust laws. In otherwords, actions against economic self-interest are a ‘‘plus factor’’ which wouldsupport a judgment in favor of theUnited States in the case filed:

‘‘Plus factors’’ identified by courts,which, in combination with parallelpricing, may support an inference ofconspiracy, include a common motiveto conspire, actions which were againsttheir own individual business interestabsent an illicit agreement, andevidence of coercion.

In re Nasdaq Market-Makers AntitrustLitigation, 894 F.Supp. at 713. See alsoModern Home Ins. v. Hartford Acc. &Indem. Co., 513 F.2d 102, 111 (2d Cir.1975), Beech Cinema Inc. v. TwentiethCentury-Fox Film Corp., 622 F.2d 1106(2d Cir. 1980), and Ambook Enterprisesv. Time Inc., supra.

The terms of the quoting conventioncontain a self-enforcing mechanismdesigned to foster, support, andmaintain wide inside spreads. As noted,under the quoting convention, marketmakers who wish to quote an even-eighth stock in odd-eighth increments(thereby creating a powerful tendencytoward a narrower, 1⁄8 inside spread)must first narrow their dealer spreads.Narrowing one’s dealer spread imposesa ‘‘penalty’’ or cost on the use of odd-eighth increments because a narrowerdealer spread can increase the financial

risk to the market maker in trading thatstock, as was recognized by one traderin deposition testimony:

Q. What would be the advantage to amarket-maker to have a greater dealerspread in a stock?

A. Less apt to be hit or taken,therefore putting in an unwantedposition.

Q. That would be in response to amarket move they had not anticipated?

A. That is correct.Q. Is there sort of a monitoring cost of

the stock that is reduced if you have awider dealer spread?

A. I guess you could say that. It wouldbe easier to stay out of the way.

Q. You can characterize it as either agreater risk of being hit when you don’twant to be hit or a greater burden ofavoiding that result?

A. Having a tighter spread?Q. Right.A. Correct.Another trader also succinctly

explained the risk imposed by anarrower dealer spread:

[A] ‘‘What are the ramifications [of anarrower dealer spread]? Yes, I mayhave been able to buy stock at an eighth.But on the other hand * * * if youshrink your dealer spread you aresubject to more risk in terms of beingSOES’ed and everything else, there wasa penalty for me to increase my price[by an eighth] and decrease my spread.’’

Because of this increased risk, it isoften against a market maker’s economicself-interest to narrow its dealer spreadsimply to quote in an odd-eighthincrement. The requirement that amarket maker reduce its dealer spreadwhen quoting in eighths had the effectof discouraging use of odd-eighthincrements; thus the quoting conventionkept spreads wider for longer than theywould have been in competitive market.

There were and are numerousinstances in which one would haveexpected to see odd-eighth quotes inorder to, for example, seek to transact ata more favorable price than would begenerated by a quarter-point increase ina bid price or a quarter point decreasein the ask price. Yet adherence to thequoting convention kept market makersfrom acting in their economic self-interest by entering odd-eighth quotes insuch circumstances. Tradersacknowledged as much in theirdeposition testimony, as noted by thefollowing examples:

[Q] * * * This is what’s giving metrouble. If you can buy something at aneighth by only going up an eighth, whybother to go up a quarter? I guess that’swhat confusing me.

A. Well, that, I think, speaks to theprofessional appearance concept and

the tradition, if you will, concept, thateven if I’m not dealing for a client, I maybe short the stock. I am going to movethat market at a quarter-point increment;even though I would much rather buyit at an eighth, I am not going to put abad market or an unprofessional-lookingmarket in the screen.

Another trader testified:Q. In the absence of the convention,

would there have been circumstancesthat [you] wanted to quote in oddeighth?

A. Yes, probably.Market makers understood they were

giving up the opportunity to quotestocks in odd-eighths in exchange forincreased profits for the market-makingcommunity as a whole, provided allmarket makers adhered to theconvention. This trade-off wasacknowledged in a tape-recordedtelephone conversation in which onetrade’s assistant noted: ‘‘[A]t the sametime * * * you always wanted to wishyou could always to offer it at 7⁄8ths,’’and the other trader’s assistant replied,‘‘True,’’ ‘‘but you’d give that wish up ina second to keep the spread * * * keepthat P&L nice and lofty.’’

F. Market Makers Began To ChangeTheir Price Quoting Behavior WhenConfronted with Charges of Collusionand the Government Investigations

Under established law, evidence of asignificant change in behavior of allegedconspirators is admissible to provide theexistence of a conspiracy. See UnitedStates v. Koppers Co., 652 F.2d 290 (2dCir. 1981); Ohio Valley Elec. Corp. v.General Elec. Co., 244 F.Supp. 914(S.D.N.Y. 1965). The fact that marketmakers for years used the quotingconvention to maintain wide insidespreads is further evidenced by thechange in their price quoting behavioronce their anticompetitive conductbegan to come to light.

On May 24, 1994, the NASD, STA,and STANY convened a meeting at theheadquarters of Bear Stearns & Co. inNew York that was attended by over 100market maker representatives. Theprincipal item on the agenda for thatmeeting was the issue of wide spreadson Nasdaq. Three days later, after publicdisclosure of the Christie/Schultz studyby the Los Angeles Times and the WallStreet Journal, dealer spreads of anumber of major Nasdaq stocks began tonarrow. Within one week, the prevailingdealer spreads of four of the mostprominent Nasdaq stocks—Microsoft,Apple, Amgen, and Cisco—hadnarrowed from 3⁄4 to 1⁄2 point, andmarket makers accordingly began


14 Attached as Exhibit D are charts that show thedramatic changes in the quoting on these majorstocks, going from virtually no odd-eighth quotes toa substantial number almost overnight.

15 In the twelve months since public disclosure ofthe Christie/Schultz study, the average insidespread for Nasdaq National Market System stocksfell 15.6 percent from 34.6 cents to 29.2 cents.(These data were obtained from the NASD’sinternal, monthly, ‘‘Stat Book,’’ for December, 1994and May, 1995, obtained by the Department indiscovery in this investigation.) For theDepartment’s sample of 224 stocks, the averageinside spread fell 27.3 percent from 44 cents to 32cents. Not all investors pay the quoted spreads, butmany—especially small, retail investors—do.

Institutional investors also are affected by thequoted inside spread on Nasdaq. The effect of thequoting convention on institutional customers isdemonstrated by the change in effective spreads oftransactions by firms that specialize in institutionaltrading. The Department calculated the decline ineffective spreads for Apple Computers, Inc., fromMay to June 1994, for eight such firms. The averageeffective spread fell from 18.8 cents to 11.4 centswhen the inside spread on Apple dropped from 1⁄4to 1⁄8 in those months. The term ‘‘effective spread,’’as used here, measures spread costs based on thedifference between actual transaction prices and themid-point of the inside spread. The effective spreadin a security is an accepted measure in financialeconomics to determine the spreads actually paidby customers.

entering odd-eighth quotes in thosestocks.14

Other events occurred throughout theremainder of 1994 that effected changesin the market makers’ quoting andpricing behavior. These included thefiling of several class-action lawsuitsimmediately after disclosure of theChristie/Schultz study; the opening ofthe Department’s investigation in thesummer of 1994; the Los Angeles Timessix-part series in October 1994concerning allegations of collusion onNasdaq; and the public announcementof the SEC’s inquiry in November.

The Department’s analysis of marketdata, as discussed below, shows thatthese events have caused changes in theNasdaq market: the percentage of stocksthat previously avoided odd-eighthquotes has fallen dramatically; averagedealer spreads and inside spreads havedecreased; and the percentage of stocksthat have been quoted in violation of theconvention—i.e., using an odd-eighthprice with a dealer spread of 3⁄4 point orgreater—has risen substantially. Thesechanges indicate that there was nosatisfactory economic reason for theextent of the wide spreads that hadprevailed so persistently in the previousyears.

1. The Decline in the Avoidance of Odd-Eight Price Quotes

Attached as Exhibit A is a chart thatdemonstrates graphically the extent towhich market makers have begun to useodd-eight price quotes in stocks wheresuch quotes were previously avoided.This chart is based on the Department’sdata set previously discussed—224 ofthe top-dollar volume Nasdaq stocks. Asthe chart demonstrates, prior todisclosure of the Christie/Schultz study,nearly 70% of the stocks from thesample avoided odd-eight price quotesat least 99% of the time; in March of1996, only approximately 15% of thesample avoided odd-eights to thisextreme degree.

2. The Decline in the Average InsideSpread

The striking decline in the avoidanceof odd-eights and dealer spreads runsalmost exactly parallel to a decline inthe average inside spread in Nasdaqstocks. The Department examined theaverage quoted inside spread by monthfor the 224 stocks in its sample. SeeExhibit E. The peak month wasDecember 1993, when the averageinside spread reached 44 cents(although April 1994 was nearly as

high). Subsequently, from May 1994through March 1996, the average insidespread continued to fall steadily. ByMarch 1996, it had fallen to 32 cents, adecline of almost 28% in approximatelytwo years.

The Department has also calculatedthe average percentage value of theinside spread as a proportion of astock’s price for the same stocks in thesame period. See Exhibit F. Thisanalysis reveals an even sharperdecline, with this value declining fromas high as 1.6% to less than 1% inSeptember of 1995, increasing slightlyto 1.04% in march 1996.15

3. The Decline in Adherence to theQuoting Convention

The Department has also examinedwhether market makers, in fact, adheredto, and whether they have continued toadhere to, the quoting convention thatprohibits the use of odd-eights when thedealer spread is 3⁄4 point or greater.

The Department determined thepercentage of the 224 stocks thatviolated the quoting convention at least1% of the time in each month. SeeExhibit G. In December 1993, only 5%of the 224 stocks traded had violationsof the convention by the 1% standard.By June 1994, following the Christie/Schultz disclosure, this proportionjumped to 10%. The proportion ofstocks that violate the quotingconvention has continued to increaseuntil March 1996, when fully 45% of allstocks from the sample violated theconvention at least 1% of the time.These results are even more dramaticwhen it is recognized that use of dealerspreads of 3⁄4 point or more has fallensignificantly during the same period,

thereby reducing the number ofsituations in which market makerscould violate the convention by quotingodd-eights.

J. The Market Makers’ Pricing BehaviorWas Different in a Comparable Market

Evidence of a conspiracy may beinferred from the difference incompetitive performance between twocomparable markets. Professor Areedadescribes this type of evidence, and itsvalue, in his treatise:

If two markets are identical in everyrespect (other than the possibility ofconspiracy), then substantially lesscompetitive performance or behavior inone of them must be attributable to aconspiracy. The logic is unassailable* * *.

Even without exact identity in everyrespect, conditions preventing tacitprice coordination in one market shouldhave the same effect in a substantiallysimilar market. Accordingly, if a givenset of rivals maintains relativelycompetitive prices in one of thosemarkets but not in the other, then anextra factor—such as an explicitagreement—must explain thesignificantly less competitive prices inthe other market.

Areeda, Antitrust Law, ¶ 1421, 132(1986) (emphasis added). See also,Petruzzi’s IGA Supermarkets v. Darling-Delaware Co., Inc., 998 F.2d 1224 (3dCir. 1993).

Although the quoting conventionprevented market makers from quotingeven-eight stocks in odd-eights onNasdaq, it did not constrain them fromentering odd-eight quotes for the samestocks on Instinet. Instinet is anelectronic market that permits brokerdealers and institutions to enter ordersanonymously to buy and sell andexecute against those orders. In manyways, it is comparable to the Nasdaqmarket. The same stocks are traded bythe same market makers at the sametime. The size of the trades and quoteson the two systems are very similar aswell.

Quotes on Instinet, however, are quitedifferent. They are much more likely tobe at an odd-eighth, and are usuallyinside the inside spread on Nasdaq. TheDepartment examined the ten largesttrading volume stocks for which odd-eighth quotes rarely appeared on theNasdaq screen during the first 20 daysof May, 1994. See Exhibit C. On Instinet,however, the defendants used odd-eighth prices routinely, some 40% to50% of the time. See Exhibit H.

The substantial use of Instinet toquote and transact at odd-eighths relatesto the fact that (1) it is anonymous,which allowed market makers to quote


16 Instinet is available to brokers, market makers,and institutional investors.

17 The reference to agreements ‘‘other than anagreement on one or a series of related trades’’ isintended to make clear that a market maker is notprohibited from agreeing to buy or sell a specificquantity of stock, and that agreeing to buy or sella quantity of shares greater than the amountinitially specified in a series of related trades alsodoes not violate the proposed Order.

and transact at odd-eighths withoutprovoking a reaction from other marketmakers, and (2) quotes entered onInstinet have historically been viewedas not affecting their best executionobligation. A quote on Instinet, then,would not require other marker makersto transact at that price for other trades.In addition, Instinet is unavailable toretail customers,16 which allowedmarket markers to transact with othermarket makers and institutions at betterprices than those on the Nasdaq screenat which retail customer trades wereexecuted.

IV

Explanation of the Proposed OrderProhibited conduct. The proposed

Order will deter the recurrence ofconduct discovered by the Departmentin its investigation that violates Section1 of the Sherman Act and that is plainlyanticompetitive. Specifically, theproposed Order bars each of thedefendants, unless otherwisespecifically permitted, in connectionwith its market making activities in OTCstocks, from agreeing with any othermarket maker:

(1) To fix, raise, lower, or maintainquotes or prices for any Nasdaq security;

(2) To fix, increase, decrease, ormaintain any dealer spread, insidespread, or the size of any quoteincrement (or any relationship betweenor among dealer spreads, inside spreads,or the size of any quote increment), forany Nasdaq security;

(3) To adhere to a quoting conventionwhereby Nasdaq securities with a three-quarter (3⁄4) point or greater dealerspread are quoted on Nasdaq in even-eighths and are updated in quarter-point(even-eighth) quote increments; and

(4) To adhere to any understanding oragreement (other than an agreement onone or a series of related trades)requiring a market maker to trade at itsquotes on Nasdaq in quantities of sharesgreater than either the Nasdaq minimumor the size actually displayed orotherwise communicated by thatmarket; 17

In addition, the proposed Order barseach of the defendants from engaging inany harassment or intimidation of anyother market maker because suchmarket maker:

(1) decreased its dealer spread or theinside spread in any Nasdaq security;

(2) refused to trade at its quoted pricesin quantities of shares greater thaneither the Nasdaq minimum or the sizeactually displayed or otherwisecommunicated by that market maker; or

(3) displayed a quantity of shares onNasdaq greater than either the Nasdaqminimum or the size actually displayedor otherwise communicated by thatmarket maker.

Finally, paragraph (8) Section IV ofthe proposed Order bars the defendantsfrom refusing, or threatening to refuse totrade (or agreeing with or encouragingany other market maker to refuse totrade) with any market maker atdefendant’s published Nasdaq quotes inamounts up to the published quotationsize because such market makerdecreased its dealer spread, decreasedthe inside spread in any Nasdaqsecurity, or refused to trade at its quotedprices in a quantity of shares greaterthan either the Nasdaq minimum or thesize actually displayed or otherwisecommunicated by that market maker.

Required Conduct. The proposedOrder contains numerous provisionsdesigned to ensure compliance with itsterms and with the federal antitrustlaws. Significantly, it requires that eachdefendant initiate and maintain anantitrust compliance program. Underthe compliance program, an AntitrustCompliance Officer, to be appointed byeach defendant, is required to distributecopies of the proposed Order to certainpersonnel, including members of thedefendant’s board of directors and itsNasdaq traders; to brief traders semi-annually on the meaning andrequirements of both the federalantitrust laws and the proposed Order;and to obtain from specified persons,including traders, certifications thatthey have read and agree to abide by theterms of the proposed Order, and thatthey have been advised and understandthat a violation of the proposed Orderby them may result in their being foundin civil or criminal contempt of court.

The proposed Order also requireseach defendant to undertake asignificant program of monitoring andrecording trader conversations so as todiscourage conduct violative of theproposed Order and the federal antitrustlaws generally. Under the proposedOrder, each defendant will install tapingsystems capable of monitoring andrecording any conversation on thetelephones on its OTC desk that areused in market making. Not less than3.5% of all trader conversations will bemonitored and recorded, unless suchpercentage would exceed 70 hours perweek. Thus, 70 hours per week is the

maximum amount of taping required ofany defendant. Between 35–40,000hours of tape will be required to berecorded annually to meet theserequirements of the proposed Order.The methodology proposed to beemployed by each defendant to conductthis monitoring and recording is subjectto Department approval. If the AntitrustCompliance Officer discovers aconversation he/she believes mayviolate the proposed Order, he/she isrequired to retain a recording of theconversation, and, within ten businessdays, to furnish the tape, along with anyexplanation of the conversation thedefendant may care to offer, to theDepartment. The Department estimatesthat defendants will have to employapproximately thirty (30) persons fulltime to fulfill the monitoringrequirement of the proposed Order.

Tapes made pursuant to the proposedOrder are required to be retained byeach defendant for at least 30 days fromthe date of recording. The tapes madepursuant to the proposed Order are notsubject to civil process except forprocess issued by the Antitrust Division,the SEC, the NASD, or any other self-regulatory organization. The proposedOrder directs that such tapes not beadmissible in evidence in civilproceedings, except in actions,proceedings, investigations, orexaminations commenced by theAntitrust Division, the SEC, the NASD,or any other self-regulatoryorganization. The tapes will be subjectto process and use in criminalproceedings under the terms of theproposed Order.

Section IV.C.(6) of the proposedOrder, regarding permissible uses oftape recordings made pursuant to theproposed Order, does not affect theability of a grand jury to obtain suchtapes. Nor does the provision affect thesusceptibility of such tapes to criminalprocess or their admissibility inevidence in criminal proceedings.

The proposed Order grants theDepartment the right to visit anydefendant’s place of businessunannounced and to monitor traderconversations as they are occurring.Upon request of the Department, adefendant must identify all taperecordings made pursuant to theproposed Order that are in itspossession or control, provide theDepartment with the opportunity tolisten to any tape recording madepursuant to the proposed Order, andproduce to the Department such tapes asthe Department may request. TheDepartment may receive complaints orreferrals concerning asserted possibleviolations of the proposed Order and


18 Not all of the firms named in the Complaintengaged in such conduct, and no inference ofparticipation in this conduct should be drawn fromthe fact that a firm has been charged as a defendantherein.

19 A limited number of market-making firms werediscovered to have engaged in this conduct. Thereis no evidence that the majority of firms engagedin this conduct.

may, based upon such complaints orreferrals, or for the purpose ofmonitoring or enforcing compliancewith the proposed Order, require theAntitrust Compliance Officer to tape theconversations of particular traders, up tothe limits previously specified.

Additional Relief. Each AntitrustCompliance Officer is required by theproposed Order to report quarterly tothe Antitrust Division concerningactivities undertaken to ensure thedefendant’s compliance with theproposed Order. Such reports mustdetail the precise times whenconversations were monitored by theAntitrust Compliance Officer pursuantto the requirements of the proposedOrder and the name of each personemployed by the defendant whoseconversations were recorded duringsuch times. The proposed Order alsorequires that each defendant certify thedesignation of an Antitrust ComplianceOfficer and that the defendant hascomplied with certain specifiedrequirements of the proposed Order.

The proposed Order gives theDepartment certain ‘‘visitation’’ rights,including the right to demand copies ofdocuments, excluding individualcustomer records, which relate tocompliance with the proposed Order;and to interview officers, employees, oragents of each defendant regardingcompliance with the proposed Order. Inaddition, upon written request of theAttorney General or the AssistantAttorney General in charge of theAntitrust Division, a defendant may berequired to prepare and submit writtenreports, under oath, relating todefendant’s compliance with theproposed Order.

V

Remedies Available to Private LitigantsSection 4 of the Clayton Act, 15

U.S.C. 15, provides that any person whohas been injured as a result of conductprohibited by the antitrust laws maybring suit in federal court to recoverthree times the damages suffered, aswell as costs and reasonable attorneys’fees. Entry of the proposed Order willneither impair nor assist the bringing ofsuch actions. Under the provisions ofSection 5(a) of the Clayton Act, 15U.S.C. 16(a), the proposed Order has noprima facie effect in any subsequentlawsuits that may be brought against thedefendants in this case.

VI

Procedures Available for Modificationof the Proposed Order

As provided by the APPA, any personbelieving that the proposed Order

should be modified may submit writtencomments to John F. Greaney, Chief,Computers and Finance Section, U.S.Department of Justice, AntitrustDivision, 600 E Street, N.W., Room9300, Washington, D.C. 20530, withinthe 60-day period provided by the Act.These comments, and the Department’sresponses, will be filed with the Courtand published in the Federal Register.All comments will be given dueconsideration by the Department, whichremains free to rescind its agreement toentry of the proposed Order at any timeprior to actual entry by the Court. Theproposed Order provides that the Courtretains jurisdiction over this action, andthe parties may apply to the Court forany order necessary or appropriate formodification, interpretation, orenforcement of the Order.

VII

Other Anticompetitive ConductRemedied by the Proposed Order

In addition to the quoting convention,the Department’s investigationuncovered four types of other unlawfulconduct involving market makers whichare not alleged in the Complaint, but arefully remedied by the prohibitions inthe proposed Order. First, theinvestigation uncovered numerousexamples of what are often referred toas ‘‘moves on request.’’ A ‘‘move onrequest’’ occurs when trader A callstrader B and asks him to change theprice he is quoting for the purpose ofaffecting the market in that stock.18

When B complies, his move willgenerate a misimpression that there isan additional buying or selling interestin the stock, from which A will possiblyprofit. Trader B benefits because A willreturn the favor when B wants toinfluence the market in a stock.

Second, the investigation uncoveredinstances of market maker agreementson dealer spreads. Such agreementswere intended to widen or preserve thewidth of the inside spread and to reducethe risk of unwanted executions. Thepurpose and effect of these types ofagreements is to increase trader profitsor reduce participants’ risk of loss fromtheir trading activities.19

Third, the Department alsoinvestigated an apparent ‘‘size’’convention that may limit competitionamong Nasdaq market makers by

deterring them from improving theinside spread in a stock (with a new bidor ask quote) on Nasdaq, unless they areprepared to trade in quantities greaterthan their posted quote, typically 1,000shares. With every posted bid and askquote, a trader must also quote anumber of shares that he or she iswilling to trade at that price. Manytraders admitted that this ‘‘good forsize’’ requirement was honored by mostmarket makers, and admitted that theywould complain to other market makerswho cut spreads, only to then engage inthe NASD minimum size trade.

Fourth, the Department alsodiscovered evidence that some maverickfirms that tried to attract larger orders bydisplaying greater size than the NASDminimum received the same sort ofenforcement threats against thisbehavior that they had received whenthey narrowed the inside spread.

Together, these latter two practicesadversely affected smaller marketmakers. Such firms could not take largepositions in a stock and then‘‘advertise’’ their willingness to trade inthat size by posting a public quote fora larger than minimum sizedtransaction. Nor could they compete onprice unless they were ‘‘implicitly’’willing to be ‘‘good for size’’ at anyimproved price.

The Department has elected not topursue a civil case that includesinstances of any of the above-describedconduct against the defendants for thereason that the proposed Order affordsthe Department and the public all therelief that could be obtained if theDepartment charged them as violationsand prevailed at trial. Further, whileunlawful and harmful to consumers, thetotal impact on the amount of commerceaffected by these alleged violations is afraction of that affected by the quotingconvention.

VIII

Alternatives to the Proposed Order

As an alternative to the proposedOrder, the Department consideredlitigation on the merits. The Departmentrejected that alternative for two reasons.First, the Department is satisfied thatthe various compliance procedures towhich defendants have agreed willensure that the anticompetitivepractices alleged in the Complaint areunlikely to recur and if they do recurwill be punishable by civil or criminalcontempt, as appropriate. Second, a trialwould involve substantial cost both tothe United States and to the defendants,and is not warranted since the proposedOrder provides all the relief the


20 The Department has calculated that, if theproposed Order is entered by the Court, thedefendants will be required to engageapproximately thirty (30) full-time employees tomonitor compliance with the requirements of theproposed Order for up to five years.

Government would likely obtainfollowing a successful trial.

IX

Alternative Forms of Relief ConsideredIn addition to the relief obtained in

the Order, the Department considered,as a condition of settlement, a term inthe proposed Order requiring thedefendants to tape record and preservefor up to six months all of theconversations of their traders engaged inmarket making in Nasdaq stocks. At thetime consideration was given to such arequirement, the proposed relief did notcontain a term requiring that eachdefendant appoint an AntitrustCompliance Officer to record and listento trader conversations.

Ultimately, instead of requiringdefendants to tape and preserve alltrader conversations, without anyoversight or compliance efforts bydefendants, the Department determinedthat the identical remedial purposecould be served more efficiently byrequiring defendants to monitor andrecord a relatively small percentage ofsuch conversations, without informingtraders when their conversations wouldbe recorded, and also by requiring thatsuch conversations as are recordedactually be reviewed promptly forviolations. Thus, traders at the twenty-four defendant firms (and those whotrade with them in the industry) willknow that some portion of their calls arebeing taped, but will have no way ofknowing which ones.

Further, under the proposed Order,the Department is given the right toreceive complaints of possibleviolations and to direct future taping ofpossible violators without informingtraders that this particular taping isongoing. This feature of the proposedOrder is of vital importance, for itallows ongoing monitoring, if believednecessary, of traders about whomcomplaints have been made. TheDepartment believes that theserequirements to monitor and record, andto direct the monitoring and recording,of trader conversations will providesubstantial opportunities for detectionof violations of the proposed Order aswell as substantial incentives for thedefendant firms and individual tradersto comply with the terms of theproposed Order, and the antitrust laws.

The Department has calculated that,given the number of defendants and thenumber of traders employed by thesedefendants, the number of hours oftrader conversations actually to bemonitored and recorded per yearpursuant to the proposed Order is likelyto range between 35,000 and 40,000

hours.20 Further, while the absolutenumber of hours of trader conversationsrequired to be monitored and recordedat any individual firm (in relation to thenumber of traders and the number ofhours the market is operating) may befew, traders who might be inclined toviolate the proposed Order, in additionto being subject to prosecution forcriminal or civil contempt (and underthe antitrust laws), must also beconcerned that their conversations arebeing monitored and recorded byanother of the twenty-four firms subjectto the proposed Order.

To the best of the Department’sknowledge, these provisions areunprecedented in any court orderresolving an antitrust complaint filed bythe United States. There is someprecedent in the securities field fordirecting taping as a remedial measure.In two SEC cases involving firms allegedto have engaged in serious and repeatedviolations of the securities laws, thefirms were required to tape theirbrokers. S.E.C. v. Stratton Oakmont Inc.,878 F. Supp. 250 (D.D.C. 1995) (tapingrequired by independent consultant); Inthe Matter of A.R. Baron & Co., Inc., SECNews Digest 96–101, File No. 3–9010(May 30, 1996). There is also precedentfor taping in the National FuturesAssociation’s imposition of taping forcertain telemarketing activities. NationalFutures Association Manual ¶ 9021(Interpretive Notice, ‘‘Compliance Rule2–9; Supervision of TelemarketingActivity’’ (Jan. 19, 1993)). Perhaps mostimportantly, the taping provision findsprecedent in the industry’s own practiceof taping to resolve disputes.

The Department’s investigationdepended heavily on the conversationsdiscovered on tapes produced pursuantto process. Fourteen firms makingmarkets on Nasdaq, including some ofthe largest, regularly taped all of theirtraders, all of the time. The Departmentbelieves that the tapes made pursuant tothe proposed Order will both serve animportant deterrent effect to ensurecompliance with the proposed Order, aswell as provide the best means ofdetecting, proving, and punishingviolations of the proposed Order, shouldthey occur.

Second, the Department consideredrequiring, as a condition of settlement,the appointment of a special master tomonitor compliance with the terms ofthe proposed Order. Under this possibleform of relief, the defendants would

have been required to fund the activitiesof the special master. The special masterand his staff would have undertaken theresponsibilities that, under the proposedOrder, will be assumed by theDepartment. These responsibilitiesinclude, for example, approving thetaping systems the defendants will berequired to install, receiving the reportsrequired to be submitted by thedefendants, receiving complaints anddirecting the monitoring of theconversations of particular traders.

Ultimately, because of difficulties indetermining how the costs of fundingthe special master would be sharedequitably among the defendants, andbecause of the concern of many of thedefendants that a special master wouldbecome yet a fourth agency (in additionto the SEC, the NASD and the AntitrustDivision) with jurisdiction to monitortheir activities, the Departmentdetermined that it would not require theappointment of a special master andthat it could fulfill the responsibilitiesto monitor imposed by the proposedOrder.

To implement its responsibilitiesunder this portion of the proposedOrder, the Department has assigned anattorney in its New York Field Office,Geoffrey Swaebe, Jr., to provide initialoversight of the implementation ofSections IV.C.(2)–(10), V, and VI of theproposed Order. Mr. Swaebe’s addressis Antitrust Division, New York FieldOffice, 26 Federal Plaza #3630, NewYork, NY 10278–0140. Mr. Swaebe’stelephone number is (212) 264–0652.The general number for the New YorkField Office is (212) 264–0390.

The Department has also establisheda new telephone ‘‘hotline’’ for traders,retail brokers, or members of the publicto report violations of the proposedOrder or the federal antitrust lawsgenerally, in the securities or any otherindustry. Anyone with informationconcerning such possible violations maycall the toll-free hotline, 1–888–7DOJATR (1–888–736–5287).

Third, the Department considered butultimately did not require as a conditionof settlement, that the defendantsimplement certain quoting rulesrecently proposed by the SEC toimprove the handling and execution ofcustomer orders (File No. S7–30–95).The Department considered having thedefendants implement two of theseproposed rules immediately. These twoproposed rules, which are still underconsideration by the SEC, include a‘‘Limit Order’’ proposal requiringspecialists and OTC market makers todisplay customer limit orders pricedbetter than the specialist’s or OTCmarket maker’s quote; and an


21 Accord United States v. Bechtel Corp., 648 F.2d660, 666 (9th Cir.), cert. denied, 454 U.S. 1083(1981); United States v. Gillette Co., 406 F. Supp.713, 716 (D. Mass. 1975).

22 As the Ninth Circuit explained, ‘‘[t]he balanceof the competing social and political interestsaffected by a proposed antitrust consent decreemust be left, in the first instance, to the discretionof the Attorney General.’’ Bechtel, 648 F.2d at 666.

‘‘Electronic Communications Networks’’proposal that would require exchangespecialists and OTC market makers toquote to the public any better prices thatthey privately quote through certainelectronic communications networks,such as Instinet.

The Department submitted formalcomments to the SEC stronglysupporting the adoption of the LimitOrder proposal and supporting theElectronic Communications Networksproposal on January 26, 1996. In thosecomments, we noted that, ‘‘[i]n effectthe Limit Order proposal will allowcustomer limit order to compete moreeffectively with market makers’ quotes,injecting additional competition into theNasdaq market.’’ We identified the‘‘primary beneficiaries of this addedcompetition * * * [as] the investingpublic, in the form of narrower bid/askspreads and thus a reduced cost oftrading.’’ As to the ElectronicCommunications Networks proposal, westated that it ‘‘may reduce thepossibility of collusion and may alsoserve some of the Commission’s othergoals, such as promoting transparencyand reducing market fragmentation.’’

The Department did not negotiate toinclude either the Limit Order theElectronic Communications Networksproposals are part of the relief becauseof the complexity involved in requiringless than all industry participations toimplement the rules, because of fairnessconcerns, and because of the pendencyof the rules before the SEC.

X

Legal Standard Governing the Court’sPublic Interest Determination

In accordance with the APPA, thisCourt must determine whether entry ofthe proposed Order ‘‘is in the publicinterest.’’ 15 U.S.C. 16(e). Inundertaking this assessment, the D.C.Circuit recently explained, ‘‘the court’sfunction is not to determine whether theresulting array of rights and liabilities isthe one that will best serve society, butonly to confirm that the resultingsettlement is within the reaches of thepublic interest.’’ United States v.Microsoft Corp., 56 F.3d 1448, 1460(D.C. Cir. 1995) (emphasis in original)(internal quotations omitted).21

The Court’s role in passing on aproposed order is limited because astipulation and order embodies asettlement, see United States v. Armour& Co., 402 U.S. 673 681 (1971), onereflecting both the Department’s

predictive judgment concerning theefficacy of the proposed relief and theDepartments exercise of prosecutorialdiscretion.22 For a court to engage in‘‘an unrestricted evaluation of whatrelief would be serve the public’’ mightthreaten these benefits of ‘‘antitrustenforcement by consent decree,’’ UnitedStates v. Bechtel Corp., 648 F.2d 660,666 (9th Cir.), cert. denied, 454 U.S.1083 (1981), and thereby frustrateCongress’s intent to ‘‘retain the consentjudgment as a substantial antitrustenforcement tool,’’ S. Rep. No. 298, 93dCong., 1st Sess. & (1973); H.R. Rep. No.1463, 93 Cong., 2d Sess. 6 (1974),reprinted in 1974 U.S.C.C.A.N. 6535,6538–39.

The Tunney Act authorizes a court toconsider:

(1) the competitive impact of suchjudgment, including termination ofalleged violations, provisions forenforcement and modification, durationor relief sought, anticipated effects ofalternative remedies actuallyconsidered, and any otherconsiderations bearing upon theadequacy of such judgment;

(2) the impact of entry of suchjudgment upon the public generally andindividuals alleging specific injury fromthe violations set forth in the complaintincluding consideration of the publicbenefit, if any, to be derived from adetermination of the issues at trail.

Id. In applying these criteria,appropriate concern for preservation ofa stipulation and order as an effectiveenforcement tool requires the Court tofocus its inquiry narrowly. See alsoUnited States v. American CyanamidCo., 719 F.2d 558, 565 (2d Cir. 1983)(explaining that the ‘‘public interests’’standard should be ‘‘based on more thana broad and undefined criteria’’), cert.denied, 465 U.S. 1101 (1984). A TunneyAct court properly may considerwhether a proposed order is ambiguousor contains inadequate compliancemechanisms, for these shortcomingsmay hinder the decree’s successfulimplementation. See Microsoft, 56 F.3dat 1461–62. The Court may also ask ifthe proposed order potentially works‘‘unexpected harm’’ to third parties, id.at 1459, or impairs important publicpolicies other than competition policy,see United States v. BNS Inc., 858 F.2d456, 462–62 (9th Cir. 1988). The Court,however, may not reject the proposedorder merely because it fails to secure

for a third party benefits it seeks. SeeMicrosoft, 56 F.3d at 1461 n.9.

The Court may also ask whether therelief embodied in the proposed decreeis ‘‘so inconsonant with the allegationscharged as to fall outside of the reachesof the public interest.’’ Id. at 1461. TheDepartment’s allegations cabin thisinquiry; the Court may not look beyondthe Complaint ‘‘to evaluate claims thatthe government did not make and toinquire as to why they were not made.’’Id. (emphasis in original). And, inevaluating the proposed order as aremedy for the particular violationsalleged, the Court must afford theDepartment even greater deference thanwhen the Court considers anuncontested decree modification—acontext in which a court may reject theproposal only if ‘‘it has exceptionalconfidence that adverse antitrustconsequences will result—perhaps akinto the confidence that would justify acourt in overturning the predictivejudgments of an administrativeagency.’’’ Id. at 1460 (quoting UnitedStates v. Western Elec. Co., 993 F.2d1572 (D.C. Cir.), cert. denied, 114 S. Ct.487 (1993)).

Finally, the Court properly may makeits public interest determination on thebasis of the Competitive ImpactStatement and Response to Commentfiled pursuant to the APPA. The APPAauthorizes the use of additionalprocedures, see 15 U.S.C. § 16(f), buttheir employment is discretionary. If theDepartment’s filings adequatelyventilate the issues before the Court,additional proceedings may detersettlements, and thus improperly impairthe consent judgment as a frequentlyused and congressionally approvedantitrust enforcement tool. See H.R.Rep. No. 1463, supra, at 8, reprinted in1974 U.S.C.C.A.N. 6535, 6538–39.; S.Rep. No. 298, supra, at 6–7.

XI

Determinative Materials/Documents

No materials or documents of the typedescribed in Section 2(b) of the APPA,15 U.S.C. 16(b), were considered informulating the proposed Order.

Dated: July 17, 1996.Respectfully submitted,

Hays Gorey, Jr.,Attorney, U.S. Department of Justice,Antitrust Division, 600 E Street, N.W., Suite9500, Washington, D.C. 20530, Tel: 202/307–6200, Fax: 202/16–8544.

Charts appended to the Competitive ImpactStatement have not been reprinted here,however they may be inspected in Room3229, Department of Justice, Washington,D.C. and at the Office of the Clerk of the


United States District Court for the SouthernDistrict of New York.

Certificate of ServiceOn July 17, 1996, I caused a copy of

the Government’s Competitive ImpactStatement to be served by first-classmail upon:ALEX. BROWN & SONS

INCORPORATEDLewis Noonberg, Piper & Marbury,

1200 19th Street, N.W.,Washington, D.C. 20036–2430

BEAR, STEARNS & CO. INC.Robert Heller, Kramer, Levin, Naftalis

& Frankel, 919 Third Avenue, NewYork, New York 10022

CS FIRST BOSTON CORPORATIONRichard A. Cirillo, Roger & Wells, 200

Park Ave., 53rd Floor, New York,New York 10166

Stuart Gerson, Epstein Becker &Green, 1227 25th Street, NW., #750,Washington, DC 20037

DEAN WITTER REYNOLDS INC.Francis M. Holozubiec, Kirkland &

Ellis, Citicorp Center, 153 East 53rdStreet, New York, New York 10022–4675

DONALDSON, LUFKIN & JENRETTE,SECURITIES CORPORATION; J.P.MORGAN SECURITIES, INC.;MORGAN STANLEY & CO.,INCORPORATED

Robert F. Wise, Jr., Davis Polk &Wardwell, 450 Lexington Avenue,New York, New York 10017

FURMAN SELZ LLCJames Calder, Rosenman & Colin LLP,

575 Madison Avenue, New York,New York 10022

GOLDMAN, SACHS & CO.John L. Warden, Sullivan & Cromwell,

125 Broad Street, New York, NewYork 10004

HAMBRECHT & QUIST LLCCharles Koob, Simpson Thacher &

Bartlett, 425 Lexington Avenue,New York, New York 10017–3954

HERZOG, HEINE, GEDULD,INCORPORATED

James T. Halverson, Shearman &Sterling, 153 East 53rd Street, NewYork, New York 10022–4676

LEHMAN BROTHERS, INC.Jeffrey Q. Smith, Cadwalader,

Wickersham & Taft, 100 MaidenLane, New York, New York 10038

MAYER & SCHWEITZER, INC.Catherine Ludden, Morgan, Lewis &

Bockius, 101 Park Avenue, NewYork, New York 10178

MERRILL LYNCH, PIERCE, FENNER &SMITH, INCORPORATED

Otto G. Obermaier, Weil, Gotshal &Manges, 767 Fifth Avenue, NewYork, New York 10153

NASH, WEISS & CO.Paul B. Uhlenhop, Lawrence, Kamin,

Saunders & Uhlenhop, 208 SouthLa Salle Street, #1750, Chicago,Illinois 60604

OLDE DISCOUNT CORPORATIONNorman J. Barry, Jr., Donahue Brown

Matthewson & Smyth, 20 N. ClarkStreet, Suite 900, Chicago, Illinois60602

PAINEWEBBER INCORPORATEDA. Douglas Melamed, Wilmer, Cutler

& Pickering, 2445 M Street, N.W.,Washington, D.C. 20037–1420

PIPER JAFFRAY INC.Neil S. Cartusciello, Shanley & Fisher,

One World Trade Center, 89thFloor, New York, New York 10048

PRUDENTIAL SECURITIESINCORPORATED

William P. Frank, Skadden, Arps,Slate, Meagher & Flom, 919 ThirdAvenue, New York, New York10022

SALOMON BROTHERS INC.Robert H. Mundheim, Salomon

Brothers Inc., Seven World TradeCenter, New York, New York 10048

SHERWOOD SECURITIES CORP.Brian J. McMahon, Crummy, Del Deo,

Dolan, Griffinger & Vecchione, P.C.,One Riverfront Plaza, Newark, NewJersey 07102

SMITH BARNEY INC.Charles A. Gilman, Cahill Gordon &

Reindel, 80 Pine Street, New York,New York 10005

SPEAR, LEEDS & KELLOGG (TROSTERSINGER)

Howard Shiffman, Dickstein, Shapiro& Morin, L.L.P., 2102 L Street,N.W., Washington, D.C. 10037

UBS SECURITIES LLCPhilip L. Graham, Jr., Sullivan &

Cromwell, 125 Broad Street, NewYork, New York 10004

John D. Worland, Jr.[FR Doc. 96–19597 Filed 8–1–96; 8:45 am]BILLING CODE 4410–01–M

Drug Enforcement Administration

Manufacturer of ControlledSubstances; Notice of Application

Pursuant to § 1301.43(a) of Title 21 ofthe Code of Federal Regulations (CFR),this is notice that on June 6, 1996,Ansys, Inc., 2 Goodyear, Irvine,California 92718, made application tothe Drug Enforcement Administration(DEA) for registration as a bulkmanufacturer of benzoylecgonine (9180)a basic class of controlled substancelisted in Schedule II.

The firm plans to manufacturebenzoylecgonine to produce standardsand controls for in-vitro diagnostic drugtesting systems.

Any other such applicant and anyperson who is presently registered with

DEA to manufacture such substancesmay file comments or objections to theissuance of the above application.

Any such comments or objectionsmay be addressed, in quintuplicate, tothe Deputy Assistant Administrator,Office of Diversion Control, DrugEnforcement Administration, UnitedStates Department of Justice,Washington, DC 20537, Attention: DEAFederal Register Representative (CCR),and must be filed no later than October1, 1996.

Dated: July 25, 1996.Gene R. Haislip,Deputy Assistant Administrator, Office ofDiversion Control, Drug EnforcementAdministration.[FR Doc. 96–19688 Filed 8–1–96; 8:45 am]BILLING CODE 4410–09–M

Parole Commission

Record of Vote of Meeting Closure(Pub. L. 94–409) (5 U.S.C. 552b)

I, Edward F. Reilly, Jr., Chairman ofthe United States Parole Commissionwas present at a meeting of saidCommission which started atapproximately ten-thirty a.m. onThursday, July 11, 1996 at 5550Friendship Boulevard, Chevy Chase,Maryland 20815. The purpose of themeeting was to decide ten appeals fromNational Commissioners’ decisionpursuant to 28 C.F.R. 2.27. ForCommissioners were present,constituting a quorum when the vote toclose the meeting was submitted.

Public announcement furtherdescribing the subject matter of themeeting and certifications of GeneralCounsel that this meeting maybe closedby vote of the Commissioners presentwere submitted to the Commissionersprior the conduct of any other business.Upon motion duly made, seconded, andcarried, the following Commissionersvoted that the meeting be closed:Edward F. Reilly, Jr., Jasper Clay, Jr.,John R. Simpson, and Michael J. Gaines.

In Witness Whereof, I make thisofficial record of the vote taken to closethis meeting and authorize this record tobe made available to the public.

July 22, 1996.Edward F. Reilly, Jr.,Chairman, U.S. Parole Commission.[FR Doc. 96–19783 Filed 7–30–96; 5:30 pm]BILLING CODE 4410–01–M


DEPARTMENT OF LABOR


Submission for OMB Review;Comment Request

July 29, 1996.The Department of Labor (DOL) has

submitted the following publicinformation collection requests (ICRs) tothe Office of Management and Budget(OMB) for review and approval inaccordance with the PaperworkReduction Act 1995 (Pub. L. 104–13, 44U.S.C. Chapter 35). Copies of theseindividual ICRs, with applicablesupporting documentation, may beobtained by calling the Department ofLabor Acting Departmental ClearanceOfficer, Theresa M. O’Malley ({202}219–5095). Individuals who use atelecommunications device for the deaf(TTY/TDD) may call {202} 219–4720between 1:00 p.m. and 4:00 p.m. Easterntime, Monday through Friday.

Comments should be sent to Office ofInformation and Regulatory Affairs,Attn: OMB Desk Officer for the Bureauof Labor Statistics, Office ofManagement and Budget, Room 10235,Washington, DC 20503 ({202} 395–

7316), within 30 days from the date ofthis publication in the Federal Register.

The OMB is particularly interested incomments which:




• Minimize the burden of thecollection of information on those whoare to respond, including through theuse of appropriate automated,electronic, mechanical, or othertechnological collection techniques orother forms of information technology,e.g., permitting electronic submission ofresponses.

Agency: Bureau of Labor Statistics.Title: Manual for Developing Local

Area Unemployment Statistics.OMB Number: 1220–0017.

Agency Number: BLS 3040, LAUS–2,LAUS–3.

Frequency: Monthly.Affected Public: State, Local or Tribal

Government.Number of Respondents: 51.Estimated Time Per Respondent: 1.62

hours for LAUS–2, .11 hours for LAUS–3.

Total Burden Hours: 120,755.Total Annualized capital/startup

costs: 0.Total annual costs (operating/


Description: Local areaunemployment statistics are used asindicators of local economic conditions,as a mechanism to qualify areas forvarious economic conditions, and as anallocator for existing job training andeconomic assistance program funding.

Agency: Bureau of Labor Statistics.Title: Mass Layoff Statistics Program.OMB Number 1220–0090.Frequency: On occasion; Monthly;

Quarterly.Affected Public: Business or other for-

profit; Not-for-profit institutions; Farms;Federal Government; State, Local orTribal Government.

Collection instrument Respondents Estimated time perrespondent Total burden

Employer Contact Burden ...................... 15,600 30 minutes (one-time) ........................... 7,800 hours.State Burden .......................................... 832 78.25 (annually) .................................... 65,520.Response Analysis Survey (RAS) ......... 500 30 minutes (one-time) ........................... 250 hours.

Total Burden House: 73,570.Total Annualized capital/startup

costs: 0.Total annual costs (operating/


Description: Section 462(E) of the JobTraining Partnership Act states that theSecretary of Labor must develop andmaintain data on permanent masslayoffs and plant closings and publish areport annually.

Agency: Bureau of Labor Statistics.Title: Compensation 2000, Phase I.OMB Number: 122–0new.Agency Number: COMP2000.Frequency: Annually, with some

quarterly testing.Affected Public: Business or other for-

profit; not-for-profit institutions; State,Local or Tribal Government.

Number of Respondents: 34,282.Estimated Time Per Respondent:

76.75 minutes.Total Burden Hours: 43,858.Total Annualized capital/startup

costs: 0.

Total annual costs (operating/maintaining systems or purchasingservices): 0.

Description: This collection is Phase Iof the new COMP2000 program whichwill integrate three separate BLSprograms, the OccupationalCompensation Survey Program,Employment Cost Index, and EmployeeBenefits Survey. Data produced fromthis survey will be critical indetermining pay increases for Federalworkers, in determining monetarypolicy, and are widely used bycompensation administrators andresearchers outside the Federal sector.

Agency: Bureau of Labor Statistics.Title: State Unemployment Insurance

(UI) Wage Records Quality Project.OMB Number: 122–0new.Agency Number: BLS–3025.Frequency: Quarterly.Affected Public: State, Local or Tribal

Government.Number of Respondents: 53.Estimated Time Per Respondent: 3

hours.Total Burden Hours: 159.

Total Annualized capital/startupcosts: 0.

Total annual costs (operating/maintaining systems or purchasingservices): 0.

Description: This informationcollection has been developed todetermine current State UnemploymentInsurance (UI) procedures involvingwage records and to verify the accuracyof State UI wage recordkeeping. It hasbeen established, in conjunction withState agencies, to ensure basic qualityand standardization of maintenance ofState wage record files for thedevelopment of a national wage recorddatabase as a labor market informationtool.Theresa M. O’Malley,Acting Departmental Clearance Officer.[FR Doc. 96–19658 Filed 8–1–96; 8:45 am]BILLING CODE 4510–24–M


Bureau of International Labor Affairs;U.S. National Administrative Office;North American Agreement on LaborCooperation; Notice of DeterminationRegarding Review of Submission# 9601

AGENCY: Office of the Secretary, Labor.ACTION: Notice.

SUMMARY: The U.S. NationalAdministrative Office (U.S. NAO) givesnotice that Submission # 9601 wasaccepted for review on July 29, 1996.The submission was filed with the NAOon June 13, 1996, by Human RightsWatch/Americas, the InternationalLabor Rights Fund, and the AsociacionNacional de Abogados Democraticos(National Association of DemocraticLawyers), and concerns therepresentation of employees of theMinistry of the Environment, NaturalResources, and Fishing by the SingleTrade Union of Workers of the FishingMinistry (SUTSP) in Mexico City,Mexico. Article 16(3) of the NorthAmerican Agreement on LaborCooperation (NAALC) provides for thereview of labor law matters in Canadaand Mexico by the NAO. The objectiveof the review of the submission will beto gather information to assist the NAOto better understand and publicly reporton the Government of Mexico’scompliance with the objectives set forthin Articles 3 and 5 of the NAALC.EFFECTIVE DATE: July 29, 1996.FOR FURTHER INFORMATION CONTACT:Irasema T. Garza, Secretary, U.S.National Administrative Office,Department of Labor, 200 ConstitutionAvenue, N.W., Room C–4327,Washington, D.C. 20210. Telephone:(202) 501–6653 (this is not a toll-freenumber).SUPPLEMENTARY INFORMATION: On June13, 1996, the Human Rights Watch/Americas, the International Labor RightsFund, and the Asociacion Nacional deAbogados Democraticos (NationalAssociation of Democratic Lawyers),filed a submission raising allegationsconcerning the right to organize andfreedom of association for federalworkers in Mexico.

Artile 16(3) of the NAALC providesfor the review of labor law matters inCanada and Mexico by the NAO. ‘‘Laborlaw’’ is defined in Article 49 of theNAALC to include freedom ofassociation.

The procedural guidelines for theNAO, published in the Federal Registeron April 7, 1994, specify that, ingeneral, the Secretary of the NAO shallaccept a submission for review if itraises issues relevant to labor law

matters in Canada or Mexico and if areview would further the objectives ofthe NAALC.

Submission # 9601 relates to labor lawmatters in Mexico. A review would alsoappear to further the objectives of theNAALC, as set out in Article 1, whichinclude improving working conditionsand living standards in each Party’sterritory; promoting, to the maximumextent possible, the labor principles setout in Annex 1 of the NAALC, amongthem freedom of association; promotingcompliance with and effectiveenforcement by each Party of, its laborlaw; and fostering transparency in theadministration of labor law.Accordingly, this submission has beenaccepted for review of the allegationsraised therein. The NAO’s decision isnot intended to indicate anydetermination as to the validity oraccuracy of the allegations contained inthe submission.

The objective of the review will be togather information to assist the NAO tobetter understand and publicly reporton the issues concerning the right toorganize and freedom of associationraised in the submission, including theGovernment of Mexico’s compliancewith the obligations agreed to underArticles 3 and 5 of the NAALC. Thereview will be completed and a publicreport issued, within 120 days, or 180days if circumstances require anextension of time, as set out in theprocedural guidelines of the NAO.

Signed at Washington, D.C. on July 29,1996.Irasema T. Garza,Secretary, U.S. National AdministrativeOffice.[FR Doc. 96–19657 Filed 8–1–96; 8:45 am]BILLING CODE 4510–28–M

Employment and TrainingAdministration

Notice of Determinations RegardingEligibility To Apply for WorkerAdjustment Assistance and NAFTATransitional Adjustment Assistance

In accordance with Section 223 of theTrade Act of 1974, as amended, theDepartment of Labor herein presentssummaries of determinations regardingeligibility to apply for trade adjustmentassistance for workers (TA–W) issuedduring the period of July, 1996.

In order for an affirmativedetermination to be made and acertification of eligibility to apply forworker adjustment assistance to beissued, each of the group eligibilityrequirements of Section 222 of the Actmust be met.

(1) That a significant number orproportion of the workers in theworkers’ firm, or an appropriatesubdivision thereof, have become totallyor partially separated,

(2) That sales or production, or both,of the firm or sub-division havedecreased absolutely, and

(3) That increases of imports ofarticles like or directly competitive witharticles produced by the firm orappropriate subdivision havecontributed importantly to theseparations, or threat thereof, and to theabsolute decline in sales or production.

Negative Determinations for WorkerAdjustment Assistance

In each of the following cases theinvestigation revealed that criterion (3)has not been met. A survey of customersindicated that increased imports did notcontribute importantly to workerseparations at the firm.TA–W–32,266 & TA–W–32,267; Owens-

Illinois, Inc., Owens Brockway GlassContainers, Plant #18 & Plant #19,Brockway, PA

TA–W–32,399; Kerr Manufacturing Co.,Massena, NY

TA–W–32,405; Scrock Cabinet Co.,Quaker Maid Kitchens Div.,Leesport, PA

TA–W–32,400; Sunbeam Corp.,Sunbeam Outdoor Product, Linton,IN

In the following cases, theinvestigation revealed that the criteriafor eligibility have not been met for thereasons specified.TA–W–32,443; Simpson Paper Co.,

Pomona, CATA–W–32,380; Mullen Lumber, Inc.,

Molalla, ORTA–W–32,318; Jaunty Textile, A Div. of

Advanced Textie Composites, Inc,Scranton, PA

TA–W–32,469; Wallace & Tiernan, Inc.,Bellville, NJ

TA–W–32,395; Cambridge Industries(Formerly Known as GenCorp),Commercial Truck Group, Ionia, MI

Increased imports did not contributeimportantly to worker separations at thefirm.TA–W–32,436 & A; Elcam, Inc., St.

Marys, PA and Clearfield, PATA–W–32,447; BSW International, Inc.,

Tulsa, OKTA–W–32,375; Host Apparel, New York,

NYThe workers firm does not produce an

article as required for certification underSection 222 of the Trade Act of 1974.TA–W–32,334; Ashland Exploration,

Inc., Brenton, WVU.S. imports of natural gas declined

relative to domestic shipments and


consumption in 1995 compared to 1994and in the first quarter of 1996compared to the same period in 1995.TA–W–32,335; Allergan, Phoenix, AZ

The investigation revealed thatcriterion (2) and criterion (3) have notbeen met. Sales or production did notdecline during the relevant period asrequired for certification. Increases ofimports of articles like or directlycompetitive with articles produced bythe firm or appropriate subdivision havenot contributed importantly to theseparations or threat thereof, and theabsolute decline in sales or production.

Affirmative Determinations for WorkerAdjustment Assistance

The following certifications have beenissued; the date following the companyname & location for each determinationreferences the impact date for allworkers for such determination.TA–W–32,363; Alcan Aluminum Co.,

Slcan Foil Products Div., LaGrange,GA: May 1, 1995.

TA–W–32,372; Eagle Picher PlasticsDiv., Huntington, IN: May 15, 1995.

TA–W–32,398; H and E Apparel, Inc.,Princeton, KY: May 16, 1995. TA–W–32,377; James Hardie Irrigation,El Paso Manufacturing, El Paso, TX:May 9, 1995.

TA–W–32,483 & A; Wundies, Inc.,Wellsboro, PA & Williamport, PA:June 10, 1995.

TA–W–32,451; Cleveland Mills, KingsMountain, NC: May 23, 1995.

TA–W–32,412; Bari Fashions, Inc.,Hoboken, NJ: May 21, 1995.

TA–W–32,384; Roadmaster Corp.,Delavan, WI: May 7, 1995.

TA–W–32,401; SMK Manufacturing,Inc., Placentia, CA: May 16, 1995.

TA–W–32,374; General ElectricSuperabrasives, Worthington, OH:May 17, 1995.

TA–W–32,487; SavannahManufacturing Corp., Savannah,TN: June 7, 1995.

TA–W–32,424; Screen Pac, Roseto, PA:May 30, 1995.

TA–W–32,343; Osawatomie, Inc., dbaESW (Formerly Engineered WellServices, Inc), Dickinson, ND: April6, 1995.

TA–W–32,461 & A; Oxford of Burgan,Oxford Industries, Inc., Burgan, NC,Oxford Industries, Inc., Atlanta,GA: June 17, 1995.

TA–W–32,479; Taylor Clothing, Taylor,PA: June 12, 1995.

TA–W–32,459; Warner’s A Div. ofWarnaco, Inc., Dothal, AL: June 4,1995.

TA–W–32,408; Heritage Sportswear,Marion, SC: May 15, 1995.

TA–W–32,308; Hanover II Div. STI, Inc.,Pawtucket, RI: April 16, 1995.

TA–W–32,419; Pioneer Balloon Co.,Willard Operations, Willard, OH:May 2, 1995.

TA–W–32,382 and A; Bay SpringsApparel, Nazareth/Century Mills,Inc., Bay Springs, MS and Monroe,NC: May 15, 1995.

TA–W–32,342; B.A.S.F. Corp., Detroit,MI: April 30, 1995.

TA–W–32,321; Equitable ResourcesEnergy Co., Western Region,Billings, MT: April 30, 1995.

TA–W–32,296; Isenburg Enterprises,Inc., Salt Lake City, UT: April 19,1995.

Also, pursuant to Title V of the NorthAmerican Free Trade AgreementImplementation Act (P.L. 103–182)concerning transitional adjustmentassistance hereinafter called (NAFTA–TAA) and in accordance with Section250(a) Subchapter D, Chapter 2, Title II,of the Trade Act as amended, theDepartment of Labor presentssummaries of determinations regardingeligibility to apply for NAFTA–TAAissued during the month of July, 1996.

In order for an affirmativedetermination to be made and acertification of eligibility to apply forNAFTA–TAA the following groupeligibility requirements of Section 250of the Trade Act must be met:

(1) That a significant number orproportion of the workers in theworkers’ firm, or an appropriatesubdivision thereof, (including workersin any agricultural firm or appropriatesubdivision thereof) have become totallyor partially separated from employmentand either—

(2) That sales or production, or both,of such firm or subdivision havedecreased absolutely,

(3) That imports from Mexico orCanada of articles like or directlycompetitive with articles produced bysuch firm or subdivision have increased,and that the increases in importscontributed importantly to suchworkers’ separations or threat ofseparation and to the decline in sales orproduction of such firm or subdivision;or

(4) That there has been a shift inproduction by such workers’ firm orsubdivision to Mexico or Canada ofarticles like or directly competitive witharticles which are produced by the firmor subdivision.

Negative Determinations NAFTA–TAA

In each of the following cases theinvestigation revealed that criteria (3)and (4) were not met. Imports fromCanada or Mexico did not contributeimportantly to workers’ separations.There was no shift in production from

the subject firm to Canada or Mexicoduring the relevant period.NAFTA–TAA–01038; Sunbeam Corp.,

Sunbeam Outdoor Products, Linton,IN

NAFTA–TAA–00984 & A; Owens-Illinois, Inc., Owens Brockway GlassContainers, Plant #18 and Plant #19,Brockway, PA

NAFTA–TAA–01055; Sunbeam,Sunbeam Household Products—Cookeville, Cookeville, TN

NAFTA–TAA–01075; VarsityManufacturing, Susquehanna, PA

NAFTA–TAA–01053; Aquila, Inc.,Superior, WI

NAFTA–TAA–01052; Carolina DressCorp., Hayesville, NC

NAFTA–TAA–01026; Roadmaster Corp.,Delavan, WI

In the following cases, theinvestigation revealed that the criteriafor eligibility have not been met for thereasons specified.NAFTA–TAA–01094; BP Exploration &

Oil Inc., Paulsboro Terminal Div.,Paulsboro, NJ

NAFTA–TAA–01058 & A; Elcam, Inc.,St. Marys, PA and Clearfield, PA

The investigation revealed that theworkers of the subject firm did notproduce an article within the meaningof Section 250(a) of the Trade Act, asamended.

Affirmative Determinations NAFTA–TAA

The following certifications have beenissued; the date following the companyname & location for each determinationreferences the impact date for allworkers for such determination.NAFTA–TAA–01071; Sara Lee Knit

Products, Eatonton Sewing Div.,Eatonton, GA: June 4, 1995.

NAFTA–TAA–01065 & A; Oxford ofBurgaw, Oxford Dress Div. ofOxford Industries, Inc., Burgaw, NC& Corp. Headquarters, Atlanta, GA:June 5, 1995.

NAFTA–TAA–01044: PictsweetMushroom Farm, Salem OR: May30, 1995. NAFTA–TAA–01047;Medley Company Cedar, Inc.,Santa, ID: May 23, 1995.

NAFTA–TAA–01082; Magnetek,Lighting Products Group,Blytheville, AR: June 4, 1995.

NAFTA–TAA–01062; Pine River LumberCo., Limited, Maple Lumber Div.,Kenton, MI: May 9, 1995.

NAFTA–TAA–01080; Mabex UniversalCorp., San Diego Pe FoamConverting & Warehousing Facility,San Diego, CA: May 20, 1995.

I hereby certify that the aforementioneddeterminations were issued during the monthof July 1996. Copies of these determinations


are available for inspection in Room C–4318,U.S. Department of Labor, 200 ConstitutionAvenue, NW., Washington, DC 20210 duringnormal business hours or will be mailed topersons who write to the above address.

Dated: July 17, 1996.Russell Kile,Acting Program Manager, Policy &Reemployment Service, Office of TradeAdjustment Assistance.[FR Doc. 96–19652 Filed 8–1–96; 8:45 am]BILLING CODE 4510–30–M

[TA–W–32,125]

AT&T Corporation; NCR Corporation;Viroqua, WI; Notice of NegativeDetermination Regarding Applicationfor Reconsideration

By application dated June 10, 1996,one of the petitioners requestedadministrative reconsideration of theDepartment’s negative determinationregarding worker eligibility to apply fortrade adjustment assistance. The denialnotice was signed on May 13, 1996 andpublished in the Federal Register onMay 24, 1996 (61 FR 26218).

Pursuant to 29 CFR 90.18(c)reconsideration may be granted underthe following circumstances:

(1) If it appears on the basis of factsnot previously considered that thedetermination complained of waserroneous;

(2) If it appears that the determinationcomplained of was based on a mistakein the determination of facts notpreviously considered; or

(3) If in the opinion of the CertifyingOfficer, a misinterpretation of facts or ofthe law justified reconsideration of thedecision.

The request for reconsideration claimsthat AT&T Corporation, NCRCorporation lost business to foreignproduced electronic business forms andsystems substitutes. The request alsoclaims that the Department’s customersurvey focussed on current customersrather than customers who haveswitched to imported electronicbusiness form substitutes.

Findings of the investigation showedthat workers of AT&T Corporation, NCRCorporation located in Viroqua,Wisconsin produced business forms andlabels. THe Department’s denial of TAAfor workers of the subject firm wasbased on the fact that the ‘‘contributedimportantly’’ test of the GroupEligibility requirement of the Trade Actwas not met. The Department conducteda survey of major declining customers ofAT&T Corporation, NCR Corporation.None of the survey respondentsreported import purchases of business

forms or labels during the time periodrelevant to the investigation.

Technological unemployment as theresult of rapid development ofelectronic business forms would notprovide a basis for a worker groupcertification.

Conclusion

After review of the application andinvestigative findings, I conclude thatthere has been no error ormisinterpretation of the law or of thefacts which would justifyreconsideration of the Department ofLabor’s prior decision. Accordingly, theapplication is denied.

Signed at Washington, D.C. this 16th dayof July 1996.Russell T. Kile,Acting Program Manager, Policy andReemployment Services, Office of TradeAdjustment Assistance.[FR Doc. 96–19653 Filed 8–1–96; 8:45 am]BILLING CODE 4510–30–M

[TA–W–32,227]

Ralph Lauren Womenswear,Incorporated, Bidermann IndustriesCorporation, New York, New York;Amended Certification RegardingEligibility To Apply for WorkerAdjustment Assistance

In accordance with Section 223 of theTrade Act of 1974 (19 U.S.C. 2273) theDepartment of Labor issued aCertification of Eligibility to Apply forWorker Adjustment Assistance on May16, 1996, applicable to all workers ofRalph Lauren Womenswear,Incorporated, Bidermann IndustriesCorporation, New York, New York. Thenotice was published in the FederalRegister on June 6, 1996 (FR 61 28900).

At the request of former employees,the Department reviewed thecertification for workers of the subjectfirm. The workers of Ralph LaurenWomenswear, Incorporated, BidermannIndustries Corporation, New York, NewYork produced ladies’ apparel. TheUnion representative for the affectedworkers provided evidence that anattempt was made to file a TAA petitionon behalf of the workers of the subjectfirm at an earlier date. Accordingly, theDepartment is amending thecertification to change the impact dateform March 27, 1995 to January 31,1995, the date separations began.

The intent of the Department’scertification is to include all workers ofRalph Lauren Womenswear,Incorporated, Bidermann IndustriesCorporation adversely affected byimports of apparel.

The amended notice applicable toTA–W–32,227, is hereby issued asfollows:

All workers of Ralph Lauren Womenswear,Incorporated, Bidermann IndustriesCorporation, New York, New York whobecame totally or partially separated fromemployment on or after January 31, 1995 areeligible to apply for adjustment assistanceunder Section 223 of the Trade Act of 1974.

Signed at Washington, DC this 16th day ofJuly 1996.Russell T. Kile,Acting Program Manager, Policy andReemployment Services Office of TradeAdjustment Assistance.[FR Doc. 96–19650 Filed 8–1–96; 8:45 am]BILLING CODE 4510–30–M

[TA–W–32, 387]

Shepard’s/McGraw-Hill CompaniesColorado Springs, Colorado; Notice ofTermination of Investigation

Pursuant to Section 221 of the TradeAct of 1974, an investigation wasinitiated on May 28, 1996 in response toa worker petition which was filed onMay 10, 1996 on behalf of workers atShepard’s/McGraw-Hill Companies,Colorado Springs, Colorado.

The petitioner has requested that thepetition be withdrawn. Consequently,further investigation in this case wouldserve no purpose, and the investigationhas been terminated.

Signed in Washington, D.C. this 18th dayof July, 1996.Russell T. Kile,Acting Program Manager, Policy andReemployment Services, Office of TradeAdjustment Assistance.[FR Doc. 96–19651 Filed 8–1–96; 8:45 am]BILLING CODE 4510–30–M

[TA–W–31,782]

Synergy Services, Inc., El Paso, TX;Investigations Regarding Certificationsof Eligibility To Apply for WorkerAdjustment Assistance; Correction

This notice corrects the notice forpetition number TA–W–31,782 whichwas published in the Federal Registeron February 14, 1996 (61 FR 5808) in FRDocument 96–3248.

This revises the subject firm locationon the twenty-second line in theappendix table on page 5808. On thetwenty-second line in the third column,the location should read El Paso, Texas.


Signed in Washington, D.C., this 11th dayof July 1996.Curtis K. Kooser,Acting Program Manager, Policy andReemployment Services, Office of TradeAdjustment Assistance.[FR Doc. 96–19655 Filed 8–1–96; 8:45 am]BILLING CODE 4510–30–M

[NAFTA–00920]

AT&T Corporation; NCR Corporation;Viroqua, Wisconsin; Notice of NegativeDetermination Regarding Applicationfor Reconsideration

By application dated June 10, 1996,one of the petitioners requestedadministrative reconsideration of theDepartment’s negative determinationregarding worker eligibility to apply forNAFTA-Transitional AdjustmentAssistance. The denial notice wassigned on May 13, 1996 and publishedin the Federal Register on May 24, 1996(61 FR 26219).

Pursuant to 29 CFR 90.18(c)reconsideration may be granted underthe following circumstances:

(1) If it appears on the basis of factsnot previously considered that thedetermination complained of waserroneous;

(2) If it appears that the determinationcomplained of was based on a mistakein the determination of facts notpreviously considered; or

(3) If in the option of the CertifyingOfficer, a misinterpretation of facts or ofthe law justified reconsideration of thedecision.

The request for reconsideration claimsthat AT&T Corporation, NCRCorporation lost business to foreignproduced electronic business forms andsystems substitutes. The request alsoclaims that the Department’s customersurvey focused on current customersrather than customers who haveswitched to imported electronicbusiness form substitutes.

Findings of the investigation showedthat workers of AT&T Corporation, NCRCorporation located in Viroqua,Wisconsin produced business forms andlabels. The Department’s denial ofNAFTA–TAA for workers of the subjectfirm was based on the fact that therewas no shift of production from theViroqua, Wisconsin production facilityto Mexico or Canada, nor did AT&TCorporation, NCR Corporation importfrom Mexico or Canada any articlescompetitive with business forms andlabels. The Department also conducteda survey of major declining customers ofAT&T Corporation, NCR Corporation.None of the survey respondentsreported import purchases of business

forms or labels from Mexico or Canadaduring the time period relevant to theinvestigation.

Technological unemployment as theresult of rapid development ofelectronic business forms would notprovide a basis for a worker groupcertification.

Conclusion

After review of the application andinvestigative findings, I conclude thatthere has been no error ormisinterpretation of the law or of thefacts which would justifyreconsideration of the Department ofLabor’s prior decision. Accordingly, theapplication is denied.

Signed at Washington, D.C. this 16th dayof July 1996.Russell T. Kile,Acting Program Manager, Policy and Re-employment Services, Office of TradeAdjustment Assistance.[FR Doc. 96–19656 Filed 8–1–96; 8:45 am]BILLING CODE 4510–30–M

THE DEPARTMENT OF LABOR

Employment and TrainingAdministration

[NAFTA–00902]

Kinney Shoe Corporation BeaverSprings, PA; Notice of RevisedDetermination on Reconsideration

On May 24, 1996, the Departmentissued a Negative DeterminationRegarding Eligibility to Apply forNAFTA-Transitional AdjustmentAssistance (NAFTA–TAA) applicable toall workers of Kinney Shoe Corporationlocated in Beaver Springs,Pennsylvania. The notice was publishedin the Federal Register on May 24, 1996(FR 61 26219).

By letter of June 7, 1996, a petitionerrequested administrativereconsideration of the Department’sfindings.

The employees of the Kinney Shoeplant in Beaver Springs were engaged inthe production of men’s, women’s andchildren’s footwear. Sales andemployment at the subject firm declinedduring the time period relevant to theinvestigation.

New findings on reconsiderationshow that the footwear produced byKinney Shoe Corporation is massmarketed. Therefore, the articlesmanufactured by the subject firm havebeen impacted importantly by the highpenetration of nonrubber footwearimports in this market. In 1994 and1995, the ratio of U.S. imports of general

nonrubber footwear from Mexico todomestic production was more than500%.

Conclusion

After careful review of the additionalfacts obtained on reconsideration, Iconclude that increased imports ofarticles from Mexico like or directlycompetitive with shoes contributedimportantly to the declines in sales orproduction and to the total or partialseparation of workers of Kinney ShoeCorporation, Beaver Springs,Pennsylvania. In accordance with theprovisions of the Act, I make thefollowing certification:

All workers of Kinney Shoe Corporation,Beaver Springs, Pennsylvania who becametotally or partially separated fromemployment on or after March 14, 1995 areeligible to apply for NAFTA–TAA underSection 250 of the Trade Act of 1974.

Signed at Washington, DC this 12th day ofJuly 1996.Curtis K. Kooser,Acting Program Manager, Policy andReemployment Services, Office of TradeAdjustment Assistance.[FR Doc. 96–19654 Filed 8–1–96; 8:45 am]BILLING CODE 4510–30–M

DEPARTMENT OF LABOR

Employment StandardsAdministration, Wage and HourDivision

Minimum Wages for Federal andFederally Assisted Construction;General Wage Determination Decisions

General wage determination decisionsof the Secretary of Labor are issued inaccordance with applicable law and arebased on the information obtained bythe Department of Labor from its studyof local wage conditions and data madeavailable from other sources. Theyspecify the basic hourly wage rates andfringe benefits which are determined tobe prevailing for the described classes oflaborers and mechanics employed onconstruction projects of a similarcharacter and in the localities specifiedtherein.

The determinations in these decisionsof prevailing rates and fringe benefitshave been made in accordance with 29CFR Part 1, by authority of the Secretaryof Labor pursuant to the provisions ofthe Davis-Bacon Act of March 3, 1931,as amended (46 Stat. 1494, as amended,40 U.S.C. 276a) and of other Federalstatutes referred to in 29 CFR Part 1,Appendix, as well as such additionalstatutes as may from time to time beenacted containing provisions for the


payment of wages determined to beprevailing by the Secretary of Labor inaccordance with the Davis-Bacon Act.The prevailing rates and fringe benefitsdetermined in these decisions shall, inaccordance with the provisions of theforegoing statutes, constitute theminimum wages payable on Federal andfederally assisted construction projectsto laborers and mechanics of thespecified classes engaged on contractwork of the character and in thelocalities described therein.

Good cause is hereby found for notutilizing notice and public commentprocedure thereon prior to the issuanceof these determinations as prescribed in5 U.S.C. 553 and not providing for delayin the effective date as prescribed in thatsection, because the necessity to issuecurrent construction industry wagedeterminations frequently and in largevolume causes procedures to beimpractical and contrary to the publicinterest.

General wage determinationdecisions, and modifications andsupersedeas decisions thereto, containno expiration dates and are effectivefrom their date of notice in the FederalRegister, or on the date written noticeis received by the agency, whichever isearlier. These decisions are to be usedin accordance with the provisions of 29CFR parts 1 and 5. Accordingly, theapplicable decision, together with anymodifications issued, must be made apart of every contract for performance ofthe described work within thegeographic area indicated as required byan applicable Federal prevailing wagelaw and 29 CFR Part 5. The wage ratesand fringe benefits, notice of which ispublished herein, and which arecontained in the Government PrintingOffice (GPO) document entitled‘‘General Wage Determinations IssuedUnder The Davis-Bacon and RelatedActs,’’ shall be the minimum paid bycontractors and subcontractors tolaborers and mechanics.

Any person, organization, orgovernmental agency having an interestin the rates determined as prevailing isencouraged to submit wage rate andfringe benefit information forconsideration by the Department.Further information and self-explanatory forms for the purpose ofsubmitting this data may be obtained bywriting to the U.S. Department of Labor,Employment Standards Administration,Wage and Hour Division, Division ofWage Determinations, 200 ConstitutionAvenue, N.W., Room S–3014,Washington, D.C. 20210.

New General Wage DeterminationDecisions

The number of the decisions added tothe Government Printing Officedocument entitled ‘‘General WageDeterminations Issued Under the Davis-Bacon and Related Acts’’ are listed byVolume and States:

Volume IVIndiana

IN960060 (August 2, 1996)IN960061 (August 2, 1996)

Modifications to General WageDetermination Decisions

The number of decisions listed in theGovernment Printing Office documentsentitled ‘‘General Wage DeterminationsIssued Under the Davis-Bacon andRelated Acts’’ being modified are listedby Volume and State. Dates ofpublication in the Federal Register arein parentheses following the decisionsbeing modified.

Volume I

New JerseyNJ960002 (March 15, 1996)NJ960003 (March 15, 1996)NJ960004 (March 15, 1996)

New YorkNY960003 (March 15, 1996)NY960013 (March 15, 1996)

Volume II

District of ColumbiaDC960001 (March 15, 1996)DC960003 (March 15, 1996)

West VirginiaWV960006 (March 15, 1996)

Volume III

AlabamaAL960017 (March 15, 1996)AL960034 (March 15, 1996)AL960042 (March 15, 1996)AL960044 (March 15, 1996)

FloridaFL960009 (March 15, 1996)FL960013 (March 15, 1996)FL960016 (March 15, 1996)FL960034 (March 15, 1996)FL960099 (March 15, 1996)FL960100 (March 15, 1996)FL960101 (March 15, 1996)

KentuckyKY960027 (March 15, 1996)

North CarolinaNC 960001 (March 15, 1996)NC 960003 (March 15, 1996)

Volume IV

IllinoisIL960001 (March 15, 1996)IL960002 (March 15, 1996)IL960003 (March 15, 1996)IL960004 (March 15, 1996)IL960005 (March 15, 1996)IL960006 (March 15, 1996)IL960007 (March 15, 1996)IL960008 (March 15, 1996)IL960009 (March 15, 1996)IL960010 (March 15, 1996)

IL960011 (March 15, 1996)IL960012 (March 15, 1996)IL960013 (March 15, 1996)IL960014 (March 15, 1996)IL960015 (March 15, 1996)IL960016 (March 15, 1996)IL960017 (March 15, 1996)IL960018 (March 15, 1996)IL960023 (March 15, 1996)IL960026 (March 15, 1996)IL960038 (March 15, 1996)IL960045 (March 15, 1996)IL960046 (March 15, 1996)IL960049 (March 15, 1996)IL960051 (March 15, 1996)IL960066 (March 15, 1996)

IndianaIN960001 (May 17, 1996)IN960002 (March 15, 1996)IN960004 (March 15, 1996)IN960005 (March 15, 1996)IN960018 (March 15, 1996)

WisconsinWI960001 (March 15, 1996)WI960010 (March 15, 1996)

Volume VKansas

KS960004 (March 15, 1996)KS960006 (March 15, 1996)KS960007 (March 15, 1996)KS960008 (March 15, 1996)KS960012 (March 15, 1996)KS960013 (March 15, 1996)KS960017 (March 15, 1996)KS960018 (March 15, 1996)KS960019 (March 15, 1996)KS960020 (March 15, 1996)KS960021 (March 15, 1996)KS960022 (March 15, 1996)KS960023 (March 15, 1996)KS960026 (March 15, 1996)KS960029 (March 15, 1996)KS960061 (March 15, 1996)

OklahomaOK960013 (March 15, 1996)OK960014 (March 15, 1996)

TexasTX960007 (March 15, 1996)TX960034 (March 15, 1996)TX960037 (March 15, 1996)TX960060 (March 15, 1996)

Volume VIHawaii

HI960001 (March 15, 1996)Montana

MT960001 (March 15, 1996)North Dakota

ND960015 (March 15, 1996)ND960016 (March 15, 1996)ND960017 (March 15, 1996)ND960018 (March 15, 1996)ND960019 (March 15, 1996)ND960020 (March 15, 1996)ND960027 (March 15, 1996)

NevadaNV960001 (March 15, 1996)NV960005 (March 15, 1996)

General Wage DeterminationPublication

General wage determinations issuedunder the Davis-Bacon and related Acts,including those noted above, may befound in the Government Printing Office


(GPO) document entitled ‘‘General WageDeterminations Issued Under The Davis-Bacon and Related Acts’’. Thispublication is available at each of the 50Regional Government DepositoryLibraries and many of the 1,400Government Depository Libraries acrossthe county.

The general wage determinationsissued under the Davis-Bacon andrelated Acts are available electronicallyby subscription to the FedWorldBulletin Board System of the NationalTechnical Information Service (NTIS) ofthe U.S. Department of Commerce at(703) 487–4630.

Hard-copy subscriptions may bepurchased from: Superintendent ofDocuments, U.S. Government PrintingOffice, Washington, DC 20402, (202)512–1800.

When ordering hard-copysubscription(s), be sure to specify theState(s) of interest, since subscriptionsmay be ordered for any or all of the sixseparate volumes, arranged by State.Subscriptions include an annual edition(issued in January or February) whichincludes all current general wagedeterminations for the States covered byeach volume. Throughout the remainderof the year, regular weekly updates aredistributed to subscribers.

Signed at Washington, DC, this 26th day ofJuly 1996.Philip J. Gloss,Chief, Branch of Construction WageDeterminations.[FR Doc. 96–19415 Filed 8–1–96; 8:45 am]BILLING CODE 4510–27–M

Bureau of Labor Statistics

Proposed Collection; CommentRequest

ACTION: Notice.

SUMMARY: The Department of Labor, aspart of its continuing effort to reducepaperwork and respondent burden,conducts a preclearance consultationprogram to provide the general publicand Federal agencies with anopportunity to comment on proposedand/or continuing collections ofinformation in accordance with thePaperwork Reduction Act of 1995(PRA95) (44 U.S.C. 3506(c)(2)(A)). Thisprogram helps to ensure that requested

data can be provided in the desiredformat, reporting burden (time andfinancial resources) is minimized,collection instruments are clearlyunderstood, and the impact of collectionrequirements on respondents can beproperly assessed. Currently, the Bureauof Labor Statistics (BLS) is solicitingcomments concerning the proposedrevision of the ‘‘Report on Employment,Payroll, and Hours (BLS–790).’’

A copy of the proposed informationcollection request (ICR) can be obtainedby contacting the individual listedbelow in the addressee section of thisnotice.DATES: Written comments must besubmitted to the office listed in theaddressee section below on or beforeOctober 1, 1996.

BLS is particularly interested incomments which help the agency to:




• Minimize the burden of thecollection of information on those whoare to respond, including through theuse of appropriate automated,electronic, mechanical, or othertechnological collection techniques orother forms of information technology,e.g., permitting electronic submissionsof responses.ADDRESSES: Send comments to Karin G.Kurz, BLS Clearance Officer, Division ofManagement Systems, Bureau of LaborStatistics, Room 3255, 2 MassachusettsAvenue NE., Washington, DC 20212.Ms. Kurz can be reached on 202–606–7628 (this is not a toll free number).


I. BackgroundThe Bureau of Labor Statistics has

been charged by Congress (29 U.S.C. 1)with the responsibility of collecting andpublishing monthly information onemployment, the average wage received,

and the hours worked, by area and byindustry. The Current EmploymentStatistics (CES) program producesmonthly estimates, hours, and earningsof U.S. nonagricultural establishmentpayrolls. Information for these estimatesis derived from a sample of 391,800establishments, who each month reporttheir employment, payroll, and hours onforms identified as BLS–790. Theestimates produced from the data arefundamental inputs in economicdecision processes at all levels ofprivate enterprise, government, andorganized labor. The estimates are vitalto the calculation of the Gross DomesticProduct, the Federal Reserve Board’sIndex of Industrial Production and theComposite Index of Leading EconomicIndicators among others.

The earnings data provide a proxymeasure of the cost of labor for theindustry detail not available from theBureau’s Employment Cost Indexprogram. The early availability ofemployment and hours data provideearly signals of economic change.

II. Current Actions

BLS has improved methods ofcollecting the CES. A portion of the CESsample is now collected (about 210,000establishments) using two automatedmethods—Computer AssistedTelephone Interviewing (CATI) andTouchtone Data Entry (TDE). Thesemethods have improved the timelines ofdata collection as well as reduced costs.

Forms have been developed that makeit easier for respondents to report databy facsimile transmission (‘‘fax’’). Theseforms lessen reporting burden on largemulti-unit reporters by allowing them toreport information for several of theirestablishments on one form each month.

Electronic Data Interchange (EDI) isalso used for some very large multi-unitreporters and research into the use ofthe World Web for data collection hasbegun.

Type of Review: Revision.Agency: Bureau of Labor Statistics.Title: Report on Employment, Payroll,

and Hours (BLS–790).OMB Number: 1220–0011.Affected Public: State or local

governments; businesses or other for-profit; non-profit institutions; smallbusinesses or organizations.

Form Number ofrespondents

Frequencyof response

Annualresponses

Minutes re-quired tocomplete

report

Annual bur-den hours

BLS 790 BM ............................................................................................. 400 12 4,800 15 1,200BLS 790–G, G–S, J–FD ........................................................................... 36,400 12 436,800 5 36,400BLS 790–CU ............................................................................................. 1 0 1 45,000 2 1,500


1 Section 102 of Reorganization Plan No. 4 of1978 (43 FR 47713, October 17, 1978, 5 U.S.C. App.1 [1995]) generally transferred the authority of theSecretary of the Treasury to issue administrativeexemptions under section 4975 of the Code to theSecretary of Labor.

Form Number ofrespondents

Frequencyof response

Annualresponses

Minutes re-quired tocomplete

report

Annual bur-den hours

BLS 790–Multi .......................................................................................... 2 30,000 12 360,000 7 42,000All other BLS–790 ..................................................................................... 3 325,000 12 3,900,000 7 455,000

Total ................................................................................................... 391,800 .................... 4,746,600 .................... 536,100

1 A subset of current reporters (45,000) receive this ‘‘one-time’’ supplemental form.2 Assumes 3,000 multi-unit firms report by fax for approximately 30,000 establishments.3 All other BLS–790 forms collect the same information and differ only by industry definitions.

Total Burden Cost (capital/startup):$0.

Total Burden Cost (operating/maintenance): $0.

Comments submitted in response tothis notice will be summarized and/orincluded in the request for Office ofManagement and Budget approval of theinformation collection request; they alsowill become a matter of public record.

Signed at Washington, DC, this 29th day ofJuly, 1996.Peter T. Spolarich,Chief, Division of Management Systems,Bureau of Labor Statistics.[FR Doc. 96–19716 Filed 8–1–96; 8:45 am]BILLING CODE 4510–24–M

Pension and Welfare BenefitsAdministration

[Prohibited Transaction Exemption 96–63;Application No. D–10218]

Class Exemption to Permit theRestoration of Delinquent ParticipantContributions to Plans

AGENCY: Pension and Welfare BenefitsAdministration (PWBA), Department ofLabor.ACTION: Grant of class exemption.

SUMMARY: This document contains afinal exemption from the prohibitedtransaction restrictions of the EmployeeRetirement Income Security Act of 1974(ERISA) and the Internal Revenue Codeof 1986 (the Code). The class exemptionprovides exemptive relief for certaintransactions involving the failure totransmit participant contributions topension plans where such delinquentamounts are voluntarily restored to suchplans with lost earnings. Thisexemption is being granted as part of theDepartment’s Pension Payback Program(the Program), which is targeted atpersons who failed to transferparticipant contributions to pensionplans, including section 401(k) plans,within the time frames mandated by theDepartment’s participant contributionregulation, and thus violated title I orERISA. The exemption affects plans,participants and beneficiaries of such

plans and certain other personsengaging in such transactions.FOR FURTHER INFORMATION CONTACT:Ms. Lyssa Hall, Office of ExemptionDeterminations, Pension and WelfareBenefits Administration, U.S.Department of Labor, (202) 219–8971,(this is not a toll-free number.); orWilliam Taylor, Plan Benefits SecurityDivision, Office of the Solicitor, U.S.Department of Labor, (202) 219–9141.(This is not a toll-free number).SUPPLEMENTARY INFORMATION: On March7, 1996, the Department of Labor (theDepartment) published a notice in theFederal Register (61 FR 9199) of thependency of a proposed class exemptionfrom the restrictions of sections406(a)(1) (A) through (D), 406(b)(1) and406(b)(2) of ERISA and from the taxesimposed by section 4975 (a) and (b) ofthe Code, by reason of section 4975(c)(1)(A) through (E) of the Code.

The Department proposed the classexemption on its own motion pursuantto section 408(a) of ERISA and section4975(c)(2) of the Code, and inaccordance with the procedures setforth in 29 CFR part 2570, subpart B, (55FR 32836, August 10, 1990.1

The notice gave interested persons anopportunity to submit writtencomments or requests for a hearing onthe proposed class exemption to theDepartment. The Department receivedone written comment and a number oftelephone inquiries regarding theproposed class exemption and theProgram. There were no requests for apublic hearing. Upon consideration ofthe comments received, the Departmenthas determined to grant the proposedclass exemption, subject to certainmodifications. These modifications andthe comment are discussed below.

Paperwork Reduction Act AnalysisPursuant to the Paperwork Reduction

Act of 1995 (PRA 95), 44 U.S.C. 3507,and 5 CFR Part 1320, the collection of

information in this class exemption waspublished for public comment on March7, 1996 (61 FR 9199). No commentswere received from the public regardingthe collection of information. OMB hasapproved this collection, with thecontrol number 1210–0097, whichexpires on January 31, 1997. Persons arenot required to respond to thiscollection of information unless itdisplays a currently valid OMB controlnumber.

Discussion of the CommentsSection I(b) of the proposed

exemption contained the requirementthat the total of all outstandingdelinquent participant contributions onMarch 7, 1996, excluding earnings, doesnot exceed the aggregate amount ofparticipant contributions that were paidto, or withheld by, the employer forcontribution to the plan for calendaryear 1995. Pursuant to this condition, anemployer who had repaid all delinquentcontributions prior to March 7, 1996would not meet this condition of theexemption and thus would be ineligiblefor the relief provided under the finalclass exemption to extend relief toemployers who voluntarily restoreddelinquent participant contributionsprior to March 7, 1996 but on or afterNovember 28, 1995, the date theSecretary of Labor announced theDepartment’s ‘‘public awarenesscampaign’’ on 401(k) plans. Thecommenter stated that the campaignwas widely reported in the press andled many employers to review theircurrent payroll practices and tovoluntarily correct any errors theyuncovered by restoring delinquentamounts plus interest. The commenterfurther stated that equity would seem todemand that the Pension PaybackProgram, and the attendant relief fromany civil and criminal penalties and anyexcise taxes that may result from afinding that the transactions wereprohibited should be made available tothose employers who responded to theSecretary’s call for increased scrutiny of401(k) plans and moved swiftly toresolve a questionable situation.According to the commenter, companies


2 The final participant contribution regulation,which was promulgated in 1988, provides that theassets of a plan include amounts (other than uniondues) that a participant or beneficiary pays to anemployer, or amounts that a participant haswithheld from his or her wages by an employer, forcontribution to the plan as of the earliest date onwhich such contributions can reasonably besegregated from the employer’s general assets, butin no event more than 90 days from the date onwhich such amounts are received by the employer(in the case of amounts that a participant orbeneficiary pays to an employer) or 90 days fromthe date on which such amounts would otherwisehave been payable to the participant in cash (in caseof amounts withheld by an employer from aparticipant’s wages). 29 CFR 2510.3–102.

The Department notes that a notice of proposedrulemaking was published in the Federal Registeron December 20, 1995 (60 FR 66036) which wouldrevise the 1988 regulation by changing themaximum period during which participantcontributions to an employee benefit plan may betreated as other than ‘‘plan assets’’.

3 The Department notes that correspondingchanges have also been made to the respectiveprovisions of the Pension Payback Program.

4 The Department notes that this date correspondsto the date contained in the Program.

that took precisely the action theSecretary hoped to encourage with hispress conference and awarenesscampaign should not be denied therelief available through the Programmerely because they responded quickly,before the March 7, 1996 announcementof the Program and proposed classexemption.

The Department notes that thepurpose of the Program is to benefitworkers by encouraging persons torestore delinquent participantcontributions to pension plans. TheDepartment agrees with thecommenter’s views that those personswho voluntarily restore delinquentparticipant contributions following theSecretary’s announcement of theDepartment’s ‘‘public awarenesscampaign’’ and who met the otherconditions of the exemption should beentitled to the relief provided in theexemption. Accordingly, theDepartment has modified the finalexemption as requested by thecommenter.

Section I(a) of the proposedexemption provided that:

(a) All delinquent participantcontributions are restored to the pensionplan plus the greater of:

(1) The amount that otherwise wouldhave been earned on the participantcontributions from the date on whichsuch contributions were paid to, orwithheld by, the employer until suchmoney is fully restored to the plan, hadsuch contributions been invested inaccordance with applicable planprovisions, or

(2) The amount the participant wouldhave earned on the participantcontributions during such period usingan interest rate equal to theunderpayment rate defined in section6621(a)(2) of the Code from the date onwhich such contributions were paid to,or withheld by, the employer until suchmoney is fully restored to the plan.

In the preamble to the proposedexemption, (61 FR 9199, 9202) theDepartment noted that this conditionrequires that the earnings be calculatedon an account by account basis in orderto mirror the earnings the participantswould have otherwise accrued.

A number of telephone callersobjected to this requirement. Accordingto the callers, it would beadministratively burdensome and costlyto specifically determine what eachparticipant would have earned on his orher account balance during thepertinent period. Two of the callersrequested that the Department confirmthat the condition requiring an accountby account calculation would besatisfied if an earnings factor equal to

the highest rate of return generated byany of the investment options offeredunder the plan during the applicableperiod was applied to each of theaffected accounts. In the Department’sview, the alternative suggested by thecallers would satisfy the requirements ofsection I(a), while reducing overallburdens and costs, since eachparticipant would receive, at aminimum, the amount that otherwisewould have accrued on his or heraccount.

Several telephone callers expressedconfusion regarding eligibility forexemptive relief under the proposal ifthe earnings on delinquentcontributions had been repaid prior tothe effective date of the Program. TheDepartment has modified section I(b) ofthe final exemption to clarify thatexemptive relief is available for therestoration of earnings on or afterNovember 28, 1995, which areattributable to delinquent contributionsthat have been restored to a plan priorto the effective date of the Program.

Finally, the Department hasdetermined on its own motion to modifythe requirement in section I(a) (1) and(2) of the proposed exemption whichprovides that earnings on delinquentparticipant contributions shall becalculated from the date that suchcontributions were paid to or withheldby the employer. This condition asproposed imposes a more stringentrequirement on the calculation ofearnings than required by theparticipant contribution regulation.2The Department has reconsidered thisrequirement and determined not torequire employers to restore moreearnings under the Program thanotherwise would have been required ifthe participant contributions had beentransmitted in a timely manner.Accordingly, section I(a) (1) and (2) of

the final exemption has been modifiedto require that earnings on delinquentcontributions be calculated as of theearliest date on which the participantcontributions could have beenreasonably segregated from theemployer’s general assets as required bythe participant contribution regulation.3

Discussion of the Exemption

1. ScopeThe exemption provides conditional

relief from the restrictions of sections406(a)(1) (A) through (D), 406(b)(1) and406(b)(2) of ERISA and the sanctionsresulting from the application of section4975 (a) and (b) of the Code, by reasonof section 4975(c)(1) (A) through (E) ofthe Code, for transactions that resultfrom a person’s failure to transmitparticipant contributions to pensionplans within the time frames requiredby the participant contributionregulation, provided that suchdelinquent contributions are restored tothe plans together with lost earnings.

The Department notes that theexemption only provides relief for thosetransactions involving delinquentparticipant contributions and earningsthat are restored to pension plans nolater than September 7, 1996. Thepayments to the plan must relate toamounts paid by participants to, orwithheld by, an employer forcontribution to a plan no later thanApril 5, 1996.4

2. ConditionsThe exemption contains conditions,

as discussed below, which theDepartment views as necessary toensure that any transaction covered bythe exemption are in the interests ofplan participants and beneficiaries andto support a finding that the exemptionmeets the statutory standards of section408(a) of ERISA.

Under the exemption, all delinquentparticipant contributions must berestored to the pension plan plusearnings from the earliest date on whichsuch contributions could have beenreasonably segregated from theemployer’s general assets until suchmoney is restored to the plan. Theearnings are calculated at the greater of:(1) The amount that would have beenearned on the participant contributionsduring such period if applicable planprovisions had been followed, or (2) theamount that would have been earned onthe participant contributions during


5 The underpayment rate defined in section6621(a)(2) is based on the Federal short-term ratedetermined quarterly by the Secretary of theTreasury and is designed to reflect market rates ofinterest rather than serve as a penalty. Courts haveapplied rates determined under section 6621 inawarding prejudgment interest in cases under titleI of ERISA. Martin v. Harline, No. 87–NC–115J (D.Utah Mar. 31, 1992) 15 Emp. Ben. Cases (BNA)1138, 1153; Whitfield v. Cohen, 686 F. Supp. 188,193 (E.D.N.Y. 1988); Whitfield v. Tomasso, 682 F.Supp. 1287, 1306 (E.D.N.Y. 1988).

such period using an interest rate equalto the underpayment rate defined insection 6621(a)(2) of the Code duringsuch period.5 In the Department’s view,this condition requires that the earningsbe calculated on an account by accountbasis in order to mirror the earnings theparticipants would have otherwiseaccrued. As previously noted, thisrequirement would not preclude acalculation which used an earningsfactor equal to the highest rate of returngenerated by any of the investmentoptions offered under the plan duringthe applicable period for each of theaffected accounts.

Second, the exemption requires thatthe total of all outstanding delinquentparticipant contributions on March 7,1996, excluding earnings, does notexceed the aggregate amount ofparticipant contributions that werereceived or withheld by an employerfrom the employees’ wages for thecalendar year 1995. For thosedelinquent participant contributionsrestored to plans on or after November28, 1995, but before March 7, 1996, thetotal of all outstanding delinquentparticipant contributions, excludingearnings, on November 28, 1995 doesnot exceed the aggregate amount ofparticipant contributions that werereceived or withheld by an employerfrom the employees’ wages for thetwelve calendar months immediatelypreceding November 1995. Providedthat the preceding limitation is met, theexemption also would permit therestoration on or after November 28,1995 of any earnings that areattributable to participant contributionsthat have been restored to the plan priorto the effective date of the Program.

Third, the exemption requires that theperson meet the requirements set forthin paragraphs (2) through (6) of theProgram. Those requirements include,among other things, that: (1) the personnotify the Department in writing of itsintention to participate in the Programand provide written evidencedemonstrating that participantcontributions and earnings have beenrestored to the plan; (2) the personnotify affected participants (and send acopy to the Department) that priordelinquent contributions and lost

earnings have been restored to theiraccounts pursuant to participation inthe Program; (3) at the time ofnotification to the Department of theperson’s determination to participate inthe Program, neither the Department norany other Federal agency has informedsuch person of its intention toinvestigate or examine the plan orotherwise make inquiry with respect tothe status of participant contributionsunder the plan; and (4) the person mustcertify in writing, under oath, that it isin compliance with the requirements ofthe Program and, to its knowledge, notthe subject of any criminal investigationor prosecution involving any offenseagainst the United States; has not beenconvicted of any criminal offenseinvolving employee benefit plans or anyother offense involving financialmisconduct, nor entered into a consentdecree with the Department or havebeen found by a court of competentjurisdiction to have violated anyfiduciary responsibility provision ofERISA.

General InformationThe attention of interested persons is

directed to the following:(1) The fact that a transaction is the

subject of an exemption under section408(a) of ERISA and section 4975(c)(2)of the Code does not relieve a fiduciaryor other party in interest or disqualifiedperson with respect to a plan fromcertain other provisions of ERISA andthe Code to which the exemption doesnot expressly apply and the generalfiduciary responsibility provisions ofsection 404 of ERISA. Section 404requires, in part, that a fiduciarydischarge his or her duties respectingthe plan solely in the interests of theparticipants and beneficiaries of theplan and in a prudent fashion inaccordance with section 404(a)(1)(B) ofERISA. Nevertheless, the Departmentnotes that those persons who complywith the conditions of the PensionPayback Program will avoid potentialERISA civil actions initiated by theDepartment resulting from their failureto timely remit participant contributionsto pension plans.

(2) The exemption, does not extend totransactions prohibited under section406(b)(3) of ERISA or section4975(c)(1)(F) of the Code.

(3) In accordance with section 408(a)of ERISA and section 4975(c)(2) of theCode, and based upon the entire record,the Department finds that the exemptionis administratively feasible, in theinterests of plans and of participantsand beneficiaries and protective of therights of participants and beneficiariesof such plans.

(4) The exemption is supplemental to,and not in derogation of otherprovisions of ERISA and the Code,including statutory or administrativeexemptions and transitional rules.Furthermore, the fact that a transactionis subject to an administrative orstatutory exemption is not dispositive ofwhether the transaction is in fact aprohibited transaction.

(5) The class exemption is applicableto a transaction only if the conditionsspecified in the class exemption aresatisfied.

ExemptionAccordingly, the following exemption

is granted under the authority of section408(a) of ERISA and section 4975(c)(2)of the Code, and in accordance with theprocedures set forth in 29 CFR 2570,subpart B (55 FR 32836, August 10,1990).

I. The restrictions of sections 406(a)(1)(A) through (D), 406(b)(1) and 406(b)(2)of ERISA and the sanctions resultingfrom the application of section 4975 (a)and (b) of the Code, by reason of section4975(c)(1) (A) through (E) of the Code,shall not apply to transactions thatresult from a person’s failure to transmitparticipant contributions to a pensionplan within the time frames required bythe plan asset—participant contributionregulation (29 CFR 2510.3–102),provided that the following conditionsare met:

(a) All delinquent participantcontributions are restored to the pensionplan plus the greater of:

(1) The amount that otherwise wouldhave been earned on the participantcontributions from the earliest date onwhich such contributions could havebeen reasonably segregated from theemployer’s general assets (as requiredby the plan asset-participantcontribution regulation) until suchmoney is fully restored to the plan, hadsuch contributions been invested inaccordance with applicable planprovisions, or

(2) The amount the participant wouldhave earned on the participantcontributions during such period usingan interest rate equal to theunderpayment rate defined in section6621(a)(2) of the Code from the earliestdate on which such contributions couldhave been reasonably segregated fromthe employer’s general assets until suchmoney is fully restored to the plan.

(b) For amounts restored on or afterMarch 7, 1996, the total of alloutstanding delinquent participantcontributions on March 7, 1996,excluding earnings, does not exceed theaggregate amount of participantcontributions that were paid to, or


withheld by, the employer forcontribution to the plan for calendaryear 1995. For those delinquentparticipant contributions restored toplans on or after November 28, 1995,but prior to March 7, 1996, the total ofall outstanding participant contributionson November 28, 1995, excludingearnings, does not exceed the aggregateamount of participant contributions thatwere paid to, or withheld by, theemployer for contribution to the plan forthe prior twelve calendar monthsimmediately preceding November 1995.Provided that the preceding limitation ismet, the exemption shall apply withoutlimit to the restoration on or afterNovember 28, 1995 of any earnings thatare attributable to delinquentparticipant contributions that have beenrestored to the plan prior to the effectivedate of the Program.

(c) The conditions set forth inparagraphs (2) through (6) of theProgram are met.

II. Definitions.For purposes of this exemption:(a) The term ‘‘plan’’ means an

employee pension benefit plandescribed in section 3(2) of ERISA.

(b) The term ‘‘person’’ means a personas that term is defined in section 3(9) ofERISA.

(c) The term ‘‘Program’’ means thePension Payback Program published bythe Department on March 7, 1996 (46 FR9203).

III. Effective Date: The exemptionprovides retroactive and prospectiverelief for those transactions involvingparticipant contributions and earningsthat are restored to pension plans on orafter November 28, 1995 but no laterthan September 7, 1996. Suchrestorative payments must relate toamounts paid to, or withheld by, anemployer for contribution to a plan nolater than April 6, 1996.

Signed at Washington, D.C. this 30th dayof July, 1996.Olena Berg,Assistant Secretary, Pension and WelfareBenefits Administration, Department ofLabor.[FR Doc. 96–19718 Filed 8–1–96; 8:45 am]BILLING CODE 4510–29–M

DEPARTMENT OF LABOR

Pension and Welfare BenefitsAdministration

Pension Payback Program (Amended)

AGENCY: Pension and Welfare BenefitsAdministration, Department of Labor.ACTION: Notice of adoption of amendedvoluntary compliance program for

restoration of delinquent participantcontributions.

SUMMARY: This document announcescertain amendments to a voluntarycompliance program adopted by theDepartment on March 7, 1996. Theprogram allows certain persons to avoidpotential Employee Retirement IncomeSecurity Act (ERISA) civil actionsinitiated by the Department of Labor,the assessment of civil penalties undersection 502(1) of ERISA and Federalcriminal prosecutions arising from theirfailure to timely remit participantcontributions and the failure to disclosesuch non-remittance. The program alsoincludes relief from certain prohibitedtransaction liability. The amendmentsallow additional persons to takeadvantage of the program and clarifycertain requirements. Theseamendments primarily conform theterms of the program to a prohibitedtransaction class exemption that theDepartment is also publishing today.DATES: As amended by this notice, theprogram applies to certain delinquentcontributions, and lost earnings ondelinquent participant contributions,that are restored to pension plans on orafter November 28, 1995, but no laterthan September 7, 1996. Restorativepayments must relate to amounts paidby participants or withheld by anemployer from participants’ wages forcontribution to a pension plan on orbefore April 6, 1996. Writtennotification of intention to participate inthe program must be received by theDepartment no later than September 7,1996.ADDRESSES: Notification of intention toparticipate in the program must be sentin writing to: Pension Payback Program,Pension and Welfare BenefitsAdministration, U.S. Department ofLabor, P.O. Box 77235, Washington, DC20013–7235.FOR FURTHER INFORMATION CONTACT:Jeffrey Monhart, Pension Investigator,Office of Enforcement, Pension andWelfare Benefits Administration, U.S.Department of Labor, Washington, DC(202) 219–4377. (This is not a toll-freenumber).SUPPLEMENTARY INFORMATION: On March7, 1996, the Department published inthe Federal Register a notice ofadoption of a voluntary complianceprogram for restoration of delinquentparticipant contributions. 61 FR 9203.The program, which is referred to as thePension Payback Program, is designedto encourage employers to restoredelinquent participant contributions toemployee pension benefit plans asdefined in section 3(2) of ERISA. Under

the program, employers who are eligibleto participate and who comply with itsconditions, may avoid potential civilactions under ERISA brought by theDepartment, and Federal criminalprosecutions arising from their failure totimely remit participant contributionsand from the failure to disclose suchnon-remittance.

As a part of the program, theDepartment also published in theFederal Register on March 7, aproposed class exemption from theprohibited transaction provisions ofERISA. 61 FR 9199. In the notice ofadoption, the Department stated thatemployers who participate in theprogram could rely on the proposedexemption notwithstanding anysubsequent modifications made inissuing the final exemption. Pendingpromulgation by the Department of thefinal class exemption, the Departmentstated that it would not pursueenforcement against employers whocomply with the conditions of theprogram and the proposed classexemption with respect to anyprohibited transaction liability whichmay have arisen as a result of a delayin forwarding participant contributions.Similarly, the Internal Revenue Serviceadvised the Department that it wouldnot seek to impose the sanctions undersections 4975 (a) and (b) of the InternalRevenue Code with respect to anyprohibited transaction that meets therequirements of the proposed classexemption.

Today, the Department is publishingin the Federal Register the final classexemption setting forth the conditionsfor retroactive relief from ERISA’sprohibited transaction provisions foreligible persons who comply with theconditions of the program. As a result ofcomments responding to the proposedexemption, the final exemption containschanges that, among other things,increase the number of persons whomay take advantage of the program. Adescription of the changes and adiscussion of the reasons for themappear in the supplementaryinformation to the final class exemptionpublished today.

This document amends andsupersedes the notice of adoption of theprogram issued on March 7, 1996, sothat the terms of the program as a wholewill remain consistent with the terms ofthe final class exemption. The principalamendment is that the program nowapplies to persons who restore or haverestored delinquent participantcontributions and earnings at any timeon or after November 28, 1995, untilSeptember 7, 1996. The restoredamounts must still relate to delinquent


participant contributions that werereceived or withheld by the employerno later than April 6, 1996.

As a result of this change, it isnecessary to amend the condition in theprogram that the maximum amount ofoutstanding delinquent participantcontributions on March 7, 1996,excluding earnings, must not exceed theaggregate amount of participantcontributions that were received orwithheld for the 1995 calendar year.This condition remains unchanged forrestorations that occur on or after March7, 1996. Under the amended program,for restorations that occurred on or afterNovember 28, 1995 and prior to March7, 1995, the total outstanding delinquentparticipant contributions on November28, 1995, excluding earnings, must nothave exceeded the aggregate participantcontributions received or withheld fromthe employees’ wages for the twelvecalendar months immediately precedingNovember 1995.

This document reflects an amendmentof the program provisions forcalculation of the earnings or interestthat must be restored in addition todelinquent participant contributions.Under the amendment, the earnings orinterest must be calculated from theearliest date on which suchcontributions reasonably could havebeen segregated from the employer’sgeneral assets. Under the program asoriginally announced, earnings orinterest were required to be calculatedfrom the date on which the participantcontribution was received or withheldby the employer.

This document also contains anumber of minor amendments intendedto eliminate certain repetitiveprovisions of the program when it wasoriginally issued and clarify thelanguage and structure of its provisions.The amendments contained in thisdocument are effective as of March 7,1996, the date on which the Departmentfirst published the Program in theFederal Register.

Except as provided in the classexemption, the Program does not affordrelief from civil actions that may befiled by persons other than theDepartments of Labor and Justice, andthe Internal Revenue Service. Personswho have complied with theexemption’s conditions will not besubject to the restrictions of sections406(a)(1) (A) through (D), 406(b)(1) and406(b)(2) of ERISA and the sanctionsresulting from the application of section4975 (a) and (b) of the Code, by reasonof section 4975(c)(1) (A) through (E) ofthe Code, for transactions that resultfrom such persons’s failure to transmitparticipant contributions to pension

plans in accordance with the timeframes described in the participantcontribution regulation at 29 CFR2510.3–102. The Program does notapply to criminal prosecutions broughtby State government, although theDepartment has determined not toaffirmatively refer information to theStates for criminal prosecutionconcerning persons who voluntarilyrestore participant contributions inaccordance with the terms of theprogram.

Notice of Adoption of AmendedVoluntary Compliance Program forRestoration of Delinquent ParticipantContribution

Amended Pension Payback ProgramThe Department of Labor (the

Department) today announced adoptionof the Amended Pension PaybackProgram (the Program) which isdesigned to benefit workers byencouraging employers to restoredelinquent participant contributionsplus lost earnings to pension plans. TheProgram, which supersedes a programannounced on March 7, 1996 (61 FR9199), is targeted at ‘‘persons’’, as thatterm is defined at section 3(9) of theEmployee Retirement Income SecurityAct (ERISA), who failed to transferparticipant contributions to pensionplans defined under section 3(2) ofERISA including section 401(k) plans,in accordance with the time framesdescribed by the Department’sregulations, and thus Violated Title I ofERISA.

The Program is available to certainpersons who voluntarily restore, or haverestored, delinquent participantcontributions to pension plans inaccordance with the terms of theProgram. Those who comply with theterms of the Program will avoidpotential ERISA civil actions initiatedby the Department, the assessment ofcivil penalties under section 502(1) ofERISA and Federal criminalprosecutions arising from their failure totimely remit such contributions andnon-disclosure of the non-remittance.The Department of Justice has indicatedits support for the Program. TheDepartment of Labor will not pursueenforcement against persons whocomply with the conditions of theProgram with respect to any prohibitedtransaction liability which may havearisen as a result of the person’s delayin forwarding the participantcontributions and who comply with theclass exemption setting forth theconditions for retroactive exemptiverelief published by the Departmenttoday in the Federal Register. The

Department has further determined notto affirmatively refer information to thestates for criminal prosecutionconcerning those persons whovoluntarily restore participantcontributions in accordance with theProgram. The Department has alsogranted a class exemption (publishedtoday in the Federal Register) undersection 408(a) of ERISA with respect toprohibited transactions which may havearisen as a result of a delay in remittingparticipant contributions.

The Program only applies to certaindelinquent participant contributionsplus earnings that are restored topension plans on or after November 28,1995, but no later than September 7,1996. Such restorative payments mustrelate to amounts paid by participants orwithheld by an employer fromparticipants’ wages for contribution to aplan on or before April 6, 1996. TheProgram also applies to the restoration,on or after November 28, 1995, but nolater than September 7, 1996, of anyearnings attributable to delinquentparticipant contributions that wererestored to the plan prior to November28, 1995, without limit as to the amountof such earnings.

The Program is available only if thefollowing conditions are met:

(1) All delinquent participantcontributions, are restored to theemployee benefit plan plus the greaterof (a) or (b) below.

(a) The amount that otherwise wouldhave been earned on the participantcontributions from the earliest date onwhich such contributions reasonablycould have been segregated from theemployer’s general assets by theemployer until the date such money isfully restored to the plan had suchcontributions been invested during suchperiod in accordance with applicableplan provisions, or

(b) Interest at a rate equal to theunderpayment rate defined in section6621(a)(2) of the Internal Revenue Codefrom the earliest date on which suchcontributions reasonably could havebeen segregated from the employer’sgeneral assets by the employer until thedate such money is fully restored to theplan,

In determining the amount describedin (a) above for a participant directeddefined contribution plan, the personseeking relief under the Program mayapply the highest rate of return earnedby any of the investment alternativesavailable under the plan during theapplicable period.

(2) The total outstanding delinquentcontributions do not exceed thefollowing limits:


*For purposes of this paragraph, an ‘‘offense’’includes criminal activity for which the Departmentof Justice may seek civil injunctive relief under theRacketeer Influenced and Corrupt Organizationsstatute (18 U.S.C. § 1964(b)). A ‘‘subject’’ is anyindividual or entity whose conduct is within thescope of any ongoing inquiry being conducted bya federal investigator(s) who is authorized toinvestigate criminal offenses against the UnitedStates.

(a) For amounts restored on or afterMarch 7, 1996, the delinquentcontributions outstanding on March 7,1996, excluding earnings, may notexceed the aggregate amount ofparticipant contributions that werereceived or withheld from theemployees’ wages for calendar year1995.

(b) For amounts restored on or afterNovember 28, 1995, but before March 7,1996, the total of all outstandingdelinquent participant contributions,excluding earnings, on November 28,1995, cannot exceed the aggregateamount of participant contributions thatwere received or withheld from theemployees’ wages for the twelvecalendar months immediately precedingNovember 1995.

(3) The Department is notified inwriting no later than September 7, 1996of the person’s decision to participate inthe Program and provided with: (a)Copies of cancelled checks or otherwritten evidence demonstrating that allparticipant contributions and earningshave been restored to the employeebenefit plan; (b) the certificationdescribed in paragraph (7) below; and(c) evidence of such bond as may berequired under section 412 of ERISA.

(4) The person informs the affectedparticipants within 90 days followingthe notification of the Departmentdescribed in paragraph (3) above, thatprior delinquent contributions and lostearnings have been restored to theiraccounts pursuant to the person’sparticipation in the Program and,thereafter, provides a copy of suchnotification to the Department. If astatement of account or other scheduledcommunication between the plan or itssponsor and the participants isscheduled to occur within this timeperiod, such statement may include thenotification required by this paragraph.

(5) The person has complied with allconditions set forth in the classexemption issued by the Departmenttoday.

(6) At the time that the Department isnotified of the person’s determination toparticipate in the Program, neither theDepartment nor any other Federalagency has informed such person of anintention to investigate or examine theplan or otherwise made inquiry withrespect to the status of participantcontributions under the plan.

(7) Each person who applies for reliefunder the program shall certify inwriting, under oath and pain of perjury,that it is in compliance with all termsand conditions of the Program and, toits knowledge, neither it nor any personacting under its supervision or control

with respect to the operation of anERISA covered employee benefit plan:

(a) Is the subject of any criminalinvestigation or prosecution involvingany offense against the United States;*

(b) Has been convicted of a criminaloffense involving employee benefitplans at any time or any other offenseinvolving financial misconduct whichwas punishable by imprisonmentexceeding one year for which sentencewas imposed during the precedingthirteen years or which resulted inactual imprisonment ending within thelast thirteen years, nor has such personentered into a consent decree with theDepartment or been found by a court ofcompetent jurisdiction to have violatedany fiduciary responsibility provisionsof ERISA during such period; or

(c) Has sought to assist or conceal thenon-remittance of participantcontributions by means of bribery, graftpayments to persons with responsibilityfor ensuring remittance of plancontributions or with the knowingassistance of persons engaged inongoing criminal activity.

Signed at Washington, DC this 30th day ofJuly, 1996.Olena Berg,Assistant Secretary, Pension and WelfareBenefits Administration, Department ofLabor.[FR Doc. 96–19717 Filed 8–1–96; 8:45 am]BILLING CODE 4510–29–M

LIBRARY OF CONGRESS

Copyright Office

[Docket No. 96–5 CARP DSTRA]

Digital Performance Right in SoundRecordings

AGENCY: Copyright Office, Library ofCongress.ACTION: Precontroversy discoveryschedule and request for notices ofintent to participate.

SUMMARY: The Copyright Office of theLibrary of Congress is announcing theprecontroversy discovery schedule,including the date of initiation ofarbitration, for the Copyright ArbitrationRoyalty Panel (CARP) proceeding to setthe rates and terms for the 17 U.S.C. 114

compulsory license for nonexemptdigital subscription transmissions. TheOffice is also requesting interestedparties to file comments on the ratepetition by August 30, 1996. Parties whowish to participate in the CARPproceeding must file their Notices ofIntent to Participate by August 30, 1996.DATES: Comments on the rate petition,and Notices of Intent to Participate aredue on or before August 30, 1996.ADDRESSES: If sent by mail, an originaland five copies of the comments, and anoriginal and five copies of the Notice ofIntent to Participate should beaddressed to: Copyright ArbitrationRoyalty Panel (CARP), P.O. Box 70977,Southwest Station, Washington, D.C.20024. If hand delivered, an originaland five copies of the comments, and anoriginal and five copies of the Notice ofIntent to Participate should be broughtto: Office of the Copyright GeneralCounsel, James Madison MemorialBuilding, Room LM–407, First andIndependence Avenue, S.E.,Washington D.C. 20540.FOR FURTHER INFORMATION CONTACT:William Roberts, Senior Attorney, orTanya Sandros, CARP Specialist,Copyright Arbitration Royalty Panel(CARP), P.O. Box 70977, SouthwestStation, Washington, DC 20024.Telephone (202) 707–8380. Telefax:(202) 707–8366.SUPPLEMENTARY INFORMATION: OnNovember 1, 1995, the President signedinto law the ‘‘Digital Performance Rightin Sound Recordings Act of 1995’’(‘‘Digital Performance Act’’). Pubic LawNo. 104–39. The Digital PerformanceAct creates an exclusive right forcopyright owners of sound recordings,subject to certain limitations, to performpublicly the sound recordings by meansof certain digital audio transmissions.See 17 U.S.C. 106(6).

Among the limitations on theperformance of a sound recordingpublicly by means of a digital audiotransmission is the creation of a newcompulsory license for nonexemptsubscription transmissions. The DigitalPerformance Act defines a ‘‘subscriptiontransmission’’ as one that ‘‘is atransmission that is controlled andlimited to particular recipients, and forwhich consideration is required to bepaid or otherwise given by or on behalfof the recipient to receive thetransmission or a package oftransmissions including thetransmission.’’ 17 U.S.C. 114(j)(8). Allnonexempt subscription transmissionsare eligible for section 114 compulsorylicensing provided they are not made byan ‘‘interactive service,’’ which isdefined in part as ‘‘one that enables a


member of the public to receive, onrequest, a transmission of a particularsound recording chosen by or on behalfof the recipient.’’ See 17 U.S.C. 114(j)(4).

The terms and rates of the section 114statutory license are determined byvoluntary negotiation among theaffected parties and, where necessary,compulsory arbitration conducted underchapter 8 of the Copyright Act. OnDecember 1, 1995, the Copyright Officepublished a notice in the FederalRegister initiating the voluntarynegotiation period from December 1,1995, to June 1, 1996. 60 FR 61655(December 1, 1995). The Officeencouraged parties that negotiatedvoluntary license agreements to submittwo copies of the agreement to theOffice within 30 days of its execution.No agreements were filed during thisperiod.

Because an industry-wide agreementhas not been reached, copyright ownersand entities performing soundrecordings not subject to a voluntaryagreement shall be bound by the termsand rates set by a CARP. The Officedirected parties not subject to avoluntary agreement to file theirpetitions for a CARP proceeding byAugust 1, 1996. See 60 FR 61656 (1995).On June 4, 1996, the Office received apetition from the Recording IndustryAssociation of America (‘‘RIAA’’)requesting the ‘‘Librarian of Congress tocommence proceedings to determine aschedule of terms and rates for astatutory license for the publicperformance of sound recordings viathose audio digital subscriptiontransmission services currently inoperation.’’

Pursuant to the RIAA’s petition andthe rules and regulations of 37 CFR part251, the Librarian of Congress, upon therecommendation of the Register ofCopyrights, is announcing theprecontroversy discovery schedule forthe proceeding to set terms and rates forthe section 114 license, including thedate on which the proceeding before theCARP will be initiated.

Notices of Intent To ParticipateAny party wishing to appear before

the CARP, and to present evidence, inthis proceeding must file a Notice ofIntent to Participate by August 30, 1996.Failure to file a timely Notice of Intentto Participate will preclude a party fromparticipating in this proceeding.

Comments on RIAA PetitionSection 251.45(a) of the rules states

that ‘‘the Librarian of Congress shall,after receiving a petition for rateadjustment filed under 251.62, * * *publish in the Federal Register a notice

requesting interested parties tocomment on the petition for rateadjustment.’’ 37 CFR 241.45(a). Anyparty wishing to comment on theRIAA’s petition should do so by August30, 1996.

Precontroversy Discovery ScheduleThe Library of Congress is

announcing the scheduling of theprecontroversy discovery period, andother procedural matters, for theestablishment of rates and terms for thesection 114 compulsory license. Inaddition, the Library is announcing thedate on which arbitration proceedingswill be initiated before a CARP, therebycommencing the 180-day arbitrationperiod. Once a CARP has beenconvened, the scheduling of thearbitration period is within thediscretion of the CARP and will beannounced at that time.

A. Commencement of the ProceedingA rate adjustment proceeding under

part 251 of 37 CFR is divided into twoessential phases. The first is the 45-dayprecontroversy discovery phase, duringwhich the parties exchange their writtendirect cases, exchange theirdocumentation and evidence in supportof their written direct cases, and engagein the pre-CARP motions practicedescribed in § 251.45. The other phaseis the proceeding before the CARP itself,including the presentation of evidenceand the submission of proposedfindings by all of the participatingparties. The proceeding before the CARPmay be in the form of hearings or, inaccordance with the requirements of§ 251.41(b) of the rules, the proceedingmay be conducted solely on the basis ofwritten pleadings.

Both of these phases to a rateadjustment proceeding requiresignificant amounts of work, not just forthe parties, but for the Librarian, theCopyright Office, and the arbitrators aswell. The rate setting proceeding forsection 114 is not the only CARPproceeding likely to take place this year.The Library of Congress is currentlyconducting a royalty distributionproceeding under chapter 10 of theCopyright Act, a cable rate adjustmentproceeding, a satellite carrier rateadjustment proceeding, and mustschedule a cable royalty distributionproceeding, and a satellite carrierroyalty distribution proceeding allwithin this calendar year. It would beextremely difficult for the Office toconduct the precontroversy discoveryphase of more than one of theseproceedings at the same time, and theLibrary must, therefore, conduct themsequentially.

Because of the number of CARPproceedings to be conducted this year,and the attending workload, selection ofa date to initiate a section 114 ratesetting proceeding is not dependent onthe schedules of one or more of theparticipating parties, but must beweighed against the interests of allinvolved. The RIAA filed their petitionin early June 1996, and it is likely thatthis arbitration proceeding will onlyinvolve three other parties who arealready aware of the RIAA’s petition.The Library therefore believes that acommencement of the precontroversydiscovery period in the early fall wouldnot come as a surprise to the affectedparties or create an undue burden.Aware of the other proceedings whichmust be scheduled, the attendingworkload, and the need to manage theinterests of all involved, the Library isannouncing the precontroversydiscovery schedule and arbitrationperiod in this proceeding withoutseeking further comment from theparticipating parties.

B. Precontroversy Discovery Scheduleand Procedures

Any party that has filed a Notice ofIntent to Participate in the section 114rate setting proceeding is entitled toparticipate in the precontroversydiscovery period. Each party mayrequest of an opposing partynonprivileged documents underlyingfacts asserted in the opposing party’swritten direct case. The precontroversydiscovery period is limited to discoveryof documents related to written directcases and any amendments made duringthe period.

The rules of the Library of Congressdo not specify any particular steps orregimen to the precontroversy discoveryperiod. We believe, however, that it isnecessary to establish procedural datesfor exchange of documents and filing ofmotions within the 45-day period toprovide order and allow discovery toproceed smoothly and efficiently. Theprecontroversy discovery schedule setforth by the Library in the recent cabledistribution proceeding, see 54 FR14971, 14975–76 (March 21, 1995),proved to be successful in promoting anorderly and efficient discovery period,and we have chosen to adopt the sameformat and structure for theprecontroversy discovery period in thisproceeding.

The following is the precontroversydiscovery procedural schedule withcorresponding deadlines:


Action Deadline

Filing of Written DirectCases.

September 9,1996.

Requests for UnderlyingDocuments Related toWritten Direct Cases.

September 18,1996.

Responses to Requestsfor Underlying Docu-ments.

September 25,1996.

Completion of DocumentProduction.

September 30,1996.

Follow-up Requests forUnderlying Documents.

October 7, 1996.

Responses to Follow-upRequests.

October 11, 1996.

Motions Related to Doc-ument Production.

October 15, 1996.

Production of Documentsin Response to Follow-up Requests.

October 18, 1996.

All Other Motions, Peti-tions, and Objections.

October 23, 1996.

The precontroversy discovery period,as specified by § 251.45(b) of the rules,begins on September 9, 1996, with thefiling of written direct cases by eachparty. Each party in this proceedingwho has filed a Notice of Intent toParticipate must file a written directcase on the date prescribed above.Failure to submit a timely filed writtendirect case will result in dismissal ofthat party’s case. Parties must complywith the form and content of writtendirect cases as prescribed in § 251.43.Each party to the proceeding mustdeliver a complete copy of its writtendirect case to each of the other partiesto the proceeding, as well as file acomplete copy with the CopyrightOffice by close of business onSeptember 9, 1996, the first day of the45-day period.

After the filing of the written directcases, document production willproceed according to the above-described schedule. Each party mayrequest underlying documents related toeach of the other parties’ written directcases by September 18, 1996, andresponses to those requests are due bySeptember 25, 1996. Documents whichare produced as a result of the requestsmust be exchanged by September 30,1996. It is important to note that allinitial document requests must be madeby the September 18, 1996, deadline.Thus, for example, if one party assertsfacts that expressly rely on the results ofa particular study that was not includedin the written direct case, another partydesiring production of that study mustmake its request by September 18;otherwise, the party is not entitled toproduction of the study.

The precontroversy discoveryschedule also establishes deadlines forfollow-up discovery requests. Follow-up

requests are due by October 7, 1996, andresponses to those requests are due byOctober 11, 1996. Any documentationproduced as a result of a follow-uprequest must be exchanged by October18, 1996. An example of a follow-uprequest would be as follows. In theabove example, one party expresslyrelies on the results of a particular studywhich is not included in its writtendirect case. As noted above, a partydesiring production of that study orsurvey must make its request bySeptember 18, 1996. If, after receiving acopy of the study, the reviewing partydetermines that the study heavily relieson the results of a statistical survey, itwould be appropriate for that party tomake a follow-up request for productionof the statistical survey by the October7, 1996 deadline. Again, failure to makea timely follow-up request would waivethat party’s right to request productionof the survey.

In addition to the deadlines fordocument requests and production,there are two deadlines for the filing ofprecontroversy motions. Motions relatedto document production must be filedby October 15, 1996. Typically, thesemotions are motions to compelproduction of requested documents forfailure to produce them, but they mayalso be motions for protective orders.Finally, all other motions, petitions andobjections must be filed by October 23,1996, the final day of the 45-dayprecontroversy discovery period. Thesemotions, petitions, and objectionsinclude, but are not limited to,objections to arbitrators appearing onthe arbitrator list under § 251.4, andpetitions to dispense with formalhearings under § 251.41(b).

Due to the time limitations betweenthe procedural steps of theprecontroversy discovery schedule, weare requiring that all discovery requestsand responses to such requests beserved by hand or fax on the party towhom such response or request isdirected. Filing of requests andresponses with the Copyright Office isnot required.

Filing and service of allprecontroversy motions, petitions,objections, oppositions and replies shallbe as follows. In order to be consideredproperly filed with the Librarian and/orCopyright Office, all pleadings must bebrought to the Copyright Office at thefollowing address no later than 5 p.m.of the filing deadline date: Office of theRegister of Copyrights, Room LM–403,James Madison Memorial Building, 101Independence Avenue, S.E.,Washington, D.C. 20540. The form andcontent of all motions, petitions,objections, oppositions and replies filed

with the Office must be in compliancewith § 251.44 (b)–(e). As provided in§ 251.45(b), oppositions to any motionsor petitions must be filed with theOffice no later than seven business daysfrom the date of filing of such motionor petition. Replies are due five businessdays from the date of filing of suchoppositions. Service of all motions,petitions, objections, oppositions andreplies must be made on counsel or theparties by means no slower thanovernight express mail on the same daythe pleading is filed.

C. Initiation of ArbitrationBecause there are two phases to a rate

adjustment proceeding—precontroversydiscovery and arbitration—there are twotime periods to be scheduled. Theregulations do not provide how muchtime must separate precontroversydiscovery from initiation of arbitration.There is no reason to schedule aninordinate amount of time between thetwo; however, there must be adequatetime for the Librarian to rule upon allmotions filed within the 45-dayprecontroversy period. In order to givethe parties as much of the month ofDecember as possible for proceedingsbefore the CARP, the Library willinitiate arbitration on December 2, 1996.The schedule of the arbitrationproceeding will be established by theCARP after the three arbitrators havebeen selected. Delivery of the writtenreport of the arbitrators to the Librarian,in accordance with 17 U.S.C. 802(e),must be no later than May 30, 1997.

Dated: July 29, 1996.Marilyn J. Kretsinger,Acting General Counsel.

Approved:James H. Billington,The Librarian of Congress.[FR Doc. 96–19666 Filed 8–1–96; 8:45 am]BILLING CODE 1410–33–P

NATIONAL ARCHIVES AND RECORDSADMINISTRATION

Agency Information CollectionActivities: Proposed Collection;Comment Request

AGENCY: National Archives and RecordsAdministration (NARA).ACTION: Notice.

SUMMARY: NARA is giving public noticethat the agency proposes to renew theinformation collections described in thisnotice, which are used in the NationalHistorical Publications and RecordsCommission grant program. The publicis invited to comment on the proposed


information collection pursuant to thePaperwork Reduction Act of 1995.DATES: Written comments must bereceived on or before October 7, 1996 tobe assured of consideration.ADDRESSES: Comments should be sentto: Paperwork Reduction Act Comments(PIRM–POL), Room 4100, NationalArchives and Records Administration,8601 Adelphi Rd, College Park, MD20740–6001; or faxed to 301–713–7270;or electronically mailed [email protected] FURTHER INFORMATION CONTACT:Requests for additional information orcopies of the proposed informationcollections and supporting statementsshould be directed to Nancy Allard attelephone number 301–713–6730, ext.226, or fax number 301–713–7270.SUPPLEMENTARY INFORMATION: Pursuantto the Paperwork Reduction Act of 1995(Public Law 104–13), NARA invites thegeneral public and other Federalagencies to comment on proposedinformation collections. The commentsand suggestions should address one ormore of the following points: (a)Whether the proposed collectioninformation is necessary for the properperformance of the functions of NARA;(b) the accuracy of NARA’s estimate ofthe burden of the proposed informationcollections; (c) ways to enhance thequality, utility, and clarity of theinformation to be collected; and (d)ways to minimize the burden of thecollection of information onrespondents, including the use ofinformation technology. The commentsthat are submitted will be summarizedand included in the NARA request forOffice of Management and Budget(OMB) approval. All comments willbecome a matter of public record. In thisnotice, NARA is soliciting commentsconcerning the following informationcollections:

1. Title: Application for attendance atthe Institute for the Editing of HistoricalDocuments.

OMB number: 3095–0012, expirationdate 10/31/96.

Agency form number: None.Type of review: Regular.Affected public: Individuals, often

already working on documentaryediting projects, who wish to apply toattend the annual one-week Institute forthe Editing of Historical Documents, anintensive seminar in all aspects ofmodern documentary editing techniquestaught by visiting editors andspecialists.

Estimated number of respondents: 25.Estimated time per response: 2 hours.Frequency of response: On occasion,

no more than annually (when

respondent wishes to apply forattendance at the Institute).

Estimated total annual burden hours:50.

Abstract: The application is used bythe NHPRC staff to establish theapplicants’ qualifications and to permitselection of those individuals bestqualified to attend the Institute jointlysponsored by the NHPRC, the StateHistorical Society of Wisconsin, and theUniversity of Wisconsin. Selectedapplicants’ forms are forwarded to theresident advisors of the Institute, whouse them to determine what areas ofinstruction would be most useful to theapplicants.

2. Title: National HistoricalPublications and Records CommissionGrant Program.

OMB number: 3095–0013, expirationdate 10/31/96.

Agency form number: None.Type of review: Regular.Affected public: Nonprofit

organizations and institutions, state andlocal government agencies, Federallyacknowledged or state-recognizedNative American tribes or groups, andindividuals who apply for NHPRCgrants for support of historicaldocumentary editions, archivalpreservation and planning projects, andother records projects.

Estimated number of respondents:174 per year submit applications;approximately 100 grantees among theapplicant respondents also submitsemiannual narrative performancereports.

Estimated time per response: 54 hoursper application; 2 hours per narrativereport.

Frequency of response: On occasionfor the application; semiannually for thenarrative report. Currently, the NHPRCconsiders grant applications 3 times peryear; respondents usually submit nomore than one application per year.

Estimated total annual burden hours:9,796 hours.

Abstract: The application is used bythe NHPRC staff, reviewers, and theCommission to determine if theapplicant and proposed project areeligible for an NHPRC grant, andwhether the proposed project ismethodologically sound and suitable forsupport. The narrative report is used bythe NHPRC staff to monitor theperformance of grants.

3. Title: Applications for ArchivalAdministration and HistoricalDocumentary Editing Fellowships.

OMB number: 3095–0011 and 3095–0014, expiration date 10/31/96. Theapplications are being combined in thisrequest for OMB approval under thecontrol number 3095–0014.

Agency form number: None.Type of review: Regular.Affected public: Individuals who wish

to apply for an NHPRC fellowship inarchival administration or historicaldocumentary editing. Applicants for thearchival administration fellowship musthave at least two years’ professionalarchival work experience; applicants forthe editing fellowship must hold anPh.D. or have completed allrequirements for the degree except thedissertation.

Estimated number of respondents: 15.Estimated time per response: 8 hours.Frequency of response: Generally one-

time.Estimated total annual burden hours:

120 hours.Abstract: The application is used by

the NHPRC staff to establish theapplicants’ qualifications and to permitselection by the host institution of thoseindividuals best qualified for thefellowships. One fellowship in archivaladministration and one fellowship inhistorical editing are awarded each year.

4. Title: Application for hostinstitutions of archival administrationand historical editing fellowships.

OMB number: 3095–0015, expirationdate 10/31/96. The current approvalcovers only applications for hostinstitution of the archivaladministration fellowship. Theapplication for host institution of thehistorical documentary editingfellowship is a new informationcollection.

Agency form number: None.Type of review: Regular.Affected public: Nonprofit institutions

or organizations that have activearchival or special collections programs,and historical documentary publicationprojects that have received an NHPRCgrant.

Estimated number of respondents: 9.Estimated time per response: 17

hours.Frequency of response: Generally,

one-time although an institution mayapply in subsequent years.

Estimated total annual burden hours:153 hours.

Abstract: The application is used bythe NHPRC staff to select applicants toserve as host institutions for the twofellowships supported by the NHPRCeach year.

Dated: July 29, 1996.L. Reynolds Cahoon,Assistant Archivist for Policy and IRMServices.[FR Doc. 96–19620 Filed 8–1–96; 8:45 am]BILLING CODE 7515–01–P


NATIONAL SCIENCE FOUNDATION

Privacy Act of 1974: Changes to NSFSystems of Records

SUMMARY: Pursuant to the Privacy Act of1974 (5 U.S.C. 552a), the NationalScience Foundation (NSF) is providingnotice of changes to its Privacy ActSystems of Records. Eight (8) systemnotices are being deleted. The recordsdescribed there are adequately coveredby existing government-wide systems.Five (5) NSF system notices are beingdeleted because the records therein arecovered by other, more comprehensiveNSF system notices. Eleven (11) NSFsystem notices are being deletedbecause the records described thereinare no longer maintained by NSF.

1. NSF Privacy Act Systems ofRecords Covered by Government-WideSystems. The following eight (8) NSFSystem notices are being deleted. Therecords described therein are adequatelycovered by existing government-widesystems.NSF–1, ‘‘Employment Inquiries and

Background Information.’’NSF–4, ‘‘Confidential Statement of

Employment and Financial Interests.’’NSF–11, ‘‘Equal Employment Opportunity.’’NSF–15, ‘‘Health Service Medical Records.’’NSF–17, ‘‘Intergovernmental Personnel Act

Assignment Agreements.’’NSF–20, ‘‘Minority Applicants for

Employment.’’NSF–25, ‘‘Official Personnel Folders.’’NSF–32, ‘‘Separated Employee Service

Record (SF–7).’’NSF will rely on the following government-

wide systems notices for Privacy Actrequirements regarding these records.

OPM/GOVT–1, ‘‘General Personnel Records.’’OPM/GOVT–5, ‘‘Recruiting, Examining and

Placement Records.’’OPM/GOVT–7, ‘‘Applicant Race, Sex,

National Origin, and Disability Records.OPM/GOVT–10, ‘‘Employee Medical File

System of Records.’’OGE/GOVT–1, ‘‘Executive Branch Public

Financial Disclosure Reports and OtherEthics Program Records.’’.

OGE/GOVT–2, ‘‘Confidential Statements ofEmployment and Financial Interests.’’

EEOC/GOVT–1, ‘‘Equal EmploymentOpportunity in the Federal GovernmentComplaint and Appeal Records.’’2. NSF Privacy Act Systems of

Records Covered by Other MoreComprehensive NSF Systems. Thefollowing five (5) NSF system noticesare being deleted because the recordstherein are covered by other, morecomprehensive NSF system notices.NSF–14, ‘‘Grants to Individuals.’’NSF–21, ‘‘Nominees for National Medal of

Science, Waterman Award, Vannevar BushAward, and NSB.’’

NSF–37, ‘‘U.S. Antarctic Research ProgramField Participants.’’

NSF–39, ‘‘Reviewer/Panelist InformationSubsystem.’’

NSF–42, ‘‘Waterman Award NominationFile.’’

The records in these systems arecovered by the following morecomprehensive NSF Systems:NSF–12, ‘‘Fellowships and Other Awards,’’NSF–36, ‘‘Personnel Tracking System

(Antarctic).’’NSF–51, ‘‘Reviewer/Proposal File and

Associated Records.’’

3. NSF Privacy Act Systems ofRecords No Longer Being Maintained.The following eleven (11) NSF systemnotices are being deleted since therecords are no longer maintained byNSF.NSF–2, ‘‘Applicants to Committee on the

Challenges of Modern Society.’’ FellowshipProgram.’’

NSF–5, ‘‘Congressional Contact File.’’NSF–27, ‘‘Presidential Internships in Science

and Engineering.’’NSF–31, ‘‘Science Education Applicant

Information Subsystem.’’NSF–33, ‘‘Student Science Training Program

Participant Information.’’NSF–35, ‘‘Travelers Vouchers Folders (SF

1012).’’NSF–40, ‘‘NSF Innovation Guide Mailing

List.’’NSF–44, ‘‘Visiting Women Scientists Roster.’’NSF–45, ‘‘Study to Evaluate Scientific

Information Services.’’NSF–46, ‘‘Sample of U.S. Scientists Who

Published Research Papers During 1978.’’NSF–47, ‘‘NSF Applied Research Evaluation

Roster.’’

EFFECTIVE DATE: This action is effectiveimmediately on August 2, 1996.COMMENTS. Written comments should besubmitted to Herman G. Fleming, NSFPrivacy Act Officer, National ScienceFoundation, Division of Contracts,Policy and Oversight, 4201 WilsonBoulevard, Room 485, Arlington, VA22230.

Dated: July 29, 1996.Herman G. Fleming,Privacy Act Officer.[FR Doc. 96–19613 Filed 8–1–96; 8:45 am]BILLING CODE 7555–01–M

NUCLEAR REGULATORYCOMMISSION

[Docket Nos. 50–254 and 50–265]

Commonwealth Edison Company andMidAmerican Energy Company, (QuadCities Nuclear Power Station, Units 1and 2); Order Approving the IndirectTransfer of Licenses as Part of theCorporate Restructuring ofMidamerican Energy Company byEstablishment of a Holding Company

IMidAmerican Energy Company (MEC)

holds a 25-percent ownership interest in

Quad Cities Nuclear Power Station,Units 1 and 2. Commonwealth EdisonCompany (ComEd) owns the remaining75-percent share of the facility. MECand ComEd are governed by FacilityOperating License Nos. DPR–29 andDPR–30 issued by the U.S. AtomicEnergy Commission pursuant to Part 50of Title 10 of the Code of FederalRegulations (10 CFR Part 50) onDecember 14, 1972. Under theselicenses, ComEd, acting as agent andrepresentative of the two owners listedon the licenses, has the authority tooperate the Quad Cities Nuclear PowerStation, Units 1 and 2. Quad Cities islocated in Rock Island County, Illinois.

IIBy letter dated April 4, 1996, MEC

informed the Commission that it was inthe process of implementing a corporaterestructuring. MEC proposes torestructure itself by establishing aholding company, MidAmerican EnergyHoldings Company (MEHC), whichwould become the parent corporationto, and sole owner of, MEC. MEC wouldcontinue to remain a 25-percentminority owner and possession-onlylicensee of the Quad Cities NuclearPower Station, Units 1 and 2. MECwould remain an ‘‘electric utility’’ asdefined in 10 CFR 50.2, engaged in thegeneration, transmission, anddistribution of electric energy forwholesale and retail sale. Uponconsummation of the restructuring,common stockholders of MEC wouldreceive one share of stock in MEHC inexchange for each share of MEC stockheld. MEC requested the Commission’sapproval of the indirect license transfersto the extent affected by the proposedcorporate restructuring, pursuant to 10CFR 50.80. Notice of this request forapproval was published in the FederalRegister on June 14, 1996 (61 FR 30263).

Upon review of the informationsubmitted in MEC’s letter of April 4,1996, and other information before theCommission, the NRC staff hasdetermined that the restructuring,subject to the conditions set forthherein, will not affect the qualificationsof MEC as a holder of the license, andis otherwise consistent with applicableprovisions of law, regulations, andorders issued by the Commission. Thesefindings are supported by a SafetyEvaluation dated July 29, 1996.

IIIBy September 3, 1996, any person

adversely affected by this Order may filea request for a hearing with respect toissuance of the Order. Any personrequesting a hearing shall set forth withparticularity how that interest is


adversely affected by this Order andshall address the criteria set forth in 10CFR 2.714(d).

If a hearing is to be held, theCommission will issue an Orderdesignating the time and place of suchhearing.

The issue to be considered at anysuch hearing shall be whether thisOrder should be sustained.

Any request for a hearing must befiled with the Secretary of theCommission, U.S. Nuclear RegulatoryCommission, Washington, DC 20555–0001, Attention: Docketing and ServicesBranch, or may be delivered to 11545Rockville Pike, Rockville, Maryland,between 7:45 a.m. and 4:15 p.m. Federalworkdays, by the above date. Copiesshould be also sent to the Office of theGeneral Counsel and the Director, Officeof Nuclear Reactor Regulation, U.S.Nuclear Regulatory Commission,Washington, DC 20555–0001; Michael I.Miller, Esquire, Sidley and Austin, OneFirst National Plaza, Chicago, Illinois60603, attorney for ComEd; and Jack R.Newman, Esquire, Morgan, Lewis andBockius, LLP, 1800 M Street, NW,Washington, D.C. 20036, attorney forMEC.

IVAccordingly, pursuant to Sections

161b, 161i, 161o, and 184 of the AtomicEnergy Act of 1954, as amended, 42USC 2201(b), 2201(i), 2201(o), and 2234;and 10 CFR 50.80, It is hereby orderedThat the Commission consents to theindirect transfers of the licenses held byMEC to the extent affected by theproposed restructuring of MEC subjectto the following: (1) MEC shall providethe Director of the Office of NuclearReactor Regulation a copy of anyapplication, at the time it is filed, totransfer (excluding grants of securityinterests or liens) from MEC to itsproposed parent or to any otheraffiliated company, facilities for theproduction, transmission, ordistribution of electric energy having adepreciated book value exceeding onepercent (1%) of MEC’s consolidated netutility plant, as recorded on MEC’sbooks of account, and (2) should therestructuring of MEC not be completedby December 31, 1997, this Order shallbecome null and void, provided,however, on application and for goodcause shown, such date may beextended.

For further details with respect to thisaction, see the application for consentconcerning the proposed corporaterestructuring of MEC dated April 4,1996, which is available for publicinspection at the Commission’s PublicDocument Room, the Gelman Building,

2120 L Street, NW., Washington, DC,and at the local public document roomlocated at the Dixon Public Library, 221Hennepin Avenue, Dixon, Illinois.

Dated at Rockville, Maryland, this 29th dayof July 1996.

For the Nuclear Regulatory Commission.William T. Russell,Director, Office of Nuclear ReactorRegulation.[FR Doc. 96–19672 Filed 8–1–96; 8:45 am]BILLING CODE 7590–01–P

1996 All Agreement States Meeting

AGENCY: Nuclear RegulatoryCommission.ACTION: Notice of meeting.

SUMMARY: The Nuclear RegulatoryCommission (NRC) staff plans toconvene a public meeting withrepresentatives of the 29 AgreementStates to discuss technical and programmanagement issues in the regulation ofAtomic Energy Act radioactivematerials. Panel discussions will beheld and individual presentations willbe made to clarify and enhance ageneral understanding of regulatoryrequirements designed to protect thesafety of the public and radiationworkers.DATES: The public meeting will be heldon Tuesday, September 17, 1996, from8:00 a.m. to 5:00 p.m.; Wednesday,September 18, 1996, from 8:00 a.m. to5:00 p.m.; and Thursday, September 19,1996, from 8:00 a.m. to 12:00 noon.ADDRESSES: The meeting is to be held atthe NRC’s Two White Flint Northbuilding auditorium, 11554 RockvillePike, Rockville, Maryland 20852.FOR FURTHER INFORMATION CONTACT:Lloyd A. Bolling, Office of StatePrograms, U. S. Nuclear RegulatoryCommission, Washington, D.C. 20555,Telephone (301) 415–2327, FAX (301)415–3502 & Internet ([email protected]).SUPPLEMENTARY INFORMATION: Thefollowing is a list of potential topics tobe covered at this meeting:1. Implementation of the Integrated

Materials Performance EvaluationProgram (IMPEP).

2. Business Process Reengineering—Materials Licensing.

3. Medical Program Issues.4. Adequacy and Compatibility

Implementing Procedures.5. Operational Events and Nuclear

Materials Events Database.6. Radioactive Sources & Devices

Working Group Report.7. Contaminated Sites and

Decommissioning.8. Low-Level Waste Issues.

The meeting will be conducted in amanner that will expedite the orderlyconduct of business. A transcript of themeeting will be available for inspection,and copying for a fee, at the NRC PublicDocument Room, 2120 L Street, N.W.(Lower Level), Washington, D.C. 20555on or about October 30, 1996.

The following procedures apply topublic attendance at the meeting:

1. Questions or statements fromattendees other than participants, i.e.,participating representatives of eachAgreement State and participating NRCstaff will be entertained as time permits;and

2. Seating for the public will be on afirst-come, first-served basis.

Dated at Rockville, Maryland this 22nd dayof July, 1996.

For the Nuclear Regulatory Commission.Richard L. Bangart,Director, Office of State Programs.[FR Doc. 96–19667 Filed 8–1–96; 8:45 am]BILLING CODE 7590–01–P

RAILROAD RETIREMENT BOARD

Agency Forms Submitted for OMBReview

SUMMARY: In accordance with thePaperwork Reduction Act of 1995 (44U.S.C. Chapter 35), the RailroadRetirement Board has submitted thefollowing proposal(s) for the collectionof information to the Office ofManagement and Budget for review andapproval.

Summary of Proposal(s)

(1) Colllection title: Medical Reports.(2) Form(s) submitted: G–3EMP,

G–250, G–250a, G–260, GL–12, RL–11b,and RL–11d.

(3) OMB Number: 3220–0038.(4) Expiration date of current OMB

clearance: August 31, 1996.(5) Type of request: Extension of a

currently approved collection.(6) Respondents: Business or other

for-profit, non-profit institutions, andState, Local or Tribal Government.

(7) Estiamted annual number ofrespondents: 60,950.

(8) Total annual responses: 60,950.(9) Total annual reporting hours:

25,187.(10) Collection description: The

Railroad Retirement Act providesdisability annuities for qualifiedrailroad employees whose physical ormental condition renders themincapable of working in their regularoccupation (occupational disability) orany occupation (total disability). Themedical reports obtain information


needed for determining the nature andseverity of the impairment.ADDITIONAL INFORMATION OR COMMENTS:Copies of the form and supportingdocuments can be obtained from ChuckMierzwa, the agency clearance officer(312–751–3363). Comments regardingthe information collection should beaddressed to Ronald J. Hodapp, RailroadRetirement Board, 844 North RushStreet, Chicago, Illinois 60611–2092 andthe OMB reviewer, Laura Oliven (202–395–7316), Office of Management andBudget, Room 10230, New ExecutiveOffice Building, Washington, D.C.20503.Chuck Mierzwa,Clearance Officer.[FR Doc. 96–19619 Filed 8–1–96; 8:45 am]BILLING CODE 7905–01–M

SECURITIES AND EXCHANGECOMMISSION

[Release No. 35–26547]

Filings Under the Public Utility HoldingCompany Act of 1935, as Amended(‘‘Act’’)

July 26, 1996.Notice is hereby given that the

following filing(s) has/have been madewith the Commission pursuant toprovisions of the Act and rulespromulgated thereunder. All interestedpersons are referred to the application(s)and/or declaration(s) for completestatements of the proposedtransaction(s) summarized below. Theapplication(s) and/or declaration(s) andany amendments thereto is/are availablefor public inspection through theCommission’s Office of PublicReference.

Interested persons wishing tocomment or request a hearing on theapplication(s) and/or declaration(s)should submit their views in writing byAugust 19, 1996, to the Secretary,Securities and Exchange Commission,Washington, D.C. 20549, and serve acopy on the relevant applicant(s) and/ordeclarant(s) at the address(es) specifiedbelow. Proof of service (by affidavit or,in case of an attorney at law, bycertificate) should be filed with therequest. Any request for hearing shallidentify specifically the issues of fact orlaw that are disputed. A person who sorequests will be notified of any hearing,if ordered, and will receive a copy ofany notice or order issued in the matter.After said date, the application(s) and/or declaration(s), as filed or as amended,may be granted and/or permitted tobecome effective.

CNG Transmission Corporation, et al.(70–7641)

CNG Transmission Corporation(‘‘Transmission’’), a wholly-ownedsubsidiary of Consolidated Natural GasCompany (‘‘Consolidated’’), a registeredholding company, and CNG Iroquois,Inc. (‘‘CNGI’’), a wholly-ownedsubsidiary of Transmission, bothTransmission and CNGI of 445 WestMain Street, Clarksburg, West Virginia26301, have filed a post-effectiveamendment, under sections 6(a), 7, 9(a),10, 12(b) and 12(c) of the Act and rules45 and 54 thereunder and section 2(a)of the Gas Related Activities Act of1990, to their application-declaration inthe above file.

By orders dated January 9, 1991(HCAR No. 25239), February 28, 1991(HCAR No. 25263), May 7, 1991 (HCARNo. 25308) and July 6, 1993 (HCAR No.25845) (collectively, the ‘‘Orders’’),among other things, CNGI wasauthorized to acquire a 9.4% generalpartnership interest in Iroquois GasTransmission System L.P. (the‘‘Partnership’’), a partnership formed toconstruct and own an interstate naturalgas pipeline installed betwen Canadaand Long Island, New York; to makeequity contributions to the Partnershipup to an aggregate amount of $55million outstanding at any one time,through June 30, 1996; and in respect ofthe Partnership, to provide guarantees,indemnities, letters of credit and/orreimbursement agreements up to anaggregate amount of $20 millionoutstanding at any one time, throughJune 30, 1996. Pursuant to the Orders,among other things, Transmission wasauthorized to fund CNGI through themaking of open account advances and/or the purchase of CNGI common stock,at $10,000 par value, up to an aggregateamount of $55 million outstanding atany one time, with CNGI retaining theright to repurchase the common stock atits par value, through June 30, 1996; andto provide guarantees, indemnities,letters of credit and/or reimbursementagreements to CNGI up to an aggregateamount of $20 million outstanding atany one time, through June 30, 1996.

CNGI now seeks to increase itsownership interest in the Partnershipfrom 9.4% to 16% by purchasing a 6.6%general partnership interest from ANRIroquois, Inc. for approximately $15million.

The applicants state that constructionof the pipeline was completed in 1992;a credit facility involving severalinstitutional lenders currently provideslong-term financing for the pipeline. Inanticipation of funding obligationswhich may arise out of maintenance

activities and expansion projects whichthe Partnership may undertake in thefuture from time to time, the applicantsrequest extensions through June 30,2001 of CNGI’s and Transmission’sauthority to provide guarantees andindemnities, letters of credit and/orrelated reimbursement agreements in anamount, for each company, not toexceed $20 million outstanding at anyone time, in respect of the Partnershipand CNGI, respectively.

CNGI has 5,000 authorized shares ofits common stock, $10,000 par value, ofwhich 1,494 shares are issued andoutstanding. CNGI requests authority toincrease its authorized share capitalfrom 5,000 to 10,000 shares. CNGI alsoseeks an extension through June 30,2001 to buy back, at par value, sharesof its common stock issued and sold toTransmission.

For the Commission, by the Division ofInvestment Management, pursuant todelegated authority.Margaret H. McFarland,Deputy Secretary.[FR Doc. 96–19628 Filed 8–1–96; 8:45 am]BILLING CODE 8010–01–M

[Investment Company Act Release No.22105; 811–8376]

Renaissance Capital Growth & IncomeFund III, Inc.; Notice of ProposedDeregistration

July 26, 1996.AGENCY: Securities and ExchangeCommission (‘‘SEC’’).ACTION: Notice of proposedderegistration under the InvestmentCompany Act of 1940 (the ‘‘Act’’).

RELEVANT ACT SECTIONS: Sections 8(a),8(f) and (54(a).SUMMARY OF NOTICE: The SEC proposesto declare by order on its own motionthat the registration of RenaissanceCapital Growth & Income Fund III, Inc.(‘‘Renaissance Fund’’) under the Act hasceased to be in effect, as of March 14,1994, when it elected to be regulated asa business development company(‘‘BDC’’).HEARING OR NOTIFICATION OF HEARING: Anorder of deregistration will be issuedunless the SEC orders a hearing.Interested persons may request ahearing by writing to the SEC’sSecretary. Hearing requests should bereceived by the SEC by 5:30 p.m. onAugust 20, 1996. Hearing requestsshould state the nature of the writer’sinterest, the reason for the request, andthe issues contested. Persons requestinga hearing should serve RenaissanceFund with the request, either personally


1 15 U.S.C. 78s(b)(1) (1988).2 The Commission has modified parts of these

statements.

3 For a complete description of the DCC’s repoclearance system, see Securities Exchange ActRelease No. 36367 (October 13, 1995), 60 FR 54095.

4 Securities Exchange Act Release Nos. 36367(October 13, 1995), 60 FR 54095; 36901 (February28, 1996), 61 FR 8991; 37042 (March 29, 1996), 61FR 15330; 37212 (May 14, 1996), 61 FR 25722;37235 (May 20, 1996), 61 FR 26942; and 37392 (July1, 1996), 61 FR 36095.

5 15 U.S.C. 78q–1 (1988).6 15 U.S.C. 78s(b)(3)(A)(iii) (1988).7 17 CFR 240.19b–4(e)(4) (1995).

or by mail, and also send the request tothe Secretary of the SEC, along withproof of service by affidavit, or, forlawyers, by certificate. Persons mayrequest notification of a hearing bywriting to the SEC’s Secretary.ADDRESSES: Secretary, SEC, 450 FifthStreet, N.W., Washington, D.C. 20549.Renaissance Fund, 8080 N. CentralExpressway, Suite 210–LB 59, Dallas,TX 75206.FOR FURTHER INFORMATION CONTACT:H.R. Hallock, Jr., Special Counsel, at(202) 942–0564, or Robert a. Robertson,Branch Chief, at (202) 942–0564(Division of Investment Management,Office of Investment CompanyRegulation).

Statement of Facts

1. Renaissance Fund, a Texascorporation, filed a Notification ofRegistration on Form N–8A undersection 8(a) of the Act and a registrationstatement on Form N–2 under section8(b) of the Act and under the SecuritiesAct of 1933 (the ‘‘1933 Act’’) onFebruary 25, 1994. The registrationstatement became effective on May 6,1994.

2. Section 54(a) of the Act providesthat any company that satisfies thedefinition of a BDC under section2(a)(48) (A) and (B) may elect to besubject to the provisions of sections 55through 65 and be regulated as a BDCby filing with the SEC a notification ofsuch election, if such company: (i) Hasa class of its equity securities registeredunder section 12 of the SecuritiesExchange Act of 1934 (the ‘‘ExchangeAct’’); or (ii) has filed a registrationstatement pursuant to section 12 of theExchange Act for a class of its equitysecurities. On March 14, 1994,Renaissance Fund elected BDC status byfiling a Form N–54A, which stated that,among other things, the company hadfiled a registration statement for a classof equity securities pursuant to section12 of the Exchange Act.

3. Section 8(f) of the Act permits theSEC to deregister a registeredinvestment company on its own motionif it finds that the company has ceasedto be an investment company.

4. Section 8(a) of the Act, whichrequires registration of investmentcompanies, does not apply to BDCs.After an existing registered investmentcompany has filed an election to beregulated as a BDC, the SEC on its ownmotion will declare by order undersection 8(f) that the company’sregistration under the Act has ceased tobe in effect. Such an order will be madeeffective retroactively, as of the time theSEC received the company’s election.

See Investment Company Act ReleaseNo. 11703 (March 26, 1981).

For the SEC, by the Division of InvestmentManagement, under delegated authority.Margaret H. McFarland,Deputy Secretary.[FR Doc. 96–19627 Filed 8–1–96; 8:45 am]BILLING CODE 8010–01–M

[Release No. 34–37488; File No. SR–DCC–96–10]

Self-Regulatory Organizations; DeltaClearing Corp.; Notice of Filing andImmediate Effectiveness of a ProposedRule Change Relating to the Additionof GFI Group Inc., as an InterdealerBroker for Delta Clearing Corp.’sRepurchase Agreement ClearanceSystem

July 26, 1996.Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934(‘‘Act’’),1 notice is hereby given that onJuly 18, 1996, Delta Clearing Corp.(‘‘DCC’’) filed with the Securities andExchange Commission (‘‘Commission’’)the proposed rule change as describedin Items I, II, and III below, which itemshave been prepared primarily by DCC.The Commission is publishing thisnotice to solicit comments on theproposed rule change from interestedpersons.

I. Self-Regulatory Organization’sStatement of the Terms of Substance ofthe Proposed Rule Change

The purpose of the proposed rulechange is to give notice that DCC hasauthorized GFI Group Inc. (‘‘GFI’’) to actas an interdealer broker in DCC’s over-the-counter clearance and settlementsystem for repurchase agreement andreverse repurchase agreement (‘‘repos’’)transactions involving U.S. Treasurysecurities.

II. Self-Regulatory Organization’sStatement of the Purpose of, andStatutory Basis for, the Proposed RuleChange

In its filing with the Commission,DCC included statements concerningthe purpose of and basis for theproposed rule change and discussed anycomments it received on the proposedrule change. The text of these statementsmay be examined at the places specifiedin Item IV below. DCC has preparedsummaries, set forth in sections (A), (B),and (C) below, of the most significantaspects of such statements.2

(A) Self-Regulatory Organization’sStatement of the Purpose of, andStatutory Basis for, the Proposed RuleChange

Through its repo clearing system, DCCclears repo transactions that have beenagreed to by DCC participants throughthe facilities of interdealer brokers thathave been specially authorized by DCC(‘‘authorized brokers’’) to offer theirservices to DCC participants.3 Currently,Liberty Brokerage, Inc., RMJ SpecialBrokerage Inc., Euro Brokers MaxcorInc., Prebon Securities (USA) Inc.,Tullet and Tokyo Securities Inc.,Tradition (Government Securities), Inc.,and Patriot Securities, Inc. areauthorized brokers.4 The purpose of theproposed rule change is to give noticethat DCC has authorized GFI to act as abroker in DCC’s clearance andsettlement system for repo trades.

The proposed rule change willfacilitate the prompt and accurateclearance and settlement of securitiestransactions, and therefore, theproposed rule change is consistent withthe requirements of the Act, specificallySection 17A of the Act, and the rulesand regulations thereunder.5

(B) Self-Regulatory Organization’sStatement on Burden on Competition

DCC does not believe that theproposed rule change will impose anyburden on competition that is notnecessary or appropriate in furtheranceof the purposes of the Act.

(C) Self-Regulatory Organization’sStatement on Comments on theProposed Rule Change Received fromMembers, Participants or Others

Comments were neither solicited norreceived.

III. Date of Effectiveness of theProposed Rule Change and Timing forCommission Action

The foregoing rule change has becomeeffective pursuant to Section19(b)(3)(A)(iii) of the Act 6 and Rule19b–4(e)(4) thereunder 7 in that theproposal effects a change in an existingservice of a registered clearing agencythat does not adversely affect thesafeguarding of securities or funds in


8 17 CFR 200.30–3(a)(12) (1995).

the custody or control of the clearingagency or for which it is responsible anddoes not significantly affect therespective rights or obligations of theclearing agency or persons using theservice. At any time within sixty daysof the filing of the proposed rule change,the Commission may summarilyabrogate such rule change if it appearsto the Commission 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 writtencommunication relating to the proposedrule change between the Commissionand any person, other than those thatmay be withheld from the public inaccordance with the provisions of 5U.S.C. 552, will be available forinspection and copying in theCommission’s Public Reference Section,450 Fifth Street, N.W., Washington, D.C.20549. Copies of such filing also will beavailable for inspection and copying atDCC. All submissions should refer toFile No. SR–DDC–96–10 and should besubmitted by August 23, 1996.

For the Commission by the Division ofMarket Regulation, pursuant to delegatedauthority.8

Margaret H. McFarland,Deputy Secretary.[FR Doc. 96–19663 Filed 8–1–96; 8:45 am]BILLING CODE 8010–01–M

SOCIAL SECURITY ADMINISTRATION

Agency Information CollectionActivities: Proposed CollectionRequest

Normally on Fridays, the SocialSecurity Administration publishes a listof information collection packages thatwill require submission to the Office ofManagement and Budget (OMB) forclearance in compliance with PublicLaw 104–13 effective October 1, 1995,The Paperwork Reduction Act of 1995.Since the last list was published in the

Federal Register on July 26, 1996, theinformation collections listed belowhave been proposed or will requireextension of the current OMB approvals:(Call the SSA Reports Clearance Officer on(410) 965–4125 for a copy of the form(s) orpackage(s), or write to her at the addresslisted below the information collections)

1. Reporting Changes That AffectYour Social Security—0960–0073. Theinformation collected by the SocialSecurity Administration on form SSA–1425 is used to determine abeneficiary’s continuing entitlement toSocial Security benefits and todetermine the proper benefit amount.The respondents are Social Securitybeneficiaries who need to report anevent which could affect theirpayments.

Number of Respondents: 70,000.Frequency of Response: On occasion.Average Burden Per Response: 5

minutes.Estimated Annual Burden: 5,833

hours.2. Student Reporting Form—0960–

0088. The information collected by theSocial Security Administration on formSSA–1383 is used to determine if anevent or change will affect a student’seligibility for Social Security benefitsand to determine the correct benefitamount. The respondents are studentbeneficiaries or their representativepayees who report an event or change.

Number of Respondents: 75,000.Frequency of Response: On occasion.Average Burden Per Response: 6

minutes.Estimated Annual Burden: 7,500

hours.

Social Security Administration

Written comments andrecommendations regarding theseinformation collections should be sentwithin 60 days from the date of thispublication, directly to the SSA ReportsClearance Officer at the followingaddress: Social Security Administration,DCFAM, Attn: Judith T. Hasche, 6401Security Blvd., 1–A–21 OperationsBldg., Baltimore, MD 21235.

In addition to your comments on theaccuracy of the agency’s burdenestimate, we are soliciting comments onthe need for the information; itspractical utility; ways to enhance itsquality, utility and clarity; and on waysto minimize burden on respondents,including the use of automatedcollection techniques or other forms ofinformation technology.

Dated: July 29, 1996.Judith T. Hasche,Reports Clearance Officer, Social SecurityAdministration.[FR Doc. 96–19673 Filed 8–1–96; 8:45 am]BILLING CODE 4190–29–P

COMMITTEE FOR THEIMPLEMENTATION OF TEXTILEAGREEMENTS

Adjustment of Import Limits for CertainCotton, Wool and Man-Made FiberTextiles and Textile Products and SilkBlend and Other Vegetable FiberApparel Produced or Manufactured inthe Philippines

July 29, 1996.AGENCY: Committee for theImplementation of Textile Agreements(CITA).ACTION: Issuing a directive to theCommissioner of Customs adjustinglimits.

EFFECTIVE DATE: July 30, 1996.FOR FURTHER INFORMATION CONTACT:Janet Heinzen, International TradeSpecialist, Office of Textiles andApparel, U.S. Department of Commerce,(202) 482–4212. For information on thequota status of these limits, refer to theQuota Status Reports posted on thebulletin boards of each Customs port orcall (202) 927–6713. For information onembargoes and quota re-openings, call(202) 482–3715.

SUPPLEMENTARY INFORMATION:Authority: Executive Order 11651 of March

3, 1972, as amended; section 204 of theAgricultural Act of 1956, as amended (7U.S.C. 1854); Uruguay Round AgreementsAct.

The current limits for certaincategories are being adjusted, variously,for carryover, carryforward andrecrediting of unused carryforward.

A description of the textile andapparel categories in terms of HTSnumbers is available in theCORRELATION: Textile and ApparelCategories with the Harmonized TariffSchedule of the United States (seeFederal Register notice 60 FR 65299,published on December 19, 1995). Alsosee 60 FR 62412, published onDecember 7, 1995.

The letter to the Commissioner ofCustoms and the actions taken pursuantto it are not designed to implement allof the provisions of the Uruguay RoundAgreements Act and the Uruguay RoundAgreement on Textiles and Clothing, butare designed to assist only in the


implementation of certain of theirprovisions.Troy H. Cribb,Chairman, Committee for the Implementationof Textile Agreements.

Committee for the Implementation of TextileAgreementsJuly 29, 1996.Commissioner of Customs,Department of the Treasury, Washington, DC

20229.Dear Commissioner: This directive

amends, but does not cancel, the directiveissued to you on Novembr 30, 1995, by theChairman, Committee for the Implementationof Textile Agreements. That directiveconcerns imports of certain cotton, wool andman-made fiber textiles and textile productsand silk blend and other vegetable fiberapparel, produced or manufactured in thePhilippines and exported during the twelve-month period beginning on January 1, 1996and extending through December 31, 1996.

Effective on July 30, 1996, you are directedto adjust the limits for the followingcategories, as provided for under the UruguayRound Agreements Act and the UruguayRound Agreement on Textiles and Clothing:

Category Adjusted limit 1

Levels in Group I333/334 .................... 239,658 dozen.335 ........................... 166,204 dozen.336 ........................... 624,274 dozen.340/640 .................... 884,631 dozen.347/348 .................... 1,729,785 dozen.359–C/659–C 2 ........ 822,203 kilograms.433 ........................... 3,275 dozen.447 ........................... 8,343 dozen.634 ........................... 386,530 dozen.635 ........................... 333,535 dozen.638/639 .................... 1,767,107 dozen.647/648 .................... 1,131,411 dozen.650 ........................... 102,839 dozen.659–H 3 .................... 1,194,366 kilograms.Group II200–229, 300–326,

330, 332, 349,353, 354, 359–O 4,360, 362, 363,369–O 5, 400–414,432, 434–442,444, 448, 459,464–469, 600–607, 613–629,630, 632, 644,653, 654, 659–O 6,665, 666, 669–O 7,670–O 8, 831–846and 850–859, as agroup.

146,636,081 squaremeters equivalent.

1 The limits have not been adjusted to ac-count for any imports exported after December31, 1995.

2 Category 359–C: only HTS numbers6103.42.2025, 6103.49.8034, 6104.62.1020,6104.69.8010, 6114.20.0048, 6114.20.0052,6203.42.2010, 6203.42.2090, 6204.62.2010,6211.32.0010, 6211.32.0025 and6211.42.0010; Category 659–C: only HTSnumbers 6103.23.0055, 6103.43.2020,6103.43.2025, 6103.49.2000, 6103.49.8038,6104.63.1020, 6104.63.1030, 6104.69.1000,6104.69.8014, 6114.30.3044, 6114.30.3054,6203.43.2010, 6203.43.2090, 6203.49.1010,6203.49.1090, 6204.63.1510, 6204.69.1010,6210.10.9010, 6211.33.0010, 6211.33.0017and 6211.43.0010.

3 Category 659–H: only HTS numbers6502.00.9030, 6504.00.9015, 6504.00.9060,6505.90.5090, 6505.90.6090, 6505.90.7090and 6505.90.8090.

4 Category 359–O: all HTS numbers except6103.42.2025, 6103.49.8034, 6104.62.1020,6104.69.8010, 6114.20.0048, 6114.20.0052,6203.42.2010, 6203.42.2090, 6204.62.2010,6211.32.0010, 6211.32.0025 and6211.42.0010 (Category 359–C).

5 Category 369–O: all HTS numbers except6307.10.2005 (Category 369–S).

6 Category 659–O: all HTS numbers except6103.23.0055, 6103.43.2020, 6103.43.2025,6103.49.2000, 6103.49.8038, 6104.63.1020,6104.63.1030, 6104.69.1000, 6104.69.8014,6114.30.3044, 6114.30.3054, 6203.43.2010,6203.43.2090, 6203.49.1010, 6203.49.1090,6204.63.1510, 6204.69.1010, 6210.10.9010,6211.33.0010, 6211.33.0017, 6211.43.0010(Category 659–C); 6502.00.9030,6504.00.9015, 6504.00.9060, 6505.90.5090,6505.90.6090, 6505.90.7090 and6505.90.8090 (Category 659–H).

7 Category 669–O: all HTS numbers except6305.32.0010, 6305.32.0020, 6305.33.0010,6305.33.0020 and 6305.39.0000 (Category669–P).

8 Category 670–O: all HTS numbers except4202.12.8030, 4202.12.8070, 4202.92.3020,4202.92.3030 and 4202.92.9025 (Category670–L).

The Committee for the Implementation ofTextile Agreements has determined thatthese actions fall within the foreign affairsexception of the rulemaking provisions of 5U.S.C. 553(a)(1).

Sincerely,Troy H. Cribb,Chairman, Committee for the Implementationof Textile Agreements.[FR Doc. 96–19617 Filed 8–1–96; 8:45 am]BILLING CODE 3510–DR–F



Notice of Intent to Rule on Application(#96–03–C–00–PDX) to Impose and Usethe Revenue From a Passenger FacilityCharge (PFC) at Portland InternationalAirport, Submitted by the Port ofPortland, Portland, OR

AGENCY: Federal AviationAdministration (FAA), DOT.ACTION: Notice of intent to rule onapplication.

SUMMARY: The FAA proposes to rule andinvites public comment on theapplication to impose and use PFC

revenue at Portland InternationalAirport under the provisions of 49U.S.C. 40117 and Part 158 of the FederalAviation Regulations (14 CFR part 158).DATES: Comments must be received onor before September 3, 1996.ADDRESSES: Comments on thisapplication may be mailed or deliveredin triplicate to the FAA at the followingaddress: J. Wade Bryant, Manger; SeattleAirports District Office, SEA–ADO;Federal Aviation Administration; 1601Lind Avenue SW., Suite 250; Renton,WA 98055–4056.

In addition, one copy of anycomments submitted to the FAA mustbe mailed or delivered to Ms. SusanHaynes, at the following address: Port ofPortland, 7000 N.E. Airport Way,Portland, OR 97218.

Air Carriers and foreign air carriersmay submit copies of written commentspreviously provided to PortlandInternational Airport, under § 158.23 ofPart 158.FOR FURTHER INFORMATION CONTACT: Ms.Mary Vargas, (206) 227–2660; SeattleAirports District Office, SEA–ADO;Federal Aviation Administration; 1601Lind Avenue SW, Suite 250; Renton,WA 98055–4056. The application maybe reviewed in person at this samelocation.SUPPLEMENTARY INFORMATION: The FAAproposes to rule and invites publiccomment on the application (#96–03–C–00–PDX) to impose and use PFCrevenue at Portland InternationalAirport, under the provisions of 49U.S.C. 40117 and Part 158 of the FederalAviation Regulations (14 CFR Part 158).

On July 26, 1996, the FAA determinedthat the application to impose and usethe revenue from a PFC submitted byPortland International Airport, Portland,Oregon, was substantially completewithin the requirements of § 158.25 ofPart 158. The FAA will approve ordisapprove the application, in whole orin part, no later than October 25, 1996.

The following is a brief overview ifthe application.

Level of the proposed PCF: $3.00.Proposed charge effective date:

November 1, 1996.Proposed charge expiration date:

August 31, 1999.Total requested for use approval:

$59,272,000.00.Brief description of proposed project:

Terminal Roadway Program; Runway10R/28L (South) Rehabilitationincluding Associated Taxiways andSupport Equipment; Federal InspectionStation (FIS) Expansion; TerminalExpansion South.

Class or classes of air carriers whichthe public agency has requested not be


1 The ICC Termination Act of 1995, Pub. L. 104–88, 109 Stat. 803, which was enacted on December29, 1995, and took effect on January 1, 1996,abolished the Interstate Commerce Commission andtransferred certain functions to the SurfaceTransportation Board (Board). This notice relates tofunctions that are subject to Board jurisdictionpursuant to 49 U.S.C. 11323.

2 See Joel T. Williams, III, Roy C. Coffee, Jr., RafaelFernandez-MacGregor, and Bristol Investment Co.,Inc.—Cen-Tex Rail Link, Ltd. and South OrientRailroad Company, Ltd., Finance Docket No. 32478(ICC served Aug. 16, 1994).

3 Counsel has confirmed that Cen-Tex Rail Link,Ltd. has changed its name to South Orient RailroadCompany, Ltd.

required to collect PFC’s: The carriagein air commerce of persons forcompensation or hire as a commercialoperator, but not an air carrier, ofaircraft having a maximum seatingcapacity of less than twenty passengersor a maximum payload capacity of lessthan twenty passengers or a maximumpayload capacity of less than 6,000pounds. ‘‘Air Taxi/CommercialOperator’’ shall also include, withoutregard to number of passengers orpayload capacity, revenue passengerstransported for student instruction,nonstop sightseeing flights that beginand end at the same airport and areconducted within a 25 statute mileradius of the Airport, ferry or trainingflights, aerial photography or surveycharters, and fire fighting charters.

Any person may inspect theapplication in person at the FAA officelisted above under FOR FURTHERINFORMATION CONTACT and at the FAARegional Airports Office located at:Federal Aviation Administration,Northwest Mountain Region, AirportsDivision, ANM–600, 1601 Lind AvenueS.W., Suite 540, Renton, WA 98055–4056.

In addition, any person may, uponrequest, inspect the application, noticeand other documents germane to theapplication in person at the PortlandInternational Airport.

Issued in Renton, Washington on July 26,1996.David A. Field,Manager, Planning, Programming andCapacity Branch—Northwest MountainRegion.[FR Doc. 96–19677 Filed 8–1–96; 8:45 am]BILLING CODE 4910–13–M

Federal Highway Administration

Environmental Impact Statement:Stearns County, Minnesota

AGENCY: Federal HighwayAdministration (FHWA), DOT.ACTION: Notice of intent.

SUMMARY: The FHWA is issuing thisnotice to advise the public that anenvironmental impact statement (EIS)will be prepared for the proposedreconstruction of Trunk Highway 23(TH 23) in Stearns County, Minnesota.FOR FURTHER INFORMATION CONTACT:Cheryl Martin, Federal HighwayAdministration, Suite 490 Metro SquareBuilding, 121 East Seventh Place, St.Paul, Minnesota, 55101, Telephone(612) 290–3240; or Tony Hughes, ProjectManager, Minnesota Department ofTransportation—District 3, P.O. Box

370, 3725 12th Street North, St. Cloud,MN 56303, Telephone (612) 255–2909.SUPPLEMENTARY INFORMATION: TheFHWA, in cooperation with theMinnesota Department ofTransportation, will prepare an EIS ona proposal to improve TH 23 in StearnsCounty, Minnesota. The EIS willconsider alternatives and impacts ofreconstructing existing TH 23 betweenRichmond and I–94 for a distance ofapproximately 21 kilometers (13 miles).Improvements to the corridor areconsidered necessary to provide forexisting and projected traffic demands.The alternatives to be studied in theDraft EIS as identified in the ‘‘DraftScoping Decision Document’’ include:

• No Build.• Utilize the existing TH 23 Corridor

from the west end of Richmond, utilizean unused railroad corridor betweenCounty Road 163 in Richmond andCounty Road 158 near Cold Spring,utilize the existing TH 23 Corridor tothe connection near I–94.

• Same as previously describedalternative except this alternativeincludes the construction of a four-lanerural expressway on new alignmentsouth and east of the City of Rockville.This segment of expressway wouldconnect to existing TH 23 midwaybetween Rockville and Cold Spring onthe west and approximately midwaybetween Rockville and I–94 on the east.

• Same as previously describedalternative except the four-laneexpressway on new alignment is shiftedfurther south and east of the City ofRockville.

The ‘‘TH 23 Scoping Document andDraft Scoping Decision Document’’ waspublished July 12, 1996. Copies of thedocument are being distributed toagencies, interested persons, elected andappointed officials and libraries forreview to aid in identifying issues andanalyses to be contained in the EIS. Thecomment period for the ‘‘TH 23 ScopingDocument and Draft Scoping DecisionDocument’’ extends through August 14,1996. To afford an opportunity for allinterested persons, agencies and groupsto comment on the proposed action, apublic scoping meeting will be held onAugust 8, 1996 to receive comments. Apress release was published to informcitizens of the documents’ availability.

Coordination has been initiated andwill continue with appropriate Federal,State and local agencies, and privateorganizations and citizens who havepreviously expressed or are known tohave an interest in this project. A seriesof public meetings will be held. Publicnotice will be given for the time andplace of the meetings.

To ensure that the full range of issuesrelated to this proposed action areaddressed and all significant issuesidentified, comments and suggestionsare invited from all interested parties.Comments or questions concerning thisproposed action and the EIS should bedirected to the FHWA at the addressprovided above.(Catalog of Federal Domestic AssistantProgram Number 20.205, Highway Planningand Construction. The regulationsimplementing Executive Order 12372regarding intergovernmental consultation onFederal programs and activities apply to thisprogram)

Issued on: July 25, 1996.Alan J. Friesen,Engineering and Operations Engineer, FederalHighway Administration.[FR Doc. 96–19621 Filed 8–1–96; 8:45 am]BILLING CODE 4910–22–M

Surface Transportation Board 1

[STB Finance Docket No. 32951]

Cen-Tex Rail Link, Ltd.—MergerExemption—South Orient RailroadCompany, Ltd.

Cen-Tex Rail Link, Ltd. (Cen-Tex) hasfiled a notice of exemption to mergewith South Orient Railroad Company,Ltd. (SORC). Cen-Tex and SORC arecommonly controlled Class III railcarriers that own and operate railproperty in Texas.2 Under theAgreement and Plan of Merger, SORCwill be merged with and into Cen-Tex,which will be the successor partnership.The name of the surviving partnershipwould be changed from Cen-Tex RailLink, Ltd. to South Orient RailroadCompany Ltd.3 The transaction was tobe consummated on or after July 18,1996.

Because the parties are members ofthe same corporate family, and themerger will not result in adversechanges in service levels, significantoperational changes, or a change in thecompetitive balance with carriersoperating outside the corporate family,the transaction qualifies for the class


1 The ICC Termination Act of 1995, Pub. L. 104–88, 109 Stat. 803 (ICCTA), which was enacted onDecember 29, 1995, and took effect on January 1,1996, abolished the Interstate CommerceCommission (ICC) and transferred certain functionsto the Surface Transportation Board (Board). Thisnotice relates to an acquisition of control of a railcarrier that is subject to Board jurisdiction pursuantto 49 U.S.C. 11323–25.

exemption at 49 CFR 1180.2(d)(3). Thepurpose of the transaction is tostreamline corporate functions andimprove the efficiency of the survivingentity.

Under 49 U.S.C. 10502(g), the Boardmay not use its exemption authority torelieve a rail carrier of its statutoryobligation to protect the interests of itsemployees. Section 11326(c), however,does not provide for labor protection fortransactions under sections 11324 and11325 that involve only Class IIIrailroad carriers. Because thistransaction involves Class III railcarriers only, the Board, under thestatute, may not impose labor protectiveconditions for this transaction.

Petitions to revoke the exemptionunder 49 U.S.C. 10502(d) may be filedat any time. The filing of a petition torevoke will not automatically stay thetransaction.

An original and 10 copies of allpleadings, referring to STB FinanceDocket No. 32951, must be filed withthe Surface Transportation Board, Officeof the Secretary, Case Control Branch,1201 Constitution Avenue, N.W.,Washington, DC 20423 and served on:Kevin M. Sheys, Oppenheimer Wolff &Donnelly, 1020 Nineteenth Street, N.W.,Washington, DC 20036.

Decided: July 26, 1996.By the Board, David M. Konschnik,

Director, Office of Proceedings.Vernon A. Williams,Secretary.[FR Doc. 96–19614 Filed 8–1–96; 8:45 am]BILLING CODE 4915–00–P

[STB Finance Docket No. 32892]

CSX Corporation and CSXTransportation, Inc.—Control—TheIndiana Rail Road Company

AGENCY: Surface Transportation Board.ACTION: Notice of acceptance ofapplication.

SUMMARY: The Board accepts forconsideration the application filed July3, 1996, by CSX Corporation (CSX), CSXTransportation, Inc. (CSXT), and TheIndiana Rail Road Company (INRD)(collectively, applicants), for CSX andCSXT to acquire control of INRD. Inaccordance with 49 CFR1180.4(b)(2)(iv), the Board finds that

this is a minor transaction as describedin 49 CFR 1180.2(c).DATES: This decision is effective onAugust 2, 1996. Written comments,including comments from the Secretaryof Transportation and the AttorneyGeneral of the United States, must befiled with the Board no later thanSeptember 3, 1996. The Board will issuea service list shortly thereafter. Copiesof the comments must be served on allparties of record within 10 days after theBoard issues the service list and must beconfirmed by certificate of service filedwith the Board indicating that alldesignated individuals andorganizations on the service list havebeen properly served. Applicants’ replyis due September 23, 1996.ADDRESSES: Send an original and 10copies of pleadings referring to STBFinance Docket No. 32892 to: SurfaceTransportation Board, Office of theSecretary, Case Control Branch, 1201Constitution Avenue, N.W.,Washington, DC 20423. In addition,send one copy of all pleadings toapplicants’ representatives: (1) G. PaulMoates, Sidley & Austin, 1722 EyeStreet, N.W., Washington, DC 20006;and (2) John H. Broadley, Jenner &Block, 601 Thirteenth Street, N.W.,Twelfth Floor, Washington, DC 20005.FOR FURTHER INFORMATION CONTACT:Beryl Gordon, (202) 927–5660. [TDD forthe hearing impaired: (202) 927–5721.]SUPPLEMENTARY INFORMATION:Applicants seek approval under 49U.S.C. 11323–25 for CSX and CSXT toacquire control of INRD by acquiring acontrolling interest in Midland UnitedCorporation (Midland), the noncarrierholding company that owns INRD.

Applicants state that this is a minortransaction as defined in 49 CFR part1180, the regulations that implementedformer 49 U.S.C. 11343–45. The ICCTArevised those statutory provisions andreenacted them as 49 U.S.C. 11323–25.Because the proposed transaction doesnot involve the merger or control of twoClass I railroads, it is subject to thestandards of 49 U.S.C. 11324(d). Also, asdiscussed below, because we havedetermined that the transaction is not ofregional or national significance, theprocedures set out at 49 U.S.C. 11325(d)apply. Under section 204(a) of theICCTA, all ICC rules in effect on thedate of enactment of the ICCTA ‘‘shallcontinue in effect according to theirterms until modified, terminated,superseded, set aside, or revoked inaccordance with law by the Board * * *or operation of law.’’ While thestandards and procedures of formersections 11343–45 and current sections11323–25 are substantially similar,

insofar as minor transactions areconcerned, the procedures of currentsection 11325(d) differ slightly fromthose at 49 CFR 1180.4 and shall govern.Otherwise, the use of the regulations at49 CFR part 1180 for this proceedingappears proper.

CSXT is a Class I rail carrier whollyowned by CSX, a noncarrier, andoperates approximately 19,000 miles oftrack in 20 states, the District ofColumbia, and the province of Ontario,Canada. INRD is a Class III rail carrierthat operates approximately 155 milesof track between Newton, IL, andIndianapolis, IN. CSXT’s lines, relevantto this transaction, run essentially northand south, while INRD’s line runsessentially east and west. INRD andCSXT have direct connections atSullivan and Bloomington, IN, and anindirect connection at Indianapolis, IN,through which they interchange freighttraffic.

The principal commodity handled byINRD is Indiana coal. In 1995, INRDtransported approximately 34,000carloads of Indiana coal, which is morethan 60% of its total annual carloads ofapproximately 56,000. According toapplicants, Indiana coal is currentlyavailable from a number of mine sourcesserved by Soo Line Railroad Company(Soo), INRD, and Indiana SouthernRailroad Company (ISRR). Applicantsargue that the availability of coal frommine sources located in neighboringstates as well as from western coalmines creates competition in coaltransportation services for shippers andreceivers served by INRD. Applicantssubmit that the wide variety of coalsource and transportation optionsprecludes any significant competitiveharm as a result of the proposedtransaction.

In support of its contention that theproposed transaction is unlikely toaffect, much less diminish, competitionfor INRD’s shippers and receivers,applicants provide the following trafficdata. Approximately two-thirds ofINRD’s coal traffic consists ofmovements to electric power generatingutility plants served directly by INRD.Nearly one-half of that traffic moved inall-local service from two active INRD-served mines at Switz City, IN. Theremainder of INRD’s terminating coaltraffic consisted of interline movementsoriginating at mines served by Soo and/or ISRR. With only one exception,generating fewer than 1,000 carloads ofINRD traffic in 1995, those mines arenot served by CSXT. All of INRD’sinterline-received coal traffic servedutility plants that currently are servedeither exclusively by INRD or by tworail carriers other than CSXT. Only one


2 By decision served May 3, 1996, in thisproceeding, the Board granted a waiver to permitapplicants to file this application withoutdisclosing the consideration to be paid inconnection with the transaction.

coal receiver located on INRD’s linecurrently can be served directly byCSXT. The remainder of INRD’s 1995coal traffic (approximately 12,000carloads) moved in joint-line servicewith Soo, ISRR, and/or Conrail toutilities and industrial users in Indiana,Wisconsin, and Iowa, and none of thosereceivers is served by CSXT. Therefore,applicants conclude that the commoncontrol of INRD and CSXT will notdiminish competition for INRD-originating coal traffic. INRD alsoprovides overhead haulage services forCSXT between Bloomington andSullivan, which accounted forapproximately 10% of INRD’s traffic in1995.

The largest share of INRD’s non-coaltraffic, approximately 8,200 carloads in1995, originated or terminated at localindustries on INRD’s main line atRobinson, IL. INRD is the only railcarrier serving Robinson. Less than 10%of INRD’s 1995 traffic consisted of farmproducts (primarily grain) thatoriginated at one of three countryelevators located on INRD’s main linebetween Newton and Sullivan.Applicants submit that the proposedtransaction will strengthen graincompetition by enhancing rail servicebetween INRD origins and CSXT long-haul destinations, thereby improvingaccess to potential markets for Indianaand Illinois grain producers.

CSXT owns 40% of Midland’s issuedand outstanding voting common stock,as well as options to acquire theremaining 60% of Midland’s stock andcertain nonvoting covertible preferredstock. CSXT proposes to acquire controlof INRD through control of Midland,either by converting its preferred stockor by exercising its options to purchasethe remainder of the outstandingcommon stock.2

Applicants maintain that theproposed transaction will preserve thequality of INRD’s transportationservices, improve those services throughbetter coordination of operations andmarketing with CSXT, and allow thepursuit of opportunities for operatingefficiencies and expanded marketingthrough common ownership andoperation. They state that theacquisition of control provides afinancially attractive investmentopportunity for CSXT, and that INRD’srail operations are a natural complementto those of CSXT, strengthening theirexisting operating relationship andfacilitating joint marketing of their rail

services and tighter coordination oftheir operations. It will also allow INRDto enhance its services to its customersand provide greater access to CSXT’ssupply of freight cars.

Applicants propose to maintain INRDas a separate subsidiary for theforeseeable future, operating essentiallyin the same manner as it does today,with no significant changes inoperations or service. Under CSXT’scurrent operating plan, only modestoperating efficiencies, marketingconsiderations, and serviceimprovements are contemplated, whilepreserving INRD’s existing schedulesand services. If, however, CSXT lateracquires the balance of Midland’scommon stock under the terms of itsOption Agreement, applicants indicatethat it is possible that CSXT will seekto coordinate more closely the carriers’operations. Applicants state that thereare no present plans to close anyexisting interline route or to alter orcancel any existing divisions withconnecting carriers.

Applicants submit that the proposedtransaction will have no adverse impacton employees, and that all CSXT andINRD employees will retain theirexisting positions and responsibilities.Applicants acknowledge that approvalof the transaction will be subject to theconditions set forth in New York DockRy.—Control—Brooklyn Eastern Dist.,360 I.C.C. 60 (1979).

Under 49 CFR part 1180, we mustdetermine whether a proposedtransaction is major, significant, orminor. The proposed transaction, whichinvolves the control by a Class I railcarrier of a Class III rail carrier, has noregional or national significance andwill clearly not have anyanticompetitive effects. We concludethat the competitive and operationaleffects of CSXT’s control of INRD wouldbe minimal and that none is adverse.Moreover, it appears that there isconsiderable potential for improvedcoordination of operations andmarketing between CSXT and INRD thatwill positively affect the servicesprovided by both carriers, especiallyINRD. Accordingly, we find theproposal to be a minor transactionunder 49 CFR 1180.2(c), consistent withthe categories of transactions nowdefined at 49 U.S.C. 11325(a). Becausethe application complies with theapplicable regulations governing minortransactions, we are accepting it forconsideration.

The application and exhibits areavailable for inspection in the PublicDocket Room at the Offices of the Boardin Washington, DC. In addition, theymay be obtained upon request from

applicants’ above namedrepresentatives.

Interested persons, includinggovernment entities, may participate inthis proceeding by submitting writtencomments. Any person who files timelycomments will be considered a party ofrecord if the person so requests. Nopetition for leave to intervene need befiled.

Consistent with 49 CFR1180.4(c)(1)(iii), written comments mustcontain:

(a) The docket number and title of theproceeding;

(b) The name, address, and telephonenumber of the commenting party and itsrepresentative upon whom service shallbe made;

(c) The commenting party’s position(i.e., whether it supports or opposes theproposed transaction);

(d) A statement whether thecommenting party intends to participateformally in the proceeding or merelycomment on the proposal;

(e) If desired, a request for an oralhearing with reasons supporting thisrequest; the request must indicate thedisputed material facts that can beresolved only at a hearing; and

(f) A list of all information sought tobe discovered from the applicantcarriers.

Because we have determined that thisproposal is a minor transaction, noresponsive applications will bepermitted. The time limits forprocessing this transaction are set forthat 49 U.S.C. 11325(d).

Discovery may begin immediately. Weencourage parties to resolve alldiscovery matters expeditiously andamicably.

This action will not significantlyaffect either the quality of the humanenvironment or the conservation ofenergy resources.

It is ordered:1. This application is accepted for

consideration under 49 U.S.C. 11323–25as a minor transaction under 49 CFR1180.2(c).

2. The parties shall comply with allprovisions stated above.

3. This decision is effective on August2, 1996.

Decided: July 25, 1996.By the Board, Chairman Morgan, Vice

Chairman Simmons, and CommissionerOwen.Vernon A. Williams,Secretary.[FR Doc. 96–19615 Filed 8–1–96; 8:45 am]BILLING CODE 4915–00–P


2 Under 49 CFR 1152.50(d)(2), the railroad mustfile a verified notice with the Board at least 50 daysbefore the abandonment or discontinuance is to beconsummated. NHVT’s verified notice indicated aproposed consummation date of September 1, 1996.Because the verified notice was not filed until July15, 1996, consummation should not have beenproposed to take place prior to September 3, 1996.NHVT’s representative has confirmed that thecorrect consummation date is on or after September3, 1996.

3 The Board will grant a stay if an informeddecision on environmental issues (whether raisedby a party or by the Board’s Section ofEnvironmental Analysis in its independentinvestigation) cannot be made before theexemption’s effective date. See Exemption of Out-of-Service Rail Lines, 5 I.C.C.2d 377 (1989). Any

request for a stay should be filed as soon as possibleso that the Board may take appropriate action beforethe exemption’s effective date.

4 See Exempt. of Rail Abandonment—Offers ofFinan. Assist., 4 I.C.C.2d 164 (1987).

5 The Board will accept late-filed trail userequests so long as the abandonment has not beenconsummated and the abandoning railroad iswilling to negotiate an agreement.

[STB Docket No. AB–475 (Sub-No. 2X)]

New Hampshire and Vermont RailroadCompany—Abandonment Exemption—in Coos County, NH

New Hampshire and VermontRailroad Company (NHVT) has filed anotice of exemption under 49 CFR Part1152 Subpart F—ExemptAbandonments and Discontinuances todiscontinue service over approximately1.1 miles of railroad from milepost154.6 (Station 1587.50 on Val. Sec.24.2), to milepost 155.7 (Station1645+23.5 on Val. Sec. 24.2), in BerlinCoos County, NH.2

NHVT has certified that: (1) No localtraffic has moved over the line for atleast 2 years; (2) there is no overheadtraffic on the line; (3) no formalcomplaint filed by a user of rail serviceon the line (or by a state or localgovernment entity acting on behalf ofsuch user) regarding cessation of serviceover the line either is pending with theBoard or with any U.S. District Court orhas been decided in favor ofcomplainant within the 2-year period;and (4) the requirements at 49 CFR1105.7 (environmental reports), 49 CFR1105.8 (historic reports), 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 this exemption, anyemployee adversely affected by theabandonment shall be protected underOregon 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. 10502(d)must be filed.

Provided no formal expression ofintent to file an offer of financialassistance (OFA) has been received, thisexemption will be effective onSeptember 3, 1996, unless stayedpending reconsideration. Petitions tostay that do not involve environmentalissues,3 formal expressions of intent to

file an OFA under 49 CFR1152.27(c)(2),4 and trail use/rail bankingrequests under 49 CFR 1152.29 5 mustbe filed by August 12, 1996. Petitions toreopen or requests for public useconditions under 49 CFR 1152.28 mustbe filed by August 22, 1996, with: Officeof the Secretary, Case Control Branch,Surface Transportation Board, 1201Constitution Avenue, NW., Washington,DC 20423.

A copy of any petition filed with theBoard should be sent to applicant’srepresentative: David H. Anderson, 288Littleton Road, Suite 21, Westford, MA01886.

If the verified notice contains false ormisleading information, the exemptionis void ab initio.

NHVT has filed an environmentalreport which addresses theabandonment’s effects, if any, on theenvironment and historic resources. TheSection of Environmental Analysis(SEA) will issue an environmentalassessment (EA) by August 7, 1996.Interested persons may obtain a copy ofthe EA by writing to SEA (Room 3219,Surface Transportation Board,Washington, DC 20423) or by callingElaine Kaiser, Chief of SEA, at (202)927–6248. Comments on environmentaland historic preservation matters mustbe filed within 15 days after the EAbecomes available to the public.

Environmental, historic preservation,public use, or trail use/rail bankingconditions will be imposed, whereappropriate, in a subsequent decision.

Decided: July 29, 1996.

By the Board, David M. Konschnik,Director, Office of Proceedings.Vernon A. Williams,Secretary.[FR Doc. 96–19687 Filed 8–1–96; 8:45 am]BILLING CODE 4915–00–P



July 22, 1996.The Department of Treasury has

submitted the following publicinformation collection requirement(s) toOMB for review and clearance under thePaperwork Reduction Act of 1995,Public Law 104–13. Copies of the

submission(s) may be obtained bycalling the Treasury Bureau ClearanceOfficer listed. Comments regarding thisinformation collection should beaddressed to the OMB reviewer listedand to the Treasury DepartmentClearance Officer, Department of theTreasury, Room 2110, 1425 New YorkAvenue, NW., Washington, DC 20220.

Departmental Office/Office of DataManagement

OMB Number: 1505–0149.Form Number: None.Type of Review: Extension.Title: Reporting of International

Capital and Foreign CurrencyTransactions and Positions, 31 CFR Part128.

Description: 31 CFR Part 128establishes general guidelines forreporting on United States claims onand liabilities to foreigners; ontransactions in securities withforeigners; and on monetary reserves ofthe United States. It also establishesguidelines for reporting on the foreigncurrency transactions of U.S. persons. Itincludes recordkeeping requirement,§ 128.5.

Respondents: Business or other for-profit.

Estimated Number of Recordkeepers:2,000.

Estimated Burden Hours PerRecordkeeper: 3 hours.

Frequency of Response: On occasion.Estimated Total Recordkeeping

Burden: 6,000 hours.Clearance Officer: Lois K. Holland,

(202) 622–1563, Departmental Offices,Room 2110, 1425 New York Avenue,N.W., Washington, DC 20220,

OMB Reviewer: Alexander T. Hunt,(202) 395–7860, Office of Managementand Budget, Room 10202, NewExecutive Office Building, Washington,DC 20503.Lois K. Holland,Departmental Reports Management Officer.[FR Doc. 96–19631 Filed 8–1–96; 8:45 am]BILLING CODE 4810–25–U

Submission to OMB for Review;Comment Request


submitted the following publicinformation collection requirement(s) toOMB for review and clearance under thePaperwork Reduction Act of 1995,Public Law 104–13. Copies of thesubmission(s) may be obtained bycalling the Treasury Bureau ClearanceOfficer listed. Comments regarding thisinformation collection should beaddressed to the OMB reviewer listed


and to the Treasury DepartmentClearance Officer, Department of theTreasury, Room 2110, 1425 New YorkAvenue, NW., Washington, DC 20220.

Internal Revenue Service (IRS)OMB Number: 1545–0110.Form Number: IRS Form 1099–DIV.Type of Review: Extension.Title: Dividends and Distributions.Description: The form is used by the

Service to insure that dividends areproperly reported as required by Codesection 6042 and that liquidationdistributions are correctly reported asrequired by Code section 6043, and todetermine whether payees are correctlyreporting their income.


Estimated Number of Respondents:140,560.

Estimated Burden Hours PerRespondent: 14 minutes.

Frequency of Response: Annually.Estimated Total Reporting Burden:

23,297,824 hours.Clearance Officer: Garrick Shear,

(202) 622–3869, Internal RevenueService, Room 5571, 1111 ConstitutionAvenue, NW., Washington, DC 20224.




submitted the following publicinformation collection requirement(s) toOMB for review and clearance under thePaperwork Reduction Act of 1995,Public Law 104–13. Copies of thesubmission(s) may be obtained bycalling the Treasury Bureau ClearanceOfficer listed. Comments regarding thisinformation collection should beaddressed to the OMB reviewer listedand to the Treasury DepartmentClearance Officer, Department of theTreasury, Room 2110, 1425 New YorkAvenue, NW., Washington, DC. 20220.

U.S. Secret Service (USSS)OMB Number: New.Form Number: SSF 86A.Type of Review: New collection.Title: Supplemental Investigative

Data.Description: Respondents are all

Secret Service applicants. These

applicants, if approved for hire, willrequire a Top Secret Service Clearance,and possibly SCI Access. Responses toquestions on the SSF 86A yieldsinformation necessary for theadjudication for eligibility of theclearance, as well as ensuring thatapplicant meets all internal agencyrequirements.

Respondents: Individuals orhouseholds.

Estimated Number of Respondents:7,500.

Estimated Burden Hours PerRespondent: 1 hour.

Frequency of Response: On occasion.Estimated Total Reporting Burden:

7,500 hours.Clearance Officer: Sandy Bigley, (202)

435–7025, U.S. Secret Service, Room670, 1310 L Street, NW., Washington,DC 20005.




submitted the following publicinformation collection requirement(s) toOMB for review and clearance under thePaperwork Reduction Act of 1995,Public Law 104–13. Copies of thesubmission(s) may be obtained bycalling the Treasury Bureau ClearanceOfficer listed. Comments regarding thisinformation collection should beaddressed to the OMB reviewer listedand to the Treasury DepartmentClearance Officer, Department of theTreasury, Room 2110, 1425 New YorkAvenue, NW., Washington, DC 20220.

U.S. Customs Service (CUS)OMB Number: 1515–0069.Form Number: CF 3461 and CF 3461

Alternate.Type of Review: Reinstatement.Title: Immediate Delivery

Application.Description: Customs Forms 3461 and

3461 Alternate are used by importers toprovide Customs with the necessaryinformation in order to examine andrelease imported cargo.


Estimated Number of Respondents/Recordkeepers: 6,100.

Estimated Burden Hours PerRespondent/Recordkeeper: 30 minutes.

Frequency of Response: On occasion.Estimated Total Reporting/

Recordkeeping Burden: 838,158 hours.OMB Number: 1515–0124.Form Number: None.Type of Review: Extension.Title: Disclosure of Information on

Inward and Outward Vessel Manifest.Description: This information is used

to grant a domestic importer’s,consignee’s, and exporter’s request forconfidentiality of its identity frompublic disclosure.

Respondents: Business or other for-profit, Individuals or households.

Estimated Number of Respondents:578.

Estimated Burden Hours PerRespondent: 30 minutes.

Frequency of Response: On occasion,Annually.

Estimated Total Reporting Burden:289 hours.

Clearance Officer: J. Edgar Nichols,(202) 927–1426, U.S. Customs Service,Printing and Records ManagementBranch, Room 6216, 1301 ConstitutionAvenue, N.W., Washington, DC 20229.


Bureau of Alcohol, Tobacco andFirearms


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,Public Law 104–13 (44 U.S.C.3506(c)(2)(A)). Currently, the Bureau ofAlcohol, Tobacco and Firearms withinthe Department of the Treasury issoliciting comments concerning theBeer for Exportation.DATES: Written comments should bereceived on or before October 1, 1996 tobe assured of consideration.ADDRESSES: Direct all written commentsto Bureau of Alcohol, Tobacco and


Firearms, Linda Barnes, 650Massachusetts Avenue, NW.,Washington, DC 20226, (202) 927–8930.

FOR FURTHER INFORMATION CONTACT:Requests for additional information orcopies of the form(s) and instructionsshould be directed to Marjorie Ruhf,Wine, Beer and Spirits RegulationsBranch, 650 Massachusetts Avenue,NW., Washington, DC 20226, (202) 927–8202.


Title: Beer for Exportation.OMB Number: 1512–0096.Form Number: ATF F 5130.12.Abstract: ATF collects this

information in order to monitor exportactivities by brewers. Certification as totype and quantity of beer exported isanalyzed by brewers’ operational reportsto ensure compliance with tax lawsenforced by ATF. The ATF DistrictDirector is authorized to direct aproprietor to retain records for anadditional 3 years where it is deemednecessary.

Current Actions: There are no changesto this information collection and it isbeing submitted for extension purposesonly.

Type of Review: Extension.Affected Public: Business or other for-

profit.Estimated Number of Respondents:

392.Estimated Time Per Respondent: 1

hour and 39 minutes.Estimated Total Annual Burden

Hours: 38,808.

Request for Comments

Comments submitted in response tothis notice will be summarized and/orincluded in the request for OMBapproval. All comments will become amatter of public record. Comments areinvited on: (a) Whether the collection ofinformation is necessary for the properperformance of the functions of theagency, including whether theinformation shall have practical utility;(b) the accuracy of the agency’s estimateof the burden of the collection ofinformation; (c) ways to enhance thequality, utility, and clarity of theinformation to be collected; and (d)ways to minimize the burden of thecollection of information onrespondents, including through the useof automated collection techniques orother forms of information technology.Also, ATF requests informationregarding any monetary expenses youmay incur while completing this form.

Dated: July 26, 1996.John W. Magaw,Director.[FR Doc. 96–19680 Filed 8–1–96; 8:45 am]BILLING CODE 4810–31–P



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,Public Law 104–13 (44 U.S.C.3506(c)(2)(A)). Currently, the Bureau ofAlcohol, Tobacco and Firearms withinthe Department of the Treasury issoliciting comments concerning theExplosives Delivery Record.DATES: Written comments should bereceived on or before October 1, 1996 tobe assured of consideration.ADDRESSES: Direct all written commentsto Bureau of Alcohol, Tobacco andFirearms, Linda Barnes, 650Massachusetts Avenue, NW.,Washington, DC 20226, (202) 927–8930.FOR FURTHER INFORMATION CONTACT:Requests for additional information orcopies of the form(s) and instructionsshould be directed to Dottie Morales,Firearms and Explosives OperationsBranch, 650 Massachusetts Avenue,NW., Washington, DC 20226, (202) 927–8576.SUPPLEMENTARY INFORMATION:

Title: Explosives Delivery Record.OMB Number: 1512–0133.Form Number: ATF F 5400.8.Abstract: This information collection

activity is used to verify distributors’compliance with Federal law andregulations, thereby documenting theflow of explosives in commerce and asa tracing tool to prevent misuse andtraffic in stolen explosives. The recordsretention period for this informationcollection is 5 years.




25,000.Estimated Time Per Respondent: 6

minutes.

Estimated Total Annual BurdenHours: 2,5000.

Request for CommentsComments submitted in response to

this notice will be summarized and/orincluded in the request for OMBapproval. All comments will become amatter of public record. Comments areinvited on: (a) Whether the collection ofinformation is necessary for the properperformance of the functions of theagency, including whether theinformation shall have practical utility;(b) the accuracy of the agency’s estimateof the burden of the collection ofinformation; (c) ways to enhance thequality, utility, and clarity of theinformation to be collected; and (d)ways to minimize the burden of thecollection of information onrespondents, including through the useof automated collection techniques orother forms of information technology.Also, ATF requests informationregarding any monetary expenses youmay incur while completing this form.




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,Public Law 104–13 (44 U.S.C.3506(c)(2)(A)). Currently, the Bureau ofAlcohol, Tobacco and Firearms withinthe Department of the Treasury issoliciting comments concerning theUsual and Customary Business RecordsRelating to Wine.DATES: Written comments should bereceived on or before October 1, 1996 tobe assured of consideration.ADDRESSES: Direct all written commentsto Bureau of Alcohol, Tobacco andFirearms, Linda Barnes, 650Massachusetts Avenue, NW.,Washington, DC 20226, (202) 927–8930.FOR FURTHER INFORMATION CONTACT:Requests for additional information orcopies of the form(s) and instructionsshould be directed to Joyce Drake, Wine,


Beer and Spirits Regulations Branch,650 Massachusetts Avenue, NW.,Washington, DC 20226, (202) 927–8210.

SUPPLEMENTARY INFORMATION:Title: Usual and Customary Business

Records Relating to Wine.OMB Number: 1512–0298.Recordkeeping Requirement ID

Number: ATF REC 5120/1Abstract: Usual and customary

business records relating to wine areroutinely inspected by ATF officers toensure the payment of alcohol taxes dueto the Federal Government. The recordsretention period for this informationcollection is 3 years.




1,650.Estimated Time Per Respondent: 10

minutes.Estimated Total Annual Burden

Hours: 165 hours.

Request for CommentsComments submitted in response to

this notice will be summarized and/orincluded in the request for OMBapproval. All comments will become amatter of public record. Comments areinvited on: (a) Whether the collection ofinformation is necessary for the properperformance of the functions of theagency, including whether theinformation shall have practical utility;(b) the accuracy of the agency’s estimateof the burden of the collection ofinformation; (c) ways to enhance thequality, utility, and clarity of theinformation to be collected; and (d)ways to minimize the burden of thecollection of information onrespondents, including through the useof automated collection techniques orother forms of information technology.Also, ATF requests informationregarding any monetary expenses youmay incur while completing thisinformation collection.




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,Public Law 104–13 (44 U.S.C.3506(c)(2)(A)). Currently, the Bureau ofAlcohol, Tobacco and Firearms withinthe Department of the Treasury issoliciting comments concerning theBond for Drawback Under 26 U.S.C.5131.DATES: Written comments should bereceived on or before October 1, 1996 tobe assured of consideration.ADDRESSES: Direct all written commentsto Bureau of Alcohol, Tobacco andFirearms, Linda Barnes, 650Massachusetts Avenue, NW.,Washington, DC 20226, (202) 927–8930.FOR FURTHER INFORMATION CONTACT:Requests for additional information orcopies of the form(s) and instructionsshould be directed to Steve Simon,Wine, Beer and Spirits RegulationsBranch, 650 Massachusetts Avenue,NW., Washington, DC 20226, (202) 927–8183.


Title: Bond for Drawback Under 26U.S.C. 5131.

Form Number: ATF F 5154.3.Abstract: This bond form is required

pursuant to 26 U.S.C. 5131 from allpersons who claim, on a monthly basis,drawback of tax on distilled spirits usedin the manufacture of approved

nonbeverage products. The form is usedto establish eligibility to file drawbackclaims on a monthly basis and, whennecessary, to enforce collection ofmoney owed to the Government.

Current Actions: This is a newapplication. The bond has been requiredfor many years, but because the formrequests no information other than thatnecessary to identify the partiesinvolved and the amount of the bond, ithad not previously been considered tobe a collection of information subject toOMB review and approval.

Type of Review: New.Affected Public: Business or other for-


60.Estimated Time Per Respondent: 12

minutes.Estimated Total Annual Burden

Hours: 12 hours.

Request for Comments

Comments submitted in response tothis notice will be summarized and/orincluded in the request for OMBapproval. All comments will become amatter of public record. Comments areinvited on: (a) Whether the collection ofinformation is necessary for the properperformance of the functions of theagency, including whether theinformation shall have practical utility;(b) the accuracy of the agency’s estimateof the burden of the collection ofinformation; (c) ways to enhance thequality, utility, and clarity of theinformation to be collected; and (d)ways to minimize the burden of thecollection of information onrespondents, including through the useof automated collection techniques orother forms of information technology.Also, ATF requests informationregarding any monetary expenses youmay incur while completing this form.


This section of the FEDERAL REGISTERcontains editorial corrections of previouslypublished Presidential, Rule, Proposed Rule,and Notice documents. These corrections areprepared by the Office of the FederalRegister. Agency prepared corrections areissued as signed documents and appear inthe appropriate document categorieselsewhere in the issue.

Corrections Federal Register

40481

Vol. 61, No. 150



Food and Consumer Service


RIN 0584-AC15

National School Lunch Program,School Breakfast Program, Child andAdult Care Food Program and SummerFood Service Program for Children:Meat Alternates Used in the ChildNutrition Programs

Correction

In proposed rule document 96–16992beginning on page 35152 in the issue ofFriday, July 5, 1996, make the followingcorrections:

§ 220.8 [Corrected]

1. On page 35156, in § 220.8(g), in thetable, in the fourth column (Grades K-12), ‘‘1⁄4 cup’’ should read ‘‘1⁄2 cup’’.


2. On page 35157, in § 226.20(c)(2)and (c)(3), in the tables, insert ‘‘* * *’’after ‘‘Alternates’’.BILLING CODE 1505–01–D



15 CFR Part 679

[Docket No. 960531152-6152-01; I.D.042996B]

RIN 0648-Al18

Fisheries of the Exclusive EconomicZone Off Alaska

Correction

In rule document 96–14593,beginning on page 31228, in the issue ofWednesday, June 19, 1996, make thefollowing corrections:

1. On page 31288, in the Figure 4caption, ‘‘a. Map’’ should be centeredbeneath ‘‘Figure 4 to Part 679--HerringSavings Areas in the BSAI’’.

2. On page 31297, in TABLE 3, on theFMP SPECIES line, the numberingsequence should begin with column 3,WHOLE FISH, instead of column 2,SPECIES CODE, and the subsequentcolumns should be renumberedsequentially.

3. On page 31302, in TABLE 9, on thesecond line, in the third column,‘‘Cather-processor’’ should read‘‘Catcher-processor’’.

BILLING CODE 1505–01–D

GENERAL SERVICESADMINISTRATION

[GSA Bulletin FTR 20]

Federal Travel Regulation;Reimbursement of Higher ActualSubsistence Expenses for OfficialTravel to Oshkosh, WI

Correction

In notice document 96–16798beginning on page 34436 in the issue ofTuesday, July 2, 1996, make thefollowing correction:

On page 34437, in the first column, inthe eighth line from the top ‘‘July 26’’should read ‘‘July 27’’.BILLING CODE 1505–01–D


Fish and Wildlife Service


RIN 1018-AB49

Importation, Exportation, andTransportation of Wildlife

Correction

In rule document 96–15388 beginningon page 31850 in the issue of Friday,June 21, 1996, make the followingcorrection:


On page 31869, in the first column, inthe first line ‘‘§14.21’’ should read‘‘§14.33’’.BILLING CODE 1505–01–D

fede

ral r

egiste

r

40483

FridayAugust 2, 1996

Part II

Department ofTransportationFederal Highway Administration

23 CFR Part 655Uniform Traffic Control Devices ManualAmendments; Proposed Rule



Federal Highway Administration

23 CFR Part 655

[FHWA Docket No. 96–15]

RIN 2125–AD68

National Standards for Traffic ControlDevices; the Manual on Uniform TrafficControl Devices for Streets andHighways; Standards for Center Lineand Edge Line Markings

AGENCY: Federal HighwayAdministration (FHWA), DOT.ACTION: Notice of proposedadmendment for the Manual onUniform Traffic Control Devices(MUTCD); request for comments.

SUMMARY: The MUTCD is incorporatedby reference in 23 Code of FederalRegulations (CFR) part 655, subpart F,and recognized as the national standardfor traffic control on all public roads.Sec. 406 of the Department ofTransportation and Related AgenciesAppropriations Act, 1993, requires thatthe MUTCD include a national standardto define the roads that must havecenter line or edge line markings orboth, provided that in setting such astandard, consideration be given to thefunctional classification of roads, trafficvolumes, and the number and width oflanes. The MUTCD amendments hereinproposed are intended to improve trafficoperations and safety by providingnational standards and guidance toestablish uniform application and use ofcenter line and edge line markings onstreets and highways.DATES: Submit written, signedcomments on or before May 2, 1997.ADDRESSES: Submit written, signedcomments to FHWA Docket No. 96–15,Federal Highway Administration, Room4232, HCC–10, 400 Seventh Street, SW.,Washington, D.C. 20590. All commentsreceived will be available forexamination at the above addressbetween 8:30 a.m. and 3:30 p.m., e.t.,Monday through Friday except Federalholidays. Those desiring notifications ofreceipt of comments must include a self-addressed, stamped postcard.FOR FURTHER INFORMATION CONTACT: Mr.Ernest D. L. Huckaby, Office of HighwaySafety (HHS–10), (202) 366–9064; or Mr.Raymond W. Cuprill, Office of ChiefCounsel (HCC–20), (202) 366–0834,Federal Highway Administration, 400Seventh Street, SW., Washington, DC20590–0001. Office hours are from 7:45a.m. to 4:15 p.m., e.t., Monday throughFriday except Federal holidays.

SUPPLEMENTARY INFORMATION: TheMUTCD is approved by the FHWA asthe national standard for all streets andhighways open to public travel. TheMUTCD is available for inspection andcopying as prescribed in 49 CFR part 7,appendix D. It may be purchased for$44.00 from the Superintendent ofDocuments, U.S. Government PrintingOffice, Washington, DC 20402, stock no.050–001–00308–2. The FHWA bothreceives and initiates requests foramendments to the MUTCD. Eachrequest is assigned an identificationnumber that shows, by Roman numeral,the part of the MUTCD affected and, byArabic numeral, the order in which therequest was received. The MUTCDrequest identification number for theamendments in this rulemaking is III–73(Change) and is titled ‘‘Standards forCenter Line and Edge Line Markings.’’

This notice is being issued to providean opportunity to review and commenton the proposed amendments to theMUTCD. The FHWA will issue a finalrule after considering the commentsoffered.

Proposed AmendmentSection 406 of the Department of

Transportation and Related AgenciesAppropriations Act for FY endingSeptember 30, 1993, Pub. L. 102–388,106 Stat 1520, requires that the MUTCDinclude a standard to define the roadsthat must have center line or edge linemarkings or both, provided that insetting such a standard, considerationbe given to the functional classificationof roads, traffic volumes, and thenumber and width of lanes.

DefinitionsThe proposed amendment uses

terminology that is in compliance withthe MUTCD definitions. As included inthe Section 1A–9 of the MUTCD, theterm ‘‘roadway’’ shall be defined as:‘‘That portion of a highway improved,designed, or ordinarily used forvehicular travel, exclusive of parkingand auxiliary lanes, berms, andshoulders. In the event a highwayincludes two or more separateroadways, the term ‘roadway’ as usedherein, refers to any such roadwayseparately, but not to all such roadscollectively.’’ Center Line Marking

The FHWA proposes replacing thefifth paragraph of Section 3B–1 of the1988 version of the MUTCD with thefollowing:

Center line markings shall be placedon paved, undivided 2-way streets andhighways having the characteristics asfollows:

1. Rural arterials and collectors withroadways 18 feet or more in width and

an average daily traffic (ADT) of 1000 ormore.

2. Urban arterials and collectors withroadways 20 feet or more in width andan ADT of 2000 or more.

3. Roadways with 3 lanes or more.Center line markings should be placed

on paved, undivided 2-way streets andhighways having the followingcharacteristics:

1. Rural roadways 18 feet or more inwidth with an ADT of 500 or more.

2. Urban roadways 20 feet or more inwidth with an ADT of 1000 or more.

3. Roadways were engineering studiesindicate a need.

Center line markings may be placedon any undivided 2-way streets andhighways.

In determining whether to placecenterline markings on roadways lessthan 16 feet wide, the risk of vehicles onpavement edges or of drivers beingadversely affected by parked vehiclesmay be considered. Also when edge linemarkings are used the risk of persistentvehicle encroachment into the lane ofopposing traffic may be considered.

Edge Line Marking

The FHWA proposes replacing thesecond paragraph of Section 3B–6 withthe following:

Edge line markings shall be whiteexcept that on the left edge of eachroadway of divided streets andhighways, and 1-way roadways in thedirection of travel, they shall be yellow.

Edge line markings shall be placed onpaved streets and highways of thefollowing types or with the followingcharacteristics, except when roadwayedges are defined by curbs and/or bymarkings for parking spaces:1. Freeways,2. Expressways, and3. Rural arterials.

Edge line markings should be placedon paved streets and highways with thefollowing characteristics, except whenroadway edges are defined by curbsand/or by markings for parking spaces:1. Rural collectors 20 feet or more in

width,2. Paved streets and highways where an

engineering study indicates a need.Edge line markings may be placed on

other classes of streets and highwayswith or without center line markings.

Compliance Date

The proposed compliance date for theproposed amendments is three yearsafter the date of publication of the finalrule in the Federal Register.

When reviewing the proposedamendments, readers should considerthe additional center line marking


1 This document is available for inspection andcopying as prescribed at 49 CFR Part 7, AppendixD. A copy is in the files for FHWA Docket No. 96–15.


3 This document is available for inspection andcopying as prescribed at 49 CFR Part 7, AppendixD. A copy is in the files for FHFWA Docket No. 96–15.


standards in the MUTCD Section 3B–3,‘‘No-Passing Zone Markings’’ whichstates:

Where center line markings areinstalled, no-passing zones shall beestablished at vertical and horizontalcurves and elsewhere on two- and three-lane highways where an engineeringstudy indicates passing must beprohibited because of inadequate sightdistances or other special conditions.Specific reference is made to section11–307 UVC Revised 1968.

A no-passing zone shall be marked byeither a one direction, no-passingmarkings (no. 5, section 3A–7) or a twodirection, no-passing markings (no. 6,section 3A–7) as illustrated in figure 3–2b.

Background

Current Practice

Part III of the current MUTCD, the1988 edition, sets forth basic principlesand prescribes standards and guidelinesfor markings on all streets and highwaysopen to public travel in the UnitedStates. The primary purposes of centerline markings are to separate opposingdirections of traffic flows, and toprovide positive guidance to drivers bydefining the left limit of a driver’s fieldof safe travel and no-passing zones. Theprimary purpose of edge line markingsis to provide positive guidance bydefining the right and left limits of adriver’s field of safe travel.

Sections 3B–1 and 3B–6 of theMUTCD state the following regardingthe roadways on which center line andedge line marking, respectively, arerecommended:

In Section 3B–1:Center line markings are

recommended on paved highwaysunder the following conditions:

1. In rural districts on two-lanepavements 16 feet or more in widthwith prevailing speeds of greater than35 mph.

2. In residential or business districtson through highways where there aresignificant traffic volumes.

3. On undivided pavements of four ormore lanes.

4. At other locations where anengineering study indicates a need forthem.

In Section 3B–6:Edge line markings shall be provided

on Interstate highways, on ruralmultilane highways, and may be usedon other classes of roads.

Previous Proposal

Concurrently with the preparation ofthe 1988 edition of the MUTCD, theFHWA proposed an amendment to the

MUTCD on center line markings. Inresponse to a February 20, 1985,petition from the Center for Auto Safety,designated by FHWA as MUTCD requestIII–35 (Change) titled ‘‘Warrants forCenter Line Pavement Markings,’’ theFHWA considered establishing warrantsfor center line markings. The FHWA’sproposed amendments to the MUTCDwere made available to the public forreview and comment in FHWA DocketNo. 87–21 on January 27, 1988, aspublished at 53 FR 2233. At that timethe FHWA contended that minimumstandards should be established forcenter line markings. The FHWAreceived 200 comments in response tothe proposed amendments in FHWADocket No. 87–21. Most of thecommenters implied that: (1) The centerline and edge line markings’ standardsand guidelines contained in the MUTCDwere satisfactory, and (2) no additionalstandards were needed at that time. Atermination notice for the rulemakingwas published on January 23, 1989, at54 FR 2998. Although denying therequest for change in the terminationnotice, the FHWA stated that it wouldconsider alternative actions necessary tobetter determine standards responsive tothe motorists’ needs and to the concernsexpressed in the docket comments.

After the current 1988 edition of theMUTCD was published, a decision wasmade by the FHWA on January 6, 1988,at 53 FR 236, to postpone rulemaking onall requests for revisions to the MUTCDexcept those changes that wouldsignificantly impact safety. The FHWAannounced its intent to rewrite andreformat the MUTCD on January 10,1992, at 57 FR 1134.

Findings of Research

In Appendix G, Analysis of Need forCenterline Stripes, of the NationalCooperative Highway Research ProgramReport 214, ‘‘Design and Traffic ControlGuidelines for Low-Volume RuralRoads,’’ 1 the author, Mr. John Glennon,concludes that center line markings arejustified by a benefit-cost tradeoff forlow volume roads with ADT’s above 300vpd. Mr. Glennon cautioned, however,that the exact decision point is sensitiveto the assumed accident costs and theobtainable accident reduction.

Messrs. Richard N. Schwab andDonald G. Capelle reported on findingsand recommendations that theydeduced from FHWA research studieson roadway delineation in an articletitled ‘‘Is Delineation Needed,’’ in the

May 1980 issue of the ‘‘ITE Journal.’’ 2

They reported that center line markingscan be cost beneficial at an ADT as lowas 50 vpd, and that center line markingsshould be used on any paved roadwaysurface that will retain markings andthat carries two-way traffic.

According to Mr. Ted R. Miller in apaper, ‘‘Benefit-Cost Analysis of LaneMarking,’’ 3 contained in TransportationResearch Record 1334 published in1992, even at 500 ADT, edge lines onrural two-lane roads yield safetybenefits of $17.00 for every dollarinvested.

Present Practice

The American Traffic Safety ServicesAssociation (ATSSA) conducted asurvey of current State practices in 1993and published the results in a 1994report, ‘‘Pavement Marking Programsand Practices.’’ 4 The survey showedthat for the 794,917 miles of Stateroadway in the 42 responding States, 80percent received both center line andedge line markings, while 12 percentreceived only center line markings. The8 percent receiving neither center linenor edge line markings were unpaved orhad an ADT of 300 vpd or less in ruralareas. Either center line and edge linemarkings, or center line markings onlyare placed on all State roadways in 27,or 77 percent, of 35 responding States.Several States indicated that edge linemarkings are placed on all roadways 20feet or more in width and several saidthat edge line markings were not usedon roadways less than 16 feet in width.

The National Committee on UniformTraffic Control Devices (NC) conductedthree surveys between 1989 and 1994 tocollect information from States andmany local jurisdictions about their useof center line and edge line markings.The surveys focused on and providedinsight regarding the best practices andthe state of the practice by States andlocal governments. The surveys showedthat most States are placing center lineand edge line markings on the highwaysthat are under the State jurisdiction.Also, the city governments preferredhigher ADT limits for requiring centerline markings than did the Stategovernments.




Proposals by Others

Since 1948 the NC has served as anindependent organization providingprofessional ideas on the content of theMUTCD, which is published by theFHWA. Beginning in 1980, theresponsibilities of the NC were toinitiate, review, or comment onproposed changes to the MUTCD. Assuch, the NC had the opportunity toreview proposals and makerecommendations to the FHWA in thesame manner as any other member ofthe public. It is composed of sponsoringorganizations that have substantial andcontinuing interest in traffic control.

The NC has been drafting proposalsfor amending the next version of theMUTCD. The NC proposal for Sections3B–1 and 3B–6 contain mandatorystandards, recommended guidance, andpermissive options. The NC proposalalso includes the types of criteriarequired by the Department ofTransportation and Related AgenciesAppropriations Act, of 1993.

The proposed NC amendment to thefifth paragraph in Section 3B–1 providesfor the use of center line markings asfollows. The definition of the ‘‘traveledway’’ in the proposal is the portion ofthe roadway for the movement ofvehicles, exclusive of shoulders, andexclusive of parking lanes which are notexcluded in the American Associationof State Highway and TransportationOfficials’ definition.

STANDARD

Center line markings shall be placedon paved, undivided streets andhighways as follows:

1. All rural arterials and collectorswith a traveled way 18 feet or more inwidth with an ADT of 1000 or greater.

2. All urban arterials and collectorswith a traveled way 20 feet or more inwidth with an ADT of 5000 or greater.

3. All two-way streets and highwayshaving three or more travel lanes.

GUIDANCE

Center line markings should be placedon paved, undivided streets andhighways as follows:

1. Urban arterials and collectors witha traveled way 20 feet or more in widthwith an ADT of 2500 or greater.


OPTION

Center line markings may be placedon other paved, undivided streets andhighways with a traveled way of 16 feetor more in width.

The proposed NC amendments inSection 3B–6 provide for the use of edgeline markings as follows:

STANDARDEdge line markings shall be placed on

all freeways, expressways, and on allrural arterials with a traveled way 20feet or more in width.

GUIDANCEEdge line markings should be placed

on paved streets and highways asfollows:

1. Rural collectors with a traveled way20 feet or more in width and where theedge of the traveled way is nototherwise delineated with curbs or otherpavement markings.


OPTIONEdge line markings may be placed on

streets and highways with or withoutcenter line markings.

The ATSSA, which is one of the NCsponsoring organizations, hadsupported an earlier and similar draft ofthe above NC proposed amendments tothe MUTCD Sections 3B–1 and 3B–6,with the following exceptions:

In Section 3B–1, for the use of centerline markings, the ATSSA recommendsthat the first standard use an ADT of 500vpd in lieu of an ADT of 1000 vpd andthat the second standard use an ADT of2000 vpd in lieu of an ADT of 5000 vpd.The ATSSA also recommends that thefirst guidance statement use 18 feet ormore in lieu of 20 feet or more for thetravel way width criteria, and an ADTof 1500 vpd in lieu of an ADT of 2500vpd. The ATSSA reasons forrecommending the lower criteriainclude current State practicesdiscussed in NCHRP Synthesis ofHighway Practice No. 138, ‘‘PavementMarkings: Materials and Application forExtended Service Life’’ 5 dated 1988,that concludes that an ADT of 300 orgreater warrants markings based onopposing traffic per day; and previouslymentioned paper, ‘‘Benefit-CostAnalysis of Lane Marking,’’ 6 containedin Transportation Research Record 1334dated 1992, that reports that pavementstriping yields benefits of $60.00 forevery dollar spent.

In Section 3B–6, for the use of edgeline markings, the ATSSA recommends

adding the following as a guidancestatement: ‘‘Pavement edge linemarkings should be used where there isno ambient light, minimum sightdistance, or the presence of other roadhazards such as soft shoulder, steepdrop-offs, or unprotected long slopes.’’

Discussion of Amendments

A review of above-mentioned researchand the NC and ATSSA surveys ofcurrent State and local governmentpractices showed that center line andedge line markings are beneficial andthat most States currently use themextensively on their roadways.

The FHWA proposed amendments tothe MUTCD contain national standardsand guidance for determining the streetsand highways on which placement ofcenter line markings and edge linemarkings are both required orrecommended. The criteria in thesestandards and guidance provide for auniform application on roadways whileconsidering the flexibility needed byStates and other jurisdictions inapplying limited resources for improvedsafety. The proposed amendments alsoreflect current acceptable practice sincemany States are currently providing therequired center line and edge linemarkings or better at their owndiscretion.

Rulemaking Analyses and Notices

Executive Order 12866 (RegulatoryPlanning and Review) and DOTRegulatory Policies and Procedures

The FHWA has determined that thisaction is not a significant regulatoryaction within the meaning of ExecutiveOrder 12866 or significant within themeaning of Department ofTransportation regulatory policies andprocedures. It is anticipated that theeconomic impact of this rulemakingwould be minimal. The proposedMUTCD changes in this notice containadditional guidance and requirementsfor the application of center line andedge line markings on roadways. TheFHWA expects that applicationuniformity will be improved at littleadditional expense to the publicagencies or the motoring public.Therefore, a full regulatory evaluation isnot required.

Regulatory Flexibility Act

In compliance with the RegulatoryFlexibility Act (Pub. L. 96–354, 5 U.S.C.601–612), the FHWA has evaluated theeffects of this proposed action on smallentities, including small governments.This notice of proposed rulemakingadds some alternative traffic controldevices and only a very limited number


of new or changed requirements. Mostof the proposed changes are expandedguidance and clarification information.Based on this evaluation, the FHWAhereby certifies that this action wouldnot have a significant economic impacton a substantial number of smallentities.

Executive Order 12612 (FederalismAssessment)

This action has been analyzed inaccordance with the principles andcriteria contained in Executive Order12612, and it has been determined thatthis action would not have sufficientfederalism implications to warrant thepreparation of a federalism assessment.The MUTCD is incorporated byreference in 23 CFR part 655, subpart F,which requires that changes to thenational standards issued by the FHWAshall be adopted by the States or otherFederal agencies within two years ofissuance. This proposed amendment isin keeping with the Secretary ofTransportation’s authority under 23U.S.C. 109(d) and 315 to promulgate

uniform guidelines to promote the safeand efficient use of the highway.

Executive Order 12372(Intergovernmental Review)

These proposed amendments are inkeeping with the Secretary ofTransportation’s authority under 23U.S.C. 109(d), 315, and 402(a) topromulgate uniform guidelines topromote the safe and efficient use of thehighway. To the extent that theseamendments override any existing Staterequirements regarding traffic controldevices, they do so in the interests ofnational uniformity.


This action does not contain acollection of information requirementfor purposes of the PaperworkReduction Act of 1995, 44 U.S.C. 3501et seq. National Environmental PolicyAct

The agency has analyzed this actionfor the purpose of the NationalEnvironmental Policy Act of 1969 (42U.S.C. 4321 et seq.) and has determined

that this action would not have anyeffect on the quality of the environment.

Regulation Identification Number

A regulation identification number(RIN) is assigned to each regulatoryaction listed in the Unified Agenda ofFederal Regulations. The RegulatoryInformation Service Center publishesthe Unified Agenda in April andOctober of each year. The RIN numbercontained in the heading of thisdocument can be used to cross referencethis action with the Unified Agenda.


Design standards, Grant programs—transportation, Highways and roads,Incorporation by reference, Signs,Traffic regulations.(23 U.S.C. 109(d), 114(a), 315, and 402(a); 23CFR 1.32, 655.601, 655.602, 655.603; 49 CFR1.48)

Issued on: July 24, 1996.Rodney E. Slater,Federal Highway Administrator.[FR Doc. 96–19721 Filed 8–1–96; 8:45 am]BILLING CODE 4910–22–P

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Part III

Federal DepositInsuranceCorporationGeneral Counsel’s Opinion No. 8; StoredValue Cards and Other ElectronicPayment Systems; Notices


1 While most stored value card systems are ‘‘offline’’, we understand that there are ‘‘on line’’ storedvalue card systems (i.e., the primary record of thebalance of funds available to the consumer is notmaintained on the card itself, but at the depositoryinstitution or a central data facility). Such cards aresimilar to debit cards except that the cardholderspecifically designates the amount of money thatmay be accessed through the card and once sodesignated, such funds may only be accessedthrough the card. So far as we are aware, thesystems of this type are not currently being utilizedby depository institutions.

In its proposed amendment to Regulation E, 61FR 19,696 (May 2, 1996), the Board of Governorsof the Federal Reserve System has distinguishedbetween ‘‘off-line accountable’’, ‘‘off-lineunaccountable’’, and ‘‘on-line’’ stored value systemsin determining whether the regulation applies tovarious types of stored value systems. This opiniondoes not use these distinctions. This is not intendedas a criticism or rejection of the Board’sclassification system. Rather, it is indicative of the

fact that these particular distinctions are notnecessarily germane as to whether and under whatcircumstances the funds underlying a stored valuecard are ‘‘deposits’’ under the Federal DepositInsurance Act (FDIA).

2 The use of the phrase ‘‘load value onto a card’’,‘‘electronic value’’, or any similar terms used in thisopinion, is not meant to imply that the informationloaded on stored value cards is legal tender oranything similar to legal tender. See 12 U.S.C. 5103.Rather, as discussed in the text below, suchinformation is more in the nature of a right to bepaid a sum of money.

3 The classification of stored value systemsdescribed below is not intended to encompass allof the possible ways that stored value card systemsmay be structured. Rather, this classification systemrepresents a mechanism to generalize thecircumstances under which the funds underlyingstored value cards may or may not be considereddeposits within the meaning of the FDIA.

4 Such a system would be similar to debit cardsystems, except that, unlike a debit card theinformation or value is on the card itself. The staffis not aware of any such system currently indevelopment. It is our understanding, however, thatsuch a system could be developed.


General Counsel’s Opinion No. 8;Stored Value Cards

AGENCY: Federal Deposit InsuranceCorporation (FDIC or Corporation).ACTION: Notice of FDIC GeneralCounsel’s Opinion No. 8.

SUMMARY: The FDIC has receivedinquiries on whether and under whatcircumstances funds underlying storedvalue cards may be considered depositsunder the Federal Deposit InsuranceAct. This General Counsel Opinion setsforth the Legal Division’s conclusionson this issue.FOR FURTHER INFORMATION CONTACT:Marc J. Goldstrom, Counsel, LegalDivision, (202) 898–8807, FederalDeposit Insurance Corporation, 550 17thStreet, NW., Washington, DC 20429.

Text of General Counsel’s Opinion

General Counsel’s Opinion No. 8—Stored Value Cards

By: William F. Kroener, III, GeneralCounsel, FDIC

IntroductionInsured depository institutions are

increasingly utilizing new technology tooffer novel and innovative products tocustomers. One such product is thestored-value card. A stored value cardstores information electronically on amagnetic stripe or computer chip andcan be used to purchase goods orservices. The balance recorded on thecard is debited at a merchant’s point ofsale terminal when the consumer makesa purchase. Generally, stored valuecards contain all the informationnecessary to identify the card and itsvalue. This has enabled point of saleterminals in most systems to be ‘‘offline’’.1 In other words, it is unnecessary

to contact a depository institution ordatabase for transaction authorization.

Some stored value cards are designedto be used until their value is exhaustedand then are disposed. Other moresophisticated stored value cards may be‘‘reloadable’’. The cards may havemultiple uses, such as credit and debitfeatures, in addition to the stored valuecomponent. Also, a particular storedvalue card system may have multiplecard issuers and multiple card-acceptingmerchants. Some cards (or the storedvalue component of some cards) may beutilized by whomever may be inpossession of such card, while othersrequire a personal identification numberto use.

Consumers may typically load value 2

onto a card in a number of ways. Acustomer without a pre-existingdepositor relationship with an insuredinstitution may purchase a stored valuecard from that institution. A depositaccount holder may load value onto thecard by withdrawing from an accountthrough a teller, via an ATM, or,potentially, via a specially equippedtelephone or personal computer. Atleast one system would allow theconsumer to transfer the stored value toanother person’s card.

Typically, stored value cards aretouted as substitutes for cash.Technically, however, they are not cash,and they do not have the finality ofcash. Although it may not be apparentto the consumer, a stored value cardtransaction must typically move througha complex payment system before apayment is completed. Moreover, whatis actually stored on stored value cardsis information that, through the use ofprogrammed terminals, advises aprospective payee that rights to a sumof money can be transferred to thepayee, who in turn can exercise suchright and be paid.

In addition to the development ofstored value cards, stored value systemsare being developed for makingpayments over computer networks suchas the Internet. In such systems fundsmay be accessed using a personalcomputer, and transferred toindividuals, merchants, or companies.While this opinion addresses stored

value cards, the Legal Division believesthat in general the principles discussedherein would apply equally to storedvalue computer network paymentproducts.

Types of Stored Value Systems 3

In some systems the funds underlyingthe stored value card could remain in acustomer’s account until the value istransferred to a merchant or other thirdparty, who in turn collects the fundsfrom the customer’s bank (‘‘BankPrimary—Customer AccountSystems’’).4 In other systems, as value isdownloaded onto a card, funds arewithdrawn from a customer’s account(or paid directly by the customer) andpaid into a reserve or general liabilityaccount held at the institution to paymerchants and other payees as theymake claims for payments (‘‘BankPrimary—Reserve Systems’’).

In still other systems, the electronicvalue is created by a third party and thefunds underlying the electronic valueare ultimately held by such third party(‘‘Bank Secondary Systems’’). In suchsystems, depository institutions act asintermediaries in collecting funds fromcustomers in exchange for electronicvalue. In some Bank SecondarySystems, the electronic value isprovided to the institution to haveavailable for its customers. Ascustomers exchange funds for electronicvalue, the funds are held for a shortperiod of time and then forwarded tothe third party (‘‘Bank Secondary—Advance Systems’’). In other systems ofthis nature, the depository institutionwill exchange its own funds forelectronic value from the third partyand in turn exchange electronic valuefor funds with its customers (‘‘BankSecondary—Pre-Acquisition Systems’’).

In Bank Secondary Systems, thedepository institution may have acontingent liability to redeem theelectronic value from consumers andmerchants. As such electronic value isredeemed, the institution may in turnexchange the electronic value for fundswith the third party.


5 Whether and to what extent the funds orobligations underlying stored value cards constitute‘‘deposits’’ within the meaning of section 3(l) of theFDIA will in large part determine whether suchfunds are ‘‘insured deposits’’ under section 3(m) ofthe FDIA. An ‘‘insured deposit’’ is that portion ofa ‘‘deposit’’ that is insured. It is the ‘‘net amountdue to any depositor’’ for ‘‘deposits in an insureddepository institution’’ (after deducting offsets) lessany part thereof that is in excess of $100,000. 12U.S.C. 1813(m), 1817(i), and 1821(a). Such netamount is also determined in accordance withregulations prescribed by the FDIC. See 12 C.F.R.Part 330.

6 This opinion only addresses whether the fundsunderlying stored value cards constitute depositsunder the FDIA. Such determinations are relevantfor assessment and insurance purposes. There areother issues, not addressed by this opinion, whichare of great importance to the FDIC and which theFDIC will continue to monitor as appropriate. Suchissues include, but are not limited to, consumerdisclosure matters, systemic risk, security,electronic funds transfer matters, reserverequirements, counterfeiting, monetary policy, andmoney laundering.

7 See FDIC Staff Advisory Opinion 93–55 (August6, 1993) (funds held for one business day by anagent bank selling travelers checks on behalf of acompany issuing travelers’ checks, are deposits ofthe bank under 3(l)(3) of the FDIA, until such fundsare forwarded to the company).

Primary Legal Issue

From the FDIC’s perspective, theprimary legal issue raised by thedevelopment of stored value cardsystems is whether and to what extentthe funds or obligations underlyingstored value cards constitute‘‘deposits’’ 5 within the meaning ofsection 3(l) of the Federal DepositInsurance Act (FDIA) and are thereforeassessable and qualify for depositinsurance.6 The FDIC General Counsel’slegal opinion on this issue is containedherein. The opinion expressed herein isgeneral in nature and based upon theinformation that the FDIC staff hasgathered on stored value cards to date.No view is expressed on any specificstored value card system and thespecific facts of any such system mightcause the opinion expressed herein tochange.

Applicable Statutes

An analysis of whether fundsunderlying the value on a stored valuecard are considered to be a part of theinstitution’s assessment base andqualify for deposit insurance coveragebegins with the definition of a depositunder section 3(l) of the FDIA. Thissection provides in pertinent part that:

The term ‘‘deposit’’ means—(1) The unpaid balance of money or its

equivalent received or held by a bank orsavings association in the usual course ofbusiness and for which it has given or isobligated to give credit, either conditionallyor unconditionally, to a commercial,checking, savings, time, or thrift account, orwhich is evidenced by its certificate ofdeposit, thrift certificate, investmentcertificate, certificate of indebtedness, orother similar name, or a check or draft drawnagainst a deposit account and certified by thebank or savings association, or a letter ofcredit or a traveler’s check on which the bank

or savings association is primarily liable* * *

(2) Trust funds as defined in this Actreceived or held by such bank or savingsassociation, whether held in the trustdepartment or held or deposited in any otherdepartment of such bank or savingsassociation,

(3) Money received or held by a bank orsavings association, or the credit given formoney or its equivalent received or held bya bank or savings association, in the usualcourse of business for a special or specificpurpose, regardless of the legal relationshipthereby established, including without beinglimited to, escrow funds, funds held assecurity for an obligation due to the bank orsavings association or others (includingfunds held as dealers reserves) or forsecurities loaned by the bank or savingsassociation, funds deposited by a debtor tomeet maturing obligations, funds depositedas advance payment on subscriptions toUnited States Government securities, fundsheld for distribution or purchase ofsecurities, funds held to meet its acceptancesor letters of credit, and withheld taxes * * *

(4) Outstanding draft (including advice orauthorization to charge a bank’s or a savingsassociation’s balance in another bank orsavings association), cashier’s check, moneyorder, or other officer’s check issued in theusual course of business for any purpose,including without being limited to thoseissued in payment for services, dividends, orpurchases, and

(5) Such other obligations of a bank orsavings association as the Board of Directors,after consultation with the Comptroller of theCurrency, Director of the Office of ThriftSupervision, and the Board of Governors ofthe Federal Reserve System, shall find andprescribe by regulation to be depositliabilities by general usage * * *.12 U.S.C. 1813(l).

AnalysisFor purposes of this analysis, the most

relevant provisions of section 3(l) of theFDIA are subsections (1) and (3).Synthesizing the requirements of thesetwo subsections, in order for the fundsunderlying stored value cards toconstitute deposits under section 3(l)(1)or (3) of the FDIA, 12 U.S.C. 1813(l)(1)& (3), the funds must represent: (1) Anunpaid balance of money or itsequivalent received or held by aninstitution; (2) in the usual course ofbusiness; and (3) either (a) theinstitution must have given or beobligated to give credit to a commercial,checking, savings, time, or thriftaccount; or (b) the funds must be heldfor a special or specific purpose.

An Unpaid Balance of Money or ItsEquivalent Received or Held by anInstitution

The first requirement is that theremust be ‘‘an unpaid balance of moneyor its equivalent received or held by abank or savings association’’. In each

type of Bank Primary System describedabove, the institution will hold thefunds to pay merchants and otherpayees. Consequently, this requirementof the statute would be satisfied.

In Bank Secondary—AdvanceSystems the funds may initially bereceived by the institution but latertransferred to a third party. The issuethen arises as to whether the fact thatfunds are received and held by aninstitution, albeit for a short timeperiod, satisfies this requirement of thestatute, thereby possibly creating adeposit liability during the period forwhich the institution holds the money.

In my opinion in Bank Secondary—Advance Systems funds held by aninstitution for a time period prior totransfer would meet the statutoryrequirement of ‘‘the unpaid balance ofmoney or its equivalent received or heldby a bank or savings association’’. In theanalogous case of an institution sellingtravelers’ checks issued by others, theFDIC staff has long held the opinion thatthe proceeds from such sale are depositswhile held by the institution.7 In myview, an institution holding funds priorto transfer to a third party in a BankSecondary—Advance System isindistinguishable from theaforementioned travelers’ check case. Itis important to note, however, that theinstitution would owe the obligation tothe third party, not the holder of thecard. Thus, to the extent such fundsmay constitute a deposit, the‘‘depositor’’ would be the third party.Moreover, any deposit liability for suchfunds would be extinguished upontransfer of the funds to the third party.

In Bank Secondary—Pre-AcquisitionSystems the funds underlying the storedvalue are received or held by the thirdparty. The institution in effect advancesthese funds on behalf of its customersand later collects funds from itscustomer in exchange for electronicvalue loaded onto stored value cards.Because the funds underlying the storedvalue are held by the third party, in myview, such funds are received or held bythe third party, not the depositoryinstitution. Consequently, it appearsthat the requirement of ‘‘an unpaidbalance of money or its equivalentreceived or held by [an institution]’’would not be satisfied in BankSecondary—Pre-Acquisition Systems.

Also in some Bank SecondarySystems the institution may by contractretain a contingent liability to redeem


8 FDIC v. European American Bank & Trust Co.,576 F. Supp. 950, 957 (S.D.N.Y. 1983) (Moneycovering a CHIPS transfer has as specific a purposeas the money in the accounts listed by the statute.Just like money deposited to meet maturingobligations, money backing a CHIPS release is toinsure payment to the recipient of the release.)

9 Seattle-First Bank v. FDIC, 619 F. Supp. 1351,1360 (D.C. Okl. 1985) (monies wired by a loanparticipant to the lead bank, at the lead’s direction,for the purpose of funding a participated loan canbecome deposits within the meaning of 3(l)(3) whenthe wired funds are not drawn by the intendedborrower. The funds were received for the specialor specific purpose of funding the participatedloan).

the electronic value from consumersand merchants. This raises the issuewhether a contingent liability to redeemthe electronic value represents anunpaid balance of money or itsequivalent received or held by aninstitution. In interpreting 12 U.S.C.1813(l)(1), the Supreme Court, inaccordance with the purpose of thestatute, imposed the requirement that adeposit of money or its equivalent be‘‘hard earnings’’ that businesses andindividuals have entrusted to banks.FDIC v. Philadelphia Gear Corp., 476U.S. 426, 435 (1986). The Court heldthat a stand-by letter of credit does notfall within the meaning of section 3(l)(1)of the FDIA because this was only acontingent obligation and did notrepresent ‘‘hard earnings’’. Id. at 440.

Any contingent liability of aninstitution to redeem electronic value ina Bank Secondary System would in myview not constitute ‘‘hard earnings’’ andthus, in accordance with the Court’sholding in Philadelphia Gear, wouldnot satisfy the requirement of an unpaidbalance of money or its equivalentreceived or held by a bank or savingsassociation. In Bank Secondary Systemsthe ‘‘hard earnings’’ are ultimately heldby the third party, not the institution.

In the Usual Course of BusinessInsured depository institutions are

increasingly participating in storedvalue card systems. In light of this, theFDIC would likely view any fundsreceived or held by institutionspursuant to participation in stored valuecard systems to be in the usual courseof business.

The Institution Must Have Given or BeObligated To Give Credit to An Account

To be a deposit under section 3(l)(1)of the FDIA, 12 U.S.C. 1813(l)(1), moneyor its equivalent must not only be heldor received by an institution in theusual course of business, but must(unless another alternative condition issatisfied) be a payment for which theinstitution has given or is obligated togive credit to a commercial, checking,savings, time or thrift account. Thisrequirement would not appear to be atissue in Bank Primary—CustomerAccount Systems because the fundsremain credited to the customer’saccount until claims on such funds aremade by payees. Assuming the otheraforementioned requirements are met,the funds underlying Bank Primary—Customer Account Systems wouldappear to be deposits under section3(l)(1) of the FDIA, 12 U.S.C. 1813(l)(1).

With respect to Bank Primary—Reserve Systems and both types of BankSecondary Systems, stored value card

products appear to be structured so thatthe institution does not credit and is notobligated to credit a commercial,checking, savings, time or thrift account.As described previously, when acustomer purchases a stored value cardin a Bank Primary—Reserve Systemfunds are withdrawn from thecustomer’s account (or paid directly bythe customer) and paid into a reserve orgeneral liability account maintained bythe institution. Such accounts areroutinely created and maintained byinsured depository institutions. TheFDIC does not consider such reserve orgeneral liability accounts to be‘‘deposits’’ within the meaning ofsection 3(l)(1) of the FDIA, 12 U.S.C.1813(l)(1), because there does notappear to be an obligation to credit thefunds to a commercial, checking,savings, time, or thrift account. Inaddition, the sample agreements whichthe FDIC staff has reviewed clearlyindicate that the parties to a storedvalue card agreement, i.e., the insureddepository institution and the purchaserof the card, do not intend that the fundsbe credited to one of the fiveenumerated accounts.

Similarly, in Bank Secondary Systemsthe funds which consumers pay to loadvalue onto a stored value card areultimately held by the third partyoriginator of the stored value. In thesecases also it would appear that nocommercial, checking, savings, time orthrift account has been credited nor isthe institution obligated to credit suchan account.

The foregoing notwithstanding, atsome point the institution may becomeobligated to credit a payee’s depositaccount maintained at that institutionand thus create a deposit liability to thepayee. For example, after a transactionwherein the value on the card istransferred from a consumer to amerchant, and the merchant requeststhat the funds underlying the electronicvalue be credited to the merchant’saccount, the institution would appear tobe under an obligation to credit themerchant’s account; thereby, possiblycreating a deposit liability to themerchant.

If the Institution Has Not Given or Is NotObligated To Give Credit To AnAccount; The Funds Must Be Held Fora Special or Specific Purpose

If funds held by an institutionunderlying stored value cards are notdeposits under section 3(l)(1) of theFDIA, 12 U.S.C. 1813(l)(1), because theinstitution is not obligated to credit anaccount, the analysis must turn towhether such funds may be considereddeposits under section 3(l)(3) of the

FDIA, 12 U.S.C. 1813(l)(3). In order tobe considered a deposit under 3(l)(3) ofthe FDIA, the value underlying a storedvalue card must represent: (1) Money orits equivalent (or the credit given formoney or its equivalent) received orheld by an institution; (2) in the usualcourse of business; and (3) for a specialor specific purpose.

The first two requirements areessentially the same as under section3(l)(1) of the FDIA as discussed above.While section 3(l)(3) of the FDIA, 12U.S.C. 1813(l)(3), does not require thatthe institution be obligated to credit thefunds to an account, it does require thatfunds be held ‘‘for a special or specificpurpose’’ in order to qualify as adeposit.

Congress included in the statute,without limitation, the followingexamples of a bank or savingsassociation holding funds for a specialor specific purpose: ‘‘escrow funds,funds held as security for an obligationdue to the bank or savings associationor others (including funds held asdealers reserves) or for securities loanedby the bank or savings association,funds deposited by a debtor to meetmaturing obligations, funds deposited asadvance payment on subscriptions toUnited States Government securities,funds held for distribution or purchaseof securities, funds held to meet itsacceptances or letters of credit, andwithheld taxes * * * .’’ 12 U.S.C.1813(l)(3).

While Congress included in section3(l)(3) a number of special or specificpurposes for which money may be heldto qualify as a deposit, the clause‘‘without being limited to’’ means thatthe section does not state each andevery such purpose. Courts have heldthat money covering a Clearing HouseInterpayment System (CHIPS) release 8

and monies wired by a loan participantto the lead bank for the purpose offunding a participated loan 9, eachconstitute funds held for a special orspecific purpose within the meaning ofthis statute. The case law seems tosuggest that to qualify as a depositunder 3(l)(3) the purpose for which the


10 See Seattle-First Bank v. FDIC, 619 F. Supp. at1360; FDIC v. European American Bank & TrustCo., 576 F. Supp. at 957.

11 The funds underlying a stored value card in aBank Primary—Reserve System could, in our view,be considered to be held for a special or specificpurpose within the meaning of section 3(l)(3) of theFDIA, 12 U.S.C. 1813(l)(3), if the system isstructured so that the ultimate payee can only beone pre-determined specific party. For example, ifan institution were to issue a stored value cardsolely for the purchase of long-distance telephoneservices from a specific company, such funds couldbe considered to be held for a special or specificpurpose.

12 See Seattle-First Bank v. FDIC, 619 F. Supp. at1360; FDIC v. European American Bank & TrustCo., 576 F. Supp. at 957.

13 A stored value card is not in writing, not signedby the maker, and does not contain an‘‘unconditional promise to pay a sum certain inmoney and no other promise, order, obligation orpower’’. See U.C.C., Section 3–104(1).

14 In my view the same conclusion would applywith respect to analogizing stored value cards totravelers’ checks on which the institution isprimarily liable, which are deposits under section3(l)(1) of the FDIA, 12 U.S.C. 1813(l)(1).

money is being held must at least be asspecific as the purposes listed in thestatute. See FDIC v. European AmericanBank & Trust Co., 576 F. Supp. 950, 957(S.D.N.Y. 1983); Seattle-First Bank v.FDIC, 619 F. Supp. 1351, 1360 (D.C.Okl. 1985).

When an institution holds funds inexchange for electronic value embeddedin a stored value card, the relevantquestions are: (1) What is the purposefor which these funds are being held?and (2) Is that purpose at least asspecific as the purposes enumerated inthe statute?

With respect to Bank Primary—Reserve Systems funds appear to beheld by an institution to meet itsobligations to payees as they makeclaims on such funds pursuant togeneral or miscellaneous and unrelatedtransactions undertaken within thestored value card system. It is myopinion that this purpose isfundamentally different from theexamples listed in section 3(l)(3) of theFDIA, 12 U.S.C. 1813(l)(3). For example,an escrow account will typically have avery specific purpose associated with aparticular transaction (or two or morerelated transactions). Similarly, fundsunderlying a letter of credit and fundsheld for purchasing securities are linkedto a specific transaction or transactions.

The cases holding that certain fundsare deposits within the meaning ofsection 3(l)(3) of the FDIA, 12 U.S.C.1813(l)(3), also involve funds held withrespect to a specific transaction. Forexample, in Seattle-First Bank the courtheld that monies wired by a loanparticipant to the lead bank at the leadbank’s direction for the purpose offunding a participated loan were moniesreceived for the special or specificpurpose of funding the loan. 619 F.Supp. at 1360. In that case, as in theexamples contained within section3(l)(3) of the FDIA, 12 U.S.C. 1813(l)(3),the funds held are for a purposeassociated with a particular transactionor two or more related transactions.

Conversely, a customer who transfersfunds to an institution in exchange forelectronic value may engage in any of anumber of unrelated transactions.Indeed, when a customer has electronicvalue loaded onto a card he may haveno idea as to what transactions he willuse the card to engage in, nor whom thetransferees may be. Thus, unlike theexamples listed in the statute, fundsheld by an institution to redeemelectronic value could be associatedwith general or miscellaneous unrelatedtransactions. Consequently, aninstitution holding funds to meetobligations to transferees in a BankPrimary—Reserve System does not

appear to be as specific a purpose as theexamples in the statute and in the casesfinding deposit liabilities under section3(l)(3) of the FDIA.10 Therefore, in myview such funds would not be held fora special or specific purpose within themeaning of section 3(l)(3) of the FDIA,12 U.S.C. 1813(l)(3).11

On the other hand, in the case of BankSecondary—Advance Systems the fundsare being held or received by theinstitution in order to pay the thirdparty in consideration of the electronicvalue transferred by such third party tothe institution and ultimately itscustomer. Thus, like the examples listedin the statute and the cases findingmonies to be deposits under section3(l)(3),12 these funds are linked to aspecific transaction. Moreover, thesefunds are analogous to funds held forone business day by an agent bankselling travelers checks on behalf of acompany issuing travelers’ checks. TheFDIC staff considers such funds to bedeposits of the bank under 3(l)(3) of theFDIA until such funds are forwarded tothe company. See FDIC Staff AdvisoryOpinion 93–55, (August 6, 1993). Thus,in the case of Bank Secondary—Advance Systems, the funds being heldor received in order to pay the thirdparty may be considered held orreceived for a special or specificpurpose within the meaning of section3(l)(3) of the FDIA, 12 U.S.C. 1813(l)(3)and may therefore qualify as a depositunder such section. It is important tonote, however, that such a depositliability would be to the third party, notthe institution’s customer.

Other Subsections of the StatuteDefining Deposit—Trust Funds

Trust funds are deposits under section3(l)(2) of the FDIA, 12 U.S.C. 1813(l)(2).For purposes of the FDIA trust funds arefunds held by an insured depositoryinstitution in a fiduciary capacity,including funds held as trustee,executor, administrator, guardian, oragent. 12 U.S.C. 1813(p). The FDIC staffis not aware of stored value card

systems in which funds are held by aninstitution in a fiduciary capacity.

Other Subsections of the StatuteDefining Deposit—Certain NegotiableInstruments

Section 3(l)(4) of the FDIA, 12 U.S.C.1813(l)(4), includes within thedefinition of deposit an ‘‘outstandingdraft * * * cashier’s check, moneyorder, or other officer’s check * * *.’’Stored value obligations have beenanalogized to cashier’s checks andmoney orders. Indeed, Bank Primary—Reserve System stored value cardsoperate in much the same way thatthese instruments do. Nonetheless,unlike the payment mechanisms listedin the statute, stored value cards are notnegotiable instruments.13 Moreover,unlike a cashier’s check or money order,the institution is not drawing a checkupon itself. Rather, the institution’scustomer transfers to a payee the rightsto a sum of money being held at theinstitution and in making payment tothe payee, the institution is recognizingthat its customer has transferred thatright. See FDIC v. European AmericanBank & Trust Co., 576 F. Supp. at 957.

Notwithstanding the fact that storedvalue card obligations operate in amanner similar to cashier’s checks andmoney orders, I am of the view thatthere are differences between theseinstruments and stored value cards.Moreover, for purposes of consideringwhether a payment mechanism is adeposit within the meaning of section3(l)(4) of the FDIA, 12 U.S.C. 1813(l)(4),I believe that Congress did not intend toinclude payment mechanisms otherthan the negotiable instrumentsenumerated in the subsection. Id.14

Other Subsections of The StatuteDefining Deposit—Authority of the FDICto Promulgate a Regulation FindingThat Funds Underlying Stored ValueCards are Deposits

In addition to the statutory definitionof deposits under sections 3(l)(1)–(4) ofthe FDIA, 12 U.S.C. 1813(l)(1)–(4),section 3(l)(5) of the FDIA, 12 U.S.C.1813(l)(5), gives the Board of Directorsthe authority, after consultation with theComptroller of the Currency, Director ofthe Office of Thrift Supervision, and theBoard of Governors of the FederalReserve System, to find and prescribe by


regulation other obligations of aninsured depository institution to bedeposit liabilities by general usage. TheFDIC has not promulgated such aregulation.

SummaryIn summary, in my opinion funds

underlying Bank Primary—CustomerAccount Systems appear to be fundsheld by an institution, in the usualcourse of business, which remaincredited to the customer’s account untilthe payee makes a claim on the funds.Such funds would therefore appear tobe deposits under section 3(l)(1) of theFDIA, 12 U.S.C. 1813(l)(1).

As a general matter, funds held by aninstitution to meet obligations underBank Primary—Reserve Systems wouldappear not to be deposits under section3(l)(1) of the FDIA, 12 U.S.C. 1813(l)(1),because the funds are not credited to orobligated to be credited to a commercial,checking, time, or thrift account.

It is my further opinion that the fundsunderlying Bank Primary—ReserveSystems are not deposits under section3(l)(3) of the FDIA, 12 U.S.C. 1813(l)(3),because such funds are not held for aspecial or specific purpose. Theexamples of funds held for suchpurposes in the statute are all linked toone or more specific transactions.Conversely, the funds underlying storedvalue card transactions are notnecessarily linked to a specifictransaction.

In Bank Secondary—Pre-AcquisitionSystems the funds underlying the storedvalue are, in my view, received or heldby the third party, not the depositoryinstitution. Consequently, it appearsthat this requirement of section 3(l) (1)and (3) of the FDIA, 12 U.S.C. 1813(l)(1),(3), would not be satisfied in suchsystems.

The funds held by an institution in aBank Secondary—Advance Systemwould not create a deposit liability tothe customer because the liability isowed to the third party for whom theinstitution is temporarily holding thefunds. Such funds may create a depositliability to the third party. The funds areheld by the institution in the usualcourse of business prior to transferringsuch funds to the third party. Theparties may or may not intend that theinstitution credit an account. Even if theinstitution is not obligated to creditsuch funds to an account, and thus suchfunds would not be a deposit undersection 3(l)(1) of the FDIA, the fundsmay be deemed to be held for thespecific purpose of transferring thefunds to the third party and thus wouldbe considered a deposit under section3(l)(3) of the FDIA, 12 U.S.C. 1813(l)(3).

The fact that an institution may retaina contingent liability to redeemelectronic value from consumers andmerchants in Bank Secondary Systemsdoes not meet the requirement of‘‘money or its equivalent held by aninstitution’’ and therefore would notgive rise to a deposit liability to thecustomer under either 3(l)(1) or (3) ofthe FDIA, 12 U.S.C. 1813(l)(1), (3).

With respect to the other provisions ofsection 3(l) of the FDIA, 12 U.S.C.1813(l), the FDIC staff is not aware ofstored value card systems in whichfunds will be held as trust funds. Thus,the funds underlying stored value cardswould not be deposits under section3(l)(2) of the FDIA, 12 U.S.C. 1813(l)(2).Similarly, while stored value cards havecertain similarities to cashier’s checksand money orders, they are not draftsdrawn on the bank, nor are theynegotiable instruments. Consequently,they cannot be considered depositsunder section 3(l)(4) of the FDIA, 12U.S.C. 1813(l)(4).

Notwithstanding the question ofwhether and under what circumstancesstored value card obligations aredeposits within the meaning of section3(l)(1)–(4) of the FDIA, 12 U.S.C.1813(l)(1)–(4), section 3(l)(5) of theFDIA, 12 U.S.C. 1813(l)(5), gives theBoard of Directors the authority to findand prescribe by regulation that otherobligations of an insured depositoryinstitution are deposit liabilities bygeneral usage. The FDIC has notpromulgated such a regulation.

This General Counsel Opinion onlyaddresses the extent to which fundsunderlying stored value cards mayconstitute a deposit under 12 U.S.C.1813(l). It is not intended to address theway in which FDIC would act in its roleas receiver. In the event of aninstitution’s failure, to the extent thatany funds underlying stored value cardsare recognized as deposits, there may berecordkeeping issues and other issues asto who may be entitled to depositinsurance and in what amount. See 12C.F.R. Part 330.

Finally, the FDIC would expect thatinstitutions clearly and conspicuouslydisclose to their customers the insuredor non-insured status of their storedvalue products, as appropriate.

By order of the Board of Directors, datedat Washington, D.C., this 16th day of July,1996.Federal Deposit Insurance CorporationJerry L. Langley,Executive Secretary.[FR Doc. 96–19697 Filed 8–1–96; 8:45 am]BILLING CODE 6714–01–P


Stored Value Cards and OtherElectronic Payment Systems

AGENCY: Federal Deposit InsuranceCorporation (FDIC or Corporation).ACTION: Notice; request for comment;public hearing.

SUMMARY: The FDIC is seeking commenton whether and under whatcircumstances the FDIC should takeregulatory action with respect to findingthat the funds underlying stored valuecards or other similar electronicpayment systems are deposit liabilitiesfor purposes of the Federal DepositInsurance Act. The FDIC is also seekingcomment on types of proposed orexisting stored value card systems,similar electronic payment systems, andthe safety and soundness concernsraised by the emergence of these newtechnologies. This notice also sets forththe time and other particularsconcerning a public hearing that theFDIC will conduct on this topic.DATES: Written comments must bereceived by the FDIC on or beforeOctober 31, 1996. Requests toparticipate in the public hearing mustbe received by August 26, 1996. Eachparticipant must submit a summary ofhis or her written testimony bySeptember 3, 1996. The public hearingwill be held on September 12, 1996 andpossibly also on September 13, 1996,and other dates, depending upon thenumber of requests received toparticipate in the public hearing.ADDRESSES: Written comments, requeststo participate in the public hearing, andsummaries of testimony are to beaddressed to the Office of the ExecutiveSecretary, Federal Deposit InsuranceCorporation, 550 17th Street, N.W.,Washington, D.C. 20429. Commentsmay be hand-delivered to Room F–400,1776 F Street N.W., Washington, D.C.20429, on business days between 8:30a.m. and 5:00 p.m. (FAX number (202)898–3838; Internet address:[email protected]). Comments willbe available for inspection andphotocopying in Room 100, 801 17thStreet, N.W., Washington, D.C. 20429,between 9:00 a.m. and 5:00 p.m. onbusiness days.

Hearing location. Federal DepositInsurance Corporation, Board ofDirectors’ Room (6th Floor), 550 17thStreet N.W., Washington, D.C. 20429FOR FURTHER INFORMATION CONTACT:Sharon Powers Sivertsen, Director,Office of Policy Development, (202)898–8710; Cary Hiner, AssistantDirector, Policy Branch, Division of


1 We would also note that in its proposedamendment to Regulation E, 61 FR 19696 (May 2,1996), the Board of Governors of the FederalReserve System has distinguished between ‘‘off-lineaccountable’’, ‘‘off-line unaccountable’’, and ‘‘on-line’’ stored value systems in determining whetherthe regulation applies to various types of storedvalue systems. General Counsel Opinion No. 8 doesnot use these distinctions. This is not intended asa criticism or rejection of the Federal ReserveBoard’s classification system. Rather, it is indicativeof the fact that these particular distinctions are notnecessarily germane as to whether and under whatcircumstances the funds underlying a stored valuecard are ‘‘deposits’’ under the Federal DepositInsurance Act (FDIA).

2 Such a system would be similar to debit cardsystems, except that unlike a debit card, theinformation or value is on the card itself. The staffis not aware of any such system currently indevelopment. It is our understanding, however, thatsuch a system could be developed.

Supervision (202) 898–6814; Marc J.Goldstrom, Counsel, Legal Division,(202) 898–8807, Federal DepositInsurance Corporation, 550 17th Street,N.W., Washington, D.C., 20429.


Background

Insured depository institutions areincreasingly utilizing new technology tooffer novel and innovative products tocustomers. One such product is thestored-value card. A stored value cardstores information electronically on amagnetic stripe or computer chip andcan be used to purchase goods orservices. From the FDIC’s perspective,the primary legal issue raised by thedevelopment of stored value cardsystems is whether and to what extentthe funds, or obligations, underlyingstored value cards constitute ‘‘deposits’’within the meaning of section 3(l) of theFederal Deposit Insurance Act (FDIA)and are therefore assessable and qualifyfor deposit insurance. There has been aneed for the FDIC to provide guidanceon this issue. The FDIC has providedguidance with respect to this matter inGeneral Counsel Opinion No. 8,published elsewhere in this issue of theFederal Register.

General Counsel Opinion No. 8 setsforth the Legal Division’s views onwhether and under what circumstancesthe funds underlying stored value cardsmay be considered deposits undersections 3(l)(1) through (4) of the FDIA,12 U.S.C. 1813(l)(1)–(4).Notwithstanding the question ofwhether and under what circumstancesthe funds underlying stored value cardsmeet this statutory definition of deposit,the FDIC has the authority to find andprescribe by regulation that some or allstored value card obligations of adepository institution are depositliabilities by general usage. 12 U.S.C.1813(l)(5). The FDIC has notpromulgated such a regulation and thereare no current plans to propose aregulation on this matter. However, theFDIC wishes to solicit comments fromthe public as to the policyconsiderations concerning whether itshould consider proposing such a ruleat some point in the future. This requestfor comments is independent of andwill in no way effect or undermine theanalysis or conclusions in GeneralCounsel Opinion No. 8.

In addition, General Counsel OpinionNo. 8 is based generally on systems andtechnologies that have come to theattention of the staff. The FDIC is alsosoliciting comment with respect towhether there are other types of stored

value card systems in which depositoryinstitutions are involved.

Types of Stored Value Card SystemsDiscussed in General Counsel OpinionNo. 8

General Counsel Opinion No. 8identifies four types of stored valuesystems: (1) Bank Primary—CustomerAccount Systems; (2) Bank Primary—Reserve Systems; (3) Bank Secondary—Advance Systems; and (4) BankSecondary—Pre-Acquisition Systems.These systems, as described below,represent a mechanism to generalize thecircumstances under which the fundsunderlying stored value cards may ormay not be considered deposits withinthe meaning of the FDIA.1 The FDIC issoliciting comment with respect towhether there are other types of storedvalue card systems in which depositoryinstitutions are involved.

In Bank Primary—Customer AccountSystems the funds underlying the storedvalue card could remain in a customer’saccount until the value is transferred toa merchant or other third party, who inturn collects the funds from thecustomer’s bank.2 In Bank Primary—Reserve Systems, as value isdownloaded onto a card, funds arewithdrawn from a customer’s account(or paid directly by the customer) andpaid into a reserve or general liabilityaccount held at the institution to paymerchants and other payees as theymake claims for payments.

In the two types of Bank SecondarySystems, the electronic value is createdby a third party and the fundsunderlying the electronic value areultimately held by such third party. Insuch systems, depository institutions actas intermediaries in collecting fundsfrom customers in exchange forelectronic value. In Bank Secondary—Advance Systems, the electronic valueis provided to the institution to haveavailable for its customers. As

customers exchange funds for electronicvalue, the funds are held for a shortperiod of time and then forwarded tothe third party. In Bank Secondary—Pre-Acquisition Systems, the depositoryinstitution will exchange its own fundsfor electronic value from the third partyand in turn exchange electronic valuefor funds with its customers.

In some Bank Secondary Systems, thedepository institution may have acontingent liability to redeem theelectronic value from consumers andmerchants. As such electronic value isredeemed, the institution may in turnexchange the electronic value for fundswith the third party.

Authority of the FDIC To Promulgate aRegulation Finding That FundsUnderlying Stored Value Cards areDeposits

General Counsel Opinion No. 8addresses the question of whether andunder what circumstances stored valuecard obligations are deposits within themeaning of sections 3(l) (1)–(4) of theFDIA, 12 U.S.C. 1813(l) (1)–(4). Section3(l)(5) of the FDIA, 12 U.S.C. 1813(l)(5),gives the Board of Directors theauthority, after consultation with theComptroller of the Currency, Director ofthe Office of Thrift Supervision, and theBoard of Governors of the FederalReserve System, to find and prescribe byregulation other obligations of aninsured depository institution to bedeposit liabilities by general usage.

In considering whether to promulgatesuch a regulation, the FDIC may wish toconsider a number of policy issues.Through this notice and request forcomment, and the related publichearing, the FDIC is inviting commenton any policy issues the FDIC shouldconsider in determining whether topromulgate such a regulation. Some ofthese policy issues are discussed below.This discussion is intended to highlightthe issues and does not represent thepositions of either the Board of Directorsor the staff.

While the discussion of policyconsiderations below focuses on storedvalue cards, the FDIC staff believes thatsuch policy analysis would in generalapply to a variety of electronic paymentsystem issues, including concerns raisedby Internet banking and the use ofelectronic cash. The FDIC is thereforealso inviting comment on policy issuesin connection with electronic paymentsystems.

Policy Considerations in DeterminingWhether To Promulgate a Regulation

Many industry participants are of theview that stored value cards and relatedproducts will eventually become a


significant element of the paymentsystem and stream of commerce. Bysuch reports, a significant portion of thepayment system could be representedby stored value systems. As a result ofthe potential widespread use of suchsystems, it may be that the FDIC shoulddetermine that public confidence inthese payment systems is critical to thesafety and soundness of the bankingsystem, such that deposit insurance iswarranted.

Alternatively, it may be argued thatthe development of stored valuetechnologies is in its very early stages.As such, stored value systems do notpresently pose a threat to publicconfidence or the banking system, andtherefore do not warrant depositinsurance coverage today.

Related to the public confidence issueare the expectations of depositoryinstitution customers. Consumerspresently understand that if they opena checking or savings account with aninstitution, such accounts are insuredup to applicable limits by the FDIC. Itis possible that consumers couldreasonably expect that depositinsurance protection is being obtainedwhen they obtain stored value cardsfrom institutions. The failure to providedeposit insurance in an instance whereprotection is reasonably expected by aconsumer could, in the event of failureof an issuer, result in a loss of publicconfidence in these developing paymentmechanisms.

Conversely, the staff would expect therelationship between a stored value cardcustomer and the institution to beclearly and conspicuously stated on thedisclosures and agreementsaccompanying the card. It is the staff’sunderstanding that many of the storedvalue card systems in developmentintend to clearly and conspicuouslyinform customers that the card is to betreated like cash, and that if lost orstolen, it will not be replaced. Moreover,to the extent that stored valueobligations do not otherwise constitutea deposit under sections 3(l)(1)–(4) ofthe FDIA, 12 U.S.C. 1813(l)(1)–(4), suchdisclosures and agreements shouldprovide that the card does not constitutean account or deposit with theinstitution and that the fundsunderlying the card are not insured bythe FDIC. Agreements and disclosures ofthis nature could influence consumerexpectations as to deposit insurancewith respect to stored value products.

It is also possible that consumerexpectations regarding the existence ofdeposit insurance may differ dependingupon the type of stored value cardprovided to the customer. Currently indevelopment are both disposable and

reloadable stored value cards. The staffbelieves that this distinction is in largepart irrelevant with respect to whetherthe funds underlying such cardsconstitute deposits within the meaningof sections 3(l)(1)–(4) of the FDIA, 12U.S.C. 1813(l)(1)–(4). Nonetheless, suchdistinctions may be relevant withrespect to consumer expectations andwhether the FDIC should distinguishbetween the two if it decides topromulgate a regulation with respect tostored value cards.

A consumer may be more likely tobelieve that a reloadable card gives riseto an insured deposit. We understandthat reloadable cards may containinformation about the customer andmay contain information about accountsthe customer maintains with theinstitution. The customer may berequired to provide name, address, andsocial security number to establish sucha relationship. In addition, such storedvalue cards may allow the customer totransfer funds from existing insuredaccounts to a stored value component ofthe card.

On the other hand, if a consumertransfers funds in exchange for adisposable stored value card (whichnecessarily contemplates a transfer ofvalue to an anonymous individual orentity, the only identifier being the cardserial number), then a consumer couldreasonably conclude that no depositrelationship has been established withthe institution. Indeed, the consumermay not have been required to providehis name, address, telephone number,social security number, driver’s licenseor other form of identification. After thetransfer of funds by the customer, theinstitution may have no furtherrelationship with him or her.

Another factor that may influenceconsumer expectations with respect todeposit insurance is whether the valueon the card which has not beentransferred is redeemable. If the valueon the card is not redeemable,consumers may be less likely to expectdeposit insurance associated with theproduct.

In addition to the issue of consumerexpectations, the FDIC must considerwhether insuring disposable/anonymous stored value cards isconsistent with the statutoryrequirement that no more than $100,000in insurance coverage shall be providedto any one individual or entity. 12U.S.C. 1821(a). Disposable/anonymouscards pose the possibility that aninstitution depositor, with $100,000 incovered deposits, could transfer adisposable stored value card to anotherperson in order to avoid the limit ondeposit insurance coverage. In such a

case, the FDIC could have essentiallyunlimited liability for the total amountof stored value outstanding.

Another policy consideration iswhether the FDIC should find that BankPrimary—Reserve System stored valuecards are deposits based upon theirsimilarity to cashier’s checks, moneyorders, and traveler’s checks on whichan institution is primarily liable. Asdiscussed in General Counsel OpinionNo. 8, the differences between storedvalue cards and money orders, cashier’schecks, and other drafts drawn on aninstitution, are such that they may notbe included as one of the instrumentslisted in section 3(l)(4) of the FDIA, 12U.S.C. 1813(l)(4). Similarly, inasmuchas stored value cards are not traveler’schecks on which the institution isprimarily liable, they may not comeunder this provision of section 3(l)(1) ofthe FDIA, 12 U.S.C. 1813(l)(1).Nonetheless, Bank Primary—ReserveSystem stored value cards resemblecashier’s checks and money orders. Theprimary obligation of the institutionreflected by a cashier’s check, created inexchange for cash deposited in thegeneral funds of the institution ortransferred from a checking account,bears a resemblance to the obligationwhich appears to be established bystored value cards. Based upon thesimilarities, the FDIC could, byregulation, find that Bank Primary—Reserve System stored value cardobligations are deposit liabilities.

In considering whether to promulgatea regulation, the FDIC is also concernedabout competitive equity betweendepository institution issuers and otherissuers of stored value products. Ifinstitutions pay deposit insuranceassessments on the funds held insupport of stored value, and non-banksdo not, depository institutions couldpossibly be placed at a competitivedisadvantage. If so, the question arisesas to whether this disadvantage wouldbe of such a magnitude that depositoryinstitutions would be prohibited entryinto this new market for services. On theother hand, insurability could be adesirable feature of bank issued cards,such that consumers may be willing topay a higher price for stored valueproducts that are FDIC insured.

Finally, it is our understanding that,at least at the outset, many stored valuecards will limit the amounts that may beloaded onto the cards to $100 or $200.Thus, it would appear that consumerswill not be entrusting any significant ormeaningful amount of money inexchange for the stored value card.Conversely, there is nothing preventingconsumers from obtaining many storedvalue cards. Moreover, issuers may soon


allow cards to be loaded or issued inlarger denominations. This issue may beconsidered by the FDIC in determiningwhether to find, by regulation, thatcertain stored value obligations aredeposits.

In sum, notwithstanding the questionof whether and under whatcircumstances stored value cardobligations are deposits within themeaning of section 3(l) (1)–(4) of theFDIA, 12 U.S.C. 1813(l) (1)–(4), section3(l)(5) of the FDIA, 12 U.S.C. 1813(l)(5),gives the Board of Directors theauthority to find and prescribe byregulation that other obligations of aninsured depository institution aredeposit liabilities by general usage. Inconsidering whether to promulgate sucha regulation with respect to the storedvalue cards, the FDIC must consider anumber of competing policy issues.Such policy issues include, but are notlimited to, the level of publicconfidence in these new paymentsystems, consumer expectations,statutory limits with respect to ‘‘bearer’’instruments, the similarities of storedvalue cards to other paymentmechanisms which are deposits,competitive equity with non-bankissuers of stored value products, and thelow denominations under which storedvalue cards will be issued.

Safety and Soundness Issues

The emergence of stored value cardsand other electronic payment systemsraises certain safety and soundnessconcerns for depository institutions andregulators. For example, institutionsmust take steps to ensure that the storedvalue or similar system in which theyare participating has adequatesafeguards to prevent counterfeiting orother fraudulent activities which couldharm the institution, its customers, orother participants in the system. TheFDIC is soliciting public comment onthis and other safety and soundnessissues in connection with stored valuecards and other electronic paymentsystems.

Request for Comment

The FDIC is hereby requestingcomment during a 90-day commentperiod on all aspects of this notice,including the following specific issues:

(1) General Counsel Opinion No. 8 isbased generally on systems andtechnologies that have come to theattention of the staff. Are there other

stored value systems or technologies ofwhich the staff may not be aware?

(2) Funds held by depositoryinstitutions to meet obligations arisingunder stored value card systems havebeen compared to funds held by aninstitution to meet letters of credit,which are deposits under section 3(l)(3)of the FDIA, 12 U.S.C. 1813(l)(3). Indetermining whether to promulgate aregulation, should funds held to meetobligations underlying stored valuecards be distinguished from, oranalogized to, funds held to meet lettersof credit?

(3) Similarly, stored value cards havebeen compared to money orders orcashiers’ checks drawn on aninstitution, which are considereddeposits under section 3(l)(4) of theFDIA, 12 U.S.C. 1813(l)(4). Indetermining whether to promulgate aregulation, should stored value cards bedistinguished from, or analogized to,such instruments?

(4) What are the expectations ofconsumers with respect to whetherstored value cards are insured products?To what extent should consumerexpectations be a factor in whether theFDIC finds by regulation that certainstored value products representdeposits?

(5) In determining whether topromulgate a regulation, should theFDIC distinguish between reloadableand disposable stored value cards orbetween single function and multiplefunction cards?

(6) Should the projected low dollardenominations for stored value cards beconsidered by the FDIC in determiningwhether to promulgate a regulation?

(7) What types of disclosure shouldthe FDIC require with respect to theinsured or non-insured status of theseproducts? What types of disclosurewould be most beneficial to consumers,while not overburdening depositoryinstitutions?

(8) If the funds underlying some or allstored value products issued bydepository institutions are deemed byregulation to be deposits, to what extentwould depository institutions be placedat a competitive advantage ordisadvantage with respect to otherissuers of stored value products?

(9) Should the FDIC ask Congress toamend section 3(l) of the FDIA, 12U.S.C. 1813(l) to either include orexempt stored value cards from thedefinition of deposit?

(10) What safety and soundnessconcerns are raised by the development

of stored value cards and otherelectronic payment systems?

Public Hearing

The FDIC will hold a public hearingon all aspects of this notice onSeptember 12, 1996 from 9:00 a.m. until4:30 p.m. and possibly also onSeptember 13, 1996, and other dates,depending upon the number of requestsreceived to participate in the publichearing. The hearing will be held in theFDIC’s Board of Directors’ room whichis located on the sixth floor of theFDIC’s main building (550 17th StreetNW, Washington, D.C.). At that hearingone or more members of the Board ofDirectors of the FDIC and otherrepresentatives of the FDIC will receiveoral comments from all interestedpersons, who have been scheduled inadvance to appear, on all aspects of thisnotice.

Persons wishing to participate in thehearing must send, or hand-deliver, awritten request to participate in thehearing, so that it is received no laterthan August 26, 1996, to the Office ofthe Executive Secretary, 550 17th StreetNW, Washington, DC 20429. Allrequests will be time and date stampedupon receipt. Participants will belimited to a 15 minute oral presentationand will be advised in writing of thetime scheduled for their presentation.This procedure is necessary so that thehearing officers may adjust theirschedules accordingly and so thatalternative arrangements for the hearingmay be made if more persons areexpected to attend than the Board ofDirectors’ room will accommodate. Thisdeadline will also provide sufficienttime to acknowledge receipt of thenotices and inform participants ofscheduling.

In addition, each participant mustsend, or hand-deliver, so that it isreceived no later than September 3,1996 a written summary of his or hertestimony to be given at the hearing, tothe Office of the Executive Secretary,Federal Deposit Insurance Corporation,550 17th Street NW, Washington, D.C.20429.

By order of the Board of Directors, datedat Washington, D.C., this 16th day of July,1996.Federal Deposit Insurance CorporationJerry L. Langley,Executive Secretary.[FR Doc. 96–19698 Filed 8–1–96; 8:45 am]BILLING CODE 6714–01–P

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Part IV

EnvironmentalProtection Agency5 CFR Ch. LIV40 CFR Part 3Supplemental Standards of EthicalConduct for Employees of theEnvironmental Protection Agency; FinalRule



5 CFR Chapter LIV

40 CFR Part 3

[FRL–5544–5]

RIN 3209–AA15

Supplemental Standards of EthicalConduct for Employees of theEnvironmental Protection Agency


SUMMARY: The Environmental ProtectionAgency, with the concurrence of theOffice of Government Ethics (OGE), isissuing regulations for the employees ofEPA that supplement the Standards ofEthical Conduct for Employees of theExecutive Branch (Standards) issued byOGE. This final rule is a necessarysupplement to the executive branch-wide Standards because it addressesethical issues unique to EPA. This ruleprohibits certain financial interests,including compensated outsideemployment with certain persons, andrequires prior approval to engage incertain categories of outsideemployment. The Agency is alsorevoking superseded portions of itsexisting standards of conductregulation, 40 CFR part 3, and, in theirstead, inserting cross-references to theexecutive branch-wide Standards andthis supplemental regulation, as well asto executive branch financial disclosureregulations.EFFECTIVE DATE: These regulations areeffective August 2, 1996.FOR FURTHER INFORMATION CONTACT: HaleW. Hawbecker, Office of GeneralCounsel (2379), EnvironmentalProtection Agency, 401 M Street, SW.,Washington, DC 20460, (202) 260–4550.


I. BackgroundOn August 7, 1992, the Office of

Government Ethics published theStandards of Ethical Conduct forEmployees of the Executive Branch. See57 FR 35006–35067, as corrected at 57FR 48557 and 57 FR 52583 withadditional extensions for certainexisting provisions at 59 FR 4779–4780and 60 FR 6390 - 6391. The executivebranch-wide Standards are now codifiedat 5 CFR part 2635. Effective February3, 1993, they established uniformethical conduct standards applicable toall executive branch personnel.

With the concurrence of OGE, 5 CFR2635.105 authorizes executive branch

agencies to publish agency-specificsupplemental regulations necessary toimplement their respective ethicsprograms. The EnvironmentalProtection Agency, with OGE’sconcurrence, has determined that thefollowing supplemental regulations, forcodification in new 5 CFR chapter LIV,to consist of part 6401, are necessary toimplement EPA’s ethics programsuccessfully, in light of EPA’s uniqueprograms and operations. TheEnvironmental Protection Agency isalso simultaneously revoking theprovisions of its existing standards ofconduct regulations which have alreadybeen superseded or which aresuperseded upon issuance of thissupplemental regulation and replacingthem with a new section that providesa cross reference to these supplementalregulations and to 5 CFR parts 2634 and2635.

II. Analysis of the Regulations

Section 6401.101 General

Section 6401.101 explains that theregulations apply to all EPA employeesand supplement the executive branch-wide Standards. Employees of theEnvironmental Protection Agency arealso subject to the Standards of EthicalConduct for Employees of the ExecutiveBranch at 5 CFR part 2635 and theexecutive branch financial disclosureregulations at 5 CFR part 2634.

Section 6401.102 Prohibited FinancialInterests

5 CFR 2635.403(a) authorizesagencies, by supplemental regulation, toprohibit or restrict the acquisition orholding of financial interests or classesof financial interests by agencyemployees based on the determinationthat the acquisition or holding of suchinterests would cause reasonablepersons to question the impartiality andobjectivity with which agency programsare administered. As under 5 CFR2635.802(a), this authority may be usedto prohibit compensated outsideemployment relationships.

In developing its supplementalregulation, EPA has determined that thefinancial holdings of employees inmanufacturers and others impacteddirectly by the work of three EPAprogram offices would cause reasonablepersons to question the impartiality andobjectivity with which those programoffices carry out their responsibilities.Thus, EPA restricts certain outsideemployment and financial interests ofemployees of the Office of MobileSources, the Office of PesticidePrograms, and the Office of InformationResources Management. These

restrictions will help (1) To ensurepublic confidence in the impartialityand objectivity with which these officesadminister their programs; (2) eliminateany reason for affected entities to beconcerned that information they provideto the three offices might be used forprivate gain; and (3) avoid thedisqualification of employees fromofficial matters to an extent that mightresult in the offices’ inability toadminister their programs.

Section 6401.102(a)(1) prohibitsemployees in the Office of MobileSources from having compensatedemployment relationships with orholding stocks or other financialinterests in automobile manufacturersand manufacturers of mobile sourcepollution control equipment. Most ofthose employees participate in mattersthat directly affect the production andprofitability of automobilemanufacturers and manufacturers ofmobile source pollution controlequipment.

Section 6401.102(a)(2) prohibitsemployees in the Office of PesticidePrograms from having outsideemployment with or holding stocks orother financial interests in companiesthat manufacture or provide wholesaledistribution of pesticides. This office isprimarily involved in the regulation ofthe pesticide industry. The prohibitionis not limited to employment with orother financial interests in a companythat itself engages in the manufacturingor wholesale distribution of pesticides,but extends to employment with orfinancial interests in any parentcompany of which that manufacturer ordistributor is a subsidiary. Theregulation specifies, by way ofclarification, that the prohibition doesnot extend to employment with orfinancial interests in any company orother entity simply because it engages inthe retail distribution of pesticides.

Section 6401.102(a)(3) prohibitsemployees in the Office of InformationResources Management who areinvolved in contracting for datamanagement or computer-relatedservices from having employment withor holding stocks or other financialinterests in data management, computer,or information processing firms.

As reflected in 5 CFR 2635.403,certain prohibitions on outsideemployment and financial interests arestatutory. Section 6401.102(a)(4) reflectsthe provision of the Surface MiningControl and Reclamation Act (SMCRA)at 15 U.S.C. 2603(e) which prohibits aFederal employee who performs anyfunction or duty under SMCRA fromholding any ‘‘direct or indirect’’ interestin underground or surface coal mining.


The Office of Government Ethics has noauthority to interpret SMCRA and hasconcurred in § 6401.102(a)(4) only to theextent of incorporating a reference toand information about SMCRA toprovide affected EPA employees noticeof the statutory prohibition to whichthey are subject. The Office ofGovernment Ethics’ concurrence in thisfinal rule does not indicate itsconcurrence or other participation inany language of proposed§ 6401.102(a)(4) that may appear toinvolve interpretation orimplementation of SMCRA.

Section 6401.102(a)(5) reflects thestatutory prohibition which, under theToxic Substances Control Act (TSCA) at15 U.S.C. 2603(e), applies to members ofthe Interagency Testing Committee.Committee members are prohibited fromholding stocks, bonds, or othersubstantial pecuniary interests in anyperson, including any corporation,engaged in the manufacture, processing,or distribution in commerce of anysubstance or mixture subject to any ruleor order under the Act. The regulationmakes it clear that compensated outsideemployment of any such person isencompassed by the prohibition onsubstantial pecuniary interests. For oneyear after their service on the Committeehas ceased, members are subject to anadditional statutory prohibition onaccepting employment or compensationfrom any person subject to anyrequirement of the TSCA. Because theserestrictions are imposed by a statute forwhich OGE has no interpretative orother authority, OGE’s concurrence inproposed § 6401.102(a)(5) does notextend to any language which might beviewed as an interpretation of TSCA. Itreflects only OGE’s concurrence inEPA’s determination that theseemployment and financial interestprohibitions should be reflected inEPA’s supplemental regulations toprovide notice to affected employees.

Section 6401.102(b) permits the EPADesignated Agency Ethics Official or theemployee’s Deputy Ethics Official, uponmaking the appropriate determination,to waive in writing the prohibitions in§ 6401.102 (a)(1)–(a)(3) precludingcertain outside employment foremployees in the Office of MobileSources, employees in the Office ofPesticide Programs, and employees inthe Office of Information ResourcesManagement.

Section 6401.103 Outside EmploymentThe requirement for prior written

approval is made pursuant to 5 CFR2635.803 of the Executive Branch-wideStandards. EPA has determined that inorder to effectively avoid conflicts

arising from outside employment andactivities, employees consideringcertain types of employment oractivities outside of the EPA mustobtain written approval before engagingin such employment or activities. Giventhe breadth of the Agency’sresponsibilities, requiring prior writtenapproval of certain outside employmentand activities provides a necessarycontrol to ensure that employees do notengage in outside employment oractivities in violation of applicable lawsand regulations.

Section 6401.103(a) listing the typesof outside employment for which thewritten approval of the employee’sDeputy Ethics Official is required issimilar to those found in existing 40CFR 3.508 that EPA is hereby revoking.Employment requiring advanceapproval from the employee’s DeputyEthics Official is listed in § 6401.103(a)and includes (1) consulting services; (2)the practice of a profession as definedin 5 CFR 2636.305(b)(1); (3) holdingState or local public office; (4)employment regarding subject matterthat deals in significant part with EPApolicies, programs, or operations towhich the employee is assigned or hasbeen assigned during the previous one-year period; and (5) the provision ofservices to an EPA contractor, to aholder of an EPA assistant agreement, orto a firm regulated by the EPA office inwhich the employee serves. Priorapproval is required for these activitiesbecause, by their nature, such activitiestend to raise questions under theStandards of Ethical Conduct. Section6401.103(b) prescribes the content of therequest for approval. Section6401.103(c) makes clear that section6401 is not itself authority to denypermission to engage in any outsideemployment activity; that approval foroutside employment will be grantedunless the prospective outsideemployment is likely to involve conductprohibited by statute or Federalregulations, including 5 CFR part 2635and this supplemental regulation. Toassure the integrity of the approvalprocess, § 6401.103(d) requires thatrequests for approval be updated if thereis a change in the outside duties, orservices performed, or the nature of theemployee’s business. New approval alsomust be requested when the employeetransfers to an organization within theAgency for which a different DeputyEthics Official has responsibility andunless the employee’s Deputy EthicsOfficial specifies a longer period afterfive years. Section 6401.103(e) broadlydefines ‘‘employment’’ to cover anyform of non-Federal employment or

business relationship involving theprovision of personal services, whetheror not for compensation, includingpersonal services and writing whendone under an arrangement withanother person for production orpublication of the written product. Itdoes not, however, include participationin the activities of a nonprofitcharitable, religious, professional,social, fraternal, educational,recreational, public service, or civicorganization unless such activities arefor compensation other thanreimbursement for expenses.

III. Revocation of Superseded Portionsof the EPA’s Responsibilities andConduct Regulations

This final rule revokes those portionsof EPA’s employee responsibility andconduct regulations at 40 CFR 3.100through 3.605 now superseded. Some ofthose regulations were superseded whenthe confidential financial disclosureprovisions of the Executive Branch-widefinancial disclosure regulations at 5 CFRpart 2634 took effect on October 5, 1992and many others were superseded whenthe Standards of Ethical Conduct forEmployees of the Executive Branch at 5CFR part 2635 became effective onFebruary 3, 1993. Those regulations at40 CFR 2.304 and 3.305 which reflectstatutory prohibitions on financialinterests are also superseded by thissupplemental regulation, as is EPA’srequirement at 40 CFR 3.508 for priorapproval of outside employment which,as extended by 59 FR 4779–4780 and 60FR 6390–6391, remains in effect untilno later than January 3, 1996.

Of its responsibilities and conductregulations in 40 CFR 3.100–3.508, therule at new § 3.101 retains only EPA’sregulatory conflict of interest waivers atexisting 40 CFR 3.301(b), which remainin effect under 5 CFR 2635.402(d)(1)until OGE has issued supersedingregulatory waivers under 18 U.S.C.208(b)(2). In that regard, see OGE’srecent issuances at 60 FR 44706–44709(August 29, 1995) and 60 FR 47208–47233 (September 11, 1995). This EPAresidual standards rule also replacesEPA’s revoked regulations with a cross-reference at new § 3.100 to 5 CFR parts2634, 2635, and 6401.

IV. Matters of Regulatory Procedure


In issuing this rule, EPA has adheredto the regulatory philosophy and theapplicable principles of regulation setforth in Section 1 of Executive Order12866, Regulatory Planning and Review.This regulation has not been reviewedby the Office of Management and


Budget under that Executive Order, as itdeals with agency organization,management, and personnel matters andis not, in any event, deemed‘‘significant’’ thereunder.

Paperwork Reduction ActEPA has determined that the

Paperwork Reduction Act (44 U.S.C.chapter 35) does not apply because theproposed regulation does not containany information collection requirementsthat require the approval of the Office ofManagement and Budget.

Administrative Procedure ActEPA has found that good cause exists

under 5 U.S.C. 553(b)(3) (A), (B) and(d)(3) for waiving, as unnecessary andcontrary to the public interest, thegeneral notice of proposed rulemakingand the 30-day delay in effectiveness asto these rules and revocations. Thisrulemaking is related solely to EPA’sorganization, procedure, and practice.Further, the supplemental regulationsare essentially a restatement of rulespreviously contained in EPA’s employeeresponsibilities and conductregulations, and EPA believes that it isimportant to a smooth transition fromEPA’s regulations to the executivebranch standards that these rulesbecome effective immediately.

Regulatory Flexibility ActEPA hereby certifies that this rule will

not have significant economic impact ona substantial number of small entities.This rule affects only Federal employeesand their immediate families.

List of Subjects

5 CFR Part 6401Conflict of interests, Government

employees.

40 CFR Part 3Conflict of interests, Government

employees.Dated: June 13, 1996.

Carol M. Browner,Administrator, Environmental ProtectionAgency.

Approved: July 19, 1996.Stephen D. Potts,Director, Office of Government Ethics.Q

For the reasons set forth in thepreamble, the Environmental ProtectionAgency, with the concurrence of theOffice of Government Ethics, amendstitle 5 of the Code of FederalRegulations and Title 40, chapter I, part3 of the Code of Federal Regulations asfollows:

TITLE 5—[AMENDED]1. A new chapter LIV, consisting of

part 6401, is added to title 5 of the Code

of Federal Regulations to read asfollows:

CHAPTER LIV—ENVIRONMENTALPROTECTION AGENCY

PART 6401—SUPPLEMENTALSTANDARDS OF ETHICAL CONDUCTFOR EMPLOYEES OF THEENVIRONMENTAL PROTECTIONAGENCY

Sec.6401.101 General.6401.102 Prohibited financial interests.6401.103 Prior approval for outside

employment.Authority: 5 U.S.C. 7301; 5 U.S.C. App.

(Ethics in Government Act of 1978); 42U.S.C. 203(c)(1); E.O. 12674, 54 FR 15159, 3CFR, 1989 Comp., p. 215, as modified by E.O.12731, 55 FR 42547, 3 CFR, 1990 Comp., p.306; 5 CFR 2635.105, 2635.403(a),2635.802(a), 2635.803.

§ 6401.101 General.In accordance with 5 CFR 2635.105,

the regulations in this part apply toemployees of the EnvironmentalProtection Agency and supplement theStandards of Ethical Conduct forEmployees of the Executive Branchcontained in 5 CFR part 2635.

§ 6401.102 Prohibited financial interests.(a) The following employees are

prohibited from holding the types offinancial interests described in thissection:

(1) Employees in the Office of MobileSources are prohibited from havingoutside employment with or holdingstock or any other financial interest inmanufacturers of automobiles andmobile source pollution controlequipment.

(2) Employees in the Office ofPesticide Programs are prohibited fromhaving outside employment with orholding stock or any other financialinterest in companies that manufactureor provide wholesale distribution ofpesticide products registered by theEPA. These restrictions apply tocompanies with subsidiaries in theseareas but do not include retaildistributors to the general public.

(3) Employees in the Office ofInformation Resources Managementinvolved with data managementcontracting or computer contracting areprohibited from having outsideemployment with or holding stock orany other financial interest in datamanagement, computer, or informationprocessing firms.

(4) Employees who perform functionsor duties under the Surface MiningControl and Reclamation Act (such asreviewing Environmental ImpactStatements of the Office of Surface

Mining in the Department of Interior)are prohibited by 30 U.S.C. 1211(f) fromholding direct or indirect interests inunderground or surface coal miningoperations.

(i) Implementing regulations of theOffice of Surface Mining at 30 CFR706.3 define the terms ‘‘direct financialinterest’’ and ‘‘indirect financialinterest’’ as follows:

(A) Direct financial interest meansownership or part ownership by anemployee of land, stocks, bonds,debentures, warrants, a partnership,shares, or other holding and also meansany other arrangement where theemployee may benefit from his or herholding in or salary from coal miningoperations. Direct financial interestsinclude employment, pensions, creditor,real property and other financialrelationships.

(B) Indirect financial interest meansthe same financial relationships as fordirect ownership but where theemployee reaps the benefits of suchinterests, including interests held by theemployee’s spouse, minor child or otherrelatives, including in-laws, residing inthe employee’s home. The employeewill not be deemed to have an indirectfinancial interest if there is norelationship between the employee’sfunctions or duties and the coal miningoperation in which the spouse, minorchild or other resident relative holds afinancial interest.

(ii) Violation of the restrictions in thissection is punishable by a fine of up to$2,500 or imprisonment for not morethat one year, or both.

(iii) Employees who performfunctions or duties under the SurfaceMining Control and Reclamation Act arenot prohibited thereunder from holdinginterests in excepted investment fundsas defined at 5 CFR 2634.310(c)(2)provided that such funds are widelydiversified, that is, hold no more than5% of the value of their portfolios in thesecurities of any one issuer (other thanthe United States Government) and nomore than 20% in any particulareconomic or geographic sector.

(5) Members of the InteragencyTesting Committee established undersection 4(e) of the Toxic SubstancesControl Act (15 U.S.C. 2603(e)) areprohibited thereunder from holding anystocks or bonds, or having anysubstantial pecuniary interest, in anyperson engaged in the manufacture,processing, or distribution in commerceof any substance or mixture subject toany requirement of the Act or any ruleor order issued under the Act and, fora period of twelve months after theircommittee service has ceased, areprohibited thereunder from accepting


employment or compensation from anyperson subject to any requirement of theAct or to any rule or order issued underthe Act.

(i) The statutory prohibitions in thissection are enforceable by an action fora court order to restrain violations.

(ii) Members of the InteragencyTesting Committee are not prohibitedthereunder from holding interests inexcepted investment funds as defined at5 CFR 2634.310(c)(2) provided that suchfund are widely diversified, that is, holdno more than 5% of the value of theirportfolios in the securities of any oneissuer (other than the United StatesGovernment) and no more than 20% inany particular economic sector.

(b) The Designated Agency EthicsOfficial or the cognizant Deputy EthicsOfficial may grant a written waiver fromthe prohibitions in paragraph (a)(1)through (a)(3) of this section based on adetermination that the waiver is notinconsistent with part 2635 of this titleor otherwise prohibited by law and that,under the particular circumstances,application of the prohibition is notnecessary to avoid the appearance ofmisuse of position or loss ofimpartiality, or otherwise to ensureconfidence in the impartiality andobjectivity with which agency programsare administered. A waiver under thisparagraph may impose appropriateconditions, such as requiring executionof a written disqualification.

§ 6401.103 Prior approval for outsideemployment.

(a) Requirement for approval. Anemployee shall obtain approval from hisor her Deputy Ethics Official beforeengaging in outside employment, withor without compensation, that involves:

(1) Consulting services;(2) The practice of a profession as

defined in 5 CFR 2636.305(b)(1);(3) Holding State or local public

office;(4) Subject matter that deals in

significant part with the policies,programs or operations of EPA or anymatter to which the employee presentlyis assigned or to which the employeehas been assigned during the previousone-year period; or

(5) The provision of services to or for:(i) An EPA contractor or

subcontractor;(ii) The holder of an EPA assistance

agreement or subagreement; or(iii) A firm regulated by the EPA

office or Region in which the employeeserves.

(b) Form and content of request. Theemployee’s request for approval ofoutside employment shall be submittedin writing to his or her Deputy Ethics

Official. The request shall be sentthrough the employee’s immediatesupervisor (for the supervisor’sinformation) and shall include:

(1) Employee’s name, title and grade;(2) Nature of the outside activity,

including a full description of theservices to be performed and theamount of compensation expected;

(3) The name and business of theperson or organization for which thework will be done (in cases of self-employment, indicate the type ofservices to be rendered and estimate thenumber of clients or customersanticipated during the next 6 months);

(4) The estimated time to be devotedto the activity;

(5) Whether the service will beperformed entirely outside of normalduty hours (if not, estimate the numberof hours of absence from work required);

(6) The employee’s statement that noofficial duty time or Governmentproperty, resources, or facilities notavailable to the general public will beused in connection with the outsideemployment;

(7) The basis for compensation (e.g.,fee, per diem, per annum, etc.);

(8) The employee’s statement that heor she has read, is familiar with, andwill abide by the restrictions describedin 5 CFR part 2635 and § 6401.102; and

(9) An identification of any EPAassistance agreements or contracts heldby a person to or for whom serviceswould be provided.

(c) Standard for approval. Approvalshall be granted only upon adetermination that the outsideemployment is not expected to involveconduct prohibited by statute or Federalregulation, including 5 CFR part 2635and § 6401.102. The decision must be inwriting.

(d) Keeping the record up-to-date. Ifthere is a change in the nature or scopeof the duties or services performed orthe nature of the employee’s business,the employee must submit a revisedrequest for approval. Where anemployee transfers to an organizationfor which a different Deputy EthicsOfficial has responsibility, the employeemust obtain approval from the newDeputy Ethics Official. In addition, eachapproved request is valid only for fiveyears unless the employee’s DeputyEthics Official specifies a longer timeperiod.

(e) Definition of employment. Forpurposes of this section, ‘‘employment’’means any form of non-Federalemployment, business relationship, oractivity involving the provision ofpersonal services by the employee,whether or not for compensation. Itincludes but is not limited to personal

services as an officer, director,employee, agent, attorney, consultant,contractor, general partner, trustee,teacher, or speaker. It includes writingwhen done under an arrangement withanother person for production orpublication of the written product. Itdoes not, however, include participationin the activities of nonprofit charitable,religious, professional, social, fraternal,educational, recreational, public service,or civic organizations, unless suchactivities are for compensation otherthan reimbursement for expenses.

TITLE 40—PROTECTION OFENVIRONMENT

CHAPTER I—ENVIRONMENTALPROTECTION AGENCY

Part 3 of 40 CFR chapter I is revisedto read as follows:

PART 3—EMPLOYEERESPONSIBILITIES AND CONDUCT

Sec.3.100 Cross-reference to employee ethical

conduct standards and financialdisclosure regulations.

3.101 Waiver of certain financial interests.Authority: 5 U.S.C. 7301 and 18 U.S.C.

208(b)(2).

§ 3.100 Cross-reference to employeeethical conduct standards and financialdisclosure regulations.

Employees of the EnvironmentalProtection Agency (EPA) should refer tothe Standards of Ethical Conduct forEmployees of the Executive Branch at 5CFR part 2635, the EPA regulations at 5CFR part 6401 that supplement thosestandards, and the Executive Branchfinancial disclosure regulations at 5 CFRpart 2634.

§ 3.101 Waiver of certain financialinterests.

(a) The prohibition of 18 U.S.C. 208(a)may be waived by general regulation.Financial interests derived from thefollowing have been determined to betoo remote or too inconsequential toaffect the integrity of employee’sservices, and employees may participatein matters affecting them:

(1) Mutual funds (including tax-exempt bond funds), except those whichconcentrate their investments inparticular industries;

(2) Life insurance, variable annuity, orguaranteed investment contracts issuedby insurance companies;

(3) Deposits in a bank, savings andloan association, credit union, or similarfinancial institution;

(4) Real property used solely as thepersonal residence of an employee;

(5) Bonds or other securities issued bythe U.S. Government or its agencies.


(b) This provision will be supersededwhen the Office of Government Ethicspublishes its Executive Branch-wideexemptions and EPA will publish adocument in the Federal Registerrevoking it at that time.


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FEDERAL REGISTER PAGES AND DATES, AUGUST

40145–40288......................... 140289–40504......................... 2

CFR PARTS AFFECTED DURING AUGUST

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.

5 CFR

2634.................................40145Ch. LIV.............................40500

7 CFR

26.....................................4014551.....................................40289915...................................40290928...................................40146Proposed Rules:220...................................40481226...................................40481301.......................40354, 40361319...................................40362

9 CFR

94.....................................40292

12 CFR

26.....................................40293212...................................40293348...................................40293563...................................40293931...................................40311Proposed Rules:935...................................40364

14 CFR

39.....................................4031371 ............40147, 40315, 4031695.....................................4014897.........................40150, 40151Proposed Rules:39.....................................4015971.....................................40365

15 CFR

679...................................40481

16 CFR

1700.................................40317

21 CFR

73.....................................40317101...................................40320184...................................40317601...................................40153620...................................40153630...................................40153640...................................40153650...................................40153660...................................40153680...................................40153

22 CFR

602...................................40332

23 CFR

Proposed Rules:655...................................40484

29 CFR

Proposed Rules:1.......................................403665.......................................40366102...................................40369

30 CFR

735...................................40155937...................................40155Proposed Rules:936...................................40369

40 CFR

3.......................................40500180 ..........40337, 40338, 40340Proposed Rules:59.....................................40161300...................................40371

42 CFR

406...................................40343407...................................40343408...................................40343416...................................40343

43 CFR

4.......................................40347Proposed Rules:3600.................................403733610.................................403733620.................................40373

46 CFR

70.....................................40281108...................................40281133...................................40281168...................................40281199...................................40281

47 CFR

1.......................................4015520.....................................4034873.....................................40156Proposed Rules:20.....................................4037432.....................................4016164.....................................40161

48 CFR

Proposed Rules:7.......................................4028415.....................................4028416.....................................4028437.....................................4028446.....................................4028452.....................................40284

ii Federal Register / Vol. 61, No. 150 / Friday, August 2, 1996 / Reader Aids

50 CFR

13.....................................4048114.....................................40481285...................................40352660.......................40156, 40157679.......................40158, 40353Proposed Rules:216...................................40377679...................................40380

iiiFederal Register / Vol. 61, No. 150 / Friday, August 2, 1996 / Reader Aids

REMINDERSThe items in this list wereeditorially compiled as an aidto Federal Register users.Inclusion or exclusion fromthis list has no legalsignificance.

RULES GOING INTOEFFECT TODAY

AGRICULTUREDEPARTMENTGrain Inspection, Packersand StockyardsAdministrationFees:

Federal rice inspectionservices; published 7-3-96

ARMS CONTROL ANDDISARMAMENT AGENCYFreedom of Information Act;

implementation; published 8-2-96

DEFENSE DEPARTMENTEngineers CorpsDanger zones and restricted

areas:Chesapeake Bay off Fort

Monroe, VA, andCanaveral Harboradjacent to Navy Pier atFort Canaveral, FL;published 7-3-96

ENVIRONMENTALPROTECTION AGENCYClean Air Act:

State operating permitsprograms--Maryland; published 7-3-

96Conflict of interests; published

8-2-96Pesticides; tolerances in food,

animal feeds, and rawagricultural commodities:Bacillus thuringiensis

CryIA(b) delta-endotoxin;published 8-2-96

CP4 Enolpyruvylshikimate-3-D; published 8-2-96

Phosphinothricinacetyltransferase;published 8-2-96

HEALTH AND HUMANSERVICES DEPARTMENTFood and DrugAdministrationHuman drugs:

Antibiotic drugs--Clarithromycin granules

for oral suspension;published 7-3-96

HOUSING AND URBANDEVELOPMENTDEPARTMENTMortgage and loan insurance

program:

Single family mortgageinsurance; loss mitigationprocedures; published 7-3-96

INTERIOR DEPARTMENTIndian Affairs BureauIndian country detention

facilities and programs;published 7-2-96

INTERIOR DEPARTMENTHearings and AppealsOffice, Interior DepartmentHearings and appeals

procedures:Public land hearings and

appeals, and surface coalmining hearings andappeals; specialprocedures; published 8-2-96

PERSONNEL MANAGEMENTOFFICEPay under General Schedule:

Locality-based comparabilitypayments--Interim geographic

adjustments;termination; published7-3-96

TRANSPORTATIONDEPARTMENTCoast GuardPorts and waterways safety:

Towing vessels; navigationsafety equipmentrequirements; published 7-3-96

TRANSPORTATIONDEPARTMENTAviation economic regulations:

Technical amendments;published 7-3-96

TRANSPORTATIONDEPARTMENTFederal AviationAdministrationAirworthiness directives:

Dornier; published 6-28-96Hamilton Standard;

published 8-2-96Jetstream; published 6-28-

96

COMMENTS DUE NEXTWEEK

AGRICULTUREDEPARTMENTAgricultural MarketingServicePeanuts, domestically

produced; comments due by8-7-96; published 7-8-96

AGRICULTUREDEPARTMENTFood Safety and InspectionServiceMeat and poultry inspection:

Public Health HazardAnalysis Board; boneparticles and foreignmaterial in meat andpoultry products; reportavailability; comments dueby 8-5-96; published 7-5-96

AGRICULTUREDEPARTMENTGrain Inspection, Packersand StockyardsAdministrationFees:

Inspection services forcommodities other thanrice; comments due by 8-7-96; published 7-8-96

COMMERCE DEPARTMENTNational Oceanic andAtmospheric AdministrationFishery conservation and

management:Gulf of Alaska groundfish;

comments due by 8-6-96;published 7-26-96

Gulf of Mexico reef fish;comments due by 8-8-96;published 6-24-96

Limited access managementof Federal fisheries in andoff of Alaska; commentsdue by 8-6-96; published6-12-96

CORPORATION FORNATIONAL ANDCOMMUNITY SERVICEAgency information collection

activities:Proposed collection;

comment request;comments due by 8-9-96;published 6-10-96

ENERGY DEPARTMENTNational Environmental Policy

Act; implementation;comments due by 8-8-96;published 7-9-96

ENERGY DEPARTMENTEnergy Efficiency andRenewable Energy OfficeEnergy conservation:

State energy program;consolidation of StateEnergy ConservationProgram (SECP) andInstitutional ConservationProgram (ICP); Federalregulatory reform;comments due by 8-7-96;published 7-8-96

ENVIRONMENTALPROTECTION AGENCYAir pollutants, hazardous;

national emission standards:State programs approval

and Federal authoritiesdelegation; comments dueby 8-9-96; published 7-10-96

Air pollution; standards ofperformance for newstationary sources:

Medical waste incinerators;comments due by 8-8-96;published 6-20-96

Air programs:Outer Continental Shelf

regulations--California; comments due

by 8-8-96; published 7-9-96

Air quality implementationplans:Transportation conformity

rule; flexibility andstreamliningTransportation conformity

pilot program;participation; commentsdue by 8-8-96;published 7-9-96

Air quality implementationplans; approval andpromulgation; variousStates:Washington; comments due

by 8-8-96; published 7-9-96

Air quality implementationplans; √A√approval andpromulgation; variousStates; air quality planningpurposes; designation ofareas:Colorado; comments due by

8-8-96; published 7-9-96Clean Air Act:

Acid rain provisions--Sulfur dioxide allowance

auction and electronicallowance transfer;comments due by 8-5-96; published 6-6-96

Hazardous waste:Identification and listing--

Exclusions; comments dueby 8-9-96; published 6-25-96

Exclusions; comments dueby 8-9-96; published 6-25-96

Pesticides; tolerances in food,animal feeds, and rawagricultural commodities:Maleic anhydride-

diisobutylene copolymer,sodium salt; commentsdue by 8-9-96; published7-10-96

Polyvinylpyrrolidonebutylated polymer;comments due by 8-9-96;published 7-10-96

FEDERALCOMMUNICATIONSCOMMISSIONRadio stations; table of

assignments:Arkansas; comments due by

8-5-96; published 6-19-96California; comments due by

8-5-96; published 6-19-96Mississippi; comments due

by 8-5-96; published 6-19-96

iv Federal Register / Vol. 61, No. 150 / Friday, August 2, 1996 / Reader Aids

FEDERAL TRADECOMMISSIONTrade regulation rules:

Food retailing and gasolineindustries; games ofchance; comments due by8-6-96; published 6-7-96

INTERIOR DEPARTMENTIndian Affairs BureauIndian Gaming Regulatory Act;

implementation:Tribal revenue allocation

plans; comments due by8-6-96; published 6-7-96

Land and water:Tribal electric power utilities;


INTERIOR DEPARTMENTMinerals ManagementServiceOuter Continental Shelf; oil,

gas, and sulphur operations:Leases; drilling

requirements; commentsdue by 8-5-96; published6-5-96

Unitization; modelagreements; commentsdue by 8-5-96; published6-5-96

INTERIOR DEPARTMENTNational Park ServiceSpecial regulations:

Big Thicket NationalPreserve, TX; mooredhouseboats; commentsdue by 8-5-96; published6-5-96

INTERIOR DEPARTMENTSurface Mining Reclamationand Enforcement OfficePermanent program and

abandoned mine landreclamation plansubmissions:Virginia; comments due by

8-8-96; published 7-24-96

JUSTICE DEPARTMENTImmigration andNaturalization ServiceImmigration:

Screening requirements ofcarriers; comments dueby 8-9-96; published 6-10-96

NATIONAL LABORRELATIONS BOARDSummary judgment motions

and advisory opinions;Federal regulatory review;comments due by 8-5-96;published 7-5-96

NAVAJO AND HOPI INDIANRELOCATION OFFICEArchaeological resources

protection:Lands developed for

resettlement purposes;comments due by 8-7-96;published 7-8-96

NUCLEAR REGULATORYCOMMISSIONEnvironmental protection;

domestic licensing andrelated regulatory functions:Nuclear power plant

operating licenses;environmental review forrenewal; comments dueby 8-5-96; published 7-18-96

Fitness-for-duty programs:Requirements modifications;


STATE DEPARTMENTVisas; nonimmigrant

documentation:Visa waiver pilot program;

Argentina; comments dueby 8-7-96; published 7-8-96

TRANSPORTATIONDEPARTMENTCoast GuardDrawbridge operations:

California; comments due by8-7-96; published 7-8-96

Electrical engineering:Merchant vessels; electrical

engineering requirements;comments due by 8-5-96;published 6-4-96

TRANSPORTATIONDEPARTMENTImplementation of Equal

Access to Justice Act:

Agency proceedings;Federal regulatory review;comments due by 8-5-96;published 6-6-96

TRANSPORTATIONDEPARTMENTFederal AviationAdministrationAirworthiness directives:

Aviat Aircraft, Inc.;comments due by 8-9-96;published 6-6-96

Boeing; comments due by8-5-96; published 6-26-96

CFM International;comments due by 8-5-96;published 6-4-96

McDonnell Douglas;comments due by 8-5-96;published 6-6-96

Pratt & Whitney; commentsdue by 8-5-96; published6-4-96

Textron Lycoming;comments due by 8-6-96;published 6-7-96

Class E airspace; commentsdue by 8-5-96; published 7-3-96

TRANSPORTATIONDEPARTMENTNational Highway TrafficSafety AdministrationMotor vehicle safety

standards:Power-operatated window,

partition, and roof panelsystems; comments dueby 8-5-96; published 6-4-96

Rollover prevention;customer information--Stability label for light

vehicles; comments dueby 8-5-96; published 6-5-96

National Traffic and MotorVehicle Safety Act; feeschedule; comments due by8-8-96; published 6-24-96

TREASURY DEPARTMENTCustoms ServiceCustoms bonds:

Duty-free stores; use ofrecords generated andmaintained by warehouseproprietors and importersinstead of speciallyprepared Customs forms;comments due by 8-5-96;published 6-6-96

Merchandise; examination,sampling, and testing:

Detention procedures formerchandise undergoingextended examination;comments due by 8-5-96;published 6-5-96

TREASURY DEPARTMENT

Fiscal Service

Financial managementservices:

Depositaries and financialagents of FederalGovernment; commentsdue by 8-5-96; published6-21-96

LIST OF PUBLIC LAWS

This is a list of public billsfrom the 104th Congresswhich have become Federallaws. It may be used inconjunction with ‘‘P L U S’’(Public Laws Update Service)on 202–523–6641. The text oflaws is not published in theFederal Register but may beordered in individual pamphletform (referred to as ‘‘sliplaws’’) from theSuperintendent of Documents,U.S. Government PrintingOffice, Washington, DC 20402(phone, 202–512–2470).

H.R. 2337/P.L. 104–168

Taxpayer Bill of Rights 2 (July30, 1996; 110 Stat. 1452)

Last List July 31, 1996