issue-1996-08-23•Federal Register final rules — 1996-08-23
Federal Register final rules — 1996-08-23
issue-1996-08-23Federal Register final rules — 1996-08-23Regulation
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FR Doc. 96-21705 Terrorism List Governments Sanctions Regulations; Implementation of Section 321 of the Antiterrorism and Effective Death Penalty Act of 1996
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43462-43466]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21705]
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DEPARTMENT OF THE TREASURY
31 CFR Part 596
Terrorism List Governments Sanctions Regulations; Implementation
of Section 321 of the Antiterrorism and Effective Death Penalty Act of
1996
AGENCY: Office of Foreign Assets Control, Treasury.
ACTION: Final rule.
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SUMMARY:The Office of Foreign Assets Control of the U.S. Department of
the Treasury is issuing the Terrorism List Governments Sanctions
Regulations to implement section 321 of the Antiterrorism and Effective
Death Penalty Act of 1996.
EFFECTIVE DATE: 12:01 a.m. EDT, August 22, 1996.
FOR FURTHER INFORMATION CONTACT: Office of Foreign Assets Control,
Department of the Treasury, Washington, DC 20220; tel.: 202/622-2520.
SUPPLEMENTARY INFORMATION:
Electronic and Facsimile Availability
This document is available as an electronic file on The Federal
Bulletin Board the day of publication in the Federal Register. By
modem, dial 202/512-1387 and type ``/GO FAC,'' or call 202/512-1530 for
disk or paper copies. This file is available for downloading without
charge in WordPerfect 5.1, ASCII, and Adobe AcrobatTM readable
(*.PDF) formats. For Internet access, the address for use with the
World Wide Web (Home Page), Telnet, or FTP protocol is:
fedbbs.access.gpo.gov. The document is also accessible for downloading
in ASCII format without charge from Treasury's Electronic Library
(``TEL'') in the ``Business, Trade and Labor Mall'' of the FedWorld
bulletin board. By modem, dial 703/321-3339, and select the appropriate
self-expanding file in TEL. For Internet access, use one of the
following protocols: Telnet = fedworld.gov (192.239.93.3); World Wide
Web (Home Page) = http://www.fedworld.gov; FTP = ftp.fedworld.gov
(192.239.92.205). Additional information concerning the programs of the
Office of Foreign Assets Control is available for downloading from the
Office's Internet Home Page: http://www.ustreas.gov/treasury/services/
fac/fac.html, or in fax form through the Office's 24-hour fax-on-demand
service: call 202/622-0077 using a fax machine, fax modem, or touch
tone telephone.
Background
On April 24, 1996, President Clinton signed into law the
Antiterrorism and Effective Death Penalty Act of 1996, Public Law 104-
132, 110 Stat. 1214-1319 (the ``Act''). Section 321 of the Act makes it
a criminal offense for United States persons, except as provided in
regulations issued by the Secretary of the Treasury in consultation
with the Secretary of State, to engage in financial transactions with
the governments of countries designated under section 6(j) of the
Export Administration Act of 1979, 50 U.S.C. App. 2405, as supporting
international terrorism. United States persons who engage in such
transactions are subject to criminal penalties under title 18, United
States Code. In implementation of section 321, the Treasury Department
is issuing the Terrorism List Governments Sanctions Regulations (the
``Regulations'').
The countries currently designated under section 6(j) of the Export
Administration Act are Cuba, Iran, Iraq, Libya, North Korea, Sudan, and
Syria. The provisions of existing regulations governing Cuba, Iran,
Iraq, Libya and North Korea are continued in effect with the added
authority of section 321. A separate rule amending 31 CFR chapter V
with respect to these countries is being published simultaneously in
the Federal Register. Accordingly, Sec. 596.503 of the Regulations
provides that financial transactions of United States persons with the
governments of these five countries are governed by the separate parts
in 31 CFR chapter V imposing economic sanctions on these countries. No
substantive regulatory change is made to those parts.
Regarding the governments of countries designated under section
6(j) (``Terrorism List Governments'') that were not already subject to
economic sanctions administered by the Office of Foreign Assets Control
(at present, the governments of Sudan and Syria), the Regulations
prohibit United States persons from receiving unlicensed donations and
from engaging in financial transactions with respect to which the
United States person knows or has reasonable cause to believe that the
financial transaction poses a risk of furthering terrorist acts in the
United States.
Transactions otherwise prohibited under this part but found to be
consistent with U.S. policy are authorized by general licenses
contained in subpart E or may be authorized by a specific license
issued pursuant to the procedures described in Sec. 596.801 of subpart
H. Criminal penalties for violations of the Regulations are described
in subpart G.
The Regulations are subject to possible modification in light of
the law enforcement and administrative experience in their
implementation.
Since the Regulations involve a foreign affairs function, the
provisions of Executive Order 12866 and the Administrative Procedure
Act (5 U.S.C. 553), requiring notice of proposed rulemaking,
opportunity for public participation, and delay in effective date, are
inapplicable. Because no notice of proposed rulemaking is required for
this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not
apply.
Paperwork Reduction Act
The Regulations are being issued without prior notice and public
procedure pursuant to the Administrative Procedure Act (5 U.S.C. 553).
Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), the
collections of information contained in the Regulations have been
submitted to and approved by the Office of Management and Budget
(``OMB'') pending public comment, and have been assigned control number
1505-0161. An agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless the
collection of information displays a valid control number.
The collections of information in the Regulations are contained in
subpart F, and Sec. 596.801. This information is required by the Office
of Foreign Assets Control for licensing, compliance, and enforcement
purposes. This information will be used to determine the eligibility of
applicants for the benefits provided through specific licenses, to
determine whether persons subject to the Regulations are in compliance
with applicable requirements, and to determine whether and to what
extent enforcement action is appropriate. The likely respondents and
record keepers are individuals and business organizations.
No assurances of confidentiality are given to persons who furnish
information to OFAC unless specifically indicated in advance. It is the
policy of OFAC to protect the confidentiality of information in
appropriate cases pursuant to the exemptions from disclosure provided
under the Freedom
[[Page 43463]]
of Information Act (5 U.S.C. 552) and the Privacy Act (5 U.S.C. 552a).
Estimated total annual reporting and/or recordkeeping burden: 100
hours.
The estimated annual burden per respondent/record keeper varies
from 30 minutes to 1 hour and 30 minutes, depending on individual
circumstances, with an estimated average of 1 hour.
Estimated number of respondents and/or record keepers: 100.
Estimated annual frequency of responses: 100.
Comments are invited on: (a) whether these collections of
information are necessary for the proper performance of the functions
of the agency, including whether the information has practical utility;
(b) the accuracy of the agency's estimate of the burden of the
collections of information; (c) ways to enhance the quality, utility,
and clarity of the information to be collected; and (d) ways to
minimize the burden of the collection of information on respondents,
including through the use of automated collection techniques or other
forms of information technology.
Comments concerning the above information, the accuracy of
estimated average annual burden, and suggestions for reducing this
burden should be directed to OMB, Paperwork Reduction Project, control
number 1505-0161, Washington, DC 20503, with a copy to the Office of
Foreign Assets Control, Department of the Treasury, 1500 Pennsylvania
Ave., NW--Annex, Washington, DC 20220. Any such comments should be
submitted not later than October 22, 1996. Comments on aspects of the
Regulations other than those involving collections of information
should not be sent to OMB.
List of Subjects in 31 CFR Part 596
Administrative practice and procedure, Banking and finance, Cuba,
Fines and penalties, Iran, Iraq, Libya, North Korea, Reporting and
recordkeeping requirements, Syria, Sudan, Terrorism, Transfer of
assets.
For the reasons set forth in the preamble, 31 CFR part 596 is added
to read as follows:
PART 596--TERRORISM LIST GOVERNMENTS SANCTIONS REGULATIONS
Subpart A--Relation of This Part to Other Laws and Regulations
Sec.
596.101 Relation of this part to other laws and regulations.
Subpart B--Prohibitions
596.201 Prohibited financial transactions.
596.202 Evasions; attempts; conspiracies.
Subpart C--General Definitions
596.301 Donation.
596.302 Effective date.
596.303 Financial institution.
596.304 Financial transaction.
596.305 General license.
596.306 License.
596.307 Monetary instrument.
596.308 Person; entity.
596.309 Specific license.
596.310 Terrorism List Government.
596.311 Transaction.
596.312 United States.
596.313 United States person.
Subpart D--Interpretations
596.401 Reference to amended sections.
596.402 Effect of amendment.
596.403 Transactions incidental to a licensed transaction.
596.404 Financial transactions transferred through a bank of a
Terrorism List Government.
Subpart E--Licenses, Authorizations and Statements of Licensing Policy
596.501 Effect of license or authorization.
596.502 Exclusion from licenses and authorizations.
596.503 Financial transactions with a Terrorism List Government
otherwise subject to 31 CFR Chapter V.
596.504 Certain financial transactions with Terrorism List
Governments authorized.
Subpart F--Reports
596.601 Required records.
596.602 Reports to be furnished on demand.
596.603 Notification by financial institutions rejecting financial
transactions.
Subpart G--Penalties
596.701 Penalties.
Subpart H--Procedures
596.801 Licensing.
596.802 Decisions.
596.803 Amendment, modification, or revocation.
596.804 Rulemaking.
596.805 Delegation by the Secretary of the Treasury.
596.806 Rules governing availability of information.
Subpart I--Paperwork Reduction Act
596.901 Paperwork Reduction Act notice.
Authority: Pub. L. 104-132, 110 Stat. 1214, 1254 (18 U.S.C.
2332d).
Subpart A--Relation of This Part to Other Laws and Regulations
Sec. 596.101 Relation of this part to other laws and regulations.
(a) This part is separate from, and independent of, the other parts
of this chapter. Differing foreign policy and national security
contexts may result in differing interpretations of similar language
among the parts of this chapter. Except as otherwise authorized in this
part, no license or authorization contained in or issued pursuant to
those other parts authorizes any transaction prohibited by this part.
Except as otherwise authorized in this part, no license or
authorization contained in or issued pursuant to any other provision of
law or regulation authorizes any transaction prohibited by this part.
See Sec. 596.503.
(b) No license or authorization contained in or issued pursuant to
this part relieves the involved parties from complying with any other
applicable laws or regulations.
Subpart B--Prohibitions
Sec. 596.201 Prohibited financial transactions.
Except as authorized by regulations, orders, directives, rulings,
instructions, licenses, or otherwise, no United States person, knowing
or having reasonable cause to know that a country is designated under
section 6(j) of the Export Administration Act, 50 U.S.C. App. 2405, as
a country supporting international terrorism, shall engage in a
financial transaction with the government of that country. Countries
designated under section 6(j) of the Export Administration Act as of
the effective date of this part are listed in the following schedule.
SCHEDULE:
Cuba.
Iran.
Iraq.
Libya.
North Korea.
Sudan.
Syria.
Sec. 596.202 Evasions; attempts; conspiracies.
Any transaction for the purpose of, or which has the effect of,
evading or avoiding, or which facilitates the evasion or avoidance of,
any of the prohibitions set forth in this part, is hereby prohibited.
Any attempt to violate the prohibitions set forth in this part is
hereby prohibited. Any conspiracy formed for the purpose of engaging in
a transaction prohibited by this part is hereby prohibited.
Subpart C--General Definitions
Sec. 596.301 Donation.
The term donation means a transfer made in the form of a gift or
charitable contribution.
Sec. 596.302 Effective date.
The term effective date refers to the effective date of the
applicable prohibitions and directives contained in this part which is
12:01 a.m. EDT, August 22, 1996.
[[Page 43464]]
Sec. 596.303 Financial institution.
The term financial institution shall have the definition given that
term in 31 U.S.C. 5312(a)(2) or the regulations promulgated thereunder,
as from time to time amended.
Note: The breadth of the definition precludes its reproduction
in this section.
Sec. 596.304 Financial transaction.
The term financial transaction shall have the meaning set forth in
18 U.S.C. 1956(c)(4), as from time to time amended. As of the effective
date, this term includes:
(a) A transaction which in any way or degree affects interstate or
foreign commerce;
(1) Involving the movement of funds by wire or other means; or
(2) Involving one or more monetary instruments; or
(3) Involving the transfer of title to any real property, vehicle,
vessel, or aircraft; or
(b) A transaction involving the use of a financial institution
which is engaged in, or the activities of which affect, interstate or
foreign commerce in any way or degree.
Sec. 596.305 General license.
The term general license means any license or authorization the
terms of which are set forth in this part.
Sec. 596.306 License.
Except as otherwise specified, the term license means any license
or authorization contained in or issued pursuant to this part.
Sec. 596.307 Monetary instruments.
The term monetary instruments shall have the meaning set forth in
18 U.S.C. 1956(c)(5), as from time to time amended. As of the effective
date, this term includes coin or currency of the United States or of
any other country, travelers' checks, personal checks, bank checks, and
money orders, or investment securities or negotiable instruments, in
bearer form or otherwise in such form that title thereto passes upon
delivery.
Sec. 596.308 Person; entity.
(a) The term person means an individual or entity.
(b) The term entity means a partnership, association, corporation,
or other organization.
Sec. 596.309 Specific license.
The term specific license means any license or authorization not
set forth in this part but issued pursuant to this part.
Sec. 596.310 Terrorism List Government.
The term Terrorism List Government includes:
(a) The government of a country designated under section 6(j) of
the Export Administration Act, as well as any political subdivision,
agency, or instrumentality thereof, including the central bank of such
a country;
(b) Any entity owned or controlled by such a government.
Sec. 596.311 Transaction.
The term transaction shall have the meaning set forth in 18 U.S.C.
1956(c)(3), as from time to time amended. As of the effective date,
this term includes a purchase, sale, loan, pledge, gift, transfer,
delivery, or other disposition, and with respect to a financial
institution includes a deposit, withdrawal, transfer between accounts,
exchange of currency, loan, extension of credit, purchase or sale of
any stock, bond, certificate of deposit, or other monetary instrument,
use of a safe deposit box, or any other payment, transfer, or delivery
by, through, or to a financial institution, by whatever means effected.
596.312 United States.
The term United States means the United States, including its
territories and possessions.
Sec. 596.313 United States person.
The term United States person means any United States citizen or
national, permanent resident alien, juridical person organized under
the laws of the United States, or any person in the United States.
Subpart D--Interpretations
Sec. 596.401 Reference to amended sections.
Except as otherwise specified, reference to any section of this
part or to any regulation, ruling, order, instruction, direction, or
license issued pursuant to this part refers to the same as currently
amended.
Sec. 596.402 Effect of amendment.
Any amendment, modification, or revocation of any section of this
part or of any order, regulation, ruling, instruction, or license
issued by or under the direction of the Director of the Office of
Foreign Assets Control does not, unless otherwise specifically
provided, affect any act done or omitted to be done, or any civil or
criminal suit or proceeding commenced or pending prior to such
amendment, modification, or revocation. All penalties, forfeitures, and
liabilities under any such order, regulation, ruling, instruction, or
license continue and may be enforced as if such amendment,
modification, or revocation had not been made.
Sec. 596.403 Transactions incidental to a licensed transaction.
Any transaction ordinarily incident to a licensed transaction and
necessary to give effect thereto is also authorized.
Sec. 596.404 Financial transactions transferred through a bank of a
Terrorism List Government.
For the purposes of this part only, a financial transaction not
originated by a Terrorism List Government, but transferred to the
United States through a bank owned or controlled by a Terrorism List
Government, shall not be deemed a financial transaction with the
government of a country supporting international terrorism pursuant to
Sec. 596.201.
Subpart E--Licenses, Authorizations and Statements of Licensing
Policy
Sec. 596.501 Effect of license or authorization.
(a) No license or other authorization contained in this part, or
otherwise issued by or under the direction of the Director of the
Office of Foreign Assets Control, authorizes or validates any
transaction effected prior to the issuance of the license, unless
specifically provided in such license or other authorization.
(b) No regulation, ruling, instruction, or license authorizes a
transaction prohibited under this part unless the regulation, ruling,
instruction, or license is issued by the Office of Foreign Assets
Control and specifically refers to a part in 31 CFR Chapter V. No
regulation, ruling, instruction, or license referring to this part
authorizes any transactions prohibited by any provision of this chapter
unless the regulation, ruling, instruction or license specifically
refers to such provision.
(c) Any regulation, ruling, instruction or license authorizing any
transaction otherwise prohibited under this part has the effect of
removing a prohibition or prohibitions contained in this part from the
transaction, but only to the extent specifically stated by its terms.
Unless the regulation, ruling, instruction or license otherwise
specifies, such an authorization does not create any right, duty,
obligation, claim, or interest in, or with respect to, any property
which would not otherwise exist under ordinary principles of law.
Sec. 596.502 Exclusion from licenses and authorizations.
The Director of the Office of Foreign Assets Control reserves the
right to
[[Page 43465]]
exclude any person, property, or transaction from the operation of any
license, or from the privileges therein conferred, or to restrict the
applicability thereof with respect to particular persons, property,
transactions, or classes thereof. Such action is binding upon all
persons receiving actual or constructive notice of such exclusion or
restriction.
Sec. 596.503 Financial transactions with a Terrorism List Government
otherwise subject to 31 CFR Chapter V.
United States persons are authorized to engage in financial
transactions with a Terrorism List Government that is subject to
regulations contained in parts of 31 CFR Chapter V other than this part
to the extent and subject to the conditions stated in such other parts,
or in any regulations, orders, directives, rulings, instructions, or
licenses issued pursuant thereto.
Sec. 596.504 Certain financial transactions with Terrorism List
Governments authorized.
(a) United States persons are authorized to engage in all financial
transactions with a Terrorism List Government that is not otherwise
subject to 31 CFR Chapter V, except for a transfer from a Terrorism
List Government:
(1) Constituting a donation to a United States person; or
(2) With respect to which the United States person knows (including
knowledge based on advice from an agent of the United States
Government), or has reasonable cause to believe, that the transfer
poses a risk of furthering terrorist acts in the United States.
(b) Nothing in this section authorizes the return of a transfer
prohibited by paragraph (a)(2) of this section.
Subpart F--Reports
Sec. 596.601 Required records.
Every person engaging in any transaction subject to the provisions
of this part must keep a full and accurate record of each such
transaction in which that person engages, regardless of whether such
transaction is effected pursuant to license or otherwise, and such
record must be available for examination for at least 2 years after the
date of such transaction.
Sec. 596.602 Reports to be furnished on demand.
Every person is required to furnish under oath, in the form of
reports or otherwise, from time to time and at any time as may be
required, complete information relative to any transaction, regardless
of whether such transaction is effected pursuant to license or
otherwise, subject to the provisions of this part. Such reports may be
required to include the production of any books of account, contracts,
letters or other papers, connected with any such transaction or
property, in the custody or control of the persons required to make
such reports. Reports with respect to transactions may be required
either before or after such transactions are completed.
Sec. 596.603 Notification by financial institutions rejecting
financial transactions.
Any financial institution rejecting a financial transaction
pursuant to this part must provide written notification to the Office
of Foreign Assets Control, Compliance Programs Division, U.S. Treasury
Department, 1500 Pennsylvania Ave., NW--Annex, Washington, DC 20220,
within 10 business days of the rejection of such transaction. The
notification shall include a photocopy of the payment or transfer
instructions received, the name and address of the transferee banking
institution, the amount of the payment or transfer, and the name and
telephone number of a contact person at the rejecting financial
institution from whom records may be obtained.
Subpart G--Penalties
Sec. 596.701 Penalties.
Attention is directed to 18 U.S.C. 2332d, as added by Public Law
104-132, section 321, which provides that, except as provided in
regulations issued by the Secretary of the Treasury, in consultation
with the Secretary of State, a United States person, knowing or having
reasonable cause to know that a country is designated under section
6(j) of the Export Administration Act, 50 U.S.C. App. 2405, as a
country supporting international terrorism, engages in a financial
transaction with the government of that country, shall be fined under
title 18, United States Code, or imprisoned for not more than 10 years,
or both.
Subpart H--Procedures
Sec. 596.801 Licensing.
(a) General licenses. General licenses have been issued authorizing
under appropriate terms and conditions certain types of transactions
which are subject to the prohibitions contained in this part. All such
licenses in effect on the date of publication are set forth in subpart
E of this part. It is the policy of the Office of Foreign Assets
Control not to grant applications for specific licenses authorizing
transactions to which the provisions of an outstanding general license
are applicable. Persons availing themselves of certain general licenses
may be required to file reports and statements in accordance with the
instructions specified in those licenses. Failure to file such reports
or statements will nullify the authorization to such person provided by
the general license.
(b) Specific licenses--(1) General course of procedure.
Transactions subject to the prohibitions contained in this part which
are not authorized by general license may be effected only under
specific licenses.
(2) Applications for specific licenses. Applications for specific
licenses to engage in any transactions prohibited by or pursuant to
this part may be filed by letter with the Office of Foreign Assets
Control. Any person having an interest in a transaction or proposed
transaction may file an application for a license authorizing such
transaction, but the applicant for a specific license is required to
make full disclosure of all parties in interest to the transaction so
that a decision on the application may be made with full knowledge of
all relevant facts and so that the identity and location of the persons
who know about the transaction may be easily ascertained in the event
of inquiry.
(3) Information to be supplied. The applicant must supply all
information specified by relevant instructions and/or forms, and must
fully disclose the names of all the parties who are concerned with or
interested in the proposed transaction. If the application is filed by
an agent, the agent must disclose the name of his principal(s). Such
documents as may be relevant shall be attached to each application as a
part of such application except that documents previously filed with
the Office of Foreign Assets Control may, where appropriate, be
incorporated by reference. Applicants may be required to furnish such
further information as is deemed necessary to a proper determination by
the Office of Foreign Assets Control. Any applicant or other party in
interest desiring to present additional information or discuss or argue
the application may do so at any time before or after decision.
Arrangements for oral presentation should be made with the Office of
Foreign Assets Control.
(4) Effect of denial. The denial of a license does not preclude the
reopening of an application or the filing of a further application. The
applicant or any other party in interest may at any time request
explanation of the reasons for a denial by correspondence or personal
interview.
[[Page 43466]]
(5) Reports under specific licenses. As a condition for the
issuance of any license, the licensee may be required to file reports
with respect to the transaction covered by the license, in such form
and at such times and places as may be prescribed in the license or
otherwise.
(6) Issuance of license. Licenses will be issued by the Office of
Foreign Assets Control acting on behalf of the Secretary of the
Treasury, or licenses may be issued by the Secretary of the Treasury
acting directly or through any specifically designated person, agency,
or instrumentality.
(c) Address. License applications, reports, and inquiries should be
addressed to the appropriate section or individual within the Office of
Foreign Assets Control, or to the Director, at the following address:
Office of Foreign Assets Control, Department of the Treasury, 1500
Pennsylvania Avenue, NW--Annex, Washington, DC 20220.
Sec. 596.802 Decisions.
The Office of Foreign Assets Control will advise each applicant of
the decision respecting filed applications. The decision of the Office
of Foreign Assets Control acting on behalf of the Secretary of the
Treasury with respect to an application shall constitute final agency
action.
Sec. 596.803 Amendment, modification, or revocation.
The provisions of this part and any rulings, licenses, whether
general or specific, authorizations, instructions, orders, or forms
issued hereunder may be amended, modified, or revoked at any time.
Sec. 596.804 Rulemaking.
(a) All rules and other public documents are issued by the
Secretary of the Treasury upon recommendation of the Director of the
Office of Foreign Assets Control. In general, rulemaking by the Office
of Foreign Assets Control involves foreign affairs functions of the
United States, and for that reason is exempt from the requirements
under the Administrative Procedure Act (5 U.S.C. 553) for notice of
proposed rulemaking, opportunity for public comment, and delay in
effective date.
(b) Any interested person may petition the Director of the Office
of Foreign Assets Control in writing for the issuance, amendment, or
repeal of any rule.
Sec. 596.805 Delegation by the Secretary of the Treasury.
Any action which the Secretary of the Treasury is authorized to
take pursuant to section 321 of the Antiterrorism and Effective Death
Penalty Act of 1996, Pub. L. 104-132, 110 Stat. 1214, 1254 (18 U.S.C.
2332d), may be taken by the Director, Office of Foreign Assets Control,
or by any other person to whom the Secretary of the Treasury has
delegated authority so to act.
Sec. 596.806 Rules governing availability of information.
(a) The records of the Office of Foreign Assets Control which are
required by 5 U.S.C. 552 to be made available to the public shall be
made available in accordance with the definitions, procedures, payment
of fees, and other provisions of the Regulations on the Disclosure of
Records of the Office of the Secretary and of other bureaus and offices
of the Department of Treasury issued pursuant to 5 U.S.C. 552 and
published at 31 CFR part 1.
(b) The records of the Office of Foreign Assets Control required by
the Privacy Act (5 U.S.C. 552a) to be made available to an individual
shall be made available in accordance with the definitions, procedures,
requirements for payment of fees, and other provisions of the
Regulations on Disclosure of Records of the Departmental Offices and of
other bureaus and offices of the Department of the Treasury issued
under 5 U.S.C. 552a and published at 31 CFR part 1.
Subpart I--Paperwork Reduction Act
Sec. 596.901 Paperwork Reduction Act notice.
The information collection requirements in Secs. 596.601, 596.602,
596.603 and 596.801 have been approved by the Office of Management and
Budget and assigned control number 1505-0161.
Dated: August 16, 1996.
Loren L. Dohm,
Acting Director, Office of Foreign Assets Control.
Approved: August 20, 1996.
James E. Johnson,
Assistant Secretary (Enforcement).
[FR Doc. 96-21705 Filed 8-21-96; 3:11 pm]
BILLING CODE 4810-25-F
Complete official Federal Register PDF
FR Doc. 96-21704 Foreign Assets Control Regulations, Cuban Assets Control Regulations, Iranian Assets Control Regulations, Libyan Sanctions Regulations, Iranian Transactions Regulations, Iraqi Sanctions Regulations; Implementation of Section 321 of the Antiterrorism and Effective Death Penalty Act of 1996
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43459-43462]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21704]
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DEPARTMENT OF THE TREASURY
31 CFR Parts 500, 515, 535, 550, 560, and 575
Foreign Assets Control Regulations, Cuban Assets Control
Regulations, Iranian Assets Control Regulations, Libyan Sanctions
Regulations, Iranian Transactions Regulations, Iraqi Sanctions
Regulations; Implementation of Section 321 of the Antiterrorism and
Effective Death Penalty Act of 1996
AGENCY: Office of Foreign Assets Control, Treasury.
ACTION: Final rule; amendments.
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SUMMARY: This final rule amends the Foreign Assets Control Regulations,
Cuban Assets Control Regulations, Iranian Assets Control Regulations,
Libyan Sanctions Regulations, Iranian Transactions Regulations, and
Iraqi
[[Page 43460]]
Sanctions Regulations (the ``Regulations'') to implement section 321 of
the Antiterrorism and Effective Death Penalty Act of 1996, by adding
the Act as authority for the Regulations and advising the public of the
criminal penalties imposed for violations.
EFFECTIVE DATE: 12:01 a.m. EDT, August 22, 1996.
FOR FURTHER INFORMATION CONTACT: Office of Foreign Assets Control,
Department of the Treasury, Washington, DC 20220; tel.: 202/622-2520.
SUPPLEMENTARY INFORMATION:
Electronic and Facsimile Availability
This document is available as an electronic file on The Federal
Bulletin Board the day of publication in the Federal Register. By
modem, dial 202/512-1387 and type ``/GO FAC,'' or call 202/512-1530 for
disk or paper copies. This file is available for downloading without
charge in WordPerfect 5.1, ASCII, and Adobe AcrobatTM readable
(*.PDF) formats. For Internet access, the address for use with the
World Wide Web (Home Page), Telnet, or FTP protocol is:
fedbbs.access.gpo.gov. The document is also accessible for downloading
in ASCII format without charge from Treasury's Electronic Library
(``TEL'') in the ``Business, Trade and Labor Mall'' of the FedWorld
bulletin board. By modem, dial 703/321-3339, and select the appropriate
self-expanding file in TEL. For Internet access, use one of the
following protocols: Telnet = fedworld.gov (192.239.93.3); World Wide
Web (Home Page) = http://www.fedworld.gov; FTP = ftp.fedworld.gov
(192.239.92.205). Additional information concerning the programs of the
Office of Foreign Assets Control is available for downloading from the
Office's Internet Home Page: http://www.ustreas.gov/treasury/services/
fac/fac.html, or in fax form through the Office's 24-hour fax-on-demand
service: call 202/622-0077 using a fax machine, fax modem, or touch
tone telephone.
Background
On April 24, 1996, President Clinton signed into law the
Antiterrorism and Effective Death Penalty Act of 1996, Pub. L. 104-132,
110 Stat. 1214-1319 (the ``Act''). Section 321 of that Act (18 U.S.C.
2332d) makes it a criminal offense for United States persons, except as
provided in regulations issued by the Secretary of the Treasury in
consultation with the Secretary of State, to engage in financial
transactions with the governments of countries designated under section
6(j) of the Export Administration Act (50 U.S.C. App. 2405) as
supporting international terrorism. U.S. persons who engage in such
transactions shall be fined under title 18, United States Code, or
imprisoned for up to 10 years, or both. This final rule amends the
Regulations to add the Act as an authority for the Regulations, and to
indicate the penalties imposed for violations of the Act. No other
change to the Regulations is made. A separate rule adding the Terrorism
List Governments Sanctions Regulations to implement section 321 of the
Act with respect to financial transactions of U.S. persons with the
governments of other countries designated under section 6(j) is being
published simultaneously in the Federal Register.
Since the Regulations involve a foreign affairs function, Executive
Order 12886 and the provisions of the Administrative Procedure Act (5
U.S.C. 553), requiring notice of proposed rulemaking, opportunity for
public participation, and delay in effective date, are inapplicable.
Because no notice of proposed rulemaking is required for this rule, the
Regulatory FlexibilityAct (5 U.S.C. 601-612) does not apply.
This rule contains no collection of information.
List of Subjects
31 CFR Part 500
Administrative practice and procedure, Banks, banking, Blocking of
assets, Cambodia, Exports, Fines and penalties, Finance, Foreign
claims, Foreign investment in the United States, Foreign trade,
Imports, Information and informational materials, International
organizations, North Korea, Publications, Reporting and recordkeeping
requirements, Securities, Services, Specially designated nationals,
Travel restrictions, Trusts and estates, Vietnam.
31 CFR Part 515
Administrative practice and procedure, Air carriers, Banks,
banking, Blocking of assets, Cuba, Currency, Estates, Exports, Fines
and penalties, Foreign investment in the United States, Foreign trade,
Imports, Informational materials, Publications, Reporting and
recordkeeping requirements, Securities, Shipping, Specially designated
nationals, Travel restrictions, Trusts and trustees, Vessels.
31 CFR Part 535
Administrative practice and procedure, Banks, banking, Blocking of
assets, Currency, Foreign investment in the United States, Iran,
Penalties, Reporting and recordkeeping requirements, Securities.
31 CFR Part 550
Administrative practice and procedure, Banks, banking, Blocking of
assets, Exports, Foreign investment, Foreign trade, Government of
Libya, Imports, Libya, Loans, penalties, Reporting and recordkeeping
requirements, Securities, Services, Specially designated nationals,
Travel restrictions.
31 CFR Part 560
Administrative practice and procedure, Agriculture commodities,
Banking and finance, Exports, Foreign trade, Imports, Information,
Investments, Iran, Loans, Penalties, Reporting and recordkeeping
requirements, Services, Specially designated nationals, Transportation.
31 CFR Part 575
Administrative practice and procedure, Banks, banking, Blocking of
assets, Exports, Foreign trade, Humanitarian aid, Imports, Iraq, Oil
imports, Penalties, Petroleum, Petroleum products, Reporting and
recordkeeping requirements, Specially designated nationals, Travel
restrictions.
For the reasons set forth in the preamble, 31 CFR chapter V is
amended as follows:
PART 500--FOREIGN ASSETS CONTROL REGULATIONS
1. The authority citation for part 500 is revised to read as
follows:
Authority: 50 U.S.C. App. 1-44; Pub. L. 104-132, 110 Stat. 1214,
1254 (18 U.S.C. 2332d); E.O. 9193, 7 FR 5205, 3 CFR, 1938-1943
Comp., p. 1174; E.O. 9989, 13 FR 4891, 3 CFR, 1943-1948 Comp., p.
748.
Subpart G--Penalties
2. Section 500.701 is amended by adding paragraph (c) to read as
follows:
Sec. 500.701 Penalties.
* * * * *
(c) Attention is directed to 18 U.S.C. 2332d, as added by Public
Law 104-132, section 321, which provides that, except as provided in
regulations issued by the Secretary of the Treasury, in consultation
with the Secretary of State, a U.S. person, knowing or having
reasonable cause to know that a country is designated under section
6(j) of the Export Administration Act, 50 U.S.C. App. 2405, as a
country supporting international terrorism, engages in a financial
transaction with the government of that country, shall be
[[Page 43461]]
fined under title 18, United States Code, or imprisoned for not more
than 10 years, or both.
PART 515--CUBAN ASSETS CONTROL REGULATIONS
1. The authority citation for part 515 is revised to read as
follows:
Authority: 50 U.S.C. App. 1-44; 22 U.S.C. 6001-6010; 22 U.S.C.
2370(a); Pub. L. 104-114, 106 Stat. 785 (22 U.S.C. 6021-6091); Pub.
L. 104-132, 110 Stat. 1214, 1254 (18 U.S.C. 2332d); Proc. 3447, 27
FR 1085, 3 CFR, 1959-1963 Comp., p. 157; E.O. 9193, 7 FR 5205, 3
CFR, 1938-1943 Comp., p. 1147; E.O. 9989, 13 FR 4891, 3 CFR, 1943-
1948 Comp., p. 748; E.O. 12854, 58 FR 36587, 3 CFR, 1993 Comp., p.
614.
Subpart G--Penalties
2. Section 515.701 is amended by adding paragraph (e) to read as
follows:
Sec. 515.701 Penalties.
* * * * *
(e) Attention is directed to 18 U.S.C. 2332d, as added by Public
Law 104-132, section 321, which provides that, except as provided in
regulations issued by the Secretary of the Treasury, in consultation
with the Secretary of State, a U.S. person, knowing or having
reasonable cause to know that a country is designated under section
6(j) of the Export Administration Act, 50 U.S.C. App. 2405, as a
country supporting international terrorism, engages in a financial
transaction with the government of that country, shall be fined under
title 18, United States Code, or imprisoned for not more than 10 years,
or both.
PART 535--IRANIAN ASSETS CONTROL REGULATIONS
1. The authority citation for part 535 is revised to read as
follows:
Authority: 50 U.S.C. 1701-1706; Pub. L. 104-132, 110 Stat. 1214,
1254 (18 U.S.C. 2332d); E.O. 12710, 44 FR 65729, 3 CFR, 1979 Comp.,
p. 457; E.O. 12205, 45 FR 24099, 3 CFR, 1980 Comp., p. 248; E.O.
12211, 45 FR 26685, 3 CFR, 1980 Comp., p. 253; E.O. 12276, 46 FR
7913, 3 CFR, 1981 Comp., p. 104; E.O. 12279, 46 FR 7919, 3 CFR, 1981
Comp., p. 109; E.O. 12280, 46 FR 7921, 3 CFR, 1981 Comp., p. 110;
E.O. 12281, 46 FR 7923, 3 CFR, 1981 Comp., p. 112; E.O. 12282, 46 FR
7925, 3 CFR, 1981 Comp., p. 113; E.O. 12282, 46 FR 7927, 3 CFR, 1981
Comp., p. 113; E.O. 12283, 46 FR 7927, 3 CFR, 1981 Comp., p. 114;
and E.O. 12294, 46 FR 14111, 3 CFR, 1981 Comp., p. 139.
Subpart G--Penalties
2. Section 535.701 is amended by adding paragraph (c) to read as
follows:
Sec. 535.701 Penalties.
* * * * *
(c) Attention is directed to 18 U.S.C. 2332d, as added by Public
Law 104-132, section 321, which provides that, except as provided in
regulations issued by the Secretary of the Treasury, in consultation
with the Secretary of State, a U.S. person, knowing or having
reasonable cause to know that a country is designated under section
6(j) of the Export Administration Act, 50 U.S.C. App. 2405, as a
country supporting international terrorism, engages in a financial
transaction with the government of that country, shall be fined under
title 18, United States Code, or imprisoned for not more than 10 years,
or both.
PART 550--LIBYAN SANCTIONS REGULATIONS
1. The authority citation for part 550 is revised to read as
follows:
Authority: 50 U.S.C. 1701-1706; 50 U.S.C. 1601-1651;22 U.S.C.
287c; 49 U.S.C. App. 1514; 22 U.S.C. 2349aa-8 and 2349aa-9; Pub. L.
104-132, 110 Stat. 1214, 1254 (18 U.S.C. 2332d); 3 U.S.C. 301; E.O.
12543, 51 FR 875, 3 CFR, 1986 Comp., p. 181; E.O. 12544, 51 FR 1235,
3 CFR, 1986 Comp., p. 183; E.O. 12801, 57 FR 14319, 3 CFR, 1992
Comp., p. 294.
Subpart G--Penalties
2. Section 550.701 is amended by redesignating the existing
paragraph (c) as (d) and adding paragraph (c) to read as follows:
Sec. 550.701 Penalties.
* * * * *
(c) Attention is directed to 18 U.S.C. 2332d, as added by Public
Law 104-132, section 321, which provides that, except as provided in
regulations issued by the Secretary of the Treasury, in consultation
with the Secretary of State, a U.S. person, knowing or having
reasonable cause to know that a country is designated under section
6(j) of the Export Administration Act, 50 U.S.C. App. 2405, as a
country supporting international terrorism, engages in a financial
transaction with the government of that country, shall be fined under
title 18, United States Code, or imprisoned for not more than 10 years,
or both.
PART 560--IRANIAN TRANSACTIONS REGULATIONS
1. The authority citation for part 560 is revised to read as
follows:
Authority: 50 U.S.C. 1701-1706; 50 U.S.C. 1601-1651; 22 U.S.C.
2349aa-9; Pub. L. 104-132, 110 Stat. 1214, 1254 (18 U.S.C. 2332d); 3
U.S.C. 301; E.O. 12613, 52 FR 41940, 3 CFR, 1987 Comp., p. 256; E.O.
12957, 60 FR 14615, 3 CFR 1995 Comp., p. 332; E.O. 12959, 60 FR
24757, 3 CFR 1995 Comp., p. 356.
Subpart G--Penalties
2. Section 560.701 is amended by adding paragraph (e) to read as
follows:
Sec. 560.701 Penalties.
* * * * *
(e) Attention is directed to 18 U.S.C. 2332d, as added by Public
Law 104-132, section 321, which provides that, except as provided in
regulations issued by the Secretary of the Treasury, in consultation
with the Secretary of State, a U.S. person, knowing or having
reasonable cause to know that a country is designated under section
6(j) of the Export Administration Act, 50 U.S.C. App. 2405, as a
country supporting international terrorism, engages in a financial
transaction with the government of that country, shall be fined under
title 18, United States Code, or imprisoned for not more than 10 years,
or both.
PART 575--IRAQI SANCTIONS REGULATIONS
1. The authority citation for part 575 is revised to read as
follows:
Authority: 50 U.S.C. 1701-1706; 50 U.S.C. 1601-1651; 22 U.S.C.
287c; Pub. L. 101-513, 104 Stat. 2047-55 (50 U.S.C. 1701 Note); Pub.
L. 104-132, 110 Stat. 1214, 1254 (18 U.S.C. 2332d); 3 U.S.C. 301;
E.O. 12722, 55 FR 31803, 3 CFR, 1990 Comp., p. 294; E.O. 12724, 55
FR 33089, 3 CFR, 1992 Comp., p. 317.
Subpart G--Penalties
2. Section 575.701 is amended by redesignating the existing
paragraph (d) as (e) and adding paragraph (d) to read as follows:
Sec. 575.701 Penalties.
* * * * *
(d) Attention is directed to 18 U.S.C. 2332d, as added by Public
Law 104-132, section 321, which provides that, except as provided in
regulations issued by the Secretary of the Treasury, in consultation
with the Secretary of State, a U.S. person, knowing or having
reasonable cause to know that a country is designated under section
6(j) of the Export Administration Act, 50 U.S.C. App. 2405, as a
country supporting international terrorism, engages in a financial
transaction with the government of that country, shall be fined under
title 18, United States Code, or imprisoned for not more than 10 years,
or both.
[[Page 43462]]
Dated: August 16, 1996.
Loren L. Dohm,
Acting Director, Office of Foreign Assets Control.
Approved: August 20, 1996.
James E. Johnson,
Assistant Secretary (Enforcement).
[FR Doc. 96-21704 Filed 8-21-96; 3:11 pm]
BILLING CODE 4810-25-F
Complete official Federal Register PDF
FR Doc. 96-21557 Importation of Horses
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43417-43418]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21557]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Animal and Plant Health Inspection Service
9 CFR Part 92
[Docket No. 95-079-2]
Importation of Horses
AGENCY: Animal and Plant Health Inspection Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: We are amending the horse importation regulations to add
vesicular stomatitis to the list of diseases from which a premises, and
adjoining premises, must be free before a horse from that premises may
be imported into the United States. This action appears necessary to
prevent the introduction of vesicular stomatitis into the United
States.
EFFECTIVE DATE: September 23, 1996.
FOR FURTHER INFORMATION CONTACT: Dr. Gary Colgrove, Chief Staff
Veterinarian, National Center for Import and Export, VS, APHIS, 4700
River Road Unit 38, Riverdale, MD 20737-1231, (301) 734-3276.
SUPPLEMENTARY INFORMATION:
Background
The regulations in 9 CFR part 92 (referred to below as ``the
regulations'') govern the importation into the United States of
specified animals, including horses, to prevent the introduction of
various animal diseases into the United States.
Under Sec. 92.314, horses imported into the United States must be
accompanied by a health certificate. The health certificate must
contain certain information to ensure that the horses intended for
importation into the United States are free from communicable diseases.
Among other things, the health certificate must state that no cases of
certain communicable diseases, including African horse-sickness,
dourine, glanders, surra, epizootic lymphangitis, ulcerative
lymphangitis, equine piroplasmosis, Venezuelan equine
encephalomyelitis, and equine infectious anemia, have occured on the
horses' premises of origin, or an adjoining premises, in the 60 days
preceding the horses' importation into the United States.
On April 1, 1996, we published in the Federal Register (61 FR
14268-14269, Docket No. 95-079-1) a proposal to amend the regulations
by adding vesicular stomatitis to the list of diseases from which a
horse's premises of origin and adjoining premises must be free before
the horse may be imported into the United States.
We solicited comments concerning our proposal for 60 days ending
May 31, 1996. We received four comments by that date. They were from
representatives of industry, a researcher, and a veterinary
association. One commenter supported the proposed rule. The three other
commenters had concerns about limiting the proposed restrictions to the
importation of horses. All three of these commenters requested that we
extend our proposed restrictions to the importation of all species
susceptible to vesicular stomatitis, including cattle, swine, sheep,
and llamas.
With few exceptions, the regulations require that horses, swine,
and ruminants imported into the United States be accompanied by a
certificate stating, among other things, that the animals were
inspected prior to importation and were found free of evidence of
communicable disease and, insofar as could be determined, exposure to
communicable disease within the 60 days preceding importation. The
regulations further require that horses, swine, and ruminants presented
for entry into the United States be inspected again at the port of
entry and found free of evidence of communicable disease and exposure
to communicable disease. With certain exceptions, these animals must
then undergo quarantine in the United States before being released. In
most cases, these restrictions are sufficient to ensure that an animal
infected with vesicular stomatitis would not be added to U.S. herds.
However, the possibility exists that an animal could be exposed to
vesicular stomatitis prior to importation, unbeknownst to the
veterinarian signing the required certificate, and that the animal
could arrive in the United States before showing any symptoms of the
disease. If quarantine were not required, as in the case of certain
ruminants from Canada and Mexico, or if the required quarantine period
were short, as it is for most horses, the animal could be released even
though it was incubating the disease.
Swine, cattle, and other ruminants imported into the United States
are imported primarily for slaughter, with a much smaller number
imported for breeding. The slaughter animals are either consigned
directly to slaughter or are consigned to pastures or feedlots for
finish feeding prior to slaughter. Most breeding animals are integrated
into U.S. herds.
While a small number of horses are imported for slaughter or
breeding, most are imported for exhibition or racing, and they are
shipped to multiple locations in the United States, where they have
contact with other horses which are also shipped to multiple locations
within the United States. As such, imported horses present a relatively
high risk, compared to other imported livestock, of spreading vesicular
stomatitis if they are incubating the disease when they arrive in the
United States. For this reason, our regulations address horses, not
other susceptible livestock. We continue to believe that the existing
regulations for other livestock are sufficient to ensure that these
animals do not present a significant risk of spreading vesicular
stomatitis to U.S. herds. Therefore, we are making no change based on
these comments.
Therefore, based on the rationale set forth in the proposed rule
and in this
[[Page 43418]]
document, we are adopting the provisions of the proposal as a final
rule without change.
Executive Order 12866 and Regulatory Flexibility Act
This final rule has been reviewed under Executive Order 12866. The
rule has been determined to be not significant for the purposes of
Executive Order 12866 and, therefore, has not been reviewed by the
Office of Management and Budget.
We are amending the regulations by adding vesicular stomatitis to
the list of diseases from which a horse's premises of origin and
adjoining premises must be free before the horse may be imported into
the United States. Vesicular stomatitis is recognized internationally
as a serious disease of horses, cattle, swine, and llamas. Animals that
are infected with vesicular stomatitis develop lesions in the mouth and
on the dental pad, tongue, lips, nostrils, hooves, and teats. These
lesions swell and break, exposing raw tissue. This raw tissue is so
painful for the infected animals that they often refuse to eat and show
signs of lameness. Substantial weight loss normally follows. As a
result of infection, dairy cows often develop mastitis, infection of
the udder, and many go dry.
Many countries that import U.S. livestock and animal products could
refuse to import such products from the United States if vesicular
stomatitis were allowed to spread across the United States. Currently,
no premises in the United States are under quarantine because of
vesicular stomatitis, but as recently as the summer of 1995, several
premises in four Western States were under quarantine because of
vesicular stomatitis. This rule will help prevent future outbreaks of
this disease.
This rule will involve no additional costs for U.S. horse
importers, large or small. Additionally, we do not expect this rule to
affect the availability of horses for importation to the United States.
Restrictions will only be placed on horses from specific premises.
Under these circumstances, the Administrator of the Animal and
Plant Health Inspection Service has determined that this action will
not have a significant economic impact on a substantial number of small
entities.
Executive Order 12988
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule: (1) Preempts all State and local laws and
regulations that are inconsistent with this rule; (2) has no
retroactive effect; and (3) does not require administrative proceedings
before parties may file suit in court challenging this rule.
Paperwork Reduction Act
This rule contains no new information collection or recordkeeping
requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
et seq.).
List of Subjects in 9 CFR Part 92
Animal diseases, Imports, Livestock, Poultry and poultry products,
Quarantine, Reporting and recordkeeping requirements.
Accordingly, 9 CFR part 92 is amended as follows:
PART 92--IMPORTATION OF CERTAIN ANIMALS AND POULTRY AND CERTAIN
ANIMAL AND POULTRY PRODUCTS; INSPECTION AND OTHER REQUIREMENTS FOR
CERTAIN MEANS OF CONVEYANCE AND SHIPPING CONTAINERS THEREON
1. The authority citation for part 92 continues to read as follows:
Authority: 7 U.S.C. 1622; 19 U.S.C. 1306; 21 U.S.C. 102-105,
111, 114a, 134a, 134b, 134c, 134d, 134f, 135, 136, and 136a; 31
U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.2(d).
Sec. 92.314 [Amended]
2. In Sec. 92.314, the first sentence is amended by adding
``vesicular stomatitis,'' immediately following ``Venezuelan equine
encephalomyelitis,''.
Done in Washington, DC, this 20th day of August 1996.
A. Strating,
Acting Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 96-21557 Filed 8-22-96; 8:45 am]
BILLING CODE 3410-34-P
Complete official Federal Register PDF
FR Doc. 96-21552 Fisheries Off West Coast States and in the Western Pacific; West Coast Salmon Fisheries; Inseason Adjustments From the U.S.-Canadian Border to Cape Falcon, OR, and From Sisters Rocks to Mack Arch, OR
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43472-43473]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21552]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
50 CFR Part 660
[Docket No. 960126016-6121-04; I.D. 081596B]
Fisheries Off West Coast States and in the Western Pacific; West
Coast Salmon Fisheries; Inseason Adjustments From the U.S.-Canadian
Border to Cape Falcon, OR, and From Sisters Rocks to Mack Arch, OR
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Inseason adjustments.
-----------------------------------------------------------------------
SUMMARY: NMFS announces inseason increases to the non-treaty and treaty
Indian coho salmon ocean fishery quotas in the area from the U.S.-
Canadian border to Cape Falcon, OR. The increase to the non-treaty
quota is apportioned between the commercial troll and recreational
fisheries and among recreational subareas according to the coho salmon
allocation provisions contained in the Fishery Management Plan for the
Ocean Salmon Fisheries off the Coasts of Washington, Oregon, and
California. NMFS also announces that the commercial salmon fishery in
the area from Sisters Rocks to Mack Arch, OR, opened 7 days a week
beginning August 15, 1996. This adjustment is intended to provide
additional fishing opportunity to commercial fishermen and maximize the
harvest of chinook salmon without exceeding the ocean share allocated
to the commercial fishery in this area.
DATES: Modification of the coho salmon quotas is effective August 22,
1996, through September 30, 1996. Modification of the fishing season is
effective 0001 hours local time, August 15, 1996, through 2400 hours
local time, August 31, 1996. Comments will be accepted through
September 6, 1996.
ADDRESSES: Comments may be mailed to William Stelle, Jr., Director,
Northwest Region, NMFS (Regional Director), NOAA, 7600 Sand Point Way
NE., Seattle, WA 98115-0070. Information relevant to this action has
been
[[Page 43473]]
compiled in aggregate form and is available for public review during
business hours at the office of the Regional Director.
FOR FURTHER INFORMATION CONTACT: William L. Robinson, 206-526-6140.
SUPPLEMENTARY INFORMATION: In the annual management measures for ocean
salmon fisheries (61 FR 20175, May 6, 1996), NMFS announced that the
non-treaty commercial and recreational salmon fisheries in the area
from the U.S.-Canadian border to Cape Falcon, OR, are closed unless the
conditions allowing the contingency seasons are met. Agreement was
reached between the United States and Canada that the Canadian harvest
of coho salmon off the west coast of Vancouver Island (WCVI) would be
less than 1 million fish. At this harvest level, the contingency
seasons could be opened and adjustments to the non-treaty coho total
allowable catch (TAC) could be made, implemented by inseason
management. U.S. fishery managers agreed at that time that any
additional harvest opportunity on coho salmon would be provided to the
inside fisheries instead of the ocean fisheries. Therefore, when the
contingency seasons opened, the non-treaty ocean TAC was set at 75,000
coho. The overall treaty Indian troll ocean quota was increased to
25,000 coho as provided for in the annual management measures (61 FR
40157, August 1, 1996).
The annual management measures state that, at a harvest level of
less than 1.1 million coho salmon off WCVI, the non-treaty coho TAC may
be increased above 75,000, contingent on the following criteria being
met: Allocating at least 50 percent of the savings from WCVI harvest
reductions below 1.2 million coho to spawner escapement of the critical
coho stocks; no increase in estimated Oregon coastal natural coho
impacts above those modeled under the assumptions of the season
structure presented in the contingency seasons for an assumed WCVI
harvest of 1.2 million coho; and agreement among all relevant state and
tribal fishery managers. Any adjustments to the non-treaty coho TAC
would be implemented by inseason management.
On August 7, the Regional Director consulted with fishery managers
of the States of Washington and Oregon and the affected northwest
treaty Indian tribes, and the Chairman of the Pacific Fishery
Management Council, regarding further discussions and a recommendation
to increase coho salmon quotas above the levels in the contingency
regime. The best available analysis of impacts of the increased quotas
indicates that at least 50 percent of the savings from the reduction in
harvest level will accrue to spawner escapements of the critical coho
stocks, and that overall impacts on Oregon coastal natural coho salmon
are neutral. Therefore, the criteria for adjustments to the non-treaty
coho TAC were met.
NMFS is increasing the non-treaty coho salmon ocean quota north of
Cape Falcon, OR, by 8,000 fish, from 75,000 to 83,000 fish. The overall
non-treaty increase is distributed between the commercial and
recreational fisheries, with the troll fishery quota increasing from
18,800 to 20,800 fish. The recreational quota increases are further
distributed among the four subareas north of Cape Falcon, with the
quota in the subarea from the U.S.-Canadian border to Cape Alava, WA,
increasing from 5,800 to 6,400 fish; the quota in the subarea from Cape
Alava to the Queets River, WA, increasing from 1,500 to 1,700 fish; the
quota in the subarea from the Queets River to Leadbetter Point, WA,
increasing from 20,800 to 23,000 fish; and the quota in the subarea
from Leadbetter Point, WA, to Cape Falcon, OR, increasing from 28,100
to 31,100 fish. NMFS is also increasing the overall treaty Indian coho
salmon ocean quota by 5,000 fish, from 25,000 to 30,000 fish.
In the annual management measures, NMFS announced that the 1996
commercial fishery for all salmon except coho salmon in the area from
Sisters Rocks to Mack Arch, OR, would open August 3, with the season to
follow a cycle of 2 days open and 2 days closed, until the earlier of
August 31 or attainment of the 3,000 chinook salmon quota.
The best available information on August 12 indicated that
commercial catches for the first three open periods (August 3-4, 7-8,
and 11-12) totaled slightly over 500 chinook salmon. The preseason
objective for implementing the open/closure cycle was to dampen catch
rates and prevent the quota from being attained too quickly or exceeded
by a large amount. The preseason management measure that opened this
fishery for 2-day periods is being rescinded, because its use as a
catch dampening measure is considered to be too restrictive. Conversion
to a fishing season open 7 days per week will provide additional
fishing opportunity to commercial fishermen to increase access to
chinook salmon. This adjustment was effective starting with the opening
of the next scheduled period on August 15.
Modifications of quotas and fishing seasons are authorized by
regulations at 50 CFR 660.409(b)(1)(i). All other restrictions that
apply to these fisheries remain in effect as announced in the annual
management measures.
The Regional Director consulted with representatives of the
Washington Department of Fish and Wildlife, Oregon Department of Fish
and Game, treaty Indian tribes, and Pacific Fishery Management Council
regarding this action. The States of Washington and Oregon will manage
the non-treaty commercial and recreational fisheries in State waters
adjacent to these areas of the exclusive economic zone consistent with
this Federal action. The treaty Indian tribes will manage the treaty
troll fisheries in accordance with the revised coho quota. As provided
by the inseason action procedures of 50 CFR 660.411, actual notice to
fishermen of the modification of fishing season was given prior to
August 15, 1996 (reopening date of the commercial fishery between
Sisters Rocks and Mack Arch, OR) and actual notice to fishermen for the
inseason increases to the non-treaty and treaty Indian coho salmon
ocean fishery quotas was given on August 15, 1996, by telephone hotline
number 206-526-6667 or 800-662-9825, and by U.S. Coast Guard Notice to
Mariners broadcasts on Channel 16 VHF-FM and 2182 kHz. Because of the
need for immediate action to adjust these fisheries in a timely manner,
NMFS has determined that good cause exists for this action to be issued
without affording a prior opportunity for public comment. This action
does not apply to other fisheries that may be operating in other areas.
Classification
This action is authorized by 50 CFR 660.409 and 660.411 and is
exempt from review under E.O. 12866.
Authority: 16 U.S.C. 1801 et seq.
Dated: August 19, 1996.
Richard H. Schaefer,
Director, Office of Fisheries Conservation and Management, National
Marine Fisheries Service.
[FR Doc. 96-21552 Filed 8-22-96; 8:45 am]
BILLING CODE 3510-22-F
Complete official Federal Register PDF
FR Doc. 96-21545 Privacy Act Regulations
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43418-43420]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21545]
=======================================================================
-----------------------------------------------------------------------
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 310
RIN 3064-AB80
Privacy Act Regulations
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The FDIC's Privacy Act Regulations were reviewed in accordance
with the requirements of section 303 of the Riegle Community
Development and Regulatory Improvement Act of 1994 (RCDRIA) and the
FDIC's ongoing Regulatory Review Program. As a result of this review,
the FDIC is amending its Privacy Act Regulations in order to delete
outmoded terms and otherwise update and clarify the regulations. The
revisions are minor and technical in nature.
EFFECTIVE DATE: August 23, 1996.
FOR FURTHER INFORMATION CONTACT: Dianne M. Salva, Senior Attorney,
Office of the Executive Secretary, (202) 898-3819; Richard White,
Attorney, Office of the Executive Secretary, (202) 898-7247; Michelle
Borzillo, Counsel, Legal Division, (202) 898-7400, Karen L. Main,
Senior Attorney, Legal Division, (202) 898-8838, Federal Deposit
Insurance Corporation, 550 17th Street, NW., Washington, DC. 20429.
SUPPLEMENTARY INFORMATION:
I. Discussion
Part 310 of the FDIC's Rules and Regulations implements the Privacy
Act of 1974, 5 U.S.C. 552a. The Privacy Act is a records management
statute designed to balance the government's need to maintain
information about individuals with the rights of individuals to be
protected against unwarranted invasions of their privacy stemming from
federal agencies' collection, maintenance, use, and disclosure of
personal information about them.
Consistent with the Privacy Act, part 310 provides a means by which
individuals may obtain non-exempt FDIC records indexed under their
name. It also permits the amendment of inaccurate records and places
restrictions on the release of covered information within and outside
the FDIC.
The FDIC's Privacy Act Regulations were reviewed in accordance with
the requirements of section 303 of the RCDRIA and the FDIC's ongoing
Regulatory Review Program. As a result of this review, the FDIC is
amending Part 310 through this final rule in order to delete outmoded
terms and otherwise update and clarify the regulations.
The revisions are minor and technical in nature. More specifically,
the final rule would (1) clarify the regulatory statement of purpose
and scope; (2) replace references to the ``Civil Service Commission''
with ``United States Office of Personnel Management''; (3) replace
references to the ``Records Unit'' with ``FOIA/PA Unit''; (4) clarify
that access to, or amendment of, government-wide systems of records
shall be controlled by the regulations and notices prescribed by the
sponsoring government agency; (5) conform part 310 to a court ruling
permitting the use of an unsworn declaration under penalty of perjury
in lieu of a notarized certification to
[[Page 43419]]
establish identity,\1\ and further clarify that personal identity may
be established through documents typically used for identification
purposes; (6) conform part 310 to a court ruling providing that a
requester has a right to obtain non-exempt information pertaining to
him or herself even if such records are medically sensitive;\2\ (7)
clarify that the restrictions on disclosure do not apply to disclosures
to a consumer reporting agency in accordance with 31 U.S.C. 3711(f);
(8) move the text of Sec. 310.10(c) to Sec. 310.9(d) for purposes of
clarity and re-number the remaining paragraphs; and (9) waive the
imposition of fees when duplication costs are less than $10 (up from
$2).
---------------------------------------------------------------------------
\1\ Summers v. DOJ, 999 F. 2d 570 (D.C. Cir. 1993).
\2\ Benavides v. Bureau of Prisons, 995 F.2d 269 (D.C. Cir.
1993).
---------------------------------------------------------------------------
With regard to the minimum billing amount, section 552a(f) of the
Privacy Act requires agencies to promulgate rules establishing fees to
be charged to any individual for making copies of his or her records.
The change to part 310 regarding the minimum billing amount conforms
part 310 to the changes made to the minimum billing provision contained
in 12 CFR part 309. These changes were based on the calculation, made
by the FDIC Division of Finance, of the Corporation's costs to process
the receipt of a payment.
As a result of these amendments, the FDIC's Privacy Act Regulations
provide a more streamlined and efficient process under which
individuals may obtain information from the Corporation, thus meeting
the goals of section 303 of the RCDRIA.
II. Public Comment Waiver and Effective Date
The amendments remove obsolete terms, make technical corrections
and conform and clarify procedures for obtaining non-exempt records.
Public comment on these changes is unnecessary and contrary to the
public interest because the proposed changes reduce public burden, are
relatively minor, and the FDIC has no discretion with regard to their
substance. Thus, the Board has found that there exists good cause for
not following the provisions of 5 U.S.C. 553(b) relating to notice and
public participation in connection with the adoption of these
amendments. Alternatively, the Board finds that the provisions of 5
U.S.C. 553(b) relating to notice and public participation do not apply
in connection with the adoption of these amendments because part 310 is
a procedural rule.
The Board also finds that the 30-day delayed effective date
required under 5 U.S.C. 553(d), should be waived and that the
amendments should become effective upon publication. As noted above,
the amendments remove obsolete terms, make technical corrections and
conform and clarify procedures for obtaining non-exempt records. The
amendments reduce public burden, are relatively minor, and the FDIC has
no discretion with regard to their substance. The amendments are of
such a nature that the public does not need a delayed period of time in
which to conform or adjust to the amendments. Thus, the Board finds
that there exists good cause for not delaying the effective date of
these amendments. Consequently, the final rule will be effective upon
publication in the Federal Register.
Section 302 of the RCDRIA, 12 U.S.C. 4802(b), requires that all new
regulations and amendments to regulations prescribed by a Federal
banking agency which impose additional reporting, disclosure, or other
new requirements on insured depository institutions shall take effect
on the first day of a calendar quarter. This final rule does not impose
additional reporting, disclosure, or other new requirements on insured
depository institutions, however. Consequently, the Board has
determined that section 302 of the RCDRIA does not apply and that this
final rule should become effective upon publication.
III. Matters of Regulatory Procedure
Regulatory Flexibility Act
Because no general notice of proposed rulemaking was published
prior to this final rule, the requirements of Chapter 6 of Title 5 of
the United States Code for an initial and final regulatory flexibility
analysis do not apply, 5 U.S.C. 601(2).
Paperwork Reduction Act
No collections of information pursuant to section 3504(h) of the
Paperwork Reduction Act (44 U.S.C. 3501 et seq.) are contained in this
notice. Consequently, no information has been submitted to the Office
of Management and Budget.
List of Subjects in 12 CFR Part 310
Banks, banking, Credit, Privacy.
For the reasons set forth above, 12 CFR part 310 is amended as set
forth below:
PART 310--PRIVACY ACT REGULATIONS
1. The authority citation for part 310 continues to read as
follows:
Authority: 5 U.S.C. 552a.
2. In Part 310 all references to ``Records Unit'' are revised to
read ``FOIA/PA Unit''.
3. Section 310.1 is revised to read as follows:
Sec. 310.1 Purpose and scope.
The purpose of this part is to establish regulations implementing
the Privacy Act of 1974, 5 U.S.C. 552a. These regulations delineate the
procedures that an individual must follow in exercising his or her
access or amendment rights under the Privacy Act to records maintained
by the Corporation in systems of records.
4. Section 310.3(a) is revised to read as follows:
Sec. 310.3 Procedures for requests pertaining to individual records in
a system of records.
(a) Any present or former employee of the Corporation seeking
access to, or amendment of, his/her official personnel records
maintained by the Corporation shall submit his/her request in such
manner as is prescribed by the United States Office of Personnel
Management in part 297 of its rules and regulations (5 CFR part 297).
For access to, or amendment of, other government-wide records systems
maintained by the Corporation, the procedures prescribed in the
respective Federal Register Privacy Act system notice shall be
followed.
* * * * *
Sec. 310.4 [Amended]
5. Section 310.4 is amended by revising paragraphs (b) and (c) to
read as follows:
* * * * *
(b) Individuals appearing in person at the Corporation seeking
access to or amendment of their records shall present two forms of
reasonable identification, such as employment identification cards,
driver's licenses, or other identification cards or documents typically
used for identification purposes.
(c) Except for records that must be publicly disclosed pursuant to
the Freedom of Information Act, 5 U.S.C. 552, where the Corporation
determines it to be necessary for the individual's protection, a
certification of a duly commissioned notary public, of any state or
territory, attesting to the requesting individual's identity, or an
unsworn declaration subscribed to as true under the penalty of perjury
under the laws of the United States of America, at the election of the
individual, may be required before a written request seeking access to
or amendment of a record will be honored.
[[Page 43420]]
The Corporation may also require that individuals provide minimal
identifying data such as full name, date and place of birth, or other
personal information necessary to ensure proper identity before
processing requests for records.
Sec. 310.6 [Amended]
6. Section 310.6 is amended by adding the phrase ``for release to
the patient'' at the end of the second sentence.
7. In Sec. 310.9, paragraph (d) is redesignated as paragraph (e)
and a new paragraph (d) is added to read as follows:
Sec. 310.9 Appeal of adverse initial agency determination on access or
amendment.
* * * * *
(d) Any statement of disagreement with the Corporation's refusal to
amend, filed with the Corporation by an individual pursuant to
Sec. 310.9(c), will be included in the disclosure of any records under
the authority of Sec. 310.10(b). The Corporation may in its discretion
also include a copy of a concise statement of its reasons for not
making the requested amendment.
* * * * *
8. Section 310.10 is amended by revising paragraphs (b)(6) and
(b)(10); adding a new paragraph (b)(12); removing paragraph (c);
redesignating paragraphs (d) and (e) as paragraphs (c) and (d),
respectively; amending newly designated paragraph (c) by removing
``paragraphs (b)(3) through (b)(11)'' and adding in its place
``paragraphs (b)(3) through (b)(12)''; and amending newly desinated
paragraph (d) by removing ``paragraph (d)(1)'' and adding in its place
``paragraph (c)(1)'' as follows:
Sec. 310.10 Disclosure of record to person other than the individual
to whom it pertains.
* * * * *
(b) * * *
(6) To the National Archives and Records Administration as a record
which has sufficient historical or other value to warrant its continued
preservation by the United States Government, or for evaluation by the
Archivist of the United States or his or her designee to determine
whether the record has such value;
* * * * *
(10) To the Comptroller General, or any of his or her authorized
representatives, in the course of the performance of the duties of the
General Accounting Office;
* * * * *
(12) To a consumer reporting agency in accordance with section
3711(f) of Title 31.
* * * * *
Sec. 310.11 [Amended]
9. Section 310.11(b) is amended by removing ``$2'' and adding in
its place ``$10''.
Sec. 310.13 [Amended]
10. Section 310.13 is amended by removing ``Sec. 310.10(d)(2)''
each place it appears and adding in its place ``Sec. 310.10(c)(2)''.
By order of the Board of Directors.
Dated at Washington, DC, this 13th day of August, 1996.
Federal Deposit Insurance Corporation.
Jerry L. Langley,
Executive Secretary.
[FR Doc. 96-21545 Filed 8-22-96; 8:45 am]
BILLING CODE 6714-01-P
Complete official Federal Register PDF
FR Doc. 96-21541 Affirmative Action and Nondiscrimination Obligations of Contractors and Subcontractors Regarding Individuals With Disabilities, Disabled Veterans and Veterans of the Vietnam Era; Approval of Information Collection Requirements and OMB Control Numbers
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43466-43468]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21541]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF LABOR
Office of Federal Contract Compliance Programs
41 CFR Parts 60-250, 60-741 and 60-999
RIN 1215-AA62, 1215-AA76
Affirmative Action and Nondiscrimination Obligations of
Contractors and Subcontractors Regarding Individuals With Disabilities,
Disabled Veterans and Veterans of the Vietnam Era; Approval of
Information Collection Requirements and OMB Control Numbers
AGENCY: Office of Federal Contract Compliance Programs (OFCCP), Labor.
ACTION: Final rule; technical amendments.
-----------------------------------------------------------------------
SUMMARY: This document informs the public that the Office of Management
and Budget (OMB) has approved, under the Paperwork Reduction Act of
1995 (PRA), the collection of information requirements contained in two
OFCCP rules published on May 1, 1996: (1) The final rule revising the
regulations implementing the affirmative action and nondiscrimination
obligations of
[[Page 43467]]
contractors and subcontractors regarding individuals with disabilities
under section 503 of the Rehabilitation Act of 1973 (61 FR 19336); and
(2) the interim rule modifying the requirement that contractors and
subcontractors invite job applicants and employees to inform the
contractor whether they believe they may be covered by the affirmative
action provisions of the Vietnam Era Veterans' Readjustment Assistance
Act of 1974, and wish to benefit from the contractor's affirmative
action program (61 FR 19366). OMB has approved of these revisions under
existing PRA control numbers and this document makes ministerial,
technical amendments to the OFCCP table displaying all control numbers
for collections of information in OFCCP rules. Technical amendments are
also made to the OFCCP PRA provisions to remove references to
superseded versions of the PRA and to simplify the language.
EFFECTIVE DATE: This document is effective August 23, 1996. Information
collection requirements contained in the final rule published at 61 FR
19336 and the interim rule published at 61 FR 19366 are effective
August 29, 1996.
FOR FURTHER INFORMATION CONTACT: Joe N. Kennedy, Deputy Director,
Office of Federal Contract Compliance Programs, Room C-3325, 200
Constitution Avenue, N.W., Washington, D.C. 20210. Telephone: (202)219-
9475 (voice), 1-800-326-2577 (TDD). Copies of this document in
alternate formats may be obtained by calling OFCCP at (202)219-9430
(voice) or 1-800-326-2577 (TDD). The alternate formats available are
large print, electronic file on computer disk and audio-tape.
SUPPLEMENTARY INFORMATION:
PRA Approvals
On May 1, 1996, OFCCP published a final rule revising its
regulations implementing section 503 of the Rehabilitation Act of 1973,
as amended, 29 U.S.C. 793 (section 503), which requires Government
contractors and subcontractors to take affirmative action to employ and
advance in employment qualified individuals with disabilities (61 FR
19336). On that same date, OFCCP also published an interim rule
modifying its regulation requiring Government contractors and
subcontractors to invite job applicants to inform the contractor
whether they believe they may be covered by the affirmative action
provisions of the Vietnam Era Veterans' Readjustment Assistance Act of
1974, as amended, 38 U.S.C. 4212 (VEVRAA), and wish to benefit from the
contractor's affirmative action program (61 FR 19366). Both rules take
effect on August 29, 1996.
OFCCP reviewed the collection of information aspects of the two
rules in accordance with the PRA and OMB implementing regulations
published at 5 CFR part 1320 (61 FR 19349, 19368). OFCCP believes that
the rules will not result in an increase in paperwork burdens from what
was previously required by the OFCCP regulations. In accordance with
the PRA, OFCCP submitted to OMB the information collection requirements
contained in the rules. On August 15, 1996, OMB approved the
information collection requirements in the two rules as revisions to
existing PRA control numbers 1215-0072 (Supply and Service) and 1215-
0163 (Construction).
Technical Amendments to Part 60-999
In accordance with OMB recommendations, 5 CFR 1320.3(f)(3), OFCCP
publishes a single table in 41 CFR part 60-999 that lists the OMB-
assigned control numbers for information collection requirements
contained in OFCCP rules. This document makes ministerial, technical
amendments to the table published at 41 CFR 60-999.2. The table is
updated to list the OMB control numbers assigned to OFCCP regulations
under the PRA.
Technical amendments are also made to the ``purpose'' section
published at 41 CFR 60-999.1. References to older, superseded versions
of the PRA are removed. Moreover, in accordance with Executive Order
12866, sec. 1(b)(12), other non-substantive language changes are made
to section 60-999.1 in order to make it simpler and easier to
understand.
Regulatory Analyses and Procedures
Administrative Procedure Act (APA)
This final rule revising 41 CFR part 60-999 does not make any
substantive changes to the OFCCP regulations published elsewhere at 41
CFR Ch. 60. Because the amendments in this document are ministerial and
non-substantive, the APA requirements that rule changes be published in
proposed form and have a delayed effective date are unnecessary and
would serve no useful purpose. Therefore, in accordance with the APA, 5
U.S.C. 553(b)(3)(B) and (d)(3), good cause exists to waive notice of
proposed rulemaking and the delayed effective date.
Executive Order 12866
This final rule is not a significant regulatory action as defined
in Executive Order 12866, and therefore a regulatory impact analysis is
not required.
Regulatory Flexibility Act (RFA)
This final rule will not change existing obligations for Federal
contractors. Consequently, under the RFA, as amended, 5 U.S.C. 605(b),
it is certified that this rule will not have a significant economic
impact on a substantial number of small entities.
Unfunded Mandates Reform Act
This final rule does not include any Federal mandate that may
result in the expenditure by state, local and tribal governments in the
aggregate, or by the private sector, of $100,000,000 or more in any one
year.
List of Subjects in 41 CFR Part 60-999
Reporting and recordkeeping requirements, Paperwork Reduction Act,
OMB control numbers.
Signed at Washington, D.C. this 19th day of August 1996.
Bernard E. Anderson,
Assistant Secretary for Employment Standards.
Shirley J. Wilcher,
Deputy Assistant Secretary for Federal Contract Compliance.
For the reasons stated above, under authority of 44 U.S.C. Ch. 35,
41 CFR part 60-999 is revised to read as follows.
PART 60-999--OMB CONTROL NUMBERS FOR OFCCP INFORMATION COLLECTION
REQUIREMENTS
Sec.
60-999.1 Purpose.
60-999.2 Display.
Authority: 44 U.S.C. Ch. 35.
Sec. 60-999.1 Purpose.
This part displays control numbers assigned to information
collection requirements of the Office of Federal Contract Compliance
Programs by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act (PRA), 44 U.S.C. Ch. 35. This part fulfills the
PRA requirement that agencies display a current control number for each
agency information collection requirement approved by OMB (44 U.S.C.
3507).
Sec. 60-999.2 Display.
------------------------------------------------------------------------
41 CFR Part where the information
collection requirement is located Current OMB control number
------------------------------------------------------------------------
Part 60-1........................... 1215-0072, 1215-0131, 1215-0163.
[[Page 43468]]
Part 60-2........................... 1215-0072.
Part 60-3........................... 3046-0017.
Part 60-4........................... 1215-0163.
Part 60-20.......................... 1215-0072, 1215-0163.
Part 60-30.......................... 1215-0072, 1215-0163.
Part 60-40.......................... 1215-0072, 1215-0163.
Part 60-50.......................... 1215-0072, 1215-0163.
Part 60-60.......................... 1215-0072.
Part 60-250......................... 1215-0072, 1215-0131, 1215-0163.
Part 60-741......................... 1215-0072, 1215-0131, 1215-0163.
------------------------------------------------------------------------
[FR Doc. 96-21541 Filed 8-22-96; 8:45 am]
BILLING CODE 4510-27-P
Complete official Federal Register PDF
FR Doc. 96-21529 Food Substances Affirmed As Generally Recognized As Safe In Feed and Drinking Water of Animals; Hydrophobic Silica
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43451-43454]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21529]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
21 CFR Part 584
[Docket No. 95G-0039]
Food Substances Affirmed As Generally Recognized As Safe In Feed
and Drinking Water of Animals; Hydrophobic Silica
AGENCY: Food and Drug Administration, HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Food and Drug Administration (FDA) is amending its
regulations for the listing of specific substances affirmed as
generally recognized as safe (GRAS) in the feed and drinking water of
animals and to provide that hydrophobic silica be affirmed as GRAS when
used as an anticaking/free-flowing agent in vitamin preparations for
animal feed. This action is in response to a petition filed by Degussa
Corp.
EFFECTIVE DATE: August 23, 1996.
FOR FURTHER INFORMATION CONTACT: Sharon A. Benz, Center for Veterinary
Medicine (HFV-226), Food and Drug Administration, 7500 Standish Pl.,
Rockville, MD 20855, 301-594-1729.
SUPPLEMENTARY INFORMATION:
I. Background
In a notice published in the Federal Register of March 21, 1995 (60
FR 14950), FDA announced that a GRAS affirmation petition for animal
use (GRASP 2419) had been filed by Degussa Corp., c/o Counsel for
Petitioner, Jerome H. Heckman, Keller and Heckman, 1001 G St. NW.,
suite 500 West, Washington, DC 20001. This petition proposes that part
584 (21 CFR part 584) be amended to provide that hydrophobic silica,
prepared by the hydrophobization of silicon dioxide with
dichlorodimethylsilane, be affirmed as GRAS as an anticaking/free-
flowing agent in vitamin preparations for animal feed. FDA gave
interested persons until June 5, 1995, to submit comments. FDA did not
receive any comments in response to that notice.
II. Standards for GRAS Affirmation
Under Sec. 570.30 (21 CFR 570.30), general recognition of safety of
food ingredients may be based only on the views of experts qualified by
scientific training and experience to evaluate the safety of food
substances. The basis of such views may be either: (1) Scientific
procedures, or (2) in the case of a substance used in food prior to
January 1, 1958, through experience based on common use in food.
General recognition of safety based upon scientific procedures requires
the same quantity and quality of scientific evidence as is required to
obtain approval of a food additive regulation for the ingredient and
ordinarily is to be based upon published studies, which may be
corroborated by unpublished studies and other data and information
(Sec. 570.30(b)). General recognition of safety through experience
based on common use of a substance in food prior to January 1, 1958,
may be determined without the quantity or quality of scientific
evidence required for approval of a food additive regulation; but
ordinarily it is to be based upon generally available data and
information concerning its pre-1958 history of use (Sec. 570.30(c)).
The subject petition relies on scientific procedures evidence to
support GRAS affirmation of hydrophobic silica in vitamin preparations
for animal feed.
III. Safety Evaluation
A. Manufacturing Process
According to the information in the petition, hydrophobic silica is
manufactured from fumed amorphous silicon dioxide or precipitated
silica by chemical reaction (methylation) of the
[[Page 43452]]
surface of the silicon dioxide particle with the methylating agent,
dichlorodimethylsilane. The dichlorodimethylsilane is mixed with a
slurry of silicon dioxide and reacts with most of the silanol groups (-
Si-OH) on the surface of the particle and converts them to methylsilyl
groups (-Si-CH3). The methylation reaction occurs only at the
surface of the silicon dioxide particle leaving 97 to 99 percent of the
silicon dioxide intact. Thus, the particle of hydrophobic silica may be
viewed as being composed of silicon dioxide with a surface of
dimethylpolysiloxane ((CH3)2SiOSi(CH3)2).
After further processing, the resulting hydrophobic silica
generally contains 97 to 99 percent silicon dioxide. Fumed hydrophobic
silicas generally contain greater than 99 percent silicon dioxide and
precipitated hydrophobic silica contain greater than 97 percent silicon
dioxide.
Silicas used in the production of hydrophobic silica will be food-
grade and meet the requirements for purity as defined in the Food
Chemical Codex, 3d edition, and the U.S. Pharmacopoeia and National
Formulary XVII. The specifications for hydrophobic silica are those for
silicon dioxide in the Food Chemical Codex, with the exception of a
specification for not more than 50 parts per million (ppm) of
dichlorodimethylsilane.
B. Uses of Hydrophobic Silica
The proposed use of hydrophobic silica is as an anticaking/free-
flow agent in vitamin preparations for animal feed, as described in 21
CFR 170.3(o)(1). Anticaking agents are processing aids used to impart
noncaking, free-flowing properties to dry foods by decreasing adhesion
forces between particles of materials to which they are added.
Anticaking agents are commonly used in many foods, such as salt,
spices, cereals, and sugars, and in complete animal feeds and feed
ingredients in a manner similar to human foods.
The methylation of the surface of the silicon dioxide particle only
serves to render the particle surface of silicon dioxide hydrophobic.
The increased hydrophobicity of the particle surface allows hydrophobic
silica to act as anticaking and free-flow agents for hydrophobic
substances, such as vitamin A preparations. The individual vitamin
particles are coated with silica, which prevents caking and provides
free-flow characteristics.
Information supplied by the petitioner evidences that silicas and
silicates have been used as direct food and feed ingredients for
several decades. Silicon in the form of silicon dioxide is commonly
used as an anticaking agent in various feed ingredients and complete
feeds (21 CFR 573.940). Other silicates including silica aerogel (21
CFR 582.1711); aluminum calcium silicate (21 CFR 582.2122); calcium
silicate (21 CFR 582.2227); magnesium silicate (21 CFR 582.2437);
sodium aluminosilicate (21 CFR 582.2727); hydrated sodium calcium
aluminosilicate (21 CFR 582.2729); and tricalcium silicate (21 CFR
582.2906) are recognized as GRAS as anticaking agents and have a
history of use in the feed industry as such.
The petition proposes that hydrophobic silica should not be used at
levels greater than 5 percent in the vitamin preparation. This would
result in no more than 1.5 ppm of hydrophobic silica in the finished
feed. Other silicates are commonly used at levels 2 to 2.5 percent or
2,000 ppm in finished feeds. The proposed use of hydrophobic silica is
not expected to significantly contribute to the consumption of silicate
by animals.
C. General Recognition of Safety of Silicates
The petition provides information to support a determination that
the use of hydrophobic silica is GRAS based upon the existence of an
expert consensus that the components of hydrophobic silica have been
shown to be safe based on scientific procedures and that the safety
characteristics of the components can be extended to the product,
hydrophobic silica. Foremost in the support of safety is published
information indicating that similar silicate compounds are nontoxic at
current levels used in food and feed, and that the inherent safety of
silicon dioxide is not changed by making the surface portion
hydrophobic because the toxicological profile is essentially the same
as commonly used silicas.
Both silicon dioxide and dimethylpolysiloxane have been widely used
for years in the food, feed, pharmaceutical and dental industries.
Information in the petition shows that the food safety of silicas has
been evaluated by numerous scientific panels. These panels include the
Select Committee on GRAS Substances of the Federation of the American
Society for Experimental Biology (the Select Committee) that reviewed
the use, exposure, and safety of silicas and silicates in 1979. This
committee concluded that the absorption of ingested silicas is limited
by its solubility in the contents of the alimentary canal and the
absorbability of silicon dioxide appears to be slight. Further, the
Select Committee concluded that silicon dioxide and various silicates
occur abundantly in the earth's crust and are present in practically
all natural waters, animals, and plants; they are part of the normal
diet, and silicon compounds consumed as added food ingredients
constitute only a minor proportion of the total dietary silicon intake
(Ref. 1).
The Select Committee also reviewed the properties, uses, and safety
of methylpolysilicones for use as direct food ingredients in 1981, and
it concluded that methylpolysilicones (also called
dimethylpolysiloxane) used in food consist of high molecular weight
compounds that are not absorbed to any appreciable extent from the
gastrointestinal tract and have been demonstrated to be of low acute
and chronic toxicity to animals and man. Moreover, the Select Committee
also recognized the medical use of dimethylpolysiloxane as dimethicone
and simethicone. Simethicone is widely used in over-the-counter drugs
as an antiflatulence ingredient, and as such, is generally recognized
as safe and effective (21 CFR 332.10) (Ref. 2).
The Scientific Committee for Food of the Commission of European
Committees, which reviewed the safety of silicates and silicon dioxides
in 1991, concluded that available published data on orally administered
silica and silicates, including amorphous silicon dioxide, substantiate
the biological inertness of these compounds. It also concluded that
silicates and silicones are sufficiently safe so that a restriction on
their use is not required nor is the establishment of an acceptable
daily intake (Ref. 3).
The Food and Agriculture Organization/World Health Organization
(FAO/WHO) Joint Expert Committee on Food Additives reached the same
conclusion as the Scientific Committee for the European Communities and
also determined that an acceptable daily intake was not necessary (Ref.
4).
D. Corroborating Evidence of Safety of Hydrophobic Silica
The petitioner also submitted relevant toxicological data that
supports the safety of hydrophobic silica to man and animals. The
submitted information is an article in the published literature
entitled ``Characterization and Toxicological Behavior of Synthetic
Amorphous Hydrophobic Silica'' (Ref. 5). The results reported from
testing indicate that fumed or precipitated hydrophobic silica does not
produce inflammation of the skin or mucous membranes, and acute and
chronic oral tests yielded no adverse systemic effects. The submitted
information
[[Page 43453]]
indicates that hydrophobic silica is nontoxic and the lack of toxicity
is related to hydrophobic silica's nonabsorbability. The toxicological
profile was essentially the same as similar GRAS silicates.
IV. Conclusion
The agency has determined that the petition provides information to
support a determination that the use of hydrophobic silica is GRAS
based upon the existence of an expert consensus that the components of
hydrophobic silica have been shown to be safe based on scientific
procedures and that the safety characteristics of the components apply
to the product, hydrophobic silica. Foremost in the support of safety
is published information indicating that similar silicate compounds are
safe at current levels used in food and feed and that the inherent
safety of silicon dioxide is not changed when the particle surface is
altered by methylation. Corroborating evidence has shown that the
toxicological profile for hydrophobic silica is essentially the same as
commonly used silicas. Therefore, the agency is affirming that
hydrophobic silica when used as an anticaking/free-flowing agent in
vitamin preparations for animal feed is GRAS when used in accordance
with good manufacturing or feeding practices at levels not to exceed 5
percent of the vitamin preparation.
V. Analysis of Impacts
FDA has examined the impacts of the final rule under Executive
Order 12866 and the Regulatory Flexibility Act (Pub. L. 96-354).
Executive Order 12866 directs agencies to assess all costs and benefits
of available regulatory alternatives and, when regulation is necessary,
to select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity). The agency believes that
this final rule is consistent with the regulatory philosophy and
principles identified in the Executive Order. In addition, the final
rule is not a significant regulatory action as defined by the Executive
Order and so is not subject to review under the Executive Order.
The Regulatory Flexibility Act requires agencies to analyze
regulatory options that would minimize any significant impact on small
entities. Because no current activity is prohibited by this final rule,
the compliance cost to firms is zero. Because no increase in the health
risks faced by consumers will result from this final rule, total costs
are also zero. Potential benefits include wider use of this substance
because of reduced uncertainty concerning its GRAS status, and any
resources saved by eliminating the need to prepare further petitions to
affirm the GRAS status of this substance for this use. The agency
certifies that the final rule will not have a significant economic
impact on a substantial number of small entities. Therefore, under the
Regulatory Flexibility Act, no further analysis is required.
VI. Environmental Impact
The agency has carefully considered the potential environmental
effects of this action. FDA has concluded that the action will not have
a significant impact on the human environment, and that an
environmental impact statement is not required. The agency's finding of
no significant impact and the evidence supporting that finding,
contained in an environmental assessment, may be seen in the Dockets
Management Branch (HFA-305), Food and Drug Administration, 12420
Parklawn Dr., rm. 1-23, Rockville, MD 20857, between 9 a.m. and 4 p.m.,
Monday through Friday.
VII. Effective Date
As this rule recognizes an exemption from the food additive
definition in the Federal Food, Drug, and Cosmetic Act, and from the
approval requirements applicable to food additives, no delay in
effective date is required by the Administrative Procedure Act, 5
U.S.C. 553(d). The rule will therefore be effective immediately (5
U.S.C. 553(d)(1)).
VIII. References
The following references have been placed on display in the Dockets
Management Branch (address above) and may be seen by interested persons
between 9 a.m. and 4 p.m., Monday through Friday.
1. GRASP 2419, Appendix 11, ``Evaluation of the Health Aspects
of Certain Silicates as Food Ingredients: Report of the Select
Committee on GRAS Substances.''
2. GRASP 2419, Appendix 12, ``Evaluation of the Health Aspects
of Methylpolysilicones as Food Ingredients: Report of the Select
Committee on GRAS Substances.''
3. GRASP 2419, Appendix 10, ``Report on Silicates and Silicon
Dioxide: The Scientific Committee for Food of the Commission of the
European Communities.''
4. GRASP 2419, Appendix 13, ``Evaluation Status of Silicon
Dioxide (JECFA);'' ``FAO/WHO Food Additives Data System;'' ``FAO
Food and Nutrition Paper,'' vol. 30/Rev. 1, 1985; ``Evaluations of
the Joint FAO/WHO Expert Committee on Food Additives,'' 1956-1984.
5. GRASP 2419, Appendix 6, ``Characterization and Toxicological
Behavior of Synthetic Amorphous Hydrophobic Silica.''
List of Subjects in 21 CFR Part 584
Animal feeds, Food additives.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, 21 CFR part
584 is amended as follows:
PART 584--FOOD SUBSTANCES AFFIRMED AS GENERALLY RECOGNIZED AS SAFE
IN FEED AND DRINKING WATER OF ANIMALS
1. The authority citation for 21 CFR part 584 continues to read as
follows:
Authority: Secs. 201, 402, 409, 701 of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 321, 342, 348, 371).
2. New Sec. 584.700 is added to subpart B to read as follows:
Sec. 584.700 Hydrophobic silicas.
(a) Product. Amorphous fumed hydrophobic silica or precipitated
hydrophobic silica (CAS Reg. No. 68611-44-9, silane, dichlorodimethyl-,
reaction products with silica).
(b) Conditions of use. An anticaking/free-flow agent in vitamin
preparations for animal feed.
(c) Limitations. Not to exceed 5 percent in the vitamin
preparation. It shall be used in accordance with good manufacturing or
feeding practices. It must be of purity suitable for intended use, and
it must comply with the following specifications:
(i) Amorphous fumed hydrophobic silica: Not less than 99.0 percent
silicon dioxide after ignition. Not more than 3 ppm arsenic. Not more
than 0.003 percent heavy metals (as lead). Not more than 10 ppm lead.
Not more than 2.5 percent loss on drying. Not more than 2 percent loss
on ignition after drying. Not more than 1 percent insoluble substances.
Not more than 50 parts per million dichlorodimethylsilane.
(ii) Precipated hydrophobic silica: Not less than 94.0 percent
silicon dioxide after ignition. Not more than 3 ppm arsenic. Not more
than 0.003 percent heavy metals (as lead). Not more than 10 ppm lead.
Not more than 7 percent loss on drying. Not more than 8.5 percent loss
on
ignition after drying. Not more than 5 percent soluble ionizable salts
(as sodium sulfate). Not more than 1 percent insoluble substances. Not
more than 50 parts per million dichlorodimethylsilane.
[[Page 43454]]
Dated: August 18, 1996.
Stephen F. Sundlof,
Director, Center for Veterinary Medicine.
[FR Doc. 96-21529 Filed 8-22-96; 8:45 am]
BILLING CODE 4160-01-F
Complete official Federal Register PDF
FR Doc. 96-21522 Procedures for Investigations and Related Proceedings Concerning Unfair Practices in Import Trade
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43429-43433]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21522]
=======================================================================
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INTERNATIONAL TRADE COMMISSION
19 CFR Part 210
Procedures for Investigations and Related Proceedings Concerning
Unfair Practices in Import Trade
AGENCY: U.S. International Trade Commission.
ACTION: Final rule.
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SUMMARY: The Commission hereby adopts certain interim rules as final
rules of practice and procedure for investigations and related
proceedings under section 337 of the Tariff Act of 1930 (19 U.S.C.
1337). The Commission also revises the interim rule concerning
investigation target dates, and adopts that rule as a final rule. This
change is made, in response to public comment, so that any decision
that results in a target date beyond fifteen months will be by initial
determination. The Commission further revises the final rule concerning
modification or rescission of exclusion orders, cease and desist
orders, and consent orders to eliminate the publication of Federal
Register notices that are not required by law, to eliminate unnecessary
publication costs.
DATES: The effective date of these final rules is September 23, 1996.
These final rules will apply to all section 337 investigations and
proceedings instituted after September 23, 1996, as well as to
complaints requesting the institution of a section 337 investigation
and petitions for modification or rescission of exclusion orders, cease
and desist orders, and consent orders filed after September 23, 1996.
FOR FURTHER INFORMATION CONTACT: Sidney Harris or Paul J. Luckern,
Office of Administrative Law Judges, U.S. International Trade
Commission, telephone (202) 205-2692 or (202) 205-2694. Hearing
impaired individuals can obtain information on the final rules by
contacting the Commission's TDD terminal at (202) 205-1810.
SUPPLEMENTARY INFORMATION:
Rulemaking Analysis
The final rules proposed in this notice do not meet the criteria
enumerated in
[[Page 43430]]
section 3(f) of Executive Order 12866,1 and therefore do not
constitute a significant regulatory action for purposes of that
Executive Order.
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\1\ 58 FR 51735, Oct. 4, 1993.
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In accordance with the Regulatory Flexibility Act,2 the
Commission hereby certifies 3 that the revised rules set forth in
this notice are not likely to have a significant economic impact on a
substantial number of small business entities. The Commission notes
that most section 337 complainants are not small businesses. Moreover,
proposed final rule 210.51(a) merely requires any extension of a target
date beyond 15 months to be by initial determination, and proposed
final rule 210.76(b) merely ceases publication of certain section 337
Federal Register notices that are not required by law.4 In any
event, the Regulatory Flexibility Act is inapplicable to this
rulemaking, because it is not one for which a notice of proposed
rulemaking was required under 5 U.S.C. 553(b) or another statute.5
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\2\ 5 U.S.C. 601 note.
\3\ Pursuant to 5 U.S.C. 605(b).
\4\ See 60 FR 53119 (Oct. 12, 1995).
\5\ See 5 U.S.C. 603(a).
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Background
Interim rules
On December 30, 1994, the Commission published interim rules
implementing the statutory amendments to section 337 effected by the
Uruguay Round Agreements Act (URAA) (59 FR 67622, Dec. 30, 1994).
Public comment was invited during a 90-day period ending March 30,
1995. The Commission received comments from The International Trade
Commission Trial Lawyers Assoc. (ITCTLA), Texas Instruments (TI),
Minnesota Mining and Manufacturing Co. (3M), Mr. Gilbert B. Kaplan of
the law firm of Hale and Dorr (Kaplan), the Government of Canada
(Canada) and the Japan Machinery Exporters' Association (JMEA). The
Commission took those comments into account before promulgating these
final rules. As these final rules are, with one exception, identical to
the interim rules on which public comment was invited and received, no
further notice and comment period is found necessary. See e.g. American
Transfer & Storage Co. v. I.C.C., 719 F.2d 1283 (5th Cir. 1983);
Methodist Hosp. of Sacramento v. Shalala, 38 F.3d 1225 (D.C. Cir.
1994); City of Stoughton, Wis. v. EPA, 858 F.2d 747 (D.C. Cir. 1988).
Each comment on the interim rules is summarized and the Commission's
responses are provided in the section-by-section analysis of the final
rules. Only section 210.51(a) is changed from the interim rules. In
response to public comment, final rule 210.51(a) now provides that any
extension of an investigation target date beyond 15 months shall be by
initial determination, subject to discretionary review by the
Commission. Final rule 210.76(b)
Final rule 210.76(b) is being revised to eliminate the provision
stating that the Commission will institute proceedings to modify or
rescind a remedial order or a consent order by publishing a notice in
the Federal Register. This change is being made to increase the
efficiency and economy of the section 337 process by eliminating
unnecessary publication costs, as recommended by the Commission's
Inspector General. See generally Audit Report No. IG-03-94, Review of
Ways to Increase the Economy and Efficiency of the Process for
Conducting Section 337 Investigations, at pages 2-4 and 8 (Aug. 19,
1994).
Last year, the Commission conducted a separate rulemaking to
eliminate provisions of 19 CFR Part 210 requiring the publication of
Federal Register notices that are not required by law. The proposed
revision of final rule 210.76(b) was inadvertently omitted from the
notice of proposed rulemaking published at 60 FR 16082 (Mar. 29, 1995).
The notice of final rulemaking published at 60 FR 53117 (Oct. 12, 1995)
acknowledged that omission. That notice also stated that the Federal
Register publication requirement of final rule 210.76(b) had been
suspended in Administrative Orders 95-12 (Mar. 21, 1995) and 95-18
(Oct. 4, 1995) and that a proposed revision of final rule 210.76(b) to
delete the Federal Register notice requirement would be published for
public comment at a later date. See 60 FR at 53119.
The Commission has since decided, however, that the costs and the
administrative burden of utilizing the notice and public comment
procedure to revise final rule 210.76(b) outweigh any potential
benefits. Significant amounts of staff time and resources are consumed
in the preparation of notices for publication. In addition, publication
fees are not nominal. Though discounts are available, the fee for
publishing a notice in the Federal Register can be as high as $125 per
column (with no proration for partial columns) and $375 per page. The
Commission also must bear the cost of reproducing the notice for
distribution to the public through the Office of the Secretary and
other sources, as well as the cost of mailing copies to various bar
groups, other Federal agencies, and other interested persons or
organizations.
The notice and comment procedure of 5 U.S.C. 553(b) is not only
costly, it also lengthens the time it takes for the Commission to
effect the desired rule change. After a notice of proposed rulemaking
is published in the Federal Register, interested persons must be given
adequate time to review the proposed rules and determine whether they
wish to submit comments, as well as adequate time to prepare and file
the comments. The Commission must then review those comments before
making a final decision on the content of the revised rule. (Moreover,
after the Commission makes a final decision on content, the revised
rule generally cannot go into effect for at least 30 days after a
notice of final rulemaking is published in the Federal Register. See 5
U.S.C. Sec. 553(d).)
Judging by the response to the notice of proposed rulemaking
published at 60 FR 16082, it seems unlikely that a notice of proposed
rulemaking concerning the revision of final rule 210.76(b) would
generate much public comment. In addition to publishing that notice in
the Federal Register, the Commission mailed that notice to bar groups,
Federal agencies, and other interested persons or organizations that
routinely receive such notices. Only one bar group and one agency
commented on the proposed revision of the part 210 rules to eliminate
the publication of Federal Register notices that are not required by
law.
Even though the aforementioned notice of proposed rulemaking did
not set forth a proposed revision of final rule 210.76(b), the ITCTLA
urged the Commission not to suspend or eliminate the Federal Register
notice requirement of that rule. The ITCTLA noted that the Federal
Register is a reliable and readily accessible data base. The ITCTLA
added that Federal Register notices of Commission proceedings to modify
or rescind a remedial order or a consent order fill a valuable due
process role by alerting interested persons to a potential disturbance
of the status quo--which enables them to take whatever action they deem
necessary to protect their interests.
The Commission considered the ITCTLA comments, but has decided that
final rule 210.76(b) must be revised for the same reasons that the
relevant provision of that rule was suspended and that other part 210
rules were revised last year to eliminate Federal Register notice
requirements. (See 60 FR at 53118.) Those reasons include (1) the need
to reduce unnecessary spending, (2) the fact that section 337 notices
are available from various sources, (3) the absence of any indication
that
[[Page 43431]]
suspension of the Federal Register notice requirement imposed by final
rule 210.76(b) has caused significant problems for parties, the
Commission's staff, interested members of the public, or other Federal
agencies, and (4) the absence of any indication that revising that rule
by deleting the publication requirement is likely to cause such
problems in the future.
Interested persons who wish to contest the revision of final rule
210.76(b) can petition the Commission to have the revised rule amended
or repealed, pursuant to 5 U.S.C. 553(e) and 19 CFR 201.4(b).
The Federal Register publication requirement of final rule
210.76(b) is an agency rule of practice and procedure. Hence, the
proposed revision of final rule 210.76(b) to eliminate that requirement
need not be published in a notice of proposed rulemaking that solicits
public comment. See 5 U.S.C. 553(b).
Section-By-Section Analysis of the Final Rules
Many of the final rules discussed in this notice are identical to
the correspondingly numbered interim rules published on December 30,
1994. No comment was received on many of the interim rules, and the
Commission found no reason to change those interim rules on its own
before adopting them as final rules. Thus, the preamble to those final
rules is as set forth in the ``Section-By-Section Analysis of the
Interim Rules'' found at 50 FR 67624-67626 (Dec. 30, 1994) (hereinafter
referred to as ``preamble'').6
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\6\ The Commission received no comments on the following interim
rules: 210.3-210.5; 210.16; 210.21-210.22; 210.24; 210.39; 210.41;
210.43; 210.49-210.50.
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The Commission did receive comments on certain interim rules, and
those comments and the views of the Commission are summarized below.
The commentary in the December 30, 1994, notice is considered part of
the preamble to those final rules, to the extent that such commentary
is not inconsistent with the discussion below.
Subpart C--Pleadings
Section 210.14
The interim rules added a new paragraph (e) to section 210.14 to
implement the amendment to Section 337(c) of the Tariff Act with regard
to counterclaims. Interim rule 210.14(e) requires that counterclaims be
filed not later than 10 business days before the commencement of the
evidentiary hearing.
The ITCTLA, TI, 3M and Kaplan commented that the preamble to
interim rule 210.14(e) suggests that the deadline for counterclaims is
being set at 10 business days before the evidentiary hearing to permit
respondents to use discovery mechanisms to ``identify potential
counterclaims'' and that because counterclaims which a respondent can
raise also include permissive counterclaims (i.e., claims unrelated to
the complaint), the preamble can be construed to support discovery on
unrelated matters to determine whether they constitute potential
counterclaims.
Canada and the JMEA objected to the changes made by the URAA
regarding counterclaims as insufficient to meet U.S. obligations under
the General Agreement on Tariffs and Trade (GATT). Canada and the JMEA
further commented on the inability of a respondent to raise a
counterclaim at the Commission, at least to the extent that the subject
matter of the counterclaim falls within the jurisdiction of the
Commission. The JMEA proposed that the Commission draft rules to
provide that if a respondent in a first section 337 investigation files
a complaint with the Commission alleging violation of section 337 in a
second investigation, the second investigation can be joined to the
first investigation.
The requirement that counterclaims be filed not later than ten
business days before the commencement of the evidentiary hearing was
included to provide a respondent adequate time to identify potential
counterclaims while avoiding the distraction that might occur if
counterclaims could be filed during (or after) the evidentiary hearing.
Discovery at the Commission is not for the purpose of generating a
counterclaim and the scope of discovery is not expanded by the new
counterclaim provision beyond what was previously allowed in Commission
investigations.
The comments of Canada and the JMEA regarding interim rule
210.14(e) are based on their perceptions of deficiencies in the URAA.
As such, the Commission does not find it appropriate to incorporate
changes based on these comments into its final rules. Moreover, the
joinder of two section 337 investigations, as proposed by the JMEA, may
be sought by motion under section 210.15. The Commission notes that
such a motion for joinder was, in fact, granted in Certain Precision
Resistor Chips, 337-TA-63/65, Order No. 2 (May, 1979).
In view of the foregoing, the Commission has determined that no
changes to interim rule 210.14 are warranted.
Subpart D--Motions
Section 210.23
Interim rule 210.23 eliminates the provision allowing the
Commission to suspend an investigation because of a proceeding in a
court or agency of the United States involving similar subject matter,
except for possible antidumping or countervailing duty matters referred
to the Department of Commerce by the Commission.
Canada maintains that interim rule 210.23 may exacerbate
discriminatory features of section 337 identified by the GATT Panel
Report in Aramid Fiber, BISD 36S/345, Adopted 11/7/89, pertaining to
dual proceedings.
It is important to bear in mind the reason underlying the changes
to section 210.23. Interim rule 210.23 reflects the amendments to
section 337(b)(1) that eliminated statutory deadlines. Administrative
law judges and the Commission retain the inherent authority to suspend
an investigation, based on a parallel proceeding, although it is
expected that this authority will be used sparingly. Moreover, the
addition of 28 U.S.C. 1659 now provides respondents with the ability to
obtain a stay of a parallel District Court proceeding.
In view of the foregoing, the Commission has determined that no
changes to interim rule 210.23 are warranted.
Subpart G--Determinations and Actions Taken
Sections 210.42 and 210.51
Interim rule 210.51 requires the administrative law judge, within
45 days of institution of an investigation, to set a target date for
completion of that investigation. Any decision to set a target date of
15 months or more is by initial determination, subject to discretionary
review by the Commission. Interim rule 210.42(c) provides, in relevant
part, that motions to set a target date exceeding 15 months from the
date of institution, pursuant to interim rule 210.51(a), are granted by
initial determination.
The ITCTLA, 3M, TI and Kaplan commented that the Commission should
be directly responsible for setting the target dates, and that this
decision should not be delegated to the administrative law judges.
The JMEA commented that the rules should not be administered in a
manner that effectively imposes a time limit on the administrative law
judge which the JMEA maintained would be the case if
[[Page 43432]]
the discretion of the judge were limited to establishing target dates
of 15 months or less. 3M and Kaplan commented that the choice of 15
months as the time that triggers Commission review seems to give a
degree of approval to target dates exceeding 12 months, and that
Commission review should be triggered by any target date that exceeds
12 months.
The Commission finds that it is appropriate for the administrative
law judge to set all target dates. Allowing the administrative law
judge to set target dates within a 12- to 15-month period of time,
without Commission review, greatly simplifies judicial management of
investigations. It is expected that the administrative law judges will
abide by the intent of Congress and the Commission, and conclude most
investigations within the traditional period of 12 months or less.
The ITCTLA commented that interim rule 210.51, when read in
conjunction with the Commission's review authority set forth in
Sec. 210.42(h)(3), violates the amended statute's requirement that the
Commission shall establish a target date within 45 days after an
investigation is instituted with respect to an initial determination
setting a target date of more than 15 months. The ITCTLA commented
that, for example, should an administrative law judge, 45 days after
institution, set a target date of 18 months, the target date will not
become the determination of the Commission until 30 day later, or a
total of 75 days, and should the Commission choose to review the
initial determination the period could be extended even further.
The ITCTLA further commented that interim rule 210.51 should be
amended such that any subsequent modification by the administrative law
judge to the target date, based on good cause, should be in the form of
an initial determination subject to review by the Commission in every
instance.
The Commission recognizes that section 337(b)(1) requires that the
Commission ``within 45 days after an investigation is initiated,
establish a target date for its final determination.'' Under interim
rule 210.51, any decision by the administrative law judge to set a
target date of 15 months or less is not subject to review, and thus
will be final within 45 days after institution of the investigation. It
is expected that target dates will rarely exceed 15 months. In the rare
case where a target date in the first instance is set in excess of 15
months, the initial determination and any subsequent review by the
Commission will be completed within 45 days of institution, as required
by section 337(b)(1). Thus, no modification of interim rule 210.51 is
found necessary. The Commission, however, has modified interim rule
210.51, such that, under final rule 210.51(a), any extension that would
result in a target date beyond 15 months from institution will be by
initial determination, and subject to discretionary review by the
Commission.
Subpart H--Temporary Relief
Sections 210.52 and 210.70
These rules provide for the posting and forfeiture of a
complainant's bond when a complainant seeks temporary relief.
Canada commented that the statute and rules make no provision for a
bond requirement on a complainant where no temporary relief has been
sought, and suggested that provision should be made for the
indemnification of the defendant in all situations.
To the extent that Canada's comment is based on its perception of a
deficiency in the URAA, the Commission does not consider it appropriate
to incorporate changes based on this comment in its rules. Furthermore,
the Commission finds no need for such a provision. In cases involving a
successful motion for temporary relief, articles may only enter or be
sold in the United States during the pendency of an investigation upon
the posting of a bond. In cases that do not involve a motion for
temporary relief, by contrast, respondents do not require any
indemnification, because respondents' articles are not subject to
exclusion until a final determination of violation by the Commission.
Subpart I--Enforcement Procedures and Advisory Opinions
Section 210.76
Paragraph (b) of final rule 210.76 requires that the Commission
publish a Federal Register notice in order to institute a proceeding to
modify or rescind the exclusion order, cease and desist order, or
consent order. The Commission proposes to revise paragraph (b) by
eliminating the publication requirement and allowing the Commission to
institute such proceedings simply by issuing a notice.
Miscellaneous
The JMEA maintained that in order to comply with the spirit of the
Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPs), the Commission should clarify that (1) the domestic industry
requirement under section 337 cannot be satisfied by an individual
inventor pursuing his or her personal monetary interest by enforcing
his or her paper patent, and (2) that section 337 is not a vehicle for
pursuing such personal interest. Those comments, however, relate to
questions of statutory interpretation, dealing with the substance of
section 337, and do not implicate any Commission procedural rule.
List of Subjects in 19 CFR Part 210
Administrative practice and procedure, Business and industry,
Customs duties and inspection, Imports, Investigations.
For the reasons set forth in the preamble, 19 CFR Part 210 is
amended as set forth below.
PART 210--ADJUDICATION AND ENFORCEMENT
1. The authority citation for Part 210 will continue to read as
follows:
Authority: 19 U.S.C. 1333, 1335, and 1337.
2. The interim rule amendments to Secs. 210.3, 210.4, 210.5,
210.14, 210.16, 210.21, 210.22, 210.23, 210.24, 210.39, 210.42, 210.43,
210.49, 210.50, 210.52 and 210.70, published on December 30, 1994 (59
FR 67622) are adopted as final rules without change.
Note: Sec. 210.21(d) has been further amended by a rule
published on Oct. 12, 1995 (60 FR 53120).
3. The interim rule amending Sec. 210.51 (b) and (c) published on
December 30, 1994 (59 FR 67622) is adopted as a final rule and
paragraph (a) is revised to read as follows:
Sec. 210.51 Period for concluding investigation.
(a) Permanent relief. Within 45 days after institution of the
investigation, the administrative law judge shall issue an order
setting a target date for completion of the investigation. If the
target date does not exceed 15 months from the date of institution of
the investigation, the order of the administrative law judge shall be
final and not subject to interlocutory review. If the target date
exceeds 15 months, the order of the administrative law judge shall
constitute an initial determination. After the target date has been
set, it can be modified by the administrative law judge for good cause
shown before the investigation is certified to the Commission or by the
Commission after the investigation is certified to the Commission. Any
extension of the target date beyond 15 months, before the investigation
is certified to the Commission, shall be by initial determination.
* * * * *
[[Page 43433]]
4. Paragraph (b) of Sec. 210.76 is revised to read as follows:
Sec. 210.76 Modification or rescission of exclusion orders, cease and
desist orders, and consent orders.
* * * * *
(b) Commission action upon receipt of petition. The Commission may
thereafter institute a proceeding to modify or rescind the exclusion
order, cease and desist order, or consent order by issuing a notice.
The Commission may hold a public hearing and afford interested persons
the opportunity to appear and be heard. After consideration of the
petition, any responses thereto, and any information placed on the
record at a public hearing or otherwise, the Commission shall take such
action as it deems appropriate. The Commission may delegate any hearing
under this section to the chief administrative law judge for
designation of a presiding administrative law judge, who shall certify
a recommended determination to the Commission.
By Order of the Commission.
Issued: August 19, 1996.
Donna R. Koehnke,
Secretary.
[FR Doc. 96-21522 Filed 8-22-96; 8:45 am]
BILLING CODE 7020-02-P
Complete official Federal Register PDF
FR Doc. 96-21519 Occupational Exposure to Asbestos, Tremolite, Anthophyllite and Actinolite
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43454-43459]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21519]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF LABOR
Occupational Safety and Health Administration
29 CFR Parts 1910, 1915, and 1926
[Docket number H-033-e]
RIN 1218-AB25
Occupational Exposure to Asbestos, Tremolite, Anthophyllite and
Actinolite
AGENCY: Occupational Safety and Health Administration, Department of
Labor.
ACTION: Final rule: corrections.
-----------------------------------------------------------------------
SUMMARY: The Occupational Safety and Health Administration (OSHA) is
correcting certain provisions of the final asbestos standards issued
August 10, 1994 (59 FR 40964) and corrected and clarified June 29, 1995
(60 FR 33974) and September 29, 1995 (60 FR 50411).
EFFECTIVE DATE: These amendments take effect September 23, 1996.
FOR FURTHER INFORMATION CONTACT: Ms. Anne Cyr, Office of Information
and Consumer Affairs, OSHA, U. S. Department of Labor, Room N3647, 200
Constitution Avenue, N.W., Washington, DC 20210; telephone: (202) 219-
8151.
SUPPLEMENTARY INFORMATION:
1. Background
On August 10, 1994, OSHA issued asbestos standards for general
industry, construction work, and shipyard work. 59 FR 40964. On June
29, 1995, and September 29, 1995, OSHA issued notices correcting and
clarifying various provisions of those standards. 60 FR 33974; 60 FR
50411. This notice further corrects various provisions of the standards
and clarifies the meaning of certain provisions of the standards.
The corrections set forth in this document are based on the
existing rulemaking record and are not intended to affect the
protection afforded by the standards in a significant way. OSHA
therefore finds good cause, pursuant to 29 CFR 1911.15 and the
Administrative Procedure Act, for promulgating the corrections without
notice and opportunity for public comment.
This preamble will describe the changes to the regulatory text of
the standards and will also clarify the meaning of certain existing
provisions of the asbestos standards.
2. Respirators
The standards require that engineering and work practice controls
be supplemented by respirator use when employees are exposed to
asbestos fibers in concentrations exceeding the permissible exposure
limit (PEL) and in certain other circumstances. The type of respirator
that may be used depends on the amount by which exposures are expected
to exceed the PEL. When exposures are less than 10 times the PEL, half-
mask air-purifying respirators equipped with high efficiency filters
may be used. Full-facepiece air-purifying respirators with high
efficiency filters are permissible for exposures up to 50 times the
PEL. Higher exposures require the use of positive pressure respirators,
either powered air-purifying respirators (for exposures up to 100 times
the PEL) or full facepiece supplied-air respirators (for even higher
exposures).
Paragraph (h)(2)(iii) of the construction and shipyard standards
provides that any employee who must wear a respirator under the
standard may require that the employer provide him or her with a
powered air-purifying respirator in lieu of a negative pressure
respirator. Accordingly, even if the amount of asbestos to which an
employee is exposed would permit that employee to be protected by a
negative pressure respirator, an employee who wishes to wear a more
effective respirator may require the employer to provide a powered air-
purifying respirator.
It is important that employees understand that they have this
choice. Accordingly, paragraph (h)(2)(iii) of the construction and
shipyard standards is being revised to state explicitly that the
employer must inform employees of their right to require provision of a
powered air-purifying respirator in lieu of a negative pressure
respirator. This requirement for employee notification is already
implicit in provisions of the standards requiring that employees who
perform work that is covered by a standard be trained in the contents
of the standard. By stating explicitly that the employer must inform
employees who are required to wear respirators that the employee may
require the employer to provide a powered air-purifying respirator, the
standards will better assure that employees receive the information
they need to exercise the option afforded them by paragraph
(h)(2)(iii).
3. Signs and Labels
The asbestos standards require that signs and labels be used to
warn employees of the presence of asbestos in buildings and vessels.
When the 1994 standards were issued, certain provisions for signs and
labels were carried over from earlier standards issued in 1986, and
other provisions were added.
In resolving the judicial challenges to the 1986 standards, the
court of appeals ordered OSHA to reconsider its determination not to
require signs and labels to be in languages other than English. In
response to the court's order, OSHA did not require that signs and
labels be in languages other than English but did take other steps to
assure that employees who were not fluent in English understood the
warnings provided by the signs and labels. The agency added a new
requirement that the training program specifically cover the contents
of signs and labels and also required that the training assure that
employees comprehend the warning signs. With these changes, OSHA
concluded that the entire hazard communication program required by the
standard ``will ensure that all exposed employees are effectively
warned of the presence and hazards of asbestos-containing material on
worksites.'' 55 FR 3724, 3730 (Feb. 5, 1990).
The 1994 standards carried over the provisions requiring that
employees be trained in the contents of signs and labels and that the
training be conducted in a manner that the employee can comprehend. To
further ensure that workers understand the warnings provided by signs
and labels, the June 29, 1995 notice added a requirement to the
construction and shipyard standards stating that the employer assure
that the signs required at the entrance to regulated areas be
comprehensible to employees. The regulated area sign provisions listed
foreign languages, pictographs and graphics, as means to promote
employee comprehension.
OSHA has determined that language stating the need to promote
employee comprehension of signs and labels should be included in all of
the sign and label requirements found in the asbestos standards.
Accordingly, this notice revises paragraph (j)(3)(v) of the general
industry standard, and paragraphs (k)(6) and (k)(8)(vii) of the
construction and shipyard standards, to similarly state that employers
must assure employee comprehension of the signs and labels. These
revisions will provide for consistency in all of the provisions of the
standards that require asbestos warning signs and labels and will
therefore better assure that workers, particularly those who are not
fluent in
[[Page 43455]]
English, are aware of the presence and location of asbestos in their
workplaces. OSHA reiterates, however, that it is not mandating that
signs and labels be written in languages other than English. The
standards give each employer flexibility in deciding how to best assure
that the employees in its workplace understand the message conveyed by
the signs and labels.
4. Training
Proper training is vital to assure that workers who remove or
disturb asbestos-containing materials are aware of the hazards of
asbestos exposure and understand the requirements of the standard that,
if followed, will minimize such exposure. The standard's training
provisions are designed to assure that each employee receives a degree
of training appropriate to the nature of the asbestos-related tasks
that employee performs.
Employees who perform Class I asbestos removals must be given a 32-
hour training course equivalent to the asbestos abatement training
required under the EPA Model Accreditation Plan. The 1994 standard
required similar training for workers who engage in general Class II
removals but required 8-hour training for workers who remove only a
single generic type of Class II material, such as roofing or flooring
material. The intent was to assure that those employees who were
employed by asbestos abatement contractors and performed a wide range
of asbestos abatement work would receive the full 32-hour training,
while workers who worked for specialty contractors and performed
limited asbestos removal work would receive 8-hour training that
focused on the particular type of material they removed.
The June 29, 1995 notice retained the requirement that workers who
remove a single generic type of Class II building material receive 8-
hour training. However, OSHA determined that workers who remove
asbestos-containing materials other than building materials, such as
gaskets, do not necessarily require 8 hours of training. Accordingly,
the standards were revised to specify the topics that the training for
such workers had to cover rather than the duration of the training.
In making these changes to the Class II training provisions, the
requirement in paragraph (k)(9)(iii) for a 32-hour training course for
those workers who engage in Class II removals as part of general
asbestos abatement work was inadvertently deleted. This notice restores
and clarifies that requirement. Paragraph (k)(9)(iii) now states that
32-hour training is required when Class II operations require controls
such as critical barriers (or equivalent isolation methods) or negative
pressure enclosures. Such controls are required for those operations
that present the greatest potential for high exposures, and the workers
who perform such operations must thoroughly understand when and how
such controls must be used. The training provisions are also being
clarified to state that training for workers who engage in other Class
II removals must include training in each category of material the
employee removes and in each work practice and each removal method the
employee uses. Similar performance-oriented language is also being
added to the Class III training provision. By stating the training
requirement in performance-oriented terms, the standard gives each
employer flexibility in designing a training course suited to its
operation while assuring that each employee receives training that
covers all of the asbestos-related tasks that employee performs.
As discussed above, all training must be conducted in a manner that
is comprehensible to the employee. Therefore, any written or electronic
media that is used in the training must be presented at a reading level
that is appropriate for the workers being trained, and the employer
must take reasonable steps to assure that employees who are not fluent
in English understand the content of the training. A worker's ability
to obtain a timely response to questions he or she may have about the
content of the training is also a key to worker comprehension.
Accordingly, while a training course may use written materials and
electronic media such as videotapes or computer-based training, a
knowledgeable person (such as a person who qualifies as a ``competent
person'' for the particular type of asbestos work addressed in the
training) must be available to answer questions during the training.
Modern communication techniques permit effective questioning of a
person who is not physically present in the room where the training is
taking place, and the standards do not preclude reliance on such
methods. However, regardless of whether an instructor is physically
present during the training, the employer must assure that the
employees have a full opportunity to have questions answered in a
timely manner.
OSHA has received several inquiries about the training required for
a person to qualify as a ``competent person'' for roof removal work.
Roof removal is Class II work, and paragraph (o)(4)(i) of the
construction and shipyard standards generally requires a Class II
competent person to receive a 40-hour course that meets the requirement
of EPA's Model Accreditation Plan. However, paragraph (o)(4)(i) also
permits an alternative course that is certified by the EPA or by a
state and is equivalent in stringency, content, and length to the EPA
Model Accreditation Plan course. Various training providers have
developed ``competent person'' training courses that are specifically
designed to train roof removal supervisors. These courses focus on roof
removal work rather than asbestos removal methods that are used in
indoor work and therefore require less training time than the EPA MAP
course. Because these courses are shorter than the 40-hour MAP course,
training providers that have developed such courses and state agencies
whose approval has been sought have been uncertain as to whether
roofing supervisors trained in such courses would qualify as
``competent persons'' under the OSHA asbestos standards.
It was OSHA's intent to assure that a competent person receives
full and effective training in the type of asbestos jobs that the
person supervises. For routine roof removal work, where the material is
intact prior to removal, a well-designed training course that deals
specifically with roof removal work will effectively train competent
persons to supervise such jobs. However, where roofing material has
deteriorated to the point where it is no longer ``intact'' within the
meaning of the standards, removal of the material can result in
excessive exposures, and the job should be supervised by a person who
has been trained in the full range of asbestos abatement methods.
Therefore, OSHA has interpreted paragraph (o)(4)(i) to require 40-hour
training for competent persons who oversee roof removal work when the
material being removed is non-intact prior to removal. For competent
persons who supervise removals for which the roofing material is intact
prior to removal, state-approved courses of shorter than 40-hour
duration are permitted. When a powered roof cutter is used to remove
built-up roofing, the force of the cutting blade produces dust that is
non-intact even if the material is intact to begin with. However, for
purpose of the competent person training provision, this would not be
considered a non-intact removal that would require 40-hour training.
Only if the material has deteriorated to the point where it is non-
intact prior to removal is 40-hour training required.
[[Page 43456]]
5. Medical Surveillance
The 1994 construction and shipyard standards required medical
surveillance ``for all employees who for a combined total of 30 or more
days per year are engaged in Class I, II and III work or are exposed at
or above the permissible exposure limit or excursion limit.'' The
agency's intent was to count towards the medical surveillance
requirement all of the days in which an employee performed either Class
I or Class II or Class III work or, regardless of the type of work
being done, was exposed over either the permissible exposure limit or
excursion limit. The June 29, 1995 corrections notice modified this
provision to require medical surveillance ``for all employees who for a
combined total of 30 or more days per year are engaged in Class I, II
and III work or are exposed at or above the permissible exposure limit
or excursion limit for a combined 30 days or more per year.'' The
addition of the second reference to 30 days or more per year was not
intended to change the substantive meaning of the provision and has
proven to be confusing. The provision is therefore being revised to
return to the original wording.
The June 29, 1995 corrections notice also provided that days in
which an employee spends less than one hour performing Class II or III
work and, in doing so, fully conforms to the work practices specified
in the standard, need not be counted towards the medical surveillance
requirement. This provision is being further modified to state that
such days are excluded only if the material being removed or disturbed
is intact. Removal or disturbance of non-intact material presents the
potential for considerable exposure to asbestos fibers, and any day in
which such work takes place should count towards the medical
surveillance requirement. The provision is also being clarified by
stating that the one hour time period includes the time spent on the
entire removal operation, including cleanup.
6. One Waste-Bag Limitation for Class III Work
Class III work includes maintenance work for which a small amount
of ACM must be cut away to access mechanical or structural components
of buildings. In order to qualify as Class III work (rather than Class
I or Class II work), the amount cut away must be less than the amount
that can be contained in a standard-sized glove bag or waste bag.
Employers may not circumvent the requirements for Class I and Class II
removals by overfilling a single glove bag or waste bag and treating
the job as Class III. Material is only considered to be ``contained''
if the glove bag or waste bag is filled to the point where it can be
sealed effectively and will not become opened inadvertently or broken
during normal handling. To facilitate secure closure and avoid
breakage, it is generally proper practice to fill a bag only \1/3\ to
\1/2\ full.
7. Class IV Work
As OSHA has explained previously, Class IV work must be related to
and on the site of a construction job to be regulated by the Asbestos
Construction Standard, 29 CFR 1926.1101. 60 FR 33974. This
distinguishes such ``clean-up'' work from housekeeping which is
regulated by the Asbestos General Industry Standard, 29 CFR 1910.1001.
OSHA further wishes to clarify that ``clean-up'' performed as a
Class IV activity does not include picking up and bagging asbestos
debris/dust during Class I, II, or III work. Class I, II, and III work
is subject to the requirement in paragraph (g)(1)(iii) of the
construction and shipyard standards for prompt clean-up and disposal of
asbestos-containing waste and debris. Therefore, the collection and
bagging of dust and debris that results from Class I, II, or III work
is considered a part of that class of work and must be done by
employees trained to do such work. Class IV activities consist of
clean-up work that takes place in an area after a Class I, II, or III
job in that area has been completed. Although any asbestos-containing
dust and debris should have been removed during the Class I, II, or III
job, OSHA recognizes that some residual asbestos-containing dust or
debris may be present after the Class I, II, or III job (including
cleanup) has been completed. The Class IV classification under the
construction and shipyard standards for further cleanup work in areas
where Class I, II, or III work has taken place means that an asbestos-
trained ``competent person'' must evaluate the work before it is done
to assure that it should not be classified under another category. The
Class IV classification also means that the employees who perform the
work must receive sufficient training to recognize the presence of ACM,
understand the hazards associated with asbestos exposure, and know the
appropriate work practices that must be followed to minimize the
potential for asbestos exposure.
List of Subjects in 29 CFR Part 1910, 1915, and 1926
Asbestos, Occupational Safety and Health.
This document was prepared under the direction of Joseph A. Dear,
Assistant Secretary of Labor for Occupational Safety and Health, U.S.
Department of Labor, 200 Constitution Avenue, N.W., Washington, DC
20210.
Accordingly, pursuant to sections 4, 6(b), (8)(c), and 8(g) of the
Occupational Safety and Health Act of 1970 (29 U.S.C. 653, 655, 657);
Sec. 107, Contract Work Hours and Safety Standard Act (Construction
Safety Act, 40 U.S.C. 333); Sec. 41, Longshore and Harbor Workers'
Compensation Act (33 U.S.C. 941); 5 U.S.C. Sec. 553; and 29 CFR Part
1911; 29 CFR Parts 1910, 1915 and 1926 are amended as set forth below.
Signed at Washington, DC, this 19th day of August, 1996.
Joseph A. Dear,
Assistant Secretary Occupational Safety and Health Administration.
OSHA hereby amends 29 CFR Parts 1910, 1915 and 1926 as follows:
PART 1910--OCCUPATIONAL SAFETY AND HEALTH STANDARDS
1. The authority citation of subpart Z of 29 CFR part 1910
continues to read as follows:
Authority: Secs. 6, 8 Occupational Safety and Health Act, 29
U.S.C. 655, 657: Secretary of Labor's Order 12-71 (36 FR 8754), 9-76
(41 FR 25059), 9-83 [48 FR 35736] or 1-90 (55 FR 9033), as
applicable; and 29 CFR part 1911.
All of subpart Z issued under section 6(b) of the Occupational
Safety and Health Act, except those substances which have exposure
limits listed in Tables Z-1, Z-2 and Z-3 of 29 CFR 1910.1000. The
latter were issued under section 6(a) [29 U.S.C. 655(a)].
Section 1910.1000, Tables Z-1, Z-2 and Z-3 also issued under 5
U.S.C. 553. Section 1910.1000, Tables Z-1, Z-2 and Z-3 not issued under
29 CFR part 1911 except for the arsenic (organic compounds), benzene,
and cotton dust listings.
Section 1910.1001 also issued under section 107 of Contract Work
Hours and Safety Standards Act, 40 U.S.C. 333.
Section 1910.1002 not issued under 29 U.S.C. or 29 CFR part 1911;
also issued under 5 U.S.C. 653.
Section 1910.1003 through 1910.1018 also issued under 29 CFR 653.
Section 1910.1025 also issued under 29 U.S.C. 653 and 5 U.S.C. 553.
Section 1910.1028 also issued under 29 U.S.C. 653.
Section 1910.1030 also issued under 29 U.S.C. 653.
Section 1910.1043 also issued under 5 U.S.C. 551 et seq.
Section 1910.1045 and 1910.1047 also issued under 29 U.S.C. 653.
[[Page 43457]]
Section 1910.1048 also issued under 29 U.S.C. 653.
Sections 1910.1200, 1910.1499 and 1910.1500 also issued under 5
U.S.C. 553.
Section 1910.1450 is also issued under sec. 6(b), 8(c) and 8(g)(2),
Pub. L. 91-596, 84 Stat. 1593, 1599, 1600; 29 U.S.C. 655, 657.
2. In Sec. 1910.1001, paragraph (j)(3)(v) is revised to read as
follows:
Sec. 1910.1001 Asbestos.
* * * * *
(j) * * *
(3) * * *
(v) At the entrance to mechanical rooms/areas in which employees
reasonably can be expected to enter and which contain ACM and/or PACM,
the building owner shall post signs which identify the material which
is present, its location, and appropriate work practices which, if
followed, will ensure that ACM and/or PACM will not be disturbed. The
employer shall ensure, to the extent feasible, that employees who come
in contact with these signs can comprehend them. Means to ensure
employee comprehension may include the use of foreign languages,
pictographs, graphics, and awareness training.
* * * * *
PART 1915--[AMENDED]
1. The authority citation of 29 CFR part 1915 continues to read as
follows:
Authority: Sec. 41, Longshore and Harbor Workers Compensation
Act (33 U.S.C. 941); secs. 4, 6, 8, Occupational Safety and Health
Act of 1970 (29 U.S.C. 653, 655, 657); sec. 4 of the Administrative
Procedure Act (5 U.S.C. 553); Secretary of Labor's Order No. 12-71
(36 FR 8754), 8-76 (41 FR 35736) or 1-90 (55 FR 9033), as
applicable; 29 CFR part 1911.
2. In Sec. 1915.1001, paragraph (h)(2)(iii) is revised to read as
follows:
Sec. 1915.1001 Asbestos.
* * * * *
(h) * * *
(2) * * *
(iii)(A) The employer shall provide a tight fitting powered, air-
purifying respirator in lieu of any negative-pressure respirator
specified in Table 1 whenever:
(1) an employee chooses to use this type of respirator; and
(2) this respirator will provide adequate protection to the
employee.
(B) The employer shall inform any employee required to wear a
respirator under this paragraph that the employee may require the
employer to provide a powered, air-purifying respirator in lieu of a
negative pressure respirator.
Table 1 * * *
* * * * *
3. In Sec. 1915.1001, paragraph (k)(6) is revised to read as
follows:
* * * * *
(k) * * *
(6) At the entrance to mechanical rooms/areas in which employees
reasonably can be expected to enter and which contain ACM and/or PACM,
the building/vessel owner shall post signs which identify the material
which is present, its location, and appropriate work practices which,
if followed, will ensure that ACM and/or PACM will not be disturbed.
The employer shall ensure, to the extent feasible, that employees who
come in contact with these signs can comprehend them. Means to ensure
employee comprehension may include the use of foreign languages,
pictographs, graphics, and awareness training.
* * * * *
4. In Sec. 1915.1001, paragraph (k)(8)(vii) is revised to read as
follows:
* * * * *
(k) * * *
(8) * * *
(vii) When a building/vessel owner or employer identifies
previously installed PACM and/or ACM, labels or signs shall be affixed
or posted so that employees will be notified of what materials contain
PACM and/or ACM. The employer shall attach such labels in areas where
they will clearly be noticed by employees who are likely to be exposed,
such as at the entrance to mechanical room/areas. Signs required by
paragraph (k)(6) of this section may be posted in lieu of labels so
long as they contain information required for labelling. The employer
shall ensure, to the extent feasible, that employees who come in
contact with these signs or labels can comprehend them. Means to ensure
employee comprehension may include the use of foreign languages,
pictographs, graphics, and awareness training.
* * * * *
5. In Sec. 1915.1001, paragraphs (k)(9)(iii), (k)(9)(iv), and
(k)(9)(v) are revised to read as follows:
* * * * *
(k) * * *
(9) * * *
(iii) Training for Class I operations and for Class II operations
that require the use of critical barriers (or equivalent isolation
methods) and/or negative pressure enclosures under this section shall
be the equivalent in curriculum, training method and length to the EPA
Model Accreditation Plan (MAP) asbestos abatement workers training (40
CFR part 763, subpart E, appendix C).
(iv) Training for other Class II work.
(A) For work with asbestos containing roofing materials, flooring
materials, siding materials, ceiling tiles, or transite panels,
training shall include at a minimum all the elements included in
paragraph (k)(9)(viii) of this section and in addition, the specific
work practices and engineering controls set forth in paragraph (g) of
this section which specifically relate to that category. Such course
shall include ``hands-on'' training and shall take at least 8 hours.
(B) An employee who works with more than one of the categories of
material specified in paragraph (k)(9)(iv)(A) of this section shall
receive training in the work practices applicable to each category of
material that the employee removes and each removal method that the
employee uses.
(C) For Class II operations not involving the categories of
material specified in paragraph (k)(9)(iv)(A) of this section, training
shall be provided which shall include at a minimum all the elements
included in paragraph (k)(9)(viii) of this section and in addition, the
specific work practices and engineering controls set forth in paragraph
(g) of this section which specifically relate to the category of
material being removed, and shall include ``hands-on'' training in the
work practices applicable to each category of material that the
employee removes and each removal method that the employee uses.
(v) Training for Class III employees shall be consistent with EPA
requirements for training of local education agency maintenance and
custodial staff as set forth at 40 CFR 763.92(a)(2). Such a course
shall also include ``hands-on'' training and shall take at least 16
hours. Exception: For Class III operations for which the competent
person determines that the EPA curriculum does not adequately cover the
training needed to perform that activity, training shall include as a
minimum all the elements included in paragraph (k)(9)(viii) of this
section and in addition, the specific work practices and engineering
controls set forth in paragraph (g) of this section which specifically
relate to that activity, and shall include ``hands-on'' training in the
work practices applicable to each category of material that the
employee disturbs.
* * * * *
6. In Sec. 1915.1001, paragraph (m)(1)(i)(A) is revised to read as
follows:
* * * * *
(m) * * *
(1) * * *
(i) * * *
[[Page 43458]]
(A) The employer shall institute a medical surveillance program for
all employees who for a combined total of 30 or more days per year are
engaged in Class I, II and III work or are exposed at or above a
permissible exposure limit. For purposes of this paragraph, any day in
which a worker engages in Class II or Class III operations or a
combination thereof on intact material for one hour or less (taking
into account the entire time spent on the removal operation, including
cleanup) and, while doing so, adheres fully to the work practices
specified in this standard, shall not be counted.
* * * * *
PART 1926--[AMENDED]
1. The authority citation of subpart Z of 29 CFR part 1926
continues to read as follows:
Authority: Sections 6 and 8, Occupational Safety and Health Act,
29 U.S.C. 655, 657; Secretary of Labor's Orders Nos. 12-71 (36 FR
8754), 8-76 (41 FR 25059), 9-83 (48 FR 35736) or 1-90 (55 FR 9033)
as applicable; and 29 CFR part 1911.
Section 1926.1102 not issued under 29 U.S.C. 655 or 29 CFR part
1911; also issued under 5 U.S.C. 653.
Section 1926.1103 through 1926.1118 also issued under 29 U.S.C.
6653.
Section 1926.1128 also issued under 29 U.S.C. 653.
Section 1926.1145 and 1926.1147 also issued under 29 U.S.C. 653.
Section 1926.1148 also issued under 29 U.S.C. 653.
2. In Sec. 1926.1101, paragraph (h)(2)(iii) is revised to read as
follows:
Sec. 1926.1101 Asbestos.
* * * * *
(h) * * *
(2) * * *
(iii)(A) The employer shall provide a tight fitting powered, air-
purifying respirator in lieu of any negative-pressure respirator
specified in Table 1 whenever:
(1) An employee chooses to use this type of respirator; and
(2) This respirator will provide adequate protection to the
employee.
(B) The employer shall inform any employee required to wear a
respirator under this paragraph that the employee may require the
employer to provide a powered, air-purifying respirator in lieu of a
negative pressure respirator.
Table 1 * * *
* * * * *
3. In Sec. 1926.1101, paragraph (k)(6) is revised to read as
follows:
* * * * *
(k) * * *
(6) At the entrance to mechanical rooms/areas in which employees
reasonably can be expected to enter and which contain ACM and/or PACM,
the building owner shall post signs which identify the material which
is present, its location, and appropriate work practices which, if
followed, will ensure that ACM and/or PACM will not be disturbed. The
employer shall ensure, to the extent feasible, that employees who come
in contact with these signs can comprehend them. Means to ensure
employee comprehension may include the use of foreign languages,
pictographs, graphics, and awareness training.
* * * * *
4. In Sec. 1926.1101, paragraph (k)(8)(vii) is revised to read as
follows:
* * * * *
(k) * * *
(8) * * *
(vii) When a building owner or employer identifies previously
installed PACM and/or ACM, labels or signs shall be affixed or posted
so that employees will be notified of what materials contain PACM and/
or ACM. The employer shall attach such labels in areas where they will
clearly be noticed by employees who are likely to be exposed, such as
at the entrance to mechanical room/areas. Signs required by paragraph
(k)(6) of this section may be posted in lieu of labels so long as they
contain information required for labelling. The employer shall ensure,
to the extent feasible, that employees who come in contact with these
signs or labels can comprehend them. Means to ensure employee
comprehension may include the use of foreign languages, pictographs,
graphics, and awareness training.
* * * * *
5. In Sec. 1926.1101, paragraphs (k)(9)(iii), (k)(9)(iv), and
(k)(9)(v) are revised to read as follows:
* * * * *
(k) * * *
(9) * * *
(iii) Training for Class I operations and for Class II operations
that require the use of critical barriers (or equivalent isolation
methods) and/or negative pressure enclosures under this section shall
be the equivalent in curriculum, training method and length to the EPA
Model Accreditation Plan (MAP) asbestos abatement workers training (40
CFR Part 763, subpart E, appendix C).
(iv) Training for other Class II work.
(A) For work with asbestos containing roofing materials, flooring
materials, siding materials, ceiling tiles, or transite panels,
training shall include at a minimum all the elements included in
paragraph (k)(9)(viii) of this section and in addition, the specific
work practices and engineering controls set forth in paragraph (g) of
this section which specifically relate to that category. Such course
shall include ``hands-on'' training and shall take at least 8 hours.
(B) An employee who works with more than one of the categories of
material specified in paragraph (k)(9)(iv)(A) of this section shall
receive training in the work practices applicable to each category of
material that the employee removes and each removal method that the
employee uses.
(C) For Class II operations not involving the categories of
material specified in paragraph (k)(9)(iv)(A) of this section, training
shall be provided which shall include at a minimum all the elements
included in paragraph (k)(9)(viii) of this section and in addition, the
specific work practices and engineering controls set forth in paragraph
(g) of this section which specifically relate to the category of
material being removed, and shall include ``hands-on'' training in the
work practices applicable to each category of material that the
employee removes and each removal method that the employee uses.
(v) Training for Class III employees shall be consistent with EPA
requirements for training of local education agency maintenance and
custodial staff as set forth at 40 CFR 763.92(a)(2). Such a course
shall also include ``hands-on'' training and shall take at least 16
hours. Exception: For Class III operations for which the competent
person determines that the EPA curriculum does not adequately cover the
training needed to perform that activity, training shall include as a
minimum all the elements included in paragraph (k)(9)(viii) of this
section and in addition, the specific work practices and engineering
controls set forth in paragraph (g) of this section which specifically
relate to that activity, and shall include ``hands-on'' training in the
work practices applicable to each category of material that the
employee disturbs.
* * * * *
6. In Sec. 1926.1101, paragraph (m)(1)(i)(A) is revised to read as
follows:
* * * * *
(m) * * *
(1) * * *
(i) * * *
(A) The employer shall institute a medical surveillance program for
all employees who for a combined total of 30 or more days per year are
engaged in Class I, II and III work or are exposed at or above a
permissible exposure limit.
[[Page 43459]]
For purposes of this paragraph, any day in which a worker engages in
Class II or Class III operations or a combination thereof on intact
material for one hour or less (taking into account the entire time
spent on the removal operation, including cleanup) and, while doing so,
adheres fully to the work practices specified in this standard, shall
not be counted.
[FR Doc. 96-21519 Filed 8-22-96; 8:45 am]
BILLING CODE 4510-26-P
Complete official Federal Register PDF
FR Doc. 96-21515 Fisheries of the Northeastern United States; Summer Flounder and Scup Fisheries; Amendment 8
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43420-43428]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21515]
=======================================================================
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DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
15 CFR Part 902
50 CFR Part 648
[Docket No. 960520141-6221-02; I.D. 042696A]
RIN 0648-AH05
Fisheries of the Northeastern United States; Summer Flounder and
Scup Fisheries; Amendment 8
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: NMFS issues this final rule to implement the approved
provisions of Amendment 8 to the Fishery Management Plan (FMP) for the
Summer Flounder and Scup Fisheries. Amendment 8 implements management
measures for the scup fishery in order to reduce fishing mortality and
to allow the stock to rebuild.
EFFECTIVE DATE: September 23, 1996.
ADDRESSES: Copies of Amendment 8, the final environmental impact
statement (FEIS), the regulatory impact review, and other supporting
documents are available upon request from David R. Keifer, Executive
Director, Mid-Atlantic Fishery Management Council, Room 2115, Federal
Building, 300 South New Street, Dover, DE 19901-6790.
Comments regarding burden-hour estimates for collection-of-
information requirements contained in this final rule should be sent to
Dr. Andrew A. Rosenberg, Regional Director, 1 Blackburn Drive,
Gloucester, MA 01930 and the Office of Information and Regulatory
Affairs, Office of Management and Budget (OMB), Washington, DC, 20503
(Attention: NOAA Desk Officer).
FOR FURTHER INFORMATION CONTACT: Regina L. Spallone, Fishery Policy
Analyst, 508-281-9221.
SUPPLEMENTARY INFORMATION:
Background
This final rule implements approved measures contained in Amendment
8 to the FMP, which was approved by NMFS on behalf of the Secretary of
Commerce (Secretary) on July 29, 1996. Amendment 8 was prepared by the
Mid-Atlantic Fishery Management Council (Council) in consultation with
the Atlantic States Marine Fisheries Commission (ASMFC) and the New
England and South Atlantic Fishery Management Councils. Background
concerning the development of Amendment 8 was provided in the notice of
proposed rulemaking (61 FR 27851, June 3, 1996), and is not repeated
here. Amendment 8 revises the summer flounder (Paralichthys dentatus)
FMP to include management measures for the scup (Stenotomus chrysops)
fishery pursuant to the Magnuson Fishery Conservation and Management
Act, as amended (Magnuson Act). The management unit for the scup
fishery covered by this amendment is U.S. waters of the western
Atlantic Ocean from 35 deg.15.3' N. lat., the latitude of Cape Hatteras
Light, NC, northward to the United States-Canada border.
NMFS, on behalf of the Secretary, disapproved six measures proposed
in Amendment 8 upon preliminary evaluation of the amendment as
authorized by section 304(a)(1)(A)(ii) of the Magnuson Act. A revision
of three of those disapproved measures was submitted by the Council
(referred to as the revised portion of Amendment 8). A notice of
availability of the revised portion of Amendment 8 was published on
August 6, 1996 (61 FR 40180), and the proposed rule to implement the
revised portion of Amendment 8 will be published shortly. A decision on
approval or disapproval of the revised portion of Amendment 8 is
pending.
This rule implements measures in Amendment 8 that are expected to
reduce the fishing mortality rate for scup and allow the stock to
rebuild. The proposed rule for this action would have amended 50 CFR
part 625, at that time the regulations implementing the
[[Page 43421]]
Fishery Management Plan for the Summer Flounder Fishery. However, as
part of the President's Regulatory Reinvention Initiative, regulations
implementing all fishery management plans for the marine fisheries of
the Northeast region were consolidated into one CFR part, 50 CFR part
648, published July 3, 1996 (61 FR 34966). Therefore, this rule
implements final scup measures by amending 50 CFR part 648.
Incorporation of Emergency Measures Into the Final Rule
On March 27, 1996 (61 FR 13452), NMFS published an emergency rule
that imposed management measures for scup, effective through June 25,
1996, and, subsequently, extended through September 23, 1996 (61 FR
33382, June 27, 1996). The emergency rule established minimum fish
sizes for both the commercial and recreational fisheries, and a minimum
codend mesh size for commercial fishing vessels possessing more than
the threshold level of scup on board in the exclusive economic zone
(EEZ). This final rule implements permanently those measures that were
contained in both the emergency rule and the proposed rule for
Amendment 8.
Amendment 8 Measures
This final rule implements a moratorium on new entrants into the
commercial scup fishery, implements restrictions on the size of vessels
allowed as a replacement for a moratorium eligible vessel, requires
charter/party vessel, dealer, and operator permits, and establishes
reporting and recordkeeping requirements. This rule also implements the
following measures, which may be adjusted annually through the review
process specified in Amendment 8: Minimum fish sizes; a minimum mesh
size for otter trawl vessels possessing a specified threshold catch
level, which is initially specified at 4,000 lb or more (1,814 kg or
more) of scup; a maximum roller size; pot and trap gear requirements;
and a requirement that scup pots and traps have hinges and fasteners on
one panel or door made of degradable materials. Gear-specific seasonal
and area closures, modifications to the recreational season, possession
limit, and minimum size may also be implemented if the Council deems
them necessary in its annual review process. A coastwide harvest limit
will be specified in the second year of the FMP at a level that will
reduce the exploitation rate to the level specified in the rebuilding
schedule. This harvest limit will be allocated 78 percent to the
commercial fishery, via a coastwide commercial quota, and 22 percent to
the recreational fishery, via a recreational harvest limit. The
coastwide harvest limit will be set annually following the annual
review process set forth in this rule.
The Council and the ASMFC may, in the future, alter the system to
distribute and manage the annual commercial quota. Coastwide, regional,
and state-by-state quotas may be considered in combination with
different fractions of the fishing year.
Comments and Responses
Written comments from the Commonwealth of Massachusetts, Division
of Marine Fisheries (MADMF), U.S. Coast Guard (USCG), Council, and the
U.S. Small Business Administration, Office of Advocacy (SBA), and one
member of the public, were received during the public comment period.
Comment: MADMF commented that the amendment lacks restrictions such
as trip limits to slow the catch, and questioned whether the quota
strategy complies with national standard 4 of the Magnuson Act. MADMF
believes that this strategy could result in the entire EEZ's being
closed to the harvest of scup by April, precluding the Massachusetts
inshore scup fishery from being prosecuted. MADMF also commented that,
although the Council currently contemplates drafting a regulatory
amendment to revise the quota management system, it will not be
implemented in time for setting the 1997 quota.
Response: NMFS recognizes that no mechanism exists in the current
rule to establish trip limits to regulate further the scup catch in
1997 under a coastwide quota system. However, provisions do exist in
this rule that will control fishing (e.g., season and area closures).
Restrictions on gear, and season and area closures are measures that
the Council may adopt during the annual review process. The Council is
aware of the time frame necessary to implement any changes to the quota
system. Although time is short, a revision could still be in effect by
January 1, 1997, if the Council and the ASMFC are able to agree on an
acceptable alternative to the coastwide quota system.
Comment: MADMF recommended that NMFS postpone a decision on the
quota management approach until details are finalized.
Response: NMFS, on behalf of the Secretary, may only approve or
disapprove measures included in a proposed amendment. Disapproval must
be based upon inconsistency with the national standards or other
applicable law. The current quota strategy in Amendment 8 has been
determined to be consistent with the national standards of the Magnuson
Act, and other applicable law. Further, to postpone the implementation
of the quota, and hence to implement a FMP without any mechanism in
place by which to reduce overfishing or reach the exploitation rate
goals established in the FMP, would raise serious questions with this
FMP's compliance with national standard 1. Despite the concerns that
MADMF has raised, the scup stock is in serious need of management at
this time, and the coastwide quota is one of the primary mechanisms by
which that management will be achieved.
Comment: MADMF questioned how NMFS would enforce a quota since
state waters would be open to commercial fishing, and most scup
harvesters in the state do not have federally permitted vessels.
Response: The FMP is a joint plan authored by both the Council and
ASMFC. As a joint plan, it is expected that states will assist in the
implementation of the management strategy by enforcing closures of the
state waters scup fishery when the quota is harvested. If states do not
do that, the stock rebuilding strategy will be severely compromised.
While some harvesters fish exclusively in state waters, those who
intend to fish for scup in the EEZ north of 35 deg.15.3' N. lat. will,
as a result of the implementation of this rule, be required to obtain a
Federal moratorium permit in 1997. As a condition of that permit, they
must agree that the vessel and its fishing activity, catch and
pertinent gear (without regard to whether such fishing occurs in the
EEZ or landward of the EEZ and without regard to where such fish or
gear are possessed, taken, or landed) are subject to all the
requirements of that permit, unless specifically exempted. Further,
owners or operators of vessels issued a Federal moratorium scup permit
also must agree, as a condition of that permit, not to land scup after
the effective date of the notification published in the Federal
Register stating that the commercial quota had been harvested.
Comment: The USCG questioned NMFS' disapproval of the provision
requiring boxing at sea. The USCG noted that the exact weight is almost
impossible to determine at sea; boxing the catch, allows a relatively
accurate catch estimate to be made. The lack of a boxing requirement
also presents problems for fishing vessels with a refrigerated sea
water (RSW) hold, as the
[[Page 43422]]
USCG cannot verify the amount of fish on board a vessel using such a
system.
Response: The provision that would have required fishing vessels
using small mesh to box scup catches of less than 4,000 lb (1,814 kg)
in standard 100-lb (45.4-kg) totes to facilitate enforcement of the
mesh provisions was disapproved during a preliminary review of
Amendment 8. A vessel could have been required to have up to 40 of
these containers on board. Boxing and storing up to 40 totes could
prove infeasible for small vessels. As there is nothing in the
administrative record regarding the impact of this measure on the
industry, this measure was disapproved as being arbitrary and
capricious, and, therefore, in violation of the Administrative
Procedure Act (APA).
NMFS recognizes the USCG's desire to enhance the enforcement of the
minimum mesh requirement. The regulations that require a vessel
possessing less than the threshold level of scup on board to have the
scup stored separately and kept readily available for inspection, will
aid at-sea enforcement of the measure.
Comment: The USCG stated their preference for one mesh on board and
for mesh size restrictions to be effective throughout the net. The USCG
noted that requiring a minimum mesh size throughout the entire net
eliminates the practice of choking off the codend and fishing with the
smaller, legal mesh forward of the codend.
Response: NMFS recognizes that the inclusion of a multiple mesh on
board provision increases the difficulty of enforcing the mesh
restrictions. However, the minimum fish size will significantly
decrease the incentive to circumvent mesh restrictions. Further,
prohibiting vessels from carrying multiple mesh nets would preclude
them from fishing lawfully in the traditional mixed trawl fisheries in
this area. Multiple mesh nets on board is currently authorized in all
of the mixed trawl fisheries in the Southern New England/Mid-Atlantic
area for this reason.
To address the concerns raised by the USCG, the Council and
Commission have committed to reevaluating the codend mesh requirements.
This final rule includes a provision that would allow the Scup
Monitoring Committee to, each year, determine the allowable levels of
fishing and other restrictions necessary to achieve the exploitation
rates specified in the rebuilding schedule. This provision would allow
for changes in the minimum mesh requirements, including the requirement
that minimum mesh apply throughout the net.
Comment: The Council submitted a comment to clarify the language in
the proposed rule regarding ``equivalent'' rectangular escape vents in
scup pots. ``Equivalent'' the comment reads, ``refers to the size of
the scup that would be retained by a rectangular vent * * * An
equivalent rectangular vent would allow the same size scup (i.e., less
than 9.0'') to escape from the trap.''
Response: As no studies have been done with regard to the width of
a scup's body, and consequently no data exist to sufficiently calculate
appropriate equivalent rectangular vents (square vents require only the
height of the scup to calculate), NMFS interprets this to mean that
rectangular vents may not have sides less than the side specified by
the Council for a square vent, i.e., less than 2.25 inches (5.7 cm).
Comment: The SBA questioned the adequacy of the certification that
this rule will not have a significant impact on a substantial number of
small entities, especially in light of the fact that the Council's
Amendment 8 had concluded that, because of the cost of some
participants in this fishery of purchasing new roller gear or codends
to comply with the proposed regulations, a substantial number of small
entities would be impacted, some significantly.
Response: Contrary to the initial determination of the Council,
this rule will not have a significant economic impact on a substantial
number of small entities. As the Council indicated, compliance with
this rule may reduce gross revenues by more than 5 percent for some
small entity participants, or increase operating costs by more than 5
percent for some small entity participants who have to purchase new
gear (rollers, $1,200-1,500; codends, $700). However, based on the
analysis in the amendment, NMFS believes that a substantial number of
small entities will not be impacted. Amendment 8 presents data
demonstrating that the participants in this fishery rely on a mixed
species fishery involving squid, summer flounder, Atlantic mackerel,
silver hake and other species in addition to scup. When compared to the
other species, scup is a relatively low-value species for participants
in the mixed trawl fishery. The amendment presents data showing that 82
percent of the scup harvested in the period 1983-92 were landed in the
States of Rhode Island, New Jersey and New York, with scup landings in
those states representing only 2.0 percent, 2.3 percent, and 2.1
percent, respectively, of the total commercial value of all other
species landed. If the costs of new gear forced these harvesters to
forego all of their scup landings, NMFS believe that it is unlikely
that the impact on their gross revenues would exceed 5 percent for more
than a few individuals. In addition, because the minimum mesh
requirement is not triggered until a harvester reaches the threshold
catch level (4,000 lbs) (1,814 kg), even entities that are unable to
purchase a codend of the required mesh size would not be required to
forego all of their scup catch. NMFS also notes that at some time or
another, harvesters must replace codends and rollers as a routine cost
of doing business, so not all of the costs should be attributed to the
gear requirements.
Comment: One member of the public commented that in his opinion the
minimum mesh size of 4 inches (10.2 cm) for trawl gear is incompatible
with the commercial minimum fish size of 9 inches (22.9 cm). He states
that the minimum mesh size should be larger to prevent discards of
sublegal fish.
Response: The Council adopted the 4 inch (10.2 cm) codend mesh size
restriction based on industry comments stating that the mesh was the
appropriate size for a 9 inch (22.9 cm) scup. NMFS has approved the
mesh size, which has been in effect for the fishery under emergency
regulations since March 22, 1996. If information is brought forth to
indicate that it is warranted, the minimum mesh size, and other gear
restrictions, can be modified through the Council's annual review
process.
Changes From the Proposed Rule
This final rule implements the provisions of Amendment 8 by
amending 50 CFR part 648, Fisheries of the Northeastern United States.
The proposed rule would have amended 50 CFR part 625, the Summer
Flounder Fishery, which as part of the President's Regulatory
Reinvention Initiative was consolidated into part 648. As a result of
this regulatory consolidation, and to clarify the intent of this rule,
the final rule does not use the same regulatory language as the
proposed rule, but the measures are substantively the same. In some
cases, fisheries other than scup managed under part 648 may be
referenced in the regulatory language. The regulations governing these
other fisheries have not been amended here, and their mention in the
regulatory language is merely to reduce confusion for the reader. In
addition, regulatory text concerning the maximum size of otter trawl
roller gear, which was inadvertently omitted from the proposed rule, is
added (the proposed
[[Page 43423]]
rule contained a prohibition and a discussion on roller gear in the
preamble). The changes from the proposed rule are as follows:
Section 625.31 was consolidated with Sec. 648.1(a) to add ``scup''
to the Fishery Management Plan for the Summer Flounder Fishery as ``the
summer flounder and scup fishery (Summer Flounder and Scup FMP)''.
Section 625.32 was consolidated with Sec. 648.2, which already
included most of the required definitions. ``Scup Monitoring
Committee,'' and ``Total Length,'' were added, and the definition of
``Council'' was revised.
Section 625.33 is already included in Sec. 648.3.
Section 625.34 was consolidated with Sec. 648.4 to include vessel
permit requirements for scup.
Section 625.35 was consolidated with Sec. 648.5, to add operators
of scup vessels to the list of fisheries in paragraph (a) requiring
such permits.
Section 625.36 was consolidated with Sec. 648.6, to add dealers/
processors of scup to the list of fisheries in paragraph (a) requiring
such permits.
Section 625.37 was consolidated with Sec. 648.7, to include
recordkeeping and reporting requirements for fishing vessels and
dealer/processors in the scup fishery.
Section 625.38 is already included in Sec. 648.8.
Section 625.39 was consolidated with Sec. 648.14 to include
prohibitions for the scup fishery by revising paragraph (a) to add
paragraphs (80) through (88); (k) to add paragraphs (1) through (11);
and (l) to add paragraphs (1) through (4); and by adding paragraph
(u)(6).
Sections 625.40 and 625.41 are already included in Secs. 648.15 and
648.16, respectively.
Section 625.50 was added to subpart H as Sec. 648.120.
Section 625.51 was added to subpart H as Sec. 648.121. Non-
substantive changes were made to the text of this section to clarify
the process and to reflect more accurately the Council's intent.
Section 625.52 was added to subpart H as Sec. 648.122. Non-
substantive changes were made to the text of this section to clarify
the process and to reflect more accurately the Council's intent.
Section 625.53 was added to subpart H as Sec. 648.123. Non-
substantive changes were made to the text of this section to clarify
the process and to reflect more accurately the Council's intent.
Section 625.54 was added to subpart H as Sec. 648.124. Non-
substantive changes were made to the text of this section to clarify
the process and to more accurately reflect the Council's intent.
Section 625.55 was added to subpart H as Sec. 648.125. Non-
substantive changes were made to the text of this section to clarify
the process and to reflect more accurately the Council's intent.
Section 625.56 was consolidated with Sec. 648.11, revising
paragraphs (a) and (e) to include sea sampler/observer coverage in the
scup fishery.
Section 625.57 was consolidated with Sec. 648.12 and revised to
include experimental exemptions in the scup fishery under subpart H.
Section 625.58 was added in subpart H as Sec. 648.126.
Under NOAA Administrative Order 205-11, 7.01, dated December 17,
1990, the Under Secretary for Oceans and Atmosphere has delegated
authority to sign material for publication in the Federal Register to
the Assistant Administrator for Fisheries, NOAA.
Classification
The Director, Northeast Region, NMFS, determined that Amendment 8
is necessary for the conservation and management of the scup fishery
and that it is consistent with the Magnuson Act and other applicable
law.
The Council prepared an FEIS for Amendment 8; a notice of
availability was published on June 7, 1996 (61 FR 29094). The Assistant
Administrator for Fisheries, NOAA (AA) determined, upon review of the
FEIS and public comments, that the rule is environmentally preferable
to the status quo. This rule would reduce exploitation, increase long-
term yields, and thus reduce the risk of stock collapse for the scup
fishery.
This rule has been determined to be not significant for purposes of
E.O. 12866.
Notwithstanding any other provision of law, no person is required
to respond to nor shall a person be subject to a penalty for failure to
comply with a collection of information subject to the requirements of
the Paperwork Reduction Act (PRA) unless that collection of information
displays a currently valid OMB control number.
This rule contains new collection-of-information requirements
subject to the PRA. These collection-of-information requirements have
been approved by OMB, and the OMB control numbers and public reporting
burden are listed as follows:
1. Dealer employment data (6 minutes per response), under OMB #
0648-0018.
2. Operator permits, (1 hour per response), vessel moratorium
permits (30 minutes per response), moratorium permit appeals (30
minutes per response), party and charter boat permits (30 minutes per
response), dealer/processor permits (5 minutes per response), under OMB
# 0648-0202.
3. Vessel/party/charter boat logbooks (5 minutes per response)
under OMB # 0648-0212.
4. Dealer reporting responses (2 minutes per response) under OMB #
0648-0229.
The estimated response times include the time needed for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection-of-information. Send comments regarding burden estimates, or
any other aspect of these data collections, including suggestions for
reducing the burden, to NMFS and OMB (see ADDRESSES).
A reinitiation of a section 7 consultation under the Endangered
Species Act was completed on February 29, 1996, on the summer flounder,
scup, and black sea bass fisheries. The opinion concludes that the
effects of the three fisheries, along with associated NMFS management
actions, may adversely affect listed or proposed species, but are not
likely to jeopardize their continued existence and will not result in
the destruction or adverse modification of designated critical habitat.
The Assistant General Counsel for Legislation and Regulation of the
Department of Commerce certified to the Chief Counsel for Advocacy of
the Small Business Administration, that this rule would not have a
significant economic impact on a substantial number of small entities.
As a result, a Regulatory Flexibility Analysis was not prepared.
Compliance with Amendment 8, as indicated by the Council, may reduce
gross revenues by more than 5 percent, or increase operating costs by
more than 5 percent for some small entities who have to purchase new
gear (rollers or codends). However, based on an analysis of Amendment
8, it is unlikely that these purchases would be required by more than
20 percent of the small entities, specifically, otter trawl vessels,
engaged in this fishery. Additionally, harvesters must replace codends
and rollers as a routine cost of doing business, so not all costs can
be attributed to the gear requirements. Thus, NMFS determined, despite
the initial determination of the Council, that this rule would not have
a significant impact on a substantial number of small entities.
List of Subjects
50 CFR Part 902
Reporting and recordkeeping requirements.
[[Page 43424]]
50 CFR Part 648
Fisheries, Fishing, Reporting and recordkeeping requirements.
Dated: August 19, 1996.
C. Karnella,
Acting Program Management Officer, National Marine Fisheries Service,
National Oceanic and Atmospheric Administration.
For the reasons set out in the preamble, 15 CFR chapter IX and 50
CFR chapter VI are amended as follows:
15 CFR CHAPTER IX
PART 902--NOAA INFORMATION COLLECTION REQUIREMENTS UNDER THE
PAPERWORK REDUCTION ACT: OMB CONTROL NUMBERS
1. The authority citation for part 902 continues to read as
follows:
Authority: 44 U.S.C. 3501 et seq.
2. In Sec. 902.1, in paragraph (b), the table, the following
entries are added to read as follows:
Sec. 902.1 OMB control numbers assigned pursuant to the Paperwork
Reduction Act.
* * * * *
(b) * * *
------------------------------------------------------------------------
CFR part section where the
information collection requirement is Current OMB control number (all
located numbers begin with 0648-)
------------------------------------------------------------------------
* * * * *
50 CFR
* * * * *
648.4................................ -0202
648.5................................ -0202
648.6................................ -0202
648.7................................ -0018, -0202,
-0212, and -0229
* * * * *
------------------------------------------------------------------------
50 CFR CHAPTER VI
PART 648--FISHERIES OF THE NORTHEASTERN UNITED STATES
3. The authority citation for part 648 continues to read as
follows:
Authority: 16 U.S.C. 1801 et seq.
4. In Sec. 648.1, paragraph (a) is revised to read as follows:
Sec. 648.1 Purpose and scope.
(a) This part implements the fishery management plans (FMP) for the
Atlantic mackerel, squid, and butterfish fisheries (Atlantic Mackerel,
Squid, and Butterfish FMP); Atlantic salmon (Atlantic Salmon FMP); the
Atlantic sea scallop fishery (Atlantic Sea Scallop FMP (Scallop FMP));
the Atlantic surf clam and ocean quahog fisheries (Atlantic Surf Clam
and Ocean Quahog FMP); the Northeast multispecies fishery (NE
Multispecies FMP); and the summer flounder and scup fisheries (Summer
Flounder and Scup FMP). These FMPs and the regulations in this part
govern the conservation and management of the above named fisheries.
* * * * *
5. In Sec. 648.2, the definitions for ``Scup Monitoring Committee''
and ``Total Length'' are added, in alphabetical order, and the
definition for ``Council'' is revised to read as follows:
Sec. 648.2 Definitions.
* * * * *
Council means the New England Fishery Management Council (NEFMC)
for the Atlantic sea scallop and the Northeast multispecies fisheries,
or the Mid-Atlantic Fishery Management Council (MAFMC) for the Atlantic
mackerel, squid, and butterfish; the Atlantic surf clam and ocean
quahog; and the summer flounder and scup fisheries.
* * * * *
Scup Monitoring Committee means a committee made up of staff
representative of the MAFMC, NEFMC, South Atlantic Fishery Management
Council, the NMFS Northeast Regional Office, the NEFSC, and the
Commission. The MAFMC Executive Director or a designee chairs the
committee.
* * * * *
Total Length (TL) means the straight-line distance from the tip of
the snout to the end of the tail (caudal fin) while the fish is lying
on its side.
* * * * *
6. In Sec. 648.4, paragraph (a)(6) is added and paragraph (b) is
revised to read as follows:
Sec. 648.4 Vessel permits.
(a) * * *
(6) Scup vessels. Beginning on January 1, 1997, and subject to the
eligibility requirements specified in paragraphs (a)(6)(i) and
(a)(6)(ii) of this section, the owner of a vessel of the United States,
including a party or charter vessel, must obtain a permit issued under
this part to fish for or retain scup for sale, barter or trade, in or
from the EEZ north of 35 deg.15.3' N. lat. Any vessel, other than a
party or charter boat, that observes the possession limit restrictions
established pursuant to, and the prohibition on sale specified in,
Sec. 648.125 is exempt from the permit requirement.
(i) Moratorium permit--(A) Eligibility. A vessel is eligible for a
moratorium permit to fish for and retain scup for sale if it meets any
of the following criteria:
(1) The vessel landed and sold scup between January 26, 1988, and
January 26, 1993; or
(2) The vessel is replacing such a vessel and meets the
requirements of paragraph (a)(3)(i)(C) of this section.
(B) Application/renewal restrictions. (1) No one may apply for an
initial scup moratorium permit after August 25, 1997.
(2) No one may apply for a scup moratorium permit after the owner
retires the vessel from the fishery.
(C) Replacement vessels. See paragraph (a)(3)(i)(C) of this
section.
(D) Appeal of denial of permit. (1) Any applicant denied a scup
moratorium permit may appeal to the Regional Director within 30 days of
the notice of denial. Any such appeal shall be in writing. The only
ground for appeal is that the Regional Director erred in concluding
that the vessel did not meet the criteria in paragraph (a)(6)(i)(A)(1)
of this section. The appeal shall set forth the basis for the
applicant's belief that the Regional Director's decision was made in
error.
(2) The appeal may be presented, at the option of the applicant, at
a hearing before an officer appointed by the Regional Director.
(3) The hearing officer shall make a recommendation to the Regional
Director.
(4) The decision on the appeal by the Regional Director is the
final decision of the Department of Commerce.
(ii) Party and charter boat permit. Any party or charter boat is
eligible for a permit to fish for scup, other than a scup moratorium
permit, if it is carrying passengers for hire. Such vessel must observe
the possession limits established pursuant to, and the prohibitions on
sale specified in, Sec. 648.125.
(b) Permit conditions. Vessel owners who apply for a fishing vessel
permit under this section must agree as a condition of the permit that
the vessel and the vessel's fishing activity, catch, and pertinent gear
(without regard to whether such fishing occurs in the EEZ or landward
of the EEZ, and without regard to where such fish or gear are
possessed, taken or landed), are subject to all requirements of this
part, unless exempted from such requirements under this part. All such
fishing activities, catch, and gear will remain subject to all
applicable state requirements. Except as otherwise provided in this
part, if a requirement of this part and a management measure required
by a state or local law differ, any vessel owner permitted to fish in
the EEZ for any species managed under this part must comply with the
more
[[Page 43425]]
restrictive requirement. Owners and operators of vessels fishing under
the terms of a summer flounder moratorium permit must also agree not to
land summer flounder in any state after the Regional Director has
published a notification in the Federal Register stating that the
commercial quota for that state has been harvested, and that no
commercial quota is available. A state not receiving an allocation of
summer flounder is deemed to have no commercial quota available. Owners
and operators of vessels fishing under the terms of a scup moratorium
permit must also agree not to land scup after the Regional Director has
published a notification in the Federal Register stating that the
commercial quota has been harvested. Owners or operators fishing for
surf clams and ocean quahogs within waters under the jurisdiction of
any state that requires cage tags are not subject to any conflicting
Federal minimum size or tagging requirements. If a surf clam and ocean
quahog requirement of this part differs from a surf clam and ocean
quahog management measure required by a state that does not require
cage tagging, any vessel owners or operator permitted to fish in the
EEZ for surf clams and ocean quahogs must comply with the more
restrictive requirement while fishing in state waters. However,
surrender of a surf clam and ocean quahog vessel permit by the owner by
certified mail addressed to the Regional Director allows an individual
to comply with the less restrictive state minimum size requirement, so
long as fishing is conducted exclusively within state waters.
* * * * *
7. In Sec. 648.5, the first sentence of paragraph (a) is revised to
read as follows:
Sec. 648.5 Operator permits.
(a) General. Any operator of a vessel fishing for or possessing sea
scallops in excess of 40 lb (18.1 kg), NE multispecies, and, as of
January 1, 1997, mackerel, squid or butterfish, or scup, harvested in
or from the EEZ, or issued a permit for these species under this part,
must have and carry on board a valid operator's permit issued under
this section. * * *
* * * * *
8. In Sec. 648.6, paragraph (a) is revised to read as follows:
Sec. 648.6 Dealer/processor permits.
(a) General. All NE multispecies, sea scallop, summer flounder,
surf clam and ocean quahog dealers, and surf clam and ocean quahog
processors must have been issued and have in their possession a permit
for such species issued under this section. As of January 1, 1997, all
mackerel, squid, or butterfish dealers and all scup dealers must have
been issued and have in their possession a valid dealers permit for
those species.
* * * * *
9. In Sec. 648.7, the first sentence in each of paragraphs
(a)(1)(i), (a)(2)(i), (b)(1)(i), and (b)(1)(iii), and paragraph (f)(3)
are revised to read as follows:
Sec. 648.7 Recordkeeping and reporting requirements.
(a) * * *
(1) * * *
(i) Summer flounder, scallop, NE multispecies, and, as of January
1, 1997, mackerel, squid or butterfish, and scup dealers must provide:
Name and mailing address of dealer, dealer number, name and permit
number of the vessels from which fish are landed or received, dates of
purchases, pounds by species, price by species, and port landed. * * *
* * * * *
(2) * * *
(i) Summer flounder, scallop, NE multispecies, and, as of January
1, 1997, mackerel, squid, or butterfish, and scup dealers must complete
the ``Employment Data'' section of the Annual Processed Products
Reports; completion of the other sections of that form is voluntary. *
* *
* * * * *
(b) * * *
(1) * * *
(i) Owners of vessels issued a moratorium permit for summer
flounder, mackerel, squid, or butterfish, or scup, or a permit for sea
scallop, or multispecies. The owner or operator of any vessel issued a
moratorium vessel permit for summer flounder, or, as of January 1,
1997, for mackerel, squid, or butterfish, or scup, or a permit for sea
scallops, or NE multispecies, must maintain on board the vessel, and
submit, an accurate daily fishing log report for all fishing trips,
regardless of species fished for or taken, on forms supplied by or
approved by the Regional Director. * * *
* * * * *
(iii) Owners of party and charter boats. The owner of any party or
charter boat issued a summer flounder or scup permit other than a
moratorium permit and carrying passengers for hire shall maintain on
board the vessel, and submit, an accurate daily fishing log report for
each charter or party fishing trip that lands summer flounder or scup,
unless such a vessel is also issued a moratorium permit for summer
flounder, a permit for sea scallops or multispecies, or, as of January
1, 1997, a moratorium permit for mackerel, squid, or butterfish, or
scup, in which case a fishing log report is required for each trip
regardless of species retained. * * *
* * * * *
(f) * * *
(3) At-sea purchasers, receivers, or processors. All persons
purchasing, receiving, or processing any summer flounder, or, as of
January 1, 1997, mackerel, squid, or butterfish, or scup, at sea for
landing at any port of the United States must submit information
identical to that required by paragraph (a)(1) or (a)(2) of this
section, as applicable, and provide those reports to the Regional
Director or a designee on the same frequency basis.
10. In Sec. 648.11, the first sentence of paragraph (a), paragraph
(e) introductory text, paragraphs (e)(1) and (e)(2) are revised to read
as follows:
Sec. 648.11 At-sea sea sampler/observer coverage.
(a) The Regional Director may request any vessel holding a permit
for sea scallop or NE multispecies; or a moratorium permit for summer
flounder; or, as of January 1, 1997, a mackerel, squid, or butterfish,
or scup permit to carry a NMFS-approved sea sampler/observer. * * *
* * * * *
(e) The owner or operator of a vessel issued a summer flounder or
scup moratorium permit, if requested by the sea sampler/observer also
must:
(1) Notify the sea sampler/observer of any sea turtles, marine
mammals, summer flounder or scup, or other specimens taken by the
vessel.
(2) Provide the sea sampler/observer with sea turtles, marine
mammals, summer flounder or scup, or other specimens taken by the
vessel.
* * * * *
11. In Sec. 648.12 the introductory text is revised to read as
follows:
Sec. 648.12 Experimental fishing.
The Regional Director may exempt any person or vessel from the
requirements of subparts B (Atlantic mackerel, squid, and butterfish),
D (sea scallop), E (surf clam and ocean quahog), F (NE multispecies), G
(summer flounder), or H (scup), of this part for the conduct of
experimental fishing beneficial to the management of the resources or
fishery managed under that subpart. The Regional Director shall consult
with the Executive Director of the MAFMC regarding such exemptions for
the mackerel, squid, or butterfish, summer flounder and scup fisheries.
* * * * *
[[Page 43426]]
12. In Sec. 648.14, paragraph (t) is redesignated as paragraph (u)
and a new paragraph (t) is added and reserved, paragraphs (a)(80)
through (a)(88), and paragraph (u)(6) are added, and paragraphs (k) and
(l) are revised to read as follows:
Sec. 648.14 Prohibitions.
(a) * * *
(80) Possess scup in or harvested from the EEZ north of
35 deg.15.3' N. lat. in an area closed, or before or after a season
established pursuant to Sec. 648.122.
(81) To purchase or otherwise receive for a commercial purpose scup
harvested from the EEZ north of 35 deg.15.3' N. lat., or from a vessel
issued a scup moratorium permit after the effective date of the
notification published in the Federal Register stating that the
commercial quota has been harvested.
(82) Land scup harvested in or from the EEZ north of 35 deg.15.3'
N. lat. after the effective date of the notification published in the
Federal Register stating that the commercial quota has been harvested.
(83) Possess scup harvested in or from the EEZ north of
35 deg.15.3' N. lat. that do not meet the minimum fish size specified
in Sec. 648.124.
(84) Fish for, catch, or retain scup in excess of 4,000 lb (1,814
kg) in or from the EEZ north of 35 deg.15.3' N. lat. unless the vessel
meets the gear restrictions in Sec. 648.123.
(85) Fish for, catch, or retain scup in or from the EEZ north of
35 deg.15.3' N. lat. for sale, barter, or trade, after January 1, 1997,
unless the vessel has been issued a valid moratorium permit pursuant to
Sec. 648.4(a)(6).
(86) Sell or transfer scup harvested in or from the EEZ north of
35 deg.15.3' N. lat. after January 1, 1998, unless the vessel has been
issued a valid moratorium permit pursuant to Sec. 648.4(a)(6).
(87) Fish for, catch, or retain scup in or from the EEZ north of
35 deg.15.3' N. lat. on board a party or charter boat after January 1,
1997, unless the vessel has been issued a valid party or charter boat
permit pursuant to Sec. 648.4(a)(6)(ii).
(88) Fish with or possess scup pots or traps in the EEZ north of
35 deg.15.3' N. lat. that have a rectangular escape vent, any side of
which is less than 2.25 inches (5.7 cm) in length.
* * * * *
(k) In addition to the general prohibitions specified in
Sec. 600.725 of this chapter and in paragraph (a) of this section, it
is unlawful for any person owning or operating a vessel issued a scup
permit (including a moratorium permit) to do any of the following:
(1) Possess scup in excess of the threshold amount specified in
Sec. 648.123, unless the vessel meets the minimum mesh-size
restrictions specified in Sec. 648.123.
(2) Fail to keep scup separate from other species if fishing with
nets having mesh that does not meet the minimum mesh-size restrictions
specified in Sec. 648.123(a).
(3) Land scup for sale after the effective date of the notification
published in the Federal Register stating that the commercial quota has
been harvested.
(4) Possess nets or netting that do not meet the minimum mesh
restrictions or that are modified, obstructed or constricted, if
subject to the minimum mesh requirements specified in Sec. 648.123(a),
unless the nets or netting are stowed in accordance with
Sec. 648.23(b).
(5) Fish with nets or netting that do not meet the minimum mesh
restriction or that are modified, obstructed or constricted while in
possession of scup in excess of the threshold amount specified in
Sec. 648.123.
(6) As of January 1, 1997, sell or transfer to another person for a
commercial purpose, other than transport on land, any scup, unless the
transferee has a dealer permit issued under Sec. 648.6.
(7) Carry passengers for hire, or carry more than three crew
members for a charter boat or five crew members for a party boat, while
fishing for scup under the terms of a moratorium permit issued pursuant
to Sec. 648.4(a)(6).
(8) Use a scup pot or trap that does not have the hinges and
fasteners made of degradable materials as specified in Sec. 648.123.
(9) Use a scup trap or pot that does not have a minimum escape vent
of the size specified in Sec. 648.123.
(10) Use roller rig trawl gear equipped with rollers greater than
the size specified in Sec. 648.123.
(11) Possess scup in, or harvested from, the EEZ in an area closed,
or before or after a season established pursuant to Sec. 648.122.
(l) In addition to the general prohibitions specified in
Sec. 600.725 of this chapter and in paragraph (a) of this section, it
is unlawful for the owner or operator of a party or charter boat issued
a scup permit (including a moratorium permit), when the boat is
carrying passengers for hire or carrying more than three crew members
if a charter boat or more than five members if a party boat, to:
(1) Possess scup in excess of the possession limit established
pursuant to Sec. 648.125.
(2) Fish for scup other than during a season established pursuant
to Sec. 648.122.
(3) Sell scup or transfer scup to another person for a commercial
purpose.
(4) Possess scup that do not meet the minimum fish size specified
in Sec. 648.124(b).
* * * * *
(u) * * *
(6) Scup. All scup possessed on board a party or charter boat
issued a permit under Sec. 648.4 are deemed to have been harvested from
the EEZ.
13. Subpart H is revised to read as follows:
Subpart H--Management Measures for the Scup Fishery
Sec.
648.120 Catch quotas and other restrictions.
648.121 Closure.
648.122 Season and area restrictions.
648.123 Gear restrictions.
648.124 Minimum fish sizes.
648.125 Possession limit.
648.126 Protection of threatened and endangered sea turtles.
Subpart H--Management Measures for the Scup Fishery
Sec. 648.120 Catch quotas and other restrictions.
(a) Annual review. The Scup Monitoring Committee shall review the
following data, subject to availability, on or before August 15 of each
year. This review will be conducted to determine the allowable levels
of fishing and other restrictions necessary to achieve an exploitation
rate of 47 percent in 1997, 1998, and 1999, 33 percent in 2000 and
2001, and 19 percent in 2002 and thereafter: Commercial and
recreational catch data; current estimates of fishing mortality; stock
status; recent estimates of recruitment; virtual population analysis
results; levels of noncompliance by fishermen or individual states;
impact of size/mesh regulations; impact of gear on the mortality of
scup; and any other relevant information.
(b) Recommended measures. Based on this review, the Scup Monitoring
Committee shall recommend the following measures to the Demersal
Species Committee of the MAFMC and the Commission to assure that the
exploitation rate specified in paragraph (a) of this section will not
be exceeded:
(1) The coastwide commercial quota will be set from a range of 0 to
the maximum allowed to achieve the specified exploitation rate.
(2) Commercial minimum fish size.
(3) Minimum mesh size.
[[Page 43427]]
(4) Recreational possession limit set from a range of 0 to 50 scup
to achieve the specified exploitation rate.
(5) Recreational minimum fish size set from a range of 7 inches
(17.8 cm) TL to 10 inches (25.4 cm) TL.
(6) Recreational season.
(7) Restrictions on gear.
(8) Season and area closures in the commercial fishery.
(c) Annual fishing measures. The Demersal Species Committee shall
review the recommendations of the Scup Monitoring Committee. Based on
these recommendations and any public comment, the Demersal Species
Committee shall recommend to the MAFMC measures necessary to assure
that the specified exploitation rate will not be exceeded. The MAFMC
shall review these recommendations, and based on these recommendations
and any public comment, recommend to the Regional Director measures
necessary to assure that the specified exploitation rate will not be
exceeded. The MAFMC's recommendation must include supporting
documentation, as appropriate, concerning the environmental and
economic impacts of the recommendations. The Regional Director shall
review these recommendations and any recommendations of the Commission.
After such review, the Regional Director will publish a proposed rule
in the Federal Register by October 15 to implement a coastwide
commercial quota and recreational harvest limit and additional
management measures for the commercial fishery, and will publish a
proposed rule in the Federal Register by February 15 to implement
additional management measures for the recreational fishery, if he or
she determines that such measures are necessary to assure that the
specified exploitation rate will not be exceeded. After considering
public comment, the Regional Director will publish a final rule in the
Federal Register to implement the annual measures.
(d) Additional quota measures. The commercial quota will be
implemented as a coastwide quota, applicable to that area of the EEZ
from 35 deg.15.3' N. lat. to the United States/Canada border. The MAFMC
and Commission may revise the coastwide quota system to distribute and
manage the annual commercial quota allocation in accordance with the
procedures set forth in this section. Vessel trip limits, as well as
coastwide, regional and state-by-state quotas may be considered in
combination with different fractions of the fishing year. Any
modification to the coastwide quota system shall be published as a
proposed rule in the Federal Register with a 45-day public comment
period. After considering public comment on the proposed rule, a final
rule shall be published in the Federal Register to implement the
appropriate modification.
Sec. 648.121 Closure.
The Regional Director will monitor the harvest of commercial quota
based on dealer reports, state data, and other available information
and shall determine the date when the commercial quota will be
harvested. The Regional Director shall close the EEZ to fishing for
scup by commercial vessels for the remainder of the calendar year by
publishing notification in the Federal Register advising that,
effective upon a specific date, the commercial quota has been
harvested, and notifying vessel and dealer permit holders that no
commercial quota is available for landing scup.
Sec. 648.122 Season and area restrictions.
If the MAFMC determines through its annual review process that
seasonal restrictions or area closures are necessary for the commercial
or recreational sectors to assure that the exploitation rate is not
exceeded, or to attain other FMP objectives, such measures will be
enacted through the procedure specified in Sec. 648.120.
Sec. 648.123 Gear restrictions.
(a) Trawl vessel gear restrictions--(1) Minimum mesh size. The
owners or operators of otter trawlers issued a scup moratorium permit,
and that possess 4,000 lb or more (1,814 kg or more) of scup, must fish
with nets that have a minimum mesh size of 4 inches (10.2 cm) diamond
mesh applied throughout the codend for at least 75 continuous meshes
forward of the terminus of the net, or, for codends with less than 75
meshes, the minimum-mesh-size codend must be a minimum of one-third of
the net, measured from the terminus of the codend to the head rope,
excluding any turtle excluder device extension. Scup on board these
vessels shall be stored separately and kept readily available for
inspection.
(2) Mesh-size measurement. Mesh sizes will be measured according to
the procedure specified in Sec. 648.104(a)(2).
(3) Net modification. The owner or operator of a fishing vessel
subject to the minimum mesh requirement in paragraph (a)(1) of this
section shall not use any device, gear, or material, including, but not
limited to, nets, net strengtheners, ropes, lines, or chafing gear, on
the top of the regulated portion of a trawl net. However, one splitting
strap and one bull rope (if present), consisting of line or rope no
more than 3 inches (7.2 cm) in diameter, may be used if such splitting
strap and/or bull rope does not constrict in any manner the top of the
regulated portion of the net, and one rope no greater that 0.75 inches
(1.9 cm) in diameter extending the length of the net from the belly to
the terminus of the codend along the top, bottom, and each side of the
net. ``Top of the regulated portion of the net'' means the 50 percent
of the entire regulated portion of the net that (in a hypothetical
situation) will not be in contact with the ocean bottom during a tow if
the regulated portion of the net were laid flat on the ocean floor. For
the purpose of this paragraph (a)(3), head ropes are not considered
part of the top of the regulated portion of a trawl net.
(4) Mesh obstruction or constriction. (i) The owner or operator of
a fishing vessel subject to the minimum mesh restriction in paragraph
(a)(1) of this section shall not use any mesh construction, mesh
configuration, or other means on or in the top of the regulated portion
of the net, as defined in paragraph (a)(3) of this section, if it
obstructs the meshes of the net in any manner.
(ii) The owner or operator of a fishing vessel subject to the
minimum mesh requirement in paragraph (a)(1) of this section may not
use a net capable of catching scup if the bars entering or exiting the
knots twist around each other.
(5) Stowage of nets. The owner or operator of an otter trawl vessel
retaining 4,000 lb or more (1,814 kg or more) of scup and subject to
the minimum mesh requirement in paragraph (a)(1) of this section, may
not have available for immediate use any net, or any piece of net, not
meeting the minimum mesh size requirement, or mesh that is rigged in a
manner that is inconsistent with the minimum mesh size. A net that
conforms to one of the methods specified in Sec. 648.23(b) and that can
be shown not to have been in recent use is considered to be not
``available for immediate use.''
(6) Roller gear. The owner or operator of an otter trawl vessel
issued a moratorium permit pursuant to Sec. 648.4(a)(6) shall not use
roller rig trawl gear equipped with rollers greater than 18 inches
(45.7 cm) in diameter.
(7) Procedures for changes. The minimum net mesh and the threshold
catch level at which it is required set forth in paragraph (a)(1) of
this section, and the maximum roller diameter set forth in paragraph
(a)(6) of this section, may be changed following the procedures in
Sec. 648.120.
[[Page 43428]]
(b) Pot and trap gear restrictions. Owners or operators of vessels
subject to this part must fish with scup pots or traps that comply with
the following:
(1) Degradable hinges. A scup pot or trap must have degradable
hinges and fasteners made of one of the following degradable materials:
(i) Untreated hemp, jute, or cotton string of \3/16\ inches (4.8
mm) diameter or smaller;
(ii) Magnesium alloy, timed float releases (pop-up devices) or
similar magnesium alloy fasteners; or
(iii) Ungalvanized or uncoated iron wire of 0.094 inches (2.4 mm)
diameter or smaller.
(2) Escape vents. (i) All scup pots or traps that have a circular
escape vent with a minimum of 3.1 inches (7.9 cm) in diameter, or a
square escape vent with a minimum of 2.25 inches (5.7 cm) for each
side, or an equivalent rectangular escape vent.
(ii) The minimum escape vent size set forth in paragraph (b)(2)(i)
of this section may be revised following the procedures in
Sec. 648.120.
Sec. 648.124 Minimum fish sizes.
(a) The minimum size for scup is 9 inches (22.9 cm) TL for all
vessels issued a moratorium permit under Sec. 648.4(a)(6). If such a
vessel is also issued a charter and party boat permit and is carrying
passengers for hire, or carrying more than three crew members if a
charter boat, or more than five crew members if a party boat, then the
minimum size specified in paragraph (b) of this section applies.
(b) The minimum size for scup is 7 inches (17.8 cm) TL for all
vessels that do not have a moratorium permit, or for party and charter
vessels that are issued a moratorium permit but are fishing with
passengers for hire, or carrying more than three crew members if a
charter boat, or more than five crew members if a party boat.
(c) The minimum size applies to whole fish or any part of a fish
found in possession, e.g., fillets. These minimum sizes may be adjusted
pursuant to the procedures in Sec. 648.120.
Sec. 648.125 Possession limit.
(a) Pursuant to the procedures in Sec. 648.120, the Regional
Director may limit the number of scup that may be possessed in or
harvested from the EEZ north of 35 deg.15.3' N. lat. by persons aboard
vessels that have not been issued a valid moratorium permit.
(b) If whole scup are processed into fillets, an authorized officer
will convert the number of fillets to whole scup at the place of
landing by dividing fillet number by 2. If scup are filleted into a
single (butterfly) fillet, such fillet shall be deemed to be from one
whole scup.
(c) Scup harvested by vessels subject to the possession limit with
more than one person aboard may be pooled in one or more containers.
Compliance with the daily possession limit will be determined by
dividing the number of scup on board by the number of persons aboard
other than the captain and crew. If there is a violation of the
possession limit on board a vessel carrying more than one person, the
violation shall be deemed to have been committed by the owner and
operator.
(d) Scup and scup parts harvested by a vessel with a moratorium or
charter or party boat scup permit, or in or from the EEZ north of
35 deg.15.3' N. lat., may not be landed with the skin removed.
Sec. 648.126 Protection of threatened and endangered sea turtles.
This section supplements existing regulations issued to regulate
incidental take of sea turtles under authority of the Endangered
Species Act under 50 CFR parts 217 and 227. In addition to the measures
required under those parts, NMFS will investigate the extent of take in
flynet gear and if deemed appropriate, may develop and certify a Turtle
Excluder Device for that gear.
[FR Doc. 96-21515 Filed 8-22-96; 8:45 am]
BILLING CODE 3510-22-P
Complete official Federal Register PDF
FR Doc. 96-21492 Idaho-Eastern Oregon Onions; Assessment Rate
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43415-43417]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21492]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 958
[Docket No. FV96-958-2 FIR]
Idaho-Eastern Oregon Onions; Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of Agriculture (Department) is adopting as a
final rule, with a correction, the provisions of an interim final rule
that established an assessment rate for the Idaho-Eastern Oregon Onion
Committee (Committee) under Marketing Order No. 958 for the 1996-97 and
subsequent fiscal periods. The Committee is responsible for local
administration of the marketing order which regulates the handling of
onions grown in designated counties in Idaho, and Malheur County,
Oregon. Authorization to assess onion handlers enables the Committee to
incur expenses that are reasonable and necessary to administer the
program.
DATES: Effective on July 1, 1996.
FOR FURTHER INFORMATION CONTACT: Martha Sue Clark, Program Assistant,
Marketing Order Administration Branch, Fruit and Vegetable Division,
AMS, USDA, P.O. Box 96456, room 2523-S, Washington, DC 20090-6456,
telephone 202-720-9918, FAX 202- 720-5698, or Robert J. Curry,
Marketing Specialist, Northwest Marketing Field Office, Fruit and
Vegetable Division, AMS, USDA, Green-Wyatt Federal Building, room 369,
1220 Southwest Third Avenue, Portland, OR 97204, telephone 503-326-
2724, FAX 503-326-7440. Small businesses may request information on
compliance with this regulation by contacting: Jay Guerber, Marketing
Order Administration Branch, Fruit and Vegetable Division, AMS, USDA,
P.O. Box 96456, room 2523-S, Washington, DC 20090-6456, telephone 202-
720-2491, FAX 202-720-5698.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement No. 130 and Order No. 958, both as
[[Page 43416]]
amended (7 CFR part 958), regulating the handling of onions grown in
designated counties in Idaho, and Malheur County, Oregon. The order is
effective under the Agricultural Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
The Department is issuing this rule in conformance with Executive
Order 12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the marketing order now in effect, Idaho-Eastern
Oregon onion handlers are subject to assessments. Funds to administer
the order are derived from such assessments. It is intended that the
assessment rate as issued herein will be applicable to all assessable
onions beginning July 1, 1996, and continuing until amended, suspended,
or terminated. This rule will not preempt any State or local laws,
regulations, or policies, unless they present an irreconcilable
conflict with this rule.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with the Secretary a
petition stating that the order, any provision of the order, or any
obligation imposed in connection with the order is not in accordance
with law and request a modification of the order or to be exempted
therefrom. Such handler is afforded the opportunity for a hearing on
the petition. After the hearing the Secretary would rule on the
petition. The Act provides that the district court of the United States
in any district in which the handler is an inhabitant, or has his or
her principal place of business, has jurisdiction to review the
Secretary's ruling on the petition, provided an action is filed not
later than 20 days after the date of the entry of the ruling.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS) has considered the
economic impact of this rule on small entities.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and the rules issued thereunder, are unique in
that they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 550 producers of Idaho-Eastern Oregon
onions in the production area and approximately 34 handlers subject to
regulation under the marketing order. Small agricultural producers have
been defined by the Small Business Administration (13 CFR 121.601) as
those having annual receipts of less than $500,000, and small
agricultural service firms are defined as those whose annual receipts
are less than $5,000,000. The majority of Idaho-Eastern Oregon onion
producers and handlers may be classified as small entities.
The Idaho-Eastern Oregon onion marketing order provides authority
for the Committee, with the approval of the Department, to formulate an
annual budget of expenses and collect assessments from handlers to
administer the program. The members of the Committee are producers and
handlers of Idaho-Eastern Oregon onions. They are familiar with the
Committee's needs and with the costs of goods and services in their
local area and are thus in a position to formulate an appropriate
budget and assessment. The assessment rate is formulated and discussed
in a public meeting. Thus, all directly affected persons have an
opportunity to participate and provide input.
The Committee met on March 21, 1996, and unanimously recommended
1996-97 expenditures of $1,115,993 and an assessment rate of $0.10 per
hundredweight of onions. In comparison, last year's budgeted
expenditures were $1,111,447. The assessment rate of $0.10 is the same
as last year's established rate. Major expenditures recommended by the
Committee for the 1996-97 year include $10,000 for Committee expenses,
$123,593 for salary expenses, $62,400 for travel and office expenses,
$60,000 each for research and export, $725,000 for promotion, and
$75,000 for a contingency fund. Budgeted expenses for these items in
1995-96 were $10,000, $121,431, $61,600, $59,340, $60,000, $724,076,
and $75,000, respectively.
The assessment rate recommended by the Committee was derived by
dividing anticipated expenses by expected shipments of Idaho-Eastern
Oregon onions. Onion shipments for the year are estimated at 8,800,000
hundredweight, which should provide $880,000 in assessment income.
Income derived from handler assessments, along with funds from interest
income and the Committee's authorized reserve, will be adequate to
cover budgeted expenses. Funds in the reserve will be kept within the
maximum permitted by the order.
An interim final rule regarding this action was published in the
May 31, 1996, issue of the Federal Register (61 FR 27250). That interim
final rule added a new subpart heading--Assessment Rates and
Sec. 958.240 to establish an assessment rate for the Committee. That
rule provided that interested persons could file comments through July
1, 1996. No comments were received.
While this rule will impose some additional costs on handlers, the
costs are in the form of uniform assessments on all handlers. Some of
the additional costs may be passed on to producers. However, these
costs will be offset by the benefits derived by the operation of the
marketing order. Therefore, the AMS has determined that this rule will
not have a significant economic impact on a substantial number of small
entities.
The assessment rate established in this rule will continue in
effect indefinitely unless modified, suspended, or terminated by the
Secretary upon recommendation and information submitted by the
Committee or other available information.
Although this assessment rate is effective for an indefinite
period, the Committee will continue to meet prior to or during each
fiscal period to recommend a budget of expenses and consider
recommendations for modification of the assessment rate. The dates and
times of Committee meetings are available from the Committee or the
Department. Committee meetings are open to the public and interested
persons may express their views at these meetings. The Department will
evaluate Committee recommendations and other available information to
determine whether modification of the assessment rate is needed.
Further rulemaking will be undertaken as necessary. The Committee's
1996-97 budget and those for subsequent fiscal periods will be reviewed
and, as appropriate, approved by the Department.
After consideration of all relevant material presented, including
the information and recommendation submitted by the Committee and other
available information, it is hereby found that this rule, as
hereinafter set forth, will tend to effectuate the declared policy of
the Act.
This final rule also adds a new subpart heading--Handling
Regulations to the Code of Federal Regulations immediately preceding
Sec. 958.328 Handling regulation.
Pursuant to 5 U.S.C. 553, it is also found and determined that good
cause exists for not postponing the effective date of this rule until
30 days after publication in the Federal Register because: (1) The
Committee needs to have sufficient funds to pay its expenses which are
incurred on a continuous
[[Page 43417]]
basis; (2) the 1996-97 fiscal period began on July 1, 1996, and the
marketing order requires that the rate of assessment for each fiscal
period apply to all assessable potatoes handled during such fiscal
period; (3) handlers are aware of this action which was unanimously
recommended by the Committee at a public meeting and is similar to
other assessment rate actions issued in past years; and (4) an interim
final rule was published on this action and provided for a 30-day
comment period, and no comments were received.
List of Subjects in 7 CFR Part 958
Marketing agreements, Onions, Reporting and recordkeeping
requirements.
Accordingly, the interim final rule amending 7 CFR part 958 which
was published at 61 FR 27250 on May 31, 1996, is adopted as a final
rule with the following change:
PART 958--ONIONS GROWN IN CERTAIN DESIGNATED COUNTIES IN IDAHO, AND
MALHEUR COUNTY, OREGON
1. The authority citation for 7 CFR part 958 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Part 958 is amended by adding a new subpart heading immediately
preceding Sec. 958.328 to read as follows:
Note: This subpart heading will appear in the Code of Federal
Regulations.
Subpart--Handling Regulations
Dated: August 16, 1996.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 96-21492 Filed 8-22-96; 8:45 am]
BILLING CODE 3410-02-P
Complete official Federal Register PDF
FR Doc. 96-21488 Conforming Book-entry Changes
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43636-43638]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21488]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Fiscal Service
31 CFR Parts 306, 350, 356, and 358
Conforming Book-entry Changes
AGENCY: Bureau of the Public Debt, Fiscal Service, Treasury.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of the Treasury is publishing final regulations
to conform existing miscellaneous regulatory provisions to new
regulations governing book-entry Treasury Bonds, Notes and Bills that
are being published as a separate rulemaking document on this date. The
changes are technical and non-substantive.
EFFECTIVE DATE: January 1, 1997.
FOR FURTHER INFORMATION CONTACT:
Walter T. Eccard, Chief Counsel (202) 219-3320, or Cynthia E. Reese,
Deputy Chief Counsel, (202) 219-3320. Copies of the final regulations
are being made available for downloading from the Bureau of the Public
Debt home page at the following address: http://www.ustreas.gov/
treasury/bureaus/pubdebt/pubdebt.html.
SUPPLEMENTARY INFORMATION: In a separate publication in this Federal
Register, the Department of the Treasury is publishing a final rule
that, on and after the effective date, will govern Treasury bonds,
notes, and bills (Treasury securities) in book-entry form held in the
commercial book-entry system (31 CFR Part 357). That rule incorporates
by reference recent and significant changes in commercial law
addressing the holding of securities in book-entry form through
intermediaries. The rule replaces existing Treasury regulations that
contain outdated legal concepts.
In this rulemaking document, existing Treasury regulations are
being amended to conform to the changes in Part 357. No other changes
of a substantive nature are being made. These various technical changes
are summarized below.
Part 306
Subpart O of Part 306 contains the provisions governing book-entry
Treasury securities that have been in effect for over twenty years.
Almost all of these provisions, including those dealing with transfer
and pledge, are being supplanted by the new regulations in 31 CFR Part
357, Subpart B (the ``TRADES'' regulations). The only provisions that
will continue to have any force on and after the effective date are
those dealing with the procedures for withdrawal of securities from
book-entry. Those provisions only apply to securities issued before
August 15, 1986, which were offered in definitive (certificated) form.
In revised Sec. 306.115, a new definition of ``Eligible book-entry
Treasury security'' has been added and the definition of ``Definitive
Treasury security'' is being retained, but otherwise the definitions in
31 CFR Sec. 357.3 will apply. Revised Sec. 306.117 contains the rules
for withdrawal of Eligible book-entry Treasury securities for
conversion to definitive form. It is based on provisions in former
Secs. 306.118(d) and (f) and 306.119. All other provisions of current
Subpart O are covered by TRADES or are obsolete.
Part 350
This Part contained the regulations governing Treasury bills that
were offered exclusively in book-entry form, beginning in 1976.\1\
Subpart C of Part 350, which related to direct access Treasury bill
accounts, was superseded by the TREASURY DIRECT regulations in Part
357, Subpart C. Subpart B of Part 350, which related to Treasury bills
held in the commercial book-entry system, was applicable until
promulgation in 1993 of the uniform offering circular, 31 CFR Part 356
(Sale and Issue of Book-Entry Treasury Bills, Notes, and Bonds,
Department of the Treasury Circular, Public Debt Series No. 1-93).
Under Secs. 356.3 and 356.5, Treasury bills were made subject to 31 CFR
Part 306 and 357. Because Treasury bills have a maturity of no longer
than one year, there are currently no unmatured Treasury bills subject
to Part 350. Therefore, Part 350 is being removed.
---------------------------------------------------------------------------
\1\ (Subpart D of Part 350 provided for issuance of definitive
bills on an exception basis for a limited period of time.)
---------------------------------------------------------------------------
Part 356
All of the changes in this Part either replace references to 31 CFR
Part 306 with Part 357, or add references to TRADES.
Part 358
One change is being made to Section 358.3 to delete language that
will no longer apply as a result of the publication of TRADES.
Procedural Requirements
This rulemaking does not meet the criteria for a ``significant
regulatory
[[Page 43637]]
action'' pursuant to Executive Order 12866. The notice and public
comment procedures requirements of the Administrative Procedure Act are
inapplicable, pursuant to 5 U.S.C. 553(a)(2). As no notice of proposed
rulemaking is required, the provisions of the Regulatory Flexibility
Act (5 U.S.C. 601, et seq.) do not apply.
There are no collections of information contained in this
rulemaking. Therefore, the Paperwork Reduction Act does not apply.
List of Subjects in 31 CFR Parts 306, 350, 356, and 358
Bonds, Federal Reserve System, Government securities, Securities.
For the reasons set forth in the preamble and under the authority
of 31 U.S.C. 3121, 31 CFR chapter II is amended as follows:
PART 306--GENERAL REGULATIONS GOVERNING U.S. SECURITIES
1. The authority citation for part 306 continues to read as
follows:
Authority: 31 U.S.C. chapter 31; 5 U.S.C. 301; 12 U.S.C. 391.
2. Section 306.115 is revised to read as follows:
Sec. 306.115 Definition of terms.
For the purposes of this subpart, the definitions provided in 31
CFR 357.3 are applicable, with the following additions:
Definitive Treasury security means a Treasury bond, note,
certificate of indebtedness, or bill issued under 31 U.S.C. chapter 31
in engraved or printed form.
Eligible book-entry Treasury security means a security maintained
in TRADES that was originally issued prior to August 15, 1986, which by
the terms of its offering circular is available in either definitive or
book-entry form.
3. Section 306.116 is removed and Sec. 306.117 is redesignated as
Sec. 306.116 and revised to read as follows:
Sec. 306.116 Scope and effect of book-entry procedure.
(a) Except as provided in Sec. 306.117, the provisions of 31 CFR
part 357, subparts A, B, and D apply.
(b) This subpart is effective January 1, 1997.
4. Section 306.118 is removed and Sec. 306.119 is redesignated as
Sec. 306.117 and revised to read as follows:
Sec. 306.117 Withdrawal of eligible book-entry Treasury securities for
conversion to definitive form.
(a) Eligible book-entry Treasury securities may be withdrawn from
TRADES by requesting delivery of like definitive Treasury securities.
(b) A Reserve bank shall, upon receipt of appropriate instructions
to withdraw eligible book-entry Treasury securities from book-entry
form in TRADES, convert such securities into definitive Treasury
securities and deliver them in accordance with such instructions; no
such conversion shall affect existing interests in such Treasury
securities.
(c) All requests for withdrawal of eligible book-entry Treasury
securities must be made prior to the maturity or date of call of the
securities.
(d) Treasury securities which are to be delivered upon withdrawal
may be issued in either registered or bearer form, to the extent
permitted by the applicable offering circular.
5. Sections 306.120, Sec. 306.121, Sec. 306.122, and the Appendix
to subpart 0 are removed.
PART 350--REGULATIONS GOVERNING BOOK-ENTRY BILLS--[REMOVED]
6. Part 350 is removed.
PART 356--SALE AND ISSUE OF MARKETABLE BOOK-ENTRY TREASURY BILLS,
NOTES, AND BONDS
7. The authority citation for part 356 continues to read as
follows:
Authority: 5 U.S.C. 301; 31 U.S.C. 3102 et seq.; 12 U.S.C. 391.
8. Section 356.2 is amended by adding the following definition in
alphabetical order:
Sec. 356.2 Definitions.
* * * * *
TRADES means the Treasury/Reserve Automated Debt Entry System.
* * * * *
9. Section 356.3 is amended by revising the introductory text and
the first sentence of paragraph (a) to read as follows:
Sec. 356.3 Book-entry securities and systems.
Securities issued subject to this part shall be held in either of
two systems for maintaining book-entry securities, as described.
Securities may be transferred from one system to the other in
accordance with Treasury regulations governing book-entry Treasury
bills, notes and bonds. See Department of the Treasury Circular, Public
Debt Series No. 2-86, as amended (31 CFR part 357).
(a) Treasury/Reserve Automated Debt Entry System (TRADES). TRADES
is established, maintained and operated by the Federal Reserve Banks
acting as fiscal agents of the United States, pursuant to 12 U.S.C.
391. * * *
* * * * *
10. Section 356.5 is amended by revising the first two sentences in
its introductory text to read as follows:
Sec. 356.5 Description of securities.
Securities offered pursuant to this part are offered exclusively in
book-entry form and are direct obligations of the United States, issued
under chapter 31 of title 31 of the United States Code. The securities
are subject to the terms and conditions set forth in this part, as well
as the regulations governing book-entry Treasury bills, notes, and
bonds (31 CFR part 357) and the offering announcements, all to the
extent applicable. * * *
* * * * *
11. Section 356.11 is amended by revising the first sentence of
paragraph (a)(2) to read as follows:
Sec. 356.11 Submission of bids.
(a) * * *
(2) If the awarded securities are to be issued in TRADES, a
submitter must have on file at a Federal Reserve Bank a certificate
listing those persons who are authorized to submit tenders on its
behalf. * * *
* * * * *
12. Section 356.17(b) is revised to read as follows:
Sec. 356.17 Responsibility for payment.
* * * * *
(b) TRADES. For securities held in TRADES, payment of the par
amount and announced accrued interest, if any, must be submitted with
the tender unless provision has been made for payment by charge to the
funds account of a depository institution.
* * * * *
13. Section 356.31 is amended by revising the first sentences of
both paragraphs (a) and (c) and all of paragraph (d) to read as
follows:
Sec. 356.31 STRIPS.
(a) General. A note or bond may be designated in the offering
announcement as eligible for the STRIPs program. At the option of the
holder, and generally at any time from its issue date until its call or
maturity, any such security may be ``stripped'' i.e., divided into
separate principal and interest components maintained in TRADES. * * *
* * * * *
(c) Reconstituting a security. Stripped interest and principal
components may be reconstituted, i.e. restored to their fully
constituted form, and maintained in TRADES. * * *
[[Page 43638]]
(d) Applicable regulations. Unless otherwise provided in this part,
notes and bonds stripped into their STRIPS components are governed by
subparts A, B and D of part 357 of this chapter.
PART 358--REGULATIONS GOVERNING CUBES (COUPONS UNDER BOOK-ENTRY
SAFEKEEPING)
14. The authority citation for part 358 continues to read as
follows:
Authority: 31 U.S.C. chapter 31; 12 U.S.C. 391.
15. Section 358.3 is revised to read as follows:
Sec. 358.3 Governing regulations.
CUBES are deemed to be securities for purposes of subparts A, B,
and D of part 357 of this chapter.
Dated: August 16, 1996.
Gerald Murphy,
Fiscal Assistant Secretary.
[FR Doc. 96-21488 Filed 8-20-96; 1:29 pm]
BILLING CODE 4810-39-P
Complete official Federal Register PDF
FR Doc. 96-21487 Extension of Port Limits of Puget Sound, Washington
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43428-43429]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21487]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Customs Service
19 CFR Part 101
[T.D. 96-63]
Extension of Port Limits of Puget Sound, Washington
AGENCY: U.S. Customs Service, Department of the Treasury.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This document amends the Customs Regulations pertaining to the
field organization of Customs by extending the geographical limits of
the consolidated port of entry of Puget Sound, Washington. The current
boundaries have been extended to include the portion of King County,
Washington, which lies between the boundaries of the Port of Seattle
and the Port of Tacoma. The boundaries have been changed because
various commercial operations requiring the services of Customs
personnel have been established in areas beyond the current limits of
the consolidated port.
EFFECTIVE DATE: September 23, 1996.
FOR FURTHER INFORMATION CONTACT: Patricia M. Duffy, Office of Field
Operations, 202-927-0540.
SUPPLEMENTARY INFORMATION:
Background
As part of a continuing program to obtain more efficient use of its
personnel, facilities, and resources, and to provide better service to
carriers, importers, and the general public, Customs is extending the
geographical limits of the consolidated port of entry of Puget Sound,
Washington. The geographical limits of the consolidated Port of Puget
Sound include Seattle, Anacortes, Bellingham, Everett, Friday Harbor,
Neah Bay, Olympia, Port Angeles, Port Townsend and Tacoma. This
document amends the port description of Puget Sound to include within
the port description of Seattle the portion of King County, Washington,
which before this document was between the boundaries of the Port of
Seattle and the Port of Tacoma. The boundaries are being changed to
help serve the various commercial operations located in the area which
require the services of Customs personnel.
The decision to extend the port limits of Seattle, and accordingly,
the port limits of the consolidated Port of Puget Sound, has been made
after a Notice of Proposed Rulemaking concerning this matter was
published in the Federal Register (60 FR 47504) on September 13, 1995,
requesting comments from the public and no comments were received.
In accordance with the decision to extend the port limits, the list
of Customs ports of entry in 19 CFR 101.3 (b)(1) is amended as
described below.
New Puget Sound Port Limits
The geographical area within the boundaries of the Consolidated
Port of Puget Sound are as follows:
The ports of Seattle (Section 35, Township 27 North, Range 3 East,
West Meridian, County of Snohomish, and the geographical area beginning
at the intersection of NW. 205th Street and the waters of Puget Sound,
proceeding in an easterly direction along the King County line to its
intersection with 100th Avenue N.E., thence southerly along 100th
Avenue N.E. and its continuation to the intersection of 100th Avenue
S.E. and S.E. 240th Street, thence westerly along S.E. 240th Street, to
its intersection with North Central Avenue, thence southerly along
North Central Avenue, its continuation as South Central Avenue and 83rd
Avenue South and its connection to Auburn Way North, thence southerly
along Auburn Way North and its continuation as
[[Page 43429]]
Auburn Way South to its intersection with State Highway 18, thence
westerly along Highway 18 to its intersection with A Street S.E., then
southerly along A Street S.E. to its intersection with the King County
Line, then westerly along the King County Line to its intersection with
the waters of Puget Sound and then northerly along the shores of Puget
Sound to its intersection with N.W. 205th Street, the point of
beginning, all within the County of King, State of Washington),
Anacortes, Bellingham, Everett, Friday Harbor, Neah Bay, Olympia, Port
Angeles, Port Townsend, and the territory in Tacoma beginning at the
intersection of the westernmost city limits of Tacoma and The Narrows
and proceeding in an easterly, then southerly, then easterly direction
along the city limits of Tacoma to its intersection with Pacific
Highway (U.S. Route 99), then proceeding in a southerly direction along
Pacific Highway to its intersection with Union Avenue Extended and
continuing in a southerly direction along Union Avenue Extended to its
intersection with the northwest corner of McChord Air Force Base, then
proceeding along the northern, then western, then southern boundary of
McChord Air Force Base to its intersection, just west of Lake Mondress,
with the northern boundary of the Fort Lewis Military Reservation, then
proceeding in an easterly direction along the northern boundary of the
Fort Lewis Military Reservation to its intersection with Pacific
Avenue, then proceeding in a southerly direction along Pacific Avenue
to its intersection with National Park Highway, then proceeding in a
southeasterly direction along National Park Highway to its intersection
with 224th Street, East, then proceeding in an easterly direction along
244th Street, East, to its intersection with Meridian Street, South,
then proceeding in a northerly direction along Meridian Street to the
northern boundary of Pierce County, then proceeding in a westerly
direction along the northern boundary of Pierce County to its
intersection with Puget Sound, then proceeding in a generally
southwesterly direction along the banks of the East Passage of Puget
Sound, Commencement Bay, and The Narrows to the point of intersection
with the westernmost city limits of Tacoma, including all points and
places on the southern boundary of the Juan de Fuca Strait from the
eastern port limits of Neah Bay to the western port limits of Port
Townsend, all points and places on the western boundary of Puget Sound,
including Hood Canal, from the port limits of Port Townsend to the
northern port limits of Olympia, all points and places on the southern
boundary of Puget Sound from the port limits of Olympia to the western
port limits of Tacoma, and all points and places on the eastern
boundary of Puget Sound and contiguous waters from the port limits of
Tacoma north to the southern port limits of Bellingham, all in the
State of Washington.
Regulatory Flexibility Act and Executive Order 12866
Although Customs solicited public comments on this port extension,
no notice of proposed rulemaking was required pursuant to 5 U.S.C. 553
because the port extension relates to agency management and
organization. Accordingly, this document is not subject to the
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq).
Agency organization matters such as this port extension are exempt from
consideration under Executive Order 12866.
Drafting Information: The principal author of this document was
Janet L. Johnson, Regulations Branch. However, personnel from other
offices participated in its development.
List of Subjects in 19 CFR Part 101
Customs duties and inspection, Exports, Imports, Organization and
functions (Government agencies).
Amendments to the Regulations
Accordingly, Part 101 of the Customs Regulations is amended as set
forth below:
PART 101--GENERAL PROVISIONS
1. The general authority citation for Part 101 and the specific
authority citation for Sec. 101.3 continue to read as follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 2, 66, 1202 (General Note 20,
Harmonized Tariff Schedule of the United States), 1623, 1624.
Sections 101.3 and 101.4 also issued under 19 U.S.C. 1 and 58b;
* * * * *
Sec. 101.3 [Amended]
2. Section 101.3(b)(1) is amended by removing the reference ``T. D.
83-146'' in the ``Limits of port'' column adjacent to the entry of
Puget Sound in the ``Ports of entry'' column under the state of
Washington and by adding the reference ``T. D. 96-63'' in its place.
Approved: July 29, 1996.
George J. Weise,
Commissioner of Customs.
Dennis M. O'Connell,
Acting Deputy Assistant Secretary of the Treasury.
[FR Doc. 96-21487 Filed 8-22-96; 8:45 am]
BILLING CODE 4820-02-P
Complete official Federal Register PDF
FR Doc. 96-21483 New Animal Drugs For Use In Animal Feeds; Semduramicin with Bacitracin Methylene Disalicylate and Roxarsone; Correction
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43450-43451]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21483]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
21 CFR Part 558
New Animal Drugs For Use In Animal Feeds; Semduramicin with
Bacitracin Methylene Disalicylate and Roxarsone; Correction
AGENCY: Food and Drug Administration, HHS.
ACTION: Final rule; correction.
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[[Page 43451]]
SUMMARY: The Food and Drug Administration (FDA) is correcting a final
rule that appeared in the Federal Register of June 11, 1996 (61 FR
29481). That document amended the animal drug regulations to reflect
approval for use of single ingredient Type A medicated articles to make
combination drug Type C medicated broiler chicken feeds containing
semduramicin with bacitracin methylene disalicylate and roxarsone. That
document failed to designate the approved sources for the drugs. This
document amends the regulation to provide that information. In
addition, certain cross-references are added in the animal feed
regulations.
EFFECTIVE DATE: August 23, 1996.
FOR FURTHER INFORMATION CONTACT: James F. McCormack, Center for
Veterinary Medicine (HFV-128), Food and Drug Administration, 7500
Standish Pl., Rockville, MD 20855, 301-594-1607.
SUPPLEMENTARY INFORMATION: In the Federal Register of June 11, 1996 (61
FR 29481), FDA announced the approval of Pfizer, Inc.'s new animal drug
application (NADA) 141-058, which provides for use of approved single
ingredient Type A medicated articles containing AviaxTM
(semduramicin sodium), BMD (bacitracin methylene
disalicylate), and 3-Nitro (roxarsone), to make combination
drug Type C medicated broiler chicken feeds used for the prevention of
coccidiosis and improved feed efficiency. That document failed to state
the source of the approved Type A medicated articles. It also failed to
amend related regulations to provide for cross-references to these
uses. This document amends the regulations in 21 CFR 558.76(d)(3)(xiv),
558.530(d)(5)(xxiv), and 558.555(b)(2)(ii) to provide for the cross-
references and sources.
List of Subjects in 21 CFR Part 558
Animal drugs, Animal feeds.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs and
redelegated to the Center for Veterinary Medicine, 21 CFR part 558 is
amended as follows:
PART 558--NEW ANIMAL DRUGS FOR USE IN ANIMAL FEEDS
-1. The authority citation for 21 CFR part 558 continues to read as
follows:
-Authority: Secs. 512, 701 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 360b, 371).
-2. Section 558.76 is amended by adding new paragraph (d)(3)(xiv)
to read as follows:
Sec. 558.76 Bacitracin methylene disalicylate.
* * * * *
(d) * * *
(3) * * *
(xiv) Semduramicin with roxarsone as in Sec. 558.555.
3. Section 558.530 is amended by adding new paragraph (d)(5)(xxiv)
to read as follows:
Sec. 558.530 Roxarsone.
* * * * *
(d) * * *
(5) * * *
(xxiv) Semduramicin with bacitracin methylene disalicylate as in
Sec. 558.555.
* * * * *
4. Section 558.555 is amended by adding a sentence at the end of
paragraph (b)(2)(ii) to read as follows:
Sec. 558.555 Semduramicin.
* * * * *
(b) * * *
(2) * * *
(ii) * * * Semduramicin as provided by 000069 in Sec. 510.600(c) of
this chapter, bacitracin methylene disalicylate and roxarsone as
provided by 046573.
Dated: August 14, 1996.
Stephen F. Sundlof,
Director, Center for Veterinary Medicine.
[FR Doc. 96-21483 Filed 8-22-96; 8:45 am]
BILLING CODE 4160-01-F
Complete official Federal Register PDF
FR Doc. 96-21482 Direct Food Substances Affirmed as Generally Recognized as Safe; High Fructose Corn Syrup
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43447-43450]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21482]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
21 CFR Parts 182 and 184
[Docket No. 85N-0548]
Direct Food Substances Affirmed as Generally Recognized as Safe;
High Fructose Corn Syrup
AGENCY: Food and Drug Administration, HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Food and Drug Administration (FDA) is amending its
regulations for substances that are generally recognized as safe (GRAS)
to affirm that high fructose corn syrup (HFCS), prepared from high
dextrose equivalent corn starch hydrolysate by partial enzymatic
conversion of glucose (dextrose) to fructose utilizing one of several
glucose isomerase enzyme preparations, is GRAS as a direct human food
ingredient. This action is in response to six petitions filed by
members of the food industry.
DATES: Effective August 23, 1996. The Director of the Office of the
Federal Register approves the incorporation by reference in accordance
with 5 U.S.C. 552(a) and 1 CFR part 51 of a certain publication in 21
CFR 184.1866, effective August 23, 1996.
FOR FURTHER INFORMATION CONTACT: James C. Wallwork, Center for Food
Safety and Applied Nutrition (HFS-217), Food and Drug Administration,
200 C St. SW., Washington, DC 20204-0001, 202-418-3078.
SUPPLEMENTARY INFORMATION:
I. Background
In the Federal Register of February 8, 1983 (48 FR 5716), FDA
published a document that listed HFCS as GRAS for use in food
(Sec. 182.1866 (21 CFR 182.1866)) and also affirmed that certain
insoluble glucose isomerase enzyme preparations are GRAS for use in the
manufacture of HFCS (Sec. 184.1372 (21 CFR 184.1372)) (hereinafter
referred to as the 1983 final rule). The agency published this final
rule in response to six industry petitions that requested GRAS
affirmation for certain insoluble glucose isomerase enzyme preparations
used to make HFCS and for the manufactured product itself.
The basis for listing HFCS in 21 CFR part 182 was that HFCS is made
with enzyme preparations that FDA has affirmed as GRAS; the saccharide
composition (glucose to fructose ratio) of HFCS is approximately the
same as that of honey, invert sugar, and the disaccharide sucrose; and
the minor components (primarily higher saccharides of glucose) of HFCS
are also found at similar levels in corn syrup and corn sugar which are
already on the GRAS list. Therefore, FDA concluded that it was
appropriate to list HFCS as GRAS for use in food while the agency fully
evaluated it during the comprehensive safety review of corn sugar, corn
syrup, invert sugar, and sucrose.
In the 1983 final rule, the agency gave notice to all interested
parties that when the agency completed its comprehensive safety review
of corn sugar (dextrose), corn syrup, invert sugar, and sucrose, it
would examine the data on these substances to determine whether those
data provide an adequate basis to affirm that HFCS is GRAS. In the
Federal Register of November 7, 1988 (53 FR 44862), the agency
published a final rule affirming that the use of corn sugar, corn
syrup, invert sugar, and sucrose in food is GRAS.
II. The Safety Review of High Fructose Corn Syrup
In the Federal Register of November 7, 1988 (53 FR 44904), FDA
proposed to affirm that the use of HFCS in food is GRAS (hereinafter
referred to as the 1988 HFCS proposal). Included in the 1988 HFCS
proposal was the agency's: (1) Evaluation of the data contained in the
petitions and of their relationship to the safety of HFCS; (2)
discussion of the relevancy of reports by the Select Committee on GRAS
Substances of the Federation of American Societies for Experimental
Biology entitled ``Evaluation of the Health Aspects of Corn Sugar
(Dextrose), Corn Syrup, and Invert Sugar as Food Ingredients'' (Ref. 1)
and ``Evaluation of the Health Aspects of Sucrose as a Food
Ingredient'' (Ref. 2) to the safety assessment of HFCS; and (3)
discussion of the relevancy of FDA's Sugars Task Force Report
``Evaluation of the Health Aspects of Sugars Contained in Carbohydrate
Sweeteners'' (Ref. 3) to the safety evaluation of HFCS.
The agency made it clear during its safety evaluation of corn
sugar, corn syrup, invert sugar, and sucrose that its exposure estimate
for HFCS included exposure to HFCS containing 55 percent fructose
(HFCS-55) (Ref. 3). Furthermore, FDA noted that most of the components
found in HFCS
[[Page 43448]]
containing 43 percent fructose (HFCS-43) (approximately equimolar
mixtures of glucose and fructose; residues from corn syrup; and
residues from the glucose isomerase enzyme preparations) are also found
in HFCS-55. Therefore, the agency noted that the safety evaluation of
the major components in HFCS-43 is also applicable to HFCS-55, and it
stated that it would consider including HFCS-55 in its rule affirming
the GRAS status of HFCS if it received, as comments on the 1988 HFCS
proposal, information on the production of HFCS-55 adequate to allow it
to identify possible residues from processing materials and to ensure
that the level of these residues in the final product is safe (53 FR
44904 at 44907).
The 1988 HFCS proposal did not include 90 percent fructose (HFCS-
90); however, HFCS-90 is also a commercially available product. This
product contains a substantially different ratio of glucose to fructose
than either HFCS-43 or HFCS-55. The HFCS-90 is not included in this
rulemaking because the agency does not have adequate information to
assess the safety of residual levels of the processing materials in the
final product. Moreover, FDA did not include HFCS-90 in the agency's
exposure estimate for HFCS, even though the agency was aware of minor
uses of HFCS-90 as an ingredient in low-calorie foods. Finally, FDA's
report on its safety review of the sugars contained in carbohydrate
sweeteners did not include HFCS-90 primarily because HFCS-90 does not
contain approximately equimolar amounts of glucose and fructose (53 FR
44904 at 44907). Thus, additional data on the effects of fructose
consumption that is not balanced with glucose consumption would be
needed to ensure that this product is safe. Because HFCS-90 has not
been included in this rulemaking, consideration of the GRAS status of
this substance will need to proceed through the petition process in
accordance with Sec. 170.35.
III. Comments on the 1988 HFCS Proposal
The original comment period for the 1988 HFCS proposal ended on
January 6, 1989. In the Federal Register of January 27, 1989 (54 FR
4045), in response to requests from two trade associations, FDA
extended the comment period until April 6, 1989, to allow sufficient
time for interested persons to respond to the agency's request for
information on the manufacturing process for HFCS-55. FDA received four
submissions in response to the 1988 HFCS proposal, each containing one
or more comments. One submission was from a diabetes research center,
and the other three were from trade associations. In addition, recently
a further comment was received from one of the trade associations. This
comment modified some of the information that the association had
submitted in its previous comment.
1. The Diabetes Research Center stated its opinion that the safety
of HFCS as it relates to diabetics has not been totally established. It
suggested that the fact that its safety for diabetics had not been
fully established should be stated somewhere on the product label. The
comment did not provide any support for its conclusion or for the
suggested labeling requirement.
FDA does not agree with this comment. FDA's Sugars Task Force
stated in its report (Ref. 3) that it could not find any basis in the
scientific literature to conclude that there was the potential for an
adverse effect in diabetics from increased fructose consumption. The
comment did not present any evidence of any developments since the
publication of the Task Force's report almost 10 years ago that would
contradict the Task Force's finding.
In a 1994 review of Nutrition Principles for the Management of
Diabetes and Related Complications (Ref. 4), sponsored by the American
Diabetes Association (ADA), a national expert body for diabetes, the
effects of sucrose, fructose, and other nutritive sweeteners were
discussed in detail. The fructose used in the studies that were
discussed in the review was primarily crystalline fructose. HFCS, which
has a saccharide composition similar to sucrose, was not separately
considered. The overall findings that emerged from this review (Ref. 5)
were that ``scientific evidence has shown that the use of sucrose as
part of the meal plan does not impair blood glucose control in
individuals with type I or type II diabetes,''and that ``dietary
fructose produces a smaller rise in plasma glucose than isocaloric
amounts of sucrose and most starchy carbohydrates.''
Moreover, the ADA dietary guidelines for diabetics state that
diabetics may consume a modest amount of sugars as long as metabolic
control and desirable body weight are maintained (Ref. 5). The
guidelines do not include a recommendation to avoid any specific
sweetener because of safety concerns.
FDA's policy in the case of food ingredients, such as FD&C Yellow
No. 5 and sulfites, to which subpopulations are allergic or sensitive
is to rely on the declaration of the presence of the substance in the
ingredient list, rather than to require a special statement on the
label. The agency considers that declaration of the ingredient will
give the sensitive subpopulation an opportunity to avoid the food.
HFCS, like any other ingredient, will have to be declared on the
ingredient list when used in food. Thus, even if there were a basis for
a safety concern about HFCS in diabetics, FDA finds no reason why it is
not adequate to treat this ingredient like other ingredients of concern
to particular subpopulations.
Given the absence of any data supporting a safety concern for HFCS
in diabetics, the agency finds no rational basis for requiring on
products that contain this sweetener a label statement that advises
that the safe use of HFCS by diabetics has not been fully established.
The agency concludes that there is no evidence to suggest that HFCS is
any less safe for diabetics than any other commonly used sweetener.
Based on the foregoing, FDA concludes that no change in Sec. 184.1866
in response to this comment is warranted.
2. In three submissions, three trade associations strongly
endorsed affirming the use of HFCS in food as GRAS. These comments
asked that the final rule recognize that the item of commerce contains
42 percent fructose (HFCS-42) on a dry weight basis, and that the
reference to the 43 percent fructose dry weight product be deleted. The
comments discussed in detail the manufacturing process for HFCS-55 and
asked that the final rule be modified to allow manufacturers the
flexibility to make HFCS-42 and HFCS-55 according to the identity and
specifications described. Subsequently, one of these trade associations
submitted a comment that amended its earlier submission regarding the
identity and specifications for HFCS to read as follows:
``High Fructose Corn Syrup is a sweet, nutritive saccharide
mixture prepared as a clear, aqueous solution from high-dextrose-
equivalent corn starch hydrolysate by the partial enzymatic
conversion of glucose (dextrose) to fructose, using an insoluble
glucose isomerase preparation that complies with 21 CFR 184.1372 and
that has been grown in a pure culture fermentation that produces no
antibiotics. It is a water-white to light yellow, somewhat viscous
liquid that darkens at high temperatures. It is miscible in all
proportions with water. This product has the following requirements:
Assay, 42 Percent High Fructose Corn Syrup: Not less than 97.0
percent total saccharides (dry weight), of which not less than 42.0
percent consists of fructose (dry weight), not less than 92.0
percent consists of monosaccharides, and not more than 8.0 percent
(dry weight) of other saccharides. 55 Percent High Fructose Corn
Syrup: Not less
[[Page 43449]]
than 95.0 percent total saccharides (dry weight), of which not less
than 55.0 percent consists of fructose (dry weight), not less than
95.0 percent consists of monosaccharides, and not more than 5.0
percent (dry weight) of other saccharides. Arsenic (as As), not more
than 1 milligram per kilogram. Color, within the range specified by
the vendor. Heavy metals (as Pb), not more than 5 milligrams per
kilogram. Lead, not more than 0.1 milligram per kilogram. Sulfur
dioxide, not more than 0.003 percent. Total solids, 42 percent high
fructose corn syrup: not less than 70.5 percent. 55 Percent high
fructose corn syrup: not less than 76.5 percent.''
This information is similar to that published in Food Chemicals Codex,
4th ed., p. 191 (1996), in the monograph entitled ``High-Fructose Corn
Syrup.''
FDA has reviewed the comments and acknowledges that the item of
commerce is HFCS-42. The agency agrees with the identity and
specifications recommended by the latter comment for HFCS (HFCS-42 or
HFCS-43). FDA concludes that the identity and specifications that it is
adopting are adequate to ensure that the public health is protected.
The agency also has reviewed the comments from the three trade
associations requesting the inclusion of HFCS-55 in the final rule. FDA
notes that the comments provided detailed information on the
manufacture of HFCS-55, including information on processing aids and
residues of these materials in the final product. In addition, the
comments provided information on the identity of, and specifications
for, the HFCS-55 product.
FDA concludes that the manufacturing process for HFCS-55 does not
raise any safety concerns, and that the residues of the processing
materials in this product are safe, because HFCS-55 is prepared from
HFCS-42 using standard techniques. In addition, as noted earlier in
this final rule, the agency has determined that the safety evaluation
of the major components in HFCS-42 is also applicable to HFCS-55. Thus,
FDA finds that information provided by the comments is sufficient for
the agency to include HFCS-55 in the final rule. Accordingly FDA has
modified the final rule to include HFCS-55.
The agency has also reviewed the identity and specifications
suggested for HFCS-55 in the comments. FDA concludes that the suggested
identity and specifications are adequate to ensure that the public
health will be protected.
In addition, the agency has determined that because the components
of HFCS-55 are similar to HFCS-42, and there are no safety concerns
with these components, there is no need to differentiate between these
two HFCS's on product labels for consumers.
3. A comment from a trade association included a recommendation for
FDA to adopt the Food Chemicals Codex (3d ed., 2d supplement) assay
requirements for HFCS. The association also pointed out that the Food
Chemicals Codex has published food grade specifications for HFCS.
In the 1988 HFCS proposal, the agency stated that it would
cooperate with the National Academy of Sciences to establish
specifications for HFCS. The 1988 HFCS proposal also stated that when
acceptable specifications are developed, the agency will incorporate
them into the regulation. Recently, however, as stated above, industry
submitted a comment suggesting new identities and specifications for
HFCS-42 and HFCS-55 that are similar to those published in the Food
Chemicals Codex, 4th ed., p. 191 (1996), in the monograph entitled
``High-Fructose Corn Syrup.'' These identities and specifications, as
discussed in response to comment 2 of this document, are acceptable to
the agency and are therefore incorporated by reference.
IV. Conclusion
Based on the conclusions of the Federation of American Societies
for Experimental Biology on the safety evaluations of corn sugar, corn
syrup, invert sugar, and sucrose (Refs. 1 and 2) and of FDA's Task
Force Report on the health aspects of sugars contained in carbohydrate
sweeteners (Ref. 3), in the 1988 HFCS proposal, the agency proposed to
affirm that the use of HFCS in food is GRAS. FDA has considered all the
comments received on the 1988 HFCS proposal and has found that no
information has been submitted in response to the proposal that
warrants a change in FDA's tentative conclusion about the safety of
HFCS or about whether it is GRAS.
The agency agrees with comments to the 1988 HFCS proposal that the
item of commerce is HFCS containing not less than 42 percent fructose.
Thus, FDA has included HFCS containing not less than 42 percent
fructose dry weight in the description of the identity of HFCS in the
final rule. In addition, FDA has incorporated by reference the other
aspects of the identity and specifications for HFCS-42 that were
published in the Food Chemicals Codex, 4th ed., p. 191 (1996), in the
monograph entitled ``High-Fructose Corn Syrup'' and that are similar to
industry comments to the 1988 HFCS proposal.
Also, sufficient information was submitted in the comments to
justify affirming HFCS-55 as GRAS and to provide specifications for
this substance. Therefore, the agency has included HFCS containing not
less than 55 percent fructose dry weight in the description of the
identity of HFCS in the final rule. In addition, FDA has incorporated
by reference the other aspects of the identity and specifications for
HFCS-55 that were published in the Food Chemicals Codex, 4th ed., p.
191 (1996), in the monograph entitled ``High-Fructose Corn Syrup,'' and
that are similar to industry comments to the 1988 HFCS proposal.
Furthermore, the agency is including a sentence in the regulation to
characterize the manufacturing process that converts HFCS-42 to HFCS-
55, i.e., ``The product containing more than 50 percent (dry weight)
fructose may be prepared through concentration of the fructose portion
of the mixture containing less than 50 percent fructose.''
Thus, FDA is including two types of HFCS in this final rule. HFCS-
42 contains at least 42 percent fructose, approximately 50 percent
glucose, and not more than 8 percent other saccharides. HFCS-55
contains at least 55 percent fructose, approximately 40 percent
glucose, and not more than 5 percent other saccharides. HFCS-42 and
HFCS-55 both contain similar saccharide compositions (glucose to
fructose ratio) as honey, invert sugar, and the disaccharide sucrose,
and the minor components (primarily higher saccharides of glucose) of
HFCS-42 and HFCS-55 are also present at similar levels in corn syrup
and corn sugar, which FDA has already found to be GRAS.
FDA has previously considered the environmental effects of this
rule as announced in the 1988 HFCS proposal. FDA did not receive any
information or comments that would affect the agency's determination
that there is no significant impact on the human environment and that
an environmental impact statement is not required.
V. Analysis of Impacts
FDA has examined the economic implications of the final rule
affirming the GRAS status of HFCS, prepared from high dextrose-
equivalent corn starch hydrolysate by partial enzymatic conversion of
glucose (dextrose) to fructose utilizing one of several glucose
isomerase enzyme preparations, for use as a direct human food
ingredient, under Executive Order 12866 and the Regulatory Flexibility
Act. Executive Order 12866 directs agencies to assess
[[Page 43450]]
all costs and benefits of available regulatory alternatives and, when
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety, and other advantages; distributive impacts; and
equity). The Regulatory Flexibility Act (Pub. L. 96-354) requires
analyzing options for small businesses. FDA finds that this final rule
is not a significant regulatory action as defined by Executive Order
12866.
Affirming that the use of HFCS that contains either not less than
42 percent fructose or not less than 55 percent fructose in food is
GRAS will expand the formulation possibilities for food manufacturers,
including small businesses. Therefore, in accordance with the
Regulatory Flexibility Act, FDA has also determined that this rule will
have a positive impact on small businesses.
Because no current activity is prohibited by this final rule, the
compliance cost to firms is zero. Total costs are also zero because
there will be no increase in the health risks faced by consumers
resulting from this final rule. Potential benefits include the wider
use of these substances to achieve intended technical effects and the
savings that will result from not having to prepare any new petitions
to affirm that the use of these substances in food is GRAS.
VI. Effective Date
As this rule recognizes an exemption from the ``food additive''
definition in the Federal Food, Drug, and Cosmetic Act, and from the
approval requirements applicable to food additives, no delay in
effective date is required by the Administrative Procedure Act, 5
U.S.C. 553(d). The rule will therefore be effective immediately (5
U.S.C. 553(d)(1)).
VII. References
The following references have been placed on display at the Dockets
Management Branch (HFA-305), Food and Drug Administration, 12420
Parklawn Dr., rm. 1-23, Rockville, MD 20857, and may be seen by
interested persons between 9 a.m. and 4 p.m., Monday through Friday.
1.-``Evaluation of the Health Aspects of Corn Sugar (Dextrose),
Corn Syrup, and Invert Sugar as Food Ingredients'' (SCOGS-50),
Select Committee on GRAS Substances, Life Sciences Research Office,
Federation of American Societies for Experimental Biology, 1976.
2.-``Evaluation of the Health Aspects of Sucrose as a Food
Ingredient'' (SCOGS-69), Select Committee on GRAS Substances, Life
Sciences Research Office, Federation of American Societies for
Experimental Biology, 1976.
3. Glinsmann W. H., H. Irausquin, and Y. K. Park, ``Evaluation
of Health Aspects of Sugars Contained in Carbohydrate Sweeteners,''
Report of Sugars Task Force 1986, Journal of Nutrition, 116(11S):S1-
S216, 1986.
4. Franz, M. J. et al, ``Nutrition Principles for the Management
of Diabetes and Related Complications,'' Diabetes Care, 17:490-518,
1994.
5. American Diabetes Association, ``Nutrition Recommendations
and Principles for People with Diabetes Mellitus,'' Diabetes Care,
17:519-522, 1994.
List of Subjects
21 CFR Part 182
Food ingredients, Food packaging, Spices and flavorings.
21 CFR Part 184
Food ingredients, Incorporation by reference.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, parts 182
and 184 are amended as follows:
PART 182--SUBSTANCES GENERALLY RECOGNIZED AS SAFE
1. The authority citation for 21 CFR part 182 continues to read as
follow:
Authority: Secs. 201, 402, 409, 701 of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 321, 342, 348, 371).
Sec. 182.1866 [Removed]
2. Section 182.1866 High fructose corn syrup is removed from
subpart B.
PART 184--DIRECT FOOD SUBSTANCES AFFIRMED AS GENERALLY RECOGNIZED
AS SAFE
3. The authority citation for 21 CFR part 184 continues to read as
follows:
Authority: Secs. 201, 402, 409, 701 of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 321, 342, 348, 371).
4. Section 184.1372 is amended by revising paragraph (a) to read as
follows:
Sec. 184.1372 Insoluble glucose isomerase enzyme preparations.
(a) Insoluble glucose isomerase enzyme preparations are used in the
production of high fructose corn syrup described in Sec. 184.1866. They
are derived from recognized species of precisely classified
nonpathogenic and nontoxicogenic microorganisms, including Streptomyces
rubiginosus, Actinoplanes missouriensis, Streptomyces olivaceus,
Streptomyces olivochromogenes, and Bacillus coagulans, that have been
grown in a pure culture fermentation that produces no antibiotics. They
are fixed (rendered insoluble) for batch production with GRAS
ingredients or may be fixed for further immobilization with either GRAS
ingredients or materials approved under Sec. 173.357 of this chapter.
* * * * *
5. Section 184.1866 is added to subpart B to read as follows:
Sec. 184.1866 High fructose corn syrup.
(a) High fructose corn syrup, a sweet, nutritive saccharide mixture
containing either approximately 42 or 55 percent fructose, is prepared
as a clear aqueous solution from high dextrose-equivalent corn starch
hydrolysate by partial enzymatic conversion of glucose (dextrose) to
fructose using an insoluble glucose isomerase enzyme preparation
described in Sec. 184.1372. The product containing more than 50 percent
fructose (dry weight) is prepared through concentration of the fructose
portion of the mixture containing less than 50 percent fructose.
(b) The ingredient shall conform to the identity and specifications
listed in the monograph entitled ``High-Fructose Corn Syrup'' in the
Food Chemicals Codex, 4th ed. (1996), pp. 191-192, which is
incorporated by reference in accordance with 5 U.S.C. 552(a) and 1 CFR
part 51. Copies are available from the Office of Premarket Approval,
Center for Food Safety and Applied Nutrition (HFS-200), Food and Drug
Administration, 200 C St. SW., Washington, DC 20204-0001, or may be
examined at the Center for Food Safety and Applied Nutrition's Library,
200 C St. SW., rm. 3321, Washington, DC, or at the Office of the
Federal Register, 800 North Capitol St. NW., suite 700, Washington, DC.
(c) In accordance with Sec. 184.1(b)(1), the ingredient is used in
food with no limitation other than current good manufacturing practice.
Dated: August 15, 1996.
William K. Hubbard,
Associate Commissioner for Policy Coordination.
[FR Doc. 96-21482 Filed 8-22-96; 8:45 am]
BILLING CODE 4160-01-F
Complete official Federal Register PDF
FR Doc. 96-21481 Food Labeling: Health Claims; Sugar Alcohols and Dental Caries
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43433-43447]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21481]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Part 101
[Docket No. 95P-0003]
Food Labeling: Health Claims; Sugar Alcohols and Dental Caries
AGENCY: Food and Drug Administration, HHS.
ACTION: Final rule.
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SUMMARY: The Food and Drug Administration (FDA) is announcing its
decision to authorize the use, on food labels and in food labeling, of
health claims on the association between sugar alcohols and the
nonpromotion of dental caries. The agency has concluded that, based on
the totality of the scientific evidence, there is significant
scientific agreement among qualified experts to support the
relationship between sugar alcohols (i.e., xylitol, sorbitol, mannitol,
maltitol, lactitol, isomalt, hydrogenated starch hydrolysates (HSH),
hydrogenated glucose syrups (HGS), or a combination of sugar alcohols)
and the nonpromotion of dental caries. Therefore, FDA has concluded
that claims on foods relating sugar alcohols to the nonpromotion of
dental caries are justified. FDA is announcing these actions in
response to a petition filed by the National Association of Chewing Gum
Manufacturers, Inc., and an ad hoc working group of sugar alcohol
manufacturers (hereinafter referred to as the petitioners).
DATES: Effective January 1, 1998. The Director of the Office of the
Federal Register approves the incorporation by reference in accordance
with 5 U.S.C. 552(a) and 1 CFR part 51 of a certain publication in 21
CFR 101.80(c)(2)(ii)(C), effective January 1, 1998.
FOR FURTHER INFORMATION CONTACT: Joyce J. Saltsman, Center for Food
Safety and Applied Nutrition (HFS-165), Food and Drug Administration,
200 C St. SW., Washington, DC 20204, 202-205-5916.
SUPPLEMENTARY INFORMATION:
I. Background
In the Federal Register of July 20, 1995 (60 FR 37507), the agency
proposed to authorize the use, on food labels and in food labeling, of
health claims on the association between sugar alcohols and the
nonpromotion of dental caries. In addition, FDA proposed to exempt
sugar alcohol-containing foods from the requirement in
Sec. 101.14(e)(6) (21 CFR 101.14(e)(6)) of the health claims general
requirements regulation concerning disqualification criteria. Section
101.14(e)(6) provides that, except for dietary supplements or where
provided for in other regulations in part 101 (21 CFR part 101),
subpart E, to be eligible to bear a health claim, a food must contain
10 percent or more of the Reference Daily Intake (RDI) or the Daily
Reference Value (DRV) for vitamin A, vitamin C, iron, calcium, protein,
or fiber per reference amount customarily consumed before there is any
nutrient addition.
-The proposed rule was issued in response to a petition filed under
section 403(r)(3)(B)(i) of the Federal Food, Drug, and Cosmetic Act
(the act) (21 U.S.C. 343(r)(3)(B)(i)). Section 403(r)(3)(B)(i) of the
act states that the Secretary of Health and Human Services (the
Secretary) (and, by delegation, FDA) shall promulgate regulations
authorizing health claims only if he or she determines, based on the
totality of publicly available scientific evidence (including evidence
from well-designed studies conducted in a manner which is consistent
with generally recognized scientific procedures and principles), that
there is significant scientific agreement, among experts qualified by
scientific training and experience to evaluate such claims, that the
claim is supported by such evidence (see also Sec. 101.14(c)). FDA
considered the relevant scientific studies and data presented in the
petition as part of its review of the scientific literature on sugar
alcohols and dental caries. The agency summarized this evidence in the
proposed rule (60 FR 37507).
-The proposed rule included qualifying and disqualifying criteria
for the purpose of identifying foods eligible to bear a health claim.
The proposal also specified mandatory content and label information for
health claims statements and provided model health claims. In its
review of sugar alcohols eligibility for a health claim under
Sec. 101.14(b), FDA discussed potential safety issues relating to sugar
alcohols and the petitioners' position that the use of sugar alcohols
is safe and lawful. The agency also discussed the potential issue that
some sugar alcohol-containing foods may contain other ingredients, such
as refined flour, that may be cariogenic. Consequently, the agency
proposed to require that sugar alcohol-containing foods not lower
plaque pH below 5.7, as determined by appropriate in vivo tests. FDA
requested written comments on the proposed rule, including comments on
the agency's tentative conclusion that the petitioners had satisfied
the requirements regarding the safe and lawful use of sugar alcohols
that are the subject of the health claim and comments on the proposal
to establish a minimum plaque pH test for sugar alcohol-containing
foods.
-II. Summary of Comments and the Agency's Responses
-In response to the proposal, the agency received approximately 20
letters, each containing one or more comments, from professional
organizations, industry, trade associations, and health care
professionals. Comments that were not relevant to the sugar alcohol and
dental caries proposed rule, but that addressed broader issues
pertaining to health claims in general, are not discussed in the
sections of this document that follow.A number of comments were
received that dealt generally with the questions of whether health
claims need to state that the disease or health-related condition is
multifactorial, and whether the whole claim needs to appear in one
place. These issues of broad applicability to health claims are being
considered in the rulemaking entitled ``Food Labeling: Nutrient Content
Claims, General Principles; Health Claims, General Requirements and
Other Specific Requirements for Individual Health Claims'' (60 FR
[[Page 43434]]
66206, December 21, 1995) (hereinafter referred to as ``the 1995
nutrient content and health claims proposed rule''). Therefore, FDA
forwarded the comments in question to that docket for consideration as
part of that rulemaking.
-The majority of the comments received in response to the sugar
alcohol proposal agreed with one or more provisions of the proposed
rule without providing grounds for support other than those provided by
FDA in the preamble to the proposal. A few of these comments also
requested modification of one or more provisions of the proposed rule.
A few comments disagreed with the proposed rule and provided specific
support for their positions. The agency has summarized and addressed
the relevant issues raised in all comments in the sections of this
document that follow.
A. General Comments
-Some comments addressed the basic issue of whether FDA should
permit health claims about sugar alcohol and dental caries on food
labeling and the claim's consistency with the general principles for
health claims.
-1. One comment stated that section 403(r)(1)(B) of the act, which
was added by the Nutrition Labeling and Education Act of 1990 (the 1990
amendments), defines ``health claims'' as those statements that
characterize ``the relationship of any nutrient which is of the type
required [to be in nutrition labeling] of the food to a disease or a
health-related condition.'' The comment stated that in promulgating the
regulations governing health claims, FDA interpreted the statutory
language to include any relationship of a ``substance'' to a disease or
health-related condition (Sec. 101.14(a)(2)). The comment stated that
the agency used the term ``substance'' to make clear that health claims
could be established that described relationships regarding either
particular nutrients or foods bearing nutrients, such as fruits and
vegetables, and a disease or health related condition. The comment
stated that a health claim must describe the function of the substance
in question in providing nourishment or nutriment and how the function
of that nutrient relates to a disease or health condition. The comment
stated that the posited relationship between sugar alcohols and
noncariogenicity is not a nutrient relationship and does not satisfy
the nutrient-disease relationship requirement under the act because it
does not address the function of a substance in providing nourishment
or nutriment.
-The agency does not agree that the proposed health claim is
inconsistent with health claim principles. Sugar alcohols are nutrients
of the type specified in section 403(q) of the act. FDA lists them in
Sec. 101.9(c) (21 CFR 101.9(c)) as one of the nutrients that can be
listed in the nutrition label. Thus, they can be the subject of a
health claim.
-The issue of whether claims about sugar alcohols and dental caries
are health claims was discussed in the Federal Register of July 20,
1995 (60 FR 37502), final rule entitled ``Food Labeling: Label
Statements on Foods for Special Dietary Use; `Useful Only in Not
Promoting Tooth Decay' Disclaimer'' (hereinafter referred to as ``the
1995 disclaimer final rule''). The agency pointed out that a health
claim provides information about how a particular type of substance
(sugar alcohols) can affect a person's risk of developing a diet-
related diseases (dental caries). The ``Useful Only in Not Promoting
Tooth Decay'' statement does what a health claim does in that it tells
a consumer that including foods sweetened with sugar alcohols in his or
her diet will affect his or her risk of developing dental caries.
-Thus, in the 1995 disclaimer final rule, the agency found that the
statement on tooth decay is a health claim because it contains both
elements necessary to meet the ``health claim'' definition under
403(r)(1)(B) of the act. FDA concluded that ``useful only in not
promoting tooth decay'' is not a nutrient content claim because it does
not characterize the level of any nutrient. Thus, regardless of how
this claim has been used, as the law is now written, its use in food
labeling would misbrand the food unless claims about sugar alcohols and
dental caries are authorized by FDA under section 403(r)(3) (or section
403(r)(5)(D)) of the act.
-Relative to the comment that a health claim must describe the
function of the substance in question in providing nourishment or
nutriment, the general principles for health claims do not require that
the health claim, itself, contain such a statement. The agency must be
fully satisfied, however, that the substance meets the general
requirements for health claims under Sec. 101.14, and under
Sec. 101.14(b)(3)(i), if the substance is consumed at other than
decreased dietary levels, it must contribute taste, aroma, or nutritive
value, or some technical effect listed in 21 CFR 170.3(o), to the food
and retain that attribute when consumed at levels that are necessary to
justify a claim. Sugar alcohols meet this requirement (see 60 FR 37507
and 37509) because they are used as sweeteners and bulking agents
(i.e., stabilizers and thickeners) and are consumed for their taste.
Inasmuch as sugar alcohols are also a source of calories, they
contribute nutritive value to the foods, such as chewing gums and
confectioneries, in which they are used.
-2. One comment stated that the proposed claim is not a health
claim in the same sense that the other authorized claims are because
the substance's effect is largely independent of other dietary
practices, i.e., sugar alcohol-sweetened candy will always not promote
tooth decay regardless of other elements in the diet. Another comment
stated that the idea of instituting a health claim for a substance that
merely replaces a nutrient that may contribute to a disease or health-
related condition could open the door to questionable claims. One
comment stated that the nonpromotion claim is a product descriptor that
provides information on the absence of an undesirable side effect.
-The agency disagrees that the claim is not valid because sugar
alcohols function independently of other dietary practices, or because
the substance replaces or can substitute for another substance. The
comment did not demonstrate that sugar alcohols affect the risk of
dental caries in a way that is independent of other dietary practices,
or why, even if the did, this fact would render the claim invalid. In
fact, as explained in the proposed rule (60 FR 37507 at 37524), the
association between sugar alcohols and dental caries is related to
dietary practices. The consumption of dietary sugars and fermentable
carbohydrates in the form of gums, confectioneries, and other snack
foods is widespread and frequent in the diet. There is a clear
association between the onset of dental caries and the presence in the
diet of sugars and other fermentable carbohydrates. By consuming foods,
such as gums, mints, candies, jams and jellies, and desserts, in which
sugar alcohols are used to replace the fermentable carbohydrates
instead of the versions of those foods that contain the fermentable
carbohydrates, the consumer, the available evidence shows, reduces his
or her risk of developing dental caries. Therefore, the claim is based
on dietary practices and is relevant within the context of the total
daily diet.
-A claim based on the substitution or replacement of one food
substance for another is not inconsistent with, or prohibited under,
the general principles for health claims. In fact, current dietary
recommendations encourage substitution and replacement of foods in the
diet, for example, the use of low-fat foods in place of high-fat foods.
[[Page 43435]]
However, the evidence must show that the effect of substituting one
substance for another is relevant to the risk of the disease or health-
related condition that is the subject of the claim. Here, the results
of long-term studies in which sugar alcohol-containing foods are
substituted for sugar-containing foods in the daily diet support the
contention that sugar alcohols help reduce the risk of developing
dental caries (see, for example, Refs. 21, 22, 23, and 25; 60 FR 37507
at 37514).
-The concern in one comment that questionable claims may occur when
the substitution or replacement of substances is the subject of a
health claim is fully addressed by the provisions of existing
principles for health claims. One of the requirements for a substance
to be eligible for a health claim is that the substance must be
associated with a disease, or health-related condition, or,
alternatively, the petition must explain the prevalence of the disease
in the U.S. population and the relevance of the claim in context of the
total daily diet (see Sec. 101.14(b)(1)). The agency finds that this as
well as the other eligibility requirements for health claims provide
protection against questionable claims.
-3. A comment stated that in the preamble to the ``General
Requirements for Health Claims for Food'' final rule (58 FR 2478,
January 6, 1993), FDA limited the application of the health claims
rule, based upon review of the 1990 amendments legislative history. The
comment stated that the agency supported limiting the type of disease
relationships that would be subjected to the health claim regime with
the following rationale: ``In the legislative history, Congress focused
only on those health claims that related to chronic disease, such as
cancer, heart disease, and osteoporosis'' (58 FR 2478 at 2481). The
comment stated, therefore, that dental caries are not the type of
``chronic disease'' Congress intended to be regulated as a health claim
since dietary choices will have less of an impact on tooth decay than
will numerous other factors (e.g., fluoridation of water supply).
Additionally, several comments alleged that dental caries is in decline
in this country and suggested that this trend justifies not finalizing
the proposed health claim.
- The statement within the preamble to ``General Requirements for
Health Claims for Food'' final rule (58 FR 2478 at 2481) referred to in
the comment was part of a discussion about applicability of health
claims to classical deficiency nutrient diseases and was not a
discussion on limiting claims to chronic diseases. Nowhere in that
document did the agency state that the diet/disease relationships that
could be the subject of a health claim were those that involved chronic
diseases. Moreover, section 403(r)(1)(B) of the act itself does not
limit the Secretary's authority to regulate health claims to those
pertaining to chronic diseases. In fact, the agency has recently
authorized a health claim pertaining to a disease that would generally
not be considered to be a chronic disease, neural tube defects.
-As made clear in Sec. 101.14(a)(6), the agency focuses on whether
the disease in question, in this case dental caries, constitutes damage
to an organ, part, structure, or system of the body such that it does
not function properly. As outlined in the proposal, the agency
tentatively concluded that dental caries meets this criterion (60 FR
37507 at 37509 through 37510), and the comments have presented no
evidence to support a different conclusion. Further, dental caries is a
disease for which the general U.S. population, or an identified
subgroup, is at risk, and the condition is prevalent in the general
population (see Sec. 101.14(b)(1)).
-Although the overall incidence of dental caries has declined in
the United States, as mentioned in some comments, dental caries is
still a public health issue. The disease remains one of the most
prevalent infectious diseases that causes substantial expense, pain,
and work loss (Ref. 89). There is evidence showing no decline in dental
caries in some tooth surfaces, i.e., occlusal and proximal tooth
surfaces, and a substantial subset of children continue to exhibit a
high incidence of tooth decay (Ref. 95). In addition, little is known
about present trends in oral health in the older population. There are
some studies that suggest that the caries incidence in adults is
considerable (Ref. 95). Consequently, dental caries continues to be a
disease of public health concern in this country.
-4. Three comments stated that the proposed sugar alcohol health
claim promotes a good food/bad food dichotomy, based on whether the
food contains sugar alcohols. One comment stated that the proposed
health claim suggests that foods not eligible to bear the claim will
automatically contribute to tooth decay. One comment stated that the
health claim fails to promote health objectives. The comment also
stated that children should focus on a balanced diet over time for
proper growth and development rather than on the consumption of a
particular ingredient. It stated that most sugar alcohol products
contain little or no calories, micronutrients, or macronutrients, and
yet they may be eaten in lieu of foods that can contribute real
nutrients to the diet. The comment stated that FDA should not be
promoting products that are devoid of nutrition in lieu of products
that provide the energy and the nutrients children need.
-FDA disagrees that foods ineligible to bear a health claim will be
perceived by consumers as bad for the health. The comment did not
present any evidence to show that consumers interpret the absence of a
health claim on food labels as evidence that the food is not healthful.
For example, the agency has authorized a fat and heart disease claim,
but the comment provided nothing to suggest that consumers believe that
a food product that does not bear this health claim will promote heart
disease.
-FDA disagrees also that the health claim fails to promote health
objectives and promotes consumption of a particular nutrient rather
than focusing on a balanced diet. As stated above, dental caries
remains a public health concern. Foods that meet the criteria for this
health claim contribute to public health objectives because they do not
promote tooth decay.
-The comment did not provide any evidence to show that this health
claim will focus the consumer's attention on one nutrient rather than
on a balanced diet. The claim identifies a special characteristic of
the food that is recognized to bear on the occurrence, and affect the
risk, of a disease, dental caries. For those interested in reducing
their risk of this disease, the claim serves to inform them, as claims
of this type have done for almost 20 years, of this special
characteristic.
-The agency also disagrees with the comment that this health claim
will promote for children foods that are devoid of nutrition. Claims
for sugar alcohols, unlike claims for fruits, vegetables, and grain
products and heart disease authorized under 21 CFR 101.77, for example,
do not encourage increased consumption of foods to help reduce disease
risk. Rather, sugar alcohol claims simply state that to the extent
these foods are consumed as substitutes for foods that contain
fermentable carbohydrates, they may help reduce the risk of dental
caries. These claims in no way suggest adjustment in the consumption of
sugar alcohol-containing foods, and to the extent they have such an
effect, it would be limited to the class of foods that contain
sweeteners. Given the small effect, if any, that the claim will have on
the broad range of dietary choices that people make, FDA finds no merit
to this comment.
[[Page 43436]]
-5. Some comments stated that the focus on sugar alcohols in the
proposed claim will detract from proper dental care, although they
provided no evidence to support this contention. One comment stated
that a health claim associated with these products may result in a
decrease in oral health practices of much greater importance to dental
health than diet, i.e., brushing, flossing, fluoride treatments, and
professional dental care, including application of dental sealants and
prophylaxis. The comments stated that the claim should discuss the
importance of proper oral hygiene and dental care, including the use of
fluoride toothpaste daily.
-FDA does not agree that the proposed health claim will detract
from proper dental care. As discussed in the proposed rule and as
mentioned in some of the comments, the incidence of dental caries has
declined over the past 20 years. Coincidentally, the claim ``useful
only in not promoting tooth decay'' has been used for almost 20 years
on sugar alcohol-containing chewing gums and confectioneries. Based on
the historical use of these products and the decline in dental caries,
there is no reason to conclude that the use of this claim has taken
away from proper dental care. Further, the claim is consistent with
public health recommendations.
-However, the agency agrees that information about proper oral
hygiene and dental care as part of good dental health practices may be
useful to consumers of sugar alcohol products. This information is
consistent with information provided in ``The Surgeon General's Report
on Nutrition and Health'' (hereinafter referred to as the Surgeon
General's report) (Ref. 7). Therefore, the agency has been persuaded to
include this type of information among the types of optional
information that a manufacturer may provide as part of the health
claim. Section 101.80(d)(3) (21 CFR 101.80(d)(3)) provides that the
claim may state that oral hygiene and proper dental care may help to
reduce the risk of dental caries.
B. Safety Issues
-In its proposal, the agency noted that several of the sugar
alcohols that are the subject of this proceeding are listed in FDA's
food additive and generally recognized as safe (GRAS) regulations,
i.e., xylitol (Sec. 172.395 (21 CFR 172.395)), mannitol (Sec. 180.25
(21 CFR 180.25)), and sorbitol (Sec. 184.1835 (21 CFR 184.1835)) (see
60 FR 37507 at 37509). In addition, it stated that GRAS affirmation
petitions have been submitted for each of the remaining substances,
i.e., maltitol (GRASP 6G0319), maltitol syrups (HGS syrups) (GRASP
3G0286), isomalt (GRASP 6G0321), lactitol (GRASP 2G0391), HSH (GRASP
5G0304), and HSH syrups (GRASP 1G0375). The agency stated that these
GRAS affirmation petitions are under consideration, and that any
positive action resulting from the proposed rule should not be
interpreted as an indication that the agency has affirmed that the
general food uses of the sugar alcohols according to their respective
petitions are GRAS. FDA stated that such determinations can only be
made after the agency has completed its review of each respective GRAS
petition. Nonetheless, the agency stated that a preliminary review of
the GRAS affirmation petitions had revealed that they contain
significant evidence supporting the safety of these substances, but
that some concerns about the safety of sugar alcohols do exist. The
agency also stated that two of the sugar alcohols that are listed in
FDA's food additive and GRAS regulations, i.e., mannitol (Sec. 180.25)
and sorbitol (Sec. 184.1835), require a warning label regarding
laxation if daily consumption is expected to exceed 20 grams (g) per
day for mannitol and 50 g per day for sorbitol. FDA stated that nothing
in the proposed rule would alter these requirements.
-The agency stated that based on the totality of the evidence, it
was not, at this time, challenging the petitioners' position that the
use of the enumerated sugar alcohols is safe and lawful. Although FDA
tentatively concluded that the petitioners satisfied the requirements
of Sec. 101.14(b)(3)(ii), the agency requested comments on its
tentative conclusion.
-6. Two comments noted that the Joint Food and Agriculture
Organization/World Health Organization (FAO/WHO) Expert Committee on
Food Additives (JECFA) has reviewed the safety data on these sugar
alcohols and concluded that their use is safe, with no need for
restriction other than good manufacturing practices. One of these
comments stated that there is sufficient documentation to support a
general recognition of safety.
-Three comments stated that sugar alcohols can pose health
problems, citing specifically the well-known gastrointestinal
disturbances, such as stomach pain and diarrhea, that can result from
excessive consumption. One of these comments also noted safety issues
raised regarding animal data that associate consumption of large
amounts of sugar alcohols with adrenal medullary hyperplasia and
pheochromocytomas. The comment noted that JECFA will be reviewing these
issues in 1996. (The agency notes that the report from the February
1996 meeting is not yet available.) While these comments opposed
indiscriminate promotion or consumption of sugar alcohol-sweetened
foods, they did not argue that such ingredients were not safe or lawful
as ordinarily used.
-The agency concludes that these comments, taken together,
accurately reflect the current understanding of the safety of sugar
alcohols. They do not, however, provide a basis for the agency to
reject the petitioners' position that the use of sugar alcohols is safe
and lawful or for invoking warnings in addition to those already
required. Therefore, the agency concludes that the requirements of
Sec. 101.14(b)(3)(ii) are satisfied.
C. Exemption from Sec. 101.14(e)(6)
-Under proposed Sec. 101.80(c)(1), sugar alcohol containing foods
must meet the requirements in Sec. 101.14, except that sugar alcohol-
containing foods are exempt from Sec. 101.14(e)(6), the requirement
that foods making health claims contain 10 percent or more of the RDI
or the DRV for vitamin A, vitamin C, iron, calcium, protein, or fiber
per reference amount customarily consumed before any nutrient addition.
-7. One comment asked for clarification that this exemption applied
to all sugar alcohol-containing confectioneries, and not just to
chewing gum, hard candies, and mints.
-FDA notes that the exemption applies to all sugar alcohol-
containing foods. The agency did not specifically limit the exemption
to chewing gum and confectioneries. Because sugar alcohols function as
sweeteners, their use has been as replacements for simple and complex
sugars. Sugar alcohols provide a sweet taste and serve as bulking
agents and, consequently, are used only in certain product categories.
However, these food categories are sufficiently diverse as to make
specific definitional criteria difficult. For this reason, FDA has not
limited the exemption to specific foods. However, the agency wishes to
point out that a food must still meet all of the other requirements in
Sec. 101.80(c)(2)(ii) to be eligible to bear the claim.
-8. Two comments that agreed with FDA's tentative decision to
exempt sugar alcohol-containing foods from Sec. 101.14(e)(6) requested
that sugar alcohol-containing products also be exempt from the
requirement of Sec. 101.14(e)(3) relating to foods with disqualifying
levels of fat, saturated fat, cholesterol, or sodium. One comment
[[Page 43437]]
stated that the agency has authority to grant exemptions from this
requirement when a health claim will assist consumers in maintaining
healthy dietary practices. The comment stated that an exception is
warranted because the health claim will assist consumers in making
decisions relating to dental health in all contexts in which the claim
is used. The comments stated that the presence of high levels of fat,
saturated fat, cholesterol, or sodium does not conflict with the health
message because these nutrients are not adversely associated with
dental health.
-FDA has established different disqualifying levels for different
categories of foods, depending on the role that they play in the daily
diet. Section 101.14(a)(5) defines the disqualifying level for
individual foods as 20 percent of the Daily Values (DV's) for total
fat, saturated fat, cholesterol, and sodium. These levels translate to
13.0 g of total fat, 4 g of saturated fat, 60 milligrams (mg) of
cholesterol, and 480 mg of sodium per reference amount customarily
consumed, per labeled serving size, and, for foods with reference
amounts customarily consumed of 30 g or less or 2 tablespoons or less,
per 50 g. The regulations also make additional allowances for main dish
products and meal-type products (see Sec. 101.14(a)(5)(i) and (ii)).
-A food that exceeds the disqualifying level for any of the four
disqualifying nutrients may not bear a health claim unless the agency
has granted an exemption ``based on a finding that such a claim would
assist consumers in maintaining healthy dietary practices'' (section
403(r)(3)(A)(ii) of the act).
-The comment requesting the exemption of sugar alcohol-containing
foods from the disqualifying levels provided no evidence to demonstrate
that the presence of the claim on foods containing high levels of fat,
saturated fat, cholesterol, or sodium will benefit consumers other than
to suggest that the claim would appear on more foods. This rationale is
not consistent with the basic notion that it makes no sense to include
a health claim in the labeling of a food that contains other nutrients
at a level that increases the risk of other diseases unless a clear
benefit for consumers can be demonstrated (see 58 FR 2478 at 2489 to
2490).
-In ``the 1995 nutrient content and health claims proposed rule,''
FDA has considered the instances where disclosure rather than
disqualification may be appropriate and discussed these in this
proposal to amend its regulations on nutrient content and health claims
to provide additional flexibility in the use of these claims on food
products. FDA highlighted factors that it would consider in deciding
whether to exempt a food from disqualification, including the level of
public health importance, the availability of foods that qualify for a
health claim, and evidence that the population the claim targets is not
at risk for the disease associated with the disqualifying nutrients. It
stated that exceptions to Sec. 101.14(e)(3) should be granted on a
case-by-case basis, using a petition process. It also proposed new
Sec. 101.70(f) (21 CFR 101.70(f)) to provide guidance for petitioners
requesting an exception to the prohibition in Sec. 101.14(e)(3) of
health claims for foods exceeding the disqualifying levels identified
in Sec. 101.14(a)(5) (see 60 FR 66206 at 66224).
-The comment did not submit any information of the type that FDA
needs as the basis for an exemption. In the absence of such
information, FDA finds that it cannot conclude that the population at
risk for dental caries is not at risk, for example, for heart disease.
The agency is therefore denying the request to exempt sugar alcohol-
containing foods from the disqualifying levels established in
Sec. 101.14(a)(5).
D. Relationship Between Sugar Alcohols and Dental Caries
-9. Some comments stated that in the proposal the agency had
correctly identified the interaction between sugars and other
fermentable carbohydrates and oral bacteria in the development of
dental caries. However, these comments stated that the proposed health
claim puts undue emphasis on sugars and sucrose in the causation of
dental caries. The comments stated that the dental community is
unanimous in the view that all fermentable carbohydrates, not just
sugars, have the potential to contribute to tooth decay. One comment
stated that to the extent that dietary factors play a role in caries,
the most important factor is frequency of consumption of fermentable
carbohydrates and not consumption per se. One comment quoted the report
of the Dietary Guidelines Advisory Committee on the Dietary Guidelines
for Americans, 1995 (Ref. 101) which states:
-[B]oth sugars and starches can promote tooth decay. The more
often you eat foods that contain sugars and starches, and the longer
these foods are in your mouth before you brush your teeth, the
greater the risk for tooth decay. Thus, frequent eating of foods
high in sugars and starches as between-meal snacks may be more
harmful to your teeth than eating them at meals and then brushing.
-FDA agrees that all fermentable carbohydrates, including sugars
and starches, can promote tooth decay. As stated in the recently
revised Dietary Guideline for Americans (Ref. 101), both the frequency
of consumption and the duration of exposure of teeth to sugars and
starches contribute to the risk of dental caries. However, the agency
points out that, as outlined in the proposal, the basis for the
proposed claim centers around the use of sugar alcohols in place of
sugars. Sugar alcohols cannot be used in place of all fermentable
carbohydrates. Rather, sugar alcohols function as sweeteners and
bulking agents, and their use is primarily in the manufacture of gums
and confectioneries. Moreover, the significance of the claim in the
context of the total daily diet is based upon: (1) The presence in the
diet of foods sweetened with simple and complex sugars, and (2) the
fact that sugar alcohols, because of their very low fermentability,
when substituted for other sugars, do not promote dental caries.
-Nonetheless, the agency agrees that it would be helpful to
consumers to be informed about the overall role of fermentable
carbohydrates in the diet and thus is persuaded to revise
Sec. 101.80(a)(2) and (a)(4) to reflect that all fermentable
carbohydrates, i.e., sugars and starches, are cariogenic and to include
in these paragraphs information about dental caries provided in Dietary
Guidelines for Americans (Ref. 101). In proposed Sec. 101.80(a)(2), the
agency described the relationship between dietary sugars and tooth
decay, that is how bacteria metabolizes sugar, causing acid and forming
plaque. This was followed by a statement that the dental plaque results
in more acid that deminarilizes enamel after prolonged exposure. The
final statement was a precaution then, that between-meal consumption of
sugary foods would cause more tooth decay. In this document, the agency
is changing Sec. 101.80(a)(2) to include the relationship between
consumption of fermentable carbohydrates and starches, as well as
dietary sugars, to tooth decay. The last sentence states that ongoing
exposure to starches, as well as dietary sugars, increases the risk for
tooth decay.
-The agency notes that sucrose is still considered the most
cariogenic sugar, and that this substance has been shown to promote the
growth of plaque more than other sugars (Ref. 71). Therefore, the
agency is highlighting, and permitting the use of the statement
regarding, the cariogenicity of sucrose. In addition, consistent with
Sec. 101.4(b)(20), the term ``sugar'' may be used as a synonym for
``sucrose.''
[[Page 43438]]
-The agency is also revising Sec. 101.80(a)(4) to state that sugar
alcohols can be used as sweeteners to replace dietary sugars, such as
sucrose and corn sweeteners, in foods such as chewing gums and
confectioneries, and that they are significantly less cariogenic than
dietary sugars and other fermentable carbohydrates. The agency is
adding the statement regarding ``corn sweeteners'' to reflect the fact
that sugar alcohols are used to replace more than sucrose in chewing
gums and confectioneries, and that they are used primarily as
sweeteners. The agency is deleting the statement, ``Thus, replacing
dietary sugars with sugar alcohols helps to maintain dental health,''
from Sec. 101.80(a)(4) because it is a statement of the significance of
the relationship between sugar alcohols and dental caries which is
addressed in Sec. 101.80(b). Consequently, this statement is
superfluous in Sec. 101.80(a). The agency concludes that, with the
above revisions, Sec. 101.80(a)(2) and (a)(4) accurately reflect the
relationship between fermentable carbohydrates and dental caries and
are not misleading as to the role of sugar alcohols in not promoting
tooth decay.
-The agency is also deleting proposed Sec. 101.80(d)(2), which
permitted use of the term ``sugar'' or ``sucrose'' when referring to
sucrose. Since Sec. 101.80(d)(1) allows the claim to include
information from Sec. 101.80(a), and Sec. 101.80(a)(2) has been revised
to include ``sugar'' as a synonym for ``sucrose,'' Sec. 101.80(d)(2) is
repetitive and unnecessary. As a result of this action, proposed
Sec. 101.80(d)(3) is being redesignated as Sec. 101.80(d)(2). FDA is
also adding in new Sec. 101.80(d)(3) information regarding the
importance of proper dental care in response to the comments discussed
in comment 5 of this document.
-10. Some comments stated that the agency's emphasis in the
proposal on sticky foods as a factor in dental caries was inaccurate.
One comment stated that more recent scientific evidence does not
support the relationship between foods that easily stick to teeth and
dental caries. The comment included a study to support this assertion.
The comment stated that the high starch and low sugar foods are
retained on teeth longer than high sugar and low starch foods. One
comment stated that a health claim statement about foods that easily
stick to teeth is misleading and could drive consumers towards
erroneous food choices in the interest of avoiding what they think are
sticky foods.
-The agency concurs that the evidence submitted suggests that the
degree of stickiness of a food, as perceived subjectively by the
consumer, does not correlate with the actual retention of the food on
human dentition in vivo (Refs. 92 and 93). Therefore, the agency is
deleting reference to sticky foods in Sec. 101.80(a)(2).
-11. Several comments disagreed with the statements that U.S. diets
tend to be high in sugars, and that government organizations recommend
decreased consumption of sugars. The comments stated that FDA's 1986
Sugars Task Force report (Ref. 94) concluded that the average daily
intake for added sugars accounted for 11 percent of the daily calorie
intake for the total population. One comment stated that this amount
approximates the amount (10 percent) recommended by the Select
Committee on Nutrition and Human Needs in its second edition of Dietary
Goals for the United States (1977) (Ref. 100). The comments stated that
current dietary guidelines advise that sugars be used only in
moderation but not restriction of sugars consumption. One comment
stated that the proposed health claim implicates sugars as a diet and
disease concern, which will mislead consumers as to the health
significance of sugar consumption.
-FDA agrees that the focus of dietary guidance for the general
population is to choose a diet moderate in sugars and to avoid
excessive snacking (Ref. 101). Therefore, FDA has modified
Sec. 101.80(a)(3) to delete statements regarding the sugars consumption
in the American diet and dietary recommendations to reduce sugars
intake. In their place, FDA has included information from the recent
Dietary Guidelines for Americans (Ref. 101) in Sec. 101.80(a)(3), which
states that dental caries is still widespread in the United States
creating a burden on Americans. The government's dietary guidelines
suggest selecting diets with moderation in sugars and avoidance of
excessive snacking. Because snacks rich in sugars and starches may
result in a greater incidence of tooth decay since they are less likey
to be followed by brushing.
-The agency disagrees with the comment that the health claim will
mislead consumers as to the health significance of sugars consumption.
Sugars consumption has long been associated with risk of dental caries,
and information reflecting this fact is a common component of public
health education efforts. Moreover, as a result of the changes that FDA
has made, Sec. 101.80(a)(2), (a)(3), and (a)(4) accurately reflect the
relationship that exists among sugar alcohols, dietary sugars and other
fermentable carbohydrates, and dental caries. Thus, there is less
chance that consumers could be misled. In light of these changes, the
agency has revised the title of Sec. 101.80(a) to more accurately
reflect the contents of this paragraph. The revised title is
``Relationship between dietary carbohydrates and dental caries.''
-12. Some comments stated that there is no indication that a sugar
alcohol and dental caries health claim will have any impact on sugars
consumption or on the incidence of dental caries in the U.S.
population. The comments stated that sugars consumption remained stable
from 1977 to 1988, and that dental caries decreased during that time.
One comment stated that dietary counseling, to the general public, on
sugar consumption is an ineffective caries prevention technique. The
comment stated that dietary guidelines do not advocate the reduction in
sugars in the diet as a means to lower the incidence of dental caries.
-The intent of the health claim is to provide consumers with public
health information that will enable them to make dietary choices that
can affect their risk of dental disease. Dental caries are recognized
as an important and widespread public health problem in the United
States. Although dental caries among children are declining, the
overall prevalence of the condition imposes a substantial economic
burden because of the health care costs associated with care for this
condition. In addition, as discussed in section II.A. of this document,
there is evidence to show that the decline in dental caries may not
apply to all tooth surfaces, and that a substantial subset of children
continue to exhibit a high incidence of tooth decay (Ref. 94). In
addition, little is known about trends in oral health in the older
population. There are some studies that suggest that the caries
incidence in adults is considerable (Ref. 95). Until means of
preventing dental caries are available to the entire U.S. population,
dietary counseling is an important element of dental care (Ref. 95).
-The sugar alcohol-containing foods that have used this dental
caries claim over the past 20 years have primarily been snack foods,
i.e., chewing gums and confectioneries. Snack foods are a part of the
diets of many Americans. As stated in the recent Dietary Guidelines for
Americans (Ref. 101), frequent between-meal snacks that are high in
sugars and starches may be more harmful to teeth than eating the same
foods at meals and then brushing. Therefore, chewing gums and
confectioneries that contain sugar alcohols but no fermentable
carbohydrates provide an alternative
[[Page 43439]]
food choice for those consumers who enjoy sweetened snack foods yet are
interested in dental health.
-The comments incorrectly suggest this health claim is intended to
imply that sugar alcohol-containing foods will prevent dental caries.
The agency wishes to highlight the difference between a prophylactic
effect and a nonpathologic effect. The proposed claim does not state
that sugar alcohols provide a prophylactic benefit, i.e., the claim is
not that they will prevent tooth decay. Rather, the claim states that
sugar alcohols do not promote dental caries. The evidence supports a
beneficial role of sugar alcohols in the absence of other carbohydrates
in maintaining plaque pH above a level that promotes enamel
demineralization.
E. Significance of the Relationship Between Sugar Alcohols and Dental
Caries
-Under proposed Sec. 101.80(b), the agency stated that sugar
alcohols do not promote dental caries because they are slowly
metabolized by bacteria to form some acid. The rate and amount of acid
production from sugar alcohols is significantly less than that from
sucrose, and therefore consumption of sugar alcohols does not cause the
loss of minerals from tooth enamel.
-13. Some comments argued that there is scientific evidence to show
that oral bacteria can adapt to sorbitol, thus making it cariogenic.
One comment stated that there is considerable debate over the potential
for an adaptive shift in the oral ecology in response to the
consumption of sugar alcohols, specifically that plaque bacteria may
adapt to xylitol, thus making it potentially cariogenic.
-FDA notes that the fermentability of sorbitol and other sugar
alcohols, in human and animal models and in vitro, was discussed in the
proposed rule (60 FR 37507) and has been reviewed in a number of
published articles (Refs. 95 to 99 and 102). This information shows
that fermentation of sorbitol proceeds at a slow rate, with a final pH
remaining above the low pH levels achieved with glucose or sucrose.
-In vitro studies have shown that dental plaque, when incubated
with sorbitol, did not produce enough acid to cause enamel
decalcification. Some investigators note, however, that it may be very
misleading to extrapolate from an in vitro pure culture situation to
that of a mixed microbial community in vivo (Ref. 102).
-In addition to the fact that the use of a purified culture does
not reflect a normal mix of the types of oral bacteria, the results of
in vitro studies that showed acid production from sorbitol after a
prolonged period of incubation (22 hours) have little relevance to the
in vivo situation. In vivo studies have shown that plaque pH drops only
marginally after consumption of sorbitol-containing foods (Ref. 95).
Moreover, plaque pH telemetry tests have been used to assess the
acidogenic potential of sorbitol on plaque in situ (Ref. 95). These
tests have demonstrated consistently that the consumption of sorbitol
is not associated with an acidification of dental plaque that would
suggest cariogenic risk.
-As discussed in the proposed rule (60 FR 37507 at 37523), there is
evidence that suggests that long-term, uninterrupted consumption of
sorbitol results in adaptation by oral bacteria and, therefore, in more
acid production. However, microbiological studies have shown that the
final pH obtained after long-term exposure to sorbitol remained above a
plaque pH level associated with cariogenic risk (Ref. 96, 98, 99, and
102), and that pre- and post-adaptation rates of acid production from
sorbitol in vitro are very similar and very low compared to glucose
(Ref. 102). Additionally, adaptation is inhibited in the presence of
glucose, as bacterial metabolism preferentially switches to the
metabolic substrate that is more readily used as an energy source
(Refs. 46, 95, and 60 FR 37507 at 37512). At the same time that
bacteria switch to glucose as the preferred energy source, the
mechanism that enables them to metabolize sorbitol is repressed (Ref.
95).
-Bacteria in plaque may also show some level of adaptation to long-
term exposure to mannitol (Ref. 97). As with sorbitol, however, the
amount of acid produced from bacterial metabolism of mannitol is small
and very slow compared to bacterial metabolism of glucose. The study
results showed that final plaque pH levels in situ did not drop to
levels that demineralized dental enamel (Ref. 97).
-In response to the comment that plaque bacteria may adapt to
xylitol, thus making it potentially cariogenic, the agency notes that
some in vitro studies have isolated plaque microorganisms capable of
metabolizing xylitol. Incubating certain strains of bacteria over
prolonged time showed increased acid production from xylitol (Ref. 97).
The amount of acid produced, however, was very small and has not been
shown to promote dental enamel demineralization. There is no evidence
to show that adaptation to xylitol is maintained when plaque bacteria
are exposed to other fermentable carbohydrates in the daily diet.
-The agency concludes, based on the evidence, that frequent or
long-term use of sugar alcohols, especially in the context of a daily
diet that contains other carbohydrates that are preferentially
metabolized by oral bacteria, may result in some adaptation by the
bacteria in plaque to these substances. The effect, however, would not
be such that consumption of sugar alcohols would contribute in any way
to the risk of dental caries in the general population.
F. Nature of Claim and Optional Information
-In Sec. 101.80(c)(2)(i), the agency proposed specific requirements
on the nature of the claim, including the use of statements such as
``does not promote,'' ``useful in not promoting,'' or ``expressly for
not promoting'' dental caries. In Sec. 101.80(c)(2)(i)(C), FDA
proposed, that for packages with a total surface area available for
labeling of 15 or more square inches, the claim state that dental
caries depends on many factors.
-14. Several comments stated that the proposed regulation should
require that the labeled claim identify other dietary factors that are
associated with dental caries. One comment stated that the claim should
allude to the role of all fermentable carbohydrates in the development
of dental caries, although the comment did not provide data to show
that the term ``fermentable carbohydrates'' is meaningful to consumers.
Other comments emphasized the importance of addressing issues related
to frequent consumption of fermentable carbohydrates.
-Issues related to providing information about dietary factors are
relevant to the requirement that the claim enable the public to
understand the significance of the information in the context of a
total daily diet (section 403(r)(3)(B)(iii) of the act). Therefore, in
considering these comments, the agency reviewed the dietary context in
which the claim would be presented. While the claim for sugar alcohols
is about the effect of using them to replace dietary sugars, the agency
is persuaded that the claim should include information to set the
message within the broader context of fermentable carbohydrates so as
to provide overall dietary information potentially beneficial to
consumers. It is well accepted that the relationship between diet and
the development of dental caries is based on the interaction between
oral bacteria and the presence of substances that support the growth
and development of these bacteria, especially the bacteria in plaque,
and on the production of acid in dental plaque.
[[Page 43440]]
As noted in several of the comments, it is also well accepted that
dietary carbohydrates, such as dietary sugars and starches, are readily
fermented by oral bacteria and can promote the growth and development
of these bacteria.
-Further, in its review of the scientific evidence in the proposal
(60 FR 37507), the agency tentatively concluded that, in the absence of
other fermentable carbohydrate-containing foods, sugar alcohol-
containing foods did not promote dental caries because they do not
lower plaque pH to the level associated with enamel demineralization.
The agency received no comments or additional data to cause it to
change this tentative finding. Therefore, the agency now concludes
that, for the public to understand fully, in the context of other
dietary components, the relationship between consumption of sugar
alcohols and the promotion of dental caries, information about other
carbohydrates needs to be included as part of the claim.
-In addition, the agency acknowledges the comments' emphasis on
issues related to frequency of consumption. The importance of this
factor is supported by the Dietary Guidelines for Americans (Ref. 101).
FDA addressed this aspect of the diet-disease relationship when it
included a statement concerning frequent between meal consumption in an
example of a model health claim.
- Therefore, in response to the comments, FDA is adding
Sec. 101.80(c)(2)(i)(A), which provides that the claim must include the
information that frequent between-meal consumption of foods high in
sugars and starches can promote tooth decay. This information is
consistent with the information provided to consumers in the Dietary
Guidelines for Americans (Ref. 101), which states that frequent eating
of foods high in sugars and starches as between-meal snacks can promote
tooth decay. The agency is using the phrase ``sugars and starches,''
which is used by the Dietary Guidelines for Americans (a document
intended for the general public), because it is apparently more
familiar to consumers, and thus likely to be better understood by them,
than is the phrase ``fermentable carbohydrates.''
-Consistent with the proposal, the information that FDA is
requiring on packages with a total surface area available for labeling
of 15 or more square inches must include a statement that the sugar
alcohols present in the food do not promote tooth decay or (as
discussed in comment 17 of this document) may reduce the risk of tooth
decay (Sec. 101.80(c)(2)(i)(B)).
-Further, to assist consumers in comprehending the information
specific to this claim within the context of the total daily diet, and
to avoid confusion about sugar alcohols' role in the diet given the
inclusion of information about starches, FDA is providing in
Sec. 101.80(d)(4) that the claim may state that the sugar alcohol
serves as a sweetener. This information will clarify that the sweetener
used in the product does not promote tooth decay.
-Additionally, the agency recognized in preparing the final rule
that it had inadvertently failed to provide for the declaration of the
nutrient in proposed Sec. 101.80(c)(2)(i). Therefore, FDA is adding
Sec. 101.80(c)(2)(i)(C) which states that in specifying the nutrient,
the claim shall state ``sugar alcohol,'' ``sugar alcohols,'' or use the
name of the specific sugar alcohol. This approach is consistent with
the approach that the agency has taken in Sec. 101.9(c)(6)(iii) on the
declaration of sugar alcohols within the Nutrition Facts panel.
-In light of these revisions, FDA has redesignated proposed
Sec. 101.80(c)(2)(i)(A) (see 60 FR 37507 at 37530) as
Sec. 101.80(c)(2)(i)(B) and redesignated proposed
Sec. 101.80(c)(2)(i)(B), in which the agency stated that the terms
``dental caries'' or ``tooth decay'' be used to specify the disease, as
Sec. 101.80(c)(2)(i)(D). There were no comments on the latter
provision.
-15. One comment agreed with the abbreviated claim and stated that
it carries the necessary consumer message. The comment further stated
that, as a result, package size should not determine the length of the
health claim. -
-The agency disagrees. As discussed in the agency's response to
comment 14., issues related to providing information about dietary
factors are relevant to the requirement that the claim enable the
public to understand the significance of the information in the context
of a total daily diet (section 403(r)(3)(B)(iii) of the act). While the
claim for sugar alcohols is about the effect of using them to replace
dietary sugars, the agency is persuaded by other comments that the
claim should include information to set the message within the broader
context of fermentable carbohydrates and their frequency of consumption
so as to provide overall dietary information that is useful to
consumers. The importance of fermentable carbohydrates and of the
frequency of consuming such foods between meals is supported by the
Dietary Guidelines for Americans (Ref. 101).
-16. One comment stated that the elements of the claim for small
packages do not adequately explain the significance to a person's diet
of including the particular food product bearing the claim.
-As discussed in the proposed rule (see 60 FR 37507 at 37525), the
claim ``useful in not promoting tooth decay'' has been used on a
limited number of foods, primarily chewing gums and confectioneries,
for 20 years. This claim has a history of being used by consumers
without particular confusion. Thus, the agency concludes that it is not
necessary to include additional information as part of this claim when
it appears on small packages to prevent it from being misleading.
-17. Some comments stated that it was important that label
statements of the claim include reference to nondietary factors,
particularly oral hygiene, that are associated with dental caries. One
comment stated that dental care and oral hygiene are more important
factors in the nonpromotion of dental caries than the substitution of
sugar alcohol-containing foods for sugar-containing foods.
-One comment, however, stated that the requirement that a claim
state that tooth decay depends on many factors (for larger packages)
does not add to an understanding of the claim and would only confuse
the message that sugar alcohol-containing products do not promote tooth
decay. Other comments supported an abbreviated claim and asserted that
reference to the multifactorial etiology of dental caries does not add
information needed by consumers.
-As discussed in the proposal, the agency acknowledges that the
development of dental caries involves a complex interplay of many
factors, both dietary and nondietary. Nonetheless, while there is an
important role for dental care and oral hygiene in reducing the
incidence of dental caries, the agency notes that current and well
recognized recommendations also stress the role of diet.
-In response to comments described above, the agency has considered
the need for the inclusion of statements within the label claim
concerning the multifactorial nature of dental caries and information
on nondietary factors to help reduce the risk of this disease.
-The agency notes that comments that requested that the agency
require that nondietary factors be included in the health claim
provided no evidence that claims about the relationship among sugar
alcohols, fermentable carbohydrates, and dental caries are
[[Page 43441]]
misleading if a reference to nondietary factors is not included in the
claim. Given the unique history of this claim, i.e., that it has been
used for approximately 20 years, and the fact that the incidence of
dental caries has decreased over that period, the agency is not
persuaded that the absence of reference to specific nondietary factors
in this claim has had adverse effects that would suggest that the claim
is misleading.
-Moreover, FDA has decided not to require that the statement
``depends on many factors'' be included as part of the claim on
products with 15 or more square inches of space available for labeling.
The fact that the incidence of dental caries has declined over the past
20 years strongly suggests that public health education, including
information in preventive dental measures, that has been available to
consumers during this period has been effective (Ref. 95). Moreover, as
stated above, FDA is aware of the unique history of this claim. Given
the history of this claim and the public education that has been
available, FDA has reconsidered its tentative view that the statement
``depends on many factors'' is necessary to the consumer understanding
of the claim. FDA concludes that the available evidence demonstrates
that the claim is complete without this information, and, therefore,
that this information need not be made a required element of this
health claim. However, the agency is providing that the information may
be included in the health claims.
-Thus, in this document, the agency is deleting proposed paragraphs
Sec. 101.80(c)(2)(i)(C) and (c)(2)(i)(D). It is modifying
Sec. 101.80(d)(2) to provide that the claim may state that the
development of dental caries depends on many factors and list those
risk factors. In place of proposed Sec. 101.80(c)(2)(i)(C), the agency
is requiring in Sec. 101.80(c)(2)(i)(F) that the claim not imply that
consumption of foods containing sugar alcohols is the only recognized
means of achieving reduced risk of dental caries. Consistent with these
changes, FDA has deleted the model claim in proposed Sec. 101.80(e)(2)
that illustrated a claim with the statement ``depends on many
factors.''
-18. One comment suggested since the agency had proposed to
authorize a claim using the terminology ``does not promote,'' then a
claim relative to reducing the risk for dental caries was a separate
claim that would not be authorized by a final rule in this proceeding.
The comment suggested that it would be necessary to obtain separate
authorization for such a claim as a means of conveying the relative
superiority of certain sugar alcohols in affecting the occurrence of
dental caries.
-The proposal on sugar alcohols focused on the nonpromotion of
dental caries, but it was not the agency's intent to specifically
exclude the concept of risk reduction from the claim. In response to
this comment, the agency considered the coverage of the claim and noted
that, in proposed Sec. 101.80(d)(3), it had listed risk factors for
dental caries. One factor listed was the frequent consumption of
sucrose or other fermentable carbohydrates. The substitution of sugar
alcohols in diets for foods containing sucrose or other fermentable
carbohydrates reduces exposure to one risk factor for dental caries.
Thus, FDA has concluded that it is appropriate to characterize the
relationship as ``may reduce the risk.'' To make this finding explicit,
the agency has inserted the phrase ``may reduce the risk'' in
Sec. 101.80(c)(2)(i)(B).
-As for claims of superiority, the agency notes that the provision
of the act that authorizes health claims focuses on diet/disease
relationships. Once a relationship is established, there is no further
provision within the health claim regime for claims of superiority in
affecting the disease in question. A manufacturer who makes a statement
on the label or in labeling of a food concerning the superiority of the
effect of one substance compared to another does so at the risk that
FDA will find the claim to be false and misleading and thus subject to
regulatory action under section 403(a) of the act.
G. Plaque pH Test
-In Sec. 101.80(c)(2)(ii)(C), FDA proposed to provide that to
qualify to bear a claim, the sugar alcohol-containing food not lower
plaque pH below 5.7 by bacterial fermentation either during consumption
or up to 30 minutes after consumption, as measured by in vivo tests.
The agency asked for comments on this approach.
-19. Two comments asked that FDA clarify that sugar alcohol-
containing chewing gums and confectioneries will be exempt from any
plaque pH test requirement. One comment stated that the plaque pH
requirement should be specific to sugar alcohol-containing foods that
also contain fermentable carbohydrates. One comment stated that
manufacturers can tell from the composition of the food if the plaque
pH test is needed. One comment stated that the agency should give
manufacturers flexibility in selecting the best protocol for testing
plaque pH. One comment requested that the agency be more specific as to
the type of test used to determine plaque pH. The comment stated that
the pH of 5.7 is an appropriate threshold value for the pH when
measured at the inner plaque surface (i.e., at the interface between
plaque and dental enamel) at interproximal sites. The comment stated
that a different threshold pH value is appropriate for plaque pH
measurements obtained with other techniques and at other sites.
-In the proposed rule, the agency also stated that the
acidogenicity of HSH and other sugar alcohol mixtures is related to the
manufacturing process, and that the process may vary among
manufacturers. The agency asked for comments on how to determine
whether sugar alcohol mixtures, such as HSH, when used in a food whose
label bears a dental caries health claim, are in compliance with any
final rule resulting from the proposal (60 FR 37507 at 37524). One
comment stated that the agency's concern regarding the potential
acidogenicity of HSH is covered with the plaque pH test.
-When FDA asked for comments in the proposal about establishing a
minimum plaque pH requirement, it was addressing concerns that a sugar
alcohol-containing food might also contain a fermentable carbohydrate
that would render the food cariogenic (60 FR 37507 at 37526). The
application of the plaque pH test is thus predicated on the inclusion
of fermentable carbohydrates in a food that contains sugar alcohols.
Consequently, there is no need to exempt certain sugar alcohol-
containing foods from the plaque pH test. Rather, if sugar alcohols are
used as sweeteners in a food, and there are no fermentable
carbohydrates in the food, testing is not necessary.
-In response to the comment concerning the need for manufacturers
to have flexibility in selecting the method for measuring plaque pH,
the agency points out that it does not require manufacturers who wish
to make the health claim to perform the plaque pH test, nor does it
require that a specific procedure be used when the test is performed.
However, the agency is specifying in Sec. 101.80(c)(2)(ii)(C) the
method that it will use to determine whether a food complies with the
plaque pH requirement in this regulation. In doing so, FDA is
responding to the comment that requested that the agency specify the
procedure. Manufacturers are free to decide for themselves whether and
how to test their products to satisfy themselves that the foods comply
with Sec. 101.80(c)(2)(ii)(C)). If they fail to do so, they risk that
FDA will find in its compliance testing of their food that the food
does not comply with the plaque
[[Page 43442]]
pH standard and thus is subject to regulatory action.
-The plaque pH test that the agency will use to determine whether a
food is in compliance with this final rule is the indwelling plaque pH
method, an intraoral telemetry method. The Swiss have used this method
since 1969 for regulatory purposes, and it has been shown to be very
reliable (Ref. 75). The indwelling plaque pH method is considered by
many as the benchmark for plaque pH testing (Ref. 46). It is not the
agency's intent to use this method of plaque pH testing as a means to
rank the relative cariogenicity of foods; rather, the agency will use
this method to determine whether foods that contain both sugar alcohols
and fermentable carbohydrates qualify to bear this health claim.
-With regard to the agency's request for comments about the
potential acidogenicity of HSH and other sugar alcohol mixtures, the
agency agrees with the comment that stated that the agency's concern
regarding the potential acidogenicity of HSH is covered with the plaque
pH test. Manufacturers who produce HSH will be responsible to ensure
that their product, when used in a food that bears a dental caries
health claim, is in compliance with the Sec. 101.80. If sugar alcohol
mixtures, such as HSH, are used as sweeteners in a food, and there are
no fermentable carbohydrates contributed by the sugar alcohol mixture
or in the food, plaque pH testing is not necessary. If fermentable
carbohydrates are present, manufacturers will need to ensure that the
mixture does not lower plaque pH below 5.7.
H. Applicability of Claim to Other Substances
-In proposed Sec. 101.80(c)(2)(ii)(B), the agency specified the
substances (i.e., sugar alcohols) that are the subject of the sugar
alcohol and dental caries proposed regulation.
-20. Two comments requested that proposed Sec. 101.80(c)(2)(ii)(B)
be modified to allow any sugar alcohol that may be developed in the
future to fall under this health claim without amending the regulation.
-FDA is denying this request. Under the general requirements for
health claims, the petitioner must show how the substance that is the
subject of the health claim conforms to the requirements of
Sec. 101.14(b). For those substances that are to be consumed at other
than decreased dietary levels, the petitioner must demonstrate to FDA's
satisfaction that the substance is safe and lawful under the applicable
food safety provisions of the act (Sec. 101.14(b)(3)(ii)). Moreover,
the agency would expect, in the case of a new sugar alcohol, to see
evidence that the substance will not lower plaque pH below 5.7. If such
showing is made, FDA will take action to add the substance to the list
in this regulation, which has been renumbered as
Sec. 101.80(c)(2)(ii)(B).
-21. Two comments requested that FDA make provision in this
regulation for additional FDA approved ingredients, e.g., polydextrose,
that satisfy the requirement that they do not lower plaque pH below
5.7. The comments stated that this would obviate the need to amend the
regulation as additional ingredients become available in the future.
One comment stated that the plaque pH test serves as the true marker of
noncariogenicity, not the presence of sugar alcohols or the absence of
sugars. The comment suggested that the plaque pH test is the only
critical endpoint necessary to justify use of this health claim.
-One comment noted that the agency suggested that this claim will
apply primarily to snack foods that do not play a fundamental role in
structuring a healthy diet. The comment stated that other food products
could be designed to not lower plaque pH below the required level of
5.7. The comment stated that products widely known to be noncariogenic
and to have a role in a healthy diet, e.g., cheese, would be unable to
bear this claim. The comment suggested that the claim be limited to
chewing gums and confectioneries, although the comment provided no
background on how to differentiate confectioneries from snack foods,
nor did it provide evidence as to how this limitation would advance the
purposes of the health claim provisions of the act.
-FDA is denying the requests to make provision in this final rule
for other ingredients, such as polydextrose, that do not lower plaque
pH below 5.7. The requirement that the food not lower plaque pH below
5.7 is not the only criterion that must be satisfied for a food to bear
the health claim. The agency recognizes that there may be scientific
evidence to show that foods that do not contain sugar alcohols would
qualify to bear a nonpromotion of dental caries health claim. However,
the health claim petition that is the subject of this rulemaking (Ref.
1), which was filed in accordance with the requirements of Sec. 101.70,
addressed only certain sugar alcohols and presented the scientific
evidence pertaining to those substances. The agency did not review the
totality of publicly available evidence on the cariogenicity of other
ingredients or other foods. Without assurances that the substance in
question, e.g., polydextrose, meets the entire set of criteria for a
health claim, the authorization for the claim cannot be broadened to
include other substances.
-In response to the comment as to why the claim is being allowed on
foods that contain sugar alcohols (and meet other criteria) and is not
limited to only gums and confectioneries, the agency points out that
the claim is based upon the substitution of sugar alcohols for
fermentable carbohydrates, not on the use of certain foods. To the
extent that consumers can select foods that contain fewer fermentable
carbohydrates, their chances of reducing their risk of developing
dental caries are increased. Limiting the claim to certain categories
of foods would limit the significance of the claim and not serve the
interests of the consumer.
I. Other Issues
-The agency proposed that any final rule that may issue based upon
the proposal become effective 30 days following its publication.
-22. Two comments requested that FDA change the effective date of
the final rule to 6 months following its publication. The comments
stated that this change would allow time for industry to change labels
on products that may need changing if wording changes on the claim are
needed.
-FDA has considered the issue of the compliance date and has
concluded that the compliance date for this regulation will be January
1, 1998. This date is consistent with that proposed by FDA in the
``Uniform Compliance Date for Food Labeling Regulations'' proposal rule
(hereinafter referred to as the ``uniform
FR Doc. 96-21481 Food Labeling: Health Claims; Sugar Alcohols and Dental Caries
compliance date'' proposed
rule) (61 FR 16422, April 15, 1996). In that document, the agency
stated that it periodically has announced uniform compliance dates for
new food labeling requirements. It stated that use of a uniform
compliance date provides for an orderly and economical industry
adjustment to new labeling requirements by allowing sufficient lead
time to plan for the use of existing label inventories and the
development of new labeling materials. FDA stated that this policy also
serves consumers' interests because the increased cost of multiple
short-term label revisions that would otherwise occur would likely be
passed on to consumers in the form of higher food prices. Although FDA
is adopting January 1, 1998, as the compliance date, the agency is
encouraging firms to begin voluntary compliance as early as possible
after publication of this rule and to begin making changes when they
reprint their labels.
[[Page 43443]]
-III. Decision to Authorize a Health Claim Relating Sugar Alcohols
to Dental Caries
-FDA has considered all of the comments that it received in
response to the sugar alcohol and dental caries health claim proposal.
The agency concludes that the relationship between sugar alcohols and
dental caries is truthful, not misleading, and scientifically valid in
that there is significant scientific agreement based on the totality of
publicly available scientific evidence that sugar alcohols do not
promote dental caries. Therefore, FDA is authorizing this claim,
although based on some of the comments, the agency has been persuaded
to make a number of editorial changes in the proposed codified material
of the health claim.
-IV. Environmental Impact
-The agency has previously considered the environmental effects of
this rule as announced in the proposed rule (60 FR 37507). At that
time, the agency determined under 21 CFR 25.24(a)(11) that this action
is of a type that does not individually or cumulatively have a
significant effect on the human environment. No new information or
comments have been received that would affect the agency's previous
determination that there is no significant impact on the human
environment and that an environmental impact statement is not required.
-V. Analysis of Impacts
-FDA has examined the economic implications of the final rule
establishing a health claim for sugar alcohols and dental caries as
required by Executive Order 12866 and the Regulatory Flexibility Act
(Pub. Law 96-354) as amended by the Small Business Regulatory
Enforcement Fairness Act of 1996. Executive Order 12866 directs
agencies to assess all costs and benefits of available regulatory
alternatives and, when regulation is necessary, to select regulatory
approaches that maximize net benefits (including potential economic,
environmental, public health and safety effects; distributive impacts;
and equity). FDA finds that this final rule is not a significant rule
as defined by Executive Order 12866.
-In response to the proposal, FDA received two comments suggesting
that the costs of the proposed health claim exceed the benefits. One
comment suggested that parents who substitute sugar alcohol containing
snacks for other snack foods will be trading dental caries for gastric
problems in their young children. The second comment stated that,
because gums and candies that contain sugar alcohols are more expensive
than other sweets, some consumers may purchase them with funds that
otherwise would be used for preventive dental health measures.
-The agency is unconvinced by these comments. Because the claim is
already being used on many products in ways that would satisfy the
conditions for use as approved by this regulation, the agency does not
agree that the claim will cause consumers to switch from sugar-
containing products to existing products containing sugar alcohols.
Therefore, it is unlikely that this regulation will result in any
significant changes in consumer behavior. In fact, any change in
consumer behavior because of sugar alcohols most likely has already
taken place. This regulation is thus not expected to cause an increase
in gastric problems.
-The agency also does not agree that this regulation is likely to
result in a decrease in preventive dental health measures. Consumers of
sugar alcohol containing foods purchase the products either because of
their dietetic attributes or because of their role in preventive dental
health. The majority of sugar alcohol containing foods that would
qualify for the health claim currently have sugar-free claims which are
required to be accompanied by a statement that the product is not a
low-calorie food. Therefore, it is unlikely that these products are
being consumed by calorie-conscious individuals.
-The health claim should have no impact on the purchases of
consumers who consume these products for the dietetic properties
because neither sugary foods nor preventive dental health measures are
substitutes for dietetic foods. The agency is aware of no evidence that
sugar alcohol containing foods and preventive dental health measures
are substitutes for dentally concerned consumers. In fact, it is more
likely that these consumers view the two categories as complementary
products working together as a part of a dental health regime. It is
likely that the cross elasticity of demand, a numerical measure of the
connection between two goods, for sugar alcohol containing foods and
preventive dental health measures is either not significantly different
from zero, or negative. In other words, the two product categories are
either not close substitutes or are complementary products. Therefore,
the agency rejects the assertion that the use of preventive dental
health measures will decline as a result of this rule.
-Although the benefits of this rule are minimal, the costs of this
regulation are also anticipated to be small. FDA is aware that some
firms are already using similar claims on product labels. It is likely
that most of these claims satisfy the criteria described in this
rulemaking. However, because FDA is requiring er claims for larger
package sizes, some product labels may need to be revised. To the
extent that labels need revision, this final rule will impose costs. On
average, the administrative, redesign, and inventory disposal costs of
revising a label for the affected product categories within a six month
compliance period are between $800 and $1525 per label depending on the
location of the claim. Because FDA does not know the number of sugar
alcohol claims currently being made nor the proportion of existing
claims that do not meet FDA's criteria, the agency cannot estimate the
total costs of this regulation.
-The Regulatory Flexibility Act as amended requires analyzing
options for regulatory relief for small businesses. According to the
information currently available to the agency, of the relatively small
number of products that would require relabeling as a result of this
final rule, none are produced by small firms. Therefore, the agency
certifies that this rule will not have a significant impact on a
substantial number of small businesses.
-VI. Paperwork Reduction Act
-This final rule contains no information collection or
recordkeeping requirements under the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.).
-VII. References
-The following references have been placed on display in the
Dockets Management Branch (address above) and may be seen by interested
persons between 9 a. m. and 4 p. m., Monday through Friday.
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21 C.F.R. section 105.66(f),'' Docket No. 91N-384L, Dockets
Management Branch, FDA, Rockville, MD.
-3. Saltsman, Joyce J., CFSAN, FDA, Letter to Melvin S. Drozen,
September 15, 1994.
-4. Saltsman, Joyce J., CFSAN, FDA, Letter to Melvin S. Drozen,
October 7, 1994.
-5. Drozen, Melvin S., Letter to FDA, November 15, 1994.
-6. Saltsman, Joyce J., CFSAN, FDA, Memorandum of telephone
conversation, December 8, 1994.
[[Page 43444]]
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synthesis by S. mutans and change of enamel hardness,'' Nihon
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Brown, D. A. M. Geddes, and A. F. Hall, ``The effect of chewing gum
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sweeteners,'' Journal of Dental Research, 64:1130-1133, 1985.
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G. Frostell, ``Acid production from sorbitol in human dental
plaque,'' Archives of Oral Biology, 23:971-975, 1978.
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carbohydrate products,'' Acta Odontologica Scandanavia, 27:3-29,
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a nonsugar licorice and different sugar substitutes in Streptococcus
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[[Page 43445]]
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67:680-688, 1979.
-88. Koulourides, T., R. Bodden, S. Keller, L. Manson-Hing, J.
Lastra, and T. Housch, ``Cariogenicity of nine sugars tested with an
intraoral device in man,'' Caries Research 10:427-441, 1976.
-89. Baer, A., ``Significance and promotion of sugar
substitution for the prevention of dental caries,'' Lben.-Wiss U.
Technology, Academic Press, 22:46-53, 1989.
-90. LSRO, FASEB, ``Health Aspect of Sugar Alcohols and
Lactose,'' Bethesda, MD, September, 1986.
-91. Joint FAO/WHO Expert Committee on Food Additives,
``Evaluation of Certain Food Additives and Contaminants,'' Geneva,
Switzerland, pp. 16-17, 1993.
-92. Kashket, S., J. van Houte, L. R. Lopez, and S. Stocks,
``Lack of correlation between food retention on the human dentition
and consumer perception of food stickiness,'' Journal of Dental
Research, 70:1314-1319, 1991.
-93. S. Kashket, J. Zhang, and J. van Houte, ``Accumulation of
fermentable sugars and metabolic acids in food particles that become
entrapped on the dentition,'' unpublished manuscript.
-94. Glinsmann, W. H., H. Irausquin, and Y. K. Park, ``Report
from FDA's Sugars Task Force, 1986--Evaluation of health aspects of
sugars contained in carbohydrate sweeteners,'' Journal of Nutrition,
116(11S):S1-S9, S39-S43, 1986.
-95. Birkhed, D., and A. Bar, ``Sorbitol and dental caries,''
World Review of Nutrition and Dietetics, 65:1-37, 1991.
-96. Birkhed, D., S. Kalfas, G. Svensater, and S. Edwardsson,
``Microbiological aspects of some caloric sugar substitutes,''
International Dental Journal, 35:9-17, 1985.
-97. Linke, H., ``Sweeteners and dental health: the influence of
sugar substitutes on oral microorganisms,'' in Developments in
Sweeteners, vol. 3, edited by T. H. Grenby, Elsevier Applied
Science, New York, pp. 151-188, 1987.
-98. Triller, M., ``Sugars, sweeteners, and dental caries
prevention,'' in Sugarless--the Way Forward, edited by A. J. Rugg-
Gunn, Elsevier Applied Science, New York, pp. 70-84, 1990.
-99. Scheinin, A., and E. Soderling, ``Carbohydrate sweeteners
and dental caries,'' Proceedings of the Finnish Dental Society,
82:276-289, 1986.
-100. Select Committee on Nutrition and Human Needs, ``Dietary
Goals for the United States,'' 2d ed., U.S. Government Printing
Office, pp. 27-34, 1977.
-101. USDA and DHHS, ``Nutrition and Your Health: Dietary
Guidelines for Americans,'' Home and Garden Bulletin No. 232, U.S.
Government Printing Office, 4th ed., 1995.
-102. Hogg, S. D., and A. J. Rugg-Gunn, ``Can the oral flora
adapt to sorbitol?,'' Journal of Dentistry, 19:263-271, 1991. -
List of Subjects in 21 CFR Part 101
Food labeling, Incorporation by reference, Nutrition, Reporting
and recordkeeping requirements.
Therefore, under the Federal Food, Drug, and Cosmetic Act and
under authority delegated to the Commissioner of Food and Drugs, 21 CFR
part 101 is amended as follows:
[[Page 43446]]
PART 101--FOOD LABELING
1. The authority citation for 21 CFR part 101 is revised to read
as follows:
Authority: Secs. 4, 5, 6 of the Fair Packaging and Labeling Act
(15 U.S.C. 1453, 1454, 1455); secs. 201, 301, 402, 403, 409, 701 of
the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321, 331, 342,
343, 348, 371).
2. New Sec. 101.80 is added to subpart E to read as follows:
Sec. 101.80 Health claims: dietary sugar alcohols and dental caries.
(a) Relationship between dietary carbohydrates and dental caries.
(1) Dental caries, or tooth decay, is a disease caused by many factors.
Both environmental and genetic factors can affect the development of
dental caries. Risk factors include tooth enamel crystal structure and
mineral content, plaque quantity and quality, saliva quantity and
quality, individual immune response, types and physical characteristics
of foods consumed, eating behaviors, presence of acid producing oral
bacteria, and cultural influences.
-(2) The relationship between consumption of fermentable
carbohydrates, i.e., dietary sugars and starches, and tooth decay is
well established. Sucrose, also known as sugar, is one of the most, but
not the only, cariogenic sugars in the diet. Bacteria found in the
mouth are able to metabolize most dietary carbohydrates, producing acid
and forming dental plaque. The more frequent and longer the exposure of
teeth to dietary sugars and starches, the greater the risk for tooth
decay.
-(3) Dental caries continues to affect a large proportion of
Americans. Although there has been a decline in the prevalence of
dental caries among children in the United States, the disease remains
widespread throughout the population, imposing a substantial burden on
Americans. Recent Federal government dietary guidelines recommend that
Americans choose diets that are moderate in sugars and avoid excessive
snacking. Frequent between-meal snacks that are high in sugars and
starches may be more harmful to teeth than eating such foods at meals
and then brushing.-
(4) Sugar alcohols can be used as sweeteners to replace dietary
sugars, such as sucrose and corn sweeteners, in foods such as chewing
gums and certain confectioneries. Dietary sugar alcohols are
significantly less cariogenic than dietary sugars and other fermentable
carbohydrates.
(b) Significance of the relationship between sugar alcohols and
dental caries. Sugar alcohols do not promote dental caries. Sugar
alcohols are slowly metabolized by bacteria to form some acid. The rate
and amount of acid production is significantly less than that from
sucrose and other fermentable carbohydrates and does not cause the loss
of important minerals from tooth enamel.
(c) Requirements. (1) All requirements set forth in Sec. 101.14
shall be met, except that sugar alcohol-containing foods are exempt
from section Sec. 101.14(e)(6).
(2) Specific requirements. (i) Nature of the claim. A health claim
relating sugar alcohols, compared to other carbohydrates, and the
nonpromotion of dental caries may be made on the label or labeling of a
food described in (c)(2)(ii) of this section, provided that:
-(A) The claim shall state that frequent between-meal consumption
of foods high in sugars and starches can promote tooth decay.
-(B) The claim shall state that the sugar alcohol present in the
food ``does not promote,'' ``may reduce the risk of,'' ``useful [or is
useful] in not promoting,'' or ``expressly [or is expressly] for not
promoting'' dental caries;
-(C) In specifying the nutrient, the claim shall state ``sugar
alcohol,'' ``sugar alcohols,'' or the name or names of the sugar
alcohols, e.g., ``sorbitol.''
-(D) In specifying the disease, the claim uses the following terms:
``dental caries'' or ``tooth decay.''
(E) The claim shall not attribute any degree of the reduction in
risk of dental caries to the use of the sugar alcohol-containing food.
-(F) The claim shall not imply that consuming sugar alcohol-
containing foods is the only recognized means of achieving a reduced
risk of dental caries.
-(G) Packages with less than 15 square inches of surface area
available for labeling are exempt from paragraphs (A) and (C) of this
section.
(ii) Nature of the food. (A) The food shall meet the requirement
in Sec. 101.60(c)(1)(i) with respect to sugars content.
(B) The sugar alcohol in the food shall be xylitol, sorbitol,
mannitol, maltitol, isomalt, lactitol, hydrogenated starch
hydrolysates, hydrogenated glucose syrups, or a combination of these.
(C) When fermentable carbohydrates are present in the sugar
alcohol-containing food, the food shall not lower plaque pH below 5.7
by bacterial fermentation either during consumption or up to 30 minutes
after consumption, as measured by the indwelling plaque pH test found
in ``Identification of Low Caries Risk Dietary Components,'' T. N.
Imfeld, Volume 11, Monographs in Oral Science, 1983, which is
incorporated by reference in accordance with 5 U.S.C. 552(a) and 1 CFR
part 51. Copies may be obtained from Karger AG Publishing Co., P. O.
Box, Ch-4009 Basel, Switzerland, or may be examined at the Center for
Food Safey and Applied Nutrition's Library, 200 C St. SW., rm. 3321,
Washington, DC, or at the Office of the Federal Register, 800 North
Capitol St. NW., suite 700, Washington, DC.
(d) Optional information. (1) The claim may include information
from paragraphs (a) and (b) of this section, which describe the
relationship between diets containing sugar alcohols and dental caries.
(2) The claim may indicate that development of dental caries
depends on many factors and may identify one or more of the following
risk factors for dental caries: Frequent consumption of fermentable
carbohydrates, such as dietary sugars and starches; presence of oral
bacteria capable of fermenting carbohydrates; length of time
fermentable carbohydrates are in contact with the teeth; lack of
exposure to fluoride; individual susceptibility; socioeconomic and
cultural factors; and characteristics of tooth enamel, saliva, and
plaque.
[[Page 43447]]
-(3) The claim may indicate that oral hygiene and proper dental
care may help to reduce the risk of dental disease.
-(4) The claim may indicate that the sugar alcohol serves as a
sweetener.
(e) Model health claim. The following model health claims may be
used in food labeling to describe the relationship between sugar
alcohol-containing foods and dental caries.
-(1) Example of the full claim:
-(i) Frequent eating of foods high in sugars and starches as
between-meal snacks can promote tooth decay. The sugar alcohol [name,
optional] used to sweeten this food may reduce the risk of dental
caries.
-(ii) Frequent between-meal consumption of foods high in sugars and
starches promotes tooth decay. The sugar alcohols in [name of food] do
not promote tooth decay.-
-(2) Example of the shortened claim for small packages:
-(i) Does not promote tooth decay.
-(ii) May reduce the risk of tooth decay.
Dated: August 16, 1996.
William K. Hubbard,
Associate Commissioner for Policy Coordination.
[FR Doc. 96-21481 Filed 8-20-96; 8:53 am]
BILLING CODE 4160-01-F
Complete official Federal Register PDF
FR Doc. 96-21471 Blocked Persons, Specially Designated Nationals, Specially Designated Terrorists, Specially Designated Narcotics Traffickers, and Blocked Vessels; Correction and Removal of Entry
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Page 43459]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21471]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Chapter V
Blocked Persons, Specially Designated Nationals, Specially
Designated Terrorists, Specially Designated Narcotics Traffickers, and
Blocked Vessels; Correction and Removal of Entry
AGENCY: Office of Foreign Assets Control, Treasury.
ACTION: Correction and amendment of final rule.
-----------------------------------------------------------------------
SUMMARY: On June 26, 1996, the Office of Foreign Assets Control
published a final rule to create three new appendices to 31 CFR chapter
V that contain lists of individuals and entities determined to be
blocked persons, specially designated nationals, specially designated
terrorists, specially designated narcotics traffickers, and blocked
vessels. This document corrects a typographical error in that rule, and
removes the entries for an entity no longer deemed to be a specially
designated national of North Korea.
EFFECTIVE DATE: August 23, 1996.
FOR FURTHER INFORMATION CONTACT: Office of Foreign Assets Control,
Department of the Treasury, Washington, D.C. 20220, Tel.:202/622-2520.
SUPPLEMENTARY INFORMATION:
Electronic and Facsimile Availability
This document is available as an electronic file on The Federal
Bulletin Board the day of publication in the Federal Register. By
modem, dial 202/512-1387 and type ``/GO FAC,'' or call 202/512-1530 for
disk or paper copies. This file is available for downloading without
charge in WordPerfect 5.1, ASCII, and Adobe AcrobatTM readable
(*.PDF) formats. For Internet access, the address for use with the
World Wide Web (Home Page), Telnet, or FTP protocol is:
fedbbs.access.gpo.gov. The document is also accessible for downloading
in ASCII format without charge from Treasury's Electronic Library
(``TEL'') in the ``Business, Trade and Labor Mall'' of the FedWorld
bulletin board. By modem, dial 703/321-3339, and select the appropriate
self-expanding file in TEL. For Internet access, use one of the
following protocols: Telnet = fedworld.gov (192.239.93.3); World Wide
Web (Home Page) = http://www.fedworld.gov; FTP = ftp.fedworld.gov
(192.239.92.205). Additional information concerning the programs of the
Office of Foreign Assets Control is available for downloading from the
Office's Internet Home Page: http:/www.ustreas.gov/treasury/services/
fac/fac.html, or in fax form through the Office's 24-hour fax-on-demand
service: call 202/622-0077 using a fax machine, fax modem, or touch
tone telephone.
Background
The three appendices appearing at the end of chapter V, 31 CFR,
containing the names of individuals and entities determined by the
Director, Office of Foreign Assets Control, to be blocked persons,
specially designated nationals, specially designated terrorists,
specially designated narcotics traffickers, and blocked vessels,
consolidate existing lists previously issued under the various economic
sanctions programs administered by the Office of Foreign Assets
Control. (61 FR 32936, June 26, 1996) This rule is being issued to
correct a typographical error to the ``Cedula No.'' (the Colombian
equivalent to a social security number) contained in the identifying
information in Appendices A and B for a designated narcotics
trafficker, ``VILLEGAS ARIAS, Maria Deisy.'' Cedula No. ``31200371'' is
corrected to read ``31200871.'' This rule is also being issued to
remove the entry ``National General Insurance Company Ltd.'' from
Appendices A and B, since the Office of Foreign Assets Control has
determined that this entity is no longer a specially designated
national of North Korea. Accordingly, all transactions by persons
subject to the jurisdiction of the United States in which National
General Insurance Company Ltd. has an interest are authorized.
Since the Regulations involve a foreign affairs function, the
provisions of Executive Order 12866 and the Administrative Procedure
Act (5 U.S.C. 553), requiring notice of proposed rulemaking,
opportunity for public participation, and delay in effective date, are
inapplicable. Because no notice of proposed rulemaking is required for
this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not
apply. Wherever possible, however, it is the practice of the Office of
Foreign Assets Control to receive written submissions or hold informal
consultations with interested parties concerning any rule or other
public document.
For the reasons set forth in the preamble, and under the authority
of 50 U.S.C. 1701-1706; 50 U.S.C. 1601-1641; 3 U.S.C. 301; E.O. 12978,
60 FR 54579 (October 24, 1995), with respect to the SDNT entries, and
50 U.S.C. App. 1-44; E.O. 9193, 7 FR 5205, 3 CFR, 1938-1943 Comp., p.
1174; E.O. 9989, 13 FR 4891, 3 CFR, 1943-1948 Comp., p. 748, with
respect to the North Korean entries; Appendices A and B to Chapter V of
31 CFR are amended as set forth below:
1. Appendix A to Chapter V of 31 CFR is amended by correcting the
Cedula No. ``31200371'' under the name ``VILLEGAS ARIAS, Maria Deisy,''
to read ``31200871'' and removing the entry ``National General
Insurance Co. Ltd.''.
2. Appendix B to chapter V of 31 CFR is amended by under the
heading ``Colombia,'' correcting the Cedula No. ``31200371'' under the
name ``VILLEGAS ARIAS, Maria Deisy,'' to read ``31200871'' and under
the heading ``United Arab Emirates,'' removing the entry ``National
General Insurance Co. Ltd.''.
Dated: August 8, 1996.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
Approved: August 9, 1996.
James E. Johnson,
Assistant Secretary (Enforcement).
[FR Doc. 96-21471 Filed 8-22-96; 8:45 am]
BILLING CODE 4810-25-F
Complete official Federal Register PDF
FR Doc. 96-21469 Regulations Governing Book-Entry Treasury Bonds, Notes and Bills
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43626-43636]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21469]
[[Page 43625]]
_______________________________________________________________________
Part III
Department of the Treasury
_______________________________________________________________________
Fiscal Service
_______________________________________________________________________
31 CFR Part 306, et al.
Regulations Governing Book-Entry Treasury Bonds, Notes and Bills;
Conforming Book-Entry Changes; Final Rules
Federal Register / Vol. 61, No. 165 / Friday, August 23, 1996 / Rules
and Regulations
[[Page 43626]]
DEPARTMENT OF THE TREASURY
Fiscal Service
31 CFR Part 357
[Department of the Treasury Circular, Public Debt Series, No. 2-86]
Regulations Governing Book-Entry Treasury Bonds, Notes and Bills
AGENCY: Bureau of the Public Debt, Fiscal Service, Treasury.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of the Treasury is publishing a final rule
that, on and after the effective date, will govern Treasury bonds,
notes, and bills (Treasury securities) in book-entry form held in the
commercial book-entry system. The rule incorporates recent and
significant changes in commercial law addressing the holdings of
securities in book-entry form through financial intermediaries. The
rule replaces existing Treasury regulations that contain outdated legal
concepts.
EFFECTIVE DATE: January 1, 1997. The incorporation by reference of
certain publications listed in the regulations is approved by the
Director of the Federal Register as of January 1, 1997.
FOR FURTHER INFORMATION CONTACT: Walter T. Eccard, Chief Counsel (202)
219-3320, or Cynthia E. Reese, Deputy Chief Counsel, (202) 219-3320.
Copies of the final rule are being made available for downloading from
the Bureau of the Public Debt home page at the following address:
http:\\www.ustreas.gov/treasury/bureaus/pubdebt/pubdebt.html.
SUPPLEMENTARY INFORMATION:
I. Background
On March 4, 1996, the Department published a proposed rule that
would govern securities held in the commercial book-entry system, now
referred to as the Treasury/Reserve Automated Debt Entry System
(``TRADES''). 61 FR 8420. Eleven written comment letters were received
in response to that proposed rule. All but one of the comment letters
were very supportive of the proposed rule. Most commenters recommended
adoption of the proposed rule with various suggested clarifications.
The Department found the comments extremely useful in making the
revisions described herein. Although some minor comments are not
addressed, all comments have been considered in the formulation of this
final rule.
As indicated in the March 4 release, Treasury will include
commentary on TRADES in the Code of Federal Regulations. This
commentary can be found in Appendix B.
Comments from several persons overlapped and those comments
addressed three general areas:
(1) The scope of federal preemption and related issues involving
state variations on Revised Article 8 of the UCC as well as Treasury
procedures and notice regarding acceptance of state enactments of
Revised Article 8;
(2) Coordination as to timeframes and notices to facilitate
revision and issuance of parallel rules for book-entry securities of
Government Sponsored Enterprises (GSEs) to conform to the final TRADES
rule; and
(3) The need for further explanation and clarification, especially
the inclusion of hypotheticals, to illustrate how TRADES will apply to
a variety of transaction scenarios of varying complexity, including the
application of the federal law to transactions involving clearing
banks.
II. General Comment Discussion
In the March 4 proposal, Treasury set forth its conclusion that,
because of the size and importance of the Treasury market, uniformity
of treatment of holders of interests in Treasury securities was
essential. In addition, Treasury set forth in some detail the reasons
it had concluded that Revised Article 8 was an appropriate vehicle to
use to obtain that uniformity. As of March 4, 13 states had adopted
Revised Article 8. As of the date of this release 28 states 1 have
adopted Revised Article 8 and it has been introduced in 4 additional
states and the District of Columbia.2 This remarkable progress
reflects strong support for the legal concepts set forth in Revised
Article 8 and supports Treasury's decision to base TRADES on Revised
Article 8, which is incorporated by reference in this final rule.
---------------------------------------------------------------------------
\1\ Alabama, Alaska, Arizona, Arkansas, Colorado, Idaho, Iowa,
Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland,
Massachusetts, Minnesota, Mississippi, Nebraska, New Mexico,
Oklahoma, Oregon, Pennsylvania, Texas, Utah, Vermont, Virginia,
Washington, West Virginia, Wyoming.
\2\ California, District of Columbia, Hawaii, New York, Ohio.
---------------------------------------------------------------------------
In the March 4 release, Treasury proposed achieving uniformity for
Treasury securities in two ways. First, Section 357.10(a) established a
rule of Federal preemption in describing the rights and obligations of
Treasury and the Federal Reserve Banks. Second, TRADES established a
choice of law rule that mandated use of Revised Article 8 in the event
the state determined by the application of the choice of law rule had
not adopted Revised Article 8.
Commenters generally supported Treasury's conclusion that
uniformity was important for the market and investors in Treasury
securities. In addition commenters were supportive of the use of
Revised Article 8 to achieve this uniformity. Three different
questions, however, were raised about the manner in which Treasury
achieved uniformity and used Revised Article 8.
A. Federal Preemption
First, 5 commenters questioned whether Secs. 357.10(c) and
357.11(d) were intended to be a complete or limited preemption of a
state's law if the state had not adopted Revised Article 8. As set
forth in the March 4 release, the preemption in TRADES is limited. See
the commentary in Appendix B. In order to clarify this issue, Treasury
has adopted language in both Secs. 357.10(c) and 357.11(d) suggested by
a commenter to make the limited nature of the preemption clearer. This
language provides that, if a state has not adopted Revised Article 8,
that state's laws shall be viewed as though that state had adopted
Revised Article 8.
Second, 4 commenters noted that while in the discussion section of
the March 4 release Treasury stated that minor variations made by a
state in adopting Revised Article 8 would not affect Treasury's
conclusion that a state had adopted Revised Article 8, the language of
the proposed rule had no similar qualification. Further, commenters
noted that while the standard in the commentary seemed appropriate,
determination of what constituted minor variations could be difficult.
In response to these comments, and in an attempt to provide certainty,
Treasury is taking the following actions. Treasury has reviewed the
form of Revised Article 8 adopted by the 28 states 3 that have
adopted Revised Article 8 as of the date of this release and has
concluded that the changes made by these states indeed are minor.
Therefore, Treasury has concluded that they all are substantially
similar to Revised Article 8. Accordingly, if either Sec. 357.10(b) or
357.11(a) directs a person to one of these 28 states, the provisions of
Secs. 357.10(c) and 357.11(d) are not applicable. In addition, as
additional states adopt Revised Article 8, Treasury will, after review
of the statute, publish in the Federal Register a notice setting forth
its conclusion as to whether Secs. 357.10(c) and 357.11(d) remain
applicable to those states.
---------------------------------------------------------------------------
\3\ See Note 1 supra.
---------------------------------------------------------------------------
[[Page 43627]]
Third, a commenter raised a question of what Treasury would do in
the event a state adopted Revised Article 8 and then subsequently
amended Revised Article 8 in a fashion that resulted in an
unsatisfactory lack of uniformity. Treasury believes such an event is
unlikely. In addition, once Treasury has announced its determination
that a state has adopted Revised Article 8, the market is entitled to
rely on that decision.4 Nonetheless, if such an unlikely event
were to occur, Treasury has the authority to take the action that would
result in Secs. 357.10(c) and 357.11(d) (or their equivalent) being
reapplied. Any such action would be published in the Federal Register.
---------------------------------------------------------------------------
\4\ One commenter noted that Article 9 is currently being
revised, which could lead to the result that a state could adopt
different Article 9 provisions than are included in the Article 8
conforming amendments. Treasury does not anticipate that such an
event would result in the need to reapply Secs. 357.10(c) and
357.11(d). If that were necessary, Treasury would take the same
action, after notice, as described herein.
---------------------------------------------------------------------------
B. Action With Respect to GSEs
Several commenters noted that market participants and practitioners
were concerned about coordination among Treasury and other GSEs that
issue book-entry securities. The assumption is that the substance of
any such regulations will be substantially identical to the Treasury
proposed rule. Treasury is working with the GSEs and their regulators
toward the goal of having the effective dates of all final book-entry
regulations timed to coincide. One commenter specifically suggested
delaying the effective date of the final TRADES rule to provide
sufficient lead time to GSE issuers. Treasury understands the market's
desire for simultaneous adoption of book-entry rules substantially
similar to TRADES for GSEs. While adoption of rules for GSEs is subject
to the control of the various GSEs and the entities that promulgate
their rules, Treasury has taken several steps to facilitate the
simultaneous adoption of parallel GSE rules. These steps have included
meetings with representatives of the GSEs and their regulators to
inform them of the actions Treasury was taking with respect to TRADES
and the timetable for adoption of TRADES. Consistent with this
supportive approach, Treasury has determined that it will, at the
request of the Federal Farm Credit Banks Funding Corporation, delay the
effectiveness of TRADES until January 1. That should permit sufficient
time for rules similar to TRADES to be in place for GSEs by the
effective date of TRADES.
C. Request for Hypotheticals
Several commenters suggested that Treasury include in the
Commentary to the final regulations various hypotheticals to illustrate
the manner in which selected transactions would be treated under the
TRADES regulations.
Initially, Treasury notes that Revised Article 8 provides numerous
hypotheticals that explain the operation of Revised Article 8. Treasury
has studied those hypotheticals carefully and believes that they are
very useful in understanding Revised Article 8. In light of those
hypotheticals, and since TRADES is based, in large measure, on Revised
Article 8, Treasury has concluded that developing hypotheticals
explaining the operation of Revised Article 8 is unnecessary. On the
other hand, TRADES does provide for an interaction of federal and state
law. Since the results in a particular factual situation could depend
on which law is applicable, Treasury has concluded that hypotheticals
that illustrate what law would apply in different situations would be
useful. Accordingly, the Commentary contains hypotheticals to explain
the interaction of federal and state law.
III. Other Comments
In addition to the general comments described above, Treasury
received a number of other comments. Many of these included technical
drafting suggestions.
One commenter noted concerns with the tiered nature of the
commercial book-entry system and indicated that investors may not be
aware of how the commercial book-entry system works. Treasury agrees
that it is important that investors understand the operation of both
the book-entry system and TRADES. The discussion in the March 4
Proposed Rule was designed to promote that understanding. In addition,
the inclusion of a commentary on TRADES in the Code of Federal
Regulations is another effort to promote an understanding of both
TRADES and the book-entry system. Furthermore, Treasury plans to
continue its investor education efforts in the coming months.
One commenter questioned the use of the term ``Security
Entitlement'' to describe the interest of a Participant in a Treasury
book-entry security. The commenter noted that the term ``Security
Entitlement'' is used in Revised Article 8 and its use in TRADES to
describe the interest of a Participant could be confusing. Treasury
considered using different terms to describe this interest but
concluded that Security Entitlement was the most useful. In order to
avoid confusion, there was language in the commentary in the March 4
release that attempted to make it clear that the term ``Security
Entitlement'' has a special meaning in TRADES. Additional language has
been added to the commentary to clarify this further. Due to Treasury's
obligation to pay a Participant (see Sec. 357.13(b)), the interest of a
Participant and a person holding in TREASURY DIRECT are, in practical
terms, the same since both the Participant and the person holding in
TREASURY DIRECT have a direct claim against the United States.
One commenter proposed adding a new defined term, ``State,'' and
made certain other drafting changes to the definitions. Those
suggestions mainly clarify the meaning intended by Treasury in the
March release and were adopted. In adopting these drafting suggestions,
Treasury concluded that a new defined term, ``Adverse Claim'' was
needed. This definition is based on the definition of that term in
Revised Article 8. By adding this term, Treasury is able to adopt the
suggestions that it delete the general incorporation reference in the
definition section that appeared in the March release. Section 357.2 is
complete and reference to other definitions is unnecessary.
One commenter found the language of Sec. 357.10(b) unclear and
proposed drafting suggestions to clarify its meaning. Section 357.10(b)
decribes the law that governs security interests granted to Federal
Reserve Banks. The Commentary, and hypotheticals included in the
commentary, explain how Sec. 357.10(b) works. In addition Treasury has
redrafted Sec. 357.10(b) in order to make its meaning clearer.
Several comments stated that Sec. 357.11(c) should be modified to
conform to the choice of law rule in Section 9-103(6)(f) of Revised
Article 8. Treasury agrees with this comment and has made changes to
Sec. 357.11(c). In particular, Treasury agrees that it is appropriate
to delete reference to priority so that, as provided in
Sec. 357.11(a)(5), the law of the Securities Intermediary's
jurisdiction governs on this issue.
Procedural Requirements
This final rule does not meet the criteria for a ``significant
regulatory action'' pursuant to Executive Order 12866.
The notice and public comment procedures requirements of the
Administrative Procedure Act are inapplicable, pursuant to 5 U.S.C.
553(a)(2).
As no notice of proposed rulemaking was required, the provisions of
the
[[Page 43628]]
Regulatory Flexibility Act (5 U.S.C. 601, et seq.) do not apply.
There are no collections of information contained in this final
rule. Therefore, the Paperwork Reduction Act does not apply.
List of Subjects in 31 CFR Part 357
Bonds, Electronic funds transfer, Federal Reserve System,
Government securities, Incorporation by reference, Securities.
For the reasons set forth in the preamble, title 31, chapter II,
subchapter B, part 357 is amended as follows:
PART 357--[AMENDED]
1. The authority citation for part 357 continues to read as
follows:
Authority: 31 U.S.C. chapter 31; 5 U.S.C. 301; 12 U.S.C. 391.
2. Sections 357.0 and 357.1 are added to read as follows:
Sec. 357.0 Dual book-entry systems.
(a) Treasury securities shall be maintained in either of the
following two book-entry systems:
(1) Treasury/Reserve Automated Debt Entry System (TRADES). A
Treasury security is maintained in TRADES if it is credited by a
Federal Reserve Bank to a Participant's Securities Account. See subpart
B of this part for rules pertaining to TRADES.
(2) TREASURY DIRECT Book-entry Securities System (TREASURY DIRECT).
A Treasury security is maintained in TREASURY DIRECT if it is credited
to a TREASURY DIRECT account as described in Sec. 357.20. Such accounts
may be accessed by investors in accordance with subpart C of this part
through any Federal Reserve Bank or the Bureau of the Public Debt. See
subpart C of this part for rules pertaining to TREASURY DIRECT.
(b) A Treasury security eligible to be maintained in TREASURY
DIRECT under the terms of its offering circular or pursuant to notice
published by the Secretary may be transferred to or from an account in
TRADES from or to an account in TREASURY DIRECT in accordance with
Sec. 357.22(a).
Sec. 357.1 Effective date.
Subpart B of this Part, the definitions of ``Adverse Claim,''
``Book-entry Security,'' ``Entitlement Holder,'' ``Federal Reserve Bank
Operating Circular,'' ``Funds Account,'' ``Issue,'' ``Participant,''
``Participant's Securities Account,'' ``Person,'' ``Revised Article
8,'' ``Securities Intermediary,'' ``Security Entitlement,'' ``State,''
and ``Transfer Message'' and revisions to the definitions of
``Security'' and ``TRADES,'' and Secs. 357.42 and 357.44 and the
revisions to Sec. 357.41 are effective January 1, 1997. All other
provisions in effect prior to January 1, 1997, remain in effect.
3. Section 357.3 is redesignated Sec. 357.2, in the definition of
``depository institution'' paragraphs (a) through (f) are redesignated
as paragraphs (1) through (6), the definition of ``security interest
and pledge'' is removed, the definitions of ``Security'' and ``TRADES''
are revised, and the remaining definitions are added in alphabetical
order as follows:
Sec. 357.2 Definitions.
* * * * *
Adverse Claim means a claim that a claimant has a property interest
in a Security and that it is a violation of the rights of the claimant
for another Person to hold, transfer, or deal with the Security.
* * * * *
Book-entry Security means, in subpart B of this part, a Treasury
Security maintained in TRADES and, in subpart C of this part, a
Treasury Security maintained in TREASURY DIRECT.
* * * * *
Entitlement Holder means a Person to whose account an interest in a
Book-entry Security is credited on the records of a Securities
Intermediary.
* * * * *
Federal Reserve Bank Operating Circular means the publication
issued by each Federal Reserve Bank that sets forth the terms and
conditions under which the Reserve Bank maintains Book-entry Securities
accounts and transfers Book-entry Securities.
* * * * *
Funds Account means a reserve and/or clearing account at a Federal
Reserve Bank to which debits or credits are posted for transfers
against payment, book-entry securities transaction fees, or principal
and interest payments.
* * * * *
Issue means a group of securities, as defined in this section, that
is identified by the same CUSIP (Committee on Uniform Securities
Identification Practices) number.
* * * * *
Participant means a Person that maintains a Participant's
Securities Account with a Federal Reserve Bank.
Participant's Securities Account means an account in the name of a
Participant at a Federal Reserve Bank to which Book-entry Securities
held for a Participant are or may be credited.
Person means and includes an individual, corporation, company,
governmental entity, association, firm, partnership, trust, estate,
representative and any other similar organization, but does not mean or
include the United States or a Federal Reserve Bank.
* * * * *
Revised Article 8 means Uniform Commercial Code, Revised Article 8,
Investment Securities (with Conforming and Miscellaneous Amendments to
Articles 1, 3, 4, 5, 9, and 10) 1994 Official Text. Revised Article 8
of the Uniform Commercial Code is incorporated by reference in this
Part pursuant to 5 U.S.C. 552(a) and 1 CFR part 51. Article 8 was
adopted by the American Law Institute and the National Conference of
Commissioners On Uniform State Laws and approved by the American Bar
Association on February 14, 1995. Copies of this publication are
available from the Executive Office of the American Law Institute, 4025
Chestnut Street, Philadelphia, PA 19104, and the National Conference of
Commissioners on Uniform State Laws, 676 North St. Clair Street, Suite
1700, Chicago, IL 60611. Copies are also available for public
inspection at the Department of the Treasury Library, Room 5030, Main
Treasury Building, 1500 Pennsylvania Avenue, NW., Washington DC 20220,
and at the Office of the Federal Register, 800 North Capitol Street,
NW., Suite 700, Washington DC.
Securities Intermediary means:
(1) A Person that is registered as a ``clearing agency'' under the
federal securities laws; a Federal Reserve Bank; any other person that
provides clearance or settlement services with respect to a Book-entry
Security that would require it to register as a clearing agency under
the federal securities laws but for an exclusion or exemption from the
registration requirement, if its activities as a clearing corporation,
including promulgation of rules, are subject to regulation by a federal
or state governmental authority; or
(2) A Person (other than an individual, unless such individual is
registered as a broker or dealer under the federal securities laws)
including a bank or broker, that in the ordinary course of its business
maintains securities accounts for others and is acting in that
capacity.
Security means a bill, note, or bond, each as defined in this
section. It also means any other obligation issued by the Department
that, by the terms of the applicable offering circular or announcement,
is made subject to this part. Solely for purposes of this part, it also
means:
(1) The interest and principal components of a security eligible
for
[[Page 43629]]
Separate Trading of Registered Interest and Principal of Securities
(``STRIPS''), if such security has been divided into such components as
authorized by the express terms of the offering circular under which
the security was issued and the components are maintained separately on
the books of one or more Federal Reserve Banks; and
(2) The interest coupons that have been converted to book-entry
form under the Treasury's Coupons Under Book-Entry Safekeeping Program
(``CUBES''), pursuant to agreement and the regulations in 31 CFR part
358.
Security Entitlement means the rights and property interest of an
Entitlement Holder with respect to a Book-entry Security.
* * * * *
State means any State of the United States, the District of
Columbia, Puerto Rico, the Virgin Islands, or any other territory or
possession of the United States.
* * * * *
TRADES is the Treasury/Reserve Automated Debt Entry System, also
referred to as the commercial book-entry system.
* * * * *
Transfer Message means an instruction of a Participant to a Federal
Reserve Bank to effect a transfer of a Book-entry Security maintained
in TRADES, as set forth in Federal Reserve Bank Operating Circulars.
* * * * *
4. Subpart B, consisting of Secs. 357.10 through 357.14, is added
to read as follows:
Subpart B--Treasury/Reserve Automated Debt Entry System (TRADES)
Sec. 357.10 Law governing rights and obligations of United States
and Federal Reserve Banks; rights of any Person against United
States and Federal Reserve Banks.
Sec. 357.11 Law governing other interests.
Sec. 357.12 Creation of ``Participant's Security Entitlement;
security interests.
Sec. 357.13 Obligations of United States; no Adverse Claims.
Sec. 357.14 Authority of Federal Reserve Banks.
Subpart B--Treasury/Reserve Automated Debt Entry System (TRADES)
Sec. 357.10 Law governing rights and obligations of United States and
Federal Reserve Banks; rights of any Person against United States and
Federal Reserve Banks.
(a) Except as provided in paragraph (b) of this section, the rights
and obligations of the United States and the Federal Reserve Banks with
respect to: A Book-entry Security or Security Entitlement and the
operation of the Treasury book-entry system; and the rights of any
Person, including a Participant, against the United States and the
Federal Reserve Banks with respect to: A Book-entry Security or
Security Entitlement and the operation of the Treasury book-entry
system; are governed solely by Treasury regulations, including the
regulations of this Part, the applicable offering circular (which is 31
CFR part 356, in the case of securities issued on and after March 1,
1993), the announcement of the offering, and Federal Reserve Bank
Operating Circulars.
(b) A security interest in a Security Entitlement that is in favor
of Federal Reserve Bank from a Participant and that is not recorded on
the books of a Federal Reserve Bank pursuant to Sec. 357.12(c)(1), is
governed by the law (not including the conflict-of-law rules) of the
jurisdiction where the head office of the Federal Reserve Bank
maintaining the Participant's Securities Account is located. A security
interest in a Security Entitlement that is in favor of a Federal
Reserve Bank from a Person that is not a Participant, and that is not
recorded on the books of a Federal Reserve Bank pursuant to
Sec. 357.12(c)(1), is governed by the law determined in the manner
specified in Sec. 357.11.
(c) If the jurisdiction specified in the first sentence of
paragraph (b) of this section is a State that has not adopted Revised
Article 8 (incorporated by reference, see Sec. 357.2) then the law
specified in paragraph (b) of this section shall be the law of that
State as though Revised Article 8 had been adopted by that State.
Sec. 357.11 Law governing other interests.
(a) To the extent not inconsistent with these regulations, the law
(not including the conflict-of-law rules) of a Securities
Intermediary's jurisdiction governs:
(1) The acquisition of a Security Entitlement from the Securities
Intermediary;
(2) The rights and duties of the Securities Intermediary and
Entitlement Holder arising out of a Security Entitlement;
(3) Whether the Securities Intermediary owes any duties to an
adverse claimant to a Security Entitlement;
(4) Whether an Adverse Claim can be asserted against a Person who
acquires a Security Entitlement from the Securities Intermediary or a
Person who purchases a Security Entitlement or interest therein from an
Entitlement Holder; and
(5) Except as otherwise provided in paragraph (c) of this section,
the perfection, effect of perfection or non-perfection and priority of
a security interest in a Security Entitlement.
(b) The following rules determine a ``Securities Intermediary's
jurisdiction'' for purposes of this section:
(1) If an agreement between the Securities Intermediary and its
Entitlement Holder specifies that it is governed by the law of a
particular jurisdiction, that jurisdiction is the Securities
Intermediary's jurisdiction.
(2) If an agreement between the Securities Intermediary and its
Entitlement Holder does not specify the governing law as provided in
paragraph (b)(1) of this section, but expressly specifies that the
securities account is maintained at an office in a particular
jurisdiction, that jurisdiction is the Securities Intermediary's
jurisdiction.
(3) If an agreement between the Securities Intermediary and its
Entitlement Holder does not specify a jurisdiction as provided in
paragraph (b)(1) or (b)(2) of this section, the Securities
Intermediary's jurisdiction is the jurisdiction in which is located the
office identified in an account statement as the office serving the
Entitlement Holder's account.
(4) If an agreement between the Securities Intermediary and its
Entitlement Holder does not specify a jurisdiction as provided in
paragraph (b)(1) or (b)(2) of this section and an account statement
does not identify an office serving the Entitlement Holder's account as
provided in paragraph (b)(3) of this section, the Securities
Intermediary's jurisdiction is the jurisdiction in which is located the
chief executive office of the Securities Intermediary.
(c) Notwithstanding the general rule in paragraph (a)(5) of this
section, the law (but not the conflict-of-law rules) of the
jurisdiction in which the Person creating a security interest is
located governs whether and how the security interest may be perfected
automatically or by filing a financing statement.
(d) If the jurisdiction specified in paragraph (b) of this section
is a State that has not adopted Revised Article 8 (incorporated by
reference, see Sec. 357.2), then the law for the matters specified in
paragraph (a) of this section shall be the law of that State as though
Revised Article 8 had been adopted by that State. For purposes of the
application of the matters specified in paragraph (a) of this section,
the Federal Reserve Bank maintaining the Securities Account is a
clearing corporation, and the
[[Page 43630]]
Participant's interest in a Book-entry Security is a Security
Entitlement.
Sec. 357.12 Creation of Participant's Security Entitlement; security
interests.
(a) A Participant's Security Entitlement is created when a Federal
Reserve Bank indicates by book entry that a Book-entry Security has
been credited to a Participant's Securities Account.
(b) A security interest in a Security Entitlement of a Participant
in favor of the United States to secure deposits of public money,
including without limitation deposits to the Treasury tax and loan
accounts, or other security interest in favor of the United States that
is required by Federal statute, regulation, or agreement, and that is
marked on the books of a Federal Reserve Bank is thereby effected and
perfected, and has priority over any other interest in the securities.
Where a security interest in favor of the United States in a Security
Entitlement of a Participant is marked on the books of a Federal
Reserve Bank, such Reserve Bank may rely, and is protected in relying,
exclusively on the order of an authorized representative of the United
States directing the transfer of the security. For purposes of this
paragraph, an ``authorized representative of the United States'' is the
official designated in the applicable regulations or agreement to which
a Federal Reserve Bank is a party, governing the security interest.
(c) (1) The United States and the Federal Reserve Banks have no
obligation to agree to act on behalf of any Person or to recognize the
interest of any transferee of a security interest or other limited
interest in favor of any Person except to the extent of any specific
requirement of Federal law or regulation or to the extent set forth in
any specific agreement with the Federal Reserve Bank on whose books the
interest of the Participant is recorded. To the extent required by such
law or regulation or set forth in an agreement with a Federal Reserve
Bank, or the Federal Reserve Bank Operating Circular, a security
interest in a Security Entitlement that is in favor of a Federal
Reserve Bank or a Person may be created and perfected by a Federal
Reserve Bank marking its books to record the security interest. Except
as provided in paragraph (b) of this section, a security interest in a
Security Entitlement marked on the books of a Federal Reserve Bank
shall have priority over any other interest in the securities.
(2) In addition to the method provided in paragraph (c)(1) of this
section, a security interest, including a security interest in favor of
a Federal Reserve Bank, may be perfected by any method by which a
security interest may be perfected under applicable law as described in
Sec. 357.10(b) or Sec. 357.11. The perfection, effect of perfection or
non-perfection and priority of a security interest are governed by that
applicable law. A security interest in favor of a Federal Reserve Bank
shall be treated as a security interest in favor of a clearing
corporation in all respects under that law, including with respect to
the effect of perfection and priority of the security interest. A
Federal Reserve Bank Operating Circular shall be treated as a rule
adopted by a clearing corporation for such purposes.
Sec. 357.13 Obligations of the United States; no Adverse Claims.
(a) Except in the case of a security interest in favor of the
United States or a Federal Reserve Bank or otherwise as provided in
Sec. 357.12(c)(1), for the purposes of this subpart B, the United
States and the Federal Reserve Banks shall treat the Participant to
whose Securities Account an interest in a Book-entry Security has been
credited as the person exclusively entitled to issue a Transfer
Message, to receive interest and other payments with respect thereof
and otherwise to exercise all the rights and powers with respect to the
Security, notwithstanding any information or notice to the contrary.
Neither the Federal Reserve Banks nor Treasury is liable to a Person
asserting or having an Adverse Claim to a Security Entitlement or to a
Book-entry Security in a Participant's Securities Account, including
any such claim arising as a result of the transfer or disposition of a
Book-entry Security by a Federal Reserve Bank pursuant to a Transfer
Message that the Federal Reserve Bank reasonably believes to be
genuine.
(b) The obligation of the United States to make payments of
interest and principal with respect to Book-entry Securities is
discharged at the time payment in the appropriate amount is made as
follows:
(1) Interest on Book-entry Securities is either credited by a
Federal Reserve Bank to a Funds Account maintained at the Bank or
otherwise paid as directed by the Participant.
(2) Book-entry Securities are redeemed in accordance with their
terms by a Federal Reserve Bank withdrawing the securities from the
Participant's Securities Account in which they are maintained and by
either crediting the amount of the redemption proceeds, including both
principal and interest, where applicable, to a Funds Account at the
Bank or otherwise paying such principal and interest as directed by the
Participant. No action by the Participant is required in connection
with the redemption of a Book-entry Security.
Sec. 357.14 Authority of Federal Reserve Banks.
(a) Each Federal Reserve Bank is hereby authorized as fiscal agent
of the United States to perform functions with respect to the issuance
of Book-entry Securities offered and sold by the Department to which
this Subpart applies, in accordance with the terms of the applicable
offering circular and with procedures established by the Department; to
service and maintain Book-entry Securities in accounts established for
such purposes; to make payments of principal and interest, as directed
by the Department; to effect transfer of Book-entry Securities between
Participants' Securities Accounts as directed by the Participants; and
to perform such other duties as fiscal agent as may be requested by the
Department.
(b) Each Federal Reserve Bank may issue Operating Circulars not
inconsistent with this Part, governing the details of its handling of
Book-entry Securities, Security Entitlements, and the operation of the
book-entry system under this Part.
5. In subpart D, Sec. 357.41 is revised and the text of
Secs. 357.42 and 357.44 are added, to read as follows:
Subpart D--Additional Provisions
Sec. 357.41 Waiver of regulations.
The Secretary reserves the right, in the Secretary's discretion, to
waive any provision(s) of these regulations in any case or class of
cases for the convenience of the United States or in order to relieve
any person(s) of unnecessary hardship, if such action is not
inconsistent with law, does not adversely affect any substantial
existing rights, and the Secretary is satisfied that such action will
not subject the United States to any substantial expense or liability.
Sec. 357.42 Liability of Department and Federal Reserve Banks.
The Department and the Federal Reserve Banks may rely on the
information provided in a tender, transaction request form, or Transfer
Message, and are not required to verify the information. The Department
and the Federal Reserve Banks shall not be liable for any action taken
in accordance with the information set out in a tender, transaction
request form, or Transfer
[[Page 43631]]
Message, or evidence submitted in support thereof.
Sec. 357.44 Notice of attachment for securities in TRADES.
The interest of a debtor in a Security Entitlement may be reached
by a creditor only by legal process upon the Securities Intermediary
with whom the debtor's securities account is maintained, except where a
Security Entitlement is maintained in the name of a secured party, in
which case the debtor's interest may be reached by legal process upon
the secured party. These regulations do not purport to establish
whether a Federal Reserve Bank is required to honor an order or other
notice of attachment in any particular case or class of cases.
6. Appendix B to part 357 is added to read as follows:
Appendix B to Part 357--TRADES Commentary
Introduction
The adoption of regulations for the Treasury/Reserve Automated
Debt Entry System (``TRADES'') is the culmination of a multi-year
Treasury process of moving from issuing securities only in
definitive (physical/certificated/paper) form to issuing securities
exclusively in book-entry form. The TRADES regulations provide the
legal framework for all commercially-maintained Treasury book-entry
securities. For a more detailed explanation of the procedural and
legal development of book-entry and the TRADES regulations, see the
preamble to the rule proposed March 4, 1996 (61 FR 8420), as well as
the earlier proposals cited therein 51 FR 8846 (March 14, 1986); 51
FR 43027 (November 28, 1986); 57 FR 12244 (April 9, 1992).
Comparison of TRADES and Treasury Direct
A person may hold interests in Treasury book-entry securities
either in TRADES 1 or TREASURY DIRECT. The following summarizes
the major differences between the two systems.
---------------------------------------------------------------------------
\1\ In TRADES a Person's interest in a Treasury book-entry
security is a Security Entitlement, as described in TRADES. A
Participant's interest in a marketable Treasury book-entry security
also is a Security Entitlement. A Participant's Security Entitlement
is different than a Security Entitlement as described in Revised
Article 8, with respect to the Participant's rights against the
issuer. A non-Participant's Security Entitlement is described in
Revised Article 8.
---------------------------------------------------------------------------
Persons holding Treasury book-entry securities in TRADES hold
their interests in such securities in a tiered system of ownership
accounts. In TRADES, Treasury, through its fiscal agents, the
Federal Reserve Banks, recognizes the identity only of Participants
(persons with a direct account relationship with a Federal Reserve
Bank). While Participants may be beneficial owners of interests in
Treasury book-entry securities, there are many beneficial owners of
such interests that are not Participants. Such beneficial owners
hold their interests through one or more Securities Intermediaries
such as banks, brokerage firms or securities clearing organizations.
In TRADES, the rights of non-Participant beneficial owners may
be exercised only through their Securities Intermediaries. Neither
Treasury nor the Federal Reserve Banks have any obligation to a non-
Participant beneficial owner of an interest in a Treasury book-entry
security. Two examples illustrate this principle. First, except
where a pledge has been recorded directly on the books of a Federal
Reserve Bank pursuant to Sec. 357.12(c)(1), Federal Reserve Banks,
as Treasury's fiscal agents, will act only on instructions of the
Participant in whose Securities Account the Treasury book-entry
security is maintained in recording transfers of an interest in a
Treasury book-entry security. A beneficial owner of the interest
that is a non-Participant has no ability to direct a transfer on the
books of a Federal Reserve Bank. Second, Treasury discharges its
payment obligation with respect to a Treasury book-entry security
when payment is credited to a Participant's account or paid in
accordance with the Participant's instructions. Neither Treasury nor
a Federal Reserve Bank has any payment obligation to a non-
Participant beneficial owner of an interest in a Treasury book-entry
security. A non-Participant beneficial owner receives its payment
when its Securities Intermediary credits the owner's account.
Persons holding Treasury book-entry securities in TREASURY
DIRECT, on the other hand, hold their securities accounts on records
maintained by Treasury through its fiscal agents, the Federal
Reserve Banks. The primary characteristic of TREASURY DIRECT is a
direct account relationship between the beneficial owner of a
Treasury book-entry security and Treasury. In TREASURY DIRECT,
Treasury discharges its payment obligation when payment is credited
to the depository institution specified by the beneficial owner of
the Treasury book-entry security, paid directly to the beneficial
owner by check, or paid in accordance with the beneficial owner's
instructions. Unlike TRADES, TREASURY DIRECT does not provide a
mechanism for the exchange of cash to settle a secondary market
transaction, nor are pledges of Treasury book-entry securities held
in TREASURY DIRECT generally recognized. Accordingly, TREASURY
DIRECT is suited for persons who plan to hold their Treasury
securities until maturity, and provides an alternative for investors
who are concerned about holding securities through intermediaries
and who do not wish to hold their interests in Treasury securities
indirectly in TRADES.
Scope of Regulation
Just as the scope of Revised Article 8 is limited,2 the
scope of this regulation is limited. It is not a comprehensive
codification of the law governing securities, transactions in
securities or the law of contracts for the purchase or sale of
securities. Similarly, it is not a codification of all laws that
could affect a person's interest in a Treasury book-entry security.
For example, state laws regarding divorce or intestate succession
could well affect which persons have rights in the interest in a
Treasury book-entry security. Moreover, the regulations deal with
certain aspects of transactions in Treasury securities, such as
perfection of a security interest and its effects and not other
aspects, such as the contractual relationship between a debtor and
its secured party, which are left to applicable law 3 See the
discussion under Sec. 357.10 of the Section-by-Section Analysis.
---------------------------------------------------------------------------
\2\ U.C.C. Revised Article 8, Prefatory Note at 12.
\3\ The regulations in 31 CFR 306.118(b), which are being
supplanted by TRADES, state that ``applicable law'' covers how a
transfer or pledge is ``effected'' as well as perfected. Except with
respect to security interests marked on the books of a Federal
Reserve Bank, TRADES does not address how a security interest in a
Treasury book-entry security is created or what law governs the
creation of a security interest. Section 357.11(a) of TRADES, which
establishes the choice of law for interests other than those covered
by Sec. 357.10, addresses the choice of law with respect to the
perfection, effect of perfection or non-perfection, and priority of
security interests, but does not address the law governing creation
or attachment of a security interest. This is consistent with the
scope and choice of law provisions of Revised Article 8.
---------------------------------------------------------------------------
Section-by-Section Analysis
Section 357.0 Dual Book-entry Systems
Section 357.0 sets forth that Treasury provides two systems for
maintaining Treasury book-entry securities--TRADES and TREASURY DIRECT.
Subpart A of part 357 of 31 CFR contains general information about
TRADES and TREASURY DIRECT. Subpart B contains the TRADES regulations.
Subpart C contains the TREASURY DIRECT regulations. Subpart D contains
miscellaneous provisions. Thus, in its totality, Part 357 sets forth in
one place the complete set of governing rules for Treasury securities
issued in book-entry form.
Section 357.1 Effective Date
Section 357.1 establishes the effective date for TRADES. TRADES
applies to outstanding securities formerly governed by 31 CFR part
306, subpart O. Conforming changes to parts 306, 356, and 358 are
being made to coincide with the publication of TRADES in final form.
Consistent with the approach set forth in Revised Article 8 (see
Sec. 8-603 and the official comment thereto), on and after the
effective date these regulations will apply to all transactions,
including transactions commenced prior to the effective date.
Revised Article 8, in Section 8-603, gave secured parties four
months after the effective date to take action to continue the
perfection of their security interests. TRADES, through its delayed
effectiveness, provides a similar period. In TRADES, January 1,
1997, becomes the date by which such actions must be completed.
The effective date for TRADES is January 1, 1997. While TRADES
is based in large part on Revised Article 8 that has received
widespread attention in the financial community and already has been
adopted in
[[Page 43632]]
28 states,\4\ Treasury has determined that TRADES will be effective
on January 1, 1997, to ensure a smooth transition to TRADES. In
making that determination, Treasury has taken into account the time
required by other Government-Sponsored Enterprises (GSEs) to
promulgate similar regulations for their securities. Such an
effective date, when combined with TRADES having been published in
proposed form with a 60-day comment period, should provide
sufficient time for an orderly transition to the new TRADES rules.
---------------------------------------------------------------------------
\4\ As of August 1, 1996, those states are: Alabama, Alaska,
Arizona, Arkansas, Colorado, Idaho, Illinois, Indiana, Iowa, Kansas,
Kentucky, Louisiana, Maryland, Massachusetts, Minnesota,
Mississippi, Nebraska, New Mexico, Oklahoma, Oregon, Pennsylvania,
Texas, Utah, Vermont, Virginia, Washington, West Virginia and
Wyoming. See discussion accompanying footnote 11.
---------------------------------------------------------------------------
Section 357.2 Definitions
Section 357.2 contains definitions for use in subparts B and C.
While most of the definitions are straightforward, four terms--
Participant, Entitlement Holder, Security Entitlement and Securities
Intermediary--are critical to an understanding of the proposed
TRADES regulations.
(a) Participant
A Participant is a person that has a securities account
relationship in its name with a Federal Reserve Bank. Accordingly,
the Federal Reserve Bank and Treasury know both the identity of the
persons maintaining these accounts and the Treasury book-entry
securities held in these accounts.
(b) Securities Intermediary
Securities Intermediaries are persons (other than individuals,
except as described below) that are in the business of holding
interests in Treasury book-entry securities for others. Participants
can be, and usually are, Securities Intermediaries.
In addition, entities such as clearing corporations, banks,
brokers and dealers can be Securities Intermediaries in a single
chain of ownership of a Treasury security. An individual, unless
registered as a broker or dealer under the federal securities laws,
cannot be a Securities Intermediary. As an illustration of a
possible chain of ownership, in the following chart, the Federal
Reserve Bank, Participant and Broker-Dealer are all Securities
Intermediaries.
Treasury
Federal Reserve Bank
|
Participant
|
Broker-Dealer
|
Individual Holder
(c) Entitlement Holder
An Entitlement Holder is any person for whom a Securities
Intermediary holds an interest in a Treasury book-entry security. In
the above example Individual Holder, Broker-Dealer and Participant
are all Entitlement Holders. Thus, a person can be both a Securities
Intermediary and an Entitlement Holder. See also the commentary on
``Security Entitlement.''
(d) Security Entitlement
A Security Entitlement is the interest that an Entitlement
Holder has in a Treasury book-entry security. In the example,
Participant, Broker-Dealer and Individual Holder all hold Security
Entitlements. The rights and property interests associated with a
Security Entitlement of a Participant held on the books of a Federal
Reserve Bank (``Participant's Security Entitlement'') are, however,
different from the rights and property interests associated with
other Security Entitlements. As provided in Sec. 357.10(a), Federal
law defines the scope and nature of a Participant's Security
Entitlement. While TRADES is based in large part on Revised Article
8, the meaning of Security Entitlement under federal law is
different than under Revised Article 8. For example, Participants
have a direct claim against the United States for interest and
principal even though, under state law, an Entitlement Holder would
only have a claim against its Securities Intermediary for such
payment. To the extent not inconsistent with this regulation, the
scope and nature of a Security Entitlement of an Entitlement Holder
below the level of a Participant, (Broker-dealer and Individual
Holder in the example above), is defined by applicable state law, as
determined pursuant to Sec. 357.11. It should also be noted that
while a Participant's rights have Federal law components under
Sec. 357.10(a), the nature of a Security Entitlement held by a lower
tier intermediary on the books of a Participant is determined
pursuant to applicable law as provided in Sec. 357.11.
Section 357.10 Law Governing the United States and Reserve Banks
Section 357.10(a) provides that the rights and obligations of
the United States and the Federal Reserve Banks (with one exception
detailed below), with respect to both the TRADES system and Treasury
book-entry securities maintained in TRADES are governed solely and
exclusively by Federal law. Thus, claims against the United States
and Federal Reserve Banks of both Participants and all other persons
with an interest (or claiming an interest) in a Treasury book-entry
security maintained in TRADES are governed by Federal law. Federal
law is defined to include TRADES, the offering circulars pursuant to
which the Treasury securities are sold, the offering announcements
and Federal Reserve Bank Operating Circulars.5 Prior to March
1, 1993, the terms of each offering of Treasury securities, except
for Treasury bills were set forth in an offering circular published
in the Federal Register.6 Since March 1, 1993, all Treasury
book-entry securities have been offered pursuant to a uniform
offering circular set forth at 31 CFR part 356.
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\5\ A ``Federal Reserve Bank Operating Circular'' is defined in
Sec. 357.2 as the publication issued by each Federal Reserve Bank
that sets forth the terms and conditions under which the Reserve
Bank maintains Book-entry Securities Accounts and transfers Book-
entry Securities.
\6\ Treasury bills were issued pursuant to one master offering
circular (31 CFR part 349, removed, and replaced by 31 CFR part 356)
effective March 1, 1993. (58 FR 412)
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While TRADES is based in large measure on Revised Article 8, a
fundamental principle of these regulations (and a divergence from
Revised Article 8) is that the obligations of the issuer (the United
States) and the Federal Reserve Banks, as well as all claims with
respect to TRADES or a Treasury book-entry security against Treasury
or a Federal Reserve Bank, are governed solely by Federal law. Thus,
for example, those parts of Revised Article 8 that detail
obligations of issuers (or their agents) of securities are not
applicable to either the United States or Federal Reserve
Banks.7 In addition, neither the United States nor Federal
Reserve Banks have any obligations to persons holding their
interests in a Treasury book-entry security at levels below the
level of a Participant or to any other person claiming an interest
in a Treasury book-entry security (with the limited exception set
out in Sec. 357.12(c)(1)). Thus, there are no derivative rights
against either the United States or the Federal Reserve Banks.
---------------------------------------------------------------------------
\7\ The regulations in subpart C of this part set out other
obligations of the United States and the Federal Reserve Banks for
securities held in TREASURY DIRECT. These regulations preempt
applicable state law.
---------------------------------------------------------------------------
In interpreting this section, it is important to note that the
scope of TRADES, like that of Revised Article 8, is limited.
Accordingly, the governing law set forth in Sec. 357.10(a) is
applicable only to the matters set forth in Sec. 357.10(a). Other
laws remain applicable and could affect the holders of book-entry
securities.
For example, the tax treatment of Securities Entitlements is
outside the scope of TRADES and other law (the Federal income tax
code) is applicable in determining such tax treatment. Similarly,
nothing in Sec. 357.10(a) limits the applicability of other laws to
matters such as whether the activities of Participants or Securities
Intermediaries with respect to interests in Treasury book-entry
securities are subject to banking or securities laws.
While TRADES in Sec. 357.10(a) defines what law governs the
contract between the United States, as issuer, and the holder of a
Security Entitlement, it is not a complete statement of the contract
law applicable to the United States or Federal Reserve Banks. For
example, if a Participant obtains a discount window loan from a
Federal Reserve Bank and agrees to pledge collateral, including
Treasury book-entry securities, to the Federal Reserve Bank as
security for the loan, Sec. 357.10(a) does not establish the law for
determining the validity or enforceability of the contract or the
law applicable to the creation and perfection of security interests
in property that is not a Treasury book-entry security. Section
357.10(a) does provide the law applicable for how a security
interest in Treasury book-entry securities is perfected, the
priority of such interest and, if Sec. 357.12(c)(1) is applicable,
how such security interest is created. Similarly, nothing in
Sec. 357.10(a) affects the continuing applicability or
enforceability of Federal Reserve Bank operating circulars such as
the circular setting forth provisions regarding
[[Page 43633]]
electronic access to services provided by Federal Reserve Banks and
agreements executed in connection with such circulars.
The law applicable with respect to interests granted to a
Federal Reserve Bank depends on the manner in which the security
interest is granted.
Where a security interest in favor of a Federal Reserve Bank is
marked on the books of the Federal Reserve Bank under Section
357.12(c)(1), Sec. 357.10(a) establishes the applicable law. A
security interest in favor of a Federal Reserve Bank would be
recorded on the Federal Reserve Bank's books where, for example, the
Federal Reserve Bank made a discount window loan to a depository
institution and any Treasury book-entry securities provided by the
depository institution as collateral have been deposited to a pledge
account on the books of the Federal Reserve Bank. For a borrowing
depository institution that is not a Participant, the book-entry
securities used as collateral generally would be deposited to the
Federal Reserve Bank pledge account by the borrowing institution's
Securities Intermediary. See Hypothetical 5.
Section 357.10(b) sets forth law applicable with respect to
security interests in favor of a Federal Reserve Bank that have not
been marked on the books of a Federal Reserve Bank. A security
interest in the Securities Entitlement of a Participant in favor of
a Federal Reserve Bank that is not marked on the books of the
Federal Reserve Bank is governed by the law of the state in which
the head office of the Federal Reserve Bank is located. Such a
security interest could arise, for example, where the delivery of
book-entry securities to the securities account of the Participant
results in an overdraft in the Participant's Funds Account. The
extent to which the Federal Reserve Bank has an interest in the
Participant's book-entry securities to secure the overdraft
therefore would be determined under the law of the state in which
the Reserve Bank's head office is located. If the State in which the
head office of the Federal Reserve Bank is located has not adopted
Revised Article 8, under Sec. 357.10(c) that State is deemed to have
adopted Revised Article 8.
In certain very limited circumstances, a Federal Reserve Bank
also may have a security interest in the book-entry securities of a
non-Participant that is not marked on the books of the Federal
Reserve Bank. Section 357.10(b) provides a separate rule for such a
security interest, which would be governed by the law of the non-
Participant's Securities Intermediary, as determined under
Sec. 357.11. Under Sec. 357.11, the perfection, effect of
perfection, and priority of a security interest created under such
an agreement would be governed by the law of the Securities
Intermediary's jurisdiction, as determined under Sec. 357.11(b).
Under Sec. 357.11(d), if the jurisdiction specified in
Sec. 357.11(b) has not adopted Revised Article 8, jurisdiction would
be deemed to have adopted Revised Article 8.\8\
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\8\ An interest in book-entry securities of a non-Participant
that is not marked on the books of the Federal Reserve Bank, while
uncommon, could arise where the Federal Reserve Bank lends to a non-
Participant depository institution and enters into a triparty
agreement with the depository institution and its Securities
Intermediary rather than requiring the deposit of the book-entry
securities in a pledge account on the books of the Federal Reserve
Bank through an instruction given by the non-Participant depository
institution to its Securities Intermediary.
---------------------------------------------------------------------------
For purposes of applying the state law chosen under the rules of
Sec. 357.10(b), Federal Reserve Banks are treated as clearing
corporations. As a result, a security interest in a Securities
Entitlement of a Participant in favor of a Federal Reserve Bank
under Sec. 357.12(c)(2) has the same priority as security interests
granted to other clearing corporations under state law. This is
consistent with the treatment accorded to Federal Reserve Banks
generally under Revised Article 8.
Section 357.11 Law Governing Other Interests
(a) Law Governing the Rights and Obligation of Participants and Third
Parties
Section 357.11 is a choice of law rule. The substantive matters
subject to this choice of law rule are set forth in Sec. 357.11(a).
The matters set forth in Sec. 357.11(a) are meant to be coextensive
with those matters covered by Revised Article 8 with respect to a
person's interest in a Treasury book-entry security (other than
those related to a person's relationship to Treasury or a Federal
Reserve Bank which are governed solely by federal law). For purposes
of these choice of law rules Participants are Securities
Intermediaries.
Section 357.11(b) adopts Revised Article 8's general choice of
law rule. Section 357.11(c) sets forth a special choice of law rule
with respect to security interests perfected automatically or by
filing, which also is included in Revised Article 8. Generally, the
law applicable to the Securities Intermediary will govern matters
involving an interest in a book-entry security held through that
intermediary. This approach is not followed with respect to
perfection of security interests automatically or by filing. In
those cases, the law of the jurisdiction in which the debtor is
located is the governing law. Since filing systems are based on the
location of the debtor, this approach should reduce uncertainty and
preserve the normal practice of searching records based on the
debtor's location.\9\ The language ``person creating a security
interest'' is used in lieu of the term ``debtor'' in this provision
to avoid any confusion. The word ``debtor'' has two meanings in the
Uniform Commercial Code and the expression ``person creating a
security interest'' provides clarity with respect to who is covered
by this section. The term does not refer to a creditor. The language
``is located'' is intended to conform to its meaning under
applicable law, as it may be amended from time to time. See, e.g.,
U.C.C. section 9-103(3)(d). Section 357.11(d) provides for the
application of Revised Article 8 if the choice of law analysis
required by Sec. 357.11(b) results in the choice of the law of a
State that has not yet adopted Revised Article 8. As noted
elsewhere, in such a situation, the State's law is viewed as if it
had adopted Revised Article 8. This section also provides that, for
purposes of applying state law, the Federal Reserve Banks are
clearing corporations and Participants' interests in book-entry
securities are Security Entitlements.
---------------------------------------------------------------------------
\9\ The substantive effect of filing is limited and applies only
in states which have adopted Revised Article 8. Since the effect of
filing is a unique state law matter, in this one area, Treasury has
determined that possible lack of uniformity does not justify
altering state law.
---------------------------------------------------------------------------
(b) Limited Scope of Federal Preemption
In an earlier TRADES proposal Treasury contemplated adopting a
comprehensive regulation governing the rights of all persons in
Treasury book-entry securities held in TRADES. Such an approach was
proposed because Treasury believed that a uniform rule was necessary
to preserve the efficiency and liquidity of the market for Treasury
securities--the most liquid and efficient market in the world.
Treasury believed then, and believes now, that the material rights
of a holder in the United States of an interest in a Treasury
security should not vary solely by virtue of such holder's
geographic location or the location of the financial institution
through which it holds its interest in Treasury securities. In light
of Revised Article 8, Treasury has determined that it is possible to
achieve this uniformity without developing an independent system of
Federal commercial law.\9\ The questions inherent in a tiered system
of ownership have been analyzed, and, in Treasury's view,
satisfactorily addressed by Revised Article 8.
---------------------------------------------------------------------------
\9\ As noted previously, the substantive scope of this
regulation is limited.
---------------------------------------------------------------------------
As of August 1, 1996, 28 states have adopted Revised Article 8
and Treasury understands that it will soon be adopted in additional
states. As with all uniform laws, the adoption process takes several
years. In order to assure uniformity, in light of the unavoidable
delays in the state-by-state adoption process of Revised Article 8,
Treasury is promulgating regulations with a limited form of
preemption. As provided in both Secs. 357.10(c) and 357.11(d), if
the choice of law rules set forth in TRADES would lead to the
application of the law of a State that has not yet adopted Revised
Article 8, TRADES will apply Revised Article 8 (with conforming and
miscellaneous amendments to other Articles) in the form approved by
the ALI and NCCUSL. Treasury expects that these provisions will be
operative only during the state-by-state adoption process and would
plan to amend TRADES to delete reference to these provisions once
the adoption process has been completed.
While Revised Article 8 is defined to mean the official text of
Article 8 as approved by the ALI and NCCUSL, Treasury recognizes
that states may make minor changes in that text when adopting
Article 8. Treasury has concluded that minor changes should not
prevent Revised Article 8, as adopted by a state, from being the
appropriate law. In other words, if a state passes a version of
Article 8 that is substantially identical to Revised Article 8,
reference to Revised Article 8 (as defined) would no longer be
required. Treasury has determined that the
[[Page 43634]]
versions of Article 8 passed by 28 states \10\ that have enacted
Article 8 as of the date this rule is published in the Federal
Register meet this standard. Accordingly, Secs. 357.10(c) and
357.11(d) would not be applicable if the choice of law provisions of
TRADES directed a person to one of those states. As additional
states adopt Revised Article 8, Treasury will provide notice in the
Federal Register as to whether the enactments are ``substantially
identical'' to the uniform version for purposes of these regulations
and on an annual basis, the Commentary will be amended to reflect
subsequent enactments. This approach represents a significantly
reduced form of preemption of state law from former versions of
TRADES and preserves Treasury's preeminent interest in a uniform
system of rules applicable to all holders of interests in Treasury
book-entry securities.
---------------------------------------------------------------------------
\10\ Alabama, Alaska, Arizona, Arkansas, Colorado, Idaho, Iowa,
Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland,
Massachusetts, Minnesota, Mississippi, Nebraska, New Mexico,
Oklahoma, Oregon, Pennsylvania, Texas, Utah, Vermont, Virginia,
Washington, West Virginia, Wyoming.
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Section 357.12 Obtaining an Interest in a Book-entry Security
(a) Creation of a Participant's Security Entitlement
A Participant's interest in a Treasury book-entry security is a
Securities Entitlement. Section 357.12(a) provides that a
Participant's Securities Entitlement is created when a Federal
Reserve Bank indicates by book entry that a Book-entry Security has
been credited to a Participant's Securities Account. Instead of the
concept of initial credit and transfer of a Treasury book-entry
security, as set forth in the existing regulations, this proposal
focuses on the creation of a Participant's Securities Entitlement
and, in this way, is similar to Section 8-501 of Revised Article 8.
The regulation focuses on the creation of a Participant's
Security Entitlement because Security Entitlement is the term used
to describe the Participant's interest in a Treasury book-entry
security. Once a Participant obtains that interest, the regulation
sets forth what that interest is. Thus, as provided in Sec. 357.10,
federal law describes a Participant's rights against the United
States and the Federal Reserve Bank where it maintains its
Securities Account. To the extent not inconsistent with Sec. 357.10,
Sec. 357.11 describes the applicable law to determine Participants'
rights and obligations with respect to all other persons. Under
these regulations, Participants can still transfer their interests
in a Treasury book-entry security as they did before--by issuing a
Transfer Message to the Federal Reserve Bank where they hold such
interest. Transfer of interests between Participants can occur by a
Participant holding such interest issuing a Transfer Message. As a
result of such message, the Federal Reserve Bank will make a book
entry in favor of the receiving Participant (thereby creating a
Security Entitlement in favor of such Participant) and also will
make a book entry deleting the initiator Participant's interest in
such Treasury book-entry security (thereby eliminating that
Participant's Security Entitlement). In addition, if authorized
under applicable state law, Participants may enter into agreements
with other Participants that, as to the Participants, constitute a
transfer. Such action is without effect to either the United States
or a Federal Reserve Bank.
(b) Creation and Priority of a Security Interest
(i) Security Interests of the United States. Section 357.12(b)
provides that a security interest in favor of the United States has
priority over the interests of any other person in a Treasury book-
entry security. The United States obtains security interests in
Treasury securities as collateral to secure funds in a variety of
situations such as Treasury Tax and Loan accounts; government agency
funds or funds under the control of the Federal Courts held at
financial institutions; and securities pledged in lieu of surety by
contractors and others. The priority provided the United States in
these situations is consistent with existing law.
In addition, Federal Reserve Banks do recognize on their books
and records security interests in favor of the United States. In
that situation, the Federal Reserve Bank will not transfer the
security without the permission of the United States. This section
provides that a Federal Reserve Bank may rely exclusively on the
directions of an authorized representative of the United States to
transfer a security and is protected in so relying. Ordinarily, an
authorized representative of the United States would take such
action under circumstances such as the default or insolvency of the
pledgor.
(ii) Security Interests on the Books of a Reserve Bank. Where
required by Federal law or regulation or pursuant to a specific
agreement with a Federal Reserve Bank, a security interest in favor
of a Federal Reserve Bank or other person may be created or
perfected by a Federal Reserve Bank marking its books to record the
security interest under Sec. 357.12(c)(1). An example of a security
interest that is marked on the books of a Federal Reserve Bank would
be the pledge in favor of a Federal Reserve Bank of a Participant's
book-entry securities as collateral for a discount window loan.\11\
For limited categories of pledges, Federal Reserve Banks may agree
to record a security interest in favor of a third party on their
books. For example, in some circumstances a Federal Reserve Bank may
permit the establishment of a pledge account to hold book-entry
securities pledged to governmental entities other than the United
States government. It is important to note that there is no
obligation for either Treasury or a Federal Reserve Bank to agree to
record a security interest on the books of a Federal Reserve Bank,
except as required by Federal law or regulation. If they do so, the
security interest is perfected when the Federal Reserve Bank records
a security interest on its books. In addition, the security interest
has priority over all other interests in the Treasury book-entry
security except an interest of the United States.
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\11\ Book-entry securities pledged by a non-Participant to a
Federal Reserve Bank generally would be deposited by the non-
Participant's Securities Intermediary to a pledge account at the
Federal Reserve Bank, and therefore also would be marked on the
books of the Federal Reserve Bank. See the discussion under D.
(Sec. 357.10).
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(iii) Other Security Interests. As provided in
Sec. 357.12(c)(2), a security interest in a book-entry security may
be perfected by any method available under applicable state law, as
determined under Sec. 357.10(b) or Sec. 357.11.\12\ The perfection
and priority of such interests shall be governed by applicable law.
Security interests under this section may include security interests
in favor of a Federal Reserve Bank, such as a clearing lien or
pledge by a non-part
FR Doc. 96-21469 Regulations Governing Book-Entry Treasury Bonds, Notes and Bills
icipant of book-entry securities held through a
Securities Intermediary where the securities have not been deposited
to a Federal Reserve Bank pledge account. Consistent with Revised
Article 8, a Federal Reserve Bank would be treated as a clearing
corporation under the applicable state law.
---------------------------------------------------------------------------
\12\ Under both of these sections, if the state has not yet
adopted Revised Article 8, the applicable law would be that state's
law as it would be amended by Revised Article 8.
---------------------------------------------------------------------------
If a Person perfects a security interest pursuant to
Sec. 357.12(c)(2), obligations of the Treasury and the Federal
Reserve Banks with respect to that security interest are limited.
Specifically, unless special arrangements are agreed to by the
United States or a Federal Reserve Bank pursuant to
Sec. 357.12(c)(1), neither the Federal Reserve Bank nor the United
States will recognize the interests of any person other than the
person in whose securities account the interest in a Treasury book-
entry security is maintained. This does not mean that such a
security interest is invalid. Rather, it means that the creditor's
recourse will be solely against the debtor Participant or other
third party.
Section 357.13 Rights and Obligations of Treasury and the Reserve
Banks
(a) Adverse Claims
Section 357.13(a) sets forth the general rule that, with limited
exceptions, Treasury and the Federal Reserve Banks will recognize
only the interest of a Participant in a Treasury book-entry security
in whose Securities Account such interest is maintained.
As noted previously, Treasury book-entry securities maintained
in TRADES are held in a tiered system of ownership. The records of a
Federal Reserve Bank reflect only the ownership at the top tier.
Institutions maintaining a Securities Account with a Federal Reserve
Bank frequently will hold interests in Treasury book-entry
securities for their customers (which can include broker-dealers and
other Securities Intermediaries) and in certain cases those
customers will hold interests in securities for their customers.
Accordingly, neither Treasury nor a Federal Reserve Bank will know
the identity or recognize a claim of a Participant's customer if
that customer were to present it to Treasury or a Federal Reserve
Bank.
In addition, except in the limited case where a security
interest is marked on the books of a Federal Reserve Bank pursuant
to Sec. 357.12(c)(1), neither the Treasury nor a Federal Reserve
Bank will recognize the claims of any other person asserting a claim
[[Page 43635]]
in a Treasury book-entry security. Persons at levels below the
Participant level must present their claims to their Securities
Intermediary.
(b) Payment obligations
Section 357.13(b) contains a corollary to the rule set forth in
Sec. 357.13(a). This section provides that Treasury discharges its
payment responsibility with respect to a security that it has issued
when a Federal Reserve Bank credits the funds account of a
Participant with amounts due on that security or makes payment in
some other manner specified by the Participant. This is consistent
with existing law and the first TRADES proposal.13 In Revised
Article 8, the issuer discharges its obligations when it makes
payment to an owner registered on its books. Under common commercial
practice, the registered owner in the indirect system may be a
clearing corporation or the clearing corporation's nominee. Although
the Federal Reserve Banks are treated as clearing corporations under
both Revised Article 8 and TRADES, Treasury remains liable until
payment is made to, or in accordance with the instructions of, a
Participant. Section 357.13(b)(2) establishes the mechanism of how
Treasury book-entry securities are paid at maturity. It is intended
to cover a variety of procedures, including where the proceeds of
pledged securities are credited to a suspense account pending
substitution or release. This paragraph makes clear that the payment
takes place automatically and that, unlike with physical
certificates, there is no act of presentment required by the
Participant.
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\13\ 51 FR 8846, 8848 (March 14, 1986).
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Section 357.14 Authority of Reserve Banks
Section 357.14 provides that Federal Reserve Banks are
authorized, as fiscal agents of Treasury, to operate the commercial
book-entry system for Treasury.
Section 357.44 Notices
Section 357.44 contains a revised version of a provision that
appeared in earlier TRADES proposals. Similar to the rule in Revised
Article 8 (see section 8-112), it provides where certain legal
process should be directed. While providing instructions on where
notice should be directed, it makes clear that the regulations do
not establish whether a Federal Reserve Bank is required to honor
any such order or notice.
J. Hypotheticals
HYPOTHETICAL 1
TREASURY
FEDERAL RESERVE BANK
|
PARTICIPANT
|
DEALER
|
INVESTOR
The first hypothetical is designed to show what law applies at
different levels of the tiered book-entry system. TRADES provides
that federal law, and only federal law (defined in Sec. 357.10(a)),
governs the rights and obligations of the United States and the
Federal Reserve Banks (except for those matters involving Federal
Reserve Banks set forth in Sec. 357.10(b)). Thus, for example,
Treasury discharges its payment obligations with respect to a
security it has issued in the manner described in Sec. 357.13(b).
Federal law both defines the payment obligation and describes how
Treasury fulfills that obligation. Those portions of Revised Article
8 dealing with issuer obligations are not applicable to Treasury or
the Federal Reserve Banks.14 Similarly, with certain limited
exceptions as set forth in Sec. 357.12(c)(1), Treasury and the
Federal Reserve Banks will recognize only the interest of a
Participant in a Treasury book-entry security in whose Security
Account the interest is maintained. Accordingly, as a matter of
federal law, neither Treasury nor a Federal Reserve Bank will
recognize any claim by Dealer or Investor.15
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\14\ As provided in Sec. 357.14, Federal Reserve Banks, among
other things, effect transfers of book-entry securities between
Participants' Security Accounts.
\15\ One comment questioned whether similar language in the
March 4, 1996 release implied that, under Revised Article 8, in the
above example Investor could have a claim against Participant. No
such implication was intended. The only point of the language is to
make it clear that Federal, not state, law governs the rights and
obligations of Treasury and the Federal Reserve Banks.
---------------------------------------------------------------------------
In the hypothetical above, as between Participant and Dealer,
Participant is the Securities Intermediary. With respect to the
matters set forth in Sec. 357.11(a), the law of the Securities
Intermediary's jurisdiction governs. Thus, with respect to the
matters in Sec. 357.11(a), the law of Participant's jurisdiction
applies as between Participant and Dealer.16 If Participant's
jurisdiction, as determined under Sec. 357.11(b), has not adopted
Revised Article 8, the law of Participant's jurisdiction, as it
would be amended by Revised Article 8, applies. Similarly, as
between Dealer and Investor, Dealer is a Securities Intermediary,
with respect to the matters in Sec. 357.11(a), the law of Dealer's
jurisdiction applies as between Dealer and Investor. If Dealer's
jurisdiction has not adopted Revised Article 8, the law of Dealer's
jurisdiction, as it would be amended by Article 8, applies.
HYPOTHETICAL 2
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\16\ As described in the March 4 Release, the scope of TRADES is
limited. As a general rule, if a matter is not covered in
Sec. 357.11(a), TRADES is not applicable. One comment questioned
whether TRADES covered the creation and attachment of a security
interest. The omission of creation and attachment in Sec. 357.11(a)
is intentional.
TREASURY
FEDERAL RESERVE BANK
| |
PARTICIPANT A PARTICIPANT B
| |
DEALER A DEALER B
Assume that Dealer A sells its interest in a Treasury book-entry
security to Dealer B. The transaction likely would take the
following form. Dealer A will instruct Participant A to transfer its
interest in a Treasury security to Participant B against cash
payment. Dealer B will instruct Participant B to transfer cash to
Participant A against delivery of an interest in the specified
securities. Participant A will instruct the Federal Reserve Bank to
transfer its interest in the Treasury security to Participant B
against simultaneous credit of cash. The Federal Reserve Bank will
debit Participant A's security account and credit Participant B's
security account and simultaneously credit Participant A's cash
account and debit Participant B's cash account. Participant A will
mark its books to show that it has debited Dealer A's securities
account and credited Dealer A's cash account. Participant B will
mark its books to show the Security Entitlement in the Treasury
security in favor of Dealer B and a debit against Dealer B's cash
account. Federal law, set forth in Sec. 357.12(a) provides that
Participant B acquires its interest in the Treasury book-entry
security when the Federal Reserve Bank indicates by book-entry that
the interest in the security has been credited to Participant B's
Securities Account. Pursuant to Sec. 357.11(a), but subject to
Sec. 357.11(d), Participant B's jurisdiction governs Dealer B's
acquisition of a Securities Entitlement from Participant B.
HYPOTHETICAL 3
TREASURY
FEDERAL RESERVE BANK
|
PARTICIPANT
Assume Participant wishes to obtain a loan from Federal Reserve
Bank and, as part of the transaction, will grant Federal Reserve
Bank a security interest in its Securities Entitlement with respect
to Treasury book-entry securities. The transaction can be
accomplished in one of two ways. Pursuant to Sec. 357.12(c)(1), the
Federal Reserve Bank can mark its books to reflect the security
interest. As a matter of federal law, that action creates and
perfects the Federal Reserve Bank's security interest and grants the
Federal Reserve Bank priority over all other claimants (other than
the United States pursuant to Sec. 357.12(b)).17 A second
method for completing the transaction, as set forth in
Sec. 357.12(c)(2), would be to take whatever actions are authorized
by applicable law. In that case, applicable law is the law of the
jurisdiction of the head office of the Federal Reserve Bank. If that
jurisdiction had adopted Revised Article 8, it would be the law of
that jurisdiction. If that jurisdiction had not adopted Revised
Article 8, it would
[[Page 43636]]
be the law of that jurisdiction as if the jurisdiction had adopted
Revised Article 8. Under Revised Article 8, the Federal Reserve
Bank's interest would be that of a clearing corporation.
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\17\ In certain limited circumstances, a Federal Reserve Bank
may enter into an agreement under which it agrees to record on its
books an interest in Participant's book-entry securities in favor of
a non-Participant, such as a governmental entity. Under these
circumstances, the non-Participant would have a perfected security
interest with priority over other claimants (other than the United
States under Sec. 357.12(b)). It should be noted that, as set forth
in Sec. 357.12(c)(1), there is no requirement that either the United
States or a Federal Reserve Bank agree to creation and perfection of
a security interest in this way, except as provided in
Sec. 357.12(c)(1).
HYPOTHETICAL 4
TREASURY
FEDERAL RESERVE BANK
| |
PARTICIPANT A PARTICIPANT B
Assume that Participant A wishes to borrow from Participant B
and grant Participant B a security interest in its Security
Entitlement in Treasury book-entry securities. As provided in
Sec. 357.12(c)(2), the transaction would be completed pursuant to
applicable law determined in accordance with 357.11. Although such
an interest could be recorded on the books of a Federal Reserve Bank
under Sec. 357.12(c)(1), Federal Reserve Banks generally do not mark
their books to record this type of security interest for
Participants.
HYPOTHETICAL 5
TREASURY
FEDERAL RESERVE BANK
|
PARTICIPANT A
|
DEALER A
|
BANK A
Assume that Bank A wishes to borrow from the Federal Reserve
Bank and will pledge its interest in Treasury book-entry securities
held at Dealer A to collateralize that loan. The transaction could
be accomplished in two ways. Pursuant to Sec. 357.12(c)(1), the
interest could be created and perfected on the books of a Federal
Reserve Bank. Such a transaction would take place in the following
fashion. Bank A could have Dealer A instruct Participant A to
deposit securities to a pledge account specified by the Federal
Reserve Bank. The Federal Reserve Bank likely would create an
account on its books and specify that account to Bank A as the
account to receive Bank A's interest in Treasury book-entry
securities. Participant A, upon receiving Dealer A's instructions,
would then instruct the Federal Reserve Bank to debit its account at
the Federal Reserve Bank and credit the account created by the
Federal Reserve Bank. The second way the transaction could take
place is by any method permitted by the law of Dealer A's (Bank A's
Securities Intermediary) jurisdiction. This could involve a tri-
party agreement among the Federal Reserve Bank, Dealer A, and Bank
A. As set forth in Sec. 357.11(b)(1), that agreement likely would
specify which jurisdiction's law is to govern the transaction and
could specify that such choice of law supersedes any other choice of
law agreement previously entered into by Dealer A and Bank A. If
Dealer A's jurisdiction has not adopted Revised Article 8, the
applicable law would be the law of Dealer A's jurisdiction as it
would be amended by Revised Article 8.
Dated: August 16, 1996.
Gerald Murphy,
Fiscal Assistant Secretary.
[FR Doc. 96-21469 Filed 8-20-96; 1:29 pm]
BILLING CODE 4810-39-P
Complete official Federal Register PDF
FR Doc. 96-21444 Automatic Stays of Certain FM and TV Allotment Orders
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43468-43472]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21444]
=======================================================================
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR PART 1
[FCC 96-301]
Automatic Stays of Certain FM and TV Allotment Orders
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: This Order amends the Commission's rules to delete a provision
that, for rulemaking proceedings to amend the FM or TV Table of
Allotments, provides for an automatic stay, upon the filing of a
petition for reconsideration of any Commission order modifying an
authorization to specify operation on a different FM or TV channel. By
this action, we remove an incentive for the filing of petitions for
reconsideration that are largely without merit, thereby expediting the
provision of expanded service to the public and conserving Commission
resources now expended processing these meritless petitions. Further,
we shall apply this procedural change to pending cases, thereby lifting
automatic stays currently in effect pursuant to the existing rule.
EFFECTIVE DATE: September 23, 1996.
FOR FURTHER INFORMATION CONTACT: Paul R. Gordon, Mass Media Bureau,
Policy and Rules Division, (202) 418-2130.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order in MM Docket No. 95-110, FCC 96-301, adopted July 5, 1996 and
released August 8, 1996. The full text of this Commission decision is
available for inspection and copying during normal business hours in
the FCC Dockets Branch (Room 239), 1919 M Street, N.W., Washington,
D.C. The complete text of this decision may also be purchased from the
Commission's copy contractor, International Transcription Services,
(202) 857-3800, 2100 M Street, N.W., Suite 140, Washington, DC 20037.
Synopsis of Order
I. Introduction
1. This Report and Order adopts the proposals set forth in the
Notice of Proposed Rulemaking in this proceeding, 60 FR 39134, August
1, 1995. We herein delete that portion of Sec. 1.420(f) of the
Commission's rules, 47 CFR 1.420(f), which, for rulemaking proceedings
to amend the FM or TV Table of Allotments, provides for an automatic
stay, upon the filing of a petition for reconsideration of any
Commission order modifying an authorization to specify operation on a
different FM or TV channel. By this action, we remove an incentive for
the filing of petitions for reconsideration that are largely without
merit, thereby expediting the provision of expanded service to the
public and conserving Commission resources now expended processing
these meritless petitions. Further, we shall apply this procedural
change to pending cases, thereby lifting automatic stays currently in
effect pursuant to the existing rule.
II. Background
The Existing Rule
2. The automatic stay rule applies to amendments to the TV or FM
Tables of Allotments where the Commission has modified the
authorization of the petitioner, another licensee, or another permittee
to specify operation on a different channel. Where a licensee or
permittee other than the petitioner might be directed to operate on a
different channel in order to accommodate a proposed allotment change,
that licensee or permittee is notified of the pending proceeding and is
ordered to show cause, if any, why the modification should not be
approved.1 Also, although Section 1.420(f) refers only to
petitions for reconsideration, the rule has also been applied routinely
to orders challenged by applications for review. In repealing the
automatic stay provision for petitions for reconsideration, we also
abandon this parallel policy.2
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\1\ See 47 U.S.C. 316(a); 47 CFR 1.87. For convenience, we shall
use the term ``licensee'' to include both licensees and permittees.
\2\ For convenience, we shall use the term ``petitions for
reconsideration'' to include applications for review.
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3. In addition to the automatic stay provision cited above, Section
1.420(f) of the Commission's rules requires petitions for
reconsideration and responsive pleadings to be served on parties to the
proceeding and on any licensee or permittee whose authorization may be
modified to specify operation on a different channel, and such
petitions must be accompanied by a certificate of service. Thus, the
automatic stay was intended to help ensure that affected parties have
the opportunity to comment before proposed modifications to their
authorizations become effective.
4. However, as discussed in the NPRM, broadcasters whose
authorizations are not proposed to be modified frequently file
challenges to approvals of their competitors' proposals to improve
service, thereby triggering the automatic stay. Only a very small
percentage of these challenges are ultimately successful. The automatic
stay prohibits licensees from constructing modified facilities
authorized by the Commission until final resolution of any outstanding
petition for reconsideration or until the stay is otherwise lifted. The
Notice asserted that these petitions cause unjustifiable expense and
delay for parties and absorb valuable staff resources that might
otherwise be directed to resolution of new proposals to improve
broadcast service.
Amending the Rule
5. Comments. Most of the commenters in this proceeding support
repeal of the automatic stay rule. Citing their own experiences,
several licensees contend that the rule has harmed them and obstructed
the public interest. They assert that, as a general matter, the public
is disserved by delaying the benefits of improved service. Further,
they state, a licensee's reason for seeking a channel reallotment is
often to allow it to remain financially viable. However, because of the
delay caused by the automatic stay rule, the facilities in question may
go dark or never be constructed at all, despite the Commission's having
already approved the needed modification.
6. In contrast, two other parties claim that they and the public
interest are protected by the existing rule. They argue that, once a
licensee has appealed an involuntary reallotment, it should remain
protected from having to cause disruption to itself and to the
community by changing its operating channel until there is greater
certainty, as determined by the appeal, that to do so would serve the
public interest. Even if most third-party appeals are meritless,
[[Page 43469]]
the commenters assert, the benefits of preventing disruptive and
involuntary changes that will have to be undone upon the resolution of
even that small percentage of appeals that are merited outweigh the
expense or inconvenience caused by the rule.
7. Commenters that favor repealing the rule respond that its
primary purpose would still be promoted even if it were eliminated:
Affected parties would still have the opportunity to comment before a
directed change in their facilities becomes effective. Further, they
contend, the substantive merits of an appeal would not be affected by
the absence of an automatic stay.
8. Discussion. The record before us confirms the Notice's
observation that the automatic stay rule has regularly resulted in
delay in the commencement of construction and the provision of expanded
service to the public. Not even those commenters who oppose a change in
the rule dispute the assertion that the vast majority of petitions for
reconsideration are ultimately denied. We believe that the many
apparently meritless petitions for reconsideration the rule appears to
have encouraged have imposed a substantial and unwarranted cost on
local communities, individual broadcasters, and the Commission itself.
First, significant populations are denied the advantages of improved
service for long periods of time. Second, the inability to effect the
authorized change can cause stations to go dark or not be constructed
at all, harming both broadcasters and the public. Third, as both video
and audio technologies evolve, television and radio broadcasters must
be able to adapt as quickly as possible to changes in their competitive
environments. The delays inherent in an automatic stay procedure
necessarily constrain broadcasters' flexibility in this regard.
Finally, by facilitating meritless petitions for reconsideration, the
rule needlessly diverts resources that otherwise would be available to
the Commission for the performance of other necessary functions.
9. We conclude that any costs imposed by eliminating the stay
provision are modest or can be significantly moderated by other, less
restrictive processing approaches. Specifically, we note that
permittees and licensees affected by allotment changes who would no
longer be entitled to the protection of an automatic stay would
nonetheless continue to have substantial procedural protections under
the Commission's rules. Because Section 1.420(f) will continue to
require that petitions for reconsideration be served on any licensee or
permittee whose authorization could be modified, the rights of these
parties to be affirmatively informed of actions potentially affecting
their interests will continue to be protected. Moreover, any licensees
or permittees whose authorizations would actually be modified to
accommodate an underlying allotment change would continue to be
afforded the full procedural benefits of a show cause proceeding in
which they might object to the required frequency change. We also
retain the authority to impose a stay in individual cases and we will
be particularly cognizant of requests for stay filed by any party whose
authorization would be changed involuntarily. Finally, we note that
elimination of the automatic stay provision will not prejudice final
resolution of any challenges to the underlying staff decision.
10. As a result of the action we take here, parties requesting
amendment of the Table of Allotments may, upon release of an initial
staff decision granting their request, proceed to implement the change
through applications and construction notwithstanding the filing of
petitions for reconsideration of the initial decision. We emphasize, of
course, that parties electing to proceed before the allotment decision
is final do so at their own risk and must bear the costs of any
subsequent action reversing or revising the allotment decision.
Pending Cases
11. Comments. Most parties that address the issue assert that the
elimination of the automatic stay rule should be applied to all
existing cases, to expedite service to the public. They note that, just
as with prospective cases, no prejudice will occur to parties seeking
reconsideration, because the Commission will still consider each case
on its merits. Also, they state, the Commission can impose stays on a
case-by-case basis if necessary. On the other hand, one commenter
argues that application of the rule change to pending cases would
impose increased inequity on licensees and their communities, and it
would needlessly disrupt cases in progress.
12. Discussion. Section 1.420(f) of the Commission's rules, 47 CFR
Sec. 1.420(f), involves matters of Commission practice and procedure.
The change we adopt today will not affect our substantive analysis of
any pending petition for reconsideration or application for review.
Changes in procedural rules may be applied in adjudications arising
before their enactment without raising concerns about
retroactivity.3 Moreover, in repealing the automatic stay rule, we
are concluding that such action will not cause undue inequity or
disruption to future cases. All parties will continue to have their
rights of appeal to the Commission undisturbed. Further, we have no
indication in the record that any parties will endure any unusual
hardships by application of the rule to pending cases. Consequently, we
see no reason to retain and enforce a rule that we have determined does
not serve the public interest. Accordingly, we shall lift the stay with
respect to any petitions for reconsideration or applications for review
pending as of the effective date of this Report and Order.
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\3\ See Landgraf v. USI Film Products, 114 S.Ct. 1483, 1502
(1994), citing Ex parte Collett, 337 U.S. 55, 71, (1949).
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III. Administrative matters
Paperwork Reduction Act of 1995 Analysis
13. The decision herein has been analyzed with respect to the
Paperwork Reduction Act of 1995, Public Law No. 104-13, and found to
impose or propose no modified information collection requirement on the
public.
Regulatory Flexibility Statement
14. As required by Section 603 of the Regulatory Flexibility Act, 5
USC 603 (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was
incorporated in the NPRM in this proceeding. The Commission sought
written public comments on the proposals in the NPRM, including on the
IRFA. The Commission's Final Regulatory Flexibility Analysis in this
Report and Order is as follows:
A. Need for and objectives of action. The Commission's Rules
provide for an automatic stay, upon the filing of a petition for
reconsideration, of any Commission order modifying an authorization to
provide for operation on a different FM or TV channel, which is
effected by way of an allotment rule making proceeding. The automatic
stay provisions for certain reconsideration petitions in these
proceedings has created an incentive for the filing of petitions for
reconsideration that are largely without merit, thereby delaying the
provision of expanded service to the public. In order to reduce that
delay, the Commission is repealing the rule.
B. Significant issues raised by the public in response to the
initial analysis. No comments were received specifically in response to
the Initial Regulatory Flexibility Analysis contained in NPRM. However,
commenters generally addressed the
[[Page 43470]]
effects of the automatic stay rule on FM and TV licensees, including
small businesses. Several commenters argued that the delay associated
with the automatic stay can prevent licensees from effecting authorized
improvements to their facilities, and they accordingly supported the
rule change. A few commenters contended that the current delay protects
third-party licensees from incurring the costs associated with
needlessly modifying and remodifying their stations.
C. Description and number of small entities to which the rule will
apply. (1) Definition of a ``small business.'' Under the Regulatory
Flexibility Act, small entities may include small organizations, small
businesses, and small governmental jurisdictions. 5 U.S.C. 601(6). The
Regulatory Flexibility Act, 5 U.S.C. 601(3) generally defines the term
``small business'' as having the same meaning as the term ``small
business concern'' under the Small Business Act, 15 U.S.C. 632. A small
business concern is one which: (1) Is independently owned and operated;
(2) is not dominant in its field of operation; and (3) satisfies any
additional criteria established by the Small Business Administration
(``SBA''). Id. According to the SBA's regulations, entities engaged in
radio or television broadcasting may have a maximum of $5.0 million or
$10.5 million, respectively, in annual receipts in order to qualify as
a small business concern.4 13 CFR 121.201 This standard also
applies in determining whether an entity is a small business for
purposes of the Regulatory Flexibility Act.
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\4\ This revenue cap appears to apply to noncommercial
educational television stations, as well as to commercial television
stations. See Executive Office of the President, Office of
Management and Budget, Standard Industrial Classification Manual
(1987), at 283, which describes ``Television Broadcasting Stations
(SIC Code 4833) as:
Establishments primarily engaged in broadcasting visual programs
by television to the public, except cable and other pay television
services. Included in this industry are commercial, religious,
educational and other television stations. Also included here are
establishments primarily engaged in television broadcasting and
which produce taped television program materials.
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Pursuant to 5 U.S.C. 601(3), the statutory definition of a small
business applies ``unless an agency after consultation with the Office
of Advocacy of the Small Business Administration and after opportunity
for public comment, establishes one or more definitions of such term
which are appropriate to the activities of the agency and publishes
such definition(s) in the Federal Register.'' While we tentatively
believe that the foregoing definition of ``small business'' greatly
overstates the number of radio and television broadcast stations that
are small businesses and is not suitable for purposes of determining
the impact of the new rules on small business, we did not propose an
alternative definition in the IRFA.5
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\5\ We have pending proceedings seeking comment on the
definition of and data relating to small businesses. In our Notice
of Inquiry in GN Docket No. 96-113 (In the Matter of Section 257
Proceeding to Identify and Eliminate Market Entry Barriers for Small
Businesses), FCC 96-216, released May 21, 1996, we requested
commenters to provide profile data about small telecommunications
businesses in particular services, including television, and the
market entry barriers they encounter, and we also sought comment as
to how to define small businesses for purposes of implementing
Section 257 of the Telecommunications Act of 1996, which requires us
to identify market entry barriers and to prescribe regulations to
eliminate those barriers. The comment and reply comment deadlines in
that proceeding have not yet elapsed. Additionally, in our Order and
Notice of Proposed Rule Making in MM Docket No. 96-16 (In the Matter
of Streamlining Broadcast EEO Rule and Policies, Vacating the EEO
Forfeiture Policy Statement and Amending Section 1.80 of the
Commission's Rules to Include EEO Forfeiture Guidelines), 11 FCC Rcd
5154 (1996), we invited comment as to whether relief should be
afforded to stations: (1) Based on small staff and what size staff
would be considered sufficient for relief, e.g., 10 or fewer full-
time employees; (2) based on operation in a small market; or (3)
based on operation in a market with a small minority work force. We
have not concluded the foregoing rule making.
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Accordingly, for purposes of this Report and Order, we utilize the
SBA's definition in determining the number of small businesses to which
the rules apply, but we reserve the right to adopt a more suitable
definition of ``small business'' as applied to radio and television
broadcast stations and to consider further the issue of the number of
small entities that are radio and television broadcasters in the
future. Further, in this RFA, we will identify the different classes of
small radio and television stations that may be impacted by the rules
adopted in this Report and Order.
(2) Issues in applying the definition of a ``small business''. As
discussed below, we could not precisely apply the foregoing definition
of ``small business'' in developing our estimates of the number of
small entities to which the rules will apply. Our estimates reflect our
best judgments based on the data available to us.
An element of the definition of ``small business'' is that the
entity not be dominant in its field of operation. We were unable at
this time to define or quantify the criteria that would establish
whether a specific television or radio station is dominant in its field
of operation. Accordingly, the following estimates of small businesses
to which the new rules will apply do not exclude any television or
radio station from the definition of a small business on this basis and
are therefore overinclusive to that extent. An additional element of
the definition of ``small business'' is that the entity must be
independently owned and operated. We attempted to factor in this
element by looking at revenue statistics for owners of television and
radio stations. However, as discussed further below, we could not fully
apply this criterion, and our estimates of small businesses to which
the rules may apply may be overinclusive to this extent.
With respect to applying the revenue cap, the SBA has defined
``annual receipts'' specifically in 13 CFR 121.104, and its
calculations include an averaging process. We do not currently require
submission of financial data from licensees that we could use to apply
the SBA's definition of a small business. Thus, for purposes of
estimating the number of small entities to which the rules apply, we
are limited to considering the revenue data that are publicly
available, and the revenue data on which we rely may not correspond
completely with the SBA definition of annual receipts.
Under SBA criteria for determining annual receipts, if a concern
has acquired an affiliate or been acquired as an affiliate during the
applicable averaging period for determining annual receipts, the annual
receipts in determining size status include the receipts of both firms.
13 CFR 121.104(d)(1). The SBA defines affiliation in 13 CFR 121.103.
While the Commission refers to an affiliate generally as a station
affiliated with a network, the SBA's definition of affiliate is
analogous to our attribution rules. Generally, under the SBA's
definition, concerns are affiliates of each other when one concern
controls or has the power to control the other, or a third party or
parties controls or has the power to control both. 13 CFR
121.103(a)(1). The SBA considers factors such as ownership, management,
previous relationships with or ties to another concern, and contractual
relationships, in determining whether affiliation exists. 13 CFR
121.103(a)(2). Instead of making an independent determination of
whether radio and television stations were affiliated based on SBA's
definitions, we relied on the data bases available to us to afford us
that information.
(3) Estimates based on BIA data. We have performed a study based on
the data contained in the BIA Publications, Inc. Master Access
Television Analyzer Database, which lists a total of 1,141 full-power
commercial television stations. We have excluded from our calculations
Low Power Television
[[Page 43471]]
(LPTV) Stations and translator stations, two secondary services that
have traditionally not had standing in allotment proceedings, which are
the subject of this rule. It should be noted that the percentage
figures derived from the data base may be underinclusive because the
data base does not list revenue estimates for noncommercial educational
stations, and these are therefore excluded from our calculations based
on the data base. Non-commercial stations also have a diminished
regulatory burden by virtue of the rule change adopted in this Report
and Order. The data indicate that, based on 1995 revenue estimates, 440
full-power commercial television stations had an estimated revenue of
10.5 million dollars or less. That represents 54 percent of commercial
television stations with revenue estimates listed in the BIA program.
The data base does not list estimated revenues for 331 stations. Using
an extreme scenario, if those 331 commercial stations for which no
revenue is listed are counted as small stations, there would be a total
of 771 stations with an estimated revenue of 10.5 million dollars or
less, representing approximately 68 percent of the 1,141 commercial
television stations listed in the BIA data base.
Alternatively, if we look at owners of commercial television
stations as listed in the BIA data base, there are a total of 488
owners. The data base lists estimated revenues for 60 percent of these
owners, or 295. Of these 295 owners, 158 or 54 percent had annual
revenues of 10.5 million dollars or less. Using an extreme scenario, if
the 193 owners for which revenue is not listed are assumed to be small,
the total of small entities would constitute 72 percent of owners.
In summary, based on the foregoing extreme analysis based on the
data in the BIA data base, we estimate that as many as approximately
771 commercial television stations (about 68 percent of all commercial
televisions stations) could be classified as small entities. As we
noted above, these estimates are based on a definition that we believe
greatly overstates the number of television broadcasters that are small
businesses. Further, it should be noted that under the SBA's
definitions, revenues of affiliated businesses that are not television
stations should be aggregated with the television station revenues in
determining whether a concern is small. The estimates overstate the
number of small entities since the revenue figures on which they are
based do not include or aggregate such revenues from non-television
affiliated companies.
There are approximately 10,250 commercial radio broadcasting
stations and 1,810 noncommercial radio broadcast stations of all sizes
in the nation, with approximately 5,200 different commercial owners.
For the same reasons as above, the exact number of small radio
broadcasting entities to which the elimination of the rule will apply
is unknown. Based on 1995 revenue estimates, the BIA Publications, Inc.
MasterAccess Analyzer Database data base indicates that 3,314
commercial radio stations had an estimated revenue of $5.0 million or
less. That represents approximately 90 percent of commercial radio
stations with revenue estimates listed in the BIA program. The data
base does not list estimated revenue for 6,571 stations. Using the most
extreme scenario, if those 6,571 stations for which no revenue
estimates is listed are counted as small stations, there would be a
total of 9,885 stations with an estimated revenue of $5.0 million
dollars or less, representing approximately 96 percent of the 10,257
commercial radio stations listed in the BIA data base.
Alternatively, if we look at owners of commercial radio stations as
listed in the BIA data base, there are a total of 5,207 owners. The
data base lists estimated revenues for 29 percent of these owners, or
1,532. Of these 1,532 owners, 1,344 or 88 percent had annual revenue of
less than $5.0 million. Using the most extreme scenario, if the 3,675
owners for which revenue estimates are not listed are assumed to be
small businesses, then the total of small entities would constitute 96
percent of commercial radio station owners. Further, many noncommercial
radio broadcasters are considered to be small entities. Thus, a large
number of owners of radio broadcast facilities of several types
(commercial AM, commercial FM, and noncommercial FM stations) could
benefit from the rule amendment herein adopted.
(4) Alternative classification of small stations. An alternative
way to classify small radio and television stations is by the number of
employees. The Commission currently applies a standard based on the
number of employees in administering its Equal Employment Opportunity
Rule (EEO) for broadcasting.\6\ Thus, radio or television stations with
fewer than five full-time employees are exempted from certain EEO
reporting and recordkeeping requirements.\7\ We estimate that the total
number of broadcast stations with 4 or fewer employees is approximately
4,239.\8\
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\6\ The Commission's definition of a small broadcast station for
purposes of applying its EEO rule was adopted prior to the
requirement of approval by the Small Business Administration
pursuant to Section 3(a) of the Small Business Act, 15 U.S.C.
632(a), as amended by Section 222 of the Small Business Credit and
Business Opportunity Enhancement Act of 1992, Pub. L. 102-366,
section 222(b)(1), 106 Stat. 999 (1992), as further amended by the
Small Business Administration Reauthorization and Amendments Act of
1994, Pub. L. 103-403, section 301, 108 Stat. 4187 (1994). However,
this definition was adopted after the public notice and the
opportunity for comment. See Report and Order in Docket No. 18244,
23 FCC 2d 430 (1970).
\7\ See, e.g., 47 C.F.R. 73.3612 (Requirement to file annual
employment reports on Form 395 applies to licensees with five or
more full-time employees); First Report and Order in Docket No.
21474 (In the Matter of Amendment of Broadcast Equal Employment
Opportunity Rules and FCC Form 395), 70 FCC 2d 1466 (1979). The
Commission is currently considering how to decrease the
administrative burdens imposed by the EEO rule on small stations
while maintaining the effectiveness of our broadcast EEO
enforcement. Order and Notice of Proposed Rule Making in MM Docket
No. 96-16 (In the Matter of Streamlining Broadcast EEO Rule and
Policies, Vacating the EEO Forfeiture Policy Statement and Amending
Section 1.80 of the Commission's Rules to Include EEO Forfeiture
Guidelines), 11 FCC Rcd 5154 (1996). One option under consideration
is whether to define a small station for purposes of affording such
relief as one with ten or fewer full-time employees. Id. at para.
21.
\8\ Compilation of 1994 Broadcast Station Annual Employment
Reports (FCC form 395B), Equal Opportunity Employment Branch, Mass
Media Bureau, FCC.
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D. Projected compliance requirements of the rule. This Report and
Order imposes no new reporting, recordkeeping, or other compliance
requirements.
E. Significant alternatives considered minimizing the economic
impact on small entities and consistent with the stated objectives. The
action taken does not impose additional burdens on small entities and,
as discussed in detail at paragraphs 9-10 of the Report and Order, will
in fact have a positive economic impact, as entities, including small
entities, will be able to increase their service more expeditiously and
with fewer legal challenges. A small entity opposing Commission action
by petitioning for reconsideration will still be able to seek a stay in
an individual case, based on the merits of that case. In those cases
where a third party is required to move involuntarily, all costs are
borne by the party initiating the request for changes to the allotment
table. This should adequately address the concerns of commenters
opposed to this rule change.
F. Report to Congress. The Secretary shall send a copy of this
Final Regulatory Flexibility Analysis along with this Report and Order
in a report to Congress pursuant to Section 251 of
[[Page 43472]]
the Small Business Regulatory Enforcement Fairness Act of 1996,
codified at 5 U.S.C. 801(a)(1)(A). A copy of this RFA will also be
published in the Federal Register.
Ordering Clauses
15. Accordingly, it is ordered That Sec. 1.420(f) of the
Commission's Rules, 47 CFR 1.420(f), is amended as set forth below.
16. It is further ordered That any stay granted pursuant to Section
1.420(f) of the Commission's Rules, 47 CFR Sec. 1.420(f), that is in
effect on the effective date of this Report and Order is lifted.
17. It is further ordered That, pursuant to the Contract with
America Advancement Act of 1996, the amendment set forth below will
become effective September 23, 1996.
18. It is further ordered That this proceeding is terminated.
19. Additional Information. For additional information regarding
this proceeding, please contact Paul Gordon, Mass Media Bureau, Policy
and Rules Division, (202) 418-2130.
List of Subjects in 47 CFR Part 1
Administrative practice and procedure, Radio, Telecommunications,
Television.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
Rule Changes
Part 1 of Title 47 of the Code of Federal Regulations is amended as
follows:
PART 1--PRACTICE AND PROCEDURE
1. The authority citation for Part 1 continues to read as follows:
Authority: 47 U.S.C. 151, 154, 303, and 309(j), unless otherwise
noted.
2. Section 1.420 is amended by revising paragraph (f) to read as
follows:
Sec. 1.420 Additional procedures in proceedings for amendment of the
FM or TV Tables of Allotments.
* * * * *
(f) Petitions for reconsideration and responsive pleadings shall be
served on parties to the proceeding and on any licensee or permittee
whose authorization may be modified to specify operation on a different
channel, and shall be accompanied by a certificate of service.
* * * * *
[FR Doc. 96-21444 Filed 8-22-96; 8:45 am]
BILLING CODE 6712-01-P
Complete official Federal Register PDF
FR Doc. 96-21421 Public Affairs Policies and Procedures
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Page 43466]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21421]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
Department of the Air Force
32 CFR Part 837
Public Affairs Policies and Procedures
AGENCY: Department of the Air Force, Department of Defense.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of the Air Force is removing the regulation on
public affairs policies and procedures. This rule is removed because it
has limited applicability to the general public. This action is the
result of departmental review. The intended effect is to ensure that
only rules which substantially affect the public are maintained in the
Air Force portion of the Code of Federal Regulations.
EFFECTIVE DATE: August 23, 1996.
FOR FURTHER INFORMATION CONTACT: Ms. Patsy J. Conner, Air Force Federal
Register Liaison Officer, SAF/AAX, 1720 Air Force Pentagon, Washington,
DC 20330-1720, telephone (703) 697-4191.
SUPPLEMENTARY INFORMATION:
List of Subjects in 32 CFR Part 837
Motion pictures, News media.
PART 837--[REMOVED]
Accordingly under the authority 10 U.S.C. 8013, 32 CFR chapter VII
is amended by removing part 837.
Patsy J. Conner,
Air Force Federal Register Liaison Officer.
[FR Doc. 96-21421 Filed 8-22-96; 8:45 am]
BILLING CODE 3910-01-W
Complete official Federal Register PDF
FR Doc. 96-21412 Supplemental Standards of Ethical Conduct for Employees of the Federal Energy Regulatory Commission
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43411-43415]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21412]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 61, No. 165 / Friday, August 23, 1996 / Rules
and Regulations
[[Page 43411]]
DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
5 CFR Chapter XXIV
18 CFR Part 3c
RIN 3209-AA15
[Docket No. RM95-1-000; Order No. 589]
Supplemental Standards of Ethical Conduct for Employees of the
Federal Energy Regulatory Commission
Issued August 16, 1996.
AGENCY: Federal Energy Regulatory Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Commission, with the concurrence of the Office of
Government Ethics (OGE), is issuing regulations for employees of the
Commission, including members of the Commission, which supplement the
Standards of Ethical Conduct for Employees of the Executive Branch
issued by OGE. The supplemental regulations are necessary and
appropriate in view of the particular needs of the Commission as a
regulatory body with quasi-judicial functions. The supplemental
regulations establish prohibitions on holding securities of certain
companies substantially affected by Commission regulation and require
Commission employees to seek approval from the Designated Agency Ethics
Officer of the Commission (DAEO) prior to engaging in certain outside
activities. The supplemental regulations also require employees to
document recusals in writing. The Commission is also repealing its
existing standards of conduct and inserting in their place a cross-
reference to other ethics regulations, and a provision establishing
standards of cooperation with the Inspector General.
EFFECTIVE DATE: These regulations take effect August 23, 1996.
FOR FURTHER INFORMATION CONTACT: Elizabeth Arnold, Office of the
General Counsel, General and Administrative Law, Room 91-18, Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, D.C.
20426; telephone 202-208-0457.
SUPPLEMENTARY INFORMATION:
Availability of Documents
In addition to publishing the full text of this document in the
Federal Register, the Commission also provides all interested persons
an opportunity to inspect or copy the contents of this document during
normal business hours in the Public Reference Room at 888 First Street,
NE., Washington, D.C. 20426.
The Commission Issuance Posting System (CIPS), an electronic
bulletin board service, provides access to the texts of formal
documents issued by the Commission. CIPS is available at no charge to
the user and may be accessed using a personal computer with a modem by
dialing (202) 208-1397 if dialing locally or 1-800-856-3920 if dialing
long distance. To access CIPS, set your communications software to
19200, 14400, 12000, 9600, 7200, 4800, 2400, or 1200 bps, full duplex,
no parity, 8 data bits, and 1 stop bit. The full text of this document
will be available on CIPS indefinitely in ASCII and in WordPerfect 5.1
format for one year. The complete text on diskette in WordPerfect
format may also be purchased from the Commission's copy contractor, La
Dorn Systems Corporation, also located in the Public Reference Room at
888 First Street NE., Washington, D.C. 20426.
The Commission's bulletin board system also can be accessed through
the FedWorld system directly by modem or through the Internet. To
access the FedWorld system by modem:
Dial (703) 321-3339 and logon to the FedWorld system.
After logging on, type: /go FERC
To access the FedWorld system through the Internet:
Telnet to: fedworld.gov
Select the option: [1] FedWorld
Logon to the FedWorld System
Type: /go FERC
Or:
Point your Web Browser to: http://www.fedworld.gov
Scroll down the page to select FedWorld Telnet Site
Select the option: [1] FedWorld
Logon to the FedWorld system
Type: /go FERC
I. Background
On August 7, 1992, OGE published new Standards of Ethical Conduct
for Employees of the Executive Branch (Standards). See 57 FR 35006-
35067, as corrected at 57 FR 48557, 57 FR 52583, and 60 FR 51667, with
additional grace period extensions at 59 FR 4779-4780, 60 FR 6390-6391,
and 60 FR 66857-66858. Codified at 5 CFR part 2635, the new Standards
became effective on February 3, 1993, superseding most agency-specific
standards of conduct on that date.
In February 1993, the Commission repealed portions of its standards
of conduct regulations that were superseded by OGE's Standards. 58 FR
7486. The repealed sections included most of the Commission's conflict
of interest and ethical conduct regulations, and provisions relating to
the reporting of outside employment and financial interests. The
Commission retained for a temporary OGE-approved period its preexisting
prohibition against the ownership or purchase of the securities of
jurisdictional companies. The Commission also retained on the basis of
independent statutory authority provisions barring the disclosure of
audit information and information relating to the nature and timing of
future Commission action.
With the concurrence of OGE, agencies are authorized to publish
agency-specific supplemental regulations that are necessary to
implement properly their respective ethics programs. The Commission,
with OGE's concurrence, has determined that the following supplemental
regulations, to be codified in part 3401 of new chapter XXIV of 5 CFR,
are necessary and appropriate to the successful implementation of the
Commission's ethics program. By this rulemaking, the Commission is also
revising its own regulations at 18 CFR part 3c to delete the conflicts
of interest provision being superseded by the new supplemental
regulations and to establish standards of cooperation with the
Inspector General.
The Commission is issuing these regulations pursuant to its
authority as an independent regulatory body within the Department of
Energy (DOE). The
[[Page 43412]]
Energy Department published its own supplemental regulations in the
Federal Register on July 5, 1996, which are not applicable to
Commission employees. See 61 FR 35085-35088. The Commission has the
statutory responsibility to manage its own operations, including the
supervision of its staff. Its officers and employees, in the
performance of their functions, are not responsible or subject to the
supervision of any officer or employee of any other part of DOE. 42
U.S.C. 7171. The Commission is authorized to prescribe rules,
regulations and policy statements, including such procedural and
administrative rules as are necessary to the exercise of its functions,
and is issuing these regulations, with the concurrence of OGE, pursuant
to its authority to do so, independent of DOE. 42 U.S.C. 7171(f) and
7172(h).
II. Analysis of the Regulations
Section 3401.101 General
Section 3401.101 explains that the regulations contained in the
rule apply to all Commission employees, which include members of the
Commission, and are supplemental to the Standards. It also notes that
employees are required to comply with 5 CFR part 2635, the executive
branch financial disclosure regulations at 5 CFR part 2634, additional
rules of conduct published in 5 CFR part 735, and the Commission's
Standards of Conduct at 18 CFR part 3c.
Section 3401.102 Prohibited Financial Interests
The Standards at 5 CFR 2635.403(a), provide that individual
agencies may adopt supplemental regulations prohibiting or restricting
employees from acquiring or holding certain financial interests or
classes of financial interests if the acquisition or holding would
cause a reasonable person to question the impartiality with which the
agency's programs are administered. Where it is necessary to the
efficiency of the service, such prohibitions may be extended to
employees' spouses and minor children.
Under 18 CFR part 3c, the Commission has long prohibited employees,
their spouses and minor children, from owning the securities of certain
entities directly or indirectly subject to the jurisdiction of the
Commission. The Commission has determined that a supplemental
regulation is needed to retain the general prohibition against
financial holdings in those companies that are substantially affected
by Commission regulation in order to protect the integrity of the
Commission's programs and processes. New section 3401.102 is generally
similar to the Commission's prior prohibition and identifies the types
of entities the securities of which employees are prohibited from
holding or acquiring. The restrictions also will help to maintain
public confidence that sensitive information relating to agency
operations is not misused for private gain and will help accomplish the
Commission's mission by avoiding widespread disqualification of
employees from the performance of their official duties.
The Commission has determined that application of the securities
restrictions in Sec. 3401.102 to spouses and minor children is
necessary to avoid interference with the ability of employees to do
their jobs, which must be performed with impartiality, and to enable
the Commission to carry out its mission effectively. As evidence by
provisions long included in 18 CFR part 3c, the Commission believes it
is important to the success of its mission for regulated entities and
others affected by agency decisions to have this additional degree of
assurance that agency decisions are not influenced by considerations of
personal gain on the part of Commission personnel.
The DAEO will compile annually a Prohibited Securities List (PSL)
cataloguing the financial interests that employees may not own. The PSL
is intended to serve as a reference source to assist employees in
identifying prohibited interests. Whether or not a holding is included
in the PSL is not conclusive as to its status as a prohibited holding.
Section 3401.102(b) gives the DAEO authority to grant a written
waiver of the application of Sec. 3401.102(a) based upon a
determination that the waiver is not inconsistent with law and the
executive branch-wide Standards and meets the waiver standard
established in Sec. 3401.102(b). An employee may be required under the
waiver to disqualify himself or herself from a particular matter or
take other appropriate action.
The waiver provision is intended, in appropriate cases, to ease the
burden that the prohibited financial interests section may impose on
the private lives of Commission employees, while ensuring that
employees do not engage in actions that may interfere with the
objective and impartial execution of their official duties or raise
questions about possible misuse of their official positions.
Section 3401.103 Procedures for Accomplishing Disqualification
Section 3401.103 requires that where employees disqualify
themselves from a particular matter before the Commission, whether
because of a conflicting financial interest, a question of the
employee's impartiality, or because the employee is seeking employment
with a person who could be affected by the performance of the
employee's duties, written notification of the recusal must be provided
to a supervisor and the ethics officer. Under the executive branch-wide
Standards, employees who become aware of the need to disqualify
themselves from participation in a particular matter to which they have
been assigned should notify the person responsible for the assignment.
An employee is not required under those Standards to file a written
disqualification statement unless asked by an agency ethics official or
the person responsible for the assignment to file a written
disqualification statement. 5 CFR 2635.402(c), 2635.502(e), and
263.604.
The Commission has determined that where a disqualification is
necessary, a written record of the recusal is required to protect both
the disqualified employee and the Commission. A written recusal
statement avoids possible questions about the scope and terms of the
recusal and ensures that the agency will be able to provide adequate
staffing for the matter from which the employee is recused. The
Commission has in the past requested written notifications of recusal
for members of the staff. Accordingly, a written notification
requirement is being included in these supplemental regulations. The
written notification provision contained in Sec. 3401.103 is not
applicable to members of the Commission, who have no supervisors, and
who indicate their nonparticipation in public matters on the public
record. In practice, such matters comprise the vast majority of items
that came before the Commission.
The supplemental rule merely establishes disqualification
procedures when recusal is otherwise appropriate. It establishes no
independent standards as to when recusal is necessary. Moreover, it is
not the Commission's purpose to impose a technical requirement that
would result in disciplining an employee for failure to provide written
notice by some arbitrary deadline. Thus, the notice requirement imposed
by this regulation is phrased to give an employee flexibility in
determining precisely when to give notice of disqualification from a
matter
[[Page 43413]]
to which the employee has been assigned. Notice is to be given when the
employee becomes aware of the need to disqualify himself from
participation in the matter. In no way does the notice requirement
affect the employee's obligation not to participate in the matter.
Section 3401.104 Prior Approval for Outside Employment
Under 5 CFR 2635.803, an agency that determines it is necessary or
desirable for the purpose of administering its ethics program may, by
supplemental regulation, require its employees to obtain written
approval before engaging in outside employment. The Commission's
conduct regulations at 18 CFR part 3c, prior to the repeal of portions
of the regulations following the effective date of the Standards,
required prior notification of all proposed outside employment, and
was, in essence a prior approval requirement. The Commission has
determined to reinstitute a narrower version of the advance
notification requirement in the form of a prior approval requirement.
The Commission does not believe there is a need for a general
requirement of prior approval for all outside employment. However, in
order to protect the interests of the Commission by ensuring that
employees are not engaged in activities that are prohibited by statute
or Federal regulation, including 5 CFR part 2635, the Commission has
determined that it is necessary to the administration of its ethics
programs to require Commission employees to obtain written approval
before accepting outside employment with a prohibited source.
Therefore, Sec. 3401.104(a) of this supplemental rule requires that a
FERC employee who wishes to engage in outside employment with a
prohibited source must obtain prior written approval from the DAEO
through normal supervisory channels before engaging in such outside
employment. Prohibited sources include, for example, entities regulated
by the Commission, parties to Commission proceedings, and contractors
doing business or seeking to do business with the Commission.
This prior approval requirement applies to outside employment
concurrent with Commission employment. The requirement does not apply
to employment that will be engaged in after an employee terminates
Federal service. Standards governing post-employment conflicts of
interest are found at 18 U.S.C. 207 and 5 CFR part 2641. Nor will the
prior approval requirement apply to negotiations for employment. The
standards governing such negotiations are at 18 U.S.C. 208(a) and
subpart F of 5 CFR part 2635. The prior approval requirement does not
apply to special Government employees.
To ensure that Sec. 3401.104 is not itself construed as authority
to deny permission to engage in outside employment, paragraph (b)
states that approval shall be granted unless a determination is made
that the outside employment is expected to involve conduct prohibited
by statutes or Federal regulation, including 5 CFR part 2635.
At Sec. 3401.104(c), ``employment'' is broadly defined to cover any
form of compensated non-Federal employment or business relationship or
activity involving the provision of personal service by the employee.
``Compensation'' is defined to exclude actual and necessary expenses
incurred by the employee in connection with the outside activity.
III. Repeal and Revision of the Commission's Standards of Conduct for
Employees
The final rule repeals those portions of the regulations at 18 CFR
3c governing Commission employees' responsibilities and conduct that
were preserved pending issuance of the final rule.
These repeals leave in 18 CFR part 3c and redesignate those
provisions that the Commission has authority to issue independent of 5
CFR part 2635. The prohibition against the disclosure of audit
materials merely summarizes statutory provisions in section 301(b) of
the Federal Power Act (16 U.S.C. 825(c)) and section 8(b) of the
Natural Gas Act (15 U.S.C. 717g). The requirement that Commission
employees must treat information about proposed Commission action as
confidential is a designation of covered information as confidential
that is not inconsistent with 5 CFR part 2635 and which the agency is
free to promulgate apart from the supplemental regulations. The
provision is founded on the Commission's statutory authority to adopt
such procedural and administrative rules as are necessary to exercise
its functions. 42 U.S.C. 7171(f). These provisions are being
redesignated as Sec. 3c.2 and will follow a new Sec. 3c.1 which
provides a cross-reference to ethics and other conduct-related
regulations.
Section 3c.3 assists employees in adhering to the general principle
of ethical conduct at 5 CFR 2635.101(b)(11), under which an employee
shall disclose waste, fraud, abuse, and corruption to appropriate
authorities. It identifies the Inspector General as an authority to
which it would be appropriate for an employee to disclose waste, fraud,
abuse and corruption, and requires employees to cooperate with official
inquiries by the Inspector General. 5 U.S.C. app., sections 2 and 6.
This section is adopted at the request of the Inspector General and
replaces a similar provision formerly applicable both to DOE and the
Commission. 10 CFR 1010.217.
The separate conflict of interest provisions applicable to
``supervisory employees'' of DOE and the Commission under Title VI of
the Department of Energy Organization Act have been repealed by
Congress. See National Defense Authorization Act for Fiscal Year 1996,
Public Law 104-106, section 4304(b)(6), 110 Stat. 642. The implementing
DOE regulations, which were applicable to the Commission, have also
been repealed. See 61 FR 5085. Accordingly, those provisions are no
longer in effect and are not being included in 18 CFR part 3c.
IV. Matters of Regulatory Procedure
Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980 (RFA) (5 U.S.C. 601-612)
generally requires a description and analysis of final rules that will
have significant economic impact on a substantial number of small
entities. The Commission certifies that, pursuant to section 605(b) of
the RFA, this rule will not have a significant economic impact on a
substantial number of small entities. This is a procedural rule
affecting Federal employees and their immediate families. It does not
impact small entities as defined in the RFA.
Environmental Impact
The Commission concludes that issuance of this rule would not
represent a major Federal action having a significant adverse effect on
the human environment under the Commission regulations implementing the
National Environmental Policy Act (see 18 CFR part 380). This rule is
procedural in nature and therefore falls within the categorical
exemptions provided in the Commission's regulations. Consequently,
neither an environmental impact statement nor an environmental
assessment is required. See 18 CFR 380.4(a)(1).
Paperwork Reduction Act Statement
The Paperwork Reduction Act of 1995 (Pub. L. 104-13, 109 Stat. 163
(1995)) and the Office of Management and Budget's (OMB's) regulations
(5 CFR part 1320) require that OMB approve certain information
collection
[[Page 43414]]
requirements imposed by agency rule. However, this rule contains no
information collection requirements and therefore is not subject to OMB
approval.
Administrative Procedure Act
The Administrative Procedure Act (APA) (5 U.S.C. 551-559) requires
rulemakings to be published in the Federal Register. The APA generally
mandates that an opportunity for comment be provided when an agency
promulgates regulations. Notice and comment are not required, however,
where a rule relates to agency personnel or agency organization,
procedure or practice or when the ``agency for good cause finds that
notice and public procedure thereon are impracticable, unnecessary, or
contrary to the public interest'' (5 U.S.C. 553 (a)(2) and (b)(3)).
The Commission finds that notice and comment are unnecessary for
this rulemaking. The rulemaking concerns agency personnel and agency
organization, procedure, and practice, and for the most part, restates
provisions previously contained in earlier Commission ethics rules or
internal administrative requirements or DOE regulations applicable to
FERC. The Commission, therefore, finds good cause in accordance with 5
U.S.C. 553(d)(3) to make these rules effective upon publication in the
Federal Register.
Congressional Notification
The Small Business Regulatory Enforcement Fairness Act of 1996
requires agencies to report to Congress on the promulgation of certain
final rules prior to their effective dates. 5 U.S.C. 801. That
reporting requirement does not apply to this final rule because it
falls within a statutory exception for rules relating to agency
management or personnel. 5 U.S.C. 804(3)(B).
List of Subjects
5 CFR Part 3401
Conflict of interests, Government employees, Standards of conduct.
18 CFR Part 3c
Government employees, Standards of conduct.
Adopted: August 9, 1996.
By the Commission.
Lois D. Cashell,
Secretary, Federal Energy Regulatory Commission.
Approved: August 15, 1996.
Marilyn L. Glynn,
Deputy General Counsel, Office of Government Ethics.
For the reasons set forth in the preamble, the Commission, with the
concurrence of the Office of Government Ethics, is amending title 5 and
title 18, chapter I of the Code of Federal Regulations as set forth
below.
Title 5--[Amended]
1. A new chapter XXIV, consisting of part 3401, is added to title 5
of the Code of Federal Regulations to read as follows:
CHAPTER XXIV--FEDERAL ENERGY REGULATORY COMMISSION
PART 3401--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES
OF THE FEDERAL ENERGY REGULATORY COMMISSION
Sec.
3401.101 General.
3401.102 Prohibited financial interests.
3401.103 Procedures for accomplishing disqualification.
3401.104 Prior approval for outside employment.
Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government
Act of 1978); 42 U.S.C. 7171, 7172; E.O. 12674, 54 FR 15159, 3 CFR,
1989 Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR,
1990 Comp., p. 306; 5 CFR 2635.105, 2635.402(c), 2635.403,
2635.502(e), 2635.604, 2635.803.
Sec. 3401.101 General.
In accordance with 5 CFR 2635.105, the regulations in this part
apply to employees of the Federal Energy Regulatory Commission
(Commission) and supplement the Standards of Ethical Conduct for
Employees of the Executive Branch contained in 5 CFR part 2635. In
addition to the standards in 5 CFR part 2635 and this part, employees
are subject to the executive branch financial disclosure regulations
contained in 5 CFR part 2634, additional regulations on
responsibilities and conduct at 5 CFR part 735, and Commission specific
provisions contained in 18 CFR part 3c.
Sec. 3401.102 Prohibited financial interests.
(a) General prohibition. Except as provided in paragraphs (b) and
(c) of this section, an employee, or the spouse or minor child of an
employee, shall not acquire or hold any securities of:
(1) A natural gas company;
(2) An interstate oil pipeline;
(3) A hydroelectric licensee or exemptee;
(4) A public utility;
(5) Any electric utility engaged in the wholesale sale or
transmission of electricity or having obtained an interconnection or
wheeling order under Part II of the Federal Power Act; or
(6) The parent company of an entity identified in paragraphs (a)(1)
through (a)(5) of this section.
(b) Waiver. The DAEO may grant a written waiver from this section
based on a determination that the waiver is not inconsistent with part
2635 of this title or otherwise prohibited by law and that, under the
particular circumstances, application of the provision is not necessary
to avoid the appearance of misuse of position or loss of impartiality,
or otherwise to ensure confidence in the impartiality and objectivity
with which Commission programs are administered. A waiver under this
paragraph may impose appropriate conditions, such as requiring
execution of a written disqualification.
(c) Definitions. For purposes of this section:
(1) The term securities includes all interests in debt or equity
instruments. The term includes, without limitation, secured and
unsecured bonds, debentures, notes, securitized assets, and commercial
paper, as well as all types of preferred and common stock. The term
encompasses both current and contingent ownership interests, including
any beneficial or legal interest derived from a trust. It extends to
any right to acquire any long or short position in such securities and
includes, without limitation, interests convertible into such
securities, as well as options, rights, warrants, puts, calls and
straddles with respect thereto. It does not include an interest in a
publicly traded or publicly available mutual fund or other collective
investment fund, or in a widely held pension or similar fund, provided
that the fund's prospectus does not indicate the objective or practice
of concentrating its investments in entities identified in paragraphs
(a)(1) through (a)(6) of this section, and the employee neither
exercises control nor has the ability to exercise control over the
financial interests held in the fund.
(2) The term parent means a company that possesses, directly or
indirectly, the power to direct or cause the direction of the
management and policies of an entity identified in paragraphs (a)(1)
through (a)(5) of this section.
[[Page 43415]]
Sec. 3401.103 Procedures for accomplishing disqualification.
(a) An employee, other than a member of the Commission, who is
required, in accordance with 5 CFR 2635.402(c), 2635.502(e), or
2635.604(a), to disqualify himself from participation in a particular
matter before the Commission shall provide written notice of
disqualification to his supervisor and to the DAEO when he becomes
aware of the need to disqualify himself from participation in the
matter. This procedure is required notwithstanding the guidance in 5
CFR 2635.402(c)(2), 2635.502(e)(2), and 2635.604(c).
(b) An employee may withdraw written notice under paragraph (a) of
this section upon determining that disqualification from participation
in the matter is no longer required. A withdrawal of disqualification
shall be in writing and shall be provided to the employee's supervisor
and to the DAEO.
Sec. 3401.104 Prior approval for outside employment.
(a) Prior approval requirement. An employee, other than a special
Government employee, must obtain written approval from the DAEO through
normal supervisory channels before engaging in outside employment with
any person who is a ``prohibited source'' as that term is defined at 5
CFR 2635.203(d).
(b) Approval of requests. Approval under this section shall be
denied only upon a determination by the DAEO that the outside activity
is expected to involve conduct prohibited by statute or Federal
regulations, including 5 CFR part 2635.
(c) Definitions. For purposes of this section, ``employment'' means
any form of non-Federal employment or business relationship or activity
involving the provision of personal services by the employee for
compensation other than reimbursement of actual and necessary expenses.
It includes, but is not limited to, personal services as an officer,
director, employee, agent, attorney, consultant, contractor, general
partner, or trustee.
Title 18--[Amended]
CHAPTER I--FEDERAL ENERGY REGULATORY COMMISSION
2. Part 3c of 18 CFR is revised to read as follows:
PART 3c--STANDARDS OF CONDUCT
Sec.
3c.1 Cross-reference to employee ethical conduct standards and
financial disclosure regulations.
3c.2 Nonpublic information.
3c.3 Reporting fraud, waste, abuse, and corruption and cooperation
with official inquiries.
Authority: 15 U.S.C. 717g; 16 U.S.C. 825(b); 42 U.S.C. 7171,
7172.
Sec. 3c.1 Cross-reference to employee ethical conduct standards and
financial disclosure regulations.
Employees of the Federal Energy Regulatory Commission (Commission)
are subject to the executive branch-wide financial disclosure
regulations at 5 CFR part 2634, the Standards of Ethical Conduct for
Employees of the Executive Branch at 5 CFR part 2635, the Commission
regulations at 5 CFR part 3401 which supplement the Standards of
Ethical Conduct, and the executive branch-wide employee
responsibilities and conduct regulation at 5 CFR part 735.
Sec. 3c.2 Nonpublic information.
(a) Section 301(b) (16 U.S.C. 825(b)) of the Federal Power Act and
section 8(b) (15 U.S.C. 717g) of the Natural Gas Act prohibit any
employee, in the absence of Commission or court direction, from
divulging any fact or information which may come to his or her
knowledge during the course of examination of books or other accounts.
(b) The nature and time of any proposed action by the Commission
are confidential and shall not be divulged to anyone outside the
Commission. The Secretary of the Commission has the exclusive
responsibility and authority for authorizing the initial public release
of information concerning Commission proceedings.
Sec. 3c.3 Reporting fraud, waste, abuse, and corruption and
cooperation with official inquiries.
(a) Employees shall, in fulfilling the obligation of 5 CFR
2635.101(b)(11), report fraud, waste, abuse, and corruption in
Commission programs, including on the part of Commission employees,
contractors, subcontractors, grantees, or other recipients of
Commission financial assistance, to the Office of Inspector General or
other appropriate Federal authority.
(b) All alleged violations of the ethical restrictions described in
Sec. 3c.1 that are reported in accordance with paragraph (a) of this
section to an appropriate authority within the Commission shall in turn
be referred by that authority to the Designated Agency Ethics Official
or his or her designee, or the Inspector General.
(c) Employees shall cooperate with official inquiries by the
Inspector General; they shall respond to questions truthfully under
oath when required, whether orally or in writing, and must provide
documents and other materials concerning matters of official interest.
An employee is not required to respond to such official inquiries if
answers or testimony may subject the employee to criminal prosecution.
[FR Doc. 96-21412 Filed 8-22-96; 8:45 am]
BILLING CODE 6717-01-M
Complete official Federal Register PDF
FR Doc. 96-21219 Radio Broadcasting Services; Willows, CA
[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Page 43472]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21219]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 73
[MM Docket No. 94-126; RM-8531]
Radio Broadcasting Services; Willows, CA
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: This document allots Channel 292A to Willows, California, as
that community's first local FM transmission service, in response to a
petition for rule making filed by KIQS, Inc. See 59 FR 59394, November
17, 1994. Coordinates used for Channel 292A at Willows are 39-25-56 and
122-04-50. With this action, the proceeding is terminated.
DATES: Effective September 23, 1996. The window period for filing
applications will open on September 23, 1996, and close on October 24,
1996.
FOR FURTHER INFORMATION CONTACT: Nancy Joyner, Mass Media Bureau, (202)
418-2180. Questions related to the window application filing process
for Channel 292A at Willows, California, should be addressed to the
Audio Services Division, (202) 418-2700.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Report and Order, MM Docket No. 94-126, adopted August 2, 1996, and
released August 9, 1996. The full text of this Commission decision is
available for inspection and copying during normal business hours in
the FCC's Reference Center (Room 239), 1919 M Street, NW, Washington,
DC. The complete text of this decision may also be purchased from the
Commission's copy contractors, International Transcription Service,
Inc., (202) 857-3800, located at 1919 M Street, NW., Room 246, or 2100
M Street, NW., Suite 140, Washington, DC 20037.
List of Subjects in 47 CFR Part 73
Radio broadcasting.
Part 73 of title 47 of the Code of Federal Regulations is amended
as follows:
PART 73--[AMENDED]
1. The authority citation for Part 73 continues to read as follows:
Authority: Secs. 303, 48 Stat., as amended, 1082; 47 U.S.C. 154,
as amended.
Sec. 73.202 [Amended]
2. Section 73.202(b), the Table of FM Allotments under California,
is amended by adding Willows, Channel 292A.
Federal Communications Commission.
John A. Karousos,
Chief, Allocations Branch, Policy and Rules Division, Mass Media
Bureau.
[FR Doc. 96-21219 Filed 8-22-96; 8:45 am]
BILLING CODE 6712-01-F
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