issue-1996-02-16•Federal Register final rules — 1996-02-16
Federal Register final rules — 1996-02-16
issue-1996-02-16Federal Register final rules — 1996-02-16Regulation
Published Federal Register documents, not public-inspection drafts. The GPO XML/text rendition is a research aid; the linked complete official PDF retains the printed layout and all graphics. Graphics are retained in that PDF and are not independently reproduced in this text rendition. Publication does not establish that every provision remains legally in force.
FR Doc. 96-3605 Standard Instrument Approach Procedures; Miscellaneous Amendments
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Pages 6108-6110]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3605]
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DEPARTMENT OF TRANSPORTATION
14 CFR Part 97
[Docket No. 28462; Amdt. No. 1711]
Standard Instrument Approach Procedures; Miscellaneous Amendments
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This amendment establishes, amends, suspends, or revokes
Standard Instrument Approach Procedures (SIAPs) for operations at
certain airports. These regulatory actions are needed because of
changes occurring in the National Airspace System, such as the
commissioning of new navigational facilities, addition of new
obstacles, or changes in air traffic requirements. These changes are
designed to provide safe and efficient use of the navigable airspace
and to promote safe flight operations under instrument flight rules at
the affected airports.
DATES: An effective date for each SIAP is specified in the amendatory
provisions.
Incorporation by reference-approved by the Director of the Federal
Register on December 31, 1980, and reapproved as of January 1, 1982.
ADDRESSES: Availability of matter incorporated by reference in the
amendment is as follows:
For Examination--
1. FAA Rules Docket, FAA Headquarters Building, 800 Independence
Avenue, SW., Washington, DC 20491;
2. The FAA Regional Office of the region in which affected airport
is located; or
3. The Flight Inspection Area Office which originated the SIAP.
For Purchase--Individual SIAP copies may be obtained from:
1. FAA Public Inquiry Center (APA-200), FAA Headquarters Building,
800 Independence Avenue, SW., Washington, DC 20591; or
2. The FAA Regional Office of the region in which the affected
airport is located.
By Subscription--Copies of all SIAPs, mailed once every 2 weeks,
are for sale by the Superintendent of Documents, US Government Printing
Office, Washington, DC 20402.
FOR FURTHER INFORMATION CONTACT:
Paul J. Best, Flight Procedures Standards Branch (AFS-420), Technical
Programs Division, Flight Standards Service, Federal Aviation
Administration, 800 Independence Avenue, SW., Washington, DC 20591;
telephone (202) 267-8277.
SUPPLEMENTARY INFORMATION: This amendment to part 97 of the Federal
Aviation Regulations (14 CFR part 97) establishes, amends, suspends, or
revokes Standard Instrument Approach Procedures (SIAPs). The complete
regulatory description on each SIAP is contained in the appropriate FAA
Form 8260 and the National Flight Data Center (FDC)/Permanent (P)
Notices to Airmen (NOTAM) which are incorporated by reference in the
amendment under 5 U.S.C. 552(a), 1 CFR part 51, and Sec. 97.20 of the
Federal Aviations Regulations (FAR). Materials incorporated by
reference are available for examination or purchase as stated above.
The large number of SIAPs, their complex nature, and the need for a
special format make their verbatim publication in the Federal Register
expensive and impractical. Further, airmen do not use the regulatory
text of the SIAPs, but refer to their graphic depiction of charts
printed by publishers of aeronautical materials. Thus, the advantages
of incorporation by reference are realized and publication of the
complete description of each SIAP contained in FAA form documents is
unnecessary. The provisions of this amendment state the affected CFR
(and FAR) sections, with the types and effective dates of the SIAPs.
This amendment also identifies the airport, its location, the procedure
identification and the amendment number.
The Rule
This amendment to part 97 of the Federal Aviation Regulations (14
CFR part 97) establishes, amends, suspends, or revokes SIAPs. For
safety and timeliness of change considerations, this amendment
incorporates only specific changes contained in the content of the
following FDC/P NOTAM for each SIAP. The SIAP information in some
previously designated FDC/Temporary (FDC/T) NOTAMs is of such duration
as to be permanent. With conversion to FDC/P NOTAMs, the respective
FDC/T NOTAMs have been cancelled.
The FDC/P NOTAMs for the SIAPs contained in this amendment are
based on the criteria contained in the U.S. Standard for Terminal
Instrument Approach Procedures (TERPS). In developing these chart
changes to SIAPs by FDC/P NOTAMs, the TERPS criteria were applied to
only these specific conditions existing at the affected
[[Page 6109]]
airports. All SIAP amendments in the rule have been previously issued
by the FAA in a National Flight Data Center (FDC) Notice to Airmen
(NOTAM) as an emergency action of immediate flight safety relating
directly to published aeronautical charts. The circumstances which
created the need for all these SIAP amendments requires making them
effective in less than 30 days.
Further, the SIAPs contained in this amendment are based on the
criteria contained in the TERPS. Because of the close and immediate
relationship between these SIAPs and safety in air commerce, I find
that notice and public procedure before adopting these SIAPs are
impracticable and contrary to the public interest and, where
applicable, that good cause exists for making these SIAPs effective in
less than 30 days.
Conclusion
The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
It, therefore--(1) is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not a ``significant rule'' under DOT
Regulatory Policies and Procedures (44 FR 11034; February 26, 1979);
and (3) does not warrant preparation of a regulatory evaluation as the
anticipated impact is so minimal. For the same reason, the FAA
certifies that this amendment will not have a significant economic
impact on a substantial number of small entities under the criteria of
the Regulatory Flexibility Act.
List of Subjects in 14 CFR Part 97
Air Traffic Control, Airports, Navigation (Air).
Issued in Washington, DC on February 9, 1996.
Thomas C. Accardi,
Director, Flight Standards Service.
Adoption of the Amendment
Accordingly, pursuant to the authority delegated to me, part 97 of
the Federal Aviation Regulations (14 CFR part 97) is amended by
establishing, amending, suspending, or revoking Standard Instrument
Approach Procedures, effective at 0901 UTC on the dates specified, as
follows:
PART 97--STANDARD INSTRUMENT APPROACH PROCEDURES
1. The authority citation for part 97 is revised to read as
follows:
Authority: 49 U.S.C. 40103, 40113, 40120, 44701; 49 U.S.C.
106(g); and 14 CFR 11.49(b)(2).
2. Part 97 is amended to read as follows:
Secs. 97.23, 97.25, 97.27, 97.29, 97.31, 97.33, 97.35 [Amended]
By amending: Sec. 97.23 VOR, VOR/DME, or TACAN, and VOR/DME or
TACAN; Sec. 97.25 LOC, LOC/DME, LDA, LDA/DME, SDF, SDF/DME; Sec. 97.27
NDB, NDB/DME; Sec. 97.29 ILS, ILS/DME, ISMLS, MLS, MLS/DME, MLS/RNAV;
Sec. 97.31 RADAR SIAPs; Sec. 97.33 RNAV SIAPs; and Sec. 97.35 COPTER
SIAPs, identified as follows:
* * * Effective Upon Publication
--------------------------------------------------------------------------------------------------------------------------------------------------------
FDC Date State City Airport FDC No. SIAP
--------------------------------------------------------------------------------------------------------------------------------------------------------
01/30/96............. WA Spokane............ Spokane Intl....... FDC 6/0671 NDB RWY 21, AMDT 14A...
01/31/96............. AK Cold bay........... Cold bay........... FDC 5/6546 ILS RWY 14, AMDT 15...
THIS CORRECTS NOTAM IN TL96-01.
01/31/96............. IN Indianapolis....... Greenwood Muni..... FDC 6/0695 NDB OR GPS RWY 1 AMDT 2...
01/31/96............. TX Mesquite........... Phil L. Hudson Muni FDC 6/0686 NDB OR GPS RWY 17, AMDT 4A...
01/31/96............. TX Mesquite........... Phil L. Hudson Muni FDC 6/0687 LOC BC RWY 35, AMDT 1A...
01/31/96............. WV Bluefield.......... Mercer County...... FDC 6/0692 ILS RWY 23 AMDT 14...
02/01/96............. TX Dallas-Fort Worth.. Dallas-Fort Worth FDC 6/0715 ILS RWY 18R, AMDT 4A...
Intl.
02/01/96............. TX Dallas-Fort Worth.. Dallas-Fort Worth FDC 6/0716 ILS RWY 18L, AMDT 15...
Intl.
02/01/96............. TX Dallas-Fort Worth.. Dallas-Fort Worth FDC 6/0718 Converging ILS RWY 18R, AMDT 2A...
Intl.
02/01/96............. TX Dallas-Fort Worth.. Dallas-Fort Worth FDC 6/0719 Converging ILS RWY 18L, AMDT 2...
Intl.
02/01/96............. TX Dallas-Fort Worth.. Dallas-Fort Worth FDC 6.0720 ILS RWY 35R, AMDT 5...
Intl.
02/01/96............. TX Dallas-Fort Worth.. Dallas-Fort Worth FDC 6/0721 NDB or GPS RWY 35R, AMDT 8...
Intl.
02/01/96............. TX Dallas-Fort Worth.. Dallas-Fort Worth FDC 6/0722 ILS RWY 36R, AMDT 1...
Intl.
02/91/96............. TX Dallas-Fort Worth.. Dallas-Fort Worth FDC 6/0725 Converging ILS RWY 36L, AMDT 2...
Intl.
02/01/96............. TX Dallas-Fort Worth.. Dallas-Fort Worth FDC 6/0726 Converging ILS RWY 36R, ORIG...
Intl.
02/01/96............. TX Dallas-Fort Worth.. Dallas-Fort Worth FDC 6/0729 ILS RWY 17L, AMDT 5B...
Intl.
02/01/96............. TX Dallas-Fort Worth.. Dallas-Fort Worth FDC 6/0730 ILS RWY 17R, AMDT 17...
Intl.
02/01/96............. TX Dallas-Fort Worth.. Dallas-Fort Worth FDC 6/0731 Converging ILS RWY 35R, AMDT 3...
Intl.
02/01/96............. TX Dallas-Fort Worth.. Dallas-Fort Worth FDC 6/0738 ILS RWY 35L, ORIG...
Intl.
02/01/96............. TX Dallas-Fort Worth.. Dallas-Fort Worth FDC 6/0745 Converging ILS RWY 13R, AMDT 3...
Intl.
02/01/96............. TX Dallas-Fort Worth.. Dallas-Fort Worth FDC 6/0746 ILS RWY 36L, AMDT 4...
Intl.
02/01/96............. WV Huntington......... Tri-State/Milton J. FDC 6/0734 ILS RWY 30 AMDT 4...
Ferguson Field.
02/01/96............. WV Lewisburg.......... Greenbrier valley.. FDC 6/0736 ILS RWY 4 AMDT 7A...
02/05/96............. MS Olive Branch....... Olive Branch....... FDC 6/0829 NDB or GPS RWY 18, AMDT 3...
02/05/96............. MS Olive Branch....... Olive Branch....... FDC 6/0830 NDB or GPS RWY 36, AMDT 4...
02/05/96............. TN Memphis............ Memphis Intl....... FDC 6/0835 ILS RWY 36L AMDT 11...
02/06/96............. LA Vivian............. Vivian............. FDC 6/0856 NDB or GPS RWY 9, AMDT 1...
02/06/96............. TX Arlington.......... Arlington Muni..... FDC 6/0855 VOR/DME RWY 34, AMDT 5...
02/06/96............. TX Dallas-Fort Worth.. Dallas-Fort Worth FDC 6/0851 Effective...
Intl.
02/06/96............. TX Dallas-Fort Worth.. Dallas-Fort Worth FDC 6/0853 Effective...
Intl.
02/06/96............. WI Oshkosh............ Wittman Regional... FDC 6/0863 VOR RWY 9 AMDT 8...
02/08/96............. IA Fairfield.......... Fairfield Muni..... FDC 6/0893 NDB RWY 36, AMDT 7B. S-36...
[[Page 6110]]
02/08/96............. IA Fairfield.......... Fairfield Muni..... FDC 6/0898 VOR/DME RNAV RWY 36, AMDT 1B...
02/09/96............. IA Fairfield.......... Fairfield Muni..... FDC 6/0897 VOR/DME RNAV or GPS RWY 18, AMDT 1B...
--------------------------------------------------------------------------------------------------------------------------------------------------------
[FR Doc. 96-3605 Filed 2-15-96; 8:45 am]
BILLING CODE 4910-13-M
Complete official Federal Register PDF
FR Doc. 96-3604 Standard Instrument Approach Procedures; Miscellaneous Amendments
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Pages 6106-6108]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3604]
=======================================================================
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DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 97
[Docket No. 28461; Amdt. No. 1710]
Standard Instrument Approach Procedures; Miscellaneous Amendments
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This amendment establishes, amends, suspends, or revokes
Standard Instrument Approach Procedures (SIAPs) for operations at
certain airports. These regulatory actions are needed because of the
adoption of new or revised criteria, or because of changes occurring in
the National Airspace System, such as the commissioning of new
navigational facilities, addition of new obstacles, or changes in air
traffic requirements. These changes are designed to provide safe and
efficient use of the navigable airspace and to
[[Page 6107]]
promote safe flight operations under instrument flight rules at the
affected airports.
DATES: An effective date for each SIAP is specified in the amendatory
provisions.
Incorporation by reference--approved by the Director of the Federal
Register on December 31, 1980, and reapproved as of January 1, 1982.
ADDRESSES: Availability of matters incorporated by reference in the
amendment is as follows:
For Examination--
1. FAA Rules Docket, FAA Headquarters Building, 800 Independence
Avenue, SW., Washington, DC 20591;
2. The FAA Regional Office of the region in which the affected
airport is located; or
3. The Flight Inspection Area Office which originated the SIAP.
For Purchase--Individual SIAP copies may be obtained from:
1. FAA Public Inquiry Center (APA-200), FAA Headquarters Building,
800 Independence Avenue, SW., Washington, DC 20591; or
2. The FAA Regional Office of the region in which the affected
airport is located.
By Subscription--Copies of all SIAPs, mailed once every 2 weeks,
are for sale by the Superintendent of Documents, U.S. Government
Printing Office, Washington, DC 20402.
FOR FURTHER INFORMATION CONTACT:
Paul J. Best, Flight Procedures Standards Branch (AFS-420), Technical
Programs Division, Flight Standards Service, Federal Aviation
Administration, 800 Independence Avenue, SW., Washington, DC 20591;
telephone (202) 267-8277.
SUPPLEMENTARY INFORMATION: This amendment to part 97 of the Federal
Aviation Regulations (14 CFR part 97) establishes, amends, suspends, or
revokes Standard Instrument Approach Procedures (SIAPs). The complete
regulatory description of each SIAP is contained in official FAA form
documents which are incorporated by reference in this amendment under 5
U.S.C. 552(a), 1 CFR part 51, and Sec. 97.20 of the Federal Aviation
Regulations (FAR). The applicable FAA Forms are identified as FAA Forms
8260-3, 8260-4, and 8260-5. Materials incorporated by reference are
available for examination or purchase as stated above.
The large number of SIAPs, their complex nature, and the need for a
special format make their verbatim publication in the Federal Register
expensive and impractical. Further, airmen do not use the regulatory
text of the SIAPs, but refer to their graphic depiction on charts
printed by publishers of aeronautical materials. Thus, the advantages
of incorporation by reference are realized and publication of the
complete description of each SIAP contained in FAA form documents is
unnecessary. The provisions of this amendment state the affected CFR
(and FAR) sections, with the types and effective dates of the SIAPs.
This amendment also identifies the airport, its location, the procedure
identification and the amendment number.
The Rule
This amendment to part 97 is effective upon publication of each
separate SIAP as contained in the transmittal. Some SIAP amendments may
have been previously issued by the FAA in a National Flight Data Center
(FDC) Notice to Airmen (NOTAM) as an emergency action of immediate
flight safety relating directly to published aeronautical charts. The
circumstances which created the need for some SIAP amendments may
require making them effective in less than 30 days. For the remaining
SIAPs, an effective date at least 30 days after publication is
provided.
Further, the SIAPs contained in this amendment are based on the
criteria contained in the U.S. Standard for Terminal Instrument
Approach Procedures (TERPS). In developing these SIAPs, the TERPS
criteria were applied to the conditions existing or anticipated at the
affected airports. Because of the close and immediate relationship
between these SIAPs and safety in air commerce, I find that notice and
public procedure before adopting these SIAPs are impracticable and
contrary to the public interest and, where applicable, that good cause
exists for making some SIAPs effective in less than 30 days.
The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
It, therefore--(1) is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not a ``significant rule'' under DOT
Regulatory Policies and Procedures (44 FR 11034; February 26, 1979);
and (3) does not warrant preparation of a regulatory evaluation as the
anticipated impact is so minimal. For the same reason, the FAA
certifies that this amendment will not have a significant economic
impact on a substantial number of small entities under the criteria of
the Regulatory Flexibility Act.
List of Subjects in 14 CFR Part 97
Air Traffic Control, Airports, Navigation (Air).
Issued in Washington, DC on February 9, 1996.
Thomas C. Accardi,
Director, Flight Standards Service.
Adoption of the Amendment
Accordingly, pursuant to the authority delegated to me, part 97 of
the Federal Aviation Regulations (14 CFR part 97) is amended by
establishing, amending, suspending, or revoking Standard Instrument
Approach Procedures, effective at 0901 UTC on the dates specified, as
follows:
PART 97--STANDARD INSTRUMENT APPROACH PROCEDURES
1. The authority citation for part 97 is revised to read as
follows:
Authority: 49 U.S.C. 106(g), 40103, 40113, 40120, 44701; and 14
CFR 11.49(b)(2).
2. Part 97 is amended to read as follows:
Secs. 97.23, 97.25, 97.27, 97.29, 97.31, 97.33, 97.35 [Amended]
By amending: Sec. 97.23 VOR, VOR/DME, VOR or TACAN, and VOR/DME or
TACAN; Sec. 97.25 LOC, LOC/DME, LDA, LDA/DME, SDF, SDF/DME; Sec. 97.27
NDB, NDB/DME; Sec. 97.29 ILS, ILS/DME, ISMLS, MLS, MLS/DME, MLS/RNAV;
Sec. 97.31 RADAR SIAPs; Sec. 97.33 RNAV SIAPs; and Sec. 97.35 COPTER
SIAPs, identified as follows:
* * * Effective 25 April 1996
St. Paul Island, AK, St. Paul Island, LOC/DME BC RWY 18, Amdt 1
Ash Flat, AR, Cherokee Village, NDB RWY 4, Amdt 1
Ash Flat, AR, Cherokee Village, GPS RWY 4, Orig
Fresno, CA, Fresno-Chandler Downtown, GPS RWY 30L, Orig
Greeley, CO, Greeley-Weld County, GPS RWY 9, Orig
Greeley, CO, Greeley-Weld County, GPS RWY 27, Orig
Lamar, CO, Lamar Muni, GPS RWY 36, Orig
Pueblo, CO, Pueblo Memorial, GPS RWY 17, Orig
Pueblo, CO, Pueblo Memorial, GPS RWY 35, Orig
Madison, GA, Madison Muni, GPS RWY 14, Orig
Chicago/Romeoville, IL, Lewis University, GPS RWY 27, Orig
Dodge City, KS, Dodge City Regional, GPS RWY 14, Orig
Homer, LA, Homer Municipal, GPS RWY 30, Orig
[[Page 6108]]
New Roads, LA, False River Air Park, GPS RWY 18, Orig
Boston, MA, General Edward Lawrence Logan Intl, ILS RWY 22L, Amdt 5
Marshfield, MA, Marshfield, GPS RWY 6, Orig
Glasgow, MT, Glasgow Intl, GPS RWY 12, Orig
Lincoln Park, NJ, Lincoln Park, GPS RWY 19, Orig
Gallup, NM, Gallup Municipal, GPS RWY 24, Orig
Charlotte, NC, Charlotte/Douglas Intl, RADAR-1, Amdt 19, CANCELLED
Port Clinton, OH, Carl R. Keller Field, GPS RWY 27, Orig
Casper, WY, Natrona County Intl, GPS RWY 26, Orig
Morgantown, WV, Morgantown Muni-Walter L. Bill Hart Field, ILS RWY 18,
Amdt 10
* * * Effective 28 March 1996
Mount Carmel, IL, Mount Carmel Muni, VOR or GPS RWY 22, Amdt 8
Mount Carmel, IL, Mount Carmel Muni, NDB or GPS RWY 4, Amdt 4
Auburn, IN, De Kalb County, VOR or GPS-A, Amdt 9
Auburn, IN, De Kalb County, VOR or GPS RWY 9, Amdt 7
Gastonia, NC, Gastonia Muni, RADAR-1 Amdt 4, CANCELLED
Celina, OH, Lakefield, NDB or GPS RWY 8, Amdt 4
Celina, OH, Lakefield, VOR/DME RNAV or GPS RWY 26, Amdt 6
Cleveland, OH, Cuyahoga County, LOC BC RWY 5, Amdt 10
Cleveland, OH, Cuyahoga County, NDB or GPS RWY 23, Amdt 8
Cleveland, OH, Cuyahoga County, ILS RWY 23, Amdt 12
Pottstown, PA, Pottstown Limerick, RNAV RWY 28, Orig, CANCELLED
Racine, WI, John H. Batten Field, VOR RWY 22, Amdt 8, CANCELLED
* * * Effective Upon Publication
Burnet, TX, Burnet Muni Kate Craddock Field, NDB OR GPS RWY 1, Amdt 4
Burnet, TX, Burnet-Muni Kate Craddock Field, VOR/DME RNAV OR GPS RWY
19, Amdt 3
Note: The following procedure published in Transmittal Letter
94-06 dated 02/25/94 is hereby rescinded:
Chandler, AZ, Chandler Muni, NDB RWY 4R, Orig, PROPOSED EFF 28 APR
94
Note: The following procedure published in Transmittal Letter
93-23 dated 10/22/93 is hereby rescinded:
Payson, AZ, Payson, NDB-A, Orig, PROPOSED EFF 06 JAN 94
Note: The FAA published an Original Procedure in Docket No.
28426, Amdt. No. 1703 to Part 97 of the Federal Aviation Regulations
(Vol. 61 FR, No. 20, Page 2907; dated Tuesday, January 30, 1996,
which is hereby amended as follows:
Farmington, MO, Farmington Regional, GPS RWY 2, Orig, Effective 25
APR 96.
[FR Doc. 96-3604 Filed 2-15-96; 8:45 am]
BILLING CODE 4910-13-M
Complete official Federal Register PDF
FR Doc. 96-3593 General Services Administration Acquisition Regulation; Acquisition of Commercial Items
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Pages 6164-6173]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3593]
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GENERAL SERVICES ADMINISTRATION
48 CFR Parts 501, 504, 507, 510, 511, 512, 514, 515, 538, 539, 543,
546, 552 and 570
[APD 2800.12A, CHGE 70]
RIN 3090-AF86
General Services Administration Acquisition Regulation;
Acquisition of Commercial Items
AGENCY: Office of Acquisition Policy, GSA.
ACTION: Interim rule with request for comments.
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SUMMARY: The General Services Administration Acquisition Regulation
(GSAR) is amended to implement Items I and III of Federal Acquisition
Circular 90-32 which amended the Federal Acquisition Regulation (FAR)
to implement the portions of the Federal Acquisition Streamlining Act
of 1994 (Pub. L. 103-355) dealing with the Truth in Negotiations Act
and with the acquisition of commercial items. The GSAR is revised to
conform to the FAR as revised by FAC 90-32 and to implement portions of
the FAR where necessary to provide agency procedures. The Multiple
Award Schedule (MAS) Policy Statement of October 1, 1982 (47 FR 50242,
November 5, 1982) is canceled.
DATES: Effective Date: March 4, 1996. (See Supplementary Information
for further guidance.)
Comment Date: Comments should be submitted in writing to the
address shown below on or before April 16, 1996 to be considered in
formulating the final rule.
ADDRESSES: Interested parties should submit written comments to the
Office of Acquisition Policy (MV), General Services Administration,
Room 4010, 18th & F Streets, NW, Washington, DC 20405.
FOR FURTHER INFORMATION CONTACT:
Les Davison, Office of GSA Acquisition Policy, (202) 501-1224.
SUPPLEMENTARY INFORMATION: All new solicitations for commercial items
and open season solicitations issued under the multiple award schedule
program issued after March 4, 1996 shall conform to this interim rule.
To the maximum extent practical, solicitations for commercial items and
open season solicitations, that have been issued but where no contract
has been awarded shall be amended to conform to this interim rule.
However, offerors shall not be required to resubmit information on
commercial sales practices and any requests for additional information
shall be limited to the minimum needed. Existing MAS contracts may be
modified, at the discretion of contracting officers, to conform to all
or part of this interim rule.
A. Determination To Issue an Interim Rule
A determination has been made under the authority of the
Administrator of General Services that urgent and compelling reasons
exist to publish an interim rule prior to affording the public an
opportunity to comment. Federal Acquisition Circular 90-32 (60 FR
48206, September 18, 1995) revised the Federal Acquisition Regulation
(FAR) to implement Title VIII of Public Law 103-355. Title VIII of
Public Law 103-355 contained requirements for the acquisition of
commercial items and required publication of implementing FAR revisions
by October 1, 1995. The FAR rule became available for use on October 1,
1995, and is mandatory for use by all Federal agencies in commercial
items solicitations issued after December 1, 1995. This GSAR rule
implements GSA unique requirements and revises the GSAR to bring it
into conformance with the FAR. Immediate GSAR coverage is needed to
permit GSA contracting activities to comply with Pub. L. 103-355 and
the implementing FAR requirements pertaining to the acquisition of
commercial items and Truth in Negotiations Act.
B. Executive Order 12866
This rule was not submitted to the Office of Management and Budget
(OMB) because it is not a significant rule as defined in Executive
Order 12866, Regulatory Planning and Review.
C. Regulatory Flexibility Act
This interim rule is expected to have a positive economic impact on
a substantial number of small entities within the meaning of the
Regulatory Flexibility Act, 5 U.S.C. 601 et seq., because the rule
simplifies procedures for GSA acquisition of commercial items. An
Initial Regulatory Flexibility Analysis (IRFA) has been prepared and
may be obtained from the address stated above. A copy of the IRFA has
been submitted to the Chief Counsel for Advocacy of the Small Business
Administration. Comments from small entities will be considered in
accordance with Section 610 of the Act.
D. Paperwork Reduction Act
The Paperwork Reduction Act applies to this interim rule. The
information collection requirements in 515.804-8 and related provisions
and clauses have been approved by the Office of Management and Budget
(OMB) under OMB Control Number 9000-0013. The information collection
requirements in 552.212-70, Preparation of Offer (Multiple Award
Schedule), represent customary commercial practice and are approved
under OMB Control Number 3090-0250.
List of Subjects in 48 CFR Parts 501, 504, 507, 510, 511, 512, 514,
515, 538, 539, 543, 546, 552, and 570
Government procurement.
Accordingly, 48 CFR Parts 501, 504, 507, 510, 511, 512, 514, 515,
538, 539, 543, 546, and 552 and 570 are amended as follows:
PART 501--GENERAL SERVICES ADMINISTRATION ACQUISITION REGULATION
SYSTEM
1. The authority citation for 48 CFR Parts 501, 504, 507, 510, 511,
512, 514, 515, 538, 539, 543, 546, 552 and 570 continues to read as
follows:
Authority: 40 U.S.C. 486(c).
501.105 [Amended]
2. Section 501.105 is amended by removing the following GSAR
references and corresponding OMB control numbers: 510.004-70-3090-0203,
510.011(i)-3090-0246,
[[Page 6165]]
512.104(a)(2) and 512.104(a)(4)-3090-0204.
PART 504--ADMINISTRATIVE MATTERS
3. Section 504.803 is amended by revising paragraphs (a)(12) and
(a)(25) to read as follows:
504.803 Contents of contract files.
(a) * * *
(12) Cost or pricing data and information other than cost or
pricing data. Where the requirement for submission of cost or pricing
data is waived, as provided in FAR 15.804-1(b)(5), the waiver and
documentation supporting the waiver should be filed under this tab.
* * * * *
(25) Any required approvals--GSA 1535, Recommendation for Award, or
documentation of approval of Subcontracting Plan (as applicable). The
contracting officer's and any other departing procurement official's
certificate of procurement integrity, required by FAR 3.104-7(a) and 48
CFR 503.104-7 and the record of individuals authorized access to
proprietary or source selection information, required by FAR 3.104-
5(d)(2) and 3.104-9(e)(iii) should be filed under this tab.
* * * * *
PART 507--ACQUISITION PLANNING
507.103 [Amended]
4. Section 507.103 is amended by removing ``510.002'' and inserting
``48 CFR 511.002''.
5. Part 510 heading is revised to read as follows:
PART 10--MARKET RESEARCH
510.001 [Redesignated as 511.001]
6. Section 510.001 is redesignated as 511.001.
510.002 [Redesignated as 511.002 and amended]
7. Section 510.002 is redesignated as 511.002 and the first
sentence is amended by removing ``FAR 10.002(c)'' and inserting ``FAR
11.002(b).''
510.004 [Removed]
510.004-70 [Removed]
510.004-71 [Removed]
510.007 [Removed]
510.007-70 [Removed]
8. Sections 510.004, 510.004-70, 510.004-71, 510.007 and 510.007-70
are removed.
510.011 [Redesignated as 511.204 and amended]
9. Section 510.011 is redesignated as 511.204 and paragraph (a) is
amended by removing ``552.210-70'' and inserting ``48 CFR 552.211-
711''; by removing ``552.210-71'' and inserting ``48 CFR 552.211-72''
in paragraph (b); by removing paragraphs (c) and (d); by redesignating
paragraph (e) as (c) and in newly designated paragraph (c) removing
``552.210-75'' and inserting ``48 CFR 552.211-73''; by redesignating
paragraph (f) as (d), and in newly designated paragraph (d) removing
``552.210-76'' and inserting ``48 CFR 552.211-74'', and by removing
``552.210-75'' and inserting ``48 CFR 552.211-73''; by redesignating
paragraph (g) as (e) and in newly designated paragraph (e), by removing
``552.210-77'' and inserting ``48 CFR 552.211-75''; by redesignating
paragraph (h) as (f) and in newly designated paragraph (f) removing
``552.210-78'' and inserting ``48 CFR 552.211-76''; by redesignating
paragraph (i) as (g), and in newly designated paragraph (g) removing
``552.210-79'' and inserting ``48 CFR 552.211-77.''
510.070 [Removed]
510.070-1 [Removed]
510.070-2 [Removed]
510.070-3 [Removed]
510.070-4 [Removed]
510.071 [Removed]
PART 510--[RESERVED]
10. Sections 510.070, 510.070-1, 510.070-2, 510.070-3, 510.070-4
and 510.071 are removed and Part 510 is reserved.
11. Part 511 heading is revised to read as follows:
PART 511--DESCRIBING AGENCY NEEDS
511.003 [Removed]
511.070 [Removed]
12. Sections 511.003 and 511.070 are removed.
13. Subpart 511.1 consisting of sections 511.103 and 511.170 are
added to read as follows:
Subpart 511.1--Selecting and Developing Requirements Documents
Sec.
511.103 Market acceptance.
511.170 Use of brand name or equal product descriptions.
Subpart 511.1--Selecting and Developing Requirements Documents
511.103 Market acceptance.
The contracting officer may require offerors to meet market
acceptance criteria in accordance with FAR 11.103 when such criteria
determined necessary to satisfy the agency's needs.
511.170 Use of brand name or equal product descriptions.
(a) Policy. When a ``brand name or equal'' purchase description is
used the purchase description should--
(1) Cite all brand name products known to be acceptable and of
current manufacture;
(2) Specify each physical or functional characteristic essential to
the intended use of the product including permissible tolerances;
(3) Avoid specifying characteristics that cannot be shown to
materially affect the intended end use and which unnecessarily restrict
competition; and
(4) Give prospective offerors the opportunity to offer products
other than those specifically referenced by brand name, as long as they
meet the needs of the Government in essentially the same manner as the
brand name product.
(b) Solicitation provisions. The solicitation--
(1) May require bid samples for ``or equal'' offers, but not for
``brand name'' offers.
(2) Must provide for full consideration and evaluation of ``or
equal'' offers against the salient characteristics specified in the
purchase description. Do not reject offers for minor differences in
design, construction, or features which do not affect the suitability
of the product for its intended use.
(3) Must include the following immediately after the item
description--
Offering on:
Manufacturer's Name----------------------------------------------------
Brand------------------------------------------------------------------
Model or Part No.------------------------------------------------------
(4) Should include the following notice, unless bid samples are
required for ``or equal'' offers, in the item listing after each brand
name or equal item (or component part) or at the bottom of each page
listing several items:
OFFERORS OFFERING OTHER THAN BRAND NAME ITEMS IDENTIFIED HEREIN
MUST PROVIDE ADEQUATE INFORMATION TO ENSURE THAT A DETERMINATION CAN
BE MADE AS TO EQUALITY OF THE PRODUCT(S) OFFERED.
(c) Contract clause. The contracting officer shall include a clause
substantially the same as the clause at 48 CFR 552.211-70, Brand Name
or Equal, when a brand name or equal
[[Page 6166]]
purchase description is used. When component parts or an end item are
described by brand name or equal descriptions and application of the
clause to some or all of the components is impracticable, either do not
use the clause or limit its application to specified components.
14. Subpart 511.2 is added to read as follows:
Subpart 511.2--Using and Maintaining Requirements Documents
PART 512--ACQUISITION OF COMMERCIAL ITEMS
15. Part 512 heading is revised as set forth above.
Subpart 512.1 [Redesignated as Subpart 511.4]
512.101 [Redesignated as 511.401]
512.104 [Redesignated as 511.404 and amended]
15a. Subpart 512.1 is redesignated as subpart 511.4, section
512.101 is redesignated as 511.401, and section 512.104 is redesignated
as 511.404.
16. Newly designated section 511.404 is amended by redesignating
paragraph (a)(5) as paragraph (a)(6) and amending paragraph (a)(6) by
removing ``552.212-72'' and inserting ``48 CFR 552.211-83''; by
redesignating paragraph (a)(4) as paragraph (a)(5), and amending
paragraph (a)(5) by removing ``552.212-71'' and inserting ``48 CFR
552.211-82''; by redesignating paragraph (a)(3) as paragraph (a)(4) and
amending paragraph (a)(4) by removing ``552.212-70'' and inserting ``48
CFR 552.211-81'' and by removing ``552.212-72'' and inserting ``48 CFR
552.211-83''; by removing ``552.212-1(a)'' in paragraph (a)(1) and
inserting ``48 CFR 552.211-1''; amending paragraph (b) by removing
``552.212-74'' and inserting ``48 CFR 552.211-84''; and by revising
paragraph (a)(2) and adding a new paragraph (a)(3) to read as follows:
511.404 Contract clauses.
(a) * * *
(2) 48 CFR 552.211-78, Commercial Delivery Schedule (Multiple Award
Schedule), in solicitations issued and contracts awarded under the
multiple award schedule program.
(3) 48 CFR 552.211-79, Acceptable Age of Supplies, or 48 CFR
552.211-80, Age on Delivery, in solicitations and contracts if the
contractor will be required to furnish shelf-life items within a
specified number of months from the date of manufacture or production
of the supplies. (See 101-27.206-2 of the Federal Property Management
Regulation.) The Acceptable Age of Supplies clause at 48 CFR 552.211-79
should be used when the required shelf-life period is 12 months or
less, and lengthy acceptance testing may be involved. For items having
a limited shelf-life, Alternate I to 48 CFR 552.211-79 must be
substituted for the basic clause when required by the director of the
48 CFR 552.211-80 should be used when the required shelf-life period is
more than 12 months, or when source inspection can be performed within
a short time period.
* * * * *
17. Subpart 512.2 consisting of sections 512.203 and 512.209 is
added to read as follows:
Subpart 512.2--Special Requirements for the Acquisition of Commercial
Items
Sec.
512.203 Procedures for solicitation, evaluation, and award.
512.209 Pricing of commercial items when contracting by
negotiation.
Subpart 512.2--Special Requirements for the Acquisition of
Commercial Items
512.203 Procedures for solicitation, evaluation, and award.
Contracting officers shall use the policies in FAR Part 12 and 48
CFR Part 512 in conjunction with the policies and procedures for
Federal Supply Schedules in FAR Part 38 and 48 CFR Part 538.
512.209 Pricing of commercial items when contracting by negotiation.
When awarding multiple award schedule contracts for commercial
items, the policies and procedures in FAR Part 15 and 48 CFR Part 515
shall be used to establish the reasonableness of prices.
18. Subpart 512.3 consisting of sections 512.301 and 512.302 is
added to read as follows:
Subpart 512.3--Solicitation Provisions and Contract Clauses for the
Acquisition of Commercial Items
Sec.
512.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
512.302 Tailoring of provisions and clauses for the acquisition of
commercial items.
512.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
(a) Solicitation provisions/clauses. The contracting officer shall
insert the following provisions or clauses in solicitations for the
acquisition of commercial items in accordance with the prescriptions
provided:
(1) The provision at 48 CFR 552.212-70, Preparation of Offer
(Multiple Award Schedule), in solicitations issued under the multiple
award schedule program.
(2) The clause at 48 CFR 552.212-71, Contract Terms and Conditions
Applicable to GSA Acquisition of Commercial Items when listed clauses
apply and are incorporated by reference. The clause provides for the
incorporation by reference of terms and conditions which are, to the
maximum extent practicable, consistent with customary commercial
practice. The contracting officer may tailor this clause.
(3) The clause at 48 CFR 552.212-72, Contract Terms and Conditions
Required to Implement Statutes or Executive Orders Applicable to GSA
Acquisitions of Commercial Items when listed clauses apply and are
incorporated by reference. The clause provides for the incorporation by
reference of terms and conditions which are required to implement
provisions of law or executive orders applicable to acquisitions of
commercial items.
(4) The provision at 48 CFR 552.212-73, Evaluation--Commercial
Items (Multiple Award Schedule), shall be used instead of FAR 52.212-2
in solicitations issued under the multiple award schedule program.
(b) Use of required GSAR provisions and clauses. Notwithstanding
prescriptions contained elsewhere in the GSAR (48 CFR Chapter 5), when
acquiring commercial items, contracting officers shall be required to
use only those provisions and clauses prescribed in this part. The
provisions and clauses prescribed in this part shall be revised, as
necessary, to reflect the applicability of statutes and executive
orders to the acquisition of commercial items.
(c) Discretionary use of GSAR provisions and clauses. The
contracting officer may include in solicitations and contracts by
addendum other GSAR provisions and clauses when their use is consistent
with the limitations contained in FAR 12.302(c).
(d) Use of additional provisions and clauses. Provisions or clauses
that are not prescribed in the FAR or GSAR for use in contracts for
commercial items may not be used unless approved by the Senior
Procurement Executive (see 48 CFR 502.101) or determined to be
consistent with customary commercial practice through market research.
512.302 Tailoring of provisions and clauses for the acquisition of
commercial items.
Requests for waivers shall be prepared in accordance with FAR
12.302(c) and submitted for approval by the chief of the contracting
office (see 48 CFR
[[Page 6167]]
502.101) if an individual contract is involved or by the contracting
director (see 48 CFR 502.101) if a class of contracts is involved.
PART 514--SEALED BIDDING
19. Section 514.201-70 is revised to read as follows:
514.201-70 GSA Forms.
The GSA Form 1602, Notice Concerning Solicitation, may be used to:
(a) Describe the type of contract, the duration of the contract,
and the type of supplies or services being procured;
(b) Direct the attention of prospective offerors to special
requirements which if overlooked, may result in rejection of the offer;
(c) Highlight significant changes from previous solicitations
covering the same supplies and services; and
(d) Include other special notices as appropriate.
PART 515--CONTRACTING BY NEGOTIATION
20. Section 515.106-70 is revised to read as follows:
515.106-70 Examination of records by GSA clause.
The contracting officer shall insert the clause at 48 CFR 552.215-
70, Examination of Records by GSA or at 48 CFR 552.215-71 Examination
of Records by GSA (Multiple Award Schedule), in solicitations and
contracts that
(a) Involve the use or disposition of Government-furnished
property,
(b) Provide for advance payments, progress payments based on cost,
or guaranteed loan,
(c) Contain a price warranty or price reduction clause,
(d) Involve income to the Government where income is based on
operations that are under the control of the contractor,
(e) Include an economic price adjustment clause,
(f) Are requirements, indefinite-quantity or letter type contracts
as defined in FAR Part 16,
(g) Are subject to adjustment based on a negotiated cost escalation
base or
(h) Contain the provision at FAR 52.223-4, Recovered Material
Certification. The clause at 48 CFR 552.215-71 shall be used for
solicitations issued and contracts awarded under the multiple award
schedule program. The contracting officer may modify the clause to
define the specific area of audit (e.g., the use or disposition of
Government-furnished property, compliance with the price reduction
clause). Counsel and the Assistant Inspector General-Auditing or
Regional Inspector General-Auditing, as appropriate, must concur in any
modifications to the clause.
515.412 [Removed]
21. Section 515.412 is removed.
22. Section 515.414-70 is revised to read as follows:
515.414-70 GSA Forms.
The GSA Form 1602, Notice Concerning Solicitation, may be used as
prescribed in 48 CFR 514.201-70.
23. The section heading for 515.804 is revised to read as follows:
515.804 Cost or pricing data and information other than cost or
pricing data.
515.804-3 [Reserved]
24. Section 515.804-3 is removed and reserved.
25. Section 515.804-6 is revised to read as follows:
515.804-6 Instructions for submission of cost or pricing data or
information other than cost or pricing data.
(a) Contracting officers should use Alternate IV of the FAR
provision at 52.215-41, Requirements for Cost or Pricing Data or
Information Other Than Cost or Pricing Data, to provide the format for
submission of information other than cost or pricing data for multiple
award schedule (MAS) contracts. To provide for uniformity in request
under the MAS program, contracting officers should insert the following
in paragraph (b) of the provisions:
(1) An offer prepared and submitted in accordance with the
provision at 552.212-70, Preparation of Offer (Multiple Award
Schedule);
(2) Commercial sales practices submitted in the format provided
in this solicitation in accordance with the instructions at Table
515-1 of the GSA Acquisition Regulation (48 CFR 515-1); and
(3) Any additional supporting information requested by the
Contracting Officer to determine whether the price(s) offered is
fair and reasonable.
(4) By submission of an offer in response to this solicitation
or a request for modification, the Offeror grants the Contracting
officer or an authorized representative the right to examine, at any
time before award, books, records, documents, papers, and other
directly pertinent records to verify any request for and exception
to the requirement for cost or pricing data, and the reasonableness
of prices(s) and for two years after award or modification of this
contract to verify that the information submitted was complete,
current and accurate. Access does not extend to cost or profit
information or other data relevant solely to the Offeror's
determination of the prices to be offered in the catalog or
marketplace.
(b) Contracting officers shall insert the following format for
commercial sales practices in the exhibits or attachments section of
the solicitation (see FAR 12.303). Paragraph (5) may be included when
the contracting officer, based on market research, anticipates receipt
of offers from dealers without significant commercial sales.
Commercial Sales Practices
Name of Offeror--------------------------------------------------------
SIN--------------------------------------------------------------------
Note: Please refer to provision 552.212-70, PREPARATION OF OFFER
(MULTIPLE AWARD SCHEDULE), for additional information concerning
your offer.
(1) Request for exception to the requirement for cost and
pricing data.
(a) Do you request an exception to the requirement for
submission of cost or pricing data [Check applicable item]
(i) ______ based on the fact that you have sold substantial
quantities of the commercial items offered to the general public at
or based on an established catalog or market price (see FAR 15.804-
1(b)(2)(iv)); or
(ii) ______ under the authority of FAR 15.804-1(a)(2) for
commercial items.
(b) Provide the dollar value of sales to the general public at
or based on an established catalog or market price during the
previous 12 month period or the offerors last fiscal year.
$________. in the event that a dollar value is not an appropriate
measure of the sales, provide and describe your own measure of the
sales of the item (FAR 15.804-1(b)(2)(iv). You may qualify for an
exception under the authority of FAR 15.804-1(a)(2), even though
substantial sales have not been made, although that exception
requires that special post award access to records be included in
the contract (see 52.215-43, Audit-Commercial Items).
(2) Show total estimated sales to the Government for the
contract term, excluding options, for the SIN offered. $________
(3) Are the discounts which you offer the Government equal to or
better than your best discount to any customer acquiring the same
items offered for this SIN regardless of quantity or terms and
conditions? YES ______ NO ______ See definition of ``discount'' in
552.212-70.
(4)(a) Provide information as requested for each SIN (or group
of SINs for which the information is the same) in accordance with
the instructions at 48 CFR Table 515-1 which is provided in this
solicitation for your convenience. The information should be
provided in the chart below. Rows should be added to accommodate as
many customers as required.
[[Page 6168]]
------------------------------------------------------------------------
Column 5--
Column 1-- Column 2-- Column 3-- Column 4-- additional
customer discount quantity/ FOB term discounts or
volume concessions
------------------------------------------------------------------------
------------------------------------------------------------------------
(b) Do any deviations from the discounting practices disclosed
ever result in better discounts (lower prices) than indicated? YES
______ NO ______. If YES, explain deviations in accordance with the
instructions at 48 CFR Table 515-1 which is provided in this
solicitation for your convenience.
(5) If the Offeror is a dealer/reseller, the sales information
relative to the manufacturer's pricing to the dealer required by
paragraph (b)(1) through (4) above together with written access to
the manufacturer's records in accordance with 52.215-41 (Alt IV),
should be provided separately by the offeror for each item/SIN from
a single manufacturer whose total sales under any resulting contract
are expected to exceed $500,000. The information is required in
order to enable the Government to make a determination that the
offered price is fair and reasonable. To expedite the review and
processing of offers the dealer/reseller submitting the offer should
advise the manufacturer(s) of this requirement. The contracting
officer may require the information be submitted on electronic media
with commercially available spreadsheet(s). The information may be
provided by the manufacturer directly to the Government. If the
manufacturer's items(s) is being offered by multiple dealers/
resellers, only one copy of the requested information should be
submitted to the Government. In addition, the dealer/reseller
submitting the offer shall submit the following information along
with a listing of contact information regarding each of the
manufacturers whose products and/or services are included in the
offer (include the manufacturer's name, address, the manufacturer's
contact point, telephone number, and FAX number) for each model
offered by SIN:
(a) Manufacturer's Name
(b) Manufacturer's Part Number
(c) Dealer's/Reseller's Part Number
(d) Product Description
(e) Manufacturer's List Price
(f) Dealer's/Reseller's percentage discount from List Price or net
prices
(End of Format)
(c) The contracting officer should include the instructions for
completing the commercial sales practices format in Table 551-1 in
solicitations issued under the multiple award schedule program.
Table 515-1.--Instructions for Commercial Sales Practices Format
------------------------------------------------------------------------
-------------------------------------------------------------------------
If you responded ``YES'' to question (3), on the COMMERCIAL SALES
PRACTICES FORMAT, complete the chart for the customer(s) who receive
your best discount. If you responded ``NO'' to question (3), complete
the chart for all customers or customer categories to whom you sell at
a discount which equals or exceeds the discount(s) offered to the
Government under this solicitation or with which the Offeror has a
current agreement to sell at a discount which equals or exceeds the
discount(s) offered under this solicitation. Such agreement shall be in
effect on the date the offer is submitted or contain an effective date
during the proposed multiple award schedule contract period. The
Offeror shall also disclose any changes to discount(s) and discount
policies which occur after the offer is submitted, but before the close
of negotiations. If the Offeror's discount practices vary by model or
product line, the discount information should be by model or product
line as appropriate. The offeror may limit the number of models or
product lines reported to those which in total anticipated sales exceed
75% of the estimated value of the special item number (SIN).
Column 1--Identify the applicable customer or category or customer. A
``customer is any entity, except the Federal Government, which acquires
supplies or services from the Offeror. The term customer includes, but
is not limited to original equipment manufacturers, value added
resellers, state and local governments, distributors, educational
institutions (an elementary, junior high, or degree granting school
which maintains regular faculty and established curriculum and an
organized body of students), dealers, national accounts, and end users.
In any instance where the Offeror is asked to disclose information for a
customer, the Offeror may disclose information by category or customer
if the offeror's discount policies are the same for all customers in the
category. (Use a separate line for each customer or category of
customer.)
Column 2--Identify the discount. The term ``discount'' is as defined
in solicitation provision 552.212-70 Preparation of Offer (Multiple
Award Schedule). Indicate the best discount at which the Offeror
customarily or repetitively sells to the customer or category of
customer identified in column 1, without regard to quantity; terms and
conditions of the agreements under which the discounts are given, and
whether they are written or oral. Net prices or discounts off of other
price lists should be expressed as percentage discounts from the price
list which is the basis for your offer. If the price lists which are the
basis of the discounts given to the customers identified in the chart
are different than the price list submitted upon which your offer is
based, identify the type of title and date of each price list. The
contracting officer may require submission of these price lists. To
expedite evaluation, offerors may provide these price lists at the time
of submission.
Pricing information need be provided only on customary or repetitive
sales. Information need not include erratic, ad hoc discounting;
however, the existence of such discounting shall be disclosed. This
disclosure should include a discussion of ad hoc discounting practices,
including the types of circumstances when ad hoc discounts are given and
the frequency of occurrence: i.e., a statement ``the ad hoc sales do not
exceed $______ per year'' or ``the ad hoc sales do not exceed ______% of
total sales.'' To be considered ``ad hoc discounting'' the practice
shall not: (a) represent a significant pricing practice: that is,
accounting for more than a marginal portion of the total commercial
sales; (b) establish a preferred customer: e.g., discounts to state and
local governments, or repetitive discounts received by a single
customer; (c) include other than low value, extraordinary price
reductions due to unique situations.
Column 3--Identify the quantity or volume of sales. Insert the minimum
quantity or sales volume which the identified customer or category of
customer must either purchase/order, per order or within a specified
period, to earn the discount. Specify the period of relevant sales
accumulation.
Column 4--Indicate the FOB delivery term for each identified customer.
(See FAR 47.3 for an explanation of FOB delivery terms.)
Column 5--Indicate additional discounts or concessions regardless of
quantity granted to the identified customer or category of customer. The
additional discounts may include per order quantity discount; aggregate
discount, prompt payment discount. Concessions are defined in
solicitation provision 552.212-70 Preparation of Offers (Multiple Award
Schedule). If the space provided is inadequate, the disclosure should be
made on a separate sheet by reference.
------------------------------------------------------------------------
(d) The contracting officer shall insert the clause at 48 CFR
552.215-72, Price Adjustment for Incomplete, Not Current or Inaccurate
Information Other Than Cost or Pricing Data, in solicitations and
contracts to be awarded under the multiple award schedule program.
PART 538--FSS SCHEDULE CONTRACTING
26. Part 538 heading is revised as set forth above.
[[Page 6169]]
538.000 [Removed]
27. Section 538.000 is removed.
28. Section 538.270 is added to read as follows:
538.270 Evaluation of multiple award schedule offers.
(a) The Government will seek to obtain the offeror's best discount
(most favored customer). However, the Government recognizes that the
terms and conditions of commercial sales vary and that there may be
legitimate reasons why the best discount is not achieved.
(b) The contracting officer will establish negotiation objectives
and determine price reasonableness subject to the requirements of
paragraphs (c) through (e) of this section.
(c) The contracting officer will establish negotiation objectives
based on a review of relevant data. If an exception may apply pursuant
to FAR 15.804-1(a)(2), then information to be acquired pursuant to FAR
15.804-5(b) (1) and (2) shall be limited to that which is reasonably
available and quantifiable.
(d) When establishing negotiation objectives and determining price
reasonableness, contracting officers will compare the terms and
conditions of agreements with customers. The contracting officer will
consider the following factors to determine the Government's price
negotiation objectives:
(1) Aggregate volume of anticipated purchases;
(2) The purchase of a minimum quantity or a pattern of historic
purchases;
(3) Discounts/prices offered;
(4) Length of the contract period;
(5) Warranties, training, maintenance included in the purchase
price or provided at additional cost to the product prices;
(6) Ordering and delivery practices; and
(7) Any other relevant information including differences between
the MAS solicitation and commercial terms and conditions that may
warrant differentials between the offer and the discounts offered to
the best customers. In cases where the best discount is not offered to
the Government, the offeror is responsible for identifying,
substantiating and valuating any asserted differences.
(e) The contracting officer may not award a contract containing
pricing which is less favorable than the best discount the offeror
extends to any commercial customer purchasing under circumstances
comparable to the Government, unless the contracting officer makes a
written determination that
(1) The prices offered to the Government are fair and reasonable,
even though comparable discounts were not negotiated, and
(2) Award of a contract is otherwise in the best interest of the
Government.
29. Section 538.271 is added to read as follows:
538.271 MAS contract awards.
(a) MAS awards will, to the maximum extent practicable, be
commercial items negotiated as a discount from established catalog
prices for items sold in substantial quantities to the general public.
(b) Before awarding any MAS contract, the contracting officer will
determine whether offered prices are fair and reasonable in accordance
with FAR subparts 15.8 and 15.9 and 48 CFR 538.270.
PART 539--MANAGEMENT, ACQUISITION, AND USE OF INFORMATION
RESOURCES--RESERVED
30. Part 539 is reserved.
539.000 [Removed]
31. Section 539.000 is removed
PART 543--CONTRACT MODIFICATIONS
32. Section 543.205 is amended by adding paragraph (c) to read as
follows:
543.205 Contract clauses.
* * * * *
(c) The contracting officer shall insert the clause at 48 CFR
552.243-72, Modifications (Multiple Award Schedule), in solicitations
and multiple award schedule contracts. Alternate I should be used when
stable technology is involved and few changes are expected.
PART 546--QUALITY ASSURANCE
33. Section 546.710 is amended by revising paragraph (a)(2) to read
as follows:
546.710 Contract Clauses.
(a) * * *
(2) If commercial products or items are being acquired under a
program other than Multiple Award Schedules, the contracting officer
shall use the clause at 48 CFR 552.247.17 with its Alternate I.
* * * * *
PART 552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
552.209-73 [Amended]
34. The clause at section 552.209-73 is amended by revising the
date of the clause to read ``(FEB 1996)'' and by inserting a period
after the word ``default'' and removing all remaining text beginning
with the word ``under.''
552.210-70 [Redesignated as 552.211-71 and amended]
35. Section 552.210-70 is redesignated as 552.211-71, the
introductory paragraph is amended by removing ``510.011(a)'' and
inserting ``48 CFR 511.204(a)'', and the date of the clause is revised
to read ``(FEB 1996)''.
552.210-71 [Redesignated as 552.211-72 and amended]
36. Section 552.210-71 is redesignated as 552.211-72, the
introductory paragraph is amended by removing ``510.011(b)'' and
inserting ``48 CFR 511.204(b)'', and the date of the clause is revised
to read ``(FEB 1996)''.
552.210-72 [Redesignated as 552.211-79]
37. Section 552.210-72 is redesignated as 552.211-79, the
introductory paragraph is amended by removing ``510.011(c)'' and
inserting ``48 CFR 511.404(a)'', by revising the date of the basic
clause and the Alternate I to read ``(FEB 1996)'' and by removing all
the text in the last sentence in the basic clause after the phrase
``reject the supplies'' and inserting a period after ``supplies''.
552.210-73 [Redesignated as 552.211-80 and amended]
38. Section 552.210-73 is redesignated as 552.211.80, the
introductory paragraph is amended by removing ``510.011(c)'' and
inserting ``48 CFR 511.404(a)'', by revising the date of the clause to
read ``(FEB 1996)'' and by removing all the text in the last sentence
after the phrase ``reject the supplies'' and inserting a period after
the word ``supplies''.
552.210-74 [Redesignated as 552.211-70]
39. Section 552.211-70 is removed, section 552.210-74 is
redesignated as 552.211-70, the introductory paragraph is amended by
removing ``510.011(d)'' and inserting ``48 CFR 511.170(c)'' and by
revising the date of the clause to read ``(FEB 1996)''.
552.210-75 [Redesignated as 552.211-73]
40. Section 552.210-75 is redesignated as 552.211-73, the
introductory paragraph is amended by removing ``510.011(e)'' and
inserting
[[Page 6170]]
``48 CFR 511.204(c)'' and by revising the date of the clause to read
``(FEB 1996)''.
552.210-76 [Redesignated as 552.211-74 and amended]
41. Section 552.210-76 is redesignated as 552.211-74, the
introductory paragraph is amended by removing ``510.011(f)'' and
inserting ``48 CFR 511.204(d)'', by revising the date of the clause to
read ``(FEB 1996)'', and by removing ``552.210-75'' from the text of
the clause and inserting ``48 CFR 552.211-73''.
552.210-77 [Redesignated as 552.211-75 and amended]
42. Section 552.211-77 is redesignated as 552.211-75, the
introductory paragraph is amended by removing ``510.011(g)'' and
inserting ``48 CFR 511.204(e)'' and by revising the date of the clause
to read ``(FEB 1996)''.
552.210-78 [Redesignated as 552.211-76 and amended]
43. Section 552.210-78 is redesignated as 552.211-76, the
introductory paragraph is amended by removing ``510.011(h)'' and
inserting ``48 CFR 511.204(f)'' and by revising the date of the clause
to read ``(FEB 1996)''.
552.210-79 [Redesignated as 552.211-77 and amended]
44. Section 552.210-79 is redesignated as 552.211-77, the
introductory paragraph is amended by removing ``510.011(i)'' and
inserting ``48 CFR 511.204(g)'' and by revising the date of the clause
to read ``(FEB 1996)''.
45. Section 552.211-78 is added to read as follows:
552.211-78 Commercial Delivery Schedule (Multiple Award Schedule).
As prescribed in 48 CFR 511.404(a)(2), insert the following clause:
Commercial Delivery Schedule (Multiple Award Schedule) (Feb 1996)
(a) Time of Delivery. The Contractor shall deliver to
destination within the number of calendar days after receipt of
order (ARO) in the case of F.O.B. Destination prices; or to place of
shipment in transit in the case of F.O.B. Origin prices, as set
forth below. Offerors shall insert in the ``Time of Delivery (days
ARO)'' column in the schedule of Items a definite number of calendar
days within which delivery will be made. In no case shall the
offered delivery time exceed the Contractor's normal commercial
practice. The Government requires the Contractor's normal commercial
delivery time, as long as it is less than the ``stated'' delivery
time(s) shown below. If the Offeror does not insert a delivery time
in the schedule of items, the Offeror will be deemed to offer
delivery in accordance with the Government's stated delivery time,
as stated below:
----------------------------------------------------------------------------------------------------------------
Items or group of items (special Government's stated delivery time Contractor's normal commercial
item No. or nomenclature) (days ARO) delivery time
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
(b) Expedited Delivery Times. For those items that can be
delivered quicker than the delivery times in paragraph (a), above,
the Offeror is requested to insert below, a time (hours/days ARO)
that delivery can be made when expedited delivery is requested.
------------------------------------------------------------------------
Item or group of items (special Expedited delivery time (hours/days
item No. of nomenclature) ARO)
------------------------------------------------------------------------
------------------------------------------------------------------------
(c) Overnight and 2-Day Delivery Times. Ordering activities may
require overnight or 2-day delivery. The Offeror is requested to
annotate its price list or by separate attachment identify the items
that can be delivered overnight or within 2 days. Contractors
offering such delivery services will be required to state in the
cover sheet to its FSS price list details concerning this service.
(End of Clause)
Sec. 552.212-1 [Redesignated as 552.211-1 and amended]
46. Section 552.212-1 is redesignated as 552.211-1, paragraph (a)
is amended by removing the paragraph designation ``(a)'' and by
removing ``512.104(a)(1)'' and inserting ``48 CFR 511.404(a)(1)'', by
revising the date of the clause and the Alternate I to read ``(FEB
1996)'' and by removing paragraph (b).
Sec. 552.212-70 [Redesignated as 552.211-81 and amended]
47. Section 552.212-70 is redesignated as 552.211-81, the
introductory paragraph is amended by removing ``512.104(a)(3)'' and
inserting ``48 CFR 511.404(a)(4)'' and by revising the date of the
basic clause and the Alternate I clause to read ``(FEB 1996)''.
Sec. 552.212-71 [Redesignated as 552.211-82 and amended]
48. Section 552.212-71 is redesignated as 52.211-82, the
introductory paragraph is amended by removing ``512.104(a)(4)'' and
inserting ``48 CFR 511.404(a)(5)'' and by revising the date of the
clause to read ``(FEB 1996)''.
Sec. 552.212-72 [Redesignated as 552.211-83 and amended]
50. Section 552.212-72 is redesignated as 552.211-83, the
introductory paragraph is amended by removing ``512.104(a)(5)'' and
inserting ``48 CFR 511.404(a)(6)'' and by revising the date of the
basic and alternate clause to read ``(FEB 1996)''.
Sec. 552.212-74 [Redesignated as 552.211-84 and amended]
51. Section 552.212-74 is redesignated as 552.211-84, the
introductory paragraph is amended by removing ``512.104(b)'' and
inserting 48 CFR 511.404(b)'' and by revising the date of the clause to
read ``(FEB 1996)''.
52. Section 552.212-70 is added to read as follows:
552.212-70 Preparation of Offer (Multiple Award Schedule)
As prescribed in 48 CFR 512.301(a)(1), insert the following clause:
552.212-70 Preparation of Offer (Multiple Award Schedule) (Feb 1996)
(a) Definitions. Concession, as used in this solicitation, means
a benefit, enhancement or privilege (other than a discount), which
either reduces the overall costs of a customer's acquisition or
encourages a customer to consummate a purchase. Concessions include,
but are not limited to freight allowance, extended warranty,
extended price guarantees, free installation and bonus goods.
Discount, as used in this solicitation, means a reduction to
catalog prices (published or unpublished). Discounts include, but
are not limited to, rebates, quantity discounts, purchase option
credits, and any other terms or conditions which reduce the amount
of money a customer ultimately pays for goods or services ordered or
received. Any net price lower than the list price is considered a
``discount'' by the percentage difference from the list price to the
net price.
(b) For each Special Item Number (SIN) included in an offer, the
Offeror shall provide the information outlined in paragraph (c).
Offerors may provide a single response
[[Page 6171]]
covering more than one SIN, if the information disclosed is the same
for all products under each SIN. If discounts and concessions vary
by model or product line, offerors shall ensure that information is
clearly annotated as to item or items referenced.
(c) Provide information described below for each SIN:
(1) Two copies of the offeror's current published (dated or
otherwise identified) commercial descriptive catalogs and/or price
list(s) from which discounts are offered. Special catalogs or price
lists printed for the purpose of this offer, showing only net prices
to the Government or references to previous submissions, are not
acceptable.
(2) Next to each offered item in the commercial catalog and/or
price list, the Offeror shall write the special item number under
which the item is being offered. All other items shall be marked
``excluded,'' lined out, and initialed by the offeror.
(3) The discount(s) offered under this solicitation.
(4) A description of any additional discounts offered, such as
prompt payment discounts, quantity/dollar volume discounts (indicate
whether models/products can be combined within the SIN or whether
SINs can be combined to earn discounts, blanket purchase agreement
discounts, or purchase option credits. If the terms of sale
appearing in the commercial catalogs or price list on which an offer
is based are in conflict with the terms of this solicitation the
latter shall govern.
(5) A description of concessions offered under this solicitation
which are not granted to other customers. Such concessions may
include, but are not limited to, an extended warranty, a return/
exchange goods policy, or enhanced or additional services.
(6) If the Offeror is a dealer/reseller or the Offeror will use
dealers to perform any aspect of contract awarded under this
solicitation, describe the functions, if any, that the dealer/
reseller will perform.
(End of Provision)
53. Section 552.212-71 is added to read as follows:
Sec. 552.212-71 Contract terms and conditions applicable to GSA
acquisition of commercial items.
As prescribed in 48 CFR 512.301(a)(2), insert the following
provision:
Contract Terms and Conditions Applicable to GSA Acquisition of
Commercial Items (Feb 1996)
The Contractor agrees to comply with any provision or clause
that is incorporated herein by reference to implement agency policy
applicable to acquisition of commercial times or components. The
provision or clause in effect based on the applicable regulation
cited on the date the solicitation is issued applies unless
otherwise stated herein. The following provisions and clauses are
incorporated by reference:
[The contracting officer should either check the clauses that apply
or delete the clauses that do not apply from the list. The
contracting officer may add the date of the clause if desired for
clarity.]
--552.203-70 Restriction on Advertising
--552.211-73 Marking
--552.215-70 Examination of Records by GSA
--552.212-71 Examination of Records by GSA (Multiple Award
Schedule)
--552.25-72 Price Adjustment for Incomplete, Not Current or
Inaccurate Information Other Than Cost or Pricing Data
--552.219-71 Allocation of Orders--Partially Set-Aside Items
--552.228-75 Workmen's Compensation
--552.229-70 Federal, State, and Local Taxes
--552.232-8 Discounts for Prompt Payment
--552.232-23 Assignment of Claims
--552.232-70 Payments by Electronic Funds Transfer
--552.232-77 Availability of Funds
--552.232-78 Adjusting Payments
--552.232-79 Final Payment
--552.237-70 Qualifications of Offerors
--552.237-71 Qualifications of Employees
--552.238-72 Contractor's Report of Sales
--552.238-74 Submission and Distribution of Authorized FSS Schedule
Price List
--552.238-76 Price Reductions
--552.242-70 Status Report of Orders and Shipments
--552.243-72 Modifications (Multiple Award Schedule)
--552.246-73 Warranty--Multiple Award Schedule
--552.246-76 Warranty of Pesticides
(End of Provision)
54. Section 552.212-72 is added to read as follows:
552.212-73 Contract terms and conditions required to implement
statutes or Executive Orders applicable to GSA acquisition of
commercial items.
As prescribed in 48 CFR 512.301(a)(3), insert the following
provision:
Contract Terms and Conditions Required to Implement Statutes or
Executive Orders Applicable to GSA Acquisition of Commercial Items (Feb
1996)
The Contractor agrees to comply with any provision or clause
that is incorporated herein by reference to implement provisions of
law or Executive Orders applicable to acquisition of commercial
items or components. The provision or clause in effect based on the
applicable regulation cited on the date the solicitation is issued
applies unless otherwise stated herein. The following provisions and
clauses are incorporated by reference:
[The contracting officer should either check the clauses that apply
or delete the clauses that do not apply from the list. The
contracting officer may add the date of the clause if desired for
clarity.]
--552.223-70 Hazardous Substances
--552.223-71 Hazardous Material Information
--552.223-72 Nonconforming Hazardous Material
--552.225-70 Buy American Act--Hand or Measuring Tools or Stainless
Steel Flatware
--552.225-71 Notice of Procurement Restriction--Hand or Measuring
Tools or Stainless Steel Flatware
--552.238-70 Identification of Electronic Office Equipment
Providing Accessibility for the Handicapped
--552.238-75 Identification of Energy-Efficient Office Equipment
and Supplies Containing Recovered Materials or Other Environmental
Attributes
--552.238-77 Industrial Funding Fee
(End of Clause)
55. Section 552.212-73 is added to read as follows:
552.212-73 Evaluation--Commercial Items (Multiple Award Schedule).
As prescribed in 48 CFR 512.301(a)(4), insert the following
provision:
552.212-73 Evaluation--Commercial Items (Multiple Award Schedule) (Feb
1996)
(a) The Government may make multiple awards for the supplies or
services offered in response to this solicitation that meet the
definition of a ``commercial item'' in FAR 52.202-1. Award is to be
based upon a catalog or market price exception (FAR 15.804-1(a) (i)
and (ii)) to the requirement for cost or pricing data or if other
exceptions are not available, an exception for commercial items (FAR
15.804-1(a)(2)), without submission of cost or pricing data. Awards
may be made to those responsible offerors that offer reasonable
pricing, conforming to the solicitation, and will be most
advantageous to the Government, taking into consideration the
multiplicity and complexity of items of various manufacturers and
the differences in performance required to accomplish or produce
required end results, production and distribution facilities, price,
compliance with delivery requirements, and other pertinent factors.
By providing a selection of comparable supplies or services,
ordering activities are afforded the opportunity to fulfill their
requirements with the item(s) that constitute the best value and
that meet their needs at the lowest overall cost. In exceptional
circumstances, if an item does not qualify for an exception from
cost or pricing data requirements, the contracting officer may
consider cost or pricing data if pricing cannot be reasonably
evaluated without it, and procurement of the item is the best
interest of the Government.
(b) A written notice of award or acceptance of an offer, mailed
or otherwise furnished to the offeror within the time for acceptance
specified in the offer, shall result in a binding contract without
further action by either party. Before the offer's specified
expiration time, the Government may accept an offer (or part of an
offer), whether or not there are negotiations after its receipt,
unless a written notice of withdrawal is received before award.
(End of Provision)
[[Page 6172]]
Alternate I (FEB 1996)
When anticipating competition of identical items, add the
following paragraph after paragraph (b) of the basic provision.
(c) The Government reserves the right to award only one contract
for all or part of a manufacturer's product line. When two or more
offerors (e.g., dealer/resellers) offer the identical product, award
may be made competitively to only one offeror on the basis of the
lowest price. (Discounts for early payment will not be considered as
an evaluation factor in determining the low offeror). During initial
open season for an option period, any offers that are equal to or
lower than the current contract price received for identical items
will be considered. Current contractors will also be allowed to
submit offers for identical items during this initial open season.
The current contractor which has the identical item on contract will
be included in the evaluation process. The Government will evaluate
all offers and may award only one contract for each specified
product or aggregate group.
56. Section 552.215-70 is amended by revising the date of the
clause and the last sentence of the clause to read as follows:
552.215-70 Examination of records by GSA.
* * * * *
Examination of Records by GSA (Feb 1996)
* * * * *
The term ``subcontract'' as used in this clause excludes (a)
purchase orders not exceeding $100,000 and (b) subcontracts or purchase
orders for public utility services at rates established for uniform
applicability to the general public.
57. Section 552.215-71 is added to read as follows:
552.215-71 Examination of records by GSA (Multiple Award Schedule).
As prescribed in 48 CFR 515.106-70, insert the following clause:
Examination of Records by GSA (Multiple Award Schedule) (Feb 1996)
The Contractor agrees that the Administrator of General Services
or any duly authorized representative shall, until the expiration of
2 years after the end of the basic contract period or after the end
of the option period for any option periods, have access to and the
right to examine any books, documents, papers and records of the
Contractor involving transactions related to this contract for
overbillings, billing errors, compliance with the Price Reduction
clause and compliance with the Industrial Funding Fee clause of this
contract. This right is in addition to the right to examine
information provided by FAR 52.215-41 (Alt IV) and FAR 52.215-43, if
applicable)
(End of Clause)
58. Section 552.215-72 is added to read as follows:
552.215-72 Price adjustment for incomplete, not current or inaccurate
information other than cost or pricing data.
As prescribed in 48 CFR 515.804-6(d), insert the following clause:
Price Adjustment for Incomplete, not Current or Inaccurate Information
Other Than Cost or Pricing Data (Feb 1996)
(a) If, subsequent to the award of any contract resulting from
this solicitation or modification of this contract, it is found that
any price negotiated in this contract was increased by a significant
amount because of the occurrence of (1), (2) or (3) below, the
contract price shall be reduced by such amount of the increase.
(i) The information requested by the Government and submitted by
the offeror (contractor) was not complete; or
(2) The information submitted was not current and accurate; or
(3) Changes in the Contractor's commercial prices, discounts or
discount policies which occurred after the original submission were
not disclosed prior to the completion of negotiations.
(b) The Government will consider information submitted to be
current, accurate and complete if the data is current, accurate and
complete as of 14 calendar days prior to the solicitation closing
date or the date it is submitted whichever is later. Failure to
agree on the amount of the decrease shall be resolved as a dispute.
(End of Clause)
552.216-71 [Amended]
59. Section 552.216-71 is amended by revising the date of the
clause to read ``FEB 1996'' and amending paragraph (d)(2) by removing
``Discount Schedule and Marketing Data'' and inserting ``Commercial
Sales Price format.''
552.238-74 [Amended]
60. Section 552.238-74 is amended by removing ``GSA'' in the
section heading, clause heading, paragraphs (b), (c)(1)(i), (c)(1)(ii),
(c)(2)(i) and (e) and inserting ``FSS'' and by revising the date of the
clause to read ``(FEB 1996)''.
61. Section 552.243-72 is added to read as follows:
552.243-72 Modifications (Multiple Award Schedule).
As prescribed in 48 CFR 543.205(c), insert the following clause:
552.243-72 MODIFICATIONS (MULTIPLE AWARD SCHEDULE) (FEB 1996)
(a) General. The Contractor may request a contract modification
by submitting a request to the Contracting Officer for approval,
except as noted in paragraph (e) of this clause. A separate request
should be submitted for each type of proposed modification. At a
minimum, every request shall describe the proposed change(s) and
provide the rationale for the requested change(s).
(b) Types of Modifications.
(1) Additional items/additional SIN's. When requesting
additions, the following information must be submitted:
(i) A request for an exemption from the requirement to submit
cost and pricing data as required by 52.215-41 (ALT IV) shall be
provided. To add items, submit the information requested in
paragraph 1(a) of the Commercial Sales Format. To add SIN's provide
the information requested in paragraph (1) and (2) of the Commercial
Sales Practice Format.
(ii) Discount information for the new item(s) or new SIN(s) as
required by 52.215-41 (ALT IV) must be provided. Specifically,
submit the information requested in paragraphs 3 through 5 of the
Commercial Sales Practice Format. If this information is the same as
the initial award, a statement to that effect may be submitted
instead.
(iii) Information about the new item(s) or new SIN(s) as
described in 552.212-70, Preparation of Offer (Multiple Award
Schedule) is required.
(iv) Delivery time(s) for the new item(s) or the item(s) under
the new SIN(s) must be submitted in accordance with 552.211-78,
Commercial Delivery Schedule (Multiple Award Schedules).
(v) Production point(s) for the new item(s) or the item(s) under
the new SIN(s) must be submitted if required by 52.215-20, Place of
Performance.
(vi) Hazardous Material information (if applicable) must be
submitted as required by 52.223-3 (ALT I), Hazardous Material
Identification and Material Safety Data; and 552.223-71, Hazardous
Material Information; and as requested by the Separate Charge for
Performance Oriented Packaging clause of this contract, if
applicable.
(vii) Recovered Material estimate(s) and certification (if
applicable) must be submitted as required by 52.223-8 (or 52.223-8
(ALT I) or 52.223-8 (ALT II), Estimate of Percentage of Recovered
Material for Designated Items to be used in the Performance of the
Contract; and 52.223-9, Certification of Recovered Material Content
for EPA Designated Items used in Performance of the Contract.
(viii) A statement that the request for additional item(s) or
item(s) under the new SIN(s) is in compliance with 552.225-9, Trade
Agreements Act, and 552.225-8, Trade Agreements Act Certificate is
required.
(2) Deletions. The Contractors shall provide an explanation for
the deletion. The Government reserves the right to reject any
subsequent offer of the same item or a substantially equal item at a
higher price during the same contract period, if the contracting
officer finds the higher price to be unreasonable when compared with
the deleted item.
(3) Price Reduction. The Contractor shall indicate whether the
price reduction falls under the item (i), (ii), or (iii) of
subparagraph (c)(1) of the Price Reduction clause at 552.238-76. If
the price reduction falls under item (i) or (ii), the Contractor
shall submit a copy of the dated commercial price list. If the price
reduction falls under item (iii), the Contractor shall submit a copy
of the applicable price list(s), bulletins or letters or customer
agreements which outline the effective date, duration, terms and
conditions of the price reduction.
[[Page 6173]]
(4) Revision of Commercial Price List. The Contractor may
request a modification to substitute a new catalog or price list for
the one originally submitted if, after award and no later than 30
calendar days before the start of the schedule contract period, the
Contractor changes its established commercial catalog or price list
on which the contract was awarded. The new catalog or price list
shall be submitted to the Contracting Officer along with a statement
that (i) the new commercial price list is or will be in effect prior
to the start of the contract period, and (ii) the discount(s)
offered to the Government remain at the same ratio to those
available to the customer (or category of customer) which was the
basic of award.
(c) Effective dates. The effective date of any modification is
the date specified in the modification, except as otherwise provided
in the Price Reduction clause at 552.238-76.
(d) Electronic file updates. The Contractor shall update
electronic file submissions to reflect all modifications. Except for
price reductions and corrections, the Contractor shall obtain the
contracting officer's approval before transmitting changes. Contract
modifications will not be made effective until updates to electronic
files are received. Price reductions and correction may be
transmitted without prior approval. However, the contracting officer
shall be notified as set forth in the Price Reduction clause at
552.238-76.
(e) Amendments to paper Federal Supply Schedule Price Lists. The
Contractor shall distribute a supplemental paper Federal Supply
Schedule Price List reflecting accepted changes within 15 days after
the effective date of the modification. At a minimum, distribution
shall be made to these ordering activities that previously received
the basic document. In addition, two copies of the supplemental
price list shall be submitted to the contracting officer, and one
copy shall be submitted to the FSS Schedule Information Center.
(End of Clause)
Alternate I (Feb 1996)
Substitute the following introductory text in subparagraph (1)
for the introductory text in subparagraph (1) of the basic clause.
(1) Additional items/additional SIN's. Consideration for adding
new items or new SIN's will be given 3 months into the contract
period. After then, the contractor may request additions at any
time. When requesting additions the following information must be
submitted.
62. Section 552.246-73 is amended by revising the date of the
clause and the basic clause to read as follows:
552.246-73 Warranty--Multiple Award Schedule.
* * * * *
Warranty--Multiple Award Schedule (Feb 1996)
Unless specified otherwise in this contract, the Contractor's
standard commercial warranty as stated in the Contractor's
commercial price list will apply to this contract.
(End of Clause)
552.253-70 [Removed]
63. Section 552.253-70 is removed.
PART 570--ACQUISITION OF LEASEHOLD INTERESTS IN REAL PROPERTY
570.308-2 [Amended]
64. Section 570.308-2 is amended in paragraph (c) by removing ``and
515.804-3'' at the end of the sentence.
570.602-2 [Amended]
65. Section 570.602-2 is amended in paragraphs (c)(3) and (d) by
removing ``and 515.804-3''.
Dated: February 6, 1996.
Ida M. Ustad,
Deputy Associate Administrator for Acquisition Policy.
[FR Doc. 96-3593 Filed 2-15-96; 8:45 am]
BILLING CODE 6820-61-M
Complete official Federal Register PDF
FR Doc. 96-3591 North American Free Trade Agreement (NAFTA)Implementation of Duty-Deferral Program Provisions
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Pages 6110-6111]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3591]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Customs Service
19 CFR Parts 10, 113, 141, 144 and 181
[T.D. 96-14]
RIN 1515-AB87
North American Free Trade Agreement (NAFTA)--Implementation of
Duty-Deferral Program Provisions
AGENCY: Customs Service, Treasury.
ACTION: Interim regulations; corrections.
-----------------------------------------------------------------------
SUMMARY: This document makes two corrections to the document published
in the Federal Register which set forth interim regulations
establishing procedural and other requirements that apply to the
collection, waiver and reduction of duties under the duty-deferral
program provisions of the North American Free Trade Agreement (NAFTA).
The corrections involve the discussion of the Paperwork Reduction Act
under the SUPPLEMENTARY INFORMATION portion of the document and a
cross-reference citation within the interim regulatory texts.
EFFECTIVE DATE: These corrections are effective January 1, 1996.
FOR FURTHER INFORMATION CONTACT: Angela Downey, Office of Field
Operations (202-927-1082).
SUPPLEMENTARY INFORMATION:
Background
On January 30, 1996, Customs published in the Federal Register (61
FR 2908) as T.D. 96-14 a document setting forth interim regulations
establishing procedural and other requirements that apply to the
collection, waiver and reduction of
[[Page 6111]]
duties under the duty-deferral program provisions of the North American
Free Trade Agreement (NAFTA). The document prescribed the documentary
and other requirements that must be followed when merchandise is
withdrawn from a U.S. duty-deferral program either for exportation to
another NAFTA country or for entry into a duty-deferral program of
another NAFTA country, the procedures that must be followed in filing a
claim for a waiver or reduction of duties collected on such
merchandise, and the procedures for finalization of duty collections
and duty waiver or reduction claims. The document prescribed a January
1, 1996, effective date for the interim regulatory amendments.
The discussion of the Paperwork Reduction Act within the
SUPPLEMENTARY INFORMATION portion of the document included figures
regarding the reporting and/or recordkeeping burden associated with the
information collection requirements under the interim regulatory texts,
as reported to the Office of Management and Budget (OMB); however, the
document incorrectly stated the hours reported to OMB with regard to
the estimated total annual reporting and/or recordkeeping burden which
should have read ``213,960'' hours. In addition, within the text of
interim Sec. 181.53(b)(4) as set forth in the document, the reference
in the introductory sentence to ``paragraph (e)(1) or (e)(2)'' should
have read ``paragraph (b)(4)(i) or (b)(4)(ii)''. This document corrects
these two errors.
Corrections of Publication
Accordingly, the document published in the Federal Register as T.D.
96-14 on January 30, 1996 (61 FR 2908) is corrected as set forth below.
Correction to the SUPPLEMENTARY INFORMATION Section
On page 2910, in the second column under the heading Paperwork
Reduction Act, the figure ``405,070 hours'' after ``Estimated total
annual reporting and/or recordkeeping burden:'' is corrected to read
``213,960 hours''.
Correction to the Interim Regulations
On page 2913, in the second column, in the introductory sentence of
Sec. 181.53(b)(4), the reference ``paragraph (e)(1) or (e)(2)'' is
corrected to read ``paragraph (b)(4)(i) or (b)(4)(ii)''.
Dated: February 8, 1996.
Stuart P. Seidel,
Assistant Commissioner, Office of Regulations and Rulings.
[FR Doc. 96-3591 Filed 2-15-96; 8:45 am]
BILLING CODE 4820-02-P
Complete official Federal Register PDF
FR Doc. 96-3571 Document Filing
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Page 6095]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3571]
========================================================================
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. 33 / Friday, February 16, 1996 /
Rules and Regulations
[[Page 6095]]
FEDERAL ELECTION COMMISSION
11 CFR Parts 100 and 108
[Notice 1996-6]
Document Filing
AGENCY: Federal Election Commission.
ACTION: Final Rule; Technical Amendments.
-----------------------------------------------------------------------
SUMMARY: On February 1, 1996, several technical amendments were
published in the Federal Register conforming the Commission's
regulations to a recent amendment to the Federal Election Campaign Act
of 1971, as amended (``FECA''). The Commission today is publishing
technical amendments to conform two additional regulations to the
recently amended statute.
EFFECTIVE DATE: February 16, 1996.
FOR FURTHER INFORMATION CONTACT: Ms. Susan E. Propper, Assistant
General Counsel, or Ms. Teresa A. Hennessy, Attorney, 999 E Street,
N.W., Washington, D.C. 20463, (202) 219-3690 or (800) 424-9530.
SUPPLEMENTARY INFORMATION: The FECA governs, inter alia, the filing of
campaign finance reports by candidates, and the authorized committees
of candidates, to the House of Representatives (``House''). 2 U.S.C.
432(g). On December 28, 1995, Public Law No. 104-79, 109 Stat. 791
(1995) amended the FECA to require that these reports be filed with the
Federal Election Commission rather than the Clerk of the House. See
Section 3. As noted above, the Commission has published in the Federal
Register a technical amendment to 11 CFR 105.1 to conform to the
amended statute and conforming amendments to several provisions that
refer to the regulation. 61 FR 3549.
The Commission today is publishing additional technical amendments
to conform the following regulations to the amended statute: 11 CFR
100.19(a) and 108.8. As noted in the original rulemaking, these
technical requirements are exempt from the notice and comment
requirements of the Administrative Procedure Act. See U.S.C. 553
(b)(B). They are also exempt from the legislative review provisions of
the FECA. See 2 U.S.C. 438(d). Therefore, these technical amendments
are effective on February 16, 1996.
Certification of No Effect Pursuant to 5 U.S.C. 605(B) (Regulatory
Flexibility Act)
I hereby certify that the attached technical amendments will not
have a significant economic impact on a substantial number of small
entities. The basis of this certification is that the technical
amendments are necessary to conform to the FECA and that these change
only the location of filing reports. Therefore, no significant economic
impact is caused by the technical amendments.
List of Subjects
11 CFR Part 100
Elections.
11 CFR Part 108
Elections, Reporting and recordkeeping requirements.
For the reasons set out in the preamble, subchapter A, chapter I,
title 11 of the Code of Federal Regulations is amended as follows:
PART 100--SCOPE AND DEFINITIONS (2 U.S.C. 431)
1. The authority citation for Part 100 continues to read as
follows:
Authority: 2 U.S.C. 431, 438(a)(8)
Sec. 100.19(a) [Amended]
2. Section 100.19(a) is amended by adding ``or'' before ``the
Secretary'' and by removing ``; or the Clerk of the United States House
of Representatives, House Records and Registration, 1036 Longworth
House Office Building, Washington, DC 20515''.
PART 108--FILING COPIES OF REPORTS AND STATEMENTS WITH STATE
OFFICERS (2 U.S.C. 439)
3. The authority citation for Part 108 continues to read as
follows:
Authority: 2 U.S.C. 434(a)(2), 438(a)(8), 439, 453.
Sec. 108.8 [Amended]
4. Section 108.8 is amended by removing ``Clerk,'' and by removing
the comma after ``Secretary''.
Dated: February 13, 1996.
Lee Ann Elliott,
Chairman, Federal Election Commission.
[FR Doc. 96-3571 Filed 2-15-96; 8:45 am]
BILLING CODE 6715-01-M
Complete official Federal Register PDF
FR Doc. 96-3520 Coastal Migratory Pelagic Resources of the Gulf of Mexico and South Atlantic; Closure
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Pages 6175-6176]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3520]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
50 CFR Part 642
[Docket No. 950725189-5260-02; I.D. 021296B]
Coastal Migratory Pelagic Resources of the Gulf of Mexico and
South Atlantic; Closure
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Closure.
-----------------------------------------------------------------------
SUMMARY: NMFS closes the commercial run-around gillnet fishery for king
mackerel in the exclusive economic zone (EEZ) in the Florida west coast
sub-zone. This closure is necessary to protect the overfished Gulf king
mackerel resource.
EFFECTIVE DATE: The closure is effective 12 noon, local time, February
12, 1996, through June 30, 1996.
FOR FURTHER INFORMATION CONTACT: Mark F. Godcharles, 813-570-5305.
SUPPLEMENTARY INFORMATION: The fishery for coastal migratory pelagic
fish (king mackerel, Spanish mackerel, cero, cobia, little tunny,
dolphin, and, in the Gulf of Mexico only, bluefish) is managed under
the Fishery Management Plan for the Coastal Migratory Pelagic Resources
of the Gulf of Mexico and South Atlantic (FMP). The FMP was prepared by
the Gulf of Mexico and South Atlantic Fishery Management Councils
(Councils) and is implemented by regulations at 50 CFR part 642 under
the authority of the Magnuson Fishery Conservation and Management Act.
Catch limits recommended by the Councils and implemented by NMFS
for the Gulf of Mexico migratory group of
[[Page 6176]]
king mackerel set the commercial quota of king mackerel in the Florida
west coast sub-zone at 865,000 lb (392,357 kg). That quota was further
divided into two equal quotas of 432,500 lb (196,179 kg) for vessels in
each of two groups by gear types--vessels fishing with run-around
gillnets and those using hook-and-line gear.
Under 50 CFR 642.26(a), NMFS is required to close any segment of
the king mackerel commercial fishery when its allocation or quota is
reached, or is projected to be reached, by publishing a notification in
the Federal Register. NMFS has determined that the commercial quota of
432,500 lb (196,179 kg) for Gulf group king mackerel for vessels using
run-around gillnets in the Florida west coast sub-zone was reached on
February 12, 1996. Hence, the commercial fishery for king mackerel for
such vessels in the Florida west coast sub-zone is closed effective
12:00 noon, local time, February 12, through June 30, 1996, the end of
the fishing year.
The Florida west coast sub-zone extends from the Alabama/Florida
boundary (87 deg.31'06'' W. long.) to: (1) The Dade/Monroe County, FL,
boundary (25 deg.20.4' N. lat.) from November 1 through March 31; and
(2) the Monroe/Collier County, FL, boundary (25 deg.48' N. lat.) from
April 1 through October 31.
Classification
This action is taken under 50 CFR 642.26(a) and is exempt from
review under E.O. 12866.
Authority: 16 U.S.C. 1801 et seq.
Dated: February 12, 1996.
Richard W. Surdi,
Acting Director, Office of Fisheries Conservation and Management,
National Marine Fisheries Service.
[FR Doc. 96-3520 Filed 2-12-96; 3:44 pm]
BILLING CODE 3510-22-F
Complete official Federal Register PDF
FR Doc. 96-3519 Suspicious Activity Reports
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Pages 6095-6100]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3519]
=======================================================================
-----------------------------------------------------------------------
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 353
RIN 3064-AB63
Suspicious Activity Reports
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is amending
its regulation on the reporting of known or suspected criminal and
suspicious activities by insured state nonmember banks. This final rule
streamlines reporting requirements by providing that a state nonmember
bank file a new Suspicious Activity Report (SAR) with the FDIC and the
appropriate federal law enforcement agencies by sending a single copy
of the SAR to the Financial Crimes Enforcement Network of the
Department of the Treasury (FinCEN) to report a known or suspected
criminal offense or a transaction that it suspects involves money
laundering or violates the Bank Secrecy Act.
EFFECTIVE DATE: April 1, 1996.
FOR FURTHER INFORMATION CONTACT: Carol A. Mesheske, Chief, Special
Activities Section, (202) 898-6750, or Gregory Gore, Counsel, (202)
898-7109.
SUPPLEMENTARY INFORMATION:
Background
The FDIC, FRB, OCC, and OTS have issued for public comment
substantially similar proposals to revise their regulations on the
reporting of known or suspected criminal conduct and suspicious
activities. The Department of the Treasury, through FinCEN, has issued
for public comment a substantially similar proposal to require the
reporting of suspicious transactions relating to money laundering
activities.
[[Page 6096]]
The FDIC's proposed regulation (60 FR 47719, September 14, 1995)
noted that the interagency Bank Fraud Working Group, consisting of
representatives from the Agencies, law enforcement agencies, and
FinCEN, has been working on the development of a single form, the SAR,
for the reporting of known or suspected federal criminal law violations
and suspicious activities. The FDIC's proposed regulation, as well as
those proposed by the FRB, OCC, OTS, and FinCEN, would simplify and
clarify the reporting requirements and reduce banks' reporting burdens
by raising mandatory reporting thresholds for criminal offenses and by
requiring the filing of only one report with FinCEN.
The final rule adopts the proposal with a few additional changes
that generally have been made in response to the comments received. The
changes will result in burden reductions even greater than those that
were proposed.
Section-by-Section Analysis
The title of the regulation has been changed to conform to the name
on the SAR.
Section 353.1 (Instruction No. 1 on the SAR) provides that a bank
must file a SAR when it detects a known or suspected criminal violation
of federal law or a suspicious activity pertinent to a money laundering
offense.
Section 353.2 provides pertinent definitions.
Sections 353.3(a) (1), (2), and (3) (Instructions 1. a., b., and c.
on the SAR) instruct a bank to file a SAR with FinCEN in order to
comply with the requirement to notify federal law enforcement agencies
and the Department of the Treasury if the bank detects any known or
suspected federal criminal violation, or pattern of violations,
committed or attempted against the bank, or involving one or more
transactions conducted through the bank, and the bank believes it was
an actual or potential victim of a crime, or was used to facilitate a
crime. If the bank has a substantial basis for identifying one of its
insiders or other institution-affiliated parties in connection with the
known or suspected crime, reporting is required, regardless of the
dollar amount involved. If the bank can identify a non-insider suspect,
the applicable transaction threshold is $5,000. In cases in which no
suspect can be identified, the applicable transaction threshold
increases to $25,000. These sections were not changed from the proposed
regulation published for public comment in September 1995.
Section 353.3(a)(4) (Instruction 1. d. on the SAR) instructs a bank
to file a SAR for transactions involving $5,000 or more in funds or
other assets when the bank knows, suspects or has reason to suspect
that the transaction: (i) Involves money laundering, or (ii) is
designed to evade any regulations promulgated under the Bank Secrecy
Act, or (iii) has no business or apparent lawful purpose or is not the
sort of transaction in which the particular customer normally engages,
and, after examining the available facts, the bank knows of no
reasonable explanation for the transaction. Section 353.3(a)(4) has
been modified in the final rule to reflect comments received on the
proposal. Most notably, the circumstances under which a transaction
should be reported under this section were clarified, and a reporting
threshold of $5,000 was added.
Section 353.3(a)(4) recognizes the emerging international consensus
that the efforts to deter, substantially reduce, and eventually
eradicate money laundering are greatly assisted by the reporting of
suspicious transactions by financial institutions. The requirements of
this section comply with the recommendations adopted by multi-country
organizations in which the United States is an active participant,
including the Financial Action Task Force of the G-7 nations and the
Organization of American States and are consistent with the European
Community's directive on preventing money laundering through financial
institutions.
Section 353.3(b) (Instruction 2 on the SAR) provides that SARs must
be filed within 30 calendar days of the initial detection of the
criminal or suspicious activity. An additional 30 days is permitted in
order to enable a bank to identify a suspect, but in no event may a SAR
be filed later than 60 days after the initial detection of the
reportable conduct. The FDIC and law enforcement must be notified in
the case of a violation requiring immediate action, such as an on-going
violation. These reporting requirements were not changed from the
September 1995 proposal.
Section 353.3(c) encourages a bank to file a SAR with state and
local law enforcement agencies. This section is unchanged from the
September 1995 proposal.
Section 353.3(d) (Instruction 3 on the SAR) provides that a bank
need not file a SAR for an attempted or committed burglary or robbery
reported to the appropriate law enforcement agencies. In addition, a
SAR need not be filed for missing or counterfeit securities that are
the subject of a report pursuant to Rule 17f-1 under the Securities
Exchange Act of 1934. The section of the final rule was modified to
require reporting of larcenies to be consistent with the interagency
SAR instructions.
Section 353.3(e) requires a bank to retain a copy of the SAR and
the original or business record equivalent of supporting documentation
for a period of five years. The section also requires that a bank
identify and maintain supporting documentation in its files and that
the bank make available such documentation to law enforcement agencies
upon their request. The FDIC made three changes to this section from
the version published for public comment in September 1995. First, the
record retention period was shortened from ten years to five. Second,
provision was made for the retention of business record equivalents of
original documents, such as microfiche and computer imaged record
systems, in recognition of modern record retention technology. The
third change involves the clarification of a bank's obligation to
provide supporting documentation upon request to law enforcement
officials. Supporting documentation is deemed filed with a SAR in
accordance with this section of the FDIC's final rule; as such, law
enforcement authorities need not make their access requests through
subpoena or other legal processes.
Section 353.3(f) requires the management of a bank to report the
filing of all SARs to the board of directors of the bank, or a
designated committee thereof. No change was made from the September
1995 proposal.
Section 353.3(g) provides that SARs are confidential. Requests for
SARS or the information contained therein should be declined. The final
rule also adds a requirement that a request for a SAR or the
information contained therein should be reported to the FDIC. With the
exception of the added requirement that requests for SARs be reported
to the FDIC, no changes were made to this section from the September
1995 proposal.
Section 353.3(h) sets forth the safe harbor provisions of 31 U.S.C.
5318(g). This new section, which was added to the final rule as the
result of many comments concerning this important statutory protection
for banking organizations, states that the safe harbor provisions of
the law are triggered by a report of known or suspected criminal
violations or suspicious activities to law enforcement authorities,
regardless of whether the report is made by the filing of a SAR in
accordance with the FDIC's
[[Page 6097]]
regulation or by different means for other reasons.
Comments Received
The FDIC received letters from 14 public commenters. Comments were
received from 4 community banks, 5 multinational or large regional
banks, 2 trade and industry research groups, 2 regulatory bodies, and
one consulting firm.
The large majority of commenters expressed general support for the
FDIC's proposal. None of the commenters opposed the proposed new
suspicious activity reporting rules. A number of suggestions and
requests for clarification were received. They are as follows.
Criminal Versus Suspicious Activities
Almost one half of the commenters expressed confusion over the
difference between the known or suspected criminal conduct that would
be subject to the dollar reporting thresholds (provided such conduct
does not involve an institution-affiliated party of the reporting
entity) and the suspicious activities that would be reported regardless
of dollar amount. Section 353.3(a)(4) has been revised to add a $5,000
reporting threshold and to clarify that the suspicious activity must
relate to money laundering or Bank Secrecy Act violations. A threshold
for the reporting of suspicious activities was added to reduce further
the reporting burdens on banks.
Reporting of Crimes Under State Law
Two commenters requested clarification of whether activities
constituting crimes under state law, but not under federal law, should
be reported on the SAR. The FDIC continues to encourage banks to refer
criminal and suspicious activities under both federal and state law by
filing a Suspicious Activity Report. Under the new reporting system
designed by the FDIC, the other Agencies, and FinCEN, state chartered,
nonmember banks should be able to fulfill their state reporting
obligations by filing a SAR with FinCEN.
Safe Harbor Protections; Potential Liability Under Federal and State
Laws
Some commenters expressed the concern that banks and their
institution-affiliated parties could be liable under federal and state
laws, such as the Right to Financial Privacy Act, for filing SARs with
respect to conduct that is later found not to have been criminal.
Another concern was that the filing of SARs with state and local law
enforcement agencies would subject filers to claims under state law.
Both of these concerns are addressed by the scope of the safe harbor
protection provided in 31 U.S.C. 5318(g).
The FDIC is of the opinion the safe harbor statute is broadly
defined to include the reporting of known or suspected criminal
offenses or suspicious activities, by filing a SAR or by reporting by
other means, with state and local law enforcement authorities, as well
as with the Agencies and FinCEN.
A few commenters requested that the FDIC make explicit the safe
harbor protections of 31 U.S.C. 5318(g) (2) and (3) on the SAR. The
safe harbor provisions are included in new Sec. 353.3(h) of this
regulation and on the form.
Record Retention
Half the commenters expressed the view that the proposed 10-year
period for the retention of records in Sec. 353.3(b) was excessive,
especially in light of a five year record retention requirement
contained in the Bank Secrecy Act. In recognition of the potential
burden of document retention on financial institutions, the FDIC has
limited the record retention period to five years.
Dollar Thresholds
A few comments encouraged the FDIC to raise the dollar thresholds
for known or suspected criminal conduct by non-insiders, or to
establish a dollar threshold for insiders. The FDIC has considered
these comments, but at this time, it believes the thresholds meet and
properly balance the dual concerns of prosecuting criminal activity
involving banks and minimizing the burden on banks. With respect to the
suggestion the FDIC adopt a dollar threshold for insider violations, it
is noted that insider abuse has long been a key concern and focus of
enforcement efforts at the FDIC. With the development of a new
sophisticated and automated database, the FDIC and law enforcement
agencies will have the benefit of a comprehensive and easily accessible
catalogue of known or suspected insider wrongdoing. The FDIC does not
wish to limit the information it receives regarding insider wrongdoing.
Some petty crimes, for example, repetitive thefts of small amounts of
cash by an employee who frequently transfers between banking
organizations, may warrant enforcement action or criminal prosecution.
One commenter suggested an indexed threshold, based on the regional
differences in the various dollar thresholds below which the federal,
state, and local prosecutors generally decline prosecution. While the
FDIC recognizes there may be regional variations in the dollar amount
of financial crimes generally prosecuted, the FDIC's concern is to
place the relevant information in the hands of the investigating and
prosecuting authorities. The prosecuting authorities then may consider
whether to pursue a particular matter. In the FDIC's view, the dollar
thresholds adopted in this final rule best balance the interests of law
enforcement and banks. The FDIC also believes indexed thresholds could
create more confusion than benefit to banks.
Commenters also suggested the creation of a dollar threshold for
the reporting of suspicious activities relating to money laundering
offenses. A $5,000 threshold has been established for reporting of such
suspicious activities.
Questions were raised regarding the permissibility of filing SARs
in situations in which the dollar thresholds for known or suspected
criminal conduct or suspicious activity are not met and the
applicability of the safe harbor provisions of 31 U.S.C. 5318(g) to
such non-mandatory filings. It is the opinion of the FDIC that the safe
harbor provisions of 31 U.S.C. 5318(g) cover all reports of suspected
or known criminal violations and suspicious activities to law
enforcement authorities, regardless of whether such reports are filed
pursuant to the mandatory requirements of the FDIC's regulations or are
voluntary.
Notification of On-Going Violations and of State and Local Law
Enforcement Authorities.
Proposed Sec. 353.3(b)(2) required a bank to notify the law
enforcement authorities immediately in the event of an on-going
violation. Section 353.3(c) encourages the filing of a copy of the SAR
with state and local law enforcement agencies, in appropriate cases.
This requirement and guidance were found by some commenters to be
unclear as to when immediate notification or the filing of the SAR with
state and local authorities would be required. The FDIC wishes to
clarify that immediate notification is limited to situations involving
on-going violations, for example, when a check kite or money laundering
has been detected and may be continuing. It is impossible for the FDIC
to contemplate all of the possible circumstances in which it might be
appropriate for a bank to advise state and local law enforcement
authorities. Banks should use their best judgment regarding when to
alert the
[[Page 6098]]
authorities regarding on-going criminal offenses or suspicious
activities.
Supporting Documentation
The proposed requirements that an institution maintain ``related''
documentation and make ``supporting'' documentation available to the
law enforcement agencies upon request were criticized as inconsistent
and vague. As no substantive difference is intended, the FDIC has
referred to ``supporting'' documentation in the final rule in reference
both to the maintenance and production requirements. The FDIC believes
the use of the word ``supporting'' is more precise and limits the scope
of the information which must be retained to that which would be useful
in proving that the crime has been committed and by whom it has been
committed. As to the criticism that the meaning of ``related'' or
``supporting'' documentation is vague, it is anticipated banks will use
their judgment in determining the information to be retained. It is
impossible for the FDIC to catalogue the precise types of information
covered by this requirement, as it necessarily depends upon the facts
of a particular case.
Scope of Confidentiality Requirement
Two commenters correctly noted the proposed regulation is unclear
as to whether the confidentiality requirement applies only to the
information contained on the SAR itself, or whether the requirement
extends to the ``supporting'' documentation. The FDIC takes the
position that only the existence of a SAR and its supporting
documentation are subject to the confidentiality requirements of 31
U.S.C. 5318(g). The supporting documentation itself is not subject to
the confidentiality provisions of 31 U.S.C. 5318(g). The safe harbor
provisions of 31 U.S.C. 5318(g), however, apply to the SAR and
supporting documentation, as set forth in Part 353.3(h).
Provisions of Supporting Documentation to Law Enforcement Authorities
Upon Request
Many commenters noted the guidance provided in the FDIC's proposed
regulation regarding the provision of supporting documentation to law
enforcement agencies upon their request after the filing of an SAR was
unclear or contrary to law. Some questioned whether law enforcement
agencies would still need to subpoena relevant documents from a bank.
The FDIC's regulation requires banks filing SARs to identify, maintain
and treat the documentation supporting the report as if it were
actually filed with the SAR. This means that subsequent requests from
law enforcement authorities for the supporting documentation relating
to a particular SAR do not require the service of a subpoena or other
legal processes normally associated with providing information to law
enforcement agencies.
Civil Litigation
The FDIC was encouraged to adopt regulations that would make SARs
undiscoverable in civil litigation, in order to avoid situations in
which a bank could be ordered by a court to produce a SAR in civil
litigation and could be confronted with the prospect of having to
choose between being found in contempt or violating the FDIC's rules.
In the opinion of the FDIC, 31 U.S.C. 5318(g) precludes the disclosure
of SARs. The final rule requires a bank that receives a subpoena or
other request for a SAR to notify the FDIC so that the FDIC may, if
appropriate, intervene in litigation or seek the assistance of the U.S.
Department of Justice.
Maintenance of Originals
Proposed Sec. 353.3(e) required the maintenance of supporting
documentation in its original form. A number of commenters noted
electronic storage of documents is becoming the rule rather than the
exception, and requiring the storage of paper originals would impose
undue burdens on financial institutions. Moreover, some records are
retained only in a computer database. The proposed regulation reflected
the concerns of the law enforcement agencies that the best evidence be
preserved. However, upon further consideration, the FDIC wishes to
clarify that the electronic storage of original documentation related
to the filing of a SAR is permissible. In addition, the FDIC recognizes
a bank will not always have custody of the originals of documents, and
some documents will not exist at the bank in paper form. In those
cases, preservation of the best available evidentiary documents, for
example, computer disks or photocopies, should be acceptable. This has
been reflected in the final rule by changing the reference to original
documents to original documents or ``business record equivalent''.
Investigation and Proof Burdens
Two commenters expressed the concern a bank would need to establish
probable cause before reporting crimes for which an essential element
of the proof of the crime was the intent of the actor. The FDIC does
not intend that banks assume the burden of proving illegal conduct;
rather, banks are required to report known or suspected crimes or
suspicious activities in accordance with this final rule.
Supplementary or Corrective Information; Reporting of Multiple Crimes
or Suspects
Material information that supplements or corrects an SAR should be
filed with FinCEN by means of a subsequent SAR. The first page of the
SAR provides boxes for the reporter to indicate whether the report is
an initial, a corrected, or a supplemental report.
Two commenters requested guidance on the reporting of multiple
crimes or related crimes committed by more than one individual. The
instructions to the SAR contemplate that additional suspects may be
reported by means of a supplemental page. Likewise, multiple crimes
committed by a suspect may be reported by means of multiple check-offs
on the SAR, or if needed, by a written addendum to the SAR. In the
event related crimes have been committed by more than one person, a
description of the related crimes may be made by addendum to the SAR.
The FDIC encourages filers to make a complete report of all known or
suspected criminal or suspicious activity. The SAR may be supplemented
in order to facilitate a complete disclosure.
Calculation of Time Frame for Reporting
A few commenters requested the FDIC clarify the application of the
deadline for filing SARs. The FDIC's proposed regulation used the
broadest possible language to set the time frames for the reporting of
known or suspected criminal offenses and suspicious activities in order
to best guide reporting institutions. Absolute deadlines for the filing
of SARs are important to the investigatory and prosecutorial efforts of
law enforcement authorities. It is expected banks will meet the filing
deadlines once conduct triggering the reporting requirements is
identified. Further clarification of the time frames is not needed in
the FDIC's view.
Board of Directors Notification Requirements
The commenters expressed general support for the modification of
the reporting requirement which permits reporting of SARs to a
committee of the board of directors. As a matter of clarification,
notification of a committee of the bank's board relieves the bank of
the obligation to disclose the SARs filed to the entire board. It would
be
[[Page 6099]]
expected, however, that the designated committee, for example, the
audit committee, would report to the full board of directors at regular
meetings with respect to routine matters in the same manner and to the
same extent as other committees report at regular board meetings. With
respect to serious crimes or insider malfeasance, the appointed
committee likely should consider it appropriate to make more immediate
disclosure to the full board of directors. Some larger banking
organizations expressed the view that prompt disclosure of SARs to the
board of directors or a committee would impose a serious burden since
larger organizations typically file a larger number of criminal
referral forms (now, SARs). While the FDIC acknowledges that larger
institutions may have more SARs to report to the board of directors or
a committee, this does not alter the directors' fiduciary obligation to
monitor the condition of the institution and to take action to prevent
losses. The final regulation does not dictate the content of the board
of directors or committee notification, and, in some cases, such as
when relatively minor non-insider crimes are to be reported, it may be
completely appropriate to provide only a summary listing of SARs filed.
The FDIC expects the management of banks to provide a more detailed
notification of SARs involving insiders or a potential material loss to
the institution to the board of directors or committees.
Information Sharing
It was suggested the final regulations should somehow facilitate
the sharing of information among banking organizations in order to
better detect new fraudulent schemes. It is anticipated that the
Treasury Department, through FinCEN, and the Agencies, will keep
reporting entities apprised of recent developments and trends in
banking-related crimes through periodic pronouncements, meetings, and
seminars.
Single Filing Requirement; Acknowledgment of Filings
The FDIC wishes to clarify that the filing of the SAR with FinCEN
is the only filing of the SAR that is required. Federal and state law
enforcement and bank supervisory agencies will have access to the
database created and maintained by FinCEN on behalf of the Agencies and
the Department of Treasury; thus, a single filing with FinCEN is all
that is required under the new reporting system.
Commenters also requested that the final rule permit the filing of
SARs via telecopier. Such filings are not compatible with the system
developed by the Agencies and FinCEN. Banks can file the SAR via
magnetic media using the computer software to be made available to all
banks by the FDIC and each of the other Agencies with respect to the
institutions they supervise. Larger banking organizations that
currently file currency transaction reports via magnetic tape with
FinCEN may also file SARs by magnetic tape.
Regulatory Flexibility Act
Pursuant to section 605(b) of the Regulatory Flexibility Act, the
FDIC hereby certifies that this final rule will not have a significant
economic impact on a substantial number of small entities. This final
rule primarily reorganizes the process for making criminal referrals
and has no material impact on banks, regardless of size. Accordingly, a
regulatory flexibility analysis is not required.
Paperwork Reduction Act
This final rule revises a collection of information that is
currently approved by the Office of Management and Budget (OMB) under
control number 3064-0077. The revisions raise the reporting thresholds
and permit reporting institutions to use a simplified, shorter form; to
file one form only; and to eliminate the submission of supporting
documentation with a report. These revisions have been reviewed and
approved by OMB in accordance with the requirements of the Paperwork
Reduction Act (44 U.S.C. 3501 et seq.).
The estimated average burden associated with the collection of
information contained in a SAR is approximately .6 hours per
respondent. The burden per respondent will vary depending on the nature
of the suspicious activity being reported.
Estimated Number of Respondents: 6,500.
Estimated Total Annual Burden Hours: 3,900
Comments concerning the accuracy of this burden estimate and
suggestions for reducing this burden should be directed to the
Assistant Executive Secretary (Regulatory Analysis), Room F-400,
Federal Deposit Insurance Corporation, Washington, DC 20429, and to the
Office of Management and Budget, Paperwork Reduction Project (3064-
0077), Washington, DC 20503.
List of Subjects in 12 CFR Part 353
Banks, Banking, Crime, Currency, Insider abuse, Money laundering,
Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, 12 CFR part 353 of the
Code of Federal Regulations is revised to read as follows:
PART 353--SUSPICIOUS ACTIVITY REPORTS
Sec.
353.1 Purpose and scope.
353.2 Definitions.
353.3 Reports and records.
Authority: 12 U.S.C. 1818, 1819; 31 U.S.C. 5318.
Sec. 353.1 Purpose and scope.
The purpose of this part is to ensure that an insured state
nonmember bank files a Suspicious Activity Report when it detects a
known or suspected criminal violation of federal law or a suspicious
transaction related to a money laundering activity or a violation of
the Bank Secrecy Act. This part applies to all insured state nonmember
banks as well as any insured, state-licensed branches of foreign banks.
Sec. 353.2 Definitions.
For the purposes of this part:
(a) FinCEN means the Financial Crimes Enforcement Network of the
Department of the Treasury.
(b) Institution-affiliated party means any institution-affiliated
party as that term is defined in sections 3(u) and 8(b)(5) of the
Federal Deposit Insurance Act (12 U.S.C. 1813(u) and 1818(b)(5)).
Sec. 353.3 Reports and records.
(a) Suspicious activity reports required. A bank shall file a
suspicious activity report with the appropriate federal law enforcement
agencies and the Department of the Treasury, in accordance with the
form's instructions, by sending a completed suspicious activity report
to FinCEN in the following circumstances:
(1) Insider abuse involving any amount. Whenever the bank detects
any known or suspected federal criminal violation, or pattern of
criminal violations, committed or attempted against the bank or
involving a transaction or transactions conducted through the bank,
where the bank believes it was either an actual or potential victim of
a criminal violation, or series of criminal violations, or that the
bank was used to facilitate a criminal transaction, and the bank has a
substantial basis for identifying one of the bank's directors,
officers, employees, agents, or other institution-affiliated parties as
having committed or aided in the commission of the criminal violation,
regardless of the amount involved in the violation;
[[Page 6100]]
(2) Transactions aggregating $5,000 or more where a suspect can be
identified. Whenever the bank detects any known or suspected federal
criminal violation, or pattern of criminal violations, committed or
attempted against the bank or involving a transaction or transactions
conducted through the bank, and involving or aggregating $5,000 or more
in funds or other assets, where the bank believes it was either an
actual or potential victim of a criminal violation, or series of
criminal violations, or that the bank was used to facilitate a criminal
transaction, and the bank has a substantial basis for identifying a
possible suspect or group of suspects. If it is determined prior to
filing this report that the identified suspect or group of suspects has
used an ``alias'', then information regarding the true identity of the
suspect or group of suspects, as well as alias identifiers, such as
driver's license or social security numbers, addresses and telephone
numbers, must be reported;
(3) Transactions aggregating $25,000 or more regardless of
potential suspects. Whenever the bank detects any known or suspected
federal criminal violation, or pattern of criminal violations,
committed or attempted against the bank or involving a transaction or
transactions conducted through the bank, involving or aggregating
$25,000 or more in funds or other assets, where the bank believes it
was either an actual or potential victim of a criminal violation, or
series of criminal violations, or that the bank was used to facilitate
a criminal transaction, even though the bank has no substantial basis
for identifying a possible suspect or group of suspects; or
(4) Transactions aggregating $5,000 or more that involve potential
money laundering or violations of the Bank Secrecy Act. Any transaction
(which for purposes of this paragraph (a)(4) means 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 or investment security, or any
other payment, transfer, or delivery by, through, or to a financial
institution, by whatever means effected) conducted or attempted by, at
or through the bank and involving or aggregating $5,000 or more in
funds or other assets, if the bank knows, suspects, or has reason to
suspect that:
(i) The transaction involves funds derived from illegal activities
or is intended or conducted in order to hide or disguise funds or
assets derived from illegal activities (including, without limitation,
the ownership, nature, source, location, or control of such funds or
assets) as part of a plan to violate or evade any federal law or
regulation or to avoid any transaction reporting requirement under
federal law;
(ii) The transaction is designed to evade any regulations
promulgated under the Bank Secrecy Act; or
(iii) The transaction has no business or apparent lawful purpose or
is not the sort of transaction in which the particular customer would
normally be expected to engage, and the bank knows of no reasonable
explanation for the transaction after examining the available facts,
including the background and possible purpose of the transaction.
(b) Time for reporting. (1) A bank shall file the suspicious
activity report no later than 30 calendar days after the date of
initial detection of facts that may constitute a basis for filing a
suspicious activity report. If no suspect was identified on the date of
detection of the incident requiring the filing, a bank may delay filing
a suspicious activity report for an additional 30 calendar days to
identify a suspect. In no case shall reporting be delayed more than 60
calendar days after the date of initial detection of a reportable
transaction.
(2) In situations involving violations requiring immediate
attention, such as when a reportable violation is ongoing, the bank
shall immediately notify, by telephone, an appropriate law enforcement
authority and the appropriate FDIC regional office (Division of
Supervision) in addition to filing a timely report.
(c) Reports to state and local authorities. A bank is encouraged to
file a copy of the suspicious activity report with state and local law
enforcement agencies where appropriate.
(d) Exemptions. (1) A bank need not file a suspicious activity
report for a robbery or burglary committed or attempted, that is
reported to appropriate law enforcement authorities.
(2) A bank need not file a suspicious activity report for lost,
missing, counterfeit, or stolen securities if it files a report
pursuant to the reporting requirements of 17 CFR 240.17f-1.
(e) Retention of records. A bank shall maintain a copy of any
suspicious activity report filed and the original or business record
equivalent of any supporting documentation for a period of five years
from the date of filing the suspicious activity report. Supporting
documentation shall be identified and maintained by the bank as such,
and shall be deemed to have been filed with the suspicious activity
report. A bank must make all supporting documentation available to
appropriate law enforcement authorities upon request.
(f) Notification to board of directors. The management of a bank
shall promptly notify its board of directors, or a committee thereof,
of any report filed pursuant to this section. The term ``board of
directors'' includes the managing official of an insured state-licensed
branch of a foreign bank for purposes of this part.
(g) Confidentiality of suspicious activity reports. Suspicious
activity reports are confidential. Any bank subpoenaed or otherwise
requested to disclose a suspicious activity report or the information
contained in a suspicious activity report shall decline to produce the
suspicious activity report or to provide any information that would
disclose that a suspicious activity report has been prepared or filed
citing this part, applicable law (e.g., 31 U.S.C. 5318(g)), or both,
and notify the appropriate FDIC regional office (Division of
Supervision).
(h) Safe Harbor. The safe harbor provisions of 31 U.S.C. 5318(g),
which exempts any bank that makes a disclosure of any possible
violation of law or regulation from liability under any law or
regulation of the United States, or any constitution, law or regulation
of any state or political subdivision, cover all reports of suspected
or known criminal violations and suspicious activities to law
enforcement and financial institution supervisory authorities,
including supporting documentation, regardless of whether such reports
are filed pursuant to this part or are filed on a voluntary basis.
By Order of the Board of Directors.
Dated at Washington, D.C., this 6th day of February 1996.
Federal Deposit Insurance Corporation.
Jerry L. Langley,
Executive Secretary.
[FR Doc. 96-3519 Filed 2-15-96; 8:45 am]
BILLING CODE 6714-01-P
Complete official Federal Register PDF
FR Doc. 96-3509 The Future Development of SMR Systems in the 800 MHz Frequency Band
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Pages 6138-6164]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3509]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 90
[PR Docket No. 93-144; PP Docket No. 93-253; FCC 95-501]
The Future Development of SMR Systems in the 800 MHz Frequency
Band
AGENCY: Federal Communications Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: In this First Report and Order in PR Docket No. 93-144, and
Eighth Report and Order in PP Docket No. 93-253, the Commission adopts
final service and competitive bidding rules for the ``upper 10 MHz
block'' of 800 MHz Specialized Mobile Radio (SMR) spectrum and adopts
rules which streamline the licensing process for SMR services in the
800 MHz band.
In this First Report and Order (``First R&O''), the Commission
designates a portion of 800 MHz SMR spectrum for wide-area licensing
using license areas defined by the Economic Areas (EAs) established by
the U.S. Department of Commerce Bureau of Economic Analysis. Under this
wide-area licensing plan the Commission has allocated three channel
blocks, one 120-channel block, one 60-channel block, and one 20-channel
block.
In this Eighth Report and Order (``Eighth R&O''), the Commission
reiterated that competitive bidding is an appropriate licensing tool
for the 800 MHz SMR service. The Commission also adopts specific
auction rules for the upper 10 MHz block, including rules pertaining to
competitive bidding design, license grouping, bidding procedures, and
treatment of ``designated entities'' (that is, small businesses,
businesses owned by minorities and/or women, and rural telephone
companies). The intended effect of this action is to facilitate future
deployment of SMR systems in the 800 MHz band through licensing
procedures and the use of competitive bidding.
EFFECTIVE DATE: March 18, 1996.
FOR FURTHER INFORMATION CONTACT: David Furth or Lisa Warner at (202)
418-0620.
SUPPLEMENTARY INFORMATION: This First Report and Order in PR Docket No.
93-144, and this Eighth Report and Order in PP Docket No. 93-253,
adopted December 15, 1995, and released December 15, 1995, is available
for inspection and copying during normal business hours in the FCC
Dockets Branch, Room 230, 1919 M Street N.W., Washington, D.C. The
complete text may be purchased from the Commission's copy contractor,
International Transcription Service, Inc., 2100 M Street, N.E., Suite
140, Washington, D.C. 20037 (telephone (202) 857-3800).
Synopsis of First Report and Order and Eighth Report and Order:
I. Background
1. The Commission's current rules for the 800 MHz Specialized
Mobile Radio (SMR) service were designed primarily to license dispatch
radio systems on a transmitter-by-transmitter basis in local markets.
In recent years, however, some SMR licenses have been authorized
through waivers and extended implementation rules to expand the
geographic scope of their services and aggregate large numbers of
channels to provide service more directly comparable to that provided
by cellular operators and that envisioned for Personal Communications
Services (PCS). While the 800 MHz SMR rules have proven sufficiently
flexible to permit such expansion, the licensing process remains
cumbersome because of the need to license each SMR transmitter site
individually. In May 1993, the Commission adopted a Notice of Proposed
Rule Making in PR Docket No. 93-144, 58 FR 33062 (June 15, 1993)
(``Notice''), proposing wide-area licensing of the 800 MHz SMR service.
In August of 1993, Congress amended the Communications Act of 1934 to
modify the regulatory treatment of mobile services. In the Second
Report and Order in GN Docket No. 93-252, 59 FR 18493 (April 19, 1994)
(``CMRS Second R&O''), the Commission reclassified all mobile services
into two statutorily-defined categories: commercial mobile radio
services (CMRS) and private mobile radio services (PMRS). The
Commission concluded that all SMR systems providing or authorized to
provide interconnected service would be reclassified as CMRS.
2. In the Third Report and Order in GN Docket No. 93-252, 59 FR
59945 (November 21, 1994) (``CMRS Third R&O''), the Commission
concluded that 800 MHz SMR licensees either compete or have the
potential to compete with other CMRS providers. As a result, the
Commission determined that the technical and operational requirements
for the 800 MHz SMR service should be made comparable, to the extent
feasible, to those applicable to other CMRS providers. In this
connection, the Commission concluded that: (1) wide-area licensing
should be implemented in the 800 MHz SMR service; and (2) licensing of
the 800 MHz SMR spectrum should be accomplished through competitive
bidding procedures.
3. On October 20, 1994, the Commission adopted a Further Notice of
Proposed Rule Making in PR Docket No. 93-144, 59 FR 60111 (November 22,
1994) (``Further Notice''), proposing a new framework for licensing of
800 MHz SMR systems. Specifically, the Commission proposed to assign 10
MHz of SMR spectrum (consisting of 200 contiguous channels) in defined
market-based service areas to facilitate the development of wide-area,
multi-channel SMR systems, while the remaining 4 MHz of spectrum
(consisting of 80 non-contiguous
[[Page 6139]]
channels) would be designated for continued licensing on a local basis
to accommodate the needs of smaller SMR systems primarily seeking to
provide local, more dispatch-oriented service.
II. First Report and Order
A. Wide-Area SMR Licensing in the 800 MHz Band
1. Spectrum Designated for Wide-Area Licensing
4. In the CMRS Third R&O, the Commission determined that assigning
contiguous spectrum, where feasible, is likely to enhance the
competitive potential of wide-area SMR providers. The Commission
indicated its belief that contiguous spectrum is essential to the
competitive viability of a wide-area SMR system, because it permits use
of spread spectrum and other broadband technologies that are available
to other CMRS providers but unavailable to systems operating on non-
contiguous spectrum. In the Further Notice, the Commission proposed to
designate the upper 10 MHz block of 800 MHz SMR spectrum for wide-area
SMR licensing.
5. In the First R&O, the Commission concludes that the 800 MHz SMR
spectrum most suitable to be designated primarily for wide-area use is
the upper 10 MHz block, as it is the only contiguous SMR spectrum in
the 800 MHz band. The Commission further concludes that the entire 10
MHz block should be used, rather than a portion thereof, because it is
equivalent in size to the smallest amount of spectrum presently
authorized for broadband PCS.
2. Service Areas
6. In the CMRS Third R&O, the Commission concluded that the use of
service areas based on Rand McNally Major Trading Areas (MTAs),
identical to those adopted for broadband PCS, would be preferable for
wide-area licensing of the 800 MHz SMR service. The Commission noted
that allowing licensees to operate over MTAs as opposed to smaller
areas, such as Rand McNally Basic Trading Areas (BTAs), would enhance
their ability to invest in technology and to re-use channels more
effectively.
7. In this First R&O, the Commission determines that, despite its
previous conclusion in the CMRS proceeding that MTAs appear to be the
most suitable building blocks for 800 MHz SMR licensees seeking to
construct wide-area systems, a broad range of commenters expressed
support for Economic Areas (EAs) established by the U.S. Department of
Commerce Bureau of Economic Analysis rather than MTAs. The Commission
agrees with the majority of commenters that EAs reflect the actual
coverage provided by 800 MHz SMR systems and concludes that use of EAs
will further the public interest because it will result in the
dissemination of licenses among a variety of applicants as anticipated
by Section 309(j) of the Communications Act. The Commission further
concludes that use of these smaller geographic areas ultimately will
result in a more diverse group of prospective bidders, because small
and medium-sized operatives will have incentives to seek EA licenses.
8. Thus, 800 MHz SMR wide-area licenses in the upper 10 MHz block
will be based on the 172 EAs covering the continental United States and
Alaska, and three additional licensing regions covering the five U.S.
possessions, Guam, Northern Marina Islands, Puerto Rico, U.S. Virgin
Islands, and American Samoa.
3. EA Spectrum Blocks
9. In the CMRS Third R&O, the Commission observed that most
commenters agreed that wide-area SMR systems must have the ability to
use (and reuse) a large number of channels, preferably on contiguous
frequencies, to compete successfully with cellular and broadband PCS.
Based on the record established earlier in the 800 MHz SMR proceeding
and the comments submitted in the CMRS proceeding, the Further Notice
proposed to divide the upper 10 MHz block of 800 MHz SMR spectrum into
four blocks of 2.5 MHz, corresponding to 50 channels per block, under
the Commission's existing frequency allocation rules. In addition, the
Commission chose not to propose to issue a single license covering the
entire 10 MHz upper block of 800 MHz SMR spectrum because it determined
that a single 10 MHz license would preclude licensing of multiple wide-
area licensees in each market.
10. In this First R&O, the Commission concludes that dividing the
upper 10 MHz block into multiple spectrum blocks is both feasible and
desirable. The Commission concludes that allocating varying size blocks
will accomplish its goal of creating opportunities for wide-area SMR
providers with differing spectrum needs. Thus, the Commission adopts a
licensing plan which allocates one 120-channel block, one 60-channel
block, and one 20-channel block for each EA. The Commission believes
that these channel block sizes will provide opportunities for a variety
of licensees of different sizes to participate in the provision of
wide-area service.
4. 800 MHz SMR Spectrum Aggregation Limit
11. In the CMRS Third R&O, the Commission concluded that a 45 MHz
limit on aggregation of broadband PCS, cellular, and SMR spectrum,
combined with existing service-specific caps for cellular and PCS, was
sufficient to maintain a competitive CMRS market. In light of this
conclusion, in the Further Notice, the Commission concluded that an
additional aggregation limit within the 800 MHz SMR service was
unnecessary.
12. The Commission concludes in this First R&O that allowing
unrestricted aggregation of 800 MHz SMR spectrum would not impede CMRS
competition. The Commission expresses concern that limiting aggregation
of 800 MHz SMR spectrum may result in a competitive disadvantage to SMR
licensees as potential competitors to broadband PCS and cellular
providers. Thus, the Commission further concludes that SMR licensees
will be permitted to seek and (if they are the high bidders for all EA
licenses) obtain all three of the EA licenses in a particular license
area. The Commission reiterates, however, that even though it has
declined to adopt a spectrum aggregation limit specific to the 800 MHz
SMR service, such licensees remain subject to the 45 MHz CMRS spectrum
aggregation limit and to the competitive component of the public
interest standard.
5. Licensing in Mexican and Canadian Border Areas
13. In the Further Notice, the Commission tentatively concluded
that attempting to create different allocations in border areas would
be administratively unworkable, and, thus, proposed to license wide-
area spectrum blocks on a uniform basis without distinguishing border
from non-border areas. The Commission further proposed to license the
channels in border areas not contained in the wide-area spectrum block
on a channel-by-channel basis under the same rules it ultimately adopts
for the lower 80 channels in non-border areas.
14. The Commission concludes that EA spectrum blocks should be
licensed on a uniform basis, without distinguishing border from non-
border areas. EA licenses will be entitled to use any available border
area channels within their spectrum blocks, subject to international
assignment and coordination of such channels. The Commission also
concludes that the limited channel availability and other operating
restrictions in the border areas are matters to be assessed by EA
[[Page 6140]]
applicants in their valuation of EA spectrum blocks for competitive
bidding purposes. The Commission, however, defers a decision regarding
treatment of 800 MHz SMR channels licensed in border areas, but not
included within the EA spectrum blocks, until the resolution of the
Second Further Notice of Proposed Rule Making in PR Docket No. 93-144.
B. Rights and Obligations of EA Licensees
1. Operational Flexibility
15. In the Further Notice, the Commission tentatively concluded
that wide-area SMR licensees in the 800 MHz band should be authorized
to construct stations at any available site and on any available
channel within their respective spectrum blocks. In addition, the
Commission proposed to allow wide-area licensees to ``self-coordinate''
system modifications within their service areas--that is, to add,
subtract, move, and otherwise modify their base station facilities
without prior Commission consent, provided they notify the Commission
of the coordinates and certify compliance with its co-channel
interference protection and emission requirements.
16. The Commission concludes that grant of EA licenses will provide
licensees with: (1) the right to construct at any available site within
the EA, and to add, subtract, or move site locations within the EA
during the license term, on a ``self-coordinated'' basis; and (2) the
right to use any available spectrum within the EA licensee's designated
spectrum block on a self-coordinated basis, including full discretion
over channelization of available spectrum within the block (provided
that emission mask requirements are met, and co-channel interference
protection is afforded to incumbent licensees and co-channel EA
licensees in neighboring EAs). The Commission further concludes that
simplified initial licensing and subsequent system modification
substantially will reduce the existing administrative burden on both
SMR licensees and the Commission, and will establish greater
consistency with its cellular and PCS licensing rules.
2. Spectrum Management Rights--Acquisition and Recovery of Channels
Within Spectrum Blocks
17. In the Further Notice, the Commission recognized that the
operational flexibility afforded to wide-area 800 MHz SMR licensees
would be limited by the large number of systems already authorized and
operating in the band, particularly in major markets. The Commission
noted that even if wide-area licensees do not immediately obtain clear
spectrum comparable to its allocations for cellular or broadband PCS,
wide-area licensing should confer other valuable rights that would
enhance a licensee's ability to establish wide-area service. Thus, the
Commission proposed to assist wide-area licensees in consolidating
spectrum within their respective blocks by providing that (1) if an
incumbent fails to construct, discontinues operations, or otherwise has
its license terminated by the Commission, the spectrum covered by the
incumbent's authorization automatically reverts to the wide-area
licensee; and (2) if a wide-area licensee negotiates to acquire an
incumbent system by assignment or transfer, the assignment or transfer
presumptively will be considered in the public interest.
18. In this First R&O, the Commission concludes that an EA licensee
has the right to use any spectrum within the EA block that is recovered
by the Commission. In addition, the Commission determines that
assignments from incumbents operating in an EA spectrum block to the
respective EA licensee generally will be presumed to be in the public
interest. The Commission concludes that granting these rights to EA
licensees will give them greater flexibility in managing their
spectrum, establish greater consistency with its cellular and PCS
rules, and reduce regulatory burdens on both licensees and the
Commission with respect to future management of the spectrum within the
wide-area blocks. The Commission also eliminates all waiting lists for
SMR Category channels within the upper 10 MHz block, and dismisses all
applications on such waiting lists. The Commission determines that
continuing such lists would be inconsistent with the wide-area
licensing scheme it has adopted.
19. With respect to the impact of these rights on the finders'
preference program, the Commission concludes that successful applicants
for a finders' preference program will be considered an ``incumbent''
within the meaning of the rules adopted in the First R&O. In addition,
the Commission no longer will accept finders' preference requests
following the adoption of this First R&O. As a result, the EA licensee
will have the exclusive right to recover unconstructed or non-
operational channels on blocks for which it is licensed.
3. License Term and Renewal Expectancy
20. In the CMRS Third R&O, the Commission determined that every
Part 90 licensee that is reclassified and treated as a CMRS licensee
when its current license term expires thereafter shall have a ten-year
license term and be afforded a renewal expectancy, provided it is able
to demonstrate that it: (1) has provided ``substantial'' service during
the license term; and (2) has complied with applicable Commission rules
and policies, and the Communications Act. Furthermore, the Commission
determined that ``grandfathered'' Part 90 licensees, because they
retain their ``private'' status until August 10, 1996, would not be
afforded either the ten-year license term or the renewal expectancy
during the statutory transition period.
21. In this First R&O, the Commission determines that EA licenses
should be granted for a ten-year license term. In addition, EA
licensees generally will be afforded a renewal expectancy as determined
in the CMRS Third R&O.
C. Treatment of Incumbent Systems
1. Mandatory Relocation
22. In the Further Notice, the Commission tentatively concluded
that incumbent SMR systems should not be subject to mandatory
relocation to new frequencies pursuant to Nextel's band-clearing
proposal. The Commission also expressed concern that mandatory
relocation could impose significant costs and disruption on incumbent
licensees.
23. The Commission concludes in this First R&O that, based on the
record in this proceeding, a smooth and expedient transition to the new
licensing framework for 800 MHz SMR service cannot be accomplished
without some form of mandatory relocation. Thus, the Commission has
created a two-phase mandatory relocation mechanism under which there is
a fixed one-year period for voluntary negotiations between EA licensees
and incumbents and a two-year period for mandatory negotiations. Under
this mechanism, if an EA licensee and an incumbent licensee fail to
reach an agreement by the conclusion of the mandatory negotiation
period, then the EA licensee may request involuntary relocation of the
incumbent's system provided that it: (1) guarantees payment of all
costs of relocating the incumbent to a comparable facility; (2)
completes all activities necessary for placing the new facilities into
operation, including engineering and frequency coordination, if
necessary; and (3) builds and tests the
[[Page 6141]]
new system. Specifically, any relocation of an incumbent must be
conducted in such a fashion that there is a ``seamless'' transition
from the incumbent's ``old'' frequency to its ``relocated'' frequency
(that is, there is no significant disruption in the incumbent's
operations). In connection with this mandatory relocation mechanism, EA
licensees will be required to notify incumbents operating on
frequencies included in their spectrum block of their intention to
relocate such incumbents within 90 days of the release of the Public
Notice commencing the voluntary negotiation period. If an applicant
does not receive timely notification of relocation, the EA licensee
loses the right to require that incumbent to relocate.
24. The Commission also initiates a partial lifting of the freeze
on acceptance of new applications for SMR and General Category channels
to permit those assignments and transfers of control that involve
modifications to licensed facilities, provided such assignments and
transfers are designed to accommodate market-driven, voluntary
relocation arrangements between incumbents and potential EA applicants,
and do not change the 22dBu service contour of the facilities to be
relocated. This option is not available for purposes of relocating
incumbents from one part of the upper 10 MHz block to another.
Moreover, potential EA applicants and relocating incumbents utilizing
this option must be completely unaffiliated. Processing of these
assignments and transfers will continue until the date the Commission
releases the Public Notice announcing the upper 10 MHz auction.
2. Incumbent Operation Flexibility
25. In the Further Notice, the Commission tentatively concluded
that in those situations in which incumbents are allowed to continue
operating on already-licensed facilities, incumbent systems should not
be allowed to expand beyond their existing service areas on those
channels designated for wide-area licensing, without the consent of the
wide-area licensee.
26. The Commission concludes that allowing non-EA licensees to
expand their systems at will after wide-area licensing has occurred
would diminish substantially the value of the EA license and would
create continuing uncertainty for EA applicants and licensees alike.
The Commission recognizes, however, that there may be circumstances in
which an EA licensee should be required to permit incumbents to make
minor alterations to their service areas to preserve the viability of
their systems. Thus, the Commission granted operational flexibility to
incumbent SMR licensees to add, subtract, or move site locations within
their current 22 dBu contours, on a ``self-coordinated'' basis. The
incumbent must, however, still comply with the short-spacing criteria
in Section 90.621(b) of the Commission's rules, even if its
modifications do not extend its 22 dBu interference contour. Incumbent
licensees will be required to notify the Commission of any changes in
technical parameters or additional stations constructed, including
agreements with an EA licensee to expand beyond their signal strength
contour, through a minor modification of their license.
D. Co-channel Interference Protection
1. Incumbent SMR Systems
27. In the CMRS Third R&O, the Commission concluded that, as a
general matter, it would retain its existing co-channel protection
rules for CMRS licensees. Under the current rules, a wide-area licensee
would be required to afford protection to incumbents, either by
locating its stations at least 113 km (70 mi) from the facilities of
any incumbent, or by complying with the co-channel separation standards
set forth in its ``short-spacing'' rule if it seeks to operate stations
located less than 113 km (70 mi) from an incumbent licensee's
facilities.
28. In this First R&O, the Commission determines to require EA
licensees to afford interference protection to incumbent SMR systems,
as provided in Section 90.621 of the Commission's rules. As a result,
an EA licensee will be able to satisfy its co-channel protection
obligations with respect to incumbents in one of three ways: (1) by
locating its stations at least 113 km (70 miles) from any incumbent's
facilities; (2) by complying with the short-spacing rule if it seeks to
operate stations less than 113 km from an incumbent's facilities; or,
(3) by negotiating an even shorter distance with the incumbent
licensee. The Commission concludes that these requirements will ensure
adequate protection of incumbent operations, without hampering the
ability of EA licensees to construct stations throughout their
authorized service areas. The Commission believes that this rule will
afford maximum flexibility to EA licensees, allow incumbents to fill in
``dead spots,'' and protect incumbent licensees from actual
interference.
2. Adjacent EA Licensees
29. In the CMRS Third R&O, the Commission concluded that the co-
channel interference protection obligations of geographic-area
licensees with respect to other geographic-area licensees would be
similar to those imposed in the cellular and PCS services. In the
Further Notice, the Commission tentatively concluded, therefore, that
wide-area SMR licensees in the 800 MHz band should not be allowed to
exceed a signal level of 22 dBuV/m at their service area boundaries
(unless they negotiate a different signal strength limit with all
potentially affected adjacent licensees).
30. In this First R&O, the Commission prohibits EA licensees from
exceeding a signal level of 40 dBuV/m at their service area boundaries,
unless all bordering EA licensees agree to a higher field strength. The
Commission requires coordination of frequency use between co-channel
adjacent EA licensees and all other affected parties. This approach
provides EA licensees with a signal strength level sufficient to
operate their systems up to the borders of their EAs, while also
providing protection to adjacent operations. As an exception to this
requirement, when a single entity obtains licenses for adjacent EAs on
the same spectrum block, it will not be required to coordinate its
operations in this manner.
3. Emission Masks
31. To protect against adjacent channel interference, the
Commission has emission mask rules in most mobile radio services to
restrict transmitter emissions on the spectrum adjacent to the
licensee's assigned channel. In the CMRS Third R&O, the Commission
affirmed its out-of-band emission rules for CMRS services and
determined that out-of-band emission rules should apply only where
emissions have the potential to affect other licensees' operations.
With respect to licensees that have exclusive use of a block of
contiguous channels, the Commission concluded that out-of-band emission
rules would be applied only to the extent necessary to protect
operations outside of the licensee's authorized spectrum.
32. The Commission concludes that out-of-band emission rules should
apply only to the ``outer'' channels included in an EA license and to
spectrum adjacent to interior channels used by incumbents. The
Commission believes that these channels alone have the potential to
affect operations outside of the EA licensee's authorized bandwidth.
The Commission also believes that this requirement will facilitate dual
mode
[[Page 6142]]
SMR/cellular operation, similar to that in the PCS/cellular context,
which ultimately will add capacity to the systems operated by the EA
licensees.
E. Construction Requirements
1. EA Licensees
33. In the CMRS Third R&O, the Commission determined that the
record in the CMRS proceeding generally supported use of longer
construction periods, combined with interim coverage requirements, to
ensure that wide-area CMRS licensees provide service to portions of
their service area before the construction period expires. In the
Further Notice, the Commission noted that such an approach has been
used for cellular service and recently was adopted for both broadband
and narrowband PCS. In the Further Notice, the Commission tentatively
concluded that wide-area SMR licensees should have five years to
construct their systems.
34. In this First R&O, the Commission concludes that EA licensees
should have a five-year construction period. While this construction
period is shorter than that imposed for PCS systems, we agree with the
majority of commenters that it is the most appropriate time period for
the 800 MHz SMR service. In addition, given the substantial
construction of 800 MHz SMR systems (including wide-area systems) to
date, the ten-year construction period applicable to PCS appears
excessive for the service. Although a five-year construction period may
give some EA licensees more time to construct certain facilities than
otherwise might have been allowed, the Commission believes that EA
licensees should have this flexibility. Furthermore, the Commission
believes that use of competitive bidding to select geographic-area
licensees provides ample incentives for rapid system construction,
since this permits license winners to recover their bidding expenses.
2. Extended Implementation Authority
35. The Commission noted in the Further Notice that some existing
SMR licensees have been granted extended implementation periods of up
to five years to construct their systems, pursuant to either a waiver
of its construction and loading rules or Section 90.629 of its Rules.
The Commission's rules require SMR licensees with extended
implementation authority to submit annual certifications of compliance
with their yearly station construction commitments. Moreover, if the
Commission concludes, at any time, that the licensee has failed to meet
such construction commitments, it may terminate extended implementation
authority and give the licensee six months from the termination date to
complete construction of the system.
36. Following the Commission's adoption of the Further Notice, some
SMR licensees filed requests for extended implementation authority,
which remain pending. With respect to two such requests filed by
Chadmoore and PCC Management Corp., the Wireless Telecommunications
Bureau (``Bureau'') released a Public Notice seeking comment on whether
the requests should be granted. In its extended implementation
authority request, Chadmoore sought three years to construct a non-
contiguous ``wide-area'' SMR system that will extend from the
southeastern United States through the upper Midwest and use new
technology. Chadmoore argued that grant of its extended implementation
request was warranted on four grounds: (a) Chadmoore's principals have
demonstrated expertise in SMR sales and service; (b) Chadmoore
previously has demonstrated its ability to acquire and construct those
licenses granted to SMR ``investors;'' (c) Chadmoore's proposal would
assist those licensees ``who have, as yet, not constructed'' their
stations, and who are in danger of losing their investment once their
already extended deadline has expired; and, (d) grant of Chadmoore's
proposal would promote competition in the SMR equipment manufacturing
market. Similarly, PCC sought a period of three years to construct a
regional, and ultimately nationwide, network of SMR systems. PCC's
proposed system would include 2,181 channels, 849 conventional channels
and 269 trunked channels, encompassing 1,118 licenses. PCC argued that
grant of its extended implementation request was warranted for the
following reasons: (a) climatic conditions for the region(s) in which
the SMR systems are located preclude construction during certain
seasons of the year; (b) grant of PCC's proposal would assist licensees
who have not yet constructed their authorized facilities; (c) PCC's
implementation plan would result in a more cost-effective build-out for
the stations included in its proposal; and (d) grant of PCC's proposal
would facilitate the implementation of an integrated nationwide
network.
37. The Commission initially established extended implementation
authority for SMRs to facilitate construction of wide-area systems. In
the First R&O, the Commission concludes that the availability of
extended implementation authority in the 800 MHz SMR service is no
longer necessary. In fact, the Commission is concerned that both
existing and future grants of extended implementation authority would
be contrary to the underlying goals of this proceeding. Specifically,
the Commission believes that allowing licensees to retain extended
implementation authority of up to five years after adoption of the
wide-area licensing approach detailed in this First R&O would impinge
upon the construction requirements imposed on EA licensees. Thus, the
Commission believes that it is necessary not only to cease acceptance
of requests for extended implementation authority but also to
accelerate the termination date of existing implementation periods so
that EA licensees will not be unnecessarily hampered in their efforts
to comply with the construction requirements associated with their
authorizations.
38. In addition, several licensees and commenters contend that such
extended implementation grants have resulted in spectrum warehousing.
To address these spectrum warehousing concerns, the Commission will
require all incumbent 800 MHz SMR licensees who have received extended
implementation authority to demonstrate that allowing them extended
time to construct their facilities is warranted and furthers the public
interest. Specifically, a licensee seeking to retain extended
implementation authority must: (a) indicate the duration of its
extended implementation period (including commencement and termination
date); (b) provide a copy of its implementation plan, as originally
submitted and approved by the Commission, and any Commission-approved
modifications thereto; (c) demonstrate its compliance with Section
90.629 of its rules if authority was granted pursuant to that
provision, including confirmation that it has filed annual
certifications regarding fulfillment of its implementation plan; and
(d) certify that all facilities covered by the extended implementation
authority proposed to be constructed as of the adoption date of this
First R&O are fully constructed and that service to subscribers has
commenced as defined in the CMRS Third R&O. These showings must be
submitted within 90 days from the effective date of this First R&O. The
Commission notes that all of the information to be included in the
showing presently is required by Section 90.629 of its Rules. The
Commission delegated to the Bureau the authority to review and take
appropriate action upon such showings.
39. If a licensee's extended implementation authority showing is
approved by the Bureau, such licensee
[[Page 6143]]
will be afforded a construction period of two years or the remainder of
its current extended implementation period, whichever is shorter. The
Commission recognizes that some licensees were initially granted
extended implementation periods which exceed this two-year period. In
those instances where a licensee demonstrates that it has fully
complied with the requirements of Section 90.629 of the Commission's
rules and that its system cannot reasonably be completed within the
two-year period, the Commission will entertain requests for the minimum
period of time necessary to complete implementation of the licensee's
proposal provided that the licensee explains why the two-year period is
an insufficient amount of time. The Commission anticipates that such
explanation would entail the same type of public interest showing
associated with a request for waiver of the Commission's rules under
Section 1.3 of the rules.
40. Upon the termination of this two-year period, authorizations
for facilities that remain unconstructed will cancel automatically. If
a licensee either fails to submit the showing described above within
the designated time frame or submits an insufficient or incomplete
showing, such licensee will have six months from the last day on which
it could timely file such a showing or six months from the denial of
its request to construct the remaining facilities covered under its
implementation plan. After this six-month period, authorizations for
facilities still unconstructed will cancel automatically.
41. With respect to pending requests for extended implementation
authority, the Commission determines that grant of these requests would
conflict with its goal of uniformly implementing wide-area licensing.
It also reiterates that parties that remain interested in obtaining
extended implementation authority are free to apply for an EA license
under the Commission's new rules.
3. Interim Coverage Requirements
42. In the CMRS Third R&O, the Commission concluded that 800 MHz
wide-area SMR licensees should be subject to interim coverage
requirements that are similar to those in the cellular and PCS rules.
In the Further Notice, the Commission proposed that geographic-area
licensees be required to provide coverage to one-third of the
population within their license area within three years of initial
license grant, and to two-thirds of the population by the end of their
five-year construction period.
43. In the CMRS Third R&O, the Commission noted that any interim
coverage requirements for wide-area SMR systems must account for the
fact that geographic-area licensees may be required to provide co-
channel protection to incumbent systems within their service area. In
the Further Notice, the Commission indicated its belief that when a
licensee acquires a wide-area license, it assumes the responsibility of
obtaining the right to use sufficient spectrum to provide coverage if
such spectrum is not already available. The Commission further
indicated its expectation that coverage be achieved directly by
constructing facilities on available spectrum authorized to the wide-
area licensee or acquiring such spectrum through buy-outs of incumbent
licensees within its authorized spectrum block. To the extent that the
Further Notice could be read to propose that coverage could be met
through use of resale or similar agreements, the Commission clarifies
its intention that the wide-area licensee is free to engage in resale
activities, but must satisfy its construction requirements through use
of its facilities and not capacity acquired from others through resale.
44. The Commission will require EA licensees to provide coverage to
one-third of the population of their respective EAs within three years
of initial license grant and to two-thirds by the end of their five-
year construction period. This requirement is consistent with the
Commission's 900 MHz SMR rules. Unlike its approach in the 900 MHz SMR
context, the Commission is not adopting a ``substantial service''
benchmark for the upper 10 MHz block as an alternative to the
population coverage criteria. Given the already extensive licensing in
the upper 10 MHz block, the Commission believes it is unlikely that an
EA licensee could provide substantial service without buying incumbent
systems or relocating incumbents. Similarly, the Commission did not
adopt a ``substantial service'' standard in the Multipoint Distribution
Service (MDS) because of extensive incumbent presence in that spectrum.
4. Channel Use Requirement
45. Given the extensive licensing of the upper 10 MHz block, the
Commission shares the concern of several commenters that interim
coverage requirements alone may not ensure efficient spectrum use
unless a channel use requirement is added. Specifically, the Commission
is concerned that an EA licensee potentially could satisfy the interim
coverage requirements by constructing only one channel in its spectrum
block. This would result in inefficient use of 800 MHz SMR spectrum,
for which there is great demand. In addition, unlike the 900 MHz SMR
service and other lightly encumbered auctionable services, the
substantial incumbent presence in the 800 MHz SMR service presents the
potential for a bidder who is incapable of building out a wide-area
system to participate in the auction solely to restrict a competing
incumbent licensee's ability to expand. Accordingly, the Commission
will require EA licensees to construct 50 percent of the total channels
included in their spectrum blocks in at least one location in their
respective EAs within three years of initial license grant. Although
the Commission does not impose an additional channel use requirement at
the fifth year, EA licensees nonetheless are required to maintain their
compliance with the initial channel usage requirement for the remainder
of their construction period.
5. Non-compliance With Interim Coverage Requirements
46. The Commission concluded that an EA licensee's failure to meet
either the three-year or five-year coverage requirements or the channel
usage requirement will result in forfeiture of the entire EA license.
Forfeiture of the EA license, however, will not result in the loss of
any constructed facilities authorized to the licensee prior to the
auction.
F. EA License Application Issues
1. Initial Eligibility
47. In the CMRS Third R&O and the Further Notice, the Commission
tentatively concluded that the initial application process for wide-
area SMR licenses should be open to any qualified applicant. The
Commission also sought comment on whether it was necessary to restrict
eligibility for EA licenses to incumbent licensees (or to restrict
eligibility based on other criteria) if competitive bidding procedures
are used in the upper 10 MHz block.
48. In this First R&O, the Commission concludes that restrictions
on eligibility for EA licenses are not warranted, except that EA
applicants will be presumptively classified as CMRS, and therefore will
be required to comply with the alien ownership requirements specified
in Section 310 of the Act. The Commission has adopted specific
provisions in the service rules for the upper 10 MHz block to address
these concerns, e.g., imposition of construction periods combined with
[[Page 6144]]
interim coverage and channel use requirements. Moreover, the Commission
believes that the competitive bidding process itself will deter
speculation by those not genuinely interested in providing service to
the public. In addition, the Commission believes that open eligibility
for the EA licensees will be pro-competitive and potentially will
result in a diverse group of entities providing wide-area SMR service
in the upper 10 MHz block.
49. With respect to foreign ownership, all applicants will be
subject to Section 310(b) of the Communications Act, except to the
extent they have received waiver of preexisting ownership interests. In
the CMRS docket, the Commission established specific procedures for
private mobile services licensees reclassified as CMRS to file waiver
petitions to retain existing foreign ownership interests. Thus, any
reclassified private mobile services licensees that have levels of
alien ownership or control that would be prohibited when these
licensees assume CMRS status must already have filed a petition seeking
to have such interests grandfathered.
2. Regulatory Classification of EA Licensees
50. In the CMRS Second R&O, the Commission determined that SMR
licensees would be classified as CMRS if they offered interconnected
service and as PMRS if they did not offer such service. In the Further
Notice, the Commission indicated its view that most, if not all, EA
licensees will be classified as CMRS, because they are likely to
provide interconnected service as part of their service offering. As a
result, the Commission proposed to classify all EA licensees
presumptively as CMRS providers. The Commission also proposed that EA
applicants or licensees who do not intend to provide CMRS service would
be able to overcome this presumption by demonstrating that their
service does not fall within the CMRS definition. The Commission
further proposed that the statutory grandfathering period also would
apply with respect to the operation of this presumption. As a result,
entities licensed in the SMR service as of August 10, 1993, would not
be subject to CMRS regulation, other than foreign ownership
restrictions, until August 10, 1996.
51. The Commission reiterates its conclusion that EA licensees will
be classified presumptively as CMRS providers. The Commission also
concluded that EA applicants and licensees, like other CMRS providers
(such as broadband PCS applicants and licensees), will be able to
overcome this presumption if they demonstrate that their service does
not fall within the CMRS definition provided in Section 332(d)(1) of
the Communications Act.
G. Redesignation of Other 800 MHz Spectrum--General Category Channels
and Inter-Category Sharing
52. Currently, 800 MHz SMR systems may be licensed on the General
Category channels or licensed under its inter-category sharing rules on
100 channels in the Industrial/Land Transportation and Business
Categories (collectively, ``Pool Channels''). In the Further Notice,
the Commission indicated that although it believes that SMR licensees
with existing operations on the General Category or Pool Channels
should be allowed to operate on such channels, the Commission also
believes that some restriction on future SMR applications for General
Category or Pool Channels might be appropriate.
1. General Category Channels
53. In the Further Notice, the Commission asked commenters to
address whether the entire General Category or some portion thereof
should be designated for future licensing exclusively to SMR
applicants. The Commission's licensing records indicate that the
overwhelming majority of General Category channels are used for SMR as
opposed to non-SMR service. As a result, the Commission concludes that
the demand for additional spectrum by SMR providers is significantly
greater than the demand by non-SMR services. In addition, given the
already extensive licensing on the upper 10 MHz block and the mandatory
relocation established in this First R&O, as part of its wide-area
licensing for the 800 MHz SMR service, the Commission expects that
demand for additional SMR spectrum will increase, as EA licensees seek
frequencies for relocation of incumbents. The Commission believes that
by prohibiting SMR eligibility on the Pool Channels it will relieve
much of the pressure on such frequencies. The Commission concludes that
the most efficient use of the General Category channels is to
redesignate them exclusively for SMR use.
2. Inter-Category Sharing
54. In the Further Notice, the Commission noted that the Pool
Channels are intended for non-commercial internal use by Business and
Industrial/Land Transportation licensees, and their availability for
SMR licensees was to be on a limited basis only. After the release of
the Further Notice, the Bureau placed a freeze on inter-category
sharing.
55. The Commission is concerned that continuing to allow SMR
applications for the Pool Channels could cause a scarcity of
frequencies for PMRS uses. Specifically, if these channels remain
available to SMR licensees, but are not subject to auctions, demand for
the channels by SMR applicants seeking to avoid auctions may render
them unavailable to other eligible Part 90 services. Thus, the
Commission revises current eligibility rules for inter-category sharing
of the Pool Channels to eliminate the risk of SMR encroachment on
spectrum allocated for PMRS purposes. SMR licensees no longer will be
eligible to apply for Pool Channels on an inter-category sharing basis.
56. In light of its elimination of SMR eligibility for the Pool
Channels, the Commission concludes that non-SMR licensees no longer
will be eligible for SMR channels, including the General Category
channels. With respect to the upper 10 MHz block, the Commission
concludes that non-SMR incumbent licensees, like SMR incumbent
licensees, will receive the operational rights extended to incumbents
and will be subject to the mandatory relocation mechanism.
III. Eighth Report and Order
A. Auctionability of the Upper 10 MHz Block of 800 MHz SMR Spectrum
57. Section 309(j) of the Communications Act, permits auctions only
where: (1) mutually exclusive applications for initial licenses or
construction permits are accepted for filing by the Commission; (2) the
principal use of the spectrum will involve or is reasonably likely to
involve the receipt by the licensee of compensation from subscribers in
return for enabling those subscribers to receive or transmit
communications signals; and, (3) the objectives set forth in Section
309(j)(3) would be promoted.
58. In the Second Report and Order in PP Docket No. 93-253, 59 FR
22980 (May 4, 1994) (Competitive Bidding Second R&O), the Commission
concluded that SMR as a class of service, including 800 MHz SMR, would
satisfy the Section 309(j) criteria for auctionability. The Commission
noted that its rules explicitly contemplate and expect that SMR
licensees will provide service to eligible subscribers for
compensation. The Commission concluded that the use of competitive
bidding will speed the development and rapid deployment of SMR service,
including service in rural areas, with minimal administrative or
judicial
[[Page 6145]]
delays, as required by Section 309(j)(3)(A). The Commission also
determined that competitive bidding would promote the objectives of
Section 309(j)(3)(C) in the SMR service by recovering for the public a
portion of the value of SMR spectrum made available for commercial use,
and avoiding unjust enrichment.
59. In the CMRS Third R&O, the Commission concluded that it
generally should use competitive bidding procedures to select among
mutually exclusive CMRS applications where it has the authority to do
so and where the Commission find such processing to be in the public
interest. The Commission specifically concluded that competitive
bidding procedures should be used to select between mutually exclusive
initial applications in the 800 MHz SMR service. The Commission also
concluded that, because the number of mutually exclusive applications
in future licensing in the 800 MHz SMR service may be considerable, the
use of competitive bidding will ensure that the qualified applicants
who place the highest value on the available spectrum will prevail in
the selection process.
60. The Commission reiterates its conclusion that competitive
bidding is an appropriate licensing tool for the 800 MHz SMR service.
The Commission emphasizes that the use of auctions will apply only to
issuance of initial licenses in the upper 10 MHz block, the EA
licenses. These EA licenses previously have not been issued by the
Commission, and include certain rights and obligations that previously
were not granted to or required of licensees. Significantly, its
granting of these EA licenses does not affect rights afforded to
licensees under existing authorizations, because incumbent licensees
will be able to continue to operate their systems. Even though
incumbents will be subject to mandatory relocation under certain
circumstances, their existing operations will be protected.
Furthermore, auctions will be used only in the event that there are
competing applications for the same EA license.
61. The Commission concludes that use of competitive bidding in the
upper 10 MHz block is authorized by Section 309(j) of the
Communications Act. The Commission affirmed its previous conclusion
that 800 MHz SMR, as a service, satisfies the criteria set forth by
Congress for determining when competitive bidding should be used. SMR
licenses are used to provide service to subscribers for compensation,
so a precondition to competitive bidding under Section 309(j)(2)(A) is
met. Moreover, competitive bidding will further the public interest
requirements of Section 309(j)(3), by promoting rapid development of
service, fostering competition, recovering a portion of the value of
the spectrum for the public, and encouraging efficient spectrum use.
Where competitive bidding is utilized, a diverse group of entities,
including incumbent licensees and potential new entrants, will be able
to participate in the auction process, because the Commission has
decided not to restrict eligibility for these EA licenses, an outcome
which furthers the goals of Section 309(j)(3)(B) of the Communications
Act.
62. Additionally, the Commission believes that competitive bidding
procedures will minimize administrative or judicial delays in
licensing, particularly when compared to other licensing alternatives--
comparative hearings, lotteries (which specifically are prohibited
since the 800 MHz SMR service is auctionable), or first-come, first-
served procedures. The Commission employed first-come, first-served
procedures in the 800 MHz SMR service prior to its implementation of
the Budget Act. The Commission's experience is that such procedures
have resulted in processing delays. By contrast, the Commission expects
that use of competitive bidding will allow interested parties to obtain
expeditious access to 800 MHz SMR spectrum and to use such spectrum
efficiently. The Commission concludes that this result furthers both
Section 309(j)(3)(A) and Section 309(j)(3)(D) of the Communications
Act.
63. The Commission disagrees with those commenters who argue that
the Commission's competitive bidding authority does not extend to
existing services. Section 309(j) of the Communications Act does not
distinguish between new services (such as PCS) and existing services in
terms of whether initial licenses in a given service should be subject
to competitive bidding. Accordingly, the Commission concludes that its
determination that the 800 MHz SMR service is auctionable is fully
consistent with Section 309(j) of the Communications Act.
B. Competitive Bidding Methodology for Upper 10 MHz Block
1. Competitive Bidding Design
64. Simultaneous Multiple Round Auctions. Based on the record in
this proceeding and the Commission's successful experience conducting
simultaneous multiple round auctions for other CMRS services (e.g.,
narrowband and broadband PCS), the Commission believes a simultaneous
multiple round auction is the most appropriate competitive bidding
design for the 10 MHz upper block of 800 MHz SMR spectrum. The
Commission has developed and successfully conducted auctions with
software capable of handling numerous licenses in a simultaneous
multiple round auction. Thus, this methodology will afford the
Commission administrative convenience and enable it to hold an auction
quickly and efficiently. For certain bidders, the value of these
licenses will be significantly interdependent because of the
desirability of aggregation across geographic regions. Given this high
degree of interdependency among licenses, the Commission rejects SBA's
suggestion that single round sealed bidding is a more appropriate
competitive bidding design for licensing the upper 10 MHz SMR spectrum
blocks. The Commission believes that simultaneous multiple round
bidding will generate more information about license values during the
course of the auction and provide bidders with more flexibility to
pursue back-up strategies, than if the licenses were auctioned
separately or through sealed bidding. As the Commission decided in the
900 MHz SMR service, the Bidder Information Package for the 10 MHz
upper block licenses will provide all the information about incumbent
licensees that is available in its licensing records as of 60 days
prior to the filing deadline for participation in the auction. In this
connection, upon release of the Public Notice announcing the date of
the auction for the upper 10 MHz block of 800 MHz SMR spectrum, all
pending applications for frequencies within this spectrum will be
returned without prejudice to the applicants. These applicants then
will be able to seek licenses for these frequencies through the
competitive bidding process. In addition, the Commission encourages all
potential bidders to examine these records carefully and do their own
independent investigation regarding existing licensees' operations in
each EA in which they intend to bid in order to maximize their success
in the auction. The Commission will hold a seminar for prospective
bidders to acquaint them with this competitive bidding design. The
Commission will announce the date and location for such seminar by
Public Notice. The Commission concludes, therefore, that simultaneous
multiple round bidding is most likely to award licenses to the bidders
who value them the most highly and to provide bidders with the greatest
likelihood of obtaining the license
[[Page 6146]]
combinations that best satisfy their service needs.
65. Stopping Rules. The Commission will adopt a simultaneous
stopping rule for the upper 10 MHz block 800 MHz SMR auction. The
simultaneous stopping rule is designed to allow bidders to decide how
long the auction will run, based on bidding strategy and demand for
each license. Under a simultaneous stopping rule, bidding will remain
open on all licenses in an auction until bidding stops on every
license. In this Eighth R&O, the Commission concludes that the
substitutability between licenses within the same EA and the ability to
pursue back-up strategies support the use of a simultaneous stopping
rule.
66. As a result, the upper 10 MHz block 800 MHz SMR auction will
close after one round passes in which no new valid bids or proactive
activity rule waivers are submitted. The Commission retains the
discretion to keep the auction open even if no new acceptable bids and
no proactive waivers are submitted in a single round. In the event that
the Commission exercise this discretion, the effect will be the same as
if a bidder has submitted a proactive waiver. The Commission also
retains the discretion to announce market-by-market closings.
67. The Commission further retains the discretion to declare after
40 rounds that the auction will end after some specified number of
additional rounds. Bids will be accepted only on licenses where the
high bid has increased in the last three rounds. This will deter
bidders from continuing to bid on a few low value licenses solely to
delay the closing of the auction. It also will enable the Commission to
end the auction when it determines that the benefits of terminating the
auction and issuing licenses exceed the likely benefits of continuing
to allow bidding. The Commission will announce by Public Notice the
number of remaining rounds and other final bidding procedures. In this
Eighth R&O, the Commission delegates authority to the Bureau to issue
such Public Notices.
68. Activity Rules. In the Further Notice, the Commission proposed
that if simultaneous multiple round auctions are used for the upper 10
MHz block, the Commission would use activity rules the same as or
similar to those used in simultaneous multiple round bidding for MTA-
based PCS licenses. The Commission has used the Milgrom-Wilson activity
rule to award broadband and narrowband PCS licenses. In the Competitive
Bidding Fifth R&O, the Commission permitted broadband PCS bidders one
``automatic'' waiver from the activity rule during each stage of an
auction. An automatic waiver is exercised by the Commission if a bidder
fails to bid and fails to submit a ``proactive'' waiver, unless the
bidder chooses to override the automatic waiver process to
intentionally decrease eligibility: a ``proactive'' waiver is one which
can be submitted by the bidder when it chooses not to bid in a round
and wishes to maintain its current eligibility level. With respect to
broadband PCS auctions, the Commission initially determined that only
proactive waivers, and not automatic waivers, would keep an auction
open. In that context, however, the Commission later modified the rule
by retaining the discretion to keep an auction open even if no new
acceptable bids and no proactive waivers are submitted in a single
round. The Commission will employ the Milgrom-Wilson activity rule in
conjunction with the simultaneous stopping rule. Under the Milgrom-
Wilson approach, the minimum activity level, measured as a fraction of
the bidder's eligibility in the current round, increases during the
course of the auction. The three-stage Milgrom-Wilson approach
encourages bidders to participate in early rounds by limiting their
maximum participation to some multiple of their minimum participation
level.
69. Absent waivers, a bidder's eligibility (in terms of activity
units) in the current round is determined by the bidder's activity
level and eligibility in the previous round. In the first round,
however, eligibility is determined by the bidder's upfront payment and
is equal to the upfront payment divided by $0.02 per activity unit.
70. In each round of Stage I, a bidder who wishes to maintain its
current eligibility must be active on licenses encompassing at least
one-half (50 percent) of the activity units for which it currently is
eligible. Failure to maintain the requisite activity level will result
in a reduction in the amount of activity units upon which a bidder will
be eligible to bid in the next round of bidding (unless an activity
rule waiver is used). During Stage I, if bidding activity is below the
required minimum level, eligibility in the next round will be
calculated by multiplying the current round activity by two.
Eligibility for each applicant in the first round of the auction is
determined by the amount of the upfront payment received and the
licenses identified in its auction application. In each round of Stage
II, a bidder who wishes to maintain its current eligibility in the next
round is required to be active on at least 75 percent of the activity
units for which it is eligible in the current round. During Stage II,
if activity is below the required minimum level, eligibility in the
next round will be calculated by multiplying the current round activity
by four-thirds (\4/3\). In each round of Stage III, a bidder who wishes
to maintain its current eligibility must be active on licenses
encompassing at least 95 percent of the activity units for which it is
eligible in the current round. In Stage III, if activity in the current
round is below 95 percent of current eligibility, eligibility in the
next round will be calculated by multiplying the current round activity
by twenty nineteenths (\20/19\). The Commission reserve the discretion
to set and, by announcement before or during the auction, vary the
requisite minimum activity levels (and associated eligibility
calculations) for each auction stage. Retaining this flexibility will
improve the Commission's ability to control the pace of the auction and
help ensure that the auction is completed within a reasonable period of
time.
71. As in prior auctions, the Commission will determine the
transition from one stage to the next in the 800 MHz SMR auction by the
aggregate level of bidding activity, subject to its discretion. The
transition rule also may be defined in terms of the ``auction activity
level''--the sum of activity units of those licenses whose high bid
increased in the current round, as a percentage of the total activity
units of all licenses in that auction. The auction will start in Stage
I and move to Stage II when the auction activity level is below ten
percent for three consecutive rounds in Stage I. The auction will move
from Stage II to Stage III when the auction activity level is below
five percent for three consecutive rounds in Stage II. In no case can
the auction revert to an earlier stage. The Commission retains the
discretion, however, to determine and announce during the course of an
auction when, and if, to move from one auction stage to the next. These
determinations will be based on a variety of measures of bidder
activity including, but not limited to, the auction activity level
defined above, the percentage of licenses (measured in terms of
activity units) on which there are new bids, the number of new bids,
and the percentage increase in revenue.
72. To avoid the consequences of clerical errors and to compensate
for unusual circumstances that might delay a bidder's bid preparation
or submission on a particular day, the Commission will provide bidders
with five activity rule waivers that may be used in any round during
the course of the auction.
[[Page 6147]]
If a bidder's activity level is below the required activity level a
waiver automatically will be applied. That is, if a bidder fails to
submit a bid in a round, and its activity level from any ``standing''
high bids (i.e., high bids at the end of the bid withdrawal period in
the previous round) falls below its required activity level, a waiver
automatically will be applied. A waiver will preserve current
eligibility in the next round, but cannot be used to correct an error
in the bid amount. An activity rule waiver applies to an entire round
of bidding and not to a particular EA service area.
73. Bidders will be afforded an opportunity to override the
automatic waiver mechanism when they place a bid, if they wish to
reduce their bidding eligibility and do not want to use a waiver to
retain their eligibility at its current level. If a bidder overrides
the automatic waiver mechanism, its eligibility permanently will be
reduced, and it will not be permitted to regain its bidding eligibility
from a previous round. An automatic waiver invoked in a round in which
there are no valid bids will not keep the auction open. Bidders will
have the option to enter a ``proactive'' waiver during the bid
submission period. If a bidder submits a proactive waiver in a round in
which no other bidding activity occurs, the auction will remain open.
74. The Commission retains the discretion to issue additional
waivers during the course of an auction for circumstances beyond a
bidder's control. The Commission also retains the flexibility to
adjust, by Public Notice prior to an auction, the number of waivers
permitted, or to institute a rule that allows one waiver during a
specified number of bidding rounds or during specified stages of the
auction. In this Eighth Report and Order, the Commission delegated to
the Bureau the discretion to issue additional waivers or restrict the
use of such waivers.
2. License Grouping
75. In the Further Notice, the Commission tentatively concluded
that if simultaneous multiple round auctions were used for the 800 MHz
SMR wide-area spectrum blocks, the wide-area licenses covering these
spectrum blocks should be auctioned simultaneously, because of the
relatively high value and significant interdependence of the licenses.
76. The Commission believes that the licenses for the upper 10 MHz
band are significantly interdependent. The Commission believes that
grouping interdependent licenses and putting them up for bid at the
same time will facilitate awarding licenses to bidders who value them
most highly by providing bidders with information about the prices of
complementary and substitutable licenses during the course of an
auction. Because potential bidders may be interested in aggregating
spectrum across geographic areas as well as across spectrum blocks, the
Commission disagrees with Cellcall's suggestion to auction each
geographic area individually. As a result, the Commission concludes
that all EA licenses for the upper 10 MHz block should be auctioned
simultaneously. The Commission further concludes that holding a single
auction for all 176 EAs in the 800 MHz SMR band will be the fairest,
fastest, and most efficient means of distributing these licenses.
3. Bidding Issues for Upper 10 MHz Block of 800 MHz SMR Spectrum
77. Bidding Procedures. In the Further Notice, the Commission
proposed that if simultaneous multiple round auctions are used for
wide-area SMR licenses, the Commission would use the same or similar
bidding procedures to those used in simultaneous multiple round bidding
for broadband PCS licenses. The Commission adopts the same bidding
procedures used for MTA-based PCS licenses. Under these procedures,
bidders will be able to submit bids via remote bidding, using special
bidding software, or via telephone. The Commission has established a
schedule of fees that participants in the competitive bidding process
will be assessed for certain on-line computer services, bidding
software, and for Bidder Information Packages. In addition, bidders
will be permitted to bid electronically only if they have filed a
short-form application electronically. Bidders who file their short-
form manually may bid only telephonically. When submitting bids
telephonically, bidders may utilize the Internet to learn the round-by-
round results of the auction. Online services such as CompuServe,
Prodigy, and America Online provide Internet access at a reasonable
cost. Bidders also may, at negligible cost, use a computerized bulletin
board service, accessible by telephone lines, from which auction
results can be downloaded to a personal computer. The Commission
intends to hold a seminar for prospective bidders to acquaint them with
these bidding procedures.
78. Bid Increments. In the Further Notice, the Commission proposed
that if simultaneous multiple round auctions are used for the upper 10
MHz block, the Commission would use the same or similar procedures for
bid increments as those used in simultaneous multiple round bidding for
MTA-based PCS licenses.
79. The Commission will announce, by Public Notice prior to the
auction, the general guidelines for bid increments. The Commission
retains the discretion to set and, by announcement before or during the
auction, vary the minimum bid increments for individual licenses or
groups of licenses over the course of the auction.
80. Duration of Bidding Rounds. In simultaneous multiple round
auctions, the Commission recognize that bidders may need a significant
amount of time to evaluate back-up strategies and develop their bidding
plans. The Commission delegated to the Bureau the discretion to vary
the duration of the bidding rounds or the interval at which bids are
accepted (e.g., to run more than one round per day) in order to move
the auction to closure more quickly. The Bureau will announce any
changes to the duration of and intervals between bidding rounds, either
by Public Notice prior to the auction or by announcement during the
auction.
4. Procedural and Payment Issues
81. Pre-Auction Application Procedures. In the Competitive Bidding
Second R&O, the Commission determined that it should require only a
short-form application (FCC Form 175) prior to auction, and that only
winning bidders should be required to submit a long-form license
application (FCC Form 600) after the auction. In this connection, the
Commission determined that such a procedure would fulfill the statutory
requirements and objectives and adequately protect the public interest.
In the Further Notice, the Commission proposed to treat all wide-area
applicants as initial applicants for public notice, application
processing, and competitive bidding purposes, regardless of whether
they already are incumbent licensees in the 800 MHz band. In addition
in the Further Notice, the Commission proposed to require applicants
for wide-area SMR licenses to file an initial ``short-form''
application in order to qualify for competitive bidding.
82. The Commission will extend the pre-auction application
procedures established in the Competitive Bidding Second R&O to the
competitive bidding process for the upper 10 MHz block. With respect to
the definition of ``initial'' application in the upper 10 MHz block of
800 MHz SMR spectrum, the Commission believes that the most appropriate
basis for this determination is an evaluation of the nature of the EA
license. As EA licensees will gain use of
[[Page 6148]]
a large geographic area and the freedom to locate base stations
anywhere within that larger geographic region, they differ from the
existing 800 MHz SMR licensees that essentially are confined to smaller
geographic areas, are site-specific, and do not encompass a large
number of frequencies. Accordingly, the Commission will treat all EA
applicants as initial applicants for public notice, application
processing, and auction purposes, regardless of whether they already
are incumbent operators.
83. Prior to the start of the 800 MHz SMR auction, the Commission
will release an initial Public Notice announcing the auction. The
initial Public Notice will specify the licenses to be auctioned and the
time and place of the auction in the event that mutually exclusive
applications are filed. The Public Notice will specify the method of
competitive bidding to be used, applicable bid submission procedures,
stopping rules, activity rules, the deadline by which short-form
applications must be filed, and the amounts and deadlines for
submitting upfront payments. The Commission will not accept
applications filed before or after the dates specified in the Public
Notice. Applications submitted before the release of the Public Notice
will be returned as premature. Likewise, applications submitted after
the deadline specified by the Public Notice will be dismissed, with
prejudice, as untimely.
84. Soon after the release of the initial Public Notice, a Bidder
Information Package will be made available to prospective bidders. The
Bidder Information Package for the 800 MHz SMR service will contain
information on the incumbents occupying blocks on which bidding will be
available.
85. Section 309(j)(5) provides that no party may participate in an
auction ``unless such bidder submits such information and assurances as
the Commission may require to demonstrate that such bidder's
application is acceptable for filing.'' Moreover, ``[n]o license shall
be granted to an applicant selected pursuant to this subsection unless
the Commission determines that the applicant is qualified pursuant to
Section 309(a), Section 308(b), and Section 310'' of the Communications
Act. As the legislative history of Section 309(j) makes clear, the
Commission may require that bidders' applications contain all
information and documentation sufficient to dem
FR Doc. 96-3509 The Future Development of SMR Systems in the 800 MHz Frequency Band
onstrate that the
application is not in violation of the Commission's rules, and the
Commission will dismiss applications not meeting those requirements
prior to the auction.
86. Thus, all bidders will be required to submit short-form
applications on FCC Form 175 (and FCC Form 175-S, if applicable), by
the date specified in the initial Public Notice. Applicants are
encouraged to file FCC Form 175 electronically. Detailed instructions
regarding electronic filing will be contained in the Bidder Information
Package. Those applicants filing manually will be required to submit
one paper original and one diskette original of their application, as
well as two diskette copies. In addition, applicants filing manually
will not be permitted to bid electronically. The short-form
applications will require applicants to provide the information
required by Section 1.2105(a)(2) of the Commission's rules.
Specifically, each applicant will be required to specify on its FCC
Form 175 application certain identifying information, including its
status as a designated entity, its classification (i.e., individual,
corporation, partnership, trust, or other), the EAs and spectrum blocks
for which it is applying, and, assuming that the licenses will be
auctioned, the names of persons authorized to place or withdraw a bid
on its behalf. The Commission requests applicants indicate their
designated entity status in order to assist us in analyzing the
applicant pool and the auction results to determine whether the
Commission has accomplished substantial participation by minorities,
women, small businesses, and rural telephone companies. In this
connection, the Commission notes that Section 309(j) of the
Communications Act requires us to prepare a report on the participation
of designated entities in the auction and in the provision of spectrum-
based services.
87. As the Commission indicated in the Competitive Bidding Second
R&O, if it receives only one application that is acceptable for filing
for a particular license, and thus there is no mutual exclusivity, the
Commission will issue a Public Notice cancelling the auction for this
license and establishing a date for the filing of a long-form
application, the acceptance of which will trigger the procedures
permitting petitions to deny. If no petitions to deny are filed, the
application will be grantable after 30 days. By ensuring that bidders
and license winners are serious, qualified applicants, these rules will
minimize the need to re-auction licenses and will prevent delays in the
provision of 800 MHz SMR service to the public. In response to those
commenters concerned about the ability of unsuccessful bidders to
participate in geographic-area licensing, the Commission reiterated its
decision in the First R&O that incumbents, post-auction, will be able
to trade-in their multiple licenses for a single authorization in a
particular area, provided certain conditions are satisfied.
88. Amendments and Modifications. The Commission will adopt the
following procedures for amendments to and modifications of short-form
applications in the 800 MHz SMR service. Upon reviewing the short-form
applications, the Commission will issue a Public Notice listing all
defective applications, and applicants with minor defects will be given
an opportunity to cure them and resubmit a corrected version. By the
resubmission date, all applicants will be required to submit an upfront
payment to the Commission, as discussed below, to the Commission's
lock-box by the date specified in the Public Notice, which should be no
later than 14 days before the scheduled auction. After the Commission
receives from its lock-box bank the names of all applicants who have
submitted timely upfront payments, the Commission will issue a second
Public Notice announcing the names of all applicants that have been
determined to be qualified to bid. An applicant who fails to submit a
sufficient upfront payment to qualify it to bid on any license being
auctioned will not be identified on this Public Notice as a qualified
bidder. Each applicant listed on this Public Notice will be issued a
bidder identification number and further information and instructions
regarding auction procedures.
89. On the date set for submission of corrected applications,
applicants that on their own have discovered minor errors in their
applications (e.g., typographical errors, incorrect license
designations, etc.) will be permitted to file corrected applications.
The Commission also will waive the ex parte rules as they apply to the
submission of amended short-form applications for the 800 MHz SMR
auctions, to maximize applicants' opportunities to seek Commission
staff advice on making such amendments. Applicants will not be
permitted to make any major modifications to their applications,
including, but not limited to, changes in license areas and changes in
control of the applicant, or additions of other bidders into the
bidding consortia, until after the auction. Applicants also may modify
their short-form applications to reflect formation of consortia or
changes in ownership at any time before or during an auction, provided
such changes will not result in a change in de jure or de facto control
of the applicant,
[[Page 6149]]
and provided that the parties forming consortia or entering into
ownership agreements have not applied for licenses in any of the same
geographic license areas, i.e., EAs. In addition, applications that are
not signed will be dismissed as unacceptable for filing, as will
applications in which no market designations are made.
90. In addition, a single member of a bidding consortium may
withdraw from a consortium only in a particular EA(s), but otherwise
remain in the consortium for purposes of bidding on all other markets
specified on the short-form application. However, such arrangements to
assign the member's interests in particular licenses to other
consortium members after the auction must be disclosed on an original
or amended short-form application, and a request to transfer or assign
the license also must be filed in conjunction with the long-form
application.
5. Upfront Payments
91. In the Competitive Bidding Second R&O, the Commission
established a minimum upfront payment of $2,500 and stated that this
amount could be modified on a service-specific basis. In the Further
Notice, the Commission proposed to require 800 MHz SMR auction
participants to tender in advance to the Commission a substantial
upfront payment, $0.02 per activity unit for the largest combination of
activity units on which a bidder anticipates bidding in any round, as a
condition of bidding in order to ensure that only serious, qualified
bidders participate in auctions, and to ensure payment of the monetary
assessment in the event of bid withdrawal or default. The Commission
also sought comment on the upfront payment formula and minimum upfront
payment most appropriate for the 800 MHz SMR service.
92. The Commission adopts the standard $0.02 per activity unit
formula to calculate the upfront payment. The Commission also adopts a
minimum upfront payment of $2,500 for the 800 MHz SMR service. In the
initial Public Notice issued prior to the auction, the Commission will
announce population information corresponding to each license and the
upfront payment amount for each EA license. In general, population
coverage for each channel block in each EA will be based on a formula
that takes into account the presence of incumbent licensees.
93. Upfront payments will be due by a date specified by Public
Notice, but generally no later than 14 days before a scheduled auction.
Each qualified bidder will be issued a bidder identification number and
further information and instructions regarding the auction procedures.
During the auction, bidders will be required to provide their bidding
identification numbers when submitting bids.
6. Down Payments and Full Payments
94. Down Payments. In the Competitive Bidding Second R&O, the
Commission generally required successful bidders to tender a 20 percent
down payment on their bids to discourage default between the auction
and licensing, and to ensure payment of the monetary assessment if such
default occurs. In the Further Notice, the Commission proposed to
require the winning bidders for 800 MHz SMR licenses to supplement
their upfront payments with a down payment sufficient to bring their
total deposits up to 20 percent of their winning bid(s).
95. The Commission concludes that winning bidders must supplement
their upfront payments with a down payment sufficient to bring their
total deposits up to 20 percent of their winning bid(s). If the upfront
payment already tendered by a winning bidder, after deducting any bid
withdrawal and default payments due, amounts to 20 percent or more of
its winning bids, no additional deposit will be required. If the
upfront payment amount on deposit is greater than 20 percent of the
winning bid amount after deducting any bid withdrawal and default
payments due, the additional monies will be refunded. If a bidder has
withdrawn a bid or defaulted, but the amount of the payment cannot yet
be determined, the bidder will be required to make a deposit of 20
percent of the amount bid on such licenses. When it becomes possible to
calculate and assess the payment, any excess deposit will be refunded.
Upfront payments will be applied to such deposits, and to bid
withdrawal and default assessments due, before being applied toward the
bidder's down payment on licenses the bidder has won and seeks to
acquire.
96. The Commission also will require winning bidders to submit the
required down payment by cashier's check or wire transfer to its lock-
box bank by a date and time to be specified by Public Notice, generally
within five business days following the close of bidding. The
Commission will hold the down payment until the high bidder is awarded
the license and has paid the remaining balance due on such license, or
until the winning bidder is found unqualified to be a licensee or has
defaulted, in which case it will be returned, less applicable monetary
assessments. All auction winners generally will be required to make
full payment of the balance of their winning bids within five business
days following Public Notice that the Commission is prepared to award
the license. The Commission generally will grant uncontested licenses
within ten business days after receiving full payment. During the
period that deposits are held pending the ultimate award of the
license, the interest that accrues, if any, will be retained by the
U.S. Treasury.
97. Long-Form Applications. The Commission will follow these
procedures if the winning bidder makes the down payment in a timely
manner: A long-form application filed on FCC Form 600 must be filed by
a date specified by Public Notice, generally within ten business days
after the close of bidding. After the Commission receives the winning
bidder's down payment and long-form application, the Commission will
review the long-form application to determine if it is acceptable for
filing. Upon acceptance for filing of the long-form application, the
Commission will issue a Public Notice announcing this fact, triggering
the filing window for petitions to deny. If the Commission denies all
petitions to deny, and otherwise is satisfied that the applicant is
qualified, the license(s) will be granted to the auction winner.
98. Petitions to Deny and Limitations on Settlements. A party
filing a petition to deny against an 800 MHz SMR application will be
required to demonstrate standing and meet all other applicable filing
requirements. The restrictions in Section 90.162 were established to
prevent the filing of speculative applications and pleadings (or
threats of the same) designed to extract money from 800 MHz SMR
applicants. Thus, the Commission will limit the consideration that an
applicant or petitioner is permitted to receive for agreeing to
withdraw an application or petition to deny to the legitimate and
prudent expenses of the withdrawing applicant or petitioner.
99. With respect to petitions to deny, the Commission need not
conduct a hearing before denying an application if it determines that
an applicant is not qualified and no substantial and material issue of
fact exists concerning that determination. In the event the Commission
identifies substantial and material issues of fact, Section 309(i)(2)
of the Communications Act permits the submission of all or part of
evidence in written form in any hearing and allows employees other than
administrative law judges to preside over the taking of written
evidence.
[[Page 6150]]
100. Bid Withdrawal, Default, and Disqualification. In the Further
Notice, the Commission proposed to adopt bid withdrawal, default, and
disqualification rules for the 800 MHz SMR service, based on the
procedures established in its general competitive bidding rules.
101. The Commission believes that forfeiture of the entire upfront
payment is too extreme for the bidder who withdraws only one bid. Since
commenters have not stated why the 800 MHz SMR service differs in this
respect from the narrowband and broadband PCS services, there is no
justification for departing from the already tested narrowband and
broadband PCS withdrawal, default, and disqualification assessments.
Therefore, the Commission believes applying Section 1.2104(g)(1) of its
Rules to the 800 MHz SMR auction is more equitable and is consistent
with its practice in prior auctions. Section 1.2104(g)(1) provides that
any bidder that withdraws a high bid during an auction before the
Commission declares bidding closed will be required to reimburse the
Commission in the amount of the difference between its high bid and the
amount of the winning bid the next time the license is offered by the
Commission, if this subsequent winning bid is lower than the withdrawn
bid.
102. If a license is re-offered by auction, the ``winning bid''
refers to the high bid in the auction in which the license is re-
offered. If a license is re-offered in the same auction, the winning
bid refers to the high bid amount, made subsequent to the withdrawal,
in that auction. If the subsequent high bidder also withdraws its bid,
that bidder will be required to pay an assessment equal to the
difference between its withdrawn bid and the amount of the subsequent
winning bid the next time the license is offered by the Commission. If
a license which is the subject of withdrawal or default is not re-
auctioned, but instead is offered to the highest losing bidders in the
initial auction, the ``winning bid'' refers to the bid of the highest
bidder who accepts the offer. Losing bidders will not be required to
accept the offer, i.e., they may decline without penalty. The
Commission wish to encourage losing bidders in simultaneous multiple
round auctions to bid on other licenses, and therefore the Commission
will not hold them to their losing bids on a license for which a bidder
has withdrawn a bid or on which a bidder has defaulted.
103. After bidding closes, the Commission will apply Section
1.2104(g)(2) of its Rules to assess a defaulting auction winner an
additional payment of three percent of the subsequent winning bid or
three percent of the amount of the defaulting bid, whichever is less.
The additional three percent payment is designed to encourage bidders
who wish to withdraw their bids to do so before bidding ceases. The
Commission will hold deposits made by defaulting or disqualified
auction winners until full payment is made. In the unlikely event that
there is more than one bid withdrawal on the same license, the
Commission will hold each withdrawing bidder responsible for the
difference between its withdrawn bid and the amount of the winning bid
the next time the licenses are offered for auction by the Commission.
104. These payment requirements will discourage default and ensure
that bidders meet all eligibility and qualification requirements. If a
default or disqualification involves gross misconduct,
misrepresentation or bad faith by an applicant, the Commission may
declare the applicant and its principals ineligible to bid in future
auctions, and may take any other action that it deems necessary,
including institution of proceedings to revoke any existing licenses
held by the applicant.
105. If the EA license winner defaults, is otherwise disqualified
after having made the required down payment, or the license is
terminated or revoked, then the Commission will re-auction the license.
If the default occurs within five business days after the bidding has
closed, the Commission retains the discretion to offer the license to
the second highest bidder at its final bid level, or if that bidder
declines the offer, to offer the license to other bidders (in
descending order of their bid amounts) at the final bid levels. If only
a short time has passed since the initial auction, the Commission may
choose to offer the license to the highest losing bidders if the cost
of running another auction exceeds the benefits.
7. Regulatory Safeguards
106. Rules Prohibiting Collusion. The Commission's rules prevent
parties from agreeing in advance to bidding strategies that divide the
market according to their strategic interests and/or disadvantage other
bidders. Bidders will be required to (i) disclose all parties with whom
they have entered into any agreement that relates to the competitive
bidding process, and (ii) certify they have not entered into any
explicit or implicit agreements, arrangements, or understandings with
any parties, other than those identified, regarding the amount of their
bid, bidding strategies, particular properties on which they will or
will not bid or any similar agreement.
107. The Commission will subject 800 MHz SMR licensees to the
reporting requirements and rules prohibiting collusion embodied in
Sections 1.2105 and 1.2107 of the Commission's rules. Bidders will be
required by Section 1.2105(a)(2) to identify on their FCC Form 175
applications all parties with whom they have entered into any
consortium arrangements, joint ventures, partnerships or other
agreements or understandings which relate to the competitive bidding
process. If parties agree in principle on all material terms, those
parties must be identified on the short-form application, even if the
agreement has not been reduced to writing. Only at such level of
agreement can it be fairly stated that the parties have entered into a
bidding consortium or other joint bidding arrangement. If the parties
have not agreed in principle by the short-form filing deadline, an
applicant would not include the names of those parties on its
application, and may not continue negotiations with those parties.
Bidders will be required to certify that they have not entered and will
not enter into any explicit or implicit agreements, arrangements or
understandings with any parties, other than those identified, regarding
the amount of their bid, bidding strategies or the particular
properties on which they will or will not bid. In this connection, any
communications between EA bidders and incumbent licensees should take
place prior to the deadline for filing FCC Form 175 applications.
108. After the FCC Form 175 filing deadline, applicants may not
discuss the substance of their bids or bidding strategies with bidders,
other than those identified on their FCC Form 175 application, that are
bidding in the same license areas, i.e., EAs. This prohibition on
discussions extends to providing indirect information that affects bids
or bidding strategy. For example two applicants not listed on each
other's FCC Form 175 applications for the 800 MHz SMR auctions may not
discuss bids or bidding strategies with each other if they are bidding
for licenses in any of the same EAs, even if they are not bidding for
the same spectrum blocks.
109. Section 1.2105(c) of the Commission's rules, however, provides
certain exceptions to the rule prohibiting discussions with other
applicants after the filing of the short-form application. First,
applicants may make agreements to bid jointly for licenses, so long as
the applicants have not applied for licenses in any of the same license
areas. Second, an applicant
[[Page 6151]]
may modify its short-form application to reflect formation of bidding
agreements or changes in ownership at any time before or during the
auction, as long as the changes do not result in change of de jure or
de facto control of the applicant, and the parties forming the bidding
agreement have not applied for licenses in any of the same license
areas. Finally, a holder of a non-controlling attributable interest in
an applicant may acquire an ownership interest in, or enter into a
bidding agreement with other applicants in the same license area, if
(1) the owner of the attributable interest certifies that it has not
communicated and will not communicate bids or bidding strategies of
more than one of the applicants in which it holds an attributable
interest or with which it has a bidding agreement; and (2) the
arrangements do not result in any change of control of the applicant.
However, once the short-form application has been filed, a party with
an attributable interest in once bidder may not acquire a controlling
interest in another bidder bidding for licenses in any of the same
license areas.
110. Where the applicant does not meet one of these exceptions, it
may not discuss matters relating to bidding with other applicants. Even
when an applicant has withdrawn its application after the short-form
filing deadline, the applicant may not enter into a bidding agreement
with another applicant bidding on authorizations in the license areas
from which the first applicant withdrew.
111. If an applicant has the high bid for a license, Section
1.2107(d) of the Commission's rules requires the applicant to include
with its long-form application a detailed explanation of the terms and
conditions and parties involved in any bidding consortia, joint
venture, partnership or other agreement or arrangement it had entered
into relating to the competitive bidding process prior to the time
bidding was completed. Under the Commission's rules prohibiting
collusion, the term ``applicant'' includes the entity submitting the
application, owners of 5 percent or more of the entity, and all
officers and directors of such entity.
112. The Commission noted that even where the applicant discloses
parties with whom it has reached on agreement on the short-form
application, thereby permitting discussions with those parties, the
applicant nevertheless is subject to existing antitrust laws. As
discussed in the Competitive Bidding Fourth Memorandum Opinion & Order
in PP Docket No. 93-253, 59 FR 53364 (October 24, 1994) (``Competitive
Bidding MO&O''), under the antitrust laws, the parties to an agreement
may not discuss bid prices if they have applied for licenses in the
same license area. In addition, agreements between actual or potential
competitors to submit collusive, non-competitive or rigged bids are per
se violations of Section One of the Sherman Antitrust Act. Further,
actual or potential competitors may not agree to divide territories
horizontally in order to minimize competition, regardless of whether
they split a license area in which they both do business, or whether
they merely reserve one license area for one and another for the other.
113. The Commission noted that where specific instances of
collusion in the competitive bidding process are alleged during the
petition to deny process, the Commission may conduct an investigation
or refer such complaints to the United States Department of Justice for
investigation. Bidders who are found to have violated the antitrust
laws, in addition to any penalties they incur under the antitrust laws,
or who are found to have violated the Commission's rules in connection
with their participation in the auction process may be subject to a
variety of sanctions, including forfeiture of their down payment or
their full bid amount, revocation of their license(s), and may be
prohibited from participating in future auctions.
114. Transfer Disclosure Requirements. In Section 309(j)(4)(E) of
the Communications Act, Congress directed the Commission to ``require
such transfer disclosures and anti-trafficking restrictions and payment
schedules as may be necessary to prevent unjust enrichment as a result
of the methods employed to issue licenses and permits.'' In the
Competitive Bidding Second R&O, the Commission adopted safeguards
designed to ensure that the requirements of Section 309(j)(4)(E) are
satisfied. The Commission decided that it was important to monitor
transfers of licenses awarded by competitive bidding to accumulate the
necessary data to evaluate its auction designs and to judge whether
``licenses [have been] issued for bids that fall short of the true
market value of the license.'' Therefore, the Commission imposed a
transfer disclosure requirement on licenses obtained through the
competitive bidding process, whether such licenses were held by a
designated entity or not. The Commission proposed in the Further Notice
to adopt the transfer disclosure requirements of Section 1.2111(a) of
its Rules to all 800 MHz SMR licenses obtained through the competitive
bidding process.
115. The Commission believes that a three-year holding period is
unnecessary. In other auctionable services, the Commission has required
holding periods only in limited circumstances. For example, the
Commission's broadband PCS rules require those successful bidders
benefitting from special provisions for designated entities to hold
their licenses for a certain period of time and restrict the type of
transfers and assignments of such licenses during that time. The
Commission is not adopting special provisions for designated entities
on the upper 10 MHz block of 800 MHz SMR spectrum. When the Commission
has not established special provisions for designated entities in other
auctionable services, the Commission generally has required only
disclosure of certain information regarding transfers or assignments
within the first three years after initial license grant. The
Commission concludes that this is the most appropriate course of action
here. Thus, the Commission will apply Section 1.2111(a) to all 800 MHz
SMR licenses obtained through the competitive bidding process.
Generally, licensees transferring their licenses within three years
after the initial license grant will be required to file, together with
their transfer applications, the associated contracts for sale, option
agreements, management agreements, and all other documents disclosing
the total consideration received in return for the transfer of their
licenses. The Commission will give particular scrutiny to auction
winners who have not yet begun commercial service and who seek approval
for a transfer of control or assignment of their licenses within three
years after the initial license grant, so that the Commission may
determine if any unforeseen problems relating to unjust enrichment have
arisen.
116. Performance Requirements. The Communications Act requires the
Commission to ``include performance requirements, such as appropriate
deadlines and penalties for performance failures, to ensure prompt
delivery of service to rural areas, to prevent stockpiling or
warehousing of spectrum by licensees or permittees, and to promote
investment in and rapid deployment of new technologies and services.''
In the Competitive Bidding Second R&O, the Commission decided it was
unnecessary and undesirable to impose additional performance
requirements, beyond those already provided in the service rules, for
all auctionable services. In the Further Notice, the Commission did not
propose
[[Page 6152]]
to adopt any additional performance requirements for competitive
bidding purposes.
117. The service rules for the upper 10 MHz block contain specific
performance requirements, such as the requirement to construct within a
specific period of time, channel construction requirements, and interim
coverage requirements. Because the failure to meet these requirements
will result in automatic cancellation of the EA license, the Commission
believes this is a sufficient incentive to promote prompt service and
prevent spectrum warehousing. Thus, the Commission will not adopt any
performance requirements for the 800 MHz SMR service beyond those
required by Section 90.685 of the Rules.
8. Treatment of Designated Entities
118. Overview, Objectives, and the Impact of Adarand Constructors
v. Pena. The Communications Act provides that, in developing
competitive bidding procedures, the Commission shall consider various
statutory objectives and consider several alternative methods for
achieving them. Specifically, the statute provides that in establishing
eligibility criteria and bidding methodologies the Commission shall
``promot[e] economic opportunity and competition and ensur[e] that new
and innovative technologies are readily accessible to the American
people by avoiding excessive concentration of licenses and by
disseminating licenses among a wide variety of applicants, including
small businesses, rural telephone companies, and businesses owned by
members of minority groups and women.'' Small businesses, rural
telephone companies and businesses owned by minorities and/or women are
collectively referred to as ``designated entities.'' Section
309(j)(4)(A) provides that in order to promote the Communications Act's
objectives, the Commission shall ``consider alternative payment
schedules and methods of calculation, including lump sums or guaranteed
installment payments, with or without royalty payments, or other
schedules or methods * * * and combinations of such schedules and
methods.'' The Communications Act also requires the Commission to
``ensure that small businesses, rural telephone companies, and
businesses owned by members of minority groups and women are given the
opportunity to participate in the provision of spectrum-based
services.''
119. To meet the statutory objectives of providing opportunities
for designated entities, the Commission has employed a wide range of
special provisions and eligibility criteria in other spectrum-based
services. The measures adopted thus far for each service were
established after closely examining the specific characteristics of the
service and determining whether any particular barriers to accessing
capital impeded opportunities for designated entities. After examining
the record in the Competitive Bidding proceeding in PP Docket 93-253,
the Commission established provisions to enable designated entities to
overcome the barriers to accessing capital in each particular service.
Moreover, these provisions were designed to increase the likelihood
that designated entities who win licenses in the auctions become strong
competitors in the provision of wireless services.
120. Impact of Adarand Constructors, Inc. v. Pena. In the broadband
PCS docket, the Commission determined that, on separate entrepreneurs'
blocks, the bidding credits would vary according to the type of
designated entity that applied (i.e., a small business would receive a
10 percent bidding credit, a business owned by minorities or women
would receive a 15 percent bidding credit, and a small business owned
by women or minorities would receive an aggregated bidding credit of 25
percent), and all entrepreneurs' block licensees would be eligible for
varying degrees of installment payments. The Commission adopted special
provisions for businesses owned by members of minority groups or women
and analyzed their constitutionality using the ``intermediate
scrutiny'' standard of review articulated in Metro Broadcasting v. FCC,
because, as in Metro Broadcasting, the proposed provisions involved
Congressionally-mandated benign race- and gender-conscious measures.
121. After the release of the Further Notice, the Supreme Court
decided Adarand Constructors, Inc. v. Pena, which overruled Metro
Broadcasting ``to the extent that Metro Broadcasting is inconsistent
with'' the holding in Adarand that ``all racial classifications . . .
must be analyzed by a reviewing court under strict scrutiny.'' As a
result of the Adarand decision, the constitutionality of any federal
program that makes distinctions on the basis of race must serve a
compelling governmental interest and must be narrowly tailored to serve
that interest. In this connection, the Bureau issued a Public Notice
requesting further comment on the effect of the decision in Adarand on
the proposals made in the Further Notice in order to supplement the
record in the 800 MHz SMR proceeding.
122. Special Provisions for Designated Entities. In instructing the
Commission to ensure the opportunity for designated entities to
participate in auctions and provision of spectrum-based services,
Congress was well aware of the problems that designated entities would
have in competing against large, well-capitalized companies in auctions
and the difficulties these bidders encounter in accessing capital. For
example, the legislative history accompanying Congress's grant of
auction authority states generally that the Commission's regulations
``must promote economic opportunity and competition,'' and ``[t]he
Commission will realize these goals by avoiding excessive concentration
of licenses and by disseminating licenses among a wide variety of
applicants, including small businesses and businesses owned by members
of minority groups and women.'' The House Report states that the House
Committee was concerned that, ``unless the Commission is sensitive to
the need to maintain opportunities for small businesses, competitive
bidding could result in a significant increase in concentration in the
telecommunications industries.'' More specifically, the House Committee
was concerned that adoption of competitive bidding should not have the
effect of ``excluding'' small businesses from the Commission's
licensing procedures, and anticipated that the Commission would adopt
regulations to ensure that small businesses would ``continue to have
opportunities to become licensees.''
123. Consistent with Congress's concern that auctions not operate
to exclude small businesses, the provisions relating to installment
payments clearly were intended to assist small businesses. The House
Report states that these related provisions were drafted to ``ensure
that all small businesses will be covered by the Commission's
regulations, including those owned by members of minority groups and
women.'' It also states that the provisions in Section 309(j)(4)(A)
relating to installment payments were intended to promote economic
opportunity by ensuring that competitive bidding does not inadvertently
favor incumbents with deep pockets ``over new companies or start-ups.''
124. In addition, with regard to access to capital, Congress
previously made specific findings in the Small Business Credit and
Business Opportunity Enhancement Act of 1992, that ``small business
concerns, which represent higher degrees of risk in financial markets
than do large businesses, are
[[Page 6153]]
experiencing increased difficulties in obtaining credit.'' As a result
of these difficulties, Congress resolved to consider carefully
legislation and regulations ``to ensure that small business concerns
are not negatively impacted'' and to give priority to passage of
``legislation and regulations that enhance the viability of small
business concerns.''
125. In the 800 MHz SMR service, as in other auctionable services,
the Commission is committed to meeting the statutory objectives of
promoting economic opportunity and competition, of avoiding excessive
concentration of licenses, and of ensuring access to new and innovative
technologies by disseminating licenses among a wide variety of
applicants, including small businesses, rural telephone companies, and
businesses owned by members of minority groups and women. Accordingly,
in balancing the objectives set forth in the Communications Act, the
Further Notice proposed bidding credits and a tax certificate program
for businesses owned by women and minorities and installment payments
for small businesses on all 800 MHz SMR channel blocks in each MTA.
126. The Commission concludes that special provisions for small
businesses are appropriate for the 800 MHz SMR service because build-
out of an EA license may require a significant amount of capital.
Although the Commission believes that the 800 MHz SMR service is less
capital intensive than PCS, the Commission also believes that it is
more capital-intensive than the 900 MHz SMR service. The Commission
further believes that small entities may be disadvantaged in their
efforts of acquiring 800 MHz SMR licenses if required to bid against
existing large companies. For instance, if one or more of these big
firms targets a market for strategic reasons, there is almost no
likelihood that it could be outbid by a small business. The Commission
will address this potential outcome in two ways. First, for the upper
10 MHz block, the Commission will adopt the same ``tiered'' installment
payments approach adopted in the 900 MHz SMR service. Specifically,
licensees who qualify for installment payments will be entitled to pay
their winning bid amount in quarterly installments over the term of the
license, with interest charges to be fixed at the time of licensing at
a rate equal to the rate for ten-year U.S. Treasury obligations plus
2.5 percent. Small businesses with gross revenues less than $15 million
will be required to pay interest only for the first two years of the
license term at the same interest rate as set forth above. Interest
will accrue at the Treasury note rate plus 2.5 percent. Small
businesses with gross revenues less that $3 million will be able to
make interest-only payments for five years. Interest will accrue at the
Treasury note rate without the additional 2.5 percent. Timely payment
of all quarterly installments will be a condition of the license grant,
and failure to make such timely payment will be grounds for revocation
of the license. As the Commission have noted previously, allowing
installment payments reduces the amount of private financing needed by
prospective small business licensees and therefore mitigates the effect
of limited access to capital by small businesses. In determining
eligibility for these installment payment plans, the Commission will
not attribute gross revenues of investors that hold less than a 20
percent interest in the applicant, but the Commission will include the
gross revenues of the applicant's affiliates and investors with
ownership interests of 20 percent or more in the applicant. As has been
the case in prior auctions where special provisions for small
businesses have been made, it also is the Commission's expectation that
a qualifying small business or principals of a qualifying small
business will retain de facto and de jure control of the applicant. In
determining attribution when 800 MHz SMR licensees are held indirectly
through intervening corporate entities, the Commission will use the
same multiplier employed for the 900 MHz SMR service.
127. Second, the Commission has proposed additional special
provisions for small businesses seeking licenses for the lower 80 and
General Category channels in the Second Further Notice of Proposed Rule
Making in PR Docket No. 93-144, because the Commission believes that
most, if not all, of the incumbent licensees relocated will qualify as
small businesses under its proposed definition, and the lower 80 and
General Category channels will be the spectrum to which they most
likely will be relocated. This approach is consistent with the
Commission's approach in the broadband PCS context in which the
Commission designated certain frequency blocks as ``entrepreneurs'
blocks'' and restricted eligibility based on size limitations. The
Commission also believes that the service areas and spectrum blocks for
the upper 10 MHz block the Commission adopted in the First R&O will
permit operators of smaller SMR systems to participate in the upper 10
MHz block auction.
128. At this time the Commission concludes that there is an
insufficient record to support the adoption of special provisions
solely benefitting minority- and women-owned businesses (regardless of
size) for the upper 10 MHz block auction. The Commission notes,
however, that in the Second Further Notice of Proposed Rule Making, the
Commission is seeking comment on this issue with respect to the lower
80 and General Category channels. Moreover, the Commission believes
that most minority- and women-owned businesses will be able to take
advantage of the installment plan described above. The Commission
expects that the vast majority of minority- and women-owned businesses
will be able to qualify as small businesses under any definition the
Commission adopts.
129. Partitioning. In the Further Notice, the Commission did not
propose any special provisions for rural telephone companies, on the
basis that: (1) they, like other wireline carriers, then were
ineligible to hold SMR licenses; (2) even if wireline entry into SMR
was permitted, the Commission questioned whether special bidding
provisions would be necessary to ensure the participation of rural
telephone companies in the provision of SMR service given the
relatively modest build-out costs involved to serve rural areas; and
(3) in view of the fact that rural telephone companies may use their
existing infrastructure to support integrated 800 MHz SMR service in
their rural service areas, the Commission anticipated that they would
have ample opportunity to participate in 800 MHz SMR.
130. Since adoption of the Further Notice, rural telephone
companies have gained eligibility to hold SMR licenses. Thus, the
Commission concludes that rural telephone companies will be permitted
to acquire partitioned EA licenses in either of two ways: (1) They may
form bidding consortia to participate in auctions, and then partition
the licenses won among consortia participants; and (2) they may acquire
partitioned 800 MHz SMR licenses from other licensees through private
negotiation and agreement either before or after the auction. Each
member of a consortium will be required to file a long-form
application, following the auction, for its respective mutually agreed-
upon geographic area. Partitioned areas must conform to established
geo-political boundaries (such as county lines), and each area must
include all portions of the wireline service area of the rural
telephone company applicant that lie within the EA service area. The
Commission also will use the definition for rural telephone companies
used in its
[[Page 6154]]
broadband PCS and 900 MHz SMR rules. Thus, rural telephone companies
will be defined as ``local exchange carriers having 100,000 or fewer
access lines, including all affiliates.'' In the Second Further Notice
of Proposed Rule Making, the Commission seeks comment on its proposal
to extend the partitioning option to SMR licensees generally.
131. Set-Aside Spectrum. In the Further Notice, the Commission
expressed its concern, based on its experience with PCS, that
designated entities may have difficulties competing for 800 MHz SMR
licenses against large firms with significant financial resources. The
Commission tentatively concluded, however, that it would not be
feasible to designate a wide-area spectrum block as an entrepreneurs'
block because the large number of incumbents already licensed
throughout the spectrum designated for wide-area licensing make it
virtually impossible to identify a suitable block.
132. The Commission does not adopt an entrepreneurs' block in the
upper 10 MHz block of 800 MHz SMR spectrum. The Commission concluded
that an entrepreneur's block in this portion of 800 MHz SMR spectrum is
not feasible, given the substantial number of licensees already
licensed on such spectrum. However, the Commission is interested in
ensuring that small businesses have a meaningful opportunity to
continue to participate in the provision of 800 MHz SMR service. Thus,
in the Second Further Notice of Proposed Rule Making the Commission
seeks additional comment on whether designation of an entrepreneurs'
block for other 800 MHz spectrum would be feasible.
IV. Procedural Matters and Ordering Clauses
A. Final Regulatory Flexibility Analysis
133. With respect to this First Report and Order and Eighth Report
and Order, pursuant to the Regulatory Flexibility Act of 1980, an
Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the
Further Notice of Proposed Rule Making in PR Docket No. 93-144. Written
comments on the IRFA were requested. The Commission's final analysis is
as follows:
Need for and purpose of the action. The rule making proceeding has
implemented Sections 332 and 3(n), respectively, of the Communications
Act of 1934, as amended. The rules adopted herein will carry out
Congress's intent to establish a consistent framework for all
commercial mobile radio services (CMRS).
Issues raised in response to the IRFA. No comments were submitted
in response to the IRFA.
Significant alternatives considered and rejected. All significant
alternatives have been addressed in the First Report and Order in PR
Docket No. 93-144, the Third Report and Order in GN Docket No. 93-252,
and the Eighth Report and Order in PP Docket No. 93-253.
B. Paperwork Reduction Act
SUMMARY: The Federal Communications Commission, as part of its
continuing effort to reduce paperwork burden, invites the general
public and other Federal agencies to take this opportunity to comment
on the following proposed and/or continuing information collections, as
required by the Paperwork Reduction Act of 1995, Public Law 104-13.
Comments are requested concerning (a) whether the proposed collection
of information is necessary for the proper performance of the functions
of the Commission, including whether the information shall have
practical utility; (b) the accuracy of the Commission's burden
estimates; (c) ways to enhance the quality, utility, and clarity of the
information collected; and (d) ways to minimize the burden of the
collection of information on the respondents, including the use of
automated collection techniques or other forms of information
technology.
DATES: Written comments should be submitted on or before April 16,
1996. If you anticipate that you will be submitting comments but find
it difficult to do so within the period of time allowed by this notice,
you should advise the contact listed below as soon as possible.
ADDRESSES: Direct all comments to Dorothy Conway, Federal
Communications Commission, Room 234, 1919 M St., NW., Washington, DC
20554, or via Internet to [email protected]; and Timothy Fain, OMB Desk
Officer, 10236 NEOB, 725 17th St., NW., Washington, DC 20503, or via
Internet to [email protected].
FOR FURTHER INFORMATION CONTACT: Dorothy Conway, (202) 418-0217, or via
Internet at [email protected].
SUPPLEMENTARY INFORMATION:
Title: Amendment to the Commission's Rules to Facilitate Future
Development of SMR Systems in the 800 MHz Frequency Band.
Type of Review: Revised collection.
Respondents: Individuals or households; Business or other for-
profit; Not-for-profit institutions; State, Local or Tribal Government.
Number of Respondents: 9,570.
Estimated Time Per Response: Approximately 2 hours.
Total Annual Burden: Approximately 17,254 hours.
Total Annual Cost: $6,468,260 this includes the costs for filing
the information electronically or mailing submissions and hiring
consultants that may be necessary to respond the requests.
Needs and Uses: The information will be used by the Commission for
the following purposes: (a) To determine if the grant or retention of
an extended implementation schedule is warranted; (b) to update the
Commission's licensing database and thereby facilitate the successful
coexistence of EA licensees and incumbents in the upper 10 MHz block of
800 MHz SMR spectrum; (c) to ensure that incumbents are timely notified
of possible relocation thus allowing relocation to occur in an orderly,
efficient, and expedient manner; and (d) to determine whether an
applicant is eligible for special provisions for small businesses
provided for applicants in the 800 MHz SMR service.
C. Ex Parte Rules--Non-Restricted Proceeding
This is a non-restricted notice and comment rulemaking proceeding.
Ex parte presentations are permitted except during the Sunshine Agenda
period, provided they are disclosed as provided in the Commission's
rules, 47 CFR Secs. 1.1202, 1.1203, 1.1206(a).
D. Authority
The legal authority for this proposed information collection
includes 47 U.S.C. Sections 154(i), 303(c), 303(f), 303(g), 303(r),
309(j) and 332 47 U.S.C. Secs. 154(i), 303(c), 303(f), 303(g), 303(r),
309(j), 332, as amended. The information collection would not affect
any FCC forms. The proposed collection would increase minimally the
burden on 800 MHz SMR service applicants.
E. Ordering Clauses
It is ordered that the rule changes made herein will become
effective March 18, 1996. This action is taken pursuant to Sections
4(i), 303(r), and 309(j) of the Communications Act of 1934, as amended,
47 U.S.C. Secs. 154(i), 303(r), and 309(j).
It is further ordered that all requests for extended implementation
authority for the 800 MHz SMR service filed pursuant to Section 90.629
of the Commission's rules and currently pending before the Commission
are denied.
It is further ordered that the Secretary shall send a copy of this
First Report
[[Page 6155]]
and Order and Eighth Report and Order to the Chief Counsel for Advocacy
of the Small Business Administration.
List of Subjects in 47 CFR Part 90
Common carriers, Radio, Reporting and recordkeeping requirements.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
Rule Changes
Part 90 of Chapter I of Title 47 of the Code of Federal Regulations
is amended as follows:
PART 90--PRIVATE LAND MOBILE RADIO SERVICES
The authority citation for Part 90 is revised to read as follows:
Authority: 47 U.S.C. Secs. 154, 303, and 332, unless otherwise
noted.
Section 90.7 is amended by adding the definitions for ``EA-based or
EA license'' and ``Economic Areas (EAs)'' in alphabetical order to read
as follows:
Sec. 90.7 Definitions.
* * * * *
EA-based or EA license. A license authorizing the right to use a
specified block of SMR spectrum within one of the 175 Economic Areas
(EAs) as defined by the Department of Commerce Bureau of Economic
Analysis. The EA Listings and the EA Map are available for public
inspection at the Wireless Telecommunications Bureau's public reference
room, Room 5608, 2025 M St. NW, Washington, DC 20554 and Office of
Operations--Gettysburg, 1270 Fairfield Road, Gettysburg, PA 17325.
Economic Areas (EAs). A total of 175 licensing regions based on the
United States Department of Commerce Bureau of Economic Analysis
Economic Areas available from the Bureau of Economic Analysis at (202-
606-3700) defined as of February 1995, with the following exceptions:
(1) Guam and Northern Mariana Islands are licensed as a single EA-
like area
(2) Puerto Rico and the U.S. Virgin Islands are licensed as a
single EA-like area
(3) American Samoa is licensed as a single EA-like area
* * * * *
3. Section 90.155 is amended by revising paragraph (a) to read as
follows:
Sec. 90.155 Time in which station must be placed in operation.
(a) All stations authorized under this part, except as provided in
paragraphs (b) and (d) of this section and in Secs. 90.629, 90.631(f),
90.665, and 90.685, must be placed in operation within eight (8) months
from the date of grant or the authorization cancels automatically and
must be returned to the Commission.
* * * * *
4. Section 90.173 is amended by revising paragraph (k) and adding a
new paragraph (n) to read as follows:
Sec. 90.173 Policies governing the assignment of frequencies.
* * * * *
(k) Notwithstanding any other provisions of this part, any eligible
person may seek a dispositive preference for a channel assignment on an
exclusive basis in the 220-222 MHz, 470-512 MHz, and 800/900 MHz
(except on frequencies designated exclusively for SMR service) bands by
submitting information that leads to the recovery of channels in these
bands. Recovery of such channels must result from information provided
regarding the failure of existing licensees to comply with the
provisions of Secs. 90.155, 90.157, 90.629, 90.631 (e) or (f), or
90.633 (c) or (d). Any recovered channels in the 900 MHz SMR service
will revert automatically to the MTA licensee.
* * * * *
(n) Any recovered channels in the 800 MHz SMR service will revert
automatically to the holder of the EA license within which such
channels are included. If there is no EA licensee for recovered
channels, such channels will be retained by the Commission for future
licensing.
Section 90.210 is amended by adding a new footnote 3 to the entry
for ``806-821/851-866'' in the introductory paragraph table to read as
follows:
Sec. 90.210 Emission masks.
* * * * *
Applicable Emission Masks
------------------------------------------------------------------------
------------------------------------------------------------------------
Frequency Band MHz.............. Mask for equipment Mask for equipment
with audio low without audio low
path filter. path filter.
* * * * *
806-821/851-866 \3\............. B................. G.
* * * * *
------------------------------------------------------------------------
\3\ Equipment used in this band licensed to EA systems shall comply with
the emission mask provisions of Sec. 90.691.
* * * * *
6. Section 90.609 is amended by revising paragraphs (c) and (d)
introductory text to read as follows:
Sec. 90.609 Special limitations on amendment of applications for
assignment or transfer of authorizations for radio systems above 800
MHz.
* * * * *
(c) Licensees of constructed systems in any category other than
Spectrum Block D frequencies in the 800 MHz SMR service (formerly
General Category) are permitted to make partial assignments of an
authorized grant to an applicant proposing to create a new system or to
an existing licensee that has loaded its system to 70 mobiles per
channel and is expanding that system. An applicant authorized to expand
an existing system or to create a new system with frequencies from any
category other than Spectrum Block D frequencies in the 800 MHz SMR
service obtained through partial assignment will receive the assignor's
existing license expiration date and loading deadline for the
frequencies that are assigned. A licensee that makes a partial
assignment of a station's frequencies will not be authorized to obtain
additional frequencies for that station for a period of one year from
the date of the partial assignment.
(d) A constructed system originally licensed in the General
Category that is authorized to operate in the conventional mode may be
combined with an existing SMR system above 800 MHz authorized to
operate in the trunked mode by assignment of an authorized grant of the
General Category station to the SMR station.
* * * * *
7. Section 90.611 is amended by revising paragraphs (a) and (c) and
by removing and reserving paragraph (d) to read as follows:
Sec. 90.611 Processing of applications.
* * * * *
(a) All applications will first be considered to determine whether
they are substantially complete and acceptable for filing. If so,
except as otherwise specifically provided for in this subpart, they
will be assigned a file number and put in pending status. If not, they
will be returned to the applicant.
* * * * *
(c) Each application will be reviewed to determine whether it can
be granted. Applicants must specify the intended frequency (or
frequencies) of operation.
* * * * *
8. Section 90.615 is revised to read as follows:
[[Page 6156]]
Sec. 90.615 Frequencies available in Spectrum Block D in the 800 MHz
SMR service (formerly General Category).
(a) Except as indicated in Sec. 90.619, as of March 18, 1996,
frequencies in the 800 MHz Spectrum Block D (Channels 1-150) previously
designated as General Category channels are re-allocated for use
exclusively by the SMR service for either trunked or conventional
operations. The frequencies are available to SMR licensees in areas
farther than 110 km (68.4 miles) from the U.S./Mexico border and
farther than 140 km (87 miles) from the U.S./Canada border.
(b) Non-SMR stations that were authorized to transmit on these
frequencies prior to March 18, 1996 and have remained so authorized
continuously since that time may continue to operate in accordance with
their current authorizations. Such authorizations may be renewed
unchanged or with minor modifications as described in Sec. 90.693.
9. Section 90.617 is amended by revising introductory paragraphs
(b) and (c) (the Tables remain unchanged), paragraph (d) and Table 4A
of paragraph (d) to read as follows:
Sec. 90.617 Frequencies in the 809.750-824/854.750-869 MHz, and 896-
901/935-940 MHz bands available for trunked or conventional system use
in non-border areas.
* * * * *
(b) The channels listed in Table 2A are available to eligible
applicants in the Industrial/Land Transportation Category (consisting
of the Power, Petroleum, Forest Products, Film and Video Production,
Relay Press, Special Industrial, Manufacturers, Telephone Maintenance,
Motor Carrier, Railroad, Taxicab and Automobile Emergency Radio
Services). These frequencies are available in areas farther than 110 km
(68.4 miles) from the U.S./Mexico border and farther than 140 km (87.0
miles) from the U.S./Canada border. Specialized Mobile Radio (SMR)
systems will not be authorized on these frequencies. These channels are
available for inter-category sharing as indicated in Sec. 90.621(g).
* * * * *
(c) The channels listed in Table 3A are available to eligible
applicants in the Business Radio Category. This category does not
include Specialized Mobile Radio Systems as defined in Sec. 90.7. These
frequencies are available in areas farther than 110 km (68.4 miles)
from the U.S./Mexico border and farther than 140 km (87.0 miles) from
the U.S./Canada border. Specialized Mobile Radio Systems will not be
authorized on these frequencies. These channels are available for
inter-category sharing as indicated in Sec. 90.621(g).
* * * * *
(d) The channels listed in Tables 4A and 4B are available only to
eligibles in the SMR category which consists of Specialized Mobile
Radio (SMR) stations and eligible end users. The frequencies listed in
Table 4A are available to SMR eligibles desiring to be authorized for
EA-based service areas in accordance with Sec. 90.681. SMR licensees
licensed on Channels 401-600 on or before March 18, 1996 may continue
to utilize these frequencies within their existing service areas,
subject to the mandatory relocation provisions of Sec. 90.699. Systems
licensed on the channels listed in Table 4A as Spectrum Block D or E
Channels will be licensed on a site-specific basis. This paragraph
deals with the assignment of frequencies only in areas farther than 110
km (68.4 miles) from the U.S./Mexico border and farther than 140 km
(87) miles from the U.S./Canada border. See Sec. 90.619 for the
assignment of SMR frequencies in these border areas. For stations
located within 113 km (70 miles) of Chicago, channels 401-600 will be
assigned in blocks as outlined in Table 4C.
Table 4A.--SMR Category 806-821/851-866 MHz Band Channels
------------------------------------------------------------------------
Spectrum block Channel No.
------------------------------------------------------------------------
EA-Based SMR Category Systems (200
channels):
A..................................... 401-420.
B..................................... 421-480.
C..................................... 481-600.
SMR Category (230 channels):
D..................................... 1-150.
E..................................... 201-208, 221-228, 241-248,
261-268, 281-288, 301-308,
321-328, 341-348, 361-368,
381-388.
------------------------------------------------------------------------
* * * * *
10. Section 90.619 is amended by revising introductory paragraph
(a)(3), the introductory text of paragraph (a)(5) and Table 4A of
paragraph (a)(5), Table 12 in paragraph (b)(8), Table 16 in paragraph
(b)(9), Table 20 in paragraph (b)(10), and Table 24 in paragraph
(b)(11) to read as follows:
Sec. 90.619 Frequencies available for use in the U.S./Mexico and U.S./
Canada border areas.
(a) * * *
(3) Tables 2A and 2B list the channels that are available for
assignment to eligible applicants in the Industrial/Land Transportation
Category (consisting of the Power, Petroleum, Forest Products, Video
Production, Relay Press, Special Industrial, Manufacturers, Telephone
Maintenance, Motor Carrier, Railroad, Taxicab and Automobile Emergency
Radio Services). New applications for Specialized Mobile Radio systems
will not be accepted for these channels after March 18, 1996.
* * * * *
(5) Tables 4A and 4B list the channels that are available for
assignment for the SMR Category (consisting of Specialized Mobile Radio
systems as defined in Sec. 90.7). These channels are not available for
inter-category sharing.
Table 4A.--United States-Mexico Border Area, SMR Category 806-821/851-
866 MHZ Band (95 Channels)
------------------------------------------------------------------------
Spectrum block Offset channel No.
------------------------------------------------------------------------
EA-Based SMR Category (30 Channels):
A.................................... None.
B.................................... 429, 431, 433, 435, 437,439,
469, 471, 473, 475, 477, 479.
C.................................... 509, 511, 513, 515, 517, 519,
549, 551, 553, 555, 557, 559,
589, 591, 593, 595, 597, 599.
SMR Category (65 Channels):
D.................................... None.
E.................................... None.
Other................................ 228-240, 268-280, 308-320, 348-
360, 388-400.
------------------------------------------------------------------------
* * * * *
(b) * * *
(8) * * *
Table 12.--SMR Category--95 Channels
[Regions 1, 4, 5, 6]
------------------------------------------------------------------------
Spectrum block Channel No.
------------------------------------------------------------------------
EA-Based SMR Category (90 Channels):
A.................................... None.
B.................................... 463-480.
C.................................... 493-510, 523-540, 553-570, 583-
600.
SMR Category (5 Channels):
[[Page 6157]]
D.................................... 30, 60, 90, 120, 150.
E.................................... None.
------------------------------------------------------------------------
(9) * * *
Table 16.--SMR Category--60 Channels
[Region 2]
------------------------------------------------------------------------
Spectrum block Channel No.
------------------------------------------------------------------------
EA-Based SMR Category (55 Channels):
A.................................... None.
B.................................... None.
C.................................... 518-528, 536-546, 554-564, 572-
582, 590-600.
SMR Category (5 Channels):
D.................................... 18, 36, 54, 72, 90.
E.................................... None.
------------------------------------------------------------------------
(10) * * *
Table 20.--SMR Category--135 Channels
[Region 3]
------------------------------------------------------------------------
Spectrum block Channel No.
------------------------------------------------------------------------
EA-Based SMR Category (120 Channels):
A.................................... 417-420.
B.................................... 421-440, 457-480.
C.................................... 497-520, 537-560, 577-600.
SMR Category (15 Channels):
D.................................... 38, 39, 40, 78, 79, 80, 118,
119, 120.
E.................................... None.
Other................................ 158, 159, 160, 198, 199, 200.
------------------------------------------------------------------------
(11) * * *
Table 24.--(Regions 7, 8) SMR Category--190 Channels
------------------------------------------------------------------------
Spectrum block Channel No.
------------------------------------------------------------------------
EA-Based SMR Category (80 Channels):
A.................................... None.
B.................................... 425-440, 465-480.
C.................................... 505-520, 545-560, 585-600.
SMR Category (110 Channels):
D.................................... 35-40, 75-80, 115-120.
E.................................... 225-228, 265-268, 305-308, 345-
348, 385-388.
Other................................ 155-160, 195-200, 229-240, 269-
280, 309-320, 349-360, 389-
400.
------------------------------------------------------------------------
* * * * *
11. Section 90.621 is amended by revising paragraphs (a)
introductory text, (a)(1)(iii), (b) introductory text, (c), and (e)
introductory text, removing paragraph (a)(1)(iv), and removing and
reserving paragraphs (e)(2), (e)(3), and (e)(4) to read as follows:
Sec. 90.621 Selection and assignment of frequencies.
(a) Applicants for frequencies in the Public Safety, Industrial/
Land Transportation, and Business Categories must specify on the
application the frequencies on which the proposed system will operate
pursuant to a recommendation by the applicable frequency coordinator.
Applicants for frequencies in the SMR Category must request specific
frequencies by including in their applications the frequencies
requested.
(1) * * *
(iii) There are no limitations on the number of frequencies that
may be trunked. Authorizations for non-SMR stations may be granted for
up to 20 trunked frequency pairs at a time in accordance with the
frequencies listed in Secs. 90.615, 90.617, and 90.619.
* * * * *
(b) Stations authorized on frequencies listed in this subpart,
except for those stations authorized pursuant to paragraph (g) of this
section and EA-based and MTA-based SMR systems, will be afforded
protection solely on the basis of fixed distance separation criteria.
The separation between co-channel systems will be a minimum of 113 km
(70 mi) with the following exceptions:
* * * * *
(c) Conventional systems authorized on frequencies in the Public
Safety (except for those systems that have participated in a formal
regional planning process as described in Sec. 90.16), Industrial/Land
Transportation, Business, and Spectrum Block D frequencies in the 800
MHz SMR service (formerly General) Categories which have not met the
loading levels necessary for channel exclusivity will not be afforded
co-channel protection.
* * * * *
(e) Frequencies in the 806-821/851-866 MHz bands listed as
available for eligibles in the Public Safety, Industrial/Land
Transportation, and Business Categories are available for inter-
category sharing under the following conditions:
* * * * *
12. Section 90.629 is amended by adding a new paragraph (e) to read
as follows:
Sec. 90.629 Extended implementation period.
* * * * *
(e) As of March 18, 1996, Specialized Mobile Radio systems are not
eligible for extended implementation periods under this section.
Additionally, all 800 MHz SMR licensees that are operating under
extended implementation authority as of March 18, 1996 must, by May 16,
1996, demonstrate that continuing to allow them to have an extended
period of time to construct their facilities is warranted and furthers
the public interest. If a licensee's extended implementation authority
showing is approved by the Bureau, such licensee will be afforded an
extended implementation of two years or the remainder of its current
extended implementation period, whichever is shorter. Upon the
termination of this period, the authorizations for those facilities
that remain unconstructed will terminate automatically. If a licensee
with a current extended implementation period fails to submit the
showing mentioned above within the designated timeframe or submits an
insufficient or incomplete showing, such licensee will have six months
from the last day on which it could timely file such a showing or from
the disapproval of its request to construct the remaining facilities
covered under its implementation plan to construct any unconstructed
facilities for which it is authorized. The authorizations for those
facilities remaining unconstructed after this six-month period will
terminate automatically.
13. Section 90.631(b) is amended by removing the words ``General
Category'' and adding in their place ``Spectrum Block D frequencies in
the 800 MHz SMR service (formerly General Category)''.
14. Subpart S is amended by adding a new centered heading following
Section 90.671 to read as follows:
[[Page 6158]]
Policies Governing the Licensing and Use of EA-Based SMR Systems in the
816-821/861-866 Band
15. A new Sec. 90.681 is added to Subpart S to read as follows:
Sec. 90.681 EA-based SMR service areas.
EA licenses for SMR spectrum blocks in the 816-821/861-866 band
listed in Table 4A of Sec. 90.617(d) are available in 175 Economic
Areas (EAs) as defined in Sec. 90.7.
16. A new Sec. 90.683 is added to Subpart S to read as follows:
Sec. 90.683 EA-Based SMR system operations.
(a) EA-based licensees authorized in the 816-821/861-866 MHz band
pursuant to Sec. 90.681 may construct and operate base stations using
any of the base station frequencies identified in their spectrum block
anywhere within their authorized EA, provided that:
(1) The EA licensee affords protection, in accordance with
Sec. 90.621(b), to all previously authorized co-channel stations that
are not associated with another EA license;
(2) The EA licensee complies with any rules and international
agreements that restrict use of frequencies identified in their
spectrum block, including the provisions of Sec. 90.619 relating to
U.S./Canadian and U.S./Mexican border areas;
(3) The EA licensee limits the field strength of its base stations
at any location on the border of the EA service area in accordance with
Sec. 90.689;
(4) The EA licensee notifies the Commission within 30 days of the
completion of the addition, removal, relocation or modification o
FR Doc. 96-3509 The Future Development of SMR Systems in the 800 MHz Frequency Band
f any
of its facilities within the EA. Such notification must be made by
submitting an FCC Form 600 and must include the appropriate filing fee,
if any; and
(5) For any construction or alteration that would exceed the
requirements of Sec. 17.7 of this chapter, licensees must notify the
appropriate Regional Office of the Federal Aviation Administration (FAA
Form 7460-1) and file a request for antenna height clearance and
obstruction marking and lighting specifications (FCC Form 854) with the
FCC, WTB, Support Services Branch, Gettysburg, PA 17325.
(6) Any additional transmitters placed in operation must not have a
significant environmental effect as defined by Secs. 1.1301 through
1.1319 of this chapter.
(b) In the event that the authorization for a previously authorized
co-channel station within the EA licensee's spectrum block is
terminated or revoked, the EA licensee's co-channel obligations to such
station will cease upon deletion of the facility from the Commission's
official licensing records, and the EA licensee then will be able to
construct and operate without regard to that previous authorization.
17. A new Sec. 90.685 is added to Subpart S to read as follows:
Sec. 90.685 Authorization, construction and implementation of EA
licenses.
(a) EA licenses in the 816-821/861-866 MHz band will be issued for
a term not to exceed ten years. Additionally, EA licensees generally
will be afforded a renewal expectancy only for those stations put into
service after August 10, 1996.
(b) EA licensees in the 816-821/861-866 band will be permitted five
years to construct their stations. This five-year period will commence
with the issuance of the EA-based license and will apply to all of the
licensee's stations within the EA spectrum block, including any
stations that may have been subject to an earlier construction deadline
arising from a pre-existing authorization.
(c) EA licensees in the 816-821/861-866 MHz band must, within three
years, construct and place into operation a sufficient number of base
stations to provide coverage to at least one-third of the population of
its EA-based service area. Further, each EA licensee must provide
coverage to at least two-thirds of the population of the EA-based
service area within five years.
(d) Channel use requirement. In addition to the population coverage
requirements described in this section, we will require EA licensees to
construct 50 percent of the total channels included in their spectrum
block in at least one location in their respective EA-based service
area within three years of initial license grant and to retain such
channel usage for the remainder of the construction period.
(e) An EA licensee's failure to meet the population coverage
requirements of paragraphs (c) and (d) of this section, will result in
forfeiture of the entire EA license. Forfeiture of the EA license,
however, would not result in the loss of any constructed facilities
authorized to the licensee prior to the date of the commencement of the
auction for the EA licenses.
18. A new Sec. 90.687 is added to Subpart S to read as follows:
Sec. 90.687 Special provisions regarding assignments and transfers of
authorizations for incumbent SMR licensees in the 816-821/861-866 MHz
band.
An SMR licensee initially authorized on any of the channels listed
in Table 4A of Sec. 90.617 may transfer or assign its channel(s) to
another entity subject to the provisions of Secs. 90.153 and 90.609(b).
If the proposed transferee or assignee is the EA licensee for the
spectrum block to which the channel is allocated, such transfer or
assignment presumptively will be deemed to be in the public interest.
However, such presumption will be rebuttable.
19. A new Sec. 90.689 is added to Subpart S to read as follows:
Sec. 90.689 Field strength limits.
(a) For purposes of implementing Secs. 90.689 through 90.699,
predicted 40 dBuV/m contours shall be calculated using Figure 10 of
Sec. 73.699 of this chapter with a correction factor of -9 dB, and
predicted 22 dBuV/m contours shall be calculated using Figure 10a of
Sec. 73.699 of this chapter with a correction factor of -9 dB.
(b) The predicted or measured field strength at any location on the
border of the EA-based service area for EA licensees must not exceed 40
dBuV/m unless all bordering EA licensees agree to a higher field
strength. In the event that this standard conflicts with the EA
licensee's obligation to provide co-channel protection to incumbent
licensees pursuant to Sec. 90.621(b), the requirements of
Sec. 90.621(b) shall prevail.
20. A new Sec. 90.691 is added to Subpart S to read as follows:
Sec. 90.691 Emission mask requirements for EA-based systems.
(a) Out-of-band emission requirement shall apply only to the
``outer'' channels included in an EA license and to spectrum adjacent
to interior channels used by incumbent licensees. The emission limits
are as follows:
(1) For any frequency removed from the EA licensee's frequency
block by up to and including 37.5 kHz, the power of any emission shall
be attenuated below the transmitter power (P) in watts by at least 116
Log10(f/6.1) decibels or 50 + 10 Log10(P) decibels or 80
decibels, whichever is the lesser attenuation, where f is the frequency
removed from the center of the outer channel in the block in kilohertz
and where f is greater than 12.5 kHz.
(2) For any frequency removed from the EA licensee's frequency
block greater than 37.5 kHz, the power of any emission shall be
attenuated below the transmitter power (P) in watts by at least 43 +
10Log10(P) decibels or 80 decibels, whichever is the lesser
attenuation, where f is the frequency removed from the center of the
outer channel in the block in kilohertz and where f is greater than
37.5 kHz.
[[Page 6159]]
(b) When an emission outside of the authorized bandwidth causes
harmful interference, the Commission may, at its discretion, require
greater attenuation than specified in this section.
21. A new Sec. 90.693 is added to Subpart S to read as follows:
Sec. 90.693 Grandfathering provisions for incumbent licensees in
spectrum blocks A, B, and C.
(a) These provisions apply to ``incumbent licensees'', all 800 MHz
SMR licensees who obtained licenses or filed applications on or before
December 15, 1995. An incumbent licensee's service area shall be
defined by its originally-licensed 40 dBu field strength contour and
its interference contour shall be defined as its originally-licensed 22
dBu field strength contour. Incumbent licensees are permitted to add,
remove or modify transmitter sites within this existing service area
without prior notification to the Commission so long as their original
22 dBu field strength contour is not expanded and the station complies
with the Commission's short-spacing criteria in Secs. 90.621(b)(4)
through 90.621(b)(6). The incumbent licensee must, however, notify the
Commission within 30 days of the completion of any changes in technical
parameters or additional stations constructed through a minor
modification of their license. Such notification must be made by
submitting an FCC Form 600 and must include the appropriate filing fee,
if any. These minor modification applications are not subject to public
notice and petition to deny requirements or mutually exclusive
applications.
(b) Incumbent licensees operating at multiple sites may, after
grant of EA licenses has been completed, exchange multiple site
licenses for a single license, authorizing operations throughout the
contiguous and overlapping 40 dBu field strength contours of the
multiple sites. Incumbents exercising this license exchange option must
submit specific information for each of their external base sites after
the close of the 800 MHz SMR auction.
22. A new Sec. 90.699 is added to Subpart S to read as follows:
Sec. 90.699 Transition of the upper 200 channels in the 800 MHz band
to EA licensing.
In order to facilitate provision of service throughout an EA, an EA
licensee may relocate incumbent licensees in its EA by providing
``comparable facilities'' on other frequencies in the 800 MHz band.
Such relocation is subject to the following provisions:
(a) EA licensees may negotiate with incumbent licensees as defined
in Sec. 90.693 operating on frequencies in Spectrum Blocks A, B, and C
for the purpose of agreeing to terms under which the incumbents would
relocate their operations to other channels in the 800 MHz band, or
alternatively, would accept a sharing arrangement with the EA licensee
that may result in an otherwise impermissible level of interference to
the incumbent licensee's operations. EA licensees may also negotiate
agreements for relocation of the incumbents' facilities within Spectrum
Blocks A, B or C in which all interested parties agree to the
relocation of the incumbent's facilities elsewhere within these bands.
``All interested parties'' includes the incumbent licensee, the EA
licensee requesting and paying for the relocation, and any EA licensee
of the spectrum to which the incumbent's facilities are to be
relocated.
(b) The relocation mechanism consists of two phases that must be
completed before an EA licensee may proceed to request the involuntary
relocation of an incumbent licensee.
(1) Voluntary period. There is a one year voluntary period during
which an EA licensee and an incumbent may negotiate any mutually
agreeable relocation agreement. The Commission will announce the
commencement of the first phase voluntary period by Public Notice. EA
licensees must notify incumbents operating on frequencies included in
their spectrum block of their intention to relocate such incumbents
within 90 days of the release of the Public Notice that commences the
voluntary negotiation period. Failure on the part of the EA licensee to
notify the incumbent licensee during this 90 period of its intention to
relocate the incumbent will result in the forfeiture of the EA
licensee's right to request involuntary relocation of the incumbent at
any time in the future.
(2) Mandatory period. If no agreement is reached by the end of the
voluntary period, a two-year mandatory period will begin during which
both the EA licensee and the incumbent must negotiate in ``good
faith''. Failure on the part of the EA licensee to negotiate in good
faith during this mandatory period will result in the forfeiture of the
EA licensee's right to request involuntary relocation of the incumbent
at any time in the future.
(c) If no agreement is reached during either the voluntary or
mandatory negotiating periods, the EA licensee may request involuntary
relocation of the incumbent's system. In such a situation, the EA
licensee must:
(1) Guarantee payment of all costs of relocating the incumbent to a
comparable facility;
(2) Complete all activities necessary for placing the new
facilities into operation; and
(3) Build and test the new system.
(d) If an EA licensee cannot provide comparable facilities to an
incumbent licensee as defined in this section, the incumbent licensee
may continue to operate its system on a primary basis in accordance
with the provisions of this part.
23. A new Subpart V, Sections 90.901 through 90.913, is added to
read as follows:
Subpart V--Competitive Bidding Procedures for 800 MHz Specialized
Mobile Radio Service
Sec. 90.901 800 MHz SMR spectrum subject to competitive bidding.
Sec. 90.902 Competitive bidding design for 800 MHz SMR licensing.
Sec. 90.903 Competitive bidding mechanisms.
Sec. 90.904 Aggregation of EA licenses for spectrum blocks A, B,
and C.
Sec. 90.905 Withdrawal, default and disqualification payments.
Sec. 90.906 Bidding application (FCC Form 175 and 175-S Short-
form).
Sec. 90.907 Submission of upfront payments and down payments.
Sec. 90.908 Long-form applications.
Sec. 90.909 License grant, denial, default, and disqualification
for spectrum blocks A, B, and C.
Sec. 90.910 Installment payments for licenses for spectrum blocks
A, B, and C.
Sec. 90.911 Procedures for partitioned licenses in spectrum blocks
A, B, and C.
Sec. 90.912 Definitions for spectrum blocks A, B, and C.
Sec. 90.913 Eligibility for small business status for spectrum
blocks A, B, and C.
Sec. 90.901. 800 MHz SMR spectrum subject to competitive bidding.
Mutually exclusive initial applications for Spectrum Blocks A, B,
and C in the 800 MHz band are subject to competitive bidding
procedures. The general competitive bidding procedures provided in part
1, subpart Q of this chapter will apply unless otherwise indicated in
this subpart.
Sec. 90.902 Competitive bidding design for 800 MHz SMR licensing.
The Commission will employ a simultaneous multiple round auction
design when selecting from among mutually exclusive initial
applications for EA licenses for Spectrum Blocks A, B, and C in the 800
MHz band, unless otherwise specified by the Wireless Telecommunications
Bureau before the auction.
[[Page 6160]]
Sec. 90.903 Competitive bidding mechanisms.
(a) Sequencing. The Wireless Telecommunications Bureau will
establish and may vary the sequence in which 800 MHz SMR licenses for
Spectrum Blocks A, B, and C will be auctioned.
(b) Grouping. All EA licenses for Spectrum Blocks A, B, and C will
be auctioned simultaneously, unless the Wireless Telecommunications
Bureau announces, by Public Notice prior to the auction, an alternative
competitive bidding design.
(c) Minimum Bid Increments. The Wireless Telecommunications Bureau
will, by announcement before or during an auction, require minimum bid
increments in dollar or percentage terms.
(d) Stopping Rules. The Wireless Telecommunications Bureau will
establish stopping rules before or during the multiple round auctions
in order to terminate an auction within a reasonable time.
(e) Activity Rules. The Wireless Telecommunications Bureau will
establish activity rules which require a minimum amount of bidding
activity. In the event that the Commission establishes an activity rule
in connection with a simultaneous multiple round auction, each bidder
will be entitled to request and will be automatically granted a certain
number of waivers of such rule during the auction.
Sec. 90.904 Aggregation of EA licenses for spectrum blocks A, B, and
C.
The Commission will license each Spectrum Block A, B, and C in the
800 MHz band separately. Applicants may aggregate across spectrum
blocks within the limitations specified in Sec. 20.6 of this chapter.
Sec. 90.905 Withdrawal, default and disqualification payments.
(a) During the course of an auction conducted pursuant to
Sec. 90.902, the Commission will impose payments on bidders who
withdraw high bids during the course of an auction, who default on
payments due after an auction closes, or who are disqualified.
(b) Bid withdrawal prior to close of auction. A bidder who
withdraws a high bid during the course of an auction will be subject to
a payment equal to the difference between the amount bid and the amount
of the winning bid the next time the license is offered by the
Commission. No withdrawal payment would be assessed if the subsequent
winning bid exceeds the withdrawn bid. This payment amount will be
deducted from any upfront payments or down payments that the
withdrawing bidder has deposited with the Commission.
(c) Default or disqualification after close of auction. If a high
bidder defaults or is disqualified after the close of such an auction,
the defaulting bidder will be subject to the payment in paragraph (b)
of this section plus an additional monetary asssessment equal to three
(3) percent of the subsequent winning bid. If the subsequent winning
bid exceeds the defaulting bidder's bid amount, the 3 percent payment
will be calculated based on the defaulting bidder's bid amount. These
amounts will be deducted from any upfront payments or down payments
that the defaulting or disqualified bidder has deposited with the
Commission. If the default occurs within five (5) business days after
the bidding has closed, the Commission retains the discretion to offer
the license to the second highest bidder at its final bid level, or if
that bidder declines the offer, to offer the license to other bidders
(in descending order of their bid amounts) at the final bid levels.
Sec. 90.906 Bidding application (FCC Form 175 and 175-S Short-form).
All applicants to participate in competitive bidding for 800 MHz
SMR licenses in Spectrum Blocks A, B, and C must submit applications on
FCC Forms 175 and 175-S pursuant to the provisions of Sec. 1.2105 of
this chapter. The Wireless Telecommunications Bureau will issue a
Public Notice announcing the availability of these 800 MHz SMR licenses
and, in the event that mutually exclusive applications are filed, the
date of the auction for those licenses. This Public Notice also will
specify the date on or before which applicants intending to participate
in a 800 MHz SMR auction must file their applications in order to be
eligible for that auction, and it will contain information necessary
for completion of the application as well as other important
information such as the materials which must accompany the Forms, any
filing fee that must accompany the application or any upfront payment
that will need to be submitted, and the location where the application
must be filed. In addition to identifying its status as a small
business or rural telephone company, each applicant must indicate
whether it is a minority-owned entity and/or a women-owned entity, as
defined in Sec. 90.912(e).
Sec. 90.907 Submission of upfront payments and down payments.
(a) Bidders in the 800 MHz SMR auction for Spectrum Blocks A, B,
and C will be required to submit an upfront payment of $0.02 per
activity unit, in accordance with Sec. 1.2106 of this chapter.
(b) Winning bidders in a 800 MHz SMR auction for Spectrum Blocks A,
B, and C must submit a down payment to the Commission in an amount
sufficient to bring their total deposits up to 20 percent of their
winning bids within five (5) business days after the auction closes,
and the remaining balance due on the license shall be paid within five
(5) business days after Public Notice announcing that the Commission is
prepared to award the license.
Sec. 90.908 Long-form applications.
Each winning bidder will be required to submit a long-form
application on FCC Form 600 within ten (10) business days after being
notified by Public Notice that it is the winning bidder. Applications
on FCC Form 600 shall be submitted pursuant to the procedures set forth
in Sec. 90.119 of this part and any associated Public Notices. Only
auction winners (and rural telephone companies seeking partitioned
licenses pursuant to agreements with auction winners under Sec. 90.911)
will be eligible to file applications on FCC Form 600 for initial 800
MHz SMR licenses in the event of mutual exclusivity between applicants
filing FCC Form 175.
Sec. 90.909 License grant, denial, default, and disqualification for
spectrum blocks A, B, and C.
(a) Except with respect to entities eligible for installment
payments (see Sec. 90.912) each winning bidder will be required to pay
the balance of its winning bid in a lump sum payment within five (5)
business days following Public Notice that the license is ready for
grant. The Commission will grant the license within ten (10) business
days after receipt of full and timely payment of the winning bid
amount.
(b) A bidder who withdraws its bid subsequent to the close of
bidding, defaults on a payment due, or is disqualified, will be subject
to the payments specified in Sec. 90.905 or Sec. 1.2109 of this
chapter, as applicable.
(c) EA licenses pursued through competitive bidding procedures will
be granted pursuant to the requirements specified in Sec. 90.166.
Sec. 90.910 Installment payments for licenses for spectrum blocks A,
B, and C.
(a) Each licensee for Spectrum Blocks A, B, and C that qualifies as
a small business may pay the remaining 90 percent of the net auction
price for the license in quarterly installment payments pursuant to
Sec. 1.2110(e) of this chapter. Licensees who qualify for installment
payments are entitled to pay
[[Page 6161]]
their winning bid amount in installments over the term of the license,
with interest charges to be fixed at the time of licensing at a rate
equal to the rate for ten-year U.S. Treasury obligations plus 2.5
percent. Payments shall include both principal and interest amortized
over the term of the license. An EA license issued to an eligible small
business that elects installment payments will be conditioned on the
full and timely performance of the license holder's quarterly payments.
The additional following terms apply:
(1) An eligible licensee qualifying as a small business under
Sec. 90.912(b)(1)(i) may make interest-only payments for five years.
Interest will accrue at the Treasury note rate. Payments of interest
and principal shall be amortized over the remaining five years of the
license term.
(2) An eligible licensee qualifying as a small business under
Sec. 90.912(b)(1)(ii) may make interest-only payments for the first two
years of the license term. Interest will accrue at the Treasury note
rate plus an additional 2.5 percent. Payments of interest and principal
shall be amortized over the remaining eight years of the license term.
(b) Unjust enrichment. (1) If a licensee that utilizes installment
financing under this section seeks to assign or transfer control of its
license to an entity not meeting the eligibility standards for
installment payments, the licensee must make full payment of the
remaining unpaid principal and any unpaid interest accrued through the
date of assignment or transfer as a condition of approval.
(2) If a licensee that utilizes installment financing under this
section seeks to make any change in ownership structure that would
result in the licensee losing eligibility for installment payments, the
licensee shall first seek Commission approval and must make full
payment of the remaining unpaid principal and any unpaid interest
accrued through the date of such change as a condition of approval.
(3) If a licensee that utilizes installment financing under this
section seeks to assign or transfer control of a license to an entity
that does not qualify for as favorable an installment payment plan, the
installment payment plan for which the acquiring entity qualifies will
become effective immediately upon transfer.
Sec. 90.911 Procedures for partitioned licenses in spectrum blocks A,
B, and C.
(a) Notwithstanding Sec. 90.661, a rural telephone company, as
defined in Sec. 90.912, may be granted a 800 MHz SMR license that is
geographically partitioned from a separately licensed EA, so long as
the EA applicant or licensee has voluntarily agreed (in writing) to
partition a portion of the license to the rural telephone company.
(b) If partitioned licenses are being applied for in conjunction
with a license(s) to be awarded through competitive bidding
procedures--
(1) The applicable procedures for filing short-form applications
and for submitting upfront payments and down payments contained in this
part and part 1 of this chapter shall be followed by the applicant, who
must disclose as part of its short-form application all parties to
agreement(s) with or among other entities to partition the license
pursuant to this section, if won at auction (see
Sec. 1.2105(a)(2)(viii) of this chapter);
(2) Each rural telephone company that is a party to an agreement to
partition the license shall file a long-form application for its
respective, mutually agreed-upon geographic area together with the
application for the remainder of the EA filed by the auction winner.
(c) If the partitioned license is being applied for as a partial
assignment of the EA license following grant of the initial license,
request for authorization for partial assignment of a license shall be
made pursuant to Sec. 90.153.
(d) Each application for a partitioned area (long-form initial
application or partial assignment application) shall contain a
partitioning plan that must propose to establish a partitioned area to
be licensed that meets the following criteria:
(1) Conforms to established geopolitical boundaries (such as county
lines);
(2) Includes the wireline service area of the rural telephone
company applicant; and
(3) Is reasonably related to the rural telephone company's wireline
service area.
Note to paragraph (d)(3): A partitioned service area will be
presumed to be reasonably related to the rural telephone company's
wireline service area if the partitioned service area contains no
more than twice the population overlap between the rural telephone
company's wireline service area and the partitioned area.
(e) Each licensee in each partitioned area will be responsible for
meeting the construction requirements in its area set forth in
Sec. 90.685.
Sec. 90.912 Definitions for spectrum blocks A, B, and C.
(a) Scope. The definitions in this section apply to Secs. 90.910
and 90.911, unless otherwise specified in those sections.
(b) Small business: Consortium of small businesses.
(1) A small business is an entity that either:
(i) Together with its affiliates, persons or entities that hold
attributable interests in such entity, and their affiliates, has
average gross revenues that are not more than $3 million for the three
preceding years; or
(ii) Together with its affiliates, persons, or entities that hold
attributable interests in such entity, and their affiliates, has
average gross revenues that are not more than $15 million for the
preceding three years.
(2) For purposes of determining whether an entity meets the $3
million or $15 million average annual gross revenues size standard set
forth in paragraph (b)(1) of this section, the gross revenues of the
entity, its affiliates, persons, or entities holding interests in the
entity and their affiliates shall be considered on a cumulative basis
and aggregated, subject to the exceptions set forth in Sec. 90.912(h).
(3) A small business consortium is conglomerate organization formed
as a joint venture between or among mutually-independent business
firms, each of which individually satisfies the definition of a small
business in paragraphs (b)(1) and (b)(2) of this section. In a
consortium of small businesses, each individual member must establish
its eligibility as a small business, as defined in this section.
(c) Rural telephone company. A rural telephone company is a local
exchange carrier having 100,000 or fewer access lines, including all
affiliates.
(d) Gross revenues. For applications filed after December 31, 1994,
gross revenues shall be evidenced by audited financial statements for
the preceding relevant number of calendar or fiscal years. If an entity
was not in existence for all or part of the relevant period, gross
revenues shall be evidenced by the audited financial statements of the
entity's predecessor-in-interest or, if there is no identifiable
predecessor-in-interest, unaudited financial statements certified by
the applicant as accurate.
(e) Businesses owned by members of minority groups and/or women. A
business owned by members of minority groups and/or women is one in
which minorities and/or women who are U.S. citizens control the
applicant, have at least 50.1 percent equity ownership and, in the case
of a corporate applicant, a 50.1 percent voting interest. For
applicants that are partnerships, every general partner either must be
a minority and/or woman (or minorities and/or women) who are U.S.
citizens and who individually or together own at
[[Page 6162]]
least 50.1 percent of the partnership equity, or an entity that is 100
percent owned and controlled by minorities and/or women who are U.S.
citizens. The interests of minorities and women are to be calculated on
a fully-diluted basis; agreements such as stock options and convertible
debentures shall be considered to have a present effect on the power to
control an entity and shall be treated as if the rights thereunder
already have been fully exercised. However, upon a demonstration that
options or conversion rights held by non-controlling principals will
not deprive the minority and female principals of a substantial
financial stake in the venture or impair their rights to control the
designated entity, a designated entity may seek a waiver of the
requirement that the equity of the minority and female principals must
be calculated on a fully-diluted basis.
(f) Members of minority groups. Members of minority groups includes
Blacks, Hispanics, American Indians, Alaskan Natives, Asians, and
Pacific Islanders.
(g) Attributable interests. Partnership and other ownership
interests and any stock interest amounting to 20 percent or more of the
equity, or outstanding stock, or outstanding voting stock of a licensee
or applicant will be attributable.
Note to paragraph (g): Ownership interests that are held
indirectly by any party through one or more intervening corporations
will be determined by successive multiplication of the ownership
percentages for each link in the vertical ownership chain and
application of the relevant attribution benchmark to the resulting
product, except that if the ownership percentages for an interest in
any link in the chain exceeds 50 percent or represents actual
control, it shall be treated as if it were a 100 percent interest.
(h) Affiliate. (1) Basis for affiliation. An individual or entity
is an affiliate of an applicant or of a person holding an attributable
interest in an applicant (both referred to herein as ``the applicant'')
if such individual or entity:
(i) Directly or indirectly controls or has the power to control the
applicant;
(ii) Is directly or indirectly controlled by the applicant;
(iii) Is directly or indirectly controlled by a third party or
parties that also controls or has the power to control the applicant;
or
(iv) Has an ``identity of interest'' with the applicant.
(2) Nature of control in determining affiliation. (i) Every
business concern is considered to have one or more parties who directly
or indirectly control or have the power to control it. Control may be
affirmative or negative and it is immaterial whether it is exercised so
long as the power to control exists.
Example for paragraph (h)(2)(i). An applicant owning 50 percent
of the voting stock of another concern would have negative power to
control such concern since such party can block any action of the
other stockholders. Also, the bylaws of a corporation may permit a
stockholder with less than 50 percent of the voting to block any
actions taken by the other stockholders in the other entity.
Affiliation exists when the applicant has the power to control a
concern while at the same time another person, or persons, are in
control of the concern at the will of the party or parties with the
power of control.
(ii) Control can arise through stock ownership; occupancy of
director, officer or key employee positions; contractual or other
business relations; or combinations of these and other factors. A key
employee is an employee who, because of his/her position in the
concern, has a critical influence in or substantive control over the
operations or management of the concern.
(iii) Control can arise through management positions where a
concern's voting stock is so widely distributed that no effective
control can be established.
Example for paragraph (h)(2)(iii). In a corporation where the
officers and directors own various size blocks of stock totaling 40
percent of the corporation's voting stock, but no officer or
director has a block sufficient to give him or her control or the
power to control and the remaining 60 percent is widely distributed
with no individual stockholder having a stock interest greater than
10 percent, management has the power to control. If persons with
such management control of the other entity are persons with
attributable interests in the applicant, the other entity will be
deemed an affiliate of the applicant.
(3) Identity of interest between and among persons. Affiliation can
arise between or among two or more persons with an identity of
interest, such as members of the same family or persons with common
investments. In determining if the applicant controls or is controlled
by a concern, persons with an identity of interest will be treated as
though they were one person.
Example 1. Two shareholders in Corporation Y each have
attributable interests in the same SMR application. While neither
shareholder has enough shares to individually control Corporation Y,
together they have the power to control Corporation Y. The two
shareholders with these common investments (or identity of interest)
are treated as though they are one person and Corporation Y would be
deemed an affiliate of the applicant.
Example 2. One shareholder in Corporation Y, shareholder A, has
an attributable interest in a SMR application. Another shareholder
in Corporation Y, shareholder B, has a nonattributable interest in
the same SMR application. While neither shareholder has enough
shares to individually control Corporation Y, together they have the
power to control Corporation Y. Through the common investment of
shareholders A and B in the SMR application, Corporation Y would
still be deemed an affiliate of the applicant.
(i) Spousal affiliation. Both spouses are deemed to own or control
or have the power to control interests owned or controlled by either of
them, unless they are subject to a legal separation recognized by a
court of competent jurisdiction in the United States.
(ii) Kinship affiliation. Immediate family members will be presumed
to own or control or have the power to control interests owned or
controlled by other immediate family members. In this context
``immediate family member'' means father, mother, husband, wife, son,
daughter, brother, sister, father- or mother-in-law, son- or daughter-
in-law, brother- or sister-in-law, step-father, or -mother, step-
brother, or -sister, step-son, or -daughter, half brother or sister.
This presumption may be rebutted by showing that
(A) The family members are estranged,
(B) The family ties are remote, or
(C) The family members are not closely involved with each other in
business matters.
Example for paragraph (h)(3)(ii). A owns a controlling interest
in Corporation X. A's sister-in-law, B, has an attributable interest
in an SMR application. Because A and B have a presumptive kinship
affiliation, A's interest in Corporation X is attributable to B, and
thus to the applicant, unless B rebuts the presumption with the
necessary showing.
(4) Affiliation through stock ownership. (i) An applicant is
presumed to control or have the power to control a concern if he or she
owns or controls or has the power to control 50 percent or more of its
voting stock.
(ii) An applicant is presumed to control or have the power to
control a concern even though he or she owns, controls or has the power
to control less than 50 percent of the concern's voting stock, if the
block of stock he or she owns, controls or has the power to control is
large as compared with any other outstanding block of stock.
(iii) If two or more persons each owns, controls or has the power
to control less than 50 percent of the voting stock of a concern, such
minority holdings are equal or approximately equal in size, and the
aggregate of these minority holdings is large as compared with any
other stock holding, the presumption arises that each one of these
persons
[[Page 6163]]
individually controls or has the power to control the concern; however,
such presumption may be rebutted by a showing that such control or
power to control, in fact, does not exist.
(5) Affiliation arising under stock options, convertible
debentures, and agreements to merge. Stock options, convertible
debentures, and agreements to merge (including agreements in principle)
are generally considered to have a present effect on the power to
control the concern. Therefore, in making a size determination, such
options, debentures, and agreements will generally be treated as though
the rights held thereunder had been exercised. However, neither an
affiliate nor an applicant can use such options and debentures to
appear to terminate its control over another concern before it actually
does so.
Example 1 for paragraph (h)(5). If company B holds an option to
purchase a controlling interest in company A, who holds an
attributable interest in an SMR application, the situation is
treated as though company B had exercised its rights and had become
owner of a controlling interest in company A. The gross revenues of
company B must be taken into account in determining the size of the
applicant.
Example 2 for paragraph (h)(5). If a large company, BigCo, holds
70% (70 of 100 outstanding shares) of the voting stock of company A,
who holds an attributable interest in an SMR application, and gives
a third party, SmallCo, an option to purchase 50 of the 70 shares
owned by BigCo, BigCo will be deemed to be an affiliate of company,
and thus the applicant, until SmallCo actually exercises its options
to purchase such shares. In order to prevent BigCo from
circumventing the intent of the rule which requires such options to
be considered on a fully diluted basis, the option is not considered
to have present effect in this case.
Example 3 for paragraph (h)(5). If company A has entered into an
agreement to merge with company B in the future, the situation is
treated as though the merger has taken place.
(6) Affiliation under voting trusts. (i) Stock interests held in
trust shall be deemed controlled by any person who holds or shares the
power to vote such stock, to any person who has the sole power to sell
such stock, and to any person who has the right to revoke the trust at
will or to replace the trustee at will.
(ii) If a trustee has a familial, personal or extra-trust business
relationship to the grantor or the beneficiary, the stock interests
held in trust will be deemed controlled by the grantor or beneficiary,
as appropriate.
(iii) If the primary purpose of a voting trust, or similar
agreement, is to separate voting power from beneficial ownership of
voting stock for the purpose of shifting control of or the power to
control a concern in order that such concern or another concern may
meet the Commission's size standards, such voting trust shall not be
considered valid for this purpose regardless of whether it is or is not
recognized within the appropriate jurisdiction.
(7) Affiliation through common management. Affiliation generally
arises where officers, directors, or key employees serve as the
majority or otherwise as the controlling element of the board of
directors and/or the management of another entity.
(8) Affiliation through common facilities. Affiliation generally
arises where one concern shares office space and/or employees and/or
other facilities with another concern, particularly where such concerns
are in the same or related industry or field of operations, or where
such concerns were formerly affiliated, and through these sharing
arrangements one concern has control, or potential control, of the
other concern.
(9) Affiliation through contractual relationships. Affiliation
generally arises where one concern is dependent upon another concern
for contracts and business to such a degree that one concern has
control, or potential control, of the other concern.
(10) Affiliation under joint venture arrangements. (i) A joint
venture for size determination purposes is an association of concerns
and/or individuals, with interests in any degree or proportion, formed
by contract, express or implied, to engage in and carry out a single,
specific business venture for joint profit for which purpose they
combine their efforts, property, money, skill and knowledge, but not on
a continuing or permanent basis for conducting business generally. The
determination whether an entity is a joint venture is based upon the
facts of the business operation, regardless of how the business
operation may be designated by the parties involved. An agreement to
share profits/losses proportionate to each party's contribution to the
business operation is a significant factor in determining whether the
business operation is a joint venture.
(ii) The parties to a joint venture are considered to be affiliated
with each other.
Sec. 90.913 Eligibility for small business status for spectrum blocks
A, B, and C.
(a) Short-form applications: Certifications and disclosure. Each
applicant for an EA license for Spectrum Blocks A, B, or C which
qualifies as a small business or consortium of small businesses shall
append the following information as an exhibit to its short-form
application (FCC Form 175):
(1) The identity of the applicant's affiliates, persons or entities
that hold attributable interests in such entity, and their affiliates,
and, if a consortium of small businesses, the members of the joint
venture; and
(2) The applicant's gross revenues, computed in accordance with
Sec. 90.912.
(b) Long-form applications: Certifications and disclosure. In
addition to the requirements in this subpart, each applicant submitting
a long-form application for license(s) for Spectrum Blocks A, B, or C
and qualifying as a small business shall, in an exhibit to its long-
form application:
(1) Disclose separately and in the aggregate the gross revenues,
computed in accordance with Sec. 90.912, for each of the following: the
applicant, the applicant's affiliates, the applicant's attributable
investors, affiliates of its attributable investors, and, if a
consortium of small businesses, the members of the joint venture;
(2) List and summarize all agreements or other instruments (with
appropriate references to specific provisions in the text of such
agreements and instruments) that support the applicant's eligibility as
a small business under Secs. 90.910 and 90.911, including the
establishment of de facto and de jure control; such agreements and
instruments include articles of incorporation and bylaws, shareholder
agreements, voting or other trust agreements, franchise agreements, and
any other relevant agreements (including letters of intent), oral or
written; and
(3) List and summarize any investor protection agreements,
including rights of first refusal, supermajority clauses, options, veto
rights, and rights to hire and fire employees and to appoint members to
boards of directors or management committees.
(c) Records maintenance. All winning bidders qualifying as small
businesses, shall maintain at their principal place of business an
updated file of ownership, revenue and asset information, including any
document necessary to establish eligibility as a small business and/or
consortium of small businesses under Sec. 90.912. Licensees (and their
successors in interest) shall maintain such files for the term of the
license.
(d) Audits. (1) Applicants and licensees claiming eligibility as a
small business and/or consortium of small businesses under Secs. 90.910
and 90.911 shall be subject to audits by the Commission, using in-house
and
[[Page 6164]]
contract resources. Selection for audit may be random, on information,
or on the basis of other factors.
(2) Consent to such audits is part of the certification included in
the short-form application (FCC Form 175). Such consent shall include
consent to the audit of the applicant's or licensee's books, documents
and other material (including accounting procedures and practices)
regardless of form or type, sufficient to confirm that such applicant's
or licensee's representations are, and remain, accurate. Such consent
shall include inspection at all reasonable times of the facilities, or
parts thereof, engaged in providing and transacting business, or
keeping records regarding licensed 800 MHz SMR service and shall also
include consent to the interview of principals, employees, customers
and suppliers of the applicant or licensee.
(3) Definitions. The terms affiliate, attributable interests,
consortium of small businesses, gross revenues, small business used in
this section are defined in Sec. 90.912.
[FR Doc. 96-3509 Filed 2-13-96; 5:06 pm]
BILLING CODE 6712-01-P
Complete official Federal Register PDF
FR Doc. 96-3449 Property Management
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Page 6110]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3449]
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TENNESSEE VALLEY AUTHORITY
18 CFR Part 1303
Property Management
AGENCY: Tennessee Valley Authority (TVA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: Tennessee Valley Authority is issuing regulations, as required
by the ``Prohibition of Cigarette Sales to Minors in Federal Buildings
and Lands Act,'' to prohibit the vending machine sale of, or the free
distribution of, tobacco products on TVA property.
EFFECTIVE DATE: February 16, 1996.
FOR FURTHER INFORMATION CONTACT:
Vada Ables, 423-751-2251.
SUPPLEMENTARY INFORMATION: The ``Prohibition of Cigarette Sales to
Minors in Federal Buildings and Lands Act,'' section 634 of Public Law
104-52, requires Federal agencies to promulgate regulations prohibiting
the vending machine sale of, or the free distribution of, tobacco
products in or around any Federal building. The TVA Board of Directors
has delegated authority to implement this Act to TVA's Senior Manager,
Facilities Services.
The Act authorizes agencies, as appropriate, to designate areas not
subject to the Act if such areas also prohibit the presence of minors.
Tobacco product vending machines already in place on TVA property as of
November 15, 1995 (the date of the Act), may continue in operation for
one year from the date of these regulations while TVA completes review
of whether they meet this exemption standard and whether exemption is
appropriate.
Matters of Regulatory Procedures
TVA has found that good cause exists under 5 U.S.C. 553(b) and
(d)(3) for waiving, as unnecessary and contrary to the public interest,
the general notice of proposed rulemaking and the 30-day delay in
effectiveness as to these rules. Furthermore, this rulemaking is
related to TVA organization, procedure, and practice.
TVA has determined under the Regulatory Flexibility Act (5 U.S.C.
chapter 6) that these regulations will not have a significant impact on
a substantial number of small business entities, because they affect
only TVA employees, visitors, and on-premise vendors. Similarly, it is
not a significant regulatory action for purposes of Executive Order
12866.
The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply
because these regulations do not contain any information collection
requirements that require the approval of the Office of Management and
Budget.
List of Subjects in 18 CFR Part 1303
Cigars and cigarettes, Government property, Tobacco.
For the reasons set forth in the preamble, title 18, chapter XIII
of the Code of Federal Regulations is amended by adding part 1303 to
read as follows:
PART 1303--PROPERTY MANAGEMENT
Subpart A--General Information
Sec.
1303.1 Applicability.
Subpart B--Tobacco Products
1303.2 Definition.
1303.3 Prohibitions on tobacco products.
Authority: 16 U.S.C. 831-831dd.
Subpart A--General Information
Sec. 1303.1 Applicability.
This part sets out certain regulations applicable to buildings,
structures, and other property under TVA control.
Subpart B--Tobacco Products
Sec. 1303.2 Definition.
Tobacco project means cigarettes, cigars, little cigars, pipe
tobacco, smokeless tobacco, snuff, and chewing tobacco.
Sec. 1303.3 Prohibition on tobacco products.
(a) Sale of tobacco products by vending machine on TVA property is
prohibited. Tobacco product vending machines already in place on TVA
property as of November 15, 1995, may continue in operation for one
year from February 16, 1996 while TVA completes review of whether such
machines should be exempted under paragraph (c) of this section.
(b) Distribution of free samples of tobacco products on TVA
property is prohibited.
(c) TVA may, as appropriate, designate areas not subject to this
section if individuals under the age of 18 are not allowed in such
areas.
Dated: February 7, 1996.
David H. Gentry,
Senior Manager, Facilities Services.
[FR Doc. 96-3449 Filed 2-15-96; 8:45 am]
BILLING CODE 8120-01-M
Complete official Federal Register PDF
FR Doc. 96-3425 Affirmative Action Obligations of Contractors and Subcontractors for Disabled Veterans and Veterans of the Vietnam Era; Correction
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Pages 6116-6118]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3425]
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DEPARTMENT OF LABOR
Office of Federal Contract Compliance Programs
41 CFR Part 60-250
RIN 1215-AA62
Affirmative Action Obligations of Contractors and Subcontractors
for Disabled Veterans and Veterans of the Vietnam Era; Correction
AGENCY: Office of Federal Contract Compliance Programs, Labor.
ACTION: Correcting amendments.
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SUMMARY: This document contains corrections to the Office of Federal
Contract Compliance Programs (OFCCP) final regulations implementing the
affirmative action provisions of the Vietnam Era Veterans' Readjustment
Assistance Act of 1974, as amended (38 U.S.C. 4212), which were
published January 5, 1995 (60 FR 1986). Those final regulations
incorporated, among other things, statutory changes in the mandatory
job listing obligations of Federal contractors and subcontractors. The
statutory changes eliminated the $25,000 per year salary ceiling and
otherwise broadened the scope of job openings that Federal contractors
and subcontractors must list with the State employment service.
EFFECTIVE DATE: February 16, 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) and 1-800-326-2577 (TDD).
Copies of this correction document are available in the following
alternate formats at the above office: electronic file on computer
disk, large print and audio tape.
SUPPLEMENTARY INFORMATION:
Background
Prior to amendment in 1994, the affirmative action provisions of
the Vietnam Era Veterans' Readjustment Assistance Act of 1974, as
amended (38 U.S.C. 4212) (``VEVRAA'' or ``Section 4212''), required
that Federal contractors and subcontractors covered by VEVRAA must list
``all * * * suitable employment openings'' with the appropriate local
employment service office. VEVRAA required those offices, in turn, to
give priority referrals to veterans for such openings. This obligation
to list job openings with the local employment service office is often
referred to as the ``mandatory listing'' requirement. Although Section
4212 did not define the term ``all * * * suitable employment
openings,'' this term was defined in OFCCP implementing regulations at
41 CFR 60-250.4(h).
Section 702(a) of the Veterans' Benefits Improvements Act of 1994
(Pub. L. 103-446, 108 Stat. 4645, 4674 (1994)), expanded the scope of
the employment openings to be listed with the State employment service
office by dropping the word ``suitable'' from the statutory phrase
``all * * * suitable employment openings,'' broadly defining the term
``all * * * employment openings,'' and limiting the exceptions to the
mandatory listing requirement.
The statutory amendment to the mandatory listing requirement does
not list all of the exceptions to mandatory listing permitted
previously by OFCCP regulations. The amendment eliminated the salary
ceiling of $25,000 per year which was in the OFCCP regulations, and now
requires the listing of all employment openings except executive and
top management positions, positions that will be filled from within the
contractor's organization, and positions lasting three days or less.
The final regulation published on January 5, 1995, amended OFCCP's
regulation at
[[Page 6117]]
41 CFR 60-250.4, which contains the affirmative action clause for
disabled veterans and veterans of the Vietnam era. Specifically, OFCCP
intended to amend the paragraphs prescribing the employment openings to
be listed with the State employment service in order to make the VEVRAA
affirmative action clause consistent with the 1994 statutory amendment.
Need for Correction
A few inadvertent errors were made in the January 5, 1995, rule
amending the VEVRAA affirmative action clause. First, two sentences at
the end of paragraph (b) relating to contractors' reporting
obligations, which were not changed by the statutory amendment, were
inadvertently left out of the published final rule. Second, part of
paragraph (g) refers to an exemption no longer permitted under the
statutory amendment, that is, openings to be filled pursuant to a
``customary and traditional employer-union hiring arrangement,'' and
such reference should have been deleted. Third, minor errors of
punctuation were made in the authority citation for 41 CFR Part 60-250.
As described below, these errors were inadvertent, clerical mistakes
that need correction.
The two sentences at the end of paragraph (b) that were
inadvertently left out of the final rules read as follows:
The contractor further agrees to provide such reports to such
local office regarding employment openings and hires as may be
required.
State and local government agencies holding Federal contracts of
$10,000 or more shall also list all their employment openings with
the appropriate office of the State employment service, but are not
required to provide those reports set forth in paragraphs (d) and
(e).
These two sentences involve VEVRAA-related reporting
responsibilities, and it must be highlighted that the 1994 statutory
amendments did not amend the VEVRAA reporting requirements. OFCCP only
intended to make regulatory revisions on January 5, 1995, that were
nondiscretionary changes mandated by the 1994 statutory amendments.
Indeed, the final rule evoked the good cause exemption under the
Administrative Procedure Act, 5 U.S.C. 553(b)(B), for dispensing with
the issuance of a proposal and the provision of public notice and
comment procedures because it was a ``nondiscretionary, ministerial
action which merely incorporates, without change, two statutory
amendments into pre-existing regulations.'' 60 FR 1986. Making
substantive changes to the reporting requirements, including what
amounts to eliminating an exemption from certain reporting for State
and local government agencies holding covered Federal contracts, was
beyond OFCCP's statutory authority without providing the public with
notice and an opportunity to comment. The agency's intent to retain the
reporting provisions in paragraph (b) is also evidenced by the fact
that other reporting provisions were left in the affirmative action
clause in paragraph (d), which explicitly reference the provisions in
(b) that were mistakingly left out of the January 5 Federal Register
publication.
Regarding paragraph (g), as noted above, the statutory amendments
expressly limited the number of exemptions from the mandatory listing
requirement and did not provide for the exemption in paragraph (g) for
openings to be filled pursuant to a ``customary and traditional
employer-union hiring arrangement.'' In accordance with the 1994
Congressional mandate, the January 5, 1995, final rule removed the
reference to the employer-union exemption in paragraph (h)(1) and
deleted the definition of the term that had appeared in paragraph
(h)(4). The language in paragraph (g) referring to exemptions for
openings which the contractor proposes ``to fill pursuant to a
customary and traditional employer-union hiring arrangement'' is also
contrary to the 1994 statutory amendments, and the agency intended to
eliminate it. Accordingly, paragraph (g) is revised by deleting all
references to exemptions for employer-union arrangements.
In addition, this publication makes minor technical corrections
involving the punctuation of the authority citation for 41 CFR Part 60-
250.
All of the above errors were inadvertent, clerical mistakes that
are within OFCCP authority to correct.
Waiver of Proposed Rulemaking
These amendments correct inadvertent errors in the January 5, 1995,
final regulations that were a nondiscretionary, ministerial action
which merely sought to incorporate, without change, statutory
amendments into pre-existing regulations. Publication of these
technical corrections in proposed form serves no useful purpose, and
therefore is unnecessary and contrary to the public interest within the
meaning of the Administrative Procedure Act (5 U.S.C. 553(b)(B)). Thus,
good cause exists to dispense with notice of proposed rulemaking.
Effective Date
Pursuant to 5 U.S.C. 553(d) the undersigned have determined that
good cause exists for making these correcting amendments effective upon
publication. This determination is based upon the fact that these
correcting amendments are nondiscretionary, ministerial actions which
merely incorporate, without change, a statutory amendment into
preexisting regulations. Moreover, the rules that are being corrected
were made effective upon their publication on January 5, 1995.
Accordingly, it is unnecessary and contrary to the public interest to
delay the effective date of these corrections and, therefore, this
regulation will be effective upon publication.
List of Subjects in 41 CFR Part 60-250
Administrative practice and procedure, Civil Rights, Employment,
Equal employment opportunity, Government contracts, Government
procurement, Investigations, Veterans.
Signed at Washington, D.C. this 9th day of February 1996.
Bernard E. Anderson,
Assistant Secretary for Employment Standards.
Shirley J. Wilcher,
Deputy Assistant Secretary for Federal Contract Compliance.
PART 60-250--AFFIRMATIVE ACTION OBLIGATIONS OF CONTRACTORS AND
SUBCONTRACTORS FOR DISABLED VETERANS AND VETERANS OF THE VIETNAM
ERA
For the reasons set forth above, 41 CFR Part 60-250 is corrected by
making the following correcting amendments:
1. The authority citation for Part 60-250 is revised to read as
follows:
Authority: 38 U.S.C. 4211 and 4212; 29 U.S.C. 793; Executive
Order 11758 (3 CFR 1971-1975 Comp. p. 841).
2. Section 60-250.4 is corrected by adding two sentences to the end
of paragraph (b) and by revising paragraph (g) to read as follows:
Sec. 60-250.4 Affirmative action clause.
* * * * *
(b) * * * The contractor further agrees to provide such reports
to such local office regarding employment openings and hires as may
be required. State and local government agencies holding Federal
contracts of $10,000 or more shall also list all their employment
openings with the appropriate office of the State employment
service, but are not required to provide those reports set forth in
paragraphs (d) and (e).
* * * * *
(g) The provisions of paragraphs (b), (c), (d), and (e) of this
clause do not apply to
[[Page 6118]]
openings which the contractor proposes to fill from within his own
organization. This exclusion does not apply to a particular opening
once an employer decides to consider applicants outside his own
organization for that opening.
* * * * *
[FR Doc. 96-3425 Filed 2-15-96; 8:45 am]
BILLING CODE 4510-27-M
Complete official Federal Register PDF
FR Doc. 96-3414 Bureau of Consular Affairs; Visas: Documentation of Immigrants Under the Immigration and Nationality Act as Amended; Correction
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Page 6111]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3414]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF STATE
22 CFR Part 42
[Public Notice 2336]
Bureau of Consular Affairs; Visas: Documentation of Immigrants
Under the Immigration and Nationality Act as Amended; Correction
AGENCY: Bureau of Consular Affairs, Department of State.
ACTION: Correction to final rule.
-----------------------------------------------------------------------
SUMMARY: This document corrects the final rule published in the Federal
Register on January 22, 1996 [61 FR 1523] which promulgates changes to
the regulations implementing the Diversity Immigrant Program provided
for in INA 201(a)(3), 201(e), 203(c), and 204(a)(1)(G), as amended.
This document corrects the effective date of the final rule by amending
it to read January 22, 1996.
EFFECTIVE DATE: The effective date published in the Department of State
rule published at 61 FR 1523 was incorrectly printed as February 21,
1996. The correct effective date is January 22, 1996.
FOR FURTHER INFORMATION CONTACT: Cornelius D. Scully, III, Director,
Office of Legislation, Regulations, and Advisory Assistance, Bureau of
Consular Affairs, Department of State, (202) 663-1184.
SUPPLEMENTARY INFORMATION: The Department's Public Notice 2319
published at 61 FR 1523 incorrectly showed an effective date of
February 21, 1996. The effective date of this rule should be January
22, 1996. This rule amends Sec. 42.33 of 22 CFR Part 42. This rule
modified the petitioning procedure by requiring aliens petitioning for
selection to compete for visas, sign their petition and include a
photograph. This rule also proves authority for collection of a
processing fee in case it should be decided that a fee should be
charged.
Dated: February 9, 1996.
Mary A. Ryan,
Assistant Secretary for Consular Affairs.
[FR Doc. 96-3414 Filed 2-15-96; 8:45 am]
BILLING CODE 4110-06-P
Complete official Federal Register PDF
FR Doc. 96-3388 Buy America Requirements
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Pages 6300-6303]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3388]
[[Page 6299]]
_______________________________________________________________________
Part II
Department of Transportation
_______________________________________________________________________
Federal Transit Administration
_______________________________________________________________________
49 CFR Part 661
Buy America Requirements; Final Rule
Federal Register / Vol. 61, No. 33 / Friday, February 16, 1996 /
Rules and Regulations
[[Page 6300]]
DEPARTMENT OF TRANSPORTATION
Federal Transit Administration
49 CFR Part 661
[Docket No. FTA-95-471]
RIN 2132-AA42
Buy America Requirements
AGENCY: Federal Transit Administration, DOT.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule implements section 1048 of the Intermodal
Surface Transportation Efficiency Act of 1991 (ISTEA), which amends the
Federal Transit Administration's (FTA) Buy America requirements, and
makes other amendments intended to update and clarify FTA's Buy America
regulation.
EFFECTIVE DATE: February 16, 1996.
FOR FURTHER INFORMATION CONTACT: Rita Daguillard, Deputy Assistant
Chief Counsel, Federal Transit Administration, 400 Seventh Street,
S.W., Washington, D.C. 20590, (202) 366-1936.
SUPPLEMENTARY INFORMATION:
I. The Notice of Proposed Rulemaking
On September 12, 1995, FTA issued a notice of proposed rulemaking
(NPRM) seeking to implement section 1048 of the Intermodal Surface
Transportation Efficiency Act (Pubic Law 102-240) (ISTEA), which
amended its Buy America requirements. FTA requested comments on this
proposal and on other proposed amendments intended to update and
clarify its Buy America regulation, 49 CFR Part 661.
FTA received four comments: two from public transit agencies; one
from a State department of transportation; and one from an organization
representing mass transit systems, manufacturers and suppliers. All of
the commenters supported the proposed amendments, although some
suggested minor modifications, which are discussed below.
II. The ISTEA Amendments
A. Addition of ``Iron'' (Sec. 661.5(a)-(c))
In the NPRM, FTA explained that section 1048 of ISTEA amends 49
U.S.C. 5323(j) by adding ``iron'' to the products covered, and by
inserting two new subsections concerning waivers of the Buy America
requirements. By adding the word ``iron,'' Congress extended Buy
America protection to iron and iron products, in addition to steel and
manufactured products, which were previously protected. FTA proposed to
amend 49 CFR 661.5 (a) and (b) to reflect this statutory amendment. FTA
also proposed to amend 49 CFR 661.5(c) to specify that both the iron
and steel requirements apply to items made primarily from those
materials and used in construction and rail projects. The NPRM proposed
that these items include, but not be limited to, structural steel or
iron, steel or iron beams and columns, running rail, and contact rail.
The requirements would not apply to iron used as components or
subcomponents of other manufactured products or rolling stock.
Two commenters opined that the use of the qualifier ``primarily''
may lead to confusion in the absence of greater specificity. They
suggested that ``primarily'' may mean close to one hundred percent, and
stated that some additional discussion or guidance on this issue might
be appropriate. They also stated that the phrase ``primarily steel and
iron'' should read ``primarily steel or iron'' to avoid an unintended
implication that only products made primarily of both steel and iron
are covered.
FTA believes that it is not appropriate to attach a percentage to
the definition of section 661.5(c), since the percentage of steel or
iron in a particular item may vary according to an individual
producer's refinement or manufacturing processes. Generally, the
definition refers to construction or building materials made either
principally or entirely from either steel or iron. All other
manufactured products, even though they may contain some steel or iron
elements, would not be covered. Therefore, steel girders would fall
within the definition while buses with frames made partially from
steel, would not be covered. To clarify this point, FTA will modify the
proposed definition to specify that it is intended to apply to
construction materials used in infrastructure projects, such as transit
or maintenance facilities, rail lines, or bridges. FTA will also adopt
the commenters' suggestion that these items be described as made of
``primarily steel or iron.''
B. Intentional Violations (Sec. 661.18)
Section 1048(b) amends 49 U.S.C. 5323(j) by inserting subsection
(5), which states that any person determined by a Federal agency or
court to have affixed a false ``Made in America'' label to or
misrepresented the origin of a foreign product, shall be ineligible to
receive contracts funded under ISTEA. In the NPRM, FTA proposed to add
new section 661.18, which would bar such persons from Federal
assistance under ISTEA ``pursuant to suspension and debarment
proceedings under [49 CFR Part 29].''
Two commenters expressed the view that the wording of proposed
section 661.18 could lead to a situation in which a person convicted of
fraudulent misrepresentation under criminal statutes, but not processed
through an administrative debarment/suspension proceeding, would remain
eligible to receive ISTEA funds, contrary to Congressional intent.
According to these commenters, the reference to debarment and
suspension proceedings is unnecessary and should be removed. They
stated that the remaining ineligibility under 49 CFR Part 29 is
sufficient to implement Congress' intent without causing undue
confusion.
FTA agrees that the use of the term ``proceeding'' in section 661.8
may create confusion since it could imply that only persons who have
been suspended or debarred through a formal administrative process or
hearing would be ineligible to receive ISTEA funds. In order to make it
clear that any person suspended or debarred under 49 CFR Part 29,
whether through a formal administrative hearing or under the general
procedures of the regulation, will be so ineligible, FTA will delete
its reference to ``proceedings.''
C. Limitation of the Applicability of Waivers (Sec. 661.7(h))
Section 1048(b) also amends 49 U.S.C. 5323(j) by adding subsection
(4), which provides that if a foreign country is party to an agreement
with the United States under which the Buy America requirements are
waived, and the foreign country violates the agreement by
discriminating against U.S. goods, products from that country shall not
be eligible for waivers under 49 U.S.C. 5323(j). In the NPRM, FTA noted
that there is currently no agreement between the United States and a
foreign country which waives the Buy America requirements. FTA
therefore stated that it considered this provision inoperative at the
present time. FTA proposed to amend 49 CFR 661.7 to add a new
subsection that will reflect this statutory change, and sought comment
on whether its conclusion that 49 U.S.C. 5323(j)(4) is not applicable
at this time requires further discussion or expansion.
Two commenters agreed that the provision should be adopted as
proposed, but suggested that it be amended to provide clarification or
guidance in the event that the type of international agreement
contemplated in section 1048(b) should be concluded. Accordingly, FTA
will adopt proposed subsection 661.7(h), subject to eventual
[[Page 6301]]
amendment, should the United States become party to such an agreement.
III. Amendments to Update and Clarify the Buy America Regulation
In the NPRM, FTA also sought to update the regulation by removing
provisions that are no longer applicable, and to clarify certain other
provisions.
A. Definition of ``Component'' (Sec. 661.3)
The FTA Buy America regulation, 49 CFR Part 661, consistent with
the Surface Transportation Assistance Act of 1982 (STAA) and the
Surface Transportation and Uniform Relocation Assistance Act (STURAA),
establishes separate requirements for rolling stock. To be considered
domestic, rolling stock must be assembled in the United States and 60
percent of its components, by cost, must be of U.S. origin. For a
manufactured product to be considered domestic, all manufacturing
processes must take place in the United States and all of its
components must be of U.S. origin. In both cases, then, to determine
compliance with the Buy America requirements, it is necessary to
identify those parts of a product which may be considered components.
Section 661.11 which sets out the separate requirements for rolling
stock, defines, at subsection (e), component as ``any article,
material, or supply, whether manufactured or unmanufactured, that is
directly incorporated into the end product at the final assembly
location.'' However, many suppliers of manufactured products have
pointed out to FTA that neither section 661.3 (general definitions) nor
section 661.5 (requirements for manufactured products) contains a
similar definition of component. They have therefore asked FTA for
guidance in determining what constitutes a component of a manufactured
product.
FTA notes that the definition of component of subsection 661.11(e)
parallels that of the Federal Acquisition Regulations implementing the
Buy American Act of 1933 (51 U.S.C. 10(a)-(d)), which applies to
manufactured products generally. FTA therefore considers that it is
appropriate to apply this definition to components of manufactured
products as well as to components of rolling stock. Accordingly, FTA
proposed in the NPRM to add it to the definitions provision of the
regulation, section 661.3. All comments on this issue were favorable,
and FTA is adopting the definition as proposed.
B. Component Requirement for Manufactured Products (Sec. 661.5(d)(2))
Section 165(b)(3) of the STAA, as amended by section 337 of STURAA,
imposes domestic preference requirements on the subcomponents of
components of rolling stock and associated equipment. No such similar
statutory changes were made to section 165(a) for manufactured
products. Therefore, the agency concluded that a manufactured product
is of domestic origin if it is manufactured in the United States. In
other words, in determining the origin of a component of a manufactured
product governed by section 165(a), FTA will look only to where the
product is manufactured, and will not look to the origin of the various
materials included in the product during the manufacturing process.
However, subsection 661.5(d)(2) of the regulation provides that for a
manufactured product to be considered of U.S. origin, ``all items or
material used in the product must be of United States origin.''
In FTA's experience, the language of this provision has often
created the incorrect assumption that in determining the origin of a
manufactured product, FTA will consider all of its material content,
even at the subcomponent level and below. In order to correct this
misunderstanding, FTA proposed to amend subsection 661.5(d)(2) to state
that for a manufactured product to be considered of domestic origin,
all of its components must be of United States origin. FTA also
proposed to treat a component as being of U.S. origin if it is
manufactured in the United States, regardless of the origin of its
subcomponents. All of the commenters agreed that the proposal would
correct the confusion and misunderstanding created by the current
language of subsection 661.5(d)(2). FTA is amending this subsection as
proposed.
C. Determination of Grandfathered Companies (Sec. 661.10)
Section 337 of the STURAA provided for a gradual increase in the
domestic content requirements for buses and other rolling stock from 50
percent to 60 percent. Section 337(a)(2)(B) of STURAA stated that these
revised requirements would not apply to any contract entered into prior
to April 1, 1992, with any supplier or contractor or any successor in
interest or assignee which had complied with the previous domestic
content requirements. Section 661.10 of the regulation sets out the
criteria for determining whether a company could qualify for
grandfather treatment. Since the April 1, 1992, deadline has elapsed,
and since there is little likelihood that contracts for rolling stock
executed prior to that date are still outstanding, FTA will delete this
grandfather provision from its Buy America regulation.
D. Domestic Content Requirements for Rolling Stock (Secs. 661.11(a)-
(d))
As indicated above, section 337 of STURAA provided for a gradual
increase in the domestic content for rolling stock from the previous 50
percent level to 55 percent for contracts entered into after October 1,
1989, and to 60 percent for contracts entered into after October 1,
1991, and after April 1, 1992, for grandfathered companies. Subsections
661.11 (b) and (c) of Part 49 implemented these statutory provisions.
Since the 60 percent domestic content requirement is now in effect for
all contracts executed after April 1, 1992, FTA will delete subsections
661.11(a) to reflect this change. Subsections (k) and (n) will also be
revised to indicate that the 60 percent domestic content requirements
also apply to components of rolling stock. The remaining subsections of
49 CFR 661.11 will be re-numbered accordingly.
IV. Regulatory Impacts
A. Executive Order 12866
FTA has determined that this action is not significant under
Executive Order 12866 or Department of Transportation regulatory
policies and procedures. Since this final rule makes only technical
amendments to current regulatory language, it is anticipated that the
economic impact of this rulemaking will be minimal; therefore, a full
regulatory evaluation is not required.
B. Regulatory Flexibility Act
In accordance with 5 U.S.C. 603(a), as added by the Regulatory
Flexibility Act, Pub. L. 96-354, FTA certifies that this rule will not
have a significant impact on a substantial number of small entities
with the meaning of the Act.
C. Paperwork Reduction Act
This action does not contain a collection of information
requirement for purposes of the Paperwork Reduction Act of 1980, 44
U.S.C. 3501, et seq.
D. Executive Order 12612
This action has been reviewed under Executive Order 12612 on
Federalism and FTA has determined that it does not have implications
for principles of Federalism that warrant the preparation of a
Federalism Assessment. If
[[Page 6302]]
promulgated, this rule will not limit the policy making or
administrative discretion of the States, nor will it impose additional
costs or burdens on the States, nor will it affect the States'
abilities to discharge the traditional State governmental functions or
otherwise affect any aspect of State sovereignty.
List of Subjects in 49 CFR Part 661
Buy America, Domestic preference requirement, Government contracts,
Grant programs--Transportation, Mass transportation.
Amendment of 49 CFR Part 661
Accordingly, for the reasons described in the preamble, Part 661 of
Title 49 of the Code of Federal Regulations is amended as follows:
PART 661--[AMENDED]
1. By revising the authority citation to read as follows:
Authority: 49 U.S.C. 5323(j) (formerly sec. 165, Pub. L. 97-424;
as amended by sec. 337, Pub. L. 100-17 and sec. 1048, Pub. L. 102-
240); 49 CFR 1.51.
2. By adding in alphabetical order a definition of ``Component'' to
Sec. 661.3 to read as follows:
Sec. 661.3 Definitions.
* * * * *
Component means any article, material, or supply, whether
manufactured or unmanufactured, that is directly incorporated into the
end product at the final assembly location.
* * * * *
3. By revising Sec. 661.5 to read as follows:
Sec. 661.5 General requirements.
(a) Except as provided in Sec. 661.7 and Sec. 661.11 of this part,
no funds may be obligated by FTA for a grantee project unless all iron,
steel, and manufactured products used in the project are produced in
the United States.
(b) All steel and iron manufacturing processes must take place in
the United States, except metallurgical processes involving refinement
of steel additives.
(c) The steel and iron requirements apply to all construction
materials made primarily of steel or iron and used in infrastructure
projects such as transit or maintenance facilities, rail lines, and
bridges. These items include, but are not limited to, structural steel
or iron, steel or iron beams and columns, running rail and contact
rail. These requirements do not apply to steel or iron used as
components or subcomponents of other manufactured products or rolling
stock.
(d) For a manufactured product to be considered produced in the
United States:
(1) All of the manufacturing processes for the product must take
place in the United States; and
(2) All of the components of the product must be of U.S. origin. A
component is considered of U.S. origin if it is manufactured in the
United States, regardless of the origin of its subcomponents.
4. By adding new 661.7(h) to read as follows:
Sec. 661.7 Waivers.
* * * * *
(h) The provisions of this section shall not apply to products
produced in a foreign country if the Secretary, in consultation with
the United States Trade Representative, determines that:
(1) That foreign country is party to an agreement with the United
States pursuant to which the head of an agency of the United States has
waived the requirements of this section; and
(2) That foreign country has violated the terms of the agreement by
discriminating against products covered by this section that are
produced in the United States and are covered by the agreement.
* * * * *
5. By removing Sec. 661.10.
Sec. 661.10 [Removed]
6. By revising Sec. 661.11 to read as follows:
Sec. 661.11 Rolling stock procurements.
(a) The provisions of Sec. 661.5 do not apply to the procurement of
buses and other rolling stock (including train control, communication,
and traction power equipment), if the cost of components produced in
the United States is more than 60 percent of the cost of all components
and final assembly takes place in the United States.
(b) The domestic content requirements in paragraph (a) of this
section also apply to the domestic content requirements for components
set forth in paragraphs (i), (j), and (l) of this section.
(c) A component is any article, material, or supply, whether
manufactured or unmanufactured, that is directly incorporated into an
end product at the final assembly location.
(d) A component may be manufactured at the final assembly location
if the manufacturing process to produce the component is an activity
separate and distinct from the final assembly of the end product.
(e) A component is considered to be manufactured if there are
sufficient activities taking place to advance the value or improve the
condition of the subcomponents of that component; that is, if the
subcomponents have been substantially transformed or merged into a new
and functionally different article.
(f) Except as provided in paragraph (k) of this section, a
subcomponent is any article, material, or supply, whether manufactured
or unmanufactured, that is one step removed from a component (as
defined in paragraph (c) of this section) in the manufacturing process
and that is incorporated directly into a component.
(g) For a component to be of domestic origin, more that 60 percent
of the subcomponents of that component, by cost, must be of domestic
origin, and the manufacture of the component must take place in the
United States. If, under the terms of this part, a component is
determined to be of domestic origin, its entire cost may be used in
calculating the cost of domestic content of an end product.
(h) A subcomponent is of domestic origin if it is manufactured in
the United States.
(i) If a subcomponent manufactured in the United States is exported
for inclusion in a component that is manufactured outside the United
States and it receives tariff exemptions under the procedures set forth
in 19 CFR 10.11 through 10.24, the subcomponent retains its domestic
identity and can be included in the calculation of the domestic content
of an end product even if such a subcomponent represents less than 60
percent of the cost of a particular component.
(j) If a subcomponent manufactured in the United States is exported
for inclusion in a component manufactured outside the United States and
it does not receive tariff exemption under the procedures set forth in
19 CFR 10.11 through 10.24, the subcomponent loses its domestic
identity and cannot be included in the calculation of the domestic
content of an end product.
(k) Raw materials produced in the United States and then exported
for incorporation into a component are not considered to be a
subcomponent for the purpose of calculating domestic content. The value
of such raw materials is to be included in the cost of the foreign
component.
(l) If a component is manufactured in the United States, but
contains less than 60 percent domestic subcomponents, by cost, the cost
of the domestic subcomponents and the cost of manufacturing the
component may be included in the calculation of the domestic content of
the end product.
[[Page 6303]]
(m) For purposes of this section, except as provided in paragraph
(o) of this section:
(1) The cost of a component or a subcomponent is the price that a
bidder or offeror must pay to a subcontractor or supplier for that
component or subcomponent. Transportation costs to the final assembly
location must be included in calculating the cost of foreign components
and subcomponents.
(2) If a component or subcomponent is manufactured by the bidder or
offeror, the cost of the component is the cost of labor and materials
incorporated into the component or subcomponent, an allowance for
profit, and the administrative and overhead costs attributable to that
component or subcomponent under normal accounting principles.
(n) The cost of a component of foreign origin is set using the
foreign exchange rate at the time the bidder or offeror executes the
appropriate Buy America certificate.
(o) The cost of a subcomponent that retains its domestic identity
consistent with paragraph (j) of this section shall be the cost of the
subcomponent when last purchased, f.o.b. United States port of
exportation or point of border crossing as set out in the invoice and
entry papers or, if no purchase was made, the value of the subcomponent
at the time of its shipment for exportation, f.o.b. United States port
of exportation or point of border crossing as set out in the invoice
and entry papers.
(p) In accordance with 49 U.S.C. 5323(j), labor costs involved in
final assembly shall not be included in calculating component costs.
(q) The actual cost, not the bid price, of a component is to be
considered in calculating domestic content.
(r) Final assembly is the creation of the end product from
individual elements brought together for that purpose through
application of manufacturing processes. If a system is being procured
as the end product by the grantee, the installation of the system
qualifies as final assembly.
(s) An end product means any item subject to 49 U.S.C. 5323(j) that
is to be acquired by a grantee, as specified in the overall project
contract.
(t) Train control equipment includes, but is not limited to, the
following equipment:
(1) Mimic board in central control
(2) Dispatcher's console
(3) Local control panels
(4) Station (way side) block control relay cabinets
(5) Terminal dispatcher machines
(6) Cable/cable trays
(7) Switch machines
(8) Way side signals
(9) Impedance bonds
(10) Relay rack bungalows
(11) Central computer control
(12) Brake equipment
(13) Brake systems
(u) Communication equipment includes, but is not limited to, the
following equipment:
(1) Radios
(2) Space station transmitter and receivers
(3) Vehicular and hand-held radios
(4) PABX telephone switching equipment
(5) PABX telephone instruments
(6) Public address amplifiers
(7) Public address speakers
(8) Cable transmission system cable
(9) Cable transmission system multiplex equipment
(10) Communication console at central control
(11) Uninterruptible power supply inverters/rectifiers
(12) Uninterruptible power supply batteries
(13) Data transmission system central processors
(14) Data transmission system remote terminals
(15) Line printers for data transmission system
(16) Communication system monitor test panel
(17) Security console at central control
(v) Traction power equipment includes, but is not limited to the
following:
(1) Primary AC switch gear
(2) Primary AC transformer rectifiers
(3) DC switch gear
(4) Traction power console and CRT display system at central control
(5) Bus ducts with buses (AC and DC)
(6) Batteries
(7) Traction power rectifier assemblies
(8) Distribution panels (AC and DC)
(9) Facility step-down transformers
(10) Motor control centers (facility use only)
(11) Battery chargers
(12) Supervisory control panel
(13) Annunciator panels
(14) Low voltage facility distribution switch board
(15) DC connect switches
(16) Negative bus boxes
(17) Power rail insulators
(18) Power cables (AC and DC)
(19) Cable trays
(20) Instrumentation for traction power equipment
(21) Connectors, tensioners, and insulators for overhead power wire
systems
(22) Negative drainage boards
(23) Inverters
(24) Traction motors
(25) Propulsion gear boxes
(26) Third rail pick-up equipment
(27) Pantographs
(w) The power or third rail is not considered traction power
equipment and is thus subject to the requirements of 49 U.S.C. 5323(j)
and the requirements of Sec. 661.5.
(x) A bidder on a contract for an item covered by 49 U.S.C. 5323(j)
who will comply with section 165(b)(3) and regulations in this section
is not required to follow the application for waiver procedures set out
in Sec. 661.9. In lieu of these procedures, the bidder must submit the
appropriate certificate required by Sec. 661.12.
7. By adding Sec. 661.18 to read as follows:
Sec. 661.18 Intentional violations.
A person shall be ineligible to receive any contract or subcontract
made with funds authorized under the Intermodal Surface Transportation
Efficiency Act of 1991 pursuant to part 29 of this title if it has been
determined by a court or Federal agency that the person intentionally--
(a) Affixed a label bearing a ``Made in America'' inscription, or
an inscription with the same meaning, to a product not made in the
United States, but sold in or shipped to the United States and used in
projects to which this section applies, or
(b) Otherwise represented that any such product was produced in the
United States.
Issued on: February 9, 1996.
Gordon J. Linton,
Administrator.
[FR Doc. 96-3388 Filed 2-15-96; 8:45 am]
BILLING CODE 4910-57-P
Complete official Federal Register PDF
FR Doc. 96-3281 National Oil and Hazardous Substances Pollution Contingency Plan National Priorities List
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Pages 6115-6116]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3281]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 300
[FRL-5420-9]
National Oil and Hazardous Substances Pollution Contingency Plan
National Priorities List
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of Deletion of Flowood Site from the National Priorities
List (NPL).
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SUMMARY: EPA, Region 4, announces the deletion of the Flowood Site from
the National Priorities List (NPL). The NPL is Appendix B of 40 CFR
part 300 which is the National Oil and Hazardous Substances Pollution
Contingency Plan (NCP), which EPA promulgated pursuant to section 105
of the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (CERCLA). EPA and the State of Mississippi
(State) have determined that all appropriate CERCLA actions have been
implemented and that no further cleanup by responsible parties is
appropriate. Moreover, EPA
[[Page 6116]]
and the State have determined that remedial activities conducted at the
Site to date have been protective of public health, welfare, and the
environment.
EFFECTIVE DATE: February 16, 1996.
ADDRESSES: Comprehensive information on this Site is available through
the EPA Region 4 public docket, which is located at the Region 4 office
and is available for viewing by appointment only from 9 a.m. to 4 p.m.,
Monday through Friday, excluding holidays. Requests for appointments or
copies of the background information from the regional public docket
should be directed to the EPA Region 4 Docket Office.
The address for the Regional Docket Office is: Ms. Debbie Jourdan,
U.S. Environmental Protection Agency, Region 4, 345 Courtland Street,
NE., Atlanta, Georgia 30365, Telephone No. (404) 347-3555, extension
6217
Background information from the regional public docket is also
available for viewing at the Site information repository located at the
following address: Pearl Public Library, 3470 Highway 80 East, Pearl,
Mississippi 39208, Telephone No. (601) 932-2562.
FOR FURTHER INFORMATION CONTACT: Betty L. Winter, Community Involvement
Specialist, U.S. Environmental Protection Agency, Region 4, 345
Courtland Street NE., Atlanta, Georgia 30365, (404) 347-2643 ext. 6264.
SUPPLEMENTARY INFORMATION: EPA announces the deletion of the Flowood
Site in Rankin County, Mississippi from the National Priorities List
(NPL), which is Appendix B of the National Oil and Hazardous Substances
Pollution Contingency Plan (NCP). EPA identifies sites that appear to
present a significant risk to public health, welfare, or the
environment and maintains the NPL as the list of those sites. Sites on
the NPL may be the subject of remedial actions financed by the
Hazardous Substances Superfund Response Trust Fund (Fund). Pursuant to
42 U.S.C. section 9605 (40 CFR 300.425(e)(3) of the NCP), any site
deleted from the NPL remains eligible for Fund-financed Remedial
Actions in the event that conditions at the site warrant such action.
EPA published a Notice of Intent to Delete the Flowood Site from
the NPL on June 15, 1995 in the Federal Register (60 FR 31440). EPA
received no comments on the proposed deletion; and, therefore, no
responsiveness summary is necessary for attachment to this Notice of
Deletion. Deletion of a site from the NPL does not affect the
responsible party liability or impede agency efforts to recover costs
associated with response efforts.
List of Subjects in 40 CFR Part 300
Environmental protection, Air pollution control, Chemicals,
Hazardous substances, Hazardous waste, Intergovernmental relations,
Penalties, Reporting and recordkeeping requirements, Superfund, Water
pollution control, Water supply.
Dated: January 12, 1996.
Phyllis P. Harris,
Acting Regional Administrator, EPA Region 4.
40 CFR part 300 is amended as follows:
PART 300--[AMENDED]
1. The authority citation for part 300 continues to read as
follows:
Authority: 33 U.S.C. 1321(c)(2); 42 U.S.C. 9601-9657; E.O.
12777, 56 FR 54757, 3 CFR, 191 Comp., p. 351; E.O. 12580, 52 FR
2923, 3 CFR, 1987 Comp., p. 193.
Appendix B--[Amended]
2. Table 1 of appendix B to part 300 is amended by removing the
Site ``Flowood Site, Flowood, Mississippi''.
[FR Doc. 96-3281 Filed 2-15-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-3258 Federal Motor Vehicle Safety Standards; Air Brake Systems; Air Compressor Cut-In
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Pages 6173-6175]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3258]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 571
[Docket No. 90-3; Notice 6]
RIN 2127-AF63
Federal Motor Vehicle Safety Standards; Air Brake Systems; Air
Compressor Cut-In
AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This document concludes a rulemaking proceeding begun in
response to a petition for rulemaking submitted by the Truck Trailer
Manufacturers Association (TTMA). It amends Standard No. 121, Air Brake
Systems, to require the automatic activation of the air compressor on a
powered vehicle whenever the pressure in the air brake system drops
below 100 pounds per square inch (psi). The agency has concluded that
the amendment will ensure that new truck tractors provide trailers with
sufficient air pressure for release of the trailer parking brakes and
provide adequate service braking. In addition, the amendment will
provide greater air reserves on all air braked vehicles.
DATES: Effective date. The amendment becomes effective March 18, 1996.
Compliance date. Compliance with the amendment will be required on and
after March 1, 1997.
Petitions for reconsideration. Any petitions for reconsideration of
this rule must be received by NHTSA no later than April 1, 1996.
ADDRESSES: Petitions for reconsideration of this rule should refer to
the above referenced docket numbers and should be submitted to:
Administrator, National Highway Traffic Safety Administration, 400
Seventh Street SW., Washington, D.C. 20590.
FOR FURTHER INFORMATION CONTACT:
For non-legal issues: Mr. Richard Carter, Office of Crash
Avoidance, National Highway Traffic Safety Administration, 400 Seventh
Street, SW., Washington, D.C. 20590 (202) 366-5274.
For legal issues: Mr. Marvin L. Shaw, NCC-20, Rulemaking Division,
Office of Chief Counsel, National Highway Traffic Safety
Administration, 400 Seventh Street, SW., Washington, D.C. 20590 (202-
366-2992).
SUPPLEMENTARY INFORMATION:
I. Background
Standard No. 121, Air Brake Systems, specifies performance and
equipment requirements for braking systems on vehicles equipped with
air brakes, including a requirement specifying the minimum air pressure
at which a towing vehicle's air compressor governor must automatically
activate the compressor. The governor maintains reservoir air pressure
between predetermined minimum and maximum pressures. Under the current
requirement in S5.1.1.1, the governor must automatically activate the
air compressor when air pressure in the reservoir falls to 85 pounds
per square inch (psi). Currently manufactured air brake systems
typically operate between 100 psi and 120 psi.
NHTSA adopted the air compressor governor minimum cut-in
requirement on October 8, 1991. (56 FR 50666) In adopting the
requirement, the agency explained that the requirement will ensure, in
the event of an air leak in a tractor's brake supply system, the air
compressor for the system will be activated to restore or maintain
pressure in the system until the air leak is detected and corrected.
The agency further stated that since most vehicles already complied
with the cut-in requirement, it would not result in an undue burden for
manufacturers.
The October 1991 final rule also amended Standard No. 121 by
deleting the requirement for each trailer to have a separate protected
reservoir for the purpose of releasing the parking brake. Under the
rule, air pressure from the tractor supply lines may be used to
[[Page 6174]]
release the trailer parking brakes instead of air from a separate
reservoir. The final rule also specified requirements for a minimum air
pressure of 70 psi in the trailer's supply line in the event of
pneumatic failure. The final rule also prevents the automatic
application of the trailer parking brakes while the minimum trailer
supply line air pressure is maintained.
II. Rulemaking Petition
On August 2, 1994, the Truck Trailer Manufacturers Association
(TTMA) submitted a petition for rulemaking to amend S5.1.1.1 of
Standard No. 121 to increase the minimum air pressure, at which the
governor is required to activate the air compressor, from 85 psi to 100
psi. The petitioner stated that its requested amendment is necessary to
assure that new truck tractors provide air braked trailers with
sufficient pressure for release of the trailer parking brakes and to
provide adequate service braking. TTMA said that the current 85 psi air
pressure compressor cut-in requirement may not be sufficient to ensure
that adequate pressure is supplied to a trailer being towed by a
tractor. TTMA also stated that higher truck or tractor air pressures
increase the speed at which trucks or tractors can resupply trailers
with air and that these higher pressures will store more air for use by
the braking systems. The petitioner further stated that ``all tractor
manufacturers are now building tractors whose nominal compressor cut-in
pressure is at least 100 psi.''
III. NHTSA Proposal
On June 13, 1995, NHTSA published a notice of proposed rulemaking
(NPRM) proposing to increase the required minimum air compressor cut-in
pressure from 85 psi to 100 psi. (60 FR 31135) The agency set forth the
following reasons for its decision to propose increasing the cut-in air
pressure above the current 85 psi level. First, the agency believed
that the proposed amendment would enhance safety by better ensuring
that new truck tractors are capable of providing trailers with
sufficient pressure for release of the trailer parking brakes and
provide adequate service braking. Specifically, raising the minimum
cut-in pressure would allow the storage of an additional volume of
compressed air that would be available for an air brake system. Second,
the agency stated that the proposal to maintain an overall higher
system air pressure would allow a better ``match up'' of protection
valve settings between the tractors and trailers. Third, the agency
stated that a greater margin of safety would be provided for long
stroke brake chambers, which need more compressed air.
After explaining its tentative conclusion that increasing the cut-
in pressure to 100 psi would not result in any safety problems, NHTSA
invited comments about whether the proposed amendment would affect
safety.
NHTSA further stated that its analysis of current manufacturing
practices confirmed TTMA's statement that manufacturers are typically
building vehicles with a cut-in pressure of at least 100 psi. The
docket includes a memorandum summarizing the agency's discussions with
vehicle manufacturers and the American Trucking Associations (ATA) in
which they indicate that new truck tractors are typically equipped with
governors that activate the air compressor when air pressure drops to
100 psi. In addition, Midland-Grau and Allied Signal, which together
produce over 95 percent of the air compressors and governors in the
United States, stated that they set their air compressors and governors
at 100 psi or higher. Based on its research, NHTSA was aware of no
company that manufactures these devices with a cut-in pressure between
85 and 100 psi nor of any purchaser that requests a cut-in pressure in
this lower range. Accordingly, NHTSA believed that the proposed
amendment would codify existing industry practice, since equipment on
new vehicles are being built with the proposed settings.
IV. Comments on the NPRM and Final Rule
NHTSA received comments from ATA, the Truck Manufacturing
Association (TMA), the Heavy Duty Brake Manufacturing Council (HDBMC),
the Truck Trailer Manufacturers Association (TTMA), the Advocates for
Highway Safety (Advocates), vehicle manufacturers (Ford, Mack Truck,
Navistar, and PACCAR), brake manufacturers (Allied Signal and Midland-
Grau), and an engineering consultant.
The commenters generally supported the proposal to raise the air
compressor cut-in pressure to 100 psi or more. Even though it did not
oppose the proposal, TMA stated that there was little need for adopting
the proposal since the vast majority of vehicles already meet the
proposed requirements and the rest will soon comply. That organization
expressed concern that while most domestic manufacturers already comply
with the cut-in requirements, new entries and imports may be designed
to the 85 psi requirement. However, NHTSA believes that in Europe, cut-
in pressure is typically over 100 psi. Should TMA have specific data on
this issue, it is encouraged to present it to the agency. TMA,
Navistar, AlliedSignal, Mack Trucks, and HDBMC requested that the
agency modify the wording to state that the cut-in pressure shall be
``100 psi or greater.'' These commenters believed that this modified
wording will accommodate variations in manufacturers' recommended cut-
in pressures.
Based on its review of the comments and the available information,
NHTSA has decided to amend Standard No. 121 to require the automatic
activation of the air compressor whenever the pressure in the air brake
system drops below 100 psi. As the agency stated in the NPRM, this
amendment will ensure that new truck tractors are capable of providing
trailers with sufficient pressure for release of the trailer parking
brakes and provide adequate service braking. Specifically, raising the
cut-in pressure allows the storage of an additional volume of
compressed air that will be available for an air brake system. Second,
requiring an overall higher system air pressure will allow a better
``match up'' of protection valve settings between the tractors and
trailers. Third, the amendment will provide a greater margin of safety
for long stroke brake chambers, which need more compressed air. The
agency anticipates no safety problems as the result of this amendment.
ATA commented that it had no objection to the proposal if it
applied only to towing trucks and tractors. However, that organization
opposed applying the proposal to single unit vehicles.
NHTSA has decided to apply the air compressor cut-in pressure
requirements to all powered vehicles, including single unit vehicles.
The agency believes that raising the air compressor cut-in pressure to
100 psi provides potential safety benefits in addition to providing
faster brake release times between the tractor and trailers and better
balancing of pressures. The agency has decided to include single unit
vehicles in the requirements because of its concern over increased air
consumption with long stroke brake chambers combined with ABS. The
agency is currently reviewing petitions for reconsideration on its rule
allowing long stroke brake chambers and, subsequent to its response,
encourages ATA and others to reexamine this issue. Even though ATA
stated that it was concerned that there may be some special
applications or vehicle types where a lower air pressure is desirable
or necessary, the agency is not aware of any specific examples of
[[Page 6175]]
any such special conditions that preclude the use of the higher air
pressure.
In the NPRM, NHTSA proposed that compliance date for the final rule
be 30 days after its publication in the Federal Register. The agency
stated that this amendment would have no adverse effect on
manufacturers since all manufacturers currently comply with the
proposed requirements. NHTSA requested comments about whether a
leadtime of 30 days would be appropriate or whether more lead time was
necessary.
Advocates favored a compliance date of 30 days after the notice's
publication. Mack requested that the compliance date not occur before
March 1, 1996, since that company manufactures two low volume truck
tractor models and a high volume truck model that require a longer
leadtime to convert to the higher cut-in pressure. PACCAR, commenting
through TMA, stated that it will need 12 months to adapt to the
proposed change.
NHTSA has decided to set a compliance date of March 1, l997 for the
amended air compressor cut-in pressure. The agency believes that
providing additional leadtime is necessary given that some
manufacturers will need additional time to modify certain vehicles.
Given that these manufacturers would have to make significant changes
to certain air brake systems, they would not be able to make the
modifications within the 30 day period that was initially proposed.
This compliance date also corresponds to that for the antilock brake
system and stopping distance requirements for truck tractors.
V. Rulemaking Analyses and Notices
1. Executive Order 12866 (Federal Regulatory Planning and Review) and
DOT Regulatory Policies and Procedures
This rulemaking was not reviewed under E.O. 12866. NHTSA has
analyzed this rulemaking and determined that it is not ``significant''
within the meaning of the Department of Transportation's regulatory
policies and procedures. A full regulatory evaluation is not required
because the rule will have a minimal effect on the costs or performance
of the existing air brake systems. For most manufacturers and most
vehicles, today's amendment merely codifies an existing industry
practice.
2. Regulatory Flexibility Act
In accordance with the Regulatory Flexibility Act, NHTSA has
evaluated the effects of this action on small entities. Based upon this
evaluation, I certify that the amendment will not have a significant
economic impact on a substantial number of small entities. Vehicle and
brake manufacturers typically do not qualify as small entities. Vehicle
manufacturers, small businesses, small organizations, and small
governmental units which purchase motor vehicles will not be
significantly affected by the requirements since the cost of new
vehicles will not change. Accordingly, no regulatory flexibility
analysis has been prepared.
3. Executive Order 12612 (Federalism)
This action has been analyzed in accordance with the principles and
criteria contained in Executive Order 12612, and it has been determined
that the rule will not have sufficient Federalism implications to
warrant preparation of a Federalism Assessment. No State laws will be
affected.
4. National Environmental Policy Act
Finally, the agency has considered the environmental implications
of this rule in accordance with the National Environmental Policy Act
of 1969 and determined that the rule will not significantly affect the
human environment.
5. Civil Justice Reform
This rule will not have any retroactive effect. Under section
103(d) of the National Traffic and Motor Vehicle Safety Act (49 U.S.C.
30111), whenever a Federal motor vehicle safety standard is in effect,
a state may not adopt or maintain a safety standard applicable to the
same aspect of performance which is not identical to the Federal
standard. Section 105 of the Act (49 U.S.C. 30161) sets forth a
procedure for judicial review of final rules establishing, amending or
revoking Federal motor vehicle safety standards. That section does not
require submission of a petition for reconsideration or other
administrative proceedings before parties may file suit in court.
List of Subjects in 49 CFR Part 571
Imports, Motor vehicle safety, Motor vehicles, Reporting and
recordkeeping requirements, Rubber and rubber products, Tires.
In consideration of the foregoing, the agency is amending part 571
of Title 49 of the Code of Federal Regulations as follows:
PART 571--[AMENDED]
1. The authority citation for Part 571 continues to read as
follows:
Authority: 49 U.S.C. 322, 30111, 30115, 30117, and 30166;
delegation of authority at 49 CFR 1.50.
2. In Sec. 571.121, S5.1.1.1 is revised to read as follows:
Sec. 571.121 Standard No. 121; Air brake systems.
* * * * *
S5.1.1.1 Air compressor cut-in pressure. The air compressor
governor cut-in pressure shall be 100 p.s.i. or greater.
* * * * *
Issued on: February 8, 1996.
Ricardo Martinez,
Administrator.
[FR Doc. 96-3258 Filed 2-15-96; 8:45 am]
BILLING CODE 4910-59-P
Complete official Federal Register PDF
FR Doc. 96-3190 Amendment to the International Traffic in Arms Regulations
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Pages 6111-6113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3190]
-----------------------------------------------------------------------
DEPARTMENT OF STATE
Bureau of Political Military Affairs
22 CFR Parts 123 and 126
[Public Notice 2294]
Amendment to the International Traffic in Arms Regulations
AGENCY: Department of State.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rule would amend the International Traffic in Arms
Regulations (ITAR) by establishing an exemption for the temporary
export of cryptographic products for personal use. The effect of the
change would be to ease the burden on U.S. citizens and lawful
permanent residents who have the need to temporarily export
cryptographic products when leaving the U.S. for brief periods of time.
EFFECTIVE DATE: February 16, 1996.
FOR FURTHER INFORMATION CONTACT:
Rose Biancaniello, Deputy Director for Licensing, Office of Defense
Trade Controls, Department of State, (703) 875-6643 or FAX (703) 875-
6647.
SUPPLEMENTARY INFORMATION: The U.S. Government has since 1993, at the
direction of the President, been reviewing the U.S. policy regarding
the domestic use of, and export controls on, cryptographic technology.
While U.S. national security and foreign policy compel maintaining
appropriate export controls on cryptography, the Department of State
has continued to reform the export control procedures applicable to
those products incorporating cryptography which are controlled by the
ITAR in Category XIII(b)(1). For example, on September 2, 1994, the
Department published (at 59 FR 45621) a final rule change which created
a new Section 124.15. The section provides for a new arrangement by
which the Department of State may provide approval for category
XIII(b)(1) cryptography products to be distributed by U.S.
manufacturers directly to foreign end users without obtaining an
individual license for each transaction.
After extensive review, the Department of State has decided to
further amend the regulations to provide for an exemption for the
temporary export of cryptographic products for personal use. The
exemption does not apply to other circumstances, for example, those in
which a person contemplates sales, marketing or demonstration. Nor does
the exemption apply to exports to destinations listed in Section 126.1
of the ITAR which are prohibited by a United Nations Security Council
Resolution or to which the export (or for which the issuance of a
[[Page 6112]]
license for the export) would be prohibited by a U.S. statute (e.g., by
Section 40 of the Arms Export Control Act, 22 U.S.C. 2780, to countries
that have been determined to have repeatedly provided support for acts
of international terrorism, i.e., Cuba, Iran, Iraq, Libya, North Korea,
Sudan and Syria).
This rule amends Part 123 to add a new Section 123.27 to reduce the
burden on individual users of cryptographic products by providing an
exemption for the temporary export for personal use of products covered
by Category XIII(b)(1) when the product remains in the possession of
the exporter or the possession of another U.S. citizen or lawful
permanent resident traveling with him/her. For purposes of this
exemption, a product is considered to be in the possession of the
exporter if the exporter takes normal precautions to ensure the
security of the product by locking the product in a hotel room, safe,
or other comparably secure location; and, while in transit, the
exporter keeps the product in his/her carry-on luggage or locked in
baggage accompanying the exporter which has been checked with the
carrier.
This amendment involves a foreign affairs function of the United
States and thus is excluded from the procedures of Executive Order
12866 (58 FR 51735) and 5 U.S.C. 553 and 554.
However, interested parties are invited to submit written comments
to the Department of State, Director, Office of Defense Trade Controls,
Attn: Regulatory Change, Personal Use Cryptographic Products, Room 200,
SA-6, Washington, DC 20520-0602.
This rule affects collection of information subject to the
Paperwork Reduction Act (44 U.S.C. 3501 et seq), and will serve to
reduce the burden on exporters by adding an exemption which will remove
the current requirement for a license.
Paperwork Reduction Act
The record-keeping requirement contained in section 123.27(b) has
been approved by OMB and has a control number of 1405-0103. 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.
List of Subjects
22 CFR Part 123
Arms and munitions, Exports, Reporting and recordkeeping
requirements.
22 CFR Part 126
Arms and munitions, Exports.
Accordingly, for the reasons set forth in the preamble, title 22,
chapter I, subchapter M, of the Code of Federal Regulations, is amended
as set forth below:
PART 123--LICENSES FOR THE EXPORT OF DEFENSE ARTICLES
1. The authority citation for part 123 continues to read as
follows:
Authority: Secs. 2 and 38, Pub. L. 90-629, 90 Stat. 744 (22
U.S.C. 2752, 2778); E.O. 11958, 42 FR 4311, 3 CFR 1977 Comp. 79; 22
U.S.C. 2658.
2. A new Sec. 123.27 is added to read as follows:
Sec. 123.27 Temporary export for personal use of Category XIII(b)(1)
cryptographic products.
(a) District Directors of Customs may permit a U.S. citizen or a
U.S. person who is a lawful permanent resident as defined by 8 U.S.C.
1101(a)(20) to temporarily export from the United States without a
license not more than one each of any unclassified Category XIII(b)(1)
cryptographic hardware product and not more than a single copy of each
type of unclassified Category XIII(b)(1) cryptographic software product
provided that:
(1) The software product(s) are to be used only on a simultaneously
temporarily exported Category XIII(b)(1) hardware product or a
simultaneously exported item on the Commerce Control List (CCL); and
(2) The cryptographic products covered by Category XIII(b)(1) are
not destined for export to a destination listed in Sec. 126.1 of the
ITAR (22 CFR 126.1) which is prohibited by a United Nations Security
Council Resolution or to which the export (or for which the issuance of
a license for the export) would be prohibited by a U.S. statute (e.g.,
by Section 40 of the Arms Export Control Act, 22 U.S.C. 2780, to
countries that have been determined to have repeatedly provided support
for acts of international terrorism--currently Cuba, Iran, Iraq, Libya,
North Korea, Sudan and Syria); and
(3)(i) The encryption products remain in the possession of the
exporting person or the possession of another U.S. citizen or lawful
permanent resident traveling with him/her, are for their exclusive use
and not for copying, demonstration, marketing, sale, re-export or
transfer of ownership or control. The export of cryptographic products
identified in Category XIII(b)(1) in any other circumstances, for
example, those in which a person contemplates sales, marketing, or
demonstration must be licensed in accordance with policies and
procedures established in this subchapter.
(ii) Special definition. For purposes of paragraph (a)(3)(i) of
this section, a product is considered to be in the possession of the
exporter if:
(A) The exporter takes normal precautions to ensure the security of
the product by locking the product in a hotel room, safe, or other
comparably secure location; and
(B) While in transit, the exporter keeps the product in his/her
carry-on luggage or locked in baggage accompanying the exporter which
has been checked with the carrier; and
(4) At the time of export from the U.S. and import into the U.S.,
the cryptographic products are with the individual's accompanying
baggage or effects. They may not be exported or imported in
unaccompanied baggage, mailed or transmitted by any other means (e.g.,
electronically); and, the cryptographic products must be returned to
the U.S. at the completion of the stay abroad; and
(5) The exporter, upon request of a U.S. Customs officer, will
submit the products to inspection at the time of export and/or import.
(b) Use of this exemption requires the exporter, in lieu of filing
a Shippers' Export Declaration, to maintain, for a period of 5 years
from the date of each temporary export, a record of that temporary
export and the subsequent import. Included in this record must be a
self certification that the individual complied with the conditions of
paragraph (a) of this section and a self certification that he/she has
no reason to believe that any of the temporarily exported cryptographic
products were stolen, lost, copied, sold or otherwise compromised or
transferred while abroad. The record should include the following
information: A description of the unclassified cryptographic products;
the countries entered, including the dates of entry and exit for each
foreign country; and, the dates of temporary export from and subsequent
import into the United States.
(c) In any instance where a product exported under this exemption
is stolen, lost, copied, sold or otherwise compromised or transferred
while abroad, the exporting person must, within 10 days of his/her
return to the United States, report the incident to the Department of
State, Office of Defense Trade Controls, Washington, D.C. 20520-0602.
Also, any person who knows or has reason to know that cryptographic
products exported under
[[Page 6113]]
this exemption are being transferred, exported, or used for any other
activity which must be licensed or otherwise authorized in writing by
the Department of State, should immediately inform the Department of
State, Office of Defense Trade Controls, Washington D.C. 20520-0602.
PART 126--GENERAL POLICIES AND PROVISIONS
1. The authority citation for part 126 continues to read as
follows:
Authority: Secs. 2, 38, 40, 42 and 71, Arms Export Control Act,
Pub. L. 90-629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 2780, 2791 and
2797); E.O. 11958, 41 FR 4311; E.O. 11322, 32 FR 119; 22 U.S.C.
2658; 22 U.S.C. 287c; E.O. 12918, 59 FR 28205.
2. Section 126.1(a) is amended by designating the three sentences
of the undesignated paragraph as the third, fourth and fifth sentences
of paragraph (a) and by adding a new sixth sentence at the end of
paragraph (a) to read as follows:
Sec. 126.1 Prohibited exports and sales to certain countries.
(a) * * * With regard to Sec. 123.27 the exemption does not apply
with respect to articles originating in or for export to countries
prohibited by a United Nations Security Council Resolution or to which
the export (or for which the issuance of a license for the export)
would be prohibited by a U.S. statute (e.g., by Section 40 of the Arms
Export Control Act, 22 U.S.C. 2780, to countries that have been
determined to have repeatedly provided support for acts of
international terrorism, i.e., Cuba, Iran, Iraq, Libya, North Korea,
Sudan and Syria).
* * * * *
Dated: November 17, 1995.
Lynn E. Davis,
Under Secretary for Arms Control and International Security Affairs.
[FR Doc. 96-3190 Filed 2-15-96; 8:45 am]
BILLING CODE 4710-25-M
Complete official Federal Register PDF
FR Doc. 96-3168 Regulations Governing Book-Entry Treasury Bonds, Notes and Bills; Regulations Governing Payments by the Automated Clearing House Method
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Pages 6113-6114]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3168]
=======================================================================
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DEPARTMENT OF THE TREASURY
Fiscal Service
31 CFR Parts 357 and 370
Regulations Governing Book-Entry Treasury Bonds, Notes and Bills;
Regulations Governing Payments by the Automated Clearing House Method
AGENCY: Bureau of the Public Debt, Fiscal Service, Treasury.
ACTION: Final rule.
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SUMMARY: The purpose of this final rule is to amend the general
regulations governing book-entry Treasury securities, which apply to
investors in the TREASURY DIRECT system, to require the Bureau of the
Public Debt to send prenotification messages when an investor has
requested that payments on his account be made by the Automated
Clearing House (ACH) method, and to modify the number of days required
to wait after a prenotification message is sent before live dollar
entries can be initiated. This amendment will bring the procedures for
prenotification messages for TREASURY DIRECT ACH payments in conformity
with the procedures for the National Automated Clearing House
Association (NACHA). Part 370 governs payments by the ACH method when
such payments are made by Treasury on account of United States
securities, including ACH payments in the TREASURY DIRECT system. This
rule affects only ACH payments in the TREASURY DIRECT system. Because
the amended Part 357 will contain some prenotification procedures
inconsistent with Part 370, Part 370 will indicate that it applies to
ACH payments made by Treasury on account of United States securities,
except as otherwise provided.
EFFECTIVE DATE: February 16, 1996.
FOR FURTHER INFORMATION CONTACT: Maureen Parker, Director, Division of
Securities Systems, Bureau of the Public Debt, Parkersburg, West
Virginia, 26106-1328, (304) 480-7761 or Susan Klimas, Attorney-Adviser,
Office of the Chief Counsel, Bureau of the Public Debt, (304) 480-5192.
SUPPLEMENTARY INFORMATION: This final rule amends the general
regulations governing book-entry Treasury securities to require that,
when payments are made by the ACH method, prenotification messages be
sent by the Bureau of the Public Debt to the financial institution to
which such payments are to be directed, and to change the current
waiting period after a prenotification message is sent before live
dollar entries can be transmitted from 15 days to 10 days, to conform
with the standard practice of NACHA. Prior to this amendment, the
regulations provided for prenotification messages to be sent, but did
not specifically require such messages. Accordingly, Part 357 is
amended by changing Sec. 357.26(b)(3) to provide that prenotification
messages must be sent and to require a 10 day waiting period after the
prenotification message is sent before a live money transfer can be
made. Additionally, the provisions of 31 CFR 370.5 relating to the
sending of prenotification messages, which were formerly incorporated
by reference, are added to this regulation. Because the amended Part
357, governing the TREASURY DIRECT system, will contain some procedures
inconsistent with Part 370, which applies to payments made by the
Bureau of the Public Debt by the ACH method of payment, Part 370 is
amended to indicate that it applies except as otherwise provided.
Procedural Requirements
It has been determined that this final rule does not meet the
criteria for a ``significant regulatory action,'' as defined in
Executive Order 12866. Therefore, the regulatory review procedures
contained therein do not apply.
This rule relates to matters of public contract and procedures for
U.S. securities, as well as the borrowing power and fiscal authority of
the United States. Accordingly, pursuant to 5 U.S.C. 553(a)(2), the
notice, public comment and delayed effective date provisions of the
Administrative Procedure Act do not apply. 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 new collections of information contained in this Final
Rule, and, therefore, the Paperwork Reduction Act (44 U.S.C. 3504(h))
does not apply.
List of Subjects in 31 CFR Parts 357 and 370
Banks, Banking, Bonds, Federal Reserve System, Government
securities, Electronic funds transfer, Government securities,
Securities.
Dated: January 11, 1996.
Gerald Murphy,
Fiscal Assistant Secretary.
For the reasons set out in the preamble, 31 CFR Parts 357 and 370
are amended as follows:
PART 357--GENERAL REGULATIONS GOVERNING BOOK-ENTRY TREASURY BONDS,
NOTES AND BILLS
1. The authority citation for Part 357 continues to read as
follows:
Authority: 31 U.S.C. Chapter 31, 5 U.S.C. 301 and 12 U.S.C. 391.
2. Section 357.26(b)(3) is revised to read as follows:
Sec. 357.26 Payments.
* * * * *
(b) * * *
(3) Prenotification. A prenotification message must be sent to the
financial
[[Page 6114]]
institution designated to receive ACH payments to confirm the accuracy
of the account information furnished by an owner, or other person or
entity entitled to make the designation, and to advise the financial
institution that such account has been so designated. Prenotification
messages may be sent at any time, but not less than 10 calendar days
prior to the first ACH payment. A prenotification message may also be
sent whenever there is a change in the payment instructions. The
prenotification message shall contain the ABA routing/transit number of
the financial institution to which payments with respect to a security
are to be made, as well as a depositor name reference, deposit account
number, and type or classification of account at the institution to
which such payments are to be credited. Responses to a prenotification
message will be received in accordance with the provisions in 31 CFR
370.5. Where the circumstances indicate that there is insufficient time
to effect the change received in response to the prenotification
message, payment will be made by check in accordance with paragraph (c)
of this section.
* * * * *
PART 370--REGULATIONS GOVERNING PAYMENTS BY THE AUTOMATED CLEARING
HOUSE METHOD ON ACCOUNT OF UNITED STATES SECURITIES
1. The authority citation for Part 370 continues to read as
follows:
Authority: 31 U.S.C. Chapter 31.
2. Section 370.0 is revised to read as follows:
Sec. 370.0 Applicability.
The regulations in this part apply to the Automated Clearing House
method of payment where employed by the Bureau of the Public Debt in
connection with United States securities, except as otherwise provided.
[FR Doc. 96-3168 Filed 2-15-96; 8:45 am]
BILLING CODE 4810-39-W
Complete official Federal Register PDF
FR Doc. 96-3128 Cable Home Wiring
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Pages 6131-6138]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3128]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 76
[MM Docket No. 92-260; FCC 95-503]
Cable Home Wiring
AGENCY: Federal Communications Commission.
ACTION: Final rule; First Order on Reconsideration.
-----------------------------------------------------------------------
SUMMARY: The First Order on Reconsideration denies petitions for
reconsideration of the Commission's cable home wiring rules, except to
specify the procedure a cable operator must follow when a subscriber
terminates cable service. This order will facilitate competition in the
video marketplace by clarifying rules governing the disposition of
wiring.
EFFECTIVE DATE: Upon approval by the Office of Management and Budget.
At a later date, the Commission will publish a document reflecting the
actual effective date.
FOR FURTHER INFORMATION CONTACT: Lynn Crakes or Rick Chessen, Cable
Services Bureau, (202) 416-0800. For additional information concerning
the information collections contained in this Order contact Dorothy
Conway at 202-418-0217, or via the Internet at [email protected].
SUPPLEMENTARY INFORMATION: This First Order on Reconsideration contains
proposed or modified information collections subject to the Paperwork
Reduction Act of 1995 (``PRA''), Pub. L. No. 104-13. It has been
submitted to the Office of Management and Budget (``OMB'') for review
under Section 3507(d) of the PRA. OMB, the general public, and other
Federal agencies are invited to comment on the proposed or modified
information collections contained in this proceeding.
Title: 47 CFR 76.802 Disposition of Cable Home Wiring
Type of Review: New Collection
Respondents: Business of other for profit; individuals or households
Number of Respondents: 11,400 cable operators
Estimated Time Per Response: .083 hours (5 minutes)
Total Annual Burden: 18,039 hours
Needs and Uses: This information disclosure requirement ensures
that consumers are informed of their cable home wiring purchase rights
upon termination of cable service, including information regarding the
purchase of their home wiring in a single contact, and the use of
wiring to connect to an alternative video programming service. This
rule promotes competition by clarifying the disposition of wiring upon
termination of cable service. Cable operators' responsibilities are
clearly defined and their property rights protected.
This is a synopsis of the Commission's First Order on
Reconsideration in MM Docket No. 92-260, FCC No. 95-508, adopted
December 15, 1995 and released January 26, 1996.
I. Introduction
1. In this First Order on Reconsideration, we grant in part and
[[Page 6132]]
deny in part petitions for reconsideration of the Commission's initial
cable home wiring regulations implementing Section 16(d) of the Cable
Television Consumer Protection and Competition Act of 1992 (the ``1992
Cable Act''). Generally, we: (1) deny the petitions for reconsideration
of the Commission's cable home wiring rules, except (a) to specify the
procedure a cable operator must follow when a subscriber voluntarily
terminates cable service, if the operator wishes to remove the home
wiring, and (b) to shorten from 30 days to seven business days the time
period after termination of service within which the cable operator has
the right to remove any home wiring it owns.
2. The Commission received three petitions for reconsideration of
the Report and Order in MM Docket No. 92-260 (``Cable Wiring Order''),
58 FR 11970 (March 2, 1993)--all from potential or current competitors
to cable operators--as well as replies to these petitions from cable
operators. Petitioners' arguments include the following (a) that
subscribers should be permitted to purchase or to control the cable
home wiring upon installation rather than upon termination of service,
(b) that cable operators should be prohibited from misrepresenting
whether they intend to remove or abandon the home wiring following
termination of service, (c) that the demarcation point for multiple
dwelling units should be relocated, (d) that loop-through wiring
configurations should be included within our rules under certain
circumstances, and (e) that passive cable equipment should be included
within the definition of cable home wiring.
II. Order on Reconsideration
A. Customer Access to Cable Home Wiring Prior to Termination of Service
1. Background
3. Section 16(d) of the 1992 Cable Act requires the Commission to
``prescribe rules concerning the disposition, after a subscriber
terminates service, of any cable installed by the cable operator within
the premises of such subscriber.'' The Commission's regulations
implementing Section 16(d) provide that, when a customer voluntarily
terminates service, the cable operator must give that subscriber the
opportunity to acquire the wiring before the operator removes it. The
subscriber may purchase the wiring inside his or her premises up to the
demarcation point, which we defined as a point at or about twelve
inches outside the subscriber's premises. The operator may not charge
the subscriber any more than the replacement cost of the wire, priced
on a per-foot basis. If the subscriber declines to purchase the wiring,
the operator must remove it within 30 days or make no subsequent
attempt to remove it or to restrict its use.
4. In the 1993 Cable Wiring Order, we said that it was not
``necessary or appropriate under the statute'' to apply our cable home
wiring rules prior to the time the customer terminates cable service.
We noted that the plain language of Section 16(d) of the 1992 Cable Act
refers only to the disposition of cable home wiring after termination
of service, and that cable home wiring is different from telephone
wiring in that, for example, cable operators have the responsibility to
prevent signal leakage which can cause harmful interference to licensed
radio spectrum users, a responsibility telephone companies do not have.
We also cited the House Report on the 1992 Cable Act which stated that
Section 16(d) itself ``does not address matters concerning the cable
facilities inside the subscriber's home prior to termination of
service.'' At the same time, the Commission stated:
[a]lthough we generally believe that broader cable home wiring
rules could foster competition and could potentially be considered
in the context of other proceedings, because of the time constraints
under which we must promulgate rules as required by the Cable Act of
1992, we decline to address such rule proposals in this proceeding.
2. Petitions
5. Some petitioners urge the Commission to apply the cable home
wiring rules prior to termination of service so that the subscriber may
control cable home wiring immediately upon installation. NYNEX asserts,
among other things, that consumers should be able to control the cable
home wiring upon installation so that they can obtain additional
services from other multichannel video programming service providers
through simultaneous use of the wire's spare capacity. On the other
hand, NCTA states that the Commission's current rules fully effectuate
the statutory language and the underlying purposes of the 1992 Cable
Act. NCTA and Time Warner claim that the Commission lacks the authority
under the 1992 Cable Act to mandate that operators convey ownership to
subscribers at the time of installation. Time Warner also asserts that
the Commission's current rules violate the takings clause by providing
that if a cable operator fails to remove its home wiring within 30 days
following termination of service, the operator is prohibited from
subsequently attempting to remove the wiring or restrict its use.
3. Discussion
6. The Commission's current cable home wiring rules implement the
specific directive of Section 16(d) of the 1992 Cable Act, i.e., to
establish rules governing the disposition of cable home wiring upon
termination of cable service. Our current rules promote the goals of
Section 16(d), which are to protect customers from unnecessary
disruption and expense caused by the removal of home wiring and to
allow subscribers to use the wiring for an alternative multichannel
video programming delivery system. On reconsideration, we are not
persuaded, based on the record in this proceeding at this time, to
expand our cable home wiring rules under Section 16(d) of the 1992
Cable Act. At the same time, we recognize that new competitors, such as
wireless cable, satellite master antenna television services
(``SMATVs'') and telephone companies, and new technologies, such as
video dialtone, are likely to change the video programming delivery
marketplace. The Commission must therefore consider broad
telecommunications issues which extend beyond the 1992 Cable Act and
the record in this proceeding in determining whether to expand the
cable home wiring rules in ways that could have competitive
implications for cable operators and other multichannel video
programming providers, as well as other providers of telecommunications
services. Given the potential for the convergence of telephone, data
and video technologies, it may be appropriate to consider requiring
cable operators to permit subscriber access to inside wiring prior to
termination of service in order to promote consumer choice and
competition. Parity with telephone inside wiring may also be desirable
if a cable operator wants to provide telephone or other common carrier
service over its coaxial cable, but the record in this proceeding does
not provide us with sufficient information upon which to base such a
determination. The Commission will therefore further explore this issue
in the Notice of Proposed Rulemaking (``NPRM'') in CS Docket No. 95-184
being adopted concurrently herewith.
7. In addition, we determine that our current rules (as well as our
revised rules described below) do not constitute an unconstitutional
taking, because they implement a clear statutory directive and provide
that, upon termination of service, the cable operator can receive just
compensation for its home wiring or
[[Page 6133]]
remove the wiring. Nor do we believe that our rules are rendered
unconstitutional by the fact that the cable operator is deemed to have
waived the availability of compensation if it fails to remove its home
wiring within a given time period following termination of service.
Compensation is available, under reasonable terms and conditions, if
the cable operator chooses to take that option. See United States v.
Locke, 471 U.S. 84, 107 (1985), which rejects a Fifth Amendment taking
claim where the plaintiff failed to comply with a statutory requirement
for filing a mining claim that would have indicated its intent to
retain its property right. Texaco, Inc. v. Short notes that the U.S.
Supreme Court has never required giving compensation to a private
property owner who fails to take reasonable actions imposed by law for
the consequences of his own neglect, 454 U.S. 516, 530 (1982). We note
that the prescribed time period (formerly 30 days and, as described
below, now seven business days) within which a cable operator may
remove the cable home wiring it owns provides the operator with a
reasonable opportunity to remove the wire if it so wishes.
8. With regard to NYNEX's contention that consumer access to cable
home wiring prior to termination of service would allow consumers to
obtain broadband services from more than one multichannel video
programming service provider simultaneously over one coaxial cable, it
is our understanding that, while such simultaneous use may be possible
in the laboratory, it is not technically or economically feasible in
the marketplace at the present time. Apparently, for example, broadband
networks are highly susceptible to signal impairments from outside
sources, such as over-the-air broadcast signals, a danger that would be
magnified significantly by the insertion of an additional broadband
service within the wiring itself. Therefore, we deny NYNEX's petition
as premature insofar as it seeks rules designed to allow simultaneous
use by a broadband video competitor of excess capacity on cable home
wiring. Furthermore, we note that the current cable wiring rules do not
prohibit simultaneous use, regardless of whether the cable operator or
the subscriber owns or controls the cable home wiring. Because we agree
that simultaneous use of the same wire by competitors could promote
competition and increase consumer choice, however, if simultaneous use
of cable wiring becomes economically and technically feasible, the
Commission may address any issues raised at that time.
B. Disposition of Cable Home Wiring Upon Termination of Service
1. Background
9. The Cable Wiring Order provides that when a subscriber calls to
voluntarily terminate cable service, the operator is required, if it
proposes to remove the wiring, to inform the subscriber (a) that he or
she may purchase the wire, and (b) what the cost per-foot charge is. If
the subscriber declines to purchase the home wiring, the operator must
remove it within 30 days or lose the right to remove it or restrict its
use.
2. Petitions
10. Some petitioners assert that cable operators may attempt to
deter subscribers from switching to alternative multichannel video
programming service providers by claiming that they intend to remove
the cable wiring even if they intend to abandon it. They posit that the
cable operator might falsely proclaim such an intent in order to
prevent an alternative provider from using the wiring during the 30-day
period afforded the operator to remove the wiring, and that since some
subscribers might elect to remain with the incumbent cable operator
rather than face such a choice, the current rules could defeat the
purpose behind Section 16(d).
11. WCA proposes that the Commission: (a) decrease the period
following termination during which cable operators must remove cable
home wiring from 30 days to seven days; (b) prohibit cable operators
from terminating service until either the cable is removed or the
seven-day period expires; and (c) establish procedures for the filing
of complaints against cable operators that demonstrate a pattern of
misrepresenting their intentions to remove wiring. Finally, WCA
suggests that the ``appointment window'' rules adopted in MM Docket No.
92-263 (Customer Service Standards) apply to appointments to remove
wiring, and that a failure to comply would result in the automatic
transfer of the wiring to the subscriber.
12. In response, some cable companies argue that WCA's claim that
operators will falsely state their intention to remove the wiring is
``speculative,'' and, even if true, would not warrant action on
reconsideration. They assert that WCA's concern that cable operators
will discriminate against customers who choose an alternative service
provider is unfounded because a cable operator cannot require any
subscriber to purchase his home wiring. Moreover, NCTA argues that
WCA's proposals are merely an attempt by alternative video programming
service providers to gain a ``free ride'' off wiring installed by and
belonging to the incumbent cable operator. As an alternative, NCTA
states that alternative providers could offer to purchase the wiring
from the incumbent operator, or at least offer to reimburse the
subscriber if the subscriber chooses to purchase the wiring.
13. In reply, WCA asserts that none of the responses addresses the
fundamental unfairness of permitting cable operators to discriminate
against subscribers who terminate service in favor of an alternative
service provider.
14. Ameritech proposes that ownership of cable home wiring should
transfer to the subscriber upon termination. Ameritech proposes that,
at a minimum, in cases of voluntary termination where a subscriber is
notified of the right to purchase his or her home wiring and the
subscriber exercises that right, constructive ownership should vest
with the subscriber immediately and the subscriber should be free to
authorize the connection of the wiring to a competing service provider.
3. Discussion
15. As we noted in the Cable Wiring Order, the purpose of Section
16(d) is to promote consumer choice and competition by permitting
subscribers to avoid the disruption of having their home wiring removed
upon voluntary termination, and to subsequently utilize that wiring for
an alternative video programming service. While we believe that our
current rules advance these goals, we believe that they do not address
certain issues--such as when actual control of the home wiring
transfers to the subscriber--that could cause needless consumer
confusion and marketplace uncertainty. We therefore believe that the
goals of Section 16(d) would be better served if our rules set forth a
simple, clear process by which: (a) consumers can obtain, in a single
contact, the information they need to decide whether they wish to
purchase their home wiring upon termination; (b) consumers can
thereafter quickly and easily use the wiring to connect to an
alternative video programming service provider; and (c) cable
operators' legitimate property rights are protected. Thus, we hereby
amend our rules regarding the disposition of home wiring upon the
voluntary termination of service as follows.
[[Page 6134]]
16. During the initial telephone call in which a subscriber advises
the cable operator that he or she is voluntarily terminating service,
the operator--if it owns and intends to remove the home wiring--must
inform the subscriber of four things:
(a) that the cable operator owns the home wiring--as discussed in
the Cable Wiring Order, the record reveals that, in many circumstances,
the subscriber already owns the home wiring at termination (e.g., where
the operator has charged the subscriber for the wiring upon
installation, has treated the wiring as belonging to the subscriber for
tax purposes, or where state and/or local law treats cable home wiring
as a fixture); it is the operator's responsibility to maintain adequate
records to document its ownership;
(b) that the cable operator intends to remove the home wiring;
(c) that the subscriber has a right to purchase the home wiring;
and
(d) what the per-foot replacement cost and total charge for the
wiring would be, including the replacement cost for any passive
splitters attached to the wiring on the subscriber's side of the
demarcation point--our current rules state that the operator must
inform the subscriber of the per-foot replacement cost, and that its
charge for the wiring may be based on ``a reasonable approximation'' of
the length of cabling in the subscriber's premises. In the Cable Wiring
Order (at n. 39), we stated that we expected the per foot charge to be
based on the replacement cost of coaxial cable in the community; for
instance, we noted that the record indicated that new coaxial cable was
being sold for six cents per foot by District Cablevision in
Washington, D.C. An operator has two options for making a ``reasonable
approximation'' of the total charge during the contact terminating
service. First, the operator can develop schedules to make such
approximations based on readily available information, such as whether
the subscriber lives in a single family dwelling or an apartment, the
number of outlets installed, or the number of television sets in use.
If the operator chooses to develop such schedules, it must place them
in a public file and make them available for public inspection during
regular business hours. In the alternative, the operator may maintain
records reflecting the actual amount of home wiring installed on
subscribers' premises, but this information must be available for
calculating the total charge for the wiring during the initial phone
call.
Where an operator fails to adhere to the above procedures, it will
be deemed to have relinquished immediately any and all ownership
interests in the home wiring; thus, the operator will not be entitled
to compensation for the wiring and may make no subsequent attempt to
remove it or restrict its use. By referring to ``subscriber'' herein,
we do not intend to prohibit a subscriber from delegating to an agent
the task of terminating service and authorizing the purchase of home
wiring on his or her behalf.
17. If a subscriber voluntarily terminates cable service in person
(i.e., at the cable operator's offices), the same procedures apply. If
a subscriber requests termination in writing, it is the operator's
responsibility--if it intends to remove the wiring--to make reasonable
efforts to contact the subscriber prior to the date of service
termination and provide the subscriber with the information set forth
above.
18. If the cable operator informs the subscriber as described
above, and, at that point, the subscriber agrees to purchase the
wiring, constructive ownership over the home wiring will transfer to
the subscriber immediately, and the subscriber will be permitted to
authorize a competing service provider to connect with and use the home
wiring. Of course, the alternative video programming service provider
is free to reimburse the subscriber for the cost of the home wiring. We
believe that such a transfer of control presents no Fifth Amendment
difficulties, since the operator will ultimately be compensated for its
wiring (at which point actual ownership of the wiring will transfer to
the subscriber). We are, however, cognizant of the potential for
harmful signal leakage if this change-over is mishandled. Thus, where
the incumbent cable operator has not yet terminated service and
``capped off'' its line, the alternative video programming service
provider will be responsible for ensuring that the incumbent's wiring
is properly capped off in accordance with the Commission's signal
leakage requirements. ``Capping off'' is a procedure whereby a
terminating ``cap'' is placed over a wire to prevent potentially
harmful signal leakage. If there is no alternative provider--i.e., if
the subscriber is terminating service but will not be using the home
wiring to receive another multichannel video service--the cable
operator will remain responsible for properly capping off its own line.
We require incumbent cable operators to take reasonable steps within
their control to ensure that the alternative service provider has
access to the home wiring at the demarcation point (e.g., by providing
prompt access to the cable operator's lockbox where the placement of
the lockbox impedes access to the demarcation point), and for
incumbents and alternative multichannel video programming delivery
service providers to minimize the potential for signal leakage, theft
of service and unnecessary disruption of the consumer's premises.
19. If, on the other hand, the subscriber declines to purchase the
home wiring, the operator will have seven business days, rather than
the current 30 days, to remove the wiring. If the operator does not
remove the home wiring within this seven business day period, the
operator may make no subsequent attempt to remove it or restrict its
use. We believe that requiring subscribers to wait 30 days before
learning whether the cable operator would remove its wiring causes
needless uncertainty for the consumer and the possibility of a lengthy
disruption in service. We also believe that, under normal operating
conditions, it is not unreasonable to require cable operators to remove
their wiring within seven business days. However, we decline at this
time to apply the Commission's ``appointment window'' rules to
appointments to remove wiring; we believe that WCA has not submitted
sufficient evidence to demonstrate that such a change is necessary at
this time. Given the uniform federal and industry standard on
installations, we reject Time Warner's contention that a seven-day
removal period is a forced, rather than a voluntary, abandonment of
property. It is the operator's failure to act within a reasonable time
after the subscriber requests that its wiring be removed--not the
Commission's rule--that extinguishes the cable operator's rights. We
also reject NCTA's assertion that a 30-day removal period is required
to ensure that consumers have adequate time to decide whether or not to
purchase the wiring. If the subscriber asks for more time to make a
decision on whether to purchase the home wiring, the seven business-day
period will not begin running until the subscriber declines to purchase
the wiring. Until the subscriber contacts the operator with a decision,
he or she may not use the wiring to connect to an alternative service
provider.
20. We believe that the above procedures may not be necessary in
most circumstances. We understand that cable operators typically
abandon cable home wiring because the cost and effort required to
remove it generally outweigh its value. Accordingly, in most cases, the
cable operator may simply remain silent on the subject of home wiring
when the subscriber requests termination of service. If, for whatever
reason, the cable operator does not
[[Page 6135]]
discuss the disposition of the home wiring with the subscriber in
accordance with the above procedures, the operator will be deemed to
have relinquished immediately any and all ownership interests in the
home wiring. Thus, the operator will not be entitled to compensation
for the wiring and may make no subsequent attempt to remove it or
restrict its use.
21. While we acknowledge WCA's concerns that cable operators could
misrepresent their intention to remove the wiring, or that operators
may discriminate against subscribers who terminate service in favor of
an alternative provider, there is no evidence in the record for us to
conclude that these are significant problems. Moreover, we believe we
have alleviated WCA's concern regarding subscribers being without
service for up to 30 days by requiring cable operators to remove the
home wiring within seven business days.
C. Demarcation Point for Multiple Dwelling Units With Non-Loop-Through
Wiring
1. Background
22. Section 16(d) of the 1992 Cable Act states that the Commission
shall prescribe rules concerning cable wire ``within the premises of
[the] subscriber.'' Section 76.5(ll) of the Commission's rules defines
cable home wiring as the ``internal wiring contained within the
premises of a subscriber which begins at the demarcation point.'' Under
the current rules, the demarcation point is the point from which the
customer has the right to purchase cable home wiring upon voluntary
termination of service, the location from which the subscriber may
control the internal home wiring if he or she owns it, and the point
where a potential alternative multichannel video programming service
provider can attach its wiring to the subscriber's wiring in order to
provide service.
23. The wiring in multiple dwelling unit buildings is generally in
either a non-loop-through or loop-through configuration. In a non-loop-
through configuration, each subscriber has a dedicated line extending
from a trunk or feeder line to the individual's premises. The point at
which the drop meets the feeder line in multiple dwelling unit
buildings is usually in a security box or utility closet. A loop-
through configuration is one in which a single cable provides service
to a group of subscribers by being strung from one subscriber's unit to
the next subscriber's unit in the same building.
2. Petitions
24. Some commenters ask that the Commission reconsider its decision
to locate the demarcation point for multiple dwelling units at or about
twelve inches outside of where the cable enters a subscriber's
individual dwelling unit. NYNEX states that the Commission's current
rules are anti-competitive because they require an alternative cable
service provider to install duplicate wire up to the twelve-inch point
outside of where the wire enters the subscriber's premises, which would
either be prohibitively expensive or impossible due to space
limitations or the location of the wiring inside a wall in a building.
Liberty asks that the demarcation point for multiple dwelling units be
at the point outside a subscriber's premises and within the common
areas of the multiple dwelling unit building where the individual
subscriber's wires can be detached from the cable operator's common
wires without harming the multiple dwelling unit and without
interfering with the cable operator's provision of service to other
residents in the building. Liberty contends that this would enhance
competition by making it easier for the subscriber to switch from one
alternative multichannel video programming service provider to another.
25. On the other hand, cable companies oppose proposals to change
the demarcation point for multiple dwelling units, arguing that the
proposals do not definitively measure the exact point of demarcation
and are contrary to the plain language of the statute. NCTA states that
allowing a new service provider to go much beyond twelve inches invades
the common wiring, which is the cable operator's property. Time Warner
recommends that the most practical demarcation point in multiple
dwelling units is the wall plate in each individual unit, not beyond
twelve inches from where the wiring enters the individual dwelling
unit.
3. Discussion
26. We deny reconsideration of our rule setting the demarcation
point for multiple dwelling units at or about twelve inches outside of
where the cable wire enters the subscriber's dwelling unit. While the
record in this proceeding does indicate that the Commission's current
rules with regard to location of the demarcation point in multiple
dwelling units may impede competition in the multichannel video
programming delivery marketplace, the record is insufficient at this
time to indicate whether a different demarcation point might better
promote competition and consumer choice in the multichannel video
programming delivery marketplace without an undue impact on competition
in the market for other telecommunications services. We are concerned
with more than simple competition in the broadband multichannel video
programming market. We want to promote competition and consumer choice
in all types of telecommunications markets through multiple
technologies and services. The Commission therefore must consider broad
telecommunications issues which extend beyond the 1992 Cable Act and
the record in this proceeding before modifying the cable home wiring
rules in ways that could have competitive implications for cable
operators and other telecommunications service providers. Accordingly,
while we deny reconsideration of our current definition of the cable
demarcation point for multiple dwelling unit buildings, we believe that
it would be appropriate to revisit this issue in a broader competitive
context. We are, therefore, requesting comment on this demarcation
point issue in our NPRM in CS Docket No. 95-184 being adopted
concurrently herewith. We expect to act quickly in the NPRM proceeding
to resolve the demarcation point issue.
D. Multiple Dwelling Unit Buildings With Loop-Through Wiring
1. Background
27. In a loop-through cable wiring system, a single cable is used
to provide service to either a portion of or an entire multiple
dwelling unit building. Every subscriber on the loop is limited to
receiving video services from the same provider; there is no capacity
for individual choice. In the Cable Wiring Order, the Commission
excluded multiple dwelling unit loop-through wiring from the cable home
wiring rules, reasoning that applying our rules to loop-through wiring
would give the building manager or the initial subscriber control over
cable service for all subscribers in the loop.
2. Petitions
28. Telephone companies ask that loop-through cable be included in
the home wiring rules and controlled by the multiple dwelling unit
building owner, and propose that the Commission require that loop-
through and other configurations based on common use of unpowered
coaxial cable be eliminated in all future multiple dwelling unit
installations of cable home wiring. In
[[Page 6136]]
addition, Bell Atlantic urges the Commission to bar exclusive contracts
between cable operators and the owners or managers of multiple dwelling
unit buildings, because such contracts allegedly circumvent the
Commission's cable home wiring rules and deny residents the ability to
choose between competing services. While the current record does not
contain sufficient evidence to bear out Bell Atlantic's assertions--and
thus we do not address them further here--the parties are free to raise
this issue in the context of the NPRM in CS Docket No. 95-184, adopted
concurrently herewith.
29. On the other hand, cable companies agree with the Commission's
exclusion of multiple dwelling unit building loop-through
configurations from the home wiring rules. Time Warner argues that the
frequent turnover of multiple dwelling unit residents makes inclusion
of loop-through multiple dwelling units impractical.
3. Discussion
30. On reconsideration, we continue to exclude loop-through wiring
from our cable home wiring rules. Inclusion of loop-through systems
within these rules would be impractical, in part because establishing a
separate demarcation point for each subscriber on a loop-through system
and deciding how much wiring each subscriber should have the option to
buy are not feasible. Furthermore, loop-through configurations, by
their nature, preclude individual subscriber control, an essential
element of the Commission's cable home wiring rules. Therefore, cable
operators are not required to offer to sell loop-through wiring to
subscribers upon termination of service, and no loop-through subscriber
has the right to purchase loop-through home wiring. We will, however,
consider and request comment in our Further Notice of Proposed
Rulemaking (``FNPRM'') published simultaneously in this issue regarding
Liberty's proposal that we allow the building owner to purchase the
home wiring when all of the subscribers on a loop simultaneously decide
to switch to an alternative video programming service provider. We will
also request comment on NYNEX's and USTA's proposal that we prohibit
future loop-through wiring installations and our authority, if any, to
do so.
E. Inclusion of Passive Splitters Within Cable Home Wiring
1. Background and Petitions
31. Section 76.5(ll) of the Commission's rules defines cable home
wiring as the internal wiring contained within the subscriber's
premises which begins at the demarcation point. The rule specifically
excludes from cable home wiring any active elements such as amplifiers,
converter or decoder boxes, or remote control units. In its petition
for reconsideration, Liberty asks the Commission to ``clarify that
cable home wiring includes passive ancillary equipment such as
splitters and conduits or molding in which the cable is installed.''
Liberty asserts that including such passive equipment within the
definition of cable home wiring will allow Liberty and other cable
competitors to avoid problems that arise when space constraints
prohibit the installation of multiple splitters or conduits to access
an individual subscriber's wires. Cable companies oppose this request,
contending that it was the specific intent of Congress to exclude any
cable equipment other than actual wiring. Time Warner further contends
that conduit and molding should be excluded from the Commission's
definition of cable home wiring because they are not cable equipment,
but rather the property of the premises owner. Time Warner states that,
at a minimum, splitters, which are passive cable equipment, should only
be considered part of the home wiring if located within, or up to
twelve inches outside the subscriber's premises.
2. Discussion
32. We grant Liberty's request that we include passive splitters
within the definition of cable home wiring. Because passive splitters
are a physically integral part of the home wiring, we believe that
their exclusion could frustrate the purposes behind Section 16(d) of
the 1992 Cable Act--i.e., to permit subscribers to avoid the disruption
of having their home wiring removed, and to subsequently utilize the
home wiring for an alternative video programming service. Therefore,
operators will be required to offer to sell to a terminating subscriber
any passive splitters attached to the home wiring on the subscriber's
side of the demarcation point, at no more than the replacement cost of
the splitters.
33. However, we deny Liberty's request that other passive equipment
be included within the cable home wiring definition. We believe that
molding and conduit are not necessarily cable equipment and are often
the property of the premises owner. In addition, we believe that,
considering the wide variety of passive equipment and related property,
it would be too burdensome to require cable operators to be prepared to
quote the replacement cost of such equipment and property upon the
subscriber's termination of service. Nevertheless, we understand
Liberty's concern that cable operators not be permitted to use their
ownership of other property relating to the cable home wiring to
frustrate the purposes of our cable home wiring rules and Section 16(d)
of the 1992 Cable Act. We will therefore prohibit cable operators from
using any ownership interests they have in property located on the
subscriber's side of the demarcation point, for example, cable molding
or conduit, to prevent, impede, or in any way interfere with, a
subscriber's right to use his or her home wiring to receive an
alternative service.
III. Regulatory Flexibility Analysis
34. Pursuant to the Regulatory Flexibility Act of 1980, 5 U.S.C.
601-612, the Commission's final analysis with respect to the First
Order on Reconsideration is as follows:
35. Need and Purpose of this Action. The Commission amends its
rules pertaining to cable home wiring to better effectuate the purposes
of Section 16(d) of the Cable Television Consumer Protection and
Competition Act of 1992, 47 U.S.C. 544(i) (1992).
36. Summary of Issues Raised by the Public in response to the
Initial Regulatory Flexibility Analysis. There were no comments
submitted in response to the Initial Regulatory Flexibility Analysis.
37. Significant Alternatives Considered and Rejected. Petitioners
representing cable interests and competitive video providers did not
submit comments regarding the administrative burden of the home wiring
rules.
IV. Procedural Provisions
38. Initial Paperwork Reduction Act of 1995 Analysis. This First
Order on Reconsideration contains either a proposed or modified
information collection. As part of our continuing effort to reduce
paperwork burdens, we invite the general public and the Office of
Management and Budget (``OMB'') to take this opportunity to comment on
the information collections contained in this Order as required by the
Paperwork Reduction Act of 1995, Pub. L. No. 104-13. Public and agency
comments are due at the same time as other comments on the FNPRM; OMB
comments are due 60 days from the date of publication of this Order in
the Federal Register. Comments should address: (a) whether the proposed
collection of information is necessary for the proper performance of
the functions of the Commission,
[[Page 6137]]
including whether the information shall have practical utility; (b) the
accuracy of the Commission's burden estimates; (c) ways to enhance the
quality, utility, and clarity of the information collected; and (d)
ways to minimize the burden of the collection of information on the
respondents, including the use of automated collection techniques or
other forms of information technology.
39. Ex parte Rules--Non-Restricted Proceeding. This is a non-
restricted notice and comment rulemaking proceeding. Ex parte
presentations are permitted, except during the Sunshine Agenda period,
provided that they are disclosed as provided in Commission's rules. See
generally 47 C.F.R. Secs. 1.1202, 1.1203, and 1.1206(a).
40. Written comments by the public on the proposed and/or modified
information collections are due March 18, 1996. Written comments must
be submitted by the Office of Management and Budget (OMB) on the
proposed and/or modified information collections on or before 60 days
after date of publication in the Federal Register. In addition to
filing comments with the Secretary, a copy of any comments on the
information collections contained herein should be submitted to Dorothy
Conway, Federal Communications Commission, Room 234, 1919 M Street,
N.W., Washington, DC 20554, or via the Internet to [email protected] and
to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725--17th Street, N.W.,
Washington, DC 20503 or via the Internet to [email protected].
V. Ordering Clauses
41. Accordingly, it is ordered that the Petitions for
Reconsideration in MM Docket No. 92-260 are granted in part and denied
in part, as provided above herein.
42. It is further ordered that Part 76 of the Commission's rules is
hereby amended as shown below, effective upon approval by the Office of
Management and Budget. The portions of the First Order on
Reconsideration imposing information collections will not go into
effect until approved by the Office of Management and Budget.
43. It is further ordered that the Secretary shall send a copy of
this First Order on Reconsideration to the Chief Counsel for Advocacy
of the Small Business Administration in accordance with paragraph
603(a) of the Regulatory Flexibility Act, Pub. L. No. 96-354, 94 Stat.
1164, 5 U.S.C. 601 et seq. (1981).
List of Subjects in 47 CFR Part 76
Cable television.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
Revised Rules
Part 76 of Title 47 of the Code of Federal Regulation is amended as
follows:
PART 76--CABLE TELEVISION SERVICE
1. The authority citation for Part 76 continues to read as follows:
Authority: Secs. 2, 3, 4, 301, 303, 307, 308, 309, 48 Stat., as
amended 1064, 1065, 1066, 1081, 1082, 1084, 1085, 1101; 47 U.S.C.
Sec. 152, 153, 154, 301, 303, 307, 308, 309; Secs. 612, 614-615,
623, 632 as amended, 106 Stat. 1460, 47 U.S.C. 532; Sec. 632, as
amended, 106 Stat. 1460; 47 U.S.C. 532, 533, 543, 552.
2. Section 76.5 is amended by revising paragraph (ll) to read as
follows:
Sec. 76.5 Definitions.
* * * * *
(ll) Cable home wiring. The internal wiring contained within the
premises of a subscriber which begins at the demarcation point. Cable
home wiring includes passive splitters on the subscriber's side of the
demarcation point, but does not include any active elements such as
amplifiers, converter or decoder boxes, or remote control units.
* * * * *
3. Section 76.802 is revised to read as follows:
Sec. 76.802 Disposition of cable home wiring.
(a) Upon voluntary termination of cable service by a subscriber, a
cable operator shall not remove the cable home wiring unless it gives
the subscriber the opportunity to purchase the wiring at the
replacement cost, and the subscriber declines. The cost is to be
determined based on the replacement cost per foot of the cable home
wiring multiplied by the length in feet of the cable home wiring, and
the replacement cost of any passive splitters located on the
subscriber's side of the demarcation point. If the subscriber declines
to acquire the cable home wiring, the cable system operator must then
remove it within seven (7) business days, under normal operating
conditions, or make no subsequent attempt to remove it or to restrict
its use.
(b) During the initial telephone call in which a subscriber
contacts a cable operator to voluntarily terminate cable service, the
cable operator--if it owns and intends to remove the home wiring--must
inform the subscriber:
(1) That the cable operator owns the home wiring;
(2) That the cable operator intends to remove the home wiring;
(3) That the subscriber has the right to purchase the home wiring;
and
(4) What the per-foot replacement cost and total charge for the
wiring would be (the total charge may be based on either the actual
length of cable wiring and the actual number of passive splitters on
the customer's side of the demarcation point, or a reasonable
approximation thereof; in either event, the information necessary for
calculating the total charge must be available for use during the
initial phone call).
(c) If the subscriber voluntarily terminates cable service in
person, the procedures set forth in paragraph (b) of this section
apply.
(d) If the subscriber requests termination of cable service in
writing, it is the operator's responsibility--if it wishes to remove
the wiring--to make reasonable efforts to contact the subscriber prior
to the date of service termination and follow the procedures set forth
in paragraph (b) of this section.
(e) If the cable operator fails to adhere to the procedures
described in paragraph (b) of this section, it will be deemed to have
relinquished immediately any and all ownership interests in the home
wiring; thus, the operator will not be entitled to compensation for the
wiring and shall make no subsequent attempt to remove it or restrict
its use.
(f) If the cable operator adheres to the procedures described in
paragraph (b) of this section, and, at that point, the subscriber
agrees to purchase the wiring, constructive ownership over the home
wiring will transfer to the subscriber immediately, and the subscriber
will be permitted to authorize a competing service provider to connect
with and use the home wiring.
(g) If the cable operator adheres to the procedures described in
paragraph (b) of this section, and the subscriber asks for more time to
make a decision regarding whether to purchase the home wiring, the
seven (7) business day period described in paragraph (b) of this
section will not begin running until the subscriber declines to
purchase the wiring; in addition, the subscriber may not use the wiring
to connect to an alternative service provider until the subscriber
notifies the operator whether or not the subscriber wishes to purchase
the wiring.
(h) If an alternative video programming service provider connects
its wiring to the home wiring before the incumbent cable operator has
terminated service and has capped off its line to prevent signal
leakage, the
[[Page 6138]]
alternative video programming service provider shall be responsible for
ensuring that the incumbent's wiring is properly capped off in
accordance with the Commission's signal leakage requirements. See
Subpart K (technical standards) of the Commission's Cable Television
Service rules (47 CFR 76.605(a)(13) and 76.610 through 76.617).
(i) Where the subscriber terminates cable service but will not be
using the home wiring to receive another alternative video programming
service, the cable operator shall properly cap off its own line in
accordance with the Commission's signal leakage requirements. See
Subpart K (technical standards) of the Commission's Cable Television
Service rules (47 CFR 76.605(a)(13) and 76.610 through 76.617).
(j) Cable operators are prohibited from using any ownership
interests they may have in property located on the subscriber's side of
the demarcation point, such as molding or conduit, to prevent, impede,
or in any way interfere with, a subscriber's right to use his or her
home wiring to receive an alternative service. In addition, incumbent
cable operators must take reasonable steps within their control to
ensure that an alternative service provider has access to the home
wiring at the demarcation point. Cable operators and alternative
multichannel video programming delivery service providers are required
to minimize the potential for signal leakage in accordance with the
guidelines set forth in 47 CFR 76.605(a)(13) and 76.610 through 76.617,
theft of service and unnecessary disruption of the consumer's premises.
(k) Definitions--Normal operating conditions--The term ``normal
operating conditions'' shall have the same meaning as at 47 CFR
76.309(c)(4)(ii).
[FR Doc. 96-3128 Filed 2-15-96; 8:45 am]
BILLING CODE 6712-01-P
Complete official Federal Register PDF
FR Doc. 96-3110 OperationsSuspicious Activity Reports and Other Reports and Statements
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Pages 6100-6106]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3110]
=======================================================================
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DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 563
[No. 96-6]
RIN 1550-AA62
Operations--Suspicious Activity Reports and Other Reports and
Statements
AGENCY: Office of Thrift Supervision, Treasury.
[[Page 6101]]
ACTION: Final rule.
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SUMMARY: The Office of Thrift Supervision (OTS) is amending its
regulations that require savings associations and service corporations
to file criminal referral and suspicious transaction reports. This
final rule streamlines reporting requirements by providing that savings
associations and service corporations file a new Suspicious Activity
Report (SAR) with the OTS and the appropriate federal law enforcement
agencies by sending SARs to the Financial Crimes Enforcement Network of
the Department of the Treasury (FinCEN) to report a known or suspected
criminal offense or a transaction that an institution suspects involves
money laundering or violates the Bank Secrecy Act (BSA).
EFFECTIVE DATE: April 1, 1996.
FOR FURTHER INFORMATION CONTACT: Richard Stearns, Deputy Chief Counsel,
Enforcement Division, (202) 906-7966, or Gary Sutton, Counsel (Banking
and Finance), Regulations and Legislation Division, (202) 906-5761,
Chief Counsel's Office; or Francis Raue, Policy Analyst, Supervision
Policy, (202) 906-5750, Office of Thrift Supervision, 1700 G Street,
NW., Washington DC 20552.
SUPPLEMENTARY INFORMATION:
Background
The OTS, the Office of the Comptroller of the Currency (OCC), the
Board of Governors of the Federal Reserve System (FRB) and the Federal
Deposit Insurance Corporation (FDIC) (collectively, the Agencies)
issued for public comment substantially similar proposals to revise
their regulations on the reporting of known or suspected criminal
conduct and suspicious activities by the institutions under their
supervision.1 The Department of the Treasury, through FinCEN,
issued for public comment a substantially similar proposal to require
the reporting of suspicious activities.2
\1\ 60 FR 36366 (July 17, 1995) (OTS), 60 FR 34476 (July 3,
1995) (OCC), 60 FR 34481 (July 3, 1995) (FRB) and 60 FR 47719
(September 14, 1995)(FDIC).
\2\ 60 FR 46556 (September 7, 1995).
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The OTS's proposed regulation noted that the interagency Bank Fraud
Working Group, consisting of representatives from the Agencies, law
enforcement agencies, and FinCEN, has been working on the development
of a single form, the SAR, for the reporting of known or suspected
federal criminal law violations and transactions that an institution
suspects involve money laundering or violate the BSA. The new SAR
reporting system will: (1) Combine the current criminal referral rules
of the Agencies with the Department of the Treasury's suspicious
activity reporting requirements; (2) create a uniform reporting form,
the new SAR, for use by financial institutions in reporting known or
suspected criminal offenses and transactions that an institution
suspects involve money laundering or violate the BSA; (3) provide a
system whereby an institution need only refer to the SAR and its
instructions in order to complete and file the form in conformance with
the Agencies' and FinCEN's reporting regulations; (4) require the
filing of only one form with FinCEN; (5) eliminate the need to file
supporting documentation with a SAR; (6) enable a filer, through
computer software that the OTS will provide to all savings
associations, to prepare a SAR on a computer and file it by mailing a
computer disc or tape; (7) establish a database that will be accessible
to the Federal and state financial institutions regulators and law
enforcement agencies; (8) raise the thresholds for mandatory reporting
in two categories and create a threshold for the reporting of
transactions that an institution suspects involve money laundering or
violate the BSA in order to reduce the reporting burdens on banking
organizations; and (9) emphasize recent changes in the law that provide
a safe harbor from civil liability to financial institutions and their
employees when they report known or suspected criminal offenses or
suspicious activities, by filing a SAR or by reporting by other means,
and that provide criminal sanctions for the disclosure of such a report
to any party involved in the reported transaction.
Comments Received
The OTS received letters from eight commenters, including four
savings associations, two holding companies, one trade association and
one law firm. We have also considered comments received by the other
Agencies. The large majority of commenters expressed general support
for the proposal. None of the commenters opposed the proposed new
suspicious activity reporting rules, although, as discussed below, a
number of commenters made suggestions for improving the rule and
requests for clarification.
Description of the Final Rule and Responses to Comments Received
After consideration of the public comments received, the Agencies
are each promulgating a substantially identical final rule regarding
the filing of SARs. Under the OTS's final rule, savings associations
and service corporations need only follow the SAR instructions for
completing and filing the SAR to be in compliance with the OTS's and
FinCEN's reporting requirements.
This final rule adopts the proposal with a few additional changes
made in response to the comments received. The final rule makes several
changes that reduce unnecessary regulatory burden in addition to those
that were proposed. In particular, the final rule further reduces
burden by: (1) Adding a $5,000 threshold for reporting transactions
that an institution suspects involve money laundering or violate the
BSA; (2) eliminating the requirement that an institution report a
transaction that is ``suspicious for any reason'' by modifying the
description of the types of suspicious activity that must be reported;
(3) reducing the record retention period from ten years to five; and
(4) permitting an institution to maintain the business record
equivalent of a document rather than requiring that it maintain the
original.
Section-by-Section Discussion
Purpose and scope (Sec. 563.180(d)(1))
The proposal clarified the scope of the current rule. The OTS
received no comments on this paragraph, which is adopted as proposed.
Definitions (Sec. 563.180(d)(2))
The proposal added definitions for several terms used in the
operative provisions of the rule. The OTS received one comment on this
provision. The commenter argued that the use of the term ``institution-
affiliated party'' instead of ``affiliated person'' creates too broad a
coverage for the rule, and will result in the requirement that SARs
must be filed with respect to petty crimes by officers below the level
of vice president and non-officer employees. The OTS has considered
this comment and believes that the broader coverage is appropriate,
given the possibility that even petty crimes, if repetitive, may
require enforcement action. The definition of ``known or suspected
violation'' in the proposal has been incorporated into each of the
reporting requirement provisions in Sec. 563.180(d)(3) to conform the
rule to that of the other Agencies. This section is otherwise adopted
as proposed, with minor technical changes.
SARs required (Sec. 563.180(d)(3))
The proposal clarified and revised the provision in the current
rule that requires an institution to file reports, raised the dollar
thresholds that trigger filing requirements, modified the scope of
events that an institution must report,
[[Page 6102]]
and eliminated the requirement for multiple filings with several
Federal agencies.
Most of the comments received by the Agencies addressed this
provision. Many of the commenters encouraged the Agencies to change
proposed Sec. 563.180(d)(3)(iv)(C), which required institutions to
report all financial transactions that are suspicious ``for any
reason.'' The commenters stated that this language was too broad and
made meaningless the $5,000 reporting threshold of
Sec. 563.180(d)(3)(ii) (requiring institutions to report suspected
crimes committed by an identifiable suspect) and the $25,000 reporting
threshold of Sec. 563.180(d)(3)(iii) (requiring institutions to report
suspected crimes for which no suspect is identified). They asserted
that requiring institutions to report all financial transactions that
are suspicious for any reason required them to report transactions that
would otherwise fall under the appropriate threshold and therefore be
exempt from the reporting requirement. Several commenters also
encouraged the Agencies to adopt a threshold for reporting transactions
that are suspicious.
The OTS and the other Agencies agree with the concerns expressed by
these commenters. Section 563.180(d)(3)(iv) has been substantially
revised to add a $5,000 reporting threshold for transactions that are
suspicious and to clarify that this provision of the rule requires an
institution to report only transactions that it suspects involve money
laundering or violations of the BSA. Under the final rule, a savings
association or service corporation must file a SAR for any transaction
of $5,000 or more if it knows, suspects, or has reason to suspect that
the transaction: (A) involves money laundering; (B) is designed to
evade any regulations promulgated under the BSA; or (C) has no business
or apparent lawful purpose or is not the sort in which the particular
customer would normally be expected to engage, and the institution
knows of no reasonable explanation for the transaction after examining
the available facts, including the background and possible purpose of
the transaction. For purposes of Sec. 563.180(d)(3)(iv), the term
``transaction'' means a deposit, withdrawal, transfer between accounts,
exchange of currency, loan, extension of credit, or purchase or sale of
any stock, bond, certificate of deposit, or other monetary instrument
or investment security, or any other payment, transfer, or delivery by,
through or to a financial institution, by whatever means effected. The
text of this section recognizes that efforts to deter, substantially
reduce, and eventually eradicate money laundering are greatly assisted
when institutions report transactions that they suspect may involve
money laundering or violate the BSA. The requirements of this section
comply with the recommendations adopted by multi-country organizations
in which the United States is an active participant, including the
Financial Action Task Force of the G-7 nations and the Organization of
American States, and are consistent with the European Community's
directive on preventing money laundering through financial
institutions.
A few commenters encouraged the Agencies to raise the dollar
thresholds for known or suspected criminal conduct by non-insiders, and
several commenters urged the Agencies to establish a dollar threshold
for insiders. The OTS has considered these comments, but has concluded
that the thresholds, as proposed, properly balance the dual concerns of
prosecuting criminal activity involving savings associations and
service corporations and minimizing the burden on such institutions.
With respect to the suggestion that the OTS adopt a dollar threshold
for insider violations, the OTS notes that insider abuse has long been
a key concern and focus of enforcement efforts. With the development of
a new sophisticated and automated database, the OTS and law enforcement
agencies will have the benefit of a comprehensive and easily accessible
catalogue of known or suspected insider wrongdoing. When insiders are
involved, even small-scale offenses--for example, repetitive thefts of
small amounts of cash by an employee who frequently moves between
banking organizations--may undermine the integrity of such
organizations and warrant enforcement action or criminal prosecution.
Therefore, the OTS does not wish to limit the information it receives
regarding insider wrongdoing.
One commenter suggested an indexed threshold, based on the regional
differences in the various dollar thresholds below which the Federal,
state, and local prosecutors generally decline prosecution. Any
regional variations in the dollar amount of financial crimes generally
prosecuted involve issues pertaining to the exercise of prosecutorial
discretion that are not within the OTS's province to resolve. The OTS's
objective is to ensure that institutions place the relevant information
in the hands of the investigating and prosecuting authorities. In the
OTS's view, the dollar thresholds proposed and adopted in this final
rule best balance the interests of law enforcement authorities and
financial institutions. The OTS also believes that indexed thresholds
could generate additional regulatory burden for institutions by
creating a standard that is unclear and confusing.
One commenter noted that the OTS and OCC proposals keyed the
reporting thresholds to the amount of loss or potential loss to the
institution (which is the standard used in the OTS's current rule),
while the FRB keyed its reporting thresholds to events that ``involve
or aggregate'' more than the appropriate threshold. The commenter urged
all Agencies to use the proposed OTS and OCC standard. Upon further
consideration, the OTS believes that the standard used in the FRB's
proposal provides greater predictability in determining when to file a
SAR because the amount of loss or potential loss may differ from the
actual sum involved in the event and may be difficult to calculate in
many instances. The OTS believes that, were the Agencies to rely on the
amount of loss or potential loss, an institution might consider the
potential for recovery of funds to estimate loss. Instead, to avoid
potential uncertainty, the final rule conforms to the FRB's proposal
and requires an institution to file SARs whenever it detects a known or
suspected Federal criminal violation, or pattern of criminal
violations, committed or attempted against it or involving a
transaction conducted through it that involves or aggregates more than
the appropriate threshold.
One commenter expressed the concern that a banking organization
would need to establish probable cause before reporting crimes for
which an essential element of the proof of the crime was the intent of
the actor. This is not the case, however. Nothing in the rule requires
that savings associations assume the burden of proving illegal conduct;
rather, institutions are required only to report actual or suspected
crimes or suspicious activities for possible action by the appropriate
authorities.
One commenter requested clarification of whether the proposal
required an institution to file multiple SARs for a crime committed by
several individuals, multiple crimes by the same individual, or related
crimes committed by more than one individual. Financial institutions
should complete one SAR to describe a suspected or known criminal
offense committed by several individuals. The instructions to the SAR
permit institutions to report additional suspects by means of a
supplemental page. An institution
[[Page 6103]]
should file a separate SAR whenever an individual commits a suspected
or known crime. If the same individual commits multiple or related
crimes within the same reporting period, the institution may consider
reporting the crimes on one SAR if doing so will present clearly what
has occurred.
Savings associations and service corporations are encouraged to
file the SAR via magnetic media using the computer software to be
provided to them by the OTS. Savings associations and service
corporations that currently file currency transaction reports via
magnetic tape with FinCEN may also file SARs by magnetic tape. FinCEN
has advised the Agencies that it will be unable to accept filings via
telecopier.
Service corporations (Sec. 563.180(d)(4))
The proposal retained the current provision permitting a report
required of a service corporation to be filed by the service
corporation or by a savings association which wholly or partially owns
it. No comments addressed this provision and it is unchanged in the
final rule.
Time for reporting (Sec. 563.180(d)(5))
Proposed Sec. 563.180(d)(5) substantially modified the current
requirements with respect to the timing of the reporting of known or
suspected criminal offenses and transactions that an institution
suspects involve money laundering or violate the BSA. It required an
institution to file a SAR within 30 calendar days after detecting the
act triggering the reporting requirement, provided that if no suspect
is identified at such time, the institution may delay filing for an
additional 30 days after identification of a suspect, but filing may
not be delayed for more than 60 days after initial detection.
Several commenters requested that the Agencies clarify the
application of the filing deadline for SARs when no suspect is
identified at the initial detection of the suspicious activity, the
amount of the transaction is less than the applicable $25,000 mandatory
reporting threshold, and the institution later identifies a suspect.
For example, some commenters wondered if they would be in violation of
the rule if a suspect were identified after 60 days had passed.
These comments reflect a misunderstanding of how the filing
requirements operate. The time period for reporting commences only at
the point in time when an institution identifies a potential violation
that fits within the thresholds. Therefore, if an institution uncovers
a transaction involving less than $25,000 (but more than $5,000), but
does not identify a potential suspect until after the passage of 60
days, the 30-day period for filing a SAR would begin to run only when
the suspect is identified. To make this point clear, the final rule
inserts the word ``reportable'' and states that in no case shall
reporting be delayed more than 60 calendar days after the date of
initial detection of a reportable transaction, i.e., a transaction that
must be reported because the amount involved is greater than the
appropriate reporting threshold. OTS has also reorganized this
paragraph, to conform with the other Agencies' rules.
Section 563.180(d)(5) also requires an institution to notify law
enforcement authorities immediately in the event of an on-going
violation. The OTS wishes to clarify that immediate notification is
limited to situations involving ongoing violations, for example, when a
check kite or money laundering has been detected and may be continuing.
It is not feasible, however, for the OTS to contemplate all of the
possible circumstances in which it might be appropriate for a savings
association or service corporation to immediately advise state and
local law enforcement authorities. Savings associations and service
corporations should use their best judgment regarding when to alert
these authorities regarding on-going criminal offenses or suspicious
activities that involve money laundering or violate the BSA.
Reports to state and local authorities (Sec. 563.180(d)(6))
The proposal encouraged savings associations and service
corporations to file SARs with state and local law enforcement agencies
when appropriate. Some commenters expressed the concerns that banking
organizations and their institution-affiliated parties could be liable
under Federal and state laws, such as the Right to Financial Privacy
Act (12 U.S.C. 3401 et seq.)(RFPA), for filing SARs with respect to
conduct that is later found not to have been criminal, and that the
filing of SARs with state and local law enforcement agencies would
subject filers to claims under state law. Both of these concerns are
addressed by the scope of the safe harbor protection provided in 31
U.S.C. 5318(g) and, as discussed below, stated in new
Sec. 563.180(d)(13).
Exception (Sec. 563.180(d)(7))
Proposed Sec. 563.180(d)(8), which set forth one exception to the
SAR filing requirement, did not substantively change its predecessor
provision. The OTS received no comments on this section and adopts it
as proposed. The final rule, however, reverses the order of proposed
paragraphs (d)(7) and (d)(8) and changes the caption of proposed
paragraph (d)(8) from ``exemption'' to ``exception'', to conform with
the other Agencies' rules.
Retention of records (Sec. 563.180(d)(8))
The proposal required an institution to retain a copy of the SAR
and the original of any underlying documentation relating to the SAR
for ten years. Many commenters expressed the view that the 10-year
period for the retention of records was excessive, especially in light
of the BSA's five-year record retention requirement, and recommended
that the Agencies reduce the period to five years. The 10-year period
in the proposed regulation would have continued the OTS's existing
record retention requirement for criminal referral forms. However, in
recognition of the potential burden of document retention on financial
institutions, the OTS has reduced the record retention period to five
years.
Many commenters asserted that the provision that required
institutions to disclose supporting documentation to law enforcement
agencies upon their request was either unclear or posed potential RFPA
liability. Some therefore questioned whether law enforcement agencies
would still need to subpoena relevant documents from a savings
association or service corporation. The final regulation requires
organizations filing SARs to identify, maintain and treat the
documentation supporting the report as if it were actually filed with
the SAR. This means that subsequent requests from law enforcement
authorities for the supporting documentation relating to a particular
SAR do not require the service of a subpoena or other legal process
normally associated with the provision of information to law
enforcement agencies. This treatment of supporting documentation is not
a substantive change from the current rule's requirement that
supporting documentation be filed with each referral, since it only
changes the timing of when an agency will have access to the supporting
documentation, not the fact that the information is assembled and made
available for law enforcement purposes. The Agencies therefore believe
that the final rule's treatment does not give rise to RFPA liability.
Proposed Sec. 563.180(d)(7) required the maintenance of supporting
documentation in its original form. A number of comments noted that
electronic storage of documents has become the rule rather than the
exception, and that requiring the storage
[[Page 6104]]
of paper originals would impose undue burdens on financial
institutions. Moreover, some records are retained only in a computer
database. The proposed regulation reflected the concerns of the law
enforcement agencies that the best evidence be preserved. However, this
can include the electronic storage of original documentation related to
the filing of a SAR. The OTS recognizes that a savings association or
service corporation will not always have custody of the originals of
documents and that some documents will not exist at the organization in
paper form. In those cases, preservation of the best available
evidentiary documents, for example, computer discs or photocopies, will
be acceptable. This has been reflected in the final rule by allowing
institutions to retain business record equivalents of supporting
documentation.
Several commenters criticized as inconsistent and vague the
proposed requirements that an institution maintain ``related''
documentation and make ``supporting'' documentation available to the
law enforcement agencies upon request. One commenter questioned whether
the OTS intended a substantive difference in meaning between these
terms. As a substantive difference is not intended, the OTS has
referred to ``supporting'' documentation in the final rule in stating
both the maintenance and production requirements. The OTS believes that
the use of the word ``supporting'' is more precise and limits the scope
of the information which must be segregated and retained to information
that would be relevant in proving the crime and identifying the
individuals involved. The OTS expects that savings associations and
service corporations will use their best judgment in determining the
scope of the information to be retained. It is not feasible for the OTS
to catalogue the precise types of information covered by this
requirement, because the scope necessarily depends upon the facts of a
particular case.
Notification to the board of directors (Sec. 563.180(d)(9))
The proposal reduced the burden on boards of directors to review
criminal referrals by allowing the management of an institution to
notify either the board of directors or a committee of directors or
executive officers designated by the board to receive notice of the
filing of a SAR. The proposal prohibited a savings association or
service corporation from giving notice of a SAR filing to any director
or officer who is a suspect with regard to such filing. The proposal
also required management to notify all directors, except the suspect,
when an executive officer or director is a suspect.
Most commenters supported this provision of the proposal. One
commenter, however, questioned whether the provision that required
prompt notification of the board of directors required notice prior to
the next board meeting. This commenter said that a requirement to
provide notice between board meetings would be more burdensome than the
current rule, which requires notification not later than the next board
meeting.
The OTS did not intend this change to be more burdensome than the
current rule and does not construe the requirement for prompt
notification to mean that notice must necessarily be provided before
the next board meeting. The final rule is intended to be flexible. For
example, the OTS expects that, with respect to serious crimes, the
appointed committee may consider it appropriate to make more immediate
disclosure to the full board. The final rule does not dictate the
content of the board or committee notification, and, in some cases,
such as when relatively minor non-insider crimes are to be reported, it
may be completely appropriate to provide only a summary listing of SARs
filed.
Compliance (Sec. 563.180(d)(10))
The proposal included a new provision stating that the failure to
file a SAR in accordance with the regulation and instructions may
result in supervisory actions, including enforcement actions. The OTS
received no comments on this section and adopts it as proposed.
Obtaining SARs (Sec. 563.180(d)(11))
The proposal added Sec. 563.180(d)(11), which provides savings
associations and service corporations with information on how to obtain
SARs. The OTS received no comments on this section and adopts it as
proposed.
Confidentiality of SARs (Sec. 563.180(d)(12))
The proposal contained a new provision preserving the confidential
nature of SARs and the information contained in SARs. One commenter
correctly noted that the proposed regulation is unclear as to whether
the confidential treatment applies only to the information contained on
the SAR itself, or also extends to the ``supporting'' documentation.
The OTS takes the position that only the SAR and the information on the
SAR are confidential under 31 U.S.C. 5318(g). However, as stated below
in the discussion of new Sec. 563.180(d)(13), the safe harbor
provisions of 31 U.S.C. 5318(g) for disclosure of information to law
enforcement agencies apply to both SARs and the supporting
documentation.
The OTS was encouraged to adopt regulations that would make SARs
undiscoverable in civil litigation, in order to avoid situations in
which a savings association or service corporation could be ordered by
a court to produce a SAR in civil litigation and could be confronted
with the prospect of having to choose between being found in contempt
or violating the OTS's rules. In the opinion of the OTS, 31 U.S.C.
5318(g) precludes the disclosure of SARs in discovery.3 However,
the final rule requires an institution that receives a subpoena or
other request for a SAR to notify the OTS so that the OTS can take
appropriate action. This notification requirement is consistent with 12
CFR 510.5.
\3\ Section 5318(g)(2) prohibits financial institutions and
directors, officers, employees, or agents of financial institutions
from notifying any person involved in a suspicious transaction that
the transaction has been reported.
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Safe harbor (Sec. 563.180(d)(13))
Several commenters expressed concern that disclosure of SARs and
supporting documentation to law enforcement agencies could give rise to
potential RFPA liability. In particular, the commenters questioned the
permissibility of filing SARs with state agencies or in situations in
which the amount of a transaction falls below the appropriate minimum
threshold for the known or suspected criminal conduct, or when a
transaction involving money laundering or the BSA does not meet the
requisite standards or thresholds. Commenters questioned the
applicability of the safe harbor provisions of 31 U.S.C. 5318(g) to
mandatory and voluntary filings alike.4
\4\ Section 5318(g)(3) states that a financial institution will
not be held liable to any person under any law or regulation of the
United States or any constitution, law, or regulation of any state
for making a disclosure of any possible violation of law or
regulation.
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The Agencies are of the opinion that the broad safe harbor
protections of 31 U.S.C. 5318(g)(3) include the reporting of known or
suspected criminal offenses or suspicious activities with state and
local law enforcement authorities, as well as with the Agencies and
FinCEN, regardless of whether such reports are filed pursuant to the
mandatory requirements of the OTS's regulations or are voluntary. The
OTS takes the same position with regard to the disclosure of
[[Page 6105]]
supporting documentation. The final rule adds new Sec. 563.180(d)(13),
which states this position.
Comments on information sharing
Comments to other Agencies suggested that the final regulations
should somehow facilitate the sharing of information among banking
organizations in order to better detect new fraudulent schemes. It is
anticipated that the Treasury Department, through FinCEN, and the
Agencies, will keep reporting entities apprised of recent developments
and trends in banking-related crimes through periodic pronouncements,
meetings, and seminars.
Regulatory Flexibility Act
Pursuant to section 605(b) of the Regulatory Flexibility Act, the
OTS hereby certifies that this final rule will not have a significant
economic impact on a substantial number of small entities. This final
rule primarily reorganizes the process for reporting crimes and
suspicious activities and has no material impact on savings
associations and service corporations, regardless of size. Accordingly,
a regulatory flexibility analysis is not required.
Executive Order 12866
The OTS has determined that this document is not a significant
regulatory action under Executive Order 12866.
Paperwork Reduction Act
The reporting and recordkeeping requirements contained in this
final rule were submitted to the Office of Management and Budget for
review at the proposed rule stage in accordance with the Paperwork
Reduction Act of 1995 (PRA) and were approved. Comments on the
collection of information should be sent to the Office of Management
and Budget (OMB), Paperwork Reduction Project (1550-0003), Washington,
DC 20503, with copies to the Office of Thrift Supervision, 1700 G
Street, NW., Washington, DC 20552.
The reporting and recordkeeping requirements in this final rule are
found in 12 CFR 563.180(d). The collection of information is necessary
for the proper performance of the OTS's functions and the information
has practical utility. The information is needed to inform appropriate
law enforcement agencies of known or suspected criminal or suspicious
activities that take place at or were perpetrated against financial
institutions.
The Unfunded Mandates Reform Act of 1995
The OTS has determined that this final rule will not result in
expenditure by State, local, or tribal governments or by the private
sector of more than $100 million. Accordingly, the Unfunded Mandates
Reform Act does not apply.
List of Subjects in 12 CFR Part 563
Accounting, Advertising, Crime, Currency, Flood insurance,
Investments, Reporting and recordkeeping requirements, Savings
associations, Securities, Surety bonds.
Authority and Issuance
For the reasons set out in the preamble, part 563 of chapter V of
title 12 of the Code of Federal Regulations is amended as set forth
below:
PART 563--OPERATIONS
1. The authority citation for part 563 is revised to read as
follows:
Authority: 12 U.S.C. 375b, 1462, 1462a, 1463, 1464, 1467a, 1468,
1817, 1828, 3806; 31 U.S.C. 5318; 42 U.S.C. 4012a, 4104a, 4104b,
4106, 4128.
2. Section 563.180 is amended by revising the section heading and
paragraph (d) to read as follows:
Sec. 563.180 Suspicious Activity Reports and other reports and
statements.
* * * * *
(d) Suspicious Activity Reports--(1) Purpose and scope. This
paragraph (d) ensures that savings associations and service
corporations file a Suspicious Activity Report when they detect a known
or suspected violation of Federal law or a suspicious transaction
related to a money laundering activity or a violation of the Bank
Secrecy Act.
(2) Definitions. For the purposes of this paragraph (d):
(i) FinCEN means the Financial Crimes Enforcement Network of the
Department of the Treasury.
(ii) Institution-affiliated party means any institution-affiliated
party as that term is defined in sections 3(u) and 8(b)(9) of the
Federal Deposit Insurance Act (12 U.S.C. 1813(u) and 1818(b)(9)).
(iii) SAR means a Suspicious Activity Report on the form prescribed
by the OTS.
(3) SARs required. A savings association or service corporation
shall file a SAR with the appropriate Federal law enforcement agencies
and the Department of the Treasury in accordance with the form's
instructions, by sending a completed SAR to FinCEN in the following
circumstances:
(i) Insider abuse involving any amount. Whenever the savings
association or service corporation detects any known or suspected
Federal criminal violation, or pattern of criminal violations,
committed or attempted against the savings association or service
corporation or involving a transaction or transactions conducted
through the savings association or service corporation, where the
savings association or service corporation believes that it was either
an actual or potential victim of a criminal violation, or series of
criminal violations, or that it was used to facilitate a criminal
transaction, and it has a substantial basis for identifying one of its
directors, officers, employees, agents or other institution-affiliated
parties as having committed or aided in the commission of a criminal
act, regardless of the amount involved in the violation.
(ii) Violations aggregating $5,000 or more where a suspect can be
identified. Whenever the savings association or service corporation
detects any known or suspected Federal criminal violation, or pattern
of criminal violations, committed or attempted against the savings
association or service corporation or involving a transaction or
transactions conducted through the savings association or service
corporation and involving or aggregating $5,000 or more in funds or
other assets, where the savings association or service corporation
believes that it was either an actual or potential victim of a criminal
violation or series of criminal violations, or that it was used to
facilitate a criminal transaction, and it has a substantial basis for
identifying a possible suspect or group of suspects. If it is
determined prior to filing this report that the identified suspect or
group of suspects has used an alias, then information regarding the
true identity of the suspect or group of suspects, as well as alias
identifiers, such as drivers' license or social security numbers,
addresses and telephone numbers, must be reported.
(iii) Violations aggregating $25,000 or more regardless of
potential suspects. Whenever the savings association or service
corporation detects any known or suspected Federal criminal violation,
or pattern of criminal violations, committed or attempted against the
savings association or service corporation or involving a transaction
or transactions conducted through the savings association or service
corporation and involving or aggregating $25,000 or more in funds or
other assets, where the savings association or service corporation
believes that it was either an actual or potential victim of a criminal
violation or series of criminal violations, or that it was used to
[[Page 6106]]
facilitate a criminal transaction, even though there is no substantial
basis for identifying a possible suspect or group of suspects.
(iv) Transactions aggregating $5,000 or more that involve potential
money laundering or violations of the Bank Secrecy Act. Any transaction
(which for purposes of this paragraph (d)(3)(iv) means 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 or investment security, or any
other payment, transfer, or delivery by, through, or to a financial
institution, by whatever means effected) conducted or attempted by, at
or through the savings association or service corporation and involving
or aggregating $5,000 or more in funds or other assets, if the savings
association or service corporation knows, suspects, or has reason to
suspect that:
(A) The transaction involves funds derived from illegal activities
or is intended or conducted in order to hide or disguise funds or
assets derived from illegal activities (including, without limitation,
the ownership, nature, source, location, or control of such funds or
assets) as part of a plan to violate or evade any law or regulation or
to avoid any transaction reporting requirement under Federal law;
(B) The transaction is designed to evade any regulations
promulgated under the Bank Secrecy Act; or
(C) The transaction has no business or apparent lawful purpose or
is not the sort in which the particular customer would normally be
expected to engage, and the institution knows of no reasonable
explanation for the transaction after examining the available facts,
including the background and possible purpose of the transaction.
(4) Service corporations. When a service corporation is required to
file a SAR under paragraph (d)(3) of this section, either the service
corporation or a savings association that wholly or partially owns the
service corporation may file the SAR.
(5) Time for reporting. A savings association or service
corporation is required to file a SAR no later than 30 calendar days
after the date of initial detection of facts that may constitute a
basis for filing a SAR. If no suspect was identified on the date of
detection of the incident requiring the filing, a savings association
or service corporation may delay filing a SAR for an additional 30
calendar days to identify a suspect. In no case shall reporting be
delayed more than 60 calendar days after the date of initial detection
of a reportable transaction. In situations involving violations
requiring immediate attention, such as when a reportable violation is
ongoing, the savings association or service corporation shall
immediately notify, by telephone, an appropriate law enforcement
authority and the OTS in addition to filing a timely SAR.
(6) Reports to state and local authorities. A savings association
or service corporation is encouraged to file a copy of the SAR with
state and local law enforcement agencies where appropriate.
(7) Exception. A savings association or service corporation need
not file a SAR for a robbery or burglary committed or attempted that is
reported to appropriate law enforcement authorities.
(8) Retention of records. A savings association or service
corporation shall maintain a copy of any SAR filed and the original or
business record equivalent of any supporting documentation for a period
of five years from the date of the filing of the SAR. Supporting
documentation shall be identified and maintained by the savings
association or service corporation as such, and shall be deemed to have
been filed with the SAR. A savings association or service corporation
shall make all supporting documentation available to appropriate law
enforcement agencies upon request.
(9) Notification to board of directors--(i) Generally. Whenever a
savings association (or a service corporation in which the savings
association has an ownership interest) files a SAR pursuant to this
paragraph (d), the management of the savings association or service
corporation shall promptly notify its board of directors, or a
committee of directors or executive officers designated by the board of
directors to receive notice.
(ii) Suspect is a director or executive officer. If the savings
association or service corporation files a SAR pursuant to this
paragraph (d) and the suspect is a director or executive officer, the
savings association or service corporation may not notify the suspect,
pursuant to 31 U.S.C. 5318(g)(2), but shall notify all directors who
are not suspects.
(10) Compliance. Failure to file a SAR in accordance with this
section and the instructions may subject the savings association or
service corporation, its directors, officers, employees, agents, or
other institution-affiliated parties to supervisory action.
(11) Obtaining SARs. A savings association or service corporation
may obtain SARs and the instructions from the appropriate OTS Regional
Office listed in 12 CFR 516.1(b).
(12) Confidentiality of SARs. SARs are confidential. Any
institution or person subpoenaed or otherwise requested to disclose a
SAR or the information contained in a SAR shall decline to produce the
SAR or to provide any information that would disclose that a SAR has
been prepared or filed, citing this paragraph (d), applicable law
(e.g., 31 U.S.C. 5318(g)), or both, and shall notify the OTS.
(13) Safe harbor. The safe harbor provision of 31 U.S.C. 5318(g),
which exempts any financial institution that makes a disclosure of any
possible violation of law or regulation from liability under any law or
regulation of the United States, or any constitution, law or regulation
of any state or political subdivision, covers all reports of suspected
or known criminal violations and suspicious activities to law
enforcement and financial institution supervisory authorities,
including supporting documentation, regardless of whether such reports
are filed pursuant to this paragraph (d), or are filed on a voluntary
basis.
* * * * *
Dated: February 5, 1996.
By the Office of Thrift Supervision.
Jonathan L. Fiechter,
Acting Director.
[FR Doc. 96-3110 Filed 2-15-96; 8:45 am]
BILLING CODE 6720-01-P
Complete official Federal Register PDF
FR Doc. 96-3054 Grants for Construction of Teaching Facilities, Educational Improvements, Scholarships, and Student Loans and Grants for Training of Public Health and Allied Health Personnel
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Pages 6118-6131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3054]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Resources and Services Administration
42 CFR Parts 57 and 58
RIN: 0906-AA38
Grants for Construction of Teaching Facilities, Educational
Improvements, Scholarships, and Student Loans and Grants for Training
of Public Health and Allied Health Personnel
AGENCY: Health Resources and Services Administration, HHS.
ACTION: Final regulation.
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SUMMARY: This final rule revises existing regulations which govern
various Public Health Service (PHS) health professions, nursing, and
allied health training grant, scholarship, traineeship, and loan
programs. The affected regulations are amended primarily by the Health
Professions Extension Amendments of 1992 which: Renumbered the various
PHS Act section numbers and their corresponding United States Code
numbers; repealed the authority for the National Advisory Council on
Health Professions Education; and repealed and eliminated various title
VII and VIII health professions, nursing, and allied health training
grant and traineeship programs. Some of the currently codified
regulations no longer reflect the current provisions of the statute and
are not modifiable as such and, therefore, are also being removed from
the Code of Federal Regulations (CFR). The definition of ``State'' is
being revised in each of the program regulations in accordance with the
1994 Compact of Free Association with [the Republic of] Palau. Other
changes for consistency are made to the regulations and are technical
or clarifying in nature.
EFFECTIVE DATE: These regulations are effective February 16, 1996.
FOR FURTHER INFORMATION CONTACT: Betty B. Hambleton, Chief, Planning,
Evaluation, and Legislation Branch, Office of Research and Planning,
Bureau of Health Professions, Health Resources and Services
Administration, room 8-67, Parklawn Building, 5600 Fishers Lane,
Rockville, Maryland 20857; telephone: (301) 443-1590.
SUPPLEMENTARY INFORMATION: This final rule amends various Public Health
Service (PHS) health professions, nursing, and allied health training
grant, traineeship, scholarship, and student loan program regulations
under title 42, parts 57 and 58 to bring these programs into conformity
with statutory amendments made to the various sections of the PHS Act
under titles VII and VIII. The following ministerial and technical
changes are being made to the various titles VII and VIII programs:
(1) The Health Professions Extension Amendments of 1992, Pub. L.
102-408, reorganized and renumbered the sections in the Public Health
Service (PHS) Act and their corresponding United States Code numbers.
Technical changes affecting the various programs under titles VII and
VIII are being made to revise the PHS section numbers in the
regulations (see part 57, subparts C, H, I, L, Q, S, V, CC, DD, EE, FF;
part 58, subparts C, and D);
(2) The reference to former sections 799A and 845 of the PHS Act
(referenced in each of our regulatory sections entitled, ``What
additional Department regulations apply to grantees?'') codified under
45 CFR part 83 is being revised to read ``section 794'' and ``section
855'' of the PHS Act. The footnote to the citation ``45 CFR part 83''
is being deleted (see part 57, subparts C, D, F, H, L, Q, R, S, V, Y,
Y, Z, CC, DD, EE, FF, OO, and PP; and part 58, subparts C and D).
Former section 799A, 42 U.S.C. 295h-9, ``Discrimination on Basis of Sex
Prohibited'' was redesignated as section 704 by Pub. L. 94-484 and was
renumbered as section 794 (42 U.S.C. 295m) by Pub. L. 102-408. Former
section 845 was redesignated as section 855 (42 U.S.C. 298b-2),
``Prohibition Against Discrimination by Schools on the Basis of Sex''
by Pub. L. 94-63;
(3) Pub. L. 102-408 amended title VII programs by repealing the
National Advisory Council on Health Professions Education effective
October 1, 1992. Therefore, in accordance with the repealing of this
National Advisory Council, as it affects the evaluation and
recommendation process of awarding grant applications, the Department
is removing the definition of ``Council'' and the reference to the
National Advisory Council on Health Professions Education in the
various programs to reflect current statutory language under section
798(a)(2)(A) of the PHS Act (see part 57, subparts H, L, Q, S, V, EE,
and FF);
(4) Section 212 of Pub. L. 102-408 amended section 851 of the PHS
Act by revising the title of the National Advisory Council on Nurse
Training to read ``National Advisory Council on Nurse Education and
Practice''. Therefore, the Department is revising the reference to the
Advisory Council's name in the following nursing programs: part 57,
subparts Y and Z;
(5) Pub. L. 101-219, the 1994 Compact of Free Association with [the
Republic of] Palau, ended the United States' responsibility for Palau
under the Trusteeship Agreement (the Trust Territories of the Pacific
Islands). The reference to the ``Trust Territories of the Pacific
Islands'' in the definition of ``State'' is removed (see part 57,
subparts C, D, F, H, L, Q, R, S, V, Y, Z, CC, DD, EE, FF, OO, and PP;
and part 58, subparts C, and D); the reference to ``Trust Territories
of the Pacific Islands (TTPI)'' in the program regulations (regarding
eligibility in relation to a resident, citizen, or national of the
United States) is removed (see part 57, subparts C, D, F, S, CC, and
DD; part 58, subpart D). The reference to Palau is now stated as ``the
Republic of Palau''.
(6) The reference to former section 705 of the PHS Act (now
renumbered as section 798(e)) concerning audit and inspection
requirements is being removed. The reference to section 705 is
redundant to the requirements that are already covered under 45 CFR
part 74--Administration of Grants, which is referenced in each training
grant regulatory section entitled, ``What other audit and inspection
requirements apply to grantees?'' (see part 57, subparts H, L, Q, S, V,
CC, DD, EE, FF, and OO; and part 58, subparts C & D);
(7) Additionally, the parenthetical phrase citing the OMB approval
number ``0915-0060'' regarding information collection requirements at
the end of each regulatory section entitled, ``What other audit and
inspection requirements apply to grantees?'', is no longer necessary
and is also being removed (see part 57, subparts H, L, Q, S, V, EE, and
FF, and OO);
(8) The preamble also includes discussions on those subparts under
parts 57 and 58 that are no longer viable programs (see part 57,
subparts T, AA, HH, and NN; and part 58, subparts A, B, E, and F). Some
of these regulations no longer reflect the current provisions of the
statute and are not modifiable as such, or their legislative
authorities have expired or were eliminated or repealed by Pub. L. 102-
408. Therefore, the above subparts are being removed and placed in
reserve status in the CFR.
Additional revisions to the following programs, implemented by the
Health Resources and Services Administration, Bureau of Health
Professions, codified
[[Page 6119]]
at 42 CFR parts 57 and 58, are discussed below according to the
subparts, section numbers, and headings affected.
Subpart C--Health Professions Student Loans
This final rule amends Part 57, subpart C governing the Health
Professions Student Loan program under sections 721-735 of the PHS Act
to:
1. Revise Sec. 57.202, entitled ``Definitions.'', by revising the
definitions of ``Health professions school or school'' and ``State'' to
reflect current Department policy language for consistency in title 42,
part 57 and part 58 definitions.
2. Revise Sec. 57.205, entitled ``Health professions student loan
funds.'', by adding a parenthetical phrase at the end of the section
citing the current OMB control number.
3. Revise Sec. 57.206, entitled ``Eligibility and selection of
health professions student loan applicants.'', by removing paragraph
(a)(2) regarding the repayment of loans by service obligation in a
health professions shortage area. (The provisions in former section
741(f) were eliminated by Pub. L. 102-408.) Paragraph (a)(3) is
redesignated as (a)(2).
4. Revise Sec. 57.210, entitled ``Repayment and collection of
health professions student loans'', by revising the parenthetical
phrase at the end of the section providing the current OMB control
number; and by removing the phrase ``or cancellation or repayment under
section 741(f) of the Act'' in paragraph (b)(2)(i), in accordance with
Pub. L. 102-408 which eliminated the HPSL loan repayment by service
obligation authority.
5. Remove and reserve in the CFR Sec. 57.212, entitled ``Repayment
or cancellation of loans for practice in a health professional shortage
area.'', in accordance with Pub. L. 102-408 which eliminated the HPSL
loan repayment by service obligation authority. Succeeding section
numbers under this subpart (Secs. 57.213--57.218) will not be
redesignated but remain the same.
Subpart S--Educational Assistance to Individuals From Disadvantaged
Backgrounds
This final rule amends Part 57, subpart S governing the Educational
Assistance to Individuals from Disadvantaged Backgrounds program under
section 740 of the PHS Act to revise paragraph (b) in Sec. 57.1804,
entitled ``Who is eligible for educational assistance?''. Paragraph (b)
indicates a requirement for eligibility that individuals must ``have
completed at least the junior year of high school (or its
equivalent)''. The Department is adding the words ``except in the case
of Model Demonstration programs'' at the end of the sentence to provide
flexibility for the Department to administer a limited number of awards
to test the feasibility or viability of a Model Demonstration program
permitting students prior to the junior year to receive assistance
under these programs.
Subpart T--Nursing Special Project Grants
Section 820 of the PHS Act, 42 U.S.C. 296k, as it was in effect for
Nursing Special Project Grants, was amended by Pub. L. 102-408, the
Health Professions Extension Amendments of 1992, to substitute for the
existing authority a new four-part authority and revised former project
purposes, eligibility provisions, and other requirements. The
Department is, therefore, removing from title 42, part 57 of the Code
of Federal Regulations this program under subpart T, consisting of
Secs. 57.1901 through 57.1910, and placing it in reserve status.
Subpart Z--Grants for the Advanced Nurse Education Programs
This final rule amends Part 57, subpart Z governing the Grants for
Advanced Nurse Education Programs under section 821 of the PHS Act to:
1. Revise Sec. 57.2501, entitled ``Applicability.'', by revising
the phrase ``expand'' in (b) to read ``significantly expand existing
programs'' and removing the phrase ``maintain programs'' in (c) in
accordance with the amendments in Pub. L. 102-408. This section is
further revised to remove two types of nurse specialties that can
obtain support under this authority in accordance with Pub. L. 102-408.
The two types of specialties that are being removed are nurse
administrators and nurse researchers.
2. Revise Sec. 57.2503, entitled ``Eligibility.'', by revising
paragraph (b)(2) to indicate that a grant would meet the cost for a
project to ``significantly'' expand an advanced nurse education program
through the indicated activities listed. Paragraph (b)(3), that
indicates that a grant would meet the cost for a project to
``maintain'' an advanced nurse education program, is being removed in
accordance with Pub. L. 102-408.
3. Revise Sec. 57.2504, entitled ``Application.'', by revising
paragraph (c)(1) to state the current statutory language for grants to
contain a proposal for a project to: (i) Plan, develop, and operate new
programs, or (ii) significantly expand an advanced nurse education
program. Former paragraph (c)(1)(iii) is removed and paragraph (d) is
revised to reflect the current statutory language.
4. Revise Sec. 57.2506, entitled ``Evaluation and grant awards.'',
by removing the reference to the funding priority for educational
programs in geriatric and gerontological nursing. Pub. L. 102-408
repealed the funding priority.
Subpart AA--Grants for Nurse Practitioner and Nurse Midwifery
Traineeship Programs
Section 822(b) of the PHS Act, 42 U.S.C. 296m, as it was in effect
for Grants for Nurse Practitioner and Nurse Midwifery Traineeship
Programs for service-conditional nurse practitioner and nurse midwifery
traineeships was eliminated by section 204 of Public Law 102-408, the
Health Professions Extension Amendments of 1992 (106 Stat. 2072). The
Department is, therefore, removing from title 42, part 57 of the Code
of Federal Regulations this program under subpart AA, consisting of
Secs. 57.2601 through 57.2617, and placing it in reserve status.
Subpart DD--Financial Assistance for Disadvantaged Health Professions
Students
This final rule amends Part 57, subpart DD governing the program
for Financial Assistance for Disadvantaged Health Professions Students
under section 740 of the PHS Act to:
1. Revise Sec. 57.2904, entitled ``Eligibility and selection of aid
recipients.'', by revising the parenthetical phrase at the end of the
section providing the current OMB control number.
2. Revise Sec. 57.2909, entitled ``What other records, audit, and
inspection requirements apply to schools?'', by revising the
parenthetical phrase at the end of the section providing the current
OMB control number.
Subpart HH--Programs for the Training of Expanded Function Dental
Auxiliaries
Section 2740(c)(1) of Pub. L. 97-35, the Omnibus Budget
Reconciliation Act of 1981, 95 Stat. 922, amended section 783(a) of the
PHS Act to authorize provisions only for physician assistant training.
Concurrently, section 2744 of Pub. L. 97-35 (95 Stat. 924) restructured
the provisions in section 783(a)(2) for Grants for Programs for the
Training of Expanded Functional Dental Auxiliaries and the provisions
were subsumed under the authority of redesignated section 788(b), as it
was in effect for Conversion and Curriculum Grants for Various Health
Professions, 42 U.S.C. 295g-8. Subsequently, the provisions
[[Page 6120]]
under section 788(b) were amended by Pub. L. 99-129, the Health
Professions Training Assistance Act of 1985, to provide for more broad
provisions in health promotion and disease prevention, various
curriculum development training, and health professions initiatives.
Pub. L. 102-408, the Health Professions Education Extension
Amendments of 1992, repealed several existing definitions under former
section 701 of the PHS Act (now renumbered as section 799), including
the definition for ``program for the training of expanded function
dental auxiliaries'', as being no longer needed for administration of
title VII programs. The Department is, therefore, removing from title
42, part 57 of the Code of Federal Regulations this program under
subpart HH, consisting of Secs. 57.3301 through 57.3303, and placing it
in reserve status.
Subpart NN--Various Health Professions Projects (Model Education)
Pub. L. 102-408 repealed section 788(b) of the PHS Act, the
authority as it was in effect for grants or contracts for the
development and implementation of model projects in areas such as
faculty and curriculum development, and development of new clinical
training sites. The Department is, therefore, removing from title 42,
part 57 of the Code of Federal Regulations this program under subpart
NN, consisting of Secs. 57.3901 through 57.3910, and placing it in
reserve status.
Part 58--Grants for Training of Public Health and Allied Health
Personnel
Subpart A--Grants to Graduate Programs in Health Administration
Section 791 of the PHS Act, 42 U.S.C. 295h, as it was in effect for
Grants to Graduate Programs in Health Administration for institutional
grants to graduate programs in health administration was repealed by
Pub. L. 102-408, the Health Professions Extension Amendments of 1992.
The Department is, therefore, removing from title 42, part 58 of the
Code of Federal Regulations this program under subpart A, consisting of
Secs. 58.1 through 58.11, and placing it in reserve status.
Subpart B--Special Project Grants for Graduate Programs in Public
Health
Section 788(b) of the PHS Act, 42 U.S.C. 295g-8, as it was in
effect for Special Project Grants for Graduate Programs in Public
Health was repealed by section 2744 of Public Law 97-35, the Omnibus
Budget Reconciliation Act of 1981 (95 Stat. 923). The Department is,
therefore, removing from title 42, part 58 of the Code of Federal
Regulations this program under subpart B, consisting of Secs. 58.20
through 58.29, and placing it in reserve status.
Subpart C--Grants for Public Health Traineeships for Students in
Schools of Public Health and in Other Graduate Public Health Programs
This final rule amends Part 58, subpart C governing the Grants for
Public Health Traineeships for Students in Schools of Public Health and
in Other Graduate Public Health Programs under section 761 of the PHS
Act to:
1. Revise Sec. 58.202, entitled ``Definitions.'', to amend the
definitions of ``Educational entity'', ``Nonprofit'', and ``State'' to
reflect current Department policy language for consistency in title 42,
part 57 and part 58 definitions.
2. Revise Sec. 58.205, entitled ``How is the amount of the award
determined?'', to:
(a) Remove paragraph (a)(1) to reflect current Department policy
language for consistency in title 42 CFR part 58 regulations; and
(b) Redesignate paragraph (a)(2) as paragraph (a) and revise the
eligibility element in the formula for the distribution of funds as
follows: The proportion of eligible full-time and full-time equivalent
graduate students of each applicant enrolled in severe shortage
occupations targeted for support (epidemiology, environmental health,
biostatistics, toxicology, public health nutrition, and maternal and
child health) to the total full-time and full-time equivalent
enrollment of students in these fields of all applicants having
approved applications. Modifications in the formula are the result of
statutory changes in Pub. L. 102-408. The number of full-time
equivalent students means the number of part-time students converted to
full-time by dividing the total number of credit hours in which part-
time students are enrolled by nine.
Subsequently, Pub. L. 103-43, the National Institutes of Health
Revitalization Act of 1993, enacted June 10, 1993 (107 Stat. 217) added
``maternal and child health'' as a severe shortage health professions
field eligible for support.
3. Revise Sec. 58.208, entitled ``What are the requirements for
traineeships and the appointment of trainees?'', to:
(a) Remove the words ``traineeships and the'' in the heading and
remove paragraphs (a) through (e), in accordance with Pub. L. 102-408
which eliminated requirements for traineeships (paragraphs (f) through
(i) are redesignated as paragraphs (a) through (d)); and
(b) Add the current OMB control number for information collections
at the end of the section.
4. Revise in its entirety Sec. 58.209, entitled ``Who is eligible
for financial assistance as a trainee?'', to reflect the change in
eligibility criteria in accordance with Pub. L. 102-408. The changes in
criteria were announced in the Federal Register by proposed notice on
April 13, 1993. A comment period of 30 days was established to allow
public comment concerning the proposed review criteria. No comments
were received. A final notice was published June 11, 1993. Further,
Pub. L. 103-43, added the health professions field of ``maternal and
child health'' to the list of fields in which there is a severe
shortage of health professionals.
5. Revise Sec. 58.213, entitled ``What additional Department
regulations apply to grantees?'', to add a new CFR citation to bring
this program into compliance with governmentwide requirements
established for this Department under 45 CFR part 93, in accordance
with Pub. L. 101-121, section 319, the Department of the Interior and
Related Agencies Appropriations Act for Fiscal Year 1990, enacted on
October 23, 1989, and an Interim-Final Rule, published in the Federal
Register on February 26, 1990 (55 FR 6736). This CFR citation is cited
in the amendatory language as ``45 CFR part 93--New restrictions on
lobbying''.
Subpart D--Grants for Traineeships in Health Administration, Hospital
Administration, or Health Policy Analysis and Planning at Public or
Nonprofit Private Educational Institutions Other Than Schools of Public
Health
This final rule amends Part 58, subpart D governing the Grants for
Traineeships in Health Administration, Hospital Administration, or
Health Policy Analysis and Planning at Public or Nonprofit Private
Educational Institutions Other than Schools of Public Health under
section 771 of the PHS Act to:
1. Revise the heading of Subpart D to read ``Grants for Health
Administration Traineeships and Special Projects Program'', in
accordance with Pub. L. 102-408.
2. Revise Sec. 58.222, entitled ``Definitions.'', to amend the
definitions of ``Nonprofit'' and ``State'' to reflect current
Department policy language for consistency in title 42, part 57 and
part 58 definitions.
3. Revise Sec. 58.224, entitled ``How will applications be
evaluated?'', to reflect current Department policy language for
[[Page 6121]]
consistency in 42 CFR part 57 and part 58 regulations and add the
statutory criteria for the review of applications.
4. Remove Sec. 58.228, entitled ``What are the requirements for
traineeships and the appointment of trainees?'', in its entirety. Pub.
L. 102-408 eliminated the traineeship requirements.
5. Redesignate Sec. 58.229, entitled ``Who is eligible for
financial assistance as a trainee?'', as Sec. 58.228 and revise
paragraph (a) concerning an eligible individual's citizenship status,
the Immigration and Naturalization Service policy as it relates to the
admission into the United States, its territories and possessions, to
reflect current Department policy language for consistency in title 42,
part 57 and part 58 regulations.
6. Redesignate Sec. 58.230, entitled ``What financial support is
available to trainees?'', as Sec. 58.229.
7. Redesignate Sec. 58.231, entitled ``Duration of traineeships.''
as Sec. 58.230.
8. Redesignate Sec. 58.232, entitled ``Termination of
traineeships.'', as Sec. 58.231.
9. Redesignate Sec. 58.233, entitled ``What additional Department
regulations apply to grantees?'' as Sec. 58.232 and revise it to add a
new CFR citation to bring this program into compliance with
governmentwide requirements established for this Department under 45
CFR part 93, in accordance with Pub. L. 101-121, section 319, the
Department of the Interior and Related Agencies Appropriations Act for
Fiscal Year 1990, enacted on October 23, 1989, and an Interim-Final
Rule, published in the Federal Register on February 26, 1990 (55 FR
6736). This CFR citation is cited in the amendatory language as ``45
CFR part 93--New restrictions on lobbying''.
10. Redesignate Sec. 58.234, entitled ``What other audit and
inspection requirements apply to grantees?'' as Sec. 58.233, remove the
legislative authority citations in parenthesis at the end of the
section, and revise the section text to reflect Department policy
concerning audit and inspection.
11. Redesignate Sec. 58.235, entitled ``Additional conditions.'' as
Sec. 58.234.
Subpart E--Grants for Allied Health Projects
The authority for section 796(a) of the PHS Act, 42 U.S.C. 295h-5,
as it was in effect for Grants for Allied Health Projects was not
extended by Pub. L. 97-35, the Omnibus Budget Reconciliation Act of
1981 (special projects relating to the training of allied health
personnel was modified under former section 788(b), subpart NN). Pub.
L. 100-607, the Health Professions Reauthorization Act of 1988
reinstated a section 797 for Allied Health Projects, but under
different provisions. Because the current regulatory provisions and
authority under former section 796(a) is not modifiable to the current
section 797 provisions, the Department is removing from title 42, part
58 of the Code of Federal Regulations this program under subpart E,
consisting of Secs. 58.401 through 58.414, and placing it in reserve
status.
Subpart F--Grants for Traineeships for the Advanced Training of Allied
Health Personnel
The authority for section 797 of the PHS Act, 42 U.S.C. 295h-6, as
it was in effect for Grants for Traineeships for the Advanced Training
of Allied Health Personnel was not extended by Pub. L. 97-35, the
Omnibus Budget Reconciliation Act of 1981. The provisions were modified
under former section 788(b), subpart NN. Pub. L. 100-607, the Health
Professions Reauthorization Act of 1988 reinstated a section 797 for
Allied Health Traineeships, but under different provisions. Because the
current regulatory provisions and authority under former section 797 is
not modifiable to the current section 797 provisions, the Department is
removing from title 42, part 58 of the Code of Federal Regulations this
program under subpart F, consisting of Secs. 58.501 through 58.515, and
placing it in reserve status.
Further, PHS strongly encourages all grant recipients to provide a
smoke-free workplace and promote the non-use of all tobacco products,
and Pub. L. 103-227, the Pro-Children Act of 1994, prohibits smoking in
certain facilities that receive Federal funds in which education,
library, day care, health care, and early childhood development
services are provided to children.
Justification for Omitting Notice of Proposed Rulemaking
Since these amendments are of a technical nature, the Secretary has
determined, pursuant to 5 U.S.C. 553 and departmental policy, that it
is unnecessary and impractical to follow proposed rulemaking procedures
or to delay the effective date of these regulations.
Economic Impact
Executive Order 12866 requires that all regulations reflect
consideration of alternatives, of costs, of benefits, of incentives, of
equity, and of available information. Regulations must meet certain
standards, such as avoiding unnecessary burden. Regulations which are
``significant'' because of cost, adverse effects on the economy,
inconsistency with other agency actions, effects on the budget, or
novel legal or policy issues, require special analysis.
The Department believes that the resources required to implement
the requirement in these regulations are minimal. Therefore, in
accordance with the Regulatory Flexibility Act of 1980, the Secretary
certifies that these regulations will not have a significant impact on
a substantial number of small entities. For the same reasons, the
Secretary has also determined that this is not a ``significant'' rule
under Executive Order 12866.
Paperwork Reduction Act of 1980
The following list of subparts in this final rule contains
information collection language which have been approved by the Office
of Management and Budget under the Paperwork Reduction Act of 1980 and
have been assigned control numbers for each affected section as listed
below under each subpart.
------------------------------------------------------------------------
OMB control
Section No. No.
------------------------------------------------------------------------
Part 57
------------------------------------------------------------------------
Subpart C--Health Professions Student Loan Program:
Sec. 57.205........................................ 0915-0047
Sec. 57.206........................................ 0915-0047
Sec. 57.208........................................ 0915-0047
Sec. 57.210........................................ 0915-0047
Sec. 57.211........................................ 0915-0047
Sec. 57.215........................................ 0915-0047
Sec. 57.216a....................................... 0915-0047
[[Page 6122]]
Subpart D--Nursing Student Loan Program:
Sec. 57.305........................................ 0915-0047
Sec. 57.306........................................ 0915-0047
Sec. 57.308........................................ 0915-0047
Sec. 57.310........................................ 0915-0047
Sec. 57.311........................................ 0915-0047
Sec. 57.312........................................ 0915-0047
Sec. 57.315........................................ 0915-0047
Sec. 57.316a....................................... 0915-0047
Subpart F--Grants for Nurse Anesthetist Traineeships:
Sec. 57.509........................................ 0915-0060
Sec. 57.510........................................ 0915-0060
Sec. 57.512........................................ 0915-0060
Subpart H--Grants for Physician Assistant Training
Programs:
Sec. 57.704........................................ 0915-0060
Sec. 57.705........................................ 0915-0060
Subpart L--Grants for Residency Training and Advanced
Education in the General Practice of Dentistry:
Sec. 57.1104....................................... 0915-0060
Subpart Y--Grants for Nurse Practitioner and Nurse
Midwifery Programs:
Sec. 57.2404....................................... 0915-0060
Sec. 57.2405....................................... 0915-0060
Subpart Z--Grants for Advanced Nurse Education Programs:
Sec. 57.2504....................................... 0915-0060
Subpart CC--Scholarships for Students of Exceptional
Financial Need (EFN):
Sec. 57.2803....................................... 0915-0028
Sec. 57.2804....................................... 0915-0028
Sec. 57.2809....................................... 0915-0028
Subpart DD--Financial Assistance for Disadvantaged
Health Professions Students (FADHPS):
Sec. 57.2904....................................... 0915-0028
Sec. 57.2909....................................... 0915-0028
Subpart EE--Grants for Residency Training and Faculty
Development in General Internal Medicine and/or General
Pediatrics:
Sec. 57.3003....................................... 0915-0060
Sec. 57.3004....................................... 0915-0060
Sec. 57.3007....................................... 0915-0060
Subpart FF--Grants for Residency Training and Faculty
Development in General Internal Medicine and/or General
Pediatrics:
Sec. 57.3104....................................... 0915-0060
Subpart PP--Grants for Faculty Training Projects in
Geriatric Medicine and Dentistry:
Sec. 57.4103....................................... 0915-0060
Sec. 57.4110....................................... 0915-0060
------------------------------------------------------------------------
Part 58
------------------------------------------------------------------------
Subpart C--Grants for Public Health Traineeships for
Students in Schools of Public Health and in Other
Graduate Public Health Programs:
Sec. 58.208........................................ 0915-0060
Subpart D--Grants for Health Administration Traineeships
and Special Projects Program:
Sec. 58.224........................................ 0915-0060
------------------------------------------------------------------------
List of Subjects in 42 CFR Parts 57 and 58
Aged, Dental health, Education of the disadvantaged, Educational
facilities, Educational study programs, Grant programs--education,
Grant programs--health, Health facilities, Health professions, Loan
programs, Medical and dental schools, Student aid, Reporting and
recordkeeping requirements, Scholarships and fellowships, Public
health.
Dated: November 2, 1995.
Ciro V. Sumaya,
Administrator, Health Resources and Services Administration.
Approved: February 6, 1996.
Donna E. Shalala,
Secretary.
Accordingly, section 215 of the Public Health Service Act, 58 Stat.
690, 67 Stat. 631 (42 U.S.C. 216), 42 CFR parts 57 and 58 are amended
as set forth below:
PART 57--GRANTS FOR CONSTRUCTION OF TEACHING FACILITIES,
EDUCATIONAL IMPROVEMENTS, SCHOLARSHIPS AND STUDENT LOANS
Subpart C--Health Professions Student Loans
1. The authority for subpart C is revised to read as follows:
Authority: Sec. 215 of the Public Health Service Act, 58 Stat.
690, as amended, 63 Stat. 35 (42 U.S.C. 216); secs. 740-747 of the
Public Health Service Act, 77 Stat. 170-173, as amended, 90 Stat.
2266-2268, 91 Stat. 390-391, 95 Stat. 920, 99 Stat. 532-536, and 102
Stat. 3125 (42 U.S.C. 294m-q); renumbered as secs. 721-735, as
amended by Pub. L. 102-408, 106 Stat. 2011-2022 (42 U.S.C. 292q--
292y).
[[Page 6123]]
2. Section 57.202 is amended by revising section number ``741(b)''
in the definition of Full-time student to read ``722(b)''; and by
revising the definitions of Health professions school or school and
State to read as follows:
Sec. 57.202 Definitions.
* * * * *
Health professions school or school, for purposes of this subpart,
means a public or private nonprofit school of medicine, school of
dentistry, school of osteopathic medicine, school of pharmacy, school
of podiatric medicine, school of optometry, or school of veterinary
medicine as defined in section 799(1)(A) of the Act.
* * * * *
State means, in addition to the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the
Republic of Palau, the Republic of the Marshall Islands, and the
Federated States of Micronesia.
Sec. 57.203 [Amended]
3. Section 57.203 is amended by revising section number ``740'' in
paragraph (c) to read ``721''.
4. Section 57.205 is amended by revising section number ``743'' in
paragraph (a)(1)(ii) to read ``728''; and by adding the OMB information
collections control number at the end of the section to read as
follows:
Sec. 57.205 Health professions student loan funds.
* * * * *
(Approved by the Office of Management and Budget under control
number 0915-0047)
5. Section 57.206 is amended by removing paragraph (a)(2) and
redesignating paragraph (a)(3) as paragraph (a)(2); and by revising
paragraph (a)(1)(i) to read as follows:
Sec. 57.206 Eligibility and selection of health professions student
loan applicants.
(a) * * *
(1) * * *
(i) Residents of the United States and either a citizen or national
of the United States, an alien lawfully admitted for permanent
residence in the United States, a citizen of the Commonwealth of the
Northern Mariana Islands, a citizen of the Republic of Palau, a citizen
of the Republic of the Marshall Islands, or a citizen of the Federated
States of Micronesia;
* * * * *
6. Section 57.210 is amended by revising section number ``741(c)''
in paragraph (b)(2)(ii) to read ``722(c)''; by revising the first
sentence in paragraph (b)(2)(i); and by revising the parenthetical
phrase at the end of the section to read as follows:
Sec. 57.210 Repayment and collection of health professions student
loans.
* * * * *
(b) * * *
(2) Late change. (i) For any health professions student loan made
after June 30, 1969, but prior to October 22, 1985, the school may fix
a charge for failure of the borrower to pay all or any part of an
installment when it is due and, in the case of a borrower who is
entitled to deferment under section 722(c) of the Act for any failure
to file timely and satisfactory evidence of the entitlement. * * *
* * * * *
(Approved by the Office of Management and Budget under control
number 0915-0047)
Sec. 57.211 [Amended]
7. Section 57.211 is amended by revising section number ``741(d)''
in paragraph (a) and (b) to read ``722(d)''.
Sec. 57.212 [Removed and Reserved]
8. Section 57.212 is removed and reserved.
Sec. 57.213 [Amended]
9. Section 57.213a is amended by revising section number ``743'' in
paragraph (a)(2) to read ``728''.
Sec. 57.214 [Amended]
10. Section 57.214 is amended by revising section number 74l(1)''
in the introductory text to read ``722(k)''.
Sec. 57.215 [Amended]
11. Section 57.215 is amended by revising section number ``705'' in
paragraph (a)(3) to read ``798(e)''.
Sec. 57.216 [Amended]
12. Section 57.216 is amended by removing the footnote to the CFR
citation ``45 CFR part 83'' and by revising the section numbers ``799A
and 845'' in the citation's heading to read ``794 and 855''.
Subpart D--Nursing Student Loans
1. The authority citation for subpart D is revised to read as
follows:
Authority: Sec. 215 of the Public Health Service Act, 58 Stat.
690, 67 Stat. 631 (42 U.S.C. 216); secs. 835-842 of the Public
Health Service Act, 77 Stat. 913-916, as amended by 99 Stat. 397-
400, 536-537, and 102 Stat. 3160-3161 (42 U.S.C. 297 a-i).
2. Section 57.302 is amended by revising the definition of State to
read as follows:
Sec. 57.302 Definitions.
* * * * *
State means, in addition to the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the
Republic of Palau, the Republic of the Marshall Islands, and the
Federated States of Micronesia.
3. Section 57.305 is amended by adding the OMB information
collections control number at the end of the section to read:
Sec. 57.305 Nursing student loan funds.
* * * * *
(Approved by the Office of Management and Budget under control
number 0915-0047)
4. Section 57.306 is amended by revising paragraph (a)(1)(i) to
read as follows:
Sec. 57.306 Eligibility and selection of nursing student loan
applicants.
(a) * * *
(1) * * *
(i) Residents of the United States and either a citizen or national
of the United States, an alien lawfully admitted for permanent
residence in the United States, a citizen of the Commonwealth of the
Northern Mariana Islands, a citizen of the Republic of Palau, a citizen
of the Republic of the Marshall Islands, or a citizen of the Federated
States of Micronesia;
* * * * *
Sec. 57.310 [Amended]
5. Section 57.310 is amended by revising the Office of Management
and Budget control number ``0915-0094'' in the parenthetical phrase at
the end of the section to read ``0915-0047''.
Sec. 57.312 [Amended]
6. Section 57.312 is amended by revising section number
``836(h)(1)(A)'' in paragraph (a)(1) to read ``846(a)(1)''.
Sec. 57.313 [Amended]
7. Section 57.313 is amended by revising section number ``836(i)''
in paragraph (b) to read ``836(h)''.
Sec. 57.314 [Amended]
8. Section 57.314 is amended by revising section number ``836(j)''
in the introductory text to read ``836(i)''.
Sec. 57.316 [Amended]
9. Section 57.316 is amended by removing footnote three to the CFR
citation ``45 CFR part 83'' and by revising the section numbers ``799A
and 845'' in the citation's heading to read ``794 and 855''.
[[Page 6124]]
Subpart F--Grants for Nurse Anesthetist Traineeships
1. The authority for subpart F is revised to read as follows:
Authority: Sec. 215 of the Public Health Service Act, 58 Stat.
690, as amended by 67 Stat. 631 (42 U.S.C. 216); sec. 831(a) of the
Public Health Service Act, 93 Stat. 580, as amended by 96 Stat.
2061, and 99 Stat. 396-397 (42 U.S.C. 297-1).
2. Section 57.502 is amended by revising the definition of State to
read as follows:
Sec. 57.502 Definitions.
* * * * *
State means, in addition to the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the
Republic of Palau, the Republic of the Marshall Islands, and the
Federated States of Micronesia.
* * * * *
3. Section 57.509 is amended by revising paragraph (a) to read as
follows:
Sec. 57.509 Who is eligible for financial assistance as a trainee?
* * * * *
(a) Be a resident of the United States and either a citizen or
national of the United States, an alien lawfully admitted for permanent
residence in the United States, a citizen of the Commonwealth of the
Northern Mariana Islands, a citizen of the Republic of Palau, a citizen
of the Republic of the Marshall Islands, or a citizen of the Federated
States of Micronesia;
* * * * *
Sec. 57.513 [Amended]
4. Section 57.513 is amended by removing the footnote to the CFR
citation ``45 CFR part 83'' and by revising the section numbers ``799A
and 845'' in the citation's heading to read ``794 and 855''.
Subpart H--Grants for Physician Assistant Training Programs
1. The authority for subpart H is revised to read as follows:
Authority: Sec. 215 of the Public Health Service Act, 58 Stat.
690, as amended by 63 Stat. 35 (42 U.S.C. 216); sec. 783(a)(1) of
the Public Health Service Act, 90 Stat. 2314, and 99 Stat. 524 (42
U.S.C. 295g-3(a)(1)); redesignated as sec. 788(d) and amended by 102
Stat. 3135 (42 U.S.C. 295g-8(d)); renumbered as sec. 750, as amended
by Pub. L. 102-408, 106 Stat. 2044 (42 U.S.C. 293n).
Sec. 57.701 [Amended]
2. Section 57.701 is amended by revising the citation ``788(d) of
the Public Health Service Act (42 U.S.C. 295g-8(d))'' to read ``750 of
the Public Health Service Act (42 U.S.C. 293n)''.
3. Section 57.702 is amended by removing the term Council; by
revising section number ``701(5)'' in the definition of School of
medicine or school of osteopathic medicine to read ``799(1)(E)''; and
by revising the definition of State to read as follows:
Sec. 57.702 Definitions.
* * * * *
State means, in addition to the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the
Republic of Palau, the Republic of the Marshall Islands, and the
Federated States of Micronesia.
* * * * *
Sec. 57.704 [Amended]
4. Section 57.704 is amended by revising the citation ``788(d) of
the Act'' in paragraph (c)(1) to read ``750 of the Act''.
5. Section 57.706 is amended by revising paragraph (a) introductory
text and paragraph (a)(2) to read as follows:
Sec. 57.706 Evaluation of applications.
(a) As required by section 798(a) of the Act, each application for
a grant under this subpart shall be submitted to a peer review group,
composed principally of non-Federal experts, for an evaluation of the
merits of the proposals made in the application. The Secretary may not
approve such an application unless a peer review group has recommended
the application for approval. The Secretary will approve or disapprove
all applications filed in accordance with Sec. 57.704, taking into
consideration:
* * * * *
(2) The potential effectiveness of the project in carrying out the
purposes of section 750 of the Act and this subpart;
* * * * *
Sec. 57.707 [Amended]
6. Section 57.707 is amended by revising the citation ``788(d) of
the Act'' in paragraph (a)(1) to read ``750 of the Act''.
Sec. 57.709 [Amended]
7. Section 57.709 is amended by revising the citation ``788(d) of
the Act'' in paragraph (a) to read ``750 of the Act''.
Sec. 57.710 [Amended]
8. Section 57.710 is amended by removing the footnote to the CFR
citation ``45 CFR part 83'' and by revising the section numbers ``799A
and 845'' in the citation's heading to read ``794 and 855''.
9. Section 57.711 is revised to read as follows:
Sec. 57.711 What other audit and inspection requirements apply to
grantees?
Each entity which receives a grant under this subpart must meet the
requirements of 45 CFR part 75 concerning audit and inspection.
Subpart I--Programs for the Training of Physician Assistants
1. The authority for subpart I is revised to read as follows:
Authority: Sec. 215 of the Public Health Service Act, 58 Stat.
690, as amended by 63 Stat. 35 (42 U.S.C. 216); sec. 701(8)(B), 90
Stat. 2247, as amended by 95 Stat. 913 and 99 Stat. 525-526 (42
U.S.C. 292a(8)(B)); renumbered as sec. 750, as amended by Pub. L.
102-408, 106 Stat. 2044 (42 U.S.C. 293n).
Sec. 57.801 [Amended]
2. Section 57.801 is amended by revising the citation ``701(8)(B)
of the Public Health Service Act (42 U.S.C. 292a(8)(B))'' in paragraph
(a) to read ``750 of the Public Health Service Act (42 U.S.C. 293n)''.
Subpart L--Grants for Residency Training and Advanced Education in
the General Practice of Dentistry
1. The authority for subpart L is revised to read as follows:
Authority: Sec. 215 of the Public Health Service Act, 58 Stat.
690, as amended by 63 Stat. 35 (42 U.S.C. 216); sec. 786(b) of the
Public Health Service Act, 90 Stat. 2317, as amended by 99 Stat.
540-541 (42 U.S.C. 295g-6(b)); redesignated as sec. 785 and amended
by 102 Stat. 3130-3131 (42 U.S.C. 295g-5); renumbered as sec. 749,
as amended by Pub. L. 102-408, 106 Stat. 2043-2044 (42 U.S.C. 293m).
Sec. 57.1101 [Amended]
2. Section 57.1101 is amended by revising the citation ``785 of the
Public Health Service Act (42 U.S.C. 295g-5)'' in the introductory text
to read ``749 of the Public Health Service Act (42 U.S.C. 293m)''.
3. Section 57.1102 is amended by removing the phrase ``as defined
in 42 CFR part 57, subpart HH'' at the end of the sentence in paragraph
(4) of the definition of Practice of general dentistry; by revising
section number ``701(5)'' in the definition of School of dentistry to
read ``799(1)(E)''; and by revising the definition of State to read as
follows:
Sec. 57.1102 Definitions.
* * * * *
[[Page 6125]]
State means, in addition to the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the
Republic of Palau, the Republic of the Marshall Islands, and the
Federated States of Micronesia.
4. Section 57.1106 is amended by revising the introductory text to
read as follows:
Sec. 57.1106 What are the criteria for deciding which applications are
to be funded?
As required by section 798(a) of the Act, each application for a
grant under this subpart shall be submitted to a peer review group,
composed principally of non-Federal experts, for an evaluation of the
merits of the proposals made in the application. The Secretary may not
approve such an application unless a peer review group has recommended
the application for approval. The Secretary will approve or disapprove
applications filed in accordance with Sec. 57.1104, taking into
consideration, among other pertinent factors:
* * * * *
Sec. 57.1107 [Amended]
5. Section 57.1107 is amended by revising the section number
``785'' in paragraph (a)(1) to read ``749''.
Sec. 57.1110 [Amended]
6. Section 57.1110 is amended by removing the footnote to the CFR
citation ``45 CFR part 83'' and by revising the section numbers ``799A
and 845'' in the citation's heading to read ``794 and 855''.
7. Section 57.1111 is revised to read as follows:
Sec. 57.1111 What other audit and inspection requirements apply to
grantees?
Each entity which receives a grant under this subpart must meet the
requirements of 45 CFR part 75 concerning audit and inspection.
Subpart Q--Grants for Predoctoral, Graduate, and Faculty
Development Education Programs in Family Medicine
1. The authority for subpart Q is revised to read as follows:
Authority: Sec. 215 of the Public Health Service Act, 58 Stat.
690, as amended by 63 Stat. 35 (42 U.S.C. 216); sec. 786(a) of the
Public Health Service Act, 90 Stat. 2316, and as amended by 102
Stat. 3146 (42 U.S.C. 295g-6(a)); renumbered as sec. 747, as amended
by Pub. L. 102-408, 106 Stat. 2042-2043 (42 U.S.C. 293k).
Sec. 57.1601 [Amended]
2. Section 57.1601 is amended by revising the citation ``786(a) of
the Public Health Service Act (42 U.S.C. 295g-6(a))'' in the
introductory text to read ``747 of the Public Health Service Act (42
U.S.C. 293k)''.
3. Section 57.1602 is amended by revising section number ``701(5)''
in the definition of School of medicine or osteopathic medicine to read
``799(1)(E)''; and by revising the definition of State to read as
follows:
Sec. 57.1602 Definitions.
* * * * *
State means, in addition to the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the
Republic of Palau, the Republic of the Marshall Islands, and the
Federated States of Micronesia.
* * * * *
4. Section 57.1605 is amended by revising paragraph (a)
introductory text to read as follows:
Sec. 57.1605 How will applications be evaluated?
(a) As required by section 798(a) of the Act, each application for
a grant under this subpart shall be submitted to a peer review group,
composed principally of non-Federal experts, for an evaluation of the
merits of the proposals made in the application. The Secretary may not
approve such an application unless a peer review group has recommended
the application for approval. The Secretary will approve projects which
best promote the purposes of section 747 of the Act and these
regulations. The Secretary will consider, among other factors:
* * * * *
Sec. 57.1608 [Amended]
5. Section 57.1608 is amended by removing the footnote to the CFR
citation ``45 CFR part 83'' and by revising the section numbers ``799A
and 845'' in the citation's heading to read ``794 and 855''.
6. Section 57.1609 is revised to read as follows:
Sec. 57.1609 What other audit and inspection requirements apply to
grantees?
Each entity which receives a grant under this subpart must meet the
requirements of 45 CFR part 75 concerning audit and inspection.
Subpart R--Grants for the Establishment of Departments of Family
Medicine
1. The authority for subpart R continues to read as follows:
Authority: Sec. 215, Public Health Service Act, 58 Stat. 690, as
amended by 63 Stat. 35 (42 U.S.C. 216); sec. 780, Public Health
Service Act, 90 Stat. 2311, as amended by 95 Stat. 221 and 102 Stat.
3146 (42 U.S.C. 295g); renumbered as sec. 747, as amended by Pub. L.
102-408, 106 Stat. 2042-2043 (42 U.S.C. 293k).
2. Section 57.1702 is amended by revising the definition of State
to read as follows:
Sec. 57.1702 Definitions.
* * * * *
State means, in addition to the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the
Republic of Palau, the Republic of the Marshall Islands, and the
Federated States of Micronesia.
Sec. 57.1708 [Amended]
3. Section 57.1708 is amended by removing the footnote to the CFR
citation ``45 CFR part 83'' and by revising the section numbers ``799A
and 845'' in the citation's heading to read ``794 and 855''.
Subpart S--Educational Assistance to Individuals From Disadvantaged
Backgrounds
1. The authority for subpart S is revised to read as follows:
Authority: Sec. 215 of the Public Health Service Act, 58 Stat.
690, as amended by 63 Stat. 35 (42 U.S.C. 216); sec. 787 of the
Public Health Service Act, 90 Stat. 2317, as amended by 95 Stat.
923, 99 Stat. 541, and 102 Stat. 3131-3132 (42 U.S.C. 295g-7);
renumbered as sec. 740, as amended by Pub. L. 102-408, 106 Stat.
2032-2033 (42 U.S.C. 293d).
Sec. 57.1801 [Amended]
2. Section 57.1801 is amended by revising the citation ``787 of the
Public Health Service Act'' to read ``740 of the Public Health Service
Act''; and by adding the United States Code ``(42 U.S.C. 293d)'' after
the word ``Act.''
3. Section 57.1802 is amended by revising the section numbers
``701(4)'' and ``701(5)'' respectively, in the definition of Health
professions schools to read ``799(1) (A), (B), (C), and (D)'' and
``799(1)(E)'' respectively; by revising the section number ``701(10)''
in the definition of School of allied health to read ``799(4)''; and by
revising the definition of State to read as follows:
Sec. 57.1802 Definitions.
* * * * *
State means, in addition to the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the
Republic of Palau,
[[Page 6126]]
the Republic of the Marshall Islands and the Federated States of
Micronesia.
4. Section 57.1804 is amended by revising paragraphs (a) and (b) to
read as follows:
Sec. 57.1804 Who is eligible for educational assistance?
* * * * *
(a) Be a resident of the United States and either a citizen or
national of the United States, an alien lawfully admitted for permanent
residence in the United States, a citizen of the Commonwealth of the
Northern Mariana Islands, a citizen of the Republic of Palau, a citizen
of the Republic of the Marshall Islands, or a citizen of the Federated
States of Micronesia;
(b) Have completed at least the junior year of high school (or its
equivalent), except in the case of Model Demonstration programs; and
* * * * *
5. Section 57.1806 is amended by revising paragraph (a)
introductory text and the first and last sentence in paragraph (b) to
read as follows:
Sec. 57.1806 How will applications be evaluated?
(a) As required by section 798(a) of the Act, each application for
a grant under this subpart shall be submitted to a peer review group,
composed principally of non-Federal experts, for an evaluation of the
merits of the proposals made in the application. The Secretary may not
approve such an application unless a peer review group has recommended
the application for approval. The Secretary will decide which
applications to approve by considering, among other factors:
* * * * *
(b) Within the limits of funds available, the Secretary will award
grants to approved applicants with projects that will best promote the
purposes of section 740 of the Act. * * * Section 740(a)(2)(G)
authorizes the payment of such stipends as the Secretary may approve
for participants in a project for any period of education at any school
eligible for a grant under this subpart.
* * * * *
Sec. 57.1809 [Amended]
6. Section 57.1809 is amended by removing the footnote to the CFR
citation ``45 CFR part 83'' and by revising the section numbers ``799A
and 845'' in the citation's heading to read ``794 and 855''.
6. Section 57.1810 is revised to read as follows:
Sec. 57.1810 What other audit and inspection requirements apply to
grantees?
Each entity which receives a grant under this subpart must meet the
requirements of 45 CFR part 75 concerning audit and inspection.
Subpart T (Secs. 57.1901-57.1910)--[Removed and Reserved]
1. Part 57 is amended by removing and reserving subpart T
(consisting of Secs. 57.1901 through 57.1910).
Subpart V--Grants for Centers of Excellence
1. The authority for subpart V is revised to read as follows:
Authority: Sec. 788A of the Public Health Service Act, Pub. L.
100-97, 101 Stat. 713-714 (42 U.S.C. 295g-8a), and redesignated as
section 782, as amended by Pub. L. 100-607, 102 Stat. 3136 (42
U.S.C. 295g-2); renumbered as sec. 739, as amended by Pub. L. 102-
408, 106 Stat. 2027-2031 (42 U.S.C. 293c).
Sec. 57.2101 [Amended]
2. Section 57.2101 is amended by revising the citation ``782 of the
Public Health Service Act (42 U.S.C. 295g-2)'' to read ``739 of the
Public Health Service Act (42 U.S.C. 293c)''.
3. Section 57.2102 is amended by revising the section numbers
``701(4)'' and ``701(5)'' respectively, in the definition of Health
professions school to read ``799(1) (A), (B), (C), and (D)'' and
``799(1)(E)'' respectively; and by revising the definition of State to
read as follows:
Sec. 57.1202 Definitions.
* * * * *
State means, in addition to the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the
Republic of Palau, the Republic of the Marshall Islands, and the
Federated States of Micronesia.
Sec. 57.2103 [Amended]
4. Section 57.2103 is amended by revising the section number
``701(4)'' in the first sentence to read ``799(1) (A), (B), (C), and
(D) of the Act''.
5. Section 57.2105 is amended by revising paragraph (a)
introductory text to read as follows:
Sec. 57.2105 How will applications be evaluated?
(a) As required by section 798(a) of the Act, each application for
a grant under this subpart shall be submitted to a peer review group,
composed principally of non-Federal experts, for an evaluation of the
merits of the proposals made in the application. The Secretary may not
approve such an application unless a peer review group has recommended
the application for approval. The Secretary will decide which
applications to approve by considering, among other factors:
* * * * *
Sec. 57.2108 [Amended]
6. Section 57.2108 is amended by removing the footnote to the CFR
citation ``45 CFR part 83'' and by revising the section numbers ``799A
and 845'' in the citation's heading to read ``794 and 855''.
7. Section 57.2109 is revised to read as follows:
Sec. 57.2109 What other audit and inspection requirements apply to
grantees?
Each entity which receives a grant under this subpart must meet the
requirements of 45 CFR part 75 concerning audit and inspection.
Subpart Y--Grants for Nurse Practitioner and Nurse Midwifery
Programs
1. The authority for subpart Y continues to read as follows:
Authority: Sec. 215 of the Public Health Service Act, 58 Stat.
690, as amended, 63 Stat. 35 (42 U.S.C. 216); sec. 822(a) of the
Public Health Service Act, 89 Stat. 361, as amended by 99 Stat. 394-
395 and 548 (42 U.S.C. 296m).
2. Section 57.2402 is amended by revising paragraphs (c) and (k) to
read as follows:
Sec. 57.2402 Definitions.
* * * * *
(c) Council means the National Advisory Council on Nursing
Education and Practice (established by section 851 of the Act).
* * * * *
(k) State means, in addition to the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the
Republic of Palau, the Republic of the Marshall Islands, and the
Federated States of Micronesia.
* * * * *
Sec. 57.2409 [Amended]
3. Section 57.2409 is amended by removing the footnote to the CFR
citation ``45 CFR part 83'' and by revising the section numbers ``799A
and 845'' in the citation's heading to read ``794 and 855''.
[[Page 6127]]
Subpart Z--Grants for Advanced Nurse Education Programs
1. The authority for subpart Z is revised to read as follows:
Authority: Sec. 215 of the Public Health Service Act, 58 Stat.
690, as amended by 63 Stat. 35 (42 U.S.C. 216); sec. 821 of the
Public Health Service Act, 89 Stat. 361; as amended by 95 Stat. 930,
99 Stat. 394 and 548, and Pub. L. 102-408, 106 Stat. 2072 (42 U.S.C.
296l).
2. Section 57.2501 is revised to read as follows:
Sec. 57.2501 Applicability.
The regulations of this subpart apply to the award of grants to
public and private nonprofit collegiate schools of nursing under
section 821 of the Public Health Service Act (42 U.S.C. 296l) to meet
the costs of projects to:
(a) Plan, develop, and operate new programs; or
(b) Significantly expand existing programs leading to advanced
degrees that prepare nurses to serve as nurse educators or public
health nurses, or in other clinical nurse specialties determined by the
Secretary to require advanced education.
3. Section 57.2502 is amended by revising the definitions of
Council and State to read as follows:
Sec. 57.2502 Definitions.
* * * * *
Council means the National Advisory Council on Nurse Education and
Practice established by section 851(a) of the Act.
* * * * *
State means, in addition to the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the
Republic of Palau, the Republic of the Marshall Islands, and the
Federated States of Micronesia.
4. Section 57.2503 is amended by removing paragraph (b)(3) and by
revising the introductory text of (b)(2) to read as follows:
Sec. 57.2503 Eligibility.
* * * * *
(b) * * *
(2) A project to significantly expand an advanced nurse education
program through one or more of the following activities:
* * * * *
5. Section 57.2504 is amended by revising paragraphs (c)(1) and (d)
to read as follows:
Sec. 57.2504 Application.
* * * * *
(c) * * *
(1) A proposal for a project to:
(i) Plan, develop, and operate; or
(ii) Significantly expand an advanced nurse education program;
* * * * *
(d) In the case of a project to significantly expand an advanced
nurse education program, the application shall contain an assurance
satisfactory to the Secretary that the applicant will expend, in
carrying out the program for which a grant under this subpart is
sought, an amount of non-Federal funds (excluding costs of
construction) at least as great as the average amount of non-Federal
funds (excluding expenditures of a nonrecurring nature, including costs
of construction) expended for this purpose during the 3 fiscal years
immediately preceding the fiscal year for which the grant is sought.
* * * * *
6. Section 57.2506 is amended by revising paragraph (b) to read as
follows:
Sec. 57.2506 Evaluation and grant awards.
* * * * *
(b) Funding preference. In determining the funding of applications
approved under paragraph (a) of this section, the Secretary may from
time to time announce in the Federal Register special factors relating
to national needs.
* * * * *
Sec. 57.2509 [Amended]
7. Section 57.2509 is amended by removing the footnote to the CFR
citation ``45 CFR part 83'' and by revising the section numbers ``799A
and 845'' in the citation's heading to read ``794 and 855''.
Subpart AA (Secs. 57.2601-57.2617)--[Removed and Reserved]
1. Part 57 is amended by removing and reserving subpart AA
(consisting of Secs. 57.2601 through 57.2617).
Subpart CC--Scholarships for Students of Exceptional Financial Need
1. The authority for subpart CC is revised to read as follows:
Authority: Sec. 215 of the Public Health Service Act, 58 Stat.
690, as amended, 63 Stat. 35 (42 U.S.C. 216); sec. 758 of the Public
Health Service Act, 90 Stat. 2289, as amended by 102 Stat. 3126-3127
(42 U.S.C. 294z); renumbered as sec. 736, as amended by Pub. L. 102-
408, 106 Stat. 2022 (42 U.S.C. 293).
Sec. 57.2801 [Amended]
2. Section 57.2801 is amended by revising the citation ``758 of the
Public Health Service Act (42 U.S.C. 294z)'' to read ``736 of the
Public Health Service Act (42 U.S.C. 293)''.
3. Section 57.2802 is amended by revising the citation ``701(4) of
the Act'' in the definition of Full-time student to read ``799(1)(A) of
the Act''; by revising the citation ``701(4) of the Act'' and ``701(5)
of the Act'' respectively, in the definition of Health professions
school or school to read ``799(1)(A) of the Act'' and ``799(1)(E) of
the Act'' respectively; and by revising the definition of State to read
as follows:
Sec. 57.2802 Definitions.
* * * * *
State means, in addition to the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the
Republic of Palau, the Republic of the Marshall Islands, and the
Federated States of Micronesia.
4. Section 57.2804 is amended by revising paragraph (a)(1) to read
as follows:
Sec. 57.2804 Students eligible for scholarships.
(a) * * *
(1) Is a resident of the United States, and either a citizen or
national of the United States, an alien lawfully admitted for permanent
residence in the United States, a citizen of the Commonwealth of the
Northern Mariana Islands, a citizen of the Republic of Palau, a citizen
of the Republic of the Marshall Islands, or a citizen of the Federated
States of Micronesia.
* * * * *
Sec. 57.2805 [Amended]
5. Section 57.2805 is amended by revising the citation ``751(g)(3)
of the Act'' in paragraph (c) to read ``338A(g)(3) of the Act''.
Sec. 57.2808 [Amended]
6. Section 57.2808 is amended by removing the footnote to the CFR
citation ``45 CFR part 83'' and by revising the section numbers ``799A
and 845'' in the citation's heading to read ``794 and 855''.
7. Section 57.2809 is amended by revising paragraph (a) to read as
follows:
Sec. 57.2809 What other records, audit, and inspection requirements
apply to grantees?
(a) Each entity which receives a grant under this subpart must meet
the requirements of 45 CFR part 75 concerning audit and inspection.
* * * * *
[[Page 6128]]
Subpart DD--Financial Assistance for Disadvantaged Health
Professions Students
1. The authority for subpart DD is revised to read as follows:
Authority: Sec. 215 of the Public Health Service Act, 58 Stat.
690, as amended by 63 Stat. 35 (42 U.S.C. 216); sec. 787 of the
Public Health Service Act, 90 Stat. 2309, as amended by 95 Stat.
923, 99 Stat. 541 (42 U.S.C. 295g-7); renumbered as sec. 740, as
amended by Pub. L. 102-408, 106 Stat. 2032-2033 (42 U.S.C. 293d).
Sec. 57.2901 [Amended]
2. Section 57.2901 is amended by revising the section number
``787(a)(2)(F) and (b)'' to read ``740(a)(2)(F) and (d)''.
3. Section 57.2902 is amended by revising the citation ``701(4) of
the Act'' in the definitions of Full-time student and School to read
``799(1)(A) of the Act''; and by revising the definition of State to
read as follows:
Sec. 57.2902 Definitions.
* * * * *
State means, in addition to the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the
Republic of Palau, the Republic of the Marshall Islands, and the
Federated States of Micronesia.
5. Section 57.2904 is amended by revising the OMB control number
``0915-0110'' in the parenthetical phrase at the end of the section to
read ``0915-0028''; and by revising paragraph (a)(1) to read as
follows:
Sec. 57.2904 Eligibility and selection of aid recipients.
(a) * * *
(1) Is a resident of the United States and either a citizen or
national of the United States, an alien lawfully admitted for permanent
residence in the United States, a citizen of the Commonwealth of the
Northern Mariana Islands, a citizen of the Republic of Palau, a citizen
of the Republic of the Marshall Islands, or a citizen of the Federated
States of Micronesia.
* * * * *
Sec. 57.2908 [Amended]
6. Section 57.2908 is amended by revising the section number
``704'' in the heading of citation 45 CFR part 83 to read ``794''.
7. Section 57.2909 is amended by revising the OMB control number
``0915-0110'' in the parenthetical phrase at the end of the section to
read ``0915-0028''; and by revising paragraph (a) to read as follows:
Sec. 57.2909 What other records, audit, and inspection requirements
apply to schools?''
(a) Each entity which receives a grant under this subpart must meet
the requirements of 45 CFR part 75 concerning audit and inspection.
* * * * *
Subpart EE--Grants for Residency Training in Preventive Medicine
1. The authority for subpart EE is revised to read as follows:
Authority: Sec. 793 of the Public Health Service Act, 95 Stat.
928 (42 U.S.C. 295h-1c); redesignated as section 788(c) of the
Public Health Service Act, 102 Stat. 3134-3135 (42 U.S.C. 295g-
8(e)); renumbered as sec. 763, as amended by Pub. L. 102-408, 106
Stat. 2047 (42 U.S.C. 294b).
Sec. 57.3001 [Amended]
2. Section 57.3001 is amended by revising the citation ``788(c) of
the Public Health Service Act (42 U.S.C. 295g-8(e))'' to read ``763 of
the Public Health Service Act (42 U.S.C. 294b)''.
3. Section 57.3002 is amended by revising the definition of State
to read as follows:
Sec. 57.3002 Definitions.
* * * * *
State means, in addition to the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the
Republic of Palau, the Republic of the Marshall Islands, and the
Federated States of Micronesia.
4. Section 57.3005 is amended by revising paragraph (a)
introductory text and paragraph (a)(1) to read as follows:
Sec. 57.3005 How will applications be evaluated?
(a) As required by section 798(a) of the Act, each application for
a grant under this subpart shall be submitted to a peer review group,
composed principally of non-Federal experts, for an evaluation of the
merits of the proposals made in the application. The Secretary may not
approve such an application unless a peer review group has recommended
the application for approval. The Secretary will decide which
applications to approve by considering, among other factors:
(1) The potential effectiveness of the proposed project in carrying
out the training purposes of section 763 of the PHS Act;
* * * * *
Sec. 57.3009 [Amended]
5. Section 57.3009 is amended by removing the footnote to the CFR
citation ``45 CFR part 83'' and by revising the section numbers ``799A
and 845'' in the citation's heading to read ``794 and 855''.
6. Section 57.3010 is revised to read as follows:
Sec. 57.3010 What other audit and inspection requirements apply to
grantees?
Each entity which receives a grant under this subpart must meet the
requirements of 45 CFR part 75 concerning audit and inspection.
Subpart FF--Grants for Residency Training and Faculty Development
in General Internal Medicine and/or General Pediatrics
1. The authority for subpart FF is revised to read as follows:
Authority: Sec. 215 of the Public Health Service Act, 58 Stat.
690, 63 Stat. 35 (42 U.S.C. 216); sec. 784 of the Public Health
Service Act, 90 Stat. 2315, as amended by 95 Stat. 922-923 and 99
Stat. 540 (42 U.S.C. 295g-4); renumbered as sec. 748, as amended by
Pub. L. 102-408, 106 Stat. 2043 (42 U.S.C. 293l).
Sec. 57.3101 [Amended]
2. Section 57.3101 is amended by revising the citation ``784 of the
Public Health Service Act (42 U.S.C. 295g-4)'' in the introductory text
to read ``748 of the Public Health Service Act (42 U.S.C. 293l)''.
3. Section 57.3102 is amended by revising section number ``701(5)''
in the definition of School of medicine and osteopathic medicine to
read ``799(1)(E)''; by revising section number ``784'' in the
definition of Trainee to read ``748''; and by revising the definition
of State to read as follows:
Sec. 57.3102 Definitions.
* * * * *
State means, in addition to the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the
Republic of Palau, the Republic of the Marshall Islands, and the
Federated States of Micronesia.
* * * * *
4. Section 57.3106 is amended by revising paragraph (a)
introductory text to read as follows:
Sec. 57.3106 How will applications be evaluated?
(a) As required by section 798(a) of the Act, each application for
a grant under this subpart shall be submitted to a peer review group,
composed principally of non-Federal experts, for an evaluation of the
merits of the proposals made in the application. The Secretary may not
approve such an
[[Page 6129]]
application unless a peer review group has recommended the application
for approval. The Secretary will award grants to applicants whose
projects best promote the purposes of section 748 of the Act. The
Secretary will take into consideration, among other factors:
* * * * *
Sec. 57.3110 [Amended]
5. Section 57.3110 is amended by removing the footnote to the CFR
citation ``45 CFR part 83'' and by revising the section numbers ``799A
and 845'' in the citation's heading to read ``794 and 855''.
6. Section 57.3111 is revised to read a
FR Doc. 96-3054 Grants for Construction of Teaching Facilities, Educational Improvements, Scholarships, and Student Loans and Grants for Training of Public Health and Allied Health Personnel
s follows:
Sec. 57.3111 What other audit and inspection requirements apply to
grantees?
Each entity which receives a grant under this subpart must meet the
requirements of 45 CFR part 75 concerning audit and inspection.
Subpart HH (Secs. 57.3301-57.3303)--[Removed and Reserved]
1. Part 57 is amended by removing and reserving subpart HH
(consisting of Secs. 57.3301 through 57.3303).
Subpart NN (Secs. 57.3901-57.3910)--[Removed and Reserved]
1. Part 57 is amended by removing and reserving subpart NN
(consisting of Secs. 57.3901 through 57.3910).
Subpart OO--Grants for Geriatric Education Centers
1. The authority for subpart OO continues to read as follows:
Authority: Sec. 215 of the Public Health Service Act, 58 Stat.
690, 67 Stat. 631 (42 U.S.C. 216); sec. 788(d) of the Public Health
Service Act, 99 Stat. 542 (42 U.S.C. 295g-8); redesignated as sec.
789(a), as amended by Pub. L. 100-607, 102 Stat. 3136-37 (42 U.S.C.
295g-9(a)); renumbered as sec. 777(a), as amended by Pub. L. 102-
408, 106 Stat. 2052-54 (42 U.S.C. 294o).
2. Section 57.4002 is amended by revising the definition of State
to read as follows:
Sec. 57.4002 Definitions.
* * * * *
State means, in addition to the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the
Republic of Palau, the Republic of the Marshall Islands, and the
Federated States of Micronesia.
* * * * *
Sec. 57.4008 [Amended]
3. Section 57.4008 is amended by removing the footnote to the CFR
citation ``45 CFR part 83'' and by revising the section numbers ``799A
and 845'' in the citation's heading to read ``794 and 855''.
4. Section 57.4009 is revised to read as follows:
Sec. 57.4009 What other audit and inspection requirements apply to
grantees?
Each entity which receives a grant under this subpart must meet the
requirements of 45 CFR part 75 concerning audit and inspection.
Subpart PP--Grants for Faculty Training Projects in Geriatric
Medicine and Dentistry
1. The authority for subpart PP continues to read as follows:
Authority: Sec. 215 of the Public Health Service Act, 58 Stat.
690, 67 Stat. 631 (42 U.S.C. 216); sec. 789(b) of the PHS Act, as
amended by Pub. L. 100-607, 102 Stat. 3136-3138 (42 U.S.C. 295g-
9(b)); renumbered as sec. 777(b), as amended by Pub. L. 102-408, 106
Stat. 2052-54 (42 U.S.C. 294o).
2. Section 57.4102 is amended by revising the definition of State
to read as follows:
Sec. 57.4102 Definitions.
* * * * *
State means, in addition to the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the
Republic of Palau, the Republic of the Marshall Islands, and the
Federated States of Micronesia.
* * * * *
3. Section 57.4109 is amended by revising paragraph (a) to read as
follows:
Sec. 57.4109 Who is eligible for financial assistance as a fellow?
* * * * *
(a) Be a resident of the United States and either a citizen or
national of the United States, an alien lawfully admitted for permanent
residence in the United States, a citizen of the Commonwealth of the
Northern Mariana Islands, a citizen of the Republic of Palau, a citizen
of the Republic of the Marshall Islands, or a citizen of the Federated
States of Micronesia;
* * * * *
Sec. 57.4113 [Amended]
4. Section 57.4113 is amended by removing the footnote to the CFR
citation ``45 CFR part 83'' and by revising the section numbers ``799A
and 845'' in the citation's heading to read ``794 and 855''.
PART 58--GRANTS FOR TRAINING OF PUBLIC HEALTH AND ALLIED HEALTH
PERSONNEL
Subpart A (Secs. 58.1-58.11)--[Removed and Reserved]
1. Part 58 is amended by removing and reserving subpart A
(consisting of Secs. 58.1 through 58.11).
Subpart B (Secs. 58.20-58.29)--[Removed and Reserved]
1. Part 58 is amended by removing and reserving subpart B
(consisting of Secs. 58.20 through 58.29).
Subpart C--Grants for Public Health Traineeships for Students in
Schools of Public Health and in Other Graduate Public Health
Programs
1. The authority for subpart C is revised to read as follows:
Authority: Sec. 215 of the Public Health Service Act, 58 Stat.
690, as amended by 63 Stat. 35 (42 U.S.C. 216); sec. 748 of the
Public Health Service Act, 90 Stat. 2279, as amended by 91 Stat.
1505; as amended and redesignated as sec. 792 of the Public Health
Service Act by 95 Stat. 927 (42 U.S.C. 295h-1b); renumbered as sec.
761, as amended by Pub. L. 102-408, 106 Stat. 2045 (42 U.S.C. 294).
Sec. 58.201 [Amended]
2. Section 58.201 is amended by revising the citation ``792 of the
Public Health Service Act (42 U.S.C. 295h-1b)'' to read ``761 of the
Public Health Service Act (42 U.S.C. 294)''.
3. Section 58.202 is amended by revising the section number
``701(5)'' in the definition of School of Public Health to read
``799(1)(E)''; and by revising the definitions of Educational entity,
Nonprofit, and State to read as follows:
Sec. 58.202 Definitions.
* * * * *
Educational entity means a school, college, or university which is
accredited by a body or bodies recognized for this purpose by the
Secretary of Education or an institution which provides specialized
training in public health.
* * * * *
Nonprofit refers to the status of an entity which is a corporation
or association, or is owned and operated by one or more corporations or
associations no part of the net earnings of which inures, or may
lawfully insure, to the benefit of any private shareholder or
individual.
* * * * *
State means, in addition to the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the
[[Page 6130]]
Commonwealth of the Northern Mariana Islands, the Virgin Islands, Guam,
American Samoa, the Republic of Palau, the Republic of the Marshall
Islands, and the Federated States of Micronesia.
* * * * *
Sec. 58.203 [Amended]
4. Section 58.203 is amended by revising the section number
``791A'' in the footnote of paragraph (b) to read ``771''.
Sec. 58.204 [Amended]
5. Section 58.204 is amended by revising the section number ``792''
in the concluding text of paragraph (b) to read ``761''.
6. Section 58.205 is amended by revising paragraph (a) to read as
follows:
Sec. 58.205 How is the amount of the award determined?
(a) Grants to schools of public health. The Secretary will use a
formula to determine the amount of the grant to be awarded to each
school of public health with an approved application.
This formula is
[GRAPHIC] [TIFF OMITTED] TR16FE96.000
G is the amount of the grant award; SS is the number of eligible
full-time and full-time equivalent students of each applicant
enrolled in severe shortage occupations targeted for support
(epidemiology, environmental health, biostatistics, toxicology,
public health nutrition, and maternal and child health); TS is the
total number of students enrolled in graduate and specialized
training in all schools of public health with approved applications;
and AF is the amount of traineeship funds under this program that
the Secretary has designated for award to schools of public health
for that fiscal year. The Secretary will determine the number of
students enrolled in graduate and specialized training in public
health at the school (SS) with the formula
[GRAPHIC] [TIFF OMITTED] TR16FE96.001
FTS is the number of full-time students, and PTC is the total
number of credit hours in which part-time students are enrolled. If
necessary, the figure for
[GRAPHIC] [TIFF OMITTED] TR16FE96.002
will be rounded to the next highest number. Students will be counted
as of October 15 of the fiscal year in which application is made.
The amount of a grant will never exceed the amount requested by the
applicant.
* * * * *
7. Section 58.208 is amended by removing paragraphs (a) through
(e); by redesignating paragraphs (f) through (i) as paragraphs (a)
through (d); by revising the heading of the section; and by adding the
OMB information collections control number at the end of the section to
read as follows:
Sec. 58.208 What are the requirements for appointment of trainees?
* * * * *
(Approved by the Office of Management and Budget under control
number 0915-0060)
8. Section 58.209 is revised as follows:
Sec. 58.209 Who is eligible for financial assistance as a trainee?
(a) To be eligible for a traineeship, an individual must meet the
following conditions:
(1) Trainees must be United States citizens, non-citizen nationals,
or foreign nationals having in their possession a visa permitting
permanent residence in the United States.
(2) New trainees must be pursuing a graduate degree in a health
professions field in which there is a severe shortage of health
professionals (including the fields of epidemiology, environmental
health, biostatistics, toxicology, public health nutrition, and
maternal and child health). Ongoing traineeship commitment will be
continued.
(3) All trainees must meet the school's admission requirements
specified in the approved grant application.
(b) Traineeship support may not be provided to:
(1) Individuals who do not meet the qualifications for admission as
specified in the approved application;
(2) Full-time Federal employees unless they are on Leave Without
Pay status;
(3) Students pursuing training at the undergraduate level;
(4) Students in programs designed to prepare them for careers in
research;
(5) Preventive medicine and dental public health residents (section
763 of the Act may be used for these students); or
(6) Individuals on temporary or student visas.
9. Section 58.213 is amended by removing the footnote to the CFR
citation ``45 CFR part 83'' and by revising the section numbers ``799A
and 845'' in the citation's heading to read ``794 and 855''; and by
adding the following CFR reference at the end of the section to read as
follows:
Sec. 58.213 What additional Department regulations apply to grantees?
* * * * *
45 CFR part 93--New restrictions on lobbying
10. Section 58.214 is revised as follows:
Sec. 58.214 What other audit and inspection requirements apply to
grantees?
Each entity which receives a grant under this subpart must meet the
requirements of 45 CFR part 75 concerning audit and inspection.
Subpart D--Grants for Health Administration Traineeships and
Special Projects Program
1. The authority for subpart D is revised to read as follows:
2. The heading for subpart D is revised as set forth above.
Authority: Sec. 215 of the Public Health Service Act. 58 Stat.
690, 67 Stat. 631 (42 U.S.C. 216); sec. 749 of the Public Health
Service Act, 90 Stat. 2280, Pub. L. 94-484 (42 U.S.C. 294s);
redesignated as sec. 791A, amended by 95 Stat. 927, Pub. L. 97-35
and 96 Stat. 2061, Pub. L. 97-414 (42 U.S.C. 295h-1a); renumbered as
sec. 771, amended by 106 Stat. 2049, Pub. L. 102-408 (42 U.S.C.
294i).
Sec. 58.221 [Amended]
3. Section 58.221 is amended by revising the citation ``791A of the
Public Health Service Act'' to read ``771 of the Public Health Service
Act (42 U.S.C. 294i)''.
4. Section 58.222 is amended by revising the citation ``701(5) of
the Act'' in the definition of School of public health to read
``799(1)(E) of the Act''; and by revising the definitions of Nonprofit
and State to read as follows:
Sec. 58.222 Definitions.
* * * * *
Nonprofit refers to the status of an entity which is a corporation
or association, or is owned and operated by one or more corporations or
associations no part of the net earnings of which inures, or may
lawfully inure, to the benefit of any private shareholder or
individual.
* * * * *
State means, in addition to the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the
Republic of Palau, the Republic of the Marshall Islands, and the
Federated States of Micronesia.
* * * * *
Sec. 58.223 [Amended]
4. Section 58.223 is amended by revising the citation 701(5) of the
Act'' to read ``799(1)(E) of the Act.''
5. Section 58.224 is revised as follows:
Sec. 58.224 How will applications be evaluated?
(a) As required by section 798(a) of the Act, each application for
a grant
[[Page 6131]]
under this subpart shall be submitted to a peer review group, composed
principally of non-Federal experts, for an evaluation of the merits of
the proposals made in the application. The Secretary may not approve
such an application unless a peer review group has recommended the
application for approval.
(b) The following criteria will be used for review of applications:
(1) The administrative and management ability of the applicant to
carry out the proposed project in a cost-effective manner;
(2) The adequacy of the staff and faculty;
(3) The adequacy of institutional resources available to conduct
graduate level education, to include the adequacy of teaching
facilities;
(4) The adequacy of recruitment and placement assistance for
students in accord with the legislative purpose and intent; and
(5) The extent to which the application justifies the purpose,
scope, and need for traineeship and or special project grant.
(Approved by the Office of Management and Budget under control
number 0915-0060)
Sec. 58.225 [Amended]
6. Section 58.225 is amended by revising the section number ``791A
in the formula to read ``771''.
Sec. 58.228 [Removed]
7. Section 58.228 is removed.
Sec. 58.229 [Redesignated as Sec. 58.228]
8. Section 58.229 is redesignated as Sec. 58.228 and is amended by
revising paragraph (a) to read as follows:
Sec. 58.228 Who is eligible for financial assistance as a trainee?
* * * * *
(a) The individual must be a resident of the United States and
either a citizen or national of the United States, an alien lawfully
admitted for permanent residence in the United States, a citizen of the
Commonwealth of the Northern Mariana Islands, a citizen of the Republic
of Palau, a citizen of the Republic of the Marshall Islands or a
citizen of the Federated States of Micronesia.
* * * * *
Sec. 58.230 [Redesignated as Sec. 58.229]
9. Section 58.230 is redesignated as Sec. 58.229.
Sec. 58.231 [Redesignated as Sec. 58.230]
10. Section 58.231 is redesignated as Sec. 58.230.
Sec. 58.232 [Redesignated as Sec. 58.231]
11. Section 58.232 is redesignated as Sec. 58.231.
Sec. 58.233 [Redesignated as Sec. 58.232]
12. Section 58.233 is redesignated as Sec. 58.232 and is amended by
removing the parenthetical phrase at the end of the section; by
removing the footnote to the CFR citation ``45 CFR part 83'' and by
revising the section numbers ``799A and 845'' in the citation's heading
to read ``794 and 855''; and by adding the following CFR reference at
the end of the section to read as follows:
Sec. 58.232 What additional Department regulations apply to grantees?
* * * * *
45 CFR part 93--New restrictions on lobbying
Sec. 58.234 [Redesignated as Sec. 58.233]
13. Section 58.234 is redesignated as Sec. 58.233 and is revised to
read as follows:
Sec. 58.233 What other audit and inspection requirements apply to
grantees?
Each entity which receives a grant under this subpart must meet the
requirements of 45 CFR part 75 concerning audit and inspection.
Sec. 58.235 [Redesignated as Sec. 58.234]
14. Section 58.235 is redesignated as Sec. 58.234.
Subpart E (Secs. 58.401-58.414)--[Removed and Reserved]
1. Part 58 is amended by removing and reserving subpart E
(consisting of Secs. 58.401 through 58.414).
Subpart F (Secs. 58.501-58.515)--[Removed and Reserved]
1. Part 58 is amended by removing and reserving subpart F
(consisting of Secs. 58.501 through 58.515).
[FR Doc. 96-3054 Filed 2-15-96; 8:45 am]
BILLING CODE 4160-15-M
Complete official Federal Register PDF
FR Doc. 96-2583 Approval and Promulgation of Implementation Plans; South Carolina: Approval of Revisions to the South Carolina State Implementation Plan
[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Pages 6114-6115]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-2583]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[SC-28-1-7164a; FRL-5316-7]
Approval and Promulgation of Implementation Plans; South
Carolina: Approval of Revisions to the South Carolina State
Implementation Plan
AGENCY: Environmental Protection Agency (EPA).
ACTION: Direct final rule.
-----------------------------------------------------------------------
SUMMARY: EPA is approving revisions to the South Carolina State
Implementation Plan (SIP) submitted on March 3, 1995, by the State of
South Carolina, through the South Carolina Department of Environment,
Health and Natural Resources. These revisions involve R.61-62.5
Standard Number 7. Prevention of Significant Deterioration. The
intended effect of these revisions is to bring the South Carolina rules
into compliance with the current EPA terminology.
DATES: This action is effective April 16, 1996 unless notice is
received by March 18, 1996 that someone wishes to submit adverse or
critical comments. If the effective date is delayed, timely notice will
be published in the Federal Register.
ADDRESSES: Written comments should be addressed to: Randy Terry,
Regulatory Planning and Development Section, Air Programs Branch, Air,
Pesticides & Toxics Management Division, Region 4 Environmental
Protection Agency, 345 Courtland Street, NE., Atlanta, Georgia 30365.
Copies of the material submitted by the SCDEHNR may be examined
during normal business hours at the following locations:
Air and Radiation Docket and Information Center (Air Docket 6102), U.S.
Environmental Protection Agency, 401 M Street, SW., Washington, DC
20460.
Environmental Protection Agency, Region 4 Air Programs Branch, 345
Courtland Street, NE., Atlanta, Georgia 30365.
South Carolina Department of Environment, Health and Natural Resources,
2600 Bull Street, Columbia, South Carolina 29201.
FOR FURTHER INFORMATION CONTACT: Randy Terry, Regulatory Planning and
Development Section, Air Programs Branch, Air, Pesticides & Toxics
Management Division, Region 4 Environmental Protection Agency, 345
Courtland Street, NE., Atlanta, Georgia 30365. The telephone number is
404/347-3555 ext. 4212.
SUPPLEMENTARY INFORMATION: On March 3, 1995, the State of South
Carolina, through the South Carolina Department of Environment, Health
and Natural Resources, submitted revisions to the South Carolina State
Implementation Plan (SIP). These revisions involve R.61-62.5 Standard
Number 7. Prevention of Significant Deterioration.
EPA is approving the following and revisions of existing rules in
the South Carolina SIP. These new rules and revisions are consistent
with the requirements of the Clean Air Act and EPA guidance.
I.C(4)
This rule has been revised to add a reference to the definition of
particulate matter (PM-10).
I.N(1)(c), I.O(2)(b), and I.O(3)
These rules have been revised to add references to the PM-10
increments in Parts N and O.
II.A
This section was revised to replace all references to total
suspended particulate increments with references to PM-10 increments
and to convert all limits to PM-10 standards.
II.D
This section which covered exclusions from increment consumption
was removed and labeled ``reserved.''
III.D
This section was revised to replace ``allow able'' with
``allowable.''
III.H(1)
This rule was revised to delete a reference to total suspended
particulate matter.
III.I(1) through III.I(2)(ii)
These rules were revised to ensure that Part I conforms to the
federal rule governing the maximum allowable increase of PM-10. This
was accomplished by requiring all owners or operators applying for a
plant permit or modification of an existing permit after November 25,
1994, to meet the requirements of Federal PM-10 Regulations as in
effect on the aforementioned date.
IV.D(1)&(2)
These rules were revised to ensure that Part D reflects the changes
in requirements of Federal modeling due to the revision of the manual
``Guidelines to Air Quality Models.''
IV.H(4)
This rule was revised to correct the PM-10, 24-hour maximum
standard from 10g/m\3\ to 30g/m\3\.
Final Action
In this notice, EPA is approving the revisions to the South
Carolina Environmental Management regulations listed above. This action
is being taken without prior proposal because the changes are
noncontroversial and EPA anticipates no significant comments on them.
The public should be advised that this action will be effective on
April 16,
[[Page 6115]]
1996. However, if notice is received by March 18, 1996 that someone
wishes to submit adverse or critical comments, this action will be
withdrawn and two subsequent documents will be published before the
effective date. One notice will withdraw the final action and another
will begin a new rulemaking by announcing a proposal of the action and
establishing a comment period.
Under Section 307(b)(1) of the CAA, 42 U.S.C. 7607(b)(1), petitions
for judicial review of this action must be filed in the United States
Court of Appeals for the appropriate circuit by April 16, 1996. Filing
a petition for reconsideration by the Administrator of this final rule
does not affect the finality of this rule for purposes of judicial
review nor does it extend the time within which a petition for judicial
review may be filed, and shall not postpone the effectiveness of such
rule or action. This action may not be challenged later in proceedings
to enforce its requirements. (See Section 307(b)(2) of the Act, 42
U.S.C. 7607(b)(2)).
This action has been classified as a Table 3 action for signature
by the Regional Administrator under the procedures published in the
Federal Register on January 19, 1989 (54 FR 2214-2225), as revised by a
July 10, 1995 memorandum from Mary Nichols, Assistant Administrator for
Air and Radiation. The Office of Management and Budget (OMB) has
exempted this regulatory action from E.O. 12866 review.
Nothing in this action shall be construed as permitting or allowing
or establishing a precedent for any future request for a revision to
any state implementation plan. Each request for revision to the state
implementation plan shall be considered separately in light of specific
technical, economic, and environmental factors and in relation to
relevant statutory and regulatory requirements.
Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq, EPA must
prepare a regulatory flexibility analysis assessing the impact of any
proposed or final rule on small entities. 5 U.S.C. 603 and 604.
Alternatively, EPA may certify that the rule will not have a
significant impact on a substantial number of small entities. Small
entities include small businesses, small not-for-profit enterprises,
and government entities with jurisdiction over populations of less than
50,000.
SIP approvals under 110 and subchapter I, part D of the CAA do not
create any new requirements, but simply approve requirements that the
State is already imposing. Therefore, because the federal SIP-approval
does not impose any new requirements, I certify that it does not have a
significant impact on any small entities affected. Moreover, due to the
nature of the federal-state relationship under the CAA, preparation of
a regulatory flexibility analysis would constitute federal inquiry into
the economic reasonableness of state action. The CAA forbids EPA to
base its actions concerning SIPs on such grounds. Union Electric Co. v.
U.S. E.P.A., 427 U.S. 246, 256-66 (S.Ct. 1976); 42 U.S.C. Section
7410(a)(2) and 7410(k)(3).
Unfunded Mandates
Under Sections 202, 203 and 205 of the Unfunded Mandates Reform Act
of 1995 (``Unfunded Mandates Act''), signed into law on March 22, 1995,
EPA must undertake various actions in association with proposed or
final rules that include a Federal mandate that may result in estimated
costs of $100 million or more to the private sector, or to State,
local, or tribal governments in the aggregate.
Through submission of this state implementation plan or plan
revision, the State and any affected local or tribal governments have
elected to adopt the program provided for under section 110 of the
Clean Air Act. These rules may bind State, local and tribal governments
to perform certain duties. To the extent that the rules being approved
by this action will impose any mandate upon the State, local or tribal
governments either as the owner or operator of a source or as a
regulator, or would impose any mandate upon the private sector. EPA's
action will impose no new requirements; such sources are already
subject to these regulations under State law. Accordingly, no
additional costs to State, local, or tribal governments, or to the
private sector, result from this action. EPA has also determined that
this final action does not include a mandate that may result in
estimated costs of $100 million or more to State, local, or tribal
governments in the aggregate or to the private sector.
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Carbon monoxide,
Hydrocarbons, Intergovernmental relations, Nitrogen dioxide, Ozone,
Reporting and recordkeeping requirements, Sulfur oxides.
Dated: September 19, 1995.
Patrick M. Tobin,
Acting Regional Administrator.
Part 52 of chapter I, title 40, Code of Federal Regulations, is
amended as follows:
PART 52--[AMENDED]
1. The authority citation for part 52 continues to read as follows:
Authority: 42.U.S.C. 7401-7671q.
Subpart PP--South Carolina
2. Section 52.2120, is amended by adding paragraph (c)(39) to read
as follows:
Sec. 52.2120 Identification of plan.
* * * * *
(c) * * *
(39) The PSD regulation revisions to the South Carolina State
Implementation Plan which were submitted on March 3, 1995.
(i) Incorporation by reference.
(A) Regulations 61-62.5, Standard No. 7 Prevention of Significant
Deterioration; I.C(4), I.N(1)(c), I.O(2)(b), I.O(3), II.A, II.D,
III.D(10)(b), III.H(1), III.I(1) through III.I(2)ii, IV.D (1) & (2),
and IV.H(4) effective on November 25, 1994.
(ii) Other material. none
* * * * *
[FR Doc. 96-2583 Filed 2-15-96; 8:45 am]
BILLING CODE 6560-50-P
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