issue-1996-03-05•Federal Register final rules — 1996-03-05
Federal Register final rules — 1996-03-05
issue-1996-03-05Federal Register final rules — 1996-03-05Regulation
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. 96-5118 Antiflatulent Drug Products for Over-the-Counter Human use; Amendment of Monograph
[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Pages 8836-8839]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5118]
[[Page 8835]]
_______________________________________________________________________
Part IX
Department of Health and Human Services
_______________________________________________________________________
Food and Drug Administration
_______________________________________________________________________
21 CFR Part 332
Antiflatulent Drug Products for Over-the-Counter Human Use; Final Rule
Federal Register / Vol. 61, No. 44 / Tuesday, March 5, 1996 / Rules
and Regulations
-----------------------------------------------------------------------
[[Page 8836]]
21 CFR PART 332
[DOCKET NO. 87N-0053]
RIN 0910-AA01
Antiflatulent Drug Products for Over-the-Counter Human use;
Amendment of Monograph
AGENCY: Food and Drug Administration, HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Food and Drug Administration (FDA) is issuing a final rule
amending the monograph for over-the-counter (OTC) antiflatulent drug
products by adding a statement of identity section to conform to the
format of other OTC drug final monographs and by revising the
indications to include additional descriptive terms, and by adding a
definition for the term ``antigas.'' FDA is issuing this final rule
after considering public comments on the agency's proposed regulation
and all new data and information on OTC antiflatulent drug products
that have come to the agency's attention. This final rule is part of
the ongoing review of OTC drug products conducted by FDA.
DATES: Effective March 5, 1997; written comments by June 3, 1996.
FOR FURTHER INFORMATION CONTACT: William E. Gilbertson, Center for Drug
Evaluation and Research (HFD-105), Food and Drug Administration, 5600
Fishers Lane,-Rockville, MD 20857, 301-827-2304.
SUPPLEMENTARY INFORMATION:
I. Background
In the Federal Register of June 4, 1974 (39 FR 19862), FDA issued
a final monograph for OTC antiflatulent drug products (21 CFR part 332)
that established conditions under which these drug products are
generally recognized as safe and effective and not misbranded.
In the Federal Register of January 29, 1988 (53 FR 2716), the
agency published a proposed amendment of the monograph for OTC
antiflatulent drug products to add a statement of identity section to
conform to the format of other OTC drug final monographs and to revise
the indications for use to include additional descriptive terms
describing the symptoms that are commonly referred to as ``gas.'' The
proposed statement of identity was ``antiflatulent,'' antigas,'' or
``antiflatulent (antigas).'' FDA issued that proposal after considering
the report and recommendations of the Advisory Review Panel on OTC
Miscellaneous Internal Drug Products (the Miscellaneous Internal Panel)
and public comments on the advance notice of proposed rulemaking for
OTC digestive aid drug products (47 FR 454, January 5, 1982), that was
based on those recommendations. Interested persons were invited to
submit comments, objections, or requests for oral hearing by March 29,
1988.
In the Federal Register of April 19, 1988 (53 FR 12778 and 12779),
the agency extended the comment period from March 29, 1988, until May
27, 1988, to allow adequate time for one manufacturer to fully evaluate
information it had received from the agency and to prepare comments to
the notices of proposed rulemaking for OTC antiflatulent drug products
and OTC digestive aid drug products.
In response to the proposed monograph amendment, three drug
manufacturers and three physicians submitted comments. One comment
requested an oral hearing before the Commissioner of Food and Drugs.
That request concerned the inclusion of activated charcoal in the OTC
antiflatulent monograph if the ingredient was found to be Category I in
the OTC digestive aid monograph. The agency addressed the hearing
request in comment 1 of the final rule for OTC digestive aid drug
products (58 FR 54450 at 54451, October 21, 1993), and concluded that
activated charcoal will not be included in either monograph, and a
hearing is not necessary.''Copies of the comments and the hearing
request received are on public display in the Dockets Management Branch
(H.A.-305), Food and Drug Administration, 12420 Parklawn Dr., rm. 1-23
Rockville, MD 20857, and may be seen between 9 a.m. and 4 p.m., Monday
through Friday. Any additional information that has come to the
agency's attention since publication of the proposed rule is also on
public display in the Dockets Management Branch.
In proceeding with this final rule, the agency has considered all
comments, objections, and the request for oral hearing. A summary of
the comments and the new data with FDA's responses to them follows.
II. Summary of the Comments Received
1. One comment agreed with the agency's use of the term
``antigas''as interchangeable with ``antiflatulent.'' The comment
expressed concern, however, that the agency was prohibiting other
terminology, e.g., ``antigas formulation relieves gas trapped in the
intestine'' or ``for gas pain.'' The comment stated that the basis for
the agency's labeling restriction appeared to be recommendations of the
Miscellaneous Internal Panel (47 FR 454), which were at variance with
the findings of the Advisory Review Panel on OTC Antacid Drug Products
(38 FR 8714, April 5, 1973) (the Antacid Panel) that recognized the
cause of ``bloating,'' ``pressure,'' and ``fullness'' as being the
result of gas. The comment cited the Antacid Panel's recommended
indication ``alleviate or relieve the symptoms of gas'' for
simethicone-containing products as support for its position that excess
gas causes discomfort. The comment also cited the double-blind,
placebo-controlled clinical study by McDonald, O'Leary, and Stratton
(Ref. 1) as demonstrating that dosing with simethicone results in a
reduction of gastrointestinal foam. Finally, the comment stated that
terms such as ``relieves gas trapped in the intestine,'' ``for gas
pain,'' and ``relieves the symptoms of gas should not be prohibited
under the antiflatulent final monograph because consumers use these
terms. The comment referred, specifically, to the consumer survey
discussed in the proposed amendment (53 FR 2716) and indicated that the
terms `` bloating,'' ``pressure,'' ``stuffed feeling,'' and
``fullness'' are very meaningful to and used by consumers to describe
``gas.'' The comment concluded by stating it is unclear whether the
existing indication in Sec. 332.30(a), ``to alleviate or relieve the
symptoms of gas,'' is still permitted because the proposal appears to
omit this indication.
The agency is no longer including the indication ``to alleviate or
relieve the symptoms of gas'' in the antiflatulent monograph. As
explained in the proposal to amend the antiflatulent monograph (53 FR
2716), the agency modified the wording of this indication to
(``alleviates'' or ``relieves'') ``the symptoms referred to as gas.''
The agency also recognized that consumers use the terms ``bloating,
pressure, fullness,''
`` or ''stuffed feeling ``to refer to gas and provided an additional
indication statement that includes these terms: (``alleviates'' or
``relieves'') (``bloating, pressure, fullness, or stuffed feeling)
commonly referred to as gas.''
The agency disagrees with the comment's statement that the Antacid
Panel recognized the cause of ``bloating,'' ``pressure, ``and
''fullness'' as being the result of gas. The Antacid Panel stated that
claims or indications such as ``full feeling'' or ``gas'' encourage the
user to draw conclusions as to the cause of such symptoms, ``a
conclusion that even the medical profession is incapable of drawing at
this time,'' and placed claims such as ``full feeling'' or ``gas'' in
Category III (38
[[Page 8837]]
FR 8714 at 8722 to 8723). Further, while these symptoms describe
discomfort, as noted by the Antacid Panel, the Panel did not include
``pain'' as one of the symptoms of gas (38 FR 8722 to 8723).
In the proposal to amend the antiflatulent monograph, the agency
also stated that phrases such as ``antigas formulation relieves gas
trapped in the intestine'' and ``for gas pain'' would be considered
inappropriate (53 FR 2716). The agency reviewed the study by McDonald,
O'Leary, and Stratton (Ref. 1), cited by the comment, which discusses
the effectiveness of simethicone in eliminating foam and bubbles that
may obscure the visual field in peroral endoscopy. According to the
study results, simethicone is effective as a defoaming agent, but the
study does not define the term ``bubbles'' or explain the source of the
foam or bubbles that obscure the visual field. Without knowing whether
the bubbles are derived from gas or air, the study cannot support the
phrases ``relieves gas trapped in the intestine'' and ``for gas pain.''
In the advance notice of proposed rulemaking for OTC digestive aid
drug products (47 FR 454), the Miscellaneous Internal Panel discussed
at length the question of whether excessive gas is the causative agent
of distress in the upper gastrointestinal tract and concluded that data
were insufficient to make this assumption. In the tentative final
monograph for OTC digestive aid drug products (53 FR 2706, January 29,
1988), the agency acknowledged that the word ``gas'' is commonly used
by consumers. Therefore, the agency had no objection to use of the word
``gas'' in the labeling of OTC digestive aid drug products, provided
there was no implication that the presence of gas, in the literal sense
of excess gas bubbles in the gastrointestinal tract, is the cause of
the symptoms. The agency discussed the consumer survey mentioned by the
comment and agreed that a number of terms were commonly used by
consumers in describing what is commonly, if not accurately, referred
to as ``gas'' (53 FR 2706 at 2710). However, the terms did not include
``gas pain.''
Based on all of the data evaluated to date, the agency finds the
claims ``antigas formulation relieves gas trapped in the intestine''
and ``for gas pain'' inappropriate for OTC antiflatulent drug products.
The agency concludes that the general term ``antigas'' is appropriate
when used for the indications provided in the monograph, e.g.,
``relieves the symptoms referred to as gas.'' However, the agency
acknowledges that the term could be interpreted by some as the
mechanism of action for these products. While this is not supported
scientifically, the agency concludes that this term is understood by
consumers and is an appropriate statement of identity for these
products.
The agency is adding the following definition for the term
``antigas'' in the monograph: ``Antigas is a term that may be used
interchangeably with the term antiflatulent. Neither term should be
considered as describing the mechanism of action of the active
ingredient contained in the product.'' This definition appears in new
Sec. 332.3 of the final monograph.
Reference
(1) McDonald, G. B., R. O'Leary, and C. Stratton, ``Pre-
Endoscopic Use of Oral-Simethicone,'' Gastrointestinal Endoscopy,
24:283, 1978.
2. Three comments, submitting to both the OTC antiflatulent and
digestive aid drug products rulemakings, contended that activated
charcoal was solely an antiflatulent drug and did not belong in the
digestive aid drug products rulemaking. Another comment expressed
concern that activated charcoal was not included as a monograph
ingredient in the 1988 proposal to amend the final monograph for OTC
antiflatulent drug products. The comments cited studies (Refs. 1
through 5) in the literature to support monograph status for activated
charcoal. One comment mentioned that physicians who use charcoal to
treat lower intestinal gas symptoms indicate that charcoal is effective
under certain circumstances. The comment referred to studies by Jain et
al. (not cited), as well as its own studies (not submitted), as
evidence that activated charcoal decreased intestinal gas and relieved
associated symptoms. The comment argued that the need for additional
studies and ongoing research should not deter the availability or use
of activated charcoal for excessive gas and related symptoms for which
it is reasonably expected to be effective. The comment felt charcoal
was not approved because it had a stigma as ``an old remedy,'' which is
difficult to overcome.
Two advisory review panels (Antacid (38 FR 8714) and Miscellaneous
Internal (47 FR 454)) evaluated charcoal for antiflatulent and
digestive aid use. Both panels concluded that more data were needed to
establish effectiveness for these uses.
Subsequently, after the comments were submitted, the agency
received additional data, including studies done by one comment and by
Jain et al. (referenced by the comment). The agency discussed these
studies and the references provided by the comments in the final rule
for OTC digestive aid drug products (58 FR 54450 at 54451). The agency
found the data insufficient to support the effectiveness of activated
charcoal as a digestive aid or as an antiflatulent (58 FR 54453). No
new data have been provided to the agency.
The agency has never attached a ``stigma'' to a drug because it
has been in the marketplace for many years. The agency has proposed a
number of very old ingredients (e.g., aspirin, bran, cascara, and
psyllium) as monograph ingredients. The data that have been provided
have not been adequate to include activated charcoal in a monograph for
use as an antiflatulent. Manufacturers have the option to petition the
agency to amend the antiflatulent monograph in the future should
additional data become available to support the effectiveness of
activated charcoal as an antiflatulent.
References--
(1) Jain, N. K. et al., ``Efficacy of Activated Charcoal in
Reducing Intestinal Gas: A Double-Blind Clinical Trial,'' American
Journal of Gastroenterology, 81:532-535, 1986.--
(2) Jain, N. K., V. P. Patel, and C. Pitchumoni, ``Activated
Charcoal, Simethicone, and Intestinal Gas: A Double-Blind Study,''
Annals of Internal Medicine, 105:61-62, 1986.--
(3) Potter, T., C. Ellis, and M. Levitt, ``Activated Charcoal:
In Vivo and In Vitro Studies of Effect on Gas Formation,''
Gastroenterology, 88:620624, 1985.
(4) Hall, R. G., H. Thompson, and A. Strother, ``Effects of
Orally Administered Activated Charcoal on Intestinal Gas,'' The
American College of Gastroenterology, 75:192-196, 1981.
(5) Vargo, D., L. Ozick, and M. H. Floch, ``The Effect of
Activated Charcoal on Dietary Carbohydrate Fermentation'' American
Journal of Gastroenterology, (abst.), 82:950, 1987.
3. Three manufacturers submitted protocols to study the
effectiveness of activated charcoal in decreasing gastrointestinal
distress. One manufacturer did not pursue studies after 1989.
The agency met with representatives of the other two manufacturers
(Ref. 1) to discuss their study protocols. Both manufacturers submitted
revised protocols in response to the agency's comments. The agency
provided written comments on only one of the protocols (Ref. 2) because
one manufacturer indicated that it intended to begin its study and that
no further review by the agency was necessary.
Subsequently, one manufacturer informed FDA that it had decided
not to pursue studies (Ref. 3). The other manufacturer (Ref. 4) has not
submitted
[[Page 8838]]
any study results to date. In the absence of new data, the agency
concludes there is no basis to include activated charcoal in the OTC
antiflatulent drug products monograph at this time. -Manufacturers have
the option to petition the agency to amend the antiflatulent monograph
in the future should additional data become available to support the
effectiveness of activated charcoal as an antiflatulent.
References
(1) Memorandum of Meeting between FDA representatives and
representatives from Kramer Laboratories and Requa, Inc., coded MM4,
Docket No. 81N-0106, Dockets Management Branch.
(2) Letter from W. E. Gilbertson, FDA, to J. Geils, Requa,
Inc., dated July 22, 1994, coded LET 20, Docket No. 81N-0106,
Dockets Management Branch.
(3) Memorandum of Telephone Conversation between M. Barach, of
Akin, Gump, Strauss, Hauer & Feld on behalf of Kramer Laboratories,
and B. Ryland, FDA, coded MT3, Docket No. 81N-0106, Dockets
Management Branch.---
(4) Memorandum of Telephone Conversation between B. Marlin,
Requa Consultant, and B. Ryland, FDA, coded MT4, Docket No. 81N-
0106, Dockets Management Branch.-
III. The Agency's Final Conclusions
The agency has carefully evaluated the comments' proposals and
concludes that the terms ``antigas'' and ``antiflatulent'' are
interchangeable. The agency is providing manufacturers the option of
using either term or both as the statement of identity for their
products. Although ``antigas'' is now the preferable term, the agency
is also allowing ``antiflatulent.''
In respect to the one comment's concern that activated charcoal is
not a monograph ingredient, the agency points out that manufacturers of
products containing this ingredient have had over 20 years to provide
sufficient data to support claims for activated charcoal as an
antiflatulent and have failed to do so. Accordingly, simethicone
remains the only antiflatulent monograph ingredient.
Interested persons may, on or before June 3, 1996, submit to the
Dockets Management Branch (address above) written comments on these
warnings. Comments should be identified with the docket number found in
brackets in the heading of this document. Three copies of all comments
are to be submitted, except that individuals may submit one copy.
Received comments may be seen in the office above between 9 a.m. and 4
p.m., Monday through Friday.
IV. Analysis of Impacts
No comments regarding the economic impact of this rulemaking were
received. FDA has examined the final rule under Executive Order 12866
and the Regulatory Flexibility Act (Pub. L. 96-354). Executive Order
12866 directs agencies to assess all costs and benefits of available
regulatory alternatives and, when regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity). The agency believes that
this final rule is consistent with the regulatory action as defined by
the Executive Order and, thus, is not subject to review under the
Executive Order. This final rule provides for minor labeling revisions
that can be implemented at very little cost by manufacturers at the
next printing of labels. The agency is providing 12 months for these
revisions to be made and, thus, believes that this rule will have no
significant economic impact. Accordingly, the agency certifies that
this final rule will not have a significant economic impact on a
substantial number of small entities. Therefore, under the Regulatory
Flexibility Act, no further analysis is required.
V. Paperwork Reduction Act of 1995
FDA concludes that the labeling requirements in this document are
not subject to review by the Office of Management and Budget because
they do not constitute a ``collection of information'' under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). Rather, the
labeling statements are a ``public disclosure of information originally
supplied by the Federal government to the recipient for the purpose of
disclosure to the public'' (5 CFR 1320.3(c)(2)).
VI. Environmental Impact
The agency has determined under 21 CFR 25.24(c)(6) that this
action is of a type that does not individually or cumulatively have a
significant effect on the human environment. Therefore, neither an
environmental assessment nor an environmental impact statement is
required.
List of Subjects in 21 CFR Part 332
Labeling, Over-the-counter drugs.-Therefore, under the Federal
Food, Drug, and Cosmetic Act and under authority delegated to the
Commissioner of Food and Drugs, 21 CFR part 332 is amended as follows:
PART 332--ANTIFLATULENT PRODUCTS FOR OVER-THE-COUNTER HUMAN USE-
1. The authority citation for 21 CFR part 332 is revised to read
as follows:
Authority: Secs. 201, 501, 502, 503, 505, 510, 701 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321, 351, 352, 353,
355, 360, 371).
2. New Sec. 332.3 is added to Subpart A to read as follows:
Subpart A--General Provisions
Sec. 332.3 Definitions.
As used in this part:
Antigas. A term that may be used interchangeably with the term
antiflatulent. Neither term should be considered as describing the
mechanism of action of the active ingredient contained in the product.
3. Subpart D consisting Sec. Sec. 332.30 and 332.31 is
redesignated as Subpart C; and Sec. 332.30 is amended by revising the
section heading; by redesignating paragraphs (a), (b), and (c) as
paragraphs (b), (c), and (d), respectively; by adding new paragraph
(a); and by revising newly redesignated paragraph (b) to read as
follows:
Subpart--Labeling
Sec. 332.30 Labeling of antiflatulent drug products.
(a) Statement of identity. The labeling of the product contains
the established name of the drug, if any, and identifies the product as
an ``antiflatulent,'' ``antigas,'' or ``antiflatulent (antigas).''
(b) Indications. The labeling of the product states, under the
heading ``Indications,'' one or more of the phrases listed in this
paragraph (b), as appropriate. Other truthful and nonmisleading
statements, describing only the indications for use that have been
established and listed in this paragraph (b), may also be used, as
provided in Sec. 330.1(c)(2) of this chapter, subject to the provisions
of section 502 of the Federal Food, Drug, and Cosmetic Act (the act)
relating to misbranding and the prohibition in section 301(d) of the
act against the introduction or delivery for introduction into
interstate commerce of unapproved new drugs in violation of section
505(a) of the act.
(1) (Select one of the following: ``Alleviates or Relieves'')
``the symptoms referred to as gas.''
(2) (Select one of the following: ``Alleviates'' or ``Relieves'')
(select one or more of the following: ``bloating,'' ``pressure,''
``fullness,'' or ``stuffed feeling'') ``commonly referred to as gas.''
-* *- * * * -
[[Page 8839]]
Dated: February 23, 1996.
William K. Hubbard,
Associate Commissioner for Policy Coordintion.
[FR Doc. 96-5118 Filed 3-4-96; 8:45 am]
BILLING CODE 4160-01-F
Complete official Federal Register PDF
FR Doc. 96-5103 Exports to Iran; Imposition of Economic Sanctions
[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Pages 8471-8472]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5103]
========================================================================
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. 44 / Tuesday, March 5, 1996 / Rules
and Regulations
[[Page 8471]]
DEPARTMENT OF COMMERCE
Bureau of Export Administration
15 CFR Part 785
[Docket No. 960221039-6039-01]
RIN 0694-AB31
Exports to Iran; Imposition of Economic Sanctions
AGENCY: Bureau of Export Administration.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Bureau of Export Administration (BXA) is amending the
Export Administration Regulations (EAR) to reflect the imposition of
additional economic sanctions on Iran as a result of the issuance of
Executive Order 12959 on May 6, 1995. The Executive Order delegates
implementation responsibility to the Department of the Treasury's
Office of Foreign Assets Control (OFAC), including authority for
exports and certain reexports.
EFFECTIVE DATE: March 5, 1996.
FOR FURTHER INFORMATION CONTACT: Hillary Hess, Office of Exporter
Services, Bureau of Export Administration, Telephone: (202) 482-2440.
SUPPLEMENTARY INFORMATION:
Background
On May 6, 1995, President Clinton issued Executive Order 12959 (60
FR 24757), imposing significant new economic sanctions on Iran. The
effective date of the Executive Order was May 7, 1995 at 12:01 EDT,
except that an effective date of June 6, 1995, 12:01 a.m. EDT applied
for exports and reexports under contracts that were entered into prior
to May 7, 1995, and that were authorized pursuant to regulations in
force immediately prior to May 6, 1995. The Department of the
Treasury's Office of Foreign Assets Control (OFAC) has responsibility
for implementing the Executive Order, including issuing licenses for
exports and certain reexports to Iran. (See OFAC's Iranian Transactions
Regulations, 31 CFR part 560.) If OFAC authorizes an export or
reexport, no separate authorization from BXA is necessary. This rule
makes clear that enforcement action may be taken under the EAR with
respect to an export or reexport prohibited both by the EAR and by the
Executive Order and not authorized by OFAC.
Although the Export Administration Act (EAA) expired on August 20,
1994, the President invoked the International Emergency Economic Powers
Act and continued in effect, to the extent permitted by law, the
provisions of the EAA and the EAR in Executive Order 12924 of August
19, 1994, as extended by the President's notice of August 15, 1995 (60
Fed. Reg. 42767).
Rulemaking Requirements
1. This final rule has been determined to be not significant for
purposes of E. O. 12866.
2. This rule involves collections of information subject to the
Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.). These
collections have been approved by the Office of Management and Budget
under control numbers 0694-0005, 0694-0007, and 0694-0010.
Notwithstanding any other provision of law, no person is required to
respond to nor shall a person be subject to a penalty for failure to
comply with a collection of information subject to the requirements of
the Paperwork Reduction Act unless that collection of information
displays a currently valid OMB Control Number.
3. This rule does not contain policies with Federalism implications
sufficient to warrant preparation of a Federalism assessment under
Executive Order 12612.
4. The provisions of the Administrative Procedure Act requiring
notice of proposed rulemaking, the opportunity for public
participation, and a delay in effective date, are inapplicable because
this regulation involves a military and foreign affairs function of the
United States (see 5 U.S.C. 553(a)(1)). Further, no other law requires
that a notice of proposed rulemaking and an opportunity for public
comment be given for this rule.
Therefore, this regulation is issued in final form. Although there
is no formal comment period, public comments on this regulation are
welcome on a continuing basis. Comments should be submitted to Hillary
Hess, Office of Exporter Services, Regulatory Policy Division, Bureau
of Export Administration, Department of Commerce, P.O. Box 273,
Washington, DC 20044.
5. Because a notice of proposed rulemaking and an opportunity for
public comment are not required to be given for this rule under 5
U.S.C. 553(a)(1) or by any other law, under sections 3(a) and 4 (a) of
the Regulatory Flexibility Act (5 U.S.C. 603(a) and 604(a)) no initial
or final Regulatory Flexibility Analysis has to be or will be prepared.
List of Subjects in 15 CFR Part 785
Exports.
Accordingly, Part 785 of the Export Administration Regulations (15
CFR Parts 730-799) is amended as follows:
1. The authority citation for 15 CFR Part 785 continues to read as
follows:
Authority: Pub. L. 90-351, 82 Stat. 197 (18 U.S.C. 2510 et
seq.), as amended; Pub. L. 95-223, 91 Stat. 1626 (50 U.S.C. 1701 et
seq.); Pub. L. 95-242, 92 Stat. 120 (22 U.S.C. 3201 et seq. and 42
U.S.C. 2139a); Pub. L. 96-72, 93 Stat. 503 (50 U.S.C. App. 2401 et
seq.), as amended; Pub. L. 102-484, 106 Stat. 2575 (22 U.S.C. 6004);
E.O. 12002 of July 7, 1977 (42 FR 35623, July 7, 1977), as amended;
E.O. 12058 of May 11, 1978 (43 FR 20947, May 16, 1978); E.O. 12214
of May 2, 1980 (45 FR 29783, May 6, 1980); E.O. 12730 of September
30, 1990 (55 FR 40373, October 2, 1990), as continued by Notice of
September 25, 1992 (57 FR 44649, September 28, 1992); E.O. 12924 of
August 19, 1994 (59 FR 43437, August 23, 1994); E.O. 12938 of
November 14, 1994 (59 FR 59099 of November 16, 1994); E.O. 12957 of
March 15, 1995 (60 FR 14615 of March 17, 1995); E.O. 12959 of May 6,
1995 (60 FR 24757 of May 9, 1995); and Notice of August 15, 1995, 60
FR 42767.
PART 785--[AMENDED]
2. Section 785.4 is amended by adding paragraph (b) to read as
follows:
Sec. 785.4 Country Groups T & V.
* * * * *
(b) Iran.
Note: The Treasury Department's Office of Foreign Assets Control
(OFAC) administers a comprehensive trade and investment embargo
against Iran under the authority of the International Emergency
Economic
[[Page 8472]]
Powers Act of 1977, as amended, section 505 of the International
Security and Development Cooperation Act of 1985, and Executive
Orders 12957 and 12959 of March 15, 1995 and May 6, 1995,
respectively. This embargo includes prohibitions on export and
certain reexport transactions involving Iran, including transactions
dealing with items subject to the EAR. (See OFAC's Iranian
Transactions Regulations, 31 CFR part 560.)
(1) The controls on exports and reexports to Iran, as specified in
the CCL and in paragraph (d) of this section, continue to apply. To
avoid duplication, exporters or reexporters are not required to seek
separate authorization from BXA for an export or reexport subject both
to the EAR and to OFAC's Iranian Transactions Regulations. Therefore,
if OFAC authorizes an export or reexport, no separate authorization
from BXA is necessary.
(2) Section 3 of the Executive Order directs all agencies of the
United States Government to take all appropriate measures within their
jurisdiction to carry out the order. Accordingly, no validated license,
general license or other authorization constitutes authority for any
export or reexport prohibited by the Iranian Transactions Regulations
unless authorized by OFAC, and no person may export or reexport items
subject to both the EAR and OFAC's Iranian Transactions Regulations
without prior OFAC authorization. Any export or reexport prohibited
both by the EAR and by the Executive Order and not authorized by OFAC
is a violation of the EAR.
(3) Exporters should consult with OFAC (Office of Foreign Assets
Control, U.S. Department of the Treasury, 1500 Pennsylvania Avenue,
N.W., Annex, 2nd Floor, Washington, D.C. 20220. Telephone (202) 622-
2480) for authorization for:
(i) Exports from the United States involving Iran;
(ii) Exports or reexports to Iran from a third country, when the
exporter or reexporter is a United States person (as defined in OFAC's
Iranian Transactions Regulations, 31 CFR part 560); or
(iii) Reexports to Iran of U.S.-origin items that were subject to
any export license application requirements prior to Executive Order
12959 of May 6, 1995.
(Office of Foreign Assets Control, U.S. Department of the Treasury,
1500 Pennsylvania Avenue, N.W., Annex, 2nd Floor, Washington, D.C.
20220. Telephone (202) 622-2480.)
* * * * *
Dated: February 29, 1996.
Sue E. Eckert,
Assistant Secretary for Export Administration.
[FR Doc. 96-5103 Filed 3-4-96; 8:45 am]
BILLING CODE 3510-DT-P
Complete official Federal Register PDF
FR Doc. 96-5100 Ocean Salmon Fisheries Off the Coasts of Washington, Oregon, and California; Inseason Adjustment, Point Arena, CA, to the U.S.-Mexican Border
[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Pages 8496-8497]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5100]
-----------------------------------------------------------------------
[[Page 8497]]
DEPARTMENT OF COMMERCE
50 CFR Part 661
[Docket No. 950426116-5116-01; I.D. 022796C]
Ocean Salmon Fisheries Off the Coasts of Washington, Oregon, and
California; Inseason Adjustment, Point Arena, CA, to the U.S.-Mexican
Border
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Inseason adjustment; request for comments.
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SUMMARY: NMFS announces that the retention of coho salmon will be
prohibited in the recreational salmon fishery in the area from Point
Arena, CA, to the U.S.-Mexican border when the season opens on March 2,
1996. This adjustment is intended to ensure conservation of coho
salmon.
DATES: Effective 0001 hours local time, March 2, 1996, until the
effective date of the 1996 management measures, as published in the
Federal Register. Comments will be accepted through March 15, 1996.
ADDRESSES: Comments may be mailed to William Stelle, Jr., Director,
Northwest Region, National Marine Fisheries Service, NOAA, 7600 Sand
Point Way NE., BIN C15700-Bldg. 1, Seattle, WA 98115-0070; or Hilda
Diaz-Soltero, Director, Southwest Region, National Marine Fisheries
Service, NOAA, 501 W. Ocean Boulevard, Suite 4200, Long Beach, CA
90802-4213. Information relevant to this action has been compiled in
aggregate form and is available for public review during business hours
at the office of the Director, Northwest Region, NMFS (Regional
Director).
FOR FURTHER INFORMATION CONTACT: William L. Robinson, 206-526-6140, or
Rodney R. McInnis, 310-980-4030.
SUPPLEMENTARY INFORMATION: In the 1995 annual management measures for
ocean salmon fisheries, NMFS announced 1996 recreational salmon seasons
opening earlier than May 1, 1996 (60 FR 21746, May 3, 1995). The 1996
recreational fishery in the area between Point Arena, CA, and the U.S.-
Mexican border is scheduled to open on March 2 (the nearest Saturday to
March 1) for all salmon, unless an evaluation indicates low coho
abundance in 1996, in which case inseason action may be taken to
prohibit retention of coho salmon.
The best available information on February 6 indicated that the
1996 preseason index abundance estimate for Oregon Production Index
(OPI) area coho stocks is 427,300 fish, about 4 percent below the 1995
preseason estimate of 443,000 fish. In 1994 and 1995, preseason
abundance estimates for Oregon coastal natural (OCN) coho salmon, an
OPI area stock component, were at record low levels, resulting in no
coho retention south of Cape Falcon, OR, when commercial and
recreational salmon seasons opened May 1. Due to the continuing low
preseason abundance estimates for OPI coho and OCN coho in 1996, it is
necessary to modify the recreational fishery in the area between Point
Arena, CA, and the U.S.-Mexican border such that it will open on March
2 for all salmon except coho.
Modifications in the species which may be caught and landed during
specific seasons and the establishment or modification of limited
retention regulations are authorized by regulations at 50 CFR
661.21(b)(1)(ii). All other restrictions that apply to this fishery
remain in effect as announced in the annual management measures.
The Regional Director consulted with representatives of the Pacific
Fishery Management Council and the California Department of Fish and
Game regarding this adjustment. The State of California will also
prohibit retention of coho salmon in the recreational fishery in State
waters adjacent to this area of the exclusive economic zone. Because of
the need for immediate action to conserve coho salmon, NMFS has
determined that good cause exists to take this action without affording
a prior opportunity for public comment. This action does not apply to
other fisheries that may be operating in other areas.
Classification
This action is authorized by 50 CFR 661.21 and 661.23 and is exempt
from review under E.O. 12866.
Authority: 16 U.S.C. 1801 et seq.
Dated: February 29, 1996.
Richard W. Surdi,
Acting Director, Office of Fisheries Conservation and Management,
National Marine Fisheries Service.
[FR Doc. 96-5100 Filed 2-29-96; 4:00 pm]
BILLING CODE 3510-22-F
Complete official Federal Register PDF
FR Doc. 96-5088 Suspension of Community Eligibility
[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Pages 8473-8475]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5088]
=======================================================================
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[[Page 8474]]
FEDERAL EMERGENCY MANAGEMENT AGENCY
44 CFR Part 64
[Docket No. FEMA-7636]
Suspension of Community Eligibility
AGENCY: Federal Emergency Management Agency, FEMA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rule identifies communities, where the sale of flood
insurance has been authorized under the National Flood Insurance
Program (NFIP), that are suspended on the effective dates listed within
this rule because of noncompliance with the floodplain management
requirements of the program. If the Federal Emergency Management Agency
(FEMA) receives documentation that the community has adopted the
required floodplain management measures prior to the effective
suspension date given in this rule, the suspension will be withdrawn by
publication in the Federal Register.
EFFECTIVE DATES: The effective date of each community's suspension is
the third date (``Susp.'') listed in the third column of the following
tables.
ADDRESSES: If you wish to determine whether a particular community was
suspended on the suspension date, contact the appropriate FEMA Regional
Office or the NFIP servicing contractor.
FOR FURTHER INFORMATION CONTACT: Robert F. Shea Jr., Division Director,
Program Implementation Division, Mitigation Directorate, 500 C Street,
SW., Room 417, Washington, DC 20472, (202) 646-3619.
SUPPLEMENTARY INFORMATION: The NFIP enables property owners to purchase
flood insurance which is generally not otherwise available. In return,
communities agree to adopt and administer local floodplain management
aimed at protecting lives and new construction from future flooding.
Section 1315 of the National Flood Insurance Act of 1968, as amended,
42 U.S.C. 4022, prohibits flood insurance coverage as authorized under
the National Flood Insurance Program, 42 U.S.C. 4001 et seq., unless an
appropriate public body adopts adequate floodplain management measures
with effective enforcement measures. The communities listed in this
document no longer meet that statutory requirement for compliance with
program regulations, 44 CFR part 59 et seq. Accordingly, the
communities will be suspended on the effective date in the third
column. As of that date, flood insurance will no longer be available in
the community. However, some of these communities may adopt and submit
the required documentation of legally enforceable floodplain management
measures after this rule is published but prior to the actual
suspension date. These communities will not be suspended and will
continue their eligibility for the sale of insurance. A notice
withdrawing the suspension of the communities will be published in the
Federal Register.
In addition, the Federal Emergency Management Agency has identified
the special flood hazard areas in these communities by publishing a
Flood Insurance Rate Map (FIRM). The date of the FIRM if one has been
published, is indicated in the fourth column of the table. No direct
Federal financial assistance (except assistance pursuant to the Robert
T. Stafford Disaster Relief and Emergency Assistance Act not in
connection with a flood) may legally be provided for construction or
acquisition of buildings in the identified special flood hazard area of
communities not participating in the NFIP and identified for more than
a year, on the Federal Emergency Management Agency's initial flood
insurance map of the community as having flood-prone areas (section
202(a) of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4106(a),
as amended). This prohibition against certain types of Federal
assistance becomes effective for the communities listed on the date
shown in the last column.
The Acting Associate Director finds that notice and public comment
under 5 U.S.C. 553(b) are impracticable and unnecessary because
communities listed in this final rule have been adequately notified.
Each community receives a 6-month, 90-day, and 30-day notification
addressed to the Chief Executive Officer that the community will be
suspended unless the required floodplain management measures are met
prior to the effective suspension date. Since these notifications have
been made, this final rule may take effect within less than 30 days.
National Environmental Policy Act
This rule is categorically excluded from the requirements of 44 CFR
Part 10, Environmental Considerations. No environmental impact
assessment has been prepared.
Regulatory Flexibility Act
The Acting Associate Director has determined that this rule is
exempt from the requirements of the Regulatory Flexibility Act because
the National Flood Insurance Act of 1968, as amended, 42 U.S.C. 4022,
prohibits flood insurance coverage unless an appropriate public body
adopts adequate floodplain management measures with effective
enforcement measures. The communities listed no longer comply with the
statutory requirements, and after the effective date, flood insurance
will no longer be available in the communities unless they take
remedial action.
Regulatory Classification
This final rule is not a significant regulatory action under the
criteria of section 3(f) of Executive Order 12866 of September 30,
1993, Regulatory Planning and Review, 58 FR 51735.
Paperwork Reduction Act
This rule does not involve any collection of information for
purposes of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.
Executive Order 12612, Federalism
This rule involves no policies that have federalism implications
under Executive Order 12612, Federalism, October 26, 1987, 3 CFR, 1987
Comp., p. 252.
Executive Order 12778, Civil Justice Reform
This rule meets the applicable standards of section 2(b)(2) of
Executive Order 12778, October 25, 1991, 56 FR 55195, 3 CFR, 1991
Comp., p. 309.
List of Subjects in 44 CFR Part 64
Flood insurance, Floodplains.
Accordingly, 44 CFR part 64 is amended as follows:
PART 64--[AMENDED]
1. The authority citation for Part 64 continues to read as follows:
Authority: 42 U.S.C. 4001 et seq.; Reorganization Plan No. 3 of
1978, 3 CFR, 1978 Comp., p. 329; E.O. 12127, 44 FR 19367, 3 CFR,
1979 Comp., p. 376.
Sec. 64.6 [Amended]
2. The tables published under the authority of Sec. 64.6 are
amended as follows:
[[Page 8475]]
----------------------------------------------------------------------------------------------------------------
Date certain Federal
Community Effective date of Current assistance no longer
State/location No. eligibility effective available in special
map date flood hazard areas
----------------------------------------------------------------------------------------------------------------
Region VI
Texas: Terrell, city of, Kaufman 480416 June 18, 1976, Emerg; 03-04-96 Mar. 4, 1996.
County. Sept. 30, 1980, Reg;
Mar. 4, 1996, Susp.
Region II
New York: Clarence, town of, Erie 360232 Apr. 4, 1975, Emerg; Apr. 03-05-96 Mar. 5, 1996.
County. 1, 1982, Reg; Mar. 5,
1996, Susp.
Region III
Pennsylvania:
Fayette City, borough of, 420464 July 30, 1975, Emerg; 12-19-95 Do.
Fayette County. Feb. 3, 1982, Reg; Mar.
5, 1996, Susp.
North Charleroi, borough of, 422137 Dec. 13, 1974, Emerg; ......do Do.
Washington County. July 16, 1981, Reg; Mar.
5, 1996, Susp.
West Virginia:
Bath, town of, Morgan County.. 540005 May 20, 1975, Emerg; Jan. 03-05-96 Do.
20, 1980, Reg; Mar. 5,
1996, Susp.
Morgan County, unincorporated 540144 Oct. 28, 1975, Emerg; ......do Do.
areas. July 1, 1987, Reg; Mar.
5, 1996, Susp.
Paw Paw, town of, Morgan 540252 Oct. 2, 1975, Emerg; Nov. ......do Do.
County. 2, 1984, Reg; Mar. 5,
1996, Susp.
Region V
Indiana: Tipton, city of, Tipton 180255 Oct. 29, 1975, Emerg; ......do Do.
County. Mar. 5, 1996, Reg; Mar.
5, 1996, Susp.
Michigan:
Plymouth, city of, Wayne 260236 Aug. 6, 1975, Emerg; Feb. 01-05-96 Do.
County. 18, 1981, Reg; Mar. 5,
1996, Susp.
Plymouth, Charter township of, 260237 Aug. 6, 1975, Emerg; Mar. ......do Do.
Wayne County. 2, 1981, Reg; Mar. 5,
1996, Susp.
Minnesota:
Aitkin County, unincorporated 270628 Apr. 23, 1974, Emerg; 02-02-96 Do.
areas. Mar. 15, 1982, Reg; Mar.
5, 1996, Susp.
Hopkins, city of, Hennepin 270166 May 2, 1974, Emerg; May 12-19-95 Do.
County. 5, 1981, Reg; Mar. 5,
1996, Susp.
Wisconsin:
Cadott, village of, Chippewa 550043 Jan. 23, 1975, Emerg; 03-05-96 Do.
County. Mar. 5, 1996, Reg; Mar.
5, 1996, Susp.
Dane County, unincorporated 550077 Oct. 20, 1972, Emerg; ......do Do.
areas. Sept. 29, 1978, Reg;
Mar. 5, 1996, Susp.
Madison, city of, Dane County. 550083 July 17, 1975, Emerg; ......do Do.
Sept. 30, 1980, Reg;
Mar. 5, 1996, Susp.
Middleton, city of, Dane 550087 June 27, 1974, Emerg; May ......do Do.
County. 1, 1980, Reg; Mar. 5,
1996, Susp.
Region VI
Louisiana: Duson, town of, 220104 Nov. 11, 1975, Emerg; 02-02-96 Do.
Lafayette County. Sept. 30, 1981, Reg;
Mar. 5, 1996, Susp.
----------------------------------------------------------------------------------------------------------------
Code for reading third column: Emerg.--Emergency; Reg.--Regular; Rein.--Reinstatement; Susp.--Suspension.
(Catalog of Federal Domestic Assistance No. 83.100, ``Flood
Insurance.'')
Issued: February 27, 1996.
Richard W. Krimm,
Acting Associate Director, Mitigation Directorate.
[FR Doc. 96-5088 Filed 3-4-96; 8:45 am]
BILLING CODE 6718-05-P
Complete official Federal Register PDF
FR Doc. 96-5041 Reorganization of the Compliance and Information Bureau
[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Pages 8475-8478]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5041]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 0, 2, 5, 21, 22, 23, 25, 73, 78, 80, 90, 94, and 95
[FCC 95-423]
Reorganization of the Compliance and Information Bureau
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: This action restructures the Compliance and Information
Bureau. The Commission reviewed the operations of the Bureau in light
of principles of the National Performance Review to makes its
operations more cost effective and to privatize those that could be
handled by the private sector. It is the intent of this action to
improve service to the public at a reduced cost.
EFFECTIVE DATE: February 9, 1996.
FOR FURTHER INFORMATION CONTACT: Wayne T. McKee, Compliance and
Information Bureau, Federal Communications Commission, Washington, D.C.
20554, (202) 418-1191.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order,
[[Page 8476]]
FCC 95-423, adopted October 6, 1995, and released, February 9, 1996.
The full text of this Order is available for inspection and copying
during normal business hours in the FCC Reference Center (Room 239)
1919 M Street, NW, Washington, DC. The complete text may be purchased
from the Commission's copy contractor, International Transcription
Services, 2100 M Street NW, Washington, DC 20037, telephone (202) 857-
3800.
Summary of Order
1. The Commission completed a full review of the mission,
processes, and organization of the Compliance and Information Bureau
and has determined to make changes to them in order to create a more
effective organization within the limits of our budgetary constraints.
2. The Commission will automate the high frequency direction-
finding network by installing new technology which can be remotely-
controlled from a single office. The Commission will also establish a
complaint and inquiry intake center, with a toll-free (800 or 888)
number, to centralize and make more efficient agency provision of
information and processing of complaints. The Commission will close its
offices in Buffalo, New York; Miami, Florida; St. Paul, Minnesota;
Norfolk, Virginia; Portland, Oregon; Houston, Texas; San Juan, Puerto
Rico; Anchorage, Alaska; and Honolulu, Hawaii. Two technical staff will
be retained in each of these cities as resident enforcement agents. The
remaining offices will be fully staffed and equipped to maintain the
Commission's Enforcement program.
3. The amendments adopted pertain to agency organization,
procedure, and practice. Consequently, the requirement of notice and
comment and the effective date provisions of the Administrative
Procedures Act, 5 U.S.C. Sec. 553(b), (d), do not apply.
4. Authority for the amendments adopted is contained in Sections
4(i), 5(b), 5(c)(1) and 303(r) of the Communications Act of 1934, as
amended, 47 U.S.C. Secs. 154(i), 155(b), 155(c)(1), 303(r).
List of Subjects
47 CFR Part O
Organization and functions (Goverment agencies), Delegation of
authority.
47 CFR Part 2
Communications equipment, Imports.
47 CFR Part 5
Monitoring stations, Radio.
47 CFR Part 21
Monitoring stations, Radio.
47 CFR Part 22
Monitoring stations, Radio.
47 CFR Part 23
Monitoring stations, Radio.
47 CFR Part 25
Monitoring stations, Radio.
47 CFR Part 73
Monitoring stations, Radio broadcasting.
47 CFR Part 78
Monitoring stations, Radio.
47 CFR Part 80
Communications equipment, Inspections, Marine safety, Monitoring
Stations, Overtime Compensation, Radio, Telegraph, Telephone, Vessels.
47 CFR Part 90
Monitoring stations, Radio.
47 CFR Part 94
Monitoring stations, Radio.
47 CFR Part 95
Monitoring stations, Radio.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
Final Rules
Title 47 of the Code of Federal Regulations, Parts 0, 2, 5, 21, 22,
23, 25, 73, 78, 80, 90, 94, and 95 are amended as follows:
PART 0--COMMISSION ORGANIZATION
1. The authority citation for Part O continues to read as follows:
Authority: Secs. 5, 48 Stat. 1068, as amended: 47 U.S.C. 155
2. Section 0.5 is amended by adding paragraph (a)(15) to read as
follows:
Sec. 0.5 General description of Commission organization and
operations.
(a) * * *
(15) Compliance and Information Bureau.
* * * * *
3. Section 0.111 and its preceding centered heading are revised to
read as follows:
Compliance and Information Bureau
Sec. 0.111 Functions of the Bureau.
(a) Enforce the Commission's Rules and Regulations; provide support
to other governmental units, investigate all non-government
communications matters; issue sanctions.
(b) Disseminate to the public on a local basis information
regarding communications issues and Commission rules, policies, and
programs.
(c) Collect information through a customer intelligence network to
inform the Commission on the needs of its customer and on the impact of
regulations and necessary refinements to them as suggested by the users
and the public.
(d) Participate in international conferences dealing with
monitoring and measurement; serve as the point of contact for the U.S.
Government in matters of international monitoring, fixed and mobile
direction-finding, and interference resolution. Provide technical and
administrative support on the administration of the ITU Fellowship
program and oversee coordination of non-routine communications and
materials between the Commission and international or regional public
organizations or foreign administrations.
(e) Reduce or eliminate interference to authorized communications.
Promote private sector solutions to interference problems; investigate
and resolve those unsuitable for private sector resolution or where the
private sector is unable to provide solutions. Work, in conjunction
with the Office of Engineering and Technology, with technical standards
bodies.
(f) Perform investigations in support of Commission policies.
(g) Maintain, operate, and manage the toll-free telephone receiving
center for complaint and inquiries. Coordinate with the Office of
Public Affairs and maintain liaison with the rest of the agency to
ensure that the needs of the public for information are handled
promptly, accurately, and comprehensively and that complaints are
directed to those charged with acting upon them.
(h) Under the general direction of the Defense Commissioner,
coordinate the defense activities of the Commission, and provide
support to the Defense Commissioner in his participation in the Joint
Telecommunication Resources Board and the National Security
Telecommunications Advisory Committee, including recommendation of
national emergency plans and preparedness programs covering
[[Page 8477]]
Commission functions during national emergencies. Support the Chief,
Common Carrier Bureau on assignment of Telecommunications Service
Priority System priorities and the administration of this system. The
Chief, Compliance and Information Bureau, or the designee of that
person, acts as the FCC Defense Coordinator and the principal of the
Commission to the National Communications System.
4. Section 0.185 is amended by revising the introductory text and
paragraphs (a) and (b) to read as follows:
Sec. 0.185 Responsibilities of the bureaus and staff offices.
The head of each of the bureaus and staff offices, in rendering
assistance to the Chief, Compliance and Information Bureau in the
performance of that person's duties with respect to defense activities
will have the following duties and responsibilities:
(a) To keep the Chief, Compliance and Information Bureau informed
of the investigation, progress, and completion of programs, plans, or
activities with respect to defense in which they are engaged or have
been requested to engage.
(b) To render assistance and advice to the Chief, Compliance and
Information Bureau on matters which relate to the functions of their
respective bureaus or staff offices.
* * * * *
5. Section 0.284(a)(3) and (a)(4) are revised to read as follows:
Sec. 0.284 Actions taken under delegated authority.
(a) * * *
(3) Requests for waiver of tower painting and lighting
specifications-Wireless Telecommunications Bureau.
(4) Matters involving emergency communications, including the
issuance of Emergency Alert System Authorizations (FCC Form
392)Compliance and Information Bureau.
* * * * *
Sec. 0.311 [Amended]
6. Section 0.311 is amended by removing the words, ``Chief, Field
Operations Bureau, or his designee,'' and adding in their place,
``Chief, Compliance and Information Bureau, or that person's
designee,'' wherever they occur and by removing the words, ``Field
Operations Bureau'' and adding in their place ``Compliance and
Information Bureau'' wherever they occur.
Sec. 0.445 [Amended]
7. Section 0.445(g) is amended by removing the words, ``FOB
Manual'' and adding in their place, ``CIB Manual'' wherever they occur
and by removing the words, ``Field Operations Bureau'' and adding in
their place, ``Compliance and Information Bureau'' wherever they occur.
Secs. 0.15, 0.91, 0.121, 0.317, 0.332, 0.387, 0.401, 0.431, 0.443
[Amended]
8. Sections 0.15(i), 0.91(l), 0.121(a), 0.317, 0.332(d), 0.332(h),
0.387(b), 0.401(a)(4), 0.431, and 0.443 are amended by removing the
words ``Field Operations Bureau'' and adding in their place,
``Compliance and Information Bureau'' wherever they occur.
PART 2--FREQUENCY ALLOCATION AND RADIO TREATY MATTERS; GENERAL
RULES AND REGULATIONS
1. The authority citation for Part 2 continues to read as follows:
Authority: Sec. 4, 302, 303, and 307 of the Communications Act,
as amended, 47 U.S.C. Sections 154, 302, 303, and 307, unless
otherwise noted.
2. Section 2.1204(a)(4) is amended by revising the third sentence
to read as follows:
Sec. 2.1204 Import conditions.
(a)* * *
(4) * * * Prior to importation of more than ten units, written
approval must be obtained from the Chief, Compliance Division,
Compliance and Information Bureau, FCC.* * *
* * * * *
PART 5--EXPERIMENTAL RADIO SERVICES (OTHER THAN BROADCAST)
1. The authority citation for Part 5 continues to read as follows:
Authority: Secs. 4, 303, 48 Stat. 1066, 1082, as amended; 47
U.S.C. 154, 303. Interpret or imply sec. 301, 48 Stat. 1081, as
amended; 47 U.S.C. 301.
Sec. 5.67 [Amended]
2. Section 5.67(d)(2) is amended by removing the words, ``Field
Operations Bureau'' and adding in their place, ``Compliance and
Information Bureau'' wherever they occur.
PART 21--DOMESTIC PUBLIC FIXED RADIO SERVICES
1. The authority citation for Part 21 continues to read as follows:
Authority: Secs. 1, 2 4, 201-205, 208, 215, 218, 303, 307, 313,
403, 404, 410, 602, 48 Stat. as amended, 1064, 1066, 1070-1073,
1076, 1077, 1080, 1082, 1083, 1087, 1094, 1098, 1102; 47 U.S.C. 151,
154, 201-205, 208, 215, 218, 303, 307, 313, 314, 403, 404, 602; 47
U.S.C. 552, 554.
Sec. 21.113 [Amended]
2. Section 21.113(c)(2) is amended by removing the words, ``Field
Operations Bureau'' and adding in their place, ``Compliance and
Information Bureau'' wherever they occur.
PART 22--PUBLIC MOBILE SERVICE
1. The authority citation for Part 22 continues to read as follows:
Authority: 47 U.S.C. 154, 303, unless otherwise noted.
Sec. 22.369 [Amended]
2. Section 22.369(c)(3) is amended by removing the words, ``Field
Operations Bureau'' and adding in their place, ``Compliance and
Information Bureau'' wherever they occur.
PART 23--INTERNATIONAL FIXED PUBLIC RADIOCOMMUNICATIONS SERVICES
1. The authority citation for Part 23 continues to read as follows:
Authority: Secs. 4, 303, 48 Stat. 1066, 1082 as amended; 47
U.S.C. 154, 303. Interpret or apply sec. 301, 48 Stat. 1081; 47
U.S.C. 301.
Sec. 23.20 [Amended]
2. Section 23.20(e)(2) is amended by removing the words, ``Field
Operations Bureau'' and adding in their place, ``Compliance and
Information Bureau'' wherever they occur.
PART 25--SATELLITE COMMUNICATIONS
1. The authority citation for Part 25 continues to read as follows:
Authority: Secs. 25.101 to 25.601 issued under Sec. 4, 48 Stat.
1066, as amended; 47 U.S.C. 154. Interpret or apply secs. 101-104,
76 Stat. 419-427; 47 U.S.C. 701-744; 47 U.S.C. 554.
Sec. 25.203 [Amended]
2. Section 25.203(g)(2) is amended by removing the words, ``Field
Operations Bureau'' and adding in their place, ``Compliance and
Information Bureau'' wherever they occur.
PART 73--RADIO BROADCAST SERVICES
1. The authority citation for Part 73 to read as follows:
Authority: 47 U.S.C. 154, 303, 334.
Sec. 73.1030 [Amended]
2. Section 73. 1030(c)(2) is amended by removing the words, ``Field
Operations Bureau'' and adding in their place, ``Compliance and
Information Bureau'' wherever they occur.
[[Page 8478]]
PART 78--CABLE TELEVISION RELAY SERVICE
1. The authority citation for Part 78 continues to read as follows:
Authority: Secs. 2, 3 ,4, 301, 303, 307, 308, 309, 48 Stat., as
amended, 1064, 1065, 1066, 1081, 1082, 1083, 1084, 1085; 47 U.S.C.
152, 153, 154, 301, 303, 307, 308, 309.
Sec. 78.19 [Amended]
2. Section 78.19(e)(2) is amended by removing the words, ``Field
Operations Bureau'' and adding in their place, ``Compliance and
Information Bureau'' wherever they occur.
PART 80--STATIONS IN THE MARITIME SERVICES
1. The authority citation for Part 80 continues to read as follows:
Authority: Secs. 4, 303, 48 Stat. 1066, 1082, as amended; 47
U.S.C. 154, 303, unless otherwise noted. Interpret or apply 48 Stat.
1064-1068, 1081-1105, as amended; 47 U.S.C. 151-155, 301-609; 3 UST
3450, 3 UST 4726, 12 UST 2377.
Sec. 80.21 [Amended]
2. Sections 80.21(b)(1) and 80.59(e) are amended by removing the
words, ``Field Operations Bureau'' and adding in their place,
``Compliance and Information Bureau'' wherever they occur.
PART 90--PRIVATE LAND MOBILE RADIO SERVICES
1. The authority citation for Part 90 continues to read as follows:
Authority: Sections 4, 303, and 332, 48 Stat. 1066, 1082, as
amended; 47 U.S.C. 154, 303, and 332, unless otherwise noted.
Sec. 90.177 [Amended]
2. Section 90.177(d)(2) is amended by removing the words, ``Field
Operations Bureau'' and adding in their place, ``Compliance and
Information Bureau'' wherever they occur.
PART 94--PRIVATE OPERATIONAL-FIXED MICROWAVE SERVICE
1. The authority citation for Part 94 continues to read as follows:
Authority: Sections 4, 303, 48 Stat. 1066, 1082, as amended; 47
U.S.C. 154, 303, unless otherwise noted.
Sec. 94.25 [Amended]
2. Section 94.25(i)(2) is amended by removing the words, ``Field
Operations Bureau'' and adding in their place, ``Compliance and
Information Bureau'' wherever they occur.
PART 95--PERSONAL RADIO SERVICES
1. The authority citation for Part 95 continues to read as follows:
Authority: Secs. 4, 303, 48 Stat. 1066, 1082, as amended; 47
U.S.C. 154, 303.
Sec. 95.39 [Amended]
2. Section 95.39 is amended by removing the words, ``Field
Operations Bureau'' and adding in their place, ``Compliance and
Information Bureau'' wherever they occur.
[FR Doc. 96-5041 Filed 3-4-96; 8:45 am]
BILLING CODE 6712-01-P
Complete official Federal Register PDF
FR Doc. 96-5017 Atlantic Sea Scallop Fishery; Reduction in Crew Size Limit
[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Pages 8490-8492]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5017]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
50 CFR Part 650
[Docket No. 9602226047-6047-01; I.D. 020696B]
RIN 0648-AI37
Atlantic Sea Scallop Fishery; Reduction in Crew Size Limit
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: NMFS issues this final rule to implement measures contained in
Framework Adjustment 7 to the Atlantic Sea Scallop Fishery Management
Plan (FMP). This framework adjustment permanently reduces the maximum
crew size from nine to seven.
EFFECTIVE DATE: March 11, 1996.
ADDRESSES: Copies of Amendment 4, its regulatory impact review and the
final regulatory flexibility analysis contained therein, the final
supplemental environmental impact statement (SEIS), and the supporting
documents for Framework Adjustment 7 are available from Douglas
Marshall, Executive Director, New England Fishery Management Council,
Suntaug Office Park, 5 Broadway, Saugus, MA 01906-1097.
FOR FURTHER INFORMATION CONTACT: Paul H. Jones, 508-281-9273.
SUPPLEMENTARY INFORMATION:
Background
The final rule implementing Amendment 4 to the FMP was published on
January 19, 1994 (59 FR 2777), with implementation of most measures on
March 1, 1994. The amendment retained the FMP's objectives to: (1)
Restore adult stock abundance and age distribution; (2) increase yield-
per-recruit for each stock; (3) evaluate plan research, development,
and enforcement costs; and (4) minimize adverse environmental impacts
on sea scallops.
Amendment 4 changed the primary management strategy from a meat
count (size) control to effort control. The amendment controls total
fishing effort through limited access permits and a schedule of
reductions in allowable days at sea (DAS). Supplemental measures
include limits on increases in vessel fishing power to control the
amount of fishing pressure and to help control the size of scallops
landed, gear restrictions, and limits on the number of crew members.
Additionally, the amendment includes a framework procedure for
adjusting the management measures in the FMP. Initially, the maximum
crew size was set at nine.
In response to very high levels of recruitment documented in the
Mid-Atlantic resource area, the New England Fishery Management Council
(Council) recommended lowering the maximum crew size from nine to
seven, because a smaller crew lowers shucked-scallop production. This
reduced production is exacerbated if a vessel operator is targeting
small scallops. Thus, this restriction provides an incentive to target
larger scallops in order to obtain the same amount of yield from fewer
scallops. Framework Adjustments 1 (59 FR 36720, July 19, 1994) and 4
(59 FR 36720, April 5, 1995), temporarily lowered the maximum crew size
from nine to seven. The current framework adjustment 4 expires on
February 29, 1996.
Because the conditions that justified lowering the maximum crew
size to seven still exist, the Council recommended reducing the maximum
crew-size permanently from nine to seven, until changed by plan
amendment or other action.
In Framework 1, the 7-member crew limit was expected to increase
yield-per-recruit, which would be realized during 1995 and 1996. No
preliminary 1995 data are available to document that year's yield-per-
recruit results. Yields would increase and spawning stock biomass would
be greatly enhanced, but only during 1994. With an extension of the 7-
member crew limit, similar results are expected as analyzed in
Framework 1. Increased yield-per-recruit would occur during 1997 and
1998, and spawning stock biomass would be enhanced during 1996.
The extension of the 7-member crew limit is expected to reduce
total
[[Page 8491]]
landings of sea scallops, resulting in an increase in ex-vessel prices
in 1996. The increase in ex-vessel prices should mitigate the decrease
in landings. During 1997 and 1998, landings and ex-vessel revenues are
expected to increase. After 1998, the projected impact of the 7-member
crew limit on ex-vessel revenues is projected to be negligible when
compared with projected ex-vessel revenues associated with the 9-member
crew limit.
The adjustments being made through the framework process
(Sec. 650.40) are within the scope of analyses contained in Amendment 4
and the final SEIS. Supplemental rationale and analyses of expected
biological effects, economic impacts, impacts on employment, and safety
concerns are contained within the supporting documents for Framework
Adjustments 1, 4, and 7 (see ADDRESSES).
The Council requests publication of the management measures as a
final rule after considering the required factors stipulated in the
regulations governing the sea scallop fishery (Sec. 650.40) and
providing supporting analysis for each factor considered. The Director,
Northeast Region, NMFS concurs with the Council's recommendation and
has determined that Framework 7 should be published as a final rule.
NMFS is adjusting the scallop regulations following the procedure
for framework adjustments established by Amendment 4 and codified in 50
CFR part 650, subpart C. The Council followed this procedure when
making adjustments to the FMP, by developing and analyzing the actions
over the span of a minimum of at least two Council meetings, on
December 13, 1995, and January 25, 1996.
Comments and Responses
In accordance with the regulations, public comments on the
framework adjustment were taken by the Council during its December 13,
1995, and January 25, 1996, meetings. Four members of the industry and
two fishing organizations commented at the December and January
meetings. The comments were in support of the recommended adjustment
and urged timely implementation to avoid a hiatus when the current
restriction expires.
Written comments were also received from four individuals. One
comment was in favor of the 7-member crew limit and requires no
response. The remaining comments and responses follow.
Comment 1: All commenters questioned the safety aspects of the
maximum crew size.
Response: The analysis included in the Council's framework package
suggests that, based on recent U.S. Coast Guard information (contained
in a November 8, 1995, letter, with enclosure, from Captain P. J.
Howard) about the scallop fishery, there is no relationship between the
size of the crew and accidents aboard scallop vessels. Fishers have
stated publicly that most New Bedford scallop boats carried less than
seven crew members in the winter of 1994-95, simply because scallop
stocks were low. Many fishers have also stated that there is nothing
inherently dangerous about using a 7-person crew and that safety
ultimately depends upon on-board safety practices rather than crew
size. The Coast Guard reported to the Council in the above-mentioned
November 8 letter and enclosure that there was no statistical evidence
that the number of personnel casualties has increased due to the
maximum crew restrictions.
Comment 2: The 7-person crew limit discriminates against those who
have larger, more expensive vessels. Crew size limits, if required,
should be based on horsepower, vessel length, tonnage, and size of gear
fished.
Response: The Council's policy is to treat all vessels, within the
full-time, part-time, and occasional categories, equally. The 7-person
crew limit is based on the typical full-time vessel, which generally
includes the largest, most expensive vessels and is intended to reduce
the incentive to target small scallops. Although there may be smaller,
less expensive vessels in the full-time category that already use 7-
person crews, or less, it is unlikely due to their limited crew that
these vessels pursue small scallops.
Comment 3: Wheelhouses are unmanned during haulbacks because of the
7-person crew limit.
Response: Members of the Council's Sea Scallop Industry Advisory
Committee have reported that unmanned wheelhouses are a practice found
regardless of crew size, in both dredges and groundfish trawls. The
First Coast Guard District reported to the Council that this is a
common practice among many fishing vessel operators and not unique to
the scallop fishery. In any event, the decision not to man the
wheelhouse is not a result of the 7-member crew limit but rather an
operational decision of the captain.
Adherence to Framework Procedure Requirements
Neither data availability nor the need to have the 7-person crew
limit in place for the entire harvesting season were factors considered
by the Council in its decision to recommend publishing the adjusted
management measures as a final rule.
The public had adequate opportunity to express opinions at several
meetings. The crew-limit issue was discussed at the Scallop Oversight
Committee meeting held in East Boston, MA, on November 6, 1995, and at
the Council meetings held in Danvers, MA, on December 13, 1995, and
January 24 and 25, 1996.
There is an immediate need to protect the resource by reducing the
crew limit to seven before March 11, 1996, when the current temporary
crew limit expires. Unnecessary delay in effecting this adjustment
would significantly increase the danger to the new incoming year-class
during early spring.
The Council will continue to evaluate the effectiveness of this
crew-size limit. This continuing evaluation will be made on the basis
of landings data and enforcement activity.
NMFS has determined that the framework adjustment to the FMP that
this rule would implement is consistent with the national standards,
other provisions of the Magnuson Fishery Conservation and Management
Act, and other applicable law. NMFS, in making that determination, has
taken into account the information, views, and comments received during
the comment period of the FMP's framework adjustment mechanism in 50
CFR 650.40.
Classification
This final rule has been determined to be not significant for
purposes of E.O. 12866.
In that this regulation is not subject to the requirement to
publish a general notice of proposed rulemaking under 5 U.S.C. 553 or
any other law, this rule is exempt from the requirement to prepare an
initial or final regulatory flexibility analysis under the Regulatory
Flexibility Act. As such, none has been prepared.
This rule is implemented in compliance with all procedural
requirements established by the Administrative Procedure Act. The
Council requests publication of the management measures as a final rule
after considering the required factors stipulated under the Framework
Measures in the final rule for Amendment 4 and providing supporting
analysis for each factor considered. Public meetings held by the
Council to discuss the management measures implemented by this rule
provided adequate opportunity for public comment to be considered. The
Assistant Administrator (AA) for
[[Page 8492]]
Fisheries, NOAA, finds there is good cause to waive prior and an
opportunity for public comment notice under 5 U.S.C. 553(b)(B) as such
notice and public procedure thereon are unnecessary.
The AA finds that under 5 U.S.C. 553(d) the need to protect the
resource by having the regulation in place by March 1, 1996, when the
current temporary crew-size limit expires, constitutes good cause to
waive the 30-day delay in effectiveness of this rule. Delay in
effecting this crew-size limit would significantly increase the danger
to the new incoming year class of sea scallops during early spring.
List of Subjects in 50 CFR Part 650
Fisheries, Reporting and recordkeeping requirements.
Dated: February 28, 1996.
Gary Matlock,
Program Management Officer, National Marine Fisheries Service.
For the reasons set out in the preamble, 50 CFR part 650 is amended
as follows:
PART 650--ATLANTIC SEA SCALLOP FISHERY
1. The authority citation for part 650 continues to read as
follows:
Authority: 16 U.S.C. 1801 et seq.
2. In Sec. 650.21, paragraph (c) is revised to read as follows:
Sec. 650.21 Gear and crew restrictions.
* * * * *
(c) Crew restrictions. Limited access vessels participating in or
subject to the scallop DAS allocation program may have no more than
seven people aboard, including the operator, when not docked or moored
in port, unless participating in the small dredge program specified in
paragraph (e) of this section, or otherwise authorized by the Director,
Alaska Region, NMFS.
* * * * *
[FR Doc. 96-5017 Filed 2-29-96; 4:00 pm]
BILLING CODE 3510-22-F
Complete official Federal Register PDF
FR Doc. 96-5016 Northeast Multispecies Fishery
[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Pages 8492-8495]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5016]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
50 CFR Part 651
[Docket No. 960226048-6048-01; I.D. 020996A]
RIN 0648-AI79
Northeast Multispecies Fishery
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: NMFS issues this final rule to implement measures contained in
Framework Adjustment 14 to Amendment 5 of the Northeast Multispecies
Fishery Management Plan (FMP). This rule implements a spring closure
for gillnet gear in the Revised Mid-coast Closure Area and establishes
a new Cape Cod South Closure Area off Southern New England. The intent
of this rule is to further reduce harbor porpoise mortality in the Gulf
of Maine sink gillnet fishery to meet the New England Fishery
Management Council's (Council) bycatch reduction goals.
EFFECTIVE DATES: The addition of Sec. 651.32(a)(1)(iv) and Figure 9 is
effective March 8, 1996. The amendment to Sec. 651.32(a)(1)(ii)(B) is
effective March 25, 1996.
ADDRESSES: Copies of Amendment 5, its regulatory impact review (RIR)
and the final regulatory flexibility analysis (FRFA) contained with the
RIR, its final supplemental environmental impact statement (FSEIS), and
Framework Adjustment 14 are available upon request from Douglas G.
Marshall, Executive Director, New England Fishery Management Council, 5
Broadway, Saugus, MA 01906-1097.
FOR FURTHER INFORMATION CONTACT: E. Martin Jaffe, 508-281-9272.
SUPPLEMENTARY INFORMATION:
Background
Regulations implementing Amendment 5 to the FMP were published on
March 1, 1994 (59 FR 9872). One of Amendment 5's principal objectives
was to reduce the bycatch of harbor porpoise in the Gulf of Maine sink
gillnet fishery by the end of Year 4 of plan implementation to a level
not to exceed 2 percent of the population, based on the best available
estimates of abundance and bycatch. In addition, Amendment 5
established a requirement that by September 15 of each year, the
Council's Harbor Porpoise Review Team (HPRT) complete an annual review
of harbor porpoise bycatch and abundance data in the Gulf of Maine and
evaluate the impacts of other measures that reduce harbor porpoise
take. It also encouraged the HPRT to make recommendations on other
``reduction-of-take'' measures to achieve the harbor porpoise mortality
reduction goals and established a framework procedure for timely
implementation of appropriate measures.
With the issuance of implementing regulations for Framework
Adjustment 4 to Amendment 5 of the Northeast Multispecies Fishery
Management Plan (59 FR 26972, May 25, 1994), a series of time and area
closures to sink gillnet gear were implemented based on an analysis by
the Northeast Fisheries Science Center (NEFSC) of the seasonal and
spatial distribution of harbor porpoise and sink gillnet fishing
activity in the Gulf of Maine.
This action is necessary in order to make further progress toward
the Council's bycatch reduction goals for Year 2 (1995-96) of the
Program. The target adopted by the Council was a 40 percent reduction
in the bycatch or approximately 780 animals. Due in part to the
increased bycatch rates in the Mid-coast region, incidental take of
harbor porpoise for that year may still exceed 1,500 animals. This
information and the fact that porpoise takes had also been well
documented in late March, April and May of 1995 in the Revised Mid-
coast Closure Area creates a situation in which total bycatch for the
1994-95 season had likely exceeded target levels. Prior to the proposed
framework adjustment, there have been no closures implemented to reduce
entanglement as animals move northward into the northern Gulf of Maine
and the Bay of Fundy in the spring.
This final rule implements a spring closure from March 25 through
April 25 in the Revised Mid-coast Closure Area (see Figure 8),
establishes an additional closure area--the Cape Cod South Closure
Area--south of Massachusetts and Rhode Island (Figure 9), and
implements the closure of that area from March 8 through March 30 in
1996 and from March 1 through March 30 in subsequent years. These
closure areas will be monitored to determine whether displaced gillnet
activity, if it occurs, results in increased porpoise takes.
Revised Mid-coast Closure Area--Figure 8
This area is closed from March 25 through April 25 for each fishing
year.
------------------------------------------------------------------------
Point Latitude Longitude
------------------------------------------------------------------------
MC1........................... 42 deg.30' N Massachusetts
shoreline.
MC2........................... 42 deg.30' N. 70 deg.15' W.
MC3........................... 42 deg.40' N. 70 deg.15' W.
MC4........................... 42 deg.40' N. 70 deg.00' W.
MC5........................... 43 deg.00' N. 70 deg.00' W.
MC6........................... 43 deg.00' N. 69 deg.30' W.
MC7........................... 43 deg.15' N. 69 deg.30' W.
MC8........................... 43 deg.15' N. 69 deg.00' W.
MC9........................... Maine 69 deg.00' W.
shoreline
------------------------------------------------------------------------
Cape Cod South Closure Area--Figure 9
This area is closed from March 1 through March 30 of each fishing
year, except in 1996 when the area is closed from March 8 through March
30.
[[Page 8493]]
------------------------------------------------------------------------
Point Latitude Longitude
------------------------------------------------------------------------
CCS1............................ RI shoreline 71 deg.45' W.
CCS2............................ 40 deg.40' N. 71 deg.45' W.
CCS3............................ 40 deg.40' N. 70 deg.30' W.
CCS4............................ MA shoreline 70 deg.30' W.
------------------------------------------------------------------------
Comments and Responses
The Council has considered information, views and comments made at
a meeting of its Marine Mammal Committee (MMC) held in Saugus, MA on
November 28, 1995; at an informal meeting between Council staff and
southern New England gillnet fishermen in Tiverton, RI on December 7,
1995; and at a full Council meeting (the first meeting for initiating
the framework action) held in Danvers, MA on December 13, 1995.
Documents summarizing the Council's proposed action, the biological
analyses upon which this decision was based and potential economic
impacts were available for public review 5 days prior to the second
meeting required under the framework adjustment process. Written
comments were accepted up to and at the January 25, 1996, Council
meeting in Danvers, MA, at which time the decision to finalize this
framework adjustment was made. Several individuals commented on the
Council's proposal.
Comment 1: A gillnet representative requested that the
Massachusetts Bay Closure Area continue to be effective from March 1
through March 30.
Response: The MMC proposed no change to that closure area. The
Council and NMFS agree and the Massachusetts Bay Closure will remain as
is, i.e., closed from March 1 through March 30.
Comment 2: A gillnet fisherman from Rhode Island asked that the
Cape Cod South Closure Area period be from the last 2 weeks in February
through the first 2 weeks in March.
Response: The analysis prepared by the NEFSC indicates that the
harbor porpoise takes for that area are highest in March. There have
been no takes observed in February.
Comment 3: A member of the HPRT recommended that the spring Mid-
coast area closure be longer than just April.
Response: The MMC recommended, and the Council and NMFS agree, that
effecting the Revised Mid-coast Closure Area from March 25 through
April 25 will provide the maximum harbor porpoise bycatch reduction
while minimizing the loss of fishing opportunity to harvesters using
gillnet gear, as determined by the NEFSC analysis. The Council may seek
to adjust this closure period at some future date.
Comment 4: A member of the HPRT recommended that the spring closure
in Massachusetts Bay be extended from February 1 through March 30. The
commenter also noted that it may be necessary to extend the closures in
the Mid-coast and Cape Cod South Closure Areas once additional data are
available.
Response: The Council considered several changes to the
Massachusetts Bay area closure times and determined that it had no
basis for making a change. All area closures and experimental fisheries
will be evaluated annually by the HPRT and recommendations for
adjustments will be made as necessary.
Comment 5: A member of the HPRT commented that the Council action
represented the best that could be done until more data become
available to gauge the effectiveness of previous closures.
Response: The Council will consider modifying its harbor porpoise
bycatch reduction goal to match the MMPA goal established under the
1994 amendments.
The Council also received several comments pertaining to an
experimental fishery using small acoustic devices called pingers to
deter harbor porpoise bycatch in the sink gillnet fishery. The Council
forwarded these comments to the Regional Director requesting that such
an experimental fishery be established in the closure areas during the
closure periods. The Regional Director is considering such fisheries,
which may mitigate negative economic impacts of the closures for some
fishermen. The Council considered the public comments pertaining to
this framework adjustment prior to making its recommendation to the
Regional Director under the framework provisions for the FMP.
Adherence to Framework Procedure Requirements
Data were not available for a proposed rule, and the need for
regulations to be in place for an entire fishing season is not an issue
for this particular action. The public was provided adequate
opportunity to express opinions at several meetings. These
opportunities were provided at the Council's MMC held in Saugus, MA, on
November 28, 1995; at an informal meeting between Council staff and
southern New England gillnet fishermen in Tiverton, RI, on December 7,
1995; and at two full Council meetings held in Danvers, MA, on December
13, 1995, and January 25, 1996. There is an immediate need to provide
more protection for the harbor porpoise beyond the existing management
measures. There will be further evaluation of these management measures
based on landings data, enforcement activity, and an expected
experimental fishery. NMFS has determined that the framework adjustment
to the FMP that this rule would implement is consistent with the
national standards, other provisions of the Magnuson Conservation and
Management Act, and other applicable law. NMFS, in making that
determination, has taken into account the information, views, and
comments received during the comment period of the FMP's framework
adjustment mechanism in 50 CFR 651.40.
Classification
In that this regulation is not subject to the requirement to
publish a general notice of proposed rulemaking under 5 U.S.C. 553 or
any other law, this rule is exempt from the requirement to prepare an
initial or final regulatory flexibility analysis under the Regulatory
Flexibility Act. As such, none has been prepared.
This final rule has been determined to be not significant for
purposes of E.O. 12866.
The Assistant Administrator for Fisheries, NOAA (AA) finds there is
good cause to waive prior notice and an opportunity for public comment
under 5 U.S.C. 553(b)(B) as such notice and public procedure thereon
are unnecessary. Public meetings held by the Council to discuss the
management measures implemented by this rule provided adequate prior
notice and an opportunity for public comment to be heard and
considered. The AA finds that under 5 U.S.C. 553(d), the need to have
the closure of the Revised Mid-coast Closure Area effective March 25
and the closure of the Cape Cod South Closure Area effective as soon as
possible after March 1 while at the same time providing fishermen
adequate notice to comply, to avoid delay that would likely impede the
achievement of harbor porpoise mortality reduction goals, constitutes
good cause to waive a portion of the 30-day delay in effectiveness of
this regulation. Accordingly, the closure of the Revised Mid-coast
Closure Area is effective March 25, 1996, and the closure of the Cape
Cod South Closure Area is effective March 8, 1996.
List of Subjects in 50 CFR Part 651
Fisheries, Fishing, Reporting and recordkeeping requirements.
Dated: February 28, 1996.
Gary Matlock,
Program Management Officer, National Marine Fisheries Service.
For the reasons set out in the preamble, 50 CFR part 651 is amended
as follows:
[[Page 8494]]
PART 651--NORTHEAST MULTISPECIES FISHERY
1. The authority citation for part 651 continues to read as
follows:
Authority: 16 U.S.C. 1801 et seq.
2. In Sec. 651.32 the first sentence of paragraph (a)(1)(ii)(B) is
revised and paragraph (a)(1)(iv) is added to read as follows:
Sec. 651.32 Sink gillnet requirements to reduce harbor porpoise takes.
(a) * * *
(1) * * *
(ii) * * *
(B) Notwithstanding any other provisions in this part, from March
25 through April 25 of each fishing year the restrictions and
requirements specified in the introductory text of paragraph (a) of
this section apply to an area known as the Revised Mid-coast Closure
Area, which is an area bounded by straight lines connecting the
following points in the order stated (see Figure 8 of this part). * * *
(iv) Cape Cod South Closure Area. From March 6 through March 30 of
fishing year 1996 and from March 1 through March 30 of subsequent
fishing years, the restrictions and requirements specified in the
introductory text of paragraph (a) of this section apply to an area
known as the Cape Cod South Closure Area, which is an area bounded by
straight lines connecting the following points in the order stated (see
Figure 9 of this part).
Cape Cod South Closure Area
------------------------------------------------------------------------
Point Latitude Longitude
------------------------------------------------------------------------
CCS1............................ RI shoreline 71 deg.45' W.
CCS2............................ 40 deg.40' N 71 deg.45' W.
CCS3............................ 40 deg.40' N 70 deg.30' W.
CCS4............................ MA shoreline 70 deg.30' W.
------------------------------------------------------------------------
* * * * *
3. Figure 9 is added to part 651 to read as follows:
BILLING CODE 3510-22-W
[[Page 8495]]
[GRAPHIC] [TIFF OMITTED] TR05MR96.004
Figure 9 to Part 651--Cape Cod South Closure Area for the Protection of
Harbor Porpoise
[FR Doc. 96-5016 Filed 3-1-96; 9:26 am]
BILLING CODE 3510-22-W
Complete official Federal Register PDF
FR Doc. 96-5014 Food Standards: Amendment of Standards of Identity For Enriched Grain Products to Require Addition of Folic Acid
[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Pages 8781-8797]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5014]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Parts 136, 137, and 139
[Docket No. 91N-100S]
RIN 0910-AA19
Food Standards: Amendment of Standards of Identity For Enriched
Grain Products to Require Addition of Folic Acid
AGENCY: Food and Drug Administration, HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Food and Drug Administration (FDA) is amending the
standards of identity for several enriched grain products and, by
cross-reference, the standards of identity for enriched bromated flour,
enriched vegetable macaroni, and enriched vegetable noodle products, to
require the addition of folic acid. The agency is requiring that these
products be fortified with folic acid at levels ranging from 0.43
milligrams (mg) to 1.4 mg per pound (mg/lb) or 95 micrograms
(g) to 309 g/100 grams (g), of product. These values
are based on a fortification level of 140 g/100 g (0.635 mg/
lb) of the cereal grain product. This action is being taken to help
women of childbearing age to reduce their risk of having a pregnancy
affected with spina bifida or other neural tube defects (NTD's) and to
comply with the recommendation of the U.S. Public Health Service (PHS)
that they consume at least 0.4 mg (400 g) of folic acid daily.
This action also responds to a citizen petition submitted by Glenn
Scott.
EFFECTIVE DATE: January 1, 1998.
FOR FURTHER INFORMATION CONTACT: Felicia B. Satchell, Center for Food
Safety and Applied Nutrition (HFS-158), Food and Drug Administration,
200 C St. SW., Washington, DC 20204, 202-205-5099.
SUPPLEMENTARY INFORMATION:
I. Background
Recent estimates state that there are approximately 4,000
pregnancies each year, including 2,500 live births, that are affected
by spina bifida and other neural tube defects. In September 1992, PHS
recommended that all women of childbearing age in the United States
consume 0.4 mg (400 g) of folic acid daily to reduce their
risk of having a pregnancy affected with spina bifida or other NTD's
(Ref. 1). Furthermore, PHS identified several possible approaches by
which folate intake by the target population could be increased. These
approaches included: (1) Improvement of dietary habits, (2)
fortification of the U.S. food supply, and (3) daily use of folic acid
supplements by women throughout their childbearing years. However, the
PHS recommendation cautioned against daily intakes of folate above 1
mg. A recognized adverse effect of high intakes of folate is a masking
of the anemia of vitamin B12 deficiency, allowing the neurologic damage
to progress untreated. PHS noted that care should be taken to keep
total folate consumption at less than 1 mg (1,000 g)/day,
except under the supervision of a physician (Ref. 1).
Following publication of the PHS recommendation, FDA convened a
Folic Acid Subcommittee from its Food Advisory Committee (hereinafter
referred to as the Folic Acid Subcommittee) to consider some of the
issues raised by the recommendation. After consideration debate, the
Folic Acid Subcommittee identified several approaches that might assist
women of childbearing age to increase their daily folate intake. These
approaches included: (1) Development of a fortification program such
that 90 percent of women of childbearing age could receive at least 400
g per day from all sources, while preventing
[[Page 8782]]
excessively high folate intakes by nontarget groups; (2) appropriate
labeling of foods, including dietary supplements; and (3)
implementation of an educational program directed primarily at women of
childbearing age that emphasizes the importance of folate intake before
pregnancy, and continuing into early pregnancy and its potential effect
on reducing the incidence of NTD's. (For a detailed discussion of the
issues and concerns raised by the Folic Acid Subcommittee please refer
to the Health Claims proposed rule (58 FR 23254 at 23256) and the final
rule authorizing a health claim about the relationship between folate
and neural tube defects (hereinafter referred to as the claims final
rule) published elsewhere in this issue of the Federal Register.)
After considering the suggestions of PHS and the Folic Acid
Subcommittee, FDA tentatively concluded that development and
implementation of a fortification program for the addition of folic
acid to the food supply could be an effective part of an overall plan
to increase the folate intake of women of childbearing age to assist
them in reducing their risk of having a NTD-affected pregnancy. Food
fortification, as noted by the Folic Acid Subcommittee and expert
speakers who testified before the Folic Acid Subcommittee, has the
advantage of reaching a great number of women in the target population
before conception and during early pregnancy. It also has the advantage
of providing folic acid in a continuous and passive manner and, thus,
represents a potentially effective means for improving the folate
nutriture of women throughout their childbearing years. However,
fortification must be controlled to ensure that daily intake of folate
by the target population, as well as by the general population, is no
more than 1 mg.
The issues raised by a fortification program were highlighted for
the agency in the Federal Register of October 14, 1993 (58 FR 53254),
in a document entitled ``Food Labeling: Health Claims and Label
Statements; Folate and Neural Tube Defects,'' (hereinafter referred to
as the folic acid health claims proposal) when it proposed to authorize
a health claim about the relationship between folate and the risk of
neural tube birth defects on the labels or in the labeling of foods and
dietary supplements. In the folic acid health claims proposal (58 FR
53254 at 53270), FDA acknowledged that authorizing a health claim on
folate and NTD's would create the likelihood that manufacturers would
fortify their products with folic acid so that they could qualify to
bear the claim, thereby increasing the possibility of uncontrolled
fortification of the food supply. Consequently, FDA said that any
fortification program that it adopted must be consistent with a safe
range of intake for all population groups and yet be capable of
maximizing the folate intakes of the target population within this safe
range.
The options that FDA considered for providing folic acid to women
of childbearing age through food fortification included the addition of
folic acid to cereal-grain products, fruit juices, and dairy products.
In weighing these options, FDA considered the effects of the inclusion
of folic acid in breakfast cereals and in dietary supplements. The
agency's decision to factor the amount of folic acid supplied by
breakfast cereals and supplements in its estimates of the effects of
fortification is fully discussed in the folic acid health claims
proposal (58 FR 53254 at 53276).
In determining the appropriate levels of fortification with folic
acid, the agency used the U.S. Department of Agriculture's (USDA's)
1987 to 1988 national food consumption data (Ref. 2) to estimate the
daily intake of folate for the target population, as well as for the
general population, with fortification at different levels for cereal-
grain products, dairy products, and juices. The agency estimated the
effects of fortification using three values: 70, 140, and 350
g of folic acid/100 g of cereal- grain product. As discussed
in the folic acid health claims proposal, the value of 70 g/
100 g (0.317 g/lb) is the amount recommended in 1974 by the
Food and Nutrition Board, National Research Council, National Academy
of Sciences, and would restore the folate lost in the milling of
cereal-grain products (Ref. 3). The value of 140 g/100 g is
twice that amount, and 350 g/100 g is five times that amount.
FDA's analysis showed that when fortification included fruit juices
and dairy products in addition to cereal-grain products, ready-to-eat
breakfast cereals, and dietary supplements, intakes by consumers in
some nontarget groups exceeded 1 mg/day even at the lowest level of
fortification. However, when fortification is limited to cereal-grain
products at levels of 70 g/100 g or 140 g/100 g,
estimates of daily intakes remained below 1 mg/100 g. At fortification
levels of 350 g/100 g, FDA estimated the daily intake to reach
levels of 1,220 g/day, which exceeds the recommended safe
upper limit.
The agency also estimated the daily intake of folate for consumers
who follow Federal government dietary guidance, such as the U.S.
Dietary Guidelines and the DHHS/USDA Food Guide Pyramid, and consume
cereal-grain products fortified with folic acid, to determine whether
these consumers will have daily intakes in excess of the recommended
safe upper limit of 1 mg/day.
These estimates showed that consumers who followed even the low-end
of recommendations from the USDA Food Guide Pyramid could, without
supplement use, easily consume 420 g or more of folate per day
from cereal-grain products fortified with 70 g/100 g. Further,
such consumers' daily intake could triple if such products were
fortified with 350 g folic acid/100 g.
As a result of its analysis of fortification of several cereal-
grain, dairy, and juice products, FDA tentatively determined that
fortification should be limited to cereal-grain products and not
extended to dairy products and fruit juices. The agency noted that
intakes by very large segments of the general population could reach
several milligrams per day if all of these foods were fortified with
folic acid.
The agency also tentatively decided that the appropriate
fortification level for cereal-grain products was 140 g/100 g.
Based on the results of its analysis, FDA determined that fortification
of cereal-grain products with 140 g/100 g, along with
fortification of ready-to-eat breakfast cereals up to 100 g/
serving and dietary supplements up to 400 g per unit or per
serving, would provide increased intakes of folate for women in their
childbearing years, while keeping daily intakes for the nontarget
population within the recommended safe upper limit of approximately 1
mg/day. The agency noted that even with supplement use, 95th percentile
intakes by adults 51+ years of age could reach 840 to 860 g/
day if these enriched cereal-grain products are fortified with 140
g/100 g. While the agency recognized that this level
approached the recommended safe upper limit and did not take into
account likely underreporting biases regarding food intakes and
underestimation of folate content of foods, it tentatively concluded
that fortification of cereal-grain products with 140 g/100 g
folic acid was the most appropriate fortification level of the three
levels analyzed.
In addition to estimating daily intakes of folate at the levels
cited above, FDA reviewed the existing food additive regulation
Sec. 172.345 (21 CFR 172.345) governing the use of folic acid to
determine whether the regulation was adequate to ensure that addition
of folic acid to foods would be consistent with
[[Page 8783]]
the fortification proposals discussed above. As a result of its review,
FDA recognized that the existing regulation lacked the guidance
necessary for manufacturers to decide which foods are appropriate for
fortification, and the levels at which folic acid can be added. More
importantly, FDA realized that the regulation would not have limited
the addition of folic acid to enriched cereal-grain products, breakfast
cereals, and dietary supplements. In fact, the regulation as written
would have permitted folic acid addition to virtually any food.
Thus, in the same issue of the Federal Register that the agency
proposed to authorize a health claim about the relationship of folate
and NTD's (58 FR 53254 at 53270), it published a proposal entitled
``Food Additives Permitted for Direct Addition to Food for Human
Consumption, Folic Acid (Folacin)'' (58 FR 53312) (hereinafter referred
to as the food additives proposal) to amend the food additive
regulation to restrict the addition of folic acid to specific foods. In
that document, FDA proposed, among other things, to establish a
limitation on the addition of folic acid to breakfast cereals of 100
g folic acid per serving, to retain current limitations (i.e.,
400 g/daily) on the use of folic acid in dietary supplements,
and to permit the addition of folic acid to foods as authorized by the
standards of identity. The agency tentatively concluded that such
action was necessary to establish safe conditions of use for folic acid
in the food supply and still assist the target population, women of
childbearing age, to achieve the goal recommended by PHS that they
consume at least 400 g of folate per day.
Also, in the October 14, 1993, issue of the Federal Register, FDA
published a proposal entitled ``Food Standards: Amendment of the
Standards of Identity for Enriched Grain Products to Require Addition
of Folic Acid,'' (58 FR 53305) (hereinafter referred to as the
standards of identity proposal) to amend the following standards of
identity to require the addition of folic acid at a fortification level
of 140 g/100 g: enriched bread, rolls, and buns (Sec. 136.115
(21 CFR 136.115)); enriched flour (Sec. 137.165 (21 CFR 137.165));
enriched self-rising flour (Sec. 137.185 (21 CFR 137.185)); enriched
corn grits (Sec. 137.235 (21 CFR 137.235)); enriched corn meals
(Sec. 137.260 (21 CFR 137.260)); enriched farina (Sec. 137.305 (21 CFR
137.305)); enriched rice (Sec. 137.350 (21 CFR 137.350)); enriched
macaroni products (Sec. 139.115 (21 CFR 139.115)); enriched nonfat milk
macaroni products (Sec. 139.122 (21 CFR 139.122)); and enriched noodle
products (Sec. 139.155 (21 CFR 139.155)) and, by cross-reference, the
standards of identity for enriched bromated flour (Sec. 137.160 (21 CFR
137.160)), enriched vegetable macaroni products (Sec. 139.135 (21 CFR
139.135)), and enriched vegetable noodle products (Sec. 139.165 (21 CFR
139.165)).
FDA received approximately 170 letters in response to its proposal
to amend the standards of identity for enriched cereal-grain products
to require folic acid fortification at 140 g/100 g. Each
letter contained one or more comments. The letters were from a wide
range of sources, including individual members of FDA's Folic Acid
Subcommittee and Food Advisory Committee, Federal and State Government
agencies, a foreign government, health care organizations, academia,
consumer organizations, medical professionals, consumers, industry, and
industry trade associations. Some comments supported various provisions
of the proposal. Other comments suggested modifications, revisions, or
revocations of various provisions of the proposal. Some comments raised
concerns that were more germane to issues discussed in the folic acid
health claims and food additive proposals. These comments were
forwarded to the appropriate dockets for response. Some comments raised
issues that were outside the scope of this rulemaking and will not be
addressed in this final rule. A summary of the relevant comments, the
agency's responses to the comments, and a complete discussion of the
agency's conclusions with respect to the fortification of enriched
cereal-grain products follow.
II. Comments and Agency Response
A. Fortification
1. The majority of comments recognized the need to assist women of
childbearing age to increase their daily intake of folate to reduce
their risk of an NTD-affected pregnancy. Many of these comments agreed
with the PHS' and Folic Acid Subcommittee's recommendations that
fortification of the food supply is an appropriate approach to achieve
this goal. Several comments, however, opposed the use of fortification
as a mechanism to address this need. Some of the comments opposed
fortification because of uncertainties in the efficacy data. These
comments stated that the available data do not indicate what minimum
level of folate is needed to effect a significant reduction in NTD's,
and they argued that, therefore, the decision to fortify is premature.
These comments suggested that the agency wait until additional studies
have been completed that better define the minimum level of folate
needed to be effective or that identify other alternatives that would
be effective in increasing the daily folate intake of the target
population.
While FDA recognizes that there is some uncertainty in the
literature as to the optimal intake of folate required to reduce the
risk of NTD's, PHS, in examining the data from the available human
studies, found the evidence sufficiently consistent to make its
recommendation that all women capable of becoming pregnant should
consume 400 g folic acid daily. This target intake goal
represents the best scientific judgment based on available data. It has
also been supported by the Folic Acid Subcommittee.
Furthermore, PHS, the Folic Acid Subcommittee, as well as other
medical experts, recommended food fortification as part of an overall
program to improve the folate intake of women of childbearing age. This
recommendation is based on the fact that 50 percent of pregnancies are
unplanned, and that a large segment of women in the target group will
not use folic acid supplements daily. Thus, a passive means of ensuring
that these women have adequate folate intake is important. The comments
that opposed fortification did not submit any data in support of their
position. Thus, the agency has no basis to reject the recommendations
of PHS and the Folic Acid Subcommittee to develop a folate
fortification program to assist women of childbearing age in consuming
at least 400 g/day.
Although the agency is aware that there are several ongoing studies
on the relationship between folate and NTD's, it has not been persuaded
by the comments to wait until additional studies have been completed to
determine what minimum level of folate intake is likely to be
effective. The agency has confidence in the data that suggest that at
intake levels of 400 g/day, the incidence of NTD's can be
reduced. Thus, the agency concludes that it would not be in the best
interest of women in the target group to wait until these studies are
completed and reviewed before implementing a program to assist them in
increasing their daily intake of folate.
The evidence that is available supports the position that the
consumption of folate plays an important role in reducing the risk of
neural tube birth defects. Weighing this evidence and recognizing that
the majority of women in the target population do not consume the
levels of
[[Page 8784]]
folic acid recommended to reduce the risk of neural tube birth defects
(Ref. 1), the agency concludes that it is appropriate to implement a
fortification program at this time.
Further, the agency is concerned that without the limitations that
it is adopting in this final rule, and in the final rule entitled
``Food Additives Permitted for Direct Addition to Food for Human
Consumption; Folic Acid (Folacin)'' (hereinafter referred to as the
food additives final rule) which is published elsewhere in this issue
of the Federal Register, to control the addition of folic acid to the
food supply, the authorization of the health claim about folate and
NTD's may encourage overfortification of the U.S. food supply and
increase the risk of overconsumption of folate. Because the current
food additive regulation does not limit or specify the types of foods
that can be fortified with folic acid, approval of the claim, without
any other action by the agency, could encourage manufacturers to
fortify a variety of foods to qualify the food for a health claim.
Consequently, without proper control over the types of foods that can
be fortified with folic acid, overfortification could result.
The amendment to the standards of identity for enriched cereal-
grain products to require the addition of folic acid at specific levels
will help to ensure that the addition of folic acid to the food supply
is done in a safe, rational, and reasonable manner because it will
limit the number of foods that can be fortified and limit the level of
fortification. The levels of fortification established in this final
rule, coupled with the provisions governing addition of folic acid to
nonstandardized foods established in the food additives final rule,
will meet the goal of increasing folate intake among women of
childbearing age while keeping the daily consumption of folate below
the safe upper limit of 1 mg/day.
2. Comments that opposed fortification asserted that consumers
believe that fortification as proposed denies freedom of choice and
control over daily folate intake and is, therefore, viewed as an
attempt to medicate people without obtaining informed consent. These
comments further asserted that fortification, as proposed, subjects
them to the risk of overconsumption. As an alternative, these comments
suggested that the effort to increase dietary folate intake in the
target population focus on the use of dietary supplements because the
amount of intake can be better controlled. They suggested that FDA work
with other public health service agencies to establish policy
initiatives equivalent to those used by the food and dietary supplement
industries to market their products.
The agency disagrees with these comments. The agency is providing
for fortification with folic acid only in the standards of identity for
enriched cereal-grain products. Unenriched cereal-grain products
without folic acid will continue to be available. Consumers will be
able to select foods made with the unenriched version of the product if
they wish to avoid folic acid. Furthermore, the estimated daily intakes
that will result from the level of fortification established in this
final rule are well below the level of folic acid traditionally used to
treat persons with folate deficiency. Therapeutic dosages of folic acid
used for treatment of folate deficiency are generally in the range of 1
to 5 mg/day and are administered under the supervision of a physician.
Therefore, the comments that suggest that fortification of enriched
cereal-grain products is an attempt to medicate the U.S. population
simply have no basis in fact.
Furthermore, the intakes that are likely to result from the level
of fortification established in this final rule do not present a health
concern to the general population, especially in conjunction with the
provisions of the food additive final rule published elsewhere in this
issue of the Federal Register. FDA has projected the total daily intake
of folate that is likely to result from the levels of fortification
that FDA is requiring and determined that it is well within the safe
upper limit of intake. Moreover, cereal-grain products have a long
history of being vehicles for improving the nutrient intake of the U.S.
population. FDA requires the addition of niacin, thiamin, and
riboflavin in the standards of identity for enriched cereal-grain
products to improve the daily intake of these nutrients. Fortification
of these products was instrumental in reducing the prevalence of
diseases related to insufficient intake of these vitamins.
In response to the comments that suggested that FDA rely on the use
of dietary supplements to increase daily folate intake, the agency
notes that in requiring the fortification of enriched cereal-grain
products, it is not discounting the use of dietary supplements to
assist women in the target group to increase their daily folate intake.
In fact, the agency included the use of dietary supplements in its
estimates to determine the appropriate level for fortification of
enriched cereal-grain products. However, the agency is not confident
that the use of dietary supplements alone will be sufficient to reach
the target population when folate intake is critical (i.e., before and
during the first 6 weeks of pregnancy).
During the first 6 weeks of pregnancy many women are not even aware
that they are pregnant and would likely not be under the care of a
physician. Thus, as stated in several comments, there would be no
reason to expect the many women who do not normally take supplements
daily to be motivated to change this behavior. Therefore, supplement
use cannot be relied on as the sole source for increasing dietary
folate intake. As discussed above, the use of fortification of cereal-
grain products has the advantage of providing folic acid in a
continuous and passive manner and, therefore, should be an effective
means for improving the folate nutriture of women in their childbearing
years.
3. A few comments opposed to fortification suggested that, as an
alternative, FDA encourage women in the target group to increase their
daily folate intake by increasing consumption of foods that naturally
contain high levels of folate such as blackeye peas.
While FDA finds merit in the comments' suggestion to encourage
women in the target group to increase their daily folate intake by
increasing their consumption of foods naturally high in folate, the
agency is not persuaded that such action makes food fortification
unnecessary. The dietary guidance suggested by the comment can be used
in conjunction with food fortification, as part of a program designed
to help women in the target group to increase their daily folate
consumption. A health claim about the relationship between folate and
NTD's on a food that qualifies to bear the claim will contribute to
such a program, regardless of whether the food naturally qualifies to
bear the claim or qualifies on the basis of its fortification level. In
addition, foods that naturally contain folate and qualify to bear a
health or nutrient content claim are likely to be highlighted as a
source of this nutrient. Such claims will encourage women in the target
group to select these foods as a part of their diet.
Most significantly, however, given the value of adequate folate
intake by women of childbearing age and given the value of a program
that allows women to obtain adequate folate by simply consuming such
staples as bread and rolls, FDA sees no reason not to require
fortification of such foods, even though foods exist that are naturally
high in folate.
4. Some comments opposed to fortification opined that fortification
[[Page 8785]]
would not assure physicians and health care professionals that their
patients are obtaining adequate amounts of folate from the food supply
because the bioavailability of folate in foods is 25 to 75 percent
depending on the food.
As discussed in the folic acid health claims proposal, FDA
considered several issues in developing its options for fortification.
With respect to issues of bioavailability, FDA concluded that
bioavailability cannot be meaningfully factored into fortification
scenarios because issues of bioavailability are very complex, and no
systematic data are available on many of the factors that affect
bioavailability. Consequently, the estimates developed by FDA focused
more on consumption patterns of various staple foods, and their
availability and use in the U.S. food supply, than on the
bioavailability of folic acid from a specific food.
The comment did not provide information to persuade the agency that
the complexity associated with bioavailability would significantly
reduce the effectiveness of food fortification as part of an overall
effort to improve folate nutriture among women in the target group.
5. Two comments recommended revising the proposal to require the
addition of vitamin B12 in a one-to-one ratio with folic acid. The
comments contended that doing so will not only prevent vitamin B12
deficiency, but it will also prevent the masking effect that may be
caused with high consumption of folate. One comment urged FDA to design
research that will determine the safety and effectiveness of fortifying
the food supply with vitamin B12 along with folic acid because
such fortification could eliminate the adverse effect of folate on
vitamin B12 deficiency.
The agency is not persuaded that the approach suggested by these
comments addresses all of the safety concerns relating to persons with
vitamin B12 deficiencies. As fully discussed in the food additives
final rule, FDA rejects this recommendation because the available data
do not establish that requiring the addition of vitamin B12
whenever folic acid is added will eliminate the safety concerns
relating to persons with vitamin B12 deficiencies that arise
because of deficiencies in intrinsic factor (pernicious anemia) or
other B12-related deficiencies.
6. Two comments opposed to fortification stated that FDA should
take the same position with respect to folic acid fortification that it
did when it decided not to fortify foods with iron in the 1970's
because of the concern about iron storage diseases.
While the agency acknowledges that it considered taking a similar
approach to increase the amount of iron provided by the diet when it
proposed to double the amount of iron added to enriched cereal-grain
products, the agency did not finalize that proposal because of
significant safety concerns regarding the risk of iron storage
diseases. Rather, the agency retained the existing level of iron
fortification for cereal-grain products. The agency does not have
similar safety concerns about the level of folic acid fortification
that it is requiring in this final rule because it has concluded, based
on a safety review (as fully discussed in the food additives proposal
and final rule), that this required level is safe and will not result
in overconsumption of folate.
B. Covered Products
7. Some comments stated that dietary consumption studies indicate
that women of reproductive age are less likely than other groups to
consume enriched cereal-grain products that conform to a standard of
identity, and that, therefore, the use of such foods as a vehicle for
folic acid fortification would not significantly affect the risk of
NTD's. These comments argued that, instead, fortifying these foods will
only increase the amount of daily folate intake among the nontarget
groups.
In selecting cereal-grain products as vehicles for fortification,
the agency started with the basic principle that fortification of
staple products that are commonly consumed in significant amounts by
virtually all members of the target population is most likely to result
in increased intakes of a specific nutrient by the target population.
Although the agency recognizes that current survey data suggest that
consumption of enriched grain products may be somewhat lower in the
target population than in other groups, these foods still are reported
to be consumed on a daily basis by more than 90 percent of women of
childbearing age (Ref. 4). In addition, data show that the difference
between target and nontarget populations in consumption of other foods
considered as fortification vehicles, such as dairy products and
juices, is even greater (Ref. 4). Therefore, the other foods would be
no more appropriate as fortification vehicles for maximizing folate
intake by the target group, and yet maintaining safe consumption by
nontarget groups, than cereal-grain products.
The agency notes that cereal-grain products were recommended by the
Food and Nutrition Board in its 1974 report on food fortification as
fortification vehicles because of the patterns of consumption of these
foods. In addition, enriched cereal-grain products have a long history
of being successful vehicles for improving the nutriture of the U.S.
population and for reducing the risk of nutrient deficiency diseases.
Thus, the agency concludes that enriched cereal-grain products are an
appropriate vehicle to increase daily folate intake among women of
childbearing age. In fact, the estimates that FDA developed in
evaluating options for folic acid fortification demonstrate that the
addition of folic acid to enriched cereal-grain products, coupled with
the addition of this nutrient to breakfast cereals and dietary
supplements, will help to significantly increase the daily folate
intake of women in the target group (see Table 7 of 58 FR 53254 at
53295)).
Furthermore, increasing awareness of the role of folate in reducing
the risk of neural tube birth defects through the use of health claims
and other educational initiatives should encourage women in the target
group to increase their daily folate intake by consuming folate
containing foods, including enriched cereal-grain products. Consumption
of cereal-grain products is also likely to be influenced by current
dietary guidelines that promote increased consumption of these foods.
8. Other comments requested that FDA permit the addition of folic
acid to other cereal-grain products such as whole grain flours, breads,
cereals, macaroni products, rice, and grits and not just the enriched
cereal-grain foods that conform to a standard of identity. The comments
argued that without these products being fortified, consumers may be
encouraged to eat enriched refined grains instead of their whole grain
counterparts and consequently follow dietary patterns that are
inconsistent with current dietary guidelines to eat whole grain
products.
FDA did not propose to provide for the addition of folic acid to
whole grains or products from whole grains because, traditionally,
these products are not enriched. Whole grain wheat products naturally
contain higher levels of the B vitamins, including folate, because the
germ and bran layer are not removed when the wheat kernel is processed.
FDA's standards of identity for cracked wheat, crushed wheat, and whole
wheat flour, in Secs. 137.190, 137.195, and 137.200, respectively,
state that the proportions of the natural constituents of such wheat,
other than the moisture, remain unaltered by the manufacturing process.
In establishing the standards of identity for the enriched cereal-grain
products, the agency's initial goal was to
[[Page 8786]]
restore thiamin, niacin, and riboflavin, nutrients that are removed
when the bran layer and germ are removed during the processing of
wheat. Subsequently, the agency required the addition of iron to the
enriched grain and also provided for the optional addition of other
nutrients, such as calcium and vitamin D.
The estimates that the agency has relied on in selecting a
fortification level of 140 g/100 g considered only
fortification of breakfast cereals, dietary supplements, and
standardized enriched cereal grain products and did not include
fortification of other nonstandardized or unenriched standardized
cereal-grain products. Consequently, including such foods in the
fortification program could result in a daily intake of folate that is
above the safe upper limit of 1 mg/day. Thus, the agency is not
persuaded by the comment that other cereal-grain products should be
fortified with folic acid.
With regard to the concern raised in the comment that fortification
of enriched cereal grain products may encourage consumers to choose
these products over their whole grain counterparts, the comment did not
provide any support for its concern. The decision to fortify enriched
cereal grain products at the level of 140 g/100 g is based on
current dietary consumption patterns. The agency is not persuaded by
the comments that the addition of folic acid will significantly change
consumption patterns of the target population. There is no evidence
that women will suddenly start consuming enriched products instead of
whole grain foods. In fact, one reason the agency has decided to
require the fortification of enriched cereal-grain products is to
enable women of childbearing age to significantly increase their daily
folate intake without changing their dietary habits. Finally, the
agency notes that while current dietary recommendations do encourage
increased consumption of whole grain foods, they also encourage
consumption of all cereal-grain products.
9. One comment expressed concern that the agency's tentative
decision to fortify cereal-grain products was unfair to the cereal-
grain industry because it singled out one segment of industry to
address a health concern. (The agency notes that the comment was not
submitted by a member of the cereal grains industry.)
As discussed in the folic acid health claims proposal, FDA
considered several options that included fortification of dairy
products and juices before concluding that the most appropriate option
was to limit fortification to enriched cereal-grain products. Aside
from the fact that these products have a long history of successful use
as vehicles for increasing nutrient intake among U.S. consumers,
consumption data and other relevant information reviewed by the agency
show that these products are consumed routinely on a daily basis by 90
percent of women in the target group. Furthermore, some comments
submitted to the docket by representatives of the cereal grains
industry stated that, generally, these products can be easily fortified
with folic acid. Therefore, FDA concludes that the enriched cereal-
grain products are the appropriate foods for fortification, and that
fortification of these products is not unfair to the industry.
C. Fortification Level
10. In the standards of identity proposal, FDA requested comments
on whether the proposed fortification levels discussed for enriched
cereal-grain products were appropriate. Comments responding to this
issue were varied. Some comments that supported fortification of
cereal-grain products stated that the proposed levels were too low to
have any appreciable effect on reducing the risk of NTD's in the target
population. One of these comments urged the agency to revise its
proposal and require fortification at levels of at least 210
g/100 g. However, the majority of these comments recommended
that FDA require fortification of folic acid within the range of 250 to
350 g/100 g. In support of their position, these comments
contended that this range was well within limits for safety and should
not mask the effects of vitamin B12 deficiency. One comment
further argued that at a fortification level of 350 g/100 g,
95 percent of persons in the nontarget population would not consume
more than 1 mg per day. One comment recommended 400 g/100 g
for cereal-grain products. This comment argued that fortification of
enriched cereal-grain products should be at the same level as dietary
supplements.
However, supplemental comments submitted by a majority of the
organizations supporting a higher fortification level, stated that
implementing fortification at a level of at least 140 g/100 g
will constitute a critically important step forward for the health of
American children. Some of these comments further stated that
fortification with at least 140 g/100 g will be the most
efficient and cost-effective approach to ensuring that women of
childbearing age consume the level of folic acid recommended to reduce
the risk of having a neural tube defect affected pregnancy.
The agency agrees with the latter comments. As discussed in the
folic acid health claims proposal (58 FR 53254 at 53279), fortification
of cereal-grain products at 140 g/100 g will produce a
significant increase in daily folate intake, even for women who make
food choices from the ``low'' range of the USDA Food Guide Pyramid and
consume only 5 servings/day of cereal-grain products and 1 bowl of
cereal containing a minimum of 100 g of folic acid. From these
sources alone, these women will consume about 320 g of folic
acid. Addition of a serving or two of vegetables, or of a serving of
fruit, will provide them with a folate intake above 500 g/day.
Thus, fortification of cereal-grain products at 140 g/100 g is
an important step in assisting women of childbearing age achieve the
PHS recommendation of consuming 400 g.
However, if cereal-grain products were fortified at 350 g/
100 g, and the dietary choices indicated above were made, a ``low''
consumer would obtain 610 g folic acid daily from these
sources alone. Thus, at a fortification level of 350 g/100 g a
``high'' consumer could reach intakes of folic acid of more than 1 mg/
day from bread, noodle, rice, and pasta products alone. Additional
consumption of breakfast cereals, fruits, vegetables, and a dietary
supplement by ``high'' consumers could result in daily intakes of
folate of about 2.5 mg/day, a level significantly above the safe upper
limit of daily intake of 1 mg.
The comments supporting fortification of enriched cereal-grain
products at levels above 140 g/100 g did not provide any
information to the agency that it had not considered in developing its
proposed rules. Nor did the comments offer alternative fortification
schemes that would allow addition of folic acid to enriched cereal-
grain products at levels exceeding 140 g/100 g yet limit the
daily intake of folate to levels that are within the safe upper limit
of 1 mg/day. Consequently, FDA disagrees with those comments that
suggested that enriched cereal-grain products be fortified at levels of
at least 210 g/100 g. There simply is no evidence in the
record that such a fortification program would keep folate intakes
within the safe upper limit.
Accordingly, as proposed, the agency is requiring the addition of
folic acid to enriched cereal grain products at a fortification level
of 140 g/100 g. FDA concludes that 140 g/100 g is the
maximum level of fortification of enriched cereal-grain products that
would be safe for all groups.
[[Page 8787]]
Nonetheless, as the agency states in the final rule on the use of
folic acid as a food additive, which is published elsewhere in this
issue of the Federal Register, given the nature of the support for
higher folic acid fortification levels in the comments, if evidence
becomes available to support that there is a reasonable certainty of no
harm at folate intakes above 1 mg/day, FDA would be willing to
reconsider the fortification levels that it is adopting and to consider
raising those levels.
11. Other comments opposed fortification at the proposed level of
140 g/100 g on the grounds that it is too high. These comments
asserted that such fortification may increase the risk of consuming
folate at levels in excess of the safe upper limit of 1 mg/day in a
substantial portion of the general population. Some of these comments
suggested that FDA consider the lower fortification level of 70
g/100 g in conjunction with an educational campaign that could
still be effective in reducing the risk of NTD's yet not pose the risk
of daily consumption of folate in excess of 1 mg/day.
In support of their position, some of these comments noted that the
Food and Nutrition Board recommended the fortification of cereal-grain
products at 70 g/100 g to restore folate lost in the milling
of cereal-grain products. Another comment supporting fortification at
the restoration level contended that such action would permit
additional restorations of nonstandardized foods such as breakfast
cereals. One comment from a foreign government questioned FDA's
decision to require folic acid fortification of all enriched cereal-
grain products when the data do not clearly establish the effectiveness
and safety of the proposed intervention program. However, the comment
suggested support of the Food and Nutrition Board's 1974 proposal for
cereal grain fortification, i.e., fortification with folic acid at 70
g/100 g.
In the standards of identity proposal, FDA tentatively concluded
that fortification of cereal-grain products with 140 g/100 g
folic acid was the most appropriate fortification level of the three
levels analyzed to ensure that folate intakes by the target population
would increase. The comments have not persuaded the agency that a
fortification level of 70 g/100 g could be as effective in
assisting women in the target population to achieve the PHS recommended
daily intake of 400 g. In fact, at a fortification level of 70
g/100 g, the estimated daily folate intake by ``low''
consumers among women of childbearing age is not likely to reach the
PHS recommended levels of 400 g/day without changes in their
food selection practices (see Table 4 of 58 FR 53254 at 53292). While
the agency must ensure that the use of folic acid in the food supply is
safe, it must also provide as great an opportunity as is prudent and
rational for all women of childbearing age to increase their intake to
the recommended level. The agency concludes that a level of 140
g/100 g is the most appropriate fortification level for
enriched cereal-grain products because, based on the results of its
estimated daily intakes, fortification at this level will provide daily
intakes for the nontarget population that remain within the recommended
safe upper limit of 1 mg/day, while providing increased intakes of
folate for women in their childbearing years (see Table 7 of 58 FR
53254 at 53295).
The agency notes, however, that it has reconsidered its proposed
fortification level for breakfast cereals. As fully discussed in the
food additives final rule, published elsewhere in this issue of the
Federal Register, FDA is permitting breakfast cereals to contain up to
400 g of folic acid per serving. As explained in that
document, the estimates for total daily folate intake that FDA
presented in the folic acid health claims proposal were based on the
assumption that all breakfast cereals were fortified at 400 g/
serving. Based on those estimates, daily folate intake for certain
groups in the nontarget population could exceed the recommended safe
upper limit of 1 mg/day. Currently, however, only about 3 to 6 percent
of breakfast cereals fortify at 400 g/serving. The agency has
found no reason to expect that this percentage will change and,
therefore, considers it unlikely that daily folate intake in the
nontarget population will exceed 1 mg with the fortification program
adopted in this final rule and in the food additives final rule.
D. Optional Versus Mandatory
Because of the increased health risk to persons with vitamin B
12 deficiency caused by increased levels of folate intake, FDA
solicited comments in the standards of identity proposal on whether the
addition of folic acid to enriched cereal-grain products should be
required as proposed or made optional.
12. A few comments fully supported the agency's proposal to require
folic acid addition to the enriched cereal-grain products. These
comments contended that required addition of folic acid was an
appropriate means of increasing the daily folate intake of women in the
target population. However, the majority of the comments that responded
to this issue stated that fortification should be voluntary. The
comments cited varied reasons in support of their position. Some
comments stated that the addition of folic acid to enriched cereal-
grain products should be optional pending further evidence that the
benefits outweigh the risk of masking vitamin B12 deficiency.
These comments contended that mandatory fortification of a wide variety
of common products may create difficulty for people wishing to avoid
folic acid. Furthermore, the comments asserted that FDA failed to
establish why mandatory fortification would be necessary given that
under current regulations voluntary fortification of standardized foods
with folic acid is prohibited.
Other comments recommended optional fortification so that millers
will not have to change their enrichment premixes for the general flour
supply, thereby minimizing the costs associated with fortification,
i.e., label changes, analytical testing, and inventory and supply
coordination, especially for products exported to countries that do not
permit folic acid fortification. The comments also stated that
voluntary fortification would facilitate compliance with the various
State enrichment laws.
A few comments opposed to mandatory fortification stated that FDA
failed to offer information as to why voluntary fortification would not
be sufficient to accomplish the public health goal of decreasing the
incidence of pregnancies with neural tube birth defects. The comments
urged FDA to establish a voluntary fortification program for enriched
cereal-grain products and to reassess the need for a mandatory
fortification in several years. One of these comments acknowledged,
however, that it is difficult to predict the extent of voluntary
fortification.
A small number of comments supported voluntary fortification for
only the enriched noodle and macaroni products. The comments contended
that voluntary compliance is consistent with FDA's current standards of
identity for enriched noodle and macaroni products with regard to
vitamin D, calcium, and wheat germ.
The agency does not agree with the comments that argued that the
fortification of enriched cereal-grain products should be voluntary. In
accepting the PHS' and Folic Acid Subcommittee's recommendation to
include fortification as part of an overall plan to increase the folate
nutriture of women of childbearing age, FDA has concluded that in order
for a fortification program to be effective,
[[Page 8788]]
fortification must be mandatory for the enriched cereal-grain products.
FDA is concerned that if it made fortification voluntary, and voluntary
fortification were not widespread, there would be only a negligible
increase in the daily folate intake of the target group, and the intent
of this rulemaking would have been defeated. FDA finds that there is a
public health need for women in their childbearing years to have
adequate folate intake, and that the only way that it can ensure that
they will have such an intake is through mandatory fortification.
FDA has traditionally used mandatory fortification to restore
nutrients lost during the processing of cereal grains and thereby to
address the need for reducing the risk of certain vitamin deficiency-
related problems. The comments have not persuaded the agency that the
same basic approach should not be applied in this case, where low
folate intake represents a risk factor for a neural tube defect-
affected pregnancy. USDA consumption data show that 90 percent of women
of childbearing age consume cereal-grain products. Thus, mandatory
fortification of cereal grains will, as stated above, increase folate
intake among the target group, without requiring significant change in
dietary patterns. Consequently, mandatory fortification of enriched
cereal grains will help to ensure that the daily intake among the
target group will reach the PHS recommended level of 400 g.
Voluntary fortification does not offer the same likelihood that folate
intake will result in intakes that approach the PHS recommendation
because the decision to fortify with folic acid will be at the
discretion of individual manufacturers. Therefore, voluntary
fortification will not adequately address the need for increased folate
intake among women of childbearing age.
FDA derived the fortification levels established in this final rule
based in part on a safe upper limit of 1 mg folate/day. The agency has
concluded that mandatory fortification of the enriched cereal-grain
products at the levels provided in this final rule is not likely to
increase the risk of ``masking'' anemia in vitamin B12 deficient
persons. Thus, the fortification program that FDA is adopting will help
to ensure that the amount of folate that people in all groups of the
population can reasonably be expected to consume will not exceed 1 mg/
day. As discussed in the food additives final rule, the agency has
examined the available data on the levels of folate that may mask
anemia of vitamin B12 deficiency and concluded that a daily intake
of up to 1 mg of folate is safe.
In response to concerns raised by millers regarding label changes,
analytical testing, and inventory and supply coordination, FDA
recognizes that manufacturers will need ample time to implement the
changes required by this amendment of the standards of identity. As
discussed below in the effective date section, FDA is permitting
manufacturers time to coordinate any necessary changes that need to be
made throughout the chain of food production to comply with the
requirements established in this final rule as well as with the
requirements set out in part 101 (21 CFR part 101).
The agency notes that manufacturers will continue to have the
option of using unenriched cereal-grain products as ingredients in
foods and to add enrichment nutrients to those products as they choose.
Several comments from industry representatives raised a concern that
the provisions in the food additive proposal would not permit addition
of folic acid at the bakery site. To the contrary, as discussed in the
food additives final rule, FDA will permit addition of folic acid at
the bakery site as long as it is in compliance with the governing
standard of identity. Consequently, manufacturers will have the same
option of adding folic acid as they have with other enrichment
nutrients when preparing foods that are made with unenriched cereal-
grain ingredients. The agency notes, however, that any products
marketed as a standardized enriched cereal-grain product will have to
contain folic acid at the levels established in this final rule, and
that these requirements preempt state enrichment requirements that are
not identical (see section 403(a) of the act (21 U.S.C. 343(a))).
With regard to exported products, the agency recognizes that
manufacturers may be required to maintain separate inventories for
foreign and domestic sales. While FDA recognizes the importance of
reducing trade barriers, its first obligation is to protect and promote
the health of U.S. consumers. In that regard, the agency concludes
that, because the fortification program adopted in this final rule is
necessary to significantly reduce the incidence of neural tube defect
affected pregnancies, it would not constitute an illegal trade barrier.
E. Other Issues
13. One comment from a consumer interest group recommended that if
research and monitoring does not establish in the next 2 years that the
risk of increasing folate intakes is significant for persons affected
with vitamin B12 deficiency or any folate-related diseases, then
FDA should increase the fortification levels in grain products or other
foods and require that upper safe limits be disclosed in higher dose
products. This comment urged FDA to initiate a rulemaking to restore
refined grain products with most of the vitamins and minerals that are
removed during milling as recommended by the Food and Nutrition Board
in 1974. The comment stated its belief that such an approach would
raise few safety concerns and would not be costly because manufacturers
are already equipped to add nutrients to food.
FDA cannot at this time commit to increasing the levels of folic
acid that may be added to food within the next several years. However,
as stated above, should data become available that demonstrate that
modifications need to be made to improve the effectiveness of the
intervention program, and evidence be developed that the safe upper
limit can be raised, FDA will decide what action is necessary. The
agency notes, however, that the action it is taking in this rulemaking
will more than compensate for the amount of folate lost during the
milling process.
As for the comment's request that FDA initiate rulemaking to
restore to refined grain products other vitamins and minerals that are
removed during milling raises, the agency notes that the request issues
outside the scope of this rulemaking. Therefore, no action on this
request is appropriate at this time.
14. Several comments raised concern regarding the impact of the
proposed regulation on foreign trade. One comment from a foreign trade
association urged FDA to delay finalizing the proposed regulation to
provide the International Harmonization Working Groups the opportunity
to review the proposal and recommend a strategy that would serve public
health goals, while achieving the spirit and intent of the North
American Free Trade Agreement (NAFTA). Another comment stated that the
extra costs and inherent inefficiencies of separate production runs
could preclude some manufacturers from the export marketplace.
Other comments stated that the lack of consistent requirements for
folic acid fortification between major trading partners, e.g., the
United States and Canada, would create problems in cross-border trade
and could result in higher costs for both U.S. and foreign consumers.
Furthermore, these comments asserted that inconsistent requirements
could reduce the competitiveness of domestic
[[Page 8789]]
manufacturers who export their products. Thus, the comments urged FDA
to resolve the issue of exporting folic acid enriched products to
foreign countries by working with foreign governments to permit export
of folic acid-enriched food.
FDA recognizes that the provisions it is adopting in this final
rule may be inconsistent with the fortification policies of other
countries. However, as discussed above, the agency finds that the
action that it is taking in this final rule is necessary to adequately
protect the public health of U.S. consumers. FDA will continue to work
with officials in other countries, particularly parties to NAFTA, to
find ways to reduce barriers to cross-border trading of cereal-grain
products and other foods.
F. Specific Standards of Identity
In this document, the agency is providing for the addition of folic
acid at the level of 140 g/100 g to the individual enriched
cereal-grain products that are the subject of standards of identity.
The agency described indepth the method that it used in arriving at the
levels of addition for folic acid in the specific standards of identity
in the standards of identity proposal. FDA will not describe that
method again in this document except to the extent that clarification
is warranted in response to specific comments. For a complete
discussion of the basis on which FDA established the enrichment levels
for the subject standards of identity, the agency refers interested
persons to the standards of identity proposal (58 FR 53305 at 53307 to
53309).
1. Bakery and Wheat Flour Products
15. One comment, while supportive of the proposal to fortify
cereal-grain products, suggested that a range of levels be permitted
for addition of folic acid to all enriched cereal-grain products
because of the inherent variation in the addition of the vitamins, the
distribution of the vitamins in a food, and the analytical methodology.
The comment suggested that FDA permit the addition of folic acid within
a range of 24 to 35 percent over the amount established for each
individual standard. For example, the comment suggested that the
proposed amount of 0.7 mg/lb for enriched flour should be revised to
0.7 to 0.91 mg/lb. The comment argued that this scheme is the same as
that used for enrichment in the macaroni and noodle standards and is
needed for the same reasons that it is provided for in those standards.
FDA does not agree that it is necessary to provide for a range in
the level of folic acid used in the production of all enriched cereal-
grain products. Providing for a single level, with provision for
reasonable overages within the limits of current good manufacturing
practice (CGMP), has worked well with the other nutrients (thiamin,
niacin, riboflavin, and iron) required to be added to enrich bread,
rolls, and buns and various flour products. The provision for
``reasonable overages'' in the standards for enriched bread, rolls, and
buns (Sec. 136.115(a)(3)) and enriched flour (Sec. 137.165(c)) provides
manufacturers with flexibility to ensure that required levels for the
added nutrients will be met, and that these levels will be maintained
throughout the shelf life of the food under customary conditions of
distribution and storage. While FDA is not establishing a specific
upper limit for folic acid addition, the agency advises that reasonable
variations for overages of folic acid will be assessed on the same
basis as that for the other added nutrients in these foods. Those
reasonable variations are based on a number of factors, including the
technology of nutrient addition, the possibility of nutrient
deterioration, the firms' quality control procedures, and appreciation
by the manufacturer of these factors.
FDA acknowledges that some of the standards for enriched cereal-
grain products that are the subject of this final rule specify the
levels of added nutrient (thiamin, riboflavin, and iron) in terms of
ranges, and FDA has continued this approach with respect to the
addition of folic acid in those products. In addition, the agency notes
that it received a petition (Docket No. 94P-0413/CP 1) subsequent to
the issuance of the folic acid health claims proposal to amend the
standards for enriched macaroni and noodle products to provide for
nutrient addition in terms of a single level with provision for
reasonable overages. However, FDA is not making the change to a single
enrichment level in those standards at this time because, while it has
reached a final decision on folic acid fortification, it has not had an
opportunity to fully analyze the petition. FDA is not aware of any
reason why it should delay action in the present rulemaking while it
analyzes the petition. Thus, until such time as the agency rules on the
petition, the standards in question will continue to provide for
nutrient addition in terms of ranges.
The ranges established in those standards provide a measure of
flexibility in selecting the target level when nutrients are added to
foods that consist of large particles such as farina or rice, or for
preparations (e.g., semolina or other ingredients) used for
manufacturing enriched macaroni or noodle products. The nutrients,
which usually are in the form of a fine powder, have a tendency to
settle out and to make uniform blends with the cereal grains more
difficult to achieve. In such instances, manufacturers, depending on
their application process, may select target levels at the upper end of
the range to ensure that the minimum levels established for the
nutrients will be met. Thus, to enable manufacturers to adhere to
procedures that will deliver the minimum level of nutrients required by
the standards and to compensate for variables in the processing
operations, the agency is continuing to provide for nutrient additions
in terms of ranges for the other enriched foods as set forth below.
FDA also notes that the regulations for nutrition labeling in
Sec. 101.9(g)(4)(i) require that added nutrients be present in the food
at levels that are at least equal to the amount declared on the label.
In addition, Sec. 101.9(g)(6) provides for reasonable overages within
the limits of CGMP. Thus, the manufacturer bears the responsibility of
ensuring that not only will the requirements for added nutrients in the
respective standards of identity be met, but also that the content of
any added nutrient is accurately declared in nutrition labeling.
Therefore, consumers should receive the stated quantity of each added
nutrient whether the standard provides for the added nutrient in terms
of a single level or a range.
a. Enriched flour. No specific comments were received on the
fortification of enriched flour with folic acid. Thus, as proposed, FDA
is requiring that enriched flour contain 0.7 mg/lb of folic acid. FDA
derived this value by adding the fortification level of 0.635 mg/lb to
the Food and Nutrition Board's folate value of unfortified flour of
0.076 mg/lb, which yields 0.711 mg/lb. The agency rounded this value to
0.7 mg/lb. Accordingly, based on this calculation, FDA is amending the
standards of identity for enriched flour (Sec. 137.165) and enriched
self-rising flour (Sec. 137.185), and, by cross-reference, enriched
bromated flour (Sec. 137.160), to require that these foods contain 0.7
mg/lb of folic acid.
b. Enriched bread, rolls, and buns. FDA is amending the standards
of identity for enriched bread, rolls, and buns in Sec. 136.115 to
require that these foods contain 0.43 mg/lb of folic acid. This rate of
fortification is proportionally consistent with the fortification rate
for the B vitamins (thiamin, riboflavin, and niacin) when
[[Page 8790]]
enriched flour is used in making these foods. For example, the levels
of thiamin, riboflavin, and niacin in enriched flour (Sec. 137.165) are
2.9, 1.8, and 24.0 mg/lb, respectively, and in enriched bread
(Sec. 136.115) are 1.8, 1.1, and 15.0 mg/lb, resulting in a ratio of
approximately 1.62 to 1. In the case of the level of folic acid, the
level for enriched flour is 0.7 mg/lb compared to 0.43 mg/lb for bread,
resulting in a ratio 1.63 to 1. The levels of enrichment specified for
the B vitamins and folic acid content are slightly lower in enriched
bread products than in enriched flour to allow the bread products to be
made from the standardized enriched flour without further
fortification.
c. Enriched farina. In the standards of identity proposal, FDA
proposed to establish a fortification level for folic acid in enriched
farina (Sec. 137.305) on the same basis as that for enriched wheat
flour, i.e., 1 lb of the food would contain not less than 0.7 mg of
folic acid.
One comment disagreed with the agency's rationale and argued that
enriched farina is a different product than enriched wheat flour and
therefore should not be fortified at the same level as enriched wheat
flour. The comment asserted that farina is used differently than flour.
For example, according to the comment, farina is often used as an
ingredient in the less expensive pastas to replace the more expensive
semolina. The comment pointed out that farina is also eaten as a hot
cereal, and that precooked breakfast cereals are fortified with folic
acid. The comment did not offer an alternative fortification level or
data on which an alternative level could be based.
Because both wheat flour and farina are made from the endosperm of
wheat, that portion of the wheat kernel that remains after the bran
layer and germ have been removed, and because it is the bran layer and
germ that contain most of the B vitamins, including the naturally
occurring folate, the amount of B vitamins lost during processing would
be similar in both foods. Therefore, the agency finds that it is
reasonable to fortify both flour and farina on the same basic level of
140 g/100 g.
However, FDA acknowledges that enriched farina and enriched flour
may serve different functions. Farina is often used as a substitute for
a flour-containing food, e.g., as a hot cereal at breakfast, with or
without other cereal-grain products being consumed at that meal, and it
may be used in other foods such as pasta. However, the agency finds no
basis to change the fortification level based on these possible end
uses of the products because these uses are governed by other
regulations. For example, when farina is used as an ingredient in the
manufacture of precooked or instant breakfast cereal products, the
level of enrichment is governed by the food additive regulation in
Sec. 172.345. That regulation provides that such ready-to-eat cereals
may be enriched with folic acid up to 100 percent of the daily value
per serving (i.e., 400 g/serving). Neither this final rule nor
the food additive final rule published elsewhere in this issue of the
Federal Register, would affect the continued addition of folic acid to
the precooked or ready-to-eat breakfast cereals that are manufactured
with farina.
With respect to pasta products, the agency notes that the standard
of identity for enriched macaroni and noodle products provides for the
use of farina as an ingredient. However, the agency is not persuaded
that it should adjust the fortification level for farina based on this
possible use of this food. In cases where farina is used as an
ingredient in an enriched macaroni or noodle product, the manufacturer
has the option of adding enrichment nutrients to the farina at the
flour mill or at the manufacturing facility to meet the requirements of
the standard of identity for enriched macaroni or noodle products.
One comment pointed out that farina is not washed before cooking as
had been noted in the proposal, and, thus, washing should not be a
factor in determining appropriate fortification levels.
The agency acknowledges that current farina product labels do not
suggest that enriched farina products need to be rinsed before cooking.
Thus, with current technology, rinsing of the enriched farina product
would not be a factor in deciding on an appropriate value for vitamin
and mineral addition to farina. However, the agency notes that the
proposed upper limit was not based solely on the fact that the product
may be rinsed but also on the fact that it may be diluted when prepared
in other recipes. The comment did not offer data to persuade the agency
to deviate from the proposed upper limit of folic acid addition. Thus,
as proposed, the agency is amending the standard of identity for
enriched farina to provide for an upper limit for folic acid addition
(0.87 mg/lb) that is approximately 25 percent higher than the minimum
of 0.7 mg/lb as it has done for the other B vitamins (thiamin,
riboflavin, and niacin) that are required to be present in enriched
farina.
2. Corn and Rice Products
a. Enriched corn grits. No specific comments were received
regarding the addition of folic acid to enriched corn grits. Thus, as
proposed, FDA is amending Sec. 137.235 to require fortification of
enriched corn grits with the same level of folic acid as that
established for enriched wheat flour products, such that each pound of
the food would contain at least 0.7 mg of folic acid. FDA is also
establishing the proposed upper limit for folic acid fortification of
1.0 mg/lb, which is approximately 50 percent higher than the minimum of
0.7 mg/lb, as it has done for the other B vitamins (thiamin,
riboflavin, and niacin) that are required to be present in enriched
corn grits.
The agency notes that it published a proposed rule in the Federal
Register of October 13, 1995 (60 FR 53480), that would revoke the
standard of identity for enriched corn grits. If comments to the
proposal support revocation of this standard of identity, the
provisions set forth in this final rule for enriched corn grits will
also be revoked. FDA believes, however, that enriched corn grits is a
widely consumed food that is likely to be eaten by women in need of
additional sources of folate. Therefore, should FDA revoke this
standard of identity, the agency is prepared to amend Sec. 172.345, the
food additive regulation on folic acid, to include fortified grits to
the list of nonstandardized foods to which folic acid may be added.
b. Enriched corn meals. No specific comments were received
regarding the enrichment of corn meal products with folic acid. Thus,
as proposed, FDA is amending the standard of identity in Sec. 137.260
to provide for a minimum folic acid level that is consistent with that
established for enriched flour, such that each pound of the food
contains 0.7 mg. Because corn meal products may be used as substitutes
for wheat flour products, the agency believes, as discussed in the
standards of identity proposal (58 FR 53305 at 53308), that consumers
expect to be able to obtain the same levels of nutrients from enriched
corn meals as from enriched wheat flour. FDA is also establishing an
upper limit for folic acid addition (i.e., 1.0 mg/lb which is
approximately 50 percent higher than the minimum fortification level),
as has been done for the added B vitamins. The upper limit on the other
B vitamins is intended to prohibit addition of excessive amounts of the
nutrient and to ensure uniformity in composition of corn meals. FDA
finds that, for the same reasons, an upper
[[Page 8791]]
limit on the addition of folic acid of 1.0 mg/lb is necessary.
c. Enriched rice. The folic acid content of rice varies from 0.008
mg/100 g (0.036 mg/lb) for white rice to 0.020 mg/100 g (0.090 mg/lb)
for brown rice (Ref. 7). FDA proposed to amend the standard of identity
for enriched rice to provide for the addition of not less than 0.7 mg
and not more than 1.4 mg of folic acid per pound (58 FR 53305 at
53312). The agency also noted in the standards of identity proposal
that rice in the United States may be enriched by addition of a powder
mixture containing the added nutrients or by use of a rice premix
consisting of rice kernels coated with a concentrated nutrient mix.
When the powder enrichment procedure is used, the label of the package
generally bears a statement that the rice should not be rinsed before
or drained after cooking, in accordance with Sec. 137.350(c), to ensure
that the rice retains the added nutrients. However, the agency stated,
there is no assurance that these instructions are being followed. In
the case of the rice premix, a special coating is applied to the rice
kernels, so that the added nutrients will not be washed off if the
product is rinsed before cooking. Rice coated with the premix is
blended with unenriched rice such that the finished enriched rice
product will contain the required minimum levels of added nutrients.
The agency stated that the proposed range would provide flexibility in
the production of the enriched rice and ensure that the food, when
prepared for consumption, will contain
FR Doc. 96-5014 Food Standards: Amendment of Standards of Identity For Enriched Grain Products to Require Addition of Folic Acid
the required minimum levels of
nutrients.
16. According to comments on the standards of identity proposal,
most enriched rice produced in this country is manufactured using the
powder procedure to add nutrients. A comment stated that some rice
processors are very concerned about the addition of an enrichment
powder mix containing folic acid because folic acid could result in off
colors, taste, and aromas in the enriched rice. The comment maintained
that firms fear that consumers may reject the enriched rice product if
it does not possess the usual white color. It further stated that
processors needed additional time to conduct research on the addition
of folic acid to rice.
While FDA acknowledges that the provision in the enriched rice
standard for the addition of riboflavin has been stayed because of
objections from the industry stating that riboflavin addition results
in a yellow discoloration being imparted to the rice that is
unacceptable to consumers (23 FR 1170, February 25, 1958), the agency
has not received any information from rice processors that demonstrates
that addition of folic acid to rice will result in off colors, taste,
or aromas in the enriched rice product. Thus, as proposed, the agency
is amending the standard of identity for enriched rice (Sec. 137.350)
to include a range for the folic acid fortification level, 0.7 mg/lb to
1.4 mg/lb, with the lower limit being consistent with the folic acid
fortification level for enriched wheat flour. FDA concludes that use of
the same minimum level of fortification is appropriate because it is
consistent with the Food and Nutrition Board's recommendation that the
same restoration level be used for wheat flour, corn products, and rice
(although the Food and Nutrition Board only recommended addition at
restoration levels). FDA is also establishing an upper limit for folic
acid fortification of enriched rice of 1.4 mg/lb, as it has done with
other enrichment nutrients added to rice. As discussed in the standards
of identity proposal (58 FR 53305 at 53309), the upper level is based
on the way that rice is fortified in this country.
The agency recognizes that manufacturers will need time to
experiment with the addition of folic acid to their products. FDA is
providing approximately 2 years from the publication date of this final
rule to allow manufacturers to test their ability to comply with the
new requirements and to make appropriate label changes.
17. One comment stated that, because the powder-enriched rice
suffers substantial nutrient loss when it is washed (as rice is by many
consumers), it is unlikely that folate intakes will increase as much as
FDA estimates. The comment suggested that the agency should,
consequently, increase the fortification level.
FDA disagrees with the comment. For those consumers who wish to
consume ``enriched'' rice, the agency has provided requirements in the
standard of identity for enriched rice to ensure delivery of the
required nutrients. Section 137.350(c) requires that enrichment
nutrients be present in the rice in such form and at such levels that
if the enriched rice is washed, it contains not less than 85 percent of
the minimum quantities of the nutrients required to be present in the
enriched rice. If they are not present in such form or at such levels
to comply with these minimum requirements, the label of the enriched
rice must bear the statement ``to retain vitamins do not rinse before
or drain after cooking'' immediately following the name of the food. In
addition, the label cannot bear cooking directions that call for
washing or draining the enriched rice. In the case of precooked
enriched rice, the package must be labeled with directions for
preparation that, if followed, will avoid washing away or draining off
enrichment ingredients.
As discussed above, FDA is providing for addition of folic acid at
the level of 140 g/100 g of the enriched cereal-grain
products. The agency has concluded that this fortification level is
necessary to help ensure that the total consumption level will not
exceed the recommended daily consumption level of 1 mg (or 1,000
g). To minimize the potential losses in enrichment nutrients
in rice, the agency had provided for a range in the levels, with an
upper limit that is twice that of the minimum level required to be
present in the rice. Thus, rice processors who use the powder-
enrichment procedure, where nutrient losses would be expected to be
greater, will be able to use a level of enrichment nutrients that makes
it likely that consumers will receive the minimum levels of nutrients
required to be in the food.
3. Macaroni and Noodle Products
The standards of identity for enriched macaroni products
(Sec. 139.115), enriched nonfat milk macaroni products (Sec. 139.122),
and enriched noodle products (Sec. 139.155), and the cross- referenced
standards of identity for enriched vegetable macaroni products
(Sec. 139.135) and enriched vegetable noodle products (Sec. 139.165),
provide for significantly higher levels of nutrient addition than the
related flour standards of identity because these products are usually
cooked in a large amount of water that is usually discarded after
cooking and before consumption of the macaroni and noodle products.
18. One comment asserted that because of the preparation process
for macaroni and noodle products, vitamin retention data are absolutely
essential before any level of enrichment can be discussed. Thus, the
comment recommended that FDA delay implementation of folic acid
fortification of cereal-grain products until more concrete information
is available on vitamin retention with cooking.
FDA is not delaying the implementation of folic acid fortification,
as suggested by the comment, because of the need to increase the folic
acid levels in the diets of women of childbearing age. The agency
recognizes that there will be losses in the content of water soluble
vitamins when the enriched macaroni and enriched noodle products are
cooked in water, and that water is drained from the foods before
consumption (Ref. 8). The agency also
[[Page 8792]]
acknowledges that data on retention of the vitamins (thiamin, niacin,
and riboflavin) required to be added to enrich these foods are limited,
and that it is difficult to make inferences as to the retention of
added folic acid when folic acid enriched products are cooked in water,
and the water is discarded. However, there are some data to suggest
that the retention rates are similar.
According to a study conducted by Ranhortra, et al. (Ref. 8), on
the retention rates of the thiamin, niacin, and riboflavin in three
enriched pasta products (spaghetti, noodles, and macaroni), at least 50
percent (75 to 77 percent on average) of the added nutrients was
retained after cooking in water and draining. This study looked at the
retention of the naturally occurring folate in the pasta products,
before and after cooking, and found that the retention rate was 77 to
79 percent. Based on this data, FDA does not expect that the retention
rate of folic acid in these products would be significantly different
from the retention rates of the other B vitamins.
FDA recognizes that, as with other grain products, manufacturers
will need to conduct research on the most effective means of adding
folic acid and of ensuring that the added folic acid will be available
in the finished food. Such studies will need to focus on not only the
method of adding the nutrient but also on the stability of the vitamin
during usual conditions of distribution and storage. The agency notes
that similar studies were required when FDA established requirements
for the addition of the other B vitamins to enriched cereal-grain
products. In addition to studies, it may be necessary for manufacturers
to develop label instructions on how the product should be prepared,
e.g., instructions on limiting the amount of water to be used in its
preparation or cooking time, and on whether the cooked food can be
rinsed without loss of nutrients before serving, to ensure maximum
retention of folic acid and the added water soluble nutrients.
FDA is requiring the addition of folic acid to macaroni and noodle
products in the same proportion as it is requiring such addition to
enriched flour, except that the required level (expressed in terms of a
range) will be approximately 25 percent higher for macaroni and noodle
products than the required level of folic acid that is to be added to
flour. This 25-percent increment is consistent with the requirements
for the other added nutrients (thiamin, riboflavin, niacin, and iron)
in the enriched macaroni and noodle products standards, compared to
those in the standards of identity for flour products.
Accordingly, as proposed, FDA is requiring that the enriched
macaroni and noodle products contain from 0.9 to 1.2 mg/lb of folic
acid.
G. Effective Date
19. Many comments expressed concern over the statement in the
standards of identity proposal that the final rule would become
effective 1 year after publication. The comments stated that it would
be difficult and impractical to synchronize the addition to a food of a
folic acid-fortified enriched cereal- grain product with the
availability of revised labels for that food that declare folic acid in
the ingredient statement. These comments pointed out that enrichment
nutrients are generally not added to each separately labeled product
but are added to thousands of pounds of flour at the flour mill, the
flour is sold to other manufacturers as an ingredient, and then this
ingredient is used in many different products. Thus, the comments
asserted that as a matter of economic necessity, the enrichment of all
these products occurs at the same time, regardless of the availability
of new labeling. One comment recommended that FDA establish an
effective date of at least 2 years from the date of publication of the
final rule. The comment asserted that a 2-year period would allow
adequate time to incorporate changes on labels of slower moving
products as well as products with higher retail turn rates. Thus, the
comment continued, existing packaging inventory could be used, thereby
reducing the cost impact of the regulation. Another comment suggested a
``phase-in'' period of at least 3 years or, in the alternative, an
effective date consistent with the next uniform effective date,
whichever is later. In support of the suggestion, the comment asserted
that a ``phase-in'' period would allow label changes to take place
concurrent with the folic acid addition on a product-by-product basis.
In addition, the comment contended, such action would allow
manufacturers to exhaust their current label inventory and reduce the
economic impact of the regulation. Moreover, the comment continued,
additional time is needed for analytical testing for declaration of
folic acid in nutrition labeling.
FDA acknowledges the concerns raised in these comments regarding
label changes that must accompany the addition of folic acid to
enriched cereal-grain products and to foods in which these products are
used as ingredients. FDA is persuaded by the concerns raised in the
comments to establish an effective date that will provide manufacturers
with time to implement the label and formulation changes required by
the amendments established in this final rule. The agency agrees with
the comment that suggested that FDA establish an effective date of at
least 2 years from the date of publication of the final rule. A 2-year
period would allow manufacturers time to exhaust current packaging
inventory, add folic acid to their statement of ingredients and the
nutrition facts panel as other changes are made to update package
labeling, and subsequently ensure that packaging is available that
accurately reflects the addition of folic acid to their products.
Furthermore, the agency points out that a 2-year period is consistent
with the amount of time given for implementation of the Nutrition
Labeling and Education Act (NLEA) requirements. Thus, the effective
date of this final rule will be January 1, 1998. The agency notes,
however, that compliance with the requirements established in this
final rule may begin immediately, provided that the label accurately
reflects that folic acid has been added to the product. Furthermore,
the agency will not object to the use of stickers to bring a product
label into compliance with the ingredient labeling and nutrition
labeling provisions. The agency notes, however, that unless the
standardized food bears a claim about folate, the declaration of folate
in the nutrition label is voluntary.
20. A few comments that raised concern about label changes that
must accompany the addition of folic acid suggested that the agency
permit folic acid to be added to the product without requiring
declaration in the ingredient statement. One comment contended that
there was no safety issue regarding folic acid that would require its
declaration on the label.
Traditionally, the agency has not permitted manufacturers who
change their formulas by adding or deleting ingredients to use
noncompliant labels. Furthermore, as discussed in response to the
previous comment, the agency is establishing an effective date in this
final rule that will provide industry ample time to ensure that
products enriched with folic acid are labeled in compliance with the
regulations.
In response to the argument that the addition of folic acid need
not be declared because it does not raise a safety issue, the agency
advises that the act requires that all foods fabricated from two or
more ingredients declare each of its ingredients by common or usual
name in a list of ingredients. This
[[Page 8793]]
requirement applies without regard to whether there is a safety issue
regarding the food. Consequently, the agency has not been persuaded by
the comments to permit the addition of folic acid to foods without also
requiring that folic acid be declared in ingredient labeling.
III. Economic Impact
FDA has examined the impacts of this final rule to require the
addition of folic acid to enriched cereal-grain products that conform
to a standard of identity as required by Executive Order 12866 and the
Regulatory Flexibility Act. Executive Order 12866 directs agencies to
assess all costs and benefits of available regulatory alternatives and,
when regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety, and other advantages; distributive impacts;
and equity). The Regulatory Flexibility Act (Pub. L. 96-654) requires
the analysis of options for regulatory relief for small businesses. FDA
finds that this final rule is not a significant regulatory action as
defined by Executive Order 12866. In compliance with the Regulatory
Flexibility Act, the agency certifies that this final rule will not
have a significant impact on a substantial number of small businesses.
On October 14, 1993 (58 FR 53305 at 53309), FDA published an
economic impact analysis of the proposed requirements under the
previous Executive Order (E.O. 12291). In the analysis, the agency
evaluated the following regulatory options:
1. Improve dietary practices among women of childbearing age.
2. Require fortification with folic acid at 140 g/100 g.
3. Require fortification with folic acid at: (a) A lower level,
specifically 70 g/100 g; or (b) a higher level, specifically
350 g/100 g.
In response to the standards of identity proposal, the agency
received several comments that provided information that has altered
its economic impact analysis. Costs and benefits for each of the
regulatory options are examined below.
A. Costs
Cost estimates are revised first for fortification at 140 g/
100 g followed by the cost estimates for fortification at 70
g/100 g and 350 g/100 g.
1. Require Fortification With Folic Acid at 140 g/100 g
Costs of fortifying with folic acid at 140 g/100 g include
health costs and reformulation costs.
a. Health costs. Potential health costs of this regulatory option
include the costs of neurologic disease associated with masking of the
anemia of vitamin B12 deficiency. Several studies have found that
folic acid can mask the anemia of vitamin B12 deficiency at levels
as low as 250 g/day. Although there is no scientific consensus
on the percentage of diagnoses of vitamin B12 deficiency anemia
that would be complicated by folate intake at this level, the agency
has determined that adverse health effects are not significant until
folate intake reaches 1 mg/day. In the proposal, FDA tentatively
concluded that the 140 g/100 g level for fortification of
enriched cereal grain products was the most appropriate level based on
a regulation that would have required that fortification of all
breakfast cereals be limited to 100 g folic acid/serving. This
limitation was proposed under a separate food additive regulation
published elsewhere in the same Federal Register (58 FR 53312). With
this option, 140 g/100 g, FDA preliminarily concluded that
intake of persons in the target and nontarget populations would remain
below 1 mg/day.
Comments submitted in response to the proposal to limit breakfast
cereals to 100 g folic acid/serving persuaded the agency to
allow breakfast cereals to continue to contain up to 400 g
folic acid/serving. If all breakfast cereals were fortified at the
level of 400 g/serving, some high end consumers could consume
more than 1 mg folate/day. However, most cereals currently are
fortified at a level of 100 g/serving (25 percent of the
reference daily intake (RDI)) and only an estimated 5 percent of
breakfast cereals fortify at a level of 400 g (100 percent of
the RDI).
Further, it is unlikely that manufacturers of breakfast cereals
will increase the folic acid level in cereals from 100 g/
serving to 400 g/serving. Since most breakfast cereals that
contain at least 40 g/serving (10 percent of the RDI) of folic
acid can now make health claims (if all other criteria are met),
manufacturers have no incentive to reformulate from 100 g to
400 g per serving and incur reformulation costs.
There are a number of confounding uncertainties that make it
difficult to estimate the potential health costs of folic acid
fortification of enriched grain products (Ref. 9). These include:
1. Current intakes estimated from food consumption survey data may
underestimate actual intakes due to underreporting of food intake;
2. The folate content of foods may be underestimated due to
methodologic difficulties;
3. Good data on the distribution of dietary supplement intake are
not available;
4. Estimates of masking of anemia (with subsequent progression of
neurologic symptoms) based on enumerating only those associated with
pernicious anemia would underestimate potential adverse effects because
all vitamin B12 deficiencies may lead to neurologic problems; and
5. It is difficult to predict effects of changes in dietary
patterns that occur simultaneously with, but independently of, this
regulation. Such changes may be the result of educational efforts by
various organizations, physicians, and health care providers or in
response to health claims.
The last factor is particularly problematic. Recent surveys have
shown a growing awareness of the value of increased folate intake among
both the population as a whole and, specifically, among women of
childbearing age. From 1994 to 1995, awareness of the problems
associated with insufficient folic acid intake grew from 28 to 44
percent among women of all ages (Ref. 10). As awareness grows, it is
likely that folic acid intake will increase in the target group. In
addition, new label claims allowed by the final rule for health claims
on the association between folate intake and a reduced risk of NTD's
are also expected to increase folic acid intake among women of
childbearing age. However, the survey mentioned above also showed that
such awareness is strongly positively correlated with education, so
that these messages may not reach less well- educated women in the
population.
In the folic acid health claims proposal, FDA tentatively found
that there were several nontarget groups whose intake levels of folate
may approach 1 mg/day (intakes > 800 g/day) with a level of
140 g/day and use of dietary supplements. These include
individuals in groups including children 4 through 10 years of age and
males 11 through 18, 19 through 50, and 51+ years of age. Individuals
at risk of pernicious anemia include both males and females over 51 and
Hispanic females ages 40 and above. The largest group at potential risk
includes males over 51 who take dietary supplements. In order to be at
risk of potential adverse effects from consuming greater than 1 mg
folate/day individuals must: (1) Consume an excessive amount of folic
acid through some combination of supplements containing folic acid and
consumption of fortified enriched grain products and other products
containing folic acid; and (2) have low vitamin B12 status or have
vitamin B12 deficiency.
[[Page 8794]]
Because of the difficulties mentioned above, it is not possible to
estimate the number of people in the high risk subgroup who fit all of
these categories.
However, one such attempt has been made between the time of the
standards of identity proposal and this final rule. In this analysis,
Romano et. al. made the following assumptions:
1. The annual incidence of pernicious anemia is 9.5 to 16.7 per
100,000 persons (based on two European population-based studies);
2. With low level fortification, 5 to 10 percent of these patients
would receive enough folic acid to mask the anemia of vitamin B12
deficiency; and
3. Between ``24 and 26 percent of patients with pernicious anemias
whose anemias respond to folic acid develop neurologic signs'' (Ref.
11).
Based on these assumptions, the authors estimated that
approximately 500 people per year would develop neurologic disease as a
result of low level folic acid fortification. Other authors contend
that this estimate may considerably understate the number of cases
(Ref. 12). On the other hand, one uncertainty not acknowledged by this
analysis is that this rule may create a market for cereal-grain
products that are not ``enriched.'' A nonstandardized cereal-grain
product could be produced that was not labeled as being enriched with
folate (although it could have other vitamins and minerals added and be
labeled to reflect this fact) and could be marketed to people at risk
of vitamin B12 deficiency. If such a market developed, and at-risk
persons were encouraged to consume products not enriched with folic
acid, this problem might be reduced. In addition, sale to high risk
subgroups of nonstandardized products such as whole wheat breads
(mentioned earlier in this preamble) which do not need to be enriched,
may increase as a result of this rule.
Another uncertainty that would reduce the number of cases of masked
anemia, mentioned by one comment, is the percentage of cases of
B12 deficiency that could be discovered with routine population
screening. If such tests were performed proactively, B12
deficiencies might be identified before neurologic symptoms developed.
In addition, it is not clear whether the European population-based
studies that reported the annual incidence of diagnosed pernicious
anemia are relevant to the U.S. population. Some population groups in
the United States (e.g., African-American women) appear to experience
an earlier age-at-onset of pernicious anemia than occurs with
pernicious anemia in Northern European countries, which are
predominantly Caucasian populations.
Although not able to estimate an absolute number, FDA has
calculated a cost per case of neurologic symptoms resulting from
masking of the anemia of pernicious anemia so that a break-even point
may be calculated at which point benefits would equal the costs. The
cost-per-illness will be calculated using the sum of medical costs and
the cost of lost utility. The majority of medical costs, which include
costs for physicians, other hospital services, and drugs, are normally
paid by insurance such that estimates based on willingness-to-pay to
avoid death would not be likely to be included. Other utility losses,
including death, pain and suffering, immobility, and lost productivity
associated with morbidity, are calculated as a function of the
willingness- to-pay (WTP) to avoid death. Thus, for example, each day
of morbidity is a day spent in less than perfect health engendering
some utility loss. That is, each day of illnesses is somewhere between
a day of full utility, 1, and death, 0. Because WTP to avoid death does
not include the medical expenditures mentioned above, these costs are
calculated separately.
The expected utility loss estimates were calculated in the
preliminary economic impact analysis (the PRIA) in the standards of
identity proposal. The most common symptoms of a delay in the diagnosis
of vitamin B12 deficiency are permanent paresthesia (numbness or
tingling) in the hands or feet and ataxia (inability to coordinate
voluntary muscular movements).
In the standards of identity proposal, FDA estimated the cost per
case to be approximately $538,000 (Ref. 13). This estimate was
calculated using weighted probabilities of a mild (95 percent) and a
severe case (5 percent) and the value of expected utility loss per case
of neurologic disability. For each state, mild and severe, a health
status value was calculated that related the state to a day of
``perfect health''. Thus, a person with a mild case of neurologic
disability is calculated to enjoy only 70 percent of the utility per
day as that of a person in a perfectly healthy state. For a more severe
case it would be approximately 50 percent (Ref. 14). Using the likely
duration of each illness, the utility loss from a severe neurologic
disability was found to be equivalent to a loss of 5.56 perfect-health
years. From the value of a perfect health year, $138,889 (Ref. 14), the
value of expected utility loss per case of mild neurologic disability
was estimated to be $525,598. The utility loss due to severe neurologic
disability was estimated in a similar fashion to be $772,598 per case.
The weighted value (based on likelihood of a mild versus severe case)
of a case of masked pernicious anemia leading to permanent adverse
health effects was calculated as the weighted mean: (0.95 x 525,598)
+ (0.05 x 772,598) = $537,948.
In addition to utility costs, hospital costs of neurologic effects
due to pernicious anemia have been estimated by Romano et al. (Ref.
11). In this study, each neurologic case requires hospitalization once
for an average duration of 16 days at $867/day. After factoring in
physician services and other direct and indirect costs, the total
direct outlay cost of neurologic disease as a result of folic acid
fortification was estimated to be $33,000 per case (Ref. 11). Total
costs per case are thus calculated to be $570,000.
However, as mentioned in Romano et al., the cost estimate may be
too high because these estimates assume that all neurologic disease
would be severe, and mild cases may not require hospitalization (Ref.
11). In addition, this estimate may be too high if there were routine
population wide screening for vitamin B12 deficiency, although
this is not currently occurring nor is it likely to be instituted. At
the same time, however, the estimate may be too low if a case leads to
later complications or to the need for lifelong skilled nursing care
(Ref. 11).
These costs, lost utility and hospital costs, are not annual costs.
Once someone has experienced permanent adverse health effects from
masked pernicious anemia, that person ought not to be included in the
costs estimated for subsequent years, since the discounted value of
their permanent adverse health effects has already been calculated and
attributed to the first year. Any costs in subsequent years would
involve only those entering the at-risk age pool.
b. Other health costs. FDA is aware of the potential for other
health problems resulting from increased long-term intakes of folic
acid but has no data with which to quantify these costs.
c. Reformulation costs. Reformulation costs associated with this
option were estimated in the proposal to be $27 million for the first
year. The cost of adding the required folic acid is approximately $4
million per year. The cost of testing was estimated to be about $2.5
million per year and the cost of the required label changes $20
million. FDA will use these costs for this final rule as no comments
were received on this part of the analysis.
In addition, some countries, such as Canada, do not allow folic
acid fortification of these products. Thus, this option would require
that separate
[[Page 8795]]
production runs be made for fortified products exported, to and
imported from, these countries. This requirement may preclude some
manufacturers from the export market. None of the comments provided
information that would assist in determining the costs of having
different international requirements.
2. Costs of Requiring Fortification With Folic Acid at Either 70
g/100 g or 350 g/100 g
The total cost of the option to fortify at 70 g/100 g in
the first year was estimated in the proposal to be $25 million plus the
cost of separate production runs for these products exported to and
imported from certain foreign countries. For the option of fortifying
with folic acid at 350 g/100 g, the PRIA estimated a cost of
$1.88 billion annually.
With the latter option, the folate intake of some consumers at risk
of vitamin B12 deficiency (including pernicious anemia) would be
raised to levels exceeding 1 mg per day. One comment to the proposal
said that the estimated health costs of fortifying at this (higher)
level were unrealistically high as FDA had failed to take into account
that each subsequent year should only account for new cases (Ref. 11).
Because of the problems with estimating numbers of people who will
become ill at either level, FDA will not quantify these costs.
Reformulation costs. In the proposal, the cost of the folic acid
required to fortify at 350 g/100 g was estimated to be
approximately $10 million per year. The cost of testing was estimated
to be $2.5 million and the cost of the required label changes was
estimated to be $20 million.
B. Benefits
1. Require Fortification with Folic Acid at 140 g/100 g
The primary benefit of this option is a reduction in the number of
infants born with NTD's each year. In addition, a possible benefit will
be a reduction in cardiovascular diseases from intake of increased
folate. However, there is still tremendous uncertainty with respect to
the latter effect (for a more complete discussion, see folic acid food
additive document published elsewhere in this Federal Register).
Based on a synthesis of information from several studies, including
those which used multivitamins containing folic acid at a daily dose
level of 0.4 mg, it was inferred that folic acid alone at
levels of 0.4 mg per day will reduce the risk of NTD's. This conclusion
was based on two studies, one from a high risk population (Hungary)
with a small number of subjects that was found to be 100 percent
effective and another from a study that showed zero risk reduction in a
low prevalence population (California and Illinois). From these
studies, the PHS estimated a reduction of 50 percent of the number of
NTD's in the United States. Other studies evaluated by PHS varied in
their results. A possible explanation for the lack of effectiveness was
that studies were conducted in populations with a low prevalence of
NTD's which may not have had a folate-related subset of NTD's.
In a study by Shaw et al., the reduction in NTD risk associated
with folate intake is consistent with other studies, but the reduced
risk was found to be specific to particular subsets of the population,
primarily non-Hispanic women and women whose education did not exceed
high school (Ref. 15). For Hispanic women, the risk reduction was
approximately 10 percent. In a study by Romano et. al., the 50 percent
estimate of reduced risk of NTD's was used with literature-based
sensitivity limits of 67 percent (Ref. 16) and 20 percent (Refs. 11 and
17).
In the proposal, FDA estimated that under the 140 g/100 g
option, 116 NTD's per year would be prevented (50 percent reduction).
Initiation of this option was also estimated to prevent an additional
25 infant deaths each year. Total benefits of this option were
estimated to be between $651 and $788 million per year.
There is no consensus on the dose-response relationship between
folate intake and the reduction in risk of NTD's. However, using a
lower bound of 10 percent and an upper bound of a 50 percent reduction
in NTD's, the estimated reductions in total cases would be between 25
(5 deaths) and 125 (27 deaths) resulting in quantified benefits ranging
from $220 to $700 million.
2. Require Fortification with Folic Acid at 70 g/100 g and 350
g/100 g
a. 70 g/100 g. The benefit of requiring fortification of
these products at 70 g/100 g was estimated in the proposal to
be between $326 and $394 million. Using the sensitivity limits
mentioned above, 10 to 50 percent of the estimated benefits would range
from $110 to $346 million.
b. 350 g/100 g. The benefit of requiring fortification of
these products at 350 g/100 g is estimated to be between $550
million and $1.4 billion. This option is the only option that would
generate significant health costs.
C. Conclusion
In accordance with Executive Order 12866, the agency has analyzed
the economic effects of this final rule and has determined that this
rule, if issued, will not be an economically significant rule as
defined by that order.
The cost of this final rule in the first year is estimated to be
approximately $27 million which includes the cost of relabeling,
testing, and fortification. In addition, there may be some health costs
associated with neurologic symptoms resulting from masking the anemia
of vitamin B12 deficiency as well as the cost of separate
production runs for products exported to and imported from certain
foreign countries. The cost of the proposed action in each year after
the first year should be approximately 25 percent of the first year
cost. The benefits are estimated to be between $220 and $700 million
per year. Using a value of $570,000 per case of masked pernicious
anemia resulting in neurologic damage, the break-even number of these
cases at which costs would equal benefits would fall between 386 and
1,228.
Although reformulation costs of this option are approximately $27
million, the cost per firm is expected to be very small. Therefore, in
accordance with the Regulatory Flexibility Act, FDA has determined that
this rule will not have an adverse impact on a substantial number of
small businesses.
IV. Environmental Impact
The agency has carefully considered the potential environmental
effects of this action. FDA has concluded that the action will not have
a significant impact on the human environment, and that an
environmental impact statement is not required. The agency's finding of
no significant impact and the evidence supporting that finding,
contained in an environmental assessment, may be seen in the Dockets
Management Branch (address above) between 9 a.m. and 4 p.m., Monday
through Friday.
V. References
The following references have been placed on display in the Dockets
Management Branch (address above) and may be seen by interested persons
between 9 a.m. and 4 p.m., Monday through Friday.
1. Centers for Disease Control and Prevention, ``Recommendations
for the Use of Folic Acid to Reduce the Number of Cases of Spina
Bifida and Other Neural Tube Defects,'' in Morbidity and Mortality
Weekly Reports, 41, 1-7, 1992.
2. USDA, Nationwide Food Consumption Survey/Individual Intake-
1987-1988, accession no. PB90-504044, National
[[Page 8796]]
Technical Information Service, Springfield, VA, 1990.
3. Food and Nutrition Board, National Research Council, National
Academy of Sciences, Proposed Fortification Policy for Cereal-Grain
Products, Washington, DC, 36 pp., 1974.
4. Nationwide Food Consumption Survey, Continuing Survey of Food
Intakes by Individuals: Women 19-50 Years Old and Their Children 1-5
years, 1 day, 1985; United States Department of Agriculture,
Hyattsville, MD; NFCS, CSFII, Report No. 85-1, 1985.
5. Subcommittee on Food Technology, Committee on Food
Protection, Food and Nutrition Board, National Research Council,
National Academy of Sciences, Proceedings of a Workshop on
Technology of Fortification of Cereal-Grain Products, Washington,
DC, May 16-17, 1977.
6. USDA Handbook 8-20: Composition of Foods, Cereal Grains, and
Pasta, Raw Processed, Prepared. Rev., October 1989.
7. Hoffpauer, D.W., ``Rice Enrichment for Today,'' Cereal Foods
World, vol. 37, No. 10, pp. 757-759, 1992.
8. Ranhortra, G.S., J.A. Gelroth, F.A. Novak, and R.H. Matthews,
``Retention of Selected B Vitamins in Cooked Pasta Products,''
Cereal Chemistry, vol. 60, No. 6, pp. 476-477, 1985.
9. Crane, N. et al., ``Evaluating Food Fortification Options:
General Principles Revisited with Folic Acid,'' American Journal of
Public Health, vol. 85, No. 5, pp. 660- 666, 1995.
10. FDA, Health and Diet Survey, 1994 and 1995.
11. Romano, P.S. et al., ``Folic Acid Fortification of Grain: An
Economic Analysis,'' American Journal of Public Health, vol. 85, No.
5, pp. 667-676, 1995.
12. Perez-Escamilla, R., ``Folic Acid Fortification for the
Prevention of Neural Tube Defects: Consensus Needed on Potential
Adverse Effects,'' American Journal of Public Health, vol. 85, No.
11, pp. 1587-1588, 1995.
13. Healton, E.B., D.G. Savage, J.C. Brust, T.J. Garett, J.
Lindenbaum, ``Neurologic Aspects of Cobalamin Deficiency,''
Medicine, vol. 7, No. 4, pp. 229-245, 1991.
14. Research Triangle Institute, ``Quality of Well-Being Scale
in Estimating the Value of Consumers' Loss from Food Violating the
FD&C Act,'' vol. II, Final Report, 1988.
15. Shaw, G.M. et al., ``Periconceptional Vitamin Use, Dietary
Folate and the Occurrence of Neural Tube Defects,'' Epidemiology
Resources Inc., 1995.
16. MRC Vitamin Study Research Group, ``Prevention of Neural
Tube Birth Defects: Results of the Medical Research Council Vitamin
Study,'' Lancet, vol. 338, pp. 131- 137, 1991.
17. Mills, J.L., G.G. Rhoads, J.L. Simpson, G.C. Cunningham,
M.R. Conley, M.R. Lassman, M.E. Walden, D.R. Depp, H.J. Hoffman,
``The Absence of a Relation Between the Periconceptional Use of
Vitamins and Neural-tube Defects,'' New England Journal of Medicine,
321:430-435, 1989.
List of Subjects
21 CFR Part 136
Bakery products, Food grades and standards.
21 CFR Part 137
Cereals (food), Food grades and standards.
21 CFR Part 139
Food grades and standards.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs and
redelegated to the Director, Center for Food Safety and Applied
Nutrition, 21 CFR parts 136, 137, and 139 are amended as follows:
PART 136--BAKERY PRODUCTS
1. The authority citation for 21 CFR part 136 continues to read as
follows:
Authority: Secs. 201, 401, 403, 409, 701, 721 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 321, 341, 343, 348, 371,
379e).
2. Section 136.115 is amended by revising paragraph (a)(1) to read
as follows:
Sec. 136.115 Enriched bread, rolls, and buns.
(a) * * *
(1) Each such food contains in each pound 1.8 milligrams of
thiamin, 1.1 milligrams of riboflavin, 15 milligrams of niacin, 0.43
milligrams of folic acid, and 12.5 milligrams of iron.
* * * * *
PART 137--CEREAL FLOURS AND RELATED PRODUCTS
3. The authority citation for 21 CFR part 137 continues to read as
follows:
Authority: Secs. 201, 401, 403, 409, 701, 721 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 321, 341, 343, 348, 371,
379e).
4. Section 137.165 is amended by revising paragraph (a) to read as
follows:
Sec. 137.165 Enriched flour.
* * * * *
(a) It contains in each pound 2.9 milligrams of thiamin, 1.8
milligrams of riboflavin, 24 milligrams of niacin, 0.7 milligrams of
folic acid, and 20 milligrams of iron.
* * * * *
5. Section 137.185 is amended by revising paragraph (a) to read as
follows:
Sec. 137.185 Enriched self-rising flour.
* * * * *
(a) It contains in each pound 2.9 milligrams of thiamin, 1.8
milligrams of riboflavin, 24 milligrams of niacin, 0.7 milligrams of
folic acid, and 20 milligrams of iron.
* * * * *
6. Section 137.235 is amended by revising paragraph (a)(1) to read
as follows:
Sec. 137.235 Enriched corn grits.
(a) * * *
(1) It contains in each pound not less than 2.0 milligrams (mg) and
not more than 3.0 mg of thiamin, not less than 1.2 mg and not more than
1.8 mg of riboflavin, not less than 16 mg and not more than 24 mg of
niacin or niacinamide, not less than 0.7 mg and not more than 1.0 mg of
folic acid, and not less than 13 mg and not more than 26 mg of iron
(Fe);
* * * * *
7. Section 137.260 is amended by revising paragraph (a)(1) to read
as follows:
Sec. 137.260 Enriched corn meals.
(a) * * *
(1) It contains in each pound not less than 2.0 milligrams (mg) and
not more than 3.0 mg of thiamin, not less than 1.2 mg and not more than
1.8 mg of riboflavin, not less than 16 mg and not more than 24 mg of
niacin or niacinamide, not less than 0.7 mg and not more than 1.0 mg of
folic acid, and not less than 13 mg and not more than 26 mg of iron
(Fe);
* * * * *
8. Section 137.305 is amended by revising paragraph (a)(1) to read
as follows:
Sec. 137.305 Enriched farina.
(a) * * *
(1) It contains in each pound not less than 2.0 milligrams (mg) and
not more than 2.5 mg of thiamin, not less than 1.2 mg and not more than
1.5 mg of riboflavin, not less than 16.0 mg and not more than 20.0 mg
of niacin or niacinamide, not less than 0.7 mg and not more than 0.87
mg of folic acid, and not less than 13.0 mg of iron (Fe).
* * * * *
9. Section 137.350 is amended by revising paragraph (a)(1) to read
as follows:
Sec. 137.350 Enriched rice.
(a) * * *
(1) Not less than 2.0 milligrams (mg) and not more than 4.0 mg of
thiamin, not less than 1.2 mg and not more than 2.4 mg of riboflavin,
not less than 16 mg and not more than 32 mg of niacin or niacinamide,
not less than 0.7 mg and not more than 1.4 mg of folic acid, and not
less than 13 mg and not more than 26 mg of iron (Fe).
* * * * *
[[Page 8797]]
PART 139--MACARONI AND NOODLE PRODUCTS
10. The authority citation for 21 CFR part 139 continues to read as
follows:
Authority: Secs. 201, 401, 403, 409, 701, 721 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 321, 341, 343, 348, 371,
379e).
11. Section 139.115 is amended by revising paragraph (a)(1) to read
as follows:
Sec. 139.115 Enriched macaroni products.
(a) * * *
(1) Each such food contains in each pound not less than 4.0
milligrams (mg) and not more than 5.0 mg of thiamin, not less than 1.7
mg and not more than 2.2 mg of riboflavin, not less than 27 mg and not
more than 34 mg of niacin or niacinamide, not less than 0.9 mg and not
more than 1.2 mg of folic acid, and not less than 13 mg and not more
than 16.5 mg of iron (Fe);
* * * * *
12. Section 139.122 is amended by revising the first sentence of
paragraph (a)(3) to read as follows:
Sec. 139.122 Enriched nonfat milk macaroni products.
(a) * * *
(3) Each such food contains in each pound not less than 4.0
milligrams (mg) and not more than 5.0 mg of thiamin, not less than 1.7
mg and not more than 2.2 mg of riboflavin, not less than 27 mg and not
more than 34 mg of niacin or niacinamide, not less than 0.9 mg and not
more than 1.2 mg of folic acid, and not less than 13 mg and not more
than 16.5 mg of iron (Fe). * * *
* * * * *
13. Section 139.155 is amended by revising paragraph (a)(1) to read
as follows:
Sec. 139.155 Enriched noodle products.
(a) * * *
(1) Each such food contains in each pound not less than 4
milligrams (mg) and not more than 5 mg of thiamin, not less than 1.7 mg
and not more than 2.2 mg of riboflavin, not less than 27 mg and not
more than 34 mg of niacin or niacinamide, not less than 0.9 mg and not
more than 1.2 mg of folic acid, and not less than 13 mg and not more
than 16.5 mg of iron (Fe);
* * * * *
Dated: February 26, 1996.
David A. Kessler,
Commissioner of Food and Drugs.
Donna E. Shalala,
Secretary of Health and Human Services.
[FR Doc. 96-5014 Filed 2-29-96; 12:03 pm]
BILLING CODE 4160-01-P
Complete official Federal Register PDF
FR Doc. 96-5013 Food Labeling: Health Claims and Label Statements; Folate and Neural Tube Defects
[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Pages 8752-8781]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5013]
Federal Register / Vol. 61, No. 44 / Tuesday, March 5, 1996 / Rules
and Regulations
[[Page 8752]]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Part 101
[Docket No. 91N-100H]
RIN 0910-AA19
Food Labeling: Health Claims and Label Statements; Folate and
Neural Tube Defects
Agency: Food and Drug Administration, HHS.
Action: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Food and Drug Administration (FDA) is authorizing the use
on the labels and in the labeling of food, including dietary
supplements, of health claims on the association between adequate
intake of folate and the risk of neural tube birth defects. This rule
is issued in response to provisions of the Nutrition Labeling and
Education Act of 1990 (the 1990 amendments) that bear on health claims.
The agency has concluded that, based on the totality of the publicly
available scientific evidence, there is significant scientific
agreement among qualified experts that, among women of childbearing age
in the general U.S. population, maintaining adequate folate intakes,
particularly during the periconceptional interval, may reduce the risk
of a neural tube birth defect-affected pregnancy.
EFFECTIVE DATE: April 19, 1996.
FOR FURTHER INFORMATION CONTACT: Jeanne I. Rader, Office of Food
Labeling (HFS-175), Food and Drug Administration, 200 C St. SW.,
Washington, DC 20204, 202-205-5375.
SUPPLEMENTARY INFORMATION:
I. Background
A. Procedural History
1. The 1990 Amendments
The 1990 amendments to the Federal Food, Drug, and Cosmetic Act
(the act) provided for extensive changes in the way foods are labeled.
Under these amendments, FDA can authorize the use, in the labeling of
foods, of health claims that characterize the relationship of a
nutrient to a disease or a health-related condition. Section
403(r)(1)(B) of the act (21 U.S.C. 343(r)(1)(B)) provides that a
product is misbranded if it bears a claim that characterizes the
relationship of a nutrient to a disease or a health-related condition
unless the claim is made in accordance with procedures and standards
established under section 403(r)(3) and (r)(5)(D) of the act. The 1990
amendments required that FDA evaluate 10 nutrient/disease relationships
with respect to their appropriateness as the subjects of health claims.
The topic of folic acid and neural tube defects was among those 10
topics.
In the Federal Register of November 27, 1991 (56 FR 60537), in
conformity with the requirements of the 1990 amendments, the agency
proposed to establish general principles that would govern the
appropriateness and validity of health claims on dietary supplements as
well as on foods in conventional food form. The agency also proposed to
authorize four health claims and to not authorize six others, including
a claim on folate and neural tube defects.
2. The Dietary Supplement Act of 1992 (DS Act)
In October of 1992, the Dietary Supplement Act (DS Act; Title II of
Pub. L. 102-571) was enacted. It imposed a moratorium until December
15, 1993, on FDA implementation of the 1990 amendments with respect to
dietary supplements. The DS Act directed FDA to issue proposed rules to
implement the 1990 amendments with respect to dietary supplements by
June 15, 1993, and to issue final rules based on these proposals by
December 31, 1993.
The DS Act also amended the so-called ``hammer'' provision of the
1990 amendments to provide that, if the agency did not meet the
established December 31, 1993, timeframe for issuance of final rules,
the proposed regulations would be considered final regulations.
Accordingly, when FDA issued its final rules on health claims in
the Federal Register of January 6, 1993 (58 FR 2478), they did not
cover dietary supplements.
3. The 1993 Final Rules
On January 6, 1993, FDA published its final rules on general
principles for health claims (58 FR 2478) and the 10 nutrient disease-
relationships (58 FR 2537 through 2849). The general principles
regulation provides that FDA will issue regulations authorizing health
claims only when it determines, based on the totality of publicly
available scientific evidence (including evidence from well-designed
studies conducted in a manner that is consistent with generally
recognized scientific procedures and principles) that there is
significant agreement, among experts qualified by training or
experience to evaluate such claims, that the claim is supported by the
scientific evidence.
On January 6, 1993, the agency also issued regulations announcing
its decisions with respect to conventional foods for each of the 10
nutrient-disease relationships that the 1990 amendments directed it to
consider. The agency authorized claims on all foods, including dietary
supplements, on seven nutrient-disease relationships: Calcium and
osteoporosis; sodium and hypertension; fat and cancer; saturated fat
and cholesterol and coronary heart disease (CHD); fiber-containing
grain products, fruits, and vegetables and cancer; fruits, vegetables,
and grain products that contain fiber and risk of CHD; and fruits and
vegetables and cancer.
Because of the DS Act, FDA took no final action with respect to the
use on dietary supplements of health claims on dietary fiber and
cancer; dietary fiber and CHD; omega-3-fatty acids and CHD; zinc and
immune function in the elderly; antioxidant vitamins and cancer; and
folic acid and neural tube defects.
With respect to folic acid, the agency explained that, while the
Public Health Service (PHS) had recommended that all women of
childbearing age in the United States consume 0.4 milligram (mg) of
folic acid daily to reduce their risk of having a pregnancy affected
with spina bifida or other neural tube defects, PHS had also identified
several issues that remained outstanding, including the appropriate
level of folic acid in food and safety concerns regarding increased
intakes of folic acid. Sections 403(r)(3)(A)(ii), 402(a), and 409 of
the act (21 U.S.C. 342(a) and 348) establish that the use of a
substance in food must be safe. Questions raised in the PHS
recommendation (see 58 FR 2606 at 2609) included the safety of high
intakes of folate by the target population as well as by other segments
of the population who may unintentionally be exposed to high intakes if
overfortification of the food supply with folic acid were to occur as a
result of the PHS recommendation. FDA concluded that it could not
authorize a health claim on folic acid until the questions regarding
the safety of the use of this nutrient, as well as other concerns
raised by PHS, were satisfactorily resolved (58 FR 2606 at 2614).
4. The Dietary Supplement Proposals
In the Federal Register of June 18, 1993 (58 FR 33700), FDA
published a proposal on health claims on dietary supplements. FDA
proposed to revise its food labeling regulations to make dietary
supplements of vitamins, minerals, herbs, or other similar nutritional
substances subject to the same general requirements that apply to
[[Page 8753]]
all other types of food with respect to health claims.
In the Federal Register of October 14, 1993 (58 FR 53296), FDA
published a proposal not to authorize health claims on the labels of
dietary supplements on five nutrient-disease relationships: Dietary
fiber and cancer; dietary fiber and CHD; antioxidant vitamins and
cancer; omega-3-fatty acids and CHD; and zinc and immune function in
the elderly. However, in the same issue of the Federal Register (58 FR
53254), the agency did propose to authorize the use on the labels and
labeling of conventional foods and dietary supplements of a health
claim on the relationship between folate and risk of neural tube
defects and to provide for safe use of folic acid in foods by amending
several of its regulations that permit use of folic acid in foods (see
also 58 FR 53305 and 58 FR 53312).
5. The Dietary Supplement Health Claim Final Rule
In the Federal Register of January 4, 1994 (59 FR 395), FDA
announced that it was amending its food labeling regulations to make
dietary supplements subject to the same general requirements that apply
to all other types of food with respect to the use on the label or in
labeling of health claims that characterize the relationship of a
substance to a disease or health-related condition.
Also in the Federal Register of January 4, 1994 (59 FR 433), the
agency announced that, in accordance with the 1990 amendments, as
amended by the DS Act, the regulation on folate and neural tube defects
that it proposed on October 14, 1993 (58 FR 53254), was considered a
final regulation for dietary supplements of vitamins, minerals, herbs,
and other similar nutritional substances (dietary supplements). In its
notice, the agency stated that the document was part of a separate
rulemaking contemplated by Congress if a final regulation on the
proposal issued on October 14, 1993, was not issued by December 31,
1993, and noted that the notice bore a separate docket number (i.e.,
No. 93N-0481) to distinguish it from the one assigned to the October
14, 1993 rulemaking (i.e., No. 91N-100H), which, the agency said, was
ongoing.
In this document, FDA is finalizing its October 14, 1993, proposal
to authorize health claims on the relationship between folate and
neural tube defects. This final rule pertains to conventional food as
well as to dietary supplements. Elsewhere in this issue of the Federal
Register, FDA is proposing to revoke the regulation on this nutrient-
disease relationship that became final by operation of law.
6. The Dietary Supplement Health and Education Act of 1994
The President signed the Dietary Supplement Health and Education
Act of 1994 (Pub. L. 103-417) (hereinafter referred to as the DSHEA)
into law on October 25, 1994. Among other things, the DSHEA defines
``dietary supplements'' (in section 3(a)).
In the October 14, 1993, proposal, FDA used the terms ``dietary
supplements of vitamins, minerals, herbs, and other nutritional
substances'' and ``food in conventional food form.'' Under the changes
effected by the DSHEA (see sections 3 (a) and (c) of the DSHEA), the
form of a product is no longer determinative of whether the product is
a dietary supplement. Accordingly, with the exception noted below, FDA
will use the terms ``food'' or ``foods'' in this document to reflect
this change and the act's definition of ``dietary supplements.'' FDA
will use the terms ``conventional food'' and ``dietary supplement'' in
response to comments dealing with the bioavailability of folate, for
which a distinction needs to be made between foods and dietary
supplements. Where other terminology was used in the regulatory
language of the October 14, 1993, proposal, FDA has modified that
language to conform to the changes effected by DSHEA.
B. Relationship Between Folate and Neural Tube Defects
The agency reviewed and updated the scientific literature on the
relationship between folate and neural tube defects in the Federal
Register of November 27, 1991 (56 FR 60610), January 6, 1993 (58 FR
2606), and October 14, 1993 (58 FR 53254), and provides only a brief
summary here.
Folate. The term ``folate,'' as used in this document, includes the
entire group of folate vitamin forms: That is, folic acid
(pteroylglutamic acid), the form of the vitamin added to dietary
supplements and to fortified foods, and the naturally- occurring
folylpolyglutamates (pteroylpolyglutamates) which are found in foods.
``Folate'' is thus the general term used to include any form of the
vitamin, without reference to the state of reduction, degree of
substitution, or number of glutamates. As a vitamin, folate functions
metabolically in the synthesis of amino acids and nucleic acids.
Insufficient quantities of folate in the diet lead to impaired cell
multiplication and alterations in protein synthesis (Ref. 1). These
effects are most noticeable in rapidly growing or dividing cell
populations (Ref. 1). Pregnancy increases the need for folate and many
other nutrients because of the need of the mother to maintain adequate
nutrition and to meet the nutritional requirements of the developing
fetus.
Neural tube defects. Neural tube defects are serious birth defects
that can result in infant mortality or serious disability. The birth
defects anencephaly and spina bifida are the most common forms of
neural tube defects and account for about 90 percent of these defects.
These defects result from failure of closure of the covering of the
brain or spinal cord during early embryonic development. The neural
tube forms between the 18th and 20th days of pregnancy and closes
between the 24th and 27th days. Because the neural tube forms and
closes during early pregnancy, the defect may occur before a woman
realizes that she is pregnant.
Each year, about 2,500 cases of neural tube defects occur among
about 4 million births in the United States (i.e., in approximately 6
of 10,000 births annually). Recent data from State-based birth defects
surveillance systems show declining trends for neural tube defects in
the United States for about the last 30 years (Ref. 2). The Maternal
and Child Health Bureau of the Health Resources and Services
Administration reported that the neural tube defect rate in the United
States has declined from 1.3 per 1,000 live births in 1970 to 0.6 per
1,000 live births in 1989 (Ref. 3).
The majority of neural tube defects are isolated defects and are
believed to be caused by multiple factors. About 90 percent of infants
with a neural tube defect are born to women who do not have a family
history of these defects. Neural tube defects have been reported to
vary with a wide range of factors including genetics, geography,
socioeconomic status, maternal birth cohort, month of conception, race,
nutrition, and maternal health, including maternal age and reproductive
history (Ref. 4). Women with a close relative (i.e., sibling, niece,
nephew) with a neural tube defect, with insulin-dependent diabetes
mellitus, and with seizure disorders who are being treated with
valproic acid or carbamazepine are at significantly increased risk
compared with women without these characteristics. Rates for neural
tube defects also vary within the United States, with lower rates
observed on the west coast than on the east coast.
Several lines of evidence led to the hypothesis that nutritional
factors might be associated with some human neural
[[Page 8754]]
tube defects (see 56 FR 60610, 58 FR 2606, and 58 FR 53254). Among the
nutrients that were hypothesized to play a role in reducing the risk of
neural tube defects, folate, a B vitamin, received the greatest
attention because of associations between folate intake and reduced
risk of neural tube defects found in observational studies in humans
and because of the well- recognized role of folate in cell division and
growth. Because the neural tube forms early in embryonic development,
interventions aimed at reducing the risk of these defects must occur
periconceptionally (i.e., during the interval extending from at least 1
month before conception and continuing through the first 6 weeks of
pregnancy).
In the folate health claim proposal (58 FR 53254), FDA tentatively
concluded that the available data show that folate alone may reduce the
risk of recurrence of neural tube defects when given periconceptionally
at high-dose levels (i.e., 4 mg/day) to women at high risk of such a
recurrence. Additionally, based on a synthesis of information from
several observational studies that reported periconceptional use of
multivitamins containing 0 to 1,000 micrograms (mcg or g) of
folic acid, FDA inferred that folic acid intake at levels of 0.4 mg
(400 mcg) per day may reduce the risk of occurrence of neural tube
defects. Protective effects measured by reduction in incidence of
neural tube defects have been found in several observational studies
that reported periconceptional use of multivitamin supplements
containing about 400 mcg folic acid.
Public health significance. Reduction in adverse pregnancy outcomes
such as birth defects is an important public health goal. Because most
neural tube defects occur in women without a history of such outcomes,
interest in reducing the risk of first occurrences has been very high.
PHS has inferred that if all women of childbearing age consumed 0.4 mg
(400 mcg) folic acid daily throughout their childbearing years, there
might be a reduction in neural tube defects of about 50 percent (i.e.,
about 1,250 cases per year) (Ref. 5).
C. Regulatory and Other Activities Related to Folate and Neural Tube
Defects
Since the passage of the 1990 amendments in November 1990, the
rapidly evolving nature of the science relative to folate and the risk
of neural tube defects and a number of PHS activities have intertwined
with the regulatory process on the question of whether a health claim
should be authorized on this topic. These developments have resulted in
a dynamic process that began with the publication of a proposed rule
not to authorize a health claim on folic acid and neural tube defects
(56 FR 60610); saw PHS issue a recommendation that all women of
childbearing age in the United States should consume 0.4 mg of folic
acid per day for the purpose of reducing their risk of having a
pregnancy affected with spina bifida or other neural tube defect (Ref.
5); included meetings of FDA's Folic Acid Subcommittee and Food
Advisory Committee (Refs. 6 and 7); and was marked by FDA publishing a
final rule that noted that, while the PHS recommendation evidenced that
significant scientific agreement exists regarding the relationship
between folate and neural tube defects, there were significant
unresolved questions about the safe use of folic acid in food (58 FR
2606). In its January 6, 1993, Federal Register document, the agency
concluded that it could not authorize a health claim for folate until
the questions regarding the safe use of this nutrient, as well as other
concerns raised by PHS, were satisfactorily resolved.
The process proceeded to the point where, in October 1993, FDA
stated that it had tentatively concluded that the safety questions had
been resolved, and that there is significant scientific agreement about
the validity of the relationship between folate and neural tube defects
(58 FR 53254). The agency also tentatively concluded that, based on its
discussions with the Folic Acid Subcommittee and its analyses of food
intake data, daily folate intakes can be maintained within safe ranges
by allocating fortification with folic acid to specific foods in the
food supply through an amendment to the food additive regulation for
folic acid.
The agency therefore proposed to authorize a health claim relating
diets adequate in folate to a reduced risk of neural tube defect-
affected pregnancies (58 FR 53254). In companion documents published in
the same issue of the Federal Register, the agency also proposed to
provide for the safe use of folic acid in foods by amending the food
additive regulations for folic acid (58 FR 53312) and to amend the
standards of identity for specific enriched cereal-grain products to
require the addition of folic acid (58 FR 53305).
The agency convened the Folic Acid Subcommittee and the Food
Advisory Committee on October 14 and 15, 1993 (Ref. 8). Members were
asked to comprehensively review the October 14, 1993, proposals and to
provide comments. The agency requested that the Folic Acid Subcommittee
give priority to the health claim issue because the DS Act required
that health claim regulations be finalized by December 31, 1993. The
agency treated the discussions of the Folic Acid Subcommittee as
comments. A summary of the discussions that occurred during the
meetings is provided in the summary of comments below.
As stated above, in January 1994, FDA announced (59 FR 433) that,
by operation of law, the regulation that it proposed on October 14,
1993 (58 FR 53254), to authorize the use of a health claim about the
relationship between folate and the risk of neural tube defects was a
final regulation applicable to the label and labeling of dietary
supplements only. The agency also advised that, given the PHS
recommendation and the results of the agency's review of the evidence
on this claim, in addition to authorizing the claim on dietary
supplements, it had no intention of taking action against conventional
foods that are naturally high in folate that bear a claim on this
nutrient-disease relationship, so long as the claim fully complies with
the provisions of the regulation that became final for dietary
supplements by operation of law.
D. Scope of This Document
In the Federal Register of October 14, 1993 (58 FR 53254), the
agency posed a series of questions for itself. These questions, and the
agency's proposed answers, provided the outline for the October 14,
1993 document. The questions were: (1) Is a health claim on the
relationship between folate and neural tube defects appropriate on food
labels? (2) If the agency concludes that a health claim can be safely
implemented, what should such a claim say about folate and neural tube
defects? (3) Should the food supply be fortified with folic acid to
ensure that women have adequate folate intakes? If so, is it necessary
to limit the foods to which folic acid can be added and the levels at
which it can be added to those foods? (4) If there are to be
limitations on the foods that can be fortified with folic acid, which
foods are most appropriate for fortification, and at what levels should
they be fortified?
During the development of this final rule, data on the folate
status of the U.S. population obtained during Phase 1 of the Third
National Health and Nutrition Examination Survey (NHANES III, Phase 1,
1988-1991) became available. The agency anticipated evaluating red
blood cell (RBC) and serum folate data, and data on folate intake from
foods and
[[Page 8755]]
dietary supplements from this survey. Additionally, because the NHANES
III folate consumption data are more current than the data used by the
agency in developing its October 14, 1993, proposals for food
fortification and for amending the agency's food additive regulation
for folic acid (58 FR 53305 and 58 FR 53312, respectively), the agency
considered delaying completion of these rulemakings until evaluation of
the newer data was complete.
However, in late 1993, FDA became aware of a methodological problem
associated with the radioassay kits used in NHANES III (1988 to 1994)
that affected serum folate and RBC folate values and, consequently,
data interpretation. FDA's Center for Food Safety and Applied Nutrition
requested that the Life Sciences Research Office (LSRO), Federation of
American Societies for Experimental Biology (FASEB), review, under a
contract with FDA, the issues and report its findings to the agency.
FDA requested that LSRO/FASEB: (1) Examine the analytical bases of the
discrepancies associated with serum folate and RBC folate values
derived from use of certain analytical kits used in NHANES III (1988 to
1991); (2) evaluate the scientific basis and validity of procedures
proposed by the Centers for Disease Control and Prevention (CDC) to
make corrections to serum folate and RBC folate values obtained in
NHANES III Phase 1 (1988 to 1991); (3) reexamine current ``cutoff''
values used for estimation of ``deficient,'' ``low status,'' etc., in
light of the need for application of a correction factor; and (4)
determine whether these approaches are still useful for estimating the
prevalence of inadequate folate nutriture in the U.S. population.
A full description of the problem, the analytical issues involved,
the issues that arose that are related to the interpretation of NHANES
III Phase 1 (1988 to 1991) data, and LSRO/FASEB's conclusions are
presented in ``Assessment of Folate Methodology Used in the Third
National Health and Nutrition Examination Survey (NHANES III, 1988-
1991)'' (Ref. 9). A major conclusion of LSRO/FASEB was that neither
adjustment of the serum folate or RBC folate data from NHANES III Phase
1 (1988 to 1991) to correct for the analytical problem, the use of the
data without adjustment, nor the use of either data set with adjusted
criteria for normalcy and deficiency, by themselves, can predict the
prevalence of inadequate folate nutriture of the U.S. population.
Based on LSRO/FASEB's report and its own review of the data, the
agency has concluded that while there is a need for further evaluation
of the NHANES III (1988 to 1991) serum folate and RBC folate data set,
the agency will not delay this rulemaking until such evaluation is
complete.
The complete data from NHANES III (1988 to 1994) on folate intake
from food and dietary supplements are not yet publicly available.
Therefore, the agency cannot evaluate total folate intakes from foods
and from dietary supplements from this survey data. The agency has
concluded that it will also not delay the fortification and food
additive rulemakings until the expected availability of these data in
1996.
II. Summary of Comments and the Agency's Responses
The agency received nearly 100 comments in response to its October
14, 1993, proposed rule on a health claim on folate and neural tube
defects. In addition, as stated above, FDA submitted the transcript of
the October 14 and 15, 1993, meetings of the Folic Acid Subcommittee
and Food Advisory Committee, in which the proposed rule was discussed,
to the docket 91N-100H as a comment (Ref. 8). Comments were received
from individual members of FDA's Folic Acid Subcommittee and Food
Advisory Committee and invited guest consultants; other Federal
agencies; a foreign government; State departments of agriculture,
consumer services, or health; health care professionals; consumers;
consumer advocacy groups; national organizations of health care
professionals; State and territorial public health nutrition directors;
manufacturers and suppliers of vitamins to the conventional food
industry and the dietary supplement industry; manufacturers of finished
foods including breakfast cereals, frozen foods, and bakery products;
and trade associations of dietary supplement manufacturers, bakers,
millers, and food processors. A number of comments were received that
were more appropriately answered in other dockets, and these were
forwarded to the appropriate dockets for response.
FDA has considered all of the comments on a health claim on folate
and neural tube defects that it received. The agency reviewed all of
the documents, including letters, press releases, scientific articles
and data supporting these articles, review articles, and
recommendations, that were included in the comments. A summary of the
comments that the agency received and the agency's responses follow.
A. Advisability of Authorizing Health Claims
1. Some comments endorsed health claims because of their potential
educational benefits, while other comments stated that health claims on
foods that focus on single nutrients are a bad idea because
combinations of foods, not single nutrients, build health. The
advisability of health claims was also discussed at the October 14 and
15, 1993, meeting of the Folic Acid Subcommittee (Ref. 8).
The agency notes that the issue of whether health claims should be
permitted in food labeling is moot because the 1990 amendments
authorized claims on the relationship between substances and diseases
or health-related conditions if the scientific validity standard is
met.
B. Advisability of Authorizing a Health Claim for Folate and Neural
Tube Defects
In Sec. 101.79(c)(2)(i)(A) (21 CFR 101.79(c)(2)(i)(A)), FDA
proposed to authorize health claims on labels or in labeling of
conventional foods and dietary supplements on the relationship between
folate and neural tube defects in women of childbearing age.
1. Scientific Validity Standard: Adequacy of the Scientific Data
2. Many comments supported FDA's tentative decision to authorize a
health claim on the relationship between folate and neural tube defects
but did not provide any specific reasons for their support. Several
comments noted that the scientific basis for the claim was as strong as
that used to authorize other claims (e.g., those relating calcium and
osteoporosis and saturated fat and heart disease). Members of the Folic
Acid Subcommittee who supported a health claim noted that such claims
would provide information to the target population, and that such
claims tend to be more effective than educational programs alone.
Other comments opposed the health claim, identifying specific
concerns with the quality and quantity of the data used to develop the
PHS recommendation and to support the proposed health claim. Members of
the Folic Acid Subcommittee who opposed a health claim cited the
weakness of the data supporting the relationship, including the very
small number, and observational nature, of studies relating intake of
folate at levels attainable from usual diets to reduced risk of neural
tube defects and the many issues associated with the interpretation of
these studies (58 FR 53265).
[[Page 8756]]
Several comments noted that because of the variety of
micronutrients in addition to folic acid contained in supplements whose
use was reported in several case-control studies, and because foods
high in folate are also important sources of other micronutrients, it
is not possible to isolate an independent role for folate in reduction
in risk of first occurrences of neural tube defects. Other comments
also expressed concern regarding the lack of folate-specific data at
intakes of 400 mcg daily and noted that studies showing a positive
impact of use of multivitamins containing 400 to 1,000 mcg of folic
acid may have been showing a combined effect of folic acid and vitamin
B12 or of folic acid and other components of the multivitamin
preparations.
A comment noted that there is little knowledge about biological
mechanisms that would explain the role of folate in reduction in risk
of neural tube defects. The comment stated that it was inappropriate to
conclude that, because folic acid alone at a supraphysiologic dose
(i.e., 4,000 mcg/day; 4 mg/day) is effective in reducing the risk of
neural tube defects among women at recurrent risk, it would also reduce
the risk of such defects among women at much lower risk of a first
occurrence when consumed at lower doses (i.e., at 400 mcg/day; 0.4 mg/
day). Another comment expressed the opinion that the agency should not
authorize a claim because there is not significant scientific agreement
that the evidence supports the claim.
Section 101.14(c) (21 CFR 101.14(c)) states that the agency will
issue a regulation authorizing a health claim when it determines, based
on the totality of the publicly available scientific evidence, that
there is significant scientific agreement, among experts qualified by
scientific training and experience to evaluate such claims, that the
claim is supported by such evidence.
For folate and neural tube defects, the agency evaluated all of the
available scientific evidence, consulted with the Folic Acid
Subcommittee and Food Advisory Committee about this evidence, and
considered all the information contained in the comments. Based on this
review, FDA has concluded that there is significant scientific
agreement that the data associating folate intake and reduced risk of
neural tube defects support a health claim on this relationship.
The strongest evidence for this relationship comes from the
randomized controlled Medical Research Council intervention study (Ref.
14) that showed that women at risk of a recurrence of a neural tube
defect-affected pregnancy who consumed a supplement containing 4 mg
(4,000 mcg; 10 times the reference daily intake (RDI) folic acid daily
throughout the periconceptional period had a significantly reduced risk
of having another child with a neural tube defect. This study
demonstrated, for the first time, that there was a significant
reduction in recurrence of neural tube defects with high levels of
folic acid but not with other vitamins and minerals. This study
identified a specific role for folic acid in reducing the risk of
recurrence of neural tube defect-affected pregnancies in women with a
history of this defect and thus established the scientific basis for a
relationship between folate intake and the occurrence of neural tube
defects.
In addition, protective effects against occurrence of neural tube
defects were found in a Hungarian randomized controlled trial that used
a multivitamin/multimineral preparation containing 0.8 mg folic acid
daily (Ref. 15). Four of five observational studies have also reported
a reduced risk of neural tube defects among women who reported
consuming 0.4 to 1.0 mg folate daily from multivitamin supplements
(Refs. 10, 11, 13, and 16). Several of these studies (Refs. 11, 13, and
16) have also reported beneficial effects against occurrence of neural
tube defects of dietary folate intakes of 100 to 250 mcg or more daily.
Based on its review of all of these studies, the agency has
concluded that their results are consistent with the conclusion that
folate, at levels attainable from usual diets, may reduce the risk of
occurrence of neural tube defects.
The agency agrees that there are still significant gaps in our
knowledge about the etiology of neural tube defects; about how folate,
either alone or in combination with other nutrients, reduces the risk
of neural tube defects; about dose-response relationships between
folate intake and reduction in risk of neural tube defect-affected
pregnancies; and about the role of other essential nutrients in the
etiology of neural tube defects. However, the randomized controlled
Medical Research Council trial (Ref. 14) clearly established the
specific effectiveness of increased folate intake in reducing the risk
of recurrence of some neural tube defects, and the findings of most of
the studies cited above (Refs. 9, 10, 11, 13, and 16) are consistent
with the conclusions drawn from the results of the Medical Research
Council trial.
Because of the consistency between the results of the Medical
Research Council trial and the results of the smaller observational
studies, PHS has inferred that folate alone, at levels attainable in
usual diets, may reduce the risk of neural tube defects (Ref. 5). FDA
participated in the development of the PHS recommendation and noted in
the folate health claim proposal (58 FR 53266) that the recommendation
evidenced that significant scientific agreement exists regarding the
validity of an association between folate intake and risk of neural
tube defects.
FDA has therefore concluded, based on its own review of the
scientific literature, that there is significant scientific agreement
regarding the validity of the relationship, and that the statutory
requirements for authorizing a health claim in this topic area have
thus been met. Therefore, the agency is adopting
Sec. 101.79(c)(2)(i)(A) as proposed.
2. Appropriateness of Providing for a Claim
In addition to comments addressing the scientific validity of a
health claim on folate and neural tube defects, the agency received
comments questioning the advisability of authorizing a claim on this
topic.
a. General comments.
3. Some comments stated that it was advisable to provide for a
folate/neural tube defects health claim because such a claim can serve
to broaden public knowledge of the relationship between folate and
neural tube defects. A comment noted that the folate/neural tube defect
claim might be especially beneficial for women who had previously had a
child with a neural tube defect. One comment suggested that a health
claim for folate and neural tube defects would increase intake of
folate by women of childbearing age.
Others expressed concern by noting that consumers will find it
difficult to understand the claim and will begin to associate folate-
containing foods with an effect on birth defects in general. A comment
noted that, given that many occurrences of neural tube defects will not
be affected by folate intake, the claim will give a false hope of
avoidance of the defect. A comment expressed concern that publication
of the claim might cause unnecessary alarm among women who are
pregnant. Other comments noted that neural tube defects are not the
result of folate deficiency per se or noted the lack of evidence that
there is a need in the general U.S. population for an increase in
folate intake. Another comment, in considering the agency's proposed
model health claims, noted that FDA
[[Page 8757]]
was trying to make the food label do more than it can.
Another comment emphasized that the context in which data from the
major controlled intervention trial of effects of folic acid at levels
approaching those obtainable from diets (i.e., the Hungarian trial;
Ref. 15) were obtained (e.g., women who volunteered for the trial gave
up drinking and smoking, consumed healthful diets before pregnancy, and
in general pursued good health practices in the periconceptional
interval) is not the same context in which women in the general
population will receive folate.
The agency agrees with the comments above that a health claim for
folate and neural tube defects may have an educational benefit and has
the potential for increasing folate intake among women in the target
population by informing them of the importance of folate intake during
their childbearing years. The agency also recognizes the importance of
informing women of childbearing age of the need to ensure that their
diets include adequate folate throughout this time of their lives and
notes that providing information at the point of purchase of food by
means of health claims and nutrient content claims can be an effective
means of getting the information to consumers and of helping consumers
to maintain healthful diets. Given that about half of all pregnancies
are unplanned, many women in the general population can benefit from
the information provided in the health claim because it will motivate
them to increase their folate intake, even if they are not anticipating
a pregnancy in the near future.
The agency recognizes that women in the Hungarian trial (Ref. 15)
were advised to adopt specific health conscious practices before
attempting to become pregnant, and that women in the general population
may not adopt such practices before becoming pregnant. The agency
notes, however, that there are no data to indicate that the outcome of
the Hungarian trial was related to or dependent upon the adoption of
those practices, and that all women in the trial were urged to adopt
those practices, not only those receiving folate-containing
supplements. The agency finds no basis to deny the claim based on such
a consideration. In addition, although emphasis is frequently placed
upon estimates that about half of all pregnancies in the United States
are unplanned, the agency notes that the large numbers of women who do
plan their pregnancies (i.e., about 50 percent) may be adopting health-
conscious practices before conception and thus may receive folate in a
context similar to that employed in the Hungarian trial.
The agency recognizes that there is the potential for the health
claim to be misleading and has addressed that potential by requiring
that all claims contain specific information that informs women about
the effect that adequate intake of folate during their childbearing
years may have on their risk of a specific type of birth defect,
without implying that adequate folate intake will provide 100 percent
protection against that, or any other, birth defect. The agency
recognizes that many nutrients, as well as attention to overall diet
and healthful lifestyles, are important for obtaining the best possible
outcome of pregnancy and has incorporated these concepts into the
language of the health claim.
Specifically, in this health claim regulation, the agency
identifies the target population for the claim as women during their
childbearing years (Sec. 101.79(c)(2)(i)(A)); describes the effect of
folate intake on the risk of neural tube defects, a very specific type
of birth defect (Sec. 101.79(c)(2)(i)(C)); requires that claims not
imply that folate intake is the only recognized risk factor for neural
tube defects (Sec. 101.79(c)(2)(i)(D)); summarizes the significance of
appropriate folate intake relative to reduction in risk of neural tube
defects in the total dietary context by requiring that claims state
that healthful diets are also needed (Sec. 101.79(c)(2)(i)(H)); and
provides for optional (voluntary) identification of a variety of
sources of folate in the claim (Sec. 101.79(c)(3)(vii)). In describing
the requirements for foods to bear the claim, the agency has defined
characteristics that will qualify a food for bearing the folate/neural
tube defect health claim with an eye to ensuring that such foods will
be good sources of folate (Sec. 101.79(c)(2)(ii)(A)).
Provision of such information will assist women in understanding
the relationship of folate intake to the risk of neural tube defects
and the significance of the information in the context of the total
daily diet. Thus, the claim includes facts essential for consumer
understanding of the conditions and circumstances under which the
claimed effect is more likely to be obtained.
b. Small size of the population at risk.
4. Some comments disagreed with the agency's proposal to authorize
a health claim for folate and neural tube defects because other
authorized claims are different from this one. They pointed out that
the folate claim deals with a problem that affects a very small number
of people, while other authorized claims deal with reducing the risk of
long-developing conditions affecting very large segments of the
population (e.g., calcium and osteoporosis; fat and heart disease).
Another comment noted that there have been large unexplained declines
in neural tube defects in the United States since the 1930's. Another
comment noted that neural tube defects constitute only a small fraction
of all birth defects and stated that the proposed claim could lead to a
false sense of security regarding protection from risk of all birth
defects. Another comment noted that despite their distressful nature,
because neural tube defect-affected births are a relatively rare
phenomena, they should be attacked at a medical level.
The agency disagrees with comments that it should not authorize a
folate/neural tube defect health claim on the basis that the affected
population is small in number. The eligibility requirements for a
health claim do not limit such claims solely to disease or health-
related conditions affecting significant portions of the population.
Rather, the general eligibility requirements for health claims require
that for a substance to be eligible for a health claim, the substance
must be associated with a disease or health-related condition for which
the general population or an identified U.S. population subgroup (e.g.,
the elderly) is at risk (see Sec. 101.14(b)(1)).
As FDA explained in the final rule establishing Sec. 101.14(b)(1)
(58 FR 2478 at 2499), the agency will interpret this provision flexibly
and will disqualify few claims under it. However, the agency also
advised that if the affected population is small in size or is not
readily identifiable, information on prevalence in the U.S. population
will be a material fact that must be disclosed to avoid misbranding the
product.
FDA agrees that the prevalence of pregnancies affected by neural
tube defects in the United States is low. However, because it is not
currently possible to predict when a pregnancy will be affected, the
U.S. subpopulation potentially at risk is large (i.e., women capable of
becoming pregnant). The agency, consequently, disagrees that this
health claim should not be authorized because a large subpopulation is
potentially at risk of a neural tube defect-affected pregnancy.
c. Potential impact of new data.
5. Several comments expressed concern that results of research in
progress on the potential role of factors other than folate could lead
to revisions of the current PHS recommendation that all women consume
0.4 mg of folate daily throughout their childbearing
[[Page 8758]]
years to reduce their risk of neural tube birth defects. A comment
noted that, based on testimony presented at the April 15 and 16, 1993,
meeting of the Folic Acid Subcommittee, data from ongoing studies in
South Carolina and Texas will be available soon and should provide
information on the effectiveness of folate-containing supplement
intervention programs in these areas. Another comment noted that data
reported at the recent meeting of the American Public Health
Association suggested that while reported intake of folate-containing
supplements appeared to be associated with a reduced incidence of
neural tube defect-affected pregnancies overall, the association was
not statistically significant for Hispanic women who have a higher risk
for neural tube defects than many other women.
Some members of the Folic Acid Subcommittee questioned whether new
data on vitamin B12 (summarized in section II.E.6. of this
document) should influence the agency's position on the relationship
between folate and neural tube defects. Another Folic Acid Subcommittee
member stated that regardless of the new findings, the agency should
move ahead with the folate/neural tube defect health claim.
The agency is aware that data from several ongoing studies have
been discussed at national meetings, but until these data and detailed
descriptions of study designs, methodologies, and full results are
publicly available, the agency cannot act on them. New data that have
become publicly available during this rulemaking are reviewed in
Section II.E.6 of this document. The agency notes, however, that the
validity of the relationship between folate and neural tube defects has
been established by the Medical Research Council trial (Ref. 14). New
findings are not likely to detract from the validity of that
relationship.
C. Issues Regarding the Substance/Disease Relationship That Is the
Basis of the Claim
1. Identifying the Substance (Folic Acid Versus Folate)
In developing its proposed regulation, the agency considered how
best to describe the relationship between folate and neural tube
defects. In the proposed statement of the substance/disease
relationship (Sec. 101.79(c)(2)(i)(A)), FDA described the substance
that is the subject of the claim as ``folate.'' FDA also used this term
in proposed Sec. 101.79(a)(2), (b)(1), (b)(3), (c)(2)(i)(B),
(c)(2)(i)(F), (c)(2)(ii)(A), (c)(2)(ii)(B), (c)(2)(iv), (c)(3)(ii), and
(d). The agency's use of this term differed from the wording of the
1990 amendments which required that FDA evaluate the relationship
between ``folic acid'' and neural tube defects.
Based on its review of the available studies, the agency in its
October 14, 1993, proposed rule (58 FR 53254 at 53280) described its
rationale for broadening the topic by noting that the term ``folates''
is used broadly to represent the entire group of nutritionally active
folate vitamin forms and includes both synthetic folic acid and the
folylpolyglutamates that occur naturally in foods.
In reviewing the scientific evidence on the relationship between
folate and neural tube defects, the agency noted that some studies
reported effects of use of supplements of folic acid in combination
with intakes of food folates (Ref. 10), while other studies reported
effects of dietary intakes of food folates alone (Refs. 11, 13, and
16). Based on its review of these studies, the agency tentatively
concluded that the diet/disease relationship is more accurately
described as being related to all of the biologically active vitamin
forms of folate rather than just to the synthetic form of the vitamin
(i.e., folic acid). Thus, in its review of the substance/disease
relationship, FDA considered the effect of all of the nutritionally
active forms of this vitamin (i.e., folates) on neural tube defects and
not just the effect of the form of the vitamin specified in the 1990
amendments (i.e., folic acid). Use of the term ``folate'' in proposed
Sec. 101.79(a)(2), (b)(1), (b)(3), (c)(2)(i)(B), (c)(2)(i)(F),
(c)(2)(ii)(A), (c)(2)(ii)(B), (c)(2)(iv), (c)(3)(ii), and (d) was
consistent with the scope of the agency's review.
6. A comment stated that FDA had unjustifiably changed the
demonstrated efficacious form of the vitamin from ``folic acid'' to
``dietary folate,'' and that because dietary food folate has not been
demonstrated to reduce the incidence of neural tube defects, such a
change is not justified. Several comments stated that FDA, in its
health claims proceedings, had departed from the PHS recommendation,
which uses the term ``folic acid'' in its title and in describing
dietary change associated with reduced risk of neural tube defects, and
that FDA, instead, concentrated inappropriately on food folate.
FDA does not agree with these comments and concludes that it was
justified in expressing the food substance/disease relationship as
``folate and neural tube defects'' rather than as ``folic acid and
neural tube defects.'' FDA also disagrees with the comments that folic
acid is the only substance that was appropriately the subject of FDA's
review, and that dietary food folate has not been demonstrated to
reduce the incidence of neural tube defects.
a. Efficacy of food folate. In reviewing the scientific evidence on
the relationship between folate and neural tube defects, the agency
noted that one study attributed all observed effects to consumption of
dietary supplements of undefined composition without quantifying
contribution of folate either from the supplements or from food (Ref.
10), while other studies attempted to specifically quantify intakes of
folate from food as well as from dietary supplements (Refs. 11, 13, and
16).
Some studies reported protective effects of use of supplements
containing folic acid in combination with intakes of food folates
(Refs. 11, 13, and 16), while other studies reported protective effects
from dietary improvement in general (Ref. 17) or from intakes of food
folates alone (i.e., without supplement use) (Refs. 11 and 13).
Milunsky et al. (Ref. 11), Bower and Stanley (Ref. 16), and Werler
et al. (Ref. 13) presented data on the relationship of dietary folate
to risk of neural tube defects among nonusers of dietary supplements.
Each of these studies found reduced risk of neural tube defects
associated with increasing dietary intake of food folate. In the
prospective study of Milunsky et al. (Ref. 11), the relative risk of
neural tube defects was 0.42 for those women ingesting more than 100
mcg folate per day compared with those ingesting less than 100 mcg
folate per day. Bower and Stanley (Ref. 16), in a study in Western
Australia, found reduced risk of neural tube defects among women
consuming more than 240 mcg food folate per day versus community
controls. Werler et al. (Ref. 13) reported a significant trend of
reduced occurrence of neural tube defects with increasing dietary food
folate.
Laurence et al. (Ref. 17) performed a trial of dietary education
without prescribing supplements and found that improvement in women's
diets from ``poor'' to ``good'' led to a 50 percent reduction in
recurrence of neural tube defects in women at high risk of this
complication. Dietary improvement is assumed to increase intake of
folate and many other nutrients by unspecified amounts. Specifically,
these authors reported no cases of neural tube defects among women who
were judged to have eaten ``good'' or ``fair'' diets (Ref. 17). All
recurrences occurred among the 30 of 186 women who were judged to have
eaten ``poor'' diets. ``Poor'' diets were defined as those considered
to be deficient in first-class protein, usually no fruits and
vegetables, and generally
[[Page 8759]]
with excessive amounts of carbohydrates. ``Good'' diets were defined as
those providing good intakes of all essential foods, including protein,
and with no excessive amounts of refined carbohydrates, sweets, and
soft drinks (see 58 FR 53253, October 14, 1993).
The studies of Milunsky et al. (Ref. 11), Bower and Stanley (Ref.
16), Werler et al. (Ref. 13), and Laurence et al. (Ref. 17) have all
demonstrated that food folates provide protective effects against risk
of neural tube defects.
b. Interchangeability of the terms ``folate'' and ``folic acid'' in
common usage and in nutrition labeling. FDA notes that, in common
usage, the terms ``folic acid'' and ``folate'' are frequently used
interchangeably to describe the biologically active forms of the
vitamin. Folates are ubiquitous in nature, being present in nearly all
natural foods (Ref. 18), and occurring in a wide range of forms (Ref.
19). Human nutritional requirements for folate can be met by a variety
of naturally occurring forms of the vitamin from many sources as well
as by pteroylglutamic acid, the form of the vitamin added as a
fortificant to breakfast cereals and other foods, and the form present
in dietary supplements.
In nutrition labeling, ``folic acid,'' ``folate,'' and ``folacin''
are allowable synonyms (Sec. 101.9(c)(8)(iv) and (c)(7)(iv)). All of
these terms provide a way to describe the nutritional value of folate
vitamin forms, although the term ``folacin'' is now rarely used.
c. Interchangeability of the terms ``folate'' and ``folic acid'' in
the PHS recommendation. FDA disagrees that the PHS statement emphasizes
synthetic folic acid, the form of the vitamin used as a fortificant in
conventional foods and in dietary supplements. In point of fact, the
PHS statement, consistent with lay information and with nutrition
labeling regulations, uses the terms ``folic acid'' and ``folate''
interchangeably (Ref. 5). For example, the PHS recommendation states
that ``folate intake 0.4 mg/day can be obtained from the
diet through careful selection of foods,'' that improvement in dietary
habits is one potential approach ``for the delivery of folic acid to
the general population in the dosage recommended,'' and that ``women
should be careful to keep their total daily folate consumption at < 1
mg per day'' (Ref. 5).
That some ambiguity with respect to use of the terms ``folic acid''
and ``folate'' was present in the PHS recommendation was recognized
during finalization of the recommendation at a CDC-sponsored meeting
held in Atlanta on July 27, 1992. At that meeting, CDC staff noted that
the ambiguity was deliberate (Ref. 20):
INVITED SPEAKER WALD: There is an ambiguity here over whether
it's total or extra, unless you have a particularly kind of astute
legal perspective on this. * * * I have a question, though. Was the
ambiguity deliberate?
CDC's ERICKSON: Yes.
INVITED SPEAKER WALD: You see, I think I would have probably
inserted the same ambiguity myself. Because the intention is to get
something going. * * * And one has the 0.4 mg figure from the
previous RDA * * * at least that is a psychological fixing point.
Thus, there was some ambiguity in the PHS recommendation from the
time of its development, and the recommendation does not identify
synthetic folic acid as the sole active form of the vitamin.
d. Conclusion. Based on its review of the available studies, the
agency tentatively concluded in the proposed rule that the food
substance/disease relationship is most accurately expressed as ``folate
and neural tube defects'' rather than as ``folic acid and neural tube
defects'' because the term ``folate'' encompasses all forms of the
vitamin from any source. In addition, at intakes attainable from usual
diets, both folate from foods and folic acid from fortified foods or
dietary supplements are converted into the same functional,
metabolically active, reduced coenzyme vitamin forms in the body (Ref.
19). Thus, nutritional requirements are met by a variety of forms of
folate, and, with respect to reduction in risk of neural tube defects,
the utility of increased folate intake, whether achieved through
improved food choices or through use of dietary supplements, has been
shown.
The comments summarized above do not provide a basis for the agency
to change the relationship statement because they are inconsistent with
the scientific data, and they do not provide data that demonstrate that
``folic acid'' performs nutritional functions different from those
performed by naturally occurring food folates. Thus, making a
distinction between ``folate'' and ``folic acid'' when all forms of the
vitamin are capable of conversion to active vitamin coenzymes and
metabolic function is artificial and inappropriate.
Therefore, in Sec. 101.79, FDA is authorizing a health claim on
labels and in labeling of conventional foods and dietary supplements
about the relationship between folate and neural tube defects in women
of childbearing age. The agency is retaining this terminology
throughout the codified language. However, Sec. 101.79(c)(2)(i)(B)
states that any one of several synonyms may be used, including ``folic
acid'' and ``folate,'' when specifying the nutrient in a health claim.
FDA notes that in proposed Sec. 101.79(c)(2)(i)(F), the term
``folic acid'' was used instead of the intended term ``folate,'' which
was otherwise consistently used throughout the proposed codified
language. FDA is correcting this terminology in the final codified
language, which for other reasons described in this preamble is
redesignated as Sec. 101.79(c)(2)(i)(E).
2. Issues of Source and Amount
In Sec. 101.79(c)(2)(i)(H), the agency proposed to prohibit
statements in the health claim that a specified amount of folate (e.g.,
400 mcg (100 percent of the Daily Value (DV)) in a dietary supplement)
is more effective in reducing the risk of neural tube defects than a
lower amount (e.g., 100 mcg (25 percent of the DV) in a breakfast
cereal or from diets rich in fruits and vegetables). The agency
proposed this limitation because it is consistent with scientific data
showing that reduced risk of neural tube defects has been associated
with general dietary improvement, which is assumed to increase folate
intake by unspecified amounts. In response to this proposed limitation,
the agency received comments addressing the separate issues of source
of folate and amount of folate.
a. Source.
7. Several comments agreed with the agency's proposal, stating that
health claims should not contain statements that adequate diets cannot
provide sufficient folate, or that only fortified foods or supplements
can provide adequate folate. Other comments disagreed, stating that FDA
should require claims to state that the evidence that folate reduces
the risk of neural tube defects is stronger for supplements than for
food. Other comments stated that evidence that folate-rich diets reduce
the risk of neural tube defects is only suggestive, while evidence that
folic acid containing-supplements reduce the risk of neural tube
defects is conclusive.
The agency agrees with comments that health claims should not
contain statements that diets cannot provide sufficient folate to
affect the risk of a neural tube defect because such statements are
inconsistent with the available scientific evidence.
The studies of Milunsky et al. (Ref. 11), Bower and Stanley (Ref.
16), Werler et al. (Ref. 13), and Laurence et al. (Ref. 17) were
summarized in response to comment 6, above. Milunsky et al. (Ref.
[[Page 8760]]
11), Bower and Stanley (Ref. 16), and Werler et al. (Ref. 13) all
presented data on the relationship of dietary folate to risk of neural
tube defects among nonusers of dietary supplements. Each of these
studies found reduced risk of neural tube defects associated with
increasing intakes of dietary folate. Laurence et al. (Ref. 17) found
fairly strong protection against recurrence of neural tube defects
associated with improvement in overall diets.
FDA concludes, based on its review of the scientific literature,
that the proposed limitation in Sec. 101.79 on statements that specific
sources are superior to others is appropriate because the scientific
literature does not support the superiority of any one source over
others. As noted above, both folate from conventional foods and folic
acid from fortified foods or dietary supplements are converted into
functional, metabolically active coenzyme forms for use in the body
(Ref. 19). Thus, in the absence of the limitation, manufacturers would
be free to put statements that would be false and misleading in their
labeling. The agency's conclusion is consistent with PHS's
recommendation that advises that careful selection of foods is one
means by which women can increase their folate intakes.
b. Amount.
8. Several comments agreed with the agency that the claim should
not state that a specific amount of folate is more effective than
another amount. Several comments noted that dose/response data to
justify such statements do not exist, and that scientists do not yet
know the requisite folate level that will protect the fetus from a
neural tube defect. Other comments disagreed, stating that claims
should state that experts recommend 400 mcg per day or 100 percent of
the DV when referring to adequate amounts of folate. Another comment
stated that while the 400 mcg level is admittedly imprecise, it is the
recommendation of PHS. Another comment stated that consumers need to be
reminded that a reduction in neural tube defects will only occur if all
women consume 400 mcg folate per day throughout their childbearing
years.
The agency agrees with comments that dose/response data are
insufficient to provide a basis for stating that a specific amount of
folate is more effective than another amount. The quantitative results
from the studies of Milunsky et al. (Ref. 11), Bower and Stanley (Ref.
16), and Werler et al. (Ref. 13) suggest that amounts lower than the
current recommendation of 400 mcg may be protective.
After reviewing the comments above and the available scientific
literature, FDA concludes that the comments do not provide a basis for
the agency to change its position regarding prohibition of statements
in the claim that imply that specific amounts of folate are superior to
other amounts because such statements are inconsistent with the
scientific data. FDA's conclusion is consistent with information
provided in the PHS recommendation that states that amounts of folate
lower than 400 mcg may reduce the risk of neural tube defects, and that
additional research is needed to establish the minimum effective dose
(Ref. 5). Again, a contrary position by the agency would permit false
statements to appear on the label.
In the final codified language, the agency is redesignating
proposed Sec. 101.79(c)(2)(i)(H) as Sec. 101.79(c)(2)(i)(G) and, for
the reasons stated above, is prohibiting in Sec. 101.79(c)(2)(i)(G)
claims that a specified amount of folate per serving from one source is
more effective in reducing the risk of neural tube defects than a lower
amount per serving from another source.
c. Restriction of claims to specific products.
9. Several comments stated that the health claim should be limited
to supplements containing 400 or 800 mcg of folate or limited to
dietary supplements or breakfast cereals containing 400 mcg of folate.
Other comments stated that health claims should not be allowed for
naturally occurring food folates. Another comment stated that to allow
health claims solely on supplements or fortified foods would undermine
the need for women to learn to eat more healthfully and to obtain a
full array of nutrients found in a balanced diet.
The agency disagrees with comments that recommended that it limit
claims to dietary supplements or to dietary supplements and fortified
breakfast cereals that contain 400 mcg or more of folate. The agency's
review of the scientific literature, summarized in response to comments
6 to 8 above, provides no basis for making a distinction in source or
in amount between folate from conventional foods and folic acid from
dietary supplements or fortified cereals because the available evidence
shows that increased folate intake, rather than the source of the
folate, is what is of importance in reducing the risk of neural tube
defects (Ref. 5). Increasing total folate intake among women of
childbearing age, rather than emphasis on one source versus another, is
what is of importance. This conclusion is consistent with PHS's
recommendation, which states that improvement in dietary habits and use
of dietary supplements are both appropriate approaches by which women
may increase their folate intake.
d. Target intake goal. The agency proposed in Sec. 101.79(c)(3)(iv)
to include as optional information in the health claim a statement that
the DV level of 400 mcg of folate is the target intake goal.
10. Several comments stated that all health claims should refer to
the likely effectiveness of 400 mcg of folate, or that claims should be
required to state that experts recommend 400 mcg per day. Other
comments stated that 400 mcg is the PHS recommendation, and without
this information, women may assume that lower amounts are adequate.
The agency disagrees with these comments. FDA chose not to propose
to require that claims identify 400 mcg as the target intake goal
because it tentatively concluded that there is uncertainty as to the
optimal intake of folate with respect to reduction in risk of neural
tube defects (Ref. 5). As noted above, several studies (Refs. 11 and
13) have found reductions in risk of neural tube defect-affected
pregnancies at folate intakes below 400 mcg per day. None of the
comments provided evidence that showed that these findings were not
valid. Thus, FDA concludes that a requirement that claims state that
women must consume 400 mcg folate per day to achieve a reduction in
risk of a neural tube defect-affected pregnancy would be inconsistent
with the available scientific data.
However, because 400 mcg is the reference daily intake (RDI),
because PHS recommends a 400 mcg/day intake, and because the Folic Acid
Subcommittee supported the 400 mcg/day intake goal, the agency has
concluded that it may be helpful to some consumers if the health claim
were to include information that the RDI of 400 mcg per day is the
target intake goal. Therefore, FDA is adopting Sec. 101.79(c)(3)(iv) to
allow for optional inclusion of this information, with the target
intake goal (400 mcg; 0.4 mg) expressed as 100 percent DV. Claims may
identify 100 percent of the DV (400 mcg folate) as the target intake
goal and may state the PHS recommended daily intake (400 mcg folate,
0.4 mg).
3. Focusing on the Periconceptional Interval
In proposed Sec. 101.79(a)(1), the agency defined neural tube
defects as serious birth defects of the brain or spinal cord. The
agency noted that these defects result from a failure of the covering
of the brain or spinal cord to close during
[[Page 8761]]
early embryonic development and further noted that, because the neural
tube forms and closes during early pregnancy, the defect may occur
before a woman realizes that she is pregnant. In proposed
Sec. 101.79(a)(2), the agency described the relationship between
adequate folate intake and reduced risk of a neural tube defect-
affected pregnancy and summarized the studies whose results provide the
basis for the health claim.
11. A number of comments stated that studies have shown that folic
acid added to the diet before pregnancy reduces the risk of neural tube
defects, and that the relationship statement should be corrected to
reflect this fact.
The agency agrees that the studies that provide the basis for the
relationship between folate and neural tube defects focused on improved
folate nutriture before conception and continuing into early pregnancy.
Therefore, the agency is modifying several of the statements in
Sec. 101.79(a)(2) to more precisely describe the results of these
studies. Specifically, FDA is modifying the second sentence of
Sec. 101.79(a)(2) to state that in the studies described, folic acid
was consumed daily ``before conception and continuing into early
pregnancy * * *,'' and the fourth sentence to state that the study
involved reported periconceptional use of multivitamins that contained
folic acid.
12. A comment suggested that claims be allowed to be more precise
in describing the period during which adequate folate is needed. The
comment noted that the statement relating to daily consumption of
folate throughout the childbearing years implies that body folate
stores must be built up over decades, while studies have shown that it
is sufficient to consume folate during the weeks before the neural tube
closes. The comment proposed that a statement that women who consume
adequate amounts of folate during the month before and after becoming
pregnant may reduce their risk of a neural tube defect would convey
this information. Another comment criticized the model health claims
provided by the agency because they failed to alert women to the
critical periconceptional period.
The agency recognizes that the scientific data support the need for
specific attention to folate intake in the periconceptional interval
and has modified Sec. 101.79(a)(2) to reflect this fact by specifically
mentioning periconceptional use.
The agency notes that one of the purposes of health claims is to
assist women in recognizing the importance of healthful diets,
including adequate folate nutriture throughout their childbearing years
(see H. Rept. 101-538, 101st Cong., 2d Sess. 9-10 (1990)). Given that
about 50 percent of pregnancies are unplanned, and that many women may
not recognize that they are pregnant until after the critical period of
neural tube closure, it is important for women to maintain healthful
diets throughout their childbearing years. While some women who plan
their pregnancies might benefit from the more specific information
suggested in the comment, the agency concludes that the more general
wording in the model claims will reach a wider group of women and
provide them with useful and important information.
FDA is adopting Sec. 101.79(c)(3)(ii), which states that health
claims may include statements from paragraphs Sec. 101.79 (a) and (b).
Through the use of statements derived from Sec. 101.79(a)(2),
manufacturers will be able to provide information that alerts women to
the importance of the periconceptional period.
4. ``Will Reduce'' Versus ``May Reduce''
13. One comment stated that proposed Sec. 101.79(a)(2), which
stated that available data show that diets adequate in folate may
reduce the risk of neural tube defects, was misleading and recommended
that this section be reworded to state that ``studies have shown that
folic acid added to the diet before a pregnancy occurs will reduce the
risk of neural tube defects.''
The agency disagrees with the assertion that adequate folate intake
will reduce the risk of neural tube defects. The available data show
that in an area of low prevalence of neural tube defects, folate intake
from dietary supplements or from fortified cereals was not associated
with reduced risk of neural tube defects (Ref. 12). The agency did not
receive any data or information challenging this data.
The agency notes that use of the term ``will reduce'' is overly
promissory to the individual and is misleading because it is not
consistent with the available data. Prevalence rates for neural tube
defects vary with a wide range of factors including genetics,
socioeconomic status, maternal health, and race. The agency has
discussed the multifactorial nature of neural tube defects (and will do
so again below (see comment 36 of this document)). It has concluded
that claims need to reflect this aspect of the nature of these defects
because folate intake is not the only risk factor for them. Use of the
term ``will reduce'' in the claim is not consistent with the
multifactorial nature of neural tube defects. Thus, FDA finds no basis
to change the wording of Sec. 101.79(a)(2), and it is including the
sentence ``The available data show that diets adequate in folate may
reduce the risk of neural tube defects'' in the final regulation
without change.
5. Need for Healthful Diets
14. Some members of the Folic Acid Subcommittee expressed concern
about a single nutrient approach to the problem of neural tube defects
because nutrients function together in the body. Another comment felt
that a health claim for folic acid could be misinterpreted to mean that
folic acid could prevent all birth defects. One comment noted that,
because nutrients function synergistically in the body, increasing a
single nutrient is unwise. Another comment stated that by focusing on
the relationship between a single nutrient and a single outcome,
opportunities to improve overall health are missed. Another comment
expressed concern about singling out one vitamin for a health claim
when the major sources of the vitamin (e.g., fruits and vegetables) are
being promoted for good health. Other comments noted that in pregnancy
it is the total diet, not a single nutrient, that is related to health
outcome.
The agency agrees with the comments that expressed concern about
the problems in focusing on a single-nutrient, particularly in women
FR Doc. 96-5013 Food Labeling: Health Claims and Label Statements; Folate and Neural Tube Defects
of
childbearing age. Many nutrients affect healthy pregnancy, and the
claim should not lead women to focus undue attention on one nutrient,
or on a single dietary factor, instead of on overall healthful diets
and health conscious behaviors.
In addition, because healthy pregnancies and good pregnancy
outcomes are dependent upon an overall good diet, adequate in protein,
vitamins and minerals, and many other nutrients, women should not be
misled into believing that folate is the only nutrient about which they
need to be concerned in preparing for a pregnancy. With respect to
neural tube defects, FDA in its proposed rule (58 FR 53254) reviewed
evidence that nutrients other than folate (e.g., methionine, vitamin
B12, pantothenic acid) have roles in reducing the risk of neural
tube defects, and additional evidence is summarized in section II.E.6.
of this document. Thus, normal fetal development requires many
nutrients in addition to the nutrient that is the subject of the health
claim.
Based on these considerations, the agency has concluded that
information regarding overall improvement in a woman's diet and
nutrition in the
[[Page 8762]]
periconceptional interval, as well as throughout her childbearing
years, is of considerable importance because pregnancy outcome depends
upon adequate intakes of a wide range of nutrients. This concern needs
to be balanced against the fact that the available evidence provides
the basis for significant scientific agreement that dietary intakes of
folate may reduce the risk of neural tube defect-affected pregnancies.
Therefore, in response to these comments, FDA is including in
Sec. 101.79(c)(2)(i)(H) in the final regulation a requirement that the
claim state that folate needs to be consumed as part of a healthy diet.
This requirement will ensure that, while highlighting the role of
adequate folate intake, the health claim will not cause women to place
undue emphasis on consumption of this nutrient. Thus, this information
is necessary to ensure that the claim is properly balanced.
D. Requirements for Foods Bearing the Claim
1. Qualifying Amounts
In Sec. 101.79(c)(2)(ii)(A), FDA proposed that the food or dietary
supplement meet or exceed the requirements for a ``good source'' of
folate as defined in Sec. 101.54 (i.e., containing 10
percent of the RDI). In proposing this eligibility requirement, FDA
considered that folate is ubiquitously distributed in the U.S. food
supply. While a number of foods (e.g., some legumes, okra, broccoli,
spinach, turnip greens, asparagus, Brussels sprouts, endive, lentils)
contain more than 80 mcg of folate/serving (the amount that is greater
than or equal to 20 percent of the RDI (i.e., that amount that would be
required for a claim of a ``rich'' source)), the great majority of
foods contain folate at lower levels. For example, oranges, grapefruit,
many berries, peas, many vegetable juices, beets, and parsnips contain
folate at levels of 40 to 80 mcg/serving (i.e., at or above 10 percent
of the RDI or at levels that meet the requirement of a claim of a
``good'' source) (Ref. 22).
a. General comments.
15. Many comments and the Folic Acid Subcommittee and Food Advisory
Committee were generally satisfied with the eligibility requirements
and supported FDA's proposal to allow claims on foods that were at
least a good source of folate. These comments supported the criterion
because it would accommodate a wide variety of fruits and vegetables
that would be excluded if the eligibility requirement was set at a
higher level. One comment, however, suggested that the proposed amount
was too high and might exclude some commonly consumed foods such as
peas.
A third group of comments thought that the proposed amount was too
low. Some of the comments said that claims should not be permitted
unless the food provides at least 20 percent of the RDI (i.e., 80 mcg
folate/serving), arguing that it was poor policy to make exception to
the general health claims requirements regulations, and that if the
goal is to maximize intake of folate, then 20 percent of the RDI should
be the minimum amount allowed for the claim. Others felt strongly that
the claim should be limited to those foods or supplements that provide
100 percent of the RDI per serving or per dose.
The agency is concerned that if it required (in accord with
Sec. 101.14(d)(2)(vii)) that the food contain 20 percent or more of the
RDI for folate (i.e., 80 mcg or more folate per reference amount
customarily consumed; an amount sufficient to qualify for a ``high'' or
``excellent source of'' nutrient content claim) to bear a health claim,
many good food sources of folate would not qualify without
fortification.
One of Congress' purposes in providing for health claims was to
enable Americans to maintain a balanced and healthful diet (H. Rept.
101-538, supra, pp. 9-10). Given this fact, and given that the evidence
demonstrates that the risk of neural tube defects can be affected by
consuming foods that, while good sources of this nutrient, do not
provide the high level that is provided by supplements and highly
fortified foods (see Refs. 11, 13, 16, and 17), FDA concludes that it
would not be consistent with the intent of the 1990 amendments to set
requirements that would limit eligibility to bear a health claim to the
foods that are high in folate.
Use of a qualifying criterion for the health claim that is
consistent with the ``good source'' definition (i.e., 10 to 19 percent
of the DV; 40 to 76 mcg folate/serving) provides for an amount of the
nutrient that allows a wide variety of fruits, vegetables, and whole
grain products to qualify to bear the health claim, is consistent with
current Federal guidelines for general dietary patterns, and yet is
still likely to result in a daily dietary intake of folate that the
data show may reduce the risk of neural tube defects. For example,
current Federal dietary guidelines recommend five or more servings of
fruits and vegetables and six or more servings of grain products per
day. Consumption of fruits, vegetables, and grain products in the
recommended amounts would likely result in daily intakes of folate of
0.4 mg (400 mcg) or more, even though individually many of the foods
consumed contain less than 20 percent of the RDI for folate per
reference serving (Ref. 22).
Accordingly, FDA is adopting Sec. 101.79(c)(2)(ii)(A), which
provides that conventional foods and dietary supplements can bear a
folate/neural tube defect health claim if they contain 10 percent or
more of the RDI for folate per reference amount customarily consumed
(i.e., meet the definition for a ``good source'' claim in Sec. 101.54
(21 CFR 101.54)). The availability of the claim for a wide variety of
products will provide flexibility to women in deciding how to
individually achieve the target intake by selecting from among foods
that naturally contain folate, dietary supplements, and highly
fortified foods.
b. Higher qualifying amounts for dietary supplements than for
foods.
16. Several comments stated that to qualify to bear the claim, each
food should provide at least 25 percent of the RDI, and each supplement
should provide 100 percent of the RDI. However, these comments did not
provide any support for the levels that they suggested or for why
supplements should have to have a higher level of the nutrient than a
conventional food.
Having dealt with the level necessary to qualify to bear the claim
in response to the previous comment, the agency will deal here with the
question of whether, to qualify for a claim, dietary supplements should
be required to provide more folate than foods. The agency concludes
that there is no reason why they should. In response to comment 7 of
this document, the agency concluded that the available scientific
evidence establishes that sources of folate are equivalent in their
ability to provide folate. Thus, there is no basis for requiring that
either dietary supplements or conventional foods provide more than 10
percent of the RDI for folate per reference amount customarily consumed
to qualify for the claim.
2. Disintegration and Dissolution of Dietary Supplements
FDA proposed in Sec. 101.79(c)(2)(ii)(C) to disqualify dietary
supplements from bearing a health claim if they fail to meet the United
States Pharmacopeia (USP) standards for disintegration and dissolution.
The agency tentatively concluded that the benefits of folate intake
from food and dietary supplements can only be obtained if the folate is
available for absorption and metabolism by the body. The agency noted
that a dietary supplement that does not disintegrate and dissolve
[[Page 8763]]
clearly does not provide the nutrient in an assimilable form, and that
a claim for such a supplement would be misleading because the
supplement would not provide the nutrient that is the subject of the
health claim (58 FR 58283).
17. Several comments agreed with the agency's proposed requirement
and urged the agency to require all dietary supplements to meet such
quality standards. Another comment proposed that the agency use the USP
standards that are currently under development, and that the
dissolution requirement become effective when the USP proposal becomes
effective. The USP commented and proposed wording for use in
Sec. 101.79(c)(2)(ii)(C): ``Folic acid present in dietary supplement
dosage forms (e.g., tablets, capsules) shall meet the requirements of
the United States Pharmacopeia as defined in Section 201(j) of the
act.''
Another comment stated that in making this proposed requirement
effective for dietary supplements, the agency would accord the same
claim to foods (i.e., conventional foods) without similar requirements
for bioavailability, and that excluding foods from this requirement was
scientifically unjustified. The comment did not identify conventional
foods from which folate had been demonstrated to be unavailable or
elaborate on the concern.
The agency proposed that dietary supplements meet USP standards for
dissolution and disintegration, and that bioavailability under
conditions of use stated on the label be shown only if there are no
applicable USP standards for disintegration and dissolution. Thus, the
agency proposed that a demonstration of bioavailability would be
required only if there were no USP method available to check for
dissolution and disintegration.
The comment that stated that in making the requirement proposed in
Sec. 101.79(c)(2)(ii)(C) effective for dietary supplements, the agency
would accord the same claim to conventional foods without similar
requirements, may have misread the agency's proposed requirement.
``Bioavailability'' includes, but is not limited to, dissolution and
disintegration. Dissolution and disintegration are necessary
preconditions for absorption and subsequent metabolism. Digestive
processes ensure that conventional foods are digested, and that
components are liberated for absorption. With respect to the
bioavailability of folate from conventional foods, the agency is aware
that the bioavailability of folate varies widely but is not aware of
any foods from which folate has been shown to be unavailable.
However, dietary supplements, including folate-containing
supplements, can be manufactured in a manner that prevents dissolution
and disintegration (e.g., extremely compressed preparations), and the
digestive processes may be insufficient to ensure the liberation of the
components for absorption. The components of such a supplement would
not be available for absorption and utilization by the body. A claim on
a dietary supplement that does not disintegrate or dissolve would be
misleading because the supplement would not meet the preconditions
necessary to ensure that the nutrient that is the subject of the claim
is available for absorption.
The agency did not receive other comments contending that dietary
supplements should not meet USP standards for disintegration and
dissolution, or that bioavailability should not be demonstrated when
applicable USP disintegration and dissolution standards are not
available. The agency is adopting Sec. 101.79(c)(2)(ii)(C) as proposed
and is redesignating it as Sec. 101.79(c)(2)(ii)(B).
3. No Health Claim on Foods or Supplements Containing More Than 100
Percent of the RDI for Preformed Vitamin A or Vitamin D
In Sec. 101.79(c)(2)(iii), FDA proposed that a health claim for
folate and neural tube defects be prohibited on conventional foods and
on dietary supplements that contain more than 100 percent of the RDI
for vitamin A as retinol or preformed vitamin A or vitamin D per
serving or per unit. The agency proposed this limitation because of the
recognized toxicity of high intakes of these vitamins for the fetus and
the teratogenic effects of these nutrients at levels not greatly in
excess of the RDI.
18. Several comments agreed with FDA's proposal, noting that many
dietary supplements currently contain more than 100 percent of the RDI
for vitamin A, and that such levels are unnecessary and potentially
harmful. Another comment misread the proposed requirement regarding
vitamin A and noted that since manufacturers were now increasing the
-carotene content of supplements because of health benefits,
these supplements should not be excluded from carrying a folate/neural
tube defect claim because of their high -carotene content.
The agency is aware that folate is often combined with other
nutrients, particularly vitamins and minerals, in dietary supplement
formulations or in highly fortified foods. In light of the expectation
that the presence of a health claim on the label of such products is
likely to result in increased intake of these products, FDA is
concerned that some consumers may try to increase their folate intake
by consuming multiple doses of dietary supplements or multiple servings
of highly fortified foods. The agency was concerned that, for some
fortified foods and dietary supplements that contain both folate and
preformed vitamin A or vitamin D, consumers could be exposed to
excessive vitamin A or vitamin D intakes in their attempts to obtain
increased amounts of folate. The agency, however, did not propose
similar requirements for -carotene because the agency is not
aware of data on potential teratogenic or other adverse effects of
-carotene on the fetus.
This limitation is consistent with other recent recommendations. In
1991, the CDC recommendation for increased intake of folate by women
with a history of a neural tube defect- affected pregnancy (Ref. 23)
warned against overconsumption of multivitamins because of the
potential for excessive intakes of vitamins A and D from such
preparations and the known adverse effects of these vitamins on the
health of the fetus. In addition, recent recommendations in Canada for
women of childbearing age regarding folic acid and neural tube defects
recognized the teratogenicity of high levels of vitamin A and cautioned
against excessive intakes of this nutrient (Ref. 24).
With the exception of the comment regarding -carotene
discussed above, the agency received no comments objecting to this
requirement. Thus, the agency is adopting Sec. 101.79(c)(2)(iii) as
proposed. The agency advises that the limitation contained in this
provision pertains only to conventional foods or to dietary supplements
that contain more than 100 percent of the RDI for vitamin A as retinol
or preformed vitamin A or vitamin D.
E. Label Information
1. Mandatory Nutrition Labeling
In Sec. 101.79(c)(2)(iv), FDA proposed to require that the
nutrition label of conventional foods or dietary supplements bearing
the folate/neural tube defect health claim provide information about
the amount of folate in the food or dietary supplement. This proposed
requirement is consistent with Sec. 101.9(c)(8)(ii) (21 CFR
101.9(c)(8)(i)), which states that the declaration of vitamins and
minerals on the nutrition label shall include any of the vitamins
[[Page 8764]]
and minerals listed in Sec. 101.9(c)(8)(iv) when a claim is made about
them.
19. One comment agreed with the proposed requirement for mandatory
nutrition labeling on products bearing the folate/neural tube defects
health claim. Another comment noted that use of multiple terms such as
``micrograms,'' milligrams,'' etc., would probably confuse lay persons.
The agency agrees with the comments and is adopting, with the
modifications noted below, the requirement in Sec. 101.79(c)(2)(iv)
that products bearing the health claim include in the nutrition
labeling information about the amount of folate in the food.
FDA adopted the 1980 Recommended Dietary Allowance (RDA) values as
RDI values, with folate values expressed on the label in milligrams
(mg) and percent of the DV (58 FR 2206, January 6, 1993). In the
Federal Register of January 4, 1994 (59 FR 427 at 431), FDA proposed to
amend Sec. 101.9 by revising paragraph (c)(8)(iv) to state, among other
things, the RDI for folate in micrograms (i.e., 400 micrograms; 400
mcg). The agency stated that changing the current unit of measure for
folate will facilitate consumer comprehension of quantitative nutrient
information because consumers are more familiar with this nutrient
being expressed in microgram units.
In Sec. 101.79(c)(2)(i)(F) and (c)(3)(iv), FDA has modified the
codified language so that all references to folate intake in the health
claim will be required to be expressed as percent DV with the option of
adding the microgram equivalent in parentheses. That is, values for
folate will be expressed as percent of the DV (i.e., the percent of the
RDI as established in Sec. 101.9(c)(8)(iv)). FDA has modified the
codified language in Sec. 101.79(c)(2)(i)(F) so that reference to the
safe upper limit of daily folate intake in the health claim will also
be required to be expressed as percent DV with the option of adding the
microgram equivalent in parentheses (see comment 32 of this document).
Thus, in response to the comment's concern about the confusion that
would result if multiple terms are used to describe the level of
folate, FDA has modified the regulations to provide for consistent
terminology.
2. Identifying the Nutrient
In proposed Sec. 101.79(c)(2)(i)(B), FDA considered the use of
synonyms for ``folate'' and the need to aid consumers in understanding
this nutrient. The agency provided for the use of synonyms and for
additional description of this term through phrases such as ``folate,''
``folic acid,'' ``folacin,'' ``folate, a B vitamin,'' ``folic acid, a B
vitamin,'' and ``folacin, a B vitamin.''
20. Several comments agreed that the agency's proposed synonyms are
appropriate. Other comments urged that a single term, for example,
``folic acid,'' ``folic acid, a B vitamin,'' ``folate,'' or ``folate, a
B vitamin,'' be used throughout all claims. Other comments agreed with
the use of the agency's proposed synonyms to encourage the consumption
of healthy diets but recommended that claims be worded in such a way as
to demonstrate that ``folic acid'' is the effective form. Several
comments disagreed with use of the term ``folacin,'' noting that it was
rarely used.
The agency notes that the descriptive term ``a B vitamin'' in
conjunction with ``folate,'' ``folacin,'' or ``folic acid'' is commonly
used in lay information for consumers and may be useful for consumers
in indicating the nutritive function of folate as a vitamin. FDA is
thus retaining the provision for its optional use in
Sec. 101.79(c)(2)(i)(B).
FDA recognizes that current regulations for nutrition labeling in
Secs. 101.9 and 101.36 do not include the term ``folic acid'' as an
allowable synonym for folate. This omission was an oversight when the
agency amended Sec. 101.9 (58 FR 2079 at 2178, January 6, 1993), and
when it promulgated Sec. 101.36 (59 FR 373, January 4, 1994). Before it
was amended, Sec. 101.9 had listed folic acid as the preferred term,
with folacin as an allowable parenthetical synonym. When it proposed
amendments to Sec. 101.9 in 1990 (55 FR 29847, July 19, 1990), the
agency explained why the term ``folate'' was preferable to ``folacin''.
However, an explanation for use of ``folic acid'' was inadvertently
omitted in that document, as was inclusion of the term ``folic acid''
as an allowable synonym.
The agency has advised firms that it would have no objection to the
use of the term ``folic acid'' in nutrition labeling. In light of
common usage and FDA policy, and for consistency among nutrition
labeling and health claim regulations, the agency is making a technical
amendment to Secs. 101.9 and 101.36 in this final rule to include
``folic acid'' as an allowable synonym for folate.
The agency notes that, as discussed in comment 6, above, the terms
``folic acid'' and ``folate'' are both used in the PHS recommendation
(Ref. 5). By allowing the use of these terms, the PHS recommendation
can be quoted directly on the label if all other requirements for the
health claim are met. The inappropriateness of limiting the term to
``folic acid'' to describe the relationship has been discussed in
response to comment 6 of this document. Therefore, FDA is adopting
Sec. 101.79(c)(2)(i)(B) as proposed.
3. Identifying Diets Adequate in Folate
In Sec. 101.79(c)(2)(ii)(B), the agency proposed to require that
health claims relating folate to neural tube defects identify sources
of folate by stating that adequate amounts of folate may be obtained by
making specific dietary choices of folate-rich foods, as well as
through use of dietary supplements or fortified breakfast cereals. The
purpose of this proposed requirement was to assist women in obtaining
adequate amounts of folate in their diets by providing information on
sources of folate. In proposed Sec. 101.79(c)(2)(ii)(B), the agency
provided examples of the types of phrases that could be used to meet
this requirement (e.g., ``Adequate amounts of folate, a B vitamin, can
be obtained from diets rich in fruits, dark green leafy vegetables and
legumes, enriched grain products, fortified cereals, or from dietary
supplements'').
21. Many comments agreed with the proposal to require statements
that dietary sources such as fruits, vegetables, and grains may
contribute folate to the diet, although some comments disagreed with
providing specific details, such as recommended numbers of servings.
Other comments supported the agency's proposed approach, emphasizing
that the health claim must help consumers understand that, in
pregnancy, it is the total diet, not a single food, that is related to
health outcome, and that there is good evidence for dietary claims
regarding increased folate intake and reduced risk of neural tube
defects. Another comment stated that health claims should not reveal a
bias against food forms, fortificants, or dietary supplements.
Other comments disagreed with the proposal to identify healthful
dietary patterns on the basis that many women will not change their
eating habits, and that it is therefore important to point out the
importance of use of dietary supplements. Other comments noted that the
statements regarding beneficial diets were overly focused on food and
should be made optional, that adding dietary information to the health
claim reduces its educational effectiveness, and that inclusion of such
information was neither required by law nor consistent with other
authorized health claims such as that for calcium and osteoporosis.
Several comments recommended that statements regarding diets adequate
in folate be made optional because such information is
[[Page 8765]]
better presented in educational materials.
The agency disagrees with the comments that stated that the
proposed statements regarding sources of folate were overly focused on
food. Such comments imply that FDA was biasing the statements against
dietary supplements. In fact, each example included dietary supplements
in the list of sources of folate (e.g., fruits, vegetables, enriched
grain products, fortified cereals, and dietary supplements). The agency
also disagrees that the educational effectiveness of the claim is
reduced by inclusion of the proposed statement because statements of
this type provide, in an abbreviated form, information on sources of
folate about which a consumer may be unaware.
In the context of a total diet, the consumer needs flexibility in
deciding how to increase folate intake. Provision of this information
is consistent with section 403(r)(3)(B)(iii) of the act, which states
that the claim shall be stated in a way that enables the public to
understand the relative significance of the claim in the context of the
total daily diet. Awareness of the food sources of folate, including
dietary supplements, will assist women in recognizing the significance
of the claim in the context of the total diet. Provision of information
on sources of folate in the health claim will assist consumers by
making them aware that specific foods and dietary supplements contain
folate.
However, FDA recognizes that while there has been a noticeable
increase in the use of health claims over the last 2 years, the number
of products that bear health claims is not as great as the agency had
anticipated. The agency is therefore interested in simplifying claims
to facilitate their increased use. The agency is particularly
interested in removing so-called ``required'' elements that are not
necessary to ensure that the claims are truthful, not misleading, and
scientifically valid. While the agency agrees with the comments that
supported inclusion of information on the dietary sources of folate,
and while it supports health claim statements that include examples of
dietary sources of this nutrient, the agency is concerned that
requiring such specific information will increase the length of the
claim and may dissuade manufacturers from including it in their
labeling.
In comment 14 of this document, the agency concluded that
information regarding overall improvement in a woman's diet and
nutrition throughout her childbearing years is of considerable
importance because pregnancy outcome depends upon adequate intake of a
wide range of nutrients. The agency is adopting
Sec. 101.79(c)(2)(i)(H), which requires that the health claim state
that there is a need for a healthful diet as well as adequate folate
intake. FDA has concluded that this information is necessary to ensure
that the claims have proper balance.
The agency is persuaded that shorter claims that state the need for
a healthful diet, without reference to specific foods, will meet the
objective of encouraging broader use of the claim while alerting women
to the importance of overall diet during the childbearing years.
Therefore, FDA is requiring that claims state that adequate folate
needs to be consumed as part of a healthful diet (see section II.C.5.
of this document, and new Sec. 101.79(c)(2)(i)(H)) without identifying
specific sources. The appearance of the claim on a wide range of
qualifying foods will itself convey information about the variety of
sources of folate available to women as part of a healthful total diet.
Therefore, the agency is removing proposed Sec. 101.79(c)(2)(ii)(B)
in its entirety and is adding in the codified language a provision
(Sec. 101.79(c)(3)(vii)) for optionally including in the claim
information that identifies sources of folate. Because of these
changes, FDA has adopted proposed Sec. 101.79(c)(2)(ii)(C) as
Sec. 101.79(c)(2)(ii)(B).
4. Identifying the Health-Related Condition
In developing proposed Sec. 101.79(c)(2)(i)(C), FDA considered
whether women might be confused or not understand the term ``neural
tube defect'' and provided for some qualification of this term through
use of alternate phrases such as ``the birth defect spina bifida,''
``the birth defects spina bifida and anencephaly,'' ``spina bifida and
anencephaly, birth defects of the brain or spinal cord,'' and ``birth
defects of the brain or spinal cord, spina bifida and anencephaly.''
22. The agency received several comments regarding these proposed
synonyms. A comment agreed with the agency that the health-related
condition must be specified and stated that the agency's proposed
synonyms were appropriate. Another comment noted that ``anencephaly''
is not a familiar term, and that a phrase such as ``certain serious
birth defects, neural tube defects'' is preferable. Another comment
recommended that only the statement ``neural tube defect'' be allowed
because it is the more appropriate and accurate term, and because
consumers will benefit from seeing the same identifying statements in
health claims on many products. Several comments, however, asserted
that consumers will not understand ``neural tube defects'' and stated
that a more understandable term might be ``birth defects of the brain
and/or spinal cord.''
The agency has considered these comments and concludes that the
term and qualifiers provided in its proposed rule, i.e., ``neural tube
defects,'' ``the birth defect spina bifida,'' ``birth defects spina
bifida and anencephaly,'' ``spina bifida and anencephaly, birth defects
of the brain or spinal cord,'' and ``birth defects of the brain or
spinal cord anencephaly or spina bifida,'' will allow manufacturers
considerable flexibility in crafting claims and in educating consumers.
The agency is also persuaded to include the option of using the simpler
terms ``birth defects of the brain or spinal cord'' or ``brain or
spinal cord birth defects'' and has modified Sec. 101.79(c)(2)(i)(C)
accordingly. The agency accepts the suggestion that use of the latter
terms will make the claims simpler and more useful to consumers because
the phrase may be more understandable than phrases that include medical
terms such as ``neural tube defects'' or ``anencephaly''.
The agency also considered whether use of the very general terms
``some birth defects'' or ``some serious birth defects'' would be
appropriate. As discussed in its January 1993 final rule on folate and
neural tube defects (58 FR 2606 at 2610), the act requires that claims
on foods be truthful and not misleading. The agency recognizes that,
based on the results of the Medical Research Council trial, the
association between folate intake and birth defects is limited to
neural tube defects. The Medical Research Council trial found that
folic acid, while significantly reducing the risk of neural tube
defects in women at high risk of recurrence of this complication, did
not significantly alter the incidences of a wide variety of other birth
defects in the population studied (Ref. 14). Similarly, Czeizel et al.
(Ref. 15) reported that the results of the Hungarian trial that studied
use of a multivitamin/multimineral supplement containing 0.8 mg of
folic acid showed no reduction in incidences of birth defects other
than neural tube defects.
FDA also points out that the prevalence of neural tube defects in
the United States has been steadily declining in recent decades, and
that the estimated incidence is presently about 1 in 1,600 births (Ref.
25). Currently, estimated incidences of other serious birth defects are
considerably higher than that for neural tube defects. For
[[Page 8766]]
instance, estimated incidences are 1 in 115 for birth defects involving
the heart and circulation, 1 in 130 for those involving the muscles and
skeleton, 1 in 135 for those involving the genital and urinary tract, 1
in 235 for those involving the nervous system and eye, 1 in 735 for
club foot, and 1 in 635 for chromosomal syndromes (Ref. 25).
Because neural tube defects constitute a relatively small fraction
of all birth defects, women should not be misled into a false sense of
security that they can affect their risk of all birth defects through
diets adequate in folate. The agency has therefore decided not to
include use of the more general terms ``some birth defects'' or ``some
serious birth defects'' because use of such terms would fail to
disclose the material fact that the food substance/disease relationship
is specifically between folate and neural tube defects. Use of such
general terms can create the impression that adequate folate intake
will reduce a woman's risk of other serious birth defects, and women
might, as a result, discount risk factors for other birth defects
(e.g., alcohol use, drug abuse).
5. Safe Upper Limit of Daily Intake
Sections 403(r)(3)(A)(ii), 402(a), and 409 of the act establish
that the use of a substance in a food must be safe. Based on concerns
discussed in the Federal Register of January 6, 1993 (58 FR 2606), the
agency concluded that it could not authorize a health claim on folate
and neural tube defects at that time. The agency was concerned that the
possibility exists that folic acid itself could be a substance that
increases the risk of a disease or a health-related condition in
persons in the general population (see section 403(r)(3)(A)(ii) of the
act).
Recognizing the potential for adverse effects from high intakes of
folate, PHS included a caution statement in its recommendation that
``because the effects of higher intakes are not well known but include
complicating the diagnosis of vitamin B12 deficiency, care should
be taken to keep total folate consumption at <1 mg per day, except
under the supervision of a physician'' (Ref. 5).
In Sec. 101.79(c)(2)(i)(G), FDA proposed to require a statement as
part of the health claim on fortified foods in conventional food form
and on dietary supplements containing more than 25 percent of the RDI
for folate per unit or per serving that 1 mg of folate per day is the
safe upper limit of intake. The agency noted that the availability of
the health claim would likely encourage increased intakes of health-
claim labeled foods, and that, if intakes of highly fortified foods and
dietary supplements were increased, it could result in folate intakes
above the level known to be safe.
The agency received comments addressing two issues related to safe
use of foods bearing health claims: (1) Is there a need for concern
about a safe upper limit of daily intake? (2) If so, should a statement
identifying a safe upper limit of intake be included in a health claim,
and how should such a statement be worded?
a. Need for concern about a safe upper limit of daily intake. FDA
tentatively concluded that, under certain circumstances, there was a
need to disclose the safe upper limit of intake in the health claim and
tentatively decided to use 1 mg per day (1,000 mcg; 250 percent of the
DV) of total folate as the upper limit for such intake (58 FR 53254 at
53273).
The agency noted in the final rule of January 6, 1993 (58 FR 2606
at 2612), and the proposed rule of October 14, 1993 (58 FR 53254 at
53266), that there is a general paucity of evidence on the safety of
daily folate intakes above 1,000 mcg (1 mg). The agency noted that
there may be risks attendant upon increased consumption of folate for
some groups in the population. The agency stated that, at the present
time, the potential adverse effect that has been most extensively
documented is a masking of anemia in persons with vitamin B12
deficiency, while irreversible neurologic damage progresses. Other
groups at risk from excessive intakes of folate include pregnant women,
persons on antiseizure (i.e., antiepileptic) medications, and those on
antifolate medications. There were no data to identify the magnitude of
other possible risks of increased folate intake or to establish safe
use at daily intakes above 1,000 mcg.
In its proposal of October 14, 1993 (58 FR 53254 at 53266), the
agency described how it had reached its tentative decision that 1 mg of
total folate per day was the safe upper limit of intake. Based on its
review of the scientific literature and its discussions with the Folic
Acid Subcommittee, the agency tentatively concluded that: (1) For those
with vitamin B12 deficiency, there was little likelihood of
problems at daily intakes lower than 1 mg (58 FR 53254 at 53268 to
53270); (2) an upper limit of intake of 1 mg of folate per day was safe
for pregnant women and for persons with epilepsy; (3) doses of folic
acid of up to 1 mg per day have not been reported to reduce the
effectiveness of medications that interfere with folate metabolism; (4)
effects of long-term continuous exposures of body tissues to elevated
blood levels of folic acid, which occur when the body's capacity to
metabolize folic acid is exceeded, have not been evaluated; and (5)
there have been no long-term studies to quantitate the effects, if any,
of increased folate intake on the metabolism of other nutrients.
The agency stated (58 FR 53254 at 53268) that it knew of no data
that would support the long-term safety of continuous daily folate
intakes of more than 1 mg. The agency, noting that the value of 1 mg
for a safe upper limit of daily folate intake could be modified if data
were available to support such a decision, solicited comments and data
on this point.
In addition, the agency described how it had reached its tentative
decision that a statement that 1 mg of total folate per day was the
safe upper limit of daily intake should be required on products bearing
the health claim and fortified above 25 percent of the RDI for folate.
The agency's tentative conclusion was based on, among other
considerations: (1) The scientific evidence, and the view expressed by
experts, that there are no data to ensure that adverse effects are not
likely to occur at daily intakes above 1 mg (Refs. 6, 7, 8, and 26);
(2) the PHS recommendation that folate intake of women of childbearing
age should not exceed 1 mg per day (Ref. 5); and (3) the support by the
Folic Acid Subcommittee of FDA's use of 1 mg of total folate per day as
a safe upper limit guide when considering fortification strategies. The
upper safe limit of intake that FDA proposed was based on its best
scientific judgment at the time. The agency solicited comments and data
on its tentative judgment.
Some comments expressed uncertainty regarding an amount that would
represent a safe upper limit of daily intake of folate, while other
comments strongly agreed or strongly disagreed with FDA's proposal that
1,000 mcg of total folate per day is the safe upper limit of intake.
The agency did not receive any data relating to safety of long-term
intakes of folate at levels above 1 mg per day for any of the groups
considered at potential risk from increased intakes.
23. Several comments noted that the agency should not misconstrue
the absence of safety data on folate intakes of 1 to 4 mg (1,000 to
4,000 mcg) per day as evidence of the absence of harm; that because
daily intakes for the general population are well below 1 mg, it has
never been established that 1 mg per day of folate from all sources is
a safe daily upper limit; and that the upper safe limit of intake for
African-Americans, and perhaps Hispanic
[[Page 8767]]
Americans, is not known. Several comments noted that pernicious anemia
has an earlier age-at-onset among African-Americans than among
Caucasians, and that vitamin B12 deficiency is not rare in persons
with sickle cell anemia. Another comment noted that the level of folate
that will accelerate the neurologic disorders of vitamin B12
deficiency is unknown, and that physicians see patients who have been
taking folic acid supplements who present with neuropsychiatric
disturbances. Another comment noted that there were uncertainties
regarding effects of chronic exposures of children, whose requirements
for folate are lower than those of adults, to increased intakes of
folic acid. Uncertainties regarding safety of increased intakes of this
nutrient were the major factor in the opposition in the Folic Acid
Subcommittee/Food Advisory Committee to FDA's proposed rules (Ref. 8).
Many comments agreed with FDA's estimate of 1 mg of folate as an
upper safe limit of intake given the paucity of information concerning
the possible risks of excess folate intakes. Other comments noted that
the masking of pernicious anemia is real, but that there is no evidence
for folate toxicity at daily intakes of 1 mg/day or less. The comments
said that the value of 1 mg/day has, therefore, emerged as being safe.
Other comments recognized that overconsumption of folate may complicate
the diagnosis of vitamin B12 deficiency, but that there is limited
evidence regarding effects of intakes of folic acid between 400 mcg and
5,000 mcg per day.
FDA notes that a major factor in both the Folic Acid Subcommittee's
and the Food Advisory Committee's concern about FDA's proposals was the
fundamental issue of lack of documentation of safety of long-term daily
intakes at levels above 1,000 mcg (Ref. 8). The agency is also aware
that the Committee members expressed considerable concern about the
lack of information on the size of the population potentially at risk
from increased intakes of folate. Specifically, the agency did not
receive data regarding potential adverse effects of increased folate
intakes in African-American women or in children. The agency notes that
the absence of data on long-term effects of increased folate intakes
does not allow the agency to adequately identify those potentially at
risk.
As stated above, the agency is not aware of any data that establish
the safety of long-term intakes of folate above 1,000 mcg per day. The
absence of any data that allow systematic evaluation of intakes above
this level means that potential risks and at-risk groups cannot be
adequately defined or described. FDA notes that some members of the
Folic Acid Subcommittee and most folate and vitamin B12 experts
submitting comments (Ref. 8) were concerned about the lack of
documentation of safety of daily long-term intakes of folate above the
level of 1 mg/day. In addition to concerns regarding those with low
vitamin B12 status, other safety concerns included uncertainties
of effects of increased folate intakes by young children and the
unknown physiological significance of circulating free folic acid in
the blood, particularly in pregnant women. In its proposed rule (58 FR
53254 at 53269), the agency summarized evidence from the scientific
literature that high levels of free folic acid are not normally found
in the circulation, and that folic acid is concentrated in crossing the
placenta and accumulates in fetal tissues. The agency also noted that
no information is available to ascertain whether developing neural
tissue is protected from the neurotoxic effects of very high
circulating levels of free folic acid. None of these issues were
addressed in comments that the agency received.
Comments that disagreed with FDA's proposal to consider 1,000 mcg
folate/day as the safe upper limit of intake raised several issues
which are considered below:
i. Basis for a safe upper limit: Synthetic folic acid versus total
folate.
24. A comment stated that the limit should be based on supplemental
synthetic folic acid only because only this form has been associated
with masking of the anemia of pernicious anemia. This issue of whether
the upper limit should be based on total folate or on synthetic
crystalline folic acid was raised in several comments, with some
comments of the opinion that it was appropriate to use estimated
consumption of folate from all sources in defining the safe upper limit
of intake and others recommending use of ``crystalline folic acid''
only.
The agency disagrees that the safe upper limit of daily intake
should be based on ``crystalline folic acid'' rather than total folate
from all sources. FDA notes that the distinction between ``synthetic
folic acid,'' referring only to crystalline folic acid, and ``folate,''
referring only to naturally occurring food folates, with respect to the
1,000 mg/day estimate of safe daily intake, is an artificial one and is
not consistent with what is known about the nutritional
interrelatedness of a variety of folate vitamin forms in providing
coenzyme forms of the vitamin for meeting the body's needs for this
essential nutrient. Issues relating to ``folic acid'' versus ``folate''
are discussed in response to comment 6 of this document.
Metabolic needs for folate are met from body pools of reduced
coenzymes, regardless of whether these coenzymes are derived from
synthetic folic acid or from naturally occurring food folates. While it
is true that evidence relative to the masking of the anemia of vitamin
B12 deficiency has been obtained from persons who consumed or were
treated with synthetic folic acid, such individuals were also consuming
unknown quantities of folate from foods. Thus, total daily folate
exposures associated with the masking have not been quantified, and the
effect of food folates on adverse effects is not known. It is also not
known whether the variable responses, in terms of masking effects, to
low levels of folic acid in supplements are the result of differences
in folate intakes from background diets or of other factors that are
currently not understood. For these reasons, it is not possible to
attribute all adverse effects solely to crystalline folic acid.
In addition, high intakes of food folates can have adverse effects
in persons with poor vitamin B12 status. With respect to
nonpernicious anemia-related vitamin B12 deficiency, Sanders and
Reddy (Ref. 27) noted that megaloblastic anemia is rarely encountered
in Caucasian vegetarians and vegans because of their high intakes of
folate. These authors reported that, for example, the folate content of
diets of vegan children aged 6 to 13 years was twice as high as that of
omnivorous children aged 7 to 12 years (Ref. 27). Because the high
folate intakes would at least temporarily improve the associated
anemia, vitamin B12 deficiency usually presents with neurological
signs and symptoms in infants (Ref. 27). Herbert reported that studies
over several decades have all indicated that major myelin synthesis
damage from vitamin B12 deficiency with only minor hematopoietic
(i.e., hematologic) damage reflects better folate status because folate
improves hematologic, but not neurologic, manifestations of the
deficiency (Ref. 28). He also found generally higher red cell folate in
persons with greater myelin damage (that only vitamin B12
deficiency produces) than in persons with greater hematologic damage
(which deficiency of either folate or vitamin B12 produces) (Ref.
28).
The observations above suggest that a safe upper limit of daily
intake is more
[[Page 8768]]
accurately based on total folate intake than on just intake of
crystalline folic acid because under conditions in which vitamin
B12 utilization or intake is limited (i.e., in pernicious anemia
or in nonpernicious anemia-related vitamin B12 deficiency), either
crystalline folic acid or food folate may cause adverse effects when
consumed in excess.
The agency noted in response to comment 6 of this document, that
use of a distinction between ``folic acid'' and ``folate'' is
inconsistent with the PHS recommendation, which uses these terms
interchangeably (Ref. 5), and with advice provided by FDA's and CDC's
advisory panels. Moreover, use of such a distinction is not supported
by recent statements from experts on folate and vitamin B12 (Refs.
7, 8, and 26). Therefore, the agency concludes that the safe upper
limit of daily intake should be based on total folate intake (i.e., on
consumption of folate from all sources).
ii. Lack of evidence of untoward effects of increased intakes.
25. Several comments that disagreed with the agency's tentative
conclusion that 1 mg folate per day from all sources is the safe upper
limit of intake stated that there is no evidence that maximum intakes
of 1,500 mcg to 2,000 mcg will result in any untoward effects. Another
comment reviewed the literature describing the effects of intakes of
1,000 to 5,000 mcg folic acid per day in persons with vitamin B12
deficiency and concluded that the literature did not reveal any
substantial safety concerns. Another comment stated that 5,000 mcg/day
should replace 1,000 mcg/day as the upper limit of safe intake.
The agency is aware that the literature describing the effects of
intakes of folic acid between 1,000 and 5,000 mcg per day is very
limited but disagrees that there is no evidence of untoward effects of
daily folate intakes of 1,500 to 2,000 mcg per day, and that 5,000 mcg
per day should be identified as the safe upper limit of intake.
The literature describing the effects of daily intakes of 1,000 to
5,000 mcg folic acid includes three uncontrolled intervention trials
involving 15 persons (Refs. 29, 30, and 31) and 16 case reports (Refs.
32, 33, 34, 35, 36, and 37). These reports represent a very small data
base, with information from a total of only 31 individuals. Moreover,
the agency notes that, among these data, exposures of 9 individuals to
daily intakes of 1,000 to 5,000 mcg folic acid lasted for less than 30
days (e.g., Refs. 30, 31, 32, and 33). Therefore, these reports are not
useful in assessing the safety of life-long exposures. However,
hematological responses that could lead to a delay in the diagnosis of
vitamin B12 deficiency were observed in 9 of the 16 patients
(i.e., in more than 50 percent) whose daily oral intakes of folic acid
were in the range of 1,000 to 5,000 mcg and continued for 1 month or
more (Refs. 29, 32, 33, 35, and 37). Thus, the limited scientific
literature shows that approximately half of the patients with
pernicious anemia associated with vitamin B12 deficiency will
respond to folate at doses between 1,000 and 5,000 mcg per day when
they are given the vitamin for relatively short periods of time (e.g.,
several months).
In addition, in discussing safety issues in its proposed rule (58
FR 53254 at 53267), the agency noted that, although there was a lack of
systematic evaluation of the effect of folic acid on the anemia of
vitamin B12 deficiency at intakes of less than 5,000 mcg per day,
several case reports have described hematologic improvement in
pernicious anemia patients with doses of folic acid lower than 1,000
mcg/day (e.g., at 200 to 500 mcg/day; Refs. 38, 39, 40, 41, 42, 64
through 65, and 72 through 74). Thus, adverse effects have been
reported at daily doses of less than 1,000 mcg, at doses of 1,000 to
5,000 mcg, and at doses greater than 5,000 mcg.
iii. Lack of evidence of toxic effects of increased folate intakes
in pregnant women.
26. Another comment that disagreed with the agency's tentative
conclusion noted that millions of pregnant women have taken prenatal
vitamins containing 1,000 mcg folic acid, that folic acid at dosages of
4,000 mcg per day has been extensively studied in pregnant women, and
that no toxic effects have been shown in healthy individuals.
The agency disagrees with the comment that folic acid at doses of
4,000 mcg per day have been extensively studied in pregnant women and
are without toxic effects. The agency recognizes that pregnant women
take prenatal supplements which usually contain 800 mcg of folic acid,
and that such supplements have been in use for many years. FDA notes
that, while there is no evidence that 800 mcg of folic acid per day
(i.e., the RDA level for pregnant or lactating women) is unsafe for
this group, such dosages are usually taken only during the second and
third trimesters of pregnancy or during lactation to meet specific
nutritional needs for limited periods of time and are usually taken
under physician supervision. The Institute of Medicine in Nutrition
During Pregnancy stated that the safety of large doses of folic acid in
pregnant women has not been systematically determined (Ref. 43).
The agency notes also that the comment that folic acid at doses of
4,000 mcg per day has been extensively studied in pregnant women, and
that such doses are without toxic effects, is not substantiated by the
scientific data. In the only study utilizing 4,000 mcg folic acid/day,
the Medical Research Council (MRC) trial, about 910 women took
supplements containing 4,000 mcg of folic acid from the time of
randomization into the trial until the 12th week of pregnancy (Ref.
14). At the conclusion of the study, the author stated that, although
the MRC trial had sufficient statistical power to demonstrate the
efficacy of the intervention, it did not have sufficient power to
answer the question of safety for public health purposes. Consequently,
this study does not provide a basis on which to determine whether the
use of 4,000 mcg/day of folic acid by pregnant women is safe.
Thus, the agency has not received any data or information that
would persuade it that any level other than 1 mg (1,000 mcg) folate per
day is the appropriate safe upper limit of intake for pregnant women.
iv. Adverse effects in those with vitamin B12 deficiency can
be detected with clinical care.
27. Another comment disagreed with the proposed 1,000 mcg safe
intake limit and noted that adverse effects of high intakes of folate
with respect to vitamin B12 deficiency can be detected with
clinical care. Other comments stated that the issue of masking of
vitamin B12 deficiency was overstated and predated modern clinical
nutrition.
FDA is aware that, in many instances, the adverse effects of
increased folate intake associated with the masking of the anemia of
vitamin B12 deficiency can be detected with clinical care but
disagrees that this fact provides adequate justification for increasing
the safe limit of daily intake. The agency notes that measurements of
vitamin B12 status are not performed on a routine basis by
physicians. Currently, there are no population-based data on how many
people in the United States have undiagnosed vitamin B12
deficiency and thus might be at risk from increased intakes of folate.
The agency noted in the January 6, 1993 final rule (58 FR 2606 at
2615), that significant percentages of the elderly, demented patients,
acquired immune deficiency syndrome (AIDS) patients, and patients with
malignant diseases have subnormal vitamin B12 levels without
having any of the classical manifestations of vitamin B12
deficiency. Lindenbaum et al. recently reported that the prevalence of
vitamin B12 deficiency was greater than
[[Page 8769]]
12 percent in a large study (n=548) of free-living elderly Americans
(Ref. 44). In addition, 5 to 10 percent of all patients, regardless of
age or clinical status, are found to have low serum vitamin B12
levels (58 FR 2606 at 2615). Little is known about whether folate
supplementation would have any adverse effect on such persons, who are
far more numerous in the U.S. population than are persons with
pernicious anemia.
The argument that adverse effects in persons with vitamin B12-
related problems can be identified with clinical care fails to consider
whether such persons, who may be unaware of their vitamin B12
status, would recognize an adverse effect as being the result of
increased folate intake, and whether they would seek medical attention
if subtle adverse effects were experienced. Thus, the agency concludes
that the argument that adverse effects in persons with vitamin
B12-related problems can be identified with clinical care does not
provide a sufficient basis for increasing the safe upper limit of
intake for such persons or for other persons in the general population
for whom there are currently no data to establish the effects, if any,
of high intakes of folate. In developing its proposed rule,
FDA was aware of the contentious nature of a proposed upper limit
and specifically asked for data on this issue. This topic was also
extensively discussed by FDA's Folic Acid Advisory Committee and Food
Advisory Committee (Refs. 7 and 8). No data were submitted in any of
the comments that addressed the issue of the safety of intakes above
1,000 mcg per day either for persons in the general population or for
any of the groups identified as potentially at risk from increased
folate intakes. The agency also notes that its position regarding use
of 1,000 mcg folate per day as the safe upper limit of daily intake was
supported by all comments from individuals with known expertise in
folate and vitamin B12 metabolism and related diseases.
Because there are inadequate data and information on the safety of
consuming more than 1,000 mcg folate per day, the agency is unable to
conclude that there is a reasonable certainty of no harm to persons
consuming more than 1,000 mcg folate per day. In the absence of data on
high intakes of folate, the agency is unable to adequately define the
nature or magnitude of potential risk from increased folate intakes. At
this time, the agency has no data to support a conclusion of safe use
of folate above 1,000 mcg per day or data that would provide a basis
for a change from the proposed upper limit of 1,000 mcg per day to an
upper limit of 5,000 mcg per day. In addition, for the reasons
explained above, the agency has not been persuaded by the comments that
it should consider synthetic folic acid as the only active form of the
vitamin and thus base its estimate of a safe upper limit of intake on
this form of the vitamin only.
The agency therefore concludes that, because of the lack of
evidence of safe use at intakes greater than 1,000 mcg folate daily,
and the potential for serious harm to some persons from such intakes,
daily intakes above 1,000 mcg by the general population should not be
encouraged.
b. Including a safe upper limit of daily intake in the claim. In
recognition of comments and safety concerns discussed in its proposal,
FDA, in Sec. 101.79(c)(2)(i)(G), proposed to require a statement on
fortified foods in conventional food form and on dietary supplements
that contain more than 25 percent of the RDI (i.e., more than 100 mcg
per reference amount customarily consumed or, for supplements, per
unit) about the maximum safe daily limit for folate consumption. The
agency proposed that such a statement (e.g., ``Folate consumption
should be limited to 1,000 mcg per day from all sources.'') was
necessary to prevent the health claim from being misleading regarding
potential risks from excessive intakes.
In the October 14, 1993 proposal (58 FR 53254 at 53282), the
agency, noting that the safe upper limit of intake was 1 mg (1,000
mcg), stated that a fortified food that contains more than 100 mcg
folate per serving contributes more than 25 percent of the RDI and more
than 10 percent of the daily limit. Therefore, it continued,
consumption of such foods should be monitored by the consumer, so that
he or she will not consistently or significantly exceed the upper
limit.
In its proposed rule (58 FR 53254 at 53282), the agency also noted
that it was not proposing to require that this statement be included in
claims on the relatively small number of conventional foods that
contain more than 100 mcg of folate without fortification (e.g., dark
green leafy vegetables, certain legumes). The agency stated that it
believed that there is no need for the consumer to monitor intakes of
these foods because their folate content consists of reduced
pteroylpolyglutamates whose bioavailability is generally considered
lower than that of the folic acid (i.e., pteroylmonoglutamate) added as
a fortificant to foods. The agency received many comments on this
aspect of the proposal.
c. General comments.
28. Comments supporting inclusion of a caution statement in health
claims stated that an admonition regarding excessively high intakes is
absolutely essential in the health claim, and that the agency must
require a meaningful and useful disclosure regarding the risks of
excess intake. One comment stated more specifically that health claims
related to folate and neural tube defects should be balanced by a
warning statement that increased intakes of folate may increase the
frequency of irreversible neurologic damage from vitamin B12
deficiency. A related comment stated that, among Black and Hispanic
females, folic acid fortification or supplementation is likely to do
more harm than good, and that a caution statement was important for
such groups. One comment recognized the need to set upper limits of
safe intake but noted that, in the absence of strong evidence, it is
inappropriate to warn consumers about potential adverse effects and
detract from the benefits of the health claim.
Other comments supported the use of a statement of a safe upper
limit of intake but found FDA's proposed language in
Sec. 101.79(c)(2)(i)(G) and in the model health claims (Sec. 101.79(d))
unsatisfactory because the agency failed to provide specific
information on the potential adverse effects of overconsumption and
failed to identify the subpopulations at risk from high intakes (e.g.,
the elderly).
The agency does not agree that it is inappropriate to warn
consumers about the potential adverse effects of increased folate
intake because adverse effects have been documented in the scientific
literature. The agency's responses to comments 23, 25, and 27 of this
document make clear that, for some population groups, there are risks
attendant upon increased folate intake. Such groups include those with
vitamin B12 deficiency and African-American women. As noted above,
the agency did not receive data providing evidence rebutting the risks
of folate intakes above 1 mg per day (1,000 mcg/day) for these and
other at-risk groups, such as pregnant women, children, persons on
antiseizure medications, or persons on antifolate medications.
Therefore, the agency agrees with the comments that stated that it
should require that a useful statement regarding risks of excessive
intakes be included in the health claim. In response to the comment
that the model health claims were unsatisfactory because they failed to
identify specific subpopulations at risk from increased intakes (e.g.,
the elderly), the agency is advising that it will not require
identification of specific
[[Page 8770]]
at-risk groups in the caution statement because the limited data
available from populations consuming folate at the level of 1 mg per
day (1,000 mcg per day) and above do not allow an adequate
identification of all such groups to be made. Identification in the
claim of only some of the groups at risk (e.g., the elderly) would be
misleading because persons in other at-risk groups that were not
identified in the claim could conclude that because they were not
mentioned, they were not at risk from high intakes.
d. Inappropriate to include caution statement only on fortified
foods and supplements.
29. Other comments stated that it was inappropriate to single out
only fortified foods or supplements that contain folate above 25
percent of the DV for carrying a warning statement.
The agency proposed not to require the caution statement in health
claims on the relatively small number of conventional foods that
contain more than 100 mcg of folate without fortification (e.g., dark
green leafy vegetables, certain legumes) because many of these foods
are not consumed on a daily basis, and even when consumed regularly,
the bulk and energy value of such foods tends to limit their
consumption.
The agency has reevaluated whether foods that are naturally high in
folate (e.g., those containing more than 25 percent of the DV) should
carry the caution statement proposed for fortified foods or supplements
containing more than 25 percent of the DV. The agency agrees with the
comment that it is inappropriate to single out fortified foods and
supplements for a caution statement because there is no justification
for distinguishing between added and naturally-occurring nutrients.
This decision is consistent with the agency's conclusion (see comment
23 of this document) that total folate intake from all sources needs to
be considered in arriving at a safe upper limit of daily intake. For
this reason, FDA has decided to require that the modified caution
statement described in comment 31 of this document appear on any
conventional food or dietary supplement that meets the criteria set out
in Sec. 101.79(c)(2)(i)(F).
e. Optional caution statement.
30. Another comment advised the agency to permit the identification
of the 1,000 mcg per day limit as optional information.
The agency rejects this comment. Given the point of the health
claim message, it is unlikely that an optional caution statement would
be included in most health claims. Therefore, most consumers would not
be alerted to the potential adverse effects of high levels of folate or
might assume that claim- bearing products without the caution statement
were safer than products that bore a claim that included the caution
statement. Consumption of products bearing the caution statement might
come to be associated with potential adverse effects, while consumption
of other products with an identical folate content that did not bear
the caution statement would not be associated with such potential
adverse effects. Because potential adverse effects are related to
increased intakes of folate from any source, it would be illogical for
the agency not to require the caution statement on all products that
carry the health claim and that meet the criteria for the caution
statement. Claims on products that meet the criteria and that fail to
carry the caution statement would be misleading because they would fail
to alert consumers to the material fact that there may be risks
attendant upon excessive folate intakes.
f. Upper limit of safe intake expressed as percent DV.
31. Another comment agreed with the use of a caution statement but
felt that the safe upper limit of intake should be expressed as percent
of the DV.
The agency agrees with this comment because this method of
communicating the safe upper limit of intake will provide consistency
with the nutrition label, thereby enhancing the comprehensibility of
the information. The agency notes that, as stated in response to
comment 19 of this document and in the codified language in
Sec. 101.79(c)(2)(i)(F), the upper limit of daily intake is to be
expressed in the claim as percent of the DV, with manufacturers having
the option of including the microgram equivalent in parentheses (e.g.,
250 percent DV (1,000 mcg)).
g. Limit caution statement to products with 100 percent DV.
32. Several comments said that a warning statement should be
limited to higher-dose foods or dietary supplements (those containing
100 percent or more of the DV) unless further research and monitoring
demonstrate that the risks of increased folate intakes from lower-dose
foods or supplements are also significant. Other comments argued that
there is no need to include a warning statement and noted that
supplements and cereals with 100 percent of the DV have never carried
such awarning statement. Other comments expressed the opinion that the
warning statement would discourage increased consumption of folic acid
supplements.
The agency has considered whether requiring that the caution
statement appear in claims on foods or dietary supplements that contain
more than 25 percent of the DV is too restrictive. The agency
recognizes that such a requirement would require that caution
statements appear as part of health claims on a wide range of products
that contain more than 100 mcg folate per serving (e.g., dietary
supplements, breakfast cereals) that have not previously carried such a
statement. The agency agrees with the comment that the result of such
caution statements could well be to discourage consumption of such
products. It was not the agency's intent to cause such a result because
breakfast cereals and dietary supplements have traditionally been
important sources of folate for consumers who use them. Additionally,
in the case of many dietary supplements, a statement regarding daily
consumption (e.g., ``consume one per day'') is already included in the
labeling and serves to inform consumers as to the appropriate daily
intake.
The agency notes, however, that the health claim is intended to
encourage women to increase their intakes of folate, and that the claim
is likely to encourage some women to consume more of particular
products, particularly those bearing the claim that are very high in
folate, than they might otherwise consume. Thus, a caution statement
regarding excessive intakes is appropriate on foods that contain very
high levels of folate because the possibility is created by the claim
itself that some women will achieve high folate intakes.
The agency has concluded that a statement about high consumption of
folate is necessary if a product contains more than 100 percent of the
DV (i.e., 400 mcg when labeled for use by adults and children 4 or more
years of age; 800 mcg when labeled for use by pregnant or lactating
women; 58 FR 2206 at 2213, January 6, 1993; Food Labeling; Reference
Daily Intakes and Daily Reference Values). Such an amount of folate
would exceed not only the DV's but the PHS recommended folate intake
for women of childbearing age. Thus, the caution statement is required
only on products that contain more than current recommended daily
intakes of folate per serving.
The agency has redesignated proposed Sec. 101.79(c)(2)(i)(G) as
Sec. 101.79(c)(2)(i)(F) and has modified this provision to read that:
Claims on foods that contain more than 100 percent of the Daily
Value (DV) (400 mcg) when labeled for use by adults and children 4
or more years of age, or 800 mcg
[[Page 8771]]
when labeled for use by pregnant or lactating women) shall identify the
safe upper limit of daily intake with respect to the DV. The safe
upper limit of daily intake value of 1,000 mcg (1 mg) may be
included in parentheses.
h. Upper limit useless without reference to intake goal.
33. Other comments opposed including a reference to the upper limit
of 1,000 mcg per day in any health claim because, they argued,
consumers cannot determine their total daily intakes from all sources.
These comments noted that stating an upper limit was useless unless all
food types were labeled with their folate content. Another comment
opposing the inclusion of a warning statement on foods or supplements
containing more than 25 percent of the DV stated that inclusion of an
upper limit was problematic if reference was not made to the 400 mcg/
day intake goal.
The agency recognizes that there was an inconsistency in the way
that proposed Sec. 101.79(c)(2)(i)(G) was worded in that the safe upper
limit of daily intake was expressed as 1,000 mcg rather than as a
percent of the DV. The agency has corrected this inconsistency, as
noted above in response to comment 32 of this document.
The agency disagrees that inclusion of the 400 mcg intake goal is
necessary to make a caution statement understandable, and that a
caution statement is useless unless all foods are labeled with their
folate contents. The agency notes that diets that do not contain highly
fortified foods and dietary supplements rarely provide daily folate
intakes of more than 1,000 mcg. The likelihood of achieving daily
intakes exceeding 1,000 mcg arises from consumption of highly fortified
foods and dietary supplements, particularly those that contain more
than the DV per unit or per serving. Under current labeling
requirements, such foods and supplements must, or soon will have to,
carry nutrition labeling. The safe upper limit of daily intake will
thus appear on those products whose use provides the greatest potential
for contributing to overconsumption (e.g., highly fortified foods and
supplements whose label bears a health claim that explains a potential
benefit of increased consumption). The agency concludes that it is
necessary to require inclusion of the caution statement, with the safe
upper limit of daily intake expressed as percent of the DV (percent
DV), as part of the health claim on such products.
The agency also notes that the availability of the health claim may
result in increased consumption of foods with high folate content that
carry the claim. The expression of the folate content as a percent of
the DV will help consumers who select a health claim-labeled food that
contains more than 100 percent of the DV and that is labeled with a
statement that folate intakes should be limited to 250 percent of the
DV, to recognize that the product provides more than the full amount of
the DV while still leaving a considerable allowance for consumption of
other foods of lower folate content. The percent DV labeling will also
allow a consumer who selects four health claim-labeled foods that each
contain more than 100 percent of the DV to quickly compute that these
four products alone will provide more than 400 percent of the DV, an
amount in excess of the safe upper limit of daily intake of 250 percent
of the DV. Thus, the agency does not believe that explicit reference to
the 400 mcg target intake goal is necessary to make the caution
statement understandable. The agency advises, however, that
manufacturers wishing to include reference to the 400 mcg intake goal
may do so (Sec. 101.79(c)(3)(iv)).
i. Caution statement on all products with >25 percent DV.
34. One comment interpreted the proposed regulation to mean that
the agency was proposing to require use of a caution statement on all
products with more than 100 mcg folate/serving, whether or not they
bore the health claim.
This comment misunderstood the proposal. The agency advises that it
is requiring that the caution statement be used only on conventional
foods or dietary supplements that bear the folate/neural tube defects
health claim and that contain more than 100 percent of the DV (400 mcg
when labeled for use by the general population or 800 mcg w
FR Doc. 96-5013 Food Labeling: Health Claims and Label Statements; Folate and Neural Tube Defects
hen labeled
for use by pregnant or lactating women).
j. Warnings on supplements without adequate vitamin B12.
35. One comment suggested that the agency should require warnings
on supplements that do not provide amounts of vitamin B12 adequate to
provide protection from the potential problem in nearly all cases.
This comment was based on the assumption that the greatest
potential for adverse effects of high folate intake is the masking of
the anemia of vitamin B12 deficiency, with continued progression
of neurologic damage, and that provision of oral vitamin B12 will
negate this concern. The comment did not provide data or information
identifying the amount of oral vitamin B12 that would protect
nearly all persons from masking of a vitamin B12 deficiency and,
thus, the level below which a warning statement would be required.
The agency disagrees with this suggestion. The agency is aware that
very high doses of vitamin B12 (e.g., about 1 mg; 500 times the
RDI for this vitamin) without intrinsic factor (i.e., without the
protein factor necessary for the absorption of vitamin B12 and the
factor whose lack causes pernicious anemia) have provided adequate
treatment for some persons with pernicious anemia (Ref. 45). It has
been suggested, based in part on observations that some patients with
pernicious anemia can be maintained on oral vitamin B12, that high
doses of vitamin B12 be added to foods and dietary supplements
fortified with folic acid to reduce the potential for adverse effects
in persons with vitamin B12 deficiency.
Several experts at a CDC meeting on surveillance for adverse
effects of increased intakes of folate (Ref. 26) commented on this
suggestion. One expert noted that in the presence of other nutrients
(e.g., vitamin C, thiamin, iron), vitamin B12 may be converted
into analogs, some of which may have antivitamin B12 activity.
In the proposal of October 14, 1993 (58 FR 53254 at 53280), the
agency discussed the issue of whether high doses of vitamin B12
should be added to foods or supplements fortified with folic acid to
reduce the potential for adverse effects in persons with vitamin
B12 deficiency. The agency requested comments, specifically data,
on the appropriateness, potential effectiveness, and safety of such
fortification. The agency did not receive data or other information on
this issue.
Given this lack of information, FDA finds no basis to require a
warning statement on supplements based on their content of vitamin
B12 because there are no data on the effects of various folate/
vitamin B12 combinations on which to base a warning. In addition,
relating a caution statement only to the vitamin B12 content of a
product would fail to recognize the potential adverse effects of
increased folate intakes on other population groups, including, as
discussed above, pregnant women, children, those on antiepileptic
medications, and those on antifolate medications, because it would fail
to recognize that potential adverse effects of increased intakes are
not limited only to those with vitamin B12-related problems.
Because data are not available that address for the general
population on the issue of simultaneous fortification of foods or
dietary supplements with both folate and vitamin B12, the agency
cannot establish a level of oral vitamin
[[Page 8772]]
B12 that is sufficient to protect most persons with vitamin
B12-related problems from the adverse effects of increased intakes
of folate. In addition, questions regarding the appropriateness,
potential effectiveness, and safety of such an approach remain
unanswered. Vitamin B12 deficiency, including pernicious anemia,
is a serious condition, which, if untreated, can lead to irreversible
neurological damage. Regardless of the widespread availability of oral
vitamin B12 preparations, patients with pernicious anemia, and
others at risk of vitamin B12 deficiency, should be diagnosed,
treated, and monitored by a physician (Ref. 45).
6. Multifactorial Nature of Neural Tube Defects
The general requirements for health claims for conventional foods
(Sec. 101.14(d)(2)(iii)) provide that, where factors other than dietary
intake of the substance affect the relationship between the substance
and the disease or health-related condition, FDA may require that such
factors be addressed in the health claim. FDA has decided that health
claims on dietary supplements should be subject to the same requirement
(see 59 FR 395 at 425).
It is well-recognized that neural tube defects have many causes,
some of which are not related to folate status. Genetic and
environmental factors contribute to the multifactorial nature of neural
tube defects. Environmental factors associated with neural tube defects
include, for example, maternal health, maternal family history of
neural tube defects, and maternal use of certain antiseizure
medications (see 58 FR 53254 at 53258 for references).
FDA discussed the multifactorial nature of neural tube defects in
several sections of its proposed rule. In proposed Sec. 101.79(b)(1),
FDA discussed the fact that neural tube defects are caused by many
factors and also noted that a significant risk factor is a personal or
family history of a pregnancy affected by a neural tube defect. In
Sec. 101.79(c)(2)(i)(D), FDA proposed to require that claims state that
neural tube defects have many causes, and that claims not imply that
folate intake is the only recognized risk factor for neural tube
defects. The agency included language to this effect in the agency's
proposed model claims (Sec. 101.79(d)).
The agency received several general comments and new data in
response to the sections of the proposed codified language addressing
the multifactorial nature of neural tube defects.
a. General comments.
36. Several comments agreed that the claim should include
information on the multifactorial nature of neural tube defects to be
consistent with claims for other diet-disease relationships. These
comments asserted that the claims would be misleading if such
information were not included. Other comments disagreed that the
multifactorial nature of neural tube defects should be recognized in
the claim because, for example: (1) Folate is the most important risk
factor, or (2) there is no educational value in identifying the
multifactorial nature of the condition. Another comment stated that
only factors that can be controlled, or those on which women could take
action, should be included in the claim.
FDA is in the process of reconsidering the need to include in
health claims the fact that the disease that is the subject of the
claim has many causes. In the January 1993 final rules on health
claims, FDA included this fact as a required element of the claim.
However, as discussed below, FDA has come to tentatively conclude, at
least in part in response to a petition from the National Food
Processors Association (Docket No. 94P-0390), that, at least for most
claims, a statement about their multifactorial etiology adds length to
the claim without conveying information that would directly affect the
dietary choices of the consumers.
The agency is particularly concerned that manufacturers will be
disinclined to use unnecessarily lengthy health claims on food labels,
that additional verbiage may detract from the central consumer message
of the claim, and that, as a result, health claims will be infrequently
used, and the benefits of communicating information on diet-disease
relationships to consumers through such claims will not be realized.
The issue of manufacturers' reluctance to use lengthy health claims
is particularly significant in the case of the folate/neural tube
defects health claim because this topic has received much less
attention than has been given to chronic illnesses such as
osteoporosis, heart disease, and cancer. The lower level of public
familiarity with this topic was confirmed in a recent survey conducted
for the March of Dimes Birth Defects Foundation regarding knowledge and
practices of women of childbearing age in the United States with
respect to consumption of folic acid from supplements and breakfast
cereals (Ref. 53).
During January and February 1995, the Gallup Organization conducted
for the March of Dimes a proportionate, stratified random-digit-dialed
telephone survey of a national sample of 2,010 women aged 18 to 45
years. The response rate was 50 percent. Estimates were statistically
weighted to reflect the total population of women aged 18 to 45 years
in the continental United States. In response to the question ``Have
you ever heard or read anything about folic acid?'', 52 percent of
women reported ever hearing of or reading about this nutrient. Of
these, 9 percent answered that folic acid helps to prevent birth
defects and 6 percent that folic acid helps to reduce the risk for
spina bifida; 45 percent were unable to recall what they had heard or
read. Fifteen percent of respondents reported having knowledge of the
PHS recommendation regarding the use of folic acid; 4 percent reported
that the recommendation was for prevention of birth defects and 1
percent, for the prevention of spina bifida (Ref. 52).
Respondents were also asked ``From what you know, is there anything
a woman can do to reduce her risk of having a baby with birth
defects?'' A total of 88 percent of respondents reported that a woman
can help reduce the risk for having an infant with birth defects. The
most common responses about how to reduce risk were avoiding alcohol
and drugs (73 percent), and not smoking (63 percent); 1 percent of
women reported that folic acid could reduce risk.
This study found that while most women interviewed recognized that
there were a number of factors that might affect their risk of having a
baby with a birth defect, there was a low level of awareness that
consumption of folate from supplements, breakfast cereals, and other
foods may specifically help to reduce their risk of a neural tube
defect-affected pregnancy.
The results of the March of Dimes survey are consistent with recent
findings by FDA. As part of FDA's ongoing review of its regulations
governing health claims, the agency conducted six focus groups in May
and June 1995 to evaluate consumer understanding of health claim
messages. In a report on these focus groups, Levy (Ref. 54) noted that
while almost all participants were aware of health effects of fat,
calcium, and fruits and vegetables, very few had heard much about folic
acid. Participants appreciated information provided in the folate/
neural tube defects model claims but considered it insufficient to
inform them as adequately as they wished to be informed.
Thus, recently available information suggests that there is a low
level of awareness of the potential impact that
[[Page 8773]]
increased folate intake may have on the risk of a serious type of birth
defect.
The agency has concluded, based in part on the studies mentioned
above, that the need to provide a succinct health claim in this topic
area is very important. Succinctness in the claim will increase the
likelihood that firms will use it and thus will increase its
educational value. To facilitate the use of such a claim by
manufacturers, it needs to be no longer than necessary to convey the
central consumer message.
With respect to the issue of whether explicit identification of the
multifactorial nature of neural tube defects is necessary to prevent
the folate/neural tube defects health claim from being misleading, the
agency notes that use of the term ``may reduce'' in the claim describes
the potential of folate to affect the risk of neural tube defects and
serves to reflect the multifactorial nature of this birth defect. In
addition, data obtained in the March of Dimes survey described above
indicate that many women already recognize that birth defects in
general may have many causes. The agency has therefore concluded that
explicit reference to ``may have many causes'' is redundant when
included with the phrase ``may reduce.''
The agency has concluded that it is not necessary to include
explicit reference to the multifactorial nature of neural tube defects
in the claim.
The agency notes, however, that the fact remains that neural tube
defects are multifactorial in nature. This fact is confirmed by new
data of which FDA has become aware and that are discussed in the
following section. Because of this fact, the claim must not imply that
folate intake is the only risk factor for these birth defects.
Therefore, the agency is modifying Sec. 101.79(c)(2)(i)(D) by
deleting the requirement that the claim state that neural tube defects
have many causes but is retaining the requirement that claims shall not
imply that folate intake is the only recognized risk factor for neural
tube defects.
The agency is also advising that manufacturers who wish to do so
may include, on an optional basis, information in the claim on
additional risk factors for neural tube defects. Information that may
be included is described in Sec. 101.79(c)(3)(i).
b. Data received in comments. 1. The agency received new data from
an Irish study that found that plasma levels of vitamin B12, as
well as folate, were independent risk factors for neural tube defects
(Ref. 51). These data were reviewed at the October 14 and 15, 1993,
meeting of the Folic Acid Subcommittee and are summarized here because
the agency did not have the data in sufficient time to include them in
its October 14, 1993, proposed rule. Kirke et al. (1993) (Ref. 51)
compared values for plasma folate, plasma vitamin B12, and red
blood cell folate in 81 women who had a neural tube defect-affected
pregnancy and 247 control women. Values for all three parameters were
significantly lower in case mothers than in control mothers. Plasma
vitamin B12 and red cell folate were both significantly positively
correlated in case mothers but not in control mothers. Multiple
regression analysis showed that plasma vitamin B12 and plasma
folate were independent predictors of red cell folate in case mothers
but not in control mothers.
The authors concluded that plasma vitamin B12 and plasma
folate were independent risk factors for neural tube defects and
suggested that the enzyme methionine synthetase was involved directly
or indirectly in the etiology of neural tube defects. They noted that
the correlation between plasma vitamin B12 and red cell folate,
observed in case mothers only, was difficult to explain on a purely
nutritional basis and favored the etiology of neural tube defects as
being the result of some metabolic abnormality in the mother, and
possibly in the embryo, interacting with maternal plasma levels of
folate and vitamin B12 (Ref. 50).
Mooij et al. (Ref. 46) measured levels of seven vitamins in blood
of women who had a neural tube defect-affected pregnancy and reported
that such measurements were not suitable for identifying women at high
risk of another affected pregnancy. The authors hypothesized that the
effect of folic acid was attributable, at least in part, to its
overriding a metabolic disorder.
2. The agency received additional new data in a comment relating to
a possible role of a deficiency of one or more antioxidant enzymes in
the development of neural tube defects. The comment discussed the
hypothesis that a genetic defect in antioxidant enzyme systems that
protect neuronal membranes from excessive lipid peroxidation may play a
role in the etiology of neural tube defects. The comment noted that
abnormalities of the neural tube have been documented in cultured rat
embryos exposed to oxygen radicals generated in vitro by xanthine plus
xanthine oxidase. The severity of these abnormalities, which increases
in a dose-responsive manner with exposure to xanthine oxidase, can be
moderated by substances with known antioxidant activity such as
glutathione, catalase, L-ascorbic acid (vitamin C), or DL-alpha
tocopherol (vitamin E).
This comment provided the results of a pilot study that tested the
hypotheses in children with neural tube defects and their immediate
families. In testing the hypothesis, the investigators assessed a
number of red blood cell free radical- scavenging enzymes in eight
families with one or more children with the neural tube defect
meningomyelocele. Seventeen healthy adults without a history of neural
tube defects served as controls. All meningomyelocele-affected children
were found to be deficient in red blood cell glutathione peroxidase,
with 5 in the range of moderately to severely deficient. At least one
parent of seven of the eight affected children was deficient in red
blood cell glutathione peroxidase activity, with four of seven in the
moderately to severely deficient range. Nine additional children with
meningomyelocele or other neural tube defects (specifically,
encephalocele and iniencephaly) were also studied. Red blood cell
glutathione peroxidase activities were low in all of the nine
additional affected children, with values in six of the nine in the
moderately to severely deficient range.
The comment also noted that pterin aldehyde, a contaminant that may
be present at a level of about 4 percent in commercially available
folic acid preparations, may reduce exposure of the developing neural
tube to toxic oxygen free radicals through its activity in inhibiting
xanthine oxidase. The comment suggested (Comment 68H to docket 93N-
100H) that a combination of genetic factors, deficient antioxidant
enzyme capacities, exogenous or endogenous teratogens, periconceptional
diets with inadequate amounts of free radical scavenging substances, or
suboptimal concentrations of pterin aldehyde-like agents may provide
further explanations for tissue-specific injury in some pregnancies.
The comment concluded that, while the mechanisms of neural tube
defect formation likely fit into a complex ecogenetic model, a
deficiency of one or more antioxidant enzymes may increase the risk for
the development of neural tube defects. The comment recommended further
study to determine whether reduced antioxidant activity predisposes the
embryo to the development of neural tube defects.
c. Data that were published after the close of the comment period.
1. Mills et al. (1995) (Ref. 47) reported that women with neural tube
defect-affected pregnancies had significantly higher levels of
homocysteine than did vitamin B12-matched controls. Mills et al.
(1995)
[[Page 8774]]
(Ref. 47) noted that their study showed that an abnormality of
homocysteine metabolism, apparently related to methionine synthase, is
present in many pregnancies that resulted in neural tube defects.
2. Mechanistic studies in cultured rat embryos have also provided
insights into roles for nutrients in addition to folate in the etiology
of neural tube defects. Chambers and coworkers identified
autoantibodies (i.e., antibodies directed against tissue components of
the same organism) to the extracellular basement membrane (i.e., the
noncellular layer underlying the epithelium) protein laminin as an
agent that caused neural tube defects in whole embryo cultures (see
Ref. 48 for additional references). Such antibodies were found
initially in the embryotoxic sera of monkeys with poor reproductive
histories. Chambers et al. (1995) (Ref. 48) recently reported that
methionine overcomes neural tube defects in rat embryos cultured on
sera from monkeys immunized against laminin. The authors noted that the
association of autoimmune diseases and fetal loss has received closer
attention in recent years, but that neither the mechanisms of fetal
loss nor treatments have been well defined (Ref. 48). The authors
suggested that epidemiologic studies are needed to establish a possible
role for autoantibodies in the etiology of neural tube defects and to
determine the efficacy of methionine supplementation in overcoming such
defects.
3. Data addressing the etiologic heterogeneity of neural tube
defects were also derived from observations that infants and fetuses
with isolated neural tube defects have different risk factors than
those with neural tube defects occurring with other birth defects and
from reported differences in recurrence risks for neural tube defects
based on the level of the affected infant's defect (Ref. 49; Shaw et
al., 1994, for references). Shaw et al. (1994) (Ref. 49), used
population-based case ascertainment by the California Birth Defects
Monitoring Program in an ethnically diverse population of more than
700,000 live births and fetal deaths to investigate whether
heterogeneity existed among various anatomic and pathogenetic
subclasses of neural tube defects for a variety of commonly collected
child and parental characteristics. Among cases of anencephaly,
increased risks were found for Hispanic white women with risk estimates
highest for nonisolated cases. This population-based study showed
increased risk for Hispanic women specifically among subclassifications
of neural tube defects, and provides some evidence that further
classification of neural tube defects may reveal subgroupings of cases
with different etiologies.
Shaw et al. (1995) (Ref. 50) used a case-control study design (549
cases and 540 controls) to investigate whether intake of supplemental
folic acid or dietary folate reduced the risk of a neural tube defect-
affected pregnancy (Ref. 50). The authors found that women with any use
of a folic acid-containing vitamin in the 3 months prior to conception
had a lower risk of having an NTD-affected pregnancy. Odds ratios were
similar for average daily folic acid intakes of <400 mcg, 400 to 900
mcg, and >900 mcg/day, and thus, no dose-response pattern was apparent.
Use of 400 to 900 mcg folic acid/day in the 3 months after conception
was also associated with reduced risk of a neural tube defect-affected
pregnancy. The authors also observed that women who did not begin using
a folic acid- containing vitamin until the second trimester of
pregnancy also had a reduced risk of neural tube defects and suggested
that although the finding may be indicative of errors in reporting
vitamin use in general, it also weakens the attribution of a direct
preventive effect of folate on neural tube defects in the study
population (Ref. 50).
When race/ethnicity were considered, nonHispanic white women who
used a folic acid-containing vitamin in the 3 months before conception
had a reduced risk of a neural tube defect-affected pregnancy. However,
risk of a neural tube defect-affected pregnancy was not reduced in
Hispanic women who consumed a folic acid-containing vitamin in the 3
months before conception. The overall results of this study are
consistent with other studies showing associations between folate
intake and reduced risk of neural tube defects. However, the data also
suggest that the folate-associated reduction in risk may be specific to
subsets of the population, primarily nonHispanic women (Ref. 50).
These recent studies are of significance for the insights that they
provide into understanding the multifactorial etiology of neural tube
defects. They support the hypothesis that neural tube defects are not
the result of a wide-spread nutritional deficiency of folate in the
U.S. population but may result from metabolic defects or other
physiologic conditions affecting a small part of the population. These
new data support FDA's decision to require that claims not imply that
folate intake is the only recognized risk factor for neural tube
defects.
7. Prevalence Statements
In Sec. 101.79(c)(2)(i)(E), the agency proposed to require that the
claim provide information that neural tube defects ``while not
widespread, are extremely significant.'' Because the affected
population is few in number and not readily identifiable, FDA proposed
to require that this information be disclosed to prevent women from
being misled into believing that neural tube defects are very common
birth defects, or that, lacking a personal or family history of such
defects or other recognized risk factors, their risk of having a
pregnancy affected with such a birth defect is very high.
37. The agency received a number of comments on the proposed
prevalence statement. Some comments stated that the wording ``while not
widespread'' was not clear, and one comment suggested use of
``uncommon'' rather than ``while not widespread'' in describing the
prevalence of neural tube defects. One comment noted that statements
indicating that neural tube defects had a low prevalence in the United
States would discourage women from taking folic acid supplements
because women would believe that the health claim is not applicable to
them, and they would be misled into not taking the health claim
seriously. One comment noted that there is no standard for the proposed
term ``not widespread.'' One comment noted that because the behavior
intended to result from authorization of the health claim was to have
women consume more folic acid, qualifiers regarding prevalence of the
condition had no educational benefit. One comment, noting that
statements regarding the extent of the disease-related conditions were
optional in other approved health claims, and that the rarity of spina
bifida and related birth defects is obvious to virtually all consumers,
urged the agency to make prevalence statements optional in the folate/
neural tube defect claim.
The Folic Acid Subcommittee also commented on issues of prevalence
and demographics of neural tube defects at all of its meetings (e.g.,
Ref. 8). The Folic Acid Subcommittee discussed the decline in the rate
of neural tube defects from a high in Boston in the 1930's of 5 per
1,000 births to the current overall U.S. rate of about 0.6 per 1,000
births (i.e., about 2,500 cases/year in the United States). In
addressing the prevalence of neural tube defects among different ethnic
groups, one Folic Acid Subcommittee member noted that African-American
women have a rate lower than the overall U.S. rate, while Mexican-
American women have a rate
[[Page 8775]]
about two and one-half times the national average. The participant also
noted that there is about a two- fold higher rate among women in lower
socio-economic groups than among those in higher socio-economic groups
(Ref. 8).
The agency has reviewed the comments that it received and agrees
that use of the proposed wording ``while not widespread'' is not clear
because it is not quantitative. The agency notes that even though the
occurrence of neural tube defect-affected pregnancies is low, the
population at risk may be quite large because about half of pregnancies
are unplanned. Therefore, the agency concludes that a statement of
prevalence is not a material fact in light of the other statements made
in the claim. For this reason, the agency concludes that it is not
necessary to require that the claim state that the prevalence of neural
tube defects is low to ensure that the claim is not misleading.
Therefore, the agency is deleting the requirement proposed in
Sec. 101.79(c)(2)(i)(E) and redesignating subsequent sections as
discussed below and as shown in the codified language.
However, given the other comments cited above and its discussions
with the Folic Acid Subcommittee, the agency does not agree that there
would be no educational benefit from providing prevalence information
in the health claim. The agency concludes, based on the comments above,
that prevalence information can be useful to consumers because it can
provide a context that increases understanding of how frequently neural
tube defects actually occur among pregnancies in the U.S. population.
The agency recognizes that it has provided for inclusion, on an
optional rather than required basis, in other authorized health claims
of information on the number of people in the United States who have
the health-related condition (e.g., see saturated fat and
cardiovascular disease claim and dietary fiber and cancer claims).
Thus, in response to the comments above, and consistent with other
authorized health claims, FDA, in Sec. 101.79(c)(3)(v), is authorizing
the use of optional statements to provide the estimated numbers on an
annual basis of neural tube defect births among live births to women in
the general U.S. population. Currently, this estimate is 0.6 cases per
1,000 live births, or 6 cases per 10,000 live births, or about 2,500
cases among 4 million live births, or about 1 case per 1,600 live
births. These estimates are based on information for the U.S.
population from PHS. FDA finds, based on a review of how such
statistics are generally presented, that expressing this information as
the estimated annual number of neural tube defects per a specified
number of births (e.g., per 1,000 live births or per 10,000 live
births) will help to make this information as useful as possible.
Section 101.79(c)(3)(v) provides for use of these estimates unless more
current estimates from PHS become available, in which case, the newer
estimates may be used.
8. Quantifying Risk Reduction
In Sec. 101.79(c)(2)(i)(F), the agency proposed that the claim
contain a statement that some women may reduce their risk of a neural
tube defect-affected pregnancy by maintaining adequate folate intake
during their childbearing years. Such a statement is consistent with
the estimate provided in the PHS recommendation that about half of
neural tube defects (i.e., about 1,250 annually) might be averted if
all women of childbearing age in the United States who are capable of
becoming pregnant consumed 0.4 mg of folate daily throughout their
childbearing years. FDA tentatively concluded that such a statement is
necessary to ensure that women do not conclude on the basis of the
claim that adequate intake of folate will prevent all occurrences of
neural tube defects. The agency also proposed in
Sec. 101.79(c)(2)(i)(F) that the claim not attribute any specific
degree of reduction in risk of neural tube defects to maintaining an
adequate folate intake throughout the childbearing years.
38. Several comments agreed with the agency that a specific degree
of reduction in risk should not be stated in the health claim. Other
comments noted that while occurrence of neural tube defects will be
averted by only some women, the risk of occurrence will be reduced for
the population. Other comments objected to the proposal to prohibit use
of the PHS estimated percent risk reduction of 50 percent. Some
comments argued that the 50 percent estimate should be stated because
it was a scientific finding, and that failure to include this estimate
could have a negative effect on how much effort women make to ensure
that they have adequate folate intake. Another comment stated that the
estimate of 50 percent reduction should be included because it is
preferable for women to know the exact benefit of folic acid rather
than to be informed that ``some but not all women may benefit.''
The agency disagrees with comments that the PHS estimate of 50
percent is a scientific finding and represents an exact benefit
achievable by all women who consume adequate folate daily throughout
their childbearing years. The PHS recommendation states that the 50
percent estimate was derived from studies that associated recalled use
of folic acid-containing multivitamins with reduced risk of neural tube
defect-affected pregnancies and states that ``the protective effect
found in the studies of lower-dose folic acid, measured by the
reduction in neural tube defect incidence, ranged from none to
substantial'' (Ref. 5) (emphasis added). The PHS recommendation also
noted that:
It is expected that consumption of adequate folic acid will
avert some, but not all, neural tube defects. The underlying causes
of neural tube defects are not known. Thus, it is not known what
proportion of neural tube defects will be averted by adequate folic
acid consumption. From the available evidence, CDC estimates that
there is the potential for averting 50 percent of cases that now
occur. However, until further research is done, no firm estimate of
this proportion will be available (Ref. 5).
The agency also notes that there may be minimal or no effect of
periconceptional use of folate in areas of low prevalence or in areas
where other factors are contributing to an increased prevalence. This
observation is consistent with scientific evidence that shows that, in
an area of low prevalence in the United States, women who consumed
folate from multivitamins or fortified breakfast cereals did not have a
lower risk of having a neural tube defect-affected pregnancy than did
women who did not consume multivitamins or fortified breakfast cereals
(Ref. 12; Mills et al.).
Thus, the estimate of a potential for a 50 percent reduction in
neural tube defect-affected pregnancies, if all women consumed adequate
folate throughout their childbearing years, is not a scientific finding
and may not be applicable to estimating potential risk reduction in
areas of low prevalence. The agency notes further that the estimate of
50 percent is not applicable to risk reduction that might be
experienced by individual women, whose personal risk factors are not
fully understood. In addition, the estimated proportion may change with
the availability of new scientific data and information. The agency
recognizes, however, that manufacturers may wish to use the PHS
recommendation, including the estimate of the potential for a 50
percent reduction in the incidence of neural tube defects, as labeling
for folate-containing products. The agency also notes that there is
considerable potential for making a misleading claim if such
information is not presented in an accurate context.
[[Page 8776]]
The agency has concluded that an estimate of potential risk
reduction can be included in the health claim because it may help some
consumers better understand the potential population-based impact on
neural tube defect-affected pregnancies if all women consumed adequate
folate throughout their childbearing years. Therefore, FDA is providing
in Sec. 101.79(c)(2)(i)(E) that population-based estimates of risk
reduction may be included in the claim so long as the claim makes clear
that the estimate does not reflect risk reduction that may be
experienced by individual women. Provision of such information will
reduce the likelihood of women being misled that adequate folate intake
will prevent an occurrence of a neural tube defect-affected pregnancy.
The agency has revised Sec. 101.79(b)(3) to provide information
from the PHS recommendation that explains how the estimate of a
potential for reduction in incidence of neural tube defects of 50
percent was derived and provides the context in which the estimate can
be understood by individual women.
FDA has also redesignated proposed Sec. 101.79(c)(2)(i)(F) as
Sec. 101.79(c)(2)(i)(E) and revised this section to remove the
prohibition against use of the PHS estimate. Section 101.79(c)(2)(i)(E)
includes reference to new Sec. 101.79(c)(3)(vi) which provides for
optional inclusion of statements about population-based estimates of
risk reduction. The requirement that claims state that some women may
reduce their risk of a neural tube defect-affected pregnancy through
adequate intake of folate throughout their childbearing years is
retained in Sec. 101.79(c)(2)(i)(E).
New Sec. 101.79(c)(3)(vi) states that an estimate of the reduction
in the number of neural tube defect-affected births that might occur in
the United States if all women consumed adequate folate throughout the
childbearing years (i.e., 50 percent) may be included in the claim if
such an estimate is accompanied by information that states that it is a
population-based estimate and does not reflect reduction in risk that
may be experienced by individual women. New Sec. 101.79(c)(3)(vi) also
provides for use in the claim of information in revised
Sec. 101.79(b)(3).
9. Optional Health Claim Information
In Sec. 101.79(c)(3)(i), the agency proposed to permit
manufacturers, in addition to including the fact that neural tube
defects have many causes, to specifically identify risk factors for
neural tube defects. The agency stated that specific examples of other
risk factors include a personal history of such a defect, maternal
diabetes mellitus, use of the antiepileptic drug valproic acid,
maternal febrile illness, or a close relative with a neural tube defect
(Sec. 101.79(b)(1) and (b)(2)). The agency requested comments on
whether such additional information would be useful to consumers.
a. Identifying other risk factors.
39. Some comments expressed the opinion that most of the optional
information was helpful, while others stated that there was no
educational value in identifying the multifactorial nature of neural
tube defects, and that women cannot control other risk factors.
The agency disagrees with the comments that stated that
identification of other risk factors would not be helpful to women.
Certain conditions, such as diabetes mellitus, are known to increase a
woman's risk of a neural tube defect-affected pregnancy. Identification
of these risks in the claim may serve to alert some women to their
higher risk and encourage them to seek advice from their health care
providers before becoming pregnant.
The agency is providing in Sec. 101.79(c)(3)(i) for the inclusion
of optional information in the claim. Information in Sec. 101.79(b)(1)
or (b)(2) or drawn from other parts of Sec. 101.79(c)(3) may be
included in the claim. Use by manufacturers of factors listed in the
regulation will ensure that claims will only include scientifically-
based information and will not include information that has not been
well- documented (e.g., ``Birth defects of the brain or spinal cord may
have many causes, such as exposure to pesticides * * *'').
b. Consult a physician. In Sec. 101.79(c)(3)(iii), the agency
proposed that a claim could include a statement that women with a
history of a neural tube defect pregnancy should consult their
physicians or health care providers before becoming pregnant. The
agency tentatively concluded that such a statement would encourage such
women to obtain medical guidance and thereby decrease their risk of a
recurrence of a neural tube defect- affected pregnancy. The available
data show that women with a history of a neural tube defect-affected
pregnancy are at very high risk of another affected pregnancy (e.g.,
risk of a recurrence of a neural tube defect pregnancy is significantly
greater than risk of an occurrence of this birth defect). The agency
requested comments on whether provision of such information would be
helpful to consumers.
40. The agency received several comments on this proposed optional
information. All comments that addressed this issue recommended that it
be broadened to include all women rather than only those with a
personal history of a neural tube defect- affected pregnancy. Comments
stated that prenatal care was critical for all women and suggested that
health claims should include a statement that all women planning a
pregnancy should consult a physician or health care provider for
information about adequate diets for their and their babies' health.
Several comments suggested that such a statement be mandatory rather
than optional.
FDA does not believe that it is appropriate, in general, for health
claims to bear statements concerning the need to seek medical advice
for treating the disease or health-related condition mentioned in the
claim. The agency is concerned that the appearance of a statement
concerning the treatment of a disease on the label of a food could
mislead some consumers to believe that the food possesses therapeutic
value for an existing disease or health-related condition (58 FR 2478
at 2514).
The agency originally proposed such a statement regarding women at
recurrent risk of a neural tube defect-affected pregnancy because their
risk of recurrence is very high, and because a specific recommendation
from PHS has been made to such women when they are planning a pregnancy
(i.e., they are advised to take 4 mg folic acid daily under a
physician's supervision; Ref. 52).
Because all comments favored broadening the advice to include all
women, and because the agency recognizes that it is important for all
women to consult a health care provider before becoming pregnant, the
agency is persuaded to modify Sec. 101.79(c)(3)(iii) as suggested in
the comments and to provide for claims to include, in addition to a
statement regarding women at recurrent risk of a neural tube defect, a
statement that all women should consult a health care provider before
becoming pregnant (e.g., ``Women, including those with a history of a
neural tube defect pregnancy, should consult their health care provider
when planning a pregnancy.'').
However, because the length of claims has been consistently a
concern of the comments, the agency is not persuaded that the
information provided for in Sec. 101.79(c)(3)(iii) should be required
in all health claims, as suggested by one comment above. 10. Model
Health Claims
FDA provided several model claims in the proposal that contained
the elements described in its proposal. The agency included these model
claims to
[[Page 8777]]
assist manufacturers in formulating appropriate claims.
a. Toll-free number, pregnancy information symbol.
41. Several comments stated that less detailed model claims were
needed and proposed that the agency establish a toll-free 800 number
through which women could obtain more information or recommended that
the agency devise a uniform pregnancy information symbol for food
labels that would alert women to look for products that bear the
symbol.
The agency agrees that educational information is of great
importance in increasing awareness among women of the need for adequate
nutrition, including adequate folate intake, during their childbearing
years. The agency is considering how best to evaluate consumer
understanding of the health claim and is working with other PHS
agencies to develop strategies to implement the PHS recommendation on
folate intake.
With respect to the use of a pregnancy information symbol, the
agency noted above that many pregnancies are unplanned, and for this
reason, women need to be informed of the need for adequate nutrition
throughout their childbearing years. While a pregnancy symbol might
draw the attention of women who are already pregnant or who might be
planning a pregnancy, it may not be helpful to women whose pregnancies
are unplanned or to women whose pregnancies are too far advanced for
folate intake to alter their risk of giving birth to a neural tube
defect-affected infant. Such a symbol may also discourage other women
from using the product because they do not think they will become
pregnant.
The agency also notes that many of the foods that will bear the
health claim will be consumed by the general population, and the
appearance of a pregnancy symbol on the label might be incorrectly
interpreted by some consumers to mean that the product is specifically
intended for use in pregnancy.
For these reasons, the agency is not persuaded to use a pregnancy
symbol with the health claim.
b. General comments.
42. Many comments criticized the length of the model claims and
their required components. Comments stated that the model messages were
too lengthy and complex and unwieldy, and that therefore manufacturers
would be disinclined to use them. Other comments noted that the claims
included unnecessary disclosures and requested that FDA remove the
requirements relating to the multifactorial nature of neural tube
defects, sources of folate other than dietary supplements, and the
caution statement. Several comments, stating that the model claims were
overly focused on foods, urged the agency to develop a condensed claim
for dietary supplements and suggested that such a claim should not need
to identify other sources of folate or state a maximum daily limit on
intake.
Another comment noted that in formulating the claim, the agency
should be guided by the need to communicate the benefits of increased
folate intake from food sources or dietary supplements, and that the
message must also convey proper cautions, including the fact that
increased folate intake will not prevent all birth defects or even all
neural tube defects. Several comments praised portions of the model
claims that required disclosure of the multifactorial nature of neural
tube defects and the inclusion of information regarding sources of
folate. One comment recommended that claims use the information in the
PHS recommendation, including the warning statement, as closely as
possible. Several comments noted that the model claims were not
educationally strong enough, while others recognized the problem of
providing the guidance that needs to be included in the claim without
having the claim become so long as to be unusable. Some comments
provided examples of shorter claims that they proposed as more
appropriate than the agency's model claims.
As discussed in the proposal and elsewhere in this final rule,
certain information is needed in the health claim, whether for
conventional foods or for dietary supplements, for such claims to be
truthful, scientifically valid, and not misleading to segments of the
population that are not at high risk of having a neural tube defect-
affected pregnancy or for whom no link between folate intake and risk
of neural tube defect-affected pregnancies has been established.
The agency has addressed the issues of mandatory requirements
relating to the multifactorial nature of neural tube defects, sources
of folate other than dietary supplements, and the caution statement in
response to comments 36, 21, and 32, respectively. The agency disagrees
that all of these elements should be removed. Specifically, the agency
has discussed in response to comment 36 why claims shall not imply that
folate intake is the only risk factor for neural tube defects. In
response to comments 28 through 34, the agency explained why a caution
statement is necessary, as well as its reasoning in limiting the
requirement for such a statement to very narrow circumstances. The
agency in response to comments has dropped the requirement that sources
of folate be identified in the claim and instead has provided for
optional inclusion of such information.
The agency also disagrees that its proposed model claims were
overly focused on foods because each of the proposed claims
specifically identified sources of folate as fruits, vegetables, whole
grain products, fortified cereals, and dietary supplements.
The agency rejects the comments that urged it to develop a
condensed claim for dietary supplements and not identify a safe upper
limit of daily intake. Throughout its responses to the comments it
received, the agency has been even-handed in considering conventional
foods and dietary supplements (comments 29 and 32, above). Since
increased folate intake is what is of importance, and since a variety
of dietary sources of folate are available, it would be inconsistent
with the available evidence for the agency to set different
requirements for claims on dietary supplements than for claims on
conventional foods.
Thus, the agency, in developing this final rule, has been guided by
the need to communicate the effects on the risk of neural tube defects
of increased folate intake while providing sufficient cautions to
prevent claims from being misleading and to ensure that they are
scientifically valid.
FDA has modified the model claims to reflect the changes that it
has made in Sec. 101.79 in response to the comments. The agency has
sought to illustrate in the model claims that it is possible to fully
comply with Sec. 101.79 and still produce a claim that uses less than
30 words (see Examples 1 and 2 in Sec. 101.79(d)). The agency also
notes that in response to the petition from the National Food
Processors Association, mentioned above, it is exploring the
possibility of permitting a shortened version of the claim to appear on
the front panel of the food label as long as the full claim appears on
the label. FDA is considering how this can be accomplished while still
ensuring that there is full compliance with section 403 (a) and (r) of
the act. FDA anticipates publishing a proposal on these matters in the
near future.
III. Environmental Impact
The agency has determined under 21 CFR 25.24(a)(11) that this
action is of a type that does not individually or cumulatively have a
significant effect on the human environment. Therefore,
[[Page 8778]]
neither an environmental assessment nor an environmental impact
statement is required.
IV. Economic Impact
FDA has examined the impacts of this final rule to authorize the
use on the labels and in the labeling of conventional food and dietary
supplements of health claims on the relationship between adequate
folate intake and risk of neural tube birth defects as required by
Executive Order 12866 and the Regulatory Flexibility Act. Executive
Order 12866 directs agencies to assess all costs and benefits of
available regulatory alternatives and when regulation is necessary, to
select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety effects;
distributive impacts and equity). The Regulatory Flexibility Act (Pub.
L. 96-654) requires analyzing options for regulatory relief for small
businesses. FDA finds that this final rule is not a significant
regulatory action as defined by Executive Order 12866. In compliance
with the Regulatory Flexibility Act, the agency certifies that the
final rule will not have a significant impact on a substantial number
of small businesses.
On October 14, 1993, FDA published an analysis of the economic
impact of the proposed rule under the previous Executive Order (E.O.
12291). In that analysis, the agency stated that folate health claims
may result in increased demand for products containing folate, and that
an increase in consumption of products containing folate is likely to
result in health benefits in terms of fewer neural tube defects. The
agency also stated that there would be no costs associated with folate
health claims as use of these claims is voluntary.
The agency concluded that it was not able to estimate the number of
products that will bear health claims, or the effect that folate health
claims will have on consumer demand for products containing folate, and
requested comments. As mentioned previously, the agency received nearly
100 comments in response to the proposed rule on health claims for
folate and neural tube defects. None of the comments provided
information that would alter the agency's economic impact conclusion.
V. Collection of Information
This rule contains no collection of information requirements under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et. seq.).
VI. References
The following information has been placed on display in the Dockets
Management Branch (address above) and may be seen by interested persons
between 9 a.m. and 4 p.m. Monday through Friday.
1. Food and Nutrition Board, National Research Council, National
Academy of Sciences, 1980, Recommended Dietary Allowances, 9th
revised edition, 1980, Washington, DC, pp. 106-113.
2. Flood, T., M. Brewster, and J. Harris, et al., ``Spina Bifida
Incidence at Birth--United States, 1983-1990,'' Morbidity and
Mortality Weekly Report, 41(27); 497-500, 1992.
3. Maternal and Child Health Bureau, Health Resources and Services
Administration, Public Health Service, Lin-Fu, J.S., and M.A.
Anthony, ``Folic Acid and Neural Tube Defects: A Fact Sheet for
Health Care Providers,'' May 1993.
4. Elwood, J.M., and J.H. Elwood, ``Epidemiology of Anencephalus and
Spina Bifida,'' Oxford University Press, 1980.
5. Department of Health and Human Services, Public Health Service,
``Recommendations for the Use of Folic Acid to Reduce the Number of
Cases of Spina Bifida and Other Neural Tube Defects,'' Morbidity and
Mortality Weekly Report, 41/No. RR-14, pp. 1-7, September 11, 1992.
6. Briefing Material, Folic Acid Subcommittee Meeting, April 15,
1993.
7. Folic Acid Subcommittee/Food Advisory Committee Meeting, April
15-16, 1993, Transcript.
8. Folic Acid Subcommittee/Food Advisory Committee, October 14-15,
1993, Transcript.
9. LSRO/FASEB (1994), ``Assessment of Folate Methodology Used in the
Third National Health and Nutrition Examination Survey (NHANES III,
1988-1991),'' Bethesda, MD.
10. Mulinare, J., J.F. Cordero, J.D. Erickson, and R.J. Berry,
``Periconceptional Use of Multivitamins and the Occurrence of Neural
Tube Defects,'' Journal of the American Medical Association,
260:3141-3145, 1988.
11. Milunsky, A., H. Jick, S.S. Jick, et al., ``Multivitamin/Folic
Acid Supplementation in Early Pregnancy Reduces the Prevalence of
Neural Tube Defects,'' Journal of the American Medical Association,
262:2847-2852, 1989.
12. Mills, J.L., G.G. Rhoads, J.L. Simpson, et al., ``The Absence of
a Relation Between the Periconceptional use of Vitamins and Neural
Tube Defects,'' New England Journal of Medicine, 321:430-435, 1989.
13. Werler, M.M., S. Shapiro, and A.A. Mitchell, ``Periconceptional
Folic Acid Exposure and Risk of Occurrent Neural Tube Defects,''
Journal of the American Medical Association, 269:1257-1261, 1993.
14. Wald, N., ``Prevention of Neural Tube Defects: Results of the
Medical Research Council Vitamin Study,'' Lancet, 338:131-137, 1991;
and Editorial, ``Folic Acid and Neural Tube Defects,'' Lancet,
338:153-154, 1991.
15. Czeizel, A. E., and I. Dudas, ``Prevention of the First
Occurrence of Neural-tube Defects by Periconceptional Vitamin
Supplementation,'' New England Journal of Medicine, 327, 1832-1835,
1992.
16. Bower, C., and F. J. Stanley, ``Dietary Folate as a Risk Factor
for Neural Tube Defects: Evidence from a Case-control Study in
Western Australia,'' Medical Journal of Australia, 150:1257-1261,
1989.
17. Laurence, K. M., ``Dietary Approaches to the Prevention of
Neural Tube Defects,'' Nutrition and Health, 2:181-189, 1983.
18. Shils, M. E., J. A. Olson, and M. Shike, In: Modern Nutrition in
Health and Disease, pp. 412-413, Lea and Febiger, Philadelphia,
1994.
19. Combs, G. F., In: The Vitamins: Fundamental Aspects in Nutrition
and Health, pp. 359-360, Academic Press, New York, 1992.
20. Transcript of Meeting, July 27, 1992, CDC, Atlanta, GA, comment
no. supp.1. to docket 91N-0100, August 8, 1992.
21. Seller, M. J., and N. C. Nevin, ``Vitamins and Neural Tube
Defects, Letter to the Editor,'' Journal of the American Medical
Association, 263:2749, 1990.
22. Memo to File from Nancy Crane ``Food Sources of Folate,'' August
31, 1993.
23. Centers for Disease Control, ``Use of Folic Acid for Prevention
of Spina Bifida and Other Neural Tube Defects,'' 1983-1991,
Morbidity and Mortality Weekly Report, 40(30): 513-516, August 2,
1991.
24. Health Protection Branch, Health and Welfare Canada, Ottawa,
Ontario, Canada, ``Issues: Folic Acid, The Vitamin That Helps
Protect Against Neural Tube (Birth) Defects,'' April 2, 1993.
25. March of Dimes, 1994.
26. Centers for Disease Control, Transcript of Meeting, Atlanta, GA,
August 12, 1993; ``Surveillance for Possible Adverse Effects of
Folic Acid Consumption.''
27. Sanders, T. A. B., and S. Reddy, ``Vegetarian Diets and
Children,'' American Journal of Clinical Nutrition, 59:5(S):1176S-
1181S, 1994.
28. Herbert, V., ``Staging Vitamin B12 (Cobalamin) Status in
Vegetarians,'' American Journal of Clinical Nutrition,
59:5(S):1213S-1221S, 1994.
29. Ross, F. J., H. Belding, and B. L. Paegel, ``The Development and
Progression of Subacute Combined Degeneration of the Spinal Cord in
Patients with Pernicious Anemia Treated with Synthetic
Pteroylglutamic (Folic) Acid,'' Blood, 3:68-90, 1948.
30. Davidson, L. S. P., and R. H. Girdwood, ``Folic Acid as
Therapeutic Agent,'' British Medical Journal, 1:587-591, 1947.
31. Hansen, H. A., and A. Weinfeld, ``Metabolic Effects and
Diagnostic Value of Small Doses of Folic Acid and B12 in
Megaloblastic Anemias,'' Acta Medica Scandinavica, 172:427-443,
1962.
[[Page 8779]]
32. Allen, R. H., S. P. Stabler, D. G. Savage, and J. Lindenbaum,
``Diagnosis of Cobalamin Deficiency.I. Usefulness of Serum
Methylmalonic Acid and Total Homocysteine Concentrations,'' American
Journal of Hematology, 34:90-98, 1990.
33. Stambolian, D., and M. Behrens, ``Optic Neuropathy Associated
with Vitamin B12 Deficiency,'' American Journal of
Ophthalmology, 83:465-468, 1977.
34. Cooper B. A., and T. Abe, ``Variable Response of Bone Marrow to
Feeding DL-5- formyltetrahydrofolate in Pernicious Anemia,'' British
Journal of Haematology, 32:387-394, 1976.
35. Ellison, A. B. Curry, ``Pernicious Anemia Masked by
Multivitamins Containing Folic Acid,'' Journal of the American
Medical Association, 173:240-243, 1960.
36. Challenger, W. A., and D. R. Korst, ``Pitfalls in the Diagnosis
and Treatment of Pernicious Anemia,'' American Journal of the
Medical Sciences, 134:226-231, 1960.
37. Victor, M., and A. A. Lear, ``Subacute Combined Degeneration of
the Spinal Cord,'' American Journal of Medicine, 20:896- 911, 1956.
38. Baldwin, J. N., and D. J. Dalessio, ``Folic Acid Therapy and
Spinal-cord Degeneration in Pernicious Anemia,'' New England Journal
of Medicine, 264:1339-1342, 1961.
39. Vilter, R. W., J. J. Will, T. Wright, and D. Rullman,
``Interrelationships of Vitamin B12, Folic Acid, and Ascorbic
Acid in the Megaloblastic Anemias,'' American Journal of Clinical
Nutrition, 12:130-144, 1963.
40. Marshall, R. A., and J. H. Jandl, ``Responses to `Physiologic'
Doses of Folic Acid in the Megaloblastic Anemias,'' Archives of
Internal Medicine, 105:352-360, 1960.
41. Chosy, J. J., D. V. Clatanoff, and R. F. Schilling, ``Responses
to Small Doses of Folic Acid in Pernicious Anemia,'' American
Journal of Clinical Nutrition, 10:349-350, 1962.
42. Hansen, H. A., and A. Weinfeld, ``Metabolic Effects and Diagno
Stic Value of Small Doses of Folic Acid and B12 in
Megaloblastic Anemias,'' Acta Medica Scandinavica, 172:427-443,
1962.
43. Institute of Medicine, National Academy of Sciences, ``Nutrition
During Pregnancy,'' National Academy Press, Washington, DC, 1990.
44. Lindenbaum, J., I. H. Rosenberg, Peter W. F. Wilson, S. P.
Stabler, and R. H. Allen, ``Prevalence of Cobalamin Deficiency in
the Framingham Elderly Population,'' American Journal of Clinical
Nutrition, 60:2-11, 1994.
45. Hathcock, J., and G. Troendle, ``Oral Cobalamin for Treatment of
Pernicious Anemia,'' Journal of the American Medical Association,
265:96-97, 1991.
46. Mooij, P. N. M., R. P. M. Steegers- Theunissen, C. M. G. Thomas,
W. H. Doesburg, and T. K. A. B. Eskes, ``Periconceptional Vitamin
Profiles Are Not Suitable for Identifying Women at Risk for Neural
Tube Defects,'' Journal of Nutrition, 123:197-203, 1993.
47. Mills, J. L., J. M. McPartlin, P. N. Kirke, Y. J. Lee, M. R.
Conley, D. G. Weir, and J. M. Scott, ``Impaired Homocysteine
Metabolism in Pregnancies Complicated by Neural Tube Defects,''
Lancet, 345:149-151, 1995.
48. Chambers, J. B., Norman W. Klein, P. G. Nosel, L. H. Khairallah,
and James S. Romanow, ``Methionine Overcomes Neural Tube Defects in
Rat Embryos Cultured on Sera from Laminin-immunized Monkeys,''
Journal of Nutrition, 125:1587-1599, 1995.
49. Shaw, G. M., N. G. Jensvold, C. R. Wasserman, and E. J. Lammer,
``Epidemiologic Characteristics of Phenotypically Distinct Neural
Tube Defects Among 0.7 million California Births, 1983-1987,''
Teratology, 49:143-149, 1994.
50. Shaw, G. M., D. S. Schaffer, E. M. Velie, K. Morland, and J. A.
Harris, ``Periconceptional Vitamin Use, Dietary Folate, and the
Occurrence of Neural Tube Defects,'' Epidemiology, 6:219-226, 1995.
51. Kirke, P. N., A. M. Molloy, L. E. Daly, H. Burke, D. G. Weir,
and J. M. Scott ``Maternal Plasma Folate and Vitamin B12 Are
Independent Risk Factors for Neural Tube Defects,'' Quarterly
Journal of Medicine, 86:703-708, 1993.
52. Centers for Disease Control, ``Use of Folic Acid for Prevention
of Spina Bifida and Other Neural Tube Defects; 1983-1991,''
Morbidity and Mortality Weekly Report, 40(30):513-516, August 2,
1991.
53. Department of Health and Human Services, Public Health Service,
``Knowledge and Use of Folic Acid by Women of Childbearing Age--
United States, 1995,'' Morbidity and Mortality Weekly Report, 44/No.
R38, pp. 716-718, September 29, 1995.
54. Levy, A., ``Report on Health Claims Focus Groups,'' June 15,
1995.
List of Subjects in 21 CFR Part 101
Food labeling, Nutrition, Reporting and recordkeeping requirements.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
the authority delegated to the Commissioner of Food and Drugs, 21 CFR
part 101 is amended as follows:
PART 101--FOOD LABELING
1. The authority citation for 21 CFR part 101 continues to read as
follows:
Authority: Secs. 4, 5, 6 of the Fair Packaging and Labeling Act
(15 U.S.C. 1453, 1454, 1455); secs. 201, 301, 402, 403, 409, 701 of
the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321, 331, 342,
343, 348, 371).
2. Section 101.9 Nutrition labeling of food is amended in paragraph
(c)(8)(v) by revising the entry for folate to read as follows:
Sec. 101.9 Nutrition labeling of food.
* * * * *
(c) * * *
(8) * * *
(v) * * *
Folate--either Folic acid or Folacin may be used.
* * * * *
Sec. 101.36 [Amended]
3. Section 101.36 Nutrition labeling of dietary supplements of
vitamins and minerals is amended in paragraph (b)(3)(v) by removing the
words ``folate (folacin),'' and by adding in their place the words
``folate--either folic acid or folacin may be used.''
4. Section 101.79 is revised to read as follows:
Sec. 101.79 Health claims: Folate and neural tube defects.
(a) Relationship between folate and neural tube defects--(1)
Definition. Neural tube defects are serious birth defects of the brain
or spinal cord that can result in infant mortality or serious
disability. The birth defects anencephaly and spina bifida are the most
common forms of neural tube defects and account for about 90 percent of
these defects. These defects result from failure of closure of the
covering of the brain or spinal cord during early embryonic
development. Because the neural tube forms and closes during early
pregnancy, the defect may occur before a woman realizes that she is
pregnant.
(2) Relationship. The available data show that diets adequate in
folate may reduce the risk of neural tube defects. The strongest
evidence for this relationship comes from an intervention study by the
Medical Research Council of the United Kingdom that showed that women
at risk of recurrence of a neural tube defect pregnancy who consumed a
supplement containing 4 milligrams (mg)(4,000 micrograms (mcg)) folic
acid daily before conception and continuing into early pregnancy had a
reduced risk of having a child with a neural tube defect. (Products
containing this level of folic acid are drugs). In addition, based on
its review of a Hungarian intervention trial that reported
periconceptional use of a multivitamin and multimineral preparation
containing 800 mcg (0.8 mg) of folic acid, and its review of the
observational studies that reported periconceptional use of
multivitamins containing 0 to 1,000 mcg of folic acid, the Food and
Drug Administration concluded that most of these studies had results
consistent with the conclusion that folate, at levels attainable in
usual diets, may reduce the risk of neural tube defects.
(b) Significance of folate--(1) Public health concern. Neural tube
defects
[[Page 8780]]
occur in approximately 0.6 of 1,000 live births in the United States
(i.e., approximately 6 of 10,000 live births; about 2,500 cases among 4
million live births annually). Neural tube defects are believed to be
caused by many factors. The single greatest risk factor for a neural
tube defect-affected pregnancy is a personal or family history of a
pregnancy affected with a such a defect. However, about 90 percent of
infants with a neural tube defect are born to women who do not have a
family history of these defects. The available evidence shows that
diets adequate in folate may reduce the risk of neural tube defects but
not of other birth defects.
(2) Populations at risk. Prevalence rates for neural tube defects
have been reported to vary with a wide range of factors including
genetics, geography, socioeconomic status, maternal birth cohort, month
of conception, race, nutrition, and maternal health, including maternal
age and reproductive history. Women with a close relative (i.e.,
sibling, niece, nephew) with a neural tube defect, those with insulin-
dependent diabetes mellitus, and women with seizure disorders who are
being treated with valproic acid or carbamazepine are at significantly
increased risk compared with women without these characteristics. Rates
for neural tube defects vary within the United States, with lower rates
observed on the west coast than on the east coast.
(3) Those who may benefit. Based on a synthesis of information from
several studies, including those which used multivitamins containing
folic acid at a daily dose level of 400 mcg (0.4
mg), the Public Health Service has inferred that folate alone at levels
of 400 mcg (0.4 mg) per day may reduce the risk of neural tube defects.
The protective effect found in studies of lower dose folate measured by
the reduction in neural tube defect incidence, ranges from none to
substantial; a reasonable estimate of the expected reduction in the
United States is 50 percent. It is expected that consumption of
adequate folate will avert some, but not all, neural tube defects. The
underlying causes of neural tube defects are not known. Thus, it is not
known what proportion of neural tube defects will be averted by
adequate folate consumption. From the available evidence, the Public
Health Service estimates that there is the potential for averting 50
percent of cases that now occur (i.e., about 1,250 cases annually).
However, until further research is done, no firm estimate of this
proportion will be available.
(c) Requirements. The label or labeling of food may contain a
folate/neural tube defect health claim provided that:
(1) General requirements. The health claim for a food meets all of
the general requirements of Sec. 101.14 for health claims, except that
a food may qualify to bear the health claim if it meets the definition
of the term ``good source.''
(2) Specific requirements--(i) Nature of the claim--(A)
Relationship. A health claim that women who are capable of becoming
pregnant and who consume adequate amounts of folate daily during their
childbearing years may reduce their risk of having a pregnancy affected
by spina bifida or other neural tube defects may be made on the label
or labeling of food provided that:
(B) Specifying the nutrient. In specifying the nutrient, the claim
shall use the terms ``folate,'' ``folic acid,'' ``folacin,'' ``folate,
a B vitamin,'' ``folic acid, a B vitamin,'' or ``folacin, a B
vitamin.''
(C) Specifying the condition. In specifying the health- related
condition, the claim shall identify the birth defects as ``neural tube
defects,'' ``birth defects spina bifida or anencephaly,'' ``birth
defects of the brain or spinal cord anencephaly or spina bifida,''
``spina bifida and anencephaly, birth defects of the brain or spinal
cord,'' ``birth defects of the brain or spinal cord;'' or ``brain or
spinal cord birth defects.''
(D) Multifactorial nature. The claim shall not imply that folate
intake is the only recognized risk factor for neural tube defects.
(E) Reduction in risk. The claim shall not attribute any specific
degree of reduction in risk of neural tube defects from maintaining an
adequate folate intake throughout the childbearing years. The claim
shall state that some women may reduce their risk of a neural tube
defect pregnancy by maintaining adequate intakes of folate during their
childbearing years. Optional statements about population-based
estimates of risk reduction may be made in accordance with paragraph
(c)(3)(vi) of this section.
(F) Safe upper limit of daily intake. Claims on foods that contain
more than 100 percent of the Daily Value (DV) (400 mcg) when labeled
for use by adults and children 4 or more years of age, or 800 mcg when
labeled for use by pregnant or lactating women) shall identify the safe
upper limit of daily intake with respect to the DV. The safe upper
limit of daily intake value of 1,000 mcg (1 mg) may be included in
parentheses.
(G) The claim. The claim shall not state that a specified amount of
folate per serving from one source is more effective in reducing the
risk of neural tube defects than a lower amount per serving from
another source.
(H) The claim shall state that folate needs to be consumed as part
of a healthful diet.
(ii) Nature of the food--(A) Requirements. The food shall meet or
exceed the requirements for a ``good source'' of folate as defined in
Sec. 101.54;
(B) Dietary supplements. Dietary supplements shall meet the United
States Pharmacopeia (USP) standards for disintegration and dissolution,
except that if there are no applicable USP standards, the folate in the
dietary supplement shall be shown to be bioavailable under the
conditions of use stated on the product label.
(iii) Limitation. The claim shall not be made on foods that contain
more than 100 percent of the RDI for vitamin A as retinol or preformed
vitamin A or vitamin D per serving or per unit.
(iv) Nutrition labeling. The nutrition label shall include
information about the amount of folate in the food. This information
shall be declared after the declaration for iron if only the levels of
vitamin A, vitamin C, calcium, and iron are provided, or in accordance
with Sec. 101.9 (c)(8) and (c)(9) if other optional vitamins or
minerals are declared.
(3) Optional information--(i) Risk factors. The claim may
specifically identify risk factors for neural tube defects. Where such
information is provided, it may consist of statements from
Sec. 101.79(b)(1) or (b)(2) (e.g., Women at increased risk include
those with a personal history of a neural tube defect-affected
pregnancy, those with a close relative (i.e., sibling, niece, nephew)
with a neural tube defect; those with insulin-dependent diabetes
mellitus; those with seizure disorders who are being treated with
valproic acid or carbamazepine) or from other parts of this paragraph
(c)(3)(i).
(ii) Relationship between folate and neural tube defects. The claim
may include statements from paragraphs (a) and (b) of this section that
summarize the relationship between folate and neural tube defects and
the significance of the relationship except for information
specifically prohibited from the claim.
(iii) Personal history of a neural tube defect-affected pregnancy.
The claim may state that women with a history of a neural tube defect
pregnancy should consult their physicians or health care providers
before becoming pregnant. If such a statement is provided, the claim
shall also state that all women should consult a health care provider
when planning a pregnancy.
(iv) Daily value. The claim may identify 100 percent of the DV
(100% DV; 400 mcg) for folate as the target intake goal.
[[Page 8781]]
(v) Prevalence. The claim may provide estimates, expressed on an
annual basis, of the number of neural tube defect-affected births among
live births in the United States. Current estimates are provided in
Sec. 101.79(b)(1), and are approximately 6 of 10,000 live births
annually (i.e., about 2,500 cases among 4 million live births
annually). Data provided in Sec. 101.79(b)(1) shall be used, unless
more current estimates from the U.S. Public Health Service are
available, in which case the latter may be cited.
(vi) Reduction in risk. An estimate of the reduction in the number
of neural tube defect-affected births that might occur in the United
States if all women consumed adequate folate throughout their
childbearing years may be included in the claim. Information contained
in paragraph (b)(3) of this section may be used. If such an estimate
(i.e., 50 percent) is provided, the estimate shall be accompanied by
additional information that states that the estimate is population-
based and that it does not reflect risk reduction that may be
experienced by individual women.
(vii) Diets adequate in folate. The claim may identify diets
adequate in folate by using phrases such as ``Sources of folate include
fruits, vegetables, whole grain products, fortified cereals, and
dietary supplements.'' or ``Adequate amounts of folate can be obtained
from diets rich in fruits, dark green leafy vegetables, legumes, whole
grain products, fortified cereals, or dietary supplements.'' or
``Adequate amounts of folate can be obtained from diets rich in fruits,
including citrus fruits and juices, vegetables, including dark green
leafy vegetables, legumes, whole grain products, including breads,
rice, and pasta, fortified cereals, or a dietary supplement.''
(d) Model health claims. The following are examples of model health
claims that may be used in food labeling to describe the relationship
between folate and neural tube defects:
(1) Examples 1 and 2. Model health claims appropriate for foods
containing 100 percent or less of the DV for folate per serving or per
unit (general population). The examples contain only the required
elements:
(i) Healthful diets with adequate folate may reduce a woman's risk
of having a child with a brain or spinal cord birth defect.
(ii) Adequate folate in healthful diets may reduce a woman's risk
of having a child with a brain or spinal cord birth defect.
(2) Example 3. Model health claim appropriate for foods containing
100 percent or less of the DV for folate per serving or per unit. The
example contains all required elements plus optional information: Women
who consume healthful diets with adequate folate throughout their
childbearing years may reduce their risk of having a child with a birth
defect of the brain or spinal cord. Sources of folate include fruits,
vegetables, whole grain products, fortified cereals, and dietary
supplements.
(3) Example 4. Model health claim appropriate for foods intended
for use by the general population and containing more than 100 percent
of the DV of folate per serving or per unit: Women who consume
healthful diets with adequate folate may reduce their risk of having a
child with birth defects of the brain or spinal cord. Folate intake
should not exceed 250% of the DV (1,000 mcg).
Dated: February 26, 1996.
David A. Kessler,
Commissioner of Food and Drugs.
Donna E. Shalala,
Secretary of Health and Human Services.
[FR Doc. 96-5013 Filed 2-29-96; 1:12 pm]
BILLING CODE 4160-01-P
Complete official Federal Register PDF
FR Doc. 96-5012 Food Additives Permitted for Direct Addition to Food for Human Consumption; Folic Acid (Folacin)
[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Pages 8797-8807]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5012]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
21 CFR Part 172
[Docket No. 91N-100F]
Food Additives Permitted for Direct Addition to Food for Human
Consumption; Folic Acid (Folacin)
AGENCY: Food and Drug Administration, HHS.
ACTION: Final rule.
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SUMMARY: The Food and Drug Administration (FDA) is amending the food
additive regulations to provide for the safe use of folic acid in foods
that are the subject of a standard of identity that requires the
addition of folic acid; to provide for its addition to breakfast
cereals on a per serving basis; to permit its use in infant formulas,
medical foods, and foods for special dietary use; and to incorporate
specifications for folic acid consistent with those in the Food
Chemicals Codex. This action is being taken to ensure that the amount
of folic acid that all segments of the population are reasonably
expected to consume is safe under the Federal Food, Drug, and Cosmetics
Act (the act) and to implement Public Health Service's (PHS)
recommendation to increase folic acid intake by women of childbearing
age, thereby reducing the risk of pregnancies affected by neural tube
defects (NTD's).
DATES: Effective March 5, 1996; written objections and requests for a
hearing by April 4, 1996. The Director of the Office of the Federal
Register approves the incorporation by reference in accordance with 5
U.S.C. 552(a) and 1 CFR part 51 of a certain publication in 21 CFR
103.35(d)(3)(v), effective March 5, 1996.
ADDRESSES: Submit written objections to the Dockets Management Branch
(HFA-305), Food and Drug Administration, 12420 Parklawn Dr., rm. 1-23,
Rockville, MD 20857.
FOR FURTHER INFORMATION CONTACT: Dennis M. Keefe, Center for Food
Safety and Applied Nutrition (HFS-206), Food and Drug Administration,
200 C St. SW., Washington, DC 20204, 202-418-3090.
SUPPLEMENTARY INFORMATION:
I. Background
In the Federal Register of October 14, 1993 (58 FR 53312), FDA
proposed to amend the regulation that establishes safe conditions of
food use for folic acid, Sec. 172.345 (21 CFR 172.345)). In the
proposed rule, which was entitled ``Food Additives Permitted for Direct
Addition to Food for Human Consumption; Folic Acid (Folacin),'' FDA
said that it intended to amend Sec. 172.345 to: (1) Set limitations on
the use of folic acid on a per serving basis, in accord with the
Nutrition Labeling and Education Act of 1990; (2) allow for the
addition of folic acid in foods for which standards of identity exist,
where such standards permit the addition of folic acid; (3) restrict to
breakfast cereals the foods for which standards of identity do not
exist, to which folic acid may be added; (4) continue to permit the use
of folic acid in infant formulas, dietary supplements, and foods for
special dietary use; and (5) incorporate specifications for folic acid
consistent with those in the Food Chemicals Codex.
Interested persons were given until December 13, 1993, to comment
on the proposal. FDA received 59 letters, each containing one or more
comments, from consumers, members of the Folic Acid Subcommittee of
FDA's Food Advisory Committee, the United States Pharmacopeial
Convention, Inc., consumer interest groups, food manufacturers, trade
associations, and dietary supplement manufacturers. Most comments
generally supported the proposed amendments. Some comments suggested
modifications of various provisions of the proposed rule or requested
clarification of certain issues. A number of comments were received
that were more appropriate to other dockets, and these were forwarded
to the appropriate dockets (Docket Nos. 91N-100H or 91N-100S) for
response. A summary of the comments and the agency's responses are
presented in section II of this document.
II. Comments to the Proposal
A. Safe Upper Limit
As part of FDA's implementation of the PHS recommendation that
women of childbearing age consume 400 micrograms (g) of folic
acid per day to reduce their risk of a pregnancy affected by an NTD
(Ref. 1), FDA initiated this proceeding, as well as a rulemaking to
authorize a health claim on the relationship between folate and NTD's
and a rulemaking to require the addition of folic acid to certain
standardized cereal-grains. As part of FDA's rulemaking to authorize a
folate health claim, the agency found it necessary to address the issue
of the safe upper limit of daily folate intake. In the health claim
proceeding, FDA was confronted with all of the issues related to a safe
upper limit that have been presented in this proceeding. Thus, FDA's
response to the comments that addressed the safe upper limit for folic
acid intake in the present rulemaking draws largely on the agency's
response to similar comments as laid out in a final rule authorizing a
[[Page 8798]]
health claim about the relationship of folate and neural tube defects
published elsewhere in this issue of the Federal Register.
The agency's overriding goal in this food additive rulemaking is to
ensure that the amount of folic acid that all segments of the
population are reasonably expected to consume is safe under section
409(c)(3)(A) and (c)(5)(A) of the act (21 U.S.C. 348(c)(3)(A) and
(c)(5)(A)), while concurrently aiding compliance with the PHS
recommendation on folate and NTD's by increasing the folate content of
the U.S. food supply.
The agency noted in the final folate health claim rule of January
6, 1993 (58 FR 2606 at 2612), and the folate health claim final rule
published elsewhere in this issue of the Federal Register, that there
may be risks attendant upon increased consumption of folate for some
groups in the population. At the present time, the potential adverse
effect for which there is the most evidence is a masking of anemia in
persons with vitamin B12 deficiency, while severe and irreversible
neurologic damage may progress. There is currently no way to determine
how many persons in the general U.S. population have undiagnosed
vitamin B12 deficiency, and thus, how many are potentially at risk
of developing pernicious anemia. However, marginal vitamin B12
nutritional status is not uncommon in the U.S. population (58 FR 53254
at 53266 to 53268), and it is observed not only in persons with
pernicious anemia from an inability to absorb dietary vitamin B12
but also in approximately 10 to 20 percent of elderly persons, more
than 25 percent of demented patients, 15 to 20 percent of acquired
immune deficiency syndrome (AIDS) patients, and 15 to 20 percent of
patients with malignant diseases.
The agency further noted that other groups may be at risk from
excessive intakes of folate. These other groups include pregnant women
(with the potential for high levels of free folic acid affecting the
embryo during early gestation) and persons on medications (the
effectiveness of which could be adversely affected by high dietary
folate intakes) used in the treatment of various cancers, psoriasis,
rheumatoid arthritis, and bronchial asthma). Throughout its folate
rulemaking proceedings, FDA evaluated the safety of high intakes of
folate for all of these potentially at-risk groups. In its folate
health claim final rule published elsewhere in this issue of the
Federal Register, the agency described how it had reached its decision
that 1 mg of total folate per day was the safe upper limit of intake.
In the folate health claim proposed rule (58 FR 53254, October 14,
1993), the agency provided data demonstrating the difficulty of
concurrently achieving the PHS recommended increase in folate intake
for all women of childbearing age without raising folate intakes of
other segments of the population to unsafe levels. Thus, the agency
recognized the significance of the proposed upper limit for daily
folate intake in limiting the ability of fortification of the food
supply alone to enable all women of child-bearing age to achieve the
PHS recommendation on folate intake. The agency also noted that there
is a general paucity of evidence on the safety of daily folate intakes
above 1,000 g (1 mg). Therefore, in the folate food additive
proposal, FDA specifically requested comments and data on the use of 1
mg per day total folate as a safe upper limit for establishing
restrictions on food additive uses of folic acid. FDA further noted
that the 1 mg daily safe upper limit for folate intake may need to be
modified if data became available to support such a decision. Several
comments supported FDA's tentative conclusion of 1 mg total dietary
folate per day as the safe upper limit because they felt that the 1 mg
per day limit is based on the best available data. As described below,
other comments felt that this level was either too high or too low.
1. Folate intakes of 1 mg or Less Daily
Several comments contended that current scientific knowledge is
insufficient to set the safe upper limit at 1 mg folate per day, and
that perhaps the safe upper limit may actually be lower than 1 mg
folate per day. These comments cited published studies suggesting that
500 g folic acid per day may mask the anemia of vitamin
B12 deficiency and urged that FDA set the safe upper limit below
500 g folic acid per day. None of the commenters provided any
new data to support their arguments.
FDA disagrees with those comments that contended that the safe
upper limit of intake of 1 mg folate daily is too high, and that the
limit should be set at a lower level. In its proposed folate health
claim rule (58 FR 53254 at 53266 to 53270, October 14, 1993), FDA
stated that it was aware that several published case reports suggest
that there is evidence of masking of pernicious anemia in patients who
consumed supplements that provided less than 1 mg folic acid daily. FDA
was also aware of limited reports of masking of the anemia of vitamin
B12 deficiency at levels as low as 250 g folic acid
daily. These reports were the basis for the agency's amendment, in the
Federal Register of October 17, 1980, to its drug regulation on the
therapeutic uses of folic acid (45 FR 69043 at 69044). In that
instance, the agency required that the labeling of oral and parenteral
preparations of folic acid include a ``Precautions'' statement that
``Folic acid in doses above 0.1 mg daily may obscure pernicious anemia
in that hematologic remission can occur while neurological
manifestations remain progressive'' (see discussion in proposed health
claims rule, 58 FR 53254 at 53257, October 14, 1993).
FDA, as part of its review of the scientific literature and its
discussions with the Folic Acid Subcommittee, carefully considered the
reports of masking at relatively low levels of folate. In its folate
health claim proposal, FDA noted that the effects of intakes of less
than 1 mg are infrequent, suboptimal, and less predictable than those
occurring at higher intakes (58 FR 53254 at 53267, October 14, 1993).
A safe upper limit of daily folate intake of 1 mg for persons with
vitamin B12 deficiency was discussed by experts during a Centers
for Disease Control and Prevention (CDC) workshop on surveillance for
adverse effects of increased folic acid intakes. Those experts stated
that there was little likelihood of problems at daily intakes lower
than 1 mg (Ref. 2).
Most commenters with expertise in folate and vitamin B12
metabolism and nutrition also supported a safe upper limit of 1 mg
folate daily based on their scientific knowledge and clinical
experiences (see folate health claim final rule published elsewhere in
this issue of the Federal Register). Moreover, a safe upper limit of 1
mg folate daily is consistent with the current Reference Daily Intakes
(RDI's) for folate (i.e., 400 g daily for the general
population and 800 g daily for pregnant women, levels that
were the same as the U.S. RDA's that were used as early standards for
nutrition labeling (Ref. 3)) and is consistent with the 1992 PHS
recommendation for women of child-bearing age (Ref. 1).
Therefore, FDA concludes that for those with vitamin B12
deficiency, there is little likelihood of problems if daily folate
intakes are 1 mg or less. Moreover, FDA received no comments that
disagreed with the agency's tentative conclusions that daily folate
intakes of 1 mg or less are safe for pregnant women and for persons on
medications whose effectiveness could be adversely affected by high
folate intakes. Thus, FDA concludes that there is a reasonable
certainty of no harm from a daily intake of up to 1 mg folate.
[[Page 8799]]
2. Folate Intakes Above 1 mg Daily
Other comments asserted that FDA's tentative conclusion of a safe
upper limit of intake of 1 mg daily was too low. These comments
contended that there is no evidence that folic acid intakes of 1.5 to 2
mg per day would result in any untoward effects and recommended that
FDA set the safe upper limit at 1.5 to 2 mg folic acid per day. Another
comment opined that setting the safe upper limit for folate intake at 1
mg per day is ``arbitrary'' and ``paranoid.'' One comment claimed that
the 1 mg limit is inappropriate because it is not based on substantive
medical data. Several comments claimed that there is no evidence to
suggest that folic acid doses at 1 mg per day are toxic. One comment
argued that ``[t]here is no toxicity for folic acid per se,'' and that
``[t]he fact one mg. is needed to treat megaloblastic anemia really
represents a floor. It does not speak to the intakes of Americans from
food and fortification and supplements. Because Americans are laggards
in their intake, a relative ceiling of 2 mgs. is not likely to be
reached.'' This comment argued that, because the food bioavailability
of folacin is fair but not excellent, fortificant and supplement
intakes of folic acid are not likely to exceed one mg. None of these
comments provided data to support their views.
Several comments focused on the safety of high folate intakes for
pregnant women. These comments suggested that concerns about the safety
of high intakes of folate in pregnant women were unfounded. In support
of this contention one comment claimed that ``* * * millions of
pregnant women have safely consumed prenatal vitamins with 1 mg of
folic acid in addition to their diet over the past 15-20 years.''
Several comments questioned why FDA set the safe upper limit at 1 mg
per day while the United Kingdom (UK) was recommending a much higher
limit of 5 mg folic acid per day.
Other comments focused on FDA's concern about the absence of data
on safe use for persons with marginal vitamin B12 nutritional
status. One comment asserted that FDA overstated the issue of the
masking of B12 deficiency by folate. Another comment claimed that
a hematologic response to folic acid in dosages between 1 mg and 5 mg
per day appears to occur in persons with clinical vitamin B12
deficiency, but the frequency, magnitude, and duration of this response
is unknown. The comment also stated that it is not known whether this
hematological response could lead to a delay in the diagnosis of
vitamin B12 deficiency. While agreeing that the masking of
pernicious anemia is a concern, these comments argued that there is
evidence that a substantial proportion of persons with pernicious
anemia do not present with anemia before neurological symptoms.
Therefore, these comments argued, these individuals would suffer the
effects of undiagnosed pernicious anemia with or without folic acid
supplementation. These comments did not provide any new data to support
their view.
In proposing the safe upper limit at 1 mg folate per day, FDA
carefully considered the available evidence on the safety for all
segments of the population that might be placed at risk if folate
intakes were to become excessively high. In response to the proposal,
the agency did not receive any comments that provided data relating to
the safety of long-term intakes of folate at levels above 1 mg per day
for any of the groups considered at potential risk from increased
intakes. FDA notes that both the Folic Acid Subcommittee and the Food
Advisory Committee expressed concerns about the lack of information to
support the safety of long-term daily intakes at levels above 1 mg
(Ref. 4). The Food Advisory Committee also expressed concern about the
lack of information on the size of the population potentially at risk
from increased intakes of folate.
The agency is not aware of data that establish the safety of long-
term intakes of folate above 1 mg per day. The absence of any data
allowing systematic evaluation of intakes above this level means that
potential risks and at-risk groups cannot be adequately defined or
described. FDA notes that most folate and vitamin B12 experts
submitting comments were concerned about the lack of documentation of
safety of long-term daily intakes of folate above the level of 1 mg per
day. In addition to expressing safety concerns regarding those with low
vitamin B12 status, experts cited uncertainties about the effects
of increased folate intakes by young children and the unknown
physiological significance of circulating free folic acid in the blood,
particularly in pregnant women. In its folate health claim proposed
rule (58 FR 53254 at 53269, October 14, 1993), the agency summarized
evidence from the scientific literature that high levels of free folic
acid are not normally found in the circulation, and that folic acid is
concentrated in crossing the placenta and accumulates in fetal tissues.
At that time, the agency noted that no information was available to
ascertain whether developing neural tissue is protected from the
neurotoxic effects of very high circulating levels of free folic acid.
Neither these issues nor issues related to long-term folate intakes of
greater than 1 mg daily by other risk groups were addressed in the
comments that the agency received.
The agency finds that the comments that suggested that there is
evidence of safe use of high intakes of folate by pregnant women are
misleading and erroneous. The agency disagrees with comments asserting
that folic acid at doses of 4 mg per day have been extensively studied
in pregnant women and are without toxic effects. The agency recognizes
that pregnant women take prenatal supplements that usually contain 800
g of folic acid, and that such supplements have been in use
for many years. FDA notes, however, that while there is no evidence
that 800 g of folic acid per day (i.e., the U.S. RDA level for
pregnant or lactating women) is unsafe for this group, such dosages are
usually taken only during the second and third trimesters of pregnancy,
or during lactation, to meet specific nutritional needs for limited
periods of time and are usually taken under a physician's supervision.
FDA further notes that the Institute of Medicine has stated that the
safety of large doses of folic acid in pregnant women has not been
systematically determined (Ref. 5).
FDA also disagrees with the comments that stated that the
recommendations of the government of the UK are directly relevant to
inferring that 5 mg daily is a safe level of intake for pregnant women.
FDA notes that these comments fail to reveal the full content of the UK
recommendations (Ref. 6). The UK government made two recommendations
relating daily folate intake to women of child-bearing age. The first
recommendation is for health care professionals to prescribe a dietary
supplement containing 4 or 5 mg (4,000 or 5,000 g) folic acid
daily until the 12th week of pregnancy to women who have already had a
pregnancy affected by a neural tube birth defect and, therefore, are at
a particularly high risk for another affected pregnancy. The second
recommendation is that women of child-bearing age, who have not had a
previous pregnancy affected by a neural tube defect and who are likely
to become pregnant, should increase their intakes of folate-rich foods
and take a dietary supplement containing 400 g folic acid
daily. The supplement use is recommended from the start of attempting
to conceive until the 12th week of pregnancy. Clearly, the UK
recommendation for women in the general population is the relevant
recommendation to this rulemaking
[[Page 8800]]
rather than the recommendation for the use of high potency supplements,
by prescription, for women at high risk of an affected pregnancy.
Moreover, the UK recommendation for women in the general population is
consistent with the PHS recommendation, to which FDA subscribes.
Finally, and most significant to this rulemaking, the UK
recommendations do not directly address the safety of fortification for
the entire food supply. FDA, therefore, finds that, contrary to the
suggestion in the comment, the UK's folate intake recommendations for
women anticipating pregnancy, but who have not had a history of a prior
affected pregnancy, are consistent with FDA's conclusions of safe
intakes for pregnant women.
FDA also disagrees with the comment that asserted that folic acid
at doses of 4 mg per day has been extensively studied in pregnant
women, and that such doses are without toxic effects. In the only study
utilizing 4 mg folic acid per day, the Medical Research Council trial,
about 910 women took supplements containing 4 mg of folic acid from the
time of randomization into the trial until the 12th week of pregnancy
(Ref. 7). The authors of this study concluded that, although this trial
had sufficient statistical power to demonstrate the efficacy of the
intervention, it did not have sufficient power to answer the question
of safety for public health purposes. Consequently, this study does not
provide a basis on which to determine whether the chronic use of 4 mg
per day of folic acid by pregnant women is safe. The agency is not
aware of any other studies on the effect of daily folate intakes of 4
mg in pregnant women, or of any other data or information that would
persuade the agency that 4 mg folate per day is the appropriate safe
upper limit of intake for pregnant women.
FDA is also not convinced by the comments on masking of the anemia
of vitamin B12 deficiency that a higher value for a safe upper
limit of folate intake is appropriate. As stated in the food additive
proposed rule (58 FR 53312, October 14, 1993), one of the safety
concerns associated with high intakes of folate is the potential for
masking the anemia associated with vitamin B12 deficiency which
may delay accurate diagnosis and prompt treatment of this problem while
neurologic damage progresses. The symptoms of vitamin B12
deficiency include both hematologic and neurologic effects. While the
hematologic effects of vitamin B12 deficiencies are reversible,
the associated neurologic effects may be irreversible depending on how
far they have progressed before detection and treatment. Any increase
in the potential for masking the hematologic effects of vitamin
B12 deficiency may compromise prompt and effective treatment,
thereby making irreversible neurologic damage more likely.
The scientific literature describing the effects of intakes of
folic acid between 1 and 5 mg per day is very limited. Nonetheless, FDA
disagrees with the comments that asserted that there is no evidence of
untoward effects of daily folate intakes of 1.5 to 2 mg per day, and
that 5 mg per day should be identified as the safe upper limit of
intake.
The literature describing the effects of daily intakes of 1 to 5 mg
folic acid includes three uncontrolled intervention trials involving 15
persons (Refs. 8, 9, and 10) and 16 case reports (Refs. 11, 12, 13, 14,
15, and 16). These reports represent a very small data base, with
information from a total of only 31 individuals. Moreover, the agency
notes that, among these data, exposures of 9 individuals to daily
intakes of 1 to 5 mg folic acid lasted for less than 30 days (e.g.,
Refs. 9, 11, 12, and 17). These short-term reports are inadequate for
assessing the safety of life-long exposures. FDA notes, however, that
hematological responses that could lead to a delay in the diagnosis of
vitamin B12 deficiency were observed in 9 of the 16 patients
(i.e., in more than 50 percent) whose daily oral intakes of folic acid
were in the range of 1 to 5 mg and continued for 1 month or more (Refs.
8, 11, 12, 14, and 16). Thus, the scientific literature, although
limited, shows that approximately half of the patients with pernicious
anemia associated with vitamin B12 deficiency responded to folate
at doses between 1 and 5 mg per day when they are given the vitamin for
relatively short periods of time (e.g., several months).
FDA also is not convinced by the comments that noted that adverse
effects of high intakes of folate with respect to vitamin B12
deficiency can be detected with clinical care and that the issue of
masking of vitamin B12 deficiency predated modern clinical
nutrition. FDA is aware that, in many instances, the adverse effects of
increased folate intake associated with the masking of the anemia of
vitamin B12 deficiency can be detected with clinical care but
disagrees that clinical care alone is sufficient to ensure a reasonable
certainty of no harm should the intake of folate exceed 1 mg folate per
day. The agency notes that measurements of vitamin B12 status are
not performed on a routine basis by physicians, and that there is no
way to systematically determine how many people in the United States
have undiagnosed vitamin B12 deficiency and thus might be at risk
from increased intake of folate. The agency noted in the January 6,
1993, folate health claim final rule (58 FR 2606 at 2615) that
significant percentages of the elderly, demented patients, AIDS
patients, and patients with malignant diseases have subnormal vitamin
B12 levels without having any of the classical manifestations of
vitamin B12 deficiency. It has been reported, in a large study (n
= 548) that the prevalence of vitamin B12 deficiency is greater
than 12 percent among free-living elderly Americans (Ref. 18). In
addition, 5 to 10 percent of all patients, regardless of age or
clinical status, are found to have low serum vitamin B12 levels
(58 FR 2606 at 2615, January 6, 1993). Little is known about whether
folate supplementation would have any adverse effect on such persons,
who are far more numerous in the U.S. population than are persons with
pernicious anemia.
The argument that adverse effects in persons with vitamin B12-
related problems can be identified with clinical care fails to consider
whether such persons, who may be unaware of their vitamin B12
status, would recognize an adverse effect as being the result of
increased folate intake, and whether they would seek medical attention
if such an effect occurred. There is no reason to conclude that they
would. Thus, the agency concludes that the argument that adverse
effects in persons with vitamin B12-related problems can be
identified with clinical care does not provide a sufficient basis for
the agency to conclude that increasing the safe upper limit of intake
provides a reasonable certainty of no harm.
In developing its proposed rules, FDA was aware of the contentious
nature of the proposed 1 mg folate per day upper limit and specifically
asked for data on this issue. This topic was also extensively discussed
by FDA's Folic Acid Subcommittee and the full Food Advisory Committee
(Refs. 4 and 19). No data were submitted in any of the comments that
addressed the issue of the safety of intakes above 1 mg per day either
for persons in the general population or for any of the groups
identified as potentially at risk from increased folate intakes. The
agency also notes that its position regarding use of 1 mg folate per
day as the safe upper limit of daily intake was supported by all
comments from individuals with known expertise in folate and vitamin
B12 metabolism and related diseases.
[[Page 8801]]
Because there are inadequate data and information on the safety of
consuming more than 1 mg folate per day, the agency finds that it
cannot conclude that there is a reasonable certainty of no harm to
persons who consume more than 1 mg folate per day. In the absence of
safety data on daily intakes of folate above 1 mg per day, the agency
is unable to adequately define the nature, or assess the magnitude, of
potential risk from increased folate intakes. Therefore, the agency
concludes that, because of the lack of evidence to support the safety
of intake at levels greater than 1 mg folate daily, and the potential
for serious harm to some persons from such intakes, the safe upper
limit for daily folate intakes is appropriately set at 1 mg, the
highest intake level that meets the safety standard for food additives
that there is a reasonable certainty of no harm from use of the
additive.
FDA finds that 1 mg per day as the safe upper limit for folate
intake is supported by: (1) The totality of the available scientific
evidence and the views expressed by experts with recognized expertise
in folate and vitamin B12 nutrition and metabolism, that there are
no data to ensure that adverse effects are not likely to occur at daily
intakes above 1 mg (Refs. 2, 4, 19, and 20); (2) the PHS recommendation
that folate intake of women of childbearing age should not exceed 1 mg
per day (Ref. 1); and (3) the Folic Acid Subcommittee's use of 1 mg of
total folate per day as a safe upper limit guide when considering
fortification strategies.
The agency also is aware, however, of the rapidly evolving and
potentially significant research suggesting a possible link between
folate intakes and reduced risk of heart disease. The agency notes that
a recent expert workshop sponsored by the National Heart, Lung, and
Blood Institute of the National Institutes of Health reviewed the
state-of-the art science in this area (Ref. 21). The expert working
group found that the currently available data, while highly suggestive
of a relationship, were insufficient to demonstrate the validity of
this hypothesis. Nonetheless, FDA intends to monitor and review new
data and information on both the safety of daily folate intakes at
levels above 1 mg daily and on the potential need for improving the
folate nutritional status of large segments of the U.S. population.
Should persuasive evidence emerge that provides a reasonable certainty
that daily intakes of folate at higher levels are safe, the agency will
take action to modify the 1 mg per day safe upper limit for daily
folate intake.
B. Concurrent Vitamin B12 Addition
One comment recommended requiring the addition of vitamin B12
to all foods containing added folic acid as a means to alleviate some
of the concerns about the masking of the effects of vitamin B12
deficiencies. Another comment claimed that many dietary supplements
contained 100 percent of the RDI for vitamin B12 as well as 100
percent of the RDI for folic acid and asserted that this level of
vitamin B12 should allay the concerns about masking vitamin
B12 deficiencies.
FDA is aware that very high oral doses of vitamin B12 (e.g.,
about 1 mg; 500-times the RDI for this vitamin) have provided effective
treatment for some persons with pernicious anemia (Ref. 22). These
findings have led some scientists to suggest that high doses of vitamin
B12 could be added to foods and dietary supplements fortified with
folic acid to reduce the potential for adverse effects in persons with
vitamin B12 deficiency.
This suggestion was discussed during a meeting on surveillance for
adverse effects of increased intakes of folate organized by CDC (Ref.
2). Several experts noted that even if an individual has pernicious
anemia because of vitamin B12 malabsorption, they are able to
absorb a small amount of oral vitamin B12 (about 1 to 2 percent).
Several experts, however, suggested that one possible question about
using foods or food products containing added vitamin B12 is that
in the presence of other nutrients (e.g., vitamin C, thiamin, iron),
vitamin B12 may be converted into analogs, some of which may have
antivitamin B12 activity. The participants in this meeting noted
the paucity of data about this matter. There were no conclusions or
recommendations by this expert group on these issues.
In the folate health claim proposal of October 14, 1993 (58 FR
53254 at 53280), the agency discussed the issue of whether high doses
of vitamin B12 should be added to foods or supplements fortified
with folic acid to reduce the potential for adverse effects in persons
with vitamin B12 deficiency. The agency requested comments, and
specifically data, on the appropriateness, potential effectiveness, and
safety of such fortification. The agency did not receive any data or
other information on this issue.
Because data are not available that address the safety of
simultaneous fortification of foods or dietary supplements with both
folate and vitamin B12, the agency cannot establish a level of
oral vitamin B12 that is safe for the general population, safe for
persons with vitamin B12-related problems, and sufficiently high
to protect persons with vitamin B12-related problems from the
adverse effects of increased intakes of folate. Furthermore, FDA notes
that, because difficulty in absorbing oral vitamin B12 is the
primary reason for inadequate vitamin B12 nutriture in many
persons, the amount of vitamin B12 to be added would likely need
to be very high, perhaps up to 500 times the RDI. Questions regarding
the appropriateness, potential effectiveness, and safety of such an
approach remain unanswered.
Given that vitamin B12 deficiency, including pernicious
anemia, is a serious condition, which if untreated can lead to
irreversible neurological damage, patients with pernicious anemia, and
others at risk of vitamin B12 deficiency, should be diagnosed,
treated, and monitored by a physician (Ref. 22). Moreover, the addition
of both vitamin B12 and folic acid to a food is not relevant to
other potential safety issues associated with high folate intakes
(e.g., high intakes in pregnant women and adverse interactions in
persons on some medications). Therefore, the agency rejects the
suggestion that it require the addition of vitamin B12 to all
foods containing added folic acid because there is not sufficient
information to demonstrate that the addition of vitamin B12
whenever folic acid is added will be effective for its intended purpose
and will ensure the safety of the use of folic acid.
C. Folate Versus Folic Acid
Several comments supported FDA's proposal to fortify certain
cereal-grain products based on a safe upper limit for total folate
rather than folic acid. Some comments stated that the use of total
folate as opposed to only added folic acid to set the safe upper limit
of intake was advisable because this approach provides an additional
safety factor. Other comments recommended that the safe upper limit
should be based solely on added folic acid and not total folate intake.
In support of establishing the safe upper limit based on folic acid
intakes, one comment claimed that the 1 mg limit should be based on
folic acid rather than folate because the bioavailability of folate is
fair but not excellent. One comment argued that using folic acid rather
than folate as the benchmark for measuring the safe upper limit of
total folate intake is consistent with FDA's historical treatment of
the
[[Page 8802]]
distinction between folic acid and folate. The comment pointed out that
in 1971, for example, FDA concluded that ``[f]olic acid especially in
doses above 1.0 mg daily may obscure pernicious anemia * * *'' (36 FR
6843, April 7, 1971). According to this comment, in 1979, FDA warned
that for products containing 1 mg folic acid ``[t]he use of folic acid
for treatment of anemia without the direction of a physician may be
dangerous.'' (44 FR 16126 at 16149, March 16, 1979.)
Several comments questioned why FDA proposed to establish the safe
upper limit on a folate basis, rather than on a folic acid basis, given
the fact that the human trials were run with folic acid, and there is
no evidence of food folate reducing the incidence of NTD's.
Another comment recommended that the safe upper limit be
established on a folic acid basis because:
* * * (1) all evidence relative to the delay in diagnosis of
vitamin B12 deficiency at consumption levels of 1,000 mcg and
above, however equivocal, derives from persons who took folic acid
supplements orally or received folic acid parenterally and who were
simultaneously consuming folates from their diets, and, (2) for
years, the cut point between 'over the counter' and prescription
folic acid supplements has been 1,000 mcg. FDA's 1971 drug use/
safety regulation governing oral and parenteral usage of folic acid
(36 FR 6843) stated that ``folic acid especially in doses above 1.0
mg daily may obscure pernicious anemia in that hematologic remission
may occur while neurological manifestations remain progressive.''
As discussed previously and in the proposed rule (58 FR 53312,
October 14, 1993), FDA is aware of the effect on the choice of a
fortification option if the safe upper limit were established based on
total folate rather than the added form of the vitamin, folic acid. FDA
notes that the distinction between ``synthetic folic acid,'' referring
only to folic acid, and ``folate,'' referring only to naturally
occurring food folates, with respect to the 1 mg estimate of safe daily
intake is an artificial one and is not consistent with what is known
about the metabolic interrelatedness and substitutability of a variety
of folate vitamin forms.
The agency acknowledges that evidence relative to the masking of
the anemia of vitamin B12 deficiency has been obtained from
persons who consumed or were treated with synthetic folic acid.
However, these individuals were also consuming unmeasured quantities of
folate from foods. Thus, total daily folate exposures were unknown. The
extent to which variations in background food folate intakes affected
the variable responses, in terms of masking effects, cannot be
determined. The absence of data on this issue means that it is not
possible to conclude that only added folic acid is responsible for any
masking effects.
Moreover, the agency notes that studies in vegetarians can provide
some insights into the question of whether high intakes of folates from
food sources alone can have adverse effects in persons with poor
vitamin B12 status. Vegetarians present a model group for
evaluating this question because their diets are very low in vitamin
B12 (because animal foods are the sole dietary source of vitamin
B12) and usually very high in foods rich in folate (e.g., fruits,
vegetables and legumes). Thus, vegetarians are at risk of developing
vitamin B12 deficiency in the presence of high folate intakes. In
one study of vegetarians, the authors reported that megaloblastic
anemia (i.e., the type of anemia associated with vitamin B12
deficiency) is rarely encountered in Caucasian vegetarians and vegans
(Ref. 23). This study also reported that the folate content of diets of
vegan children aged 6 to 13 years was twice as high as that of
omnivorous children aged 7 to 12 years. When infants of vegetarian
mothers developed vitamin B12 deficiency, they usually presented
first with neurological signs and symptoms rather than anemia. Another
article reported that studies conducted over several decades in
vegetarian populations have all indicated that major damage to myelin
synthesis (i.e., synthesis of the covering of nerves) occurs with only
minor hematopoietic damage (i.e., inability to synthesis red blood
cells, resulting in anemia) (Ref. 24). This report also found generally
higher red cell folate in persons with greater myelin damage of the
type that only vitamin B12 deficiency produces than in persons
with greater hematologic damage (i.e., anemia). These studies are
suggestive that high food folate intakes alone can mask early
hematologic symptoms of vitamin B12 deficiency in vegetarians,
thus, suggesting that food folates and synthetic folic acid are each
capable of causing masking effects.
These observations support the view that a safe upper limit of
daily intake is more accurately based on total folate intake than on
just intake of synthetic (or added) folic acid. Under conditions in
which vitamin B12 utilization or intake is limited, either
synthetic folic acid or food folate may cause masking of vitamin
B12-related anemia, and these two sources appear to be additive.
FDA also disagrees with the comments that the historical concern
with safety of folate intakes for drugs, as well as for FDA's food
additive regulations, was limited only to synthetic folic acid. The
agency notes that the commenters' references to FDA's 1971 drug
regulation in which intakes of synthetic folic acid above 1 mg daily
were stated to cause masking of anemia related to vitamin B12
deficiency are misleading in that they fail to note that in 1980, FDA
revised the 1971 drug regulation to require a warning statement that
intakes as low as 0.1 mg daily may obscure pernicious anemia (45 FR
69043 at 69044, October 17, 1980). Clearly, for the food supply, a safe
upper limit of intake of 0.1 mg would be inadequate to provide the
known folate nutritional requirements of the U.S. population. Thus,
considerations in drugs that are intended for the treatment of persons
with diagnosed diseases and health-related conditions are not
necessarily directly applicable to questions of food safety.
FDA further finds that suggestions that the historical examination
of food additive regulations dealt only with synthetic folic acid are
not helpful. Food additive regulations on folate addition to foods
necessarily specify that the added form is synthetic because that is
the only form that can be a food additive. On the other hand, it is
common practice when evaluating the safety of an added food ingredient
to consider the safety within the context of total dietary exposures,
regardless of source.
As to comments on possible differences in bioavailability between
food sources and synthetic sources of folic acid and the potential of
these differences to affect safety considerations, FDA discussed this
issue in its proposed health claim rule (58 FR 53254 at 53273 to
53274). FDA tentatively concluded that the issue of bioavailability is
complex, and that no systematic data are available on many of the
factors that affect bioavailability. FDA was not aware of any
meaningful way to factor bioavailability into fortification scenarios
or, by extension, into evaluations of safety. FDA received no new data
on this matter. Therefore, FDA has no basis on which to factor possible
differences in bioavailability of synthetic, as opposed to food,
folates into its determination of the safe upper limit of folate
intakes.
Significantly, the use of a distinction between folic acid and
folate for the purposes of establishing a safe upper limit of folate
intake was not supported by any expert group that the agency consulted
during this rulemaking proceeding or by comments from experts in folate
and B12 metabolism and related diseases (Refs. 2, 4, and 19).
[[Page 8803]]
Nor was it supported by any of the folate or vitamin B12 experts
who submitted written comments to the record. FDA received no new data
or compelling arguments in this regard. Therefore, the agency concludes
that the safe upper limit of daily intake should be based on total
folate intake (i.e., on consumption of folate from all sources).
D. Breakfast Cereals
Several comments supported the proposal to limit the fortification
of breakfast cereals to 100 g per serving. One comment
supported the proposed rule's distinction between the consumption of
dietary supplements and breakfast cereals, noting that:
The document appropriately makes the distinction between
breakfast cereal and vitamin supplements noting that some persons
may consume many more than one serving of breakfast cereal per day.
In contrast, however, another comment argued that:
* * * the potential for overconsumption of folic acid is greater
for dietary supplements in pill/tablet/capsule form than for
supplement cereals. Supplement cereal consumption is self-limiting
in light of volume and caloric considerations. In contrast, smaller
supplements have the potential to be consumed excessively, for
example, by adults using a multivitamin/mineral product to increase
vitamin C intake to combat a cold, or by children, with the
potential result of iron toxicity.
Several comments recommended that currently marketed breakfast
cereals containing 400 g per serving folic acid should be
allowed to continue to be formulated at this level. One breakfast
cereal manufacturer argued that allowing dietary supplements to contain
the full RDI level of folic acid while limiting the folic acid added to
breakfast cereal to 25 percent of the RDI did not seem to be based on
any scientific rationale:
If 100% RDI is a safe level for a vitamin supplement in tablet
form, it surely is a safe level in a food form. In fact, food is
potentially a safer alternative since the consumption is self-
limiting; whereas there is greater potential for over consuming
supplements in tablet form.
Several comments stated that they did not understand how FDA could
reduce the level of added folic acid in breakfast cereals and still
implement the PHS recommendation to have women of childbearing age
consume 400 g folic acid per day. Other comments argued that
FDA should allow some breakfast cereals to contain 100 percent of the
RDI for folic acid per serving as an alternative to taking dietary
supplement tablets.
Still other comments argued that FDA should not make a regulatory
distinction between dietary supplements in conventional and
unconventional food forms. The comments asserted that both should be
allowed to provide 100 percent of the daily value of folic acid.
One comment suggested that for breakfast cereals to contain 100
percent of the RDI for folic acid, they must contain 100 percent of the
RDI for at least 10 vitamins for which RDI's have been determined to
preserve their status as rationally balanced supplement products.
In the proposal, FDA tentatively concluded that if cereal-grain
products were fortified at 140 g folic acid per 100 g, the
addition of folic acid to breakfast cereals should be limited to 100
g folic acid per serving. FDA stated that fortification of all
breakfast cereals to 400 g folic acid per serving would result
in the estimated daily intake of folate among significant portions of
the population exceeding the safe upper limit of 1 mg folate per day.
FDA recognizes that fortification of some breakfast cereals at 400
g folic acid per serving provides women of child-bearing age
flexibility to meet the PHS recommendation that such women consume 400
g of folic acid per day as a means to reduce their risk of
having a pregnancy affected by an NTD. FDA emphasizes that the
estimates of folate consumption presented in the health claims proposal
(58 FR 53295, October 14, 1993) were based on calculations that assumed
all breakfast cereals would be fortified at 0, 100 g, or 400
g folic acid per serving. As discussed in the proposal, most
breakfast cereals are fortified at 100 g folic acid per
serving, and only 3 to 6 percent of breakfast cereals are fortified at
400 g folic acid per serving (Nielsen Scantrack Data, A.C.
Nielsen Marketing Research, Inc., Cherry Hill, New Jersey).
FDA has no basis to conclude that the current market distribution
of breakfast cereals fortified at 400 g folic acid per serving
will substantially change as the result of the authorization of a
health claim on the relationship of folate to NTD's. In fact, the
agency notes that the health claim on the relationship between folate
and NTD's may be included in the labeling of foods that are good
sources of folate (40 to 76 g folic acid per serving). Because
most breakfast cereals contain folic acid at levels (100 g
folic acid per serving) that permit them to bear this health claim,
there is no need for breakfast cereal manufacturers to increase their
level of folic acid fortification to qualify to bear the claim.
Moreover, FDA has provided in 21 CFR 101.79(c)(2)(i)(G) that the
health claim for folate and NTD's cannot state that a specified amount
of folate per serving from one source is more effective in reducing the
risk of NTD's than a lower amount per serving from another source.
Thus, the health claim regulation provides no incentive for increasing
the level of folic acid fortification in breakfast cereals.
Therefore, given the small number and limited market share of
breakfast cereals that are fortified with 400 g of folic acid
per serving, the lack of incentive for there to be any significant
increase in this number, and the fact that, if used appropriately,
breakfast cereals can contribute to a healthful diet and provide
flexibility for women in selecting foods to meet the PHS
recommendation, FDA has concluded that it is not necessary to limit the
addition of folic acid to breakfast cereals to 100 g folic
acid (25 percent of the RDI) per serving. FDA has determined that
addition of up to 400 g folic acid per serving in breakfast
cereals is safe as long as this practice does not become widespread.
FDA intends to monitor the marketplace, however, and should the
proportion of breakfast cereals fortified at 400 g folic acid
change substantially, FDA may find it necessary to reconsider this
conclusion.
E. Fruit Juice Replacements
One comment recommended that fruit juice replacements be permitted
to add folic acid at 20 percent of the RDI.
FDA has considered this recommendation in light of its efforts
towards implementation of the PHS recommendation and establishing safe
conditions of use for folic acid.
In examining options for providing folate to women of childbearing
age through food fortification, the agency considered various options
including allocation of folate to products such as cereal-grain
products, fruit juices, and dairy products.
In selecting foods to consider as vehicles for fortification, the
agency started with the basic principle that fortification of staple
products that are commonly consumed in significant amounts by virtually
all members of the target population is most likely to result in
increased intakes of a specific nutrient by the target population (Ref.
26). The agency notes that, based on this general principle, cereal-
grain products were the fortification vehicle recommended by the Food
and Nutrition Board (Ref. 26).
Recent food consumption data confirm that 90 percent of women of
childbearing age consume cereal-grain
[[Page 8804]]
products on a daily basis (Ref. 26). Therefore, all fortification
options that the agency considered included fortification of cereal-
grain products. Other commonly consumed food categories that may lend
themselves to fortification with nutrient additives, including juices
and dairy products, were also considered. Examples of dairy products
and fruit juices that the agency considered for fortification included:
Fluid cows' milk, reconstituted dry milk, condensed and evaporated
milks, yogurts, and fruit juices such as orange, grapefruit, lemon,
pineapple, apple, and grape.
FDA also included breakfast cereals in evaluating all fortification
strategies because these products represent a traditional source of
many nutrients, including folate, for those who consume them. Breakfast
cereals are also consumed by many women of childbearing age (Ref. 27).
Similarly, because approximately 30 to 40 percent of women of
childbearing age use dietary supplements (Ref. 28), the agency also
included the availability and continued use of dietary supplements in
all fortification options.
In the agency's analyses of potential intakes from fortified foods,
FDA applied different levels (70, 140, and 350 g per 100 unit)
of fortification to the broad range of food products under
consideration, including certain dairy products and fruit juices.
When fortification at the lowest level, (i.e., 70 g per
unit) included fruit juices and dairy products in addition to cereal-
grain products, intakes of high consumers exceeded the safe upper limit
of 1 mg folate per day for most age groups. For example, fortification
of cereal-grain products, fruit juices, and dairy products with 70
g folic acid per unit, in addition to usual patterns of
dietary supplement and breakfast cereal use, was estimated to result in
daily folate intakes of high consumers in many groups in excess of 1 mg
(58 FR 53254 at 53292, October 14, 1993).
On the other hand, as discussed more fully in the folate health
claim proposal, FDA examined the effects of not including fruit juices
and dairy products in its fortification model. As noted above, cereal-
grain products are more widely consumed than dairy products or fruit
juices by women of childbearing age. The agency examined the following
fortification levels: 70, 140, or 350 g folic acid per unit.
If cereal-grain products were fortified with 70 g folic acid
per 100 g, folate intakes by adult population groups of ``high
consumers'' would remain below 1 mg per day (58 FR 53254 at 53292,
October 14, 1993). If fortification of cereal-grain products was 140
g per 100 g, intakes by adults 51+ years who were ``high
consumers'' and who used supplements would approach but not exceed 1 mg
folate per day. Fortification of cereal-grain products at 350
g per 100 g could result in estimated daily intakes by ``high
consumers'' among several sex/age groups in excess of 1 mg folate per
day (58 FR 53254 at 53292, October 14, 1993).
As discussed above, FDA has concluded that 1 mg folate per day is
the safe upper limit for folate intake. To ensure that the safe upper
limit is not exceeded, FDA finds that folic acid fortification must be
limited to the cereal-grain products that are the subject of a standard
of identity that requires the addition of this substance at a level of
140 g per 100 g. Fortification of other standardized foods
with folic acid would cause the total daily folate intake of some
segments of the population to exceed the safe daily intake of folate.
Because fruit juices and fruit juice replacements are not as widely
consumed as cereal-grain products by women of childbearing age, they do
not provide as effective a means for addressing the PHS recommendation
that women of childbearing age consume 400 g folic acid per
day. Moreover, allowing their fortification in addition to the
fortification of cereal-grain products would cause some members of the
population to exceed the safe upper limit of intake. Therefore, FDA
rejects the comments recommending that fruit juice replacements be
permitted to add folic acid.
F. Infant Formula
One comment by a trade association representing infant formula
manufacturers supported proposed Sec. 172.345(e) which explicitly
permits the addition of folic acid to infant formula, consistent with
section 412(i) of the act (21 U.S.C. 350a(i)).
Another comment expressed concern that proposed Sec. 172.345(e)
would allow the addition of elevated levels of folic acid to infant
formula.
FDA notes that in accordance with section 412(i) of the act, infant
formulas are required to contain all essential nutrients, including
folic acid. This rulemaking amends the food additive regulations to
make clear that the use of folic acid in infant formula at a level
necessary to provide 4 g of folate is safe and meets the known
nutrient requirements of infants when used at the required level. This
level was set in accordance with the 1967 recommendations of the
Committee on Nutrition of the American Academy of Pediatrics (Ref. 29)
and was incorporated into the 1980 Infant Formula Act and the 1986
Amendments to the act. Therefore, FDA concludes that addition of folic
acid to infant formula at levels that comply with section 412 of the
act is safe.
G. Dietary Supplements
In the proposal, FDA tentatively concluded that it should continue
to provide for the use of folic acid in dietary supplements (58 FR
53312 at 53316, October 14, 1993). FDA received several comments
supporting this tentative conclusion. Since publication of the
proposal, however, the Dietary Supplement Health and Education Act of
1994 (DSHEA) was enacted. The DSHEA amended the act to exempt dietary
ingredients, including vitamins, used in dietary supplements from the
definition of a ``food additive'' (section 201(s)(6) of the act).
Therefore, there is no need to provide for the use of folic acid in
dietary supplements in the food additive regulations. Consequently, FDA
has modified the proposed revision of Sec. 172.345 by removing
paragraph (f) and redesignating paragraph (g) as paragraph (f).
H. Medical Foods
A comment from a trade association that represents manufacturers of
medical foods supported FDA's proposal to allow the addition of folic
acid to medical foods.
FDA recognizes that it is necessary and appropriate to provide for
the use of folic acid in foods that are formulated to be consumed or
administered enterally under the supervision of a physician and that
are intended for the specific dietary management of a disease condition
for which distinctive nutritional requirements, based on recognized
scientific principles, are established by medical evaluation (medical
foods). Therefore, FDA is providing for the use of folic acid in
medical foods in Sec. 172.345(f). In the proposal, FDA provided for
medical foods as a subset of foods for special dietary use (see
proposed Sec. 172.345(g)). However, FDA has reevaluated this approach
and concludes that it is more consistent with the act to provide for
medical foods as a separate class of products (see section 403(r)(5)(A)
of the act and compare section 411(c)(3) (21 U.S.C. 350(c)(3)) of the
act with section 5(b)(3) of the Orphan Drug Act (21 U.S.C.
360ee(b)(3)).
FDA has provided for the addition of folic acid to foods for
special dietary use in this final rule (Sec. 172.345(g)).
[[Page 8805]]
I. Meal-Replacements
Several comments recommended that FDA allow the fortification of
meal-replacement products with folic acid. These comments stated that
weight control meal-replacement products should be allowed to be
fortified with folic acid at a level based on the proportion of the
total daily caloric intake that the product is intended to provide. One
comment argued that meal-replacement products are unlikely to
contribute to excess folic acid in the diet because their use is self-
limiting. In addition, several comments argued that the addition of
folic acid to meal-replacement products is consistent with the
rationale used by FDA to justify the fortification of breakfast
cereals, because meal-replacement products are alternatives to
breakfast cereals, and like breakfast cereals, meal-replacement
products are consumed typically as a single serving at the beginning of
the day. In support of allowing addition of folic acid to meal-
replacement products, one comment argued that these products are often
consumed by women of childbearing age at breakfast in place of cereal,
or they are eaten as a mid-morning snack when breakfast is skipped.
Another comment recommended that any meal-replacement products be
permitted to contain up to 100 percent of the RDI per serving of folic
acid. The comment argued that this level was justified because these
products are usually promoted and knowingly purchased at a premium for
their nutrient properties.
FDA recognizes that meal-replacement products intended to be
consumed as the sole item of a meal or a diet provide persons consuming
such products with essential nutrients. Moreover, folic acid
fortification of such products provides an alternative to breakfast
cereals and dietary supplements for women of child-bearing age that
want to follow the PHS recommendation that they consume 400 g
of folic acid per day. Therefore, FDA concludes that meal-replacement
products represented as a sole item of a meal or a diet may contain
added folic acid.
To ensure that consumers of such meal-replacement products do not
exceed the safe upper limit for folate per day, FDA has concluded that
meal-replacement products that are intended to be consumed once per day
may contain up to 400 g folic acid per serving. However, to
ensure that consumption of meal-replacement products does not result in
folate intakes exceeding the safe upper limit of 1 mg folate per day,
FDA has concluded that meal-replacement products intended to be
consumed more than once per day may contain up to 200 g folic
acid per serving (Sec. 172.345(h)).
J. Foodstuff Premixes
One comment requested that the agency clarify whether folic acid
may be added to foodstuff premixes made with unenriched flour, but
whose labeling indicates that the product contains enriched flour.
FDA recognizes that current manufacturing practices can involve the
addition of nutrients, including folic acid, to premixes containing
unenriched cereal-grain. FDA advises that the addition of folic acid to
premixes made with unenriched cereal-grain flours, where a regulation
establishing a standard of identity exists and where the standard
specifically requires the addition of folic acid, is viewed by the
agency as use in accordance with Sec. 172.345(c).
K. Specifications
Several comments requested that the proposed specifications for
folic acid (Sec. 172.345(b)) be modified to include standards
established by the United States Pharmacopeia (USP) for the use of
folic acid in dietary supplements. These comments maintained that
current USP and Food Chemicals Codex standards for folic acid are
identical, and that including the USP requirements would help resolve
any differences should USP improve the standards for folic acid. The
comments noted that USP intends to establish new standards for folic
acid.
As discussed previously, in response to the DSHEA, FDA has removed
all references to the use of folic acid in dietary supplements from
Sec. 172.345. Establishing specifications for the use of folic acid in
dietary supplements, as recommended in the comments, is beyond the
scope of this rulemaking. Therefore, FDA concludes that new
Sec. 172.345(b) will specify FCC specifications for the food additive
use of folic acid.
L. Analytical Methodology
A comment noted that the current Association of Official Analytical
Chemists (AOAC) method for folate quantitation in food is inadequate,
and that there is a critical need for an improved method. Another
comment noted that the current AOAC method is subject to considerable
variability and requires 5 to 7 days to complete. The comment noted
that this length of time is not practical for in-plant quality control
purposes.
The agency recognizes that current methods for folate quantitation
in foods may present a problem. FDA notes that folate is one of the
most labile of the water-soluble vitamins, and the instability of the
numerous folate forms in food has proven to be an obstacle to their
quantitation.
Current methods to quantitate the level of folate in foods
generally involve a two-step process consisting of extraction of folate
from the food matrix followed by quantitation of folate levels.
Extraction of folate from the food matrix is the most technically
challenging step in the analysis. The AOAC has approved two methods for
folate quantitation in food (Ref. 30). Both are microbiological assays.
These assays can be completed within 72 hours after extraction of
folate from the food sample.
Attempts to improve the extraction of folate from food matrices
have focused on the use of a triple enzymatic digestion procedure using
a broad specificity protease, an -amylase, and chicken
pancreatic conjugase. Use of the triple enzyme procedure has been found
to increase measurable folate from a wide range of food matrices and
has been shown to be particularly effective on cereal-grain based foods
and milk and milk by-products. The triple enzyme procedure has been
adapted into analysis protocols at FDA's Atlanta Center for Nutrient
Analysis for the quantitation of folate in FDA's Total Diet samples
(Ref. 31).
FDA scientists are studying the triple enzyme extraction procedure
to identify foodstuffs for which the extraction method is most
applicable. The agency also notes that a number of high pressure liquid
chromatography (HPLC) methods for folate analysis and quantitation have
been described in the literature. Because such HPLC methods are more
rapid than the microbial methods currently in use, they offer the
potential for development of a rapid folate quantitation assay for
quality control purposes.
FDA will continue to work with AOAC to improve the methodology for
quantitation of folate in food. The agency anticipates that the use of
the triple enzyme extraction procedure and HPLC will result in advances
over the current folate assays by reducing variability and assay time.
III. Environmental Impact
The agency has carefully considered the potential environmental
effects of this action. FDA has concluded that the action will not have
a significant impact on the human environment and that an environmental
impact statement is not
[[Page 8806]]
required. The agency's finding of no significant impact and the
evidence supporting that finding, contained in an environmental
assessment, may be seen in the Dockets Management Branch (address
above) between 9 a.m. and 4 p.m., Monday through Friday.
IV. Objections
Any person who will be adversely affected by this regulation may at
any time on or before April 4, 1996 file with the Dockets Management
Branch (address above) written objections thereto. Each objection shall
be separately numbered, and each numbered objection shall specify with
particularity the provisions of the regulation to which objection is
made and the grounds for the objection. Each numbered objection on
which a hearing is requested shall specifically so state. Failure to
request a hearing for any particular objection shall constitute a
waiver of the right to a hearing on that objection. Each numbered
objection for which a hearing is requested shall include a detailed
description and analysis of the specific factual information intended
to be presented in support of the objection in the event that a hearing
is held. Failure to include such a description and analysis for any
particular objection shall constitute a waiver of the right to a
hearing on the objection. Three copies of all documents shall be
submitted and shall be identified with the docket number found in
brackets in the heading of this document. Any objections received in
response to the regulation may be seen in the Dockets Management Branch
between 9 a.m. and 4 p.m., Monday through Friday.
V. References
The following information has been placed on display in the Dockets
Management Branch (address above) and may be seen by interested persons
between 9 a.m. and 4 p.m. Monday through Friday.
1. Department of Health and Human Services, Public Health Service,
Recommendations for the Use of Folic Acid to Reduce the Number of
Cases of Spina Bifida and Other Neural Tube Defects, Morbidity and
Mortality Weekly Report 41/No. RR-14, pp. 1-7, September 11, 1992.
2. Center for Disease Control and Prevention, Transcript of Meeting,
Atlanta, GA, August 12, 1993; ``Surveillance for Possible Adverse
Effects of Folic Acid Consumption''.
3. DHHS, FDA, Nutrition Labeling, Federal Register 38 FR 2125-2132,
January 19, 1973.
4. Folic Acid Subcommittee/Food Advisory Committee, October 14-15,
1993, Transcript.
5. Institute of Medicine, National Academy of Sciences, ``Nutrition
During Pregnancy,'' Washington, DC, National Academy Press, 1990.
6. Department of Health, United Kingdom, Press Release and Letter to
all Drs. in England, Scotland, Wales, and North Ireland, ``Folic
Acid and Neural Tube Defects: Guidelines on Prevention,'' December
1992.
7. Wald, N., Prevention of NTD's: Results of the Medical Research
Council Vitamin Study, Lancet, 338:131-131, 1991; and editorial,
``Folic Acid and Neural Tube Defects,'' Lancet, 338:153-154, 1991.
8. Ross, F. J., H. Belding, and B. L. Paegel, ``The Development and
Progression of Subacute Combined Degeneration of the Spinal Cord in
Patients with Pernicious Anemia Treated with Synthetic
Pteroylglutamic (Folic) Acid.'' Blood, 3:68-90, 1948.
9. Hansen, H. A., and A. Weinfeld, ``Metabolic Effects and
Diagnostic Value of Small Doses of Folic Acid and B12 in
Megaloblastic Anemias,'' Acta Medica Scandinavia. 172:427-443, 1962.
10. Vilter, R. W., J. J. Will, T. Wright, and D. Rullman,
``Interrelationships of Vitamin B12, Folic Acid, and Ascorbic
Acid in the Megaloblastic Anemias,'' American Journal of Clinical
Nutrition, 12:130-144, 1963.
11. Allen, R. H., S. P. Stabler, D. G. Savage, and J. Lindenbaum,
``Diagnosis of Cobalamin Deficiency. I. Usefulness of Serum
Methylmalonic Acid and Total Homocysteine Concentrations,'' American
Journal of Hematology. 34:90-98, 1990.
12. Stambolian, D., and M. Behrens, ``Optic Neuropathy Associated
with Vitamin B12 Deficiency,'' American Journal of
Ophthalmology, 83:465-468, 1977.
13. Cooper, B. A., and T. Abe, ``Variable Response of Bone Marrow to
Feeding DL-5-formyltetrahydrofolate in Pernicious Anemia,'' British
Journal of Haematology, 32:387-394, 1976.
14. Ellison, A. B. Curry, ``Pernicious Anemia Masked by
Multivitamins Containing Folic Acid,'' Journal of the American
Medical Association, 173:240-243, 1960.
15. Challenger, W.A., and D.R. Korst, ``Pitfalls in the Diagnosis
and Treatment of Pernicious Anemia,'' American Journal of the
Medical Sciences, 134:226-231, 1960.
16. Victor, M., and A.A. Lear, ``Subacute Combined Degeneration of
the Spinal Cord,'' American Journal of Medicine, 20:896-911, 1956.
17. Davidson, L.S.P., and R.H. Girdwood, ``Folic Acid as Therapeutic
Agent,'' British Medical Journal, 1:587-591, 1947.
18. Lindenbaum, J., I.H. Rosenberg, Wilson, W.F. Peter, S.P.
Stabler, and R.H. Allen, ``Prevalence of Cobalamin Deficiency in the
Framingham Elderly Population,'' American Journal of Clinical
Nutrition, 60:2-11, 1994.
19. Transcript of meeting of Folic Acid Subcommittee/Food Advisory
Committee Meeting, Arlington, VA, April 15-16, 1993.
20. Briefing material, Folic Acid Subcommittee Meeting, April 15,
1993.
21. National Heart, Lung, and Blood Institute of the National
Institutes of Health Workshop.
22. Hathcock, J., and G. Troendle, ``Oral Cobalamin for Treatment of
Pernicious Anemia,'' Journal of the American Medical Association,
265:96-97, 1991.
23. Sanders, T.A.B., and S. Reddy, ``Vegetarian Diets and
Children,'' American Journal of Clinical Nutrition, 59:5(S):1176S-
1181S, 1994.
24. Herbert, V. ``Staging Vitamin B12 (Cobalamin) Status in
Vegetarians,'' American Journal of Clinical Nutrition,
59:5(S):1213S-1221S, 1994.
25. Food and Nutrition Board, National Research Council, National
Academy of Sciences, Proposed Fortification Policy for Cereal-Grain
Products, National Academy Printing and Publishing Office,
Washington, DC, p. 36, 1974.
26. Nationwide Food Consumption Survey, Continuing Survey of Food
Intakes by Individuals: Women 19-50 Years Old and Their Children 1-5
years, 1 day, 1985; United States Department of Agriculture,
Hyattsville, MD; NFCS, CSFII, Report No. 85-1, 1985.
27. Tippett, K.S., S.J. Mickle, J.D. Goldman, K.E. Sykes, D.A. Cook,
R.S. Sebastian, J.W. Wilson, and J. Smith, ``Food and Nutrient
Intakes by Individuals in the United States, 1 Day,'' 1989-91. U.S.
Department of Agriculture, p. 7.
28. Park, Y.M., I. Kim, E.A. Yetley, ``Characteristics of Vitamin
and Mineral Supplement Products in the United States,'' American
Journal of Clinical Nutrition, 54:750-759, 1991.
29. American Academy of Pediatrics' Committee on Nutrition,
Commentary on Breast-Feeding and Infant Formulas, Including Proposed
Standards for Formulas, Pediatrics, 57:278-285, 1976.
30. Association of Official Analytical Chemists Official Methods of
Analysis, 16th edition, Sections 944.12--Folic Acid (Pteroylglutamic
Acid) in Vitamin Preparations and 992.05--Folic Acid
(Pteroylglutamic Acid) in Infant Formula, 1995.
31. Martin, J, W.O. Landen, A.M. Soliman, and R.R. Eitenmiller,
``Application of a Tri-enzyme Extraction for Total Folate
Determination in Foods,'' Journal of the Association of Official
Analytical Chemists, 73:805-808, 1990.
List of Subjects in 21 CFR Part 172
Food additives, Incorporation by Reference, Reporting and
recordkeeping requirements.
Therefore under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, 21 CFR part
172 is amended as follows:
[[Page 8807]]
PART 172--FOOD ADDITIVES PERMITTED FOR DIRECT ADDITION TO FOOD FOR
HUMAN CONSUMPTION
1. The authority citation for 21 CFR 172 continues to read as
follows:
Authority: Secs. 201, 401, 402, 409, 701, 721 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 321, 341, 342, 348, 371,
379e).
2. Section 172.345 is revised to read as follows:
Sec. 172.345 Folic acid (folacin).
Folic acid (CAS Reg. No. 59-30-3), also known as folacin or folate,
may be safely used in food as a nutrient in accordance with the
following prescribed conditions:
(a) Folic acid is the chemical N-[4-[[(2-amino-1,4-dihydro-4-oxo-6-
pteridinyl)methyl]amino]benzoyl]-L-glutamic acid.
(b) Folic acid meets the specifications of the ``Food Chemicals
Codex,'' 3d ed. (1981), pp. 125 to 126, which is incorporated by
reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies
may be obtained from the National Academy Press, 2101 Constitution Ave.
NW., Washington, DC 20418, or may be examined at the Center for Food
Safety and Applied Nutrition's Library, 200 C St. SW., rm. 3321,
Washington, DC or at the Office of the Federal Register, 800 North
Capitol St. NW., suite 700, Washington, DC.
(c) Folic acid may be added to foods subject to a standard of
identity established under section 401 of the Federal Food, Drug, and
Cosmetic Act (the act) when the standard of identity specifically
provides for the addition of folic acid.
(d) Folic acid may be added, at levels not to exceed 400 micrograms
(g) per serving, to breakfast cereals, as defined under
Sec. 170.3(n)(4) of this chapter.
(e) Folic acid may be added to infant formula in accordance with
section 412(i)(1) of the act or with regulations issued under section
412(i)(2) of the act which are codified in Sec. 107.100 of this
chapter.
(f) Folic acid may be added to a medical food, as defined in
section 5(b)(3) of the Orphan Drug Act (21 U.S.C. 360ee(b)(3)), at
levels not to exceed the amount necessary to meet the distinctive
nutritional requirements of the disease or condition for which the food
is formulated.
(g) Folic acid may be added to food for special dietary use at
levels not to exceed the amount necessary to meet the special dietary
needs for which the food is formulated.
(h) Folic acid may be added to foods represented as meal-
replacement products, in amounts not to exceed:
(1) Four hundred g per serving if the food is a meal-
replacement that is represented for use once per day; or
(2) Two hundred g per serving if the food is a meal-
replacement that is represented for use more than once per day.
Dated: February 28, 1996.
David A. Kessler,
Commissioner of Food and Drugs.
[FR Doc. 96-5012 Filed 2-29-96; 12:04 pm]
BILLING CODE 4160-01-P
Complete official Federal Register PDF
FR Doc. 96-4999 Atlantic Mackerel, Squid, and Butterfish Fisheries; Final 1996 Specifications
[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Pages 8495-8496]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4999]
-----------------------------------------------------------------------
[[Page 8496]]
DEPARTMENT OF COMMERCE
50 CFR Part 655
[Docket No. 951211295-6035-02; I.D. 111595C]
RIN 0648-XX37
Atlantic Mackerel, Squid, and Butterfish Fisheries; Final 1996
Specifications
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Final specifications for the 1996 Atlantic mackerel, squid, and
butterfish fisheries.
-----------------------------------------------------------------------
SUMMARY: NMFS issues the final initial specifications for the 1996
fishing year for Atlantic mackerel, squid, and butterfish (SMB).
EFFECTIVE DATE: January 1, 1996, through December 31, 1996.
ADDRESSES: Copies of the Environmental Assessment are available from
the Northeast Regional Office, NMFS, 1 Blackburn Drive, Gloucester, MA
01930. Copies of the Mid-Atlantic Fishery Management Council's quota
paper and recommendations are available from David R. Keifer, Executive
Director, Mid-Atlantic Fishery Management Council, Room 2115, Federal
Building, 300 South New Street, Dover, DE 19901.
FOR FURTHER INFORMATION CONTACT: Myles Raizin, 508-281-9104.
SUPPLEMENTARY INFORMATION: Regulations implementing the Fishery
Management Plan for the Atlantic Mackerel, Squid, and Butterfish
Fisheries (FMP) prepared by the Mid-Atlantic Fishery Management Council
(Council) appear at 50 CFR part 655. These regulations require NMFS to
publish a document specifying the initial annual amounts of the initial
optimum yield (IOY) as well as the amounts for allowable biological
catch (ABC), domestic annual harvest (DAH), domestic annual processing
(DAP), joint venture processing (JVP), and total allowable levels of
foreign fishing (TALFF) for the species managed under the FMP. No
reserves are permitted under the FMP for any of these species.
Procedures for determining the initial annual amounts are found in
Sec. 655.22.
These specifications are unchanged from the proposed specifications
that were published in the Federal Register on December 21, 1995 (60 FR
66249). The following table contains the final 1996 initial
specifications for Atlantic mackerel, Loligo and Illex squids, and
butterfish.
Final Initial Specifications For Atlantic Mackerel, Squid, and Butterfish for the Fishing Year January 1 Through
December 31, 1996 (mt)
----------------------------------------------------------------------------------------------------------------
Squids
Specifications -------------------------- Atlantic Butterfish
Loligo Illex Mackerel
----------------------------------------------------------------------------------------------------------------
Max OY\1\................................................... 44,000 30,000 \2\N/A 16,000
ABC \3\..................................................... 30,000 30,000 1,175,500 7,200
IOY......................................................... 25,000 21,000 105,500 5,900
DAH......................................................... 25,000 21,000 \4\105,500 5,900
DAP......................................................... 25,000 21,000 50,000 5,900
JVP......................................................... 0 0 35,000 0
TALFF....................................................... 0 0 0 0
----------------------------------------------------------------------------------------------------------------
\1\ Max optimum yield (OY) as stated in the FMP.
\2\ Not applicable, see the FMP.
\3\ IOY can increase to this amount.
\4\ Contains 20,500 mt projected recreational catch based on the formula contained in the regulations (50 CFR
part 655).
This document also announces four special conditions that would
affect any foreign joint venture fishery for Atlantic mackerel, should
one occur in 1996: (1) Joint ventures are allowed south of 37 deg.30'
N. lat., but river herring bycatch may not exceed 0.25 percent of the
over-the-side transfers of Atlantic mackerel; (2) the Regional
Director, Northeast Region, NMFS, will monitor fishing operations and
manage harvest to reduce impacts on marine mammals in prosecuting the
Atlantic mackerel fishery; (3) the mackerel OY may be increased during
the year as described under Sec. 655.21(b)(2)(v), in consultation with
the Council, but the total should not exceed 125,500 mt; and (4)
applications from a particular nation for a joint venture for 1996 will
not be approved until the Regional Director determines, based on an
evaluation of performances, that the nation's purchase obligations for
previous years have been fulfilled. There were no comments received
regarding these conditions.
Comment and Response
One comment was received during the public comment period
concerning the proposed IOY specifications for both Illex and Loligo
squid.
Comment: The commenter urged the rejection of the proposed
specifications for the squids due to the differences of 5,000 mt and
9,000 mt between the IOY and the ABC specifications for the Loligo and
Illex fisheries, respectively. The commenter believed that both IOYs
should be set at 30,000 mt, the ABC, because the proposed IOYs would be
deleterious to New England vessels wishing to harvest squid.
Response: The Council provided a firm biological rationale for IOY
reductions, noting that the 17th Northeast Regional Stock Assessment
Workshop concluded that both squids have an annual lifespan and are
susceptible to recruitment overfishing. Furthermore, the IOY is not
allocated by region and New England vessels have the same harvest
rights as others participating in the fishery. Should events occur in
these fisheries that would require additional IOY, the regulations at
Sec. 655.22 give the Regional Director authority to raise or lower IOY
if it is beneficial to the Nation.
Classification
This action is authorized by 50 CFR part 655, and these final
specifications are exempt from review under E.O. 12866.
Authority: 16 U.S.C. 1801 et seq.
Dated: February 27, 1996.
Gary Matlock,
Program Management Officer, National Marine Fisheries Service.
[FR Doc. 96-4999 Filed 3-4-96; 8:45 am]
BILLING CODE 3510-22-P
Complete official Federal Register PDF
FR Doc. 96-4997 Groundfish of the Bering Sea and Aleutian Islands Area; Pacific Ocean Perch in the Central Aleutian District
[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Pages 8497-8498]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4997]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
50 CFR Part 675
[Docket No. 960129019-6019-01; I.D. 022396G]
Groundfish of the Bering Sea and Aleutian Islands Area; Pacific
Ocean Perch in the Central Aleutian District
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Modification of a closure.
-----------------------------------------------------------------------
SUMMARY: NMFS is opening directed fishing for Pacific ocean perch in
the Central Aleutian District of the Bering Sea and Aleutian Islands
management area (BSAI). This action is necessary to fully utilize the
total allowable catch (TAC) of Pacific ocean perch in this area.
EFFECTIVE DATE: 12 noon, Alaska local time (A.l.t.), February 29, 1996,
until 12 midnight, A.l.t., December 31, 1996.
FOR FURTHER INFORMATION CONTACT: Andrew N. Smoker, 907 586-7228.
SUPPLEMENTARY INFORMATION: The groundfish fishery in the BSAI exclusive
economic zone is managed by NMFS according to the Fishery Management
Plan for the Groundfish Fishery of the Bering Sea and Aleutian Islands
Area (FMP) prepared by the North Pacific Fishery Management Council
under authority of the Magnuson Fishery Conservation and Management
Act. Fishing by U.S. vessels is governed by regulations implementing
the FMP at 50 CFR parts 620 and 675.
In accordance with Sec. 675.20(a)(7)(ii), the Final 1996 Harvest
Specifications of Groundfish (61 FR 4311, February 5, 1996) for the
BSAI established 2,571 metric tons (mt) as the initial TAC catch of
Pacific ocean perch for the Central Aleutian District. At the same
time, the directed fishery for Pacific ocean perch in the Central
Aleutian District was closed to directed fishing under
Sec. 675.20(a)(8) in order to reserve amounts anticipated to be needed
for incidental catch in other fisheries. NMFS has determined that as of
February 10, 1996, 2,571 mt remain unharvested.
The Director, Alaska Region, NMFS, has determined that the 1996 TAC
for Pacific ocean perch in the Central Aleutian District has not been
reached. Therefore, NMFS is terminating the previous closure and is
reopening directed fishing for Pacific ocean perch in the Central
Aleutian District.
All other closures remain in full force and effect.
Classification
This action is taken under Sec. 675.20 and is exempt from review
under E.O. 12866.
Authority: 16 U.S.C. 1801 et seq.
[[Page 8498]]
Dated: February 27, 1996.
Richard W. Surdi,
Acting Director, Office of Fisheries Conservation and Management,
National Marine Fisheries Service.
[FR Doc. 96-4997 Filed 2-28-96; 3:58 pm]
BILLING CODE 3510-22-F
Complete official Federal Register PDF
FR Doc. 96-4996 Groundfish of the Bering Sea and Aleutian Islands Area; Pacific Ocean Perch in the Eastern Aleutian District
[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Page 8498]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4996]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
50 CFR Part 675
[Docket No. 960129019-6019-01; I.D. 022396F]
Groundfish of the Bering Sea and Aleutian Islands Area; Pacific
Ocean Perch in the Eastern Aleutian District
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Modification of a closure.
-----------------------------------------------------------------------
SUMMARY: NMFS is opening directed fishing for Pacific ocean perch in
the Eastern Aleutian District of the Bering Sea and Aleutian Islands
management area (BSAI). This action is necessary to fully utilize the
total allowable catch (TAC) of Pacific ocean perch in this area.
EFFECTIVE DATE: 12 noon, Alaska local time (A.l.t.), February 29, 1996,
until 12 midnight, A.l.t., December 31, 1996.
FOR FURTHER INFORMATION CONTACT: Andrew N. Smoker, 907 586-7228.
SUPPLEMENTARY INFORMATION: The groundfish fishery in the BSAI exclusive
economic zone is managed by NMFS according to the Fishery Management
Plan for the Groundfish Fishery of the Bering Sea and Aleutian Islands
Area (FMP) prepared by the North Pacific Fishery Management Council
under authority of the Magnuson Fishery Conservation and Management
Act. Fishing by U.S. vessels is governed by regulations implementing
the FMP at 50 CFR parts 620 and 675.
In accordance with Sec. 675.20(a)(7)(ii), the Final 1996 Harvest
Specifications of Groundfish (61 FR 4311, February 5, 1996) for the
BSAI established 2,571 metric tons (mt) as the initial total allowable
catch of Pacific ocean perch for the Eastern Aleutian District. At the
same time, the directed fishery for Pacific ocean perch in the Eastern
Aleutian District was closed to directed fishing under
Sec. 675.20(a)(8) in order to reserve amounts anticipated to be needed
for incidental catch in other fisheries. NMFS has determined that as of
February 10, 1996, 2,485 mt remain unharvested.
The Director, Alaska Region, NMFS, has determined that the 1996 TAC
for Pacific ocean perch in the Eastern Aleutian District has not been
reached. Therefore, NMFS is terminating the previous closure and is
reopening directed fishing for Pacific ocean perch in the Eastern
Aleutian District.
All other closures remain in full force and effect.
Classification
This action is taken under Sec. 675.20 and is exempt from review
under E.O. 12866.
Authority: 16 U.S.C. 1801 et seq.
Dated: February 27, 1996.
Richard W. Surdi,
Acting Director, Office of Fisheries Conservation and Management,
National Marine Fisheries Service.
[FR Doc. 96-4996 Filed 2-28-96; 3:58 pm]
BILLING CODE 3510-22-F
Complete official Federal Register PDF
FR Doc. 96-4977 Delegations of Authority and Organization; Technical Amendment
[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Page 8472]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4977]
=======================================================================
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Part 5
Delegations of Authority and Organization; Technical Amendment
AGENCY: Food and Drug Administration, HHS.
ACTION: Final rule; technical amendment.
-----------------------------------------------------------------------
SUMMARY: The Food and Drug Administration (FDA) is amending the
regulations for delegations of authority to set forth the current
organizational structure of the agency as well as the current addresses
for headquarters and field offices. This action is necessary to ensure
accuracy of the regulations.
EFFECTIVE DATE: March 5, 1996.
FOR FURTHER INFORMATION CONTACT: Ellen Rawlings, Division of Management
Systems and Policy (HFA-340), Food and Drug Administration, 5600
Fishers Lane, Rockville, MD 20857, 301-443-4976.
SUPPLEMENTARY INFORMATION: The regulations are being amended in 21 CFR
5.100 to reflect the current addresses for headquarters and for field
and district offices.
Notice and comment on these amendments are not necessary under the
Administrative Procedure Act because this is a rule of Agency
organization (5 U.S.C. 553(b)).
List of Subjects in 21 CFR Part 5
Authority delegations (Government agencies), Imports, Organization
and functions (Government agencies).
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, 21 CFR part
5 is amended as follows:
PART 5--DELEGATIONS OF AUTHORITY AND ORGANIZATION
1. The authority citation for 21 CFR part 5 continues to read as
follows:
Authority: 5 U.S.C. 504, 552, App. 2; 7 U.S.C. 138a, 2271; 15
U.S.C. 638, 1261-1282, 3701-3711a; secs. 2-12 of the Fair Packaging
and Labeling Act (15 U.S.C. 1451-1461); 21 U.S.C. 41-50, 61-63, 141-
149, 467f, 679(b), 801-886, 1031-1309; secs. 201-903 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 321-394); 35 U.S.C. 156;
secs. 301, 302, 303, 307, 310, 311, 351, 352, 354, 361, 362, 1701-
1706; 2101, 2125, 2127, 2128 of the Public Health Service Act (42
U.S.C. 241, 242, 242a, 242l, 242n, 243, 262, 263, 263b, 264, 265,
300u-300u-5, 300aa-1, 300aa-25, 300aa-27, 300aa-28); 42 U.S.C.
1395y, 3246b, 4332, 4831(a), 10007-10008; E.O. 11490, 11921, and
12591; secs. 312, 313, 314 of the National Childhood Vaccine Injury
Act of 1986, Pub. L. 99-660 (42 U.S.C. 300aa-1 note).
Sec. 5.100 [Amended]
2. Section 5.100 is amended by revising footnotes 9 and 12, and by
adding new footnote 17 to the entry for ``Division of Clinical
Laboratory Devices.''To read as follows:
Sec. 5.100 Headquarters.
-* * * * *
Center for Biologics Evaluation and Research\9\
\9\ Mailing address: 1401 Rockville Pike, suite 200N, Rockville,
MD 20852-1448.
---------------------------------------------------------------------------
-* * * * *
Office of Device Evaluation\12\
\12\ Mailing address: 9200 Corporate Blvd., Rockville, MD 20850.
---------------------------------------------------------------------------
-* * * * *
Division of Clinical Laboratory Devices\17\
\17\ See footnote 13.
---------------------------------------------------------------------------
-* * * * *
Dated: February 26, 1996.
William K. Hubbard,
Associate Commissioner for Policy Coordination.
[FR Doc. 96-4977 Filed 3-4-96; 8:45 am]
BILLING CODE 4160-01-F
Complete official Federal Register PDF
FR Doc. 96-4927 Revision of Policy Concerning Consent To Try Civil Matters Before Magistrate Judges
[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Pages 8472-8473]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4927]
=======================================================================
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DEPARTMENT OF JUSTICE
28 CFR Part 52
[AG ORDER No. 2012-96]
RIN 1105-AA43
Revision of Policy Concerning Consent To Try Civil Matters Before
Magistrate Judges
AGENCY: Department of Justice.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The United States Department of Justice is publishing a final
rule to revise and clarify Department policy concerning consent to try
civil matters before magistrate judges.
EFFECTIVE DATE: This final rule is effective March 5, 1996.
FOR FURTHER INFORMATION CONTACT:
Mary C. Morgan, Deputy Assistant Attorney General, Office of Policy
[[Page 8473]]
Development, Department of Justice, Washington, DC 20530, telephone
(202) 514-0052.
SUPPLEMENTARY INFORMATION: A working group consisting of
representatives from senior Justice Department offices and litigating
divisions and the United States Attorneys' Offices reviewed the
Department's policy concerning consent to try civil matters before
magistrate judges. As a result of this review, the Department reaffirms
its existing policy of encouraging the use of magistrate judges to
assist the district courts in resolving civil disputes whenever
possible, as set forth in 28 CFR 52.01, but makes several clarifying
changes.
Paragraphs (1) through (4) of Sec. 52.01(a) merely summarize
provisions of federal statutory and case law set forth elsewhere. This
rule eliminates those paragraphs, thus streamlining the Code of Federal
Regulations.
This rule deletes from Sec. 52.01(b) the two sentences immediately
following paragraph (7). The first sentence--referring to cases
``involving significant rights of large numbers of persons, or complex,
sensitive, or unusually important issues''--is unnecessary and
inconsistent with existing Department policy set forth elsewhere in
this Part. Instead, this rule amends Sec. 52.01(b)(1) to include a
reference to the involvement of significant rights of large numbers of
persons as a factor to be considered relating to the complexity of the
case.
The second sentence--referring to a formal consultation process
with the appropriate Assistant Attorney General--is unnecessary given
the large number of cases in which a consultation with the Assistant
Attorney General is not required because redelegation authority has
been exercised. This rule amends Sec. 52.01(b) to require that the
determination by the government attorney whether to consent to a trial
before a magistrate judge simply be made ``with the concurrence of his
or her supervisor.'' The rule retains the requirement currently
existing in Sec. 52.01(d), but incorporates it into Sec. 52.01(c), for
consultation with the appropriate Assistant Attorney General regarding
consent to an appeal to the district court rather than to the court of
appeals but deletes the phrase ``to a trial before a magistrate.'' The
rule amends Sec. 52.01(b) by adding the phrase ``as set forth in this
paragraph'' to clarify that the determination is based upon
consideration of all the enumerated factors.
This rule conforms the terminology of Secs. 52.01 and 52.02 to the
Judicial Improvements Act of 1990, Pub. L. 101-650, section 321, which
changed the designation of persons appointed under 28 U.S.C. 631 from
United States magistrate to that of United States magistrate judge.
Administrative Procedure Act 5 U.S.C. 553
Because these regulations relate to agency management or personnel,
the Department of Justice finds good cause for exempting them from the
provision of the Administrative Procedure Act (5 U.S.C. 553) requiring
notice of proposed rulemaking, the opportunity for public comment, and
delay in effective date.
Regulatory Flexibility Act
The Attorney General, in accordance with the Regulatory Flexibility
Act (5 U.S.C. 605(b)), has reviewed this final rule and, by approving
it, certifies that this rule will not have a significant economic
impact on a substantial number of small entities.
Executive Order 12866
This regulation has been drafted and reviewed in accordance with
Executive Order 12866, section 1(b). The Attorney General has
determined that this rule is not a significant regulatory action under
Executive Order 12866, section 3(f), and, accordingly, this rule has
not been reviewed by the Office of Management and Budget.
List of Subjects in 28 CFR Part 52
Courts.
Accordingly, for the reasons set forth in the preamble, part 52 of
chapter I of Title 28 of the Code of Federal Regulations is amended as
follows:
PART 52--PROCEEDINGS BEFORE U.S. MAGISTRATE JUDGES
1. The heading for Part 52 is revised to read as set forth above.
2. The authority citation for part 52 continues to read as follows:
Authority: 5 U.S.C. 301; 18 U.S.C. 3401(f).
3. Section 52.01 is revised to read as follows:
Sec. 52.01 Civil proceedings: Special master, pretrial, trial, appeal.
(a) Sections 636 (b) and (c) of title 28 of the United States Code
govern pretrial and case-dispositive civil jurisdiction of magistrate
judges, as well as service by magistrate judges as special masters.
(b) It is the policy of the Department of Justice to encourage the
use of magistrate judges, as set forth in this paragraph, to assist the
district courts in resolving civil disputes. In conformity with this
policy, the attorney for the government is encouraged to accede to a
referral of an entire civil action for disposition by a magistrate
judge, or to consent to designation of a magistrate judge as special
master, if the attorney, with the concurrence of his or her supervisor,
determines that such a referral or designation is in the interest of
the United States. In making this determination, the attorney shall
consider all relevant factors, including--
(1) The complexity of the matter, including involvement of
significant rights of large numbers of persons;
(2) The relief sought;
(3) The amount in controversy;
(4) The novelty, importance, and nature of the issues raised;
(5) The likelihood that referral to or designation of the
magistrate judge will expedite resolution of the litigation;
(6) The experience and qualifications of the magistrate judge; and
(7) The possibility of the magistrate judge's actual or apparent
bias or conflict of interest.
(c) (1) In determining whether to consent to having an appeal taken
to the district court rather than to the court of appeals, the attorney
for the government should consider all relevant factors including--
(i) The amount in controversy;
(ii) The importance of the questions of law involved;
(iii) The desirability of expeditious review of the magistrate
judge's judgment.
(2) In making a determination under paragraph (c)(1) of this
section the attorney shall, except in those cases in which delegation
authority has been exercised under 28 CFR 0.168, consult with the
Assistant Attorney General having supervisory authority over the
subject matter.
Sec. 52.02 [Amended]
4. Section 52.02 is amended by removing the word ``magistrate''
wherever it appears and adding, in its place, ``magistrate judge'' and
by removing the word ``magistrate's'' wherever it appears and adding,
in its place, ``magistrate judge's''.
Dated: February 26, 1996.
Janet Reno,
Attorney General.
[FR Doc. 96-4927 Filed 3-4-96; 8:45 am]
BILLING CODE 4410-01-M
Complete official Federal Register PDF
FR Doc. 96-4908 Office of the Assistant Secretary for Public and Indian Housing; Family Self-Sufficiency Program; Streamlining Final Rule
[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Pages 8814-8822]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4908]
[[Page 8813]]
_______________________________________________________________________
Part V
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Parts 962 and 984
Family Self-Sufficiency Program; Streamlining Final Rule
Federal Register / Vol. 61, No. 44 / Tuesday, March 5, 1996 / Rules
and Regulations
[[Page 8814]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 962 and 984
[Docket No. FR-3989-F-01]
RIN 2577-AB61
Office of the Assistant Secretary for Public and Indian Housing;
Family Self-Sufficiency Program; Streamlining Final Rule
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule amends HUD's regulations for the Family Self-
Sufficiency (FSS) Program. In an effort to comply with the President's
regulatory reform initiatives, this rule will streamline the Family
Self-Sufficiency Program regulations by consolidating the public
housing and the Section 8 FSS regulations and by eliminating redundant
or otherwise unnecessary provisions. This final rule will make the
Family Self-Sufficiency regulations clearer and more concise.
EFFECTIVE DATE: April 4, 1996.
FOR FURTHER INFORMATION CONTACT: Louise K. Hunt, Director for Policies
and Procedures, Room 4216, Department of Housing and Urban Development,
451 Seventh Street, SW., Washington, DC 20410, telephone number (202)
708-3887, ext. 330. This number may be accessed through TDD by calling
the Federal Relay Service at (202) 708-9300 or 1-800-877-TDDY (1-800-
877-8389). (Other than the ``1-800'' number, these telephone numbers
are not toll-free.)
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act Statement
This rule does not alter existing information collection
requirements. The information collection requirements contained in
Secs. 962.201, 962.302, 962.305, and 962.401 of this rule were
previously submitted to the Office of Management and Budget for review
under the Paperwork Reduction Act of 1995 (42 U.S.C. 3501-3520) and had
been approved under the control number 2577-0178. The Department's
request for reinstatement of this control number is pending at OMB.
(See notice published in the Federal Register on November 30, 1995, at
60 FR 61563.) An agency may not conduct or sponsor, and person is not
required to respond to a collection of information unless the
collection displays a valid control number. The OMB control number,
when reinstated, will be added by separate notice in the Federal
Register.
Background
On March 4, 1995, President Clinton issued a memorandum to all
Federal departments and agencies regarding regulatory reinvention. In
response to this memorandum, the Department of Housing and Urban
Development conducted a page-by-page review of its regulations to
determine which can be eliminated, consolidated, or otherwise improved.
HUD has determined that the regulations for the public housing and
Section 8 FSS Programs can be improved and streamlined by consolidating
these regulations. The two current Code of Federal Regulations parts
affected (part 962 for the public housing FSS Program and part 984 for
the Section 8 FSS program) contain many identical provisions.
Consolidating the parts should especially benefit HAs that operate both
a public housing and a Section 8 FSS program.
Some provisions in the regulations are not regulatory requirements.
For example, several sections in the regulations contain nonbinding
guidance or explanations. While this information is very helpful to
recipients, HUD will more appropriately provide this information
through handbook guidance or other materials rather than maintain it in
the CFR.
Section 984.201, Action Plan, contains revisions to conform to
changes to administrative plan requirements in 24 CFR part 982 for the
Section 8 Tenant-Based Assistance Program. (See 24 CFR 982.54, as added
by 60 FR 34698, July 3, 1995, and the related preamble discussion of
the FSS action plan at 60 FR 34661.) In conformity with those changes
this rule removes the requirement in the current Section 8 FSS program
regulation to include certain FSS policies in the administrative plan
rather than in the action plan.
This rule does not affect the Indian housing FSS Program, which is
codified at 24 CFR part 950 with other Indian housing programs. This
rule applies to Indian Housing Authorities that opt or have opted to
participate in the Section 8 FSS Program.
Justification for Final Rulemaking
HUD generally publishes a rule for public comment before issuing a
rule for effect, in accordance with its own regulations on rulemaking
in 24 CFR part 10. However, part 10 provides for exceptions to the
general rule if the agency finds good cause to omit advance notice and
public participation. The good cause requirement is satisfied when
prior public procedure is ``impracticable, unnecessary, or contrary to
the public interest'' (24 CFR 10.1). HUD finds that good cause exists
to publish this rule for effect without first soliciting public
comment. This rule merely consolidates existing CFR parts and removes
unnecessary regulatory provisions and does not establish or affect
substantive policy. Therefore, prior public comment is unnecessary.
Other Matters
Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed and approved this final rule, and in so
doing certifies that this rule will not have a significant economic
impact on a substantial number of small entities. This rule merely
streamlines regulations by removing redundant or unnecessary
provisions. The rule will have no adverse or disproportionate economic
impact on small businesses.
Environmental Impact
This rulemaking does not have an environmental impact. This
rulemaking simply amends an existing regulation by consolidating and
streamlining provisions and does not alter the environmental effect of
the regulations being amended. A Finding of No Significant Impact with
respect to the environment was made in accordance with HUD regulations
in 24 CFR part 50 that implement section 102(2)(C) of the National
Environmental Policy Act of 1969 (42 U.S.C. 4332) at the time of
development of regulations initially implementing the FSS Program (HUD
Docket No. FR-2961). That finding remains applicable to this rule, and
is available for public inspection between 7:30 a.m. and 5:30 p.m.
weekdays in the Office of the Rules Docket Clerk, Office of General
Counsel, Room 10276, Department of Housing and Urban Development, 451
Seventh Street, SW., Washington, DC.
Executive Order 12612, Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that this rule
will not have substantial direct effects on States or their political
subdivisions, or the relationship between the Federal government and
the States, or on the distribution of power and responsibilities among
the various levels of government. No programmatic or policy changes
will result from this rule that would affect the relationship between
the Federal Government and State and local governments.
[[Page 8815]]
Executive Order 12606, The Family
The General Counsel, as the Designated Official under Executive
Order 12606, The Family, has determined that this rule will not have
the potential for significant impact on family formation, maintenance,
or general well-being, and thus is not subject to review under the
Order. No significant change in existing HUD policies or programs will
result from promulgation of this rule.
Catalog
The Catalog of Federal Domestic Assistance numbers for the programs
affected by this proposed rule is 14.850, 14.855, and 14.887.
List of Subjects
24 CFR Part 962
Grant programs--housing and community development, Public housing,
Reporting and recordkeeping requirements.
24 CFR Part 984
Grant programs--housing and community development, Housing, Rent
subsidies, Reporting and recordkeeping requirements.
Accordingly, under the authority of 42 U.S.C. 3535(d), parts 962
and 984 of 24 Code of Federal Regulations are amended as follows:
PART 962--[REMOVED]
1. Part 962 is removed.
2. Part 984 is revised to read as follows:
PART 984--SECTION 8 AND PUBLIC HOUSING FAMILY SELF-SUFFICIENCY
PROGRAM
Subpart A--General
Sec.
984.101 Purpose, scope, and applicability.
984.102 Program objectives.
984.103 Definitions.
984.104 Basic requirements of the FSS program.
984.105 Minimum program size.
Subpart B--Program Development and Approval Procedures
984.201 Action Plan.
984.202 Program Coordinating Committee (PCC).
984.203 FSS family selection procedures.
984.204 On-site facilities.
Subpart C--Program Operation
984.301 Program implementation.
984.302 Administrative fees.
984.303 Contract of participation.
984.304 Total tenant payment, family rent, and increases in family
income.
984.305 FSS account.
984.306 Section 8 residency and portability requirements.
Subpart D--Reporting
984.401 Reporting.
Authority: 42 U.S.C. 1437f, 1437u, and 3535(d).
Subpart A--General
Sec. 984.101 Purpose, scope, and applicability.
(a) Purpose. (1) The purpose of the Family Self-Sufficiency (FSS)
program is to promote the development of local strategies to coordinate
the use of public and Indian housing assistance and housing assistance
under the Section 8 rental certificate and rental voucher programs with
public and private resources, to enable families eligible to receive
assistance under these programs to achieve economic independence and
self-sufficiency.
(2) The purpose of this part is to implement the policies and
procedures applicable to operation of a local FSS program, as
established under section 23 of the 1937 Act (42 U.S.C. 1437u), under
HUD's rental voucher, rental certificate, and public housing programs.
(b) Scope. (1) Each PHA that received funding for public housing
units under the FY 1991 and FY 1992 FSS incentive award competitions
must operate a public housing FSS program.
(2) Each HA that received funding for Section 8 rental certificates
or rental vouchers under the combined FY 1991/1992 FSS incentive award
competition must operate a Section 8 FSS program.
(3) Unless the HA receives an exception from the program as
provided in Sec. 984.105, each HA that, in FY 1993 or any subsequent
FY, received or receives funding for additional rental certificates or
rental vouchers must operate a Section 8 FSS program or for additional
public housing units must operate a public housing FSS program.
(c) Applicability--(1) Public housing. This part applies to public
housing assisted under the 1937 Act.
(2) Indian Housing Authorities. This part does not apply to Indian
housing. The regulations governing Indian housing FSS programs are set
forth in 24 CFR part 950, subpart R. The operation of a Section 8 FSS
program is optional for Indian Housing Authorities (IHAs) that operate
a certificate or voucher program. IHAs that elect to operate a Section
8 FSS program are subject to the requirements of this part, except that
Sec. 984.105(c) of this subpart A governing minimum program size does
not apply to IHAs. Additionally, IHAs that received section 8 units
under the FSS incentive award competitions and are operating a section
8 FSS program are not subject to the minimum program size requirements.
(3) Section 8. This part also applies to the Section 8 rental
certificate program and the Section 8 rental voucher program authorized
by Section 8 of the 1937 Act and implemented at 24 CFR parts 882, 887,
and 982.
Sec. 984.102 Program objectives.
The objective of the FSS program is to reduce the dependency of
low-income families on welfare assistance and on Section 8, public or
Indian housing assistance, or any Federal, State, or local rent or
homeownership subsidies. Under the FSS program, low-income families are
provided opportunities for education, job training, counseling, and
other forms of social service assistance, while living in assisted
housing, so that they may obtain the education, employment, and
business and social skills necessary to achieve self-sufficiency, as
defined in Sec. 984.103 of this subpart A. The Department will measure
the success of a local FSS program not only by the number of families
who achieve self-sufficiency, but also by the number of FSS families
who, as a result of participation in the program, have family members
who obtain their first job, or who obtain higher paying jobs; no longer
need benefits received under one or more welfare programs; obtain a
high school diploma or higher education degree; or accomplish similar
goals that will assist the family in obtaining economic independence.
Sec. 984.103 Definitions.
(a) The terms 1937 Act, Fair Market Rent, HUD, Indian Housing
Authority (IHA), Public Housing Agency (PHA), Secretary, and Section 8,
as used in this part, are defined in 24 CFR 5.100.
(b) As used in this part:
Certification means a written assertion based on supporting
evidence, provided by the FSS family or the HA, as may be required
under this part, and which:
(1) Shall be maintained by the HA in the case of the family's
certification, or by HUD in the case of the HA's certification;
(2) Shall be made available for inspection by HUD, the HA, and the
public, as appropriate; and
(3) Shall be deemed to be accurate for purposes of this part,
unless the Secretary or the HA, as applicable, determines otherwise
after inspecting the evidence and providing due notice and opportunity
for comment.
Chief executive officer (CEO). The CEO of a unit of general local
government means the elected official or
[[Page 8816]]
the legally designated official, who has the primary responsibility for
the conduct of that entity's governmental affairs. The CEO for an
Indian tribe is the tribal governing official.
Contract of participation means a contract in a form approved by
HUD, entered into between a participating family and an HA operating an
FSS program that sets forth the terms and conditions governing
participation in the FSS program. The contract of participation
includes all individual training and services plans entered into
between the HA and all members of the family who will participate in
the FSS program, and which plans are attached to the contract of
participation as exhibits. For additional detail, see Sec. 984.303 of
this subpart A.
Earned income means income or earnings included in annual income
from wages, tips, salaries, other employee compensation, and self-
employment. (See 24 CFR 813.106(b)(1), (2) and (8) and 913.106(b)(1),
(2) and (8).) Earned income does not include any pension or annuity,
transfer payments, any cash or in-kind benefits, or funds deposited in
or accrued interest on the FSS escrow account established by an HA on
behalf of a participating family.
Effective date of contract of participation means the first day of
the month following the month in which the FSS family and the HA
entered into the contract of participation.
Eligible families means:
(1) For the public housing FSS program, current residents of public
housing. Eligible families also include current residents of public
housing who are participants in local public housing self-sufficiency
programs; and
(2) For Section 8 FSS program, current Section 8 rental certificate
or rental voucher program participants, including participants in the
Project Self-Sufficiency or Operation Bootstrap or other local self-
sufficiency programs.
Enrollment means the date that the FSS family entered into the
contract of participation with the HA.
Family Self-Sufficiency program or FSS program means the program
established by an HA within its jurisdiction to promote self-
sufficiency among participating families, including the provision of
supportive services to these families, as authorized by section 23 of
the 1937 Act.
FSS account means the FSS escrow account authorized by section 23
of the 1937 Act, and as provided by Sec. 984.305 of this subpart A.
FSS credit means the amount credited by the HA to the participating
family's FSS account.
FSS family or participating family means a family that resides in
public housing or receives assistance under the rental certificate or
rental voucher programs, and that elects to participate in the FSS
program, and whose designated head of the family has signed the
contract of participation.
FSS related service program means any program, publicly or
privately sponsored, that offers the kinds of supportive services
described in the definition of ``supportive services'' set forth in
this Sec. 984.103.
FSS slots refer to the total number of public housing units or the
total number of rental certificates or rental vouchers that comprise
the minimum size of an HA's respective public housing FSS program or
Section 8 FSS program.
FY means Federal Fiscal Year (starting with October 1, and ending
September 30, and designated by the calendar year in which it ends).
HA means a Housing Authority--either a Public Housing Agency (PHA)
or an Indian Housing Authority (IHA).
Head of FSS family means the adult member of the FSS family who is
the head of the household for purposes of determining income
eligibility and rent.
Housing subsidies means assistance to meet the costs and expenses
of temporary shelter, rental housing or homeownership, including rent,
mortgage or utility payments.
Individual training and services plan means a written plan that is
prepared for the head of the FSS family, and each adult member of the
FSS family who elects to participate in the FSS program, by the HA in
consultation with the family member, and which sets forth:
(1) The supportive services to be provided to the family member;
(2) The activities to be completed by that family member; and
(3) The agreed upon completion dates for the services and
activities. Each individual training and services plan must be signed
by the HA and the participating family member, and is attached to, and
incorporated as part of the contract of participation. An individual
training and services plan must be prepared for the head of the FSS
family.
JOBS Program means the Job Opportunities and Basic Skills Training
Program authorized under part F of title IV of the Social Security Act
(42 U.S.C. 402(a)(19)).
JTPA means the Job Training Partnership Act (29 U.S.C. 1579(a)).
Low-income family. See definitions in 24 CFR 813.102 and 913.102.
Participating family. See definition for ``FSS family'' in this
section.
Program Coordinating Committee or PCC is the committee described in
Sec. 984.202 of this part.
Public housing means housing assisted under the 1937 Act, excluding
housing assisted under Section 8 of the 1937 Act.
Self-sufficiency means that an FSS family is no longer receiving
Section 8, public or Indian housing assistance, or any Federal, State,
or local rent or homeownership subsidies or welfare assistance.
Achievement of self-sufficiency, although an FSS program objective, is
not a condition for receipt of the FSS account funds. (See Sec. 984.305
of this part.)
Supportive services means those appropriate services that an HA
will make available, or cause to be made available to an FSS family
under a contract of participation, and may include:
(1) Child care--child care of a type that provides sufficient hours
of operation and serves an appropriate range of ages;
(2) Transportation--transportation necessary to enable a
participating family to receive available services, or to commute to
their places of employment;
(3) Education--remedial education; education for completion of
secondary or post secondary schooling;
(4) Employment--job training, preparation, and counseling; job
development and placement; and follow-up assistance after job placement
and completion of the contract of participation;
(5) Personal welfare--substance/alcohol abuse treatment and
counseling;
(6) Household skills and management--training in homemaking and
parenting skills; household management; and money management;
(7) Counseling--counseling in the areas of:
(i) The responsibilities of homeownership;
(ii) Opportunities available for affordable rental and
homeownership in the private housing market, including information on
an individual's rights under the Fair Housing Act; and
(iii) Money management; and
(8) Other services--any other services and resources, including
case management, reasonable accommodations for individuals with
disabilities, that the HA may determine to be appropriate in assisting
FSS families to achieve economic independence and self-sufficiency.
Unit size or size of unit refers to the number of bedrooms in a
dwelling unit.
Very low-income family. See definitions in 24 CFR 813.102 and
913.102.
[[Page 8817]]
Welfare assistance means income assistance from Federal or State
welfare programs, and includes assistance provided under the Aid to
Families with Dependent Children (AFDC) Program, Supplemental Security
Income (SSI) that is subject to an income eligibility test; Medicaid,
food stamps, general assistance, or other assistance provided under a
Federal or State program directed to meeting general living expenses,
such as food, health care, child care, but does not include assistance
solely directed to meeting housing expenses, and does not include
transitional welfare assistance provided to JOBS participants.
Sec. 984.104 Basic requirements of the FSS program.
An FSS program established under this part shall be operated in
conformity with:
(a) The regulations of this part, and for a Section 8 FSS program,
the rental certificate and rental voucher regulations, codified in 24
CFR parts 882, 887, and 982 respectively, and for a public housing FSS
program, the applicable public housing regulations, including the
regulations in 24 CFR parts 913, 960, and 966;
(b) An Action Plan, as described in Sec. 984.201, and provide
comprehensive supportive services as defined in Sec. 984.103; and
(c) An FSS program established under this part shall be operated in
compliance with the nondiscrimination and equal opportunity
requirements set forth in 24 CFR part 5, with the exception of
Executive Orders 11246, 11625, 12432, and 12138.
Sec. 984.105 Minimum program size.
(a) General. Unless otherwise excepted from operation of an FSS
program as provided in paragraph (c) of this section, or from operation
of an FSS program of the minimum size as provided in paragraph (d) of
this section, an HA shall operate an FSS program of the minimum size as
determined in this section.
(1) Determining minimum program size. The minimum size of a FSS
program:
(i) For a public housing FSS program, is equal to:
(A) The total number of public housing units reserved in FY 1993,
and each subsequent FY; plus (if applicable)
(B) The number of public housing units reserved in FY 1991 and FY
1992 under the FSS incentive award competitions;
(ii) For a Section 8 FSS program, is equal to:
(A) The total number of rental certificates and rental vouchers
reserved in FY 1993, and each subsequent FY; plus (if applicable)
(B) The number of rental certificates and rental vouchers reserved
under the combined FY 1991/1992 FSS incentive award competition.
(2) Applicable units and certificates and vouchers. In determining
minimum program size, for a public housing FSS program, all new public
housing rental units reserved will be counted and, for a Section 8 FSS
program, all rental certificates and rental vouchers reserved will be
counted, except those used to replace rental certificates or rental
vouchers (renewals).
(b) Maintaining minimum program size. As the contracts of
participation for FSS families are completed or terminated, replacement
FSS families must be selected to maintain the minimum program size. A
replacement family must be selected in accordance with the FSS family
selection procedures set forth in Sec. 984.203.
(c) Exception to program operation. (1) Upon approval by HUD, an HA
will not be required to establish and carry out a public housing or a
Section 8 FSS program if the HA provides to HUD a certification, as
defined in Sec. 984.103, that the establishment and operation of such
an FSS program is not feasible because of local circumstances, which
may include, but are not limited to:
(i) Lack of accessible supportive services funding, including lack
of the availability of programs under JTPA or JOBS;
(ii) Lack of funding for reasonable administrative costs;
(iii) Lack of cooperation by other units of State or local
government; or
(iv) Lack of interest in participating in the FSS program on the
part of eligible families.
(2) An exception will not be granted if HUD determines that local
circumstances do not preclude the HA from effectively operating an FSS
program that is smaller than the minimum program size.
(d) Reduction in program size. Upon approval by HUD, an HA may be
permitted to operate a public housing or a Section 8 FSS program that
is smaller than the minimum program size if the HA provides to HUD a
certification, as defined in Sec. 984.103, that the operation of an FSS
program of the minimum program size is not feasible because of local
circumstances, which may include, but are not limited to:
(1) Decrease in or lack of accessible supportive services,
including decrease in the availability of programs under JTPA or JOBS;
(2) Decrease in or lack of funding for reasonable administrative
costs;
(3) Decrease in or lack of cooperation by other units of State or
local government;
(4) Decrease in or lack of interest in participating in the FSS
program on the part of eligible families.
(e) Review of certification records. HUD reserves the right to
examine, during its management review of the HA, or at any time, the
documentation and data that an HA relied on in certifying to the
unfeasibility of its establishing and operating an FSS program, or of
operating an FSS program of less than minimum program size.
Subpart B--Program Development and Approval Procedures
Sec. 984.201 Action Plan.
(a) Requirement for Action Plan--(1) General. To participate in the
FSS program, an HA must have a HUD-approved Action Plan that complies
with the requirements of this section.
(2) [Reserved]
(b) Development of Action Plan. The Action Plan shall be developed
by the HA in consultation with the chief executive officer of the
applicable unit of general local government, and the Program
Coordinating Committee.
(c) Initial submission and revisions--(1) Initial submission.
Unless the dates set forth in this paragraph (c) are extended by HUD
for good cause, an HA that is establishing its first FSS program must
submit an Action Plan to HUD for approval within 90 days of
notification by HUD of approval of:
(i) The HA's application for incentive award units; or
(ii) If the HA did not apply for FSS incentive award units, other
funding that establishes the obligation to operate an FSS program.
(2) Revision. Following initial approval of the Action Plan by HUD,
no further approval of the Action Plan is required unless the HA
proposes to make policy changes to the Action Plan, or changes are
required by HUD. Any changes to the Action Plan must be submitted to,
and approved by, HUD.
(d) Contents of Plan. The Action Plan shall describe the policies
and procedures of the HA for operation of a local FSS program, and
shall contain, at a minimum, the following information:
(1) Family demographics. A description of the number, size,
characteristics, and other demographics (including racial and ethnic
data), and the supportive service needs of the families expected to
participate in the FSS program;
(2) Estimate of participating families. A description of the number
of eligible
[[Page 8818]]
FSS families who can reasonably be expected to receive supportive
services under the FSS program, based on available and anticipated
Federal, tribal, State, local, and private resources;
(3) Eligible families from other self-sufficiency program. If
applicable, the number of families, by program type, who are
participating in Operation Bootstrap, Project Self-Sufficiency, or any
other local self-sufficiency program who are expected to agree to
execute an FSS contract of participation.
(4) FSS family selection procedures. A statement indicating the
procedures to be utilized to select families for participation in the
FSS program, subject to the requirements governing the selection of FSS
families, set forth in Sec. 984.203. This statement must include a
description of how the HA's selection procedures ensure that families
will be selected without regard to race, color, religion, sex,
handicap, familial status, or national origin.
(5) Incentives to encourage participation--a description of the
incentives that the HA intends to offer eligible families to encourage
their participation in the FSS program (incentives plan). The
incentives plan shall provide for the establishment of the FSS account
in accordance with the requirements set forth in Sec. 984.305, and
other incentives, if any, designed by the HA. The incentives plan shall
be part of the Action Plan.
(6) Outreach efforts. A description of:
(i) The HA's efforts, including notification and outreach efforts,
to recruit FSS participants from among eligible families; and
(ii) The HA's actions to be taken to assure that both minority and
non-minority groups are informed about the FSS program, and how the HA
will make this information known.
(7) FSS activities and supportive services. A description of the
activities and supportive services to be provided by both public and
private resources to FSS families, and identification of the public and
private resources which are expected to provide the supportive
services.
(8) Method for identification of family support needs. A
description of how the FSS program will identify the needs and deliver
the services and activities according to the needs of the FSS families;
(9) Program termination; withholding of services; and available
grievance procedures. A description of the HA's policies concerning:
terminating participation in the FSS program, withholding of supportive
services, or terminating or withholding Section 8 assistance, on the
basis of a family's failure to comply with the requirements of the
contract of participation; and the grievance and hearing procedures
available for FSS families.
(10) Assurances of non-interference with rights of non-
participating families. An assurance that a family's election not to
participate in the FSS program will not affect the family's admission
to public housing or to the Section 8 program or the family's right to
occupancy in accordance with its lease.
(11) Timetable for program implementation. A timetable for
implementation of the FSS program, as provided in Sec. 984.301(a)(1),
including the schedule for filling FSS slots with eligible FSS
families, as provided in Sec. 984.301;
(12) Certification of coordination. A certification that
development of the services and activities under the FSS program has
been coordinated with the JOBS Program; the programs provided under the
JTPA; and any other relevant employment, child care, transportation,
training, and education programs (e.g., Job Training for the Homeless
Demonstration program) in the applicable area, and that implementation
will continue to be coordinated, in order to avoid duplication of
services and activities; and
(13) Optional additional information. Such other information that
would help HUD determine the soundness of the HA's proposed FSS
program.
(e) Eligibility of a combined program. An HA that wishes to operate
a joint FSS program with other HAs may combine its resources with one
or more HAs to deliver supportive services under a joint Action Plan
that will provide for the establishment and operation of a combined FSS
program that meets the requirements of this part.
(f) Single action plan. HAs implementing both a Section 8 FSS
program and a public or Indian housing FSS program may submit one
Action Plan.
Sec. 984.202 Program Coordinating Committee (PCC).
(a) General. Each participating HA must establish a PCC whose
functions will be to assist the HA in securing commitments of public
and private resources for the operation of the FSS program within the
HA's jurisdiction, including assistance in developing the Action Plan
and in implementing the program.
(b) Membership--(1) Required membership. The PCC must: (i) For a
public housing FSS program, consist of representatives of the PHA, and
the residents of public housing. The public housing resident
representatives shall be solicited from one or more of the following
groups:
(A) An area-wide or city-wide resident council, if one exists;
(B) If the PHA will be transferring FSS participants to vacant
units in a specific public housing development, the resident council or
resident management corporation, if one exists, of the public housing
development where the public housing FSS program is to be carried out;
(C) Any other public housing resident group, which the PHA believes
is interested in the FSS program, and would contribute to the
development and implementation of the FSS program; and
(ii) For a Section 8 FSS program, consist of representatives of the
HA, and of residents assisted under the section 8 rental certificate or
rental voucher program or under HUD's public or Indian housing
programs.
(2) Recommended membership. Membership on the PCC also may include
representatives of the unit of general local government served by the
HA, local agencies (if any) responsible for carrying out JOBS training
programs, or programs under the JTPA, and other organizations, such as
other State, local or tribal welfare and employment agencies, public
and private education or training institutions, child care providers,
nonprofit service providers, private business, and any other public and
private service providers with resources to assist the FSS program.
(c) Alternative committee. The HA may, in consultation with the
chief executive officer of the unit of general local government served
by the HA, utilize an existing entity as the PCC if the membership of
the existing entity consists or will consist of the individuals
identified in paragraph (b)(1) of this section, and also includes
individuals from the same or similar organizations identified in
paragraph (b)(2) of this section.
Sec. 984.203 FSS family selection procedures.
(a) Preference in the FSS selection process. An HA has the option
of giving a selection preference for up to 50 percent of its public
housing FSS slots and of its Section 8 FSS slots respectively to
eligible families, as defined in Sec. 984.103, who have one or more
family members currently enrolled in an FSS related service program or
on the waiting list for such a program. The HA may limit the selection
preference given to participants in and applicants for FSS related
service programs to one or more eligible FSS related service
[[Page 8819]]
programs. An HA that chooses to exercise the selection preference
option must include the following information in its Action Plan:
(1) The percentage of FSS slots, not to exceed 50 percent of the
total number of FSS slots for each of its FSS programs, for which it
will give a selection preference;
(2) The FSS related service programs to which it will give a
selection preference to the programs' participants and applicants; and
(3) The method of outreach to, and selection of, families with one
or more members participating in the identified programs.
(b) FSS selection without preference. For those FSS slots for which
the HA chooses not to exercise the selection preference provided in
paragraph (a) of this section, the FSS slots must be filled with
eligible families in accordance with an objective selection system,
such as a lottery, the length of time living in subsidized housing, or
the date the family expressed an interest in participating in the FSS
program. The objective system to be used by the HA must be described in
the HA's Action Plan.
(c) Motivation as a selection factor--(1) General. An HA may screen
families for interest, and motivation to participate in the FSS
program, provided that the factors utilized by the HA are those which
solely measure the family's interest, and motivation to participate in
the FSS program.
(2) Permissible motivational screening factors. Permitted
motivational factors include requiring attendance at FSS orientation
sessions or preselection interviews, and assigning certain tasks which
indicate the family's willingness to undertake the obligations which
may be imposed by the FSS contract of participation. However, any tasks
assigned shall be those which may be readily accomplishable by the
family, based on the family members' educational level, and
disabilities, if any. Reasonable accommodations must be made for
individuals with mobility, manual, sensory, speech impairments, mental
or developmental disabilities.
(3) Prohibited motivational screening factors. Prohibited
motivational screening factors include the family's educational level,
educational or standardized motivational test results, previous job
history or job performance, credit rating, marital status, number of
children, or other factors, such as sensory or manual skills, and any
factors which may result in discriminatory practices or treatment
toward individuals with disabilities or minority or non-minority
groups.
Sec. 984.204 On-site facilities.
Each HA may, subject to the approval of HUD, make available and
utilize common areas or unoccupied dwelling units in public housing
projects (or for IHAs, in Indian housing projects) to provide
supportive services under an FSS program, including a Section 8 FSS
program.
Subpart C--Program Operation
Sec. 984.301 Program implementation.
(a) Program implementation deadline--(1) Program start-up. Except
as provided in paragraph (a)(3) of this section, operation of a local
FSS program must begin within 12 months of the earlier of notification
to the HA of HUD's approval of the incentive award units or of other
funding that establishes the obligation to operate an FSS program.
Operation means that activities such as outreach, participant
selection, and enrollment have begun. Full delivery of the supportive
services to be provided to the total number of families required to be
served under the program need not occur within 12 months, but must
occur by the deadline set forth in paragraph (a)(2) of this section.
(2) Full enrollment and delivery of service. Except as provided in
paragraph (a)(3) of this section, the HA must have completed enrollment
of the total number of families required to be served under the FSS
program (based on the minimum program size), and must have begun
delivery of the supportive services within two years from the date of
notification of approval of the application for new public housing
units for a public housing FSS program or for new rental certificates
or rental vouchers for a Section 8 FSS program.
(3) Extension of program deadlines for good cause. HUD may extend
the deadline set forth in either paragraph (a)(1) or paragraph (a)(2)
of this section if the HA requests an extension, and HUD determines
that, despite best efforts on the part of the HA, the development of
new public housing units will not occur within the deadlines set forth
in this paragraph (a), the commitment by public or private resources to
deliver supportive services has been withdrawn, the delivery of such
services has been delayed, or other local circumstances warrant an
extension of the deadlines set forth in this paragraph (a).
(b) Program administration. An HA may employ appropriate staff,
including a service coordinator or program coordinator to administer
its FSS program, and may contract with an appropriate organization to
establish and administer the FSS program, including the FSS account, as
provided by Sec. 984.305.
Sec. 984.302 Administrative fees.
(a) Public housing FSS program. The performance funding system
(PFS), provided under section 9(a) of the 1937 Act, shall provide for
the inclusion of reasonable and eligible administrative costs incurred
by PHAs in carrying out the minimum program size of the public housing
FSS programs. These costs are subject to appropriations by the
Congress. However, a PHA may use other resources for this purpose.
(b) Section 8 FSS program. The administrative fees paid to HAs for
HUD-approved costs associated with operation of an FSS program are
established by the Congress and subject to appropriations.
Sec. 984.303 Contract of participation.
(a) General. Each family that is selected to participate in an FSS
program must enter into a contract of participation with the HA that
operates the FSS program in which the family will participate. The
contract of participation shall be signed by the head of the FSS
family.
(b) Form and content of contract--(1) General. The contract of
participation, which incorporates the individual training and services
plan(s), shall be in the form prescribed by HUD, and shall set forth
the principal terms and conditions governing participation in the FSS
program, including the rights and responsibilities of the FSS family
and of the HA, the services to be provided to, and the activities to be
completed by, the head of the FSS family and each adult member of the
family who elects to participate in the program.
(2) Interim goals. The individual training and services plan,
incorporated in the contract of participation, shall establish specific
interim and final goals by which the HA, and the family, may measure
the family's progress toward fulfilling its obligations under the
contract of participation, and becoming self-sufficient. For each
participating FSS family that is a recipient of welfare assistance, the
HA must establish as an interim goal that the family become independent
from welfare assistance and remain independent from welfare assistance
at least one year before the expiration of the term of the contract of
participation, including any extension thereof.
(3) Compliance with lease terms. The contract of participation
shall provide that one of the obligations of the FSS family is to
comply with the terms and
[[Page 8820]]
conditions of the respective public housing lease or Section 8-assisted
lease.
(4) Employment obligation--(i) Head of family's obligation. The
head of the FSS family shall be required under the contract of
participation to seek and maintain suitable employment during the term
of the contract and any extension thereof. Although other members of
the FSS family may seek and maintain employment during the term of the
contract, only the head of the FSS family is required to seek and
maintain suitable employment.
(ii) Seek employment. The obligation to seek employment means that
the head of the FSS family has applied for employment, attended job
interviews, and has otherwise followed through on employment
opportunities.
(iii) Determination of suitable employment. A determination of
suitable employment shall be made by the HA based on the skills,
education, and job training of the individual that has been designated
the head of the FSS family, and based on the available job
opportunities within the jurisdiction served by the HA.
(5) Consequences of noncompliance with the contract. The contract
of participation shall specify that if the FSS family fails to comply,
without good cause, with the terms and conditions of the contract of
participation, which includes compliance with the public housing lease
or the Section 8-assisted lease, the HA may:
(i) Withhold the supportive services;
(ii) Terminate the family's participation in the FSS program; or
(iii) For the Section 8 FSS program, terminate or withhold the
family's Section 8 assistance, except in the case where the only basis
for noncompliance with the contract of participation is noncompliance
with the lease, or failure to become independent from welfare
assistance. However, failure to become independent from welfare
assistance because of failure of the head of household to meet the
employment obligation described in paragraph (a)(4) of this section, or
failure of the FSS family to meet any other obligation under the
contract of participation, except the interim goal concerning welfare
assistance, is grounds for the HA to terminate or withhold Section 8
assistance.
(c) Contract term. The contract of participation shall provide that
each FSS family will be required to fulfill those obligations to which
the participating family has committed itself under the contract of
participation no later than 5 years after the effective date of the
contract.
(d) Contract extension. The HA shall, in writing, extend the term
of the contract of participation for a period not to exceed two years
for any FSS family that requests, in writing, an extension of the
contract, provided that the HA finds that good cause exists for
granting the extension. The family's written request for an extension
must include a description of the need for the extension. As used in
this paragraph (d), ``good cause'' means circumstances beyond the
control of the FSS family, as determined by the HA, such as a serious
illness or involuntary loss of employment. Extension of the contract of
participation will entitle the FSS family to continue to have amounts
credited to the family's FSS account in accordance with Sec. 984.304.
(e) Unavailability of supportive services--(1) Good faith effort to
replace unavailable services. If a social service agency fails to
deliver the supportive services pledged under an FSS family member's
individual training and services plan, the HA shall make a good faith
effort to obtain these services from another agency.
(2) Assessment of necessity of services. If the HA is unable to
obtain the services from another agency, the HA shall reassess the
family member's needs, and determine whether other available services
would achieve the same purpose. If other available services would not
achieve the same purpose, the HA shall determine whether the
unavailable services are integral to the FSS family's advancement or
progress toward self-sufficiency. If the unavailable services are:
(i) Determined not to be integral to the FSS family's advancement
toward self-sufficiency, the HA shall revise the individual training
and services plan to delete these services, and modify the contract of
participation to remove any obligation on the part of the FSS family to
accept the unavailable services, in accordance with paragraph (f) of
this section; or
(ii) Determined to be integral to the FSS family's advancement
toward self-sufficiency (which may be the case if the affected family
member is the head of the FSS family), the HA shall declare the
contract of participation null and void. Nullification of the contract
of participation on the basis of unavailability of supportive services
shall not be grounds for termination of Section 8 assistance.
(f) Modification. The HA and the FSS family may mutually agree to
modify the contract of participation. The contract of participation may
be modified in writing with respect to the individual training and
services plans, the contract term in accordance with paragraph (d) of
this section, and designation of the head of the family.
(g) Completion of the contract. The contract of participation is
considered to be completed, and a family's participation in the FSS
program is considered to be concluded when one of the following occurs:
(1) The FSS family has fulfilled all of its obligations under the
contract of participation on or before the expiration of the contract
term, including any extension thereof; or
(2) 30 percent of the monthly adjusted income of the FSS family
equals or exceeds the published existing housing fair market rent for
the size of the unit for which the FSS family qualifies based on the
HA's occupancy standards. The contract of participation will be
considered completed and the family's participation in the FSS program
concluded on this basis even though the contract term, including any
extension thereof, has not expired, and the family members who have
individual training and services plans have not completed all the
activities set forth in their plans.
(h) Termination of the contract. The contract of participation is
automatically terminated if the family's Section 8 assistance is
terminated in accordance with HUD requirements. The contract of
participation may be terminated before the expiration of the contract
term, and any extension thereof, by:
(1) Mutual consent of the parties;
(2) The failure of the FSS family to meet its obligations under the
contract of participation without good cause, including in the Section
8 FSS program the failure to comply with the contract requirements
because the family has moved outside the jurisdiction of the HA;
(3) The family's withdrawal from the FSS program;
(4) Such other act as is deemed inconsistent with the purpose of
the FSS program; or
(5) Operation of law.
(i) Option to terminate Section 8 housing and supportive service
assistance. The HA may terminate or withhold Section 8 housing
assistance, the supportive services, and the FSS family's participation
in the FSS program, if the HA determines, in accordance with the
hearing procedures provided in 24 CFR 982.555 that the FSS family has
failed to comply without good cause with the requirements of the
contract of participation as provided in paragraph (b)(5) of this
section.
[[Page 8821]]
(j) Transitional supportive service assistance. An HA may continue
to offer to a former FSS family who has completed its contract of
participation and whose head of family is employed, appropriate FSS
supportive services in becoming self-sufficient (if the family still
resides in public housing, or Section 8-assisted housing), or in
remaining self-sufficient (if the family no longer resides in public,
Section 8-assisted housing, or other assisted housing).
Sec. 984.304 Total tenant payment, family rent, and increases in
family income.
(a)(1) Public housing FSS program: Calculation of total tenant
payment. Total tenant payment for a family participating in the public
housing FSS program is determined in accordance with the regulations
set forth in 24 CFR part 913.
(2) Section 8 FSS program: Calculation of family rent. For the
rental certificate program, total tenant payment for a family
participating in the Section 8 FSS program and the amount of the
housing assistance payment is determined in accordance with the
regulations set forth in 24 CFR parts 813 and 882. For the rental
voucher program, the housing assistance payment for a family
participating in the FSS program is determined in accordance with the
regulations set forth in 24 CFR part 887.
(b) Increases in FSS family income. Any increase in the earned
income of an FSS family during its participation in an FSS program may
not be considered as income or a resource for purposes of eligibility
of the FSS family for other benefits, or amount of benefits payable to
the FSS family, under any other program administered by HUD, unless the
income of the FSS family equals or exceeds 80 percent of the median
income of the area (as determined by HUD, with adjustments for smaller
and larger families).
Sec. 984.305 FSS account.
(a) Establishment of FSS account--(1) General. The HA shall deposit
the FSS account funds of all families participating in the HA's FSS
program into a single depository account. The HA must deposit the FSS
account funds in one or more of the HUD-approved investments.
(2) Accounting for FSS account funds--(i) Accounting records. The
total of the combined FSS account funds will be supported in the HA
accounting records by a subsidiary ledger showing the balance
applicable to each FSS family. During the term of the contract of
participation, the HA shall credit periodically, but not less than
annually, to each family's FSS account, the amount of the FSS credit
determined in accordance with paragraph (b) of this section.
(ii) Proration of investment income. The investment income for
funds in the FSS account will be prorated and credited to each family's
FSS account based on the balance in each family's FSS account at the
end of the period for which the investment income is credited.
(iii) Reduction of amounts due by FSS family. If the FSS family has
not paid the family contribution towards rent, or other amounts, if
any, due under the public housing or section 8-assisted lease, the
balance in the family's FSS account shall be reduced by that amount (as
reported by the owner to the HA in the Section 8 FSS program) before
prorating the interest income. If the FSS family has fraudulently
under-reported income, the amount credited to the FSS account will be
based on the income amounts originally reported by the FSS family.
(3) Reporting on FSS account. Each HA will be required to make a
report, at least once annually, to each FSS family on the status of the
family's FSS account. At a minimum, the report will include:
(i) The balance at the beginning of the reporting period;
(ii) The amount of the family's rent payment that was credited to
the FSS account, during the reporting period;
(iii) Any deductions made from the account for amounts due the HA
before interest is distributed;
(iv) The amount of interest earned on the account during the year;
and
(v) The total in the account at the end of the reporting period.
(b) FSS credit--(1) Computation of amount. For purposes of
determining the FSS credit, ``family rent'' is: for the public housing
program, the total tenant payment as defined in 24 CFR part 913; for
the rental certificate program, the total tenant payment as defined in
24 CFR part 813; and for the rental voucher program, 30 percent of
adjusted monthly income. The FSS credit shall be computed as follows:
(i) For FSS families who are very low-income families, the FSS
credit shall be the amount which is the lesser of:
(A) Thirty percent of current monthly adjusted income less the
family rent, which is obtained by disregarding any increases in earned
income (as defined in Sec. 984.103) from the effective date of the
contract of participation; or
(B) The current family rent less the family rent at the time of the
effective date of the contract of participation.
(ii) For FSS families who are low-income families but not very low-
income families, the FSS credit shall be the amount determined
according to paragraph (b)(1)(i) of this section, but which shall not
exceed the amount computed for 50 percent of median income.
(2) Ineligibility for FSS credit. FSS families who are not low-
income families shall not be entitled to any FSS credit.
(3) Cessation of FSS credit. The HA shall not make any additional
credits to the FSS family's FSS account when the FSS family has
completed the contract of participation, as defined in Sec. 984.303(g),
or when the contract of participation is terminated or otherwise
nullified.
(c) Disbursement of FSS account funds--(1) General. The amount in
an FSS account, in excess of any amount owed to the HA by the FSS
family, as provided in paragraph (a)(3)(iii) of this section, shall be
paid to the head of the FSS family when the contract of participation
has been completed as provided in Sec. 984.303(g), and if, at the time
of contract completion, the head of the FSS family submits to the HA a
certification, as defined in Sec. 984.103, that, to the best of his or
her knowledge and belief, no member of the FSS family is a recipient of
welfare assistance.
(2) Disbursement before expiration of contract term. (i) If the HA
determines that the FSS family has fulfilled its obligations under the
contract of participation before the expiration of the contract term,
and the head of the FSS family submits a certification that, to the
best of his or her knowledge, no member of the FSS family is a
recipient of welfare assistance, the amount in the family's FSS
account, in excess of any amount owed to the HA by the FSS family, as
provided in paragraph (a)(3)(iii) of this section, shall be paid to the
head of the FSS family.
(ii) If the HA determines that the FSS family has fulfilled certain
interim goals established in the contract of participation and needs a
portion of the FSS account funds for purposes consistent with the
contract of participation, such as completion of higher education
(i.e., college, graduate school), or job training, or to meet start-up
expenses involved in creation of a small business, the HA may, at the
HA's sole option, disburse a portion of the funds from the family's FSS
account to assist the family meet those expenses.
(3) Verification of family certification. Before disbursement of
the FSS account funds to the family, the HA may verify that the FSS
family is no longer a recipient of welfare assistance by
[[Page 8822]]
requesting copies of any documents which may indicate whether the
family is receiving any welfare assistance, and contacting welfare
agencies.
(d) Succession to FSS account. If the head of the FSS family ceases
to reside with other family members in the public housing or the
Section 8-assisted unit, the remaining members of the FSS family, after
consultation with the HA, shall have the right to designate another
family member to receive the funds in accordance with paragraph (c) (1)
or (2) of this section.
(e) Use of FSS account funds for homeownership. A public housing
FSS family may use its FSS account funds for the purchase of a home,
including the purchase of a home under one of HUD's homeownership
programs, or other Federal, State, or local homeownership programs
unless such use is prohibited by the statute or regulations governing
the particular homeownership program.
(f) Forfeiture of FSS account funds--(1) Conditions for forfeiture.
Amounts in the FSS account shall be forfeited upon the occurrence of
the following:
(i) The contract of participation is terminated, as provided in
Sec. 984.303(e) or Sec. 984.303(h); or
(ii) The contract of participation is completed by the family, as
provided in Sec. 984.303(g), but the FSS family is receiving welfare
assistance at the time of expiration of the term of the contract of
participation, including any extension thereof.
(2) Treatment of forfeited FSS account funds--(i) Public housing
FSS program. FSS account funds forfeited by the FSS family will be
credited to the PHA's operating reserves and counted as other income in
the calculation of the PFS operating subsidy eligibility for the next
budget year.
(ii) Section 8 FSS program. FSS account funds forfeited by the FSS
family will be treated as program receipts for payment of program
expenses under the HA budget for the applicable Section 8 program, and
shall be used in accordance with HUD requirements governing the use of
program receipts.
Sec. 984.306 Section 8 residency and portability requirements.
(a) Relocating FSS family. For purposes of this section, the term
``relocating FSS family'' refers to an FSS family that moves from the
jurisdiction of an HA at least 12 months after signing its contract of
participation.
(b) Initial occupancy. A family participating in the Section 8 FSS
program must lease an assisted unit, for a minimum period of 12 months
after the effective date of the contract of participation, in the
jurisdiction of the HA which selected the family for the FSS program.
Thereafter, the FSS family may move outside the jurisdiction of the
initial HA consistent with the regulations of 24 CFR part 982.
(c) Portability: relocation but continued participation in the FSS
program of the initial HA--(1) General. A relocating FSS family may
continue in the FSS program of the initial HA if the family
demonstrates to the satisfaction of the initial HA that,
notwithstanding the move, the relocating FSS family will be able to
fulfill its responsibilities under the initial or modified contract of
participation at its new place of residence. (For example, the FSS
family may be able to commute to the supportive services specified in
the contract of participation, or the family may move to obtain
employment as specified in the contract.)
(2) Single contract of participation. If the relocating family
remains in the FSS program of the initial HA, there will only be one
contract of participation, which shall be the contract executed by the
initial HA.
(d) Portability: relocation and participation in the FSS program of
the receiving HA--(1) General. A relocating FSS family may participate
in the FSS program of the receiving HA, if the receiving HA allows the
family to participate in its program. An HA is not obligated to enroll
a relocating FSS family in its FSS program.
(2) Two contracts of participation. If the receiving HA allows the
relocating FSS family to participate in its FSS program, the receiving
HA will enter into a new contract of participation with the FSS family
for the term on the remaining contract with the initial HA. The initial
HA will terminate its contract of participation with the family.
(e) Single FSS account. Regardless of whether the relocating FSS
family remains in the FSS program of the initial HA or is enrolled in
the FSS program of the receiving HA, there will be a single FSS account
which will be maintained by the initial HA. When an FSS family will be
absorbed by the receiving HA, the initial HA will transfer the family's
FSS account to the receiving HA.
(f) FSS program termination; loss of FSS account; and termination
of Section 8 assistance. (1) If an FSS family that relocates to another
jurisdiction, as provided under this section, is unable to fulfill its
obligations under the contract of participation, or any modifications
thereto, the HA, which is party to the contract of participation, may:
(i) Terminate the FSS family from the FSS program and the family's
FSS account will be forfeited; and
(ii) Terminate the FSS family's Section 8 assistance on the ground
that the family failed to meet its obligations under the contract of
participation.
(2) In the event of forfeiture of the family's FSS account, the
funds in the family's FSS account will revert to the HA maintaining the
FSS account for the family.
Subpart D--Reporting
Sec. 984.401 Reporting.
Each HA that carries out an FSS program under this part shall
submit to HUD, in the form prescribed by HUD, a report regarding its
FSS program. The report shall include the following information:
(a) A description of the activities carried out under the program;
(b) A description of the effectiveness of the program in assisting
families to achieve economic independence and self-sufficiency;
(c) A description of the effectiveness of the program in
coordinating resources of communities to assist families to achieve
economic independence and self-sufficiency; and
(d) Any recommendations by the HA or the appropriate local program
coordinating committee for legislative or administrative action that
would improve the FSS program and ensure the effectiveness of the
program.
Dated: February 26, 1996.
Kevin E. Marchman,
Acting Assistant Secretary for Public and Indian Housing.
[FR Doc. 96-4908 Filed 3-4-96; 8:45 am]
BILLING CODE 4210-33-P
Complete official Federal Register PDF
FR Doc. 96-4814 Streamlining the Comprehensive Improvement Assistance Program and Comprehensive Grant Program
[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Pages 8712-8748]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4814]
[[Page 8711]]
_______________________________________________________________________
Part II
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Part 941, et al.
_______________________________________________________________________
Streamlining the Comprehensive Improvement Assistance and Comprehensive
Grant Programs; Final Rule
Federal Register / Vol. 61, No. 44 / Tuesday, March 5, 1996 / Rules
and Regulations
[[Page 8712]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Public and Indian Housing
24 CFR Parts 941, 950, 965, and 968
[Docket No. FR-3967-F-01]
RIN 2577-AB59
Streamlining the Comprehensive Improvement Assistance Program and
Comprehensive Grant Program
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rule amends 24 CFR parts 950 (formerly 905) and 968 to
streamline, simplify and eliminate unnecessary requirements for the
Department's two modernization programs used in the public housing and
Indian housing programs. The Comprehensive Improvement Assistance
Program (CIAP) is used by Public Housing Agencies (PHAs) and Indian
Housing Authorities (IHAs) that own or operate fewer than 250 public
housing units. The Comprehensive Grant Program (CGP) is used by PHAs
and IHAs that own or operate 250 or more public housing units.
The rule also combines into provisions of a part dealing with
general provisions applicable to PHA-owned projects (part 965) the
nearly identical provisions concerning prevailing wage rates that have
been found in the development and modernization parts for public
housing (parts 941 and 968).
EFFECTIVE DATE: April 4, 1996.
FOR FURTHER INFORMATION CONTACT:
For Public Housing: William J. Flood, Director, Office of Capital
Improvements, Public and Indian Housing, Department of Housing and
Urban Development, Room 4134, 451 Seventh Street, S.W., Washington,
D.C. 20410-5000, telephone (202) 708-1640.
For Indian Housing: Deborah M. LaLancette, Director, Housing
Management Division, Office of Native American Programs, Public and
Indian Housing, Room B-133, Department of Housing and Urban
Development, 451 Seventh Street S.W., Washington, D.C. 20410, telephone
(202) 755-0088.
Hearing- or speech-impaired persons may use the Telecommunications
Devices for the Deaf (TDD) by contacting the Federal Information Relay
Service on 1-800-877-TDDY (1-800-877-8339) or (202) 708-9300. (Other
than the ``800'' TDD number, telephone numbers are not toll-free.)
SUPPLEMENTARY INFORMATION:
I. Paperwork Burden
The information collection requirements contained in this rule
remain essentially unchanged. They are merely moved to different
section numbers as part of this consolidation effort. (See
Secs. 950.618, 950.622, 950.630, 950.632, 950.634, 950.636, 968.135,
968.145, 968.210, 968.215, 968.225, and 968.230, previously approved by
the Office of Management and Budget (OMB) in accordance with the
Paperwork Reduction Act (44 U.S.C. 3501-3520) under OMB control number
2577-0044 (CIAP). See also Secs. 950.650, 950.656, 950.658, 968.310,
968.325, and 968.330, previously approved by OMB under control number
2577-0157 (CGP).)
II. Background
Upon assuming the leadership of the Department of Housing and Urban
Development (HUD) in 1993, Secretary Cisneros made the reinvention of
HUD one of his first priorities. HUD's reinvention efforts took place
in the context of a broader, government-wide reinvention process, the
National Performance Review, under the leadership of Vice President
Gore. At that time, HUD established five program goals to accomplish
its mission that involved working for healthy growth in cities,
providing adequate housing for all, and protection of society's most
vulnerable people.
HUD determined that one of the first steps needed in its
transformation from the old HUD to a new HUD was the consolidation and
streamlining of funding programs. HUD recently submitted to Congress
sweeping changes to transform public housing to a resident-based
program.
Another aspect of the reinvention involves HUD's rules, which have
been at the forefront of HUD's reinvention efforts since those efforts
commenced in 1993. The foundation of HUD's regulatory process is
Executive Order 12866 (Regulatory Planning and Review) issued by
President Clinton on September 30, 1993. This order directs agencies
to, among other things, explore regulatory alternatives and, if
regulations are determined to be necessary, to select approaches that
maximize benefits and involve enhanced public accessibility and
participation in the rulemaking process.
HUD has done a comprehensive review of 24 CFR part 968, Public
Housing Modernization. Part 968 contains 3 subparts, covering general
requirements and separate requirements for the Comprehensive
Improvement Assistance Program (CIAP) and Comprehensive Grant Program
(CGP). Based on its comprehensive review, HUD has determined that
certain provisions from CIAP and CGP can be consolidated in the general
provisions, subpart A. HUD also has determined that there are a number
of revisions that should be made to simplify subpart B for CIAP and
subpart C for CGP. Similar changes are also being made to 24 CFR part
950, subpart I, which covers the modernization program requirements for
Indian Housing.
In addition to the simplifications mentioned above and described in
more detail in Part III below, the Department is also responding in
this rule to public comments received on the interim CIAP rule
published March 15, 1993 (58 FR 13916). This rule also makes changes
resulting from experience gained during the Federal Fiscal Years (FFYs)
1993, 1994, and 1995 funding competitions (see Part IV below).
[The reader should note that, hereafter, for ease of discussion,
the preamble to this final rule uses the term ``housing authorities
(HAs)'' to refer to both public housing agencies (PHAs) and Indian
Housing Authorities (IHAs) and the term ``public housing'' to refer to
both Public and Indian housing, unless otherwise stated. In addition,
the term ``development'' is used to refer to ``low-income projects,''
as defined at section 3(b)(l) of the Act.]
III. Reinvention Changes for CIAP and CGP
As a part of other pending rulemakings, various Federal
requirements that are applicable to a number of the Department's
programs, including modernization, are being moved to Department-wide
common rules. One example of such provisions are those now contained in
Sec. 968.110, Other Federal requirements.
The current section covers civil rights compliance, minority and
women's business enterprise opportunity, lead-based paint poisoning
prevention, environmental clearance, flood insurance, and wage rates,
as well as audits, uniform administrative requirements, and energy
conservation. Most of the civil rights authorities, including
references to minority and women's business enterprise opportunity,
have been consolidated into the Department-wide rule (24 CFR part 5)
listing provisions applicable to all of the Department's programs. That
rulemaking revised Sec. 968.110 to refer to the Department-wide rule,
leaving a few additional authorities in Sec. 968.110(a). Another
pending rulemaking addresses
[[Page 8713]]
the applicability of lead-based paint poisoning prevention.
This rulemaking also revises Sec. 968.110 as follows:
Sec. 968.110(i), Audits, is being moved to a new Sec. 968.145, Fiscal
closeout; Sec. 968.110(j), Uniform administrative requirements, is
being moved to a new Sec. 968.135, Contracting requirements;
Sec. 968.110(l), Energy conservation, is being moved to a revised
Sec. 968.115, Modernization and energy conservation standards; and the
cross-reference in paragraph (e)(3) for preemption of prevailing wage
rates is changed to 24 CFR 965.101. (Section 965.101 is amended in this
rulemaking to broaden the coverage of its preemption of prevailing wage
rates to extend to development and modernization, as well as to
operations.)
Existing Sec. 968.120, dealing with preemption of State prevailing
wage requirements, is being moved to and combined with Sec. 965.101.
The Indian housing program is not affected by the consolidation of
general provisions by the other pending rulemaking. Consequently,
Sec. 950.120 still contains comparable provisions.
IV. Relation of Current Regulations Sections to Final Rule Sections
The following chart shows the locations of similar provisions:
------------------------------------------------------------------------
New section Current sections
------------------------------------------------------------------------
950.604............................. 950.601
950.606............................. 950.667
950.608............................. 950.615, 950.666
950.610............................. 950.603
950.612............................. [New provision]
950.614............................. 950.635
950.616............................. 950.639
950.618............................. 950.642
950.620............................. 950.645
950.622............................. 950.657
950.630............................. 950.618
950.632............................. 950.624
950.634............................. 950.648
950.636............................. 950.651
950.638............................. [New provision]
950.640............................. 950.654, 950.675
950.650............................. 950.669
950.652............................. 950.672
950.654............................. 950.675
950.656............................. 950.678
950.658............................. 950.684
950.660............................. 950.687
968.104............................. 968.312
968.112............................. 968.210, 968.310
968.125............................. 968.225
968.130............................. 968.230
968.135............................. 968.235
968.140............................. 968.240
968.145............................. 968.260
968.210............................. 968.215
968.215............................. 968.220
968.225............................. 968.245
968.230............................. 968.250
968.235............................. [New provision]
968.240............................. 968.345
968.310............................. 968.315
968.315............................. 968.320
968.320............................. 968.325
968.325............................. 968.330
968.330............................. 968.340
968.335............................. 968.345
------------------------------------------------------------------------
V. Public Comments and Description of the Simplified CIAP
A. Public Comments
The Department received public comments on the March 1993 interim
rule from four HAs and two HA interest groups (National Association of
Housing and Redevelopment Officials (NAHRO) and Public Housing
Authorities Directors Association (PHADA)). The commenters agreed that
HUD has made substantial progress in simplifying the CIAP, and pointed
out additional areas for simplification or clarification.
Relocation requirements. The March 1993 interim rule revised parts
905 (now 950) and 968 by updating the displacement, relocation and
acquisition requirements pursuant to the Uniform Relocation Assistance
and Real Property Acquisition Policies Act of 1970, as amended, and by
removing the relocation requirements from the ``Other program
requirements'' sections and creating separate sections for the
relocation requirements at new Secs. 905.117 (now 950.117) and 968.108.
Comment: PHADA and two HAs recommended that HUD be required to
respond to an HA's request for a determination of coverage under the
relocation requirements (Secs. 968.108(g)(3) and 950.117(g)(3)) within
30 calendar days or within a longer stated period or provide a rebuttal
period or the HA's interpretation would be accepted as final.
Response: The Department agrees that dialogue between HUD and an HA
is important and should start in the planning stage. Technical
assistance on relocation matters is readily available from Community
Planning and Development relocation staff in HUD Field Offices. HUD
will make every effort to respond promptly to HA requests for
assistance. However, HUD cannot restrict the time period for a response
as suggested. HUD's relocation rules implementing statutory
requirements guaranteeing benefits to eligible persons cannot be
amended by this rulemaking. In fact, HUD relies on regulations issued
by the Department of Transportation for government-wide requirements,
at 49 CFR part 24 (see 24 CFR part 42). A delay in HUD's response does
not relieve an HA of its responsibility to comply with the Uniform
Relocation Act, where applicable.
Definition of modernization capability. Comment: PHADA commented
that the determination of no modernization capability be afforded an
appeal to the Regional Administrator, and that HUD be required to
inform the HA as to why the determination was made and what facts the
determination is based on. Response: With regard to the Public Housing
Management Assessment Program (PHMAP), the PHA may appeal its score on
the Modernization indicator to the Field Office; if that appeal is
denied, the PHA may appeal to HUD Headquarters. The HUD reorganization
eliminated the Regional Offices. With regard to the CIAP technical
review factor of modernization capability, HUD will provide guidance in
the revised CIAP Handbook on how Field Offices should score the
technical review factors, including modernization capability, to ensure
greater uniformity among Field Offices. In addition, HUD has made
clarifying changes to the definitions of modernization capability at
Secs. 950.102 and 968.205 to ensure that no arbitrary exclusion of
participation due to lack of modernization capability will occur.
Management improvement costs. Comment: PHADA agreed with HUD on
allowing CIAP programs composed solely of management improvements. Two
HAs questioned whether training related to management improvements is
eligible. Response: Training costs related to carrying out CIAP-
approved physical and management improvements are eligible. See
Secs. 950.608(g)(2)(ii) and 968.112(g)(2)(ii).
Comment: Two HAs also asked if office space and storage space are
eligible costs. Response: Such costs are eligible. See Secs. 950.608(c)
and 968.112(c).
Comment: PHADA indicated that some Field Offices have traditionally
frowned on management improvement requests. Response: This rule
clarifies that eligible management improvements, either development
specific or HA-wide, may be approved as single work items under Other
Modernization. In addition, this rule specifically states that the
establishment of a preventive maintenance system or improvement of an
existing system is an eligible management improvement. See
Secs. 950.608(g)(2)(v) and 968.112(g)(2)(v).
Reasonable cost and total development cost (TDC). Comment: PHADA
agreed with the definition of reasonable cost (hard costs not exceeding
90% of TDC) for most cases, but suggested exceptions for compliance
with accessibility requirements and
[[Page 8714]]
remedying environmental problems, such as asbestos and lead-based
paint. It was suggested that these types of situations are not taken
into account by the cost indices upon which TDC is based and,
therefore, should be excluded from the definition. In addition, many
IHAs with large numbers of homeownership (Mutual Help) units are
performing comprehensive-type, not piecemeal, modernization.
Response: The rule has been revised to use the previous definition
of reasonable cost (90% of TDC) and to handle any special cases on a
case-by-case basis. The Department had tried a method that allowed more
flexibility, which we have now determined to be inappropriate.
In the August 30, 1995, final rule streamlining the CGP, the
Department added a second method of determining cost reasonableness to
provide HAs with greater flexibility in determining the cost of
rehabilitation versus the cost of demolition and new development. HAs
could choose one of two methods which were: (1) unfunded modernization
hard costs do not exceed 90 percent of computed total development cost
(TDC); or (2) individual work items are reasonable in accordance with
National cost indices, adjusted by local conditions and the HA's own
recent procurement experience. During the FY 1995 program year, it
became evident that use of the second method was having unintended
consequences by allowing some very high cost developments to be
determined to have reasonable cost. This result is inappropriate in the
current environment of limited funding. Since it is clear that
resources for Public and Indian Housing will remain constrained, it is
incumbent on both the Department and the HAs to assure maximum return
for the dollars invested. It is not tolerable to allow large-scale
Federal investments to be made in properties which will remain
uneconomical or provide marginally suitable housing even after such
investments are made.
Accordingly, the Department has eliminated the second method of
determining cost reasonableness, but has provided that the 90 percent
of TDC limit may be exceeded where justified, and applied this
procedure to both CIAP and CGP. If the HA and the Field Office
recommend funding for a development which exceeds 90 percent of TDC,
the Field Office must submit written justification to Headquarters for
final decision.
Social services. Comment: PHADA and three HAs suggested that
eligible costs include the direct provision of social services, because
it is essential to enhance the living conditions and self-sufficiency
opportunities for residents of small HAs. It was suggested that HUD
allow start-up costs and reasonable operating costs for three years
conditioned on the HA being able to provide HUD up-front with a
reasonable plan for continuing the program after the CIAP funds are
expended. Response: Although the 1995 Rescissions Act expanded the
eligible activities that may be funded under Section 14 of the Act with
FFY 1995 and prior year modernization funds, to include the direct
provision of social services, there is no permanent statutory authority
for eligibility of such activities. Therefore, the rule excludes the
direct provision of social services from future year funding unless
otherwise provided by law. If a later appropriation act specifically
permits eligibility for these services, that change will be handled by
language in the Notices of Funding Availability for the affected years.
Program benefit. Comment: PHADA and four HAs questioned the program
benefit rules at Secs. 950.615(j)(3) and 968.210(j)(3) (now found in
Secs. 950.608(n)(3) and 968.112(n)(3)). Response: The rule provides
that where the physical or management improvement will benefit programs
other than Public or Indian housing, such as Section 8 or local
revitalization, eligible costs are limited to the amount directly
attributable to the Public or Indian Housing Program. CIAP assistance
must be used for the purposes expressed in the statute and not for
other programs or purposes. OMB Circular A-87 also requires this
program benefit rule. There is no statutory authority to use CIAP funds
to subsidize the Section 8 program as suggested.
Ineligible costs. Comment: PHADA and four HAs mentioned arguments
HAs have had with Field Offices regarding ineligible costs. The rule at
Secs. 950.615(k) and 968.210(k) stated that an HA shall not make luxury
improvements, or carry out any other ineligible activities, as
specified by HUD. Response: HUD has consulted with HA industry groups
on the eligibility and ineligibility of various work items. In January
1994, the Department revised its policy, under the Public Housing
Development Program and the CGP, on work items previously considered
amenities to provide HAs with maximum flexibility. The Department is
now extending that revised policy to the CIAP to allow work items that
are modest in design and cost, but still promote the blending in of
Public and Indian housing with the design and architecture of the
surrounding community by including amenities, quality materials and
design and landscaping features that are customary for the locality and
culture. However, no additional operating subsidy will be provided.
Accordingly, the CIAP provisions on ineligible costs at
Secs. 950.615(b) and 968.210(b) have been revised and moved to
Secs. 950.608(o) and 968.112(o) to incorporate this policy. The CGP
provisions on ineligible costs at Secs. 950.666(c) and 968.310(c) also
have been revised and moved to Secs. 950.608 and 968.112 to incorporate
this policy, consolidating in one section for IHAs and another for PHAs
the policy applicable to both the CIAP and CGP.
Administrative and maintenance space guidelines. Comment: PHADA and
three HAs commented that HUD needs to reexamine the standards for
allowable administrative and maintenance space. Response: HUD has
consulted with HA industry groups on this issue during the CGP
rulemaking. A survey by NAHRO concluded that the variation among HAs is
so great in terms of the programs which they operate for the benefit of
the Public or Indian Housing Program, it is impossible to establish
standards for such space. The Department agrees that establishing space
standards is very difficult and, accordingly, is eliminating the
maximum space guidelines for management, maintenance and community
space. Instead, Field Offices are given, at Secs. 950.608(c) and
968.112(c), the authority to approve space in accordance with the
general principles of program need and benefit, as well as sound
business practices.
Expedited NOFA publication. Comment: PHADA and two HAs urged HUD to
publish CIAP NOFAs within 60 days of passage of an Appropriations Act
or 30 calendar days from the start of a FFY, whichever is later,
assuming there are no major statutory changes adopted in the
Appropriations Act. Response: Secretary Cisneros has made expedited
publication of NOFAs a priority. However, the amount of funds available
for the CIAP each year cannot be determined until the modernization
formula is run. The formula determines the funding split between the
CIAP and the CGP. Revisions to the CGP (e.g., earlier update of the
Formula Characteristics Report for CGP agencies) have enabled the
Department to run the modernization formula earlier in the FFY, which,
in turn, has benefitted the CIAP. The Department will continue its
efforts to make CIAP funds available as soon as possible in the FFY.
Application process. Comment: PHADA suggested that a general format
[[Page 8715]]
should be developed by HUD to assist small HAs gather the information
being requested. Response: The CIAP Application form (HUD-52822)
provides a format for HAs to record their physical and management
improvement needs. The Department believes that any other format may be
burdensome to small HAs. The Department is open to the development of
guidance material which may be helpful to small HAs and welcomes
specific suggestions.
Replacement estimate for equipment, systems or structural elements.
Comment: PHADA and two HAs questioned why the CIAP Application required
identification of a cost estimate for the equipment, systems or
structural elements which would normally be replaced over the remaining
period of the Annual Contributions Contract (ACC) or during the 30-year
period beginning on the date of submission of the application.
Response: This was a burdensome statutory requirement from which HUD
sought legislative relief. A technical amendment to section 14(d)(2) of
the Act, was signed into law on April 11, 1994 (Pub. L. 103-233, 108
Stat. 369). Accordingly, the Department has eliminated this requirement
on Form HUD-52822, CIAP Application.
Application requirements for management improvements. Comment:
PHADA requested simplification of the application requirements for
management improvements. Response: It appeared to PHADA that the
regulation at Secs. 950.610(g)(2)(i) and 968.215(c)(2) required a
general recital of the management and administrative capabilities of
the HA. In order to clarify that such items were only examples of
eligible management improvements, the items have been moved to the
eligible costs section at Secs. 950.608(g)(2)(i) and 968.112(g)(2)(i).
Development deficiencies. Comment: PHADA pointed out a possible
problem with Secs. 950.618(e)(1)(ii) and 968.215(e)(1)(ii). Each
development for which work is proposed must be at least three years old
from the end of the initial operating period (EIOP). Since warranties
are generally one year and some builders may go bankrupt, PHADA asked
for relief to be provided for the unusual circumstance in which early
assistance from CIAP is required. Such relief would be simpler than
having to come to the Assistant Secretary for Public and Indian Housing
for a regulatory waiver. Response: In order to make the CIAP consistent
with the CGP, the Department has changed the threshold for development
eligibility from EIOP to Date of Full Availability (DOFA) and under ACC
at Secs. 968.210(e)(1) and 950.630(e)(1). However, the Department
stresses that the first avenue of correction of a development
deficiency is from the architect or contractor, as appropriate. Where
there is no approved actual development cost certificate (ADCC), HUD
will continue to look to development funds first to correct the
development deficiency; if development funds are not available, the
Field Office may approve use of CIAP funds for correction, without
Headquarters approval. Once there is an approved ADCC, any subsequently
identified development deficiency may be funded by CIAP funds.
Eligibility review. Comment: PHADA was concerned about a situation
where an HA is improperly managed and may be found to be ineligible
under the regulatory criteria even if a new executive director or key
staff member has been employed and is sincerely trying to correct the
HA's problems. PHADA thought this situation may require a waiver of the
eligibility criteria at Secs. 950.618(e) or 968.215(e). Response: HUD
disagrees with that interpretation and refers the commenter to the
revised definitions of modernization and management capability found in
Secs. 968.205 and 950.102. A Troubled PHA shall be considered for
funding of non-emergency improvements where it is making reasonable
progress toward meeting the performance targets established in its
memorandum of agreement (or equivalent) or has obtained alternative
oversight of its management functions. The Field Office shall determine
whether the HA has a reasonable prospect of acquiring management or
modernization capability through CIAP-funded management improvements
and administrative support, such as hiring staff or contracting for
assistance.
Technical review factors. Comment: PHADA and two HAs questioned if
the technical review factors are relevant for CIAP, considering the
size of the HAs participating in CIAP. Specifically, items 5, 6, and 7
which deal with resident involvement, initiatives, and employment are
difficult for many small HAs. While PHADA was not opposed to these
items in theory, it was concerned about their practicality. PHADA
suggested reexamination of these technical review factors since small
HAs find it is very difficult to get residents involved and the
opportunities for resident employment with the HA are severely limited.
NAHRO stated that the degree to which resident programs are operating
is more often a function of fund availability and the type of unit,
elderly or family. Also, in some small towns, the local elected
leadership may be anti-public housing. Item 8 (local government support
for proposed modernization) may prevent improvements needed by the
residents. NAHRO urged that while vacancies are a problem which should
be addressed whenever possible through CIAP, when assigning weights to
this factor, the Department should utilize data from the Vacancy
Reduction Program to ascertain the extent to which modernization needs
are causing vacancies in this size category of HAs. NAHRO indicated
that anecdotal evidence thus far indicates that the vacancies in this
size group are often caused by market conditions or an insufficient
number of applicants, not modernization need.
Response: Section 14(d) of the Act requires CIAP Applications to be
developed in consultation with the appropriate local officials and with
residents of the housing developments for which assistance is
requested; therefore, the technical review factors must, at a minimum,
reflect these requirements. The other factors are a matter of
Secretarial discretion. The Department supports strong resident
involvement in all aspects of the Public or Indian Housing Program.
These technical review factors reflect HUD's goals for the CIAP. HUD
realizes that resident involvement varies depending on the size and
resources of the HA, and those distinctions are considered in scoring
the technical review factors. It also should be noted that the
technical review factor on extent of vacancies has been clarified to
indicate that points will be given only if the vacancies are not due to
insufficient demand.
PHMAP and rating. Comment: PHADA and one HA were concerned about
reinventing CIAP and PHMAP. It was suggested that no PHA should be
rated down in management capability unless there is a failing PHMAP
score or some unusual change occurs at the PHA. Conversely, a low PHMAP
score should be used to increase the chances of needed management
improvements being funded. Response: If a PHA needs CIAP funds for a
management improvement to address a low PHMAP score, it is not
penalized. Again, refer to the revised definition of management
capability in Sec. 968.205.
Application review. Comment: PHADA suggested that an application
should be rejected only on new grounds once. PHADA wanted to avoid
possible endless resubmissions. Response: The Department notes that the
completeness review is not complex and that operating experience has
indicated that only a relatively small number of HAs are required to
correct or resubmit
[[Page 8716]]
documents. HUD cannot overlook deficiencies in HA submissions. Although
HUD will make every effort to provide technical assistance to HAs
before the application deadline date, HAs have a responsibility to
prepare applications which meet HUD requirements.
Debriefing for unsuccessful applications. Comment: PHADA and two
HAs were concerned that too often an HA not receiving the CIAP
assistance it requested is not adequately informed as to why it was not
funded. PHADA requested that the regulation be modified to require a
debriefing for HAs whose applications are not funded so they can
improve their situation for the next funding round. Response: HUD
already requires the Field Office to inform an HA in writing as to why
its application was unsuccessful. This requirement has been included in
the final rule at Secs. 950.630(i) and (j) and 968.210(i) and (j).
Residual receipts. Comment: PHADA and NAHRO noted that an HA will
not be selected for Joint Review if it has residual receipts to carry
out the modernization activities for which it is applying. PHADA, NAHRO
and one HA indicated that residual receipts should be used as long as a
HA is allowed to retain 50 percent of the maximum allowable reserves or
$50,000, whichever is higher. This way, a reasonable amount of reserves
can be used and at the same time the HA is not placed in financial
jeopardy. Response: The Department has eliminated the requirement for
PHAs to remit residual receipts, effective for HAs with fiscal years
beginning on or after January 1, 1995. This change will make the
retention or return of residual receipts a moot issue since there will
no longer be funds identified as residual receipts and no provision on
residual receipts in the rule. Accordingly, the Department has
eliminated the provision in Sec. 968.210(i) regarding non-selection for
Joint Review where the PHA has residual receipts.
Contracting and budget revisions approvals. Comment: PHADA, NAHRO
and one HA disagreed with HUD's approval procedures for contracting and
budget revisions. They suggested that these situations could be
modified so that if HUD does not act on an HA's submission within 15
calendar days, it is automatically approved and the project can
proceed. NAHRO requested that HUD clarify the processes to be used by
Field Offices in establishing more frequent reporting or more stringent
requirements related to thresholds or prior HUD approval. NAHRO urged
that PHMAP should be used and cross referenced here. Response: Field
Offices are required to establish thresholds as high as possible to
give CIAP agencies flexibility while protecting HUD's interests in the
contracting area. These thresholds are based on an HA's in-house
technical capability and past performance. The revised CIAP Handbook
will establish time frames for Field Office review and action on
documents which must be submitted for prior HUD approval. The
Department will continue to urge Field Offices to respond in a timely
manner, including use of form letters, where appropriate, and to
monitor Field Office performance in this area.
The Department has streamlined the requirements regarding budget
revisions by requiring that a budget revision be submitted for prior
HUD approval only where an HA plans to deviate from the competitively
funded modernization program. Prior HUD approval is not required for
revisions that are consistent with, and necessary to, completion of the
original modernization program. The regulation also clarifies that
modernization funds may not be used for developments that are not
covered by the original CIAP application, even where there are leftover
funds remaining after the originally approved modernization program has
been completed. See Secs. 968.225 and 950.634.
Modernization coordinator or contract administrator. Comment: PHADA
seeks appeal rights whenever HUD requires an HA to hire a modernization
coordinator or contract administrator in order to receive the CIAP
grant. PHADA considers this to be justified in certain cases, but urges
that the regulation specifically allow the HA to appeal this to the
Regional Administrator and also be informed specifically why HUD feels
this is necessary. PHADA suggest that if these modifications are not
made, this provision could be abused by some due to petty personal
differences. NAHRO suggested that the Department establish in PHMAP the
requirements or conditions for HAs who have performed poorly in the
past. Additionally, NAHRO suggested that if the Field Office requires a
contract administrator, the HA must be notified at Joint Review. This
practice would give the HA the opportunity to protest, or if there is
agreement, the time to search for one who can take over immediately
following the execution of the ACC.
Response: It has been the Department's experience that some smaller
HAs do not have in-house capacity to administer the CIAP and require
administrative and technical assistance to implement their approved
programs. The Department must be assured that approved programs will be
carried out in an economical and effective manner. During Joint Review,
the Field Office will discuss with the HA the type and amount of
administrative and technical assistance which it may need during
implementation of its CIAP program. However, such needs may not be
finalized until the scope of work and amount of funding are determined
after Joint Review. The Field Office has the final determination on
this matter.
Force account. Comment: PHADA and two HAs recommended that
Secs. 950.635(a) and 968.225(a) be changed to allow HAs to use force
account labor to carry out modernization in all cases except where it
is specifically forbidden. Response: To provide a reward for high-
performing HAs and to achieve consistency with the CGP, the Department
has eliminated prior HUD approval for use of force account labor by
PHAs that are designated as both over-all high performers and mod-high
performers under the PHMAP and by all IHAs. See Secs. 950.612(a) and
968.120(a). PHAs that are not both over-all high performers and mod-
high performers will continue to obtain prior HUD approval to use force
account labor through their CIAP budgets or budget revision
submissions. The Field Office will approve or disapprove such use as
part of the budget/budget revision approval process.
Modernization priorities. Comment: Following the CGP model, PHADA
urged HUD to respect an HA's priorities and only modify the priorities
after the HA agrees to the modification. Response: The key difference
between CIAP and CGP is that CIAP is a competitive, not a formula,
program. Although HUD does not set priorities for HAs in either
program, HUD must assess the relative extent and urgency of need among
CIAP agencies in rating and ranking the CIAP Applications.
Comparability with CGP. Comment: NAHRO noted that the CIAP is now
similar in many respects to the CGP. It encouraged HUD to strive for
comparability between the two programs on the issue of technical
review. Response: Except for statutory differences, the Department has
made every attempt to make the CIAP comparable to the CGP.
Formula approach. Comment: PHADA and one HA requested HUD to
examine whether the competitive CIAP process could be replaced by a CGP
formula distribution. Response: As part of HUD's reinvention, the
Department has proposed to the Congress the establishment of a Capital
Fund in the first stage of transforming public and Indian housing. The
Capital Fund
[[Page 8717]]
would replace both the existing CIAP and CGP programs and provide
formula funding to all HAs, regardless of size. In FFY 1995, the 904
CGP agencies were eligible to receive 89 percent of the available funds
and the 2,496 CIAP agencies were eligible to receive 11 percent of the
available funds.
Board Resolution. Comment: NAHRO questioned the HUD requirement for
the Board of Commissioners to certify that the budget, implementation
schedule or other documents are accurate and complete. It was suggested
that the Board should be able to delegate responsibility to the
Executive Director to make certain certifications on behalf of the HA.
Accountability could be achieved by the fact that the Executive
Director is accountable to the Board. Response: HUD requires that,
after an HA is selected for funding, the HA submit the Board Resolution
Approving the CIAP Budget, Form HUD-52820, with the CIAP budget and
other required documents. The Board resolution does not require
certification as to the accuracy and completeness of the budget,
including the implementation schedule, and other documents. The Board
resolution does contain various certifications and agreements regarding
HA compliance with HUD policies, procedures, requirements, regulations
and Federal statutes. The Department is willing to accept the
certification by the Executive Director, in lieu of the Board, in these
matters, where the Executive Director has been delegated this authority
by the Board and is permitted to do so under State law.
B. Description of Simplified CIAP
This final rule continues the simplification of the CIAP, as set
forth in the interim rule, in the areas of HA application requirements,
modernization types, application processing and implementation. The
final rule provides increased efficiency, reduces unnecessary
requirements, and provides new flexibility for both the participating
HAs and HUD. The changes to CIAP are the same for both Public and
Indian housing, with the exception of the Mutual Help Program. Many of
these changes are the result of recent meaningful dialogue with small
HAs and experience gained through administering CIAP.
C. Simplification of Procedures for Obtaining Approval of a
Modernization Program
Previously, the process for receiving CIAP funds involved multiple
steps. This final rule continues the approach set forth in the interim
rule regarding the elimination, combination or simplification of many
of those previous requirements.
HUD expects that after modernization funds for a particular Federal
Fiscal Year become available, HUD would continue to publish in the
Federal Register a NOFA and the time frame for submission for
applications. HUD currently publishes an annual CIAP NOFA for this
purpose and, in the last two years, the CIAP NOFA has been
significantly improved to describe clearly submission requirements,
available amounts, eligibility, technical review factors, application
processing, Joint Review selections, and funding decisions. The
improvements to the CIAP NOFA also are intended to promote fair
competition in the program.
This final rule establishes the following steps for obtaining
approval of a modernization program: (1) application submission by the
HA; (2) completeness review by HUD; (3) eligibility review by HUD; (4)
technical review, including rating and ranking, by HUD; and (5) Joint
Review by HUD and the HA; (6) funding decisions by HUD; (7) budget
submission by HA; and (8) ACC amendment. Based on actual operating
experience in FFYs 1993, 1994, and 1995, processing time was
significantly reduced.
The first step for obtaining a CIAP grant is the application
submission by the HA. As previously noted, the requirement to provide a
cost estimate for the replacement of equipment, systems or structural
elements over a 30-year period is no longer mandated by the statute and
has been eliminated.
An HA has the option of including only the specific developments
for which it is requesting funding or of including all its developments
in the CIAP Application. The consequences of not including all its
developments in the CIAP Application are that HUD may not, as a result
of Joint Review, consider funding of any non-emergency work at excluded
developments or subsequently approve use of leftover funds at excluded
developments. The benefits derived from including all its developments
are the ability to: (1) revise specific work items among developments
at Joint Review; and (2) use leftover funds upon completion of the
modernization for modernization needs at other developments covered by
the application. An HA must evaluate and describe its modernization
needs and the estimated costs for each development covered by the
application.
HUD will ensure that documentation and other information regarding
each application submitted pursuant to the CIAP NOFA are sufficient to
indicate the basis upon which assistance was provided or denied. This
material, including any letters of support, will be made available for
public inspection for a five-year period beginning not less than 30
calendar days after the award of the assistance. Material will be made
available in accordance with the Freedom of Information Act (5 U.S.C.
552) and HUD's implementing regulation at 24 CFR part 15. In addition,
HUD will include the recipients of assistance pursuant to the CIAP NOFA
in its quarterly Federal Register notice of all recipients of HUD
assistance awarded on a competitive basis. (See 24 CFR Secs. 12.14(a)
and 12.16(b), and the notice published in the Federal Register on
January 16, 1992 (57 FR 1942), for further information on these
requirements.)
The second step for obtaining a CIAP grant is the completeness
review by HUD. The final rule clarifies that if the CIAP Application
(Form HUD-52822) or any other essential document, as specified in the
NOFA, is missing, the HA's application will be considered substantially
incomplete and, therefore, ineligible for further processing. If there
is a technical mistake, such as no signature on a submitted form, the
HA will be given an opportunity to correct the deficiency. This is not
additional time to substantially revise the application. Deficiencies
that may be corrected at this time are inadvertently omitted documents,
as specified in the NOFA, or clarifications of previously submitted
material and other changes which are not of such a nature as to improve
the competitive position of the application. In addition, the final
rule clarifies that if the HA does not correct the deficiency within
the specified time period, the HA is ineligible for further processing.
The third step for obtaining a CIAP grant is the eligibility review
by HUD. Based on operating experience in FFYs 1993, 1994, and 1995, the
Department has made the following changes from the interim rule:
(1) Eliminated work item eligibility and need which may be
difficult to determine before Joint Review;
(2) Changed the requirement that each development on which work is
proposed be at least three years old from the End of Initial Operating
Period (EIOP) to a requirement that each development must have reached
the Date of Full Availability (DOFA) and be under ACC. Also, clarified
the eligibility of a development/building/unit assisted with Major
Reconstruction of Obsolete Projects (MROP) funding, under section
[[Page 8718]]
5(j)(2) of the Act (see Section F of this Preamble). These changes make
development eligibility under the CIAP consistent with the CGP;
(3) Eliminated the restriction on processing where the HA has not
submitted the fiscal audit to HUD within one year after the end of the
audit period, or requested an extension for submission, in conformance
with the Single Audit Act requirements. The Department has decided to
use regular monitoring as a more effective method of obtaining audit
compliance rather than eliminating the HA up-front from full funding
consideration;
(4) Eliminated the restriction on processing where the HA owes
funds to the Department as a result of excess development,
modernization or operating funds previously provided and the HA has not
repaid the funds, or has not entered into a repayment agreement, or is
not meeting its obligations under a repayment agreement. The Department
has decided to use regular monitoring as a more effective method of
obtaining funds owed to the Department rather than eliminating the HA
up-front from full funding consideration;
(5) Where the HA has not completed the structural changes
identified by the Section 504 Needs Assessment, added the restriction
on processing to Emergency Modernization or physical work needed to
meet Section 504 requirements;
(6) Where the HA has not complied with the statutory requirement to
complete Lead Based Paint (LBP) testing on all pre-1978 family units,
added the restriction on processing to Emergency Modernization or work
needed to complete LBP testing; and
(7) Where the HA has not complied with Fair Housing and Equal
Opportunity (FHEO) requirements, continued the restriction on
processing to Emergency Modernization or work needed to remedy civil
rights deficiencies.
The fourth step for obtaining a CIAP grant is technical review by
HUD. The Department is retaining the provisions of the interim rule
regarding technical processing, categorizing the eligible HAs and their
developments into two processing groups (Group 1 for Emergency
Modernization and Group 2 for Other Modernization), and rating and
ranking of applications in Group 2. Preference is given to all HA
applications in Group 1 since such applications involve emergencies
which are an immediate threat to resident health or safety.
Accordingly, such applications are not rated and ranked during
technical processing and are automatically selected for Joint Review.
The Field Office rates the Group 2 HAs/developments against the
technical review factors to determine relative ranking. In accordance
with section 14(h) of the Act, the Department will continue the
preference given to HAs which request assistance for developments
having conditions which threaten the health or safety of the residents
or having a significant number of vacant, substandard units, and which
have demonstrated a capability of carrying out the proposed activities.
This preference is reflected in the technical review factors and their
maximum point scores.
The final rule recognizes the change in the Department's field
structure by eliminating reference to the Regional Office. Since each
Field Office receives its own allocation of CIAP funds, the Field
Office will proceed to Joint Review selection after rating and ranking.
The Field Office will identify for selection the highest ranking HA
applications in Group 2 in descending order, and other Group 2 HAs with
lower ranking applications but with high priority needs which most
reasonably approximate the amount of modernization which can be funded
by the Field Office. High priority needs are non-emergency needs, but
related to: health or safety; vacant, substandard units; structural or
system integrity; or compliance with statutory, regulatory or court-
ordered deadlines. Again, all Group 1 applications will be
automatically selected for Joint Review.
The fifth step for obtaining a CIAP grant is Joint Review. The
purpose of Joint Review is for the Field Office to discuss with an HA
the proposed modernization program, as set forth in the application,
and determine the size of the grant, if any, to be awarded. The Field
Office will notify those HAs whose applications have been selected for
further processing as to whether the Joint Review will be conducted on-
site or off-site (e.g., by telephone or in-office meeting). If
conducted on-site, the Joint Review may include an inspection of the
proposed physical work. An HA will prepare for Joint Review by
preparing a draft CIAP budget and reviewing the other items to be
covered during Joint Review, as prescribed by HUD. The Field Office
will review long-term viability and reasonable cost determinations
during Joint Review.
HAs not selected for Joint Review will be notified by letter
stating the reasons, such as the low priority of its physical
improvement needs relative to available funding. If, prior to
scheduling the Joint Reviews, there is determined to be a duplication
of funding, the HA will not be selected for Joint Review. Where a
duplication of funding is determined during Joint Review, the HA will
not be selected for funding.
The sixth and seventh steps for obtaining a CIAP grant are funding
decisions by HUD and budget submission by the HA. Upon completion of
Joint Review, the Field Office will adjust the HAs/developments and
work items to be funded and the amounts to be awarded, including
processing groups, as necessary, based on information obtained at Joint
Review, the results of FHEO review, and completion of the environmental
reviews. After Congressional notification, the Field Office will
announce the HAs selected for CIAP grants, subject to their submission
of an approvable CIAP budget and other required documents. The Field
Office will request the funded HA to submit a CIAP budget, which
includes an implementation schedule, a resolution by the HA Board of
Commissioners containing certifications required by HUD, and any other
required documents. The Field Office will select all bona fide
emergencies in Group 1 for funding before funding Group 2 applications.
HAs not selected for funding will be notified in writing of the reason
for non-selection.
After Field Office approval of the CIAP budget, the eighth step for
obtaining a CIAP grant is that the Field Office and the HA enter into
an ACC Amendment in order for the HA to obtain modernization funds. The
ACC Amendment will require low-income use of the housing for not less
than 20 years from the date of the ACC Amendment (subject to sale of
homeownership units in accordance with the terms of the ACC). It should
be noted that HUD has the authority to condition the ACC Amendment
(e.g., to require an HA to hire a modernization coordinator or contract
administrator to administer its modernization program).
The final rule continues the streamlined ACC Amendment process by
allowing Field Office program staff to complete and forward the ACC
Amendment to the HA with the budget approval letter, and by allowing
the HA Executive Director, where authorized by the Board and permitted
by State law, to sign and return the ACC Amendment to the Field Office
for execution. This is identical to the ACC Amendment process in the
CGP. Excluding Mutual Help developments, an HA also will, where
necessary, execute and file for record a Declaration of Trust, as
provided under the ACC, to protect the rights and interests of HUD
throughout
[[Page 8719]]
the 20-year period during which the HA is obligated to operate the
developments receiving modernization funds in accordance with the ACC,
the Act, and HUD regulations and requirements.
D. Other Simplifications and Revisions to CIAP
When the revised CGP final rule was published on August 30, 1994,
at 59 FR 44810, the Department eliminated the requirement that the cost
of non-emergency health and safety work items increase the purchase
price and amortization period for Turnkey III or Mutual Help homebuyer
families. This requirement already was eliminated for the CGP and CIAP
at Secs. 950.602 and 968.102.
CIAP agencies shall administer previously approved CIAP grants
under this final rule. It would be problematic for both HUD and CIAP
agencies to administer CIAP programs in progress under differing
requirements. HUD will continue to allow revisions to previously
approved CIAP budgets, where appropriate.
E. Major Reconstruction of Obsolete Projects (MROP)
Section 111(b) of the Housing and Community Development Act of 1992
amended section 14(c) of the Act and provided that a building which is
assisted with MROP funding (under section 5(j)(2) of the Act) is not
eligible for CIAP funding. This statutory provision was implemented in
the interim rule at Sec. 968.101(b)(5). To provide further
clarification, Sec. 968.101(b)(5) is revised in the final rule to
clarify that a development/building/unit is eligible for CIAP funding
where it was funded under MROP after FFY 1988 and has reached DOFA or
where it was funded under MROP during FFYs 1986-1988 and all MROP funds
have been expended.
F. Long-Term Viability
The final rule clarifies at Secs. 905.608(b) and 968.112(b) that
HAs may expend funds on a non-viable development for essential non-
routine maintenance needed to keep the property habitable until the
demolition or disposition application is approved and residents are
relocated.
G. Previous Participation
On June 20, 1994, the Department published at 59 FR 31521, an
interim rule, which eliminated the requirement for HAs to submit Form
HUD-2530, Previous Participation Certificate, on modernization
contracts. Accordingly, Secs. 950.642(d)(3) and 968.235(d)(3),
requiring previous participation clearance, have been eliminated and
Secs. 950.642(g) (now 950.618) and 968.235 (now 968.135) have been
modified to delete reference to previous participation.
H. Time Extensions
The Department has added new Secs. 950.638 and 968.235 to specify
requirements regarding time extensions to the obligation or expenditure
deadline date approved by HUD in the original implementation schedule.
HUD approves implementation schedules as part of the budget approval
process (refer to Part III of the CIAP budget). The Department is
allowing CIAP agencies to execute (as CGP agencies now are authorized
to do), without prior HUD approval, time extensions commensurate with
the delay no later than 30 calendar days after the obligation or
expenditure deadline date where the HA is able to certify that the
delay is due to reasons outside of the HA's control, such as the need
to use leftover funds from a completed modernization program for
additional work, unforeseen delays in contracting or contract
administration, litigation, and HUD or other institutional delay. Where
the delay is not due to reasons outside of the HA's control, the HA
must request HUD approval of a time extension no later than 30 calendar
days after the obligation or expenditure deadline date to avoid
recapture of funds.
I. Threshold for Performance and Payment Bond for CGP Agencies
The Department's procurement regulations, as set forth in 24 CFR
85.36(h), require that HA contractors furnish a bid guarantee and a
performance bond and payment bond for each construction or equipment
contract over $100,000. For the CIAP and the CGP, the Department had
reduced that threshold from $100,000 to $25,000 in order to protect the
Federal interest. The Department has reconsidered this matter and has
raised the threshold from $25,000 to $100,000 for both CIAP and CGP
agencies at Secs. 950.618(b) and 968.135(b). The Department
inadvertently omitted the requirement of the bid guarantee when it
reduced the threshold for the performance and payment bonds and has
included it with this rule. In addition, the Department is continuing
its policy of allowing for both CGP and CIAP agencies two other
alternative methods of assurance to performance and payment bonds,
which are a twenty percent cash escrow or a twenty-five percent letter
of credit.
VI. Findings and Certifications
Environmental Impact
A Finding of No Significant Impact with respect to the environment
has been made in accordance with HUD regulations at 24 CFR part 50
which implement section 102(2)(C) of the National Environmental Policy
Act of 1969, 42 U.S.C. 4332. The Finding of No Significant Impact is
available for public inspection and copying during regular business
hours (7:30 a.m. to 5:00 p.m. weekdays) in the Office of the Rules
Docket Clerk, Room 10272, 451 Seventh Street, SW., Washington, DC
20410.
Federalism Impact
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the rule does
not have substantial, direct effects on HAs. The revised modernization
program is consistent with federalism principles since it reduces
unnecessary burdens on HAs. While the program is revised, the primary
change is only in the way that HUD processes and reviews HA
modernization activities, and not the modernization activities
themselves. This rule will not diminish the importance of State and
local governments with respect to the Federal Government. As a result,
the rule is not subject to review under the order.
Impact on the Family
This rule has been developed in accordance with Executive Order
12606, the Family. The General Counsel, as the Designated Official
under the Executive Order, has determined that this rule does not have
the potential for significant impact on family formation, maintenance,
or general well-being, since its effect is limited to revising program
procedures for HAs applying for discretionary grants. Families are not
affected since HAs will continue to carry out modernization activities
at public housing developments.
Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)) has reviewed and approved this rule, and in so doing
certifies that this rule will not have a significant economic impact on
a substantial number of small entities. The rule codifies revisions to
the existing CIAP under which HAs receive modernization assistance from
HUD on a competitive basis. HUD does not anticipate a significant
economic impact on small entities since HAs will continue to carry out
their modernization activities by entering
[[Page 8720]]
into contracts for the work as they now do.
Catalog of Domestic Assistance
The Catalog of Domestic Assistance numbers for the programs
affected by this rule are 14.146, 14.147, 14.850, 14.851, 14.852, and
15.141.
List of Subjects
24 CFR Part 941
Grant programs--housing and community development, Loan programs--
housing and community development, Public housing.
24 CFR Part 950
Aged, Grant programs--housing and community development, Grant
programs--Indians, Indians, Individuals with disabilities, Low and
moderate income housing, Public housing, Reporting and recordkeeping
requirements.
24 CFR Part 965
Energy conservation, Government procurement, Grant programs--
housing and community development, Lead poisoning, Loan programs--
housing and community development, Public housing, Reporting and
recordkeeping requirements, Utilities.
24 CFR Part 968
Grant programs--housing and community development, Indians, Loan
programs--housing and community development, Public housing, Reporting
and recordkeeping requirements.
For the reasons set forth in the preamble, parts 941, 950, 965, and
968 of title 24 of the Code of Federal Regulations are amended as
follows:
PART 941--PUBLIC HOUSING DEVELOPMENT
1. The authority citation for 24 CFR part 941 continues to read as
follows:
Authority: 42 U.S.C. 1437b, 1437c, 1437g, and 3535(d).
2. In Sec. 941.208, paragraph (c) is revised to read as follows:
Sec. 941.208 Other Federal requirements.
* * * * *
(c) Prevailing wage rates. See part 965 of this chapter for
applicable requirements on this subject.
* * * * *
3. In Sec. 941.503, paragraph (d) is revised to read as follows:
Sec. 941.503 Construction requirements.
* * * * *
(d) Prevailing wage rates. See Sec. 965.101 of this chapter.
PART 950--INDIAN HOUSING PROGRAMS
4. The authority citation for 24 CFR part 950 continues to read as
follows:
Authority: 25 U.S.C. 450e(b); 42 U.S.C. 1437aa-1437ee, and
3535(d).
5-6. Section 950.102 is amended by adding a definition of ``other
modernization (modernization other than emergency)'' in alphabetical
order, and by revising the definitions of ``emergency modernization'',
``modernization capability'', and ``modernization project'', to read as
follows:
Sec. 950.102 Definitions.
* * * * *
Emergency modernization (CIAP). A type of modernization program for
a development that is limited to physical work items of an emergency
nature, that pose an immediate threat to the health or safety of
residents or is related to fire safety, and that must be corrected
within one year of CIAP funding approval.
* * * * *
Modernization capability. An IHA has modernization capability if it
is:
(1) Not designated as high risk under Sec. 950.135; or
(2) Designated as high risk, but has a reasonable prospect of
acquiring modernization capability through CIAP-funded management
improvements and administrative support, such as hiring staff or
contracting for assistance. An IHA that has been classified high risk
with regard to modernization is eligible for emergency modernization
only, unless it is making reasonable progress toward meeting the
performance targets established in its management improvement plan
under Sec. 950.135(f)(2) or has obtained alternative oversight of its
modernization functions. Where an IHA does not have a funded
modernization program in progress, the Area ONAP shall determine
whether the IHA has a reasonable prospect of acquiring modernization
capability through hiring staff or contracting for assistance.
* * * * *
Modernization project. The improvement of one or more existing
Indian housing developments under an unique number designated for that
modernization program (CIAP). For each modernization project, HUD and
the IHA shall enter into an ACC amendment, requiring low-income use of
the housing for not less than 20 years from the date of the ACC
amendment (subject to sale of homeownership units in accordance with
the terms of the ACC).
* * * * *
Other Modernization (modernization other than emergency). A type of
modernization program for a development that includes one or more
physical work items, where HUD determines that the physical
improvements are necessary and sufficient to extend substantially the
useful life of the development, and/or one or more development specific
or IHA-wide management work items (including planning costs), and/or
LBP testing, professional risk assessments, interim containment, and
abatement.
* * * * *
7. Subpart I of Part 950, is revised to read as follows:
Subpart I--Modernization Program
General Provisions
Sec.
950.600 Purpose and applicability.
950.602 Special requirements for Turnkey III and Mutual Help
developments.
950.604 Allocation of funds under section 14.
950.606 Reserve for emergencies and disasters.
950.608 Eligible costs.
950.610 Modernization and energy conservation standards.
950.612 Force account.
950.614 Initiation of modernization activities.
950.616 Fund requisition.
950.618 Contracting requirements.
950.620 On-site inspections.
950.622 Fiscal closeout.
Comprehensive Improvement Assistance Program (For IHAs That Own or
Operate Fewer Than 250 Indian Housing Units)
950.630 Procedures for obtaining approval of a modernization
program.
950.632 Resident and homebuyer participation.
950.634 Budget revisions.
950.636 Progress reports.
950.638 Time extensions.
950.640 HUD review of IHA performance.
Comprehensive Grant Program (For IHAs That Own or Operate 250 or More
Indian Housing Units)
950.650 Determination of formula amount.
950.652 Comprehensive plan (including Five-Year Action Plan).
950.654 HUD review and approval of comprehensive plan (including
Five-Year Action Plan).
950.656 Annual submission of activities and expenditures.
950.658 IHA Performance and Evaluation Report.
950.660 HUD review of IHA performance.
[[Page 8721]]
Subpart I--Modernization Program
General Provisions
Sec. 950.600 Purpose and applicability.
(a) Purpose. The purpose of this subpart is to set forth the
policies and procedures for the Modernization program, authorizing HUD
to provide financial assistance to Indian Housing Authorities (IHAs).
(b) Applicability. (1) The sections under the undesignated heading
``General Provisions'' apply to all modernization under this subpart.
The sections under the undesignated heading ``Comprehensive Improvement
Assistance Program'' (CIAP) set forth the requirements and procedures
for the CIAP for IHAs that own or operate fewer than 250 Indian housing
units. An IHA that qualifies for participation in the Comprehensive
Grant Program (CGP) is not eligible to participate in the CIAP. The
sections under the undesignated heading ``Comprehensive Grant program
(CGP)'' set forth the requirements and procedures for the CGP for IHAs
that own or operate 250 or more Indian housing units. An IHA that has
already qualified to participate in the CGP remains eligible to
participate in the CGP so long as it owns or operates at least 200
units.
(2) This subpart applies to IHA-owned low-income Indian housing
developments (including developments managed by a Resident Management
Corporation pursuant to a contract with the IHA). This subpart also
applies to the implementation of modernization programs which were
approved before FFY 1996. Rental developments that are planned for
conversion to homeownership under sections 5(h), 21, or 301 of the Act
(42 U.S.C. 1437c, 1437s, 1437aaa), but that have not yet been sold by
an IHA, continue to qualify for assistance under this subpart. This
subpart does not apply to developments under the Section 23 Leased
Housing Non-Bond Financed program, the Section 10(c) Leased program, or
the Section 23 or Section 8 Housing Assistance Payments programs.
(c) Transition. Any amount that HUD has obligated to an IHA shall
be used for the purposes for which the funding was provided, or:
(1) For a CGP IHA, for purposes consistent with an approved annual
statement or five-year action plan submitted by the IHA, as the IHA
determines to be appropriate; or
(2) For a CIAP IHA, in accordance with a revised CIAP budget under
Sec. 950.634.
(d) Other applicable requirements. See subpart A of this part for
applicable requirements, other than the Act, that apply to
modernization under this subpart I.
(e) Approved information collections. The following sections of
this subpart have been approved by the Office of Management and Budget
in accordance with the Paperwork Reduction Act of 1995 and assigned OMB
approval number 2577-0044: Secs. 950.618, 950.622, 950.630, 950.632,
950.634, and 950.636. The following sections of this subpart have been
similarly approved and assigned approval number 2577.0157:
Secs. 950.650, 950.656, and 950.658.
Sec. 950.602 Special requirements for Turnkey III and Mutual Help
developments.
(a) Modernization costs. Modernization work on a Mutual Help or
Turnkey III unit shall not increase the purchase price or amortization
period of the home.
(b) Eligibility of paid-off and conveyed units for assistance. (1)
Paid-off units. A Mutual Help or Turnkey III unit that is paid off but
has not been conveyed at the time work is included for it in the CIAP
application or CGP Annual Statement is eligible for any physical
improvements provided under Sec. 950.608. However, in accordance with
the provisions of Sec. 950.440(e)(8), an IHA may perform nonemergency
work on a paid-off Mutual Help unit only after all delinquencies are
repaid.
(2) Conveyed units. Where modernization work has been approved
prior to conveyance, the IHA may complete the work even if title to the
unit is subsequently conveyed before the work is completed. However,
once conveyed, the unit is not eligible for additional or future
assistance. An IHA shall not use funds provided under this subpart for
the purpose of modernizing units if the modernization work was not
approved before conveyance of title.
(c) Other. The homebuyer family shall be in compliance with its
financial obligations under its homebuyer agreement in order to be
eligible for nonemergency physical improvements, with the exception of
work necessary to meet statutory and regulatory requirements (e.g.,
accessibility for disabled persons, lead-based paint testing, interim
containment, professional risk assessment, and abatement) and the
correction of development deficiencies. Notwithstanding the above
requirement, an IHA may, with prior HUD approval, complete nonemergency
physical improvements on any homeownership unit if the IHA demonstrates
that, due to economies of scale or geographic constraints, substantial
cost savings may be realized by completing all necessary work in a
development at one time.
Sec. 950.604 Allocation of funds under section 14.
(a) General. This section describes the process for allocating
modernization funds to the aggregate of IHAs and PHAs participating in
the CIAP (i.e., agencies that own or operate fewer than 250 units), and
to individual IHAs and PHAs participating in the CGP (i.e., agencies
that own or operate 250 or more units). The program requirements
governing PHA participation in the CIAP and CGP are contained in 24 CFR
part 968.
(b) Set-aside for emergencies and disasters. For each FFY, HUD
shall reserve from amounts approved in the appropriation act for grants
under this part and part 968 of this title, an amount not to exceed $75
million (which shall include unused reserve amounts carried over from
previous FFYs), which shall be made available to IHAs and PHAs for
modernization needs resulting from natural and other disasters, and
from emergencies. HUD shall replenish this reserve at the beginning of
each FFY. Any unused funds from previous years may remain in the
reserve until allocated. The requirements governing the reserve for
disasters and emergencies and the procedures by which an IHA may
request such funds are set forth in Sec. 950.606.
(c) Set-aside for credits for mod troubled PHAs under 24 CFR part
968, subpart C. (1) General. After deducting amounts for the reserve
for natural and other disasters and for emergencies under paragraph (b)
of this section, HUD shall set aside no more than five percent of the
remaining amount for the purpose of providing credits to PHAs under 24
CFR part 968, subpart C that were formerly designated as mod troubled
agencies under the Public Housing Management Assessment Program (PHMAP)
at 24 CFR part 901. The purpose of this set-aside is to compensate such
PHAs for amounts previously withheld by HUD because of their prior
designation as a mod troubled agency.
(2) Nonapplicability to IHAs. Since the PHMAP performance
indicators under 24 CFR part 901 do not apply to IHAs, these agencies
cannot be deemed mod troubled for purposes of the CGP. Hence, IHAs are
not subject to any reduction in funding under section 14(k)(5)(a) of
the
FR Doc. 96-4814 Streamlining the Comprehensive Improvement Assistance Program and Comprehensive Grant Program
Act, nor do they participate in the set-aside of credits
established under paragraph (c)(1) of this section.
(d) Formula allocation based on relative needs. After determining
the
[[Page 8722]]
amounts to be reserved under paragraphs (b) and (c) of this section,
HUD shall allocate the amount remaining pursuant to the formula set
forth in paragraphs (e) and (f) of this section, which are designed to
measure the relative backlog and accrual needs of IHAs and PHAs.
(e) Allocation for backlog needs. HUD shall allocate half of the
formula amount under paragraph (d) of this section based on the
relative backlog needs of IHAs and PHAs, as follows:
(1) Determination of backlog need. (i) Statistically reliable data.
Where HUD determines that the data concerning the categories of backlog
need identified under paragraph (e)(4) of this section are
statistically reliable for individual IHAs and PHAs with 250 or more
units, or the aggregate of IHAs and PHAs with fewer than 250 units not
participating in the formula funding portion of the modernization
program, it will base its allocation on direct estimates of the
statutory categories of backlog need, based on the most recently
available, statistically reliable data.
(ii) Statistically reliable data are unavailable. Where HUD
determines that statistically reliable data concerning the categories
of backlog need identified under paragraph (e)(4) of this section are
not available for individual IHAs and PHAs with 250 or more units, it
will base its allocation of funds under this section on estimates of
the categories of backlog need using:
(A) The most recently available data on the categories of backlog
need under paragraph (e)(4) of this section;
(B) Objectively measurable data concerning the following IHA or
PHA, community, and development characteristics:
(1) The average number of bedrooms in the units in a development
(Weighted at 2858.7);
(2) The proportion of units in a development available for
occupancy by very large families (Weighted at 7295.7);
(3) The extent to which units for families are in high-rise
elevator developments (Weighted at 5555.8);
(4) The age of the developments, as determined by the DOFA date
(date of full availability). In the case of acquired developments, HUD
will use the DOFA date unless the IHA provides HUD with the actual date
of construction, in which case HUD will use the age of the development
(or for scattered sites, the average age of all the buildings), subject
to a 50 year cap. (Weighted at 206.5);
(5) In the case of a large agency, the number of units with 2 or
more bedrooms (Weighted at .433);
(6) The cost of rehabilitating property in the area (Weighted at
27544.3);
(7) For family developments, the extent of population decline in
the unit of general local government determined on the basis of the
1970 and 1980 censuses (Weighted at 759.5); and
(C) An equation constant of 1412.9.
(2) Calibration of backlog need for developments constructed prior
to 1985. The estimated backlog need, as determined under either
paragraphs (e)(1)(i) or (e)(1)(ii) of this section, shall be adjusted
upward for developments constructed prior to 1985 by a constant ratio
of 1.5 to more accurately reflect the costs of modernizing the
categories of backlog need under paragraph (e)(4) of this section, for
the Indian housing stock as of 1991.
(3) Deduction for prior modernization. HUD shall deduct from the
estimated backlog need, as determined under either paragraphs (e)(1)(i)
or (e)(1)(ii) of this section, amounts previously provided to an IHA or
PHA for modernization, using one of the following methods:
(i) Standard deduction for prior CIAP and MROP. HUD shall deduct 60
percent of the CIAP funds made available on an IHA-wide or PHA-wide
basis from FFY 1984 to 1991, and 40 percent of the funds made available
on a development-specific basis for the Major Reconstruction of
Obsolete Projects (MROP) (not to exceed the estimated formula need for
the development), subject to a maximum 50 percent deduction of an IHA's
or PHA's total need for backlog funding;
(ii) Newly constructed units. Units with a DOFA date of October 1,
1991 or thereafter will be considered to have a zero backlog; or
(iii) Acquired developments. Developments acquired by an IHA with
major rehabilitation, with a DOFA date of October 1, 1991 or
thereafter, will be considered to have a zero backlog.
(4) Categories of backlog need. The most recently available data to
be used under either paragraphs (e)(1)(i) or (e)(1)(ii) of this section
shall pertain to the following categories of backlog need:
(i) Backlog of needed repairs and replacements of existing physical
systems in Indian housing developments;
(ii) Items that shall be added to developments to meet HUD's
modernization standards under Sec. 950.610, and State, local and tribal
codes; and
(iii) Items that are necessary or highly desirable for the long-
term viability of a development, in accordance with HUD's modernization
standards.
(f) Allocation for accrual needs. HUD shall allocate the other half
remaining under the formula allocation under paragraph (d) of this
section based upon the relative accrual needs of IHAs and PHAs,
determined as follows:
(1) Statistically reliable data. If HUD determines that
statistically reliable data are available concerning the categories of
need identified under paragraph (f)(3) of this section for individual
IHAs and PHAs with 250 or more units and for the aggregate of IHAs and
PHAs with fewer than 250 units, it shall base its allocation of
assistance under this section on the needs that are estimated to have
accrued since the date of the last objective measurement of backlog
needs under paragraph (e)(1)(i) of this section; or
(2) Statistically reliable data are unavailable. If HUD determines
that statistically reliable data concerning the categories of need
identified under paragraph (f)(3) of this section are not available for
individual IHAs and PHAs with 250 or more units, it shall base its
allocation of assistance under this section on estimates of accrued
need using:
(i) The most recently available data on the categories of backlog
need under paragraph (f)(3) of this section;
(ii) Objectively measurable data concerning the following IHA or
PHA, community, and development characteristics:
(A) The average number of bedrooms in the units in a development
(Weighted at 100.1);
(B) The proportion of units in a development available for
occupancy by very large families (Weighted at 356.7);
(C) The age of the developments (Weighted at 10.4);
(D) The extent to which the buildings in developments of an agency
average fewer than 5 units (Weighted at 87.1.);
(E) The cost of rehabilitating property in the area (Weighted at
679.1);
(F) The total number of units of each IHA or PHA that owns or
operates 250 or more units (Weighted at .0144); and
(iii) An equation constant of 602.1.
(3) Categories of need. The data to be provided under either
paragraph (f)(1) or (f)(2) of this section shall pertain to the
following categories of need:
(i) Backlog of needed repairs and replacements of existing physical
systems in Indian housing developments; and
(ii) Items that shall be added to developments to meet HUD's
modernization standards under Sec. 950.610, and State, local, and
tribal codes.
(g) Allocation for CIAP. The formula amount determined under
paragraphs (e) and (f) of this section for IHAs and PHAs with fewer
than 250 units shall be allocated to IHAs in accordance with
[[Page 8723]]
the requirements under the undesignated heading of this subpart
``Comprehensive Improvement Assistance Program'' (CIAP) and to PHAs in
accordance with the requirements of 24 CFR part 968, subpart B.
(h) Allocation for CGP. The formula amount determined under
paragraphs (e) and (f) of this section for IHAs with 250 or more units
shall be allocated in accordance with the requirements under the
undesignated heading of this subpart ``Comprehensive Grant Program,''
and for PHAs in accordance with the requirements of 24 CFR part 968,
subpart C. An IHA that is eligible to receive a grant under the CGP may
appeal the amount of its formula allocation under this section in
accordance with the requirements set forth in Sec. 950.650. An IHA that
is eligible to receive modernization funds under the CGP because it
owns or operates 250 or more units, is disqualified from receiving
assistance under the CIAP under this part.
(i) Use of formula allocation. Any amounts allocated to an IHA
under paragraphs (e) and (f) of this section may be used for any
eligible activity under this subpart, notwithstanding that the
allocation amount is determined by allocating half based on the
relative backlog needs and half based on the relative accrual needs of
IHAs and PHAs.
(j) Calculation of number of units. For purposes of determining
under this section the number of units owned or operated by an IHA or
PHA, and the relative modernization needs of IHAs and PHAs, HUD shall
count as one unit each existing rental, Mutual Help, and section 23
Bond-Financed unit under the ACC, except that it shall count as one-
fourth of a unit each existing unit under the Turnkey III program. New
development units that are added to an IHA's or PHA's inventory will be
added to the overall unit count so long as they are under ACC amendment
and have reached DOFA by the first day in the FFY in which the formula
is being run. Any increase in units (reaching DOFA and under ACC
amendment) as of the beginning of the FFY shall result in an adjustment
upwards in the number of units under the formula. New units reaching
DOFA after this date will be counted for formula purposes as of the
following FFY.
(k) Demolition, disposition, and conversion of units. (1) General.
Where an existing unit under an ACC is demolished, disposed of, or
converted into a larger or smaller unit, HUD shall not adjust the
amount the IHA or PHA receives under the formula, unless more than one
percent of the units are affected on a cumulative basis. Where more
than one percent of the existing units are demolished, disposed of, or
converted, HUD shall reduce the formula amount for the IHA or PHA over
a 3-year period to reflect removal of the units from the ACC.
(2) Determination of one percent cap. In determining whether more
than one percent of the units are affected on a cumulative basis, HUD
will compare the units eligible for funding in the initial year under
formula funding with the number of units eligible for funding for the
current year under formula funding, and shall base its calculations on
the following:
(i) Increases in the number of units resulting from the conversion
of existing units will be added to the overall unit count so long as
they are under ACC amendment by the first day in the FFY in which the
formula is being run;
(ii) Units that are lost as a result of demolition, disposition, or
conversion shall not be offset against units subsequently added to an
IHA's or PHA's inventory;
(iii) For purposes of calculating the number of converted units,
HUD shall regard the converted size of the unit as the appropriate unit
count (e.g., a unit that originally was counted as one unit under
paragraph (j) of this section, but which later was converted into two
units, shall be counted as two units under the ACC).
(3) Phased-in reduction of units. (i) Reduction less than one
percent. If HUD determines that the reduction in units under paragraph
(k)(2) of this section is less than one percent, the IHA or PHA will be
funded as though no change had occurred.
(ii) Reduction greater than one percent. If HUD determines that the
reduction in units under paragraph (k)(2) of this section is greater
than one percent, the number of units on which formula funding is based
will be the number of units reported as eligible for funding for the
current program, plus two-thirds of the difference between the initial
year and the current year in the first year, plus one-third of the
difference in the second year, and at the level of the current year in
the third year.
(iii) Exception. A unit that is conveyed under the Mutual Help or
Turnkey III programs will result in an automatic (rather than a phased-
in) reduction in the unit count. Paid-off Mutual Help or Turnkey III
units continue to be counted until they are conveyed.
(4) Subsequent reductions in unit count. (i) Once an IHA's or PHA's
unit count has been fully reduced under paragraph (k)(3)(ii) of this
section to reflect the new number of units under the ACC, this new
number of units will serve as the base for purposes of calculating
whether there has been a one percent reduction in units on a cumulative
basis.
(ii) A reduction in formula funding, based upon additional
reductions to the number of an IHA's or PHA's units, will also be
phased in over a 3-year period, as described in paragraph (k)(2) of
this section.
Sec. 950.606 Reserve for emergencies and disasters.
(a) Emergencies. (1) Eligibility for assistance. An IHA (including
an IHA that is determined to be high risk under Sec. 950.135) may
obtain funds at any time, for any eligible emergency work item as
defined in Sec. 950.102 (for IHAs participating in CGP) or for any
eligible emergency work item (described as emergency modernization in
Sec. 950.102) (for IHAs participating in CIAP), from the reserve
established under Sec. 950.604(b). However, emergency reserve funds may
not be provided to an IHA participating in CGP that has the necessary
funds available from any other source, including its annual formula
allocation under Sec. 950.604(e) and (f), other unobligated
modernization funds, and its replacement reserves under Sec. 950.608.
An IHA is not required to have an approved Comprehensive Plan under
Sec. 950.652 before it can request emergency assistance from this
reserve. Emergency reserve funds may not be provided to an IHA
participating in CIAP unless it does not have the necessary funds
available from any other source, including unobligated CIAP, and no
CIAP modernization funding is available from HUD for the remainder of
the fiscal year.
(2) Procedure. To obtain emergency funds, an IHA shall submit a
request, in a form to be prescribed by HUD, that demonstrates that
without the requested funds from the set-aside under this section, the
IHA does not have adequate funds available to correct the conditions
that present an immediate threat to the health or safety of the
residents. HUD will immediately process a request for such assistance,
and if it determines that the IHA's request meets the requirements of
paragraph (a)(1) of this section, it shall approve the request, subject
to the availability of funds in the reserve.
(3) Repayment. A CGP IHA that receives assistance for its emergency
needs from the reserve under Sec. 950.604(b) shall repay such
assistance from its future allocations of assistance,
[[Page 8724]]
as available. For IHAs participating in the CGP, HUD shall deduct up to
50 percent of an IHA's succeeding year's formula allocation under
Sec. 950.604(e) and (f) to repay emergency funds previously provided by
HUD to the IHA. The remaining balance, if any, shall be deducted from
an IHA's succeeding years' formula allocations.
(b) Natural and other disasters. (1) Eligibility for assistance. An
IHA (including an IHA that has been determined by HUD not to be
administratively capable under Sec. 950.135) may request assistance at
any time from the reserve under Sec. 950.604(b) for the purpose of
permitting the IHA to respond to a natural or other disaster. To
qualify for assistance, the disaster shall pertain to an extraordinary
event affecting only one or a few IHAs, such as an earthquake or
hurricane. Any disaster declared by the President (or that HUD
determines would qualify for a Presidential declaration if it were on a
larger scale) qualifies for assistance under this paragraph. An IHA may
receive funds from the reserve regardless of the availability of other
modernization funds or reserves, but only to the extent its needs are
in excess of its insurance coverage. An IHA is not required to have an
approved Comprehensive Plan under Sec. 950.652 before it can request
assistance from the reserve under Sec. 950.604(b).
(2) Procedure. To obtain funding for natural or other disasters
under Sec. 950.604(b), an IHA shall submit a request, in a form
prescribed by HUD, that demonstrates that it meets the requirements of
paragraph (b)(1) of this section. HUD will immediately process a
request for such assistance, and if it determines that the request
meets the requirements under paragraph (b)(1) of this section, it will
approve the request, subject to the availability of funds in the
reserve.
(3) Repayment. Funds provided to an IHA under paragraph (b)(1) of
this section for natural and other disasters are not required to be
repaid.
Sec. 950.608 Eligible costs.
(a) General. An IHA may use financial assistance received under
this part for the following eligible costs:
(1) For a CGP IHA, the eligible costs are:
(i) Undertaking activities described in its approved Annual
Statement under Sec. 950.656(e) and approved Five-Year Action Plan
under Sec. 950.652(e)(5);
(ii) Carrying out emergency work, whether or not the need is
indicated in the IHA's approved Comprehensive Plan, including Five-Year
Action Plan, or Annual Statement;
(iii) Funding a replacement reserve to carry out eligible
activities in future years, subject to the restrictions set forth in
paragraph (f) of this section;
(iv) Preparing the Comprehensive Plan and Five-Year Action Plan
under Sec. 950.652 and the Annual Submission under Sec. 950.656,
including reasonable costs necessary to assist residents to participate
in a meaningful way in the planning, implementation and monitoring
process; and
(v) Carrying out an audit, in accordance with 24 CFR part 44.
(2) For a CIAP IHA, the eligible costs are activities approved by
HUD and included in an approved CIAP budget.
(b) Demonstration of viability. Except in the case of emergency
work, an IHA shall only expend funds on a development for which the IHA
has determined, and HUD agrees, that the completion of the improvements
and replacements (for CGP IHAs, as identified in the comprehensive
plan) will reasonably ensure the long-term physical and social
viability of the development at a reasonable cost (as defined in
Sec. 950.102), or for essential non-routine maintenance needed to keep
the property habitable until the demolition or disposition application
is approved and residents are relocated.
(c) Physical improvements. Eligible costs include alterations,
betterments, additions, replacements, and non-routine maintenance that
are necessary to meet the modernization and energy conservation
standards prescribed in Sec. 950.610. These mandatory standards may be
exceeded when the IHA (and HUD in the case of CIAP IHAs) determine that
it is necessary or highly desirable for the long-term physical and
social viability of the individual development. Development specific
work includes work items that are modest in design and cost, but still
blend in with the design and architecture of the surrounding community
by including amenities, quality materials and design and landscaping
features that are customary for the locality and culture. The Field
Office has the authority to approve nondwelling space where such space
is needed to administer, and is of direct benefit to, the Public and
Indian Housing Program. If demolition or disposition is proposed, an
IHA shall comply with subpart M of this part. Additional dwelling space
may be added to existing units.
(d) Turnkey III developments. (1) General. Eligible physical
improvement costs for existing Turnkey III developments are limited to
work items that are not the responsibility of the homebuyer families
and that are related to health and safety, correction of development
deficiencies, physical accessibility, energy audits and cost-effective
energy conservation measures, or LBP testing, interim containment,
professional risk assessment and abatement. In addition, management
improvements are eligible costs.
(2) Ineligible costs. Routine maintenance or replacements, and
items that are the responsibility of the homebuyer families are
ineligible costs.
(3) Exception for vacant or non-homebuyer-occupied Turnkey III
units. (i) Notwithstanding the requirements of paragraph (d)(1) of this
section, an IHA may substantially rehabilitate a Turnkey III unit
whenever the unit becomes vacant or is occupied by a non-homebuyer
family in order to return the unit to the inventory or make the unit
suitable for homeownership purposes. An IHA that intends to use funds
under this paragraph must identify in its CIAP Application or CGP
Annual Submission the estimated number of units proposed for
substantial rehabilitation and subsequent sale. In addition, an IHA
must demonstrate that it has homebuyers who both are eligible for
homeownership, in accordance with the requirements of this part, and
have demonstrated their intent to be placed into each of the Turnkey
III units proposed to be substantially rehabilitated.
(ii) Before an IHA may be approved for substantial rehabilitation
of a unit under this paragraph (d), it must first deplete any Earned
Home Payments Account (EHPA) or Non-Routine Maintenance Reserve (NRMR)
pertaining to the unit, and request the maximum amount of operating
subsidy. Any increase in the value of a unit caused by its substantial
rehabilitation under this paragraph shall be reflected solely by its
subsequent appraised value, and not by an automatic increase in its
selling price.
(e) Demolition and conversion costs. Eligible costs include:
(1) Demolition of dwelling units or non-dwelling facilities, where
the demolition is approved by HUD under subpart M of this part, and
related costs, such as clearing and grading the site after demolition
and subsequent site improvement to benefit the remaining portion of the
existing development; and
(2) Conversion of existing dwelling units to different bedroom
sizes or to non-dwelling use.
(f) Replacement reserve costs (for CGP only). (1) Funding a
replacement reserve to carry out eligible activities in future years is
an eligible cost, subject to the following restrictions:
[[Page 8725]]
(i) Annual CGP funds are not needed for existing needs, as
identified by the IHA in its needs assessments; or
(ii) A physical improvement requires more funds than the IHA would
receive under its annual formula allocation; or
(iii) A management improvement requires more funds than the IHA may
use under its 20% limit for management improvements (except as provided
in paragraph (n)(2)(i) of this section), and the IHA needs to save a
portion of its annual grant, in order to combine it with a portion of
subsequent year(s) grants to fund the work item.
(2) The IHA shall invest replacement reserve funds so as to
generate a return equal to or greater than the average 91-day Treasury
bill rate.
(3) Interest earned on funds in the replacement reserve will not be
added to the IHA's income in the determination of an IHA's operating
subsidy eligibility, but must be used for eligible modernization costs.
(4) To the extent that its annual formula allocation and any
unobligated balances of modernization funds are not adequate to meet
emergency needs, an IHA must first use its replacement reserve, where
funded, to meet emergency needs, before requesting funds from the
reserve under Sec. 950.606.
(5) An IHA is not required to use its replacement reserve for
natural and other disasters.
(g) Management improvement costs. (1) General. Management
improvements that are development-specific or IHA-wide in nature are
eligible costs where needed to upgrade the operation of the IHA's
developments, sustain physical improvements at those developments or
correct management deficiencies. An IHA's ongoing operating expenses
are ineligible management improvement costs. For CIAP IHAs, management
improvements may be funded as a single work item.
(2) Eligible costs. Eligible costs include:
(i) General management improvement costs. Eligible costs include
general management improvement costs, such as: management, financial,
and accounting control systems of the IHA; adequacy and qualifications
of IHA personnel, including training; resident programs and services
through the coordination of the provision of social services from
tribal or local government or other public and private entities;
resident and development security; resident selection and eviction;
occupancy; rent collection; maintenance; and equal opportunity.
(ii) Economic development costs. Eligible costs include job
training for residents and resident business development activities,
for the purpose of carrying out activities related to the
modernization-funded management and physical improvements. HUD
encourages IHAs, to the greatest extent feasible, to hire residents as
trainees, apprentices, or employees to carry out the modernization
program under this part, and to contract with resident-owned businesses
for modernization work.
(iii) Resident management costs. Eligible costs include technical
assistance to a resident council or resident management corporation
(RMC), as defined in Sec. 950.962, in order to: determine the
feasibility of resident management to carry out management functions
for a specific development or developments; train residents in skills
directly related to the operations and management of the development(s)
for potential employment by the RMC; train RMC board members in
community organization, board development, and leadership; and assist
in the formation of an RMC.
(iv) Resident homeownership costs. Eligible costs are limited to
the study of the feasibility of converting rental to homeownership
units and the preparation of an application for conversion to
homeownership or sale of units.
(v) Preventive maintenance system. Eligible costs include the
establishment of a preventive maintenance system or improvement of an
existing system. A preventive maintenance system must provide for
regular inspections of building structures, systems and units and
determine the applicability of work eligible for operating funds
(routine maintenance) and work eligible for modernization funding (non-
routine maintenance).
(h) Drug elimination costs. Eligible costs include drug elimination
activities involving management or physical improvements, as specified
by HUD.
(i) LBP costs. Eligible costs include professional risk assessments
and interim containment of family developments/buildings constructed
before 1980, testing and abatement of family developments/buildings
constructed before 1978, and costs for insurance coverage for pollution
hazards associated with the testing, abatement, clean-up and disposal
of LBP on applicable surfaces of family developments/buildings
constructed before 1978.
(j) Administrative costs. Administrative costs necessary for the
planning, design, implementation and monitoring of the physical and
management improvements are eligible costs and include the following:
(1) Salaries. The salaries of non-technical and technical IHA
personnel assigned full-time or part-time to modernization are eligible
costs only where the scope and volume of the work are beyond that which
could be reasonably expected to be accomplished by such personnel in
the performance of their non-modernization duties. An IHA shall
properly apportion to the appropriate program budget any direct charges
for the salaries of assigned full- or part-time staff (e.g., to the
CIAP, CGP or operating budget);
(2) Employee benefit contributions. IHA contributions to employee
benefit plans on behalf of non-technical and technical IHA personnel
are eligible costs in direct proportion to the amount of salary charged
to the CIAP or CGP, as appropriate;
(3) Preparation of CIAP or CGP required documents.
(4) Resident participation. Eligible costs include those associated
with ensuring the meaningful participation of residents in the
development of the CIAP application or the CGP Annual Submission and
Comprehensive Plan and the implementation and monitoring of the
approved modernization program; and
(5) Other administrative costs, such as telephone and facsimile, as
specified by HUD.
(k) Audit costs (for CGP only). Eligible costs are limited to the
portion of the audit costs that are attributable to the modernization
program.
(l) Architectural/engineering and consultant fees. Eligible costs
include fees for planning, identification of needs, detailed design
work, preparation of construction and bid documents and other required
documents, LBP professional risk assessments and testing, and
inspection of work in progress.
(m) Relocation costs. Eligible costs include relocation and other
assistance for permanent and temporary relocation, as a direct result
of rehabilitation, demolition or acquisition for a modernization-funded
activity, where this assistance is required by 49 CFR part 24 or 24 CFR
950.117.
(n) Cost limitations. (1) CIAP costs. (i) Management improvement
costs. Management improvement costs shall not exceed a percentage of
the CIAP funds available to a Field Office in a particular FFY, as
specified by HUD.
(ii) Planning costs. Planning costs are costs that are incurred
before HUD approval of the CIAP application and that are related to
developing the CIAP application or carrying out eligible modernization
planning, such as detailed design work, preparation of
[[Page 8726]]
solicitations, and LBP professional risk assessment and testing.
Planning costs may be funded as a single work item. If an IHA incurs
planning costs without prior HUD approval, an IHA does so with the full
understanding that the costs may not be reimbursed upon approval of the
CIAP application. Planning costs shall not exceed 5 percent of the CIAP
funds available to a Field Office in a particular FFY.
(2) CGP costs. (i) Management improvement costs. Notwithstanding
the full fungibility of work items, an IHA shall not use more than a
total of 20 percent of its annual grant for management improvement
costs in account 1408, unless specifically approved by HUD.
(ii) Administrative costs. Notwithstanding the full fungibility of
work items, an IHA shall not use more than a total of 10 percent of its
annual grant on administrative costs in account 1410, excluding any
costs related to lead-based paint or asbestos testing (whether
conducted by force account employees or by a contractor), in-house
architectural/engineering (A/E) work, or other special administrative
costs required by tribal or State law, unless specifically approved by
HUD.
(3) Program benefit. Where the physical or management improvement,
including administrative cost, will benefit programs other than Indian
housing, such as Section 8 or local revitalization programs, eligible
costs are limited to the amount directly attributable to the Indian
housing program.
(4) No duplication. Any eligible cost for an activity funded by
CIAP or CGP shall not also be funded by any other HUD program.
(o) Ineligible costs. Ineligible costs include:
(1) Luxury improvements;
(2) Indirect administrative costs (overhead), as defined in OMB
Circular A-87;
(3) Indian housing operating assistance;
(4) Direct provision of social services, through either force
account or contract labor, from FFY 1996 and future FFYs funds, unless
otherwise provided by law; and
(5) Other ineligible activities, as specified by HUD.
(p) Expanded eligibility for FFY 1995 and prior year modernization
funds. The FFY 1995 Rescissions Act expanded the eligible activities
that may be funded with CIAP or CGP assistance provided from FFY 1995
and prior FFY funds. Such activities include, but are not limited to:
(1) New construction or acquisition of additional Indian housing
units, including replacement units;
(2) Modernization activities related to the Indian housing portion
of housing developments held in partnership, or cooperation with non-
Indian housing entities; and
(3) Other activities related to Indian housing, including
activities eligible under the Urban Revitalization Demonstration (HOPE
VI).
Sec. 950.610 Modernization and energy conservation standards.
All improvements funded under this part shall:
(a) Meet the modernization standards as prescribed by HUD;
(b) Incorporate cost-effective energy conservation measures,
identified in the IHA's most recently updated energy audit, conducted
pursuant to part 950, subpart K;
(c) Where changing or installing a new utility system, conduct a
life-cycle cost analysis, reflecting installation and operating costs;
and
(d) Provide decent, safe, and sanitary living conditions in IHA-
owned and IHA-operated public housing.
Sec. 950.612 Force account.
(a) An IHA may undertake the activities using force account or
contract labor, including contracting with an RMC, without prior HUD
approval.
(b) If the entirety of modernization activity (including the
planning and architectural design of the rehabilitation) is
administered by the RMC, the IHA shall not retain for any
administrative or other reason, any portion of the modernization funds
provided, unless the IHA and the RMC provide otherwise by contract.
Sec. 950.614 Initiation of modernization activities.
After HUD has approved the modernization program and entered into
an ACC amendment with the IHA, an IHA shall undertake the modernization
activities and expenditures set forth in its approved CIAP budget or
CGP Annual Statement/Five-Year Action Plan in a timely, efficient and
economical manner. All approved funding must be obligated within two
years of approval and expended within three years of approval unless
HUD approves a longer time period in the IHA's implementation schedule,
as set forth in the CIAP budget or CGP Annual Statement. HUD may
approve a longer time period for such reasons as the large size of the
grant or the complexity of the work.
Sec. 950.616 Fund requisitions.
To draw down modernization funds against the approved CIAP budget
or CGP Annual Statement, as appropriate, an IHA shall comply with
requirements prescribed by HUD.
Sec. 950.618 Contracting requirements.
In addition to the requirements specified in 24 CFR parts 85 and
subpart B of this part, the following provisions apply:
(a) Architect/engineer and other professional services contracts.
For CIAP only and notwithstanding 24 CFR 85.36(g), an IHA shall comply
with HUD requirements to either:
(1) Where the proposed contract amount exceeds the HUD-established
threshold, submit the contract for prior HUD approval before execution
or issuance; or
(2) Where the proposed contract amount does not exceed the HUD-
established threshold, certify that the scope of work is consistent
with the originally approved modernization program, and that the amount
is appropriate and does not result in the total HUD-approved CIAP
budget being exceeded.
(b) Assurance of completion. For CIAP and CGP and notwithstanding
24 CFR 85.36(h), for each construction contract over $100,000, the
contractor shall furnish a bid guarantee from each bidder equivalent to
5% of the bid price; and one of the following:
(1) A performance and payment bond for 100 percent of the contract
price; or
(2) Separate performance and payment bonds, each for 50% or more of
the contract price; or
(3) A 20% cash escrow; or
(4) A 25% irrevocable letter of credit.
(c) Construction solicitations. For CIAP only and notwithstanding
24 CFR 85.36(g), an IHA shall comply with HUD requirements to either:
(1) Where the estimated contract amount exceeds the HUD-established
threshold, submit a complete construction solicitation for prior HUD
approval before issuance; or
(2) Where the estimated contract amount does not exceed the HUD-
established threshold, certify receipt of the required architect's/
engineer's certification that the construction documents accurately
reflect HUD-approved work and meet the modernization and energy
conservation standards and that the construction solicitation is
complete and includes all mandatory items.
(d) Contract awards. (1) For CIAP only, an IHA shall obtain HUD
approval of the proposed award of a contract if the contract work is
inconsistent with
[[Page 8727]]
the originally approved modernization program or if the procurement
meets the criteria set forth in 24 CFR 85.36(g)(2)(i) through (iv). In
all other instances, an IHA shall make the award without HUD approval
after the IHA has certified that:
(i) The solicitation and award procedures were conducted in
compliance with tribal, State or local laws and Federal requirements;
(ii) The award does not meet the criteria in 24 CFR 85.36(g)(2)(i)
through (iv) for prior HUD approval; and
(iii) The contractor is not on the Lists of Parties Excluded from
Federal Procurement or Nonprocurement Programs.
(2) For CGP only, an IHA shall obtain HUD approval of the proposed
award of a contract if the procurement meets the criteria set forth in
24 CFR 85.36(g)(2)(i) through (iv).
(e) Contract modifications. For CIAP only and notwithstanding 24
CFR 85.36(g), except in an emergency endangering life or property, an
IHA shall comply with HUD requirements to either:
(1) Where the proposed contract modification exceeds the HUD-
established threshold, submit the proposed modification for prior HUD
approval before issuance; or
(2) Where the proposed contract modification does not exceed the
HUD-established threshold, certify that the proposed modification is
within the scope of the contract and that any additional costs are
within the total HUD-approved CIAP budget amount.
(f) Construction requirements. Where indicated by poor performance,
an IHA may be required to submit to HUD periodic progress reports and,
for prior HUD approval, construction completion documents above a HUD-
specified amount. For CGP only, an IHA is notified of additional
construction requirements by a notice of deficiency or a corrective
action order.
Sec. 950.620 On-site inspections.
It is the responsibility of the IHA, not HUD, to provide, by
contract or otherwise, adequate and competent supervisory and
inspection personnel during modernization, whether work is performed by
contract or force account labor, and with or without the services of an
architect/engineer, to assure work quality and progress.
Sec. 950.622 Fiscal closeout.
(a) Actual modernization cost certificate (AMCC). Upon expenditure
by the IHA of all funds, or termination by HUD of the activities funded
in a modernization program, an IHA shall submit the AMCC, in a form
prescribed by HUD, to HUD for review and approval for audit. After
audit verification, HUD shall approve the AMCC.
(b) Audit. The audit shall follow the guidelines prescribed in 24
CFR part 44, Non-Federal Government Audit Requirements. If the pre-
audit or post-audit AMCC indicates that there are excess funds, an IHA
shall immediately remit the excess funds as directed by HUD. If the
pre-audit or post-audit AMCC discloses unauthorized or ineligible
expenditures, an IHA shall immediately take such corrective actions as
HUD may direct.
Comprehensive Improvement Assistance Program (For IHAs that Own or
Operate Fewer than 250 Indian Housing Units)
Sec. 950.630 Procedures for obtaining approval of a modernization
program.
(a) HUD notification. After modernization funds for a particular
FFY become available, HUD shall publish in the Federal Register a
notice of funding availability (NOFA) and the time frame for submission
of the CIAP application, and other pertinent information.
(b) IHA consultation with tribal/local officials and residents/
homebuyers. An IHA shall develop the application in consultation with
tribal and local officials and with residents and homebuyers, as set
forth in Sec. 950.632.
(c) IHA application. An IHA shall submit to HUD an application, in
a form prescribed by HUD. Where an IHA has not included all its
developments in the CIAP application, HUD may not consider funding any
nonemergency work at excluded developments or subsequently approve use
of leftover funds at excluded developments.
(d) Completeness review. To be eligible for processing, an
application must be physically received by HUD by the time and date
specified in the NOFA. Immediately after the application deadline, HUD
shall perform a completeness review to determine whether the
application is complete, responsive to the NOFA, and acceptable for
technical processing.
(1) If the application form or any other essential document, as
specified in the NOFA, is missing, the IHA's application will be
considered substantially incomplete and, therefore, ineligible for
further processing. HUD shall immediately notify the IHA in writing.
(2) If other required documents, as specified in the NOFA, are
missing or there is a technical mistake, such as no signature on a
submitted form, HUD shall immediately notify the IHA in writing to
submit or correct the deficiency within a specified period of time from
the date of HUD's written notification. This is not additional time to
substantially revise the application. Deficiencies that may be
corrected at this time are inadvertently omitted documents or
clarifications of previously submitted material and other changes which
are not of such a nature as to improve the competitive position of the
application.
(3) If an IHA fails to submit or correct the items within the
required time period, the IHA's application will be ineligible for
further processing. HUD shall immediately notify the IHA in writing
after this occurs.
(4) An IHA may submit an application for Emergency Modernization
whenever needed.
(e) Eligibility review. (1) Eligibility for processing. To be
eligible for processing each eligible development for which work is
proposed must have reached the Date of Full Availability (DOFA) and be
under ACC amendment at the time of CIAP application submission.
(2) Eligibility for processing on reduced scope. When the following
conditions exist, an IHA will be reviewed on a reduced scope:
(i) Section 504 compliance. Where an IHA has not completed all
required structural changes to meet the need for accessible units, as
identified in the IHA's Section 504 needs assessment, the IHA is
eligible for processing only for Emergency Modernization or physical
work needed to meet Section 504 requirements.
(ii) Lead-based paint (LBP) testing compliance. Where an IHA has
not complied with the statutory requirement to complete LBP testing on
all pre-1978 family units, the IHA is eligible for processing only for
Emergency Modernization or work needed to complete the testing.
(iii) Fair Housing and Equal Opportunity (FHEO) compliance. Where
an IHA has not complied with any applicable FHEO requirements set forth
in Sec. 950.115, as evidenced by an enforcement action, finding or
determination, the IHA is eligible for processing only for Emergency
Modernization or for work needed to remedy civil rights deficiencies--
unless the IHA is implementing a voluntary compliance agreement or
settlement agreement designed to correct the area(s) of noncompliance.
The enforcement actions, findings, or determinations that trigger
limited eligibility are described in paragraphs (e)(2)(iii)(A) through
(E) of this section:
(A) A pending proceeding against the IHA based upon a charge of
[[Page 8728]]
discrimination issued under the Fair Housing Act. A charge of
discrimination is a charge under section 810(g)(2) of the Fair Housing
Act (42 U.S.C. 3610(g)(2)), issued by the Department's General Counsel
or legally authorized designee;
(B) A pending civil rights suit against the IHA, referred by the
Department's General Counsel and instituted by the Department of
Justice;
(C) Outstanding HUD findings of IHA noncompliance with civil rights
statutes and executive orders under Sec. 950.115, or implementing
regulations, as a result of formal administrative proceedings;
(D) A deferral of the processing of applications from the IHA
imposed by HUD under Title VI of the Civil Rights Act of 1964 (42
U.S.C. 2000d-1) and HUD implementing regulations (24 CFR 1.8), the
Attorney General's Guidelines (28 CFR 50.3), and procedures (HUD
Handbook 8040.1), or under Section 504 of the Rehabilitation Act of
1973 (29 U.S.C. 794) and HUD implementing regulations (24 CFR 8.57); or
(E) An adjudication of a violation under any of the authorities
specified in Sec. 950.115 in a civil action filed against the IHA by a
private individual.
(f) Technical processing. After all CIAP applications are reviewed
for eligibility, HUD shall categorize the eligible IHAs and their
developments into two processing groups: Group 1 for Emergency
Modernization; and Group 2 for Other Modernization. IHA developments
may be included in both groups and the same development may be in each
group. However, an IHA is only required to submit one CIAP application.
Group 1 developments are not subject to the technical review rating and
ranking and the long-term viability and reasonable cost determination.
Group 2 developments are subject to the technical review rating and
ranking and the long-term viability and reasonable cost determination.
Preference will be given to IHAs which request assistance for
developments that either have conditions that threaten the health or
safety of the residents or have a significant number of vacant,
substandard units, and which have demonstrated a capability of carrying
out the proposed activities.
(g) Rating on technical review factors. After categorizing the
eligible IHAs/developments into Group 1 and Group 2, HUD shall review
and rate each Group 2 IHA on each of the following technical review
factors:
(1) Extent and urgency of need, including need to comply with
statutory, regulatory, or court-ordered deadlines;
(2) Extent of vacancies, where the vacancies are not due to
insufficient demand;
(3) IHA's modernization capability;
(4) IHA's management capability;
(5) Degree of resident involvement in IHA operations;
(6) Degree of IHA activity in resident initiatives, including
resident management, economic development, and drug elimination
efforts;
(7) Degree of resident employment;
(8) Tribal/local government support for proposed modernization; and
(9) Such additional factors as the Secretary determines necessary
and appropriate.
(h) Ranking and selection for Joint Review. After rating all Group
2 IHAs/developments, the Area ONAP shall then rank each Group 2 IHA
based on its total score, list Group 2 IHAs in descending order,
subject to confirmation of need and cost at Joint Review, and identify
for Joint Review selection the highest IHA ranking applications in
Group 2 and other Group 2 IHAs with lower ranking applications, but
with high priority needs, which most reasonably approximate the amount
of modernization which can be funded. High priority needs are
nonemergency needs, but related to: health or safety; vacant,
substandard units; structural or system integrity; or compliance with
statutory, regulatory, or court-ordered deadlines. All Group 1
applications are automatically selected for Joint Review.
(i) Joint review. The purpose of the Joint Review is for HUD to
discuss with an IHA the proposed modernization program, as set forth in
the CIAP application, review long-term viability and cost
reasonableness determinations, and determine the size of the grant, if
any, to be awarded. HUD shall notify each IHA whose application has
been selected for further processing as to whether Joint Review will be
conducted on-site or off-site (e.g., by telephone or in-office
meeting). An IHA shall prepare for Joint Review by preparing a draft
CIAP budget, and reviewing the other items to be covered during Joint
Review, as prescribed by HUD. If conducted on-site, Joint Review may
include an inspection of the proposed physical work. IHAs not selected
for Joint Review will be advised in writing of the reasons for non-
selection.
(j) Funding decisions. After all Joint Reviews are completed, HUD
shall adjust the IHAs, developments, and work items to be funded and
the amounts to be awarded, on the basis of information obtained from
Joint Reviews, environmental reviews, and FHEO review, and make the
funding decisions. An IHA will not be selected for CIAP funding if
there is a duplication of funding. HUD shall select all bona fide
emergencies in Group 1 before funding Group 2 applications. After
funding announcement, HUD shall request a funded IHA to submit a CIAP
budget, including an implementation schedule, and any other required
documents, including the ACC amendment. IHAs not selected for funding
will be advised in writing of the reasons for non-selection.
(k) ACC amendment. After HUD approval of the CIAP budget, HUD and
the IHA shall enter into an ACC amendment in order for the IHA to draw
down modernization funds. The ACC amendment shall require low-income
use of the housing for not less than 20 years from the date of the ACC
amendment (subject to sale of homeownership units in accordance with
the terms of the ACC). The IHA Executive Director, where authorized by
the Board of Commissioners and permitted by tribal or State law, may
sign the ACC amendment on behalf of the IHA. HUD has the authority to
condition an ACC amendment (e.g., to require an IHA to hire a
modernization coordinator or contract administrator to administer its
modernization program).
(l) Declaration of trust. As HUD may require, an IHA shall execute
and file for record a Declaration of Trust as provided under the ACC to
protect the rights and interests of HUD throughout the 20-year period
during which the IHA is obligated to operate its developments in
accordance with the ACC, the Act, and HUD regulations and requirements.
A Declaration of Trust is not required for Mutual Help units.
(Approved by the Office of Management and Budget under control
number 2577-0044. An agency may not conduct or sponsor, and a person
is not required to respond to, a collection of information unless
the collection displays a valid control number.)
Sec. 950.632 Resident and homebuyer participation.
An IHA shall establish a Partnership Process, as defined in
Sec. 950.102, to develop, implement, and monitor the CIAP. Before
submission of the CIAP application, an IHA shall consult with the
residents, the resident organization, or the resident management
corporation (see subpart O of this part) (herein referred to as the
resident) of the development(s) being proposed for modernization,
regarding its intent to submit an application and to solicit resident
comments. An IHA shall give residents a reasonable opportunity to
present their views on the proposed modernization and alternatives to
it and
[[Page 8729]]
shall give full and serious consideration to resident recommendations.
An IHA shall respond in writing to the residents, indicating its
acceptance or rejection of resident recommendations, consistent with
HUD requirements and the IHA's own determination of efficiency,
economy, and need. After HUD approval of the modernization program, an
IHA shall inform the residents of the approved work items and its
progress during implementation. Where HUD does not approve the
modernization program, an IHA shall so inform the residents.
Sec. 950.634 Budget revisions.
(a) An IHA shall not incur any modernization cost in excess of the
total HUD-approved CIAP budget. An IHA shall submit a budget revision,
in a form prescribed by HUD, if the IHA plans to deviate from the
originally approved modernization program, as it was competitively
funded, by deleting or substantially revising approved work items or
adding new work items that are unrelated to the originally approved
modernization program.
(b) In addition to the provisions of paragraph (a) of this section,
an IHA shall comply with the following requirements:
(1) An IHA is not required to obtain prior HUD approval if, in
order to complete the originally approved modernization program, the
IHA needs to delete or revise approved work items or add new related
work items consistent with the original modernization program. In such
case, an IHA shall certify that the revisions are necessary to carry
out the approved work and do not result in substantial changes to the
competitively funded modernization program.
(2) An IHA shall not incur any modernization cost on behalf of any
development that is not covered by the original CIAP application.
(3) Where there are funds leftover after completion of the
originally approved modernization program, an IHA may, without prior
HUD approval, use the remaining funds to carry out other eligible
modernization activities at developments covered by the original CIAP
application.
Sec. 950.636 Progress reports.
For each six-month period ending March 31 and September 30, until
completion of the modernization program or expenditure of all funds, an
IHA shall submit a progress report, in a form prescribed by HUD, to the
HUD Area ONAP. Where HUD determines that an IHA is having
implementation problems, HUD may require more frequent reporting.
Sec. 950.638 Time extensions.
An IHA shall not obligate or expend funds after the obligation or
expenditure deadline date approved by HUD in the original
implementation schedule without a time extension, as follows:
(a) Certification. An IHA may extend an obligation or expenditure
deadline date no later than 30 calendar days after the existing
deadline date, without prior HUD approval, for a time period
commensurate with the delay, where the IHA certifies that the delay is
due to reasons outside the IHA's control, such as:
(1) Need to use leftover funds from a completed modernization
program for additional work;
(2) Unforeseen delays in contracting or contract administration;
(3) Litigation; and
(4) Delay by HUD or other institutions. Delay by the IHA's staff or
Board of Commissioners or a change in the Executive Director is not
considered to be outside of the IHA's control.
(b) Prior HUD approval. Where an IHA is unable to meet an
obligation or expenditure deadline date and the delay is not due to
reasons within the IHA's control, the IHA must request HUD approval of
a time extension no later than 30 calendar days after the deadline
date, to avoid recapture of funds. The request shall include an
explanation of the delay, the steps taken to prevent future delay, and
the requested extension.
Sec. 950.640 HUD review of IHA performance.
HUD shall periodically review IHA performance in carrying out its
approved modernization program to determine compliance with HUD
requirements, the quality of an IHA's inspections as evidenced by the
quality of work, and the timeliness of the work. HUD's review may be
conducted either in-office or on-site. Where conducted in-office, an
IHA shall forward any requested documents to HUD for post-review. Where
deficiencies are noted, an IHA shall take such corrective actions as
HUD may direct.
Comprehensive Grant Program (For IHAs That Own or Operate 250 or More
Indian Housing Units)
Sec. 950.650 Determination of formula amount.
(a) Submission of formula characteristics report. (1) Formula
characteristics report. In its first year of participation in the CGP,
each IHA shall verify and provide data to HUD, in a form and at a time
to be prescribed by HUD, concerning IHA and development
characteristics, so that HUD can develop the IHA's annual funding
allocation under the CGP in accordance with Sec. 950.604(e) and (f). If
an IHA fails to submit to HUD the formula characteristics report by the
prescribed deadline, HUD will use the data that it has available
concerning IHA and development characteristics for purposes of
calculating the IHA's formula share. After its first year of
participation in the CGP, an IHA is not required to submit formula
characteristics report data to HUD, but is required to respond to data
transmitted by HUD if there have been changes to its inventory from
that previously reported, or when requested by HUD. On an annual basis,
HUD will transmit to the IHA the formula characteristics report that
reflects the data that will be used to determine the IHA's formula
share. The IHA will have at least 30 calendar days to review and advise
HUD of errors in this HUD report. Necessary adjustments will be made to
the IHA's data before the formula is run for the current FFY.
(2) IHA Board Resolution. In its first year of participation in the
CGP, the IHA must include with its formula characteristics report under
paragraph (a)(1) of this section, a resolution adopted by the IHA Board
of Commissioners approving the report, and certifying that the data
contained in the formula characteristics report are accurate.
(b) HUD notification of formula amount; appeal rights. (1) Formula
amounts notification. After HUD determines an IHA's formula allocation
under Sec. 950.604(e) and (f) based upon the IHA, development, and
community characteristics, it shall notify the IHA of its formula
amount and provide instructions on the Annual Submission in accordance
with Secs. 950.652(a) and 950.656;
(2) Appeal based upon unique circumstances. An IHA may appeal in
writing HUD's determination of its formula amount within 60 calendar
days of the date of HUD's determination on the basis of ``unique
circumstances.'' The IHA shall indicate what is unique, specify the
manner in which it is different from all other IHAs participating in
the CGP, and provide any necessary supporting documentation. HUD shall
render a written decision on an IHA's appeal under this paragraph
within 60 calendar days of the date of its receipt of the IHA's request
for an appeal. HUD shall publish in the Federal Register a description
of the facts supporting any successful appeals based upon ``unique
[[Page 8730]]
circumstances.'' Any adjustments resulting from successful appeals in a
particular FFY under this paragraph shall be made from the subsequent
years' allocation of funds under this part;
(3) Appeal based upon error. An IHA may appeal in writing HUD's
determination of its formula amount within 60 calendar days of the date
of HUD's determination on the basis of an error. The IHA may appeal on
the basis of error the correctness of data in the formula
characteristics report. The IHA shall describe the nature of the error
and provide any necessary supporting documentation. HUD shall respond
to the IHA's request within 60 calendar days of the date of its receipt
of the IHA's request for an appeal. Any adjustment resulting from
successful appeals in a particular FFY under this paragraph shall be
made from subsequent years' allocation of funds under this part;
(c) IHAs determined to be high risk. If an IHA is determined to
have serious deficiencies in accordance with Sec. 950.135, or if the
IHA fails to meet, or to make reasonable progress toward meeting, the
goals previously established in its management improvement plan under
Sec. 950.135, HUD may designate the IHA as high risk. If HUD designates
the IHA as high risk with respect to modernization, HUD may withhold
some or all of the IHA's annual grant; HUD may declare a breach of the
grant agreement with respect to all or some of the IHA's functions, so
that the IHA or a particular function of the IHA may be administered by
another entity; or HUD may take other sanctions authorized by law or
regulation.
Sec. 950.652 Comprehensive plan (including Five-Year Action Plan).
(a) Submission. As soon as possible after modernization funds first
become available for allocation under this subpart, HUD shall notify
IHAs in writing of their formula amount. For planning purposes, IHAs
may use the amount they received under CGP in the prior year in
developing their comprehensive plan, or they may wait for the annual
HUD notification of formula amount under Sec. 950.650(b)(1).
(b)(1) Resident participation. An IHA is required to develop,
implement, monitor, and annually amend portions of its comprehensive
plan in consultation with residents of the developments covered by the
comprehensive plan, and with democratically elected resident groups. In
addition, the IHA shall also consult with resident management
corporations (RMCs) to the extent that an RMC manages a development
covered by the comprehensive plan. The IHA, in partnership with the
residents, shall develop and implement a process for resident
participation that ensures that residents are involved in a meaningful
way in all phases of the CGP. Such involvement shall include
implementing the Partnership Process as a critical element of the CGP.
(2) Establishment of Partnership Process. The IHA, in partnership
with the residents of the developments covered by the plan (and which
may include resident leaders, resident organizations, resident advisory
councils/boards and RMCs) must establish a Partnership Process to
develop and implement the goals, needs, strategies, and priorities
identified in the Comprehensive Plan. After residents have organized to
participate in the CGP, they may decide to establish a volunteer
advisory group of experts in various professions to assist them in the
CGP Partnership Process. The Partnership Process shall be designed to
achieve the following:
(i) To assure that residents are fully briefed and involved in
developing the content of, and monitoring the implementation of, the
Comprehensive Plan including, but not limited to, the physical and
management needs assessments, viability analysis, five-year action
plan, and annual statement. If necessary, the IHA shall develop and
implement capacity building strategies to ensure meaningful resident
participation in CGP. Such technical assistance efforts for residents
are eligible management improvement costs under CGP;
(ii) To enable residents to participate, on an IHA-wide or area-
wide basis, in ongoing discussions of the comprehensive plan and
strategies for its implementation, and in all meetings necessary to
ensure meaningful participation.
(3) Public notice. Within a reasonable amount of time before the
advance meeting for residents and duly elected resident organizations
under paragraph (b)(4) of this section, and the public hearing under
paragraph (b)(5) of this section, the IHA shall provide public notice
of the advance meeting and the public hearing in a manner determined by
the IHA and which ensures notice to all duly elected resident
organizations;
(4) Advance meeting for residents and duly elected resident
organizations. The IHA shall hold, within a reasonable amount of time
before the public hearing under paragraph (b)(5) of this section, a
meeting for residents and duly elected resident organizations at which
the IHA shall explain the components of the comprehensive plan. The
meeting shall be open to all residents and duly elected resident
organizations;
(5) Public Hearing. The IHA shall hold at least one public hearing,
and any appropriate number of additional hearings, to present
information on the comprehensive plan/annual submission and the status
of prior approved programs. The public hearing shall provide ample
opportunity for residents, tribal government officials, and other
interested parties to express their priorities and concerns. The IHA
shall give full consideration to the comments and concerns of
residents, tribal government officials, and other interested parties.
(c) Tribal/local government participation. An IHA shall consult
with and provide information to appropriate tribal and local government
officials with respect to the development of the comprehensive plan. In
the case of an IHA with developments in multiple jurisdictions, the IHA
may meet this requirement by consulting with an advisory group
representative of all the jurisdictions. At a minimum, such
consultation shall include providing such officials with:
(1) Advance written notice of the public hearing required under
paragraph (b)(5) of this section;
(2) A copy of the summary of total preliminary estimated costs to
address physical needs by each development and management/operations
needs IHA-wide, a specific description of the IHA's process for
maximizing the level of participation by residents, a summary of the
general issues raised on the plan by residents and others during the
public comment process, and the IHA's response to the general issues.
IHA records, such as minutes of planning meetings or resident surveys,
shall be maintained in the IHA's files and made available to residents,
resident organizations, and other interested parties upon request; and
(3) An opportunity to express their priorities and concerns to
ensure due consideration in the IHA's planning process.
(d) Contents of Comprehensive Plan. The comprehensive plan shall
identify all of the physical and management improvements needed for an
IHA and all of its developments, and that represent needs eligible for
funding under Sec. 950.608. The plan shall also include preliminary
estimates of the total cost of these improvements. The plan shall set
forth general strategies for addressing the identified needs, and
highlight any special strategies, such as major redesign or partial
demolition of a development, that are necessary to
[[Page 8731]]
ensure the long-term physical and social viability of the development.
Where long-term physical and social viability of the development is
dependent upon revitalization of the surrounding neighborhood in the
provision of or coordination of public services, or the consolidation
or coordination of drug prevention and other human service initiatives,
the IHA shall identify these needs and strategies. Each comprehensive
plan shall contain the following elements:
(1) Executive summary. An IHA shall include as part of its
comprehensive plan an executive summary to facilitate review and
comprehension by development residents and by the public. The executive
summary shall include:
(i) A summary of total preliminary estimated costs to address
physical needs by each development and IHA-wide physical and management
needs; and
(ii) A specific description of the IHA's process for maximizing the
level of participation by residents during the development,
implementation, and monitoring of the comprehensive plan, a summary of
the general issues raised on the plan by residents and others during
the public comment process, and the IHA's response to the general
issues. IHA records, such as minutes of planning meetings or resident
surveys, shall be maintained in the IHA's files and made available to
residents, duly elected resident organizations, and other interested
parties, upon request;
(2) Physical needs assessment. (i) Requirements. The physical needs
assessment identifies all of the work that an IHA would need to
undertake to bring each of its developments up to the modernization and
energy conservation standards, as required by the Act, to comply with
lead-based paint testing and abatement requirements under
Sec. 950.120(g), and to comply with other program requirements under
Sec. 950.120. The physical needs assessment is completed without regard
to the availability of funds, and shall include the following
information with respect to each of an IHA's developments:
(A) A brief summary of the physical improvements necessary to bring
each development to a level at least equal to the modernization and
energy conservation standards set forth in Sec. 950.610, to comply with
the lead-based paint testing and abatement requirements under
Sec. 950.120(g), and to comply with other program requirements under
Sec. 950.120. The IHA also should indicate the relative urgency of
need. If the IHA has no physical improvement needs at a particular
development at the time it completes its comprehensive plan, it must so
indicate. Similarly, if the IHA intends to demolish, partially
demolish, convert, or dispose of a development (or units within a
development), it must so indicate in the summary of physical
improvements;
(B) The replacement needs of equipment systems and structural
elements that will be required to be met (assuming routine and timely
maintenance is performed) during the period covered by the action plan;
(C) A preliminary estimate of the cost to complete the physical
work; and
(D) In addition, the IHA shall provide with respect to vacant or
non-homebuyer-occupied Turnkey III units, the estimated number of units
that the IHA is proposing for substantial rehabilitation and subsequent
sale, in accordance with Sec. 950.608(d)(3).
(ii) Sources of data. The IHA shall identify in its needs
assessment the sources from which it derived data to develop the
physical needs assessment under this paragraph (d)(2), and shall retain
such source documents in its files.
(3) Management needs assessment. (i) Requirements. The plan shall
include a comprehensive assessment of the improvements needed to
upgrade the management and operation of the IHA and of each viable
development, so that decent, safe, and sanitary living conditions will
be provided. The management needs assessment shall include the
following, with the relative urgency of need indicated:
(A) An identification of the most current needs related to the
following areas (to the extent that any of these needs is addressed in
a HUD-approved management improvement plan, the IHA may simply include
a cross-reference to these documents):
(1) The management, financial, and accounting control systems of
the IHA;
(2) The adequacy and qualifications of personnel employed by the
IHA in the management and operation of its developments, for each
significant category of employment;
(3) The adequacy and efficacy of:
(i) Resident programs and services;
(ii) Resident and development security;
(iii) Resident selection and eviction;
(iv) Occupancy;
(v) Maintenance;
(vi) Resident management and resident capacity building programs;
(vii) Resident opportunities for employment and business
development and other self-sufficiency opportunities for residents; and
(viii) Homeownership opportunities for residents.
(B) Any additional deficiencies identified through audits and HUD
monitoring reviews that are not addressed under paragraph (e)(3)(i)(A)
of this section. To the extent that any of these is addressed in a HUD-
approved management improvement plan, the IHA may include a cross-
reference to these documents;
(C) Any other management and operations needs that the IHA wants to
address at the IHA-wide or development level; and
(D) An IHA-wide preliminary cost estimate for addressing all the
needs identified in the management needs assessment, without regard to
the availability of funds.
(ii) Sources of data. The IHA shall identify in its needs
assessment the sources from which it derived data to develop the
management needs assessment under paragraph (d)(3) of this section, and
shall retain such source documents in its files.
(4) Demonstration of long-term physical and social viability. (i)
General. The plan shall include, on a development-by-development basis,
an analysis of whether completion of the improvements and replacements
identified under paragraphs (e)(2) and (e)(3) of this section will
reasonably ensure the long-term physical and social viability,
including achieving structural/system soundness and full occupancy, of
the development at a reasonable cost. For cost reasonableness, the IHA
shall determine whether the unfunded hard costs satisfy the definition
of ``reasonable cost.'' Where the IHA wishes to fund a development, for
other than emergencies, where hard costs exceed that reasonable cost,
the IHA shall submit written justification to the Field Office. If the
Field Office agrees with the IHA's request, the Field Office shall
forward its recommendation to Headquarters for final decision. Where
the estimated per unit unfunded hard cost is equal to or less than the
per unit TDC for the smallest bedroom size at the development, no
further computation of the TDC limit is required. The IHA shall keep
documentation in its files to support all cost determinations. The
Field Office will review cost reasonableness as part of its review of
the Annual Submission and the Performance and Evaluation Report. As
necessary, HUD will review the IHA's documentation in support of its
cost reasonableness, taking into account broader efforts to revitalize
the neighborhoods in which the development is located;
(ii) Determination of non-viability. When an IHA's analysis of a
development, under paragraph (e) of
[[Page 8732]]
this section, establishes that completion of the identified
improvements and replacements will not result in the long-term physical
and social viability of the development at a reasonable cost, the IHA
shall not expend CGP funds for the development, except for emergencies
and essential nonroutine maintenance necessary to maintain habitability
until residents can be relocated. The IHA shall specify in its
comprehensive plan the actions it proposes to take with respect to the
nonviable development (e.g., demolition or disposition under subpart M
of this part).
(5) Five-Year Action Plan. (i) General. The comprehensive plan
shall include a rolling five-year acti
FR Doc. 96-4814 Streamlining the Comprehensive Improvement Assistance Program and Comprehensive Grant Program
on plan to carry out the
improvements and replacements (or a portion thereof) identified under
paragraphs (e)(2) and (e)(3) of this section. In developing its five-
year action plan, the IHA shall assume that the current year funding or
formula amount will be available for each year of its five-year action
plan, whichever the IHA is using for planning purposes, plus the IHA's
estimate of the funds that will be available from other sources, such
as tribal, state, and local governments. All activities specified in an
IHA's five-year action plan are contingent upon the availability of
funds.
(ii) Requirements. Under the action plan, an IHA must indicate how
it intends to use the funds available to it under the CGP to address
the deficiencies, or a portion of the deficiencies, identified under
its physical and management needs assessments, as follows:
(A) Physical condition. With respect to the physical condition of
an IHA's developments, an IHA must indicate in its action plan how it
intends to address, over a five-year period, the deficiencies (or a
portion of the deficiencies) identified in its physical needs
assessment so as to bring each of its developments up to a level at
least equal to the modernization and energy conservation standards.
This would include specifying the work to be undertaken by the IHA in
major work categories (e.g., kitchens, electrical systems, etc.);
establishing priorities among the major work categories by development
and year based upon the relative urgency of need; and estimating the
cost of each of the identified major work categories. In developing its
action plan, an IHA shall give priority to the following:
(1) Activities required to correct emergency conditions;
(2) Activities required to meet statutory (or other legally
mandated) requirements;
(3) Activities required to meet the needs identified in the Section
504 needs assessment within the regulatory timeframe; and
(4) Activities required to complete lead-based paint testing and
abatement requirements.
(B) Management and operations. An IHA shall address in its action
plan the management and operations deficiencies (or a portion of the
deficiencies) identified in its management needs assessment, as
follows:
(1) With respect to the management and operations needs of the IHA,
the IHA shall identify how it intends to address with CGP funds, if
necessary, the deficiencies (or a portion thereof) identified in its
management needs assessment, including work identified through audits,
HUD monitoring reviews, and self-assessments (this would include
establishing priorities based upon the relative urgency of need); and
(2) A preliminary IHA-wide cost estimate, by major work category.
(iii) Procedure for maintaining current Five-Year Action Plan. The
IHA shall maintain a current Five-Year Action Plan by annually amending
its Five-Year Action Plan, in conjunction with the Annual Submission;
(6) Tribal/local government statement. The Comprehensive Plan shall
include a statement signed by the chief executive officer of the
appropriate governing body (or in the case of an IHA with developments
in multiple jurisdictions, from the CEO of each such jurisdiction),
certifying as to the following:
(i) The IHA developed the comprehensive plan/five-year action plan
or amendments thereto in consultation with officials of the appropriate
governing body and with development residents covered by the
comprehensive plan/five-year action plan, in accordance with the
requirements of paragraphs (b) and (c) of this section;
(ii) The comprehensive plan/five-year action plan or amendments
thereto are consistent with the appropriate governing body's assessment
of its low-income housing needs and that the appropriate governing body
will cooperate in providing resident programs and services; and
(iii) The IHA's proposed drug elimination activities are
coordinated with, and supportive of, local drug elimination strategies
and neighborhood improvement programs, if applicable.
(7) IHA resolution. The plan shall include a resolution, in a form
prescribed by HUD, adopted by the IHA Board of Commissioners, and
signed by the Board Chairman of the IHA, approving the comprehensive
plan or any amendments.
(e) Amendments to the Comprehensive Plan. (1) Extension of time for
performance. An IHA shall have the right to amend its comprehensive
plan (including the action plan) to extend the time for performance
whenever HUD has not provided the amount of assistance set forth in the
comprehensive plan or has not provided the assistance in a timely
manner.
(2) Amendments to needs assessments. The IHA shall amend its plan
by revising its needs assessments whenever it proposes to carry out
activities in its five-year action plan or annual statement that are
not reflected in its current needs assessments (except in the case of
emergencies). The IHA may propose an amendment to its needs
assessments, in connection with the submission of its annual submission
(see Sec. 950.656(b)), or at any other time. These amendments shall be
reviewed by HUD in accordance with Sec. 950.654;
(3) Six-year revision of Comprehensive Plan. Every sixth year
following the initial year of participation, the IHA shall submit to
HUD, with its annual submission, a complete update of its comprehensive
plan. An IHA may elect to revise some or all parts of the comprehensive
plan more frequently.
(4) Annual revision of Five-Year Action Plan. Annually, the IHA
shall submit to HUD, with its annual submission, an update of its five-
year action plan, eliminating the previous year and adding an
additional year. The IHA shall identify changes in work categories
(other than those included in the new fifth year) from the previous
year five-year action plan when making this Annual Submission.
(5) Required submissions. Any amendments to the comprehensive plan
under this section shall be submitted with the IHA resolution under
Sec. 950.652(e)(7).
(f) Prerequisite for receiving assistance. (1) Prohibition of
assistance. No financial assistance, except for emergency work to be
funded under Secs. 950.604(b) and 950.606, and for modernization needs
resulting from disasters under Sec. 950.604(b), may be made available
under this subpart unless HUD has approved a comprehensive plan
submitted by the IHA that meets the requirements of Sec. 950.652. An
IHA that has failed to obtain approval of its comprehensive plan by the
end of the FFY shall have its formula allocation for that year (less
[[Page 8733]]
any formula amounts provided to the IHA for emergencies) added to the
subsequent year's appropriation of funds for grants under this part.
HUD shall allocate such funds to PHAs and IHAs participating in the CGP
in accordance with the formula under Sec. 950.604(e) and (f) in the
subsequent FFY. An IHA that elects in any FFY not to participate in the
CGP under this subpart may participate in the CGP in subsequent FFYs.
(2) Requests for emergency assistance. An IHA may receive funds
from its formula allocation to address emergency modernization needs
even if HUD has not approved the IHA's comprehensive plan. To request
such assistance, the IHA shall submit to HUD a request for funds in
such form as HUD may prescribe, including any documentation necessary
to support its claim that an emergency exists. HUD shall review the
request and supporting documentation to determine if it meets the
definition of ``emergency work,'' as set forth in Sec. 950.102.
Sec. 950.654 HUD review and approval of comprehensive plan (including
Five-Year Action Plan).
(a) Submission of comprehensive plan. (1) Upon receipt of a
comprehensive plan from an IHA, HUD shall determine whether:
(i) The plan contains each of the required components specified at
Sec. 950.652; and
(ii) If applicable, the IHA has submitted any additional
information or assurances required as a result of HUD monitoring,
findings of inadequate IHA performance, audit findings, or civil rights
compliance findings.
(2) Acceptance for review. If the IHA has submitted a Comprehensive
Plan (including the action plan) that meets the criteria specified in
paragraph (a)(1) of this section, HUD shall accept the Comprehensive
Plan for review, within 14 calendar days of its receipt in the Area
ONAP. The IHA shall be notified in writing that the plan has been
accepted by HUD, and that the 75-day review period is proceeding.
(3) Time period for review. A Comprehensive Plan that is accepted
by HUD for review shall be considered to be approved unless HUD
notifies the IHA in writing, postmarked within 75 calendar days of the
date of HUD's receipt of the Comprehensive Plan for review, that HUD
has disapproved the plan. HUD shall not disapprove a Comprehensive Plan
on the basis that it cannot complete its review within the 75-day
deadline.
(4) Rejection of Comprehensive Plan. If an IHA has submitted a
Comprehensive Plan (including the action plan) that does not meet the
requirements of paragraph (a)(1) of this section, HUD shall notify the
IHA within 14 calendar days of its receipt that HUD has rejected the
plan for review. In such case, HUD shall indicate the reasons for
rejection, the modifications required to qualify the Comprehensive Plan
for HUD review, and the deadline date for receipt of any modifications.
(b) HUD approval of Comprehensive Plan (including action plan). (1)
A Comprehensive Plan (including the action plan) that is accepted by
HUD for review in accordance with paragraph (a) of this section shall
be considered to be approved, unless HUD notifies the IHA in writing,
postmarked within 75 days of the date of HUD's receipt of the
Comprehensive Plan for review, that HUD has disapproved the plan,
indicating the reasons for disapproval, and the modifications required
to make the Comprehensive Plan approvable. The IHA shall re-submit the
Comprehensive Plan to HUD, in accordance with the deadline established
by HUD, which may allow up to 75 calendar days before the end of the
FFY for HUD review. If the revised plan is disapproved by HUD following
its resubmission, or the IHA fails to resubmit the plan by the deadline
established by HUD, any funds that would have been allocated to the IHA
shall be added to the subsequent year's appropriation of funds for
grants under this subpart. HUD shall allocate such funds to IHAs and
PHAs participating in the CGP in accordance with the formula under 24
CFR Sec. 950.604 and 968.103. HUD shall not disapprove a Comprehensive
Plan on the basis that HUD cannot complete its review under this
section within the 75-day deadline.
(2) HUD shall approve the comprehensive plan except where it makes
a determination in accordance with one or more of the following:
(i) Comprehensive plan is incomplete in significant matters;
(ii) Identified needs are plainly inconsistent with facts and data;
(A) Identified physical improvements and replacements are
inadequate;
(B) Identified management improvements are inadequate;
(C) Proposed physical and management improvements fail to address
identified needs;
(iii) Action plan is plainly inappropriate to meeting identified
needs;
(iv) Inadequate demonstration of long-term viability at reasonable
cost; or
(v) Contradiction of tribal/local government certification or IHA
resolution.
(c) Effect of HUD approval of Comprehensive Plan. After HUD
approves the Comprehensive Plan (including the Five-Year Action Plan),
or any amendments to the plan, it shall be binding upon HUD and the
IHA, until such time as the IHA submits, and HUD approves, an amendment
to its plan. The IHA is expected to undertake the work set forth in the
Annual Statement. However, the IHA may undertake any of the work
identified in any of the other four years of the latest approved Five-
Year Action Plan, current approved Annual Statement or previously
approved CIAP budgets, without further HUD approval. Actual uses of the
funds are to be reflected in the IHA annual Performance and Evaluation
Report for each grant. See Sec. 950.658. HUD encourages the IHA to
inform the residents of significant changes (such as changes in scope
of work or whenever it moves work items within the approved Five-Year
Action Plan). The IHA shall retain documentation of that information in
its files. If HUD determines as a result of an audit or monitoring
findings that an IHA has provided false or substantially inaccurate
data in its Comprehensive Plan/Annual Submission or has circumvented
the intent of the program, HUD may condition the receipt of assistance,
in accordance with Sec. 950.660. Moreover, in accordance with 18 U.S.C.
1001, any individual or entity who knowingly and willingly makes or
uses a document or writing containing any false, fictitious, or
fraudulent statement or entry, in any matter within the jurisdiction of
any department or agency of the United States, shall be fined not more
than $10,000 or imprisoned for not more than five years, or both.
Sec. 950.656 Annual submission of activities and expenditures.
(a) General. The Annual Submission is a collective term for all
documents that the IHA shall submit to HUD for review and approval
before accessing the current FFY grant funds. Such documents include
the Annual Statement, Work Statements for years two through five of the
Five-Year Action Plan, local government statement, IHA Board
Resolution, materials demonstrating the partnership process, and any
other documents as prescribed by HUD. For planning purposes, an IHA may
use either the amount of funding received in the current year or the
actual formula amount provided in HUD's notification under Sec. 950.650
in
[[Page 8734]]
developing the Five-Year Action Plan for presentation at the resident
meetings and public hearing. Work Statements cover the second through
the fifth years of the Five-Year Action Plan and set forth the major
work categories and costs, by development or IHA-wide, that the IHA
intends to undertake in each year of years two through five. In
preparing these Work Statements, the IHA shall assume that the current
FFY formula amount will be available in each year of years two through
five. The Work Statements for all five years will be at the same level
of detail so that the IHA may interchange work items as discussed in
Sec. 950.652. An IHA may budget up to 8 percent of its annual grant in
a contingency account for cost overruns.
(b) Submission. After receiving HUD notification of the formula
amount estimating how much funding will be available from other
sources, such as State and tribal governments, and determining its
activities and costs based on the current FFY formula amount, the IHA
shall submit its Annual Submission.
(c) Acceptance for review. (1) Upon receipt of an Annual Submission
from an IHA, HUD shall determine whether:
(i) The Annual Submission contains each of the required components;
and
(ii) The IHA has submitted any additional information or assurances
required as a result of HUD monitoring, findings of inadequate IHA
performance, audit findings, and civil rights compliance findings.
(2) If the IHA has submitted a complete Annual Submission and all
required information and assurances, HUD will accept the submission for
review, as of the date of receipt. If the IHA has not submitted all
required material, HUD will promptly notify the IHA that it has
disapproved the submission, indicating the reasons for disapproval, the
modifications required to qualify the Annual Submission for HUD review,
and the date by which such modifications shall be received by HUD.
(d) Resident and local government participation. An IHA is required
to develop its Annual Submission, including any proposed amendments to
its Comprehensive Plan as provided in Sec. 950.652, in consultation
with officials of the appropriate governing body (or in the case of an
IHA with developments in multiple jurisdictions, in consultation with
the CEO of each such jurisdiction or with an advisory group
representative of all jurisdictions) and with residents and duly
elected resident organizations of the developments covered by the
Comprehensive Plan, as follows:
(1) Public notice. Within a reasonable amount of time before the
advance meeting for residents under paragraph (d)(2) of this section,
and the public hearing under paragraph (d)(3) of this section, the IHA
shall annually provide public notice of the advance meeting and the
public hearing in a manner determined by the IHA and that ensures
notice to all duly elected resident organizations;
(2) Advance meeting with residents. The IHA shall at least annually
hold a meeting open to all residents and duly elected resident
organizations. The advance meeting shall be held within a reasonable
amount of time before the public hearing under paragraph (d)(3) of this
section. The IHA will provide residents with information concerning the
contents of the IHA's Five-Year Action Plan (and any proposed
amendments to the IHA's Comprehensive Plan to be submitted with the
Annual Submission) so that residents can comment adequately at the
public hearing on the contents of the Five-Year Action Plan and any
proposed amendments to the Comprehensive Plan.
(3) Public hearing. The IHA shall annually hold at least one public
hearing, and any appropriate number of additional hearings, to present
information on the Annual Submission and the status of prior approved
programs. The public hearing shall provide ample opportunity for
residents of the developments covered by the Comprehensive Plan,
officials of the appropriate governing body, and other interested
parties, to express their priorities and concerns. The IHA shall give
full consideration to the comments and concerns of residents, local
government officials, and other interested parties in developing its
Five-Year Action Plan, or any amendments to its Comprehensive Plan.
(4) Expedited scheduling. IHAs are encouraged to hold the meeting
with residents and duly elected resident organizations under paragraph
(d)(2) of this section, and the public hearing under paragraph (d)(3)
of this section, between July 1 (i.e., after the end of the program
year--June 30) and September 30, using the formula amount for the
current FFY. If an IHA elects to use such expedited scheduling, it
shall explain at the meeting with residents and duly elected resident
organizations and at the public hearing that the current FFY amount is
not the actual grant amount for the subsequent year, but is rather the
amount used for planning purposes. It shall also explain that the Five-
Year Action Plan will be adjusted when HUD provides notification of the
actual formula amount, and explain which major work categories at which
developments may be added or deleted to adjust for the actual formula
amount and that any added work categories/developments will come from
the Comprehensive Plan.
(e) Contents of Annual Submission. The Annual Statement for each
year shall include, for each development or on an IHA-wide basis for
management improvements or certain physical improvements for which work
is to be funded out of that year's grant:
(1) A list of development accounts with an identification of major
work categories;
(2) The cost for each major work category, as well as a summary of
cost by development account;
(3) The IHA-wide or development-specific management improvements to
be undertaken during the year;
(4) For each development and for any management improvements not
covered by a HUD-approved management improvement plan, a schedule for
the use of current year funds, including target dates for the
obligation and expenditure of the funds (see Sec. 950.614);
(5) A summary description of the actions to be taken with non-CGP
funds to meet physical and management improvement needs that have been
identified by the IHA in its needs assessments;
(6) Documentation supporting the IHA's actions in carrying out its
responsibilities under the National Environmental Policy Act and other
related authorities in accordance with Sec. 950.120(a) and (b);
(7) Other information, as specified by HUD and approved by OMB
under the Paperwork Reduction Act; and
(8) An IHA resolution approving the Annual Submission or any
amendments thereto, as set forth in Sec. 950.652.
(f) Additional submissions with Annual Submission. An IHA shall
submit with the Annual Submission any amendments to the Comprehensive
Plan, as set forth in Sec. 950.652, and such additional information as
may be prescribed by HUD. HUD shall review any proposed amendments to
the Comprehensive Plan in accordance with review standards under
Sec. 950.654.
(g) HUD review and approval of Annual Submission. (1) General. An
Annual Submission accepted in accordance with paragraph (a) of this
section shall be considered to be approved, unless HUD notifies the IHA
in writing, postmarked within 75 calendar days of the date that HUD
receives the Annual Submission for
[[Page 8735]]
review under paragraph (c) of this section, that HUD has disapproved
the Annual Submission, indicating the reasons for disapproval, the
modifications required to make the Annual Submission approvable, and
the date by which such modifications shall be received by HUD. HUD may
request additional information (e.g., for eligibility determinations)
to facilitate review and approval of the Annual Submission during the
75-day review period. HUD shall not disapprove an Annual Submission on
the basis that HUD cannot complete its review under this section within
the 75-day deadline;
(2) Bases for disapproval for Annual Submission. HUD shall approve
the Annual Submission, except when:
(i) Plainly inconsistent with Comprehensive Plan. HUD determines
that the activities and expenditures proposed in the Annual Submission
are plainly inconsistent with the IHA's approved Comprehensive Plan;
(ii) Contradiction of IHA resolution. HUD has evidence that tends
to challenge, in a substantial manner, the certifications contained in
the board resolution, as required by Sec. 950.672(d)(7).
(h) Amendments to Annual Statement. The IHA shall advise HUD of all
changes to the IHA's approved Annual Statement in its Performance and
Evaluation Report submitted under Sec. 950.658. The IHA shall submit to
HUD for prior approval any additional work categories (except for
emergency work) that are not within the IHA's approved Five-Year Action
Plan.
(i) Failure to obligate formula funding and extension of time for
performance. (1) Failure to obligate formula funds. If the IHA fails to
obligate formula funds within the approved or extended time period, the
IHA may be subject to an alternative management strategy, which may
involve third-party oversight or administration of the modernization
function. HUD would only require such action after a corrective action
order had been issued under Sec. 950.660 and the IHA failed to comply
with the order. HUD could then require an alternative management
strategy in a corrective action order. An IHA may appeal in writing the
corrective action order requiring an alternative management strategy
within 30 calendar days of that order. HUD Headquarters shall render a
written decision on an IHA's appeal within 30 calendar days of the date
of its receipt of the IHA's appeal.
(2) Extension of time for performance. An IHA may extend the target
dates for fund obligation and expenditure in the approved Annual
Statement whenever any delay outside the IHA's control occurs, as
specified by HUD, and the extension is made in a timely manner. Such
revision is subject to HUD review under Sec. 950.660 as to the IHA's
continuing capacity. HUD shall not review as to an IHA's continuing
capacity any revisions to an IHA's Comprehensive Plan and related
statements when the basis for the revision is that HUD has not provided
the amount of assistance set forth in the Annual Submission, or has not
provided such assistance in a timely manner.
(j) ACC Amendment. After HUD approval of each year's Annual
Submission, HUD and the IHA shall enter into an ACC amendment in order
to draw down modernization funds. The ACC amendment shall require low-
income use of housing for not less than 20 years from the date of the
ACC amendment (subject to sale of homeownership units in accordance
with the terms of the ACC).
(k) Declaration of Trust. As HUD may require, the IHA shall execute
and file for record a Declaration of Trust as provided under the ACC to
protect the rights and interests of HUD throughout the 20-year period
during which the IHA is obligated to operate its developments in
accordance with the ACC, the Act, and HUD regulations and requirements.
A Declaration of Trust is not required for Mutual Help units.
Sec. 950.658 IHA Performance and Evaluation Report.
For any FFY in which an IHA has received assistance under this
subpart, the IHA shall submit a Performance and Evaluation Report, in a
form and at a time to be prescribed by HUD, describing its use of
assistance in accordance with the approved Annual Statement. The IHA
shall make reasonable efforts to notify residents and officials of the
appropriate governing body of the availability of the draft report,
make copies available to residents in the development office, and
provide residents with at least 30 calendar days in which to comment on
the report.
Sec. 950.660 HUD review of IHA performance.
(a) HUD determination. At least annually, HUD shall carry out such
reviews of the performance of each IHA as may be necessary or
appropriate to make the determinations required by this paragraph (a),
taking into consideration all available evidence.
(1) Conformity with Comprehensive Plan. HUD will determine whether
the IHA has carried out its activities under this subpart I in a timely
manner and in accordance with its Comprehensive Plan.
(2) Continuing capacity. HUD will determine whether the IHA has a
continuing capacity to carry out its Comprehensive Plan in a timely
manner. After the first full operational year of CGP, CIAP experience
will not be taken into consideration except when the IHA has not yet
had comparable experience under the CGP.
(3) Reasonable progress. HUD shall determine whether the IHA has
satisfied, or has made reasonable progress towards satisfying, the
applicable performance standards.
(b) Notice of deficiency. Based on HUD reviews of IHA performance
and findings of any of the deficiencies in paragraph (d) of this
section, HUD may issue to the IHA a notice of deficiency stating the
specific program requirements that the IHA has violated and requesting
the IHA to take any of the actions in paragraph (e) of this section.
(c) Corrective action order. (1) Based on HUD reviews of IHA
performance and findings of any of the deficiencies paragraph (d) of
this section, HUD may issue to the IHA a corrective action order,
whether or not a notice of deficiency has previously been issued in
regard to the specific deficiency on which the corrective action order
is based. HUD may order corrective action at any time by notifying the
IHA of the specific program requirements that the IHA has violated, and
specifying that any of the corrective actions listed in paragraph (e)
of this section shall be taken. HUD shall design corrective action to
prevent a continuation of the deficiency, mitigate any adverse effects
of the deficiency to the extent possible, or prevent a recurrence of
the same or similar deficiencies.
(2) Before ordering corrective action, HUD will notify the IHA and
give it an opportunity to consult with HUD regarding the proposed
action.
(3) Any corrective action ordered by HUD shall become a condition
of the grant agreement.
(4) If HUD orders corrective action by an IHA in accordance with
this section, the IHA's Board of Commissioners shall notify affected
residents of HUD's determination, the bases for the determination, the
conditioning requirements imposed under paragraph (c) of this section,
and the consequences to the IHA if it fails to comply with HUD's
requirements.
(d) Basis for corrective action. HUD may order an IHA to take
corrective action only if HUD determines:
(1) The IHA has not submitted a performance and evaluation report,
in accordance with Sec. 950.658;
[[Page 8736]]
(2) The IHA has not carried out its activities under the CGP
program in a timely manner and in accordance with its Comprehensive
Plan or HUD requirements, as described in paragraph (a)(1) of this
section;
(3) The IHA does not have a continuing capacity to carry out its
Comprehensive Plan in a timely manner or in accordance with its
Comprehensive Plan or HUD requirements, as described in paragraph
(a)(2) of this section;
(4) The IHA has not satisfied, or has not made reasonable progress
towards satisfying, the performance standards described in paragraph
(a)(3) of this section;
(5) An audit conducted in accordance with 24 CFR part 44 and
Sec. 950.120, or pursuant to other HUD reviews (including monitoring
findings) reveals deficiencies that HUD reasonably believes require
corrective action;
(6) The IHA has failed to repay HUD for amounts awarded under the
CGP program that were improperly expended; or
(7) The IHA has been determined to be high risk, in accordance with
Sec. 950.135.
(e) Types of corrective action. HUD may direct an IHA to take one
or more of the following corrective actions:
(1) Submit additional information:
(i) Concerning the IHA's administrative, planning, budgeting,
accounting, management, and evaluation functions, to determine the
cause for a IHA not meeting the standards in paragraphs (a)(1), (2), or
(3) of this section;
(ii) Explaining any steps the IHA is taking to correct the
deficiencies;
(iii) Documenting that IHA activities were not inconsistent with
the IHA's annual statement or other applicable laws, regulations, or
program requirements; and
(iv) Demonstrating that the IHA has a continuing capacity to carry
out the Comprehensive Plan in a timely manner;
(2) Submit detailed schedules for completing the work identified in
its Annual Statements and report periodically on its progress on
meeting the schedules;
(3) Notwithstanding 24 CFR 85.36(g), submit to HUD the following
documents for prior approval, which may include, but are not limited
to:
(i) Proposed agreement with the architect/engineer (prior to
execution);
(ii) Complete construction and bid documents (prior to soliciting
bids);
(iii) Proposed award of contracts, including construction and
equipment contracts and management contracts; or
(iv) Proposed contract modifications prior to issuance, including
modifications to construction and equipment contracts, and management
contracts.
(4) Submit additional material in support of one or more of the
statements, resolutions, and certifications submitted as part of the
IHA's Comprehensive Plan, Five-Year Action Plan, or Performance and
Evaluation Report;
(5) Submit additional material in support of one or more of the
statements, resolutions, and certifications submitted as part of the
IHA's Comprehensive Plan, Five-Year Action Plan, or Performance and
Evaluation Report;
(6) Reimburse, from non-HUD sources, one or more program accounts
for any amounts improperly expended;
(7) Take such other corrective actions HUD determines appropriate
to correct IHA deficiencies.
(8) Submit to an alternative management strategy which may involve
third-party oversight or administration of the modernization function
(see Sec. 950.650); and
(9) Take such other corrective actions HUD determines appropriate
to correct IHA deficiencies.
(f) Failure to take corrective action. In cases in which HUD has
ordered corrective action and the IHA has failed to take the required
actions within a reasonable time, as specified by HUD, HUD may take one
or more of the following steps:
(1) Withhold some or all of the IHA's grant;
(2) Declare a breach of the ACC grant amendment with respect to
some or all of the IHA's functions; or
(3) Any other sanction authorized by law or regulation.
(g) Reallocation of funds that have been withheld. If HUD has
withheld for a prescribed period of time some or all of an IHA's annual
grant, HUD may reallocate such amounts to other IHAs/PHAs under the CGP
program, subject to approval in appropriations acts. The reallocation
shall be made to IHAs that HUD has determined to be administratively
capable under Sec. 950.135, and to PHAs under the CGP program that are
not designated as either troubled or mod troubled under the PHMAP at 24
CFR part 901, based upon the relative needs of these IHAs and PHAs, as
determined under the formula at Sec. 950.604.
(h) Right to appeal. Before withholding some or all of the IHA's
annual grant, declaring a breach of the ACC grant amendment, or
reallocating funds that have been withheld, HUD will notify the IHA and
give it an opportunity, within a prescribed period of time, to present
to ONAP Headquarters, in writing, any arguments or additional facts and
data concerning the proposed action.
(i) Notification of residents. The IHA's Board of Commissioners
shall notify affected residents of HUD's final determination to
withhold funds, declare a breach of the ACC grant amendment, or
reallocate funds, as well as the basis for, and the consequences
resulting from, such a determination.
(j) Recapture. In addition, HUD may recapture for good cause any
grant amounts previously provided to an IHA, based upon a determination
that the IHA has failed to comply with the requirements of the CGP
program. Before recapturing any grant amounts, HUD will notify the IHA
and give it an opportunity to appeal in accordance with paragraph (h)
of this section. Any reallocation of recaptured amounts will be in
accordance with paragraph (g) of this section. The IHA's board of
Commissioners shall notify affected residents of HUD's final
determination to recapture any funds.
PART 965--PHA-OWNED OR LEASED PROJECTS--GENERAL PROVISIONS
8. The heading for part 965 is revised to read as set forth above.
9. The authority citation for part 965 continues to read as
follows:
Authority: 42 U.S.C. 1437, 1437a, 1437d, 1437g, and 3535(d).
Subpart H is also issued under 42 U.S.C. 4821-4846.
Subpart A--Preemption of State Prevailing Wage Requirements
10. The heading of subpart A is revised as set forth above.
Sec. 965.101 [Amended]
11. Section 965.101 is amended by:
a. Removing from the section heading the words, ``With Respect to
Maintenance and Operation of Projects'';
b. Removing the parenthetical phrase ``(including modernization)''
from the introductory text of paragraph (a); and
c. Removing the words, ``maintenance and operation'' wherever they
appear in paragraphs (a) introductory text, (a)(2), (b)(1) introductory
text, (b)(2), and (b)(3), and adding in their place, the words,
``development, maintenance, and modernization''.
PART 968--PUBLIC HOUSING MODERNIZATION
12. The authority citation for 24 CFR part 968 continues to read as
follows:
[[Page 8737]]
Authority: 42 U.S.C. 1437d, 1437l, and 3535(d).
Subpart A--General
13. Section 968.101 is amended by revising paragraph (a); removing
the second sentence of paragraph (b)(2); revising paragraphs (b)(1),
(b)(5), and (c); and adding a new paragraph (d), to read as follows:
Sec. 968.101 Purpose and applicability.
(a) Purpose. The purpose of this part is to set forth the policies
and procedures for the Modernization program authorizing HUD to provide
financial assistance to Public Housing Agencies (PHAs).
(b) Applicability. (1) Subpart A of this part applies to all
modernization under this part. Subpart B of this part sets forth the
requirements and procedures for the Comprehensive Improvement
Assistance Program (CIAP) for PHAs that own or operate fewer than 250
public housing units. Subpart C of this part sets forth the
requirements and procedures for the Comprehensive Grant Program (CGP)
for PHAs that own or operate 250 or more units. A PHA that qualifies
for participation in the CGP is not eligible to participate in the
CIAP. A PHA that has already qualified to participate in the CGP may
elect to continue to participate in the CGP so long as it owns or
operates at least 200 units.
* * * * *
(5) A development/building/unit which is assisted under section
5(j)(2) of the Act (Major Reconstruction of Obsolete Projects) (MROP)
is eligible for section 14 funding (CIAP or CGP) where it received MROP
funding after FFY 1988 and has reached Date of Full Availability (DOFA)
or where it received MROP funding during FFYs 1986-1988 and all MROP
funds have been expended.
(c) Transition. Any amount that HUD has approved for a PHA must be
used for the purposes for which the funding was provided, or:
(1) For a CGP PHA, for purposes consistent with an approved Annual
Statement or Five-Year Action Plan submitted by the PHA, as the PHA
determines to be appropriate; or
(2) For a CIAP PHA, in accordance with a revised CIAP budget.
(d) Approved information collections. The following sections of
this subpart have been approved by the Office of Management and Budget
in accordance with the Paperwork Reduction Act of 1995 and assigned OMB
approval number 2577-0044: Secs. 968.135, 968.145, 968.210, 968.215,
968.225, and 968.230. The following sections of this subpart have been
similarly approved and assigned approval number 2577.0157:
Secs. 968.310, 968.315, 968.325, and 968.330.
Sec. 968.102 [Amended]
14. Section 968.102 is amended by removing the reference to
``Sec. 968.310(d)'' in paragraph (b) and adding in its place a
reference to ``Sec. 968.112(d)''.
15. Section 968.103 is amended by revising paragraphs (a), (b),
(c), (e)(1) (i) and (ii) introductory text, (f)(1), (f)(2) introductory
text, (f)(2)(i), (f)(2)(ii) (f), (g), and (h), and the heading to
paragraph (e)(4), to read as follows:
Sec. 968.103 Allocation of funds under section 14.
(a) General. This section describes the process for allocating
modernization funds to the aggregate of PHAs and IHAs participating in
the CIAP and to individual PHAs and IHAs participating in the CGP.
(b) Set-aside for emergencies and disasters. For each FFY, HUD
shall reserve from amounts approved in the appropriation act for grants
under this part and part 950 of this title, an amount not to exceed $75
million (which shall include unused reserve amounts carried over from
previous FFYs), which shall be made available to PHAs and IHAs for
modernization needs resulting from natural and other disasters, and
from emergencies. HUD shall replenish this reserve at the beginning of
each FFY. Any unused funds from previous years may remain in the
reserve until allocated. The requirements governing the reserve for
disasters and emergencies and the procedures by which a PHA may request
such funds, are set forth in Sec. 968.104.
(c) Set-aside for credits for mod troubled PHAs under subpart C of
this part. After deducting an amount for the reserve for natural and
other disasters and for emergencies under paragraph (b) of this
section, HUD shall set aside from the funds remaining no more than five
percent for the purpose of providing credits to PHAs that were formerly
designated as mod troubled agencies under the Public Housing Management
Assessment Program (PHMAP) (see 24 CFR part 901). The purpose of this
set-aside is to compensate these PHAs for amounts previously withheld
by HUD because of a PHA's prior designation as a mod troubled agency.
Since part 901 of this chapter does not apply to IHAs, they are not
classified as ``mod troubled'' and they do not participate in the set-
aside credits established under paragraph (c) of this section.
* * * * *
(e) * * *
(1) * * *
(i) Statistically reliable data are available. Where HUD determines
that the data concerning the categories of backlog need identified
under paragraph (e)(4) of this section are statistically reliable for
individual IHAs and PHAs with 250 or more units, or for the aggregate
of IHAs and PHAs with fewer than 250 units, which are not participating
in the formula funding portion of the modernization program, it will
base its allocation on direct estimates of the statutory categories of
backlog need, based on the most recently available, statistically
reliable data;
(ii) Statistically reliable data are unavailable. Where HUD
determines that statistically reliable data concerning the categories
of backlog need identified under paragraph (e)(4) of this section are
not available for individual PHAs and IHAs with 250 or more units, it
will base its allocation of funds under this section on estimates of
the categories of backlog need using:
* * * * *
(4) Categories of backlog need. * * *
(f) * * *
(1) Statistically reliable data are available. Where HUD determines
that statistically reliable data are available concerning the
categories of need identified under paragraph (f)(3) of this section
for individual PHAs and IHAs with 250 or more units, and for the
aggregate of PHAs and IHAs with fewer than 250 units, it shall base its
allocation of assistance under this section on the needs that are
estimated to have accrued since the date of the last objective
measurement of backlog needs under paragraph (e)(1)(i) of this section;
(2) Statistically reliable data are unavailable. Where HUD
determines that statistically reliable data concerning the categories
of need identified under paragraph (f)(3) of this section are not
available for individual PHAs and IHAs with 250 or more units, it shall
base its allocation of assistance under this section on estimates of
accrued need using:
(i) The most recently available data on the categories of accrual
need under paragraph (f)(3) of this section;
(ii) * * *
(F) The total number of units of each PHA or IHA that owns or
operates 250 or more units. (weighted at .0144);
* * * * *
(g) Allocation of CIAP. The formula amount determined under
paragraphs
[[Page 8738]]
(e) and (f) of this section for PHAs and IHAs with fewer than 250 units
shall be allocated to PHAs in accordance with the requirements of
subpart B of this part (the CIAP), and to IHAs in accordance with the
requirements of 24 CFR part 950, subpart I.
(h) Allocation for CGP. The formula amount determined under
paragraphs (e) and (f) of this section for PHAs with 250 or more units
shall be allocated in accordance with the requirements of subpart C of
this part (the CGP), and for IHAs in accordance with the requirements
of 24 CFR part 950, subpart I. A PHA that is eligible to receive a
grant under the CGP may appeal the amount of its formula allocation in
accordance with the requirements set forth in Sec. 968.310(b). A PHA
that is eligible to receive modernization funds under the CGP because
it owns or operates 250 or more units is disqualified from receiving
assistance under the CIAP under this part.
* * * * *
16. Section 968.105 is amended by adding in alphabetical order new
definitions for ``CGP'', ``modernization program'', ``modernization
project'', and ``reasonable cost''; by revising the definition ``Force
account labor''; removing the definition for ``CIAP program''; and
adding a definition for ``CIAP'' to read as follows:
Sec. 968.105 Definitions.
* * * * *
CGP. The Comprehensive Grant Program, which provides modernization
funds on a formula basis to PHAs with 250 or more public housing units.
CIAP. The Comprehensive Improvement Assistance Program, which
provides modernization funds on a competitive basis to PHAs with fewer
than 250 public housing units.
* * * * *
Force account labor. Labor employed directly by the PHA on either a
permanent or a temporary basis. See Sec. 968.120.
* * * * *
Modernization program. A PHA's program for carrying out
modernization, as set forth in the approved CIAP budget or CGP Annual
Statement.
Modernization project. The improvement of one or more existing
public housing developments under a unique number designated for that
modernization program. For each modernization project, HUD and the PHA
shall enter into an ACC amendment, requiring low-income use of the
housing for not less than 20 years from the date of the ACC amendment
(subject to sale of homeownership units in accordance with the terms of
the ACC). The terms ``modernization project number'' and
``comprehensive grant number'' are used interchangeably.
* * * * *
Reasonable cost. Total unfunded hard cost needs for a development
that do not exceed 90 percent of the computed Total Development Cost
(TDC) for a new development with the same structure type and number and
size of units in the market area.
* * * * *
Sec. 968.312 [Redesignated as Sec. 968.104]
17. Section 968.312 is redesignated as Sec. 968.104; and newly
redesignated Sec. 968.104 is amended by:
a. Removing from paragraph (a)(1) the phrase ``under
Sec. 968.310(a)(3)'';
b. Removing references to ``PHAs participating in CGP'' and ``PHAs
participating in CIAP'' in paragraphs (a) (1) and (a)(3), and adding in
their place references to ``CGP PHAs'' and ``CIAP PHAs'', respectively;
c. Removing references to ``PHA participating in CGP'' and ``PHA
participating in CIAP'' in paragraph (a)(1), and adding in their place
references to ``CGP PHA'' and ``CIAP PHA'', respectively;
d. Adding a sentence at the end of paragraph (a)(3);
e. Removing from paragraphs (a)(1) and (b)(1) the two references to
``Sec. 968.320'' and adding in their place references to
``Sec. 968.315'';
f. Amending paragraph (b)(1) in the fourth sentence, by adding
after the words ``insurance coverage'' and before the period, the words
``or other Federal assistance''; and in the fifth sentence, by adding
before the word ``PHA'', the word ``CGP''; and
g. Amending paragraph (b)(3) by removing the phrase, ``shall be in
the form of a grant, and''; to read as follows:
Sec. 968.104 Reserve for emergencies and disasters.
* * * * *
(a) * * *
(3) * * * A CIAP PHA is not required to repay assistance for its
emergency needs from the reserve.
* * * * *
Sec. 968.108 [Amended]
18. Section 968.108 is amended by removing paragraph (f)(2) and
redesignating paragraph (f)(3) as paragraph (f)(2).
Sec. 968.110 [Amended]
19. Section 968.110 is amended by removing and reserving paragraphs
(i), (j), and (l), by removing from paragraph (e)(3) the words ``or
tribal'', and by removing from paragraph (e)(3) the reference to
``Sec. 968.120'' and adding in its place a reference to ``Sec. 965.101
of this chapter''.
20. A new Sec. 968.112 is added, to read as follows:
Sec. 968.112 Eligible costs.
(a) General. A PHA may use financial assistance received under this
part for the following eligible costs:
(1) For a CGP PHA, the eligible costs are:
(i) Undertaking activities described in its approved Annual
Statement under Sec. 968.325 and approved Five-Year Action Plan under
Sec. 968.315(e)(5);
(ii) Carrying out emergency work, whether or not the need is
indicated in the PHA's approved Comprehensive Plan, including Five-Year
Action Plan, or Annual Statement;
(iii) Funding a replacement reserve to carry out eligible
activities in future years, subject to the restrictions set forth in
paragraph (f) of this section;
(iv) Preparing the Comprehensive Plan and Five-Year Action Plan
under Sec. 968.315 and the Annual Submission under Sec. 968.325,
including reasonable costs necessary to assist residents to participate
in a meaningful way in the planning, implementation and monitoring
process; and
(v) Carrying out an audit, in accordance with 24 CFR part 44.
(2) For a CIAP PHA, the eligible costs are activities approved by
HUD and included in an approved CIAP budget.
(b) Demonstration of viability. Except in the case of emergency
work, a PHA shall only expend funds on a development for which the PHA
has determined, and HUD agrees, that the completion of the improvements
and replacements (for CGP PHAs, as identified in the Comprehensive
Plan) will reasonably ensure the long-term physical and social
viability of the development at a reasonable cost (as defined in
Sec. 968.105), or for essential non-routine maintenance needed to keep
the property habitable until the demolition or disposition application
is approved and residents are relocated.
(c) Physical improvements. Eligible costs include alterations,
betterments, additions, replacements, and non-routine maintenance that
are necessary to meet the modernization and energy conservation
standards prescribed in Sec. 968.115. These mandatory standards may be
exceeded when a PHA (and HUD in the case of CIAP PHAs) determines that
it is necessary or highly desirable for the long-term physical and
social viability of the individual development. Development specific
[[Page 8739]]
work includes work items that are modest in design and cost, but still
blend in with the design and architecture of the surrounding community
by including amenities, quality materials and design and landscaping
features that are customary for the locality and culture. The Field
Office has the authority to approve nondwelling space where such space
is needed to administer, and is of direct benefit to, the public
housing program. If demolition or disposition is proposed, a PHA shall
comply with 24 CFR part 970. Additional dwelling space may be added to
existing units.
(d) Turnkey III developments. (1) General. Eligible physical
improvement costs for existing Turnkey III developments are limited to
work items that are not the responsibility of the homebuyer families
and that are related to health and safety, correction of development
deficiencies, physical accessibility, energy audits and cost-effective
energy conservation measures, or LBP testing, interim containment,
professional risk assessment and abatement. In addition, management
improvements are eligible costs.
(2) Ineligible costs. Routine maintenance or replacements, and
items that are the responsibility of the homebuyer families are
ineligible costs.
(3) Exception for vacant or non-homebuyer-occupied Turnkey III
units.
(i) Notwithstanding the requirements of paragraph (d)(1) of this
section, a PHA may substantially rehabilitate a Turnkey III unit
whenever the unit becomes vacant or is occupied by a non-homebuyer
family in order to return the unit to the inventory or make the unit
suitable for homeownership purposes. A PHA that intends to use funds
under this paragraph must identify in its CIAP application or CGP
annual submission the estimated number of units proposed for
substantial rehabilitation and subsequent sale. In addition, a PHA must
demonstrate, for each of the Turnkey III units proposed to be
substantially rehabilitated, that it has homebuyers who both are
eligible for homeownership, in accordance with the requirements of 24
CFR part 904, and have demonstrated their intent to be placed into the
unit.
(ii) Before a PHA may be approved for substantial rehabilitation of
a unit under this paragraph, it must first deplete any Earned Home
Payments Account (EHPA) or Non-Routine Maintenance Reserve (NRMR)
pertaining to the unit, and request the maximum amount of operating
subsidy. Any increase in the value of a unit caused by its substantial
rehabilitation under this paragraph shall be reflected solely by its
subsequent appraised value, and by an automatic increase in its selling
price.
(e) Demolition and conversion costs. Eligible costs include:
(1) Demolition of dwelling units or non-dwelling facilities, where
the demolition is approved by HUD under 24 CFR part 970, and related
costs, such as clearing and grading the site after demolition and
subsequent site improvement to benefit the remaining portion of the
existing development; and
(2) Conversion of existing dwelling units to different bedroom
sizes or to non-dwelling use.
(f) Replacement reserve costs (for CGP only). (1) Funding a
replacement reserve to carry out eligible activities in future years is
an eligible cost, subject to the following restrictions:
(i) Annual CGP funds are not needed for existing needs, as
identified by the PHA in its needs assessments; or
(ii) A physical improvement requires more funds than the PHA would
receive under its annual formula allocation; or
(iii) A management improvement requires more funds than the PHA may
use under its 20% limit for management improvements (except as provided
in paragraph (n)(2)(i) of this section), and the PHA needs to save a
portion of its annual grant, in order to combine it with a portion of
subsequent year(s) grants to fund the work item.
(2) The PHA shall invest replacement reserve funds so as to
generate a return equal to or greater than the average 91-day Treasury
bill rate.
(3) Interest earned on funds in the replacement reserve will not be
added to the PHA's income in the determination of a PHA's operating
subsidy eligibility, but must be used for eligible modernization costs.
(4) To the extent that its annual formula allocation and any
unobligated balances of modernization funds are not adequate to meet
emergency needs, a PHA must first use its replacement reserve, where
funded, to meet emergency needs, before requesting funds from the
reserve under Sec. 968.104.
(5) A PHA is not required to use its replacement reserve for costs
related to natural and other disasters.
(g) Management improvement costs. (1) General. Management
improvements that are development-specific or PHA-wide in nature are
eligible costs where needed to upgrade the operation of the PHA's
developments, sustain physical improvements at those developments or
correct management deficiencies. A PHA's ongoing operating expenses are
ineligible management improvement costs. For CIAP PHAs, management
improvements may be funded as a single work item.
(2) Eligible costs. Eligible costs include:
(i) General management improvement costs. Eligible costs include
general management improvement costs, such as: management, financial,
and accounting control systems of the PHA; adequacy and qualifications
of PHA personnel, including training; resident programs and services
through the coordination of the provision of social services from
tribal or local government or other public and private entities;
resident and development security; resident selection and eviction;
occupancy; rent collection; maintenance; and equal opportunity.
(ii) Economic development costs. Eligible costs include job
training for residents and resident business development activities,
for the purpose of carrying out activities related to the
modernization-funded management and physical improvements. HUD
encourages PHAs, to the greatest extent feasible, to hire residents as
trainees, apprentices, or employees to carry out the modernization
program under this part, and to contract with resident-owned businesses
for modernization work.
(iii) Resident management costs. Eligible costs include technical
assistance to a resident council or resident management corporation
(RMC), as defined in part 964, in order to: determine the feasibility
of resident management to carry out management functions for a specific
development or developments; train residents in skills directly related
to the operations and management of the development(s) for potential
employment by the RMC; train RMC board members in community
organization, board development, and leadership; and assist in the
formation of an RMC.
(iv) Resident homeownership costs. Eligible costs are limited to
the study of the feasibility of converting rental to homeownership
units and the preparation of an application for conversion to
homeownership or sale of units.
(v) Preventive maintenance system. Eligible costs include the
establishment of a preventive maintenance system or improvement of an
existing system. A preventive maintenance system must provide for
regular inspections of building structures, systems and units and
distinguish between work eligible for operating funds (routine
maintenance) and work eligible for modernization funding (non-routine
maintenance).
[[Page 8740]]
(h) Drug elimination costs. Eligible costs include drug elimination
activities involving management or physical improvements, as specified
by HUD.
(i) LBP costs. Eligible costs include professional risk assessments
and interim containment of family developments/buildings constructed
before 1980, testing and abatement of family developments/buildings
constructed before 1978, and costs for insurance coverage for pollution
hazards associated with the testing, abatement, clean-up and disposal
of LBP on applicable surfaces of family developments/buildings
constructed before 1978.
(j) Administrative costs. Administrative costs necessary for the
planning, design, implementation and monitoring of the physical and
management improvements are eligible costs and include the following:
(1) Salaries. The salaries of non-technical and technical PHA
personnel assigned full-time or part-time to modernization are eligible
costs only where the scope and volume of the work are beyond that which
could be reasonably expected to be accomplished by such personnel in
the performance of their non-modernization duties. A PHA shall properly
apportion to the appropriate program budget any direct charges for the
salaries of assigned full- or part-time staff (e.g., to the CIAP, CGP
or operating budget);
(2) Employee benefit contributions. PHA contributions to employee
benefit plans on behalf of non-technical and technical PHA personnel
are eligible costs in direct proportion to the amount of salary charged
to the CIAP or CGP, as appropriate;
(3) Preparation of CIAP or CGP required documents;
(4) Resident participation. Eligible costs include those associated
with ensuring the meaningful participation of residents in the
development of the CIAP Application or the CGP Annual Submission and
Comprehensive Plan and the implementation and monitoring of the
approved modernization program; and
(5) Other administrative costs, such as telephone and facsimile, as
specified by HUD.
(k) Audit costs (CGP only). Eligible costs are limited to the
portion of the audit costs that are attributable to the modernization
program.
(l) Architectural/engineering and consultant fees. Eligible costs
include fees for planning, identification of needs, detailed design
work, preparation of construction and bid documents and other required
documents, LBP professional risk assessments and testing, and
inspection of work in progress.
(m) Relocation costs. Eligible costs include relocation and other
assistance for permanent and temporary relocation, as a direct result
of rehabilitation, demolition or acquisition for a modernization-funded
activity, where this assistance is required by 49 CFR part 24 or
Sec. 968.108.
(n) Cost limitations. (1) CIAP costs. (i) Management improvement
costs. Management improvement costs shall not exceed a percentage of
the CIAP funds available to a Field Office in a particular FFY, as
specified by HUD.
(ii) Planning costs. Planning costs are costs incurred before HUD
approval of the CIAP application and which are related to developing
the CIAP application or carrying out eligible modernization planning,
such as detailed design work, preparation of solicitations, and LBP
professional risk assessment and testing. Planning costs may be funded
as a single work item. If a PHA incurs planning costs without prior HUD
approval, a PHA does so with the full understanding that the costs may
not be reimbursed upon approval of the CIAP application. Planning costs
shall not exceed 5 percent of the CIAP funds available to a Field
Office in a particular FFY.
(2) CGP costs. (i) Management improvement costs. Notwithstanding
the full fungibility of work items, a PHA shall not use more than a
total of 20 percent of its annual grant for management improvement
costs in account 1408, unless specifically approved by HUD or the PHA
has been designated as both an over-all high performer and mod-high
performer under the PHMAP.
(ii) Administrative costs. Notwithstanding the full fungibility of
work items, a PHA shall not use more than a total of 10 percent of its
annual grant on administrative costs in account 1410, excluding any
costs related to lead-based paint or asbestos testing (whether
conducted by force account employees or by a contractor), in-house
architectural/engineering (A/E) work, or other special administrative
costs required by State or local law, unless specifically approved by
HUD.
(3) Program benefit. Where the physical or management improvement,
including administrative cost, will benefit programs other than Public
Housing, such as Section 8 or local revitalization programs, eligible
costs are limited to the amount directly attributable to the public
housing program.
(4) No duplication. Any eligible cost for an activity funded by
CIAP or CGP shall not also be funded by any other HUD program.
(o) Ineligible costs. Ineligible costs include:
(1) Luxury improvements;
(2) Indirect administrative costs (overhead), as defined in OMB
Circular A-87;
(3) Public housing operating assistance;
(4) Direct provision of social services, through either force
account or contract labor, from FFY 1996 and future FFYs funds, unless
otherwise provided by law; and
(5) Other ineligible activities, as specified by HUD.
(p) Expanded eligibility for FFY 1995 and prior year modernization
funds. The FFY 1995 Rescissions Act expanded the eligible activities
that may be funded with CIAP or CGP assistance provided from FFY 1995
and prior FFY funds. Such activities include, but are not limited to:
(1) New construction or acquisition of additional public housing
units, including replacement units;
(2) Modernization activities related to the public housing portion
of housing developments held in partnership, or cooperation with non-
public housing entities; and
(3) Other activities related to public housing, including
activities eligible under the Urban Revitalization Demonstration (HOPE
VI).
21. Section 968.115 is revised to read as follows:
Sec. 968.115 Modernization and energy conservation standards.
All improvements funded under this part shall:
(a) Meet the modernization standards as prescribed by HUD;
(b) Incorporate cost-effective energy conservation measures,
identified in the PHA's most recently updated energy audit, conducted
pursuant to part 965, subpart C;
(c) Where changing or installing a new utility system, conduct a
life-cycle cost analysis, reflecting installation and operating costs;
and
(d) Provide decent, safe, and sanitary living conditions in PHA-
owned and PHA-operated public housing.
22. Section 968.120 is revised to read as follows:
Sec. 968.120 Force account.
(a) For both CIAP and CGP, a PHA may undertake the activities using
force account labor, only where specifically approved by HUD in the
CIAP budget or CGP Annual Statement, except no prior HUD approval is
required where the PHA is designated as both an overall
[[Page 8741]]
high performer and Modernization high performer under the PHMAP.
(b) If the entirety of modernization activity (including the
planning and architectural design of the rehabilitation) is
administered by the RMC, the PHA shall not retain for any
administrative or other reason, any portion of the modernization funds
provided, unless the PHA and the RMC provide otherwise by contract.
23. New Secs. 968.125, 968.130, and 968.135 are added, to read as
follows:
Sec. 968.125 Initiation of modernization activities.
After HUD has approved the modernization program and entered into
an ACC amendment with the PHA, a PHA shall undertake the modernization
activities and expenditures set forth in its approved CIAP budget or
CGP Annual Statement/Five-Year Action Plan in a timely, efficient and
economical manner. All approved funding must be obligated within two
years of approval and expended within three years of approval unless
HUD approves a longer time period in the PHA's implementation schedule,
as set forth in the CIAP budget or CGP Annual Statement. HUD may
approve a longer time period for such reasons as the large size of the
grant or the complexity of the work.
Sec. 968.130 Fund requisitions.
To draw down modernization funds against the approved CIAP budget
or CGP Annual Statement, a PHA shall comply with requirements
prescribed by HUD.
Sec. 968.135 Contracting requirements.
In addition to the requirements specified in 24 CFR parts 5, 85,
and 965, subpart A, and Sec. 968.110(e), the following provisions
apply:
(a) Architect/engineer and other professional services contracts.
For CIAP only and notwithstanding 24 CFR 85.36(g), a PHA shall comply
with the following HUD requirements:
(1) Where the proposed contract amount exceeds the HUD-established
threshold, submit the contract for prior HUD approval before execution
or issuance; or
(2) Where the proposed contract amount does not exceed the HUD-
established threshold, certify that the scope of work is consistent
with the originally approved modernization program, and that the amount
is appropriate and does not result in the total HUD-approved CIAP
budget being exceeded.
(b) Assurance of completion. For both CIAP and CGP and
notwithstanding 24 CFR 85.36(h), for each construction contract over
$100,000, the contractor shall furnish a bid guarantee from each bidder
equivalent to 5% of the bid price; and one of the following:
(1) A performance and payment bond for 100 percent of the contract
price; or
(2) Separate performance and payment bonds, each for 50% or more of
the contract price; or
(3) A 20% cash escrow; or
(4) a 25% irrevocable letter of credit.
(c) Construction solicitations. For CIAP only and notwithstanding
24 CFR 85.36(g), a PHA shall comply with HUD requirements to either:
(1) Where the estimated contract amount exceeds the HUD-established
threshold, submit a complete construction solicitation for prior HUD
approval before issuance; or
(2) Where the estimated contract amount does not exceed the HUD-
established threshold, certify receipt of the required architect's/
engineer's certification that the construction documents accurately
reflect HUD-approved work and meet the modernization and energy
conservation standards and that the construction solicitation is
complete and includes all mandatory items.
(d) Contract awards. (1) For CIAP only, a PHA shall obtain HUD
approval of the proposed award of a contract if the contract work is
inconsistent with the originally approved modernization program or the
procurement meets the criteria set forth in 24 CFR 85.36(g)(2)(i)
through (iv). In all other instances, a PHA shall make the award
without HUD approval after the PHA has certified that:
(i) The solicitation and award procedures were conducted in
compliance with State or local laws and Federal requirements;
(ii) The award does not meet the criteria in 24 CFR 85.36(g)(2)(i)
through (iv) for prior HUD approval; and
(iii) The contractor is not on the Lists of Parties Excluded from
Federal Procurement or Nonprocurement Programs;
(2) For CGP only, a PHA shall obtain HUD approval of the proposed
award of a contract if the procurement meets the criteria set forth in
24 CFR 85.36(g)(2)(i) through (iv).
(e) Contract modifications. For CIAP only and notwithstanding 24
CFR 85.36(g), except in an emergency endangering life or property, a
PHA shall comply with HUD requirements to either:
(1) Where the proposed contract modification exceeds the HUD-
established threshold, submit the proposed modification for prior HUD
approval before issuance; or
(2) Where the proposed contract modification does not exceed the
HUD-established threshold, certify that the proposed modification is
within the scope of the contract and that any additional costs are
within the total HUD-approved CIAP budget amount.
(f) Construction requirements. Where indicated by poor performance,
a PHA may be required to submit to HUD periodic progress reports and,
for prior HUD approval, construction completion documents above a HUD-
specified amount. For CGP only, a PHA is notified of additional
construction requirements by a notice of deficiency or a corrective
action order.
(g) Reward for high performers. For CIAP only, if a PHA is both an
overall high performer and a modernization high performer under the
Public Housing Management Assessment Program (PHMAP), HUD will not
establish thresholds, and the PHA is not required to obtain prior HUD
approval, under paragraphs (a), (c), and (e) of this section.
Sec. 968.240 [Redesignated as Sec. 968.140]
24. Section 968.240 is redesignated as Sec. 968.140.
25. A new Sec. 968.145 is added to subpart A, to read as follows:
Sec. 968.145 Fiscal closeout.
(a) Actual modernization cost certificate (AMCC). Upon expenditure
by the PHA of all funds, or termination by HUD of the activities funded
in a modernization program, a PHA shall submit the AMCC, in a form
prescribed by HUD, to HUD for review and approval for audit. After
audit verification, HUD shall approve the AMCC.
(b) Audit. The audit shall follow the guidelines prescribed in 24
CFR part 44, Non-Federal Government Audit Requirements. If the pre-
audit or post-audit AMCC indicates that there are excess funds, a PHA
shall immediately remit the excess funds as directed by HUD. If the
pre-audit or post-audit AMCC discloses unauthorized or ineligible
expenditures, a PHA shall immediately take such corrective actions as
HUD may direct.
26. Subpart B is revised to read as follows:
Subpart B--Comprehensive Improvement Assistance Program (For PHAs That
Own or Operate Fewer Than 250 Units)
968.205 Definitions.
968.210 Procedures for obtaining approval of a modernization
program.
968.215 Resident and homebuyer participation.
[[Page 8742]]
968.225 Budget revisions.
968.230 Progress reports.
968.235 Time extensions.
968.240 HUD review of PHA performance.
Subpart B--Comprehensive Improvement Assistance Program (For PHAs
That Own or Operate Fewer Than 250 Units)
Sec. 968.205 Definitions.
In addition to the definitions in Sec. 968.105, the following
definitions apply to this subpart:
Emergency Modernization (CIAP). A type of modernization program for
a development that is limited to physical work items of an emergency
nature that poses an immediate threat to the health or safety of
residents or is related to fire safety, and that must be corrected
within one year of CIAP funding approval.
Management capability. A PHA has management capability if it is:
(1) Not designated as Troubled under part 901 of this chapter,
Public Housing Management Assessment Program (PHMAP); or
(2) Designated as Troubled, but has a reasonable prospect of
acquiring management capability through CIAP-funded management
improvements and administrative support. A Troubled PHA is eligible for
Emergency Modernization only, unless it is making reasonable progress
toward meeting the performance targets established in its memorandum of
agreement or equivalent under Sec. 901.140 of this chapter or has
obtained alternative oversight of its management functions.
Modernization capability. A PHA has modernization capability if it
is:
(1) Not designated as Modernization Troubled under part 901 of this
chapter, PHMAP; or
(2) Designated as Modernization Troubled, but has a reasonable
prospect of acquiring modernization capability through CIAP-funded
management improvements and administrative support, such as hiring
staff or contracting for assistance. A Modernization Troubled PHA is
eligible for Emergency Modernization only, unless it is making
reasonable progress toward meeting the performance targets established
in its memorandum of agreement or equivalent under Sec. 901.140 of this
chapter or has obtained alternative oversight of its modernization
functions. Where a PHA does not have a funded modernization program in
progress, the Field Office shall determine whether the PHA has a
reasonable prospect of acquiring modernization capability through
hiring staff or contracting for assistance.
Other Modernization (modernization other than emergency). A type of
modernization program for a development that includes one or more
physical work items, where HUD determines that the physical
improvements are necessary and sufficient to extend substantially the
useful life of the development, and/or one or more development specific
or PHA-wide management work items (including planning costs), and/or
lead-based paint testing, professional risk assessments, interim
containment, and abatement.
Work item. Any separately identifiable unit of work constituting a
part of a modernization program.
Sec. 968.210 Procedures for obtaining approval of a modernization
program.
(a) HUD notification. After modernization funds for a particular
FFY become available, HUD shall publish in the Federal Register a
notice of funding availability (NOFA), the time frame for submission of
the CIAP Application, and other pertinent information.
(b) PHA consultation with local officials and residents/homebuyers.
A PHA shall develop the application in consultation with local
officials and residents/homebuyers, as set forth in Sec. 968.215.
(c) PHA application. A PHA shall submit to HUD an application, in a
form prescribed by HUD. Where a PHA has not included some of its
developm
FR Doc. 96-4814 Streamlining the Comprehensive Improvement Assistance Program and Comprehensive Grant Program
ents in the CIAP application, HUD may not consider funding any
non-emergency work at excluded developments or subsequently approve use
of leftover funds at excluded developments.
(d) Completeness Review. To be eligible for processing, an
application must be physically received by HUD by the time and date
specified in the NOFA. Immediately after the application deadline, HUD
shall perform a completeness review to determine whether the
application is complete, responsive to the NOFA, and acceptable for
technical processing.
(1) If the application form or any other essential document, as
specified in the NOFA, is missing, the PHA's application will be
considered substantially incomplete and, therefore, ineligible for
further processing. HUD shall immediately notify the PHA in writing.
(2) If other required documents, including certifications, as
specified in the NOFA, are missing or there is a technical mistake,
such as no signature on a submitted form, HUD shall immediately notify
the PHA in writing to submit or correct the deficiency within a
specified period of time from the date of HUD's written notification.
This is not additional time to substantially revise the application.
Deficiencies which may be corrected at this time are inadvertently
omitted documents or clarifications of previously submitted material
and other changes which are not of such a nature as to improve the
competitive position of the application.
(3) If a PHA fails to submit or correct the items within the
required time period, the PHA's application will be ineligible for
further processing. HUD shall immediately notify the PHA in writing
after this occurs.
(4) A PHA may submit an application for Emergency Modernization
whenever needed.
(e) Eligibility Review. (1) Eligibility for processing. To be
eligible for processing:
(i) Each eligible development for which work is proposed has
reached the Date of Full Availability (DOFA) and is under ACC at the
time of CIAP application submission; and
(ii) Where funded under Major Reconstruction of Obsolete Projects
(MROP) after FFY 1988, the development/building/unit has reached DOFA
or, where funded during FFYs 1986-1988, all MROP funds for the
development/building have been expended.
(2) Eligibility for processing on reduced scope. When the following
conditions exist, a PHA will be reviewed on a reduced scope:
(i) Section 504 compliance. Where a PHA has not completed all
required structural changes to meet the need for accessible units, as
identified in the PHA's Section 504 needs assessment, the PHA is
eligible for processing only for Emergency Modernization or physical
work needed to meet Section 504 requirements.
(ii) Lead-based paint (LBP) testing compliance. Where a PHA has not
complied with the statutory requirement to complete LBP testing on all
pre-1978 family units, the PHA is eligible for processing only for
Emergency Modernization or work needed to complete the testing.
(iii) Fair Housing and Equal Opportunity (FHEO) compliance. Where a
PHA has not complied with FHEO requirements set forth in Sec. 968.110,
as evidenced by an enforcement action, finding or determination, the
PHA is eligible for processing only for Emergency Modernization or for
work needed to remedy the civil rights deficiencies--unless the PHA is
implementing a voluntary compliance agreement or settlement agreement
designed to correct the area(s) of
[[Page 8743]]
noncompliance. The enforcement actions, findings, or determinations
that trigger limited eligibility are described in paragraphs
(e)(2)(iii) (A) through (E) of this section:
(A) A pending proceeding against the PHA based upon a charge of
discrimination issued under the Fair Housing Act. A charge of
discrimination is a charge under section 810(g)(2) of the Fair Housing
Act (42 U.S.C. 3610(g)(2)), issued by the Department's General Counsel
or legally authorized designee;
(B) A pending civil rights suit against the PHA, referred by the
Department's General Counsel and instituted by the Department of
Justice;
(C) Outstanding HUD findings of PHA noncompliance with civil rights
statutes and executive orders specified in 24 CFR part 5 and
Sec. 968.110 or implementing regulations, as a result of formal
administrative proceedings;
(D) A deferral of the processing of applications from the PHA
imposed by HUD under Title VI of the Civil Rights Act of 1964 (42
U.S.C. 2000d-1) and HUD implementing regulations (24 CFR 1.8), the
Attorney General's Guidelines (28 CFR 50.3), and procedures (HUD
Handbook 8040.1), or under Section 504 of the Rehabilitation Act of
1973 (29 U.S.C. 794) and HUD implementing regulations (24 CFR 8.57); or
(E) An adjudication of a violation under any of the civil rights
authorities specified in 24 CFR part 5 and Sec. 968.110 in a civil
action filed against the PHA by a private individual.
(f) Technical processing. After all CIAP applications are reviewed
for eligibility, HUD shall categorize the eligible PHAs and their
developments into two processing groups: Group 1 for Emergency
Modernization; and Group 2 for Other Modernization. PHA developments
may be included in both groups and the same development may be in each
group. However, a PHA is only required to submit one CIAP application.
Group 1 developments are not subject to the technical review rating and
ranking and the long-term viability and reasonable cost determination.
Group 2 developments are subject to the technical review rating and
ranking and the long-term viability and reasonable cost determination.
Preference will be given to PHAs which request assistance for
developments having conditions which threaten the health or safety of
the residents or having a significant number of vacant, substandard
units, and which have demonstrated a capability of carrying out the
proposed activities.
(g) Rating on technical review factors. After categorizing the
eligible PHAs/developments into Group 1 and Group 2, HUD shall review
and rate each Group 2 PHA on each of the following technical review
factors:
(1) Extent and urgency of need, including need to comply with
statutory, regulatory or court-ordered deadlines;
(2) Extent of vacancies, where the vacancies are not due to
insufficient demand;
(3) PHA's modernization capability;
(4) PHA's management capability;
(5) Degree of resident involvement in PHA operations;
(6) Degree of PHA activity in resident initiatives, including
resident management, economic development, and drug elimination
efforts;
(7) Degree of resident employment;
(8) Local government support for proposed modernization; and
(9) Such additional factors as the Secretary determines necessary
and appropriate.
(h) Ranking and selection for Joint Review. After rating all Group
2 PHAs/developments, HUD shall then rank each Group 2 PHA based on its
total score, list Group 2 PHAs in descending order, subject to
confirmation of need and cost at Joint Review, and identify for Joint
Review selection the highest PHA ranking applications in Group 2 and
other Group 2 PHAs with lower ranking applications, but with high
priority needs, which most reasonably approximate the amount of
modernization which can be funded. High priority needs are non-
emergency needs, but related to: health or safety; vacant, substandard
units; structural or system integrity; or compliance with statutory,
regulatory or court-ordered deadlines. All Group 1 applications are
automatically selected for Joint Review.
(i) Joint Review. The purpose of Joint Review is for HUD to discuss
with a PHA the proposed modernization program, as set forth in the CIAP
Application, review long-term viability and cost reasonableness
determinations, and determine the size of the grant, if any, to be
awarded. HUD shall notify each PHA whose application has been selected
for further processing as to whether Joint Review will be conducted on-
site or off-site (e.g., by telephone or in-office meeting). A PHA shall
prepare for Joint Review by preparing a draft CIAP budget and reviewing
the other items to be covered during Joint Review, as prescribed by
HUD. If conducted on-site, Joint Review may include an inspection of
the proposed physical work. PHAs not selected for Joint Review will be
advised in writing of the reasons for non-selection.
(j) Funding decisions. After all Joint Reviews are completed, HUD
shall adjust the PHAs, developments, and work items to be funded and
the amounts to be awarded, on the basis of information obtained from
Joint Reviews, environmental reviews, and FHEO review, and make the
funding decisions. A PHA will not be selected for CIAP funding if there
is a duplication of funding. HUD shall select all bona fide emergencies
in Group 1 before funding Group 2 applications. After funding
announcement, HUD shall request a funded PHA to submit a CIAP budget,
including an implementation schedule, and any other required documents,
including the ACC amendment. PHAs not selected for funding will be
advised in writing of the reasons for non-selection.
(k) ACC amendment. After HUD approval of the CIAP budget, HUD and
the PHA shall enter into an ACC amendment in order for the PHA to draw
down modernization funds. The ACC amendment shall require low-income
use of the housing for not less than 20 years from the date of the ACC
amendment (subject to sale of homeownership units in accordance with
the terms of the ACC). The PHA Executive Director, where authorized by
the Board of Commissioners and permitted by State law, may sign the ACC
amendment on behalf of the PHA. HUD has the authority to condition an
ACC amendment (e.g., to require a PHA to hire a modernization
coordinator or contract administrator to administer its modernization
program).
(l) Declaration of trust. As HUD may require, the PHA shall execute
and file for record a Declaration of Trust, as provided under the ACC,
to protect the rights and interests of HUD throughout the 20-year
period during which the PHA is obligated to operate its developments in
accordance with the ACC, the Act, and HUD regulations and requirements.
Sec. 968.215 Resident and homebuyer participation.
A PHA shall establish a Partnership Process, as defined in
Sec. 968.105, to develop, implement and monitor the CIAP. Before
submission of the CIAP application, a PHA shall consult with the
residents, the resident organization, or the resident management
corporation (see part 964, subpart C of this chapter) (herein referred
to as the resident) of the development(s) being proposed for
modernization, regarding its intent to submit an application and to
solicit resident comments. A PHA shall give residents a reasonable
opportunity to present their views on the proposed modernization and
alternatives to it and shall give full and serious consideration
[[Page 8744]]
to resident recommendations. A PHA shall respond in writing to the
residents, indicating its acceptance or rejection of resident
recommendations, consistent with HUD requirements and the PHA's own
determination of efficiency, economy, and need. After HUD approval of
the modernization program, a PHA shall inform the residents of the
approved work items and its progress during implementation. Where HUD
does not approve the modernization program, a PHA shall so inform the
residents.
Sec. 968.225 Budget revisions.
(a) A PHA shall not incur any modernization cost in excess of the
total HUD-approved CIAP budget. A PHA shall submit a budget revision,
in a form prescribed by HUD, if the PHA plans to deviate from the
originally approved modernization program, as it was competitively
funded, by deleting or substantially revising approved work items or
adding new work items that are unrelated to the originally approved
modernization program, or to change the method of accomplishment from
contract to force account labor, except as provided in paragraph (b)(4)
of this section.
(b) In addition to the requirements of paragraph (a) of this
section, a PHA shall comply with the following requirements:
(1) A PHA is not required to obtain prior HUD approval if, in order
to complete the originally approved modernization program, the PHA
needs to delete or revise approved work items or add new related work
items consistent with the original modernization program. In such case,
a PHA shall certify that the revisions are necessary to carry out the
approved work and do not result in substantial changes to the
competitively funded modernization program.
(2) A PHA shall not incur any modernization cost on behalf of any
development that is not covered by the original CIAP application.
(3) Where there are funds leftover after completion of the
originally approved modernization program, a PHA may, without prior HUD
approval, use the remaining funds to carry out eligible modernization
activities at developments covered by the original CIAP application.
(4) If a PHA is both an overall high performer and a modernization
high performer under the Public Housing Management Assessment Program
(PHMAP), the PHA is not required to obtain prior HUD approval to change
the method of accomplishment from contract to force account labor.
Sec. 968.230 Progress reports.
For each six-month period ending March 31 and September 30, until
completion of the modernization program or expenditure of all funds, a
PHA shall submit to HUD a progress report, in a form prescribed by HUD.
Where HUD determines that a PHA is having implementation problems, HUD
may require more frequent reporting.
Sec. 968.235 Time extensions.
A PHA shall not obligate or expend funds after the obligation or
expenditure deadline date approved by HUD in the original
implementation schedule without a time extension, as follows:
(a) Certification. A PHA may extend an obligation or expenditure
deadline date no later than 30 calendar days after the existing
deadline date, without prior HUD approval, for a period commensurate
with the delay, where the PHA certifies that the delay is due to
reasons outside of the PHA's control, such as:
(1) Need to use leftover funds from a completed modernization
program for additional work;
(2) Unforeseen delays in contracting or contract administration;
(3) Litigation; and
(4) Delay by HUD or other institutions. Delay by the PHA's staff or
Board of Commissioners or a change in the Executive Director is not
considered to be outside of the PHA's control.
(b) Prior HUD approval. Where a PHA is unable to meet an obligation
or expenditure deadline date and the delay is due to reasons within the
PHA's control, the PHA may request HUD approval of a time extension no
later than 30 calendar days after the deadline date, to avoid recapture
of funds. The request shall include an explanation of the delay, steps
take to prevent future delay, and the requested extension.
Sec. 968.240 HUD review of PHA performance.
HUD shall periodically review PHA performance in carrying out its
approved modernization program to determine compliance with HUD
requirements, the adequacy of a PHA's inspections as evidenced by the
quality of work, and the timeliness of the work. HUD's review may be
conducted either in-office or on-site. Where conducted in-office, a PHA
shall forward any requested documents to HUD for post-review. Where
deficiencies are noted, a PHA shall take such corrective actions as HUD
may direct.
27. The heading for subpart C is revised to read as follows:
Subpart C--Comprehensive Grant Program (for PHAs That Own or
Operate 250 or More Public Housing Units)
Sec. 968.301 [Removed]
28. Section 968.301 is removed.
Sec. 968.305 [Amended]
29. Section 968.305 is amended by:
a. Removing the definition for ``comprehensive grant number''; and
b. Removing references to ``Sec. 968.310(a)(3)'',
``968.320(d)(5)'', and ``968.320(d)'', wherever they appear, and adding
in their place, respectively, references to ``968.112(f)'',
``968.315(e)(5)'', and ``968.315(e)''.
Sec. 968.310 [Removed]
30. Section 968.310 is removed.
Sec. 968.315 [Redesignated as Sec. 968.310]
31. Section 968.315 is redesignated as Sec. 968.310; and newly
redesignated Sec. 968.310 is amended by:
a. Removing from paragraph (a)(1) the phrase, ``under this
subpart,'';
b. Removing from paragraph (b)(1) the references to ``968.320'' and
``968.330'' and adding in their place references to ``968.315'' and
``968.325'', respectively;
c. Removing from paragraph (c)(5) the references to ``part 905''
and ``Sec. 905.135'' and adding in their place references to ``part
950'' and ``Sec. 950.135'', respectively;
d. Removing paragraph (d); and
e. Revising the section heading to read, ``Sec. 968.310
Determination of formula amount.''
32. A new Sec. 968.315 is added, to read as follows:
Sec. 968.315 Comprehensive Plan (including Five-Year Action Plan).
(a) Submission. As soon as possible after modernization funds first
become available for allocation under this subpart, HUD shall notify
PHAs in writing of their formula amount. For planning purposes, PHAs
may use the amount they received under CGP in the prior year in
developing their comprehensive plan, or they may wait for the annual
HUD notification of formula amount under Sec. 968.310(b)(1).
(b)(1) Resident participation. A PHA is required to develop,
implement, monitor and annually amend portions of its comprehensive
plan in consultation with residents of the developments covered by the
comprehensive plan. In addition, the PHA shall consult with resident
management corporations (RMCs) to the extent that an RMC manages a
development covered by the comprehensive plan. The PHA, in partnership
with the residents, must develop and implement a process for
[[Page 8745]]
resident participation that ensures that residents are involved in a
meaningful way in all phases of the CGP. Such involvement shall involve
implementing the Partnership Process as a critical element of the CGP.
(2) Establishment of Partnership Process. The PHA, in partnership
with the residents of the developments covered by the plan (and which
may include resident leaders, resident councils, resident advisory
councils/boards, and RMCs) must establish a Partnership Process to
develop and implement the goals, needs, strategies and priorities
identified in the comprehensive plan. After residents have organized to
participate in the CGP, they may decide to establish a volunteer
advisory group of experts in various professions to assist them in the
CGP Partnership Process. The Partnership Process shall be designed to
achieve the following:
(i) To ensure that residents are fully briefed and involved in
developing the content of, and monitoring the implementation of, the
comprehensive plan including, but not limited to, the physical and
management needs assessments, viability analysis, Five-Year Action
Plan, and Annual Statement. If necessary, the PHA shall develop and
implement capacity building strategies to ensure meaningful resident
participation in CGP. Such technical assistance efforts for residents
are eligible management improvement costs under CGP;
(ii) To enable residents to participate, on a PHA-wide or area-wide
basis, in ongoing discussions of the comprehensive plan and strategies
for its implementation, and in all meetings necessary to ensure
meaningful participation.
(3) Public notice. Within a reasonable amount of time before the
advance meeting for residents under paragraph (b)(4) of this section
and the public hearing under paragraph (b)(5) of this section, the PHA
shall provide public notice of the advance meeting and the public
hearing in a manner determined by the PHA that ensures notice to all
duly elected resident councils.
(4) Advance meeting for residents. The PHA shall hold, within a
reasonable amount of time before the public hearing under paragraph
(b)(5) of this section, a meeting for residents and duly elected
resident councils at which the PHA shall explain the components of the
comprehensive plan. The meeting shall be open to all residents and duly
elected resident councils.
(5) Public hearing. The PHA shall hold at least one public hearing,
and any appropriate number of additional hearings, to present
information on the comprehensive plan/annual submission and the status
of prior approval programs. The public hearing shall provide ample
opportunity for residents, local government officials, and other
interested parties to express their priorities and concerns. The PHA
shall give full consideration to the comments and concerns of
residents, local government officials, and other interested parties.
(c) Local government participation. A PHA shall consult with and
provide information to appropriate local government officials with
respect to the development of the comprehensive plan to ensure that
there is coordination between the actions taken under the consolidated
plan (see 24 CFR part 91) for project and neighborhood improvements
where public housing units are located or proposed for construction
and/or modernization and improvement and to coordinate meeting public
and human service needs of the public and assisted housing projects and
their residents. In the case of a PHA with developments in multiple
jurisdictions, the PHA may meet this requirement by consulting with an
advisory group representative of all the jurisdictions. At a minimum,
such consultation must include providing such officials with:
(1) Advance written notice of the public hearing required under
paragraph (b)(5) of this section;
(2) A copy of the summary of total preliminary estimated costs to
address physical needs by each development and management/operations
needs PHA-wide and a specific description of the PHA's process for
maximizing the level of participation by residents and a summary of the
general issues raised on the plan by residents and others during the
public comment process and the PHA's response to the general issues.
PHA records, such as minutes of planning meetings or resident surveys,
shall be maintained in the PHA's files and made available to residents,
resident organizations, and other interested parties upon request; and
(3) An opportunity to express their priorities and concerns to
ensure due consideration in the PHA's planning process;
(d) Participation in coordinating entities. To the extent that
coordinating entities are set up to plan and implement the consolidated
plans (under 24 CFR part 91), the PHA shall participate in these
entities to ensure coordination with broader community development
strategies.
(e) Contents of comprehensive plan. The comprehensive plan shall
identify all of the physical and management improvements needed for a
PHA and all of its developments, and that represent needs eligible for
funding under Sec. 968.112. The plan also shall include preliminary
estimates of the total cost of these improvements. The plan shall set
forth general strategies for addressing the identified needs, and
highlight any special strategies, such as major redesign or partial
demolition of a development, that are necessary to ensure the long-term
physical and social viability of the development. Where long-term
physical and social viability of the development is dependent upon
revitalization of the surrounding neighborhood in the provision of or
coordination of public services, or the consolidation or coordination
of drug prevention and other human service initiatives, the PHA shall
identify these needs and strategies. In addition, the PHA shall
identify the funds or other resources in the consolidated plan that are
to be used to help address these needs and strategies and the
activities in the comprehensive plan that strengthen the consolidated
plan. Each comprehensive plan shall contain the following elements:
(1) Executive summary. A PHA shall include as part of its
comprehensive plan an executive summary to facilitate review and
comprehension by development residents and by the public. The executive
summary shall include the following:
(i) A summary of total preliminary estimated costs to address
physical needs by each development and PHA-wide physical and management
needs; and
(ii) A specific description of the PHA's process for maximizing the
level of participation by residents during the development,
implementation and monitoring of the Comprehensive Plan, a summary of
the general issues raised on the plan by residents and others during
the public comment process and the PHA's response to the general
issues. PHA records, such as minutes of planning meetings or resident
surveys, shall be maintained in the PHA's files and made available to
residents, duly elected resident councils, and other interested
parties, upon request;
(2) Physical needs assessment. (i) Requirements. The physical needs
assessment identifies all of the work that a PHA would need to
undertake to bring each of its developments up to the modernization and
energy conservation standards, as required by the Act, to comply with
lead-based paint testing and abatement requirements under this part,
and to comply with other program requirements under Sec. 968.110. The
[[Page 8746]]
physical needs assessment is completed without regard to the
availability of funds, and shall include the following:
(A) A brief summary of the physical improvements necessary to bring
each such development to a level at least equal to applicable HUD
standards with respect to modernization standards, energy conservation
and life-cycle cost effective performance standards, lead-based paint
testing and abatement standards. This summary must indicate the
relative urgency of need. If the PHA has no physical improvement needs
at a particular development at the time it completes its comprehensive
plan, it must so indicate. Similarly, if the PHA intends to demolish,
partially demolish, convert, or dispose of a development (or units
within a development) it must so indicate in the summary of physical
improvements;
(B) The replacement needs of equipment systems and structural
elements that will be required to be met (assuming routine and timely
maintenance is performed) during the period covered by the action plan;
(C) A preliminary estimate of the cost to complete the physical
work;
(D) Any physical disparities between buildings occupied
predominantly by one racial or ethnic group and, in such cases, the
physical improvements required to correct the conditions; and
(E) In addition, with respect to vacant or non-homebuyer occupied
Turnkey III units, the estimated number of units that the PHA is
proposing for substantial rehabilitation and subsequent sale, in
accordance with Sec. 968.112(d)(3).
(ii) Source of data. The PHA shall identify in its needs assessment
the sources from which it derived data to develop the physical needs
assessment under this paragraph (e)(2) and shall retain such source
documents in its files;
(3) Management needs assessment (i) Requirements. The plan shall
include a comprehensive assessment of the improvements needed to
upgrade the management and operation of the PHA and of each viable
development so decent, safe, and sanitary living conditions will be
provided. The management needs assessment shall include the following,
with the relative urgency of need indicated:
(A) An identification of the most current needs related to the
following areas (to the extent that any of these needs is addressed in
a HUD-approved memorandum of agreement or improvement plan, the PHA may
simply include a cross-reference to these documents):
(1) The management, financial, and accounting control systems of
the PHA;
(2) The adequacy and qualifications of personnel employed by the
PHA in its management and operation, for each significant category of
employment;
(3) The adequacy and efficacy of:
(i) Resident programs and services;
(ii) Resident and development security;
(iii) Resident selection and eviction;
(iv) Occupancy;
(v) Maintenance;
(vi) Resident management and resident capacity building programs;
(vii) Resident opportunities for employment and business
development and other self-sufficiency opportunities for residents; and
(viii) Homeownership opportunities for residents;
(B) Any additional deficiencies identified through PHMAP, audits
and HUD monitoring reviews that are not addressed under paragraph
(e)(3)(i)(A) of this section. To the extent that any of these is
addressed in a HUD-approved memorandum of agreement or improvement
plan, the PHA may include a cross-reference to these documents;
(C) Any other management and operations needs that the PHA wants to
address at the PHA-wide or development level; and
(D) A PHA-wide preliminary cost estimate for addressing all the
needs identified in the management needs assessment, without regard to
the availability of funds;
(ii) Sources of funds. The PHA shall identify in its needs
assessment the sources from which it derived data to develop the
management needs assessment under this paragraph (e)(3) and shall
retain such source documents in its files;
(4) Demonstration of long-term physical and social viability. (i)
General. The plan shall include, on a development-by-development basis,
an analysis of whether completion of the improvements and replacements
identified under paragraphs (e)(2) and (e)(3) of this section will
reasonably ensure the long-term physical and social viability,
including achieving structural/system soundness and full occupancy, of
the development at a reasonable cost. For cost reasonableness, the PHA
shall determine whether the unfunded hard costs satisfy the definition
of ``reasonable cost.'' Where the PHA wishes to fund a development, for
other than emergencies, where hard costs exceed that reasonable cost,
the PHA shall submit written justification to the Field Office. If the
Field Office agrees with the PHA's request, the Field Office shall
forward its recommendation to Headquarters for final decision. Where
the estimated per unit unfunded hard cost is equal to or less than the
per unit TDC for the smallest bedroom size at the development, no
further computation of the TDC limit is required. The PHA shall keep
documentation in its files to support all cost determinations. The
Field Office will review cost reasonableness as part of its review of
the annual submission and the performance and evaluation report. As
necessary, HUD will review the PHA's documentation in support of its
cost reasonableness, taking into account broader efforts to revitalize
the neighborhoods in which the development is located;
(ii) Determination of non-viability. Where a PHA's analysis of a
development under paragraph (e) of this section establishes that
completion of the identified improvements and replacements will not
result in the long-term physical and social viability of the
development at a reasonable cost, the PHA shall not expend CGP funds
for the development, except for emergencies and essential non-routine
maintenance necessary to maintain habitability until residents can be
relocated. The PHA shall specify in its comprehensive plan the actions
it proposes to take with respect to the non-viable development (e.g.,
demolition or disposition under 24 CFR part 970);
(5) Five-year action plan. (i) General. The comprehensive plan
shall include a rolling five-year action plan to carry out the
improvements and replacements (or a portion thereof) identified under
paragraphs (e)(2) and (e)(3) of this section. In developing its five-
year action plan, the PHA shall assume that the current year funding or
formula amount will be available for each year of its five-year action
plan, whichever the PHA is using for planning purposes, plus the PHA's
estimate of the funds that will be available from other sources, such
as state and local governments. All activities specified in a PHA's
five-year action plan are contingent upon the availability of funds;
(ii) Requirements. Under the action plan, a PHA must indicate how
it intends to use the funds available to it under the CGP to address,
over a five-year period, the deficiencies (or a portion of the
deficiencies) identified in its physical and management needs
assessments, as follows:
(A) Physical condition. With respect to the physical condition of a
PHA's developments, a PHA must indicate in its action plan how it
intends to address, over a five-year period, the
[[Page 8747]]
deficiencies (or a portion of the deficiencies) identified in its
physical needs assessment so as to bring each of its developments up to
a level at least equal to the modernization and energy conservation
standards. This includes specifying the work to be undertaken by the
PHA in major work categories (e.g., kitchens, electrical systems,
etc.); establishing priorities among the major work categories by
development and year, based upon the relative urgency of need; and
estimating the cost of each of the identified major work categories. In
developing its action plan, a PHA shall give priority to the following:
(1) Activities required to correct emergency conditions;
(2) Activities required to meet statutory or other legally mandated
requirements (e.g., compliance with a court-ordered desegregation plan
or voluntary compliance agreement);
(3) Activities required to meet the needs identified in the Section
504 needs assessment within the regulatory timeframe; and
(4) Activities required to complete lead-based paint testing and
abatement requirements;
(B) Management and operations. A PHA must address in its action
plan the management and operations deficiencies (or a portion of the
deficiencies) identified in its management needs assessment, as
follows:
(1) With respect to the management and operations needs of the PHA,
the PHA must identify how it intends to address with CGP funds, if
necessary, the deficiencies (or a portion thereof) identified in its
management needs assessment, including work identified through PHMAP,
audits, HUD monitoring reviews, and self-assessments. The action plan
must indicate the relative urgency of need;
(2) A preliminary PHA-wide cost estimate, by major work category.
(iii) Procedure for maintaining current five-year action plan. The
PHA shall maintain a current five-year action plan by annually amending
its five-year action plan, in conjunction with the annual submission;
(6) Local government statement. The comprehensive plan shall
include a statement signed by the chief executive officer of the unit
of general local government (or, in the case of a PHA with developments
in multiple jurisdictions, from the CEO of each such jurisdiction)
certifying to the following:
(i) The PHA developed the comprehensive plan/five-year action plan
or amendments thereto in consultation with officials of the appropriate
governing body and with development residents covered by the
comprehensive plan/five-year action plan, in accordance with the
requirements of paragraphs (b) and (c) of this section;
(ii) The comprehensive plan/five-year action plan or amendments
thereto are consistent with the appropriate governing body's assessment
of its low income housing needs (as evidenced by its consolidated plan
under 24 CFR part 91, if applicable), and that the appropriate
governing body will cooperate in providing resident programs and
services; and
(iii) The PHA's proposed drug elimination activities are
coordinated with, and supportive of, local drug elimination strategies
and neighborhood improvement programs, if applicable; and
(7) PHA resolution. The plan shall include a resolution, in a form
prescribed by HUD, adopted by the PHA Board of Commissioners, and
signed by the Board Chairman of the PHA, approving the comprehensive
plan or any amendments.
(f) Amendments to the comprehensive plan.--(1) Extension of time
for performance. A PHA shall have the right to amend its comprehensive
plan (including the action plan) to extend the time for performance
whenever HUD has not provided the amount of assistance set forth in the
comprehensive plan or has not provided the assistance in a timely
manner;
(2) Amendments to needs assessments. The PHA shall amend its plan
by revising its needs assessments whenever it proposes to carry out
activities in its five-year action plan or annual statement that are
not reflected in its current needs assessments (except in the case of
emergencies). The PHA may propose an amendment to its needs
assessments, in connection with the submission of its annual submission
(see Sec. 968.325) or at any other time. These amendments shall be
reviewed by HUD in accordance with Sec. 968.320.
(3) Six-year revision of comprehensive plan. Every sixth year
following the initial year of participation, the PHA shall submit to
HUD, with its annual submission, a complete update of its comprehensive
plan. A PHA may elect to revise some or all parts of the comprehensive
plan more frequently.
(4) Annual revision of five-year action plan. Annually, the PHA
shall submit to HUD, with its annual submission, an update of its five-
year action plan, eliminating the previous year and adding an
additional year. The PHA shall identify changes in work categories
(other than those included in the new fifth year) from the previous
year five-year action plan when making this annual submission.
(5) Required submissions. Any amendments to the comprehensive plan
under this section must be submitted with the PHA resolution under
Sec. 968.315(e)(7).
(g) Prerequisite for receiving assistance.--(1) Prohibition of
assistance. No financial assistance, except for emergency work to be
funded under Secs. 968.103(b) and 968.112(a)(1)(ii), and for
modernization needs resulting from disasters under Sec. 968.103(b), may
be made available under this subpart unless HUD has approved a
comprehensive plan submitted by the PHA that meets the requirements of
this section. A PHA that has failed to obtain approval of its
comprehensive plan by the end of the FFY shall have its formula
allocation for that year (less any formula amounts provided to the PHA
for emergencies) added to the subsequent year's appropriation of funds
for grants under this part. HUD shall allocate such funds to PHAs and
IHAs participating in the CGP in accordance with the formula under
Sec. 968.103(e) and (f) in the subsequent FFY. A PHA that elects in any
FFY not to participate in the CGP may participate in the CGP in
subsequent FFYs;
(2) Requests for emergency assistance. A PHA may receive funds from
its formula allocation to address emergency modernization needs where
HUD has not approved a PHA's comprehensive plan. To request such
assistance, a PHA shall submit to HUD a request for funds in such form
as HUD may prescribe, including any documentation necessary to support
its claim that an emergency exists. HUD shall review the request and
supporting documentation to determine if it meets the definition of
``emergency work'' as set forth in Sec. 968.305. (Approved by the
Office of Management and Budget under control number 2577-0157)
Sec. 968.320 [Removed]
33. Section 968.320 is removed.
Sec. 968.325 [Redesignated as Sec. 968.320]
34. Section 968.325 is redesignated as Sec. 968.320; and newly
redesignated Sec. 968.320 is amended by:
a. Removing from paragraph (a)(1)(i) the reference to
``Sec. 968.320(d)'' and adding in its place a reference to
``Sec. 968.315(e)'';
b. Removing from paragraph (c) the references to ``Sec. 968.340''
and ``Sec. 968.345'' and adding in their place references to
``Sec. 968.330'' and ``Sec. 968.335'', respectively; and
[[Page 8748]]
c. Revising paragraph (b)(2) to read as follows:
Sec. 968.320 HUD review and approval of comprehensive plan (including
five-year action plan).
* * * * *
(b) * * *
(2) HUD shall approve the Comprehensive Plan except where it makes
a determination in accordance with one or more of the following:
(i) Comprehensive Plan is incomplete in significant matters;
(ii) Identified needs are plainly inconsistent with facts and data;
(A) Identified physical improvements and replacements are
inadequate;
(B) Identified management improvements are inadequate;
(C) Proposed physical and management improvements fail to address
identified needs;
(iii) Action plan is plainly inappropriate to meeting identified
needs;
(iv) Inadequate demonstration of long-term viability at reasonable
cost; and
(v) Contradiction of local government certification or PHA
resolution.
* * * * *
Sec. 968.330 [Redesignated as Sec. 968.325]
35. Section 968.330 is redesignated as Sec. 968.325; and newly
redesignated Sec. 968.325 is amended by:
a. Removing from paragraph (a) the reference to
``Sec. 968.315(b)(1)'' and adding in its place a reference to
``Sec. 968.310(b)(1)'' and by moving the phrase ``, as discussed in
Sec. 968.320(d)(5)(i)'' from the end of the penultimate sentence in the
paragraph to the end of the sentence before it, and revising the number
``Sec. 968.320'' in that phrase to read ``Sec. 968.315'';
b. Removing from paragraph (d) introductory text the reference to
``Sec. 968.320'' and adding in its place a reference to
``Sec. 968.315'';
c. Removing from paragraph (e)(8) the reference to
``Sec. 968.320(d)(7)'' and adding in its place a reference to
``Sec. 968.315(e)(7)'';
d. Removing from paragraph (f) references to ``Sec. 968.320(e)''
and ``Sec. 968.325'' and adding in their place references to
``Sec. 968.315(f)'' and ``Sec. 968.320'';
e. Removing from paragraph (g)(2)(ii) the reference to
``Sec. 968.320(d)'' and adding in its place a reference to
``Sec. 968.315(e)'';
f. Removing from paragraph (h) the reference to ``Sec. 968.305''
and adding in its place a reference to ``Sec. 968.330'';
g. Removing from paragraph (i)(1) references to ``Sec. 968.345''
and adding in their place references to ``Sec. 968.335'';
h. Removing from paragraph (j) the words ``to obtain'' and adding
in their place the words ``in order for the PHA to draw down''; and
i. Revising the section heading and paragraph (e)(4), to read as
follows:
Sec. 968.325 Annual submission of activities and expenditures.
* * * * *
(e) * * *
(4) For each development and for any management improvements not
covered by a HUD-approved memorandum of agreement or management
improvement plan, a schedule for the use of current year funds,
including target dates for the obligation and expenditure of the funds
(see Sec. 968.125);
* * * * *
Sec. 968.335 [Removed]
36. Section 968.335 is removed.
Sec. 968.340 [Redesignated as Sec. 968.330]
37. Section 968.340 is redesignated as Sec. 968.330, and newly
redesignated Sec. 968.330 is amended by removing the paragraph
designation and heading from paragraph (a), and by removing paragraph
(b).
Sec. 968.345 [Redesignated as Sec. 968.335]
38. Section 968.345 is redesignated as Sec. 968.335; and newly
redesignated Sec. 968.335 is amended by:
a. Removing paragraphs (a)(1)(i) and (a)(1)(ii), paragraphs
(a)(2)(i) and (a)(2)(ii), and paragraphs (a)(3)(i) through (a)(3)(iii);
b. Removing from paragraph (d) the reference to ``Sec. 905.684''
and adding in its place a reference to ``Sec. 968.330'';
c. Removing from paragraph (e)(7) the words ``(see
Sec. 968.315(d))'';
d. Removing from paragraph (g) references to ``Sec. 905.135'' and
``Sec. 905.601'' and adding in their place references to
``Sec. 950.135'' and ``Sec. 968.103(e) and (f)'', respectively;
e. Removing from paragraph (j) references to ``Sec. 978.345(h)''
and ``Sec. 968.345(g)'' and adding in their place references to
``paragraph (h) of this section'' and ``paragraph (g) of this
section'', respectively; and
f. Removing the reference in paragraph (k) to ``Sec. 968.312(c)''
and adding in its place a reference to ``Sec. 968.310(c)''.
Subpart D--Vacancy Reduction Program
Secs. 968.401, 968.403, 968.405, 968.407, 968.410, and
968.413 [Removed]
39. Sections 968.401, 968.403, 968.405, 968.407, 968.410, and
968.413 are removed.
Dated: February 8, 1996.
Michael B. Janis,
General Deputy Assistant Secretary for Distressed and Troubled Housing
Recovery.
[FR Doc. 96-4814 Filed 3-4-96; 8:45 am]
BILLING CODE 4210-33-P
Complete official Federal Register PDF
FR Doc. 96-4756 Antarctic Marine Living Resources Convention Act of 1984; Conservation and Management Measures
[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Pages 8483-8490]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4756]
=======================================================================
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DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
50 CFR Part 380
[Docket No. 950707173-6036-02; I.D. 012296E]
RIN 0648-AF51
Antarctic Marine Living Resources Convention Act of 1984;
Conservation and Management Measures
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Secretary of Commerce (Secretary) amends the regulations
governing harvesting and reporting of Antarctic living marine resource
catches by vessels of, and persons subject to the jurisdiction of, the
United States. The regulations implement conservation and management
measures implemented by the Commission for the Conservation of
Antarctic Marine Living Resources (CCAMLR or Commission) and accepted
in whole by the Government of the United States to regulate catches in
Convention for the Conservation of Antarctic Marine Living Resources
(Convention) statistical reporting areas 48 and 58. These measures
restrict the use of gear, restrict the directed taking and bycatch of
certain species of fish, prohibit the taking of other species, and
require real-time and other reporting of the harvest of certain
species.
EFFECTIVE DATE: February 29, 1996.
ADDRESSES: A copy of the framework environmental assessment may be
obtained from the Assistant Administrator for Fisheries, NOAA, National
Marine Fisheries Service, 1315 East-West Highway, Silver Spring, MD
20910.
Comments regarding burden estimates or collection of information
aspects of this rule should be sent to Robin Tuttle, (See ADDRESSES),
and to the Office of Information and Regulatory Affairs, Office of
Management and Budget (OMB), Washington, D.C. 20503, Attention: NOAA
Desk Officer.
[[Page 8484]]
FOR FURTHER INFORMATION CONTACT: Robin Tuttle, NMFS International
Organizations and Agreements Division, 301-713-2282.
SUPPLEMENTARY INFORMATION:
Background
At its annual meeting in Hobart, Tasmania, in 1986, CCAMLR, of
which the United States is a member, adopted a conservation measure
requiring the Commission at subsequent meetings to adopt limitations on
catch, or to implement equivalent measures, which would be binding for
species upon which fisheries are permitted in Convention subarea 48.3
(South Georgia), depicted at (Figure 1 to part 380). The Commission
has, also, adopted measures that apply to other Convention subareas.
The measures adopted at the 1995 meeting of the Commission address
the 1995-96 and 1996-97 fishing seasons. The measures are based upon
the advice of the Scientific Committee and take into account research
conducted by Commission members and the reports and recommendations of
the Scientific Committee's working groups. The 1995-96 fishing season
is defined as the period from November 4, 1995, to the end of the
Commission meeting in 1996 (November 1, 1996). The 1996-97 fishing
season is defined as the period from the end of the Commission meeting
in 1996 (November 1, 1996) to the end of the Commission meeting in 1997
(likely October 31, 1997). The 1997-98 fishing season is not defined,
but will likely run for the period from October 31, 1997 to the end of
the Commission meeting in 1998. There are shorter fishing periods
defined for specific fisheries.
Comments and Responses
The measures were announced and public comments invited (until
January 9, 1996) by a Federal Register notice on December 12, 1995 (60
FR 63752). Comments supporting the measures were received from the
Pacific Seabird Group (PSG) and H.T. Harvey & Associates (Harvey).
PSG suggested that longline gear be modified to release hooks and
longlines underwater. Department of State (DOS) noted that the United
States tabled a paper at the 1995 CCAMLR meeting on the potential for
longline systems which release baited line underwater. The paper was
strongly supported and CCAMLR requested that Members using such systems
report to the Scientific Committee on their effectiveness in
eliminating seabird bycatch.
PSG recommended that CCAMLR study whether the number of seabirds
attracted to longline sets would decrease if the dumping of offal were
reduced. DOS noted that CCAMLR has prohibited the discharge of offal
during setting or hauling on the side of the vessel on which longlines
are set or hauled.
PSG also suggested that CCAMLR study measures to decrease the
effects of longlines on nocturnal foragers, like petrels, that become
entangled and die when nets are set at night. DOS reported that CCAMLR
has recognized the urgent need for research into ways of reducing the
bycatch of white-chinned petrels, especially at night, and has called
for further work on relationships between hook size and the bycatch of
petrels.
PSG urged that longline fishery measures be enforced, and their
effects monitored and made public. DOS noted that in the Dissostichus
eleginoides (Patagonian toothfish) fishery in subarea 48.3, the primary
fishery in which seabird mortality has been a problem, all vessels are
required by CCAMLR to have at least one scientific observer, appointed
in accordance with the CCAMLR Scheme of International Scientific
Observation, aboard throughout all fishing activities within the
fishing period.
With respect to the krill fishery, PSG recommended that CCAMLR
scientists continue to monitor the fishery to determine whether the
current precautionary limit is appropriate. DOS noted that the United
States has concerns about the proposed use of a new krill productivity
model and will ensure that the lower existing krill catch rate is
maintained until the integrity of the newer model can be assured.
Both PSG and Harvey recommended a study of the importance of
Electrona carlsbergi (lanternfish) to the Scotia Sea ecosystem and
foodwebs. DOS indicated that it will forward the suggestion to the
interagency group involved in preparations for the 1996 meeting of
CCAMLR.
A. Changes in Taxonomy
The Commission recognized changes in taxonomy for Notothenia
squamifrons (grey rockcod), now called Lepidorhirus squamifrons, and
Notothenia gibberifrons (humped rockcod), now called Gobionotothen
gibberifrons.
B. Data Reporting Requirements
The Commission has, at past annual meetings, adopted detailed,
fine-scale reporting requirements. These measures continue in force
until amended or revoked. The Commission reduced the overall reporting
burden for the 1995-96 fishing season.
The Commission reopened the fishery for Champsocephalus gunnari
(mackerel icefish) in statistical area 48.3 and required the use of:
(1) CCAMLR Form C1 to report haul-by-haul data finescale catch and
effort for trawl fisheries, and (2) CCAMLR Form B2 to report length
composition measurements. The forms must be submitted at the end of
each month of fishing. This reporting is a lesser level of reporting
than in 1993-94, when the fishery was last open and during which
fishers were also required to report catch and effort on a 5-day basis.
The Commission modified the data requirements for the exploratory
crab fishery in statistical subarea 48.3 by requiring a count of and
estimated weight total for D. eleginoides and Notothenia rossii
(marbled rockcod) and estimated total weight of other species taken as
bycatch. The regulations impose this additional requirement, but remove
past requirements for a Commercial Vessel Daily Activity Logbook; a
Commercial Vessel Fishing Effort Logbook; and a Commercial Vessel
CCAMLR Subsample Logbook. The data reporting required by the
experimental harvest regime (adopted by the Commission in 1993 and
included in previous regulations) serves the purpose of those logbook
requirements.
The Commission identified the bycatch species (any cephalopod,
crustacean or fish species other than E. carlsbergi) to which the
continuing requirement for monthly biological data reporting for E.
carlsbergi in statistical subarea 48.3 applies. The regulations note
these species.
The Commission required the use of the existing systems of every
10-day catch and effort reporting and monthly effort and biological
data reporting to report data from the new fisheries for D. eleginoides
and Dissostichus mawsoni (Antarctic toothfish) in statistical division
58.4.3 and deep-water species in statistical division 58.5.2. However,
since these bottom-trawling only fisheries are limited to Australian
vessels, the data reporting requirements are not included in the
regulations.
The Commission made reporting for C. gunnari and D. eleginoides in
statistical subarea 58.5.2 less burdensome, by reducing the frequency
of required catch and effort reporting from every 5 days to every 10
days.
C. Longline Fishing
The Commission further defined the actions which fishers must take
while longline fishing or conducting longline fishing research in the
Convention Area in order to minimize the incidental
[[Page 8485]]
mortality of seabirds. The regulations are amended to permit longline
fishing consistent with Commission restrictions.
D. Finfishing in Subareas 48.1 (South Shetlands Islands)
The Commission continued prohibitions on the taking of all species
of finfish, other than for scientific research purposes, in subareas
48.1 and 48.2 from November 6, 1993, until at least such time that a
survey of stock biomass is carried out, and a decision that the fishery
is to be reopened is made by the Commission based on the advice of the
Scientific Committee.
E. Finfishing in Subarea 48.3 (South Georgia)
The Commission took action on finfishing in subarea 48.3 for the
1995-96, 1996-97, and 1997-98 fishing seasons, as follows:
The prohibition on directed fishing for G. gibberifrons,
Chaenocephalus aceratus (blackfin icefish), Pseudochaenichthys
georgianus (South Georgia icefish), L. squamifrons, and Patagonotothen
brevicauda guntheri (Patagonian rockcod) for the 1994-95 and 1995-96
fishing seasons is continued.
In any directed fishery in the subarea, in any fishing season, the
bycatch limit for G. gibberifrons is 1,470 metric tons (mt); the
bycatch limit for C. aceratus is 2,200 mt; and the bycatch limit for P.
georgianus, N. rossii, and L. squamifrons is 300 mt each, the 1992-93
levels. This measure was previously given seasonal application.
The total allowable catch (TAC) for E. carlsbergi is reduced. The
TAC for the 1995-96 fishing season is 109,000 mt. In addition, the TAC
for E. carlsbergi is 14,500 mt in the Shag Rocks region. The directed
fishery for E. carlsbergi will close if a bycatch limit set for G.
gibberifrons, C. aceratus, P. georgianus, N. rossii, or L. squamifrons
is reached for any of these species or if the TAC for E. carlsbergi
reaches 109,000 mt, whichever comes first.
The directed fishery for E. carlsbergi in the Shag Rocks region
will close if a bycatch limit for any of the bycatch species is
reached, or if the TAC of 14,500 mt is reached, whichever comes first.
If, in the course of the directed fishery for E. carlsbergi, the
bycatch of any one haul of the bycatch species exceeds 5 percent, the
fishing vessel must move to another fishing location within the
subarea. This location was not defined for the 1994-95 season. For the
1995-96 season, it is defined as a fishing location not closer than 5
nautical miles (9.26 km) distant. The fishing vessel must not fish for
at least 5 days within 5 nautical miles (9.26 km) of the location in
which the catch of species, other than the target species, exceeded 5
percent. The relocation distance and the use of a 5-day waiting period
were adopted pending the adoption of a more appropriate distance and
period.
The TAC of D. eleginoides was increased to 4,000 mt for a fishing
season defined from March 1, 1996, to August 31, 1996, or until the TAC
is reached, whichever comes first. Each vessel participating in the
fishery must carry at least one scientific observer, appointed in
accordance with the CCAMLR Scheme of International Scientific
Observation, aboard throughout all fishing activities within the
fishing period. Directed fishing must be by longlines only. Submission
of catch and effort data continue to be required on an every-5-day
reporting basis. The monthly reporting of representative samples of
length composition measurements using forms provided by the Scientific
Committee continues to be required during the 1995-96 fishing season.
Failure by any Contracting Party, including the United States, to
submit length composition data for three consecutive reporting periods
will result in the closure of the fishery to the vessels of the
Contracting Party.
The fishery for C. gunnari was reopened with a TAC of 1,000 mt. The
directed fishery for C. gunnari will close when the bycatch limit for
any designated bycatch species is reached. If, in the course of the
directed fishery, the bycatch of any one haul of a designated bycatch
species exceeds 5 percent, the fishing vessel must move to another
location not closer than 5 nautical miles (9.26 km) distant. For at
least 5 days, the fishing vessel must fish within 5 nautical miles
(9.26 km) of the location in which the bycatch exceeded 5 percent.
Vessels must undertake a scientific survey carried out in accordance
with a survey design specified in the CCAMLR Draft Manual for Bottom
Trawl Surveys in the Convention Area. Each vessel must have a
scientific observer, appointed in accordance with the CCAMLR Scheme of
International Scientific Observation, aboard throughout all fishing
activities within the fishing season.
F. Finfishing in Subarea 48.4 (South Sandwich Islands)
The TAC for D. eleginoides in subarea 48.4 is 28 mt for the 1995-96
fishing season beginning March 1, 1996, and ending on the earliest of
August 31, 1996; reaching the TAC for D. eleginoides in subarea 48.3;
or reaching the TAC for D. eleginoides in subarea 48.4. Each vessel
participating in the fishery must carry at least one scientific
observer, appointed in accordance with the CCAMLR Scheme of
International Scientific Observation, aboard throughout all fishing
activities within the fishing period.
Every 5-day catch and effort data and monthly reporting of
representative samples of length composition measurements using forms
provided by the Scientific Committee continue to be required.
G. Finfishing in Division 58.4.3
Finfishing for Dissostichus species in statistical division 58.4.3
for the 1995-96 fishing season is closed to all but Australian vessels.
H. Finfishing in Division 58.4.4 (Ob and Lena Banks)
Measures adopted in 1992 setting TACs for the 1993-94 fishing
season were continued at the 1994 meeting for the 1994-95 and 1995-96
fishing seasons. The TAC for L. squamifrons for the 2-year period is
1,150 mt with 715 mt allocated to Lena Bank and 435 mt allocated to Ob
Bank. Each vessel participating in the fishery in 1994-95 and 1995-96
must carry at least one scientific observer, appointed in accordance
with the CCAMLR Scheme of International Scientific Observation, aboard
throughout all fishing activities within the fishing period.
I. Finfishing in Division 58.5.32 (McDonald and Heard Islands)
In 1994, the Commission adopted a measure of continuing application
setting precautionary catch limits in division 58.5.2 of 311 mt for C.
gunnari and 297 mt (by trawling only) for D. eleginoides. The monthly
effort and biological data reporting requirement established previously
for other fisheries continues to apply, but the 5-day reporting of
catch and effort has been reduced to 10-day reporting.
Fishing seasons commence in each year at the close of the annual
meeting of the Commission and continue until the earlier of June 30 or
reaching the precautionary catch limits.
If in the course of a directed fishery for D. eleginoides or C.
gunnari, the bycatch in any haul of the species L. squamifrons, N.
rossii, Channichthys rhineratus (unicorn icefish) of Bathyraja spp.
(Antarctic rays) exceeds 5 percent, the fishing vessel must move to
another fishing location not closer than 5 nautical miles (9.26 km)
distant. For a period of at least 5 days, the fishing vessel must not
fish within 5 nautical
[[Page 8486]]
miles (9.26 km) of the location in which the bycatch exceeded 5
percent. The relocation distance and the use of a 5-day waiting period
were adopted pending the adoption of a more appropriate distance and
period.
In statistical division 58.5.2, fishing for deep-water species
other than D. eleginoides is closed to all but Australian vessels for
the 1995-96 fishing season.
J. Fishing for Euphausia superba (Antarctic Krill)
Measures adopted by the Commission at its 1991 and 1992 meetings
capping the catch of krill at 1.5 million mt in area 48 in any season
continues in force. The cap in subarea 58.4.2 was raised to 450,000 mt
during any fishing season.
K. Fishing for Antarctic Crab
The Commission continued measures adopted in 1992 limiting the
exploratory crab fishery in subarea 48.3 and specifying data
requirements through the 1995-96 fishing season. The crab fishery
continues to be limited to a TAC of 1,600 mt and to one vessel per
Commission Member.
An experimental harvest regime (EHR) adopted in 1993 was extended
through the 1997-98 fishing season. Vessels conducting Phase 2 of the
EHR are no longer required to fish within squares as defined by
specific longitude and latitude. Fishing during Phase 2 requires that
vessels fish in 3 squares measuring approximately 26 square nautical
miles (48.15 square km) in an area and with overall dimensions of
6 deg. lat by 7.5 deg. long. Vessel captains determine the location of
the 3 squares to be fished, but the squares selected must be contiguous
and the distance between the boundaries of any 2 squares must be at
least 4 nautical miles (7.41 km). This will allow vessels to fish in
preferred depth ranges.
The soak time for each string of crab pots is defined as the time
between the start of setting and the start of hauling.
Classification
NMFS has determined that this rule is necessary to implement the
Antarctic Marine Living Resources Convention Act of 1984 (the Act) and
to give effect to the management measures adopted by CCAMLR and agreed
to by the United States.
This final rule has been determined to be not significant for
purposes of E.O. 12866.
It is exempt from section 553 of the Administrative Procedure Act,
because it involves a foreign affairs function of the United States.
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with a collection of information subject to the
requirements of the Paperwork Reduction Act, unless that collection of
information displays a currently valid OMB Control Number.
This rule contains a collection-of-information requirement subject
to the Paperwork Reduction Act. The collection of information has been
approved by OMB under OMB Control Number 648-0194, which expires August
31, 1997. The annual reporting burden for this collection of
information is estimated to average 44\1/2\ hours in harvesting and
import permit-related activities; 1\1/2\ hours in CCAMLR Ecosystem
Monitoring Program permit-related activities; \1/2\ hour for finfish
reporting in the crab fishery; 6\1/2\ hours for crab data reporting; 1
hour of radio contact; and \1/2\ hour for reporting biological data in
the finfish and crab fisheries. The response estimates shown include
the time for reviewing instructions, searching existing data sources,
gathering and maintaining the data needed, and completing and reviewing
the collection of information. Send comments regarding this burden
estimate or any other aspect of this collection of information,
including suggestions for reducing this burden, to Robin Tuttle, NMFS,
and to the Office of Information and Regulatory Affairs (see
ADDRESSES).
List of Subjects in 50 CFR Part 380
Administrative practice and procedure, Antarctica, Fish, Imports,
Marine resources, Reporting and recordkeeping requirements, Treaties,
Wildlife.
Dated: February 23, 1996.
Gary Matlock,
Program Management Officer, National Marine Fisheries Service.
For the reasons set out in the preamble, 50 CFR part 380 is amended
as follows:
PART 380--ANTARCTIC MARINE LIVING RESOURCES CONVENTION ACT OF 1984
1. The authority citation for part 380 continues to read as
follows:
Authority: 16 U.S.C. 2431 et seq.
Sec. 380.2 [Amended]
2. In Sec. 380.2, the definition of ``fishing season'' is removed,
and in the definition for ``Antarctic finfishes'', in the table, the
entries in the left column Notothenia gibberifrons and Notothenia
squamifrons are removed and the entries Gobionotothen gibberifrons and
Lepidorhirus squamifrons are added in their place, respectively.
3. In Sec. 380.23, paragraphs (b)(1), (c) through (j), paragraphs
(k) introductory text, (k)(5)(v)(A), (k)(5)(ix), and (k)(5)(xiii) are
revised and paragraphs (k)(5)(ii)(G) and (l) through (n) are added to
read as follows:
Sec. 380.23 Catch restrictions.
* * * * *
(b) * * *
(1) The total catch of E. superba shall not exceed 450,000 mt in
any fishing season.
* * * * *
(c) The following catch restrictions apply to D. eleginoides in
statistical subarea 48.4 (Figure 1 to part 380):
(1) The total catch of D. eleginoides shall not exceed 28 mt.
(2) For the purposes of applying this catch restriction, the
fishing season begins on March 1, 1996, and ends on August 31, 1996.
(3) Each vessel participating in the fishery must carry at least
one scientific observer, appointed in accordance with the CCAMLR Scheme
of International Scientific Observation, aboard throughout all fishing
activities within the fishing period.
(d) The following directed fishing is prohibited in statistical
subarea 48.3 (Figure 1 to part 380):
(1) Directed fishing on N. rossii.
(2) Directed fishing on G. gibberifrons, C. aceratus, P.
georgianus, L. squamifrons, and P.b. guntheri from November 5, 1994,
through November 1, 1996.
(e) The following bycatch limitations apply in statistical subarea
48.3 during any fishing season:
(1) The bycatch of G. gibberifrons shall not exceed 1,470 mt.
(2) The bycatch of C. aceratus shall not exceed 2,200 mt.
(3) The bycatch of P. georgianus, N. rossii, and L. squamifrons
shall not exceed 300 mt each.
(f) The following catch restrictions apply to D. eleginoides in
statistical subarea 48.3 from March 1, 1996, through August 31, 1996,
or until the total allowable catch is reached, whichever comes first:
(1) The total catch of D. eleginoides shall not exceed 4,000 mt.
(2) Each vessel participating in the fishery must carry at least
one scientific observer, appointed in accordance with the CCAMLR Scheme
of International Scientific Observation, aboard throughout all fishing
activities within the fishing period.
(g) The following catch restrictions apply to E. carlsbergi in
statistical
[[Page 8487]]
subarea 48.3 from November 3, 1995, through November 1, 1996:
(1) The total catch of E. carlsbergi shall not exceed 109,000 mt.
(2) The total catch of E. carlsbergi shall not exceed 14,500 mt in
the Shag Rocks region, defined as the area bounded by 52 deg.30' S.
lat., 40 deg. W. long.; 52 deg.30' S. lat., 44 deg. W. long.;
54 deg.30' S. lat., 40 deg. W. long.; and 54 deg.30' S. lat., 44 deg.
W. long..
(3) If in the course of the directed fishery for E. carlsbergi, the
bycatch in any one haul exceeds 5 percent of any bycatch species in
paragraph (e), the fishing vessel must move to another fishing location
within the subarea not closer than 5 nautical miles (9.26 km), for a
period of at least 5 days.
(h) The taking of finfish, other than for scientific research
purposes, is prohibited in subareas 48.1 and 48.2 (Figure 1 to part
380).
(i) The following catch restrictions apply to L. squamifrons in
statistical division 58.4.4 (Figure 1 to part 380) from November 5,
1994, through November 1, 1996:
(1) The total catch of L. squamifrons for this period shall not
exceed 715 m on Lena Bank and 435 mt on Ob Bank.
(2) Each vessel participating in the fishery shall carry a
scientific observer, appointed in accordance with the CCAMLR scheme of
International Scientific Observation aboard throughout all fishing
activities within the fishing period.
(j) The following catch restrictions apply to statistical division
58.5.2 (Figure 1 to part 380) for each fishing season. (For purposes of
applying this limit, a fishing season begins at the close of the annual
meeting of CCAMLR and continues until the earlier of June 30 or until
respective precautionary catch limits are reached, whichever comes
first):
(1) The total catch limit for C. gunnari is 311 mt.
(2) The total catch limit for D. eleginoides is 297 mt.
(3) If in the course of a directed fishery for C. gunnari or D.
eleginoides, the bycatch in any haul exceeds 5 percent for L.
squamifrons, N. rossii, C. rhinoceratus or Bathyraja spp., the fishing
vessel shall move to another location not closer than 5 nautical miles
(9.26 km) distant. For a period of at least 5 days, the fishing vessel
shall not fish within 5 nautical miles (9.26 km) of the location in
which the bycatch exceeded 5 percent.
(k) The following catch restrictions apply to fishing for any
Antarctic crab species in the crab group Order Decapoda, Suborder
Reptantia, in statistical area 48 from November 4, 1995, through
November 1, 1996:
* * * * *
(5) * * *
(ii) * * *
(G) Soak time is defined for each string of crab pots as the time
between the start of setting and the start of hauling.
* * * * *
(v) * * *
(A) Every vessel conducting Phase 2 shall fish in 3 small squares
measuring approximately 26 nautical miles (48.15 km) in area (the
dimension of these squares shall be 6.0 deg. lat. by 7.5 deg. long. The
squares shall be subdivisions of the blocks delineated in Phase 1 of
the experimental regime. Vessel captain shall determine the location of
the 3 squares that will be fished, but selected squares may not be
contiguous and the distance between the boundaries of any 2 squares
must be at least 4 nautical miles (7.41 km).
* * * * *
(ix) Data collected during the experimental harvest regime up to
June 30 in any split-year shall be submitted to the CCAMLR Data manager
by August 31 of the following split year.
* * * * *
(xiii) The experimental regime shall be instituted for a period of
3 split-years (1995-96 to 1997-98). Fishing vessels that begin
experimental fishing in the 1997-98 split-year must complete the regime
during the 1998-99 split-year.
(l) The following catch restrictions apply to C. gunnari in
statistical subarea 48.3 from November 3, 1995, through March 31, 1996:
(1) The total catch of C. gunnari shall not exceed 1,000 mt.
(2) The fishery shall close if the bycatch of any of the species
listed in paragraph (e) above reaches its bycatch limit or if the total
catch of C. gunnari reaches 1,000 mt, whichever comes first.
(3) If, in the course of the directed fishery for C. gunnari, the
bycatch in any one haul exceeds 5 percent for any of the species listed
in paragraph (e) of this section, the fishing vessel shall move to
another location not closer than 5 nautical miles (9.26 km) distant.
For a period of at least 5 days, the fishing vessel shall not fish
within 5 nautical miles (9.26 km) of the location in which the bycatch
exceeded 5 percent.
(4) Each vessel participating in the directed fishery for C.
gunnari is required to undertake a scientific survey carried out in
accordance with the survey design specified in the CCAMLR Draft Manual
for Bottom Trawl Surveys in the Convention Area.
(5) Each vessel participating in the directed fishery for C.
gunnari shall have a scientific observer, appointed in accordance with
the CCAMLR Scheme of International Scientific Observation, aboard
throughout all fishing activities within the fishing season.
(m) Vessels of, and persons subject to the jurisdiction of, the
United States shall not fish for D. eleginoides and D. mawsoni in
statistical 58.4.3 from November 4, 1995, through June 30, 1996.
(n) Vessels of, and persons subject to the jurisdiction of, the
United States shall not fish for deep-water species other than D.
eleginoides and C. gunnari in statistical division 58.5.2 from November
4, 1995, through June 30, 1996.
4. In Sec. 380.24, the introductory text to paragraphs (a) through
(d) are revised, paragraph (e) is removed, paragraphs (f) and (g) are
redesignated as paragraphs (e) and (f) respectively, the introductory
text to redesignated paragraphs (e), (f), (f)(1), and redesignated
paragraphs (f)(2) and (f)(3) are revised, and paragraphs (e)(4), (e)(5)
and (f)(4) are added to read as follows:
Sec. 380.24 Reporting requirements.
(a) Five-day catch and effort reporting is established for catches
in the Convention Area greater than 5 mt taken during fishing for
research purposes; for D. eleginoides in statistical subareas 48.3 and
48.4; and for L. squamifrons in statistical division 58.4.4 as follows:
* * * * *
(b) Ten-day catch and effort reporting is established for fishing
for any member of the crab group (Order Decapoda, Suborder Reptania) in
statistical area 48; C. gunnari in statistical division 58.5.2; and D.
eleginoides in statistical division 58.5.2 as follows:
* * * * *
(c) Monthly catch and effort reporting is established for E.
superba in statistical area 48 and in statistical subdivision 58.4.2;
and for E. carlsbergi in statistical subarea 48.3 as follows:
* * * * *
(d) Monthly effort and biological data reporting for trawl
fisheries is established for E. carlsbergi in statistical subarea 48.3;
for the bycatch of any cephalopod, crustacean or fish species other
than E. carlsbergi in the directed fishery for E. carlsbergi in
statistical area 48.3; for L. squamifrons in statistical division
58.4.4; for the bycatch of D. eleginoides in the directed fishery for
L. squamifrons in statistical division 58.4.4. for C. gunnari in
statistical division 58.5.2; and for D. eleginoides in statistical
division 58.5.2 as follows:
* * * * *
[[Page 8488]]
(e) Monthly effort and biological data D. eleginoides for fishing
in statistical subareas 48.3 and 48.4 from November 3, 1995, through
November 1, 1996, is established as follows:
* * * * *
(4) Haul-by-haul data must be reported to the Assistant
Administrator For Fisheries, NOAA (AA) not later than the end of
following month on the CCAMLR fine-scale catch and effort data form for
longline fisheries (Form C2, latest version). These data shall include
numbers of seabirds and marine mammals of each species caught and
released or killed.
(5) Completed forms B2 and C2 must be conveyed by cable, telex,
rapidfax, or other appropriately timely method to the number or address
specified in the vessel's permit, and must include the vessel's name,
permit number, month of reporting, and the catch in metric tons (to the
nearest tenth of a metric ton). If no restricted species are taken
during a reporting period, the operator must submit a form showing no
catch or bycatch.
(f) Reporting for crab fishing (Order Decapoda, Suborder Reptania)
in statistical area 48 is required as follows:
(1) The following data must be reported to the CCAMLR Data Manager
by August 31, 1996 for catches taken between November 4, 1995, and July
31, 1996; by September 30, 1996 for catches taken between July 31, 1996
and August 31, 1996; and by November 17, 1996 for catches taken between
August 31, 1996 and November 1, 1996:
* * * * *
(2) Data gathered during the experimental harvest regime described
in Sec. 380.23 (k) shall be reported to CCAMLR Data Manager upon the
completion of each phase of the experimental harvest.
(3) Every 10-day reporting of catch and effort data, as described
in paragraph (b), is required during normal fishing between Phase 1 and
Phase 2, and between Phase 2 and Phase 3 of the experimental harvest
regime. Reports shall be submitted to the CCAMLR Data Manager.
(4) Copies of all data provided directly to the CCAMLR Data Manager
shall be concurrently provided to the AA to the number or address
specified in the vessel's permit, and must include the vessel's name,
permit number, month of reporting, and catch in metric tons (to the
nearest tenth of a metric ton).
5. In Sec. 380.26, paragraphs (b) through (i) are revised to read
as follows:
Sec. 380.26 Closures.
* * * * *
(b) The fishery for D. eleginoides in statistical subarea 48.3
shall close on August 31, 1996, or when the total catch reaches 4,000
mt, whichever comes first.
(c) The fishery for D. eleginoides in statistical subarea 48.4
shall close on August 31, 1996, reaching the total allowable catch for
D. eleginoides in statistical subarea 48.3, or when the total catch
reaches 28 mt, whichever comes first.
(d) The fishery for C. gunnari in statistical subarea 48.3 shall
close on November 1, 1996, or when the total catch reaches 1,000 mt,
whichever comes first.
(e) The directed fishery for E. carlsbergi in statistical subarea
48.3 shall close November 1, 1996, or when the bycatch of any of the
species G. gibberifrons, C. aceratus, N. rossii, L. squamifrons, P.
georgianus, or P.B. guntheri reaches its bycatch limit, or when the
total catch of E. carlsbergi reaches 109,000 mt, whichever comes first.
(f) The directed fishery for E. carlsbergi in the Shag Rocks region
of statistical subarea 48.3 shall close November 1, 1996, or when the
bycatch of any of the species named in paragraph (e) of this section
reaches its bycatch limit, or when the total catch of E. carlsbergi
reaches 14,500 mt, whichever comes first.
(g) The fishery for L. squamifrons on Lena Bank in statistical
division 58.4.4 shall close November 1, 1996, or when the total catch
reaches 715 mt, whichever comes first.
(h) The fishery for L. squamifrons on Ob Bank in statistical
division 58.4.4 shall close November 1, 1996, or when the total catch
reaches 435 mt whichever comes first.
(i) The fishery for C. gunnari and D. eleginoides in statistical
division 58.5.2 shall close the earlier of June 30 or until
precautionary catch limits of 311 mt and 297 mt, respectively, are
reached, whichever comes first.
6. Section 380.27 is revised to read as follows:
Sec. 380.27 Gear restrictions.
(a) Longline fishing or longline fishing research in the Convention
area (except for waters adjacent to the Kerguelen and Crozet Islands
and the Prince Edward islands) shall be conducted as follows:
(1) Fishing operations shall be conducted in such a way that the
baited hooks sink as soon as possible after they are put in the water.
Only thawed bait shall be used.
(2) For vessels using the Spanish method of longline fishing,
weights should be released before line tension occurs; whenever
possible weights of at least 6 kg mass should be used, spaced at 20 m
intervals.
(3) Longlines shall be set only at night (between the times of
nautical twilight). During longline fishing at night, only the minimum
ship's lights necessary for safety shall be used. Wherever possible,
setting of lines should be completed at least 3 hours before dawn (to
reduce loss of bait to/catches of white-chinned petrels).
(4) The dumping of offal shall be avoided as far as possible while
longlines are being set or hauled; if discharge of offal is
unavoidable, the discharge must take place on the opposite side of the
vessel to that where longlines are set or hauled.
(5) Every effort should be made to ensure that birds captured alive
during longlining are released alive and that wherever possible hooks
are removed without jeopardizing the life of the bird concerned.
(6) A streamer line designed to discourage birds from settling on
baits during deployment of longlines shall be towed. Specification of
the streamer line is given in Figure 2 to part 380. Details of the
construction relating to the number and placement of swivels may be
varied so long as the effective sea surface covered by the streamers is
no less than that covered by the currently specified design. Details of
the device dragged in the water in order to create tension in the line
may also be varied.
(7) The streamer line is to be suspended at the stern from a point
approximately 4.5 m above the water and such that the line is directly
above the point where the baits hit the water.
(8) The streamer line is to be approximately 3 mm diameter, have a
minimum length of 150 m and have a device at the end to create tension
so that the main line streams directly behind the ship even in cross
winds.
(9) At 5 m intervals commencing from the point of attachment to the
ship five branch streamers each comprising two strands of approximately
3 mm cord should be attached. The length of the streamer should range
between approximately 3.5 m nearest the ship to approximately 1.25 m
for the fifth streamer. When the streamer line is deployed the branch
streamers should reach the sea surface and periodically dip into it as
the ship heaves. Swivels should be placed in the streamer line at the
towing point, before and after the point of attachment of each branch
streamer and immediately before any weight placed at the end of the
streamer line. Each branch streamer should also have a swivel at its
attachment to the streamer line.
[[Page 8489]]
(10) Variations in the design of the streamer lines may be tested
on vessels carrying two observers, at least one appointed in accordance
with the CCAMLR Scheme of International Scientific observation,
providing that all other elements of this paragraph are complied with.
The streamer lines under test should be constructed and operated taking
full account of principles developed by the CCAMLR Working Group on
Incidental Mortality Arising from Longline fishing (WG-IMALF) and
available from the AERG. Testing should be carried out independently of
actual commercial fishing and in a manner consistent with Sec. 380.30
on exploratory fisheries.
(b) The use of net monitor cables on harvesting vessels in the
Convention Area (Figure 1 to part 380) is prohibited.
(c) The use of bottom trawls in the directed fishery for C. gunnari
in statistical subarea 48.3 from November 3, 1995, through November 1,
1996, is prohibited.
(d) The use of any gear, except trawls, in the fisheries for C.
gunnari and D. eleginoides in statistical subdivision 58.2.2 is
prohibited.
(e) The use of any gear, except longlines, in the directed fishery
for D. eleginoides in statistical subarea 48.3 from November 3, 1995,
through November 1, 1996, is prohibited.
(f) The use of any gear, except longlines, in the directed fishery
for D. eleginoides in statistical subarea 48.4 from November 3, 1995,
through November 1, 1996, is prohibited.
(g) The use of any gear, except crab pots (traps), in the crab
fishery in statistical area 48 from November 3, 1995, through November
1, 1996, is prohibited.
Figure 2 [Redesignated as Appendix A to Part 380; Amended]
7. Figure 2 to part 380 is redesignated as Appendix A to part 380
and Table 2 to newly redesignated Appendix A is removed.
Figure 3 [Redesignated as Appendix B to Part 380]
8. Figure 3 to part 380 is redesignated as Appendix B to part 380
and revised to read as follows:
Appendix B to Part 380--Data Requirements for the Crab Fishery in
Statistical Subarea 48.3
I. Catch and Effort Data
(1) Cruise Descriptions: Cruise code, vessel code, permit
number, year.
(2) Pot Descriptions: Pot shape, dimensions, mesh size, funnel
attitude, number of chambers, presence of an escape port.
(3) Effort Descriptions: Date, time, latitude, and longitude of
the start set, compass bearing of the set, total number of pots set,
spacing of pots on the line, number of pots lost depth, soak time,
bait type.
(4) Catch Descriptions: Retained catch in numbers, bycatch of
all species, incremental record number for linking with sample
information.
II. Data Requirements for Bycatch Species in the Exploratory Crab
Fishery in Statistical Subarea 48.3
------------------------------------------------------------------------
Species Data requirements
------------------------------------------------------------------------
Dissostichus eleginoides.................. Numbers and estimated total
weight.
Notothenia rossii......................... Numbers and estimated total
weight.
Other species............................. Estimated total weight.
------------------------------------------------------------------------
III. Biological Data
For these data, crabs are to be sampled from the line hauled
just prior to noon, by collecting the entire contents of a number of
pots spaced at intervals along the line so that between 35 and 50
specimens are represented in the subsample.
(1) Cruise Descriptions: Cruise code, vessel code, permit
number.
(2) Sample Descriptions: Date, position at the start of the set,
line number.
(3) Data: Species, sex, length of at least 35 individuals,
presence/absence of rhizocephalan parasites, record of the
destination of the crab (kept, discarded, destroyed), record of the
pot numbers from which the crab come.
9. In part 380, the words ``Figure 2'' and ``Figure 3'' are removed
wherever they appear and the words ``Appendix A'' and ``Appendix B''
are added in their place, respectively.
10. A new Figure 2 is added to part 380 to read as follows:
BILLING CODE 3510-22-W
[[Page 8490]]
[GRAPHIC] [TIFF OMITTED] TR05MR96.003
Figure 2 to Part 380--The Use of Streamer Lines to Minimize the
Incidental Mortality of Seabirds in the Course of Longline Fishing or
Longline Fishing Research Operations in the Convention Area (see
Sec. 380.27 for specifications on use)
[FR Doc. 96-4756 Filed 2-29-96; 3:19 pm]
BILLING CODE 3510-22-C
Complete official Federal Register PDF
FR Doc. 96-4723 Channel Exclusivity to Qualified Private Paging Systems at 929- 930 MHz
[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Pages 8478-8483]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4723]
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 90
[PR Docket No. 93-35; FCC 96-53]
Channel Exclusivity to Qualified Private Paging Systems at 929-
930 MHz
AGENCY: Federal Communications Commission.
ACTION: Final Rule.
-----------------------------------------------------------------------
SUMMARY: In this Memorandum Opinion and Order, the Commission reviews
six petitions for reconsideration and/or clarification of the PCP
Exclusivity Order in this docket establishing channel exclusivity for
qualified local, regional, and nationwide paging systems in the 929-930
MHz band, and grants the petitions in part and denies them in part. The
petitions requesting exclusivity to regional 929 MHz systems in regions
defined by state borders, rather than based on their actual service
areas, are denied. The petitions that seek to increase the maximum
transmitter power for local and regional systems are granted.
Additionally, the Commission partially grants certain pending waiver
requests of incumbent licensees seeking additional time to comply with
multi-frequency transmitter specifications. The intended effect of this
order is to affirm that exclusivity to regional 929 MHz systems is
granted based on the service area as set forth in the PCP Exclusivity
Order and to amend the rules to facilitate the rapid and efficient
licensing of paging in the 929-930 MHz band. These amendments to the
regional channel exclusivity scheme established in the PCP Exclusivity
Order will facilitate the development of seamless, wide-area 900 MHz
paging systems.
EFFECTIVE DATE: April 4, 1996.
FOR FURTHER INFORMATION CONTACT: Mika Savir, Commercial Wireless
Division, Wireless Telecommunications Bureau, at (202) 418-0620.
SUPPLEMENTARY INFORMATION: This Memorandum Opinion and Order in PR
Docket No. 93-35; RM Docket 7986, adopted February 8, 1996, and
released February 13, 1996, 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 (202) 857-
3800.
Synopsis of Memorandum Opinion and Order
I. Introduction
Before the Commission are six petitions for reconsideration and/or
clarification of our PCP Exclusivity Order, Amendment of the
Commission's Rules to Provide Channel Exclusivity to Qualified Private
Paging Systems at 929-930 MHz, Report and Order, PR Docket No. 93-35,
58 FR 62289 (November 26, 1993) (PCP Exclusivity Order), establishing
channel exclusivity for qualified local, regional, and nationwide
paging systems in the 929-930 MHz band. After reviewing the issues
involved, the Commission grants the petitions in part and denies them
in part. In particular, the Commission denies petitions requesting that
exclusivity be granted to regional 929 MHz systems in regions defined
by state borders, rather than based on their actual service areas. The
Commission partially grants those petitions that seek to increase the
maximum transmitter power for local and regional systems. The
Commission also partially grants certain pending waiver requests of
incumbent licensees seeking additional time to comply with the multi-
frequency transmitter specifications. The Commission otherwise affirms
the rules governing 929 MHz private paging as adopted in the PCP
Exclusivity Order.
Additionally, the Commission is adopting a Notice of Proposed Rule
Making in WT Docket No. 96-18, 61 FR 6199 (February 16, 1996) to
examine ways to promote continued growth of the paging industry. In the
Notice of Proposed Rulemaking, the Commission proposes to adopt new
rules providing that future licensing of all exclusive paging channels,
including 929 MHz channels, will be based on market-defined service
areas, with mutually exclusive applications to be resolved by
competitive bidding. Therefore, the conclusions reached in this
Memorandum Opinion and Order are subject to future modification based
on
[[Page 8479]]
the outcome of the comprehensive paging rulemaking.
II. Background
PCP Exclusivity Order. In the PCP Exclusivity Order, the Commission
implemented a system of exclusive licensing for qualified local,
regional, and nationwide 929 MHz private paging systems on 35 of 40
available channels. Prior to this action, all private paging
frequencies, including those at 929 MHz, were assigned on a non-
exclusive basis. The PCP Exclusivity Order concluded that enabling 929
MHz paging systems to operate on an exclusive basis is in the public
interest, due to the efficiencies and incentives such an approach
encourages in the marketplace. Specifically, the Commission indicated
that continued sharing of frequencies would undermine efficient use of
929 MHz paging channels as demand for paging services expands in the
future. The Commission observed that, while sharing is technically
feasible, dividing air time among multiple licensees imposes
significant constraints on the efficiency and quality of service in
crowded markets. The Commission also indicated that in a shared
environment, licensees are reluctant to invest in advanced paging
technology because of the risk that others will be assigned to the same
frequency in the future. The Commission concluded that exclusivity
would create a stable, predictable environment necessary for the
industry to attract investment in wide-area, high capacity paging
systems in the 929-930 MHz band.
The PCP Exclusivity Order established the requirements for
licensees to obtain channel exclusivity in the 929 MHz band. In
particular, the Commission established minimum standards for the
configuration of protected systems, including the number of
transmitters required for local, regional, and nationwide systems, and
the treatment of multi-frequency transmitters. The Commission also
implemented geographic separation standards for placement of co-channel
stations, to protect qualified local or regional systems, and
established effective radiated power (ERP) limits for all such systems.
The PCP Exclusivity Order also set forth other prerequisites to
obtaining exclusivity. Most notably, the Commission conditioned
exclusivity on construction of a qualified system within eight months
of licensing. For larger systems, the Commission indicated that a new
applicant may request an extension of up to three years, based on its
showing of need, a construction timetable, and its establishment of an
escrow account or securing of a performance bond to cover construction
costs. Other matters addressed in the PCP Exclusivity Order include
issues associated with application of exclusivity to existing systems
and to future licensing, and certain transitional procedures. In
particular, the Commission grandfathered all existing systems and
indicated that it would grant immediate exclusivity to existing systems
that satisfied the new exclusivity criteria.
Petitions for Reconsideration/Waivers. The Commission received
petitions for reconsideration of the PCP Exclusivity Order from the
following businesses and organizations: (1) the National Association of
Business and Educational Radio and its Association for Private Carrier
Paging Section (NABER); (2) First American National Paging (First
National); (3) Afro-American Paging, Inc. (AAP); (4) American
Mobilephone, Inc. (AMI); (5) Paging Network, Inc. (PageNet); MAP Mobile
Communications, Inc. (MAP); and (6) Metrocall, Inc. The Commission has
sought and received comment on the issues raised by these petitions.
Some parties also have filed petitions asking that various provisions
of the new exclusivity rules be waived to accommodate specific hardship
situations. These requests generally involve waiver of the construction
requirements, ERP limits, or system configuration rules. For the most
part, the Commission will decide these waiver requests in other
proceedings. The Commission partially grants the waiver requests of
certain grandfathered licensees seeking time to convert their systems
from multi-frequency transmitter to single-frequency transmitter
operations for exclusivity purposes.
III. Discussion
A. Configuration of Local Systems
Background. To qualify for channel exclusivity under the 929 MHz
paging rules, the PCP Exclusivity Order provided that a local system
must consist of at least six contiguous transmitters, except in the New
York, Los Angeles, and Chicago markets, where 18 contiguous
transmitters are required. The Commission also provided that
transmitters will be considered contiguous if (1) each transmitter is
located within 25 miles of at least one other transmitter in the
system; (2) the combined area defined by a 12.5 mile radius around each
transmitter forms a single contiguous area; and (3) no transmitter is
co-located with any other transmitter being counted as part of the
local system.
Petitions for Reconsideration/Comments. On reconsideration, AAP
challenges Section 90.495 (a)(1)(ii) of the rules, as adopted in the
PCP Exclusivity Order, which requires that a 12.5 mile radius
surrounding each transmitter form a single contiguous area. AAP argues
that there was no notice of this rule change, because the restriction
was not part of our original proposal and is not a logical outgrowth of
the PCP Exclusivity Notice, Amendment of the Commission's Rules to
Provide Channel Exclusivity to Qualified Private Paging Systems at 929-
930 MHz, Notice of Proposed Rulemaking, PR Docket No. 93-35, 58 FR
17819 (April 6, 1993) (PCP Exclusivity Notice). AAP claims that as a
result of the added 12.5 mile radius requirement, one of its systems
now is disqualified from obtaining exclusivity. AAP contends that if it
is the Commission's goal to confine systems to smaller geographic
areas, a 15 mile radius standard is more equitable. The Commission has
received no comments on AAP's reconsideration proposal.
Decision. The Commission will not eliminate or alter the
requirement for local exclusivity that requires that a 12.5 mile radius
surrounding each transmitter form a single contiguous area. The 12.5
mile rule is a necessary component of the exclusivity rules, because it
ensures that a local system will serve a contiguous geographic area.
Without such a requirement, licensees could obtain local exclusivity
based on non-contiguous placement of transmitters, undermining the
Commission's effort to establish truly local systems serving an
indigenous locale or community. Proportionately, the 12.5 mile distance
is one-half the distance of the 25 mile rule, and thereby works well to
ensure that transmitters are located to serve a single contiguous
geographic territory.
While the 12.5 mile rule was not expressly included in the PCP
Exclusivity Notice, the Commission believes that this restriction
nonetheless is a ``sufficiently minor'' difference from the rule
proposed to be a ``logical outgrowth'' of the Commission's efforts to
establish a system of local exclusivity. The PCP Exclusivity Notice
sought comment on the configuration of locally protected systems.
Specifically, the Commission proposed that each transmitter in a
qualified system would have to be within 25 miles of another
transmitter to count toward the number required for exclusivity.
Incorporation of the 12.5 mile restriction in the final rules
constitutes a minor, technical
[[Page 8480]]
change to the original proposal, which is necessary to ensure that
local exclusivity is awarded to operators that locate transmitters in
close proximity to one another within a system. The 12.5 mile rule
effectively closes a loophole in the original proposal, and comports
with the Commission's intent to create local paging systems in the 929-
930 MHz band. Only AAP has objected to the change, apparently based on
its own unique situation, that one of its transmitters is 13.2 miles
from the nearest other transmitter, which is best resolved by a request
for waiver.
B. Configuration of Regional Systems
Background. The PCP Exclusivity Order provided protection for
exclusive regional systems based on the location of stations comprising
the system. To qualify for exclusivity, a regional system must consist
of 70 or more transmitters, not necessarily contiguous, located in no
more than twelve adjacent states in the continental United States. The
rules provide regional systems with exclusivity based on a prescribed
separation distance around each of the regional licensee's stations,
ranging from 112 to 187 kilometers (70 to 116 miles) depending on the
class of the station. Also, in each of the top thirty markets,
specified in Section 90.741 of the Commission's rules, no transmitter
may be counted as part of a regional system unless it also meets the
requirements for local exclusivity in that market. Petitions for
Reconsideration/Comments. NABER and PageNet argue that the geographic
scope of exclusivity granted to 929 MHz regional systems should be
based on state borders, rather than the location of the system's
stations. According to NABER, allowing regional paging systems
statewide exclusivity in each state in which the system provides
service is needed to promote the development of regional systems. NABER
and PageNet also express concern that under the current rules,
speculators can file applications in strategic locations designed
solely to extract payment from regional systems seeking to expand their
coverage. NABER therefore recommends that the Commission grant regional
applicants (i.e., applicants proposing a system of 70 or more
transmitters) exclusivity extending to the borders of any state in
which the applicant constructs at least one transmitter, except that in
states having markets listed among the top 30, the applicant must
construct six or 18 transmitters, depending on the size of the market.
NABER also requests that the Commission permit regional licensees to
locate transmitters anywhere within any state included in the system,
as long as they maintain the required geographic separation from
facilities in adjoining regions.
AMI and ADC express concern about the application of NABER's
proposal to licensees who are entitled to regional exclusivity under
our existing rules. In general, these commenters are opposed to any
change that would result in divesting licensees of existing exclusivity
rights. ADC suggests that the Commission not apply statewide
exclusivity to licensees whose applications (including those for local
exclusivity) were received by NABER for coordination on or before March
31, 1994, at least where a portion of the involved local system was
constructed and in operation before October 14, 1993.
ARCH, API, and Airtouch, on the other hand, favor statewide
exclusivity for licensing as proposed by NABER and PageNet. According
to these commenters, permitting licensees to achieve exclusivity on a
statewide basis is essential to the development of truly regional
systems. Airtouch and ARCH believe AMI and ADC's opposition to
statewide exclusivity stems from the unique market situation of these
licensees, and contend that the appropriate remedy for AMI and ADC is a
waiver, not a decision to retain the status quo.
Decision. The Commission declines to reconsider the rules defining
regional exclusivity for 929 MHz regional systems in this proceeding.
The Commission is considering the issue of revising the paging
licensing area definitions in a separate Notice of Proposed Rule Making
on market-area licensing. Under the market-area licensing proposal,
paging systems in general, including 929 MHz systems, no longer would
be licensed on a station-by-station basis. Instead, licensees would be
licensed within Commission-defined service areas, and would be afforded
the same flexibility, to the extent feasible, as cellular and PCS
licensees to locate, design, construct, and modify system facilities
throughout those areas. Because the Commission is addressing this issue
in a broader context than 929 MHz paging alone, it is premature to
modify the rules for this single category of paging service in response
to NABER's reconsideration petition.
Moreover, the Commission is not persuaded that paging licensing
areas should be based on state borders, as NABER proposes. In all other
services where Commission-defined licensing areas have been adopted, as
opposed to station-by-station licensing, the Commission has used
licensing area definitions based on economic markets or trading areas
(e.g., MSAs/RSAs for cellular, and MTAs/BTAs for PCS and 900 MHz SMR).
By contrast, using state borders would create licensing areas with
political boundary lines which do not necessarily correspond to
economic markets or trading areas and, in some instances, which may cut
across them. The Commission therefore concludes that the status quo
should prevail while alternative licensing area definitions more
consistent with our approach in other services are considered.
C. Effective Radiated Power
Background. In the PCP Exclusivity Order, the Commission
established effective radiated power (ERP) limits of 1000 watts for
local and regional 929 MHz systems and 3500 watts for nationwide
systems. The Commission noted that the 3500 watt limit for nationwide
systems was the same as the limit for nationwide common carrier paging
systems in the 931 MHz band. The Commission declined to adopt a 3500
watt limit for non-nationwide systems, notwithstanding the fact that
the Part 22 rules then in effect allowed 931 MHz non-nationwide common
carrier licensees to operate internal system sites at 3500 watts. The
Commission reasoned that higher power limits for 931 MHz licensees were
justified because demand for 931 MHz licenses largely was confined to
expansion by existing systems. The Commission concluded that a 1000
watt maximum for 929 MHz non-nationwide systems was appropriate to
preserve opportunities for entry by new systems.
Petitions for Reconsideration/ Comments. NABER and PageNet request
that the Commission increase the maximum ERP for 929 MHz regional
systems from 1000 watts to 3500 watts, provided that adjacent co-
channel systems remain protected. NABER claims that, in the context of
the statewide regional licensing scheme it has proposed, a 3500 watt
power limit would not restrict opportunities for the entry of new
systems into the market, which was the reason the Commission rejected a
3500 watt ERP previously. According to NABER and PageNet, use of high-
power transmitters within the boundaries of a regional system will
enable licensees to offer superior service at a lower cost. Celpage,
ARCH, Airtouch, and API support NABER's proposal.
MAP seeks clarification on whether the 1000 watt ERP restriction
applies only to facilities that define the exterior of the licensee's
service area, and whether higher power facilities are
[[Page 8481]]
permitted at internal sites within existing service areas. MAP observes
that 931 MHz common carrier paging licensees are permitted to operate
at 3500 watts ERP at internal sites within their service areas. MAP
asserts that principles of regulatory parity require us to apply the
same rule to private paging systems. The Commission received no
comments on MAP's request for clarification.
Decision. Except in certain limited circumstances discussed below,
the Commission declines to raise the maximum ERP for non-nationwide 929
MHz systems at this time. NABER's proposal to raise the ERP limit is
premised on the Commission adopting its proposal to base regional
exclusivity on state borders, rather than site location. The Commission
has declined to reconsider the definition of regional exclusivity,
therefore NABER's rationale for raising the ERP limit does not apply.
The Commission's decision on this issue does not preclude future
changes to the rules if the Commission adopts some form of market-based
licensing for 929 MHz channels. The Commission seeks further comment on
height and power limits for common carrier and private carrier paging
in the Notice of Proposed Rule Making.
The Commission agrees with commenters that under certain
circumstances, allowing local and regional 929 MHz licensees to operate
at greater than 1000 watts ERP may be appropriate. Specifically, if
operation of sites at a higher power would not expand a licensee's
existing service-area contour, there is no reason to prohibit operation
at such higher power. The Commission will modify the rules to allow
non-nationwide licensees to operate sites within their existing service
area at up to 3500 watts ERP, provided that such operation does not
increase the minimum geographic separation applicable to co-channel
systems under Section 90.495(b)(2) of the Commission's rules. This will
give licensees greater flexibility to build technically and
economically efficient systems, without compromising opportunities for
co-channel entry in areas adjacent to those systems.
D. Slow Growth Eligibility
Background. In the PCP Exclusivity Order, the Commission adopted
rules allowing for so-called ``slow growth'' extensions of the eight-
month construction requirement for larger system applicants.
Specifically, for applications filed after October 14, 1993, a period
of up to three years may be authorized for construction and
commencement of operations if the proposed system is composed of more
than 30 transmitters and the applicant submits specific justification
for an extended implementation period. Applicants must provide a
detailed construction timetable and evidence of the ability to fund
construction, either in the form of a construction escrow account or a
performance bond covering construction costs.
Petitions for Reconsideration/Comments. NABER, PageNet, Metrocall,
First National Paging, and AMI challenge the Commission's decision to
make the three-year slow-growth option available only to post-October
14, 1993 paging applicants. NABER contends that the Commission did not
provide adequate notice of the rule, because the PCP Exclusivity Notice
did not expressly propose to limit the slow growth option to new
applicants. According to NABER, the restriction has a detrimental
impact on existing licensees because of the added construction demands
posed by the Commission's treatment of multi-frequency transmitters
under the exclusivity rules. AMI suggests that slow-growth eligibility
be extended to licensees who filed for exclusivity after the March 31,
1993 release date of the PCP Exclusivity Notice, rather than limited to
applicants filing after the October 14, 1993 date established in the
PCP Exclusivity Order. According to AMI, there is no link between the
October 14, 1993 date and the decision by any affected licensee to
rebuild its facilities.
Commenters generally support extending the slow growth option to
grandfathered licensees on the grounds that additional construction
time is needed for incumbents to transition to our new system of
channel exclusivity. Celpage, however, is concerned about the treatment
of licensees who relied on single-frequency, as opposed to multi-
frequency, transmitters. Celpage does not want operators that decided
to build dedicated facilities at each licensed site, rather than to
rely on inter-carrier agreements allowing them to utilize other
licensees' dual-frequency transmitters, to be penalized under an
extended transition period. Celpage therefore seeks reinstatement of
certain ``single use'' transmitter licenses, whose authorizations
expired while the exclusivity rules were under consideration. Arch and
Airtouch support a slow growth period for existing licensees, but argue
that the bond and escrow requirements for new construction should not
apply in such cases.
Decision. The Commission will not change the rules to make pre-
October 14, 1993 applicants automatically eligible for the extended
implementation construction schedule. October 14, 1993, the date of the
Sunshine Notice on the PCP Exclusivity Order, is the cutoff date for
slow growth eligibility. The Commission will deny slow growth
extensions to grandfathered licensees generally. As of our Sunshine
Notice on October 14, 1993, applicants reasonably could anticipate that
the Commission was going to adopt channel exclusivity rules for 929-930
MHz paging licensees. To deter speculative filings, therefore, the
Commission decided not to grandfather anyone that filed after October
14, 1993. The date for dividing ``old'' from ``new'' applicants also is
the appropriate date for triggering slow growth eligibility. Moreover,
the Commission never suggested that slow growth extensions would apply
to grandfathered licensees. Indeed, in an April 6, 1993 Order,
Amendment of the Commission's Rules to Provide Channel Exclusivity to
Qualified Private Paging Systems at 929-930 MHz, Order, PR Docket No.
93-35, 58 FR 21111 (April 19, 1993) (Order), the Commission indicated
that all parties in the application and coordination process were
expected to comply with existing eight-month construction requirements
while the rule making was underway. Consequently, applicants falling
into the grandfathered category cannot legitimately claim that they
expected to be eligible for slow growth extensions.
E. Multi-Frequency Transmitters
Background. In the PCP Exclusivity Order, the Commission considered
the issue of whether licensees should be allowed to count multi-
frequency transmitters for exclusivity purposes on more than one
channel. The Commission concluded that licensees should not be barred
from using multi-frequency transmitters, but that each such transmitter
would be counted only once for exclusivity purposes. This requirement
was to ensure that licensees would not claim exclusivity on multiple
channels by repeatedly counting the same transmitter. The Commission
noted that a licensee using multi-frequency transmitters could qualify
for exclusivity on two frequencies by constructing twice the number of
transmitters required to obtain one channel.
Petitions for Reconsideration/Comments. Several parties urge the
Commission to relax the ``single-count'' rule to accommodate incumbent
licensees who had constructed systems based on multi-frequency
transmitters prior to the adoption of the PCP Exclusivity Order. NABER
argues that these licensees need time to construct
[[Page 8482]]
sufficient single-frequency transmitters to comply with the exclusivity
requirements on a single-count basis. PageNet suggests that existing
licensees be given two years from the time they qualify for earned
exclusivity to make this conversion. First National Paging suggests
establishing a reasonable transition period for incumbent licensees,
beyond the existing eight-month construction requirement.
In addition to reconsideration petitions on this issue, the
Commission has received waiver requests from Arch, Comtech, First
National Paging, Metrocall, Airtouch, and Message Center Beepers. At
the time the PCP Exclusivity Order became effective, each of these
petitioners was operating systems on dual channels using multi-channel
transmitters. The number of transmitters in place in each system is
sufficient to qualify for regional or nationwide exclusivity on one
channel, but under the single-count rule petitioners would be required
to construct additional sites to obtain protection for their operations
on the second channel. Because their construction plans prior to the
PCP Exclusivity Order relied on use of dual-channel transmitters,
petitioners request twenty-four months rather than eight months to
reconfigure their systems and construct additional sites to meet the
requirements of the single-count rule.
Decision. The Commission declines to modify the general rule that
no transmitter may be counted more than once for exclusivity purposes.
This rule prevents the potential hoarding of multiple frequencies, by
requiring paging licensees seeking more than one exclusive frequency to
meet a higher construction threshold. Licensees may continue to use
multi-frequency transmitters in their systems, but exclusivity will be
conferred on multiple channels only if the total number of transmitters
is sufficient to qualify for exclusivity on each channel on a single-
count basis.
The Commission will grant some additional time to those
grandfathered licensees who have filed waiver requests to bring
existing systems into compliance with the single-count rule. Prior to
the adoption of the PCP Exclusivity Order, these licensees had embarked
on construction and operation of substantial systems relying on dual-
frequency transmitters. The adoption of the single-count rule required
these licensees to modify their plans to add additional transmitters in
order to gain full exclusivity protection for their existing systems.
The Commission believes that a reasonable time should be afforded to
petitioners to make this adjustment. The Commission notes that the risk
of allowing hoarding of frequencies is not present here, because the
systems at issue already are grandfathered on both channels,
petitioners substantially have constructed their systems and are
providing service to the public on a dual-channel basis, and the
additional construction needed will promote increased coverage and
better quality service.
The petitioners filed their initial requests for a twenty-four
month construction period in early 1994. Since that time, petitioners
have had substantial opportunity to construct additional facilities on
a single-frequency transmitter basis to bring their systems into
compliance. The Commission concludes that because of this elapsed time,
petitioners should be granted an amount of time consistent with their
original estimate of the time required to bring their systems into
compliance. The Commission grants Arch, Comtech, First National Paging,
Metrocall, Airtouch, and Message Center Beepers until six months after
the publication date of this Memorandum Opinion and Order in the
Federal Register to demonstrate that their grandfathered systems
qualify for exclusivity on a single-count basis.
F. Modification of Existing Systems
Background. In the PCP Exclusivity Order, the Commission concluded
that all existing 929 MHz licensees should be grandfathered under the
new rules whether or not they qualified for exclusivity. Thus,
incumbent systems that did not qualify for exclusivity would be allowed
to continue operating their existing facilities, and any licensee
granted exclusivity on the same channel in the same area would be
required to share the channel with the grandfathered system.
Grandfathered systems would not be allowed to add new facilities to
their systems, however, if such expansion conflicted with exclusivity
rights granted to another licensee.
Petitions for Reconsideration/ Comments. MAP contends that the
Commission should allow grandfathered licensees who do not qualify for
exclusivity to modify their existing systems in order to continue
service to subscribers. MAP argues that allowable modifications should
include changes in the number of paging receivers, type of emission,
antenna height, power, class of station, ownership or corporate
structure, and location of existing facilities. API opposes MAP's
proposal. API believes that minor and reasonable modifications to
existing facilities should be allowed, but that other changes should
not be permitted, particularly if the effect is to diminish or impair
the development of a co-channel system which already has qualified for
exclusivity in the same area. MAP replies that it is not asking to
expand the rights of grandfathered licensees, but only is seeking a
clarification of the types of ``minor'' modifications that the FCC will
allow. MAP does not want the rules interpreted in a manner that hampers
the ability of existing licensees to improve service, respond to
customer needs, and adjust to business changes.
Decision. The rules provide that grandfathered licensees who do not
qualify for exclusivity may make modifications to existing facilities
that do not impair the exclusivity rights of co-channel licensees or
otherwise violate our rules. There is no reason to change this rule,
based on MAP's petition. This issue is raised more broadly in the
Notice of Proposed Rule Making in WT Docket No. 96-18. Therefore, the
Commission will defer additional consideration of the issues raised by
MAP to that proceeding.
G. Miscellaneous
In the PCP Exclusivity Order, the Commission addressed the issue of
conditional operation of 929-930 MHz stations located above ``Line A,''
i.e., within 250 miles of the Canadian border. Noting that a 1992
agreement between the Commission and Canada's Department of
Communications had eliminated the need for international coordination
of these channels, the Commission stated that it would allow operation
of 929 MHz stations above Line A, provided all other requirements of
the rules are met. Some licensees have misconstrued this language in
the PCP Exclusivity Order to open all channels in the 929-930 MHz band
to operation by U.S. licensees above Line A. In fact, the 1992 U.S.-
Canada agreement provides that only channels between 929.5 and 930 MHz
may be used by U.S. licensees above Line A. To eliminate any possible
confusion, the Commission clarifies that operation above Line A (which
is now within 75 miles of the Canadian border) is allowed only on these
channels. In accordance with the 1992 agreement, no U.S. licensee may
operate conditionally or otherwise on channels from 929.0 MHz to 929.5
MHz.
IV. Conclusion
The Commission is amending the rules as described above to
facilitate the rapid and efficient licensing of paging in the 929-930
MHz band. The limited
[[Page 8483]]
amendments to the regional channel exclusivity scheme established in
the PCP Exclusivity Order will facilitate the development of seamless,
wide-area 900 MHz paging systems. Otherwise, the Commission affirms the
rules as adopted in the PCP Exclusivity Order.
V. Procedural Information
Regulatory Flexibility Analysis
Pursuant to the Regulatory Flexibility Act of 1980, the
Commission's final analysis is as follows:
A. Need for and Purpose of This Action
This Memorandum Opinion and Order makes amendments to Part 90 of
the Commission's rules relating to channel exclusivity for qualified
local, regional, and nationwide private paging systems on certain
channels at 929-930 MHz. The amendments will promote the efficient use
of paging channels by encouraging investment in new paging technology.
They also will foster the development of more efficient paging systems
on a local, regional, and nationwide basis.
B. Summary of Issues Raised by Public Comments in Response to the
Initial Regulatory Flexibility Analysis
Only one party, Radiofone, filed comments responding to the Initial
Regulatory Flexibility Analysis (IRFA). Radiofone argued that the
Commission has not adequately addressed the impact of the proposal on
small paging systems and that exclusive licensing will preclude small
business entry at 900 MHz. The Commission reviewed Radiofone's concerns
in the context of PCP Exclusivity Order. No additional comments have
been submitted.
C. Significant Alternatives Considered and Rejected
As the Commission determined in the PCP Exclusivity Order and
affirms in this Memorandum Opinion and Order, this action is fully
consistent with the Commission's small business policy objectives. The
Commission noted in the IRFA that this action imposes certain
conditions on the licensing of smaller 929-930 MHz paging systems, but
these requirements are not unduly burdensome. The new rules contain
significant benefits for small businesses by protecting dozens of small
existing systems in place, allowing many such systems to obtain
exclusivity, and creating opportunities for expansion and new entry by
small business licensees.
Ordering Clauses
It is ordered that pursuant to the authority of Sections 4(i),
303(g) 303(r), and 332(a) of the Communications Act of 1934, as
amended, 47 U.S.C. Secs. 154(i), 303(g), 303(r) and 332(a), 47 CFR Part
90, is amended as set forth below, effective April 4, 1996.
It is further ordered that the petitions for reconsideration filed
by National Association of Business and Educational Radio/ Association
for Private Carrier Paging Section, First National Paging Company,
Inc., Afro-American Paging, American Mobilephone, Inc., Paging Network,
Inc., MAP Mobile Communications, Inc. and Metrocall, Inc. are granted
to the extent described above and are denied in all other respects.
It is further ordered that the waiver requests filed by American
Mobilephone, Inc., Arch Communications Group, Inc., Comtech, Inc.,
First National Paging Company, Inc., Message Center Beepers, Inc.,
Metrocall, Inc. and PacTel Paging (now ``Airtouch Paging'') are granted
to the extent described above.
It is further ordered that, pursuant to the authority of Section
0.331 of the Communications Act of 1934, as amended, we delegate to the
Wireless Telecommunications Bureau the authority to address any request
for waiver of our exclusivity rules, which shall be evaluated based on
criteria set forth above.
It is further ordered that this proceeding is terminated.
List of Subjects in 47 CFR Part 90
Common carriers.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
Rule Amendments
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
1. The authority citation for Part 90 continues to read as follows:
Authority: Sections 4, 303, 48 Stat. 1066, 1082, as amended; 47
U.S.C. 154, 303, and 332, unless otherwise noted.
2. Section 90.494 is amended by revising paragraph (g) to read as
follows:
Sec. 90.494 One-way paging operations in the 929-930 MHz band.
* * * * *
(g) Stations operating as part of regional or local systems under
Sec. 90.495(a)(1) or (a)(2) may also operate sites within their
existing service area at a maximum effective radiated power of 3500
watts, provided that such an increase in power does not expand the
licensee's service-area contour, and the requirements of
Sec. 90.495(b)(2) are met as to any co-channel system that has
preexisting exclusivity rights.
[FR Doc. 96-4723 Filed 3-4-96; 8:45 am]
BILLING CODE 6712-01-P
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