issue-1996-09-30•Federal Register final rules — 1996-09-30
Federal Register final rules — 1996-09-30
issue-1996-09-30Federal Register final rules — 1996-09-30Regulation
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. 96-25056 Medicare and Medicaid Programs; Provider Appeals: Technical Amendments
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Page 51021]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25056]
[[Page 51021]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
42 CFR Part 498
[BPD-704-CN]
Medicare and Medicaid Programs; Provider Appeals: Technical
Amendments
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Correction notice.
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SUMMARY: Federal Register document 96-13521 beginning on page 32347 of
the issue of June 24, 1996, updated HCFA regulations that pertain to
provider appeals from determinations that affect participation in
Medicare and Medicaid.
The document contained a technical error in that it omitted a
section in the nomenclature changes for Part 498. This document
corrects that error.
EFFECTIVE DATE: July 24, 1996.
FOR FURTHER INFORMATION CONTACT: Julie Brown (410) 786-4669.
Correction
On page 32349, column 3, in change 2.b. for Part 498, Sec. 498.15
is added to the list of sections affected by the nomenclature change.
(Catalog of Federal Domestic Assistance Program No. 93.778, Medical
Assistance Program; No. 93.773 Medicare--Hospital Insurance Program;
and No. 93.774, Medicare--Supplementary Medical Insurance Program)
Dated: September 25, 1996.
Neil J. Stillman,
Deputy Assistant Secretary for Information Resources Management.
[FR Doc. 96-25056 Filed 9-27-96; 8:45 am]
BILLING CODE 4120-01-P
Complete official Federal Register PDF
FR Doc. 96-25055 Grants for Construction of Teaching Facilities, Educational Improvements, Scholarships, and Student Loans and Grants for Training of Public Health and Allied Health Personnel
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Page 51020]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25055]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Resources and Services Administration
42 CFR Parts 57 and 58
RIN 0906-AA38
Grants for Construction of Teaching Facilities, Educational
Improvements, Scholarships, and Student Loans and Grants for Training
of Public Health and Allied Health Personnel
AGENCY: Health Resources and Services Administration, HHS.
ACTION: Correction to final regulations.
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SUMMARY: This document contains corrections to the final rule that
revised existing regulations that govern various Public Health Service
(PHS) health professions, nursing, and allied health training grant,
traineeship, scholarship, and student loan program regulations under
title 42, parts 57 and 58 to bring these programs into conformity with
statutory amendments made to the various sections of the PHS Act under
titles VII and VIII. The final rule was published in the Federal
Register on Friday, February 16, 1996 (61 FR 6118).
EFFECTIVE DATE: September 30, 1996.
FOR FURTHER INFORMATION CONTACT: Jennifer Burks at (301) 443-1590 (not
a toll-free call).
SUPPLEMENTARY INFORMATION:
Need for Correction
As published on Friday, February 16, 1996, the final rule contained
errors which may prove to be misleading and are in need of
clarification.
Correction of Publication
Accordingly, the publication on February 16, 1996 of the final
rule, which was the subject of FR Doc. 96-3054, is corrected as
follows:
Sec. 57.711 [Corrected]
1. On page 6124, in the third column, in amendment 9 to
Sec. 57.711, in the third line, ``45 CFR part 75'' should read ``45 CFR
part 74''.
Sec. 57.1111 [Corrected]
2. On page 6125, in the first column, in amendment 7 to
Sec. 57.1111, in the third line, ``45 CFR part 75'' should read ``45
CFR part 74''.
Sec. 57.1609 [Corrected]
3. On page 6125, in the second column, in amendment 6 to
Sec. 57.1609, in the third line, ``45 CFR part 75'' should read ``45
CFR part 74''.
Sec. 57.1810 [Corrected]
4. On page 6126, beginning in the first column, in amendment 6 to
Sec. 57.1810, in the third line, ``45 CFR part 75'' should read ``45
CFR part 74''.
Sec. 57.2109 [Corrected]
5. On page 6126, in the third column, in amendment 7 to
Sec. 57.2109, in the third line, ``45 CFR part 75'' should read ``45
CFR part 74''.
Sec. 57.2809 [Corrected]
6. On page 6127, in the third column, in amendment 7 to
Sec. 57.2809, in the third line, ``45 CFR part 75'' should read ``45
CFR part 74''.
Sec. 57.2909 [Corrected]
7. On page 6128, beginning in the first column, in amendment 7 to
Sec. 57.2909, paragraph (a), third line, ``45 CFR part 75'' should read
``45 CFR part 74''.
Sec. 57.3010 [Corrected]
8. On page 6128, in the third column, in amendment 6 to
Sec. 57.3010, in the third line, ``45 CFR part 75'' should read ``45
CFR part 74''.
Sec. 57.3111 [Corrected]
9. On page 6129, in the first column, in amendment 6 to
Sec. 57.3111, in the third line, ``45 CFR part 75'' should read ``45
CFR part 74''.
Sec. 57.4009 [Corrected]
10. On page 6129, in the second column, in amendment 4 to
Sec. 57.4009, in the third line, ``45 CFR part 75'' should read ``45
CFR part 74''.
Sec. 58.214 [Corrected]
11. On page 6130, beginning in the second column, in amendment 10
to Sec. 58.214, in the third line, ``45 CFR part 75'' should read ``45
CFR part 74''.
Sec. 58.233 [Corrected]
12. On page 6131, in the second column, in amendment 13 to
Sec. 58.233, in the third line, ``45 CFR part 75'' should read ``45 CFR
part 74''.
Dated: September 25, 1996.
Neil Stillman,
Deputy Assistant Secretary for Information Resources Management.
[FR Doc. 96-25055 Filed 9-27-96; 8:45 am]
BILLING CODE 4160-15-P
Complete official Federal Register PDF
FR Doc. 96-25027 Redress Provisions for Persons of Japanese Ancestry: Guidelines for Individuals Who Relocated to Japan as Minors During World War II
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 51008-51012]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25027]
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DEPARTMENT OF JUSTICE
28 CFR Part 74
[AG Order No. 2056-96]
RIN 1190-AA42
Redress Provisions for Persons of Japanese Ancestry: Guidelines
for Individuals Who Relocated to Japan as Minors During World War II
AGENCY: Department of Justice.
ACTION: Final rule.
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SUMMARY: The Department of Justice (``Department'') hereby adopts a
change to the regulations governing redress provisions for persons of
Japanese ancestry. This change will amend the standards of the Civil
Liberties Act of 1988 to make eligible for payments of $20,000 those
persons who are otherwise eligible for redress under these regulations,
but who involuntarily relocated during World War II to a country with
which the United States was at war. In practice, this amendment will
make potentially eligible those persons who were evacuated, relocated,
or interned by the United States Government; who, as minors, relocated
to Japan or a country with which the United States was at war during
World War II, and otherwise were unemancipated and lacked the legal
capacity to leave the custody and control of their parents (or legal
guardians) who chose to relocate to Japan during the war; and who did
not enter active military service on behalf of the Japanese Government
or another enemy government during the statutorily-defined war period.
EFFECTIVE DATE: September 30, 1996.
FOR FURTHER INFORMATION CONTACT: Tink D. Cooper or Emlei M. Kuboyama,
Office of Redress Administration, Civil Rights Division, U.S.
Department of Justice, PO Box 66260, Washington, DC 20035-6260; (888)
219-6900 (voice) (toll-free) or (202) 219-4710 (TDD).
SUPPLEMENTARY INFORMATION:
I. Background
The Civil Liberties Act of 1988, Pub. L. 100-383 (codified at 50
U.S.C. app. 1989 et. seq., as amended) (``the Act''), enacted into law
the recommendations of the Commission on Wartime Relocation and
Internment of Civilians (``Commission'') established by Congress in
1980. See Commission on Wartime Relocation and Internment of Civilians
Act, Pub. L. 96-317 (1980). This bipartisan commission was established:
(1) To review the facts and circumstances surrounding Executive Order
9066, issued February 19, 1942, and the impact of that Executive Order
on American citizens and permanent resident aliens of Japanese
ancestry; (2) to review directives of United States military forces
requiring the relocation and, in some cases, detention in internment
camps of these American citizens and permanent resident aliens; and (3)
to recommend appropriate remedies. The Commission submitted to Congress
in February 1983 a unanimous report, Personal Justice Denied, which
extensively reviewed the history and circumstances of the decisions to
exclude, remove, and then to detain Japanese Americans and Japanese
resident aliens from the West Coast, as well as the treatment of Aleuts
during World War II. Redress Provisions for Persons of Japanese
Ancestry, 54 FR 34,157 (1989). The final part of the Commission's
report, Personal Justice Denied Part 2: Recommendations, concluded that
these events were influenced by racial prejudice, war hysteria, and a
failure of political leadership, and recommended remedial action to be
taken by Congress and the President. Id.
On August 10, 1988, President Ronald Reagan signed the Act into
law. The purposes of the Act were to acknowledge and apologize for the
fundamental injustice of the evacuation, relocation, and internment of
Japanese Americans and permanent resident aliens of Japanese ancestry,
to make restitution, and to fund a public education program to prevent
the recurrence of any similar event in the future. 50 U.S.C. app. 1989-
1989a.
Section 105 of the Act makes the Attorney General responsible for
identifying, locating, and authorizing payment of redress to eligible
individuals. Id. 1989b-4. The Attorney General delegated the
responsibilities and duties assigned to her to the Assistant Attorney
General for Civil Rights, who, in keeping with precedent, has
designated the Office of Redress Administration (ORA) in the Civil
Rights Division to carry out the execution of the responsibilities and
duties under the Act. The regulations governing eligibility and
restitution were drafted by ORA and published under the authority of
the Justice
[[Page 51009]]
Department in 1989. 54 FR 34,157 (1989) (final rule) codified at 28 CFR
Part 74).
ORA is charged with the responsibility of identifying and locating
persons eligible for redress under the Act. To date, restitution has
been paid to a total of 79,980 Japanese Americans and permanent
resident aliens of Japanese ancestry.
Section 108 of the Act articulates the standards for redress
eligibility. 50 U.S.C. app. 1989b-7(2). Among those excluded from
eligibility under that section are persons ``who, during the period
beginning on December 7, 1941, and ending on September 2, 1945,
relocated to a country while the United States was at war with that
country * * *'' Id. As part of a citizen exchange program during World
War II, the United States returned formerly interned persons of
Japanese ancestry to Japan on two occasions. On June 18, 1942,
approximately 1,083 persons of Japanese ancestry returned to Japan
aboard the M.S. Gripsholm, and on September 2, 1943, the Gripsholm
returned another 1,340 persons of Japanese ancestry to Japan. A number
of these persons asserted claims for redress based on their evacuation
and internment by the United States Government prior to their
relocation to Japan. However, based on section 108 of the Act and 28
CFR 74.4, ORA found them ineligible for redress. 54 FR 34,162 (1989).
In all, 175 persons who relocated to Japan aboard the Gripsholm claimed
compensation under the Act; approximately 124 of these claimants were
persons who were under the age of 21 upon their departure from the
United States. ORA's denial of redress to these claimants was upheld
during the administrative appeal process set forth in 28 CFR 74.17. 54
FR 34,164-65 (1989).
It is helpful to describe the circumstances of these individuals.
The West Coast voluntary evacuation period began with the issuance of
Proclamation No. 1, on March 2, 1942, and ended with the issuance of
Proclamation No. 4, effective on March 29, 1942. After this date,
persons of Japanese ancestry were prohibited from leaving the West
Coast because the Government was preparing to forcibly relocate and
intern them later. Over 120,000 Japanese Americans were eventually
interned. Of these 120,000, approximately 124 were minor children whose
parents decided to depart the United States for Japan during the war on
one of the M.S. Gripsholm sailings prior to September 2, 1945. The
majority of the passengers on the first sailing were Japanese
diplomats, while many of the passengers on the second sailing were
American citizens or permanent resident aliens. Also aboard were some
Japanese nationals who had left Japan to live and work in the United
States and who, by law, were ineligible to apply for United States
citizenship. Many of these individuals returned to Japan with their
American-born children.
These American children persevered through an arduous period during
which they were forcibly evacuated from their homes on the West Coast
and interned with their parents. The minors were unable legally to
return to their homes in the prohibited military zones on the West
Coast and were required to travel to Japan with their parents on a long
and difficult journey.
The loyalty of most of these American children, however, apparently
never waned. According to ORA research, the vast majority of them did
not enter into the active military service on behalf of an enemy
government during World War II. Furthermore, almost all returned to the
United States after the war. Out of the approximately 124 minors who
have filed for redress, and who relocated to Japan with their parents
during World War II, 108 subsequently returned to the United States,
while only 16 remained in Japan.
II. Responses to Public Comments
As a result of this revised interpretation, more fully discussed
below, the Civil Rights Division published a Notice of Proposed
Rulemaking in the Federal Register, 61 FR 29716 (June 12, 1996),
inviting the public to submit comments on this proposed category of
eligible persons. The comment period expired on July 12, 1996.
By the close of the comment period, the Division had received 1,152
timely comments. Of these comments, 1,096 were based on a form letter
which requested that the rulemaking process be expedited. Of the
remaining comments, 51 were from individuals, 3 were from various
organizations representing the interests of Japanese Americans, and 2
were from organizations that opposed this interpretation. Of these
original comments, 45 were in support of the revision while 11 comments
were against the revision. Also, a few comments were not timely filed
as indicated by the postmark and were not considered. The Department
read and analyzed each comment and considered the merits of the points
of view expressed in them.
The vast majority of comments indicated support for this provision.
The 1,096 form letters were favorable and requested that the regulatory
process be expedited. There were also 45 comments (42 individual
letters, 3 organization letters) in support of the amendment changes.
Twenty-eight of the letters supported the amendments and generally
asserted that the children of the internees suffered as much as their
parents had during the evacuation and relocation period, since the
children themselves were interned as well as being subjected to the
war-time conditions in Japan following their relocation. Several
letters echoed this sentiment and indicated that minors did not have
the ability to freely choose to relocate to Japan during the war, and
that the prisoner exchange was unjust. Several elected officials,
including U.S. Senator Paul Wellstone, favorably agreed with this
amendment. One person was in favor of this proposal but mistakenly
believed that anyone who returned to Japan at any time would now be
eligible; to the contrary, those persons who returned to Japan before
the start of World War II, remained in Japan throughout the war, will
remain ineligible.
In addition, there were several comments that opposed this revision
and indicated that the Act's original exclusionary language in section
108 should apply to all persons, regardless of age, who relocated to
Japan during World War II. There were 11 comments (9 individual
letters, 2 organization letters) opposed to making this category of
claimants eligible for redress. These comments raised four main issues:
(1) That it was wrong to extend redress solely to Japanese Americans
without extending compensation to those of German and Italian descent
and their children who were similarly situated; (2) that the American
children of Japanese parents were not forcibly removed from their
homes, but rather their parents as their natural guardians made the
decision for them; (3) that these children, American-born with Japanese
parents, had dual nationality and were technically citizens of Imperial
Japan under Japanese law, and were not American citizens; and (4) that,
in light of the federal government's current budgetary crisis, such
expensive outlays were not justified.
The Department has considered the merit of each of these comments
and disagrees with the viewpoints that were expressed. First, the
Department notes that it is compelled to comply with the laws
established by Congress and is fulfilling its mandate. In response to
the comments, the Department notes that the purpose of the Act was to
provide compensation for the injustices suffered by Japanese Americans
during World
[[Page 51010]]
War II as a result of specific Federal Government action based solely
on their Japanese ancestry. A Federal appeals court has determined that
Congress' decision to compensate only those of Japanese ancestry who
sustained deprivations of liberty or property as a result of defined
Federal Government actions during World War II survives constitutional
scrutiny. Jacobs v. Barr, 959 F.2d 313 (D.C. Cir.) cert. denied, 113
S.Ct. 95 (1992). In Jacobs, an American child of German ancestry, who
was detained in an internment camp during the war with his father but
was ineligible for redress under the Act, challenged the Act on equal
protection grounds. Jacobs argued that he was similarly situated with
respect to Japanese Americans who received compensation. The court
indicated that Congress found that there was no mass exclusion or
detention ordered against American citizens of German or Italian
descent. Id. at 319. It also concluded that the Act survived the
strictest level of scrutiny and that Congress' decision to compensate
Japanese Americans and not German Americans was ``substantially related
(as well as narrowly tailored) to the important (and compelling)
governmental interest of compensating those who were interned during
World War II because of racial prejudice.'' Id. at 321.
Second, one of the threshold requirements for eligibility under the
Act is U.S. citizenship or permanent residency status during the
defined statutory period. In each case, minor relocatees who will be
eligible for redress were American-born and meet the other criteria
required by the Act. It is contrary to the law to assert that children
born in the United States are not American citizens, but are
technically citizens of another country. The doctrine of ``jus soli,''
incorporated into the United States Constitution through the Fourteenth
Amendment, makes, with certain limited exceptions, all persons born in
the United States and subject to its jurisdiction citizens at birth.
See U.S. Const., amend. XIV, section 1; 8 U.S.C. 1401(a). (Persons born
to certain foreign diplomats in the United States do not necessarily
obtain U.S. citizenship at birth since their parents have diplomatic
immunity and are therefore not subject to the jurisdiction of the
United States.)
Third, we note that the minor relocatees did not make a knowing and
voluntary decision to relocate to Japan. The Department has concluded
that section 108 should not be construed to make ineligible for redress
those persons who relocated involuntarily. (See Section III for a
detailed legal discussion of this issue.) Finally, Congress
appropriated funds to provide redress to these claimants and the
Department is fulfilling its designated role.
The Department reviewed and analyzed each comment and considered
the merits of the points of view expressed in them. Substantive changes
were not made in the proposals, but other non-substantive changes were
made in order to provide further clarification of this amendment.
III. Revised Interpretation
Following publication of the draft regulations in 1989, the
Department received 61 comments concerning the eligibility of persons
who, as minors, relocated to Japan aboard the Gripsholm. Based on the
comments received at that time, however, it found no reason to
differentiate between adults who returned to Japan during World War II
and minors. As a result, in the preamble of the final regulation, the
Department stated that ``the exclusionary language of the Act would
preclude from eligibility the minors, as well as adults, who were
relocated to Japan during [the relevant] time period.'' 54 FR 34,160
(1989).
The Department, based on an argument not previously presented, now
revises its interpretation regarding the eligibility of persons who
relocated to Japan during World War II. Specifically, it revises its
determination of eligibility with regard to persons who were under the
age of 21 and not emancipated as of their dates of departures from the
United States, who did not participate in the active military service
on behalf of an enemy government during World War II, and who are
otherwise eligible for redress under these regulations.
In effecting this revision, the Department is operating within the
established framework of Chevron versus N.R.D.C., 467 U.S. 837, 842-43.
Under Chevron, an agency must give effect to the unambiguously
expressed intent of Congress when interpreting a statute. However,
where an act is silent or ambiguous with respect to a specific issue,
Congress has assigned to the agency the responsibility to elucidate a
specific provision of the statute by regulation. Id. at 843-44. For the
reasons set forth below, the Department believes that the proscription
of section 108 is ambiguous with respect to its coverage of the class
of individuals described above, and that the revision is a reasonable
interpretation of the statute.
As enacted, section 108 expressly excludes from eligibility ``any
individual who, during the period beginning on December 7, 1941, and
ending on September 2, 1945, relocated to (another) country while the
United States was at war with that country.'' 50 U.S.C. app. 1989b-7
(emphasis added). This language does not specifically resolve whether
the exclusion applies to individuals who relocated involuntarily.
This issue is suggested on the face of the statute when it is read
as a whole because, while the statute uses the active voice in section
108's exclusion clause, the eligibility clauses of the statute use the
passive voice. For example, section 108 begins by defining an
``eligible individual'' as a person of Japanese ancestry ``who, during
the evacuation, relocation and internment period-- * * * was confined,
held in custody, relocated, or otherwise deprived of liberty or
property as a result of * * * (various Executive Orders and Acts).'' 50
U.S.C. app. 1989b-7(2) (emphasis added). Title II of the Act, which
provides reparations to Aleuts evacuated from their home islands during
World War II, similarly defines an eligible Aleut as a person ``who, as
a civilian, was relocated by authority of the United States from his or
her home village * * * to an internment camp * * *.'' 50 U.S.C. app.
1989c-1(5) (emphasis added). The contrasting use of the active voice in
the exclusion clause suggests the possibility that section 108 might be
read to exclude only those individuals who voluntarily relocated to an
enemy country during the war.
This possibility is consistent with judicial decisions. The United
States Courts of Appeals for the District of Columbia and the Ninth
Circuit have deemed the use of the active as opposed to the passive
voice relevant for purposes of statutory interpretation. Dickson versus
Office of Personnel Mgmt., 828 F.2d 32, 37 (D.C. Cir. 1987) (isolated
use of passive voice in phrase defining liability is significant and
allows suit against Office of Personnel Management whenever an adverse
determination ``is made,'' even if by another agency); United States
versus Arrellano, 812 F.2d 1209, 1212 (9th Cir. 1987) (clause of
statute defining criminal intent phrased in active voice applies to
conduct of the accused, while second clause phrased in passive voice
applies only to the conduct of others). Thus, the statutory language
creates an ambiguity as to whether eligibility decisions should
distinguish between voluntary relocatees and involuntary relocatees.
For the reasons that follow, we believe the better interpretation is to
exclude only individuals who relocated voluntarily.
[[Page 51011]]
The Act's legislative history provides very little significant
insight into congressional intent regarding the eligibility of
involuntary relocatees. As originally introduced, neither the House nor
the Senate bill included a relocation exclusion provision in the
section defining eligible individuals. Entering conference, the House
version of the Act contained the exclusion, while the Senate version
contained no such provision. The conferees agreed to adopt the House
provision, which excluded ``those individuals who, during the period
from December 7, 1941, through September 2, 1945, relocated to a
country at war with the United States.'' H.R. Conf. Rep. No. 785, 100th
Cong., 2d Sess. 22 (1988). There is no additional discussion of the
relocation exclusion in the conference report.
A discussion of whether individuals who returned to Japan should be
included in the definition of ``eligible individuals'' is contained in
a witness statement submitted to the House and Senate subcommittees
considering the legislation. In testimony opposing the enactment of the
bill, the Assistant Attorney General for the Civil Division, Richard K.
Willard, noted that as then written (without the relocation exclusion),
the breadth of the definition would cover any individual who had been
subject to exclusion, relocation, or internment, including persons
living outside of the United States. In the Department's view, this
overlooked the fact that at least several hundred of the detainees were
``fanatical pro-Japanese,* * *. and (had) voluntarily sought
repatriation to Japan after the end of the war.'' The Department
believed that allowing these disloyal individuals to receive the
benefit of the legislation would be unfair to the United States and to
loyal persons of Japanese descent. To accept the Findings and to
Implement the Recommendations of the Commission on Wartime Relocation
and Internment of Civilians: Hearing on S. 1009 Before the Subcomm. on
Federal Services, Post Office, and Civil Service of the Senate Comm. on
Governmental Affairs, 100th Cong., 1st Sess. 281, 296 (1987)
(Hearings). This statement, however, does not reveal or suggest an
opinion that the bill ought to exclude from redress persons who
involuntarily relocated to an enemy country.
In sum, the Department believes that section 108's exclusion of
persons who relocated to an energy country during World War II is
susceptible to the interpretation that it does not apply to persons who
relocated involuntarily, that so interpreting the statute gives effect
to the principles Congress meant to embody in the exclusionary
provision, and that this interpretation is otherwise a reasonable
construction of the statute.
The Department further notes that the determination of whether a
person relocated voluntarily to an enemy country during World War II is
extraordinarily difficult to determine at this late date, over half a
century since the period during which the actions that are relevant to
a determination about the state of mind of individual relocatees took
place. Under these circumstances, the Department has discretion to
structure the process for determining redress eligibility in a manner
that avoids the inherent inaccuracy of any attempt to engage in a case-
by-case inquiry into the subjective factor of state of mind, as well as
the potential administrative burdens associated with case-by-case
inquiry, by articulating some reasonable, objective criteria to guide
the process.
To that end, the final rule adopts two bright line standards to
administer section 108's exclusion provision. First, any person who was
21 years of age or older, emancipated by petition of the court or by
marriage, or otherwise emancipated, as of the date of his or her
departure from the United States, shall be irrebuttably presumed to
have relocated voluntarily, and will be ineligible for redress under
the Act. Second, any person who served in the Japanses military, or the
military of another enemy country, during the statutorily-defined war
period shall be irrebuttably presumed to have relocated voluntarily
and, therefore, will be ineligible for redress. All otherwise eligible
persons falling outside these categories, that is, persons who were
minors and not otherwise emancipated as of the dates of their
departures from the United States and who did not serve in the Japanese
military or the military of another enemy government during the
statutorily-defined war period, shall be considered involuntary
relocatees and therefore eligible for redress under the Act.
The Supreme Court has affirmed the ability of agencies to employ
generally applicable rules as an alternative to case-by-case
adjudication. See, e.g., American Hospital Ass'n v. NLRB, 499 U.S. 606,
611 (1991) (``Prior decisions of this Court) confirm that, even if a
statutory scheme requires individualized determinations, the decision-
maker has the authority to rely on rulemaking to resolve certain issues
of general applicability unless Congress clearly expresses an intent to
withhold that authority.''). In particular, the Court has noted that
the Congress is free to use prophylactic rules despite their ``inherent
imprecision'' when it wishes to avoid ``the expense and other
difficulties of individual determinations.'' Weinberger v. Salfi, 422
U.S. 749, 777 (1975).
The Department believes that under American Hospital Ass'n and
other authorities agencies enjoy a similar latitude to that enunciated
in Weinberger. As in Weinberger, justifying the use of such bright-line
rules does not require determining whether the rules ``precisely filter
[] out those, and only those, who are in the factual position which
generated the congressional concern * * * (n) or * * * whether (they)
filter [] out a substantial part of the class which caused the * * *
concern, or whether (they) filter [] out more members of the class than
nonmembers.'' Id. Rather, the question is whether the Department could
``rationally have concluded both that * * * particular (rules) would
protect against (the abuse Congress sought to avoid), and that the
expense and other difficulties of individualized determinations
justified (their) inherent imprecision.'' Id. For the reasons that
follow, the final rule satisfies this standard.
As stated above, the final rule applies an irrebuttable presumption
that persons who were 21 years of age or older, emancipated by petition
of the court or by marriage, or otherwise emancipated as of the dates
of their departures from the United States, were voluntary relocatees.
The Department proposes to apply this irrebuttable presumption because
adult relocatees were more likely than minor relocatees to have been
able to assent freely to their relocation to Japan. The age of 21 as of
the date of departure was chosen because, during the period covered by
the Act's relocation exclusion, the legal age of majority in most
states was 21.
Noting the dearth of legislative history pertaining to the Act's
exclusion clause, the United States Court of Federal Claims stated in
Suzuki v. United States, 29 Fed. Cl. 688 (1993), that Congress may have
enacted the exclusion clause in an effort to deny benefits to
individuals who had either been disloyal to the United States or ``who,
despite possible continued loyalty to the United States, had aided an
energy country during war.'' Id. at 695. Nothing in the Department's
revised interpretation of section 108 is inconsistent with this
observation, since both of the possible purposes cited by the court
assume volition on the part of the relocatee to leave the United States
and relocate to Japan. If, by contrast, an individual relocatee was not
free to
[[Page 51012]]
assent to his or her relocation on account of his or her minority
status, it is reasonable for the Department to conclude that such
individual was not the type of person against whom Congress intended to
apply section 108's exclusion provision. By itself the relocation of
minors during World War II does not raise doubts or inferences
concerning disloyalty. In fact, most American-born minor relocatees
returned to the United States following the war.
Examples of distinctions in the treatment of minors and adults
abound in our law. See Thompson v. Oklahoma, 487 U.S. 815, 823 (1988)
(plurality opinion). Accordingly, it is reasonable for the Department
to apply such a distinction in determing whether individuals who
relocated to Japan during the statutorily-defined war period did so
voluntarily.
The final rule also applies an irrebuttable presumption the
individuals who served in the military of an enemy government during
the statutorily-defined war period relocated voluntarily because the
Department believes that evidence that an individual entered into the
active military service on behalf of an enemy government following his
or her departure from the United States is a strong indication that the
individual relocated voluntarily. In view of that reasonable belief and
the fact that it is difficult at this time to determine with complete
certainty the motivations of individuals who entered the active
military service against the United States during World War II, and in
light of the increased administrative burdens associated with
individualized efforts to ascertain the 50-year old motivations of such
individuals, the Department believes it is appropriate to interpret the
fact that an individual served in the military of an enemy government
following his or her relocation as evidence that the individual
relocated voluntarily.
The Department will thus require individuals who apply for redress
under the Act and who relocated to Japan during the statutorily-defined
war period to provide information as to their ages and emancipation
status upon their dates of departure from the United States to relocate
to Japan, and to state whether or not they participated in the active
military service on behalf of an enemy government, including the
Japanese Government, during World War II. If such individuals state
that they were 21 years of age or older, or emancipated minors, as of
the dates of their departures, they will be deemed ineligible for
redress under the Act. Similarly, if such individuals state that they
participated in the active military service on behalf of an enemy
government during World War II, they also will be deemed ineligible. In
contrast, otherwise eligible relocatees who were under the age of 21
and not otherwise emancipated upon the dates of their departures from
the United States, and who did not serve in the military on behalf of
an enemy government during World War II, will be eligible for redress
under the Act.
IV. Regulatory Matters
This rule relieves a restriction upon individuals otherwise
eligible for redress under the Act and is therefore exempt from the
provision of the Administrative Procedures Act pertaining to delay in
effective date. 5 U.S.C. 553(d). Moreover, the Department has
determined that this final rule will be effective immediately upon
publication in the Federal Register for good cause shown, i.e., to
expedite these claims, since involuntary relocatees are some of the
older claimants and at least four persons, potentially eligible under
this revision, have since passed away; to process the current claims as
quickly as possible because of budgetary concerns and the program's
sunset date of August 10, 1998; and to resolve a pending lawsuit in the
U.S. Court of Federal Claims involving 14 plaintiffs who were minor
children during the war and who will be potentially eligible under this
revision.
The Attorney General in accordance with the Regulatory Flexibility
Act, 5 U.S.C. 605(b), has reviewed this regulation and by approving it
certifies that this regulation will not have a significant economic
impact upon a substantial number of small entities because this rule
confers a benefit on a limited group of individuals.
The Office of Management and Budget has determined that this final
rule is a significant regulatory action under Executive Order No. 12866
and, accordingly, this final rule has been reviewed and approved by the
Office of Management and Budget. Information collection associated with
this regulation has been approved by the Office of Management and
Budget, OMB No. 1190-0010.
List of Subjects in 28 CFR Part 74
Administrative practice and procedure, Aliens, Archives and
records, Citizenship and naturalization, Civil rights, Indemnity
payments, Minority groups, Nationality, War claims.
For the reasons set forth in the preamble and by the authority
vested in me, including 28 U.S.C. 509 and 510, chapter I of title 28,
part 74, of the Code of Federal Regulations is amended as follows:
PART 74--CIVIL LIBERTIES ACT REDRESS PROVISION
1. The authority citation for part 74 continues to read as follows:
Authority: 50 U.S.C. app. 1989b.
2. In Subpart B, Sec. 74.4 is revised to read as follows:
Subpart B--Standards of Eligibility
Sec. 74.4 Individuals excluded from compensation pursuant to section
108(B) of the Act.
(a) The term ``eligible individual'' does not include any
individual who, during the period beginning on December 7, 1941, and
ending on September 2, 1945, relocated to a country while the United
States was at war with that country.
(b) Nothing in paragraph (a) of this section is meant to exclude
from eligibility any person who, during the period beginning on
December 7, 1941, and ending on September 2, 1945, relocated to a
country while the United States was at war with that country, and who
had not yet reached the age of 21 and was not emancipated as of the
date of departure from the United States, provided that such person is
otherwise eligible for redress under these regulations and the
following standards:
(1) Persons who were 21 years of age or older, or emancipated
minors, on the date they departed the United States for Japan are
subject to an irrebuttable presumption that they relocated to Japan
voluntarily and will be ineligible.
(2) Persons who served in the active military service on behalf of
the Government of Japan or an enemy government during the period
beginning on December 7, 1941 and ending on September 2, 1945 are
subject to an irrebuttable presumption that they departed the United
States voluntarily for Japan. If such individuals served in the active
military service of an enemy country, they must inform the Office of
such service and, as a result, will be ineligible.
Dated: September 21, 1996.
Janet Reno,
Attorney General.
[FR Doc. 96-25027 Filed 9-27-96; 8:45 am]
BILLING CODE 4410-10-M
Complete official Federal Register PDF
FR Doc. 96-25009 Supplemental Financial Disclosure Requirements for Employees of the Federal Deposit Insurance Corporation
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 50947-50948]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25009]
========================================================================
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. 190 / Monday, September 30, 1996 /
Rules and Regulations
[[Page 50947]]
FEDERAL DEPOSIT INSURANCE CORPORATION
5 CFR Part 3202
RINs 3064-AA07, 3209-AA16
Supplemental Financial Disclosure Requirements for Employees of
the Federal Deposit Insurance Corporation
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Deposit Insurance Corporation, with the
concurrence of the Office of Government Ethics (OGE), is removing an
interim supplemental financial disclosure regulation for FDIC
employees, that has supplemented the OGE executive branch wide
financial disclosure regulation, 5 CFR part 2634. In light of the OGE
determination that agencies that obtain written approval from OGE for
supplemental financial disclosure forms are not required to have
supplemental financial disclosure regulations, the FDIC has determined
that its supplemental financial disclosure regulation is no longer
needed. This is consistent with the goals of the FDIC's regulation
review project on eliminating unnecessary regulations pursuant to
Section 303 (a) of the Riegle Community Development and Regulatory
Improvement Act of 1994. The substance of the eliminated regulation
will be continued in the FDIC internal written procedure that existed
before the part 3202 regulation was established.
EFFECTIVE DATE: October 30, 1996.
FOR FURTHER INFORMATION CONTACT: Richard M. Handy, Assistant Executive
Secretary (Ethics), Office of the Executive Secretary, Federal Deposit
Insurance Corporation, 550 17th Street, N.W., Washington, D.C. 20429;
telephone: (202) 898-7271.
SUPPLEMENTARY INFORMATION: On July 26, 1993, the FDIC, with the
concurrence of OGE, published an interim rule on supplemental financial
disclosure requirements for FDIC employees, with a 60-day public
comment period. 58 FR 39625-39628. No comments were received in
response to the 1993 publication.
The FDIC's interim supplemental financial disclosure regulation,
which has been codified at 5 CFR part 3202, has supplemented OGE's
Executive Branch Financial Disclosure, Qualified Trusts, and
Certificates of Divestiture regulation, which is codified at 5 CFR part
2634. Section 3202.101 describes financial disclosure reports filing
requirements, their custody and confidentiality. Section 3202.102
describes the printing of confidential financial disclosure forms in
three parts with an FDIC identification number. Section 3202.103
describes confidential reports of employee interest in FDIC-insured
depository institutions. Section 3202.104 describes confidential
reports of employee indebtedness. Section 3202.105 describes
confidential statements of employee credit card obligation in insured
state nonmember banks.
At the time that the FDIC's part 3202 regulation was established in
1993, it was thought that a regulation would be necessary in order to
allow the FDIC to continue to use the supplemental financial disclosure
forms that it had previously used in connection with the disclosures
discussed above. Since then, OGE has determined that agencies that
obtain written approval from OGE for their supplemental forms are not
required to have supplemental financial disclosure regulations. This is
consistent with the goals of the FDIC's regulation review project on
eliminating unnecessary regulations pursuant to Section 303 (a) of the
Riegle Community Development and Regulatory Improvement Act of 1994.
The FDIC will continue the substance of the part 3202 regulation in its
pre-existing internal written procedures, with appropriate updating
revisions, once the regulation is eliminated. Reliance on the internal
written procedures alone will allow the FDIC to adapt its disclosure
requirements more easily to organizational changes that periodically
occur than if the regulation remains in place. The FDIC previously
obtained OGE's approval of its supplemental forms which are
incorporated into the FDIC's internal written procedures. Therefore,
with OGE concurrence, the FDIC has determined that it is appropriate to
remove its part 3202 regulation.
Administrative Procedure Act
Pursuant to 5 U.S.C. 553 (a) (2) and (b), the FDIC Board of
Directors has found that good cause exists for waiving the regular
notice of proposed rulemaking as to this final rule removal action.
This action is being taken because it is in the public interest that
the part 3202 regulation which concerns matters of agency organization,
practice and procedure be removed. The regulation is not needed at this
time because the matters in the regulation are covered adequately by
internal written FDIC procedures, as approved in pertinent part by the
OGE.
Regulatory Flexibility Act
Because no general notice of proposed rulemaking was published
prior to this final rule, the requirements of the Regulatory
Flexibility Act for an initial and final regulatory flexibility
analysis do not apply (5 U.S.C. 601(2)).
Paperwork Reduction Act
This final rule removal action does not contain any information
collections as defined by the Paperwork Reduction Act (44 U.S.C. 3501
et seq.). Therefore, no material has been submitted to the Office of
Management and Budget.
List of Subjects in 5 CFR Part 3202
Administrative practice and procedure, Conflict of interests,
Financial disclosure, Government employees, Privacy, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, and in accordance with
its authority under 5 U.S.C. 7301 and 5 CFR 2634.103, the Board of
Directors of the Federal Deposit Insurance Corporation, with the
concurrence of the Office of Government Ethics, is amending chapter
XXII of title 5 of the Code of Federal Regulations as follows:
PART 3202--[REMOVED]
1. Part 3202 is removed.
By Order of the Board of Directors.
[[Page 50948]]
Dated at Washington, D.C. this 10th day of September, 1996.
Jerry L. Langley,
Executive Secretary.
Concurred in this 23d day of September, 1996.
Stephen D. Potts,
Director, Office of Government Ethics.
[FR Doc. 96-25009 Filed 9-27-96; 8:45 am]
BILLING CODE 6714-01-P
Complete official Federal Register PDF
FR Doc. 96-24995 Testing Requirements for Ocean Dumping
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 51196-51203]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24995]
[[Page 51195]]
_______________________________________________________________________
Part VII
Environmental Protection Agency
_______________________________________________________________________
40 CFR Part 227
Ocean Dumping Testing Requirements; Final Rule
Federal Register / Vol. 61, No. 190 / Monday, September 30, 1996 /
Rules and Regulations
[[Page 51196]]
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 227
[FRL-5617-6]
RIN 2040-AC81
Testing Requirements for Ocean Dumping
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: EPA today is issuing a final rule clarifying portions of the
Agency's ocean dumping regulations regarding the number of species to
be used in bioassay testing of the solid phase (that part of the
material that would settle rapidly to the bottom after dumping). The
purpose of today's rule is to clarify regulatory language that was
interpreted by the U.S. Court of Appeals for the Third Circuit in a
different manner than EPA intended. Today's rule confirms the validity
of existing solid phase testing practices under which the use of two
species is permissible, provided the two species tested together
represent the three categories of organisms specified in the
regulations, and will maintain current safeguards for protection of the
marine environment. The proposed rulemaking (February 29, 1996)
included proposed changes that would have addressed liquid and
suspended particulate phase test species, as well as other aspects of
the testing requirements. The Agency has limited the scope of today's
final rule to clarify only the number of species to be used in solid
phase bioassay tests, in a manner consistent with current testing
practices and scientific guidance. The Agency has determined that this
final rule will provide protection of our ocean waters, without
requiring unnecessary tests.
EFFECTIVE DATE: This final regulation becomes effective on September
30, 1996.
ADDRESSES: A copy of the supporting documents for this rule are
available for review at EPA's Water Docket, Room 2616, 401 M Street,
SW, Washington, DC 20460. For access to the docket materials, call 202/
260-3027 between 9:00 a.m. and 3:30 p.m. for an appointment.
FOR FURTHER INFORMATION CONTACT: John Lishman, Chief, Marine Pollution
Control Branch, Oceans and Coastal Protection Division (4504F),
Environmental Protection Agency, 401 M Street, SW, Washington, DC
20460, Telephone 202/260-1952.
SUPPLEMENTARY INFORMATION:
A. Regulated Entities
Entities potentially regulated by this action are persons or
entities seeking permits to dump material into ocean waters under the
Marine Protection, Research, and Sanctuaries Act, 33 U.S.C. 1401 et
seq. That statute currently bans the ocean dumping of industrial wastes
(with the exception of waste from tuna cannery operations in American
Samoa or Puerto Rico) and also bans ocean dumping of sewage sludge. As
a result, the rule would primarily be of relevance to parties seeking
permits from the U.S. Army Corps of Engineers for the ocean dumping of
dredged material as well as the U.S. Army Corps of Engineers itself.
Potentially regulated categories and entities include:
------------------------------------------------------------------------
Examples of potentially regulated
Category entities
------------------------------------------------------------------------
Industry.......................... * Ports seeking dredged material
ocean dumping permits.
* Marinas seeking dredged material
ocean dumping permits.
* Shipyards seeking dredged material
ocean dumping permits.
* Berth owners seeking dredged
material ocean dumping permits.
* Tuna canneries in American Samoa
seeking fish waste ocean dumping
permits.
State/local/tribal governments.... * Local governments owning ports or
berths seeking dredged material
ocean dumping permits.
Federal Government................ * US Army Corps of Engineers.
* Federal agencies seeking dredged
material ocean dumping permits.
------------------------------------------------------------------------
This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by the
action. This table lists types of entities that EPA is now aware could
potentially be regulated by this action. Other types of entities not
listed in this table could also be regulated. To determine whether your
organization is potentially regulated by this action, you should
carefully consider whether your organization is subject to the
requirement to obtain an ocean dumping permit in accordance with the
Purpose and Scope provisions of Section 220.1 of Title 40 of the Code
of Federal Regulations. If you have questions regarding the
applicability of this action to a particular entity, consult the person
listed in the preceding FOR FURTHER INFORMATION, CONTACT section.
B. Background
On February 29, 1996, the Agency issued a proposal in the Federal
Register to clarify certain provisions of the Agency's ocean dumping
regulations relating to bioassay testing requirements (61 FR 7765)
under the Marine Protection, Research, and Sanctuaries Act (33 U.S.C.
1401 et seq.) (hereinafter ``the Act'' or ``the MPRSA''). The original
deadline for receipt of comments on the proposed rule was April 1,
1996; however, in response to requests from the public for extension of
the comment period, the Agency extended the comment period an
additional 30 days, resulting in a final deadline for receipt of
comments of May 1, 1996 (61 FR 13794, March 28, 1996).
The purpose of the proposal was to clarify regulatory language that
was interpreted by the United States Court of Appeals for the Third
Circuit in a different manner than EPA intended. See, Clean Ocean
Action v. York, 57 F.3d 328 (3d Cir. 1995). That opinion raised a
degree of uncertainty about the number of species that had been used in
the tests conducted on the solid phase of the material in issue before
the court, and the degree to which the Agency retained flexibility to
determine when laboratory bioassay testing is required. The proposed
rule addressed both the number of test species to be used under the
regulations and issues related to when bioassay testing is required. It
was not intended to change the evaluative procedures currently used and
set out in program guidance, or the substantive criteria used to
evaluate ocean dumping permit applications. The proposal was intended
to clarify the regulations in a manner consistent with the Agency's
longstanding interpretation of the regulations and existing testing
practices. For further information on the statutory and regulatory
background of the proposal, the reader is referred to the preamble at
61 FR 7766-7767.
The Agency received a number of comments on the proposed rule, some
of which expressed support for the proposal and some of which expressed
opposition. A summary of all comments received and the Agency's
response is
[[Page 51197]]
set out in Section D below. The complete text of all comments received
and the Agency's response may be found in ``Response to Individual
Comments Received on the Proposed Rulemaking on Testing Requirements
for Ocean Dumping.'' This document is included as part of the
rulemaking record, and can be inspected at the Agency's Water Docket,
the location of which is in the ADDRESSES section above.
C. Description of Final Rule
The Agency has elected to limit the scope of today's final rule to
only the issue of the number of species to be used in solid phase
tests. Today's rule does not take final action on the parts of the
proposal that addressed other testing issues. Although a number of
commenters supported proceeding with the entire scope of the proposed
rule, as is discussed further below, a number of other commenters were
concerned about the potential implications of the other aspects of the
proposal. EPA will be investing at least nine months in a process for
all affected groups to help the Agency review the ocean disposal
testing requirements and ensure that any further revision reflects both
sound policy and science.
Accordingly, today's final rule is limited to amending
Sec. 227.27(d) of the regulations, which addresses the number of test
species to be used in solid phase testing by defining ``appropriate
sensitive benthic marine organisms'' for use in solid phase laboratory
bioassay tests. The organisms to be used are defined in existing
Sec. 227.27(d) as ``at least one species each representing filter-
feeding, deposit-feeding, and burrowing species chosen from among the
most sensitive species accepted by EPA as being reliable test
organisms....'' By describing a range of characteristics that the test
species must represent for different exposure pathways, the regulations
protect the marine environment by considering the different
sensitivities to environmental contaminants exhibited by marine
organisms with these different characteristics [Reference 1].
The Agency's approved testing procedures provide for the use of no
fewer than two different species that together cover the three
characteristics specified in 40 CFR 227.27(d). For example, the marine
worm, Nephtys incisa, is both a deposit-feeder and a burrower
[Reference 2], and the amphipod crustacean, Ampelisca abdita, is both a
filter-feeder and a deposit-feeder [Reference 3]. Because the Third
Circuit opinion, however, could be construed to indicate that 40 CFR
227.27(d) requires the use of three different test species for the
solid phase (See, 57 F. 3d 328, 333 n. 2), the proposal would have
amended 40 CFR 227.27(d) to reflect more clearly EPA's longstanding
interpretation of that provision, i.e., that at least two species may
be used in solid phase bioassay testing, provided that together they
are representative of the three categories of organisms specified in
the regulations. The proposal would have done this by removing the
words ``one species each'' from Section 227.27(d) where they modified
the three groups of characteristics, and replaced them with ``at least
two.'' The proposal would not have changed the requirement that the
test species be ``chosen from among the most sensitive species''
accepted as reliable test organisms.
In addition, although the issue of the number of test species that
may be used was addressed by the Third Circuit in the context of the
solid phase testing provisions of Sec. 227.27(d), the proposed rule
would have made similar changes in 40 CFR 227.27(c) with regard to
liquid and suspended particulate phase testing. This was because
Sec. 227.27(c) similarly defines ``appropriate sensitive marine
organisms'' to be used in such testing as ``at least one species each
representative of phytoplankton or zooplankton, crustacean or mollusk,
and fish species chosen from among the most sensitive species
documented in the scientific literature or accepted by EPA as being
reliable test organisms * * *.''
As is discussed below, some commenters preferred the use of three
species, and expressed concern that allowing the use of multi-
characteristic organisms might result in under-estimation of the
potential effects of material proposed for disposal. As explained in
the discussion of comments below, however, EPA has determined that for
the solid phase, the use of two appropriately sensitive species that
together are representative of the three categories of organisms
specified in the regulations is technically appropriate for use in the
ocean dumping regulatory program, and that the regulations should
unambiguously allow for such a solid phase testing approach. At the
same time, the regulations do not restrict the Corps' and EPA's ability
to require testing of more than two species where appropriate.
However, because as described below, the current testing guidance
calls for the use of three species for liquid and suspended particulate
phase testing, and in light of the concerns expressed over the proposed
rule, the Agency has elected not to include changes to Sec. 227.27(c)
as part of today's final rule. That section of the regulations was not
specifically at issue before the Third Circuit or addressed in its
opinion. The Agency continues to stand by its longstanding
interpretation of the existing regulatory language. However, given that
the existing practice and guidance for liquid and suspended phase
testing currently employ three species testing, that Sec. 227.27(c) was
not addressed in the Third Circuit opinion, and the overall concerns
expressed by some commenters on the proposed rule, the Agency does not
believe it is necessary to include clarifying changes to Sec. 227.27(c)
in today's final rule. The remainder of the test species discussion in
today's preamble thus focuses on solid phase issues.
While the ocean dumping regulations provide for a comprehensive
assessment of the potential environmental impacts of disposal,
evaluation of the material to be disposed plays an important role in
environmental assessments. The use of laboratory tests forms a major
part of the regulatory evaluations of the potential impacts of
discharges of material into the aquatic environment [Reference 1]. It
is generally recognized that there is no one ``white rat'' that can
predict the potential impact of the disposal of all material on all
organisms in all marine ecosystems. This difficulty can be addressed by
conducting multiple laboratory tests. However, simply conducting more
tests may provide redundant data and may waste resources [Reference 4].
Decisions regarding how many and what kinds of organisms to test are a
matter of complex scientific judgment. Experience gained from
conducting multiple laboratory tests with a large number of species can
be used to determine the relative sensitivity of testing organisms
[Reference 5]. In addition, species sensitivity must be understood
within the context of the exposure of the organism to the material
during the test [Reference 5]. With information about the relative
sensitivity of a large number of organisms for different exposures to a
material, an optimum suite of testing organisms can be identified.
These factors were all thoroughly evaluated by the Agency during the
development of the current guidance for testing, and the species
recommended for use by that guidance reflects this analysis.
The current recommendations of EPA and the U. S. Army Corps of
Engineers for testing organisms are contained in the guidance manual
entitled, Evaluation of Dredged Material Proposed for Ocean Disposal--
Testing
[[Page 51198]]
Manual [Reference 6], commonly known as the ``Green Book.'' To assess
the potential water column impacts associated with the liquid and
suspended particulate phase, the Green Book recommends that toxicity
tests be conducted on three appropriately sensitive water column
species representing phytoplankton or zooplankton, crustacean or
mollusk, and fish [Reference 6]. To assess benthic impacts (impacts to
organisms that live on the sea bottom), the Green Book recommends that
a 10-day acute toxicity test and a 28-day bioaccumulation test be
conducted on the solid phase with at least two ``appropriately
sensitive marine benthic species'' for the type of test conducted
(i.e., two acute toxicity organisms for acute toxicity tests and two
bioaccumulation organisms for bioaccumulation tests). Thus, current
guidance recommends that a total of three species be tested for water
column effects, and at least two ``appropriate sensitive marine benthic
species'' be tested for both bioaccumulation and toxicity in the solid
phase of the dumped material. Thus, more than two species are tested in
the solid phase, and all three species characteristics identified in
the regulations are represented in each of the two types of solid phase
testing. All three water column species characteristics (phytoplankton
or zooplankton, crustacean or mollusk, and fish) and all three solid
phase species characteristics (filter-feeding, deposit-feeding, and
burrowing) are therefore represented in these tests. The species used
are all selected from among the most sensitive and reliable for the
type of test in which they are used (acute toxicity or
bioaccumulation).
For a particular type of test (e.g., acute toxicity or
bioaccumulation tests), the scientific community has generally arrived
at a consensus on the most appropriate organisms for testing
[References 2, 3, 7, and 8]. For solid phase acute toxicity tests, the
amphipods Ampelisca abdita, Eohaustorius estuarius, Leptocheirus
plumulosus, and Rhepoxynius abronius are documented in the scientific
literature as being reliable and sensitive test organisms, and are
currently the only organisms subject to an EPA standard method for
sediment acute toxicity tests [Reference 3]. Standard methods are
desirable because they promote consistency among the different
laboratories running the tests. These organisms have been used
extensively in the study of aquatic sediment contamination, and have
been shown to be good indicators of adverse ecological effects to
benthic communities [References 9-17]. All four of these amphipods
share similar sensitivity to contaminants [Reference 3]. However, all
four amphipods are not equally appropriate for all sediments; each
organism has particular tolerances for sediment grain size, salinity,
and other natural characteristics of sediment [Reference 3]. The Agency
is not currently aware of reliable infaunal organisms (i.e., organisms
living in the sediment and thus in direct contact with sediment
contaminants) that are more sensitive than these amphipods for solid
phase acute toxicity testing. Nevertheless, the Agency currently
recommends that, in addition to the testing of at least one amphipod,
at least one additional appropriate sensitive benthic marine organisms
(e.g., a mysid shrimp, or a marine polychaete) be tested in the solid
phase [Reference 6]. The Green Book has made this recommendation to
provide additional assurance that potential interspecies variability is
addressed, and also to ensure that the three characteristics listed in
Section 227.27(d) are covered. The Agency is not aware of any
information to suggest that the regulations need to mandate testing on
a third organism to provide adequate information on the potential acute
toxicity of organisms exposed to the solid phase of the material.
Where two species are used in acute toxicity testing of the solid
phase, two species are used in bioaccumulation testing of the solid
phase, and the results of these tests are assessed collectively with
other tests and assessments, there is ample information to ensure
environmental protection, and the requirements of the Act are fully
met. This is particularly true because the number of species used in
biological tests is only one of several criteria used to satisfy the
ocean dumping regulations before material may be disposed of in marine
waters.
The regulations address the protection of marine ecosystems not
only through permitting criteria contained in 40 CFR Part 227, but also
by selecting disposal sites so as to minimize the effects of disposal
activities on the marine environment (See 40 CFR Part 228). The Part
227 criteria include the testing provision being clarified in today's
rule, which is used in assessing whether the material is suitable for
ocean disposal and will not cause significant undesirable effects on
the environment. Direct measurement of the effects of pollution on
complex ecosystems is very difficult. While laboratory testing of the
potential effects of pollutants on marine organisms does not directly
provide information about ecosystem responses, it can integrate the
additive and interactive effects of complex mixtures of chemicals, and
examine a variety of endpoints over different exposure periods to
predict potential impact at several levels of biological organization
for sensitive surrogate species [Reference 9]. Moreover, the species
used in testing under the current guidance (e.g., amphipods and
polychaetes) play significant roles in the food chain and are
ecologically important.
EPA has determined that the variety of appropriately sensitive test
organisms used to determine suitability of material proposed for ocean
dumping, through water column and solid phase tests that evaluate acute
toxicity and potential bioaccumulation, provide sufficient information
to determine whether the material proposed for dumping meets the
statutory standard of no unreasonable degradation of human health or
the marine environment. The final evaluation is a conservative
integration of the results from all these tests. In order for a
material to be found suitable for dumping, all of the tests performed
must indicate that the criteria are met. For instance, if only one of
the species used is determined to fail acute toxicity testing, the
material is deemed unsuitable for ocean dumping. Given the total
testing and site selection process, the use of two appropriately
sensitive species for solid phase testing will generally be more than
sufficient to protect the environment.
However, given the concern expressed by several commenters, today's
final rule is further clarified in two aspects, while still allowing
for the use of two species. The first sentence in proposed
Sec. 227.27(d) has been revised to delete the phrase ``at least two''
species, and instead to substitute the phrase ``two or more'' species.
This change is made to make it perfectly clear that the regulations are
not intended to limit testing to only two species, and that the Agency
retains the authority to require the use of more than two species. In
addition, the second sentence of proposed Sec. 227.27(d) is revised
from the proposal by adding language to clarify that the species are to
be ``chosen from among the species that are most sensitive for each
type they represent * * *.'' This change is made in response to
concerns expressed by some commenters that some multi-characteristic
organisms might not be sensitive for each characteristic they
represent. These commenters expressed concern that an organism that was
both a filter-feeder and a deposit-feeder might not be among the most
sensitive
[[Page 51199]]
filter-feeders and among the most sensitive deposit-feeders. As is
discussed below, the multi-characteristic organisms identified in the
current testing guidance, such as the amphipod, are among the most
sensitive and reliable organisms for all the feeding types they are
used to represent, and fully comport with this revised provision.
D. Summary of Comments and Agency Response
The comments on the proposed rule generally fell into four broad
categories. These categories and the Agency responses are set out
below.
(1) Comment period deadline: A number of commenters requested
additional time to consider the proposal, and submitted requests to
extend the public comment period by a certain number of days, or
requests that the Agency indefinitely suspend work on the rule. Other
commenters took a different view and requested that the Agency not
extend the comment period at all, urging the Agency to act
expeditiously to complete the rulemaking.
As explained in the preamble to the proposed rule, the Agency
originally believed that a 30-day comment period was appropriate
because the proposed rulemaking was intended to clarify, not
substantively change, the Agency's longstanding interpretation and
implementation of the ocean dumping regulations. After carefully
considering the comments received prior to the close of the original
30-day comment period, the Agency acted to extend the comment period
for an additional 30 days (61 FR 13794). The Agency believes that
allowing a 60-day comment period is reasonable and appropriate, since
the proposal was intended to clarify the regulations in a manner
consistent with the Agency's longstanding interpretation and its
current testing manuals. The Agency has further responded to the
concern expressed by some commenters regarding the need for additional
time by limiting the scope of today's final rule to the number of
species to be used in solid phase bioassay testing. The Agency intends
to invest at least nine months in a process for all affected groups--
industry, labor, and environmental groups--to help the Agency review
the ocean disposal testing requirements and ensure that any further
revision reflects both sound policy and science. See, letters of July
24, 1996, from EPA Administrator Browner, Transportation Secretary
Pena, and Army Secretary West, to Congressmen Frank Pallone, Robert
Menendez, and Robert Torricelli, which are included in the rulemaking
record. EPA believes that such an approach, under which issues related
to the number of solid phase test species to be used are expeditiously
resolved, while remaining issues are included in a review of ocean
disposal testing requirements that will involve further discussion
among stakeholders, appropriately addresses the range of comments
received related to the deadline for public comments. EPA expects that
the issues to be addressed in this review, as well as their relative
priority, will be identified as part of the definition of this process.
(2) Effect of proposed rule on environmental protection of the
oceans: A number of commenters expressed concern that the proposed rule
would result in a weakening of the existing regulations' protection of
the oceans. Other commenters disagreed with this view, agreeing with
EPA's position that the proposal was a clarification of the regulations
in a manner consistent with Agency practice. Unlike the proposal,
today's final rule is limited to the issue of the number of solid phase
test species to be used. Thus, those concerns unrelated to the number
of species used are not at issue in today's final rule.
To the extent that some commenters raised general concerns about
reduced protection of the oceans resulting from the use of two rather
than three species in bioassay tests, the Agency notes that the use of
two species for solid phase testing does not reflect a change from
existing practice, and is fully consistent with the most recent testing
manual, the Green Book [Reference 6]. In addition, as is explained
elsewhere in this preamble, the Agency has determined that allowing the
use of two appropriately sensitive species that together represent the
three categories of organisms specified by the regulations, permits a
sufficient evaluation of the solid phase of the material proposed for
disposal, and is fully protective of the marine environment.
Furthermore, under the regulations, the Agency retains the authority to
require solid phase testing on more than two species, whenever it
believes two species would not provide for an adequate evaluation of
the potential impacts to the marine environment. Finally, to the extent
these commenters were concerned about the number of species used in
liquid or suspended particulate phase testing, as previously discussed,
the Agency does in fact include three species for such tests in the
national guidance, and today's final rule makes no changes to the
relevant regulatory provision.
(3) Comments unrelated to the number of test species to be used: A
number of specific comments were received on testing issues unrelated
to the number of test species, including concerns about the use of
models, the use of alternatives to laboratory bioassays, and concerns
that the proposal gave the Agency too much discretion with regard to
what tests to require. Today's final rule addresses only the number of
test species to be used in the solid phase. As stated above, the Agency
will be investing at least nine months in a process with affected
stakeholders to review the ocean dumping testing requirements. To the
extent such issues are raised in that process, EPA will carefully
consider those comments.
(4) Comments on number of species to be used: One of the comments
on the number of species to be used pointed to language in Sec. 102(a)
of the Marine Protection, Research, and Sanctuaries Act (MPRSA)
addressing the effect of dumping on plankton, shellfish, and wildlife;
another comment pointed to similar language addressing the effect of
dumping on marine ecosystems. These commenters suggested that the use
of two species would be contrary to the specified statutory provisions.
The Agency does not agree with this comment. MPRSA Sec. 102(a) does not
require that tests be conducted on each of the organisms enumerated, or
on marine ecosystems as part of the permitting process, but rather
requires that the potential effects of dumping are factors to be
considered by EPA in developing the ocean dumping criteria. The Agency
has considered the Sec. 102(a) requirements in developing the ocean
dumping regulations. For example, 40 CFR Sec. 227.27(a) requires the
use of marine water quality criteria in evaluating the suitability of
material for dumping. Those criteria were developed after examination
of contaminant effects on a wide range of organisms, including fish,
shellfish, and plankton [Reference 20]. In addition, testing manuals
developed for the ocean dumping regulations identify a range of species
for testing, including fish, shellfish, zooplankton, crustaceans and
worms [Reference 6]. Finally, the regulations address not only the
evaluation of material proposed for disposal as part of the permitting
process, but also the selection of ocean disposal sites. The site
selection criteria contain provisions protective of marine ecosystems
that seek to localize potential impacts, and to avoid locating disposal
sites in sensitive areas of the marine
[[Page 51200]]
environment. 40 CFR Sections 228.5 and 228.6.
Other commenters questioned whether two species alone were
representative of complex marine ecosystems. These commenters did not
specifically assert that three species would be fully representative of
entire marine ecosystems; however, the commenters appeared to believe
that the more species tested, the better the representation of entire
marine ecosystems. Depending upon the sensitivity and types of
organisms chosen, the Agency agrees with the principle that the greater
the diversity of species tested, the more likely they are to be
representative of complete ecosystems. The reason so much emphasis is
placed on selecting organisms for testing from among the most
sensitive, is that in so doing one is assured of protecting the
majority of species in the ecosystem. Although the two species may not
react to contaminants the same way as all the species in a marine
ecosystem, if they are selected from among the most sensitive species
they will represent the potential impacts to the marine ecosystem.
Furthermore, in implementing a nationwide regulatory program, the
Agency also must take into account the difficulty and expense of
performing bioassay tests, potential variability in results if non-
standardized test species are used, and the large number of tests that
may need to be run for large volumes of spatially heterogenous
material, such as dredged material. As explained elsewhere in this
preamble, the Agency has determined that for the solid phase, the use
of two appropriately sensitive organisms representing three
characteristics specified in the regulations normally is sufficient to
determine the potential for a dumped material to unreasonably degrade
the marine environment, or to endanger human health. Moreover, the
regulations do not limit the authority to require testing of additional
species when warranted.
The Agency's ocean dumping regulations address the protection of
marine ecosystems both through permitting criteria contained in 40 CFR
Part 227, and site selection criteria contained in 40 CFR Part 228, and
not solely through the number of species to be tested. These criteria
provide for a thorough assessment of the physical and chemical
characteristics of the material, and a thorough evaluation of the
suitability of placing that material at a specific location, which is
selected after careful assessment of the surrounding environment. In
addition, the testing regulations themselves require the selection of
appropriately sensitive and reliable test organisms to predict
potential impacts at the disposal site. By requiring that appropriately
sensitive organisms are used, the regulations assure that species used
in tests will detect potential effects of dumped material on marine
life. The organisms recommended for use are identified in the testing
manual that implements the regulations [Reference 6]. The organisms
recommended are among the most sensitive suitable for use in a
regulatory testing program; these organisms include amphipods, shrimp,
marine polychaetes, and molluscs. These animals are recognized in the
scientific literature as being sensitive predictors of impacts
[References 2, 3, 6, and 8]. Using these organisms further protects the
ecosystem because these organisms are ecologically important, based on
abundance in the environment and their role in the structure of the
marine community.
Some commenters supporting the use of three species pointed to
EPA's Technical Support Document for Water Quality-based Toxics Control
[Reference 21] (hereafter referred to as ``the TSD''), which addresses
bioassay testing in the Clean Water Act's (CWA) Section 402 point
source discharge permitting program. These commenters believe that the
TSD called for the use of at least three species in bioassay testing.
However, although that manual does generally recommend the use of three
species, it also specifically recognizes that the optimum number of
species may be fewer, and the relevant CWA regulations (40 CFR
Sec. 136.3) do not specify a particular number of species to be used.
It also should be noted that the TSD addresses water column bioassays,
that the Green Book for the ocean dumping program also recommends the
use of three water column species for such tests, and that today's
final rule does not address water column testing. Finally, the Agency
also notes that for the solid phase of the dumped material, the Green
Book recommends use of both a 10-day acute toxicity test and 28-day
bioaccumulation test [Reference 6, p. 3-12]. Each of these two tests is
conducted with at least two ``appropriate sensitive marine benthic
species'' for the type of test conducted [Reference 6, pp. 11-10 and
12-2]. Thus, more than two species are tested in the solid phase, and
all three species characteristics identified in the regulations are
represented in each of the two types of solid phase testing.
Other commenters raised concerns that allowing one of the species
used to represent two of the three characteristics specified in the
regulations might result in under-estimation of potential effects.
These commenters indicated that organisms that are both filter- and
deposit-feeders would not represent how organisms that are primarily
filter-feeders would respond. The Agency agrees with the commenter that
organisms can alter their behavior in response to environmental
conditions, including food availability; this point is supported in the
literature [Reference 22]. The bioavailability, and ultimately the
toxicity, of a contaminant in a sediment may depend upon factors
related to how closely an organism is in contact with the sediment,
e.g., whether it ingests sediment, or whether it is in contact with the
sediment or interstitial water [Reference 18, p. 120]. Behavior that
minimizes contact by the organism with the sediment, such as filtering
overlying water, will significantly reduce an organism's exposure to
contaminants, and will significantly minimize the potential for
observing an effect in the organism due to contaminants in the sediment
[References 18 and 19]. The Green Book emphasizes that organisms tested
in solid phase bioassays should be in intimate contact with the
sediment or should ingest sediment [Reference 6, pp. 11-10 and 12-2].
Because an exclusively filter-feeding organism need not be in intimate
contact with the sediments, and would have to be fed during the test
since there would be nothing to filter (decreasing sediment exposure
due to ingestion), the Agency has determined that solid phase testing
of such organisms would not yield significant additional results.
The Agency is not aware of, nor do the commenters offer,
documentation to explain their belief that true filter-feeders may be
more sensitive than species that represent both filter-feeding and
deposit-feeding modes. Moreover, based on over twenty years of
experience using toxicity tests in the ocean dumping program, the Green
Book strongly recommends use of infaunal amphipods as appropriate
sensitive benthic marine organisms [Reference 6, p. 11-10]. These
organisms represent both filter-feeding and deposit-feeding modes, and
are extensively used in the scientific community to study the effects
of sediment contamination. They are also among the most sensitive
species documented in the scientific literature as being reliable test
organisms [References 9-17]. Because of widespread use within the
scientific community, a number of standardized protocols have been
developed for the amphipod toxicity test [References 3, 7,
[[Page 51201]]
8, and 23], and EPA recognizes amphipods as a recommended species for
solid phase acute toxicity testing in the Green Book [Reference 6, p.
11-10].
In summary, EPA has determined that the variety of appropriately
sensitive test organisms used to determine suitability through water
column and solid phase tests that evaluate acute toxicity and potential
bioaccumulation provide an adequate basis to determine if a material
proposed for dumping will unreasonably degrade the marine environment
or endanger human health. The final evaluation is a conservative
integration of the results from all these tests. In order for a dredged
material to be found suitable for dumping, all of the tests performed
must indicate that the criteria are met. For instance, if one of the
species used is determined to fail acute toxicity testing, the material
is deemed unsuitable for ocean dumping. Given the overall testing and
site selection process, the use of two appropriately sensitive species
for solid phase testing will generally be more than sufficient to
protect the environment.
E. References
1. Cairns J. and B.R. Niederlehner, ``Problems associated with
selecting the most sensitive species for toxicity testing,''
Hydrobiologia, 153:87-94, 1987.
2. ``Guidance manual: Bedded sediment bioaccumulation tests'',
U.S. Environmental Protection Agency, Office of Research and
Development, ERL-N Contribution No. N-111, September 1989.
3. ``Methods for assessing the toxicity of sediment-associated
contaminants with estuarine and marine amphipods,'' Office of
Research and Development, U.S. Environmental Protection Agency,
Washington, DC, EPA/600/R-94/025, June 1994.
4. Burton, G. A. and K.J. Scott, ``Sediment Toxicity
Evaluations--Their Niche in Ecological Assessments,'' Environ. Sci.
Technol., 26(11):2068-2075, 1992.
5. Mount, D.I., ``Scientific Problems in Using Multispecies
Toxicity Tests for Regulatory Purposes,'' in J. Cairns, Jr. (Ed),
Multispecies Toxicity Testing, Pergamon Press, NY, 1985, pp. 13-18.
6. ``Evaluation of dredged material proposed for ocean
disposal--Testing manual,'' U.S. Environmental Protection Agency and
U.S. Army Corps of Engineers, February 1991. EPA-503/8-91/001
(commonly known as the ``Green Book'').
7. SETAC, ``Guidance Document on Sediment Toxicity Tests and
Bioassays for Freshwater and Marine Environments'', eds. I.R. Hill,
P. Matthiessen, and F. Heimbach, Society of Environmental Toxicology
and Chemistry--Europe, 1993.
8. ASTM, ``Standard Guide for Conducting 10-day Static Sediment
Toxicity Tests with Marine and Estuarine Amphipods,'' Designation: E
1367-90, American Society of Testing Materials, Philadelphia, PA,
1990.
9. Lamberson, J.O., T.H. DeWitt, and R.C. Swartz, ``Assessment
of Sediment Toxicity to Marine Benthos,'' in Sediment Toxicity
Assessment, ed. Allen G. Burton. Lewis Publishers: Boca Raton, FL,
1992; pp. 183-211.
10. Redmond, M.S., P.A. Crocker, K.M. McKenna, E.A. Petocelli,
K.J. Scott and C.R. Demas, ``Sediment Toxicity Testing with the
Amphipod Ampelisca abdita in Calcasieu Estuary, Louisiana,'' Arch.
Environ. Contam. Toxicol. 30:53-61, 1996.
11. Schlekat, C.E., K.J. Scott, R.C. Swartz, B. Albrecht, L.
Antrim, K. Doe, S. Douglas, J.A. Ferretti, D.J. Hansen, D.W. Moore,
C. Mueller and A. Tang, ``Interlaboratory Comparison of a 10-day
Sediment Toxicity Test Method Using Ampelisca abdita, Eohaustorius
estuarius and Leptocheirus plumulosus,'' Environ. Toxicol. Chem.,
14(12):2163-2174, 1995.
12. Long, E.R., M.R. Buchman, S.M. Bay, R.J. Breteler, R.S.
Carr, P.M. Chapman, J.E. Hose, A.L. Lissner, K.J. Scott and D.A.
Wolfe, ``Comparative Evaluation of Five Toxicity Tests with Sediment
from San Francisco Bay and Tomales Bay, California,'' Environ.
Toxicol. Chem., 9:1193-1214, 1990.
13. DeWitt, T.H., R.C. Swartz, and J.O. Lamberson, ``Measuring
the Acute Toxicity of Estuarine Sediments,'' Environ. Toxicol.
Chem., 8:1035-1048, 1989.
14. Swartz, R.C., W.A. DeBen, K.A. Sercu and J.O. Lamberson,
``Sediment Toxicity and the Distribution of Amphipods in
Commencement Bay, Washington, USA,'' Marine Poll. Bull., 13(10):
359-364, 1982.
15. Swartz, R.C., D.W. Schults, G.R. Ditsworth, W.W. DeBen, and
F.A. Cole, ``Sediment Toxicity, Contamination, and Macrobenthic
Communities near a Large Sewage Outfall,'' Special Technical
Publication 865, ASTM, 1985; pp. 152-175.
16. Swartz, R.C., F.A. Cole, D.W. Schults, and W.A. DeBen,
``Ecological Changes in the Southern California Bight near a Large
Sewage Outfall: Benthic Conditions in 1980 and 1983,'' Marine
Ecology--Progress Series, 31:1-13, 1986.
17. Swartz, R.C., F.A. Cole, J.O. Lamberson, S.P. Ferraro, D.
Schultz, W.A. DeBen, H. Lee II, and R. Ozretich, ``Sediment
Toxicity, Contamination and Amphipod Abundance at a DDT- and
Dieldrin-Contaminated Site in San Francisco Bay,'' Environ. Toxicol.
Chem., 13(6):1-14, 1994.
18. Meador, J.P., E. Casillas, C.A. Sloan and U. Varanasi,
``Comparative Bioaccumulation of Polycyclic Aromatic Hydrocarbons
from Sediment by Two Infaunal Invertebrates,'' Mar. Ecol. Prog.
Ser., 123:107-124, 1995.
19. Whiteman, F.W., G.T. Ankley, M.D. Kahl, D.M. Rau, and M.D.
Balcer, ``Evaluation of Interstitial Water as a Route of Exposure
for Ammonia in Sediment Tests with Benthic Macroinvertebrates,''
Environ. Toxicol. Chem., 15:794-801, 1996.
20. Stephan, C.E., D. I. Mount, et al., ``Guidelines for
Deriving Numerical National Water Quality Criteria for the
Protection of Aquatic Organisms and Their Uses'', U.S. EPA, ORD. 103
pp. NTIS PB85-227049.
21. ``Technical Support Document for Water Quality-Based Toxics
Control,'' U.S. Environmental Protection Agency, EPA 505/2-90-001,
March 1991.
22. Wang, W.X., N.S. Fisher, and S.N. Luoma, ``Assimilation of
Trace Elements Ingested by the Mussell Mytilus edulis: Effects of
Algal Food Abundance,'' Mar. Ecol. Prog. Ser., 129:165-176, 1995.
23. Swartz, R.C., W.A. deBen, J.P. Jones, J.O. Lamberson, and
F.A. Cole, ``Phoxocephalid Amphipod Bioassay for Marine Sediment
Toxicity,'' In: R.D. Cardwell, R. Purdy, and R.C. Bahner (Eds.),
Aquatic Toxicology and Hazard Assessment, Seventh Symposium, ASTM
Special Technical Publication 854, 1984, pp. 284-307.
Compliance With Other Laws and Executive Orders
A. Executive Order 12866
Under Executive Order 12866 (58 FR 51735, October 4, 1993), the
Agency must determine whether the regulatory action is ``significant,''
and therefore subject to OMB review and the requirements of the
Executive Order. The Order defines ``significant regulatory action'' as
one that is likely to lead to a rule that may:
(1) Have an annual effect on the economy of $100 million or more,
or adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs, or the rights and obligations of
recipients thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
This rulemaking should have minimal impact on permittees. The
rulemaking merely clarifies ocean dumping testing requirements in a
manner consistent with current testing practices, under which the use
of two solid phase test species is permissible, provided that the two
species together represent the three categories of organisms specified
in the regulation. It thus has been determined that this rule is not a
``significant regulatory action'' under the terms of Executive Order
12866, and is therefore not subject to OMB review.
B. Regulatory Flexibility Act, as amended by the Small Business
Regulatory Enforcement Fairness Act of 1996
The Regulatory Flexibility Act (RFA) provides that, whenever an
agency promulgates a final rule under 5 U.S.C. Sec. 553, an agency must
prepare a regulatory flexibility analysis (RFA)
[[Page 51202]]
unless the head of the agency certifies that the proposed rule will not
have a significant economic impact on a substantial number of small
entities. 5 U.S.C. Secs. 604 & 605. EPA has determined that today's
rule will not have a significant economic impact on small entities
because the rule does not change current procedures for testing dredged
material in order to evaluate its suitability for ocean dumping. The
rule merely clarifies these testing requirements in a manner consistent
with the Agency's longstanding interpretation of its own regulations.
Consequently, EPA's action will not impose any additional economic
burden on small entities such as small private dredging operations that
seek authorization for the dumping of dredged materials. In fact, to
the extent that it relieves small entities of any potential for testing
more species than required by Agency practice, the rule reduces any
potential economic impact on small private dredgers. For this reason,
the Administrator certifies, pursuant to section 605(b) of the
Regulatory Flexibility Act, that the rule will not have a significant
economic impact on a substantial number of small entities.
C. Paperwork Reduction Act
The Paperwork Reduction Act, 44 U.S.C. 3501 et seq., is intended to
minimize the reporting and record-keeping burden on the regulated
community, as well as to minimize the cost of Federal information
collection and dissemination. In general, the Act requires that
information requests and record-keeping requirements affecting ten or
more non-Federal respondents be approved by the Office of Management
and Budget. Since today's rule would not establish or modify any
information or record-keeping requirements, it is not subject to the
requirements of the Paperwork Reduction Act.
D. The Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P.L.
104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, and tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year. Before promulgating an EPA rule for which a written statement
is needed, section 205 of the UMRA generally requires EPA to identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, most cost-effective or least burdensome alternative
that achieves the objectives of the rule. The provisions of section 205
do not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective or least burdensome alternative if the
Administrator publishes with the final rule an explanation why that
alternative was not adopted. Before EPA establishes any regulatory
requirements that may significantly or uniquely affect small
governments, including tribal governments, it must have developed under
section 203 of the UMRA a small government agency plan. The plan must
provide for notifying potentially affected small governments, enabling
officials of affected small governments to have meaningful and timely
input in the development of EPA regulatory proposals with significant
Federal intergovernmental mandates, and informing, educating, and
advising small governments on compliance with the regulatory
requirements.
Today's rule contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) for State, local, or tribal
governments or sections 202 and 205 of the UMRA. As is explained
elsewhere in this preamble, the rule does not change current procedures
for testing dredged material in order to evaluate its suitability for
ocean dumping. The rule merely clarifies these testing requirements in
a manner consistent with the Agency's longstanding interpretation of
its own regulations. Accordingly, it imposes no new enforceable duty on
any State, local or tribal governments or the private sector. Even if
today's rule did contain a Federal mandate, this rule will not result
in annual expenditures of $100 million or more for State, local, and
tribal governments in the aggregate, or the private sector. Thus
today's rule is not subject to the requirements of sections 202 and 205
of the UMRA.
For the foregoing reasons, EPA also has determined that this rule
contains no regulatory requirements that might significantly or
uniquely affect small governments. Thus the requirements of Section 203
of UMRA do not apply to today's rule.
E. Submission to Congress and the General Accounting Office
Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business
Regulatory Enforcement Fairness Act of 1996, EPA submitted a report
containing this rule and other required information to the U.S. Senate,
the U.S. House of Representatives and the Comptroller General of the
General Accounting Office prior to publication of the rule in today's
Federal Register. This rule is not a ``major rule'' as defined by 5
U.S.C. 804(2).
F. Administrative Procedure Act
The Administrative Procedure Act (APA), 5 U.S.C. 551 et seq.,
generally requires that substantive rules be published 30 days prior to
their effective date except:
``(1) A substantive rule which grants or recognizes an exemption or
relieves a restriction; * * *
or (3) as otherwise provided by the agency for good cause found and
published with the rule.'' 5 U.S.C. 553(d).
EPA is issuing today's final rule as immediately effective under
the provisions of 5 U.S.C. 553(d). As is explained elsewhere in this
preamble, today's final rule is intended to clarify the ocean dumping
regulations' testing requirements in a manner consistent with the
Agency's longstanding interpretation, existing testing guidance, and
current program practice. In the absence of an effective rule
clarifying the number of species to be used in ocean dumping testing,
Federal projects and permit applicants affected by the Third Circuit
opinion in Clean Ocean Action v. York, supra, will face uncertainties
in developing their future testing plans, and projects for which
testing has been completed will remain clouded by the uncertainties
stemming from the Third Circuit opinion. Because today's rule is
intended to confirm, not alter, the status quo, the Agency believes
that there is ``good cause'' under 5 U.S.C. 553(d)(3) to issue today's
rule as immediately effective. Moreover, today's rule confirms that the
ocean dumping regulations in fact allow the use of two species, not
three, in solid phase bioassay testing. The effect of today's rule is
to resolve uncertainties resulting from the opinion of the Third
Circuit in a manner that avoids unnecessary testing; thus, the
immediate effectiveness of today's rule also is warranted under 5
U.S.C. 553(d)(1).
List of Subjects in 40 CFR Part 227
Environmental impact statements, Environmental protection, Water
pollution control.
[[Page 51203]]
Dated: September 23, 1996.
Carol M. Browner,
Administrator.
For the reasons set out in this preamble, part 227 of title 40 of
the Code of Federal Regulations is amended as follows:
PART 227--[AMENDED]
1. The authority citation for part 227 continues to read as
follows:
Authority: 33 U.S.C. 1412 and 1418.
Sec. 227.27 [Amended]
2. Section 227.27 is amended in paragraph (d) by removing the words
``at least one species each representing'' and adding, in their place,
the words ``two or more species that together represent'' and by
removing the words ``species chosen from among the most sensitive
species'' and adding, in their place, the words ``characteristics.
These organisms shall be chosen from among the species that are most
sensitive for each type they represent, and that are documented in the
scientific literature and''.
[FR Doc. 96-24995 Filed 9-26-96; 11:20 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-24965 New Animal Drugs For Use In Animal Feeds; Monensin
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Page 51003]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24965]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Part 558
New Animal Drugs For Use In Animal Feeds; Monensin
AGENCY: Food and Drug Administration, HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Food and Drug Administration (FDA) is amending the animal
drug regulations to reflect approval of a supplemental new animal drug
application (NADA) filed by Elanco Animal Health, Division of Eli Lilly
and Co. The supplemental NADA provides for monensin Type A medicated
articles to be used to make free-choice Type C medicated feeds for
pasture cattle weighing less than 400 pounds for increased rate of
weight gain.
EFFECTIVE DATE: September 30, 1996.
FOR FURTHER INFORMATION CONTACT: Jack Caldwell, Center for Veterinary
Medicine (HFV-126), Food and Drug Administration, 7500 Standish Pl.,
Rockville, MD 20855, 301-594-1638.
SUPPLEMENTARY INFORMATION: Elanco Animal Health, Division of Eli Lilly
and Co., Lilly Corporate Center, Indianapolis, IN 46285, filed
supplemental NADA 95-735, which provides for use of a monensin Type A
medicated article to make a monensin Type C medicated feed/free-choice
mineral granule containing 1620 grams monensin per ton (g/t) to be fed
at 50 to 200 milligrams per head per day free-choice to pasture cattle
(slaughter, stocker, feeder, and dairy and beef replacement heifers)
for increased rate of weight gain.
The supplemental NADA provides for removal of the restriction
concerning use of the product for animals weighing less than 400 pounds
body weight. The supplemental NADA is approved as of September 30,
1996, and the regulations are amended in 21 CFR 558.355(f)(3)(x)(c) to
reflect the approval.
Under section 512(c)(2)(F)(iii) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 360b(c)(2)(F)(iii)), approval of this
supplemental NADA does not qualify for marketing exclusivity because
the supplement does not contain reports of new clinical or field
investigations (other than bioequivalence or residue studies) or new
human food safety studies (other than bioequivalence or residue
studies) essential to the approval and conducted or sponsored by the
applicant.
Approval of this supplemental NADA does not require a freedom of
information (FOI) summary because the approval relies on data and
information filed to support a previously approved supplement. FOI
summaries for prior approvals may be seen in the Dockets Management
Branch (HFA-305), Food and Drug Administration, 12420 Parklawn Dr., rm.
1-23, Rockville, MD 20857, from 9 a.m. to 4 p.m., Monday through
Friday.
The agency has determined under 21 CFR 25.24(d)(1)(i) 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 558
Animal drugs, Animal feeds
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
the authority delegated to the Commissioner of Food and Drugs and
redelegated to the Center for Veterinary Medicine, 21 CFR part 558 is
amended as follows:
PART 558--NEW ANIMAL DRUGS FOR USE IN ANIMAL FEEDS
1. The authority citation for 21 CFR part 558 continues to read as
follows:
Authority: Secs. 512, 701 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 360b, 371).
Sec. 558.355 [Amended]
2. Section 558.355 Monensin is amended in paragraph (f)(3)(x)(c) in
the first sentence by removing the phrase ``weighing more than 400
pounds''.
Dated: September 3, 1996.
Robert C. Livingston,
Director, Office of New Animal Drug Evaluation, Center for Veterinary
Medicine.
[FR Doc. 96-24965 Filed 9-27-96; 8:45 am]
BILLING CODE 4160-01-F
Complete official Federal Register PDF
FR Doc. 96-24958 List of Office of Management and Budget Approved Information Collection Requirements
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 51022-51029]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24958]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 0
[DA96-1614]
List of Office of Management and Budget Approved Information
Collection Requirements
AGENCY: Federal Communications Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This action amends the Commission's list of Office of
Management and Budget approved information collection requirements
contained in the Commission's Rules.
This action will provide the public with a current list of
Commission public information collection requirements approved by OMB
under the Paperwork Reduction Act of 1995.
EFFECTIVE DATE: September 30, 1996.
FOR FURTHER INFORMATION CONTACT: Dorothy Conway, Office of Managing
Director, (202) 418-0217.
SUPPLEMENTARY INFORMATION:
Order
By the Managing Director:
[[Page 51023]]
Adopted September 20, 1996.
Released: September 9, 1996.
1. Section 3507(a)(3) of the Paperwork Reduction Act of 1995, 44
U.S.C. 3507(a)(3), requires agencies to display a current control
number assigned by the Director of the Office of Management and Budget
(``OMB'') for each agency information collection requirement.
2. Section 0.408 of the Commission's Rules displays the OMB control
numbers assigned to the Commission's public information collection
requirements that have been reviewed and approved by OMB.
3. Authority for this action is contained in Section 4(i) of the
Communications Act of 1934 (47 U.S.C. 154(i)), as amended, and Section
0.231(b) of the Commission's Rules. Since this amendment is a mater of
agency organization procedure or practice, the notice and comment and
effective date provisions of the Administrative Procedure Act do not
apply. See 5 U.S.C. Section 553(b)(A)(d).
4. Accordingly, it is ordered, that Section 0.408 of the Rules is
REVISED as set forth in the revised text, effective on the date of
publication in the Federal Register.
5. Persons having questions on this matter should contact Dorothy
Conway at (202) 418-0217.
List of Subjects in 47 CFR Part 0
Reporting and recordkeeping requirements.
Federal Communications Commission
Andrew S. Fishel,
Managing Director.
Part 0 of Chapter I of Title 47 of Code of Federal Regulations is
amended as follows:
1. Part 0--The authority citation for Part 0 continues to read:
Authority: Secs. 4, 303, 48 Stat. 1066, 1082, as revised; 47
U.S.C. 154, 303 unless otherwise noted.
2. Section 0.408 is revised to read as follows:
Sec. 0.408 OMB control numbers and expiration dates assigned pursuant
to the Paperwork Reduction Act.
(a) Purpose. This section collects and displays the control numbers
and expiration dates for the Commission information collection
requirements assigned by the Office of Management and Budget (``OMB'')
pursuant to the Paperwork Reduction Act of 1995, Public Law 104-13. The
Commission intends that this section comply with the requirement that
agencies display current control numbers and expiration dates assigned
by the Director of OMB for each approved information collection
requirement. Not withstanding any other provisions of law, no person
shall be subject to any penalty for failing to comply with a collection
of information subject to the Paperwork Reduction Act (PRA) that does
not display a valid control number. Questions concerning the OMB
control numbers and expiration dates should be directed to the Records
Management Branch, Federal Communications Commission, Washington, DC
20554.
(b) Display.
------------------------------------------------------------------------
FCC form number or 47 CFR section or part,
OMB control docket number or title identifying the OMB expiration
No. collection date
------------------------------------------------------------------------
3060-0003.. FCC 610.................................... 9/30/96
3060-0004.. Sec. 1.1307, 1.1308, 1.311................. 11/30/96
3060-0009.. FCC 316.................................... 5/31/99
3060-0010.. FCC 323.................................... 7/31/98
3060-0012.. Parts 21, 23, 25 and FCC 701............... 3/31/97
3060-0016.. FCC 346.................................... 4/30/97
3060-0017.. FCC 347.................................... 4/30/97
3060-0019.. FCC 403.................................... 10/31/97
3060-0020.. FCC 406.................................... 5/31/99
3060-0021.. FCC 480.................................... 12/31/97
3060-0022.. FCC 610A................................... 8/31/98
3060-0024.. Sec. 76.29................................. 8/31/98
3060-0025.. FCC 755.................................... 7/31/97
3060-0027.. FCC 301.................................... 8/31/98
3060-0028.. FCC 313.................................... 2/28/99
3060-0029.. FCC 302-TV................................. 1/31/97
3060-0031.. FCC 314.................................... 8/31/98
3060-0032.. FCC 315.................................... 8/31/98
3060-0034.. FCC 340.................................... 11/30/97
3060-0035.. FCC 313-R.................................. 3/31/97
3060-0040.. FCC 404/404-R.............................. 7/31/97
3060-0041.. FCC 301-A.................................. 3/31/97
3060-0048.. FCC 704.................................... 3/31/97
3060-0049.. FCC 753.................................... 5/31/97
3060-0050.. FCC 801.................................... 1/31/98
3060-0051.. FCC 405-B.................................. 8/31/97
3060-0053.. FCC 703.................................... 10/31/96
3060-0054.. FCC 820.................................... 2/28/99
3060-0055.. FCC 327.................................... 2/31/96
3060-0056.. FCC 730.................................... 3/31/97
3060-0057.. FCC 731.................................... 9/30/96
3060-0059.. FCC 740.................................... 7/31/97
3060-0061.. FCC 325.................................... 10/31/96
3060-0062.. FCC 330.................................... 8/31/98
3060-0064.. FCC 402.................................... 6/30/98
3060-0065.. FCC 422.................................... 9/30/98
3060-0066.. FCC 330-R.................................. 4/30/97
3060-0068.. FCC 702.................................... 8/31/97
3060-0069.. FCC 756.................................... 9/30/96
3060-0072.. FCC 409.................................... 8/31/98
[[Page 51024]]
3060-0073.. FCC 808.................................... 7/31/97
3060-0075.. FCC 345.................................... 12/31/96
3060-0076.. FCC 395.................................... 12/31/96
3060-0079.. FCC 610-B.................................. 8/31/99
3060-0084.. FCC 323-E.................................. 4/30/99
3060-0085.. FCC 65..................................... 6/30/97
3060-0089.. FCC 503.................................... 6/30/98
3060-0090.. FCC 410.................................... 11/30/96
3060-0093.. FCC 405.................................... 3/31/97
3060-0095.. FCC 395-A, 395-AS.......................... 6/30/99
3060-0096.. FCC 506, 506-A............................. 8/31/99
3060-0099.. FCC M...................................... 8/31/99
3060-0104.. FCC 572.................................... 6/30/97
3060-0105.. FCC 430.................................... 2/28/99
3060-0106.. Sec. 43.61, FCC 43.61...................... 8/31/98
3060-0107.. FCC 405-A.................................. 12/31/96
3060-0108.. FCC 201.................................... 1/31/97
3060-0110.. FCC 303-S.................................. 8/31/99
3060-0113.. FCC 396.................................... 12/31/96
3060-0119.. Sec. 90.145................................ 2/28/97
3060-0120.. FCC 396-A.................................. 11/30/96
3060-0126.. Sec. 73.1820............................... 8/31/99
3060-0127.. FCC 1046................................... 4/30/97
3060-0128.. FCC 574.................................... 6/30/98
3060-0132.. FCC 1068A.................................. 12/31/97
3060-0134.. FCC 574-R.................................. 5/31/99
3060-0136.. FCC 574-T.................................. 3/31/98
3060-0139.. FCC 854.................................... 6/30/98
3060-0141.. FCC 402-R.................................. 5/31/97
3060-0147.. Sec. 64.804................................ 11/30/96
3060-0149.. Part 63, Sec. 214, 63.01-63.601............ 6/30/98
3060-0157.. Sec. 73.99................................. 3/31/97
3060-0160.. Sec. 73.158................................ 2/28/99
3060-0161.. Sec. 73.61................................. 11/30/96
3060-0164.. Sec. 25.300................................ 5/31/97
3060-0165.. Part 41 Sec. 41.31......................... 11/30/96
3060-0166.. Part 42.................................... 8/31/98
3060-0168.. Sec. 43.43................................. 10/31/96
3060-0169.. Sec. 43.51, 43.53.......................... 8/31/98
3060-0170.. Sec. 73.1207............................... 1/31/96
3060-0171.. Sec. 73.1125............................... 2/28/99
3060-0173.. Sec. 73.1207............................... 12/31/97
3060-0174.. Sec. 73.1212............................... 3/31/99
3060-0175.. Sec. 73.1250............................... 11/30/96
3060-0176.. Sec. 73.1510............................... 1/31/97
3060-0178.. Sec. 73.1560............................... 1/31/97
3060-0179.. Sec. 73.1590............................... 3/31/98
3060-0180.. Sec. 73.1610............................... 1/31/99
3060-0181.. Sec. 73.1615............................... 1/31/97
3060-0182.. Sec. 73.1620............................... 12/31/97
3060-0184.. Sec. 73.1740............................... 1/31/99
3060-0185.. Sec. 73.3613............................... 5/31/98
3060-0187.. Sec. 73.3594............................... 12/31/97
3060-0188.. Sec. 73.3550............................... 7/31/97
3060-0190.. Sec. 73.3544C.............................. 12/31/97
3060-0192.. Sec. 87.103................................ 11/30/97
3060-0194.. Sec. 74.21................................. 1/31/99
3060-0202.. Sec. 87.37................................. 12/31/97
3060-0204.. Sec. 90.38(B).............................. 4/30/99
3060-0206.. Part 21.................................... 7/31/97
3060-0207.. Sec. 73.961 & 73.932....................... 2/28/97
3060-0208.. Sec. 73.1870............................... 12/31/96
3060-0209.. Sec. 73.1920............................... 11/30/96
3060-0210.. Sec. 73.1930............................... 3/31/98
3060-0211.. Sec. 73.1943............................... 5/31/98
3060-0212.. Sec. 73.2080............................... 11/30/96
3060-0213.. Sec. 73.3525B.............................. 7/31/97
3060-0214.. Sec. 73.3526............................... 7/31/99
3060-0215.. Sec. 73.3527............................... 11/30/96
3060-0216.. Sec. 73.3538............................... 11/30/98
3060-0218.. Sec. 90.41(b).............................. 12/31/97
3060-0219.. Sec. 90.49(b).............................. 11/30/96
3060-0221.. Time in which stations must be placed in
operation (exceptions).................... 12/31/97
[[Page 51025]]
3060-0222.. Sec. 97.213................................ 12/31/97
3060-0223.. Sec. 90.129(B)............................. 5/31/99
3060-0224.. Sec. 90.151................................ 2/28/98
3060-0225.. Sec. 90.131(B)............................. 11/30/96
3060-0226.. Sec. 90.135 (d) & (e)...................... 2/28/98
3060-0228.. Sec. 80.59................................. 8/31/98
3060-0233.. Part 36.................................... 7/31/99
3060-0236.. Sec. 74.703................................ 7/31/99
3060-0240.. Sec. 74.651................................ 3/31/97
3060-0241.. Sec. 74.633................................ 3/31/97
3060-0242.. Sec. 74.604................................ 3/31/97
3060-0243.. Sec. 74.551................................ 5/31/99
3060-0245.. Sec. 74.537................................ 5/31/99
3060-0246.. Sec. 74.452................................ 7/31/97
3060-0248.. Sec. 74.751................................ 7/31/99
3060-0249.. Sec. 74.781................................ 11/30/96
3060-0250.. Sec. 74.784................................ 11/30/96
3060-0251.. Sec. 74.833................................ 11/30/96
3060-0253.. Part 68 Sec. 68.106, 68.108, 68.110........ 2/28/98
3060-0254.. Sec. 74.433................................ 7/31/97
3060-0258.. Sec. 90.176................................ 11/30/96
3060-0259.. Sec. 90.263................................ 12/31/97
3060-0260.. Sec. 90.239(D)............................. 12/31/95
3060-0261.. Sec. 90.215................................ 12/31/97
3060-0262.. Sec. 90.179................................ 11/30/98
3060-0263.. Sec. 90.177................................ 11/30/96
3060-0264.. Sec. 80.413................................ 12/31/97
3060-0265.. Sec. 80.868................................ 8/31/98
3060-0270.. Sec. 90.443................................ 2/28/97
3060-0272.. Sec. 94.31................................. 3/31/98
3060-0274.. Sec. 94.45................................. 2/28/97
3060-0280.. Sec. 90.633 (F) & (G)...................... 5/31/99
3060-0281.. Sec. 90.651................................ 2/28/98
3060-0282.. Sec. 94.17................................. 5/31/97
3060-0284.. Sec. 94.25 (F) (G) & (I)................... 2/28/98
3060-0286.. Sec. 80.302................................ 12/31/96
3060-0287.. Sec. 78.69................................. 8/31/98
3060-0288.. Sec. 78.33................................. 12/31/96
3060-0289.. Sec. 76.60................................. 2/28/99
3060-0290.. Sec. 90.5171............................... 5/31/99
3060-0291.. Sec. 90.477................................ 2/28/98
3060-0292.. Part 69.................................... 5/31/97
3060-0295.. Sec. 90.607 (b)(1) & (c)(1)................ 12/31/97
3060-0297.. Sec. 80.503................................ 12/31/97
3060-0298.. Part 61.................................... 7/31/97
3060-0300.. Sec. 94.107................................ 2/28/98
3060-0302.. Sec. 97.9.................................. 12/31/95
3060-0303.. Sec. 97.5.................................. 12/31/95
3060-0307.. Sec. 90.629(A)............................. 4/30/99
3060-0308.. Sec. 90.505................................ 2/28/98
3060-0309.. Sec. 74.1281............................... 2/28/99
3060-0310.. Sec. 76.12................................. 12/31/96
3060-0311.. Sec. 76.54................................. 11/30/96
3060-0313.. Sec. 76.207................................ 5/31/98
3060-0314.. Sec. 76.209................................ 12/31/97
3060-0315.. Sec. 76.221................................ 11/30/96
3060-0316.. Sec. 76.305................................ 5/31/98
3060-0318.. FCC 489.................................... 10/31/97
3060-0319.. FCC 490.................................... 10/31/97
3060-0320.. Sec. 73.1350............................... 2/28/98
3060-0321.. Sec. 73.68................................. 2/28/99
3060-0325.. Sec. 80.605................................ 6/30/99
3060-0326.. Sec. 73.69................................. 11/30/96
3060-0329.. Sec. 2.955................................. 4/30/99
3060-0331.. Sec. 76.615................................ 5/31/98
3060-0332.. Sec. 76.614................................ 6/30/98
3060-0339.. Sec. 78.11................................. 1/31/97
3060-0340.. Sec. 73.51................................. 8/31/97
3060-0341.. Sec. 73.1680............................... 8/31/97
3060-0342.. Sec. 74.1284............................... 7/31/97
3060-0343.. Sec. 25.140................................ 10/31/96
3060-0344.. Sec. 1.1705................................ 8/31/97
3060-0345.. Sec. 1.1709................................ 8/31/97
[[Page 51026]]
3060-0346.. Sec. 78.27................................. 12/31/97
3060-0347.. Sec. 97.311................................ 9/30/97
3060-0348.. Sec. 76.79................................. 12/31/97
3060-0349.. Sec. 76.73 and 76.75....................... 11/30/97
3060-0355.. FCC 492 and FCC 492A....................... 5/31/98
3060-0357.. Sec. 63.701................................ 5/31/98
3060-0360.. Sec. 80.409(c)............................. 7/31/98
3060-0361.. Sec. 80.29................................. 5/31/98
3060-0362.. Sec. 80.401................................ 8/31/99
3060-0364.. Sec. 80.409 (d) and (e).................... 7/31/98
3060-0370.. Part 32.................................... 9/30/98
3060-0374.. Sec. 73.1690............................... 11/30/98
3060-0383.. Part 25.................................... 11/30/96
3060-0384.. Sec. 64.904................................ 2/28/99
3060-0386.. Sec. 73.1635............................... 5/31/99
3060-0387.. Sec 15.201(d).............................. 5/31/99
3060-0388.. Sec. 80.227................................ 6/30/99
3060-0390.. FCC 395B................................... 11/30/96
3060-0391.. Monitoring Program for Impact of Federal
State Joint Board......................... 8/31/98
3060-0392.. Sec. 1.1401-1.1416......................... 2/28/97
3060-0393.. Sec. 73.45................................. 11/30/96
3060-0394.. Sec. 1.420................................. 11/30/96
3060-0395.. Sec. 43.21 and 43.22 FCC 43-02, FCC 43-05
and FCC 43-07............................. 11/30/96
3060-0397.. Sec. 15.7(A)............................... 11/30/96
3060-0398.. Sec. 2.943, 15.117(G)(2), 80.1053.......... 4/30/99
3060-0400.. Tariff Review Plan......................... 9/30/96
3060-0402.. FCC 494.................................... 5/31/97
3060-0403.. FCC 494-A.................................. 3/31/97
3060-0404.. FCC 350.................................... 1/31/97
3060-0405.. FCC 349.................................... 9/30/98
3060-0407.. FCC 307.................................... 3/31/97
3060-0410.. FCC 495A and FCC 495B...................... 3/31/97
3060-0411.. Sec. 1.720-1.735........................... 3/31/98
3060-0414.. Terrain Shielding Policy................... 6/30/97
3060-0419.. Sec. 76.94, 76.95, 76.155, 76.156, 76.157,
76.159.................................... 9/30/98
3060-0421.. New Service Reporting Requirements under
Price Cap Regulation...................... 2/28/99
3060-0422.. Sec. 68.5.................................. 5/31/98
3060-0423.. Sec. 73.3588............................... 11/30/96
3060-0425.. Sec. 74.913................................ 8/31/98
3060-0427.. Sec. 73.3523............................... 7/31/97
3060-0430.. Sec. 1.1206................................ 5/31/98
3060-0433.. FCC 320.................................... 1/30/99
3060-0434.. Sec. 90.19(F)(7)........................... 5/31/99
3060-0435.. Sec. 80.361................................ 10/31/96
3060-0436.. Sec. 15.214 and 68.200..................... 5/31/99
3060-0438.. FCC 464.................................... 11/30/97
3060-0439.. Regulations Concerning Indecent
Communications by Telephone............... 2/28/98
3060-0441.. Sec. 90.621(B)(4).......................... 8/31/99
3060-0443.. FCC 572C................................... 5/31/99
3060-0444.. FCC 800A................................... 5/31/99
3060-0446.. Sec. 1.402................................. 9/30/98
3060-0447.. Sec. 25.134................................ 12/31/97
3060-0448.. Sec. 63.07................................. 11/30/96
3060-0449.. Sec. 1.65(c)............................... 1/31/99
3050-0450.. Detariffing and Installation of Inside
Wiring Services Reports on State
Regulatory Activities..................... 2/28/98
3060-0452.. Sec. 73.3589............................... 11/30/96
3060-0454.. Regulation of International Accounting
Rates..................................... 2/28/98
3060-0461.. Sec. 90.173................................ 12/31/96
3060-0463.. Telecommunications Services for Individuals
with Hearing and Speech Disabilities...... 6/30/97
3060-0465.. Sec. 74.985................................ 1/31/97
3060-0466.. Sec. 74.1283............................... 2/28/97
3060-0470.. Computer III Remand Proceeding: BOC
Safeguards and Tier 1 LEC Safeguards and
Implementation of Further Costs, CC Docket
90-623.................................... 8/31/98
3060-0472.. FCC 6027I.................................. 2/28/97
3060-0473.. Sec. 74.1251............................... 2/28/97
3060-0474.. Sec. 74.1263............................... 3/31/97
3060-0475.. Sec. 90.713................................ 12/31/98
3060-0478.. Informational Tariffs...................... 3/31/97
3060-0479.. Sec. 73.661 and 73.3526(A)(11)............. 11/30/96
3060-0480.. FCC 493.................................... 5/31/97
3060-0481.. FCC 452R................................... 8/31/97
3060-0483.. Sec. 73.687................................ 7/31/97
3060-0484.. Sec. 63.100................................ 2/28/98
[[Page 51027]]
3060-0486.. Document Index Terms....................... 12/31/97
3060-0488.. Sec. 73.30................................. 12/31/97
3060-0489.. Sec. 73.37................................. 12/31/97
3060-0490.. Sec. 74.902................................ 12/31/97
3060-0491.. Sec. 74.991................................ 12/31/97
3060-0492.. Sec. 74.992................................ 12/31/97
3060-0493.. Sec. 74.986................................ 12/31/97
3060-0494.. Sec. 74.990................................ 12/31/97
3060-0496.. FCC Report 43-08........................... 11/30/97
3060-0497.. FCC 91 FCC 92.............................. 8/31/98
3060-0498.. FCC 90..................................... 8/31/98
3060-0500.. Sec. 76.607................................ 5/31/98
3060-0501.. Sec. 76.206................................ 5/31/98
3060-0502.. Sec. 73.1942............................... 5/31/98
3060-0504.. Sec. 90.658................................ 8/31/98
3060-0506.. FCC 302-FM................................. 1/31/97
3060-0508.. Rewrite and Update of Part 22, of the
Public Mobile Service Rules, CC Docket 92-
115....................................... 10/31/97
3060-0509.. FCC Reports FCC 21-01, FCC 22-01, FCC 25-01
and FCC 25-02............................. 8/31/98
3060-0511.. FCC Report 43-04........................... 11/30/96
3060-0512.. FCC Report 43-01........................... 8/31/98
3060-0513.. FCC Report 43-03........................... 11/30/96
3060-0514.. Sec. 43.21(c).............................. 3/31/97
3060-0515.. Sec. 43.21(d).............................. 8/31/98
3060-0516.. Revision of Radio Rules and Policies, Time
Brokerage Ruling.......................... 11/30/98
3060-0519.. Rules and Regulations Implementing the
Telephone Consumer Protection Act of 1991. 9/30/98
3060-0520.. Sec. 90.127(E)............................. 2/28/99
3060-0526.. Density Pricing Zone Plans, Expanded
Interconnection with Local Telephone
Facilities (CC Docket 91-141)............. 1/31/99
3060-0532.. Sec. 2.975(A)(8) and 2.1033(B)(12)......... 5/31/99
3060-0536.. FCC 431.................................... 6/30/99
3060-0537.. Sec. 13.217................................ 5/31/99
3060-0539.. FCC 493, 430, and 405...................... 2/28/97
3060-0540.. Tariff Filing Requirement for Nondominant
Common Carriers........................... 2/28/99
3060-0541.. FCC 464-A.................................. 2/28/99
3060-0542.. Frequency Coordinator Evaluation........... 5/31/98
3060-0543.. Part 1, 2, and 21.......................... 7/31/99
3060-0544.. Sec. 76.701................................ 6/30/99
3060-0546.. Sec. 76.59................................. 6/30/99
3060-0547.. Sec. 76.61 and 76.7........................ 9/30/98
3060-0548.. Sec. 76.302 and 76.56...................... 9/30/98
3060-0549.. FCC 329.................................... 12/31/96
3060-0550.. FCC 328.................................... 8/31/99
3060-0551.. Sec. 76.1002............................... 9/30/96
3060-0552.. Sec. 76.1003............................... 9/30/96
3050-0554.. Section 87.199............................. 6/30/99
3060-0556.. Sec. 80.1061............................... 6/30/99
3060-0560.. Sec. 76.911................................ 12/31/97
3060-0561.. Sec. 76.913................................ 12/31/97
3060-0562.. Sec. 76.916................................ 12/31/97
3060-0563.. Sec. 76.915................................ 6/30/97
3060-0564.. Sec. 76.924................................ 8/31/99
3060-0565.. Sec. 76.944................................ 6/30/97
3060-0567.. Sec. 76.962................................ 5/31/98
3060-0568.. Sec. 76.970................................ 7/31/99
3060-0569.. Sec. 76.975................................ 6/30/97
3060-0570.. Sec. 76.982................................ 12/31/97
3060-0571.. FCC 393.................................... 7/31/99
3060-0572.. Sec. 43.82................................. 5/31/99
3060-0573.. FCC 394.................................... 9/30/96
3060-0574.. FCC 395-M.................................. 6/30/99
3060-0576.. FCC 610R................................... 8/31/99
3060-0577.. Expanded Interconnection with Local
Telephone Company Facilities.............. 9/30/96
3060-0579.. Expanded Interconnection with Local
Telephone Company Facilities for
Interstate Switched Transport Service..... 9/30/96
3060-0580.. Sec. 76.504................................ 1/31/97
3060-0581.. Sec. 76.503................................ 1/31/97
3060-0582.. Sec. 76.1302............................... 1/31/97
3060-0583.. Amendment to Part 32 and 64 of the
Commission's Rules to Account for
Transactions Between Carriers and their
Nonregulated Affiliates, CC Docket 93-251. 10/31/96
3060-0584.. FCC 45 FCC 44.............................. 7/31/99
3060-0589.. FCC 159, and 159C.......................... 9/30/98
3060-0591.. Amendment to the Commission's Rules to
Establish Rules and Policies Pertaining to
a Mobile Satellite Service in the 1610-
1626.5/2483.5-2500 MHZ Frequency Bands.... 2/28/97
3060-0593.. FCC 1215................................... 4/30/97
3060-0594.. FCC 1220................................... 4/30/97
[[Page 51028]]
3060-0595.. FCC 1210................................... 2/28/98
3060-0596.. FCC 1225................................... 4/30/97
3060-0597.. FCC 1201................................... 4/30/97
3060-0599.. Implementation of Sections 3(n) and 322 of
the Communications Act, GN 93-253......... 4/30/97
3060-0600.. FCC 175 and 175-S.......................... 9/30/98
3060-0601.. FCC 1200................................... 4/30/97
3060-0602.. Sec. 76.917................................ 4/30/97
3060-0604.. FCC 401, 489, 490, 405, 430, and 854....... 5/31/97
3060-0607.. Sec. 76.922................................ 2/28/98
3060-0608.. Sec. 76.964(B)............................. 8/31/97
3060-0609.. Sec. 76.934(D)............................. 8/31/97
3060-0610.. Sec. 76.958................................ 8/31/97
3060-0611.. Sec. 74.783................................ 7/31/97
3060-0613.. Expanded Interconnection with Local
Telephone Company Facilities, CC Docket 91-
141....................................... 9/30/98
3060-0615.. FCC 405S................................... 8/31/97
3060-0621.. FCC 401, 405, 430, 489, 490 and 854........ 10/31/97
3060-0623.. FCC 600.................................... 2/28/99
3060-0624.. Amendment of the Commission's Rules to
Establish New Narrowband Personal
Communications Services, ET Docket 92-100
and GN Docket 90-314...................... 12/31/97
3060-0625.. Amendment of the Commission's Rules to
Establish New Personal Communications
Services, GN Docket 90-314................ 11/30/97
3060-0626.. Implementation of Sections 3(N) and 332 of
the Communications Act, GN Docket 93-252.. 11/30/97
3060-0627.. FCC 302-AM................................. 1/31/98
3060-0629.. Sec. 76.987(G)............................. 2/28/98
3060-0630.. Sec. 73.62................................. 2/28/98
3060-0631.. Sec. 73.1300............................... 2/28/98
3060-0632.. Sec. 73.1570............................... 2/28/98
3060-0633.. Sec. 73.1230, 74.165, 74.432, 74.564,
74.664, 74.765, 74.832, 74.965 and 74.1265 2/28/98
3060-0634.. Sec. 73.691................................ 2/28/98
3060-0635.. FCC 610-V.................................. 4/30/98
3060-0636.. Part 2 and 18.............................. 6/30/98
3060-0638.. Sec. 76.934(F)(1).......................... 5/31/98
3060-0639.. Implementation of Section 309(J) of the
Communications Act Competitive Bidding, PP
93-253.................................... 4/30/98
3060-0640.. FCC 800I................................... 7/31/98
3060-0641.. FCC 2181................................... 7/31/98
3060-0642.. FCC Survey of Cable Industry Costs......... 12/31/96
3060-0643.. Part 65 and 69............................. 8/31/98
3060-0644.. FCC 1230................................... 8/31/98
3060-0648.. Sec. 21.902................................ 9/30/98
3060-0649.. Sec. 76.58................................. 9/30/98
3060-0650.. Sec. 76.502................................ 9/30/98
3060-0651.. Sec. 76.9.................................. 9/30/98
3060-0652.. Sec. 76.309 and 76.964..................... 9/30/98
3060-0653.. Sec. 64.703(b)............................. 9/30/98
3060-0654.. FCC 304.................................... 9/30/98
3060-0655.. Request for Waivers of Regulatory Fees
Predicated on Allegations of Financial
Hardship, MM Docket 94-19................. 9/30/98
3060-0656.. FCC 175-M.................................. 9/30/98
3060-0657.. Sec. 21.956................................ 9/30/98
3060-0658.. Sec. 21.960................................ 9/30/98
3060-0660.. Sec. 21.937................................ 9/30/98
3060-0661.. Sec. 21.931................................ 9/30/98
3060-0662.. Sec. 21.930................................ 9/30/98
3060-0663.. Sec. 21.934................................ 9/30/98
3060-0664.. FCC 304A................................... 9/30/98
3060-0665.. Sec. 65.707................................ 9/30/98
3060-0666.. Sec. 64.703(a)............................. 9/30/98
3060-0667.. Sec. 76.630................................ 9/30/98
3060-0668.. Sec. 76.936................................ 9/30/98
3060-0669.. Sec. 76.946................................ 9/30/98
3060-0670.. Sec. 76.986................................ 9/30/98
3060-0672.. Sec. 76.951................................ 9/30/98
3060-0673.. Sec. 76.956................................ 9/30/98
3060-0674.. Sec. 76.931 and 76.932..................... 9/30/98
3060-0675.. RAO Letter 25.............................. 9/30/98
3060-0676.. Sec. 64.1100............................... 9/30/98
3060-0678.. FCC 312.................................... 8/31/99
3060-0679.. Streamlining the Commission's Rules and
Regulations for Satellite Application and
Licensing Procedures...................... 9/30/98
3060-0680.. FCC 43-09A, FCC 43-09B..................... 12/31/96
3060-0681.. Toll-Free Access Codes..................... 2/28/99
3060-0682.. Sec. 63.16................................. 1/31/99
3060-0683.. Direct Broadcast Satellite Service......... 1/31/99
3060-0684.. Cost Sharing Plan for Microwave Relocation. 8/31/99
3060-0685.. FCC 1240................................... 7/31/99
[[Page 51029]]
3060-0686.. Steamlining the International Section 214
Authorization Process and Tariff
Requirements.............................. 6/30/99
3060-0687.. Acess to Telecommunications Equipment and
Services by Persons with Disabilities..... 2/28/99
3060-0688.. FCC 1235................................... 2/28/99
3060-0690.. ET Docket 95-183........................... 4/30/99
3060-0691.. Amendment to Part 2 and 90 of the
Commission's Rules to Provide for the Use
of 200 Channels Outside the Designated
Filing Areas in the 896-901 MHZ Bands
Allotted to Specialized Mobile............ 6/30/99
3060-0692.. Sec. 76.802................................ 4/30/99
3060-0695.. WT Docket No. 96-1......................... 4/30/99
3060-0696.. Amendment of the Commission's Rules to
Permit Flexible Service Offerings in the
Commercial Mobile Radio Service........... 4/30/97
3060-0697.. Revision of Part 22 and Part 90 of the
Commission's Rules to Facilitate Future
Development of Paging Systems............. 4/30/99
3060-0698.. Amendment of the Commission's Rules to
Establish a Radio Astronomy Coordination
Zone in Puerto Rico....................... 5/31/99
3060-0699.. MM Docket 96-16............................ 5/31/99
3060-0700.. FCC 1275................................... 8/31/99
3060-0701.. CC Docket 96-23............................ 5/31/99
3060-0702.. Amendment to Part 20 and 24 of the
Commission's Rules Broadband PCS
Competitive Bidding and the Commercial
Mobile Radio Service Spectrum Cap......... 5/31/99
3060-0703.. CS Docket 96-57, FCC 1205.................. 6/30/99
3060-0704.. CC Docket 96-61............................ 6/30/99
3060-0706.. Order and NPRM on Cable Reform:
Implementation of the Telecommunications
Act of 1996............................... 10/31/96
3060-0707.. Restriction on Over-the Air Reception
Devices (NPRM)............................ 6/30/96
3060-0708.. NPRM in MM Docket 96-58.................... 7/31/99
3060-0709.. Revision to Part 22 and Part 90 to
Facilitate Future Development of the
Pageing System and Implementation of
Section 309(j) of the Communications Act.. 10/31/96
3060-0710.. CC Docket 96-98............................ 2/28/97
3060-0711.. GC Docket 96-101........................... 7/31/99
3060-0712.. Petition for Declaratory Ruling by Inmate
Calling Services Providers Task Force..... 7/31/99
3060-0713.. Alternative Broadcast Inspection Program... 7/31/99
3060-0714.. Antenna Registration Number Required as
Supplement to Application Forms........... 9/30/96
3060-0715.. CC 96-115.................................. 8/31/99
3060-0716.. Section 73.1630............................ 8/31/99
3060-0719.. Proposed Quarterly Report of IntraLATA
Carriers Listing Pay Phone Automatic
Numbering Identification.................. 8/31/99
3060-0722.. Proposed Initial Report of Bell Operating
Companies of Comparably Efficient
Interconnect Plans........................ 8/31/99
3060-0723.. Proposed Public Disclosure of Network
Information by Bell Operating Companies... 8/31/99
3060-0724.. Proposed Annual Report of Interexchange
Carriers Listing the Compensation Amount
Paid to Pay Phone Providers and the Number
of Payees................................. 8/31/99
3060-0725.. Proposed Annual Filing of Nondiscrimination
Reports (On Quality of Service,
Installation, and Maintenance) by BOC's... 8/31/99
3060-0726.. Proposed Quarterly Report of Interexchange
Carriers Listing the Number of Dial-Around
Calls for which Compensation is Being Paid
to Pay Phone Owners....................... 8/31/99
3060-0728.. Supplemental Information Requesting
Taxpayer Identifying Numbers for Debt
Collection................................ 9/30/96
3060-0729.. Bell Operating Provision of Out-of-Region
Interexchange Services (Affiliated Company
Recordkeeping Requirements)............... 10/31/96
3060-0730.. Toll-Free Service Access Codes, 800/888
Number Release Procedures................. 10/31/96
3060-0733.. Implementations of Section 302 of the
Telecommunications Act of 1996............ 10/31/96
------------------------------------------------------------------------
[FR Doc. 96-24958 Filed 9-27-96; 8:45 am]
BILLING CODE 6712-01-M/P
Complete official Federal Register PDF
FR Doc. 96-24944 Distribution of Chemical Import/Export Declaration
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 51003-51004]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24944]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
21 CFR Part 1313
[DEA Number 110F]
RIN 1117-AA21
Distribution of Chemical Import/Export Declaration
AGENCY: Drug Enforcement Administration (DEA), Justice.
ACTION: Final rule.
-----------------------------------------------------------------------
[[Page 51004]]
SUMMARY: DEA is amending its regulations to clarify the distribution
requirements for the Precursor and Essential Chemical Import/Export
Declaration (DEA Form 486). The regulations do not specify that a copy
of the form must be provided to the United States Customs Service
(Customs) on or before the day of exportation, as required in the
instructions on the form. This amendment to the regulations will
eliminate any possibility for confusion as to when the form must be
provided to Customs.
EFFECTIVE DATE: November 29, 1996.
FOR FURTHER INFORMATION CONTACT: G. Thomas Gitchel, Chief, Liaison and
Policy Section, Office of Diversion Control, Drug Enforcement
Administration, Washington, DC 20537, Telephone (202) 307-7297.
SUPPLEMENTARY INFORMATION: On September 23, 1993, DEA published a
notice of proposed rulemaking (NPRM) in the Federal Register (58 FR
49455) regarding the distribution of the Precursor and Essential
Chemical Import/Export Declaration (DEA Form 486). The NPRM pointed out
a discrepancy between the instructions contained in the DEA Form 486
and the requirements of Title 21, Code of Federal Regulations (CFR),
Sec. 1313.23(c). The instructions require that Copy 3 of the form be
provided to Customs on or before the day of exportation. Section
1313.23(c) provides the same instructions but omits the phrase on or
before the day of exportation. To avoid the possibility of confusion
regarding when Copy 3 of the form should be provided to Customs, DEA
proposed to amend Sec. 1313.23(c) to be consistent with the
instructions contained in the form. In addition, while it could not be
included as a requirement, DEA also proposed to include a suggestion in
the section that the exporter submit the Shipper's Export Document on
or before the day of exportation, in order to facilitate the
uninterrupted export of the goods.
No comments or objections were received regarding the proposed
amendment to the regulations. Therefore, DEA is amending 21 CFR
1313.23(c) to include the appropriate language to be consistent with
the instructions contained in the DEA Form 486.
The Deputy Assistant Administrator, Office of Diversion Control,
hereby certifies that this action will have no significant impact upon
entities whose interests must be considered under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.). This action does not impose any
new requirements or burden on the regulated industry. This action is
being taken to clarify the requirements regarding the distribution of
the DEA Form 486.
This rule has been drafted and reviewed in accordance with
Executive Order 12866. DEA has determined that this is not a
significant regulatory action under the provisions of Executive Order
12866, section 3(f). This rule clarifies existing requirements and will
prevent confusion that might cause delays in the export of chemicals.
This action has been analyzed in accordance with the principles and
criteria in Executive Order 12612, and it has been determined that the
rule does not have sufficient federalism implications to warrant the
preparation of a Federalism Assessment.
List of Subjects in 21 CFR Part 1313
Drug traffic control, Exports, Imports, Reporting requirements.
For reasons set out above, 21 CFR part 1313 is amended as follows:
PART 1313--[AMENDED]
1. The authority citation for part 1313 continues to read as
follows:
Authority: 21 U.S.C. 802, 830, 871(b), 971
2. Section 1313.23 is amended by revising paragraph (c) to read as
follows:
Sec. 1313.23 Distribution of export declaration.
* * * * *
(c) Copy 3 shall be presented to the U.S. Customs Service at the
port of exit for each export of a listed chemical or chemicals on or
before the day of exportation, and when possible, along with the
Shippers Export Declaration.
Dated: September 6, 1996.
Gene R. Haislip,
Deputy Assistant Administrator, Office of Diversion Control.
[FR Doc. 96-24944 Filed 9-27-96; 8:45 am]
BILLING CODE 4410-09-M
Complete official Federal Register PDF
FR Doc. 96-24943 Clerical Amendments to Rules on Classified Information, Individuals With Disabilities, Freedom of Information, Privacy, Patents, Antarctica, and Procurement
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 51021-51022]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24943]
=======================================================================
-----------------------------------------------------------------------
NATIONAL SCIENCE FOUNDATION
45 CFR Parts 601, 605, 612, 613, 650, and 672
48 CFR Parts 2527 and 2532
Clerical Amendments to Rules on Classified Information,
Individuals With Disabilities, Freedom of Information, Privacy,
Patents, Antarctica, and Procurement
AGENCY: National Science Foundation.
ACTION: Final rule with a request for comments.
-----------------------------------------------------------------------
SUMMARY: The National Science Foundation (NSF) is amending various
regulations to update citations, delete unneeded language, reflect
reassignment of responsibilities, and correct clerical errors.
DATES: This rule is effective September 30, 1996. Comments, however,
are welcome at any time and will be considered in making future
revisions.
ADDRESSES: All comments should be addressed to: John Chester, Assistant
General Counsel, Office of the General Counsel, Room 1265, National
Science Foundation, 4201 Wilson Boulevard, Arlington, VA 22230.
FOR FURTHER INFORMATION CONTACT: John Chester on (703) 306-1060 (voice)
and (703) 306-0149 (facsimile)--those are not toll-free numbers--or by
electronic mail as [email protected] through INTERNET.
SUPPLEMENTARY INFORMATION: The National Science Foundation's
nonprocurement regulations are contained in chapter VI of title 45 of
the Code of Federal Regulations and its supplement to the Federal
Acquisition Regulation is contained in chapter 25 of title 48 of the
CFR. Those volumes are republished as of October 1 each year. This rule
makes clerical corrections, deletes unnecessary language, updates
citations, and reassigns internal responsibilities to reflect
organizational and nomenclature changes so the 1997 volume will be
correct.
Determinations
I have determined, under the criteria set forth in Executive Order
12866, that this rule is not a significant regulatory action requiring
review by the Office of Information and Regulatory Affairs. I also
certify, pursuant to the requirements of the Regulatory Flexibility
Act, 5 U.S.C. Secs. 601-612, that none of the clerical corrections and
nomenclature and address changes made by this rule will have a
significant economic impact on any small entities. Finally, I have
reviewed this rule in light of section 2 of Executive Order 12778 and
certify for the National Science Foundation that this rule meets the
applicable standards provided in sections 2(a) and 2(b) of that order.
List of Subjects
45 CFR Part 601
Classified information.
45 CFR Part 605
Administrative practice and procedure, Civil rights, Equal
employment opportunity, Federal buildings and facilities, Individuals
with disabilities.
45 CFR Part 612
Freedom of information.
45 CFR Part 613
Privacy.
45 CFR Part 650
Administrative practice and procedure, Government contracts, Grant
programs--science and technology, Inventions and patents, Reporting and
recordkeeping requirements, Science and technology.
45 CFR Part 672
Administrative practice and procedure, Antarctica.
48 CFR Part 2527
Government procurement, Grant programs--science and technology,
Inventions and patents, Nonprofit organizations, Small businesses.
48 CFR Part 2527
Government procurement.
For the reasons set out in the preamble and under the authority of
section 11(a) of the National Science Foundation Act of 1950, as
amended (42 U.S.C. 1870(a)), 45 CFR Chapter VI and 48 CFR Chapter 25
are amended as follows:
45 CFR CHAPTER VI
PART 601--CLASSIFICATION AND DECLASSIFICATION OF NATIONAL SECURITY
INFORMATION
1. The authority citation for Part 601 is revised to read as
follows:
Authority: E.O. 12958, 3 CFR, 1995 Comp. p. 333.
Secs. 601.1 through 601.4 [Amended]
2. Change ``Executive Order 12356'' to ``Executive Order 12958'' in
Secs. 601.1, 601.2, 601.3, and 601.4.
Sec. 601.6 [Amended]
3. In Sec. 601.6:
a. Change ``Executive Order 12356'' in the introductory text and
paragraph (a) to ``Executive Order 12958.''
b. Change ``E.O. 12356'' in paragraph (d) to ``Executive Order
12958.''
PART 605--NONDISCRIMINATION ON THE BASIS OF HANDICAP IN PROGRAMS
AND ACTIVITIES RECEIVING FEDERAL FINANCIAL ASSISTANCE
4. The authority citation for Part 605 continues to read as
follows:
Authority: 29 U.S.C. 794.
Sec. 605.0 [Amended]
5. In Sec. 605.0, change ``part 605'' to ``part 84.''
PART 612--AVAILABILITY OF RECORDS AND INFORMATION
6. The authority citation for Part 612 continues to read as
follows:
[[Page 51022]]
Authority: 5 U.S.C. 552, as amended.
Sec. 612.3 [Amended]
7. In Sec. 612.3:
a. Change ``writing'' to ``writing and include the requester's
mailing address'' in paragraph (b).
b. Change ``Legislative and Public Affairs'' to ``General Counsel''
all three places the former appears in paragraph (c).
c. Change ``Deputy Director'' to ``General Counsel'' in paragraphs
(f) and (g).
Sec. 612.7 [Amended]
8. In Sec. 612.7:
a. Change ``Legislative and Public Affairs'' to ``General Counsel''
both places the former appears in paragraph (a).
b. Change ``Director of the Office of Legislative and Public
Affairs'' to ``Office of General Counsel'' in paragraph (d).
PART 613--PRIVACY ACT REGULATIONS
9. The authority citation for Part 613 continues to read as
follows:
Authority: 5 U.S.C. 552a(f)
Sec. 613.3 [Amended]
10. In Sec. 613.3, the list of systems of records is revised to
read as follows:
Sec. 613.3 Procedures for requests for access to or disclosure of
records pertaining to an individual.
* * * * *
(b) * * *
Accident and Injury Reports (Antarctic)
Alien Applications for Consideration of Waiver of Two-Year Foreign
Residence Requirements
Antarctic Conservation Act Files
Antarctic Service Records
Application and Account for Advance of Funds (SF 1038)
Debarment/Scientific Misconduct Files
Delinquent Debtors File
Dissertation Advisers File
Diving Safety Records (Polar Regions)
Doctorate Records Files
Doctorate Work History File
Earnings and Tax Statement (W-2)
Employee Grievance and Appeals File
Employee Locator Record Card
Employee Payroll Jacket
Fellowship and Other Awards
Fellowship Payroll
Frequent Traveler Profile
Individual Retirement Records
Manpower Management Subsystem
Medical Examination Records for Service in Polar Regions
National Survey of Recent College Graduates and Follow-up File
NSF Payroll System
Officer of Inspector General Investigative Files
Official Passports
P.I./Proposal File and Associated Records
Personnel Security Control Cards
Personnel Tracking System (Antarctic)
Public Transportation Subsidy Program
Radiation Safety Records (Polar Regions)
Reviewer/Fellowship and Other Award File and Associated Records
Reviewer/Proposal File and Associated Records
Science and Technology Centers (STC) Database
Telephone Call Detail Program Records
Time and Attendance Reports
EEOC/GOVT-1, Equal Employment Opportunity in the Federal Government
Complaint and Appeal Records
OGE/GOVT-1, Executive Branch Public Financial Disclosure Reports and
Other Ethics Program Records
OGE/GOVT-2, Confidential Statements of Employment and Financial
Interests
OPM/GOVT-1, General Personnel Records
OPM/GOVT-5, Recruiting, Examining and Placement Records
OPM/GOVT-7, Applicant Race, Sex, National Origin, and Disability
Records.
OPM/GOVT-10, Employee Medical File System of Records
* * * * *
PART 650--PATENTS
11. The authority citation for Part 650 continues to read as
follows:
Authority: 35 U.S.C. 200-212; 42 U.S.C. 1870(e) and 1871); and
the Presidential Memorandum entitled ``Government Patent Policy'',
issued February 18, 1983.
Sec. 650.15 [Amended]
12. In Sec. 650.15:
a. Change ``a Grants of Contracts Officer'' in paragraph (b) to ``a
Grants and Agreements Officer or Contracting Officer.''
b. Change ``Division of Grants and Contracts'' in paragraph (b) to
``Division of Contracts, Policy, and Oversight (CPO).''
c. Change ``a Grants of Contracts Officer'' in paragraph (d) to ``a
Grants and Agreements Officer, a Contracting Officer.''
d. Change ``DGC Director'' in paragraph (d) to ``CPO Director.''
PART 672--ENFORCEMENT AND HEARING PROCEDURES; TOURISM GUIDELINES
13. The authority citation for Part 672 continues to read as
follows:
Authority: 16 U.S.C. 2401 et seq.
Sec. 672.3 [Amended]
14. In Sec. 672.3, change ``DPP'' to ``OPP'' in paragraph (f).
48 CFR Chapter 25
PART 2527--PATENTS, DATA, AND COPYRIGHTS
1. The authority citation for Part 2527 is revised to read as
follows:
Authority: 35 U.S.C. 200-212; 42 U.S.C. 1870(e) and 1871); and
the Presidential Memorandum entitled ``Government Patent Policy'',
issued February 18, 1983.
Sec. 2527.7001 [Amended]
2. In Sec. 2527.7001, change ``were published in the Federal
Register on Tuesday, April 28, 1992, at 52 FR 18052 and will be'' to
``are.''
PART 2532--CONTRACT FINANCING
3. The authority citation for Part 2532 continues to read as
follows:
Authority: 42 U.S.C. 1870(d).
Sec. 2532.401 [Amended]
4. In Sec. 2532.401, change ``3548 Revised Statutes (31 U.S.C.
529)'' to ``3324 of Title 31 of the United States Code.''
Dated: September 23, 1996
National Science Foundation
Lawrence Rudolph,
General Counsel.
[FR Doc. 96-24943 Filed 9-27-96; 8:45 am]
BILLING CODE 7555-01-P
Complete official Federal Register PDF
FR Doc. 96-24917 Equal Credit Opportunity
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 50948-50951]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24917]
=======================================================================
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FEDERAL RESERVE SYSTEM
12 CFR Part 202
[Regulation B; Docket No. R-0910]
Equal Credit Opportunity
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Final rule; official staff interpretation.
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SUMMARY: The Board is revising its official staff commentary to
Regulation B (Equal Credit Opportunity). The commentary applies and
interprets the requirements of Regulation B and substitutes for
individual staff interpretations. The revisions to the commentary
provide guidance on issues that the Board has been asked to clarify,
including credit scoring and spousal signature rules.
DATES: Effective date. September 30, 1996.
Compliance date. Compliance is optional until October 31, 1996.
FOR FURTHER INFORMATION CONTACT: Jane Jensen Gell, Sheilah A. Goodman,
or Natalie E. Taylor, Staff Attorneys, Division of Consumer and
Community Affairs, Board of Governors of the Federal Reserve System, at
(202) 452-3667 or 452-2412. For users of the Telecommunications Device
for the Deaf, contact Dorothea Thompson at (202) 452-3544.
SUPPLEMENTARY INFORMATION:
I. Background
The Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691-1691f,
makes it unlawful for creditors to discriminate in any aspect of a
credit transaction on the basis of race, color, religion, national
origin, sex, marital status, or age (provided the applicant has the
capacity to contract), because all or part of an applicant's income
derives from public assistance, or because the applicant has in good
faith exercised any right under the Consumer Credit Protection Act.
This statute is implemented by the Board's Regulation B (12 CFR Part
202). The Board also has an official staff commentary (12 CFR Part 202
(Supp. I)) that interprets the regulation. The commentary provides
general guidance to creditors in applying Regulation B to various
credit transactions, and is updated periodically to address significant
questions that arise.
II. Summary of Revisions to the Commentary
In December 1995 (60 FR 67097, December 28, 1995), the Board
proposed amendments to the staff commentary to Regulation B. The Board
received approximately 70 comments on the proposal. The majority of the
comments were from financial institutions and their attorneys. Overall,
commenters generally favored the proposed amendments, although they
raised a number of technical issues. Opposition to the proposal mostly
addressed the comment pertaining to the use of age scorecards. After
reviewing the comment letters, and upon further analysis, the Board has
modified its interpretation regarding scorecards and some other
portions of the update, as discussed below.
Section 202.2--Definitions
2(p) Empirically Derived and Other Credit Scoring Systems
Comment 2(p)-2, as proposed, clarified that the performance of a
credit scoring system should be monitored to ensure its predictive
ability. Commenters were concerned that, by use of the term
``monitor,'' the proposal required a continuous analysis, which would
be costly and disruptive to their operations. The comment, as adopted,
provides that creditors must periodically review their systems to
ensure predictive ability, but are not required to review their systems
on a continuous basis. The Board believes the required frequency
depends upon a variety of factors such as changes in the local economy,
and shifts in the lender's customer base. However, creditors must
review their systems when evidence suggests that the systems are no
longer predicting risk as intended.
Commenters also asked the Board to clarify the responsibility for
revalidation if the creditor did not develop the system. A creditor is
responsible for any system that it uses, including its revalidation,
but may use a third party to perform the revalidation. In accordance
with section 202.2(p)(2), if the system is developed using borrowed
credit experience, the initial validation and any subsequent
revalidation must be based on the creditor's own data when it becomes
available.
Section 202.5--Rules Concerning Taking of Applications
5(e) Written Applications
Comment 5(e)-3 is adopted as proposed.
Section 202.6--Rules Concerning Evaluation of Applications
6(b) Specific Rules Concerning Use of Information
6(b)(2)
Comment 6(b)(2)-2 is revised to address the use of age in a credit
scoring system. Under the ECOA and Regulation B, if a creditor chooses
to consider age by assigning a value to an applicant's age, the age of
elderly applicants must not be assigned a negative value. Thus, a
credit scoring system must ensure that the age of applicants 62 or
older is assigned a factor, value, or weight that is at least as
favorable as the factor, value, or weight assigned to the age of any
other class of applicants.
Proposed Commentary
In December 1995, the Board proposed adding a comment which
specified that, in an age-based scorecard system, creditors could
satisfy the requirement of not assigning a negative factor or value by
scoring an elderly applicant under the applicable scorecard and, if the
applicant did not qualify, by rescoring the applicant under scorecards
for other age-based groups. The proposal was consistent with informal
opinions given by the Board's staff regarding the need for creditors
using age scorecards to comply with the ``negative factor or value''
limitation established by the ECOA.
Commenters raised numerous questions about the Board's proposal.
For example, some commenters noted that the regulation addresses the
treatment of the elderly as a class in a credit scoring system, rather
than the treatment of a single elderly applicant who is declined under
the applicable scorecard but might be approved when rescored under a
card developed for another age class. Other commenters expressed
concern that rescoring an elderly applicant on models that were not
developed using data for elderly persons would invalidate an otherwise
``empirically derived, demonstrably and statistically sound'' credit
scoring system. Some commenters noted that implementing the proposed
requirement would be costly because of the systems and procedural
changes that would be required, and that increased costs would not be
balanced by commensurate benefits to the elderly. Numerous commenters
believed the proposed
[[Page 50949]]
revisions would discourage the use of age-based systems, because
creditors would have to choose between taking additional risk on
elderly applicants or qualifying fewer younger applicants. In addition,
commenters stated that the proposed rescoring would likely result in
few additional elderly applicants receiving credit. Upon further
analysis, the Board has modified the final interpretation. The
modification reflects the Board's interpretation that the ECOA and
Regulation B require creditors that score age in a credit scoring
system to treat elderly applicants as a class as favorably as all other
classes of applicants on the basis of age.
Direct Scoring of Age
If a creditor directly scores age by assigning points to an
applicant's age category, elderly applicants must receive at least the
same number of points as the most favored class of nonelderly
applicants. For example, if a system assigns 10 points for ages 18-20,
20 points for ages 21-27, 15 points for ages 28-39, 18 points for ages
40 to 51, and 22 points for ages 52 to 61, then applicants who are 62
and older must receive at least 22 points.
The Board believes that similarly, if a system assigns points to
some other variable based on the applicant's age, applicants who are 62
and older must receive at least the same number of points as the most
favored class of nonelderly applicants. For example, a system could
score an applicant's type of residence based on the age of the
applicant and assign points to applicants who rent their dwellings
(such as 20 points for ages 18-28, 10 points for ages 29-45, and 8
points for ages 46-61). In such a system, elderly applicants who rent
their dwellings must receive at least the same number of points as the
most favored age class; in this example, applicants 62 and older who
rent their dwellings must receive at least 20 points. This rule applies
whether a creditor uses a single scorecard or more than one scorecard.
Use of Age-split Scorecards
Commenters raised questions about, and the Board has considered,
the applicability of Regulation B to two different types of age-split
scorecard systems. Specifically, the Board has considered whether a
creditor could segment the applicant population and develop one card
for a narrow range of applicants under a certain age (sometimes called
a ``youth'' card) and a second card for the general population.
Applicants on the youth card--typically in their late twenties or
younger--would be evaluated using attributes that are predictive for
that age class, while applicants on the second card would be evaluated
using attributes predictive for the general population. The Board
believes that when a system uses a standard card for the general
population with a wide age range that includes the elderly, the system
does not score age. Accordingly, in this type of system, there is no
issue of assigning a negative factor or value to the age of elderly
applicants.
On the other hand, the Board has considered whether a creditor
could segment the applicant population using scorecards with narrower
age ranges. Such scorecards assign value based on characteristics
predictive for that narrow age class. Unlike the use of a standard card
for the general population with a wide range that includes the elderly,
the Board believes that inclusion of the elderly in scorecards with
narrower age ranges does score age. Since the elderly would not be
evaluated using attributes for the general population, creditors may
not assign a negative factor or value to the age of elderly applicants.
Negative Factor or Value
Commenters suggested alternative ways that a creditor could satisfy
the ECOA's requirement that a negative factor or value not be assigned
to the age of elderly applicants. For example, it was suggested that
creditors could be required to establish, at the time scorecards are
developed, that elderly applicants as a class would not have been
treated more favorably if scored using cards developed for other age
categories. While the final comment does not address this issue, the
Board believes one approach would be to demonstrate that no more than
one-half of elderly applicants rejected under the scorecard including
their age group would have been approved if scored under another card
in the system.
Comment 6(b)(2)-4 addresses the use of age in a reverse mortgage
transaction. The comment is adopted generally as proposed. The comment
now includes a reference to default, to parallel the definition of a
reverse mortgage in Regulation Z (Truth in Lending), 12 CFR 226. The
comment also clarifies that a reverse mortgage program that requires
applicants to be at least 62 years of age is permissible under
Sec. 202.6(b)(2)(iv), which allows creditors to favor the elderly by
offering products to applicants 62 and older that are not available to
other customers.
The comment also clarifies that using age in a reverse mortgage
transaction to determine factors such as the amount of the credit, the
monthly payment that the borrower will receive, or the estimated
repayment date is permissible under Sec. 202.6(b)(2)(iii) as long as
the determination is made on a case-by-case basis.
6(b)(6)
Proposed comment 6(b)(6)-1 is withdrawn. The comment would have
specified that if a creditor considers credit history, it must consider
information presented by the applicant that is not included in the
credit report, if it is of the type the creditor normally considers on
a credit report. Also, the comment would have specified that when one
spouse is applying for individual credit, the creditor must consider
information presented by the applicant that would tend to show that a
credit history appearing in the names of both spouses is not reflective
of the applicant's individual creditworthiness.
Some commenters welcomed the additional guidance; others believed
that the existing comment was sufficiently clear, and that the proposal
raised a number of issues without resolving them. Specifically, many
commenters voiced concern about how the comment would apply to
creditors that rely exclusively on credit scoring to make credit
decisions. The Board is withdrawing the comment because it believes the
issues raised by the commenters warrant further study, and that section
202.6(b)(6) and the existing commentary provide adequate guidance at
this time.
Section 202.7--Rules Concerning Extensions of Credit
7(d) Signature of Spouse or Other Person
7(d)(2)
Comment 7(d)(2)-1 addresses unsecured credit and the treatment of
joint property. The comment clarifies that when determining the value
of an applicant's interest in jointly owned property, a creditor must
look to the actual form of ownership of the property prior to or at
consummation. Several commenters asked whether in making such
determinations, creditors may consider the possibility of subsequent
changes to property ownership. The comment makes clear that the
possibility of a subsequent change in the form of ownership may not be
considered. For example, when a married applicant applies for
individual credit, and qualifies based on separate property, a creditor
may not consider the possibility that the separate property may later
be transferred into joint ownership. Similarly, in valuing a married
applicant's interest in property,
[[Page 50950]]
a creditor may not consider the possibility that the couple may one day
divorce. Therefore, a creditor may not require the signature of the
nonapplicant spouse in these or similar circumstances.
The proposed revisions to comment 7(d)(2)-1(ii) included examples
of instruments that creditors might ask a joint owner of property to
sign to support the applicant's request for unsecured credit--
mentioning, among other things, a security agreement, mortgage, and
deed of trust. Because these examples are appropriate only for secured
credit, they have been deleted. The comment retains the limitation that
where, under state law, the creditor may use other instruments to reach
joint property, a creditor may not routinely ask nonapplicants to sign
any instrument requiring that they forfeit their interest in jointly
owned property as a condition of the credit extension. Some commenters
expressed concern that creditors will be prevented from reaching joint
property in the event of an applicant's death or default. The comment
is not intended to prevent access to jointly owned property in these
circumstances, but to clarify that if state law gives a creditor access
to the property by some other means--for example, through a limited
guarantee--requiring nonapplicants to forfeit their interest in jointly
owned property is prohibited by the regulation.
7(d)(6)
Comment 7(d)(6)-1 clarifies that a creditor may require that
partners, officers or directors personally guarantee an extension of
credit to a business, even if the business is creditworthy, as long as
a guarantee is not required on a prohibited basis.
Commenters asked the Board to clarify that shareholders may be
required to guarantee an extension of credit to a closely held
corporation, even if creditworthy, given that in most instances these
shareholders have interests that are analogous to the interests of
partners, officers, or directors of other businesses. The comment has
been revised accordingly.
Comment 7(d)(6)-2 is generally adopted as proposed. A cross-
reference to section 202.7(d)(2) is added.
Section 202.13--Information for Monitoring Purposes
13(a) Information to be Requested
Comment 13(a)-6 clarifies that, except as provided, monitoring
information must be collected by any creditor that satisfies and
replaces the existing obligation.
13(b) Obtaining of Information
Comments 13(b)-4 and 13(b)-5 are generally adopted as proposed,
including adding two new paragraphs and redesignating original
paragraphs 4 and 5.
List of Subjects in 12 CFR Part 202
Aged, Banks, banking, Civil rights, Consumer protection, Credit,
Discrimination, Federal Reserve System, Marital status discrimination,
Penalties, Religious discrimination, Reporting and recordkeeping
requirements, Sex discrimination.
For the reasons set forth in the preamble, the Board amends 12 CFR
part 202 as follows:
PART 202--EQUAL CREDIT OPPORTUNITY (REGULATION B)
1. The authority citation for part 202 continues to read as
follows:
Authority: 15 U.S.C. 1691-1691f.
2. In Supplement I to Part 202, under Section 202.2 Definitions,
under 2(p) Empirically derived and other credit scoring systems., four
new sentences are added at the end of paragraph 2 to read as follows:
Supplement I to Part 202--Official Staff Interpretations
* * * * *
Section 202.2 Definitions
* * * * *
2(p) Empirically derived and other credit scoring systems.
* * * * *
2. * * * To ensure that predictive ability is being maintained,
creditors must periodically review the performance of the system.
This could be done, for example, by analyzing the loan portfolio to
determine the delinquency rate for each score interval, or by
analyzing population stability over time to detect deviations of
recent applications from the applicant population used to validate
the system. If this analysis indicates that the system no longer
predicts risk with statistical soundness, the system must be
adjusted as necessary to reestablish its predictive ability. A
creditor is responsible for ensuring its system is validated and
revalidated based on the creditor's own data when it becomes
available.
* * * * *
3. In Supplement I to Part 202, under Section 202.5 Rules
Concerning Taking of Applications, under 5(e) Written applications.,
paragraph 3. is revised to read as follows:
* * * * *
Section 202.5 Rules Concerning Taking of Applications
* * * * *
5(e) Written applications.
* * * * *
3. Computerized entry. Information entered directly into and
retained by a computerized system qualifies as a written application
under this paragraph. (See the commentary to section 202.13(b),
Applications through electronic media and Applications through
video.)
* * * * *
4. In Supplement I to Part 202, under Section 202.6 Rules
Concerning Evaluation of Applications, under paragraph 6(b)(2),
paragraph 2. is revised; paragraphs 4. and 5. are redesignated as
paragraphs 5. and 6., respectively; and new paragraph 4. is added to
read as follows:
* * * * *
Section 202.6--Rules Concerning Evaluation of Applications
* * * * *
Paragraph 6(b)(2)
* * * * *
2. Consideration of age in a credit scoring system. Age may be
taken directly into account in a credit scoring system that is
``demonstrably and statistically sound,'' as defined in section
202.2(p), with one limitation: applicants 62 years or older must be
treated at least as favorably as applicants who are under 62. If age
is scored by assigning points to an applicant's age category,
elderly applicants must receive the same or a greater number of
points as the most favored class of nonelderly applicants.
i. Age-split scorecards. A creditor may segment the population
into scorecards based on the age of an applicant. In such a system,
one card covers a narrow age range (for example, applicants in their
twenties or younger) who are evaluated under attributes predictive
for that age group. A second card covers all other applicants who
are evaluated under the attributes predictive for that broad class.
When a system uses a card covering a wide age range that encompasses
elderly applicants, the credit scoring system does not score age.
Thus, the system does not raise the issue of assigning a negative
factor or value to the age of elderly applicants. But if a system
segments the population by age into multiple scorecards, and
includes elderly applicants in a narrower age range, the credit
scoring system does score age. To comply with the act and regulation
in such a case, the creditor must ensure that the system does not
assign a negative factor or value to the age of elderly applicants
as a class.
* * * * *
4. Consideration of age in a reverse mortgage. A reverse
mortgage is a home-secured loan in which the borrower receives
payments from the creditor, and does not become obligated to repay
these amounts (other than in the case of default) until the borrower
dies, moves permanently from the home or transfers title to the
home, or upon a specified maturity date. Disbursements to the
borrower under a reverse mortgage typically are determined by
considering the value of the borrower's home, the current interest
rate, and the borrower's life expectancy. A reverse mortgage program
that requires borrowers to be age 62 or older is
[[Page 50951]]
permissible under section 202.6(b)(2)(iv). In addition, under
section 202.6(b)(2)(iii), a creditor may consider a borrower's age
to evaluate a pertinent element of creditworthiness, such as the
amount of the credit or monthly payments that the borrower will
receive, or the estimated repayment date.
* * * * *
5. In Supplement I to Part 202, Section 202.7--Rules Concerning
Extensions of Credit, is amended as follows:
a. Under Paragraph 7(d)(2), paragraph 1. is revised; and
b. Paragraph 7(d)(6) is revised.
The revisions read as follows:
* * * * *
Section 202.7 Rules Concerning Extensions of Credit
* * * * *
Paragraph 7(d)(2)
1. Jointly owned property. If an applicant requests unsecured
credit, does not own sufficient separate property, and relies on
joint property to establish creditworthiness, the creditor must
value the applicant's interest in the jointly owned property. A
creditor may not request that a nonapplicant joint owner sign any
instrument as a condition of the credit extension unless the
applicant's interest does not support the amount and terms of the
credit sought.
i. Valuation of applicant's interest. In determining the value
of an applicant's interest in jointly owned property, a creditor may
consider factors such as the form of ownership and the property's
susceptibility to attachment, execution, severance, or partition;
the value of the applicant's interest after such action; and the
cost associated with the action. This determination must be based on
the form of ownership prior to or at consummation, and not on the
possibility of a subsequent change. For example, in determining
whether a married applicant's interest in jointly owned property is
sufficient to satisfy the creditor's standards of creditworthiness
for individual credit, a creditor may not consider that the
applicant's separate property may be transferred into tenancy by the
entirety after consummation. Similarly, a creditor may not consider
the possibility that the couple may divorce. Accordingly, a creditor
may not require the signature of the nonapplicant spouse in these or
similar circumstances.
ii. Other options to support credit. If the applicant's interest
in jointly owned property does not support the amount and terms of
credit sought, the creditor may offer the applicant other options to
provide additional support for the extension of credit. For
example--
A. Requesting an additional party (see Sec. 202.7(d)(5));
B. Offering to grant the applicant's request on a secured basis
(see Sec. 202.7(d)(4)); or
C. Asking for the signature of the joint owner on an instrument
that ensures access to the property in the event of the applicant's
death or default, but does not impose personal liability unless
necessary under state law (e.g., a limited guarantee). A creditor
may not routinely require, however, that a joint owner sign an
instrument (such as a quitclaim deed) that would result in the
forfeiture of the joint owner's interest in the property.
* * * * *
Paragraph 7(d)(6)
1. Guarantees. A guarantee on an extension of credit is part of
a credit transaction and therefore subject to the regulation. A
creditor may require the personal guarantee of the partners,
directors, or officers of a business, and the shareholders of a
closely held corporation, even if the business or corporation is
creditworthy. The requirement must be based on the guarantor's
relationship with the business or corporation, however, and not on a
prohibited basis. For example, a creditor may not require guarantees
only for women-owned or minority-owned businesses. Similarly, a
creditor may not require guarantees only from the married officers
of a business or married shareholders of a closely held corporation.
2. Spousal guarantees. The rules in Sec. 202.7(d) bar a creditor
from requiring a signature of a guarantor's spouse just as they bar
the creditor from requiring the signature of an applicant's spouse.
For example, although a creditor may require all officers of a
closely held corporation to personally guarantee a corporate loan,
the creditor may not automatically require that spouses of married
officers also sign the guarantee. If an evaluation of the financial
circumstances of an officer indicates that an additional signature
is necessary, however, the creditor may require the signature of a
spouse in appropriate circumstances in accordance with
Sec. 202.7(d)(2).
* * * * *
6. In Supplement I to Part 202, Section 202.13--Information for
Monitoring purposes, is amended as follows:
a. Under 13(a) Information to be requested., paragraph 6. is
revised; and
b. Under 13(b) Obtaining of information., paragraphs 4. and 5. are
redesignated as paragraphs 6. and 7., respectively, and new paragraphs
4. and 5. are added.
The revisions and additions are to read as follows:
* * * * *
Section 202.13 Information for Monitoring purposes
13(a) Information to be requested.
* * * * *
6. Refinancings. A refinancing occurs when an existing
obligation is satisfied and replaced by a new obligation undertaken
by the same borrower. A creditor that receives an application to
refinance an existing extension of credit made by that creditor for
the purchase of the applicant's dwelling may request the monitoring
information again but is not required to do so if it was obtained in
the earlier transaction.
* * * * *
13(b) Obtaining of information.
* * * * *
4. Applications through electronic media. If an applicant
applies through an electronic medium (for example, the Internet or a
facsimile) without video capability that allows the creditor to see
the applicant, the creditor may treat the application as if it were
received by mail or telephone.
5. Applications through video. If a creditor takes an
application through a medium that allows the creditor to see the
applicant, the creditor treats the application as taken in person
and must note the monitoring information on the basis of visual
observation or surname, if the applicant chooses not to provide the
information.
* * * * *
By order of the Board of Governors of the Federal Reserve
System, acting through the Secretary of the Board under delegated
authority, September 24, 1996.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 96-24917 Filed 9-27-96; 8:45 am]
BILLING CODE 6210-01-P
Complete official Federal Register PDF
FR Doc. 96-24892 Protection of Stratospheric Ozone
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 51018-51019]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24892]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 82
[FRL-5616-9]
Protection of Stratospheric Ozone
AGENCY: Environmental Protection Agency.
ACTION: Notice of denial of petition.
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SUMMARY: This action notifies the public that the Agency received a
petition pursuant to section 612(d) of the Clean Air Act, under the
Significant New Alternatives Policy (SNAP) Program, and that EPA is
denying the petition. SNAP implements section 612 of the amended Clean
Air Act of 1990, which requires EPA to evaluate substitutes for ozone-
depleting Substances (ODS) and to regulate the use of substitutes where
other alternatives exist that reduce overall risk to human health and
the environment. Through these evaluations, EPA generates lists of
acceptable and unacceptable substitutes for each of the major
industrial use sectors.
In developing the March 18, 1994 final SNAP rule (59 FR 13044), EPA
identified HFC-134a as a potential replacement for CFC-12. It is
manufactured by several companies worldwide. In the March 18, 1994
final rule, EPA found HFC-134a to be an acceptable substitute for CFC-
12 in a variety of end-uses.
OZ Technology, Inc. submitted Hydrocarbon Blend B, or HC-12a, as a
CFC-12 substitute in a variety of end-uses on July 19, 1994. In the
June 13, 1995 final SNAP rule (60 FR 31092), EPA found the use of
Hydrocarbon Blend B unacceptable as a substitute for CFC-12 in all end-
uses other than industrial process refrigeration. This determination
was based on a lack of adequate data demonstrating that HC-12a could be
used safely in these end-uses. In addition, numerous other acceptable
alternatives exist.
[[Page 51019]]
On December 5, 1995, OZ Technology, Inc. petitioned EPA to remove
Hydrocarbon Blend B from the unacceptable list and add it to the
acceptable list, and to remove HFC-134a from the acceptable list and
add it to the unacceptable list. The petition is in Air Docket A-91-42,
file number VI-D-135. On August 30, 1996, EPA denied the first request
in the petition on the basis that the information included in the
petition did not include a scientifically valid, comprehensive risk
assessment for the requested CFC-12 end-uses, and the second request on
the basis that the petition did not contain sufficient evidence of a
safety hazard posed by the use HFC-134a as a CFC-12 substitute in any
end-use. The denial and the accompanying documentation are in Air
Docket A-91-42, file number VI-C-20.
ADDRESSES: Information relevant to this notice is contained in Air
Docket A-91-42, Central Docket Section, South Conference Room 4, U.S.
Environmental Agency, 401 M Street, S.W., Washington, D.C. 20460.
Telephone: (202) 260-7548. The docket may be inspected between 8:00
a.m. and 5:30 p.m. weekdays. As provided in 40 CFR part 2, a reasonable
fee may be charged for photocopying.
FOR FURTHER INFORMATION CONTACT: Jeffrey Levy at (202) 233-9727 or fax
(202) 233-9577, U.S. EPA, Stratospheric Protection Division, 401 M
Street, S.W., Mail Code 6205J, Washington, D.C. 20460.
SUPPLEMENTARY INFORMATION: Contact the Stratospheric Protection Hotline
at 1-800-296-1996, Monday-Friday, between the hours of 10:00 a.m. and
4:00 p.m. (Eastern Standard Time) weekdays.
For more information on the Agency's process for administering the
SNAP program or criteria for evaluation of substitutes, refer to the
SNAP final rulemaking published in the Federal Register on March 18,
1994 (59 FR 13044). Federal Register notices can be ordered from the
Government Printing Office Order Desk (202) 783-3238; the citation is
the date of publication. This notice may also be obtained on the World
Wide Web at http://www.epa.gov/docs/ozone/title6/snap/.
List of Subjects in 40 CFR Part 82
Environmental protection, Administrative practice and procedure,
Air pollution control, Reporting and Recordkeeping requirements.
Dated: September 20, 1996.
Mary D. Nichols,
Assistant Administrator for Air and Radiation.
[FR Doc. 96-24892 Filed 9-27-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-24886 Airworthiness Directives; Fairchild Aircraft SA26, SA226, and SA227 Series Airplanes
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 50999-51003]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24886]
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DEPARTMENT OF TRANSPORTATION
14 CFR Part 39
[Docket No. 94-CE-22-AD; Amendment 39-9774; AD 96-20-08]
RIN 2120-AA64
Airworthiness Directives; Fairchild Aircraft SA26, SA226, and
SA227 Series Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Final rule.
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SUMMARY: This amendment supersedes AD 93-19-06, which currrently
requires repetitively inspecting acrylic cabin and cockpit side windows
for cracks on certain Fairchild Aircraft SA26, SA226, and SA227 series
airplanes, and, if cracks are found that exceed certain limitations,
replacing that window. This action maintains the requirement of
repetitively inspecting the cabin and cockpit side windows, and adds a
life limit for the single-pane cockpit side windows. Acrylic window
failures on the affected airplanes prompted this action. The actions
specified by this AD are intended to prevent acrylic cabin or cockpit
side window failures, which could result in airframe damage and
decompression injuries.
DATES: Effective November 14, 1996.
The incorporation by reference of certain publications listed in
the regulations was previously approved by the Director of the Federal
Register as of November 19, 1993 (58 FR 51771, October 5, 1993).
ADDRESSES: Service information that applies to this AD may be obtained
from Fairchild Aircraft, P.O. Box 790490, San Antonio, Texas 78279-
0490; telephone (210) 824-9421. This information may also be examined
at the Federal Aviation Administration (FAA), Central Region, Office of
the Assistant Chief Counsel, Attention: Rules Docket 94-CE-22-AD, Room
1558, 601 E. 12th Street, Kansas City, Missouri 64106; or at the Office
of the Federal Register, 800 North Capitol Street, NW., suite 700,
Washington, DC.
FOR FURTHER INFORMATION CONTACT: Mr. Hung Viet Nguyen, Aerospace
Engineer, FAA, Airplane Certification Office, 2601 Meacham Boulevard,
Fort Worth, Texas 76193-0150; telephone (817) 222-5155; facsimile (817)
222-5960.
SUPPLEMENTARY INFORMATION:
Events Leading to This Action
A proposal to amend part 39 of the Federal Aviation Regulations (14
CFR part 39) to include an AD that would apply to Fairchild Aircraft
SA26, SA226, and SA227 series airplanes was published in the Federal
Register on April 26, 1996 (61 FR 18524). The action proposed to
supersede AD 93-19-06 with a new AD that would maintain the requirement
of repetitively inspecting the cabin and cockpit side windows, and
would add a life limit for the single-pane cockpit side windows.
Accomplishment of the single-pane window installation as specified in
the supplemental notice of proposed rulemaking (NPRM) would be in
accordance with the applicable maintenance manual. The proposed
inspections as specified in the supplemental NPRM would be accomplished
in accordance with the following service bulletins (SB), as applicable:
Fairchild SB 26-56-20-042, Issued: November 28, 1988; Revised: February
7, 1991.
Fairchild SB 226-56-001, Issued: February 2, 1983; Revised: November
26, 1991.
Fairchild SB 227-56-001, Issued: February 2, 1983; Revised: November
26, 1991.
Fairchild SB 226-56-002, Issued: March 3, 1983; Revised: May 29, 1992.
Fairchild SB 227-56-002, Issued: January 5, 1984; Revised: May 29,
1992, and April 1, 1993.
Fairchild SB 226-56-003, Issued: September 13, 1984; Revised: November
2, 1989.
Fairchild SB 227-56-003, Issued: September 13, 1984; Revised: November
2, 1989.
Fairchild SB 26-56-10-038, Issued: October 8, 1984; Revised: February
7, 1991.
Interested persons have been afforded an opportunity to participate
in the making of this amendment. Due consideration has been given to
the comment received.
Disposition of the Comment
The commenter supports the proposal as written, and would like the
FAA to treat this as interim action until a new improved cockpit side
window defogging system is developed. The FAA basically concurs. A new
window design is now going through analysis and testing. Based on the
results of this analysis and testing, the FAA will determine if
additional improvements are needed to assure that an acceptable level
of safety (to the actions specified in this AD) can be maintained. The
FAA then may initiate additional rulemaking activity to require
installation of the new design window. In the meantime, the FAA has
determined that the actions required by this AD will maintain the
required level of safety (as it relates to cabin and cockpit side
windows) until the improved design windows are approved and available.
No changes have been made to the AD as a result of this comment.
No comments were received regarding the FAA's determination of the
cost impact on the public.
The FAA's Determination
After careful review of all available information related to the
subject presented above, including the referenced service information,
the FAA has determined that air safety and the public interest require
the adoption of the rule as proposed except for minor editorial
corrections. The FAA has determined that these minor corrections will
not change the meaning of the AD and will not add any additional burden
upon the public than was already proposed.
Compliance Time Criteria
The compliance time for this AD is presented in both hours time-in-
service (TIS) and calendar time. The referenced acrylic cabin and
cockpit side windows are affected whether the airplane is in flight or
on the ground. In addition, the utilization rates of the affected
airplanes vary among operators. For example, operators in unscheduled
service utilize their airplanes an average of approximately 200 to 300
hours TIS annually, while those in commuter service (scheduled) utilize
their airplanes an average of approximately 2,000 hours TIS annually.
Based on this
[[Page 51000]]
wide utilization rate variance and the fact that these windows are
affected when the airplane is in flight and on the ground, the FAA has
determined that the compliance time for this rule should be in hours
TIS and calendar time.
Cost Impact
The FAA estimates that 633 airplanes in the U.S. registry will be
affected by this AD, that it will take approximately 28 workhours per
airplane (14 workhours per window) to accomplish the life limit
installation and that the average labor rate is approximately $60 an
hour. Parts cost approximately $2,200 per airplane ($1,100 per window).
Based on these figures, the total cost impact of this AD on U.S.
operators is estimated to be $2,456,040. AD 93-19-06 currently requires
the same inspections as this AD for all of the affected airplanes.
Therefore, the cost impact of the required inspections (3 workhours x
$60 x 633 airplanes = $113,940) for operators of all affected
airplanes is the same as AD 93-19-06. The figure does not take into
account the cost of repetitive inspections. The FAA has no way of
determining how many repetitive inspections each owner/operator may
incur over the life of the airplane.
In addition, Fairchild Aircraft has informed the FAA that
approximately 250 of the 633 affected airplanes are equipped with
cockpit side windows with inner window panes, and therefore are not
subject to the single-pane window replacements (dual-pane windows will
still be subject to repetitive inspections). With this in mind, the
proposed cost impact upon U.S. operators would be reduced approximately
$970,000 from $2,456,040 to $1,486,040.
Regulatory Impact
The regulations adopted herein will not have substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, in
accordance with Executive Order 12612, it is determined that this final
rule does not have sufficient federalism implications to warrant the
preparation of a Federalism Assessment.
For the reasons discussed above, I certify that this action (1) is
not a ``significant regulatory action'' under Executive Order 12866;
(2) is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979); and (3) will not have a
significant economic impact, positive or negative, on a substantial
number of small entities under the criteria of the Regulatory
Flexibility Act. A copy of the final evaluation prepared for this
action is contained in the Rules Docket. A copy of it may be obtained
by contacting the Rules Docket at the location provided under the
caption ADDRESSES.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.
Adoption of the Amendment
Accordingly, pursuant to the authority delegated to me by the
Administrator, the Federal Aviation Administration amends part 39 of
the Federal Aviation Regulations (14 CFR part 39) as follows:
PART 39--AIRWORTHINESS DIRECTIVES
1. The authority citation for part 39 continues to read as follows:
Authority: 49 U.S.C. 106(g), 40113, 44701.
Sec. 39.13 [Amended]
2. Section 39.13 is amended by removing Airworthiness Directive
(AD) 93-19-06, Amendment 39-8705 (58 FR 51771, October 5, 1993), and by
adding a new AD to read as follows:
96-20-08 Fairchild Aircraft: Amendment 39-9774; Docket No. 94-CE-
22-AD. Supersedes AD 93-19-06, Amendment 39-8705.
Applicability: Models SA26-T, SA26-AT, SA226-T, SA226-T(B),
SA226-AT, SA226-TC, SA227-AT, SA227-AC, SA227-BC, and SA227-TT
airplanes (all serial numbers for all models), certificated in any
category.
Note 1: This AD applies to each airplane identified in the
preceding applicability provision, regardless of whether it has been
modified, altered, or repaired in the area subject to the
requirements of this AD. For airplanes that have been modified,
altered, or repaired so that the performance of the requirements of
this AD is affected, the owner/operator must request approval for an
alternative method of compliance in accordance with paragraph (f) of
this AD. The request should include an assessment of the effect of
the modification, alteration, or repair on the unsafe condition
addressed by this AD; and, if the unsafe condition has not been
eliminated, the request should include specific proposed actions to
address it.
Note 2: The applicability of this AD takes precedence over that
specified in the service information.
Compliance: Required as indicated in the body of the AD, unless
already accomplished.
To prevent acrylic cabin or cockpit side window failures, which
could result in airframe damage and decompression injuries, accomplish
the following:
(a) Upon accumulating 5,000 hours time-in-service (TIS) or
within the next 1,000 hours TIS after the effective date of this AD,
whichever occurs later, and thereafter at intervals not to exceed
5,000 hours TIS, replace each single-pane cockpit side window with a
new window of like design in accordance with the applicable
maintenance manual.
(1) Accomplish the inspection specified in paragraph (b) of this
AD between 10 to 20 hours TIS after replacing each window to ensure
that no damage has occurred after installation; and
(2) If cracks are found, utilize the chart in paragraph (b) of
this AD to determine the applicable action necessary.
(b) Visually inspect all acrylic single-pane cockpit side
windows for cracks in accordance with the service information
presented in paragraph (d)(2) of this AD, as applicable. Accomplish
the initial inspection, and applicable reinspection or replacement
as specified in the following chart:
------------------------------------------------------------------------
Condition Initial action Repetitive action
------------------------------------------------------------------------
Upon the effectiveness of Inspect at 150 hours Reinspect at
this Ad. TIS after the intervals not to
effective date of exceed 1,000 hours
this AD. TIS or 12 calendar
months, whichever
occurs first,
provided no cracks
are found. Use
applicable
condition column
entry to determine
compliance times if
cracks are found.
[[Page 51001]]
If cracks are found where Accomplish one of Accomplish the
the sum total of all cracks the following: corresponding
is less than 4.3 inches in 1. Prior to further repetitive action:
combined length, but where flight, replace the 1. Reinspect
a crack meets or exceeds window with a new initially between
.30 inches as specified in window of like 10 and 20 hours TIS
the Crack Limitations design in after replacing the
section of the service accordance with the window to ensure
information referenced in applicable that no damage has
paragraph (d)(2) of this AD. maintenance manual. occurred after
installation, and
thereafter at
intervals not to
exceed 1,000 hours
TIS or 12 calendar
months, whichever
occurs first,
provided no cracks
are found. Use
applicable
condition column
entry to determine
compliance times if
cracks are found.
or or
2. Prior to further 2. Repeat the
flight, fabricate a inspection
placard with the specified in
following words in paragraph (b) of
letters at least this AD at
0.10-inch in height intervals not to
and install this exceed 25 hours TIS
placard within the or 30 calendar
pilot's clear view days, whichever
close to the occurs first,
pressurization provided the sum
controls: total of all cracks
``AIRPLANE MUST BE does not exceed 4.3
OPERATED inches in combined
UNPRESSURIZED'', length. Use the
and prior to ``If cracks are
further flight, found where the sum
insert a copy of total of all cracks
this AD into the meets or exceeds
Limitations Section 4.3 inches in
of the FAA-approved combined length''
Airplane Flight condition column
Manual (AFM). for replacement and
inspection times if
the cracks found
are at that level.
If cracks are found where Prior to further Reinspect initially
the sum total of all cracks flight, replace the between 10 and 20
meets or exceeds 4.3 inches window with a new hours TIS after
in combined length. window of like replacing the
design in window to ensure
accordance with the that no damage has
applicable occurred after
maintenance manual. installation, and
thereafter at
intervals not to
exceed 1,000 hours
TIS or 12 calendar
months, whichever
occurs first,
provided no cracks
are found. Use
applicable
condition column
entry to determine
compliance times if
cracks are found.
With cracks found that are Reinspect within 25 Continue this
less than .30 inches (as hours TIS or 30 reinspection at
specified in the applicable calendar days, intervals not to
service information whichever occurs exceed 25 hours TIS
referenced in paragraph first. or 30 calendar
(d)(2) of the AD) provided days, whichever
the sum total of all cracks occurs first,
does not exceed 4.3 inches provided no crack
in combined length. is found that is
.30 inches or
greater or the
combined length of
all cracks exceeds
4.3 inches in
combined length.
Use applicable
condition column
entry to determine
compliance times if
any of these crack
limits are met.
With no cracks found after Reinspect within Reinspect at
one of the inspections 1,000 hours TIS and intervals not to
required by this AD. 12 calendar months exceed 1,000 hours
after the last TIS or 12 calendar
inspection, months, whichever
whichever occurs occurs first,
first. provided no cracks
are found. Use
applicable
condition column
entry to determine
compliance times if
cracks are found.
------------------------------------------------------------------------
(c) Visually inspect all acrylic cabin and dual-pane cockpit
side windows for cracks in accordance with the service information
specified in paragraphs (d)(1) and (d)(2) of this AD. Accomplish the
initial inspection and applicable reinspection or replacement as
specified in the following chart:
------------------------------------------------------------------------
Condition Initial action Repetitive action
------------------------------------------------------------------------
Upon the effectiveness of Inspect at 150 hours Reinspect at
this AD TIS after the intervals not to
effective date of exceed 1,000 hours
this AD, unless TIS or 12 calendar
already months, whichever
accomplished within occurs first,
the last 1,000 provided no cracks
hours TIS or 12 are found. Use
calendar months, applicable
which would put condition column
airplane in entry to determine
compliance with compliance times if
superseded AD 93-19- cracks are found.
06. Use the results For airplane owners/
of the previous operators taking
inspection under AD ``unless already
93-19-06 to accomplished''
determine credit for the
repetitive action initial inspection,
use the results of
the previous
inspection under AD
93-19-06 to
determine the
repetitive action.
[[Page 51002]]
If cracks are found where Accomplish one of Accomplish the
the sum total of all cracks the following: corresponding
is less than 4.3 inches in 1. Prior to further repetitive action:
combined length, but where flight, replace the 1. Reinspect
a crack meets or exceeds window with a new initially between
.30 inches as specified in window of like 10 and 20 hours TIS
the Crack Limitations design in after replacing the
section of the service accordance with the window to ensure
information referenced in applicable that no damage has
paragraph (d)(2) of this AD maintenance manual occurred after
installation, and
thereafter at
intervals not to
exceed 1,000 hours
TIS or 12 calendar
months, whichever
occurs first,
provided no cracks
are found. Use
applicable
condition column
entry to determine
compliance times if
cracks are found.
or or
2. Prior to further 2. Repeat the
flight, fabricate a inspection
placard with the specified in
following words in paragraph (b) of
letters at leas this AD at
0.10-inch in height intervals not to
and install this exceed 25 hours TIS
placard within the or 30 calendar
pilot's clear view days, whichever
close to the occurs first,
pressurization provided the sum
controls: total of all cracks
``AIRPLANE MUST BE does not exceed 4.3
OPERATED inches in combined
UNPRESSURIZED'', length. Use the
and prior to ``If cracks are
further flight, found where the sum
insert a copy of total of all cracks
this AD into the meets or exceeds
Limitations Section 4.3 inches in
of the FAA-approved combined length''
Airplane Flight condition column
Manual (AFM) for replacement and
inspection times if
the cracks found
are at that level.
If cracks are found where Prior to further Reinspect initially
the sum total of all cracks flight, replace the between 10 and 20
meets or exceeds 4.3 inches window with a new hours TIS after
in combined length window of like replacing the
design in window to ensure
accordance with the that no damage has
applicable occurred after
maintenance manual installation, and
thereafter at
intervals not to
exceed 1,000 hours
TIS or 12 calendar
months, whichever
occurs first,
provided no cracks
are found. Use
applicable
condition column
entry to determine
compliance times if
cracks are found.
With cracks found that are Reinspect within 25 Continue this
less than .30 inches (as hours TIS or 30 reinspection at
specified in the applicable calendar days, intervals not to
service information whichever occurs exceed 25 hours TIS
referenced in paragraph first or 30 calendar
(d)(2) of this AD) provided days, whichever
the sum total of all cracks occurs first,
does not exceed 4.3 inches provided no crack
in combined length is found that is
.30 inches or
greater or the
combined length of
all cracks exceeds
4.3 inches in
combined length.
Use applicable
condition column
entry to determine
compliance times if
any of these crack
limits are met.
With no cracks found after Reinspect within Reinspect at
one of the inspections 1,000 hours TIS and intervals not to
required by this AD 12 calendar months exceed 1,000 hours
after the last TIS or 12 calendar
inspection, months, whichever
whichever occurs occurs first,
first provided no cracks
are found. Use
applicable
condition column
entry to determine
compliance times if
cracks are found.
------------------------------------------------------------------------
(d) The following specifies the service bulletins that contain
the procedures to accomplish the required inspections:
(1) For acrylic cabin windows:
------------------------------------------------------------------------
Models Service bulletins
------------------------------------------------------------------------
SA26-T and SA26-AT........... 26-56-20-042, Issued: November 28, 1988,
Revised: February 7, 1991.
SA226-T and SA226-T(B)....... 226-56-001, Issued: February 2, 1983,
Revised: November 26, 1991.
SA226-AT and SA226-TC........ 226-56-002, Issued: March 3, 1983,
Revised: May 29, 1992.
SA227-AT, SA227-AC, and SA227- 227-56-002, Issued: January 5, 1984,
BC. Revised: May 29, 1992, and April 1,
1993.
SA227-TT..................... 227-56-001, Issued: February 2, 1983,
Revised: November 26, 1991.
------------------------------------------------------------------------
(2) For acrylic cockpit side windows:
------------------------------------------------------------------------
Models Service bulletin
------------------------------------------------------------------------
SA26-T and SA26-AT........... 26-56-10-038, Issued: October 8, 1984,
Revised: February 7, 1991.
SA226-T, SA226-T(B)..........
SA226-AT, and SA226-TC....... 226-56-003, Issued: September 13, 1984,
Revised: November 2, 1989.
SA227-AT, SA227-AC, SA227-BC, 227-56-003, Issued: September 13, 1984,
and SA227-TT. Revised: November 2, 1989.
------------------------------------------------------------------------
Note 3: The repetitive inspections required by this AD are also
referenced in the FAA-approved Fairchild Airframe Airworthiness
Limitations Manual, ST-UN-M001.
(e) Special flight permits may be issued in accordance with
sections 21.197 and 21.199
[[Page 51003]]
of the Federal Aviation Regulations (14 CFR 21.197 and 21.199) to
operate the airplane to a location where the requirements of this AD
can be accomplished.
(f) An alternative method of compliance or adjustment of the
initial or repetitive compliance times that provides an equivalent
level of safety may be approved by the Manager, Airplane
Certification Office (ACO), FAA, 2601 Meacham Boulevard, Fort Worth,
Texas 76193-0150. The request shall be forwarded through an
appropriate FAA Maintenance Inspector, who may add comments and then
send it to the Manager, Fort Worth ACO. Alternative methods of
compliance approved in accordance with AD 93-19-06 (superseded by
this action) are not considered approved as alternative methods of
compliance with this AD.
Note 4: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the Fort Worth ACO.
(g) The inspections required by this AD shall be done in
accordance with Fairchild Service Bulletin 26-56-20-042, Issued:
November 28, 1988; Revised: February 7, 1991, Fairchild Service
Bulletin 226-56-001, Issued: February 2, 1983; Revised: November 26,
1991, Fairchild Service Bulletin 227-56-001, Issued: February 2,
1983; Revised: November 26, 1991, Fairchild Service Bulletin 226-56-
002, Issued: March 3, 1983; Revised: May 29, 1992, Fairchild Service
Bulletin 227-56-002, Issued: January 5, 1984; Revised: May 29, 1992,
and April 1, 1993, Fairchild Service Bulletin 226-56-003, Issued:
September 13, 1984; Revised: November 2, 1989, Fairchild Service
Bulletin 227-56-003, Issued: September 13, 1984; Revised: November
2, 1989, and Fairchild Service Bulletin 26-56-10-038, Issued:
October 8, 1984; Revised: February 7, 1991, as applicable. This
incorporation by reference was previously approved by the Director
of the Federal Register in accordance with 5 U.S.C. 552 (a) and 1
CFR part 51. Copies may be obtained from Fairchild Aircraft, P.O.
Box 790490, San Antonio, Texas 78279-0490. Copies may be inspected
at the FAA, Central Region, Office of the Assistant Chief Counsel,
Room 1558, 601 E. 12th Street, Kansas City, Missouri, or at the
Office of the Federal Register, 800 North Capitol Street, NW., suite
700, Washington, DC.
(h) This amendment (39-9774) supersedes AD 93-19-06, Amendment
39-8705.
(i) This amendment (39-9774) becomes effective on November 14,
1996.
Issued in Kansas City, Missouri, on September 19, 1996.
Michael Gallagher,
Manager, Small Airplane Directorate, Aircraft Certification Service.
[FR Doc. 96-24886 Filed 9-27-96; 8:45 am]
BILLING CODE 4910-13-U
Complete official Federal Register PDF
FR Doc. 96-24875 Office of the Assistant Secretary for Community Planning and Development; Shelter Plus Care Program; Streamlining
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 51168-51171]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24875]
[[Page 51167]]
_______________________________________________________________________
Part III
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Part 582
Shelter Plus Care Program: Streamlining; Final Rule
Federal Register / Vol. 61, No. 190 / Monday, September 30, 1996 /
Rules and Regulations
[[Page 51168]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Community Planning and
Development; Shelter Plus Care Program; Streamlining
24 CFR Part 582
[Docket No. FR-4091-F-01]
RIN 2506-AB86
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule amends HUD's regulations for the Shelter Plus
Care Housing Program. In an effort to comply with the President's
regulatory reform initiatives, this rule will streamline the Shelter
Plus Care regulations by removing provisions that are redundant of
statutes or are otherwise unnecessary. This final rule will make the
Shelter Plus Care regulations clearer and more concise.
EFFECTIVE DATE: October 30, 1996.
FOR FURTHER INFORMATION CONTACT: David Pollack, Program Development
Division, Office of Community Planning and Development, Department of
Housing and Urban Development, Room 7260, 451 7th Street, SW.,
Washington, DC 20410; telephone (202) 708-1234. (This is not a toll-
free number.) Hearing-or speech-impaired persons may access this number
via TTY by calling the Federal Information Relay Service at 1-800-877-
8339.
SUPPLEMENTARY INFORMATION: 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 conducted a
page-by-page review of its regulations to determine which can be
eliminated, consolidated, or otherwise improved. The regulations in 24
CFR part 582 implement the Department's Shelter Plus Care Program,
which provides rental assistance that is matched with supportive
services for hard-to-serve homeless persons with disabilities. In
developing the regulations for the Shelter Plus Care, the Department
has always attempted to codify only those requirements that are
necessary to the proper administration of the program, and to allow the
recipients as much discretion and flexibility as possible. See, for
example, the interim rule, published on May 10, 1994 (59 FR 24252). The
Department has determined that it can further improve and streamline
the regulations for the Shelter Plus Care program.
This final rule makes the following specific amendments to part
582:
(1) Amends the first sentence of Sec. 582.1 regarding the
authorizing statute--the Stewart B. McKinney Homeless Assistance Act--
in order to facilitate references to the statute throughout the
regulations;
(2) Replaces many of the definitions in Sec. 582.5 that are
redundant of the statute with references to the pertinent statutory
sections;
(3) Removes the rating criteria for applications in Sec. 582.200(b)
that repeat statute and adds cross-reference to the statute;
(4) Revises Sec. 582.230 to add provisions on nonrecipient
responsible entities assuming HUD environmental review responsibilities
under the SRO component of the program. These revisions conform
Sec. 582.230 to 24 CFR part 58 as revised at 60 FR 13518, March 13,
1995, and at 60 FR 48610, September 19, 1995;
(5) Removes provisions in Sec. 582.310 that repeat the text of
section 3(a)(1) of the United States Housing Act of 1937; and
(6) Makes several conforming amendments to Secs. 582.105, 582.300,
582.305, and 582.340.
Justification for Final Rulemaking
The Department generally publishes a rule for public comment before
issuing a rule for effect, in accordance with its 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). The Department
finds that good cause exists to publish this rule for effect without
first soliciting public comment. This rule merely removes unnecessary
regulatory provisions and does not establish or affect substantive
policy. Therefore, prior public comment is unnecessary.
Findings and Certifications
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 streamlines
the Shelter Plus Care regulations by removing unnecessary provisions.
The rule will have no adverse or disproportionate economic impact on
small businesses.
Environmental Impact
This rule does not have an environmental impact. This rule simply
amends existing regulations by consolidating and streamlining
provisions; it does not alter the environmental effect of the
regulations being amended. As the Department developed the regulations
in part 582, Findings of No Significant Impact with respect to the
environment were made in accordance with 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). Those findings remain applicable to this
rule, and are 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.
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 the Department's policies or programs
will result from promulgation of this rule.
Unfunded Mandates Reform Act
The Secretary has reviewed this rule before publication and by
approving it certifies, in accordance with the Unfunded Mandates Reform
Act of 1995 (2 U.S.C. 1532), that this rule does not impose a Federal
mandate that will result in the expenditure by State, local, and tribal
governments, in the aggregate, or by the private sector, of $100
million or more in any one year. This rule is
[[Page 51169]]
limited to removing those unnecessary provisions in the Shelter Plus
Care Program regulations.
Catalog
The Catalog of Federal Domestic Assistance number is 14.238,
Shelter Plus Care.
List of Subjects in 24 CFR Part 582
Homeless, Rent subsidies, Reporting and recordkeeping requirements,
Supportive housing programs--housing and community development,
Supportive services.
Accordingly, for the reasons set forth in the preamble, 24 CFR part
582 is amended as follows:
PART 582--SHELTER PLUS CARE
1. The authority citation for 24 CFR part 582 is revised to read as
follows:
Authority: 42 U.S.C. 3535(d) and 11403-11407b.
2. Section 582.1 is amended by revising the first sentence in
paragraph (a) and by revising paragraph (b), to read as follows:
Sec. 582.1 Purpose and scope.
(a) General. The Shelter Plus Care program (S+C) is authorized by
title IV, subtitle F, of the Stewart B. McKinney Homeless Assistance
Act (the McKinney Act) (42 U.S.C. 11403-11407b). * * *
* * * * *
(b) Components. Rental assistance is provided through four
components described in Sec. 582.100. Applicants may apply for
assistance under any one of the four components, or a combination.
3. Section 582.5 is revised to read as follows:
Sec. 582.5 Definitions.
The terms Fair Market Rent (FMR), HUD, Public Housing Agency (PHA),
Indian Housing Authority (IHA), and Secretary are defined in 24 CFR
part 5.
As used in this part:
Acquired immunodeficiency syndrome (AIDS) and related diseases has
the meaning given in section 853 of the AIDS Housing Opportunity Act
(42 U.S.C. 12902).
Applicant has the meaning given in section 462 of the McKinney Act
(42 U.S.C. 11403g).
Eligible person means a homeless person with disabilities
(primarily persons who are seriously mentally ill; have chronic
problems with alcohol, drugs, or both; or have AIDS and related
diseases) and, if also homeless, the family of such a person. To be
eligible for assistance, persons must be very low income, except that
low-income individuals may be assisted under the SRO component in
accordance with 24 CFR 813.105(b).
Homeless or homeless individual has the meaning given in section
103 of the McKinney Act (42 U.S.C. 11302).
Indian tribe has the meaning given in section 102 of the Housing
and Community Development Act of 1974 (42 U.S.C. 5302).
Low-income means an annual income not in excess of 80 percent of
the median income for the area, as determined by HUD. HUD may establish
income limits higher or lower than 80 percent of the median income for
the area on the basis of its finding that such variations are necessary
because of the prevailing levels of construction costs or unusually
high or low family incomes.
Nonprofit organization has the meaning given in section 104 of the
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12704).
The term nonprofit organization also includes a community mental health
center established as a public nonprofit organization.
Participant means an eligible person who has been selected to
participate in S+C.
Person with disabilities means a household composed of one or more
persons at least one of whom is an adult who has a disability.
(1) A person shall be considered to have a disability if such
person has a physical, mental, or emotional impairment which is
expected to be of long-continued and indefinite duration; substantially
impedes his or her ability to live independently; and is of such a
nature that such ability could be improved by more suitable housing
conditions.
(2) A person will also be considered to have a disability if he or
she has a developmental disability, which is a severe, chronic
disability that--
(i) Is attributable to a mental or physical impairment or
combination of mental and physical impairments;
(ii) Is manifested before the person attains age 22;
(iii) Is likely to continue indefinitely;
(iv) Results in substantial functional limitations in three or more
of the following areas of major life activity:
(A) Self-care;
(B) Receptive and expressive language;
(C) Learning;
(D) Mobility;
(E) Self-direction;
(F) Capacity for independent living; and
(G) Economic self-sufficiency; and
(v) Reflects the person's need for a combination and sequence of
special, interdisciplinary, or generic care, treatment, or other
services which are of lifelong or extended duration and are
individually planned and coordinated.
(3) Notwithstanding the preceding provisions of this definition,
the term person with disabilities includes, except in the case of the
SRO component, two or more persons with disabilities living together,
one or more such persons living with another person who is determined
to be important to their care or well-being, and the surviving member
or members of any household described in the first sentence of this
definition who were living, in a unit assisted under this part, with
the deceased member of the household at the time of his or her death.
(In any event, with respect to the surviving member or members of a
household, the right to rental assistance under this part will
terminate at the end of the grant period under which the deceased
member was a participant.
Recipient means an applicant approved to receive a S+C grant.
Seriously mentally ill has the meaning given in section 462 of the
McKinney Act (42 U.S.C. 11403g).
Single room occupancy (SRO) housing means a unit for occupancy by
one person, which need not but may contain food preparation or sanitary
facilities, or both.
Sponsor means a nonprofit organization which owns or leases
dwelling units and has contracts with a recipient to make such units
available to eligible homeless persons and receives rental assistance
payments under the SRA component.
State has the meaning given in section 462 of the McKinney Act (42
U.S.C. 11403g).
Supportive service provider, or service provider, means a person or
organization licensed or otherwise qualified to provide supportive
services, either for profit or not for profit.
Supportive services means assistance that--
(1) Addresses the special needs of eligible persons; and
(2) Provides appropriate services or assists such persons in
obtaining appropriate services, including health care, mental health
treatment, alcohol and other substance abuse services, child care
services, case management services, counseling, supervision, education,
job training, and other services essential for achieving and
maintaining independent living.
(Inpatient acute hospital care does not qualify as a supportive
service.).
Unit of general local government has the meaning given in section
102 of the Housing and Community Development Act of 1974 (42 U.S.C.
5302).
[[Page 51170]]
Very low-income means an annual income not in excess of 50 percent
of the median income for the area, as determined by HUD, with
adjustments for smaller and larger families. HUD may establish income
limits higher or lower than 50 percent of the median income for the
area on the basis of its finding that such variations are necessary
because of unusually high or low family incomes.
Sec. 582.105 [Amended]
4. In Sec. 582.105, paragraph (a) is amended by removing the words
``paragraph (f)'' and adding, in their place, the words ``paragraph
(e)''; and paragraph (d)(2) is amended by removing the word
``paragraph'' and adding, in its place, the words ``paragraph (d)''.
5. Section 582.200 is revised to read as follows:
Sec. 582.200 Application and grant award.
(a) Review. When funds are made available for assistance, HUD will
publish a notice of fund availability in the Federal Register in
accordance with the requirements of 24 CFR part 4. Applications will be
reviewed and screened in accordance with the guidelines, rating
criteria and procedures published in the notice.
(b) Rating criteria. HUD will award funds based on the criteria
specified in section 455(a)(1) through (8) of the McKinney Act (42
U.S.C. 11403d(1)--11403d(8)) and on the following criteria authorized
by section 455(a)(9) of the McKinney Act (42 U.S.C. 11403d(9)):
(1) The extent to which the applicant has demonstrated coordination
with other Federal, State, local, private and other entities serving
homeless persons in the planning and operation of the project, to the
extent practicable;
(2) Extent to which the project targets homeless persons living in
emergency shelters, supportive housing for homeless persons, or in
places not designed for, or ordinarily used as, a regular sleeping
accommodation for human beings;
(3) Quality of the project; and
(4) Extent to which the program will serve homeless persons who are
seriously mentally ill, have chronic alcohol and/or drug abuse
problems, or have AIDS and related diseases.
(Approved by the Office of Management and Budget under control
number 2506-0118)
6. Section 582.230 is revised to read as follows:
Sec. 582.230 Environmental review requirements.
(a) Responsibility for review. (1) HUD will perform the
environmental review, in accordance with part 50 of this title, for
conditionally selected applications received from PHA applicants and
from IHA applicants. HUD is not permitted to approve such applications
prior to its completion of this review, nor is the PHA or IHA permitted
to enter into a contract for, or otherwise commit HUD or local funds
for, acquisition, rehabilitation, conversion, lease, repair, or
construction of property to provide housing under the program, prior to
HUD's completion of this review and approval of the application, except
under the SRO component.
(2) Applicants that are States, units of general local government,
or Indian tribes must assume responsibility as ``responsible entities''
for environmental review, decisionmaking, and action for each
application for assistance in accordance with part 58 of this title. In
addition, for PHA projects and IHA projects under the SRO component,
environmental reviews will be performed by State, local government,
Indian tribe, or Alaska native village ``nonrecipient responsible
entities'' as provided under part 58 of this title. HUD is permitted to
approve such applications subject to the completion of reviews by the
applicant in accordance with part 58 of this title. Applicants
performing these reviews may adopt relevant and adequate prior reviews
conducted by HUD or another governmental entity if the reviews meet the
particular requirements of the Federal environmental law or authority
under which they would be adopted, and only under certain conditions
(e.g., a determination that no environmentally significant changes have
occurred since the review was done). Applicants who adopt such relevant
and adequate prior reviews may include the environmental certification
and Request for Release of Funds with their applications.
(b) Environmental review by HUD. With regard to the environmental
effects of applications for which HUD performs the review, HUD will
undertake its review in accordance with the provisions of NEPA and the
related authorities listed in 24 CFR 50.4. HUD may eliminate an
application from consideration where the application would require an
Environmental Impact Statement (EIS). PHA applicants and IHA applicants
(other than under the SRO component) must include in their application
an assurance that the applicant will:
(1) Not enter into a contract for, or otherwise commit HUD or local
funds for, acquisition, rehabilitation, conversion, lease, repair, or
construction of property to provide housing under the program, prior to
HUD's completion of the review and approval of the application;
(2) Supply HUD with information necessary for HUD to perform any
applicable environmental review when requested under Sec. 582.225(a);
and
(3) Carry out mitigating measures required by HUD or ensure that
alternate sites are utilized.
(c) Environmental review by applicants or nonrecipient responsible
entities. (1) An applicant that is required under paragraph (a)(2) of
this section to assume environmental review responsibility must include
in its application an assurance that the applicant will assume all the
environmental review responsibility that would otherwise be performed
by HUD as the responsible Federal official under NEPA and related
authorities listed in 24 CFR 58.5. A PHA or IHA applicant under the SRO
component must include in its application an assurance by the
nonrecipient responsible entity that the entity will assume all the
environmental review responsibility that would otherwise be performed
by HUD as the responsible Federal official under NEPA and related
authorities listed in 24 CFR 58.5.
(2) For applicants required to assume environmental review
responsibility and for PHAs and IHAs under the SRO component, the award
of funding is subject to completion of the environmental
responsibilities set out in 24 CFR part 58 within a reasonable time
period after notification of the award. (This provision does not
preclude the applicant from enclosing its environmental certification
and Request for Release of Funds with its application.)
(i) Upon completion of the requirements in 24 CFR part 58:
(A) Applicants required to assume environmental review
responsibility must certify the completion;
(B) PHA and IHA applicants under the SRO component must submit the
nonrecipient responsible entities' certification of completion; and
(C) All applicants must submit a Request for Release of Funds. This
submission is not required in cases in which the applicant determines,
in accordance with part 58 that its program components are totally
exempt.
(ii) HUD will not release grant funds if the recipient or any other
party commits grant funds (i.e., incurs any costs or expenditures to be
paid or reimbursed with such funds) before the grantee submits and HUD
approves its Request for Release of Funds (when such submission is
required).
[[Page 51171]]
Sec. 582.300 [Amended]
6. In Sec. 582.300, paragraph (a)(1) is amended by removing the
words ``Sec. 582.340(e)'' and adding, in their place, the words
``Sec. 582.340(b)''.
Sec. 582.305 [Amended]
7. In Sec. 582.305, paragraph (a) is amended by removing the words
``882.109'' and adding, in their place, the words ``982.401''.
8. In Sec. 582.310, paragraph (a) is revised to read as follows:
Sec. 582.310 Resident rent.
(a) Amount of rent. Each participant must pay rent in accordance
with section 3(a)(1) of the U.S. Housing Act of 1937 (42 U.S.C.
1437a(3)(1)), except that the gross income of a person occupying an
intermediate care facility assisted under title XIX of the Social
Security Act is the same as if the person were being assisted under
title XVI of the Social Security Act.
* * * * *
9. Section 582.340 is amended by:
a. Revising paragraph (a)(1);
b. In paragraphs (b)(2) and (b)(3)(iv), removing the words
``paragraph (e)(1)'', each place they appear and adding in each place,
the words ``paragraph (b)(1)'';
c. Revising paragraph (b)(2)(i); and
d. In the introductory text of paragraph (b)(3), removing the words
``paragraph (e)(2)'' and adding, in their place, the words ``paragraph
(b)(2)'', to read as follows:
Sec. 582.340 Other Federal requirements.
(a) * * *
(1) The policies, guidelines, and requirements of OMB Circular No.
A-87 (Cost Principles Applicable to Grants, Contracts and Other
Agreements with State and Local Governments) and 24 CFR part 85 apply
to the acceptance and use of assistance under the program by
governmental entities, and OMB Circular Nos. A-110 (Grants and
Cooperative Agreements with Institutions of Higher Education,
Hospitals, and Other Nonprofit Organizations) and 24 CFR part 84 and A-
122 (Cost Principles Applicable to Grants, Contracts and Other
Agreements with Nonprofit Institutions) apply to the acceptance and use
of assistance by private nonprofit organizations, except where
inconsistent with provisions of the McKinney Act, other Federal
statutes, or this part. (OMB Circulars are available from the Executive
Office of the President, Publication Service, 725 17th Street, N.W.,
Suite G-2200, Washington, DC 20503, Telephone 202-395-7332.)
(b) * * *
(2) * * *
(i) For States, units of general local governments, PHAs and IHAs,
a disclosure of the nature of the conflict, accompanied by an assurance
that there has been public disclosure of the conflict and a description
of how the public disclosure was made; and
* * * * *
Dated: September 23, 1996.
Andrew M. Cuomo,
Assistant Secretary for Community Planning and Development.
[FR Doc. 96-24875 Filed 9-27-96; 8:45 am]
BILLING CODE 4210-29-P
Complete official Federal Register PDF
FR Doc. 96-24874 Public and Indian Housing Performance Funding System: Incentives
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 51178-51184]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24874]
[[Page 51177]]
_______________________________________________________________________
Part V
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Parts 950 and 990
Public and Indian Housing Performance Funding System: Incentives;
Interim Rule
Federal Register / Vol. 61, No. 190 / Monday, September 30, 1996 /
Rules and Regulations
[[Page 51178]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Public and Indian Housing
24 CFR Parts 950 and 990
[Docket No. FR-4072-I-01]
RIN 2577-AB65
Public and Indian Housing Performance Funding System: Incentives
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Interim rule.
-----------------------------------------------------------------------
SUMMARY: This interim rule amends HUD's regulations for the Performance
Funding System that governs payment of operating subsidy to Public
Housing Agencies and Indian Housing Authorities (collectively called
Housing Agencies or HAs). It makes four principal changes: it codifies
incentive adjustments that were made for Federal Fiscal Years 1996
through 1998 via a Notice to Housing Agencies; it adds a provision to
gradually phase down operating subsidies provided to Housing Agencies
when they obtain HUD approval to demolish units; it clarifies how
combining two efficiency units into a one-bedroom unit is to be treated
for operating subsidy eligibility; and it removes a limitation on the
time period that applies to an HA's eligibility to benefit from certain
utility savings efforts.
A rule is necessary because the incentives that were contained in
the referenced Notice were based on legislation that expires after
September 30, 1996. Without action by HUD to continue these incentives
beyond that date, HAs may be reluctant to adopt and implement
worthwhile practices based solely on the provisions of the Notice.
Since the Secretary has authority to regulate in this area,
promulgation of this interim rule will give HAs a regulatory basis for
adopting worthy changes. The change with respect to utility savings is
to conform the regulation to the statute, since a six-year limitation
was just removed from the authorizing statute.
DATES: Effective date: October 30, 1996, except that Secs. 950.725(b),
950.756, 950.757, 990.109(b), 990.114, and 990.116 shall not become
effective until the OMB approval of the information collections
contained in those sections are announced by a separate publication in
the Federal Register.
Comment due date: Comments must be submitted by November 29, 1996.
The deadline for comments on the information collection
requirements is November 29, 1996, although commenters are advised that
a comment is best assured of having its full effect if it is received
by the Office of Management and Budget (OMB) within 30 days of
publication. See the Public Reporting Burden heading under the Findings
and Certifications section of this preamble regarding the information
collection burden.
ADDRESSES: Interested persons are invited to submit comments regarding
this rule to the Office of the General Counsel, Rules Docket Clerk,
room 10276, Department of Housing and Urban Development, 451 Seventh
Street, SW, Washington, DC 20410-0500. Comments should refer to the
above docket number and title of the rule. Facsimile (FAX) comments are
not acceptable. A copy of each communication submitted will be
available for public inspection and copying during regular business
hours (weekdays 7:30 a.m. to 5:30 p.m. Eastern time) at the above
address.
Comments on the information collections contained in the rule,
which are described in detail in the section, Findings and
Certifications, must refer to the docket number and title of the rule
and be sent to:
Joseph F. Lackey, Jr., HUD Desk Officer, Office of Management and
Budget, New Executive Office Building, Washington, DC 20503
and
Reports Liaison Officer, Room 4238, Office of Public and Indian
Housing, Department of Housing and Urban Development, 451 Seventh
Street, SW, Washington, DC 20410-5000.
FOR FURTHER INFORMATION CONTACT: For the public housing program,
contact Joan DeWitt, Director, Finance and Budget Division, Office of
Public and Assisted Housing Operations, Department of Housing and Urban
Development, 451 Seventh Street, SW., Washington, DC 20410, telephone
(voice): (202) 708-1872, ext. 4035. (This is not a toll-free number.)
For hearing- and speech-impaired persons, this number may be accessed
via text telephone by dialing the Federal Information Relay Service at
1-800-877-8339.
For the Indian housing programs, contact Deborah Lalancette,
Director, Housing Management Division, Office of Native American
Programs, Department of Housing and Urban Development, Room B-133, 451
Seventh Street, SW., Washington, DC 20410, telephone (voice): (202)
755-0088. (This is not a toll-free number.) For hearing- and speech-
impaired persons, this number may be accessed via text telephone by
dialing the Federal Information Relay Service at 1-800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Changes to Encourage HAs to Facilitate Resident Employment and
Undertake Entrepreneurial Initiatives
Congress enacted the Balanced Budget Downpayment Act I on January
26, 1996 (Pub. L. No. 104-99), effective only for Federal Fiscal Year
1996. This legislation permitted housing agencies to take actions to
attract and retain working families in occupancy such as the adoption
of ceiling rents, adoption of earned income adjustments that would make
work attractive to tenants, and adoption of local preferences. The
legislation also repealed Federal admissions preferences.
HUD issued a Notice to housing agencies (PIH 96-24) in the spring
of 1996, providing an incentive under the Performance Funding System
(PFS) for HAs that make significant efforts to utilize the new optional
earned income adjustments for existing residents or that undertake
entrepreneurial activities. The Notice made the incentive effective for
the shorter of the period of three Federal Fiscal Years (FFYs), 1996-
1998, or the period during which there is a shortfall in the
availability of funds to pay full operating subsidy eligibility to all
HAs. Specifically, the Notice permitted HAs that implement the optional
earned income exclusion for existing residents to offset performance
funding system (PFS) funding shortfalls by retaining increases in
dwelling rental income that result from increases in residents' earned
incomes. The Notice also provided an incentive related to other income
earned by the HAs through entrepreneurial activities. This rule adopts
similar changes.
The Secretary has authority under section 3 of the United States
Housing Act of 1937, 42 U.S.C. 1437a, to define the term ``income,'' as
it used for purposes of determining eligibility and rental payment in
the public and Indian housing programs. Although the Appropriations Act
provision expires at the end of the current fiscal year (September 30,
1996), a change made by the Secretary in the definition of income
permitting HAs to adopt an exclusion for earned income can have longer
lasting effect. The Secretary is exercising this authority in another
pending rulemaking, but this rule specifies the impact of adoption of
such an exclusion by an HA.
[[Page 51179]]
Under this new policy, HAs have the authority to establish their
own earned income exclusion, as a means of attracting and retaining
more tenants with earned income. PFS subsidies, however, will be
calculated without respect to either decreases in rental income
resulting from the exclusion, or increases resulting from higher rents
received from households with earned income. In general, HAs that opt
to adopt earned income exclusions will increase their total income if
they are successful in obtaining more and/or higher income working
tenants but will lose income if their policies do not produce a net
increase in rent revenues.
To permit proper determination of operating subsidy eligibility, in
accordance with the principle stated above, a housing agency that
adopts an earned income exclusion will have to calculate and document
the following:
(1) Per unit rental income from resident earned income in the April
1, 1996 rent roll;
(2) A future month's per unit rental income from resident earned
income (see Secs. 950.757(b) and 990.116(b)); and
(3) A future month's rent roll adjusted so that it does not reflect
decreases resulting from the HA's implementation of an optional earned
income exclusion (see Secs. 950.725(b)(1)(ii) and 990.109(b)(1)(ii)).
In addition to the change with respect to an earned income
adjustment, the Department's recent Notice suspended a three percent
change factor applied to project an HA's dwelling rental income. In
recent years this assumption of an increase in the dwelling rental
income has not been realized. In order to ensure that all HAs receive a
level of funding that most nearly reflects their final eligibility
based on actual experience, without requiring them to request a year
end adjustment, the Department suspended use of the change factor for
the same period of time as applies to the earned income exclusion. This
rule codifies that change, as well.
The rationale for incorporating these changes in the PFS regulation
is to ensure some degree of continuity in Departmental policy on which
HAs may rely. The Department believes that these measures can
significantly improve the stability of HAs by permitting HAs to improve
the income mix in their developments, and thus increase dwelling rental
income. The retention by HAs of additional rental income--and other
income--above that permitted under the current PFS formula, up to 100
percent of their PFS eligibility, will directly allow these HAs to
provide better housing services in their communities.
There is statutory authority for these changes under section 9 of
the United States Housing Act of 1937, 42 U.S.C. 1437g. That provision
authorizes HUD to base operating subsidy to housing agencies on a
performance funding system that is substantially based on the system
defined in regulations and in effect on February 5, 1988. These changes
to the PFS are not substantial changes. They deal only with the matter
of how to cope with a subsidy shortfall during the three-year period of
FY 1996 through FY 1998, but they do not apply during any FFY during
which there is not an overall PFS shortfall.
II. Transition Funding for Units Approved for Demolition
This rule also contains a change to the PFS regulations to provide
a short transition period of funding for HAs that have received
approval to demolish HA-owned public or Indian housing units. The
purpose of the change is to encourage and support efforts by an HA to
reduce its overhead costs in a planned and orderly manner when its
inventory of units is reduced by demolition.
Under the current PFS regulations, units are no longer eligible for
operating subsidy when the Department approves the unit for
deprogramming (including approval to demolish the unit) and the unit is
vacant. The only funding provided after that point is funding for
direct costs relating to preserving and protecting the unit pending
actual demolition or disposition.
This abrupt cut-off in subsidy does not provide an opportunity for
affected HAs to reduce their overhead costs in a planned and orderly
way. An HA that undertakes a significant reduction to its inventory
will need to rethink and possibly restructure the way it does business.
This is especially true if the units are not going to be replaced or if
some different type of development management is contemplated. Some HAs
are contemplating the demolition of up to 20% of their inventory.
Faced with the prospect of a sudden and sharp decrease in subsidy
funding, some HAs may decide to postpone the decision to seek HUD
approval to demolish units that clearly meet the criteria for such an
action, especially where the units are not being replaced by tenant-
based subsidy, such as Section 8 Certificates or Vouchers. By retaining
these units in its inventory, an HA continues to receive some level of
operating subsidy support.
This proposed rule strikes a balance between the need to eliminate
disincentives and the need to achieve a reduction in operating subsidy
as a result of demolition activity. Subsidy funding will be continued
to units approved by HUD for demolition under the following conditions:
(1) Units replaced with Section 8 Certificates or Vouchers will not
be eligible for phase-down subsidy;
(2) Units that have been continuously vacant for the twelve-month
period immediately preceding HUD approval for the demolition will be
eligible for subsidy funding based on 20% of the Allowable Expense
Level (AEL) for 12 months beginning with the month that the demolition
request was approved by HUD; and
(3) For units that have not been continuously vacant for twelve
months, the rule phases out the subsidy over a three-year period,
starting with the month in which the unit is approved for demolition
and is vacant. For the initial 12-month period, the unit will be
eligible for subsidy funding based on 100% of AEL. For the next 12-
month period, the unit will be eligible for subsidy funding based on
66% of the AEL. For the third 12-month period, the unit will be
eligible for funding based on 33% of the AEL.
(4) Units that are approved for demolition and are replaced with
conventional public or Indian housing units will not be eligible for
phase-down subsidy when the replacement units become eligible for
subsidy.
(5) Units that are removed from the inventory as a result of being
combined with other units are not considered to be demolished units for
this purpose.
The intent of this change is to maintain the momentum that has been
achieved to demolish the worst parts of the public housing inventory.
The Department is concerned that if it does not address the legitimate
transitional funding need problems of HAs undergoing inventory and
funding reductions, this momentum will be lost.
This change to the PFS regulations falls within the authority of
the Secretary to define the PFS for payment of operating subsidy. The
change merely removes some of the obstacles to demolishing seriously
deteriorated or obsolete housing stock, while coping with an operating
subsidy shortfall.
One limitation on the Department's ability to issue rules on the
subject of PFS is the statutory requirement that ``any proposed
regulation providing for amendment, alteration, adjustment, or other
change in the performance funding system relating to vacant units shall
be issued pursuant to a negotiated rule making procedure * * *.''
This rule will provide additional operating subsidy to certain HAs
that had or will have (vacant) units approved
[[Page 51180]]
for demolition in 1995 or later. The additional costs to the PFS are
estimated as follows: $17.6 million in FY 1997 (including $1.3 million
for FY 1995, $6 million for FY 1996, and $10.3 million for FY 1997);
$19.6 million in FY 1998; and $25.5 million in FY 1999. The
corresponding savings for the PFS resulting from the demolitions are as
follows: $4.9 million in FY 1996; $10.8 million in FY 1997; $44.1
million in FY 1998; and $81.9 million in FY 1999. When the savings are
compared with the cost, the results are a net cost of $1.9 million for
FYs 1995 through 1997, but a net savings of $24.5 million and $56.4
million, respectively, for FYs 1998 and 1999. Thus, the net effect of
this rule on PFS during the period is a savings in total operating
subsidy eligibility amount.
Moreover, compared to the magnitude of the PFS in its entirety,
this phase-down funding is minimal in scale. The $1,900,000 of net cost
in FYs 1996 and 1997 can be contrasted with the amount provided in the
FY 1997 HUD appropriations bill as passed by the House of
$2,850,000,000. In addition, it should be noted that most HAs that are
demolishing public or Indian housing units are receiving certificates
as replacement for those lost units. Those HAs are not eligible for
phase-down of subsidy under this rule, and so are not affected by this
provision.
The purpose to be served by a negotiated rulemaking is to assure
that all interested parties have an opportunity to advance their
interests during the development of a proposal that will affect them.
Since the phase-down of subsidy for units approved for demolition
produces an overall savings to the PFS and is minimal in effect when
compared with the overall level of PFS funding, the impact on HAs and
tenants of this rule does not rise to the level to necessitate
participation in a negotiated rulemaking. Therefore, the Department has
determined that the phase-down provision does not constitute the type
of change in PFS relating to vacant units for which a negotiated
rulemaking is required.
III. Treatment of Combination of Two Efficiency Units Into a One
Bedroom Unit
In recognition of the marketing problem HAs have regarding
efficiency apartments and the resulting high vacancy rates in these
units, the Department wants to support HAs which make the decision to
convert efficiency units into one bedroom units. This rule amends
Secs. 990.108(d) and 950.720(e), Costs resulting from combination of
two or more units, to treat the conversion of two efficiency units into
a one-bedroom unit as eligible for funding under this section.
IV. Changes to Utility Savings Retention Period
In enacting the 1996 Omnibus Appropriations Act, Congress removed
the statutory restriction of six years imposed after the first year of
utility rate savings that an HA is permitted to share. Therefore, this
rule removes the language from the rule that enforced that time limit.
Now, the utility rate savings can continue to be shared for as long as
the actions of the HA continue to be cost-effective.
This change is being made not only for public housing but also for
Indian housing. Section 201(b)(2) of the United States Housing Act of
1937 (42 U.S.C. 1437aa(b)(2), ``the 1937 Act'') provides that
amendments to provisions found in title II of the 1937 Act do not apply
to Indian housing unless the amendment so states. Nevertheless, when
the statutory authority to extend the period of permitted rate savings
sharing from one year to seven years was implemented, the extension was
made applicable to Indian housing despite the absence of specific
mention of Indian housing in the statutory amendment. The preamble of
the rule implementing the extension stated (at 59 FR 33653) that, ``Not
to do so would frustrate the goals of providing incentives to undertake
energy conservation activities.'' That policy still governs, and
therefore this change to extend the period during which utility rate
savings can continue is being applied to Indian housing, as well.
V. Findings and Certifications
A. Justification for Interim Rule
The Department generally publishes a rule for public comment before
issuing a rule for effect, in accordance with its regulations on
rulemaking in 24 CFR part 10. However, part 10 provides that prior
public procedure will be omitted if HUD determines that it is
``impracticable, unnecessary, or contrary to the public interest'' (24
CFR 10.1).
The change made by this interim rule merely adds an optional
exclusion to the definition of income used by Housing Agencies, which
supports the statutory policy of obtaining a broad range of income
levels in public housing and Indian housing developments and the
Secretary's policy of encouraging HAs to increase the number of working
families residing in these developments. As noted earlier, the
Department has already authorized the use of such income exclusions for
a limited period of time, based on the Balanced Budget Downpayment Act
I, in a Notice. Authorization of such an optional exclusion in this
rule is expected to increase the number of HAs using it, helping to
encourage the participation of working families in these programs.
Implementation of the rule's provisions is needed as soon as
possible to facilitate the adoption of this type of exclusion to
realize the benefits of increasing the incentives for working families
to participate and to prevent HAs who are now excluding earned income
from having to change their policy starting on October 1, 1996, only to
re-institute it later. Therefore, the Department has determined that
good cause exists to omit prior public procedure for this final rule
because such delay would be contrary to the public interest and
unnecessary.
In the interest of obtaining the fullest participation possible in
determining the factors that should be considered in an HA's
determination to adopt an earned income exclusion and to assure that
other changes made are well-tailored to HA operations, the Department
does invite public comment on the rule. The comments received within
the 60-day comment period will be considered during development of a
final rule that will supersede this interim rule.
B. Impact on the Environment
In accordance with 40 CFR 1508.4 of the regulations of the Council
on Environmental Quality and 24 CFR 50.20(o) of the HUD regulations,
the policies and procedures contained in this interim rule relate only
to operating costs that do not affect a physical structure or property
and, therefore, are categorically excluded from the requirements of the
National Environmental Policy Act (42 U.S.C. 4332).
C. Federalism Impact
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the policies
contained in this rule do not have significant impact 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. As a result,
the rule is not subject to review under the Order. The rule adds some
incentives to the formula under which operating subsidies are paid on
HUD-assisted housing owned and operated by HAs, but will not interfere
with State or local government functions.
[[Page 51181]]
D. Impact on the Family
The General Counsel, as the Designated Official under Executive
Order 12606, The Family, has determined that this rule does not have
potential for significant impact on family formation, maintenance, and
general well-being. Therefore, the rule is not subject to review under
the Order. No significant change in existing HUD policies or programs
results from promulgation of this rule, as those policies and programs
relate to family concerns. The rule merely involves the amount of
funding that a HA should receive under a refinement of an existing
procedure.
E. Impact on Small Entities
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed this rule before publication and by
approving it certifies that this rule will not have a significant
impact on a substantial number of small entities. This rule will permit
some modest increase in subsidy eligibility for HAs that take advantage
of the incentives. The rule would be unlikely to have any significant
impact on small HAs.
F. Unfunded Mandates Reform Act
The Secretary has reviewed this rule before publication and by
approving it certifies, in accordance with the Unfunded Mandates Reform
Act of 1995 (2 U.S.C. 1532), that this rule does not impose a Federal
mandate that will result in the expenditure by State, local, and tribal
governments, in the aggregate, or by the private sector, of $100
million or more in any one year.
G. Regulatory Review
This interim rule was reviewed by the Office of Management and
Budget under Executive Order 12866. Any changes made in this interim
rule as a result of that review are clearly identified in the docket
file for this interim rule, which is available for public inspection in
the HUD's Office of the Rules Docket Clerk, Room 10276, 451 Seventh
Street, SW., Washington, DC 20410-0500.
H. Public Reporting Burden
The information collection requirements contained in this rule, as
described in Secs. 950.725(b), 950.756, 950.757, 990.109(b), 990.114,
and 990.116 have been submitted to the Office of Management and Budget
for review under the Paperwork Reduction Act of 1995 (42 U.S.C. 3501-
3520).
1. In accordance with 5 CFR 1320.5(a)(1)(iv), the Department is
setting forth the following concerning the proposed collection of
information:
(a) Title of the information collection proposal: Performance
Funding System Incentives.
(b) Summary of the collection of information: The information
collected is alternate information about rental income that would have
been collected if the HA had not adopted an earned income exclusion,
information about vacant units that have been approved for demolition
and would not otherwise be eligible for operating subsidy, and
identifying increases in earned income so as to exclude some of that
income.
(c) Description of the need for the information and its proposed
use: The information is needed to permit calculation of operating
subsidy eligibility for HAs that want to take advantage of incentives
to facilitate resident employment and to encourage demolition of
seriously deteriorated vacant units.
(d) Description of the likely respondents, including the estimated
number of likely respondents, and proposed frequency of response to the
collection of information: The likely respondents are the approximately
700 HAs that are estimated to take advantage of the incentives.
(e) Estimate of the total reporting and recordkeeping burden that
will result from the collection of information: The total number of
burden hours for this collection of information is estimated to be
16,120 hours, including the time for reviewing instructions, gathering
and maintaining the data, and calculating and requesting the incentive
adjustment. The information will be collected as part of the annual
calculation of eligibility for operating subsidy. The 700 HAs will
determine the effect of the incentives, at a cost of about $15 per
hour, for a total cost of $241,800. This amount is expected to be more
than offset by the resulting increase in operating subsidy payments.
These estimates were developed by consulting with eight housing
agencies.
Reporting Burden:
----------------------------------------------------------------------------------------------------------------
Proposed section Est. ave.
Type of collection of 24 CFR Number of Frequency of response time Annual burden
affected respondents response (hrs.) (hrs.)
----------------------------------------------------------------------------------------------------------------
Addition to PFS rent roll of 950.725& 990.109 700 1 3 2,100
Earned Income Exclusions. (b)(1)(ii).
Phase-down for demolished 950.756, 990.114 20 1 1 20
units.
Incentive for increases in 950.757, 990.116 700 1 20 14,000
earned income.
---------------
Total Burden............ ................ .............. .............. .............. 16,120
----------------------------------------------------------------------------------------------------------------
2. In accordance with 5 CFR 1320.8(b)(3), the Department makes the
following statement:
The reason for collecting the information is to give HUD the basis
for approving a request for a PFS incentive adjustment in operating
subsidy. The information will be used by HUD to approve an adjustment
based on the adoption of an earned income exclusion and/or based on a
phase-down of operating subsidy in connection with demolition of units.
The information collected is public information and does not lend
itself to confidentiality. In accordance with the Paperwork Reduction
Act, HUD may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless the collection displays
a currently valid OMB control number.
3. In accordance with 5 CFR 1320.8(d)(1), the Department is
soliciting comments from members of the public and affected agencies
(see DATES and ADDRESSES sections above) concerning the proposed
collection of information to:
(a) Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
(b) Evaluate the accuracy of the agency's estimate of the burden of
the proposed collection of information;
(c) Enhance the quality, utility, and clarity of the information to
be collected; and
(d) Minimize the burden of the collection of information on those
who
[[Page 51182]]
are to respond; including through the use of appropriate automated
collection techniques or other forms of information technology, e.g.,
permitting electronic submission of responses.
Catalog
The Catalog of Federal Domestic Assistance number for the
programs affected by this rule is 14.850.
List of Subjects
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 990
Grant programs--housing and community development, Public housing,
Reporting and recordkeeping requirements.
Accordingly, parts 950 and 990 of title 24 of the Code of Federal
Regulations are amended as follows:
PART 950--INDIAN HOUSING PROGRAMS
1. The authority citation for part 950 continues to read as
follows:
Authority: 25 U.S.C. 450e(b); 42 U.S.C. 1437aa-1437ee and
3535(d).
2. In Sec. 950.705, a new paragraph (c) is added, to read as
follows:
Sec. 950.705 Determination of amount of operating subsidy under PFS.
* * * * *
(c) A special phase-down of subsidy to IHAs is applicable when
demolition of units is approved by HUD in Federal Fiscal Year 1995 and
later. See Sec. 950.756.
Sec. 950.715 [Amended]
3. In Sec. 950.715, paragraph (b)(2) is amended by removing the
phrase ``for an additional period not to exceed six years''.
4. In Sec. 950.720, paragraph (e) is amended by redesignating the
text as paragraph (e)(1), and by adding a new paragraph (e)(2), to read
as follows:
Sec. 950.720 Other costs.
* * * * *
(e) * * *
(2) An exception to paragraph (e)(1) of this section is made when
an IHA combines two efficiency units into a one-bedroom unit. In these
cases, the AEL for the requested year shall be multiplied by the number
of unit months not included in the requested year's unit months
available as a result of these combinations that have occurred since
the Base Year.
* * * * *
5. In Sec. 950.725, paragraph (b) is amended by redesignating
paragraph (b)(1) as paragraph (b)(1)(i), by adding a new paragraph
(b)(1)(ii), and by revising paragraph (b)(2), to read as follows:
Sec. 950.725 Projected operating income level.
* * * * *
(b) * * *
(1) * * *
(ii) The Rent Roll used for calculating the projected operating
income level will not reflect decreases resulting from the IHA's
implementation of an optional earned income exclusion authorized by the
definition of ``annual income'' in Sec. 950.102. But see Sec. 950.757
for the earned income incentive adjustment.
(2) Three percent increase. The average monthly dwelling rental
charge per unit, computed under paragraph (b)(1) of this section, is
increased by 3 percent to obtain the projected average monthly dwelling
rental charge per unit of the IHA for the Requested Budget Year, except
that for the shorter of Federal Fiscal Years 1996 through 1998 or the
period during which HUD has an operating subsidy shortfall, no increase
factor will be used.
* * * * *
Sec. 950.730 [Amended]
6. In Sec. 950.730, paragraph (c)(1)(i) is amended by removing the
phrase, ``up to an additional six years,''.
7. A new Sec. 950.756 is added to read as follows:
Sec. 950.756 Phase-down of subsidy for units approved for demolition.
(a) General. Units that have both been approved by HUD for
demolition and been vacated in FFY 1995 and after will be excluded from
an IHA's determination of Unit Months Available when vacated, but they
will remain eligible for subsidy in the following way:
(1) For the first twelve months beginning with the month that a
unit meets both conditions of being approved for demolition and vacant,
the full AEL will be allowed for the unit.
(2) During the second twelve-month period after meeting both
conditions, 66 percent of the AEL will be allowed for the unit.
(3) During the third twelve-month period after meeting both
conditions, 33 percent of the AEL will be allowed for the unit.
(b) Special case for long-term vacant units. Units that have been
vacant for longer than 12 months when they are approved for demolition
are eligible for funding equal to 20% of the AEL for a 12-month period.
(c) Treatment of units replaced with Section 8 Certificates or
Vouchers. Units that are replaced with Section 8 Certificates or
Vouchers are not subject to the provisions of this section.
(d) Treatment of units replaced with Indian housing units. When
replacement conventional Indian housing units become eligible for
operating subsidy, the demolished unit is no longer eligible for any
funding under this section.
(e) Determination of what units are ``replaced.'' For purposes of
this section, replacements are applied first against units that
otherwise would fall in paragraph (a) of this section; any remaining
replacements should be used to reduce the number of units qualifying
under paragraph (b) of this section.
(f) Treatment of units combined with other units. Units that are
removed from the inventory as a result of being combined with other
units are not considered to be demolished units for this purpose.
(g) Retroactive effect. This section is to be applied retroactively
for units approved for demolition during Federal Fiscal Years 1995 and
1996. IHAs affected by this provision may submit a revised calculation
of operating subsidy eligibility for the subject fiscal year(s).
8. A new Sec. 950.757 is added to read as follows:
Sec. 950.757 Three-year incentive adjustments.
(a) Applicability. For the period of Federal Fiscal Year 1996
through Federal Fiscal Year 1998, the provisions of this section apply
to permit IHAs to retain certain sources of income that would otherwise
be offset by a reduction of subsidy. The combined amount retained in
accordance with the provisions of this section may not exceed the
amount of the PFS subsidy shortfall applicable to an IHA in the subject
fiscal year.
(b) Increases in earned income. IHAs are permitted to retain any
increase in dwelling rental income realized after April 1, 1996 as a
result of increased resident earned income, where the governing body of
the IHA has certified that the IHA is making significant efforts to
increase the earned income of existing residents by adopting the
optional earned income exclusion and not just taking actions regarding
new admissions. To implement this paragraph (b), the IHA will compare
the rental income per occupied unit from earned income from April 1,
1996 to the
[[Page 51183]]
rental income per occupied unit from earned income on the date of the
rent roll used for PFS calculation. If an IHA does not have the April
1, 1996 data available, HUD may approve the use of data from a later
month.
(c) Increases in other income. IHAs are permitted to retain any
increase in ``other income'' based on using the definition provided in
this section, as compared with using the definition found in
Sec. 950.102. For purposes of this section, the amount of ``other
income'' is limited to the following three sources:
(1) Excess Utilities: charges to tenants for excess utility
consumption for IHA-supplied utilities.
(2) Nondwelling Rental Income: Rent billed to lessees of dwelling
units rented for nondwelling purposes. Rent billed to lessees of
nondwelling facilities will not be included except for rent billed to
other HUD programs (e.g.; Section 8, congregate housing, family
investment centers).
(3) Other Income: Only charges to other HUD programs (e.g.; Section
8, congregate housing, family investment centers) for use of community
space, central office management and maintenance space will be taken
into consideration. IHAs will calculate the amount of ``other income''
to be retained in a manner prescribed by HUD.
PART 990--ANNUAL CONTRIBUTIONS FOR OPERATING SUBSIDY
9. The authority citation for part 990 continues to read as
follows:
Authority: 42 U.S.C. 1437(g) and 3535(g).
10. In Sec. 990.104, a new paragraph (c) is added, to read as
follows:
Sec. 990.104 Determination of amount of operating subsidy under PFS.
* * * * *
(c) A special phase-down of subsidy to HAs is applicable when
demolition of units is approved by HUD in Federal Fiscal Year 1995 and
later. See Sec. 990.114.
Sec. 990.107 [Amended]
11. In Sec. 990.107, paragraph (b)(2) is amended by removing the
phrase ``for an additional period not to exceed six years''.
12. In Sec. 990.108, paragraph (d) is amended by redesignating the
text as paragraph (d)(1), and by adding a new paragraph (d)(2), to read
as follows:
Sec. 990.108 Other costs.
* * * * *
(d) * * *
(2) An exception to paragraph (d)(1) of this section is made when
an HA combines two efficiency units into a one-bedroom unit. In these
cases, the AEL for the requested year shall be multiplied by the number
of unit months not included in the requested year's unit months
available as a result of these combinations that have occurred since
the Base Year.
* * * * *
13. In Sec. 990.109, paragraph (b) is amended by redesignating
paragraph (b)(1) as paragraph (b)(1)(i), by adding a new paragraph
(b)(1)(ii), and by revising paragraph (b)(2), to read as follows:
Sec. 990.109 Projected operating income level.
* * * * *
(b) * * *
(1) * * *
(ii) The Rent Roll used for calculating the projected operating
income level will not reflect decreases resulting from the HA's
implementation of an optional earned income exclusion authorized by the
definition of ``annual income'' in 24 CFR 913.106(d). But see
Sec. 990.116 for the earned income incentive adjustment.
(2) Three percent increase. The average monthly dwelling rental
charge per unit, computed under paragraph (b)(1) of this section, is
increased by 3 percent to obtain the projected average monthly dwelling
rental charge per unit of the HA for the Requested Budget Year, except
that for the shorter of Federal Fiscal Years 1996 through 1998 or the
period during which HUD has an operating subsidy shortfall, no increase
factor will be used.
* * * * *
Sec. 990.110 [Amended]
14. In Sec. 990.110, paragraph (c)(1) is amended by removing the
phrase, ``up to an additional six years,''.
15. A new Sec. 990.114 is added to read as follows:
Sec. 990.114 Phase-down of subsidy for units approved for demolition.
(a) General. Units that have both been approved by HUD for
demolition and been vacated in FFY 1995 and after will be excluded from
an HA's determination of Unit Months Available when vacated, but they
will remain eligible for subsidy in the following way:
(1) For the first twelve months beginning with the month that a
unit meets both conditions of being approved for demolition and vacant,
the full AEL will be allowed for the unit.
(2) During the second twelve-month period after meeting both
conditions, 66 percent of the AEL will be allowed for the unit.
(3) During the third twelve-month period after meeting both
conditions, 33 percent of the AEL will be allowed for the unit.
(b) Special case for long-term vacant units. Units that have been
vacant for longer than 12 months when they are approved for demolition
are eligible for funding equal to 20% of the AEL for a 12-month period.
(c) Treatment of units replaced with Section 8 Certificates or
Vouchers. Units that are replaced with Section 8 Certificates or
Vouchers are not subject to the provisions of this section.
(d) Treatment of units replaced with public housing units. When
replacement conventional public housing units become eligible for
operating subsidy, the demolished unit is no longer eligible for any
funding under this section.
(e) Determination of what units are ``replaced.'' For purposes of
this section, replacements are applied first against units that
otherwise would fall in paragraph (a) of this section; any remaining
replacements should be used to reduce the number of units qualifying
under paragraph (b) of this section.
(f) Treatment of units combined with other units. Units that are
removed from the inventory as a result of being combined with other
units are not considered to be demolished units for this purpose.
(g) Retroactive effect. This section is to be applied retroactively
for units approved for demolition during Federal Fiscal Years 1995 and
1996. HAs affected by this provision may submit a revised calculation
of operating subsidy eligibility for the subject fiscal year(s).
16. A new Sec. 990.116 is added to read as follows:
Sec. 990.116 Three-year incentive adjustments.
(a) Applicability. For the period of Federal Fiscal Year 1996
through Federal Fiscal Year 1998, the provisions of this section apply
to permit HAs to retain certain sources of income that would otherwise
be offset by a reduction of subsidy. The combined amount retained in
accordance with the provisions of this section may not exceed the
amount of the PFS subsidy shortfall applicable to an HA in the subject
fiscal year.
(b) Increases in earned income. HAs are permitted to retain any
increase in dwelling rental income realized after April 1, 1996 as a
result of increased resident earned income, where the Board of
Commissioners of the HA has certified that the HA is making significant
efforts to increase the earned income of existing residents by adopting
the optional earned income exclusion and not just taking actions
regarding new admissions. To implement this
[[Page 51184]]
paragraph (b), the HA will compare the rental income per occupied unit
resulting from earned income from April 1, 1996 to the rental income
per occupied unit resulting from earned income on the date of the rent
roll used for PFS calculation. If an HA does not have the April 1, 1996
data available, HUD may approve the use of data from a later month.
(c) Increases in other income. HAs are permitted to retain any
increase in ``other income'' based on using the definition provided in
this section, as compared with using the definition found in
Sec. 990.102. For purposes of this section, the amount of ``other
income'' is limited to the following three sources:
(1) Excess Utilities: charges to tenants for excess utility
consumption for HA supplied utilities.
(2) Nondwelling Rental Income: rent billed to lessees of dwelling
units rented for nondwelling purposes. Rent billed to lessees of
nondwelling facilities will not be included except for rent billed to
other HUD programs (e.g.; Section 8, congregate housing, family
investment centers).
(3) Other Income: Only charges to other HUD programs (e.g.; Section
8, congregate housing, family investment centers) for use of community
space, central office management and maintenance space will be taken
into consideration. HAs will calculate the amount of ``other income''
to be retained in a manner prescribed by HUD.
Dated: July 29, 1996.
Christopher Hornig,
Acting Assistant Secretary for Public and Indian Housing.
[FR Doc. 96-24874 Filed 9-27-96; 8:45 am]
BILLING CODE 4210-33-P
Complete official Federal Register PDF
FR Doc. 96-24873 Office of the Assistant Secretary for Community Planning and Development; Supportive Housing Program; Streamlining
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 51174-51176]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24873]
[[Page 51173]]
_______________________________________________________________________
Part IV
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Part 583
Supportive Housing Program: Streamlining; Final Rule
Federal Register / Vol. 61, No. 190 / Monday, September 30, 1996 /
Rules and Regulations
[[Page 51174]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 583
RIN 2506-AB85
[Docket No. FR-4089-F-01]
Office of the Assistant Secretary for Community Planning and
Development; Supportive Housing Program; Streamlining
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule amends HUD's regulations for the Supportive
Housing Program. In an effort to comply with the President's regulatory
reform initiatives, this rule will streamline the Supportive Housing
regulations by eliminating provisions that are redundant of statutes or
are otherwise unnecessary. This final rule will make the Supportive
Housing regulations clearer and more concise.
EFFECTIVE DATE: October 30, 1996.
FOR FURTHER INFORMATION CONTACT: Maggie H. Taylor, Director, Office of
Special Needs Assistance Programs, Department of Housing and Urban
Development, 451 7th Street, SW, Washington, DC 20410; telephone (202)
708-4300 (this is not a toll-free number). Hearing- or speech-impaired
persons may access this number via TTY by calling the Federal
Information Relay Service at (800) 877-8339.
SUPPLEMENTARY INFORMATION: 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 conducted a
page-by-page review of its regulations to determine which can be
eliminated, consolidated, or otherwise improved. The regulations in 24
CFR part 583 implement the Department's Supportive Housing Program,
which provides assistance for housing and supportive services for
homeless persons, as authorized by title IV, subtitle C of the Stewart
B. McKinney Homeless Assistance Act of 1987, as amended (the McKinney
Act) (42 U.S.C. 11381-11389). In developing the regulations for the
Supportive Housing Program, the Department has always attempted to
codify only those requirements that are necessary to the proper
administration of the program, and to allow the recipients the
flexibility to carry out projects that benefit homeless persons (see,
e.g., the preamble to the Supportive Housing final rule, published on
July 19, 1994 (59 FR 36886)). However, the Department has determined
that it can further improve and streamline the regulations for the
Supportive Housing Program by eliminating unnecessary provisions.
For example, many of the provisions in part 583 come directly from
the McKinney Act. It is unnecessary to maintain statutory requirements
in the Code of Federal Regulations (CFR), since those requirements are
otherwise fully accessible and binding. Furthermore, if regulations
contain statutory language, HUD must amend the regulations whenever
Congress amends the statute. Therefore, this final rule will remove
repetitious statutory language and replace it with a citation to the
specific statutory section for easy reference.
This final rule will make the following specific amendments to part
583:
(1) Amend the first sentence of Sec. 583.1 regarding the
authorizing statute--the Stewart B. McKinney Homeless Assistance Act--
in order to facilitate references to the statute throughout the
regulations;
(2) Replace many of the definitions in Sec. 583.5 that are
redundant of the statute with references to the pertinent statutory
sections. For the definition of ``Operating costs'', this rule will
also amend Secs. 583.125 and 583.135 to include regulatory guidance
that is not redundant of the statute. This rule also updates Sec. 583.5
to refer to the consolidated plan, rather than the Comprehensive
Housing Affordability Strategy, according to HUD's Consolidated Plan
final rule, published on January 5, 1995 (60 FR 1878);
(3) Remove the provision regarding the rating criteria for
applications in Sec. 583.200(b). This information is repetitive of the
statute, and can more appropriately be provided in the annual notice of
funding availability (NOFA);
(4) Streamline the language in Sec. 583.230 regarding environmental
review. The substance of this language is redundant of the
environmental review regulations in 24 CFR parts 50 and 58;
(5) Replace language from Sec. 583.300(f) regarding the
participation of homeless individuals that is redundant of the statute
with a reference to the statutory section;
(6) Replace much of Sec. 583.305, which is redundant of the
statute, with statutory references;
(7) Remove the nondiscrimination requirements in
Sec. 583.325(b)(2). The Department issued a final rule on February 9,
1996 (61 FR 5198) creating a new 24 CFR part 5, subpart A of which
contains certain definitions, Federal requirements, and a waiver
provision that are generally applicable to all HUD programs. The
February 9, 1996 final rule removed the duplicative nondiscrimination
requirements that were in Sec. 583.325(b)(1); this final rule will
remove the duplicative requirements from paragraph (b)(2) of that
section;
(8) Remove the outdated reference to the Comprehensive Housing
Affordability Strategy (CHAS) in Sec. 583.405(a)(1), and replace it
with a reference to the consolidated plan, in accordance with the
Consolidated Plan final rule published on January 5, 1995 (60 FR 1878).
This rule will result in the elimination of approximately four
pages of unnecessary regulations.
Justification for Final Rulemaking
The Department generally publishes a rule for public comment before
issuing a rule for effect, in accordance with its 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). The Department
finds that good cause exists to publish this rule for effect without
first soliciting public comment. This rule primarily removes
unnecessary regulatory provisions and does not establish or affect
substantive policy. Therefore, prior public comment is unnecessary.
Findings and Certifications
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 primarily
streamlines the Supportive Housing regulations by removing unnecessary
provisions. The rule will have no adverse or disproportionate economic
impact on small businesses.
Environmental Impact
This rule does not have an environmental impact. This rule simply
amends existing regulations by consolidating and streamlining
provisions; it does not alter the environmental effect of the
regulations being amended. As the Department
[[Page 51175]]
developed the regulations in part 583, Findings of No Significant
Impact with respect to the environment were made in accordance with
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). Those
findings remain applicable to this rule, and are 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.
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 the Department's policies or programs
will result from promulgation of this rule.
List of Subjects in 24 CFR Part 583
Homeless, Rent subsidies, Reporting and recordkeeping requirements,
Supportive housing programs--housing and community development,
Supportive services.
PART 583--SUPPORTIVE HOUSING PROGRAM
Accordingly, for the reasons set forth in the preamble, 24 CFR part
583 is amended as follows:
1. The authority citation for 24 CFR part 583 continues to read as
follows:
Authority: 42 U.S.C. 3535(d) and 11389.
2. In Sec. 583.1, paragraph (a) is amended by revising the first
sentence to read as follows:
Sec. 583.1 Purpose and scope.
(a) General. The Supportive Housing Program is authorized by title
IV of the Stewart B. McKinney Homeless Assistance Act (the McKinney
Act) (42 U.S.C. 11381-11389). * * *
* * * * *
3. Section 583.5 is revised to read as follows:
Sec. 583.5 Definitions.
As used in this part:
Applicant is defined in section 422(1) of the McKinney Act (42
U.S.C. 11382(1)). For purposes of this definition, governmental
entities include those that have general governmental powers (such as a
city or county), as well as those that have limited or special powers
(such as public housing agencies).
Consolidated plan means the plan that a jurisdiction prepares and
submits to HUD in accordance with 24 CFR part 91.
Date of initial occupancy means the date that the supportive
housing is initially occupied by a homeless person for whom HUD
provides assistance under this part. If the assistance is for an
existing homeless facility, the ``date of initial occupancy'' is the
date that services are first provided to the residents of supportive
housing with funding under this part.
Date of initial service provision means the date that supportive
services are initially provided with funds under this part to homeless
persons who do not reside in supportive housing. This definition
applies only to projects funded under this part that do not provide
supportive housing.
Disability is defined in section 422(2) of the McKinney Act (42
U.S.C. 11382(2)).
Homeless person means an individual or family that is described in
section 103 of the McKinney Act (42 U.S.C. 11302).
Metropolitan city is defined in section 102(a)(4) of the Housing
and Community Development Act of 1974 (42 U.S.C. 5302(a)(4)). In
general, metropolitan cities are those cities that are eligible for an
entitlement grant under 24 CFR part 570, subpart D.
New construction means the building of a structure where none
existed or an addition to an existing structure that increases the
floor area by more than 100 percent.
Operating costs is defined in section 422(5) of the McKinney Act
(42 U.S.C. 11382(5)).
Outpatient health services is defined in section 422(6) of the
McKinney Act (42 U.S.C. 11382(6)).
Permanent housing for homeless persons with disabilities is defined
in section 424(c) of the McKinney Act (42 U.S.C. 11384(c)).
Private nonprofit organization is defined in section 422(7) (A),
(B), and (D) of the McKinney Act (42 U.S.C. 11382(7) (A), (B), and
(D)). The organization must also have a functioning accounting system
that is operated in accordance with generally accepted accounting
principles, or designate an entity that will maintain a functioning
accounting system for the organization in accordance with generally
accepted accounting principles.
Project is defined in sections 422(8) and 424(d) of the McKinney
Act (42 U.S.C. 11382(8), 11384(d)).
Recipient is defined in section 422(9) of the McKinney Act (42
U.S.C. 11382(9)).
Rehabilitation means the improvement or repair of an existing
structure or an addition to an existing structure that does not
increase the floor area by more than 100 percent. Rehabilitation does
not include minor or routine repairs.
State is defined in section 422(11) of the McKinney Act (42 U.S.C.
11382(11)).
Supportive housing is defined in section 424(a) of the McKinney Act
(42 U.S.C. 11384(a)).
Supportive services is defined in section 425 of the McKinney Act
(42 U.S.C. 11385).
Transitional housing is defined in section 424(b) of the McKinney
Act (42 U.S.C. 11384(b)). See also Sec. 583.300(j).
Tribe is defined in section 102 of the Housing and Community
Development Act of 1974 (42 U.S.C. 5302).
Urban county is defined in section 102(a)(6) of the Housing and
Community Development Act of 1974 (42 U.S.C. 5302(a)(6)). In general,
urban counties are those counties that are eligible for an entitlement
grant under 24 CFR part 570, subpart D.
4. Section 583.125 is amended by revising paragraph (b) to read as
follows:
Sec. 583.125 Grants for operating costs.
* * * * *
(b) Operating costs. Operating costs are those associated with the
day-to-day operation of the supportive housing. They also include the
actual expenses that a recipient incurs for conducting on-going
assessments of the supportive services needed by residents and the
availability of such services; relocation assistance under
Sec. 583.310, including payments and services; and insurance.
* * * * *
5. Section 583.135 is amended by revising paragraph (b) to read as
follows:
Sec. 583.135 Administrative costs.
* * * * *
[[Page 51176]]
(b) Administrative costs. Administrative costs include the costs
associated with accounting for the use of grant funds, preparing
reports for submission to HUD, obtaining program audits, similar costs
related to administering the grant after the award, and staff salaries
associated with these administrative costs. They do not include the
costs of carrying out eligible activities under Secs. 583.105 through
583.125.
6. Section 583.200 is revised to read as follows:
Sec. 583.200 Application and grant award.
When funds are made available for assistance, HUD will publish a
notice of funding availability (NOFA) in the Federal Register, in
accordance with the requirements of 24 CFR part 4. HUD will review and
screen applications in accordance with the requirements in section 426
of the McKinney Act (42 U.S.C. 11386) and the guidelines, rating
criteria, and procedures published in the NOFA.
7. Section 583.230 is revised to read as follows:
Sec. 583.230 Environmental review.
(a) Generally. Project selection is subject to completion of an
environmental review of the proposed site, and the project may be
modified or the site rejected as a result of that review. The
environmental effects must be assessed in accordance with the
provisions of the National Environmental Policy Act of 1969 (42 U.S.C.
4320) (NEPA) and the related environmental laws and authorities listed
in HUD's implementing regulations at 24 CFR parts 50 or 58, depending
on who is responsible for environmental review.
(b) Environmental review by HUD. HUD will perform an environmental
review, in accordance with part 50 of this title, before approval of
conditionally selected applications received directly from private
nonprofit organizations and governmental entities with special or
limited purpose powers. Any application subject to environmental review
by HUD that requires an Environmental Impact Statement (EIS) in
accordance with the procedures in 24 CFR part 50, subpart E, will not
be eligible for assistance under this part.
(c) Environmental review by applicants. Applicants that are States,
metropolitan cities, urban counties, tribes, or other governmental
entities with general purpose powers must assume responsibility for
environmental review, decisionmaking, and action for each application
for assistance in accordance with part 58 of this title. These
applicants must include in their applications an assurance that they
will assume all the environmental review responsibility that would
otherwise be performed by HUD as the responsible Federal official under
NEPA and related authorities listed in 24 CFR part 58. The grant award
is subject to completion of the environmental responsibilities set out
in 24 CFR part 58 within a reasonable time period after notification of
the award. Applicants may, however, enclose an environmental
certification and Request for Release of Funds with their applications.
8. Section 583.300 is amended by revising paragraph (f) to read as
follows:
Sec. 583.300 General operation.
* * * * *
(f) Participation of homeless persons. (1) Each recipient must
provide for the participation of homeless persons as required in
section 426(g) of the McKinney Act (42 U.S.C. 11386(g)). This
requirement is waived if an applicant is unable to meet it and presents
a plan for HUD approval to otherwise consult with homeless or formerly
homeless persons in considering and making policies and decisions. See
also Sec. 583.330(e).
(2) Each recipient of assistance under this part must, to the
maximum extent practicable, involve homeless individuals and families,
through employment, volunteer services, or otherwise, in constructing,
rehabilitating, maintaining, and operating the project and in providing
supportive services for the project.
* * * * *
9. Section 583.305 is revised to read as follows:
Sec. 583.305 Term of commitment; repayment of grants; prevention of
undue benefits.
(a) Term of commitment and conversion. Recipients must agree to
operate the housing or provide supportive services in accordance with
this part and with sections 423 (b)(1) and (b)(3) of the McKinney Act
(42 U.S.C. 11383(b)(1), 11383(b)(3)).
(b) Repayment of grant and prevention of undue benefits. In
accordance with section 423(c) of the McKinney Act (42 U.S.C.
11383(c)), HUD will require recipients to repay the grant unless HUD
has authorized conversion of the project under section 423(b)(3) of the
McKinney Act (42 U.S.C. 11383(b)(3)).
10. Section 583.325 is amended by revising paragraph (b) to read as
follows:
Sec. 583.325 Nondiscrimination and equal opportunity requirements.
* * * * *
(b) Nondiscrimination and equal opportunity requirements. The
nondiscrimination and equal opportunity requirements set forth at part
5 of this title apply to this program. The Indian Civil Rights Act (25
U.S.C. 1301 et seq.) applies to tribes when they exercise their powers
of self-government, and to Indian housing authorities (IHAs) when
established by the exercise of such powers. When an IHA is established
under State law, the applicability of the Indian Civil Rights Act will
be determined on a case-by-case basis. Projects subject to the Indian
Civil Rights Act must be developed and operated in compliance with its
provisions and all implementing HUD requirements, instead of title VI
and the Fair Housing Act and their implementing regulations.
* * * * *
Sec. 583.405 [Amended]
11. In Sec. 583.405, paragraph (a)(1) is amended by removing the
term ``CHAS'', and by adding in its place the term ``consolidated
plan''.
Dated: September 23, 1996.
Andrew M. Cuomo,
Assistant Secretary for Community Planning and Development.
[FR Doc. 96-24873 Filed 9-27-96; 8:45 am]
BILLING CODE 4210-29-P
Complete official Federal Register PDF
FR Doc. 96-24866 Radio Broadcasting Services; Shell Knob, MO
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 51029-51030]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24866]
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 73
[MM Docket No. 96-138; RM-8822]
Radio Broadcasting Services; Shell Knob, MO
AGENCY: Federal Communications Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This document allots Channel 249A to Shell Knob, Missouri, in
response to a petition filed by Galen Gilbert. See 61 FR 34407, July 2,
1996. The coordinates for Channel 249A at Shell Knob are 36-45-04 and
93-40-03. There is a site restriction 13.6 kilometers (8.4 miles) north
of the community.
DATES: Effective November 4, 1996. The window period for filing
applications for Channel 249A at Shell Knob, Missouri, will open on
November 4, 1996, and close on December 5, 1996.
FOR FURTHER INFORMATION CONTACT: Kathleen Scheuerle, Mass Media Bureau,
(202) 418-2180.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order, MM Docket No. 96-138, adopted September 13, 1996, and
released September 20, 1996. The full text of this Commission decision
is available for inspection and copying during normal business hours in
the Commission's Reference Center (Room 239), 1919 M Street, NW.,
Washington, DC. The complete text of this decision may also be
purchased from the Commission's copy contractors, International
Transcription Services, Inc., 2100 M Street, NW., Suite 140,
Washington, DC 20037, (202) 857-3800.
List of Subjects in 47 CFR Part 73
Radio broadcasting.
Part 73 of title 47 of the Code of Federal Regulations is amended
as follows:
PART 73--[AMENDED]
1. The authority citation for part 73 continues to read as follows:
Authority: Secs. 303, 48 Stat., as amended, 1082; 47 U.S.C. 154,
as amended.
Sec. 73.202 [Amended]
2. Section 73.202(b), the Table of FM Allotments under Missouri, is
amended by adding Shell Knob, Channel 249A.
[[Page 51030]]
Federal Communications Commission.
John A. Karousos,
Chief, Allocations Branch, Policy and Rules Division, Mass Media
Bureau.
[FR Doc. 96-24866 Filed 9-27-96; 8:45 am]
BILLING CODE 6712-01-F
Complete official Federal Register PDF
FR Doc. 96-24854 National Oil and Hazardous Substances Pollution Contingency Plan; National Priorities List Update
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Page 51019]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24854]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 300
[FRL 5616-2]
National Oil and Hazardous Substances Pollution Contingency Plan;
National Priorities List Update
AGENCY: Environmental Protection Agency.
ACTION: Notice of deletion of the Hanford 1100-Area (USDOE) from the
National Priorities List.
-----------------------------------------------------------------------
SUMMARY: The Environmental Protection Agency (EPA) Region 10 announces
the deletion of the Hanford 1100-Area (USDOE), located in Benton
County, Washington, from the National Priorities List (NPL). The NPL is
Appendix B to 40 CFR Part 300 which is the National Oil and Hazardous
Substances Pollution Contingency Plan (NCP), which EPA promulgated
pursuant to Section 105 of the Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA) of 1980, as amended. EPA and
the State of Washington have determined that the Site poses no
significant threat to public health or the environment; and, therefore,
further remedial measures pursuant to CERCLA are not appropriate.
EFFECTIVE DATE: September 30, 1996.
FOR FURTHER INFORMATION CONTACT: Dave Einan, U.S. EPA Region 10, 712
Swift Boulevard, Suite 5, Richland, Washington 99352, (509) 376-3883.
SUPPLEMENTARY INFORMATION: The site to be deleted from the NPL is the
Hanford 1100-Area (USDOE), which is located near the City of Richland
in Benton County, Washington.
A Notice of Intent to Delete for this site was published on August
15, 1996 (61 FR 42402). The closing date for comments on the Notice of
Intent to Delete was September 16, 1996. EPA received no comments.
EPA identifies sites on the NPL that appear to present a
significant risk to human health or the environment. As described in
Section 300.425(e)(3) of the NCP, sites deleted from the NPL remain
eligible for remedial actions in the unlikely event that conditions at
the site warrant such action. Deletion of the Site from the NPL does
not itself create, alter, or revoke any individual rights or
obligations.
List of Subjects in 40 CFR Part 300
Environmental protection, Air pollution control, Chemicals,
Hazardous substances, Hazardous waste, Intergovernmental relations,
Penalties, Reporting and recordkeeping requirements, Superfund, Water
pollution control, Water supply.
Dated: September 19, 1996.
Charles E. Findley,
Acting Regional Administrator, Region 10.
For the reasons set out in the preamble, 40 CFR part 300 is amended
as follows:
PART 300--[AMENDED]
1. The authority citation for part 300 continues to read as
follows:
Authority: 33 U.S.C. 1321(c)(2); 42 U.S.C. 9601-9657; E.O.
12777, 56 FR 54757, 3 CFR 1991 Comp., p. 351; E.O. 12580, 52 FR
2923, 3 CFR, 1987 Comp., p. 193.
Appendix B--[Amended]
2. Table 2 of appendix B to part 300 is amended by removing the
site Hanford 1100-Area (USDOE), Benton County, Washington.
[FR Doc. 96-24854 Filed 9-27-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-24853 National Oil and Hazardous Substances Pollution Contingency Plan; National Priorities List
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 51019-51020]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24853]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 300
[FRL 5616-3]
National Oil and Hazardous Substances Pollution Contingency Plan;
National Priorities List
AGENCY: Environmental Protection Agency.
ACTION: Notice of deletion of the ALCOA (Vancouver Smelter) site from
the National Priorities List.
-----------------------------------------------------------------------
SUMMARY: The Environmental Protection Agency (EPA) Region 10 announces
the deletion of the ALCOA (Vancouver Smelter) NPL Site, located in
Vancouver (Clark County), Washington from the National Priorities List
(NPL). The NPL is Appendix B of 40 CFR Part 300 which is the National
Oil and Hazardous Substances Pollution Contingency Plan (NCP), which
EPA promulgated pursuant to section 105 of the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA) of
1980, as amended. EPA and the State of Washington Department of Ecology
(Ecology) have determined that the Site poses no significant threat to
public health or the environment and, therefore, further
[[Page 51020]]
remedial measures pursuant to CERCLA is not appropriate.
EFFECTIVE DATE: September 30, 1996.
FOR FURTHER INFORMATION CONTACT: Lynda Priddy, Environmental Protection
Agency, 1200 Sixth Avenue, Mail Stop ECL-113, Seattle, Washington
98101.
SUPPLEMENTARY INFORMATION: The site to be deleted from the NPL is:
ALCOA (Vancouver Smelter) Site, located in Vancouver (Clark County),
Washington.
A Notice of Intent to Delete for this site was published August 15,
1996 (61 FR 42404). The closing date for comments on the Notice of
Intent to Delete was September 16, 1996. EPA received no comments.
EPA identifies sites which appear to present a significant risk to
public health, welfare, or the environment and it maintains the NPL as
the list of these sites. Sites on the NPL may be the subject of
Hazardous Substance Response Trust Fund-financed remedial actions. Any
site deleted from the NPL remains eligible for Fund-financed remedial
actions in the unlikely event that conditions at the site warrant such
action. Section 300.425 of the NCP states that Fund-financed actions
may be taken at sites deleted from the NPL. Deletion of a site from the
NPL does not affect responsible party liability or impede Agency
efforts to recover costs associated with response efforts.
List of Subjects in 40 CFR Part 300
Environmental protection, Air pollution control, Chemicals,
Hazardous substances, Hazardous waste, Intergovernmental relations,
Penalties, Reporting and record keeping requirements, Superfund, Water
pollution control, and Water supply.
Dated: September 20, 1996.
Chuck Clarke,
Regional Administrator, Region 10.
For the reasons set out in the preamble, 40 CFR part 300 is amended
as follows:
PART 300--[AMENDED]
1. The authority citation for part 300 continues to read as
follows:
Authority: 33 U.S.C. 1321(c)(2); 42 U.S.C. 9601-9657; E.O.
12777, 56 FR 54757, 3 CFR 1991 Comp., p. 351; E.O. 12580, 52 FR
2923, 3 CFR, 1987 Comp., p. 193.
Appendix B [Amended]
2. Table 1 of Appendix B to part 300 is amended by removing the
site ALCOA (Vancouver Smelter), Vancouver, Washington.
[FR Doc. 96-24853 Filed 9-27-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-24839 Defense Federal Acquisition Regulation Supplement; Contract Reporting for Fiscal Year 1997
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 51030-51043]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24839]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
48 CFR Parts 204 and 253
[DFARS Case 96-D315]
Defense Federal Acquisition Regulation Supplement; Contract
Reporting for Fiscal Year 1997
AGENCY: Department of Defense (DoD).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Director of Defense Procurement is amending the Defense
Federal Acquisition Regulation Supplement (DFARS) to revise DD Form 350
and DD Form 1057 contract action reporting requirements to comply with
the Federal Acquisition Streamlining Act of 1994 (Pub. L. 103-355) and
to enhance data collection procedures.
EFFECTIVE DATE: October 1, 1996.
FOR FURTHER INFORMATION CONTACT: Defense Acquisition Regulations
Council, Attn: Mr. Michael Mutty, (703) 602-0131, PDUSD (A&T) DP (DAR),
IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062. Telefax
number (703) 602-0350. Please cite DFARS Case 96-D315 in all
correspondence related to this case.
SUPPLEMENTARY INFORMATION:
A. Background
This final rule makes changes to the internal Department of Defense
(DoD) contract data reporting system to enable reporting of data
required by the Federal Acquisition Streamlining Act of 1994 (the Act).
The Act, in part, requires DoD to report statistics on indefinite
delivery type contracts, commercial financing procedures, and synopsis
and solicitation procedures associated with commercial items. This
final rule also revises DD Form 350 and DD Form 1057 to enhance the
reporting system by identifying the agency that originated/assigned the
contract number and by more precisely describing the kind of
contracting action being reported.
B. Regulatory Flexibility Act
The final rule does not constitute a significant revision within
the meaning of FAR 1.501 and Public Law 98-577 and publication for
public comment is not required. However, comments from small entities
concerning the affected DFARS subparts will be considered in accordance
with 5 U.S.C. 610.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the final rule
does not impose any reporting of recordkeeping requirements that
require Office of Management and Budget approval under 44 U.S.C. 3501,
et seq.
List of Subjects in 48 CFR Parts 204 and 253
Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.
Therefore, 48 CFR Parts 204 and 253 are amended as follows:
1. The authority citations for 48 CFR Parts 204 and 253 continue to
read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 204--ADMINISTRATIVE MATTERS
2. Section 204.670-1 is amended by revising paragraph (c) to read
as follows:
204.670-1 Definitions.
* * * * *
(c) Departmental data collection points are--
(1) For the Army (including Corps of Engineers civil Works): U.S. Army
Contracting Support Agency, Attn: SFAE-CSA-PPS, 5109 Leesburg Pike,
Suite 916, Falls Church, VA 22041-3201
(2) For the Navy: Fleet Industrial Supply Center, Norfolk Detachment
Washington, Attn: PMRS, Washington Navy Yard, Bldg. 200, 4th
Floor, 800 M Street, SW, Washington, DC 20374-2004
(3) For the Air Force: SAF/AQCI, 1060 Air Force Pentagon, Washington,
DC 20330-1060
(4) For the Defense Logistics Agency: Headquarters, Defense Logistics
Agency, 8725 John J. Kingman Road, Suite 3147, Attn: Directorate of
Procurement (Acquisition Operations Team, Ft. Belvoir, VA 22060-6221
(5) For other DoD contracting activities: U.S. Army Contracting Support
Agency, Attn: SFAE-CSA-PPS, 5109 Leesburg Pike, Suite 916, Falls
Church, VA 22041-3201.
* * * * *
3. Section 204.670-2 is amended by revising the introductory text
of paragraph (d) and paragraphs (d)(1) and (d)(7)(iii) to read as
follows:
204.670-2 Reportable contracting actions.
* * * * *
(d) The following contracting actions shall not be reported on
either the DD Form 350 or DD Form 1057:
(1) Imprest fund transactions, SF 44 purchases, and micro-purchases
obtained through use of the purchase card;
* * * * *
(7) * * *
(iii) Defense Supply Center, Richmond, for petroleum products.
4. Section 204.670-3 is amended by revising paragraph (a)(1), the
introductory text of paragraph (a)(2), paragraph (a)(5), the last
sentence of paragraph (b)(1), and paragraph (b)(2) to read as follows:
204.670-3 Contracting office responsibilities.
(a) * * *
(1) Prepare the appropriate type of DD Form 350 (see 204.670-6), in
accordance with the instructions in 253.204-70, on all reportable
contracting actions (see 204.670-2(a)), including actions accomplished
by contract administration offices on behalf of the contracting office.
(2) Complete the DD Form 350 in the required format within three
working days after the date on which the dollars were actually
obligated or deobligated (see 204.670-7). Submit all contracting
actions for the calendar month to the departmental data collection
point (see 204.670-1(c)) in accordance with departmental/agency
procedures, except--
* * * * *
(5) Maintain a copy of the DD Form 350 in the contract file, in
accordance with departmental/agency procedures.
(b) * * *
(1) * * * Each contracting office with a separate code must submit
its own DD Form 1057.
(2) Complete the DD Form 1057 in the required format within three
working days after the cutoff of the reporting month (see 204.670-7 for
alternate formats). Contracting offices are authorized to cut off the
reporting month no earlier than the 25th calendar day. For September
only, the cutoff date shall not be later than September 30. Submit the
DD Form 1057 to the departmental data collection point in accordance
with departmental/agency procedures.
* * * * *
5. Section 204.670-5 is revised to read as follows:
204.670-5 Departmental data collection point responsibilities.
Departmental data collection points--
[[Page 51031]]
(a) Collect DD Forms 350 and 1057 data provided by their
contracting activities;
(b) Electronically record the data in accordance with the
instructions for recording and editing developed by WHS-DIOR with the
majority agreement of the departments/agencies and prescribed by the
Director of Defense Procurement; and
(c) Submit monthly reports (noncumulative) to Washington
Headquarters Services, ATTN: DIOR, within 18 days after the close of
the reporting period, except the due date for September may be extended
for no more than ten days. Reports control symbols, DD-P&L(M) 1014 and
DD-P&L(M) 1015, respectively, apply to reports submitted to WHS-DIOR
for DD Form 350 actions and DD Form 1057.
6. Section 204.670-6 is amended by revising the section title and
paragraphs (b)(1)(iii), (b)(1)(iv), (b)(1)(v), (b)(2), and (c)(1) to
read as follows:
204.670-6 Types of DD Form 350 reports.
* * * * *
(b) * * *
(1) * * *
(iii) Defense Fuel Supply Center of Defense Supply Center,
Richmond, indefinite delivery contracts for petroleum or petroleum
supplies. The Centers, at the time of award, report the estimated value
of the orders to be placed against the contract on one DD Form 350.
(iv) Order place by the Defense commissary Agency (DeCA) for resale
items in excess of $25,000. DeCA consolidates the orders monthly and
reports the cumulative dollar amounts and actions on one DD Form 350 in
accordance with departmental/agency procedures. Defense Logistics
Agency activities submit single rather than consolidated reports.
(v) Vouchers processed by the U.S. Army Contracting Command, Europe
(USACCE), for the purchase of utilities from municipalities (e.g., gas,
electricity, water, sewage, steam, snow removal, and garbage
collection). USACCE consolidates these transactions monthly and reports
the cumulative dollar amount on one DD Form 350 in accordance with
departmental/agency procedures.
(2) Consolidated reports may be prepared in accordance with
departmental/agency procedures for orders under communications service
agreements for local dial tone services.
(c) * * *
(1) The contracting action includes foreign military sales (FMS)
requirements in addition to non-FMS requirements (Block B9 on the DD
Form 350). Submit one DD Form 350 report for the FMS requirements and
another DD Form 350 report for the non-FMS requirements, except if
either of the portions in $25,000 or less, report the $25,000 or less
portion on a DD Form 1057 in lieu of a DD Form 350.
* * * * *
7. Section 204.670-8 is revised to read as follows:
204.670-8 Security classification.
Submit DD Forms 350 as unclassified documents. Classified contracts
are not exempt from reporting solely because the contract is
classified. Contact the appropriate departmental data collection points
for special instructions if it is necessary for security reasons to
modify coding of all or any individual blocks on the DD Form 350. If
contact cannot be made for security reasons, obtain instructions from
the Office of the Deputy to the Under Secretary of Defense for Policy
Support, ATTN: Director for Special Programs. Telephone number is (703)
614-0578/9 or DSN 224-0578/9.
8. Section 204.670-9 is amended by revising the section title and
paragraph (b) to read as follows:
204.670-9 Reporting of individual contracting actions of $25,000 or
less.
* * * * *
(b) The following contracting actions are not subject to the
additional DD Form 350 reporting, although they must still be reported
on the DD Form 1057:
(1) Contracting actions of $500 or less.
(2) Foreign military sales.
(3) Orders or modifications under a Federal schedule.
(4) Actions with a government agency.
(5) Actions with non-U.S. business firms.
(6) Actions where the place of performance is other than the United
States and its outlying areas.
9. Section 204.7201 is amended by revising paragraph (b) to read as
follows:
204.7201 Definitions.
* * * * *
(b) Contractor identification code means any code required by the
contracting office for the purpose of identifying the offeror. CAGE
code and contractor identification numbers are two examples of
contractor identification codes.
10. Section 204.7202-1 is amended by revising the second sentence
of paragraph (a) to read as follows:
204.7202-1 CAGE codes.
(a) * * * Their use is prescribed by 253.204-70(b)(5)(ii)(C) and
DoD 4000.25-5-M, Military Standard Contract Administration Procedures
(MILSCAP).
* * * * *
11 Section 204.7202-2 is amended by revising the section title, the
introductory text, paragraph (a), the introductory text of paragraph
(b)(1), and paragraphs (b)(1)(i), (b)(1)(ii), and (b)(2)(vi) to read as
follows:
204.7202-2 Contractor identification number.
Use of the contractor identification number for contract data
reporting is prescribed by 253.204-70(b)(5)(ii)(A). A Data Universal
Numbering System (DUNS) number, which is a nine-digit number assigned
by Dun and Bradstreet Information Services to an establishment, is the
contractor identification number for Federal contractors. When the
contractor identification number is not already available to the
contracting activity, use the following procedures in the order listed:
(a) Contact the offeror and obtain the DUNS number.
(b)(1) Dun & Bradstreet Information Services for a DUNS number by--
(i) Telephone (610) 882-7741.
(ii) Facsimile (610) 882-7140.
* * * * *
(2) * * *
(vi) Total number of DUNS requests, if more than one; and
* * * * *
12. Section 204.7203 is amended by removing paragraph (e) and by
revising paragraphs (a) and (b) to read as follows:
204.7203 Responsibilities of contracting officers.
(a) The contracting officer shall assist the offeror in obtaining
the required contractor code(s).
(b) Prospective offerors may not be denied a solicitation or bid
set because the offeror does not have a contractor code.
* * * * *
204.7204-1 [Amended]
13. Section 204.7204-1 is amended in the first sentence of
paragraph (b) by revising the parenthetical phrase to read ``(see FAR
subpart 42.12)''.
14. Section 204.7204-2 is amended by revising the section title to
read as follows:
204.7204-2 Maintenance of contractor identification number codes.
* * * * *
15. Section 204.7206 is amended by revising the introductory text
to read as follows:
[[Page 51032]]
204.7206 Using CAGE codes to identify agents and brokers.
Authorized agents and brokers are entities and, as such, may be
assigned CAGE codes and contractor identification number codes for
identification and processing purposes.
* * * * *
PART 253--FORMS
16. Section 253.204-70 is revised to read as follows:
253.204-70 DD Form 350, Individual Contracting Action Report.
Policy on use of a DD Form 350 is in 204.670-2. This subsection
253.204-70 contains instructions for completion of Parts A through F of
the DD Form 350. Paragraph (g) of this subsection contains special
instructions for completing a DD Form 350 for an action of $25,000 or
less under the Small Business Competitiveness Demonstration Program.
(a) Part A of the DD Form 350.
Part A identifies the report and the reporting activity. Complete
all four blocks.
(1) BLOCK A1, TYPE OF REPORT.
Enter one of the following codes:
(i) Codes 0--Original.
Enter code 0 unless code 1 or code 2 applies.
(ii) Code 1--Cancelling. A cancelling action cancels an existing DD
Form 350 in accordance with departmental data collection point
instructions.
(iii) Code 2--Correcting.
A correcting action corrects an existing DD Form 350 action in
accordance with departmental data collection point instructions.
(2) BLOCK A2, REPORT NO.
Enter the four-digit local control number (see 204.670-3(a)(4)). If
Block A1 is coded 1 or 2, use the prior report number rather than a new
one.
(3) BLOCK A3, CONTRACTING OFFICE CODE.
Enter the code assigned the contracting office by the departmental
data collection point in 204.670-1(c).
(4) BLOCK A4, NAME OF CONTRACTING OFFICE.
Enter sufficient detail to establish the identity of the
contracting office.
(b) Part B of the DD Form 350.
Part B identifies the transaction.
(1) BLOCK B1, CONTRACT IDENTIFICATION INFORMATION.
Do not leave any parts of Block B1 blank.
(i) BLOCK B1A, CONTRACT NUMBER.
(A) Enter--
(1) The DoD contract number; or
(2) For orders under contracts awarded by other Federal agencies,
the contract number of that Federal agency as it appears in the
contractual instrument.
(B) Do not leave spaces between characters, and do not enter
dashes, slants, or any other punctuation marks.
(C) The DoD contract number is the basic (13 alphanumeric
character) procurement instrument identification number (PIIN) that was
assigned in accordance with 204.7001 or constructed under an exception
permitted by 204.7000. Do not enter any supplemental procurement
instrument identification numbers as part of the contract number (these
go in Block B2).
(ii) BLOCK B1B, ORIGIN OF CONTRACT.
Enter the code that indicates the agency that originated/assigned
the contract number.
(A) Code A--DoD.
(B) Code B--NASA.
(C) Code C--Other non-DoD agency.
(2) BLOCK B2, MOD, ORDER OR OTHER ID NUMBER.
Enter the supplementary procurement instrument identification
number (if there is one) that was assigned in accordance with 204.7004
or as permitted by 204.7000. It can be up to 19 characters. Usually
calls and orders have a four-position number (see 204.7004-4) and
modifications (including modifications of calls or orders) have a six-
position modification number (see 204.7003 or 204.7004(b)).
(3) BLOCK B3, ACTION DATE.
(i) Enter the year, month, and day of the effective date for fiscal
obligation purposes. When contract actions are awarded contingent on
the availability of funds, enter the date funds are obligated.
(i) Enter four digits for the year, two digits for the month, and
two digits for the day. Use 01 through 12 for January through December.
For example, enter January 2, 2003, as 20030102.
(4) BLOCK B4, COMPLETION DATE.
(i) Enter year, month, and day of the last contract delivery date
or the end of the performance period. If the contract is incrementally
funded, report the completion date for the entire contract. Report the
completion date associated with an option quantity when the option is
exercised.
(ii) Enter four digits for the year, two digits for the month, and
two digits for the day. Use 01 through 12 for January through December.
For example, enter January 2, 2003, as 20030102.
(5) BLOCK B5, CONTRACTOR IDENTIFICATION INFORMATION.
(i) Use data that relates to the contractor whose name and address
appears in the contract document (Block 7 of the SF 26, Award/Contract;
Block 8 of the SF 30, Amendment of solicitation/Modification of
Contract; Block 15A of the SF 33, Solicitation, Offer and Award; or
Block 9 of the DD Form 1155, Order for Supplies or Services), except--
(A) For contracts placed with the Small Business Administration
under Section 8(a) of the Small Business Act, use data that relates to
the company that will be performing the work.
(B) For Federal schedule orders, use data that applies to the
contractor whose name appears on the schedule (not the data for the
agent to whom orders may be sent).
(C) For contracts with the Canadian Commercial Corporation (CCC),
use data for the appropriate CCC office.
(ii) Some of the parts of Block B5 may not apply to the action
being reported. Follow the instructions for each part.
(A) BLOCK B5A, CONTRACTOR IDENTIFICATION NUMBER.
Enter the contractor's 9-position Data Universal Numbering System
(DUNS) number. If the DUNS number is not available to the contracting
activity, use the procedures at 204.7202-2 to obtain one.
(B) BLOCK B5B, GOVERNMENT AGENCY.
Enter one of the following codes:
(1) Code Y--Yes. Enter code Y when the contractor is a Federal/
State/Local government agency.
(2) Code N--No. Enter code N when code Y does not apply.
(C) BLOCK B5C, CAGE CODE.
Enter the 5-position commercial and Government entity (CAGE) code
the identifies the contractor plant or establishment. If the CAGE code
is not already available in the contracting office and the apparent
awardee does not respond to the provision at 252.204-7001, Commercial
and Government Entity (CAGE) Code Reporting, use the procedures at
204.7202-1 to obtain one.
(D) BLOCK B5D, CONTRACTOR NAME AND DIVISION NAME.
Enter the contractor's name as stated in the offer and resultant
contract. Include its division name.
(E) BLOCK B5E, CONTRACTOR ADDRESS.
Enter the contractor's address as stated in the offer and resultant
contract. Include street address (and/or P.O. Box), city/town, state/
country, and ZIP code, if applicable. Do not enter foreign postal
codes.
(F) BLOCK B5F, TIN.
Enter the contractor's taxpayer identification number (see FAR
subpart 4.9). Leave Block B5F blank if the contractor is--
(1) A nonresident alien, foreign corporation, or foreign
partnership that
[[Page 51033]]
does not have income effectively connected with the trade or business
in the United States; and does not have an office or place of business
or a fiscal paying agent in the United States;
(2) An agency or instrumentality of a foreign government
(3) An agency or instrumentality of a Federal, State, or local
government.
(G) BLOCK B5G, PARENT TIN.
Enter the contractor's parent company (common parent) TIN (see FAR
subpart 4.9 and 52.204-3). If the contractor does not have a parent
company or the parent company meets the exemption for Block B5F, leave
Block B5G blank.
(H) BLOCK B5H, PARENT NAME.
If a parent company TIN is entered in Block B5G, enter in Block B5H
the name of the parent company (common parent). Leave Block B5H blank
if there is no parent company or the parent company is exempted from
the requirement to have a TIN.
(6) BLOCK B6, PRINCIPAL PLACE OF PERFORMANCE.
(i) The place, or places, where the contract will be performed may
be specified by the Government or listed by the contractor in response
to the solicitation provision at FAR 42.214-14, Place of Performance--
Sealed Bidding, or FAR 52.215-20, Place of Performance. Use date for
the contractor's principal place of performance, which is generally
the--
(A) Final assembly point for supply contracts with manufacturers.
(B) Dealer's location for supply contracts with regular dealers
(FAR 22.601) where shipment is made from stock.
(C) Subcontractor's location for supply contracts with regular
dealers (FAR 22.601) where shipment is made from a subcontractor's
plant.
(D) Actual construction site for construction contracts.
(E) Planned construction site for architect-engineer contracts.
(F) Place of mining for mined supplies.
(G) Place (including military installations) where a service is
performed for service contracts.
(ii) When there is more than one location for any of paragraphs (i)
(A) through (G) (e.g., more than one construction site), use the
location involving the largest dollar amount of the acquisition. Do not
show more than one location in Block B6.
(iii) If places of performance are too varied or not known, or if
commercial procedures were used, enter the contractor's home office
location.
(iv) Follow the instructions for each part Block 6 which applies to
the action being reported.
(A) BLOCK B6A, CITY OR PLACE CODE.
(1) For places in the United States and outlying areas, enter the
numeric place code, which can be found in the Federal Information
Processing Standards (FIPS) Publication (PUB) 55-2, (``Guideline: Codes
for named Populated Places, Primary Country Divisions, and Other
Locational Entities of the United States and Outlying Areas''). Leave
Block B6A blank for places outside the United States and outlying
areas.
(2) If the city or locality is not listed, look in FIPS PUB 55-2
for the county code of the principal place of performance. Enter that
in Block B6A. Use 50000 for Washington, DC, with a State code of 11.
(3) Paragraph 5.2, Entry Selection With the Aid of the Class Code,
of FIPS PUB 55-2 will help in selecting the correct code. Sometimes, a
class code should be used in addition to a place code to accurately
identify the place of performance. Do not use place codes when the
first position of the class code is X or Z.
(B) BLOCK B6B, STATE OR COUNTRY CODE.
(1) For places in the United States and outlying areas, enter the
numeric State code, which can be found in FIPS PUB 55-2 or FIPS PUB 5-
2, Codes for he Identification of the States, the District of Columbia
and the Outlying Areas of the United States and Associated Areas.
(2) For places outside of the United States and outlying areas,
enter the alpha country code from FIPS PUB 10-3, Countries,
Dependencies, Areas of Special Sovereignty, and Their Principal
Administrative Divisions.
(C) BLOCK B6C, CITY OR PLACE AND STATE OR COUNTRY NAME. Enter the
name of the principal place of performance. Do not leave Block B6B
blank.
(7) BLOCK B7, TYPE OBLIGATION.
Enter one of the following codes:
(i) Code 1--Obligation. Enter code 1 if the contracting action
obligates funds.
(ii) Code 2--Deobligation. Enter code 2 if the contracting action
deobligates funds.
(8) BLOCK B8, TOTAL DOLLARS.
Enter the net amount of funds (whole dollars only) obligated or
deobligated by the contracting action. Do not leave Block B8 blank.
(9) BLOCK B9, FOREIGN MILITARY SALE.
Enter one of the following codes. If only part of the contracting
action is a foreign military sale, separately report the parts (see
204.670-6(c)).
(i) Code Y--Yes. Enter code Y when the contracting action is under
a foreign military sales arrangement, or under any other arrangement
when a foreign country or international organization is bearing the
cost of the acquisition.
(ii) Code N--No. Enter code N when code Y does not apply.
(10) BLOCK B10, MULTIYEAR CONTRACT.
Enter one of the following codes:
(i) Code Y--Yes. Enter code Y when the contracting action is a
multiyear contract as defined at FAR 17.101. Do not report contracts
containing options as multiyear unless the definition at FAR 17.101
applies to the contract.
(ii) Code N--No. Enter code N when code Y does not apply.
(11) BLOCK B11, TOTAL MULTIYEAR VALUE.
Enter total multiyear value only at the time of initial obligation
of the multiyear funds. Therefore, enter the estimated total multiyear
contract value (whole dollars only) if the contracting action is--
(i) A multiyear contract (B10 is coded Y); and
(ii) Either a new letter contract or a new definitive contract
(Block B13A is coded 1 or 3 and Block B13D is blank). For all other
codes in Block B13A, enter a numeric value of zero in Block B11.
(12) BLOCK B12, PRINCIPAL PRODUCT OR SERVICE.
Block B12 contains five parts. Do not leave any parts of Block B12
blank.
(i) BLOCK B12A, FSC OR SVC CODE.
Enter the 4-character federal supply classification (FSC) or
service code that describes the contract effort. To find the code, look
in Section I of the Department of Defense (DoD) Procurement Coding
Manual (MN02). There are three categories so codes of choose from. In
some cases, use a 4-character code from a list of 4-character codes; in
other case, construct a code using the instructions in the Manual. If
more than one category or code applies to the contracting action, enter
the one that best identifies the product or service representing the
largest dollar value.
(A) Supplies. If the contracting action is for the purchase (not
lease or rental) of supplies, enter an FSC code in Block B12A. FSC
codes are all numeric. Look in Section I, Part C, of the DoD
Procurement Coding Manual (MN02). The Department of Defense Federal
Supply Classification Cataloging Handbooks H2-1, H2-2, and H2-3 may
also help with the correct 4-digit code.
(B) Services. If the contracting action is for services (except
research, development, test, and evaluation), construction, or lease or
rental of equipment or facilities, enter a service code in Block B12A.
(C) Research, Development, Test and Evaluation (RDT&E). If the
contracting
[[Page 51034]]
action is for RDT&E (as defined in FAR 35.001 and 234.001), enter an
RDT&E code in Block B12A. Look in Section I, Part A, of the DoD
Procurement Coding Manual (MN02). All RDT&E codes should begin with the
letter ``A''. Do not use an RDT&E code for--
(1) Purchase, lease, or rental of equipment, supplies, or services
separately purchased in support of RDT&E work, even if RDT&E funds are
cited. Instead, use an FSC or Service code under the instructions in
paragraphs (i) (A) or (B).
(2) Orders under Federal Schedule contracts. Instead, use an FSC or
Service code under the instructions in paragraphs (i) (A) or (B).
(ii) BLOCK B12B, DOD CLAIMANT PROGRAM CODE.
Enter a code that identifies the commodity described in Block B12E.
These codes are in Section III of the DoD Procurement Coding Manual
(MN02). If more than one code applies to the contracting action, enter
the one that best identifies the product or service representing the
largest dollar value. If the description in Block B12E is for--
(A) Research and development (R&D), enter the code that best
represents the objective of the R&D. For example, if the objective of
the research and development is a guided missile, enter code A20. If
the R&D cannot be identified to any particular objective, enter code
S10.
(B) Ship repair, inspect and repair as necessary (IRAN),
modification of aircraft, overhaul of engines, or similar maintenance,
repair or modification services, enter the code that best identifies
the program.
(C) Equipment rental (including rental of automated data processing
equipment), enter code S10.
(D) Utility services, enter code S10.
(E) Services that cannot be identified to any listed program, enter
code S10.
(F) Supplies or equipment that cannot be identified to any listed
program, enter code C9E.
(iii) BLOCK B12C PROGRAM, SYSTEM OR EQUIPMENT CODE.
(A) Enter a code that describes the program, weapons system or
equipment. These codes are in Section II of the DoD Procurement Coding
Manual (MN02). If there is no code that applies to the contracting
action, enter three zeros. If more than one code applies to the action,
enter the one that best identifies the product or service representing
the largest dollar value.
(B) If the contracting action is funded by the Ballistic Missile
Defense Organization, enter code CAA.
(C) If the contracting action supports environmental cleanup
programs, enter one of the codes listed in Section II of the DoD
Procurement Coding Manual (MN02) under the heading ``Description and
Use of Program Codes--Environmental Cleanup Programs.''
(D) Defense Logistics Agency activities must use the code assigned
by the sponsoring service.
(iv) BLOCK B12D, SIC CODE.
Enter the standard industrial classification (SIC) code for the
acquisition (as opposed to the SIC of the manufacturer or dealer). Use
the SIC code in effect at the time of award. These codes are in the OMB
Standard Industrial Classification Manual. If more than one code
applies to the contracting action, enter the one that best identifies
the product or service representing the largest dollar value.
(v) BLOCK B12E, NAME/DESCRIPTION.
Enter the name or brief description of the commodity or service. If
the description is classified, enter only the work ``Classified.'' Do
not, however, use ``Classified'' when a code name (e.g., Minuteman,
Polaris, Trident, Pershing, etc.) or an identifying program number
(e.g., WS-107A) can be used.
(13) BLOCK B13, KIND OF CONTRACTING ACTION.
Some of the parts of Block B13 may not apply to the action being
reported. Follow instructions for each part. When the contracting
action is a modification, complete Blocks B13A and B13D.
(i) BLOCK B13A, CONTRACT/ORDER.
Enter one of the following codes:
(A) Code 1--Letter Contract. Enter code 1 when the contracting
action is a letter contract. When the contracting action is a
modification to a letter contract that has not been definitized, enter
code 1 in B13A.
(B) Code 3--Definitive Contract. Enter code 3 when the contracting
action is the award of a definitive contract. When the contracting
action definitizes a letter contract or is a modification to a
definitive contract, enter code 3 in B13A. Code 3 includes the
following:
(1) Definitive contract awards under the Small Business
Administration 8(a) program.
(2) Notices of award.
(3) Lease agreements.
(4) Indefinite delivery-definite quantity contracts (FAR 52.216-
20).
(5) Indefinite delivery-indefinite quantity contracts (FAR 52.216-
22) when funds are obligated by the contract itself.
Code 3 excluded orders from the Procurement List (see codes 6 and
8).
(C) Code 4--Order under an Agreement. Enter code 4 when the
contracting action is an order or definitization of an order under an
agreement. (Examples include an order exceeding $25,000 under a basic
ordering agreement or a master ship repair agreement and job order when
the contract is created by issuing the order. A blanket purchase
agreement call is coded 6 or 9, as appropriate. When the contracting
action is a modification to an order described in Code 4 instructions,
enter code 4 in B13A.
D. Code 5--Order under Indefinite Delivery Contract (IDC).
Enter code 5 when the contracting action is an order, including
task or delivery order, under an indefinite delivery contract awarded
by a Federal agency. For example, code 5 is to be entered for an order
under a GSA indefinite delivery contract such as a GSA area-wide
contract for utility services, which is not a Federal schedule. When
the contracting action is a modification to an order described in code
5 instructions, enter code 5 in B13A.
(E) Code 6--Order/Call under Federal Schedule. Enter code 6 if the
contracting action is a blanket purchase agreement call established
with a Federal schedule contractor pursuant to FAR 13.202(c)(3), or an
order under--
(1) Federal schedule (e.g., GSA, VA, or OPM) contract (FAR 8.401);
or
(2) GSA ADP schedule contract.
Code 6 includes orders from the Procurement List under Federal
schedules. When the contracting action is a modification to an order/
call described in code 6 instructions, enter code 6 in B13A.
(F) Code 8--Order from Procurement List. Enter code 8 if the
contracting action is an action placed with Federal Prison Industries
(UNICOR) or a JWOD Participating Nonprofit Agency in accordance with
FAR Subparts 8.6 or 8.7. When the contracting action is a modification
to an action described in code 8 instructions, enter code 8 in B13A.
(G) Code 9--Purchase Using Simplified Acquisition Procedures. Enter
code 9 if the contracting action, including an action in a designated
industry group under the Small Business Competitiveness Demonstration
Program (FAR subpart 19.10), is an award pursuant to FAR part 13 except
when the contracting action is a blanket purchase agreement call
pursuant to FAR 13.202(c)(3) (see code 6). When the contracting action
is a modification to an order/call described in code 9 instructions,
enter code 9 in B13a.
(ii) BLOCK B13B, TYPE OF INDEFINITE DELIVERY CONTRACT.
[[Page 51035]]
If Block B13A is coded 3 and the ninth position of B1A is coded D,
complete Block B13B. If Block B13A is coded 5, complete Block B13B.
Otherwise, leave blank.
(A) Code A--Requirements Contract (FAR 52.216-21).
(B) Code B--Indefinite Quantity Contract (FAR 52.216-22).
(C) Code C--Definite Quantity Contract (FAR 52.216-20).
(iii) BLOCK B13C, MULTIPLE/SINGLE AWARD IDC(S).
If Block B13B is coded A, B, or C, complete Block B13C. Otherwise,
leave blank.
(A) Code M--Multiple Award. Enter code M if the contracting action
is a task or delivery order under a multiple award indefinite delivery
contract.
(B) Code S--Single Award. Enter code S if the contracting action is
a task or delivery order under a single award indefinite delivery
contract.
(iv) BLOCK B13D, MODIFICATION.
If this action is a modification, enter one of the following codes.
Otherwise, leave blank.
(A) Code A--Additional Work (new agreement).
Enter code A when the contracting action is a bilateral
supplemental agreement which obligates funds for additional work
requiring a justification and approval (J&A).
(B) Code B--Additional Work (other).
Enter code B when the contracting action is a modification of an
existing contract (including a letter contract) which is not covered by
code A or by codes C through H. (See code H for exercise of an option.)
Code B includes actions which--
(1) Initiate an incremental yearly buy under a multiyear contract;
(2) Amend a letter or other contract to add work that does not
require a J&A; or
(3) Order under a priced exhibit or production list.
(C) Code C--Funding Action. Enter code C when the contracting
action is a modification (to a letter or other contract) for the sole
purpose of obligating or deobligating funds.
(1) This includes--
(i) Incremental funding (other than incremental yearly buys under
multiyear contracts which are code B);
(ii) Changes to the estimated cost on cost-reimbursement contracts;
(iii) Repricing actions covering incentive price revisions;
(iv) Economic price adjustments; and
(v) Initial citation and obligation of funds for a contract awarded
in one fiscal year but not effective until a subsequent fiscal year.
(D) Code D--Change Order. Enter code D if the contracting action is
a change order issued under the ``Changes,'' ``Differing Site
Conditions,'' or similar clauses in existing contracts.
(E) Code E--Termination for Default. Enter code E if the
contracting action is a modification which terminates all or part of
the contract for default.
(F) Code F--Termination for Convenience. Enter code F if the
contracting action is a modification which terminates all or part of
the contract for convenience.
(G) Code G--Cancellation. Enter code G if the contracting action is
a modification which cancels the contract. Don not use code G to cancel
a prior DD Form 350--see Block A1.
(H) Code H--Exercise of an Option. Enter code H if the contracting
action is an exercise of an option.
(I) Code J--Definitization of a Letter Contract. Enter code J if
the contracting action is the definitization of a letter contract.
(c) Part C of the DD Form 350.
(1) Part C gathers data concerning contracting procedures, use of
competition, financing, and statutory requirements other than
socioeconomic (which are in Part D).
(2) Do not complete Part C if the contracting action is an action
with a government agency, i.e., Block B5B (Government Agency) is coded
Y (Yes). If Block B13A is coded 6, do not complete any blocks in Part C
except Blocks C13A and C13B when they apply.
(3) In completing Part C, the codes to be used describe either the
contracting action being reported or the original contract, depending
on the codes reported in blocks B13A and B13D.
(i) If Block B13A is coded 1, 2, 3, 4, 6, or 9 and Block B13D is
coded A or is blank, code the blocks in Part C with reference to the
action being reported. Otherwise, code the blocks with reference to the
original contract.
(ii) If there are no codes for the original contract because a DD
Form 350 was not required at the time, the original action is no longer
available, the definition of the original code has changed, or a data
element has been added to the system after the original contract
report, then use codes that best describe the original contracting
action.
(4) Complete Part C blocks as follows:
(i) BLOCK C1, SYSNOPSIS.
Enter one of the following codes:
(A) Code A--Synopsis Only. Enter code A if only a synopsis of the
proposed action was prepared and transmitted to the Commerce Business
Daily in accordance with FAR subpart 5.2.
(B) Code B--Combined Synopsis/Solicitation. Enter code B if a
combined synopsis/solicitation of the proposed action was prepared and
transmitted to the Commerce Business Daily in accordance with FAR
subpart 5.2 and 12.603.
(C) Code N--No. Enter code N if a synopsis was not prepared.
(ii) BLOCK C2, REASON NOT SYNOPSIZED.
Enter one of the following codes if Block C1 is coded N. Otherwise,
leave Block C2 blank.
(A) Code A--Urgency. Enter code A if the action was not synopsized
due to urgency (see FAR 6.302-2).
(B) Code B--Use of FACNET. Enter code B if the action was not
synopsized due to use of FACNET for the acquisition.
(C) Code Z--Other Reason. Enter code Z if the action was not
synopsized due to some other reason.
(iii) BLOCK C3, EXTENT COMPLETED.
Enter one of the following codes:
(A) Code A--Competed Action. Enter code A when--
(1) The contracting action is an action under a Federal Schedule
contract (Block B13A is coded 6).
(2) Competitive procedures were used to fulfill the requirement for
full and open competition (FAR subpart 6.1).
(3) Full and open competition procedures after exclusion of sources
were used in order to establish/maintain alternative sources, to set
aside an acquisition for small business, or to compete section 8(a)
awards (FAR subpart 6.2).
(4) Statutory authorities for other than full and open competition
were used (FAR subpart 6.3) and more than one offer was received (if
only one offer was received, use code D).
(5) Contracting action resulted from a contract awarded prior to
the Competition in Contracting Act that used two-step sealed bidding or
other sealed bidding, or that was negotiated competitively.
(6) Simplified acquisition procedures were used and competition was
obtained.
(B) Code B--Not Available for Competition. Enter code B for--
(1) Awards for utilities or utility systems, excluding long
distance telecommunications services, when only one supplier can
furnish the service (FAR 6.302-1(b)(3)).
(2) Brand name commercial products for authorized resale.
(3) Acquisitions authorized or required by statute to be awarded to
a specific source pursuant to FAR 6.3022-5(b) (2) or (4), e.g.,
qualified nonprofit agencies employing people who are blind or severely
disabled (FAR subpart 8.7) or 8(a) program (FAR subpart 19.8).
[[Page 51036]]
(4) International agreements and Foreign Military Sales when the
acquisition is to be reimbursed by a foreign country that requires that
the product or services be obtained from a particular firm as specified
in official written direction such as a Letter of Offer and Acceptance.
(5) Other contract actions when the Director of Defense Procurement
has determined that there is no opportunity for competition.
(Note: Even though Part C is not completed for actions with a
government agency, the database will automatically include these
actions in the category of not available for competition.)
(C) Code C--Follow-on to Competed Action. Enter code C when the
action pertains to an acquisition placed with a particular contractor
to continue or augment a specific competed program when such placement
was necessitated by prior acquisition decisions.
(D) Code D--Not Competed. Enter code D when codes A, B, or C do not
apply.
(iv) BLOCK C4, SEA TRANSPORTATION.
Enter one of the following codes when Block B1B is coded A, Block
B5B is coded N, and Block B13A is coded other than 9. Otherwise, leave
Block C4 blank.
(A) Code Y--Yes--Positive Response to 252.2247-7022 or 252.212-
7000(c0(2).
Enter code Y when the contractor's response to the provision at
252.247-7022, Representation of Extent of Transportation by Sea, or
252.212-7000(c)(2), Offeror Representations and Certifications--
Commercial Items, indicates the that contractor anticipates that some
of the supplies being provided may be transported by sea.
(B) Code N--No--Negative Response to 252.247-7022 or 252.212-
7000(c)(2).
Enter code N when the contractor's response to the provision at
252.247-7022 or 252.212-7000(c)(2) indicates that the contractor
anticipates that none of the supplies being provided will be
transported by sea.
(C) Code U--Unknown--No Response or Provision Not Included in
Solicitation. Enter code U when the contractor did not complete the
representation at 252.247-7022 or 252.212-7000(c)(2) or the
solicitation did not include either provision.
(v) BLOCK C5, TYPE OF CONTRACT.
(A) If the action is a letter contract, including modifications and
amendments to letter contracts, enter the code that describes the
anticipated type of contract the letter contract will become when it is
definitized.
(B) If there is more than one type of contract involved in the
contracting action, enter the code that matches the type with the most
dollars. If the type with the least dollars exceeds $500,000, fill out
separate DD Forms 350 (with different report numbers) for each type.
(C) Enter one of the following codes:
(1) Code A--Fixed-Price Redetermination.
(2) Code J--Firm-Fixed-Price.
(3) Code K--Fixed-Price Economic Price Adjustment.
(4) Code L--Fixed-Price Incentive.
(5) Code R--Cost-Plus-Award-Fee.
(6) Code S--Cost Contract.
(7) Code T--Cost-Sharing.
(8) Code U--Cost-Plus-Fixed-Fee.
(9) Code V--Cost-Plus-Incentive-Fee.
(10) Code Y--Time-and-Materials.
(11) Code Z--Labor-Hour.
(vi) BLOCK C6, NUMBER OF OFFERORS SOLICITED.
(A) Leave Block C6 blank if--
(1) The original contract resulted from a solicitation issued
before April 1, 1985, (i.e., before the effective date of the
Competition in Contracting Act);
(2) Block B1B is coded B or C and Block B13A is coded 5; or
(3) Block B13A is coded 6.
(B) Otherwise, enter--
(1) Code 1--One. Enter code 1 if only one offeror was solicited.
(2) Code 2--More than One. Enter code 2 if more than one offeror
was solicited.
(vii) BLOCK C7, NUMBER OF OFFERS RECEIVED.
(A) Leave Block C7 blank if--
(1) The original contract resulted from a solicitation issued
before April 1, 1985 (i.e., before the effective date of the
Competition in Contracting Act); or
(2) Block B13A is coded 6, Order Under Federal Schedule.
(B) Otherwise, enter the specific number of offers received
(maximum 999).
(viii) BLOCK C8, SOLICITATION PROCEDURES.
(A) Leave Block C8 blank if--
(1) The original contract resulted from a solicitation issued
before April 1, 1985 (i.e., before the effective date of the
Competition in Contracting Act);
(2) The action is pursuant to simplified acquisition procedures
(Block B13A is coded 9); or
(3) The action is an order/call under a Federal schedule (Block
B13A is coded 6.
(B) Otherwise, enter one of the following codes:
(1) Code A--Full and Open Competition--Sealed Bid. Enter code A if
the action resulted from an award pursuant to FAR 6.102(a).
(2) Code B--Full and Open Competition--Competitive Proposal. Enter
code B if the action resulted from an award pursuant to FAR 6.102(b).
(3) Code C--Full and Open Competition--Combination. Enter code C if
the action resulted from an award using a combination of competitive
procedures (e.g., two-step sealed bidding) pursuant to FAR 6.11102(c).
(4) Code D--Architect-Engineer. Enter code D if the action resulted
from selection of sources for architect-engineer contracts pursuant to
FAR 6.102(d)(1).
(5) Code E--Basic Research. Enter code E if the action resulted
from competitive selection of basic research proposals pursuant to FAR
6.102(d)(2).
(6) Code F--Multiple Award Schedule. Enter code F is the action is
an award of a multiple award schedule pursuant to FAR 6.102(d)(3) or an
order against such a schedule.
(7) Code G--Alternative Sources. Enter code G if the action
resulted from use of competitive procedures but excluded a particular
source pursuant to FAR 6.202(a).
(8) Code K--Set-Aside. Enter code K if the action resulted from
any--
(i) Set-aside for small business concerns (FAR 6.203 including
small business innovation research (SBIR) actions and awards to
qualified nonprofit agencies employing people who are blind or severely
disabled which were participating in a set-aside for small business
concerns (see FAR 19.501(h)).
(ii) Set-aside for small disadvantaged business concerns (see
206.203).
(iii) Total or partial set-asides (including portions of broad
agency announcements (BAAs)) for historically black colleges and
universities or minority institutions (see 206.203 and 235.016).
(iv) Competition among section 8(a) firms under FAR 19.805 (report
noncompetitive 8(a) awards as code N).
(9) Code M. [Reserved.]
(10) Code N--Other Than Full and Open Competition.
Enter code N if the action resulted from use of other than full and
open competition pursuant to FAR subpart 6.3. This includes awards to
qualified nonprofit agencies employing people who are blind or severely
disabled (see FAR subpart 8.7) or noncompetitive awards to the Small
Business Administration under Section 8(a) of the Small Business Act
(see FAR 6.302-5(b)).
(ix) BLOCK C9, AUTHORITY FOR OTHER THAN FULL AND OPEN COMPETITION.
(A) Leave Block C9 blank if the original contract resulted from a
solicitation issued before April 1, 1985 (i.e., before the effective
date of the Competition in Contracting Act).
[[Page 51037]]
(B) Enter one of the following codes if Block C8 is coded ``N.''
Otherwise, leave Block C9 blank.
(1) Code 1A--Unique Source. Enter code 1A if the action was
justified pursuant to FAR 6.302-1(b)(1).
(2) Code 1B--Follow-on Contract. Enter code 1B if the action was
justified pursuant to FAR 6.302-1(a)(2) (ii) or (iii).
(3) Code 1C--Unsolicited Research Prop. Enter code 1C if the action
was justified pursuant to FAR 6.302-1(a)(2)(i).
(4) Code 1D--Patent/Data Rights. Enter code 1D if the action was
justified pursuant to FAR 6.302-1(b)(2).
(5) Code 1E--Utilities. Enter code 1E if the action was justified
pursuant to FAR 6.302-1(b)(3).
(6) Code 1F--Standardization. Enter code 1F if the action was
justified pursuant to FAR 6.302-1(b)(4).
(7) Code 1G--Only One Source--Other. Enter code 1G if the action
was justified pursuant to FAR 6.302-1 in a situation other than the
examples cited in codes 1A through 1F.
(8) Code 2A--Urgency. Enter code 2A if the action was justified
pursuant to FAR 6.302-2.
(9) Code 3A--Particular Source. Enter Code 3A if the action was
justified pursuant to FAR 6.302-3(a)(2).
(10) Code 4A--International Agreement. Enter code 4A if the action
was justified pursuant to FAR 6.302-4.
(11) Code 5A--Authorized by Statute. Enter code 5A if the action
was justified pursuant to FAR 6.302-5(a)(2)(i).
(12) Code 5B--Authorized Resale. Enter code 5B if the action was
justified pursuant to FAR 6.302-5(a)(2)(ii).
(13) Code 6A--National Security. Enter code 6A if the action was
justified pursuant to FAR 6.302-6.
(14) Code 7A--Public Interest. Enter code 7A if the action was
taken pursuant to FAR 6.302-7.
(x) BLOCK C10, SUBJECT TO LABOR STANDARDS STATUTES.
Enter one of the following codes. When Block B13A is coded 6, leave
Block C10 blank.
(A) Code A--Walsh-Healey Act. Enter code A when the contracting
action is subject to the provisions of FAR subpart 22.6.
(B) Code C--Service Contract Act. Enter code C when the contracting
action is subject to the provisions of the Service Contract Act (see
FAR part 37).
(C) Code D--Davis-Bacon Act. Enter code D when the contracting
action is subject to the Davis-Bacon Act (see FAR 22.403-1).
(D) Code Z--Not Applicable. Enter code Z when codes A, C, or D do
not apply.
(xi) BLOCK C11, CERTIFIED COST OR PRICING DATA.
Enter one of the following codes when Block B1B is coded A.
Otherwise, leave blank.
(A) Code Y--Yes--Obtained. Enter code Y when certified cost or
pricing data were obtained for the contracting action reported (see FAR
15.804-2).
(B) Code N--No--Not Obtained. Enter code N when certified cost or
pricing data were not obtained because data were not required (see FAR
15.804-2) or an exemption was granted (see FAR 15.804-3(a)-(g)).
(C) Code W--Not Obtained--Waived. Enter code W when certified cost
or pricing data were not obtained because the requirement was waived
(see FAR 15.804-3(i) and DFARS 215.804-3(i)).
(xii) BLOCK C12, CONTRACT FINANCING.
Enter one of the following codes identifying whether or not
progress payments (PP), advance payments (AP), or other financing
methods were used.
(A) Code A--FAR 52.232-16. Enter code A if the contract contains
the clause at FAR 52.232-16, Progress Payments.
(B) Code B--DFARS 252.232-7003. enter code B if the contract
contains the clause at 252.232-7003, Flexible Progress Payments.
(C) Code C--Percentage of Completion PP. Enter code C if the
contract provides for progress payments based on percentage or stage of
completion, which is only permitted on contracts for construction, for
shipbuilding, or for ship conversion, alteration, or repair (see
232.102(e)(2)).
(D) Code D--Unusual PP or AP. Enter code D if the contract provides
for unusual progress payments or advance payments (see FAR subpart 32.4
and 32.501-2).
(E) Code E--Commercial Financing. Enter code E if the contract
provides for commercial financing payments (see FAR subpart 32.2).
(F) Code F--Performance-Based Financing. Enter code F is the
contract provides for performance-based financing payments (see FAR
subpart 32.10).
(G) Code Z--Not Applicable. Enter code Z when codes A through F do
not apply.
(xiii) BLOCK C13, FOREIGN TRADE DATA.
(A) The term ``United States'' (U.S.), as used in Block C13,
excludes the Trust Territory of Palau (see 204.670-1 for definition of
United States and outlying areas).
(B) BLOCK C13A, PLACE OF MANUFACTURE.
Complete Block C13A only if the contracting action is for a foreign
end product or a service provided by a foreign concern. Otherwise,
leave Block C13A blank.
(1) Code A--U.S. Enter code A if the contracting action is for--
(i) A foreign end product that is manufactured in the United States
but still determined to be foreign because 50 percent or more of the
cost of its components is not mined, produced, or manufactured inside
the United States or inside qualifying countries; or
(ii) Services performed in the United States by a foreign concern.
(2) Code B--Foreign. Enter code B if the contracting action is
for--
(i) Any other foreign end product; or
(ii) Services performed outside the Unites States by a foreign
concern.
(C) BLOCK C13B, COUNTRY OF ORIGIN CODE.
(1) Complete Block C13B only if Block C13A is coded A or B.
Otherwise, leave Block C13B blank.
(2) Enter the code from FIPS PUB 10-3 (Countries, Dependencies,
Areas of Special Sovereignty, and Their Principal Administrative
Divisions) that identifies the country where the foreign product is
coming from or where the foreign company providing the services is
located. If more than one foreign country is involved, enter the code
of the foreign country with the largest dollar value.
(xiv) BLOCK C14, COMMERCIAL ITEMS. Enter one of the following
codes:
(A) Code Y--Yes. Enter code Y if the contract contains the clause
at FAR 52.212-4, Contract Terms and Conditions--Commercial Items.
(B) Code N--No. Enter code N if code Y does not apply
(d) Part D of the DD Form 350.
(1) Part D gathers data on the various socioeconomic programs that
apply to defense acquisitions.
(2) Do Not complete Part D if the contracting action is an--
(i) Order/call under a Federal schedule, i.e., Block B13A is coded
6; or
(ii) Action with a government agency, i.e., Block B5B is coded Y.
(3) Determined the status of the concern (e.g., size and ownership)
by referring to FAR party 19 and DFARS part 219.
(4) Use the codes in Blocks B13A and B13D to determine whether the
codes in Part D will describes the contracting action being reported or
the original contract.
(i) Code Part D to describe the contracting action being reported
when--
(A) Block B13A is coded 1, 3, 4, or 9 and Block B13D is coded A or
is blank; or
[[Page 51038]]
(B) Block B5B is coded N, Block B13A is coded 8, and Block B13D is
coded A or is blank. Otherwise, code Part D to describe the original
contract.
(ii) If there are no codes for the original contract because a DD
Form 350 was not required at the time, the original action is no longer
available, the definition of the original code has changed or a data
element has been added to the system after the original contract
report, then use codes that best describe the original contracting
action.
(5) Complete Part D blocks as follows:
(i) BLOCK D1, TYPE OF BUSINESS.
Enter one of the following codes:
(A) Code A--Small Disadvantaged Business Performing in U.S. Enter
code A if the contractor is an SDB concern as defined in 219.001 and
the place of performance is within the United States and outlying
areas.
(B) Code B--Other Small Business Performing in U.S. Enter code B if
the contractor is a small business concern as defined in FAR 19.001,
other than a small disadvantaged business concern, and the place of
performance is within the United States and outlying areas.
(C) Code C--Large Business Performing in U.S. Enter code C if the
contractor is a domestic large business concern, and the place of
performance is within the United States and outlying areas.
(D) Code D--JWOD Participating Nonprofit Agencies. Enter code D if
the contractor is a qualified nonprofit agency employing people who are
blind or severely disabled (FAR 8.701), and the place of performance is
within the United States and outlying areas.
(E) Code F--Hospital. Enter code F if the contractor is a hospital,
and the place of performance is within the United States and outlying
areas.
(F) Code L--Foreign Concern/Entity. Enter code L if the contractor
is a foreign concern, the Canadian Commercial Corporation, or a non-
U.S.-chartered nonprofit institution.
(G) Code M--Domestic Firm Performing Outside U.S. Enter code M if
the contractor is a domestic concern or a domestic nonprofit
institution and the place of performance is outside the United States
and outlying areas.
(H) Code U--Historically Black Colleges and Universities or
Minority Institutions (HBCU/MI). Enter code U if the contractor is an
HBCU/MI as defined at 252.226-7000 and the place of performance is
within the United States and outlying areas.
(I) Code V--Other Educational. Enter code V if the contractor is an
educational institutional which does not qualify as an HBCU/MI, and the
place of performance is within the United States and outlying areas.
(J) Code Z--Other Nonprofit. Enter code Z if the contractor is a
nonprofit institution (defined in FAR 31.701) which does not meet any
of the criteria in codes D, F, U, or V, and the place of performance is
in the United States and outlying areas.
(ii) BLOCK D2, REASON NOT AWARDED TO SMALL DISADVANTAGED BUSINESS
(SDB).
Enter one of the following codes when Block D1 is coded B or C.
Otherwise, leave Block D2 blank.
(A) Code A--No Known SDB Source.
(B) Code B--SDB Not Solicited. Enter code B when there was known
small business source, but it was not solicited.
(C) Code C--SDB Solicited/No Offer. Enter code C when an SDB was
solicited but it did not submit an offer or its offer was not
sufficient to cover the total quantity requirement so it received a
separate award for the quantity offered.
(D) Code D--SDB Solicited/Offer Not Low. Enter code D when an SDB
offer was not the low offer or an SDB was not willing to accept award
of a partial small business set-aside portion of an action at the price
offered.
(E) Code Z--Other Reason. Enter code Z when an SDB did not receive
the award for any other reason or when Block B1B is coded B or C and
Block B13A is coded 5.
(iii) BLOCK D3, REASON NOT AWARDED TO SMALL BUSINESS (SB). Enter
one of the following codes when Block D1 is coded C. Otherwise, leave
D3 blank. (The term ``Small Business'' includes small disadvantaged
businesses.)
(A) Code A--No Known SB Source.
(B) Code B--SB Not Solicited. Enter code B when there was a known
small business source, but it was not solicited.
(C) Code C--SB Solicited/No Offer. Enter code C when a small
business concern was solicited but it did not submit an offer or its
offer was not sufficient to cover the total quantity requirement so it
received a separate award for the quantity offered.
(D) Code D--SB Solicited/Offer Not Low. Enter code D when a small
business offer was not the low or most advantageous offer or a small
business concern was not willing to accept award of a set-aside portion
of an action at the price offered by the Government.
(E) Code Other Reason. Enter code Z when a small business did not
receive the award for any reason or when Block B1B is coded B or C and
Block B13A is coded 5.
(iv) BLOCK D4, PREFERENCE PROGRAM.
(A) BLOCK D4A, TYPE OF SB SET-ASIDE.
Enter one of the following codes:
(1) Code A--None. Enter code A if there was no small business set-
aside (FAR 19.502). Note that set-asides for historically black
colleges and universities and minority institutions (HBCUs/MIs) are not
small business set-asides. Use code A for HBCU/MI set-asides and
complete Block D4C.
(2) Code B--Total SB Set-Aside. Enter code B if the action was a
total set-aside for small business (FAR 19.502-2), including actions
reserved exclusively for small business concerns pursuant to FAR
13.105, or if the action resulted from the Small Business Innovation
Research Program.
(3) Code C--Partial SB Set-Aside. Enter code C if the action was a
partial set-aside for small business (219.502-3).
(4) Code E--Total SDB Set-Aside. Enter code E if the action was a
total set-aside for small disadvantaged businesses (219.502-2-70).
(5) Code Y--Emerging Small Business Set-Aside. Enter code Y if the
action was an emerging small business set-aside within a designated
industry group under the Small Business Competitiveness Demonstration
Program (FAR subpart 19.10 and DFARS 204.670-9).
(B) BLOCK D4B--TYPE OF SDB SET-ASIDE/SDB PREFERENCE.
Enter one of the following codes, even if Block D4A is coded E:
(1) Code A--None. Enter code A if no SDB preference was given or
award was not to an SDB.
(2) Code B--Section 8(a). Enter code B if the contract was awarded
to the Small Business Administration (SBA) under Section 8(a) of the
Small Business Act (FAR subpart 19.8).
(3) Code C--Total SDB Set-Aside. Enter code C if the action was an
SDB set-aside (219.502-2-70) and award was to an SDB.
(4) Code D--SDB Evaluation Preference--Unrestricted. Enter code D
if the action was unrestricted but an SDB received an award as a result
of an evaluation preference (subpart 219.70).
(5) Code E--SDB Preferential Consideration--Partial SB Set-Aside.
Enter code E if the action was a partial set-aside for small business
and preferential consideration resulted in an award to an SDB (219.502-
3).
(6) Code F--SDB Evaluation Preference in Construction. Enter code F
if the action was a construction acquisition and preferential
consideration resulted in an award to a SDB (subpart 219.72). If code F
applies and Block B13D is blank, complete Blocks E1 and E3.
(C) BLOCK D4C--HBCU/MI SET-ASIDE.
[[Page 51039]]
Enter one of the following codes:
(1) Code A--None. Enter code A if the action was not set aside for
HBCUs or MIs.
(2) Code B--HBCU or MI--Total Set-Aside. Enter code B if the action
was total set-aside for HBCUs and MIs (226.7003).
(3) Code C--HBCU or MI--Partial Set-Aside. Enter code C if the
action was a partial set-aside for HBCUs or MIs under a broad agency
announcement (235.016).
(D) BLOCK D4D. [Reserved.]
(E) BLOCK D4E, PREMIUM PERCENT.
(1) Complete Block D4E if [Block B1B is coded A and
(i) Block D4B is coded C, D, or E; or
(ii) Block D4C is coded B or C. Otherwise, leave blank.
(2) Calculate the premium percentage per 219.202-5 and enter it as
a three-digit number rounded to the nearest tenth, e.g., enter 7.55% as
076. If no premium was paid, enter three zeros (000).
(v) BLOCK D5--ETHNIC GROUP.
(A) Complete Block D5 if the action is with an SDB. Otherwise,
leave it blank.
(B) Enter the code from the following list which corresponds to the
ethnic group marked by the contractor in the solicitation provision at
252.219-7000 (Small Disadvantaged Business Concern Representation (DoD
Contracts)).
(1) Code A--Asian-Indian American.
(2) Code B--Asian-Pacific American.
(3) Code C--Black American.
(4) Code D--Hispanic American.
(5) Code E--Native American.
(6) Code F--Other SDB certified/determined by SBA.
(7) Code Z--No representation.
(vi) BLOCK D6, WOMEN-OWNED BUSINESS.
Enter one of the following codes:
(A) Code Y--Yes. Enter code Y if the response to FAR 52.204-5 or
52.212-3(c) (Women-Owned Business Representation) indicates that it is
a women-owned business.
(B) Code N--No. Enter code N if the contractor's response to FAR
52.204-5 or 52.212-3(c) indicates that it is not a women-owned
business.
(C) Code U--Uncertified. Enter code U if the information is not
available because the contractor did not complete the representation
under FAR 52.204-5 or 52.212-3(c).
(vii) BLOCK D7--SMALL BUSINESS INNOVATION RESEARCH (SBIR) PROGRAM.
Enter one of the following codes. When Block B1B is coded B or C
and Block B13A is coded 5, leave Block D7 blank.
(A) Code A--Not an SBIR Program Phase I-II. Enter code A if the
action is not in support of a Phase I or II SBIR Program.
(B) Code B--SBIR Program Phase I Action. Enter code B if the action
is related to a Phase I contract in support of the SBIR Program.
(C) Code C--SBIR Program Phase II Action. Enter code C if the
action is related to a Phase II contract in support of the SBIR
Program.
(viii) BLOCK D8, SUBCONTRACTING PLAN--SB, SDB, OR HBCU/MI.
Enter one of the following codes:
(A) Code A--Plan Not Included--No Subcontracting Possibilities.
Enter code A if a subcontracting plan was not included in the contract
because subcontracting possibilities do not exist (FAR 19.705-2(c)).
(C) Code B--Plan Not Required. Enter code B if no subcontracting
plan was required (because the action did not meet the dollar
thresholds in FAR 19.702(b)).
(C) Code C--Plan Required, Incentive Not Included. Enter code C if
the action includes a subcontracting plan, but does not include
additional incentives (FAR 19.708(c)).
(D) Code D--Plan Required, Incentive Included. Enter code D if the
action includes a subcontracting plan and also includes additional
incentives (FAR 19.708(c), 219.708(c)).
(ix) BLOCK D9, DEMONSTRATION TEST PROGRAM.
Enter one of the following codes. When Block B13A is coded 5 or
Block B13D is coded B, C, D, E, F, or G and the original action was
awarded before the program began, enter code N in Block D9. When Block
B1B is coded B or C and Block B13A is coded 5, enter code N in Block
D9.
(A) Code Y--Yes. Enter code Y if this is an action with a U.S.
business concern, in either the four designated industry groups or the
ten targeted industry categories under the Small Business
Competitiveness Demonstration Program (FAR subpart 19.10 and DFARS
subpart 219.10), where the principal place of performance is in the
United States or outlying areas.
(B) Code N--No. Enter code N if code Y does not apply.
(x) BLOCK D10, SIZE OF SMALL BUSINESS.
(A) Complete Block D10 only when Block D9 is coded ``Y'' and the
contractor is a small business (Block D1 is coded A or B). Otherwise,
leave Block D10 blank.
(B) Enter one of the following codes for the size of the business
(number of employees or average annual gross revenue) as represented by
the contractor in the solicitation provision at FAR 52.219-19, Small
Business Concern Representation for the Small Business Competiveness
Demonstration Program:
(1) Code A--50 or fewer.
(2) Code B--51-100.
(3) Code C--101-250.
(4) Code D--251-500.
(5) Code E--501-750.
(6) Code F--751-1,000.
(7) Code G--Over 1,000.
(8) Code M--$1,000,000 or less.
(9) Code N--$1,000,001-2,000,000.
(10) Code P--$2,000,001-3,500,000.
(11) Code R--$3,500,001-5,000,000.
(12) Code S--$5,000,001-10,000,000.
(13) Code T--$10,000,001-17,000,000.
(14) Code U--$Over $17,000,000.
(xi) BLOCK D11, EMERGING SMALL BUSINESS.
(A) Complete this block only if Block D9 is coded ``Y'' and the
contracting action is in one of the four designated industry groups,
not one of the targeted industry categories. Otherwise, leave Block D11
blank.
(B) Enter one of the following codes:
(1) Code Y--Yes. Enter code Y if the contractor represents in the
provision at FAR 52.219-19, Small Business Concern Representation for
the Small Business Competitiveness Demonstration Program, that it is an
emerging small business concern.
(2) Code N--No. Enter code N if code Y does not apply.
(e) Part E of the DD Form 350.
Part E gathers data on specialized items that may not become
permanent reporting elements.
(1) BLOCK E1, PREFERENCE AWARD VALUE.
(i) Complete Block E1 if code F was entered in Block D4B and Block
B13D is blank. Otherwise, leave Block E1 blank.
(ii) Enter the dollar amount (i.e., contract face value) of the
award. Use whole dollars.
(2) BLOCK E2, SET-ASIDE VALUE.
(i) Complete Block E2 only if the contracting action is with a
qualified nonprofit agency employing people who are blind or severely
disabled and was awarded as a result of the agency's participation in a
total or partial small business set-aside (FAR 19.501(h)). Otherwise,
leave Block E2 blank.
(ii) Enter the dollar amount (i.e., contract face value) of the
set-aside portion of the award. Use whole dollars.
(3) BLOCK E3, NEXT LOW OFFER.
(i) Complete Block E3 only if Block E1 or E2 is completed.
Otherwise, leave Block E3 blank.
(ii) If Block E1 or E2 is completed--
(A) Enter the offered price from the small business firm that would
have been the low offeror if qualified
[[Page 51040]]
nonprofit agencies employing people who are blind or severely disabled
had not participated in the acquisition; or
(B) If the evaluation preference for small disadvantaged business
concerns in construction acquisitions set forth in subpart 219.72 is
applied, enter the offered price from the non-SDB concern that would
have been the successful offeror if the evaluation preference had not
been applied. Enter the amount in whole dollars.
(4) BLOCK E4-BLOCK E8. [Reserved]
(f) Part F of the DD Form 350.
Part F identifies the reporting official.
(1) BLOCK F1, NAME OF CONTRACTING OFFICER OR REPRESENTATIVE.
Enter the name (Last, First, Middle Initial) of the contracting
officer or representive.
(2) BLOCK F2, SIGNATURE.
The person identified in Block F1 must sign.
(3) BLOCK F3, TELEPHONE NUMBER.
Enter the telephone number (with area code) for the individual in
Block F1. Installations with Defense Switched Network (DSN) must enter
the DSN number.
(4) BLOCK F4, DATE.
Enter date that the DD Form 350 Report is submitted. Enter four
digits for the year, two digits for the month, and two digits for the
day. Use 01 through 12 for January through December. For example, enter
January 2, 2003, as 20030102.
(g) Special Instructions for DD Forms 350 on Actions of $25,000 or
Less Under the Small Business Competitiveness Demonstration Program.
(1) A DD Form 350 is required on actions of $25,000 or less under
the Small Business Competitiveness Demonstration Program in accordance
with 204.670-9.
(2) Except as provided in paragraphs (g)(2)(i) and (ii) of this
subsection, complete the DD Form 350 using the instructions in
paragraphs (a) through (f) of this subsection.
(i) Enter code B in Block C3 for actions at or below the micro-
purchase threshold at FAR 2.101.
(ii) Leave the following blocks blank:
BIB
B4
B5B
B5C
B5F
B5G
B5H
B9
B10
B11
B12B
B12C
C1
C2
C4
C6
C11
C12
C13A
C13B
D2
D3
D4E
D5
D7
D8
E2
E3
17. Section 253.204-71 is revised to read as follows:
253.204-71 DD Form 1057, Monthly Contracting Summary of Actions
$25,000 or Less.
(a) Scope of subsection.
Policy on use of a DD Form 1057 is in 204.670. This subsection
contains instructions on completion of the DD Form 1057.
(1) Report actions in the month they are awarded, issued, executed,
or placed, except--
(i) When the price of an order or call cannot be determined when it
is placed, count the action and its dollars when it is paid.
(ii) Count the following actions when the voucher is paid (count
each voucher as one action):
(A) Meals and lodging.
(B) Automatic deliveries, e.g., bread, milk, and ice cream.
(iii) The Navy Facilities Engineering Command shall report vouchers
it processes on Naval shore establishment contracts for electricity and
gas in accordance with departmental procedures.
(2) Enter all dollar amounts in whole dollars only. Do not enter
cents. If the net amount is a decrease, enter a minus sign (-)
immediately preceding the amount to indicate a credit entry. Do not
enter parentheses.
(3) Include actions in support of a contingency operation (see
213.000) on the DD Form 1057, as follows:
(i) Section A, complete fully.
(ii) Section B, complete only lines 5, 5a, 7, and 7a.
(iii) Section C, complete only lines 1 and 1c, 2 and 2c, or 3 and
3c, as applicable.
(iv) Sections D, E, and F, leave blank.
(v) Section G, complete fully.
(vi) Section H, complete fully.
(b) Definitions.
For purposes of this subsection--
All Other Orders means orders, and modifications of such orders,
under basic ordering agreements (BOAs) or indefinite delivery
contracts.
GSA Schedule Orders means only orders/calls, and modifications of
such orders/calls, under Federal schedules awarded by GSA.
Other Contracting Actions means all actions that do not meet the
definitions, in this paragraph (b), of an order.
Other Federal Schedule Orders means only orders, and modifications
of such orders, under Federal schedules awarded by an agency other than
GSA, e.g., awarded by VA or OPM.
Similified Acquisition Procedures means purchase orders, calls
under blanket purchase agreements (BPAs) (except BPAs written under
Federal schedules), and modifications to those actions.
(c) Section A, General Information.
(1) BLOCK A1, REPORTING FOR MONTH ENDING.
Enter the last day of the month in which the report is submitted.
Enter four digits for the year, two digits for the month, and two
digits for the day. Use 01 through 12 for January through December. For
example, enter January 2, 2003, as 20030102.
(2) BLOCK A2, CONTRACTING OFFICE.
Enter sufficient detail to establish the identity of the
contracting office submitting the report in Blocks 2a and b.
(3) BLOCK A3, REPORTING OFFICE CODE.
Enter the code assigned to the contracting office by the
departmental data collection point in 204.670-8.
(d) Section B, Contracting Actions.
(1) BLOCK B1, TARIFF OR REGULATED ACQUISITIONS.
Enter the number and dollar
FR Doc. 96-24839 Defense Federal Acquisition Regulation Supplement; Contract Reporting for Fiscal Year 1997
value of contracting actions (including
modifications that will also be reported in Block B8) with tariff or
regulated industries (industries with sole source and service rates
which are fixed or adjusted by a Federal, State, or other public
regulatory body).
(2) BLOCK B2, FOREIGN/INTERAGENCY.
(i) Enter the total number and dollar value of contracting actions
(including modifications that will also be reported in Block B8)--
(A) For foreign military sales (FMS) or other arrangement where the
foreign government or international organization is paying all or part
of the cost of the action.
(B) Placed directly with foreign governments under the terms of an
international agreement, e.g., base maintenance performed with the
foreign government acting as the contractor (any other actions directly
with foreign governments go in Block B5).
[[Page 51041]]
(C) With another Federal agency or Government corporation, e.g.,
Federal Prison Industries (UNICOR).
(ii) Enter the subtotals in Blocks B2a, b, and c for the number and
dollar value of contracting actions, including modifications that will
also be reported in Block B8 for--
(A) Block B2a, FMS/International Agreements. Enter subtotals for
paragraphs (d)(2)(i)(A) and (B) of this subsection.
(B) Block B2b, Action with UNICOR. Enter subtotal for contracting
actions with UNICOR.
(C) Block B2c, Action with Other Government Agency. Enter subtotal
for action with government agencies other than UNICOR.
(3) BLOCK B3, SMALL BUSINESS.
(i) Enter the total number and total dollar value of contracting
actions (including modifications which will also be reported in Block
B8) where the--
(A) Contractor is a small business concern; and
(B) Place of performance is in the United States and outlying areas
(see 204.670-1).
(ii) Enter the subtotals for the number and dollar value of
contracting actions (including modifications that will also be reported
in Block B8) for--
(A) Block B3a, Simplified Acquisition Procedures (SAP).
(B) Block B3b, GSA Schedule Orders.
(C) Block B3c, Other Federal Schedule Orders.
(D) Block B3d, All Other Orders.
(E) Block B3e, Other Contracting Actions.
(4) BLOCK B4, LARGE BUSINESS.
(i) Enter the total number and dollar value of contracting actions
(including modifications which will also be reported in Block B8) where
the--
(A) Contractor is a large business concern; and
(B) Place of performance is in the United States and outlying
areas.
(ii) Enter the subtotals for the number and dollar value of
contracting actions (including modifications that will also be reported
in Block B8) for--
(A) Block B4a, Simplified Acquisition Procedures (SAP).
(B) Block B4b, GSA Schedule Orders.
(C) Block B4c, Other Federal Schedule Orders.
(D) Block B4d, All Other Orders.
(E) Block B4e, Other Contracting Actions.
(5) BLOCK B5, DOMESTIC OR FOREIGN ENTITIES PERFORMING OUTSIDE THE
UNITED STATES.
(i) Enter the total number and dollar value of contracting actions
(including modifications that will also be reported in Block B8) where
the place of performance is outside the United States and outlying
areas (see 204.670-1(c)). This includes actions placed directly with a
foreign government that are not under international agreements (see
paragraph (d)(2)(i)(B) of this subsection). It does not matter whether
the contractor is domestic or foreign.
(ii) Enter the subtotals for the number and dollar value of actions
(including modifications that will also be reported in Block B8) for--
(A) Block B5a, Simplified Acquisition Procedures (SAP).
(B) Block B5b, GSA Schedule Orders.
(C) Block B5c, Other Federal Schedule Orders.
(D) Block B5d, All Other Orders.
(E) Block B5e, Other Contracting Actions.
(6) BLOCK B6, EDUCATIONAL, NONPROFIT & OTHER.
(i) Enter the total number and dollar value of contracting actions
(including modifications that will also be reported in Block B8) with--
(A) Educational institutions;
(B) Not-for-profit and nonprofit institutions (defined in FAR
31.107);
(C) Qualified nonprofit agencies employing people who are blind or
severely disabled; and
(D) Any other entities not listed in Blocks B1 through B5.
(ii) Enter the subtotals for the number and dollar value of
contracting actions (including modifications that will also be reported
in Block B8) for--
(A) Block B6a, Simplified Acquisition Procedures (SAP).
(B) Block B6b, GSA Schedule Orders.
(C) Block B6c, Other Federal Schedule Orders.
(D) Block B6d, All Other Orders.
(E) Block B6e, Other Contracting Actions.
(7) BLOCK B7, TOTAL CONTRACTING ACTIONS.
(i) Add Blocks B1 through B6 and enter the totals in Block B7.
(ii) If directed by data collection point procedures, also enter
the subtotals for the number and dollar value of contracting actions
for--
(A) Block B7a, Simplified Acquisition Procedures, sum of sub-blocks
3a+4a+5a+6a.
(B) Block B7b, GSA Schedule Orders, sum of sub-blocks 3b+4b+5b+6b.
(C) Block B7c, Other Federal Schedule Orders, sum of sub-blocks
3c+4c+5c+6c.
(D) Block B7d, All Other Orders, sum of sub-blocks 3d+4d+5d+6d.
(E) Block B7e, Other Contracting Actions, sum of sub-blocks
3e+4e+5e+6e.
(8) BLOCK B8, TOTAL MODIFICATIONS EXCLUDING SIMPLIFIED ACQUISITION
PROCEDURES.
Enter the total number and dollar value of modification actions,
excluding simplified acquisition procedures.
(e) Section C, Extent Competed.
(1) BLOCK C1, COMPETED.
(i) Enter the total number and dollar value of contracting actions
which were competed.
(A) Include in Block C1--
(1) Actions not subject to Competition in Contracting Act (CICA)
(see FAR 6.001) when at least two quotations or offers were received;
(2) Actions when competitive procedures were used to fulfill the
requirement for full and open competition (FAR subpart 6.1);
(3) Actions when full and open competition was provided for after
exclusion of source, to establish/maintain alternative sources or to
set aside an acquisition exceeding the micro-purchase threshold for
small business (FAR Subpart 6.2);
(4) Actions when statutory authorities for other than full and open
competition (FAR subpart 6.3) were used and more than one offer was
received, except as provided in paragraphs (e)(1)(i)(B) (2) and (3) of
this subsection;
(5) Actions resulting from a contract awarded competitively before
CICA (including two-step formal advertising);
(6) Orders/calls and modifications under a Federal schedule; and
(7) Section 8(a) awards competed under FAR 6.204.
(B) Do not include--
(1) Actions that meet the criteria for Section C, Block C2;
(2) Actions awarded under the authority of FAR 6.302-5(b) (2) or
(4), authorized or required by statute (report these in Section C,
Block C2); or
(3) Actions reported in Section B, Blocks B1 and B2, including
actions with the Federal Prison Industries (UNICOR). These actions are
treated as not available for competition in published competition
reports.
(ii) Enter the subtotals for the number and dollar value of
contracting actions for--
(A) Block C1a, Small Business Concerns;
(B) Block C1b, Large Business Concerns;
(C) Block C1c, Domestic or Foreign Entities Performing Outside the
United States and Outlying Areas; and
(D) Block C1d, Educational, Nonprofit & Other.
(2) BLOCK C2, NOT AVAILABLE FOR COMPETITION.
(i) Enter the total number and dollar value of contracting actions
which were not available for competition.
[[Page 51042]]
(A) Include in Block C2--
(1) Actions for brand name commercial products for authorized
resale;
(2) Actions authorized or required by statute to be awarded to a
specific source or through another agency in accordance with FAR 6.302-
5(b) (2) or (4); e.g., actions with qualified nonprofit agencies
employing people who are blind or severely disabled, and noncompetitive
8(a) actions;
(3) Actions (including modifications) at or below the micro-
purchase threshold at FAR 2.101; and
(4) Other contract actions when the Director of Defense Procurement
has determined that there is no opportunity for competition.
(B) do not include any actions reported in Section B, Blocks B1 or
B2 (e.g., actions with regulated monopolies, actions under foreign
military sales or international agreements, and actions with another
Federal agency or Government corporation). These actions are treated as
not available for competition in published competition reports.
(ii) Enter the subtotals for the number and dollar value of
contracting actions for--
(A) Block C2a, Small Business Concerns;
(B) Block C2b, Large Business Concerns;
(C) Block C2c, Domestic or Foreign Entities Performing Outside the
United States; and
(D) Block C2d, Educational, Nonprofit and Other.
(3) BLOCK C3, NOT COMPETED.
(i) Enter the total number and dollar value of contracting actions
which were not competed, i.e., any actions not reported in Blocks B1 or
B2. Do not include actions reported in Section B, Blocks B1 or B2.
These actions are treated as not available for competition in published
competition reports.
(ii) Enter the subtotals for the number and dollar value of actions
for--
(A) Block C3a, Small Business Concerns;
(B) Block C3b, Large Business Concerns;
(C) Block C3c, Domestic or Foreign Entities Performing Outside the
United States and Outlying Areas; and
(D) Block C3d, Educational, Nonprofit & Other.
(f) Section D, Research, Development, Test, & Evaluation Actions.
Do not include actions for supplies or services in support of RDT&E
work that do not require the contractor to perform RDT&E.
(1) BLOCK D1, SMALL BUSINESS.
Enter the total number and dollar values of RDT&E actions with
small business concerns.
(2) BLOCK D2, LARGE BUSINESS.
Enter the total number and dollar value of RDT&E actions with large
business concerns.
(3) BLOCK D3, DOMESTIC OR FOREIGN ENTITIES PERFORMING OUTSIDE THE
UNITED STATES AND OUTLYING AREAS.
Enter the total number and dollar value of RDT&E actions where the
principal place of performance is outside the United States or outlying
areas (see 204.670-1).
(4) BLOCK D4, HISTORICALLY BLACK COLLEGES & UNIVERSITIES OR
MINORITY INSTITUTIONS (HBCU/MI).
Enter the total number and dollar value of RDT&E actions with HBCUs
or MIs.
(5) BLOCK D5, OTHER ENTITIES.
Enter the total number and dollar value of RDT&E actions that were
reported in Blocks D1 through D4.
(g) Section E, Selected Socioeconomic Statistics.
(1) BLOCK E1, SMALL BUSINESS (SB) SET-ASIDE.
(i) Enter the total number and dollar value of contracting actions
which were small business set-aside actions, including awards to SDBs
reported in Blocks E2c and E2d.
(ii) If the action is an emerging small business set-aside (FAR
19.1006(c)), use the most appropriate sub-block.
(iii) Enter the subtotals for the number and total dollar value of
actions for--
(A) Block Ela, SB Set-aside Using Simplified Acquisition
Procedures.
Enter actions pursuant to FAR 13.105(a).
(B) Block E1b, SB Set-Aside.
Enter actions pursuant to FAR 19.502.
(2) BLOCK E2, SMALL DISADVANTAGED BUSINESS (SDB) ACTIONS.
(i) Enter the total number and dollar value of actions which were
small disadvantaged business actions.
(ii) Enter the subtotals for the number and dollar value for--
(A) block E2a, Through SBA-Section 8(a).
Enter actions with the Small Business Administration pursuant to
Section 8(a) of the Small Business Act (FAR subpart 19.8).
(B) Block E2b, SDB Set-Aside/SDB Preference.
Enter actions resulting from--
(1) A set-aside for small disadvantaged business (SDB) (219.502-2-
70);
(2) Application for an SDB evaluation preference (subpart 219.70);
or
(3) SDB preferential consideration (219.502-3).
(C) Block E2c, SB Set-aside Using Simplified Acquisition
Procedures.
Enter actions pursuant to FAR 13.105(a) when award is to an SDB,
but a preference was not applied.
(D) Block E2d, SB Set-Aside.
Enter actions under FAR 19.502 when award is to an SDB, but a
preference was not applied nor was preferential consideration given.
(E) Block E2e, Other.
Enter awards to SDB concerns when award is to an SDB not reported
in Blocks E2a through E2d.
(3) BLOCK E3, WOMEN-OWNED SMALL BUSINESS.
Enter total number and dollar value of contracting actions with
women-owned small businesses (see FAR 19.3304(a)).
(4) BLOCK E4, HBCU/MI.
Enter the total number and dollar value of contracting actions with
NHCU/MIs pursuant to subpart 226.70.
(5) BLOCK E5, JWOD PARTICIPATING NONPROFIT AGENCIES.
Enter the total number and dollar value of contracting actions with
qualified nonprofit agencies employing people who are blind or severely
disabled for supplies or services from the Procurement List pursuant to
FAR subpart 8.7.
(6) BLOCK E6, EXEMPT FROM SMALL BUSINESS ACT REQUIREMENTS.
Enter the total number and dollar value of contracting actions
exempt from the set-aside requirements of the Small Business Act (see
FAR 19.502-1).
(h) Section F, Simplified Acquisition Procedures--Dollar Value
Ranges. Enter in each of the dollar ranges the total number and dollar
value of contracting actions which used simplified acquisition
procedures (FAR part 13). The total of Section F is normally the sum of
Blocks B3a, B4a, B5a, and B6a.
(i) Section G, Contingency Actions.
BLOCK G1, TOTAL ACTIONS.
(1) Enter the total number and dollar value of actions in support
of a contingency operation (see 213.000). The numbers entered here are
a breakout of the numbers already entered in Sections B and C.
(2) Enter the subtotals based on the instructions for completion of
Section C for the number and dollar value of contracting actions for--
(i) Block G1a, Competed;
(ii) Block G1b, Not Available for Competition; and
(iii) Block G1c, Not Competed.
(j) Section H, Remarks and Authentication.
(1) BLOCK H1, REMARKS.
Enter any remarks applicable to this report.
[[Page 51043]]
(2) Block H2, CONTRACTING OFFICER.
(i) Block H2a, Typed Name.
Enter the name (last, first, middle initial) of the contracting
officer or representative.
(ii) Block H2b, Signature.
The person identified in Block H2a must sign.
(iii) Block H2c, Telephone Number.
Enter the telephone number (with area code) of the person
identified in Block H2a. Installations with Defense Switched Network
(DSN) must enter their DSN number.
(3) BLOCK H3, DATE REPORT SUBMITTED.
Enter the date that the DD Form 1057 is submitted. Enter four
digits for the year, two digits for the month and two digits for the
day. Use 01 through 12 for January through December. For example, enter
January 2,2003, as 20030102.
18. Section 253.215-70 is amended by revising paragraphs (c)(2) and
(c)(6) to read as follows:
253.215-70 DD Form 1547, Record of Weighted Guidelines Application.
* * * * *
(c) * * *
(2) BLOCK 2--BASIC PROCUREMENT INSTRUMENT IDENTIFICATION NO.
Enter the identifying contract number assigned per 204.70 (Block
B1A of the DD 350).
* * * * *
(6) BLOCK 6--NAME OF CONTRACTOR
Enter the contractor's name (including division name), (Block B5D
of the DD 350).
* * * * *
[FR Doc. 96-24839 Filed 9-27-96; 8:45 am]
BILLING CODE 5000-04-M
Complete official Federal Register PDF
FR Doc. 96-24820 Removal of Duplicative Immigration Regulations
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 51013-51014]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24820]
[[Page 51013]]
=======================================================================
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DEPARTMENT OF LABOR
Wage and Hour Division
29 CFR Parts 504, 506, 507, and 508
RIN 1205-AB-13
Removal of Duplicative Immigration Regulations
AGENCIES: Wage and Hour Division, Employment Standards Administration,
and Employment and Training Administration, Labor.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of Labor is removing duplicative immigration
regulations from the Code of Federal Regulations. These regulations
will continue to appear in the Employment and Training Administration's
regulations. This rulemaking is in response to the National Performance
Review, which calls for the removal of obsolete and unnecessary
regulations.
EFFECTIVE DATE: October 30, 1996.
FOR FURTHER INFORMATION CONTACT: Terence Finegan, Director, Division of
Policy, Legislation, and Dissemination, U.S. Department of Labor,
Employment and Training Administration, 200 Constitution Avenue, NW.,
Room N5637, Washington, DC 20210; tel. (202) 219-7669 x126 (this is not
a toll-free call); or Tom Shierling, Acting Team Leader, U.S Department
of Labor, Employment Standards Administration, Wage and Hour Division,
200 Constitution Avenue, NW., Room S3510, Washington, DC 20210; tel.
(202) 501-3884 (this is not a toll-free call).
SUPPLEMENTARY INFORMATION: In March 1995, the President issued a new
directive to federal agencies regarding their responsibilities under
his Regulatory Reinvention Initiative. This initiative is part of the
National Performance Review and calls for comprehensive regulatory
reform. The President directed all agencies to undertake a page-by-page
review of their regulations with a goal of eliminating or modifying
those that are obsolete or which are otherwise in need of reform. This
notice removes duplicative regulations from the CFR as part of DOL's
response to this directive. The Employment Standards Administration,
Wage and Hour Division's regulations removed from Title 29, CFR, are
duplicated in the Employment and Training Administration's regulations
in 20 CFR Part 655, and reflect the two agencies' joint operation of
various worker protection provisions related to the temporary admission
to the United States of nonimmigrant foreign workers.
Removal of the duplicate regulations for the H-1A nurses labor
attestation program, the D-1 foreign maritime crewmembers program, the
H-1B nonimmigrant labor condition application program, and the F-1
students labor attestation program from title 29 is clearly in the
Department's interest, and a savings to the public. Since their
inception, the Secretary has implemented the aforementioned temporary
nonimmigrant programs by delegating the administrative functions to the
Employment and Training Administration (ETA) and the enforcement
functions to the Wage and Hour Division of the Employment Standards
Administration (ESA). ETA and ESA jointly issued the duplicative
regulations governing their respective functions. Despite this division
of authority, each agency published in its own program regulations both
the administrative and enforcement provisions for the H-1A, D-1, H-1B
and F-1 programs in their entirety. Thus, the ETA regulations at 20 CFR
part 655, subparts D through K, and the ESA regulations at 29 CFR parts
504, 506, 507 and 508, contain duplicative provisions governing the
administration and enforcement of the H-1A, D-1, H-1B and F-1 temporary
nonimmigrant programs. Because this duplication is inefficient and
unnecessary, the Department has elected to remove the duplicative
provisions from its regulations at 29 CFR.
Additionally, ETA and ESA have explored other possibilities for
eliminating the duplication of these regulations, including a proposal
that each agency attempt to remove the provisions pertaining to the
other's delegated functions. Under that alternative, ETA would have
removed the enforcement-related provisions pertaining to the H-1A, D-1,
H-1B and F-1 programs from its regulations at 20 CFR part 655, and ESA
would have removed the administration-related provisions pertaining to
those same temporary nonimmigrant programs from its regulations at 29
CFR parts 504, 506, 507 and 508. Upon closer scrutiny of the program
provisions, the Department determined that the administration and
enforcement provisions were sufficiently integrated that any attempt to
separate the provisions would require substantially rewriting the
regulations. Thus, removal of the duplicative administration and
enforcement provisions from ESA's regulations at 29 CFR, parts 504,
506, 507 and 508, and adding a cross-reference to the still- effective
joint regulations at 20 CFR part 655, subparts D through K, is the most
efficient action.
Elimination of this duplication will also save the Department and
the public a substantial amount in printing costs. Copies of title 20,
CFR, are available widely in libraries and from the Government Printing
Office, as well as on the Internet.
Accordingly, this rule revises parts 504, 506, 507, and 508,
governing the administration and enforcement of the H-1A, D-1, H-1B and
F-1 temporary nonimmigrant programs in title 29 of the CFR, to include
only cross-references to the relevant regulations published at 20 CFR
part 655, subparts D through K.
Publication in Final
The Department of Labor has determined, pursuant to 5 U.S.C.
553(b)(B), that good cause exists for waiving the public comment on
this rule. Publication of a proposed rule and solicitation of comments
would be neither necessary nor fruitful, since this final rule affects
only duplicative regulations governing the H-1A, D-1, H-1B and F-1
temporary nonimmigrant programs. Further, this is a rule of agency
organization and procedure which requires no notice, pursuant to 5
U.S.C. 553(b)(A). Current regulations governing these programs remain
in effect in title 20, part 655, subparts D through K of the CFR.
Effective Date: This regulation is effective October 30, 1996.
Regulatory Procedures--Executive Order 12866
This final rule has been reviewed by DOL pursuant to Executive
Order 12866. Executive Order 12866 requires that regulations be
reviewed for consistency with the priorities and principles set forth
in the Executive Order. The Department has determined that this rule is
consistent with and furthers these priorities and principles.
Specifically, it responds directly to the President's Regulatory
Reinvention Initiative by eliminating duplicative regulations. It
entails no increase in cost or burden on State and local governments or
other entities. It is not a significant regulatory action under the
Executive Order.
Small Business Regulatory Enforcement Fairness Act
The Department has determined that this final rule is not a ``major
rule'' requiring prior approval by the Congress and the President
pursuant to the Small Business Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.), because it is not likely to result in
[[Page 51014]]
(1) an annual effect on the economy of $100 million or more; (2) a
major increase in costs or prices for consumers, individual industries,
Federal, State or local government agencies, or geographic regions; or
(3) significant adverse effects on competition, employment, investment,
productivity, innovation, or on the ability of the United States-based
enterprises to compete with foreign-based enterprises in domestic and
export markets.
This final rule is effective 30 days after publication.
Regulatory Flexibility Act
The Regulatory Flexibility Act (Pub. L. 96-354) requires the
Federal Government to anticipate and reduce the impact of rules and
paperwork requirements on small businesses and other small entities.
This rule has no significant effect on a substantial number of small
entities. The Final Rule removes duplicative regulations governing the
H-1A, D-1, H-1B and F-1 temporary nonimmigrant programs from title 29
of the CFR, and cross-references title 20 CFR, part 655, subparts D
through K, where the relevant regulations remain in effect. This Final
Rule addresses issues of agency administration which do not affect the
obligations of the regulated public. Thus, the Final rule does not have
a significant economic impact on a substantial number of small
entities. Further, since this Final Rule was not preceded by a proposed
rule, it is not a regulation subject to the provisions of the
Regulatory Flexibility Act. Therefore, a regulatory flexibility
analysis is not required.
Paperwork Reduction Act
This regulation contains no information collection requirements
which are subject to review and approval by the Office of Management
and Budget (OMB) under the Paperwork Reduction Act of 1980 (44 U.S.C.
3500 et seq.).
List of Subjects
29 CFR Part 504
Administrative practice and procedure, Aliens, Employment,
Enforcement, Health professions, Labor, Nurse, Penalties, Registered
nurse, Reporting and recordkeeping requirements, Wages.
29 CFR Part 506
Administrative practice and procedure, Aliens, Crewmembers,
Employment, Enforcement, Immigration, Labor, Longshore work, Penalties,
Reporting and recordkeeping requirements.
29 CFR Part 507
Administrative practice and procedure, Aliens, Employment,
Enforcement, Fashion models, Immigration, Labor, Penalties, Reporting
and recordkeeping requirements, Specialty occupations, Wages, Working
conditions.
29 CFR Part 508
Administrative practice and procedure, Aliens, Employment,
Enforcement, Immigration, Labor, Penalties, Reporting and recordkeeping
requirements.
Signed at Washington, DC, this 23rd day of September, 1996.
Robert B. Reich,
Secretary of Labor.
For the reasons set forth in the preamble, 29 CFR chapter V is
amended as set forth below:
1. Part 504 is revised to read as follows:
PART 504--ATTESTATIONS BY FACILITIES USING NONIMMIGRANT ALIENS AS
REGISTERED NURSES
Authority: 8 U.S.C. 1101(a)(15)(H)(i)(a) and 1182(m); sec.
3(c)(1), Pub. L. 101-238, 103 Stat. 2099, 2103; and sec. 341 (a) and
(b), Pub. L. 103-182, 107 Stat. 2057.
Sec. 504.1 Cross-reference.
Regulations governing labor condition attestations by facilities
using nonimmigrant aliens as registered nurses are found at 20 CFR part
655, subparts D and E.
2. Part 506 is revised to read as follows:
PART 506--ATTESTATIONS BY EMPLOYERS USING ALIEN CREWMEMBERS FOR
LONGSHORE ACTIVITIES IN U.S. PORTS
Authority: 8 U.S.C. 1288 (c) and (d).
Sec. 506.1 Cross-reference.
Regulations governing attestations by employers using alien
crewmembers for longshore activities in U.S. ports are found at 20 CFR
part 655, subparts F and G.
3. Part 507 is revised to read as follows:
PART 507--LABOR CONDITION APPLICATIONS AND REQUIREMENTS FOR
EMPLOYERS USING NONIMMIGRANTS ON H-1B SPECIALTY VISAS IN SPECIALTY
OCCUPATIONS AND AS FASHION MODELS
Authority: 8 U.S.C. 1101(a)(15)(H)(i)(b), 1182(n), and 1184; 29
U.S.C. 49 et seq.; Pub. L. 102-232, 105 Stat. 1733, 1748 (8 U.S.C.
1182 note); and sec. 341 (a) and (b), Pub. L. 103-182, 107 Stat.
2057.
Sec. 507.1 Cross-reference.
Regulations governing labor condition applications requirements for
employers using nonimmigrants on H-1B specialty visas in specialty
occupations and as fashion models are found at 20 CFR part 655,
subparts H and I.
4. Part 508 is revised to read as follows:
PART 508--ATTESTATIONS FILED BY EMPLOYERS UTILIZING F-1 STUDENTS
FOR OFF-CAMPUS WORK
Authority: 29 U.S.C. 49 et seq.; and sec. 221(a), Pub. L. 101-
649, 104 Stat. 4978, 5027 (8 U.S.C. 1184 note).
Sec. 508.1 Cross-reference.
Regulations governing attestations by employers using F-1 students
in off-campus work are found at 20 CFR part 655, subparts J and K.
[FR Doc. 96-24820 Filed 9-27-96; 8:45 am]
BILLING CODE 4510-30-P; 4510-27-P
Complete official Federal Register PDF
FR Doc. 96-24783 Privacy Act Regulation
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 51004-51008]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24783]
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UNITED STATES INFORMATION AGENCY
22 CFR Part 505
Privacy Act Regulation
AGENCY: United States Information Agency.
ACTION: Interim final rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: This interim final rule will amend the existing Privacy Act
Regulation implementing the Privacy Act of 1974, as amended. Changes in
the regulation are to reconcile them with changes in the law and Agency
policy. The Agency expects the amended regulation will enable Privacy
Act requesters to better understand how to make requests and how the
Agency responds to such requests.
DATES EFFECTIVE: October 15, 1996. Comments regarding this interim
final rule will be accepted until October 30, 1996.
ADDRESSES: Comments may be mailed to the FOIA/Privacy Act Officer, U.S.
Information Agency, Room M-29, 301 4th Street, SW., Washington, DC.
20547.
FOR FURTHER INFORMATION CONTACT:
FOIA/PA Unit, U.S. Information Agency, Room M-29, 301 4th Street, SW.,
Washington, DC. 20547; telephone (202) 619-5499.
SUPPLEMENTARY INFORMATION: The privacy of each individual is directly
affected by the collection, maintenance, use and dissemination of
personal information by Federal agencies. In order to protect the
privacy of individuals identified in information systems maintained by
Federal agencies, it is important to regulate the collection,
maintenance, use and dissemination of such information by such
agencies. Therefore it becomes paramount to ensure that regulations
implementing the law are clear and readily understandable to the
public.
List of Subjects in 22 CFR Part 505
Privacy.
For the reasons given in the preamble, Part 505 of Title 22 is
revised to read as follows:
PART 505--PRIVACY ACT POLICIES AND PROCEDURES
Sec.
505.1 Purpose and scope.
505.2 Definitions.
505.3 Procedures for requests.
505.4 Requirements and identification for making requests.
505.5 Disclosure of information.
505.6 Medical records.
505.7 Correction or amendment of record.
505.8 Agency review of requests for changes.
505.9 Review of adverse agency determination.
505.10 Disclosure to third parties.
505.11 Fees.
505.12 Civil remedies and criminal penalties.
505.13 General exemptions (Subsection J).
505.14 Specific exemptions (Subsection K).
505.15 Exempt systems of records.
Authority: Pub. L. 93-579, 88 Stat. 1897; 5 U.S.C. 552a; 55 FR
31940, Aug. 6, 1990, as amended.
Sec. 505.1 Purpose and scope.
The United States Information Agency will protect individuals'
privacy from
[[Page 51005]]
misuse of their records, and grant individuals access to records
concerning them which are maintained by the Agency's domestic and
overseas offices, consistent with the provisions of Pub. L. 93-579, 88
Stat. 1897; 5 U.S.C. 552a, the Privacy Act of 1974, as amended. The
Agency has also established procedures to permit individuals to amend
incorrect records, to limit the disclosure of personal information to
third parties, and to limit the number of sources of personal
information. The Agency has also established internal rules restricting
requirements of individuals to provide social security account numbers.
Sec. 505.2 Definitions.
(a) Access Appeal Committee (AAC)--the body established by and
responsible to the Director of USIA for reviewing appeals made by
individuals to amend records held by the Agency.
(b) Agency or USIA or USIS--The United States Information Agency,
its offices, divisions, branches and its Foreign Service
establishments.
(c) Amend--To make a correction to or expunge any portion of a
record about an individual which that individual believes is not
accurate, relevant, timely or complete.
(d) Individual--A citizen of the United States or an alien lawfully
admitted for permanent residence.
(e) Maintain--Collect, use, disseminate or any combination of these
record-keeping functions; exercise of control over and hence
responsibility and accountability for systems of records.
(f) Record--Any information maintained by the Agency about an
individual that can be reproduced, including finger or voice prints and
photographs, and which is retrieved by that particular individual's
name or personal identifier, such as a social security number.
(g) Routine use--With respect to the disclosure of a record, the
use of such record for a purpose which is compatible with the purpose
for which it was collected. The common and ordinary purposes for which
records are used and all of the proper and necessary uses, even if any
such uses occur infrequently.
(h) Statistical record--A record in a system of records maintained
for statistical research or reporting purposes only and not used in
whole or in part in making any determination about an identifiable
individual, except as provided in 13 U.S.C. 8.
(i) System of records--A group of records under the maintenance and
control of the Agency from which information is retrieved by the name
or personal identifier of the individual.
(j) Personnel record--Any information about an individual that is
maintained in a system of records by the Agency that is needed for
personnel management or processes such as staffing, employee
development, retirement, grievances and appeals.
(k) Post--Any of the foreign service branches of the Agency.
Sec. 505.3 Procedures for requests.
(a) The Agency will consider all written requests received from an
individual for records pertaining to herself/himself as a request made
under the Privacy Act of 1974, as amended (5 U.S.C. 552a) whether or
not the individual specifically cites the Privacy Act when making the
request.
(b) All requests under the Privacy Act should be directed to the
USIA, Office of the General Counsel, FOIA/Privacy Act Unit (GC/FOI),
301 4th Street, SW., Washington, DC 20547, which will coordinate the
search of all systems of records specified in the request. Requests
should state name, date of birth, and social security number.
(c) Requests directed to the Agency's overseas posts which involve
routine unclassified, administrative and personnel records available
only at those posts may be released to the individual by the post if
the post determines that such release is authorized by the Privacy Act.
All other requests shall be submitted by the post to the Office of the
General Counsel, FOIA/Privacy Act Unit (GC/FOI), 301 4th Street, SW.,
Washington, DC 20547, and the individual shall be so notified of this
action in writing, when possible.
(d) In those instances where an individual requests records
pertaining to herself/himself, as well as records pertaining to another
individual, group, or some other category of the Agency's records, only
that portion of the request which pertains to records concerning the
individual will be treated as a Privacy Act request. The remaining
portions of such a request will be processed as a Freedom of
Information Act request by the office noted in paragraph (b) of this
section.
Sec. 505.4 Requirements and identification for making requests.
(a) Individuals seeking access to Agency records may present their
written request in person or may mail their request to the USIA, Office
of General Counsel, FOI/Privacy Act (GC/FOI) Unit, 301 4th Street, SW.,
Washington, DC 20547. The GC/FOI Unit may be visited between the hours
of 9 a.m. and 4 p.m., Monday through Friday, except for legal holidays.
(b) Individuals, seeking access to Agency records, will be
requested to present some form of identification. Individuals should
state their full name, date of birth and a social security number. An
individual must also include her/his present mailing address and zip
code, and if possible a telephone number.
(c) When signing a statement confirming one's identity, individuals
should understand that knowingly and willfully seeking or obtaining
access to records about another individual under false pretenses is
punishable by a fine of up to $5,000.
Sec. 505.5 Disclosure of information.
(a) In order to locate the system of records that an individual
believes may contain information about herself/himself, an individual
should first obtain a copy of the Agency's Notice of Systems of Records
as republished in the Federal Register (Vol. 55, No. 151), on August 6,
1990. By identifying a particular record system and by furnishing all
the identifying information requested by that record system, it will
enable the Agency to locate those records which actually pertain to the
individual. At a minimum, any request should include the information
specified in Sec. 505.4(b) above.
(b) In certain circumstances, it may be necessary for the Agency to
request additional information from the individual to ensure that the
retrieved record does, in fact, pertain to the individual.
(c) All requests for information on whether or not the Agency's
system(s) of records contain information about the individual will be
acknowledged within ten working days of receipt of the request. The
requested records will be provided as soon as possible thereafter.
(d) If the Agency determines that the substance of the requested
record is exceptionally sensitive, the Agency will require the
individual to furnish a signed, notarized statement that she/he is in
fact the person named in the file before granting access to the
records.
(e) Original records will not be released from the custody of the
records system manager. Copies will be furnished subject to and in
accordance with fees established in Sec. 505.11.
(f) Denial of access to records:
(1) The requirements of this section do not entitle an individual
access to any information compiled in reasonable anticipation of a
civil action or proceeding.
[[Page 51006]]
(2) The Agency is not required to permit access to records if the
information is not retrievable by the individual's name or other
personal identifier; those requests will be processed as Freedom of
Information Act requests.
(3) The Agency may deny an individual access to a record, or
portion thereof, if following a review it is determined that the record
or portion falls within the exemptions provided in 5 U.S.C. 552a(j) and
552a(k). See Secs. 505.13 and 505.14 for a listing of general and
specific exemptions.
(4) The decision to deny access to a record or a portion of the
record is made by the Agency's Privacy Act Officer. Officer of the
General Counsel. The denial letter will advise the individual of her/
his rights to appeal the denial (See Sec. 505.9 on Access Appeal
Committee's review).
Sec. 505.6 Medical records.
If, in the judgment of the Agency, the release of medical
information directly to the requester could have an adverse effect on
the requester, the Agency will arrange an acceptable alternative to
granting access of such records to the requester. This normally
involves the release of the information to a doctor named by the
requester. However, this special procedure provision does not in any
way limit the absolute right of the individual to receive a complete
copy of her or his medical record.
Sec. 505.7 Correction or amendment of record.
(a) An individual has the right to request that the Agency amend a
record pertaining to her/him which the individual believes is not
accurate, relevant, timely, or complete. At the time the Agency grants
access to a record, it will furnish guidelines for requesting
amendments to the record.
(b) Requests for amendments to records must be writing and mailed
or delivered to the USIA Privacy Act Officer, Office of the General
Counsel, 301 4th Street, SW, Washington, DC 20547, who will coordinate
the review of the request to amend a record with the appropriate
office(s). Such requests must contain, at a minimum, identifying
information needed to locate the record, a brief description of the
item or items of information to be amended, and the reason for the
requested change. The requester should submit as much documentation,
arguments or other data as seems warranted to support the request for
amendment.
(C) The Agency will review all requests for amendments to records
within 10 working days of receipt of the request and either make the
changes or inform the requester of its refusal to do so and the reasons
therefore.
Sec. 505.8 Agency review of requests for changes.
(a) In reviewing a record in response to a request to amend or
correct a file, the Agency shall incorporate the criteria of accuracy,
relevance timeliness, and completeness of the record in the review.
(b) If the Agency agrees with an individual's request to amend a
record, it shall:
(1) Advise the individual in writing:
(2) Correct the record accordingly.
(3) And, to the extent that an accounting of disclosure was
maintained, advise all previous recipients of the record of the
corrections.
(C) If the Agency disagrees with all or any portion of an
individual's request to amend a record, it shall:
(1) Advise the individual of the reasons for the determination;
(2) Inform the individual of her/his right to further review (see
Sec. 505.9).
Sec. 505.9 Review of adverse agency determination.
(a) When the Agency determines to deny a request to amend a record,
or portion of the record, the individual may request further review by
the Agency's Access Appeal Committee. The written request for review
should be mailed to the Chairperson, Access Appeal Committee, USIA,
Office of Public Liaison, 301 4th Street, SW, Washington, DC 20547. The
letter should include any documentation, information or statement which
substantiates the request for review.
(b) The Agency's Access Appeal Committee will review the Agency's
initial denial to amend the record and the individual's documentation
supporting amendment, within 30 working days. If additional time is
required, the individual will be notified in writing of the reasons for
the delay and the approximate date when the review is expected to be
complete. Upon completion of the review, the Chairperson will notify
the individual of the results.
(c) If the Committee upholds the Agency's denial to amend the
record, the Chairperson will advise the individual of:
(1) The reasons for the Agency's refusal to amend the record;
(2) Her/his right and the procedure to add to the file a concise
statement supporting the individual's disagreement with the decision of
the Agency;
(3) Her/his right to seek judicial review of the Agency's refusal
to amend the file.
(d) When an individual files a statement disagreeing with the
Agency's refusal to amend a record, the Agency will clearly annotate
the record so that the fact that the record is disputed is apparent to
anyone who may subsequently have access to, use of, or reason to
disclose the file. If information is disclosed regarding the area of
dispute, the Agency will provide a copy of the individual's statement
in the disclosure. Any statement which may be included by the Agency
regarding the dispute will be limited to the reasons given to the
individual for not amending the record. Copies of the Agency's
statement shall be treated as part of the individual's record, but will
not be subject to amendment by the individual under these regulations.
Sec. 505.10 Disclosure to third parties.
The Agency will not disclose any information about an individual to
any person or another agency without the prior consent of the
individual about whom the information is maintained, except as provided
for in the following paragraphs.
(a) Medical records--May be disclosed to a doctor or other medical
practitioner, named by the individual, as prescribed in Sec. 505.6
above.
(b) Accompanying individual--When a requester is accompanied by any
other person, the Agency will require that the requester sign a
statement granting consent to the disclosure of the contents of the
record to that person.
(c) Designees--If a person requests another person's file, she or
he must present a signed statement from that person of record which
authorizes and consents to the release of the file to the designated
individual.
(d) Guardians--Parent(s) or legal guardian(s) of dependent minors
or of an individual who has been declared by a court to be incompetent
due to physical, mental or age incapacity, may act for and on behalf of
the individual on whom the Agency maintains records.
(e) Other disclosures--A record may be disclosed without a request
by or written consent of the individual to whom the record pertains if
such disclosure conditions are authorized under the provisions of 5
U.S.C. 552a(b). These conditions are:
(1) Disclosure within the Agency. This condition is based upon a
``need-to-know'' concept which recognizes that Agency personnel may
require access to discharge their duties.
(2) Disclosure to the public. No consent by an individual is
necessary if
[[Page 51007]]
the record is required to be released under the Freedom of Information
Act (FOIA), 5 U.S.C. 552. The record may be exempt, however, under one
of the nine exemptions of the FOIA.
(3) Disclosure for a routine use. No consent by an individual is
necessary if the condition is necessary for a ``routine use'' as
defined in Sec. 505.2(g). Information may also be released to other
government agencies which have statutory or other lawful authority to
maintain such information. (See Appendix I--Prefatory Statement of
General Routine Uses, FR 31977, Vol. 55, No. 151, Aug. 6, 1990)
(4) Disclosure to the Bureau of the Census. For purposes of
planning or carrying out a census or survey or related activity. Title
13 U.S.C. section 8 limits the uses which may be made of these records
and also makes them immune from compulsory disclosure.
(5) Disclosure for statistical research and reporting. The Agency
will provide the statistical information requested only after all names
and personal identifiers have been deleted from the records.
(6) Disclosure to the National Archives. For the preservation of
records of historical value, pursuant to 44 U.S.C. 2103.
(7) Disclosure for law enforcement purposes. Upon receipt of a
written request by another Federal agency or a State or local
government describing the law enforcement purpose for which a record is
required, and specifying the particular record. Blanket requests for
all records pertaining to an individual are not permitted under the
Privacy Act.
(8) Disclosure under emergency circumstances. For the safety or
health of an individual (e.g., medical records on a patient undergoing
emergency treatment).
(9) Disclosure to the Congress. For matters within the jurisdiction
of any House or Senate committee or subcommittee, and/or joint
committee or subcommittee.
(10) Disclosure to the General Accounting Office (GAO). For matters
within the jurisdiction of the duties of the GAO's Comptroller General.
(11) Disclosure pursuant to court order. Pursuant to the order of a
court of competent jurisdiction. This does not include a subpoena for
records requested by counsel and issued by a clerk of the court.
Sec. 505.11 Fees.
(a) The first copy of any Agency record about an individual will be
provided free of charge. A fee of $0.15 per page will be charged for
any additional copies requested by the individual.
(b) Checks or money orders should be made payable to the United
States Treasurer and mailed to the Freedom of Information Act/Privacy
Act Unit, Office of the General Counsel, 301 4th Street, SW.,
Washington, DC 20547. The Agency will not accept cash.
Sec. 505.12 Civil remedies and criminal penalties.
(a) Grounds for court action. An individual will have a remedy in
the Federal District Courts under the following circumstances:
(1) Denial of access. Individuals may challenge an Agency decision
to deny them access to records to which they consider themselves
entitled.
(2) Refusal to amend a record. Under conditions prescribed in 5
U.S.C. 552a(g), an individual may seek judicial review of the Agency's
refusal to amend a record.
(3) Failure to maintain a record accurately. An individual may
bring suit against the Agency for any alleged intentional and willful
failure to maintain a record accurately, if it can be shown that the
individual was subject to an adverse action resulting in the denial of
a right, benefit, entitlement or employment the individual could
reasonably have expected to be granted if the record had not been
deficient.
(4) Other failures to comply with the Act. An individual may bring
an action for any alleged failure by the Agency to comply with the
requirements of the Act or failure to comply with any rule published by
the Agency to implement the Act provided it can be shown that:
(i) The action was intentional or willful;
(ii) The Agency's action adversely affected the individual; and,
(iii) The adverse action was caused by the Agency's actions.
(b) Jurisdiction and time limits. (1) Action may be brought in the
district court for the jurisdiction in which the individual resides or
has a place of residence or business, or in which the Agency records
are situated, or in the District of Columbia.
(2) The statute of limitations is two years from the date upon
which the cause of action arises, except for cases in which the Agency
has materially and willfully misrepresented any information required to
be disclosed and when such misrepresentation is material to the
liability of the Agency. In such cases the statute of limitations is
two years from the date of discovery by the individual of the
misrepresentation.
(3) A suit may not be brought on the basis of injury which may have
occurred as a result of the Agency's disclosure of a record prior to
September 27, 1975.
(C) Criminal penalties.--(1) Unauthorized disclosure. It is a
criminal violation of the provisions of the Act for any officer or
employee of the Agency knowingly and willfully to disclose a record in
any manner to any person or agency not entitled to receive it, for
failure to meet the conditions of disclosure enumerated in 5 U.S.C.
552a(b), or without the written consent or at the request of the
individual to whom the record pertains. Any officer or employee of the
Agency found guilty of such misconduct shall be fined not more than
$5,000.
(2) Failure to publish a public notice. It is a criminal violation
of the Act to willfully maintain a system of records and not to publish
the prescribed public notice. Any officer or employee of the Agency
found guilty of such misconduct shall be fined not more than $5,000.
(3) Obtaining records under false pretenses. The Act makes it a
criminal offense to knowingly and willfully request or gain access to a
record about an individual under false pretenses. Any person found
guilty of such an offense may be fined not more than $5,000.
Sec. 505.13 General exemptions (Subsection (j)).
(a) General exemptions are available for systems of records which
are maintained by the Central Intelligence Agency (Subsection (j)(1)),
or maintained by an agency which performs as its principal function any
activity pertaining to the enforcement of the criminal laws (Subsection
(j)(2)).
(b) The Act does not permit general exemption of records compiled
primarily for a noncriminal purpose, even though there are some quasi-
criminal aspects to the investigation and even though the records are
in a system of records to which the general exemption applies.
Sec. 505.14 Specific exemptions (Subsection (k)).
The specific exemptions focus more on the nature of the records in
the systems of records than on the agency. The following categories of
records may be exempt from disclosure:
(a) Subsection (k)(1). Records which are specifically authorized
under criteria established under an Executive Order to be kept secret
in the interest of national defense or foreign policy, and which are in
fact properly classified pursuant to such Executive Order;
(b) Subsection (k)(2). Investigatory records compiled for law
enforcement purposes (other than material within the
[[Page 51008]]
scope of subsection (j)(2) as discussed in Sec. 505.13(a)). If any
individual is denied any right, privilege, or benefit for which she/he
would otherwise be eligible, as a result of the maintenance of such
material, the material shall be provided to the individual, unless
disclosure of the material would reveal the identity of a confidential
source;
(c) Subsection (k)(3). Records maintained in connection with
protection of the President and other VIPs accorded special protection
by statute;
(d) Subsection (k)(4). Records required by statute to be maintained
and used solely as statistical records;
(e) Subsection (k)(5). Records compiled solely for the purpose of
determining suitability, eligibility, or qualifications for Federal
civilian employment, military service, Federal contracts, or access to
classified information, but only if disclosure of the material would
reveal the identity of a confidential source that furnished information
to the Government;
(f) Subsection (k)(6). Testing or examination records used solely
to determine individual qualifications for appointment or promotion in
the Federal service when the disclosure of such would compromise the
objectivity or fairness of the testing or examination process;
(g) Subsection (k)(7). Evaluation records used to determine
potential for promotion in the armed services, but only if disclosure
would reveal the identity of a confidential source.
(h) Records of other agencies Any Agency record system which
contains information originated by another agency whose record system
is exempt from certain provisions of the Act will not be disclosed by
USIA. (See Sec. 505.13, General Exemptions.)
Sec. 505.15 Exempt systems of records used.
USIA is authorized to use exemptions (k)(1), (k)(2), (k)(4),
(k)(5), and (k)(6). The following Agency components currently maintain
exempt systems of records under one or more of these specific
exemptions: Executive Secretariat; Educational and Cultural Exchange
Program; Legal Files; Privacy Act and Freedom of Information Act Files;
Employee Grievance Files; Recruitment Records; Employee Master
Personnel Records; Foreign Service Selection Board Files; Employee
Training Files; Personnel Security and Integrity Records; International
Broadcasting Bureau Director's Executive Secretariat Files; and
International Broadcasting Bureau Employee Personnel Files. (See
Appendix I--Prefatory Statement of General Routine Uses, 55 FR 31977,
Aug. 6, 1990.)
Les Jin,
General Counsel.
[FR Doc. 96-24783 Filed 9-27-96; 8:45 am]
BILLING CODE 8230-01-M
Complete official Federal Register PDF
FR Doc. 96-24654 Airworthiness Directives; Airbus Model A300 Series Airplanes
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 50988-50990]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24654]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
14 CFR Part 39
[Docket No. 92-NM-225-AD; Amendment 39-9768; AD 96-20-02]
RIN 2120-AA64
Airworthiness Directives; Airbus Model A300 Series Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This amendment adopts a new airworthiness directive (AD),
applicable to certain Airbus Model A300 series airplanes, that requires
detailed visual inspections to detect cracking of a certain fuselage
frame, and repair, if necessary. This AD also provides for an optional
terminating action for the repetitive inspections. This amendment is
prompted by reports of a fatigue crack found initiating at hole ``I''
of frame 47 on two of these airplanes. The actions specified by this AD
are intended to prevent such fatigue cracking, which could result in
reduced structural integrity of the airplane.
DATES: Effective November 4, 1996.
The incorporation by reference of certain publications listed in
the regulations is approved by the Director of the Federal Register as
of November 4, 1996.
ADDRESSES: The service information referenced in this AD may be
obtained from Airbus Industrie, 1 Rond Point Maurice Bellonte, 31707
Blagnac Cedex, France. This information may be examined at the Federal
Aviation Administration (FAA), Transport Airplane Directorate, Rules
Docket,
[[Page 50989]]
1601 Lind Avenue, SW., Renton, Washington; or at the Office of the
Federal Register, 800 North Capitol Street, NW., suite 700, Washington,
DC.
FOR FURTHER INFORMATION CONTACT: Phil Forde, Aerospace Engineer,
Standardization Branch, ANM-113, FAA, Transport Airplane Directorate,
1601 Lind Avenue, SW., Renton, Washington 98055-4056; telephone (206)
227-2146; fax (206) 227-1149.
SUPPLEMENTARY INFORMATION: A proposal to amend part 39 of the Federal
Aviation Regulations (14 CFR part 39) to include an airworthiness
directive (AD) that is applicable to certain Airbus Model A320 series
airplanes was published in the Federal Register on April 12, 1993 (58
FR 19068). That action proposed to require detailed visual inspections
to detect cracking of a certain fuselage frame, and repair, if
necessary. That action also proposed to provide for an optional
terminating action for the repetitive inspection requirements.
Interested persons have been afforded an opportunity to participate
in the making of this amendment. Due consideration has been given to
the comments received.
Support for the Proposal
Two commenters support the proposed rule.
Request to Revise the Applicability of the Proposed Rule
One commenter requests that the applicability of paragraphs (a)(2)
and (a)(3) of the proposal be revised to include Model A300 B4-120, B4-
220, C4-203, and F4-203 series airplanes. The FAA does not concur. As
of the effective date of this AD, those models are not type
certificated for operation in the United States; further, the FAA
cannot assume continued airworthiness responsibilities (via AD action)
for airplanes that do not have a U.S. Type Certificate.
Request to Withdraw Proposed Rule
The same commenter states that, since issuance of the NPRM, Airbus
has issued Revision 3 of Airbus A300 Service Bulletin 53-265. The
commenter points out that this revision no longer contains the
inspection of the rear spar 47 lower flange at holes ``H'' and ``I'',
as specified in Revision 2 of that service bulletin. This inspection
has been transferred to Airbus Service Bulletin A300-53-299. The
commenter also points out that Service Bulletin A300-53-299 cancels and
supersedes Airbus Industrie All Operators Telex (AOT) 53-02, dated
November 2, 1992 . (AOT 53-02 and Revision 2 of Service Bulletin 53-265
are referenced in this AD as the appropriate source of service
information.) The commenter also states that Revision 3 of Service
Bulletin 53-265 has been incorporated in Revision 2 of the Airbus
Industrie A300 Supplemental Structural Inspection Document (SSID); the
procedures specified in the SSID are currently required by AD 96-13-11,
amendment 39-9679 (61 FR 35122, July 5, 1996).
From this comment the FAA infers that the commenter is requesting
that the proposed AD be withdrawn. The FAA does not concur. The FAA
acknowledges that the procedures specified in Revision 3 of Service
Bulletin 53-265 and Service Bulletin A300-53-299 are incorporated in
the Airbus A300 SSID. However, AD 96-13-11, which mandates the SSID
program for U.S. operators, provides a ``grace period'' of one year to
incorporate the SSID into the operator's maintenance program; the
``grace period'' effectively delays initiation of the inspections by at
least that amount of time. Additionally, Airbus Service Bulletin A300-
53-299 recommends inspection compliance times with additional ``grace
periods'' for affected airplanes that have surpassed the number of
flight cycles at which cracking is likely to initiate. Several
airplanes already have accumulated as much as 8,000 flight cycles above
that flight cycle threshold. In light of these items, and in
consideration of the amount of time that has already elapsed since
issuance of the original notice, the FAA has determined that the
inspections required by this AD must be initiated as soon as
practicable (as specified in the AD), and that further delay of this
final rule action is not appropriate.
New Relevant Service Information
Since issuance of the NPRM, Airbus has issued Service Bulletin
A300-53-299, dated December 14, 1993. The rototest inspection in this
service bulletin is identical to that described in Airbus Service
Bulletin 53-265, Revision 1, dated March 10, 1992 (which was referenced
in the NPRM as the appropriate source of service information).
Therefore, the FAA has revised paragraph (d) of the final rule to
include reference to Service Bulletin A300-53-299 as an additional
source of service information for accomplishing the optional rototest
inspection.
Additionally, the FAA has determined that the crack repair
procedures specified in Airbus Service Bulletin A300-53-299, dated
December 14, 1993, and in Airbus Service Bulletin 53-265, Revision 1,
dated March 10, 1992, are appropriate for repair cracks found during
the visual inspection(s) required by paragraph (a) and (b). The FAA has
revised paragraph (c) of the final rule to indicate this.
Conclusion
After careful review of the available data, including the comments
noted above, the FAA has determined that air safety and the public
interest require the adoption of the rule with the changes previously
described. The FAA has determined that this change will neither
increase the economic burden on any operator nor increase the scope of
the AD.
Cost Impact
The FAA estimates that 20 airplanes of U.S. registry will be
affected by this AD, that it will take approximately 10 work hours per
airplane to accomplish the required actions, and that the average labor
rate is $60 per work hour. Based on these figures, the cost impact of
the AD on U.S. operators is estimated to be $12,000, or $600 per
airplane.
The cost impact figure discussed above is based on assumptions that
no operator has yet accomplished any of the requirements of this AD
action, and that no operator would accomplish those actions in the
future if this AD were not adopted.
The FAA has recently reviewed the figures it has used over the past
several years in calculating the economic impact of AD activity. In
order to account for various inflationary costs in the airline
industry, the FAA has determined that it is necessary to increase the
labor rate used in these calculations from $55 per work hour to $60 per
work hour. The economic impact information, below, has been revised to
reflect this increase in the specified hourly labor rate.
Regulatory Impact
The regulations adopted herein will not have substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, in
accordance with Executive Order 12612, it is determined that this final
rule does not have sufficient federalism implications to warrant the
preparation of a Federalism Assessment.
For the reasons discussed above, I certify that this action (1) is
not a ``significant regulatory action'' under Executive Order 12866;
(2) is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979); and (3)
[[Page 50990]]
will not have a significant economic impact, positive or negative, on a
substantial number of small entities under the criteria of the
Regulatory Flexibility Act. A final evaluation has been prepared for
this action and it is contained in the Rules Docket. A copy of it may
be obtained from the Rules Docket at the location provided under the
caption ADDRESSES.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.
Adoption of the Amendment
Accordingly, pursuant to the authority delegated to me by the
Administrator, the Federal Aviation Administration amends part 39 of
the Federal Aviation Regulations (14 CFR part 39) as follows:
PART 39--AIRWORTHINESS DIRECTIVES
1. The authority citation for part 39 continues to read as follows:
Authority: 49 U.S.C. 106(g), 40113, 44701.
Sec. 39.13 [Amended]
2. Section 39.13 is amended by adding the following new
airworthiness directive:
96-20-02 Airbus Industrie: Amendment 39-9768. Docket 92-NM-225-AD.
Applicability: Model A300 B2-1C, B2K-3C, B2-203, B4-2C, and B4-
103, series airplanes, on which Modification 2626 has not been
installed; certificated in any category.
Note 1: This AD applies to each airplane identified in the
preceding applicability provision, regardless of whether it has been
modified, altered, or repaired in the area subject to the
requirements of this AD. For airplanes that have been modified,
altered, or repaired so that the performance of the requirements of
this AD is affected, the owner/operator must request approval for an
alternative method of compliance in accordance with paragraph (e) of
this AD. The request should include an assessment of the effect of
the modification, alteration, or repair on the unsafe condition
addressed by this AD; and, if the unsafe condition has not been
eliminated, the request should include specific proposed actions to
address it.
Compliance: Required as indicated, unless accomplished
previously.
To prevent fatigue cracking, which could result in reduced
structural integrity of the airplane, accomplish the following:
(a) Perform a detailed visual inspection to detect cracking of
the fuselage, frame 47 at hole ``I'', in accordance with Airbus All
Operator Telex (AOT) 53-02, dated November 2, 1992, at the times
specified in paragraphs (a)(1), (a)(2), or (a)(3), as applicable.
(1) For Model A300 B2-1C, B2K-3C, and B2-203 series airplanes:
Perform the inspection prior to the accumulation of 15,000 total
landings, or within 50 landings after the effective date of this AD,
whichever occurs later.
(2) For Model A300 B4-2C and B4-103 series airplanes: Perform
the inspection prior to the accumulation of 18,700 total landings,
or within 50 landings after the effective date of this AD, whichever
occurs later.
(3) For Model A300 B4-203 series airplanes: Perform the
inspection prior to the accumulation of 14,100 total landings, or
within 50 landings after the effective date of this AD, whichever
occurs later.
(b) If no crack is detected during the inspection required by
paragraph (a) of this AD, repeat the detailed visual inspection at
intervals not to exceed 200 landings.
(c) If a crack is detected during any inspection required by
paragraph (a) or (b) of this AD, prior to further flight, repair in
accordance with either paragraph (c)(1), (c)(2), or (c)(3) of this
AD:
(1) Repair in accordance with a method approved by the Manager,
Standardization Branch, ANM-113, FAA, Transport Airplane
Directorate; or
(2) Repair in accordance with crack repair procedures specified
in Airbus A300 Service Bulletin 53-265, Revision 2, dated March 10,
1992; or
(3) Repair in accordance with crack repair procedures specified
in Airbus Service Bulletin A300-53-299, dated December 14, 1993.
(d) Conducting a repetitive Rototest inspection of hole ``I'' in
accordance with Airbus A300 Service Bulletin 53-265, Revision 2,
dated March 10, 1992, or Airbus Service Bulletin A300-53-299, dated
December 14, 1993, constitutes terminating action for the detailed
visual inspections required by this AD. If any crack is found, prior
to further flight, repair it in accordance with that service
bulletin.
(e) An alternative method of compliance or adjustment of the
compliance time that provides an acceptable level of safety may be
used if approved by the Manager, Standardization Branch, ANM-113,
FAA, Transport Airplane Directorate. Operators shall submit their
requests through an appropriate FAA Principal Maintenance Inspector,
who may add comments and then send it to the Manager,
Standardization Branch, ANM-113.
Note 2: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the Standardization Branch, ANM-113.
(f) Special flight permits may be issued in accordance with
sections 21.197 and 21.199 of the Federal Aviation Regulations (14
CFR 21.197 and 21.199) to operate the airplane to a location where
the requirements of this AD can be accomplished.
(g) The visual inspection shall be done in accordance with
Airbus All Operator Telex (AOT) 53-02, dated November 2, 1992. This
incorporation by reference was approved by the Director of the
Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part
51. Copies may be obtained from Airbus Industrie, 1 Rond Point
Maurice Bellonte, 31707 Blagnac Cedex, France. Copies may be
inspected at the FAA, Transport Airplane Directorate, 1601 Lind
Avenue, SW., Renton, Washington; or at the Office of the Federal
Register, 800 North Capitol Street, NW., suite 700, Washington, DC.
(h) This amendment becomes effective on November 4, 1996.
Issued in Renton, Washington, on September 19, 1996.
Darrell M. Pederson,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 96-24654 Filed 9-27-96; 8:45 am]
BILLING CODE 4910-13-U
Complete official Federal Register PDF
FR Doc. 96-24653 Airworthiness Directives; de Havilland Model DHC-8-100 and -300 Series Airplanes
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 50990-50992]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24653]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
14 CFR Part 39
[Docket No. 95-NM-72-AD; Amendment 39-9769; AD 96-20-03]
RIN 2120-AA64
Airworthiness Directives; de Havilland Model DHC-8-100 and -300
Series Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This amendment supersedes an existing airworthiness directive
(AD), applicable to all de Havilland DHC-8-100 and -300 series
airplanes, that currently requires repetitive inspections to detect
loose bolts at the retract actuator support fitting of the main landing
gear, and various follow-on actions, if necessary. That AD was prompted
by a report of loose actuator supporting bolts and cracks in the relief
radius of the boss at the forward surface of the fittings. This
amendment adds a requirement to install a new modification, which, when
accomplished, terminates the repetitive inspections. The actions
specified by this AD are intended to prevent loss of hydraulic systems
and reduced controllability of the airplane due to loose actuator
support bolts or cracks in the relief radius of the boss at the forward
surface of the fittings.
DATES: Effective November 4, 1996.
The incorporation by reference of certain publications listed in
the regulations is approved by the Director of the Federal Register as
of Novmeber 4, 1996.
ADDRESSES: The service information referenced in this AD may be
obtained from Bombardier, Inc., Bombardier Regional Aircraft Division,
Garratt Boulevard, Downsview, Ontario, Canada M3K 1Y5. This information
may be examined at the Federal Aviation Administration (FAA), Transport
Airplane Directorate, Rules Docket, 1601 Lind Avenue, SW., Renton,
[[Page 50991]]
Washington; or at the FAA, New York Aircraft Certification Office,
Engine and Propeller Directorate, 10 Fifth Street, Third Floor, Valley
Stream, New York; or at the Office of the Federal Register, 800 North
Capitol Street, NW., suite 700, Washington, DC.
FOR FURTHER INFORMATION CONTACT: Jon Hjelm, Aerospace Engineer,
Airframe and Propulsion Branch, ANE-173, FAA, New York Aircraft
Certification Office, Engine and Propeller Directorate, 10 Fifth
Street, Third Floor, Valley Stream, New York 11581; telephone (516)
256-7523; fax (516) 568-2716.
SUPPLEMENTARY INFORMATION: A proposal to amend part 39 of the Federal
Aviation Regulations (14 CFR part 39) by superseding AD 91-20-12,
amendment 39-8046 (56 FR 47901, September 23, 1991), which is
applicable to all deHavilland DHC-8-100 and -300 series airplanes, was
published in the Federal Register on July 16, 1996 (61 FR 37019). The
action proposed to supersede AD 91-20-12 to continue to require
repetitive inspections to detect loose bolts at the retract actuator
support fitting of the main landing gear (MLG); and, if necessary, to
require a magnetic particle inspection, replacement of loose bolts, and
replacement of cracked fittings. In addition, the action proposed to
require modification of the frame and the retraction actuator fitting
of the MLG, which would constitute terminating action for the
repetitive inspection requirements. The action also proposed to revise
to revise the applicability of the existing AD.
Interested persons have been afforded an opportunity to participate
in the making of this amendment. No comments were submitted in response
to the proposal or the FAA's determination of the cost to the public.
Conclusion
The FAA has determined that air safety and the public interest
require the adoption of the rule as proposed.
Cost Impact
There are approximately 125 de Havilland Model DHC-8-100 and -300
series airplanes of U.S. registry that will be affected by this
proposed AD.
The actions that are currently required by AD 91-20-12, and
retained in this AD, take approximately 1 work hour per airplane to
accomplish, at an average labor rate of $60 per work hour. Based on
these figures, the cost impact on U.S. operators of the actions
currently required is estimated to be $7,500, or $60 per airplane.
The installation of modified brackets with new fasteners that is
required by this AD will take approximately 10 work hours per airplane
to accomplish, at an average labor rate of $60 per work hour. Required
parts will cost approximately $3,500 per airplane. Based on these
figures, the cost impact of the installation required on U.S. operators
is estimated to be $512,500, or $4,100 per airplane.
The removal of the enamel application (Modification 8/1830) that is
required by this AD will take approximately 5 work hours per airplane
to accomplish, at an average labor rate of $60 per work hour. Based on
these figures, the cost impact on U.S. operators of the enamel removed
required of this AD is estimated to be $37,500, or $300 per airplane.
The cost impact figures discussed above are based on assumptions
that no operator has yet accomplished any of the requirements of this
AD action, and that no operator would accomplish those actions in the
future if this AD were not adopted.
Regulatory Impact
The regulations adopted herein will not have substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, in
accordance with Executive Order 12612, it is determined that this final
rule does not have sufficient federalism implications to warrant the
preparation of a Federalism Assessment.
For the reasons discussed above, I certify that this action (1) is
not a ``significant regulatory action'' under Executive Order 12866;
(2) is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979); and (3) will not have a
significant economic impact, positive or negative, on a substantial
number of small entities under the criteria of the Regulatory
Flexibility Act. A final evaluation has been prepared for this action
and it is contained in the Rules Docket. A copy of it may be obtained
from the Rules Docket at the location provided under the caption
ADDRESSES.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.
Adoption of the Amendment
Accordingly, pursuant to the authority delegated to me by the
Administrator, the Federal Aviation Administration amends part 39 of
the Federal Aviation Regulations (14 CFR part 39) as follows:
PART 39--AIRWORTHINESS DIRECTIVES
1. The authority citation for part 39 continues to read as follows:
Authority: 49 U.S.C. 106(g), 40113, 44701.
Sec. 39.13 [Amended]
2. Section 39.13 is amended by removing amendment 39-8046 (56 FR
47901, September 23, 1991), and by adding a new airworthiness directive
(AD), amendment 39-9769, to read as follows:
96-20-03 de Havilland, Inc.: Amendment 39-9769. Docket 95-NM-72-AD.
Supersedes AD 91-20-12, Amendment 39-8046.
Applicability: Model DHC-8-100 and -300 series airplanes, serial
numbers 3 through 400 inclusive, except serial number 391;
certificated in any category.
Note 1: This AD applies to each airplane identified in the
preceding applicability provision, regardless of whether it has been
otherwise modified, altered, or repaired in the area subject to the
requirements of this AD. For airplanes that have been modified,
altered, or repaired so that the performance of the requirements of
this AD is affected, the owner/operator must request approval for an
alternative method of compliance in accordance with paragraph (d) of
this AD. The request should include an assessment of the effect of
the modification, alteration, or repair on the unsafe condition
addressed by this AD; and, if the unsafe condition has not been
eliminated, the request should include specific proposed actions to
address it.
Compliance: Required as indicated, unless accomplished
previously.
To prevent loss of hydraulic systems and reduced controllability
of the airplane due to loose actuator support bolts or cracks in the
relief radius of the boss at the forward surface of the fittings,
accomplish the following:
(a) For Model DHC-8-100 series airplanes: Within 24 hours after
September 9, 1991 (the effective date of AD 91-15-51, amendment 39-
8016), inspect the three actuator attachment fitting bolts on the
right- and left-hand main landing gears (MLG) to detect loose bolts
by applying a torque of not less than 10 foot-pounds to each bolt.
(1) If no loose bolt is found as a result of the inspection
required by paragraph (a) of this AD, repeat this inspection
thereafter at intervals not to exceed 500 landings.
(2) If any loose bolt is found as a result of the inspection
required by paragraph (a) of this AD, accomplish paragraphs
(a)(2)(i), (a)(2)(ii), and (a)(2)(iii) of this AD.
(i) Prior to further flight, replace the loose bolt with a new
bolt of the same part number.
(ii) Within 250 landings after October 7, 1991 (the effective
date of 91-20-12, amendment 39-8046) accomplish paragraphs
(a)(2)(ii)(A) and (a)(2)(ii)(B) of this AD.
(A) Remove the associated support fitting having part number (P/
N) 85410084.
[[Page 50992]]
(B) Perform a magnetic particle inspection to detect cracks
throughout the fitting, paying particular attention to the relief
radius at the forward surface boss. If any crack is detected as a
result of this inspection, prior to further flight, replace the
fitting with a serviceable part.
(iii) Repeat the inspection required by paragraph (a) of this AD
thereafter at intervals not to exceed 500 landings.
(b) For Model DHC-8-300 series airplanes: Within 250 landings
after October 7, 1991 (the effective date of AD 91-20-12, amendment
39-8046), inspect the three actuator attachment fitting bolts on the
right- and left-hand ML's to detect loose bolts by applying a torque
of not less than 10 foot-pounds to each bolt.
(1) If no loose bolt is found as a result of the inspection
required by paragraph (b) of this AD, repeat this inspection
thereafter at intervals not to exceed 500 landings.
(2) If any loose bolt is found as a result of the inspection
required by paragraph (a) of this AD, accomplish paragraphs
(b)(2)(i), (b)(2)(ii), and (b)(2)(iii) of this AD.
(i) Prior to further flight, replace the loose bolt with a new
bolt of the same part number.
(ii) Within 250 landings after October 7, 1991 (the effective
date of AD 91-20-12, amendment 39-8046), accomplish (b)(2)(ii)(A)
and (b)(2)(ii)(B) of this AD.
(A) Remove the associated support fitting (P/N 85410084 for
Model DHC-8-301 airplanes, and P/N 85411701 for Model DHC-8-311
airplanes).
(B) Perform a magnetic particle inspection to detect cracks
throughout the fitting, pay particular attention to the relief
radius at the forward surface boss. If any crack is detected as a
result of this inspection, prior to further flight, replace the
fitting with a serviceable part.
(iii) Repeat the inspection required by paragraph (b) of this AD
thereafter at intervals not to exceed 500 landings.
(c) Within 90 days after the effective date of this AD,
accomplish paragraphs (c)(1) and (c)(2), as applicable, of this AD.
Accomplishment of this paragraph constitutes terminating action for
the inspections required by paragraphs (a) and (b) of this AD.
(1) For Model DHC-8-100 and -300 series airplanes, having serial
numbers 3 through 400 inclusive, except serial number 391: Modify
the frame and the retraction actuator fitting of the MLG, in
accordance with de Havilland Service Bulletin S.B. 8-54-34, Revision
`A', dated July 21, 1995.
(2) For Model DHC-8-100 and -300 series airplanes, having serial
number 3 through 332 inclusive: Modify the retraction actuator
fitting of the MLG, in accordance with de Havilland Service Bulletin
S.B. 8-54-27, Revision AD, dated August 22, 1994.
(d) An alternative method of compliance or adjustment of the
compliance time that provides an acceptable level of safety may be
used if approved by the Manager, New York Aircraft Certification
Office (ACO), FAA, Engine and Propeller Directorate. Operators shall
submit their requests through an appropriate FAA Principal
Maintenance Inspector, who may add comments and then send it to the
Manager, New York ACO.
Note 2: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the New York ACO.
(e) Special flight permits may be issued in accordance with
sections 21.197 and 21.199 of the Federal Aviation Regulations (14
CFR 21.197 and 21.199) to operate the airplane to a location where
the requirements of this AD can be accomplished.
(f) The modifications shall be done in accordance with de
Havilland Service Bulletin S.B. 8-54-34, Revision `A', dated July
21, 1995; and de Havilland Service Bulletin S.B. 8-54-27, Revision
`B', dated August 22, 1994, as applicable. This incorporation by
reference was approved by the Director of the Federal Register in
accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies may be
obtained from Bombardier, Inc., Bombardier Regional Aircraft
Division, Garratt Boulevard, Downsview, Ontario, Canada M3K 1Y5.
Copies may be inspected at the FAA, Transport Airplane Directorate,
1601 Lind Avenue, SW., Renton, Washington; or at the FAA, New York
Aircraft Certification Office, Engine and Propeller Directorate, 10
Fifth Street, Third Floor, Valley Stream, New York; or at the Office
of the Federal Register, 800 North Capitol Street, NW., suite 700,
Washington, DC.
(g) This amendment becomes effective on November 4, 1996.
Issued in Renton, Washington, on September 19, 1996.
Darrell M. Pederson,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 96-24653 Filed 9-27-96; 8:45 am]
BILLING CODE 4910-13-U
Complete official Federal Register PDF
FR Doc. 96-24652 Airworthiness Directives; Fokker Model F28 Mark 1000, 2000, 3000, and 4000 Series Airplanes
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 50992-50994]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24652]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
14 CFR Part 39
[Docket No. 95-NM-152-AD; Amendment 39-9770; AD 96-20-04]
RIN 2120-AA64
Airworthiness Directives; Fokker Model F28 Mark 1000, 2000, 3000,
and 4000 Series Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This amendment adopts a new airworthiness directive (AD),
applicable to all Fokker Model F28 Mark 1000, 2000, 3000, and 4000
series airplanes, that requires modification of the passenger door lock
warning system. This amendment is prompted by reports that the
passenger door opened during flight due to an improperly locked door;
additionally, the door warning signal was not sufficiently visible to
alert the flight crew of this condition. The actions specified by this
AD are intended to ensure that the flight crew is aware of an unlocked
passenger door prior to takeoff of the airplane. This condition, if not
corrected, could result in inadvertent opening of the passenger door
while the airplane is in flight.
DATES: Effective November 4, 1996.
The incorporation by reference of certain publications listed in
the regulations is approved by the Director of the Federal Register as
of November 4, 1996.
ADDRESSES: The service information referenced in this AD may be
obtained from Fokker Aircraft USA, Inc., 1199 North Fairfax Street,
Alexandria, Virginia 22314. This information may be examined at the
Federal Aviation Administration (FAA), Transport Airplane Directorate,
Rules Docket, 1601 Lind Avenue, SW., Renton, Washington; or at the
Office of the Federal Register, 800 North Capitol Street, NW., suite
700, Washington, DC.
FOR FURTHER INFORMATION CONTACT: Tim Dulin, Aerospace Engineer,
Standardization Branch, ANM-113, FAA, Transport Airplane Directorate,
1601 Lind Avenue, SW., Renton, Washington 98055-4056; telephone (206)
227-2141; fax (206) 227-1149.
SUPPLEMENTARY INFORMATION: A proposal to amend part 39 of the Federal
Aviation Regulations (14 CFR part 39) to include an airworthiness
directive (AD) that is applicable to all Fokker Model F28 Mark 1000,
2000, 3000, and 4000 series airplanes was published in the Federal
Register on April 4, 1996 (61 FR 15002). That action proposed to
require modification of the passenger door lock warning system.
Interested persons have been afforded an opportunity to participate
in the making of this amendment. Due consideration has been given to
the comments received.
Support for the Proposal
One commenter supports the proposed rule.
Request for Guidance Prior to Modification
A second commenter supports the proposed compliance times. However,
this commenter suggests that the manufacturer provide all affected
operators with specific guidance for use during the period prior to
implementation of the modification. The commenter notes that this may
entail special preflight inspections or equipment operation. The
commenter makes this suggestion due to the high significance of a
failure that could occur prior to the time accomplishment of the
modification is required.
The FAA agrees with the commenter's suggestion that additional
guidance or
[[Page 50993]]
procedures may be useful to operators prior to accomplishment of the
modification to ensure that passenger doors are closed properly prior
to takeoff. The FAA has forwarded this suggestion to the manufacturer
to determine if any additional information may be disseminated to
operators in the interim to aid in avoidance of the addressed unsafe
condition. However, the FAA does not intend to require interim action
in this final rule.
Therefore, no change to the final rule is necessary.
Conclusion
After careful review of the available data, including the comments
noted above, the FAA has determined that air safety and the public
interest require the adoption of the rule as proposed.
Cost Impact
The FAA estimates that 37 Fokker Model F28 Mark 1000, 2000, 3000,
and 4000 series airplanes of U.S. registry will be affected by this AD,
that it will take approximately 22 work hours per airplane to
accomplish the required actions, and that the average labor rate is $60
per work hour. Required parts will cost approximately $865 per
airplane. Based on these figures, the cost impact of the AD on U.S.
operators is estimated to be $80,845, or $2,185 per airplane.
The cost impact figure discussed above is based on assumptions that
no operator has yet accomplished any of the requirements of this AD
action, and that no operator would accomplish those actions in the
future if this AD were not adopted.
Regulatory Impact
The regulations adopted herein will not have substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, in
accordance with Executive Order 12612, it is determined that this final
rule does not have sufficient federalism implications to warrant the
preparation of a Federalism Assessment.
For the reasons discussed above, I certify that this action (1) is
not a ``significant regulatory action'' under Executive Order 12866;
(2) is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979); and (3) will not have a
significant economic impact, positive or negative, on a substantial
number of small entities under the criteria of the Regulatory
Flexibility Act. A final evaluation has been prepared for this action
and it is contained in the Rules Docket. A copy of it may be obtained
from the Rules Docket at the location provided under the caption
ADDRESSES.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.
Adoption of the Amendment
Accordingly, pursuant to the authority delegated to me by the
Administrator, the Federal Aviation Administration amends part 39 of
the Federal Aviation Regulations (14 CFR part 39) as follows:
PART 39--AIRWORTHINESS DIRECTIVES
1. The authority citation for part 39 continues to read as follows:
Authority: 49 U.S.C. 106(g), 40113, 44701.
Sec. 39.13 [Amended]
2. Section 39.13 is amended by adding the following new
airworthiness directive:
96-20-04 Fokker: Amendment 39-9770. Docket 95-NM-152-AD.
Applicability: All Model F28 Mark 1000, 2000, 3000, and 4000
series airplanes, certificated in any category.
Note 1: This AD applies to each airplane identified in the
preceding applicability provision, regardless of whether it has been
otherwise modified, altered, or repaired in the area subject to the
requirements of this AD. For airplanes that have been modified,
altered, or repaired so that the performance of the requirements of
this AD is affected, the owner/operator must request approval for an
alternative method of compliance in accordance with paragraph (b) of
this AD. The request should include an assessment of the effect of
the modification, alteration, or repair on the unsafe condition
addressed by this AD; and, if the unsafe condition has not been
eliminated, the request should include specific proposed actions to
address it.
Compliance: Required as indicated, unless accomplished
previously.
To prevent inadvertent opening of the passenger door while the
airplane is in flight, accomplish the following:
(a) Modify the passenger door lock warning system at the time
specified in paragraph (a)(1) or (a)(2) of this AD, as applicable.
(1) For airplanes in post-Fokker Service Bulletin F28/52-72
configuration: Accomplish the modification within 9 months after the
effective date of this AD, in accordance with Fokker Service
Bulletin F28/52-101, Revision 1, dated August 24, 1992.
(2) For airplanes in pre-Fokker Service Bulletin F28/52-72
configuration: Accomplish the modification within 1,500 landings
after the effective date of this AD, in accordance with Fokker
Service Bulletin F28/52-112, dated February 1, 1995.
(b) An alternative method of compliance or adjustment of the
compliance time that provides an acceptable level of safety may be
used if approved by the Manager, Standardization Branch, ANM-113,
FAA, Transport Airplane Directorate. Operators shall submit their
requests through an appropriate FAA Principal Maintenance Inspector,
who may add comments and then send it to the Manager,
Standardization Branch, ANM-113.
Note 2: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the Standardization Branch, ANM-113.
(c) Special flight permits may be issued in accordance with
sections 21.197 and 21.199 of the Federal Aviation Regulations (14
CFR 21.197 and 21.199) to operate the airplane to a location where
the requirements of this AD can be accomplished.
(d) The modification shall be done in accordance with the
following Fokker service bulletins, as applicable, which contain the
specified effective pages:
----------------------------------------------------------------------------------------------------------------
Revision level shown on
Service bulletin referenced and date Page page Date shown on page
----------------------------------------------------------------------------------------------------------------
F28/52-101, Revision 1, August 24, 1992 1-6 1....................... August 24, 1992.
7-13 Original................ November 1, 1988.
F28/52-112, February 1, 1995........... 1-16 Original................ February 1, 1995.
----------------------------------------------------------------------------------------------------------------
This incorporation by reference was approved by the Director of the
Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51.
Copies may be obtained from Fokker Aircraft USA, Inc., 1199 North
Fairfax Street, Alexandria, Virginia 22314. Copies may be inspected at
the FAA, Transport Airplane Directorate, 1601 Lind
[[Page 50994]]
Avenue, SW., Renton, Washington; or at the Office of the Federal
Register, 800 North Capitol Street, NW., suite 700, Washington, DC.
(e) This amendment becomes effective on November 4, 1996.
Issued in Renton, Washington, on September 19, 1996.
Darrell M. Pederson,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 96-24652 Filed 9-27-96; 8:45 am]
BILLING CODE 4910-13-U
Complete official Federal Register PDF
FR Doc. 96-24651 Airworthiness Directives; Jetstream Model 4101 Airplanes
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 50994-50995]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24651]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
14 CFR Part 39
[Docket No. 96-NM-49-AD; Amendment 39-9772; AD 96-20-06]
RIN 2120-AA64
Airworthiness Directives; Jetstream Model 4101 Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This amendment supersedes an existing airworthiness directive
(AD), applicable to certain Jetstream Model 4101 airplanes, that
currently requires inspection to determine the number of hours time-in-
service on the landing gear control unit, and modification of the cable
(electrical wiring circuit) of the landing gear control unit. That AD
was prompted by a report of failure of a micro-switch in the landing
gear control unit. This amendment requires installation of a new
landing gear control unit. This amendment also expands the
applicability of the existing AD to include additional airplanes. The
actions specified by this AD are intended to prevent uncommanded
retraction of a landing gear, which could adversely affect airplane
controllability.
DATES: Effective November 4, 1996.
The incorporation by reference of Jetstream Service Bulletin J41-
32-044, dated September 22, 1995, listed in the regulations is approved
by the Director of the Federal Register as of November 4, 1996.
The incorporation by reference of Jetstream Alert Service Bulletin
J41-A32-042, dated April 13, 1995 listed in the regulations was
approved previously by the Director of the Federal Register as of June
14, 1995 (60 FR 28035, May 30, 1995).
ADDRESSES: The service information referenced in this AD may be
obtained from Jetstream Aircraft, Inc., P.O. Box 16029, Dulles
International Airport, Washington, DC 20041-6029. This information may
be examined at the Federal Aviation Administration (FAA), Transport
Airplane Directorate, Rules Docket, 1601 Lind Avenue, SW., Renton,
Washington; or at the Office of the Federal Register, 800 North Capitol
Street, NW., suite 700, Washington, DC.
FOR FURTHER INFORMATION CONTACT: William Schroeder, Aerospace Engineer,
Standardization Branch, ANM-113, FAA, Transport Airplane Directorate,
1601 Lind Avenue, SW., Renton, Washington 98055-4056; telephone (206)
227-2148; fax (206) 227-1149.
SUPPLEMENTARY INFORMATION: A proposal to amend part 39 of the Federal
Aviation Regulations (14 CFR part 39) by superseding AD 95-09-03,
amendment 39-9241 (60 FR 28035, May 30, 1995), which is applicable to
certain Jetstream Model 4101 airplanes, was published in the Federal
Register on April 29, 1996 (61 FR 18707). The action proposed to
supersede AD 95-09-03. For those airplanes subject to AD 95-09-03, it
proposed to continue to require an inspection to determine the number
of hours time-in-service on the landing gear control unit, and
modification of the cable (electrical wiring circuit) of the landing
gear control unit. For those airplanes and certain others, it proposed
to require installation of a new improved landing gear control unit.
Interested persons have been afforded an opportunity to participate
in the making of this amendment. Due consideration has been given to
the comments received.
Support for the Proposed Rule
One commenter supports the proposed rule.
Request to Limit Applicability of Proposed Rule
One commenter questions why the proposed rule requires Jetstream
Modification JM41490 (modification of the cable of the landing gear
control unit) to be accomplished on the additional airplanes that have
been included in the applicability of the proposed rule. The commenter
states that this modification was installed on airplanes having
constructor numbers 41052 and subsequent at the manufacturer's facility
prior to delivery. Therefore, those airplanes should not be subject to
the requirement for that modification.
The FAA points out that Modification JM41490 (which is described in
Jetstream Alert Service Bulletin J41-A32-042) is required by AD 95-09-
03 to be accomplished on Model 4101 airplanes having constructor
numbers 41001 through 41046 inclusive, and 41048 through 41052
inclusive. That requirement is specified in paragraph (a) of AD 95-09-
03. Paragraph (a) of this new AD merely restates the requirements of
paragraph (a) of AD 95-09-03. It clearly indicates that it is
applicable only to those same airplanes that were subject to AD 95-09-
03; no new, additional airplanes are subject to the requirements of
that paragraph. Further, airplanes on which those actions have been
performed previously, do not have to be modified in accordance with
that paragraph a second time.
Request to Verify Parts Availability
One commenter states that it has information that the manufacturer
has been unable to produce the landing gear control units at the
originally planned rate. The commenter requests that the FAA verify
with the manufacturer that the landing gear control units required by
paragraph (b) of the proposed rule will be available for installation
within the proposed compliance time of six months.
The FAA has verified with the manufacturer that there should be no
delay in the manufacturing of those parts. Therefore, the compliance
time of six months for this AD will remain unchanged.
Conclusion
After careful review of the available data, including the comments
noted above, the FAA has determined that air safety and the public
interest require the adoption of the rule as proposed.
Cost Impact
There are approximately 44 Jetstream Model 4101 airplanes of U.S.
registry that will be affected by this AD.
The actions that are currently required by AD 95-09-03, and
retained in this AD, take approximately 7 work hours per airplane to
accomplish, at an average labor rate of $60 per work hour. The required
parts are provided by the manufacturer at no cost to the operator.
Based on these figures, the cost impact on U.S. operators of the
actions currently required is estimated to be $18,480, or $420 per
airplane. The FAA has been advised that all affected U.S. operators
have accomplished these requirements; therefore, there is no future
cost impact of these requirements on current U.S. operators of these
airplanes.
The new installation that is required by this new AD will take
approximately 6 work hours per airplane to accomplish, at an average
labor rate of $60 per work hour. Required parts would be provided at no
cost to the operator. Based on these figures, the
[[Page 50995]]
cost impact on U.S. operators of the new requirements of this AD is
estimated to be $15,840, or $360 per airplane. This cost impact figure
is based on assumptions that no operator has yet accomplished this
requirement of this AD action, and that no operator would accomplish
that action in the future if this AD were not adopted.
Regulatory Impact
The regulations adopted herein will not have substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, in
accordance with Executive Order 12612, it is determined that this final
rule does not have sufficient federalism implications to warrant the
preparation of a Federalism Assessment.
For the reasons discussed above, I certify that this action (1) is
not a ``significant regulatory action'' under Executive Order 12866;
(2) is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979); and (3) will not have a
significant economic impact, positive or negative, on a substantial
number of small entities under the criteria of the Regulatory
Flexibility Act. A final evaluation has been prepared for this action
and it is contained in the Rules Docket. A copy of it may be obtained
from the Rules Docket at the location provided under the caption
ADDRESSES.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.
Adoption of the Amendment
Accordingly, pursuant to the authority delegated to me by the
Administrator, the Federal Aviation Administration amends part 39 of
the Federal Aviation Regulations (14 CFR part 39) as follows:
PART 39--AIRWORTHINESS DIRECTIVES
1. The authority citation for part 39 continues to read as follows:
Authority: 49 U.S.C. 106(g), 40113, 44701.
Sec. 39.13 [Amended]
2. Section 39.13 is amended by removing amendment 39-9241 (60 FR
28035, May 30, 1995), and by adding a new airworthiness directive (AD),
amendment 39-9772, to read as follows:
96-20-06 Jetstream Aircraft Limited: Amendment 39-9772. Docket 96-
NM-49-AD. Supersedes AD 95-09-03, Amendment 39-9241.
Applicability: Model 4101 airplanes, constructor numbers 41001
through 41073 inclusive; certificated in any category.
Note 1: This AD applies to each airplane identified in the
preceding applicability provision, regardless of whether it has been
modified, altered, or repaired in the area subject to the
requirements of this AD. For airplanes that have been modified,
altered, or repaired so that the performance of the requirements of
this AD is affected, the owner/operator must request approval for an
alternative method of compliance in accordance with paragraph (d) of
this AD. The request should include an assessment of the effect of
the modification, alteration, or repair on the unsafe condition
addressed by this AD; and, if the unsafe condition has not been
eliminated, the request should include specific proposed actions to
address it.
Compliance: Required as indicated, unless accomplished
previously.
To prevent uncommanded retraction of the landing gear, which can
adversely affect airplane controllability, accomplish the following:
(a) For airplanes having constructor numbers 41001 through 41046
inclusive, and 41048 through 41052 inclusive; equipped with either
landing gear control unit part number 717701-1 or 717701-1 Mod A:
Within 8 hours time-in-service after June 14, 1995 (the effective
date of AD 95-09-03, amendment 39-9241), perform an inspection to
determine the number of hours time-in-service on the landing gear
control unit, in accordance with Jetstream Alert Service Bulletin
J41-A32-042, dated April 13, 1995.
(1) For those airplanes on which the control unit has
accumulated less than 200 hours time-in-service: Prior to further
flight, modify the cable (electrical wiring circuit) of the landing
gear control unit in accordance with the alert service bulletin.
(2) For those airplanes on which the control unit has
accumulated 200 hours or more time-in-service: Within 50 hours time-
in-service or within 7 days after June 14, 1995 (the effective date
of AD 95-09-03, amendment 39-9241), whichever occurs earlier, modify
the cable (electrical wiring circuit) of the landing gear control
unit in accordance with the alert service bulletin.
(b) For airplanes having constructor numbers 41001 through 41073
inclusive: Within 6 months after the effective date of this AD,
install a new improved landing gear control unit and modify the
wiring, in accordance with Jetstream Service Bulletin J41-32-044,
dated September 22, 1995.
(c) As of the effective date of this AD, no person shall install
a landing gear control unit having part number 717701-1 or 717701-1
Mod A, on any airplane.
(d) An alternative method of compliance or adjustment of the
compliance time that provides an acceptable level of safety may be
used if approved by the Manager, Standardization Branch, ANM-113,
FAA, Transport Airplane Directorate. Operators shall submit their
requests through an appropriate FAA Principal Maintenance Inspector,
who may add comments and then send it to the Manager,
Standardization Branch, ANM-113.
Note 2: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the Standardization Branch, ANM-113.
(e) Special flight permits may be issued in accordance with
sections 21.197 and 21.199 of the Federal Aviation Regulations (14
CFR 21.197 and 21.199) to operate the airplane to a location where
the requirements of this AD can be accomplished.
(f) The inspection and modification shall be done in accordance
with Jetstream Alert Service Bulletin J41-A32-042, dated April 13,
1995. The installation shall be done in accordance with Jetstream
Service Bulletin J41-32-044, dated September 22, 1995. The
incorporation by reference of Jetstream Alert Service Bulletin J41-
A32-042, dated April 13, 1995, was approved previously by the
Director of the Federal Register in accordance with 5 U.S.C. 552(a)
and 1 CFR part 51 as of June 14, 1995 (60 FR 28035, May 30, 1995).
The incorporation by reference of Jetstream Service Bulletin J41-32-
044, dated September 22, 1995, was approved by the Director of the
Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part
51. Copies may be obtained from Jetstream Aircraft, Inc., P.O. Box
16029, Dulles International Airport, Washington, DC 20041-6029.
Copies may be inspected at the FAA, Transport Airplane Directorate,
1601 Lind Avenue, SW., Renton, Washington; or at the Office of the
Federal Register, 800 North Capitol Street, NW., suite 700,
Washington, DC.
(g) This amendment becomes effective on November 4, 1996.
Issued in Renton, Washington, on September 19, 1996.
Darrell M. Pederson,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 96-24651 Filed 9-27-96; 8:45 am]
BILLING CODE 4910-13-U
Complete official Federal Register PDF
FR Doc. 96-24650 Airworthiness Directives; Boeing Model 767 Series Airplanes
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 50995-50999]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24650]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
14 CFR Part 39
[Docket No. 95-NM-203-AD; Amendment 39-9771; AD 96-20-05]
RIN 2120-AA64
Airworthiness Directives; Boeing Model 767 Series Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This amendment adopts a new airworthiness directive (AD),
applicable to all Boeing Model 767 series airplanes, that requires
repetitive operational tests to verify proper deployment of the ram air
turbine
[[Page 50996]]
(RAT), and replacement of the rotary actuator motor with a new or
serviceable rotary actuator motor, if necessary. This amendment is
prompted by reports of corroded rotary actuator motors of the RAT found
on in-service airplanes. The actions specified by this AD are intended
to ensure that the RAT actuator motor is not corroded to the point
where it may result in the failure of the RAT to deploy and
subsequently result in loss of emergency hydraulic power to the flight
controls in the event that power is lost in both engines.
DATES: Effective November 4, 1996.
The incorporation by reference of certain publications listed in
the regulations is approved by the Director of the Federal Register as
of November 4, 1996.
ADDRESSES: The service information referenced in this AD may be
obtained from Boeing Commercial Airplane Group, P.O. Box 3707, Seattle,
Washington 98124-2207. This information may be examined at the Federal
Aviation Administration (FAA), Transport Airplane Directorate, Rules
Docket, 1601 Lind Avenue, SW., Renton, Washington; or at the Office of
the Federal Register, 800 North Capitol Street, NW., suite 700,
Washington, DC.
FOR FURTHER INFORMATION CONTACT: Sheila Kirkwood, Aerospace Engineer,
Systems and Equipment Branch, ANM-130S, FAA, Seattle Aircraft
Certification Office, 1601 Lind Avenue, SW., Renton, Washington;
telephone (206) 227-2675; fax (206) 227-1181.
SUPPLEMENTARY INFORMATION: A proposal to amend part 39 of the Federal
Aviation Regulations (14 CFR part 39) to include an airworthiness
directive (AD) that is applicable to all Boeing Model 767 series
airplanes was published in the Federal Register on March 21, 1996 (61
FR 11593). That action proposed to require repetitive operational tests
to verify proper deployment of the ram air turbine (RAT) system, and
replacement of the rotary actuator motor with a new or serviceable
rotary actuator motor, if necessary.
Interested persons have been afforded an opportunity to participate
in the making of this amendment. Due consideration has been given to
the comments received.
Support for the Proposal
One commenter supports the proposed rule.
Request To Revise Unsafe Condition Finding
One commenter, Boeing Commercial Airplane Group, requests that
certain language that appeared in the preamble to the notice, which
referred to the FAA's finding of an unsafe condition, be revised.
Specifically, the commenter requests that the wording be changed to
state that the addressed unsafe condition ``could exist,'' rather than
is ``likely to exist'' [on other airplanes of this same type design].
The commenter gives no particular justification for this request;
however, the FAA infers that, by changing this wording as suggested,
the commenter seeks to minimize the adverse implication regarding the
safety of its products.
The FAA does not concur. The phrasing used in that discussion is
not accidental. Part 39.1, ``Applicability,'' of the Federal Aviation
Regulations (FAR) (14 CFR 39.1) states:
This part prescribes airworthiness directives that apply to
aircraft * * * when--
(a) An unsafe condition exists in a product; and
(b) That condition is likely to exist or develop in other
products of the same type design.''
Therefore, the finding that the condition is ``likely to exist''
(or develop) is necessary to ensure that the AD falls within the scope
of part 39; its absence would arguably subject the FAA to legal
challenge for inappropriately using the AD process to issue rules that
do not meet the criteria for AD's. While it is understandable that a
manufacturer would like to minimize any adverse implications regarding
the safety of its products, the FAA reiterates that the purpose of an
AD is to correct an identified unsafe condition in aircraft, regardless
of where it is or what it is caused by. In essence, the AD serves to
protect the flying public from the consequences of the unsafe
condition. The AD also serves to protect the manufacturer from the
liability that would be faced should the unsafe condition not be
corrected.
Request To Clarify Description of Intent of the Rule
This same commenter requests that the description of the intent of
the rule, which appeared in the preamble to the notice, be changed so
that it is more accurate. The specific statement in the preamble
relevant to this issue indicated that the AD actions are:
Intended to prevent * * * corrosion, which could result in
failure of the RAT to deploy and subsequent loss of emergency
hydraulic power to the flight controls, in the event that power is
lost in both engines.
The commenter points out that the proposed operational tests will
help to ensure that the RAT motor is not heavily corroded, but the
tests will not prevent corrosion. The commenter suggests that the
language be revised to specify more accurately that the operational
tests:
* * * Will ensure that the RAT motor is not heavily corroded and
can deploy the RAT. The RAT must be able to be deployed to provide
emergency hydraulic power to the flight controls in the event that
power is lost in both engines.
The FAA partially agrees with this commenter's request.
First, the commenter is correct in pointing out that the required
operational tests will not prevent corrosion. The FAA has revised the
wording relative to this issue in the appropriate places in this final
rule.
Second, the FAA points out that the intent of the statement that
appeared in the preamble to the notice was to specify what unsafe
condition the requirements of the AD are addressing. The commenter's
suggested rewording (i.e., ``The RAT must be able to be deployed * *
*'') highlights the fact that there are pertinent sections of part 25
of the Federal Aviation Regulations (14 CFR part 25) which require that
the RAT be able to be deployed in order to provide emergency hydraulic
power to the flight controls. However, the language that is used in the
AD is formatted to highlight the unsafe condition that is created when
the failure of associated components in a system does not permit the
RAT to deploy as required. It is this concept that the statement of the
intent of the AD is meant to convey, not merely to restate the function
of a required system.
The FAA acknowledges that the statement could be clarified further,
however, and has revised the language in the appropriate portions of
this final rule to specify that the intent of the actions of this AD
is:
``* * * To ensure that the RAT actuator motor is not corroded to
the point where it may result in the failure of the RAT to deploy
and subsequently result in loss of emergency hydraulic power to the
flight controls in the event that power is lost in both engines.
Requests To Extend Compliance Time
Several commenters request that the proposal be revised to extend
the compliance time for the repetitive operational tests from the
proposed 1,000-flight hour intervals to as much as 3,000 flight hours
or 15 months, whichever occurs later. To justify this request, the
commenters point out the following issues:
1. The airframe manufacturer, Boeing, recommends a 3,000-flight
hour interval for repetitive tests.
[[Page 50997]]
2. One of the failed rotary actuator motors of the RAT that was
found in service was on a high-cycle airplane that was operated in a
high humidity, salt water environment. That type of environment is more
conducive to the initiation of corrosion, but is not the typical
environment in which the majority of affected airplanes are operated.
Further, these commenters state that, even though Boeing has advised
that recent high humidity tests have demonstrated that the subject
motor has a propensity to corrode under high humidity conditions,
affected operators are not seeing such results under field conditions.
While the conclusions drawn from reviewing results of the Boeing tests
may justify the FAA's adoption of the rule, the commenters request that
service experience be considered in determining an appropriate
compliance interval.
3. One affected operator states that it has accomplished roughly 90
deployment tests similar to the proposed test over a 9-year period and
there have been no reports of failure.
4. The proposed 1,000-flight hour interval would pose an
``unjustified economic burden on the affected operators,'' since it
does not take into account the necessary removal and return to service
of the motor, repetitive testing, and administrative costs to monitor
and schedule accomplishment of the tests for the remaining life of the
Model 767 fleet. The repetitive interval should be extended to coincide
with normally scheduled maintenance, so that special scheduling will be
unnecessary. An interval of 3,000-flight hours would be appropriate,
and would to ensure that any detrimental effect associated with
corrosion is identified.
5. An extension of the repetitive test interval to include both a
flight cycle threshold and a calendar time will address the FAA's
concern that the addressed problem is caused by exposure to high
cycling. This would also provide an acceptable level of safety without
overburdening operators who use their aircraft on longer stage lengths.
The FAA has considered this information presented by the
commenters, and agrees that the test interval can be revised somewhat.
The FAA concurs with the point that a calendar time interval is
appropriate since corrosion of the RAT actuator motor could occur while
the airplane is on the ground. In light of this, the FAA finds that
repetitive interval of 6 months will ensure that both long-range and
short-range airplanes, as well as those that are infrequently used,
will achieve the same level of safety with respect to the RAT deploy
system.
However, corrosion that occurs as a result of high-cycle use
(condensation due to thermal cycling) is also a concern; therefore, the
FAA maintains that the repetitive test interval cannot be based solely
on calendar time, but must be related to flight hours as well. Based on
recent test data presented by the manufacturer, as well as in-service
history, the FAA has determined that a repetitive interval of 3,000
flight hours is appropriate. This interval will also coincide with
regularly scheduled maintenance visits for most affected operators.
The final rule has been revised to specify that the repetitive
tests must be performed at intervals of 3,000 flight hours or 6 months,
whichever occurs first.
Request To Revise Description of Test Result Conditions
One commenter requests that the proposed rule be revised to clarify
the conditions for which the operational testing is performed. The
commenter maintains that the tests are actually deployment tests to
determine merely if the RAT deploys or if it does not. In light of
this, the commenter requests that paragraph (a)(1) be revised to state,
``If the RAT deploys * * *''; and that paragraph (a)(2) be revised to
state, ``If the RAT does not deploy * * *'' The commenter considers
this revised wording to be clearer than that which appeared in the
notice.
The FAA does not concur with the commenter's suggested changes, but
acknowledges that some clarification is warranted.
As for paragraph (a)(1), the intent of the test is that the RAT
deploy properly. Even the Boeing service bulletin containing the test
procedures, describes a successful test as one in which the RAT
``deploys correctly.'' The FAA finds that the quality of deployment
should be considered for this test. For example, a RAT could deploy,
but have some problems in doing so; in that case, the RAT should not be
considered to have deployed correctly. In light of this, and to
maintain standard terminology between the AD and the referenced service
bulletin, the FAA has revised paragraph (a)(1) to read, ``If the RAT
deploys correctly * * *''
As for paragraph (a)(2), the FAA finds that commenter's suggested
phrase, ``does not deploy,'' is not specific enough for determining the
test result. That language would not encompass deployments where the
RAT may get stuck in transit and may only partially deploy. However,
the FAA does consider that the language should be clarified on this
point and therefore, has revised the phrasing of paragraph (a)(2) to
read, ``If the RAT does not fully deploy * * *''
Request To Permit Use of ETOPS Program in Lieu of Rule Requirements
One commenter requests that the proposal be revised to allow
operators to rely on their approved Extended Range Twin-Engine
Operations (ETOPS) programs, in lieu of the AD requirements, as a means
to ensure the reliability of the RAT on each airplane. The commenter
considers that this approach takes into account individual operators'
operating environments and service experience. This commenter also
states that it has been accomplishing deployment tests ever since its
Model 767's went into service as part of the ETOPS program and, in
approximately 90 deployment tests accomplished over a period of 9
years, has had no reports of failure.
The FAA does not concur with the commenter's request. The
deployment tests that are performed as part of this commenter's ETOPS
program apparently entail the deployment of the RAT only every 10
months. As explained previously, the FAA has determined that repetitive
deployments must be performed every 6 months or 3,000 flight cycles,
whichever occurs first, in order to ensure that corrosion is detected
and corrected before it can lead to the problems that this AD
addresses.
Request To Give Credit for Testing Prior to Delivery
One commenter requests that the proposed rule be revised to give
credit to new airplanes on which a RAT system functional test, which
includes a manual RAT deployment test, is accomplished either in the
factory or on the flight line prior to delivery of the airplane.
The FAA concurs and has added a statement to the final rule to give
credit for such testing only as the initial test required by the AD.
However, all airplanes are subject to the repetitive tests.
Request To Reference Later Revisions of Cited Service Bulletin
Boeing requests that the proposed rule be revised to reference
Revision A of Boeing Alert Service Bulletin 767-29A0080 as the
appropriate source of service information. The commenter states that
this service bulletin, as yet unreleased, will clarify some of the RAT
manual deploy test and the RAT retraction procedures. It will also
[[Page 50998]]
contain additional information concerning corrective action if the RAT
manual deploy circuit breaker trips and there is no measured RAT down-
stop gap after deploying the RAT.
The FAA does not concur. The revision of the service bulletin that
the commenter refers to has not yet been issued, nor has it been
approved by the FAA.
Request To Clarify Background Information
One commenter requests that the description of the service history
prompting this AD action, as it appeared in the preamble to the notice,
be clarified as follows:
1. In the preamble, the FAA indicated that there had been
``several'' reports of corroded rotary actuator motors of the RAT found
on in-service airplanes. However, the commenter points out that there
have been only two reports of heavily corroded RAT motors in service
that have resulted in failures to deploy.
2. The preamble contained a statement indicating that
``investigation revealed'' that the RAT motor is not sealed. The
commenter points out that by design the RAT motor is not sealed.
3. The preamble described the area where the RAT actuator motor is
located as the ``right aft fairing;'' however, this area is
specifically the ``right aft wing-to-body fairing.''
4. The preamble stated that the motor is susceptible to moisture
accumulation when exposed to ``high'' cycling; however, a more accurate
description is ``altitude'' cycling.
The FAA agrees that these points should be clarified as suggested
by the commenter. However, because this background information is not
repeated in the final rule, no specific change is necessary.
Conclusion
After careful review of the available data, including the comments
noted above, the FAA has determined that air safety and the public
interest require the adoption of the rule with the changes previously
described. The FAA has determined that these changes will neither
increase the economic burden on any operator nor increase the scope of
the AD.
Interim Action
This rule is considered to be interim action. The manufacturer has
advised the FAA that it is pursuing development of a redesigned RAT
rotary actuator motor that is not susceptible to corrosion. Once that
item is developed, approved, and available, the FAA may consider
further rulemaking.
Cost Impact
There are approximately 583 Boeing Model 767 series airplanes of
the affected design in the worldwide fleet. The FAA estimates that 197
airplanes of U.S. registry will be affected by this AD, that it will
take approximately 1 work hour per airplane to accomplish the required
actions, and that the average labor rate is $60 per work hour. Based on
these figures, the cost impact of the AD on U.S. operators is estimated
to be $11,820, or $60 per airplane, per operational test.
The cost impact figure discussed above is based on assumptions that
no operator has yet accomplished any of the requirements of this AD
action, and that no operator would accomplish those actions in the
future if this AD were not adopted.
Regulatory Impact
The regulations adopted herein will not have substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, in
accordance with Executive Order 12612, it is determined that this final
rule does not have sufficient federalism implications to warrant the
preparation of a Federalism Assessment.
For the reasons discussed above, I certify that this action (1) is
not a ``significant regulatory action'' under Executive Order 12866;
(2) is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979); and (3) will not have a
significant economic impact, positive or negative, on a substantial
number of small entities under the criteria of the Regulatory
Flexibility Act. A final evaluation has been prepared for this action
and it is contained in the Rules Docket. A copy of it may be obtained
from the Rules Docket at the location provided under the caption
ADDRESSES.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.
Adoption of the Amendment
Accordingly, pursuant to the authority delegated to me by the
Administrator, the Federal Aviation Administration amends part 39 of
the Federal Aviation Regulations (14 CFR part 39) as follows:
PART 39--AIRWORTHINESS DIRECTIVES
1. The authority citation for part 39 continues to read as follows:
Authority: 49 U.S.C. 106(g), 40113, 44701.
Sec. 39.13 [Amended]
2. Section 39.13 is amended by adding the following new
airworthiness directive:
96-20-05 Boeing: Amendment 39-9771. Docket 95-NM-203-AD.
Applicability: All Model 767 series airplanes, certificated in
any category.
Note 1: This AD applies to each airplane identified in the
preceding applicability provision, regardless of whether it has been
otherwise modified, altered, or repaired in the area subject to the
requirements of this AD. For airplanes that have been modified,
altered, or repaired so that the performance of the requirements of
this AD is affected, the owner/operator must request approval for an
alternative method of compliance in accordance with paragraph (b) of
this AD. The request should include an assessment of the effect of
the modification, alteration, or repair on the unsafe condition
addressed by this AD; and, if the unsafe condition has not been
eliminated, the request should include specific proposed actions to
address it.
Compliance: Required as indicated.
To ensure that the RAT actuator motor is not corroded to the
point where it may result in the failure of the RAT to deploy and
subsequently result in loss of emergency hydraulic power to the
flight controls in the event that power is lost in both engines,
accomplish the following:
(a) Within 6 months after the effective date of this AD; unless
previously accomplished within the last 6 months or 3,000 flight
hours prior to the effective date of this AD, whichever is later;
perform an operational test to verify proper deployment of the ram
air turbine (RAT) in accordance with Boeing Alert Service Bulletin
767-29A0080, dated October 12, 1995.
(1) If the RAT deploys correctly, repeat the operational test
thereafter at intervals not to exceed 6 months or 3,000 flight
hours, whichever occurs first.
(2) If the RAT does not fully deploy, prior to further flight,
replace the rotary actuator motor with a new or serviceable rotary
actuator motor, in accordance with the service bulletin. Thereafter,
repeat the operational test at intervals not to exceed 6 months or
3,000 flight hours, whichever occurs first.
(b) An alternative method of compliance or adjustment of the
compliance time that provides an acceptable level of safety may be
used if approved by the Manager, Seattle Aircraft Certification
Office (ACO), FAA, Transport Airplane Directorate. Operators shall
submit their requests through an appropriate FAA Principal
Maintenance Inspector, who may add comments and then send it to the
Manager, Seattle ACO.
Note 2: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the Seattle ACO.
[[Page 50999]]
(c) Special flight permits may be issued in accordance with
sections 21.197 and 21.199 of the Federal Aviation Regulations (14
CFR 21.197 and 21.199) to operate the airplane to a location where
the requirements of this AD can be accomplished.
(d) The actions shall be done in accordance with Boeing Alert
Service Bulletin 767-29A0080, dated October 12, 1995. This
incorporation by reference was approved by the Director of the
Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part
51. Copies may be obtained from Boeing Commercial Airplane Group,
P.O. Box 3707, Seattle, Washington 98124-2207. Copies may be
inspected at the FAA, Transport Airplane Directorate, 1601 Lind
Avenue, SW., Renton, Washington; or at the Office of the Federal
Register, 800 North Capitol Street, NW., suite 700, Washington, DC.
(e) This amendment becomes effective on November 4, 1996.
Issued in Renton, Washington, on September 19, 1996.
Darrell M. Pederson,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 96-24650 Filed 9-27-96; 8:45 am]
BILLING CODE 4910-13-U
Complete official Federal Register PDF
FR Doc. 96-24532 Clean Air Act Approval and Promulgation of State Implementation Plan for Montana; Libby Moderate PMINF10 Nonattainment Area
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 51014-51018]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24532]
=======================================================================
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[MT26-7-6874a; FRL-5609-8]
Clean Air Act Approval and Promulgation of State Implementation
Plan for Montana; Libby Moderate PM10 Nonattainment Area
AGENCY: Environmental Protection Agency (EPA).
ACTION: Direct final rule.
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SUMMARY: In this action, EPA approves the State implementation plan
(SIP) revisions submitted by the State of Montana on March 15, 1995 to
satisfy the Federal Clean Air Act requirement to submit contingency
measures for the Libby moderate PM10 (particulate matter with an
aerodynamic diameter less than or equal to a nominal 10 micrometers)
nonattainment area. The March 15, 1995 submittal also recodified the
Lincoln County regulations. In addition, EPA is approving a SIP
revision submitted by the Governor of Montana on May 13,
[[Page 51015]]
1996, which included revisions to the Lincoln County regulations
regarding open burning and other minor administrative amendments. EPA
is approving these SIP revisions because they are consistent with the
applicable requirements of the Clean Air Act, as amended (Act), and EPA
guidance.
DATES: This action is effective on November 29, 1996 unless notice is
received by October 30, 1996 that someone wishes to submit adverse or
critical comments. If the effective date is delayed, timely notice will
be published in the Federal Register.
ADDRESSES: Copies of the State's submittal and other information are
available for inspection during normal business hours at the following
locations: Air Program, Environmental Protection Agency, Region VIII,
999 18th Street, Suite 500, Denver, Colorado 80202-2466; Montana
Department of Environmental Quality, Air Quality Division, 836 Front
Street, Helena, Montana 59620-5520; and The Air and Radiation Docket
and Information Center, 401 M Street, SW, Washington, DC 20460.
FOR FURTHER INFORMATION CONTACT: Vicki Stamper, 8P2-A, U.S.
Environmental Protection Agency, Region VIII, 999 18th Street, Suite
500, Denver, Colorado 80202-2466, (303) 312-6445.
SUPPLEMENTARY INFORMATION:
I. Background
The Libby, Montana area was designated nonattainment for PM10
and classified as moderate under sections 107(d)(4)(B) and 188(a) of
the Act, upon enactment of the Clean Air Act Amendments of 1990. See 56
FR 56694 (Nov. 6, 1991); 40 CFR 81.327 (specifying designations for
Montana). Those States containing initial moderate PM10
nonattainment areas were required to submit several provisions by
November 15, 1991. These provisions, including an attainment
demonstration (or demonstration that timely attainment is
impracticable), are described in EPA's final rulemaking for the Libby
moderate PM10 nonattainment area SIP (59 FR 44627, August 30,
1994). The Libby PM10 control measures targeted re-entrained road
dust, residential wood burning, prescribed burning, and industrial
sources for reductions in PM10 emissions to demonstrate attainment
of the PM10 national ambient air quality standards (NAAQS). See
the August 30, 1994 notice of final rulemaking and associated Technical
Support Document (TSD) for further details.
Such States were also required to submit contingency measures by
November 15, 1993 (see 57 FR 13543). The Governor of Montana submitted
revisions to the SIP for Libby on March 15, 1995, to address this
requirement.
In addition, on May 13, 1996, the Governor of Montana submitted
revisions to the Lincoln County open burning rules and other minor
revisions for approval into the SIP.
II. This Action
Section 110(k) of the Act sets out provisions governing EPA's
review of SIP submittals (see 57 FR 13565-13566).
A. Analysis Requirements for State Submissions
1. Procedural Background
The Act requires States to observe certain procedural requirements
in developing implementation plans and plan revisions for submission to
EPA. [See sections 110(a)(2) and 110(l) of the Act.] EPA also must
determine whether a submittal is complete and therefore warrants
further EPA review and action [see section 110(k)(1) of the Act and 57
FR 13565]. The EPA's completeness criteria for SIP submittals are set
out at 40 CFR part 51, appendix V.
To entertain public comment, the State of Montana, after providing
adequate notice, held public hearings on December 16, 1994 to consider
the Libby PM10 contingency measures and on February 1, 1996 to
consider the revisions to the Lincoln County open burning rules and
other minor revisions. Following the hearings, the Montana Board of
Health and Environmental Sciences adopted the Libby PM10
contingency measures and the revisions to the Lincoln County open
burning rules. The SIP revisions were formally submitted to EPA for
approval on March 15, 1995 and on May 13, 1996, respectively.
The SIP revisions were reviewed by EPA to determine completeness
shortly after their submittal, in accordance with the completeness
criteria referenced above. The submittals were found to be complete,
and letters dated April 21, 1995 and July 3, 1996 were forwarded to the
Governor indicating the completeness of the submittals and the next
steps to be taken.
2. PM10 Contingency Measures
The Clean Air Act requires States containing PM10
nonattainment areas to adopt contingency measures that will take effect
without further action by the State or EPA upon a determination by EPA
that an area failed to make reasonable further progress (RFP) or to
timely attain the applicable NAAQS, as described in section 172(c)(9).
See generally 57 FR 13510-13512 and 13543-13544. Pursuant to section
172(b), the Administrator has established a schedule providing that
States containing initial moderate PM10 nonattainment areas shall
submit SIP revisions containing contingency measures no later than
November 15, 1993. (See 57 FR 13543, n. 3.)
The General Preamble further explains that contingency measures for
PM10 should consist of other available control measures, beyond
those necessary to meet the core moderate area control requirement to
implement reasonably available control measures (see sections 172(c)(1)
and 189(a)(1)(C) of the Act). Based on the statutory structure, EPA
believes that contingency measures must, at a minimum, provide for
continued progress toward the attainment goal during the interim period
between the determination that the SIP has failed to achieve RFP or
provide for timely attainment of the NAAQS and additional formal air
quality planning following the determination (57 FR 13511).
Section 172(c)(9) of the Act specifies that contingency measures
shall ``take effect * * * without further action by the State or the
[EPA] Administrator.'' EPA has interpreted this requirement (in the
General Preamble at 57 FR 13512) to mean that no further rulemaking
activities by the State or EPA would be needed to implement the
contingency measures. In general, EPA expects all actions needed to
effect full implementation of the measures to occur within 60 days
after EPA notifies the State of its failure to attain the standard or
make RFP. EPA recognizes that certain actions, such as notification of
sources, modification of permits, etc., may be needed before some
measures could be implemented. However, States must show that their
contingency measures can be implemented with minimal further
administrative action on their part and with no additional rulemaking
action such as public hearing or legislative review.
The provisions for selection and implementation of contingency
measures for the Libby moderate PM10 nonattainment are in Section
75.1.103 of the Lincoln County Air Pollution Control Program. The
County and State have targeted three sources of emissions for potential
implementation of contingency measures: residential wood combustion,
re-entrained road dust, and industry emissions. The County rule
provides that, within 60 days of notification by the State or EPA that
the Libby moderate PM10 nonattainment
[[Page 51016]]
area has failed to attain the PM10 NAAQS or to make RFP, one or
more of three measures will be implemented depending on which source(s)
of emissions is determined to be the significant contributor(s) to the
problem. The County rule further provides that, if initially no source
is determined to be the significant contributor, a comprehensive
review, including chemical and microscopic analysis of exposed
PM10 filters, will be conducted by the County and the State to
determine the significant contributor. In the meantime, the County rule
requires that at least one of the three available contingency measures
be implemented on an interim basis. This interim contingency measure
will remain in effect until the significant source is identified and a
permanent contingency measure has been implemented.
The specific contingency measures adopted for the Libby moderate
PM10 nonattainment area and their projected effectiveness are as
follows:
a. Residential Wood Burning Contingency Measure
Section 75.1.206(3) of the local regulations contains the
residential wood burning contingency measure. The County rule provides
for early implementation of this contingency measure if needed, which
is acceptable. If this measure is implemented, the County regulation
provides that:
No solid fuel burning device shall be operated within the Libby Air
Pollution Control District between October 1 and March 31 unless it has
been permitted by the [Lincoln County Health] Department as a Class I,
Class II, Low Income Exemption or Sole Source device or is operating on
a validated Temporary Emergency Heating Authorization Permit.
This contingency measure goes beyond the existing control measure,
which limits the use of these types of solid fuel burning devices only
when an alert is called by the County (i.e., when PM10 levels
exceed 100 g/m\3\ and conditions indicate that PM10
levels will remain above 100 g/m\3\).
If the residential wood burning contingency measure is implemented
in the Libby nonattainment area, the State estimates that the control
efficiency of the wood burning measures will be 57% in the 24-hour
attainment demonstration (an increase of 5% over the control efficiency
of the residential wood burning measures in the original SIP attainment
demonstration). The State also estimates that the annual control
efficiency of the wood burning measures would be 54% (an increase of
20% over the annual control efficiency in the original SIP). Total
reduction from the contingency measure is calculated to be 256 pounds
of PM10 reduced per day more than without the contingency measure,
and 19.4 tons more per year.
b. Re-entrained Road Dust Contingency Measure
Section 75.1.303(3) of the County regulations contains the re-
entrained road dust contingency measure. The County rule provides for
early implementation of this contingency measure if needed, which is
acceptable. If this measure is implemented, the following changes to
the existing road dust control plan (which has been approved as part of
the Libby PM10 SIP) become effective:
(1) The Area of Road Sanding and Sweeping will be extended to the
boundaries of the Air Pollution Control District. Thus, the prioritized
street sweeping and flushing schedule will be expanded to apply to all
public roadways within the Road Sanding and Sweeping District;
(2) The use of liquid de-icing agents (which was not previously
required) will be mandatory on all roads and parking lots within the
expanded Road Sanding and Sweeping District. Use of sanding materials
will be prohibited except in emergency situations; and
(3) Any sanding materials used in an emergency situation must meet
the specifications identified in Section 75.1.303(1) of the County
regulation.
The City of Libby and the Department of Transportation have installed
tanks and converted equipment for the use of a liquid de-icer instead
of sanding material.
If the re-entrained road dust contingency measure is implemented,
the State estimates that the control efficiency of the re-entrained
road dust measures will be 90% in the 24-hour attainment demonstration
(an increase of 42% over the control efficiency of the re-entrained
road dust measures in the original SIP attainment demonstration). The
State also estimates that the annual control efficiency of the re-
entrained road dust contingency measure will be 71% (an increase of 33%
over the original SIP attainment demonstration). Total reduction from
the contingency measure is calculated to be 7421 pounds of PM10
per day and 403 tons of PM10 per year than without the contingency
measure.
c. Stimson Lumber Company Contingency Measure
Section 75.1.103(2)(c) of the County regulation states that, if
industrial facility emissions are determined to be one of the
significant contributors to PM10 exceedances in the Libby
PM10 nonattainment area, contingency measures reducing the
industrial facility's emissions shall be initiated by the State.
Implementation of this contingency measure was retained by the State
because the authority to regulate sources governed by the Montana Clean
Air Act (MCA), Title 75, Chapter 2, is not delegable to the local
level. The requirements of this contingency measure are contained in
the December 16, 1994 Board Order and Stipulation between Stimson
Lumber Company and the State. The contingency measure consists of
additional controls on fugitive dust sources.
The existing fugitive dust requirements in the permit include:
chemical dust suppressant on the major haul routes to maintain
compliance with the 20% opacity limitation (at least annually), and
water sprays used as necessary to control dust emissions on active
areas of the log yard. The contingency measures in the stipulation add
the following requirements:
(1) The facility entrance and Plywood Plant access road shall be
surfaced with either asphalt, concrete, or chip seal from Highway 2 to
the Plywood Plant. Sweeping and flushing shall be conducted, as
necessary, to maintain compliance with a 5% opacity limitation but not
less than twice annually, with one application during the months of
April-June and one application during the months of September-November.
(2) The chip sealed portions of the Plywood Plant access road shall
consist of a double layer of oil base and chips which shall be watered,
as necessary, to maintain compliance with a 5% opacity limitation.
These portions shall also be maintained to avoid deterioration by
evaluating the chip seal for cracking at a minimum of every 2 years,
and by applying a crack sealer (e.g., rubberized asphalt) as needed. A
thorough evaluation and assessment of the need to reseal the roadway
shall be conducted no less than every 5 years.
(3) Chemical dust suppressant shall be applied to all remaining
active unpaved areas within the facility as necessary to maintain
compliance with the 5% opacity limitation, but not less than twice
annually with one application during the months of April-June and one
application during the months of September-November.
(4) The facility shall maintain a written record of all implemented
contingency measures, which shall be made available to the Montana
[[Page 51017]]
Department of Environmental Quality upon request.
The stipulation provides that this contingency plan will become
effective within 60 days after notification to the company and without
further negotiation.
The State's March 15, 1995 SIP submittal did not contain an
analysis of the effectiveness of the Stimson Lumber Company contingency
measures. While this contingency measure specifically controls fugitive
dust emissions in the log yard area and associated roads of Stimson
Lumber Company, the main problem the State intended to address with
these measures was the amount of mud and dirt carried out onto the
public roads around the Plywood Plant by vehicles leaving the facility.
However, the amount of PM10 reductions due to a reduction in mud
and dirt carryout from Stimson Lumber Company are not readily
quantifiable. The State did not calculate the emissions reductions due
to these fugitive dust contingency measures expected on the Stimson
Lumber Company property itself because they believed the calculations
would not accurately reflect the overall effectiveness of this
contingency measure. EPA agrees with the State that the Stimson Lumber
Company contingency measures will help to reduce mud and dirt carryout
onto the public roads and, consequently, will reduce re-entrained road
dust emissions, as well as reducing fugitive dust emissions emitted
from the Stimson Lumber Company property. Thus, this contingency
measure, if implemented, will provide for additional emissions
reductions in the Libby PM10 nonattainment area.
EPA believes the Libby contingency measures are approvable. The
control measures implemented in the PM10 SIP are projected to
achieve more emissions reductions than needed to demonstrate attainment
of the PM10 NAAQS, as indicated by the State's predicted 24-hour
attainment concentration of 135.9 g/m\3\. Since the 24-hour
PM10 NAAQS is 150 g/m\3\, this established safety margin
further supports the reasonableness of these contingency measures.
3. Revisions to Lincoln County's Open Burning Regulations
The City of Libby and Lincoln County revised the open burning rules
to address newly adopted provisions to the State's open burning rules.
Specifically, the Lincoln County open burning rules were revised to add
new provisions addressing open burning of Christmas tree waste, for
commercial film or video productions, and for firefighter training. In
addition, the County rules were revised to add additional requirements
for the issuance of conditional open burning permits, such as providing
public notice and opportunity for public hearing. The County also added
a provision stating that it could only issue a conditional open burning
permit if emissions from the burn would not endanger public health or
cause or contribute to a violation of the NAAQS.
The County rules were also revised to make other minor
administrative changes to reflect the reorganization of the Montana
Department of Environmental Quality (formerly Montana Department of
Health and Environmental Sciences).
EPA believes the revisions to the County's rules submitted May 13,
1996 are consistent with the Act and will help to protect the PM10
NAAQS in the Libby area. Therefore, EPA finds the revisions to be
approvable.
4. Enforceability Issues
All measures and other elements in the SIP must be enforceable by
the State and EPA (see sections 172(c)(6), 110(a)(2)(A) and 57 FR
13556). The EPA criteria addressing the enforceability of SIPs and SIP
revisions were stated in a September 23, 1987, memorandum (with
attachments) from J. Craig Potter, Assistant Administrator for Air and
Radiation, et al. (see 57 FR 13541). SIP provisions also must contain a
program to provide for enforcement of control measures and other
elements in the SIP [see section 110(a)(2)(C)]. EPA believes the Libby
PM10 contingency measures and the local regulations meet the SIP
enforceability requirements. For further details, see the TSD
accompanying this action.
III. Final Action
EPA is approving the PM10 contingency measures and the
recodification of the local regulations submitted for the Libby
moderate PM10 nonattainment area by the Governor of Montana on
March 15, 1995. This submittal adequately addressed the PM10
contingency measure requirements for Libby. In addition, EPA is
approving the revisions to the Lincoln County regulations submitted by
the Governor of Montana on May 13, 1996 regarding open burning and
other minor administrative amendments.
EPA is publishing this action without prior proposal because the
Agency views this as a noncontroversial amendment and anticipates no
adverse comments. However, in a separate document in this Federal
Register publication, EPA is proposing to approve the SIP revisions
should adverse or critical comments be filed. Under the procedures
established in the May 10, 1994 Federal Register (59 FR 24054), this
action will be effective November 29, 1996 unless, by October 30, 1996,
adverse or critical comments are received.
If EPA receives such comments, this action will be withdrawn before
the effective date by publishing a subsequent notice that will withdraw
the final action. All public comments received will then be addressed
in a subsequent final rule based on this action serving as a proposed
rule. EPA will not institute a second comment period on this action.
Any parties interested in commenting on this action should do so at
this time. If no such comments are received, the public is advised that
this action will be effective on November 29, 1996.
Nothing in this action should be construed as permitting or
allowing or establishing a precedent for any future request for
revision to any SIP. Each request for revision to a SIP shall be
considered separately in light of specific technical, economic, and
environmental factors and in relation to relevant statutory and
regulatory requirements.
IV. Administrative Requirements
A. Executive Order 12866
This action has been classified as a Table 3 action for signature
by the Regional Administrator under the procedures published in the
Federal Register on January 19, 1989 (54 FR 2214-2225), as revised by a
July 10, 1995 memorandum from Mary Nichols, Assistant Administrator for
Air and Radiation. The Office of Management and Budget (OMB) has
exempted this regulatory action from E.O. 12866 review.
B. Regulatory Flexibility Act
Under the Regulatory Flexibility Act, 5 U.S.C. 600, et seq., EPA
must prepare a regulatory flexibility analysis assessing the impact of
any proposed or final rule on small entities. 5 U.S.C. 603 and 604.
Alternatively, EPA may certify that the rule will not have a
significant economic impact on a substantial number of small entities.
Small entities include small businesses, small not-for-profit
enterprises, and government entities with jurisdiction over populations
of less than 50,000.
SIP approvals under section 110 and subchapter I, part D of the
Clean Air Act do not create any new requirements but simply approve
requirements that the State is already imposing. Therefore, because the
Federal SIP approval does not impose any new requirements, the
[[Page 51018]]
Administrator certifies that it does not have a significant impact on
any small entities affected. Moreover, due to the nature of the
Federal-state relationship under the Act, preparation of a flexibility
analysis would constitute Federal inquiry into the economic
reasonableness of state action. The Act forbids EPA to base its actions
concerning SIPs on such grounds. Union Electric Co. v. U.S. EPA, 427
U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).
C. Unfunded Mandates
Under section 202 of the Unfunded Mandates Reform Act of 1995
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA
must prepare a budgetary impact statement to accompany any proposed or
final rule that includes a Federal mandate that may result in estimated
costs to State, local, or tribal governments in the aggregate; or to
the private sector, of $100 million or more. Under section 205, EPA
must select the most cost-effective and least burdensome alternative
that achieves the objectives of the rule and is consistent with
statutory requirements. Section 203 requires EPA to establish a plan
for informing and advising any small governments that may be
significantly or uniquely impacted by the rule.
EPA has determined that the approval action promulgated does not
include a Federal mandate that may result in estimated costs of $100
million or more to either State, local, or tribal governments in the
aggregate, or to the private sector. This Federal action approves pre-
existing requirements under state or local law, and imposes no new
Federal requirements. Accordingly, no additional costs to State, local,
or tribal governments, or to the private sector, result from this
action.
D. Submission to Congress and the General Accounting Office
Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business
Regulatory Enforcement Fairness Act of 1996, EPA submitted a report
containing this rule and other required information to the U.S. Senate,
the U.S. House of Representatives, and the Comptroller General of the
General Accounting Office prior to publication of the rule in today's
Federal Register. This rule is not a ``major rule'' as defined by 5
U.S.C. 804(2).
E. Petitions for Judicial Review
Under section 307(b)(1) of the Clean Air Act, petitions for
judicial review of this action must be filed in the United States Court
of Appeals for the appropriate circuit by November 29, 1996. Filing a
petition for reconsideration by the Administrator of this final rule
does not affect the finality of this rule for the purposes of judicial
review nor does it extend the time within which a petition for judicial
review must be filed, and shall not postpone the effectiveness of such
rule or action. This action may not be challenged later in proceedings
to enforce its requirements (see section 307(b)(2)).
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Incorporation by
reference, Intergovernmental relations, Particulate matter, Reporting
and recordkeeping requirements.
Dated: August 29, 1996.
Patricia D. Hull,
Acting Regional Administrator.
Chapter I, title 40 of the Code of Federal Regulations is amended
as follows:
PART 52--[AMENDED]
1. The authority citation for part 52 continues to read as follows:
Authority: 42 U.S.C. 7401-7671q.
Subpart BB--Montana
2. Section 52.1370 is amended by adding paragraph (c)(44) to read
as follows:
Sec. 52.1370 Identification of plan.
* * * * *
(c) * * *
(44) The Governor of Montana submitted PM10 contingency
measures and a recodification of the local regulations for Libby,
Montana in a letter dated March 15, 1995. In addition, the Governor of
Montana submitted revisions to the local open burning regulations and
other minor administrative amendments on May 13, 1996.
(i) Incorporation by reference.
(A) Board order issued on December 16, 1994 by the Montana Board of
Health and Environmental Sciences adopting stipulation of the Montana
Department of Health and Environmental Sciences and Stimson Lumber
Company.
(B) Board order issued December 16, 1994 by the Montana Board of
Health and Environmental Sciences adopting the PM10 contingency
measures as part of the Libby air pollution control program.
(C) Board order issued on February 1, 1996 by the Montana Board of
Environmental Review approving amendments to the Libby Air Pollution
Control Program.
(D) Lincoln Board of Commissioners Resolution No. 377, signed
September 27, 1995, and Libby City Council Ordinance No. 1507, signed
November 20, 1995, adopting revisions to the Lincoln County Air
Pollution Control Program, Sections 75.1.103 through 75.1.719.
(E) Lincoln County Air Pollution Control Program, Sections 75.1.101
through 75.1.719, effective December 21, 1995.
[FR Doc. 96-24532 Filed 9-27-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-24508 Developmental Disabilities Program
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 51142-51166]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24508]
[[Page 51141]]
_______________________________________________________________________
Part II
Department of Health and Human Services
_______________________________________________________________________
Administration for Children and Families
_______________________________________________________________________
45 CFR Parts 1385, 1386, 1387, and 1388
Developmental Disabilities Program; Final Rule
Federal Register / Vol. 61, No. 190 / Monday, September 30, 1996 /
Rules and Regulations
[[Page 51142]]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
45 CFR Parts 1385, 1386, 1387, and 1388
RIN: 0970-AB11
Developmental Disabilities Program
AGENCY: Administration on Developmental Disabilities, Administration
for Children and Families, HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department is issuing this final rule for the
Developmental Disabilities Program which implements the Developmental
Disabilities Assistance and Bill of Rights Act Amendments of 1990 and
the 1994 Amendments. The rule includes: Requirements clarifying
redesignation of the Protection and Advocacy system and the appeal
process; requirements on the Protection and Advocacy annual statement
of objectives; State Developmental Disabilities Council
responsibilities and those of the Designated State Agency; and new
program standards for the University Affiliated Programs.
EFFECTIVE DATE: The effective date of these regulations is October 30,
1996. However, affected parties do not have to comply with the
information requirements in Secs. 1386.23(a), 1386.30(c), 1386.32(a),
and 1386.32(b) until the Administration for Children and Families
publishes in the Federal Register the control numbers assigned by the
Office of Management and Budget (OMB) to these information collection
requirements. (Please note that these sections had been previously
approved by OMB but the control numbers for them have expired.)
Publication of the control numbers notifies the public that OMB has
approved these information collection requirements under the Paperwork
Reduction Act of 1995.
FOR FURTHER INFORMATION CONTACT: Elsbeth Wyatt, Administration on
Developmental Disabilities; Telephone: (202) 690-5841 (Voice), (202)
690-6415 (TDD). These are not toll-free numbers. This document will be
made available in accessible formats upon request.
SUPPLEMENTARY INFORMATION:
I. Program History
In 1963, the Mental Retardation Facilities and Construction Act
(Pub.L. 88-164) was enacted to plan activities and construct facilities
to provide services to persons with mental retardation. This
legislation was subsequently amended by the Developmental Disabilities
Services and Facilities Construction Amendments of 1970 (Pub.L. 91-517)
which constituted the first Congressional effort to address the needs
of a group of persons with disabilities designated as developmental
disabilities. The 1970 Amendments defined developmental disabilities to
include individuals with mental retardation, cerebral palsy, epilepsy
and other neurological conditions closely related to mental retardation
which originated prior to age 18 and constituted a substantial
disability. It also created State Planning Councils to advocate for,
plan, monitor and evaluate services for persons with developmental
disabilities; and authorized grants for constructing, administering and
operating University Affiliated Facilities. The legislation authorizing
the Developmental Disabilities program has been revised periodically.
The major changes of note included the following:
(1) The 1975 Amendments (Pub.L. 94-103) deleted the construction
authority, authorized studies to determine the feasibility of having
University Affiliated Facilities establish Satellite Centers,
established the Protection and Advocacy System and added a section on
``Rights of the Developmentally Disabled;''
(2) The 1978 Amendments (Pub.L. 95-602) included a functional
definition of developmental disabilities;
(3) The Developmental Disabilities Amendments of 1984 (Pub.L. 98-
527) added a new emphasis regarding the purpose of the program, to
assist States to assure that persons with developmental disabilities
receive the care, treatment and other services necessary to enable them
to achieve their maximum potential through increased independence,
productivity and integration into the community; and
(4) The 1987 Amendments (Pub.L. 100-146) established an annual
report to Congress on the Developmental Disabilities program. The
Administration on Developmental Disabilities (ADD) compiles this report
using information received from the State Planning Councils, the
Protection and Advocacy Systems, the University Affiliated Programs and
grantees of the Projects of National Significance. Also included in the
1987 Amendments was a special 1990 Report to Congress on the scope and
effectiveness of services provided to persons with developmental
disabilities by State agencies and an analysis of consumer
satisfaction. The State Planning Councils prepared the State Reports to
ADD and this information was used as a basis for the Report to
Congress.
The Developmental Disabilities Assistance and Bill of Rights Act
Amendments of 1990, Pub.L. 101-496, (the Act), extended authorization
of appropriations for programs under the Act through Fiscal Year 1993
and made revisions that:
(1) Add to the purpose of the Act the commitment toward enabling
all people with developmental disabilities, including those with severe
disabilities, to achieve interdependence and inclusion into society;
(2) Strengthen the independence of State Protection and Advocacy
systems;
(3) Establish core awards for University Affiliated Programs
training projects; and
(4) Broaden the purpose of Projects of National Significance to
include supportive living and quality of life opportunities.
The Developmental Disabilities Assistance and Bill of Rights Act
Amendments of 1994, Pub. L. 103-230, (the Act), extended authorization
of appropriations for programs under the Act through Fiscal Year 1996
and made revisions that:
(1) Include findings that emphasize respect for individual dignity,
personal preferences, and cultural differences in the provision of
services, supports and other assistance, and recognize that individuals
with developmental disabilities and their families are the primary
decision-makers regarding services, supports, and other assistance they
receive;
(2) Ensure that individuals from diverse racial and ethnic
backgrounds are fully included at all levels and in all activities
authorized under this Act. This includes language regarding unserved
and underserved populations and ``culturally competent'' services,
supports and other assistance;
(3) Require State Developmental Disabilities Council activities to
promote systemic change, capacity building and advocacy;
(4) Clarify the responsibilities of the State Developmental
Disabilities Council and the Designated State Agency;
(5) Require the Protection and Advocacy System (P&A) to hire and
maintain sufficient numbers and types of qualified staff to carry out
the P&A's function;
(6) Protect the confidentiality of client records;
(7) Require development of new program standards for University
Affiliated Programs; and
[[Page 51143]]
(8) Direct the Secretary to support grants to conduct an
investigation on the expansion of part B programs (State Developmental
Disabilities Councils) to individuals with severe disabilities other
than developmental disabilities.
Public Law 104-183 extends for three years the authorization of
appropriations for programs under the Act through Fiscal Years 1997,
1998, and 1999.
II. Developmental Disabilities Program
A. Federal Assistance to State Developmental Disabilities Councils
Formula grants are made to each State to support State
Developmental Disabilities Councils. The responsibilities of the
Councils are to promote, through systemic change, capacity building and
advocacy activities; the development of a consumer and family-centered,
comprehensive system; and, a coordinated array of services, supports
and other assistance. These activities are designed to achieve
independence, productivity, integration and inclusion into the
community for individuals with developmental disabilities.
B. Protection and Advocacy of the Rights of Individuals With
Developmental Disabilities
Formula grants are made to States for the establishment of a system
to protect and advocate for the rights of individuals with
developmental disabilities. This system must have the authority to
pursue legal, administrative and other appropriate remedies to ensure
the protection of the rights of individuals with developmental
disabilities who are receiving, or who are eligible to receive,
treatment or habilitation services.
C. University Affiliated Programs
Grants are made to universities, or to public or nonprofit entities
associated with a college or university, to establish University
Affiliated Programs (UAPs). Activities of University Affiliated
Programs are to be conducted in a culturally competent manner and
include: interdisciplinary pre-service preparation of students and
fellows; community service activities which include community training
and technical assistance; and the dissemination of subsequent
information and research findings.
D. Projects of National Significance
This program provides funding through grants and contracts to
public or nonprofit private entities for projects which support
national initiatives. Such initiatives include the collection of
necessary data; provision of technical assistance to State
Developmental Disabilities Councils, protection and advocacy systems
and university affiliated programs; and support to other nationally
significant activities, such as employment and housing.
III. Notice of Proposed Rulemaking
The Department published a Notice of Proposed Rulemaking (NPRM) in
the Federal Register on May 18, 1995, (60 FR 26774-26793). Interested
persons were given sixty days in which to send written comments
regarding the proposed rules. During the sixty (60) day comment period
35 letters were received. The comments were sent from: 20 Protection
and Advocacy Systems and the National Association of Protection and
Advocacy Systems (NAPAS); 11 Developmental Disabilities State Councils
and the National Association of Developmental Disabilities Councils
(NADDC); and one University Affiliated Program and the American
Association of University Affiliated Programs (AAUAP).
All written comments were analyzed and form the basis for changes
which the Department has made in these final rules.
Part 1385 contains provisions which apply to all of the
Developmental Disabilities Programs. Part 1386 regulates the two
formula grant programs: Federal Assistance to State Developmental
Disabilities Councils (Part B of the Act) and the Protection and
Advocacy System (Part C of the Act). Part 1387 applies to Projects of
National Significance (Part E of the Act); and Part 1388 applies to
University Affiliated Programs (Part D of the Act).
Summary of Comments and the Department Response
The discussion which follows includes a summary of all comments,
our responses to those comments, and a description of the changes that
have been made in the final rule as a result of the comments. It should
be noted for purposes of these regulations that when the concept of
``days'' is indicated we are considering these as ``calendar days''
unless otherwise specified as ``work days.'' It should be noted further
that we use the initials ``P&A and ``P&As'' frequently in this preamble
for the ease of the reader and the initials stand for protection and
advocacy. The context in which these initials are used lets the reader
know whether it is the system or the agency under discussion. However,
for the most part the ``P&A'' initials refer to the system.
A number of sections of the NPRM were not changed in the final rule
and therefore are not referenced in this preamble. Minor technical
changes were made in some areas for clarification purposes but are not
significant enough to highlight. In addition, we have worked with the
National Center for Mental Health Services, Substance Abuse and Mental
Health Services (SAMHSA), to ensure that as permitted by the
Developmental Disabilities Assistance and Bill of Rights Act, our
requirements are identical or consistent with the SAMHSA requirements
that implement the provisions of the Protection and Advocacy for
Individuals with Mental Illness (PAIMI) Act.
Part 1385--Requirements Applicable to the Developmental Disabilities
Program
Section 1385.1 General
Comments: Some commenters asked that this section be revised to
reflect the fact that the regulations, in addition to governing
protection and advocacy (P&A) activities, impose obligations on service
providers, e.g., access to premises, individuals with developmental
disabilities and their records. It was recommended that requirements in
this part be applicable not only to the Developmental Disabilities
Program components but also to ``facilities, and other entities, that
provide treatment or habilitative services to persons with
developmental disabilities.''
Response: We did not make this change because the purpose of part
1385 is to cover administrative requirements for ADD grantees
(Protection and Advocacy Systems, Developmental Disabilities State
Councils, University Affiliated Programs and Projects of National
Significance).
Section 1385.3 Definitions
Comments: Some commenters fully supported the addition of a
definition of the term ``Protection and Advocacy System''. It was
recommended that a sentence be added to the proposed definition to
state what the specific P&A authority was in regards to the P&A System
under the Developmental Disabilities Act.
Response: We concur with this recommendation. However, in preparing
the final regulation we became concerned that defining the ``Protection
and Advocacy System'' in this way would lead to some confusion. The Act
makes a distinction between the P&A Agency, and the ``Protection and
Advocacy System.'' In order to preserve this distinction, we have
reformulated the provision as the definition ``Protection and Advocacy
Agency'' and have included the suggestion
[[Page 51144]]
concerning the System's authority. In addition, we have included a
definition for ``developmental disabilities''. The reason for adding
the definition is addressed in the discussion for Sec. 1386.19.
Section 1385.9 Grants administration
Comments: Some commenters fully supported the revision to paragraph
(e)(1) of Sec. 1385.9, recommending that the phrase the Secretary
``does not require'' P&As to make disclosures should read ``shall not
require.'' Also, they recommended that we apply this prohibition to
state and other federal agencies.
Response: We concur with the word change suggestion for paragraph
(e)(1). In addition, after carefully reviewing this paragraph again, we
have reworded it and included statutory citations for greater clarity.
Applying these provisions to other state and Federal agencies in all
instances is beyond the authority of the Developmental Disabilities Act
and these regulations. However, ADD will work with other Federal
agencies and state governments on the issue of access to P&A system
client records.
Comments: Some commenters fully supported either omitting or
revising the proposed language of paragraph (e)(2) of Sec. 1385.9. They
indicated that as written the regulation provides that the P&A shall
have the burden of proving compliance with the Act or regulations where
HHS has found, during an audit or other investigation, any evidence of
noncompliance. The proposal's imposition on the P&A of the burden of
proof regarding the agency's compliance was viewed as being at odds
with federal due process protection. Another commenter indicated that
if (e)(2) remains, then the rule contain assurances that those
individuals who, in their official capacity, have access to personally
identifiable client information, be required to keep such information
confidential. Further, commenters suggested a requirement that such
personally identifiable information be destroyed once the audit,
monitoring review, evaluation or other investigation process is
completed.
Response: We revised the proposed language. The regulations
reiterate that the purpose of obtaining personally identifiable client
information is solely to determine that P&As are spending their grant
funds awarded through Part 142 of the Developmental Disabilities Act on
serving exclusively individuals with developmental disabilities. We
have included language indicating that officials who have access to
such information must keep it confidential to the maximum extent
permitted by law and regulations. We did not change the requirement on
burden of proof because we do not agree with the comment that making
the P&A system bear the ultimate burden of proof regarding their
compliance raises due process issues. It is customary that grantees
bear exactly that burden, because usually only they are in possession
of the information necessary to establish compliance.
Part 1386-Formula Grant Programs
Subpart B--State System for Protection and Advocacy of the Rights of
Individuals with Developmental Disabilities
A majority of the comments received by the Administration on
Developmental Disabilities were on this subpart. The following is a
summary of key comments on this subpart and our response:
Although most commenters were supportive of the regulations, many
had specific suggestions, regarding the authority of the P&A systems to
conduct investigations and to gain access to records, facilities and
individuals receiving treatment or habilitation services. ADD has
developed a new section, Sec. 1386.22 Access to Records, Facilities and
Individuals with Developmental Disabilities to address many of these
concerns. The NPRM had this section as Public notice of Federal onsite
review which we have now incorporated in Sec. 1386.21, Requirements of
the Protection and Advocacy System.
Commenters also requested that the regulations be revised to
incorporate similar provisions as those found in the Protection and
Advocacy for Individuals with Mental Illness (PAIMI) Act regulations.
Commenters indicated that the Developmental Disabilities
regulations should be as closely coordinated with the Protection and
Advocacy for Individual with Mental Illness (PAIMI) Act regulations as
possible. ADD concurs with this recommendation and has incorporated
provisions as appropriate.
Many commenters believed it would be useful to repeat the law in
the regulations in order to present a complete picture of all the
requirements rather that just cite the relevant sections of the Act.
ADD recognizes that such information would be operationally helpful but
is not appropriate to include in regulations.
Comments were also received to include additional case law opinions
in the regulations to assist P&As. Such information would be
appropriate for the preamble, however, such language is not included
into the Code of Federal Regulations.
Also, it was suggested that the regulations (or appendix to the
regulations) should list all authorized P&As by name, address,
telephone number and spell out their authority. Comments indicated that
facilities serving individuals with developmental disabilities attempt
to obstruct P&A advocacy efforts by asserting that particular agencies
lack authority. The regulations already cover the issue of P&A
authority and such a listing is not appropriate in regulations. P&As
have a Notice of Grant Award which could be used for this purpose and a
listing of all authorized P&As is available from ADD.
Section 1386.19 Definitions
Comment: A commenter recommended that the proposed definitions of
``full investigations,'' ``probable cause,'' and ``record of an
individual with a developmental disability'' be transferred to new
regulatory sections dealing with facilities and records access. Also
recommended was the inclusion of other definitions for key terms
applied under the statute.
Response: ADD does not concur with these recommendations.
Therefore, the final rule does not incorporate these changes. Section
1386.19 Definitions was developed to cover terms unique to the P&A
system (part 1386). Section 1385.3 contains other definitions of key
terms applied under the statute. To reissue such definitions in
Sec. 1386.19 is duplicative.
Comments: We received several comments to include a definition of
``complaint'' as the receipt of a complaint is one of the bases for
obtaining access to the records of an individual with developmental
disabilities (see sections 142(a)(2)(I) (ii) and (iii)). Recommended
language was also included.
Response: We have included a definition of ``complaint''. This
definition includes media accounts and newspaper articles because,
while such reports are not specifically directed at the P&A system,
they are published with the expectation that public officials
responsible for conditions will act to stop abuse.
Comments: We received comments to include a definition of
``developmental disabilities'' as there is inconsistency from state to
state in determining whether individuals are eligible for the P&A
program. It was recommended that the regulations include an
interpretation on the application of the functional definition of the
Act (section 102(8)) to assist P&As in making eligibility
[[Page 51145]]
determinations, especially for school age children (e.g., attention
deficit problems, learning disabilities and emotional disturbance).
Response: We have included a definition of ``developmental
disabilities'' to reiterate that the P&A system receiving funds under
the Developmental Disabilities Act must use the functional definition
in section 102(8) to determine who they will serve. This determination
shall be done on a case-by-case basis. For example, the diagnosis of
learning disability or attention deficit disorder, like any other
diagnosis, would not in itself be considered a developmental disability
unless it meets the functional definition of the legislation. Any State
eligibility definition of developmental disability or policy statement
which is more restrictive than that of the Act does not apply as the
Act takes precedence. The definition of ``developmental disabilities''
has been placed in Sec. 1385.3 because we believe it is more
appropriate in a section with definitions for words found in all parts
of this rule.
Comments: On the proposed definition of ``probable cause'',
commenters indicated general support but requested that additional
language be included to reiterate that the P&A has exclusive authority
to make probable cause determinations, and that a judicial or other
third party determination is prohibited. Also, commenters requested
language regarding the issue of disclosure on the basis of the P&As
probable cause finding.
Response: We have revised the final rule for greater clarification.
However, we could not make the specific type of edits recommended above
as the context of the Act does not support such interpretations.
Comments: We received several comments to include a definition for
``legal guardian, conservator and legal representative'' and
recommended language was included.
Response: We have included a definition of ``legal guardian,
conservator and legal representative''. The definition follows the
wording of a statement in the Congressional Report on the PAIMI
legislation. ACF adopted it because the protection and advocacy
requirements in the Act parallel Congressional intent.
Comments: Commenters asked that we include definitions for
``abuse'' and ``neglect''.
Response: We concur with this recommendation and have included
these definitions.
Comments: Several commenters recommended changing the proposed
definition of ``full investigations'' and recommended language for
this.
Response: We have revised the definition in accordance with the
recommended language.
Comments: Several commenters recommended that the definition of
record go beyond the transmittal of final reports, that a record also
include discharge plans and the records of a variety of service
providers.
Response: We have deleted this definition in the final rule as we
have now included other definitions (see complaint and facility) and
regulations (new Sec. 1386.22) to reiterate that a record goes beyond a
final report and have clarified the types of facilities involved in
investigations.
Section 1386.20 Designated State Protection and Advocacy System
Comments: We received comments on the proposed P&A redesignation
process, paragraphs (d), (e), and (f) of this section. Commenters
suggested that we provide additional guidance on what constitutes
``good cause'' and that such evidence used to make a redesignation
decision should be presented to the P&A at the time of issuance of both
the initial notice of intent to redesignate and the final redesignation
decision. Commenters also indicated that P&As should be provided access
to information upon which a final redesignation decision was based and
a full opportunity to analyze the information prior to submitting its
appeal to such a decision.
Response: Because there is no formulation which encompasses all of
the possible variations of circumstances serious enough to justify
redesignations, we decided not to attempt to define ``good cause'' in
this regulation. We have modified the guidance we included in the NPRM
to explain that ``good cause'' may include, but is not limited to,
eliminating longstanding or pervasive inefficiency or a substantial
breach of section 142 of the Act, or violations of other State and
Federal requirements, such as 45 CFR part 74.
Comment: Comments were offered on the preamble discussion regarding
governors and P&As consulting and seeking resolution before involving
the public in the redesignation process. Commenters recommended that
such a process should be included in the regulations as this may result
in a much quicker amicable resolution and could obviate resource
intensive battles over redesignation. They further recommended that the
regulations should specify that in the event such attempts at voluntary
resolution was unsuccessful, the designating official must provide a
clarification in writing to this effect, as part of the redesignation
notice. This certification would provide official verification that the
designating official did indeed attempt to resolve the matter through
negotiation.
Response: ADD agrees in concept with the points being raised and
reiterates that consultation between the governors and P&As on the
responsibilities and requirements of the system should be the first
step before initiating the redesignation process. Through such a
meeting, resolution may occur as the State would have an opportunity to
apprise the current P&A system of its actions which constitute ``good
cause'' and remedial steps could be established, possibly negating the
need for the redesignation. However, the determination of such a
meeting being held must be made at the State level. In
Sec. 1386.20(d)(2)(v) language has been included that the public notice
must provide a clear and detailed explanation of the good cause for the
proposed redesignation, including failure to take remedial steps
suggested in consultation(s) with the State, if applicable.
Comment: One commenter recommended that in the initial public
notice the name of the proposed new P&A agency not be included (see
paragraph (d)(2)(vii)).
Response: Such information is considered valuable for the public
input process so the community is aware of who is being considered as
the new P&A agency and can provide comments early on regarding this
organization. Therefore, no such change has been made in the final
rule.
Comment: A commenter recommended that the public notice on a P&A
redesignation must include a statement of assurance that the proposed
new designated State P&A System will continue to serve existing clients
and cases of the current P&A system or refer them to other sources of
legal advocacy as appropriate, without disruption or impairment of the
legal or constitutional rights of clients affected by such
redesignation.
Response: We concur and such language has been included in
Sec. 1386.20(d)(2)(x).
Comment: A commenter indicated that the proposed regulation failed
to provide the current P&A system adequate time to develop and submit
an appeal of redesignation.
Response: We concur and have changed the timeframe from 10 to 20
days in Sec. 1386.20(e)(1).
Comment: A commenter wanted the final phrase of paragraph (e)(3),
``and may provide any additional relevant
[[Page 51146]]
information,'' removed from the regulation.
Response: We do not concur with this recommendation because we
believe it is important to allow submittal of information of relevance
to the situation.
Section 1386.21 Requirements and Authority of the Protection and
Advocacy System
Comments: It was recommended that the title of Sec. 1386.21 be
modified to include the word ``authority'' in support of the goals of
the new regulations to provide guidance to assist P&As to advocate for,
and protect, when required, individuals with developmental
disabilities.
Response: We concur and have revised the title.
Comments: Many commenters recommended that regulatory language be
included in the final rule concerning allotments being used to
supplement and not to supplant the level of non-federal funds available
in the State to investigate and remedy incidents of abuse or neglect or
other rights violations affecting individuals with developmental
disabilities, or which are available to otherwise protect and advocate
the rights of such individuals.
Response: We concur with this recommendation and have included
regulatory language in paragraph (b) of this section of the final rule.
Paragraphs (b)(1), (2), and (3) of the NPRM are now covered in
Sec. 1386.22.
Comments: Commenters recommended that regulatory language be
included in the final rule stipulating that allotments not be used to
support lobbying activities to influence proposed or pending Federal
legislation or appropriations. Suggested language also included
instances in which P&As can perform certain activities which do not
constitute lobbying.
Response: We plan to study this issue in more detail in cooperation
with all interested parties (Federal and Non-Federal) to find the best
approach for addressing concerns about lobbying activities. We will
issue further guidance following these discussions. Paragraph (c) (1),
(3) and (4) of the NPRM are now covered in Sec. 1386.22. Paragraph
(c)(2) is now covered in Sec. 1386.21(e).
Comments: Comments were received on Sec. 1386.21, paragraph (c)(2)
of the NPRM, with recommendations to define ``trained staff'' and
include language regarding training and experience to carry out the
responsibility of the system in accordance with the priorities of the
system.
Response: The determination of trained staff must be made by
individual P&As. Language has been included in Sec. 1386.21(e) to
indicate the P&A system shall have sufficient staff, qualified by
training and experience, to carry out the responsibilities of the
system in accordance with the priorities of the system. Since the
investigation of allegations of abuse, neglect or rights violations is
a priority of the system, the system must have staff appropriately
trained or access to expert consultants to conduct full investigations
of abuse, neglect or rights violations upon the System's determination
of probable cause or if the incidents are reported to the System.
Comments: Comments were received on paragraph (d) of this section,
acknowledging the validity that a P&A system should not implement a
policy or practice restricting the remedies which may be sought on the
behalf of individuals with developmental disabilities. However,
opinions were expressed that P&As should be allowed to choose what
level of remedy to pursue on a case-by-case basis. Such determinations
would be made for such reasons as: (1) Resources; (2) the factual
circumstances of a particular case; and (3) priorities established
through the annual P&A Statement of Objectives and Priorities.
Response: We recognize the concerns expressed and therefore have
revised the regulation at paragraph (c) by using recommended language
to add a final sentence to the regulation which indicates that the
requirement does not prevent the P&A from developing case or client
acceptance criteria as part of the annual priorities identified by the
P&A system as described in Sec. 1386.23(c) of the final rule. The
regulation also indicates that clients must be informed at the outset
of such criteria.
Comments: The comments received on paragraph (e) of this section,
concerned State's interfering with the administration of the Protection
and Advocacy System, e.g., hiring freezes, reductions in force,
prohibitions on staff travel, or other policies which impact staff or
functions funded with Federal funds and would prevent the system from
carrying out its mandates under the Act. It was recommended that the
regulations should clarify that it is the P&A that has the sole
authority to make the determination whether a proposed state policy or
practice would improperly interfere with its operation. Language should
indicate that pending resolution of the matter by appropriate Federal
officials, the P&A need not comply with such a policy or practice.
Also, regulations should be established which outline an expedient
resolution process for such disputes, placing the burden on the State
to establish that the policy in issue does not conflict with the P&A
mandates.
Response: We recognize that P&As administered by state agencies
have had difficulties in spending their Federal money to carry out the
requirements of the P&A system due to state budget policies restricting
the use of funds. On the other hand, to include a provision designating
the P&A the sole authority to make the determinations as to whether a
proposed State policy or practice would improperly interfere with its
operation, would conflict with the intent of Congress evident in the
Act that States play a role in monitoring P&As. (See section 142(a)(4)
and (c)(3)). We have modified this provision (now found at paragraph
(d)) to more clearly cover the States's situation. Regulations on
compliance procedures are covered in part 1386--subpart D--Practice and
Procedure for Hearings Pertaining to States' Conformity and Compliance
with Developmental Disabilities Plans, Reports, and Federal
Requirements.
The language of the NPRM for paragraph (g) of this Sec. 1386.21, is
now found at paragraph (f) unchanged.
Comments: Commenters recommended that regulatory language be
included concerning the issue of ``standing'' which would allow the
system to bring lawsuits in its own right to redress incidents of abuse
or neglect, discrimination and other rights violations impacting on
individuals with developmental disabilities; such individuals need not
be joined as a party to such actions.
Response: We understand the concern with regard to P&A standing and
have addressed this concern in a new Sec. 1386.25 Allowable Litigation
Costs.
Comment: A comment was received to incorporate provisions for an
Advisory Council.
Response: Language has been included in paragraph (g) of this
section regarding P&As that are a public system without a multimember
governing or advisory board. These P&As must establish an advisory
council in order to provide a voice for individuals with developmental
disabilities. The Advisory Council shall advise the P&A on program
policies and priorities and a majority of the membership (including the
chair) shall be comprised of individuals with developmental
disabilities who are eligible for services, or have received or are
receiving services or parents, family members, (including those
representing individuals with developmental disabilities who live in
institutions and
[[Page 51147]]
home and community based settings), guardians, advocates, or authorized
representatives of such individuals.
As noted earlier, the regulation in the NPRM, Sec. 1386.22 Public
notice of Federal onsite review has now been incorporated as paragraph
(h) of this section, 1386.21.
Paragraph (b)(3) of the NPRM of Sec. 1386.21 is now paragraph (i).
The regulation requires the P&A to obtain written consent of the client
requesting assistance or from his or her guardian before releasing
information to individuals not authorized to receive it.
Section 1386.22 Access to Records, Facilities and Individuals with
Developmental Disabilities
Comments: Commenters recommended including a new section on Access
to Records, Facilities and Residents, incorporating PAIMI regulations
as appropriate, and including relevant ADD program regulations from
Sec. 1386.21 of the NPRM.
Response: We concur with this recommendation and have established
Sec. 1386.22 entitled Access to Records, Facilities and Individuals
with Developmental Disabilities. Language has been included based on
the PAIMI regulations. We have included as many points as possible.
In adapting the language of the PAIMI final rule in this section,
we had to make some modifications. We had to separate the provisions
dealing with access to records, access to individuals and the authority
to investigate abuse and neglect. This was necessary because the scope
of authority of P&A Systems under the DD Act is different in each of
these areas; and, in the case of access to facilities, is different
than the PAIMI Act. Under the PAIMI statute, 42 U.S.C. 10805(a)(3), the
P&As ``must have access to facilities in the State providing care or
treatment * * *'' (Emphasis added.) There is no equivalent provision of
the DD Act. That statute provides authority under section 142(a)(2)(H)
to ``have access at reasonable times and locations to any resident who
is an individual with a developmental disability in a facility that is
providing services, support and other assistance to such a resident.''
(Emphasis added.) However, under the DD Act, P&As have authority, under
section 142(a)(2)(B), ``to investigate incidents of abuse and neglect
of individuals with developmental disabilities if the incidents are
reported to the system or if there is probable cause to believe that
the incidents occurred * * *.'' We have reasonably interpreted this
provision as authorizing access to facilities when necessary to
complete an investigation of alleged or suspected abuse or neglect.
With respect to Sec. 1386.22(a)(1) and (2), we are interpreting
reference to client to include all those individuals with developmental
disabilities who request assistance from the system or who have died or
whose whereabouts are unknown.
In Sec. 1386.21, paragraph (c)(1) of the NPRM, regulations were
proposed regarding access to records of deceased individuals and the
authority to conduct abuse and neglect investigations. These
regulations have been deleted as this topic is now covered in
Sec. 1386.22 Access to Records, Facilities and Individuals with
Developmental Disabilities, paragraph (a)(2).
Comments: A few comments were received regarding Sec. 1386.21,
paragraph (c)(3) requesting that further guidance be provided in
relation to P&As having access at reasonable times and locations to
individuals with developmental disabilities who reside in public and
private facilities, especially when P&As are investigating incidents of
abuse and neglect.
Response: This regulation is now covered in Sec. 1386.22,
paragraphs (f), (g) and (h). P&As shall have reasonable unaccompanied
access to service recipients at all times necessary to conduct a full
investigation of an incident of abuse, neglect, or violation of rights.
Comments: Several commenters indicated support for the proposed
regulatory language in Sec. 1386.21, paragraph (c)(4), (see
Sec. 1386.22(e) of the final rule) on keeping confidential the names
and identity of individuals who report incidents of abuse and neglect.
A commenter suggested additional requirements regarding
confidentiality.
Response: We did not include the additional language regarding
confidentiality as the language suggested went beyond the authority of
the Developmental Disabilities Act and the Protection and Advocacy
System.
Comments: Several commenters requested including regulations to
indicate that the provisions regarding access of records under the
Developmental Disabilities Act and regulations take precedence over
other Federal statutes and regulations. If that was not possible,
commenters wanted language to specifically reference the Federal
Education Rights and Privacy Act (FERPA) which sets out certain
restrictions on the release of records by educational institutions (20
U.S.C. 1232(g)); 34 CFR part 99.
Response: We did not include such a provision because such a
requirement goes beyond the authority of the Developmental Disabilities
Act and these regulations. However, we have included language
comparable to PAIMI provisions at Sec. 1386.22(i) on Delay or Denial of
Access. If a system is denied access to facilities and its programs,
individuals with developmental disabilities, or records covered by the
Act or these regulations, it shall be provided promptly with a written
statement of reasons, including, in the case of a denial for alleged
lack of authorization, the name and address of the legal guardian,
conservator, or other legal representative of an individual with
developmental disabilities.
Section 1386.23 Periodic Reports: Protection and Advocacy System
Comments: Commenters requested that P&As be allowed to submit the
Statement of Objectives and Priorities (SOP) Report (paragraph (c)) and
the Program Performance Report (paragraph (a)) at the same timeframe,
by January 1 of each year.
Response: We concur with this recommendation and the final rule has
been revised accordingly.
Comment: A comment was received on paragraph (c)(5) of the NPRM now
(c)(2) regarding the requirement for the P&As to report on how the
system operates and coordinates with other Federal Protection and
Advocacy programs. It was recommended that such a requirement may not
be appropriate for an individual P&A system based on the State's
priorities.
Response: We concur with this recommendation and have deleted the
lengthy list of programs indicating that where applicable, the SOP
provide such information on other Federal advocacy programs. We have
also deleted the references to the Council and UAPs as such information
on advocacy activities will be obtained through the requirements of
paragraph (d) (3), (4), and (5).
Comment: A comment was received on the structure of paragraph (c)
in relation to the SOP and the level and type of administrative
information required for the public input process. A recommendation was
also made that regulatory language be included to reiterate that one of
the critical functions of the SOP and the public comment process was to
establish caseload priorities unique to each State and as such the P&As
have the authority to turn down a request for assistance when it is
outside the scope of the SOP.
Response: We concur with these recommendations and have
restructured the final rule accordingly. We have included regulatory
language that when a P&A turns down a request for
[[Page 51148]]
assistance because it is outside the scope of the SOP, they must inform
individuals that this is the basis for turning them down.
Comments: We received a few comments that the language of the
phrase ``publication of general distribution'' in paragraph (d)(2) on
the public review process for the Statement of Objectives and
Priorities (SOP) was too prescriptive.
Response: We have deleted the word ``publication'' and have revised
the language to indicate that the P&As provide for a broad distribution
of the proposed SOP.
Section 1386.24 Non-Allowable Costs for the Protection and Advocacy
System
Comment: A comment was received on Sec. 1386.24 paragraph (a)(1)
regarding allowable costs for the P&As on issues which relate to a
disability but also may be faced by the general population.
Response: We have included language to cite examples of such
activities which would not be considered allowable costs for the P&As,
such as the preparation of wills, divorce decrees and real estate
proceedings. Language has been included on allowable costs in cases
which relate to an individual with a disability but may also be faced
by the general population. In such cases P&As may provide disability
related technical assistance information and referral to appropriate
programs and services.
We made additional edits for clarification purposes concerning
attorney fees that must be considered as income, by adding to the last
sentence of paragraph (b) ``earned by contractors''.
Section 1386.25 Allowable Litigation Costs. (New)
Comments: A number of the commenters urged that the regulations
clarify whether or not a P&A has standing to take legal action in its
own name.
Response: The legislative history of the 1994 Developmental
Disability Act Amendments (S. Rep. 120, 103rd Cong., 1st Sess. 39-40
(1993) supports the conclusion that, without showing injury to itself,
a P&A does have standing to bring suit on behalf of persons with
disabilities. Although Congress has not amended the Developmental
Disability Act to insert a right of standing, the Committee commented
that ``the current statute is clear that P&A systems have standing to
pursue legal remedies to ensure the protection of and advocacy for the
rights of individuals with developmental disabilities within the
State.'' Additionally, we note that the following courts have affirmed
the P&A's independent standing: Goldstein v. Coughlin, 83 F.R.D. 613
(W.D.N.Y. 1979); and Hershberger v. Missouri Protection and Advocacy
Services, Inc., No 48169 (MO Ct. of Appeals, August 2, 1994).
We wish to make it clear through these regulations that allotments
may be used to pay the otherwise allowable costs incurred by a
Protection and Advocacy System in bringing lawsuits in its own right to
redress incidents of abuse or neglect, discrimination and other rights
violations impacting on individuals with developmental disabilities.
Subpart C--State Plan for Assisting in the Development of a
Comprehensive System of Services and Supports for Individuals With
Developmental Disabilities
Comments: Several commenters stated that the wording of the title
of subpart C should be consistent with the language of the statute.
Response: We concur and have revised the title of subpart C to
read, ``Subpart C--Federal Assistance to State Developmental
Disabilities Councils''.
Section 1386.30 State Plan Requirements
Comments: We received several comments regarding paragraph (a) of
Sec. 1386.30, State Plan requirements. Overall, commenters approved of
the proposed language which emphasized that the State Plan is the
responsibility of the Council. However, commenters indicated that the
regulations should reflect that DD Councils approve the State Plan for
submission to ADD.
Response: The final rule indicates that the annual development of
the State Plan and applicable annual amendments are responsibilities of
the State Developmental Disabilities Council. The Council will provide
opportunities for public input during the planning and development of
the State plan, and will consult with the Designated State Agency to
determine that the plan is not in conflict with applicable State laws
and to obtain appropriate State Plan assurances. Requirements regarding
State Plan submission and approval are covered in Sec. 1386.31, State
Plan submittal and approval.
Comments: A commenter indicated that the last sentence of the
proposed rule at Sec. 1386.30(a) should be moved to Sec. 1386.30(c)
where other regulations pertaining to the Designated State Agency are
covered in relation to the State Plan. This sentence addressed the area
of the Designated State Agency providing support services as requested
by and negotiated with the Council.
Response: We have developed regulatory language to address this
issue in paragraph (a), Sec. 1386.34, Designated State Agency. The
Designated State Agency shall provide the assistance required under
section 124(d)(3) of the Act in developing the State Plan.
Comments: We received several comments on paragraph (c)(1) of
Sec. 1386.30. Commenters approved of the proposed regulations on
identification of program unit(s), as written. However, a commenter
indicated that requiring the identity of the program unit(s) within the
Designated State Agency or office within the State went beyond the Act
and was burdensome on the State. We also received recommended language
to address the fact that in some States, State agencies other than the
Designated State Agency provide services. Also, Councils are now
allowed to use other organizations, including private ones, to provide
fiscal and other support services.
Response: Because administration ties to more than one State agency
are possible, we have not changed the proposed regulatory language to
identify the program unit(s) within the Designated State Agency
responsible for providing assurances and fiscal and other support
services. We have included language pursuant to section 124(d)(4)(C) of
the Act to address the fact that Councils may use or contract with
State agencies other than the Designated State agency in securing
support services. This language was inserted in Sec. 1386.34(e) as this
section on the Designated State Agency is more appropriate for this
requirement. We did not include language covering the use of private
agencies as we could not find any such reference in the statute or
conference report language.
Comments: Several comments were received on paragraph (c)(3).
A commenter supported the proposed regulation which focused on the
Council reporting through the State Plan on the collaborative efforts
of the Council, the Protection and Advocacy Systems and the University
Affiliated Programs to bring about systems change to benefit
individuals with developmental disabilities, and, where appropriate,
individuals with other disabilities.
Other commenters did not agree with the proposed regulation.
Primarily, the concern was that there was no legislative basis for this
State Plan reporting requirement to be prepared by the Councils. While
it was viewed as a worthwhile goal to encourage collaboration and
cooperation between
[[Page 51149]]
the Councils, Protection and Advocacy Systems and the University
Affiliated Programs, commenters did not believe that this should be
added as a requirement for the State Plan. One suggestion was to make
this discretionary by adding the phrase ``where applicable'' to the
regulation. Also, a few commenters indicated the phrase ``Developmental
Disabilities Network'' should not be used as there was no statutory
definition.
Response: Recognizing the concerns raised by the comments received
we revised the final rule to include the phrase ``where applicable''
and have deleted the phrase ``Developmental Disabilities Network''.
Commenters indicated that there was no legislative basis for this State
Plan reporting requirement to be prepared by the Councils. Please note
section 122(c)(5)(N) of the Act provides ``* * * the plan shall contain
such additional information and assurances as the Secretary may find
necessary to carry out the provisions and purposes of this part.'' We
want to reiterate that though Protection and Advocacy Systems and
University Affiliated Programs have individual roles and
responsibilities that are separate and distinct from each other and the
Developmental Disabilities Council, the Act requires their membership
on the Council. Council reporting of collaborative efforts through the
State Plan highlights the systems change role of the Council. It should
also be noted that these final rules contain requirements for both the
Protection and Advocacy Systems and the University Affiliated Programs
to document collaborative efforts with the Developmental Disabilities
Council (see Sec. 1386.23 Periodic Reports, Statement of Objectives and
Priorities, (c) and (d) (3), (4), and (5); Sec. 1388.1 Definitions,
collaboration and Sec. 1388.4 Program criteria-governance and
administration, paragraph (k)).
Comments: Comments on the proposed language regarding short-term
demonstrations, paragraph (e), Sec. 1386.30 State Plan requirements,
concerned the specific time-frame limitation of three years. Commenters
recognized that Councils should not be in the service delivery
business, however, Councils indicated that they needed more flexibility
to fund systems change projects such as advocacy training for longer
periods of time. Adding the phrase ``direct care projects'' and
``direct services'' were recommended to address these points.
Also, language was recommended to include information on estimated
project duration and a description of how the services will be
continued without Developmental Disabilities program funds in the State
Plan.
Response: In the final rule, we used language from ADD-IM-95-2,
issued February 20, 1995, Use of Part B Funds in Funding Time-Limited
Demonstrations and Other Projects in which we addressed the issue of
Council funds supporting on-going direct services. We appreciate the
commenters reaffirmation that Councils should not be in the service
delivery business. We also recognize the concerns raised through the
comments so we have included the reference to ``direct services'' and
have deleted the time-frame of three-years to allow for greater Council
flexibility (see paragraph (e)(1)). The final rule also reflects the
comments on the State Plan information regarding such demonstration
projects (see paragraph (e)(2)).
Comments: Several comments were received on paragraph (f)(4) of
Sec. 1386.30 State Plan requirements, which addressed budgeting, staff
hiring and supervision and staff assignment. Commenters indicated that
there continues to be State interference regarding the work of the
Councils. The commenters overall concern with the proposed language was
that in our attempts to clarify ``consistent with State law'' we went
beyond the intent of the statutory change, which was to provide
Councils with more flexibility than most States provide in their
budgeting and personnel activities.
Response: We have not revised the proposed language of the NPRM in
the final rule. Such language reiterates that the State Developmental
Disabilities Council shall follow the requirements of section 124(c)
(8), (9), and (10) regarding budgeting, staff hiring and supervision
and staff assignment. In relation to the concerns about State
interference, we have included regulations to cover this issue, in
paragraph (a) of Sec. 1386.34, Designated State Agency.
Section 1386.31 State Plan Submittal and Approval
Comments: We received comments on paragraphs (a) and (b) of the
proposed regulations for Sec. 1386.31 State Plan submittal and
approval. Overall, the comments indicated that two rounds of public
hearings were overly complex and burdensome and created too long a
timeframe for the State Plan preparation. An issue was raised as to why
public notices would be from the Governor or the Governor's designee as
the development/preparation of the State Plan is the responsibility of
the Council. Also, comments expressed concern as to why the Governor
was still referenced as approving the State Plan.
Response: We concur with the comments that the process should be
simplified and that the Council should perform all requirements tied to
the preparation and submission of the State Plan. Paragraph (a) of the
final rule has been revised to indicate that the Council shall issue a
public notice about the availability of the proposed State Plan or
State Plan amendment(s) for comment and that there is only one 45 day
review period. The notice shall be published in accessible formats. The
Council would then take into account the comments received and respond
in the State Plan to significant comments and suggestions. The rule
then indicates that a summary of the Council's response to the State
Plan comments shall be submitted with the State Plan and made available
for public review. This document shall be made available in accessible
formats upon request. We recognize that the 1994 amendments greatly
increase the independence of Councils but it seems questionable whether
the amendments were meant to deprive the Governor of his or her
authority to give the plan final approval. Upon further review, we
decided to delete paragraph (b) of the NPRM and to keep the language of
the paragraph in the current regulation on this matter, which is now
paragraph (a) in the current regulations but will be renumbered
paragraph (b) when this final rule is codified.
Section 1386.32 Periodic Reports: Federal Assistance to State
Developmental Disabilities Councils
Comments: We received comments on paragraph (b) of this section
opposing the Program Performance Report being in a mandated format.
Response: We concur with the comments on the Council Program
Performance Report and have revised paragraph (b) of the final rule to
indicate that pursuant to section 107(a) of the Act (42 U.S.C 6006a),
the State Developmental Disabilities Council shall submit an Annual
Program Performance Report in a form that facilitates Council reporting
of results of activities required under sections 122 and 124 of the
Act. The report shall be submitted to the appropriate Regional Office,
by January 1 of each year. At this time ADD is working with Councils on
the development of reporting guidelines that will result in program
performance measures as required by the Government Performance Results
Act (GPRA) and such guidelines will also be used as part of an ADD
Management
[[Page 51150]]
Information System where reporting could be done electronically.
Section 1386.33 Protection of Employee's Interests
Comments: We received several comments on this section. One
commenter asked that we include the term ``assurance'' to highlight
that this is an assurance tied to the State Plan. Two other commenters
wanted the current regulation to stand. One commenter wanted
significant policy changes made to the current regulation.
Response: We included the term ``assure'' in this section as
requested. However, we have not changed the rest of the proposed
section as it is current policy based on section 122(c)(5)(K) of the
Act (42 U.S.C. 6022).
Section 1386.34 Designated State Agency
Comment: A comment was received regarding the responsibilities of
the Designated State Agency and the State Plan as included in
Sec. 1386.30.
Response: Paragraph (a) of this section reiterates that the
Designated State Agency shall provide the assistance required under
section 124(d)(3)(C) of the Act in developing the State Plan.
Paragraphs (b), (c), and (d) reflect the appeals process. Only
editorial changes were made in the final rule. It should be noted that
ADD, for purposes of convenience in drafting this section, has referred
to the appeal by ``a majority'' of the non-State agency members of the
Council as an appeal by the ``Council''.
Section 1386.35 Allowable and Non-Allowable Costs for Federal
Assistance to State Developmental Disabilities Councils
Comment: Comments were received with suggested language to revise
paragraph (d) (2) and (3) of this section regarding variable match on
an activity by activity basis.
Response: We have modified the language of the NPRM as follows: In
paragraph (d)(1) we have revised the phrase ``priority area'' to
``projects or activities'', in relation to expenditures which require
no non-Federal aggregate participation. Paragraph (d)(2) indicates that
expenditures for ``priority areas'' now reads ``projects with
activities or products targeted to urban or rural'' poverty areas but
not carried out directly by the Council and Council staff, as described
in section 125A(a)(2) of the Act, shall have non-Federal participation
of at least 10% in the aggregate. The suggested language to include the
phrase ``The Council may elect to have a lower, or no match, for such
priority area activities'' was not included, see paragraph (d)(4).
Paragraph (d)(3) has been edited to provide that all other activities
not directly carried out by the Council and Council staff shall have
non-Federal participation of 25% in the aggregate. In accordance with
comments, a new paragraph (d)(4) has been added to indicate that the
Council may vary the non-Federal participation required on a project by
project or activity by activity basis (both poverty and non-poverty
activities), including allowing no non-Federal participation from
particular projects or activities as the Council deems appropriate so
long as the requirement for aggregate non-Federal participation is met.
Section 1386.37 Public Notice of Federal Onsite Review
Comments: We received a few comments indicating that this
requirement is not statutorily based for State Developmental
Disabilities Councils and that these reviews would place an
inappropriate burden on grantees for an activity that is the
Administration on Developmental Disabilities responsibility.
Response: We concur with the comments. This requirement has been
dropped.
Additional Comment: We received a comment to include language in
regulation to clarify that Councils may provide information to
policymakers pursuant to section 124(c)(4)(I) of the Act and that such
activities do not constitute lobbying.
Response: We plan to study this issue in more detail in cooperation
with all interested parties (Federal and Non-Federal) to find the best
approach for addressing concerns about lobbying activities. We will
issue further guidance following these discussions.
Part 1387--Projects of National Significance
Section 1387.1 General Requirements
Comments: A few comments were received on paragraph (d) of this
section. One commenter supported the language but indicated that some
national projects such as national surveys of program costs may not be
appropriate for local replication. The other commenter indicated that
all Projects of National Significance should be exemplary and
innovative, including all technical and data collection projects.
Response: We concur with the comment regarding local replication,
which is why the NPRM language included a reference to projects which
``otherwise meet the goals of part E of the Act''. Therefore no
language change is necessary with respect to local replication. We also
concur with the comment regarding all projects being exemplary and
innovative and we have revised the final rule accordingly.
Part 1388--University Affiliated Programs
Section 1388.1 Definitions
Comment: A commenter wanted the first example included in the
definition of ``capacity building'' to be revised to delete the
reference to the dental school and add language on the recruitment of
individuals with developmental disabilities and their families, local
community leaders, additional faculty and students to participate in
the UAP.
Response: We concur with this recommendation and have revised the
definition of capacity building accordingly.
Comment: A few commenters wanted to add the term ``cultural
diversity'' to the definition section. The language would read,
``Cultural diversity means that UAPs are characterized by their
commitment to involve individuals with disabilities, family members and
trainees from diverse cultural backgrounds in all levels of their
activities. This commitment to cultural diversity means that each UAP
must assure that individuals from racial and ethnic minority
backgrounds are fully included; that efforts are made to recruit
individuals from minority backgrounds into the field of developmental
disabilities; that specific efforts must be made to ensure that
individuals from minority backgrounds have effective and meaningful
opportunities for full participation in the developmental disabilities
service system; and that recruitment efforts at the levels of
preservice training, community training, practice, administration and
policymaking must focus on bringing larger numbers of racial and ethnic
minorities into the field in order to provide appropriate skills,
knowledge, role models, and sufficient personnel to address the growing
needs of an increasingly diverse population.''
Response: We concur with the addition of this term and the language
as written. Therefore, ``cultural diversity'' has been included in the
final rule.
Comment: A comment was received on the definition of ``culturally
competent manner'' with the request to drop the word ``manner''.
Response: We concur with this edit and have revised the final rule
accordingly.
[[Page 51151]]
Comment: A comment was received on the definition of ``lifespan
approach'' with the request to revise the language that UAP activities
address the needs of individuals with disabilities who are ``all'' ages
rather than ``various'' ages.
Response: We concur with this wording and the final rule has been
revised.
Comment: A commenter wanted to include the term ``research and
evaluation'' to the definition section. The language would read,
``Research and evaluation means the UAP refines its activities on the
basis of evaluation results. As members of the university community,
involvement in program-relevant research and development of new
knowledge are important components of UAPs.''
Response: We concur with the addition of this term and the language
as written. Therefore, ``research and evaluation'' has been included
into the final rules.
Section 1388.2 Program Criteria--Purpose
The program criteria of the final rule are considered as the
standards for the UAPs and include performance standards (see section
153(b) of the Act).
Comments: A few commenters requested that the regulations include
language that the program criteria are one part of the Quality
Enhancement System (QES) and provide a structure for self-assessment
and peer review of each UAP.
Response: We concur with these recommendations and have changed the
final rule to reflect these points. The QES was developed by ADD in
response to amendments to the Act. These amendments include a series of
quality assurance provisions for the UAP network. The QES is a holistic
approach to the development and maintenance of programs and services to
enable persons with developmental disabilities and their families to
achieve maximum potential. All UAPs use the QES.
Section 1388.3 Program Criteria--Mission
Comments: A few commenters wanted the language of the NPRM
regarding the Introduction to mission, Sec. 1388.3(a) revised to: (1)
Add language that the UAP is guided by the values of independence,
productivity, integration and inclusion of individuals with
developmental disabilities and their families and (2) include
``research and evaluation'' in the listing of activities to be
performed by UAPs. Also, the commenters recommended that the language
concerning the ``mission statement'' be removed.
Response: We concur with the recommended text and have incorporated
such language in the final regulation.
Comment: A comment was received on paragraph (b) of this section
requesting the word ``promotes'' be included before the phrase ``goals
of the university'' and that a listing of such goals be included,
``training, the development of new knowledge, and service.''
Response: We concur with this language and have changed the final
rule accordingly.
Comment: In paragraph (e) of this section we received a comment
requesting that we use the term ``mission'' rather than the phrase
goals, objectives, and activities and delete the word ``services'' and
replace it with the word ``attitudes''.
Response: We concur with these recommendations and have
incorporated this change in the final rule.
Comment: In paragraph (g) of this section we received a comment to
include the phrase ``be consistent with the mission statement'' in
relation to the UAP's goals, objectives, and activities.
Response: We agree with the recommended language and the final rule
has been revised.
Section 1388.4 Program Criteria--Governance and Administration
Comment: A commenter wanted the language of the NPRM revised
regarding the Introduction to governance and administration,
Sec. 1388.4(a). The revision centered around the inclusion of the
phrase independence, productivity, integration and inclusion of
individuals with developmental disabilities and their families.
Response: We concur with the recommended text and have incorporated
such language in the final regulation.
Comment: A commenter wanted the proposed language in paragraph (f)
expanded to include language indicating UAP senior professional staff
contribute to the university by participation on university committees,
collaboration with other university departments, and other university
community activities.
Response: We concur with the added language and have revised the
final regulation accordingly.
Comment: A comment was received on paragraph (q) regarding the use
of the phrase ``strategic planning''. This phrase is viewed as a
trademark so the phrase ``long range planning'' was suggested as a more
useful term.
Response: We agree with the recommended language and the final rule
has been changed.
Comment: A comment was received regarding paragraph (r) requesting
that ``UAP'' be inserted for clarification on which programs and
services are being evaluated.
Response: We concur with this edit and have modified the final
rule.
Comment: We received a recommendation for two additional program
criteria for this section regarding (1) UAP activities, programs, and
products being accessible to individuals with developmental
disabilities, families and the community and (2) commitment of the UAP
Director to the field of developmental disabilities.
Response: Regarding the comment on additional program criteria on
accessibility, this is adequately covered in Sec. 1385.9 of the current
regulation, Grants Administration Requirements, which cross references
to 45 CFR part 84, Nondiscrimination on the Basis of Handicap in
Program and Activities Receiving or Benefiting from Federal Financial
Assistance. With respect to the comment on adding program criteria for
the commitment of the UAP program Director, we have added paragraph (s)
which states that the UAP Director must demonstrate commitment to the
field of developmental disabilities and leadership and vision in
carrying out the mission of the UAP. There have been instances where
the current UAP Director has been replaced by the University with
someone who has experience in the health/medical field but none in the
social services field. It is important that the director know all
aspects of the field of developmental disabilities because UAPs must
develop and execute inter-disciplinary training for people going into
the field of developmentally disabilities which includes, social
workers, teachers, paraprofessionals, etc., not just medical personnel.
Section 1388.5 Program Criteria--Preparation of Personnel
Comment: In relation to paragraph (a), program criteria on UAP
interdisciplinary training programs, a commenter wanted the phrase ``at
the preservice level'' deleted and the phrase ``reflect state-of-the-
art practices'' be used in its place. Also, it was recommended that the
phrase ``to promote the independence, productivity, integration and
inclusion of individuals with developmental disabilities and their
families'' be referenced.
[[Page 51152]]
Response: We concur with these recommendations and have made these
changes to the final regulations.
Comment: A commenter recommended revised language for paragraph
(b). That paragraph read as follows with the added language in quotes:
(b) Interdisciplinary training programs must be based on identified
personnel preparation needs ``and have identified outcomes that are
consistent with the mission and goals of the UAP.''
Response: We concur with the recommended language and have modified
the final regulation accordingly.
Comment: A comment was received regarding paragraph (c) with the
suggestion being made that the term ``academic'' be included in
relation to trainees receiving credit for participation in UAP training
programs.
Response: We concur with this change and have added this word to
the final language.
Comments: A few commenters requested that paragraph (e) be revised
to include language that the UAP must encourage graduates to work in
``situations where they promote the independence, productivity,
integration and inclusion of people with developmental disabilities and
their families.''
Response: We agree with this recommendation and have revised the
regulation accordingly.
Comment: A commenter wanted a new program criteria regarding
training and research and dissemination efforts added to this section.
Res
FR Doc. 96-24508 Developmental Disabilities Program
ponse. We have reviewed the suggested language and concur with
most of the ideas presented but have edited the language. We did not
include the phrase ``trainees may become active participants in the
creation of new knowledge throughout their careers'' as this language
does not relate to the compliance of the UAP and training requirements
under the Act. We have included this criteria as paragraph (h) of
Sec. 1388.5 in the final rule. It reads: (h) The UAP core curriculum
must prepare trainees to be active participants in research and
dissemination efforts. In addition, the curriculum must prepare
trainees to be consumers of research as it informs practice and policy.
Section 1388.6 Program Criteria--Services and Supports
Comment: We received several comments on paragraph (a) of this
section, Introduction to services and supports. It was recommended that
we include language that the UAP engage in a variety of system
interventions and may also engage in a variety of individual
interventions ``to promote independence, productivity, integration and
inclusion of individuals with developmental disabilities and their
families.''
Response: We concur with this recommendation and have changed the
regulation accordingly.
Comment: We received a comment on paragraph (b) of this section
requesting significant changes to the NPRM language.
Response: We concur with the recommended language for
Sec. 1388.6(b) and have incorporated the language into the final rule.
The revised language indicates that UAP community training and
technical assistance activities must: (1) Use capacity building
strategies to strengthen the capability of communities, systems and
service providers; (2) plan collaboratively; (3) target to a wide range
of audiences, including individuals with disabilities, family members,
service and support personnel, and community members; (4) plan and be
structured in a manner that facilitates the participation of targeted
audiences; and (5) address the unique needs of individuals with
developmental disabilities and their families from diverse cultural and
ethnic groups.
Comment: A commenter requested the addition of a sentence to the
language proposed in paragraph (c)(1) of this section indicating that
``the UAP must maintain cooperative relationships with other community
service providers, including specialized state and local providers,
including specialized state and local provider agencies.''
Response: We concur with the recommended language and have
incorporated it into the final rule.
Section 1388.7 Program Criteria--Dissemination
Comment: In paragraph (a) of this section, a commenter recommended
that the phrase ``best practices'' be added to the criteria regarding
dissemination of information. Also, two comments were received
requesting the addition of the following language. ``Dissemination
activities promote the independence, productivity, integration and
inclusion of individuals with developmental disabilities and their
families.''
Response: We concur with these recommendations and have revised the
final rule accordingly.
Comment: A commenter asked that we include in paragraph (b)
reference to the fact that the UAP must be identified ``by individuals
with developmental disabilities and their families, community members,
state agencies and other provider and advocacy organizations'' as a
resource for information, produce a variety of products to promote
public awareness and visibility of the UAP, and facilitate replication
of best practices.
Response: We agree with the suggested addition and have included it
in the final rule with some modification for clarification purposes.
Comment: A commenter requested another program criteria for this
section.
Response: We concur and have placed the following language in
paragraph (i) of this section: (i) The UAP must contribute to the
development of knowledge base through publications and presentations,
including those based on research and evaluation conducted at the UAP.
Section 1388.9 Peer Review
Comment: A commenter requested that we include language in
paragraph (a) of this section which indicates that the peer review
process is ``to provide the UAP with technical assistance and other
recommendations to improve program quality and enhance response to
program mandates.''
Response: We do not concur with this language to be included in the
final regulation. The provision of technical assistance is an
administrative function of the Administration on Developmental
Disabilities and is provided on an as needed basis. The Program
Criteria are requirements for the University Affiliated Program, not
the administering agency.
Impact Analysis
Executive Order 12866
Executive Order 12866 requires that regulations be reviewed to
ensure that they are consistent with the priorities and principles set
forth in the Executive Order. The Department has determined that this
rule is consistent with these priorities and principles. An assessment
of the costs and benefits of available regulatory alternatives
(including not regulating) demonstrated that the approach taken in the
regulation is the most cost-effective and least burdensome while still
achieving the regulatory objectives.
The final rule amends current regulation to implement changes made
by the Developmental Disabilities Assistance and Bill of Rights Act
Amendments of 1990 (Pub. L. 101-496 and by the 1994 Amendments (Pub. L.
103-230). The regulations provide guidance on redesignation of the
Protection and Advocacy agency and the appeal process; include
regulations on the Protection and Advocacy annual statement of
objectives; address State
[[Page 51153]]
Developmental Disabilities Council responsibilities and those of the
Designated State Agency; set new program standards for the University
Affiliated Program; and make other clarifying, technical, and
conforming changes.
We estimate that these regulations will not result in additional
costs to the Federal government, the States, universities and any other
organizations to which they may apply.
Regulatory Flexibility Act of 1980
Consistent with the Regulatory Flexibility Act (5 U.S.C. Ch.6), we
try to anticipate and reduce the impact of rules and paperwork
requirements on small businesses. For each rule with a ``significant
economic impact on a substantial number of small entities'', we prepare
an analysis describing the rule's impact on small entities. The primary
impact of these regulations is on the States, which are not ``small
entities'' within the meaning of the Act. However, they will affect
small private institutions providing services to individuals with
developmental disabilities. This impact will be minimal in that the
institutions will simply be subject to review at no cost when a
complaint is made against them. For these reasons, the Secretary
certifies that these rules will not have a significant impact on a
substantial number of small entities.
Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995, no persons are required
to respond to a collection of information unless it displays a valid
OMB control number. The valid OMB control number assigned to the
collection of information in these final regulations is displayed at
the end of the affected section of the regulations.
This rule contains a new information collection requirement at
Sec. 1386.23(c), an annual statement of objectives and priorities of
the Protection and Advocacy system pursuant to section 142(a)(2)(C) of
the Act (42 U.S.C. 6042(a)(2)(C)). OMB cleared this requirement, under
control number 0970-0132 with an expiration date of August 31, 1998.
This final rule also contains an information collection requirement at
Sec. 1386.23(b) for which there is a current OMB control number 0348-
0039 (Standard Form 69). With regard to the remaining requirements
highlighted in the NPRM, for which OMB control numbers have expired,
ADD will submit them to OMB for reapproval in accordance with the
requirements of the Paperwork Reduction Act of 1995. The requirements
to be submitted for OMB reapproval are:
(1) Section 1386.23.(a), Protection and Advocacy Annual Program
Performance Report pursuant to Section 107(b) of the Act (42 U.S.C.
6006(b)) (expired OMB control number 0980-0160);
(2) Section 1386.30(c), State Plan for Federal Assistance for
Planning Priority Area Activities for Persons with Developmental
Disabilities pursuant to section 122 of the Act (42 U.S.C.6022)
(expired OMB control number 0980-0162);
(3) Section 13286.32(a) Deviation--Standard Form 269 Federal
Financial Assistance--State Developmental Disabilities Councils
(expired OMB control number 0980-0212); and
(4) Section 1386.32(b), State Developmental Disabilities Councils
Annual Program Performance Report pursuant to Section 107(a) of the Act
(42 U.S.C. 6006(a)) (expired OMB control number 0980-0172).
The Administration on Developmental Disabilities, (ADD) is working
with the State Developmental Councils and the Protection and Advocacy
agencies in the development of these reports. Such reports will include
information on the requirements of the Act and also will result in
program performance measures as required by the Government Performance
Results Act of 1993 (GPRA). Additionally, such reports are for use as
part of an ADD Management Information System where reporting could be
done electronically. Expected outcomes of the system include:
Verifiable progress in enhancing the quality of life for individuals
with developmental disabilities through improved program planning and
performance; improved data integrity; and the production of a more
efficient data collection and reporting mechanism.
In relation to the collection of information included in the NPRM,
we received seven comments from a national organization and six State
Developmental Disabilities Councils opposing the Program Performance
Report being in a mandated format (Sec. 1386.32(b)). Commenters
indicated that they must have the opportunity to review and comment on
the report before OMB approval. We concur with the comments on the
Council Program Performance Report and have revised the final rule
accordingly.
List of Subjects
45 CFR Part 1385
Disabled, Grant programs/education, Grant programs/social programs,
Reporting and recordkeeping requirements.
45 CFR Part 1386
Administrative practice and procedure, Disabled, Grant programs/
education, Grant programs/social programs, Reporting and recordkeeping
requirements.
45 CFR Part 1387
Disabled, Grant programs/education, Grant programs/social programs.
45 CFR Part 1388
Colleges and universities, Grant programs/education, Grant
programs/social programs, Satellite center, University affiliated
program.
(Catalog of Federal Domestic Assistance Program, Nos. 93.630
Developmental Disabilities Basic Support and 93.631 Developmental
Disabilities--Projects of National Significance, and 93.632
Developmental Disabilities--University Affiliated Program)
Approved: September 4, 1996.
Mary Jo Bane,
Assistant Secretary for Children and Families.
For the reasons set forth in the preamble, 45 CFR chapter XIII,
subchapter I is amended as follows:
Subchapter I--The Administration on Developmental Disabilities,
Developmental Disabilities Program
PART 1385--REQUIREMENTS APPLICABLE TO THE DEVELOPMENTAL
DISABILITIES PROGRAM
1. The authority citation for part 1385 continues to read as
follows:
Authority: 42 U.S.C. 6000 et seq.
2. Section 1385.1 is amended by revising paragraphs (a) and (b) and
republishing the introductory text to read as follows:
Sec. 1385.1 General.
Except as specified in Sec. 1385.4, the requirements in this part
are applicable to the following programs and projects:
(a) Federal Assistance to State Developmental Disabilities
Councils;
(b) Protection and Advocacy of the Rights of Individuals with
Developmental Disabilities;
* * * * *
3. Section 1385.3 is amended by revising the definitions of ADD and
Commissioner and adding alphabetically a definition for ACF,
Developmental Disability, and Protection and Advocacy Agency to read as
follows:
Sec. 1385.3 Definitions.
* * * * *
[[Page 51154]]
ACF means the Administration for Children and Families within the
Department of Health and Human Services.
* * * * *
ADD means the Administration on Developmental Disabilities, within
the Administration for Children and Families.
Commissioner means the Commissioner of the Administration on
Developmental Disabilities, Administration for Children and Families,
Department of Health and Human Services or his or her designee.
* * * * *
Developmental disability shall have the same meaning in 45 CFR
parts 1385, 1386, 1387, and 1388 as it does in the Developmental
Disabilities Act, section 102(8), which reads ``the term `developmental
disability' means a severe, chronic disability of an individual 5 years
of age or older that--
(1) Is attributable to a mental or physical impairment or
combination of mental and physical impairments;
(2) Is manifested before the individual attains age 22;
(3) Is likely to continue indefinitely;
(4) Results in substantial functional limitations in three or more
of the following areas of major life activity--
(i) Self-care;
(ii) Receptive and expressive language;
(iii) Learning;
(iv) Mobility;
(v) Self-direction;
(vi) Capacity for independent living; and
(vii) Economic self-sufficiency.
(5) Reflects the individual's need for a combination and sequence
of special, interdisciplinary, or generic services, supports, or other
assistance that is of lifelong or extended duration and is individually
planned and coordinated, except that such term, when applied to infants
and young children means individual from birth to age 5, inclusive, who
have substantial developmental delay or specific congenital or acquired
conditions with a high probability of resulting in developmental
disabilities if services are not provided.'' Such determination shall
be made on a case-by-case basis and any State eligibility definition of
developmental disability or policy statement which is more restrictive
than that of the Act does not apply as the Act takes precedence.
Protection and Advocacy Agency means the organization or agency
designated in a State to administer and operate a protection and
advocacy (P&A) system for individuals with developmental disabilities
under part C of the Developmental Disabilities Assistance and Bill of
Rights Act, as amended (A P&A System under part C is authorized to
investigate incidents of abuse and neglect regarding persons with
developmental disabilities; pursue administrative, legal and
appropriate remedies or approaches to ensure protection of, and
advocacy for, the rights of such individuals; and provide information
on and referral to programs and services addressing the needs of such
individuals (section 142(a)(2)(A).); and advocacy programs under the
Protection and Advocacy for Mentally Ill Individuals Act of 1986 (PAIMI
Act), as amended, (42 U.S.C. 10801 et seq.) the Protection and Advocacy
of Individual Rights Program (PAIR), (29 U.S.C. 794(e); and the
Technology-Related Assistance for Individuals With Disabilities Act of
1988, as amended (29 U.S.C. 2212(e)). The Protection and Advocacy
agency also may be designated by the Governor of a State to conduct the
Client Assistance Program (CAP) authorized by section 112 of the
Rehabilitation Act of 1973, as amended, (29 U.S.C. 732). Finally, the
Protection and Advocacy agency may provide advocacy services under
other Federal programs.
* * * * *
4. Section 1385.4 is revised to read as follows:
Sec. 1385.4 Rights of individuals with developmental disabilities.
(a) Section 110 of the Act, Rights of Individuals with
Developmental Disabilities (42 U.S.C. 6009) is applicable to the
programs authorized under the Act, except for the Protection and
Advocacy System.
(b) In order to comply with section 122(c)(5)(G) of the Act (42
U.S.C. 6022(c)(5)(G)), regarding the rights of individuals with
developmental disabilities, the State must meet the requirements of 45
CFR 1386.30(f)(2).
(c) Applications from university affiliated programs or for
projects of national significance grants must also contain an assurance
that the human rights of individuals assisted by these programs will be
protected consistent with section 110 (see section 153(c)(3) and
section 162(c)(3) of the Act).
Sec. 1385.5 [Removed and reserved]
5. Section 1385.5, Recovery of Federal funds used for construction
of facilities is removed and reserved.
6. Section 1385.6 is revised to read as follows:
Sec. 1385.6 Employment of individuals with disabilities.
Each grantee which receives Federal funding under the Act must meet
the requirements of section 109 of the Act (42 U.S.C. 6008) regarding
affirmative action. The grantee must take affirmative action to employ
and advance in employment and otherwise treat qualified individuals
with disabilities without discrimination based upon their physical or
mental disability in all employment practices such as the following:
Advertising, recruitment, employment, rates of pay or other forms of
compensation, selection for training, including apprenticeship,
upgrading, demotion or transfer, and layoff or termination. This
obligation is in addition to the requirements of 45 CFR part 84,
subpart B, prohibiting discrimination in employment practices on the
basis of disability in programs receiving assistance from the
Department. Recipients of funds under the Act also may be bound by the
provisions of the Americans with Disabilities Act (Pub. L. 101-336, 42
U.S.C. 12101 et seq.) with respect to employment of individuals with
disabilities. Failure to comply with section 109 of the Act may result
in loss of Federal funds under the Act. If a compliance action is
taken, the State will be given reasonable notice and an opportunity for
a hearing as provided in Subpart D of 45 CFR part 1386.
Sec. 1385.7 [Reserved]
7. Section 1385.7 Waivers, is removed and reserved.
8. Section 1385.8 is amended by revising the introductory text to
read as follows:
Sec. 1385.8 Formula for determining allotments.
The Commissioner will allocate funds appropriated under the Act for
the State Developmental Disabilities Councils and the Protection and
Advocacy Systems on the following basis:
* * * * *
9. Section 1385.9 is amended by revising the first sentence of
paragraph (a); revising paragraphs (b), (c), and (d) and adding a new
paragraph (e) to read as follows:
Sec. 1385.9 Grants administration requirements.
(a) The following parts of title 45 CFR apply to grants funded
under parts 1386 and 1388 of this chapter and to grants for Projects of
National Significance under section 162 of the Act (42 U.S.C. 6082).
* * * * *
[[Page 51155]]
(b) The Departmental Appeals Board also has jurisdiction over
appeals by grantees which have received grants under the University
Affiliated program or for Projects of National Significance. The scope
of the Board's jurisdiction concerning these appeals is described in 45
CFR part 16.
(c) The Departmental Appeals Board also has jurisdiction to decide
appeals brought by the States concerning any disallowances taken by the
Commissioner with respect to specific expenditures incurred by the
States or by contractors or subgrantees of States. This jurisdiction
relates to funds provided under the two formula programs--Part B of the
Act--Federal Assistance to State Developmental Disabilities Councils
and Part C of the Act--Protection and Advocacy of the Rights of
Individuals with Developmental Disabilities. Appeals filed by States
shall be decided in accordance with 45 CFR part 16.
(d) In making audits and examinations to any books, documents,
papers, and transcripts of records of State Developmental Disabilities
Councils, the University Affiliated Programs, and the Projects of
National Significance grantees and subgrantees, as provided for in 45
CFR part 74 and part 92, the Department will keep information about
individual clients confidential to the maximum extent permitted by law
and regulations.
(e) (1) The Department or other authorized Federal officials may
access client and case eligibility records or other records of the
Protection and Advocacy system for audit purposes and for purposes of
monitoring system compliance pursuant to section 104(b) of the Act.
However, such information will be limited pursuant to section 142(j) of
the Act. No personal identifying information such as name, address, and
social security number will be obtained. Only eligibility information
will be obtained regarding type and level of disability of individuals
being served by the P&A and the nature of the issue concerning which
the System represented an individual.
(2) Notwithstanding paragraph (e)(1)of this section, if an audit,
monitoring review, evaluation, or other investigation by the Department
produces evidence that the system has violated the Act or the
regulations, the system will bear the burden of proving its compliance.
The system's inability to establish compliance because of the
confidentiality of records will not relieve it of this responsibility.
The system may elect to obtain a release from all individuals
requesting or receiving services at the time of intake or application.
The release shall state only information directly related to client and
case eligibility will be subject to disclosure to officials of the
Department.
PART 1386--FORMULA GRANT PROGRAMS
10. The authority citation for Part 1386 continues to read as
follows:
Authority: 42 U.S.C. 6000 et seq.
Subpart A--Basic Requirements
11. Section 1386.1 is revised to read as follows:
Sec. 1386.1 General.
All rules under this subpart are applicable to both the State
Developmental Disabilities Councils and the Protection and Advocacy
Agencies.
12. Section 1386.2 is amended by revising paragraphs (b)(1), (c) to
read as follows:
Sec. 1386.2 Obligation of funds.
* * * * *
(b) (1) A State incurs an obligation for acquisition of personal
property or for the performance of work on the date it makes a binding,
legally enforceable, written commitment, or when the State
Developmental Disabilities Council enters into an Interagency Agreement
with an agency of State government for acquisition of personal property
or for the performance of work.
* * * * *
(c) (1) The Protection and Advocacy System may elect to treat entry
of an appearance in judicial and administrative proceedings on behalf
of an individual with a developmental disability as a basis for
obligating funds for the litigation costs. The amount of the funds
obligated must not exceed a reasonable estimate of the costs, and the
way the estimate was calculated must be documented.
(2) For the purpose of this paragraph, litigation costs mean
expenses for court costs, depositions, expert witness fees, travel in
connection with a case and similar costs and costs resulting from
litigation in which the agency has represented an individual with
developmental disabilities (e.g. monitoring court orders, consent
decrees), but not for salaries of employees of the Protection and
Advocacy agency. All funds made available for Federal Assistance to
State Developmental Disabilities Councils and to the Protection and
Advocacy System obligated under this paragraph are subject to the
requirement of paragraph (a) of this section. These funds, if
reobligated, may be reobligated only within a two year period beginning
with the first day of the Federal fiscal year in which the funds were
originally awarded.
Sec. 1386.4 [Reserved]
13. Sec. 1386.4, Eligibility for services is removed and reserved.
14. The heading of subpart B is revised to read as follows:
Subpart B-- State System for Protection and Advocacy of the Rights
of Individuals with Developmental Disabilities
15. A new section 1386.19 is added to include definitions to read
as follows:
Sec. 1386.19 Definitions.
As used in Secs. 1386.20, 1386.21, 1386.22 and 1386.25 of this part
the following definitions apply:
Abuse means any act or failure to act which was performed, or which
was failed to be performed, knowingly, recklessly, or intentionally,
and which caused, or may have caused, injury or death to an individual
with developmental disabilities, and includes such acts as: Verbal,
nonverbal, mental and emotional harassment; rape or sexual assault;
striking; the use of excessive force when placing such an individual in
bodily restraints; the use of bodily or chemical restraints which is
not in compliance with Federal and State laws and regulations or any
other practice which is likely to cause immediate physical or
psychological harm or result in long term harm if such practices
continue.
Complaint includes, but is not limited to any report or
communication, whether formal or informal, written or oral, received by
the system including media accounts, newspaper articles, telephone
calls (including anonymous calls), from any source alleging abuse or
neglect of an individual with a developmental disability.
Designating Official means the Governor or other State official,
who is empowered by the Governor or State legislature to designate the
State official or public or private agency to be accountable for the
proper use of funds by and conduct of the State Protection and Advocacy
agency.
Facility includes any setting that provides care, treatment,
services and habilitation, even if only ``as needed'' or under a
contractual arrangement. Facilities include, but are not limited to the
following:
Community living arrangements (e.g., group homes, board and care
homes, individual residences and apartments), day programs, juvenile
detention
[[Page 51156]]
centers, hospitals, nursing homes, homeless shelters, jails and
prisons.
Full Investigation means access to facilities, clients and records
authorized under these regulations, that is necessary for a protection
and advocacy (P&A) system to make a determination about whether alleged
or suspected instances of abuse and neglect are taking place or have
taken place. Full investigations may be conducted independently or in
cooperation with other agencies authorized to conduct similar
investigations.
Legal Guardian, conservator and legal representative all mean an
individual appointed and regularly reviewed by a State court or agency
empowered under State law to appoint and review such officers and
having authority to make all decisions on behalf of individuals with
developmental disabilities. It does not include persons acting only as
a representative payee, person acting only to handle financial
payments, attorneys or other persons acting on behalf of an individual
with developmental disabilities only in individual legal matters, or
officials responsible for the provision of treatment or habilitation
services to an individual with developmental disabilities or their
designees.
Neglect means a negligent act or omission by an individual
responsible for providing treatment or habilitation services which
caused or may have caused injury or death to an individual with
developmental disabilities or which placed an individual with
developmental disabilities at risk of injury or death, and includes
acts or omissions such as failure to: establish or carry out an
appropriate individual program plan or treatment plan (including a
discharge plan); provide adequate nutrition, clothing, or health care
to an individual with developmental disabilities; provide a safe
environment which also includes failure to maintain adequate numbers of
trained staff.
Probable cause means a reasonable ground for belief that an
individual with developmental disabilities has been, or may be, subject
to abuse or neglect. The individual making such determination may base
the decision on reasonable inferences drawn from his or her experience
or training regarding similar incidents, conditions or problems that
are usually associated with abuse or neglect.
16. Section 1386.20 is amended by revising the heading; revising
paragraphs (a), (d), and (e); and adding a new paragraph (f) to read as
follows:
Sec. 1386.20 Designated State Protection and Advocacy agency.
(a) The designating official must designate the State official or
public or private agency to be accountable for proper use of funds and
conduct of the Protection and Advocacy agency.
* * * * *
(d) (1) Prior to any redesignation of the agency which administers
and operates the State Protection and Advocacy (P&A) System, the
designating official must give written notice of the intention to make
the redesignation to the agency currently administering and operating
the State Protection and Advocacy System by registered or certified
mail. The notice must indicate that the proposed redesignation is being
made for good cause. The designating official must also publish a
public notice of the proposed action. The agency and the public shall
have a reasonable period of time, but not less than 45 days to respond
to the notice.
(2) The public notice must include:
(i) The Federal requirements for the Protection and Advocacy system
for individuals with developmental disabilities (section 142 of the
Act); and, where applicable, the requirements of other Federal advocacy
programs administered by the State Protection and Advocacy System.
(ii) The goals and function of the State's Protection and Advocacy
System including the current Statement of Objectives and Priorities;
(iii) The name and address of the agency currently designated to
administer and operate the Protection and Advocacy system; and an
indication of whether the agency also operates other Federal advocacy
programs;
(iv) A description of the current Protection and Advocacy agency
and the system it administers and operates including, as applicable,
descriptions of other Federal advocacy programs it operates;
(v) A clear and detailed explanation of the good cause for the
proposed redesignation;
(vi) A statement suggesting that interested persons may wish to
write the current State Protection and Advocacy agency at the address
provided in paragraph (d)(2)(iii) of this section to obtain a copy of
its response to the notice required by paragraph (d)(1)of this section.
Copies shall be provided in accessible formats to individuals with
disabilities upon request;
(vii) The name of the new agency proposed to administer and operate
the Protection and Advocacy System under the Developmental Disabilities
program. This agency will be eligible to administer other Federal
advocacy programs;
(viii) A description of the system which the new agency would
administer and operate, including a description of all other Federal
advocacy programs the agency would operate;
(ix) The timetable for assumption of operations by the new agency
and the estimated costs of any transfer and start-up operations; and
(x) A statement of assurance that the proposed new designated State
P&A System will continue to serve existing clients and cases of the
current P&A system or refer them to other sources of legal advocacy as
appropriate, without disruption.
(3) The public notice as required by paragraph (d)(1) of this
section, must be in a format accessible to individuals with
developmental disabilities or their representatives, e.g., tape,
diskette. The designating official must provide for publication of the
notice of the proposed redesignation using the State register, State-
wide newspapers, public service announcements on radio and television,
or any other legally equivalent process. Copies of the notice must be
made generally available to individuals with developmental disabilities
and mental illness who live in residential facilities through posting
or some other means.
(4) After the expiration of the public comment period required in
paragraph (d)(1) of this section, the designating official must conduct
a public hearing on the redesignation proposal. After consideration of
all public and agency comments, the designating official must give
notice of the final decision to the currently designated agency and the
public through the same means used under paragraph (d)(3) of this
section. This notice must include a clear and detailed explanation of
the good cause finding. If the notice to the currently designated
agency states that the redesignation will take place, it also must
inform the agency of its right to appeal this decision to the Assistant
Secretary, Administration for Children and Families and provide a
summary of the public comments received in regard to the notice of
intent to redesignate and the results of the public hearing and its
responses to those comments. The redesignation shall not be effective
until 10 working days after notifying the current Protection and
Advocacy agency or, if the agency appeals, until the Assistant
Secretary has considered the appeal.
(e) (1) Following notification pursuant to paragraph (d)(4) of this
section, the
[[Page 51157]]
Protection and Advocacy agency which is the subject of such action, may
appeal the redesignation to the Assistant Secretary. To do so, the
Protection and Advocacy agency must submit an appeal in writing to the
Assistant Secretary within 20 days of receiving official notification
under paragraph (d)(4) of this section, with a separate copy sent by
registered or certified mail to the designating official who made the
decision concerning redesignation.
(2) In the event that the agency subject to redesignation does
exercise its right to appeal under paragraph (e)(1) of this section,
the designating official must give public notice of the Assistant
Secretary's final decision regarding the appeal through the same means
utilized under paragraph (d)(3) of this section within 10 working days
of receipt of the Assistant Secretary's final decision under paragraph
(e)(6) of this section.
(3) The designating official within 10 working days from the
receipt of a copy of the appeal must provide written comments to the
Assistant Secretary (with a copy sent by registered or certified mail
to the Protection and Advocacy agency appealing under paragraph (e)(1)
of this section), or withdraw the redesignation. The comments must
include a summary of the public comments received in regard to the
notice of intent to redesignate and the results of the public hearing
and its responses to those comments.
(4) In the event that the designating official withdraws the
redesignation while under appeal pursuant to paragraph (e)(1) of this
section, the designating official must notify the Assistant Secretary,
and the current agency, and must give public notice of his or her
decision through the same means utilized under paragraph (d)(3) of this
section.
(5) As part of their submission under paragraph (e)(1) or (e)(3) of
this section, either party may request, and the Assistant Secretary may
grant, an opportunity for an informal meeting with the Assistant
Secretary at which representatives of both parties will present their
views on the issues in the appeal. The meeting will be held within 20
working days of the submission of written comments by the designating
official under paragraph (e)(2) of this section. The Assistant
Secretary will promptly notify the parties of the date and place of the
meeting.
(6) Within 30 days of the informal meeting under paragraph (e)(5)
of this section, or, if there is no informal meeting under paragraph
(e)(5) of this section, within 30 days of the submission under
paragraph (e)(3) of this section, the Assistant Secretary will issue to
the parties a final written decision on whether the redesignation was
for good cause as defined in paragraph (d)(1) of this section. The
Assistant Secretary will consult with Federal advocacy programs that
will be directly affected by the proposed redesignation in making a
final decision on the appeal.
(f) (1) Within 30 days after the redesignation becomes effective
under paragraph (d)(4) of this section, the designating official must
submit an assurance to the Assistant Secretary that the newly
designated Protection and Advocacy agency meets the requirements of the
statute and the regulations.
(2) In the event that the Protection and Advocacy agency subject to
redesignation does not exercise its rights to appeal within the period
provided under paragraph (e)(1) of this section, the designating
official must provide to the Assistant Secretary documentation that the
agency was redesignated for good cause. Such documentation must clearly
demonstrate that the Protection and Advocacy agency subject to
redesignation was not redesignated for any actions or activities which
were carried out under section 142 of the Act, these regulations or any
other Federal advocacy program's legislation or regulations.
17. Section 1386.21 is revised to read as follows:
Sec. 1386.21 Requirements and authority of the Protection and
Advocacy System.
(a) In order for a State to receive Federal financial participation
for Protection and Advocacy activities under this subpart, as well as
the State Developmental Disabilities Council activities (subpart C of
this part), the Protection and Advocacy System must meet the
requirements of section 142 of the Act (42 U.S.C. 6042) and that system
must be operational.
(b) Allotments must be used to supplement and not to supplant the
level of non-federal funds available in the State for activities under
the Act, which shall include activities on behalf of individuals with
developmental disabilities to remedy abuse, neglect and violations of
rights as well and information and referral activities.
(c) A Protection and Advocacy System shall not implement a policy
or practice restricting the remedies which may be sought on the behalf
of individuals with developmental disabilities or compromising the
authority of the Protection and Advocacy System (P&A) to pursue such
remedies through litigation, legal action or other forms of advocacy.
However, the above requirement does not prevent the P&A from developing
case or client acceptance criteria as part of the annual priorities
identified by the P&A system as described in Sec. 1386.23(c) of this
part. Clients must be informed at the time they apply for services of
such criteria.
(d) A P&A system shall be free from hiring freezes, reductions in
force, prohibitions on staff travel, or other policies, imposed by the
State, to the extent that such policies would impact system program
staff or functions funded with Federal funds and would prevent the
system from carrying out its mandates under the Act.
(e) A Protection and Advocacy System shall have sufficient staff,
qualified by training and experience, to carry out the responsibilities
of the system in accordance with the priorities of the system and
requirements of the Act, including the investigation of allegations of
abuse, neglect and representations of individuals with developmental
disabilities regarding rights violations.
(f) A Protection and Advocacy System may exercise its authority
under State law where the authority exceeds the authority required by
the Developmental Disabilities Assistance and Bill of Rights Act, as
amended. However, State law must not diminish the required authority of
the Protection and Advocacy System.
(g) Each P&A system that is a public system without a multimember
governing or advisory board must establish an advisory council in order
to provide a voice for individuals with developmental disabilities. The
Advisory Council shall advise the P&A on program policies and
priorities and shall be comprised of a majority of individuals with
developmental disabilities who are eligible for services, or have
received or are receiving services or parents or family members,
(including those representing individuals with developmental
disabilities who live in institutions and home and community based
settings), guardians, advocates, or authorized representatives of such
individuals.
(h) Prior to any Federal review of the State program, a 30 day
notice and an opportunity for public comment must be provided.
Reasonable effort shall be made by the appropriate Regional Office to
seek comments through notification to major disability advocacy groups,
the State Bar, other disability law resources, the State Developmental
Disabilities Council and the University Affiliated Program, for
example, through newsletters and publications of those organizations.
The findings of public comments may be consolidated if
[[Page 51158]]
sufficiently similar issues are raised and they shall be included in
the report of the onsite visit.
(i) Before the P&A system releases information to individuals not
otherwise authorized to receive it, the P&A must obtain written consent
from the client requesting assistance, if competent, or his or her
guardian.
18. Section 1386.22 is added to read as follows:
Sec. 1386.22 Access to records, facilities and individuals with
developmental disabilities.
(a) Access to records--A protection and advocacy (P&A) system shall
have access to the records of any of the following individuals with
developmental disabilities:
(1) An individual who is a client of the system, including any
person who has requested assistance from the system, if authorized by
that individual or their legal guardian, conservator or other legal
representative.
(2) An individual, including an individual who has died or whose
whereabouts is unknown, to whom all of the following conditions apply:
(i) The individual, due to his or her mental or physical condition
is unable to authorize the system to have access;
(ii) The individual does not have a legal guardian, conservator or
other legal representative, or the individual's guardian is the State
(or one of its political subdivisions); and
(iii) With respect to whom a complaint has been received by the
system or the system has probable cause (which can be the result of
monitoring or other activities including media reports and newspaper
articles) to believe that such individual has been subject to abuse or
neglect.
(3) An individual who has a legal guardian, conservator, or other
legal representative, with respect to whom a complaint has been
received by the system or with respect to whom the system has
determined that there is probable cause to believe that the health or
safety of the individual is in serious and immediate jeopardy, whenever
all the following conditions exist:
(i) The system has made a good faith effort to contact the
representative upon receipt of the representative's name and address;
(ii) The system has offered assistance to the representative to
resolve the situation; and
(iii) The representative has failed or refused to act on behalf of
the individual.
(b) Individual records to which P&A systems must have access under
section 142(A)(2)(I) (whether written or in another medium, draft or
final, including handwritten notes, electronic files, photographs or
video or audio tape records) shall include, but shall not be limited
to:
(1) Records prepared or received in the course of providing intake,
assessment, evaluation, education, training and other supportive
services, including medical records, financial records, and monitoring
and other reports prepared or received by a member of the staff of a
facility that is providing care or treatment;
(2) Reports prepared by an agency charged with investigating
incidents of abuse or neglect, injury or death occurring at a facility
or while the individual with a developmental disability is under the
care of a member of the staff of a facility, or by or for such
facility, that describe any or all of the following:
(i) Abuse, neglect, injury, death;
(ii) The steps taken to investigate the incidents;
(iii) Reports and records, including personnel records, prepared or
maintained by the facility in connection with such reports of
incidents; or,
(iv) Supporting information that was relied upon in creating a
report, including all information and records which describe persons
who were interviewed, physical and documentary evidence that was
reviewed, and the related investigative findings; and
(3) Discharge planning records.
(c) Information in the possession of a facility which must be
available to P&A systems in investigating instances of abuse and
neglect under section 142(a)(2)(B) (whether written or in another
medium, draft or final, including hand written notes, electronic files,
photographs or video or audio tape records) shall include, but not be
limited to:
(1) Information in reports prepared by individuals and entities
performing certification or licensure reviews, or by professional
accreditation organizations, as well as related assessments prepared
for a facility by its staff, contractors or related entities, except
that nothing in this section is intended to preempt State law
protection records produced by medical care evaluation or peer review
committees.
(2) Information in professional, performance, building or other
safety standards, demographic and statistical information relating to a
facility.
(d) A system shall be permitted to inspect and copy information and
records, subject to a reasonable charge to offset duplicating costs.
(e) The client's record is the property of the Protection and
Advocacy System which must protect it from loss, damage, tampering, or
use by unauthorized individuals. The Protection and Advocacy System
must:
(1) Keep confidential all information contained in a client's
records, which includes, but is not limited to, information contained
in an automated data bank. This regulation does not limit access by
parents or legal guardians of minors unless prohibited by State or
Federal law, court order or the rules of attorney-client privilege;
(2) Have written policies governing access to, storage of,
duplication of, and release of information from the client's record;
and
(3) Be authorized to keep confidential the names and identity of
individuals who report incidents of abuse and neglect and individuls
who furnish information that forms the basis for a determination that
probable cause exists.
(f) Access to Facilities and Individuals with Developmental
Disabilities--A system shall have reasonable unaccompanied access to
public and private facilities which provide services, supports, and
other assistance for individuals with developmental disabilities in the
State when necessary to conduct a full investigation of an incident of
abuse or neglect under section 142(a)(2)(B) of the Act. This authority
shall include the opportunity: to interview any facility service
recipient, employee, or other person, including the person thought to
be the victim of such abuse, who might be reasonably believed by the
system to have knowledge of the incident under investigation; and to
inspect, view and photograph all areas of the facility's premises that
might be reasonably believed by the system to have been connected with
the incident under investigation.
(g) Under section 142(a)(2)(H) of the Act, the system and all of
its authorized agents shall have unaccompanied access to all residents
of a facility at reasonable times, which at a minimum shall include
normal working hours and visiting hours, for the purpose of:
(1) Providing information and training on, and referral to,
programs addressing the needs of individuals with developmental
disabilities, and the protection and advocacy services available from
the system, including the name, address, and telephone number of the
system and other information and training about individual rights; and
(2) Monitoring compliance with respect to the rights and safety of
service recipients.
(h) Unaccompanied access to residents of a facility shall include
the opportunity to meet and communicate
[[Page 51159]]
privately with such individuals regularly, both formally and
informally, by telephone, mail and in person.
(i) If a system is denied access to facilities and its programs,
individuals with developmental disabilities, or records covered by the
Act it shall be provided promptly with a written statement of reasons,
including, in the case of a denial for alleged lack of authorization,
the name and address of the legal guardian, conservator, or other legal
representative of an individual with developmental disabilities.
19. Section 1386.23 is revised to read as follows:
Sec. 1386.23 Periodic reports: Protection and Advocacy System.
(a) By January 1 of each year the Protection and Advocacy System
shall submit an Annual Program Performance Report as required in
section 107(b) of the Act, in a format designated by the Secretary.
(b) Financial status reports must be submitted by the Protection
and Advocacy Agency according to a frequency interval specified by the
Administration for Children and Families. In no case will such reports
be required more frequently than quarterly.
(c) By January 1 of each year, the Protection and Advocacy System
shall submit an Annual Statement of Objectives and Priorities, (SOP)
for the coming fiscal year as required under section 142(a)(2)(C) of
the Act.
(1) The SOP is a description and explanation of the priorities and
selection criteria for the system's individual advocacy caseload;
systemic advocacy work and training activities, and the outcomes which
it strives to accomplish.
(2) Where applicable, the SOP must include a description of how the
Protection and Advocacy System operates and how it coordinates the
Protection and Advocacy program for individuals with developmental
disabilities with other Protection and Advocacy (P&A) programs
administered by the State Protection and Advocacy System. This
description must address the System's intake process, internal and
external referrals of eligible clients, duplication and overlap of
services and eligibility, streamlining of advocacy services,
collaboration and sharing of information on service needs and
development of Statements of Objectives and Priorities for the various
advocacy programs.
(3) Priorities as established through the SOP serve as the basis
for P&As to determine which cases are selected in a given fiscal year.
P&As have the authority to turn down a request for assistance when it
is outside the scope of the SOP but they must inform individuals that
this is the basis for turning them down.
(d) Each fiscal year, the Protection and Advocacy Agency shall:
(1) Obtain formal public input on its Statement of Objectives and
Priorities;
(2) At a minimum, provide for a broad distribution of the proposed
Statement of Objectives and Priorities for the next fiscal year in a
manner accessible to individuals with developmental disabilities and
their representatives, allowing at least 45 days from the date of
distribution for comment;
(3) Provide to the State Developmental Disabilities Council and the
University Affiliated Program a copy of the proposed Statement of
Objectives and Priorities for comments concurrently with the public
notice;
(4) Incorporate or address any comments received through the public
input and any input received from the State Developmental Disabilities
Council and the University Affiliated Program in the final Statement
submitted to the Department; and
(5) Address how the Protection and Advocacy System; State
Developmental Disabilities Council; and the University Affiliated
Program will collaborate with each other and with other public and
private entities.
(The requirements under paragraph (b) are approved under control
number 0348-0039 by the Office of Management and Budget (OMB).
Information collection requirements contained in paragraph (c) are
approved under OMB control number 0970-0132 pursuant to sections
142(a)(2) (C) and (D) and section 107(b) of the Act.)
20. Section 1386.24 is amended by redesignating the introductory
text, paragraphs (a) and (b) as paragraphs (a) introductory text,
(a)(1) and (a)(2); revising newly redesignated paragraphs (a),
introductory text, and (a)(1); and adding a new paragraph (b) to read
as follows:
Sec. 1386.24 Non-allowable costs for the Protection and Advocacy
System.
(a) Federal financial participation is not allowable for:
(1) Costs incurred for activities on behalf of individuals with
developmental disabilities to solve problems not directly related to
their disabilities and which are faced by the general populace. Such
activities include but are not limited to: Preparation of wills,
divorce decrees, and real estate proceedings. Allowable costs in such
cases would include the Protection and Advocacy System providing
disability related technical assistance information and referral to
appropriate programs and services; and
(2) * * *
(b) Attorneys fees are considered program income pursuant to Part
74-Administration of Grants and Part 92-Uniform Administrative
Requirements for Grants and Cooperative Agreements to State and Local
Governments and must be added to the funds committed to the program and
used to further the objectives of the program. This requirement shall
apply to all attorneys fees, including those earned by contractors and
those received after the project period in which they were earned.
21. A new Sec. 1386.25 is added to read as follows:
Sec. 1386.25 Allowable litigation costs.
Allotments may be used to pay the otherwise allowable costs
incurred by a Protection and Advocacy System in bringing lawsuits in
its own right to redress incidents of abuse or neglect, discrimination
and other rights violations impacting on individuals with developmental
disabilities to obtain access to records and when it appears on behalf
of named plaintiffs or a class of plaintiff for such purposes.
22. The heading of subpart C is revised to read as follows:
Subpart C--Federal Assistance to State Developmental Disabilities
Councils
23. Section 1386.30 is amended by revising paragraphs (a) and
(c)(1); redesignating paragraph (e) as (f); revising the newly
redesignated paragraphs (f) republishing newly redesignated paragraph
(f), introductory text; (2) and (3) ; and adding new paragraphs (c)(3)
and (e) to read as follows:
Sec. 1386.30 State Plan requirements.
(a) In order to receive Federal financial assistance under this
subpart, each State Developmental Disabilities Council must prepare and
submit to the Secretary, and have in effect, a State Plan which meets
the requirements of sections 122 and 124 of the Act (42 U.S.C. 6022 and
6024) and these regulations. Development of the State Plan and
applicable annual amendments are responsibilities of the State
Developmental Disabilities Council. The Council will provide
opportunities for public input during the planning and development of
the State Plan and will consult with the Designated State Agency to
determine that the plan is not in conflict with
[[Page 51160]]
applicable State laws and to obtain appropriate State Plan assurances.
* * * * *
(c) * * *
(1) Identify the program unit(s) within the Designated State Agency
responsible for helping the Council to obtain assurances and fiscal and
other support services.
* * * * *
(3) Where applicable, describe activities in which the State's
Developmental Disabilities Council, Protection and Advocacy System
agency, and University Affiliated Program(s) collaborate to remove
barriers or address critical issues within the State and bring about
broad systems changes to benefit individuals with developmental
disabilities and, as appropriate, individuals with other disabilities.
* * * * *
(e) (1) The State Plan may provide for funding projects to
demonstrate new approaches to direct services which enhance the
independence, productivity, and integration and inclusion into the
community of individuals with developmental disabilities. Direct
service demonstrations must be short-term and include a strategy to
locate on-going funding from other sources. For each demonstration
funded, the State Plan must include an estimated period of the
project's duration and a brief description of how the services will be
continued without Federal developmental disabilities program funds.
Council funds may not be used to fund on-going services which should be
paid for by the State or other sources.
(2) The State plan may provide for funding of other projects or
activities, including but not limited to, studies, evaluation,
outreach, advocacy, self-advocacy, training, community supports, public
education, and prevention. Where extended periods of time are needed to
achieve desired results, these projects and activities need not be
time-limited.
(f) The State Plan must contain assurances that:
* * * * *
(2) The human rights of individuals with developmental disabilities
will be protected consistent with section 110 of the Act (42 U.S.C.
6009).
(3) Buildings used in connection with activities assisted under the
Plan must meet all applicable provisions of Federal and State laws
pertaining to accessibility, fire, health and safety standards.
(4) The State Developmental Disabilities Council shall follow the
requirements of section 124(c) (8), (9) and (10) of the Act regarding
budgeting, staff hiring and supervision and staff assignment. Budget
expenditures must be consistent with applicable State laws and policies
regarding grants and contracts and proper accounting and bookkeeping
practices and procedures. In relation to staff hiring, the clause
``consistent with State law'' in section 124(c)(9) means that the
hiring of State Developmental Disabilities Council staff must be done
in accordance with State personnel policies and procedures except that
a State shall not apply hiring freezes, reductions in force,
prohibitions on staff travel, or other policies, to the extent that
such policies would impact staff or functions funded with Federal funds
and would prevent the Council from carrying out its functions under the
Act.
24. Section 1386.31 is amended by revising the section heading,
redesignating the current paragraphs (a), (b), (c), and (d) as (b),
(c), (d), and (e), and adding a new paragraph (a) to read as follows:
Sec. 1386.31 State Plan submittal and approval.
(a) The Council shall issue a public notice about the availability
of the proposed State Plan or State Plan amendment(s) for comment. The
Notice shall be published in formats accessible to individuals with
developmental disabilities and the general public (e.g., tape,
diskette, public forums, newspapers) and shall provide a 45 day period
for public review and comment. The Council shall take into account
comments submitted within that period and respond in the State Plan to
significant comments and suggestions. A summary of the Council's
response to State Plan comments shall be submitted with the State Plan
and made available for public review. This document shall be made
available in accessible formats upon request.
* * * * *
25. Section 1386.32 is revised to read as follows:
Sec. 1386.32 Periodic reports: Federal assistance to State
Developmental Disabilities Councils.
(a) The Governor or appropriate State financial officer must submit
financial status reports on the programs funded under this subpart
according to a frequency interval which will be specified by the
Administration for Children and Families. In no case will such reports
be required more frequently than quarterly.
(b) Pursuant to section 107(a) of the Act (U.S.C. 6006a), the State
Developmental Disabilities Council shall submit an Annual Program
Performance Report in a form that facilitates Council reporting of
results of activities required under sections 122 and 124 of the Act.
The report shall be submitted to the appropriate Regional ACF office,
by January 1 of each year.
26. Section 1386.33 is amended by revising paragraph (a) as
follows:
Sec. 1386.33 Protection of employee's interests.
(a) Based on section 122(c)(5)(K) of the Act (42 U.S.C.
6022(c)(5)(K), the State plan must assure fair and equitable
arrangements to protect the interest of all institutional employees
affected by actions under the plan to provide community living
activities. Specific arrangements for the protection of affected
employees must be developed through negotiations between the
appropriate State authorities and employees or their representatives.
Fair and equitable arrangements must include procedures that provide
for the impartial resolution of disputes between the State and an
employee concerning the interpretation, application, and enforcement of
protection arrangements. The State must inform employees of the State's
decision to provide for community living activities.
* * * * *
27. Section 1386.34 is added to read as follows:
Sec. 1386.34 Designated State Agency.
(a) The Designated State Agency shall provide the required
assurances and other support services as requested by and negotiated
with the Council. These include:
(1) Provision of financial reporting and other services as provided
under section 124(d)(3)(C) of the Act; and
(2) Information and direction, as appropriate, on procedures on the
hiring, supervision and assignment of staff in accordance with State
law.
(b) If the State Developmental Disabilities Council requests a
review by the Governor (or legislature) of the Designated State Agency,
the Council must provide documentation of the reason for change and
recommend a preferred Designated State Agency.
(c) After the review is completed, a majority of the non-State
agency members of the Council may appeal to the Assistant Secretary for
a review of the designation of the designated State agency if the
Council's independence as an advocate is not assured because of the
actions or inactions of the designated State agency.
(d) The following steps apply to the appeal of the Governor's (or
[[Page 51161]]
legislature's) designation of the Designated State Agency.
(1) Prior to an appeal to the Assistant Secretary, Administration
for Children and Families, the State Developmental Disabilities
Council, must give a 30 day written notice, by certified mail, to the
Governor (or legislature) of the majority of non-State members'
intention to appeal the designation of the Designated State Agency.
(2) The appeal must clearly identify the grounds for the claim that
the Council's independence as an advocate is not assured because of the
actions or inactions of the designated State agency.
(3) Upon receipt of the appeal from the State Developmental
Disabilities Council, the Assistant Secretary will notify the State
Developmental Disabilities Council and the Governor (or legislature),
by certified mail, that the appeal has been received and will be acted
upon within 60 days. The Governor (or legislature) shall within 10
working days from the receipt of the Assistant Secretary's notification
provide written comments to the Assistant Secretary (with a copy sent
by registered or certified mail to the Council) on the claims in the
Council's appeal. Either party may request, and the Assistant Secretary
may grant, an opportunity for an informal meeting with the Assistant
Secretary at which representatives of both parties will present their
views on the issues in the appeal. The meeting will be held within 20
working days of the submission of written comments by the Governor (or
legislature). The Assistant Secretary will promptly notify the parties
of the date and place of the meeting.
(4) The Assistant Secretary will review the issue(s) and provide a
final written decision within 60 days following receipt of the State
Developmental Disabilities Council's appeal. If the determination is
made that the Designated State Agency should be redesignated, the
Governor (or legislature) must provide written assurance of compliance
within 45 days from receipt of the decision.
(5) During any time of this appeals process the State Developmental
Disabilities Council may withdraw such request if resolution has been
reached with the Governor (or legislature) on the designation of the
Designated State Agency. The Governor (or legislature) must notify the
Assistant Secretary in writing of such an occurrence.
(e) The designated State agency may authorize the Council use or
contract with State agencies other than the designated State agency to
perform functions of the designated State agency.
28. Section 1386.35 is amended by revising the heading and
paragraph (b)(1) and adding new paragraphs (d), (e), and (f) to read as
follows:
Sec. 1386.35 Allowable and non-allowable costs for Federal Assistance
to State Developmental Disabilities Councils.
* * * * *
(b) * * *
(1) Costs incurred by institutions or other residential or non-
residential programs which do not comply with the Congressional
findings with respect to the rights of individuals with developmental
disabilities in section 110 of the Act (42 U.S.C. 6009).
* * * * *
(d) For purposes of determining aggregate minimum State share of
expenditures, there are three categories of expenditures:
(1) Expenditures for projects or activities carried out directly by
the Council and Council staff, as described in section 125A(a)(2) of
the Act, require no non-Federal aggregate participation.
(2) Expenditures for projects with activities or products targeted
to urban or rural poverty areas but not carried out directly by the
Council and Council staff, as described in section 125A(a)(2) of the
Act, shall have non-Federal participation of at least 10% in the
aggregate.
(3) All other activities not directly carried out by the Council
and Council staff, shall have non-Federal participation of at least 25%
in the aggregate.
(e) The Council may vary the non-Federal participation required on
a project by project, activity by activity basis (both poverty and non-
poverty activities), including requiring no non-Federal participation
from particular projects or activities as the Council deems appropriate
so long as the requirement for aggregate non-Federal participation is
met.
29. Section 1386.36 is amended by revising the section heading and
paragraph (e) to read as follows:
Sec. 1386.36 Final disapproval of the State plan or plan amendments.
* * * * *
(e) A State has filed its request for a hearing with the Assistant
Secretary within 21 days of the receipt of the decision. The request
for a hearing must be sent by certified mail to the Assistant
Secretary. The date of mailing the request is considered the date of
filing if it is supported by independent evidence of mailing, otherwise
the date of receipt shall be considered the date of filing.
Subpart D--Practice and Procedure for Hearings Pertaining to
States' Conformity and Compliance With Developmental Disabilities
State Plans, Reports and Federal Requirements
30. Section 1386.80 is revised to read as follows:
Sec. 1386.80 Definitions.
For purposes of this subpart:
Assistant Secretary means the Assistant Secretary for Children and
Families (ACF).
ADD means Administration on Developmental Disabilities,
Administration for Children and Families.
Presiding officer means anyone designated by the Assistant
Secretary to conduct any hearing held under this subpart. The term
includes the Assistant Secretary if the Assistant Secretary presides
over the hearing.
Payment or Allotment means an amount provided under Part B or C of
the Developmental Disabilities Assistance and Bill of Rights Act. This
term includes Federal funds provided under the Act irrespective of
whether the State must match the Federal portion of the expenditure.
This term shall include funds previously covered by the terms ``Federal
financial participation,'' ``the State's total allotment,'' ``further
payments,'' ``payments,'' ``allotment'' and ``Federal funds.''
31. Section 1386.85 is amended by revising paragraph (a) to read as
follows:
Sec. 1386.85 Filing and service of papers.
(a) All papers in the proceedings must be filed with the designated
individual in an original and two copies. Only the originals of
exhibits and transcripts of testimony need be filed.
* * * * *
32. Section 1386.90 is revised to read as follows:
Sec. 1386.90 Notice of hearing or opportunity for hearing.
Proceedings are commenced by mailing a notice of hearing or
opportunity for hearing from the Assistant Secretary to the State
Developmental Disabilities Council and the Designated State Agency, or
to the State Protection and Advocacy System or designating official.
The notice must state the time and place for the hearing, and the
issues which will be considered. The notice must be published in the
Federal Register.
33. Section 1386.92 is revised to read as follows:
[[Page 51162]]
Sec. 1386.92 Place.
The hearing must be held on a date and at a time and place
determined by the Assistant Secretary with due regard for convenience,
and necessity of the parties or their representatives. The site of the
hearing shall be accessible to individuals with disabilities.
34. Section 1386.93 is amended by revising paragraphs (c)(2) and
(d) to read as follows:
Sec. 1386.93 Issues at hearing.
* * * * *
(c) * * *
(2) Prior to the removal of an issue, in whole or in part, from a
hearing involving issues relating to the conformity with Federal
requirements under Part B of the Act, of the State plan or the
activities of the State's Protection and Advocacy System, the Assistant
Secretary must provide all parties other than the Department and the
State (see Sec. 1386.94(b)) with the statement of his or her intention
to remove an issue from the hearings and the reasons for that decision.
A copy of the proposed State plan provision or document explaining
changes in the activities of the State's protection and advocacy system
on which the State and the Assistant Secretary have settled must be
sent to the parties. The parties must have an opportunity to submit in
writing within 15 days their views as to, or any information bearing
upon, the merits of the proposed provision and the merits of the
reasons for removing the issue from the hearing.
(d) In hearings involving questions of noncompliance of a State's
operation of its program under Part B of the Act with the State plan or
with Federal requirements or compliance of the State's Protection and
Advocacy System with Federal requirements, the same procedure set forth
in paragraph (c)(2) of this section must be followed with respect to
any report or evidence resulting in a conclusion by the Assistant
Secretary that a State has achieved compliance.
* * * * *
35. Section 1386.94 is amended by revising paragraphs (a), (b)(2),
and (c) to read as follows:
Sec. 1386.94 Request to participate in hearing.
(a) The Department, the State, the State Developmental Disabilities
Council, the Designated State Agency, and the State Protection and
Advocacy System, as appropriate, are parties to the hearing without
making a specific request to participate.
(b) * * *
(2) Any individual or group wishing to participate as a party must
file a petition with the designated individual within 15 days after
notice of the hearing has been published in the Federal Register, and
must serve a copy on each party of record at that time in accordance
with Sec. 1386.85(b). The petition must concisely state:
(i) Petitioner's interest in the proceeding;
(ii) Who will appear for petitioner;
(iii) The issues the petitioner wishes to address; and
(iv) Whether the petitioner intends to present witnesses.
* * * * *
(c) (1) Any interested person or organization wishing to
participate as amicus curiae must file a petition with the designated
individual before the commencement of the hearing. The petition must
concisely state:
(i) The petitioner's interest in the hearing;
(ii) Who will represent the petitioner, and
(iii) The issues on which the petitioner intends to present
argument.
(2) The presiding officer may grant the petition if he or she finds
that the petitioner has a legitimate interest in the proceedings, that
such participation will not unduly delay the outcome and may contribute
materially to the proper disposition of the issues.
(3) An amicus curiae may present a brief oral statement at the
hearing at the point in the proceedings specified by the presiding
officer. It may submit a written statement of position to the presiding
officer prior to the beginning of a hearing and must serve a copy on
each party. It also may submit a brief or written statement at such
time as the parties submit briefs and must serve a copy on each party.
36. Section 1386.101 is amended by revising paragraphs (a)(11) and
(c) to read as follows:
Sec. 1386.101 Authority of presiding officer.
(a) * * *
(11) If the presiding officer is a person other than the Assistant
Secretary, he or she shall certify the entire record, including
recommended findings and proposed decision, to the Assistant Secretary;
* * * * *
(c) If the presiding officer is a person other than the Assistant
Secretary, his or her authority is to render a recommended decision
with respect to program requirements which are to be considered at the
hearing. In case of any noncompliance, he or she shall recommend
whether payments or allotments should be withheld with respect to the
entire State plan or the activities of the State's Protection and
Advocacy System, or whether the payments or all
FR Doc. 96-24508 Developmental Disabilities Program
otments should be
withheld only with respect to those parts of the program affected by
such noncompliance.
37. Section 1386.111 is amended by revising paragraphs (c) and (d)
to read as follows:
Sec. 1386.111 Decisions following hearing.
* * * * *
(c) If the Assistant Secretary concludes:
(1) In the case of a hearing pursuant to sections 122, 127, or 142
of the Act, that a State plan or the activities of the State's
Protection and Advocacy System does not comply with Federal
requirements, he or she shall also specify whether the State's payment
or allotment for the fiscal year will not be authorized for the State
or whether, in the exercise of his or her discretion, the payment or
allotment will be limited to the parts of the State plan or the
activities of the State's Protection and Advocacy System not affected
by the noncompliance.
(2) In the case of a hearing pursuant to section 127 of the Act
that the State is not complying with the requirements of the State
plan, he or she must also specify whether the State's payment or
allotment will not be made available to the State or whether, in the
exercise of his or her discretion, the payment or allotment will be
limited to the parts of the State plan not affected by such
noncompliance. The Assistant Secretary may ask the parties for
recommendations or briefs or may hold conferences of the parties on
these questions.
(d) The decision of the Assistant Secretary under this section is
the final decision of the Secretary and constitutes ``final agency
action'' within the meaning of 5 U.S.C. 704 and the ``Secretary's
action'' within the meaning of Section 129 of the Act (42 U.S.C. 6029).
The Assistant Secretary's decision must be promptly served on all
parties and amici.
38. Section 1386.112 is amended by revising paragraphs (a) and (b)
to read as follows:
Sec. 1386.112 Effective date of decision by the Assistant Secretary.
(a) If, in the case of a hearing pursuant to section 122 of the
Act, the Assistant Secretary concludes that a State plan does not
comply with Federal requirements, and the decision provides that the
payment or allotment will be authorized but limited to parts of the
[[Page 51163]]
State plan not affected by such noncompliance, the decision must
specify the effective date for the authorization of the payment or
allotment.
(b) In the case of a hearing pursuant to sections 127 or 142 of the
Act, if the Assistant Secretary concludes that the State is not
complying with the requirements of the State plan or the activities of
the State's Protection and Advocacy System do not comply with Federal
requirements, the decision that further payments or allotments will not
be made to the State, or will be limited to the parts of the State plan
or activities of the State's Protection and Advocacy System not
affected, must specify the effective date for withholding payments of
allotments.
* * * * *
PART 1387--PROJECTS OF NATIONAL SIGNIFICANCE
39. The authority citation for part 1387 continues to read as
follows:
Authority: 42 U.S.C. 6000 et seq.
40. Section 1387.1 is amended by revising paragraphs (a), (b), and
(d) to read as follows:
Sec. 1387.1 General requirements.
(a) All projects funded under this part must be of national
significance and serve or relate to individuals with developmental
disabilities to comply with section 162 of the Act.
(b) Based on section 162(d), proposed priorities for grants and
contracts will be published in the Federal Register and a 60 day period
for public comments will be allowed.
* * * * *
(d) Projects of National Significance, including technical
assistance and data collection grants, must be exemplary and innovative
models and have potential for dissemination or knowledge utilization at
the local level as well as nationally or otherwise meet the goals of
part E of the Act.
41. Part 1388 is revised to read as follows:
PART 1388--THE UNIVERSITY AFFILIATED PROGRAMS
Sec.
1388.1 Definitions.
1388.2 Program criteria--purpose.
1388.3 Program criteria--mission.
1388.4 Program criteria--governance and administration.
1388.5 Program criteria--preparation of personnel.
1388.6 Program criteria--services and supports.
1388.7 Program criteria--dissemination.
1388.8 [Reserved].
1388.9 Peer review.
Authority 42 U.S.C. 6063 et seq.
Sec. 1388.1 Definitions.
For purposes of this part:
Accessible means UAPs are characterized by their program and
physical accommodation and their demonstrated commitment to the goals
of the Americans with Disabilities Act.
Capacity Building means that UAPs utilize a variety of approaches
to strengthen their university and their local, State, regional and
National communities. These approaches include, but are not limited to
such activities as:
(1) Enriching program depth and breadth, for example, recruiting
individuals with developmental disabilities and their families, local
community leaders, additional faculty and students to participate in
the UAP;
(2) Acquiring additional resources, for example, grants, space, and
volunteer manpower; and
(3) Carrying out systems changes, for example, promoting inclusive
programming for persons with developmental disabilities across all
ages.
Collaboration means that the UAP cooperates with a wide range of
persons, systems, and agencies, whether they utilize services of the
UAP or are involved in UAP planning and programs. These entities
include individuals with developmental disabilities and family members,
as well as the State Developmental Disabilities Councils, the
Protection and Advocacy agencies, other advocacy and disability groups,
university components, generic and specialized human service agencies,
State agencies and citizen and community groups. An example of this
cooperation is the Consumer Advisory Committee, a required element in
each UAP.
Cultural Diversity means that UAPs are characterized by their
commitment to involve individuals with disabilities, family members and
trainees from diverse cultural backgrounds in all levels of their
activities. This commitment to cultural diversity means that each UAP
must assure that individuals from racial and ethnic minority background
are fully included; that efforts are made to recruit individuals from
minority backgrounds into the field of developmental disabilities; that
specific efforts must be made to ensure that individuals from minority
backgrounds have effective and meaningful opportunities for full
participation in the developmental disabilities service system; and
that recruitment efforts at the levels of preservice training,
community training, practice, administration and policymaking must
focus on bringing large numbers of racial ethnic minorities into the
field in order to provide appropriate skills, knowledge, role models,
and sufficient personnel to address the growing needs of an
increasingly diverse population.
Culturally competent means provision of services, supports, or
other assistance in a manner that is responsive to the beliefs,
interpersonal styles, attitudes, language and behaviors of individuals
who are receiving services, and that has the greatest likelihood of
ensuring their maximum participation in the program.
Diverse Network means that although each UAP has the same mandates
under the Act, the expression of these common mandates differs across
programs. Each UAP must implement these mandates within the context of
their host university, their location within the university, the needs
of the local and State community, the cultural composition of their
State, their resources and funding sources, and their institutional
history. These factors converge to create a network of unique and
distinct programs, bound together by common mandates but enriched by
diverse composition.
Interdisciplinary Training means the use of individuals from
different professional specialties for UAP training and service
delivery.
Lifespan Approach means that UAP activities address the needs of
individuals with disabilities who are of all ages.
Mandated Core Functions means the UAP must perform:
(1) Interdisciplinary preservice preparation;
(2) Community service activities (community training and technical
assistance); and
(3) Activities related to dissemination of information and research
findings.
Program Criteria means a statement of the Department's expectation
regarding the direction and desired outcome of the University
Affiliated Program's operation.
Research and evaluation means that the UAP refines its activities
on the basis of evaluation results. As members of the university
community, involvement in program-relevant research and development of
new knowledge are important components of UAPs.
State-of-the-art means that UAP activities are of high quality
(using the latest technology), worthy of replication (consistent with
available resources), and systemically evaluated.
[[Page 51164]]
Sec. 1388.2 Program criteria--purpose.
The program criteria will be used to assess the quality of the
University Affiliated Programs (UAP). The overall purpose of the
program criteria is to assure the promotion of independence,
productivity, integration and inclusion of individuals with
developmental disabilities. Compliance with the program criteria is a
prerequisite for a UAP to receive the minimum funding level of a UAP.
However, compliance with the program criteria does not, by itself,
assure funding. The Program Criteria are one part of the Quality
Enhancement System (QES), and provide a structure for self-assessment
and peer review of each UAP. (The QES is a holistic approach to enable
persons with developmental disabilities and their families to achieve
maximum potential. All UAPs use the QES.)
Sec. 1388.3 Program criteria--mission.
(a) Introduction to mission: The UAP is guided by values of
independence, productivity, integration and inclusion of individuals
with developmental disabilities and their families. The purpose and
scope of the activities must be consistent with the Act as amended and
include the provision of training, service, research and evaluation,
technical assistance and dissemination of information in a culturally
competent manner, including the meaningful participation of individuals
from diverse racial and ethnic backgrounds. (The concept of ``diverse
network'' as defined in Sec. 1388.1 of this part applies to paragraphs
(b), (f), (g), and (h) of this section.)
(b) The UAP must develop a written mission statement that reflects
its values and promotes the goals of the university in which it is
located, including training, the development of new knowledge and
service. The UAP's goals, objectives and activities must be consistent
with the mission statement.
(c) The UAP's mission and programs must reflect a life span
approach, incorporate an interdisciplinary approach and include the
active participation of individuals with developmental disabilities and
their families.
(d) The UAP programs must address the needs of individuals with
developmental disabilities, including individuals with developmental
disabilities who are unserved or underserved, in institutions, and on
waiting lists.
(e) The UAP's mission must reflect a commitment to culturally
competent attitudes and practices, which are in response to local
culture and needs.
(f) The UAP's mission must reflect its unique role as a bridge
between university programs, individuals with developmental
disabilities and their families, service agencies and the larger
community.
(g) The UAP's goals, objectives, and activities must be consistent
with the mission statement and use capacity building strategies to
address State's needs.
(h) The UAP's goals, objectives, and activities must reflect
interagency collaborations and strategies to effect systemic change
within the university and in State and local communities and service
systems.
Sec. 1388.4 Program criteria--governance and administration.
(a) Introduction to governance and administration: The UAP must be
associated with, or an integral part of, a university and promote the
independence, productivity, integration, and inclusion of individuals
with developmental disabilities and their families. (The concept of
``diverse network'' as defined in Sec. 1388.1 of this part applies to
paragraphs (b), (c), (d), (i), and (l) of this section.)
(b) The UAP must have a written agreement or charter with the
university that specifies the UAP designation as an official university
component, the relationships between the UAP and other university
components, the university commitment to the UAP, and the UAP
commitment to the university.
(c) Within the university, the UAP must maintain the autonomy and
organizational structure required to carry out the UAP mission and
provide for the mandated activities.
(d) The UAP must report directly to a University administrator who
will represent the interests of the UAP within the University.
(e) The University must demonstrate its support for the UAP through
the commitment of financial and other resources.
(f) UAP senior professional staff must hold faculty appointments in
appropriate academic departments of the host or an affiliated
university, consistent with university policy. UAP senior professional
staff contribute to the university by participation on university
committees, collaboration with other university departments, and other
university community activities.
(g) UAP faculty and staff must represent the broad range of
disciplines and backgrounds necessary to implement the full inclusion
of individuals with developmental disabilities in all aspects of
society, consonant with the spirit of the Americans with Disabilities
Act (ADA).
(h) The UAP must meet the requirements of section 109 of the Act
[42 U.S.C. 6008] regarding affirmative action. The UAP must take
affirmative action to employ and advance in employment and otherwise
treat qualified individuals with disabilities without discrimination
based upon their physical or mental disability in all employment
practices.
(i) The management practices of the UAP, as well as the
organizational structure, must promote the role of the UAP as a bridge
between the University and the community. The UAP must actively
participate in community networks and include a range of collaborating
partners.
(j) The UAP's Consumer Advisory Committee must meet regularly. The
membership of the Consumer Advisory Committee must reflect the racial
and ethnic diversity of the State or community in which the UAP is
located. The deliberations of the Consumer Advisory Committee must be
reflected in UAP policies and programs.
(k) The UAP must maintain collaborative relationships with the
State Developmental Disabilities Council and the Protection and
Advocacy agency. In addition, the UAP must be a member of the State
Developmental Disabilities Council and participate in Council meetings
and activities, as prescribed by the Act.
(l) The UAP must maintain collaborative relationships and be an
active participant with the UAP network and individuals, organizations,
State agencies and Universities.
(m) The UAP must demonstrate the ability to leverage resources.
(n) The UAP must have adequate space to carry out the mandated
activities.
(o) The UAP physical facility and all program initiatives conducted
by the UAP must be accessible to individuals with disabilities as
provided for by section 504 of the Rehabilitation Act and Titles II and
III of the Americans with Disabilities Act.
(p) The UAP must integrate the mandated core functions into its
activities and programs and must have a written plan for each core
function area.
(q) The UAP must have in place a long range planning capability to
enable the UAP to respond to emergent and future developments in the
field.
(r) The UAP must utilize state-of-the-art methods, including the
active participation of individuals, families and other consumers of
UAP programs and services to evaluate programs. The
[[Page 51165]]
UAP must refine and strengthen its programs based on evaluation
findings.
(s) The UAP Director must demonstrate commitment to the field of
developmental disabilities and leadership and vision in carrying out
the mission of the UAP.
Sec. 1388.5 Program criteria--preparation of personnel.
(a) Introduction to preparation of personnel: UAP interdisciplinary
training programs reflect state-of-the-art practices and prepare
personnel concerned with developmental disabilities to promote the
independence, productivity, integration and inclusion of individuals
with developmental disabilities and their families.
(b) UAP interdisciplinary training programs must be based on
identified personnel preparation needs and have identified outcomes
that are consistent with the mission and goals of the UAP.
(c) The interdisciplinary training process, as defined by the UAP,
must reflect a mix of students from diverse academic disciplines/
academic programs and cultures that reflect the diversity of the
community. Faculty represent a variety of backgrounds and specialties,
including individuals with disabilities and family members, and a
variety of learning experiences, as well as reflecting the cultural
diversity of the community. Trainees must receive academic credit as
appropriate for participation in UAP training programs.
(d) Preservice training must be integrated into all aspects of the
UAP, including community training and technical assistance, direct
services (if provided), and dissemination.
(e) Trainees must be prepared to serve in a variety of roles,
including advocacy and systems change. The UAP must encourage graduates
to work in situations where they will promote the independence,
productivity, integration and inclusion of individuals with
developmental disabilities and their families.
(f) The UAP must influence University curricula to prepare
personnel who, in their future career in a broad range of social and
community roles, will contribute to the accommodation and inclusion of
individuals with developmental disabilities, as mandated in the
Americans with Disabilities Act.
(g) The UAP core curriculum must incorporate cultural diversity and
demonstrate cultural competence. Trainees must be prepared to address
the needs of individuals with developmental disabilities and their
families in a culturally competent manner.
(h) The UAP core curriculum must prepare trainees to be active
participants in research and dissemination efforts. In addition, the
curriculum must prepare trainees to be consumers of research as it
informs practice and policy.
Sec. 1388.6 Program criteria--services and supports.
(a) Introduction to services and supports: The UAP engages in a
variety of system interventions and may also engage in a variety of
individual interventions to promote independence, productivity,
integration and inclusion of individuals with developmental
disabilities and their families.
(b) UAP community training and technical assistance activities
must:
(1) Use capacity building strategies to strengthen the capability
of communities, systems and service providers;
(2) Plan collaboratively, including the participation of
individuals with developmental disabilities and their families;
(3) Target to a wide range of audiences, including individuals with
disabilities, family members, service and support personnel, and
community members;
(4) Plan and be structured in a manner that facilitates the
participation of targeted audiences; and
(5) Address the unique needs of individuals with developmental
disabilities and their families from diverse cultural and ethnic groups
who reside within the geographic locale.
(c) Direct Services. These requirements apply only where direct
services are offered.
(1) A UAP must integrate direct services and projects into
community settings. These services may be provided in a service
delivery site or training setting within the community including the
university. Direct service projects may involve interdisciplinary
student trainees, professionals from various disciplines, service
providers, families and/or administrators. Direct services must be
extended, as appropriate, to include adult and elderly individuals with
developmental disabilities. The UAP must maintain cooperative
relationships with other community service providers, including
specialized state and local provider agencies.
(2) Services and projects provided in community-integrated settings
are to:
(i) Be scheduled at times and in places that are consistent with
routine activities within the local community; and
(ii) Interact with and involve community members, agencies, and
organizations.
(3) The bases for the services or project development must be:
(i) A local or universal need that reflects critical problems in
the field of developmental disabilities; or
(ii) An emerging, critical problem that reflects current trends or
anticipated developments in the field of developmental disabilities.
(4) State-of-the-art and innovative practices include:
(i) Services and project concepts and practices that facilitate and
demonstrate independence for the individual, community integration,
productivity, and human rights;
(ii) Practices that are economical, accepted by various
disciplines, and highly beneficial to individuals with developmental
disabilities, and that are integrated within services and projects;
(iii) Innovative cost-effective concepts and practices that are
evaluated according to accepted practices of scientific evaluation;
(iv) Research methods that are used to test hypotheses, validate
procedures, and field test projects; and
(v) Direct service and project practices and models that are
evaluated, packaged for replication and disseminated through the
information dissemination component.
Sec. 1388.7 Program criteria--dissemination.
(a) Introduction to dissemination: The UAP disseminates information
and research findings, including the empirical validation of activities
related to training, best practices, services and supports, and
contributes to the development of new knowledge. Dissemination
activities promote the independence, productivity, integration and
inclusion of individuals with developmental disabilities and their
families.
(b) The UAP must be a resource for information for individuals with
developmental disabilities and their families, community members, State
agencies and other provider and advocacy organizations, produce a
variety of products to promote public awareness and visibility of the
UAP, and facilitate replication of best practices.
(c) Specific target audiences must be identified for dissemination
activities and include individuals with developmental disabilities,
family members, service providers, administrators, policy makers,
university faculty, researchers, and the general public.
(d) UAP dissemination activities must be responsive to community
requests for
[[Page 51166]]
information and must utilize a variety of networks, including State
Developmental Disabilities Councils, Protection and Advocacy agencies,
other University Affiliated Programs, and State service systems to
disseminate information to target audiences.
(e) The process of developing and evaluating materials must utilize
the input of individuals with developmental disabilities and their
families.
(f) The values of the UAP must be reflected in the language and
images used in UAP products.
(g) Dissemination products must reflect the cultural diversity of
the community.
(h) Materials disseminated by the UAP must be available in formats
accessible to individuals with a wide range of disabilities, and
appropriate target audiences.
(i) The UAP must contribute to the development of the knowledge
base through publications and presentations, including those based on
research and evaluation conducted at the UAP.
Sec. 1388.8 [Reserved]
Sec. 1388.9 Peer review.
(a) The purpose of the peer review process is to provide the
Commissioner, ADD, with technical and qualitative evaluation of UAP
applications, including on-site visits or inspections as necessary.
(b) Applications for funding opportunities under part D, Section
152 of the Act, must be evaluated through the peer review process.
(c) Panels must be composed of non-Federal individuals who, by
experience and training, are highly qualified to assess the comparative
quality of applications for assistance.
[FR Doc. 96-24508 Filed 9-27-96; 8:45 am]
BILLING CODE 4184-01-U
Complete official Federal Register PDF
FR Doc. 96-23794 Schedule of Fees Authorized by 49 U.S.C. 30141
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 51043-51045]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23794]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 594
[Docket No. 89-8; Notice 10]
RIN 2127-AG43
Schedule of Fees Authorized by 49 U.S.C. 30141
AGENCY: National Highway Traffic Safety Administration (NHTSA), DOT.
ACTION: Final rule.
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SUMMARY: This document adopts fees for Fiscal Year 1997 and until
further notice, as authorized by 49 U.S.C. 30141, relating to the
registration of importers and the importation of motor vehicles not
certified as conforming to the Federal motor vehicle safety standards
(FMVSS).
NHTSA has adopted its proposal that the annual fee for the
registration of a new importer be increased from $456 to $501, and the
annual fee for renewal of registration be increased from $240 to $332.
The fee required to reimburse the U.S. Customs Service for bond
processing costs increases by $0.20, from $4.95 to $5.15 per bond.
The fee payable for a determination that a nonconforming vehicle is
capable of conversion to meet the FMVSS is increased from $104 to $199
if the determination results from a petition arguing that the
nonconforming vehicle is substantially similar to conforming vehicles.
With respect to vehicles that have no substantially similar
counterpart, the fee rises from $520 to $721. In addition, the fee
payable by the importer of each vehicle that benefits by a
determination is increased from $93 to $134, regardless of whether the
determination is made pursuant to a petition or by NHTSA on its own
initiative.
EFFECTIVE DATE: The effective date of the final rule is October 1,
1996.
FOR FURTHER INFORMATION CONTACT: George Entwistle, Office of Vehicle
Safety Compliance, Office of Safety Assurance, NHTSA (202-366-5306).
SUPPLEMENTARY INFORMATION:
Introduction
On June 24, 1996, NHTSA published the notice of proposed rulemaking
on which this final rule is based (61 FR 32411). The reader is referred
to that notice for a full discussion of the rulemaking history of part
594 and the fees authorized by the Imported Vehicle Safety Compliance
Act of 1988, P.L. 100- 562. The fees applicable in any fiscal year are
to be established before the beginning of such year. The statute
authorizes an annual fee to cover the costs of the importer
registration program, an annual fee or fees to cover the cost of making
import eligibility determinations, and an annual fee or fees to cover
the cost of processing the bond furnished to the Customs Service. NHTSA
last amended the fee schedule in 1993; it has applied in Fiscal Years
1994-96.
As a general statement applicable to consideration of all fees,
there has been a slight increase in hourly costs in the past three
fiscal years attributable to the approximately 2 percent raise in
salaries of employees on the General Schedule that became effective on
January 1 in the years 1995, and 1996 (there was a locality raise only
in 1994).
Requirements of the Fee Regulation
Section 594.6--Annual Fee for Administration of the Importer
Registration Program
Section 30141(a)(3) of Title 49 U.S.C. provides that registered
importers must pay ``the annual fee the Secretary of Transportation
establishes * * * to pay for the costs of carrying out the registration
program for importers * * *.'' The annual fee attributable to the
registration program is payable both by new applicants and by
registered importers seeking to renew their registration.
In accordance with the statutory directive, NHTSA reviewed the
existing fees and their bases in an attempt to establish fees which
would be sufficient to recover the costs of carrying out the
registration program for importers for at least the next fiscal year.
The initial component of the Registration Program Fee is the portion of
the fee attributable to processing and acting upon registration
applications. The agency has determined that this portion of the fee
should be decreased from $356 to $301 for new applications, and
increased from $100 to $132 for renewals. The higher initial cost is
warranted because the average cost of processing a new application is
substantially greater than that of its renewal.
Other costs attributable to maintenance of the registration program
arise from the agency's reviewing a registrant's annual statement and
verifying the continuing validity of information already submitted.
These costs also include costs attributable to revocation or suspension
of a registration.
The total portion of the fee attributable to maintenance of the
registration program as estimated by NHTSA is approximately $200, an
increase of $100. This reflects the fact that costs have been incurred
for processing suspensions or revocations. When this $200 is added to
the $301 representing the registration application component, the cost
to an applicant equals $501, and was the fee proposed by NHTSA. It
represents an increase of $45. When the $200 is added to the $132
representing the renewal component, the cost to a renewing registered
importer is $332. This fee increase was also proposed. It represents an
increase of $92.
Sec. 594.6(h) recounts indirect costs that have been estimated at
$6.71 per
[[Page 51044]]
man-hour. This is raised to $7.07, as proposed.
Sections 594.7, 594.8--Fees to Cover Agency Costs in Making Importation
Eligibility Determinations
Section 30141(a)(3) also requires registered importers to pay
``other fees the Secretary of Transportation establishes to pay for the
costs of * * * (B) making the decisions under this subchapter.''
Pursuant to part 593, these decisions are whether the vehicle sought to
be imported is substantially similar to a motor vehicle originally
manufactured for import into and sale in the United States, and
certified as meeting the FMVSS, and whether it is capable of being
readily altered to meet those standards. Alternatively, where there is
no substantially similar U.S. motor vehicle, the decision is whether
the safety features of the vehicle comply with or are capable of being
altered to comply with the FMVSS. These decisions are made in response
to petitions submitted by registered importers or manufacturers, or
pursuant to the Administrator's initiative.
The fee for a vehicle imported under a decision pursuant to a
petition is payable in part by the petitioner and in part by importers.
However, the fee to be charged for a vehicle is a pro rata share of the
costs in making all the eligibility determinations in the fiscal year.
As the agency noted in the final rule adopting the fees for FY94,
only one petition had been granted for a vehicle which is not
``substantially similar'' to a certified model, and there was not yet
an average cost figure for this category. Since that time, at least
half a dozen other petitions have been received and NHTSA has found
that these require noticeably more analysis and, at times, further
correspondence with the petitioner in order to obtain sufficient data
to reach a decision.
Inflation and the small raises under the General Schedule also must
be taken into count in the computation of costs. Accordingly, NHTSA
proposed that there be an increase from $104 to $199 in the fee
required to accompany a ``substantially similar'' petition, and from
$520 to $721 in the fee for petitions for vehicles that are not
substantially similar and that have no certified counterpart. In the
event that a petitioner requests an inspection of a vehicle, it was
proposed that the fee remain at $550 for each of those types of
petitions. The proposed fees are adopted.
The importer of each vehicle covered by a petition currently must
pay $93 upon its importation, the same fee applicable to those whose
vehicles covered by a determination on the agency's initiative (other
than Canadian vehicles covered by code VSA-1). It was proposed that
this fee be increased to $134, based upon an increase in administrative
costs. This proposed fee is also adopted.
The fee for inspection of a vehicle to verify its conformance
status remains unchanged.
Section 594.9--Fee to Recover the Costs of Processing the Bond
Section 30141(a)(3) also requires a registered importer to pay
``any other fees the Secretary of Transportation establishes * * * to
pay for the costs of--(A) processing bonds provided to the Secretary of
the Treasury'' upon the importation of a nonconforming vehicle to
ensure that the vehicle will be brought into compliance within a
reasonable time or if the vehicle is not brought into compliance within
such time, that it is exported, without cost to the United States, or
abandoned to the United States.
The statute contemplates that NHTSA make a reasonable determination
of the cost to the United States Customs Service of processing the
bond. In essence, the cost to Customs is based upon an estimate of the
time that a GS 9, Step 5 employee spends on each entry, which Customs
judged to be 20 minutes. Because of the modest salary and locality
raises in the General Schedule that were effective at the beginning of
1994, 1995, and 1996, NHTSA proposed that the current processing fee be
increased by $0.20, from $4.95 per bond to $5.15.
There were no comments on the proposed amendments. Therefore, NHTSA
is adopting its proposal as a final rule.
Effective Date
The effective date of the final rule is October 1, 1996.
Rulemaking Analyses
A. Executive Order 12866 and DOT Regulatory Policies and Procedures
This rulemaking action was not reviewed under Executive Order
12886. Further, NHTSA has determined that the action is not significant
under Department of Transportation regulatory policies and procedures.
Based on the level of the fees and the volume of affected vehicles,
NHTSA currently anticipates that the costs of the final rule will be so
minimal as not to warrant preparation of a full regulatory evaluation.
The action does not involve any substantial public interest or
controversy. There will be no substantial effect upon State and local
governments. There will be no substantial impact upon a major
transportation safety program. Both the number of registered importers
and determinations are estimated to be comparatively small. A
regulatory evaluation analyzing the economic impact of the final rule
adopted on September 29, 1989, was prepared, and is available for
review in the docket.
B. Regulatory Flexibility Act
The agency has also considered the effects of this action in
relation to the Regulatory Flexibility Act. I certify that this action
will not have a substantial economic impact upon a substantial number
of small entities. Although entities that currently modify
nonconforming vehicles are small businesses within the meaning of the
Regulatory Flexibility Act, the agency has no reason to believe that a
substantial number of these companies cannot pay the fees adopted by
this action which are only modestly increased from those now being
paid, and which can be recouped through their customers. The cost to
owners or purchasers of altering nonconforming vehicles to conform with
the FMVSS may be expected to increase to the extent necessary to
reimburse the registered importer for the fees payable to the agency
for the cost of carrying out the registration program and making
eligibility decisions, and to compensate Customs for its bond
processing costs. Governmental jurisdictions will not be affected at
all since they are generally neither importers nor purchasers of
nonconforming motor vehicles.
C. Executive Order 12612 (Federalism)
The agency has analyzed this action in accordance with the
principles and criteria contained in Executive Order 12612
``Federalism'' and determined that the action does not have sufficient
federalism implications to warrant the preparation of a Federalism
Assessment.
D. National Environmental Policy Act
NHTSA has analyzed this action for purposes of the National
Environmental Policy Act. The action will not have a significant effect
upon the environment because it is anticipated that the annual volume
of motor vehicles imported through registered importers will not vary
significantly from that existing before promulgation of the rule.
E. Civil Justice
This rule will not have any retroactive effect. Under 49 U.S.C.
30103(b), whenever a Federal motor vehicle safety
[[Page 51045]]
standard is in effect, a state may not adopt or maintain a safety
standard applicable to the same aspect of performance which is not
identical to the Federal standard. Section 30161 sets forth a procedure
for judicial review of final rules establishing, amending or revoking
Federal motor vehicle safety standards. That section does not require
submission of a petition for reconsideration or other administrative
proceedings before parties may file suit in court.
List of Subjects in 49 CFR Part 594
Imports, Motor vehicle safety, Motor vehicles.
In consideration of the foregoing, 49 CFR part 594 is amended as
follows:
PART 594--SCHEDULE OF FEES AUTHORIZED BY 49 U.S.C. 30141
1. The heading of part 594 is revised to read as set forth above.
2. The authority citation for part 594 is revised to read as
follows:
Authority: 49 U.S.C. 30141, 30166; delegation of authority at 49
CFR 1.50.
3. Section 594.1 is revised to read as follows:
Sec. 594.1 Scope.
This part establishes the fees authorized by 49 U.S.C. 30141.
4. Section 594.4 is amended by revising the introductory text to
read as follows:
Sec. 594.4 Definitions.
All terms used in this part that are defined in 49 U.S.C. 30102 are
used as defined in that section.
* * * * *
5. Section 594.6 is amended by:
a. revising the year ``1993'' in paragraph (d) to read ``1996'';
b. revising the introductory text of paragraph (a);
c. revising paragraph (b);
d. revising the final sentence of paragraph (h); and
e. revising paragraph (i), to read as follows:
Sec. 594.6 Annual fee for administration of the registration program.
(a) Each person filing an application to be granted the status of a
Registered Importer pursuant to part 592 of this chapter on or after
October 1, 1996, shall pay an annual fee of $501, as calculated below,
based upon the direct and indirect costs attributable to:
* * * * *
(b) That portion of the initial annual fee attributable to the
processing of the application for applications file on and after
October 1, 1996, is $301. The sum of $301, representing this portion,
shall not be refundable if the application is denied or withdrawn.
* * * * *
(h) * * * This cost is $7.07 per man-hour for the period beginning
October 1, 1996.
(i) Based upon the elements, and indirect costs in paragraphs (f),
(g), and (h) of this section, the component of the initial annual fee
attributable to administration of the registration program, covering
the period beginning October 1, 1996, is $200. When added to the costs
of registration of $301, as set forth in paragraph (b) of this section,
the costs per applicant to be recovered through the annual fee are
$501. The annual renewal registration fee for the period beginning
October 1, 1996, is $332.
6. Section 594.7 is amended by revising the first two sentences of
paragraph (e) to read as follows:
Sec. 594.7 Fee for filing petition for a determination whether a
vehicle is eligible for importation.
* * * * *
(e) For petitions filed on and after October 1, 1996, the fee
payable for a petition seeking a determination under paragraph (a)(1)
of this section is $199. The fee payable for a petition seeking a
determination under paragraph (a)(2) of this section is $721.* * *
* * * * *
7. Section 594.8 is amended by revising the first sentence in
paragraphs (b) and (c) to read as follows:
Sec. 594.8 Fee for importing a vehicle pursuant to a determination by
the Administrator.
* * * * *
(b) If a determination has been made pursuant to a petition, the
fee for each vehicle is $134.* * *
(c) If a determination has been made pursuant to the
Administrator's initiative, the fee for each vehicle is $134. * * *
8. Section 594.9(c) is revised to read as follows:
Sec. 594.9 Fee for reimbursement of bond processing costs.
* * * * *
(c) The bond processing fee for each vehicle imported on and after
October 1, 1996, for which a certificate of conformity is furnished, is
$5.15.
Issued on: September 11, 1996.
Ricardo Martinez,
Administrator.
[FR Doc. 96-23794 Filed 9-27-96; 8:45 am]
BILLING CODE 4910-59-P
Complete official Federal Register PDF
FR Doc. 96-23726 Lending and Investment
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 50951-50984]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23726]
=======================================================================
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DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Parts 545, 556, 560, 563, 566, 571, 590
[No. 96-87]
RIN 1550-AA94
Lending and Investment
AGENCY: Office of Thrift Supervision, Treasury.
ACTION: Final rule.
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SUMMARY: The Office of Thrift Supervision (OTS or Office) is today
issuing a final rule updating, reorganizing, and substantially
streamlining its lending and investment regulations and policy
statements. These amendments are being made pursuant to the Regulatory
Reinvention Initiative of the Vice President's National Performance
Review (Reinvention Initiative) and section 303 of the Community
Development and Regulatory Improvement Act of 1994 (CDRIA), which
requires OTS and the other federal banking agencies to review,
streamline, and modify regulations and policies to improve efficiency,
reduce unnecessary costs, and remove inconsistent, outmoded, and
duplicative requirements.
EFFECTIVE DATE: October 30, 1996.
FOR FURTHER INFORMATION CONTACT: For general information contact:
William J. Magrini, Senior Project Manager, (202) 906-5744, Supervision
Policy; Ellen J. Sazzman, Counsel (Banking and Finance), (202) 906-
7133; or Deborah Dakin, Assistant Chief Counsel, (202)
[[Page 50952]]
906-6445, Regulations and Legislation Division, Chief Counsel's Office.
For information about preemption, contact Evelyne Bonhomme, Counsel
(Banking and Finance), (202) 906-7052, Regulations and Legislation
Division, Chief Counsel's Office, Office of Thrift Supervision, 1700 G
Street, NW., Washington, D.C. 20552.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. Summary of Comments and Description of the Final Rule
A. General Discussion of the Comments
B. Section-by-Section Analysis
1. Existing Lending and Investment Sections
2. New Part 560--Lending and Investment
III. Disposition of Existing Lending and Investment Regulations
IV. Administrative Procedure Act
V. Paperwork Reduction Act of 1995
VI. Executive Order 12866
VII. Regulatory Flexibility Act Analysis
VIII. Unfunded Mandates Act of 1995
IX. Effective Date
I. Background
In a comprehensive review of its regulations, beginning in the
spring of 1995, pursuant to section 303 of the CDRIA 1 and the
Administration's Reinvention Initiative, OTS identified its lending and
investment regulations as an important area for updating and
streamlining. Lending and investment are key areas of thrift operations
and these regulations had not been comprehensively reviewed in a number
of years. Each lending and investment regulation was reviewed to
determine whether it was current and understandable; could be
eliminated without endangering safety and soundness, diminishing
consumer protection or violating statutory requirements; addressed
subject matter more suited for handbook guidance; and was consistent
with the regulations of the other banking agencies. OTS also sought
industry input regarding staff's initial recommendations through an
industry focus group meeting among seven thrift representatives, an
industry trade association and OTS staff. As a result of this review,
OTS identified a number of ways in which its lending and investment
regulations could be revised to reduce regulatory burden. On January
17, 1996, OTS issued a notice of proposed rulemaking.2
---------------------------------------------------------------------------
\1\ 12 U.S.C. 4803(a)(1).
\2\ 61 FR 1162 (January 17, 1996).
---------------------------------------------------------------------------
Today's final rule is substantially similar to the January
proposal. Readers will note, however, that the final rule also sets
forth, for ease of reference, the full text of OTS's regulations on
lending limits, real estate lending standards, disclosures on
adjustable-rate mortgages, and the reappraisal of real estate owned
(REO). These regulations have been moved, with only technical and
conforming changes, into new Part 560, Lending and Investment, so that
all lending regulations will be grouped together and more easily
located. The final rule also incorporates technical corrections to fix
cross-references in other regulations to regulations that are being
modified, moved, or removed as part of this final rule.
The final rule reduces the number of lending and investment
regulations from 43 to 23 and results in a net reduction of 11 pages of
CFR text. As it proposed, OTS has removed unnecessary, duplicative, and
outdated lending and investment regulations such as Sec. 563.97 (loans
in excess of 90% of value), Sec. 545.44 (mortgage transactions with the
Federal Home Loan Mortgage Corporation (Freddie Mac)), and Sec. 545.37
(combination loans). OTS has also revised certain regulations to be
less burdensome, e.g., amending the scope of commercial loans under
current Sec. 545.46(b) to exclude commercial loans made by service
corporations from its parent's percentage-of-assets limitations and
removing restrictions on manufactured home loans and investments in
government securities and state housing corporations.
OTS has also converted the detail in some regulations into guidance
to give thrifts more flexibility in addressing safety and soundness
concerns in a particular area, e.g., current Sec. 563.160 (loan
classification) and current Sec. 563.170(c) (loan documentation). OTS's
movement toward a more guidance-oriented approach in the lending and
investment area brings OTS's regulations into greater uniformity with
those of the other federal banking agencies consistent with the
objectives of section 303 of the CDRIA.
OTS's objective in removing the detail from some regulations and
relying on a more general set of regulations and safety and soundness
standards is to allow institutions greater flexibility in their lending
and investment operations. However, OTS still insists that an
association maintain adequate loan documentation, classify its assets,
and establish appropriate valuation allowances consistent with
generally accepted accounting principles and safety and soundness.
OTS is also sensitive to commenters' concerns regarding the
potential for examiners to treat guidelines as binding regulations. OTS
will emphasize the proper interpretation of supervisory guidance in its
examiner training programs to ensure that guidance is not treated in
the same manner as binding regulations.
OTS has also reorganized its lending and investment regulations to
make them easier to locate and use. First, all lending and investment
regulations have been moved to a new Part 560, ``Lending and
Investment,'' that specifies which regulations apply to all savings
associations (such as loan documentation, disclosure, and real estate
lending standards) and which apply only to federal savings associations
(such as specific lending powers.) This part incorporates provisions
currently located in Parts 545 and 563 that are being modified as part
of today's final rule. It also incorporates sections currently located
in Part 563 that are being transferred to Part 560 without change.
These regulations--real estate lending standards, disclosure
requirements for adjustable-rate mortgages, lending limits, and
appraisal requirements for real estate owned--are being moved to Part
560 for the convenience of those using OTS's lending regulations.
OTS has also removed unnecessary restatements of statutory
authority and limitations from various sections of Part 545 and
replaced them with a regulation in chart format that provides easy
reference to the statutory authority for, and limitations on, federal
associations' lending and investment powers.
OTS has added a general lending preemption provision in new Part
560. This provision (discussed more fully in the section-by-section
analysis in Sec. II.B. below) restates long-standing preemption
principles applicable to federal savings associations, as reflected in
earlier regulations, court cases, and numerous legal opinions issued by
OTS and the Federal Home Loan Bank Board (FHLBB), OTS's predecessor
agency. In those opinions, OTS has consistently taken the position
that, with certain narrow exceptions, any state laws that purport to
affect the lending operations of federal savings associations are
preempted. None of the changes implemented today should be construed as
evidencing in any way an intent by OTS to change this long held
position: OTS still intends to occupy the field of lending regulation
for federal savings associations. OTS believes that the new lending
preemption regulation is clearer and should significantly reduce the
instances in which institutions need to request interpretive guidance
from OTS.
In summary, OTS believes that regulations that address safety and
[[Page 50953]]
soundness requirements should generally be limited to those
requirements necessary for OTS to carry out its supervisory
responsibilities. If regulations are unnecessarily detailed and rigid,
regulated entities may find themselves unable to respond to market
innovations. Today's final rule achieves what OTS believes is the right
balance by placing essential safety and soundness requirements in
binding regulations and putting more expansive guidance on sensible
practices in handbooks.
II. Summary of Comments and Description of the Final Rule
A. General Discussion of the Comments
The public comment period on the January 17 proposal closed on
April 16, 1996. Fourteen commenters responded to the notice of proposed
rulemaking. Seven federal savings associations, three national
financial institution trade associations, two law firms, one national
bank, and one state appraiser trade association submitted comments.
All but one of the commenters generally supported OTS efforts to
update, streamline, and reorganize its lending and investment
regulations. Commenters praised OTS's proposed elimination of
unnecessary and burdensome lending and investment restrictions and
indicated that the proposed modifications would be helpful. Commenters
believed that the proposed changes would significantly reduce the
compliance burden on the thrift industry and facilitate greater
operational flexibility and product innovation. Commenters generally
concurred with OTS's view that many of the proposed amendments would
provide savings associations with the flexibility needed to compete
with other financial institutions, particularly commercial banks, to
engage in new lending activities made possible by technological
changes, and to respond more quickly to market innovation. Most
commenters also supported the consolidation of all lending and
investment regulations into a new Part 560.
Commenters also generally supported OTS's proposal to shift some of
its regulations to guidance in the Thrift Activities Handbook
(Handbook). Commenters noted that moving specific loan documentation
requirements currently found in Sec. 563.170, specific loan
classification requirements currently in Sec. 563.160, and restrictions
on investments in commercial paper and corporate debt securities
currently in Sec. 545.75 into the Handbook was appropriate, given that
OTS now has more sophisticated examination and reporting methods and
better trained examiners to monitor thrift activities. Commenters
recognized that OTS regulations traditionally have been more detailed
and less flexible than those applicable to banks. They agreed that
OTS's proposal to move from a somewhat regulation-specific to a more
guidance-oriented approach would give thrifts more flexibility to
address safety and soundness concerns in a manner best suited to each
individual institution. Commenters also believed that shifting OTS
regulations into the Handbook would reduce the costs of regulatory
compliance by increasing a thrift's operational flexibility.
At least one commenter was concerned, however, that the Handbook
could become so detailed that it would stifle product innovation and
management judgment or duplicate provisions that remained in the
regulations. Commenters also expressed the concern that examiners might
view guidelines in the Handbook as binding requirements with no
resulting relief in regulatory burden. To prevent this, commenters
supported OTS's plan to provide examiner training that would emphasize
the intended flexibility of supervisory guidance. Additionally, OTS is
reviewing the text of regulations being repealed today to determine
what portions will provide helpful guidance and what portions should be
disposed of altogether. The process of converting regulatory text to
guidance will be done thoughtfully, recognizing the different roles
performed by regulations and guidance.
A number of commenters raised concerns that the proposed changes on
preemption of state laws affecting lending might be misunderstood as a
narrowing of OTS's traditional preemption position. These concerns are
discussed in detail in the section-by-section analysis below in
reference to Sec. 560.2.
B. Section-by-Section Analysis
1. Existing Lending and Investment Sections
Section 545.31 Election Regarding Classification of Loans or
Investments
OTS proposed retaining in modified form paragraph (a) of
Sec. 545.31, which set forth OTS's general rule that where a loan or
investment meets the requirements of more than one authorizing
provision, the association may elect to place it in any applicable
category. OTS received no comments on this paragraph, which is retained
as proposed, in modified form, as new Sec. 560.31.
OTS also proposed retaining paragraph (b) of Sec. 545.31, which
provided that loan commitments are included in total assets and
accounted for as an investment for purposes of determining applicable
statutory or regulatory investment authority limitations only to the
extent that funds are advanced and not repaid.3 OTS received no
comments on this paragraph, which is retained as proposed as part of
new Sec. 560.31(a).
---------------------------------------------------------------------------
\3\ Today's final rule carries forward this longstanding
treatment of loan commitments for purposes of HOLA section 5(c)
investment limitations. OTS notes, however, that contractual
commitments to advance funds continue to be considered ``loans and
extensions of credit'' under the loans-to-one borrower regulation
(existing Sec. 563.93, now Sec. 560.93).
---------------------------------------------------------------------------
OTS proposed retaining paragraphs (c) and (d) of Sec. 545.31, which
addressed respectively the treatment of loans sold to third parties for
purposes of calculating percentage-of-assets investment limitations and
treatment of loans secured by assignment of loans. OTS received no
comments on these paragraphs, which are retained in new Sec. 560.31.
One commenter addressing the treatment of commercial loans did suggest
that OTS explicitly state that commercial loans sold or participated
out do not count toward a thrift's 10 percent commercial loan limit.
OTS believes that new Sec. 560.31(b), which provides that loans sold to
a third party are only included in calculating a percentage-of-assets
investment limitation to the extent that they are sold with recourse,
addresses this point. In response to the commenter, OTS is adding the
phrase ``or portions of loans'' to the regulation to clarify that any
portion of participation loans sold without recourse need not be
aggregated when calculating loans subject to any percentage-of-assets
investment limit.
The January proposal indicated that the definitions of ``real
estate loan'' and ``loan commitment'' would be addressed in a later
rulemaking that would review the overall structure of OTS's regulations
and might move OTS regulatory definitions into a common part of the
Code of Federal Regulations (CFR) (the Regulatory Structure
rulemaking). In order to avoid confusion pending that rulemaking,
however, OTS has decided to incorporate these definitions,
substantially unchanged, into a new ``Definitions'' section,
Sec. 560.3. The future Regulatory Structure rulemaking may review these
definitions to determine if they should be modified, removed, or
relocated to another location in the regulations.
[[Page 50954]]
Section 545.32 Real Estate Loans
Consistent with its regulatory streamlining efforts, OTS proposed
deleting paragraph (a) of Sec. 545.32 and moving its statutory
reference into the new lending and investment powers chart. Paragraph
(a) reiterated the Home Owners' Loan Act's (HOLA's) general grant of
authority for federal savings associations to make or invest in
residential (home) or nonresidential real estate loans 4 and
explicitly authorized federal savings associations to ``originate,
invest in, sell, purchase, service, participate or otherwise deal in
(including brokerage and warehousing) [real estate] loans.'' One
commenter did suggest that OTS clarify that deletion of paragraph (a)
is not intended to eliminate any of the activities in which federal
savings associations may engage with respect to real estate loans. OTS
is deleting paragraph (a) as proposed. However, OTS wishes to emphasize
that it does not intend any change in federal thrifts' authority to
conduct these activities. OTS is moving the statutory reference in
paragraph (a) into the new lending and investment powers chart at
Sec. 560.30.
---------------------------------------------------------------------------
\4\ 12 U.S.C. 1464(c)(1)(B), (c)(2)(B).
---------------------------------------------------------------------------
OTS also proposed to delete paragraphs (b)(1) and (b)(2) of
Sec. 545.32, because these sections duplicated more comprehensive
interagency-developed real estate lending standards and appraisal
standards set forth at 12 CFR 563.100-563.101 and 12 CFR Part 564,
respectively. OTS received no comments on these paragraphs and is
deleting them as proposed. As part of today's rulemaking, the real
estate lending standards are being moved into Part 560 as new
Sec. 560.100-560.101.
OTS also proposed deleting paragraphs (b) (3), (4), (5), and (6) of
Sec. 545.32. These paragraphs discussed federal savings associations'
authority to adjust the terms of real estate loans, to amortize real
estate loans, to charge certain initial fees for real estate loans, and
to establish escrow accounts. OTS believes that the authority to
adjust, amortize, establish escrow accounts for, and charge fees for
loans properly falls within the scope of a federal savings
association's statutory authority to originate loans pursuant to the
HOLA,5 and these particular aspects of lending do not need to be
specifically identified or restricted in the CFR. Although commenters
generally supported elimination of these paragraphs, one commenter
raised the concern that if OTS removed specific regulatory language
referring to the authority of federal thrifts to adjust terms,
amortize, charge certain fees, and establish escrow accounts for real
estate loans, states may challenge whether OTS continues to occupy the
field of federal thrift lending regulation and may attempt to impose
their own lending regulations on thrifts. However, by removing these
paragraphs, OTS does not intend any narrowing of federal thrifts'
authority to conduct these activities, but rather to enhance
associations' flexibility in lending. Each of these areas is
specifically cited in the new Sec. 560.2 as an area in which state law
is preempted. Whether OTS continues to have a specific regulation or
chooses to remove a federal regulation to streamline its regulations
and reduce regulatory burden, the agency still intends to occupy the
entire field of lending regulation for federal savings associations.
Accordingly, OTS is deleting paragraphs (b) (3), (4), (5), and (6) as
proposed.
---------------------------------------------------------------------------
\5\ 12 U.S.C. 1464(c)(1)(B), (c)(2)(B).
---------------------------------------------------------------------------
Paragraph (c) of Sec. 545.32 defined the phrase ``loan made on the
security of real estate.'' In its proposal OTS sought comment on
whether the current definition of secured real estate loan has provided
adequate guidance for savings associations. One commenter indicated
that the current definition does not adequately deal with situations
involving state single action rules. OTS will consider this comment
when the agency proceeds with the definitional portion of the
Regulatory Structure rulemaking. In the interim, this definition is
being included in Sec. 560.3, ``Definitions.''
OTS proposed deleting paragraph (d) of Sec. 545.32, which addressed
loan-to-value ratios, because it duplicates more comprehensive
interagency real estate lending standards. Commenters supported
elimination of this paragraph and OTS is deleting paragraph (d) as
proposed.
Section 545.33 Home Loans
In the proposal, OTS indicated that it was considering moving the
introductory paragraph of Sec. 545.33 to a common definitional section
of the regulations as part of the Regulatory Structure Proposal. OTS
received no comments on this language, which generally describes home
loans and will retain this paragraph as part of Sec. 560.3
``Definitions,'' until its reconsideration during the definitional
rulemaking.
OTS proposed to delete paragraph (a) of Sec. 545.33. This section
described the authority of federal savings associations to amortize
home loans. One commenter did raise a concern that deletion of this
section could throw into question federal preemption of state laws
prohibiting balloon payments. As discussed under Sec. 545.32(b) (3)-
(6), the authority to amortize home loans properly falls within the
scope of savings associations' statutory authority to originate loans
and does not need to be specifically identified in the CFR. New
Sec. 560.2 specifically confirms that states cannot regulate how
federal savings associations amortize their loans. Accordingly, OTS is
deleting paragraph (a) as proposed.
OTS proposed to delete paragraph (b), which addressed loan-to-value
ratios (LTV) for home loans. Commenters agreed with OTS's view that the
interagency real estate lending standards address the same issues in a
more comprehensive and current manner and supported deletion of this
paragraph. OTS is deleting paragraph (b) as proposed.
One commenter did contend that some language in paragraph (b)
should be retained to make clear that home loans that comply at
origination with the LTV ratios set forth in the interagency real
estate lending standards but thereafter exceed them due to negative
amortization should not require special recordkeeping or reporting to a
thrift's board of directors. OTS has no requirement in either the real
estate lending guidelines or its regulations that such loans be
reported to a thrift's board and so removing this paragraph does not
impose any new reporting requirements on thrifts.
OTS proposed to delete paragraph (c), which set forth limitations
on the adjustments that may be made to the terms of residential
mortgages. It requires that adjustments to rates, payments, or loan
balances be tied to a national or regional index beyond the control of
the savings association or a formula or schedule set forth in the loan
contract. These limitations on federal savings associations are
generally much more restrictive than those applicable to state-
chartered lenders offering mortgages and have not been revised since
1983, when adjustable rate mortgage (ARM) loans were still relatively
new in the marketplace. Federal savings associations must also comply
with the notice and disclosure requirements of current Sec. 563.99.
OTS proposed to delete paragraph (c), including the external index
requirement, to give thrifts and consumers greater flexibility in
structuring ARM transactions. Most commenters supported the proposed
deletion, agreeing that it would give thrifts additional flexibility to
compete with other mortgage lenders not subject to similar
requirements. These commenters also agreed that the competitive market
place makes such
[[Page 50955]]
requirements unnecessary given the wide variety of possible sources for
home mortgage loans. Commenters also confirmed that consumers have
become familiar with ARM loans and receive detailed disclosures when
requesting such loans. The majority of commenters addressing the issue
concluded that as long as information about adjustments is clearly
disclosed to purchasers, the terms of the ARM loan should be a matter
of contract between the savings association and the purchaser.6
---------------------------------------------------------------------------
\6\ One commenter suggested removing all caps on ARM loans. The
OTS notes that 12 U.S.C. 3806, which applies to all creditors,
including savings associations, requires that all ARM loans, as
defined in that section, include limitations on the maximum interest
rate applicable during the loan term.
---------------------------------------------------------------------------
One commenter, a bank trade association, opposed the removal of
this requirement, arguing that it would be inconsistent with the Office
of the Comptroller's decision to retain such a requirement for national
banks.7 Another commenter, a trade association representing
savings associations and banks, suggested further study before removing
the requirement. Both commenters suggested that consumers might be
better protected by retaining this requirement. The second commenter
emphasized the importance of adequate disclosure.
---------------------------------------------------------------------------
\7\ See 61 FR 11294, 11297 (March 20, 1996).
---------------------------------------------------------------------------
Upon review of the comments received, OTS has decided to adopt a
new section, Sec. 560.35, ``Adjustments to Home Loans,'' requiring that
a federal savings association generally use a national or regional
index for ARM loans. Examples of such acceptable indices include the
Eleventh District's Cost of Funds Index and indices tied to one-year
Treasury bills. OTS has also decided, however, to give an association
the flexibility to use alternative indices after notifying OTS. The
notice should address how indices will be derived, how the association
will ensure the indices' availability and verifiability, and how the
indices will be disclosed to borrowers. Additionally, the notice should
outline the internal controls and processes that the association will
put in place to administer and monitor such indices. Once OTS has
reviewed and not objected to an institution's internal procedures for
the use of alternative indices, subsequent notices need only address
how new indices are derived. If OTS does not object within 30 days, the
association may proceed with using alternative indices. Use of
alternative indices will also be reviewed as part of the agency's
safety and soundness and compliance examinations.
The foregoing changes do not affect the requirement that any index
used must be readily available, independently verifiable, and
adequately disclosed in accordance with the Truth in Lending Act, any
applicable regulations, and new Sec. 560.210, which replaces existing
Sec. 563.99. Associations still may use one or more indices or a
formula or schedule set forth in the loan contract to adjust the
interest rate, payments, or loan balance.
OTS believes that this change will allow institutions potentially
greater flexibility in structuring and managing their loan portfolios
while allowing the agency the opportunity to review an association's
proposed ARM loan program, structure, and safeguards to determine
whether they would result in a suitable index to use for ARM
transactions. Consumers will continue to have the protection of a
verifiable and disclosed index and of OTS review. In response to the
commenters who noted that the Office of the Comptroller of the Currency
(OCC) has recently taken a different position on this issue, OTS notes
that the external indices issue is more important for federal thrifts
than it is for national banks. Unlike banks, thrifts are subject to the
Qualified Thrift Lender (QTL) rule. That statutorily mandated rule, 12
CFR 563.50-563.52, requires thrifts to hold an average of 65% or more
of their assets in residential mortgage loans. Because national banks
have no such requirement, they often originate such loans, but then
sell them in the secondary mortgage market. They rarely would have the
occasion to develop an alternative index because the secondary market
usually requires the use of an outside index.
Because thrifts must hold the majority of their assets in
residential mortgages, they are more vulnerable to interest rate risk
than national banks. Enabling thrifts to tie their yields on 1-4 family
residential loans with the rates they pay on deposits would help
thrifts to manage this risk and offset the competitive disadvantage
resulting from the QTL rule.
No commenters addressed the other requirements of Sec. 545.33(c)
(4)-(5), which are being removed as proposed.
OTS proposed to delete paragraph (d) of Sec. 545.33, which
addressed loans on cooperatives. Commenters agreed with OTS's view that
the interagency real estate lending standards address the same issues
in a more comprehensive and flexible manner and that this paragraph was
duplicative of those lending standards. OTS is deleting paragraph (d)
as proposed.
OTS proposed deleting paragraph (e) of Sec. 545.33, which addressed
loans to facilitate trade-in or exchange, because the interagency real
estate lending standards cover the same issues in a more comprehensive
and flexible manner. Commenters supported deletion of this paragraph.
OTS is deleting paragraph (e) as proposed.
Paragraph (f) of Sec. 545.33 specifies which OTS regulations must
be followed by state savings associations and certain other state
lenders who elect to make loans under the Alternative Mortgage Parity
Act.8 The Alternative Mortgage Parity Act preempts state laws that
might otherwise limit certain state creditors' ability to offer
alternative mortgage instruments if they comply with the OTS
regulations identified in this paragraph. OTS proposed moving paragraph
(f) in order to make it more accessible and easier to locate and to
clarify that all OTS lending regulations apply to loans originated
under the Parity Act. OTS received no comments on this proposed change.
Accordingly, OTS is moving the provisions of this paragraph, as
modified to reflect changes elsewhere in today's final rule, into new
Sec. 560.220, as part of a subpart specifically dealing with
alternative mortgages. The title of that subpart and Sec. 560.220, will
highlight the content, making it easier for those unfamiliar with OTS's
regulations to locate.
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\8\ The Alternative Mortgage Parity Act, Pub. L. 97-320, Title
VII (Parity Act), 12 U.S.C. 3801 et seq., authorizes certain housing
creditors to make alternative mortgage transactions notwithstanding
any contrary state law under certain conditions. Housing creditors
that rely on the Parity Act and are not commercial banks or credit
unions must comply with applicable OTS lending regulations.
---------------------------------------------------------------------------
Section 545.34 Limitations for Home Loans Secured by Borrower-Occupied
Property
OTS proposed removing paragraph (a) of Sec. 545.34 and
incorporating its provisions into the new consolidated lending
preemption regulation at Sec. 560.2. Paragraph (a) confirmed that
federal savings associations may include due-on-sale clauses in loan
instruments to the extent authorized under federal statutes and
regulations regardless of state prohibitions of due-on-sale
clauses.9 OTS received no comments on this proposed change, which
is adopted as proposed.
---------------------------------------------------------------------------
\9\ 12 U.S.C. 1701j-3; 12 CFR Part 591.
---------------------------------------------------------------------------
Paragraphs (b) and (c) permitted federal savings associations to
include provisions imposing late fees and prepayment penalties in loan
contracts on home loans subject to certain conditions. OTS proposed
removing these paragraphs and incorporating their limitations into new
Sec. 560.34. The three commenters who discussed these
[[Page 50956]]
paragraphs supported this reorganization. Upon further review, however,
OTS believes that separating these two paragraphs into two separate,
more specifically identified, regulations will make them easier for
users to locate. New Sec. 560.33 will cover late charges and new
Sec. 560.34 will address prepayment penalties.
Two commenters also suggested that OTS reduce or eliminate the
required fifteen-day grace period for borrowers before imposition of a
late charge. The commenters noted that only OTS, among federal bank
regulators, has such a lengthy grace period, and suggested at least
reducing the period to ten days to put savings associations on a more
level playing field with other mortgage lenders. OTS believes that the
fifteen-day grace period does not impose a hardship on institutions.
OTS is retaining the fifteen-day grace period in the final rule.
One commenter also suggested that OTS delete the reference to
``monthly'' billing in Sec. 545.34(b) (now incorporated into
Sec. 560.33), inasmuch as some creditors offer bi-weekly or other
mortgage plans. OTS is adopting this suggestion and deleting the word
``monthly'' from the final rule in order to afford institutions and
consumers more flexibility in structuring payment plans.
Section 545.35 Other Real Estate Loans
Section 545.35 set forth federal savings associations' authority to
lend and invest in nonresidential real estate subject to certain
statutory and regulatory limitations. Paragraph (a) required compliance
with real estate lending standards. Paragraph (b) reiterated the
statutory limit of 400 percent of an association's total capital
imposed on investments in nonresidential real estate. Pursuant to its
streamlining efforts, OTS proposed to delete this section, incorporate
the reference to federal savings associations' statutory authority to
invest in nonresidential real estate into the lending and investment
powers chart, and place related limitations into an accompanying
endnote. OTS received no comments on Sec. 545.35 and is making the
changes proposed.
Section 545.36 Loans To Acquire or To Improve Real Estate
OTS proposed to delete Sec. 545.36, which set forth regulatory
investment limitations pertaining to acquisition, development, and
construction loans. The one commenter addressing this proposed change
supported OTS's view that the interagency real estate lending standards
and interagency safety and soundness standards dealt with the same
issues in a more comprehensive and current manner. Accordingly, OTS is
deleting this section as proposed. OTS intends to incorporate
paragraphs (c) and (d) of Sec. 545.36 into the Handbook to provide
guidance beyond that contained in the interagency real estate lending
standards to thrifts making development loans.
Section 545.37 Combination Loans
OTS is deleting Sec. 545.37 as proposed. This section allowed
thrifts to combine sequentially different types of loans authorized by
Part 545 and made at different stages of a project, with the term of
each loan beginning at the end of the previous loan. This provision was
useful when OTS regulations limited the number of years for which
certain types of loans could be made. OTS removed those restrictions in
1992. OTS believes this section is therefore no longer necessary. The
sole commenter addressing this section supported its deletion.
Section 545.38 Insured and Guaranteed Loans
Paragraphs (a) and (b) of Sec. 545.38 authorized federal thrifts to
make insured and guaranteed residential real estate loans,
notwithstanding other provisions of Part 545 but subject to certain
limitations. OTS proposed deleting these paragraphs as unnecessary.
Federal savings associations may make an unlimited percentage of
residential real estate loans, subject to the interagency real estate
lending standards. Other regulatory restrictions have already been
removed or are being deleted from Part 545 today. OTS received no
comments on these proposed deletions, which are adopted as proposed.
Paragraph (c) addressed nonresidential real estate loans that are
guaranteed by the Economic Development Administration, the Farmers Home
Administration, or the Small Business Administration. OTS proposed
deleting this paragraph and incorporating the HOLA's statutory grant of
authority for federal thrifts to make guaranteed nonresidential real
estate loans in the endnotes to the lending and investment powers
chart. The sole commenter addressing Sec. 545.38 supported deletion of
the section as unnecessary and duplicative of the interagency real
estate lending standards.
Accordingly, OTS is deleting this paragraph as proposed and
incorporating the statutory reference into the lending and investment
powers chart.
Section 545.39 Loans Guaranteed Under the Foreign Assistance Act of
1961
OTS proposed deleting Sec. 545.39, which reiterated the HOLA's
grant of authority 10 to federal thrifts to make loans guaranteed
under the Foreign Assistance Act,11 and incorporating its
provisions into the lending and investment powers chart. OTS received
no comments on this section. OTS is incorporating the provisions of
Sec. 545.39 into the lending and investment powers chart and endnotes
and new Sec. 560.43.
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\10\ 12 U.S.C. 1464(c)(4)(C).
\11\ 22 U.S.C. 2181, 2184.
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Section 545.40 Loans on Low-Rent Housing
OTS proposed to delete Sec. 545.40, which exempted loans made
pursuant to certain low rent housing programs of the Department of
Housing and Urban Development from regulatory maximum loan term and
loan-to-value limitations. OTS believes that this section is
unnecessary because the loan term and loan-to-value ratio limitations
referred to in the section have already been or are now being removed
from OTS regulations. The one commenter who addressed this section
supported its elimination. Accordingly, OTS is deleting this section as
proposed. By deleting this section, OTS does not intend to limit
federal thrifts' authority to make low-rent housing loans pursuant to
applicable statutory and regulatory provisions, but rather to remove
obsolete restrictions that only serve to confuse those using OTS's
regulations.
Section 545.41 Community Development Loans and Investments
OTS proposed to delete Sec. 545.41 because it simply reiterated the
HOLA's grant of authority to federal savings associations to make
direct community development loans and investments, subject to an
overall five percent of assets limitation.12 OTS received no
comments on this proposed change. OTS is deleting this section as
proposed and incorporating the statutory authority reference into the
lending and investment powers chart.
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\12\ 12 U.S.C. 1464(c)(3)(B).
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Section 545.42 Home Improvement Loans
Section 545.42 reiterated the HOLA's grant of authority to federal
thrifts to make home improvement loans subject to prudent lending
standards.13 OTS
[[Page 50957]]
proposed deleting this section and incorporating the reference to
federal thrifts' statutory authority to make home improvement loans
into the lending and investment powers chart. OTS received no comments
on Sec. 545.42 and is making the proposed changes.
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\13\ 12 U.S.C. 1464(c)(1)(J).
---------------------------------------------------------------------------
Section 545.43 State Housing Corporation Investment-Insured
OTS proposed to delete Sec. 545.43 because it reiterated the HOLA's
grant of authority to federal thrifts to invest in state housing
corporation loans 14 subject to a regulatory 30 percent of assets
limitation. This section also duplicates restrictions in current
Sec. 563.95, which regulates investment in state housing corporations
for all savings associations.15 OTS received no comments on this
section. OTS is deleting Sec. 545.43, as proposed, including the 30
percent of assets limitation. The reference to the HOLA's grant of
authority to federal thrifts to invest in state housing corporation
loans has been incorporated into the lending and investment powers
chart.
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\14\ 12 U.S.C. 1464(c)(1)(P).
\15\ Section 563.95, as discussed later, is being modified and
moved into new Part 560.
---------------------------------------------------------------------------
Section 545.44 Mortgage Transactions With the Federal Home Loan
Mortgage Corporation
Section 545.44 provided, in accordance with HOLA section 5(c)(1)(E)
and the Federal Home Loan Mortgage Corporation Act, that federal
thrifts may enter into or perform mortgage transactions with Freddie
Mac. It did not impose any additional regulatory restrictions. OTS
proposed to delete this section as an unnecessary reiteration of
statutory authority and of savings associations' inherent power to
enter into business contracts. The sole commenter addressing
Sec. 545.44 supported its deletion as unnecessary. OTS is deleting
Sec. 545.44 as proposed. HOLA section 5(c)(1)(E) is now referenced in
the lending and investment powers chart.
Section 545.45 Manufactured Home Financing
OTS proposed to delete paragraph (a) of Sec. 545.45, which
contained definitions relating to manufactured home financing. The
proposed deletion of other paragraphs of this section made these
definitions unnecessary. OTS received no comments on this paragraph and
is deleting it as proposed.
OTS proposed to delete paragraph (b) of Sec. 545.45, which
reiterated the HOLA's grant of authority to federal thrifts to invest
in or make manufactured home loans.16 The two commenters
addressing this section supported these streamlining efforts, and OTS
is deleting paragraph (b) as proposed. OTS is incorporating the
statutory reference to federal thrifts' authority to invest in
manufactured home loans into the lending and investment powers chart.
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\16\ 12 U.S.C. 1464(c)(1)(J).
---------------------------------------------------------------------------
Paragraphs (c) and (d) of Sec. 545.45 addressed inventory financing
and retail financing for manufactured home chattel paper and
established term and loan-to-value limits for such loans. OTS proposed
deleting these paragraphs because they describe underwriting standards
for manufactured homes that are more suitable as guidance. The two
commenters addressing these paragraphs supported removing loan-to-value
and maximum term limits on manufactured homes to eliminate
micromanagement of the lending process. Accordingly, OTS is deleting
these paragraphs as proposed.
However, the commenters disagreed as to the extent to which these
paragraphs should be transferred to the Handbook. One commenter
suggested that underwriting guidance in the Handbook pay particular
attention to the unique risk characteristics associated with
manufactured home financing. The second commenter believed that
limitations in the Handbook would not necessarily produce better
manufactured home loan performance but rather would only limit credit
availability for low and medium income borrowers and leave thrifts at a
competitive disadvantage with regard to other types of institutions.
This commenter contended that a prudent underwriting program that
balanced creditworthiness and payment capacity of a borrower along with
product parameters, pricing differentials, and reserve requirements
provided a better means for managing risk than a program containing
strict limits on particular factors.17 OTS will review these
suggestions prior to issuing any guidance regarding mobile home
lending.
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\17\ This commenter also suggested expanding the definition of
residential property in existing Sec. 563.101 (now Sec. 560.101) of
the interagency real estate lending standards to include
manufactured homes placed on real property regardless of whether the
home is permanently affixed as determined by state law. The OTS
believes that modifying the substance of that section, which was
developed on an interagency basis, is not within the scope of this
rulemaking and defers consideration of this suggestion until a later
date.
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OTS proposed to delete paragraph (e) of Sec. 545.45, which provided
that a federal thrift's sale of manufactured home chattel paper must be
sold without recourse. Since that paragraph was first adopted, OTS has
adopted a capital regulation that requires thrifts to hold appropriate
levels of capital against all sales with recourse.18 OTS received
no comments on this proposed change and is deleting paragraph (e) as
proposed.
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\18\ See 12 CFR 567.1(kk), 567.6(a)(2)(i)(C).
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Section 545.46 Commercial Loans
OTS proposed to delete paragraph (a) of Sec. 545.46, which simply
reiterated the HOLA's grant of authority to federal thrifts to invest
in and make commercial loans not to exceed 10 percent of their
assets.19 OTS also proposed to incorporate the authority and
statutory limitation in paragraph (a) into the lending and investment
powers chart. Commenters generally supported these proposed changes,
which are adopted as proposed.
---------------------------------------------------------------------------
\19\ 12 U.S.C. 1464(c)(2)(A). The language in Sec. 545.46(a)
regarding pre-1984 investment limits is obsolete and has been
deleted.
---------------------------------------------------------------------------
OTS also proposed deleting paragraph (b), which defined commercial
loans to include commercial overdrafts related to demand accounts and
commercial unsecured loans by service corporations. OTS proposed to
incorporate paragraph (b)(1) (commercial overdrafts) into an endnote to
the lending and investment powers chart. OTS received no comments on
this proposed change, which is adopted as proposed.
OTS also proposed to remove the requirement that commercial loans
made at the service corporation level be aggregated with the 10 percent
of assets limit on commercial lending. Commenters generally agreed with
OTS's view that the statutory maximum aggregate 3 percent of assets
that federal savings associations may invest in service corporations
20 generally provides a sufficient safeguard for savings
associations investing in service corporations engaged in commercial
lending as it does for all other types of activities conducted in
service corporations. Under the current regulations, only a service
corporation's commercial loans are aggregated with its parent's loans
for purposes of statutory percentage-of-assets limitations on general
investment authority, while other service corporation investments are
not.21 Most commenters agreed with
[[Page 50958]]
OTS that such a distinction is not warranted and that such loans should
no longer be subject to the 10 percent of assets limitation on
commercial lending set forth in HOLA section 5(c)(2)(A).
---------------------------------------------------------------------------
\20\ 12 U.S.C. 1464(c)(4)(B).
\21\ 12 CFR 545.74(c)(1)(1996). For purposes of some other
regulations, such as loans to one borrower (12 CFR 563.93, to be
recodified at 12 CFR 560.93) and transactions with affiliates (12
CFR 563.41 and 563.42), investments at the service corporation level
are aggregated with investments of the parent savings association.
This final rule does not affect those regulatory provisions.
---------------------------------------------------------------------------
These commenters also agreed that by removing this aggregation
requirement federal thrifts will be afforded modest additional
flexibility to expand their commercial lending. This incremental
enhancement of thrifts' lending authority will benefit both thrifts and
their customers, without endangering safety and soundness or thrifts'
primary mission of providing mortgage lending.
One bank trade association commenter did express a concern that
removing the requirement to aggregate commercial loans made by a
service corporation with its parent's loans might circumvent the HOLA
ceiling on commercial loans. However, the HOLA does not require that a
service corporation's commercial loans be aggregated with its parent's
loans for purposes of statutory percentage-of-assets limitations on
general investment authority. Service corporations do not fall within
the definition of savings association for purposes of applying HOLA's
investments limits. As noted above, the HOLA imposes an aggregate limit
on investments in service corporations of 3 percent of assets, but does
not impose sublimits on service corporation investments. The FHLBB's
original inclusion of a service corporation's commercial loans within
its parent savings association's commercial lending authority was done
in 1983 when commercial lending was a new activity for savings
associations. Given the levels of capital now required for such loans
and OTS's experience in regulating this activity, OTS believes that
allowing this modest increase in commercial lending authority is
appropriate. OTS therefore will follow the plain statutory language of
HOLA sections 5(c)(2)(A) and 5(c)(4)(B), which do not require
aggregation of a service corporation's commercial loans with those made
by its parent.
Section 545.47 Overdraft Loans
OTS proposed to delete Sec. 545.47, because it simply reiterated
the HOLA's grant of authority to federal thrifts to make loans
specifically related to transaction accounts, including overdraft
loans. OTS also proposed to incorporate the reference to federal
thrifts' statutory authority to make overdraft loans into the lending
and investment powers chart accompanied by an endnote specifying that
commercial overdraft loans formerly covered by Sec. 545.46 remain
subject to the same commercial lending limits. OTS received no comment
on these proposed changes, which are adopted as proposed.
Section 545.48 Letters of Credit
Section 545.48 authorized federal thrifts to issue letters of
credit in conformance with the Uniform Commercial Code or the Uniform
Customs and Practices for Documentary Credits and subject to certain
general standards. As already discussed, the HOLA expressly authorizes
federal thrifts to invest in or make loans, and this express
authorization to make loans necessarily includes within it the
authority to make loan commitments and issue letters of credit. For
ease of reference, OTS proposed to reference the authority of federal
thrifts to issue letters of credit in the lending and investment powers
chart. OTS also proposed to incorporate the substance of Sec. 545.48(a)
into new Sec. 560.120 as prudent standards for the issuance of letters
of credit. OTS solicited comment on whether transferring the substance
of Sec. 545.48(a) to the new Part 560 would provide needed uniform
standards for all savings associations.
The two commenters to address this section both supported OTS's
efforts to update Sec. 545.48 to reflect current market standards and
industry usage for letters of credit. Both commenters also supported
OTS's adoption of regulatory requirements for the issuance of letters
of credit for all savings associations in order to provide uniform
standards for all thrifts. While applauding OTS's efforts to modernize
its letters of credit regulation, however, one commenter contended that
the specific language of the proposed rule was not crafted to address
some of the regulatory issues raised by contemporary letters of credit
practice. This commenter suggested that OTS review the most recent
interpretive ruling on letters of credit issued by the OCC, which was
published after OTS issued its notice of proposed rulemaking.22
---------------------------------------------------------------------------
\22\ See Interpretive Ruling: Independent Undertakings To Pay
Against Documents (12 CFR 7.1016) (61 FR 4849, 4852-3, 4865,
February 9, 1996, effective April 1, 1996).
---------------------------------------------------------------------------
Having reviewed the OCC's interpretive ruling, OTS has determined
to substantially adopt the approach taken by the OCC with respect to
the regulation of letters of credit. OTS believes that the OCC ruling
incorporates many of the modern market standards and industry usage
applicable to letters of credit. Furthermore, by substantially adopting
the OCC's approach, OTS is acting consistent with Section 303 of the
CDRIA, which encourages the federal banking agencies to move towards
greater uniformity in regulations on common supervisory issues.
In its February 9, 1996 ruling, the OCC treats letters of credit
and independent undertakings as equivalent transactions for regulatory
purposes. The OCC uses the term ``independent undertakings'' to
encompass letters of credit as well as all such unilateral commitments
under which a bank's obligation to honor its commitment is dependent
solely on the proper presentation of specified documents regardless of
extrinsic factors (except fraud, forgery, or an overriding public
policy issue).23 As the OCC points out, the term ``independent
undertakings'' is used by the United Nations Commission on
International Trade Law to cover a broad array of transactions
including commercial letters of credit, standby letters of credit, and
other undertakings that are functionally identical or equivalent to
letters of credit.24
---------------------------------------------------------------------------
\23\ See Notice of Proposed Rulemaking: Interpretive Rulings, 60
FR 11924, 11926 (March 3, 1995).
\24\ 61 FR at 4852.
---------------------------------------------------------------------------
The new Sec. 560.120 states that a thrift may issue and commit to
issue letters of credit. The new section also allows thrifts to issue
and commit to other independent undertakings approved by OTS. OTS also
believes that, in the thrift context, the broad scope of the term
``independent undertaking'' and its recent evolution require closer
supervision of such transactions when they fall outside the more
traditional activities generally known as letters of credit. National
banks have traditionally been more involved in international banking
transactions and may be more familiar than most thrifts with
nontraditional activities that fall within the term ``independent
undertakings''. OTS believes that allowing thrifts to issue independent
undertakings of a type specifically approved by OTS strikes the
appropriate balance between giving thrifts greater flexibility to
potentially engage in new types of transactions while at the same time
ensuring that thrifts have properly evaluated the risks posed by a
particular transaction consistent with prudent banking practice. OTS
anticipates that its approval may take the form of legal opinions,
general guidance, or case-by-case approvals, depending upon how the
undertakings are presented to the agency.
[[Page 50959]]
Paragraph (a) of the new Sec. 560.120 explains that a savings
association may issue and commit to issue a letter of credit or other
approved independent undertaking. Paragraph (a) also provides a non-
exclusive list of sample laws and rules of practice 25 and
explains that non-documentary conditions on the thrift's undertaking
are not relevant to the thrift's obligation to honor its commitment.
---------------------------------------------------------------------------
\25\ See footnote to the new Sec. 560.120(a).
---------------------------------------------------------------------------
Paragraph (b) of the final rule requires that thrifts evaluate
certain safety and soundness factors when issuing letters of credit and
approved independent undertakings. Paragraph (b) also requires that
thrifts possess the operational expertise commensurate with the
sophistication of their letter of credit and independent undertaking
activities. The final rule also permits a thrift to issue a letter of
credit or other approved undertaking without an express expiration
date, provided that the thrift retains the right not to renew the
transaction and to cancel the transaction upon notice to the parties.
OTS also proposed to delete paragraph (b) of Sec. 545.48, which
addressed the treatment of funds advanced under a letter of credit
without compensation from the account party, because it duplicates
Sec. 545.31(b), which OTS proposes to incorporate into Sec. 560.31(a).
OTS received no comment on this proposed deletion, which is adopted as
proposed.
Because issuing a letter of credit is not in and of itself a loan
or investment, the reference to letters of credit has been removed from
the lending and investment powers chart. When a savings association
advances funds under the terms of a letter of credit or independent
undertaking, those funds will then constitute a loan and will be
counted toward the appropriate HOLA section 5(c) investment category.
Section 545.49 Loans on Securities
OTS proposed to delete Sec. 545.49, which simply reiterated the
HOLA's grant of authority to federal thrifts to invest in loans to
financial institutions and brokers secured by obligations backed by the
United States government or certain agencies or instrumentalities
thereof.26 OTS also proposed to incorporate a reference to
thrifts' statutory authority to invest in such loans secured by U.S.
government or agency-backed obligations into the lending and investment
powers chart. The agency also proposed to remove as unnecessary the
introductory paragraph limiting permissible investments in agencies or
instrumentalities of the United States to those entities named in
Sec. 566.1(g)(3). OTS received no comments on this section and
accordingly deletes this section as proposed.
---------------------------------------------------------------------------
\26\ 12 U.S.C. 1464(c)(1)(L).
---------------------------------------------------------------------------
Section 545.50 Consumer Loans
Section 545.50 reiterates the HOLA's grant of authority to federal
thrifts to make consumer loans subject to a 35 percent of assets
limit.27 For purposes of determining compliance with this limit,
federal thrifts must aggregate their consumer loans with any
investments in corporate debt securities and commercial paper.28
In other words, a federal thrift's aggregate investments in consumer
loans, corporate debt securities, and commercial paper may not exceed
35 percent of its assets.
---------------------------------------------------------------------------
\27\ 12 U.S.C. 1464(c)(2)(D).
\28\ Id.
---------------------------------------------------------------------------
OTS proposed to delete paragraph (a) of Sec. 545.50 and to
incorporate the reference to federal thrifts' statutory authority to
make consumer loans, subject to the statutory asset limit, into the
lending and investment powers chart. OTS also proposed to include an
endnote incorporating the provisions of paragraph (c) of Sec. 545.50,
which addressed loans to dealers in consumer goods. Commenters were
generally supportive of these changes and OTS is making the proposed
changes.
OTS also solicited comment on how the definition of consumer loan
set forth in paragraph (b) of Sec. 545.50 could be clarified and
coordinated with other OTS regulations that address consumer credit.
Several commenters pointed out the inconsistency between paragraph
(b)'s definition of ``consumer loan,'' which expressly excludes credit
cards, and Sec. 561.12, which defines ``consumer credit'' to include
credit cards. OTS recognizes the ambiguity that arises from the use of
these similar, but not identical, terms in different regulatory
provisions. For purposes of HOLA investment limits and Part 560, the
term ``consumer loan'' will continue to be defined in the Definitions
section, new Sec. 560.3, as it has been in Sec. 545.50. As part of a
later Regulatory Structure rulemaking, OTS will consider how best to
minimize or eliminate the potential for confusion presented by
differing definitions of similar terms.
Under current OTS regulations, credit card loans are not subject to
the 35 percent of assets investment limit applicable to consumer loans,
corporate debt securities, and commercial paper. Section 545.51,
discussed below, governs credit card activity of federal savings
associations and imposes no percentage of assets limits on credit
cards. This approach mirrors the HOLA. HOLA section 5(b)(4) authorizes
federal thrifts to invest in consumer loans, corporate debt securities,
and commercial paper subject to a 35 percent of assets limit is
separate from the statutory provision that authorizes thrifts to invest
in credit cards. The statutory provision authorizing credit cards
contains no percentage of assets limit. The legislative history does
not provide any clear guidance regarding whether any linkage was
intended. The sole commenter addressing this issue agreed with OTS's
position that the plain language of the HOLA imposes no percentage of
assets limit on credit card operations.
The final rule carries forward the structure of OTS's existing
regulations. Under the final rule, ``consumer loan'' will continue to
be defined in a manner that excludes credit card loans. Thus, credit
card loans are not subject to the 35 percent of assets limit on
consumer loans. However, the regulation notes, at endnote 5 to
Sec. 560.30, that OTS may impose a case-by-case limit on this or any
type of lending activity if the association's concentration in such
investments presents a safety and soundness concern.
Section 545.51 Credit Cards
OTS proposed to delete paragraph (a) of Sec. 545.51, which
reiterated the HOLA's grant of statutory authority to federal thrifts
to engage in credit card operations.29 OTS proposed to incorporate
a reference to federal savings associations' statutory authority to
engage in credit card operations into the lending and investment powers
chart. OTS received no comments on this paragraph and adopts these
changes as proposed.
---------------------------------------------------------------------------
\29\ 12 U.S.C. 1464(b)(4).
---------------------------------------------------------------------------
OTS also proposed to delete paragraph (b) of Sec. 545.51, which
addressed the confidentiality of personal security identifiers in
conjunction with credit card operations, because it is redundant with
the provisions of the Electronic Funds Transfer Act and Regulation
E.30 The one commenter addressing this paragraph supported this
reasoning. OTS is deleting this paragraph as proposed.
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\30\ See 15 U.S.C. 1693 et seq. and 12 CFR Part 205
respectively.
---------------------------------------------------------------------------
Section 545.52 Loans on Savings Accounts
OTS proposed to delete Sec. 545.52, which reiterated the HOLA's
grant of authority to federal thrifts to make loans
[[Page 50960]]
on the security of savings accounts and sets forth regulatory limits on
such loans.31 OTS proposed to incorporate the reference to federal
thrifts' statutory authority to make loans on savings accounts into the
lending and investment powers chart and retain the limitation on such
loans to the withdrawal amount of the savings account as an endnote to
the chart. OTS received no comments on this section and the proposed
changes to Sec. 545.52 are adopted as proposed.
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\31\ 12 U.S.C. 1464(c)(1)(A).
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Section 545.53 Finance Leasing
Paragraph (a) of Sec. 545.53 authorized federal thrifts to engage
in various leasing activities that are the functional equivalent of
lending, subject to certain regulatory limitations.32 OTS proposed
to reference federal thrifts' finance leasing authority in the proposed
lending and investment powers chart, with an endnote cross-referencing
applicable regulatory limitations. OTS received no comment on this
proposed change, which is adopted as proposed.
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\32\ Section 545.53 cited several HOLA lending provisions, 12
U.S.C. 1464 (c)(1)(B), (c)(2)(A), and (c)(2)(D), as the basis for
federal thrifts' finance leasing authority.
---------------------------------------------------------------------------
OTS also proposed to consolidate the finance leasing requirements
of Sec. 545.53 with the general leasing requirements of Sec. 545.78
into one streamlined section, new Sec. 560.41. In connection with this
consolidation, OTS proposed to delete the term limits for finance
leases and to increase the minimum residual value requirement for
finance leases from 20 to 25 percent. The one commenter addressing
these proposed changes supported the proposed consolidation and agreed
with OTS's reasoning that institutions should be free to establish
their own term limits based on prudent underwriting criteria and market
conditions. The commenter also supported the increase in residual value
requirement because it enhanced the flexibility of thrifts' leasing
operations. Because of the complexity of leasing activities, this
commenter also suggested that OTS provide clear underwriting guidance
for various types of leasing activities in the Handbook as well as
additional examiner training on leasing arrangements. A second
commenter requested a clearer definition of ``full-payout lease'' in
Sec. 560.41(c).
In this final rule, OTS is consolidating its leasing regulations
into the newly adopted Sec. 560.41. The section has been revised to
clarify its scope and definitions. OTS is also eliminating the term
limits and increasing the minimum residual value requirement for
finance leases to 25 percent. OTS notes that the OCC allows national
banks to make finance leases with a residual value of 25 percent of the
original cost of the property to the lessor.33 OTS plans to add
underwriting guidance to the Handbook addressing leasing arrangements.
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\33\ The OCC has recently proposed amendments to its leasing
regulation at 60 FR 46246 (September 6, 1995).
---------------------------------------------------------------------------
OTS is also consolidating the salvage powers provisions in
Sec. 545.53 into the new Sec. 560.41. Paragraph (e) of that new section
outlines a thrift's salvage powers on all types of leases.
Section 545.72 Government Obligations
Section 545.72 reiterated the HOLA's grant of authority to federal
thrifts to invest in obligations of any state, territory, or political
subdivision thereof.34 OTS proposed to delete this section and
incorporate the reference to federal thrifts' statutory authority to
invest in government obligations into the lending and investment powers
chart. OTS also proposed incorporating the provisions of Sec. 545.72(a)
regarding investments in obligations meeting investment grade
requirements into a new Sec. 560.42 entitled ``State and local
government obligations.'' The lending and investment powers chart would
cite the new Sec. 560.42 in its endnotes. OTS received no comments on
these proposed changes, which are adopted as proposed.
---------------------------------------------------------------------------
\34\ 12 U.S.C. 1464(c)(1)(H).
---------------------------------------------------------------------------
In order to encourage additional sound community-related
investments, OTS also proposed modifying regulatory restrictions in
Sec. 545.72(b) before their incorporation into the new Sec. 560.42. OTS
proposed to clarify that the 1 percent of assets limitation for
investments in obligations of a state or political subdivision where a
savings association has its home or a branch office that do not meet
the rating or full faith and credit requirements of Sec. 545.72(a) is
an aggregate limit. However, OTS also proposed to allow savings
associations to invest additional amounts in such obligations, without
geographic restrictions, if the obligation is specifically approved for
investment by OTS.
The two commenters addressing this section supported OTS's
reasoning that this change would afford savings associations additional
flexibility to invest in government obligations without any threat to
the associations' safety and soundness. One commenter noted that the
obligations of local municipalities often are rated noninvestment grade
or are unrated, yet these communities could benefit from local savings
associations' increased investment in municipal bonds. Both commenters
believed that thrifts with strong capital, sound underwriting
standards, and broadly diversified investment portfolios should have
the discretion to invest in government obligations. One commenter
argued that OTS should not require prior approval before an association
is permitted to invest in government obligations in a locality in which
the association does not have a home or branch office. OTS, however,
believes that such prior approval is appropriate because the purchase
of noninvestment grade or unrated obligations is potentially risky, and
associations should be prepared to demonstrate that their decision to
invest in such obligations does not pose any threat to the
association's safety or soundness.
OTS believes that the proposed changes will give savings
associations additional flexibility while still allowing the agency to
monitor the risks presented by investments in government obligations.
The proposed rule gives thrifts the option to invest in unrated
government securities, exceed the 1 percent of assets limit for unrated
securities of localities where the thrift has an office, or invest in
obligations in localities where they do not have an office if the
thrifts obtain prior OTS approval. Accordingly, OTS adopts the proposed
modifications to paragraphs (a) and (b) of Sec. 545.72 and incorporates
those modified provisions into the new Sec. 560.42.
OTS also proposed to remove the restriction on gold-related
obligations contained in paragraph (c) of Sec. 545.72 as obsolete. OTS
received no comment on the proposed deletion, which is adopted as
proposed.
Section 545.73 Inter-American Savings and Loan Bank
Section 545.73 reiterated federal savings associations' authority
to invest in the share capital and capital reserve of the Inter-
American Savings and Loan Bank, subject to statutory and regulatory
limitations on the amount of investment.35 OTS proposed to remove
this section and incorporate this authority and limitations into the
new lending and investment powers chart, endnotes, and new Sec. 560.43,
which addresses foreign assistance investments. OTS received no comment
on these proposed changes, which are adopted as proposed.
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\35\ 12 U.S.C. 1464(c)(4)(C).
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[[Page 50961]]
Section 545.74 Service Corporations
OTS proposed, as discussed under Sec. 545.46 above, to no longer
aggregate commercial loans made by a savings association's service
corporation with commercial loans made by the savings association
itself for purposes of the statutory 10 percent of assets limitation.
The agency proposed a conforming change to Sec. 545.74(c)(1)(vi), where
this regulatory aggregation is repeated. The remaining provisions of
Sec. 545.74 are currently under separate review as part of the agency's
reinvention of its subsidiaries regulations.36 The one commenter
specifically addressing the conforming change to Sec. 545.74 supported
excluding any commercial loan booked by a service corporation from the
10 percent commercial loan limit for federal savings associations. The
commenter noted, as did the OTS proposal, that this modification would
make the treatment of commercial loans owned by service corporations
consistent with the treatment of noncommercial loans owned by service
corporations. Accordingly, OTS has modified this paragraph as proposed.
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\36\ See Notice of Proposed Rulemaking, Subsidiaries and Equity
Investments,
FR Doc. 96-23726 Lending and Investment
61 FR 29976 (June 13, 1996).
---------------------------------------------------------------------------
Section 545.75 Commercial Paper and Corporate Debt Securities
Section 545.75(a) reiterated the HOLA's grant of authority to
federal thrifts to invest in commercial paper and corporate debt
securities.37 OTS proposed to delete this paragraph and to
reference federal thrifts' statutory authority to invest in commercial
paper and corporate debt securities in the lending and investment
powers chart. The agency also proposed to retain the limitations on
these investments contained in paragraphs (b) and (c) and to move them
into the new Sec. 560.40 on commercial paper and corporate debt
securities in Part 560.38
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\37\ 12 U.S.C. 1464(c)(2)(D).
\38\ The agency also solicited comment on whether these
provisions should, alternatively, be removed from the regulations
and incorporated as guidance in the Handbook.
---------------------------------------------------------------------------
The only commenter to address this section questioned why paragraph
(b) requires a thrift's investments in commercial paper and corporate
debt securities to be denominated in dollars. OTS agrees with this
commenter's position that the HOLA, 12 U.S.C. 1464(c)(2)(D), does not
require such denomination, and previous OTS opinions have stated that
such investments are permissible as long as foreign currency risks are
properly hedged. Accordingly, OTS adopts Sec. 560.40 as proposed with
the modification that commercial paper and corporate debt securities
are no longer required to be denominated in dollars.
OTS also proposed to delete paragraph (d) of Sec. 545.75 as no
longer having any practical application for thrifts in light of
Sec. 28(d) of the Federal Deposit Insurance Act 39 (FDIA).
Paragraph (d) authorized a federal savings association to invest in
commercial paper and corporate debt securities not meeting the rating
and marketability requirements of paragraphs (b) and (c), so long as
such investments are not otherwise prohibited by Sec. 28(d) of the
FDIA, which prohibits investments by thrifts in unrated corporate
bonds. Although OTS solicited comment as to whether there was any
scenario under which an investment authorized by paragraph (d) would
not violate Sec. 28(d) of the FDIA, OTS received no responsive
comments. Because OTS believes that paragraph (d) has no practical
application for thrifts, it is deleting paragraph (d) as proposed.
---------------------------------------------------------------------------
\39\ 12 U.S.C. 1831e(d).
---------------------------------------------------------------------------
Section 545.78 Leasing
Paragraph (a) of Sec. 545.78 reiterated the HOLA's grant of
authority to federal thrifts to invest in tangible personal property
for leasing purposes.40 OTS proposed to incorporate a reference to
this statutory authority into the proposed lending and investment
powers chart. As already discussed under Sec. 545.53 earlier, OTS also
proposed to consolidate the general leasing restrictions applicable to
federal savings associations in Sec. 545.78 with the finance leasing
restrictions in Sec. 545.53 into a new Sec. 560.41. The one commenter
addressing these proposed changes supported the consolidation, and OTS
is adopting these changes as proposed.
---------------------------------------------------------------------------
\40\ 12 U.S.C. 1464(c)(2)(C).
---------------------------------------------------------------------------
OTS also proposed to delete paragraph (b) of Sec. 545.78, which
imposes a maximum 70 percent residual value limit for general leasing
activities. OTS believes that such an underwriting restriction may be
unduly restrictive if applied in all cases and that such lease
underwriting considerations are better addressed within each
association's prudent leasing policies, which will be subject to review
by OTS examiners. Furthermore, OTS plans to provide underwriting
guidance on leases in its Handbook. The one commenter addressing this
section supported the proposed deletion because it would give
additional flexibility to thrifts in structuring lease arrangements.
The commenter also suggested that additional underwriting guidance be
included in the Handbook because of the complexity of leasing
activities.
OTS is deleting the maximum 70 percent residual value limit as
proposed and replacing that requirement with more flexible underwriting
guidance in the Handbook. As discussed earlier under Sec. 545.53, the
new Sec. 560.41 addresses both general leasing and finance leasing
authority.
Section 556.2 Power To Engage in Escrow Business
Section 556.2 addressed federal thrifts' power to engage in the
escrow business. OTS proposed to delete this policy statement, because
OTS believes that the authority to establish escrow accounts is
subsumed within the authority of federal savings associations to make
loans and does not need to be specifically identified in the CFR. See
discussion above with regard to Sec. 545.32(b)(6). Although one
commenter supported the proposed elimination of this section as
unnecessary, a second commenter raised a concern that elimination of
this section might raise preemption concerns. For the reasons discussed
above with regard to Sec. 545.32(b)(6), OTS believes that a thrift's
power to establish escrow accounts does not need to be specifically
identified in the CFR. Furthermore the new preemption regulation at
Sec. 560.2 specifically cites escrow accounts as an area in which state
law is preempted. Accordingly, OTS is deleting Sec. 556.2, as proposed.
Section 556.3 Real Estate
Section 556.3(a) addressed the treatment of motels as either
improved nonresidential real estate or combination home and business
property for real estate categorization purposes. OTS proposed to
delete this paragraph and incorporate it into guidance. Section
556.3(b) permitted federal thrifts to purchase paving certificates that
constitute a lien on property securing an association's loan. OTS
proposed to delete this section and transfer the language of the policy
statement to the Handbook. OTS received no comment on these proposed
deletions, which are adopted as proposed.
Section 556.10 First Liens on Properties Sold by the Secretary of HUD
Section 556.10 reiterated federal thrifts' authority to make
mortgage loans insured by the Federal Housing Administration and
secured by first liens on improved real estate and discussed the
treatment and documentary evidence of such loans after disposal by the
Secretary of
[[Page 50962]]
Housing and Urban Development. OTS proposed to delete this policy
statement and move it to guidance in the Handbook. OTS received no
comment on this proposed deletion, which is adopted as proposed.
Section 563.93 Lending Limitations
Section 563.93 contained lending limits on all loans and extensions
of credit made by all savings associations and their subsidiaries. This
section and its accompanying Appendix are being redesignated and moved
unchanged into new Part 560 as Sec. 560.93, for ease of reference.
Section 563.95 Investment in State Housing Corporations
Section 563.95 covered investments in or loans to state housing
corporations by all savings associations. It imposed certain
conditions, including percentage-of-asset limitations, depending on the
type of loan or investment and the savings association's capital level.
OTS proposed to modify and update this section and move it into a new
Sec. 560.121 in new Part 560.
Paragraph (a) dealt with loans to, and investments in obligations
of, state housing corporations that are secured, directly or
indirectly, by first liens on federally insured improved real estate.
OTS proposed to remove percentage-of-asset investment limitations in
this paragraph (a). Commenters supported OTS's reasoning that removing
the percentage-of-assets limit would allow thrifts to exercise business
judgment in determining the amount they wished to invest in such loans
and obligations, subject, as always, to overall safety and soundness
considerations.
OTS proposed to update the language in paragraph (b), which covers
investments in obligations of state housing corporations that do not
fall under paragraph (a), in several ways. First, the agency proposed
to remove the outdated limitation based on a thrift's level of
``general reserves surplus and undivided profits.'' Instead, any thrift
that is adequately capitalized under 12 CFR Part 565 may make such
investments. Second, OTS proposed to allow investments under paragraph
(b) to be made in obligations of state housing corporations located in
any state in which the association has its home or a branch office.
Third, OTS proposed to revise the aggregate limit on such investments
to equal a thrift's total capital under 12 CFR Part 567 (rather than
its general reserves, surplus, and undivided profits) and to move this
requirement into a new paragraph (b)(2). Finally, the agency proposed
to delete the requirement that a thrift may make no more than 25
percent of its aggregate investment in this type of obligation in the
obligations of any one state housing corporation. This requirement
effectively required an institution to invest in four state housing
corporations any time it wished to invest in one.
Commenters believed that revisions to restrictions on investments
in state housing corporations would encourage institutions to make
additional sound community related investments. Savings associations'
increased participation in community-related investments could
potentially benefit communities and their affordable housing programs
without undermining thrifts' safety and soundness. Commenters also
agreed that elimination of the 25 percent limit on investments to a
single state housing corporation should cause no problem because
thrifts will be protected by the cap on aggregate investments and by
examiners' asset concentration review. One commenter urged OTS to go
further and make additional revisions, such as allowing thrifts to
invest in obligations of state housing corporations throughout the
country, not just where the thrift has a home or branch office. This
commenter also suggested removing the aggregate cap on total
investments, subject to OTS approval, under certain circumstances. OTS,
however, believes that the proposed regulatory language strikes the
appropriate balance between giving thrifts additional flexibility with
respect to investment in state housing corporations and ensuring safe
and sound operations. Accordingly, OTS adopts the proposed revisions to
paragraphs (a) and (b) of Sec. 563.95 and incorporates those revisions
into the new Sec. 560.121.
The agency also proposed to delete existing paragraph (c), which
allows thrifts (that otherwise have the legal authority to do so) to
make direct equity investments in equity securities of state housing
authorities. Federal thrifts currently do not have authority to invest
in equity securities of state housing corporations, and section 28 of
the FDIA constrains state chartered thrifts from making, or retaining
past July 1, 1994, any equity investment not permissible for federal
thrifts.41 Although OTS solicited comment as to whether there was
any scenario under which paragraph (c) was still relevant, no
commenters responded to this request. OTS deletes paragraph (c) of
Sec. 563.95 as proposed.
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\41\ See 12 U.S.C. 1831e(c), which states that a state chartered
savings association ``may not directly acquire or retain any equity
investment of a type or in an amount that is not permissible for a
Federal savings association,'' with a limited exception for service
corporation investments.
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The agency proposed to move paragraph (d), substantially unchanged,
into new Sec. 560.121 as paragraph (c). This paragraph addresses a
thrift's obligation, before making an investment in a state housing
corporation, to obtain the corporation's agreement to make information
available to OTS upon request. OTS received no comment on this
provision which is adopted as proposed.
Section 563.97 Loans in Excess of 90 Percent of Value
OTS proposed to delete Sec. 563.97, which authorized thrifts to
make loans on the security of residential real estate with loan-to-
value ratios in excess of 90 percent of value, consistent with the
interagency real estate lending standards. Commenters agreed that the
interagency real estate lending standards address the same issue in a
more comprehensive manner. OTS is deleting Sec. 563.97 as proposed.
Section 563.99 Fixed-Rate and Adjustable-Rate Mortgage Loan
Disclosures, Adjustment Notices, and Interest Rate Caps
Section 563.99 defined fixed and adjustable-rate mortgage loans and
required thrifts to make certain disclosures to applicants of
adjustable-rate mortgage loans. In order to establish parity in
coverage with other lenders, OTS proposed to add a new paragraph (g) to
exclude from Sec. 563.99's coverage adjustable-rate loans that are
primarily for a business, commercial, or agricultural purpose,
consistent with the Federal Reserve Board's (FRB) Truth in Lending
regulation, Regulation Z.42
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\42\ Regulation Z exempts from its disclosure requirements
extensions of credit primarily for business, commercial, or
agricultural purposes. See 12 CFR 226.3(a)(1).
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Commenters generally favored making Sec. 563.99's coverage
consistent with that of Regulation Z. Section 563.99 covered all
adjustable-rate loans with a term of more than one year, secured by
property occupied or to be occupied by the borrower. Unlike
Sec. 563.99, Regulation Z's coverage is not determined by the nature of
the secured property but rather by other criteria, e.g., the extension
of credit must be primarily for personal, family, or household
purposes.43 As the regulations interacted, certain transactions
were encompassed by Sec. 563.99 but not by Regulation Z. By adopting
the proposed changes to Sec. 563.99, OTS will be minimizing the
differences between that section and Regulation Z. For example, a
savings
[[Page 50963]]
association that makes a business purpose ARM loan secured by a home
will no longer be subject to the disclosure requirements set forth at
Sec. 563.99; nor would any disclosures be required under Regulation Z.
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\43\ 12 CFR 226.1(c)(1)(iv).
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Several commenters recommended deleting the disclosure portions of
Sec. 563.99 in their entirety because those provisions were duplicative
of Regulation Z. Commenters argued that two sets of disclosure
regulations confused lenders and required them to search two places to
figure out applicable regulatory requirements. OTS will undertake a
comprehensive review of Sec. 563.99 in conjunction with the FRB's
review of Regulation Z pursuant to section 303 of the CDRIA.44
Pending that review, Sec. 563.99 is being redesignated as Sec. 560.210,
so that all lending regulations will be grouped together in Part 560.
The only changes being made to Sec. 563.99 are changing its title to be
more descriptive of its content, adding a new paragraph (g), as
discussed above, and removing paragraph (a)(2), which defined ``fixed
rate mortgage loan,'' a term not used in the regulation. OTS does note
that the disclosure requirements of current Sec. 563.99 and Regulation
Z 45 are substantially similar.
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\44\ Pursuant to section 303(b) of the CDRIA, the FRB is
required to review its regulations with respect to disclosures
pursuant to the Truth In Lending Act with regard to adjustable-rate
mortgages in order to simplify the disclosures, if necessary, and
make the disclosures more meaningful and comprehensible to
consumers. 12 U.S.C. 4803.
\45\ See 12 CFR 226.19(b), 226.20(c).
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Section 563.100-563.101 Real Estate Lending Standards
These sections prescribed real estate lending standards that
require all savings associations to adopt and maintain comprehensive
written real estate lending policies that are consistent with safe and
sound practices and with the Guidelines for Real Estate Lending.46
Savings associations' policies must address certain lending
considerations including loan-to-value limits, loan administration
procedures, portfolio diversification standards, and documentation,
approval, and reporting requirements. OTS did not propose changes to
these sections, but indicated its intent to redesignate and move them
substantially unchanged into a new Part 560. OTS received no comment on
these proposed redesignations and is redesignating them as
Secs. 560.100-560.101 in the final rule issued today. The Appendix
containing the guidelines is also being redesignated.
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\46\ Appendix A to the real estate lending standards at current
Secs. 563.100-101.
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Section 563.160 Classification of Certain Assets
Section 563.160 required thrifts to classify their own assets and
establish valuation allowances. OTS proposed to delete this section in
its entirety.47 The one commenter addressing this section favored
its deletion and suggested placing classification guidance in the
Handbook. This commenter noted that the section's deletion would be
consistent with the stance of the other banking agencies which set
forth their asset classification systems as supervisory guidance, not
as regulations.
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\47\ OTS had already requested comment on deleting the
definitions of ``Substandard,'' ``Doubtful,'' and ``Loss'' set forth
in paragraph (b) and the definition of ``Special Mention'' assets in
paragraph (e) because definitions of those terms are contained in
the Handbook. 58 FR 38730 (July 20, 1993). Commenters supported such
deletions. The OTS proposed deleting paragraph (f) as part of its
regulatory review proposal, 60 FR 44442 (August 28, 1995), and
received no unfavorable comments.
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Upon further consideration, OTS has decided to retain a short
classification regulation simply stating that a savings association
must have an internal system to classify assets and must establish
appropriate valuation allowances or charge-offs, as appropriate. OTS
believes that retaining a short classification regulation at new
Sec. 560.160 will ensure that a thrift's board of directors takes
responsibility for monitoring its classification system. OTS will
transfer more detailed guidance concerning asset classification to the
Handbook consistent with the supervisory guidance of the other federal
banking agencies.
Section 563.170 Examinations and Audits; Appraisals; Establishment and
Maintenance of Records
Paragraph (a) of Sec. 563.170 authorizes OTS to examine thrifts
consistent with OTS policies and to annually assess thrifts for the
costs of such examinations based on the thrifts' assets. OTS proposed
to retain this paragraph. The agency received no comment on this
section, which is retained as proposed in its current location.
Paragraph (b) authorizes OTS to select appraisers to perform
appraisals of real estate in connection with examinations and audits
and requires thrifts to pay for such appraisal services. OTS proposed
to retain this paragraph. The agency received no comment on this
section, which is also retained as proposed.
Paragraph (c) sets forth general record maintenance requirements
for savings associations to ensure that examiners have access to an
accurate and complete record of all business transacted by the thrift.
OTS proposed to retain this general introductory paragraph, with a
modification to incorporate language in current paragraph (c)(9) on
maintaining records required by other laws or regulations.
Paragraphs (c) (1)-(9), however, set forth a list of specific loan
documents that, at a minimum, thrifts must maintain to comply with
Sec. 563.170(c). OTS proposed replacing the specific documentation
requirements listed in paragraphs (c) (1)-(9) with more general
documentation standards in a new Sec. 560.170 in Part 560. These
proposed standards were drawn from the interagency Standards for Safety
and Soundness regulations and attached Guidelines Establishing
Standards for Safety and Soundness.48 These guidelines set forth
loan documentation and credit underwriting requirements to which all
federal insured depository institutions are expected to adhere. These
underwriting and documentation standards minimize the need for OTS to
have a regulation mandating specific documentation requirements.49
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\48\ 12 CFR Part 570 and Appendix A thereto, 60 FR 35674 (July
10, 1995).
\49\ Guidelines appended to the interagency real estate lending
standards also state that an institution should establish loan
administration procedures that address documentation. See 12 CFR
Part 563, Subpart D, Appendix A (redesignated in this rulemaking as
Appendix to Sec. 560.101).
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Commenters unanimously supported OTS's proposal to eliminate the
detailed list of documents required in paragraphs (c) (1)-(9).
Commenters agreed with OTS's reasoning that although the documents
listed were generally appropriate for prudent lending, a rigid
requirement that all documents be present for each loan was too
restrictive and did not necessarily address all safety and soundness
concerns. Commenters believed that elimination of the specific document
list would give lenders more flexibility to tailor loan documentation
to various types of loans and to determine which particular documents
would be most appropriate for a specific loan.
For example, previously Sec. 563.170(c)(1)(v) required either a
financial statement or a credit report for all loans, ostensibly to
justify the borrower's willingness and ability to repay the loan.
However, the ability and willingness of a borrower to repay a consumer
or home loan may be better demonstrated with a verification of
employment (not previously required) and a satisfactory credit report,
rather than a financial statement. For commercial borrowers,
verification by
[[Page 50964]]
the institution that the borrower's financial statements accurately
reflect all assets, liabilities, and any other guarantees or
encumbrances is more important to the decision to extend credit than
the mere presence of a financial statement. The more flexible language
of new Sec. 560.170 will allow thrifts to obtain documentation that
best satisfies safety and soundness concerns raised in a particular
transaction, while at the same time relieving thrifts of the burden of
technical compliance with a document checklist that may not necessarily
be relevant to prudent lending.
Commenters also agreed that deleting paragraphs (c) (1)-(9) would
relieve savings associations of documentation requirements that exceed
those for banks and other financial institutions as well as enable
savings associations to take better advantage of technological
marketplace advances such as telephone and computerized home banking.
New Sec. 560.170 will allow savings associations to participate in
telephone and computerized home banking without running afoul of paper
driven-requirements. Accordingly OTS adopts the changes to
Sec. 563.170(c) as proposed.
In its proposal, OTS also considered transferring the current
document list in paragraphs (c) (1)-(5), and (7) to the Handbook to be
used as a checklist of records generally maintained by prudent lenders
to support a loan. Several commenters raised concerns regarding the
language of the guidance that would be included in the Handbook. One
commenter urged that if OTS includes a document list in the Handbook,
the agency should also clearly state that the list is intended only as
guidance and not as rigid minimum requirements for safety and
soundness. The commenter suggested inserting language to the effect
that the lender (based on borrower creditworthiness, the specific
program and product offering, pricing, project delinquency, loss
profile, and title and appraisal information) should have the
discretion not to require certain documents in any given situation.
Another commenter recommended deletion of the requirement that loan
documents identify a purpose for the loan because lines of credit are
now used for any purpose, the identification of which is not necessary
to proper underwriting. The interagency guidelines establishing
standards for safety and soundness do state that a lender should
identify the purpose of a loan.50 However, OTS will review these
comments prior to issuing any loan documentation guidance to be
included in the Handbook.
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\50\ 60 FR at 35679.
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Paragraph (c)(10) of Sec. 563.170 exempted certain small business
loans from the documentation requirements set forth in paragraphs (c)
(1)-(7). OTS proposed to delete paragraph (c)(10) inasmuch as the
streamlining of the requirements currently located in paragraphs (c)
(1)-(7) eliminates the need for this exemption. OTS received no comment
on this paragraph, which is deleted as proposed.
OTS proposed to retain paragraph (d) of Sec. 563.170, which
addresses changes in the location of accounting or control records. One
commenter questioned whether advances in computer technology rendered
this paragraph obsolete since computerized accounting and control
records could be accessed at many locations. Although OTS recognizes
that computerized records may be read from computer terminals in many
locations, OTS believes that the agency may need to know the location
of the server where computer records are physically stored for
examination purposes. Accordingly, OTS is retaining this paragraph as
proposed.
OTS proposed to retain paragraph (e), which addresses use of data
processing services for maintenance of records. One commenter suggested
that all but the last sentence of this paragraph could be eliminated
inasmuch as maintenance of records by means of data processing services
has become the norm and requiring a thrift to notify the Region in
which its principal office is located of such maintenance creates
unnecessary paperwork. Although OTS agrees that thrifts routinely
maintain records by means of data processing services, the agency
believes that this paragraph serves the purpose of requiring
institutions to identify the particular records to be maintained by a
data processing service and the location where such records are
maintained. This information may be critical to an examination or
enforcement inquiry. Accordingly, OTS is retaining this paragraph as
proposed.
To summarize, Sec. 563.170 is being modified as proposed, by
removing the specific loan documentation requirements of paragraphs (c)
(1) through (10) and by retaining the remainder of the regulation. The
specific loan documentation requirements have been replaced by more
general lending documentation requirements in new Sec. 560.170.
Section 563.172 Reevaluation of Real Estate Owned
Section 563.172 required savings associations to appraise all real
estate owned (REO) at the earlier of in-substance foreclosure or at the
time of acquisition and, thereafter, as dictated by prudent management
policy. In its proposal OTS discussed deleting this section because
thrifts can apply the appraisal regulations and general accounting
principles (GAAP) to determine when an appraisal may be appropriate or
necessary for safety and soundness. Two commenters supported
elimination of this section to give lenders more flexibility with
regard to the timing of an appraisal for property soon to become REO.
Commenters agreed, however, that it is sound policy to require an
appraisal for REO. Upon consideration, OTS has decided to retain this
regulation to specify when, at a minimum, safety and soundness require
an appraisal of REO. Accordingly, it is incorporating Sec. 563.172
unchanged into the new Part 560 as new Sec. 560.172.
Section 571.8 Investment in State Housing Corporations
Section 571.8 limited savings associations' investment authority in
state housing corporations to certain public and private corporations
and agencies. OTS proposed to delete this policy statement as an
unnecessary limitation on the definition of state housing corporation.
The one commenter to address this section supported its deletion. OTS
is deleting Sec. 571.8 as proposed.
Section 571.13 Participation Interests in Pools of Loans
Section 571.13 addressed appropriate documentation for a savings
association's purchase of a participation interest in a pool of loans
(in the nature of mortgage-backed securities) and indicated that
compliance with the documentation requirements of Sec. 563.170 may be
impracticable for such transactions. OTS proposed to delete this
section inasmuch as the proposed revision of Sec. 563.170(c) would
eliminate the need for this policy statement. OTS received no comment
on this section, which is deleted as proposed. OTS plans to transfer
the documentation guidance for purchases of participation interests in
pools of loans to the Handbook.
Section 571.20 Payment for Appraisals
OTS proposed to delete Sec. 571.20, which addressed payment by
savings associations for appraisals obtained as part of an OTS
examination. OTS received no comment on this section, which is deleted
as proposed. OTS expects to transfer this policy statement to the
Handbook.
[[Page 50965]]
Section 571.22 Most Favored Lender Status
Section 571.22 implemented section 4(g) of the HOLA, which
authorizes savings associations to charge on any extension of credit an
interest rate equal to the greater of: (a) One percentage point above
the discount rate on 90-day commercial paper in effect at the Federal
Reserve Bank in the Federal Reserve district in which the savings
association is located; or (b) the rate allowed by the laws of the
State in which the savings association is located for the state's most
favored lender. OTS proposed to move Sec. 571.22 into new
Sec. 560.2(d)(1) and requested comment on whether certain provisions in
Sec. 571.22 should be modified. Because HOLA section 4(g) and this
regulation apply to all savings associations, however, Sec. 571.22 is
being moved to a new Sec. 560.110, ``Most Favored Lender, Usury
Preemption'' in Subpart B of Part 560, which applies to all savings
associations. Changes to the text of the regulation are discussed under
Sec. 560.110 below.
2. New Part 560--Lending and Investment
OTS proposed to adopt a new Part 560, Lending and Investment, that
would ultimately include all of the agency's lending and investment
regulations except for Appraisals (Part 564) and subsidiary-related
investments (currently proposed to be located in new Part 559).
Commenters generally agreed with OTS's view that this reorganization
will make it much easier for those using the agency's regulations to
find all relevant lending and investment powers, authorities, and
limitations. Accordingly, OTS is adopting new Part 560 as discussed
below.
Section 560.1 General
This section sets out the basic statutory authority for lending and
indicates which regulations in this part will apply only to federal
savings associations and which regulations apply to all savings
associations. It also briefly sets forth the agency's expectations that
all lending and investment activities are to be conducted prudently,
consistent with safety and soundness, with adequate portfolio
diversification, and in a manner appropriate for the size of the
institution, the nature and scope of its operations, and conditions in
its lending market. OTS received no comment on this section, which is
adopted as proposed, with minor clarifications.
Section 560.2 Applicability of Law
This section sets forth OTS's longstanding position, as developed
in case law and legal opinions by both OTS and its predecessor, the
FHLBB, and as reflected in Sec. 545.2, on the federal preemption of
state laws affecting the lending activities of federal savings
associations. Because the agency proposed to move its lending
regulations out of Part 545 and, thus, separate them from its general
preemption regulation, Sec. 545.2, and because the agency proposed to
remove many of the details of the lending regulations that had been
previously cited in preemption opinions, OTS also proposed new
Sec. 560.2 to confirm and carry forward its existing preemption
position.
It is well established that state laws can be preempted not only by
federal statutes, but also by federal regulations promulgated pursuant
to authority delegated by Congress.\51\ In this regard, the Supreme
Court has recognized that Congress gave the regulator of federal
savings associations broad preemptive authority:
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\51\ Fidelity Federal Savings & Loan Association v. de la
Cuesta, 458 U.S. 141, 153-154 (1982).
Congress enacted the HOLA [as] ``a radical and comprehensive
response to the inadequacies of the existing state systems * * *.''
Thus, in section 5(a) of the [HOLA], Congress gave the [FHLBB and
now the OTS] plenary authority to issue regulations * * *
``providing for the * * * incorporation, examination, operation, and
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regulation of [federal savings] associations * * *.''
Congress directed that, in regulating federal [savings
associations], the [FHLBB and OTS should] consider ``the best
practices of local mutual thrift and home financing institutions in
the United States,'' which were at the time all state-chartered. By
so stating, Congress plainly envisioned that federal savings
[associations] would be governed by what the [FHLBB and now OTS]--
not any particular state--deemed to be the best practices, and
approved the [FHLBB's and OTS's] promulgation of regulations
superseding state law * * *.52
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\52\ Id. at 160-167 (citations omitted).
Consistent with the foregoing, courts have long recognized that
federal savings associations organized under the HOLA are uniquely
federalized financial institutions--even more so than national
banks.53 Prior to enactment of the HOLA, `` `the states had
developed a hodgepodge of savings and loan laws and regulations, and
Congress hoped the [the FHLBB, and now OTS] rules would set an example
for uniform and sound savings and loan regulation.' '' 54
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\53\ People v. Coast Federal Savings & Loan Association, 98 F.
Supp. 311, 319 (S.D. Calf. 1951).
\54\ Conference of Federal Savings and Loan Associations v.
Stein, 604 F.2d 1256 (9th Cir. 1979) (citation omitted).
Thus, OTS is authorized to promulgate regulations that preempt
state laws affecting the operations of federal savings associations
when deemed appropriate to: (i) Facilitate the safe and sound operation
of federal savings associations, (ii) enable federal savings
associations to conduct their operations in accordance with the best
practices of thrift institutions in the United States, or (iii) further
other purposes of the HOLA. Because lending lies at the heart of the
business of a federal thrift, OTS and its predecessor, the FHLBB, have
long taken the position that the federal lending laws and regulations
occupy the entire field of lending regulation for federal savings
associations, leaving no room for state regulation. For these purposes,
the field of lending regulation has been defined to encompass all laws
affecting lending by federal thrifts, except certain specified areas
such as basic real property, contract, commercial, tort, and criminal
law.
As a result, instead of being subject to a hodgepodge of
conflicting and overlapping state lending requirements, federal thrifts
are free to originate loans under a single set of uniform federal laws
and regulations. This furthers both the ``best practices'' and safety
and soundness objectives of the HOLA by enabling federal thrifts to
deliver low-cost credit to the public free from undue regulatory
duplication and burden. At the same time, the interests of borrowers
are protected by the elaborate network of federal borrower-protection
statutes applicable to federal thrifts, including the Truth in Lending
Act, the Real Estate Settlement Procedures Act, the Equal Credit
Opportunity Act, the Fair Housing Act, the Home Mortgage Disclosure
Act, the Fair Credit Reporting Act, the Consumer Leasing Act, the Fair
Debt Collection Practices Act, the Community Reinvestment Act, and the
Federal Trade Commission Act.55 In addition, in those instances
[[Page 50966]]
where OTS has detected a gap in the federal protections provided to
borrowers, the agency has promulgated regulations imposing additional
consumer protection requirements on federal thrifts.56
\55\ Several of these statutes contain provisions that expressly
disclaim any intent to preempt non-conflicting state statutes
falling in the same subject area. E.g., 12 U.S.C. 2616 (Real Estate
Settlement Procedures Act); and 15 U.S.C. 1610 (Truth in Lending
Act). The fact that one or several federal statutes do not preempt
certain types of state laws, however, does not preclude the
possibility that other federal statutes or regulations might do so
under more defined or specific circumstances. In this regard, it is
important to note that the above-referenced federal statutes that
contain preemption disclaimers apply to all types of lenders
(including state-chartered lenders), not just federal savings
associations. The fact that Congress did not wish to preempt the
application of state laws to this general universe of lenders
(including lenders chartered and regulated by the very states whose
laws would be preempted), does not preclude the possibility that
Congress may have elsewhere evidenced a specific intent to preempt,
or permit a federal regulator to preempt, the application of state
laws to a particular category of lender--in this case, federal
savings associations. This is precisely the conclusion reached by
the court in First Federal Savings & Loan Association v. Greenwald,
591 F.2d 417 (1st Cir. 1979). There, the court held that OTS's
predecessor, the FHLBB, was authorized by Congress in the HOLA to
preempt state lending laws even when they fall in areas covered by
the preemption disclaimer in the Real Estate Settlement Procedures
Act. We believe the court's holding reflects a correct understanding
of the interplay between the HOLA and the above-referenced statutes,
as evidenced by the legislative history of the HOLA. See, e.g., 124
Cong. Rec. 33848 (Statement of Rep. Minish); 124 Cong. Rec. 36148
(1978) (colloquy between Sen. Proxmire and Sen. Brooke confirming
that federal thrifts are not subject to state truth in lending
requirements); 124 Cong. Rec. 33848-33849 (statement of Rep. St
Germain to the same effect); and 126 Cong. Rec. 6981 (1980)
(colloquy between Rep. St Germain and Rep. Patterson confirming that
thrifts, unlike national banks, are not subject to state lending
laws).
\56\ See, e.g., 12 CFR Part 535 (prohibited consumer credit
practices) and new Secs. 560.33 (late charges), 560.34
(prepayments), and 560.35 (adjustments to home loans).
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New Sec. 560.2 carries forward this approach to federal preemption.
Although the final form of regulation is similar to what was proposed,
some changes have been made in response to comments received. Several
commenters expressed concern that the statement in proposed
Sec. 560.2(a) that OTS intended to occupy the entire field of lending
regulation for federal thrifts would not be sufficient to restrain
state regulators from asserting jurisdiction, given that OTS was also
proposing to remove some of its more detailed regulatory language
specifically authorizing federal thrifts to engage in various lending-
related practices, e.g., advertising, charging certain fees, and
establishing escrow accounts. One commenter suggested that OTS expand
its noninclusive illustrative list of the types of state laws preempted
to reference additional laws, such as those pertaining to private
mortgage insurance or other credit enhancements, loan servicing,
charging application and overlimit fees, establishing impound and
similar accounts, using credit reports, and setting certain interest
rate ceilings. Other commenters echoed these concerns.
In response to commenters' concerns, OTS has made some changes to
Sec. 560.2. Paragraph (a) still explicitly states the agency's intent
to occupy the field of lending regulation for federal thrifts. However,
the statutory bases and regulatory rationale for this occupation are
more clearly articulated. In addition, to avoid any impression that the
repeal of certain lending regulations is intended to abdicate portions
of the lending field to state regulation, we have added an affirmation
that, ``OTS intends to give federal savings associations maximum
flexibility to exercise their lending powers in accordance with a
uniform federal scheme of regulation.''
Paragraph (b) contains an expanded list of examples of the types of
state laws that are preempted. The introductory text in paragraph (b)
continues to emphasize that the list is not intended to be exhaustive.
Failure to mention a particular type of state law that affects lending
should not be deemed to constitute evidence of an intent to permit
state laws of that type to apply to federal thrifts. To the contrary,
Sec. 560.2 is based on the premise that any state law that affects
lending is preempted unless it clearly falls within the parameters of
paragraph (c).
Paragraph (b) also continues to contain an exception clause
indicating that certain state laws that would not ordinarily apply to
federal savings associations may nevertheless apply when an association
elects to utilize a state's most favored lender usury rate. When
utilizing a state's most favored lender rate, a federal savings
association must comply with all laws of its ``location'' state that
fall within the ambit of the term ``interest,'' as used in section 4(g)
of the HOLA, as well as any other state laws ``material to the
determination of the interest rate.'' For a fuller discussion of these
issues, see the description below of new Sec. 560.110 (most favored
lender).
Paragraph (c) describes certain types of state laws that OTS does
not intend to preempt. Several commenters urged deletion of this
paragraph. Commenters expressed concern that states seeking to avoid
federal preemption of their laws or regulations might attempt to
characterize those laws as falling within paragraph (c). Commenters
contended that the language used to describe the categories of non-
preempted laws was too broad and could create ambiguity about which
state laws federal thrifts would be required to follow. For example,
states might place laws purporting to regulate lending-related fees in
the portions of state codes dealing with general contract or real
property laws in an effort to avoid preemption.
OTS believes that paragraph (c) should be retained in order to
provide guidance regarding the scope of preemption intended by
paragraph (a). OTS wants to make clear that it does not intend to
preempt basic state laws such as state uniform commercial codes and
state laws governing real property, contracts, torts, and crimes. To
reduce the potential for misunderstanding, however, we have made
several changes to paragraph (c). First, we have modified the
regulatory language that precedes the list of state laws that are not
preempted. The introductory language now indicates that laws falling in
these areas are not preempted to the extent that they either: (i) Have
only an incidental impact on lending; or (ii) are otherwise not
contrary to the purposes expressed in paragraph (a) of the regulation.
We also have added a provision to paragraph (c) disclaiming an intent
to preempt other state laws that may affect lending, but that OTS, upon
review, finds further a vital state interest and meet the foregoing
two-part test.
Adding this two-part test to the regulation will provide an
interpretive standard for identifying state laws that may be designed
to look like traditional property, contract, tort, or commercial laws,
but in reality are aimed at other objectives, such as regulating the
relationship between lenders and borrowers, protecting the safety and
soundness of lenders, or pursuing other state policy objectives.
When confronted with interpretive questions under Sec. 560.2, we
anticipate that courts will, in accordance with well established
principles of regulatory construction, look to the regulatory history
of Sec. 560.2 for guidance. In this regard, OTS wishes to make clear
that the purpose of paragraph (c) is to preserve the traditional
infrastructure of basic state laws that undergird commercial
transactions, not to open the door to state regulation of lending by
federal savings associations. When analyzing the status of state laws
under Sec. 560.2, the first step will be to determine whether the type
of law in question is listed in paragraph (b). If so, the analysis will
end there; the law is preempted. If the law is not covered by paragraph
(b), the next question is whether the law affects lending. If it does,
then, in accordance with paragraph (a), the presumption arises that the
law is preempted. This presumption can be reversed only if the law can
clearly be shown to fit within the confines of paragraph (c). For these
purposes, paragraph (c) is intended to be interpreted narrowly. Any
doubt
[[Page 50967]]
should be resolved in favor of preemption.
As questions arise, OTS will issue interpretive guidance consistent
with the foregoing. While recognizing that no regulation can anticipate
and expressly resolve all questions, we believe that new Sec. 560.2
provides thrifts with substantially more guidance than was available
under Sec. 545.2, thereby enabling them to plan and operate their
lending operations more efficiently. From time to time, OTS will
review, update, and modify Sec. 560.2 to ensure that it reflects new
developments and promotes ``best practices'' and safety and soundness.
Paragraph (d) of proposed Sec. 560.2 was derived from former
Sec. 571.22. It is being adopted as Sec. 560.110, incorporating the
modifications described earlier under that section.
Section 560.3 Definitions
This new section has been added to set forth in Part 560 lending-
related definitions formerly located in Part 545.
Subpart A--Lending and Investment Powers for Federal Savings
Associations
This subpart contains lending and investment regulations directly
applicable only to federal savings associations. These regulations are
nonetheless relevant to state-chartered savings associations by virtue
of Sec. 28 (a) and (b) of the FDIA and the Federal Deposit Insurance
Corporation's regulations at 12 CFR 303.13, which look to the type and
amount of activities permissible for federal savings associations as a
baseline for activities permitted for state-chartered savings
associations.
Section 560.30 General Lending and Investment Powers
Proposed Sec. 560.30 took the form of a chart that listed many of
the lending and investment powers granted to federal thrifts by the
HOLA. It was derived from the regulations that currently appear in Part
545. An important component of this regulation are the endnotes to the
chart that elaborate upon statutory limitations, impose regulatory
limitations, or otherwise describe conditions on the exercise of these
powers.
Commenters generally found the chart to be a very workable
reference tool, particularly for percentage of assets limitations for
specific types of loans and investments. Commenters believed that the
chart form with its statutory cross references made it easier for the
CFR user to locate statutory authority for various types of loans and
investments. At least one commenter suggested that the chart would be
more useful if it were more inclusive and listed additional statutory
and regulatory lending and investment powers. Accordingly, OTS is
adopting the lending and investment powers chart in the final rule in a
more inclusive form with additional references to thrifts' statutory
powers with regard to bankers' bank stock, business development credit
corporations, unsecured construction loans, deposits, securities issued
by the Federal government and government-sponsored enterprises, HUD-
insured or guaranteed investments, insured loans, liquidity
investments, mortgage-backed securities, nonconforming loans, the
National Housing Partnership Corporation and related partnerships and
joint ventures, and small business-related securities.57 Other
references in the chart on community development and letters of credit
have been modified or removed so that the chart more clearly reflects
lending and investment powers specifically authorized by the statute.
---------------------------------------------------------------------------
\57\ As part of its subsidiaries and equity investment proposal,
OTS has requested comment on other additions to this chart,
affecting service corporations, certain open-end management
investment companies, and small business investment companies. 61 FR
at 29981.
---------------------------------------------------------------------------
Section 560.31 Election Regarding Categorization of Loans or
Investments and Related Calculations
This section is derived from current Sec. 545.31, incorporating the
modifications described earlier under that section.
Section 560.33 Late Charges
This section is derived from current Sec. 545.34(b). It has been
modified as discussed under that section.
Section 560.34 Prepayments
This section is derived from current Sec. 545.34(c). The first
sentence of that section has been rewritten to make it easier to
understand, but no substantive change is intended. Advanced payments of
regular installments are not considered prepayments for purposes of
this regulation, as compared to payments to reduce the principal
balance due on a loan.
Section 560.35 Adjustments to Home Loans
This section is derived from current Sec. 545.33(c) and has been
modified as discussed under that section.
Section 560.40 Commercial Paper and Corporate Debt Securities
This section is derived from paragraphs (b) and (c) of current
Sec. 545.75. It has been modified as discussed under that section.
Section 560.41 Leasing
This section consolidates and reorganizes current Sec. 545.53
(finance leasing) and Sec. 545.78 (general leasing authority),
incorporating the modifications described under those sections. It has
been reorganized to clarify the separate sources of authority and
requirements that apply to these two types of leasing.
Section 560.42 State and Local Government Obligations
This section is derived from Sec. 5(c)(1)(H) of the HOLA and
paragraphs (a) and (b) of current Sec. 545.72. It is being adopted as
proposed.
Section 560.43 Foreign Assistance Investments
This section is a consolidation and reorganization of current
Secs. 545.39 and 545.73.
Subpart B--Lending and Investment Provisions Applicable to All Savings
Associations
This subpart contains safety and soundness based lending standards
and provisions applicable to all savings associations, including state
savings associations, to the extent that they have the authority to
make the investments it discusses.
Section 560.93 Lending Limitations
This section, including its appendices, has been moved, with only
technical conforming changes, from Sec. 563.93.
Section 560.100 Real Estate Lending Standards; Purpose and Scope
This section has been transferred without change from Sec. 563.100.
Section 560.101 Real Estate Lending Standards
This section and the accompanying appendix have been transferred
with only technical and conforming changes, from Sec. 563.101 and Part
563, Subpart D, Appendix A.
Section 560.110 Most Favored Lender Usury Preemption
This section implements section 4(g) of the HOLA. Section 4(g)
provides that, notwithstanding any contrary state law, savings
associations may charge interest on any extension of credit at a rate
equal to the greater of: (a) One percentage
[[Page 50968]]
point above the discount rate on 90-day commercial paper in effect at
the Federal Reserve Bank in the Federal Reserve district in which the
savings association is located; or (b) the rate allowed by the laws of
the state in which the savings association is located for the state's
most favored lender, i.e., the class of state lending institution
authorized to charge the highest interest rate. Section 560.110
replaces Sec. 571.22, which is being removed today.
In its January proposal, OTS restated the text of Sec. 571.22, with
several changes intended to eliminate unnecessary verbiage. However,
OTS also solicited comment regarding whether paragraph (b) of the
regulation should be modified to conform more closely to the OCC's most
favored lender regulation.
Paragraph (b) of Sec. 571.22 indicated that any savings association
electing to make loans at the interest rate authorized for a state most
favored lender must also comply with the same ``substantive state law
requirements'' that are applicable to that state lender when making
loans of the same type. The OCC interpretive regulation, which
implements a parallel statutory provision for national banks, uses a
slightly different phrase to describe what types of state laws must be
complied with pursuant to the most favored lender doctrine. The OCC
requires national banks to comply with all state laws that apply to the
state most favored lender and are ``material to the determination of
the interest rate'' authorized under state law.58 OTS has
previously opined that this standard is similar, though not identical,
to OTS's ``substantive law'' standard.59 OTS specifically
requested comment regarding whether paragraph (b) of Sec. 571.22 should
be replaced in its entirety with a reference to state laws that are
``material to the determination of the interest rate.''
---------------------------------------------------------------------------
\58\ 12 CFR 7.7310 (revised and recodified at 12 CFR 7.4001, 61
FR at 4869).
\59\ OTS Op. Chief Counsel, Oct. 14, 1992.
---------------------------------------------------------------------------
Two commenters responding to this inquiry supported adoption of the
OCC's regulatory language. The commenters believed that the OCC
language is more precise and its adoption would promote parity and
uniformity in the agencies' interpretations of most favored lender
questions consistent with section 303 of the CDRIA.
A third commenter raised a concern that the OCC's provision
(``material to the determination of the interest rate'') was narrower
in scope than OTS's substantive law standard. This commenter noted that
OTS currently interprets substantive state law requirements to include
disclosure laws. The commenter reasoned that by complying with federal
disclosure laws and disclosure laws in the state where it is located, a
thrift need not comply with disclosure laws in states where it is not
located but where borrowers reside. The commenter argued that this
approach helps thrifts to make interstate loans more efficiently under
a single set of disclosures that comply with federal law and the law of
state where it is located without having to comply with a multiplicity
of state specific disclosure requirements.
Contrary to the commenter's concern, adopting the ``materiality''
standard will not subject federal thrifts to the disclosure laws of
``non-location'' states. New Sec. 560.2(b)(9), discussed above,
specifically indicates that state disclosure requirements do not apply
to federal thrifts, except when required by Sec. 560.110. Nothing in
Sec. 560.110 applies the disclosure laws of non-location states to
federal savings associations. Under Sec. 560.110, only the disclosure
laws of the location state will ever apply. If the ``substantive law''
standard were carried forward, the disclosure laws of the location
state would apply every time a thrift made a loan under the most
favored lender doctrine. By contrast, if the ``materiality'' standard
is adopted, the disclosure laws of the location state will apply only
in those rare instances where those laws are material to the
determination of the interest rate. Thus, in the interest of reducing
regulatory burden and establishing greater uniformity, OTS has decided
to adopt the ``materiality'' standard.
The debate about the ``materiality'' standard, however, raises a
more general question about whether OTS should conform the entire text
of its most favored lender regulation to the OCC regulation. In this
regard, we note that the courts have recognized that, when enacting
section 4(g) of the HOLA, Congress intended to give savings
associations the same most favored lender status conferred upon
national banks.60 Thus, OTS and its predecessor, the FHLBB, have
long looked to the OCC regulation and other precedent interpreting the
national bank most favored lender provision for guidance in
interpreting section 4(g) and OTS's implementing regulation.61 But
for the distinction discussed above regarding the ``materiality''
standard, differences between OTS and OCC regulations have been purely
a matter of syntax, not substance.
---------------------------------------------------------------------------
\60\ Gavey Properties/762 v. First Financial Savings & Loan, 845
F.2d 519, 521 (5th Cir. 1988); and 12 CFR 571.22 (1996).
\61\ See, e.g., OTS Op. Chief Counsel, Dec. 24, 1992, pp. 3-4.
---------------------------------------------------------------------------
In February of this year, after OTS had issued its proposal, the
OCC amended and updated its most favored lender regulation.62 The
primary change was to add an express definition of the term
``interest'' that was consistent with past precedent. The Supreme Court
recently upheld this definition as a reasonable construction of the
statutory most favored lender provision for national banks.63
Under the OCC's amended regulation, the term ``interest'' is defined to
include, without limitation, numerical periodic rates, late fees, not
sufficient funds fees, overlimit fees, annual fees, cash advance fees,
and membership fees.
---------------------------------------------------------------------------
\62\ 61 FR at 4869.
\63\ Smiley v. Citibank (South Dakota), N.A., 116 S. Ct. 1730
(1996).
---------------------------------------------------------------------------
Given the similarities between section 4(g) of the HOLA and the
national bank most favored lender provision, OTS believes that the term
``interest'' as it appears in section 4(g) and OTS's implementing
regulation should be interpreted in a manner consistent with the OCC
regulation and the Supreme Court's decision, even if the new OTS
regulation did not expressly define the term.64
---------------------------------------------------------------------------
\64\ This means, among other things, that when federal thrifts
elect to make loans in reliance on the most favored lender rate of
their location state, they must comply with any limits the location
state imposes on the lending fees encompassed within the term
``interest,'' notwithstanding Sec. 560.2(b)(5). In all other
circumstances, state restrictions on loan-related fees are
preempted, as provided in Sec. 560.2(b)(5).
---------------------------------------------------------------------------
Therefore, rather than perpetuate nonsubstantive differences in
syntax that could create confusion, OTS has decided to conform new
Sec. 560.110 to the OCC regulation. We do not believe this results in
any substantive change from former Sec. 571.22, except for adoption of
the ``materiality'' standard, discussed above. Conforming to the OCC
regulation is consistent with the commenters' view that the OCC's
syntax is clearer and more precise, and with the congressional command
to move toward greater banking agency uniformity.
Section 560.120 Letters of Credit and Other Independent Undertakings
To Pay Against Documents
This section is derived from current Sec. 545.48 and establishes
standards for letters of credit for all savings associations,
incorporating the modifications discussed under that section.
[[Page 50969]]
Section 560.121 Investments in State Housing Corporations
This section is derived from current Sec. 563.95, incorporating the
modifications described earlier under that section.
Section 560.160 Asset Classification
This section requires each savings association to have an internal
system to classify its assets and to establish appropriate valuations
or charge-offs, as appropriate. It replaces the more detailed
regulation found at current Sec. 563.160.
Section 560.170 Records for Lending Transactions
This section contains general loan documentation requirements based
on the interagency safety and soundness standards and guidelines found
at 12 CFR Part 570. It replaces the specific loan documentation
requirements previously found at Sec. 563.170(c) (1)-(10), and
incorporates the modifications described earlier under that section.
Section 560.172 Reevaluation of Real Estate Owned
This section has been transferred, without change, from
Sec. 563.172.
Subpart C--Alternative Mortgage Transactions
This subpart contains rules applicable to alternative mortgages
originated by federal and state savings associations and certain other
state lenders.
Section 560.210 Disclosures for Adjustable-Rate Mortgage Loans,
Adjustment Notices, and Interest-Rate Caps
This section has been transferred from Sec. 563.99. It has been
amended as discussed under that section and to remove a definition,
``fixed rate mortgage loan,'' that is no longer used in the regulation.
Section 560.220 Alternative Mortgage Parity Act
This section (originally proposed as Sec. 560.210) is derived from
current Sec. 545.33(f), ``Notice of housing creditors regarding
alternative mortgage transactions'' and applies to state savings
associations and certain other state-chartered lenders. OTS has
observed that state housing creditors interested in engaging in
alternative mortgage transactions could not easily locate
Sec. 545.33(f). Placing these provisions into a subpart specifically
dealing with alternative mortgages will make them more accessible. The
section has been streamlined and modified to remove cross-references to
repealed provisions and to clarify the scope of federal lending
regulations applicable to state housing creditors electing to originate
loans under the Parity Act. While the proposal indicated that all of
new Part 560 would be considered appropriate and applicable to the
exercise of the authority under the Parity Act, the final rule has been
revised to identify the appropriate sections with greater specificity.
One commenter suggested adding language to clarify that this section
does not limit the preemption of the imposition of state licensing
requirements on federal associations. Because of modifications made to
the final preemption regulation at Sec. 560.2, OTS believes that the
addition of this language is not necessary. States may not impose
lending license requirements on federal thrifts.
III. Disposition of Existing Lending and Investment Regulations
----------------------------------------------------------------------------------------------------------------
Original provision New provision Comment
----------------------------------------------------------------------------------------------------------------
Sec. 545.31 (a),(b).................. Secs. 560.31(a), 560.3........ Modified. Substance has been moved into
Sec. 560.31(a); definitions have been
moved into Sec. 560.3.
Sec. 545.31 (c),(d).................. Sec. 560.31 (b),(c)........... Modified.
Sec. 545.32(a)....................... Sec. 560.30................... Incorporated into lending and
investment powers chart.
Sec. 545.32(b) (1),(2)............... ............................... Removed.
Sec. 545.32(b) (3)-(6)............... ............................... Removed, included as areas in which
state law is preempted under Sec.
560.2.
Sec. 545.32(c)....................... Sec. 560.3.................... Substantially unchanged.
Sec. 545.32(d)....................... ............................... Removed.
Sec. 545.33 Introductory paragraph... Sec. 560.3.................... Substantially unchanged.
Sec. 545.33(a)....................... ............................... Removed, included as area in which
state law is preempted under Sec.
560.2.
Sec. 545.33(b)....................... ............................... Removed.
Sec. 545.33(c) (1)-(3)............... Sec. 560.35................... Modified.
Sec. 545.33(c) (4),(5)............... ............................... Removed.
Sec. 545.33 (d),(e).................. ............................... Removed.
Sec. 545.33(f)....................... Sec. 560.220.................. Modified.
Sec. 545.34(a)....................... Sec. 560.2.................... Modified and reorganized.
Sec. 545.34(b)....................... Sec. 560.33................... Modified.
Sec. 545.34(c)....................... Sec. 560.34................... Modified.
Sec. 545.35.......................... Sec. 560.30................... Incorporated into lending and
investment powers chart.
Sec. 545.36.......................... ............................... Removed. Paragraphs (c) and (d) to be
incorporated into guidance.
Sec. 545.37.......................... ............................... Removed.
Sec. 545.38 (a),(b).................. ............................... Removed.
Sec. 545.38(c)....................... Sec. 560.30................... Incorporated into lending and
investment powers chart.
Sec. 545.39(a)....................... Sec. 560.30................... Incorporated into lending and
investment powers chart.
Sec. 545.39(b)....................... Sec. 560.43................... Modified.
Sec. 545.40.......................... ............................... Removed.
Sec. 545.41.......................... Sec. 560.30................... Incorporated into lending and
investment powers chart.
Sec. 545.42.......................... Sec. 560.30................... Incorporated into lending and
investment powers chart.
Sec. 545.43.......................... Sec. 560.30................... Incorporated into lending and
investment powers chart.
Sec. 545.44.......................... ............................... Removed.
Sec. 545.45(a)....................... ............................... Removed.
Sec. 545.45(b)....................... Sec. 560.30................... Incorporated into lending and
investment powers chart.
Sec. 545.45 (c),(d).................. ............................... To be incorporated into guidance.
Sec. 545.45(e)....................... ............................... Removed.
Sec. 545.46(a)....................... Sec. 560.30................... Incorporated into lending and
investment powers chart.
Sec. 545.46(b) introductory paragraph Sec. 560.30................... Incorporated into lending and
and (b)(1). investment powers chart.
[[Page 50970]]
Sec. 545.46(b)(2).................... ............................... Removed.
Sec. 545.47.......................... Sec. 560.30................... Incorporated into lending and
investment powers chart.
Sec. 545.48(a)....................... Sec. 560.120.................. Significantly changed.
Sec. 545.48(b)....................... ............................... Removed.
Sec. 545.49.......................... Sec. 560.30................... Incorporated into lending and
investment powers chart.
Sec. 545.50(a)....................... Sec. 560.30................... Incorporated into lending and
investment powers chart.
Sec. 545.50(b)....................... Sec. 560.3.................... Substantially unchanged.
Sec. 545.50(c)....................... Sec. 560.30................... Incorporated into lending and
investment powers chart.
Sec. 545.51(a)....................... Sec. 560.30................... Incorporated into lending and
investment powers chart.
Sec. 545.51(b)....................... ............................... Removed.
Sec. 545.52.......................... Sec. 560.30................... Incorporated into lending and
investment powers chart.
Sec. 545.53(a)....................... Sec. 560.30................... Incorporated into lending and
investment powers chart.
Sec. 545.53 (b)-(d).................. Sec. 560.41................... Significantly changed.
Sec. 545.72 Introductory paragraph... Sec. 560.30................... Incorporated into lending and
investment powers chart.
Sec. 545.72 (a),(b).................. Sec. 560.42................... Significantly changed.
Sec. 545.72(c)....................... ............................... Removed.
Sec. 545.73 Introductory paragraph... Sec. 560.30................... Incorporated into lending and
investment powers chart.
Sec. 545.73 (a),(b).................. Sec. 560.43.
FR Doc. 96-23726 Lending and Investment
.................. Modified.
Sec. 545.74 (c)(1)(vi)............... ............................... Modified.
Sec. 545.75(a)....................... Sec. 560.30................... Incorporated into lending and
investment powers chart.
Sec. 545.75 (b),(c).................. Sec. 560.40................... Modified.
Sec. 545.75(d)....................... ............................... Removed.
Sec. 545.78.......................... Sec. 560.30. See also Sec. Significantly changed and incorporated
560.41.. into lending and investment powers
chart.
Sec. 556.2........................... ............................... Removed.
Sec. 556.3........................... ............................... To be incorporated into guidance.
Sec. 556.10.......................... ............................... To be incorporated into guidance.
Sec. 563.93.......................... Sec. 560.93................... Redesignated with no changes.
Sec. 563.95.......................... Sec. 560.121.................. Significantly changed.
Sec. 563.97.......................... ............................... Removed.
Sec. 563.99.......................... Sec. 560.210.................. Redesignated and modified by removing
paragraph (a)(2) and adding new
paragraph (g).
Sec. 563.100......................... Sec. 560.100.................. Redesignated without change.
Sec. 563.101......................... Sec. 560.101.................. Redesignated without change.
Sec. 563.160......................... Sec. 560.160.................. Significantly changed.
Sec. 563.170 (a),(b)................. ............................... Unchanged.
Sec. 563.170(c) introductory text.... ............................... Modified.
Sec. 563.170 (c)(1)-(10)............. Sec. 560.170.................. Significantly changed.
Sec. 563.170 (d),(e)................. ............................... Unchanged.
Sec. 563.172......................... Sec. 560.172.................. Unchanged.
Sec. 571.8........................... ............................... Removed.
Sec. 571.13.......................... ............................... To be incorporated into guidance.
Sec. 571.20.......................... ............................... To be incorporated into guidance.
Sec. 571.22.......................... Sec. 560.110.................. Significantly changed.
----------------------------------------------------------------------------------------------------------------
IV. Administrative Procedure Act
This final rule results from the notice of proposed rulemaking OTS
published on January 17, 1996. In addition to the regulatory language
proposed in that notice, OTS is today redesignating, without
substantive change, other lending-related regulations previously
located in Part 563 into new Part 560. Pursuant to section 553(b) of
the Administrative Procedure Act, OTS hereby finds that good cause
exists not to publish those provisions for public notice and comment.
They are merely being renumbered and grouped with other lending-related
regulations for the convenience of users, thus public notice and
opportunity to comment are unnecessary.
V. Paperwork Reduction Act of 1995
Respondents/recordkeepers are not required to respond to this
collection of information unless it displays a currently valid OMB
control number.
The recordkeeping requirements contained in 12 CFR 560.170 and
563.170 of this final rule have been submitted to and approved by the
Office of Management and Budget under OMB Control No. 1550-0078 in
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3507(d)).
In response to comments received, OTS has decided to adopt 12 CFR
560.35, which was not part of the proposal. The reporting requirements
contained in this section have been submitted to the Office of
Management and Budget for review.
Comments on all aspects of these information collections should be
sent to the Office of Management and Budget, Paperwork Reduction
Project (1550), Washington, DC 20503 with copies to OTS, 1700 G Street,
NW., Washington, DC 20552.
The recordkeeping requirements in this final rule are found in 12
CFR 560.35, 560.170, and 563.170. The reporting and recordkeeping
requirements set forth in this final rule are needed by OTS in order to
supervise savings associations and develop regulatory policy. The
likely recordkeepers are OTS-regulated savings associations. Start-up
costs to respondents: None.
Records are to be maintained for the period of time respondent/
recordkeeper owns the loan plus three years.
The burden estimates for new Sec. 560.35 are as follows:
Estimated number of respondents: 120.
Estimated average annual burden hours per respondent: 1.
Estimated number of hours per response: 20 hours.
[[Page 50971]]
Estimated number of total annual burden hours: 2,400 hours.
Start-up costs to respondents: None.
VI. Executive Order 12866
The Director of OTS has determined that this final rule does not
constitute a ``significant regulatory action'' for the purposes of
Executive Order 12866.
VII. Regulatory Flexibility Act Analysis
Pursuant to section 605(b) of the Regulatory Flexibility Act, OTS
certifies that this final rule will not have a significant economic
impact on a substantial number of small entities. The final rule does
not impose any additional burdens or requirements upon small entities
and reduces burdens on all savings associations. The regulations have
been reorganized to group all lending regulations together in a single
part, which will make the regulations easier to locate and use. A chart
setting forth the lending and investment powers of savings
associations, with accompanying statutory citations, will make it
easier for small savings associations to determine the scope of their
lending authority. Loan documentation requirements have been
streamlined and should result in less paperwork for small associations
holding low-dollar amount, non-complex, loans in their portfolios.
VIII. Unfunded Mandates Act of 1995
OTS has determined that the requirements of this final rule will
not result in expenditures by State, local, and tribal governments, or
by the private sector, of more than $100 million in any one year.
Accordingly, a budgetary impact statement is not required under section
202 of the Unfunded Mandates Act of 1995.
IX. Effective Date
Section 302 of CDRIA delays the effective date of regulations
promulgated by the Federal banking agencies that impose additional
reporting, disclosure, or new requirements to the first day of the
first calendar quarter following publication of the final rule. OTS
believes that CDRIA does not apply to this final rule because it
imposes no new burden. It reduces regulatory burden in the lending and
investment areas and provides added flexibility.
List of Subjects
12 CFR Part 545
Accounting, Consumer protection, Credit, Electronic funds
transfers, Investments, Reporting and recordkeeping requirements,
Savings associations.
12 CFR Part 556
Savings associations.
12 CFR Part 560
Consumer protection, Investments, Manufactured homes, Mortgages,
Reporting and recordkeeping requirements, Savings associations,
Securities.
12 CFR Part 563
Accounting, Advertising, Crime, Currency, Investments, Reporting
and recordkeeping requirements, Savings associations, Securities,
Surety bonds.
12 CFR Part 566
Liquidity, Reporting and recordkeeping requirements, Savings
associations.
12 CFR Part 571
Accounting, Conflicts of interest, Investments, Reporting and
recordkeeping requirements, Savings associations.
12 CFR Part 590
Banks, banking, Loan programs--housing and community development,
Manufactured homes, Mortgages, Savings associations.
Accordingly, and under the authority of 12 U.S.C. 1462a, the Office
of Thrift Supervision amends chapter V, title 12, Code of Federal
Regulations, as set forth below.
PART 545--OPERATIONS
1. The authority citation for part 545 continues to read as
follows:
Authority: 12 U.S.C. 1462a, 1463, 1464, 1828.
Secs. 545.31-545.43, 545.45-545.53 [Removed]
2. Sections 545.31 through 545.43 and 545.45 through 545.53 are
removed.
Secs. 545.72-545.73 [Removed]
3. Sections 545.72 and 545.73 are removed.
Sec. 545.74 [Amended]
4. Section 545.74 is amended by revising paragraph (c)(1)(vi) to
read as follows:
Sec. 545.74 Service corporations.
* * * * *
(c) * * *
(1) * * *
(vi) Commercial loans and participations therein.
* * * * *
Sec. 545.75 [Removed]
5. Section 545.75 is removed.
Sec. 545.78 [Removed]
6. Section 545.78 is removed.
PART 556--STATEMENTS OF POLICY
7. The authority citation for part 556 continues to read as
follows:
Authority: 5 U.S.C. 552, 559; 12 U.S.C. 1464, 1701j-3; 15 U.S.C.
1693-1693r.
Secs. 556.2, 556.3, 556.10 [Removed]
8. Sections 556.2, 556.3, and 556.10 are removed.
9. Part 560 is added to read as follows:
PART 560--LENDING AND INVESTMENT
Sec.
560.1 General.
560.2 Applicability of law.
560.3 Definitions.
Subpart A--Lending and Investment Powers for Federal Savings
Associations
560.30 General lending and investment powers.
560.31 Election regarding categorization of loans or investments
and related calculations.
560.33 Late charges.
560.34 Prepayments.
560.35 Adjustments to home loans.
560.40 Commercial paper and corporate debt securities.
560.41 Leasing.
560.42 State and local government obligations.
560.43 Foreign assistance investments.
Subpart B--Lending and Investment Provisions Applicable to all Savings
Associations
560.93 Lending limitations.
560.100 Real estate lending standards; purpose and scope.
560.101 Real estate lending standards.
560.110 Most favored lender usury preemption.
560.120 Letters of credit and other independent undertakings to pay
against documents.
560.121 Investment in state housing corporations.
560.160 Asset classification.
560.170 Records for lending transactions.
560.172 Re-evaluation of real estate owned.
Subpart C--Alternative Mortgage Transactions
560.210 Disclosures for adjustable-rate mortgage loans, adjustment
notices, and interest-rate caps.
560.220 Alternative Mortgage Parity Act.
Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1701j-3, 1828,
3803, 3806; 42 U.S.C. 4106.
Sec. 560.1 General.
(a) Authority and scope. This part is being issued by OTS under its
general rulemaking and supervisory authority
[[Page 50972]]
under the Home Owners' Loan Act (HOLA), 12 U.S.C. 1462 et seq. Subpart
A of this part sets forth the lending and investment powers of Federal
savings associations. Subpart B of this part contains safety-and-
soundness based lending and investment provisions applicable to all
savings associations. Subpart C of this part addresses alternative
mortgages and applies to all savings associations.
(b) General lending standards. Each savings association is expected
to conduct its lending and investment activities prudently. Each
association should use lending and investment standards that are
consistent with safety and soundness, ensure adequate portfolio
diversification and are appropriate for the size and condition of the
institution, the nature and scope of its operations, and conditions in
its lending market. Each association should adequately monitor the
condition of its portfolio and the adequacy of any collateral securing
its loans.
Sec. 560.2 Applicability of law.
(a) Occupation of field. Pursuant to sections 4(a) and 5(a) of the
HOLA, 12 U.S.C. 1463(a), 1464(a), OTS is authorized to promulgate
regulations that preempt state laws affecting the operations of federal
savings associations when deemed appropriate to facilitate the safe and
sound operation of federal savings associations, to enable federal
savings associations to conduct their operations in accordance with the
best practices of thrift institutions in the United States, or to
further other purposes of the HOLA. To enhance safety and soundness and
to enable federal savings associations to conduct their operations in
accordance with best practices (by efficiently delivering low-cost
credit to the public free from undue regulatory duplication and
burden), OTS hereby occupies the entire field of lending regulation for
federal savings associations. OTS intends to give federal savings
associations maximum flexibility to exercise their lending powers in
accordance with a uniform federal scheme of regulation. Accordingly,
federal savings associations may extend credit as authorized under
federal law, including this part, without regard to state laws
purporting to regulate or otherwise affect their credit activities,
except to the extent provided in paragraph (c) of this section or
Sec. 560.110 of this part. For purposes of this section, ``state law''
includes any state statute, regulation, ruling, order or judicial
decision.
(b) Illustrative examples. Except as provided in Sec. 560.110 of
this part, the types of state laws preempted by paragraph (a) of this
section include, without limitation, state laws purporting to impose
requirements regarding:
(1) Licensing, registration, filings, or reports by creditors;
(2) The ability of a creditor to require or obtain private mortgage
insurance, insurance for other collateral, or other credit
enhancements;
(3) Loan-to-value ratios;
(4) The terms of credit, including amortization of loans and the
deferral and capitalization of interest and adjustments to the interest
rate, balance, payments due, or term to maturity of the loan, including
the circumstances under which a loan may be called due and payable upon
the passage of time or a specified event external to the loan;
(5) Loan-related fees, including without limitation, initial
charges, late charges, prepayment penalties, servicing fees, and
overlimit fees;
(6) Escrow accounts, impound accounts, and similar accounts;
(7) Security property, including leaseholds;
(8) Access to and use of credit reports;
(9) Disclosure and advertising, including laws requiring specific
statements, information, or other content to be included in credit
application forms, credit solicitations, billing statements, credit
contracts, or other credit-related documents and laws requiring
creditors to supply copies of credit reports to borrowers or
applicants;
(10) Processing, origination, servicing, sale or purchase of, or
investment or participation in, mortgages;
(11) Disbursements and repayments;
(12) Usury and interest rate ceilings to the extent provided in 12
U.S.C. 1735f-7a and part 590 of this chapter and 12 U.S.C. 1463(g) and
Sec. 560.110 of this part; and
(13) Due-on-sale clauses to the extent provided in 12 U.S.C. 1701j-
3 and part 591 of this chapter.
(c) State laws that are not preempted. State laws of the following
types are not preempted to the extent that they only incidentally
affect the lending operations of Federal savings associations or are
otherwise consistent with the purposes of paragraph (a) of this
section:
(1) Contract and commercial law;
(2) Real property law;
(3) Homestead laws specified in 12 U.S.C. 1462a(f);
(4) Tort law;
(5) Criminal law; and
(6) Any other law that OTS, upon review, finds:
(i) Furthers a vital state interest; and
(ii) Either has only an incidental effect on lending operations or
is not otherwise contrary to the purposes expressed in paragraph (a) of
this section.
Sec. 560.3 Definitions.
For purposes of this part:
Consumer loans include loans for personal, family, or household
purposes and loans reasonably incident thereto, and may be made as
either open-end or closed-end consumer credit, but do not include
credit extended in connection with credit cards nor bona fide overdraft
loans.
Home loans include any loans made on the security of homes
(including a unit of a condominium or cooperative), combinations of
homes and business property, farm residences, and combinations of farm
residences and commercial farm real estate.
Loan commitment includes a loan in process, a letter of credit, or
any other commitment to extend credit.
Real estate loan includes any loan for which a Federal savings
association relies substantially upon the real estate as the primary
security for the loan. A loan is made on the security of real estate
if:
(1) The security property is real estate pursuant to the law of the
state in which the property is located;
(2) The security interest of the Federal savings association may be
enforced as a real estate mortgage or its equivalent pursuant to the
law of the state in which the property is located;
(3) The security property is capable of separate appraisal; and
(4) With regard to a security property that is a leasehold or other
interest for a period of years, the term of the interest extends, or is
subject to extension or renewal at the option of the Federal savings
association for a term of at least five years following the maturity of
the loan.
Subpart A--Lending and Investment Powers for Federal Savings
Associations
Sec. 560.30 General lending and investment powers.
Pursuant to section 5(c) of the HOLA, 12 U.S.C. 1464(c), a Federal
savings association may make, invest in, purchase, sell, participate
in, or otherwise deal in (including brokerage or warehousing) all loans
and investments allowed under section 5(c) of the HOLA including the
following loans, extensions of credit, and investments, subject to the
limitations indicated and any such clarifying terms, conditions, or
case-by-case limitations
[[Page 50973]]
as may be prescribed from time to time by the Office by opinion, policy
directive, order, or regulation:
Lending and Investment Powers Chart
------------------------------------------------------------------------
Statutory Investment
Limitations (notes
Category HOLA contain applicable
authorization regulatory
limitations)
------------------------------------------------------------------------
Bankers' bank stock........... 5(c)(4)(E) Same terms as
applicable to
national banks.
Business development credit 5(c)(4)(A) The lesser of .5% of
corporations. total outstanding
loans or $250,000.
Commercial loans.............. 5(c)(2)(A) 10% of total assets.
Commercial paper and corporate 5(c)(2)(D) Up to 30% of total
debt securities. assets.\1\ \2\
Community development loans 5(c)(3)(B) 5% of total assets,
and equity investments. provided equity
investments do not
exceed 2% of total
assets.\3\
Construction loans without 5(c)(3)(D) In the aggregate, the
security. greater of total
capital or 5% of
total assets.
Consumer loans................ 5(c)(2)(D) Up to 35% of total
assets.\1\ \4\
Credit cards.................. 5(b)(4) None.\5\
Deposits in insured depository 5(c)(1)(G) None.\5\
institutions.
Education loans............... 5(c)(3)(A) 5% of total assets.
Federal government and 5(c)(1)(C) None.\5\
government-sponsored 5(c)(1)(D)
enterprise securities and 5(c)(1)(E)
instruments. 5(c)(1)(F)
Finance leasing............... 5(c)(1)(B) Based on purpose and
5(c)(2)(A) property
5(c)(2)(B) financed.\6\
5(c)(2)(D)
Foreign assistance investments 5(c)(4)(C) 1% of total
assets.\7\
General leasing............... 5(c)(2)(C) 10% of assets.\6\
Home improvement loans........ 5(c)(1)(J) None.\5\
Home (residential) loans \8\.. 5(c)(1)(B) None.\5\ \9\
HUD-insured or guaranteed 5(c)(1)(O) None.\5\
investments.
Insured loans................. 5(c)(1)(I) None.\5\
5(c)(1)(K)
Liquidity investments......... 5(c)(1)(M) None.\5\
Loans secured by deposit 5(c)(1)(A) None.\5\ \10\
accounts.
Loans to financial 5(c)(1)(L) None.\5\ \11\
institutions, brokers, and
dealers.
Manufactured home loans....... 5(c)(1)(J) None.\5\ \12\
Mortgage-backed securities.... 5(c)(1)(R) None.\5\
National Housing Partnership 5(c)(1)(N) None.\5\
Corporation and related
partnerships and joint
ventures.
Nonconforming loans........... 5(c)(3)(C) 5% of total assets.
Nonresidential real property 5(c)(2)(B) 400% of total
loans. capital.\13\
Small-business-related 5(c)(1)(S) None.\5\
securities.
State and local government 5(c)(1)(H) None.\5\ \14\
obligations.
State housing corporations.... 5(c)(1)(P) None.\5\ \15\
Transaction account loans, 5(c)(1)(A) None.\5\ \16\
including overdrafts.
------------------------------------------------------------------------
Notes:
\1\ For purposes of determining a Federal savings association's
percentage of assets limitation, investment in commercial paper and
corporate debt securities must be aggregated with the Federal savings
association's investment in consumer loans.
\2\ A Federal savings association may invest in commercial paper and
corporate debt securities, which includes corporate debt securities
convertible into stock, subject to the provisions of Sec. 560.40 of
this part.
\3\ The 2% of assets limitation is a sublimit for investments within the
overall 5% of assets limitation on community development loans and
investments. The qualitative standards for such loans and investments
are set forth in HOLA section 5(c)(3)(B), as explained in an opinion
of the OTS Chief Counsel dated May 10, 1995 (available upon request at
the address set forth in Sec. 516.1(a) of this chapter).
\4\ Amounts in excess of 30% of assets, in aggregate, may be invested
only in loans made by the association directly to the original obligor
and for which no finder's or referral fees have been paid. A Federal
savings association may include loans to dealers in consumer goods to
finance inventory and floor planning in the total investment made
under this section.
\5\ While there is no statutory limit on certain categories of loans and
investments, including credit card loans, home improvement loans, and
deposit account loans, OTS may establish an individual limit on such
loans or investments if the association's concentration in such loans
or investments presents a safety and soundness concern.
\6\ A Federal savings association may engage in leasing activities
subject to the provisions of Sec. 560.41 of this part.
\7\ This 1% of assets limitation applies to the aggregate outstanding
investments made under the Foreign Assistance Act and in the capital
of the Inter-American Savings and Loan Bank. Such investments may be
made subject to the provisions of Sec. 560.43 of this part.
\8\ A home (or residential) loan includes loans secured by one-to-four
family dwellings, multi-family residential property and loans secured
by a unit or units of a condominium or housing cooperative.
\9\ A Federal savings association may make home loans subject to the
provisions of Secs. 560.33, 560.34 and 560.35 of this part.
\10\ Loans secured by savings accounts and other time deposits may be
made without limitation, provided the Federal savings association
obtains a lien on, or a pledge of, such accounts. Such loans may not
exceed the withdrawable amount of the account.
\11\ A Federal savings association may only invest in these loans if
they are secured by obligations of, or by obligations fully guaranteed
as to principal and interest by, the United States or any of its
agencies or instrumentalities, the borrower is a financial institution
insured by the Federal Deposit Insurance Corporation or is a broker or
dealer registered with the Securities and Exchange Commission, and the
market value of the securities for each loan at least equals the
amount of the loan at the time it is made.
\12\ If the wheels and axles of the manufactured home have been removed
and it is permanently affixed to a foundation, a loan secured by a
combination of a manufactured home and developed residential lot on
which it sits may be treated as a home loan.
[[Page 50974]]
\13\ Without regard to any limitations of this part, a Federal savings
association may make or invest in the fully insured or guaranteed
portion of nonresidential real estate loans insured or guaranteed by
the Economic Development Administration, the Farmers Home
Administration, or the Small Business Administration. Unguaranteed
portions of guaranteed loans must be aggregated with uninsured loans
when determining an association's compliance with the 400% of capital
limitation for other real estate loans.
\14\ This category includes obligations issued by any state, territory,
or possession of the United States or political subdivision thereof
(including any agency, corporation, or instrumentality of a state or
political subdivision), subject to Sec. 560.42 of this part.
\15\ A Federal savings association may invest in state housing
corporations subject to the provisions of Sec. 560.121 of this part.
\16\ Payments on accounts in excess of the account balance (overdrafts)
on commercial deposit or transaction accounts shall be considered
commercial loans for purposes of determining the association's
percentage of assets limitation.
Sec. 560.31 Election regarding categorization of loans or investments
and related calculations.
(a) If a loan or other investment is authorized under more than one
section of the HOLA, as amended, or this part, a Federal savings
association may designate under which section the loan or investment
has been made. Such a loan or investment may be apportioned among
appropriate categories, and may be moved, in whole or part, from one
category to another. A loan commitment shall be counted as an
investment and included in total assets of a Federal savings
association for purposes of calculating compliance with HOLA section
5(c)'s investment limitations only to the extent that funds have been
advanced and not repaid pursuant to the commitment.
(b) Loans or portions of loans sold to a third party shall be
included in the calculation of a percentage-of-assets or percentage-of-
capital investment limitation only to the extent they are sold with
recourse.
(c) A Federal savings association may make a loan secured by an
assignment of loans to the extent that it could, under applicable law
and regulations, make or purchase the underlying assigned loans.
Sec. 560.33 Late charges.
A Federal savings association may include in a home loan contract a
provision authorizing the imposition of a late charge with respect to
the payment of any delinquent periodic payment. With respect to any
loan made after July 31, 1976, on the security of a home occupied or to
be occupied by the borrower, no late charge, regardless of form, shall
be assessed or collected by a Federal savings association, unless any
billing, coupon, or notice the Federal savings association may provide
regarding installment payments due on the loan discloses the date after
which the charge may be assessed. A Federal savings association may not
impose a late charge more than one time for late payment of the same
installment, and any installment payment made by the borrower shall be
applied to the longest outstanding installment due. A Federal savings
association shall not assess a late charge as to any payment received
by it within fifteen days after the due date of such payment. No form
of such late charge permitted by this paragraph shall be considered as
interest to the Federal savings association and the Federal savings
association shall not deduct late charges from the regular periodic
installment payments on the loan, but must collect them as such from
the borrower.
Sec. 560.34 Prepayments.
Any prepayment on a real estate loan must be applied directly to
reduce the principal balance on the loan unless the loan contract or
the borrower specifies otherwise. Subject to the terms of the loan
contract, a Federal savings association may impose a fee for any
prepayment of a loan.
Sec. 560.35 Adjustments to home loans.
(a) For any home loan secured by borrower-occupied property, or
property to be occupied by the borrower, adjustments to the interest
rate, payment, balance, or term to maturity must comply with the
limitations of this section and the disclosure and notice requirements
of Sec. 560.210 of this part.
(b) Adjustments to the interest rate shall correspond directly to
the movement of an index satisfying the requirements of paragraph (d)
of this section. A Federal savings association also may increase the
interest rate pursuant to a formula or schedule that specifies the
amount of the increase, the time at which it may be made, and which is
set forth in the loan contract. A Federal savings association may
decrease the interest rate at any time.
(c) Adjustments to the payment and the loan balance that do not
reflect an interest-rate adjustment may be made if:
(1) The adjustments reflect a change in an index that may be used
pursuant to paragraph (d) of this section;
(2) In the case of a payment adjustment, the adjustment reflects a
change in the loan balance or is made pursuant to a formula, or to a
schedule specifying the percentage or dollar change in the payment as
set forth in the loan contract; or
(3) In the case of an open-end line-of-credit loan, the adjustment
reflects an advance taken by the borrower under the line-of-credit and
is permitted by the loan contract.
(d)(1) Any index used must be readily available and independently
verifiable. If set forth in the loan contract, an association may use
any combination of indices, a moving average of index values, or more
than one index during the term of a loan.
(2) Except as provided in paragraph (d)(3) of this section, any
index used must be a national or regional index.
(3) A Federal savings association may use an index not satisfying
the requirements of paragraph (d)(2) of this section 30 days after
filing a notice in accordance with Sec. 516.1(c) of this chapter
unless, within that 30-day period, OTS has notified the association
that the notice presents supervisory concerns or raises significant
issues of law or policy. If OTS does notify the association of such
concerns or issues, the Federal savings association may not use such an
index unless and until it applies for and receives OTS's prior written
approval in accordance with Sec. 516.1(c) of this chapter.
Sec. 560.40 Commercial paper and corporate debt securities.
Pursuant to HOLA section 5(c)(2)(D), a Federal savings association
may invest in, sell, or hold commercial paper and corporate debt
securities subject to the provisions of this section.
(a) Limitations. (1) Commercial paper must be:
(i) As of the date of purchase, rated in either one of the two
highest categories by at least two nationally recognized investment
ratings services as shown by the most recently published rating made of
such investments; or
(ii) If unrated, guaranteed by a company having outstanding paper
that is rated as provided in paragraph (a)(1)(i) of this section.
(2) Corporate debt securities must be:
(i) Securities that may be sold with reasonable promptness at a
price that corresponds reasonably to their fair value; and
(ii) Rated in one of the four highest categories by a nationally
recognized investment ratings service at its most recently published
rating before the date of purchase of the security.
(3) A Federal savings association's total investment in the
commercial paper and corporate debt securities of any one issuer, or
issued by any one
[[Page 50975]]
person or entity affiliated with such issuer, together with other
loans, shall not exceed the general lending limitations contained in
Sec. 560.93(c) of this part.
(4) Investments in corporate debt securities convertible into stock
are subject to the following additional limitations:
(i) The purchase of securities convertible into stock at the option
of the issuer is prohibited;
(ii) At the time of purchase, the cost of such securities must be
written down to an amount that represents the investment value of the
securities considered independently of the conversion feature; and
(iii) Federal savings associations are prohibited from exercising
the conversion feature.
(5) A Federal savings association shall maintain information in its
files adequate to demonstrate that it has exercised prudent judgment in
making investments under this section.
(b) Notwithstanding the limitations contained in this section, the
Office may permit investment in corporate debt securities of another
savings association in connection with the purchase or sale of a branch
office or in connection with a supervisory merger or acquisition.
Sec. 560.41 Leasing.
(a) Permissible activities. Subject to the limitations of this
section, a Federal savings association may engage in leasing
activities. These activities include becoming the legal or beneficial
owner of tangible personal property or real property for the purpose of
leasing such property, obtaining an assignment of a lessor's interest
in a lease of such property, and incurring obligations incidental to
its position as the legal or beneficial owner and lessor of the leased
property.
(b) Definitions. For the purposes of this section:
(1) The term net lease means a lease under which the Federal
savings association will not, directly or indirectly, provide or be
obligated to provide for:
(i) The servicing, repair or maintenance of the leased property
during the lease term;
(ii) The purchasing of parts and accessories for the leased
property, except that improvements and additions to the leased property
may be leased to the lessee upon its request in accordance with the
full-payout requirements of paragraph (c)(2)(i) of this section;
(iii) The loan of replacement or substitute property while the
leased property is being serviced;
(iv) The purchasing of insurance for the lessee, except where the
lessee has failed to discharge a contractual obligation to purchase or
maintain insurance; or
(v) The renewal of any license, registration, or filing for the
property unless such action by the Federal savings association is
necessary to protect its interest as an owner or financier of the
property.
(2) The term full-payout lease means a lease transaction in which
any unguaranteed portion of the estimated residual value relied on by
the association to yield the return of its full investment in the
leased property, plus the estimated cost of financing the property over
the term of the lease, does not exceed 25% of the original cost of the
property to the lessor. In general, a lease will qualify as a full-
payout lease if the scheduled payments provide at least 75% of the
principal and interest payments that a lessor would receive if the
finance lease were structured as a market-rate loan.
(3) The term realization of investment means that a Federal savings
association that enters into a lease financing transaction must
reasonably expect to realize the return of its full investment in the
leased property, plus the estimated cost of financing the property over
the term of the lease from:
(i) Rentals;
(ii) Estimated tax benefits, if any; and
(iii) The estimated residual value of the property at the
expiration of the term of the lease.
(c) Finance leasing--(1) Investment limits. A Federal savings
association may exercise its authority under HOLA sections 5(c)(1)(B)
(residential real estate loans), 5(c)(2)(A) (commercial, business,
corporate or agricultural loans), 5(c)(2)(B) (nonresidential real
estate loans), and 5(c)(2)(D) (consumer loans) by conducting leasing
activities that are the functional equivalent of loans made under those
HOLA sections. These activities are commonly referred to as financing
leases. Such financing leases are subject to the same investment limits
that apply to loans made under those sections. For example, a financing
lease of tangible personal property made to a natural person for
personal, family or household purposes is subject to all limitations
applicable to the amount of a Federal savings association's investment
in consumer loans. A financing lease made for commercial, corporate,
business, or agricultural purposes is subject to all limitations
applicable to the amount of a Federal savings association's investment
in commercial loans. A financing lease of residential or nonresidential
real property is subject to all limitations applicable to the amount of
a Federal savings association's investment in these types of real
estate loans.
(2) Functional equivalent of lending. To qualify as the functional
equivalent of a loan:
(i) The lease must be a net, full-payout lease representing a non-
cancelable obligation of the lessee, notwithstanding the possible early
termination of the lease;
(ii) The portion of the estimated residual value of the property
relied upon by the lessor to satisfy the requirements of a full-payout
lease must be reasonable in light of the nature of the leased property
and all relevant circumstances so that realization of the lessor's full
investment plus the cost of financing the property depends primarily on
the creditworthiness of the lessee, and not on the residual market
value of the leased property; and
(iii) At the termination of a financing lease, either by expiration
or default, property acquired must be liquidated or released on a net
basis as soon as practicable. Any property held in anticipation of re-
leasing must be reevaluated and recorded at the lower of fair market
value or book value.
(d) General leasing. Pursuant to section 5(c)(2)(C) of the HOLA, a
Federal savings association may invest in tangible personal property,
including vehicles, manufactured homes, machinery, equipment, or
furniture, for the purpose of leasing that property. In contrast to
financing leases, lease investments made under this authority need not
be the functional equivalent of loans.
(e) Leasing salvage powers. If, in good faith, a Federal savings
association believes that there has been an unanticipated change in
conditions that threatens its financial position by significantly
increasing its exposure to loss, it may:
(1) As the owner and lessor, take reasonable and appropriate action
to salvage or protect the value of the property or its interest arising
under the lease;
(2) As the assignee of a lessor's interest in a lease, become the
owner and lessor of the leased property pursuant to its contractual
right, or take any reasonable and appropriate action to salvage or
protect the value of the property or its interest arising under the
lease; or
(3) Include any provisions in a lease, or make any additional
agreements, to protect its financial position or investment in the
circumstances set forth in paragraphs (e)(1) and (e)(2) of this
section.
[[Page 50976]]
Sec. 560.42 State and local government obligations.
Pursuant to HOLA section 5(c)(1)(H), a Federal savings association
may invest in obligations issued by any state, territory, possession,
or political subdivision thereof, subject to the following conditions:
(a) A Federal savings association may not invest more than 10% of
its total capital in obligations of any one issuer, exclusive of
general obligations of the issuer.
(b) Except as provided in paragraph (c) of this section, the
obligations must:
(1) Continue to hold one of the four highest national investment
grade ratings; or
(2) Must be issued by a public housing agency and backed by the
full faith and credit of the United States.
(c) Notwithstanding the limitations in paragraph (b) of this
section, a Federal savings association may invest:
(1) In the aggregate, up to one percent of its assets in the
obligations of a state, territory, possession, or political subdivision
in which the association's home office or a branch office is located;
or
(2) In any obligations approved by the Office.
Sec. 560.43 Foreign assistance investments.
Pursuant to HOLA section 5(c)(4)(C), a Federal savings association
may make foreign assistance investments in an aggregate amount not to
exceed one percent of its assets, subject to the following conditions:
(a) For any investment made under the Foreign Assistance Act, the
loan agreement shall specify what constitutes an event of default, and
provide that upon default in payment of principal or interest under
such agreement, the entire amount of outstanding indebtedness
thereunder shall become immediately due and payable, at the lender's
option. Additionally, the contract of guarantee shall cover 100% of any
loss of investment thereunder, except for any portion of the loan
arising out of fraud or misrepresentation for which the party seeking
payment is responsible, and provide that the guarantor shall pay for
any such loss in U.S. dollars within a specified reasonable time after
the date of application for payment.
(b) To make any investments in the share capital and capital
reserve of the Inter-American Savings and Loan Bank, a Federal savings
association must be adequately capitalized and have adequate allowances
for loan and lease losses. The Federal savings association's aggregate
investment in such capital or capital reserve, including the amount of
any obligations undertaken to provide said Bank with reserve capital in
the future (call-able capital), must not, as a result of such
investment, exceed the lesser of one-quarter of 1% of its assets or
$100,000.
Subpart B--Lending and Investment Provisions Applicable to all
Savings Associations
Sec. 560.93 Lending limitations.
(a) Scope. This section applies to all loans and extensions of
credit made by a savings association and its subsidiaries. This section
does not apply to loans made by a savings association to its
subsidiaries or to its affiliates. The terms subsidiary and affiliate
have the same meanings as those terms are defined in Sec. 563.41 of
this chapter.
(b) Definitions. In applying these lending limitations, savings
associations shall apply the definitions and interpretations
promulgated by the Office of the Comptroller of the Currency consistent
with 12 U.S.C. 84. See 12 CFR part 32. In applying these definitions,
pursuant to 12 U.S.C. 1464, savings associations shall use the terms
savings association, savings associations, and savings association's in
place of the terms national bank and bank, banks, and bank's,
respectively. For purposes of this section:
(1) The term one borrower has the same meaning as the term person
set forth at 12 CFR part 32. It also includes, in addition to the
definition cited therein, a financial institution as defined at
Sec. 561.19 of this chapter.
(2) The term company means a corporation, partnership, business
trust, association, or similar organization and, unless specifically
excluded, the term company includes a savings association and a bank.
(3) Contractual commitment to advance funds has the meaning set
forth in 12 CFR part 32.
(4) Loans and extensions of credit has the meaning set forth in 12
CFR part 32, and includes investments in commercial paper and corporate
debt securities. The Office expressly reserves its authority to deem
other arrangements that are, in substance, loans and extensions of
credit to be encompassed by this term.
(5) The term loans as used in the phrase Loans to one borrower to
finance the sale of real property acquired in satisfaction of debts
previously contracted for in good faith does not include an
association's taking of a purchase money mortgage note from the
purchaser provided that:
(i) No new funds are advanced by the association to the borrower;
and
(ii) The association is not placed in a more detrimental position
as a result of the sale.
(6) The term fully phased-in capital standards means the capital
standards that will be in effect at the expiration of all statutory and
regulatory phase-in requirements set forth in 12 U.S.C. 1464(t) and
Secs. 567.2, 567.5, and 567.9 of this chapter.
(7) Readily marketable collateral has the meaning set forth in 12
CFR part 32.
(8) Residential housing units has the same meaning as the term
residential real estate set forth in Sec. 541.23 of this chapter. The
term to develop includes the various phases necessary to produce
housing units as an end product, to include: acquisition, development
and construction; development and construction; construction;
rehabilitation; or conversion. The term domestic includes units within
the fifty states, the District of Columbia, Puerto Rico, the Virgin
Islands, Guam, and the Pacific Islands.
(9) Single family dwelling unit has the meaning set forth in
Sec. 541.20 of this chapter.
(10) A standby letter of credit has the meaning set forth in 12 CFR
part 32.
(11) Unimpaired capital and unimpaired surplus means--
(i) A savings association's core capital and supplementary capital
included in its total capital under part 567 of this chapter; plus
(ii) The balance of a savings association's allowance for loan and
lease losses not included in supplementary capital under part 567 of
this chapter; plus
(iii) The amount of a savings association's loans to, investments
in, and advances to subsidiaries not included in calculating core
capital under part 567 of this chapter.
(c) General limitation. Section 5200 of the Revised Statutes (12
U.S.C. 84) shall apply to savings associations in the same manner and
to the same extent as it applies to national banks. This statutory
provision and lending limit regulations and interpretations promulgated
by the Office of the Comptroller of the Currency pursuant to a
rulemaking conducted in accordance with the provisions of the
Administrative Procedure Act, 5 U.S.C. 553 et seq. (including the
regulations appearing at 12 CFR part 32) shall apply to savings
associations in the same manner and to the same extent as these
provisions apply to national banks:
(1) The total loans and extensions of credit by a savings
association to one borrower outstanding at one time and not fully
secured, as determined in the same manner as determined under 12
[[Page 50977]]
U.S.C. 84(a)(2), by collateral having a market value at least equal to
the amount of the loan or extension of credit shall not exceed 15
percent of the unimpaired capital and unimpaired surplus of the
association.
(2) The total loans and extensions of credit by a savings
association to one borrower outstanding at one time and fully secured
by readily marketable collateral having a market value, as determined
by reliable and continuously available price quotations, at least equal
to the amount of the funds outstanding shall not exceed 10 per centum
of the unimpaired capital and unimpaired surplus of the association.
This limitation shall be separate from and in addition to the
limitation contained in paragraph (c)(1) of this section.
(d) Exceptions to the general limitation--(1) $500,000 exception.
If a savings association's aggregate lending limitation calculated
under paragraphs (c)(1) and (c)(2) of this section is less than
$500,000, notwithstanding this aggregate limitation in paragraphs
(c)(1) and (c)(2) of this section, such savings association may have
total loans and extensions of credit, for any purpose, to one borrower
outstanding at one time not to exceed $500,000.
(2) Statutory exceptions. The exceptions to the lending limits set
forth in 12 U.S.C. 84 and 12 CFR part 32 are applicable to savings
associations in the same manner and to the extent as they apply to
national banks.
(3) Loans to develop domestic residential housing units. Subject to
paragraph (d)(4) of this section, a savings association may make loans
to one borrower to develop domestic residential housing units, not to
exceed the lesser of $30,000,000 or 30 percent of the savings
association's unimpaired capital and unimpaired surplus, including all
amounts loaned under the authority of the General Limitation set forth
under paragraphs (c)(1) and (c)(2) of this section, provided that:
(i) The final purchase price of each single family dwelling unit
the development of which is financed under this paragraph (d)(3) does
not exceed $500,000;
(ii) The savings association is, and continues to be, in compliance
with its fully phased-in capital standards, as defined in paragraph
(b)(6) of this section;
(iii) OTS permits, subject to conditions it may impose, the savings
association to use the higher limit set forth under this paragraph
(d)(3). A savings association that meets the requirements of paragraphs
(d)(3) (i), (ii), (iv) and (v) of this section and that meets the
requirements for ``expedited treatment'' under Sec. 516.3(a) of this
chapter may use the higher limit set forth under this paragraph (d)(3)
if the savings association has filed a notice with OTS that it intends
to use the higher limit at least 30 days prior to the proposed use. A
savings association that meets the requirements of paragraphs (d)(3)
(i), (ii), (iv) and (v) of this section and that meets the requirements
for ``standard treatment'' under Sec. 516.3(b) of this chapter may use
the higher limit set forth under this paragraph (d)(3) if the savings
association has filed a notice with OTS and an order has been issued
permitting the savings association to use the higher limit;
(iv) Loans made under this paragraph (d)(3) to all borrowers do
not, in aggregate, exceed 150 percent of the savings association's
unimpaired capital and unimpaired surplus; and
(v) Such loans comply with the applicable loan-to-value
requirements that apply to Federal savings associations.
(4) The authority of a savings association to make a loan or
extension of credit under the exception in paragraph (d)(3) of this
section ceases immediately upon the association's failure to comply
with any one of the requirements set forth in paragraph (d)(3) of this
section or any condition(s) set forth in a Director's order under
paragraph (d)(3)(iii) of this section.
(5) Notwithstanding the limit set forth in paragraphs (c)(1) and
(c)(2) of this section, a savings association may invest up to 10
percent of unimpaired capital and unimpaired surplus in the obligations
of one issuer evidenced by:
(i) Commercial paper rated, as of the date of purchase, as shown by
the most recently published rating by at least two nationally
recognized investment rating services in the highest category; or
(ii) Corporate debt securities that may be sold with reasonable
promptness at a price that corresponds reasonably to their fair value,
and that are rated in one of the two highest categories by a nationally
recognized investment rating service in its most recently published
ratings before the date of purchase of the security.
(e) Loans to finance the sale of REO. A savings association's loans
to one borrower to finance the sale of real property acquired in
satisfaction of debts previously contracted for in good faith shall
not, when aggregated with all other loans to such borrower, exceed the
General Limitation in paragraph (c)(1) of this section.
(f) Calculating compliance and recordkeeping. (1) The amount of an
association's unimpaired capital and unimpaired surplus pursuant to
paragraph (b)(11) of this section shall be calculated as of the
association's most recent periodic report required to be filed with OTS
prior to the date of granting or purchasing the loan or otherwise
creating the obligation to repay funds, unless the association knows,
or has reason to know, based on transactions or events actually
completed, that such level has changed significantly, upward or
downward, subsequent to filing of such report.
(2) If a savings association or subsidiary thereof makes a loan or
extension of credit to any one borrower, as defined in paragraph (b)(1)
of this section, in an amount that, when added to the total balances of
all outstanding loans owed to such association and its subsidiary by
such borrower, exceeds the greater of $500,000 or 5 percent of
unimpaired capital and unimpaired surplus, the records of such
association or its subsidiary with respect to such loan shall include
documentation showing that such loan was made within the limitations of
paragraphs (c) and (d) of this section; for the purpose of such
documentation such association or subsidiary may require, and may
accept in good faith, a certification by the borrower identifying the
persons, entities, and interests described in the definition of one
borrower in paragraph (b)(1) of this section.
(g) [Reserved]
(h) More stringent restrictions. The Director may impose more
stringent restrictions on a savings association's loans to one borrower
if the Director determines that such restrictions are necessary to
protect the safety and soundness of the savings association.
Appendix to Sec. 560.93--Interpretations
Section 560.93-100 Interrelation of General Limitation With
Exception for Loans To Develop Domestic Residential Housing Units
1. The Sec. 560.93(d)(3) exception for loans to one person to
develop domestic residential housing units is characterized in the
regulation as an ``alternative'' limit. This exceptional $30,000,000
or 30 percent limitation does not operate in addition to the 15
percent General Limitation or the 10 percent additional amount an
association may loan to one borrower secured by readily marketable
collateral, but serves as the uppermost limitation on a savings
association's lending to any one person once an association employs
this exception. An example will illustrate the Office's
interpretation of the application of this rule:
Example: Savings Associations A's lending limitation as
calculated under the 15 percent General Limitation is $800,000. If
Association A lends Y $800,000 for commercial purposes, Association
A cannot lend Y an additional $1,600,000, or 30 percent of capital
and surplus, to develop
[[Page 50978]]
residential housing units under the paragraph (d)(3) exception. The
(d)(3) exception operates as the uppermost limitation on all lending
to one borrower (for associations that may employ this exception)
and includes any amounts loaned to the same borrower under the
General Limitation. Association A, therefore, may lend only an
additional $800,000 to Y, provided the paragraph (d)(3)
prerequisites have been met. The amount loaned under the authority
of the General Limitation ($800,000), when added to the amount
loaned under the exception ($800,000), yields a sum that does not
exceed the 30 percent uppermost limitation ($1,600,000).
2. This result does not change even if the facts are altered to
assume that some or all of the $800,000 amount of lending
permissible under the General Limitation's 15 percent basket is not
used, or is devoted to the development of domestic residential
housing units.
In other words, using the above example, if Association A lends
Y $400,000 for commercial purposes and $300,000 for residential
purposes--both of which would be permitted under the Association's
$800,000 General Limitation--Association A's remaining permissible
lending to Y would be: first, an additional $100,000 under the
General Limitation, and then another $800,000 to develop domestic
residential housing units if the Association meets the paragraph
(d)(3) prerequisites. (The latter is $800,000 because in no event
may the total lending to Y exceed 30 percent of unimpaired capital
and unimpaired surplus). If Association A did not lend Y the
remaining $100,000 permissible under the General Limitation, its
permissible loans to develop domestic residential housing units
under paragraph (d)(3) would be $900,000 instead of $800,000 (the
total loans to Y would still equal $1,600,000).
3. In short, under the paragraph (d)(3) exception, the 30
percent or $30,000,000 limit will always operate as the uppermost
limitation, unless of course the association does not avail itself
of the exception and merely relies upon its General Limitation.
Section 560.93-101 Interrelationship Between the General
Limitation and the 150 Percent Aggregate Limit on Loans to all
Borrowers To Develop Domestic Residential Housing Units
1. The Office has already received numerous questions regarding
the allocation of loans between the different lending limit
``baskets,'' i.e., the 15 percent General Limitation basket and the
30 percent Residential Development basket. In general, the inquiries
concern the manner in which an association may ``move'' a loan from
the General Limitation basket to the Residential Development basket.
The following example is intended to provide guidance:
Example: Association A's General Limitation under section
5(u)(1) is $15 million. In January, Association A makes a $10
million loan to Borrower to develop domestic residential housing
units. At the time the loan was made, Association A had not received
approval under a Director order to avail itself of the residential
development exception to lending limits. Therefore, the $10 million
loan is made under Association A's General Limitation.
2. In June, Association A receives authorization to lend under
the Residential Development exception. In July, Association A lends
$3 million to Borrower to develop domestic residential housing
units. In August, Borrower seeks an additional $12 million
commercial loan from Association A. Association A cannot make the
loan to Borrower, however, because it already has an outstanding $10
million loan to Borrower that counts against Association A's General
Limitation of $15 million. Thus, Association A may lend only up to
an additional $5 million to Borrower under the General Limitation.
3. However, Association A may be able to reallocate the $10
million loan it made to Borrower in January to its Residential
Development basket provided that: (1) Association A has obtained
authority under a Director's order to avail itself of the additional
lending authority for residential development and maintains
compliance with all prerequisites to such lending authority; (2) the
original $10 million loan made in January constitutes a loan to
develop domestic residential housing units as defined; and (3) the
housing unit(s) constructed with the funds from the January loan
remain in a stage of ``development'' at the time Association A
reallocates the loan to the domestic residential housing basket. The
project must be in a stage of acquisition, development,
construction, rehabilitation, or conversion in order for the loan to
be reallocated.
4. If Association A is able to reallocate the $10 million loan
made to Borrower in January to its Residential Development basket,
it may make the $12 million commercial loan requested by Borrower in
August. Once the January loan is reallocated to the Residential
Development basket, however, the $10 million loan counts towards
Association's 150 percent aggregate limitation on loans to all
borrowers under the residential development basket (section
5(u)(2)(A)(ii)(IV)).
5. If Association A reallocates the January loan to its domestic
residential housing basket and makes an additional $12 million
commercial loan to Borrower, Association A's totals under the
respective limitations would be: $12 million under the General
Limitation; and $13 million under the Residential Development
limitation. The full $13 million residential development loan counts
toward Association A's aggregate 150 percent limitation.
Sec. 560.100 Real estate lending standards; purpose and scope.
This section, and Sec. 560.101 of this subpart, issued pursuant to
section 304 of the Federal Deposit Insurance Corporation Improvement
Act of 1991, 12 U.S.C. 1828(o), prescribe standards for real estate
lending to be used by savings associations and all their includable
subsidiaries, as defined in 12 CFR 567.1(l), over which the savings
associations exercise control, in adopting internal real estate lending
policies.
Sec. 560.101 Real estate lending standards.
(a) Each savings association shall adopt and maintain written
policies that establish appropriate limits and standards for extensions
of credit that are secured by liens on or interests in real estate, or
that are made for the purpose of financing permanent improvements to
real estate.
(b) (1) Real estate lending policies adopted pursuant to this
section must:
(i) Be consistent with safe and sound banking practices;
(ii) Be appropriate to the size of the institution and the nature
and scope of its operations; and
(iii) Be reviewed and approved by the savings association's board
of directors at least annually.
(2) The lending policies must establish:
(i) Loan portfolio diversification standards;
(ii) Prudent underwriting standards, including loan-to-value
limits, that are clear and measurable;
(iii) Loan administration procedures for the savings association's
real estate portfolio; and
(iv) Documentation, approval, and reporting requirements to monitor
compliance with the savings association's real estate lending policies.
(c) Each savings association must monitor conditions in the real
estate market in its lending area to ensure that its real estate
lending policies continue to be appropriate for current market
conditions.
(d) The real estate lending policies adopted pursuant to this
section should reflect consideration of the Interagency Guidelines for
Real Estate Lending Policies established by the Federal bank and thrift
supervisory agencies.
Appendix to Sec. 560.101--Interagency Guidelines for Real Estate
Lending Policies
The agencies' regulations require that each insured depository
institution adopt and maintain a written policy that establishes
appropriate limits and standards for all extensions of credit that
are secured by liens on or interests in real estate or made for the
purpose of financing the construction of a building or other
improvements.1 These guidelines are intended to assist
institutions in the formulation and maintenance of a real estate
lending policy that is appropriate to the size of the institution
and the nature and
[[Page 50979]]
scope of its individual operations, as well as satisfies the
requirements of the regulation.
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\1\ The agencies have adopted a uniform rule on real estate
lending. See 12 CFR Part 365 (FDIC); 12 CFR Part 208, Subpart C
(FRB); 12 CFR Part 34, Subpart D (OCC); and 12 CFR 560.100-560.101
(OTS).
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Each institution's policies must be comprehensive, and
consistent with safe and sound lending practices, and must ensure
that the institution operates within limits and according to
standards that are reviewed and approved at least annually by the
board of directors. Real estate lending is an integral part of many
institutions' business plans and, when undertaken in a prudent
manner, will not be subject to examiner criticism.
Loan Portfolio Management Considerations
The lending policy should contain a general outline of the scope
and distribution of the institution's credit facilities and the
manner in which real estate loans are made, serviced, and collected.
In particular, the institution's policies on real estate lending
should:
Identify the geographic areas in which the institution
will consider lending.
Establish a loan portfolio diversification policy and
set limits for real estate loans by type and geographic market
(e.g., limits on higher risk loans).
Identify appropriate terms and conditions by type of
real estate loan.
Establish loan origination and approval procedures,
both generally and by size and type of loan.
Establish prudent underwriting standards that are clear
and measurable, including loan-to-value limits, that are consistent
with these supervisory guidelines.
Establish review and approval procedures for exception
loans, including loans with loan-to-value percentages in excess of
supervisory limits.
Establish loan administration procedures, including
documentation, disbursement, collateral inspection, collection, and
loan review.
Establish real estate appraisal and evaluation
programs.
Require that management monitor the loan portfolio and
provide timely and adequate reports to the board of directors.
The institution should consider both internal and external
factors in the formulation of its loan policies and strategic plan.
Factors that should be considered include:
The size and financial condition of the institution.
The expertise and size of the lending staff.
The need to avoid undue concentrations of risk.
Compliance with all real estate related laws and
regulations, including the Community Reinvestment Act, anti-
discrimination laws, and for savings associations, the Qualified
Thrift Lender test.
Market conditions.
The institution should monitor conditions in the real estate
markets in its lending area so that it can react quickly to changes
in market conditions that are relevant to its lending decisions.
Market supply and demand factors that should be considered include:
Demographic indicators, including population and
employment trends.
Zoning requirements.
Current and projected vacancy, construction, and
absorption rates.
Current and projected lease terms, rental rates, and
sales prices, including concessions.
Current and projected operating expenses for different
types of projects.
Economic indicators, including trends and
diversification of the lending area.
Valuation trends, including discount and direct
capitalization rates.
Underwriting Standards
Prudently underwritten real estate loans should reflect all
relevant credit factors, including:
The capacity of the borrower, or income from the
underlying property, to adequately service the debt.
The value of the mortgaged property.
The overall creditworthiness of the borrower.
The level of equity invested in the property.
Any secondary sources of repayment.
Any additional collateral or credit enhancements (such
as guarantees, mortgage insurance or takeout commitments).
The lending policies should reflect the level of risk that is
acceptable to the board of directors and provide clear and
measurable underwriting standards that enable the institution's
lending staff to evaluate these credit factors. The underwriting
standards should address:
The maximum loan amount by type of property.
Maximum loan maturities by type of property.
Amortization schedules.
Pricing structure for different types of real estate
loans.
Loan-to-value limits by type of property.
For development and construction projects, and completed
commercial properties, the policy should also establish,
commensurate with the size and type of the project or property:
Requirements for feasibility studies and sensitivity
and risk analyses (e.g., sensitivity of income projections to
changes in economic variables such as interest rates, vacancy rates,
or operating expenses).
Minimum requirements for initial investment and
maintenance of hard equity by the borrower (e.g., cash or
unencumbered investment in the underlying property).
Minimum standards for net worth, cash flow, and debt
service coverage of the borrower or underlying property.
Standards for the acceptability of and limits on non-
amortizing loans.
Standards for the acceptability of and limits on the
use of interest reserves.
Pre-leasing and pre-sale requirements for income-
producing property.
Pre-sale and minimum unit release requirements for non-
income-producing property loans.
Limits on partial recourse or nonrecourse loans and
requirements for guarantor support.
Requirements for takeout commitments.
Minimum covenants for loan agreements.
Loan Administration
The institution should also establish loan administration
procedures for its real estate portfolio that address:
Documentation, including:
Type and frequency of financial statements, including
requirements for verification of information provided by the
borrower;
Type and frequency of collateral evaluations (appraisals and
other estimates of value).
Loan closing and disbursement.
Payment processing.
Escrow administration.
Collateral administration.
Loan payoffs.
Collections and foreclosure, including:
Delinquency follow-up procedures;
Foreclosure timing;
Extensions and other forms of forbearance;
Acceptance of deeds in lieu of foreclosure.
Claims processing (e.g., seeking recovery on a
defaulted loan covered by a government guaranty or insurance
program).
Servicing and participation agreements.
Supervisory Loan-to-Value Limits
Institutions should establish their own internal loan-to-value
limits for real estate loans. These internal limits should not
exceed the following supervisory limits:
------------------------------------------------------------------------
Loan-to-
Loan category value limit
(percent)
------------------------------------------------------------------------
Raw land................................................... 65
Land development........................................... 75
Construction:
Commercial, multifamily,\1\ and other nonresidential..... 80
1- to 4-family residential............................... 85
Improved property........................................ 85
Owner-occupied 1- to 4-family and home equity...........
FR Doc. 96-23726 Lending and Investment
. ( \2\ )
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\1\ Multifamily construction includes condominiums and cooperatives.
\2\ A loan-to-value limit has not been established for permanent
mortgage or home equity loans on owner-occupied, 1- to 4-family
residential property. However, for any such loan with a loan-to-value
ratio that equals or exceeds 90 percent at origination, an institution
should require appropriate credit enhancement in the form of either
mortgage insurance or readily marketable collateral.
The supervisory loan-to-value limits should be applied to the
underlying property that collateralizes the loan. For loans that
fund multiple phases of the same real estate project (e.g., a loan
for both land development and construction of an office building),
the appropriate loan-to-value limit is the limit applicable to the
final phase of the project funded by the loan; however, loan
disbursements should not exceed actual development or construction
outlays. In situations where a loan is fully cross-collateralized by
two or more properties or is secured by a collateral pool of two or
more properties, the appropriate maximum loan amount under
supervisory loan-to-value limits is the sum of the value of each
property, less senior liens, multiplied by the appropriate loan-to-
value limit for each
[[Page 50980]]
property. To ensure that collateral margins remain within the
supervisory limits, lenders should redetermine conformity whenever
collateral substitutions are made to the collateral pool.
In establishing internal loan-to-value limits, each lender is
expected to carefully consider the institution-specific and market
factors listed under ``Loan Portfolio Management Considerations,''
as well as any other relevant factors, such as the particular
subcategory or type of loan. For any subcategory of loans that
exhibits greater credit risk than the overall category, a lender
should consider the establishment of an internal loan-to-value limit
for that subcategory that is lower than the limit for the overall
category.
The loan-to-value ratio is only one of several pertinent credit
factors to be considered when underwriting a real estate loan. Other
credit factors to be taken into account are highlighted in the
``Underwriting Standards'' section above. Because of these other
factors, the establishment of these supervisory limits should not be
interpreted to mean that loans at these levels will automatically be
considered sound.
Loans in Excess of the Supervisory Loan-to-Value Limits
The agencies recognize that appropriate loan-to-value limits
vary not only among categories of real estate loans but also among
individual loans. Therefore, it may be appropriate in individual
cases to originate or purchase loans with loan-to-value ratios in
excess of the supervisory loan-to-value limits, based on the support
provided by other credit factors. Such loans should be identified in
the institutions' records, and their aggregate amount reported at
least quarterly to the institution's board of directors. (See
additional reporting requirements described under ``Exceptions to
the General Policy.'') The aggregate amount of all loans in excess
of the supervisory loan-to-value limits should not exceed 100
percent of total capital.2 Moreover, within the aggregate
limit, total loans for all commercial, agricultural, multifamily or
other non-1-to- 4 family residential properties should not exceed 30
percent of total capital. An institution will come under increased
supervisory scrutiny as the total of such loans approaches these
levels.
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\2\ For the state member banks, the term ``total capital'' means
``total risk-based capital'' as defined in Appendix A to 12 CFR Part
208. For insured state non-member banks, ``total capital'' refers to
that term described in table I of Appendix A to 12 CFR Part 325. For
national banks, the term ``total capital'' is defined at 12 CFR
3.2(e). For savings associations, the term ``total capital'' is
defined at 12 CFR 567.5(c).
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In determining the aggregate amount of such loans, institutions
should: (a) Include all loans secured by the same property if any
one of those loans exceeds the supervisory loan-to-value limits; and
(b) include the recourse obligation of any such loan sold with
recourse. Conversely, a loan should no longer be reported to the
directors as part of aggregate totals when reduction in principal or
senior liens, or additional contribution of collateral or equity
(e.g., improvements to the real property securing the loan), bring
the loan-to-value ratio into compliance with supervisory limits.
Excluded Transactions
The agencies also recognize that there are a number of lending
situations in which other factors significantly outweigh the need to
apply the supervisory loan-to-value limits.
These include:
Loans guaranteed or insured by the U.S. government or
its agencies, provided that the amount of the guaranty or insurance
is at least equal to the portion of the loan that exceeds the
supervisory loan-to-value limit.
Loans backed by the full faith and credit of a state
government, provided that the amount of the assurance is at least
equal to the portion of the loan that exceeds the supervisory loan-
to-value limit.
Loans guaranteed or insured by a state, municipal or
local government, or an agency thereof, provided that the amount of
the guaranty or insurance is at least equal to the portion of the
loan that exceeds the supervisory loan-to-value limit, and provided
that the lender has determined that the guarantor or insurer has the
financial capacity and willingness to perform under the terms of the
guaranty or insurance agreement.
Loans that are to be sold promptly after origination,
without recourse, to a financially responsible third party.
Loans that are renewed, refinanced, or restructured
without the advancement of new funds or an increase in the line of
credit (except for reasonable closing costs), or loans that are
renewed, refinanced, or restructured in connection with a workout
situation, either with or without the advancement of new funds,
where consistent with safe and sound banking practices and part of a
clearly defined and well-documented program to achieve orderly
liquidation of the debt, reduce risk of loss, or maximize recovery
on the loan.
Loans that facilitate the sale of real estate acquired
by the lender in the ordinary course of collecting a debt previously
contracted in good faith.
Loans for which a lien on or interest in real property
is taken as additional collateral through an abundance of caution by
the lender (e.g., the institution takes a blanket lien on all or
substantially all of the assets of the borrower, and the value of
the real property is low relative to the aggregate value of all
other collateral).
Loans, such as working capital loans, where the lender
does not rely principally on real estate as security and the
extension of credit is not used to acquire, develop, or construct
permanent improvements on real property.
Loans for the purpose of financing permanent
improvements to real property, but not secured by the property, if
such security interest is not required by prudent underwriting
practice.
Exceptions to the General Lending Policy
Some provision should be made for the consideration of loan
requests from creditworthy borrowers whose credit needs do not fit
within the institution's general lending policy. An institution may
provide for prudently underwritten exceptions to its lending
policies, including loan-to-value limits, on a loan-by-loan basis.
However, any exceptions from the supervisory loan-to-value limits
should conform to the aggregate limits on such loans discussed
above.
The board of directors is responsible for establishing standards
for the review and approval of exception loans. Each institution
should establish an appropriate internal process for the review and
approval of loans that do not conform to its own internal policy
standards. The approval of any such loan should be supported by a
written justification that clearly sets forth all of the relevant
credit factors that support the underwriting decision. The
justification and approval documents for such loans should be
maintained as a part of the permanent loan file. Each institution
should monitor compliance with its real estate lending policy and
individually report exception loans of a significant size to its
board of directors.
Supervisory Review of Real Estate Lending Policies and Practices
The real estate lending policies of institutions will be
evaluated by examiners during the course of their examinations to
determine if the policies are consistent with safe and sound lending
practices, these guidelines, and the requirements of the regulation.
In evaluating the adequacy of the institution's real estate lending
policies and practices, examiners will take into consideration the
following factors:
The nature and scope of the institution's real estate
lending activities.
The size and financial condition of the institution.
The quality of the institution's management and
internal controls.
The expertise and size of the lending and loan
administration staff.
Market conditions.
Lending policy exception reports will also be reviewed by
examiners during the course of their examinations to determine
whether the institutions' exceptions are adequately documented and
appropriate in light of all of the relevant credit considerations.
An excessive volume of exceptions to an institution's real estate
lending policy may signal a weakening of its underwriting practices,
or may suggest a need to revise the loan policy.
Definitions
For the purposes of these Guidelines:
Construction loan means an extension of credit for the purpose
of erecting or rehabilitating buildings or other structures,
including any infrastructure necessary for development.
Extension of credit or loan means:
(1) The total amount of any loan, line of credit, or other
legally binding lending commitment with respect to real property;
and
(2) The total amount, based on the amount of consideration paid,
of any loan, line of credit, or other legally binding lending
commitment acquired by a lender by purchase, assignment, or
otherwise.
[[Page 50981]]
Improved property loan means an extension of credit secured by
one of the following types of real property:
(1) Farmland, ranchland or timberland committed to ongoing
management and agricultural production;
(2) 1- to 4-family residential property that is not owner-
occupied;
(3) Residential property containing five or more individual
dwelling units;
(4) Completed commercial property; or
(5) Other income-producing property that has been completed and
is available for occupancy and use, except income-producing owner-
occupied 1- to 4-family residential property.
Land development loan means an extension of credit for the
purpose of improving unimproved real property prior to the erection
of structures. The improvement of unimproved real property may
include the laying or placement of sewers, water pipes, utility
cables, streets, and other infrastructure necessary for future
development.
Loan origination means the time of inception of the obligation
to extend credit (i.e., when the last event or prerequisite,
controllable by the lender, occurs causing the lender to become
legally bound to fund an extension of credit).
Loan-to-value or loan-to-value ratio means the percentage or
ratio that is derived at the time of loan origination by dividing an
extension of credit by the total value of the property(ies) securing
or being improved by the extension of credit plus the amount of any
readily marketable collateral and other acceptable collateral that
secures the extension of credit. The total amount of all senior
liens on or interests in such property(ies) should be included in
determining the loan-to-value ratio. When mortgage insurance or
collateral is used in the calculation of the loan-to-value ratio,
and such credit enhancement is later released or replaced, the loan-
to-value ratio should be recalculated.
Other acceptable collateral means any collateral in which the
lender has a perfected security interest, that has a quantifiable
value, and is accepted by the lender in accordance with safe and
sound lending practices. Other acceptable collateral should be
appropriately discounted by the lender consistent with the lender's
usual practices for making loans secured by such collateral. Other
acceptable collateral includes, among other items, unconditional
irrevocable standby letters of credit for the benefit of the lender.
Owner-occupied, when used in conjunction with the term 1- to 4-
family residential property means that the owner of the underlying
real property occupies at least one unit of the real property as a
principal residence of the owner.
Readily marketable collateral means insured deposits, financial
instruments, and bullion in which the lender has a perfected
interest. Financial instruments and bullion must be salable under
ordinary circumstances with reasonable promptness at a fair market
value determined by quotations based on actual transactions, on an
auction or similarly available daily bid and ask price market.
Readily marketable collateral should be appropriately discounted by
the lender consistent with the lender's usual practices for making
loans secured by such collateral.
Value means an opinion or estimate, set forth in an appraisal or
evaluation, whichever may be appropriate, of the market value of
real property, prepared in accordance with the agency's appraisal
regulations and guidance. For loans to purchase an existing
property, the term ``value'' means the lesser of the actual
acquisition cost or the estimate of value.
1- to 4-family residential property means property containing
fewer than five individual dwelling units, including manufactured
homes permanently affixed to the underlying property (when deemed to
be real property under state law).
Sec. 560.110 Most favored lender usury preemption.
(a) Definition. The term ``interest'' as used in 12 U.S.C. 1463(g)
includes any payment compensating a creditor or prospective creditor
for an extension of credit, making available of a line of credit, or
any default or breach by a borrower of a condition upon which credit
was extended. It includes, among other things, the following fees
connected with credit extension or availability: numerical periodic
rates, late fees, not sufficient funds (NSF) fees, overlimit fees,
annual fees, cash advance fees, and membership fees. It does not
ordinarily include appraisal fees, premiums and commissions
attributable to insurance guaranteeing repayment of any extension of
credit, finders' fees, fees for document preparation or notarization,
or fees incurred to obtain credit reports.
(b) Authority. A savings association located in a state may charge
interest at the maximum rate permitted to any state-chartered or
licensed lending institution by the law of that state. If state law
permits different interest charges on specified classes of loans, a
federal savings association making such loans is subject only to the
provisions of state law relating to that class of loans that are
material to the determination of the permitted interest. For example, a
federal savings association may lawfully charge the highest rate
permitted to be charged by a state-licensed small loan company, without
being so licensed, but subject to state law limitations on the size of
loans made by small loan companies. Except as provided in this
paragraph, the applicability of state law to Federal savings
associations shall be determined in accordance with Sec. 560.2 of this
part. State supervisors determine the degree to which state-chartered
savings associations must comply with state laws other than those
imposing restrictions on interest, as defined in paragraph (a) of this
section.
(c) Effect on state definitions of interest. The Federal definition
of the term ``interest'' in paragraph (a) of this section does not
change how interest is defined by the individual states (nor how the
state definition of interest is used) solely for purposes of state law.
For example, if late fees are not ``interest'' under state law where a
savings association is located but state law permits its most favored
lender to charge late fees, then a savings association located in that
state may charge late fees to its intrastate customers. The savings
association may also charge late fees to its interstate customers
because the fees are interest under the Federal definition of interest
and an allowable charge under state law where the savings association
is located. However, the late fees would not be treated as interest for
purposes of evaluating compliance with state usury limitations because
state law excludes late fees when calculating the maximum interest that
lending institutions may charge under those limitations.
Sec. 560.120 Letters of credit and other independent undertakings to
pay against documents.
(a) General authority. To the extent that it has legal authority to
do so, a savings association may issue and commit to issue letters of
credit within the scope of applicable laws or rules of practice
recognized by law.1 It may also issue other independent
undertakings within the scope of such laws or rules of practice
recognized by law, that have been approved by OTS (approved
undertaking). Under such letters of credit and approved undertakings,
the savings association's obligation to honor depends upon the
presentation of specified documents and not upon nondocumentary
conditions or resolution of questions of fact or law at issue between
the account party and the beneficiary. A savings association may also
confirm or otherwise undertake to honor or purchase specified documents
[[Page 50982]]
upon their presentation under another person's independent undertaking
within the scope of such laws or rules.
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\1\ Samples of laws or rules of practice applicable to letters
of credit and other independent undertakings include, but are not
limited to: the applicable version of Article 5 of the Uniform
Commercial Code (UCC) (1962, as amended 1990) or revised Article 5
of the UCC (as amended 1995) (available from West Publishing Co., 1/
800/340-9378); the Uniform Customs and Practice for Documentary
Credits (International Chamber of Commerce (ICC) Publication No.
500) (available from ICC Publishing, Inc., 212/206-1150); the United
Nations Commission on International Trade Law (UNCITRAL) Convention
on Independent Guarantees and Standby Letters of Credit (adopted by
UNCITRAL 1995) (available from UNCITRAL, 212/963-5353); and the
Uniform Rules for Bank-to-Bank Reimbursements Under Documentary
Credits (ICC Publication No. 525) (available from ICC Publishing,
Inc., 212/206-1150); as any of the foregoing may be amended from
time to time.
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(b) Safety and soundness considerations.--(1) Terms. As a matter of
safe and sound banking practice, savings associations that issue
letters of credit or approved undertakings should not be exposed to
undue risk. At a minimum, savings associations should consider the
following:
(i) The independent character of the letter of credit or approved
undertaking should be apparent from its terms (such as terms that
subject it to laws or rules providing for its independent character);
(ii) The letter of credit or approved undertaking should be limited
in amount;
(iii) The letter of credit or approved undertaking should:
(A) Be limited in duration; or
(B) Permit the savings association to terminate the letter of
credit or approved undertaking, either on a periodic basis (consistent
with the savings association's ability to make any necessary credit
assessments) or at will upon either notice or payment to the
beneficiary; or
(C) Entitle the savings association to cash collateral from the
account party on demand (with a right to accelerate the customer's
obligations, as appropriate); and
(iv) The savings association either should be fully collateralized
or have a post-honor right of reimbursement from its customer or from
another issuer of a letter of credit or an independent undertaking.
Alternatively, if the savings association's undertaking is to purchase
documents of title, securities, or other valuable documents, it should
obtain a first priority right to realize on the documents if the
savings association is not otherwise to be reimbursed.
(2) Additional considerations in special circumstances. Certain
letters of credit and approved undertakings require particular
protections against credit, operational, and market risk:
(i) In the event that the undertaking is to honor by delivery of an
item of value other than money, the savings association should ensure
that market fluctuations that affect the value of the item will not
cause the savings association to assume undue market risk;
(ii) In the event that an undertaking provides for renewal, the
terms for renewal should be consistent with the savings association's
ability to make any necessary credit assessments prior to renewal; and
(iii) In the event that a savings association issues an undertaking
for its own account, the underlying transaction for which it is issued
must be within the savings association's authority and comply with any
safety and soundness requirements applicable to that transaction.
(3) Operational expertise. The savings association should possess
operational expertise that is commensurate with the sophistication of
its letter of credit or independent undertaking activities.
(4) Documentation. The savings association must accurately reflect
its letters of credit or approved undertakings in its records,
including any acceptance or deferred payment or other absolute
obligation arising out of its contingent undertaking.
Sec. 560.121 Investment in state housing corporations.
(a) Any savings association to the extent it has legal authority to
do so, may make investments in, commitments to invest in, loans to, or
commitments to lend to any state housing corporation; provided, that
such obligations or loans are secured directly, or indirectly through a
fiduciary, by a first lien on improved real estate which is insured
under the National Housing Act, as amended, and that in the event of
default, the holder of such obligations or loans has the right
directly, or indirectly through a fiduciary, to subject to the
satisfaction of such obligations or loans the real estate described in
the first lien, or the insurance proceeds.
(b) Any savings association that is adequately capitalized may, to
the extent it has legal authority to do so, invest in obligations
(including loans) of, or issued by, any state housing corporation
incorporated in the state in which such savings association has its
home or a branch office; provided (except with respect to loans), that:
(1) The obligations are rated in one of the four highest grades as
shown by the most recently published rating made of such obligations by
a nationally recognized rating service; or
(2) The obligations, if not rated, are approved by the Office. The
aggregate outstanding direct investment in obligations under paragraph
(b) of this section shall not exceed the amount of the savings
association's total capital.
(c) Each state housing corporation in which a savings association
invests under the authority of paragraph (b) of this section shall
agree, before accepting any such investment (including any loan or loan
commitment), to make available at any time to the Office such
information as the Office may consider to be necessary to ensure that
investments are properly made under this section.
Sec. 560.160 Asset classification.
(a) (1) Each savings association shall evaluate and classify its
assets on a regular basis in a manner consistent with, or reconcilable
to, the asset classification system used by OTS in its Thrift
Activities Handbook (Available at the address listed in Sec. 516.1 of
this chapter).
(2) In connection with the examination of a savings association or
its affiliates, OTS examiners may identify problem assets and classify
them, if appropriate. The association must recognize such examiner
classifications in its subsequent reports to OTS.
(b) Based on the evaluation and classification of its assets, each
savings association shall establish adequate valuation allowances or
charge-offs, as appropriate, consistent with generally accepted
accounting principles and the practices of the federal banking
agencies.
Sec. 560.170 Records for lending transactions.
In establishing and maintaining its records pursuant to
Sec. 563.170 of this chapter, each savings association and service
corporation should establish and maintain loan documentation practices
that:
(a) Ensure that the institution can make an informed lending
decision and can assess risk on an ongoing basis;
(b) Identify the purpose and all sources of repayment for each
loan, and assess the ability of the borrower(s) and any guarantor(s) to
repay the indebtedness in a timely manner;
(c) Ensure that any claims against a borrower, guarantor, security
holders, and collateral are legally enforceable;
(d) Demonstrate appropriate administration and monitoring of its
loans; and
(e) Take into account the size and complexity of its loans.
Sec. 560.172 Re-evaluation of real estate owned.
A savings association shall appraise each parcel of real estate
owned at the earlier of in-substance foreclosure or at the time of the
savings association's acquisition of such property, and at such times
thereafter as dictated by prudent management policy; such appraisals
shall be consistent with the requirements of part 564 of this chapter.
The Regional Director or his or her designee may require subsequent
appraisals if, in his or her discretion, such subsequent appraisal is
necessary under the particular circumstances. The foregoing requirement
shall not apply to any parcel of real estate that is sold and
[[Page 50983]]
reacquired less than 12 months subsequent to the most recent appraisal
made pursuant to this part. A dated, signed copy of each report of
appraisal made pursuant to any provisions of this part shall be
retained in the savings association's records.
Subpart C--Alternative Mortgage Transactions
Sec. 560.210 Disclosures for adjustable-rate mortgage loans,
adjustment notices, and interest-rate caps.
(a) Definitions. For purposes of this section:
(1) Adjustable-rate mortgage loan means a mortgage loan, secured by
property occupied or to be occupied by the borrower, providing for
adjustments to the interest rate which cause a change in balance, term
to maturity, or payment levels other than those established by a fixed,
predetermined schedule at the time of contracting for the loan.
(2) [Reserved]
(3) Applicant means a natural person (or persons) making a loan
application.
(4) Home means real estate as defined by Sec. 541.14 of this
chapter, manufactured housing, combinations of homes and business
property, and farm residences or combinations of farm residences and
commercial farm real estate.
(b) Initial disclosures for adjustable-rate mortgage loans. Savings
associations offering adjustable-rate home loans, except open-end
loans, with a term of more than one (1) year and secured by property
occupied or to be occupied by the borrower, shall provide two types of
written disclosure to prospective borrowers when an application form is
provided or before the payment of a non-refundable fee, whichever is
earlier:
(1) The booklet titled Consumer Handbook on Adjustable Rate
Mortgages published by the Office and the Federal Reserve Board, or a
suitable substitute (Available at the address listed in Sec. 516.1 of
this chapter.).
(2) A loan program disclosure for each adjustable-rate home loan
program in which the consumer expresses an interest. The following
disclosures, as applicable, shall be provided: 2
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\2\ A sample disclosure form may be found in the Federal
Register issue of May 23, 1988 (53 FR 18262) or may be obtained from
the Office at the address listed in Sec. 516.1 of this chapter.
---------------------------------------------------------------------------
(i) The fact that the interest rate, payment, or term of the loan
can change.
(ii) The index or formula used in making adjustments, and a source
of information about the index or formula.
(iii) An explanation of how the interest rate and payment will be
determined, including an explanation of how the index is adjusted, such
as by the use of a margin.
(iv) A statement that the consumer should ask about the current
margin value and current interest rate.
(v) The fact that the interest rate will be discounted, and a
statement that the consumer should ask about the amount of the interest
rate discount.
(vi) The frequency of interest rate and payment changes.
(vii) Any rules relating to changes in the index, interest rate,
payment amount, and outstanding loan balance including, for example, an
explanation of interest rate or payment limitations, negative
amortization, and interest rate carryover.
(viii) An historical example, based on a $10,000 loan amount,
illustrating how payments and the loan balance would have been affected
by interest rate changes implemented according to the terms of the loan
program. The example shall be based upon index values beginning in 1977
and be updated annually until a 15-year history is shown. Thereafter,
the example shall reflect the most recent 15 years of index values. The
example shall reflect all significant loan program terms, such as
negative amortization, interest rate carryover, interest rate
discounts, and interest rate and payment limitations, that would have
been affected by the index movement during the period.
(ix) An explanation of how the consumer may calculate the payments
for the loan amount to be borrowed based on the most recent payment
shown in the historical example.
(x) The maximum interest rate and payment for a $10,000 loan
originated at the most recent interest rate shown in the historical
example assuming the maximum periodic increases in rates and payments
under the program; and the initial interest rate and payment for that
loan.
(xi) The fact that the loan program contains a demand feature.
(xii) The type of information that will be provided in notices of
adjustments and the timing of such notices.
(xiii) A statement that disclosure forms are available for the
creditor's other variable-rate loan programs.
(c) Adjustment notices. An adjustment to the interest rate with or
without a corresponding adjustment to the payment in an adjustable-rate
transaction subject to this section is an event requiring new
disclosures to the consumer. At least once each year during which an
interest rate adjustment is implemented without an accompanying payment
change, and at least 25, but no more than 120, calendar days before a
payment at a new level is due, the following written disclosures, as
applicable, must be delivered or placed in the mail:
(1) The current and prior interest rates.
(2) The index values upon which the current and prior interest
rates are based.
(3) The extent to which the creditor has foregone any increase in
the interest rate.
(4) The contractual effects of the adjustment, including the
payment due after the adjustment is made, and a statement of the loan
balance.
(5) The payment, if different from that referred to in paragraph
(c)(4) of this section, that would be required to amortize fully the
loan at the new interest rate over the remainder of the loan term.
(d) [Reserved]
(e) Maximum interest rate caps. All savings associations making
adjustable-rate loans, originated on or after December 8, 1987, whether
open-end or closed-end, shall comply with Regulation Z (12 CFR 226.30)
by specifying in their credit contracts the maximum interest rate that
may be imposed during the term of the obligation.
(f) Exception. The disclosures in paragraph (b) of this section are
not required in connection with the extension of consumer credit as
defined in Sec. 561.12 of this chapter even if it is secured by a
borrower-occupied home as long as the home is not the primary security
for the loan.
(g) Exempt transactions. This section does not apply to an
extension of credit primarily for a business, commercial, or
agricultural purpose.
Sec. 560.220 Alternative Mortgage Parity Act.
Pursuant to 12 U.S.C. 3803, housing creditors that are not
commercial banks, credit unions, or Federal savings associations may
make alternative mortgage transactions as defined by that section and
further defined and described by applicable regulations identified in
this section, notwithstanding any state constitution, law, or
regulation. In accordance with section 807(b) of Public Law 97-320, 12
U.S.C. 3801 note, Secs. 560.33, 560.34, 560.35, and 560.210 of this
part are identified as appropriate and applicable to the exercise of
this authority and all regulations not so identified are deemed
inappropriate and inapplicable. Housing creditors engaged in credit
sales should read the term ``loan'' as ``credit sale'' wherever
applicable.
[[Page 50984]]
PART 563--OPERATIONS
10. The authority citation for part 563 continues to read as
follows:
Authority: 12 U.S.C. 375b, 1462, 1462a, 1463, 1464, 1467a, 1468,
1817, 1828, 3806.
Sec. 563.51 [Amended]
11. Section 563.51(f)(1)(i) is amended by removing the phrase
``Sec. 545.45(a)(1)'', and by adding in lieu thereof the phrase
``Sec. 560.30''.
Subpart D of Part 563--[Removed and Reserved]
12. Subpart D of part 563 is removed and reserved.
Sec. 563.160 [Removed]
13. Section 563.160 is removed.
14. Section 563.170 is amended by revising paragraph (c) to read as
follows:
Sec. 563.170 Examinations and audits; appraisals; establishment and
maintenance of records.
* * * * *
(c) Establishment and maintenance of records. To enable the Office
to examine savings associations and affiliates and audit savings
associations, affiliates, and service corporations pursuant to the
provisions of paragraph (a) of this section, each savings association,
affiliate, and service corporation shall establish and maintain such
accounting and other records as will provide an accurate and complete
record of all business it transacts. This includes, without limitation,
establishing and maintaining such other records as are required by
statute or any other regulation to which the savings association,
affiliate, or service corporation is subject. The documents, files, and
other material or property comprising said records shall at all times
be available for such examination and audit wherever any of said
records, documents, files, material, or property may be.
* * * * *
Sec. 563.172 [Removed]
15. Section 563.172 is removed.
PART 566--LIQUIDITY
16. The authority citation for part 566 continues to read as
follows:
Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1465, 1467a; 15
U.S.C. 1691, 1691a.
Sec. 566.1 [Amended]
17. Section 566.1(g)(6)(i) is amended by removing the phrase
``Sec. 545.72(a)'', and by adding in lieu thereof the phrase
``Sec. 560.42''.
PART 571--STATEMENTS OF POLICY
18. The authority citation for part 571 continues to read as
follows:
Authority: 5 U.S.C. 552, 559; 12 U.S.C. 1462a, 1463, 1464.
Secs. 571.8, 571.13, 571.20, 571.22 [Removed]
19. Sections 571.8, 571.13, 571.20, and 571.22 are removed.
PART 590--PREEMPTION OF STATE USURY LAWS
20. The authority citation for part 590 continues to read as
follows:
Authority: 12 U.S.C. 1735f-7a.
Sec. 590.4 [Amended]
21. Section 590.4(e)(1) is amended by removing the phrase
``Sec. 545.33(f)'', and by adding in lieu thereof the phrase
``Sec. 560.220''.
Dated: September 11, 1996.
By the Office of Thrift Supervision.
John F. Downey,
Executive Director, Supervision.
[FR Doc. 96-23726 Filed 9-27-96; 8:45 am]
BILLING CODE 6720-01 P
Complete official Federal Register PDF
FR Doc. 96-22769 Airworthiness Directives; Pratt & Whitney PW2000 Series Turbofan Engines
[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Rules and Regulations]
[Pages 50984-50988]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22769]
=======================================================================
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DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. 95-ANE-37; Amendment 39-9732; AD 96-18-08]
Airworthiness Directives; Pratt & Whitney PW2000 Series Turbofan
Engines
AGENCY: Federal Aviation Administration, DOT.
ACTION: Final rule.
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SUMMARY: This amendment adopts a new airworthiness directive (AD),
applicable to Pratt & Whitney PW2000 series turbofan engines, that
requires a reduction in the cyclic service life limit for hubs, disks,
airseals, blade retaining plates, and airsealing ring supports on
certain high pressure turbines (HPT) and low pressure turbines (LPT),
and provides for optional inspections for cracks or rework of certain
HPT and LPT hardware in order to retain the original, higher cyclic
service life limit for these components. This amendment is prompted in
part by new temperature data from engine testing, which were used in
recalculating stress levels, and resulted in a change to the calculated
cyclic service life limit. The actions specified by this AD are
intended to prevent HPT or LPT failure, which may result in an
uncontained engine failure and possible damage to the aircraft.
DATES: Effective November 29, 1996.
The incorporation by reference of certain publications listed in
the regulations is approved by the Director of the Federal Register as
of November 29, 1996.
ADDRESSES: The service information referenced in this AD may be
obtained from Pratt & Whitney, Publications Department, Supervisor
Technical Publications Distribution, M/S 132-30, 400 Main St., East
Hartford, CT 06108; telephone (860) 565-7700, fax (860) 565-4503. This
information may be examined at the Federal Aviation Administration
(FAA), New England Region, Office of the Assistant Chief Counsel, 12
New England Executive Park, Burlington, MA; or at the Office of the
Federal Register, 800 North Capitol Street, NW., suite 700, Washington,
DC.
FOR FURTHER INFORMATION CONTACT: John Fisher, Aerospace Engineer,
Engine Certification Office, FAA, Engine and Propeller Directorate, 12
New England Executive Park, Burlington, MA 01803-5299; telephone (617)
238-7149, fax (617) 238-7199.
SUPPLEMENTARY INFORMATION: A proposal to amend part 39 of the Federal
Aviation Regulations (14 CFR part 39) to include an airworthiness
directive (AD) that is applicable to Pratt & Whitney PW2000 series
turbofan engines was published in the Federal Register on October 16,
1995 (60 FR 53554). That action proposed to require a reduction in the
cyclic service life limit for hubs, disks, airseals, blade retaining
plates, and airsealing ring supports on certain HPT and LPT hardware,
and provide for optional inspections for cracks or rework of certain
HPT and LPT hardware in order to retain the original, higher cyclic
service life limit for these components.
Interested persons have been afforded an opportunity to participate
in the making of this amendment. Due consideration has been given to
the comments received.
One commenter states that the AD should be withdrawn. The commenter
states that life reductions are already provided in Chapter 05 of the
Engine Manual, thereby mandating the appropriate part lives.
Furthermore, the commenter states that by mandating the SBs in the AD,
all standard practices referenced within these SBs become mandated, so
that the overhaul shops will be required to obtain multiple alternative
methods of compliance, since their shop practices may be different than
those referenced in the AD. The FAA does not concur. Service life
limits that appear as airworthiness limitations at the time of type-
[[Page 50985]]
certification can be changed to more restrictive limits only by way of
rulemaking through an Airworthiness Directive. A change to the service
bulletin alone will not mandate a new, more restrictive, life limit.
While the new limits will typically appear in service instructions or
manuals before an AD is published, the FAA must complete the change by
publishing an AD. Regarding the commenter's issue on obtaining multiple
alternative methods of compliance, the FAA has revised this final rule
to permit certain applicable earlier revisions to various SBs.
Relative to the issue of SB standard shop practice references being
different than those employed by the airlines and overhaul shops, the
FAA recommends the commenter obtain alternate methods of compliance for
their shop practices that are relevant to the requirements of this AD.
One commenter states that the AD should be revised to agree with
the requirements of PW Alert Service Bulletin (ASB) No. PW2000 72-450,
Revision 5, dated May 28, 1994. Paragraph (e) in the compliance section
of the NPRM states that the initial inspection must be performed prior
to 6,000 total part cycles (TPC). The AD should be revised to allow
first run hubs to continue in service up to 7,500 TPC prior to initial
inspection. The FAA concurs and has revised this final rule
accordingly.
The commenter also states that paragraph (e) should be revised to
require the initial inspection prior to 7,500 TPC, and suggests a
wording change to better align the wording and intent with PW ASB No.
PW2000 72-450, Revision 5, dated May 28, 1994. The FAA concurs in part.
The initial inspection has been revised in this final rule to be
performed prior to 7,500 TPC, but the FAA believes that the compliance
structure in the NPRM is clearer than that proposed by the commenter,
and has therefore not revised the wording in this final rule.
The FAA has determined that the new, reduced life limits imposed by
this AD will not adversely affect fleet scheduling or result in
grounded aircraft due to the fact that these limits have already been
published in Chapter 05 of the applicable Engine Manuals, Airworthiness
Limitation Section, and operators have been notified previously in a
timely manner. Therefore, this AD does not include a phase-in period or
drawdown schedule of affected components.
Since issuance of the NPRM, PW has issued ASB No. PW2000 A72-450,
Revision 6, dated July 9, 1996. This final rule references this latest
as well as the previous revisions.
After careful review of the available data, including the comments
noted above, the FAA has determined that air safety and the public
interest require the adoption of the rule with the changes described
previously. The FAA has determined that these changes will neither
increase the economic burden on any operator nor increase the scope of
the AD.
There are approximately 650 engines of the affected design in the
worldwide fleet. The FAA estimates that 600 engines installed on
aircraft of U.S. registry will be affected by this AD, and that no
additional labor costs will be incurred by the fleet since inspection
and replacement intervals fall within the normal maintenance and
overhaul periods. Therefore, the FAA has determined that there would be
no additional cost impact on U.S. operators.
The regulations adopted herein will not have substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, in
accordance with Executive Order 12612, it is determined that this final
rule does not have sufficient federalism implications to warrant the
preparation of a Federalism Assessment.
For the reasons discussed above, I certify that this action (1) is
not a ``significant regulatory action'' under Executive Order 12866;
(2) is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979); and (3) will not have a
significant economic impact, positive or negative, on a substantial
number of small entities under the criteria of the Regulatory
Flexibility Act. A final evaluation has been prepared for this action
and it is contained in the Rules Docket. A copy of it may be obtained
from the Rules Docket at the location provided under the caption
ADDRESSES.
List of Subjects in 14 CFR Part 39
Air Transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.
Adoption of the Amendment
Accordingly, pursuant to the authority delegated to me by the
Administrator, the Federal Aviation Administration amends part 39 of
the Federal Aviation Regulations (14 CFR part 39) as follows:
PART 39--AIRWORTHINESS DIRECTIVES
1. The authority citation for part 39 continues to read as follows:
Authority: 49 USC 106(g), 40113, 44701.
Sec. 39.13 [Amended]
2. Section 39.13 is amended by adding the following new
airworthiness directive:
96-18-08 Pratt & Whitney: Amendment 39-9732. Docket 95-ANE-37.
Applicability: Pratt & Whitney Models PW2037, PW2037(M), PW2040,
PW2240, and PW2337 turbofan engines installed on but not limited to
Boeing 757 series and Ilyushin IL96 series aircraft.
Note: This airworthiness directive (AD) applies to each engine
identified in the preceding applicability provision, regardless of
whether it has been modified, altered, or repaired in the area
subject to the requirements of this AD. For engines that have been
modified, altered, or repaired so that the performance of the
requirements of this AD is affected, the owner/operator must request
approval for an alternative method of compliance in accordance with
paragraph (o) of this AD. The request should include an assessment
of the effect of the modification, alteration, or repair on the
unsafe condition addressed by this AD; and, if the unsafe condition
has not been eliminated, the request should include specific
proposed actions to address it.
Compliance: Required as indicated, unless accomplished
previously.
To prevent high pressure turbine (HPT) or low pressure turbine
(LPT) failure, which may result in an uncontained engine failure and
possible damage to the aircraft, accomplish the following:
(a) Remove from service 1st stage HPT disks, Part Number (P/N)
1A5301, prior to exceeding 5,000 total part cycles since new (TPC),
if installed with blade retaining plate, P/N 1A6998, and replace
with serviceable parts. If blade retaining plate, P/N 1A6998, has
not been installed on disk, P/N 1A5301, the disk may accumulate
15,000 TPC prior to removal from service.
(b) Remove from service 1st stage HPT blade retaining plates, P/
N 1A6998, prior to exceeding 5,000 TPC, and replace with serviceable
parts. If rework is accomplished prior to exceeding 5,000 TPC in
accordance with the Accomplishment Instructions of PW Alert Service
Bulletin (ASB) No. PW2000 A72-82, Revision 1, dated April 25, 1986;
Revision 2, dated July 17, 1986; Revision 3, dated November 7, 1986;
or Revision 4, dated June 18, 1987, and reidentified as assembly P/N
1B2373, the blade retaining plate may accumulate 15,000 TPC prior to
removal from service.
(c) Remove from service 2nd stage HPT blade retaining plates, P/
N 1B0450, prior to exceeding 7,000 TPC, and replace with serviceable
parts.
(d) Remove from service 2nd stage HPT blade retaining plates, P/
N 1B0945 (assembly P/N 1B0947), and replace with serviceable parts,
in accordance with the
[[Page 50986]]
Accomplishment Instructions of PW ASB No. PW2000 A72-228, Revision
2, dated May 10, 1988; Revision 3, dated August 25, 1988; or
Revision 4, dated November 9, 1988, as follows:
(1) Prior to exceeding 5,000 TPC, for retaining plates that have
not been inspected in accordance with the Accomplishment
Instructions of the above ASB prior to 3,000 TPC.
(2) Prior to exceeding 8,000 TPC, for retaining plates that have
been inspected in accordance with the Accomplishment Instructions of
the above ASB prior to 3,000 TPC.
(e) Remove from service 2nd stage HPT hubs, P/N's 1A8302,
1B1002, 1B1202, or 1B4902 prior to exceeding 7,500 TPC, and replace
with serviceable hubs. Hubs may accumulate 15,000 TPC prior to
removal from service if they are inspected at intervals that do not
exceed 6,000 cycles in service since last inspection, in accordance
with the Accomplishment Instructions of PW Service Bulletin (SB) No.
PW2000 72-450, Original, dated March 13, 1992; Revision 1, dated
March 26, 1992; Revision 2, dated April 7, 1992; Revision 3, dated
May 29, 1992; Revision 4, dated August 28, 1992; Revision 5, dated
May 28, 1994; or Revision 6, dated July 9, 1996.
(f) Remove from service 2nd stage HPT hubs, P/N 1B6602, prior to
exceeding 7,500 TPC, and replace with serviceable hubs. Hubs may
accumulate 15,000 TPC prior to removal from service if hub
assemblies are inspected prior to 7,500 TPC to verify scarf cut
blades are installed and to inspect the blade platform rail fillet
radii dimensions, in accordance with the Accomplishment Instructions
of PW SB No. PW2000 72-501, dated September 30, 1993. Hub assemblies
found with non-scarf cut blades must be reinspected at intervals not
to exceed 6,000 TPC since last inspection. Blades found with under
minimum rail fillet radii dimensions must be scrapped.
(g) Remove from service HPT lenticular airseal, P/N 1A8209,
prior to exceeding 4,000 TPC, and replace with serviceable airseals.
Airseals may accumulate 15,000 TPC prior to removal from service if:
(1) Inspected prior to exceeding 4,000 TPC, and thereafter
inspected at intervals not to exceed 250 cycles in service since
last inspection, in accordance with Compliance Paragraph E of the
Accomplishment Instructions of PW ASB No. PW2000 A72-220, Revision
3, dated April 13, 1989, or Revision 4, dated September 20, 1989; or
(2) The 2nd stage HPT case and vane assembly is reworked and
reidentified prior to exceeding 4,000 TPC, in accordance with the
Accomplishment Instructions of PW SB No. PW2000 72-233, Revision 2,
dated September 27, 1988, or Revision 3, dated May 30, 1989.
(h) For PW2037, PW2037(M), and PW2337 model engines, remove from
service 4th stage LPT disks, P/N's 8A1024, 8A1534, or 8A2137 prior
to exceeding 17,000 TPC, and replace with serviceable disks.
(i) For PW2040 and PW2240 model engines, remove from service 4th
stage LPT disks, P/N's 8A1534 or 8A2137, prior to exceeding 15,000
TPC, and replace with serviceable disks.
(j) Remove from service 3rd stage LPT airsealing ring supports,
P/N 8A1783, and replace with serviceable parts, as follows:
(1) For PW2040 and PW2240 model engines, prior to exceeding
15,000 TPC.
(2) For PW2037, PW2037(M), and PW2337 model engines, prior to
exceeding 17,000 TPC. Airsealing ring supports may accumulate 20,000
TPC prior to removal from service if they were fluorescent penetrant
inspected in accordance with Section 72-53-00 of PW2000 Engine
Manual, P/N 1A6231.
(k) For PW2037, PW2037(M), and PW2337 model engines, remove from
service prior to exceeding 17,000 TPC, and replace with serviceable
parts, as follows:
(1) 4th stage LPT airseal, P/N's 8A1014 or 8A1805.
(2) 5th stage LPT airseal, P/N's 8A1015 or 8A1806.
(3) 7th stage LPT airseal, P/N's A8A1017, A8A1808, 8A2097, or
A8A2097.
(l) Parts listed in paragraph (k) of this AD may accumulate
20,000 TPC prior to removal from service if they were fluorescent
penetrant inspected for cracks between 12,000 TPC and 17,000 TPC in
accordance with Section 72-53-00 of PW2000 Engine Manual, P/N
1A6231.
(m) For PW2040 and PW2240 model engines, remove from service
prior to exceeding 15,000 TPC, and replace with serviceable parts,
as follows:
(1) 4th stage LPT airseal, P/N's 8A1014 or 8A1805.
(2) 5th stage LPT airseal, P/N's 8A1015 or 8A1806.
(3) 7th stage LPT airseal, P/N's A8A1017, A8A1808, 8A2097, or
A8A2097.
(n) Parts listed in paragraph (m) of this AD may accumulate the
following TPC prior to removal if they were fluorescent penetrant
inspected for cracks between 10,000 TPC and 15,000 TPC in accordance
with Section 72-53-00 of PW2000 Engine Manual, P/N 1A6231.
(1) 4th stage LPT airseal, P/N's 8A1014 or 8A1805, prior to
exceeding 18,000 TPC.
(2) 5th stage LPT airseal, P/N's 8A1015 or 8A1806, prior to
exceeding 19,000 TPC.
(3) 7th stage LPT airseal, P/N's A8A1017, A8A1808, 8A2097, or
A8A2097, prior to exceeding 20,000 TPC, accomplish the following:
(o) An alternative method of compliance or adjustment of the
compliance time that provides an acceptable level of safety may be
used if approved by the Manager, Engine Certification Office. The
request should be forwarded through an appropriate FAA Principal
Maintenance Inspector, who may add comments and then send it to the
Manager, Engine Certification Office.
Note: Information concerning the existence of approved
alternative methods of compliance with this airworthiness directive,
if any, may be obtained from the Engine Certification Office.
(p) Special flight permits may be issued in accordance with
sections 21.197 and 21.199 of the Federal Aviation Regulations (14
CFR 21.197 and 21.199) to operate the aircraft to a location where
the requirements of this AD can be accomplished.
(q) The actions required by this AD shall be done in accordance
with the following PW service documents:
----------------------------------------------------------------------------------------------------------------
Document No. Pages Revision Date
----------------------------------------------------------------------------------------------------------------
ASB No. PW2000 A72-82.......... 1 1 April 25, 1986.
2-6 Original June 7, 1985.
7-9 1 April 25, 1986.
10 Original June 7, 1985.
11 1 April 25, 1986.
Total Pages: 11.
ASB No. PW2000 A72-82.......... 1 2 July 17, 1986.
2-6 Original June 7, 1985.
7-9 1 April 25, 1986.
10 Original June 7, 1985.
11 2 July 17, 1986.
Total Pages: 11.
ASB No. PW2000 A72-82.......... 1-4 3 November 7, 1986.
5,6 Original June 7, 1985.
7-14 3 November 7, 1986.
Total Pages: 14
ASB No. PW2000 A72-82.......... 1 4 June 18, 1987.
2-4 3 November 7, 1986.
5,6 Original June 7, 1985.
7-12 3 November 7, 1986.
13 4 June 18, 1987.
[[Page 50987]]
14 3 November 7, 1986.
Total Pages: 14.
ASB No. PW2000 A72-228......... 1 2 May 10, 1988.
2 Original July 6, 1987.
3 2 May 10, 1988.
4 1 March 29, 1988.
5-26 2 May 10, 1988.
Total Pages: 26.
ASB No. PW2000 A72-228......... 1 3 August 25, 1988.
2 Original July 6, 1987.
3 2 May 10, 1988.
4 3 August 25, 1988.
5-19 2 May 10, 1988.
20 3 August 25, 1988.
21,22 2 May 10, 1988.
23 3 August 25, 1988.
24-26 2 May 10, 1988.
Total Pages: 26.
ASB No. PW2000 A72-228......... 1 4 November 9, 1988.
2 Original July 6, 1987.
3 4 November 9, 1988.
4 3 August 25, 1988.
5-19 2 May 10, 1988.
20 3 August 25, 1988.
21,22 2 May 10, 1988.
23 3 August 25, 1988.
24-26 4 November 9, 1988.
Total Pages: 26.
SB No. PW2000 72-450........... 1-26 Original March 13, 1992.
Total Pages: 26.
SB No. PW2000 72-450........... 1 1 March 26, 1992.
2-11 Original March 13, 1992.
12,13 1 March 26, 1992.
14,15 Original March 13, 1992.
16,17 1 March 26, 1992.
18-21 Original March 13, 1992.
22,23 1 March 26, 1992.
24,25 Original March 13, 1992.
26 1 March 26, 1992.
Total Pages: 26.
SB No. PW2000 72-450........... 1 2 April 7, 1992.
2,3 Original March 13, 1992.
4,5 2 April 7, 1992.
6-11 Original March 13, 1992.
12 1 March 26, 1992.
13 2 April 7, 1992.
14,15 Original March 13, 1992.
16,17 1 March 26, 1992.
18-21 Original March 13, 1992.
22,23 1 March 26, 1992.
24,25 Original March 13, 1992.
26 1 March 26, 1992.
Total Pages: 26.
SB No. PW2000 72-450........... 1-5 3 May 29, 1992.
6-11 Original March 13, 1992.
12 1 March 26, 1992.
13 3 May 29, 1992.
14 Original March 13, 1992.
15-29 3 May 29, 1992.
Total Pages: 29.
ASB No. PW2000 72-450.......... 1 4 August 28, 1992.
2-5 3 May 29, 1992.
6-11 Original March 13, 1992.
12 1 March 26, 1992.
13 3 May 29, 1992.
14 Original March 13, 1992.
15 4 August 28, 1992.
16 3 May 29, 1992.
17 4 August 28, 1992.
18-29 3 May 29, 1992.
Total Pages: 29.
ASB No. PW2000 72-450.......... 1 5 May 28, 1994.
2 4 May 28, 1994.
3-5 3 May 29, 1992.
[[Page 50988]]
6-11 Original March 13, 1992.
12 1 March 26, 1992.
13 3 May 29, 1992.
14 Original March 13, 1992.
15 4 August 28, 1992.
16 3 May 29, 1992.
17 4 August 28, 1992.
18-29 3 May 29, 1992.
Total Pages: 29.
ASB No. PW2000 72-450.......... 1 6 July 9, 1996.
2 4 May 28, 1994.
3-5 3 May 29, 1992.
6-11 Original March 13, 1992.
12 1 March 26, 1992.
13 3 May 29, 1992.
14 Original March 13, 1992.
15 4 August 28, 1992.
16 3 May 29, 1992.
17 4 August 28, 1992.
18-28 3 May 29, 1992.
29 6 July 9, 1996.
Total Pages: 29.
SB No. PW2000 72-501........... 1-12 Original September 30, 1993.
Total Pages: 12.
ASB No. PW2000 A72-220......... 1 3 April 13, 1989.
2 1 July 29, 1987.
3-26 3 April 13, 1989.
Total Pages: 26.
ASB No. PW2000 A72-220......... 1 4 September 20, 1989.
2 1 July 29, 1987.
3-6 3 April 13, 1989.
7-9 4 September 20, 1989.
10-16 3 April 13, 1989.
17-27 4 September 20, 1989.
Total Pages: 27.
SB No. PW2000 72-233........... 1,2 2 September 27, 1988.
3-7 Original August 7, 1987.
8 1 January 22, 1988.
9,10 2 September 27, 1988.
Total Pages: 10.
SB No. PW2000 72-233........... 1-4 3 May 30, 1989.
5 Original August 7, 1987.
6 3 May 30, 1989.
7 Original August 7, 1987.
8 1 January 22, 1988.
9,10 3 May 30, 1989.
Total Pages: 10.
----------------------------------------------------------------------------------------------------------------
This incorporation by reference was approved by the Director of
the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR
part 51. Copies may be obtained from Pratt & Whitney, Technical
Publications Department, M/S 132-30, 400 Main Street, East Hartford,
CT 06108; telephone (860) 565-7700. Copies may be inspected at the
FAA, New England Region, Office of the Assistant Chief Counsel, 12
New England Executive Park, Burlington, MA; or at the Office ofthe
Federal Register, 800 North Capitol Street NW., suite 700,
Washington, DC.
(r) This amendment becomes effective on November 29, 1996.
Issued in Burlington, Massachusetts, on August 26, 1996.
Jay J. Pardee,
Manager, Engine and Propeller Directorate, Aircraft Certification
Service.
[FR Doc. 96-22769 Filed 9-27-96; 8:45 am]
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