issue-1996-01-16•Federal Register final rules — 1996-01-16
Federal Register final rules — 1996-01-16
issue-1996-01-16Federal Register final rules — 1996-01-16Regulation
Published Federal Register documents, not public-inspection drafts. The GPO XML/text rendition is a research aid; the linked complete official PDF retains the printed layout and all graphics. Graphics are retained in that PDF and are not independently reproduced in this text rendition. Publication does not establish that every provision remains legally in force.
FR Doc. 96-429 Notice and Collection of Withdrawal Liability; Adoption of New Interest Rate
[Federal Register Volume 61, Number 10 (Tuesday, January 16, 1996)]
[Rules and Regulations]
[Pages 1129-1130]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-429]
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PENSION BENEFIT GUARANTY CORPORATION
29 CFR Part 2644
Notice and Collection of Withdrawal Liability; Adoption of New
Interest Rate
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Final rule.
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SUMMARY: This is an amendment to the Pension Benefit Guaranty
Corporation's regulation on Notice and Collection of Withdrawal
Liability. That regulation incorporates certain interest rates
published by another Federal agency. This amendment adds to the
appendix of that regulation a new interest rate to be effective from
January 1, 1996, to March 31, 1996. The effect of the amendment is to
advise the public of the new rate.
EFFECTIVE DATE: January 1, 1996.
FOR FURTHER INFORMATION CONTACT: Harold J. Ashner, Assistant General
Counsel, Office of the General Counsel, Pension Benefit Guaranty
Corporation, 1200 K Street, NW., Washington, DC 20005-4026; telephone
202-326-4024 (202-326-4179 for TTY and TDD). These are not toll-free
numbers.
SUPPLEMENTARY INFORMATION: Under section 4219(c) of the Employee
Retirement Income Security Act of 1974, as amended, the Pension Benefit
Guaranty Corporation promulgated a final regulation on Notice and
Collection of Withdrawal Liability. That regulation, codified at 29 CFR
part 2644, deals with the rate of interest to be charged by
multiemployer pension plans on withdrawal liability payments that are
overdue or in default, or to be credited by plans on overpayments of
withdrawal liability. The regulation allows plans to set rates, subject
to certain restrictions. Where a plan does not set the interest rate,
Sec. 2644.3(b) of the regulation provides that the rate to be charged
or credited for any calendar quarter is the average quoted prime rate
on short-term commercial loans for the fifteenth day (or the next
business day if the fifteenth day is not a business day) of the month
preceding the beginning of the quarter, as reported by the Board of
Governors of the Federal Reserve System in Statistical Release H.15
(``Selected Interest Rates'').
Because the regulation incorporates interest rates published in
Statistical Release H.15, that release is the
[[Page 1130]]
authoritative source for the rates that are to be applied under the
regulation. As a convenience to persons using the regulation, however,
the PBGC collects the applicable rates and republishes them in an
appendix to part 2644. This amendment adds to this appendix the
interest rate of 8.75 percent, which will be effective from January 1,
1996, through March 31, 1996. This rate represents no change from the
rate in effect for the fourth quarter of 1995. This rate is based on
the prime rate in effect on December 15, 1995.
The appendix to 29 CFR part 2644 does not prescribe interest rates
under the regulation; the rates prescribed in the regulation are those
published in Statistical Release H.15. The appendix merely collects and
republishes the rates in a convenient place. Thus, the interest rates
in the appendix are informational only. Accordingly, the PBGC finds
that notice of and public comment on this amendment would be
unnecessary and contrary to the public interest. For the above reasons,
the PBGC also believes that good cause exists for making this amendment
effective immediately.
The PBGC has determined that this action is not a ``significant
regulatory action'' under the criteria set forth in Executive Order
12866.
Because no general notice of proposed rulemaking is required for
this amendment, the Regulatory Flexibility Act of 1980 does not apply.
See 5 U.S.C. 601(2).
List of Subjects in 29 CFR Part 2644
Employee benefit plans, Pensions.
In consideration of the foregoing, part 2644 of subchapter F of
chapter XXVI of title 29, Code of Federal Regulations, is amended as
follows:
PART 2644--NOTICE AND COLLECTION OF WITHDRAWAL LIABILITY
1. The authority citation for part 2644 continues to read as
follows:
Authority: 29 U.S.C. 1302(b)(3), 1399(c)(6).
2. Appendix A to part 2644 is amended by adding to the end of the
table a new entry to read as follows:
Appendix A to Part 2644--Table of Interest Rates
* * * * *
------------------------------------------------------------------------
Date of Rate
From To quotation (percent)
------------------------------------------------------------------------
* * * *
* * *
01/01/96....................... 3/31/96 12/15/95 8.75
------------------------------------------------------------------------
Issued in Washington, DC, on this 5th day of January 1996.
Martin Slate,
Executive Director, Pension Benefit Guaranty Corporation.
[FR Doc. 96-429 Filed 1-11-96; 12:31 pm]
BILLING CODE 7708-01-P
Complete official Federal Register PDF
FR Doc. 96-428 Valuation of Plan Benefits in Single-Employer Plans; Valuation of Plan Benefits and Plan Assets Following Mass Withdrawal; Amendments Adopting Additional PBGC Rates
[Federal Register Volume 61, Number 10 (Tuesday, January 16, 1996)]
[Rules and Regulations]
[Pages 1127-1129]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-428]
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PENSION BENEFIT GUARANTY CORPORATION
29 CFR Parts 2619 and 2676
Valuation of Plan Benefits in Single-Employer Plans; Valuation of
Plan Benefits and Plan Assets Following Mass Withdrawal; Amendments
Adopting Additional PBGC Rates
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Final rule.
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SUMMARY: This final rule amends the Pension Benefit Guaranty
Corporation's regulations on Valuation of Plan Benefits in Single-
Employer Plans and Valuation of Plan Benefits and Plan Assets Following
Mass Withdrawal. The former regulation contains the interest
assumptions that the PBGC uses to value benefits under terminating
single-employer plans. The latter regulation contains the interest
assumptions for valuations of multiemployer plans that have undergone
mass withdrawal. The amendments set out in this final rule adopt the
interest assumptions applicable to single-employer plans with
termination dates in February 1996, and to multiemployer plans with
valuation dates in February 1996. The effect of these amendments is to
advise the public of the adoption of these assumptions.
EFFECTIVE DATE: February 1, 1996.
FOR FURTHER INFORMATION CONTACT: Harold J. Ashner, Assistant General
Counsel, Office of the General Counsel, Pension Benefit Guaranty
Corporation, 1200 K Street, NW., Washington, DC 20005, 202-326-4024
(202-326-4179 for TTY and TDD).
SUPPLEMENTARY INFORMATION: This rule adopts the February 1996 interest
assumptions to be used under the Pension Benefit Guaranty Corporation's
regulations on Valuation of Plan Benefits in Single-Employer Plans (29
CFR part 2619, the ``single-employer regulation'') and Valuation of
Plan Benefits and Plan Assets Following Mass Withdrawal (29 CFR part
2676, the ``multiemployer regulation'').
Part 2619 sets forth the methods for valuing plan benefits of
terminating single-employer plans covered under title IV of the
Employee Retirement Income Security Act of 1974, as amended. Under
ERISA section 4041(c), all single-employer plans wishing to terminate
in a distress termination must value guaranteed benefits and ``benefit
liabilities,'' i.e., all benefits provided under the plan as of the
plan termination date, using the formulas set forth in part 2619,
subpart C. (Plans terminating in a standard termination may, for
purposes of the Standard Termination Notice filed with PBGC, use these
formulas to value benefit liabilities, although this is not required.)
In addition, when the PBGC terminates an underfunded plan involuntarily
pursuant to ERISA section 4042(a), it uses the subpart C formulas to
determine the amount of the plan's underfunding. Part 2676 prescribes
rules for valuing benefits and certain assets of multiemployer plans
under sections 4219(c)(1)(D) and 4281(b) of ERISA.
Appendix B to part 2619 sets forth the interest rates and factors
under the single-employer regulation. Appendix B to part 2676 sets
forth the interest rates and factors under the multiemployer
regulation. Because these rates and factors are intended to reflect
current conditions in the financial and annuity markets, it is
necessary to update the rates and factors periodically.
The PBGC issues two sets of interest rates and factors, one set to
be used for the valuation of benefits to be paid as annuities and one
set for the valuation of benefits to be paid as lump sums. The same
assumptions apply to terminating single-employer plans and to
multiemployer plans that have undergone a mass withdrawal. This
amendment adds to appendix B to parts 2619 and 2676 sets of interest
rates and factors for valuing benefits in single-employer plans that
have termination dates during February 1996 and multiemployer plans
that have undergone mass withdrawal and have valuation dates during
February 1996.
For annuity benefits, the interest rates will be 5.40% for the
first 20 years following the valuation date and 4.75% thereafter. For
benefits to be paid as lump sums, the interest assumptions to be used
by the PBGC will be 4.25% for the period during which benefits are in
pay status, and 4.0% during all years preceding the benefit's placement
in pay status. The above annuity interest assumptions represent a
decrease (from those in effect for January 1996) of .20 percent for the
first 20 years following the valuation date and are otherwise
unchanged. The lump sum interest assumptions represent a decrease (from
those in effect for January 1996) of .25 percent for the period during
which benefits are in pay status, and are otherwise unchanged.
Generally, the interest rates and factors under these regulations
are in effect for at least one month. However, the PBGC publishes its
interest assumptions each month regardless of whether they represent a
change from the previous month's assumptions. The assumptions normally
will be published in the Federal Register by the 15th of
[[Page 1128]]
the preceding month or as close to that date as circumstances permit.
The PBGC has determined that notice and public comment on these
amendments are impracticable and contrary to the public interest. This
finding is based on the need to determine and issue new interest rates
and factors promptly so that the rates and factors can reflect, as
accurately as possible, current market conditions.
Because of the need to provide immediate guidance for the valuation
of benefits in single-employer plans whose termination dates fall
during February 1996, and in multiemployer plans that have undergone
mass withdrawal and have valuation dates during February 1996, the PBGC
finds that good cause exists for making the rates and factors set forth
in this amendment effective less than 30 days after publication.
The PBGC has determined that this action is not a ``significant
regulatory action'' under the criteria set forth in Executive Order
12866.
Because no general notice of proposed rulemaking is required for
this amendment, the Regulatory Flexibility Act of 1980 does not apply.
See 5 U.S.C. 601(2).
List of Subjects
29 CFR Part 2619
Employee benefit plans, Pension insurance, and Pensions.
29 CFR Part 2676
Employee benefit plans and Pensions.
In consideration of the foregoing, parts 2619 and 2676 of chapter
XXVI, title 29, Code of Federal Regulations, are hereby amended as
follows:
PART 2619--[AMENDED]
1. The authority citation for part 2619 continues to read as
follows:
Authority: 29 U.S.C. 1301(a), 1302(b)(3), 1341, 1344, 1362.
2. In appendix B, Rate Set 28 is added to Table I, and a new entry
is added to Table II, as set forth below. The introductory text of both
tables is republished for the convenience of the reader and remains
unchanged.
Appendix B to Part 2619--Interest Rates Used to Value Lump Sums and
Annuities
Lump Sum Valuations
In determining the value of interest factors of the form
v0:n (as defined in Sec. 2619.49(b)(1)) for purposes of
applying the formulas set forth in Sec. 2619.49(b) through (i) and
in determining the value of any interest factor used in valuing
benefits under this subpart to be paid as lump sums (including the
return of accumulated employee contributions upon death), the PBGC
shall employ the values of it set out in Table I hereof as
follows:
(1) For benefits for which the participant or beneficiary is
entitled to be in pay status on the valuation date, the immediate
annuity rate shall apply.
(2) For benefits for which the deferral period is y years (y is
an integer and 0 < y n1), interest rate i1
shall apply from the valuation date for a period of y years;
thereafter the immediate annuity rate shall apply.
(3) For benefits for which the deferral period is y years (y is
an integer and n1 < y n1 + n2), interest
rate i2 shall apply from the valuation date for a period of y -
n1 years, interest rate i1 shall apply for the following
n1 years; thereafter the immediate annuity rate shall apply.
(4) For benefits for which the deferral period is y years (y is
an integer and y n1 + n2), interest rate
i3 shall apply from the valuation date for a period of y -
n1 - n2 years, interest rate i2 shall apply for the
following n2 years, interest rate i1 shall apply for the
following n1 years; thereafter the immediate annuity rate shall
apply.
Table I
[Lump Sum Valuations]
--------------------------------------------------------------------------------------------------------------------------------------------------------
For plans with a valuation date Immediate Deferred annuities (percent)
Rate set ------------------------------------ annuity rate --------------------------------------------
On or after Before (percent) i1 i2 i3 n1 n2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * * * *
28..................................................... 02-1-96 03-1-96 4.25 4.00 4.00 4.00 7 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annuity Valuations
In determining the value of interest factors of the form
v0:n (as defined in Sec. 2619.49(b)(1)) for purposes of
applying the formulas set forth in Sec. 2619.49 (b) through (i) and
in determining the value of any interest factor used in valuing
annuity benefits under this subpart, the plan administrator shall
use the values of it prescribed in Table II hereof.
The following table tabulates, for each calendar month of
valuation ending after the effective date of this part, the interest
rates (denoted by i1, i2, . . . , and referred to
generally as it) assumed to be in effect between specified
anniversaries of a valuation date that occurs within that calendar
month; those anniversaries are specified in the columns adjacent to
the rates. The last listed rate is assumed to be in effect after the
last listed anniversary date.
Table II
[Annuity Valuations]
----------------------------------------------------------------------------------------------------------------
The values of it are:
For valuation dates occurring --------------------------------------------------------------------------------
in the month-- it for t = it for t = it for t =
----------------------------------------------------------------------------------------------------------------
* * * * * *
*
February 1996.................. .0540 1-20 .0475 >20 N/A N/A
----------------------------------------------------------------------------------------------------------------
PART 2676--[AMENDED]
3. The authority citation for part 2676 continues to read as
follows:
Authority: 29 U.S.C. 1302(b)(3), 1399(c)(1)(D), 1441(b)(1).
4. In appendix B, Rate Set 28 is added to Table I, and a new entry
is added to Table II, as set forth below. The introductory text of both
tables is
[[Page 1129]]
republished for the convenience of the reader and remains unchanged.
Appendix B to Part 2676--Interest Rates Used to Value Lump Sums and
Annuities
Lump Sum Valuations
In determining the value of interest factors of the form
v0:n (as defined in Sec. 2676.13(b)(1)) for purposes of
applying the formulas set forth in Sec. 2676.13 (b) through (i) and
in determining the value of any interest factor used in valuing
benefits under this subpart to be paid as lump sums, the PBGC shall
use the values of it prescribed in Table I hereof. The interest
rates set forth in Table I shall be used by the PBGC to calculate
benefits payable as lump sum benefits as follows:
(1) For benefits for which the participant or beneficiary is
entitled to be in pay status on the valuation date, the immediate
annuity rate shall apply.
(2) For benefits for which the deferral period is y years (y is
an integer and 0< y n1), interest rate i1 shall
apply from the valuation date for a period of y years; thereafter
the immediate annuity rate shall apply.
(3) For benefits for which the deferral period is y years (y is
an integer and n1< y n1+n2), interest rate
i2 shall apply from the valuation date for a period of
y-n1 years, interest rate i1 shall apply for the following
n1 years; thereafter the immediate annuity rate shall apply.
(4) For benefits for which the deferral period is y years (y is
an integer and y>n1+n2), interest rate i3 shall apply
from the valuation date for a period of y-n1-n2 years,
interest rate i2 shall apply for the following n2 years,
interest rate i1 shall apply for the following n1 years;
thereafter the immediate annuity rate shall apply.
Table I
[Lump Sum Valuations]
--------------------------------------------------------------------------------------------------------------------------------------------------------
For plans with a valuation date Immediate Deferred annuities (percent)
Rate set ------------------------------------ annuity rate --------------------------------------------
On or after Before (percent) i1 i2 i3 n1 n2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * * * *
28..................................................... 02-1-96 03-01-96 4.25 4.00 4.00 4.00 7 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annuity Valuations
In determining the value of interest factors of the form
v0:n (as defined in Sec. 2676.13(b)(1)) for purposes of
applying the formulas set forth in Sec. 2676.13(b) through (i) and
in determining the value of any interest factor used in valuing
annuity benefits under this subpart, the plan administrator shall
use the values of it prescribed in the table below.
The following table tabulates, for each calendar month of
valuation ending after the effective date of this part, the interest
rates (denoted by i1, i2, * * * , and referred to
generally as it) assumed to be in effect between specified
anniversaries of a valuation date that occurs within that calendar
month; those anniversaries are specified in the columns adjacent to
the rates. The last listed rate is assumed to be in effect after the
last listed anniversary date.
Table II
[Annuity Valuations]
----------------------------------------------------------------------------------------------------------------
The values of it are:
For valuation dates occurring --------------------------------------------------------------------------------
in the month-- it for t = it for t = it for t =
----------------------------------------------------------------------------------------------------------------
* * * * * *
*
February 1996.................. .0540 1-20 .0475 >20 N/A N/A
----------------------------------------------------------------------------------------------------------------
Issued in Washington, DC, on this 5th day of January 1996.
Martin Slate,
Executive Director Pension Benefit Guaranty Corporation.
[FR Doc. 96-428 Filed 1-11-96; 12:31 pm]
BILLING CODE 7708-01-P
Complete official Federal Register PDF
FR Doc. 96-427 Late Premium Payments and Employer Liability Underpayments and Overpayments; Interest Rate for Determining Variable Rate Premium; Amendments to Interest Rates
[Federal Register Volume 61, Number 10 (Tuesday, January 16, 1996)]
[Rules and Regulations]
[Pages 1126-1127]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-427]
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PENSION BENEFIT GUARANTY CORPORATION
29 CFR Parts 2610 and 2622
Late Premium Payments and Employer Liability Underpayments and
Overpayments; Interest Rate for Determining Variable Rate Premium;
Amendments to Interest Rates
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Final rule.
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SUMMARY: This document notifies the public of the interest rate
applicable to late premium payments and employer liability
underpayments and overpayments for the calendar quarter beginning
January 1, 1996. This interest rate is established quarterly by the
Internal Revenue Service. This document also sets forth the interest
rates for valuing unfunded vested benefits for premium purposes for
plan years beginning in November 1995 through January 1996. These
interest rates are established pursuant to section 4006 of the Employee
Retirement Income Security Act of 1974, as amended. The effect of these
amendments is to advise plan sponsors and pension practitioners of
these new interest rates.
EFFECTIVE DATE: January 1, 1996.
FOR FURTHER INFORMATION CONTACT: Harold J. Ashner, Assistant General
Counsel, Office of the General Counsel, Pension Benefit Guaranty
Corporation, 1200 K Street, NW., Washington, DC 20005-4026; telephone
202-326-4024 (202-326-4179 for TTY and TTD). These are not toll-free
numbers.
SUPPLEMENTARY INFORMATION: As part of title IV of the Employee
Retirement Income Security Act of 1974, as amended, the Pension Benefit
Guaranty Corporation collects premiums from ongoing plans to support
the single-employer and multiemployer insurance programs. Under the
single-employer program, the PBGC also collects employer liability from
those persons described in ERISA section 4062(a). Under ERISA section
4007 and 29 CFR Sec. 2610.7, the interest rate to be charged on unpaid
premiums is the rate established under section 6601 of the Internal
Revenue Code (``Code''). Similarly, under 29 CFR Sec. 2622.7, the
interest rate to be credited or charged with respect to overpayments or
underpayments of employer liability is the section 6601 rate. These
interest rates are published by the PBGC in appendix A to the premium
regulation and appendix A to the employer liability regulation.
The Internal Revenue Service has announced that for the quarter
beginning January 1, 1996, the interest charged on the underpayment of
taxes will be at a rate of 9 percent. Accordingly, the PBGC is amending
appendix A to 29 CFR part 2610 and appendix A to 29 CFR part 2622 to
set forth this rate for the January 1, 1996, through March 31, 1996,
quarter.
Under ERISA section 4006(a)(3)(E)(iii)(II), in determining a
single-employer plan's unfunded vested benefits for premium computation
purposes, plans must use an interest rate equal to 80% of the annual
yield on 30-year Treasury securities for the month preceding the
beginning of the plan year for which premiums are being paid. Under
Sec. 2610.23(b)(1) of the premium regulation, this value is determined
by reference to 30-year Treasury constant maturities as reported in
Federal Reserve Statistical Releases G.13 and H.15. The PBGC publishes
these rates in appendix B to the regulation.
The PBGC publishes these monthly interest rates in appendix B on a
quarterly basis to coincide with the publication of the late payment
interest rate set forth in appendix A. (The PBGC publishes the appendix
A rates every quarter, regardless of whether the rate has changed.)
Unlike the appendix A rate, which is determined prospectively, the
appendix B rate is not known until a short time after the first of the
month for which it applies. Accordingly, the PBGC is hereby amending
appendix B to part 2610 to add the vested benefits valuation rates for
plan years beginning in November of 1995 through January of 1996.
The appendices to 29 CFR parts 2610 and 2622 do not prescribe the
interest rates under these regulations. Under both regulations, the
appendix A rates are the rates determined under section 6601(a) of the
Code. The interest rates in appendix B to part 2610 are prescribed by
ERISA section 4006(a)(3)(E)(iii)(II) and Sec. 2610.23(b)(1) of the
regulation. These appendices merely collect and republish the interest
rates in a convenient place. Thus, the interest rates in the appendices
are informational only. Accordingly, the PBGC finds that notice of and
public comment on these amendments would be unnecessary and contrary to
the public interest. For the above reasons, the PBGC also believes that
good cause exists for making these amendments effective immediately.
The PBGC has determined that none of these actions is a
``significant regulatory action'' under the criteria set forth in
Executive Order 12866.
Because no general notice of proposed rulemaking is required for
these amendments, the Regulatory Flexibility Act of 1980 does not
apply. See 5 U.S.C. 601(2).
List of Subjects
29 CFR Part 2610
Employee benefit plans, Penalties, Pension insurance, Pensions, and
Reporting and recordkeeping requirements.
29 CFR Part 2622
Business and industry, Employee benefit plans, Pension insurance,
Pensions, Reporting and recordkeeping requirements, and Small
businesses.
In consideration of the foregoing, part 2610 and part 2622 of
chapter XXVI of title 29, Code of Federal Regulations, are hereby
amended as follows:
PART 2610--PAYMENT OF PREMIUMS
1. The authority citation for part 2610 continues to read as
follows:
Authority: 29 U.S.C. 1302(b)(3), 1306, 1307.
2. Appendix A to part 2610 is amended by adding a new entry for the
quarter beginning January 1, 1996, to read as follows. The introductory
text is republished for the convenience of the reader and remains
unchanged.
Appendix A to Part 2610--Late Payment Interest Rates
The following table lists the late payment interest rates under
Sec. 2610.7(a) for the specified time periods:
------------------------------------------------------------------------
Interest
From-- Through-- rate
(percent)
------------------------------------------------------------------------
* * * * *
January 1, 1996..................... March 31, 1996......... 9.00
------------------------------------------------------------------------
3. Appendix B to part 2610 is amended by adding to the table of
interest rates new entries for premium payment years beginning in
November of 1995 through January of 1996, to read as follows. The
introductory text is republished for the convenience of the reader and
remains unchanged.
[[Page 1127]]
Appendix B to Part 2610--Interest Rates for Valuing Vested Benefits
The following table lists the required interest rates to be used
in valuing a plan's vested benefits under Sec. 2610.23(b) and in
calculating a plan's adjusted vested benefits under
Sec. 2610.23(c)(1):
------------------------------------------------------------------------
Required
For premium payment years beginning in-- interest
rate \1\
------------------------------------------------------------------------
* * * * *
November 1995................................................ 5.10
December 1995................................................ 5.01
January 1996................................................. 4.85
------------------------------------------------------------------------
\1\ The required interest rate listed above is equal to 80% of the
annual yield for 30-year Treasury constant maturities, as reported in
Federal Reserve Statistical Release G.13 and H.15 for the calendar
month preceding the calendar month in which the premium payment year
begins.
PART 2622--EMPLOYER LIABILITY FOR WITHDRAWALS FROM AND TERMINATIONS
OF SINGLE-EMPLOYER PLANS
4. The authority citation for part 2622 continues to read as
follows:
Authority: 29 U.S.C. 1302(b)(3), 1362-1364, 1367-68.
5. Appendix A to part 2622 is amended by adding a new entry for the
quarter beginning January 1, 1996, to read as follows. The introductory
text is republished for the convenience of the reader and remains
unchanged.
Appendix A to Part 2622--Late Payment and Overpayment Interest
Rates
The following table lists the late payment and overpayment
interest rates under Sec. 2622.7 for the specified time periods:
------------------------------------------------------------------------
Interest
From-- Through-- rate
(percent)
------------------------------------------------------------------------
* * * * *
January 1, 1996..................... March 31, 1996......... 9.00
------------------------------------------------------------------------
Issued in Washington, DC, this 5th day of January 1996.
Martin Slate,
Executive Director, Pension Benefit Guaranty Corporation.
[FR Doc. 96-427 Filed 1-11-96; 12:31 pm]
BILLING CODE 7708-01-P
Complete official Federal Register PDF
FR Doc. 96-422 Standard for the Flammability of Children's Sleepwear: Sizes 0 Through 6X
[Federal Register Volume 61, Number 10 (Tuesday, January 16, 1996)]
[Rules and Regulations]
[Pages 1115-1116]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-422]
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CONSUMER PRODUCT SAFETY COMMISSION
16 CFR Part 1615
Standard for the Flammability of Children's Sleepwear: Sizes 0
Through 6X
AGENCY: Consumer Product Safety Commission.
ACTION: Revocation of rules.
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SUMMARY: The Commission revokes rules prescribing requirements for
labeling, advertising, and retail display of children's sleepwear in
sizes 0 through 6X manufactured between July 29, 1972, and July 29,
1973. The Commission is revoking these rules because no children's
sleepwear offered for sale now or in the future is or will be subject
to the rules' requirements.
EFFECTIVE DATE: January 16, 1996.
FOR FURTHER INFORMATION CONTACT: Allen F. Brauninger, Attorney, Office
of the General Counsel, Consumer Product Safety Commission, Washington,
DC 20207; telephone (301) 504-0980, extension 2216.
SUPPLEMENTARY INFORMATION:
A. Background
1. The Flammability Standard
In 1971, the Department of Commerce (DOC) issued the Standard for
the Flammability of Children's Sleepwear: Sizes 0 Through 6X under the
authority of the Flammable Fabrics Act (FFA) (15 U.S.C. 1193). In 1972,
DOC amended that standard. See the Federal Register notices of July 29,
1971 (36 FR 14062), and July 21, 1972 (37 FR 14624). The standard is
codified at 16 CFR Part 1615, Subpart A, and prescribes a flammability
test for children's sleepwear garments and fabrics intended for use in
those garments to protect children from unreasonable risks of burn
deaths and injuries.
2. Labeling Requirements
The amended flammability standard became effective on July 29,
1972. However, the standard allowed the manufacture of noncomplying
sleepwear for one year after the standard's effective date, provided
that such garments were labeled with the following statement:
``Flammable (Does Not Meet U.S. Department of Commerce Standard DOC FF
3-71). Should not be worn near sources of fire.'' 16 CFR 1615.5(b). All
children's sleepwear in sizes 0 through 6X manufactured after July 29,
1973, must comply with the standard.
In 1972, Congress enacted the Consumer Product Safety Act (CPSA)
[[Page 1116]]
(15 U.S.C. 2051 et seq.), which established the Consumer Product Safety
Commission. Section 30(b) of the CPSA (15 U.S.C. 2079(b)) transferred
to the Commission the authority formerly exercised by DOC and other
agencies under the FFA.
In 1974, the Commission issued regulations for the labeling and
advertising of children's sleepwear in sizes 0 through 6X. 16 CFR Part
1615, Subpart B. See the Federal Register notice of February 7, 1974
(39 FR 4852). These regulations required noncomplying children's
sleepwear manufactured between July 29, 1972, and July 29, 1973, to be
labeled with the statement ``Flammable (Does Not Meet U.S. Department
of Commerce Standard DOC FF 3-71). Should not be worn near sources of
fire.'' 16 CFR 1615.31(b)(3). This is the same statement required by
section 1615.5(b) of the standard.
3. Advertising and Retail Display Requirements
The regulations issued in 1974 also required the labeling statement
to be included in direct mail advertisements and catalogs for
noncomplying children's sleepwear manufactured between July 29, 1972,
and July 29, 1973. 16 CFR 1615.31(c).
In 1974, the Commission amended the regulations by issuing
additional requirements for labeling and requirements for recordkeeping
and retail display of sleepwear in sizes 0 through 6X. See the Federal
Register notice of April 14, 1975 (40 FR 16654). The Commission
required any person who sold noncomplying sleepwear at retail to
segregate it from complying sleepwear and to identify noncomplying
sleepwear in sizes 0 through 6X by a sign stating: ``Flammable. Does
Not Meet Standard for the Flammability of Children's Sleepwear (DOC 3-
71).'' 16 CFR 1615.31(d). Complying sleepwear in sizes 0 through 6X
sold at the same location as noncomplying sleepwear was required to be
identified by a sign stating ``Flame Resistant. Complies With Standard
for Flammability of Children's Sleepwear.'' Id.
B. Revocation
Noncomplying sleepwear in sizes 0 through 6X has not been legally
manufactured since July 29, 1973. Noncomplying sleepwear subject to the
labeling, advertising, and retail display requirements described above
is not now offered for sale and will not be offered for sale in the
future. For this reason, the Commission is revoking (i) the labeling
requirements in section 1615.5(b) of the standard and in section
1615.31(b)(3) of the enforcement regulations, (ii) the requirements for
advertising of noncomplying sleepwear in section 1615.31(c) of the
enforcement regulations, and (iii) the requirements for retail display
of noncomplying and complying sleepwear in section 1615.31(d) of those
regulations.
Generally, the Administrative Procedure Act (APA) (5 U.S.C. 553)
requires agencies to publish a notice of proposed rulemaking and
provide opportunity for public comment before issuing or revoking a
regulation. However, the APA provides at 5 U.S.C. 553(b)(B) that the
requirement for a notice of proposed rulemaking is not applicable when
the agency finds for good cause that notice of proposed rulemaking and
public participation are ``impracticable, unnecessary, or contrary to
the public interest.''
The Commission finds for good cause that notice of proposed
rulemaking and public participation are unnecessary because no
sleepwear in sizes 0 through 6X offered for sale now or that will be
offered for sale in the future is subject to the requirements of 16 CFR
sections 1615.5(b), 1615.31(b)(3), 1615.31(c), or 1615.31(d). The rules
being revoked have no effect on the rights or duties of any persons who
manufacture, sell, or purchase sleepwear in sizes 0 through 6X.
Providing notice of proposed rulemaking and opportunity for submission
of written comments on the proposal would be a meaningless procedure in
this case.
The APA also requires at 5 U.S.C. 553(d) that a substantive rule
must be published at least 30 days before its effective date unless the
agency finds for good cause that such delay is not needed. Again,
because no sleepwear in sizes 0 through 6X offered for sale now or in
the future is or will be subject to the rules being revoked, the
Commission finds for good cause that a delayed effective date is
unnecessary. Consequently, this revocation shall become effective
immediately.
C. Conclusion
Under the authority of section 553 of the Administrative Procedure
Act and sections 4 and 5 of the Flammable Fabrics Act, the Commission
hereby amends title 16 of the Code of Federal Regulations, Chapter II,
Subchapter D, Part 1615 as follows:
PART 1615--[AMENDED]
Subpart A--[Amended]
1. The authority for Part 1615, Subpart A, continues to read as
follows:
Authority: Sec. 4, 67 Stat. 112, as amended, 81 Stat. 569-70; 15
U.S.C. 1193.
Sec. 1615.5 [Removed and reserved]
2. Section 1615.5(b) is removed and reserved.
Subpart B--[Amended]
3. The authority for Part 1615, Subpart B, continues to read as
follows:
Authority: Sec. 5, 67 Stat. 112, as amended, 81 Stat. 570; 15
U.S.C. 1194.
Sec. 1615.31 [Removed and reserved]
4. Sections 1615.31(b)(3), (c), and (d) are removed and reserved.
(5 U.S.C. 553; 15 U.S.C. 1193, 1194)
Dated: December 15, 1995.
Sadye E. Dunn,
Secretary, Consumer Product Safety Commission.
[FR Doc. 96-422 Filed 1-11-96; 2:00 pm]
BILLING CODE 6355-01-P
Complete official Federal Register PDF
FR Doc. 96-421 Standard for the Flammability of Children's Sleepwear: Sizes 7 Through 14
[Federal Register Volume 61, Number 10 (Tuesday, January 16, 1996)]
[Rules and Regulations]
[Pages 1116-1117]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-421]
-----------------------------------------------------------------------
CONSUMER PRODUCT SAFETY COMMISSION
16 CFR Part 1616
Standard for the Flammability of Children's Sleepwear: Sizes 7
Through 14
AGENCY: Consumer Product Safety Commission.
ACTION: Revocation of rules.
-----------------------------------------------------------------------
SUMMARY: The Commission revokes rules prescribing requirements for
labeling and retail display of children's sleepwear in sizes 7 through
14 manufactured between May 1, 1975, and May 1, 1978. The Commission is
revoking these rules because no items of children's sleepwear offered
for sale now or in the future is or will be subject to the rules'
requirements.
EFFECTIVE DATE: January 16, 1996.
FOR FURTHER INFORMATION CONTACT: Allen F. Brauninger, Attorney, Office
of the General Counsel, Consumer Product Safety Commission, Washington,
DC 20207; telephone (301) 504-0980, extension 2216.
SUPPLEMENTARY INFORMATION:
A. Background
1. Flammability Standard
In 1974, the Consumer Product Safety Commission issued the Standard
for the Flammability of Children's Sleepwear: Sizes 7 Through 14 under
the authority of the Flammable Fabrics Act (FFA) (15 U.S.C. 1193). See
the Federal Register notice of May 1, 1974 (39 FR 15210). The standard
is codified at 16 CFR Part 1616, Subpart A, and prescribes a
flammability test for children's sleepwear garments and fabrics
intended for use in those garments to protect children from
unreasonable risks of burn deaths and injuries.
[[Page 1117]]
2. Labeling Requirements
The flammability standard became effective on May 1, 1975, and is
applicable to sleepwear in sizes 7 through 14 manufactured after that
date. Sleepwear in sizes 7 through 14 manufactured before the effective
date of the standard is not subject to the standard, and could be sold
after May 1, 1975, without violating the standard or the FFA. To help
consumers identify sleepwear in sizes 7 through 14 manufactured to
comply with the standard, the Commission required complying sleepwear
in sizes 7 through 14 manufactured between May 1, 1975, and May 1,
1978, to be labeled with the statement: ``Flame-resistant, U.S.
Standard FF 5-74.'' 16 CFR 1616.6(b).
In 1975, the Commission issued regulations for labeling,
recordkeeping, and retail display of children's sleepwear in sizes 7
through 14. 16 CFR Part 1616, Subpart B. See the Federal Register
notice of April 1, 1975 (40 FR 14584). These regulations required
complying sleepwear in sizes 7 through 14 manufactured between May 1,
1975, and May 1, 1978 to be labeled with the statement ``Flame-
resistant. U.S. Standard FF 5-74.'' 16 CFR 1616.31(b)(8). This is the
same statement required by section 1616.6(b) of the standard.
3. Requirements for Retail Display
The regulations issued in 1975 also included a requirement to
segregate complying and noncomplying sleepwear offered for sale at
retail stores. The purpose of this requirement was to help consumers
distinguish noncomplying sleepwear manufactured before May 1, 1975,
from complying sleepwear manufactured after that date.
The Commission required any person who sold noncomplying sleepwear
in sizes 7 through 14 to physically segregate it from complying
sleepwear in those sizes. 16 CFR 1616.31(c). The Commission also
required complying sleepwear in sizes 7 through 14 sold at the same
location as noncomplying sleepwear to be identified by a sign stating:
``Flame resistant. Complies with the Standard for the Flammability of
Children's Sleepwear (FF 5-74).'' Noncomplying sleepwear in those sizes
was required to be identified by a sign stating: ``Flammable. Does Not
Meet Standard for the Flammability of Children's Sleepwear (FF 5-74).''
Id.
B. Revocation
Since May 1, 1975, all sleepwear in sizes 7 through 14 must be
manufactured to comply with the standard. Noncomplying sleepwear in
sizes 7 through 14 has not been legally manufactured since that date.
The labeling and retail display requirements described above do not
apply to sleepwear sold today or that will be sold in the future.
Accordingly, the Commission is revoking (i) the labeling requirements
in section 1616.6(b) of the standard and in section 1616.31(b)(8) of
the enforcement regulations, and (ii) the requirements for retail
display of complying and noncomplying sleepwear in section 1616.31(c)
of those regulations.
Generally, the Administrative Procedure Act (APA) (5 U.S.C. 553)
requires agencies to publish a notice of proposed rulemaking and
provide opportunity for public comment before issuing or revoking a
regulation. However, the APA provides at 5 U.S.C. 553(b)(B) that the
requirement for a notice of proposed rulemaking is not applicable when
the agency finds for good cause that notice of proposed rulemaking and
public participation are ``impracticable, unnecessary, or contrary to
the public interest.''
The Commission finds for good cause that notice of proposed
rulemaking and public participation are unnecessary because no
sleepwear in sizes 7 through 14 offered for sale now or that will be
offered for sale in the future is subject to the requirements of 16 CFR
1616.6(b), 1616.31(b)(8), or 1616.31(c). The rules being revoked have
no effect on the rights or duties of any persons who manufacture, sell,
or purchase sleepwear in sizes 7 through 14. Providing notice of
proposed rulemaking and opportunity for submission of written comments
on the proposal would be a meaningless procedure in this case.
The APA also requires at 5 U.S.C. 553(d) that a substantive rule
must be published at least 30 days before its effective date unless the
agency finds for good cause that such delay is not needed. Again,
because no sleepwear in sizes 7 through 14 offered for sale now or in
the future is subject to the rules being revoked, the Commission finds
for good cause that a delayed effective date is unnecessary.
Consequently, this revocation shall become effective immediately.
C. Conclusion
Under the authority of section 553 of the Administrative Procedure
Act and sections 4 and 5 of the Flammable Fabrics Act, the Commission
hereby amends title 16 of the Code of Federal Regulations, Chapter II,
Subchapter D, Part 1616 to read as follows:
PART 1616--[AMENDED]
Subpart A--[Amended]
1. The authority for Part 1616, Subpart A, continues to read as
follows:
Authority: Sec. 4, 67 Stat. 112, as amended, 81 Stat. 569-70; 15
U.S.C. 1193.
Sec. 1616.6 [Removed and reserved]
2. Section 1616.6(b) is revoked, removed and reserved.
Subpart B--[Amended]
3. The authority for Part 1616, Subpart B, continues to read as
follows:
Authority: Sec. 5, 67 Stat. 112-13, as amended, 81 Stat. 571; 15
U.S.C. 1194.
Sec. 1616.3 [Removed and reserved]
4. Sections 1616.31 (b)(6) and (c) are removed and reserved.
(5 U.S.C. 553; 15 U.S.C. 1193, 1194)
Dated: December 15, 1995.
Sadye E. Dunn,
Secretary, Consumer Product Safety Commission.
[FR Doc. 96-421 Filed 1-11-96; 2:00 pm]
BILLING CODE 6355-01-P
Complete official Federal Register PDF
FR Doc. 96-418 Medical Devices; Reclassification and Exemption From Premarket Notification for Certain Classified Devices
[Federal Register Volume 61, Number 10 (Tuesday, January 16, 1996)]
[Rules and Regulations]
[Pages 1117-1126]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-418]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Parts 862, 866, 868, 870, 872, 874, 876, 878, 880, 882, 884,
886, 888, 890, and 892
[Docket No. 95N-0139]
RIN 0910-AA65
Medical Devices; Reclassification and Exemption From Premarket
Notification for Certain Classified Devices
AGENCY: Food and Drug Administration, HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Food and Drug Administration (FDA) is reclassifying 111
generic types of class II devices into class I based on new information
respecting such devices. FDA is also exempting the 111 generic types of
devices, and 11 already classified generic types of class I devices,
from the requirement of premarket notification, with limitations. For
the exempted devices, FDA has determined that manufacturers'
submissions of premarket notifications are unnecessary for the
protection of the public health and that the agency's review of such
submissions will not advance its public health mission. The exemptions
allow
[[Page 1118]]
the agency to make better use of its resources and thus better serve
the public. These devices will remain subject to current good
manufacturing practice (CGMP) regulations and other general controls.
This rulemaking is part of the President's and Vice President's
Reinventing Government effort.
DATES: Effective February 15, 1996. Beginning on February 15, 1996, all
device manufacturers who have 510(k) submissions pending FDA review for
devices falling within a generic category which is subject to this
rule, will receive a letter stating that the device is exempt from the
premarket notification requirements of the act.
FOR FURTHER INFORMATION CONTACT: Melpomeni K. Jeffries, Center for
Devices and Radiological Health (HFZ-404), Food and Drug
Administration, 9200 Corporate Blvd., Rockville, MD 20850, 301-594-
2186.
SUPPLEMENTARY INFORMATION:
I. Background
In the Federal Register of July 28, 1995 (60 FR 38902), FDA issued
a proposed rule to reclassify 112 generic types of class II devices
into class I based on new information respecting such devices and to
exempt the 112 generic types of devices, and 12 already classified
generic types of class I devices, from the requirement of premarket
notification, with limitations. Interested persons were given until
October 11, 1995, to comment on the proposed rule.
II. Comments
During the comment period, FDA received three comments requesting
that various devices be added to the list of devices that the agency
was proposing to reclassify into class I and/or exempt from the
requirement of premarket notification. FDA is considering these
comments and will address them in a future issue of the Federal
Register.
FDA also received a comment stating that the proposed
reclassification and exemption for endoscope and accessories (21 CFR
876.1500) was too narrow. According to this comment, the
reclassification and exemption for endoscope and accessories should be
expanded to include additional endoscope accessories which the comment
felt meets the reclassification and exemption criteria. FDA is
finalizing the endoscope and accessories reclassification and exemption
as proposed. However, FDA is considering expanding the reclassification
and exemption for endoscope and accessories to include additional
endoscope accessories and FDA will address this device in a future
issue of the Federal Register.
FDA received three comments questioning the appropriateness of the
proposed reclassification and exemption for scented or scented
deodorized menstrual pads (21 CFR 884.5425) and the proposed exemption
for unscented menstrual pads (21 CFR 884.5435). All three comments
requested that the ``made from cotton or rayon'' limitation placed upon
the proposed reclassification into class I and the exemption from the
requirement of premarket notification be revised. In addition, two of
the comments questioned the proposed requirements for safety testing.
FDA is deferring action on these two devices in order to review these
comments more closely and to reevaluate whether the devices should be
reclassified and/or exempted from the requirement of premarket
notification, with limitations. The agency will address these devices
in a future issue of the Federal Register.
III. Conclusion
FDA received no comments opposing the reclassification into class I
of 111 of the 112 generic types of devices included in the proposed
rule. Moreover, the agency did not receive comments opposing the
proposed exemption from the requirements of premarket notification for
111 of these 112 generic types of devices, and 11 already classified
generic types of class I devices. For 111 of the 112 devices proposed
for reclassification into class I, the agency has concluded, based on
new information respecting such devices as described in the proposed
rule, that general controls will provide reasonable assurance of the
safety and effectiveness of these devices. For 122 of the 124 devices
for which exemptions have been proposed (including the 111 device types
being reclassified), FDA has concluded that manufacturers' submissions
of premarket notifications are unnecessary for the protection of the
public health and that the agency's review of such submissions will not
advance its public health mission. Thus, FDA is finalizing the
reclassification of 111 devices and the exemption from premarket
notification for 122 devices, including the 111 devices being
reclassified and 11 of the devices already classified in class I. All
of these devices remain subject to CGMP requirements and other general
controls under the statute.
IV. Environmental Impact
The agency has determined under 21 CFR 25.24(e)(2) 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 or an environmental impact statement is
required.
V. Analysis of Impacts
FDA has examined the impacts of the final rule under Executive
Order 12866 and the Regulatory Flexibility Act (Pub. L. 96-354).
Executive Order 12866 directs agencies to assess all costs and benefits
of available regulatory alternatives and, when regulation is necessary,
to select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity). The agency believes that
this final rule is consistent with the regulatory philosophy and
principles identified in the Executive Order. In addition, the final
rule is not a significant regulatory action as defined by the Executive
Order and so is not subject to review under the Executive Order.
The Regulatory Flexibility Act requires agencies to analyze
regulatory options that would minimize any significant impact of a rule
on small entities. Because this final rule would reduce a regulatory
burden by exempting manufacturers of devices subject to the rule from
the requirements of premarket notification, the agency certifies that
the final rule will not have a significant economic impact on a
substantial number of small entities. Therefore, under the Regulatory
Flexibility Act, no further analysis is required.
List of Subjects
21 CFR Parts 862, 868, 870, 872, 874, 876, 878, 880, 882, 884, 888, and
890
Medical devices.
21 CFR Part 866
Biologics, Laboratories, Medical devices.
21 CFR Part 886
Medical devices, Ophthalmic goods and services.
21 CFR Part 892
Medical devices, Radiation protection, X-rays.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, 21 CFR parts
862, 866, 868, 870, 872, 874, 876, 878, 880, 882, 884, 886, 888, 890,
and 892 are amended as follows:
[[Page 1119]]
PART 862--CLINICAL CHEMISTRY AND CLINICAL TOXICOLOGY DEVICES
1. The authority citation for 21 CFR part 862 continues to read as
follows:
Authority: Secs. 501, 510, 513, 515, 520, 701 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 351, 360, 360c, 360e, 360j,
371).
2. Section 862.2230 is amended by revising paragraph (b) to read as
follows:
Sec. 862.2230- Chromatographic separation material for clinical use.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
PART 866--IMMUNOLOGY AND MICROBIOLOGY DEVICES
3. The authority citation for 21 CFR part 866 continues to read as
follows:
Authority: Secs. 501, 510, 513, 515, 520, 701 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 351, 360, 360c, 360e, 360j,
371).
4. Section 866.2160 is amended by revising paragraph (b) to read as
follows:
Sec. 866.2160- Coagulase plasma.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
5. Section 866.3720 is amended by revising paragraph (b) to read as
follows:
Sec. 866.3720- Streptococcus spp. exoenzyme reagents.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
6. Section 866.5520 is amended by revising paragraph (b) to read as
follows:
Sec. 866.5520- Immunoglobulin G (Fab fragment specific) immunological
test system.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
7. Section 866.5530 is amended by revising paragraph (b) to read as
follows:
Sec. 866.5530- Immunoglobulin G (Fc fragment specific) immunological
test system.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
8. Section 866.5860 is amended by revising paragraph (b) to read as
follows:
Sec. 866.5860- Total spinal fluid immunological test system.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
PART 868--ANESTHESIOLOGY DEVICES
9. The authority citation for 21 CFR part 868 continues to read as
follows:
Authority: Secs. 501, 510, 513, 515, 520, 701 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 351, 360, 360c, 360e, 360j,
371).
10. Section 868.1100 is amended by revising paragraph (b) to read
as follows:
Sec. 868.1100- Arterial blood sampling kit.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
11. Section 868.1575 is amended by revising paragraph (b) to read
as follows:
Sec. 868.1575- Gas collection vessel.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
12. Section 868.1870 is amended by revising paragraph (b) to read
as follows:
Sec. 868.1870- Gas volume calibrator.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
13. Section 868.1975 is amended by revising paragraph (b) to read
as follows:
Sec. 868.1975- Water vapor analyzer.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
14. Section 868.2300 is amended by revising paragraph (b) to read
as follows:
Sec. 868.2300- Bourdon gauge flowmeter.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
15. Section 868.2320 is amended by revising paragraph (b) to read
as follows:
Sec. 868.2320- Uncompensated thorpe tube flowmeter.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
16. Section 868.2340 is amended by revising paragraph (b) to read
as follows:
Sec. 868.2340- Compensated thorpe tube flowmeter.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
17. Section 868.2350 is amended by revising paragraph (b) to read
as follows:
Sec. 868.2350- Gas calibration flowmeter.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
18. Section 868.2610 is amended by revising paragraph (b) to read
as follows:
Sec. 868.2610- Gas pressure gauge.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
19. Section 868.2620 is amended by revising paragraph (b) to read
as follows:
Sec. 868.2620- Gas pressure calibrator.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
20. Section 868.2700 is amended by revising paragraph (b) to read
as follows:
Sec. 868.2700- Pressure regulator.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
21. Section 868.2875 is amended by revising paragraph (b) to read
as follows:
Sec. 868.2875- Differential pressure transducer.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
22. Section 868.2885 is amended by revising paragraph (b) to read
as follows:
Sec. 868.2885- Gas flow transducer.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
23. Section 868.2900 is amended by revising paragraph (b) to read
as follows:
[[Page 1120]]
Sec. 868.2900- Gas pressure transducer.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
24. Section 868.5100 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5100- Nasopharyngeal airway.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
25. Section 868.5110 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5110- Oropharyngeal airway.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
26. Section 868.5240 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5240- Anesthesia breathing circuit.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
27. Section 868.5300 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5300- Carbon dioxide absorbent.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
28. Section 868.5310 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5310- Carbon dioxide absorber.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
29. Section 868.5320 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5320- Reservoir bag.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
30. Section 868.5375 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5375- Heat and moisture condenser (artificial nose).
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
31. Section 868.5460 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5460- Therapeutic humidifier for home use.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
32. Section 868.5530 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5530- Flexible laryngoscope.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
33. Section 868.5540 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5540- Rigid laryngoscope.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
34. Section 868.5550 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5550- Anesthetic gas mask.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
35. Section 868.5570 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5570- Nonrebreathing mask.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
36. Section 868.5580 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5580- Oxygen mask.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
37. Section 868.5590 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5590- Scavenging mask.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
38. Section 868.5600 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5600- Venturi mask.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
39. Section 868.5770 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5770- Tracheal tube fixation device.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
40. Section 868.5780 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5780- Tube introduction forceps.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
41. Section 868.5790 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5790- Tracheal tube stylet.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
42. Section 868.5810 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5810- Airway connector.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
43. Section 868.5820 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5820- Dental protector.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
44. Section 868.5860 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5860- Pressure tubing and accessories.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
45. Section 868.5975 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5975- Ventilator tubing.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
46. Section 868.5995 is amended by revising paragraph (b) to read
as follows:
Sec. 868.5995- Tee drain (water trap).
* * * * *
[[Page 1121]]
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
47. Section 868.6400 is amended by revising paragraph (b) to read
as follows:
Sec. 868.6400- Calibration gas.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
48. Section 868.6820 is amended by revising paragraph (b) to read
as follows:
Sec. 868.6820- Patient position support.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
49. Section 868.6885 is amended by revising paragraph (b) to read
as follows:
Sec. 868.6885- Medical gas yoke assembly.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
PART 870--CARDIOVASCULAR DEVICES
50. The authority citation for 21 CFR part 870 continues to read as
follows:
Authority: Secs. 501, 510, 513, 515, 520, 701 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 351, 360, 360c, 360e, 360j,
371).
51. Section 870.2390 is amended by revising paragraph (b) to read
as follows:
Sec. 870.2390- Phonocardiograph.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
52. Section 870.2600 is amended by revising paragraph (b) to read
as follows:
Sec. 870.2600- Signal isolation system.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
53. Section 870.2620 is amended by revising paragraph (b) to read
as follows:
Sec. 870.2620- Line isolation monitor.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
54. Section 870.2640 is amended by revising paragraph (b) to read
as follows:
Sec. 870.2640- Portable leakage current alarm.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
55. Section 870.2810 is amended by revising paragraph (b) to read
as follows:
Sec. 870.2810- Paper chart recorder.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
56. Section 870.3650 is amended by revising paragraph (b) to read
as follows:
Sec. 870.3650- Pacemaker polymeric mesh bag.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
57. Section 870.3670 is amended by revising paragraph (b) to read
as follows:
Sec. 870.3670- Pacemaker charger.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
58. Section 870.3690 is amended by revising paragraph (b) to read
as follows:
Sec. 870.3690- Pacemaker test magnet.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
59. Section 870.3935 is amended by revising paragraph (b) to read
as follows:
Sec. 870.3935- Prosthetic heart valve holder.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
60. Section 870.3945 is amended by revising paragraph (b) to read
as follows:
Sec. 870.3945- Prosthetic heart valve sizer.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
PART 872--DENTAL DEVICES
61. The authority citation for 21 CFR part 872 continues to read as
follows:
Authority: Secs. 501, 510, 513, 515, 520, 701 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 351, 360, 360c, 360e, 360j,
371).
62. Section 872.1840 is amended by revising paragraph (b) to read
as follows:
Sec. 872.1840- Dental X-ray position indicating device.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
63. Section 872.1850 is amended by revising paragraph (b) to read
as follows:
Sec. 872.1850- Lead-lined position indicator.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
64. Section 872.4630 is amended by revising paragraph (b) to read
as follows:
Sec. 872.4630- Dental operating light.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
65. Section 872.6390 is amended by revising paragraph (b) to read
as follows:
Sec. 872.6390- Dental floss.
* * * * *
(b) Classification. Class I. If the device is made of inert
materials and is not coated or impregnated with chemicals intended to
provide a therapeutic benefit or interact with tissues of the oral
cavity, it is exempt from the premarket notification procedures in
Subpart E of Part 807 of this chapter.
PART 874--EAR, NOSE, AND THROAT DEVICES-
66. The authority citation for 21 CFR part 874 continues to read as
follows:
Authority: Secs. 501, 510, 513, 515, 520, 701 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 351, 360, 360c, 360e, 360j,
371).
67. Section 874.1060 is amended by revising paragraph (b) to read
as follows:
Sec. 874.1060- Acoustic chamber for audiometric testing.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
68. Section 874.1080 is amended by revising paragraph (b) to read
as follows:
Sec. 874.1080- Audiometer calibration set
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
[[Page 1122]]
69. Section 874.4140 is amended by revising paragraph (b) to read
as follows:
Sec. 874.4140- Ear, nose, and throat bur.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
70. Section 874.4175 is amended by revising paragraph (b) to read
as follows:
Sec. 874.4175- Nasopharyngeal catheter.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
71. Section 874.4350 is amended by revising paragraph (b) to read
as follows:
Sec. 874.4350- Ear, nose, and throat fiberoptic light source and
carrier.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
72. Section 874.4770 is amended by revising paragraph (b) to read
as follows:
Sec. 874.4770- Otoscope.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter only when used in the external ear canal.
PART 876--GASTROENTEROLOGY-UROLOGY DEVICES
73. The authority citation for 21 CFR part 876 is revised to read
as follows:
Authority: Secs. 501, 510, 513, 515, 520, 522, 701 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 351, 360, 360c,
360e, 360j, 360l, 371).
74. Section 876.1075 is amended by revising paragraph (b) to read
as follows:
Sec. 876.1075- Gastroenterology-urology biopsy instrument.
* * * * *
(b) Classification. (1) Class II (performance standards).
(2) Class I for the biopsy forceps cover and the non-electric
biopsy forceps. The devices subject to this paragraph (b)(2) are exempt
from the premarket notification procedures in subpart E of part 807 of
this chapter.
75. Section 876.1400 is amended by revising paragraph (b) to read
as follows:
Sec. 876.1400- Stomach pH electrode.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
76. Section 876.1500 is amended by revising paragraph (b) to read
as follows:
Sec. 876.1500- Endoscope and accessories.
* * * * *
(b) Classification. (1) Class II (performance standards).
(2) Class I for the photographic accessories for endoscope,
miscellaneous bulb adapter for endoscope, binocular attachment for
endoscope, eyepiece attachment for prescription lens, teaching
attachment, inflation bulb, measuring device for panendoscope,
photographic equipment for physiologic function monitor, special lens
instrument for endoscope, smoke removal tube, rechargeable battery box,
pocket battery box, bite block for endoscope, and cleaning brush for
endoscope. The devices subject to this paragraph (b)(2) are exempt from
the premarket notification procedures in subpart E of part 807 of this
chapter.
77. Section 876.1800 is amended by revising paragraph (b) to read
as follows:
Sec. 876.1800- Urine flow or volume measuring system.
* * * * *
(b) Classification. (1) Class II (performance standards).
(2) Class I for the disposable, nonelectrical urine flow rate
measuring device, and nonelectrical urinometer. The devices subject to
this paragraph (b)(2) are exempt from the premarket notification
procedures in subpart E of part 807 of this chapter.
78. Section 876.4590 is amended by revising paragraph (b) to read
as follows:
Sec. 876.4590- Interlocking urethral sound.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
79. Section 876.4890 is amended by revising paragraph (b) to read
as follows:
Sec. 876.4890- Urological table and accessories.
* * * * *
(b) Classification. (1) Class II (performance standards) for the
electrically powered urological table and accessories.
(2) Class I for the manually powered table and accessories, and for
stirrups for electrically powered table. The device subject to this
paragraph (b)(2) is exempt from the premarket notification procedures
in subpart E of part 807 of this chapter.
80. Section 876.5090 is amended by revising paragraph (b) to read
as follows:
Sec. 876.5090- Suprapubic urological catheter and accessories.
* * * * *
(b) Classification. (1) Class II (performance standards).
(2) Class I for the catheter punch instrument, nondisposable
cannula and trocar, and gastro-urological trocar. The devices subject
to this paragraph (b)(2) are exempt from the premarket notification
procedures in subpart E of part 807 of this chapter.
81. Section 876.5130 is amended by revising paragraph (b) to read
as follows:
Sec. 876.5130- Urological catheter and accessories.
* * * * *
(b) Classification. (1) Class II (performance standards).
(2) Class I for the ureteral stylet (guidewire), stylet for gastro-
urological catheter, ureteral catheter adapter, ureteral catheter
connector, and ureteral catheter holder. The devices subject to this
paragraph (b)(2) are exempt from the premarket notification procedures
in subpart E of part 807 of this chapter.
82. Section 876.5450 is amended by revising paragraph (b) to read
as follows:
Sec. 876.5450- Rectal dilator.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
83. Section 876.5520 is amended by revising paragraph (b) to read
as follows:
Sec. 876.5520- Urethral dilator.
* * * * *
(b) Classification. (1) Class II (performance standards).
(2) Class I for the urethrometer, urological bougie, filiform and
filiform follower, and metal or plastic urethral sound. The devices
subject to this paragraph (b)(2) are exempt from the premarket
notification procedures in subpart E of part 807 of this chapter.
84. Section 876.5540 is amended by revising paragraphs (b)(3) and
by adding new paragraph (b)(4) to read as follows:
Sec. 876.5540- Blood access device and accessories.
* * * * *
(b) Classification. * * *
(3) Class II (performance standards) for accessories for both the
implanted and the nonimplanted blood access devices not listed in
paragraph (b)(4) of this section.
(4) Class I for the cannula clamp, disconnect forceps, crimp plier,
tube plier, crimp ring, and joint ring, accessories for both the
implanted and nonimplanted blood access device. The devices subject to
this paragraph (b)(4) are exempt from the premarket notification
procedures in subpart E of part 807 of this chapter.
[[Page 1123]]
PART 878--GENERAL AND PLASTIC SURGERY DEVICES
85. The authority citation for 21 CFR part 878 continues to read as
follows:
Authority: Secs. 501, 510, 513, 515, 520, 522, 701 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 351, 360, 360c,
360e, 360j, 360l, 371).
86. Section 878.4450 is amended by revising paragraph (b) to read
as follows:
Sec. 878.4450- Nonabsorbable gauze for internal use.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
87. Section 878.4810 is amended by revising paragraph (b) to read
as follows:
Sec. 878.4810- Laser surgical instrument for use in general and
plastic surgery and in dermatology.
* * * * *
(b) Classification. (1) Class II.
(2) Class I for special laser gas mixtures used as a lasing medium
for this class of lasers. The devices subject to this paragraph (b)(2)
are exempt from the premarket notification procedures in subpart E of
part 807 of this chapter.
88. Section 878.5350 is amended by revising paragraph (b) to read
as follows:
Sec. 878.5350- Needle-type epilator.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
89. Section 878.5910 is amended by revising paragraph (b) to read
as follows:
Sec. 878.5910- Pneumatic tourniquet.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
PART 880--GENERAL HOSPITAL AND PERSONAL USE DEVICES
90. The authority citation for 21 CFR 880 continues to read as
follows:
Authority: Secs. 501, 510, 513, 515, 520, 701 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 351, 360, 360c, 360e, 360j,
371).
91. Section 880.2720 is amended by revising paragraph (b) to read
as follows:
Sec. 880.2720- Patient scale.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
92. Section 880.2900 is amended by revising paragraph (b) to read
as follows:
Sec. 880.2900- Clinical color change thermometer.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
93. Section 880.5560 is amended by revising paragraph (b) to read
as follows:
Sec. 880.5560- Temperature regulated water mattress.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
94. Section 880.6320 is amended by revising paragraph (b) to read
as follows:
Sec. 880.6320- AC-powered medical examination light.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
PART 882--NEUROLOGICAL DEVICES
95. The authority citation for 21 CFR part 882 continues to read as
follows:
Authority: Secs. 501, 510, 513, 515, 520, 701 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 351, 360, 360c, 360e, 360j,
371).
96. Section 882.1410 is amended by revising paragraph (b) to read
as follows:
Sec. 882.1410- Electroencephalograph electrode/lead tester.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
97. Section 882.4325 is amended by revising paragraph (b) to read
as follows:
Sec. 882.4325- Cranial drill handpiece (brace).
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
PART 884--OBSTETRICAL AND GYNECOLOGICAL DEVICES
98. The authority citation for 21 CFR part 884 continues to read as
follows:
Authority: Secs. 501, 510, 513, 515, 520, 701 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 351, 360, 360c, 360e, 360j,
371).
99. Section 884.1550 is revised to read as follows:
Sec. 884.1550- Amniotic fluid sampler (amniocentesis tray).
(a) Identification. The amniotic fluid sampler (amniocentesis tray)
is a collection of devices used to aspirate amniotic fluid from the
amniotic sac via a transabdominal approach. Components of the
amniocenteses tray include a disposable 3 inch 20 gauge needle with
stylet and a 30 cc. syringe, as well as the various sample collection
accessories, such as vials, specimen containers, medium, drapes, etc.
The device is used at 16-18 weeks gestation for antepartum diagnosis of
certain congenital abnormalities or anytime after 24 weeks gestation
when used to assess fetal maturity.
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
100. Section 884.1640 is amended by revising paragraph (b) to read
as follows:
Sec. 884.1640- Culdoscope and accessories.
* * * * *
(b) Classification. (1) Class II (performance standards).-
(2) Class I for culdoscope accessories that are not part of a
specialized instrument or device delivery system; do not have adapters,
connectors, channels, or do not have portals for electrosurgical,
laser, or other power sources. Such culdoscope accessory instruments
include: lens cleaning brush, biopsy brush, clip applier (without
clips), applicator, cannula (without trocar or valves), ligature
carrier/needle holder, clamp/hemostat/grasper, curette, instrument
guide, ligature passing and knotting instrument, suture needle (without
suture), retractor, mechanical (noninflatable), snare, stylet, forceps,
dissector, mechanical (non-inflatable) scissors, and suction/irrigation
probe. The devices subject to this paragraph (b)(2) are exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
101. Section 884.1690 is amended by revising paragraph (b) to read
as follows:
Sec. 884.1690- Hysteroscope and accessories.
* * * * *
(b) Classification. (1) Class II (performance standards).
(2) Class I for hysteroscope accessories that are not part of a
specialized instrument or device delivery system; do not have adapters,
connectors, channels, or do not have portals for electrosurgical,
laser, or other power sources. Such hysteroscope accessory instruments
include: lens cleaning brush, cannula (without trocar or valves),
clamp/hemostat/grasper,
[[Page 1124]]
curette, instrument guide, forceps, dissector, mechanical
(noninflatable), and scissors. The devices subject to this paragraph
(b)(2) are exempt from the premarket notification procedures in subpart
E of part 807 of this chapter.
102. Section 884.1700 is amended by revising paragraph (b) to read
as follows:
Sec. 884.1700- Hysteroscopic insufflator.
* * * * *
(b) Classification. (1) Class II (performance standards).
(2) Class I for tubing and tubing/filter fits which only include
accessory instruments which are not used to effect intrauterine access
e.g. hysteroscopic introducer sheaths, etc.; and single-use tubing kits
used for only intrauterine insufflation. The devices subject to this
paragraph (b)(2) are exempt from the premarket notification procedures
in subpart E of part 807 of this chapter.
103. Section 884.1720 is amended by revising paragraph (b) to read
as follows:
Sec. 884.1720- Gynecologic laparoscope and accessories.
* * * * *
(b) Classification. (1) Class II (performance standards).
(2) Class I for gynecologic laparoscope accessories that are not
part of a specialized instrument or device delivery system, do not have
adapters, connector channels, or do not have portals for
electrosurgical, lasers, or other power sources. Such gynecologic
laparoscope accessory instruments include: the lens cleaning brush,
biopsy brush, clip applier (without clips), applicator, cannula
(without trocar or valves), ligature carrier/needle holder, clamp/
hemostat/grasper, curette, instrument guide, ligature passing and
knotting instrument, suture needle (without suture), retractor,
mechanical (noninflatable), snare, stylet, forceps, dissector,
mechanical (noninflatable), scissors, and suction/irrigation probe. The
devices subject to this paragraph (b)(2) are exempt from the premarket
notification procedures in subpart E of part 807 of this chapter.
104. Section 884.1730 is amended by revising paragraph (b) to read
as follows:
Sec. 884.1730- Laparoscopic insufflator.
* * * * *
(b) Classification. (1) Class II (performance standards).
(2) Class I for tubing and tubing/filter kits which include
accessory instruments which are not used to effect intra-abdominal
access, Verres needles etc.; and single-use tubing kits used for only
intra-abdominal insufflation (pneumoperitoneum). The devices subject to
this paragraph (b)(2) are exempt from the premarket notification
procedures in subpart E of part 807 of this chapter.
105. Section 884.4530 is amended by revising paragraph (b) to read
as follows:
Sec. 884.4530- Obstetric-gynecological specialized manual instrument.
* * * * *
(b) Classification. (1) Class II (performance standards).
(2) Class I for the amniotome, uterine curette, cervical dilator
(fixed-size bougies), cerclage needle, IUD remover, uterine sound, and
gynecological biopsy forceps. The devices subject to this paragraph
(b)(2) are exempt from the premarket notification procedures in subpart
E of part 807 of this chapter.
106. Section 884.5150 is amended by revising paragraph (b) to read
as follows:
Sec. 884.5150- Nonpowered breast pump.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter if the device is using either a bulb or telescoping mechanism
which does not develop more than 250 mm Hg suction, and the device
materials that contact breast or breast milk do not produce
cytotoxicity, irritation, or sensitization effects.
107. Section 884.5900 is amended by revising paragraph (b) to read
as follows:
Sec. 884.5900- Therapeutic vaginal douche apparatus.
* * * * *
(b) Classification. (1) Class II (performance standards).
(2) Class I if the device is operated by gravity feed. Devices
subject to this paragraph (b)(2) are exempt from the premarket
notification procedures in subpart E of part 807 of this chapter.
PART 886--OPHTHALMIC DEVICES
108. The authority citation for 21 CFR 886 continues to read as
follows:
Authority: Secs. 501, 510, 513, 515, 520, 701 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 351, 360, 360c, 360e, 360j,
371).
109. Section 886.1405 is amended by revising paragraph (b) to read
as follows:
Sec. 886.1405- Ophthalmic trial lens set.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
110. Section 886.1750 is amended by revising paragraph (b) to read
as follows:
Sec. 886.1750- Skiascopic rack.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
111. Section 886.1760 is amended by revising paragraph (b) to read
as follows:
Sec. 886.1760- Ophthalmic refractometer.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
112. Section 886.3200 is revised to read as follows:
Sec. 886.3200- Artificial eye.
(a) Identification. An artificial eye is a device resembling the
anterior portion of the eye, usually made of glass or plastic, intended
to be inserted in a patient's eye socket anterior to an orbital
implant, or the eviscerated eyeball, for cosmetic purposes. The device
is not intended to be implanted.
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter if the device is made from the same materials, has the same
chemical composition, and uses the same manufacturing processes as
currently legally marketed devices.
PART 888--ORTHOPEDIC DEVICES
113. The authority citation for 21 CFR part 888 continues to read
as follows:
Authority: Secs. 501, 510, 513, 515, 520, 701 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 351, 360, 360c, 360e, 360j,
371).
114. Section 888.1100 is amended by revising paragraph (b) to read
as follows:
Sec. 888.1100- Arthroscope.
* * * * *
(b) Classification. (1) Class II (performance standards).
(2) Class I for the following manual arthroscopic instruments:
cannulas, currettes, drill guides, forceps, gouges, graspers, knives,
obturators, osteotomes, probes, punches, rasps, retractors, rongeurs,
suture passers, suture knotpushers, suture punches, switching rods, and
trocars. The devices subject to this paragraph (b)(2) are exempt from
the premarket notification procedures in subpart E of part 807 of this
chapter.
115. Section 888.3000 is amended by revising paragraph (b) to read
as follows:
Sec. 888.3000- Bone cap.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
[[Page 1125]]
116. Section 888.5960 is amended by revising paragraph (b) to read
as follows:
Sec. 888.5960- Cast removal instrument.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
PART 890--PHYSICAL MEDICINE DEVICES
117. The authority citation for 21 CFR part 890 continues to read
as follows:
Authority: Secs. 501, 510, 513, 515, 520, 701 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 351, 360, 360c, 360e, 360j,
371).
118. Section 890.1575 is amended by revising paragraph (b) to read
as follows:
Sec. 890.1575- Force-measuring platform.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
119. Section 890.1600 is amended by revising paragraph (b) to read
as follows:
Sec. 890.1600- Intermittent pressure measurement system.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
120. Section 890.1615 is amended by revising paragraph (b) to read
as follows:
Sec. 890.1615- Miniature pressure transducer.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
121. Section 890.3175 is amended by revising paragraph (b) to read
as follows:
Sec. 890.3175- Flotation cushion.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
122. Section 890.3760 is amended by revising paragraph (b) to read
as follows:
Sec. 890.3760- Powered table.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
123. Section 890.5380 is amended by revising paragraph (b) to read
as follows:
Sec. 890.5380- Powered exercise equipment.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
124. Section 890.5410 is amended by revising paragraph (b) to read
as follows:
Sec. 890.5410- Powered finger exerciser.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
125. Section 890.5660 is amended by revising paragraph (b) to read
as follows:
Sec. 890.5660- Therapeutic massager.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
126. Section 890.5925 is amended by revising paragraph (b) to read
as follows:
Sec. 890.5925- Traction accessory.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter. The device is also exempt from the current good manufacturing
practice regulations in part 820 of this chapter, with the exception of
Sec. 820.180, with respect to general requirements concerning records,
and Sec. 820.198, with respect to complaint files.
127. Section 890.5940 is amended by revising paragraph (b) to read
as follows:
Sec. 890.5940- Chilling unit.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
128. Section 890.5950 is amended by revising paragraph (b) to read
as follows:
Sec. 890.5950- Powered heating unit.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
129. Section 890.5975 is amended by revising paragraph (b) to read
as follows:
Sec. 890.5975- Therapeutic vibrator.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
PART 892--RADIOLOGY DEVICES
130. The authority citation for 21 CFR part 892 continues to read
as follows:
Authority: Secs. 501, 510, 513, 515, 520, 701 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 351, 360, 360c, 360e, 360j,
371).
131. Section 892.1700 is amended by revising paragraph (b) to read
as follows:
Sec. 892.1700- Diagnostic X-ray high voltage generator.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
132. Section 892.1760 is amended by revising paragraph (b) to read
as follows:
Sec. 892.1760- Diagnostic X-ray tube housing assembly.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
133. Section 892.1770 is amended by revising paragraph (b) to read
as follows:
Sec. 892.1770- Diagnostic X-ray tube mount.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
134. Section 892.1830 is amended by revising paragraph (b) to read
as follows:
Sec. 892.1830- Radiologic patient cradle.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
135. Section 892.1880 is amended by revising paragraph (b) to read
as follows:
Sec. 892.1880- Wall-mounted radiographic cassette holder.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
136. Section 892.5780 is amended by revising paragraph (b) to read
as follows:
Sec. 892.5780- Light beam patient position indicator.
* * * * *
(b) Classification. Class I. The device is exempt from the
premarket notification procedures in subpart E of part 807 of this
chapter.
137. Section 892.6500 is amended by revising paragraph (b) to read
as follows:
Sec. 892.6500- Personnel protective shield.
* * * * *
(b) Classification. Class I. If the device's labeling specifies the
lead equivalence, it is exempt from the
[[Page 1126]]
premarket notification procedures in subpart E of part 807 of this
chapter.
Dated: January 5, 1996.
William B. Schultz,
Deputy Commissioner for Policy.
[FR Doc. 96-418 Filed 1-11-96; 2:00 pm]
BILLING CODE 4160-01-F
Complete official Federal Register PDF
FR Doc. 96-346 One-Time Extension of Certain Byproduct, Source, and Special Nuclear Materials Licenses
[Federal Register Volume 61, Number 10 (Tuesday, January 16, 1996)]
[Rules and Regulations]
[Pages 1109-1115]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-346]
=======================================================================
-----------------------------------------------------------------------
NUCLEAR REGULATORY COMMISSION
10 CFR Parts 30, 40, and 70
RIN 3150-AF38
One-Time Extension of Certain Byproduct, Source, and Special
Nuclear Materials Licenses
AGENCY: Nuclear Regulatory Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Nuclear Regulatory Commission (NRC) is amending its
regulations to implement, on a one-time basis, a five-year extension of
certain byproduct, source, and special nuclear materials licenses. The
provisions of the licenses under extension provide the same
authorizations and limits on licensee activities as they do now. The
final rule specifies the licenses that are not extended.
EFFECTIVE DATE: February 15, 1996.
FOR FURTHER INFORMATION CONTACT: John M. Pelchat, NRC, Region II, 101
Marietta Street, N.W., Suite 2900, Atlanta, GA 30323, telephone (404)
331-5083; or C. W. Nilsen, Office of Nuclear Regulatory Research, NRC,
Washington, DC 20555, telephone (301) 415-6209.
SUPPLEMENTARY INFORMATION:
Background
The NRC has completed the preliminary phases of an effort to
redesign the process for licensing medical, academic, and industrial
users of byproduct materials as well as some small scope users of
source and special nuclear materials. To make resources available to
expedite the development, design, and testing of the new materials
licensing process, the Commission is extending certain specific
materials licenses (``licenses'') by five years from the current
expiration dates of those licenses. Resources that would have otherwise
been used to renew these licenses will be devoted to the redesign
project. The extension will be a one-time occurrence. The Commission
does not envision that any similar extensions will be granted in the
future.
The extension granted by this rulemaking does not apply to the
licenses for power and non-power reactors, uranium milling and
processing facilities, or fuel production facilities. The extended
licenses are not considered to be the equivalent of a renewed license
because they provide the same authorizations and limits on licensee
activities as are currently applicable to each licensee. Accordingly,
the extended licenses will not be based on nor reference pending
renewal applications, including requests, if any, in those renewal
applications, for NRC approval of changes in current operations. The
frequency of licensee inspections will not change as a result of this
final rule.
The Commission concludes that it may take this action because no
legislative mandate requires that materials licenses have a five-year
term. Many years ago, materials licenses were issued for two-year
periods. As the uses of radioactive materials became more stable and
predictable, the typical duration of licenses was changed to five
years. The Commission has concluded that certain specific materials
licenses may be extended once by rule for an additional five years
beyond their stated expiration date without the normal renewal review
and without adverse effect on public health and safety. The
Commission's conclusion is based upon three factors. First, certain
specific licenses for which the Commission believes that a renewal
review should not be delayed five years will not be affected by this
rule. Licenses that may present, in the Commission's view, a greater
potential risk from a health and safety standpoint will not be
generically
[[Page 1110]]
extended by this rulemaking. Second, the extended licenses will not
change the authorized activities nor regulatory requirements. Third,
the NRC will continue its normal inspection program of licensed
activities, including inspections of those licenses that will be
extended by this final rule. Significant inspection findings will be
resolved through the issuance of Notices of Violations that require
written responses describing corrective actions, Confirmatory Action
Letters (CALs), or Orders that would modify, suspend, or revoke the
license and that would impose civil penalties, as appropriate.
Accordingly, the Commission has concluded that there would be
reasonable assurance of public health and safety under this rule.
Summary of Requirements and Analysis of Public Comments
The NRC is amending Parts 30, 40, and 70 of its regulations to
extend, on a one-time basis, certain byproduct, source, and special
nuclear materials licenses. These regulations specify the licenses that
are not extended by this rulemaking. The NRC received 28 letters of
public comment: twenty-one from licensees; one from an Agreement State;
none from non-Agreement States; two from consulting firms; two from
private citizens; and two from trade associations. Eighteen commenters
supported the proposed rule and one was opposed. Eight commenters
supported the rulemaking to varying degrees, but offered suggestions
for modification of the rules. One comment addressed issues to be
considered by the NRC should the rulemaking be implemented, without
stating support or opposition for the proposed rule.
Commenters supporting the proposed rule cited the cost savings to
taxpayers, affected licensees, and the general public. Some of these
commenters also supported the redesign effort of the materials
licensing process.
One commenter supported the proposed rule and suggested that the
rulemaking be amended to include the Quality Assurance program
requirements in 10 CFR Part 71. The suggested amendment is outside of
the scope of the proposed rulemaking.
Another commenter supported the proposed rule but noted there was
no mention of specific cost reductions to the licensee as a result of
this extension and stated that this point should be addressed. The NRC
recognizes that, on a one-time basis, many licensees will save the
renewal fee required by 10 CFR 170.31 as well as the costs associated
with the preparation of the renewal application. The NRC staff did not
attempt to quantify these costs, recognizing the significant
variability among licensees as to the effort required to prepare
license renewal applications. In addition, the NRC staff believes these
savings will be offset to some extent by the need for those licensees
to prepare and submit license amendment requests (and associated fees)
to request necessary changes in their programs that may have been
included in the license renewal application.
Another commenter supported the proposed rulemaking but also
suggested that the NRC reevaluate its fee structure. The fees structure
and questions relating to the assessment of fees are outside the scope
of this rulemaking.
Another commenter expressed general support for the effort to
redesign the licensing process and stated that the renewal process was
redundant, and served no useful purpose that could not otherwise be
achieved more effectively through the license amendment and inspection
processes. The commenter urged the NRC to reconsider the proposed rule
and remove the license renewal process from the regulations. The issue
of deleting the license renewal process from the regulations is beyond
the scope of this rulemaking. However, this comment will be considered
as part of the Office of Nuclear Material Safety and Safeguards'
(NMSS') initiative to review the appropriate duration of the licenses
and the certificates that it issues. In addition, for uranium recovery
facilities, the Commission staff is currently analyzing the possibility
of extending the duration of licenses for that class of licensees. Once
the staff has completed its analysis and consulted with the Commission,
the NRC will determine what, if any action it will take in extending
the duration of uranium recovery facility licenses. This final rule
extends certain materials licenses on a one-time basis and NMSS'
consideration of the appropriate duration of materials licenses is a
separate issue being considered by the NRC.
A commenter who objected to the proposed rulemaking stated that the
renewal process is valuable because it forces licensees to examine
their programs and bring records up to date. The commenter also noted
that the proposed rulemaking was indicative of the NRC's `` * * *
arrogant, deficient attitude toward safety.'' In response to the
comment, the NRC staff notes that 10 CFR 20.1101 requires all specific
licensees to develop, document, and implement a radiation protection
program commensurate with the scope and extent of licensed activities.
The regulation further requires that licensees periodically (at least
annually) review the content and the implementation of the radiation
protection program. The Commission believes that this requirement, the
criteria set out in this rulemaking, and the NRC's ongoing inspection
program are sufficient to ensure that licensees develop and implement
radiation programs and periodically review them to assess the program's
effectiveness. It must also be recognized that the NRC is not
eliminating the need to file for a renewal but is only changing the
time frame for renewal of licenses affected by this rulemaking.
An Agreement State submitted a comment concerning provisions that
the NRC should have available to ensure that persons could determine
that a specific license was extended as a result of this rulemaking.
The NRC staff is developing procedures to implement this rule,
including providing prompt notification to licensees whose licenses
have been extended by the final rule.
The Commission also sought public comments on the issue of license
duration. Ten of the persons who commented on the one-time extension
also provided specific comments regarding the appropriate duration of
material licenses. Several commenters suggested that a license term of
ten years would be appropriate. One commenter specifically suggested
that medical licenses be issued for seven years. Three commenters
suggested licenses have a term of twenty years. Another commenter
suggested that a license be initially issued for two to four years, to
allow a new licensee to demonstrate its stability. The terms of
subsequent license renewals could then be extended for up to twenty
years. The NRC will consider these comments in the development of its
policy concerning the duration of material licenses.
Other comments addressed specific components of the proposed rule.
Those comments and their resolutions are discussed below and, to the
extent possible, are arranged under the identified section of the rule
to which they are related. For the purpose of clarity, the common
elements of the comment discussion will be grouped by the nature of the
requirements, because the new regulatory requirements in 10 CFR Parts
30, 40, and 70 closely parallel each other.
Description of Rulemaking and Analysis of Specific Public Comments
The final rule was based on and mainly derived from the current
provisions in 10 CFR Parts 30, 40, and 70. Parts 30, 40, and 70 contain
the
[[Page 1111]]
general requirements used by the Commission to license the possession
and use of byproduct, source, and special nuclear materials. Specific
sections being added or amended by this final rulemaking include the
following:
10 CFR 30.36(a)(2), 40.42(a)(2), and 70.38(a)(2)
These paragraphs state that each specific license that has an
expiration date after July 1, 1995, has an expiration date that is 5
years after the expiration date stated in the current license, unless
it is specifically excluded by the final amendments contained in this
rule. This extends all licenses, that are not otherwise disqualified by
the regulations, by five years without the requirement for the licensee
to prepare and submit a license renewal application 30 days before the
expiration date in the current license. Licensees holding licenses that
are extended by this rule would not be required to take any action to
renew the license until 30 days before the end of the extension which
will end five years after the date currently specified on the license.
Licensees who hold licenses that are not extended by this rule will
continue to be required to either file for license renewal 30 days
before the expiration date currently specified in the license or comply
with the applicable license termination requirements specified in 10
CFR 30.36, 40.42, and 70.38.
No specific comments were received on these paragraphs.
Paragraphs 30.36(a)(3)(i), 40.42(a)(3)(j), and 70.38(a)(3)(i)
These paragraphs delineate the specific licenses that are not
extended by the final rule because an evaluation or an emergency plan
is required in accordance with 10 CFR 30.32(i), 40.31(j), or 70.22(i),
respectively. This excludes those licenses that require an evaluation
or an emergency plan, because these licenses authorize activities
involving large quantities of unsealed licensed materials that the
Commission believes may pose a significant potential for release of
radioactive materials that may result in potential exposure to the
public and contamination of the environment. Therefore, the Commission
believes that it would be prudent to review these licenses individually
during the renewal process before making a determination to extend
these licenses.
One commenter took exception to the NRC's statements, in the
proposed rule, which it believed implied that its member organizations,
many of whom are ineligible for the one-time extension based on the
size and the scope of their licensed programs and the regulatory
requirement for an emergency plan, pose relatively greater safety
risks. The commenter indicated that it did not believe these licensees
have a significant potential for release of licensed material and
public exposure. The commenter further noted that there have been no
incidents where members of the public received significant exposures
from licensed materials, that the licensees' controls were sufficient
to contain licensed materials, and that maximum credible release
scenarios showed insignificant offsite impacts.
In developing its criteria to disqualify certain material licenses
from the extension, the NRC staff considered its licensees' operations
on a scale of relative hazard. The NRC used previously-established
criteria (i.e., the need to have emergency plans, the need to have
adequate financial assurance to fund decommissioning, etc.) to
determine which licensed operations were relatively more hazardous,
thus deserving closer NRC oversight. The NRC believes that licenses
authorizing possession and use of large quantities of unsealed high-
activity radionuclides pose a greater potential for hazard than do
licenses authorizing use of sealed sources with engineered safety
features or licenses authorizing smaller quantities of lower activity
radionuclides. The NRC did not state or suggest that this group of
licensees has released licensed materials, exposed the public, or
contaminated the environment. The NRC only indicated that the scope of
activities carried out by this group of licensees, using previously
established standards, has the potential for such releases and,
accordingly, should not be generically extended by this rule. The NRC
believes that a licensee possessing sufficient quantities of licensed
materials to be subject to the requirements of 10 CFR 30.32(i),
40.31(j), or 70.22(i) should file renewal applications so the NRC staff
can review the licensee's overall operations before granting an
extended license term.
Another commenter objected to the disqualification for an extension
based on need for an evaluation or an emergency plan as required in 10
CFR 30.32(i), 40.31(j), or 70.22(i). The commenter suggested that the
disqualifier for extension based on the need for contingency planning
be structured similarly to the disqualifier based on the need for
financial assurance. In other words, amend the rule to not extend any
license whose holder is required to provide an evaluation or an
emergency plan ``. . . and who has not submitted such a plan.'' The
commenter indicated that the NRC acceptance of the required evaluation
or emergency plan should be sufficient to allow a license to be
eligible for extension. The commenter alternatively suggested that its
particular situation be evaluated on a case-by-case basis.
The NRC has concluded that licensees required to submit either an
evaluation or an emergency plan are authorized to possess and use
sufficient quantities of licensed materials to warrant closer NRC
oversight to ensure that conditions related to the evaluation have not
changed or that the emergency plan continues to be appropriate and
adequate with regard to the scope of the licensee's activities. The NRC
believes that holders of this type of license should continue to submit
this type of information in renewal applications and that these
licenses should not be subject to the one-time license extension. The
one-time extension of licenses is being pursued through rulemaking,
rather than on a case-by-case basis, so as to free the maximum amount
of NRC resources to revise the current materials licensing process. The
NRC is in the process of reviewing the appropriate duration for
materials licensees. After completing the case-by-case review that will
take place during the renewal process for those licenses not extended
by this rulemaking, the NRC may decide to grant license renewals for
periods exceeding the five-year duration typical under current practice
depending on the results of the ongoing review of license duration.
Paragraphs 30.36(a)(3)(ii), 40.42(a)(3)(ii), and 70.38(a)(3)(ii)
These paragraphs delineate the specific licenses that are not
extended under the final rule because the licenses are subject to the
financial assurance requirements specified in 10 CFR 30.35, 40.36, or
70.25; and either: (a) have not submitted a decommissioning funding
plan or certification of financial assurance for decommissioning; or
(b) have not received written notice as of February 15, 1996 that the
decommissioning funding plan or certification of financial assurance
for decommissioning is acceptable. These licenses authorize possession
of quantities and forms of licensed materials that the Commission
believes pose a potential need for extensive decontamination before
termination of the license and release of decommissioned facilities.
Therefore, the Commission believes that renewals of these licenses
should continue to be reviewed under existing procedures to
[[Page 1112]]
ensure that appropriate resources are available to support
decommissioning activity.
No specific comments were received on these paragraphs.
Paragraphs 30.36(a)(3)(iii), 40.42(a)(3)(iii), and 70.38(a)(3)(iii)
These paragraphs delineate the specific licenses that are not
extended under the final rule because the licenses are listed in the
Site Decommissioning Management Plan (SDMP). Generally, licenses on the
SDMP list are no longer actively using licensed materials. The
Commission believes that it is necessary in the interest of public
health and safety to review the licensee's procedures to ensure proper
evaluation of site remediation activities at facilities where the
licensee's radiation safety program may be inactive or scaled back.
No specific comments were received on these paragraphs.
Paragraphs 30.36(a)(3)(iv), 40.42(a)(3)(iv), and 70.38(a)(3)(iv)
These paragraphs delineate the specific licenses that are not
extended because the issuance, amendment, or renewal of this type of
license is not a categorical exclusion under 10 CFR 51.22(c)(14). This
excludes licenses that include activities requiring the preparation of
an environmental assessment or environmental impact statement, before
the Commission's specific authorization of that activity, from the
five-year extension. Generally, these licenses authorize the release of
licensed materials to the environment under highly controlled
conditions in conjunction with scientific research activities. The
Commission has concluded that it is important to continue reviewing
licenses that may have a greater potential for adversely impacting the
environment before making decisions on to whether to grant these
licensees' licenses with longer durations.
No specific comments were received on these paragraphs.
Paragraphs 30.36(a)(3)(v), 40.42(a)(3)(v), and 70.38(a)(3)(v)
These paragraphs delineate the specific licenses that are not
extended under the final rule because the holders of these specific
licenses have not had a prior NRC inspection as of February 15, 1996.
This ensures that the Commission has verified the effectiveness of the
licensees' radiation safety programs by onsite inspections of the
licensees' equipment and procedures used to safely possess and use
licensed materials, as a precondition to allowing five-year extensions
of licenses, under these amendments to the regulations.
No specific comments were received on these paragraphs.
Paragraphs 30.36(a)(3)(vi), 40.42(a)(3)(vi), and 70.38(a)(3)(vi)
These paragraphs delineate the specific licenses that are not
extended under the final rule if, as the result of the most recent
inspections, the holders of these specific licenses have been:
(a) Cited for a Severity Level I, II, or III violation;
(b) Subject to an Order issued by the NRC; or
(c) Subject to a Confirmatory Action Letter (CAL) issued by the
NRC.
This excludes licenses from the five-year extensions, after the NRC
has identified significant safety concerns or other regulatory issues.
Typically, these licensees are reinspected within six months, to verify
that effective corrective actions have been taken and to ensure that
the licensees' facilities, equipment, and procedures have been
adequately modified to prevent a recurrence of the identified
violations. The Commission expects its licensees to operate in strict
compliance with its regulatory requirements. Therefore, the Commission
believes that it is prudent to review license renewal applications of
licensees with recent safety-significant findings so that the NRC can
verify that the licensees have adequate personnel, facilities, and
procedures to enable them to operate at the expected level of
compliance.
A commenter objected to use of the issuance of a CAL as a
disqualifier from the one-time license extension. The NRC chose to
disqualify from the one-time extension those licenses that have
exhibited significantly declining or poor performance with regard to
compliance with the NRC regulations as documented at the time of the
most recent NRC inspection. One such indicator of significantly
declining or poor performance is the issuance of a CAL. NRC recognizes
that licensees receiving a CAL usually take the necessary corrective
actions. The NRC expects that licensees will take timely and effective
corrective actions. CALs specifically state that the failure to do so
may result in the NRC's issuance of an order modifying, suspending, or
revoking the subject license. The NRC does not believe that it should
extend these licenses without having first verified, by direct
observation as well as other evaluations, during follow-up inspections,
that the licensees' corrective actions were, in fact, effective.
Another commenter noted that a modest improvement in program safety
can be expected as a result of this rulemaking because the rule bestows
a tangible, public, and previously unexpected reward on those licensees
that have maintained programs free of significant violations.
Paragraphs 30.36(a)(3)(vii), 40.42(a)(3)(vii), and 70.38(a)(3)(vii)
These paragraphs delineate the specific licenses that are not
extended under the final rule because the Commission intends to
continue to review the submissions of these licensees who have already
submitted applications and paid fees for timely license renewal.
Renewal requests will be granted after the NRC completes its review of
those applications and determines that the applications satisfy NRC
requirements. The July 1, 1995, expiration date was chosen based on
resource considerations. The NRC staff has begun the review of many
applications for renewal of licenses with expiration dates before July
1, 1995, and believes that it is not appropriate to waste the resources
already expended in that effort. However, the NRC has not begun the
review of most of the applications for renewal of licenses with
expiration dates after July 1, 1995, and resources will be conserved by
extending those licenses.
No specific comments were received on these paragraphs.
Paragraph 70.38(a)(3)(viii)
This paragraph delineates the specific licenses that are not
extended under the final rule because the licenses authorize possession
of sufficient quantities of special nuclear material to be subject to
the criticality accident requirements of 10 CFR 70.24. This excludes
those licenses from the five-year extension because the Commission
believes that it is prudent to continue reviewing the licensees'
existing programs before granting licenses for longer durations to
ensure the adequacy of the licensees' criticality safety procedures.
No specific comments were received on this paragraph.
Paragraphs 30.37(b), 40.43(b), and 70.33(b)
These paragraphs specify that any pending license renewal
applications for specific licenses that are extended under the final
rule are automatically withdrawn. Any paid license renewal fees for
withdrawn applications will be refunded.
Two comments generally supportive of the rule expressed concern
about licensees who had already prepared
[[Page 1113]]
license renewal applications for submission to the NRC. One commenter
suggested that licensees whose licenses expired after July 1, 1995, and
who have prepared complete renewal applications without reference to
previously submitted documents should have the option of: (1) Having
their new renewal application reviewed and the license renewed; or (2)
having the existing license extended. The other commenter had prepared
complete license renewal applications, for its clients, that included
descriptions of the radiation safety programs updated to reflect the
revisions to 10 CFR part 20 that became effective January 1, 1994. The
commenter suggested that these applications be reviewed and the
licenses renewed, rather than extended.
The NRC believes that as many eligible licenses as possible should
be extended, to achieve the maximum resource savings possible for use
in redesigning the materials licensing process. However, the NRC also
recognizes that some licensees may want the NRC to review part or all
of their license renewal applications. Licensees whose license renewal
applications are automatically withdrawn by this rulemaking but whose
renewal applications contain revisions that they need to have
incorporated in their licenses, should submit those changes as an
amendment request accompanied by the appropriate amendment fees.
Environmental Impact: Categorical Exclusion
The NRC has determined that these regulations are the type of
actions described in the categorical exclusion in 10 CFR 51.22(c)(3).
Therefore, neither an environmental impact statement nor an
environmental assessment has been prepared for this regulation.
Paperwork Reduction Act
This final rule does not contain a new or amended information
collection requirement subject to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501, et seq.). Existing requirements were approved by the
Office of Management and Budget (OMB) approval number 3150-0009 (Part
70) and 3150-0120 (Parts 30 and 40). The NRC may not conduct nor
sponsor, and a person is not required to respond to, a collection of
information unless it displays a currently valid OMB control number.
Regulatory Analysis
A regulatory analysis has not been prepared for this rule because
it is not expected to have any adverse impact on licensees subject to
the final rule. These licensees will be postponing the submission of
license renewal applications and the associated fees for five years.
Regulatory Flexibility Analysis
As required by the Regulatory Flexibility Act of 1980, 5 U.S.C.
605(b), the Commission certifies that these rules will not have a
significant economic impact on a substantial number of small entities.
These rules merely extend, on a one-time basis, certain existing
byproduct, source, and special nuclear materials licenses that meet
specified criteria by five years and therefore, will not result in any
adverse impact.
Backfit Analysis
The NRC has determined that the backfit rule, 10 CFR 50.109, does
not apply to this final rule and, therefore, that a backfit analysis is
not required for this rulemaking because these amendments do not
involve any provisions that would impose backfits as defined in 10 CFR
50.109(a)(1).
List of Subjects
10 CFR Part 30
Byproduct material, Criminal penalties, Government contracts,
Intergovernmental relations, Isotopes, Nuclear materials, Radiation
protection, Reporting and recordkeeping requirements.
10 CFR Part 40
Criminal penalties, Government contracts, Hazardous materials
transportation, Nuclear materials, Reporting and recordkeeping
requirements, Source material, Uranium.
10 CFR Part 70
Criminal penalties, Hazardous materials transportation, Material
control and accounting, Nuclear materials, Packaging and containers,
Radiation protection, Reporting and recordkeeping requirements,
Scientific equipment, Security measures, Special nuclear material.
For the reasons set out in the preamble and under the authority of
the Atomic Energy Act of 1954, as amended; the Energy Reorganization
Act of 1974, as amended; and 5 U.S.C. 552 and 553; the Nuclear
Regulatory Commission is adopting the following amendments to 10 CFR
Parts 30, 40, and 70.
PART 30--RULES OF GENERAL APPLICABILITY TO DOMESTIC LICENSING OF
BYPRODUCT MATERIAL
1. The authority citation for 10 CFR Part 30 continues to read as
follows:
Authority: Secs. 81, 82, 161, 182, 183, 186, 68 Stat. 935, 948,
953, 954, 955, as amended, sec. 234, 83 Stat. 444, as amended (42
U.S.C. 2111, 2112, 2201, 2232, 2233, 2236, 2282); secs. 201, as
amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C.
5841, 5842, 5846).
Section 30.7 also issued under Pub. L. 95-601, sec. 10, 92 Stat.
2951 as amended by Pub. L. 102-486, sec. 2902, 106 Stat. 3123 (42
U.S.C. 5851). Section 30.34(b) also issued under sec. 184, 68 Stat.
954, as amended (42 U.S.C. 2234). Section 30.61 also issued under sec.
187, 68 Stat. 955 (42 U.S.C. 2237).
2. In 10 CFR 30.36, paragraph (a) is revised to read as follows:
Sec. 30.36 Expiration and termination of licenses and decommissioning
of sites and separate buildings or outdoor areas.
(a)(1) Except as provided in paragraph (a)(2) of this section, each
specific license expires at the end of the day on the expiration date
stated in the license unless the licensee has filed an application for
renewal under Sec. 30.37 not less than 30 days before the expiration
date stated in the existing license (or, for those licenses subject to
paragraph (a)(2) of this section, 30 days before the deemed expiration
date in that paragraph). If an application for renewal has been filed
at least 30 days before the expiration date stated in the existing
license (or, for those licenses subject to paragraph (a)(2) of this
section, 30 days before the deemed expiration date in that paragraph),
the existing license expires at the end of the day on which the
Commission makes a final determination to deny the renewal application
or, if the determination states an expiration date, the expiration date
stated in the determination.
(2) Each specific license that has an expiration date after July 1,
1995, and is not one of the licenses described in paragraph (a)(3) of
this section, shall be deemed to have an expiration date that is five
years after the expiration date stated in the current license.
(3) The following specific licenses are not subject to, or
otherwise affected by, the provisions of paragraph (a)(2) of this
section:
(i) Specific licenses for which, on February 15, 1996, an
evaluation or an emergency plan is required in accordance with
Sec. 30.32(i);
(ii) Specific licenses whose holders are subject to the financial
assurance
[[Page 1114]]
requirements specified in 10 CFR 30.35, and on February 15, 1996, the
holders either:
(A) Have not submitted a decommissioning funding plan or
certification of financial assurance for decommissioning; or
(B) Have not received written notice that the decommissioning
funding plan or certification of financial assurance for
decommissioning is acceptable;
(iii) Specific licenses whose holders are listed in the SDMP List
published in NUREG 1444, Supplement 1 (November 1995);
(iv) Specific licenses whose issuance, amendment, or renewal, as of
February 15, 1996, is not a categorical exclusion under 10 CFR
51.22(c)(14) and, therefore, need an environmental assessment or
environmental impact statement pursuant to Subpart A of Part 51 of this
chapter;
(v) Specific licenses whose holders have not had at least one NRC
inspection of licensed activities before February 15, 1996;
(vi) Specific licenses whose holders, as the result of the most
recent NRC inspection of licensed activities conducted before February
15, 1996, have been:
(A) Cited for a Severity Level I, II, or III violation in a Notice
of Violation;
(B) Subject to an Order issued by the NRC; or
(C) Subject to a Confirmatory Action Letter issued by the NRC.
* * * * *
(vii) Specific licenses with expiration dates before July 1, 1995,
for which the holders have submitted applications for renewal under 10
CFR 30.37 of this part.
3. In 10 CFR 30.37, a new paragraph (b) is added to read as
follows:
Sec. 30.37 Application for renewal of licenses.
* * * * *
(b) If any licensee granted the extension described in 10 CFR
30.36(a)(2) has a currently pending renewal application for the
extended license, that application will be considered withdrawn by the
licensee and any renewal fees paid by the licensee for that application
will be refunded.
PART 40--DOMESTIC LICENSING OF SOURCE MATERIAL
4. The authority citation for 10 CFR Part 40 continues to read as
follows:
Authority: Secs. 62, 63, 64, 65, 81, 161, 182, 183, 186, 68
Stat. 932, 933, 935, 948, 953, 954, 955, as amended, secs. 11e(2),
83, 84, Pub. L. 95-604, 92 Stat. 3033, as amended, 3039, sec. 234,
83 Stat. 444, as amended (42 U.S.C. 2014(e)(2), 2092, 2093, 2094,
2095, 2111, 2113, 2114, 2201, 2232, 2233, 2236, 2282); sec. 274,
Pub. L. 86-373, 73 Stat. 688 (42 U.S.C. 2021); secs. 201, as
amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C.
5841, 5842, 5846); sec. 275, 92 Stat. 3021, as amended by Pub. L.
97-415, 96 Stat. 2067 (42 U.S.C. 2022).
Section 40.7 also issued under Public Law 95-601, sec. 10, 92 Stat.
2951 as amended by Pub. L. 102-486, sec. 2902, 106 Stat. 3123, (42
U.S.C. 5851). Section 40.31(g) also issued under sec. 122, 68 Stat. 939
(42 U.S.C. 2152). Section 40.46 also issued under sec. 184, 68 Stat.
954, as amended (42 U.S.C. 2234). Section 40.71 also issued under sec.
187, 68 Stat. 955 (42 U.S.C. 2237).
5. In Sec. 40.42, paragraph (a) is revised to read as follows:
Sec. 40.42 Expiration and termination of licenses and decommissioning
of sites and separate buildings or outdoor areas.
(a)(1) Except as provided in paragraph (a)(2) of this section, each
specific license expires at the end of the day on the expiration date
stated in the license unless the licensee has filed an application for
renewal under Sec. 40.43 not less than 30 days before the expiration
date stated in the existing license (or, for those licenses subject to
paragraph (a)(2) of this section, 30 days before the deemed expiration
date in that paragraph). If an application for renewal has been filed
at least 30 days before the expiration date stated in the existing
license (or, for those licenses subject to paragraph (a)(2) of this
section, 30 days before the deemed expiration date in that paragraph),
the existing license expires at the end of the day on which the
Commission makes a final determination to deny the renewal application
or, if the determination states an expiration date, the expiration date
stated in the determination.
(2) Each specific license that has an expiration date after July 1,
1995, and is not one of the licenses described in paragraph (a)(3) of
this section, shall be deemed to have an expiration date that is five
years after the expiration date stated in the current license.
(3) The following specific licenses are not subject to, or
otherwise affected by, the provisions of paragraph (a)(2) of this
section:
(i) Specific licenses for which, on February 15, 1996, an
evaluation or an emergency plan is required in accordance with
Sec. 40.31(j);
(ii) Specific licenses whose holders are subject to the financial
assurance requirements specified in 10 CFR 40.36, and on February 15,
1996, the holders either:
(A) Have not submitted a decommissioning funding plan nor
certification of financial assurance for decommissioning; or
(B) Have not received written notice that the decommissioning
funding plan or certification of financial assurance for
decommissioning is acceptable;
(iii) Specific licenses whose holders are listed in the SDMP List
published in NUREG 1444, Supplement 1 (November 1995);
(iv) Specific licenses whose issuance, amendment, or renewal, as of
February 15, 1996, is not a categorical exclusion under 10 CFR
51.22(c)(14) and, therefore, need an environmental assessment or
environmental impact statement pursuant to Subpart A of Part 51 of this
chapter;
(v) Specific licenses whose holders have not had at least one NRC
inspection of licensed activities before February 15, 1996;
(vi) Specific licenses whose holders, as the result of the most
recent NRC inspection of licensed activities conducted before February
15, 1996, have been:
(A) Cited for a Severity Level I, II, or III violation in a Notice
of Violation;
(B) Subject to an Order issued by the NRC; or
(C) Subject to a CAL issued by the NRC.
(vii) Specific licenses with expiration dates before July 1, 1995,
for which the holders have submitted applications for renewal under 10
CFR 40.43 of this part.
* * * * *
6. In 10 CFR 40.43, a new paragraph (b) is added to read as
follows:
Sec. 40.43 Renewal of licenses.
* * * * *
(b) If any licensee granted the extension described in 10 CFR
40.42(a)(2) has a currently pending renewal application for the
extended license, that application will be considered to be withdrawn
by the licensee and any renewal fees paid by the licensee for that
application will be refunded.
PART 70--DOMESTIC LICENSING OF SPECIAL NUCLEAR MATERIAL
7. The authority citation for 10 CFR Part 70 continues to read as
follows:
Authority: Secs. 51, 53, 161, 182, 183, 68 Stat. 929, 930, 948,
953, 954, as amended, sec. 234, 83 Stat. 444, as amended, sec. 1701,
106 Stat. 2951, 2952, 2953 (42 U.S.C. 2071, 2073, 2201, 2232, 2233,
2282, 2297f); secs. 201, as amended, 202, 204, 206, 88 Stat. 1242,
as amended, 1244, 1245, 1246 (42 U.S.C. 5841, 5842, 5845, 5846).
Sections 70.1(c) and 70.20a(b) also issued under secs. 135, 141,
Public Law 97-425, 96 Stat. 2232, 2241 (42 U.S.C.
[[Page 1115]]
10155, 10161). Section 70.7 also issued under Public Law 95-601, sec.
10, 92 Stat. 2951 (42 U.S.C. 5851). Section 70.21(g) also issued under
sec. 122, 68 Stat. 939 (42 U.S.C. 2152). Section 70.31 also issued
under sec. 57d, Public Law 93-377, 88 Stat. 475 (42 U.S.C. 2077).
Sections 70.36 and 70.44 also issued under sec. 184, 68 Stat. 954, as
amended (42 U.S.C. 2234). Section 70.61 also issued under secs. 186,
187, 68 Stat. 955 (42 U.S.C. 2236, 2237). Section 70.62 also issued
under sec. 108, 68 Stat. 939, as amended (42 U.S.C. 2138).
8. In 10 CFR 70.38, paragraph (a) is revised to read as follows:
Sec. 70.38 Expiration and termination of licenses and decommissioning
of sites and separate buildings or outdoor areas.
(a)(1) Except as provided in paragraph (a)(2) of this section, each
specific license expires at the end of the day on the expiration date
stated in the license unless the licensee has filed an application for
renewal under Sec. 70.33 not less than 30 days before the expiration
date stated in the existing license (or, for those licenses subject to
paragraph (a)(2) of this section, 30 days before the deemed expiration
date in that paragraph). If an application for renewal has been filed
at least 30 days before the expiration date stated in the existing
license (or, for those licenses subject to paragraph (a)(2) of this
section, 30 days before the deemed expiration date in that paragraph),
the existing license expires at the end of the day on which the
Commission makes a final determination to deny the renewal application
or, if the determination states an expiration date, the expiration date
stated in the determination.
(2) Each specific license that has an expiration date after July 1,
1995, and is not one of the licenses described in paragraph (a)(3) of
this section, shall be deemed to have an expiration date that is five
years after the expiration date stated in the current license.
(3) The following specific licenses are not subject to, nor
otherwise affected by, the provisions of paragraph (a)(2) of this
section:
(i) Specific licenses for which, on February 15, 1996, an
evaluation or an emergency plan is required in accordance with
Sec. 70.22(i);
(ii) Specific licenses whose holders are subject to the financial
assurance requirements specified in 10 CFR 70.25, and on February 15,
1996, the holders either:
(A) Have not submitted a decommissioning funding plan or
certification of financial assurance for decommissioning; or
(B) Have not received written notice that the decommissioning
funding plan or certification of financial assurance for
decommissioning is acceptable;
(iii) Specific licenses whose holders are listed in the SDMP List
published in NUREG 1444, Supplement 1 (November 1995);
(iv) Specific licenses whose issuance, amendment or renewal, as of
February 15, 1996, is not a categorical exclusion under 10 CFR
51.22(c)(14) and, therefore, need an environmental assessment or
environmental impact statement pursuant to Subpart A of Part 51 of this
chapter;
(v) Specific licenses whose holders have not had at least one NRC
inspection of licensed activities before February 15, 1996;
(vi) Specific licenses whose holders, as the result of the most
recent NRC inspection of licensed activities conducted before February
15, 1996, have been:
(A) Cited for a Severity Level I, II, or III violation in a Notice
of Violation:
(B) Subject to an Order issued by the NRC; or
(C) Subject to a CAL issued by the NRC.
(vii) Specific licenses with expiration dates before July 1, 1995,
for which the holders have submitted applications for renewal under 10
CFR 70.33 of this part.
(viii) Specific licenses issued pursuant to 10 CFR 70.31 that, as
of February 15, 1996, are also subject to the requirements in
Sec. 70.24.
* * * * *
9. In 10 CFR 70.33, a new paragraph (b) is added to read as
follows:
Sec. 70.33 Renewal of licenses.
* * * * *
(b) If any licensee granted the extension described in 10 CFR
70.38(a)(2) has a currently pending renewal application for that
extended license, that application will be considered withdrawn by the
licensee and any renewal fees paid by the licensee for that application
will be refunded.
Dated at Rockville, Maryland, this 20th day of December, 1995.
For the Nuclear Regulatory Commission.
James M. Taylor,
Executive Director for Operations.
[FR Doc. 96-346 Filed 1-11-96; 2:00 pm]
BILLING CODE 7590-01-P
Complete official Federal Register PDF
FR Doc. 96-327 Agency Name Change
[Federal Register Volume 61, Number 10 (Tuesday, January 16, 1996)]
[Rules and Regulations]
[Page 1109]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-327]
========================================================================
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. 10 / Tuesday, January 16, 1996 /
Rules and Regulations
[[Page 1109]]
DEPARTMENT OF AGRICULTURE
Rural Housing and Community Development Service, Rural Business and
Cooperative Development Service, Rural Utilities Service, and Farm
Service Agency
7 CFR Chapter XVIII
RIN 0560-AE52
Agency Name Change
AGENCY: Farm Service Agency, Department of Agriculture.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This document amends the regulations to change the name of the
Consolidated Farm Service Agency to the Farm Service Agency as a result
of the Department of Agriculture reorganization.
EFFECTIVE DATE: January 16, 1996.
FOR FURTHER INFORMATION CONTACT: Thomas J. Witzig, Farm Service Agency,
P.O. Box 2415, room 0339-S, Washington, D.C. 20013, telephone 202-205-
5851.
SUPPLEMENTARY INFORMATION:
Background
The Secretary of Agriculture announced that the agency previously
referred to as the Consolidated Farm Service Agency (CFSA) is to be
named the Farm Service Agency (FSA). On November 8, 1995, USDA
published in the Federal Register (60 FR 56392) a final rule that
contained redelegations of authority for the Department of Agriculture
and changed the name of CFSA to FSA. This rule includes amendments to 7
CFR chapter XVIII that are necessary to bring agency regulations into
alignment with the departmental reorganization.
Accordingly, 7 CFR Chapter XVIII is amended as follows:
1. The heading of 7 CFR chapter XVIII is revised to read as
follows:
CHAPTER XVIII--RURAL HOUSING AND COMMUNITY DEVELOPMENT SERVICE, RURAL
BUSINESS AND COOPERATIVE DEVELOPMENT SERVICE, RURAL UTILITIES SERVICE,
AND FARM SERVICE AGENCY, DEPARTMENT OF AGRICULTURE
2. In 7 CFR chapter XVIII, all references to ``Consolidated Farm
Service Agency'' are revised to read ``Farm Service Agency'', and all
references to ``CFSA'' are revised to read ``FSA''.
Signed at Washington, D.C. on December 26, 1995.
Eugene Moos,
Under Secretary for Farm and Foreign Agricultural Services.
[FR Doc. 96-327 Filed 1-11-96; 2:00 pm]
BILLING CODE 3410-05-P
Complete official Federal Register PDF
FR Doc. 96-292 War Risk Insurance
[Federal Register Volume 61, Number 10 (Tuesday, January 16, 1996)]
[Rules and Regulations]
[Pages 1130-1144]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-292]
=======================================================================
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DEPARTMENT OF TRANSPORTATION
Maritime Administration
46 CFR Part 308
[Docket No. R-164]
RIN 2133-AB23
War Risk Insurance
AGENCY: Maritime Administration.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Maritime Administration (MARAD) is revising its war risk
regulations to remove voluminous forms that may be obtained from MARAD
and to make minor nonsubstantive changes regarding agency organization
and procedure with respect to application for war risk insurance,
payment of premiums and payment for loss claims. This rulemaking is the
result of the President's Regulatory Reinvention Initiative.
EFFECTIVE DATE: January 16, 1996.
FOR FURTHER INFORMATION CONTACT: Edmond J. Fitzgerald, Director, Office
of Subsidy and Insurance, 400 Seventh Street SW, Washington, DC 20590,
Tel. (202)366-2400.
SUPPLEMENTARY INFORMATION: Pursuant to the President's Regulatory
Reinvention Initiative announced on March 4, 1995, which included a
page-by-page review of all regulations, MARAD is amending its war risk
insurance regulations with respect to MARAD's procedures for
application for war risk insurance and the payment of premiums and
claims. It was determined that the existing regulations are cumbersome
and excessive in content because of the inclusion of many lengthy
forms. As revised, the part provides a general description of the
content of the various forms which may be obtained from MARAD.
As authorized by Title XII of the Merchant Marine Act of 1936, as
amended (46 App. U.S.C. 1283), the Secretary may provide war risk
insurance adequate for the needs of the waterborne commerce of the
United States, if such insurance coverage cannot be obtained on
reasonable terms and conditions from companies authorized to conduct an
insurance business in a state of the United States. This U.S.
Government war risk insurance program is a standby emergency program.
It becomes effective simultaneously with the automatic termination of
ocean marine commercial war risk insurance policies. Those policies are
terminated automatically upon the outbreak of war, whether declared or
not, between any of the five great powers (United States, United
Kingdom, France, People's Republic of China or Russia) or upon the
hostile detonation of a weapon of war employing atomic or nuclear
fission and/or fusion or other like reaction or radioactive force or
matter.
This program makes it possible for applicants to obtain war risk
insurance from the U.S. Government when such insurance is unavailable
on reasonable terms and conditions in the commercial market. The
program is mutually beneficial to the United States and to the
shipowner in that it assures continued flow of essential U.S. trade and
protection of the shipowner from loss by risks of war.
While authority to issue war risk insurance expired on June 30,
1995, these amendments to 46 CFR Part 308 are being issued under
MARAD's general rulemaking authority found in 46 App. U.S.C. 1114 in
anticipation that pending legislation will be enacted to reauthorize
the program and in order that there be no unnecessary impairment to the
continuity of this emergency program.
Rulemaking Analyses and Notices
Executive Order 12866 (Regulatory Planning and Review) and DOT
Regulatory Policies and Procedures
This rulemaking is not considered to be an economically significant
regulatory action under section 3(f) of E.O. 12866, and is not
considered to be a significant rule under the
[[Page 1131]]
Department's Regulatory Policies and Procedures (44 FR 11034, February
26, 1979). Accordingly, it was not reviewed by the Office of Management
and Budget. A full regulatory evaluation is not required because the
rule has no mandatory effects and imposes no regulatory costs.
MARAD has determined that this rulemaking presents no substantive
issue which it could reasonably expect would produce meaningful public
comment since it eliminates forms, which are described and may be
obtained from MARAD or its agent, makes other conforming amendments and
reflects MARAD organizational changes. Accordingly, pursuant to the
Administrative Procedure Act, 5 U.S.C. 553(c) and (d), MARAD finds that
good cause exists to publish this as a final rule, without opportunity
for public comment, and to make it effective on the date of
publication.
Federalism
The Maritime Administration has analyzed this rulemaking in
accordance with the principles and criteria contained in Executive
order 12612, and has determined that it does not have sufficient
federalism implications to warrant the preparation of a Federalism
Assessment.
Regulatory Flexibility Act
The Maritime Administration certifies that this rulemaking will not
have a significant economic impact on a substantial number of small
entities.
Environmental Assessment
The Maritime Administration has considered the environmental impact
of this rulemaking and has concluded that an environmental impact
statement is not required under the National Environmental Policy Act
of 1969.
Paperwork Reduction Act
This rulemaking contains an information collection that has been
approved by OMB under 5 CFR part 1320, pursuant to the Paperwork
Reduction Act of 1980 (44 U.S.C. 3501, et seq.). Approval number 2133-
0011 has been assigned to the collection requirement.
List of Subjects in 46 CFR Part 308
Cargo vessels, Maritime carriers, Reporting requirements, War risk
insurance.
Accordingly, 46 CFR part 308 is revised to read as follows:
Part 308--War Risk Insurance
Subpart A--General
Sec.
308.1 Eligibility for vessel insurance.
308.2 Requirements for eligible vessels.
308.3 Applications for insurance; warranties; supporting documents;
payment of binder fees.
308.4 [Reserved]
308.5 Voluntary contract of commitment.
308.6 Period of interim binders, updating application information
and new applications.
308.7 Premiums and payment thereof.
308.8 War risk insurance underwriting agency agreement.
Subpart B--War Risk Hull and Disbursements Insurance
308.100 Insured Amount.
308.101 [Reserved]
308.102 Issuance of interim binder; terms and conditions; fees.
308.103 Insured amounts under interim binder.
308.104 Additional war risk insurance.
308.105 Reporting casualties and filing claims.
308.106 [Reserved]
308.107 War risk hull insurance policy.
Subpart C--War Risk Protection and Indemnity Insurance
308.200 Insured Amount--application
308.201 [Reserved]
308.202 Issuance of interim binder; terms and conditions.
308.203 Amount insured under interim binder.
308.204 Additional war risk protection and indemnity insurance.
308.205 Reporting casualties and filing claims.
308.206 [Reserved]
308.207 War Risk protection and indemnity insurance policy.
Subpart D--Second Seamen's War Risk Insurance
308.300 Insured amount--application.
308.301 [Reserved]
308.302 Issuance of interim binder; terms and conditions.
308.303 Amount insured under interim binder.
308.304 Reporting casualties and filing claims.
308.305 [Reserved]
308.306 Second Seamen's War Risk Policy, Form MA-242.
Subpart E--War Risk Builder's Risk Insurance
308.400 Authority.
308.401 Eligibility for insurance.
308.402 Insurance during vessel construction period.
308.403 Insured amounts.
308.404 Application for insurance.
308.405 Form of application.
308.406 Issuance of policies; terms and conditions.
308.407 Premiums and payment.
308.408 Right of Maritime Administrator to change rate of premium.
308.409 Standard form of War Risk Builder's Risk Insurance Policy,
Form MA-283.
308.410 Reporting casualties and filing claims.
Subpart F--War Risk Cargo Insurance
I--Introduction
308.500 Authority.
308.501 Cargoes on which coverage is available.
308.502 Additional insurance.
308.503 Rate schedules.
308.504 Definition of territories and possessions.
II--Open Policy War Risk Cargo Insurance
308.505 General.
308.506 Application for an open cargo policy.
308.507 Security for payment of premiums.
308.508 Issuance of an open cargo policy.
308.509 Collateral deposit fund.
308.510 Surety bond.
308.511 Cancellation of Open Cargo Policy.
308.512 Declaration of shipments under open cargo policy.
308.513 Payment of premiums and fees.
308.514 Return premium.
308.515 Payment in event of loss.
308.516 Failure to comply with Clause 21.
308.517 Open cargo policy, Form MA-300.
308.518 Standard optional endorsement No. 1, Form MA-300-A.
308.519 Standard optional endorsement No. 2, Form MA-300-B.
308.520 Standard optional endorsement No. 3, Form MA-300-C.
308.521 Application for open cargo policy, Form MA-301.
308.522 Collateral deposit fund, letter of transmittal, Form MA-
302.
308.523 Application for revision of open cargo policy, Form MA-303.
308.524 Application for cancellation of open cargo policy, Form MA-
304.
308.525 Application for decrease in amount of cash collateral fund,
Form MA-305.
308.526 Certificate for repayment of decrease of collateral deposit
fund, Form MA-306.
308.527 Application for return premium, Form MA-307.
308.528 Surety Bond A, Form MA-308.
308.529 Surety Bond B, Form MA-309.
308.530 Letter requesting increase or decrease in amount of Surety
bond, Form MA-310.
308.531 Endorsement of surety bond increasing or decreasing amount
of coverage, Form MA-311.
308.532 Release of surety bond, Form MA-312.
308.533 Closing report, Form MA-313.
308.534 Certificate to be attached to closing report, Form MA-313-
A.
308.535 Certificate to be attached to final closing report, Form
MA-313-B.
308.536 Declaration where failure to comply with Clause 21 was
inadvertent, Form MA-314.
308.537 Effective date of endorsement.
III--Facultative War Risk Cargo Insurance
308.538 General.
308.539 Application.
[[Page 1132]]
308.540 Premiums.
308.541 Issuance.
308.542 Warranty re thirty-day shipments.
308.543 Cancellation.
308.544 Facultative binder, Form MA-315.
308.545 Facultative cargo policy, Form MA-316.
308.546 Standard optional endorsement No. 1-A, Form MA-316-A.
308.547 Application for return premium, Form MA-317.
IV--General
308.548 Standard form of underwriting agency agreement for cargo,
Form MA-318.
308.549 Application for appointment of Cargo Underwriting Agent,
Form MA-319.
308.550 Certificate, Form MA-320.
308.551 War Risk insurance clearing agency agreement for cargo.
308.552 Effective date.
Subpart G--Records Retention
308.600 Records retention requirement.
Authority: Secs. 204, 1202, 1203, 1209, Merchant Marine Act of
1936, as amended (46 App. U.S.C. 1114, 1282, 1283, 1289; 49 CFR
1.66).
Subpart A--General
Sec. 308.1 Eligibility for vessel insurance.
Any vessel within one of the following categories shall be eligible
for insurance, but shall remain eligible only while meeting the
qualifications criteria in one of said categories. An eligible vessel
is not insured unless and until an application is submitted as required
in subpart B, C, or D of this Part 308 and the Maritime Administrator,
Department of Transportation, (Maritime Administrator) Maritime
Administration (MARAD), approves said application.
(a) A vessel registered, enrolled, or licensed under the laws of
the United States of America (United States); any undocumented vessel
owned or chartered by or made available to the United States or any
department or agency thereof; any tug or barge or other watercraft
(documented under the laws of the United States, or undocumented) owned
by a citizen of the United States and used in essential water
transportation; and United States citizen-owned watercraft used in the
fishing trade or industry, except when used exclusively in or for sport
fishing.
(b) Any vessel, other than a vessel described in paragraph (a) of
this section determined by the Maritime Administrator to be engaged in
the national defense or the national economy of the United States and
subject to an unqualified Contract of Commitment with the United States
in a form required by the Maritime Administrator, and which is:
(1) Owned by a United States corporation, or a foreign corporation
in which a majority of the stock is owned and controlled by a citizen
or citizens of the United States, whether direct or through intervening
corporations, foreign or domestic. Where such intervening corporations
are foreign, the ultimate majority ownership and control of the stock
of such corporations must be vested in a citizen or citizens of the
United States as defined in section 1201(d), Merchant Marine Act, 1936,
as amended (46 App. U.S.C. 1281(d));
(2) Owned by a foreign corporation which is not directly or
beneficially owned by a citizen or citizens of the United States, but
which vessel is under a long-term charter or other long-term contract
covering the use of the vessel on terms deemed by the Maritime
Administrator to subject the vessel to United States control in the
event of an emergency. The charterer of such vessel must be either a
citizen or citizens of the United States or a foreign corporation in
which a majority of the stock is owned and controlled by a citizen or
citizens of the United States, whether direct or indirect through
intervening corporations, foreign or domestic. Where such intervening
corporations are foreign, ultimate majority ownership and control of
the stock of such corporations must be vested in a citizen or citizens
of the United States, as defined in 46 App. U.S.C. 1281(d).
(c) Any other vessel, at the sole discretion of the Maritime
Administrator, but only while engaged in a service which has been
determined by the Maritime Administrator to be in the interest of the
national defense or the national economy of the United States. Vessels
in this category are not eligible for war risk insurance interim
binders.
Sec. 308.2 Requirements for eligible vessels.
(a) Restrictions--foreign-flag vessels. Interim insurance is
available on any vessel described in Sec. 308.1 (a) and (b) of this
part, provided application for interim insurance is submitted as
required in subparts B, C, or D of this part 308, and the Maritime
Administrator approves said application: Provided, That only vessels of
Panamanian, Honduran, Bahamian, Republic of the Marshall Islands or
Liberian registry not more than 20 years old will be considered
eligible under Sec. 308.1 (b) of this part for interim insurance,
subject at all times to the determination specified in paragraph (b) of
this section.
(b) Special rules--foreign-flag vessels. For the purpose of
providing interim insurance on vessels described in Sec. 308.1(b), the
Maritime Administrator shall consider the characteristics, employment,
and general management of the vessel. The Maritime Administrator
formally determines that the following vessels are engaged in a service
in the interest of the national defense or the national economy of the
United States and qualify for an interim binder:
(1) Vessels substantially engaged in the foreign commerce of the
United States or which would be required in the event of war or
national emergency;
(2) Tankers of not less than 2,000 deadweight tons;
(3) Dry cargo vessels, including containerships, breakbulk, and dry
bulk vessels;
(4) Heavy lift vessels;
(5) Refrigerated vessels and other classes of ships in short supply
in the United States-flag fleet;
(6) Passenger vessels; and
(7) Other vessels with special capabilities, as determined by the
Maritime Administrator.
(c) Vessel Position Reports. All vessels for which war risk
insurance interim binders have been issued shall file a Vessel Position
Report. The purpose of this report is to inform cognizant U.S. agencies
of vessel arrivals, departures and at-sea locations. Failure to make
required regular reports will cause MARAD to issue a one-time notice of
default. If failure to report continues, MARAD shall cancel the interim
binder for the subject vessel and any insurance attaching thereunder.
MARAD will issue reporting instructions and formats with the binders.
(d) Notice of change in status of vessel after binder issued. Any
breach of the warranty prescribed hereunder as to vessels in all
categories with respect to Department of Commerce Transportation Orders
T-1 and T-2 (44 CFR Parts 401, 402 and 403), as well as the additional
warranties as to vessels in categories (b)(1) and (b)(2) of this
section, with respect to maintenance of eligibility for insurance and
availability of the insured vessels to the U.S. Government in time of
emergency, shall terminate the binders and any insurance attaching
thereunder. In the event of the sale, demise charter, requisition,
confiscation, change of flag, total loss, or any other change in status
which, by the terms of the binder causes the binder to terminate,
prompt notice shall be given in writing to the American War Risk
Agency, 14 Wall Street, New York, N.Y. 10005.
(e) Nature of change in status of other vessels. It is the
intention of the parties that any breach of the warranty as to
operation in the approved service of
[[Page 1133]]
vessels described in Sec. 308.1(c) shall terminate the insurance. In
the event of the sale, demise charter, requisition, confiscation,
change of flag, total loss, any other change in status or change in
operation of the vessel in the approved service prompt notice shall be
given to the American War Risk Agency, 14 Wall Street, New York, N.Y.
10005.
Sec. 308.3 Applications for insurance; warranties; supporting
documents; payment of binder fees.
(a) Application, binder forms. A single application for War Risk
Insurance shall be filed on Form MA-528, specifying the types of
insurance coverages for which the applicant is applying. A single
application may be submitted for several vessels, if the application
identifies each vessel to be insured and the coverage(s) required, by
completing appendices A and B to that form. An interim binder for war
risk insurance coverage, of the types described in subparts B, C and D
of this part, shall be on Form MA-942, which may be obtained from the
American War Risk Agency or from the Office of Subsidy and Insurance.
(b) Warranties--(1) In general. Applications for war risk hull and
protection and indemnity insurance in any eligible category of this
Part 308 shall include a warranty that, at all times during the
effective period of the binder and any insurance attaching thereunder,
the insured vessel, regardless of its nation of registry, will comply
with Department of Commerce Transportation Orders T-1 and T-2 (44 CFR
parts 401, 402, and 403), or any modifications thereof so long as they
remain in force and that the vessel will not be chartered, unless in
accordance with the provisions of Sec. 221.11 and 221.13 of this
chapter, which requirement is applicable to any charter in existence at
the time the applicant applies for insurance.
(2) Vessels described in Sec. 308.1(a). Applications for war risk
insurance on a vessel described in Sec. 308.1(a) shall contain the
warranty that at, and from the date of issuance of the interim binder,
and for and during the term of any insurance attaching thereunder, such
vessel will remain eligible within its category.
(3) Vessels described in Sec. 308.1(b). Applications for war risk
insurance on a vessel described in Sec. 308.1(b) shall contain the
warranties that at all times the vessel will remain eligible within its
applicable category; that the vessel will be made available for use by
the United States pursuant to the signed Contract of Commitment
submitted with the insurance applications, as required by the Maritime
Administration; that the vessel will remain in the approved service;
and that no controlling interest in the vessel shall be transferred by
a subsequent sale or long-term charter, except on the condition that
the successor in interest agrees to be bound by the terms of the
applicant's Contract of Commitment. All instruments transferring any
controlling interest in the vessel, including long-term charter or
merger agreements, shall be submitted to the Maritime Administration
for prior approval.
(4) Vessels described in Sec. 308.1(c). Applications for war risk
insurance on a vessel described in Sec. 308.1(c) shall contain
warranties that the vessel will remain in the approved service and that
any change in flag or service will be reported in advance to the
Maritime Administration for a new determination as to whether the
vessel's service is in the interest of the national defense or the
national economy of the United States. Vessels in this category are not
eligible for war risk insurance interim binders.
(5) Vessel locator filing requirements. Applications for insurance
on vessels in all categories, except tugs and barges and vessels used
exclusively in the fishing trade or industry, described in
Sec. 308.1(a), shall contain a warranty that at all times the vessel
will file reports as required under the U.S. Merchant Vessel Locator
Filing System (USMER) as prescribed in Sec. 308.2(c) of this section.
(c) Filing applications for insurance. All applications for
insurance on a vessel shall be made to the American War Risk Agency, 14
Wall Street, New York, New York 10005, underwriting agent for the
Maritime Administration.
(d) Required submissions with--(1) In general. An application for
insurance on a vessel described in Sec. 308.1(b) shall be accompanied
by:
(i) A contract of commitment, in the form prescribed in Sec. 308.5
of this part. In the event the vessel is determined to be ineligible
under the terms of this part 308, the applicant will be so advised and
the executed contract of commitment and any official foreign government
action or approval will be returned to the applicant by the Maritime
Administration.
(ii) An executed agreement contained in the application for
insurance that any charter or other contract covering the use of the
vessel during the period of the binder or any insurance attaching
thereunder shall be subject to termination or suspension without notice
in the event the United States requires the use of the vessel under the
voluntary contract of commitment submitted by the applicant.
(2) Certification of citizenship. An application for insurance on
such a vessel shall be supported by execution of the citizenship
certification, in the format set out in appendix C to Form MA-528, as
described in paragraph (a) of this section. That certification shall be
required to establish the U.S. citizenship of the majority ownership
and control of the vessel-owning corporation, whether that ownership is
direct or through intervening corporations.
(3) Existing long-term charters. An application for a vessel in
this category which is at the time of application under long-term
charter or other long-term contract, either to the applicant or from
the applicant to a third party, shall be jointly submitted by the owner
and the charterer, and in addition to the other materials required
under this paragraph, shall be accompanied by a copy of the long-term
contract covering the use of the vessel and all addenda thereto,
certified to be full and complete copies (except as to rate of hire or
freight) and a completed appendix C to Form MA-528, establishing the
U.S. citizenship of the majority of the shareholders and control of the
charterer. The charterer shall also furnish to MARAD a certified copy
of any amendment to such charter which may be issued subsequent to the
issuance of any binder of insurance under this Part 308.
(4) Foreign government action or approval. An application for a
vessel in this category also shall be accompanied by a certified copy
of the evidence of any official action or approval required by the
government of the country of registry as a prerequisite to the
execution of a contract of commitment with the United States.
(5) Additional materials. With respect to a vessel in this
category, the applicant shall submit the following additional
materials:
(i) A statement describing the service in which the vessel is
engaged, including a listing of the vessel's voyages and ports of call
during the immediately preceding six (6) month period, indicating the
tonnage and type of cargo carried on such voyages and the reasons why
such service should be deemed to be in the interest of the national
defense or the national economy of the United States;
(ii) Material demonstrating the management and financial
capabilities of the applicant; and
(iii) In the case of a new vessel or a vessel which has not for the
six (6) months immediately prior to the date of
[[Page 1134]]
the application been engaged in the foreign commerce of the United
States, a statement, signed by a responsible company official,
certifying the extent to which the vessel will be engaged in the
foreign commerce of the United States for the six (6) months
immediately following the issuance of any interim binder of insurance
under this part 308.
(e) Requests for changes in binders. All requests for changes in
binders and inquiries relative to the insurance after the interim
binders have been issued shall be directed to the American War Risk
Agency, 14 Wall Street, New York, NY 10005.
(f) Fees. A check payable in U.S. funds to the ``Maritime
Administration, Department of Transportation'' for the total amount of
all binder fees payable by such applicant shall accompany each
application. Binder fees are not returnable.
(g) Availability of Application Forms. Form MA-528 may be obtained
from either the American War Risk Agency (Underwriting Agent), at the
address in paragraph (e) of this section, or the Maritime
Administration, Attention: Director, Office of Subsidy and Insurance,
400 Seventh Street, SW., Washington, DC 20590.
(Approved by the Office of Management and Budget under control
number 2133-0011)
Sec. 308.4 [Reserved]
Sec. 308.5 Voluntary contract of commitment.
Applications for insurance on vessels described in Sec. 308.1(b)
shall be accompanied by a contract of commitment, in triplicate
originals, executed by the owner (or by the owner and the charterer
where required by Sec. 308.3). Contracts of commitment to make the
vessel available to the United States during any period in which
vessels may be requisitioned under section 902 of the Act (46 App.
U.S.C. 1242) shall be submitted on standard contract form which may be
obtained from the American War Risk Agency or MARAD. The effective date
of the contract of commitment will be the effective date of the binder
and will be inserted in the contract of commitment by MARAD.
Sec. 308.6 Period of interim binders, updating application
information and new applications.
(a) All existing interim binders remain in full force and effect
without the necessity of re-application or the payment of additional
fees so long as the Secretary of Transportation's authority to provide
such insurance has been extended and is continuous.
(b) Assureds under interim binders are required to notify the
American War Risk Agency annually, by June 30th, of any change in the
information provided in their original binder applications including,
but not limited to, change of address, vessel name or vessel
characteristics.
(c) New applications for interim binders on U.S.-flag vessels, with
necessary attachments (as specified in S 308.3), as well as checks for
the binder fees prescribed made payable to ``Maritime Administration,
Department of Transportation,'' shall be filed with the American War
Risk Agency, 14 Wall Street, New York, New York 10005. All interim
binders on U.S.-flag vessels shall become effective as of the date of
determination of eligibility by the Maritime Administration.
(d) New applications for interim binders on U.S. citizen-owned or
controlled foreign-flag vessels, with necessary attachments (as
specified in Sec. 308.3), as well as checks for the binder fees
prescribed made payable to ``Maritime Administration, Department of
Transportation,'' shall be filed for review in accordance with
eligibility requirements specified in Sec. 308.2, and mailed to the
American War Risk Agency, 14 Wall Street, New York, New York 10005. All
interim binders on foreign-flag vessels will become effective on the
date the owner's contract of commitment is executed by the Maritime
Administration.
(Approved by the Office of Management and Budget under control
number 2133-0011)
Sec. 308.7 Premiums and payment thereof.
Rate to be fixed promptly upon the happening of the event causing
the American Institute Hull War Risks and Strikes Clauses dated
December 1, 1977 (including Automatic Termination and Cancellation
Provisions) for attachment to American Institute Hull Clauses dated
June 2, 1977 of any war risk policies to become operative and premium
shall be payable within ten days after receipt of notice of the amount
thereof by the assured. Premiums shall be paid to the Underwriting
Agent that issued the binders by check payable to the order of
``Maritime Administration, Department of Transportation.'' In the event
that it is subsequently determined that insurance under interim binders
did not attach, premiums paid will be refunded by the Maritime
Administrator.
Sec. 308.8 War risk insurance underwriting agency agreement.
Standard form MA-355 of underwriting agency agreement applicable
shall be executed by the Maritime Administrator and domestic insurance
companies or groups of domestic insurance companies authorized to do a
marine insurance business in any States of the United States,
appointing such companies or groups of companies as Underwriting Agents
to issue binders and policies covering hull, protection and indemnity,
and Second Seamen's war risk insurance under subparts B, C, and D of
this part. It shall contain provisions including, but not limited to
the appointment of the agent, duties of the agent, books and records,
compensation, standard of performance, indemnification effective date,
amendment and termination, and nondiscrimination.
Subpart B--War Risk Hull and Disbursements Insurance
Sec. 308.100 Insured Amounts.
An applicant for war risk hull insurance shall state the amount of
insurance desired but any payment of claim for damage to or actual or
constructive total loss of the vessel insured shall be made as provided
in Sec. 308.103(a). An applicant desiring disbursements insurance may
at his option obtain such additional insurance but any claim for loss
of disbursements as a consequence of the actual or constructive total
loss of the vessel insured shall be made as provided in
Sec. 308.103(c).
Sec. 308.101 [Reserved]
Sec. 308.102 Issuance of interim binders; terms and conditions; fees.
Upon acceptance of an application, an interim binder in the form
set forth in Sec. 308.106, will be issued and there shall be deemed to
be incorporated therein by references all the terms, conditions, and
warranties contained in the application for war risk hull and
disbursements insurance and the standard war risk hull insurance policy
(set forth in Sec. 308.107), to the same extent as if such application
and policy were made a part of the binder. The binder fee (not
refundable) for U.S.-flag vessels shall be $25 per application for
vessels under 500 gross tons; $100 per application for vessels 500
gross tons or over; and $100 per LASH or similar type barge
application. The binder fee (not refundable) for foreign-flag vessels
shall be $50 per application for vessels under 500 gross tons; $200 per
application for vessels 500 tons or over; and $200 per LASH or similar
type barge application. All fees are payable in U.S. funds by check to
order of the ``Maritime Administration, Department of Transportation.''
[[Page 1135]]
Sec. 308.103 Insured amounts under interim binder.
(a) Valuation. The valuation in the policy for damage to, or actual
or constructive total loss of the vessel insured shall be a stated
valuation (exclusive of National Defense features paid for by the
Government) determined by the Secretary of Transportation which shall
not exceed the amount that would be payable if the vessel had been
requisitioned for title under section 902(a) of the Merchant Marine
Act, 1936, as amended (46 App. U.S.C. 1242(a)) at the time of the
attachment of the insurance under said policy: Provided, however, That
in the case of a construction subsidized vessel, for the period of
insurance prior to requisition for title or use, the valuation so
determined shall be reduced by such proportion as the amount of
construction subsidy paid with respect to the vessel bears to the
entire construction cost and capital improvements thereof (excluding
the cost of national defense features), and for the period of insurance
after requisition for use the valuation so determined shall not exceed
the amount which would be payable under 46 App. U.S.C. 1242(a) in the
case of requisition for title or use: Provided, further, that the
insured shall have the right within sixty days after the attachment of
the insurance under said policy, or within sixty days after
determination of such valuation by the Secretary of Transportation,
whichever is later, to reject such valuation, and shall pay, at the
rate provided for in said policy, premiums upon such asserted valuation
as the insured shall specify at the time of rejection, but such
asserted valuation shall not operate to the prejudice of the Government
in any subsequent action on the policy. In the event of the actual or
constructive total loss of the vessel, if the insured has not rejected
such valuation the amount of any claim therefor which is adjusted,
compromised, settled, adjudged, or paid shall not exceed such stated
amount, but if the insured has so rejected such valuation, the insured
shall be paid as a tentative advance only, 75 per centum of such
valuation so determined by the Secretary of Transportation and shall be
entitled to sue the United States in a court having jurisdiction of
such claims to recover such valuation as would be equal to the just
compensation which such court determines would have been payable if the
vessel had been requisitioned for title under 46 App. U.S.C. 1242(a) at
the time of the attachment of the insurance under said policy:
Provided, however, That in the case of a construction-subsidized
vessel, the valuation determined by the court as such just compensation
for any period of insurance prior to actual requisition for title or
use of the vessel shall be reduced by such proportion as the amount of
construction subsidy paid with respect to the vessel bears to the
entire construction cost and capital improvements thereof (excluding
the cost of national defense features), and for any period of insurance
after actual requisition for use, the valuation determined by the court
shall be the amount which would have been payable under 46 App. U.S.C.
1212 in the case of requisition for title: And provided further, that
in the event of an election by the insured to reject the stated
valuation fixed by the Secretary of Transportation and to sue in the
courts, the amount of the judgment will be payable without regard to
any limitations provided by statute, although the excess of any amounts
advanced on account of just compensation that is over the amount of the
court judgment shall be required to be refunded by the insured. In the
event of such court determination, premiums under the policy shall be
adjusted on the basis of the valuation as finally determined and of the
rate provided for in said policy. The ``stated valuation'' of the
vessel insured refers to the vessel as described in Sec. 309.5 of this
chapter.
(b) Insurance risks. Insurance risks covered by the terms of the
standard form of war risk hull insurance policy (Sec. 308.107), except
damage to or actual or constructive total loss of the vessel insured as
set forth in paragraph (a) of this section and loss of disbursements
(limited to consumable and subsistence stores, slop chests, bar stock
and bunker fuel lost as a consequence of the actual or constructive
total loss of the vessel insured) as set forth in paragraph (c) of this
section and identified as disbursements, shall be insured for an amount
not in excess of the ``sum insured'' as referred to in said policy.
(c) Disbursements. Disbursements shall be insured as authorized
under section 1203(c), Title XII, Merchant Marine Act, 1936, as
amended, (46 App. U.S.C. 1283(c)) and shall be limited to consumable
and subsistence stores, slop chests, bar stock and bunker fuel.
Disbursements insurance shall be optional and is insurance additional
to the war risk hull insurance provided under this subpart, and payment
of claim shall be limited to the actual value of the disbursements lost
as a consequence of the actual or constructive total loss of the vessel
insured.
Sec. 308.104 Additional war risk insurance.
Owners or charterers may obtain, on an excess basis, additional war
risk insurance in such amounts as desired and such insurance shall not
inure to the benefit of the Maritime Administrator as underwriter.
Sec. 308.105 Reporting casualties and filing claims.
All casualties occurring after insurance under a binder has
attached shall be reported promptly to the Underwriting Agent that
issued the binder and all claim documents shall likewise be filed with
such Underwriting Agent, but payment of the amounts due in settlement
of claims will be made by the Maritime Administrator.
Sec. 308.106 [Reserved]
Sec. 308.107 War risk hull insurance policy.
Standard Form MA-240, issued by the Maritime Administrator, acting
for the United States, through authority delegated by the Secretary of
Transportation, may be obtained from the American War Risk Agency or
MARAD.
Subpart C--War Risk Protection and Indemnity Insurance
Sec. 308.200 Insured amount--Application.
An applicant for war risk protection and indemnity insurance shall
state the amount of insurance desired but such amount shall not exceed
$750 per gross ton of the Vessel.
Sec. 308.201 [Reserved]
Sec. 308.202 Issuance of interim binder; terms and conditions.
Upon acceptance of an application, an interim binder in form as set
forth in Sec. 308.3 will be issued and there shall be deemed to be
incorporated therein by reference all the terms, conditions, and
warranties contained in the application for war risk protection and
indemnity insurance (set forth in Sec. 308.3) and the standard war risk
protection and indemnity insurance policy (set forth in Sec. 308.207)
to the same extent as if such application and policy were made a part
of the binder. The binder fee (not refundable) shall be $100 per
application for U.S.-flag LASH or similar type barges; $25 per
application for all other U.S.-flag vessels; $200 per application for
foreign-flag LASH or similar type barges; and $50 per application for
all other foreign-flag vessels. All fees are payable in U.S. funds by
check to the order of ``Maritime Administration, Department of
Transportation.''
[[Page 1136]]
Sec. 308.203 Amount insured under interim binder.
The amount insured shall be the amount stated in the application,
but not in excess of $750 per gross ton of the vessel.
Sec. 308.204 Additional war risk protection and indemnity insurance.
Owners or charterers may obtain, on an excess basis, additional war
risk protection and indemnity insurance in such amounts as desired and
such insurance shall not inure to the benefit of the Maritime
Administrator, as underwriter.
Sec. 308.205 Reporting casualties and filing claims.
All casualties occurring after insurance under a binder has
attached shall be reported promptly to, and all claim documents filed
with the Office of Subsidy and Insurance, Maritime Administration,
Department of Transportation, Washington, DC, 20590.
Sec. 308.206 [Reserved]
Sec. 308.207 War risk protection and indemnity insurance policy.
The standard form of war risk protection and indemnity insurance
policy, Form MA-241, may be obtained from the American War Risk Agency
or MARAD.
Subpart D--Second Seamen's War Risk Insurance
Sec. 308.300 Insured amount--application.
An applicant for Second Seamen's war risk insurance shall not state
the amount of insurance desired, which shall be as provided in
Sec. 308.303.
Sec. 308.301 [Reserved]
Sec. 308.302 Issuance of interim binder; terms and conditions.
Upon acceptance of an application, an interim binder in form as set
forth in Sec. 308.3 will be issued and there shall be deemed to be
incorporated therein by reference all the terms, conditions, and
warranties contained in the application for Second Seamen's war risk
insurance (set forth in Sec. 308.3) and the Second Seamen's War Risk
Policy (1955) (set forth in Sec. 308.306) to the same extent as if such
application and policy were made a part of the binder. The binder fee
(not refundable) shall be $75 per application for U.S.-flag vessels and
$150 per application for foreign-flag vessels. All fees are payable in
U.S. funds by check to the order of ``Maritime Administration,
Department of Transportation.''
Sec. 308.303 Amounts insured under interim binder.
The amounts insured are the amounts specified in the Second
Seamen's War Risk Policy (1955) or as modified by shipping articles,
collective bargaining agreements or other applicable employment
agreements which are in effect as of the date of a casualty involving
the subject vessel. Upon the attachment of this binder, the number of
crew members and modified benefits payable as of that date shall be
declared immediately to the Underwriting Agent that issued the binder.
Any subsequent changes shall be likewise declared.
Sec. 308.304 Reporting casualties and filing claims.
All casualties occurring after insurance under a binder has
attached shall be reported promptly to, and all claim documents filed
with, the Maritime Administration, Attention: Director, Office of
Subsidy and Insurance, Washington, DC 20590.
Sec. 308.305 [Reserved]
Sec. 308.306 Second Seamen's War Risk Policy, Form MA-242.
(a) The standard form of Second Seamen's War Risk Policy Form MA-
242, may be obtained from the American War Risk Agency or MARAD.
Subpart E--War Risk Builder's Risk Insurance
Sec. 308.400 Authority.
The Secretary of Transportation has delegated authority to the
Maritime Administrator to perform the functions vested in the Secretary
of Transportation by Title XII of the Merchant Marine Act, 1936, as
amended. The Maritime Administrator, pursuant to a finding by the
Secretary under section 1202(a) of the Act authorized, (46 App. U.S.C.
1982(a)) has authorized the issuance of war risk insurance on American
vessels under construction in shipyards in the United States.
Sec. 308.401 Eligibility for insurance.
A vessel is eligible for insurance if it is an American vessel as
defined in section 1201(a), Title XII of Merchant Marine Act, 1936, as
amended, (46 App. U.S.C. 1281) being constructed in a shipyard within
the United States.
Sec. 308.402 Insurance during vessel construction period.
(a) Prelaunching period. This period is from the date and time the
first material destined for inclusion as part of the vessel becomes at
risk at the shipyard of the builder to the date and time the vessel
first becomes water-borne after launching.
(b) Postlaunching period. This period is from the date and time the
vessel first becomes water-borne after launching to the date and time
of delivery of the vessel by the builder.
(c) Portions of periods. A vessel may be insured for a portion of
either period as cited in paragraph (a) or (b) of this section at the
sole discretion of the Maritime Administrator.
Sec. 308.403 Insured amounts.
(a) Prelaunching period. The amount insured during this period will
be the cost of material destined for inclusion as a part of the vessel
at risk at the shipyard of the builder, plus the cost of labor, other
direct charges, overhead, and profit not exceeding 10 percent, all as
determined from the builder's records.
(b) Postlaunching period. The amount insured during this period
will be: (1) An amount not in excess of the difference in amount
between the total amount of war risk insurance obtainable from
companies authorized to do an insurance business in a State of the
United States and the contract price of the vessel plus the cost of the
materials and equipment furnished by the owner and not included in such
contract price, or (2) an amount not in excess of the contract price of
the vessel plus the cost of materials and equipment furnished by the
owner and not included in the contract price: Provided, That no war
risk insurance is obtainable from companies authorized to do an
insurance business in a State of the United States.
(c) Maximum liability. The amount of any claim for damage to or the
total or constructive total loss of the vessel adjusted, compromised,
settled, adjudged or paid shall not exceed the amount insured:
Provided, That the amount payable hereunder shall not exceed the
maximum sum which the Maritime Administrator, as Underwriter, is
authorized to pay under any applicable Acts of Congress: Provided,
further, That where MARAD is an Excess Underwriter, the amount payable
under this insurance for damage to or the total or constructive total
loss of the vessel, after all sums due and payable under primary and
excess insurance written by commercial Underwriters have been
exhausted, shall be the balance, if any, of said claims.
Sec. 308.404 Application for insurance.
Application for insurance shall be made to the Maritime
Administration, Attention: Director, Office of Subsidy
[[Page 1137]]
and Insurance, Washington, DC 20590. The applications shall be signed
by all parties to be named as assureds, unless they have filed with the
Director, Office of Subsidy and Insurance, written designations of a
broker or brokers to act for them, in which case the applications may
be signed by such broker or brokers.
Sec. 308.405 Form of application.
Applications shall be submitted in duplicate and may be obtained
from the American War Risk Agency or MARAD.
Sec. 308.406. Issuance of policies; terms and conditions.
Upon acceptance of an application, a policy in the form specified
in Sec. 308.409 will be issued with endorsements MA-283(A) and MA-
283(D), or MA-283(B) and MA-283(D), or MA-283(C), and MA-283(D), as
appropriate.
Sec. 308.407 Premiums and payment.
For the prelaunching period premium will be charged on the average
value at risk during each calendar month or the daily pro rata part
thereof for periods of less than one calendar month. For the
postlaunching period premium will be charged on the amount insured for
the full period. Premiums shall be due and payable within thirty days
after receipt by the Assured of notice of the amount thereof and if not
paid within that period the insurance shall become null and void and of
no effect from the beginning of the period for which the premium charge
is made unless the Maritime Administrator agrees otherwise. Payment
shall be made to the Maritime Administration, Department of
Transportation, Washington, DC 20590, by check payable to the order of
``Maritime Administration, Department of Transportation.''
Sec. 308.408 Right of Maritime Administrator to change rate of
premium.
The Maritime Administrator, acting for the Secretary of
Transportation, shall have the right to change the rate of premium at
any time, and unless the revised rate of premium is accepted in writing
by the Assured within fifteen days after receipt by the Assured of
notice of the revised rate, the policy shall become null and void and
of no effect as of midnight, Standard Time, at the location of the
shipyard on the fifteenth day after receipt of said notice. Premium at
the revised rate shall be payable for the fifteen-day period during
which the insurance remained in force unless the Assured, within such
period, dispatches notice to the Maritime Administration by telegraph
of his refusal to accept such revised rate of premium, in which event
premium at the revised rate shall be payable for that portion of the
fifteen-day period prior to dispatch of such notice. Upon the dispatch
of such notice of non-acceptance the insurance shall terminate.
Sec. 308.409 Standard form of War Risk Builder's Risk Insurance
Policy, Form MA-283.
The standard form of War Risk Builder's Risk Insurance Policy, Form
MA-283 may be obtained from the American War Risk Agency or MARAD.
Sec. 308.410 Reporting casualties and filing claims.
Casualties shall be reported promptly to, and all claims documents
filed with MARAD, Attention, Director, Office of Subsidy and Insurance,
Washington, D.C. 20590.
Subpart F--War Risk Cargo Insurance
I--INTRODUCTION
Sec. 308.500 Authority.
The Secretary of Transportation has delegated authority to the
Maritime Administrator to perform the functions vested in the Secretary
by Title XII of the Merchant Marine Act, 1936, as amended, which
authority includes the insurance set forth in this Subpart, as provided
under section 1203(b) of the Act (46 App. U.S.C. 1283(b)). For the
purposes of this Subpart F--War Risk Cargo Insurance, the terms
``cargo'' and ``cargoes'' as used herein shall include loaded or empty
containers located aboard U.S.-flag and foreign-flag vessels insured
under Title XII, Merchant Marine Act, 1936, as amended. Cargo war risk
insurance will be written under either an open policy or a facultative
policy in accordance with the provisions of this subpart.
Sec. 308.501 Cargoes on which coverage is available.
The Maritime Administrator will be prepared to provide marine
insurance against loss or damage by the risks of war under approved
clauses on shipments of cargoes coming within one or more of the
following categories:
(a) Shipped or to be shipped on any American vessel, as defined in
section 1201(a) of the Merchant Marine Act, 1936, as amended (46 App.
U.S.C. 1281(a));
(b) Shipped or to be shipped on any foreign flag vessels owned by
citizens of the United States;
(c) Owned by citizens or residents of the United States, its
Territories or possessions;
(d) Imported to, or exported from, the United States, its
Territories or possessions, under contracts of sale or purchase by the
terms of which the risk of loss by war risks or the obligation to
provide insurance against such risks is assumed by or falls upon a
citizen or resident of the United States, its Territories or
possessions;
(e) Sold or purchased by citizens or residents of the United
States, its Territories or possessions, under contracts of sale or
purchase by the terms of which the risk of loss by war risks or the
obligation to provide insurance against such risks is assumed by or
falls upon a citizen or resident of the United States, its Territories
or possessions;
(f) Shipped between ports in the United States, or between ports in
the United States and its Territories and possessions, or between ports
in such Territories or possessions; and
(g) Shipped or to be shipped on any foreign flag vessels, whether
or not owned by citizens of the United States, if such vessels are
engaged in transportation in the water-borne commerce of the United
States or in such other transportation by water or such other services
as may be deemed by the Maritime Administrator to be in the interest of
the national defense or the national economy of the United States, when
so engaged.
Sec. 308.502 Additional insurance.
The assured may place increased value or additional insurance in
other markets beyond the amount of insurance provided by the Maritime
Administrator, but such insurance must be non-participating with the
Maritime Administrator's coverage, and without benefit of salvage or
right of contribution.
Sec. 308.503 Rate schedules.
Rate schedules published by the Maritime Administrator may be
obtained from an underwriting agent. All rate schedules are subject to
change by the Maritime Administrator at any time without notice. If no
rate is published for a voyage on which war risk coverage is available,
the Maritime Administrator will name a rate through an underwriting
agent upon application.
Sec. 308.504 Definition of territories and possessions.
Whenever reference is made to the territories and possessions of
the United States in this subpart or in any supplement thereto or any
policy of insurance issued pursuant to the provisions thereof, said
territories and possessions shall be deemed to include only the Virgin
Islands of the United States, the Commonwealth of Puerto
[[Page 1138]]
Rico, American Samoa, Guam, Wake Island, Midway Islands, and the Panama
Canal Zone.
II--OPEN POLICY WAR RISK CARGO INSURANCE
Sec. 308.505 General.
The Maritime Administrator is prepared to provide an open cargo war
risk insurance policy covering any cargoes described in Sec. 308.501.
The policy will be in the standard form of War Risk Open Cargo Policy,
Form MA-300, prescribed in Sec. 308.517. All policies will be issued by
underwriting agents appointed by the Maritime Administrator. All
underwriting agents will be domestic insurance companies authorized to
do a marine insurance business in a State of the United States.
Sec. 308.506 Application for an open cargo policy.
Application for an Open Cargo Policy shall be made by filing Form
MA-301, prescribed in Sec. 308.521, with an underwriting agent of the
Maritime Administration. The application shall state the applicant's
name and address; the person or persons to whom loss shall be payable;
the nature and geographic scope of the shipments to be covered under
the policy which shall not be broader than the coverage authorized in
Sec. 308.501; the requested effective date, which shall not be earlier
than the date of the completion of the requirements for the issuance of
the policy; and the basis of valuation to be incorporated in the
policy. An applicant may specify one basis of valuation for imports and
another for exports, and he may specify different bases of valuation
for different commodities or voyages, provided that each basis of
valuation specified by the applicant shall define the value by the use
of facts which existed prior to the date of the shipment and which are
readily ascertainable by either party after the safe arrival or loss of
the shipment.
Sec. 308.507 Security for payment of premiums.
Clause 21 of the policy requires the assured to maintain with the
Maritime Administrator a collateral deposit fund or a surety bond, to
secure the payment of the premiums, in an amount which shall at all
times exceed the unpaid premiums on all risks which have attached under
the policy. The minimum amount of the fund or of the surety bond shall
be $1,000. Clause 21 also provides that, within seven (7) days from the
time knowledge comes to the assured that the amount of the deposit or
the surety bond is insufficient to meet the requirements of Clause 21,
the assured shall deposit additional collateral or increase the surety
bond in an amount not less than double the amount of such
insufficiency, and for a sum which shall be a multiple of $500. If the
assured fails to increase the deposit or the surety bond within the
seven (7) day period, the policy automatically becomes void at the end
of the seven (7) day period except as to risks which have attached
prior to that date. The procedure for establishing a collateral deposit
fund is prescribed in Sec. 308.509, and the procedure for posting and
maintaining a surety bond is prescribed in Sec. 308.510. An application
for the issuance of an open cargo policy shall be ineffective unless a
collateral deposit fund is established and maintained, or a surety bond
is posted and maintained, in accordance with the provisions of this
section and Secs. 308.509 and 308.510.
Sec. 308.508 Issuance of an open cargo policy.
(a) Time. The underwriting agent will issue an Open Cargo Policy
within (15) days after the completion by the applicant of the
requirements set forth in Secs. 308.506 and 308.507 unless the time for
issuance is extended by the Maritime Administrator in writing. The
underwriting agent may not make any Open Cargo Policy effective with
respect to shipments attaching on a date earlier than the date when the
application was completed, but he may make it effective on the date of
the completion of the application or any date thereafter requested by
the applicant.
(b) Numbering. Each Open Cargo Policy supplied to the underwriting
agent by the Maritime Administrator shall be numbered by the Maritime
Administration before it is supplied to the underwriting agent. No two
numbers shall be the same. The underwriting agent when issuing the
policy shall add at the end of the policy number the agency number
assigned to that underwriting agent, and where policies are issued by
more than one office of an underwriting agent, the issuing office shall
also be identified in the policy number. For example, policies issued
by an office in New York will be designated by ``NY'' and policies
issued in San Francisco will be designated by ``SF'' prefixed to the
underwriting agent's agency number.
Sec. 308.509 Collateral deposit fund.
(a) Requirements. An assured electing to use a cash collateral
deposit fund pursuant to Sec. 308.507 shall comply with the provisions
of this section and Clause 21 of the Open Cargo Policy, Form MA-300,
prescribed in Sec. 308.517.
(b) Cash or Government bonds. To establish a collateral deposit
fund the applicant shall deposit with the underwriting agent a check
payable to the order of the ``Maritime Administration, Department of
Transportation'' for the amount of the fund, or United States
Government bonds having a par value at the time of deposit of the
amount of the fund, which shall be a multiple of $500 but not less than
$1,000, together with a letter of transmittal executed by the applicant
on Form MA-302, prescribed in Sec. 308.522. Upon receipt of the
deposit, the underwriting agent shall assign it a serial number and
transmit it to the Maritime Administration, Attention: Director, Office
of Financial Management, Washington, DC 20590. It is the responsibility
of the assured to make sure that this deposit fund is sufficient at all
times to cover the premiums payable on all risks which have attached
under the policy, so as to prevent the termination of the insurance
under the provisions of Clause 21.
(c) Overdue premiums. Pursuant to Clause 20, if the assured fails
to pay any premium when it becomes due and payable, he thereby breaches
the policy and it automatically ceases to insure any shipments which
would otherwise have attached after the expiration of fifteen (15) days
following the due date of the premium, unless within the fifteen (15)
day period the premium has been paid and the assured has otherwise
complied with the requirements of the policy, including the filing of
the closing report required by Clause 19 and the payment of the
reinstatement fee of $25 required by Clause 20. If the assured fails to
pay the premium within the fifteen (15) day period, the Maritime
Administrator may deduct from the assured's collateral deposit fund all
amounts due.
(d) Increase in amount of collateral as required by Clause 21. If
the assured fails to deposit additional collateral in the fund within
seven (7) days from the time knowledge comes to the assured that the
amount of collateral is insufficient to meet the requirements of Clause
21, the policy shall be void except as to risks which have attached
prior to the expiration of the seven (7) day period.
(e) Changes in amount of collateral. The assured may increase or
decrease the amount of the collateral deposit fund by amounts of not
less than $500 or multiples thereof, provided that the amount of the
fund shall not be less than the amount required by Clause 21, or the
required minimum of $1,000, whichever is greater. The effect of any
change in the amount of the collateral deposit shall be the sole
responsibility
[[Page 1139]]
of the assured, and the permission granted by this paragraph to change
the amount of collateral in the fund shall in no manner relieve the
assured of the responsibility imposed by Clause 21.
(f) Increase of collateral. To increase the amount of the
collateral on deposit in the fund, the assured shall transmit to the
underwriting agent on Form MA-302, prescribed in Sec. 308.522, a check
payable to the order of the ``Maritime Administration, Department of
Transportation'' or United States Government bonds having a par value
at the time of deposit of not less than the amount of the requested
increase. The increase shall become effective upon the date of the
receipt of the application and check or bonds by the underwriting
agent, as shown on Form MA-302.
(g) Decrease of collateral. To decrease the collateral deposit
fund, the assured shall file with the underwriting agent an application
on Form MA-305, prescribed in Sec. 308.525. The decrease shall become
effective upon the date of the receipt of the application by the
underwriting agent as shown on Form MA-305.
(h) Refund of collateral. Whenever the assured becomes entitled to
a refund of the collateral deposit, in whole or in part, by reason of a
request for a partial return of such collateral, or the cancellation of
the policy and the payment in full of all premiums then or thereafter
due, or the waiver by the Maritime Administrator of the requirements of
maintaining the collateral deposit fund because the assured is a
department or agency of the United States or is acting on behalf of
such a department or agency, or the substitution of a surety bond in
the place and stead of the collateral deposit fund, as provided in
Sec. 308.510(j), the Maritime Administrator will refund to the assured
the amount of the collateral deposit to which the assured is entitled;
provided, however, that the repayment of such collateral shall not be
made by the Maritime Administrator until the assured has filed a
closing report and paid in full all premiums with respect to all
shipments which had attached at the time of the receipt by the
underwriting agent of the application for the refund, Form MA-305, and
a certificate executed in duplicate on Form MA-306, prescribed in
Sec. 308.526, and, in the event of the substitution of a surety bond
for the collateral deposit fund, the receipt by the underwriting agent
of the surety bond properly executed, in accordance with Sec. 308.510.
Sec. 308.510 Surety bond.
(a) Requirements. An assured electing to post a surety bond
pursuant to Sec. 308.507 shall comply with the provisions of this
section and Clause 21 of the Open Cargo Policy, Form MA-300, prescribed
in Sec. 308.517.
(b) Amount of bond. An applicant who wishes to post a surety bond
shall deliver to the underwriting agent a surety bond on Form MA-308,
prescribed in Sec. 308.528, executed by the assured as principal, and
by the surety, in such amount as the assured determines to be necessary
to comply with Clause 21. Such amount shall be a multiple of $500 but
shall not be less than $1,000. Upon receipt of the surety bond, the
underwriting agent shall assign a serial number to it and transmit it
to the Maritime Administration, Attention: Director, Office of
Financial Approvals, Washington, DC 20590. It shall be the
responsibility of the assured to provide that the amount of the bond is
sufficient at all times to cover the premium payable on all risks which
have attached under the policy, so as to prevent the termination of the
insurance under the provisions of Clause 21.
(c) Surety. The sufficiency of the surety executing the bond shall
be subject to approval by the Maritime Administrator. The underwriting
agent may accept on behalf of the Maritime Administrator a surety bond
executed by a surety named on the United States Treasury Department's
approved list of sureties whose bonds are acceptable to the United
States Treasury Department to secure obligations due the United States,
provided the bond is within the maximum amount for which the surety is
so authorized to write bonds as shown by the approved list.
(d) Overdue premiums. Pursuant to Clause 20, if the assured fails
to pay any premium when it becomes due and payable, he thereby breaches
the policy and it automatically ceases to insure any shipments which
would otherwise have attached after the expiration of fifteen (15) days
following the due date of the premium, unless within the fifteen (15)
day period the premium has been paid and the assured has otherwise
complied with the requirements of the policy, including the filing of
the closing report required by Clause 19 and the payment of the
reinstatement fee of $25 required by Clause 20. If the assured fails to
pay the premium within the fifteen (15) day period, all amounts due
shall become a liability collectible under the surety bond and from the
assured.
(e) Increase in amount of bond as required by Clause 21. If the
assured fails to increase the amount of the surety bond within seven
(7) days from the time knowledge comes to the assured that the amount
of the bond is insufficient to meet the requirements of Clause 21, the
policy shall be void except as to risks which have attached prior to
the expiration of the seven (7) day period.
(f) Changes in amount of bond. The assured may increase or decrease
the amount of the surety bond by amounts of not less than $500 or
multiples thereof, provided that the amount of the bond shall not be
less than the amount required by Clause 21, or the required minimum of
$1,000, whichever is greater. The effect of any change in the amount of
the bond shall be the sole responsibility of the assured, and the
permission granted by this paragraph to change the amount of the bond
shall in no manner relieve the assured of the responsibility imposed by
Clause 21.
(g) Increase in amount of bond. To increase the surety bond the
assured shall transmit to the underwriting agent, on Form MA-310,
prescribed in Sec. 308.530, an endorsement duly executed by the assured
and the surety company on Form MA-311, prescribed in Sec. 308.531. The
increase shall become effective upon the date of the receipt of the
endorsement by the underwriting agent as shown on Form MA-311.
(h) Decrease in amount of bond. To decrease the amount of the bond,
the assured shall transmit to the underwriting agent, on Form MA-310,
prescribed in Sec. 308.530, an endorsement duly executed by the assured
and the surety on Form MA-311, prescribed in Sec. 308.531. The decrease
shall become effective upon the date of the receipt of the endorsement
by the underwriting agent as shown on Form MA-311, except as to
shipments which on that date are known or reported to the assured to be
in transit and which have attached under the policy and upon which
premium has not been paid in full.
(i) Termination of bond. Whenever the assured becomes entitled to a
termination of a surety bond by reason of the cancellation of the
policy and the payment in full of all premiums then or thereafter due,
or the waiver by the Maritime Administrator of the requirements of
maintaining the surety bond by an assured which is a department or
agency of the United States or is acting on behalf of such a department
or agency, or the substitution of a collateral deposit fund in the
place or stead of the surety bond, the underwriting agent shall execute
a release on Form MA-312, prescribed in Sec. 308.532. The release shall
be made effective as of:
(1) The effective date of the cancellation of the policy when the
bond is terminated for that reason, or
[[Page 1140]]
(2) The date of the Maritime Administrator's directive waiving the
requirement of a surety bond when the bond is terminated for that
reason, or
(3) The effective date of the establishment of a collateral deposit
fund when the bond is terminated for that reason.
(j) Substitution of bond for collateral deposit. An assured may
substitute a surety bond for a collateral deposit fund by delivering to
the underwriting agent a surety bond on Form MA-309, prescribed in
Sec. 308.529, executed by the assured as principal, and by the surety,
in such amount as the assured determines to be necessary to comply with
Clause 21. Such amount shall be a multiple of $500, but shall not be
less than $1,000. The collateral deposit fund will be refunded to the
assured after the bond has been posted, in accordance with the
provisions of Sec. 308.509(h).
Sec. 308.511 Cancellation of Open Cargo Policy.
An assured may cancel an Open Cargo Policy by delivering to the
underwriting agent, at least fifteen (15) days prior to the requested
date of cancellation, an application for cancellation executed by the
assured on Form MA-304, prescribed in Sec. 308.524, together with the
original policy. The policy shall be cancelled as of the effective date
requested in the application, which, unless otherwise agreed by the
Maritime Administrator in writing, shall not be a date earlier than
fifteen (15) days following the date of the receipt of the application
as acknowledged by the underwriting agent on Form MA-304, with respect
to all risks that have not attached prior to said effective date. Such
cancellation shall not relieve the assured of the obligation to file
closing reports with respect to all risks which attached prior to the
effective date of the cancellation and to pay all unpaid premiums.
Within four (4) months of the effective date of cancellation, unless
otherwise agreed by the Maritime Administrator in writing, the assured
must file a closing report in duplicate on Form MA-313, prescribed in
Sec. 308.533, of all shipments covered by the policy for which closing
reports have not been previously filed. The assured shall mark this
closing report ``Final Closing Report on Cancellation of Policy'', and
file a certificate on Form MA-313-B, prescribed in Sec. 308.535,
executed by the assured in duplicate. Thereafter, when all unpaid
premiums have been paid, the assured will become entitled to a refund
of the collateral deposit, or cancellation of the surety bond in
accordance with Secs. 308.509 and 308.510. If the assured has lost or
mislaid the original policy and is unable to produce it for
cancellation, the assured shall execute a letter of indemnity and such
other documents as may be required by the Maritime Administrator.
Sec. 308.512 Declaration of shipments under open cargo policy.
(a) Closing report. (1) The assured shall file with the
underwriting agent, not later than the twenty-fifth day of each month,
a closing report for all inward shipments and a closing report for all
outward shipments, and pay the premium and fees, for all shipments
covered during the preceding calendar month, as required by Clause 19.
Each closing report shall be filed in duplicate on Form MA-313,
prescribed in Sec. 308.533, supported by a certificate executed by the
assured on Form MA-313-A, prescribed in Sec. 308.534. If the assured
has no shipments to report during any calendar month, the closing
report, Form MA-313, shall, nevertheless, be filed with one or both of
the following statements, depending upon their applicability, noted
thereon certifying that:
(i) No inward shipment coming within the scope of this policy
arrived at destination during the preceding calendar month, and that
during the preceding calendar month no knowledge has come to the
assured of an inward shipment covered under the terms of the policy
which will not arrive by reason of loss, frustration or other similar
cause,
(ii) No outward shipment coming within the scope of this policy was
made during the preceding calendar month, and
(iii) Whenever a sea passage is made with respect to cargo covered
under the policy by a barge or sailing vessel the assured shall note
that fact upon the closing report, unless the Maritime Administrator
otherwise agrees.
(2) An assured reporting for one calendar month shall not include
therein a report of a shipment due to be reported in the report for the
next succeeding calendar month. Thus, the report of January closing
shipments filed in February does not include February closings.
(b) Inward shipments. The closing report covering inward shipments
shall include:
(1) All such shipments which have arrived at the port of
destination during the preceding calendar month, and
(2) All such shipments with respect to which inability to so arrive
by reason of loss, frustration, or other similar causes has come to the
knowledge of the assured during the preceding calendar month.
(c) Outward shipments. The closing report covering outward
shipments shall include all such shipments which attached under the
policy during the preceding calendar month.
(d) Definition of inward and outward shipments. A shipment will be
classified as an inward shipment or as an outward shipment by reference
to the geographical location of the assured with respect to the
movement of the shipment. The address of the assured as stated in the
application filed by him for the policy shall be deemed to be the
assured's geographical location for the purpose of determining whether
the shipment is inward or outward. To illustrate, if an assured has
stated in his application that his address is in Hawaii, the assur
FR Doc. 96-292 War Risk Insurance
ed's
shipments of goods from the United States to Hawaii would be classified
as inward, and his shipments from Hawaii to the United States would be
classified as outward. Any shipments that cannot be classified as
inward or outward under this definition shall be treated as inward
shipments for the purposes of the declaration.
(e) Supplemental closing report. If an assured files a closing
report and thereafter discovers that one or more additional shipments
should have been included in the report, then, even though the assured
has executed the certificate on Form MA-313-A, prescribed in
Sec. 308.534, or Form MA-313-B, prescribed in Sec. 308.535, in
connection with the closing report, the assured must nevertheless amend
the closing report by filing a supplemental closing report supported by
an appropriate certificate. The supplemental closing report must be
accompanied by a statement in writing signed by the assured giving the
reasons for the omission of such shipments from the original closing
report. If the Maritime Administrator finds that the failure to file
the complete closing report was either inadvertent or unintentional or
arose by reason of causes beyond the control of the assured, the
otherwise automatic termination of the policy by reason of a breach of
the warranty embodied in Clause 20 shall be avoided pursuant to the
provisions of Clause 23.
Sec. 308.513 Payment of premiums and fees.
The assured shall pay the premium, when his closing report is
filed, for all shipments shown on his closing report for the preceding
month, at the rates prescribed by the Maritime Administrator and in
effect on the date of the ocean bill of lading, or if an ocean
[[Page 1141]]
bill of lading was not issued, on the date of the equivalent shipping
document, or if no ocean bill of lading or equivalent shipping document
was issued, or if such documents were undated, on the date the goods
were laden on the overseas vessel, as required by Clause 19. All
payments of premium or fees must be made by check or money order
payable to the order of the ``Maritime Administration, Department of
Transportation.''
Sec. 308.514 Return premium.
No premium will be returned to the assured with respect to a
shipment of goods that attached under the policy except where there was
a declaration of value at variance with Clause 8, or an error in the
application of a rate or in the computation of a premium, or the
insured goods were short-shipped. An application for the return of a
premium shall be made on Form MA-307, prescribed in Sec. 308.527, filed
in duplicate with the Underwriting Agent who will transmit it to the
Maritime Administrator for payment.
Sec. 308.515 Payment in event of loss.
All claims for losses shall be filed by the assured with the
Underwriting Agent who issued the policy. Such claims must be supported
by the customary documents required in connection with war risk
insurance claims, together with appropriate declarations as required by
Clause 9, and such further data as may now or hereafter be required by
the Maritime Administrator.
Sec. 308.516 Failure to comply with Clause 21.
(a) If the assured willfully fails to maintain a collateral deposit
fund or a surety bond in an amount sufficient to meet the requirements
of Clause 21, the policy becomes void from the date the fund or bond
was first insufficient, but, if the assured's failure was inadvertent,
the policy may be reinstated when the assured complies with Clause 21,
and shows to the satisfaction of the Maritime Administrator that his
failure was inadvertent and not willful. If the failure was in fact
inadvertent, the assured shall file a declaration on Form MA-314,
prescribed in Sec. 308.536, executed in duplicate, with the
Underwriting Agent within seven (7) days from the time knowledge comes
to the assured of the insufficiency of the collateral deposit fund or
surety bond unless the time for filing such declaration is extended by
permission of the Maritime Administrator. If the space provided in the
declaration, Form MA-314, for an explanation of the circumstances
whereby the assured first had knowledge that the collateral was not
sufficient, the assured shall attach to the declaration a detailed
statement and include the same by reference in the declaration.
(b) If any policy becomes void by reason of the failure of the
assured to deposit additional collateral or increase the amount of its
surety bond under the provisions of Clause 21, the Maritime
Administrator reserves the right to refuse to issue another policy to
such assured for a period of 90 days.
Sec. 308.517 Open cargo policy, Form MA-300.
The standard form of War Risk Open Cargo, Form MA-300, may be
obtained from the American War Risk Agency or MARAD.
Sec. 308.518 Standard optional endorsement No. 1, Form MA-300-A.
Standard Optional Endorsement No. 1, which may be obtained from the
American War Risk Agency or MARAD, limits the amount payable for the
loss of goods to the actual bona fide pecuniary loss to the Assured,
exclusive of any allowance for anticipated or accrued profit arising
out of the insured venture. An Assured may elect to have his Open Cargo
Policy endorsed with Standard Optional Endorsement No. 1 applicable on
all shipments, or on all outward shipments, or on all inward shipments,
or on named commodities except goods sold by the Assured prior to
loading on board the overseas vessel and shipped for the account and at
the risk of third persons other than a branch subsidiary or affiliate
of the Assured. When an Assured has elected to have Standard Optional
Endorsement No. 1 made applicable to certain named commodities he may
not change to a different basis of valuation for those commodities
until after he has given ninety (90) days written notice to the
Maritime Administrator through the Underwriting Agent of his election
to make the change. Application for Standard Optional Endorsement No. 1
may be made to the Underwriting Agent which is authorized to issue the
endorsement without prior approval of the Maritime Administrator.
Sec. 308.519 Standard optional endorsement No. 2, Form MA-300-B.
Standard Optional Endorsement No. 2, which may be obtained from the
American War Risk Agency or MARAD, amends the policy to cover shipments
made to the Assured or shipped by the Assured as agent for the account
and risk of a principal. Application for Standard Optional Endorsement
No. 2 may be made to the Underwriting Agent, which is authorized to
issue the endorsement without prior approval of the Maritime
Administrator.
Sec. 308.520 Standard optional endorsement No. 3, Form MA-300-C.
Standard Optional Endorsement No. 3, which may be obtained from the
American War Risk Agency or MARAD, amends the policy to include
shipments of diamonds for industrial purposes, or rubies or sapphires,
natural or synthetic, used for instruments or watch jewels imported to
the Continental United States (excluding Alaska). Application for
Standard Optional Endorsement No. 3 may be made to the Underwriting
Agent, which shall transmit it to the Maritime Administrator for
approval or disapproval of the issuance of the endorsement.
Sec. 308.521 Application for open cargo policy, Form MA-301.
The standard form of application for a War Risk Open Cargo Policy
may be obtained from the American War Risk Agency or MARAD.
Sec. 308.522 Collateral deposit fund, letter of transmittal, Form MA-
302.
The standard form of letter of transmittal for use in establishing
a collateral deposit fund, may be obtained from the American War Risk
Agency or MARAD.
Sec. 308.523 Application for revision of open cargo policy, Form MA-
303.
An application for the revision of an Open Cargo Policy shall be
filed in duplicate with the Underwriting Agent on a form which may be
obtained from the American War Risk Agency or MARAD.
Sec. 308.524 Application for cancellation of open cargo policy, Form
MA-304.
The standard form of application for cancellation of an Open Cargo
Policy Form MA-304 may be obtained from the American War Risk Agency or
MARAD.
Sec. 308.525 Application for decrease in amount of cash collateral
fund, Form MA-305.
Application for decrease in the amount of the cash collateral
deposit fund shall be made on Form MA-305, which may be obtained from
the American War Risk Agency or MARAD.
Sec. 308.526 Certificate for repayment of decrease of collateral
deposit fund, Form MA-306.
The standard form of certificate for repayment of the amount of the
decrease of the collateral deposit fund, Form MA-306, may be obtained
from the American War Risk Agency or MARAD.
[[Page 1142]]
Sec. 308.527 Application for return premium, Form MA-307.
An application for the return of premium, which may be obtained
from the American War Risk Agency or MARAD, shall be filed in duplicate
with the Underwriting Agent on Form MA-307.
Sec. 308.528 Surety Bond A, Form MA-308.
The Standard Form of Surety Bond A, Form MA-308, which may be
obtained from the American War Risk Agency or MARAD, shall be used by
an Assured who elects to post a surety bond as security for payment of
the premiums pursuant to Clause 21 of the policy:
Sec. 308.529 Surety Bond B, Form MA-309.
An Assured who elects to substitute a surety bond for a collateral
deposit fund shall submit Form MA-309, which may be obtained form the
American War Risk Agency or MARAD.
Sec. 308.530 Letter requesting increase or decrease in amount of
surety bond, Form MA-310.
An endorsement increasing or decreasing the amount of the surety
bond, Form MA-310, shall be transmitted to the underwriting agent and
may be obtained from the American War Risk Agency or MARAD.
Sec. 308.531 Endorsement of surety bond increasing or decreasing
amount of coverage, Form MA-311.
The Standard Form of Endorsement which shall be used in increasing
or decreasing the amount of a surety bond, Form MA-311, may be obtained
from the American War Risk Agency or MARAD.
Sec. 308.532 Release of surety bond, Form MA-312.
The Standard Form of Release of Surety bond, Form MA-312, may be
obtained from the American War Risk Agency or MARAD.
Sec. 308.533 Closing report, Form MA-313.
This form, which may be obtained from the American War Risk Agency
or MARAD, shall be filed in duplicate with the Underwriting Agent not
later than the 25th day of each month.
Sec. 308.534 Certificate to be attached to closing report, Form MA-
313-A.
The standard form of Certificate to be attached to the closing
report, Form MA-313-A, may be obtained from the American War Risk
Agency or MARAD and shall be filed each month.
Sec. 308.535 Certificate to be attached to final closing report, Form
MA-313-B.
The Standard Form of Certificate, Form MA-313-B, shall be attached
to the final closing report after cancellation of the policy, and may
be obtained from the American War Risk Agency or MARAD.
Sec. 308.536 Declaration where failure to comply with Clause 21 was
inadvertent, Form MA-314.
An Assured that fails inadvertently to maintain a collateral
deposit fund or surety bond in an amount sufficient to meet the
requirements of Clause 21 of the Policy shall file this Declaration,
Form MA-314, which may be obtained from the American War Risk Agency or
MARAD.
III--FACULTATIVE WAR RISK CARGO INSURANCE
Sec. 308.538 General.
The Maritime Administrator is prepared to provide facultative war
risk insurance policies covering any cargoes described in Sec. 308.501
which are designated by an applicant prior to the attachment of risks,
if the applicant does not have an Open Cargo Policy issued by the
Maritime Administrator, or if he has a shipment which is not covered by
his Open Cargo Policy. However, a person with regular shipments is
urged to avail himself of the advantages of the automatic coverage of
an Open Cargo Policy. The Maritime Administrator reserves the right to
decline to quote rates or bind insurance on shipments of cargo that
could be covered by an Open Cargo Policy unless the applicant can show
to the satisfaction of the Maritime Administrator that the risk is not
one of a series of similar risks forming part of a continual flow of
business for the applicant. The policy will be in the standard form of
War Risk Facultative Cargo Policy, Form MA-316, prescribed in
Sec. 308.545. All policies shall be issued by Underwriting Agents
appointed by the Maritime Administrator. All Underwriting Agents shall
be domestic insurance companies authorized to do a marine insurance
business in a State of the United States.
Sec. 308.539 Application.
(a) Preliminary request. Application for a Facultative Cargo Policy
shall be made by filing a preliminary request in writing (including
telegram) with an Underwriting Agent of the Maritime Administration,
setting forth the following information:
(1) The name and address of the applicant;
(2) The amount of insurance requested;
(3) The commodity and quantity to be insured;
(4) The voyage to be covered;
(5) The name of the vessel upon which the cargo will be shipped, if
known, the name of the steamship line, if known, and the date of
shipment, if the applicant is submitting the request to bind war risk
in writing; for security reasons, if the applicant is submitting the
order to bind war risk insurance by telefax, neither the name of the
vessel nor the name of the steamship line nor the anticipated date of
sailing, should be mentioned. Mentioning such information in a telefax
may result in a denial of insurance to the applicant. Any envelope
transmitting a letter containing such information shall be marked
``confidential.''
(b) Binder. Before the insurance can be bound, the applicant shall
provide the Underwriting Agent with a properly prepared binder on Form
MA-315 prescribed in Sec. 308.544. The binder must be submitted in
duplicate, accompanied by check or Money Order payable to the order of
the Maritime Administration, Department of Transportation'' for the
full amount of the premium computed on the amount to be insured at the
rate set by the Maritime Administrator. Any application for facultative
cargo war risk insurance received by an Underwriting Agent later than 4
p.m. (Local War Time) shall be considered the next day's business.
(c) Optional loss limits clause. Clause 9 of the standard form of
facultative cargo policy, Form MA-316, prescribed in Sec. 308.545,
limits the amount payable for loss to the fair market value at the
place and approximate time of the attachment of risk, plus the cost of
marine insurance, transportation and expenses incident thereto, and war
risk insurance with respect to the lost or damaged goods, or if it is
impossible to determine the fair market value at place and time of
attachment of risk, the fair market value at the designated port of
arrival on the date of the attachment of the risk, plus the cost of
marine insurance, transportation and expenses incidental thereto, and
war risk insurance with respect to the lost or damaged goods, or if the
goods had been purchased prior to loading, the actual amount paid or
payable to the seller for the goods less all discounts, plus the cost
of marine insurance, transportation and expenses incidental thereto,
and war risk insurance with respect to the lost or damaged goods. In
lieu of these loss limits, the Assured by so specifying in his
application, and the binder may have attached to the policy when issued
Standard Optional Endorsement No. 1-A, Form MA-316, prescribed in
Sec. 308.546, which limits the amount payable for loss to the actual
bona fide
[[Page 1143]]
pecuniary loss to the Assured, exclusive of any allowance for
anticipated or accrued profits arising out of the insured venture.
Sec. 308.540 Premiums.
(a) Rates. Rate Schedules for war risk facultative cargo insurance
will be published by the Maritime Administrator from time to time, and
may be obtained from an Underwriting Agent. All Rate Schedules are
subject to change by the Maritime Administrator without notice. If no
rate is published for a voyage on which war risk facultative cargo
insurance is available, the Maritime Administrator will name a rate
through an Underwriting Agent upon application. Whenever an applicant
for war risk facultative cargo insurance receives a definite rate
quotation and desires to bind insurance at the quoted rate, an order to
bind the insurance in accordance with the procedure set forth in this
subpart should be submitted within two business days following the day
of quotation accompanied by check or Money Order payable to the order
of ``Maritime Administration, Department of Transportation'' for the
full amount of the premium thereon computed on the amount to be insured
at the rate set by the Maritime Administrator, or the quotation will
expire.
(b) Return premium. Where goods are short-shipped, the amount of
insurance may be reduced by an amount computed by applying to the
original amount of insurance the proportion which the quantity of
merchandise short-shipped (i.e., bales, barrels, tons, and other
designations of quantity) bears to the total quantity of merchandise
originally declared for insurance. Where more than one class of
merchandise is insured under one policy (e.g., fuel, oil and gasoline)
the reduced amount of insurance must be computed separately on each
item. Where the amount of insurance is reduced, the Maritime
Administrator will give consideration to requests for proportionate
returns of premium. An application for the return of a premium must be
submitted to the Underwriting Agent in quadruplicate on Form MA-317,
prescribed in Sec. 308.547.
Sec. 308.541 Issuance.
(a) Binder. The Underwriting Agent is authorized to issue a
facultative policy in Form MA-316, prescribed in Sec. 308.545, when
there has been presented to him a properly prepared binder on Form MA-
315, prescribed in Sec. 308.544, together with the payment of the
premium as required, and such policy shall be issued as soon as
possible after the binder form has been presented to the Underwriting
Agent. Prior to the issuance of the policy, the Underwriting Agent is
authorized to accept the risk on behalf of the Maritime Administrator
by signing the binder. The Maritime Administrator will provide each
Underwriting Agent with a supply of facultative policies which shall
not be valid until countersigned by the Underwriting Agent. The
Underwriting Agent shall keep a permanent record of all such policies
and the Assured to whom the policy is issued.
(b) Numbering. Each Facultative Cargo Policy supplied to the
Underwriting Agent by the Maritime Administrator shall be numbered by
the Maritime Administration before it is supplied to the Underwriting
Agent. No two numbers shall be the same. The Underwriting Agent when
issuing the policy shall add at the end of the Policy number the agency
number assigned to that Underwriting Agent, and where policies are
issued by more than one office of an Underwriting Agent the issuing
office shall also be identified in the policy number. For example, the
policies issued by an office in New York will be designated ``NY'' and
policies issued in San Francisco will be designated by ``SF'' prefixed
to the Underwriting Agent's agency number.
Sec. 308.542 Warranty re thirty-day shipments.
If, after an effective binding of war risk insurance on a shipment
of cargo, the assured believes that it will be impossible to comply
with the warranty requiring the goods to be shipped and in transit
within thirty days from the effective date of binding, such an assured
may apply to the Maritime Administrator, through the Underwriting
Agent, to modify the warranty. If the Maritime Administrator is
satisfied that an extension of time within which the goods are
warranted to be shipped and in transit should be granted, he will do
so, but additional premium may be charged in the discretion of the
Maritime Administrator.
Sec. 308.543 Cancellation.
Facultative war risk insurance is not subject to cancellation by
the Assured unless the goods are not shipped within thirty days
following the effective date of binding, and then only if the policy is
returned for cancellation.
Sec. 308.544 Facultative binder, Form MA-315.
The standard form of War Risk Facultative Cargo Binder, which may
be obtained from the American War Risk Agency of MARAD, shall be
completed by the applicant and submitted, in duplicate, to an
Underwriting Agent before the insurance can be bound.
Sec. 308.545 Facultative cargo policy, Form MA-316.
The standard form of War Risk Facultative Cargo Policy, Form MA-
316, may be obtained from the American War Risk Agency or MARAD.
Sec. 308.546 Standard optional endorsement No. 1-A, Form MA-316-A.
Standard Optional Endorsement No. 1-A limits the amount payable for
the loss of goods to the actual bona fide pecuniary loss to the
Assured, exclusive of any allowance for anticipated or accrued profit
arising out of the insured venture. (Similar provisions for Open Cargo
Policies are contained in Standard Optional Endorsement No. 1, Form MA-
300-A, prescribed in Sec. 308.518.) Application for Standard Optional
Endorsement No. 1-A shall be made to the Underwriting Agent at the time
application is made for the policy. The Underwriting Agent is
authorized to issue the endorsement without prior approval of the
Maritime Administrator. This form may be obtained from the American War
Risk Agency or MARAD.
Sec. 308.547 Application for return premium, Form MA-317.
An application for the return of premium must be filed in duplicate
with the Underwriting Agent on Form MA-317, which may be obtained from
the American War Risk Agency or MARAD.
IV--GENERAL
Sec. 308.548 Standard form of underwriting agency agreement for cargo,
Form MA-318.
This form, which may be obtained from the American War Risk Agency
or MARAD, is the standard form of underwriting agency agreement
applicable with respect to agreements executed by the Maritime
Administrator and domestic insurance companies authorized to do a
marine insurance business in any State of the United States, appointing
such companies as Underwriting Agents to issue war risk cargo policies
in accordance with the provision of the agreement and this subpart.
Sec. 308.549 Application for appointment of Cargo Underwriting Agent,
Form MA-319
Any domestic insurance company authorized to do a marine insurance
business in any State of the United States may apply for appointment as
a Cargo Underwriting Agent by submitting to the Maritime
[[Page 1144]]
Administrator a letter and Form MA-399, which may be obtained from the
American War Risk Agency or MARAD.
Sec. 308.550 Certificate, Form MA-320.
Wherever any provision of this subpart, or any amendment thereto,
requires the Assured to make a declaration or certification under the
penalties of perjury, and the form of the declaration or certificate is
not prescribed, the Assured may execute a certificate on Form MA-320-A
for an individual, on Form MA-320-B for a partnership, or on Form MA-
320-C for a corporation, which forms may be obtained from the American
War Risk Agency or MARAD.
Sec. 308.551 War Risk insurance clearing agency agreement for cargo,
Form MA-321.
The standard form of clearing agency agreement, Form MA-321, shall
be executed by the Maritime Administrator and domestic insurance
companies, or groups of domestic insurance companies authorized to do a
marine insurance business in any State of the United States, appointing
such companies or groups of companies as clearing agents, which form
may be obtained from the American War Risk Agency or MARAD.
Sec. 308.552 Effective date.
This subpart shall be effective as and when the Maritime
Administrator finds that war risk cargo insurance adequate for the
needs of the waterborne commerce of the United States cannot be
obtained on reasonable terms and conditions from companies authorized
to do an insurance business in a State of the United States.
Subpart G--Records Retention
Sec. 308.600 Records retention requirement.
The records specified in Secs. 308.8, 308.517, and 308.548 of this
part shall be retained until a release is granted by the MARAD, at
which time MARAD will take custody of the records.
Dated: January 4, 1996.
By Order of the Maritime Administration.
Joel Richard,
Secretary, Maritime Administration.
[FR Doc. 96-292 Filed 1-11-96; 2:00 pm]
BILLING CODE 4910-81-P
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