1–30–01 Tuesday Vol. 66 No. 20 Jan. 30, 2001 Pages 8151–8356
VerDate 11-MAY-2000 19:58 Jan 29, 2001 Jkt 194001 PO 00000 Frm 00001 Fmt 4710 Sfmt 4710 E:\FR\FM\30JAWS.LOC pfrm11 PsN: 30JAWS
1 II Federal Register / Vol. 66, No. 20 / Tuesday, January 30, 2001
The FEDERAL REGISTER is published daily, Monday through SUBSCRIPTIONS AND COPIES Friday, except official holidays, by the Office of the Federal Register, National Archives and Records Administration, PUBLIC Washington, DC 20408, under the Federal Register Act (44 U.S.C. Subscriptions: Ch. 15) and the regulations of the Administrative Committee of Paper or fiche 202–512–1800 the Federal Register (1 CFR Ch. I). The Superintendent of Assistance with public subscriptions 512–1806 Documents, U.S. Government Printing Office, Washington, DC 20402 is the exclusive distributor of the official edition. General online information 202–512–1530; 1–888–293–6498 Single copies/back copies: The Federal Register provides a uniform system for making available to the public regulations and legal notices issued by Paper or fiche 512–1800 Federal agencies. These include Presidential proclamations and Assistance with public single copies 512–1803 Executive Orders, Federal agency documents having general FEDERAL AGENCIES applicability and legal effect, documents required to be published Subscriptions: by act of Congress, and other Federal agency documents of public interest. Paper or fiche 523–5243 Assistance with Federal agency subscriptions 523–5243 Documents are on file for public inspection in the Office of the Federal Register the day before they are published, unless the issuing agency requests earlier filing. For a list of documents currently on file for public inspection, see http://www.nara.gov/ FEDERAL REGISTER WORKSHOP fedreg. The seal of the National Archives and Records Administration THE FEDERAL REGISTER: WHAT IT IS AND authenticates the Federal Register as the official serial publication HOW TO USE IT established under the Federal Register Act. Under 44 U.S.C. 1507, the contents of the Federal Register shall be judicially noticed. FOR: Any person who uses the Federal Register and Code of Federal Regulations. The Federal Register is published in paper and on 24x microfiche. It is also available online at no charge as one of the databases WHO: Sponsored by the Office of the Federal Register. on GPO Access, a service of the U.S. Government Printing Office. WHAT: Free public briefings (approximately 3 hours) to present: 1. The regulatory process, with a focus on the Federal Register The online edition of the Federal Register is issued under the system and the public’s role in the development of authority of the Administrative Committee of the Federal Register regulations. as the official legal equivalent of the paper and microfiche editions (44 U.S.C. 4101 and 1 CFR 5.10). It is updated by 6 a.m. each 2. The relationship between the Federal Register and Code day the Federal Register is published and it includes both text of Federal Regulations. and graphics from Volume 59, Number 1 (January 2, 1994) forward. 3. The important elements of typical Federal Register documents. GPO Access users can choose to retrieve online Federal Register 4. An introduction to the finding aids of the FR/CFR system. documents as TEXT (ASCII text, graphics omitted), PDF (Adobe Portable Document Format, including full text and all graphics), WHY: To provide the public with access to information necessary to or SUMMARY (abbreviated text) files. Users should carefully check research Federal agency regulations which directly affect them. retrieved material to ensure that documents were properly There will be no discussion of specific agency regulations. downloaded. On the World Wide Web, connect to the Federal Register at http:/ WASHINGTON, DC /www.access.gpo.gov/nara. Those without World Wide Web access can also connect with a local WAIS client, by Telnet to WHEN: February 20, 2001, from 9:00 a.m. to Noon swais.access.gpo.gov, or by dialing (202) 512-1661 with a computer (E.S.T.) and modem. When using Telnet or modem, type swais, then log WHERE: Office of the Federal Register in as guest with no password. Conference Room For more information about GPO Access, contact the GPO Access 800 North Capitol Street, NW. User Support Team by E-mail at [email protected]; by fax at (202) 512–1262; or call (202) 512–1530 or 1–888–293–6498 (toll Washington, DC free) between 7 a.m. and 5 p.m. Eastern time, Monday–Friday, (3 blocks north of Union Station Metro) except Federal holidays. RESERVATIONS: 202–523–4538 The annual subscription price for the Federal Register paper edition is $638, or $697 for a combined Federal Register, Federal Register Index and List of CFR Sections Affected (LSA) subscription; the microfiche edition of the Federal Register including the Federal Register Index and LSA is $253. Six month subscriptions are available for one-half the annual rate. The charge for individual copies in paper form is $9.00 for each issue, or $9.00 for each group of pages as actually bound; or $2.00 for each issue in microfiche form. All prices include regular domestic postage and handling. International customers please add 25% for foreign handling. Remit check or money order, made payable to the Superintendent of Documents, or charge to your GPO Deposit Account, VISA, MasterCard or Discover. Mail to: New Orders, Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250–7954. There are no restrictions on the republication of material appearing in the Federal Register. How To Cite This Publication: Use the volume number and the page number. Example: 66 FR 12345.
.
VerDate 11-MAY-2000 19:58 Jan 29, 2001 Jkt 194001 PO 00000 Frm 00002 Fmt 4710 Sfmt 4710 E:\FR\FM\30JAWS.LOC pfrm11 PsN: 30JAWS
2 III
Contents Federal Register Vol. 66, No. 20
Tuesday, January 30, 2001
Agricultural Marketing Service Air pollutants; hazardous; national emission standards: RULES Clean Air Act— Livestock mandatory reporting program; establishment; Source category list and standards schedule; revisions, effective date delay, 8151–8152 8220–8229 Air pollution control: Agriculture Department Citizens suits; proposed settlements— See Agricultural Marketing Service Idaho Clean Air Force et al., 8229–8230 See Food Safety and Inspection Service Sierra Club v. Browner, 8229 See Forest Service Grants and cooperative agreements; availability, etc.: Pollution Prevention Incentives for States Program, 8230– Bonneville Power Administration 8234 NOTICES Superfund program: Environmental statements; availability, etc.: Prospective purchaser agreements— Shelton-Kitsap No. 2 115-kilovolt transmission line, WA; Metcoa Radiation Site, PA, 8234 rebuilding, 8209–8210 Water supply: Underground injection control program— Wyoming; substantial modification to State program, Census Bureau 8234–8236 NOTICES Agency information collection activities: Export Administration Bureau Proposed collection; comment request, 8190–8194 NOTICES Meetings: Commerce Department Sensors and Instrumentation Technical Advisory See Census Bureau Committee, 8194 See Export Administration Bureau See Foreign-Trade Zones Board Federal Aviation Administration See International Trade Administration RULES See National Institute of Standards and Technology Airworthiness directives: See National Oceanic and Atmospheric Administration CFM International, 8165–8167 NOTICES Short Brothers, 8167–8168 Agency information collection activities: Airworthiness standards: Submission for OMB review; comment request, 8189– Special conditions— 8190 Honeywell International, Inc.; Boeing Model 747-300 series airplanes, 8162–8165 Committee for the Implementation of Textile Agreements Class E airspace, 8168–8174 NOTICES PROPOSED RULES Cotton, wool, and man-made textiles: Airworthiness directives: Burma, 8204–8205 Sikorsky, 8184–8186 NOTICES Comptroller of the Currency Advisory circulars; availability, etc.: PROPOSED RULES Flightcrew procedures during taxi operations, 8254 Investment securities, bank activities and operations, and Exemption petitions; summary and disposition, 8254–8255 leasing, 8178–8184 Federal Communications Commission RULES Defense Department Television broadcasting: See Navy Department Broadcast television; national ownership rule compliance; reconsideration petition denied, 8176– Energy Department 8177 See Bonneville Power Administration See Federal Energy Regulatory Commission Federal Energy Regulatory Commission NOTICES Environmental Protection Agency Electric rate and corporate regulation filings: PROPOSED RULES New York Independent System Operator, Inc., et al., Water pollution control: 8214–8217 National pollutant discharge elimination system Environmental statements; notice of intent: (NPDES)— Eastern Shore Natural Gas Co., 8217–8218 Concentrated animal feeding operations; guidelines and Hydroelectric applications, 8218–8219 standards, 8186–8187 Applications, hearings, determinations, etc.: NOTICES Algonquin Gas Transmission Co., 8210–8211 Agency information collection activities: ANR Pipeline Co., 8211 Proposed collection; comment request, 8219–8220 Columbia Gulf Transmission Co., 8211
VerDate 11
Indiana Gas Co., Inc., 8211–8212 Housing programs: Natural Gas Trading Corp., 8212 Mandatory expense deductions and earned income Northwestern Wisconsin Electric Co., 8212–8213 disallowances for persons with disabilities; income Texas Eastern Transmission Corp., 8213 adjustment determination Viking Gas Transmission Co., 8213 Effective date delay, 8174–8175 Williston Basin Interstate Pipeline Co., 8213–8214 Mortgage and loan insurance programs: Single-family mortgage insurance— Federal Housing Finance Board Section 221(d)(2) mortgage insurance program; RULES discontinuation; effective date delay, 8175–8176 Federal home loan bank system: Public and Indian housing: Capital structure requirements, 8261–8321 Indian Tribes and Alaska Native Villages; community development block grants program; application Federal Reserve System process NOTICES Effective date delay, 8176 Banks and bank holding companies: Formations, acquisitions, and mergers, 8237 Interior Department Formations, acquisitions, and mergers; correction, 8237 See Land Management Bureau Permissible nonbanking activities, 8237 See Reclamation Bureau
Food and Drug Administration Internal Revenue Service NOTICES NOTICES Reports and guidance documents; availability, etc.: Agency information collection activities: Red blood cells; collection by automated apheresis Proposed collection; comment request, 8256–8258 methods; recommendations, 8238 International Trade Administration NOTICES Food Safety and Inspection Service Antidumping: PROPOSED RULES Cold-rolled and corrosion-resistant carbon steel flat Meat and poultry inspection: products from— On-line antimicrobial reprocessing of pre-chill poultry Korea, 8197–8198 carcasses; performance standards, 8178 NOTICES Dynamic random access memory semiconductors of one Meetings: megabit or above from— Codex Alimentarius Commission— Korea, 8198 Food Additives and Contaminants Codex Commission, Pasta from— 8188–8189 Italy and Turkey, 8198–8199 Steel concrete reinforcing bars from— Foreign-Trade Zones Board Belarus, 8328–8333 China, 8338–8342 NOTICES Korea, 8347–8356 Applications, hearings, determinations, etc.: Latvia, 8323–8328 Georgia Moldova, 8332–8338 Roper Corp.; manufacturing and warehousing facilities, Various countries, 8342–8348 8194–8195 Countervailing duties: Illinois Hot-rolled carbon steel flat products from— North American Lighting, Inc.; automotive lighting Various countries, 8199–8200 products manufacturing facilities, 8195 New Jersey International Trade Commission Merck & Co., Inc.; pharmaceutical plant, 8195–8196 NOTICES Pennsylvania Meetings; Sunshine Act, 8241 Merck & Co., Inc.; pharmaceutical plant, 8196 Texas, 8197 Justice Department See Justice Programs Office Forest Service NOTICES Justice Programs Office Meetings: NOTICES National Urban and Community Forestry Advisory Agency information collection activities: Council, 8189 Submission for OMB review; comment request, 8241– 8242 Health and Human Services Department See Food and Drug Administration Land Management Bureau NOTICES NOTICES Agency information collection activities: Realty actions; sales, leases, etc.: Proposed collection; comment request, 8237–8238 Nevada, 8239–8240
Housing and Urban Development Department National Credit Union Administration RULES RULES Freedom of Information Act; implementation Credit unions: Effective date delay, 8175 Member information security; guidelines, 8152–8162
VerDate 11
National Institute of Standards and Technology National Association of Securities Dealers, Inc., 8251– NOTICES 8252 Meetings: Philadelphia Stock Exchange, Inc., 8252–8253 Advanced Technology Program Advisory Committee, 8200 Small Business Administration NOTICES National Oceanic and Atmospheric Administration Disaster and emergency areas: NOTICES Texas, 8254 Agency information collection activities: Meetings; district and regional advisory councils: Proposed collection; comment request, 8200–8201 District of Columbia, 8254 Coastal zone management programs and estuarine sanctuaries: State programs— State Department Evaluation findings availability, 8201 NOTICES Committees; establishment, renewal, termination, etc.: Meetings: Monterey Bay National Marine Sanctuary Advisory Arms Control and Nonproliferation Advisory Board, 8254 Council, 8201–8202 Meetings: Surface Transportation Board Caribbean Fishery Management Council, 8202 NOTICES North Pacific Fishery Management Council, 8202–8203 Railroad operation, acquisition, construction, etc.: Pacific Fishery Management Council, 8203 Union Pacific Railroad Co., 8255 South Atlantic Fishery Management Council, 8204 Permits: Textile Agreements Implementation Committee Marine mammals, 8204 See Committee for the Implementation of Textile Agreements National Science Foundation NOTICES Thrift Supervision Office Agency information collection activities: Proposed collection; comment request, 8242 NOTICES Agency information collection activities: Navy Department Submission for OMB review; comment request, 8258– NOTICES 8259 Environmental statements; availability, etc.: Base realignment and closure— Transportation Department Naval Station Brooklyn, NY, 8205–8209 See Federal Aviation Administration See Surface Transportation Board Nuclear Regulatory Commission NOTICES Treasury Department Meetings: See Comptroller of the Currency Nuclear fuel cycle facilities oversight program; revision, See Internal Revenue Service 8243–8244 See Thrift Supervision Office Reactor Safeguards Advisory Committee, 8244 NOTICES Meetings; Sunshine Act, 8244–8245 Agency information collection activities: Applications, hearings, determinations, etc.: Submission for OMB review; comment request, 8255– PSEG Nuclear LLC, 8242–8243 8256 Postal Service NOTICES Meetings; Sunshine Act, 8245 Separate Parts In This Issue
Public Health Service Part II See Food and Drug Administration Department of Housing and Urban Development, Federal Housing Finance Board, 8261–8321 Reclamation Bureau NOTICES Part III Water resources planning; discount rate change, 8240–8241 Department of Commerce, International Trade Securities and Exchange Commission Administration, 8347–8356 NOTICES Investment Company Act of 1940: Exemption applications— Reader Aids Goldman Sachs Trust et al., 8245–8250 Consult the Reader Aids section at the end of this issue for Self-regulatory organizations; proposed rule changes: phone numbers, online resources, finding aids, reminders, Chicago Board Options Exchange, Inc., 8250–8251 and notice of recently enacted public laws.
VerDate 11
CFR PARTS AFFECTED IN THIS ISSUE
A cumulative list of the parts affected this month can be found in the Reader Aids section at the end of this issue.
7 CFR 59...... 8151 9 CFR Proposed Rules: 381...... 8178 12 CFR 748...... 8152 915...... 8262 917...... 8262 925...... 8262 930...... 8262 931...... 8262 932...... 8262 933...... 8262 956...... 8262 966...... 8262 Proposed Rules: 1...... 8178 7...... 8178 23...... 8178 14 CFR 25...... 8162 39 (2 documents) ....8165, 8167 71 (5 documents) ...8168, 8170, 8171, 8172, 8173 Proposed Rules: 39...... 8184 24 CFR 5...... 8174 15...... 8175 92...... 8174 200...... 8174 221...... 8175 236...... 8174 574...... 8174 582...... 8174 583...... 8174 891...... 8174 982...... 8174 1003...... 8176 40 CFR Proposed Rules: 112...... 8186 412...... 8186 47 CFR 73...... 8176
VerDate 11-MAY-2000 19:58 Jan 29, 2001 Jkt 194001 PO 00000 Frm 00001 Fmt 4711 Sfmt 4711 E:\FR\FM\30JALS.LOC pfrm11 PsN: 30JALS 8151
Rules and Regulations Federal Register Vol. 66, No. 20
Tuesday, January 30, 2001
This section of the FEDERAL REGISTER Dyke, Chief, Livestock and Grain Market calendar years report such lamb contains regulatory documents having general News Branch at (202) 720–6231, fax information as specified in these applicability and legal effect, most of which (202) 690–3732, or E-mail us at regulations. Additionally, an importer are keyed to and codified in the Code of [email protected]. that did not import an average of 5,000 Federal Regulations, which is published under Additional information may also be metric tons of lamb meat products 50 titles pursuant to 44 U.S.C. 1510. obtained from the AMS web site: http:/ during the immediately preceding 5 The Code of Federal Regulations is sold by /www.ams.usda.gov/lsg/price.htm as it calendar years will be required to report the Superintendent of Documents. Prices of becomes available. information if the Secretary determines new books are listed in the first FEDERAL SUPPLEMENTARY INFORMATION: that the person should be considered an REGISTER issue of each week. importer based on their volume of lamb Background imports. The Livestock Mandatory Reporting These packers are required to report DEPARTMENT OF AGRICULTURE Act of 1999 (Act) was enacted into law the details of all transactions involving on October 22, 1999 (Pub. L. 106–78; purchases of livestock (cattle, swine, Agricultural Marketing Service 113 Stat. 1188; 7 U.S.C. 1635–1636(h)) and lambs), and the details of all as an amendment to the Agricultural transactions involving domestic and 7 CFR Part 59 Marketing Act of 1946 (7 U.S.C. 1621 et export sales of boxed beef cuts, [Docket Number LS–99–18] seq.). The Act provides for the including applicable branded product, sales boxed lamb cuts, including RIN No. 0581–AB64 mandatory reporting of market information by federally inspected applicable branded product, and sales of Livestock and Grain Market News livestock processing plants which have lamb carcasses. These importers are Branch: Livestock Mandatory slaughtered an average number of required to report the details of all Reporting livestock during the immediately transactions involving the sales of preceding 5 calendar years (125,000 for imported boxed lamb cuts. This AGENCY: Agricultural Marketing Service, cattle and 100,000 for swine), including information will be reported to AMS USDA. any processing plant that did not according to the schedule established by ACTION: Final rule; postponement of slaughter during the immediately the Act and these regulations with effective date. preceding 5 calendar years if the purchases of swine reported three times Secretary determines that the plant each day, purchases of cattle and lambs SUMMARY: This document postpones the should be considered a packer based on reported twice each day, domestic and effective date of the final rule (65 FR the plant’s capacity. For entities that did export sales of boxed beef cuts 75464) which establishes a mandatory not slaughter during the immediately including applicable branded boxed program of reporting information preceding 5 calendar years, such as a beef cuts reported twice each day, sales regarding the marketing of cattle, swine, new plant or existing plant that begins of lamb carcasses and boxed lamb cuts, lambs, and products of such livestock operations, the AMS will project the including applicable branded boxed under the ‘‘Livestock Mandatory plant’s annual slaughter or production lamb cuts, to be reported once daily, Reporting Act of 1999.’’ The based upon the plant’s estimate of and sales of imported lamb cuts once postponement of the effective date is annual slaughter capacity to determine weekly. being taken so that adequate time is which entities meet the definition of a AMS developed the electronic available for AMS and those entities packer as defined in these regulations. information collection system that will required to report to test the electronic The Act gives the Secretary the receive information from those entities information collection system being latitude to provide for the reporting of required to report and will convert the implemented by the program. This lamb information. AMS is requiring the information into reports that AMS will action will both ensure that the reporting of market information by publish for market participants to confidentiality of those required to federally inspected lamb processing utilize. These published reports will report information is maintained while plants who have slaughtered an average provide market participants with market participants are provided with of 75,000 head of lambs or processed an accurate information on pricing, accurate information on pricing, average of 75,000 lamb carcasses during contracting for purchase, and supply contracting for purchase, and supply the immediately preceding 5 calendar and demand conditions for livestock, and demand conditions for livestock, years. Additionally, a lamb processing livestock production, and livestock livestock production, and livestock plant that did not slaughter an average products, that can be readily understood products, that can be readily understood of 75,000 lambs or process an average of by producers, packers, and other market by producers, packers, and other market 75,000 lamb carcasses during the participants. The electronic information participants. immediately preceding 5 calendar years collection system collects and manages EFFECTIVE DATE: The effective date of the will be required to report information if the data received from those entities final rule amending 7 CFR part 59 the Secretary determines the processing required to report and was designed in published at 65 FR 75464, December 1, plant should be considered a packer a manner that ensures security of data 2000, is postponed from January 30, based on its capacity. An importer of transmission and storage, and 2001, to April 2, 2001. lamb that, for any calendar year, confidentiality of information that is FOR FURTHER INFORMATION CONTACT: If imported an average of 5,000 metric maintained by USDA. you have questions about the tons of lamb meat products per year Since publication of the final rule on regulations, please call John E. Van during the immediately preceding 5 December 1, 2000, AMS, with the
VerDate 11
assistance of technical experts, has SUPPLEMENTARY INFORMATION: The compliance plan within particular time initiated testing of the system with those contents of this preamble are listed in frames, while if an institution fails to entities required to report. AMS has the following outline: comply with a standard issued as a determined that additional time is I. Background guideline, the agency has the discretion required to adequately test the system II. Overview of Comments Received as to whether to require an institution and ensure that all program III. Section-by-Section Analysis to submit a compliance plan. 12 U.S.C. requirements and objectives are met. IV. Regulatory Procedures 1831p(e)(1). Accordingly, AMS has postponed the A. Paperwork Reduction Act Section 39 of the FDIA does not apply effective date of the regulations and the B. Regulatory Flexibility Act to the NCUA, and the Federal Credit date which those entities required to C. Executive Order 13132 Union Act does not contain a similar, D. Treasury and General Government regulatory framework for the issuance report would be required to begin Appropriations Act, 1999 transmitting data until April 2, 2001. E. Small Business Regulatory Enforcement and enforcement of standards. In preparation of NCUA’s regulation and Authority: 7 U.S.C. 1621 et seq. Fairness Act V. Agency Regulatory Goal appendix with guidelines, NCUA staff Dated: January 26, 2001. worked with an interagency group that Kenneth C. Clayton, I. Background included representatives from the Acting Administrator, Agricultural Marketing On November 12, 1999, President federal banking agencies. The NCUA Service. Clinton signed the GLB Act (Pub. L. Board’s understanding is that the federal [FR Doc. 01–2639 Filed 1–26–01; 3:10 pm] 106–102) into law. Section 501, entitled banking agencies recently have BILLING CODE 3410–02–P Protection of Nonpublic Personal approved standards by guidelines Information, requires the NCUA Board, issued as appendices to their safety and the federal banking agencies (including soundness standards. the Office of the Comptroller of the The NCUA Board has determined that NATIONAL CREDIT UNION Currency, the Board of Governors of the it can best meet the congressional ADMINISTRATION Federal Reserve System, the Federal directive to prescribe standards through 12 CFR Part 748 Deposit Insurance Corporation, and the an amendment to NCUA’s existing Office of Thrift Supervision), the regulation governing security programs Guidelines for Safeguarding Member Securities and Exchange Commission, in federally-insured credit unions. The Information state insurance authorities, and the final regulation requires that federally- Federal Trade Commission (collectively, insured credit unions establish a AGENCY: National Credit Union the ‘‘Agencies’’) to establish appropriate security program addressing the Administration (NCUA). standards for the financial institutions safeguards required by the GLB Act. The ACTION: Final rule. subject to their respective jurisdictions Board is also issuing an appendix to the relating to the administrative, technical, regulation that sets out guidelines, the SUMMARY: The NCUA Board is and physical safeguards for customer text of which is substantively identical modifying its security program records and information. These to the guidelines approved by the requirements to include security of safeguards are intended to: (1) Insure federal banking agencies. The guidelines member information. Further, the the security and confidentiality of are intended to outline industry best NCUA Board is issuing ‘‘Guidelines for customer records and information; (2) practices and assist credit unions to Safeguarding Member Information’’ to protect against any anticipated threats develop meaningful and effective implement certain provisions of the or hazards to the security or integrity of security programs to ensure their Gramm-Leach-Bliley Act (the GLB Act such records; and (3) protect against compliance with the safeguards or Act). unauthorized access to or use of such contained in the regulation. The GLB Act requires the NCUA records or information that would result Currently, NCUA regulations require Board to establish appropriate standards in substantial harm or inconvenience to that federally-insured credit unions for federally-insured credit unions any customer. have a written security program relating to administrative, technical, and Section 505(b) of the GLB Act designed to protect each credit union physical safeguards for member records provides that these standards are to be from robberies, burglaries, and information. These safeguards are implemented by the NCUA and the embezzlement, and assist in the intended to: Insure the security and federal banking agencies in the same identification of persons who attempt confidentiality of member records and manner, to the extent practicable, as such crimes. Expanding the information; protect against any standards pursuant to section 39(a) of environment of protection to include anticipated threats or hazards to the the Federal Deposit Insurance Act threats or hazards to member security or integrity of such records; and (FDIA). Section 39(a) of the FDIA information systems is a natural fit protect against unauthorized access to requires the federal banking agencies to within a comprehensive security or use of such records or information establish operational and managerial program. To evaluate compliance, the that could result in substantial harm or standards for insured depository NCUA will expand its review of credit inconvenience to any member. institutions relative to, among other union security programs and annual DATES: This rule is effective July 1, things, internal controls, information certifications. This review will take 2001. systems, and internal audit systems, as place during safety and soundness well as such other operational and examinations for federal credit unions ADDRESSES: National Credit Union managerial standards as determined to and within the established oversight Administration, 1775 Duke Street, be appropriate. 12 U.S.C. 1831p(a). procedures for state-chartered, federally- Alexandria, Virginia 22314–3428. Section 39 of the FDIA provides for insured credit unions. If a credit union FOR FURTHER INFORMATION CONTACT: standards to be prescribed by guideline fails to establish a security program Matthew Biliouris, Information Systems or by rule. 12 U.S.C. 1831p(d)(1). The meeting the regulatory objectives, the Officer, Office of Examination and FDIA also provides that if an institution NCUA Board could take a variety of Insurance, at the above address or fails to comply with a standard issued administrative actions. The Board could telephone (703) 518–6360. as a rule, the institution must submit a use its cease and desist authority,
VerDate 11
including its authority to require changes in the final rule as a result of require that a credit union’s security affirmative action to correct deficiencies interagency discussions. program include protections to ensure in a credit union’s security program. 12 NCUA invited comment on all aspects the security and confidentiality of U.S.C. 1786(e) and (f). In addition, the of the proposed guidelines, including member records, protect against Board could employ its authority to whether the rule should be issued as anticipated threats or hazards to the impose civil money penalties. 12 U.S.C. guidelines or as regulation. Commenters security or integrity of such records, and 1786(k). A finding that a credit union is overwhelmingly supported the adoption protect against unauthorized access to in violation of the requirements of of guidelines as discussed below. or use of such records that could result § 748.0(b)(2) would typically result only Several commenters cited the benefits of in substantial harm or inconvenience to if a credit union fails to establish a flexibility and the drawbacks of a member. This modification expanded written policy or its written policy is prescriptive requirements that could the security program objectives to insufficient to reasonably address the become rapidly outdated as a result of include the emerging threats and objectives set out in the proposed changes in technology. hazards to members, credit unions, and regulation. In light of the comments received, the the information they share to have a The guidelines apply to ‘‘nonpublic NCUA has decided to adopt the financial relationship. personal information’’ of ‘‘members’’ as guidelines, with several changes as NCUA has adopted this revision as those terms are defined in 12 CFR part discussed below to respond to the proposed with one exception. NCUA 716, NCUA’s rule captioned Privacy of commenters’ suggestions. has changed the reference in section Consumer Financial Information (the In directing the Agencies to issue 748.0(b)(4) from ‘‘the Accounting Privacy Rule or Part 716). See 65 FR standards for the protection of customer Manual for Federal Credit Unions’’, to 31722, May 18, 2000. Under section records and information, Congress ‘‘12 CFR part 749.’’ NCUA is currently 503(b)(3) of the GLB Act and part 716, provided that the standards apply to all revising Part 749 regarding a credit credit unions will be required to financial institutions, regardless of the union’s preservation of vital records. disclose their policies and practices extent to which they may disclose The discussion that follows applies to with respect to protecting the information to affiliated or nonaffiliated the NCUA’s final guidelines. confidentiality, security, and integrity of third parties, electronically transfer data nonpublic personal information as part with customers or third parties, or Appendix A to Part 748—Guidelines for of the initial and annual notices to their record data electronically. Because the Safeguarding Member Information members. Defining terms consistently requirements of the Act apply to a broad I. Introduction should facilitate the ability of credit range of financial institutions, the unions to develop their privacy notices NCUA and the other FFEIC Agencies Paragraph I. sets forth the general in light of the guidelines set forth here. believe that the guidelines must purpose of the guidelines, which is to NCUA derived key components of the establish appropriate standards that provide guidance to each credit union guidelines from security-related allow each institution the discretion to in establishing and implementing supervisory guidance developed with design an information security program administrative, technical, and physical the federal banking agencies through the that suits its particular size and safeguards to protect the security, Federal Financial Institutions complexity and the nature and scope of confidentiality, and integrity of member Examination Council (FFIEC). its activities. In some instances, credit information. This paragraph also sets The NCUA Board requested comment unions already will have information forth the statutory authority for the final on all aspects of the proposed security programs that are consistent guidelines, sections 501 and 505(b) of amendment of § 748.0 and the with these guidelines. In such the GLB Act. 15 U.S.C. 6801 and guidelines, as well as comment on the situations, little or no modification to a 6805(b). The NCUA received no specific provisions and issues credit union’s program will be required. comments on this paragraph, and has highlighted in the section-by-section Below is a section-by-section analysis adopted it as proposed. analysis below. of the final guidelines. I.A. Scope II. Overview of Comments Received III. Section-by-Section Analysis Paragraph I.A. describes the scope of On June 6, 2000, the NCUA Board The discussion that follows applies to the proposed guidelines. The guidelines approved a proposal to revise 12 CFR the final rule Part 748. apply to member information part 748 to include requirements for The security program in § 748.0(b) maintained by or on behalf of all administrative, technical, and physical previously addressed only those threats federally-insured credit unions. NCUA safeguards for member records and due to acts such as robberies, burglaries, has adopted the scope as proposed. information, as required by the GLB Act. larcenies, and embezzlement. In the The NCUA received a comment 65 FR 37302, Jun. 14, 2000. The emerging electronic marketplace, the requesting clarification on whether the comment period for the proposed rule threats to members, credit unions, and rule includes corporate credit unions. ended August 14, 2000. NCUA received the information they share to have a This commenter indicated that because 13 comments on the proposal: two from productive, technologically competitive, of the use of the word ‘‘consumer’’ natural person credit unions, one from financial relationship have increased. throughout the proposed rule, it is a corporate credit union, two from The security programs to ensure feasible to presume that the proposed national credit union trade associations, protections against these emerging rule is referring only to natural person seven from state credit union leagues, crimes and harmful actions must keep credit unions. and one from a miscellaneous trade pace. Congress directed in section The general purpose of the guidelines group. In addition, the other FFIEC 501(b) of the GLB Act that the Agencies is to provide guidance to credit unions Agencies collectively received a total of establish standards to ensure financial in establishing and implementing 206 comments. While NCUA carefully institutions protect the security and safeguards to protect member considered all comments on our confidentiality of the nonpublic information. It appears that a corporate proposed rule, to remain as consistent personal information of their customers. credit union will rarely have natural as practicable with the other FFIEC To meet this directive, the proposed person members or customers. Such Agencies, NCUA has made some rule revised paragraph (b) of § 748.0 to members appear to be limited to those
VerDate 11
corporate credit unions that have in the guidelines that was adopted in Member Information (I.B.2.b.) natural person incorporators that the Privacy Rule. Section 501(b) refers to safeguarding maintain a share account. Those The term ‘‘member’’ includes the security and confidentiality of members are limited in number. individuals who are not actually ‘‘customer information.’’ The term However, if a corporate credit union has members, but are entitled to the same ‘‘customer’’ is also used in other a natural person member, it will be privacy protections under part 716 as sections of Title V of the GLB Act. As required to establish and implement members. Examples of individuals that stated above, the NCUA Board used the safeguards to protect the member’s fall within the definition of member in term ‘‘member’’ in place of the term information. part 716 are nonmember joint account ‘‘customer’’ in implementing these This commenter requested holders, nonmembers establishing an sections of the GLB Act in Part 716. clarification on whether the proposed account at a low-income designated Proposed paragraph I.B.2. defined rule pertains to corporate credit unions credit union, and nonmembers holding member information as any records as a ‘‘service provider,’’ or as a credit an account in a state-chartered credit containing nonpublic personal union that must comply with the union under state law. The term information, as defined in section regulation. The commenter also asked ‘‘member’’ does not cover business 716.3(q) of the Privacy Rule, about a whether there is an exemption for members or consumers who have not member. This included records, data, corporate credit unions providing established an ongoing relationship files, or other information in paper, service to natural person credit unions with the credit union (e.g., those electronic, or other form that are that is part of normal processing consumers that merely use an ATM or maintained by any service provider on business. Natural person credit unions purchase travelers checks). See 12 CFR behalf of the institution. Although that use corporate credit unions as their 716.3(n) and (o). section 501(b) of the GLB Act refers to ‘‘service providers’’ will likely look to The NCUA Board solicited comment the protection of both customer records the guidelines in overseeing their on whether the definition of member and information, for the sake of service provider arrangements with should be broadened to provide a simplicity, the proposed guidelines those corporate credit unions. There is common information security program used the term ‘‘member information’’ to no exemption for corporate credit for all types of records under the control encompass both information and unions that provide services to natural of a credit union. The NCUA received records. person credit unions as part of normal many comments on this definition, The NCUA did not receive any processing business. NCUA notes that almost all of which agreed with the comments specifically relating to this disclosure pursuant to one of the proposed definition. Although a few definition. The NCUA has adopted a exceptions in the Privacy Rule does not commenters indicated they would apply definition of ‘‘member information’’ that constitute unauthorized access under the same security program to both is substantially the same as the the guidelines. (See II.B. Objectives.). business and consumer records, the vast proposed definition. The NCUA has, majority of commenters supported the I.B. Definitions however, deleted the reference to data, use of the same definition of member in files, or other information from the final Paragraph I.B. sets forth the the guidelines as is used in the Privacy guidelines, since each is included in the definitions of various terms for purposes Rule. They observed that the use of the term ‘‘records’’ and also is covered by of the guidelines. The defined terms term customer in section 501 of the GLB the reference to ‘‘paper, electronic, or have been placed in alphabetical order Act, when read in the context of the other form.’’ in the final guidelines. definitions of consumer and customer I.B.1. In General relationship in section 509, reflects the Member Information System (I.B.2.c.) Congressional intent to distinguish Proposed paragraph I.B.5. defined Paragraph I.B.1. provides that terms between certain kinds of consumers for used in the guidelines have the same ‘‘member information system’’ to be the information security standards and electronic or physical methods used to meanings as set forth in 12 CFR part the other privacy provisions established 716, except to the extent that the access, collect, store, use, transmit, or under subtitle A of Title V. protect member information. The NCUA definition of a term is modified in the The NCUA believes, therefore, that guidelines or where the context requires did not receive any comments the most reasonable interpretation of the specifically relating to this definition. otherwise. applicable provisions of subtitle A of The NCUA and other FFIEC Agencies The NCUA has adopted the definition Title V of the Act is that a credit union received several comments on the of member information system largely as is obligated to protect the security and proposed definitions. NCUA has made confidentiality of the nonpublic certain changes in its final rule as financial institution provides a product or service, personal information of its consumers discussed below. including that of acting as a fiduciary. (See section with whom it has a member 527(1) of the Act.) In light of the statutory mandate Member (I.B.2.a.) relationship. As a practical manner, a to prescribe such revisions to such regulations and guidelines as may be necessary to ensure that such Proposed paragraph I.B.3. defined credit union may also design or financial institutions have policies, procedures, and ‘‘member’’ in the same way as that term implement its information security controls in place to prevent the unauthorized program in a manner that encompasses disclosure of customer financial information is defined in section 716.3(n) of the (section 525), the NCUA considered modifying Privacy Rule. The NCUA proposed to the records and information of its other 1 these guidelines to cover other customers, namely, use this definition in the guidelines consumers and its business clients. business entities and individuals who obtain because section 501(b) refers to financial products and services for purposes other 1 The NCUA and the other FFIEC Agencies than personal, family, or household purposes. The safeguarding the security and recognize that customer is defined more broadly NCUA has concluded, however, that defining confidentiality of member information. under Subtitle B of Title V of the Act, which, in member to accommodate the range of objectives set Given that Congress used the same term general, makes it unlawful for any person to obtain forth in Title V of the Act is unnecessary. Instead, for both the 501(b) standards and for the or attempt to obtain customer information of a the NCUA has included a new paragraph III.C.1.i, financial institution by making false, fictitious, or described below, and plan to issue guidance and sections concerning financial privacy, fraudulent statements. For the purposes of that other revisions to the applicable regulations, as may NCUA has concluded that it is subtitle, the term customer means any person (or be necessary, to satisfy the requirements of section appropriate to use the same definition authorized representative of a person) to whom the 525 of the Act.
VerDate 11
proposed. However, the phrase If a service provider is subject to a code instances, be composed of more than ‘‘electronic or physical’’ in the proposal of conduct that imposes a duty to one document. Moreover, use of this has been deleted because each is protect member information consistent term does not require that all parts of an included in the term ‘‘any method.’’ The with the objectives of these guidelines, organization implement a uniform NCUA also has added a specific a credit union may take that duty into program. However, the NCUA will reference to records disposal in the account when deciding what level of expect a credit union to coordinate all definition of ‘‘member information oversight it should provide. the elements of its information security system.’’ This is consistent with the Moreover, a credit union will be program. Where the elements of the proposal’s inclusion of access controls responsible under the final guidelines program are dispersed throughout the in the list of items a credit union is to for overseeing its service provider credit union, management should be consider when establishing security arrangements only when the service is aware of these elements and their policies and procedures (see discussion provided directly to the credit union. locations. If they are not maintained on of paragraph III.C.1.a., below), given that The NCUA clarified this point by a consolidated basis, management inadequate disposal of records may amending the definition of ‘‘service should have an ability to retrieve the result in identity theft or other misuse provider’’ in the final guidelines to state current documents from those of member information. Under the final that it applies only to a person or entity responsible for the overall coordination guidelines, a credit union’s that maintains, processes, or otherwise and ongoing evaluation of the program. responsibility to safeguard member is permitted access to member II.B. Objectives information continues through the information through its provision of disposal process. services directly to the credit union. Proposed paragraph II.B. described In situations where a service provider the objectives that each credit union’s Service Provider (I.B.2.d.) hires a subservicer,2 the subservicer information security program should be The proposal defined a ‘‘service would not be a service provider under designed to achieve. These objectives provider’’ as any person or entity that the final guidelines. The NCUA tracked the objectives as stated in maintains or processes member recognize that it would be inappropriate section 501(b)(1)–(3), adding only that information for a credit union, or is to impose obligations on a credit union the security program is to protect otherwise granted access to member to select and monitor subservicers in against unauthorized access that could information through its provision of situations where the credit union has no risk the safety and soundness of the services to a credit union. One contractual relationship with that credit union. NCUA’s proposed rule commenter, a corporate credit union, person or entity. When conducting due also noted that unauthorized access to asked for clarification with regard to diligence in selecting its service or use of member information does not ‘‘service provider.’’ providers (see discussion of paragraph include access to or use of member The NCUA believes that the Act III.D., below), however, a credit union information with the member’s consent. requires each credit union to adopt a must determine that the service The NCUA Board requested comment comprehensive information security provider has adequate controls to ensure on whether there are additional or program that is designed to protect that the subservicer will protect the alternative objectives that should be against unauthorized access to or use of member information in a way that meets included in the guidelines. The NCUA members’ nonpublic personal the objectives of these guidelines. received several comments on this information. Disclosing information to a proposed paragraph, most of which person or entity that provides services II. Standards for Safeguarding Member indicated that the guidelines should not to a credit union creates additional risks Information include any additional or alternative to the security and confidentiality of the II.A. Information Security Program objectives. information disclosed. In order to First, NCUA and the other FFIEC protect against these risks, a credit The proposed guidelines described Agencies made two changes to this union must take appropriate steps to NCUA’s expectations for the creation, objective in the final rule. NCUA notes protect information that it provides to a implementation, and maintenance of an that it does not believe the statute service provider, regardless of who the information security program. As noted mandates a standard of absolute liability service provider is or how the service in the proposal, this program must for a credit union that experiences a provider obtains access. The fact that an include administrative, technical, and security breach. Thus, the NCUA and entity obtains access to member physical safeguards appropriate to the other FFEIC Agencies have clarified information through, for instance, size and complexity of the credit union these objectives in the final rule by providing professional services does not and the nature and scope of its stating that each security program is to obviate the need for the credit union to activities. be designed to accomplish the take appropriate steps to protect the Several interagency commenters objectives stated. information. Accordingly, the NCUA representing large organizations were Second, in response to comments that has determined that, in general, the term concerned that the term objected to the addition of the safety ‘‘service provider’’ should be broadly ‘‘comprehensive information security and soundness standard, the NCUA and defined to encompass a variety of program’’ required a single uniform other FFIEC Agencies have deleted that individuals or companies that provide document that must apply to all reference in order to make the statement services to the credit union. component parts of the organization. In of objectives identical to the objectives This does not mean, however, that a response, the NCUA and the other identified in the statute. NCUA believes credit union’s methods for overseeing FFIEC Agencies note that a program that that risks to the safety and soundness of its service provider arrangements will includes administrative, technical, and a credit union may be addressed be the same for every provider. As physical safeguards will, in many through other supervisory or regulatory explained in the discussion of means, making it unnecessary to expand paragraph III.D., below, a credit union’s 2 The term subservicer means any person who has the statement of objectives in this access to a credit union’s member information oversight responsibilities will be shaped through its provision of services to the service rulemaking. by the credit union’s analysis of the provider and is not limited to mortgage NCUA notes that for purposes of the risks posed by a given service provider. subservicers. guidelines, access to or use of member
VerDate 11
information is permitted if it is done mandate additional requirements on the The NCUA believes that a credit with the member’s consent. When a board of directors may place undue union’s board of directors is in the best member gives consent to a third party to burden on small credit unions with a position to determine who should be access or use that member’s limited number of resources. assigned specific roles in implementing information, such as by providing the The NCUA received comments the credit union’s security program. third party with an account number, suggesting that use of the term Accordingly, the NCUA has deleted the PIN, or password, the guidelines do not ‘‘oversee’’ conveyed the notion that a separate provision assigning specific require the credit union to know about board of directors is expected to be roles to management. The the arrangement or to monitor the use or involved in day-to-day monitoring of responsibilities that were contained in redisclosure of the member’s the development, implementation, and this provision are now included in other information by the third party. Finally, maintenance of an information security paragraphs of the guidelines. program. The term ‘‘oversee’’ is meant unauthorized access does not mean III.B. Assess Risk disclosure pursuant to one of the to convey a board of director’s exceptions in the Privacy Rule. conventional supervisory Proposed paragraph III.B. described responsibilities. Day-to-day monitoring the risk assessment process that should III. Development and Implementation of any aspect of an information security be used in the development of the of Information Security Program program is a management responsibility. information security program. Under the III.A. Involve the Board of Directors The final guidelines reflect this by proposal, a credit union was to identify providing that the board of directors and assess the risks to member Proposed paragraph III.A. described must oversee the credit union’s information. As part of that assessment, the involvement of the board of information security program, but may the credit union was to determine the directors and management in the assign specific responsibility for its sensitivity of the information and the development and implementation of an implementation. threats to the credit union’s systems. A information security program. As The NCUA invited comment on credit union also was to assess the explained in the proposal, the board of whether the guidelines should require sufficiency of its policies, procedures, director’s responsibilities are to: (1) that the board of directors designate an systems, and other arrangements in Approve the credit union’s written Information Security Officer or other place to control risk. Finally, a credit information security policy and responsible individual who would have union was to monitor, evaluate, and program; and (2) oversee efforts to the authority, subject to the board’s adjust its risk assessment in light of develop, implement, and maintain an approval, to develop and administer the changes in areas identified in the effective information security program, credit union’s information security proposal. including reviewing reports from program. The NCUA received a few The NCUA did not receive any management. The proposal also comments suggesting that the NCUA comments specifically relating this outlined management’s responsibilities should not require the creation of a new section of the proposed rule. However, for developing, implementing, and position for this purpose. Only one the other FFIEC Agencies received maintaining the security program. The commenter supported designating an several comments on these provisions. NCUA did not receive any comments Information Security Officer. Some Accordingly, NCUA has amended its specifically relating to the requirement commenters also stated that hiring one final rule to remain as consistent as of board approval of the information or more additional staff for this purpose practicable with the other Agencies. security program. would impose a significant burden. Discussions with the other FFIEC NCUA believes that a credit union’s NCUA believes that a credit union Agencies focused on the issue of overall information security program is will not need to create a new position requiring credit unions to perform a critical to the safety and soundness of with a specific title for this purpose, as sensitivity analysis as part of their risk the credit union. Therefore, the final long as the credit union has adequate assessment. NCUA is aware that guidelines continue to place staff in light of the risks that credit ‘‘member information’’ is defined to responsibility on a credit union’s board union faces to its member information. mean ‘‘nonpublic personal information’’ of directors to approve and exercise Regardless of whether new staff are as defined in the GLB Act, and that the general oversight over the program. added, the lines of authority for GLB Act provides the same level of However, the guidelines allow the entire development, implementation, and coverage for all nonpublic personal board of directors of a credit union, or administration of a credit union’s information. an appropriate committee of the board information security program need to be While the NCUA agrees that all of directors to approve the credit well-defined and clearly articulated. member information requires union’s written security program. In The proposed guidelines set forth protection, the NCUA believes that addition, the guidelines permit the three responsibilities for management as requiring all credit unions to afford the board of directors to assign specific part of its implementation of the credit same degree of protection to all member implementation responsibilities to a union’s information security program. information may be unnecessarily committee or an individual. They were to: (1) evaluate the impact on burdensome in many cases. In those cases where a committee is a credit union’s security program of Accordingly, the final guidelines established, NCUA considered requiring changing business arrangements and continue to state that credit unions that the committee contain at least one changes to member information should take into consideration the member of the credit union’s board of systems; (2) document compliance with sensitivity of member information. directors. Conversely, the NCUA also these guidelines; and (3) keep the board Disclosure of certain information (such evaluated the impact of not allowing a of directors informed of the current as account numbers or access codes) member of the board of directors to status of the credit union’s information might be particularly harmful to serve on the committee. In both security program. In response to this members if the disclosure is not scenarios, NCUA determined the most proposal, some commenters stated that authorized. Individuals who try to logical approach is to allow each credit the NCUA should allow a credit union breach the credit union’s security union board to determine the makeup of to decide who within the institution is systems may be likely to target this type such a committee if established. To to carry out the tasks. of information. When such information
VerDate 11
is housed on systems that are accessible designed to control identified risks and employee access are covered adequately through public telecommunications to achieve the overall objective of in other parts of paragraph III.C.1. (See networks, it may require more and ensuring the security and discussion of ‘‘access controls’’ in different protections, such as confidentiality of member information. paragraph III.C.1.a. of the final encryption, than if it were located in a It identified 11 factors a credit union guidelines.) locked file drawer. To provide should consider in evaluating the Access controls. Paragraph III.C.1.b. of flexibility to respond to these different adequacy of its policies and procedures the proposed rule required a credit security needs in the way most to effectively manage these risks. union to consider appropriate access appropriate, the guidelines confer upon The NCUA did not receive any controls when establishing its credit unions the discretion to comments specifically relating to this information security policies and determine the levels of protection section. However, based on interagency procedures. These controls were necessary for different categories of discussions, the NCUA has amended the intended to address unauthorized access information. Credit unions may treat all final guidelines to state that each credit to a credit union’s member information member information the same, provided union must consider whether the by anyone, whether or not employed by that the level of protection is adequate security elements discussed in the credit union. for all the information. paragraphs III.C.1.a.-h. are appropriate The NCUA believes that this element In addition, the NCUA and the other for the credit union and, if so, adopt sufficiently addresses the concept of FFEIC Agencies believe that the security those elements a credit union concludes unauthorized access, regardless of who program should be focused on are appropriate. The NCUA believes that is attempting to obtain access. This reasonably foreseeable risks. Therefore, the security measures listed in III.C.I would cover, for instance, attempts NCUA has amended its final guidelines may be adapted by credit unions of through pretext calling to gather accordingly. varying sizes, scope of operations, and information about a credit union’s NCUA has made several other risk management structures. Consistent members.3 The NCUA has amended the changes to this paragraph in the final with that approach, the manner of final rule to refer specifically to pretext rule to improve the order of the implementing a particular element may calling in new III.C.1.a. The NCUA does guidelines and to eliminate provisions vary from credit union to credit union. not intend for the final guidelines to that were redundant in light of For example, while a credit union that require a credit union to provide its responsibilities outlined elsewhere. For offers Internet-based transaction members with access to information the instance, while the proposal stated that accounts may conclude that encryption credit union has gathered. Instead, the the risk assessment function included is appropriate, a different credit union provision in the final guidelines the need to monitor for relevant changes that processes all data internally and addressing access is limited solely to the to technology, sensitivity of member does not have a transactional web site issue of preventing unauthorized access information, and threats to information may consider other kinds of access to member information. security and make adjustments as restrictions that are adequate to In accord with the other FFIEC needed, that function has been maintain the confidentiality of member agencies, the NCUA has deleted the incorporated into the discussion of information. reference in the proposed paragraph managing and controlling risk in The NCUA Board invited comment on III.C.1.b. to providing access to paragraphs III.C.3. and III.E. the degree of detail that should be authorized companies. The final Thus, under the final guidelines as included in the guidelines regarding the guidelines require a credit union to adopted, a credit union should identify risk management program, including consider the need for access controls in the reasonably foreseeable internal and which elements should be specified in light of the credit union’s various external threats that could result in the guidelines, and any other member information systems and adopt unauthorized disclosure, misuse, components of a risk management such controls as appropriate. alteration, or destruction of member program that should be listed. Dual control procedures. Paragraph information or member information Generally, the comments supported the III.C.1.f. of the proposed rule stated that systems. Next, the risk assessment level of detail conveyed in the proposed credit unions should consider dual should consider the potential damage guidelines. The NCUA has adopted the control procedures, segregation of that a compromise of member provision regarding management and duties, and employee background information from an identified threat control of risks with the changes checks for employees with would have on the member information, discussed below. Comments addressing responsibility for, or access to, member taking into consideration the sensitivity proposed security measures that have information. Most of the interagency of the information to be protected in been adopted without change also are comments on this paragraph focused on assessing the potential damage. Finally, discussed below. ‘‘dual control procedures’’, which refers Access rights. The NCUA did not a credit union should conduct an to a security technique that uses two or receive any comments specifically assessment of the sufficiency of existing more persons operating together to addressing this area. However, because policies, procedures, member protect sensitive information. Both the other FFIEC Agencies received a information systems, and other persons are equally responsible for number of comments suggesting that the arrangements intended to control the protecting the information and neither reference to ‘‘access rights to customer risks it has identified. can access the information alone. information’’ in paragraph III.C.1.a. of The NCUA recognizes that dual- (III.C.) Manage and Control Risk their proposal could be interpreted to control procedures are not necessary for mean providing customers with a right Proposed paragraph III.C. described all activities, but might be appropriate of access to financial information. the steps a credit union should take to for higher-risk activities. Given that the NCUA notes that the reference was manage and the control risks identified guidelines state only that a credit union intended to refer to limitations on in paragraph III.B. should consider dual control procedures Establish policies and procedures. employee access to member financial Paragraph III.C.1 of the proposal information, not to member access to 3 Pretext calling is a fraudulent means of described the elements of a information. However, this element has obtaining an individual’s personal information by comprehensive risk management plan been deleted since limitations on posing as that individual.
VerDate 11
and adopt only if appropriate for that to be conducted, where appropriate, by implement. The NCUA believes that the credit union, the NCUA has retained a independent third parties or staff critical need for independence is reference to dual control procedures in independent of those that develop or between those who operate the systems the items to be considered (paragraph maintain the security program. Finally, and those who either test them or III.C.I.e.). the proposal stated that test results are review the test results. Therefore, the Oversight of servicers. Paragraph to be reviewed by independent third final guidelines now require that tests III.C.1.g. of the proposal was deleted. parties or staff independent of those that should be conducted or reviewed by Instead, the final guidelines consolidate conducted the test. The NCUA Board persons who are independent of those the provisions related to service requested comment on whether specific who operate the systems, including the providers in paragraph III.D. types of security tests, such as management of those systems. Physical hazards and technical penetration tests or intrusion detections Whether a credit union should use failures. The paragraphs of the proposed tests, should be required. third parties to either conduct tests or guidelines addressing protection against The most frequent comment regarding review their results depends upon a destruction due to physical hazards and testing of key controls was that the number of factors. Some credit unions technological failures (paragraphs NCUA should not require specific tests. may have the capability to thoroughly III.C.1.j. and k., respectively, of the Commenters noted that because test certain systems in-house and review proposal) have been consolidated in technology changes rapidly, the tests the test results but will need the paragraph III.C.1.h. of the final specified in the guidelines will become assistance of third party testers to assess guidelines. The NCUA believes that this obsolete and other tests will become the other systems. For example, a credit change improves clarity and recognizes standard. Consequently, according to union’s internal audit department may that disaster recovery from these commenters, the guidelines be sufficiently trained and independent environmental and technological should identify areas where testing may for the purposes of testing certain key failures often involve the same be appropriate without requiring a controls and providing test results to considerations. credit union to implement a specific test decision makers independent of system Training. Paragraph III.C.2. of the or testing procedure. Several managers. Some testing may be proposed guidelines provided that a commenters noted that periodic testing conducted by third parties in credit union’s information security of information security controls is a connection with the actual installation program should include a training sound idea and is an appropriate or modification of a particular program. component designed to train employees standard for inclusion in these In each instance, management needs to to recognize, respond to, and report guidelines. weigh the benefits of testing and test unauthorized attempts to obtain The NCUA believes that a variety of reviews by third parties against its own member information. NCUA did not tests may be used to ensure the controls, resources in this area, both in terms of receive any comments specific to this systems, and procedures of the expense and reliability. section. However, for purposes of these information security program work Ongoing adjustment of program. guidelines, the NCUA believes that, as properly and also recognize that such Paragraph III.C.4. of the proposal part of a training program, staff should tests will progressively change over required a credit union to monitor, be made aware both of federal reporting time. The NCUA believes that the evaluate and adjust, as appropriate, the requirements and a credit union’s particular tests that may be applied information security program in light of procedures for reporting suspicious should be left to the discretion of any relevant changes in technology, the activities, including attempts to obtain management rather than specified in sensitivity of its member information, access to member information without advance in these guidelines. and internal or external threats to proper authority. Accordingly, the final guidelines do not information security. This provision Therefore, the final guidelines amend require a credit union to apply specific was previously located in the paragraph the provision governing training to state tests to evaluate the key control systems titled ‘‘Manage and Control Risk.’’ that a credit union’s information of its information security program. While there were no comments on this security program should include a The NCUA Board also invited provision, the NCUA clarifies that this training component designed to comment regarding the appropriate provision is applicable to a credit implement the credit union’s degree of independence that should be union’s entire information security information security policies and specified in the guidelines in program. Therefore, this provision is procedures. The NCUA believes that the connection with the testing of now separately identified as new appropriate focus for the training should information security systems and the paragraph III.E. of the final guidelines, be on compliance with the credit review of test results. The proposal discussed below. union’s security program generally and asked whether the tests or reviews of not just on the limited aspects identified tests be conducted by persons who are III.D. Oversee Service Provider in proposed III.C.2. The provisions not employees of the credit union. The Arrangements governing reporting have been moved to proposal also asked whether employees NCUA’s proposal addressed service paragraph III.C.1.g., which addresses may conduct the testing or may review providers in two provisions. The NCUA response programs in general. test results, and what measures, if any, provided that a credit union should Testing. Paragraph III.C.3. of the are appropriate to assure their consider contract provisions and proposed guidelines provided that an independence. oversight mechanisms to protect the information security program should Some commenters interpreted the security of member information include regular testing of key controls, proposal as almost requiring three maintained or processed by service systems, and procedures. The proposal separate teams of people to provide providers as one of the elements to be provided that the frequency and nature sufficient independence to control considered in establishing risk of the testing should be determined by testing: one team to operate the system; management policies and procedures the risk assessment and adjusted as a second team to test the system; and a (proposed paragraph III.C.1.g.). necessary to reflect changes in both third team to review test results. This Additionally, proposed paragraph III.D. internal and external conditions. The approach, they argued, would be too provided that, when a credit union uses proposal also provided that the tests are burdensome and expensive to an outsourcing arrangement, the credit
VerDate 11
union would continue to be responsible should include a review of the controls service provider. NCUA expects that for safeguarding member information the service provider has in place to credit unions will arrange, when that it gives to the service provider. That ensure that any subservicer used by the appropriate, through contracts or proposed paragraph also provided that service provider will be able to meet the otherwise, to receive copies of audits the credit union must use due diligence objectives of these guidelines. and test result information sufficient to in managing and monitoring the The final guidelines also require that assure the credit union that the service outsourcing arrangement to confirm that a credit union have a contract with each provider implements information its service providers would protect of its service providers that requires security measures that are consistent member information consistent with each provider to implement appropriate with its contract provisions regarding these guidelines. measures designed to meet the the security of member information. The The NCUA Board requested comment objectives of these guidelines (as stated American Institute of Certified Public on the appropriate treatment of in paragraph II.B.). This provision does Accountants Statement of Auditing outsourcing arrangements, such as, not require a service provider to have a Standards No. 70, captioned ‘‘Reports whether industry best practices are security program in place that complies on the Processing of Transactions by available regarding effective monitoring with each paragraph of these guidelines. Service Organizations’’ (SAS 70 report), of service provider security precautions, Instead, by stating that a service is one commonly used external audit whether service providers accommodate provider’s security measures need only tool for service providers. Information requests for specific contract provisions achieve the objectives of these contained in an SAS 70 report may regarding information security, and, to guidelines, the guidelines provide enable a credit union to assess whether the extent that service providers do not flexibility for a service provider’s its service provider has information accommodate these requests, whether information security measures to differ security measures that are consistent credit unions implement effective from the program that a credit union with representations made to the credit security programs. The NCUA Board implements. The NCUA has provided a union during the service provider also requested comment on whether two-year transition period during which selection process. credit unions would find it helpful if credit unions may bring their the guidelines contained specific outsourcing contracts into compliance. III.E. Adjust the Program contract provisions requiring service (See discussion of paragraph III.F.) Paragraphs III.B.3 and III.C.4. of the provider performance standards in NCUA has not included model contract proposed rule both addressed a credit connection with the security of member language, because of the belief that the union’s obligations when circumstances information. precise terms of service contracts are change. Both paragraph III.B.3. (which NCUA did not receive any comments best left to the parties involved. set forth management’s responsibilities relating to examples of best practices. Each credit union must also exercise with respect to its risk assessment) and However, given the varying complexity an appropriate level of oversight over paragraph III.C.4. (which focused on the and level of services offered by credit each of its service providers to confirm adequacy of a credit union’s information unions, there could be a variety of best that the service provider is security program) identified the possible industry practices. The NCUA and other implementing the provider’s security need for changes to a credit union’s FFIEC Agencies recognize that measures. The NCUA has amended the information security practices are likely guidelines as proposed to include program in light of relevant changes to to evolve rapidly, and thus believe that greater flexibility with regard to the technology, the sensitivity of member it is inappropriate to include best monitoring of service providers. A information, and internal or external practices in the final guidelines. credit union need only monitor its threats to information security. The majority of commenters opposed outsourcing arrangements if such NCUA received no comments the NCUA providing specific contract oversight is indicated by a credit objecting to these paragraphs’ statement provisions in the guidelines. One union’s own risk assessment. NCUA of the need to adjust a credit union’s commenter cautioned the NCUA in recognizes that not all outsourcing program as circumstances change. crossing the boundary between regulator arrangements will need to be monitored While the NCUA Board has not changed and manager in this area. Commenters in the same fashion. Some service the substance of these provisions in the also indicated that requiring specific providers will be financial institutions final guidelines, it has, however, made contract provisions would not be that are directly subject to these a stylistic change to simplify the consistent with the development of guidelines or other standards guidelines. The final guidelines flexible guidelines and recommended promulgated by their primary regulator combine, in paragraph III.E., the against the inclusion of specific under section 501(b). Other service provisions previously stated separately. provisions. providers may already be subject to Consistent with the proposal, this The NCUA believes that credit unions legal and professional standards that paragraph provides that each credit should enter into appropriate contracts, require them to safeguard the credit union must monitor, evaluate, and but also believe that these contracts, union’s member information. Therefore, adjust its information security program alone, are inadequate. Therefore, the the final guidelines permit a credit in light of relevant changes in final guidelines, in paragraph III.D., union to do a risk assessment taking technology, the sensitivity of its member include provisions relating to selecting, these factors into account and determine information, internal or external threats contracting with, and monitoring for themselves which service providers to information, and the credit union’s service providers. will need to be monitored. own changing business arrangements. The final guidelines require that a Even where monitoring is warranted, This would include an analysis of risks credit union exercise appropriate due the guidelines do not require on-site to member information posed by new diligence in the selection of service inspections. Instead, the guidelines state technology (and any needed program providers. Due diligence should include that this monitoring can be adjustments) before a credit union a review of the measures taken by a accomplished, for example, through the adopts the technology in order to service provider to protect member periodic review of the service provider’s determine whether a security program information. As previously noted in the associated audits, summaries of test remains adequate in light of the new discussion of ‘‘service provider,’’ it also results, or equivalent measures of the risks presented.
VerDate 11
III.F. Report to the Board The NCUA believes that the dates for IV. Regulatory Procedures full compliance with these guidelines A. Paperwork Reduction Act Paragraph III.A.2.c. of the proposal set and the Privacy Rule should coincide. out management’s responsibilities for Credit unions are required, as part of The NCUA Board has submitted the reporting to its board of directors. As their privacy notices, to disclose their reporting requirements in this final rule previously discussed, the final policies and practices with respect to to the Office of Management and Budget guidelines have removed specific (OMB) and is awaiting approval and protecting the confidentiality and requirements for management, but revised issuance of OMB control security of nonpublic personal instead allow a credit union to number 3133–0053. determine who within the organization information. See 12 CFR 716.6(a)(8). The Paperwork Reduction Act and should carry out a given responsibility. NCUA has provided in the Appendix to OMB regulations require that the public The board of directors reporting its Privacy Rule that a credit union may be provided an opportunity to comment requirement thus has been amended to satisfy this disclosure requirement by on the paperwork requirements, require that a credit union report to its advising its members that the credit including an agency’s estimate of the board of directors, and that this report union maintains physical, electronic, burden of the paperwork requirements. be at least annually. Paragraph III.F. of and procedural safeguards that comply The NCUA Board invited comment on: the final guidelines sets out this with federal standards to guard (1) whether the paperwork requirements requirement. members’ nonpublic personal are necessary; (2) the accuracy of The NCUA Board invited comment information. See Appendix A–7. The NCUA’s estimate on the burden of the regarding the appropriate frequency of NCUA believes that this disclosure will paperwork requirements; (3) ways to reports to the board of directors, be meaningful only if the final enhance the quality, utility, and clarity including whether reports should be guidelines are effective when the of the paperwork requirements; and (4) monthly, quarterly, or annually. The disclosure is made. If the effective date ways to minimize the burden of the NCUA and the other FFIEC Agencies of these guidelines is extended beyond paperwork requirements. received a number of comments July 1, 2001, then a credit union may be Only two commenters provided feedback on this issue. One indicated recommending that no specific placed in the position of providing an the 40-hour estimate may be too frequency be mandated by the initial notice regarding confidentiality guidelines and that each financial burdensome for smaller credit unions and security and thereafter amending and NCUA should consider minimum institution be permitted to establish its the privacy policy to accurately refer to own reporting period. Several standards for smaller credit unions the federal standards once they became based on their sophistication, resources, commenters stated that if a reporting effective. For these reasons, the NCUA period is required, then it should be not and complexity. The other commenter and other FFIEC Agencies have retained stated that the 40-hour estimate was too less than annually unless some material July 1, 2001, as the effective date for the event triggers the need for an interim low and suggested it be twice as long. guidelines. The NCUA believes these guidelines report. However, the NCUA and the other do represent minimum standards for The NCUA expects that in all cases, protecting member information and are management will provide its board of FFIEC Agencies have included a transition rule for contracts with service consistent with current practices among directors (or the appropriate board most credit unions. NCUA believes the committee) a written report on the providers. The transition rule, which parallels a similar provision in the changes made to the final rule enhance information security program consistent its flexibility for small credit unions, with the guidelines at least annually. Privacy Rule, provides a two-year period for grandfathering existing based on their own risk assessment and Management of credit unions with more complexity of services. While NCUA contracts. Thus a contract entered into complex information systems may find recognizes that it may take some credit on or before the date that is 30 days after it necessary to provide information to unions longer than 40 hours, the the board of directors (or a committee) publication of the final guidelines in the estimate is based on the average number on a more frequent basis. Similarly, Federal Register satisfies the provisions of hours. Therefore, NCUA is retaining more frequent reporting will be of this part until July 1, 2003, even if the the 40-hour estimate. appropriate whenever a material event contract does not include provisions affecting the system occurs or a material delineating the servicer’s duties and B. Regulatory Flexibility Act modification is made to the system. responsibilities to protect member The Regulatory Flexibility Act (5 NCUA expects the content of these information described in paragraph U.S.C. 601–612) requires, subject to reports will vary for each credit union, III.D. certain exceptions, that NCUA prepare depending on the nature and scope of NCUA intends to maintain its 90-day an initial regulatory flexibility analysis its activities as well as the different compliance period for newly-chartered (IRFA) with a proposed rule and a final circumstances that it will confront as it or insured credit unions found in regulatory flexibility analysis (FRFA) implements and maintains the program. with a final rule, unless NCUA certifies § 748.0(a). This section requires that that the rule will not have a significant III.G. Implement the Standards each credit union establish its written economic impact on a substantial NCUA has added paragraph III.G. to security program within 90 days from number of small credit unions. For the final rule to describe the timing the date of insurance. While the GLB purposes of the Regulatory Flexibility requirements for implementing these Act and the other FFIEC Agencies’ Act, and in accordance with NCUA’s standards. Each credit union should regulations are silent as to compliance authority under 5 U.S.C. 601(4), NCUA take appropriate steps to fully for newly chartered or insured has determined that small credit unions implement an information security institutions, NCUA believes it is are those with less than one million program pursuant to these guidelines by reasonable to continue to provide this dollars in assets. See 12 CFR 791.8(a). July 1, 2001. This date is consistent with compliance time frame for such credit NCUA’s final rule will apply to the Privacy Rule and the other FFIEC unions. approximately 1,624 small credit Agencies. unions.
VerDate 11
At the time of issuance of the unions, and a final regulatory flexibility PART 748—SECURITY PROGRAM, proposed rule, NCUA could not make a analysis is not required. REPORT OF CRIME AND determination for certification. C. Executive Order 13132 CATASTROPHIC ACT AND BANK Therefore, NCUA issued an IRFA SECRECY ACT COMPLIANCE. pursuant to section 603 of the Executive Order 13132 encourages Regulatory Flexibility Act. After independent regulatory agencies to 1. The authority citation for part 748 reviewing the comments submitted in consider the impact of their regulatory is revised to read as follows: response to the proposed rule, the actions on state and local interests. In Authority: 12 U.S.C. 1766(a), 1786(q); 15 NCUA certifies that this final rule for adherence to fundamental federalism U.S.C. 6801 and 6805(b); 31 U.S.C. 5311. principles, NCUA, an independent establishing guidelines for safeguarding 2. Heading for Part 748 is revised as regulatory agency as defined in 44 member information will not have a set forth above. significant economic impact on a U.S.C. 3502(5), voluntarily complies with the executive order. This final rule 3. In § 748.0 revise paragraph (b) to substantial number of small entities. read as follows: Two commenters specifically applies to all federally-insured credit responded to this issue. Both indicated unions, but it does not have substantial § 748.0 Security program. direct effect on the states, on the that the guidelines may be too * * * * * burdensome for small credit unions, and relationship between the national (b) The security program will be suggested that a different set of government and the states, or on the designed to: standards should apply to small credit distribution of power and (1) Protect each credit union office unions whose member information is responsibilities among the various from robberies, burglaries, larcenies, not accessible to the outside to reduce levels of government. NCUA has and embezzlement; the burden and paperwork. The determined the final rule and appendix (2) Ensure the security and comment letters do not provide the does not constitute a policy that has confidentiality of member records, federalism implications for purposes of NCUA data to quantify the costs of protect against anticipated threats or the executive order. implementing the requirements of the hazards to the security or integrity of final guidelines. D. Treasury and General Government such records, and protect against The NCUA anticipates the compliance Appropriations Act, 1999 unauthorized access to or use of such costs will vary across credit unions. NCUA has determined that the records that could result in substantial However, safeguarding member proposed rule and appendix will not harm or serious inconvenience to a information is a vital aspect of the affect family well-being within the member; ongoing business operations of all credit meaning of section 654 of the Treasury (3) Assist in the identification of unions. The potential cost to a credit and General Government persons who commit or attempt such union’s reputation caused by lack of Appropriations Act, 1999, Pub. L. 105– actions and crimes; and member confidence necessitates secure 277, 112 Stat. 2681 (1998). (4) Prevent destruction of vital systems for a credit union to remain records, as defined in 12 CFR part 749. competitive. E. Small Business Regulatory 4. Add Appendix A to part 748 to The final guidelines implement the Enforcement Fairness Act read as follows: provisions of Title V, Subtitle A, section The Small Business Regulatory Appendix A to Part 748—Guidelines for 501 of the GLB and apply to all financial Enforcement Fairness Act of 1996 (Pub. Safeguarding Member Information institutions. The NCUA has attempted L. 104–121) provides generally for to minimize any significant economic congressional review of agency rules. A Table of Contents impact on a larger number of small reporting requirement is triggered in I. Introduction credit unions. This final rulemaking instances where NCUA issues a final A. Scope does not substantively change existing rule as defined by section 551 of the B. Definitions statutory requirements or represent any Administrative Procedures Act. 5 U.S.C. II. Guidelines for Safeguarding Member change in the policies of the NCUA, but 551. NCUA is recommending to the Information provides appropriate standards relating OMB that it determine that this is not A. Information Security Program a major rule, and awaits its B. Objectives to the security and confidentiality of III. Development and Implementation of member records. Nor do the final determination. Member Information Security Program guidelines substantively change existing V. Agency Regulatory Goal A. Involve the Board of Directors information system guidance. The final B. Assess Risk guidelines were designed to be NCUA’s goal is clear, understandable C. Manage and Control Risk consistent with security-related regulations that impose minimal D. Oversee Service Provider Arrangements supervisory guidance previously issued regulatory burden. No commenters E. Adjust the Program by the NCUA and the FFIEC. addressed this particular request for F. Report to the Board G. Implement the Standards Consequently, the NCUA believes comments. these guidelines represent minimum List of Subjects in 12 CFR Part 748 I. Introduction standards for protecting member Credit unions, Crime, Currency, The Guidelines for Safeguarding Member information and are consistent with Information (Guidelines) set forth standards Reporting and recordkeeping current practices among most credit pursuant to sections 501 and 505(b), codified requirements and Security measures. unions. Further, NCUA believes the at 15 U.S.C. 6801 and 6805(b), of the Gramm- changes made to the final rule enhance By the National Credit Union Leach-Bliley Act. These Guidelines provide its flexibility for small credit unions, Administration Board on January 18, 2001. guidance standards for developing and implementing administrative, technical, and based on their own risk assessment and Becky Baker, Secretary of the Board. physical safeguards to protect the security, complexity of services. For these confidentiality, and integrity of member reasons the final guidelines will not For the reasons set forth in the information. have a significant economic impact on preamble, the NCUA Board amends 12 A. Scope. The Guidelines apply to member a substantial number of small credit CFR part 748 as follows: information maintained by or on behalf of
VerDate 11
federally-insured credit unions. Such entities consideration the sensitivity of member to confirm that they have satisfied their are referred to in this appendix as ‘‘the credit information; and obligations as required by paragraph D.2. As union.’’ 3. Assess the sufficiency of policies, part of this monitoring, a credit union should B. Definitions. 1. In general. Except as procedures, member information systems, review audits, summaries of test results, or modified in the Guidelines or unless the and other arrangements in place to control other equivalent evaluations of its service context otherwise requires, the terms used in risks. providers. these Guidelines have the same meanings as C. Manage and Control Risk. Each credit E. Adjust the Program. Each credit union set forth in 12 CFR part 716. union should: should monitor, evaluate, and adjust, as 2. For purposes of the Guidelines, the 1. Design its information security program appropriate, the information security following definitions apply: to control the identified risks, commensurate program in light of any relevant changes in a. Member means any member of the credit with the sensitivity of the information as well technology, the sensitivity of its member union as defined in 12 CFR 716.3(n). as the complexity and scope of the credit information, internal or external threats to b. Member information means any records union’s activities. Each credit union must information, and the credit union’s own containing nonpublic personal information, consider whether the following security changing business arrangements, such as as defined in 12 CFR 716.3(q), about a measures are appropriate for the credit union mergers and acquisitions, alliances and joint member, whether in paper, electronic, or and, if so, adopt those measures the credit ventures, outsourcing arrangements, and other form, that is maintained by or on behalf union concludes are appropriate: changes to member information systems. of the credit union. a. Access controls on member information F. Report to the Board. Each credit union c. Member information system means any systems, including controls to authenticate should report to its board or an appropriate method used to access, collect, store, use, and permit access only to authorized committee of the board at least annually. transmit, protect, or dispose of member individuals and controls to prevent This report should describe the overall status information. employees from providing member of the information security program and the d. Service provider means any person or information to unauthorized individuals who credit union’s compliance with these entity that maintains, processes, or otherwise may seek to obtain this information through guidelines. The report should discuss is permitted access to member information fraudulent means; material matters related to its program, through its provision of services directly to b. Access restrictions at physical locations addressing issues such as: risk assessment; the credit union. containing member information, such as risk management and control decisions; buildings, computer facilities, and records service provider arrangements; results of II. Standards for Safeguarding Member storage facilities to permit access only to testing; security breaches or violations and Information authorized individuals; management’s responses; and A. Information Security Program. A c. Encryption of electronic member recommendations for changes in the comprehensive written information security information, including while in transit or in information security program. program includes administrative, technical, storage on networks or systems to which G. Implement the Standards. and physical safeguards appropriate to the unauthorized individuals may have access; 1. Effective date. Each credit union must size and complexity of the credit union and d. Procedures designed to ensure that implement an information security program the nature and scope of its activities. While member information system modifications pursuant to the objectives of these Guidelines all parts of the credit union are not required are consistent with the credit union’s by July 1, 2001. to implement a uniform set of policies, all information security program; 2. Two-year grandfathering of agreements elements of the information security program e. Dual controls procedures, segregation of with service providers. Until July 1, 2003, a must be coordinated. duties, and employee background checks for contract that a credit union has entered into B. Objectives. A credit union’s information employees with responsibilities for or access with a service provider to perform services security program should be designed to: to member information; for it or functions on its behalf satisfies the ensure the security and confidentiality of f. Monitoring systems and procedures to provisions of paragraph III.D., even if the member information; protect against any detect actual and attempted attacks on or contract does not include a requirement that anticipated threats or hazards to the security intrusions into member information systems; the servicer maintain the security and or integrity of such information; and protect g. Response programs that specify actions confidentiality of member information, as against unauthorized access to or use of such to be taken when the credit union suspects long as the credit union entered into the information that could result in substantial or detects that unauthorized individuals have contract on or before March 1, 2001. harm or inconvenience to any member. gained access to member information [FR Doc. 01–2494 Filed 1–29–01; 8:45 am] Protecting confidentiality includes honoring systems, including appropriate reports to members’ requests to opt out of disclosures regulatory and law enforcement agencies; BILLING CODE 7535–01–P to nonaffiliated third parties, as described in and 12 CFR 716.1(a)(3). h. Measures to protect against destruction, loss, or damage of member information due DEPARTMENT OF TRANSPORTATION III. Development and Implementation of to potential environmental hazards, such as Member Information Security Program fire and water damage or technical failures. Federal Aviation Administration A. Involve the Board of Directors. The 2. Train staff to implement the credit board of directors or an appropriate union’s information security program. 14 CFR Part 25 committee of the board of each credit union 3. Regularly test the key controls, systems should: and procedures of the information security [Docket No. NM182; Special Conditions No. 1. Approve the credit union’s written program. The frequency and nature of such 25–172–SC] information security policy and program; and tests should be determined by the credit 2. Oversee the development, union’s risk assessment. Tests should be Special Conditions: Honeywell implementation, and maintenance of the conducted or reviewed by independent third International, Inc.; Boeing Model 747– credit union’s information security program, parties or staff independent of those that 300 Series Airplanes; High-Intensity including assigning specific responsibility for develop or maintain the security programs. Radiated Fields (HIRF) its implementation and reviewing reports D. Oversee Service Provider Arrangements. from management. Each credit union should: AGENCY: Federal Aviation B. Assess Risk. Each credit union should: 1. Exercise appropriate due diligence in Administration (FAA), DOT. 1. Identify reasonably foreseeable internal selecting its service providers; and external threats that could result in 2. Require its service providers by contract ACTION: Final special conditions; request unauthorized disclosure, misuse, alteration, to implement appropriate measures designed for comments. or destruction of member information or to meet the objectives of these guidelines; member information systems; and SUMMARY: These special conditions are 2. Assess the likelihood and potential 3. Where indicated by the credit union’s issued for Boeing Model 747–300 series damage of these threats, taking into risk assessment, monitor its service providers airplanes modified by Honeywell
VerDate 11
International, Inc. These modified instances with no substantive comments present misleading information to the airplanes will have novel or unusual received. The FAA, therefore, finds that pilot. design features associated with the good cause exists for making these The subject Boeing Model 747–300 installation of new navigation special conditions effective upon series airplanes are four-engine management system that includes issuance. transport category airplanes with a electronic flight instrument system Comments Invited wingspan of 195 ft. 8 in. (59.6 m) and (EFIS) displays. The EFIS displays will an overall length of 231 ft. 10.2 in. (70.6 use electrical and electronic systems Although these special conditions are m). They are essentially identical to the that perform critical functions. The being issued as final special conditions earlier Model 747–200 series, but have applicable airworthiness regulations do without prior public notice, interested a stretched upper deck. Their maximum not contain adequate or appropriate persons are invited to submit such takeoff weight is 833,000 lbs. (374,850 safety standards for the protection of written data, views, or arguments as kg) and typical cruise speed at 35,000 these systems from the effects of high- they may desire. Communications feet is Mach 0.85/565 mph (910 km/h) intensity-radiated fields (HIRF). These should identify the regulatory docket special conditions contain the number and be submitted in duplicate Type Certification Basis additional safety standards that the to the address specified above. All Under the provisions of 14 CFR Administrator considers necessary to communications received on or before 21.101, Honeywell must show that the establish a level of safety equivalent to the closing date for comments will be Boeing Model 747–300 series airplanes, that established by the existing considered by the Administrator. The as modified, continue to meet the airworthiness standards. special conditions may be changed in applicable provisions of the regulations DATES: The effective date of these light of the comments received. All incorporated by reference in Type special conditions is January 16, 2001. comments received will be available in Certificate No. A20WE, or the applicable Comments must be received on or the Rules Docket for examination by regulations in effect on the date of before March 1, 2001. interested persons, both before and after application for the modification. The the closing date for comments. A report ADDRESSES: Comments on these special regulations incorporated by reference in summarizing each substantive public conditions may be mailed in duplicate the type certificate are commonly contact with FAA personnel concerning to: Federal Aviation Administration, referred to as the ‘‘original type this rulemaking will be filed in the Transport Airplane Directorate, certification basis.’’ docket. Commenters wishing the FAA to Attention: Rules Docket (ANM–114), The regulations incorporated by acknowledge receipt of their comments Docket No. NM182, 1601 Lind Avenue reference in Type Certificate No. submitted in response to these special SW., Renton, Washington 98055–4056; A20WE for the Boeing Model 747–300 conditions must include a self- or delivered in duplicate to the series airplanes are as follows: addressed, stamped postcard on which Transport Airplane Directorate at that the following statement is made: 1. Regulations address. All comments must be marked: ‘‘Comments to NM182.’’ The postcard • 14 CFR parts 1, 21, 34 (fuel vent ‘‘Docket No. NM182.’’ Comments may will be date stamped and returned to the and exhaust emission requirements), be inspected in the Rules Docket commenter. weekdays, except Federal holidays, and 36 (noise certification between 7:30 a.m. and 4:00 p.m. Background requirements). • FOR FURTHER INFORMATION CONTACT: For On October 20, 2000, Honeywell 14 CFR part 25, effective February information concerning the certification International Inc., 15001 N.E. 36th 1, 1965. program for the Boeing Model 747–300 Street, P.O. Box 97001, Redmond, • Amendments 25–1 through 25–8, series airplanes modified by Honeywell Washington 98073–9701, applied for a plus 25–15, 25–17, 25–18, 25–20, and International, Inc., contact: Ross Landes, Supplemental Type Certificate (STC) for 25–39 (transmitted by FAA letter dated Standardization Branch, ANM–113, the Boeing Model 747–300 series February 4, 1977). Transport Airplane Directorate, Aircraft airplanes operated by South African • Amendment 25–36, re: RB211 Certification Service, 1601 Lind Avenue Airways (SAA). Honeywell plans to engine oil filter system compliance with SW., Renton, Washington 98055–4056; install upgraded avionics equipment on § 25.1019 and § 25.1305(c)(7). telephone (425) 227–145; fax (425) 227– these airplanes. This equipment • Amendment 25–46, § 25.803(d) 1149. includes an electronic flight instrument (Transmitted by FAA letter to The For information on the general subject system (EFIS) that displays attitude and Boeing Company, dated September 2, of HIRF, contact: Massoud Sadeghi, heading information, and is 1983. This is limited to all passenger Federal Aviation Administration, manufactured by Astronautics. The configurations and 6/7 palet combi Transport Airplane Directorate, modified airplanes are scheduled for configurations.) Airplane and Flight Crew Interface certification in January 2001. 2. Special Conditions Branch, ANM–111, 1601 Lind Avenue The Astronautics EFIS provides a SW., Renton, Washington 98055–4056; critical function that displays attitude • Special conditions summarized for telephone (425) 227–2117; fax (425) and heading information. The EFIS record purposes as enclosed with FAA 227–1320. must be designed and installed to letter to The Boeing Company dated SUPPLEMENTARY INFORMATION: The FAA ensure that its operation is not adversely February 20, 1970. has determined that notice and affected by high intensity radiated fields • Special Conditions 4A, revised to opportunity for prior public comment (HIRF). These functions can be apply to airplanes with the landing gear hereon are impracticable because these susceptible to disruption of both load evener system deleted (recorded as procedures would significantly delay command and response signals as a attachment to an FAA letter to The issuance of the approval design and result of electrical and magnetic Boeing Company dated May 12, 1971). thus delivery of the affected aircraft. In interference caused by HIRF external to • Special Conditions No. 25–61–NW– addition, the substance of these special the airplane. This disruption of signals 1 for occupancy not to exceed 32 conditions has been subject to the could result in loss of critical flight passengers on the upper deck of public comment process in several prior displays and annunciations, or could airplanes with spiral staircase
VerDate 11
(transmitted to The Boeing Company by required by § 11.38, and become part of immunity of critical avionics/ FAA letter dated February 26, 1975). the airplane’s type certification basis in electronics and electrical systems to • Special Conditions No. 25–71–NW– accordance with § 21.101(b)(2). HIRF must be established. 3 for occupancy not to exceed 45 The special conditions approved in It is not possible to precisely define passengers on the upper deck of this new document will form an the HIRF to which the airplane will be airplanes with straight segmented additional part of the type certification exposed in service. There is also stairway (transmitted to The Boeing basis for these airplanes. uncertainty concerning the effectiveness Company by FAA letter dated Special conditions are initially of airframe shielding for HIRF. September 8, 1976). applicable to the model for which they Furthermore, coupling of • Modification of Special Conditions are issued. Should Honeywell apply for electromagnetic energy to cockpit- No. 25–71–NW–3 for occupancy not to a supplemental type certificate to installed equipment through the cockpit exceed 110 passengers on the upper modify any other model included on the window apertures is undefined. Based deck of airplanes with segmented same type certificate to incorporate the on surveys and analysis of existing HIRF stairway (transmitted to The Boeing same novel or unusual design features, emitters, an adequate level of protection Company by FAA letter dated August 3, these special conditions would also exists when compliance with the HIRF 1981). apply to the other model under the protection special condition is shown • Special Conditions No. 25–77–NW– provisions of § 21.101(a)(1). with either paragraph 1. or, 4—modification of the autopilot system Novel or Unusual Design Features alternatively, paragraph 2., below: to approve the airplane for use of the 1. A minimum threat of 100 volts rms system under category IIIb landing The Boeing Model 747–300 series per meter electric field strength from 10 conditions (transmitted to The Boeing airplanes modified by Honeywell will KHz to 18 GHz. Company by FAA letter dated July 8, incorporate the Astronautics EFIS a. The threat must be applied to the 1977). system, which performs critical system elements and their associated • Special Condition No. 25–ANM–16 functions. The EFIS system contains wiring harnesses without the benefit of for installation of an overhead crew rest electronic equipment for which the airframe shielding. area, occupancy not to exceed 10 current airworthiness standards (14 CFR b. Demonstration of this level of crewmembers. (The FAA-approved part 25) do not contain adequate or protection is established through system procedures required for compliance appropriate safety standards that tests and analysis. with paragraph 13 of the Special address protecting this equipment from Or Condition are located in Boeing the adverse effects of HIRF. This system Document D926U303, Appendix D.) may be vulnerable to HIRF external to 2. A threat external to the airframe for both of the following field strengths for 3. Exemptions From 14 CFR Part 25 the airplane. Accordingly, this system is the frequency ranges indicated. Both • considered to be a novel or unusual Exemption No. 1013A, dated design feature. peak and average field strength December 24, 1969. components from Table 1 are to be • Exemption No. 1870D, dated April Discussion demonstrated. 3, 1991. There is no specific regulation that • Exemption No. 3035 dated addresses the requirements for TABLE 1 September 9, 1980. protection of electrical and electronic 4. Compliance With the Following systems from HIRF. Increased power Field Strength (volts per meter) Optional Requirements levels from ground-based radio Frequency transmitters and the growing use of • § 25.801, ‘‘Ditching.’’ Peak Average • § 25.1419, ‘‘Ice protection.’’ sensitive electrical and electronic systems to command and control 10 kHz–100 kHz ...... 50 50 5. Equivalent Safety Findings With airplanes have made it necessary to 100 kHz–500 kHz ..... 50 50 Respect to the Following Regulations provide adequate protection. 500 kHz–2 MHz ...... 50 50 2 MHz–30 MHz ...... 100 100 • § 25.773(b)(2)(i), amendments 25–1 To ensure that a level of safety is achieved that is equivalent to that 30 MHz–70 MHz ...... 50 50 through 25–67, ‘‘Pilot compartment 70 MHz–100 MHz ..... 50 50 view.’’ intended by the regulations 100 MHz–200 MHz ... 100 100 • § 25.811(f), ‘‘Emergency exit incorporated by reference, special 200 MHz–400 MHz ... 100 100 marking.’’ conditions are needed for the Boeing 400 MHz–700 MHz ... 700 50 • § 25.812(k)(2), ‘‘Emergency Model 747–300 airplanes modified by 700 MHz–1 GHz ...... 700 100 lighting.’’ Honeywell to include the Astronautics 1 GHz–2 GHz ...... 2000 200 • § 25.815, ‘‘Width of aisle.’’ EFIS system. These special conditions 2 GHz–4 GHz ...... 3000 200 • § 25.1415(d) ‘‘Ditching equipment’’ will require that this system, which 4 GHz–6 GHz ...... 3000 200 [re: Emergency Locator Transmitter performs critical functions, be designed 6 GHz–8 GHz ...... 1000 200 (ELT)]. and installed to preclude component 8 GHz–12 GHz ...... 3000 300 If the Administrator finds that the 12 GHz–18 GHz ...... 2000 200 damage and interruption of function 18 GHz–40 GHz ...... 600 200 applicable airworthiness regulations due to both the direct and indirect (i.e., 14 CFR part 25, as amended) do not effects of HIRF. The field strengths are expressed in terms contain adequate or appropriate safety of peak of the root-mean-square (rms) over the complete modulation period. standards for the Boeing Model 747–300 High-Intensity Radiated Fields (HIRF) series airplanes modified by Honeywell With the trend toward increased The threat levels identified in Table 1 because of a novel or unusual design power levels from ground-based are the result of an FAA review of feature, special conditions are transmitters, plus the advent of space existing studies on the subject of HIRF, prescribed under the provisions of and satellite communications coupled in light of the ongoing work of the § 21.16. with electronic command and control of Electromagnetic Effects Harmonization Special conditions, as appropriate, are the airplane, and the use of composite Working Group of the Aviation issued in accordance with § 11.19, as material in the airplane structure, the Rulemaking Advisory Committee.
VerDate 11
Applicability system that performs critical functions 03–AD, 12 New England Executive Park, As discussed above, these special must be designed and installed to Burlington, MA 01803–5299. Comments conditions are applicable to the Boeing ensure that the operation and may also be sent via the Internet using Model 747–300 series airplanes operational capability of these systems the following address: ‘‘9-ane- modified by Honeywell International, to perform critical functions are not [email protected].’’ Comments sent Inc., to include the Astronautics EFIS adversely affected when the airplane is via the Internet must contain the docket system. Should Honeywell apply at a exposed to high-intensity radiated number in the subject line. later date for a supplemental type fields. FOR FURTHER INFORMATION CONTACT: certificate to modify any other model 2. For the purpose of these special Diane Cook, Aerospace Engineer, Engine included on Type Certificate A20WE to conditions, the following definition Certification Office, FAA, Engine and incorporate the same novel or unusual applies: Critical Functions: Functions Propeller Directorate, 12 New England design features, these special conditions whose failure would contribute to or Executive Park, Burlington, MA 01803– would apply to that model as well cause a failure condition that would 5299; telephone 781–238–7133, fax under the provisions of § 21.101(a)(1). prevent the continued safe flight and 781–238–7199. landing of the airplane. SUPPLEMENTARY INFORMATION: The FAA Conclusion Issued in Renton, Washington, on January has received reports of two in-flight This action affects only certain novel 16, 2001. shutdowns and one aborted take-off on or unusual design features on the Donald L. Riggin, three different Boeing 737NG airplanes Boeing Model 747–300 series airplanes Acting Manager, Transport Airplane powered by CFM56–7B turbofan modified by Honeywell International, Directorate, Aircraft Certification Service. engines. In all of these cases, the engine Inc. It is not a rule of general [FR Doc. 01–2037 Filed 1–29–01; 8:45 am] rolled back to idle speed and would not applicability and affects only the BILLING CODE 4910–13–U accelerate. The investigation revealed applicant who applied to the FAA for that the PS3 pressure line B-nut fitting approval of these features on the at the 6 o’clock position had airplanes. DEPARTMENT OF TRANSPORTATION disconnected in two of these events and As stated previously, the substance of the PS3 pressure B-nut fitting at the the special conditions has been Federal Aviation Administration combustion case port location had subjected to the notice and comment disconnected in the third event. An period in several prior instances and has 14 CFR Part 39 operator, involved in one of the IFSD been derived without substantive [Docket No. 2001–NE–03–AD; Amendment events, completed on-wing torque change from those previously issued. It 39–12097; AD 2001–02–12] inspections of the PS3 pressure line is unlikely that prior public comment fittings of its CFMI CFM56–7B fleet. As RIN 2120–AA64 would result in a significant change a result of these inspections, one engine from the substance contained herein. Airworthiness Directives; CFM was found with a loose B-nut fitting at For this reason, and because a delay International (CFMI) Model CFM56–7B the 6 o’clock location and two engines would significantly affect the Turbofan Engines were found with loose cap fittings at the certification of the airplane, which is 6 o’clock location. The two engines with imminent, the FAA has determined that AGENCY: Federal Aviation loose caps were on the same airplane. prior public notice and comment are Administration, DOT. The investigation also initiated PS3 unnecessary and impracticable, and ACTION: Final rule; request for pressure line fitting torque inspections good cause exists for adopting these comments. on 10 engines that were on Boeing’s special conditions upon issuance. The flight line. These inspections revealed FAA is requesting comments to allow SUMMARY: This amendment adopts a one engine with a loose B-nut fitting at interested persons to submit views that new airworthiness directive (AD) that is the 6 o’clock position and one engine may not have been submitted in applicable to CFMI model CFM56–7B with a loose cap fitting at the 6 o’clock response to the prior opportunities for turbofan engines. This action requires a position. General Electric and SNECMA comment described above. one-time on-wing torque inspection, also inspected CFM56–7B engines that and torque if needed, of all the PS3 List of Subjects in 14 CFR Part 25 were in assembly. No loose fittings were pressure line fittings to insure proper found. The investigation to determine Aircraft, Aviation safety, Reporting torque. This amendment is prompted by the cause of the loose PS3 pressure line and recordkeeping requirements. service events which resulted in two in- fittings continues. Action to insure The authority citation for these flight shutdowns (IFSD’s) and an correct torque of these fittings on special conditions is as follows: aborted takeoff due to the disconnection current production engines has been of one of the PS3 line fittings. The Authority: 49 U.S.C. 106(g), 40113, 44701, initiated by adding a new torque 44702, 44704. actions specified in this AD are inspection requirement for the PS3 intended to prevent air leakage from pressure line fittings at the end of the The Special Conditions incorrectly torqued fittings of the PS3 main engine assembly process. Accordingly, pursuant to the line, which could result in engine However, based on the inspection authority delegated to me by the power loss. results indicated above, it has been Administrator, the following special DATES: Effective February 14, 2001. determined that mandating action on in- conditions are issued as part of the Comments for inclusion in the Rules service engines to ensure that the PS3 supplemental type certification basis for Docket must be received on or before pressure line fittings are correctly the Boeing Model 747–300 series April 2, 2001. torqued is required. airplanes modified by Honeywell ADDRESSES: Submit comments in International, Inc. triplicate to the Federal Aviation Requirements of This AD 1. Protection from Unwanted Effects Administration (FAA), New England Since an unsafe condition has been of High-Intensity Radiated Fields Region, Office of the Regional Counsel, identified that is likely to exist or (HIRF). Each electrical and electronic Attention: Rules Docket No. 2001–NE– develop on other engines of the same
VerDate 11
type design, this AD is being issued to must submit a self-addressed, stamped § 39.13 [Amended] prevent air leakage from incorrectly postcard on which the following 2. Section 39.13 is amended by torqued fittings of the PS3 line, which statement is made: ‘‘Comments to adding the following new airworthiness could result in engine power loss. Docket Number 2001–NE–03–AD.’’ The directive: This AD requires a one-time, on-wing postcard will be date stamped and torque inspection of all the PS3 pressure returned to the commenter. 2001–02–12 CFM International: line fittings to insure correct torque and, Amendment 39–12097. Docket No. if necessary, torquing of those fittings to Regulatory Impact 2001–NE–03–AD. their correct value within 25 days after This proposed rule does not have Applicability the effective date of this AD. federalism implications, as defined in This airworthiness directive (AD) is Immediate Adoption of This AD Executive Order No. 13132, because it applicable to all CFM International (CFMI) would not have a substantial direct model CFM56–7B turbofan engines except Since a situation exists that requires effect on the States, on the relationship for engines with serial numbers DAC 876– the immediate adoption of this 747 and higher, and SAC 888–XXX and 889– between the national government and regulation, it is found that notice and XXX: 166–168, 172–173, 175–178, 180 and the States, or on the distribution of opportunity for prior public comment higher. These engines are installed on, but power and responsibilities among the hereon are impracticable, and that good not limited to, Boeing 737NG airplanes. various levels of government. cause exists for making this amendment Note 1: This AD applies to each engine Accordingly, the FAA has not consulted effective in less than 30 days. identified in the preceding applicability with state authorities prior to provision, regardless of whether it has been Comments Invited publication of this proposed rule. modified, altered, or repaired in the area Although this action is in the form of subject to the requirements of this AD. For The FAA has determined that this engines that have been modified, altered, or a final rule that involves requirements regulation is an emergency regulation repaired so that the performance of the affecting flight safety and, thus, was not that must be issued immediately to requirements of this AD is affected, the preceded by notice and an opportunity correct an unsafe condition in aircraft, owner/operator must request approval for an for public comment, comments are and is not a ‘‘significant regulatory alternative method of compliance in invited on this rule. Interested persons action’’ under Executive Order 12866. It accordance with paragraph (b) of this AD. are invited to comment on this rule by has been determined further that this The request should include an assessment of submitting such written data, views, or action involves an emergency regulation the effect of the modification, alteration, or arguments, as they may desire. under DOT Regulatory Policies and repair on the unsafe condition addressed by Communications should identify the this AD; and, if the unsafe condition has not Procedures (44 FR 11034, February 26, been eliminated, the request should include Rules Docket number and be submitted 1979). If it is determined that this specific proposed actions to address it. in triplicate to the address specified emergency regulation otherwise would under the caption ADDRESSES. All be significant under DOT Regulatory Compliance communications received on or before Policies and Procedures, a final Compliance with this AD is required the closing date for comments will be regulatory evaluation will be prepared within 25 days after the effective date of this considered, and this rule may be and placed in the Rules Docket. A copy AD, unless already done. amended in light of the comments of it, if filed, may be obtained from the To prevent air leakage from incorrectly received. Factual information that Rules Docket at the location provided torqued fittings of the PS3 pressure line, supports the commenter’s ideas and under the caption ADDRESSES. which could result in engine power loss, do suggestions is extremely helpful in the following: List of Subjects in 14 CFR Part 39 (a) Check for and apply the correct torque evaluating the effectiveness of the AD in the tightening direction of all PS3 pressure action and determining whether Air transportation, Aircraft, Aviation line fittings as identified in Figure 1 of this additional rulemaking action would be safety, Safety. AD as Joint 1, Joint 2, Joint 3, Joint 4, Joint needed. 5, and Joint 6 as follows: Comments are specifically invited on Adoption of the Amendment Note 2: CFM International Service Bulletin, the overall regulatory, economic, CFM56–7B S/B 75–0005, dated January 22, environmental, and energy aspects of Accordingly, pursuant to the 2001, and the CFM56 Standard Practice the rule that might suggest a need to authority delegated to me by the Manual, CFMI–TP.SP.2, contain information modify the rule. All comments Administrator, the Federal Aviation on torquing the PS3 pressure line fittings, submitted will be available, both before Administration amends part 39 of the including supporting the pressure line from and after the closing date for comments, Federal Aviation Regulations (14 CFR countertorque. in the Rules Docket for examination by part 39) as follows: (1) Torque Joint 1 to ensure a torque value interested persons. A report that of 140 inch-pounds. (2) Due to accessibility limitations, check summarizes each FAA-public contact PART 39—AIRWORTHINESS DIRECTIVES Joint 2 for finger looseness, and only if loose, concerned with the substance of this AD torque to a value of 285 inch-pounds. will be filed in the Rules Docket. (3) Torque Joint 3, Joint 5, and Joint 6 to Commenters wishing the FAA to 1. The authority citation for part 39 continues to read as follows: ensure a torque value of 285 inch-pounds. acknowledge receipt of their comments (4) Torque Joint 4 to ensure a torque value submitted in response to this action Authority: 49 U.S.C. 106(g), 40113, 44701. of 100 inch-pounds.
VerDate 11
Alternative Methods of Compliance DEPARTMENT OF TRANSPORTATION airplane leading edges, which could (b) An alternative method of compliance or reduce controllability of the airplane. Federal Aviation Administration adjustment of the compliance time that DATES: Effective February 20, 2001. provides an acceptable level of safety may be used if approved by the Manager, Engine 14 CFR Part 39 ADDRESSES: Information concerning this Certification Office (ECO). Operators shall AD may be examined at the Federal [Docket No. 99–NM–226–AD; Amendment submit their requests through an appropriate Aviation Administration (FAA), 39–12092; AD 2001–02–08] FAA Principal Maintenance Inspector, who Transport Airplane Directorate, Rules Docket, 1601 Lind Avenue, SW., may add comments and then send it to the RIN 2120–AA64 Manager, ECO. Renton, Washington. Note 3: Information concerning the Airworthiness Directives; Short FOR FURTHER INFORMATION CONTACT: existence of approved alternative methods of Brothers Model SD3–60 SHERPA, Norman B. Martenson, Manager, compliance with this airworthiness directive, SD3–SHERPA, SD3–30, and SD3–60 International Branch, ANM–116, FAA, if any, may be obtained from the ECO. Series Airplanes Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington AGENCY: Special Flight Permits Federal Aviation 98055–4056; telephone (425) 227–2110; (c) Special flight permits may be issued in Administration, DOT. fax (425) 227–1149. accordance with §§ 21.197 and 21.199 of the ACTION: Final rule. SUPPLEMENTARY INFORMATION: A Federal Aviation Regulations (14 CFR 21.197 proposal to amend part 39 of the Federal and 21.199) to operate the aircraft to a SUMMARY: This amendment adopts a location where the requirements of this AD new airworthiness directive (AD), Aviation Regulations (14 CFR part 39) to can be accomplished. applicable to all Short Brothers Model include an airworthiness directive (AD) SD3–60 SHERPA, SD3–SHERPA, SD3– that is applicable to all Short Brothers Effective Date of This AD 30, and SD3–60 series airplanes, that Model SD3–60 SHERPA, SD3–SHERPA, (d) This amendment becomes effective on requires replacement of the existing SD3–30, and SD3–60 series airplanes, February 14, 2001. pneumatic de-icing boot pressure was published in the Federal Register on October 6, 1999 (64 FR 54239). That Issued in Burlington, Massachusetts, on indicator switch with a newly designed action proposed to require replacement January 23, 2001. switch. This amendment is prompted by an occurrence on a similar airplane of the existing pneumatic de-icing boot Thomas A. Boudreau, model in which the pneumatic de-icing pressure indicator switch with a newly Acting Manager, Engine and Propeller, boot indication light may have provided designed switch. Directorate, Aircraft Certification Service. the flightcrew with misleading Comments [FR Doc. 01–2610 Filed 1–29–01; 8:45 am] information as to the proper functioning BILLING CODE 4910–13–P of the de-icing boots. The actions Interested persons have been afforded specified by this AD are intended to an opportunity to participate in the prevent ice accumulation on the making of this amendment. Due
VerDate 11
consideration has been given to the two that would be required to accomplish alternative method of compliance in comments received. the required modification. accordance with paragraph (b) of this AD. The request should include an assessment of Request To Extend the Comment Period Regulatory Impact the effect of the modification, alteration, or The regulations adopted herein will repair on the unsafe condition addressed by The commenters request that the this AD; and, if the unsafe condition has not comment period for the proposed AD be not have a substantial direct effect on been eliminated, the request should include extended by 2 to 3 months to give the the States, on the relationship between specific proposed actions to address it. manufacturer additional time to develop the national Government and the States, Compliance: Required as indicated, unless a warning system that would adequately or on the distribution of power and accomplished previously. address the identified unsafe condition. responsibilities among the various To prevent ice accumulation on the The commenters consider replacing the levels of government. Therefore, it is airplane leading edges, which could reduce existing pressure indicator switch with determined that this final rule does not controllability of the airplane, accomplish a higher-value switch—without revising have federalism implications under the following: the system logic—to be insufficient to Executive Order 13132. Modification For the reasons discussed above, I ensure a fully effective de-icing system. (a) Within 1 year after the effective date of One commenter requests this extension certify that this action (1) is not a this AD, replace the flight deck pneumatic of time to better define the appropriate ‘‘significant regulatory action’’ under de-icing boot pressure indicator switch with pressure threshold for inflating the de- Executive Order 12866; (2) is not a a switch that activates the flight deck icing boots, which the commenter ‘‘significant rule’’ under DOT indicator light at 15 pounds per square inch estimates to be 12 pounds per square Regulatory Policies and Procedures (44 gage, in accordance with a method approved inch gage (psig), rather than 15 psig as FR 11034, February 26, 1979); and (3) by the Manager, International Branch, ANM– 116, FAA, Transport Airplane Directorate. stated in the proposed AD. The will not have a significant economic commenters add that replacing the impact, positive or negative, on a Alternative Methods of Compliance switch as proposed could generate a substantial number of small entities (b) An alternative method of compliance or large number of false warnings. The under the criteria of the Regulatory adjustment of the compliance time that manufacturer states that it is in the Flexibility Act. A final evaluation has provides an acceptable level of safety may be process of completing additional testing been prepared for this action and it is used if approved by the Manager, and data analysis for use in developing contained in the Rules Docket. A copy International Branch, ANM–116. Operators shall submit their requests through an an appropriate modification. of it may be obtained from the Rules Docket at the location provided under appropriate FAA Principal Maintenance The FAA does not concur with the Inspector, who may add comments and then the caption ADDRESSES. request to extend the comment period. send it to the Manager, International Branch, The manufacturer has had ample time List of Subjects in 14 CFR Part 39 ANM–116. (more than a year) since the issuance of Air transportation, Aircraft, Aviation Note 2: Information concerning the existence of approved alternative methods of the proposed rule to develop an safety, Safety. appropriate modification. In accordance compliance with this AD, if any, may be with the requirements of this AD, the Adoption of the Amendment obtained from the International Branch, ANM–116. manufacturer may submit a Accordingly, pursuant to the modification for approval by the FAA. authority delegated to me by the Special Flight Permits Modifications (including those Administrator, the Federal Aviation (c) Special flight permits may be issued in incorporating the installation of a lower Administration amends part 39 of the accordance with §§ 21.197 and 21.199 of the pressure switch) that positively address Federal Aviation Regulations (14 CFR Federal Aviation Regulations (14 CFR 21.197 the identified unsafe condition may be part 39) as follows: and 21.199) to operate the airplane to a considered as alternative means of location where the requirements of this AD compliance. In addition, if such a PART 39—AIRWORTHINESS can be accomplished. modification is developed, approved, DIRECTIVES Effective Date and available, the FAA may consider (d) This amendment becomes effective on additional rulemaking. 1. The authority citation for part 39 continues to read as follows: February 20, 2001. Conclusion Issued in Renton, Washington, on January Authority: 49 U.S.C. 106(g), 40113, 44701. 18, 2001. After careful review of the available § 39.13 [Amended] Dorenda D. Baker, data, including the comments noted above, the FAA has determined that air 2. Section 39.13 is amended by Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. safety and the public interest require the adding the following new airworthiness adoption of the rule as published. The directive: [FR Doc. 01–2110 Filed 1–29–01; 8:45 am] BILLING CODE 4910–13–U FAA has determined that these changes 2001–02–08 Short Brothers PLC: will neither increase the economic Amendment 39–12092. Docket 99–NM– 226–AD. burden on any operator nor increase the DEPARTMENT OF TRANSPORTATION scope of the AD. Applicability: All Model SD3–60 SHERPA, SD3–SHERPA, SD3–30, and SD3–60 series Federal Aviation Administration Cost Impact airplanes; certificated in any category. The FAA estimates that 89 airplanes Note 1: This AD applies to each airplane 14 CFR Part 71 of U.S. registry will be affected by this identified in the preceding applicability AD. Since the manufacturer has not yet provision, regardless of whether it has been [Airspace Docket No. 00–AAL–10] developed one specific modification modified, altered, or repaired in the area subject to the requirements of this AD. For Establishment of Class E Airspace; commensurate with the requirements of airplanes that have been modified, altered, or Sparrevohn, AK this AD, the FAA is unable at this time repaired so that the performance of the to provide specific information as to the requirements of this AD is affected, the AGENCY: Federal Aviation number of work hours or cost of parts owner/operator must request approval for an Administration (FAA), DOT.
VerDate 11
ACTION: Final rule. procedures used by the commenter to routine matter that will only affect air evaluate airspace needs were not traffic procedures and air navigation, it SUMMARY: This action establishes Class developed by the U.S. Air Force and is certified that this rule will not have E airspace at the Long Range Radar site therefore have no validity in correctly a significant economic impact on a (LRRS) at Sparrevohn, AK. The United analyzing the requested airspace. substantial number of small entities States Air Force requested this action to Furthermore, the U.S. Air Force under the criteria of the Regulatory create controlled airspace for the revalidated the computations for the Flexibility Act. instrument approach and departure requested airspace and ensured that the procedures to runway (RWY) 34 and U.S. Air Force minimized the amount of List of Subjects in 14 CFR Part 71 from RWY 16 at Sparrevohn, AK. This controlled airspace required in action is necessary in order for the Airspace, Incorporation by reference, accordance with FAA Order 7130.3. The Navigation (air). approach and departure procedures to FAA has considered these comments be published in the U.S. Government and determined that the requested Adoption of the Amendment Flight Information Publication, U.S. airspace is needed to provide adequate Terminal Procedures—Alaska. This rule controlled airspace for aircraft flying In consideration of the foregoing, the provides adequate controlled airspace IFR operations in the vicinity of Federal Aviation Administration for aircraft flying Instrument Flight Sparrevohn, AK. Thus, the rule is amends 14 CFR part 71 as follows: Rules (IFR) operations at Sparrevohn, adopted as written. AK. The area will be depicted on PART 71—DESIGNATION OF CLASS A, CLASS B, CLASS C, CLASS D, AND EFFECTIVE DATE: 0901 UTC, March 22, aeronautical charts for pilot reference. 2001. The coordinates for this airspace docket CLASS E AIRSPACE AREAS; are based on North American Datum 83. AIRWAYS; ROUTES; AND REPORTING FOR FURTHER INFORMATION CONTACT: The Class E airspace areas designated as POINTS Major Roger Stirm, Department of the 700/1200 foot transition areas are Air Force Representative, Federal published in paragraph 6005 of FAA 1. The authority citation for 14 CFR Aviation Administration, 222 West 7th Order 7400.9H, Airspace Designations part 71 continues to read as follows: Avenue, Box 14, Anchorage, AK 99513– and Reporting Points, dated September 7587; telephone number (907) 271– Authority: 49 U.S.C. 106(g), 40103, 40113, 1, 2000, and effective September 16, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– 5892; fax: (907) 271–2850; email: 2000, which is incorporated by 1963 Comp., p. 389. [email protected]. Internet address: reference in 14 CFR 71.1. The Class E http://www.alaska.faa.gov/at or at airspace designations listed in this § 71.1 [Amended] address http://162.58.28.41/at. document will be revised and published 2. The incorporation by reference in SUPPLEMENTARY INFORMATION: subsequently in the Order. 14 CFR 71.1 of Federal Aviation History The Rule Administration Order 7400.9H, Airspace Designations and Reporting On September 25, 2000, a proposal to This amendment to 14 CFR part 71 Points, dated September 1, 2000, and amend part 71 of the Federal Aviation establishes Class E airspace at effective September 16, 2000, is Regulations (14 CFR part 71) to revise Sparrevohn, AK, through a request by amended as follows: the Class E airspace at Sparrevohn, AK, the U.S. Air Force to create controlled was published in the Federal Register airspace for the instrument approach * * * * * (65 FR 57569). The proposal was and departure procedures to RWY 34 Paragraph 6005 Class E airspace extending requested by the U.S. Air Force to create and from RWY 16 at Sparrevohn, AK. upward from 700 feet or more above the controlled airspace for the instrument This action is necessary in order for the surface of the earth. approach and departure procedures to approach and departure procedures to * * * * * RWY 34 and from RWY 16 at be published in the U.S. Government Sparrevohn, AK. This action is Flight Information Publication, U.S. AAL AK E5 Sparrevohn, AK [New] necessary in order for the approach and Terminal Procedures—Alaska. The area Sparrevohn LRRS, AK ° ′ ″ ° ′ ″ departure procedures to be published in will be depicted on aeronautical charts (Lat. 61 05 50 N., long. 155 34 27 W.) the U.S. Government Flight Information for pilot reference. The intended effect That airspace extending upward from 700 Publication, U.S. Terminal Procedures— of this rule is to provide adequate feet above the surface within a 3 mile radius Alaska. This rule provides adequate controlled airspace for IFR operations at of the Sparrevohn LRRS; and that adjacent airspace extending upward from 1,200 feet controlled airspace for aircraft flying Sparrevohn, AK. ° ′ ″ IFR operations at Sparrevohn, AK. The FAA has determined that this above the surface from lat. 60 50 00 N long. 156° 00′ 00″ W, counterclockwise to lat. 60° Interested parties were invited to regulation only involves an established 50′ 00″ N long. 154° 32′ 00″ W, to lat. 61° 15′ participate in this rulemaking body of technical regulations for which 00″ N long. 154° 32′ 00″ W, to lat. 61° 15′ 00″ proceeding by submitting written frequent and routine amendments are N long. 156° 00′ 00″ W, thence south along comments on the proposal to the FAA. necessary to keep them operationally the 156° longitude to the point of beginning. Public comments to the proposal were current. It, therefore —(1) is not a * * * * * submitted by a commenter representing ‘‘significant regulatory action’’ under both the Alaska Airmen’s Association Executive Order 12866; (2) is not a Issued in Anchorage, AK, on January 16, and the Alaska Communication Systems ‘‘significant rule’’ under DOT 2001. (ACS). The commenter had concerns on Regulatory Policies and Procedures (44 Stephen P. Creamer, the size and orientation of the proposed FR 11034; February 26, 1979); and (3) Assistant Manager, Air Traffic Division, Class E airspace. The U.S. Air Force, in does not warrant preparation of a Alaskan Region. a 28 November 2000 letter to the FAA regulatory evaluation as the anticipated [FR Doc. 01–2233 Filed 1–29–01; 8:45 am] and commenter, pointed out that the impact is so minimal. Since this is a BILLING CODE 4910–13–U
VerDate 11
DEPARTMENT OF TRANSPORTATION Public comments to the proposal were of this rule is to provide adequate submitted by a commenter representing controlled airspace for IFR operations at Federal Aviation Administration both the Alaska Airmen’s Association Cape Newenham, AK. and the Alaska Communication Systems The FAA has determined that this 14 CFR Part 71 (ACS). The commenter had concerns on regulation only involves an established [Airspace Docket No. 00–AAL–12] the size and orientation of the proposed body of technical regulations for which Class E airspace. The U.S. Air Force, in frequent and routine amendments are Establishment of Class E Airspace; a 28 November 2000 letter to the FAA necessary to keep them operationally Cape Newenham, AK and commenter, pointed out that the current. It, therefore —(1) is not a procedures used by the commenter to ‘‘significant regulatory action’’ under AGENCY: Federal Aviation evaluate airspace needs were not Executive Order 12866; (2) is not a Administration (FAA), DOT. developed by the U.S. Air Force and ‘‘significant rule’’ under DOT ACTION: Final rule. therefore have no validity in correctly Regulatory Policies and Procedures (44 analyzing the requested airspace. FR 11034; February 26, 1979); and (3) SUMMARY: This action establishes Class Furthermore, the U.S. Air Force does not warrant preparation of a E airspace at the Long Range Radar site revalidated the computations for the regulatory evaluation as the anticipated (LRRS) at Cape Newenham, AK. The requested airspace and ensured that the impact is so minimal. Since this is a United States Air Force requested this U.S. Air Force minimized the amount of routine matter that will only affect air action to create controlled airspace for controlled airspace required in traffic procedures and air navigation, it the instrument approach and departure accordance with FAA Order 7130.3. The is certified that this rule will not have procedures to runway (RWY) 14 and FAA has considered these comments a significant economic impact on a RWY 32 at Cape Newenham, AK. This and determined that the requested substantial number of small entities action is necessary in order for the airspace is needed to provide adequate under the criteria of the Regulatory approach and departure procedures to controlled airspace for aircraft flying Flexibility Act. be published in the U.S. Government IFR operations in the vicinity of Cape Flight Information Publication, U.S. Newenham, AK. The airspace List of Subjects in 14 CFR Part 71 Terminal Procedures—Alaska. This rule description does overlap the existing Airspace, Incorporation by reference, provides adequate controlled airspace Class E airspace and the exclusionary Navigation (air). for aircraft flying Instrument Flight verbiage was inadvertently left out. The Adoption of the Amendment Rules (IFR) operations at Cape following verbiage has been added to Newenham, AK. the end of the airspace description: In consideration of the foregoing, the EFFECTIVE DATE: 0901 UTC, March 22, ‘‘excluding the existing Class E Federal Aviation Administration 2001. airspace.’’ The FAA has determined that amends 14 CFR part 71 as follows: this change is editorial in nature and FOR FURTHER INFORMATION CONTACT: will not increase the scope of this rule. PART 71—DESIGNATION OF CLASS A, Major Roger Stirm, Department of the Except for the non-substantive change CLASS B, CLASS C, CLASS D, AND Air Force Representative, Federal just discussed, the rule is adopted as CLASS E AIRSPACE AREAS; Aviation Administration, 222 West 7th written. AIRWAYS; ROUTES; AND REPORTING Avenue, Box 14, Anchorage, AK 99513– The area will be depicted on POINTS 7587; telephone number (907) 271– aeronautical charts for pilot reference. 1. The authority citation for 14 CFR 5892; fax: (907) 271–2850; email: The coordinates for this airspace docket part 71 continues to read as follows: [email protected]. Internet address: are based on North American Datum 83. http://www.alaska.faa.gov/at or at The Class E airspace areas designated as Authority: 49 U.S.C. 106(g), 40103, 40113, address http://162.58.28.41/at. 700/1200 foot transition areas are 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– SUPPLEMENTARY INFORMATION: published in paragraph 6005 of FAA 1963 Comp., p. 389. History Order 7400.9H, Airspace Designations § 71.1 [Amended] and Reporting Points, dated September 2. The incorporation by reference in On September 25, 2000, a proposal to 1, 2000, and effective September 16, 14 CFR 71.1 of Federal Aviation amend part 71 of the Federal Aviation 2000, which is incorporated by Administration Order 7400.9H, Regulations (14 CFR part 71) to revise reference in 14 CFR 71.1. The Class E Airspace Designations and Reporting the Class E airspace at Cape Newenham, airspace designations listed in this Points, dated September 1, 2000, and AK, was published in the Federal document will be revised and published effective September 16, 2000, is Register (65 FR 57576). The proposal subsequently in the Order. amended as follows: was requested by the U.S. Air Force to create controlled airspace for the The Rule * * * * * instrument approach and departure This amendment to 14 CFR part 71 Paragraph 6005 Class E airspace extending procedures to RWY 14 and RWY 32 at establishes Class E airspace at Cape upward from 700 feet or more above the Cape Newenham, AK. This action is Newenham, AK, through a request by surface of the earth. necessary in order for the approach and the U.S. Air Force to create controlled * * * * * departure procedures to be published in airspace for the instrument approach AAL AK E5 Cape Newenham, AK [New] the U.S. Government Flight Information and departure procedures to RWY 32 Cape Newenham LRRS, AK Publication, U.S. Terminal Procedures— and from RWY 14 at Cape Newenham, ° ′ ″ ° ′ ″ Alaska. This rule provides adequate AK. This action is necessary in order for (Lat. 58 38 47 N., long. 162 03 46 W.) controlled airspace for aircraft flying the approach and departure procedures That airspace extending upward from 700 to be published in the U.S. Government feet above the surface within a 7 mile radius IFR operations at Cape Newenham, AK. of the Cape Newenham LRRS; and that Interested parties were invited to Flight Information Publication, U.S. airspace extending upward from 1,200 feet participate in this rulemaking Terminal Procedures—Alaska. The area above the surface from lat. 58° 38′ 00′ N long. proceeding by submitting written will be depicted on aeronautical charts 162° 18′ 00″ W, clockwise to lat. 58° 50′ 00″ comments on the proposal to the FAA. for pilot reference. The intended effect N long. 162° 26′ 00″ W, to lat. 59° 14′ 00″ N
VerDate 11
long. 162° 26′ 00″ W, to lat. 59° 14′ 00″ N create controlled airspace for the Flight Information Publication, U.S. long. 161° 35′ 00″ W, to lat. 59° 00′ 00″ N instrument approach and departure Terminal Procedures—Alaska. The area ° ′ ″ long. 161 35 00 W, to the point of procedures to RWY 26 and RWY 8 at will be depicted on aeronautical charts beginning, excluding the existing Class E Cape Lisburne, AK. This action is for pilot reference. The intended effect airspace. necessary in order for the approach and of this rule is to provide adequate * * * * * departure procedures to be published in controlled airspace for IFR operations at Issued in Anchorage, AK, on January 16, the U.S. Government Flight Information Cape Lisburne, AK. 2001. Publication, U.S. Terminal Procedures— The FAA has determined that this Stephen P. Creamer, Alaska. This rule provides adequate regulation only involves an established Assistant Manager, Air Traffic Division, controlled airspace for aircraft flying body of technical regulations for which Alaskan Region. IFR operations at Cape Lisburne, AK. frequent and routine amendments are [FR Doc. 01–2234 Filed 1–29–01; 8:45 am] Interested parties were invited to necessary to keep them operationally BILLING CODE 4910–13–U participate in this rulemaking current. It, therefore—(1) is not a proceeding by submitting written ‘‘significant regulatory action’’ under comments on the proposal to the FAA. Executive Order 12866; (2) is not a DEPARTMENT OF TRANSPORTATION Public comments to the proposal were ‘‘significant rule’’ under DOT submitted by a commenter representing Regulatory Policies and Procedures (44 Federal Aviation Administration both the Alaska Airmen’s Association FR 11034; February 26, 1979); and (3) and the Alaska Communication Systems does not warrant preparation of a 14 CFR Part 71 (ACS). The commenter had concerns on regulatory evaluation as the anticipated the size and orientation of the proposed [Airspace Docket No. 00–AAL–11] impact is so minimal. Since this is a Class E airspace. The U.S. Air Force, in routine matter that will only affect air Establishment of Class E Airspace; a 28 November 2000 letter to the FAA traffic procedures and air navigation, it Cape Lisburne, AK and commenter, pointed out that the is certified that this rule will not have procedures used by the commenter to a significant economic impact on a AGENCY: Federal Aviation evaluate airspace needs were not substantial number of small entities Administration (FAA), DOT. developed by the U.S. Air Force and under the criteria of the Regulatory ACTION: Final rule. therefore have no validity in correctly Flexibility Act. analyzing the requested airspace. SUMMARY: This action establishes Class Furthermore, the U.S. Air Force List of Subjects in 14 CFR Part 71 E airspace at the Long Range Radar site revalidated the computations for the Airspace, Incorporation by reference, (LRRS) at Cape Lisburne, AK. The requested airspace and ensured that the Navigation (air). United States Air Force requested this U.S. Air Force minimized the amount of action to create controlled airspace for controlled airspace required in Adoption of the Amendment the instrument approach and departure accordance with FAA Order 7130.3. The In consideration of the foregoing, the procedures to runway (RWY) 26 and FAA has considered these comments Federal Aviation Administration RWY 8 at Cape Lisburne, AK. This and determined that the requested amends 14 CFR part 71 as follows: action is necessary in order for the airspace is needed to provide adequate approach and departure procedures to controlled airspace for aircraft flying PART 71—DESIGNATION OF CLASS A, be published in the U.S. Government IFR operations in the vicinity of Cape CLASS B, CLASS C, CLASS D, AND Flight Information Publication, U.S. Lisburne, AK. Thus, the rule is adopted CLASS E AIRSPACE AREAS; Terminal Procedures—Alaska. This rule as written. AIRWAYS; ROUTES; AND REPORTING provides adequate controlled airspace The area will be depicted on POINTS for aircraft flying Instrument Flight aeronautical charts for pilot reference. Rules (IFR) operations at Cape Lisburne, The coordinates for this airspace docket 1. The authority citation for 14 CFR AK. are based on North American Datum 83. part 71 continues to read as follows: EFFECTIVE DATE: 0901 UTC, March 22, The Class E airspace areas designated as Authority: 49 U.S.C. 106(g), 40103, 40113, 2001. 700/1200 foot transition areas are 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– published in paragraph 6005 of FAA 1963 Comp., p. 389. FOR FURTHER INFORMATION CONTACT: Order 7400.9H, Airspace Designations § 71.1 [Amended] Major Roger Stirm, Department of the and Reporting Points, dated September Air Force Representative, Federal 1, 2000, and effective September 16, 2. The incorporation by reference in Aviation Administration, 222 West 7th 2000, which is incorporated by 14 CFR 71.1 of Federal Aviation Avenue, Box 14, Anchorage, AK 99513– reference in 14 CFR 71.1. The Class E Administration Order 7400.9H, 7587; telephone number (907) 271– airspace designations listed in this Airspace Designations and Reporting 5892; fax: (907) 271–2850; email: document will be revised and published Points, dated September 1, 2000, and [email protected]. Internet address: subsequently in the Order. effective September 16, 2000, is http://www.alaska.faa.gov/at or at amended as follows: address http://162.58.28.41/at. The Rule * * * * * SUPPLEMENTARY INFORMATION: This amendment to 14 CFR part 71 Paragraph 6005 Class E airspace extending establishes Class E airspace at Cape History upward from 700 feet or more above the Lisburne, AK, through a request by the surface of the earth. On September 25, 2000, a proposal to U.S. Air Force to create controlled * * * * * amend part 71 of the Federal Aviation airspace for the instrument approach Regulations (14 CFR part 71) to revise and departure procedures to RWY 26 AAL AK E5 Cape Lisburne, AK [New] the Class E airspace at Cape Lisburne, and from RWY 8 at Cape Lisburne, AK. Cape Lisburne LRRS, AK AK, was published in the Federal This action is necessary in order for the (Lat. 68° 52′ 31″ N., long. 166° 06′ 36″ W.) Register (65 FR 57574). The proposal approach and departure procedures to That airspace extending upward from 700 was requested by the U.S. Air Force to be published in the U.S. Government feet above the surface within a 7 mile radius
VerDate 11
of the Cape Lisburne LRRS; and that airspace Regulations (14 CFR part 71) to revise reference in 14 CFR 71.1. The Class E extending upward from 1,200 feet above the the Class E airspace at Cape Romanzof, airspace designations listed in this ° ′ ″ ° ′ surface from lat. 68 49 00 N long. 165 50 AK, was published in the Federal document will be revised and published 00″ W, counterclockwise to lat. 68° 49′ 00″ ° ′ ″ ° ′ ″ Register (65 FR 57571). The proposal subsequently in the Order. N long. 165 30 00 W, to lat. 69 00 00 N was requested by the U.S. Air Force to long. 164° 35′ 00″ W, to lat. 69° 15′ 00″ N The Rule long. 164° 45′ 00″ W, to lat. 69° 15′ 00″ N create controlled airspace for the long. 165° 30′ 00″ W, to lat. 68° 57′ 00″ N instrument approach and departure This amendment to 14 CFR part 71 long. 166° 20′ 00″ W, thence to the point of procedures to RWY 02 and RWY 20 at establishes Class E airspace at Cape beginning, excluding the existing Class E Cape Romanzof, AK. This action is Romanzof, AK, through a request by the airspace. necessary in order for the approach and U.S. Air Force to create controlled * * * * * departure procedures to be published in airspace for the instrument approach the U.S. Government Flight Information and departure procedures to RWY 02 Issued in Anchorage, AK, on January 16, and from RWY 20 at Cape Romanzof, 2001. Publication, U.S. Terminal Procedures— Alaska. This rule provides adequate AK. This action is necessary in order for Stephen P. Creamer, controlled airspace for aircraft flying the approach and departure procedures Assistant Manager, Air Traffic Division, IFR operations at Cape Romanzof, AK. to be published in the U.S. Government Alaskan Region. Interested parties were invited to Flight Information Publication, U.S. [FR Doc. 01–2235 Filed 1–29–01; 8:45 am] participate in this rulemaking Terminal Procedures—Alaska. The area BILLING CODE 4910–13–P proceeding by submitting written will be depicted on aeronautical charts comments on the proposal to the FAA. for pilot reference. The intended effect Public comments to the proposal were of this rule is to provide adequate DEPARTMENT OF TRANSPORTATION submitted by a commenter representing controlled airspace for IFR operations at both the Alaska Airmen’s Association Federal Aviation Administration Cape Romanzof, AK. and the Alaska Communication Systems The FAA has determined that this (ACS). The commenter had concerns on 14 CFR Part 71 regulation only involves an established the size and orientation of the proposed body of technical regulations for which [Airspace Docket No. 00–AAL–13] Class E airspace. The U.S. Air Force, in frequent and routine amendments are a 28 November 2000 letter to the FAA necessary to keep them operationally Establishment of Class E Airspace; and commenter, pointed out that the current. It, therefore —(1) is not a Cape Romanzof, AK procedures used by the commenter to ‘‘significant regulatory action’’ under AGENCY: Federal Aviation evaluate airspace needs were not Executive Order 12866; (2) is not a Administration (FAA), DOT. developed by the U.S. Air Force and ‘‘significant rule’’ under DOT therefore have no validity in correctly ACTION: Final rule. Regulatory Policies and Procedures (44 analyzing the requested airspace. FR 11034; February 26, 1979); and (3) SUMMARY: This action establishes Class Furthermore, the U.S. Air Force does not warrant preparation of a E airspace at the Long Range Radar site revalidated the computations for the regulatory evaluation as the anticipated (LRRS) at Cape Romanzof, AK. The requested airspace and ensured that the impact is so minimal. Since this is a United States Air Force requested this U.S. Air Force minimized the amount of routine matter that will only affect air action to create controlled airspace for controlled airspace required in traffic procedures and air navigation, it the instrument approach and departure accordance with FAA Order 7130.3. The is certified that this rule will not have procedures to runway (RWY) 02 and FAA has considered these comments a significant economic impact on a RWY 20 at Cape Romanzof, AK. This and determined that the requested substantial number of small entities action is necessary in order for the airspace is needed to provide adequate under the criteria of the Regulatory approach and departure procedures to controlled airspace for aircraft flying Flexibility Act. be published in the U.S. Government IFR operations in the vicinity of Cape List of Subjects in 14 CFR Part 71 Flight Information Publication, U.S. Romanzof, AK. The airspace description Terminal Procedures—Alaska. This rule does overlap the existing Hooper Bay Airspace, Incorporation by reference, provides adequate controlled airspace and Yukon-Kuskokwim Class E airspace Navigation (air). and the exclusionary verbiage was for aircraft flying Instrument Flight Adoption of the Amendment Rules (IFR) operations at Cape inadvertently left out. The following Romanzof, AK. verbiage has been added to the end of In consideration of the foregoing, the the airspace description: ‘‘excluding the EFFECTIVE DATE: 0901 UTC, March 22, Federal Aviation Administration existing Class E airspace.’’ The FAA has 2001. amends 14 CFR part 71 as follows: determined that this change is editorial FOR FURTHER INFORMATION CONTACT: in nature and will not increase the PART 71—DESIGNATION OF CLASS A, Major Roger Stirm, Department of the scope of this rule. Except for the non- CLASS B, CLASS C, CLASS D, AND Air Force Representative, Federal substantive change just discussed, the CLASS E AIRSPACE AREAS; Aviation Administration, 222 West 7th rule is adopted as written. AIRWAYS; ROUTES; AND REPORTING Avenue, Box 14, Anchorage, AK 99513– The area will be depicted on POINTS 7587; telephone number (907) 271– aeronautical charts for pilot reference. 5892; fax: (907) 271–2850; email: The coordinates for this airspace docket 1. The authority citation for 14 CFR [email protected]. Internet address: are based on North American Datum 83. part 71 continues to read as follows: http://www.alaska.faa.gov/at or at The Class E airspace areas designated as Authority: 49 U.S.C. 106(g), 40103, 40113, address http://162.58.28.41/at. 700/1200 foot transition areas are 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– SUPPLEMENTARY INFORMATION: published in paragraph 6005 of FAA 1963 Comp., p. 389. Order 7400.9H, Airspace Designations History and Reporting Points, dated September § 71.1 [Amended] On September 25, 2000, a proposal to 1, 2000, and effective September 16, 2. The incorporation by reference in amend part 71 of the Federal Aviation 2000, which is incorporated by 14 CFR 71.1 of Federal Aviation
VerDate 11
Administration Order 7400.9H, FOR FURTHER INFORMATION CONTACT: errors, the correct coordinates are lat. Airspace Designations and Reporting Major Roger Stirm, Department of the 65° 33′ 51″ N., long. 167° 55′ 21″ W. The Points, dated September 1, 2000, and Air Force Representative, Federal FAA has determined that these changes effective September 16, 2000, is Aviation Administration, 222 West 7th are editorial in nature and will not amended as follows: Avenue, Box 14, Anchorage, AK 99513– increase the scope of this rule. Except * * * * * 7587; telephone number (907) 271– for the non-substantive change just 5892; fax: (907) 271–2850; email: discussed, the rule is adopted as Paragraph 6005 Class E airspace extending [email protected]. Internet address: upward from 700 feet or more above the written. http://www.alaska.faa.gov/at or at surface of the earth. The area will be depicted on address http://162.58.28.41/at. * * * * * aeronautical charts for pilot reference. SUPPLEMENTARY INFORMATION: The coordinates for this airspace docket AAL AK E5 Cape Romanzof, AK [New] History are based on North American Datum 83. Cape Romanzof LRRS, AK ° ′ ″ ° ′ ″ The Class E airspace areas designated as (Lat. 61 46 49 N., long. 166 02 19 W.) On September 25, 2000, a proposal to 700/1200 foot transition areas are That airspace extending upward from 700 amend part 71 of the Federal Aviation published in paragraph 6005 of FAA feet above the surface within a 7 mile radius Regulations (14 CFR part 71) to revise of the Cape Romanzof LRRS; and that Order 7400.9H, Airspace Designations the Class E airspace at Tin City, AK, was and Reporting Points, dated September airspace extending upward from 1,200 feet published in the Federal Register (65 above the surface from lat. 61° 54′ 30″ N long. 1, 2000, and effective September 16, FR 57572). The proposal was requested 166° 10′ 00″ W, counterclockwise to lat. 61° 2000, which is incorporated by ′ ″ ° ′ ″ ° ′ by the U.S. Air Force to create 40 00 N long. 167 00 00 W, to lat. 61 30 reference in 14 CFR 71.1. The Class E ″ ° ′ ″ ° ′ ″ controlled airspace for the instrument 00 N long. 167 10 00 W, to lat. 61 20 00 airspace designations listed in this N long. 167° 10′ 00″ W, to lat. 61° 20′ 00″ N approach and departure procedures to document will be revised and published long. 166° 30′ 00″ W, to lat. 61° 40′ 00″ N RWY 16 and RWY 34 at Tin City, AK. long. 165° 49′ 00″ W, thence to the point of This action is necessary in order for the subsequently in the Order. beginning, excluding the existing Class E approach and departure procedures to The Rule airspace. be published in the U.S. Government * * * * * Flight Information Publication, U.S. This amendment to 14 CFR part 71 Issued in Anchorage, AK, on January 16, Terminal Procedures—Alaska. This rule establishes Class E airspace at Tin City, 2001. provides adequate controlled airspace AK, through a request by the U.S. Air Stephen P. Creamer, for aircraft flying IFR operations at Tin Force to create controlled airspace for Assistant Manager, Air Traffic Division, City, AK. the instrument approach and departure Alaskan Region. Interested parties were invited to procedures to RWY 16 and from RWY [FR Doc. 01–2236 Filed 1–29–01; 8:45 am] participate in this rulemaking 34 at Tin City, AK. This action is BILLING CODE 4910–13–P proceeding by submitting written necessary in order for the approach and comments on the proposal to the FAA. departure procedures to be published in Public comments to the proposal were the U.S. Government Flight Information DEPARTMENT OF TRANSPORTATION submitted by a commenter representing Publication, U.S. Terminal Procedures— both the Alaska Airmen’s Association Alaska. The area will be depicted on Federal Aviation Administration and the Alaska Communication Systems aeronautical charts for pilot reference. (ACS). The commenter had concerns on The intended effect of this rule is to 14 CFR Part 71 the size and orientation of the proposed provide adequate controlled airspace for Class E airspace. The U.S. Air Force, in [Airspace Docket No. 00–AAL–14] IFR operations at Tin City, AK. a 28 November 2000 letter to the FAA The FAA has determined that this and commenter, pointed out that the Establishment of Class E Airspace; Tin regulation only involves an established procedures used by the commenter to City, AK body of technical regulations for which evaluate airspace needs were not frequent and routine amendments are AGENCY: Federal Aviation developed by the U.S. Air Force and necessary to keep them operationally Administration (FAA), DOT. therefore have no validity in correctly current. It, therefore—(1) is not a ACTION: Final rule. analyzing the requested airspace. ‘‘significant regulatory action’’ under Furthermore, the U.S. Air Force SUMMARY: This action establishes Class revalidated the computations for the Executive Order 12866; (2) is not a E airspace at the Long Range Radar site requested airspace and ensured that the ‘‘significant rule’’ under DOT (LRRS) at Tin City, AK. The United U.S. Air Force minimized the amount of Regulatory Policies and Procedures (44 States Air Force requested this action to controlled airspace required in FR 11034; February 26, 1979); and (3) create controlled airspace for the accordance with FAA Order 7130.3. The does not warrant preparation of a instrument approach and departure FAA has considered these comments regulatory evaluation as the anticipated procedures to runway (RWY) 16 and and determined that the requested impact is so minimal. Since this is a RWY 34 at Tin City, AK. This action is airspace is needed to provide adequate routine matter that will only affect air necessary in order for the approach and controlled airspace for aircraft flying traffic procedures and air navigation, it departure procedures to be published in IFR operations in the vicinity of Tin is certified that this rule will not have the U.S. Government Flight Information City, AK. The airspace description does a significant economic impact on a Publication, U.S. Terminal Procedures— overlap the existing Class E airspace and substantial number of small entities Alaska. This rule provides adequate the exclusionary verbiage was under the criteria of the Regulatory controlled airspace for aircraft flying inadvertently left out. The following Flexibility Act. Instrument Flight Rules (IFR) operations verbiage has been added to the end of List of Subjects in 14 CFR Part 71 at Tin City, AK. the airspace description: ‘‘excluding the EFFECTIVE DATE: 0901 UTC, March 22, existing Class E airspace.’’ The Tin City Airspace, Incorporation by reference, 2001. LRRS coordinates were published with Navigation (air).
VerDate 11
Adoption of the Amendment DEPARTMENT OF HOUSING AND For the Rent Supplement Program, URBAN DEVELOPMENT contact, Willie Spearmon, Office of In consideration of the foregoing, the Housing, Department of Housing and Federal Aviation Administration 24 CFR Parts 5, 92, 200 236, 574, 582, Urban Development, 451 Seventh Street, amends 14 CFR part 71 as follows: 583, 891, 982 SW., Washington, DC 20410; telephone [Docket No. FR–4608–F–03] (202) 708–3000. PART 71—DESIGNATION OF CLASS A, For the Rental Assistance Payment CLASS B, CLASS C, CLASS D, AND RIN 2501–AC72 (RAP) Program, contact Willie CLASS E AIRSPACE AREAS; Spearmon, Office of Housing, Determining Adjusted Income in HUD AIRWAYS; ROUTES; AND REPORTING Department of Housing and Urban Programs Serving Persons With POINTS Development, 451 Seventh Street, SW., Disabilities: Requiring Mandatory Washington, DC 20410; telephone (202) Deductions for Certain Expenses; and 1. The authority citation for 14 CFR 708–3000. Disallowance for Earned Income; Delay part 71 continues to read as follows: For the Section 202 Supportive of Effective Date Authority: 49 U.S.C. 106(g), 40103, 40113, Housing Program for the Elderly 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– AGENCY: Office of the Secretary, HUD. (including Section 202 Direct Loans for 1963 Comp., p. 389. ACTION: Final rule; delay of effective Housing for the Elderly and Persons date. with Disabilities), contact Aretha § 71.1 [Amended] Williams, Office of Housing, SUMMARY: This document advises the Department of Housing and Urban 2. The incorporation by reference in public that the final rule published on Development, 451 Seventh Street, SW., 14 CFR 71.1 of Federal Aviation January 19, 2001, which amends HUD’s Washington, DC 20410, telephone (202) Administration Order 7400.9H, regulations in part 5, subpart F, to 708–2866. Airspace Designations and Reporting include additional HUD programs in the For Section 8 Project-Based, contact Points, dated September 1, 2000, and list of programs that must make certain Willie Spearmon, Office of Housing, effective September 16, 2000, is deductions in calculating a family’s Department of Housing and Urban amended as follows: adjusted income, will take effect on Development, 451 Seventh Street, SW., April 20, 2001. As provided in the Washington, DC 20410; telephone (202) Paragraph 6005 Class E airspace extending ‘‘Supplementary Information’’ section of upward from 700 feet or more above the 708–3000. surface of the earth. this final rule, this delay in the effective For the Section 811 Supportive date is made in response to a White Housing Program for Persons with AAL AK E5 Tin City, AK [New] House memorandum of January 20, Disabilities, contact Gail Williamson, Tin City LRRS, AK 2001. Given the imminence of the Office of Housing, Department of (Lat. 65° 33′ 51″ N., long. 167° 55′ 21″ W.) effective date of this rule, seeking prior Housing and Urban Development, 451 That airspace extending upward from 700 public comment in accordance with Seventh Street, SW., Washington, DC feet above the surface within a 7 mile radius HUD’s regulations on rulemaking would 20410, telephone (202) 708–2866. of the Tin City LRRS; and that airspace have been impractical, as well as For the Shelter Plus Care Program, extending upward from 1,200 feet above the contrary to the public interest in the contact the State Assistance Division, surface from lat. 65° 30′ 00″ N long. 168° 10′ orderly promulgation and Office of Community Planning and 00″ W, counterclockwise to lat. 65° 15′ 00″ implementation of regulations. Development, Department of Housing N long. 168° 30′ 00″ W, to lat. 65° 04′ 00″ N DATES: The effective date of the final and Urban Development, 451 Seventh long. 168° 00′ 00″ W, to lat. 65° 04′ 00″ N rule amending 24 CFR parts 5, 92, 200, Street, SW., Washington, DC, 20410, long. 167° 20′ 00″ W, to lat. 65° 30′ 00″ N 236, 574, 582, 583, 891, and 982, telephone (202) 708–2140. long. 167° 20′ 00″ W, to lat. 65° 38′ 00″ N published at 66 FR 6218 (January 19, For the Supportive Housing Program long. 167° 30′ 00″ W, to lat. 65° 38′ 00″ N 2001) is delayed from February 20, 2001 (McKinney-Vento Act Homeless long. 167° 42′ 00″ W, thence to the point of until April 20, 2001. Assistance), contact Clifford Taffet, beginning, excluding the existing Class E FOR FURTHER INFORMATION CONTACT: For Office of Community Planning and airspace. the HOME Investment Partnerships Development, Department of Housing Issued in Anchorage, AK, on January 16, Program, contact Mary Kolesar, Office of and Urban Development, 451 Seventh 2001. Community Planning and Development, Street, SW., Washington, DC, 20410, telephone (202) 708–1234. Stephen P. Creamer, Department of Housing and Urban Development, 451 Seventh Street, SW., For all of the above telephone Assistant Manager, Air Traffic Division, numbers, persons with hearing or Alaskan Region. Washington, DC, 20410, telephone (202) 708–2470. speech-impairments may call 1–800– [FR Doc. 01–2237 Filed 1–29–01; 8:45 am] For the Housing Choice Voucher 877–8339 (Federal Information Relay BILLING CODE 4910–13–U Program, contact Patricia Arnaudo, Service TTY). (Other than the ‘‘800’’ Office of Public and Indian Housing, number, the telephone numbers are not Department of Housing and Urban toll-free numbers.) Development, 451 Seventh Street, SW., SUPPLEMENTARY INFORMATION: On Washington, DC, 20410, telephone (202) January 19, 2001 (66 FR 6218), HUD 708–0744. published a final rule amending its For the Housing Opportunities for regulations in part 5, subpart F, to Persons with AIDS Program, contact include additional HUD programs in the David Vos, Office of Community list of programs that must make certain Planning and Development, Department deductions in calculating a family’s of Housing and Urban Development, adjusted income. These deductions 451 Seventh Street, SW., Washington, primarily address expenses related to a DC, 20410, telephone (202) 708–1934. person’s disability, for example medical
VerDate 11
expenses or attendant care expenses. SUPPLEMENTARY INFORMATION section of Doc. 01–1397) will take effect on April The purpose of the January 19, 2001 this final rule, this delay in the effective 23, 2001. final rule is to expand the benefits of date is made in response to a White Dated: January 24, 2001. these deductions to persons with House memorandum of January 20, Mel Martinez, disabilities served by HUD programs not 2001. Given the imminence of the Secretary. currently covered by part 5, subpart F. effective date of this rule, seeking prior Second, the final rule adds a new public comment in accordance with [FR Doc. 01–2564 Filed 1–29–01; 8:45 am] regulatory section to part 5 to require for HUD’s regulations on rulemaking would BILLING CODE 4210–32–P some but not all of these same programs have been impractical, as well as the disallowance of increases in income contrary to the public interest in the DEPARTMENT OF HOUSING AND as a result of earnings by persons with orderly promulgation and URBAN DEVELOPMENT disabilities. The January 19, 2001 final implementation of regulations. rule follows publication of a August 21, DATES: The effective date of the final 24 CFR Part 221 2000 proposed rule, and takes into rule amending 24 CFR part 15 published [Docket No. FR–4588–F–03] consideration public comments received at 66 FR 6964 (January 22, 2001) is on the rule. delayed from February 21, 2001 until RIN 2502–AH50 The January 19, 2001 final rule April 23, 2001. provides for the rule to take effect on Discontinuation of the Section February 20, 2001. On January 20, 2001, FOR FURTHER INFORMATION CONTACT: 221(d)(2) Mortgage Insurance Program; the White House issued a memorandum Marylea Byrd, Assistant General Delay of Effective Date to the heads and acting heads of all Counsel, FOIA Division, Office of the Executive Departments and Agencies General Counsel, Department of AGENCY: Office of the Secretary, HUD. regarding regulatory review. The Housing and Urban Development, 451 ACTION: Final rule; delay of effective January 20, 2001 memorandum instructs Seventh Street, SW, Washington, DC date. the agencies to temporarily postpone the 20410–0500, Room 10248; Telephone effective dates of their regulations that (202) 708–3866 (this is not a toll-free SUMMARY: This document advises the have been published in the Federal number.) Hearing- or speech-impaired public that the final rule published on Register but have not yet taken effect by individuals may access this number via January 19, 2001, which discontinues 60 days. Consistent with the directive of TTY by calling the toll-free Federal the section 221(d)(2) mortgage insurance the January 20, 2001 White House Information Relay Service at 1–800– program, will take effect on April 20, memorandum, the purpose of this 877–8339. 2001. As provided in the document is to give notice that the SUPPLEMENTARY INFORMATION: On ‘‘Supplementary Information’’ section of effective date of the January 19, 2001 January 22, 2001 (66 FR 6964), HUD this final rule, this delay in the effective final rule has been changed to April 20, published a final rule amending HUD’s date is made in response to a White 2001. Freedom of Information Act (FOIA) House memorandum of January 20, Accordingly, HUD’s final rule regulations in their entirety. The rule 2001. Given the imminence of the published on January 19, 2001 at 66 FR implements the amendments made by effective date of this rule, seeking prior 6218 (Docket No. FR–4608–F–02, FR the Electronic Freedom of Information public comment in accordance with Doc. 01–1536) will take effect on April Act to FOIA. The final rule also makes HUD’s regulations on rulemaking would 20, 2001. various streamlining and organizational have been impractical, as well as contrary to the public interest in the Dated: January 24, 2001. changes to improve the clarity of the regulations. The final rule follows orderly promulgation and Mel Martinez, implementation of regulations. Secretary. publication of a July 10, 2000 proposed rule, and takes into consideration the DATES: The effective date of the final [FR Doc. 01–2563 Filed 1–29–01; 8:45 am] public comments received on the rule amending 24 CFR part 221 BILLING CODE 4210–32–P proposed rule. published at 66 FR 5912 (January 19, The January 22, 2001 final rule 2001) is delayed from February 20, 2001, until April 20, 2001. DEPARTMENT OF HOUSING AND provides for the rule to take effect on URBAN DEVELOPMENT February 21, 2001. On January 20, 2001, FOR FURTHER INFORMATION CONTACT: the White House issued a memorandum Vance T. Morris, Director, Office of 24 CFR Part 15 to the heads and acting heads of all Single Family Program Development, Executive Departments and Agencies Office of Insured Single Family [Docket No. FR–4292–F–03] regarding regulatory review. The Housing, Room 9266, U.S. Department RIN 2501–AC51 January 20, 2001 memorandum instructs of Housing and Urban Development, the agencies to temporarily postpone the 451 Seventh Street, SW., Washington, Revision of Freedom of Information effective dates of their regulations that DC 20410–8000; telephone (202) 708– Act Regulations; Delay of Effective have been published in the Federal 2121 (this is not a toll-free number). Date Register but have not yet taken effect by Hearing- or speech-impaired individuals AGENCY: Office of the Secretary, HUD. 60 days. Consistent with the directive of may access this number via TTY by the January 20, 2001 White House calling the toll-free Federal Information ACTION: Final rule; delay of effective memorandum, the purpose of this Relay Service at (800) 877–8339. date. document is to give notice that the SUPPLEMENTARY INFORMATION: On SUMMARY: This document advises the effective date of the January 22, 2001 January 19, 2001 (66 FR 5912), HUD public that the final rule published on FOIA amendments final rule has been published a final rule to discontinue the January 22, 2001, which amends HUD’s changed to April 23, 2001. section 221(d)(2) mortgage insurance Freedom of Information Act (FOIA) Accordingly, HUD’s final rule program. The January 19, 2001 final rule regulations, will take effect on April 23, published on January 22, 2001 at 66 FR follows publication of a September 28, 2001. As provided in the 6964 (Docket No. FR–4292–F–02, FR 2000 proposed rule. Since no public
VerDate 11
comments were received on the ‘‘ICDBG program’’), will take effect on regarding regulatory review. The proposed rule, the January 19, 2001 April 16, 2001. The amendments made January 20, 2001 memorandum instructs final rule adopts the proposed by the final rule will permit the the agencies to temporarily postpone the regulatory amendments without change. incorporation of the ICDBG grant effective dates of their regulations that The section 221(d)(2) program is application and selection procedures have been published in the Federal rarely used by homebuyers, primarily into HUD’s SuperNOFA process. As Register but have not yet taken effect by due to its low mortgage limits. provided in the ‘‘Supplementary 60 days. Consistent with the directive of Moreover, the section 221(d)(2) program Information’’ section of this final rule, the January 20, 2001 White House provides few homeownership this delay in the effective date is made memorandum, the purpose of this opportunities not already made in response to a White House document is to give notice that the available by other HUD mortgage memorandum of January 20, 2001. effective date of the January 17, 2001 insurance programs. For these reasons, Given the imminence of the effective final rule has been changed to April 16, HUD decided to discontinue the section date of this rule, seeking prior public 2001. 221(d)(2) program and issued the comment in accordance with HUD’s Accordingly, HUD’s final rule January 19, 2001 final rule. regulations on rulemaking would have published on January 17, 2001 at 66 FR The January 19, 2001 final rule been impractical, as well as contrary to 4578 (Docket No. FR–4612–F–02, FR provides for the rule to take effect on the public interest in the orderly Doc. 01–1206) will take effect on April February 20, 2001. On January 20, 2001, promulgation and implementation of 16, 2001. the White House issued a memorandum regulations. Dated: January 24, 2001. to the heads and acting heads of all DATES: The effective date of the final Mel Martinez, Executive Departments and Agencies rule amending 24 CFR part 1003 regarding regulatory review. The Secretary. published at 66 FR 4578 (January 17, [FR Doc. 01–2561 Filed 1–29–01; 8:45 am] January 20, 2001 memorandum instructs 2001) is delayed from February 16, 2001 the agencies to temporarily postpone the until April 16, 2001. BILLING CODE 4210–32–P effective dates of their regulations that FOR FURTHER INFORMATION CONTACT: have been published in the Federal Jacqueline Kruszek, Office of Grants FEDERAL COMMUNICATIONS Register but have not yet taken effect by Management, Office of Native American COMMISSION 60 days. Consistent with the directive of Programs, Department of Housing and the January 20, 2001 White House Urban Development, Suite 3390, 1999 47 CFR Part 73 memorandum, the purpose of this Broadway, Denver, CO 80202; telephone document is to give notice that the 1–800–561–5913 (this is a toll-free [MM Docket Nos. 96–222, 91–221 & 87–8; effective date of the January 19, 2001 number). Hearing or speech-impaired FCC 00–406] final rule has been changed to April 20, persons may access this telephone Reconsideration of National Television 2001. number via TTY by calling the Federal Ownership Accordingly, HUD’s final rule Information Relay Service at 1–800– published on January 19, 2001 at 66 FR 877–8339. Ms. Kruszek may also be AGENCY: Federal Communications 5912 (Docket No. FR–4588–F–02, FR contacted via e-mail at: Commission. Doc. 01–1534) will take effect on April [email protected]. ACTION: Final rule; denial. 20, 2001. SUPPLEMENTARY INFORMATION: On SUMMARY: This document denies a Dated: January 24, 2001. January 17, 2001 (66 FR 4578), HUD petition seeking reconsideration in part Mel Martinez, published a final rule to amend its Secretary. regulations for Community of the Report and Order released in this proceeding on August 6, 1999. It [FR Doc. 01–2562 Filed 1–29–01; 8:45 am] Development Block Grants for Indian reaffirms the Commission’s decision to BILLING CODE 4210–32–P Tribes and Alaska Native Villages (the ‘‘ICDBG program’’). The final rule count a market only once when follows publication of a November 6, calculating an entity’s national DEPARTMENT OF HOUSING AND 2000 proposed rule, and takes into ownership reach. URBAN DEVELOPMENT consideration the public comments FOR FURTHER INFORMATION CONTACT: Jane received on the proposed rule. The Gross; Policy and Rules Division, Mass 24 CFR Part 1003 principal reason for the changes is to Media Bureau, at (202) 418–2130, TTY (202) 418–2989. [Docket No. FR–4612–F–03] allow the integration of the ICDBG program application process into HUD’s SUPPLEMENTARY INFORMATION: This is a RIN 2577–AC22 Super Notice of Funding Availability summary of the Memorandum Opinion (SuperNOFA) approach. The and Order (‘‘MO&O’’), in MM Docket Revision to the Application Process for SuperNOFA process, in which the great Nos. 96–222, 91–221 & 87–8; FCC 00– Community Development Block Grants majority of HUD’s competitive funds are 406. Adopted November 13, 2000, and for Indian Tribes and Alaska Native announced in one document, is released January 19, 2001. The full text Villages; Delay of Effective Date designed to simplify the application of this MO&O is available for inspection AGENCY: Office of the Secretary, HUD. process, bring consistency and and copying during regular business ACTION: Final rule; delay of effective uniformity to the application and hours in the FCC Reference Center, 445 date. selection process, and accelerate the Twelfth Street, SW, Room CY–A257, availability of funding. Washington DC, and also may be SUMMARY: This document advises the The January 17, 2001 final rule purchased from the Commission’s copy public that the final rule published on provides for the rule to take effect on contractor, International Transcription January 17, 2001, which amends HUD’s February 16, 2001. On January 20, 2001, Service, (202) 857–3800, 445 Twelfth regulations for Community the White House issued a memorandum Street, SW, Room CY–B402, Washington Development Block Grants for Indian to the heads and acting heads of all DC. The complete text is also available Tribes and Alaska Native Villages (the Executive Departments and Agencies under the file name fcc00406.pdf on the
VerDate 11
Commission’s Internet site at use of Arbitron’s Areas of Dominant owned by virtue of the local television www.fcc.gov. Influence (ADIs) to define geographic ownership rule (i.e., a duopoly), that television markets with the use of market’s audience reach will be counted Paperwork Reduction Act Nielsen’s Designated Market Areas only once when calculating the group This document contains no new or (DMAs). Consequently, owners of owner’s national aggregate audience modified information collection television stations that have an reach. We explained that, regardless of requirements. attributable interest in another TV a station’s actual viewership, a licensee Synopsis of Memorandum Opinion and station in the same market, or that is attributed with all of the viewership Order operate a satellite station in the same in the entire DMA. Therefore, increasing market, do not have to double count actual viewership by adding a second 1. In this MO&O, we deny a petition those markets in calculating their station does not affect the audience seeking reconsideration in part of the national aggregate television audience reach calculation, as that calculation Report and Order (‘‘R&O’’), 64 FR reach. However, a station owner with an already includes all the viewers in that 50647, September 17, 1999. In the R&O, attributable interest in a station in a DMA. we modified the national television separate market (including satellite ownership rule to clarify how to 5. UCC et al. have not raised any stations and LMAs) would have to count calculate a broadcast television station arguments that persuade us to revisit that additional audience as part of its group owner’s aggregate national this decision. Indeed, many of UCC et national aggregate audience. audience reach for purposes of al.’s criticisms appear to be directed not determining compliance with the 35% 3. The Office of Communication, Inc. at the national cap itself, but at limiting limit on such reach. The national of United Church of Christ et al. (UCC consolidation in local markets. The ownership cap itself was at issue in the et al.) seek reconsideration of the issue of how much consolidation should 1998 Biennial Review of Broadcast Commission’s decision to count a be permitted in local markets is Ownership Rules. In our recently market only once when calculating an addressed in our local ownership released Report in that proceeding we entity’s national ownership reach. UCC proceeding. et al. argue that the Commission should decided to retain the current 35% limit Ordering Clauses on a broadcast television station group instead attribute between 50% and owner’s aggregate national audience 100% of the DMA households to an 6. Pursuant to the authority contained reach. entity’s second station in a market for in sections 4(i), 303(r),and 405 of the 2. In the R&O, we concluded that the purposes of calculating the national Communications Act of 1934, as public interest would be served by audience reach. Although they argue amended, and section 1.429(i) of the counting a market only once when this specifically in the context of TV Commission’s rules, 47 CFR 1.429(i), it calculating an entity’s national duopolies, they also contend that is ordered that the Petition for ownership reach, even if that entity has intramarket satellites and LMAs should Reconsideration in this proceeding is an attributable interest in more than one be attributed similarly. denied. television station in that market. 4. We reaffirm our decision to count 7. This proceeding is hereby Specifically, we narrowed the general a market only once when calculating an terminated. ‘‘satellite exemption’’ to our ownership entity’s national ownership reach. We rules to exempt from the national discussed this decision in detail in the List of Subjects in 47 CFR Part 73 ownership rule only satellite television context of satellites and LMAs, and also Television broadcasting. stations in the same market as their noted that the concept is equally parents; decided not to incorporate applicable to any situation in which an Federal Communications Commission. same-market local marketing agreements entity has an attributable interest in Magalie Roman Salas, (LMAs) into the calculation of the more than one TV station in a television Secretary. brokering station’s national audience market. We stated that when two [FR Doc. 01–2542 Filed 1–29–01; 8:45 am] reach; and replaced the Commission’s stations in a market are commonly BILLING CODE 6712–01–P
VerDate 11
Proposed Rules Federal Register Vol. 66, No. 20
Tuesday, January 30, 2001
This section of the FEDERAL REGISTER Done in Washington, DC, on January 25, personal property leasing arrangements. contains notices to the public of the proposed 2001. The purpose of these changes is to issuance of rules and regulations. The Thomas J. Billy, update and revise the OCC’s regulations purpose of these notices is to give interested Administrator. to keep pace with developments in the persons an opportunity to participate in the law and in the national banking system. rule making prior to the adoption of the final [FR Doc. 01–2652 Filed 1–26–01; 2:34 pm] rules. BILLING CODE 3410–DM–P DATES: Comments must be received by April 2, 2001. ADDRESSES: Direct your comments to: DEPARTMENT OF AGRICULTURE DEPARTMENT OF THE TREASURY Public Information Room, Office of the Comptroller of the Currency, 250 E Food Safety and Inspection Service Office of the Comptroller of the Street, SW, Mailstop 1–5, Washington, Currency DC 20219, Attention: Docket No. 01–01. 9 CFR Part 381 Comments will be available for public 12 CFR Parts 1, 7, and 23 inspection and photocopying at the [Docket No. 98–062E] [Docket No. 01–01] same location. In addition, you may send comments by fax to (202) 874– Performance Standards for On-line RIN 1557–AB94 4448, or by electronic mail to Antimicrobial Reprocessing of Pre- [email protected]. chill Poultry Carcasses Investment Securities; Bank Activities and Operations; Leasing FOR FURTHER INFORMATION CONTACT: For AGENCY: Food Safety and Inspection questions concerning proposed 12 CFR AGENCY: Office of the Comptroller of the Service, USDA. 1.2, contact Beth Kirby, Senior Attorney, Currency, Treasury. Securities and Corporate Practices ACTION: Extension of comment period. ACTION: Notice of proposed rulemaking. Division, (202) 874–5210, or Mark SUMMARY: The Food Safety and SUMMARY: The Office of the Comptroller Tenhundfeld, Assistant Director, Inspection Service (FSIS) is extending of the Currency (OCC) is proposing to Legislative and Regulatory Activities the comment period for the proposed amend its rules governing investment Division, (202) 874–5090. For questions rulemaking, Performance Standards for securities, bank activities and concerning proposed 12 CFR 7.3000, On-line Antimicrobial Reprocessing of operations, and leasing. The proposed contact Stuart Feldstein, Assistant Pre-chill Poultry Carcasses, which was revisions to the investment securities Director, or Andra Shuster, Senior scheduled to close on January 30, 2001. regulations incorporate the authority to Attorney, Legislative and Regulatory At the request of the National Chicken underwrite, deal in, and purchase Activities Division, (202) 874–5090. For Council and the National Turkey certain municipal bonds that is questions concerning proposed 12 CFR Federation, FSIS is granting a 60-day provided to well capitalized national 7.1021, 7.4001, 7.4002 and 7.4006, extension to permit the associations to banks by the Gramm-Leach-Bliley Act contact Mark Tenhundfeld, Assistant collect additional data. Because the (GLBA). The proposed revisions to the Director, or Andra Shuster, Senior comment period included the holiday bank activities and operations Attorney, Legislative and Regulatory season, the requestors asked for regulations: Establish the conditions Activities Division, (202) 874–5090. For additional time to accommodate loss of under which a school where a national questions concerning 12 CFR 23.21, time and personnel during the holidays. bank participates in a financial literacy contact Steven Key, Attorney, Bank The proposed rule was published on program is not considered a branch Activities and Structure Division, (202) December 1, 2000 (65 FR 75187) and under the McFadden Act; revise the 874–5300. requested comments on the proposed OCC’s regulation governing bank SUPPLEMENTARY INFORMATION: performance standards for poultry holidays to conform it with the wording Background products reprocessed on-line and other of the statute that authorizes the information and data. Comptroller to proclaim mandatory The OCC proposes to revise 12 CFR bank closings; clarify the scope of the parts 1, 7, and 23 in order to address DATES: Comments must be received on changing industry practices and recent or before April 2, 2001. term ‘‘NSF fees’’ for purposes of 12 U.S.C. 85, the statute that governs the statutory amendments. This proposal ADDRESSES: Send one original and two rate of interest that national banks may reflects the OCC’s continuing copies of written comments to FSIS charge; simplify the OCC’s current commitment to assess the effectiveness Docket No. 98–062P, Department of regulation governing national banks’ of our rules and to make changes where Agriculture, Food Safety and Inspection non-interest charges and fees; and necessary to improve our regulations. Service, Room 102, 300 12th Street, provide that state law applies to a Section-by-Section Description of the SW., Washington, DC 20250–3700. national bank operating subsidiary to Proposal FOR FURTHER INFORMATION CONTACT: the same extent as it applies to the Daniel L. Engeljohn, Ph.D., Director, parent national bank. The proposed A. Part 1—Investment Securities Regulations Development and Analysis revisions to the leasing regulations Pursuant to 12 U.S.C. 24(Seventh), the Division, Office of Policy, Program authorize the OCC to vary the total amount of investment securities of Development, and Evaluation by percentage limit on the extent to which any one obligor held by a national bank telephone at (202) 720–5627 or by fax a national bank may rely on estimated for its own account generally may not (202) 690–0486. residual value to recover its costs in exceed 10 per cent of the bank’s capital
VerDate 11
and surplus. Section 24(Seventh), securities, newly designated as § 1.2(k), these conditions, the bank must not however, exempts certain types of to make it clear that obligations issued ‘‘establish and operate’’ the school securities from this limitation and by a State or political subdivision or premises or facility. This requirement permits a bank to underwrite, deal in, agency of a State, for housing, derives from the text of the statute, and purchase them without quantitative university, or dormitory purposes are which describes the circumstances restriction. Section 151 of the Gramm- Type II securities only when they do not under which a national bank may Leach-Bliley Act (GLBA) 1 amended qualify as Type I securities (for example, ‘‘establish and operate’’ new branches § 24(Seventh) to exempt certain when the subject bank is not well and defines the term ‘‘branch,’’ 6 and municipal bonds from the 10 per cent capitalized under prompt corrective from Federal judicial precedents limit if the national bank is well action standards). The proposal also determining when an off-premises capitalized under the statutory prompt modifies the paragraph that defines location is a branch under these corrective action standards.2 We Type III securities, newly redesignated standards. Under those precedents, the propose to amend part 1 of our as § 1.2(l), and uses municipal bonds as court first determines whether the regulations, which implements the an example of that type, to make clear national bank has ‘‘establish[ed] and statutory investment securities that municipal bonds are Type III operate[d]’’ the off-premises location in provisions, to reflect this change in the securities only when they do not qualify question. If so, the court goes on to statute. as Type I securities. Regardless of the determine whether the off-premises The proposal adds new § 1.2(g), treatment of municipal bonds as Type I location is covered by the definition of which defines the municipal bonds or Type III securities, a national bank the term ‘‘branch’’ that the statute described in § 151 of GLBA. Thus, the must understand the fiscal condition of provides because it accepts deposits, term ‘‘municipal bonds’’ means any municipality in whose bonds the pays checks, or lends money at that obligations of a State or political bank invests. location.7 subdivision other than general In construing the phrase ‘‘establish obligations, and includes limited B. Part 7—Bank Activities and and operate,’’ the courts have looked at obligation bonds, revenue bonds, and Operations obligations that satisfy the requirements The proposal makes five changes to throughout that section (see, e.g., paragraphs (b)(1), of section 142(b)(1) of the Internal part 7. First, it adds new § 7.1021, (b)(2), (c), (g), and (i) of section 36). It would be illogical to conclude that the OCC, in implementing Revenue Code of 1986 issued by or on which defines the circumstances under the provisions requiring national banks to obtain behalf of any State or political which a school where a bank the OCC’s prior approval under the sections cited, subdivision of a State, including any participates in a financial literacy cannot interpret what the terms of the statute mean municipal corporate instrumentality of program is not considered a branch of or that the interpretation must be made on a case- by-case basis. This rulemaking simply clarifies a 1 or more States, or any public agency the bank under the McFadden Act. situation that falls outside the branching or authority of any State or political Second, the proposal amends § 7.3000 restrictions imposed by section 36. subdivision of a State. to conform it with the Comptroller’s 6 12 U.S.C. 36(c) (describing the circumstances Part 1 classifies permissible national statutory authority to declare mandatory under which a national bank may ‘‘establish and bank investment securities into several bank closings, as provided in 12 U.S.C. operate’’ new branches); 12 U.S.C. 36(j) (defining 3 the term ‘‘branch’’ to include ‘‘any branch bank, categories, or types. Type I securities 95(b)(1). Third, the proposed rule branch office, branch agency, additional office, or are securities—such as obligations revises current § 7.4001 to clarify the any branch place of business located in any State issued by, or backed by the full faith scope of the term ‘‘NSF fees’’ for or Territory of the United States or in the District and credit of, the United States—that a purposes of 12 U.S.C. 85. Fourth, the of Columbia at which deposits are received, or national bank may purchase, sell, deal checks paid, or money lent.’’). proposal revises current § 7.4002, which 7 In First National Bank in Plant City v. in, and underwrite without regard to governs non-interest charges and fees, to Dickinson, 396 U.S. 122, 126–29, 134–37 (1969), the any capital and surplus limitation. The remove language that may be confusing. Supreme Court used a two-stage analysis to reach proposal amends the list of Type I Finally, the proposal adds new § 7.4006, the conclusion that an armored car service was a securities that a national bank may branch within the meaning of the McFadden Act. which provides that state laws apply to The Court looked first at whether the off-premises underwrite, deal in, and purchase a national bank operating subsidiary to facility was ‘‘established and operated’’ by the without quantitative limit, which the same extent that they apply to the national bank. It then looked at whether the bank appears in redesignated § 1.2(j) of the parent national bank. was using the off-premises facility to take deposits regulation, to add the municipal bonds within the meaning of the McFadden Act’s as defined in new § 1.2(g), subject to the Bank Participation in Financial Literacy definition of a ‘‘branch.’’ Subsequent lower Federal Programs (New § 7.1021) court decisions using the same two-stage analysis requirement that the bank be well employed by the Supreme Court in Plant City have capitalized. The regulation refers to the Proposed new § 7.1021(b) provides concluded that certain off-premises locations are definition of well capitalized that the that a school premises or facility where not branches under the McFadden Act. For OCC uses for purposes of compliance example, in Cades v. H & R Block, Inc., 43 F.3d 869, a national bank participates in a 874 (4th Cir. 1994), the U.S. Court of Appeals for with the prompt corrective action financial literacy program is not a the Fourth Circuit articulated the Supreme Court’s standards.4 branch of the national bank under the two-stage analysis as a two-part test and used that In addition, the proposal modifies the McFadden Act if the conditions set out test to determine that an office of the tax section that defines certain Type II 5 preparation firm H & R Block was not a branch. The in the rule are satisfied. Pursuant to court looked at key indicators of the bank’s relationship with Block to determine whether the 1 Pub. L. 106–102, § 151, 113 Stat. 1338, 1384 5 This proposal is consistent with the limitation, Block offices were established and operated by the (November 12, 1999). found in 12 U.S.C. 93a, which states that the bank. These indicators included the facts that the 2 12 U.S.C. 1831o. general rulemaking authority vested in the OCC by bank had no ownership or leasehold interest in the 3 See, e.g., 12 CFR 1.2(i) and 1.3(a) defining Type that section ‘‘does not apply to section 36 of [Title Block offices; no bank employees worked there; and I securities and providing that Type I securities are 12 of the United States Code].’’ This limitation the bank exercised no authority or control over not subject to the 10 per cent capital and surplus simply makes clear that section 93a does not Block’s employees or methods of operation. The limit); 12 CFR §§ 1.2(j) and 1.3 (defining Type II expand whatever authority the OCC has pursuant court held that, under these circumstances, the securities and describing the quantitative limit); to other statutes to adopt regulations affecting bank did not ‘‘establish or operate’’ the Block and 12 CFR §§ 1.2(k) and 1.3(c) (defining Type III national bank branching. Congress clearly offices, that there was no need to go on to consider securities and describing the quantitative limit). contemplated that the OCC would implement whether bank business—such as taking deposits— 4 See 12 CFR 6.4(b)(1) (defining the term ‘‘well section 36, as is evidenced by the repeated was transacted at Block offices, and that, capitalized’’). references to obtaining the OCC’s approval accordingly, the Block offices were not branches.
VerDate 11
the nature of the bank’s interest in the legally authorized State official declares obligation due to the bank. These location in question and at the degree of a day to be a legal holiday due to different uses of the term ‘‘NSF fees’’ control the bank maintains over the emergency conditions, the regulation have created ambiguity about the scope employees who work at the location or permits a national bank to choose to of the term as used in § 7.4001(a). the business conducted there. A bank remain open or to close any of its The proposal amends § 7.4001(a) to would usually have no property interest banking offices in the affected clarify that the term ‘‘NSF fees’’ in the school location. Its employees geographic area.9 Thus, unlike the includes only those fees imposed by a would typically work at the school only statute, § 7.3000 does not authorize the creditor bank when a borrower attempts in connection with their participation in Comptroller to require national banks to to pay an obligation to that bank with the financial literacy program. Finally, close in the event the Comptroller a check drawn on insufficient funds. the bank would exercise no control over declares a legal holiday but, instead, Fees that a bank charges for its deposit the school, its teachers, or its gives national banks discretion to account services—including overdraft curriculum. remain open during either a and returned check charges—are not The proposed regulation also requires Comptroller- or State-declared holiday. covered by the term ‘‘NSF fees.’’ These that the financial literacy program be This proposed rule amends § 7.3000 fees are therefore not ‘‘interest’’ but, principally intended to educate to conform it with the Comptroller’s rather, are charges covered by 12 CFR students. As noted in the proposal, a statutory authority to proclaim 7.4002. program would be considered mandatory bank closings, as provided in We also invite comment on whether principally educational if it is designed 12 U.S.C. 95(b)(1). It provides that if the the term ‘‘NSF fees’’ should also include to teach students the principles of Comptroller or a State declares a legal at least some portion of the fee imposed personal economics or the benefits of holiday due to emergency conditions, a by a national bank when it pays a check saving for the future, without being national bank may temporarily limit or notwithstanding that its customer’s designed for the purpose of making suspend operations at its affected offices account contains insufficient funds to profits. or it may choose to continue its cover the check. As a matter of practice, Students in the financial literacy operations unless the Comptroller by banks often vary the amount of the program need not be of any particular written order directs otherwise. charges they impose depending on age or income background in order for whether they honor the customer’s the program to be eligible under this Definition of ‘‘Interest’’ for Purposes of 12 U.S.C. 85 (Revised § 7.4001(a)) check. A bank that pays a check drawn proposal. If the students are low- or against insufficient funds may be moderate-income individuals, however, The proposed rule revises current viewed as having extended credit to the a bank’s participation in a school § 7.4001 to clarify the scope of the term accountholder. Consistent with that savings program may also be given ‘‘NSF fees’’ for purposes of 12 U.S.C. 85. approach, the difference between what positive consideration under the Section 85 governs the interest rates that the bank charges a customer when it Community Reinvestment Act as a national banks may charge, but it does pays the check and what it charges 8 community development service. not define the term ‘‘interest.’’ Section when it dishonors the check and returns 7.4001 generally defines the charges that it could be viewed as interest within the Bank Holidays (Revised § 7.3000) are considered ‘‘interest’’ for purposes meaning of 12 U.S.C. 85. Currently, the Under 12 U.S.C. 95(b)(1), in the event of section 85, then sets out a OCC’s regulation does not expressly of natural or other emergency nonexclusive list of charges covered by resolve this issue. conditions existing in any State, the that definition. The list includes ‘‘NSF Comptroller may proclaim any day a fees.’’ National Bank Non-Interest Charges legal holiday for national banks located The inclusion of ‘‘NSF fees’’ in the (Revised § 7.4002) in that State or affected area. In such a definition of ‘‘interest’’ was intended to Current § 7.4002 sets out the basic case, the Comptroller may require codify a position the OCC took in an authority to impose non-interest charges national banks to close on the day or interpretive letter issued in 1988. and fees, including deposit account Interpretive Letter No. 452 concluded days designated. If a State or State service charges. It provides that the that charges imposed by a credit card official designates any day as a legal decision to do so and to determine the bank on its customers who paid their holiday for ceremonial or emergency amounts of charges and fees is a accounts with checks drawn on reasons, a national bank may either business decision to be made by each insufficient funds were ‘‘interest’’ close or remain open unless the bank, in its discretion, according to within the meaning of section 85.10 IL Comptroller directs otherwise by sound banking judgment and safe and No. 452 referred to the charges in written order. sound banking principles. It also question as ‘‘NSF charges.’’ The term, The OCC has issued a regulation provides that a bank ‘‘reasonably however, is also commonly used to refer implementing this authority that is set establishes’’ non-interest charges and to fees imposed by a bank on its forth at 12 CFR 7.3000. The wording of fees if it considers, among other factors, checking account customers whenever a § 7.3000 does not follow that of the the four factors enumerated in the customer writes a check against statute precisely, however. Currently, regulation. The OCC construes § 7.4002 insufficient funds, regardless of whether § 7.3000 requires the Comptroller to to mean that a national bank that the check was intended to pay an issue a proclamation authorizing the considers at least these four factors in emergency closing in accordance with 9 The regulation also provides that when a State setting its non-interest charges and fees 12 U.S.C. 95 at the time of the has satisfied the safety and soundness emergency condition, or soon thereafter. or a legally authorized State official designates any day to be a legal holiday for ceremonial reasons, a concerns in the regulation and faces no When the Comptroller, a State, or a national bank may choose to remain open or to supervisory impediment to exercising close. 12 CFR 7.3000(c). Finally, it provides that a the authority to set charges and fees that 8 national bank should assure that all liabilities or See Community Reinvestment Act; Interagency 11 Questions and Answers Regarding Community other obligations under the applicable law due to the regulation describes. Reinvestment, 64 FR 23, 618 (May 3, 1999) (Q and the bank’s closing are satisfied. 12 CFR 7.3000(d). A 3 addressing 12 CFR §§ 25.12(j), 228.23(j), 10 Interpretive Letter No. 452 (Aug. 11, 1988), 11 See Brief Amicus Curiae of the Office of the 345.23(j), and 563e.12(i) (examples of community reprinted in [1988–89 Transfer Binder] Fed. Comptroller of the Currency in Support of National development services)). Banking L. Rep. (CCH) ¶ 85,676 (IL 452). Bank Plaintiffs, Bank of America, N.A. v. San
VerDate 11
The proposal eliminates certain particular fee. We note that of their parent bank—organized for ambiguities in the text of § 7.4002 consideration of the four factors is convenience in a different corporate without altering the substance of the relevant both when establishing a new form. regulation or the way in which the OCC fee and when changing a fee that Consistent with the concept intends that it operate. First, current already has been established. The underlying this authority for operating § 7.4002(a) gives two examples of the reference to factors other than the four subsidiaries, and recent legislation types of non-interest charges and fees that are enumerated in § 7.4002(b) has recognizing the status of national bank that national banks may impose: been retained in order to avoid creating Charges on dormant accounts and fees any doubt about a national bank’s operating subsidiaries, the proposal for credit reports or investigations. We ability to rely on factors in addition to provides that state law applies to the have removed these examples in the those stated in the regulation. activities of an operating subsidiary to proposal, given that the explicit Section 7.4002(a) is also revised to the same extent it would apply if those reference to the two types fees is clarify that the authorization it contains activities were conducted by its parent unnecessary and could be to establish fees and charges necessarily bank. In GLBA, for example, Congress misinterpreted as a limitation on a includes the authorization to decide the recognized the authority of national national bank’s ability to charge other amount and method by which they are banks to own subsidiaries that engage types of fees. We note, however, that computed. Thus, for example, fees ‘‘solely in activities that national banks dormant account charges and fees for resulting from the method the bank are permitted to engage in directly and credit reports and investigations employs to post checks presented for are conducted subject to the same terms continue to be permissible non-interest payment are included within the and conditions that govern the conduct charges and fees even though they are authorization provided by § 7.4002. of such activities by national banks.’’ 12 no longer specifically mentioned in the Finally, current § 7.4002(d) addresses Similarly, the OCC operating subsidiary rule. the OCC’s issuance of opinions regulation provides that an operating We also propose to amend § 7.4002(b) concerning whether state laws subsidiary conducts its activities subject to clarify what a bank’s obligations are purporting to limit or prohibit national to the same authorization, terms, and under that section. The sentence in bank non-interest charges and fees are conditions that apply to the conduct of § 7.4002(b) that currently introduces the preempted. The first clause of current those activities by its parent bank.13 paragraph (d) states that the OCC four factors says that a bank ‘‘reasonably Fundamental to the description of the establishes’’ non-interest charges and evaluates on a case-by-case basis characteristics of operating subsidiaries fees if it considers those factors among whether a national bank may establish in GLBA and the OCC’s rule is that, others. This language was intended to fees pursuant to paragraphs (a) and (b) unless otherwise provided by Federal convey that the bank must exercise of § 7.4002; the second clause provides sound banking judgment and rely on that, in determining whether a state law law or OCC regulation, State laws apply safe and sound banking principles in purporting to limit or prohibit such fees to operating subsidiaries to the same setting charges and fees. In order to is preempted, the OCC applies extent as they apply to the parent clarify that intent, we have revised the preemption principles derived from the national bank. sentence in § 7.4002(b) that currently Supremacy Clause of the United States The Office of Thrift Supervision introduces the four factors to say that a Constitution and applicable judicial (OTS) has already taken this approach bank establishes non-interest charges precedent. The first clause simply with respect to the operating and fees ‘‘in accordance with safe and underscores that a national bank’s subsidiaries of Federal savings sound banking principles’’ if it employs establishment of fees is governed by the associations. An OTS rule also provides a decision-making process through preceding paragraphs of § 7.4002; the that state law applies to Federal savings which it considers the four factors. This second clause was intended to convey associations’ operating subsidiaries, revision clarifies that consideration of that the law as articulated by the which are limited to engaging in the four factors is a process requirement Supreme Court and the lower Federal activities permissible for the parent to be implemented by the bank and courts governs issues of federal thrift, to the extent it applies to the more clearly establishes the connection preemption. The proposal revises parent thrift.14 A Federal district court § 7.4002(d) to rephrase and restate these between the required process and the has recently upheld this OTS rule.15 safety and soundness considerations two points more directly and succinctly. For the reasons stated above, the OCC that underlie it. Applicability of State Law to National The four factors are the same as under proposes to add a new § 7.4006, stating Bank Subsidiaries (New § 7.4006) the current regulation, including the that, except where Federal law or an factor addressing the maintenance of the Proposed § 7.4006 clarifies that state OCC rule provides otherwise, State law bank’s safety and soundness. We expect laws apply to a national bank operating applies to operating subsidiaries only to that, pursuant to this factor, a bank subsidiary to the same extent as those the extent that the law applies to the would consider any risks, such as laws apply to the parent national bank. parent bank. reputation or litigation risk, that would Operating subsidiaries have been be affected by the imposition of a authorized for national banks for 12 Pub. L. 106–102, § 121, 113 Stat. at 1378, decades, recognizing that, under various codified at 12 U.S.C. 24a(g)(3). Francisco, No. C 99 4817 VRW (N.D. Ca.) (citing circumstances, it may be convenient or 13 12 CFR 5.34(e)(3). OCC opinion letters construing and describing the useful for the bank to conduct activities 14 12 CFR 559.3(n). See 61 FR 66561, 66563 operation of 12 CFR 7.4002). On July 11, 2000, the that the bank could conduct directly, (December 18, 1996) (preamble to OTS final rule U.S. District Court for the Northern District of adopting section 559.3(n); explaining that the basis California granted the plaintiffs in this case through the alternate form of a for the OTS rule is that the operating subsidiary of permanent injunctive relief against San Francisco controlled subsidiary company. Thus, a Federal savings association ‘‘is treated as the and Santa Monica city ordinances that purported to operating subsidiaries and the activities equivalent of a department of the parent thrift for prohibit national banks from charging fees for they conduct are an embodiment of the regulatory and reporting purposes’’). providing banking services through automatic teller 15 See WPS Financial, Inc. v. Dean, No. 99 C 0345 machines (ATMs). The case is currently pending incidental powers of their parent bank, C (W.D. Wi. Nov. 26, 1999); Chaires v. Chevy Chase appeal in the U.S. Court of Appeals for the Ninth and often have been described as the Bank, FSB, 131 Md. App. 64, 748 A.2d 34, 44 (Md. Circuit. equivalent of a department or division Ct. Sp. App. 2000).
VerDate 11
C. Part 23—Leasing Request for Comments a Federal mandate that may result in the Estimated Residual Value for Section 24 The OCC invites comment on all expenditure by State, local, and tribal (Seventh) Leases (Revised § 23.21) aspects of the proposed regulation. governments, in the aggregate or by the Specifically, we invite your comments private sector, of $100 million or more The OCC’s regulations at 12 CFR part on how to make this proposed rule in any one year. If a budgetary impact 23 currently authorize national banks to easier to understand. For example: statement is required, section 205 of the engage in leasing activities pursuant to Have we organized the material to suit Unfunded Mandates Act also requires two distinct sources of authority: your needs? the agency to identify and consider a section 24 (Tenth), which expressly Are all the requirements in the rule reasonable number of regulatory authorizes leasing subject to certain clearly stated? alternatives before promulgating the conditions specified in that statute, Does the rule contain technical rule. The OCC has determined that this including a 10% of assets limit on the language or jargon that is not clear? proposal will not result in expenditures amount of the activity that the national Would a different format (grouping by State, local, and tribal governments, bank can conduct; and section 24 and order of sections, use of headings, or by the private sector, of $100 million (Seventh), which authorizes leasing as paragraphing) make the rule easier to or more in any one year. Accordingly, an activity that is part of the business of understand? the OCC has not prepared a budgetary banking without imposing a percentage- Would more (but shorter) sections be impact statement or specifically of-assets limit.16 The rules require that better? addressed any regulatory alternatives. leases be ‘‘full-payout leases.’’ That term What else could we do to make the The proposal codifies caselaw and OCC is defined to mean a lease in which the rule easier to understand? interpretations, but adds no new national bank reasonably expects to In addition, we invite your comments requirements. on the impact of this proposal on recover its investment in the leased Executive Order 13132 property, plus its cost of financing, from community banks. The OCC recognizes rental payments, estimated tax benefits, that community banks operate with Executive Order 13132 (Order) and the estimated residual value of the more limited resources than larger requires Federal agencies, including the leased property at the expiration of the institutions and may present a different OCC, to certify their compliance with lease term. The rules for section 24 risk profile. Thus, the OCC specifically that Order when they transmit to the (Seventh) leases further provide that the requests comments on the impact of this Office of Management and Budget bank’s estimate of the residual value of proposal on community banks’ current (OMB) any draft final regulation that has the leased property must be reasonable resources and available personnel with Federalism implications. Under the in light of the nature of the property and the requisite expertise, and whether the Order, a regulation has Federalism all the circumstances surrounding the goals of the proposed regulation could implications if it has ‘‘substantial direct lease transaction and that, in any event, be achieved, for community banks, effects on the States, on the relationship the unguaranteed amount of residual through an alternative approach. between the national government and the States, or on the distribution of value relied upon may not exceed 25% Regulatory Flexibility Act of the bank’s original cost of the power and responsibilities among the property. 12 CFR 23.3, 23.2(e), 23.21. Pursuant to section 605(b) of the various levels of government.’’ In the The OCC last revised the leasing rules Regulatory Flexibility Act, 5 U.S.C. case of a regulation that has Federalism implications and that preempts State in 1996. Since then, our experience 605(b) (RFA), the regulatory flexibility law, the Order imposes certain specific supervising national banks that engage analysis otherwise required under requirements that the agency must in the leasing business has suggested section 604 of the RFA is not required satisfy, to the extent practicable and that the 25% residual value limit may if the agency certifies that the rule will permitted by law, prior to the formal not be appropriate for all types of not have a significant economic impact on a substantial number of small entities promulgation of the regulation. personal property leasing. We are Executive Order 13132 imposes therefore proposing to modify current and publishes its certification and a short, explanatory statement in the certain requirements when an agency § 23.21 to provide that the limit on the issues a regulation that has federalism amount of estimated residual value is Federal Register along with its rule. Pursuant to section 605(b) of the RFA, implications or that preempts State law. either 25% or the percentage for a Under the Order, a regulation has particular type of personal property that the OCC hereby certifies that this proposal will not have a significant federalism implications if it has is specified in guidance published by substantial direct effects on the States, the OCC. As revised, § 23.21 would economic impact on a substantial number of small entities. The proposal on the relationship between the national permit the OCC to establish a different government and the States, or on the percentage requirement than 25% if a codifies caselaw and OCC interpretations, but adds no new distribution of power and different limit is warranted. If the OCC responsibilities among the various does not specify a different limit, the requirements. Accordingly, a regulatory flexibility analysis is not needed. levels of government. In general, the 25% limit would continue to apply. We Order requires the agency to adhere would apprise national banks of any Executive Order 12866 strictly to federal constitutional different limit or limits established The OCC has determined that this principles in developing rules that have under this provision by publishing an proposal is not a significant regulatory federalism implications; provides OCC bulletin, which would action under Executive Order 12866. guidance about an agency’s subsequently be incorporated into the interpretation of statutes that authorize Comptroller’s Handbook booklet on Unfunded Mandates Act of 1995 regulations that preempt State law; and Lease Financing. Section 202 of the Unfunded requires consultation with State officials Mandates Reform Act of 1995, 2 U.S.C. before the agency issues a final rule that 16 M&M Leasing v. Seattle First National Bank, 1532 (Unfunded Mandates Act), has federalism implications or that 563 F.2d 1377 (9th Cir. 1977), cert. denied, 436 U.S. 956 (1978) (bank leasing of personal property requires that the agency prepare a preempts State law. permissible because it was functionally equivalent budgetary impact statement before It is not clear that the Order applies to loaning money on personal security). promulgating any rule likely to result in to this proposal. Proposed § 7.4006
VerDate 11
addresses the applicability of state law obligation bonds, revenue bonds, and 5. In § 7.3000, the last sentence of to national bank operating subsidiaries, obligations that satisfy the requirements paragraph (b) is removed and two but, in the opinion of the OCC, it of section 142(b)(1) of the Internal sentences are added in its place to read reflects the conclusion that a federal Revenue Code of 1986 issued by or on as follows: court would reach, even in the absence behalf of any State or political of the regulation, pursuant to the subdivision of a State, including any § 7.3000 Bank hours and legal holidays. Supremacy Clause and applicable municipal corporate instrumentality of * * * * * federal judicial precedent. Nonetheless, 1 or more States, or any public agency (b) * * * When the Comptroller, a the OCC plans for its final rule to satisfy or authority of any State or political State, or a legally authorized State the requirements of the Order. If an subdivision of a State. official declares a legal holiday due to agency promulgates a regulation that * * * * * emergency conditions, a national bank has federalism implications and (j) * * * may temporarily limit or suspend preempts State law, the Order imposes (4) General obligations of a State of operations at its affected offices. upon the agency requirements to the United States or any political Alternatively, the national bank may consult with State and local officials, to subdivision thereof; and municipal continue its operations unless the publish a ‘‘federalism summary impact bonds if the national bank is well Comptroller by written order directs statement,’’ and to make written capitalized as defined in 12 CFR otherwise. comments from State and local officials 6.4(b)(1); * * * * * available to the Director of OMB. In the * * * * * 6. In § 7.4001, the second sentence of preamble to any final rule that results (k) * * * paragraph (a) is revised to read as from our proposal, we will describe the (1) Obligations issued by a State, or a follows: results of our consultation with State or political subdivision or agency of a State, for housing, university, or § 7.4001 Charging interest at rates local officials and include a federalism permitted competing institutions; charging summary impact statement. Moreover, dormitory purposes that would not interest to corporate borrowers. we will make any written comments we satisfy the definition of Type I securities (a) * * * It includes, among other receive from State or local officials pursuant to paragraph (j) of § 1.2. things, the following fees connected available to the Director of OMB. * * * * * with credit extension or availability: (l) Type III security means an List of Subjects numerical periodic rates, late fees, not investment security that does not sufficient funds (NSF) fees that are 12 CFR Part 1 qualify as a Type I, II, IV, or V security. imposed by a creditor when a borrower Examples of Type III securities include Banks, banking, National banks, tenders payment on a debt with a check corporate bonds and municipal bonds Reporting and recordkeeping drawn on insufficient funds, overlimit requirements, Securities. that do not satisfy the definition of Type I securities pursuant to paragraph (j) of fees, annual fees, cash advance fees, and 12 CFR Part 7 § 1.2. membership fees.* * * Credit, Insurance, Investments, * * * * * * * * * * 7. Section 7.4002 is revised to read as National banks, Reporting and follows: recordkeeping requirements, Securities, PART 7—BANK ACTIVITIES AND Surety bonds. OPERATIONS § 7.4002 National bank charges. 12 CFR Part 23 3. The authority citation for part 7 is (a) Authority to impose charges and revised to read as follows: fees. A national bank may charge its National banks. Authority: 12 U.S.C. 1 et seq., 92, 92a, 93, customers non-interest charges and fees, Authority and Issuance 93a, 481, 484, 1818. including deposit account service For the reasons set forth in the charges. Subpart A—Bank Powers preamble, parts 1, 7, and 23 of chapter (b) Considerations. (1) All charges and fees should be arrived at by each bank I of title 12 of the Code of Federal 4. A new § 7.1021 is added to read as on a competitive basis and not on the Regulations are proposed to be amended follows: as follows: basis of any agreement, arrangement, § 7.1021 National bank participation in undertaking, understanding, or PART 1—INVESTMENT SECURITIES financial literacy programs. discussion with other banks or their A national bank may participate in a officers. 1. The authority citation for part 1 financial literacy program on the (2) The establishment of non-interest continues to read as follows: premises of, or at a facility used by, a charges and fees, their amounts, and the Authority: 12 U.S.C. 1, et seq., 12 U.S.C. school. The school premises or facility method of calculating them are business 24 (Seventh) and 93a. will not be considered a branch of the decisions to be made by each bank, in 2. In § 1.2, current paragraphs (g) bank if: its discretion, according to sound through (m) are redesignated as (h) (a) The bank does not establish and banking judgment and safe and sound through (n), a new paragraph (g) is operate the school premises or facility banking principles. A national bank added, newly designated paragreaphs on which the financial literacy program establishes non-interest charges and fees (j)(4), (k)(1), and (l) are revised to read is conducted; and in accordance with safe and sound as follows: (b) The principal purpose of the banking principles if the bank employs financial literacy program is a decision-making process through § 1.2 Definitions. educational. For example, a program is which it considers the following factors, * * * * * educational if it is designed to teach among others: (g) Municipal bonds means students the principles of personal (i) The cost incurred by the bank in obligations of a State or political economics or the benefits of saving for providing the service; subdivision other than general the future, and is not designed for the (ii) The deterrence of misuse by obligations, and includes limited purpose of profit-making. customers of banking services;
VerDate 11
(iii) The enhancement of the DEPARTMENT OF TRANSPORTATION New England Executive Park, competitive position of the bank in Burlington, MA 01803, telephone (781) accordance with the bank’s business Federal Aviation Administration 238–7160, fax (781) 238–7199. plan and marketing strategy; and SUPPLEMENTARY INFORMATION: 14 CFR Part 39 (iv) The maintenance of the safety and Comments Invited soundness of the institution. [Docket No. 2000–SW–40–AD] Interested persons are invited to RIN 2120–AA64 (c) Interest. Charges and fees that are participate in the making of the ‘‘interest’’ within the meaning of 12 Airworthiness Directives; Sikorsky proposed rule by submitting such U.S.C. 85 are governed by § 7.4001 and written data, views, or arguments as not by this section. Aircraft Corporation Model S–76A Helicopters they may desire. Communications (d) State law. Preemption principles should identify the Rules Docket derived from the United States AGENCY: Federal Aviation number and be submitted in triplicate to Constitution, as interpreted through Administration, DOT. the address specified above. All judicial precedent, govern ACTION: Notice of proposed rulemaking communications received on or before determinations regarding the (NPRM). the closing date for comments will be considered before taking action on the applicability of State law to fees SUMMARY: This document proposes described in this section. proposed rule. The proposals contained revising an existing airworthiness in this document may be changed in (e) National bank as fiduciary. This directive (AD) for Sikorsky Aircraft light of the comments received. section does not apply to charges Corporation (Sikorsky) Model S–76A Comments are specifically invited on imposed by a national bank in its helicopters. That AD currently requires the overall regulatory, economic, capacity as a fiduciary, which are a one-time inspection of the tail rotor environmental, and energy aspects of governed by 12 CFR part 9. blade (blade) spar elliptical centering the proposed rule. All comments 8. A new § 7.4006 is added to read as plug (centering plug) for disbonding and submitted will be available in the Rules the addition of a retaining pad on the follows: Docket for examination by interested pitch change shaft between the output persons. A report summarizing each § 7.4006 Applicability of State law to tail rotor gearbox flange and the inboard FAA-public contact concerned with the national bank operating subsidiaries. tail rotor spar. This action would substance of this proposal will be filed contain the same requirements as the in the Rules Docket. Unless otherwise provided by Federal existing AD but would clarify that the Commenters wishing the FAA to law or OCC regulation, State laws apply 500-hour time-in-service (TIS) repetitive acknowledge receipt of their mailed to national bank operating subsidiaries inspections, which could cause comments submitted in response to this to the same extent that those laws apply inadvertent damage, are not required. proposal must submit a self-addressed, to the parent national bank. This AD would also incorporate by stamped postcard on which the reference a revised alert service bulletin following statement is made: PART 23—LEASING (ASB) that does not include the 500- ‘‘Comments to Docket No. 2000–SW– hour TIS repetitive inspections. This 40–AD.’’ The postcard will be date 9. The authority citation for part 23 proposal is prompted by operator stamped and returned to the continues to read as follows: confusion about whether the current AD commenter. Authority: 12 U.S.C. 1 et seq., 24 (Seventh), continues to require the 500-hour TIS 24 (Tenth), and 93a. repetitive inspections. The proposed AD Availability of NPRMs is intended to verify that the FAA has Any person may obtain a copy of this Subpart C—Section 24(Seventh) determined that the 500-hour TIS Leases NPRM by submitting a request to the repetitive inspections are not required FAA, Office of the Regional Counsel, to prevent the centering plug from 10. In § 23.21, current paragraph (a)(2) Southwest Region, Attention: Rules disbonding and moving out of position, Docket No. 2000–SW–40–AD, 2601 is revised to read as follows: loss of tail rotor control, and subsequent Meacham Blvd., Room 663, Fort Worth, loss of control of the helicopter. § 23.21 Estimated residual value. Texas 76137. DATES: Comments must be received on * * * * * or before April 2, 2001. Discussion (a) * * * ADDRESSES: Submit comments in On June 30, 1994, the FAA issued AD (2) Any unguaranteed amount must triplicate to the Federal Aviation 94–14–20, Amendment 39–8969 (59 FR not exceed 25 percent of the original Administration (FAA), Office of the 41238, August 11, 1994), to require cost of the property to the bank or the Regional Counsel, Southwest Region, inspecting each blade centering plug for percentage for a particular type of Attention: Rules Docket No. 2000–SW– disbonding; adding a retaining pad on property specified in published OCC 40–AD, 2601 Meacham Blvd., Room the pitch change shaft between the tail guidance. 663, Fort Worth, Texas 76137. You may rotor output gearbox flange and the also send comments electronically to inboard blade spar; and removing the * * * * * the Rules Docket at the following 500-hour repetitive inspection. That Dated: January 8, 2001. address: [email protected]. action was prompted by successful John D. Hawke, Jr., Comments may be inspected at the service experience and an improved Office of the Regional Counsel between Comptroller of the Currency. bonding procedure. The requirements of 9 a.m. and 3 p.m., Monday through [FR Doc. 01–1614 Filed 1–29–01; 8:45 am] that AD are intended to prevent the Friday, except Federal holidays. centering plug from disbonding and BILLING CODE 4810–33–P FOR FURTHER INFORMATION CONTACT: moving out of position, loss of tail rotor Richard Noll, Aviation Safety Engineer, control, and subsequent loss of control Boston Aircraft Certification Office, 12 of the helicopter.
VerDate 11
Since the issuance of that AD, economic impact, positive or negative, (a) Inspect the centering plug for Sikorsky has issued revised ASB 76–65– on a substantial number of small entities disbonding of the polyurethane filler that 35B, dated October 2, 1997, to under the criteria of the Regulatory fills the space between the aluminum supersede the basic ASB. The revised Flexibility Act. A copy of the draft centering plug and the graphite spar in ASB amplifies the basic procedures and regulatory evaluation prepared for this accordance with the Accomplishment specifies that the recurring inspection action is contained in the Rules Docket. Instructions, paragraph 3.A.(1) and (2), of interval (formerly 500-hours time-in- A copy of it may be obtained by Sikorsky Aircraft Corporation Alert Service service (TIS)) is the interval specified in contacting the Rules Docket at the Bulletin No. 76–65–35B, dated October 2, the S–76A Airworthiness Limitations location provided under the caption 1997 (ASB). and Inspection Schedule. The ASB also ADDRESSES. Note 2: The 500-hours TIS repetitive revises the text referencing consumables inspections contained in the by changing military specifications to List of Subjects in 14 CFR Part 39 Accomplishment Instructions, paragraph commercial equivalents. Air transportation, Aircraft, Aviation 3.D., of Sikorsky Aircraft Corporation Alert The FAA has become aware that 500- safety, Safety. Service Bulletin 76–65–35A, Revision A, hour TIS repetitive inspections are dated February 29, 1984, are not required by The Proposed Amendment being conducted because of the this AD. misconception that AD 94–14–20 Accordingly, pursuant to the (1) If the inspection of the centering plug mandates the entire ASB. These authority delegated to me by the reveals disbonding of 1⁄2-inch or less in repetitive inspections could result in Administrator, the Federal Aviation length, install a retaining pad, P/N 76102– inadvertent damage to the tail rotor Administration proposes to amend part 05004–111, in accordance with the blades. The FAA understands how this 39 of the Federal Aviation Regulations Accomplishment Instructions, paragraph confusion could occur since the AD (14 CFR part 39) as follows: 3.C., of the ASB. language does inadvertently incorporate (2) For disbonds greater than 1⁄2-inch in all the inspection requirements of PART 39—AIRWORTHINESS length, repair the blade assembly in Sikorsky Aircraft Alert Service Bulletin DIRECTIVES accordance with the Accomplishment 76–15–35A, Revision A, dated February 1. The authority citation for part 39 Instructions, paragraph 3.B.(1), of the ASB 29, 1984. However, that was not the continues to read as follows: except you are not required to contact intent of the AD as explained in the Sikorsky Worldwide Customer Service. If preamble to AD 94–14–20. The FAA Authority: 49 U.S.C. 106(g), 40113, 44701. blades are found with polyurethane filler intended to eliminate the 500-hour TIS § 39.13 [Amended] excessively cracked or deteriorated to extent of breaking away from the spar or aluminum repetitive inspections for centering plug 2. Section 39.13 is amended by disbonding. Incorporating specific plug by 0.005-inch or greater, replace the removing Amendment 39–8969 (59 FR blade with an airworthy blade. portions of ASB 76–65–35B, dated 41238, August 11, 1994), and by adding October 2, 1997, that does not contain (3) For spars with complete spar to a new airworthiness directive (AD), to centering plug disbond in which the the 500-hour TIS repetitive inspections read as follows: will clarify the intended AD polyurethane filler is intact and remains fully requirements. Sikorsky Aircraft Corporation: Docket No. bonded to the centering plug, repair the blade We have identified an unsafe 2000–SW–40–AD. Revises AD 94–14–20, assembly in accordance with the Amendment 39–8969, Docket No. 93– Accomplishment Instructions, paragraph condition that is likely to exist or SW–13–AD. develop on other Sikorsky Model S–76A 3.B.(2), of the ASB. Applicability: Model S–76A helicopters, (4) For spars with complete polyurethane helicopters of the same type design. The with tail rotor blade (blade) assembly, part filler to centering plug disbond in which the proposed AD would revise AD 94–14– number (P/N) 76101–05001 (all dash polyurethane filler is intact and remains fully 20 and would retain the same basic numbers) or 76101–05101 (all dash bonded to the spar, repair the blade assembly requirements but would incorporate by numbers), installed with more than 130 in accordance with the Accomplishment reference portions of the revised ASB hours time-in-service (TIS), certificated in Instructions, paragraph 3.B.(3) of the ASB. any category. and would clarify that the repetitive (b) Install a retaining pad, P/N 76102– inspections are not required by the AD. Note 1: This AD applies to each helicopter 05004–111, in accordance with the The FAA estimates that this proposed identified in the preceding applicability Accomplishment Instructions, paragraph provision, regardless of whether it has been AD would affect 150 helicopters of U.S. 3.C., of the ASB. otherwise modified, altered, or repaired in registry. The revised AD would not (c) An alternative method of compliance or the area subject to the requirements of this impose any additional burden or costs. adjustment of the compliance time that The regulations proposed herein AD. For helicopters that have been modified, altered, or repaired so that the performance provides an acceptable level of safety may be would not have a substantial direct of the requirements of this AD is affected, the used if approved by the Manager, Boston effect on the States, on the relationship owner/operator must request approval for an Aircraft Certification Office, FAA. Operators between the national Government and alternative method of compliance in shall submit their requests through an FAA the States, or on the distribution of accordance with paragraph (c) of this AD. Principal Maintenance Inspector, who may power and responsibilities among the The request should include an assessment of concur or comment and then send it to the various levels of government. Therefore, the effect of the modification, alteration, or Manager, Boston Aircraft Certification Office. it is determined that this proposal repair on the unsafe condition addressed by Note 3: Information concerning the would not have federalism implications this AD; and if the unsafe condition has not existence of approved alternative methods of been eliminated, the request should include under Executive Order 13132. compliance with this AD, if any, may be specific proposed actions to address it. For the reasons discussed above, I obtained from the Boston Aircraft certify that this proposed regulation (1) Compliance: Required within 25 hours TIS, Certification Office. is not a ‘‘significant regulatory action’’ unless accomplished previously. To prevent the blade spar elliptical (d) Special flight permits may be issued in under Executive Order 12866; (2) is not centering plug (centering plug) from accordance with 14 CFR 21.197 and 21.199 a ‘‘significant rule’’ under the DOT disbonding and moving out of position, loss to operate the helicopter to a location where Regulatory Policies and Procedures (44 of tail rotor control, and subsequent loss of the requirements of this AD can be FR 11034, February 26, 1979); and (3) if control of the helicopter, accomplish the accomplished if a retaining pad has been promulgated, will not have a significant following: installed.
VerDate 11
Issued in Fort Worth, Texas, on January 22, Register on January 12, 2001, under the electronically to [email protected]. 2001. title National Pollutant Discharge For more specifics about how to submit Henry A. Armstrong, Elimination System Permit Regulation comments, please refer to the January 12 Manager, Rotorcraft Directorate, Aircraft and Effluent Limitations Guidelines and Federal Register announcement, Certification Service. Standards for Concentrated Animal available at http://www.epa.gov/owm/ [FR Doc. 01–2428 Filed 1–29–01; 8:45 am] Feeding Operations. afos/rule.htm. BILLING CODE 4910–13–U The purpose of the meetings is to FOR FURTHER INFORMATION CONTACT: To enhance public understanding of the obtain additional information about the proposed regulations for CAFOs. The meetings, please contact Nina ENVIRONMENTAL PROTECTION meetings are not a mechanism for Bonnelycke, U.S. EPA, 1200 AGENCY submitting formal comments on the Pennsylvania Ave., NW., 4203M, proposal. The meetings will consist of a Washington, DC 20460. Questions may 40 CFR Parts 112 and 412 brief presentation by EPA officials on also be directed to Ms. Bonnelycke at [FRL–6936–2] the proposed regulations followed by a 202–564–0764 or question and answer session. [email protected]. Information National Pollutant Discharge Participants are encouraged to on the CAFO proposal public meetings Elimination System Permit Regulation familiarize themselves with the basic and on the CAFO proposal in general is and Effluent Limitations Guidelines aspects of the proposed regulations also available at http://www.epa.gov/ and Standards for Concentrated prior to the public meetings; each owm/afos/rule.htm. The website has the Animal Feeding Operations—Proposed speaker’s time will be limited so that all text of the Federal Register Revisions; Public Meetings interested parties may have the announcement with the CAFO proposed opportunity to pose questions. Advance rule and accompanying preamble, a AGENCY: Environmental Protection registration is not required. factsheet describing the proposal, and Agency (EPA). DATES: See SUPPLEMENTARY INFORMATION other pertinent information. Key ACTION: Notice of public meetings. section for meeting dates. documents are also available through SUMMARY: The Environmental Protection ADDRESSES: See SUPPLEMENTARY EPA’s Water Resources Center (202– Agency hereby gives notice that it will INFORMATION section for meeting 260–7786). conduct eight public meetings on new addresses. Formal comments on the SUPPLEMENTARY INFORMATION: proposed regulations under the Clean proposal should be submitted by mail Dates, Cities, Times and Addresses for Water Act for Concentrated Animal to: Concentrated Animal Feeding Public Meetings Feeding Operations (CAFOs). EPA Operation Proposed Rule Comment Administrator Carol Browner signed Clerk OW–00–27, Water Docket EPA is conducting eight public these proposed regulations on December (MC4101), U.S. EPA, 1200 Pennsylvania meetings on the CAFO proposed 15, 2000, and the Agency published the Ave., NW., Washington DC 20460. regulations as described in the following proposed regulations in the Federal Comments may also be submitted table:
Date City Time Meeting address
March 1, 2001 ...... Baltimore, MD ...... 1 p.m.–5 p.m...... Baltimore Marriott, Inner Harbor, 110 South Eutaw Street. March 7, 2001 ...... Ames, IA ...... 1:30 p.m.–5:30 p.m. ... Benton Auditorium, Scheman Building, Iowa State Center, Elwood Drive. March 13, 2001 ...... Riverside, CA ...... 1 p.m.–5 p.m...... Riverside Convention Center, Holiday Inn Select, 3400 Market Street. March 15, 2001 ...... Ft. Wayne, IN ...... 1 p.m.–5 p.m...... Fort Wayne Hilton at the Convention Center, 120 South Calhoun Street. March 20, 2001 ...... Dallas, TX ...... 1 p.m.–5 p.m...... Hotel Adolphus, 1321 Commerce Street. March 22, 2001 ...... Chattanooga, TN ...... 1 p.m.–5 p.m...... Chattanooga Clarion Hotel, 47 Chestnut Street. March 27, 2001 ...... Denver, CO ...... 1 p.m.–5 p.m...... Executive Tower Hotel, 1405 Curtis Street. March 29, 2001 ...... Boise, ID ...... 1 p.m.–5 p.m...... The Grove Hotel, 245 South Capitol Blvd.
Prior to attending any of these public Background on CAFO Proposed (beef, dairy, swine and poultry meetings, please confirm location Regulations subcategories), which establish the information with EPA as indicated technology-based effluent discharge On December 15, 2000, EPA under FOR FURTHER INFORMATION standards for CAFOs. EPA is proposing Administrator Browner signed the CONTACT. revisions to these regulations to address Agency’s proposal to revise and update changes that have occurred in the Please note that the purpose of these two regulations under the Clean Water animal industry sectors over the last 25 meetings is to enhance public Act (40 CFR parts 112 and 412) that years, to clarify and improve understanding of the proposed address the water quality impacts of implementation of CAFO permit regulations for CAFOs. The meetings are manure, wastewater, and other process not a mechanism for submitting formal waters generated by concentrated requirements, and to improve the comments on the proposal, and formal animal feeding operations (CAFOs). environmental protection achieved under these rules. comments should be submitted to the These two regulations are the National address provided in the ADDRESSES Pollutant Discharge Elimination System Environmental concerns being section above. (NPDES) provisions that define which addressed by this rule include both operations are CAFOs and establish ecological and human health effects. permit requirements, and the Effluent Manure from stockpiles, lagoons, or Limitations Guidelines for feedlots excessive land application can reach
VerDate 11
waterways through runoff, erosion, swine, and poultry operations that are full text of the Federal Register spills, or via groundwater. These defined as CAFOs, pursuant to the announcement as well as a factsheet discharges can result in excessive NPDES revisions. The proposed effluent describing the proposed regulations are nutrients (nitrogen, phosphorus, and guidelines include regulations for both available as outlined above under FOR potassium), oxygen-depleting new and existing animal feeding FURTHER INFORMATION CONTACT. substances, and other pollutants in the operations that meet the definition of a Dated: January 17, 2001. water. This pollution can kill fish and CAFO. The proposed effluent guidelines shellfish, cause excess algae growth, revisions do not alter the requirements Michael B. Cook, harm marine mammals, and for horses, ducks, sheep or lambs. Director, Office of Wastewater Management, contaminate drinking water. EPA published the proposed Office of Water. EPA is proposing to revise effluent regulations in the Federal Register on [FR Doc. 01–1976 Filed 1–29–01; 8:45 am] guidelines applicable to beef, dairy, January 12, 2001, at 66 FR 2959. The BILLING CODE 6560–5–U
VerDate 11
Notices Federal Register Vol. 66, No. 20
Tuesday, January 30, 2001
This section of the FEDERAL REGISTER the world wide web at the following food additives for adoption by the contains documents other than rules or address: http://www.fao.org/waicent/ Commission; considers methods of proposed rules that are applicable to the faoinfo/ECONOMIC/esn/codex/ccfac33/ analysis for their determination in food; public. Notices of hearings and investigations, fa01—01e.htm. Submit one original and and considers and elaborates standards committee meetings, agency decisions and two copies of written comments to the or codes for related subjects such as the rulings, delegations of authority, filing of petitions and applications and agency FSIS Docket Room at the address above labelling of food additives when sold as statements of organization and functions are and reference docket number 01–001N. such, and food irradiation. The examples of documents appearing in this All comments submitted in response to Committee is chaired by The section. this notice will be available for public Netherlands. inspection in the FSIS Docket Room These provisional agenda items will between 8:30 a.m. and 4:30 p.m., be discussed during the public meeting: DEPARTMENT OF AGRICULTURE Monday through Friday. 1. Adoption of the Agenda. FOR FURTHER INFORMATION CONTACT: 2. Matters Referred from other Codex Food Safety and Inspection Service Patrick J. Clerkin, Associate U.S. Committees. 3. Summary Reports of the 55th and [Docket No. 01–001N] Manager for Codex, U.S. Codex Office, Food Safety and Inspection Service, 56th Meetings of the Joint FAO/WHO Codex Alimentarius Commission: Room 4861 South Agriculture Building, Expert Committee on Food Additives. Thirty-Third Session of the Codex 1400 Independence Avenue SW., 4. Action Required as a Result of Committee on Food Additives and Washington, DC 20250. Telephone (202) Changes in ADI Status and other Contaminants 205–7760; Fax: (202) 720–3157. If you Toxicological Recommendations. plan to attend the meeting, please 5. Discussion Paper on the AGENCY: Office of the Under Secretary contact Angela Evans, Office of Pre- Application of Risk Analysis Principles for Food Safety, USDA. market Approval, FDA by fax (202) 418– for Food Additives and Contaminants. ACTION: Notice of public meeting, 3131 or e-mail Food Additives request for comments. ([email protected]). Persons 1. Endorsement and/or Revision of requiring a sign language interpreter or SUMMARY: The Office of the Under Maximum Levels for Food Additives in other special accommodations should Secretary for Food Safety, U.S. Codex Standards. notify Mr. Patrick Clerkin at the above Department of Agriculture (USDA), and 2. Consideration of the Codex General number. the Food and Drug Administration Standard for Food Additives (GSFA). (FDA), U.S. Department of Health and SUPPLEMENTARY INFORMATION: (a) Discussion Paper on the Human Services (HHS), are sponsoring Background Relationship Between Codex a public meeting on Tuesday, February Commodity Standards and the Further The Codex Alimentarius Commission 13, 2001. The purpose of the meeting is Development of the GSFA. (Codex) was established in 1962 by two to provide information and receive (b) Comments on the Food Category United Nations organizations, the Food public comments on agenda items that System of the GSFA. and Agriculture Organization (FAO) and will be discussed at the Codex (c) Revised Table 1, including the World Health Organization (WHO). Committee on Food Additives and Benzoates, of the Codex General Codex is the major international Contaminants (CCFAC), which will be Standard for Food Additives. organization for protecting the health held in The Hague, The Netherlands, on (d) Comments on the Use of Food and economic interests of consumers March 12–16, 2001. The Under Additives as Carriers. and encouraging fair international trade Secretary and FDA recognize the 3. Discussion Paper on Processing in food. Through adoption of food importance of providing interested Aids. standards, codes of practice, and other parties the opportunity to obtain 4. (a) Proposed Draft Revision to the guidelines developed by its committees, background information on the Thirty- Codex General Standard for Irradiated and by promoting their adoption and third Session of the CCFAC and to Foods. implementation by governments, Codex address items on the agenda. (b) Proposed Draft Revision to the seeks to ensure that the world’s food Recommended International Code of DATES: The public meeting is scheduled supply is sound, wholesome, free from Practice for the Operation of Irradiation for Tuesday, February 13, 2001, from 10 adulteration, and correctly labeled. Facilities Used for the Treatment of a.m. to 12 noon. The CCFAC establishes or endorses Foods. ADDRESSES: The public meeting will be maximum or guideline levels for 5. Specifications for the Identity and held in Room 1409, Federal Office individual food additives, for Purity of Food Additives Arising from Building 8, Food and Drug contaminants (including environmental the 55th JECFA. Administration, 200 C Street, SW., contaminants) and for naturally 6. Proposed Amendments to the Washington, DC 20204. Reference occurring toxicants in foodstuffs and International Numbering System, documents will be available for review animal feeds. In addition, the including Technological Functions and in the FSIS Docket Room, U.S. Committee prepares priority lists of food Functional Classes/Sub-Classes. Department of Agriculture, Food Safety additives and contaminants for and Inspection Service, Room 102 toxicological evaluation by the Joint Contaminants Cotton Annex, 300 12th Street, SW., FAO/WHO Expert Committee on Food 1. Endorsement and/or Revision of Washington, DC 20250–3700. The Additives (JECFA); recommends Maximum Levels for Contaminants in documents will also be accessible via specifications of identity and purity for Codex Standards.
VerDate 11
2. Codex General Standard for to be distributed, by The Netherlands’ ADDRESSES: The meeting will be held at Contaminants and Toxins in Foods Secretariat to the Meeting. Members of the InnSuites, 475 North Granada, (GSCT). the public may access or request copies Tucson, Arizona. Individuals who wish (a) Comments on the Agreed Position of these documents (see ADDRESSES). to speak at the meeting or to propose of the Codex Committee on Pesticide agenda items must send their names and Additional Public Notification Residues on Setting Extraneous proposals to Suzanne M. del Villar, Maximum Residue Limits (EMRLs). Public awareness of all segments of Executive Assistant, National Urban and (b) Schedule 1 of the Proposed Draft rulemaking and policy development is Community Forestry Advisory Council, Codex General Standard for important. Consequently, in an effort to 20628 Diane Drive, Sonora, CA 95370. Contaminants and Toxins in Foods. better ensure that minorities, women, Individuals also may fax their names (c) Comments on the Methodology and persons with disabilities are aware and proposed agenda items to (209) and Principles for Exposure Assessment of this notice, FSIS will announce it and 536–9089. in the Codex General Standard for provide copies of this Federal Register FOR FURTHER INFORMATION CONTACT: Contaminants and Toxins in Foods. publication in the FSIS Constituent Suzanne M. del Villar, Cooperative (d) Comments on the Technical Update. FSIS provides a weekly FSIS Forestry Staff, (209) 536–9201. Annex on Distribution Curves of Constituent Update, which is SUPPLEMENTARY INFORMATION: The Contaminants in Food Products. communicated via fax to over 300 meeting is open to the public. Council 3. Mycotoxins in Food and Feed. organizations and individuals. In discussion is limited to Forest Service (a) Comments on the Draft Maximum addition, the update is available on-line staff and Council members. However, Level for Aflatoxin M1 in Milk. through the FSIS web page located at persons who wish to bring urban and (b) Proposed Revisions to the http://www.fsis.usda.gov. The update is community forestry matters to the Sampling Plan for Aflatoxins in raw used to provide information regarding attention of the Council may file written Peanuts. FSIS policies, procedures, regulations, statements with the Council staff before (c) Comments on the Proposed Draft Federal Register notices, FSIS public or after the meeting. Public input Maximum Level for Ochratoxin A in meetings, recalls and any other types of sessions will be provided and Cereals and Cereal Products. information that could affect or would (d) Proposed Draft Code of Practice for individuals who made written requests be of interest to our constituents/ the Prevention of Patulin Contamination by February 9 will have the opportunity stakeholders. The constituent fax list in Apple Juice and Apple Juice to address the Council at those sessions. consists of industry, trade, and farm Ingredients in Other Beverages. Dated: January 24, 2001. (e) Proposed Draft Code of Practice for groups, consumer interest groups, allied the Prevention of Mycotoxin health professionals, scientific Robin L. Thompson, Contamination in Cereals, Including professionals, and other individuals that Acting Deputy Chief, State and Private Annexes on Ochratoxin A, Zearalenone have requested to be included. Through Forestry. and Fumonisin. these various channels, FSIS is able to [FR Doc. 01–2509 Filed 1–29–01; 8:45 am] 4. Industrial and Environmental provide information to a much broader, BILLING CODE 3410–11–M Contaminants in Foods. more diverse audience. For more (a) Comments on the Draft Code of information and to be added to the Practice for Source Directed Measures to constituent fax list, fax your request to DEPARTMENT OF COMMERCE Reduce Contamination of Food with the Congressional and Public Affairs Chemicals. Office, at (202) 720–5704. Submission for OMB Review; (b) Standard Format for Codes of Done at Washington, DC on: January 22, Comment Request Practice. 2001. DOC has submitted to the Office of (c) Comments on Draft Maximum F. Edward Scarbrough, Management and Budget (OMB) for Levels for Lead. U.S. Manager for Codex Alimentarius. clearance the following proposal for (d) Comments on the Draft Guideline [FR Doc. 01–2575 Filed 1–29–01; 8:45 am] collection of information under the Level and Proposed Draft Maximum BILLING CODE 3410–DM–P provisions of the Paperwork Reduction Levels for Cadmium. (e) Position Paper on Dioxins and Act (44 U.S.C. chapter 35). Agency: U.S. Census Bureau. Dioxin-Like PCBs. DEPARTMENT OF AGRICULTURE (f) Proposed Draft Code of Practice for Title: 2001 Panel of the Survey of Income and Program Participation, Source Directed Measures to Reduce Forest Service Dioxin Contamination of Foods. Wave 2 Topical Modules. (g) Position Paper on National Urban and Community Form Number(s): SIPP/CAPI Chloropropanols. Forestry Advisory Council; Notice of Automated Instrument, SIPP 21205(L) Meeting Director’s Letter. General Issues Agency Approval Number: 0607– 1. Priority List of Food Additives, AGENCY: Forest Service, USDA. 0875. Contaminants and Naturally Occurring ACTION: Notice of meeting. Type of Request: Revision of a Toxicants Proposed for Evaluation by currently approved collection. JECFA. SUMMARY: The National Urban and Burden: 80,635 hours. 2. Other Business and Future Work. Community Forestry Advisory Council Number of Respondents: 78,750. (a) Comments on Methods of Analysis will meet in Tucson, Arizona, February Avg Hours Per Response: 30 minutes. for the Determination of Food Additives 15–17, 2001. The purpose of the Needs and Uses: The U.S. Census and Contaminants in Foods. meeting is to discuss emerging issues in Bureau requests authorization from the (b) Comments on the Draft Revision to urban and community forestry. Office of Management and Budget the Codex Standard for Food Grade Salt: DATES: The meeting will be held (OMB) to conduct the Wave 2 Topical Packaging, Transportation and Storage. February 15–17, 2001. A tour of local Module interview for the 2001 Panel of Each issue listed will be fully projects will be held on February 15 the Survey of Income and Program described in documents distributed, or from 9:00 a.m. to 5:00 p.m. Participation (SIPP). We also request
VerDate 11
approval for a few replacement these kinds of data on a continuing basis copies of the information collection questions in the reinterview instrument. since 1983, permitting levels of instrument(s) and instructions should The core SIPP instrument, Wave 1 economic well-being and changes in be directed to Fay Dorsett, U. S. Census topical modules, and reinterview these levels to be measured over time. Bureau, Room 2679, Building 3, instrument were cleared previously. The Affected Public: Individuals or Washington DC 20233–0001 (301–457– reinterview instrument will be used for households. 2687 or via the Internet at quality control purposes. We are also Frequency: Every 4 months. [email protected]). Respondent’s Obligation: Voluntary. seeking continued clearance for the SUPPLEMENTARY INFORMATION: SIPP Methods Panel instrument field Legal Authority: Title 13 USC, Section testing to be conducted in June and July 182. I. Abstract OMB Desk Officer: Susan Schechter, 2001. The test targets SIPP Wave 1 items The economic census, conducted (202) 395–5103. and sections that require thorough and under authority of Title 13, United rigorous testing in order to improve the Copies of the above information collection proposal can be obtained by States Code (U.S.C.), is the primary quality of core data. The experiment is source of facts about the structure and conducted under the direction of the calling or writing Madeleine Clayton, Departmental Forms Clearance Officer, functioning of the Nation’s economy. Methods Panel Team, which is Economic statistics serve as part of the committed to delivering an improved (202) 482–3129, Department of Commerce, room 6086, 14th and framework for the national accounts and and less burdensome instrument for use provide essential information for in the 2004 SIPP Panel. Constitution Avenue, NW, Washington, DC 20230 (or via the Internet at government, business, and the general The SIPP is designed as a continuing public. Economic data are the Census series of national panels of interviewed [email protected]). Written comments and Bureau’s primary program commitment households that are introduced every during nondecennial census years. The few years, with each panel having recommendations for the proposed information collection should be sent 2002 Economic Census covering retail durations of 3 to 4 years. The 2001 SIPP trade and accommodation and food Panel is scheduled for three years and within 30 days of publication of this notice to Susan Schechter, OMB Desk services sectors (as defined by the North will include nine waves beginning American Industry Classification February 1, 2001. Officer, room 10201, New Executive Office Building, Washington, DC 20503. System (NAICS)) will measure the The survey is molded around a economic activity of more than 1.6 central ‘‘core’’ of labor force and income Dated: January 25, 2001. million establishments. The information questions that remain fixed throughout Madeleine Clayton, collected will produce basic statistics by the life of a panel. The core is Departmental Forms Clearance Officer, Office kind of business on the number of supplemented with questions designed of the Chief Information Officer. establishments, sales, payroll, and to answer specific needs. These [FR Doc. 01–2574 Filed 1–29–01; 8:45 am] employment. It will also yield a variety supplemental questions are included BILLING CODE 3510–07–P of subject statistics, including sales by with the core and are referred to as merchandise line, sales by class of ‘‘topical modules.’’ The topical modules customer, and other industry-specific for the 2001 Panel Wave 2 are Work DEPARTMENT OF COMMERCE measures. Primary strategies for Disability History, Education and Census Bureau reducing burden in Census Bureau Training History, Marital History, economic data collections are to Fertility History, Migration History, and increase electronic reporting through Household Relationships. Wave 2 2002 Economic Census Covering the broader use of computerized self- interviews will be conducted from June Retail Trade and Accommodation and administered census questionnaires, on- through September 2001. Food Services Sectors Data provided by the SIPP are being line questionnaires, and other electronic ACTION: Proposed collection, comment used by economic policymakers, the data collection methods. request. Congress, state and local governments, II. Method of Collection and Federal agencies that administer SUMMARY: The Department of A. Mail Selection Procedures social welfare or transfer payment Commerce, as part of its continuing programs, such as the Department of effort to reduce paperwork and The retail trade and accommodation Health and Human Services and the respondent burden, invites the general and food services sectors of the Department of Agriculture. The SIPP public and other Federal agencies to economic census will select represents a source of information for a take this opportunity to comment on establishments for their mail canvasses wide variety of topics and allows proposed and/or continuing information from the Census Bureau’s Business information for separate topics to be collections, as required by the Register. To be eligible for selection, an integrated to form a single and unified Paperwork Reduction Act of 1995, establishment will be required to satisfy database so that the interaction between Public Law 104–13 (44 U.S.C. the following conditions: (i) it must be tax, transfer, and other government and 3506(c)(2)(A)). classified in the retail trade or private policies can be examined. accommodation and food services DATES: Government domestic policy Written comments must be sector; (ii) it must be an active operating formulators depend heavily upon the submitted on or before March 30, 2001. establishment of a multi-establishment SIPP information concerning the ADDRESSES: Direct all written comments firm (i.e., a firm that operates at more distribution of income received directly to Madeleine Clayton, Departmental than one physical location), or it must as money or indirectly as in-kind Forms Clearance Officer, Department of be a single-establishment firm with benefits and the effect of tax and Commerce, Room 6086, 14th and payroll (i.e., a firm operating at only one transfer programs on this distribution. Constitution Avenue, NW, Washington, physical location); and (iii) it must be They also need improved and expanded DC 20230 (or via the Internet at located in one of the 50 states or the data on the income and general [email protected]). District of Columbia. Mail selection economic and financial situation of the FOR FURTHER INFORMATION CONTACT: procedures will distinguish the U.S. population. The SIPP has provided Requests for additional information or following groups of establishments:
VerDate 11
1. Establishments of Multi- statistics by geographic area. When we Respondent’s Obligation: Mandatory. Establishment Firms find such a deficiency, we will mail the Legal Authority: Title 13, USC, Selection procedures will assign all firm a census classification form. We Sections 131 and 224. estimate that the 2002 Economic Census active operating establishments of IV. Request for Comments multi-establishment firms to the mail mail canvasses for the retail trade and Comments are invited on: (a) Whether component of the potential respondent accommodation and food services the proposed collection of information universe. We estimate that the 2002 sectors will include approximately Economic Census mail canvasses for the 387,000 small single-establishment is necessary for the proper performance retail trade and accommodation and firms that receive these forms. of the functions of the agency, including whether the information shall have food services sectors will include III. Data approximately 630,000 establishments practical utility; (b) the accuracy of the of multi-establishment firms. OMB Number: Not available. agency’s estimate of the burden Form Number: The 33 standard and (including hours and cost) of the 2. Single-Establishment Firms With seven classification forms used to proposed collection of information; (c) Payroll collect information from businesses in ways to enhance the quality, utility, and As an initial step in the selection these sectors of the Economic census are clarity of the information to be process, we will conduct a study of the tailored to specific business practices collected; and (d) ways to minimize the potential respondent universe. This and are too numerous to list separately burden of the collection of information study will produce a set of industry- in this notice. Requests for information on respondents, including through the specific payroll cutoffs that we will use on the proposed content of the forms use of automated collection techniques to distinguish large versus small single- should be directed to Fay Dorsett, U.S. or other forms of information establishment firms within each Census Bureau, Room 2679, Building 3, technology. industry or kind of business. This Washington DC 20233–0001 (301–457– Comments submitted in response to payroll size distinction will affect 2687 or via the Internet at this notice will be summarized and/or selection as follows: [email protected]). included in the request for OMB Type of Review: Regular review. approval of this information collection; (a) Large Single-Establishment Firms Affected Public: State or local they also will become a matter of public Selection procedures will assign governments, businesses, or other for record. single-establishment firms having profit or non-profit institutions or Dated: January 22, 2001. annualized payroll (from Federal organizations. Madeleine Clayton, administrative records) that equals or Estimated Number of Respondents: exceeds the cutoff for their industry to Departmental Forms Clearance Officer, Office Retail Trade (Standard Form)—838,000 of the Chief Information Officer. the mail component of the potential Retail Trade (Classification Form)— [FR Doc. 01–2514 Filed 1–29–01; 8:45 am] respondent universe. We estimate that 169,000 the 2002 Economic Census mail Accommodation and Food Services BILLING CODE 3510–07–P canvasses for the retail trade and (Standard Form)—386,000 accommodation and food services Accommodation and Food Services DEPARTMENT OF COMMERCE sectors will include approximately (Classification Form)—218,000 482,000 large single-establishment Total—1,611,000 Census Bureau firms. Estimated Time Per Response: (b) Small Single-Establishment Firms Retail Trade (Standard Form)—1.00 2002 Economic Census Covering the Wholesale Trade Sector Selection procedures will assign a hours Retail Trade (Classification Form)—.20 sample of single-establishment firms ACTION: hours Proposed collection, comment having annualized payroll below the request. cutoff for their industry to the mail Accommodation and Food Services component of the potential respondent (Standard Form)—.95 hours SUMMARY: The Department of universe. Sampling strata and Accommodation and Food Services Commerce, as part of its continuing corresponding probabilities of selection (Classification Form)—.20 hours effort to reduce paperwork and will be determined by a study of the Estimated Total Annual Burden respondent burden, invites the general potential respondent universe Hours: public and other Federal agencies to conducted shortly before mail selection Retail Trade (Standard Form)—838,000 take this opportunity to comment on operations begin. We estimate that the Retail Trade (Classification Form)— proposed and/or continuing information 2002 Economic Census mail canvasses 33,800 collections, as required by the for the retail trade and accommodation Accommodation and Food Services Paperwork Reduction Act of 1995, and food services sectors will include (Standard Form)—366,700 Public Law 104–13 (44 U.S.C. approximately 114,000 small single- Accommodation and Food Services 3506(c)(2)(A)). establishment firms selected in this (Classification Form)—43,600 Total—1,282,100 DATES: Written comments must be sample. submitted on or before April 2, 2001. All remaining single-establishment Estimated Total Annual Cost: ADDRESSES: Direct all written comments firms with payroll will be represented in Retail Trade (Standard Form)— to Madeleine Clayton, Departmental the census by data from Federal $12,838,160 Forms Clearance Officer, Department of administrative records. Generally, we Retail Trade (Classification Form)— Commerce, Room 6086, 14th and will not include these small employers $517,816 in the census mail canvasses. However, Accommodation and Food Services Constitution Avenue, NW, Washington, administrative records sometimes have (Standard Form)—$5,617,844 DC 20230 (or via the Internet at fundamental industry classification Accommodation and Food Services [email protected]). deficiencies that make them unsuitable (Classification Form)—$667,952 FOR FURTHER INFORMATION CONTACT: for use in producing detailed industry Total—$19,641,772 Requests for additional information or
VerDate 11
copies of the information collection 1. Establishments of Multi- collected; and (d) ways to minimize the instrument(s) and instructions should Establishment Firms burden of the collection of information be directed to Donna Hambric, U.S. Selection procedures will assign all on respondents, including through the Census Bureau, Room 2682, Building 3, active operating establishments of use of automated collection techniques Washington DC 20233–0001 (301–457– multi-establishment firms to the mail or other forms of information 2725 or via the Internet at component of the potential respondent technology. [email protected]). universe. We estimate that the 2002 Comments submitted in response to Economic Census mail canvass for the this notice will be summarized and/or SUPPLEMENTARY INFORMATION: wholesale trade sector will include included in the request for OMB I. Abstract approximately 124,800 establishments approval of this information collection; of multi-establishment firms. they also will become a matter of public The economic census, conducted record. under authority of Title 13, United 2. Single-Establishment Firms With Dated: January 22, 2001. Payroll States Code (USC), is the primary source Madeleine Clayton, of facts about the structure and Selection procedures will assign all Departmental Forms Clearance Officer, Office functioning of the Nation’s economy. single-establishment firms having of the Chief Information Officer. Economic statistics serve as part of the annualized payroll (from Federal [FR Doc. 01–2515 Filed 1–29–01; 8:45 am] framework for the national accounts and administrative records) to the mail BILLING CODE 3510–07–P provide essential information for component of the potential respondent government, business, and the general universe. We estimate that the 2002 public. Economic data are the Census Economic Census mail canvass for the DEPARTMENT OF COMMERCE Bureau’s primary program commitment wholesale trade sector will include during nondecennial census years. The approximately 355,200 establishments Census Bureau 2002 Economic Census covering the of single-establishment firms. 2002 Economic Census Construction wholesale trade sector (as defined by the III. Data North American Industry Classification Sector Refile Survey System (NAICS)) will measure the OMB Number: Not available. Form Number: The 40 standard forms ACTION: Proposed collection; comment economic activity of more than 480,000 request. establishments. The information used to collect information from collected will produce basic statistics by businesses in this sector of the SUMMARY: The Department of kind of business on the number of Economic Census are tailored to specific Commerce, as part of its continuing establishments, sales, payroll, and business practices and are too numerous effort to reduce paperwork and employment. It will also yield a variety to list separately in this notice. Requests respondent burden, invites the general of subject statistics, including sales by for information on the proposed content public and other Federal agencies to commodity line, sales by class of of the forms should be directed to take this opportunity to comment on customer, and other industry-specific Donna Hambric, U.S. Census Bureau, proposed and/or continuing information measures. Primary strategies for Room 2682, Building 3, Washington DC collections, as required by the reducing burden in Census Bureau 20233–0001 (301–457–2725 or via the Paperwork Reduction Act of 1995, economic data collections are to Internet at Public Law 104–13 (44 U.S.C. increase electronic reporting through [email protected]). 3506(c)(2)(A)). Type of Review: Regular review. broader use of computerized self- Affected Public: State or local DATES: Written comments must be administered census questionnaires, on- governments, businesses, or other for submitted on or before April 2, 2001. line questionnaires, spreadsheet profit or non-profit institutions or ADDRESSES: Direct all written comments reporting, and other electronic data organizations. to Madeleine Clayton, Departmental collection methods. Estimated Number of Respondents: Forms Clearance Officer, Department of II. Method of Collection 480,000. Commerce, Room 6086, 14th and Estimated Time Per Response: 1.50 Constitution Avenue, NW., Washington, Mail Selection Procedures hours. DC 20230 (or via the Internet at Estimated Total Annual Burden [email protected]). The wholesale trade sector of the Hours: 720,000 hours. FOR FURTHER INFORMATION CONTACT: economic census will select Estimated Total Annual Cost: establishments for its mail canvass from $11,030,400. Requests for additional information or the Census Bureau’s Business Register. Respondent’s Obligation: Mandatory. copies of the information collection To be eligible for selection, an Legal Authority: Title 13, U.S.C., instrument(s) and instructions should establishment will be required to satisfy Sections 131 and 224. be directed to James E. Kristoff, Bureau the following conditions: (i) it must be of the Census, Room 2129, Building 4, classified in the wholesale trade sector; IV. Request for Comments Washington, DC 20233–6100, and 301– (ii) it must be an active operating Comments are invited on: (a) Whether 457–4631 or email at establishment of a multi-establishment the proposed collection of information [email protected]. firm (i.e., a firm that operates at more is necessary for the proper performance SUPPLEMENTARY INFORMATION: than one physical location), or it must of the functions of the agency, including be a single-establishment firm with whether the information shall have I. Abstract payroll (i.e., a firm operating at only one practical utility; (b) the accuracy of the The Census Bureau is the preeminent physical location); and (iii) it must be agency’s estimate of the burden collector of timely, relevant and quality located in one of the 50 states or the (including hours and cost) of the data about the people and economy of District of Columbia. Mail selection proposed collection of information; (c) the United States. Economic data are the procedures will distinguish the ways to enhance the quality, utility, and Census Bureau’s primary program following groups of establishments: clarity of the information to be commitment during non-decennial
VerDate 11
census years. The economic census, Estimated Total Annual Burden copies of the information collection conducted under authority of Title 13 Hours: 12,500 hours. instrument(s) and instructions should U.S.C., is the primary source of facts Estimated Total Annual Cost: be directed to James E. Kristoff, Bureau about the structure and functioning of $190,000. of the Census, Room 2129, Building 4, Washington, DC 20233–6100, and 301– the Nation’s economy and features IV. Request for Comments unique industry and geographic detail. 457–4631 or email at Economic census statistics serve as part Comments are invited on: (a) Whether [email protected]. the proposed collection of information of the framework for the national SUPPLEMENTARY INFORMATION: accounts and provide essential is necessary for the proper performance information for government, business of the functions of the agency, including I. Abstract and the general public. whether the information shall have The Census Bureau is the preeminent The 2002 North American Industry practical utility; (b) the accuracy of the collector of timely, relevant and quality Classification System (NAICS) will agency’s estimate of the burden data about the people and economy of introduce a major revision to the (including hours and cost) of the the United States. Economic data are the construction sector. In order to update proposed collection of information; (c) Census Bureau’s primary program the 2002 Economic Census mailing list, ways to enhance the quality, utility, and commitment during non-decennial the Census Bureau must collect clarity of the information to be census years. The economic census, additional information from selected collected; and (d) ways to minimize the conducted under authority of Title 13 construction businesses. This burden of the collection of information U.S.C., is the primary source of facts information will permit us to introduce on respondents, including through the about the structure and functioning of an efficient sample, minimizing the use of automated collection techniques the Nation’s economy and features reporting burden we impose on or other forms of information unique industry and geographic detail. construction establishments. technology. Economic census statistics serve as part These changes to NAICS for the Comments submitted in response to of the framework for the national construction sector will be implemented this notice will be summarized and/or accounts and provide essential in the 2002 Economic Census. The included in the request for OMB information for government, business failure to collect this additional approval of this information collection; and the general public. classification information prior to the they also will become a matter of public This data collection, Form NC–9923 is economic census would substantially record. designed to collect information needed increase the number of sampled Dated: January 23, 2001. to assign an appropriate NAICS industry construction establishments, result in Madeleine Clayton, classification. This form will be mailed to: (1) establishments with a significant many businesses receiving the incorrect Departmental Forms Clearance Officer. form, and jeopardize the Census amount of receipts but without payroll, [FR Doc. 01–2525 Filed 1–29–01; 8:45 am] (2) new businesses with large amounts Bureau’s ability to implement NAICS in BILLING CODE 3510–07–P the economic census. of payroll but with little or no industry classification information, and (3) II. Method of Collection establishments misclassified as farms DEPARTMENT OF COMMERCE The Census Bureau will mail out but reporting large amounts of non-farm Form NC–9926 to the following groups Census Bureau payroll. Establishments with significant of establishments: (1) any single unit amounts of receipts but without payroll construction establishment that is only 2002 Economic Census General Refile are normally excluded from the partially coded or (2) any single unit Survey economic census. This data collection construction establishment that is will not only determine accurate NAICS currently classified in a NAICS industry ACTION: Proposed collection; comment classifications, but will also identify that will be split into two or more request. whether or not these establishments NAICS industries for the 2002 Economic have paid employees. SUMMARY: The Department of New businesses are assigned industry Census. Commerce, as part of its continuing classifications by the Social Security The form will contain a list of codes effort to reduce paperwork and Administration (SSA). However, many and descriptions describing diverse respondent burden, invites the general of these businesses do not provide construction activities. Respondents public and other Federal agencies to sufficient information to assign an simply check the box that best describes take this opportunity to comment on industry code. This refile operation will their business activity or describe their proposed and/or continuing information ensure a proper NAICS classification business activity if no box is collections, as required by the assignment, ensuring that an appropriate. Paperwork Reduction Act of 1995, appropriate economic census III. Data Public Law 104–13 (44 U.S.C. questionnaire is mailed to all 3506(c)(2)(A)). businesses. OMB Number: Not Available. Finally, establishments currently Form Number: NC–9926. DATES: Written comments must be submitted on or before April 2, 2001. classified as farms and reporting Type of Review: Regular Review. substantial amounts of non-farm payroll ADDRESSES: Direct all written comments Affected Public: Businesses or Other may be misclassified and excluded from to Madeleine Clayton, Departmental for Profit Organizations, Small the 2002 Economic Census. This refile Forms Clearance Officer, Department of Businesses or Organizations, Non-profit operation will identify the appropriate Commerce, Room 6086, 14th and Institutions, and State or Local NAICS classification for these Constitution Avenue, NW., Washington, Governments. establishments and determine whether DC 20230 (or via the Internet at Estimated Number of Respondents: or not these establishments are in scope [email protected]). 150,000. of the 2002 Economic Census. Estimated Time Per Response: 5 FOR FURTHER INFORMATION CONTACT: In addition to the NC–9923 form, minutes. Requests for additional information or these establishments will also receive a
VerDate 11
new Company Affiliation/Locations of (including hours and cost) of the present oral statements to the Operation Flyer. This flyer will allow proposed collection of information; (c) Committee. The public may submit the Census Bureau to identify ways to enhance the quality, utility, and written statements at any time before or companies that operate multiple clarity of the information to be after the meeting. However, to facilitate locations prior to the 2002 Economic collected; and (d) ways to minimize the distribution of public presentation Census mailout. This form will be tested burden of the collection of information materials to the Committee members, and evaluated and, if effective, will be on respondents, including through the the Committee suggests that presenters used in the 2002 Economic Census. use of automated collection techniques forward the public presentation The Census Bureau is not requesting or other forms of information materials prior to the meeting date to any economic data in this collection. technology. the following address: Ms. Lee Ann The collection of this NAICS Comments submitted in response to Carpenter, OSIES/EA/BXA MS: 3876, information will greatly reduce this notice will be summarized and/or U.S. Department of Commerce, 14th St. processing costs and ease reporting included in the request for OMB & Constitution Ave., N.W., Washington, burden for the 2002 Economic Census approval of this information collection; D.C. 20230. data collection. they also will become a matter of public The Assistant Secretary for record. Administration, with the concurrence of II. Method of Collection Dated: January 23, 2001. the General Counsel, formally The Census Bureau will mail out Madeleine Clayton, determined on December 11, 1999, Form NC–9923 to the following groups: pursuant to section 10(d) of the Federal Departmental Forms Clearance Officer. (1) large establishments without a Advisory Committee Act, as amended, detailed NAICS classification, (2) [FR Doc. 01–2526 Filed 1–29–01; 8:45 am] that the series of meetings of the establishments with significant receipts BILLING CODE 3510–07–P Committee and of any Subcommittees but without payroll, and (3) thereof, dealing with the classified establishments currently classified as materials listed in 5 U.S.C., 552b(c)(1) DEPARTMENT OF COMMERCE farms with substantial amounts of non- shall be exempt from the provisions farm payroll. Bureau of Export Administration relating to public meetings found in The form will contain a list of codes section 10(a)(1) and 10(a)(3), of the and descriptions describing business Sensors and Instrumentation Federal Advisory Committee Act. The activities. Respondents simply check Technical Advisory Committee; Notice remaining series of meetings or portions the box that best describes their of Partially Closed Meeting thereof will be open to the public. business activity or describe their A copy of the Notice of Determination business activity if no box is The Sensors and Instrumentation to close meetings or portions of appropriate. Technical Advisory Committee will meetings of the Committee is available The Company Affiliation flyer will meet on February 13, 2001, 9:30 a.m., in for public inspection and copying in the ask the respondent to indicate if they the Herbert C. Hoover Building, Room Central Reference and Records are part of or own another company. If 3884, 14th Street between Constitution Inspection Facility, Room 6020, U.S. the respondent indicates it is part of or and Pennsylvania Avenues, N.W., Department of Commerce, Washington, owns another company, the Census Washington, D.C. The Committee D.C. 20230. For more information Bureau will link those establishments advises the Office of the Assistant contact Lee Ann Carpenter on (202) prior to the mailout of the 2002 Secretary for Export Administration on 482–2583. Economic Census. technical questions that affect the level of export controls applicable to sensors Dated: January 23, 2001. III. Data and instrumentation equipment and Lee Ann Carpenter, OMB Number: Not Available. technology. Committee Liaison Officer. Form Number: NC–9923, Company [FR Doc. 01–2533 Filed 1–29–01; 8:45 am] Agenda Affiliation/Locations of Operation Flyer. BILLING CODE 3510–JT–M Type of Review: Regular Review. Public Session Affected Public: Businesses or Other for Profit Organizations, Small 1. Opening remarks by the Chairman. DEPARTMENT OF COMMERCE Businesses or Organizations, Non-profit 2. Follow-up from previous meeting. Institutions, State or Local 3. Laser topics. Foreign-Trade Zones Board 4. Infrared Imaging topics. Governments, and Farms. [Docket 5–2001] Estimated Number of Respondents: 5. Bureau of Export Administration organization. 200,000. Foreign-Trade Zone 26—Atlanta, 6. Presentation of papers or comments Estimated Time Per Response: 10 Georgia; Application for Subzone, by the public. minutes. Roper Corporation (Home Appliances), 7. New business. Estimated Total Annual Burden LaFayette, Georgia Hours: 33,333 hours. Closed Session Estimated Total Annual Cost: An application has been submitted to $506,662 8. Discussion of matters properly the Foreign-Trade Zones Board (the classified under Executive Order Board) by the Georgia Foreign-Trade IV. Request for Comments 12958, dealing with the U.S. export Zone, Inc., grantee of FTZ 26, requesting Comments are invited on: (a) Whether control program and strategic special-purpose subzone status for the the proposed collection of information criteria related thereto. manufacturing and warehousing is necessary for the proper performance A limited number of seats will be facilities of Roper Corporation (Roper), of the functions of the agency, including available during the public session of located in LaFayette, Georgia. The whether the information shall have the meeting. Reservations are not application was submitted pursuant to practical utility; (b) the accuracy of the accepted. To the extent that time the provisions of the Foreign-Trade agency’s estimate of the burden permits, members of the public may Zones Act, as amended (19 U.S.C. 81a–
VerDate 11
81u), and the regulations of the Board DEPARTMENT OF COMMERCE DEPARTMENT OF COMMERCE (15 CFR part 400). It was formally filed on January 22, 2001. Foreign-Trade Zones Board Foreign-Trade Zones Board The Roper facility (116 acres, 1,650 [Docket 3–2001] employees), is located at 1507 [Order No. 1142] Broomtown Road, Lafayette, Georgia Foreign-Trade Zone 49D—Newark and Approval for Expanded Manufacturing Elizabeth, New Jersey; Expansion of (Walker County). The facility is used for Authority (Automotive Lighting Facilities and Manufacturing the manufacturing and warehousing of Products) Foreign-Trade Subzone Authority—Subzone 49D, Merck & Co., various types of kitchen ranges (HTS 146A, North American Lighting, Inc., Inc. Plant (Pharmaceuticals), Rahway, 8516.60, duty-free). Components and Flora and Salem, Illinois New Jersey materials sourced from abroad (representing about 20% of all parts An application has been submitted to Pursuant to its authority under the consumed in manufacturing) include: the Foreign-Trade Zones Board (the Foreign-Trade Zones Act of June 18, control panels, connectors, microwave Board) by the Port Authority of New 1934, as amended (19 U.S.C. 81a–81u), oven modules, hinges, and York and New Jersey, grantee of FTZ49, the Foreign-Trade Zones Board (the thermocouples (HTS 8302.10, 8516.50, pursuant to § 400.32(b)(1) of the Board’s Board) adopts the following Order: 8536.69, 8537.10 and 9025.80, duty rate regulations (15 CFR part 400), requesting on behalf of Merck & Co., Inc. ranges from 1.6% to 3.5%). Whereas, the Bi-State Authority, grantee of Foreign-Trade Zone 146 (Merck), to add capacity and to expand FTZ procedures would exempt Roper (Lawrence County, Illinois), has the scope of manufacturing authority from Customs duty payments on the requested authority on behalf of North under zone procedures at Subzone 49D, foreign components used in export American Lighting, Inc. (NAL), operator at the Merck pharmaceutical plant in production. On its domestic sales, Roper of FTZ 146A, at the NAL automotive Rahway, New Jersey. It was formally would be able to choose the duty rates filed on January 18, 2001. lighting products manufacturing during Customs entry procedures that Subzone 49D was approved by the facilities in Flora and Salem, Illinois, to apply to finished kitchen ranges (duty- Board in 1995 at a single site (200 acres, expand the scope of FTZ authority to free) for the foreign inputs noted above. 2,500,000 sq. ft., 154 buildings) located include new manufacturing capacity The request indicates that the savings at 126 Lincoln Avenue, in Rahway under FTZ procedures and requesting from FTZ procedures would help (Union County), New Jersey, some 10 authority to expand the boundaries of improve the plant’s international miles south of Newark. The facility Subzone 146A (FTZ Doc. 22–2000, filed competitiveness. (4,100 employees) is used to produce a 5–30–2000); range of human health products. Merck In accordance with the Board’s Whereas, notice inviting public is now proposing to add 8.6 acres and regulations, a member of the FTZ staff comment was given in the Federal to expand existing buildings by has been appointed examiner to Register (65 FR 35603, 6–5–00); 2,540,370 sq. ft. The proposed subzone investigate the application and report to would then include 154 buildings the Board. Whereas, the Board adopts the consisting of 5,040,370 sq. ft. (a 102% findings and recommendations of the Public comment on the application is increase) on 208.64 acres. examiner’s report, and finds that the invited from interested parties. The application also requests to requirements of the FTZ Act and the Submissions (original and 3 copies) expand the scope of authority for Board’s regulations are satisfied, and shall be addressed to the Board’s manufacturing activity conducted under that approval of the application is in the FTZ procedures at Subzone 49D to Executive Secretary at the address public interest; include additional general categories of below. The closing period for their inputs that have recently been approved receipt is April 2, 2001. Rebuttal Now therefore, the Board hereby approves the request, subject to the FTZ by the Board for other pharmaceutical comments in response to material plants. They include chemically pure submitted during the foregoing period Act and the Board’s regulations, including Section 400.28. sugars, empty capsules for may be submitted during the subsequent pharmaceutical use, protein 15-day period to April 16, 2001. Signed at Washington, DC, this 17th day of concentrates, natural magnesium A copy of the application and the January 2001. phosphates and carbonates, gypsum, accompanying exhibits will be available Troy H. Cribb, anhydrite and plasters, petroleum jelly, for public inspection at each of the Assistant Secretary of Commerce for Import paraffin and waxes, sulfuric acid, other following locations: Administration, Alternate Chairman, Foreign- inorganic acids or compounds of U.S. Export Assistance Center, Marquis Two Trade Zones Board. nonmetals, ammonia, zinc oxide, Tower, Suite 200, 285 Peachtree Center Attest: titanium oxides, fluorides, chlorates, Avenue, NE, Atlanta, GA 30303–1229. sulfates, salts of oxometallic acids, Office of the Executive Secretary, Foreign- Dennis Puccinelli, radioactive chemical elements, Trade Zones Board, Room 4008, U.S. Executive Secretary. compounds of rare earth metals, acyclic Department of Commerce, 14th and [FR Doc. 01–2532 Filed 1–29–01; 8:45 am] hydrocarbons, derivatives of phenols or peroxides, acetals and hemiacetals, Pennsylvania Avenue, NW., Washington, BILLING CODE 3510–DS–P DC 20230. phosphoric esters and their salts, diazo- compounds, glands for therapeutic uses, Dated: January 22, 2001. wadding, gauze and bandages, Dennis Puccinelli, pharmaceutical glaze, hair preparations, Executive Secretary. lubricating preparations, albumins, [FR Doc. 01–2530 Filed 1–29–01; 8:45 am] prepared glues and adhesives, catalytic BILLING CODE 3510–DS–P preparations, diagnostic or laboratory reagents, prepared binders, acrylic
VerDate 11
polymers, self-adhesive plates and DEPARTMENT OF COMMERCE reagents, prepared binders, acrylic sheets, other articles of vulcanized polymers, self-adhesive plates and rubber, plastic cases, cartons, boxes, Foreign-Trade Zones Board sheets, other articles of vulcanized printed books, brochures and similar [Docket 4–2001] rubber, plastic cases, cartons, boxes, printed matter, carboys, bottles, and printed books, brochures and similar flasks, stoppers, caps, and lids, Foreign-Trade Zone 24—Wilkes-Barre/ printed matter, carboys, bottles, and aluminum foil, tin plates and sheets, Scranton, Pennsylvania; Expansion of flasks, stoppers, caps, and lids, taps, cocks and valves, and medical Facilities and Manufacturing aluminum foil, tin plates and sheets, instruments and appliances. Authority—Subzone 24B, Merck & Co., taps, cocks and valves, and medical Inc. Plant (Pharmaceuticals), Riverside, instruments and appliances. FTZ procedures would exempt Merck PA from Customs duty payments on the FTZ procedures would exempt Merck foreign components used in export An application has been submitted to from Customs duty payments on the activity. On its domestic sales, the the Foreign-Trade Zones Board (the foreign components used in export company would be able to elect the duty Board) by the Eastern Distribution activity. On its domestic sales, the rates that applies to finished products Center, Inc., grantee of FTZ 24, pursuant company would be able to elect the duty (primarily duty-free for finished to § 400.32(b)(1) of the Board’s rates that applies to finished products pharmaceuticals and up to 14.2% for regulations (15 CFR part 400), (primarily duty-free for finished requesting on behalf of Merck & Co., Inc. intermediates) for the foreign materials pharmaceuticals and up to 14.2% for (Merck), to add capacity and to expand noted above (duty rates ranging from intermediates) for the foreign materials the scope of manufacturing authority duty-free to 20%). The application under zone procedures at Subzone 24B, noted above (duty rates ranging from indicates that the expanded use of FTZ at the Merck pharmaceutical plant in duty-free to 20%). The application procedures will help improve Merck’s Riverside, Pennsylvania. It was formally indicates that the expanded use of FTZ international competitiveness. filed on January 18, 2001. procedures will help improve Merck’s The application has requested review Subzone 24B was approved by the international competitiveness. under § 400.32(b)(1) of the FTZ Board Board in 1994 at a single site (364 acres, The application has requested review regulations on the basis that the 650,000 sq. ft., 68 bldgs.) located at First under § 400.32(b)(1) of the FTZ Board proposed activity is the same, in terms Street and Avenue C in Riverside regulations on the basis that the of products involved, to activity (Northumberland County), proposed activity is the same, in terms recently approved by the Board and Pennsylvania, some 60 miles southeast of products involved, to activity similar in circumstances. of Scranton. The facility (620 recently approved by the Board and employees) is used to produce a range similar in circumstances. Public comment on the application is of human health products. Merck is now invited from interested parties. proposing to add 50 buildings and to Public comment on the application is Submissions (original and three copies) expand existing buildings for a total invited from interested parties. shall be addressed to the Board’s increase of 592,592 sq. ft. The proposed Submissions (original and three copies) Executive Secretary at the address subzone would then include 118 bldgs. shall be addressed to the Board’s below. The closing period for their consisting of 1,242,592 sq. ft. (a 91% Executive Secretary at the address receipt is March 1, 2001. Rebuttal increase) on 364 acres. below. The closing period for their comments in response to material The application also requests to receipt is March 1, 2001. Rebuttal submitted during the foregoing period expand the scope of authority for comments in response to material may be submitted during the subsequent manufacturing activity conducted under submitted during the foregoing period 15-day period (to March 16, 2001). FTZ procedures at Subzone 24B to may be submitted during the subsequent include additional general categories of 15-day period (to March 16, 2001). Copies of the applications will be inputs that have recently been approved available for public inspection at the by the Board for other pharmaceutical Copies of the applications will be following locations: plants. They include chemically pure available for public inspection at the following locations: U.S. Department of Commerce, Export sugars, empty capsules for Assistance Center, One Gateway pharmaceutical use, protein U.S. Department of Commerce, Export Center, 9th floor, Newark, New Jersey concentrates, natural magnesium Assistance Center, One Commerce 07102. phosphates and carbonates, gypsum, Square, 228 Walnut St., 850, P.O. Box anhydrite and plasters, petroleum jelly, Office of the Executive Secretary, 11698, Harrisburg, Pennsylvania paraffin and waxes, sulfuric acid, other 17108–1698. Foreign-Trade Zones Board, Room inorganic acids or compounds of 4008, U.S. Department of Commerce, nonmetals, ammonia, zinc oxide, Office of the Executive Secretary, 14th Street & Pennsylvania Avenue, titanium oxides, fluorides, chlorates, Foreign-Trade Zones Board, Room NW, Washington, DC 20230. sulfates, salts of oxometallic acids, 4008, U.S. Department of Commerce, Dated: January 18, 2001. radioactive chemical elements, 14th Street & Pennsylvania Avenue, NW, Washington, DC 20230. Dennis Puccinelli, compounds of rare earth metals, acyclic hydrocarbons, derivatives of phenols or Executive Secretary. Dated: January 18, 2001. peroxides, acetals and hemiacetals, Dennis Puccinelli, [FR Doc. 01–2512 Filed 1–29–01; 8:45 am] phosphoric esters and their salts, diazo- BILLING CODE 3510–DS–P compounds, glands for therapeutic uses, Executive Secretary. wadding, gauze and bandages, [FR Doc. 01–2513 Filed 1–29–01; 8:45 am] pharmaceutical glaze, hair preparations, BILLING CODE 3510–DS–P lubricating preparations, albumins, prepared glues and adhesives, catalytic preparations, diagnostic or laboratory
VerDate 11
DEPARTMENT OF COMMERCE would be made to the Board on a case- Board (FTZ Docket 8–2000, filed 3/6/00 by-case basis. and amended on 8/16/00), requesting Foreign-Trade Zones Board In accordance with the Board’s the establishment of a foreign-trade zone regulations, a member of the FTZ Staff at sites in Waco, Texas, adjacent to the [Docket 6–2001] has been designated examiner to Dallas/Fort Worth Customs port of investigate the application and report to entry; Proposed Foreign-Trade Zone— the Board. Whereas, notice inviting public Amarillo, Texas, Area Application and As part of the investigation, the comment has been given in the Federal Public Hearing Commerce examiner will hold a public Register (65 FR 13938, 3/15/00 and 65 An application has been submitted to hearing on February 22, 2001, at 9:00 FR 51796, 8/25/00); and, the Foreign-Trade Zones (FTZ) Board a.m., Kritser Conference Room, Second Whereas, the Board adopts the Level, Amarillo International Airport (the Board) by the City of Amarillo, findings and recommendations of the Terminal, 10801 Airport Boulevard, Texas, to establish a general-purpose examiner’s report, and finds that the Amarillo, Texas 79111. requirements of the FTZ Act and the foreign-trade zone at sites in the Public comment on the application is Amarillo, Texas, area, within/adjacent Board’s regulations are satisfied, and invited from interested parties. that approval of the application is in the to the Amarillo Customs port of entry. Submissions (original and 3 copies) The application was submitted pursuant public interest; shall be addressed to the Board’s Now, Therefore, the Board hereby to the provisions of the FTZ Act, as Executive Secretary at the address amended (19 U.S.C. 81a–81u), and the grants to the Grantee the privilege of below. The closing period for their establishing a foreign-trade zone, regulations of the Board (15 CFR Part receipt is April 2, 2001. Rebuttal 400). It was formally filed on January designated on the records of the Board comments in response to material as Foreign-Trade Zone No. 246, at the 22, 2001. The applicant is authorized to submitted during the foregoing period make the proposal under Texas Revised sites described in the application, as may be submitted during the subsequent amended, and subject to the Act and the Civil Statutes Article 1446.01. 15-day period (to April 16, 2001). The proposed new zone would Board’s regulations, including Section A copy of the application and 400.28. consist of sites serving Amarillo and the accompanying exhibits will be available Texas High Plains region: Site 1 at the during this time for public inspection at Signed at Washington, DC, this 17th day of 4,000-acre Amarillo International the following locations: January 2001. Foreign-Trade Zones Board. Airport and adjacent industrial park Office of the Assistant City Manager, property, 10801 Airport Boulevard, City Hall, City of Amarillo, 509 S.E. Norman Y. Mineta, Amarillo; Site 2 (6 acres)—Panhandle Seventh Avenue, Amarillo, TX Secretary of Commerce, Chairman and Container Service Center, 1201 South 79105–1971, Office of the Executive Executive Officer. Johnson Street, Amarillo; Site 3 (345 Secretary, Foreign-Trade Zones Board, Attest: acres)—Hutchinson County Airport and Room 4008, U.S. Department of Dennis Puccinelli, 1 industrial park, ⁄4 mile north of the City Commerce, 14th and Pennsylvania Executive Secretary. of Borger; Site 4 (68 acres)—Ferguson Avenue, NW, Washington, DC 20230 [FR Doc. 01–2531 Filed 1–29–01; 8:45 am] Business Park, 650 Wilson Avenue, BILLING CODE 3510–DS–P Dumas; Site 5 (95 acres)—Industrial Dated: January 23, 2001. Park East, State Highway 60, Pampa; Dennis Puccinelli, Site 6 (213 acres)—PEDCO Park, Tying Executive Secretary. DEPARTMENT OF COMMERCE Avenue, Pampa; Site 7 (.52 acres)— [FR Doc. 01–2529 Filed 1–29–01; 8:45 am] Donley site, 1⁄2 block from State BILLING CODE 3510–DS–P International Trade Administration Highway 87, Tulia; Site 8 (6 acres)— [A–580–815 and A–580–816] RCD site, adjacent to the Burlington DEPARTMENT OF COMMERCE Northern Santa Fe Railroad in the 1000 Certain Cold-Rolled Carbon Steel Flat block of N.W. 6th , Tulia; Site 9 (10 Foreign-Trade Zones Board Products and Certain Corrosion- acres)—Anderson site, State Highway Resistant Carbon Steel Flat Products 87, Tulia; and, Site 10 (3 acres)—Bivens [Order No. 1139] From Korea; Extension of Time Limit site, I–27 near the intersection of State Highway 86, Tulia. The proposed zone Grant of Authority; Establishment of a AGENCY: Import Administration, project represents a joint effort by the Foreign-Trade Zone, Waco, Texas International Trade Administration, Department of Commerce. City and the Amarillo Economic Pursuant to its authority under the Foreign- Development Corporation to further Trade Zones Act of June 18, 1934, as ACTION: Notice of extension of time promote trade and economic amended (19 U.S.C. 81a–81u), the Foreign- limit. development within Amarillo and the Trade Zones Board (the Board) adopts the surrounding High Plains Region. The following Order: SUMMARY: The Department of Commerce (the Department) is extending the time facilities are publicly-owned, except for Whereas, the Foreign-Trade Zones Act limit for the preliminary results of the Site 2 and a few parcels within Site 1, provides for ‘‘* * * the establishment antidumping duty administrative and Site 3 is part of a Borger/ * * * of foreign-trade zones in ports of Hutchinson County Enterprise Zone. entry of the United States, to expedite reviews of Certain Cold-Rolled Carbon The application indicates a need for and encourage foreign commerce, and Steel Flat Products & Certain Corrosion- foreign-trade zone services in the for other purposes,’’ and authorizes the Resistant Carbon Steel Flat Products Amarillo area and the Texas High Plains Foreign-Trade Zones Board to grant to from Korea. These reviews cover the region. Several firms have indicated an qualified corporations the privilege of period August 1, 1999 through July 31, interest in using zone procedures for establishing foreign-trade zones in or 2000. warehousing/distribution activities. adjacent to U.S. Customs ports of entry; EFFECTIVE DATE: January 30, 2001. Specific manufacturing approvals are Whereas, the City of Waco, Texas (the FOR FURTHER INFORMATION CONTACT: not being sought at this time. Requests Grantee), has made application to the Marlene Hewitt or Jim Doyle, Office of
VerDate 11
AD/CVD Enforcement, Group III, Import within 120 days after the date on which Dated: January 22, 2001. Administration, International Trade the preliminary determination is Melissa G. Skinner, Administration, U.S. Department of published. However, if it is not Acting Deputy Assistant Secretary for Import Commerce, 14th Street and Constitution practicable to complete the review Administration. Avenue, NW., Washington, DC; within these time periods, section [FR Doc. 01–2528 Filed 1–29–01; 8:45 am] telephone (202) 482–1385 or 482–0159, 751(a)(3)(A) of the Act allows the BILLING CODE 3510–DS–P respectively. Department to extend the time limit for SUPPLEMENTARY INFORMATION: Due to the the preliminary determination to a complexity of issues involved in these maximum of 365 days and for the final DEPARTMENT OF COMMERCE cases, it is not practicable to complete determination to 180 days (or 300 days International Trade Administration these reviews within the original time if the Department does not extend the limit. The Department is extending the time limit for the preliminary (A–475–818, A–489–805) time limit for completion of the determination) from the date of preliminary results from May 3, 2001 Certain Pasta From Italy and Turkey: publication of the preliminary Extension of Preliminary Results of until August 31, 2001, in accordance determination. with section 751(a)(3)(A) of the Tariff Antidumping Duty Administrative Act of 1930, as amended. See Background Reviews memorandum to Joseph A. Spetrini AGENCY: On July 7, 2000, the Department Import Administration, from Edward Yang regarding the International Trade Administration, published a notice of initiation of extension of the case deadline. The time Department of Commerce. administrative review of the limit for the final results would remain EFFECTIVE DATE: January 30, 2001. at 120 days after the preliminary results antidumping duty order on DRAMs FOR FURTHER INFORMATION CONTACT: are issued. This extension is in from Korea, covering the period May 1, 1999, through April 30, 2000 (65 FR Cindy Lai Robinson at (202) 482–3797, accordance with section 751(a)(3)(A) of Office of AD/CVD Enforcement VI, 131). the Tariff Act of 1930, as amended (19 Group II, Import Administration, U.S.C. Sec. 1675 (a)(3)(A)). The antidumping dumping duty order International Trade Administration, Dated: January 18, 2001. for DRAMs from Korea was revoked, U.S. Department of Commerce, 14th Joseph A. Spetrini, pursuant to the sunset procedures Street and Constitution Ave, NW, Deputy Assistant Secretary, Enforcement established by statute, effective January Washington, DC 20230. Group III. 1, 2000. See Dynamic Random Access Time Limits [FR Doc. 01–2511 Filed 1–29–01; 8:45 am] Memory Semiconductors (‘‘DRAMs’’) of BILLING CODE 3510–DS–P One Megabit and Above From the Statutory Time Limits Republic of Korea; Final Results of Full Section 751(a)(3)(A) of the Tariff Act Sunset Review and Revocation of Order, of 1930, as amended (the Act), requires DEPARTMENT OF COMMERCE 65 FR 1471366 (October 5, 2000). the Department to issue the preliminary However, we are conducting this review results of a review within 245 days after International Trade Administration to cover sales of the subject the last day of the anniversary month of [A–580–812] merchandise made in the United States an order/finding for which a review is by Hyundai and LG during the 8-month requested and the final results within Dynamic Random Access Memory period from May 1, 1999, until the 120 days after the date on which the Semiconductors of One Megabit or effective date of the revocation, preliminary results are published. Above (‘‘DRAMs’’) From the Republic December 31, 1999. The preliminary However, if it is not practicable to of Korea: Extension of Time Limit for results are currently due no later than complete the review within that time Preliminary Results of Antidumping January 30, 2001. period, section 751(a)(3)(A) of the Act Duty Administrative Review allows the Department to extend the Extension of Time Limit for Preliminary time limit for the preliminary results to AGENCY: Import Administration, Results of Review a maximum of 365 days and for the final International Trade Administration, results to 180 days (or 300 days if the Department of Commerce. We determine that it is not practicable Department does not extend the time EFFECTIVE DATE: January 30, 2001. to complete the preliminary results of limit for the preliminary results) from FOR FURTHER INFORMATION CONTACT: this review within the original time the date of the publication of the Paige Rivas at (202) 482–0651, AD/CVD limit. Therefore, the Department is preliminary results. extending the time limit for completion Enforcement, Office IV, Group II, Import Background Administration, International Trade of the preliminary results until no later Administration, U.S. Department of than May 30, 2001. See Decision On September 6, 2000, the Commerce, 14th Street and Constitution Memorandum from Thomas Futtner to Department published a notice of Ave, NW, Washington, DC 20230. Holly A. Kuga, dated January 10, 2001, initiation of the administrative reviews which is on file in the Central Records of the antidumping duty orders on Time Limits certain pasta from Italy and Turkey, Unit, Room B–099 of the main covering the period July 1, 1999 to June Statutory Time Limits Commerce building. We intend to issue 30, 2000 (65 FR 53980). The preliminary Section 751(a)(3)(A) of the Tariff Act the final results no later than 120 days results are currently due no later than of 1930, as amended (‘‘the Act’’), after the publication of the preliminary April 2, 2001. requires the Department to make a results notice. Extension of Preliminary Results of preliminary determination within 245 This extension is in accordance with Reviews days after the last day of the anniversary section 751(a)(3)(A) of the Act and 19 month of an order for which a review CFR 351.213(h)(2). We determine that it is not practicable is requested and a final determination to complete the preliminary results of
VerDate 11
these reviews within the original time Applicable Statute and Regulations India limits. Therefore, we are extending the Unless otherwise indicated, all The Indian CVD investigation is time limits for completion of the citations to the statute are references to extraordinarily complicated because of preliminary results until no later than the provisions effective January 1, 1995, the number of firms whose activities June 21, 2001. See Decision the effective date of the amendments must be investigated and the need to Memorandum from Melissa Skinner to made to the Tariff Act of 1930 (‘‘the determine the extent to which particular Holly A. Kuga, dated January 16, 2001, Act’’) by the Uruguay Round countervailable subsidies are used by which is on file in the Central Records Agreements Act. In addition, unless individual manufacturers, producers, Unit, B–099 of the main Commerce otherwise indicated, all citations to the and exporters in India. There are five Building. We intend to issue the final Department’s regulations are to the producers which exported subject results no later than 120 days after the regulations codified at 19 CFR Part 351 merchandise to the United States during publication of the notice of preliminary (2000). the period of investigation. In order to results of these reviews. determine the extent to which alleged This extension is in accordance with Extension of Due Date for Preliminary countervailable subsidies are used, a section 751(a)(3)(A) of the Act. Determinations large amount of information must be Dated: January 22, 2001. On December 4, 2000, the Department analyzed by the Department for these Melissa Skinner, of Commerce (‘‘the Department’’) five companies. Given the time Acting Deputy Assistant Secretary Import initiated the CVD investigations of constraints of this investigation, we Administration. certain hot-rolled carbon steel flat consider the information to be analyzed [FR Doc. 01–2517 Filed 1–29–01; 8:45 am] products from India, Indonesia, South for these five companies to be voluminous. BILLING CODE 3510–DS–P Africa, and Thailand. See Notice of Initiation of Countervailing Duty Indonesia Investigations: Certain Hot-Rolled The Indonesian CVD investigation is DEPARTMENT OF COMMERCE Carbon Steel Flat Products From extraordinarily complicated because of Argentina, India, Indonesia, South International Trade Administration the novelty of the issue presented and Africa, and Thailand, 65 FR 77580 the need to determine the extent to (December 12, 2000). Currently, the which particular countervailable [C–533–821, C–560–813, C–791–810, C–549– preliminary determinations are due no 818] subsidies are used by the producer of later than February 7, 2001. However, the subject merchandise and its pursuant to section 703(c)(1)(B) of the Certain Hot-Rolled Carbon Steel Flat subsidiary. Certain of the alleged Act, we have determined that these Products From India, Indonesia, South subsidies, including equity infusions, investigations are ‘‘extraordinarily Africa, and Thailand: Extension of were provided by the Government of complicated’’ and are therefore Time Limit for Preliminary Indonesia to a company affiliated with extending the due date for the Determinations in Countervailing Duty the producer of the subject preliminary determinations by 45 days Investigations merchandise, rather than to the to no later than March 26, 2001. producer itself. Thus, this case presents AGENCY: Import Administration, Under section 703(c)(1)(B), the an unusual set of facts which requires International Trade Administration, Department can extend the period for additional attention and analysis with Department of Commerce. reaching a preliminary determination respect to determining whether such ACTION: Notice of extension of time limit until not later than the 130th day after alleged subsidies provided a for preliminary determinations in the date on which the administering countervailable benefit to the producer countervailing duty investigations. authority initiates an investigation if: of the subject merchandise. (B) the administering authority South Africa SUMMARY: The Department of Commerce concludes that the parties concerned are is extending the time limit of the cooperating and determines that The South African investigation is preliminary determinations in the (i) the case is extraordinarily extraordinarily complicated because a countervailing duty (‘‘CVD’’) complicated by reason of number of the alleged programs are investigations of certain hot-rolled (I) the number and complexity of the complex or novel. For example, the carbon steel flat products from India, alleged countervailable subsidy Department must analyze complicated Indonesia, South Africa, and Thailand practices; equity financing issues, involving extensive and complex financial from February 7, 2001 until no later (II) the novelty of the issues analysis, as well as novel tax issues, than March 26, 2001. This extension is presented; including advanced depreciation. In made pursuant to section 703(c)(1)(B) of (III) the need to determine the extent the Tariff Act of 1930, as amended by addition, the Department is examining to which particular countervailable whether one of the companies was the Uruguay Round Agreements Act. subsidies are used by individual EFFECTIVE DATE: January 30, 2001. ‘‘creditworthy’’ when the government manufacturers, producers, and provided equity and loans to the FOR FURTHER INFORMATION CONTACT: Eric exporters; or company (i.e., whether a private Greynolds (India), at (202) 482–6071; (IV) the number of firms whose investor would have provided the types Stephanie Moore (Indonesia), at (202) activities must be investigated; and of financing that the government 482–3692; Sally Gannon (South Africa), (ii) additional time is necessary to provided) which demands that the at (202) 482–0162; and Dana make the preliminary determination. Department analyze significant amounts Mermelstein (Thailand), at (202) 482– Regarding the first requirement, we find of information. 1391, Import Administration, U.S. that in each case all concerned parties Department of Commerce, 14th Street are cooperating. Regarding the second Thailand and Constitution Avenue, N.W., requirement, we find that each of these The Thai CVD investigation is Washington, D.C. 20230. four cases is extraordinarily extraordinarily complicated because of SUPPLEMENTARY INFORMATION: complicated for the following reasons. the number and complexity of the
VerDate 11
alleged programs. The Department by the President and the Congress. The DEPARTMENT OF COMMERCE initiated on 20 programs in this agenda will include an Update on ATP, investigation, over half of which have an NRC Study Update, a report on the National Oceanic and Atmospheric never been investigated before. The Program Off Site, a report from the Administration alleged subsidies include the types of Economic Assessment Office, an Update [I.D. 012201C] programs that are among the most on New Competition, a discussion of complex ever handled by the Outreach Efforts, and a presentation on Southeast Region Logbook Family of Department, including government the University Parks Initiative. Forms direction of credit, debt restructuring, Discussions scheduled to begin at 8:30 transnational subsidies, and the AGENCY: National Oceanic and a.m. and to end at 9:30 a.m. and to begin Atmospheric Administration (NOAA) provision of electricity at preferential at 3:00 p.m. and to end at 4:00 p.m. on ACTION: Proposed information rates, among others. February 13, 2001, on the ATP budget Accordingly, we deem these collection; comment request. investigations to be extraordinarily issues and staffing of positions will be complicated and determine, with regard closed. SUMMARY: The Department of Commerce, as part of its continuing to the third requirement noted above, DATES: The meeting will convene effort to reduce paperwork and that additional time is necessary to February 13, 2001, at 8:30 a.m. and will respondent burden, invites the general make the preliminary determinations. adjourn at 4:00 p.m. on February 13, public and other Federal agencies to Therefore, pursuant to section 2001. 703(c)(1)(B) of the Act, we are take this opportunity to comment on postponing the preliminary ADDRESSES: The meeting will be held at proposed and/or continuing information determinations in these investigations to the National Institute of Standards and collections, as required by the no later than March 26, 2001. Technology, Employees Lounge, Paperwork Reduction Act of 1995, Pub. This notice is published pursuant to Gaithersburg, Maryland 20899. L. 104-13 (44 U.S.C. 3506(c)(2)(A)). section 703(c)(2) of the Act. DATES: Written comments must be FOR FURTHER INFORMATION CONTACT: submitted on or before April 2, 2001. Dated: January 18, 2001. Janet R. Russell, National Institute of ADDRESSES: Direct all written comments Troy H. Cribb, Standards and Technology, Assistant Secretary for Import to Madeleine Clayton, Departmental Gaithersburg, MD 20899–1004, Forms Clearance Officer, Department of Administration. telephone number (301) 975–2107. [FR Doc. 01–2516 Filed 1–29–01; 8:45 am] Commerce, Room 6086, 14th and Constitution Avenue NW, Washington BILLING CODE 3510–DS–P SUPPLEMENTARY INFORMATION: The Acting Assistant Secretary for DC 20230 (or via Internet at Administration, with the concurrence of [email protected]). DEPARTMENT OF COMMERCE the General Counsel, formally FOR FURTHER INFORMATION CONTACT: determined on January 22, 2001 that Requests for additional information or National Institute of Standards and portions of the meeting of the Advanced copies of the information collection Technology Technology Program Advisory instrument(s) and instructions should be directed to Roberts Sadler, Southeast Advanced Technology Program Committee which involve discussion of Regional Office, 9721 Executive Center Advisory Committee proposed funding of the Advanced Technology Program may be closed in Drive, St. Petersburg, FL 33702 (phone AGENCY: National Institute of Standards accordance with 5 U.S.C. 552b(c)(9)(B), 727-570-5326). and Technology, Department of because those portions of the meetings SUPPLEMENTARY INFORMATION: Commerce. will divulge matters the premature I. Abstract ACTION: Notice of partially closed disclosure of which would be likely to meeting. significantly frustrate implementation of The reporting burden for this family of forms is comprised of mandatory SUMMARY: Pursuant to the Federal proposed agency actions; and that portions of meetings which involve dealer reporting and dockside Advisory Committee Act, 5 U.S.C. app. interviews. Mandatory dealer reporting discussion of staffing of positions in 2, notice is hereby given that the is authorized under 50 CFR 622.5 and ATP may be closed in accordance with Advanced Technology Program 635.5 and is used to monitor Federally- 5 U.S.C. 552b(c)(6), because divulging Advisory Committee, National Institute mandated fishery quotas. Dockside of Standards and Technology (NIST), information discussed in those portions interviews with fishermen are used to will meet Tuesday, February 13, 2001, of the meetings is likely to reveal collect biological data from fishing trips. from 8:30 a.m. to 4:00 p.m. The information of a personal nature where These data consist of the measurement Advanced Technology Program disclosure would constitute a clearly and weights of fish, fishing effort and Advisory Committee is composed of unwarranted invasion of personal fishing area. eight members appointed by the privacy. II. Method of Collection Director of NIST; who are eminent in Dated: January 22, 2001. such fields as business, research, new Mandatory dealer reporting is Karen H. Brown, product development, engineering, accomplished with forms provided by education,and management consulting. Acting Director. the Science and Research Director, The purpose of this meeting is to review [FR Doc. 01–2527 Filed 1–29–01; 8:45 am] Southeast Fisheries Science Center. and make recommendations regarding BILLING CODE 3510–13–M Dockside interviews are conducted on general policy for the Advanced site and data are recorded by trained Technology Program (ATP), its Federal port agents. organization, its budget,and its programs within the framework of III. Data applicable national policies as set forth OMB Number: 0648-0013.
VerDate 11
Form Number: NOAA Form 88-30. DEPARTMENT OF COMMERCE DEPARTMENT OF COMMERCE Type of Review: Regular submission. National Oceanic and Atmospheric National Oceanic and Atmospheric Affected Public: Business and other Administration Administration for-profit organizations (seafood dealers and fishermen). Evaluation of State Coastal Availability of Seats for the Monterey Estimated Number of Respondents: Management Programs and National Bay National Marine Sanctuary 5,500. Estuarine Research Reserves Advisory Council AGENCY: National Marine Sanctuary Estimated Time Per Response: 15 AGENCY: Office of Ocean and Coastal Program (NMSP), National Ocean minutes for a dealer report in the golden Resource Management, National Ocean Service (NOS), National Oceanic and crab, red snapper, rock shrimp, and Service, National Oceanic and Atmospheric Administration, Puerto Rican prohibited coral fisheries; Atmospheric Administration (NOAA), Department of Commerce (DOC). 5 additional minutes to fax or mail a red DOC. snapper dealer report; 5 minutes for a ACTION: Notice and request for dealer report in the snowy grouper, ACTION: Notice of availability of final applications. tilefish, and mackerel fisheries; 5 evaluation findings. SUMMARY: The Monterey Bay National minutes for an annual vessel interview; Marine Sanctuary (MBNMS or 10 minutes for other interviews; 10 SUMMARY: Notice is hereby given of the availability of the final evaluation Sanctuary) is seeking applicants to fill minutes for a dealer and vessel report in vacant fishing (primary) and the eastern Gulf of Mexico runaround findings for the Delaware, Florida, Massachusetts, New Hampshire, conservation (alternate) seats on its gill mackerel fishery; 8 minutes for a Oregon, and Virginia Coastal Sanctuary Advisory Council (Council). dealer report for swordfish and sharks; Management Programs, and the Elkorn Applicants are chosen based upon their 17 minutes for a swordfish importer Slough (California), Narragansett Bay particular expertise and experience in report; and 4.5 minutes for a wreckfish (Rhode Island), Sapelo Island (Georgia), relation to the seat for which they are dealer report. and Tijuana River (California) National applying; community and professional Estimated Total Annual Burden Estuarine Research Reserves (NERRs). affiliations; philosophy regarding the Hours: 3,256. Sections 312 and 315 of the Coastal conservation and management of marine resources; and the length of residence in Estimated Total Annual Cost to Zone Management Act of 1972 (CZMA), the area affected by the Sanctuary. Public: $0. as amended, require a continuing review of the performance of coastal Applicants who are chosen as members IV. Request for Comments states with respect to approval of coastal should expect to serve three-year terms, management programs, and the pursuant to the Council’s Charter. Comments are invited on: (a) Whether operation and management of NERRs. DATES: Applications are due by the proposed collection of information February 19, 2001. is necessary for the proper performance The states of Delaware, Florida, Massachusetts, New Hampshire, Oregon ADDRESSES: Application kits may be of the functions of the agency, including and Virginia were found to be obtained from Brady Phillips at the whether the information shall have implementing and enforcing their Monterey Bay National Marine practical utility; (b) the accuracy of the federally approved coastal management Sanctuary, 299 Foam Street, Monterey, agency’s estimate of the burden programs, addressing the national California, 93940. Completed (including hours and cost) of the coastal management objectives applications should be sent to the same proposed collection of information; (c) identified in CZMA section 303(2)(A)– address. ways to enhance the quality, utility, and (K), and adhering to the programmatic FOR FURTHER INFORMATION CONTACT: clarity of the information to be terms of their financial assistance Brady Phillips at (831) 647–4237, or collected; and (d) ways to minimize the awards. [email protected]. burden of the collection of information Elkhorn Slough, Narragansett Bay, on respondents, including through the SUPPLEMENTARY INFORMATION: The Sapelo Island, and Tijuana River NERRs use of automated collection techniques MBNMS Advisory Council was were found to be adhering to established in March 1994 (the current or other forms of information programmatic requirements of the NERR Council has served since March 1998) to technology. System. Copies of these final evaluation assure continued public participation in Comments submitted in response to findings may be obtained upon written the management of the Sanctuary. Since this notice will be summarized and/or request from: Margo E. Jackson, Deputy its establishment, the Council has included in the request for OMB Director, Office of Ocean and Coastal played a vital role in the decisions approval of this information collection; Resource Management, NOS/NOAA, affecting the Sanctuary along the central they also will become a matter of public 1305 East-West Highway, 10th Floor, California Coast. record. Silver Spring, Maryland 20910, or The Council’s nineteen voting [email protected], (301) 713– Dated: January 19, 2001. members represent a variety of local 3155 Extension 114. user groups, the general public, and Gwellnar Banks, (Federal Domestic Assistance Catalog 11.419, seven local, state and federal Management Analyst, Office of the Chief Coastal Zone Management Program governmental jurisdictions. In addition, Information Officer. Administration.) the respective managers for the four [FR Doc. 01–2415 Filed 1–29–01; 8:45 am] California National Marine Sanctuaries BILLING CODE 3510–22–S Capt. Ted Lillestolen, (Channel Islands National Marine Deputy Assistant Administrator for Ocean Sanctuary, Cordell Bank National Services and Coastal Zone Management. Marine Sanctuary, Gulf of the Farallones [FR Doc. 01–2524 Filed 1–29–01; 8:45 am] National Marine Sanctuary, and the BILLING CODE 3510–08–M Monterey Bay National Marine
VerDate 11
Sanctuary) and the Elkhorn Slough DEPARTMENT OF COMMERCE that require emergency action under National Estuarine Research Reserve sit section 305(c) of the Magnuson-Stevens as non-voting members. National Oceanic and Atmospheric Fishery Conservation and Management Administration The Council is supported by three Act, provided the public has been working groups: the Research Activity [I.D. 011701D] notified of the Council’s intent to take final action to address the emergency. Panel (RAP) chaired by the Research Representative, the Sanctuary Education Caribbean Fishery Management Special Accommodations Council; Public Meeting Panel (SEP) chaired by the Education This meeting is physically accessible Representative, and the Conservation AGENCY: National Marine Fisheries to people with disabilities. For more Working Group (CWG) chaired by the Service (NMFS), National Oceanic and information or request for sign language Conservation Representative, each Atmospheric Administration (NOAA), interpretation and/other auxiliary aids, respectively dealing with matters Commerce. please contact Mr. Miguel A. Rolo´n, concerning research, education and ACTION: Notice of public meeting. Executive Director, Caribbean Fishery resource protection. The working groups Management Council,(see FOR FURTHER are composed of experts from the SUMMARY: The Caribbean Fishery INFORMATION CONTACT) at least 5 days appropriate fields of interest and all Management Council (Council) will prior to the meeting date. hold a meeting. meet monthly, serving as invaluable Dated: January 22, 2001. DATES: The meeting will be held on advisors to the Council and the Richard W. Surdi, Sanctuary Superintendent. Several task February 21, 2001, from 1 p.m. until 5 p.m. The closed session will take place Acting Director, Office of Sustainable forces have been established to assist in Fisheries, National Marine Fisheries Service. after 5 p.m. developing specific programmatic goals. [FR Doc. 01–2413 Filed 1–29–01; 8:45 am] ADDRESSES: The meeting will be held at Most notable is the formation of the BILLING CODE 3510-22-S Business and Tourism Activity Panel the Wyndham Sugar Bay Beach Club (BTAP), whose purpose is to strengthen and Resort, 6500 Estate Smith Bay, St. economic partnerships with the Thomas, U.S.V.I. DEPARTMENT OF COMMERCE Sanctuary Program. FOR FURTHER INFORMATION CONTACT: Caribbean Fishery Management Council, National Oceanic and Atmospheric The Council represents the 268 Mun˜ oz Rivera Avenue, Suite 1108, Administration coordination link between the San Juan, Puerto Rico 00918-2577; [I.D. 012401C] Sanctuary and the state and federal telephone: (787) 766-5926. management agencies, user groups, SUPPLEMENTARY INFORMATION: The North Pacific Fishery Management researchers, educators, policy makers, Council will hold its 103rd regular Council; Public Meeting and other various groups that help to public meeting to discuss the items focus efforts and attention on the central contained in the following agenda: AGENCY: National Marine Fisheries California coastal and marine Service (NMFS), National Oceanic and ecosystems. Call to Order Atmospheric Administration (NOAA), The Council functions in an advisory Adoption of Agenda Commerce. ACTION: Notice of public meeting. capacity to the Sanctuary Manager and Consideration of 102nd Council Meeting is instrumental in helping develop Summary Minutes SUMMARY: The North Pacific Fishery policies, program goals, and identify Presentation on Proposed Marine Management Council’s (Council) Bering education, outreach, research, long-term Protected Areas and Parks for the Sea/Aleutian Islands Crab monitoring, resource protection and U.S.V.I. Rationalization Committee will hold a revenue enhancement priorities. The meeting. Council works in concert with the Dolphin/Wahoo Fishery Management Plan Final Action DATES: The meeting will be held on Sanctuary Manger by keeping him or February 15-16, 2001, beginning at 9:00 her informed about issues of concern Queen Conch FMP Amendment - a.m. on February 15. throughout the Sanctuary, offering Proposed Rule ADDRESSES: The meeting will be held at recommendations on specific issues, Other Business the Alaska Fisheries Science Center and aiding the Manager in achieving the (AFSC), 7600 Sand Point Way NE, in Next Council Meeting goals of the Sanctuary program within Room 2039, Building 4, Seattle, WA. the context of California’s marine Closed Session for Administrative Council address: North Pacific Fishery programs and policies. Matters Management Council, 605 W. 4th Ave., Authority: 16 U.S.C. Section 1431 et seq. The meeting is open to the public, Suite 306, Anchorage, AK 99501-2252. (Federal Domestic Assistance Catalog and will be conducted in English. FOR FURTHER INFORMATION CONTACT: Number 11.429 Marine Sanctuary Program) Fishers and other interested persons are Council staff, phone: 907-271-2809. invited to attend and participate with SUPPLEMENTARY INFORMATION: The Dated: January 24, 2001. oral or written statements regarding Committee will begin to develop Ted Lillestolen, agenda issues. alternatives, elements and options for Deputy Assistant Administrator for Ocean Although non-emergency issues not crab rationalization which they will Services and Coastal Zone Management. contained in this agenda may come forward to the North Pacific Fishery [FR Doc. 01–2556 Filed 1–29–01; 8:45 am] before this group for discussion, those Management Council for consideration BILLING CODE 3510–08–M issues may not be the subject of formal in April 2001. action during this meeting. Action will Although non-emergency issues not be restricted to those issues specifically contained in this agenda may come identified in this notice and any issues before this group for discussion, those arising after publication of this notice issues may not be the subject of formal
VerDate 11
action during this meeting. Action will process. This is the second meeting of DATES: The MRPDC working meeting be restricted to those issues specifically the committee, and the primary purpose will begin Tuesday, February 13, 2001, identified in this notice and any issues of this work session is to refine the at 10 a.m. and end by 4 p.m. the same arising after publication of this notice recommendations developed at the day. that require emergency action under committee’s previous meeting and section 305(c) of the Magnuson-Stevens prepare the committee’s report to the ADDRESSES: The meeting will be held in Fishery Conservation and Management Council. Specifically, the GMPC will the Cascade Room of the Sheraton Act, provided the public has been review a draft 2-year groundfish Portland Airport Hotel, 8235 NE Airport notified of the Council’s intent to take management schedule, refine several Way, Portland, OR; telephone: 503–249– final action to address the emergency. other alternative management 7621. schedules, and discuss alternative Special Accommodations Council address: Pacific Fishery funding sources to shore up the Council Management Council, 2130 SW Fifth These meetings are physically budget. The committees’s Avenue, Suite 224, Portland, OR 97201. accessible to people with disabilities. recommendations will be reported to Requests for sign language the Council at the March 2001 Council FOR FURTHER INFORMATION CONTACT: Jim interpretation or other auxiliary aids meeting. Seger, Economic Analysis Coordinator; should be directed to Helen Allen at Although non-emergency issues not telephone: (503) 326–6352. 907-271-2809 at least 7 working days contained in the GMPC meeting agenda SUPPLEMENTARY INFORMATION: The prior to the meeting date. may come before the GMPC for discussion, those issues may not be the primary purpose of the MRPDC meeting Dated: January 24, 2001. is to design a process, project, and Richard W. Surdi, subject of formal GMPC action during the meeting. GMPC action will be budget for Phase II of the Council’s Acting Director, Office of Sustainable consideration of marine reserves. The Fisheries, National Marine Fisheries Service. restricted to those issues specifically listed in this document and any issues Pacific Fishery Management Council [FR Doc. 01–2577 Filed 1–29–01; 8:45 am] arising after publication of this (Council) has specified a two-phase BILLING CODE 3510–22–S document that require emergency action process for considering whether or not under section 305(c) of the Magnuson- to recommend marine reserves. The first phase was a conceptual evaluation that DEPARTMENT OF COMMERCE Stevens Fishery Conservation and Management Act, provided the public concluded in September 2000 with a National Oceanic and Atmospheric has been notified of the GMPC’s intent Council determination that marine Administration to take final action to address the reserves have a role in fishery emergency. management for the groundfish fishery. [I.D. 011701E] Special Accommodations During the second phase, options for the Pacific Fishery Management Council; design and location of marine reserves The meeting is physically accessible will be developed. Public Meeting to people with disabilities. Requests for Although non-emergency issues not AGENCY: National Marine Fisheries sign language interpretation or other specified the agenda may come before Service (NMFS), National Oceanic and auxiliary aids should be directed to Ms. Atmospheric Administration (NOAA), Carolyn Porter at (503) 326-6352 at least the MRPDC for discussion, those issues Commerce. 5 days prior to the meeting date. may not be the subject of formal MRPDC action during this meeting. MRPDC ACTION: Notice of public meeting. Dated: January 22, 2001. action will be restricted to those issues Richard W. Surdi, SUMMARY: The Pacific Fishery specifically listed in this notice and any Acting Director, Office of Sustainable Management Council’s (Council) Ad- Fisheries, National Marine Fisheries Service. issues arising after publication of this Hoc Groundfish Management Process notice that require emergency action [FR Doc. 01–2414 Filed 1–29–01; 8:45 am] Committee (GMPC) will hold a work under section 305(c) of the Magnuson- BILLING CODE 3510–22–S session, which is open to the public. Stevens Fishery Conservation and DATES: The GMPC will meet Management Act, provided the public Wednesday, February 14, 2001, from 10 DEPARTMENT OF COMMERCE has been notified of the MRPDC’s intent a.m. until business for the day is to take final action to address the completed. National Oceanic and Atmospheric emergency. Administration ADDRESSES: The work session will be Special Accommodations held at the Pacific States Marine [I.D. 012401A] Fisheries Commission, Large Conference The meeting is physically accessible Room, 45 SE 82nd Drive, Suite 100, Pacific Fishery Management Council; to people with disabilities. Requests for Gladstone, OR 97027; (503) 650-5400. Public Meeting sign language interpretation or other Council address: Pacific Fishery AGENCY: National Marine Fisheries auxiliary aids should be directed to Ms. Management Council, 2130 SW Fifth Service (NMFS), National Oceanic and Carolyn Porter at (503) 326–6352 at least Avenue, Suite 224, Portland, OR 97201. Atmospheric Administration (NOAA), 5 days prior to the meeting date. FOR FURTHER INFORMATION CONTACT: Dan Commerce. Waldeck or Don McIsaac, Pacific Dated: January 24, 2001. ACTION: Notice of public meeting. Fishery Management Council, (503) 326- Richard W. Surdi, 6352. SUMMARY: The Pacific Fishery Acting Director, Office of Sustainable SUPPLEMENTARY INFORMATION: The Management Council’s (Council) Ad Fisheries, National Marine Fisheries Service. formation of this Ad-Hoc committee is Hoc Marine Reserve Process Design [FR Doc. 01–2579 Filed 1–29–01; 8:45 am] in response to a Council request Committee (MRPDC) will hold a BILLING CODE 3510–22–S (November 2000) for a formal review of working meeting which is open to the the current groundfish management public.
VerDate 11
DEPARTMENT OF COMMERCE Special Accommodations throughout Alaska. A limited number of These meetings are physically accidental mortalities are authorized for National Oceanic and Atmospheric accessible to people with disabilities. all species during capture activities. Administration Requests for sign language Additionally, the permit authorizes the interpretation or other auxiliary aids incidental harassment of harbor seals [I.D. 012401B] should be directed to the Council office during scat collection and aerial (see ADDRESSES) by February 12, 2001. surveys. Export of biological samples South Atlantic Fishery Management worldwide and collection of biological Council; Public Meeting Dated: January 24, 2001. samples from subsistence harvested Richard W. Surdi, animals is also authorized. AGENCY: National Marine Fisheries Acting Director, Office of Sustainable The requested permit has been issued Service (NMFS), National Oceanic and Fisheries, National Marine Fisheries Service. under the authority of the Marine Atmospheric Administration (NOAA), [FR Doc. 01–2576 Filed 1–29–01; 8:45 am] Mammal Protection Act of 1972, as Commerce. BILLING CODE 3510–22–S amended (16 U.S.C. 1361 et seq.) and ACTION: Notice of public meeting the Regulations Governing the Taking and Importing of Marine Mammals (50 SUMMARY: The South Atlantic Fishery DEPARTMENT OF COMMERCE CFR part 216). Management Council will hold a Dated: January 24, 2001. meeting of its Snapper Grouper National Oceanic and Atmospheric Assessment Group in Atlantic Beach, Administration Ann D. Terbush, Chief, Permits and Documentation Division, FL. [I.D. 011201A] Office of Protected Resources, National DATES: The Snapper Grouper Marine Fisheries Service. Marine Mammals; File No. 358-1585 Assessment Group will meet February [FR Doc. 01–2578 Filed 1–29–01; 8:45 am] 20, 2001, from 1 p.m. until 5 p.m. and AGENCY: National Marine Fisheries BILLING CODE 3510–22–S on February 21, 2001, from 8:30 a.m. Service (NMFS), National Oceanic and until 5 p.m. Atmospheric Administration (NOAA), ADDRESSES: These meetings will be held Commerce. COMMITTEE FOR THE at the Sea Turtle Inn, One Ocean ACTION: Issuance of permit. IMPLEMENTATION OF TEXTILE Boulevard, Atlantic Beach, FL 32233; AGREEMENTS SUMMARY: telephone: (904) 249-7402; fax: (904) Notice is hereby given that 247-1517. the Alaska Department of Fish and Announcement of Import Restraint Game (Dr. Wayne L. Regelin, Limits for Certain Cotton, Wool, Man- FOR FURTHER INFORMATION CONTACT: Kim Responsible Party), P.O. Box 3-2000, Made Fiber, Silk Blend and Other Iverson, Public Information Officer; Juneau, Alaska 99802-5526, has been Vegetable Fiber Textile Products telephone: (843) 571-4366; fax: (843) issued a permit to take harbor seals Produced or Manufactured in Burma 769-4520; email: [email protected]. (Phoca vitulina), spotted seals (Phoca (Myanmar) SUPPLEMENTARY INFORMATION: The largha), ringed seals (Phoca hispida), Assessment Group will meet February bearded seals (Erignathus barbatus), and January 24, 2001. 20-21, 2001 to address several issues ribbon seals (Phoca fasciata) for AGENCY: Committee for the including: Maximum Sustainable Yield purposes of scientific research. Implementation of Textile Agreements (MSY), Optimum Yield (OY) and ADDRESSES: The permit and related (CITA). overfishing specifications for species in documents are available for review ACTION: Issuing a directive to the the snapper grouper complex; upon written request or by appointment Commissioner of Customs establishing manuscripts regarding an assessment in the following office(s): limits. and projections for red porgy; a Permits and Documentation Division, powerhead gear framework document; Office of Protected Resources, NMFS, EFFECTIVE DATE: January 30, 2001. updated trends analysis; white grunt 1315 East-West Highway, Room 13130, FOR FURTHER INFORMATION CONTACT: Ross assessment inclucing age and growth Silver Spring, MD 20910 (301/713- Arnold, International Trade Specialist, data; gray snapper age and growth data; 2289); and Office of Textiles and Apparel, U.S. a compliance report regarding size Alaska Region, NMFS, P.O. Box Department of Commerce, (202) 482– limits; snowy grouper and golden 21668, Juneau, AK 99802-1668; phone 4212. For information on the quota tilefish assessment and management (907)586-7221; fax (907)586-7249. status of these limits, refer to the Quota including the Total Allowable Catch FOR FURTHER INFORMATION CONTACT: Status Reports posted on the bulletin (TAC) and the wreckfish TAC. Simona Roberts or Ruth Johnson, 301/ boards of each Customs port, call (202) Although non-emergency issues not 713-2289. 927–5850, or refer to the U.S. Customs contained in this agenda may come SUPPLEMENTARY INFORMATION: On August website at http://www.customs.gov. For before this group for discussion, those 25, 2000, notice was published in the information on embargoes and quota re- issues may not be the subject of formal Federal Register (65 FR 51811) that a openings, call (202) 482–3715. action during this meeting. Action will request for a scientific research permit SUPPLEMENTARY INFORMATION: be restricted to those issues specifically to take harbor seals, spotted seals, identified in this notice and any issues ringed seals, bearded seals and ribbon Authority: Section 204 of the Agricultural arising after publication of this notice seals had been submitted by the above- Act of 1956, as amended (7 U.S.C. 1854); that require emergency action under named organization. Executive Order 11651 of March 3, 1972, as section 305(c) of the Magnuson-Stevens Permit No. 358-1585 authorizes the amended. Fishery Conservation and Management Holder to capture, sample and tag a total The import restraint limits for textile Act, provided the public has been of 1000 harbor seals, 500 spotted seals, products, produced or manufactured in notified of the Council’s intent to take 250 ringed seals, 250 bearded seals and Burma (Myanmar) and exported during final action to address the emergency. 250 ribbon seals over a 5-year period the period January 1, 2001 through
VerDate 11
December 31, 2001 are based on limits In carrying out the above directions, the resources, while limiting adverse notified to the Textiles Monitoring Body Commissioner of Customs should construe environmental impacts and ensuring pursuant to the Uruguay Round entry into the United States for consumption land uses that are compatible with to include entry for consumption into the adjacent property. This Record of Agreement on Textiles and Clothing Commonwealth of Puerto Rico. (ATC). The Committee for the Implementation of Decision does not mandate a specific In the letter published below, the Textile Agreements has determined that mix of land uses. Rather, it leaves Chairman of CITA directs the these actions fall within the foreign affairs selection of the particular means to Commissioner of Customs to establish exception of the rulemaking provisions of 5 achieve the proposed redevelopment to the 2001 limits. U.S.C. 553(a)(1). the acquiring entity and the local zoning A description of the textile and Sincerely, authority. apparel categories in terms of HTS D. Michael Hutchinson, Background: Under the authority of numbers is available in the Acting Chairman, Committee for the the Defense Authorization Amendments CORRELATION: Textile and Apparel Implementation of Textile Agreements. and Base Closure and Realignment Act, Categories with the Harmonized Tariff [FR Doc. 01–2541 Filed 1–29–01; 8:45 am] Public Law 100–526, 10 U.S.C. 2687 note (1994), the 1988 Defense Schedule of the United States (see BILLING CODE 3510–DR–F Federal Register notice 64 FR 71982, Secretary’s Commission on Base published on December 22, 1999). Realignment and Closure recommended the closure of Naval Station Brooklyn. Information regarding the availability of DEPARTMENT OF DEFENSE the 2001 CORRELATION will be This recommendation was approved by published in the Federal Register at a Department of the Navy the Secretary of Defense, Frank Carlucci, later date. and accepted by the One Hundred First Record of Decision for the Disposal Congress in 1989. The Naval Station D. Michael Hutchinson, and Reuse of Naval Station Brooklyn, closed on March 23, 1993. Acting Chairman, Committee for the New York Naval Station Brooklyn is situated on Implementation of Textile Agreements. about 29 acres in the eastern part of the SUMMARY: The Department of the Navy Borough of Brooklyn. The property is Committee for the Implementation of Textile (Navy), pursuant to Section 102(2)(C) of Agreements oriented along a north-south axis and the National Environmental Policy Act has an irregular border. January 24, 2001. of 1969 (NEPA), 42 U.S.C. 4332(2)(C) It is bounded on the north by the East Commissioner of Customs, (1994), and the regulations of the River waterfront of the Brooklyn Navy Department of the Treasury, Washington, DC Council on Environmental Quality that Yard Development Corporation’s 20229. implement NEPA procedures, 40 CFR industrial park; on the east by the Dear Commissioner: Pursuant to section parts 1500–1508, hereby announces its Brooklyn-Queens Expressway (BQE); on 204 of the Agricultural Act of 1956, as decision to dispose of Naval Station the south by Flushing Avenue; and on amended (7 U.S.C. 1854); Executive Order Brooklyn, which is located in Brooklyn, the west by Washington Avenue and 11651 of March 3, 1972, as amended; and the Uruguay Round Agreement on Textiles and New York. parts of the former Brooklyn Navy Yard. Clothing (ATC), you are directed to prohibit, Navy analyzed the impacts of the The Naval Station property is effective on January 30, 2001, entry into the disposal and reuse of Naval Station surrounded by industrial and United States for consumption and Brooklyn in an Environmental Impact commercial activities. Residential withdrawal from warehouse for consumption Statement (EIS), as required by NEPA. neighborhoods are located farther north, of cotton, wool, man-made fiber, silk blend The EIS analyzed four reuse alternatives east and south of the base. and other vegetable fiber textile products in and identified the Redevelopment Plan This Record Of Decision addresses the the following categories, produced or for Naval Station Brooklyn, New York, disposal and reuse of the Naval Station manufactured in Burma (Myanmar) and dated March 1, 1996 (Reuse Plan), property, which is surplus to the needs exported during the twelve-month period beginning on January 1, 2001 and extending prepared by the City of New York and of the Federal Government. The surplus through December 31, 2001, in excess of the described in the EIS as the Reuse Plan property covers about 29 acres and following levels of restraint: Alternative, as the Preferred Alternative. contains 36 buildings and structures The Preferred Alternative proposed to that provide about 629,000 square feet use the Naval Station property for of space. Buildings 1 and 2, the largest Category Twelve-month restraint limit industrial, institutional, non-profit, and buildings on the base, supply more than commercial activities and to develop half of the floor space available for 340/640 ...... 100,755 dozen. open space and recreational areas. The redevelopment. 342/642 ...... 27,214 dozen. Brooklyn Navy Yard Development Navy published a Notice Of Intent in 347/348 ...... 141,157 dozen. 351/651 ...... 42,770 dozen. Corporation replaced the City of New the Federal Register on January 31, 448 ...... 2,483 dozen. York as the Local Redevelopment 1997, announcing that Navy would 647/648/847 ...... 26,322 dozen. Authority (LRA) for Naval Station prepare an EIS for the disposal and Brooklyn on November 27, 2000. reuse of Naval Station Brooklyn. On The limits set forth above are subject to Department of Defense Rule on February 13, 1997, Navy held public adjustment pursuant to the provisions of the Revitalizing Base Closure Communities scoping meetings at New York City’s ATC and administrative arrangements and Community Assistance (DoD Rule), Department of City Planning and at the notified to the Textiles Monitoring Body. 32 CFR 176.20(a). Brooklyn Borough Hall. The scoping Products in the above categories exported Navy intends to dispose of Naval period concluded on March 14, 1997. during 2000 shall be charged to the Station Brooklyn in a manner that is Navy distributed the Draft EIS (DEIS) applicable category limits for that year (see consistent with the Reuse Plan. Navy to Federal, State, and local agencies, directive dated December 10, 1999) to the extent of any unfilled balances. In the event has determined that the proposed mixed elected officials, interested parties, and the limits established for that period have land use will meet the goals of the general public on October 8, 1999, been exhausted by previous entries, such achieving local economic and commenced a 45-day public review products shall be charged to the limits set redevelopment, creating new jobs, and and comment period. During this forth in this directive. providing additional recreational period, Federal, State, and local
VerDate 11
agencies, community groups and with industrial activities in the former House), and Building R–95 (the Naval associations, and interested persons Brooklyn Navy Yard that is managed by Hospital), would be retained, but the submitted oral and written comments the Brooklyn Navy Yard Development other buildings would be demolished to concerning the DEIS. On October 21, Corporation. allow maximum development of the 1999, Navy held a public hearing at the The Preferred Alternative would property. The Cemetery would be Brooklyn Borough Hall to receive dedicate 18.3 acres in the center of the retained as open space. This Alternative comments on the DEIS. base, designated as the Hospital would develop about 2.1 million square Navy’s responses to the public campus, to institutional and non-profit feet of space for retail stores, comments on the DEIS were activities and to open space and warehouses, and manufacturing incorporated in the Final EIS (FEIS), recreational activities. The Reuse Plan activities. which was distributed to the public on did not propose particular uses for the Environmental Impacts: Navy August 11, 2000, for a review period buildings comprising the Hospital analyzed the direct, indirect, and that concluded on September 10, 2000. Campus, but these facilities could be cumulative impacts of the disposal and Navy received five letters commenting used for day care, health care, job reuse of this surplus Federal property. on the FEIS. training, educational, and other The EIS addressed impacts of the Alternatives: NEPA requires Navy to institutional purposes. Preferred Alternative, the Residential evaluate a reasonable range of The Naval Hospital Cemetery is Alternative, the Museum Alternative, alternatives for the disposal and reuse of located on about 1.7 acres in the eastern the As-of-Right Alternative, and the ‘‘No this surplus Federal property. In the part of the base inside the Hospital Action’’ Alternative for each FEIS, Navy analyzed the environmental Campus. During preparation of the Alternative’s effects on land use and impacts of four reuse alternatives. Navy Reuse Plan, Navy and the City believed zoning, socioeconomics, community also evaluated a ‘‘No Action’’ alternative that all of the burial remains had been facilities and services, transportation, that would leave the property in relocated to another cemetery in 1926. air quality, noise, infrastructure, caretaker status with Navy maintaining Thereafter, Navy converted the cultural resources, natural resources, the physical condition of the property, Cemetery property to recreational and petroleum and hazardous providing a security force, and making athletic fields. After the Reuse Plan was substances. This Record Of Decision repairs essential to safety. issued in 1996, however, Navy focuses on the impacts that would likely The City of New York began to plan discovered that the number of burials in result from implementation of the Reuse for reuse of the Naval Station in 1992. the Cemetery exceeded the number that, Plan, identified in the FEIS as the On March 1, 1996, the City of New according to records, had been relocated Preferred Alternative. York, acting as the Local in 1926. As a result, Navy restored the The Preferred Alternative would not Redevelopment Authority for the Naval Cemetery grounds, and this property have a significant impact on land use Station, issued the Redevelopment Plan will be preserved as a cemetery. and would result in land uses that are for Naval Station Brooklyn, New York. Navy analyzed a second ‘‘action’’ compatible with existing and planned The Reuse Plan, identified in the FEIS alternative, described in the FEIS as the uses in the surrounding area. The Reuse as the Preferred Alternative, proposed a Residential Alternative. Under this Plan would redevelop the Naval Station mix of land uses in four areas Alternative, the land uses proposed for property for use in light industrial, designated as the Northern Triangle, the the Northern Triangle, the Western institutional, community, commercial, BQE Frontage, the Western Industrial Industrial Sector and the BQE Frontage and active and passive recreational Sector, and the Hospital Campus. The property would be the same as those activities. Under the Reuse Plan, the Reuse Plan would take advantage of the proposed by the Preferred Alternative. property’s zoning would change to property’s industrial facilities and However, the Hospital Campus facilities permit light industrial, commercial, and proximity to the former Brooklyn Navy would be used for residential rather community activities but not residential Yard and minimize impacts on the than institutional purposes. This uses. historic campus of the Brooklyn Naval Alternative would not build any new The Preferred Alternative would not Hospital, which is located on the Naval residential units but would convert and have an impact on the socioeconomics Station property. It did not propose to renovate the Bachelor Officers Quarters of the surrounding area. The Reuse Plan build any new structures on the and the single-family homes into 94 would generate about 1,630 new direct property. multi-family homes. jobs with annual earnings of about $45.7 The Preferred Alternative would Navy analyzed a third ‘‘action’’ million. These new jobs would dedicate 2.2 acres in the Northern alternative, described in the FEIS as the constitute about 0.03 percent of the jobs Triangle at the northern end of the Museum Alternative. Under this in the City of New York. The Reuse Plan Naval Station to light industrial Alternative, the land uses proposed for would also generate about 870 indirect activities and warehouses. It would the Northern Triangle and the Western jobs with annual earnings of about $24 assign two acres in the BQE Frontage Industrial Sector would be the same as million. It would produce about $8.3 area, located in the southeast corner of those proposed by the Preferred million annually in state and local the property at the intersection of Alternative, but the BQE Frontage and income taxes and sales taxes. Flushing Avenue and Williamsburg Hospital Campus facilities would be The Preferred Alternative would not Street (facing the elevated BQE used for educational and cultural have a significant impact on community Expressway), to light industrial activities. This Alternative would not services. There will be no residential activities and retail stores. undertake any new construction. use of the property under the Reuse The Preferred Alternative would Navy analyzed a fourth ‘‘action’’ Plan, and no new workers will move dedicate 6.4 acres in the Western alternative, described in the FEIS as the into the area as a result of the Reuse Industrial Sector at the southwest corner As-of-Right Alternative. Under this Plan. Therefore, there will not be any of the Naval Station to technology Alternative, the property would be new demands placed on local schools. manufacturing, research, light industrial redeveloped to the maximum extent The presence of additional workers on activities, and offices. It would integrate permitted by New York City’s zoning the property, however, would slightly Buildings 1 and 2, the largest buildings ordinances. Four buildings, Buildings 1 increase the demands placed on the on the base, and two smaller buildings and 2, Building R–1 (the Surgeon’s resources of the two nearby hospitals.
VerDate 11
The Preferred Alternative would not quality resulting from renovation Only a few deteriorated structures have a direct impact on local police, activities would not be significant. would be demolished. However, it fire, emergency, and other community Section 176(c) of the Clean Air Act, 42 would be necessary to upgrade and services. U.S.C. 7506 (1994), requires Federal renovate the utility distribution systems The Preferred Alternative would agencies to review their proposed to provide adequate services. substantially increase the amount of activities to ensure that these activities The Preferred Alternative would not open space and make the Hospital do not hamper local efforts to control air have a significant impact on cultural Campus available to the public. About pollution. Section 176(c) prohibits resources. Pursuant to Section 106 of 11.2 acres of active recreational space Federal agencies from conducting the National Historic Preservation Act of and 8.8 acres of passive recreational activities in air quality areas such as the 1966 (NHPA), 16 U.S.C. 470f (1994), space, including the 1.7-acre Naval City of New York that do not meet one Navy conducted a cultural resources Cemetery, would be available to the or more of the national standards for survey and determined that parts of the public. ambient air quality, unless the proposed Naval Station property are eligible for The Preferred Alternative would not activities conform to an approved listing on the National Register of have a significant impact on implementation plan. The United States Historic Places as two separate historic transportation. By the year 2002, the Environmental Protection Agency districts. The Brooklyn Navy Yard Preferred Alternative would generate regulations implementing Section 176(c) Historic District encompasses most of about 11,200 average daily trips to and recognize certain categorically exempt the buildings in the Northern Triangle, from the property. The Naval Station activities. Conveyance of title to real the Western Industrial Sector, and the property has not generated a substantial property and certain leases are BQE Frontage area. These were built number of average daily trips since it categorically exempt activities. 40 CFR during the World War II expansion of was placed in caretaker status in 1993. 93.153(c)(2)(xiv) and (xix). Therefore, the Navy Yard. The United States Naval Consequently, this Alternative would the disposal of Naval Station Brooklyn Hospital Historic District contains increase the amount of traffic in the area will not require Navy to conduct a historically significant Nineteenth and and cause traffic delays at the conformity determination. Twentieth Century institutional, The Preferred Alternative would have intersections of Flushing Avenue and residential, and industrial buildings as a significant noise impact on Steuben Williamsburg Street, Flushing Avenue well as the Naval Hospital Cemetery. Playground, which is located across In a letter dated November 18, 1994, and Classon Avenue, and Flushing Flushing Avenue from the Naval Station the New York State Historic Avenue and Clinton Avenue. The traffic property. Those who use this Preservation Officer concurred in flow at these intersections could be playground during the morning peak Navy’s determination that the Naval improved by modifying the traffic traffic period would experience noise Station was eligible for listing on the signals. There is adequate public levels in excess of 65 decibels arising National Register of Historic Places. In transportation to support the proposed out of the increased traffic at this time addition, the Naval Hospital, built in redevelopment of the Naval Station of day. This constitutes a 3.2 decibel 1838, and the Surgeon’s House, built in property. increase in the ambient noise level, and 1864, have been designated as New The Preferred Alternative would not an increase in noise in excess of three York City Landmark Buildings by the have a significant impact on air quality. decibels with a total noise impact above City of New York’s Landmarks The Naval Station property is located in 65 decibels constitutes a significant Preservation Commission. a severe nonattainment area for ozone impact under New York City standards. The Naval Hospital Cemetery, located and a moderate nonattainment area for There were insignificant impacts at the on the Hospital Campus, served as the carbon monoxide (CO), as regulated by other nine sites analyzed for noise, Naval Hospital’s burial ground from the Clean Air Act, 42 U.S.C. 7401–7671q because the increases in ambient noise 1824 to 1910. In 1926, Navy removed (1994). Ozone, commonly known as levels were less than three decibels. 987 burial remains from the Cemetery smog, is produced when volatile organic Generally, a person cannot perceive a and interred them at Cypress Hills compounds and nitrogen oxides react in change in noise levels that are less than National Cemetery in Brooklyn. During the atmosphere. The Naval Station three decibels. the 1930s and 1940s, believing that all property is in attainment for all other The Preferred Alternative would not of the burial remains had been common air pollutants regulated under have a significant impact on the relocated, Navy converted the Cemetery the Clean Air Act. capacity of the City of New York’s property to recreational athletic fields. Carbon monoxide is produced by the utility systems. The City’s water system During 1996 and 1997, Navy burning of fossil fuels. As a result of can supply the Reuse Plan’s projected conducted documentary research and traffic moving to and from the property, daily demand of about 55,000 gallons of field tests and concluded that there the annual emissions of CO would potable water. The proposed were no records confirming the removal increase under the Reuse Plan. redevelopment of the Naval Station of about 517 burial remains. Thus, in Nevertheless, there would not be any property would not have a significant 1999, Navy removed the recreational violation of the national standards impact on the City’s wastewater equipment and altered the landscape of governing emissions of carbon treatment capacity. The City’s Newtown the site to restore it as a cemetery. The monoxide. Creek Water Pollution Control Plant can Reuse Plan would preserve the The impact on air quality from provide the Reuse Plan’s daily Cemetery in accordance with a stationary sources of emissions, such as requirement to treat 55,000 gallons of protective covenant that Navy will place heating units, would depend upon the wastewater. The City also has adequate in the deed for the Cemetery property. nature and extent of activities solid waste disposal capacity, and no Future alterations of buildings and conducted on the property. Developers significant impact is likely to result structures in the historic districts must of these facilities will be responsible for from the disposal of solid waste be conducted in accordance with the obtaining the required air permits and generated by the Reuse Plan. Secretary of the Interior’s Standards for for complying with Federal, State and Implementation of the Preferred Rehabilitation and in accordance with local laws and regulations governing air Alternative would result in renovation the terms of the Programmatic pollution. The temporary impacts on air of most of the buildings on the property. Agreement executed by Navy, the
VerDate 11
Advisory Council on Historic human health and the environment in Regulations Governing the Disposal Preservation, and the State Historic light of the intended use of the property. Decision: Since the proposed action Preservation Officer on June 16, 2000. Executive Order 12898, Federal contemplates a disposal under the As a result, there will not be any Actions to Address Environmental Defense Base Closure and Realignment adverse effects on cultural resources. In Justice in Minority Populations and Act of 1990 (DBCRA), Public Law 101– addition, because the Naval Hospital Low-Income Populations, 3 CFR 859 510, 10 U.S.C. 2687 note (1994), Navy’s and the Surgeon’s House are City of (1995), requires that Navy determine decision was based upon the New York landmarks, any alterations to whether any low income and minority environmental analysis in the FEIS and these buildings must be reviewed and populations will experience application of the standards set forth in permitted by the City of New York’s disproportionately high and adverse the DBCRA, the Federal Property Landmarks Preservation Commission. human health or environmental effects Management Regulations (FPMR), 41 The Preferred Alternative would not from the proposed action. Navy CFR part 101–47, and the Department of have a significant impact on upland analyzed the impacts on low income Defense Rule on Revitalizing Base vegetation wildlife. The existing and minority populations pursuant to Closure Communities and Community vegetation on the property consists Executive Order 12898. The FEIS Assistance (DoD Rule), 32 CFR parts 174 largely of maintained lawns and addressed the potential environmental, and 175. ornamental and naturally occurring social, and economic impacts associated Section 101–47.303–1 of the FPMR trees and shrubs. Since the Reuse Plan with the disposal of Naval Station requires that disposals of Federal would not build any new structures on Brooklyn and reuse of the property property benefit the Federal the property, the existing vegetation will under the various proposed alternatives. Government and constitute the ‘‘highest remain undisturbed. Minority and low income populations and best use’’ of the property. Section Navy determined that there were no residing within the region would not be 101–47.4909 of the FPMR defines the Federally-listed threatened or disproportionately affected. Indeed, the ‘‘highes and best use’’ as that use to endangered species, as defined by the direct and indirect employment which a property can be put that Endangered Species Act of 1973, 16 opportunities and increased recreational produces the highest monetary return U.S.C. 1531–1544 (1994), on the Naval resources generated by the Reuse Plan from the property, promotes its Station property. Therefore, the disposal would have beneficial effects. maximum value, or serves a public or and reuse of Naval Station Brooklyn Navy also analyzed the impacts on institutional purpose. The ‘‘highest and would not have an adverse effect on children pursuant to Executive Order best use’’ determination must be based Federally-listed threatened or 13045, Protection of Children from upon the property’s economic potential, endangered species. Environmental Health Risks and Safety qualitative values inherent in the Implementation of the Preferred Risks, 3 CFR 198 (1998). Under the property, and utilization factors Alternative would not significantly alter Preferred Alternative, children would affecting land use such as zoning, the amount of impervious surface on the only be present as visitors to the physical characteristics, other private property. As a result, the amount of property. The Preferred Alternative and public uses in the vicinity, stormwater runoff would not increase. would not pose any disproportionate neighboring improvements, utility Stormwater must be managed in environmental health or safety risks to services, access, roads, location, and accordance with Federal, State, and children. environmental and historic local laws and regulations, and the Mitigation: Implementation of Navy’s considerations. acquiring entity will be responsible for decision to dispose of Naval Station After Federal property has been restoring and building adequate Brooklyn does not require Navy to conveyed to non-Federal entities, the drainage facilities. implement any mitigation measures. property is subject to local land use The Preferred Alternative would not Navy will take certain other actions to regulations, including zoning and have an impact on floodplains. About implement existing agreements and subdivision regulations, and building one acre in the northeastern part of the regulations. These actions were treated codes. Unless expressly authorized by Naval Station lies between the 100-year in the FEIS as agreements or regulatory statute, the disposing Federal agency and 500-year floodplains, but the requirements rather than as mitigation. cannot restrict the future use of surplus Preferred Alternative does not plan to The FEIS identified and discussed Government property. As a result, the develop this area. Consequently, there those actions that will be necessary to local community exercises substantial would be not be an impact here. mitigate impacts associated with reuse control over future use of the property. The Preferred Alternative would not of the Naval Station property. The For this reason, local land use plans and have a significant impact on the acquiring entity, under the direction of zoning affect determination of the environment as a result of the use of Federal, State, and local agencies with ‘‘highest and best use’’ of surplus petroleum products or the use or regulatory authority over protected Government property. generation of hazardous substances by resources, will be responsible for The DBCRA directed the the acquiring entity. Hazardous implementing necessary mitigation Administrator of the General Services materials used and hazardous wastes measures. Administration (GSA) to delegate to the generated by the Reuse Plan will be Comments Received on the FEIS: Secretary of Defense authority to managed in accordance with Federal Navy received comments on the FEIS transfer and dispose of base closure and State laws and regulations. from the United States Environmental property. Implementation of the Preferred Protection Agency; the New York State Section 2905(b) of the DBCRA directs Alternative would not have an impact Department of Environmental the Secretary of Defense to exercise this on public health and safety at the Naval Conservation; the City of New York’s authority in accordance with GSA’s Station. Navy will inform future Landmarks Preservation Commission; property disposal regulations, set forth property owners about the the Fort Greene Association; and one in Part 101–47 of the FPMR. By letter environmental condition of the property private citizen. These comments dated December 20, 1991, the Secretary and may, when appropriate, include concerned issues already discussed in of Defense delegated the authority to restrictions, notifications, or covenants the FEIS and do not require further transfer sand dispose of base closure in deeds to ensure the protection of clarification. property closed under the DBCRA to the
VerDate 11
Secretaries of the Military Departments. by negotiated sale (FPMR Sec. 101– Dated: January 12, 2001. Under this delegation of authority, the 47.304–9); and by competitive sale William J. Cassidy, Jr., Secretary of the Navy must follow (FPMR 101–47.304–7). Additionally, in Deputy Assistant Secretary of the Navy, FPMR procedures for screening and Section 2905(b)(4), the DBCRA (Conversion And Redevelopment). disposing of real property when established economic development [FR Doc. 01–2535 Filed 1–29–01; 8:45 am] implementing base closures. Only conveyances as a means of disposing of BILLING CODE 3810–FF–M where Congress has expressly provided surplus base closure property. The additional authority for disposing of selection of any particular method of base closure property, e.g., the economic conveyance merely implements the DEPARTMENT OF ENERGY development conveyance authority Federal agency’s decision to dispose of established in 1993 by Section the property. Decisions concerning Bonneville Power Administration 2905(b)(4) of the DBCRA, may Navy whether to undertake a public benefit apply disposal procedures other than conveyance or an economic Shelton-Kitsap Transmission Line those in the FRMR. development conveyance, or to sell Rebuild In Section 2901 of the National property by negotiation or by AGENCY: Bonneville Power Defense Authorization Act for Fiscal competitive bid, are left to the Federal Administration (BPA), U.S. Department Year 1994, Public Law 103–160, agency’s discretion. Selecting a method of Energy (DOE). Congress recognized the economic of disposal implicates a broad range of hardship occasioned by based closures, factors and rests solely within the ACTION: Finding of no significant impact the Federal interest in facilitating Secretary of the Navy’s discretion. (FONSI) and floodplain statement of economic recovery of base closure Conclusion: The LRA’s proposed findings. communities, and the need to identify reuse of Naval Station Brooklyn, and implement reuse and SUMMARY: This notice announces BPA’s reflected in the Reuse Plan, is consistent proposal to rebuild its existing Shelton- redevelopment of property at closing with the requirements of the FPMR and installations. In Section 2903(c) of Kitsap No. 2 115-kilovolt (kV) Section 174.4 of the DoD Rule. The LRA transmission line as a double-circuit Public Law 103–160, Congress directed has determined in its Reuse Plan that the Military Departments to consider 230-kV line in the existing right-of-way the property should be used for various (ROW), in order to improve system each base closure community’s purposes including industrial, economic needs and priorities in the capability and reliability. BPA has institutional, commercial, open space prepared an Environmental Assessment property disposal process. Under and recreational activities. The Section 2905(b)(2)(E) of the DBCRA, (EA) (DOE/EA–1342) evaluating the property’s location and physical proposed project. Based on the analysis Navy must consult with local characteristics as well as the current communities before it disposes of base in the EA, BPA has determined that the uses of adjacent property make it proposed action is not a major Federal closure property and must consider appropriate for the proposed uses. local plans developed for reuse and action significantly affecting the quality The Reuse Plan responds to local redevelopment of the surplus Federal of the human environment, within the economic conditions, promotes property. meaning of the National Environmental The Department of Defense’s goal, as economic recovery from the impact of Policy Act (NEPA) of 1969. Therefore, set forth in Section 174.4 of the DoD the closure of the Naval Station, and is the preparation of an Environmental Rule, is to help base closure consistent with President Clinton’s Impact Statement (EIS) is not required communities achieve rapid economic Five-Part Plan for Revitalizing Base and BPA is issuing this FONSI. recovery through expeditious reuse and Closure Communities, which A finding is included that there is no redevelopment of the assets at closing emphasizes local economic practicable alternative to locating the bases, taking into consideration local redevelopment and creation of new jobs project within a 100-year floodplain. as the means to revitalize these market conditions and locally ADDRESSES: For copies of this FONSI or communities. 32 CFR parts 174 and 175, developed reuse plans. Thus, the the EA, please call BPA’s toll-free 59 FR 16123 (1994). Department has adopted a consultative document request line: 800–622–4520. Although the ‘‘No Action’’ Alternative approach with each community to It is also available at the BPA, has less potential for causing adverse ensure that property disposal decisions Environment, Fish and Wildlife website: environmental impacts, this Alternative consider the LRA’s reuse plan and www.efw.bpa.gov. encourage job creation. As a part of this would not take advantage of the FOR FURTHER INFORMATION, CONTACT: cooperative approach, the base closure property’s location and physical Dawn R. Boorse—KEC–4, Bonneville community’s interest, as reflected in its characteristics or the current uses of Power Administration, P.O. Box 3621, zoning for the area, play a significant adjacent property. Additionally, it Portland, Oregon, 97208–3621; role in determining the range of would not foster local economic telephone number 503–230–5678; fax alternatives considered in the redevelopment of the Naval Station number 503–230–5699; e-mail environmental analysis for property property. [email protected]. disposal. Furthermore, Section The acquiring entity, under the 175.7(d)(3) of the DoD Rule provides direction of Federal, State, and local SUPPLEMENTARY INFORMATION: BPA’s that the LRA’s plan generally will be agencies with regulatory authority over existing Shelton-Kitsap No. 2 115-kV used as the basis for the proposed protected resources, will be responsible transmission line is approximately 31 disposal action. for adopting practicable means to avoid miles in length and is located in Mason The Federal Property and or minimize environmental harm that and Kitsap Counties in Washington Administrative Services Act of 1949, 40 may result from implementing the State. In addition to this 115-kV line, U.S.C. 484 (1944), as implemented by Reuse Plan. there are two existing 230-kV the FPMR, identifies several Accordingly, Navy will dispose of transmission lines in the corridor mechanisms for disposing of surplus Naval Station Brooklyn in a manner that between BPA’s Shelton Substation and base closure property: by public benefit is consistent with the City of New its Kitsap Substation. To improve conveyance (FPMR Sec. 101–47.303–2); York’s Reuse Plan for the property. system capability and reliability, BPA is
VerDate 11
proposing a joint project with Puget the south side of the BPA Kitsap Sherwood Creek. No impacts to the Sound Energy (PSE) to rebuild BPA’s Substation on BPA property. The tree floodplains would occur because no existing Shelton-Kitsap No. 2 115-kV removal is necessary to route the line construction activities within the line as a double-circuit 230-kV line in around the Kitsap Substation and floodplains would be associated with the existing right-of-way. One circuit interconnect with PSE’s existing Kitsap- the proposed project, and their would replace the existing 115-kV line South Bremerton No. 3 line. The floodplain characteristics would not be and would initially be operated at 115- amount of clearing would be relatively altered. The proposed action conforms kV. The other circuit would be a new small, and low-growing vegetation to applicable State or local floodplain circuit operated at 230 kV. would regrow in the cleared area. protection standards. The new 230-kV circuit would be No impacts are expected to wetlands BPA will endeavor to allow 15 days routed around BPA’s Kitsap Substation and floodplains, public health and of public review after publication of this and would interconnect with PSE’s safety, and cultural resources. During statement of findings before existing Kitsap-South Bremerton No. 3 review of the Preliminary EA, the implementing the proposed action. line. The Kitsap-South Bremerton No. 3 Squaxin Island Tribe discussed with line (constructed for 230 kV but BPA the presence of areas of cultural Determination currently operating at 115 kV) would be sensitivity in the project vicinity. A Based on the information in the EA, re-energized at 230 kV and terminated at Draft Memorandum of Agreement as summarized here, BPA determines a new 230/115-kV transformer at the between BPA and the Tribe has been that the proposed action is not a major South Bremerton Substation. prepared to ensure protection of the Federal action significantly affecting the Transmission planning studies have culturally sensitive areas. quality of the human environment shown that if one of the two existing BPA also studied the No Action within the meaning of NEPA, 42 U.S.C. 230-kV transmission lines to the Kitsap Alternative. The No Action Alternative 4321 et seq. Therefore, an EIS will not Substation or one of the two existing would be to continue with the current be prepared and BPA is issuing this 230/115-kV transformers at Kitsap is out Dispatcher Standing Operating Order, FONSI. of service, the remaining facilities which defines actions to be taken under serving electrical loads on the Kitsap peak load normal system and outage Issued in Portland, Oregon, on January 17, 2001. Peninsula could experience thermal conditions to mitigate potential loading beyond their rated capabilities. overload and low voltage conditions. Robert W. Beraud, Thermal overloading of transmission BPA currently has an agreement with Manager, Environmental Analysis. facilities could result in failure or the U.S. Navy, whereby BPA, in an [FR Doc. 01–2573 Filed 1–29–01; 8:45 am] damage of equipment as well as emergency, and for a very short BILLING CODE 6450–01–U violation of National Electrical Safety duration, could connect the Navy’s Code standards. These outage backup generators to BPA’s conditions may also cause system transmission system while the problem DEPARTMENT OF ENERGY voltages to drop below acceptable levels was being repaired. However, since the and eventually lead to voltage collapse agreement was put into place the Federal Energy Regulatory resulting in loss of load. BPA needs to region’s electrical load has grown such Commission correct and improve these conditions on that, even with the generators, the [Docket No. RP01–124–001] its Shelton-Kitsap 115-kV line. electrical system is inadequate to supply Construction of the proposed line the needed electricity. In addition, if the Algonquin Gas Transmission would cause short-term construction- Navy needs the generators for their own Company; Notice of Compliance Filing related impacts to land use, emergency purposes, they may cease socioeconomic, visual, soils, and support to BPA at any time. BPA’s January 24, 2001. vegetation resources. These would agreement with the Navy to use its Take notice that on January 16, 2001, include noise, dust, traffic disruption, generators expires in 2001 and will not Algonquin Gas Transmission Company erosion, and possible growth of noxious be extended for the long term. Outages (Algonquin) tendered its filing in weeds in the ROW from ground surface will occur if BPA experiences problems compliance with the Commission’s and vegetation disturbance during on the system without the rebuild. letter order in Docket No. RP01–124– construction. Temporary increases in The Proposed Action would not 000 [93 FERC 61,318 (2000)] issued on the use of local motels/hotels, violate Federal, State, or local law or December 29, 2000 (December 29 recreational parks, and campgrounds by requirements imposed for protection of Order). construction workers, and short-term the environment. All permits are in Algonquin states that the purpose of increases in local employment and place. this filing is to comply with the spending in the local economy, would requirements of the December 29 Order also occur. Minor visual impacts may Floodplain Statement of Findings to submit a revised, executed service occur from construction activities in This is a Floodplain Statement of agreement between Algonquin and US certain locations along the ROW. Findings prepared in accordance with GEN New England, Inc. (USGen) for Potential increases in soil erosion due to 10 CFR Part 1022. A Notice of firm lateral service that conforms to the access road improvements, pole Floodplain and Wetlands Involvement Rate Schedule AFT–CL form of service assembly and erecting, and clearing to was published in the Federal Register agreement contained in Algonquin’s provide access to work areas would on September 15, 2000, and a floodplain tariff and a statement detailing the rate occur. However, in the long term, and wetlands assessment was and term of the prearranged capacity erosion rates are expected to return to incorporated in the EA (section 3.7). release to USGen under Rate Schedule pre-construction rates. BPA is proposing to rebuild its existing AFT–CL. Long-term impacts would be the Shelton-Kitsap No. 2 115-kV Algonquin also states that copies of removal of approximately 0.5 acre of transmission line as a double-circuit the filing were mailed to all parties to young forested woodland, with 230-kV line in the existing right-of-way Docket No. RP01–124–000 and also all accompanying loss of shade on a small which crosses the 100-year floodplains affected customers and interested state non-fish-bearing stream at the site near of Johns Creek, Cranberry Creek, and commissions.
VerDate 11
Any person desiring to protest said determining the appropriate action to be inspection in the Public Reference filing should file a protest with the taken, but will not serve to make Room. This filing may be viewed on the Federal Energy Regulatory Commission, protestants parties to the proceedings. web at http://www.ferc.fed.us/online/ 888 First Street, N.E., Washington, D.C. Any person wishing to become a party rims.htm (call 202–208–2222 for 20426, in accordance with section must file a motion to intervene. Copies assistance). Comments and protests may 385.211 of the Commission’s Rules and of this filing are on file with the be filed electronically via the internet in Regulations. All such protests must be Commission and are available for public lieu of paper. See, 18 CFR filed in accordance with section 154.210 inspection in the Public Reference 385.2001(a)(1)(iii) and the instructions of the Commission’s Regulations. Room. This filing may be viewed on the on the Commission’s web site at http:/ Protests will be considered by the web at http://www.ferc.fed.us/online/ /www.ferc.fed.us/efi/doorbell.htm. Commission in determining the rims.htm (call 202–208–2222 for Linwood A. Watson, Jr., appropriate action to be taken, but will assistance). Comments and protests may not serve to make protestants parties to be filed electronically via the internet in Acting Secretary. the proceedings. Copies of this filing are lieu of paper. See, 18 CFR [FR Doc. 01–2546 Filed 1–29–01; 8:45 am] on file with the Commission and are 385.2001(a)(1)(iii) and the instructions BILLING CODE 6717–01–M available for public inspection in the on the Commission’s web site at Public Reference Room. This filing may http://www.ferc.fed.us/efi/doorbell.htm. be viewed on the web at http:// DEPARTMENT OF ENERGY Linwood A. Watson, Jr., www.ferc.fed.us/online/rims.htm (call Acting Secretary. Federal Energy Regulatory 202–208–2222 for assistance). Commission Comments and protests may be filed [FR Doc. 01–2552 Filed 1–29–01; 8:45 am] electronically via the internet in lieu of BILLING CODE 6717–01–M [Docket No. CP01–68–000] paper. See, 18 CFR 385.2001(a)(1)(iii) and the instructions on the Indiana Gas Company, Inc.; Notice of DEPARTMENT OF ENERGY Commission’s web site at http:// Application www.ferc.fed.us/efi/doorbell.htm. Federal Energy Regulatory January 24, 2001. Linwood A. Watson, Jr., Commission On January 19, 2001, Indiana Gas Acting Secretary. [Docket No. RP96–389–018] Company, Inc. (Indiana Gas), 1630 [FR Doc. 01–2554 Filed 1–29–01; 8:45 am] North Meridian Street, P.O. Box 44945, Indianapolis, Indiana 46244–0945, filed BILLING CODE 6717–01–M Columbia Gulf Transmission Co.; Notice of Negotiated Rate Filing in Docket No. CP01–68–000 an application pursuant to Section 7(f) of January 24, 2001. DEPARTMENT OF ENERGY the Natural Gas Act (NGA) to expand its Take notice that on January 16, 2001, service area determination in Jefferson Federal Energy Regulatory Columbia Gulf Transmission Company and Oldham Counties, Kentucky to Commission (Columbia Gulf), tendered for filing the include an area two miles north and following contract for disclosure of a one-half mile south of the existing area, [Docket No. RP01–211–000] recently negotiated rate transaction: all as more fully set forth in the ANR Pipeline Company; Notice of ITS–2 Service Agreement No. 70332 between application which is on file with the Proposed Changes in FERC Gas Tariff Columbia Gulf Transmission Company and Commission and open to public Transworld Explanation and Production, inspection. The filing may be viewed at January 24, 2001. Inc., dated December 19, 2000. http://www.ferc.fed.us/online/rims.htm Take notice that on January 19, 2001, Transportation service which is (call 202–208–2222 for assistance). ANR Pipeline Company (ANR), scheduled to commence upon Indiana Gas states that the expanded tendered for filing as part of its FERC Commission authorization. service area will give Indiana Gas the Gas Tariff, Second Revised Volume No. Columbia Gulf states that copies of flexibility needed to purchase the right- 1, the Sixth Revised Sheet No. 45E.01 to the filing have been served on all parties of-way associated with a new 12.6-mile be effective March 1, 2001. on the official service list created by the pipeline in the two counties to be used ANR states that the purpose of this Secretary in this proceeding. to provide reliable natural gas service to filing is to designate in its tariff a new Any person desiring to be heard or to existing and future retail residential, point eligible for service under its protest said filing should file a motion commercial and industrial customers in existing Rate Schedule IPLS. to intervene or a protest with the the Greater Louisville Metropolitan ANR states that copies of the filing Federal Energy Regulatory Commission, Area, in particular Clark and Floyd have been mailed to all affected 888 First Street, NE., Washington, DC Counties, Indiana. Indiana Gas indicates customers and state regulatory 20426, in accordance with sections that, although the needed construction commissions. 385.214 or 385.211 of the Commission’s could occur within the existing right-of- Any person desiring to be heard or to Rules and Regulations. All such motions way, such an approach would adversely protest said filing should file a motion or protests must be filed in accordance affect landowners because of the to intervene or a protest with the with section 154.210 of the significant residential development Federal Energy Regulatory Commission, Commission’s Regulations. Protests will along the existing facilities subsequent 888 First Street, N.E., Washington, D.C. be considered by the Commission in to their construction in 1952. 20426, in accordance with Sections determining the appropriate action to be In addition to the request to expand 385.214 or 385.211 of the Commission’s taken, but will not serve to make the Section 7(f) service area Rules and Regulations. All such motions protestants parties to the proceedings. determination, Indiana Gas also requests or protests must be filed in accordance Any person wishing to become a party (1) a finding that Indiana Gas qualifies with Section 154.210 of the must file a motion to intervene. Copies as a local distribution company for Commission’s Regulations. Protests will of this filing are on file with the purposes of Section 311 of the Natural be considered by the Commission in Commission and are available for public Gas Policy Act of 1978 (NGPA), and (2)
VerDate 11
a waiver of the Commission’s Commission’s web site at http:// //www.ferc.fed.us/efi/doorbell.htm. accounting and reporting requirements www.ferc.fed.us/efi/doorbell.htm. David P. Boergers, and other regulatory requirements If the Commission decides to set the ordinarily applicable to natural gas application for a formal hearing before Secretary. companies under the Natural Gas Act an Administrative Law Judge, the [FR Doc. 01–2555 Filed 1–29–01; 8:45 am] and the NGPA. Indiana Gas also Commission will issue another notice BILLING CODE 6717–01–M requests that the Commission clarify describing that process. At the end of that its service area determination also the Commission’s review process, a includes Jefferson County, Kentucky. final Commission order approving or DEPARTMENT OF ENERGY Questions regarding the details of this denying a certificate will be issued. proposed project should be directed to Federal Energy Regulatory John E. Fansher, Manager, Land Linwood A. Watson, Jr., Commission Department, at (317) 301–0598, or in Acting Secretary. writing to his attention at the above [FR Doc. 01–2548 Filed 1–29–01; 8:45 am] [Docket No. EC01–20–000] address. BILLING CODE 6717–01–M There are two ways to become Northwestern Wisconsin Electric involved in the Commission’s review of Company; Notice of Filing this project. First, any person wishing to DEPARTMENT OF ENERGY January 24, 2001. obtain legal status by becoming a party to the proceedings for this project Federal Energy Regulatory Take notice that on January 22, 2001, should, on or before February 14, 2001, Commission Northwestern Wisconsin Electric file with the Federal Energy Regulatory Company (NWE), tendered for filing Commission, 888 First Street, NE, [Docket No. ER01–352–001] pursuant to Section 203 of the Federal Washington, DC 20426, a motion to Power Act, 16 U.S.C. Section 8245b, an intervene in accordance with the Natural Gas Trading Corporation; amendment to its Application for requirements of the Commission’s Rules Notice of Filing approval to transfer operational control of Practice and Procedure (18 CFR over certain identified transmission January 16, 2001. 385.214 or 385.211) and the Regulations facilities to the Midwest Independent under the NGA (18 CFR 157.10). A Take notice that on January 10, 2001, Transmission System Operator, Inc. person obtaining party status will be Natural Gas Trading Corporation (Midwest ISO). NWE states in the placed on the service list maintained by (NGTC) petitions the Commission for amendment that NWE’s application to the Secretary of the Commission and acceptance of NGTC Rate Schedule transfer operational control of the will receive copies of all documents FERC No, 1; the granting of certain identified facilities to the Midwest ISO filed by the applicant and by all other blanket approvals, including the will not adversely affect competition, parties. A party must submit 14 copies authority to sell electricity at market rates, regulation or generation. of filings made with the Commission based rates; and the waiver of certain Commission Regulations. NWE states the filing has been served and must mail a copy to the applicant on the Public Service Commission of and to every other party in the NGTC intends to engage in wholesale electric power and energy purchases Wisconsin; the Midwest ISO; Dairyland proceeding. Only parties to the Power Cooperative; Xcel Energy; the proceeding can ask for court review of and sales as a marketer. NGTC is not in the business of generating or Village of Centuria, Wisconsin; Ziegler Commission orders in the proceeding. Incorporated; Utilities Plus; and Polk- However, a person does not have to transmitting electric power. Burnett Electric Cooperative. intervene in order to have comments Any person desiring to be heard or to considered. The second way to protest such filing should file a motion Any person desiring to be heard or to participate is by filing with the to intervene or protest with the Federal protest such filing should file a motion Secretary of the Commission, as soon as Energy Regulatory Commission, 888 to intervene or protest with the Federal possible, an original and two copies of First Street, NE., Washington, DC 20426, Energy Regulatory Commission, 888 comments in support of or in opposition in accordance with rules 211 and 214 of First Street, NE., Washington, DC 20426, to this project. The Commission will the Commission’s Rules of Practice and in accordance with Rules 211 and 214 consider these comments in Procedure (18 CFR 385.211 and of the Commission’s Rules of Practice determining the appropriate action to be 385.214). All such motions and protests and Procedure (18 CFR 385.211 and taken, but the filing of a comment alone should be filed on or before January 31, 385.214). All such motions and protests will not serve to make the filer a party 2001. Protests will be considered by the should be filed on or before February 2, to the proceeding. The Commission’s Commission to determine the 2001. Protests will be considered by the rules require that persons filing appropriate action to be taken, but will Commission to determine the comments in opposition to the project not serve to make protestants parties to appropriate action to be taken, but will provide copies of their protests only to the proceedings. Any person wishing to not serve to make protestants parties to the party or parties directly involved in become a party must file a motion to the proceedings. Any person wishing to the protest. intervene. Copies of this filing are on become a party must file a motion to Non-party commenters will not file with the Commission and are intervene. Copies of this filing are on receive copies of all documents filed by available for public inspection. This file with the Commission and are other parties or issued by the filing may also be viewed on the available for public inspection. This Commission and will not have the right Internet at http://www.ferc.fed.us/ filing may also be viewed on the to seek court review of the online/rims.htm (call 202–208–2222 for Internet at http://www.ferc.fed.us/ Commission’s final order. assistance). Comments and protests may online/rims.htm (call 202–208–2222 for Comments and protests may be filed be filed electronically via the internet in assistance). Comments and protests may electronically via the internet in lieu of lieu of paper. See, 18 CFR be filed electronically via the internet in paper. See, 18 CFR 385.2001(a)(1)(iii) 385.2001(a)(1)(iii) and the instructions lieu of paper. See, 18 CFR and the instructions on the on the Commission’s web site at http: 385.2001(a)(1)(iii) and the instructions
VerDate 11
on the Commission’s web site at http: Regulations. All such protests must be Comments and protests may be filed //www.ferc.fed.us/efi/doorbell.htm. filed in accordance with Section electronically via the internet in lieu of Linwood A. Watson, Jr., 154.210 of the Commission’s paper. See, 18 CFR 385.2001(a)(1)(iii) Regulations. Protests will be considered and the instructions on the Acting Secretary. by the Commission in determining the Commission’s web site at http:// [FR Doc. 01–2549 Filed 1–29–01; 8:45 am] appropriate action to be taken, but will www.ferc.fed.us/efi/doorbell.htm. BILLING CODE 6717–01–M not serve to make protestants parties to Linwood A. Watson, Jr., the proceedings. Copies of this filing are on file with the Commission and are Acting Secretary. DEPARTMENT OF ENERGY available for public inspection in the [FR Doc. 01–2550 Filed 1–29–01; 8:45 am] BILLING CODE 6717–01–M Federal Energy Regulatory Public Reference Room. This filing may Commission be viewed on the web at http:// www.ferc.fed.us/online/rims.htm (call [Docket No. RP01–182–002] 202–208–2222 for assistance). DEPARTMENT OF ENERGY Comments and protests may be filed Texas Eastern Transmission Federal Energy Regulatory electronically via the internet in lieu of Corporation; Notice of Compliance Commission paper. See, 18 CFR 385.2001(a)(1)(iii) Filing and the instructions on the [Docket Nos. RP97–269–003 and RP99–249– 002] January 24, 2001. Commission’s web site at http:// www.ferc.fed.us/efi/doorbell.htm. Take notice that on January 16, 2001, Williston Basin Interstate Pipeline Co.; Texas Eastern Transmission Corporation Linwood A. Watson, Jr., Notice of Compliance Filing and (Texas Eastern), tendered for filing as Acting Secretary. Refund Report part of its FERC Gas Tariff, Sixth [FR Doc. 01–2551 Filed 1–29–01; 8:45 am] Revised Volume No. 1, the following January 24, 2001. tariff sheets, to be effective on January BILLING CODE 6717–01–M Take notice that on January 19, 2001, 7, 2001: Williston Basin Interstate Pipeline Second Sub First Revised Sheet No. 456A DEPARTMENT OF ENERGY Company (Williston Basin), tendered for Sub First Revised Sheet No. 456B filing with the Commission certain Texas Eastern states that the purpose Federal Energy Regulatory revised tariff sheets to Original Volume of this filing is to comply with the Commission No. 2 of its FERC Gas Tariff and a Refund Report in compliance with the directives of the Commission’s Letter [Docket No. RP01–194–001] Order dated January 5, 2001, in Docket Commission’s Orders issued October 21, Nos. RP01–182–000 and RP01–182–001 Viking Gas Transportation Company; 1998 and December 17, 1997, which (January 5 Order). Notice of Compliance Filing were upheld by the United States Court Texas Eastern states that on December of Appeals for the Eighth Circuit in an 7, 2000, revised tariff sheets were filed January 24, 2001. opinion issued June 27, 2000 in Case in this docket in order to make the Take notice that on January 18, 2001, Nos. 98–4079 and 99–3554. benefits and opportunities of e- Viking Gas Transmission Company Williston Basin states that it has commerce available to Texas Eastern’s (Viking), tendered for filing as part of its revised its Rate Schedule X–13 rate to existing and potential customers. The FERC Gas Tariff, First Revised Volume reflect the final return on equity proposed tariff modifications permit No. 1, Fourth Revised Tariff Sheet No. reflected in the Commission’s Order customers to request service agreements 144, with an effective date of January 1, issued November 21, 2000 in Docket electronically and to execute such 2001. Nos. RP95–364–000, et al. contracts on-line via the LINKr System, Viking states that the filing is being Williston Basin also states that on as well as to expedite the net present made in compliance with the January 29, 2001, a refund of the value contract request and contract Commission’s January 11, 2001 Letter amount owed should be received by execution processes. Order issued in Docket No RP01–194– Northern States Power Company for the Texas Eastern states that the January 000. locked in period March 1, 1997 through 5 Order accepted Texas Eastern’s Any person desiring to protest said December 31, 2000 with interest December 7 tariff filing, effective filing should file a protest with the through January 19, 2001, in accordance January 7, 2001, subject to the condition Federal Energy Regulatory Commission, with Section 154.501 of the that Texas Eastern file, within ten days 888 First Street, NE., Washington, DC Commission’s Regulations. of the January 5 Order, revised tariff 20426, in accordance with Section Any person desiring to protest said sheets to (i) maintain its tariff provision 385.211 of the Commission’s Rules and filing should file a protest with the awarding capacity on a pro rata basis Regulations. All such protests must be Federal Energy Regulatory Commission, and (ii) continue to allow a shipper to filed in accordance with Section 888 First Street, NE., Washington, DC withdraw a request for service prior to 154.210 of the Commission’s 20426, in accordance with section the close of the open season. Regulations. Protests will be considered 385.211 of the Commission’s Rules and Texas Eastern states that copies of its by the Commission in determining the Regulations. All such protests must be filing have been mailed to all affected appropriate action to be taken, but will filed on or before January 31, 2001. customers and interested state not serve to make protestants parties to Protests will be considered by the commissions. the proceedings. Copies of this filing are Commission in determining the Any person desiring to protest said on file with the Commission and are appropriate action to be taken, but will filing should file a protest with the available for public inspection in the not serve to make protestants parties to Federal Energy Regulatory Commission, Public Reference Room. This filing may the proceedings. Copies of this filing are 888 First Street, N.E., Washington, D.C. be viewed on the web at http:// on file with the Commission and are 20426, in accordance with Section www.ferc.fed.us/online/rims.htm (call available for public inspection in the 385.211 of the Commission’s Rules and 202–208–2222 for assistance). Public Reference Room. This filing may
VerDate 11
be viewed on the web at http:// tendered for filing its FERC Electric Comment date: February 7, 2001, in www.ferc.fed.us/online/rims.htm (call Tariff, Original Volume No. 1 (Tariff) accordance with Standard Paragraph E 202–208–2222 for assistance). with conforming rate designations in at the end of this notice. Comments and protests may be filed accordance with the letter order issued 6. Allegheny Energy Service Corp. on electronically via the internet in lieu of in the above-captioned docket on behalf of Allegheny Energy Supply Co., paper. See, 18 CFR 385.2001(a)(1)(iii) January 5, 2001 (Letter Order). In LLC and the instructions on the accordance with the Letter Order, only Commission’s web site at http:// the Tariff’s rate designations were [Docket No. ER01–986–000] www.ferc.fed.us/efi/doorbell.htm. modified in order to conform to Order Take notice that on January 18, 2001, No. 614, and no other changes were Linwood A. Watson, Jr., Allegheny Energy Service Corporation made. on behalf of Allegheny Energy Supply Acting Secretary. Comment date: February 7, 2001, in Company, LLC (Allegheny Energy [FR Doc. 01–2545 Filed 1–29–01; 8:45 am] accordance with Standard Paragraph E Supply), tendered for filing Service BILLING CODE 6717–01–M at the end of this notice. Agreement No. 109 to add one (1) new 3. Duke Energy McClain, LLC Customer to the Market Rate Tariff under which Allegheny Energy Supply DEPARTMENT OF ENERGY [Docket No. ER01–566–001] offers generation services. FEDERAL ENERGY REGULATORY Take notice that on January 17, 2001, Allegheny Energy Supply requests a COMMISSION Duke Energy McClain, LLC (Duke waiver of notice requirements for an McClain), tendered for filing its FERC effective date of January 1, 2001 for [Docket No. ER994235–003, et al.] Electric Tariff, Original Volume No. 1 service to the Borough of Park Ridge. (Tariff) with conforming rate Copies of the filing have been New York Independent System designations in accordance with the provided to the Public Utilities Operator, Inc., et al.; Electric Rate and letter order issued in the above- Commission of Ohio, the Pennsylvania Corporate Regulation Filings captioned docket on January 3, 2001 Public Utility Commission, the January 23, 2001. (Letter Order). In accordance with the Maryland Public Service Commission, Take notice that the following filings Letter Order, only the Tariff’s rate the Virginia State Corporation have been made with the Commission: designations were modified in order to Commission, the West Virginia Public conform to Order No. 614, and no other Service Commission, and all parties of 1. New York Independent System changes were made. record. Operator, Inc. Comment date: February 7, 2001, in Comment date: February 8, 2001, in [Docket Nos. ER99–4235–003; ER00–798– accordance with Standard Paragraph E accordance with Standard Paragraph E 003; ER01–461–001] at the end of this notice. at the end of this notice. Take notice that on January 18, 2001, 4. Duke Energy Hinds, LLC 7. American Transmission Systems, the New York Independent System [Docket No. ER01–691–001] Inc.; Ohio Edison Co.; The Cleveland Operator, Inc. (NYISO), tendered for Electric Illuminating Co.; The Toledo filing a complete version of FERC Take notice that on January 17, 2001, Edison Co. Electric Tariff Original Volume No. 2, Duke Energy Hinds, LLC (Duke Hinds), the Market Administration and Control tendered for filing its FERC Electric [Docket No. ER01–987–000] Area Services Tariff, in order to comply Tariff, Original Volume No. 1 (Tariff) Take notice that on January 18, 2001, with Commission Order No. 614, on the with conforming rate designations in American Transmission Systems, Inc., designation of electric rate schedules, accordance with the letter order issued tendered for filing on behalf of itself and and the Commission’s December 18, in the above-captioned docket on Ohio Edison Company, The Cleveland 2000 Letter Order in the above- January 9, 2001 (Letter Order). In Electric Illuminating Company, and The captioned dockets. The NYISO also files accordance with the Letter Order, only Toledo Edison Company, Service revisions to update its FERC Electric the Tariff’s rate designations were Agreements for Network Integration Tariff Original Volume No. 1, the Open modified in order to conform to Order Service and Operating Agreements for Access Transmission Tariff, pursuant to No. 614, and no other changes were the Network Integration Transmission the same letter order. The filings effect made. Service under the Ohio Retail Electric no substantive changes to the tariff. Comment date: February 7, 2001, in Program with Nicor Energy, L.L.C. and The NYISO has requested an effective accordance with Standard Paragraph E AES NewEnergy, Inc., pursuant to the date of January 2, 2001 for the filing, at the end of this notice. American Transmission Systems, Inc. Open Access Tariff. These agreements and has requested waiver of the 5. Indianapolis Power & Light Co. Commission’s notice requirements. will enable the parties to obtain The NYISO has requested waiver of [Docket No. ER01–718–001] Network Integration Service under the the Commission’s service requirements. Take notice that on January 17, 2001, Ohio Retail Electric Program in The documents are available for Indianapolis Power & Light Company accordance with the terms of the Tariff. download from the NYISO’s website at (IPL), tendered for filing an amendment The proposed effective date under www.nyiso.com. Copies will be of the First Amendment to the these agreements is January 1, 2001. provided upon request. Interconnection, Operation and Comment date: February 8, 2001, in Comment date: February 8, 2001, in Maintenance Agreement with DTE accordance with Standard Paragraph E accordance with Standard Paragraph E Georgetown, L.L.C., filed with the at the end of this notice. at the end of this notice. Commission on December 18, 2000 8. PJM Interconnection, LLC 2. Duke Energy Lee, LLC filing in the above-referenced docket. Copies of the amended filing were [Docket No. ER01–988–000] [Docket No. ER01–545–001] served on the Indiana Utility Regulatory Take notice that on January 18, 2001, Take notice that on January 17, 2001, Commission and DTE Georgetown, PJM Interconnection, L.L.C. (PJM), Duke Energy Lee, LLC (Duke Lee), L.L.C. tendered for filing amendments to Part
VerDate 11
IV of the PJM Open Access Comment date: February 8, 2001, in Comment date: February 8, 2001, in Transmission Tariff to amend its accordance with Standard Paragraph E accordance with Standard Paragraph E generation interconnection study at the end of this notice. at the end of this notice. procedures to specify that feasibility 12. Southern Energy Chalk Point, LLC 16. Tampa Electric Co. and impact studies will be conducted on a bi-annual basis. [Docket No. ER01–992–000] [Docket No. ER01–996–000] Copies of this filing were served upon Take notice that on January 18, 2001, Take notice that on January 18, 2001, all PJM members and each state electric Southern Energy Chalk Point, LLC (SE Tampa Electric Company (Tampa utility regulatory commission in the Chalk Point), tendered for filing with Electric), tendered for filing a service PJM control area. the Federal Energy Regulatory agreement with Coral Power L.L.C. PJM requests a waiver of the Commission a short-term Master Power (Coral), under Tampa Electric’s market- Commission’s 60-day notification Purchase and Sale Agreement dated based sales tariff. requirement to permit an effective date December 18, 2000, between Southern Tampa Electric proposes that the of January 31, 2001. Company Energy Marketing, L.P. and SE service agreement be made effective on Comment date: February 8, 2001, in Chalk Point for sales under SE Chalk December 22, 2000, and gives notice of accordance with Standard Paragraph E Point’s Market Rate Tariff, which was its termination as of February 1, 2001. Copies of the filing have been served at the end of this notice. accepted for filing in Document No. ER00–3760–000. on Coral and the Florida Public Service 9. Green Mountain Power Corp. Comment date: February 8, 2001, in Commission. Comment date: February 8, 2001, in [Docket No. ER01–989–000] accordance with Standard Paragraph E at the end of this notice. accordance with Standard Paragraph E Take notice that on January 18, 2001, at the end of this notice. Green Mountain Power Corporation 13. MEP Pleasant Hill, LLC 17. Duke Energy Corp. (GMP), tendered for filing its proposed [Docket No. ER01–993–000] FERC Electric Tariff, Original Volume [Docket No. ER01–997–000] No. 4, a market-based rate power sales Take notice that on January 18, 2001, MEP Pleasant Hill, LLC (MEPPH), Take notice that on January 18, 2001, tariff that includes a form of umbrella Duke Energy Corporation (Duke), service agreement and code of conduct. tendered for filing Service Agreement No. 2 under its FERC Electric Tariff, tendered for filing a Service Agreement GMP requests waiver of the Volume No. 1, providing for sales of with Engage Energy America LLC, for Commission’s notice of filing electric energy to Missouri Public Non-Firm Transmission Service under requirements in order to allow the Service. Duke’s Open Access Transmission proposed market-based rate tariff to Comment date: February 8, 2001, in Tariff. become effective on January 19, 2001. Duke requests that the proposed accordance with Standard Paragraph E Service Agreement be permitted to Comment date: February 8, 2001, in at the end of this notice. accordance with Standard Paragraph E become effective on January 9, 2001. at the end of this notice. 14. Tampa Electric Co. Duke states that this filing is in accordance with Part 35 of the [Docket No. ER01–994–000] 10. California Independent System Commission’s Regulations and a copy Operator Corp. Take notice that on January 18, 2001, has been served on the North Carolina Tampa Electric Company (Tampa [Docket No. ER01–991–000] Utilities Commission. Electric), tendered for filing a service Comment date: February 8, 2001, in Take notice that on January 18, 2001, agreement with Duke Energy Trading accordance with Standard Paragraph E the California Independent System and Marketing, L.L.C. (Duke Energy), at the end of this notice. Operator Corporation (ISO), tendered for under Tampa Electric’s market-based filing Amendment No. 37 to the ISO sales tariff. 18. Duke Energy Corp. Tariff. The ISO states that Amendment Tampa Electric proposes that the [Docket No. ER01–998–000] No. 37 is intended to modify the service agreement be made effective on Take notice that on January 18, 2001, bidding requirements for Reliability December 22, 2000. Duke Energy Corporation (Duke), Must-Run (RMR) Unit Owners whose Copies of the filing have been served tendered for filing a Service Agreement Units are dispatched by the ISO prior to on Duke Energy and the Florida Public with Engage Energy America LLC for the close of the PX Markets who chose Service Commission. Firm Point-to-Point Transmission be paid under the terms of the RMR Comment date: February 8, 2001, in Service under Duke’s Open Access Contract rather than through the market. accordance with Standard Paragraph E Transmission Tariff. Such an Owner would be exempted at the end of this notice. Duke requests that the proposed from the requirement that the RMR 15. Tampa Electric Co. Service Agreement be permitted to Contract Energy be bid into the PX Day- become effective on January 9, 2001. Ahead Market if it is prohibited from [Docket No. ER01–995–000] Duke states that this filing is in bidding into that market by law or Take notice that on January 18, 2001, accordance with Part 35 of the regulation or because it disqualified Tampa Electric Company (Tampa Commission’s Regulations and a copy under the terms of the PX Tariff. Electric), tendered for filing a service has been served on the North Carolina The ISO requests waiver of the agreement with Oglethorpe Power Utilities Commission. Commission’s notice requirements and Corporation (Oglethorpe) under Tampa Comment date: February 8, 2001, in an effective date of January 18, 2001. Electric’s market-based sales tariff. accordance with Standard Paragraph E The ISO states that this filing has been Tampa Electric proposes that the at the end of this notice. served on the California Public Utilities service agreement be made effective on 19. Duke Energy Corp. Commission, the California Electricity December 20, 2000. Oversight Board, all parties to Must Run Copies of the filing have been served [Docket No. ER01–999–000] Service Agreements and all California on Oglethorpe and the Florida Public Take notice that on January 18, 2001, ISO Scheduling Coordinators. Service Commission. Duke Energy Corporation (Duke),
VerDate 11
tendered for filing a Service Agreement Comment date: February 8, 2001, in Order to form the New England with PECO Energy Company for Firm accordance with Standard Paragraph E Regional Transmission Organization. Transmission Service under Duke’s at the end of this notice. Comment date: February 22, 2001, in Open Access Transmission Tariff. accordance with Standard Paragraph E Duke requests that the proposed 23. Dominion Energy, Inc.; Dominion Service Agreement be permitted to Cogen NY, Inc.; State Dam Corp.; State at the end of this notice. Dam II, LLC; Sissonville Corp.; become effective on December 19, 2000. 25. New York Independent System Sissonville II, LLC Duke states that this filing is in Operator, Inc.; Central Hudson Gas & accordance with Part 35 of the [Docket No. EC01–58–000] Electric Corp.; Consolidated Edison Commission’s Regulations and a copy Take notice that on January 17, 2001, Company of New York, Inc.; Niagara has been served on the North Carolina Dominion Energy, Inc., and Dominion Mohawk Power Corp.; New York State Utilities Commission. Cogen NY, Inc. (collectively Sellers), Electric & Gas Corp.; Orange & Comment date: February 8, 2001, in and State Dam Corporation, State Dam accordance with Standard Paragraph E Rockland Utilities, Inc.; Rochester Gas II, LLC, Sissonville Corporation and and Electric Corp. at the end of this notice. Sissonville II, LLC (Purchasers) filed 20. PJM Interconnection, LLC with the Federal Energy Regulatory [Docket No. RT01–95–000] [Docket No. ER01–1000–000] Commission (Commission) a joint Take notice that on January 16, 2001, application (Application) pursuant to Take notice that on January 18, 2001, pursuant to Section 35.34(h) of the Section 203 of the Federal Power Act for PJM Interconnection, LLC (PJM), Commission’s regulations, and the authorization of both the disposition tendered for filing an executed Commission’s July 20, 2000 ‘‘Notice of and acquisition of jurisdictional interconnection service agreement Guidance for Processing Order No. 2000 facilities whereby Sellers will sell for between PJM and NRG Energy Center Filings’’ in Docket No. RM99–2–000, the cash their one-half limited and general Dover LLC. New York Independent System partnership interests in NYSD Limited PJM requests a waiver of the Operator, Inc., Central Hudson Gas & Partnership (NYSD) and Sissonville Commission’s 60-day notice Electric Corporation, Consolidated Limited Partnership (Sissonville) to the requirement to permit the effective dates Edison Company of New York, Inc., agreed to by the parties. Purchasers. The Purchasers and Sellers have requested confidential treatment of Niagara Mohawk Power Corporation, Copies of this filing were served upon Orange & Rockland Utilities, Inc. and NRG Energy Center Dover LLC and the the Forms of Partnership Interest Purchase Agreement included as an Rochester Gas and Electric Corporation, state electric utility regulatory jointly submitted an Order No. 2000 commissions within the PJM control exhibit to the Application pursuant to compliance filing. area. Section 388.112 of the Commission’s Comment date: February 8, 2001, in regulations. NYSD and Sissonville are Comment date: February 22, 2001, in accordance with Standard Paragraph E exempt wholesale generators that own accordance with Standard Paragraph E at the end of this notice. hydroelectric generating projects, at the end of this notice. interconnection facilities and 21. Southern Energy Potomac River, Commission jurisdictional contracts. 26. RTO Informational Filings LLC The NYSD facility is a 10.83 MW [Docket No. RT01–1–000] [Docket No. ER01–1001–000] facility located on the Mohawk River Take notice that on January 16, 2001, Take notice that on January 18, 2001, near the Town of Waterford and City of Southern Energy Potomac River, LLC Cohoes in Saratoga and Albany the following listed entities tendered for (SE Potomac River), tendered for filing Counties, New York. The Sissonville filing voluntary informational filings in with the Federal Energy Regulatory facility is a 2.3 MW facility located on response to the Commission’s Order No. 1 Commission a short-term Master Power the Raquette River in the Town of 2000. Purchase and Sale Agreement dated Potsdam, St. Lawrence County, New Ontario Independent Electricity December 18, 2000, between Southern York. Market Operator; Massachusetts Company Energy Marketing, L.P. and SE Comment date: February 7, 2001, in Municipal Wholesale Electric Co. Potomac River for sales under SE accordance with Standard Paragraph E (Connecticut Municipal Electric Energy Potomac River’s Market Rate Tariff, at the end of this notice. Cooperative, Vermont Public Power which was accepted for filing in 24. Bangor Hydro-Electric Co.; Central Supply Authority, Braintree Electric Document No. ER00–3760–000. Maine Power Co.; National Grid USA; Light Department, Chicopee Municipal Comment date: February 8, 2001, in Northeast Utilities Service Co.; The Lighting Plant, New Hampshire Electric accordance with Standard Paragraph E United Illuminating Co.; Vermont Cooperative, Inc., Reading Municipal at the end of this notice. Electric Power Co.; ISO New England Light Department, South Hadley Electric 22. Southern Energy Peaker, LLC Inc. Light Department, Taunton Municipal [Docket No. ER01–1002–000] [Docket No. RT01–86–000] Lighting Plant, and Westfield Gas & Take notice that on January 18, 2001, Take notice that on January 16, 2001, Electric Light Department); NB Power Southern Energy Peaker, LLC (SE pursuant to Order Nos. 2000 and 2000– Corp. (Nova Scotia Power Inc., Maritime Peaker), tendered for filing with the A and the Commission’s regulations Electric Company, Limited, Maine Federal Energy Regulatory Commission thereunder, Bangor Hydro-Electric Electric Power Co., and Maine Public a short-term Master Power Purchase and Company, Central Maine Power Service Co.). Sale Agreement dated December 18, Company, National Grid USA, Northeast 2000, between Southern Company Utilities Service Company, The United Energy Marketing, L.P. and SE Peaker Illuminating Company, Vermont 1 Regional Transmission Organizations, Order No. 2000, 65 Fed. Reg. 809 (January 6, 2000), FERC sales under SE Peaker’s Market Rate Electric Power Company and ISO New Stats. & Regs. ¶ 31,089 (1999), order on reh’g, Order Tariff, which was accepted for filing in England Inc., collectively, Petitioners, No. 2000–A, 65 Fed. Reg. 12,088 (March 8, 2000), Document No. ER00–3760–000. filed a Joint Petition for Declaratory FERC Stats. & Regs. ¶ 31,092 (2000).
VerDate 11
27. Maine Electric Power Co.; San Diego DEPARTMENT OF ENERGY Summary of the Proposed Project Gas & Electric Co.; Pacific Gas and Eastern Shore wants to expand the Federal Energy Regulatory Electric Co.; California Independent capacity of its facilities in Pennsylvania System Operator Corp.; Citizens Commission and Maryland to provide an additional Communications Co.; Fitchburg Gas [Docket No. CP01–65–000] 19,800 decatherms per day of firm and Electric Light Co.; Concord Electric capacity service for three local Co. and Exeter & Hampton Electric Eastern Shore Natural Gas Company; distribution companies. Eastern Shore Light Co.; Southern California Edison Notice of Intent To Prepare an seeks authority to construct and operate: Co.; California Power Exchange Corp.; Environmental Assessment for the • 6 miles of 16-inch-diameter NSTAR Services Co.; Central Vermont Proposed 2001 System Expansion and pipeline loop adjacent to an existing Public Service Corp. Capacity Stabilization Project and pipeline on its existing right-of-way in Request for Comments on Chester County, Pennsylvania and Cecil [Docket Nos. RT01–19–000; RT01–82–000; Environmental Issues County, Maryland; RT01–83–000; RT01–85–000; RT01–89–000; • Two additional 1,665 hp RT01–90–000; RT01–92–000; RT01–93–000; January 24, 2001. compressor units at its Daleville RT01–94–000; RT01–97–000] The staff of the Federal Energy Compressor Station in Chester County, Regulatory Commission (FERC or Citizens Communications Co.; Green Pennsylvania; and Commission) will prepare an • A new delivery point on Eastern Mountain Power Corp., and Vermont environmental assessment (EA) that will Electric and Power Co. Shore’s existing mainline in Chester discuss the environmental impacts of County, Pennsylvania. [Not consolidated] the 2001 System Expansion and The location of the project facilities is Capacity Stabilization Project involving shown in appendix 1.2 Take notice that on January 16, 2001, construction and operation of facilities the entities listed in the caption above by Eastern Shore Natural Gas Company Land Requirements for Construction made compliance filings pursuant to 18 (Eastern Shore) in Chester County, The proposed project follows the CFR 35.34(c) and the Commission’s Pennsylvania and Cecil County, existing Eastern Shore right-of-way Order No. 2000.2 Maryland.1 Eastern Shore would (ROW) for 5.3 miles of the 6-mile Comment date: February 22, 2001, in construct 6 miles of 16-inch-diameter project. Construction of the proposed accordance with Standard Paragraph E pipeline loop, install two 1,665 facilities would affect about 55.4 acres at the end of this notice. horsepower (hp) compressor units at its of land. About 22.7 acres of existing Daleville Compressor Station, and permanent easement and 28.7 acres of Standard Paragraphs construct a new delivery point/meter temporary construction ROW would be station. This EA will be used by the necessary for pipeline construction. E. Any person desiring to be heard or Commission in its decision-making New compressor station facilities would to protest such filing should file a process to determine whether the require an additional 3.9 acres at the motion to intervene or protest with the project is in the public convenience and existing site. Construction of the meter Federal Energy Regulatory Commission, necessity. station would require about 0.1 acre. 888 First Street, NE., Washington, DC If you are a landowner receiving this The EA Process 20426, in accordance with Rules 211 notice, you may be contacted by a and 214 of the Commission’s Rules of pipeline company representative about The National Environmental Policy Practice and Procedure (18 CFR 385.211 the acquisition of an easement to Act (NEPA) requires the Commission to and 385.214). All such motions or construct, operate, and maintain the take into account the environmental protests should be filed on or before the proposed facilities. The pipeline impacts that could result from an action comment date. Protests will be company would seek to negotiate a whenever it considers the issuance of a considered by the Commission in mutually acceptable agreement. Certificate of Public Convenience and determining the appropriate action to be However, if the project is approved by Necessity. NEPA also requires us 3 to taken, but will not serve to make the Commission, that approval conveys discover and address concerns the protestants parties to the proceeding. with it the right of eminent domain. public may have about proposals. We Any person wishing to become a party Therefore, if easement negotiations fail call this ‘‘scoping.’’ The main goal of the must file a motion to intervene. Copies to produce an agreement, the pipeline scoping process is to focus the analysis of these filings are on file with the company could initiate condemnation in the EA on the important Commission and are available for public proceedings in accordance with state environmental issues. By this Notice of inspection. This filing may also be law. Intent, the Commission requests public comments on the scope of the issues it viewed on the Internet at http:// A fact sheet prepared by the FERC will address in the EA. All comments www.ferc.fed.us/online/rims.htm (call entitled ‘‘An Interstate Natural Gas Facility On My Land? What Do I Need received are considered during the 202–208–2222 for assistance). to Know?’’ was attached to the project preparation of the EA. State and local David P. Boergers, notice Eastern Shore provided to 2 Secretary. landowners. This fact sheet addresses a The appendices referenced in this notice are not number of typically asked questions, being printed in the Federal Register. Copies are [FR Doc. 01–2544 Filed 1–29–01; 8:45 am] available on the Commission’s website at the including the use of eminent domain BILLING CODE 6717–01–P ‘‘RIMS’’ link or from the Commission’s Public and how to participate in the Reference and Files Maintenance Branch, 888 First Commission’s proceedings. It is also Street NE, Washington, DC 20426, or call (202) 208– available for viewing on the FERC 1371. For instructions on connecting to RIMS refer to the last page of this notice. Copies of the 2 Regional Transmission Organizations, Order No. Internet website (www.ferc.fed.us). appendices were sent to all those receiving this 2000, 65 Fed. Reg. 809 (January 6, 2000), FERC notice in the mail. Stats. & Regs. ¶ 31,089 (1999), order on reh’g, Order 1 Eastern Shore’s application was filed with the 3 ‘‘We’’, ‘‘us’’, and ‘‘our’’ refer to the No. 2000–A, 65 Fed. Reg. 12,088 (March 8, 2000), Commission under section 7 of the Natural Gas Act environmental staff of the Office of Energy Projects FERC Stats. & Regs. ¶ 31,092 (2000). and Part 157 of the Commission’s regulations. (OEP).
VerDate 11
government representatives are should focus on the potential instructions. For assistance with access encouraged to notify their constituents environmental effects of the proposal, to RIMS, the RIMS helpline can be of this proposed action and encourage alternatives to the proposal (including reached at (202) 208–2222. them to comment on their areas of alternative locations/routes), and Similarly, the ‘‘CIPS’’ link on the concern. measures to avoid or lessen FERC Internet website provides access The EA will discuss impacts that environmental impact. The more to the texts of formal documents issued could occur as a result of the specific your comments, the more useful by the Commission, such as orders, construction and operation of the they will be. Please follow these notices, and rulemakings. From the proposed project under these general instructions carefully to ensure that FERC Internet website, click on the headings: your comments are received in time and ‘‘CIPS’’ link, select ‘‘Docket #’’ from the • properly recorded: CIPS menu, and follow the instructions. Geology and soils • • Water resources, fisheries, and Send an original and two copies of For assistance with access to CIPS, the wetlands your letter to: David P. Boergers, CIPS helpline can be reached at (202) • Vegetation and wildlife Secretary, Federal Energy Regulatory 208–2474. • Commission, 888 First St. NE, Room 1A, Cultural resources Linwood A. Watson, Jr., • Public safety Washington, DC 20426. • Label one copy of the comments for Acting Secretary. • Land use the attention of Gas Group, 1, PJ–11.1. [FR Doc. 01–2553 Filed 1–29–01; 8:45 am] • Endangered and threatened species • Reference Docket No. CP01–65– BILLING CODE 6717–01–M • Air quality and noise • 000. Hazardous waste • Mail you comments so that they We will also evaluate possible will be received in Washington, DC on DEPARTMENT OF ENERGY alternatives to the proposed project or or before March 2, 2001. portions of the project, and make Comments and protests may be filed Federal Energy Regulatory recommendations on how to lessen or electronically via the Internet in lieu of Commission avoid impacts on the various resource paper. See, 18 CFR 385.2001)a(1)(iii) areas. and the instructions on the Notice of Transfer of License and Our independent analysis of the Commission’s website at http:// Soliciting Comments, Motions To issues will be in the EA. Depending on www.ferc.fed.us/efi/doorbell.htm under Intervene, and Protests the comments received during the the link to the User’s Guide. Before you January 24, 2001. scoping process, the EA may be can file comments you will need to Take notice that the following published and mailed to Federal, state, create an account by clicking on ‘‘Login hydroelectric application has been filed and local agencies, public interest to File’’ and then ‘‘New User’s with the Commission and is available groups, interested individuals, affected Account.’’ for public inspection: landowners, newspapers, libraries, and Becoming an Intervenor a. Application Type: Transfer of the Commission’s official service list for License. this proceeding. A comment period will In addition to involvement in the EA b. Project No.: 2543–047. be allotted for review if the EA is scoping process, you may want to c. Date Filed: December 22, 2000. published. We will consider all become an official party to the d. Applicants: The Montana Power comments on the EA before we make proceeding known as an ‘‘intervenor.’’ Company and The Montana Power, our recommendations to the Intervenors play a more formal role in L.L.C. Commission. the process. Among other things, e. Name of Project: Milltown. intervenors have the right to receive f. Location: On the Clark Ford River Currently Identified Environmental copies of case-related Commission Issues in Missoula County, Montana. The documents and filings by other project does not utilize federal or tribal We have already identified several intervenors. Likewise, each intervenor lands. issues we think deserve attention based must provide 14 copies of its filings to g. Filed Pursuant to: Federal Power on a preliminary review of the proposed the Secretary of the Commission and Act, 16 U.S.C. 791(a)–825(r). facilities and the environmental must send a copy of its filings to all h. Applicant Contact: Michael P. information provided by Eastern Shore. other parties on the Commission’s Manion, The Montana Power Company, This preliminary list of issues may be service list for this proceeding. If you 40 East Broadway, Butte, MT 59701, changed based on your comments and want to become an intervenor you must (406) 497–2456; Steven M. Kramer and our analysis. file a motion to intervene according to Carla J. Urquhart, Milbank, Tweed, • Impacts to residents within 540 feet Rule 214 of the Commission’s Rules of Hadley & McCloy LLP, 1825 I Street, of construction, and impacts to Practice and Procedure (18 CFR NW, Suite 1100, Washington, DC 20006, agricultural areas. 385.214) (see appendix 2). Only (202) 835–7508. • Effects from the addition of 3,330 intervenors have the right to seek i. FERC Contact: Regina Saizan, (202) hp of compression. rehearing of the Commission’s decision. 219–2673. • Effects to wetlands, forested areas, You do not need intervenor status to j. Deadline for filing comments and or and possible impacts to Federal and have your environmental comments motions: March 1, 2001. state-listed species. considered. Additional information All documents (original and eight about the proposed project is available copies) should be filed with: David P. Public Participation from the Commission’s Office of Boergers, Secretary, Federal Energy You can make a difference by External Affairs at (202) 208–1088 or on Regulatory Commission, 888 First providing us with your specific the FERC website (www.ferc.fed.us) Street, NE, Washington, DC 20426. comments or concerns about the project. using the ‘‘RIMS’’ link to information in Comments and protests may be filed By becoming a commentor, your this docket number. Click on the electronically via the internet in lieu of concerns will be addressed in the EA ‘‘RIMS’’ link, select ‘‘Docket #’’ from the paper. See, 18 CFR 385.2001(a)(1)(iii) and considered by the Commission. You RIMS Menu, and follow the and the instructions on the
VerDate 11
Commission’s web site at http:// Commission’s Rules may become a DATES: Comments must be submitted on www.ferc.fed.us/efi/doorbell.htm. party to the proceeding. Any comments, or before April 2, 2001. Please include the Project Number protests, or motions to intervene must ADDRESSES: Environmental Protection (2543–047) on any comments or be received on or before the specified Agency, Office of Wastewater motions filed. comment date for the particular Management, National Wastewater k. Description of Transfer: Transfer of application. Operator Training and Technical the license for the project is being Filing and Service of Responsive Assistance Program—104(g)(1) ICR sought in connection with The Montana Documents—Any filings must bear in Docket, Municipal Assistance Branch Power Company’s (Montana Power) all capital letters the title (Mail Code 4204–M), 1200 Pennsylvania conversion to a limited liability ‘‘COMMENTS’’, Avenue, NW, Washington, DC 20460. company, The Montana Power, L.L.C., ‘‘RECOMMENDATIONS FOR TERMS Interested persons may obtain a copy of as part of an internal corporate AND CONDITIONS’’, ‘‘PROTEST’’, OR the ICR and supporting analysis without restructuring that will be undertaken ‘‘MOTION TO INTERVENE’’, as charge by contacting the individual prior to the sale of Montana Power’s applicable, and the Project Number of listed below. utility business to North Western the particular application to which the FOR FURTHER INFORMATION CONTACT: Corporation (North Western). The latter Curt filing refers. A copy of any motion to Baranowski, Telephone: 202–564–0636. transaction is the subject of a separate intervene must also be served upon each proceeding in which Montana Power Facsimile Number: (202) 501–2396. E- representative of the Applicant mail: [email protected]. and North Western have filed a joint specified in the particular application. application under Section 203 of the SUPPLEMENTARY INFORMATION: Affected Agency Comments—Federal, state, entities: Entities potentially affected by Federal Power Act seeking approval of and local agencies are invited to file the disposition of jurisdictional this action are state and local comments on the described application. governments, state and county colleges, facilities in connection with the sale of A copy of the application may be Montana Power’s utility business. and those organizations which provide obtained by agencies directly from the training assistance through the Clean The transfer application was filed Applicant. If an agency does not file within five years of the expiration of the Water Act 104(g)(1) Program to comments within the time specified for license for the project. A Commission municipal wastewater treatment plants. filing comments, it will be presumed to Order issued June 16, 2000, extended Title: National Wastewater Operator have no comments. One copy of an the termination date of the license to Training and Technical Assistance agency’s comments must also be sent to December 31, 2006. In Hydroelectric Program. (OMB Control No. to be the Applicant’s representatives. Relicensing Regulations Under the assigned. EPA ICR No.: 1977.01. Federal Power Act (54 FR 23756; FERC Linwood A. Watson, Jr., Comments Stats. and Regs., Regs. Preambles 1986– Acting Secretary. Comments should be submitted to the 1990 30854 at p. 31437), the [FR Doc. 01–2547 Filed 1–29–01; 8:45 am] National Wastewater Operator Training Commission declined to forbid all BILLING CODE 6717–01–M license transfers during the last five and Technical Assistance Program ICR years of an existing license, and instead Comment Clerk, Mail Code 4204–M, indicated that it would scrutinize all Environmental Protection Agency, such transfer requests to determine if ENVIRONMENTAL PROTECTION Office of Wastewater Management, 1200 the transfer’s primary purpose was to AGENCY Pennsylvania Avenue, NW, Washington, DC 20460. Those who comment and give the transferee an advantage in [FRL–6939–7] relicensing (id. at p. 31438 n. 318). want EPA to acknowledge receipt of l. Location of the Application: A copy Agency Information Collection their comments should enclose a self of the application is available for Activities: Proposed Collection; addressed stamped envelope. Comments inspection and reproduction at the Comment Request; Reporting may also be submitted electronically to Commission’s Public Reference Room, Requirements Under EPA’s National [email protected]. Electronic located at 888 First Street, NE, Room Wastewater Operator Training and comments should be submitted as an 2A, Washington, DC 20426, or by calling Technical Assistance Program ASCII file avoiding the use of special (202) 208–1371. This filing may be characters and forms of encryption, and viewed on http://www.ferc.fed.us/ AGENCY: Environmental Protection be identified by the use of words ‘‘OTP online/rims.htm (call (202) 208–2222 for Agency (EPA). ICR Comments’’. No confidential assistance). A copy is also available for ACTION: Notice. business information (CBI) should be inspection and reproduction at the submitted through e-mail. Comments address in item h above. SUMMARY: In compliance with the and data will also be accepted on disk m. Individuals desiring to be included Paperwork Reduction Act (44 U.S.C. in Corel WordPerfect 8 format or ASCII on the Commission’s mailing list should 3501 et seq.), this document announces file format. Electronic comments on this so indicate by writing to the Secretary that EPA is planning to submit the notice may be filed online at many of the Commission. following proposed Information Federal Depository Libraries. Comments, Protests, or Motions to Collection Request (ICR) to the Office of The record for this proposed ICR Intervene—Anyone may submit Management and Budget (OMB): renewal has been established in the comments, a protest, or a motion to National Wastewater Operator Training Office of Wastewater Management, intervene in accordance with the and Technical Assistance Program, EPA Municipal Assistance Branch and requirements of Rules of Practice and ICR Number 1977.01, and OMB Control includes supporting documentation as Procedure, 18 CFR 385.210, .211, .214. Number to be assigned. Before well as printed, paper versions of In determining the appropriate action to submitting the ICR to OMB for review electronic comments. It does not take, the Commission will consider all and approval, EPA is soliciting include any information claimed as CBI. protests or other comments filed, but comments on specific aspects of the The record is available for inspection only those who file a motion to proposed information collection as from 9 am to 4 pm, Monday through intervene in accordance with the described below. Friday, excluding legal holidays, at the
VerDate 11
United States Environmental Protection Burden Statement ENVIRONMENTAL PROTECTION Agency, Municipal Assistance Branch, AGENCY 7th Floor, ICC Building, 1201 The projected combined annual Constitution Avenue, NW, Washington, burden hours of this ICR to all [AD–FRL–6940–2] respondents will be approximately 512 DC 20004. For access to the docket RIN 2060–AI52 materials, please call (202) 564–0753 to hours. The average annual burden hours schedule an appointment. to each 104(g)(1) training center grantee National Emission Standards for will be 7 hours, for a total of 336 hours Hazardous Air Pollutants: Revision of Abstract per year. The average annual burden Source Category List and Schedule for The Wastewater Operator Training hours to the EPA’s Regional Offices and Standards Under Section 112 of the Program provides on-site technical Headquarters will be 16 hours each, for Clean Air Act assistance to municipal wastewater a total of 176 burden hours per year. AGENCY: treatment plants. Information will be Environmental Protection Data will be collected on an annual Agency (EPA). collected from the network of forty-eight basis, in May of each year, for the 104(g)(1) training centers set up through ACTION: Notice of revisions to the list of Microsoft Access database collection, categories of major and area sources. out the United States. The information and data for the Lotus 1–2–3 will be collected to identify the facilities spreadsheet information collection will SUMMARY: This notice publishes assisted, the different types of assistance be done on a bi-annual basis, in May revisions to the list of categories of the program provides and the and November of each year. Although major and area sources for sources of environmental outcomes and benefits of hazardous air pollutants (HAP). the assistance provided by the program. this information collection is not Required under section 112(c) and (e) of The information will be collected and mandatory, it is expected that 100% of the Clean Air Act (CAA), the source submitted on either an annual or semi- the 104(g) training centers will respond category list and schedule for standards annual basis. A Microsoft Access and a to this collection request. All forty-eight constitute a significant part of EPA’s Lotus 1–2–3 database have been (48) training centers and EPA have the agenda for regulating stationary sources developed for this purpose. This ICR necessary equipment, desk-top of air toxics emissions. The list and will be used by EPA for the technical computers and Microsoft Access, to schedule were most recently published and financial management of the collect and manage this information. in the Federal Register on November 18, 104(g)(1) Program. It is strongly There will be no additional start-up or 1999 (64 FR 63025). suggested that the 104(g)(1) Program maintenance costs associate with this Today’s notice meets the requirement training centers participate in the project to perform this information in section 112(c)(1) to publish information collection although it is not collection request. Burden means the periodically, but at least once every 8 mandatory. All information in the data total time, effort, or financial resources years, a list of all categories of sources system will be made public upon expended by persons to generate, reflecting revisions since the initial list request. An agency may not conduct or maintain, retain, or disclose or provide was published. Several of the revisions sponsor, and a person is not required to information to or for a Federal agency. identified in today’s notice have respond to, a collection of information This includes the time needed to review previously been published in actions unless it displays a currently valid OMB instructions; develop, acquire, install, associated with proposing and control number. The OMB control and utilize technology and systems for promulgating emission standards for numbers are listed in the Code of the purposes of collecting, validating, individual source categories, and public Federal Regulations Title 40 part 9 and and verifying information, processing comment has been taken in the context in the Code of Federal Regulations Title and maintaining information, and of those actions. Some of the revisions 48 Chapter 15. disclosing and providing information; in today’s notice have not been reflected The EPA would like to solicit adjust the existing ways to comply with in any previous notices and are being comments to: any previously applicable instructions made without public comment on the (i) Evaluate whether the proposed and requirements; train personnel to be Administrator’s own motion. Such collection of information is necessary able to respond to a collection of revisions are deemed by EPA to be for the proper performance of the information; search data sources; without need for public comment based functions of the agency, including complete and review the collection of on the nature of the actions. whether the information will have information; and transmit or otherwise EFFECTIVE DATE: January 30, 2001. practical utility; disclose the information. ADDRESSES: Docket No. A–90–49, (ii) Evaluate the accuracy of the Dated: January 24, 2001. containing supporting information used agency’s estimate of the burden of the in development of this notice, is Michael B. Cook, proposed collection of information, available for public inspection and including the validity of the Director, Office of Wastewater Management. copying between 8 a.m. and 5:30 p.m., methodology and assumptions used; [FR Doc. 01–2566 Filed 1–29–01; 8:45 am] Monday through Friday, excluding legal (iii) Enhance the quality, utility, and BILLING CODE 6560–50–U holidays. The docket is located in EPA’s clarity of the information to be Air and Radiation Docket and collected; and Information Center, Waterside Mall, (iv) Minimize the burden of the Room M–1500, 401 M Street, SW., collection of information on those who Washington, DC 20460, or by calling are to respond, including through the (202) 260–7548. A reasonable fee may use of appropriate automated electronic, be charged for copying docket materials. mechanical, or other technological FOR FURTHER INFORMATION CONTACT: Ms. collection techniques or other forms of Yvonne W. Johnson, Emission information technology, e.g., permitting Standards Division (MD–13), U.S. EPA, electronic submission of responses. Office of Air Quality Planning and
VerDate 11
Standards, Research Triangle Park, referenced all previous list and schedule III. What Are the Revisions EPA Is North Carolina 27711, telephone changes and consolidated those actions, Making to the Source Category List and number (919) 541–2798, facsimile along with several new actions, into a Schedule? number (919) 541–0072, electronic mail revised source category list and The following sections describe address [email protected]. schedule. Subsequently, we published revisions to the source category list SUPPLEMENTARY INFORMATION: Docket. three additional notices which updated since the November 18, 1999. The docket for this action is A–90–49. the list and schedule: February 12, 1998 The docket is an organized file of all the (63 FR 7155); May 17, 1999 (64 FR A. Changes to Source Category Names information submitted to or otherwise 26743); and November 18, 1999 (64 FR We are renaming the following source relied upon by the Agency in the 63025). You should read these previous categories so that the names better development of this revised list of notices for information relating to the describe the source category: source categories and revised schedule development of the initial list and 1. ‘‘Leather Production’’ is renamed for standards. The principal purpose of schedule and subsequent changes. ‘‘Leather Tanning and Finishing Operations.’’ the docket is to allow interested parties II. Why is EPA Issuing This Notice? to identify and locate documents that 2. ‘‘Vegetable Oil Production’’ is serve as a record of the process engaged This notice announces all list and renamed ‘‘Solvent Extraction for in by the Agency to publish today’s schedule changes that have occurred Vegetable Oil Production.’’ revision to the initial list and schedule. since we last updated the list on 3. ‘‘Petroleum Refineries—Catalytic The docket is available for public November 18, 1999 (64 FR 63025). The Cracking (Fluid and Other) Units, inspection at EPA’s Air and Radiation changes and the affected source Catalytic Reforming Units, and Sulfur Docket and Information Center, which is categories, are: Plant Units’’ is renamed to ‘‘Petroleum Refineries—Catalytic Cracking, Catalytic listed in the ADDRESSES section of this Changes to Source Category Names notice. • Leather Tanning and Finishing Reforming Units, and Sulfur Recovery Operations Units.’’ World Wide Web (WWW). In addition • 4. ‘‘Municipal Landfills’’ is renamed to being available in the docket, an Solvent Extraction for Vegetable Oil Production to ‘‘Municipal Solid Waste Landfills.’’ electronic copy of today’s notice will • Petroleum Refineries—Catalytic 5. ‘‘Publicly Owned Treatment Works also be available on the WWW through Cracking, Catalytic Reforming Units, and (POTW) Emissions’’ is renamed to the Technology Transfer Network Sulfur Recovery Units ‘‘Publicly Owned Treatment Works (TTN). Following signature, a copy of • Municipal Solid Waste Landfills (POTW).’’ the notice will be posted on the TTN’s • Publicly Owned Treatment Works B. Addition of Categories of Area policy and guidance page for newly (POTW) Sources proposed or promulgated rules http:// Addition of Categories of Area Sources The various authorities for listing and www.epa.gov/ttn/oarpg. The TTN • Hazardous Waste Incineration regulating area source categories under provides information and technology • Portland Cement Manufacturing • section 112 are all discretionary and/or exchange in various areas of air Secondary Aluminum Production require some sort of finding or pollution control. If more information Deletion of Source Categories determination by the Administrator. In • Alumina Processing regarding the TTN is needed, call the • the promulgated regulatory actions for TTN HELP line at (919) 541–5384. Petroleum Dry Cleaners • Coke By-Product Plants. hazardous waste incineration, portland cement production, and secondary I. What is the History of the Source The source category list and Category List and Schedule? aluminum production, we stated that promulgation schedule, updated to major, as well as, affected area sources The CAA requires, under section 112, include today’s actions as well as would be regulated. Today’s notice that EPA list all categories of major actions from previous notices, are merely reflects the addition of these sources emitting HAP and such presented in Table 1. Table 1 also three source categories as area sources categories of area sources warranting includes Federal Register citations for on Table 1. regulation, and promulgate national notices related to the source categories emission standards for hazardous air (Table 1 omits proposal notices once a C. Deletion of Source Categories pollutants (NESHAP) to control, reduce, rule or rule amendment has been The Administrator may, where or otherwise limit the emissions of HAP promulgated). Source categories for appropriate, delete categories of sources from such categories of major and area which revisions have been made in on the Administrator’s own motion or sources. Pursuant to the various specific today’s notice are annotated in Table 1 on petition. In today’s notice, we are listing requirements in section 112(c), for ease in discerning where revisions deleting three source categories— on July 16, 1992 (57 FR 31576), we have been made. alumina processing, petroleum dry published a list of 174 categories of For general descriptions of source cleaners, and coke by-product plants— major and area sources—referred to as categories listed in Table 1, the reader on the Administrator’s own motion. As the initial list—for which we would is referred to ‘‘Documentation for discussed in the initial list notice (57 FR develop emission standards. On Developing the Initial Source Category 31576), we included these categories on December 3, 1993 (58 FR 63941), List’’ (EPA–450/3–91–030) and the the list because at the time, we believed pursuant to requirements in section Federal Register notice for the first there were major sources in each 112(e), we published a schedule for the revision of the source category list and category, either because they were major promulgation of emission standards for schedule (61 FR 28197, June 4, 1996). sources in their own right or because of each of the 174 listed source categories. For subsequent changes to descriptions collocation with other sources of HAP. When we publish notices that affect of source categories for which a rule has Two of these source categories are being actions relating to individual source been promulgated, the reader is advised deleted because available data indicate categories, it is important to reflect the to consult Table 1 for the citation of the that there are no major sources in any resultant changes on the list and Federal Register notice that includes of the source categories; the third source schedule. On June 4, 1996 (61 FR the amended definition and category is being deleted because it is 28197), we published a notice that corresponding rule applicability. already subject to an existing rule.
VerDate 11
1. Alumina Processing cleaners. These efforts were focused on from these sources to a gas collection The Alumina Processing source obtaining current process and emissions system for treatment. Since Coke By- category was initially listed in July 1992 information because information used to Product Plants is a previously regulated based on combustion emission factors support the initial source category source category, section 112(c)(4) of the for calciners which indicated that listing was more than 10 years old. One CAA gives us the discretion to list or not hexane and formaldehyde emissions task included development of a HAP list such source categories. Since publishing the initial source were large enough for some sources to speciation profile for petroleum solvents category list, we have conducted a study be major. Information collected since currently available to dry cleaners. That information was obtained from leading to examine the effectiveness of the the listing indicates that there are four manufacturers of petroleum dry existing NESHAP for coke by-product facilities producing alumina in the cleaning solvents. The current HAP recovery plants and concluded that United States. All of the facilities use content of typical petroleum dry further regulation of this source category the Bayer process to produce alumina, cleaning solvents (0.5 percent by is unnecessary. Although the existing and none of the facilities are major weight) is an order of magnitude or standard was developed to control sources of HAP. Emissions data on the more lower than what was reported in benzene, the standard effectively facility that produces the most alumina the 1988 speciation profile. controls all other emitted HAP. The indicate that it uses natural gas as fuel Emissions of HAP petroleum solvent benzene standard, applicable to all coke in its calciners, as do two of the other dry cleaners were then conservatively by-product recovery plants in the listed facilities that produce smaller amounts estimated with the revised solvent source category, would determine the of alumina. The remaining facility uses speciation profile, from the Compilation floor for any section 112(d) standard, fuel oil in its calciners and produces of Air Pollutant Emission Factors Vol I: and furthermore, we know of no about one third the amount of alumina Stationary Point and Area Sources (AP– realistic ‘‘beyond the floor’’ options at produced by the largest producer and 42) (5th Edition) for uncontrolled this time. operates only two calciners. sources, and typical quantities of In summary, further rulemaking There is no speciation of organic clothes cleaned annually by large would result in no accompanying compounds that are emitted from the industrial (SIC 7218) launderers and benefits. Any new standard that we natural gas boilers or calciners for these smaller commercial (SIC 7216) would develop under section 112(d) facilities, but the data indicate that launderers. Our best estimate for a would be based on and be comparable about 7.5 tons per year of volatile typical, uncontrolled industrial to the existing standard both in terms of organic compounds (VOC) are emitted launderer is approximately 0.8 tpy of application and level of stringency. from these combustion sources at the total HAP (or 0.6 tpy of a single HAP). IV. Is This Action Subject to Judicial largest producing facility. Based on Estimates for commercial launderers is Review? emission factors for combustion sources approximately 0.03 tpy of total HAP (or from the Compilation of Air Pollutant 0.2 tpy of a single HAP). Based on the Section 112(e)(3) of the CAA states Emission Factors Vol I: Stationary Point above information, it is our conclusion that the determination of priorities for and Area Sources (AP–42) (5th Edition), that no petroleum solvent dry cleaning promulgation of standards for the listed less than 10% of the VOC emitted from operations emit HAP approaching major source categories is not a rulemaking natural gas boilers are HAP. Therefore, source levels. and is not subject to judicial review, less than one ton per year of HAP is except that failure to promulgate any estimated to be emitted from these 3. Coke By-Product Plants standard pursuant to the schedule combustion sources at the largest The Coke By-Product Plants source established under section 112(e) shall be facility. Based on the above information, category was initially listed in July subject to review under section 304 of we conclude that the largest facility is 1992. The decision to list was based on the CAA. Section 112(e)(4) states that, not major, and since all of the facilities the fact that coke oven facilities notwithstanding section 307 of the use the same process, we also conclude including by-product recovery plants CAA, no action of the Administrator that the remaining three facilities are are major sources of HAP. Coke by- listing a source category or subcategory also not major. product recovery plants are designed under section 112(c) shall be a final and operated for the separation and 2. Dry Cleaning (Petroleum Solvent) Agency action subject to judicial review, recovery of coal tar derivatives (by- except that any such action may be The Dry Cleaning (Petroleum Solvent) products) that evolve from coal during reviewed under section 307 when the source category was initially listed in the coking process of a coke oven Administrator issues emission standards July 1992 based on engineering battery. The predominant HAP emitted for such pollutant or category. calculations which indicated that at from coke by-product recovery plants is Therefore, today’s notice is not subject least one facility emitted HAP in excess benzene. Other HAP emitted include to judicial review. of major source levels. The calculations naphthalene, phenol, toluene, and were based on total facility volatile xylene. Coke by-product recovery plants V. Is EPA Asking for Public Comment? organic compounds (VOC) emissions are subject to an existing standard (40 Prior to issuance of the initial source information and a 1988 VOC speciation CFR part 61, subpart L, National category list, we published a draft initial profile for petroleum dry cleaning Emission Standard for Benzene list for public comment (56 FR 28548, solvents (i.e., mineral spirit/petroleum Emissions from Coke By-Product June 21, 1991). Although we were not naphtha). The HAP identified in the Recovery Plants) which was required to take public comment on the solvent profile included: chlorobenzene, promulgated on September 14, 1980 and initial source category list, we believed cumene, ethylbenzene, polycyclic amended on September 19, 1991. That it was useful to solicit input on a organic compounds (POM), toluene, and standard limits HAP emissions through number of issues related to the list. xylene. equipment and work practice standards. Indeed, in most instances, even where In 1998, we began gathering Owners/operators are required to there is no statutory requirement to take information to support the maximum enclose and seal all openings on process comment, we solicit public comments achievable control technology (MACT) vessels, tar storage tanks, and tar- on actions we are contemplating. standards for petroleum solvent dry intercepting sumps and to duct gases Section 112(e)(3) requires that we offer
VerDate 11
opportunity for public comments on the Risks and Safety Risks), Executive Order million or more, or adversely affect a initial source category schedule, which 13084 (Consultation and Coordination sector of the economy, productivity, we published as a draft in a September with Indian Tribal Governments), competition, jobs, the environment, 24, 1992 notice and subsequently Executive Order 13132 (Federalism), the public health or safety, or State, local or published in final form on December 3, Regulatory Flexibility Act, the National tribal governments or communities; (2) 1993. We have decided, however, that it Technology Transfer and Advancement create a serious inconsistency or is unnecessary to solicit additional Act, and the Unfunded Mandates otherwise interfere with an action taken public comment on the revisions Reform Act do not apply to today’s or planned by another agency; (3) reflected in today’s notice. Where we notice. Also, this notice does not materially alter the budgetary impact of believe it is useful to solicit input on contain any information collection entitlements, grants, user fees, or loan certain actions, we will offer interested requirements and, therefore, is not programs or the rights and obligations of parties an opportunity to provide subject to the Paperwork Reduction Act, recipients thereof; or (4) raise novel comments on proposed individual 44 U.S.C. 3501 et seq. legal or policy issues arising out of legal emission standards. Under Executive Order 12866 (58 FR mandates, the President’s priorities, or 51735, October 4, 1993), a regulatory VI. Administrative Requirements the principles set forth in the Executive action determined to be ‘‘significant’’ is Order. The OMB has determined that Today’s notice is not a rule; it is subject to the Office of Management and this action is not significant under the essentially an information sharing Budget (OMB) review and the terms of Executive Order 12866. activity which does not impose requirements of the Executive Order. regulatory requirements or costs. The Order defines ‘‘significant’’ Dated: January 19, 2001. Therefore, the requirements of regulatory action as one that is likely to Robert Perciasepe, Executive Order 13045 (Protection of lead to a rule that may either (1) have Assistant Administrator for Air and Children from Environmental Health an annual effect on the economy of $100 Radiation.
TABLE 1.—CATEGORIES OF SOURCES OF HAZARDOUS AIR POLLUTANTS AND REGULATION PROMULGATION SCHEDULE BY INDUSTRY GROUP [Revision date: January 30, 2001]
Industry group Statutory promulgation date/Federal Register source category a citation b
Fuel Combustion: Combustion Turbines ...... 11/15/2000. Engine Test Facilities ...... 11/15/2000. Industrial Boilers ...... 11/15/2000. Institutional/Commercial Boilers ...... 11/15/2000. Process Heaters ...... 11/15/2000. Reciprocating Internal Combustion Engines ...... 11/15/2000. Rocket Testing Facilities ...... 11/15/2000. Stationary Internal Combustion Engines ...... Renamed, 64FR63025. Stationary Turbines ...... Renamed, 64FR63025. Non-Ferrous Metals Processing: Lead Acid Battery Manufacturing ...... Deleted, 61FR28197. Primary Aluminum Production ...... 11/15/1997, 62FR52383(F). Primary Copper Smelting ...... 11/15/2000, 63FR19582(P), 63FR39326(SP). Primary Lead Smelting ...... 11/15/1997, 64FR30194(F). Primary Magnesium Refining ...... 11/15/2000. Secondary Aluminum Production ...... 11/15/1997, 65FR15689(F), 63FR55491(S), 63FR55489(ap). Secondary Lead Smelting ...... 11/15/1994, 60FR32587(F), 61FR27785(A), 61FR65334(A), 62FR32209(A), 63FR45007(A), 64FR4570(A), 64FR69637(A). Ferrous Metals Processing: Coke By-Product Plants ...... 11/15/2000, Deleted as of today. Coke Ovens: Charging, Top Side, and Door Leaks ...... 12/31/1992, 58FR57898(F), 59FR01922(C). Coke Ovens: Pushing, Quenching, and Battery Stacks ...... 11/15/2000. Ferroalloys Production ...... Renamed, 64FR63025. Ferroalloys Production: Silicomanganese and Ferromanganese ...... 11/15/1997, 64FR27450(F). Integrated Iron and Steel Manufacturing ...... 11/15/2000. Iron Foundries ...... 11/15/2000. Non-Stainless Steel Manufacturing—Electric Arc Furnace (EAF) Operation ...... Deleted, 61FR28197. Stainless Steel Manufacturing—Electric Arc Furnace (EAF) Operation ...... Deleted, 61FR28197. Steel Foundries ...... 11/15/2000. Steel Pickling—HCl Process ...... Renamed, 64FR63025. Steel Pickling—HCl Process Facilities and Hydrochloric Acid Regeneration Plants ...... 11/15/1997, 64FR33202(F). Mineral Products Processing: Alumina Processing ...... 11/15/2000, Deleted as of today. Asphalt Concrete Manufacturing ...... 11/15/2000. Asphalt Processing ...... 11/15/2000. Asphalt Roofing Manufacturing ...... 11/15/2000. Asphalt/Coal Tar Application—Metal Pipes Chromium Refractories Production ...... Renamed, 11/15/2000 64FR63025. Clay Products Manufacturing ...... 11/15/2000.
VerDate 11
TABLE 1.—CATEGORIES OF SOURCES OF HAZARDOUS AIR POLLUTANTS AND REGULATION PROMULGATION SCHEDULE BY INDUSTRY GROUP—Continued [Revision date: January 30, 2001]
Industry group Statutory promulgation date/Federal Register source category a citation b
Lime Manufacturing ...... 11/15/2000. Mineral Wool Production ...... 11/15/1997, 64FR29490(F). Portland Cement Manufacturing ...... 11/15/1997, 64FR31897(F). Refractories Manufacturing ...... 11/15/2000. Taconite Iron Ore Processing ...... 11/15/2000. Wool Fiberglass Manufacturing ...... 11/15/1997, 64FR31695(F). Petroleum and Natural Gas Production and Refining: Oil and Natural Gas Production ...... 11/15/1997, 64FR32610(F). Natural Gas Transmission and Storage ...... 11/15/2000, 64FR32610(F). Petroleum Refineries—Catalytic Cracking (Fluid and other) Units, Catalytic Reforming 11/15/1997, Renamed as of Today. Units, and Sulfur Plant Units. Petroleum Refineries—Catalytic Cracking Units, Catalytic Reforming Units, and Sulfur Re- 11/15/1997, 63FR78890(P). covery Units. Petroleum Refineries—Other Sources Not Distinctly Listed ...... 11/15/1994, 60FR43244(F), 61FR07051(C) 61FR29876(C), 62FR07937(A). Liquids Distribution: Gasoline Distribution (Stage 1) ...... 11/15/1994, 59FR42788(N), 59FR64303(F), 60FR07627(C), 60FR32912(C), 60FR43244(A), 60FR57628(C), 60FR62991(S), 61FR07718(A), 61FR58547(N), 62FR09087(A). Marine Vessel Loading Operations ...... 11/15/1997, 60FR48399(F). Organic Liquids Distribution (Non-Gasoline) ...... 11/15/2000. Surface Coating Processes: Aerospace Industries ...... 11/15/1994, 60FR45956(F) 61FR04903(C) 61FR66227(C) 63FR15016(A) 63FR46525(A) 65FR3642(a). Auto and Light Duty Truck (Surface Coating) ...... 11/15/2000. Flat Wood Paneling (Surface Coating) ...... Renamed, 64FR63025. Large Appliance (Surface Coating) ...... 11/15/2000, Redefined scope, 64FR63025, 65FR81134(P). Magnetic Tapes (Surface Coating) ...... 11/15/1994, 59FR64580(F). Manufacture of Paints, Coatings, and Adhesives ...... 11/15/2000. Metal Can (Surface Coating) ...... 11/15/2000. Metal Coil (Surface Coating) ...... 11/15/2000, 63FR44616(P). Metal Furniture (Surface Coating) ...... 11/15/2000. Miscellaneous Metal Parts and Products (Surface Coating) ...... 11/15/2000. Paper and Other Webs (Surface Coating) ...... 11/15/2000, 63FR55332(P). Plastic Parts and Products (Surface Coating) ...... 11/15/2000. Printing, Coating, and Dyeing of Fabrics ...... 11/15/2000. Printing/Publishing (Surface Coating) ...... 11/15/1994, 61FR27132(F). Shipbuilding and Ship Repair (Surface Coating) ...... 11/15/1994, 60FR64330(F), 61FR30814(A), 61FR66226(C). Wood Building Products (Surface Coating) ...... 11/15/2000. Wood Furniture (Surface Coating) ...... 11/15/1994, 60FR62930(F), 62FR30257(C), 62FR31361(A), 63FR71376(A). Waste Treatment and Disposal: Hazardous Waste Incineration ...... 11/15/2000, 64FR52828(F). Municipal Landfills ...... 11/15/2000, Renamed as of Today. Municipal Solid Waste Landfills ...... 11/15/2000, 63FR66672(P). Off-Site Waste and Recovery Operations ...... 11/15/1994, 61FR34140(F), 64FR38950(A). Publicly Owned Treatment Works (POTW) Emissions c ...... 11/15/1995, Renamed as of Today. Publicly Owned Treatment Works (POTW) c ...... 11/15/1995, 64FR57572(F). Sewage Sludge Incineration ...... 11/15/2000. Site Remediation ...... 11/15/2000. Solid Waste Treatment, Storage and Disposal Facilities (TSDF) ...... Renamed, 59FR51913. Agricultural Chemicals Production: Pesticide Active Ingredient Production ...... 11/15/1997, 64FR33549(F). 4-Chloro-2-Methylphenoxyacetic Acid Production ...... Subsumed, 64FR63025. 2,4-D Salts and Esters Production ...... Subsumed, 64FR63025. 4,6-Dinitro-o-Cresol Production ...... Subsumed, 64FR63025. Butadiene-Furfural Cotrimer (R–11) Production d ...... Subsumed, 64FR63025. Captafol Production d ...... Subsumed, 64FR63025. Captan Production d ...... Subsumed, 64FR63025. Chloroneb Production ...... Subsumed, 64FR63025. Chlorothalonil Production d ...... Subsumed, 64FR63025. Dacthal (tm) Production d ...... Subsumed, 64FR63025. Sodium Pentachlorophenate Production ...... Subsumed, 64FR63025. Tordon (tm) Acid Production d ...... Subsumed, 64FR63025.
VerDate 11
TABLE 1.—CATEGORIES OF SOURCES OF HAZARDOUS AIR POLLUTANTS AND REGULATION PROMULGATION SCHEDULE BY INDUSTRY GROUP—Continued [Revision date: January 30, 2001]
Industry group Statutory promulgation date/Federal Register source category a citation b
Fibers Production Processes: Acrylic Fibers/Modacrylic Fibers Production ...... 11/15/1997, 64FR34853(F), 64FR63695(A), 64FR63702(A), 64FR63779(a). Rayon Production ...... 11/15/2000. Spandex Production ...... 11/15/2000, 65FR76408(P). Food and Agriculture Processes: Baker’s Yeast Manufacturing ...... Renamed, 64FR63025. Manufacturing of Nutritional Yeast ...... 11/15/2000, 63FR55812(P). Cellulose Food Casing Manufacturing ...... 11/15/2000. Solvent Extraction for Vegetable Oil Production ...... 11/15/2000, 63FR34251(P). Vegetable Oil Production ...... 11/15/2000, Renamed as of Today. Pharmaceutical Production Processes Pharmaceuticals Production d ...... 11/15/1997, 63FR19151(a), 63FR50280(F). Polymers and Resins Production Acetal Resins Production ...... 11/15/1997, 64FR34853(F), 64FR63695(A), 64FR63702(A), 64FR63779(a). Acrylonitrile-Butadiene-Styrene Production ...... 11/15/1994, 61FR48208(F), 61FR54342(C), 61FR59849(N), 62FR01835(A), 62FR37720(A), 63FR9944(C), 63FR67879(N), 64FR11536(A), 64FR35023(S). Alkyd Resins Production ...... 11/15/2000. Amino Resins Production ...... 11/15/1997, 65FR3275(F). Boat Manufacturing ...... 11/15/2000, 63FR43842(P), Redefined scope, 64FR63025. Butyl Rubber Production ...... 11/15/1994, 61FR46906(F), 61FR59849(N), 62FR01835(A), 62FR12546(N) 62FR37720(A), 63FR67879(N), 64FR11536(A), 64FR35023(S). Carboxymethylcellulose Production ...... 11/15/2000. Cellophane Production ...... 11/15/2000. Cellulose Ethers Production ...... 11/15/2000. Epichlorohydrin Elastomers Production ...... 11/15/1994, 61FR46906(F), 61FR59849(N), 62FR01835(A), 62FR12546(N), 62FR37720(A), 63FR67879(N), 64FR11536(A), 64FR35023(S). Epoxy Resins Production ...... 11/15/1994, 60FR12670(F). Ethylene-Propylene Rubber Production ...... 11/15/1994, 61FR46906(F), 61FR59849(N), 62FR01835(A), 62FR12546(N), 62FR37720(A), 63FR67879(N), 64FR11536(A), 64FR35023(S). Flexible Polyurethane Foam Production ...... 11/15/1997, 64FR34853(F), 62FR05074(C). Hypalon (tm) Productiond ...... 11/15/1994, 61FR46906(F), 61FR59849(N), 62FR01835(A), 62FR12546(N), 62FR37720(A), 63FR67879(N), 64FR11536(A), 64FR35023(S). Maleic Anhydride Copolymers Production ...... 11/15/2000. Methylcellulose Production ...... 11/15/2000. Methyl Methacrylate-Acrylonitrile-Butadiene-Styrene Production d ...... 11/15/1994, 61FR48208(F), 61FR54342(C), 61FR59849(N), 62FR01835(A), 62FR37720(A), 63FR9944(C), 63FR67879(N), 64FR11536(A), 64FR35023(S). Methyl Methacrylate-Butadiene-Styrene Terpolymers Production d ...... 11/15/1994, 61FR48208(F), 61FR54342(C), 61FR59849(N), 62FR01835(A), 62FR37720(A), 63FR9944(C), 63FR67879(N), 64FR11536(A), 64FR35023(S). Neoprene Production ...... 11/15/1994, 61FR46906(F), 61FR59849(N), 62FR01835(A), 62FR12546(N), 62FR37720(A), 63FR67879(N), 64FR11536(A), 64FR35023(S). Nitrile Butadiene Rubber Production ...... 11/15/1994, 61FR46906(F), 61FR59849(N), 62FR01835(A), 62FR12546(N), 62FR37720(A), 63FR67879(N), 64FR11536(A), 64FR35023(S).
VerDate 11
TABLE 1.—CATEGORIES OF SOURCES OF HAZARDOUS AIR POLLUTANTS AND REGULATION PROMULGATION SCHEDULE BY INDUSTRY GROUP—Continued [Revision date: January 30, 2001]
Industry group Statutory promulgation date/Federal Register source category a citation b
Nitrile Resins Production ...... 11/15/2000, 61FR48208(F), 61FR54342(C), 61FR59849(N), 62FR01835(A), 62FR37720(A), 63FR9944(C), 63FR67879(N), 64FR11536(A), 64FR35023(S). Non-Nylon Polyamides Production ...... 11/15/1994, 60FR12670(F). Nylon 6 Production ...... Deleted, 63FR7155. Phenolic Resins Production ...... 65FR3275(F). Polybutadiene Rubber Production d ...... 11/15/1994, 61FR46906(F), 61FR59849(N), 62FR01835(A), 62FR12546(N), 62FR37720(A), 63FR67879(N), 64FR11536(A), 64FR35023(S). Polycarbonates Production d ...... 11/15/1997, 64FR34853(F), 64FR63695(A), 64FR63702(A), 64FR63779(a). Polyester Resins Production ...... 11/15/2000. Polyether Polyols Production ...... 11/15/1997, 64FR29420(F), 64FR31895(C). Polyethylene Terephthalate Production ...... 11/15/1994, 61FR48208(F), 61FR54342(C), 61FR59849(N), 62FR01835(A), 62FR30993(A), 62FR37720(A), 63FR9944(C), 63FR15312(A), 63FR67879(N), 64FR11536(A), 64FR30406(A), 64FR30456(N), 64FR35023(S). Polymerized Vinylidene Chloride Production ...... 11/15/2000. Polymethyl Methacrylate Resins Production ...... 11/15/2000. Polystyrene Production ...... 11/15/1994, 61FR48208(F), 61FR54342(C), 61FR59849(N), 62FR01835(A), 62FR37720(A), 63FR9944(C), 63FR67879(N), 64FR11536(A), 64FR35023(S). Polysulfide Rubber Production d ...... 11/15/1994, 61FR46906(F), 61FR59849(N), 62FR01835(A), 62FR12546(N), 62FR37720(A), 63FR67879(N), 64FR11536(A), 64FR35023(S). Polyvinyl Acetate Emulsions Production ...... 11/15/2000. Polyvinyl Alcohol Production ...... 11/15/2000. Polyvinyl Butyral Production ...... 11/15/2000. Polyvinyl Chloride and Copolymers Production ...... 11/15/2000, 65FR76958(P). Reinforced Plastic Composites Production ...... 11/15/2000. Styrene-Acrylonitrile Production ...... 11/15/1994 61FR48208(F), 61FR54342(C), 61FR59849(N), 62FR01835(A), 62FR37720(A), 63FR9944(C), 63FR67879(N), 64FR11536(A), 64FR35023(S). Styrene-Butadiene Rubber and Latex Production d ...... 11/15/1994, 61FR46906(F), 61FR59849(N), 62FR01835(A), 62FR12546(N), 62FR37720(A), 63FR67879(N), 64FR11536(A), 64FR35023(S). Production of Inorganic Chemicals: Ammonium Sulfate Production—Caprolactam By-Product Plants ...... 11/15/2000. Antimony Oxides Manufacturing ...... 11/15/1997 Promulgation rescheduled; deleted, 64FR63025. Carbon Black Production ...... 11/15/2000, 65FR76408. Chlorine Production ...... 11/15/2000. Chromium Chemicals Manufacturing ...... Deleted, 61FR28197. Cyanide Chemicals Manufacturing ...... 11/15/2000, 65FR76408(P). Cyanuric Chloride Production ...... Deleted, 63FR7155. Fumed Silica Production ...... 11/15/2000, Corrected, 64FR63025. Hydrochloric Acid Production ...... 11/15/2000. Hydrogen Cyanide Production ...... Subsumed, 63FR7155. Hydrogen Fluoride Production ...... 11/15/1997, 64FR34853(F), 64FR63702(A), 64FR63779(a). Phosphate Fertilizers Production ...... 11/15/1997, 64FR31358(F). Phosphoric Acid Manufacturing ...... 11/15/1997, 64FR31358(F). Quaternary Ammonium Compounds Production ...... Moved, 61FR28197. Sodium Cyanide Production ...... Subsumed, 63FR7155. Uranium Hexafluoride Production: ...... 11/15/2000. Production of Organic Chemicals:
VerDate 11
TABLE 1.—CATEGORIES OF SOURCES OF HAZARDOUS AIR POLLUTANTS AND REGULATION PROMULGATION SCHEDULE BY INDUSTRY GROUP—Continued [Revision date: January 30, 2001]
Industry group Statutory promulgation date/Federal Register source category a citation b
Ethylene Processes ...... 11/15/2000, 65FR76408(P). Quaternary Ammonium Compounds Production ...... 11/15/2000. Synthetic Organic Chemical Manufacturing ...... 11/15/1992, 59FR19402(F), 59FR29196(A), 59FR32339(N), 59FR48175(C), 59FR53359(S), 59FR54131(S), 60FR05320(A), 60FR18020(A), 60FR18026(A), 60FR63624(C), 61FR31435(A), 61FR07716(A), 61FR43544(N), 61FR64572(A), 62FR02722(A), 63FR67787(A), 64FR20189(C), 65FR3169(a). Tetrahydrobenzaldehyde Production ...... Subsumed, 64FR63025, 63FR26078(F). Miscellaneous Processes: Aerosol Can-Filling Facilities ...... 11/15/1997, Promulgation, rescheduled; de- leted, 64FR63025. Benzyltrimethylammonium Chloride Production ...... 11/15/2000. Butadiene Dimers Production ...... Renamed, 61FR28197. Carbonyl Sulfide Production ...... 11/15/2000. Cellulosic Sponge Manufacturing ...... 11/15/2000, Added 64FR63025. Chelating Agents Production ...... 11/15/2000. Chlorinated Paraffins Production d ...... 11/15/2000. Chromic Acid Anodizing ...... 11/15/1994, 60FR04948(F), 60FR27598(C), 60FR33122(C), 61FR27785(A), 61FR04463(A), 62FR42918(A). Commercial Dry Cleaning (Perchloroethylene)—Transfer Machines...... 11/15/1992, 58FR49354(F), 58FR66287(A), 60FR64002(A), 61FR27785(A), 61FR49263(A). Commercial Sterilization Facilities ...... 11/15/1994, 59FR62585(F), 61FR27785(A), 64FR67789(A), 64FR69637(A). Decorative Chromium Electroplating ...... 11/15/1994, 60FR04948(F), 60FR27598(C), 60FR33122(C), 61FR27785(A), 61FR04463(A), 62FR42918(A), 64FR69637(A). Dodecanedioic Acid Production ...... Subsumed, 59FR19402. Dry Cleaning (Petroleum Solvent) ...... 11/15/2000, Deleted as of today. Ethylidene Norbornene Production d ...... 11/15/2000. Explosives Production ...... 11/15/2000. Flexible Polyurethane Foam Fabrication Operations ...... 11/15/2000. Friction Products Manufacturing ...... 11/15/2000. Halogenated Solvent Cleaners ...... 11/15/1994, 59FR61801(F), 59FR67750(C), 60FR29484(C), 63FR24749(S), 63FR68397(A), 64FR45187(A), 64FR56173(A), 64FR67793(A), 64FR69637(A), 64FR67793(A). Hard Chromium Electroplating ...... 11/15/1994, 60FR04948(F), 60FR27598(C), 60FR33122(C), 61FR27785(A), 61FR04463(A), 62FR42918(A), 64FR69637(A). Hydrazine Production ...... 11/15/2000. Industrial Cleaning (Perchloroethylene)—Dry-to-dry machines...... 11/15/1992, 58FR49354(F), 58FR66287(A), 60FR64002(A), 61FR27785(A), 61FR49263(A). Industrial Dry Cleaning (Perchloroethylene)—Transfer Machines...... 11/15/1992, 58FR49354(F), 58FR66287(A), 60FR64002(A), 61FR27785(A), 61FR49263(A). Industrial Process Cooling Towers ...... 11/15/1994, 59FR46339(F). Leather Finishing Operations ...... 11/15/2000 63FR58702(P). Leather Tanning and Finishing Operations ...... Renamed as of Today. OBPA/1,3-Diisocyanate Production d ...... 11/15/2000. Paint Stripper Users ...... Renamed, 64FR63025. Paint Stripping Operations ...... 11/15/2000. Photographic Chemicals Production ...... 11/15/2000. Phthalate Plasticizers Production ...... 11/15/2000. Plywood and Composite Wood Products ...... 11/15/2000. Plywood/Particle Board Manufacturing ...... Renamed, 64FR63025. Polyether Polyols Production ...... Moved, 61FR28197.
VerDate 11
TABLE 1.—CATEGORIES OF SOURCES OF HAZARDOUS AIR POLLUTANTS AND REGULATION PROMULGATION SCHEDULE BY INDUSTRY GROUP—Continued [Revision date: January 30, 2001]
Industry group Statutory promulgation date/Federal Register source category a citation b
Pulp and Paper Production ...... 11/15/2000, Promulgation, rescheduled, 64FR63025, 63FR18504(F), 63FR42238(C), 63FR49455(A), 63FR71385(A), 64FR17555(A), 65FR3907(a), 65FR80755(F). Rocket Engine Test Firing ...... Moved and renamed, 64FR63025. Rubber Chemicals Manufacturing ...... 11/15/2000. Rubber Tire Manufacturing ...... 11/15/2000, 63FR62414(P). Semiconductor Manufacturing ...... 11/15/2000. Symmetrical Tetrachloropyridine Production d ...... 11/15/2000. Tetrahydrobenzaldehyde Production ...... Moved, 64FR63025. Tire Production ...... Renamed, 64FR63025. Wood Treatment ...... Deleted, 61FR28197. Categories of Area Sources: Asbestos Processing ...... Deleted, 60FR61550. Chromic Acid Anodizing ...... 11/15/1994, 60FR04948(F), 60FR27598(C), 60FR33122(C), 61FR27785(A), 61FR04463(A), 62FR42918(A), 64FR69637(A). Commercial Dry Cleaning (Perchloroethylene)—Dry-to-Dry Machines...... 11/15/1992, 58FR49354(F), 58FR66287(A), 60FR64002(A), 61FR27785(A), 61FR49263(A), 64FR69637(A). Commercial Dry Cleaning (Perchloroethylene)—Transfer Machines...... 11/15/1992, 58FR49354(F), 58FR66287(A), 60FR64002(A), 61FR27785(A), 61FR49263(A), 64FR69637(A). Commercial Sterilization Facilities ...... 11/15/1994, 59FR62585(F), 61FR27785(A), 64FR67789(A), 64FR69637(A). Decorative Chromium Electroplating ...... 11/15/1994, 60FR04948(F), 60FR27598(C), 60FR33122(C), 61FR27785(A), 61FR04463(A), 62FR42918(A), 64FR69637(A). Halogenated Solvent Cleaners ...... 11/15/1994, 59FR61801(F), 59FR67750(C), 60FR29484(C), 63FR24749(S), 63FR68397(A), 64FR45187(A), 64FR56173(A), 64FR67793(A), 64FR69637(A), 64FR67793(A). Hard Chromium Electroplating ...... 11/15/1994, 60FR04948(F), 60FR27598(C), 60FR33122(C), 61FR27785(A), 61FR04463(A), 62FR42918(A), 64FR69637(A). Hazardous Waste Incineration ...... 11/15/2000, 64FR52828(F). Portland Cement Production ...... 11/15/1997, 64FR31897(F). Secondary Aluminum Production ...... 11/15/1997, 65FR15689(F), 63FR55491(S), 63FR55489(ap). Secondary Lead Smelting ...... 11/15/1997, 60FR32587(F), 61FR27785(A), 61FR65334(A), 62FR32209(A), 64FR69637(A). a Only sources within any category located at a major source shall be subject to emission standards under CAA section 112 unless a finding is made of a threat of adverse effects to human health or the environment for the area sources in a category. All listed categories are exclusive of any specific operations or processes included under other categories that are listed separately. b This schedule does not establish the order in which the rules for particular source categories will be proposed or promulgated. Rather, it re- quires that emissions standards pursuant to CAA section 112(d) for a given source category be promulgated by the specified date. The markings in the ‘‘Statutory Promulgation Date/Federal Register Citation’’ column of Table 1 denote the following: (A): final amendment to a final rulemaking action (a): proposed amendment to a final rulemaking action (C): correction (or clarification) published subsequent to a proposed or final rulemaking action (F): final rulemaking action (N): notice to announce general information, such as an Agency decision, availability of new data, administrative updates, etc. (P): proposed rulemaking action (ap): advance notice of proposed rulemaking action (R): reopening of a proposed action for public comment (S): announcement of a stay, or partial stay, of the rule requirements Moved: the source category is relocated to a more appropriate industry group Subsumed: the source category is included within the definition of another listed category and therefore is no longer listed as a separate source category Renamed: the title of this source category is changed to a more appropriate title Deleted: the source category is removed from the source category list
VerDate 11
c The Publicly Owned Treatment Works (POTW) Emissions source category had a statutory deadline for regulatory promulgation of November 15, 1995, as established by CAA section 112(e)(5). However, for purposes of determining the 18-month period applicable to the POTW source category under section 112(j)(2), the promulgation deadline was November 15, 1997. This latter date is consistent with the section 112(e) sched- ule for the promulgation of emissions standards, as published in the Federal Register on December 3, 1993 (58 FR 63941). d Equipment handling specific chemicals for these categories or subsets of these categories is subject to a negotiated standard for equipment leaks contained in the Hazardous Organic NESHAP (HON), which was promulgated on April 22, 1994. The HON includes a negotiated standard for equipment leaks from the SOCMI category and 20 non-SOCMI categories (or subsets of these categories). The specific processes affected within the categories are listed in Section XX.X0(c) of the March 6, 1991 Federal Register notice (56 FR 9315).
[FR Doc. 01–2565 Filed 1–29–01; 8:45 am] attain the relevant NAAQS by the SUMMARY: In accordance with section BILLING CODE 6560–50–P applicable attainment date, the Act 113(g) of the Clean Air Act, as amended, provides that such area shall be (the ‘‘Act’’), 42 U.S.C. 7413(g), notice is reclassified by operation of law to the hereby given of a proposed settlement ENVIRONMENTAL PROTECTION next higher classification. The proposed agreement in Idaho Clean Air Force et AGENCY partial consent decree provides that, al. v. EPA et al., Nos. 99–70259 and [FRL–6938–2] with respect to certain areas identified 70576 (9th Cir.) filed by the Idaho Clean in the complaint, EPA shall sign a Air Force and the Environmental Proposed Settlement Agreement, notice of final rulemaking by specified Defense (formerly Environmental Clean Air Act Citizen Suit dates determining for each identified Defense Fund) under section 307(b)(1) area either that it attained the relevant of the Act, 42 U.S.C. 7607(b)(1). The AGENCY: Environmental Protection NAAQS by the applicable attainment Community Planning Association of Agency (EPA). date, or did not attain such NAAQS by Southwest Idaho (COMPASS) was ACTION: Notice of proposed settlement; such date. In the case where the granted leave to intervene as a request for public comment. determination is that the area did not respondent in the litigation. timely attain the NAAQS, the proposed DATES: Written comments on the SUMMARY: In accordance with section partial consent decree provides that proposed settlement agreement must be 113(g) of the Clean Air Act, as amended EPA shall inform the public through received by March 1, 2001. (the ‘‘Act’’), 42 U.S.C. 7413(g), notice is notice in the Federal Register, and ADDRESSES: Written comments should hereby given of a proposed partial identify the appropriate reclassification be sent to Michael Prosper, Air and consent decree in Sierra Club v. for that area in the notice of final Radiation Law Office (2344A), Office of Browner, Civ. No. 1:00CV02206 rulemaking. General Counsel, U.S. Environmental (D.D.C.), a lawsuit filed by the Sierra For a period of thirty (30) days Protection Agency, Ariel Rios Building Club and the Group Against Smog and following the date of publication of this North, 1200 Pennsylvania Avenue, NW., Pollution (GASP) under section 304(a) notice, EPA will receive written Washington, DC, 20004. Copies of the of the Act, 42 U.S.C. 7604(a). The comments relating to the proposed proposed settlement agreement are lawsuit concerns EPA’s alleged failure partial consent decree from persons who available from Samantha S. Hooks, (202) to determine whether various identified were not named as parties or interveners 564–7606. areas that are designated as to the litigation in question. EPA or the SUPPLEMENTARY INFORMATION: This nonattainment for either the 1-hour Department of Justice may withhold or ozone or PM10 NAAQS attained these lawsuit challenged a final action by EPA withdraw consent to the proposed which removed the applicability of the NAAQS by their attainment dates. The consent decree if the comments disclose 1987 PM10 national ambient air quality proposed partial consent decree was facts or circumstances that indicate that standards, and associated designation lodged with the United States District such consent is inappropriate, and classification, for Northern Ada Court for the District of Columbia on improper, inadequate, or inconsistent County, Idaho. 64 FR 12257 (March 12, January 12, 2001. with the requirements of the Act. Unless 1999). EPA’s action was primarily based DATES: Written comments on the EPA or the Department of Justice on the promulgation in 1997 of more proposed partial consent decree must be determines, following the comment protective PM standards, including received by March 1, 2001. period, that consent is inappropriate, revised PM10 standards. In May of 1999 ADDRESSES: Written comments should the final consent decree will then be the U.S. Court of Appeals for the D.C. be sent to Kevin W. McLean, Air and executed by the parties. Circuit issued a decision, American Radiation Division (2344A), Office of Dated: January 17, 2001. Trucking Associations et al. v. EPA, 175 General Counsel, U.S. Environmental Anna Wolgast, F.3d 1027 (D.C. Cir. 1999) which, among Protection Agency, Ariel Rios Acting for General Counsel. other things, vacated the newly-revised Building—North, 1200 Pennsylvania PM10 standards. This decision [FR Doc. 01–2567 Filed 1–29–01; 8:45 am] Avenue, NW., Washington, DC 20004. effectively removed the basis for the Copies of the proposed partial consent BILLING CODE 6560–50–M March 12th Northern Ada County decree are available from Samantha rulemaking. The proposed settlement Hooks, (202) 564–7606. ENVIRONMENTAL PROTECTION agreement is being entered into by the SUPPLEMENTARY INFORMATION: The Clean AGENCY parties to the litigation, and by Air Act requires EPA to determine representatives of the Idaho Department within six months of the applicable [FRL–6938–7] of Environmental Quality (IDEQ) and attainment date whether areas that are the Idaho Attorney General’s Office. designated as nonattainment for the Proposed Settlement Agreement, In general, the agreement being ozone and PM10 national ambient air Challenge to Final CAA Action proposed provides that the litigation in quality standards (NAAQS) attained AGENCY: Environmental Protection the 9th Circuit Court of Appeals would those standards by those dates. See Agency. be terminated, but with the possibility sections 181(b)(2) and 188(b)(2), 42 that it may be re-activated, pending ACTION: Notice of Proposed Settlement; U.S.C. 7511 ((b)(2) and 7513(b)(2)). If completion of the obligations committed Request for Public Comment. EPA determines that an area failed to to by the parties in the settlement
VerDate 11
agreement. Additionally, IDEQ would indicate that such consent is as all federally recognized Native develop and submit to EPA by inappropriate, improper, inadequate, or American Tribes. This notice may, September 30, 2002 a plan to ensure inconsistent with the requirements of however, be of interest to local maintenance of the 1987 PM10 the Act. Unless EPA or the Department governments, private universities, standards along with a request to of Justice determine, following the private nonprofit entities, private redesignate Northern Ada County as comment period, that consent is businesses, and individuals who are not attainment for those standards. During inappropriate, the settlement agreement eligible for this grant program. If you the period preceding such submission, will then be executed by the parties. have any questions regarding the IDEQ would also adopt by early next Dated: January 22, 2001. applicability of this action to a year and implement, as revisions to the Anna Wolgast, particular entity, contact the technical existing State Implementation plan, two person listed under FOR FURTHER Acting General Counsel. air quality rules that must limit and INFORMATION CONTACT. maintain emissions in the County from [FR Doc. 01–2568 Filed 1–29–01; 8:45 am] stationary and mobile sources at levels BILLING CODE 6560–50–M B. How Can I Get Additional similar to what would be required if the Information, Including Copies of this area were still designated nonattainment Document or Other Related Documents? for the 1987 PM10 standards. ENVIRONMENTAL PROTECTION AGENCY 1. Electronically. You may obtain COMPASS has also committed to electronic copies of this document and achieve the emissions reductions agreed [OPPTS–00306; FRL–6762–6] certain other related documents that to in the settlement agreement that fall might be available electronically, from within areas over which it exercises Pollution Prevention Grants and the EPA Home Page at http:// implementation responsibility. Announcement of Financial Assistance www.epa.gov/. To access this In exchange for these undertakings, Programs Eligible for Review; Notice document, on the Home Page select EPA would agree to delay taking final of Availability ‘‘Laws and Regulations’’ and then look action on a proposed rulemaking we up the entry for this document under issued on June 26, 2000 which, if AGENCY: Environmental Protection the ‘‘Federal Register—Environmental finalized, would reinstate the 1987 Agency (EPA). Documents.’’ You can also go directly to PM10 standards and associated ACTION: Notice. the Federal Register listings at http:// nonattainment designation and www.epa.gov/fedrgst. These documents classification for Northern Ada County. SUMMARY: EPA expects to have are also available at the EPA P2 web site Also, if IDEQ submits a maintenance approximately $5 million available in plan and request for redesignation of the fiscal year 2001 grant/cooperative http://www.epa.gov/p2. County to attainment as described in the agreement funds under the Pollution C. How and to Whom Do I Submit settlement agreement, EPA would agree Prevention Incentives for States (PPIS) Comments? to take final action on that submission grant program. Grants/cooperative by September 30, 2003. agreements will be awarded under the You may submit comments through If various parties to the settlement authority of the Pollution Prevention the mail, in person, or electronically. To agreement fail to take certain specified Act of 1990. The Pollution Prevention ensure proper receipt by EPA, it is actions by dates established in the Act provides funds to state and tribal imperative that you identify PPIS 2001 agreement, then EPA would be required programs that address the reduction or in the subject line on the first page of to take final action with respect to the elimination of pollution across all your response. June 26, 2000 proposed rulemaking. environmental media (air, land, and 1. By mail. Submit your comments to: Final action on reinstatement may also water) and to strengthen the efficiency Pollution Prevention Division (7409), occur if the area experiences a violation and effectiveness of state technical Office of Pollution Prevention and of the PM10 standards before a assistance programs in providing source Toxics, Environmental Protection redesignation request and maintenance reduction information to businesses. Agency, 1200 Pennsylvania Avenue, plan are approved by EPA. in addition, FOR FURTHER INFORMATION CONTACT: For NW., Washington, DC 20460, ATTN: for similar failures to act as required by general information about the grant PPIS. the agreement, any of the parties may re- program contact: Christopher Kent, 2. In person or by courier. Deliver activate the litigation in the 9th Circuit. Pollution Prevention Division (7409) Finally, the agreement reflects that EPA your comments to: Pollution Prevention Office of Pollution Prevention and Division, Office of Pollution Prevention has committed to fund technical studies Toxics, Environmental Protection and other air pollution reduction and Toxics, Environmental Protection Agency, 1200 Pennsylvania Avenue Agency, Room 409 East Tower, 401 M initiatives to be undertaken in the area NW, Washington, DC 20460; telephone that are designed to ensure either that St., SW., Washington, DC 20460, ATTN: (202) 260–3480; e-mail address PPIS. PM10 emissions are further minimized [email protected]. or that the air quality is not further For technical and regionally specific 3. Electronically. You may submit degraded. information: The EPA Regional your comments electronically by e-mail For period of thirty (30) days Pollution Prevention Coordinator listed to: ‘‘[email protected],’’ or mail following the date of publication of this under Unit X of this notice. your computer disk to the address notice, EPA will receive written identified in this unit. Do not submit comments relating to proposed SUPPLEMENTARY INFORMATION: any information electronically that you settlement agreement from persons who I. General Information consider to be CBI. Electronic comments were not named as parties or interveners must be submitted as an ASCII file to the litigation in question. EPA or the A. Does this Action Apply to Me? avoiding the use of special characters Department of Justice may withdraw or This action is directed to state and any form of encryption. Comments withhold consent to the proposed governments, state programs or and data will also be accepted on settlement agreement if the comments departments as well as other State standard disks in WordPerfect, Word, or disclose facts or considerations that institutions, such as universities as well ASCII file format.
VerDate 11
II. Background of the Pollution EPA further defines pollution VI. Eligibility Prevention Incentives for States Grant prevention as the use of other practices 1. Applicants. In accordance with the Program that reduce or eliminate the creation of Act, eligible applicants for purposes of pollutants through increased efficiency More than $60 million has been funding under this grant program in the use of raw materials, energy, awarded to over 100 state and tribal include the 50 states, the District of water, or other resources, or protection organizations under EPA’s multimedia Columbia, the U.S. Virgin Islands, the of natural resources, or protection of pollution prevention grant program, Commonwealth of Puerto Rico, any natural resources by conservation. since its inception in 1989. During the territory or possession of the United past 10 years, PPIS funds have enabled 2. Section 6605 of the Act authorizes States, any agency or instrumentality of state programs to implement a wide EPA to make matching grants to states a state including state universities, and range of pollution prevention activities to promote the use of source reduction all federally recognized Native including over 8,000 pollution techniques by businesses. In evaluating American Tribes. For convenience, the prevention assessments, 1,200 grant applications, the Act directs EPA term ‘‘state’’ in this notice refers to all workshops, and the development of to consider whether the proposed state eligible applicants. Local governments, over 500 pollution prevention case program will: private universities, private nonprofit studies. PPIS grants also provide i. Make technical assistance available entities, private businesses, and economic benefits to small businesses to businesses seeking information about individuals are not eligible. State by funding state technical assistance source reduction opportunities, applicants are encouraged to establish programs focused on helping the including funding for experts to provide partnerships with business and other businesses develop more efficient onsite technical advice and to assist in environmental assistance providers to production technologies and operate the development of source reduction seamlessly deliver pollution prevention more cost effectively. plans. assistance. Successful applicants will be The goals of the PPIS grant program ii. Target assistance to businesses for those that make the most efficient use of are to assist businesses and industries in which lack of information is an Federal/state government funding. In identifying better environmental impediment to source reduction. many cases, this has been accomplished strategies and solutions for complying iii. Provide training in source through partnerships. 2. Activities and criteria—i. General. with Federal and state environmental reduction techniques. regulations. PPIS grants are designed to The purpose of the PPIS grant program affect the compatibility of businesses III. Availability of FY 2001 Funds is to support the establishment and environmental and economic decision expansion of state and tribal multimedia EPA expects to have approximately $5 pollution prevention programs. EPA making, and improving competitiveness million in grant/cooperative agreement without increasing environmental specifically seeks to build state funds available for FY 2001- 2002 pollution prevention capabilities or to impacts. Successes include decreases in pollution prevention activities. The facility emissions and discharges which test, at the state level, innovative Agency has delegated grant making pollution prevention approaches and lead to less stringent regulatory and authority to the EPA regional offices. permitting requirements, increases in methodologies. Funds awarded under EPA regional offices are responsible for the PPIS grant program must be used to production rates that correlate to the solicitation of interest and the decreasing environmental costs, support pollution prevention programs screening of proposals. that address the transfer and reduction elevated investments in new and better All applicants must address the technologies, and savings that directly of potentially harmful pollutants across national program criteria listed under all environmental media: Air, water, impact the overall profitability of a Unit VI.2.ii. of this document. In business. The majority of the PPIS and land. Programs should reflect addition, applicants may be required to comprehensive and coordinated grants fund state-based projects in the meet supplemental EPA regional areas of technical assistance and pollution prevention planning and criteria. Interested applicants should implementation efforts state-wide. training, education and outreach, contact their EPA Regional Pollution regulatory integration, data collection States that include PPIS funding as part Prevention Coordinator, listed under of their overall State Performance and research, demonstration projects, Unit X of this document for more and recognition programs. Partnership Agreement (PPA)/ information. Performance Partnership Grant (PPG) In November 1990, the Pollution program satisfy this eligibility criteria. Prevention Act of 1990 (the Act) (Public IV. Catalogue of Federal Domestic Assistance ii. 2001 national program criteria. Law 101–508) was enacted, establishing This section describes the national as national policy that pollution should The number assigned to the PPIS program criteria EPA will use to be prevented or reduced at the source program in the Catalogue of Federal evaluate proposals under the PPIS grant whenever feasible. Domestic Assistance is 66.708 (formerly program. In addition to the national 1. Section 6603 of the Act defines 66.900). program criteria, there may be source reduction as any practice that: V. Matching Requirements regionally specific criteria that the i. Reduces the amount of any proposing activities are required to hazardous substance, pollutant, or Organizations receiving pollution address. For more information on the contaminant entering any waste stream prevention grant funds are required to EPA regional requirements, applicants or otherwise released into the match Federal funds by at least 50%. should contact their EPA Regional environment (including fugitive For example, the Federal government Pollution Prevention Coordinator, listed emissions) prior to recycling, treatment, will provide half of the total allowable under Unit X of this document. As well or disposal. cost of the project, and the state will as ensuring that the proposed activities ii. Reduces the hazards to public provide the other half. State meet EPA’s definition of pollution health and the environment associated contributions may include dollars, in- prevention, the applicant’s proposal with the release of such substances, kind goods and services, and/or third must include how they address the pollutants, or contaminants. party contributions. following three activities:
VerDate 11
a. Promote partnering among System (NEPPS) in an effort to show improvement, or should be directly environmental and business assistance that the pollution prevention work they linked to such measures. For example, providers. Starting in 1994, EPA are undertaking complements and success could be identified by required PPIS grant applicants to supports the state’s environmental demonstrating a direct link between the identify other environmental assistance strategic plans. If the state project’s activities and in quantifiable providers in their states and to work environmental program lacks a single reductions in pollution generated or in with these organizations to educate comprehensive environmental strategy, the natural resources used. Most of the businesses on pollution prevention. applications must show a correlation EPA regional offices have specific EPA would like to continue to between the proposed activity and the measurement structures (Region X in encourage cooperation among state goals or objectives of the state’s Global Reporting Initiative, NEWMOA’s pollution prevention programs and environmental program. EPA believes state measures in Region I, Region VIII other environmental and business pollution prevention programs will new measurement project) in which to assistance providers such as the continue to be valuable to the state apply the grant activities towards. National Institute of Standards and environmental agency’s top Please contact the appropriate Regional Technology (NIST) programs, Small management if they can demonstrate Pollution Prevention Coordinator, Business Development Centers (SBDCs), how their actions will help advance listing under Unit X of this document Small Business Assistance Programs state goals. EPA would like to ensure for more information on what (SBAPs), Office of Enforcement and that pollution prevention is integrated at measurement tool they are using. Compliance Assistance (OECA) the state level by providing a service 4. Program management. Awards for Compliance Assistance Centers, the which supports the state’s strategic FY 2001 funds will be managed through large number of university cooperative plan. The grant application narrative the EPA regional offices. Applicants extension programs and other business should demonstrate how pollution should contact their EPA Regional and environmental assistance programs prevention activities will advance state Pollution Prevention Coordinator, listed at the state level, as well as other well environmental goals as stated in the under Unit X of this document, to established nonregulatory programs. In state environmental strategic planning obtain specific deadlines for submitting part, through the PPIS grant funds, EPA documents or either PPA or PPG. proposals. National funding decisions is striving to support the development c. Promote accomplishments within will be made by May 2001. the state’s environmental programs. of a coordinated network of state VII. Use of P2Rx Regional Centers environmental service providers that EPA realizes the importance of A priority that EPA considers leverages the expertise of the various documenting the program effectiveness and communicating those results to the important to strengthen state P2 environmental assistance organizations activities and aid the formation of and shows an ability to work jointly in affected media office. EPA wants to ensure that the environmental programs partnerships with other business an effort to promote pollution assistance providers is the Pollution prevention in the state. EPA wants to in the state are aware of the contributions of the pollution Prevention Resource Exchange (P2Rx). help foster a cooperative network of EPA has allocated a portion of its state environmental assistance providers prevention program within their sectors, programs, and geographic areas by grant funds to develop and sustain since cooperation among state business regional pollution prevention centers and environmental assistance providers making a link between the regulatory program and the activities of the that facilitate and serve state needs in is paramount in this era of shrinking pollution prevention program. By coordinating training and information Federal funded programs. EPA would creating this positive feedback development. EPA believes that the like to ensure that state pollution mechanism to the state’s regulatory P2Rx network, which connects and prevention programs and other program, the grantee can market their coordinates regional pollution assistance providers establish accomplishments and consequently prevention information centers, can cooperative working relationships help promote the sustainability of the benefit both states programs and their which make best use of their respective pollution prevention program. Through clients by improving the quality and areas of expertise and most effectively the PPIS grants, EPA is working to availability of pollution prevention serve their clients. State and tribal grant encourage better awareness by the state technical information, sharing applicants should identify the regulatory and media programs of how information, minimizing duplication of partnering organization(s) they plan to pollution prevention and the state efforts in developing materials for work with during the grant funding pollution prevention programs are training and technical assistance cycle and demonstrate or document the helping the regulatory programs address providers, providing for the relationship. This can be done, for increasingly complex environmental development of quality peer reviewed example, through a letter of agreement, management problems. Applications P2 information, and expanding their a joint statement, or principles of must include what activities the understanding of how other states are agreement signed by both parties or pollution prevention program will addressing the needs of business multiple parties. If the partnership undertake to ensure communication and assistance providers. For more involves providing Federal funds to feedback to the regulatory and other information, visit the P2Rx web site at ineligible entities, the grantees shall environmental programs showing how http://www.p2rx.org. abide by state procurement regulations, pollution prevention is helping to EPA would like the grantees to use as required by state law. advance multimedia environmental the resources available through their b. Advance state environmental goals. protection. regional P2Rx center throughout the EPA believes it is important for the 3. Identifiable measures of success. entire grant process. After 10 years, sustainability of state pollution For each of the activities identified in there is a large amount of P2 prevention programs to complement the the application, the applicant must information available, but finding high goals and strategies of the state’s identify how and what criteria they are quality resources can be difficult. Thus, environmental strategic plans and/or the using to track the effectiveness of the the creation of these P2Rx centers, can activities included under the National activity. Measures of success should be provide greater access to P2 value-added Environmental Performance Partnership either measures of environmental information.
VerDate 11
For example, grantees should contact recreation, residential construction and 4. Projected accomplishments for the the appropriate P2Rx center prior to Smart Growth projects. next reporting period. starting any work to find out what Region IX (Arizona, California, 5. Data on financial expenditures by information is currently available Hawaii, Nevada) P2Rx Center - The budget category. within that sector. Below is a listing of Western Regional Pollution Prevention Any printed deliverables required the regionally specific topics for each of Network serves as the topic hub for auto under the grant should be enclosed with the P2Rx centers. As products are repair, and hospitality projects. the first report following the date the generated from the grant, all work Region X (Alaska, Idaho, Oregon, deliverable was due to be produced. products (i.e., including but not limited Washington) P2Rx Center - The Pacific A final report will be required upon to flyers, fact sheets, pamphlets, Northwest Pollution Prevention completion of the grant. handbooks, model curricula, assessment Resource Center serves as the topic hub EPA is working on developing a and audit tools, videos, and event for the aerospace industry, fiberglass standard electronic format for use by brochures) produced with Federal PPIS fabrication, metal fabrication, metal PPIS grantee on reporting their grant funds will be shared with the finishing, metal machining, paint and activities. Please contact the EPA appropriate regional P2Rx center. To coating manufacturing, and ship Regional Pollution Prevention facilitate the transfer of information building and repair. Coordinator, listed under Unit X of this generated by pollution prevention grant document, for more information on the dollars, all products from a P2 grant VIII. Proposal Narrative Format GranTrack Reporting Form. To clearly document the activities must be shared with the appropriate X. Regional Pollution Prevention listed in the grant proposal, the regional center. Please contact the EPA Coordinators Regional Pollution Prevention center narrative portion of the application which is researching your grant topic. should include a summary of proposed Region I: (Connecticut, Maine, The following list shows the P2Rx activities using the following format: Massachusetts, New Hampshire, Rhode centers and the topic they are 1. A description of the proposed work Island, Vermont) Kira Jacobs, 1 Congress researching and synthesizing and a timeline of activities. St., Suite 1100/SPP, Boston, MA 02114– information on: 2. A list of tasks that will be carried 2023, (617) 918–1817, e-mail: Regions I–II (Connecticut, Maine, out. [email protected]. Massachusetts, New Hampshire, New 3. A list of the resulting deliverables Region II: (New Jersey, New York, York, Rhode Island, Vermont) P2Rx that will be produced. Puerto Rico, Virgin Islands) Deborah Center - The Northeast Regional P2 Freeman (SPMMB), 290 Broadway, 25th IX. Progress Report Information Center serves as the topic Floor, New York, NY 10007, (212) 637– hub on marinas, mercury, and metal Progress reports are due to the EPA 3730, e-mail: [email protected]. fabrication projects. project officer every April and October Region III: (Delaware, Maryland, Regions III–IV: (Delaware, Alabama, after the project period is over 1 month Pennsylvania, Virginia, West Virginia, Florida, Georgia, Kentucky, Maryland, old. A final report is due within 90 days District of Columbia) Lorna Rosenberg, Mississippi, North Carolina, of the end of the grant period. (3E100), 1650 Arch St., Philadelphia PA Pennsylvania, South Carolina, In addition to the EPA project officer’s 19103–2029, (215) 814–5389, e-mail: Tennessee, Virginia, West Virginia ) regionally specific required number of [email protected]. P2Rx Center - The Waste Reduction copies of deliverables, please forward Region IV: (Alabama, Florida, Georgia, Resource Center serves as the topic hub one copy of each of the semi-annual Kentucky, Mississippi, North Carolina, on Department of Defense and progress reports and the final reports South Carolina, Tennessee) Dan Ahern, environmental management systems (and deliverables) to the Pollution Atlanta Federal Center, 61 Forsyth St., projects. Prevention Division in Washington, DC. SW., Atlanta, GA 30303, (404) 562– Region V (Illinois, Indiana, Michigan, Please address the documents to: PPIS 9028, e-mail: [email protected]. Minnesota, Ohio, Wisconsin) P2Rx Grant Products, Pollution Prevention Region V: (Illinois, Indiana, Michigan, Center - The Great Lakes Regional Division (7409), Environmental Minnesota, Ohio, Wisconsin) Phil Pollution Prevention Roundtable Protection Agency, 1200 Pennsylvania Kaplan, (DRP-8J), 77 West Jackson (GLRPPR) serves as the topic hub for Avenue, NW., Washington, DC 20460. Blvd., Chicago, IL 60604–3590, (312) printing and regulatory integration The narrative in the progress reports 353–4669, e-mail: [email protected]. projects. should refer back to the stated objectives Region VI: (Arkansas, Louisiana, New Region VI (Arkansas, Louisiana, New and timeline of the original grant Mexico, Oklahoma, Texas) Joy Mexico, Oklahoma, Texas) P2Rx application. Beneath each objective, the Campbell, (6EN-XP), 1445 Ross Ave., Centers- The Southwest P2 InfoSource objective’s current status should be 12th Floor, Suite 1200, Dallas, TX serves as the topic hub for electric reported. Any substantive diversion 75202, (214) 665–0836, e-mail: utilities, gas and oil, and lean from a stated objective, or any deviation [email protected]. manufacturing projects. from the proposed timeline should be Region VII: (Iowa, Kansas, Missouri, Region VII (Iowa, Kansas, Missouri, explained. Only the activities required Nebraska) Chilton McLaughlin, (ARTD/ Nebraska) P2Rx Center - The Pollution under the grant, which meet EPA’s TSPP), 901 N 5th St., Kansas City, KS Prevention Regional Information Center definition of pollution prevention, 66101, (913) 551–7517, e-mail: serves as a topic hub for Contained should be reported. [email protected]. Animal Feeding Operations (CAFO), At a minimum, the progress reports Region VIII: (Colorado, Montana, green chemistry, green procurement, should also include the following: North Dakota, South Dakota, Utah, hospitals, and general P2 information. 1. A short summary of the Wyoming) Linda Walters, (8P2-P2), 999 Region VIII (Colorado, Montana, accomplishments for the reporting 18th St., Suite 500, Denver, CO 80202– North Dakota, South Dakota, Utah, period. 2405, (303) 312–6030, e-mail: Wyoming) P2Rx Center - The Peaks to 2. Progress on completing individual [email protected]. Prairies Pollution Prevention project tasks. Region IX: (Arizona, California, Information Center serves as the topic 3. The planned and actual schedules Hawaii, Nevada, American Samoa, hub for autobody, P2 in outdoor for task completion. Guam) Leif Magnuson (WST-7), 75
VerDate 11
Hawthorne Ave., San Francisco, CA comments in relation to the above- ENVIRONMENTAL PROTECTION 94105, (415) 744–2153, e-mail: referenced Prospective Purchaser AGENCY [email protected]. Agreement is hereby extended for an [FRL–6935–6] Region X: (Alaska, Idaho, Oregon, additional 30 days from the date of Washington) Carolyn Gangmark, 01– publication of this Notice. In accordance Underground Injection Control 085, 1200 Sixth Ave., Seattle, WA with the Comprehensive Environmental Program: Substantial Modification to 98101, (206) 553–4072, e-mail: Response, Compensation, and Liability an Existing State-Administered [email protected]. Act of 1980, 42 U.S.C. 9601–9675, as Underground Injection Control XI. Submission to Congress and the amended (‘‘CERCLA’’), the proposed Program agreement will allow reuse of an Comptroller General AGENCY: Environmental Protection Under the Agency’s current abandoned industrial facility associated Agency (EPA). with the Metcoa Radiation Superfund interpretation of the definition of a ACTION: Notice; request for public ‘‘rule,’’ grant solicitations such as this Site (‘‘Site’’) in Pulaski, Lawrence comment on a substantial modification which are competitively awarded on the County, Pennsylvania, and will resolve to the Wyoming 1422 underground basis of selection criteria, are considered certain potential EPA claims under injection control program. rules for the purpose of the Section 107 of CERCLA, 42 U.S.C. 9607, Congressional Review Act (CRA). The against the Purchaser. SUMMARY: The Safe Drinking Water Act CRA, 5 U.S.C. 801 et seq., as added by (SDWA) establishes the Underground ADDRESSES: Comments should be the Small Business Regulatory Injection Control (UIC) Program, which submitted to Suzanne Canning, Regional Enforcement Fairness Act of 1996 is designed to protect present and future Docket Clerk (3RC00), U.S. (SBREFA), generally provides that underground sources of drinking water before a rule may take effect, the agency Environmental Protection Agency, (USDWs) and to prevent underground promulgating the rule must submit a Region III, 1650, Arch Street, injection through wells that may rule report, which includes a copy of Philadelphia, PA 19103, or by e-mail to endanger these drinking water sources. the rule, to each House of the Congress [email protected], and should The SDWA provides for states to apply and to the Comptroller General of the refer to the ‘‘Metcoa Radiation for and receive approval from the United States. EPA will submit a report Superfund Site Prospective Purchaser Environmental Protection Agency (EPA) containing this rule and other required Agreement’’ and ‘‘EPA Docket No. to administer their own UIC programs, information to the U.S. Senate, the U.S. CERC–PPA–2000–0008.’’ The proposed if the State regulations and statutes meet House of Representatives, and the agreement and additional background EPA’s minimum requirements as Comptroller General of the United information relating to it may be specified in 40 CFR parts 144, 145, and States prior to publication of the rule in examined and/or copied at the above 146 or the ‘‘protective’’ standard the Federal Register. This rule is not a EPA office. A copy of the proposed specified in section 1425 of the SDWA ‘‘major rule’’ as defined by 5 U.S.C. agreement may be obtained by mail for oil and gas related wells. One of these requirements specified in 40 CFR 804(2). from Suzanne Canning at the above 144.7 is the identification of USDWs. If address. List of Subjects an aquifer meets the definition of a Environmental protection, Grant SUPPLEMENTARY INFORMATION: The USDW as stated in 40 CFR 144.3, administration, Grants, Pollution Environmental Protection Agency injection into it through a Class I, II, or prevention. published in the Federal Register of III injection well can occur only if the December 13, 2000 (65 FR 77876), a aquifer is exempted. Exemption from Dated: January 19, 2001. classification as a USDW can take place Notice of Prospective Purchaser only if it is exempted from the William H. Sanders, Agreement in relation to the Metcoa classification as a USDW according to Director, Office of Pollution Prevention and Radiation Superfund Site. In the public Toxics. the criteria in 40 CFR 146.4. Therefore, interest, the Environmental Protection injection through a Class I, II, or III [FR Doc. 01–2572 Filed 1–29–01; 8:45 am] Agency has reopened and extended to injection well into any aquifer that BILLING CODE 6560–50–S the Public Comment period in relation meets the classification as a USDW to this agreement for an additional thirty requires a demonstration that the (30) days from the date of publication of aquifer is not currently serving a ENVIRONMENTAL PROTECTION this Notice. AGENCY drinking water system and is not FOR FURTHER INFORMATION CONTACT: expected to do so in the future. Certain [FRL–6938–6] Humane L. Zia (3RC41), Assistant exemptions are considered substantial Regional Counsel, U.S. Environmental program revisions. Once the State Notice of Proposed Prospective program receives final approval, Protection Agency, Region III, 1650 Purchaser Agreement Pursuant to the subsequent modifications to the Arch Street, Philadelphia, PA 19103; Comprehensive Environmental programs can be requested by the State Response, Compensation and Liability phone: (215) 814–3454. and accomplished through the Act of 1980, as Amended by the Dated: January 19, 2001. specifications under 40 CFR 145.32. Superfund Amendments and Bradley M. Campbell, Upon receiving a request for Reauthorization Act of 1986 Regional Administrator, U.S. Environmental modification of a State program, EPA AGENCY: Environmental Protection Protection Agency, Region III. determines if the requested modification Agency. [FR Doc. 01–2569 Filed 1–29–01; 8:45 am] is ‘‘substantial’’ or ‘‘non-substantial.’’ A request for an Aquifer Exemption is one ACTION: Notice of reopening of Public BILLING CODE 6560–50–M Comment period. type of program modification that can be requested by the State. An Aquifer SUMMARY: This notice informs the public Exemption request often accompanies a that the period for submission of Draft Permit for an injection well that
VerDate 11
will inject into a USDW that can be Denver, CO 80202–2466, (303) 312– information, and, for reasons described proven to meet criteria specified in 40 6276. herein, recommends approval of this CFR 146.4. If the Aquifer Exemption is SUPPLEMENTARY INFORMATION: request to exempt the designated considered a ‘‘non-substantial’’ portions of the Lance Formation from modification to the existing State I. Introduction classification as a USDW. program, then it can be evaluated and On September 25, 2000, COGEMA II. Background approved or disapproved by the EPA Mining, Inc., (COGEMA) and the COGEMA operates the Christensen Regional Administrator. However, if the Wyoming Department of Environmental Ranch in-situ leaching uranium mine aquifer proposed for exemption contains Quality (WDEQ) submitted to EPA a within the Wasatch Sandstone formation fluids with less than 3,000 request to grant an Aquifer Exemption Formation in Johnson and Campbell mg/l Total Dissolved Solids (TDS) for the Lance Formation in the areas Counties, WY. The Wasatch Formation which is related to any Class I well or contained within Township 44 North, overlies the Lance Formation by about is not related to action on a permit Range 76 West, 6th P.M. , SW1⁄4 NW1⁄4 2,600 feet at the mine site. The mining (except in the case of rule authorized Section 5, SE1⁄4 NW1⁄4 Section 5, SW1⁄4 operation has comprised five well fields enhanced recovery operations in oil Section 5, NE1⁄4 Section 7, NW1⁄4 SE1⁄4 fields), then the Aquifer Exemption 1 1 1 to date. The operation has reached the Section 7, NE ⁄4 SE ⁄4 Section 7, NW ⁄4 phase where large scale restoration of represents a ‘‘substantial’’ modification NW1⁄4 Section 8, NE1⁄4 NW1⁄4 Section 8, to the State program. In this case, 1 1 1 1 the groundwater within all the well SW ⁄4 NW ⁄4 Section 8, and NW ⁄4 SW ⁄4 fields is required to close the operation. according to 40 CFR 145.32, the Section 8, surrounding two Class I Non- proposed program revision shall be Two Class I Non-Hazardous deep Hazardous deep injection wells, the injection wells are currently being used published in the Federal Register to COGEMA DW No. 3 and the COGEMA provide the public an opportunity to to inject the above-mentioned waste DW No. 2, in Johnson County, WY. The stream into previously exempted comment for a period of at least 30 days. total area of the Lance Formation The authority to approve or disapprove portions of the Lance Formation. included in the proposed exemption is However, with the current disposal the proposed change lies with the EPA approximately 1 square mile. The Administrator. The proposed substantial capacity of the two existing wells, the proposed injection intervals are rate of the restoration process is limited. revision to the Wyoming 1422 UIC approximately 3,800 to 6,500 feet in program for which public comments are A large portion of the mined aquifer is depth below ground surface for each on ‘‘standby’’ until either (a) the being solicited is a request for the well. The proposed injection interval is exemption of approximately 1 square disposal capacity can be increased by based on the depth of the Lance the addition of two new wells, or (b) the mile of the Lance Formation at an Formation intersected by adjacent Class approximate depth of 3,800 to 6,500 feet restoration process is completed in I Non-Hazardous deep injection well, other mined-out areas. The additional below ground surface surrounding two COGEMA DW No. 1. A similar non-hazardous Class I injection wells in disposal rate capacity created by these exemption of a portion of the Lance two proposed wells will increase the the Powder River Basin within Johnson Formation was proposed for the County, Wyoming. rate of the restoration process COGEMA DW No. 1 in the Federal significantly, restoring the Wasatch Public comments are encouraged and Register on August 27, 1998 (63 FR a public hearing will be held upon Formation water quality to its class of 45810). The notice also solicited public use standards two years sooner than request. A request for a public hearing comment of the proposed action. No should be made in writing and should without the two additional wells. The public comments were received, and the mined areas on ‘‘standby’’ awaiting state the nature of the issues proposed final notice of the Aquifer Exemption to be raised at the hearing. A public restoration must require a continuous was included in the Federal Register on bleed-off because a negative pressure hearing will be held only if significant March 26, 1999 (64 FR 14799). interest is shown. regime must be maintained in order to The Lance Formation fluids contain keep the underground water flow DATES: EPA must receive public less than 3,000 mg/l Total Dissolved directed into the mining area to prevent comment, in writing, on the proposed Solids (TDS), dictating that this Aquifer the contamination of adjacent areas of modification of the Wyoming 1422 Exemption be a substantial revision of the aquifers (the Wasatch Formation). program by March 1, 2001. the Wyoming Underground Injection To maintain the negative pressure, ADDRESSES: Send written comments to Control (UIC) program approved under water must continuously be pumped out Valois Shea, Ground Water Unit (8P–W– section 1422 of the Safe Drinking Water of the mined areas in standby mode. GW), Environmental Protection Agency, Act. Criteria for classification of a The additional two years required for Region VIII, 999 18th Street, Suite 300, program revision as substantial or not, complete restoration without the two Denver, Colorado, 80202–2466, by the are in UIC Guidance #34, Guidance for new wells would result in deadlines provided above. Copies of the Review and Approval of State UIC approximately 31 million additional application and pertinent materials are Programs and Revisions to Approved gallons of waste stream to be disposed available for review by the public State Programs. The procedures to of that could be avoided by the between 8:30 a.m. and 4:00 p.m. follow to approve or disapprove construction of two new wells, Monday through Friday at the following substantial program revisions in the UIC increasing the disposal capacity. locations: Environmental Protection program are in § 145.32 and in UIC Groundwater restoration is conducted Agency, Region VIII, Ground Water guidance #34. The aquifer proposed for to return the groundwater affected by Unit, 4th Floor North Terrace, 999 18th exemption has been determined by mining to its baseline condition or to a Street, Denver, CO 80202–2466; and WDEQ to be too deep to be considered condition consistent with its pre-mining Department of Environmental Quality, as an economically feasible source of or potential use upon completion of Herschler Building, 122 West 25th drinking water. EPA has examined the mining activities. After the restoration Street, Cheyenne, WY 82002. Aquifer Exemption request, the process is completed, the concentrations FOR FURTHER INFORMATION CONTACT: accompanying information, and of contaminants are reduced to levels Valois Shea, US EPA Region VIII, 8P– responses from WDEQ and COGEMA to below drinking water standards. For the W–GW, 999 18th Street, Suite 300, EPA requests for additional supporting successful restoration of the
VerDate 11
groundwater quality within the mined- from Casper is more economically $3,691,250. The incremental increase in out areas of the Wasatch Formation, a feasible than continuing operation of the operations and maintenance cost of wastewater disposal capacity of 300 to wells completed in the Lance/Fox Hills using the Lance water over the Wasatch 500 gallons per minute (gpm) will be formations, even at the relatively water as a drinking water source would required over the next 6 years. shallow depth of 1,500 to 2,000 feet. be $2.40/1,000 gallons. Therefore, the Lance is no longer The Midwest-Edgerton public water III. Injectate supplying water to a public drinking supply scenario should be noted as the The injectate will consist of water system within 30 miles of the operational bleed streams from proposed Aquifer Exemption area. most compelling support for the approval of this Aquifer Exemption commercial in-situ leaching uranium (b) It cannot now and will not serve as a mining operations as well as fluids from source of drinking water because: request and the feasibility of using the the restoration of the aquifer. The . . . (2) It is situated at a depth or location Lance Formation as a public water constituents on the injectate include the which makes recovery of water for drinking supply. The five wells were abandoned following process and restoration bleed water purposes economically or in favor of piping in an alternative water streams: normal overproduction (well technologically impractical. supply. The decision to abandon these field bleed) streams, yellow cake wash The depth of the Lance Formation wells was based on the economic water, laboratory wastewater, reverse within the Aquifer Exemption area impact of the need to treat the water and osmosis brine, and groundwater sweep ranges from 3,800 to 6,500 feet based on the low production rates of the wells, solutions. The bleed streams are defined the information from the COGEMA DW even though the costs of development as non-hazardous, and as beneficiation No. 1 well. The Powder River Basin had already been expended. wastes exempt from regulation under consists of a deep syncline. The Aquifer Furthermore, the wells tapped the Resource Conservation and Exemption area occurs very near the shallower portions of the Lance Recovery Act as stipulated by the Bevill deepest occurrence of the Lance Formation compared to the depth of the Amendment (40 CFR 261.4(b)(7)). Formation within this syncline. Lance within the proposed Aquifer Alternatively, the Wasatch Formation Exemption area. IV. Basis for Approval of Proposed overlies the Lance Formation in the Aquifer Exemption Aquifer Exemption area and provides a In summary, the Lance Formation The information provided by more shallow, potential water supply probably will never be considered to be COGEMA in the reports included in the source available for use in the area. an economically feasible source of docket adequately addresses the According the USGS publications drinking water in the area of the Aquifer requirements of 40 CFR 146.4 referenced by COGEMA, any water Exemption because of the great depth, supporting approval of the proposed supply wells (aside from water flood low water production capacity, and Aquifer Exemption request for the Lance wells related to oil production) in the treatment costs that will be necessary Formation. proposed Aquifer Exemption area are based on the Midwest-Edgerton wells. completed in the Wasatch Formation. The cost of developing the Lance 146. 4 Criteria for exempted aquifers The Wasatch Formation is a high Formation as a drinking water supply An aquifer or a portion thereof which quality, prolific aquifer, located at within the proposed Aquifer Exemption meets the criteria for an ‘‘underground source approximately 1,200 feet in depth or area is high compared to that of of drinking water’’ in § 146.3 may be shallower throughout the Powder River developing shallow, more prolific, and determined under 40 CFR 144.8 to be an Basin, including the proposed Aquifer higher quality sources of drinking water, ‘‘exempted aquifer’’ if it meets the following Exemption area. The Wasatch such as the Wasatch Formation. The criteria: Formation, alone, contains a volume of (a) It does not currently serve as a source Wasatch is better suited for water that would supply a population of development in this area as a source of for drinking water; approximately 1.3 million people for The nearest documented well drinking water due to higher producing 100 years. Given this abundant, shallow capability, significantly better water completed in the Lance is over 24 miles supply of high quality groundwater, it is quality, and no water treatment costs. to the west of the site. The exact use of reasonable to conclude that the deeper this well is unknown, but appears to be Lance Formation will never be required V. Regulatory Impact associated with oil or gas development. to provide a source of drinking water in Approximately 30 miles to the west, the the area of the Aquifer Exemption. There will be no modification of Lance outcrops to the surface and wells COGEMA provided a cost evaluation regulations in the Wyoming DEQ Water developed there are for livestock use. for the capital costs and estimated Quality Rules and Regulations as a Where the Lance Formation occurs near operating costs for developing a private result of this proposed program the surface at the western edge of the (50 gpm) and a public (750 gpm) modification. The Code of Federal Powder River Basin 30 miles southwest drinking water well, including Regulations 40 CFR part 147, subpart of the proposed exemption area, five treatment costs based on the water ZZ, which codifies the State of wells jointly completed in the Lance quality analysis of samples collected Wyoming UIC 1442 and 1445 program and Fox Hills formations formerly from the Lance Formation as a water within the Federal regulations, will be served as public water supplies to the supply source within the Aquifer modified to include this program municipalities of Midwest and Exemption area. The costs to develop modification once approval has been Edgerton, WY, until 1997. At that time, the Lance within the exemption area granted by the EPA Administrator. the wells were abandoned because of were compared with estimated costs to Dated: January 11, 2001. low water productivity (40 gpm develop the Wasatch Formation as an sustainable flow) and the expense of alternative public water supply (at the D. Edwin Hogle, treatment that would be required to 750 gpm rate). The incremental cost Director, Ground Water Program, Office of continue using these wells as a public increase for using the Lance Formation Partnerships and Regulatory Assistance, water supply. The towns of Midwest water versus Wasatch Formation water Region VIII. and Edgerton have determined that as a drinking water source for the public [FR Doc. 01–2570 Filed 1–29–01; 8:45 am] piping in pre-treated water 50 miles water supply is approximately BILLING CODE 6560–50–U
VerDate 11
FEDERAL RESERVE SYSTEM FEDERAL RESERVE SYSTEM FEDERAL RESERVE SYSTEM
Notice of Proposals to Engage in Formations of, Acquisitions by, and Formations of, Acquisitions by, and Permissible Nonbanking Activities or Mergers of Bank Holding Companies Mergers of Bank Holding Companies; to Acquire Companies that are Correction Engaged in Permissible Nonbanking The companies listed in this notice This notice corrects a notice (FR Doc. Activities have applied to the Board for approval, 01-2167) published on page 7652 of the pursuant to the Bank Holding Company issue for Wednesday, January 24, 2001. The companies listed in this notice Act of 1956 (12 U.S.C. 1841 et seq.) Under the Federal Reserve Bank of have given notice under section 4 of the (BHC Act), Regulation Y (12 CFR Part Cleveland heading, the entry for F.N.B. Bank Holding Company Act (12 U.S.C. 225), and all other applicable statutes Corporation, Hermitage, Pennsylvania, 1843) (BHC Act) and Regulation Y (12 and regulations to become a bank is revised to read as follows: CFR Part 225) to engage de novo, or to holding company and/or to acquire the A. Federal Reserve Bank of Cleveland acquire or control voting securities or assets or the ownership of, control of, or (Paul Kaboth, Banking Supervision) assets of a company, including the the power to vote shares of a bank or 1455 East Sixth Street, Cleveland, Ohio companies listed below, that engages bank holding company and all of the 44101–2566: either directly or through a subsidiary or banks and nonbanking companies 1. F.N.B. Corporation, Hermitage, other company, in a nonbanking activity owned by the bank holding company, Pennsylvania; to merge with Citizens that is listed in § 225.28 of Regulation including the companies listed below. Community Bancorp, Inc., Marco Island, Florida, and thereby indirectly acquire Y (12 CFR 225.28) or that the Board has The applications listed below, as well voting shares of Citizens Community determined by Order to be closely as other related filings required by the Bank of Florida, Marco Island, Florida. related to banking and permissible for Board, are available for immediate In connection with application, bank holding companies. Unless inspection at the Federal Reserve Bank Applicant also has applied to acquire otherwise noted, these activities will be indicated. The application also will be Citizens Financial Corporation, Marco conducted throughout the United States. available for inspection at the offices of Island, Florida, and thereby engage in Each notice is available for inspection the Board of Governors. Interested loan origination activities, pursuant to § at the Federal Reserve Bank indicated. persons may express their views in 225.28(b)(1) of Regulation Y, and CCB The notice also will be available for writing on the standards enumerated in Mortgage Corporation, Marco Island, inspection at the offices of the Board of the BHC Act (12 U.S.C. 1842(c)). If the Florida, and thereby engage in mortgage Governors. Interested persons may proposal also involves the acquisition of brokerage activities, pursuant to § express their views in writing on the a nonbanking company, the review also 225.28(b)(1) of Regulation Y. F.N.B. question whether the proposal complies includes whether the acquisition of the Corporation has secured a stock option to acquire up to 19.9 percent of Citizens with the standards of section 4 of the nonbanking company complies with the Community Bancorp, Inc. BHC Act. Additional information on all standards in section 4 of the BHC Act Comments on this application must bank holding companies may be (12 U.S.C. 1843). Unless otherwise be received by February 20, 2001. obtained from the National Information noted, nonbanking activities will be Board of Governors of the Federal Reserve Center website at www.ffiec.gov/nic/. conducted throughout the United States. System, January 24, 2001. Additional information on all bank Unless otherwise noted, comments Robert deV. Frierson holding companies may be obtained regarding the applications must be Associate Secretary of the Board. from the National Information Center received at the Reserve Bank indicated [FR Doc. 01–2500 Filed 1–29–01; 8:45 am] website at www.ffiec.gov/nic/. or the offices of the Board of Governors BILLING CODE 6210–01–S not later than February 13, 2001. Unless otherwise noted, comments A. Federal Reserve Bank of regarding each of these applications Minneapolis (JoAnne F. Lewellen, must be received at the Reserve Bank DEPARTMENT OF HEALTH AND Assistant Vice President) 90 Hennepin indicated or the offices of the Board of HUMAN SERVICES Avenue, Minneapolis, Minnesota Governors not later than February 23, 55480–0291: 2001. Office of the Secretary 1. Glacier Bancorp, Inc., Kalispell, A. Federal Reserve Bank of Atlanta Agency information collection Montana; to acquire COAD Limited (Cynthia C. Goodwin, Vice President) activities: Proposed collections; Partnership No. 2, Missoula, Montana, 104 Marietta Street, N.W., Atlanta, Comment Request and thereby indirectly acquire COAD Georgia 30303–2713: The Department of Health and Human Limited Partnership No. 3, Missoula, 1. Trustmark Corporation, Jackson, Services, Office of the Secretary will Montana, and thereby engage in Mississippi; to merge with Barret periodically publish summaries of community development activities, Bancorp, Inc., Barretville, Tennessee, proposed information collections pursuant to § 225.28(b)(12) of and thereby indirectly acquire voting projects and solicit public comments in Regulation Y. shares of Peoples Bank, Barretville, compliance with the requirements of Board of Governors of the Federal Reserve Tennessee, and Somerville Bank & Trust Section 3506(c)(2)(A) of the Paperwork System, January 24, 2001. Company, Somerville, Tennessee. Reduction Act of 1995. To request more Robert deV. Frierson Board of Governors of the Federal Reserve information on the project or to obtain a copy of the information collection Associate Secretary of the Board. System, January 24, 2001. Robert deV. Frierson plans and instruments, call the OS [FR Doc. 01–2501 Filed 1–29–01; 8:45 am] Reports Clearance Officer on (202) 690– BILLING CODE 6210–01–S Associate Secretary of the Board. 6207. [FR Doc. 01–2502 Filed 1–29–01; 8:45 am] Comments are invited on: (a) Whether BILLING CODE 6210–01–S the proposed collection of information
VerDate 11
is necessary for the proper performance SUMMARY: The Food and Drug recommendations to blood of the functions of the agency, including Administration (FDA) is announcing the establishments for the use of FDA whether the information shall have availability of a guidance document cleared automated blood cell separators practical utility; (b) the accuracy of the entitled ‘‘Guidance for Industry: for the collection of both single and agency’s estimate of the burden of the Recommendations for Collecting Red double units of red blood cells. The proposed collection of information; (c) Blood Cells by Automated Apheresis guidance document includes ways to enhance the quality, utility and Methods’’ dated January 2001. The recommendations for donor selection clarity of the information to be guidance document provides criteria and product quality control and collected; and (d) ways to minimize the recommendations to blood describes registration, licensing, and burden of the collection of information establishments for the use of FDA other procedures. The guidance on respondents, including through the cleared automated blood cell separators document announced in this notice has use of automated collection techniques for the collection of both single and been revised based on comments or other forms of information double units of red blood cells. The received on the draft guidance technology. guidance document also describes document entitled ‘‘Guidance for Proposed Projects 1. Organizing an information to be included in a licensed Industry: Recommendations for Institutional Investigation Assistance application or supplement. The Collecting Red Blood Cells by Program: A Feasibility Study—NEW—A guidance document announced in this Automated Apheresis Methods’’ review group charged with examining notice finalizes the draft guidance announced in the Federal Register of the Office of Research Integrity’s role in document entitled ‘‘Guidance for July 27, 1998 (63 FR 40129), and handling allegations of research Industry: Recommendations for finalizes that draft guidance document. misconduct developed numerous Collecting Red Blood Cells by This guidance is being issued recommendations. One of the Automated Apheresis Methods’’ dated consistent with FDA’s good guidance recommendations stated that ‘‘HHS July 1998. regulation (21 CFR 10.115; 65 FR 56468, should encourage the development of a DATES: Submit written comments at any September 19, 2000). This guidance consortium-based approach to be used time. document represents the agency’s by awardee institutions that do not have ADDRESSES: Submit written requests for current thinking with regard to the capacity to conduct the fact-finding single copies of the guidance document collecting red blood cells by automated process, or at which there is otherwise entitled ‘‘Guidance for Industry: apheresis methods. It does not create or inadequate institutional or Recommendations for Collecting Red confer any rights for or on any person organizational capacity.’’ The Office of Blood Cells by Automated Apheresis and does not operate to bind FDA or the Research Integrity is proposing a survey Methods’’ to the Office of public. An alternative approach may be of research institutions, educational Communication, Training, and used if such approach satisfies the institutions and related organizations to Manufacturers Assistance (HFM–40), requirements of the applicable statutes assess the expressed level of interest in Center for Biologics Evaluation and and regulations. As with other guidance the development of consortia. Research (CBER), Food and Drug documents, FDA does not intend this Respondents: Businesses or other for- Administration, 1401 Rockville Pike, document to be all-inclusive and profit, non-profit institutions; Number Rockville, MD 20852–1448. Send one cautions that not all information may be of Respondents: 1,000; Burden per self-addressed adhesive label to assist applicable to all situations. This Response: 20 minutes; Total Burden: the office in processing your requests. document is intended to provide 333 hours. The document may also be obtained by information and does not set forth Send comments to Cynthia Agens mail by calling the CBER Voice requirements. Bauer, OS Reports Clearance Officer, Information System at 1–800–835–4709 II. Comments Room 503H, Humphrey Building, 200 or 301–827–1800, or by fax by calling Interested persons may, at any time, Independence Avenue SW., Washington the FAX Information System at 1–888– submit written comments to the Dockets DC, 20201. Written comments should be CBER–FAX or 301–827–3844. See the Management Branch (address above) received within 60 days of this notice. SUPPLEMENTARY INFORMATION section for regarding this guidance document. Two Dated: January 23, 2001. electronic access to the guidance. Submit written comments on the copies of any comments are to be Kerry Weems, submitted, except that individuals may Acting Deputy Assistant Secretary, Budget. guidance document to the Dockets Management Branch (HFA–305), Food submit one copy. Comments should be [FR Doc. 01–2540 Filed 1–29–01; 8:45 am] and Drug Administration, 5630 Fishers identified with the docket number BILLING CODE 4150–31–M Lane, rm. 1061, Rockville, MD 20852. found in brackets in the heading of this document. A copy of this document and FOR FURTHER INFORMATION CONTACT: received comments are available for DEPARTMENT OF HEALTH AND Astrid L. Szeto, Center for Biologics public examination in the Dockets HUMAN SERVICES Evaluation and Research (HFM-17), Management Branch between 9 a.m. and Food and Drug Administration, 1401 4 p.m., Monday through Friday. Food and Drug Administration Rockville Pike, Rockville, MD 20852– 1448, 301-827–6210. III. Electronic Access [Docket No. 98D–0545] SUPPLEMENTARY INFORMATION: Persons with access to the Internet Guidance for Industry: I. Background may obtain the guidance document at Recommendations for Collecting Red http://www.fda.gov/cber/ FDA is announcing the availability of guidelines.htm. Blood Cells by Automated Apheresis a guidance document entitled Methods; Availability ‘‘Guidance for Industry: Dated: December 28, 2000. Margaret M. Dotzel, AGENCY: Food and Drug Administration, Recommendations for Collecting Red HHS. Blood Cells by Automated Apheresis Associate Commissioner for Policy. Methods’’ dated January 2001. The [FR Doc. 01–2489 Filed 1–29–01; 8:45 am] ACTION: Notice. guidance document provides BILLING CODE 4160–01–S
VerDate 11
DEPARTMENT OF THE INTERIOR sale offer will constitute an application or hazardous waste(s) and/or hazardous for conveyance of those mineral substances(s), as defined by federal or Bureau of Land Management interests. The applicant will be required state environmental laws; off, on, into or to pay a $50.00 non-refundable filing fee under land, property and other interests Notice of Realty Action; Competitive in conjunction with the final payment of the United States; (5) Other activities Sale of Public Lands in Clark County, for processing of the conveyance of the by which solids or hazardous NV locatable mineral interests. substances or wastes, as defined by The following lands have been The terms and conditions applicable federal and state environmental laws are designated for disposal under Public to the sale are as follows: generated, released, stored, used or Law 105–263, the Southern Nevada All Parcels Subject to the Following otherwise disposed of on the patented Public Land Management Act of 1998 real property, and any cleanup 1. All leaseable and saleable mineral response, remedial action, or other (112 Stat. 2343); they will be sold deposits are reserved on land sold; competitively in accordance with actions related in any manner to said permittees, licensees, and lessees, retain solid or hazardous substances or wastes; Section 203 and Section 209 of the the right to prospect for, mine, and Federal Land Policy and Management or remove the minerals owned by the (6) Natural resource damages as Act of 1976 (90 Stat. 2750, 43 U.S.C. United States under applicable law and 1713,1719, and 1740) at not less than defined by federal and state law. This any regulations that the Secretary of the covenant shall be construed as running the appraised fair market value (FMV). Interior may prescribe, including all with the patented real property and may Mount Diablo Meridian, Nevada necessary access and exit rights. be enforced by the United States in a 2. A right-of-way is reserved for T. 22 S., R. 60 E., court of competent jurisdiction. 1 1 1 1 ditches and canals constructed by Sec. 10: W ⁄2NW ⁄4NW ⁄4SW ⁄4, Maps delineating the individual W1⁄2NW1⁄4SW1⁄4SW1⁄4, authority of the United States under the parcels and the appraisal reports for E1⁄2SE1⁄4SE1⁄4NE1⁄4, W1⁄2NE1⁄4NE1⁄4SE1⁄4, Act of August 30, 1890 (43 U.S.C. 945). E1⁄2SW1⁄4NE1⁄4SE1⁄4, E1⁄2SE1⁄4NE1⁄4SE1⁄4, 3. All land parcels are subject to all each parcel will be available for public E1⁄2NE1⁄4SW1⁄4SE1⁄4, E1⁄2NE1⁄4SE1⁄4SE1⁄4, valid and existing rights. Encumbrances review at the BLM’s Las Vegas Field E1⁄2SW1⁄4SW1⁄4SE1⁄4, of record are available for review during Office on or before March 1, 2001. Sec. 12: SE1⁄4SE1⁄4NW1⁄4NE1⁄4, With the exception of the North Las 1 1 1 1 business hours, 7:30 a.m. to 4:15 p.m., SW ⁄4SE ⁄4NE ⁄4NE ⁄4, Monday through Friday, at the Bureau Vegas parcel each parcel will be offered N1⁄2NE1⁄4SE1⁄4NE1⁄4, 1 1 1 1 of Land Management, Las Vegas Field via the Internet, by sealed bid, and at NE ⁄4NW ⁄4SE ⁄4NE ⁄4, oral auction. Pre-auction bidding via the W1⁄2NW1⁄4SE1⁄4NE1⁄4, Office, 4765 Vegas Drive, Las Vegas, Internet will be conducted from April 2, NE1⁄4NW1⁄4NE1⁄4SE1⁄4, Nevada. SW1⁄4NE1⁄4NE1⁄4SE1⁄4, 4. All land parcels are subject to 2001, through May 2, 2001. Internet SE1⁄4NE1⁄4SE1⁄4SE1⁄4, N1⁄2SE1⁄4SE1⁄4SE1⁄4, reservations for roads, public utilities bidding procedures will be available on NE1⁄4SW1⁄4NE1⁄4SE1⁄4, and flood control purposes, both or before April 2, 2001 at SE1⁄4NW1⁄4SE1⁄4SE1⁄4, existing and proposed, in accordance www.auctionrp.com. All sealed bids NE1⁄4NE1⁄4NE1⁄4SW1⁄4, with the local governing entities’ must be received in the BLM’s Las T. 22 S., R. 61 E., Vegas Field Office (LVFO), 4765 Vegas 1 1 1 1 Transportation Plans. Sec. 30: NW ⁄4NE ⁄4NE ⁄4SE ⁄4, 5. All purchasers/patentees, by Drive, Las Vegas, NV 89108, by no later SW1⁄4NE1⁄4NE1⁄4SE1⁄4, accepting a patent, agree to indemnify, than 4:15 p.m. PST, May 7, 2001. Sealed SE1⁄4NW1⁄4NE1⁄4SE1⁄4, bid envelopes must be marked on the NE1⁄4SW1⁄4NE1⁄4SE1⁄4, defend, and hold the United States T. 19 S., R. 60 E., harmless from any costs, damages, lower front left corner with the parcel Sec. 19: SW1⁄4SW1⁄4NE1⁄4 claims, causes of action, penalties, fines, number and sale date. Bids must be for Sec. 18: E1⁄2NE1⁄4NE1⁄4NE1⁄4 liabilities, and judgements of any kind not less than the appraised fair market value (FMV), with a separate bid North Las Vegas or nature arising from the past, present, and future acts or omissions of the submitted for each parcel. T. 19 S., R. 61 E., patentee or their employees, agents, Each sealed bid and the highest Sec. 16: Lot 13 (south half) Sec. 17: Lots 1 through 11, Lots 13 through contractors, or lessees, or any third- written Internet bid shall be 16 and Lot 18 party, arising out of, or in connection accompanied by a certified check, Sec. 18: Lots 13 and 20 with, the patentee’s use, occupancy, or money order, bank draft, or cashier’s Sec. 19: Lots 5, 6, 10 through 14, 17, 18, operations on the patented real check made payable to the Bureau of 22, 23, 25, 26, 28 property. This indemnification and hold Land Management, for not less than 10 Sec. 20: Lots 1 through 7, 9 through 17, 19, harmless agreement includes, but is not percent of the amount bid. The bid 21 limited to, acts and omissions of the deposit for the highest qualified written Sec. 21: Lots 4 and 9 patentee and their employees, agents, Internet bid must be received at the Upon publication of this notice and contractors, or lessees, or any third Bureau of Land Management, Las Vegas until the completion of the sale, the party, arising out of or in connection Field Office, 4765 Vegas Drive, Las BLM is no longer accepting land use with the use and/or occupancy of the Vegas, NV 89108 by 4:15 PST on May applications affecting any parcel being patented real property which has 4, 2001. The highest qualified written offered for sale. Any applications filed already resulted or does hereafter result Internet bid or sealed bid on each parcel after this notice for rights-of-way, in: (1) Violations of federal, state, and will determine the starting monetary permits, leases, and other uses will be local laws and regulations that are now, point for oral bidding. If no written returned to the applicants with no or may in the future become, applicable Internet bids or sealed bids are received, action taken. If the land is sold, to the real property; (2) Judgements, oral bidding will begin at the appraised conveyance of the locatable mineral claims or demands of any kind assessed FMV. interests will occur simultaneously with against the United States; (3) Costs, All parcels will be offered for the sale of the land. The locatable expenses, or damages of any kind competitive sale by oral auction mineral interests being offered have no incurred by the United States; (4) Other beginning at 10:00 a.m. PDT, May 9, known mineral value. Acceptance of a releases or threatened releases of solid 2001, at the Clark County Commission
VerDate 11
Chambers, Clark County Government subdivision authorized to hold property; any land or interest in the land from Center, 500 S. Grand Central Parkway, or an entity, including but not limited sale, if, in the opinion of the authorized Las Vegas, Nevada. Registration for oral to associations or partnerships, capable officer, consummation of the sale would bidding will begin at 8:30 a.m. the day of holding property or interests therein not be fully consistent with FLPMA or of sale and will continue throughout the under the law of the State of Nevada. other applicable laws or is determined auction. All oral bidders are required to Certification of qualification, including not in the publics interest. Any register. citizenship or corporation or comments received during this process, The highest qualifying bid for any partnership, must accompany the bid as well as the commentor’s name and parcel, whether written Internet, sealed, deposit. address, will be available to the public or oral, will be declared the highest bid. In order to determine the fair market in the administrative record and/or The apparent high bidder, if an oral value of the subject public lands pursuant to a Freedom of Information bidder, must submit the required bid through appraisal, certain assumptions Act request. You may indicate for the deposit immediately following the close have been made on the attributes and record that you do not wish your name of the sale in the form of cash, personal limitations of the lands and potential and/or address made available to the check, bank draft, cashiers check, effects of local regulations and policies public. Any determination by the money order, or any combination on potential future land uses. Through Bureau of Land Management to release thereof, made payable to the Bureau of publication of this notice, the Bureau of or withhold the names and/or addresses Land Management, for not less than 20 Land Management gives notice that of those who comment will be made on percent of the amount bid. these assumptions may not be endorsed a case-by-case basis. A commentor’s The remainder of the full bid price, or approved by units of local request to have their name and/or whether written Internet, sealed or oral, government. Furthermore, no warranty address withheld from public release must be paid within 180 calendar days of any kind shall be given or implied by will be honored to the extent of the date of the sale. Failure to pay the the United States as to the potential uses permissible by law. Lands will not be full price within the 180 days will of the lands offered for sale; conveyance offered for sale until at least 60 days disqualify the apparent high bidder and of the subject lands will not be on a after the date of publication of this cause the bid deposit to be forfeited to contingency basis. It is the buyers’ notice in the Federal Register. the BLM. Unsold parcels may be offered responsibility to be aware of all on the Internet beginning May 28, 2001. applicable local government policies Dated: January 12, 2001. Internet auction procedures will be and regulations that would affect the Mark T. Morse, available at www.auctionrp.com on or subject lands. It is also the buyers’ Field Manager. before May 28, 2001. If unsold on the responsibility to be aware of existing or [FR Doc. 01–2495 Filed 1–29–01; 8:45 am] Internet, parcels may be offered at future projected use of nearby properties. BILLING CODE 3410–11–P auctions without additional legal notice. When conveyed out of federal Any bidder wishing to bid on the ownership, the lands will be subject to ‘‘North Las Vegas’’ parcel must sign an any applicable reviews and approvals DEPARTMENT OF THE INTERIOR acknowledgment of the ‘‘City of North by the respective unit of local Las Vegas Conveyance Agreement’’. The government for proposed future uses, Bureau of Reclamation North Las Vegas parcel will only be and any such reviews and approvals Change in Discount Rate for Water offered at the oral auction, and is not would be the responsibility of the buyer. Resources Planning available for pre-bidding via the internet Any land lacking access from a public or for sealed bid, nor will it be offered road or highway will be conveyed as AGENCY: Bureau of Reclamation, after the oral auction except in such, and future access acquisition will Interior. accordance with the following be the responsibility of the buyer. ACTION: Notice of change. procedures. The apparent high bidder Detailed information concerning the will be allowed 30 days from the date sale, including the reservations, sale SUMMARY: The Water Resources of the oral auction, May 9, 2001, to procedures and conditions, planning Planning Act of 1965 and the Water reach a Development Agreement with and environmental documents, is Resources Development Act of 1974 the City of North Las Vegas. Failure to available at the Bureau of Land require an annual determination of a reach an agreement within 30 days will Management, Las Vegas Field Office, discount rate for Federal water disqualify the apparent high bidder, 4765 Vegas Drive, Las Vegas, NV 89108, resources planning. The discount rate their deposit will be returned and the or by calling (702) 647–5114. Some, but for Federal water resources planning for property shall be offered to the next not all of this information will also fiscal year 2001 is 6.375 percent. highest bidder at his/her highest bid available on the Internet at http:// Discounting is to be used to convert who will also be allowed 30 days from www.nv.blm.gov. Click on Land Sales. future monetary values to present the date of the offer in which to reach For a period of 45 days from the date values. a final development agreement with the of publication of this notice in the City of North Las Vegas. Failure by the Federal Register, the general public and DATES: This discount rate is to be used next highest bidder to reach an interested parties may submit comments for the period October 1, 2000, through agreement within 30 days will to the Field Manager, Las Vegas Field and including September 30, 2001. disqualify the apparent high bidder, Office, 4765 Vegas Drive, Las Vegas, FOR FURTHER INFORMATION CONTACT: their deposit will be returned, the sale Nevada 89108. Any adverse comments Larry Schluntz, Economist, Reclamation cancelled and the property may be re- will be reviewed by the State Director, Law and Revenues Management Office, offered for sale at a later date without who may sustain, vacate, or modify this Bureau of Reclamation, Attention: D– further legal notice. realty action. In the absence of any 5200, Building 67, Denver Federal Federal law requires that bidders adverse comments, this realty action Center, Denver CO 80225–0007; must be U.S. citizens 18 years of age or will become the final determination of telephone: 303–445–2901. older; a corporation subject to the laws the Department of the Interior. The SUPPLEMENTARY INFORMATION: Notice is of any State or of the United States; a Bureau of Land Management may accept hereby given that the interest rate to be State, State instrumentality, or political or reject any or all offers, or withdraw used by Federal agencies in the
VerDate 11
formulation and evaluation of plans for Netherlands)—briefing and vote. (The St. NW, Washington, DC 20531. If you water and related land resources is Commission is currently scheduled to need a copy of the collection instrument 6.375 percent for fiscal year 2001. transmit its determination and with instructions, or have additional This rate has been computed in Commissioners’ opinions to the information, please contact Christopher accordance with section 80(a), Pub. L. Secretary of Commerce on February 22, J. Mumola at 202–307–5995, or via 93–251 (88 Stat. 34) and 18 CFR 704.39, 2001.) facsimile at 202–514–1757. which: (1) Specify that the rate shall be 6. Outstanding action jackets: None. Written comments and suggestions based upon the average yield during the In accordance with Commission from the public and affected agencies preceding fiscal year on interest-bearing policy, subject matter listed above, not concerning the proposed collection of marketable securities of the United disposed of at the scheduled meeting, information should address one or more States which, at the time the may be carried over to the agenda of the of the following four points: following meeting. computation is made, have terms of 15 (1) Evaluate whether the collection of years or more remaining to maturity By order of the Commission: information is necessary for the proper (average yield is rounded to nearest one- Issued: January 24, 2001. performance of the functions of the eighth percent); and (2) provide that the Donna R. Koehnke, agency, including whether the rate shall not be raised or lowered more Secretary. information will have practical utility; than one-quarter of 1 percent for any year. The Treasury Department [FR Doc. 01–2676 Filed 1–26–01; 1:47 pm] (2) Evaluate the accuracy of the calculated the specified average to be BILLING CODE 7020–02–P agency’s estimate of the burden of the 6.29 percent. Rounding this average collection of information, including the yield to the nearest one-eighth percent validity of the methodology and is 6.25 percent, which exceeds the DEPARTMENT OF JUSTICE assumptions used; permissible one-quarter of 1 percent (3) Enhance the quality, utility and change from fiscal year 2000 to 2001. Office of Justice Program clarity of the information to be collected; and Therefore, the change is limited to one- Bureau of Justice Statistics; Agency quarter of 1 percent. Information Collection Activities; (4) Minimize the burden of the The rate of 6.375 percent shall be Proposed Collection; Comment collection of information on those who used by all Federal agencies in the Request are to respond, including through the formulation and evaluation of water and use of appropriate automated, related land resources plans for the ACTION: Notice of Information Collection electronic, mechanical, or other purpose of discounting future benefits Under Review: Deaths In Custody, technological collection techniques or and computing costs or otherwise 2000—Report on Inmates Under Jail other forms of information technology, converting benefits and costs to a Jurisdiction/Inmates in Private and e.g. permitting electronic submission of common time basis. Multi-Jurisdiction Jails. responses. Dated: November 16, 2001. Office of Management and Budget Overview of This Information Elizabeth Cordova-Harrison, (OMB) approval is being sought for the Collection Deputy Director, Office of Policy. information collection listed below. [FR Doc. 01–2497 Filed 1–29–01; 8:45 am] (1) Type of information collection. This proposed information collection New data collection. BILLING CODE 4310–94–P was previously published in the Federal (2) The title of the Form/Collection: Register on October 19, 2000, at Vol 65 Deaths in Custody, 2000—Report on FR 62752, allowing for a 60-day public INTERNATIONAL TRADE Inmates Under Jail Jurisdiction/Inmates comment period on this information in Private and Multi-jurisdiction Jails. COMMISSION collection. No comments were received (3) The agency form number and the [USITC SE–01–005] by the Bureau of Justice Statistics. The purpose of this notice is to allow an applicable component of the Sunshine Act Meeting additional 30 days for public comments. Department sponsoring the collection. Comments are encouraged and will be Forms: CJ–9 and CJ–9A. Corrections AGENCY HOLDING THE MEETING: United accepted for ‘‘thirty days’’ until March Unit, Bureau of Justice Statistics, Office States International Trade Commission. 1, 2001. This process is conducted in of Justice Programs, United States TIME AND DATE: February 8, 2001 at accordance with 5 CFR 1320.10. Department of Justice. 11:00 a.m. Written comments and/or suggestions (4) Affected public who will asked to PLACE: Room 101, 500 E Street, SW., regarding the item(s) contained in this respond, as well as a brief abstract: Washington, DC 20436, Telephone: notice, especially regarding the Primary: Local jail administrators. The (202) 205–2000. estimated public burden and associated Deaths in Custody, 2000 collections will assess the number of inmate deaths that STATUS: Open to the public. response time, should be directed to the occur while in law enforcement MATTERS TO BE CONSIDERED: Office of Management and Budget, custody. This collection will provide 1. Agenda for future meeting: None. Office of Information and Regulatory 2. Minutes. Affairs, Attn.: Mr. Nathan Knuffman, the only source of this essential 3. Ratification List. 202–395–6466, Department of Justice information at the national level. The 4. Inv. No. 731–TA–683 Desk Officer, Room 10235, Office of data providers for this collection are (Review)(Fresh Garlic from China)— Management and Budget, Washington, confinement facilities usually briefing and vote. (The Commission is DC 20503. Additionally, comments may administered by local law enforcement currently scheduled to transmit its be submitted to OMB via facsimile to agencies. determination and Commissioners’ 202–395–7285. (5) An estimate of the total number of opinions to the Secretary of Commerce If you have additional comments, responses and the amount of the time on February 21, 2001.) suggestions, or additional information, estimated for an average response: 3,083 5. Inv. No. 731–TA–652 please write Jan M. Chaiken, Director, respondents each taking an average 30 (Review)(Aramid Fiber from the Bureau of Justice Statistics, 810 Seventh minutes to respond.
VerDate 11
(6) An estimate of the total public addressed to Suzanne Plimpton, Reports Nos. DPR–70 and DPR–75, issued to burden (in hours) associated with the Clearance Officer, National Science PSEG Nuclear LLC (the licensee), for collection: 1,541 annual burden hours. Foundation, 4201 Wilson Blvd., Rm. operation of the Salem Nuclear If additional information is required 295, Arlington, VA 22230, or by e-mail Generating Station, Unit Nos. 1 and 2 contact: Mrs. Brenda E. Dyer, Deputy to [email protected]. (Salem), located in Salem County, New Clearance Officer, United States FOR FURTHER INFORMATION CONTACT: Jersey. Department of Justice, Information Suzanne Plimpton on (703) 292–7556 or The proposed amendment would Management and Security Staff, Justice send email to [email protected]. change the FOLs and Technical Management Division, Suite 1220, 1331 Individuals who use a Specifications for Salem to reflect an Pennsylvania Ave. NW, National Place telecommunications device for the deaf increase in the licensed core power Building, Washington, DC 20530. (TDD) may call the Federal Information level to 3459 megawatts (thermal), 1.4% greater than the current level. Dated: January 23, 2001. Relay Service (FIRS) at 1–800–877–8339 Before issuance of the proposed between 8 a.m. and 8 p.m., Eastern time, Brenda E. Dyer, license amendment, the Commission Monday through Friday. Department Deputy Clearance Officer, United will have made findings required by the States Department of Justice. SUPPLEMENTARY INFORMATION: Atomic Energy Act of 1954, as amended [FR Doc. 01–2508 Filed 1–29–01; 8:45 am] Title of Collection: EHR Impact (the Act) and the Commission’s BILLING CODE 4410–18–M Database; Generic Clearance. regulations. OMB Approval Number: 3145–0136. By March 1, 2001, the licensee may Expiration Date of Approval: file a request for a hearing with respect NATIONAL SCIENCE FOUNDATION September 30, 2001. to issuance of the amendment to the Proposed Renewal Project: The EHR subject facility operating license and Agency Information Collection Impact Database was established in any person whose interest may be Activities: Comment Request; Generic 1995 to integrate all available affected by this proceeding and who Survey Clearance of the EHR Impact information pertaining to the NSF’s wishes to participate as a party in the Database Education and Training portfolio. Under proceeding must file a written request a generic survey clearance (OMB 3145– for a hearing and a petition for leave to AGENCY: National Science Foundation. 0136) data from the NSF administrative intervene. Requests for a hearing and a ACTION: Notice. database are incorporated and petition for leave to intervene shall be additional information is obtained SUMMARY: The National Science filed in accordance with the through initiative-divisional-, and Foundation (NSF) is announcing plans Commission’s ‘‘Rules of Practice for program-specific data collections. to request renewed clearance of this Domestic Licensing Proceedings’’ in 10 Use of the Information: This collection. In accordance with the CFR Part 2. Interested persons should information is required for effective requirement of section 3506(c)(2)(A) of consult a current copy of 10 CFR 2.714 administration, program monitoring and the Paperwork Reduction Act of 1995, which is available at the Commission’s evaluation, and for measuring we are providing opportunity for public Public Document Room, located at One attainment of NSF’s program goals, as White Flint North, 11555 Rockville Pike comment on this action. After obtaining required by the Government (first floor), Rockville, Maryland and and considering public comment, NSF Performance and Results Act (GPRA). accessible electronically through the will prepare the submission requesting Burden on the Public: The total ADAMS Public Electronic Reading OMB clearance of this collection for no estimate for this collection is 50,000 Room link at the NRC Web site (http:/ longer than 3 years. annual burden hours. This figure is /www.nrc.gov). If a request for a hearing Comments are invited on: (a) Whether based on the previous 3 years of or petition for leave to intervene is filed the proposed collection of information collecting information under this by the above date, the Commission or an is necessary for the proper performance clearance. The average annual reporting Atomic Safety and Licensing Board, of the functions of the Agency, burden is between 2 and 50 hours per designated by the Commission or by the including whether the information shall ‘respondent’ who may be an individual Chairman of the Atomic Safety and have practical utility; (b) the accuracy of or a project site representing groups. Licensing Board Panel, will rule on the the Agency’s estimate of the burden of Dated: January 24, 2001. request and/or petition; and the the proposed collection of information; Secretary or the designated Atomic Suzanne H. Plimpton, (c) ways to enhance the quality, utility, Safety and Licensing Board will issue a and clarity of the information on NSF Reports Clearance Officer. notice of hearing or an appropriate respondents, including through the use [FR Doc. 01–2499 Filed 1–29–01; 8:45 am] order. of automated collection techniques or BILLING CODE 7555–01–M As required by 10 CFR 2.714, a other forms of information technology; petition for leave to intervene shall set and (d) ways to minimize the burden of forth with particularity the interest of the collection of information on NUCLEAR REGULATORY the petitioner in the proceeding, and respondents, including through the use COMMISSION how that interest may be affected by the of automated collection techniques or results of the proceeding. The petition other forms of information technology. [Docket Nos. 50–272 AND 20–311] should specifically explain the reasons DATES: Written comments should be PSEG Nuclear LLC; Notice of why intervention should be permitted received by April 2, 2001 to be assured Consideration of Issuance of with particular reference to the of consideration. Comments received Amendment to Facility Operating following factors: (1) the nature of the after that date will be considered to the License and Opportunity for a Hearing petitioner’s right under the Act to be extent practicable. made a party to the proceeding; (2) the ADDRESSES: Written comments The U.S. Nuclear Regulatory nature and extent of the petitioner’s regarding the information collection and Commission (the Commission) is property, financial, or other interest in requests for copies of the proposed considering issuance of an amendment the proceeding; and (3) the possible information collection request should be to Facility Operating Licenses (FOLs) effect of any order which may be
VerDate 11
entered in the proceeding on the General Counsel, U.S. Nuclear how NRC plans to revise its oversight petitioner’s interest. The petition should Regulatory Commission, Washington, program for nuclear fuel cycle facilities. also identify the specific aspect(s) of the DC 20555–0001, and to Mr. Jeffrie J. This meeting follows the December 20, subject matter of the proceeding as to Keenan, Esquire, Nuclear Business 2000 briefing to the Commission by which petitioner wishes to intervene. Unit—N21, P.O. Box 236, Hancocks NRC staff and external stakeholders on Any person who has filed a petition for Bridge, NJ 08038, attorney for the this subject. Presentations and other leave to intervene or who has been licensee. documents provided at each meeting are admitted as a party may amend the Nontimely filings of petitions for placed on the NRC INTERNET web page petition without requesting leave of the leave to intervene, amended petitions, (http://www.nrc.gov). Board up to 15 days prior to the first supplemental petitions and/or requests Similar to the revision of the oversight prehearing conference scheduled in the for hearing will not be entertained program for commercial nuclear power proceeding, but such an amended absent a determination by the reactor plants, NRC initiated an effort to petition must satisfy the specificity Commission, the presiding officer or the improve its oversight program for requirements described above. presiding Atomic Safety and Licensing nuclear fuel cycle facilities. This effort Not later than 15 days prior to the first Board that the petition and/or request is described in SECY–99–188, prehearing conference scheduled in the should be granted based upon a ‘‘Evaluation and Proposed Revision of proceeding, a petitioner shall file a balancing of the factors specified in 10 the Nuclear Fuel Cycle Facility Safety supplement to the petition to intervene CFR 2.714(a)(1)(i)–(v) and 2.714(d). Inspection Program,’’ and in SECY–00– which must include a list of the If a request for a hearing is received, 0222, ‘‘Status of Nuclear Fuel Cycle contentions which are sought to be the Commission’s staff may issue the Facility Oversight Program Revision.’’ litigated in the matter. Each contention amendment after it completes its SECY–99–188 and SECY–00–0222 are must consist of a specific statement of technical review and prior to the available in the Public Document Room the issue of law or fact to be raised or completion of any required hearing if it and on the NRC Web Page at http:// controverted. In addition, the petitioner publishes a further notice for public www.nrc.gov/NRC/COMMISSION/ shall provide a brief explanation of the comment of its proposed finding of no SECYS/index.html. bases of the contention and a concise significant hazards consideration in Purpose of Meeting: To obtain statement of the alleged facts or expert accordance with 10 CFR 50.91 and stakeholder views for improving the opinion which support the contention 50.92. NRC oversight program for ensuring fuel and on which the petitioner intends to For further details with respect to this cycle licensees and certificate holders rely in proving the contention at the action, see the application for maintain protection of worker and hearing. The petitioner must also amendment dated November 10, 2000, public health and safety, protection of provide references to those specific which is available for public inspection the environment, and safeguards for sources and documents of which the at the Commission’s Public Document special nuclear material and classified petitioner is aware and on which the Room, located at One White Flint North, matter in the interest of national petitioner intends to rely to establish 11555 Rockville Pike (first floor), those facts or expert opinion. Petitioner security. The oversight program applies Rockville, Maryland, and accessible to commercial nuclear fuel cycle must provide sufficient information to electronically through the ADAMS show that a genuine dispute exists with facilities regulated under 10 CFR Parts Public Electronic Reading Room link at 40, 70, and 76. The facilities currently the applicant on a material issue of law the NRC Web site (http://www.nrc.gov). or fact. Contentions shall be limited to include gaseous diffusion plants, highly matters within the scope of the Dated at Rockville, Maryland, this 23rd day enriched uranium fuel fabrication of January 2001. amendment under consideration. The facilities, low-enriched uranium fuel contention must be one which, if For the Nuclear Regulatory Commission. fabrication facilities, and a uranium proven, would entitle the petitioner to Robert J. Fretz, hexafluoride (UF6 production facility. relief. A petitioner who fails to file such Project Manager, Section 2, Project These facilities possess large quantities a supplement which satisfies these Directorate I, Division of Licensing Project of materials that are potentially requirements with respect to at least one Management, Office of Nuclear Reactor hazardous (i.e., radioactive, toxic, and/ contention will not be permitted to Regulation. or flammable) to the workers, public, participate as a party. [FR Doc. 01–2539 Filed 1–29–01; 8:45 am] and environment. Also, some of the Those permitted to intervene become BILLING CODE 7590–01–P facilities possess information and parties to the proceeding, subject to any material important to national security. limitations in the order granting leave to In revising the oversight program, the intervene, and have the opportunity to NUCLEAR REGULATORY goal is to have an oversight program participate fully in the conduct of the COMMISSION that: (1) Provides earlier and more hearing, including the opportunity to objective indications of facility Meeting Concerning The Revision of present evidence and cross-examine performance in the areas of safety and the Oversight Program for Nuclear witnesses. national security, (2) increases A request for a hearing or a petition Fuel Cycle Facilities stakeholder confidence in the NRC, and for leave to intervene must be filed with AGENCY: Nuclear Regulatory (3) increases regulatory effectiveness, the Secretary of the Commission, U.S. Commission (NRC). efficiency, and realism. To achieve this Nuclear Regulatory Commission, ACTION: Notice of Public Meeting. goal, the NRC desires the revised Washington, DC 20555–0001, Attention: oversight program to be more risk- Rulemakings and Adjudications Staff, or SUMMARY: NRC will hold a public informed and performance-based. may be delivered to the Commission’s meeting at the NRC Headquarters The public meeting will focus on the Public Document Room, located at One location at 11555 Rockville Pike, in next actions and schedule in the project White Flint North, 11555 Rockville Pike Rockville, MD to provide the public, to revise the oversight program. A final (first floor), Rockville, Maryland, by the those regulated by the NRC, and other draft project work plan has been posted above date. A copy of the petition stakeholders with information about, on the NRC Technical Conference should also be sent to the Office of the and an opportunity to provide views on, website at http://techconf.llnl.gov/cgi-
VerDate 11
bin/topics. This work plan will be the NUCLEAR REGULATORY the opportunity to present oral main agenda item. COMMISSION statements and the time allotted therefor, can be obtained by contacting DATES: Members of the public, industry, Advisory Committee on Reactor the cognizant ACRS staff engineer, Mr. and other stakeholders are invited to Safeguards Paul A. Boehnert (telephone 301–415– attend and participate in the meeting, 8065) between 7:30 a.m. and 4:30 p.m. which is scheduled for 10:00 a.m. to Subcommittee Meeting on Thermal- (EST). Persons planning to attend this 1:00 p.m. on Thursday, February 8, Hydraulic Phenomena; Notice of meeting are urged to contact the above 2001. The meeting will be held in the Meeting named individual one or two working One White Flint North building in days prior to the meeting to be advised conference room O–16B4. The ACRS Subcommittee on Thermal- Hydraulic Phenomena will hold a of any potential changes to the agenda, ADDRESSES: NRC Headquarters, 11555 meeting on February 20, 2001, Room T– etc., that may have occurred. Rockville Pike, in Rockville, MD. Visitor 2B3, 11545 Rockville Pike, Rockville, Date: January 24, 2001. parking around NRC Headquarters is Maryland. James E. Lyons, limited; however, the public meeting Portions of the meeting may be closed Associate Director for Technical Support. site may be reached by taking the to public attendance to discuss [FR Doc. 01–2537 Filed 1–29–01; 8:45 am] Washington DC area metro to White proprietary information per 5 U.S.C. Flint. NRC Headquarters is located 552b(c)(4) pertinent to the Electric BILLING CODE 7590–01–P across the street from the White Flint Power Research Institute. metro station. The agenda for the subject meeting NUCLEAR REGULATORY shall be as follows: FOR FURTHER INFORMATION, CONTACT: COMMISSION Patrick Castleman, Office of Nuclear Tuesday, February 20, 2001—8:30 a.m. Material Safety and Safeguards, U.S. until the conclusion of business Sunshine Act Meeting Nuclear Regulatory Commission, The Subcommittee will (1) continue AGENCY HOLDING THE MEETING: Washington, DC 20555, telephone (301) its review of the Electric Power Nuclear 415–8118, e-mail [email protected]. Research Institute RETRAN–3D thermal- Regulatory Commission. hydraulic transient analysis code, and DATE: Weeks of January 29, February 5, Dated at Rockville, Maryland this 23 day 12, 19, 26, March 5, 2001. of January 2001. (2) discuss the status of the NRC staff’s For the Nuclear Regulatory Commission. pending reviews of industry thermal- PLACE: Commissioners’ Conference Patrick Castleman, hydraulic codes. The purpose of this Room, 11555 Rockville Pike, Rockville, meeting is to gather information, Maryland. Project Manager, Inspection Section, Safety and Safeguards Support Branch, Division of analyze relevant issues and facts, and to STATUS: Public and Closed. formulate proposed positions and Fuel Cycle Safety and Safeguards. MATTERS TO BE CONSIDERED: [FR Doc. 01–2538 Filed 1–29–01; 8:45 am] actions, as appropriate, for deliberation by the full Committee. Week of January 29, 2001 BILLING CODE 7590–01–P Oral statements may be presented by Tuesday, January 30, 2001 members of the public with the 9:30 a.m.—Briefing on Status of Nuclear NUCLEAR REGULATORY concurrence of the Subcommittee Waste Safety (Public Meeting) COMMISSION Chairman. Written statements will be accepted and made available to the (Contact: Claudia Seelig, 301–415– Advisory Committee on Reactor Committee. Electronic recordings will 7243) Safeguards be permitted only during those portions This meeting will be webcast live at of the meeting that are open to the the Web address—www.nrc.gov/ Subcommittee Meeting on Planning public, and questions may be asked only live.html and Procedures; Revised by members of the Subcommittee, its Wednesday, January 31, 2001 consultants, and staff. Persons desiring The ACRS Subcommittee meeting on to make oral statements should notify 9:25 a.m.—Affirmation Session (Public Planning and Procedures scheduled to the cognizant ACRS staff engineer Meeting) (Tentative) start at 1:00 p.m. on January 31, 2001, named below five days prior to the a: Fansteel, Inc. (Muskogee, Oklahoma Room T–2B1, 11545 Rockville Pike, meeting, if possible, so that appropriate Site); Parties’ Joint Motion to Rockville, Maryland has been changed arrangements can be made. Dismiss Fansteel, Inc.’s Appeal of to start at 10:00 a.m. Notice of this During the initial portion of the the Presiding Officer’s Decision to meeting was published in the Federal meeting, the Subcommittee, along with Grant a Hearing Register on Thursday, December 28, any of its consultants who may be b: HYDRO RESOURCES, INC. 2000 (65 FR 82410). All other items present, may exchange preliminary Commission Review of LBP–99–40 pertaining to this meeting remain the views regarding matters to be (Presiding Officer decision holding same as previously published. considered during the balance of the proceeding in abeyance); meeting. Commission Review of last half of For further information contact: Dr. LBP–99–30 (Presiding Officer John T. Larkins, cognizant ACRS staff The Subcommittee will then hear presentations by and hold discussions decision on NEPA/Environmental person, (telephone: 301/415–7360) Justice) between 7:30 a.m. and 4:15 p.m. (EST). with representatives of the Electric Power Research Institute, the NRC staff, 9:30 a.m.—Briefing on Status of OCIO Dated: January 23, 2001. and other interested persons regarding Programs, Performance, and Plans James E. Lyons, this review. (Public Meeting) (Contact: Donnie Associate Director for Technical Support, Further information regarding topics Grimsley, 301–415–8702) ACRS/ACNW. to be discussed, whether the meeting This meeting will be webcast live at [FR Doc. 01–2536 Filed 1–29–01; 8:45 am] has been canceled or rescheduled, and the Web address—www.nrc.gov/ BILLING CODE 7590–01–P the Chairman’s ruling on requests for live.html
VerDate 11
Thursday, February 1, 2001 to be added to it, please contact the U.S. Postal Service, 475 L’Enfant Plaza, 9:30 a.m.—Briefing on Status of OCFO Office of the Secretary, Washington, SW., Washington, DC 20260–1000. Programs, Performance and Plans D.C. 20555 (301–415–1969). In addition, Telephone (202) 268–4800. distribution of this meeting notice over (Public Meeting) (Contact: Lars William T. Johnstone, Solander, 301–415–6080) the Internet system is available. If you are interested in receiving this Deputy Secretary. This meeting will be webcast live at Commission meeting schedule [FR Doc. 01–2675 Filed 1–26–01; 1:48 pm] the Web address—www.nrc.gov/ electronically, please send an electronic BILLING CODE 7710–12–M live.html message to [email protected]. Week of February 5, 2001—Tentative Dated: January 25, 2001. SECURITIES AND EXCHANGE Monday, February 5, 2001 David Louis Gamberoni, COMMISSION 1:55 p.m.—Affirmation Session (Public Technical Coordinator, Office of the Secretary. Meeting) (If needed) [Rel. No. IC–24834; 812–11900] [FR Doc. 01–2630 Filed 1–26–01; 10:16 am] Week of February 12, 2001—Tentative BILLING CODE 7590–01–M Goldman Sachs Trust, et al.; Notice of Wednesday, February 14, 2001 Application January 23, 2001. 10:25 a.m.—Affirmation Session (Public UNITED STATES POSTAL SERVICE Meeting) (If needed) BOARD OF GOVERNORS AGENCY: Securities and Exchange Commission (‘‘Commission’’ or ‘‘SEC’’). Week of February 19, 2001—Tentative Sunshine Act Meeting ACTION: Notice of application for an Tuesday, February 20, 2001 order under sections 6(c) and 17(b) of 10:25 a.m.—Affirmation Session (Public TIME AND DATES: 10:30 a.m., Monday, the Investment Company Act of 1940 Meeting) (If needed) February 5, 2001; 8:30 a.m., Tuesday, (the ‘‘Act’’) for an exemption from 10:30 a.m.—Briefing on Spent Fuel Pool February 6, 2001. section 17(a) of the Act. Accident Risk at Decommissioning PLACE: San Antonio, Texas, at the Plaza Plants and Rulemaking Initiatives San Antonio Marriott Hotel, 555 South SUMMARY OF APPLICATION: Applicants (Public Meeting) (Contact: George Alamo Street, in Hidalgo Ballroom C. request an order that would permit Hubbard, 301–415–2870) STATUS: February 5 (Closed); February 6 certain money market funds to engage in This meeting will be webcast live at (Open). principal transactions in tax-exempt the Web address—www.nrc.gov/ MATTERS TO BE CONSIDERED: money market instruments with an live.html affiliated dealer. Monday, February 5—10:30 a.m. APPLICANTS: Goldman Sachs Trust (the Week of February 26, 2001—Tentative (Closed) ‘‘Trust’’), Goldman, Sachs & Co., Monday, February 26, 2001 1. Financial Performance. Goldman Sachs Funds Management, 2. Fiscal Year 2001 Integrated L.P. (‘‘GSFM’’), and Goldman Sachs 2:00 p.m.—Meeting with the National Financial Plan. Asset Management International Association of Regulatory Utility 3. Preliminary Annual Performance (‘‘GSAMI’’). Commissioners (NARUC) (Public Plan Targets FY 2002. FILING DATES: The application was filed Meeting) (Contact: Spiros Droggitis, 4. Workforce Planning and 301–415–2367) on December 21, 1999 and amended on Development. May 24, 2000, September 1, 2000 and This meeting will be webcast live at 5. Rate and Classification Matters. November 14, 2000. Applicants have the Web address—www.nrc.gov/ 6. Compensation Issues. agreed to file an amendment during the live.html 7. Personnel Matters. notice period, the substance of which is Tuesday, February 27, 2001 Tuesday, February 6—8:30 a.m. (Open) reflected in this notice. 10:25 a.m.—Affirmation Session (Public 1. Minutes of the Previous Meeting, HEARING OR NOTIFICATION OF HEARING: An Meeting) (If needed) January 8–10, 2001. order granting the application will be 10:30 a.m.—Briefing on Threat 2. Remarks of the Postmaster General issued unless the SEC orders a hearing. Environment Assessment (Closed- and CEO. Interested persons may request a Ex. 1) 3. Appointment of Members to Board hearing by writing to the SEC’s Secretary and serving applicants with a Week of March 5, 2001—Tentative Committees. 4. Fiscal Year 2000 Comprehensive copy of the request, personally or by There are no meetings scheduled for Statement on Postal Operations. mail. Hearing requests should be the Week of March 5, 2001. 5. Fiscal Year 2001 Operating Budget. received by the SEC by 5:30 p.m. on *The schedule for Commission meetings is 6. Capital Investment Plan. February 20, 2001, and should be subject to change on short notice. To verify 7. Fiscal Year 2001 Financing Plan. accompanied by proof of service on the status of meetings call (recording)—(301) 8. Quarterly Report on Service applicants, in the form of an affidavit, 415–1292. Contact person for more Performance. or, for lawyers, a certificate of service. information: David Louis Gamberoni (301) 9. Capital Investment. Hearing requests should state the nature 415–1651. a. Los Angeles, California, Mar Vista of the writer’s interest, the reason for the The NRC Commission Meeting Station. request, and the issues contested. Schedule can be found on the Internet 10. Report on the Southwest Area and Person may request notification of a at: http://www.nrc.gov/SECY/smj/ Rio Grande District. hearing by writing to the SEC’s schedule.htm 11. Tentative Agenda for the March 5– Secretary. This notice is distributed by mail to 7, 2001, meeting in Washington, DC. ADDRESSES: Secretary, SEC, 450 Fifth several hundred subscribers; if you no CONTACT PERSON FOR MORE INFORMATION: Street, NW., Washington, DC 20549– longer wish to receive it, or would like David G. Hunter, Secretary of the Board, 0609.
VerDate 11
APPLICANTS: The Trust, 4900 Sears securities, including tax-exempt which Goldman, Sachs & Co. serves as Tower, Chicago, Illinois 60606–6303; securities that qualify for purchase by a distributor for shares of the Funds. Goldman, Sachs & Co., 85 Broad St., money market fund under rule 2a–7 due Currently, neither GSFM nor GSAMI New York, NY 10004; GSFM, 32 Old to the existence of a floating rate of acts as investment adviser to a Fund.5 Slip, New York, NY 10005; GSAMI, interest or a demand feature. The 5. Goldman, Sachs & Co., GSFM and Procession House, 55 Ludgate Hill, requested relief would permit each GSAMI are directly or indirectly London EC4A AM7JW, England. existing or future Money Market Series partnership or corporate subsidiaries of FOR FURTHER INFORMATION CONTACT: of the Trust,3 and other registered The Goldman Sachs Group, Inc. (‘‘GS Marilyn Mann, Senior Counsel, at (202) investment company or separate series Group’’), a Delaware corporation. GS 942–0582, or Mary Kay Frech, Branch thereof that is a money market fund for Group is the general partner and a Chief, at (202) 942–0564 (Division of which any one of the Advisers may, in limited partner of Goldman, Sachs & Co. Investment Management, Office of the future, serve as investment adviser The other general partner of Goldman, Investment Company Regulation). or subadviser (the ‘‘Future Funds,’’ and Sachs & Co., Goldman, Sachs & Co. L.L.C., is a limited liability company SUPPLEMENTARY INFORMATION: The collectively with the Money Market following is a summary of the Series of the Trust, the ‘‘Funds’’) to whose membership interests are held application. The complete application engage in purchases and sales of solely by GS Group. GSFM is a Municipal Instruments with Goldman Delaware limited partnership of which may be obtained for a fee from the SEC’s 4 Public Reference Branch, 450 5th Street, Sachs. the general partner is a corporation 3. The investment objective of each NW., Washington, DC 20549–0102 wholly-owned directly by GS Group and Money Market Series is a maximize (telephone (202) 942–8090). the sole limited partner is GS Group. current income, to the extent consistent GSAMI is an English company wholly- Applicants’ Representations with the preservation of capital and the owned indirectly by GS Group. The 1. Goldman, Sachs & Co. is a New maintenance of liquidity. The Tax-Free Advisers maintain offices that are York limited partnership registered as a Money Market Fund, Tax-Exempt physically separate form those of the broker-dealer under the Securities Diversified Portfolio, Tax-Exempt Dealer. Exchange Act of 1934 (the ‘‘1934 Act’’), California Portfolio and Tax-Exempt 6. The investment advisory operations and as an investment adviser under the New York Portfolio seek income for the Funds are handled by a group Investment Advisers Act of 1940 (the excluded from gross income for federal currently consisting of 12 persons (the ‘‘Advisers Act’’).1 GSFM is a Delaware income tax purposes, and in the case of ‘‘Money market Trading Desk’’) within limited partnership registered as an the Tax-Exempt California Portfolio and GSAM. The personnel assigned to the investment adviser under the Advisers Tax-Exempt California Portfolio and Money Market Trading Desk are Act and GSAMI is a United Kingdom Tax-Exempt New York Portfolio, exempt exclusively devoted to the business and corporation registered as an investment from California State and New York affairs of GSAM. Subject to the adviser under the Advisers Act. State and City personal income taxes, supervision of the Board of Trustees (the Goldman, Sachs & Co., in its capacity as respectively. ‘‘Trustees’’) of the Funds, the executive 4. Each Fund values its portfolio by a dealer in securities and financial management of GSAM, the Investment using the amortized cost method of instruments, is referred to as ‘‘Goldman Policy Committee (discussed below) and valuation in reliance on rule 2a–7 under Sachs’’ or the ‘‘Dealer.’’ Goldman, Sachs the Credit Department (discussed the Act. Each of the existing Funds has below), all portfolio selection and & Co., acting through a business unit of an investment advisory agreement with its Investment Management Division trading decisions made for the Funds Goldman, Sachs & Co., pursuant to are made by personnel assigned to the (Goldman Sachs Asset Management which Goldman, Sachs & Co. provides (‘‘GSAM’’)), GSFM and GSAMI are Money Market Trading Desk. All investment advisory and management portfolio managers responsible for the individually referred to as an ‘‘Adviser’’ services through its operating division 2 Funds are assigned to the Money Market and collectively as the ‘‘Advisers.’’ GSAM, and a distribution agreement 2. The Trust is a Delaware business Trading Desk. with Goldman, Sachs & Co., pursuant to trust and is registered under the Act as 7. Personnel on the Money Market an open-end management investment Trading Desk are not responsible for the 3 Currently, the Money Market Series of the Trust marketing or sale of Fund shares or company. For purposes of the are the Prime Obligations Portfolio, Money Market application, a ‘‘Money Market Series’’ is Portfolio, Tax-Exempt Diversified Portfolio, Tax- other Goldman, Sach & Co. products, a separate series of the Trust that is a Exempt California Portfolio and Tax Exempt New although from time to time they money market fund (as that term is York Portfolio (the ‘‘ILA Funds’’), which are five of participate in meetings with significant the Goldman Sachs-Institutional Liquid Assets potential clients and may provide other defined in rule 2a–7(b) under the Act) Portfolios (‘‘ILA’’) and Prime Obligations Fund, that is permitted to invest in Municipal Money Market Fund and Tax-Free Money Market client services. Because of their Instruments. ‘‘Municipal Instruments’’ Fund (the ‘‘FST Funds’’), which are three of the expertise in and knowledge of the are short-term tax-exempt money market Financial Square Funds (‘‘FTS‘‘). markets for short-term money market The Prime Obligations Portfolio, Money Market instruments, other Goldman, Sachs & Portfolio, Prime Obligations Fund and Money 1 The relief would also apply to any successors to Market Fund are taxable money market funds. In Co. personnel, may, from time to time, all or substantially all of the business, assets or 1994 a Commission order was issued permitting solicit their views on the viability (from property of Goldman, Sachs & Co. Any such these Funds to engage in principal transaction in the portfolio management perspective) succession shall be solely by way of change of taxable money market instruments with Goldman of proposals for pooled investment organization, such as incorporation, reincorporation Sachs. Institutional Liquid Assets, Investment or reorganization as a public company, partnership, Company Act Release Nos. 20653 (Oct. 25, 1994) vehicles involving such markets or limited liability company or business trust, whether (notice) and 20733 (Nov. 23, 1994) (order). While instruments. Finally, Money Market publicly traded or privately held. none of these Funds currently invests in Municipal Trading Desk personnel, who are 2 As used in the application, the term ‘‘Advisers’’ Instruments, each has the investment flexibility to generally familiar with instruments also includes any other division of, or other person do so under its investment objectives and policies. controlled by, controlling or under common control 4 All registered investment companies that structured to satisfy various provisions with, Goldman, Sachs & Co. that is engaged in currently intend to rely on the order are named as providing advisory services, now or in the future, applicants. Any of the Future Funds that rely on the 5 GSFM and GSAMI are included as applicants to the Trust or to any other Fund, as defined below, order will comply with the terms and conditions of because either or both may act in the future as subject to the terms and conditions of the order. the order. investment adviser to a Fund.
VerDate 11
of rule 2a–7, may also be solicited from is responsible. Security and sector instrument at any given time; and (e) time to time by various dealers, selection remain the exclusive varying price, volatility, liquidity and including Goldman Sachs, for their responsibility of the portfolio managers, availability for each type of instrument views on the structure of new subject of the Funds’ prospectus and within the market. instruments designed to be eligible credit guidelines, and are entirely 14. Applicants state that recent under rule 2a–7. outside the Committee process. The growth in tax-exempt money market 8. Credit analysis for the Money Committee’s decisions on average fund assets and withdrawals by several Market Trading Desk, Goldman, Sachs & maturity ranges are made by consensus, major dealers from making markets in and no member has a veto over the Co. and other affiliates of GS Group is Municipal Instruments have contributed decisions made by the Committee. Once performed by the Credit Department. to the limited availability of Municipal The Credit Department is a central a decision is made, the Money Market Instruments to money market funds that department of Goldman, Sachs & Co. Trading Desk implements the decision, are authorized to purchase Municipal which analyzes securities credit, managing each Fund’s average maturity Instruments. Applicants assert that, over counterparty risk, customer credit and range until the Committee’s decision is the past ten years, the growth in money related issues. The Credit Department modified at a subsequent meeting of the market funds that purchase Municipal maintains a list of eligible instruments Committee. Instruments has substantially outpaced which is used by the Money Market 11. Neither GSFM nor GSAMI the growth in Municipal Instruments. Trading Desk for portfolio management. currently manages any U.S. registered The Money Market Trading Desk is not money market funds. As a result, 15. Applicants state that Goldman authorized to purchase instruments that neither has established a unit Sachs has remained committed to the are not on this list. corresponding to the Money Market tax-exempt market, and has moved to 9. In general, the Money Market Trading Desk or to the Committee. It has fill the void left by departing dealers. As Trading Desk develops and implements not been determined whether, if GSFM the number of dealers with which the portfolio investment strategies within a or GSAMI were to manage a Fund, Funds can transact business has preselected average maturity range. The either would establish such a unit, or decreased, it has become even more average maturity range is selected in alternatively whether GSFM and/or important for the Funds to have weekly meetings of the Investment GSAMI would rely in whole or in part meaningful access to all of the major Policy Committee (the ‘‘Committee’’). on GSAM’s Money Market Trading Desk dealers in Municipal Instruments in The Committee determines the target and Committee. In any event, any order to diversify each Fund’s portfolio, average maturity range based on (1) counterpart of the Money Market to maintain portfolio liquidity, and to fundamental economic analysis and Trading Desk or the Committee increase opportunities for obtaining best technical market data; (2) anticipated established by either GSFM or GSAMI price and execution with respect to trends in monetary and fiscal policy; would conform in all material respects portfolio trades. and (3) anticipated customer activity. In to the description set forth in the application and would comply with all 16. Applicants state that, for the most connection with (1) and (2), personnel part, Municipal Instruments consist of of the Money Market Trading Desk of the conditions to the order. 12. Applicants state that the operators conventional municipal notes solicit views of dealers, including (‘‘conventional notes’’), tax-exempt Goldman Sachs, on economic and of the Advisers, on the one hand, and those of the Dealer, on the other hand, commercial paper, variable rate demand market developments. For example, notes, put bonds and flexible notes. such personnel routinely canvas are independent of each other. Condition 6 below describes certain Applicants state that there is no dealers, including Goldman Sachs, to comprehensive information published determine the ‘‘market’’ consensus elements of this independence and is designed to ensure that the Advisers as to the dollar amount and volume of regarding pending economic data and the Dealer continue to operate secondary market transactions executed releases, anticipated changes in Federal independently. in Municipal Instruments. However, Reserve policy, and the forecast for 13. Municipal Instruments are Goldman Sachs believes that it is gross supply of money market securities commonly referred to as ‘‘tax-exempt generally one of the top secondary available for investment.6 money market instruments’’ and are market dealers in Municipal 10. The Committee is not involved in traded in the ‘‘tax-exempt money Instruments, and leads the distribution review or approval of specific securities market.’’ Applicants state that the tax- of outstanding tax-exempt commercial to be purchased, the terms of any exempt money market is generally transactions or the types of securities in paper and remarketing of flexible notes. characterized by: (a) Obligors or Based upon Goldman Sachs estimates, which the Funds may invest. The guarantors having high credit ratings Committee is currently composed of 10 Goldman Sachs was responsible for and, accordingly, relatively low risk of 21% of the trading volume in variable GSAM employees (including personnel principal losses due to credit events; (b) of the Money Market Trading Desk, but rate demand notes, tax-exempt trading in over-the-counter markets, commercial paper and put bonds among no other portfolio management consisting of dealer firms that are personnel) and one employee from the Goldman Sachs and seven other leading primarily major securities firms or large dealers as of March, 2000. This estimate Investment Research Division of banks; (c) trading costs to the portfolio Goldman, Sachs & Co. The Goldman, includes 16% of the trading volume in primarily consisting of dealer or variable rate demand notes, 37% for tax- Sachs & Co. employee’s input into the underwriter spreads, typically not process is limited to participation in the exempt commercial paper, and 12% for greater than 12.5 basis points (0.125%), 7 Committee’s deliberations on economic put bonds. The broker-dealer but subject to variations based on the operations at Goldman Sachs are policy outlook, as it pertains to the very type of instrument or the occurrence of narrow issues for which the Committee handled by its Fixed Income, Currency turbulent market conditions; (d) an & Commodities Division. elaborate telephone communication 6 GSAM may also consult regarding municipal securities with Goldman Sachs business groups that network to match buyers with sellers, 7 Flexible notes are aggregated in variable rate conduct brokerage and advisory services for private which generally precludes being able to demand notes, put bonds and commercial paper in clients (collectively; ‘‘PCS’’). obtain a single market price for a given these statistics.
VerDate 11
Applicants’ Legal Analysis appropriate in the public interest and influence or control in any way the 1. Section 17(a) of the Act generally consistent with the protection of placing by the Funds or the Advisers of prohibits an affiliated person of a investors, consistent with the polices of orders with Goldman Sachs. registered investment company, or an each Fund, and consistent with 3. Before any principal transaction affiliated person of such a person, acting purposes fairly intended by the policy may be conducted pursuant to the order, as principal, from selling any security and provisions of the Act. the Funds or the Advisers must obtain such information as they deem to, or purchasing any security from, the Applicants’ Conditions company. Section 2(a)(30 defines an reasonably necessary to determine that Applicants agree that any order of the affiliated person of another person to the price test has been satisfied. In the SEC granting the requested relief will be include, if such other person is an case of each purchase or sale subject to the following conditions: investment company, any investment transactions, the Funds or the Advisers 1. The exemption shall be applicable must make and document a good faith adviser of the company. Applicants to principal transactions in the state that Goldman, Sachs & Co., as determination with respect to secondary market and primary or compliance with the price test based on investment adviser to the Funds, is an secondary fixed price dealer offerings affiliated person of the Funds.8 current price information obtained not made pursuant to underwriting through the contemporaneous Goldman Sachs is thus prohibited from syndicates. Principal purchase or sale engaging in principal transactions with solicitation of bona fide offers in transactions will be conducted only in connection with securities falling the Funds. Municipal Instruments that are First 2. Section 6(c) of the Act provides that within the same category of instrument, Tier Securities as defined in rule 2a– the Commission may exempt any quality and maturity (but not 7(a)(12)(i) under the Act. person, security, or transaction, or any necessarily the identical security or Notwithstanding the foregoing, if a class of persons, securities, or issuer). With respect to variable rate Fund purchases a Municipal Instrument transactions, if and to the extent that demand notes, contemporaneous meeting the above requirements from such exemption is necessary or solicitation of a bona fide offer will be the Dealer and, subsequent to such appropriate in the public interest and construed to mean any bona fide offer purchase the security becomes no longer consistent with the protection of solicited during the same trading day. an ‘‘Eligible Security,’’ the Fund may investors and the purposes fairly With respect to prospective purchases of sell the security to the Dealer in a intended by the policy and provisions of securities by a Fund, the dealer firms manner consistent with the the Act. from which prices are solicited must be requirements of rule 2a–7(c)(6)(i)(B). 3. Section 17(b) authorizes the those who have securities of the same The exemption shall not apply to any Commission to exempt a proposed categories and the type desired in their purchase or sale of any security issued transaction from section 17(a) if inventories and who are in a position to by Goldman Sachs or any affiliated evidence establishes that (a) the terms of quote favorable prices with respect person thereof or to any security subject the transaction, including the thereto. With respect to the prospective to a Demand Feature or Guarantee, as consideration to be paid or received, are sale of securities by a Fund, these dealer defined in rule 2a–7, issued by Goldman reasonable and fair and do not involve firms must be those who, in the Sachs or any affiliated person thereof. overreaching on the part of any person experience of the Funds and the For purposes of this requirement, Advisers, are in a position to quote concerned, (b) the proposed transaction Goldman Sachs will not be considered is consistent with the policy of each favorable prices. to be the issuer of a Demand Feature or 4. Principal transactions conducted by registered investment company Guarantee solely by reason of serving as a tax-exempt Fund pursuant to the order concerned, as recited in its registration a remarketing agent for a Municipal shall be limited to no more than than an statement and reports filed under the Instrument. aggregate of 20% of the purchases and Act, and (c) the proposed transaction is 2. A determination will be made with 20% of the sales of all transactions in consistent with the general purposes of respect to each principal transaction Municipal Instruments conducted by the Act. conducted by a Fund pursuant to the 4. Applicants state that the Funds are that Fund. Principal transactions in order, based upon the information Municipal Instruments conducted by a major buyers and sellers in the tax- reasonably available to the Funds and taxable Fund pursuant to the requested exempt money market with a strong the Advisers, that the price available order shall be limited to no more than need for access to large quantities of from Goldman Sachs is at least as an aggregate of 20% of the purchases high quality Municipal Instruments. favorable to the Fund as the prices and 20% of the sales of all transactions The applicants believe that having obtained from two other dealer bids in in Municipal Instruments conducted by access to a major dealer, such as connection with securities falling that Fund. These calculations shall be Goldman Sachs, would increase the within the same category of instrument, measured on an annual basis and shall Funds’ ability to obtain suitable quality and maturity (but not be computed with respect to the dollar portfolio securities. The applicants also necessarily the identical security or volume thereof. For the purposes of submit that the protective conditions set issuer) (‘‘price test’’). In the case of these calculations, purchases of forth below will prevent any variable rate demand notes, for which Municipal Instruments by a taxable overreaching on the part of any person dealer bids are not ordinarily available, Fund shall also count towards the 25% that could act to the detriment of a Fund the Fund will only undertake purchases cumulative limitation for purchases or and will ensure that each transaction is and sales where the rate of interest to be sales set forth in condition 3 of effected on a basis that is reasonable and earned from the variable rate demand Institutional Liquid Assets, Investment fair to the Fund and its shareholders. note is at least equal to that of variable Company Act Release No. 20653 (Oct. The applicants also believe that the rate demands notes of comparable 25, 1994). proposed exemption is necessary and quality that are available from other 5. Goldman Sachs’ dealer spread dealers. GS Group will not have any regarding any transaction with the 8 In the case of a Fund advised by an affiliate of Goldman, Sachs & Co., Goldman, Sachs & Co. involvement with respect to proposed Funds will be no greater than its would be an affiliated person of an affiliated person transactions between the Funds and the customary dealer spread on similar of the Fund. Advisers and will not attempt to (with unaffiliated parties) of a similar
VerDate 11
size during a comparable time period. Desk personnel, other GSAM personnel the case of variable rate demand notes, Its customary dealer spread also will be and respresentatives from the the same records shall be maintained consistent with the average or standard Investment Research Department of the except that the rates of quoted will be spread charged by dealers in money Dealer. The non-GSAM member’s input substituted for the prices quoted. market securities of a similar type and on the Investment Policy Committee (b) Records sufficient to verify transaction size. will be limited solely to expressions of compliance with the volume limitations 6. The Advisers, on the one hand, and his or her opinion on interest rate and contained on condition (4) above. The the Dealer, on the other, will operate on similar economic matters, and will be Dealer will provide the Funds with all different sides of appropriate Chinese included in the Investment Policy records and information necessary to Walls with respect to the Funds and the Committee only to the extent of implement this requirement. The Municipal Instruments. The Chinese considering and ratifying the portfolio records required by this condition (7) Walls will include all of the following managers’ average maturity will be maintained and preserved in the characteristics, and such others as may recommendations. The Investment same manner as records required under from time to time be considered Policy Committee will develop rule 31a–1(b)(1) under the Act. reasonable by the Dealer and the recommendations only on average 8. The legal and compliance Advisers to facilitate the factual maturity ranges and will not develop department of Goldman Sachs and the independence of the Advisers from the recommendations on specific securities Advisers will prepare and administer Dealer: or on types of Securities. guidelines for personnel of Goldman (a) Each of the Advisers will maintain (ii) Money Market Trading Desk Sachs and the Advisers to make certain offices physically separate from those of personnel may rely on research, that transactions conducted pursuant to the Dealer. including credit analysis and reports the order comply with the conditions (b) The compensation of persons prepared by the Goldman, Sachs & Co. set forth in the order and that the parties assigned to any of the Advisers (i.e., Credit Department, which is responsible generally maintain arm’s-length executive, administrative or investment firmwide for credit analysis and relationships. In the training of personnel) will not depend on the counterparty credit risk evaluations and Goldman Sachs’ personnel, particular volume or nature of trades effected by recommendations. emphasis will be placed upon the fact the Advisers for the Funds with the (iii) Members of the Management that the Funds are to receive rates as Dealer under the exemption, exemption, Committee of Goldman, Sachs & Co. and favorable as other institutional except to the extent that such trades GS Group, and certain other senior purchasers buying the same quantities. may affect the profits and losses of the executives with responsibility for The legal and compliance departments GS Group or Goldman, Sachs & Co. as overseeing operations of various will periodically monitor the activities a whole. division, subsidiaries and affiliates of of Goldman Sachs and the Advisers to (c) The Fixed Income, Currency & Goldman, Sachs & Co. are not precluded make certain that the conditions set Commodities Division of Goldman from exercising those functions over the forth in the order are adhered to. Sachs will not compensate to Advisers Advisors because they oversee the 9. The non-interested Trustees of the from its profits or losses on such Dealers as well, provided that such Funds will approve, periodically specific transactions with any of the persons shall not have any involvement review, and update as necessary, Advisers, provided that the allocation of with respect to proposed transactions guidelines for the Funds and the the profits by GS Group to its pursuant to the exemption and will not Advisers that are reasonably designed to shareholders and by Goldman, Sachs & in any way attempt to influence or make certain that the transactions Co. to its partners, and the control the placing by the Funds or any conducted pursuant to the exemption determination of general firm-wide Adviser of orders in respect of comply with the conditions set forth compensation of officers and Municipal Instruments with Goldman therein and that the above procedures employees, will be unaffected by this Sachs. are followed in all respects. The undertaking. 7. The Funds and the Advisers will respective non-interested Trustees will (d) Personnel assigned to the Money maintain such records with respect to periodically monitor the activities of the Market Trading Desk will be exclusively those transactions conducted pursuant Funds and the Advisers in this regard to devoted to the business and affairs of to the exemptions as may be necessary ensure that these goals are being one or more of the Advisers, except for to confirm compliance with the accomplished. consultations with Goldman Sachs, conditions to the requested relief. To 10. The Trustees of the Trust, PCS, and other dealers as discussed in this end, each Fund shall maintain the including a majority of the non- the application. Personnel assigned to following: interested Trustees, will have approved the Dealer will not participate in or (a) An itemized daily record of all the Fund’s participation in transaction otherwise seek to influence the Money purchases and sales of securities conducted pursuant to the exemption Market Trading Desk other than in the pursuant to the exemption, showing for and determined that such participation normal course of sales and dealer each transaction the following: (i) The by the Fund is the best interests of the activities of the same nature as are name and quantity of securities; (ii) the Funds and its shareholders. The simultaneously being carried out with unit purchase or sale price; and (iii) the minutes of the meeting of the Board of respect to nonaffiliated institutional time and date of the transaction. For Trustees at which this approval was clients. Each Adviser, on the one hand, each transaction (other than variable given must reflect in detail the reasons and the Dealer, on the other hand, may rate demand notes), these records shall for the Trustee’s determination. The nonetheless maintain affiliations other documents two quotations received Trustees will review no less frequently than with respect to the Funds, and in from other dealers for securities falling than annually the Fund’s participation addition with respect to the Funds as within the same category of instrument, in transactions conducted pursuant to follows: quality and maturity; including the the exemption during the prior year and (i) GSAM has organized and any other following: (i) The names of the dealers; determine whether the Fund’s Adviser may organize an Investment (ii) the names of the securities; (iii) the participation in such transaction Policy Committee the members of which prices quoted; and (iv) the times and continues to be in the best interests of include Money Market Group Trading dates the quotations were received. In the Fund and its shareholders. Such
VerDate 11
review will include (but not be limited) I. Self-Regulatory Organization’s required report to the Commission on (a) a comparison of the volume of Statement of the Terms of Substance of December 21, 2000.7 The report transactions in each type of security the Proposed Rule Change indicates that during the review period, conducted pursuant to the exemption to The CBOE seeks a four month CBOE did not discover any instances the market presence of the Dealer in the extension of the pilot program that where an account maintained an Market for that type of security, which provides for the elimination of position unusually large unhedged position. The market data may be based on good faith and exercise limits for the S&P 500 data from the report found that only 12 estimates to the extent that current Index (‘‘SPX’’), S&P 100 Index (‘‘OEX’’), accounts established positions in excess formal data is not reasonably available, and Dow Jones Industrial Average of 10% of the standard limit applicable and (b) a determination that the Funds (‘‘DJX’’) index options as well as for to each index at the time the Pilot are maintaining appropriate trading FLEX options overlying these indexes. Program was approved. These positions relationships with other sources for The text of the proposed rule change is were all in SPX and most were each type of security, to ensure that available at the Office of the Secretary, established by firms and market makers. there are appropriate sources for the CBOE and at the Commission. All of the accounts were hedged, quotations required by condition 3. The although to different degrees. Most minutes of the meetings of the Trustees II. Self-Regulatory Organization’s important, CBOE’s analysis did not of the Trust at which these Statement of the Purpose of, and discover any aberrations caused by large determinations are made will reflect in Statutory Basis for, the Proposed Rule unhedged positions during the life of detail the reasons for the Trustees’ Change the Pilot Program. For this reason, the determinations. In its filing with the Commission, the Exchange believes that its experience For the Commission, by the Division of Exchange included statements with the Pilot Program has been Investment Management, pursuant to concerning the purpose of and basis for positive. Accordingly, CBOE requests delegated authority. the proposed rule change and discussed that the effectiveness of the Pilot any comments it received on the Program be extended four months. Margaret H. McFarland, proposed rule change. The text of these 2. Statutory Basis Deputy Secretary. statements may be examined at the [FR Doc. 01–2503 Filed 1–29–01; 8:45 am] places specified in Item IV below. The The proposed rule change is consistent with Section 6(b)8 of the Act BILLING CODE 8010–01–M Exchange has prepared summaries, set forth in sections A, B, and C below, of in general and furthers the objectives of the most significant aspects of such Section 6(b)(5)9 in particular in that is SECURITIES AND EXCHANGE statements. it designed to promote just and COMMISSION equitable principles of trade as well as A. Self-Regulatory Organization’s to protect investors and the public [Release No. 34–43867; File No. SR–CBOE– Statement of the Purpose of, and interest, by allowing for the extension of 01–01] Statutory Basis for, the Proposed Rule a Pilot Program that has enable more Change business to be transacted on the Self-Regulatory Organizations; Notice 1. Purpose exchanges that might otherwise have of Filing and Immediate Effectiveness been transacted in the over the counter of Proposed Rule Change by the On January 22, 1999, the Commission (‘‘OTC’’) market without the benefit of Chicago Board Options Exchange, Inc. approved a two-year pilot program Exchange transparency and the Relating to a Four Month Extension to (‘‘Pilot Program’’) that allowed for the guarantee of The Options Clearing the Pilot Program to Eliminate Position elimination of position and exercise Corporation. The Exchange also believes and Exercise Limits for SPX, OEX, and limits for options on the OEX, SPX, DJX that the proposed rule change is DJX Options, and FLEX Options as well as for FLEX options overlying 10 4 consistent with section 11A of the Act Overlying These Indexes these indexes. The purpose of this in that it will enhance competition by proposed rule change is to request a January 22, 2001. allowing the Exchange to compete better fourth-month extension of the Pilot with the OTC market in options and Pursuant to Section 19(b)(1) of the 5 Program. with entities not subject to position Securities Exchange Act of 1934 The Approval Order required the limit rules. (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Exchange to submit a report to the notice is hereby given that on January Commission on the status of the Pilot B. Self-Regulatory Organization’s 18, 2001, the Chicago Board Options Program so that the Commission could Statement on Burden on Competition Exchange, Inc. (‘‘CBOE’’ or ‘‘Exchange’’) use this information to evaluate any The Exchange represents that the filed with the Securities and Exchange consequences of the program and to proposed rule change will impose no Commission (‘‘SEC’’ or ‘‘Commission’’) determine whether to approve the burden on competition that is not the proposed rule change as described elimination of position and exercise in Items I, II, and III below, which Items limits for these products on a permanent information that may be useful in evaluating the have been prepared by the Exchange. basis.6 The CBOE submitted the effectiveness of the pilot program. The Commission The proposed rule change has been filed expects the CBOE will take prompt action, by the CBOE as a ‘‘non-controversial’’ 4 See Securities Exchange Act Release No. 40969 including timely communication with the Commission and other marketplace self-regulatory rule change under Rule 19b–4(f)(6) 3 (January 22, 1999), 4 FR 49111 (February 1, 1999) (approving SR–CBOE–99–23). (‘‘Approval Order’’) organizations responsible for oversight of trading in under the Act. The Commission is 5 By separate filing, CBOE requests permanent component stocks, should any unanticipated publishing this notice to solicit approval of the Pilot Program. adverse market effects develop.’’ 7 comments on the proposed rule change 6 In the Approval Order, the Commission stated: Letter from Patricia L. Cerny, Director, Office of from interested persons. ‘‘CBOE will provide the Commission with a report Trading Practices, CBOE, to Elizabeth King, detailing the size and different types of strategies Associate Director, Division of Market Regulation employed with respect to positions established in (‘‘Division’’), SEC, dated December 21, 2000. 1 15 U.S.C. 78s(b)(1). those classes not subject to position limits. In 8 15 U.S.C. 78f. 2 17 CFR 240.19b–4. addition, the report will note whether any problems 9 15 U.S.C. 78f(b)(5). 3 17 CFR 240.19b–4(f)(6). resulted due to the no limit approach and any other 10 15 U.S.C 78k–1.
VerDate 11
necessary or appropriate in furtherance including whether the proposed rule of the Act,3 and Rule19b–4(f)(6) of the purposes of the Act. change is consistent with the Act. thereunder,4 which renders the proposal Persons making written submissions effective upon filing with the C. Self-Regulatory Organization’s should file six copies thereof with the Commission.5 The Commission is Statement on Comments on the Proposed Rule Change Received From Secretary, Securities and Exchange publishing this notice to solicit Members, Participants or Others Commission, 450 Fifth Street, NW., comments on the proposed rule change Washington, DC 20549–0609. Copies of from interest persons. No written comments were solicited the submission, all subsequent I. Self-Regulatory Organization’s or received with respect to the proposed amendments, all written statements Statement of the Terms of Substance of rule change. with respect to the proposed rule the Proposed Rule Change III. Date of Effectiveness of the change that are filed with the Proposed Rule Change and Timing for Commission, and all written Nasdaq proposes to amend NASD Commission Action communications relating to the Rule 4613, ‘‘Character of Quotations,’’ to proposed rule change between the adopt a $0.01 minimum quotation The foregoing proposed rule change Commission and any person, other than increment for Nasdaq securities as has become effective pursuant to those that may be withheld from the previously agreed to as part of the Section 19(b)(3)(A) of the Act11 and public in accordance with the Decimals Implementation Plan for the Rule 19b–4(f)(6) thereunder12 because provisions of 5 U.S.C. 552, will be Equities and Options Markets the proposed rule change (1) does not available for inspection and copying at (‘‘Implementation Plan’’ or ‘‘Plan’’) significantly affect the protection of the Commission’s Public Reference submitted to the Commission on July investors or the public interest; (2) does Room. Copies of such filing will also be 24, 2000. Because this proposal simply not impose any significant burden on available for inspection and copying at implements the terms and conditions of competition; and (3) does not become the Implementation Plan, Nasdaq has operative for 30 days from the date of the principal office of the Exchange. All submissions should refer to File No. designated this proposal as non- filing, or such shorter time that the controversial, rendering it effective Commission may designate if consistent SR–CBOE–01–01 and should be submitted by February 20, 2001. upon filing with the Commission. with the protection of investors and the Nasdaq asks that the Commission waive public interest.13 At any time within 60 For the Commission, by the Division of Market Regulation, pursuant to delegated the 30-day operative waiting period days of the filing of the proposed rule 6 15 pursuant to SEC Rule 19b–4(f)(6)(iii). change, the Commission may summarily authority. Nasdaq will implement this rule change abrogate such rule change if it appears Margaret H. McFarland, on March 12, 2001. The text of the to the Commission that such action is Deputy Secretary. proposed rule change is below. necessary or appropriate in the public [FR Doc. 01–2505 Filed 1–29–01; 8:45 am] Proposed new language is in italics. interest, for the protection of investors, BILLING CODE 8010–01–M Proposed deletions are in brackets. or otherwise in the furtherance of the purposes of the Act.14 4613. Character of Quotations The Exchange has requested that the SECURITIES AND EXCHANGE (a) Two-Sided Quotations rule change be accelerated to become COMMISSION operative on January 22, 2001, because (1) No Change. such action will allow the Exchange to [Release No. 34–43876; File No. SR–NASD– (A) No Change. continue the Pilot Program without 01–07] (B) No Change. interruption while the Commission (C) No Change. determines whether to approve the Pilot Self-Regulatory Organizations; Notice (D) Minimum Price Variation for Program on a permanent basis. The of Filing and Immediate Effectiveness Decimal-based Quotations Commission finds that accelerating the of Proposed Rule Change by the The minimum quotation increment operative date of the rule change to National Association of Securities for securities authorized for decimal prevent interruption of the Pilot Dealers, Inc. to Establish Minimum pricing as part of the SEC-approved Program is consistent with the Quotation Increment for Securities Decimals Implementation Plan for the protection of investors and the public Quoting in Decimals Equities and Options Markets shall be $0.01. Quotations failing to meet this interest, and thus designates January 22, January 23, 2001 standard shall be rejected. 2001 as the operative date of this filing. Pursuant to Section 19(b)(1) of the (2) No Change. IV. Solicitation of Comments Securities Exchange Act of 1934 1 2 * * * * * Interested persons are invited to (‘‘Act’’), and Rule 19b–4 thereunder, submit written data, views, and notice is hereby given that on January II. Self-Regulatory Organization’s arguments concerning the foregoing, 22, 2001, the National Association of Statement of the Purpose of, and Securities Dealers, Inc. (‘‘NASD’’ or Statutory Basis for, the Proposed Rule 11 15 U.S.C. 78s(b)(3)(A) ‘‘Association’’), through its wholly Change 12 owned subsidiary, The Nasdaq Stock 17 CFR 240.19b–4(f)(6). For purposes only of In its filing with the Commission, accelerating the operative date of this proposal, the Market, Inc. (‘‘Nasdaq’’) filed with the Nasdaq included statements concerning Commission has considered the proposed rule’s Securities and Exchange Commission the purpose of and basis for its proposal impact on efficiency, competition, and capital (‘‘Commission’’ or ‘‘SEC’’) the proposed formation. 15 U.S.C. 78c(f). and discussed any comments it received rule change as described in Items I, II, 13 The Commission has determined to waive the regarding the proposal. The text of these requirement that CBOE provide the Commission and III below, which Items have been with written notice of its intent to file the proposed prepared by Nasdaq. Nasdaq filed the 3 15 U.S.C. 78s(b)(3)(A). rule change at least five business days prior to the proposal pursuant to Section 19(b)(3)(A) filing date. Telephone conversation between 4 17 CFR 240.19b–4(f)(6). Patricia Cerny, Office of Trading Practices, CBOE, 5 Nasdaq asked, and the Commission agreed, to and Sharon L. Lawson, Senior Special Counsel, 15 17 CFR 200.30–3(a)(12). waive the 5-day pre-filing notice requirement. See Division, SEC, on January 12, 2001. 1 15 U.S.C. 78s(b)(1). Rule 19b–4(f)(6)(iii). 17 CFR 240.19b–4(f)(6)(iii). 14 15 U.S.C. 78s(b)(3)(C). 2 17 CFR 240.19b–4. 6 17 CFR 240.19b–4(f)(6)(iii).
VerDate 11
statements may be examined at the C. Self-Regulatory Organization’s rule change that are filed with the places specified in Item IV below. Statement on Comments on the Commission, and all written Nasdaq has prepared summaries, set Proposed Rule Change Received From communications relating to the forth in Sections A, B and C below, of Members, Participants or Others proposed rule change between the the most significant aspects of such Written comments were neither Commission and any person, other than statements. solicited nor received. those that may be withheld from the public in accordance with the A. Self-Regulatory Organization’s III. Date of Effectiveness of the provisions of 5 U.S.C. 552, will be Statement of the Purpose of, and Proposed Rule Change and Timing for available for inspection and copying in Statutory Basis for, the Proposed Rule Commission Action the Commission’s Public Reference Change Because the foregoing proposed rule Room. Copies of such filing will also be 1. Purpose change does not: available for inspection and copying at the principal office of the NASD. All On July 25, 2000, the NASD, jointly (i) significantly affect the protection of submissions should refer to file number with self-regulatory organizations, investors or the public interest; (ii) impose any significant burden on SR–NASD–01–07 and should be submitted to the Commission the competition; and submitted by February 20, 2001. Implementation Plan. As part of the (iii) become operative for 30 days For the Commission, by the Division of Plan, the NASD committed to establish from the date on which it was filed, or a minimum quotation increment of Market Regulation, pursuant to delegated such shorter time as the Commission authority.11 $0.01 for Nasdaq securities trading in may designate, it has become effective decimals. That is, Nasdaq would display pursuant to Section 19(b)(3)(A) of the Margaret H. McFarland, and disseminate quotations in securities Act 8 and Rule 19b–4(f)(6) thereunder.9 Deputy Secretary. trading in decimal-based increments to At any time within 60 days of the filing [FR Doc. 01–2506 Filed 1–29–01; 8:45 am] two places beyond the decimal point (to of the proposed rule change, the BILLING CODE 8010–01–M the penny). This proposed rule change Commission may summarily abrogate establishes the $0.01 minimum quote such rule change if it appears to the increment for Nasdaq securities that Commission that such action is SECURITIES AND EXCHANGE transition from fractional to decimal necessary or appropriate in the public COMMISSION pricing. The filing also informs market interest, for the protection of investors, [Release No. 34–43866; File No. SR–Phlx– participants that decimal quotations or otherwise in furtherance of the 01–01] submitted to Nasdaq that do not purposes of the Act. comport with the penny minimum Nasdaq has requested that the Self-Regulatory Organizations; quotation increment standard will be Commission accelerate the operative Philadelphia Stock Exchange, Inc.; rejected by Nasdaq systems. Nasdaq date. The Commission finds good cause Order Granting Accelerated Approval intends to impose the $0.01 minimum to waive the 30-day operative waiting of Proposed Rule Change Relating to decimal quotation increment, pursuant period, because such designation is the Dissemination of Options to the Plan’s phase-in schedule, consistent with the protection of Quotations With Size beginning March 12, 2001, on every investors and the public interest. Nasdaq security that becomes Acceleration of the operative date will January 22, 2001. authorized for decimal trading pursuant allow Nasdaq to begin quoting securities I. Introduction to the Plan. in penny increments pursuant to the On January 8, 2001, the Philadelphia 2. Statutory Basis Implementation Plan, which is part of Stock Exchange, Inc. (‘‘Exchange’’ or the industry-wide conversion to decimal ‘‘Phlx’’) submitted to the Securities and Nasdaq believes that the proposal is pricing. For these reasons, the Exchange Commission (‘‘Commission’’), consistent with the provisions of Commission finds good cause to waive pursuant to section 19(b)(1) of the Section 15A(b)(6) of the Act 7 in that it both the 5-day pre-filing requirement Securities Exchange Act of 1934 is designed to prevent fraudulent and and the 30-day operative waiting (‘‘Act’’),1 and Rule 19b–4 thereunder,2 a manipulative acts and practices, to 10 period. proposed rule change seeking to amend promote just and equitable principles of Exchange Options Floor Procedure trade, to foster cooperation and IV. Solicitation of Comments Advice (‘‘OFPA’’) F–7, Bids and Offers, coordination with persons engaged in Interested persons are invited to to state that the size of any bid or offer regulating, clearing, settling, and submit written data, views, and in a quotation disseminated by the processing information with respect to, arguments concerning the foregoing, Exchange shall be equal to the AUTO– and facilitating transactions in including whether the proposal is X guarantee for the quoted option and securities, to remove impediments to consistent with the Act. Persons making shall be firm, except that the and perfect the mechanism of a free and written submissions should file six disseminated size of bids and offers of open market and a national market copies thereof with the Secretary, customer limit orders shall be ten system, and, in general, to protect Securities and Exchange Commission, contracts and shall be firm, regardless of investors and the public interest. 450 Fifth Street, NW., Washington, DC the actual size of such orders. Notice of 20549–0609. Copies of the submission, B. Self-Regulatory Organization’s the proposed rule change appeared in all subsequent amendments, all written Statement on Burden on Competition the Federal Register on January 18, statements with respect to the proposed 2001.3 Nasdaq does not believe that the The Commission received no comments on the proposal. This order proposed rule change will result in any 8 15 U.S.C. 78s(b)(3)(A). burden on competition that is not 9 17 CFR 240.19b–4(f)(6). 11 17 CFR 200.30–3(a)(12). necessary or appropriate in furtherance 10 For purposes only of accelerating the operative date of this proposal, the Commission has 1 15 U.S.C. 78s(b)(1). of the purposes of the Act. considered the proposed rule’s impact on 2 17 CFR 240.19b–4. efficiency, competition, and capital formation. 15 3 See Securities Exchange Act Release No. 43822 7 15 U.S.C. 78o–3(b)(6). U.S.C 78c(f). (January 8, 2001), 66 FR 4884.
VerDate 11
approves the proposed rule change on Until the Phlx has completed its investor confidence in transactions on an accelerated basis. application of the systems changes the Exchange by providing greater necessary to automatically update its II. Description of the Proposal certainty to investors by ensuring that quotation size on a continuous basis, the quotes made by market participants are The Exchange proposes to codify its Phlx believes that the instant proposal firm for a specified number of contracts initial program for the dissemination of represents a vast improvement over the for customer orders. options quotations with size. The current system, by increasing Exchange anticipates that, on or about transparency and providing the market The Commission believes that the January 22, 2001, the Options Price place with considerably more Exchange’s proposal to establish by rule Reporting Authority (‘‘OPRA’’) will information upon which to base order and periodically publish the size for begin to support the dissemination of routing decisions. their best bid and offer in each options options quotations that include the size, Finally, the Phlx expects to begin series that it listed on the Exchange is or the number of contracts, represented providing quotations with actual size on consistent with the amendments to the in disseminated bids and offers on the a floor-wide basis within one year. The Quote Rule provided that the Exchange Exchange. Exchange represents that it will establish firm quote requirements for Although, the Phlx anticipates that undertake to submit a further proposed orders received from broker-dealers OPRA will have the necessary systems rule change when the Exchange is able prior to April 1, 2001. The Commission capacity to accept and disseminate to disseminate actual size associated notes that the Exchange represents that quotations with size by late January with its options quotes and customer is will periodically publish on its web 2001, and that one or more options limit orders. site and through regulatory circulars to exchanges will be in a position to The Exchange represents that the Exchange members and member disseminate actual quotation size at the instant proposed rule change does not organizations the size for which its time, the Phlx will not have completed affect in any respect the Exchange’s members’ quotations must be firm. its application of the systems changes obligations concerning non-public Further, the Commission notes that the customer orders.7 Further, the Exchange necessary to permit it to disseminate Exchange intends to provide quotations represents that prior to the April 1, 2001 actual quotation size for a number of with actual size on a floor-wide basis months. mandatory compliance date of the within one year. Therefore, until the Exchange’s amended Quote Rule, the Exchange will systems disseminate actual quotation establish firm quote requirements with Finally, the Commission, pursuant to size on a quote-by-quote basis, the Phlx respect to orders received from broker- section 19(b)(2) of the Act,10 finds good proposes to establish by rule and dealers, as required by the amended cause for approving the proposed rule periodically publish,4 on its web site Quote Rule. change prior to the thirtieth day after and through regulatory circulars to the date of publication of notice thereof III. Discussion Exchange members and member in the Federal Register. The organizations, the quotation size for For the reasons discussed below, the Commission notes that the Exchange which its members’ quotations are firm Commission finds that the proposed anticipates the OPRA may begin to as required by Rule 11Ac1–1(d)(1)(i) rule change is consistent with the Act support the dissemination of quotes under the Act.5 and the rules and regulations under the with size as soon as January 22, 2001. Act applicable to a national securities In addition, the Exchange proposes to The Commission believes that granting exchange. In particular, the Commission voluntarily disseminate to OPRA the accelerated approval to this proposal believes the proposed rule change is applicable automatic execution size should allow investors to receive more consistent with the requirements of guarantee for each quoted option, except information as soon as that information that with respect to customer limit section 6(b)(5) of the Act 8 that the rules can be made available through the orders the Phlx would disseminate a of an exchange be designed to facilitate OPRA system. Accordingly, the size of 10 contracts, regardless of the transactions in securities, promote just Commission finds that there is good actual size of the customer order. In all and equitable principals of trade, cases, the Phlx would be firm for its remove impediments to and perfect the cause, consistent with section 19(b)(2) 11 disseminated quotation size (without mechanism of a free and open market of the Act, to approve the proposal on regard to whether the given order would and a national market system, and an accelerated basis. be eligible for automatic execution via protect investors and the public IV. Conclusion the Exchange’s automatic execution interest.9 The Commission believes that feature, AUTO–X).6 the proposal should help to increase It is Therefore Ordered, pursuant to transparency by providing more section 19(b)(2) of the Act,12 that the 4 On November 17, 2000, the Commission information to investors in a readily proposed rule change (SR–Phlx–01–01) amended Rule 11Ac1–1 (‘‘Quote Rule’’) under the accessible manner. In addition, the is approved on an accelerated basis. Act to require options exchanges and options proposal should help to increase market makers to publish firm quotes. The For the Commission, by the Division of compliance date for the amended Quote Rule is Market Regulation, pursuant to delegated April 1, 2001. See Securities Exchange Act Release are able to disseminate actual size prior to the 13 No. 43591 (November 17, 2000), 65 FR 75439 Exchange’s systems disseminating quotations with authority. (December 1, 2000). actual size on a floor-wide basis, the Phlx would Margaret H. McFarland, 5 Rule 11Ac1–1(d)(1)(i) under the Act, 17 CFR undertake to file a further proposed rule change 240.11Ac1–1(d)(1)(i). To accommodate the fact that with the Commission requesting approval to Deputy Secretary. disseminate actual size for those options classes the options markets did not yet disseminate quotes [FR Doc. 01–2504 Filed 1–29–01; 8:45 am] with size, the Commission provided an alternative assigned to such specialist firms. to the Quote Rule, as applied in the equity markets, 7 See Phlx Rule 1015(b) and Options Floor BILLING CODE 8010–01–M which allows options markets to establish by rule Procedure Advice A–11. 8 and periodically publish the size for which their 15 U.S.C. 78f(b)(5). 10 15 U.S.C. 78s(b)(2). quotations will be firm. 9 In approving this proposed rule change, the 11 15 U.S.C. 78s(b)(2). 6 In the event that certain Phlx specialist firms are Commission has considered the proposal’s impact able to develop and implement proprietary systems on efficiency, competition, and capital formation. 12 15 U.S.C. 78s(b)(2). (called ‘‘Specialized Quote Feeds’’ or ‘‘SQFs’’) that 15 U.S.C. 78c(f). 13 17 CFR 200.30–(a)(12).
VerDate 11
SMALL BUSINESS ADMINISTRATION U.S.C. app 2 § 10(a)(2) (1996), the DATES: Comments must be received on Secretary of State announces a meeting or before March 1, 2001. [Declaration of Disaster #3317] of the Arms Control and ADDRESSES: Send all comments on the State of Texas; Declaration of Disaster Nonproliferation Advisory Board proposed AC to: Federal Aviation (Amendment #1) (ACNAB) to take place February 1–2, Administration, Air Transportation 2001, at the Department of State, Division (Attention AFS–220), 800 In accordance with a notice received Washington, DC. Independence Avenue SW., from the Federal Emergency Pursuant to section 10 (d) of the Washington, DC 20591, or electronically Management Agency, dated January 15, Federal Advisory Committee Act, 5 to [email protected]. Comments 2001, the above-numbered Declaration U.S.C. app 2 § 10 (d) (1996), and in may be inspected at the above address is hereby amended to establish the accordance with Executive Order 12958, between 9 a.m. and 4 p.m. weekdays, incident period for this disaster as in the interest of national defense and except Federal holidays. beginning on December 12, 2000 and foreign policy, it has been determined FOR FURTHER INFORMATION CONTACT: Clay continuing through January 15, 2001. that this Board meeting will be closed Hewitt, AFS–200, at the address above, All other information remains the to the public, since the ACNAB by e-mail at [email protected], or same, i.e., the deadline for filing members will be reviewing and telephone at (202) 267–9209. applications for physical damage is discussing classified matters. SUPPLEMENTARY INFORMATION: March 9, 2001 and for economic injury The purpose of this Advisory Board is the deadline is October 9, 2001. to advise the President and the Comments Invited (Catalog of Federal Domestic Assistance Secretary of State on scientific, The proposed AC is available on the Program Nos. 59002 and 59008) technical, and policy matters affecting FAA Web site at http://www.faa.gov/ Dated: January 19, 2001. arms control. The Board will review avr/afs/acs/ac–idx.htm, under AC No. Herbert L. Mitchell, specific arms control and 120–XX. A copy of the proposed AC Associate Administrator for Disaster nonproliferation issues. Members will may be obtained by contacting the Assistance. be briefed on current U.S. policy and person named above under FOR FURTHER [FR Doc. 01–2510 Filed 1–29–01; 8:45 am] issues regarding negotiations such as the INFORMATION CONTACT. Interested Convention on Conventional Weapons BILLING CODE 8025–01–P persons are invited to comment on the and the Chemical and Biological proposed AC by submitting such written Weapons Convention. data, views, or arguments as they may SMALL BUSINESS ADMINISTRATION For more information concerning the desire. Please identify AC 120–XX, parts meetings, please contact Avis T. Bohlen, 121, 125, and 135 Flightcrew Washington, D.C. District Advisory Assistant Secretary, Bureau of Arms Procedures During Taxi Operations, and Council; Public Meeting Control, at (202) 647–9610. submit comments, either hard copy or The U.S. Small Business Dated: January 25, 2001. electronically, to the appropriate Administration Washington, D.C. Avis T. Bohlen, address listed above. District Advisory Council, located in the Assistant Secretary, Bureau of Arms Control, Issued in Washington, DC, on January 22, metropolitan area of Washington, DC, Department of State. 2001. will hold a public meeting from 9 a.m.— [FR Doc. 01–2653 Filed 1–26–01; 2:34 pm] L. Nicholas, Lacey. 11 a.m., Thursday, February 1, 2001, at BILLING CODE 4710–27–U Director, Flight Standards Service. Creative Associates, Inc., 5301 [FR Doc. 01–2558 Filed 1–29–01; 8:45 am] Wisconsin Avenue, NW., Suite 700, BILLING CODE 4910–13–M Washington, DC, to discuss such matters DEPARTMENT OF TRANSPORTATION as may be presented by members, staff of the U.S. Small Business Federal Aviation Administration DEPARTMENT OF TRANSPORTATION Administration, or others present. For further information, write or call [AC No. 120–XX] Federal Aviation Administration Anita L. Irving, Public Information [Summary Notice No. PE–2001–07] Officer, U.S. Small Business Proposed Advisory Circular on Parts Administration, 1110 Vermont Avenue, 121, 125, and 135 and Flightcrew Petitions for Exemption; Summary of NW., Suite 900, (P.O. Box 34500), Procedures During Taxi Operations Petitions Received; Dispositions of Washington, DC 20043–4500; telephone Petitions Issued 202–606–4000, ext. 275. AGENCY: Federal Aviation Administration (FAA). DOT. AGENCY: Federal Aviation Sandra Mont, ACTION: Notice of availability of Administration (FAA), DOT. Program Analyst. proposed Advisory Circular (AC) for ACTION: Notice of petitions for [FR Doc. 01–2582 Filed 1–29–01; 8:45 am] parts 121, 125, and 135 Flightcrew exemption received and of dispositions BILLING CODE 8025–01–P Procedures During Taxi Operations, and of prior petitions. request for comments. SUMMARY: Pursuant to FAA’s rulemaking DEPARTMENT OF STATE SUMMARY: This notice announces the provisions governing the application, availability of and requests comments processing, and disposition of petitions [Public Notice #3543] on a proposed AC that provides for exemption part 11 of Title 14, Code Secretary of State’s Arms Control and advisory material and recommends safe of Federal Regulations (14 CFR part 11), Nonproliferation Advisory Board; procedures, standards, and practices this notice contains a summary of Notice of Closed Meeting relating to taxi operation. This notice is certain petitions seeking relief from necessary to give all interested persons specified requirements of 14 CFR, In accordance with section 10(a)(2) of the opportunity to present their view on dispositions of certain petitions the Federal Advisory Committee Act, 5 the proposed AC. previously received, and corrections.
VerDate 11
The purpose of this notice is to improve Docket No.: 29849. from the revenues collected. The the public’s awareness of, and Petitioner: The Boeing Company. transaction is scheduled to be participation in, this aspect of FAA’s Section of the 14 CFR Affected: 14 consummated on or after January 31, regulatory activities. Neither publication CFR 21.325(b)(3). 2001.4 of this notice nor the inclusion or Description of Relief Sought/ If the verified notice contains false or omission of information in the summary Disposition: To permit Boeing to issue misleading information, the exemption is intended to affect the legal status of export airworthiness approvals for Class is void ab initio. Petitions to reopen the any petition or its final disposition. II and Class III products manufactured proceeding to revoke the exemption DATES: Comments on petitions received in Japan by Jamco Corporation as an under 49 U.S.C. 10502(d) may be filed must identify the petition docket approved supplier to Boeing under at any time. The filing of a petition to number involved and must be received Boeing’s PC No. 700. revoke will not automatically stay the Grant, 01/03/01, Exemption No. 7420 on or before February 20, 2001. transaction. An original and 10 copies of all ADDRESSES: Send comments on any Petition for Exemption pleadings, referring to STB Finance petitions in triplicate to: Federal Docket No.: 29725. Aviation Administration, Office of the Docket No. 33992, must be filed with Petitioner: Federal Express the Surface Transportation Board, Office Chief Counsel, Attn: Rule Docket (AGC– Corporation. 200), Petition Docket No.lll, 800 of the Secretary, Case Control Unit, 1925 Regulations Affected: K Street, NW., Washington, DC 20423– Independence Avenue, SW., § 121.417(c)(2)(i). Washington, DC 20591. 0001. In addition, a copy of each Description of Petition: To provide pleading must be served on Fenner The petition, any comments received, relief from the requirement for each and a copy of any final disposition are Stevenson, P.O. Box 603, Boone, IA flight crewmember to perform certain 50036. filed in the assigned regulatory docket emergency drills and operate certain and are available for examination in the Board decisions and notices are emergency equipment once every 24 available on our website at Rules Docket (AGC–200), Room 915G, months during recurrent training. FAA Headquarters Building (FOB 10A), ‘‘WWW.STB.DOT.GOV.’’ 800 Independence Avenue, SW., [FR Doc. 01–2557 Filed 1–29–01; 8:45 am] Decided: January 22, 2001. Washington, DC 20591; telephone (202) BILLING CODE 4910–13–M By the Board, David M. Konschnik, 267–3132. Director, Office of Proceedings. Vernon A. Williams, FOR FURTHER INFORMATION CONTACT: DEPARTMENT OF TRANSPORTATION Forest Rawls (202) 267–8033, or Secretary. Vanessa Wilkins (202) 267–8029 Office Surface Transportation Board [FR Doc. 01–2485 Filed 1–29–01; 8:45 am] of Rulemaking (ARM–1), Federal BILLING CODE 4915–00–P Aviation Administration, 800 [STB Finance Docket No. 33992] Independence Avenue, SW., Iowa Railroad Historical Society d/b/a Washington, DC 20591. Boone & Scenic Railroad—Acquisition DEPARTMENT OF THE TREASURY This notice is published pursuant to and Operation Exemption—Union §§ 11.85 and 11.91. Submission for OMB Review; Pacific Railroad Company Comment Request Issued in Washington, DC, on January 25, 2001. Iowa Railroad Historical Society 1 January 23, 2001. Donald P. Byrne, (IRHS) d/b/a Boone & Scenic Railroad (BSVY), a noncarrier, has filed a verified The Department of Treasury has Assistant Chief Counsel for Regulations. notice of exemption under 49 CFR submitted the following public Petitions for Exemption 1150.312 to acquire the right-of-way and information collection requirement(s) to OMB for review and clearance under the Docket No.: 29725. operating assets of the Union Pacific Railroad Company (UP) from milepost Paperwork Reduction Act of 1995, Petitioner: Federal Express Public Law 104–13. Copies of the Corporation. 42.57 to milepost 44.23, in Boone County, Iowa, a distance of submission(s) may be obtained by Section of the FAR Affected: 14 CFR calling the Treasury Bureau Clearance 121.417(c)(2)(i). approximately 1.66 route miles.3 According to the verified notice of Officer listed. Comments regarding this Description of Relief Sought: To information collection should be provide relief from the requirement for exemption, BSVY will operate the rail line as a ‘‘handling carrier,’’ with UP addressed to the OMB reviewer listed each flight crewmember to perform and to the Treasury Department certain emergency drills and operate performing all revenue accounting of its line hauls and paying BSVY a division Clearance Officer, Department of the certain emergency equipment once Treasury, Room 2110, 1425 New York every 24 months during recurrent 1 Avenue, NW., Washington, DC 20220. training. IRHS is an operating, nonprofit railroad museum. It currently operates over 11 miles of track DATES: Written comments should be Disposition of Petitions carrying approximately 45,000 passengers per year. received on or before March 1, 2001 to 2 The notice appears to invoke the class be assured of consideration. Docket No.: 27802. exemption from 49 U.S.C. 10901 at 49 CFR 1150.31. Petitioner: Richmor Aviation, Inc. While the notice cites 49 U.S.C. 10902 rather than Internal Revenue Service (IRS) Section of the 14 CFR Affected: 14 49 U.S.C. 10901, all references in the notice suggest CFR 21.197(c)(2). that the transaction is proposed for exemption from OMB Number: 1545–0742. the requirements of 49 U.S.C. 10901. Description of Relief Sought/ Regulation Project Number: EE–111– 3 The acquisition will take place by donation 80 (TD 8019) Final. Disposition: To permit Richmor to contract and a donative quitclaim deed. The right- receive a special flight permit with of-way being acquired by IRHS is the only Type of Review: Extension. continuing authorization to conduct remaining right-of-way from the old Fort Dodge, Des Moines and Southern Railway (FDDMS). 4 As part of this transaction, BSVY indicates that ferry flights on aircraft with nine or Consummation of this transaction will enable IRHS it is also requesting to assume the common carrier fewer passenger seats. to complete the acquisition of the remaining obligation on the track it now owns between Denial, 01/10/01, Exemption No. 7419 FDDMS line. milepost 41.0 and 42.57.
VerDate 11
Title: Public Inspection of Exempt Estimated Burden Hours Per Regulation Project Number: LR–213– Organization Returns. Respondent/Recordkeepers: 4 hours. 76. Description: Section 6104(b) Frequency of Response: On occasion. Abstract: Internal Revenue Code authorizes the Internal Revenue Service Estimated Total Reporting/ section 2518 allows a person to disclaim to make available to the public the Recordkeeping Burden: 904,000 hours. an interest in property received by gift returns required to be filed by exempt Clearance Officer: Garrick Shear. or inheritance. The interest is treated as organizations. The information Internal Revenue Service Room 5244, if the disclaimant never received or requested in Treasury Regulations 1111 Constitution Avenue, NW, transferred such interest for Federal gift § 301.6104(b)–1(b)(4) is necessary in Washington, DC 20224. tax purposes. A qualified disclaimer order for the Service not to disclose OMB Reviewer: Alexander T. Hunt, must be in writing and delivered to the confidential business information (202) 395–7860, Office of Management transferor or trustee. furnished by businesses which and Budget, Room 10202, New Current Actions: There is no change to contribute to exempt black lung trusts. Executive Office Building, Washington, this existing regulation. Respondents: Business or other for- DC 20503. Type of Review: Extension of a profit. currently approved collection. Estimated Number of Respondents: Mary A. Able, Affected Public: Individuals or 22. Departmental Reports, Management Officer. households. Estimated Burden Hours Per [FR Doc. 01–2498 Filed 1–29–01; 8:45 am] Estimated Number of Respondents: Respondent: 1 hour. BILLING CODE 4830–01–P 2,000. Frequency of Response: Annually. Estimated Time Per Respondent: 30 Estimated Total Reporting Burden: 22 minutes. hours. DEPARTMENT OF THE TREASURY Estimated Total Annual Burden Hours: 1,000. OMB Number: 1545–1566. Internal Revenue Service Notice Number: Notice 97–66. The following paragraph applies to all Type of Review: Extension. [LR–213–76] of the collections of information covered Title: Certain Payments Made by this notice: An agency may not conduct or Pursuant to a Securities Lending Proposed Collection; Comment sponsor, and a person is not required to Transaction. Request for Regulation Project Description: Notice 97–66 modifies respond to, a collection of information AGENCY: Internal Revenue Service (IRS), unless the collection of information final regulations which are effective Treasury. November 14, 1997. The Notice relaxes displays a valid OMB control number. ACTION: the statement requirement with respect Notice and request for Books or records relating to a collection to substitute interest payments relating comments. of information must be retained as long as their contents may become material to securities loans and repurchased SUMMARY: The Department of the transactions. It also provides a in the administration of any internal Treasury, as part of its continuing effort revenue law. Generally, tax returns and withholding mechanism to eliminate to reduce paperwork and respondent excessive withholding on multiple tax return information are confidential, burden, invites the general public and as required by 26 U.S.C. 6103. payments in a chain of substitute other Federal agencies to take this dividend payments. opportunity to comment on proposed Request for Comments Respondents: Business or other for- and/or continuing information Comments submitted in response to profit. collections, as required by the this notice will be summarized and/or Estimated Number of Respondents: Paperwork Reduction Act of 1995, included in the request for OMB 377,5000. Public Law 104–13 (44 U.S.C. approval. All comments will become a Estimated Burden Hours Per 3506(c)(2)(A)). Currently, the IRS is matter of public record. Comments are Respondent: 10 minutes. soliciting comments concerning an invited on: (a) Whether the collection of Frequency of Response: Other (once). existing final regulation, LR–213–76 (TD information is necessary for the proper Estimated Total Reporting Burden: 8095), Estate and Gift Taxes; Qualified performance of the functions of the 61,750 hours. Disclaimers of Property (Section agency, including whether the OMB Number: 1545–1588. 25.2518–2(b)). information shall have practical utility; Regulation Project Number: REG– DATES: Written comments should be (b) the accuracy of the agency’s estimate 209682–94 (Final). received on or before April 2, 2001 to of the burden of the collection of Type of Review: Extension. be assured of consideration. information; (c) ways to enhance the Title: Adjustments Following Sales of quality, utility, and clarity of the Partnership Interests. ADDRESSES: Direct all written comments to Garrick R. Shear, Internal Revenue information to be collected; (d) ways to Description: Partnerships, with a minimize the burden of the collection of section 754 election in effect, are Service, room 5244, 1111 Constitution Avenue NW., Washington, DC 20224. information on respondents, including required to adjust the basis of through the use of automated collection FOR FURTHER INFORMATION CONTACT: partnership property following certain techniques or other forms of information Requests for additional information or transfers of partnership interests. The technology; and (e) estimates of capital copies of the regulation should be proposed regulations require the or start-up costs and costs of operation, directed to Martha R. Brinson, (202) partnership to attach a statement to its maintenance, and purchase of services 622–3869, Internal Revenue Service, partnership return indicating the to provide information. adjustment and how it was allocated room 5244, 1111 Constitution Avenue among the partnership property. NW., Washington, DC 20224. Approved: January 19, 2001. Respondents: Business or other for- SUPPLEMENTARY INFORMATION: Garrick R. Shear, profit. Title: Estate and Gift Taxes; Qualified IRS Reports Clearance Officer. Estimated Number of Respondents/ Disclaimers of Property. [FR Doc. 01–2490 Filed 1–29–01; 8:45 am] Recordkeepers: 226,000. OMB Number: 1545–0959. BILLING CODE 4830–01–P
VerDate 11
DEPARTMENT OF THE TREASURY Estimated Time Per Respondent: 15 opportunity to comment on proposed minutes. and/or continuing information Internal Revenue Service Estimated Total Annual Burden collections, as required by the [LR–209–76] Hours: 8,650. Paperwork Reduction Act of 1995, The following paragraph applies to all Public Law 104–13 (44 U.S.C. Proposed Collection; Comment of the collections of information covered 3506(c)(2)(A)). Currently, the IRS is Request for Regulation Project by this notice: soliciting comments concerning Forms An agency may not conduct or 8038, Information Return for Tax- AGENCY: Internal Revenue Service (IRS), sponsor, and a person is not required to Exempt Private Activity Bond Issues, Treasury. respond to, a collection of information 8038–G, Information Return for Tax- ACTION: Notice and request for unless the collection of information Exempt Governmental Obligations, and comments. displays a valid OMB control number. 8038–GC, Information Return for Small Books or records relating to a collection Tax-Exempt Governmental Bond Issues, SUMMARY: The Department of the of information must be retained as long Leases, and Installment Sales. Treasury, as part of its continuing effort as their contents may become material to reduce paperwork and respondent DATES: Written comments should be in the administration of any internal burden, invites the general public and received on or before April 2, 2001 to revenue law. Generally, tax returns and other Federal agencies to take this be assured of consideration. tax return information are confidential, opportunity to comment on proposed ADDRESSES: Direct all written comments as required by 26 U.S.C. 6103. and/or continuing information to Garrick R. Shear, Internal Revenue collections, as required by the Request for Comments: Service, room 5244, 1111 Constitution Avenue NW., Washington, DC 20224. Paperwork Reduction Act of 1995, Comments submitted in response to FOR FURTHER INFORMATION CONTACT: Public Law 104–13 (44 U.S.C. this notice will be summarized and/or Requests for additional information or 3506(c)(2)(A)). Currently, the IRS is included in the request for OMB copies of the forms and instructions soliciting comments concerning an approval. All comments will become a should be directed to Martha R. Brinson, existing final regulation, LR–209–76 (TD matter of public record. Comments are (202) 622–3869, Internal Revenue 7941), Special Lien for Estate Taxes invited on: (a) Whether the collection of Deferred Under Section 6166 or 6166A Service, room 5244, 1111 Constitution information is necessary for the proper Avenue NW., Washington, DC 20224. (Section 301.6324A–1). performance of the functions of the SUPPLEMENTARY INFORMATION: DATES: Written comments should be agency, including whether the Title: Information Return for Tax- received on or before April 2, 2001 to information shall have practical utility; Exempt Private Activity Bond Issues be assured of consideration. (b) the accuracy of the agency’s estimate (Form 8038), Information Return for ADDRESSES: Direct all written comments of the burden of the collection of Tax-Exempt Governmental Obligations to Garrick R. Shear, Internal Revenue information; (c) ways to enhance the (Form 8038–G), and Information Return Service, room 5244, 1111 Constitution quality, utility, and clarity of the for Small Tax-Exempt Governmental Avenue NW., Washington, DC 20224. information to be collected; (d) ways to Bond Issues, Leases and Installment FOR FURTHER INFORMATION CONTACT: minimize the burden of the collection of Sales (Form 8038–GC). Requests for additional information or information on respondents, including OMB Number: 1545–0720. copies of the regulation should be through the use of automated collection Form Number: 8038, 8038–G, and directed to Martha R. Brinson, (202) techniques or other forms of information 8038–GC. 622–3869, Internal Revenue Service, technology; and (e) estimates of capital Abstract: Issuers of state or local room 5244, 1111 Constitution Avenue or start-up costs and costs of operation, bonds must comply with certain NW., Washington, DC 20224. maintenance, and purchase of services information reporting requirements SUPPLEMENTARY INFORMATION: to provide information. contained in Internal Revenue Code Title: Special Lien for Estate Taxes Approved: January 19, 2001. section 149 to qualify for tax exemption. Deferred Under Section 6166 or 6166A. Garrick R. Shear, The information must be reported by the OMB Number: 1545–0757. IRS Reports Clearance Officer. issuers about bonds issued by them Regulation Project Number: LR–209– during each preceding calendar quarter. 76. [FR Doc. 01–2491 Filed 1–29–01; 8:45 am] Forms 8038, 8038–G, and 8038–GC are Abstract: Internal Revenue Code BILLING CODE 4830–01–P used to provide the IRS with the section 6324A permits the executor of a information required by Code section decedent’s estate to elect a lien on DEPARTMENT OF THE TREASURY 149 and to monitor the requirements of section 6166 property in favor of the Code sections 141 through 150. United States in lieu of a bond or Internal Revenue Service Current Actions: There are no changes personal liability if an election under being made to the forms at this time. section 6166 was made and the executor Proposed Collection; Comment Type of Review: Extension of a files an agreement under section Request for Forms 8038, 8038–G, and currently approved collection. 6324A(c). This regulation clarifies the 8038–GC Affected Public: State, local or tribal procedures for complying with the governments and not-for-profit statutory requirements. AGENCY: Internal Revenue Service (IRS), institutions. Current Actions: There is no change to Treasury. Estimated Number of Respondents: this existing regulation. ACTION: Notice and request for 14,500. Type of Review: Extension of a comments. Estimated Time Per Respondent: 17 currently approved collection. hr., 39 min. Affected Public: Individuals or SUMMARY: The Department of the Estimated Total Annual Burden households, and business or other for- Treasury, as part of its continuing effort Hours: 255,871. profit organizations. to reduce paperwork and respondent The following paragraph applies to all Estimated Number of Respondents: burden, invites the general public and of the collections of information covered 34,600. other Federal agencies to take this by this notice:
VerDate 11
An agency may not conduct or Publication 1345, Handbook for of the burden of the collection of sponsor, and a person is not required to Authorized IRS e-file Providers. information; (c) ways to enhance the respond to, a collection of information DATES: Written comments should be quality, utility, and clarity of the unless the collection of information received on or before April 2, 2001 to information to be collected; (d) ways to displays a valid OMB control number. be assured of consideration. minimize the burden of the collection of Books or records relating to a collection ADDRESSES: Direct all written comments information on respondents, including of information must be retained as long to Garrick R. Shear, Internal Revenue through the use of automated collection as their contents may become material Service, room 5244, 1111 Constitution techniques or other forms of information in the administration of any internal Avenue NW., Washington, DC 20224. technology; and (e) estimates of capital revenue law. Generally, tax returns and or start-up costs and costs of operation, FOR FURTHER INFORMATION CONTACT: tax return information are confidential, maintenance, and purchase of services Requests for additional information or as required by 26 U.S.C. 6103. to provide information. copies of the publication should be Request for Comments directed to Carol Savage, (202) 622– Approved: January 23, 2001. 3945, Internal Revenue Service, room Garrick R. Shear, Comments submitted in response to 5242, 1111 Constitution Avenue NW., IRS Reports Clearance Officer. this notice will be summarized and/or Washington, DC 20224. [FR Doc. 01–2493 Filed 1–29–01; 8:45 am] included in the request for OMB approval. All comments will become a SUPPLEMENTARY INFORMATION: BILLING CODE 4830–01–P matter of public record. Comments are Title: Publication 1345, Handbook for Authorized IRS e-file Providers. invited on: (a) Whether the collection of DEPARTMENT OF THE TREASURY information is necessary for the proper OMB Number: 1545–1708. Publication Number: 1345. performance of the functions of the Abstract: Publication 1345 informs Office of Thrift Supervision agency, including whether the those who participate in the IRS e-file information shall have practical utility; Submission for OMB Review; Program for Individual Income Tax (b) the accuracy of the agency’s estimate Comment Request Returns of their obligations to the of the burden of the collection of Internal Revenue Service, taxpayers, information; (c) ways to enhance the January 23, 2001. and other participants. quality, utility, and clarity of the The Office of Thrift Supervision Current Actions: There are no changes information to be collected; (d) ways to (OTS) has submitted the following being made to the publication at this minimize the burden of the collection of public information collection time. information on respondents, including requirement(s) to OMB for review and Type of Review: Extension of a clearance under the Paperwork through the use of automated collection currently approved collection. techniques or other forms of information Reduction Act of 1995, Public Law 104– Affected Public: Business or other for- 13. Interested persons may obtain copies technology; and (e) estimates of capital profit organizations. or start-up costs and costs of operation, of the submission(s) by calling the OTS Estimated Number of Respondents: Clearance Officer listed. Send comments maintenance, and purchase of services 90,000. to provide information. regarding this information collection to Estimated Time Per Respondent: 32 the OMB reviewer listed and to the OTS Approved: January 22, 2001. hours, 30 minutes. Clearance Officer, Office of Thrift Garrick R. Shear, Estimated Total Annual Burden Supervision, 1700 G Street, NW., IRS Reports Clearance Officer. Hours: 2,924,627. Washington, DC 20552. The following paragraph applies to all [FR Doc. 01–2492 Filed 1–29–01; 8:45 am] DATES: Submit written comments on or of the collections of information covered BILLING CODE 4830–01–P before March 1, 2001. by this notice: OMB Number: 1550–0075. An agency may not conduct or Form Number: Not applicable. DEPARTMENT OF THE TREASURY sponsor, and a person is not required to Type of Review: Regular. respond to, a collection of information Title: Loans to Executive Officers, Internal Revenue Service unless the collection of information Directors and Principal Shareholders of displays a valid OMB control number. Savings Associations. Proposed Collection; Comment Books or records relating to a collection Description: The regulation requires Request for Publication 1345 of information must be retained as long savings association to maintain detailed as their contents may become material records of their extensions of credit to AGENCY: Internal Revenue Service (IRS), in the administration of any internal executive officers, directors, and Treasury. revenue law. Generally, tax returns and principal shareholders. The regulation ACTION: Notice and request for tax return information are confidential, also requires that savings associations comments. as required by 26 U.S.C. 6103. report to the OTS all loans to executives Request for Comments and disclose the amount of its SUMMARY: The Department of the extensions of credit following a written Treasury, as part of its continuing effort Comments submitted in response to request from the public. Indebtedness to to reduce paperwork and respondent this notice will be summarized and/or correspondent banks must also be burden, invites the general public and included in the request for OMB disclosed to the board of directors and other Federal agencies to take this approval. All comments will become a made available for OTS review during opportunity to comment on proposed matter of public record. Comments are examinations. and/or continuing information invited on: (a) Whether the collection of Respondents: Savings and Loan collections, as required by the information is necessary for the proper Associations and Savings Banks. Paperwork Reduction Act of 1995, performance of the functions of the Estimated Number of Responses: Public Law 104–13 (44 U.S.C. agency, including whether the 1,084. 3506(c)(2)(A)). Currently, the IRS is information shall have practical utility; Estimated Burden Hours Per soliciting comments concerning (b) the accuracy of the agency’s estimate Response: 11 hours.
VerDate 11
Frequency of Response: Quarterly. Supervision, 1700 G Street, NW., Budget, Room 10202, New Executive Estimated Total Reporting Burden: Washington, DC 20552. Office Building, Washington, DC 20503. 11,924 hours. OMB Reviewer: Alexander Hunt, (202) John E. Werner, Clearance Officer: Ralph E. Maxwell, 395–7860, Office of Management and Director, Information & Management (202) 906–7740, Office of Thrift Services. [FR Doc. 01–2507 Filed 1–29–01; 8:45 am] BILLING CODE 6720–01–P
VerDate 11
Part II
Federal Housing Finance Board 12 CFR Part 915, et al. Capital Requirements for Federal Home Loan Banks; Final Rule
VerDate 11
FEDERAL HOUSING FINANCE BOARD The Banks then pass along that funding requirements that are similar to those advantage to their members—and applicable to depository institutions and 12 CFR Parts 915, 917, 925, 930, 931, ultimately to consumers—by providing to the other housing GSEs. The GLB Act 932, 933, 956, 966 advances (secured loans) and other mandated that the Finance Board issue [No. 2000–46] financial services to their members regulations prescribing uniform capital (principally, depository institutions) at standards applicable to each Bank in RIN 3069–AB01 rates that the members generally could accordance with the provisions of the not obtain elsewhere. GLB Act. When the Finance Board’s Capital Requirements for Federal The Banks also are cooperatives, regulations are implemented, each Bank Home Loan Banks meaning that only their members may will be required to maintain permanent own the capital stock and share in the AGENCY: Federal Housing Finance capital and total capital in amounts that profits of the Banks and only their Board. are sufficient for the Bank to comply members, and certain eligible associates with the minimum risk-based and ACTION: Final rule. (such as state housing finance agencies), leverage capital requirements, may borrow from or use the other SUMMARY: The Federal Housing Finance respectively, established by the GLB Board (Finance Board) is amending its products and services provided by the Act. regulations to implement a new capital Banks. 12 U.S.C. 1426, 1430(a), 1430b, The GLB Act requires each Bank to structure for the Federal Home Loan as amended. An institution that is maintain ‘‘permanent capital’’ in an amount that is sufficient to meet the Banks (Banks), as required by the eligible may become a member of a Bank if it satisfies certain statutory credit risk and market risk to which the Gramm-Leach-Bliley Act. The final rule criteria and purchases a specified Bank is subject, with the market risk establishes risk-based and leverage amount of the Bank’s capital stock. 12 being based on a stress test established capital requirements for the Banks. It U.S.C. 1424, 1426 (1994). Together with by the Finance Board that tests for also addresses the different classes of the Office of Finance, the twelve Banks changes in certain specified market stock that a Bank may issue, the rights comprise the Bank System, which variables. Permanent capital is defined and preferences that may be associated operates under the supervision of the by statute to include the amounts paid- with each class of stock, and the capital Finance Board, an independent agency in for Class B stock plus the retained plans that each Bank must submit for in the executive branch of the U.S. earnings of the Bank, with retained Finance Board approval. government. The primary duty of the earnings being determined in EFFECTIVE DATE: The final rule is Finance Board is to ensure that the accordance with generally accepted effective on March 1, 2001. Banks operate in a financially safe and accounting principles (GAAP). FOR FURTHER INFORMATION CONTACT: sound manner; consistent with that duty The GLB Act also requires each Bank James L. Bothwell, Managing Director the Finance Board is required to to maintain ‘‘total capital’’ in amounts and Chief Economist, (202) 408–2821; supervise the Banks, ensure that they that are sufficient to comply with a Scott L. Smith, Acting Director, (202) carry out their housing finance mission, minimum leverage requirement. Total 408–2991; Ellen Hancock, Senior and ensure that they remain adequately capital is defined by the GLB Act to Financial Analyst, (202) 408–2906; or capitalized and able to raise funds in the include a Bank’s permanent capital, Julie Paller, Senior Financial Analyst, capital markets. 12 U.S.C. plus the amounts paid-in by the (202) 408–2842, Office of Policy, 1422a(a)(3)(A), (B) (1994). members for Class A stock, any general Research and Analysis; or Deborah F. loss allowance (if consistent with GAAP B. Federal Home Loan Bank Capital and not established for specific assets), Silberman, General Counsel, (202) 408– Structure 2570; Neil R. Crowley, Deputy General and other amounts from sources Counsel, (202) 408–2990; Sharon B. Since its enactment in 1932, section 6 determined by the Finance Board as Like, Senior Attorney-Advisor, (202) of the Bank Act has provided for a available to absorb losses. When 408–2930; or Thomas E. Joseph, ‘‘subscription’’ capital structure for the measured by weighting the amount Attorney-Advisor, (202) 408–2512, Banks. Under that structure, the amount paid-in for Class B stock and the Office of General Counsel, Federal of capital stock that each Bank issued retained earnings by a factor of 1.5, each Housing Finance Board, 1777 F Street, was determined by a statutory formula Bank must maintain a ratio of total N.W., Washington, D.C. 20006. that dictated how much Bank stock each capital to total assets of at least 5 member must purchase. In accordance percent. When measured on an SUPPLEMENTARY INFORMATION: with that formula, each member was unweighted basis, each Bank must I. Statutory and Regulatory Background required to purchase Bank stock in an maintain a ratio of total capital to total amount equal to one percent of the assets of at least 4 percent. A. The Bank System member’s total mortgage assets or five The GLB Act further requires the The twelve Banks are percent of the advances outstanding to capital regulations issued by the instrumentalities of the United States the member, whichever was greater. A Finance Board to address a number of organized under the authority of the principal shortcoming of the other matters, such as the classes of Federal Home Loan Bank Act (Bank subscription capital structure was that stock that a Bank may issue, the rights, Act). 12 U.S.C. 1423, 1432(a), as the amount of capital maintained by terms, and preferences that may be amended. The Banks are ‘‘government each Bank bore little relation to the risks established for each class, the issuance, sponsored enterprises’’ (GSE), i.e., inherent in the assets and liabilities of transfer, and redemption of Bank stock, federally chartered but privately owned the Bank. and the liquidation of claims against a institutions created by Congress to With the enactment of the Gramm- withdrawing member. The rules must support the financing of housing and Leach-Bliley Act, Pub. Law No. 106– permit each Bank to issue either Class community lending by their members. 102, 133 Stat. 1338 (Nov. 12, 1999) (GLB A or Class B stock, or both, with the See 12 U.S.C. 1422a(a)(3)(B)(ii), 1430(i), Act), the Congress amended section 6 board of directors of each Bank to (j)(10) (1994). By virtue of their GSE the Bank Act in its entirety, replacing determine the rights, terms, and status, the Banks are able to borrow in the subscription capital provisions with preferences for each class. Both Class A the capital markets at favorable rates. risk-based and leverage capital and Class B stock may be issued only to
VerDate 11
and held only by members of the Bank, characteristics of the stock, and another member or to an institution in and the regulations are to provide the addressed the manner in which the the process of becoming a member. The manner in which the stock may be sold, stock could be issued, transferred, and Bank Act required that all stock issued transferred, redeemed, or repurchased. redeemed. 12 U.S.C. 1426 (1994). Since by a Bank share in dividends equally The rules also must address the manner the establishment of the Bank System in and without preference. The Bank Act in which a Bank is to liquidate any 1932, each of the Banks has been also allowed any member, other than a claims against its members. authorized to issue a single class of federal savings and loan association, to The GLB Act separately establishes a stock, which could be issued and withdraw from membership by number of other capital-related redeemed only at its statutory par value providing six months written notice to requirements, which pertain to matters of $100 per share. An institution the Finance Board. At the end of the six- such as the termination of an becoming a Bank member was required month notice period, and provided that institution’s Bank membership, the to subscribe for a certain minimum all indebtedness owed by the ability of a Bank to repurchase excess amount of the Bank’s stock, for which withdrawing member to the Bank had stock held by a member (i.e., stock that it was required to pay in full and in cash been liquidated, a Bank could redeem is in excess of the minimum stock at the time of its application.1 the stock of the withdrawing member, investment that each member is The amount of the initial stock paying cash to the member equal to the required to hold), restrictions on the subscription required for membership par value of the stock. Any such ability of a Bank to redeem stock when was the greater of $500, 1.0 percent of withdrawing member could not rejoin its capital is impaired, restrictions on the member’s mortgage assets, or 0.3 the Bank system for 10 years, with only readmission to membership after percent of the member’s total assets.2 12 limited exceptions. withdrawing, and the ownership of the U.S.C. 1426(b), 1430(e) (1994). If a D. Overview of the Proposed Rule retained earnings by the Class B member were to borrow from its Bank, stockholders. the amount of Bank stock it was On July 13, 2000, the Finance Board Within 270 days after the publication required to own could not be less than published a Notice of Proposed of this final capital rule, the GLB Act 5.0 percent of the amount of Bank Rulemaking to amend its regulations to requires the board of directors of each advances outstanding to the member. implement the capital requirements of Bank to submit for Finance Board Each Bank was required to adjust the the GLB Act. The proposed rule initially approval a capital plan that the board minimum stock investment required of included a 90-day comment period, which would have closed on October determines is best suited for the Bank each member, as of December 31st of 11, 2000. See 65 FR 43408–43447 (July and its members. Subsequent each year, so that each member would 13, 2000). On September 19, 2000, the amendments to an approved capital own at least the required minimum Finance Board extended the comment plan also must be approved in advance amount of Bank stock, based on a by the Finance Board. The GLB Act period until November 20, 2000. See 65 percentage of either its assets or requires the plan to include certain FR 57748 (September 26, 2000). advances, whichever amount was provisions, requires that it be consistent The proposed rule contemplated a higher. Each Bank had the discretion to with the regulations adopted by the significantly different capital structure retire any ‘‘excess’’ stock held by a Finance Board, and that when than that adopted in this final rule, member, i.e., stock in excess of the implemented it must provide the Bank which was due in large part to certain minimum required for that member, with sufficient capital to meet both the assumptions about how difficult it upon the application of the member. leverage and risk-based capital would be for the Banks to sell their new Once issued, the stock of a Bank could requirements. Each plan also must stock, particularly the Class B stock. For be transferred only between the member include certain provisions specified by instance, it was initially envisioned that the GLB Act. Those provisions relate to and the Bank or, with the approval of Class B stockholders would demand the the minimum investment required of the Finance Board, from one member to ability to control the boards of directors each member in order for the Bank to of the Banks if they were to commit 1 A member also was allowed to purchase the meet its regulatory capital requirements, stock in installments, under which it would pay their capital for five years. In order to the effective date of the plan and the one-quarter of the full amount at the time of protect the interests of the Class A length of any transition period, the application, and the remainder in three installments stockholders from possible classes of stock to be offered by the over the following 12 months. 12 U.S.C. 1426(c) manipulation by the Class B (1994). stockholders, the proposed rule would Bank and the rights, terms, and 2 The Bank Act referred to a member’s ‘‘aggregate preferences associated with each class, unpaid loan principal,’’ which the Finance Board have required the Class A stock to pay the transferability of the Bank stock, the has defined to include a variety of mortgage assets, a stated dividend that would have disposition of Bank stock held by such as home mortgage loans, combination loans, priority over the Class B dividends. The and mortgage pass-through securities. 12 U.S.C. Finance Board also provided for institutions that withdraw from 1426(b)(1) (1994); 65 FR 8253 (Feb. 18, 2000), 12 membership, and review of the plan by CFR 925.1. For purposes of applying the 1.0 percent maximum flexibility in the capital plans an independent accountant and a credit of mortgage assets test, the Bank Act also to allow for the Class B stock to have as ratings agency. Those provisions are the established a statutory presumption that each many pure equity attributes as a Bank member had at least 30 percent of its assets in might wish to adopt. During the notice minimum required by the GLB Act; the mortgage related instruments. 12 U.S.C. 1430(e)(3) Finance Board may require that other (1994). The effect of the presumption was that and comment period, the Finance provisions be included in each plan, commercial banks (which typically have a lower Board’s initial assumptions were and the Banks as well may include other percentage of their assets in mortgage related challenged, and the concerns became instruments than do savings associations) were less of an issue for the Banks and their provisions in their plans, provided they required to maintain a minimum investment equal are consistent with the Bank Act and the to the greater of 1.0 percent of mortgage assets, 0.3 members, and, therefore, less of a regulations of the Finance Board. percent of total assets, or 5.0 percent of outstanding concern for the Finance Board. advances. Separately, a member that was not a Many provisions of the proposed rule C. Federal Home Loan Bank Stock ‘‘qualified thrift lender’’ (QTL), i.e., an institution paralleled the requirements of the GLB with less than 65 percent of its assets in certain Section 6 of the Bank Act, as in effect mortgage related instruments, was subject to a Act, such as authorizing each Bank to prior to the GLB Act, authorized the higher ‘‘percentage of advances’’ requirement, issue either or both Class A or Class B Banks to issue stock, specified the which varied inversely with its QTL ratio. stock. The proposed rule also
VerDate 11
authorized each Bank to issue directors) by the capital provisions of operations risk charge be less than ten subclasses of either Class A or Class B the GLB Act. percent of the Bank’s credit and market stock. The proposed rule would have The proposed rule would have risk charges. The proposed rule also established certain characteristics for permitted a member to transfer Bank required the Banks to calculate their the Class A stock, such as a stated stock to another member, with such capital levels and total risk-based dividend, a priority for payment of transfers being at a price to be agreed to capital charge as of the last business day dividends, and a priority in liquidation. by the members. It also would have of each month and report this The Class A stock would be issued and barred any transfers of stock that would information to the Finance Board by the redeemed at par value, but the Class B result in any member (including its fifteenth of the next month. stock could be issued at par or at any affiliates) having more than 40 percent The proposed rule would have other price. By statute, both classes of of any class of the Bank’s outstanding required a Bank to maintain sufficient stock may be redeemed only at par stock, though it would have permitted a liquidity to cover its needs for five days value, but the proposed rule would have Bank to establish a lower percentage. In of inability to access the consolidated a similar fashion, the proposed rule obligation debt markets. Separately, the required the Banks to repurchase Class would have allowed a Bank to proposed rule set forth limits on a B stock at a negotiated price. The repurchase its outstanding stock at any Bank’s extension of unsecured credit, proposed rule required that a Bank issue time, but at a negotiated price. both to a single counterparty and to stock only to its members and that the The proposed rule adopted the affiliated counterparties, and initial issuance of the Class A and/or minimum total capital leverage established monthly reporting Class B stock be done through any fair requirement specified by the GLB Act. requirements based upon a Bank’s and equitable method of distribution. It also specified that a Bank must hold extension of unsecured credit and The Banks would have been permitted an amount of permanent capital at least combined secured and unsecured credit to require each member to invest in the equal to the sum of the Bank’s credit, to a single counterparty and to affiliated Class A stock of the Bank as a condition market, and operations risk charges, counterparties. It also proposed of becoming a member of the Bank, calculated as specified in the proposal. incorporating into the rule, though a member would have the option The Finance Board also proposed to requirements from the Finance Board’s of investing a lesser amount in the Class reserve the right to require a Bank to Financial Management Policy (FMP) B stock. The Banks also would have hold amounts of total and permanent concerning a Bank’s use of hedging been permitted to require a member to capital above the minimum specified instruments and proposed providing invest in the Class A or Class B stock as levels, if such higher levels were specific authority for the Banks to a condition to doing business with the warranted for reasons of safety or engage in certain off-balance sheet Bank. The proposed rule also would soundness. transactions. have required each Bank to specify The proposed rule set forth the E. Overview of Comments Received ‘‘operating capital ratios,’’ which would methods to be used for calculating be somewhat greater than the Bank’s credit risk charges for all on-balance The Finance Board received 143 minimum leverage and risk-based sheet assets and off-balance sheet items comments on the proposed rule. Ten of capital ratios. The proposed rule would held by a Bank and established risk those comments were submitted before have prohibited a Bank from requiring weightings for these assets and items the proposed rule was published. Of the additional stock purchases by members based upon broad categories. In 133 comments received after if doing so would cause the Bank to addition, for rated assets and off-balance publication of the proposed rule, 25 exceed either its operating total capital sheet items and for mortgage assets, risk comments came from the 12 Banks; 1 ratio or its operating risk-based capital weightings were further differentiated comment was received from a not-for- ratio, though it would have permitted a by ratings and remaining maturity. The profit housing association; 73 comments Bank to establish a membership fee in proposed rule also set forth broad were received from member institutions; lieu of the minimum stock investment. standards that a Bank must meet in 25 comments came from banking and Separately, the proposed rule would developing its internal risk model or other trade associations; 6 comments have prohibited any member (including cash-flow model to be used to calculate were received from other parties its affiliates) from owning more than 40 the Bank’s market risk capital charge. associated with the mortgage industry; 2 percent of any class of Bank stock, or a The rule also required a Bank to receive comments came from members of lower limit established by the Bank. Finance Board approval before the Congress, and 1 comment was model could be used, and to undertake submitted by the Department of the Under the proposed rule, each Bank an annual validation of its model. The Treasury. would have been authorized to proposed rule also would have required To the extent that the comments determine the manner in which the a further capital charge equal to the raised questions about particular aspects members of the Bank were to elect amount by which the market value of of the proposed rule, those comments directors and how the elected the Bank’s capital, calculated using the and the Finance Board’s response to directorships were to be allocated, i.e., internal risk model, fell below 95 them are discussed below as part of the among the several states in each district percent of the book value of the Bank’s explanation of the relevant provisions of or otherwise. The voting rights also total capital, calculated using GAAP. the final rule. were to be determined by each Bank, The proposed rule also established an In general, many commenters subject to a regulatory cap that would operations risk charge equal to 30 recommended that the Finance Board have barred any member (including its percent of a Bank’s credit and market preserve the cooperative ownership affiliates) from casting more than 20 risk, but allowed a Bank to reduce this structure of the Bank System by percent of the votes in any election of charge with Finance Board approval by eliminating provisions of the proposed directors. Those provisions of the providing an alternative method for rule that were perceived to threaten the proposed rule were premised on an calculating its operations risk or by cooperative nature of the Bank System. implicit repeal of section 7 of the Bank obtaining insurance to cover it for such In particular, a number of commenters Act (which relates to the designation of risk. The proposed rule, however, believed that provisions in the proposed directorships and the election of required that at no time could the rule permitting the payment of
VerDate 11
membership fees in lieu of a minimum conservative. With respect to market Finance Board.3 12 U.S.C. 1427(a). stock investment, trading of Bank stock risk, many commenters indicated that Section 7(b) of the Bank Act requires the among the members, the repurchase of the value-at-risk model is inappropriate Finance Board to designate each elected Bank stock at a negotiated price, and for measuring the long-term market risk directorship as representing the barring the Banks from requiring their profile of a Bank. Many commenters members located in a particular state members to retain Bank stock that was also opposed applying a 95 percent of within the Bank district, and section purchased to support a particular market value to book value test because 7(c) directs the Finance Board to make transaction with the Bank would they believe it fails to provide a Bank those designations based on the undermine the cooperative structure of with sufficient flexibility to manage its approximate ratio of the number of the Bank System because such entire portfolio of activities. Finally, shares of Bank stock ‘‘required to be provisions would tend to separate with respect to operations risk, many held’’ by the members located in each ownership of the Bank System from the commenters stated that a capital charge of the respective states as of the end of use of its services. of 30 percent of the sum of credit and each calendar year. 12 U.S.C. 1427(b), Many commenters also recommended market risk was too high, and that there (c). Section 7(c) includes two that the Finance Board pay close was no sound theoretical basis for exceptions, one of which requires that attention to the possible tax linking operations risk to credit and each state be allocated at least one implications of provisions in the rule, market risk. directorship (but not more than six) and principally as they relate to the The Finance Board has made the other of which requires each state to members of the Banks. For example, significant revisions in the final rule in be allocated no fewer directorships than commenters expressed concern that by response to the comments received, were allocated to it in 1960. 12 U.S.C. establishing a stated dividend for the particularly with respect to matters of 1427(c). Section 7(b) separately provides Class A stock and giving it a priority capital structure. The Finance Board that in an election to fill a directorship over payment of dividends on the Class also has retained much of the substance each member may cast one vote for each B stock, the proposed rule might create of the proposed rule with respect to the share of Bank stock that it was ‘‘required a taxable event for certain members risk-based capital provisions. The to hold’’ as of the end of the prior upon the conversion of some of their changes from the proposed rule, as well calendar year, subject to a statutory cap. existing stock to Class A stock. 12 U.S.C. 1427(b). Under that cap, the as the provisions that have been Commenters expressed other concerns maximum number of votes that any retained, are described in more detail about the capital structure provisions of member may cast in such an election is below in the discussion of specific the proposed rule. Nearly all equal to the average number of shares of provisions of the final rule. commenters that addressed the issue of stock ‘‘required to be held’’ by all the operating capital ratios II. The Final Rule members located in the same state as of recommended that they be eliminated, the end of the prior calendar year. principally because the manner in A. Part 915—Designation and Election The GLB Act did not expressly amend which the operating ratios would have of Directors section 7 as it relates to the designation worked would have resulted in Certain provisions of part 931 of the of directorships or the election of members being treated unequally with proposed rule would have authorized directors. Section 931.3(b) of the regard to their stock purchase each Bank to determine the allocation of proposed rule, however, would have requirements, depending on when they the elected directorships among the deemed those provisions of section 7 to purchased their stock. Many states in the Bank’s district, and to cease to apply after the new capital commenters asked, if the final determine how the members would structure for the Banks had been regulation were to retain the operating elect those directors. For the reasons established. In the SUPPLEMENTARY ratio concept, that such limits should be stated below, the Finance Board has INFORMATION section of the proposed more appropriately set as a range, rather deleted those provisions from the final rule, the Finance Board explained that than a fixed number. With respect to rule and, apart from the matter of it had preliminarily determined to deem provisions related to the designation of allowing a Bank to establish voting those provisions of section 7 to have directorships and the election of preferences, part 931 no longer been repealed by implication by the directors, many commenters believed addresses these issues. Instead, the final GLB Act amendments to section 6 of the that the GLB Act did not repeal by rule includes a number of revisions to Bank Act regarding the capital structure implication any provisions of section 7 part 915 of the Finance Board’s of the Bank System. During its initial of the Bank Act, as the Finance Board elections regulations that conform those consideration of the proposed rule, the had proposed. With respect to the regulations to the new capital structure Finance Board had been advised that provision that would have barred any required by the GLB Act. Those the members of the Bank System would member or its affiliates from owning amendments are described below. be unlikely to purchase Class B stock more than 40 percent of the stock of any unless they received some assurance of Bank, nearly all commenters that Section 7 of the Bank Act addresses, being able to elect a majority of the addressed the issue recommended among other things, the manner in directors to the board of each Bank. eliminating that provision, arguing that which the members of each Bank elect Because the ability to sell the Class B any concern about control of a Bank the directors of the Bank and the stock is an essential aspect of the new could be better addressed by limits on manner in which the Finance Board capital structure established by the GLB the amount of stock that a member may allocates elected directorships among Act, the Finance Board had serious vote. the states in each Bank district. 12 concerns that retention of the state- Many commenters addressed the risk- U.S.C. 1427. Section 7(a) of the Bank based directorship structure would based capital provisions in the proposed Act establishes the basic size and rule. With respect to credit risk, many composition of the boards of directors 3 As a practical matter, the boards of directors at commenters argued that the capital for the Banks, providing that each board most of the Banks have more than 14 directorships, charges assigned in the proposed rule to shall consist of fourteen directors, with which is due in part to the operation of a statutory eight directors elected by the members grandfather provision, and in part to the creation of advances, as well as to mortgage assets discretionary directorships by the Finance Board in rated BBB or lower, were too and six directors appointed by the certain Bank districts.
VerDate 11
discourage the members from B stock both as a condition of The first of the conforming purchasing the Class B stock, thereby membership and as a condition of amendments to part 915 relates to the frustrating the intent of the Congress to transacting business with and obtaining manner in which the Finance Board establish a risk-based permanent capital services from the Bank. Under any of designates elected directorships among structure for the Banks. Accordingly, the those approaches, the Finance Board’s the states of each Bank district. Section Finance Board preliminarily determined prior concern about the Banks being 7 of the Bank Act requires the Finance that the possibility that the state-based unable to sell Class B stock would Board to designate elected directorships directorship structure would preclude become moot. Accordingly, the final based on the amount of Bank stock that the sale of sufficient amounts of Class B rule does not deem any provisions of section 6 of the Bank Act requires the stock to capitalize the Banks created an section 7 of the Bank Act to have been members in each state to hold as of the irreconcilable conflict between section 6 implicitly repealed by the GLB Act. end of the prior calendar year. Under and section 7 of the Bank Act. The Because § 931.3 of the proposed rule, the present single-class capital Finance Board deemed that conflict to which would have authorized the structure, the determination of the be sufficient to support an implied boards of directors of each Bank to number of shares required to be held is repeal of those provisions of section 7. establish as part of the capital plan the relatively straightforward. Because the In place of the directorship structure manner in which the members would GLB Act authorizes the Banks to issue established by section 7, the Finance elect directors, was premised on an two classes of stock, the final rule adds Board proposed to allow each Bank to implied repeal of certain provisions of a new provision to § 915.3(b) to clarify specify the manner in which the section 7, that section has been deleted that, for any Bank that has two classes members would elect members to the from the final rule. of stock outstanding, the Finance Board board of directors, to require each Bank As stated in the proposed rule, the shall conduct the designation of to assign voting rights to the Class B Finance Board is mindful of its directorships based on the combined stock and allow the Banks to assign obligation to give effect to the laws as shares of each class of stock that the voting rights to the Class A stock, and written by the Congress unless two members are required to hold as of the to limit the number of votes that any provisions are in such irreconcilable end of the year. member and its affiliates could cast in conflict that the Finance Board cannot Because the GLB Act repealed the an election to 20 percent of the votes as a practical matter give simultaneous statutory stock purchase requirements eligible to be cast in the election. effect to both provisions. Based on the and replaced them with a provision requiring the capital plan for each Bank The Finance Board received information currently available, the numerous comments criticizing its to specify the minimum stock Finance Board no longer perceives any proposal to deem certain provisions of investment required of each member, such conflict between the capital section 7 to have been implicitly the Finance Board is further amending provisions of section 6 and the repealed by the capital provisions of the § 915.3(b) to address how the annual directorship provisions of section 7. It GLB Act. Many of those comments designation of directorships will be remains possible, however, as the Banks questioned the factual premise conducted both before and after the develop their capital plans and offer the underlying the implicit repeal, i.e., that implementation of the capital plan. If a Class A and/or Class B stock to their the members would not purchase Class Bank’s capital plan was not in effect on members, that such a conflict may arise. B stock unless they had some assurance the immediately preceding December If, while attempting to develop or to of being allowed to elect a majority of 31st, the number of shares of Bank stock the board of directors for the Bank, and implement their capital plans, the Banks required to be held by the members in contended that the Finance Board could provide demonstrable evidence that each state will be determined pursuant find alternative ways to reconcile the they have been unable to sell the Class to § 925.20 and § 925.22, which reflect provisions of section 6 and section 7. A B stock (or have been unable to sell the stock purchase requirements number of comments also noted that sufficient quantities of Class B stock) specified by section 6 of the Bank Act, unless the Finance Board could identify and that their inability to sell the Class as in effect immediately prior to the a more demonstrable conflict between B stock has been caused by the retention GLB Act. If a Bank’s capital plan was in section 6 and section 7, a determination of the state-based directorship effect on the immediately preceding that provisions of the latter had been provisions in section 7, the Finance December 31st, the number of shares of implicitly repealed by the former would Board would be prepared to revisit the Bank stock required to be held by the be unlikely to withstand a legal issue of an implied repeal. Absent such members in each state will be challenge. evidence, the directorship structure of determined in accordance with the Since the Finance Board issued the the Banks will not be changed in the minimum investment established by the proposed rule, the staff of the Finance final rule. capital plan for that Bank. For any Board has had numerous discussions Because the statutory provisions members whose investment in Bank with representatives of the Banks, as regarding the designation of stock is less than the minimum well as with members and other directorships and the election of investment required by the capital plan interested parties, about this and other directors are linked to the capital (i.e., during a transition period), the aspects of the proposed rule, and has provisions in section 6 of the Bank Act, amount of stock to be used in the received prototype capital plans from however, the GLB Act amendments to designation of directorships shall be the several of the Banks. As a result of those section 6 do require the Finance Board number of shares of Bank stock actually comments and those discussions, the to amend its directorship and elections owned by those members as of Finance Board has been persuaded that regulations in certain respects. December 31st. the retention of the state-based Accordingly, the final rule includes a Because the annual designation of directorship structure would not be number of conforming amendments to directorships is keyed to the amount of likely to discourage members from those regulations, including a provision stock required to be held as of the prior purchasing Class B stock. Indeed, a that addresses the authority of the board calendar year, the earliest possible date number of the Banks have indicated of directors of a Bank to establish voting that the Finance Board could designate their intention to issue only Class B preferences, all of which are described directorships under the new capital stock or to require the purchase of Class below. plans would be in 2002. With regard to
VerDate 11
the designation of directorships that the shall report to the Finance Board the rule gives effect to the provisions of Finance Board must conduct in 2001, combined number of shares of stock section 7(b) of the Bank Act by retaining those determinations must be based on required to be held by the members, i.e., the existing regulations regarding the the amount of Bank stock required to be the report will not distinguish between election of directors, albeit with a held as of December 31, 2000, which the required amounts of Class A and number of revisions to conform them to means that the current capital structure Class B stock. The final rule also the new two-class capital stock structure will determine how those directorships provides that if a Bank’s capital plan established by the GLB Act. A number will be allocated. was not in effect as of the record date, of commenters criticized the Finance Under current law, the amount of the number of shares of Bank stock that Board for proposing to determine that Bank stock ‘‘required to be held’’ by a the members are required to hold shall certain provisions of section 7 of the member as of the end of the calendar be determined in accordance with the Bank Act had been implicitly repealed, year is the greater of $500, one percent existing stock purchase requirements, as but nonetheless argued that the matters of the member’s mortgage assets, or five stated in § 925.20 and § 925.22. For any of how the directorships should be percent of the member’s outstanding record date occurring after the capital allocated among the states and how the advances. As discussed above, once a plan is in effect, the number of shares members should elect directors were Bank’s capital plan has taken effect, the of required Bank stock will be the best left for the individual Banks to amount of Bank stock required to be minimum investment established for determine. Because section 7 of the held will be equal to the minimum each member by the capital plan, Bank Act addresses both of those issues, investment in Bank stock for each provided that, for any member whose the Finance Board cannot allow the member established in the Bank’s Bank stock is less than the minimum Banks to allocate the directorships or to capital plan. As discussed elsewhere in investment during a transition period, determine the manner of electing this SUPPLEMENTARY INFORMATION the amount of Bank stock to be reported directors without deeming section 7 to section, § 931.3 of the final rule requires shall be the number of shares of Bank have been implicitly repealed, which a Bank to require each member to stock actually owned by the member as the Finance Board has determined not maintain a minimum investment in the of the record date. Thus, if a Bank’s to do. capital stock of the Bank, both as a capital plan were in effect as of As described previously, section 7(b) condition to becoming and remaining a December 31st of a given year, the of the Bank Act provides that each member of the Bank and as a condition capital stock report to be submitted member shall be entitled to cast one to transacting business with or obtaining before April 10th of the following year vote for each share of Bank stock it was advances and other services from the would be based on the amounts of Bank required to hold as of the end of the Bank. In all cases, both before and after stock required to be held by the prior year, subject to the statutory cap, the effective date of a Bank’s capital members as the ‘‘minimum investment’’ i.e., the average number of shares of plan, the Finance Board would use the established by the capital plan. If a Bank stock required to be held by the information provided to it by the Banks Bank’s plan had not taken effect as of members in each state as of the end of in the annual capital stock report, as December 31st of a given year, then the the year. The final rule amends required by § 915.4, as the basis for capital stock report to be submitted the § 915.5(b) to restate those general calculating the relative amounts of stock following April would be based on the provisions of section 7(b), i.e., for each held by the members in the respective amount of stock required to be held directorship that is to be filled in an election, each member that is located in states. The final rule also includes one pursuant to § 925.20 and § 925.22. None technical correction to § 915.3(b)(3), the state to be represented by the of these amendments would affect the which replaces the words ‘‘the Bank’’ directorship and that is eligible to vote authority of a Bank to establish voting with ‘‘that State’’. in the election may cast one vote for preferences in favor of either the Class Another conforming amendment each share of Bank stock that it was A or the Class B stockholders, which it relates to the annual reports submitted required to own as of the end of the could do as part of its capital plan and by the Banks regarding the stock prior calendar year, subject to the which is addressed below. holdings of their members. Under statutory cap. current law, § 915.4 requires each Bank Because the proposed rule would For any Bank that has issued only one to submit, by no later than April 10th have deemed certain provision of class of stock, the statutory voting cap of each year, a capital stock report that section 7 to have been repealed by will be calculated in the same manner shows the amount of Bank stock implication, the proposed rule would as it is calculated at present, which is required to be held by the members in have authorized each Bank to determine a simple average of the number of shares each state as of the end of the prior the manner in which the members of Bank stock held by the members in calendar year. 12 CFR 915.4. The would elect the directors for each Bank. each state as of the record date. For any Finance Board uses that information to The proposed rule also would have Bank that has issued more than one conduct the designation of directorships capped the number of votes that any class of stock, however, the final rule for the states in each Bank district. member or its affiliates could cast in an provides that the statutory cap will be Because the amount of stock that each election at 20 percent of the number of applied separately for each class of member must hold ultimately will be eligible votes, though it would have stock. Thus, a Bank that has issued two determined by the capital plan allowed a Bank to establish a lower cap. classes of stock must determine, for approved for each Bank, rather than in As noted previously, the Finance Board each state, the average amount of Class accordance with the current statutory has determined that there is no need at A stock required to be held by the formula, the final rule amends § 915.4 to present to deem any provisions of members in that state as of the end of address how the Banks are to determine section 7 to have been repealed by the prior year, as well as the average the amount of Bank stock that each implication. For that reason, the amount of Class B stock required to be member is required to hold, both before Finance Board is not adopting the held by the members in that state as of and after the effective date of a Bank’s proposed amendments that would have the end of that year. As noted capital plan. The final rule amends allowed each Bank to determine the previously, once the capital plan is in § 915.4(a) to provide that if a Bank has manner in which the members elect the effect, the amount of stock that each issued more than one class of stock, it directors of the Bank. Instead, the final member is required to hold as of the end
VerDate 11
of the year will be the ‘‘minimum of directors. 12 U.S.C. 1427(b). Even between two or more classes of investment’’ that each member is though the Finance Board has stockholders, the Finance Board required to maintain in order to remain determined not to deem any provisions believes that the authority to establish a member and to do business with the of section 7(b) to have been repealed by voting preferences should not extend to Bank. Thus, a member that has implication by the GLB Act, the issue matters beyond that distribution of purchased both Class A and Class B remains of how best to reconcile these voting power. In other words, a Bank stock would be entitled to cast one vote two provisions. Based on the statutory can invoke the authority of section for each share of Class A stock it is language concerning voting preferences, 6(c)(4)(B), 12 U.S.C. 1426(c)(4)(B), to required to own, up to the average the Finance Board has determined that establish a preference structure that holdings of the Class A stock, plus one the most appropriate way to strike a favors the Class B stock, but it should vote for each share of Class B stock, up balance between and reconcile these not be able to rely on that authority to to the average holdings of the Class B two provisions is to consider the ‘‘one override other provisions of section 7(b), stock by the members in that state, with share, one vote’’ provisions of section 12 U.S.C. 1427(b), such as the statutory the combined total being the number of 7(b) as the general rule for voting, cap on voting, which, as noted above, votes that the member is entitled to cast subject to the statutory cap, but to will be applied separately to each class in the election. The Finance Board recognize that the provisions of section of Bank stock. For that reason, the final considered, as an alternative to the 6(c)(4)(B) of the Bank Act, as amended, rule makes clear that, even if a Bank separate caps for each class, using an authorize the individual Banks to create invokes its authority to establish voting average of the combined amounts of an exception to the general rule by preferences that vest the exclusive or Class A and Class B stock that the establishing a voting preference. predominant voting power in one class members in a particular state were The language of section 6(c)(4)(B), as of stock, the holders of that class of required to own as of the end of the amended by the GLB Act, provides that stock will remain subject to the year. Because it is possible that even in each Bank ‘‘shall include in its capital statutory cap. Accordingly, § 915.5(c) of a two-class stock structure there may be structure plan provisions establishing the final rule provides that, members that own only one class of terms, rights, and preferences, including notwithstanding the general rule for Bank stock, the Finance Board believes * * * voting * * * preferences for each voting in an election of directors, a Bank that the most equitable way of class of stock issued by the bank, may include as part of its capital plan calculating the statutory voting cap is to consistent with Finance Board voting preferences for any class of stock do so separately for each class of stock regulations and market requirements.’’ issued by the Bank, and that such outstanding. 12 U.S.C. 1426(c)(4)(B). That language preferences shall supercede the general As with the other conforming clearly authorizes the board of each provisions that otherwise would confer amendments, noted above, regarding the Bank to establish voting preferences as one vote for each share of Bank stock, designation of directorships and the part of its capital plan, but it does not subject to the statutory cap. The final capital stock report, the final rule mandate that a Bank must do so with rule includes a corresponding provides that if a Bank’s capital plan regard to the election of directors. Under amendment to § 933.2, which addresses was not in effect as of the record date, the statute, the question of whether to the contents of the capital plans. the number of shares of Bank stock that establish voting preferences is left to the Separately, the final rule includes two a member is required to hold as of the board of directors of the Bank, subject other amendments of a technical nature. record date shall be determined in to the regulatory oversight of the The first amendment, to § 915.6(a)(3), accordance with § 925.20 and § 925.22. Finance Board. Because the creation of makes a conforming change to a citation If a Bank’s capital plan was in effect as a voting preference is not mandatory, to another regulation within the text of of the record date, the number of shares there is no immediate conflict between the rule. The second technical of Bank stock that a member is required section 6(c)(4)(B) and section 7(b). amendment adds a sentence to to hold as of the record date shall be Indeed, if a Bank declines to establish § 915.7(b)(2) regarding the terms determined in accordance with the a voting preference for one class of stock ‘‘appropriate federal regulator’’ and minimum investment established by the over the other there will be no conflict ‘‘appropriate State regulator’’ that was Bank’s capital plan, provided, however, at all. In that case, each share of Bank inadvertently deleted from the that for any members whose Bank stock stock will entitle the holder to cast one regulation as part of an earlier is less than the minimum investment vote in the election of directors, subject rulemaking. during a transition period, the amount to the statutory cap, as implemented by B. Part 917—Powers and of Bank stock to be counted shall be the the final rule. If, however, a Bank were Responsibilities of Board of Directors number of shares of Bank stock actually to exercise the authority conferred by owned by those members as of the section 6(c)(4)(B) to confer a preference, The Finance Board is amending record date. for example, on the holders of the Class § 917.3 to require the Banks to include As was discussed in the proposed B stock as part of its capital plan, then as part of their risk management policies rule, what appeared to be most in the voting rights for the Class A and the total and risk-based capital ratios at conflict between the directorship Class B members would be governed by which the Banks intend to operate. The provisions of section 7 and the capital the preference established by that Bank. final rule also amends § 917.9 to provisions of section 6 was the voting In effect, the voting preferences conform the existing provisions, which rights of the members. Specifically, established by the Bank as part of its require dividends to be paid without section 6(c)(4)(B) of the Bank Act, as approved capital plan on the authority preference, to the requirements of the amended by the GLB Act, expressly of section 6(c)(4)(B) would supercede GLB Act and Part 931 of the final rule. authorizes the board of directors of a the provisions of section 7(b), which As described elsewhere in this Bank to establish voting preferences for otherwise would grant each member one SUPPLEMENTARY INFORMATION section, the its capital stock. 12 U.S.C. 1426(c)(4)(b). vote for each share of stock that it was Finance Board has responded to Section 7(b) of the Bank Act, however, required to own as of the record date. criticisms about the proposed operating provides (subject to the statutory cap) Because the concept of a voting capital ratios by deleting them from the that each share of Bank stock entitles preference relates principally to the final capital rule. Although the Finance the holder to cast one vote in an election relative distribution of voting power Board agrees that the final capital rule
VerDate 11
should not impose operating capital requirement, the Finance Board Bank System to fail to meet its required ratios, the Finance Board believes that anticipates that it will remove those payment toward the debt service for the the concept of operating capital ratios is provisions from its regulations only obligations issued by the Resolution useful as a risk management tool for the after the capital plans for all of the Funding Corporation (RefCorp), in Banks, as well as a supervisory tool for Banks have been implemented. As each accordance with section 21B(f)(2)(C) of the Finance Board. For that reason, the Bank implements its capital plan, the the Bank Act, 12 U.S.C. 1441b(f)(2)(C), final rule amends § 917.3 to require each amount of stock that each member of as amended. (RefCorp Certification). 12 Bank to include, as part of its risk that Bank would be required to U.S.C. 1426(d)(1), as amended. The management policy, a provision that purchase shall be the minimum statute further provides that the receipt establishes the total and risk-based investment established by that Bank’s of the withdrawal notice by the Bank capital levels at which the Bank intends capital plan. commences the applicable stock to operate. In addition, the Finance Consolidations Involving Members. redemption periods for the stock owned Board has considered comments Section 925.19 of the proposed rule by the member, i.e., the 6-month and 5- suggesting that such operating ratios are would have consolidated existing year notice periods for Class A and better expressed as a range, rather than §§ 925.24 and 925.25 into one provision Class B stock, respectively, after which as a fixed number, and believes that this addressing the consolidation of a the member may receive the par value approach would provide additional member into another member or into a of its stock in cash. During the notice flexibility to the Banks in managing nonmember. In the final rule, the period, the member remains entitled to their capital levels. Accordingly, the Finance Board has consolidated the receive any dividends declared on its amendments to § 917.3 allow the Banks substance of §§ 925.24 and 925.25 into stock. Section 925.20 of the proposed to set their own operating total capital an amended version of § 925.24. The rule would have implemented these and operating risk-based capital ratios substance of § 925.24 of the final rule is statutory provisions. Section 925.26 of as a range. much the same as proposed § 925.19; the final rule retains these provisions, Separately, the Finance Board is because the final rule does not rescind generally as proposed, but with several amending § 917.9, which currently the several provisions that the proposed changes that are discussed below. requires that dividends on Bank capital rule would have rescinded, the Section 925.26(a)(1) of the final rule stock be computed without preference, numbering of the amended provisions provides that any member may to conform it to the GLB Act and to in the final rule does not correspond to voluntarily withdraw from membership other provisions in the final rule. The the numbering of the proposed by providing to the Bank written notice GLB Act authorizes the board of amendments. As amended, § 925.24 of its intent to do so. In response to directors of each Bank to determine the retains much of the structure of the comments, the Finance Board has rights, terms, and preferences for each proposed rule, albeit with some revised the final rule to make clear that class of stock, consistent with section 6 technical, clarifying, and organizational a Bank need not commit to providing of the Bank Act, the regulations of the changes. any further services to a withdrawing Finance Board, and market Section 925.24(b)(5) of the final rule member that would mature or otherwise requirements. Because § 931.4 of the addresses the consolidation of a member terminate subsequent to the effective final rule permits the board of directors into a nonmember and differs somewhat date of the withdrawal. Thus, a Bank of a Bank to establish in the Bank’s from the proposed rule with regard to could limit the maximum maturity of capital plan different dividend rates or the minimum amount of Bank stock that any new advances to a withdrawing preferences for each class or subclass of the consolidated institution must member to the amount of time stock, it is necessary to make a purchase if it is approved for remaining until the date of withdrawal. corresponding change to § 917.9, so that membership. Thus, if the capital plan Section 925.26(a)(1) also provides that a the current requirement that dividends for the Bank has not taken effect when member may cancel its notice of be computed without preference not the consolidated institution has been withdrawal at any time prior to its apply if a Bank has established any approved for membership, the amount effective date by providing a written dividend preferences for one or more of Bank stock that such institution must cancellation notice to the Bank, and classes or subclasses of its capital stock. own shall be as provided in § 925.20 further allows a Bank to impose a fee on For any such Bank, once the capital and § 925.22, which are the stock any member that cancels its notice of plan takes effect, the requirement that purchase requirements in effect prior to withdrawal. Any such fee, or the dividends be computed without the enactment of the GLB Act. See 12 manner of its calculation, must be preference will cease to apply to that CFR 925.20, 925.22. If the capital plan specified in the capital plan. This Bank. for the Bank is in effect when the provision of the final rule is in consolidated institution has been substance as it was proposed. C. Part 925—Membership Amendments approved for membership, the amount Section 925.26(a)(2) of the final rule Minimum Stock Purchase of stock that such institution is required requires the Banks to notify the Finance Requirements. The proposed rule would to own shall be equal to the minimum Board within 10 calendar days of have removed from the existing investment established by the capital receiving any notices of withdrawal or membership regulation all provisions plan for that Bank. These provisions notices canceling a notice of pertaining to the amount of Bank stock reflect the more general transition withdrawal. Although notification to the an institution must purchase upon provisions in § 931.9 of the final rule. Finance Board no longer is mandated by becoming a member. See 12 CFR 925.19 Voluntary Withdrawal. Section 6(d)(1) statute as a condition to withdrawal, through 925.23 (Subpart D); of the Bank Act, as amended by the GLB retaining the requirement will allow the 925.25(d)(2)(ii), (iii). In the final rule, Act, provides that any member may Finance Board to maintain an accurate the Finance Board has retained all of withdraw from its Bank by providing membership database (which provides those provisions because the GLB Act written notice of its intent to do so, the official count of Bank System requires the existing stock purchase provided that on the date of the members), and to maintain historical requirements to remain in effect for each withdrawal there is in effect a records regarding Bank System Bank until the Bank has implemented certification from the Finance Board membership, withdrawals, and its capital plan. Because of that that the withdrawal will not cause the cancellations of notices of withdrawal.
VerDate 11
Being advised of member withdrawals other consolidation into a nonmember requirement of the Bank Act, any also allows the Finance Board to or into a member of another Bank, the Finance Board regulation, or any anticipate changes in Bank System applicable stock redemption periods for requirement of the Bank’s capital plan, membership. any stock that is not subject to a or becomes insolvent or otherwise Because the Bank Act, as amended by pending notice of redemption shall be subject to the appointment of a the GLB Act, does not expressly link the deemed to commence on the date on conservator, receiver, or other legal withdrawal of membership to the which the charter of the former member custodian under federal or state law. redemption of stock, the proposed rule is cancelled. The final rule makes no Section 925.27(a)(3) of the final rule also would have allowed a member to substantive changes to this provision. adds as an additional ground for specify the date on which its As was proposed and as discussed termination any circumstances under membership would terminate, which above, § 925.26(d) of the final rule which the retention of Bank date could be no later than the end of implements the Bank Act, as amended membership would jeopardize the safety its last stock redemption period. The by the GLB Act, by providing that no or soundness of the Bank, which is proposed rule provided further that if institution may withdraw from consistent with existing § 925.27(b)(4). the notice did not indicate a withdrawal membership unless, on the date that the See 12 CFR 925.27(b)(4). As was date, withdrawal would be deemed to membership is to terminate, there is in proposed, § 925.27(b) of the final rule take effect on the date that the last effect a RefCorp Certification. This provides that the applicable 6-month applicable stock redemption period provision is not substantively changed and 5-year stock redemption periods, ends. from the proposed rule. The GLB Act respectively, for all Class A and Class B Commenters criticizing this provision amended the Bank Act to require each stock that is not already subject to a expressed concerns about whether a Bank to pay 20 percent of its net pending request for redemption, shall termination in membership prior to the earnings each year toward the RefCorp commence on the date that the Bank end of the redemption periods would debt service. 12 U.S.C. 1441b(f)(2)(C), as terminates the institution’s membership. result in a nonmember owning Bank amended. The GLB Act further required In response to a Bank commenter’s stock, which arguably would conflict that before a member can withdraw suggestion, § 925.27(c) of the final rule with the provisions of the GLB Act that from Bank membership, the Finance adds language clarifying that an restrict ownership of Bank stock to Board must have in effect a certification institution whose membership is members. Although the Finance Board that the withdrawal of the member will terminated involuntarily shall cease believes that the appropriate time for not cause the Bank System to fail to being a member as of the date on which determining whether Bank stock is make its required payments toward the the board of directors of the Bank acts lawfully held by a ‘‘member’’ of the RefCorp debt service. The Finance to terminate its membership. As was Bank is the date on which the member Board has previously addressed this proposed, this section provides that the acquires the Bank stock, the Finance matter by certifying that the withdrawal institution shall have no right to obtain Board is revising the final rule to make of any member will not cause the Bank any of the benefits of membership after the date of termination coincide with System to fail to meet its RefCorp that date. In response to one comment, the expiration of the longest stock payments. Finance Board Resolution the final rule clarifies that the redemption period, unless the No. 2000–32 (June 23, 2000). The institution shall be entitled to receive institution cancels its notice of certification remains in effect until any dividends declared on its stock withdrawal prior to that date. That rescinded or superseded by the Finance until the stock is redeemed by the Bank. approach is consistent with current Board. Accordingly, there is no need to practice at the Banks. In part, the revisit the issue as part of this final rule, Prior to the GLB Act, section 6(e) of proposed rule was premised on the view and Bank members may withdraw from the Bank Act provided the Finance that under the new capital regime a membership without having to request Board with the authority to terminate member that wanted to terminate its individual certifications from the the membership of an institution that membership prior to the end of the Finance Board. became insolvent. 12 U.S.C. 1426(e)(ii) stock redemption periods could simply Involuntary Termination. Section (1994). Pursuant to that authority, the sell the Bank stock to another member, 6(d)(2) of the Bank Act, as amended by Finance Board adopted § 925.28(a), at a price to be negotiated by the two the GLB Act, provides the grounds on which provides that the membership of members. Because the final rule does which a Bank may terminate the an institution placed in receivership not permit the members to establish a membership of an institution, such as in (which in all likelihood would be trading market for Bank stock, the the case of violating the Bank Act or insolvent) automatically terminates. 12 provisions of the proposed rule that Finance Board regulations, or CFR 925.28(a). As discussed above, the would have ‘‘de-linked’’ the termination insolvency. Section 6(d)(2) also GLB Act amended the Bank Act by of membership from the ownership of provides that the applicable notice vesting in the Banks, rather than the stock are no longer appropriate, and period for each class of redeemable Finance Board, the authority to thus have been deleted. stock shall commence on the earlier of: determine whether to terminate As was proposed, § 925.26(c) of the (i) The date of such termination; or (ii) involuntarily the membership of an final rule provides that the receipt by a the date on which the member provided institution that is insolvent or placed Bank of a notice of withdrawal shall notice of its intent to redeem the stock. into receivership. 12 U.S.C. commence the applicable 6-month and Section 925.21 of the proposed rule 1426(d)(2)(A)(ii), as amended. One Bank 5-year stock redemption periods, implemented the above statutory suggested that the final rule retain the respectively, for all of the Class A and provisions. Section 925.27 of the final automatic termination provision in Class B stock held by that member that rule retains these provisions as existing § 925.28 because that procedure is not already subject to a pending proposed, with several changes has worked well and the proposed request for redemption. Also as discussed below. As was proposed, change would impose operational proposed, § 925.26(c) provides that in § 925.27(a) of the final rule provides that burdens on the Banks and receivers and the case of an institution the the board of directors of a Bank may conservators. The Finance Board has not membership of which has been terminate the membership of any implemented that recommendation in terminated as a result of a merger or institution that fails to comply with any the final rule, because the GLB Act vests
VerDate 11
the authority for making such decisions such indebtedness and business been adopted to the final capital in the board of directors of each Bank, transactions have been extinguished or regulations. The Finance Board has also rather than in the Finance Board. Thus, settled. removed the definition of the term if a member is placed into receivership Readmission to Membership. Section ‘‘NRSRO’’ because the term is defined in or conservatorship or otherwise is 6(g)(1) of the Bank Act, as amended by § 900.1 of the Finance Board determined to be insolvent, the board of the GLB Act, provides that an regulations, which provides definitions directors of each Bank must determine institution that divests all shares of applicable to all parts of the Finance whether it is most appropriate to allow Bank stock may not, after such Board regulations. 12 CFR 900.1 (as that institution to remain a member of divestiture, acquire Bank stock before amended by 65 FR 43969, 43981 (July the Bank for some period of time or to the end of the 5-year period beginning 17, 2000).4 Some changes also have terminate its membership under these on the date of the completion of such been made in the final rule to clarify the provisions. The final rule also removes divestiture, unless the divestiture is a meanings of terms, including ‘‘market existing § 925.28(b) and (c) regarding the consequence of a transfer of value at risk,’’ ‘‘capital plan,’’ and treatment of outstanding advances and membership on an uninterrupted basis ‘‘permanent capital.’’ The Finance Bank stock, and dividends on Bank between Banks. 12 U.S.C. 1426(g)(1), as Board also has added to § 930.1 of the stock, of a member placed into amended. Section 6(g)(2) of the Bank final rule, definitions for some receivership, which are addressed Act, as amended by the GLB Act, additional terms. The term ‘‘minimum generally in § 925.29 and § 931.4, provides for an exception that allows investment’’ is defined as the minimum respectively, of the final rule. any institution that withdrew from amount of Class A and/or Class B stock Disposition of Claims. The GLB Act membership in a Bank before December that a member is required to own to be did not amend section 10(c) of the Bank 31, 1997 to acquire Bank stock at any a member of a Bank and to obtain Act, which provides that a Bank shall time after that date, subject to the advances or engage in other activities have a lien upon and shall hold the approval of the Finance Board and the with the Bank, consistent with § 931.3 stock of a member as further collateral requirements of the Bank Act. Id. of the final rule. The term ‘‘excess security for all indebtedness of the 1426(g)(2), as amended. stock’’ is defined as any amount of stock member to the Bank. 12 U.S.C. 1430(c) Section 925.23 of the proposed rule held by a member in excess of the (1994). The GLB Act did amend section implemented these statutory provisions. minimum investment. The terms 6(d)(3) of the Bank Act, which provides Section 925.30 of the final rule retains ‘‘redeem or redemption’’ are defined to that upon the termination of these provisions as proposed, with some mean the acquisition of Class A or Class membership for any reason, the clarifying language, described below. B stock by a Bank at par value following outstanding indebtedness of the member Section 925.30(a) of the final rule the expiration of the six-month or five- to the Bank shall be liquidated in an provides that an institution that has year statutory redemption period, orderly manner, as determined by the withdrawn from membership or respectively, for the stock. The final rule Bank, and upon the extinguishment of otherwise has had its membership defines the term ‘‘repurchase’’ to mean all such indebtedness the Bank shall terminated, and which has divested all the acquisition by a Bank of excess stock return to the member all collateral of its shares of Bank stock, may not be prior to the expiration of the applicable pledged to secure the indebtedness. Id. readmitted to membership in any Bank, statutory redemption period. § 1426(d)(3), as amended. Section or acquire any capital stock of any Bank, 925.22 of the proposed rule would have for a period of 5 years from the date on E. Part 931—Federal Home Loan Bank implemented these two statutory which its membership terminated and it Capital Stock provisions, and § 925.29 of the final rule divested all of its shares of Bank stock. In General. As described in the retains these provisions, with several Section 925.30(b) of the final rule SUPPLEMENTARY INFORMATION section of changes, as described below. provides that an institution that the proposed rule, 65 FR 43412 (July 13, Section 925.29(a) of the final rule transfers membership between two 2000), the GLB Act requires the capital provides that if an institution withdraws Banks without interruption shall not be regulations to permit each Bank to issue from membership or its membership is deemed to have withdrawn from Bank ‘‘any one or more’’ of Class A or Class otherwise terminated, the Bank shall membership or had its membership B stock. Class A stock is to be determine an orderly manner for terminated. Section 925.30(b) further redeemable at par on six months written liquidating all outstanding indebtedness provides that any institution that notice to the Bank; Class B stock is to owed by that member to the Bank and withdrew from Bank membership prior be redeemable at par on five years for settling all other claims against the to December 31, 1997, and for which the written notice to the Bank. The board of member. After all such obligations and 5-year period has not expired, may directors of each Bank is to determine claims have been extinguished or apply for membership in a Bank at any the ‘‘rights, terms, and preferences’’ for settled, the Bank shall return to the time, subject to the approval of the each class of stock, consistent with member all collateral pledged by the Finance Board and the requirements of section 6 of the Bank Act, with the member to the Bank to secure its part 925. regulations of the Finance Board, and obligations to the Bank. with market requirements. The D. Part 930—Definitions Section 925.29(b) of the final rule regulations must prescribe the manner provides that if an institution that has As was proposed, § 930.1 of the final in which Bank stock may be ‘‘sold, withdrawn from membership or that rule sets forth the definitions for the risk transferred, redeemed, or repurchased,’’ otherwise has had its membership management and capital provisions of and must restrict the issuance and terminated remains indebted to the parts 931, 932 and 933. The Finance ownership of Bank stock to members of Bank or has outstanding any business Board has adopted § 930.1 generally as the Bank, prohibit the issuance of other transactions with the Bank after the proposed, with the changes discussed classes of stock, and provide for the effective date of its termination of below. liquidation of claims and the membership, the Bank shall not redeem The Finance Board has removed a redemption of stock upon an or repurchase any Bank stock that is number of the proposed definitions required to support the indebtedness or from the final rule because they are no 4 A similar conforming change is adopted herein the business transactions until after all longer relevant, given changes that have for part 956 of the Finance Board regulations.
VerDate 11
institution’s withdrawal from agrees that it is appropriate to allow Class A stock of its dividends. The membership. each Bank to determine the par value Finance Board sees merit in these Apart from authorizing the issuance and issue price for its stock and has arguments and thus has not included in of two classes of Bank stock, the GLB revised the final rule accordingly. Thus, § 931.1 of the final rule the requirement Act eliminated certain key for both Class A and Class B stock, the that the Class A stock have a stated characteristics of the single class of final rule provides that par value is to dividend or a priority over the Class B Bank stock that had been established be determined by the board of directors dividend. Section 931.4 of the final rule under prior law. For example, the Bank of the Bank and stated in the Bank’s addresses the issue of dividends, and Act no longer mandates a statutory par capital plan. The final rule also extends generally allows a Bank to establish a value for all Bank stock of $100 per to the Class B stock the requirement dividend preference as part of its capital share and no longer requires all Bank from the proposed rule that the stock be plan. Thus, the final rule permits, but stock to be issued at par value.5 As a issued only at its par value, which the does not require, a Bank to establish a result, the Bank Act now authorizes a proposed rule had required only for the stated dividend with a priority. To the Bank to establish the par value for its Class A stock. The provisions of the extent that any provisions of a Bank’s Class A and Class B stock (which may proposed rule that would have allowed capital plan might unfairly disadvantage differ), and permits the issuance of stock a Bank to issue Class B stock at a price one class of stockholders, the Finance at a price other than par value. other than par value prompted criticism Board will be able to address any such Classes of Capital Stock. Section from several commenters. Those inequities through the approval process 931.1 of the proposed rule set forth the commenters recommended that the final for the capital plans. essential characteristics of the two rule require the Banks to issue Class B A number of commenters opposed classes of Bank stock. The proposed rule stock at its par value, and expressed authorizing the issuance of subclasses of would have required the Class A stock concerns about allowing a Bank to issue the Class A or Class B stock, suggesting to have a par value of $100 per share, stock at a price above par value when be issued and redeemed only at par that it would create a risk of ‘‘cherry- the Bank is required by statute to picking’’ among the subclasses that value, be redeemable in cash only on redeem the stock at its par value. Other six-months notice, and pay a stated could be detrimental to the cooperative commenters noted that allowing the nature of the Bank System. Other dividend that would have a priority Banks to issue Class B stock at less than commenters questioned the legal over the Class B dividends. The its par value would be inconsistent with authority for subclasses. As explained in proposed rule would have required each general corporate practice. Bank to determine the par value for its Some commenters requested that the the SUPPLEMENTARY INFORMATION section Class B stock, as well as the price at final rule expressly allow a Bank to of the proposed rule, the board of which it would be issued, which could issue its Class B stock at ‘‘book value,’’ directors of a Bank has the authority be at par value or at or some other price. rather than at par value. Although the under section 6(a)(4)(A) and section The Class B stock also would have been issuance of Class B stock at its book 6(c)(4)(B) of the Bank Act to establish redeemable only at par value and with value would appear to be legally different rights, terms, and preferences five years notice, and would have been permissible under the Bank Act, such an for the stock issued by the Bank. 12 subordinated to the stated dividend on approach would raise other issues, such U.S.C. 1426(a)(4)(A), (c)(4)(B), as the Class A stock. The proposed rule as how the book value of a Bank would amended. Those provisions clearly also restated the statutory provision that be calculated, how frequently the authorize a Bank to issue Class A stock grants the Class B stock an ownership calculation would be made, and how a with rights, terms, and preferences that interest in the retained earnings of the Bank would address the issue of selling differ from Class B stock, and there is Bank. Although not expressly stock to its members at prices that could nothing in those provisions that would referenced by the GLB Act, the proposed vary day to day. Because of those and prohibit a Bank from issuing some rule would have authorized each Bank other issues concerning the issuance at shares of Class B stock, for example, to issue one or more subclasses of Class book value, the Finance Board has with rights, terms, and preferences that A and Class B stock, provided that each determined not to include that as an differ from other shares of the Bank’s subclass possessed all of the required option under the final rule. Class B stock. Thus, if the board of characteristics of its class. A number of commenters also directors of a Bank wished to issue some The final rule makes four principal objected to the proposed requirement shares of Class B stock for which the changes to § 931.1 of the proposed rule, that Class A stock pay a stated dividend dividend will be determined based on by eliminating the regulatory par value that would have a priority over the the performance of a specific category of for Class A stock, eliminating the stated payment of dividends on Class B stock. Bank assets and other shares of Class B dividend for Class A stock, eliminating The principal objection to that provision stock for which the dividend will be the priority for Class A dividends, and was that such a requirement may trigger determined based on the general requiring that each Bank issue its Class a taxable event for some members upon profitability of the Bank, it would have B stock at its stated par value. the conversion of their existing Bank the authority to do so. Obviously, if The commenters that addressed the stock to Class A stock. One of the some shares of Class B stock were to issue of the par value of the Class A reasons for including that provision in have rights, terms, and preferences stock generally opposed having the par the proposed rule was a concern that the different from those of other shares of value set by regulation, contending that members owning Class B stock might Class B stock, it would be eminently each Bank should determine the par favor themselves over the members sensible for the Bank to distinguish value for its stock. The Finance Board owning Class A stock with regard to the between the two types of Class B stock, payment of dividends. The Finance such as by giving them different names. 5 12 U.S.C. 1426(a) (1994). The minimum amount Board received a number of comments Section 931.1(c) of the final rule makes of Bank stock that each member was required to suggesting that the concern was clear that a Bank can designate such purchase had to be issued at par value. Any unfounded because the members different shares of stock as separate subsequent issuance could be at a price in excess of par value, but not less than par value. As a matter owning the Class B stock also would be ‘‘subclasses’’ if it wishes to do so. The of practice, all stock of the Banks has been issued likely to own Class A stock, and thus authority to issue subclasses of either at par value. would have no incentive to deprive the the Class A or Class B stock does not at
VerDate 11
all expand the authority of the Bank to structure. Similarly, there is no reason issue of how best to reconcile these issue anything other than Class A or to distinguish between subclasses of provisions in a subsequent rulemaking. Class B stock. Indeed, the proposed rule Class B stock with regard to the Issuance of capital stock. Section explicitly required each subclass to ownership of the retained earnings. 931.2(a) of the proposed rule would possess all of the characteristics of the Because the final rule requires that any have allowed each Bank to issue either class, and the Finance Board has subclasses of Class B stock must possess Class A or Class B stock, or both Class retained that provision in the final rule. all of the characteristics of Class B stock, A and Class B stock, as well as any Accordingly, the Finance Board believes the creation of a subclass of Class B subclasses of either. That section also that the Banks have the authority to stock cannot extinguish ownership required a Bank to issue stock only to issue subclasses of stock and the final interest in the retained earnings of the its members, barred the issuance of any rule allows the Banks to do so, subject Bank for that subclass, which is created other class of capital stock, required the to the limits described above. by statute. The GLB Act also Bank to act as its own transfer agent, One other issue raised by commenters contemplates, however, that the board and to issue its capital stock only in on this provision concerned the of directors of a Bank may establish book-entry form. The Finance Board ownership of the retained earnings by different rights, terms, and preferences also requested comments on whether the members that have purchased a for the Bank’s stock, which would allow the Banks should be allowed to issue Bank’s Class B stock. The commenters the board of directors to establish stock certificates and, if so, what asked that the final rule clarify that different dividend rates for different safeguards would be appropriate. ownership of Class B stock does not subclasses of Class B stock, even though Several commenters indicated that confer an enforceable right to receive each share of Class B stock, including its requiring book-entry form for Bank the retained earnings, and that the subclasses, otherwise would have the stock is reasonable and would prevent ownership interest extends to all same residual interest in the retained the stock from being improperly undistributed retained earnings existing earnings of the Bank. The final rule does transferred, though at least one at the time of conversion as well to not address the ownership of the commenter suggested that including the those existing thereafter. The retained earnings of a Bank that has requirement in the rule is unnecessary. commenters also sought clarification of issued no Class B stock. The ownership One Bank recommended that the final how the ownership interest would be interest in favor of the Class B rule allow the use of stock certificates affected if a Bank were to issue stockholders was created by Congress as because certain members, such as subclasses of Class B stock, and who part of the GLB Act. Although earlier insurance companies, may be required would own the retained earnings if a versions of the Bank reform legislation to hold certificates to comply with state Bank did not issue Class B stock. had included language that addressed law requirements. That Bank also recommended that a Bank be allowed to The GLB Act provides expressly that the ownership of the retained earnings a member shall have no right to use outside transfer agents, indicating by the owners of other classes of stock, withdraw or otherwise receive any that such an option may be particularly the GLB Act did not include such a portion of the Bank’s retained earnings, helpful for a Bank that uses an outside default provision for any Bank that does except through a dividend or capital entity to conduct elections. not issue Class B stock. Because the distribution by the Bank, which resolves The Finance Board is adopting the ownership of the retained earnings was the first comment. Similarly, the GLB provisions of § 931.2 largely as set forth created by Congress, the Finance Board Act provides that the owners of the in the proposal. Although a number of believes that the matter of ownership for Class B stock shall own the ‘‘retained insurance companies are members of those Banks without Class B stock is earnings, surplus, undivided profits, the Bank System, it is the understanding best left to the Congress to resolve. and equity reserves, if any’’ of the Bank, of the Finance Board that all of the and does not limit that interest to any As a related matter, Congress’ Banks currently issue their stock in particular date in time. Accordingly, decision to confer an ownership interest book-entry form, which appears not to once a Bank issues any Class B stock, in the retained earnings on the holders have caused any difficulties for such the holders of that stock will have an of the Class B stock has created some members under state law. Because no ownership interest in the retained uncertainty about whether a Bank can comments identified specific provisions earnings of the Bank from that date pay dividends on the Class A stock out of state law that would require an forward, until they redeem their Bank of its retained earnings. By law, there insurance company to be issued stock stock. After a member has redeemed (or are only two sources from which a Bank certificates in order to become a member the Bank has repurchased) all of its may pay dividends: previously retained of a Bank, the Finance Board is not Class B stock, it no longer would have earnings and current net earnings. 12 prepared to create an exception for such an ownership interest in the retained U.S.C. 1436(a). By giving the Class B entities in the final rule. To the extent earnings of the Bank, apart from any stockholders the exclusive ownership of that state law may require a particular dividends declared while the member the retained earnings, the GLB Act member to hold stock certificates in owned the Class B stock. There is appears to preclude the payment of order to become a member of a Bank, nothing in the language of the GLB Act dividends on the Class A stock from a the Finance Board would be prepared to that suggests that the interest of a Class Bank’s retained earnings. Although by consider the issue through a waiver B stockholder is limited to the retained statute a Bank may pay dividends on its request under the Finance Board’s earnings that exist on the date that the Class A stock from ‘‘current earnings,’’ existing procedures. In that event, the Bank converts from its existing stock to that may not be possible under Finance Board would expect the request the Class A and/or Class B stock. The applicable accounting rules, which for a waiver to demonstrate that state Finance Board believes that Congress dictate that a Bank must credit its net law allows no alternative but for an intended this to be an ongoing interest, earnings to retained earnings when it insurance company to hold physical such that interest of the Class B closes its books for the period. The final stock certificates in order to become or stockholders would extend to whatever rule does not resolve this problem, remain a member of the Bank System. retained earnings are accumulated over which is addressed in somewhat greater When it issued the proposed rule, the time, as well as those that exist on the detail under the discussion of § 931.4. Finance Board contemplated that Bank date of conversion to the new capital The Finance Board intends to raise the stock would have been traded among
VerDate 11
members on a regular basis, which Proposed § 931.2(d) would have higher than the regulatory minimums). would have presented a more prohibited a Bank from issuing stock to Section 931.7 of the proposed rule compelling need for a Bank to retain an a member or group of affiliated members would have allowed a Bank to require outside source to act as the transfer if the issuance would result in such each member to invest in Class A stock agent for its stock. As discussed below, member or group of affiliated members as a condition to being a member of the the final rule has eliminated the owning more than 40 percent of any Bank, but would have required that the provisions of the proposed rule that class of the outstanding capital stock of Bank also allow each member the option would have required Bank stock to be the Bank. Section 931.9 of the proposed of purchasing a lesser proportional traded among members, as well as rule separately would have limited the amount of Class B stock. If the Bank between the Bank and its members, at amount of stock that any one member, were at or above either of its operating a negotiated price. Thus, as in the past, or group of affiliated members, could capital ratios, the proposed rule would the overwhelming majority of stock own to 40 percent of any class of the have barred the Bank from requiring its transactions will be between a Bank and outstanding capital stock of the Bank. members to purchase any additional a member. As such, the Finance Board Several commenters suggested that the amounts of Bank stock, though it would does not anticipate that the need for an effect of that provision would be to limit have permitted a Bank to assess a outside transfer agent under the new the amount of advances that large membership fee in lieu of a mandatory capital structure than will be materially members could obtain because they stock investment. Section 931.8 of the greater than under the current capital would be barred from purchasing the proposed rule would have allowed a structure. The Finance Board anticipates necessary additional stock that would Bank to require its members to purchase further rulemaking in the first quarter of be required to support any new an amount of Class A or Class B stock 2001 on capital issues, and parties who advances. Other commenters suggested as a condition to doing business with can demonstrate why the Banks would that the provision would effectively the Bank. The proposed rule also would still need to retain an outside source to require small members to purchase have allowed a Bank to contract with a perform the transfer agent functions in additional stock to support the activities member for the purchase of stock on a the absence of a trading market for the of large members of a Bank. A number future date (as a means of satisfying an Bank stock will be able to address the of commenters requested that the activity-based stock purchase issue at that time. Finance Board address how the requirement), required that the amount Proposed § 931.2(b) would have provision would be applied to members of Class B stock be based on the risk required each Bank to determine the that exceeded the 40 percent cap characteristics of the underlying assets, initial method of distribution of its stock through no action of their own, such as and prohibited a Bank from restricting in a manner that is fair and equitable to if one or more larger members were to a member’s ability to sell stock that it all eligible purchasers. The proposed withdraw from the Bank. had purchased under this requirement. The Finance Board agrees the rule expressly allowed the Banks to As with the membership requirement, if concentration limit could have conduct the initial issuance through an a Bank were at or above either of its hampered some large members’ access exchange or conversion but did not operating capital ratios, the proposed to Bank advances and other activities. mandate either approach. In addition, rule would have barred the Bank from The Finance Board further believes that the proposal would have allowed a requiring its members to purchase any concerns that one member or group of Bank to distribute its then-existing additional Class B stock based on the members may exert undue influence business conducted with the Bank. unrestricted retained earnings as shares over a Bank can be addressed Nearly all commenters who addressed of Class B capital stock. adequately by limiting the voting rights the provisions of the proposed rule These provisions are being adopted in of large members, which the final rule relating to operating capital ratios the final rule substantially as proposed. does by retaining the current statutory recommended that those provisions be A Bank commenter recommended that cap on the number of shares that any eliminated from both the membership this section be amended to clarify that one member may vote in an election of and activity-based stock purchase a Bank may distribute retained earnings directors. Because the existing limits on requirements, or that they be revised to that are unrestricted at the time of voting rights will remain in place in the establish an operating capital range, conversion in the form of shares in a final rule, the proposed stock ownership rather than a fixed percentage. A subclass of Class B stock, in addition to limits are no longer necessary and have principal concern was that the operating shares of Class B stock as the proposed been deleted from the final rule. The capital ratios would cause inconsistent rule provides. Such action would be application of the voting limits under stock ownership and/or stock purchase authorized under the rule as written so the new capital structure is discussed requirements among members and that no change to the rule is required. separately under the explanation of the they may not be effective in preventing Proposed § 931.2(c) would have amendments to part 915 of the Finance the Banks from becoming required that a Bank issuing capital Board’s regulations. overcapitalized. By imposing such stock as a requirement of membership Minimum investment. Section 931.3 limits on stock issuance on a Bank that and as a requirement for conducting of the final rule addresses the minimum had reached its operating capital ratios, business with the Bank could do so only investment in capital stock that is the proposed rule also would have in accordance with proposed § 931.7 required of each Bank member. This effectively capped the amount of capital and § 931.8, respectively. The final rule section of the final rule replaces two that the Bank would have, which a has replaced those two provisions with separate provisions of the proposed number of commenters suggested was a new provision that addresses the rule, §§ 931.7 and 931.8, which not consistent with the safe and sound minimum investment that each member addressed ‘‘membership investment’’ operation of the Banks. must maintain in the stock of the Bank, and ‘‘activity-based’’ stock purchase The Finance Board continues to and thus has deleted the substance of requirements, respectively. Each of believe that operating capital ratios are § 931.2(c) from the final rule. The those provisions included limitations a valid business concept that should be provisions regarding the minimum based on the concept of a Bank’s retained in the final rule, but has investment are discussed under § 931.3, ‘‘operating capital ratios’’ (i.e., total and reconsidered the implementation of the below. risk-based capital ratios somewhat concept based on the comments. The
VerDate 11
Finance Board believes that operating of mandatory stock purchases. As be satisfied only with ‘‘permanent capital ratios are more appropriately described below, § 931.3 of the final rule capital,’’ which is defined to include described as a risk management tool for requires each Bank to establish a only the amounts paid in for Class B establishing capital levels at which the minimum investment in Bank stock as stock plus a Bank’s retained earnings Banks intend to operate, rather than as a condition of membership, as well as (determined in accordance with GAAP). a separate regulatory capital a condition of doing business with the The totality of the GLB Act definitions requirement for which the Finance Bank, but leaves to the individual Bank make it clear that Class A stock cannot Board would impose sanctions if the how the minimum investment is to be lawfully be used to satisfy a Bank’s risk- Banks were to operate at different levels. structured. Accordingly, the final rule based capital requirements, even if it Accordingly, the final rule deletes from no longer requires that the membership were to be held for the duration of an the capital regulation any reference to investment be in Class A stock, with an advance. With regard to the contention the operating capital ratios, as well as option for the member to invest a lesser that a Bank should be allowed to retain any reference to limits on a Bank’s amount in Class B stock, and does not the ‘‘5 percent of advances’’ requirement ability to issue capital stock once it has authorize a membership fee in lieu of from prior law, it would be possible reached its operating capital ratios. the minimum investment. This revision under the final rule for a Bank to do so, Instead, the final rule includes an to the proposed rule would not prevent provided that the amount of capital amendment to § 917.3 that requires each a Bank from assessing a fee on members generated by that requirement would be Bank to include as one element of its in other contexts, but it would bar the sufficient for a Bank to meet its total and risk management policy the total and assessment of a membership fee in any risk-based capital requirements, both for risk-based capital levels at which the form. its outstanding advances as well as for Bank intends to operate. In effect, the The activity-based stock purchase the other assets on the balance sheets of board of directors of each Bank must requirements of proposed § 931.8 the Banks. As discussed below, the establish the capital ratios or ranges at prompted numerous objections that they determination of how to structure the which it intends the management of the would have barred a Bank from minimum investment is left to the Bank to operate. If the Bank were to requiring its members to continue to individual Banks under the final rule. hold Bank stock that had been operate at capital levels that were The final rule includes, in § 931.3, purchased to support a particular materially above or below the operating much of the substance of the proposed business activity, such as advances, capital ratios established as part of the membership and activity-based stock risk management policy, the Finance with a Bank. Many of the commenters suggested that the Banks be allowed to purchase requirements, albeit with a Board would address the variance number of revisions and additions that through the examination and mandate a ‘‘buy-and-hold’’ requirement as part of any activity-based stock conform the final regulation more supervision process. The Finance Board closely to the statutory requirements. expects that the board of directors of purchase requirement. Those commenters contended that allowing a Consistent with a number of comments, each Bank will monitor the Bank’s § 931.3(a) of the final rule mandates that capital level to ensure that management member to sell Bank stock purchased to support a particular activity would each Bank shall require each member to complies with the capital ratios maintain a ‘‘minimum investment’’ in established by the board of directors. make it more difficult for Banks to meet their risk-based capital requirements. the stock of the Bank. The term A number of commenters who Commenters also expressed concern ‘‘minimum investment’’ includes addressed the membership investment that the proposed rule would threaten whatever amount of Bank stock an provisions of the proposed rule objected the cooperative structure of the Bank institution is required to purchase in to requiring the investment to be in System by separating stock ownership order to become a member of a Bank, as Class A stock, with the member having from the business that the members well as whatever amount of Bank stock an option to invest a lesser amount in conduct with the Banks, and would a member is required to purchase in Class B stock. Nearly all of the move the Banks toward a corporate form order to obtain an advance or to conduct commenters who addressed the use of a of business. any other business activity with the membership fee in lieu of a minimum A number of commenters advocated Bank. The GLB Act expressly requires investment in the stock of the Bank retaining the current activity-based each member to maintain a minimum opposed the concept, though at least stock purchase requirement (i.e., a investment in the stock of its Bank, and one commenter advocated allowing a member must own Bank stock at least requires the manner for determining the Bank to assess a fee in addition to a equal to 5 percent of its advances), amount of the minimum investment to minimum investment in Bank stock. As arguing that such a formula would be described in the Bank’s capital plan. discussed in the proposed rule, because provide adequate capital to cover the The GLB Act does not speak in terms of the operating ratio provisions would credit, market, and operational risks the minimum investment being have precluded a Bank from issuing associated with advances. One structured as separate membership and additional stock to certain of its commenter supporting that approach activity-based components. The GLB members in certain circumstances, the argued that any capital supporting an Act does, however, require the amount Finance Board believed it appropriate to advance is ‘‘permanent’’ because the of capital to be generated by the allow the Bank to assess an annual member cannot redeem the stock while minimum investment to be sufficient to membership fee on those members in the advance is outstanding, and that allow the Bank to comply with its total lieu of the stock purchase that otherwise either Class A or Class B stock could be and risk-based capital requirements, and would have been required. In part, these used as ‘‘permanent’’ capital for expressly authorizes a Bank to base the provisions were intended to avoid an advances. The Congress, however, has minimum investment on a percentage of accumulation of excess capital at the spoken definitively on these issues and a member’s assets and/or on a Banks. Because the Finance Board has the Finance Board is not at liberty to percentage of a member’s outstanding eliminated the concept of operating consider Class A stock as permanent advances, all of which suggest that capital ratios from the final rule, there capital. The risk-based capital under the new capital structure (as no longer is any need to permit requirements for a Bank, i.e., the capital under the existing structure), the membership fees to be assessed in lieu required for credit and market risk, may minimum investment must encompass
VerDate 11
both a membership component and an requirements of the GLB Act. That discussed previously, even if a member activity component. provision also provides expressly that does not borrow or otherwise engage in As a fundamental matter, the Banks each Bank must require its members to any business with its Bank, the Bank are cooperatives, which means that the maintain its minimum investment in has to maintain assets and infrastructure capital to support the business of the Bank stock for as long as it remains a to allow it to stand ready to do business Banks must be supplied by the members member and for as long as it engages in with such members, and all of those of the cooperative. If an institution any business transaction with a Bank assets require some amount of becomes a member of a Bank, it has against which the Bank is required to permanent capital and total capital to immediate access to all of the products maintain capital. Thus, for instance, a comply with the requirements of the and services of the Bank even if it does member that is required to purchase GLB Act. The same is true with regard not immediately take advantage of them. Bank stock as a condition of obtaining to members that borrow from or Nonetheless, the Bank stands ready to an advance or engaging in AMA otherwise do business with the Banks, provide advances and other services to transactions with the Bank, must except that the linkage between the the new member and has an continue to hold that stock for so long Bank assets that are created through infrastructure in place to provide those as the corresponding asset remains on such business dealings and the capital services. Both the liquid assets that a the Bank’s balance sheet. requirements is more apparent. In either Bank maintains in order to provide Section 931.3(b) of the final rule case, if a Bank could not require its services to its members, as well as parts provides that a Bank may establish the members to purchase some amount of of the infrastructure of the Bank (i.e., minimum investment required of each Class A stock and some amount of Class tangible assets) that enable it to provide member as a percentage of the total B stock, it could not possibly comply those services, are assets against which assets of the member or as a percentage with the capital requirements of the the Bank is required to maintain some of the advances outstanding to the GLB Act. In theory, a Bank could rely amount of permanent and total capital. member, or based on any other on retained earnings to provide the Thus, even a non-borrowing member provisions approved by the Finance permanent capital to allow it to comply benefits from the availability of these Board as part of the Bank’s capital plan. with its risk-based capital requirements services and should be required to That provision of the final rule reflects but, as a practical reality, no Bank has purchase some amount of both Class A exactly the requirements of the GLB Act. or is likely to have in the near term and Class B stock to support the capital Because the business transactions and sufficient retained earnings to allow that requirements associated with the Bank services that the Banks provide to their to occur. If the language of the GLB Act serving as a standby lender for the members are not limited to advances, were read to provide each member with member. Indeed, as a number of the Finance Board also has included in an option to purchase either Class A or commenters contended, an institution § 931.3(b) of the final rule a provision Class B stock, a Bank could not cannot become a member without allowing the Banks to establish a ‘‘ensure’’ that the minimum investment having invested some amount in the minimum investment as a percentage of it had established would provide stock of the Bank. Because a Bank must any other business activity conducted sufficient capital for the Bank to comply maintain permanent capital against with the members, which would with the GLB Act capital requirements. assets that benefit non-borrowing include AMA transactions. In addition, The Finance Board believes that the members, the Finance Board believes the final rule provides expressly that the most appropriate way to construe the that the most appropriate reading of the above bases for determining a minimum GLB Act is to allow the members the GLB Act is to require each member to investment are not mutually exclusive option of choosing from whatever maintain an investment in Bank stock and that a Bank may use any one or combinations of Class A and Class B (including Class B stock) regardless of more of them in any combination as the stock have been authorized by the board whether it has any business outstanding basis for determining the minimum of directors of the Bank as a means of with the Bank. investment required of the members. satisfying the minimum investment. Section 931.3(a) of the final rule also Accordingly, although the final rule Section 931.3(d) provides that each requires each Bank to require each allows the Banks several options for member of a Bank shall maintain an member to maintain a minimum structuring the minimum investment investment in the stock of its Bank in an investment in Bank stock as a condition that is required of all members, the amount that is sufficient to satisfy the to transacting business with the Bank or Banks must require the members to minimum investment requirement obtaining advances or other services purchase some amounts of stock in established by the Bank’s capital plan. from the Bank. Under the GLB Act order to conduct business with the This reflects provisions in the GLB Act capital provisions, a Bank cannot make Banks. that require each member to comply an advance or obtain Acquired Member Section 931.3(c) of the final rule with the minimum investment Assets (AMA) unless it has in place the provides that a Bank may require a established by the Bank’s capital plan. permanent and total capital required to member to satisfy the minimum It also addresses concerns expressed by meet the risk-based and leverage capital investment through the purchase of a number of commenters that certain requirements associated with those either Class A or Class B stock, or types of institutions, such as assets. Because of that requirement, the through the purchase of any one or more commercial banks, which are authorized Finance Board believes that the concept combinations of Class A and Class B under state law to invest in Bank stock of a ‘‘minimum investment’’ must stock that are authorized by the board of only to the extent that the investment is include the capital stock that is required directors of the Bank. That section also required as a condition of membership, to support the risks that a member’s provides that a Bank may establish a might lack the legal authority to invest business transactions place on the lower minimum investment for in Bank stock if the investment were not balance sheet of the Bank. Section members that invest in Class B stock required as a condition of membership 931.3(a) of the final rule provides that than for those that invest in Class A or as a condition of obtaining services the specifics of how a ‘‘minimum stock, provided that the reduced from the Bank. investment’’ is to be calculated is to be investment remains sufficient for the The final rule does not include the determined by each Bank as part of its Bank to remain in compliance with its provision formerly in § 931.8(c) of the capital plan, which reflects the minimum capital requirements. As proposed rule, which would have
VerDate 11
required that the amount of Class B the Class A dividend by and for the requirements and applies equally to stock that a member must purchase be benefit of Class B shareholders, who dividends on Class A and to Class B based on the risk characteristics may well have a greater influence on the stock. 12 U.S.C 1436(a). The final rule associated with the type and duration of Bank’s dividend policies than the Class also provides that a Bank shall declare asset to be acquired by the Bank as a A shareholders. The Finance Board and pay dividends only in accordance result of the particular transaction with continues to believe that it is important with its capital plan. As previously that member. In order to satisfy the to ensure that this does not happen, but discussed, certain amendments made by requirement in the final rule that the believes that the capital plan review the GLB Act may limit the ability of a minimum investment shall be sufficient process is the appropriate means to do Bank to pay dividends on its Class A to ensure that the Bank remains in so. stock from retained earnings. Section compliance with all of its minimum One commenter recommended that 6(h)(1) of the Bank Act, 12 U.S.C. capital requirements, the Banks may the final rule bar a Bank from paying a 1426(h)(1), as amended, provides that well have to take into account the risk dividend if it is not in compliance with the ‘‘holders of the Class B stock * * * characteristics associated with its capital requirement or would fall out shall own the retained earnings, particular transactions with members in of compliance as a result of paying the surplus, undivided profits, and equity determining what investment to require dividend, explaining that without such reserves * * * of the Bank.’’ The for such transactions. Under the final a provision a Bank could continue to following paragraph of the statute limits rule, however, that matter is left to the pay dividends in order to forestall stock that ownership interest, providing that a board of directors of each Bank to redemptions, notwithstanding its lack of member has no right to receive any resolve, through the capital plan. sufficient capital. The GLB Act portion of the retained earnings, other expressly precludes a Bank from Dividends. As discussed previously, than through a dividend or a capital distributing its retained earnings unless the Finance Board has deleted from the distribution. The next paragraph bars a it would continue to meet all applicable final rule the provisions of the proposed Bank from distributing any of its capital requirements following the rule that would have required that the retained earnings unless it would distribution. Section 2A(a)(3)(A) of the Class A stock pay a stated dividend that continue to meet all of its capital Bank Act also provides that the primary would have a priority over the requirements following the distribution. duty of the Finance Board is to ensure dividends on the Class B stock. The Read together, those provisions appear that the Banks operate in a financially final rule also deletes all of proposed to require that the retained earnings of safe and sound manner. 12 U.S.C a Bank are available only for the § 931.4(b), which would have required 1422a(a)(3)(A). The minimum capital the capital plan of each Bank to address payment of dividends to the holders of requirements established by the GLB the Class B stock. To allow the retained certain issues associated with the stated Act advance the safety and soundness of dividend and the priority for the Class earnings to be used as a source for the Bank System by ensuring that the dividends on the Class A stock would A stock, and all of proposed § 931.4(c), Banks have sufficient capital to conduct which separately addressed the appear to require a Bank to use the their business. The Finance Board property of one class of stockholders to dividends on the Class B stock. As believes that a Bank that fails to previously discussed, many commenters pay dividends to another class of maintain the minimum amounts of stockholders, who have been granted no recommended eliminating the stated capital required by the GLB Act would dividend and the dividend priority for ownership interest in those retained be operating in an unsafe and unsound earnings. Class A stockholders, citing potential condition, which would require tax consequences to the members. remedial action by the Finance Board. Section 16(a) of the Bank Act, 12 Several commenters also suggested that Although it was never the intent of the U.S.C. 1436(a), provides that ‘‘no each Bank be permitted to decide the Finance Board to suggest that a Bank dividends shall be paid except out of dividend structure and preferences, if could pay dividends while not meeting previously retained earnings or current any, to be assigned to the classes of its minimum capital requirements, the net earnings.’’ That suggests that even if stock that it issues. The Finance Board Finance Board sees merit in explicitly the retained earnings are available only agrees with those comments, and has stating so in regulation and has added for payment of dividends to the holders removed those provisions from the final such language to the final rule. of the Class B stock, a Bank could use rule for those reasons. Thus, the final Section 931.4(a) of the proposed rule its ‘‘current net earnings’’ as the source rule provides simply that the capital also had provided that any member, for paying dividends on its Class A plan may establish different dividend including a member withdrawing from stock. It appears, however, that under rates or preferences for each class or the Bank System, that owns Class A or generally accepted accounting subclass of Bank stock, which Class B stock, or both, would be entitled principles (GAAP), current earnings are effectively leaves to the board of to receive dividends declared on its closed to retained earnings at the close directors of each Bank the decision as to stock for as long as it owned the stock. of each accounting period, the effect of how to structure dividends to the The final rule retains that provision. which is to make current earnings members. To the extent that the Section 931.4(a) of the proposed rule unavailable as a source of dividends. dividend structure adopted by a Bank further provided that any dividends on Though it appears unlikely that the might unfairly favor one class of the Class B stock shall be payable only Congress considered how creating a stockholder over another, the Finance from the net earnings or retained property interest in the retained Board would be prepared to address earnings of the Bank, determined in earnings in favor of the Class B those issues as part of the approval accordance with GAAP and was silent stockholders might limit the ability of process for the capital plans. The on the sources available for dividends the Banks to pay dividends on their Finance Board expects that it will not on Class A stock. The final rule includes Class A stock, the language that approve a capital plan if it would allow a similar provision, providing that a Congress used places the ownership of for the holders of either stock class to Bank may pay dividends only from its the retained earnings with the Class B be treated unfairly. These provisions previously retained earnings or its stockholders. The final rule is silent on were included in the proposed rule to current net earnings. That language this issue. As noted previously, the preclude the possible manipulation of simply restates the existing statutory Finance Board anticipates further
VerDate 11
rulemaking in the first quarter of 2001 discussed, many commenters stock to the member in cash. The on capital issues, and believes that the recommended eliminating such a proposal also would have barred a resolution of this issue regarding the preference in order to avoid creating a member from having pending at any one source of dividends for the Class A taxable event with respect to stock time more than one notice of stock should occur after there has been previously issued as dividends when redemption for any class of Bank stock. an opportunity for public comment on existing stock is converted to Class A Several commenters expressed concerns the issue. To the extent that any Bank stock. The Finance Board has with this restriction, indicating that it intends to submit a capital plan that eliminated this provision in the final would inhibit a Bank’s ability to pay would call for the payment of dividends rule, substituting instead a requirement stock dividends on Class B stock on Class A stock, the Finance Board that the respective rights of Class A and because a member that did not want to expects that the plan would identify the Class B stockholders, in the event that hold stock dividends effectively would source for paying such dividends, the Bank is liquidated, or is merged or be precluded from requesting address the authority of the Bank to pay otherwise consolidated with another redemptions. One Bank commenter dividends from that source, and Bank, shall be determined in accordance suggested that, rather than restricting describe how the proposal would be with the capital plan of the Bank. redemption requests, the Bank should treated under relevant accounting Transfer of capital stock. Consistent be allowed to assess a fee for additional principles. with current practice, the proposed rule redemption requests. To address this Some commenters expressed concern would have allowed a member to issue, the Finance Board has revised the that any regulatory limits on dividends transfer capital stock only to another final rule to bar a member from having may prove troublesome over time, given member of the Bank or to an institution more than one notice of redemption the potential for increased volatility in that is in the process of becoming a outstanding at one time for the same reported net income and retained member. Unlike current practice, the shares of Bank stock. This will allow a earnings that could result from the proposed rule would have required such member that has submitted a implementation of Statement of transfers of stock to be at a price agreed redemption notice for certain shares of Financial Accounting Standards No. 133 to by the parties, which by implication stock to file an additional notice for (SFAS 133), the new GAAP accounting meant that the price could be below, at, other shares of stock if it receives stock standard for derivatives. One or above the par value of the stock. dividends or otherwise is holding commenter recommended that if the Several commenters raised issues excess stock that it desires to have transitory income effects associated with allowing stock transfers to an redeemed. with SFAS 133 were to prevent the institution in the process of becoming a The final rule also clarifies that a payment of a dividend, it would be member, citing concerns that if it did member may cancel a notice of appropriate for the Bank’s board of not become a member, a non-member redemption if it does so in writing to the directors to have the authority to declare institution could own Bank stock which Bank, and the Bank may impose a fee and pay a dividend from earnings would be inconsistent with the GLB (to be specified in the capital plan) on without regard to these transitory SFAS Act. To address concerns raised by the any member that cancels a pending 133 effects. Another commenter commenters, the Finance Board revised notice of redemption. The requirement expressed concern about the market and the phrase ‘‘institution in the process of that a Bank shall not be obligated to income volatility generated by the becoming a member’’ in the final rule to redeem its capital stock other than in accounting treatment surrounding ‘‘institution that has been approved for accordance with this paragraph also is mortgage-related options, such as those membership in that Bank and that has adopted in the final rule. associated with the Mortgage satisfied all conditions for becoming a Section 931.7(b) addresses repurchase Partnership Finance (MPF) program. As member, other than the purchase of the of capital stock, which was referred to noted previously, by statute a Bank may minimum amount of Bank stock that it in the proposal as purchase of capital pay dividends only from its current is required to hold as a condition of stock. Repurchase of capital stock earnings or its previously retained membership.’’ differs from redemption in that it is a earnings. To the extent that these Many commenters opposed the transaction that is initiated by a Bank, comments suggest that the Finance trading of Bank stock at a negotiated whereas a redemption of Bank stock is Board should allow a Bank to pay price among its members. Such trading, a transaction that is initiated by a dividends from some other source, the it was argued, would require members member. The proposed rule provided Finance Board is not prepared to do so. to hold Bank stock as an available-for- that a Bank, in its discretion, may Moreover, the GLB Act requires that in sale asset, which would have to be purchase outstanding Class A or Class B calculating risk-based and total capital, marked to market. The Finance Board capital stock from its members at any the retained earnings of a Bank must be agrees that such problems outweigh the time at a negotiated price. Several calculated in accordance with GAAP. potential benefits of other than par commenters expressed concerns about The GLB Act also restricts a Bank from value transfers, at this time, and has the implications of requiring such making a retained earnings distribution, thus revised the final rule to require that transactions to occur at a negotiated unless following such distribution the any transfer of stock among members price, indicating that such a Bank would continue to meet all must be at par value. requirement would effectively prevent a applicable capital requirements. These Redemption and repurchase of capital Bank from repurchasing excess Bank statutory provisions, read together, stock. Proposed § 931.10 (§ 931.7 in the stock unless the Bank were willing to persuade the Finance Board that it final rule) set forth requirements for pay the price demanded by the member. should not adopt the suggestions raised redemption and purchase of capital Several commenters also recommended by these commenters. stock and provided that a member may that a Bank be given the unilateral right Liquidation, merger, or consolidation. seek to have the Bank redeem its Class to purchase excess stock from any The proposed rule established a priority A and Class B stock with six-months member at par value, so long as the for Class A shareholders over Class B and five-years written notice to the purchase would not result in the Bank’s shareholders, in the event of a Bank, respectively. At the end of the failure to comply with any regulatory liquidation, merger, or other notice periods, the Bank would be capital requirement. One commenter consolidation of a Bank. As previously required to pay the par value of the suggested that the Banks be given the
VerDate 11
right to purchase Class A shares at par what circumstances a redemption pertaining to the contents of the capital value and Class B shares at book value. request may be withdrawn. Under the plans. Section 932.1 of the proposed The Finance Board agrees that the final rule, a member can withdraw a rule would have required, by a date not proposed rule could make it request for redemption at any time prior later than three years from the effective unnecessarily difficult for the Banks to to the expiration of the applicable notice date of its capital plan, that each Bank manage effectively their capital period, though the Bank may assess a have sufficient total capital to meet the accounts. Accordingly, the final rule fee on any member that does so. The minimum leverage capital requirement authorizes the Banks, in their discretion Finance Board expects that each Bank in proposed § 932.2, and sufficient and without regard to the 6-month and will monitor its capital levels at all permanent capital to meet the risk-based 5-year redemption periods, to times and will not honor a redemption capital requirement in proposed § 932.3. repurchase excess stock from their request if doing so would cause it to fail The proposed rule also would have members. As noted previously, the term to comply with any of its capital mandated that the minimum stock ‘‘excess stock’’ includes any Bank stock requirements. How a Bank would purchase and stock retention owned by a member in excess of the address a situation in which multiple requirements of the Bank Act in effect amount that the member is required to members simultaneously submit immediately prior to the GLB Act own under the minimum investment redemption requests that would cause amendments remain in effect until the provisions of the Bank’s capital plan. the Bank to fall below any minimum Bank had issued capital stock in The final rule also addresses an issue capital requirement should be addressed accordance with its approved capital raised by the comments by requiring the in the Bank’s capital plan. plan, and that each Bank would Banks to provide reasonable notice to One commenter suggested amending continue to be governed by certain any member from which the Bank this section to clarify that a Bank that is provisions of the Finance Board’s intends to repurchase excess stock, with not in compliance with its regulatory Financial Management Policy (FMP) the length of such notice being stated in capital requirements not be permitted to until the Bank had met the proposed the capital plan. For any such redeem stock. The final rule precludes regulatory capital requirements. repurchases, the Banks must pay to the a Bank from redeeming or repurchasing One Bank commenter recommended members the stated par value of the any stock if, following the redemption that this provision be amended to clarify stock in cash. The final rule also states or repurchase, the Bank would fail to that the new minimum stock purchase expressly that a member’s submission of meet any minimum capital requirement, and retention requirements would not a notice of intent to withdraw from or if the member would fail to maintain become effective until a Bank had membership, or its termination of its minimum investment in the stock of issued all stock under its plan, to allow membership in any other manner, shall the Bank, as required by § 931.3. for issuance of stock in tranches or not, in and of itself, cause any Bank Capital Impairment. The final rule rounds. A few commenters questioned stock to be deemed excess stock for bars a Bank from redeeming or whether the current leverage limitation, purposes of this section. That provision repurchasing any capital stock without 12 CFR 966.3(a) (65 FR 36290, 36299 reflects a statutory requirement imposed the prior written approval of the (June 7, 2000)), is less flexible than the by the GLB Act. 12 U.S.C. 1426(e)(2), as Finance Board if the Finance Board or leverage authority in the GLB Act, and amended. the board of directors of the Bank has the total capital provision of the Several Bank commenters determined that the Bank has incurred proposed and final rule, and requested recommended that the final rule give or is likely to incur losses that result in deletion of § 966.3(a). Section 966.3(a) the Banks clear discretion to approve or or are likely to result in charges against requires a Bank to hold total assets not deny a member’s request for the capital of the Bank. The proposed in excess of 21 times the total of its redemption, so long as the Bank is in rule had included a comparable paid-in capital stock, retained earnings, compliance with its regulatory capital provision, which would have allowed a and reserves (excluding loss reserves requirements. It is not apparent from the Bank to redeem or repurchase stock and liquidity reserves for deposits as GLB Act that a Bank would have the with Finance Board approval even if the required by 12 U.S.C. 1421(g)). In authority to deny a redemption request Bank thereafter would fail to meet its addition, that rule provides additional if the capital of the Bank would not minimum capital requirements. The leverage authority by allowing a Bank to become impaired by the redemption or inclusion of the language in the have an asset-based leverage of up to 25 if the Bank would remain in compliance proposed rule that would allow for such to 1 if the non-mortgage assets held by with its regulatory capital requirements transactions with Finance Board the Bank after deducting the amount of following the redemption. Thus, the approval was inadvertent, and the final deposits and capital, do not exceed 11 final rule provides that at the expiration rule does not permit such transactions. percent of the Bank’s total assets. 12 of the six-month or five-year notice The final rule also provides that the CFR 966.3. Several Banks commented period, as applicable, the Bank will be prohibition on redemption and that the existing leverage limit would required to pay the par value of the repurchase will apply even if a Bank is prevent them from efficiently leveraging stock to the member in cash, assuming in compliance with its minimum capital the permanent capital base afforded that the capital of the Bank is not requirements, and will remain in effect through Class B stock, and that the impaired, the Bank meets its minimum for however long the Bank continues to existing leverage limit is more capital requirements, and the member is incur such charges or until the Finance restrictive than the GLB Act leverage not required to hold the stock as a Board determines that such charges are limit otherwise allowed. condition of remaining a member or of not expected to continue. As stated in The transition provision of the final engaging in any business transactions the final rule, the provision more rule has been clarified in numerous with the Bank. One commenter closely tracks the statutory language. respects to address issues raised by the recommended that the redemption Transition Provision. The proposed commenters, as well as other issues. In provisions of the final rule clarify who rule included a general transition the final rule, the Finance Board has makes a redemption determination provision in § 932.1 for the Banks to relocated the general transition when redemption would cause the Bank meet the risk-based and leverage capital provision to § 931.9, and has included a to fall below its regulatory capital requirements, as well as a separate conforming provision in § 933.4 as part requirement and whether and under transition provision in § 933.3, of the capital plan requirements. As an
VerDate 11
initial matter, the transition provisions of up to three years from the effective plan. Consistent with the GLB Act, any of the final rule are keyed to the date of the capital plan, there is nothing such transition period will apply only to ‘‘effective date’’ of a Bank’s capital plan, in the GLB Act to suggest that during those institutions that were members of which is defined as the date on which any such transition period the existing the Bank as of November 12, 1999, the Bank first issues any Class A or leverage requirements should cease to which was the date of enactment of the Class B stock. Prior to the effective date apply. The Finance Board believes, as a GLB Act, and whose investment in Bank of a Bank’s capital plan, the issuance matter of safety and soundness, that it stock as of the effective date is less than and retention of Bank stock are to be is essential for the Banks always to be the amount required by the capital plan governed by §§ 925.20 and 925.22, subject to a leverage requirement, and for that Bank. Any institutions which implement the stock purchase that the transition provision should not becoming members of a Bank after that requirements of the Bank Act as they be read as authorizing the Banks to date will be required to conform their existed prior to the GLB Act. As of the operate with no leverage capital Bank stock ownership to the amounts effective date of a Bank’s capital plan, requirement for up to three years after required by the capital plan as of the the issuance and retention of Bank stock the effective date of their capital plans. effective date of the capital plan. shall be governed exclusively by the The Finance Board believes that the best Similarly, any members that, as of the capital plan for that Bank. way of assuring continuity between the effective date, own stock in excess of the As a general matter, § 931.9(a) of the current regulatory leverage requirement amount required by the capital plan, final rule requires each Bank to comply and the GLB Act leverage requirements will be required to comply with the with the minimum leverage and risk- during any transition period is to link minimum investment established by the based capital requirements of §§ 932.2 the termination of the existing leverage plan from that date forward. The final and 932.3, respectively, as of the requirements to the commencement of rule expressly authorizes the Banks to effective date of the Bank’s capital plan. the new leverage requirements. In effect, require their members that are subject to If a Bank is in compliance with both the the final rule leaves to the board of any such transition provision to leverage and risk-based capital directors of each Bank the ability to purchase additional shares of Bank requirements as of the effective date of determine the date on which the stock in increments over the course of its capital plan, it shall thereafter be existing leverage requirements in the transition period. governed exclusively by the provisions § 966.3(a) will cease to apply to that The final rule includes two separate of its capital plan and the capital Bank. Banks that will achieve provisions that relate to new members requirements of §§ 932.2 and 932.3. For compliance with the GLB Act capital and to new business, respectively. Any any Bank that is in compliance with the requirements immediately as of the new members, i.e., those institutions GLB Act leverage capital requirements effective date of their capital plans will that became members after November as of the effective date, the final rule no longer be subject to the current 12, 1999 but prior to the effective date provides that existing leverage regulatory leverage limits. Banks of the capital plan, as well as those requirements at § 966.3(a) shall cease to requiring or desiring additional time to institutions that become members after apply to that Bank as of that date. come into compliance with the GLB Act the effective date of the capital plan, If a Bank will be out of compliance leverage requirement will have certainty will be required to comply with the with the GLB Act capital requirements under the final rule as to what leverage minimum investment requirements of as of the effective date of its capital requirements apply to the Bank during the Bank’s capital plan as of the plan, then § 931.9(b)(1) of the final rule the transition period. effective date of the plan, or upon allows the Bank to establish a transition Section 931.9(a) of the final rule becoming a member, as appropriate. period over the course of which it will separately requires each member to Finally, § 931.9(b)(3) requires a Bank’s come into compliance with the GLB Act comply with the minimum investment capital plan to require any member that capital requirements. Any such established by the capital plan of its obtains an advance or other services transition period must be established as Bank as of the effective date of that plan. from the Bank, or that initiates any other part of the Bank’s capital plan and must As was proposed, prior to the effective business activity with the Bank against describe the steps that the Bank plans to date of the Bank’s capital plan the which the Bank is required to hold take during the transition period to members will be required to purchase capital after the effective date of the come into compliance with the new and hold Bank stock in accordance with capital plan to comply with the capital requirements. The capital plan §§ 925.20 and 925.22 of the Finance minimum investment specified in the also must indicate the length of the Board’s regulations, which implement Bank’s capital plan for such advance, transition period, which shall not the stock purchase requirements of the service, or activity at the time the exceed three years from the effective Bank Act as in effect prior to the GLB transaction occurs. The Finance Board date of the capital plan. During the Act. views the transition provisions of the period of time that the Bank is out of Although the final rule generally GLB Act as authorizing the Banks to compliance with the GLB Act leverage requires members to meet the minimum establish a period of time during which requirement, the final rule provides that investment as of the effective date of the they, and their members, may increase the Bank will remain subject to the Bank’s capital plan, it also authorizes a their existing capital, or their existing existing regulatory leverage requirement Bank to include in its capital plan a investment in Bank stock, to the levels established by § 966.3(a). Once a Bank transition provision that would allow required by the GLB Act amendments. that has been operating under a members up to three years to purchase Thus, the transition provision assures transition period comes into compliance the amount of Bank stock that is that neither the Banks nor their with the GLB Act leverage capital required by the capital plan. The capital members will be required to capitalize requirement, it will cease to be subject plan shall specify the length of any their existing business, i.e., the business to the regulatory leverage requirement of transition period established for the existing as of the effective date, in § 966.3(a). members and shall describe the actions accordance with the GLB Act Though it is clear that the Congress that the members must take during the requirements unless the Banks intended the Banks to have the option transition period in order to come into affirmatively decide to do so. For of achieving compliance with the GLB compliance with the minimum business transactions that are Act capital requirements over a period investment provisions of the capital undertaken after the capital plans take
VerDate 11
effect, however, there is no need for a into a single section, § 931.9, in the final as amended by the GLB Act. 12 U.S.C. transition period because those rule. Proposed § 932.1(c), under which 1426(a)(2). Proposed § 932.2(a) would transactions never would have been the risk management provisions of the have required a Bank to maintain total subject to the old capital rules. FMP would have ceased to apply to a capital equal to no less than four Moreover, construing the transition Bank at the end of any transition period, percent of its total assets, where total provisions as applying to transactions has been eliminated from the capital was computed without regard to that are initiated after the new capital consolidated transition requirements. the weighting factor required by the structure takes effect would pose the The Finance Board has reconsidered the GLB Act and described in proposed risk that the Banks could have up to proposal and has determined that it § 932(b). This weighting factor would three years during which to place assets would be more prudent to grant relief have required a Bank to multiply the on their books that would not be from any remaining FMP requirements permanent capital component of its total supported by adequate capital, a risk the at the time each Bank’s capital plan is capital by 1.5. (Permanent capital is Finance Board is not prepared to approved. This would allow the Finance defined to include the paid-in value of authorize. Board to consider the specifics of each Class B stock and retained earnings calculated in accordance with GAAP. 12 F. Part 932—Federal Home Loan Bank capital plan, the general economic U.S.C. 1426(a)(5).) The provision, Capital Requirements conditions and any other factors that could affect a Bank’s future operations consistent with the GLB Act, further Overview. As discussed in the and ability to fulfill its mission, before would have mandated that a Bank’s SUPPLEMENTARY INFORMATION section of determining whether any part of the total capital, computed using the the proposed rule, the Finance Board, in FMP should continue to apply. The weighting factor, could not have been developing the proposed risk-based comments received on the transition less than five percent of its total assets. capital requirements, drew from and provision for the minimum capital In the proposed rule, the Finance Board expanded upon work done by the Basle requirements are addressed in the also would have reserved the right to Committee on Banking Supervision SUPPLEMENTARY INFORMATION section require a Bank to have and maintain (BCBS), other federal financial discussion of § 931.9. total capital in amounts above the regulators, the Office of Federal Housing In addition to the transition provision, minimum required levels if warranted Enterprise Oversight (OFHEO), which proposed § 932.1 contained a by safety and soundness concerns. The supervises the Federal National requirement that before a Bank’s capital proposed provision reserving this Mortgage Association (Fannie Mae) and plan could take effect, the Bank would authority was substantively the same as the Federal Home Loan Mortgage have to obtain Finance Board approval the provision contained in proposed Corporation (Freddie Mac), and other of its internal market risk model or § 932.3 concerning the minimum risk- sources as well as the work done in internal cash flow model and for the based capital requirement. developing the Finance Board’s risk assessment procedures and controls The Finance Board received several Financial Management and Mission that would be used to manage the comments on proposed § 932.2, but for Achievement (FMMA) rule proposal. Bank’s credit, market and operations the reasons discussed below has not See 65 FR at 43410–11, 43419–34 (July risk. An adequate internal model must changed the provision in response to 13, 2000). The Finance Board has made be developed and approved before the those comments and is, therefore, changes in the final rule to refine and risk-based capital requirements—a key adopting § 932.2 substantially as clarify its risk-based capital requirement proposed, with certain technical component underlying the new capital further, although the basic framework changes. The requirement describing the structure—can be calculated.6 At the remains the same as in the proposal. weighting factor has been revised to same time, adequate internal controls These changes, which are discussed in clarify how the weighting factor is for recognizing and managing the risks more detail below, were based on applied, and the provision concerning faced by the Banks will be an important comments received as well as additional the Finance Board’s right to require a factor in the successful implementation work done by the Finance Board’s staff. Bank to hold total capital above the of a new capital system in which the Changes were also made in the final rule minimum levels has been revised to Banks’ required capital levels are to recognize that, given changes conform to the substantively similar closely tied to their risk profiles. No required by SFAS 133, derivative provision in § 932.3 of the final rule. contracts can no longer be considered comments were received on the One commenter requested solely off-balance sheet items. In the approval requirement in proposed clarification as to whether total capital final capital rule, derivative contracts § 932.1(b). Accordingly, the Finance had to be calculated in accordance with are, therefore, referred to and addressed Board continues to view an approved GAAP. The commenter believed that as transactions distinct from assets or internal market risk or cash flow model implementation of SFAS 133 as part of off-balance sheet transactions. The and adequate internal risk management GAAP would result in a Bank’s assets Finance Board also addresses the controls as necessary prerequisites for being artificially ‘‘grossed up’’ because comments received on the risk-based implementation of the Banks’ capital unrealized gains on certain derivative capital requirements in its discussion plans and has adopted this requirement contracts would have to be recorded on below of each individual section of without change in § 932.1 of the final a Bank’s balance sheet as assets. The these requirements. rule. commenter urged the Finance Board to allow total capital and the minimum Section 932.1—Risk Management and Section 932.2—Total Capital Requirement leverage ratios to be calculated without Former Transition Provision taking account of these unrealized gains As previously discussed, proposed Proposed § 932.2 set forth the on derivative contracts. However, the § 932.1 contained the transition minimum total capital leverage GLB Act requires that when deriving provision for meeting the risk-based and requirement contained in the Bank Act, permanent and total capital, ‘‘retained total capital requirements. The earnings’’ must be calculated in 6 As adopted in the final rule, § 932.5 allows each transition provisions for the capital Bank to determine market risk capital charges using accordance with GAAP. 12 U.S.C. plans and the minimum capital an approved internal market risk model or internal 1426(a)(5)(A)(ii). By extension, the requirements have been consolidated cash flow model. valuation of all assets and liabilities,
VerDate 11
upon which the calculation of retained least the sum of the Bank’s credit, lawfully be used to satisfy a Bank’s risk- earnings is based, would likewise have market and operations capital risk based capital requirements. to conform with GAAP. The requested requirements. The proposed rule also Some commenters also urged the change, therefore, is not consistent with provided that the Finance Board for Finance Board to allow Banks to apply the requirements of the GLB Act. reasons of safety and soundness could at least some portion of the paid-in Further, the Finance Board believes that require a Bank to hold a greater amount value of Class A stock against the it would undermine the efficacy of the of permanent capital than the required operations risk capital charge because, minimum total capital ratios as a minimum amount. unlike the credit and market risk regulatory tool if the total asset The Finance Board received a number requirements, an operations risk component (i.e., the denominator) of the of general comments on the risk-based requirement was not specifically minimum total capital ratios were to be capital requirement. Many commenters mandated by the GLB Act. However, as calculated on a different basis than the believed that the paid-in portion of addressed elsewhere in this total capital component (i.e., the Class A stock should be considered SUPPLEMENTARY INFORMATION section, the numerator). Thus, no change in the final permanent capital for purposes of Finance Board considers an operations rule has been made in response to this fulfilling some aspects of the risk-based risk charge to be an integral part of the comment.7 capital requirement. Other commenters risk-based capital requirement. Further, One commenter also requested felt that, overall, the risk-based capital as just discussed, by statute, Class A clarification of what safety and charges were too high and would put stock is not suitable risk-bearing capital soundness concerns may prompt the the Banks at a competitive disadvantage for credit and market risk. Consistent Finance Board to require a Bank to hold to Fannie Mae and Freddie Mac. One with this approach, the Finance Board total capital above the minimum commenter requested that the Finance continues to believe that only required level. The primary duty of the Board delineate more clearly the permanent capital should be held Finance Board is to ensure that the conditions under which it would against the operations risk requirement, Banks operate in a ‘‘financially safe and require a Bank to hold additional which, along with the credit and market sound manner.’’ 12 U.S.C. permanent capital and to clarify risk requirements, forms the overall 1422a(a)(3)(A). The Bank Act has long whether Finance Board staff could order risk-based capital requirement. More generally, with regard to the provided the Finance Board or its such an action. Another commenter magnitude of the risk-based capital predecessor agency the authority to take requested clarification concerning the charges, estimates by the Finance Board actions to carry out that duty and other risk weighting that would be applied to responsibilities under the Bank Act. 12 staff indicate that the total risk-based unrealized gains held as assets for risk- U.S.C. 1422b. Section 932.2(c) of the capital charges will not be onerous to based capital purposes. The Finance final rule is consistent with the duties the Banks as some commenters have Board has considered all comments and authority of the Finance Board suggested, given the Banks’ current received on the minimum risk-based under the Bank Act and will be balance sheets and risk profiles. Even capital requirements and, for the implemented as is necessary and estimates of the market risk capital reasons discussed below, is adopting authorized to carry out those duties. charges produced by the Banks’ § 932.3 substantially as proposed. However, as explained more fully below consultant, which involved stress in the discussion of the Minimum Risk- One Bank and a number of its scenarios that would be more rigorous Based Capital Requirement, the Finance members argued that, because Class A than those required under the proposed Board expects that the authority granted stock cannot be redeemed if the Bank is rule, did not suggest that the capital under this provision rarely will be used, operating below its minimum capital requirements being adopted here would but nonetheless believes that the requirements, Class A stock should be be unreasonable. Specifically, the provision is an important safeguard considered permanent capital, thus Finance Board anticipates that at least at measure in case unforeseen events suggesting that the Finance Board allow the time of implementation of the result in anticipated or actual the paid-in value of Class A stock to be capital plans, the risk-based capital impairment of a Bank’s capital. used to meet some portion of the requirement for all Banks will be below minimum risk-based capital the minimum total capital leverage Section 932.3—Risk-Based Capital requirement. The Finance Board requirements set forth in the GLB Act. Requirement believes that such a change would be More importantly, as addressed more Proposed § 932.3 would have required inconsistent with the GLB Act. The term fully in the separate credit, market and each Bank to maintain at all times an ‘‘permanent capital’’ is specifically operations risk sections, the Finance amount of permanent capital equal to at defined by the statute to include ‘‘the Board believes that the approaches amounts paid for the [C]lass B stock; adopted for calculating individual risk- 7 A few commenters, also citing the effects of and the retained earnings of the [B]ank based charges are reasonable, given SFAS 133, urged the Finance Board to allow a (as determined in accordance with available information and the technical Bank’s required payments to the RefCorp and to the Affordable Housing Program (AHP) to be assessed generally accepted accounting capabilities of the Banks. Overall, the based on ‘‘economic earnings’’ rather than GAAP principles).’’ 12 U.S.C. 1426(a)(5)(A). As Finance Board believes that the risk- earnings. The Finance Board has also received a already addressed in this based capital charges will adequately request for a regulatory interpretation that seeks to SUPPLEMENTARY INFORMATION section in reflect the risks faced by the Banks. reduce the potential effects of SFAS 133 on earnings calculations used for certain regulatory the discussion of § 931.3, the Congress In addition, as discussed in the purposes. That request, which raises a number of has spoken definitively on these issues SUPPLEMENTARY INFORMATION section of concerns, including some similar to those discussed and the Finance Board is not at liberty the proposed rule, the Finance Board above with regard to calculating total capital, is to consider Class A as permanent considered all aspects of OFHEO’s now being reviewed by Finance Board staff. The issue of whether the Finance Board should capital. Also as previously discussed, proposed risk-based capital rule in authorize the Banks to calculate their RefCorp and the risk-based capital requirements for a developing the proposed rule, as well as AHP payments by using non-GAAP earnings was Bank may be satisfied only with in developing the final rule. The GLB not addressed in the proposed rule. The Finance permanent capital. 12 U.S.C. 1426(a)(3). Act requires the Finance Board to give Board, therefore, declines to implement any rule changes to address the RefCorp and AHP payments The totality of the GLB Act definitions due consideration to the OFHEO capital issue at this time. make it clear that Class A stock cannot rule in developing the market risk
VerDate 11
component of the risk-based capital charge applied to the associated amount for an off-balance sheet item, requirement for the Banks, but nothing unrealized gain that is carried on the multiplied by the appropriate credit risk in the GLB Act requires the Finance Bank’s balance sheet as an asset. percentage requirement. The credit risk Board to defer to the OFHEO regulation, Similarly, when calculating the market percentage requirements were provided either with regard to the market risk or risk charge using its approved internal in four tables. The methodology used in other components of this rule. See 65 FR model, a Bank will be expected to developing the tables was discussed in at 43426–27 (July 13, 2000); Am. Fed’n ‘‘stress’’ the value of the underlying the SUPPLEMENTARY INFORMATION section of Gov’t Employees v. Donovan, 1982 derivative contract or asset only. of the proposed rule. See 65 FR at WL 2167 *3 (D.D.C.) (the use of the Another commenter requested 43421–24. terms ‘‘due consideration’’ in the clarification of when and how ‘‘safety The Finance Board received a number Service Contract Act of 1965 ‘‘are much and soundness’’ concerns may prompt of comments about the credit risk more nearly precatory than mandatory the Finance Board to require a Bank capital requirement. Generally, the [and] have a procedural implication,’’ pursuant to § 932.3(b) to increase its commenters indicated that the proposed and do not mean ‘‘equivalent to’’). permanent capital above the minimum rule showed sophistication in the Neither does anything in the GLB Act levels mandated by § 932.3(a). The treatment of credit risk and offered require that the Finance Board’s risk- primary duty of the Finance Board is to much more detailed credit weightings based capital requirements result in the ensure that the Banks operate in a for various exposure classes, maturities same or similar risk-based charges for ‘‘financially safe and sound manner.’’ 12 and credit ratings than had ever been the Banks and for Fannie Mae or U.S.C. 1422a(a)(3)(A). The Bank Act has offered by other regulators. Commenters Freddie Mac. In fact, Congress long provided the Finance Board or its did, however, have a number of established a different risk-based capital predecessor agency the authority to take comments and concerns on specific stress test and different minimum actions to carry out that duty and other issues, which are discussed in detail capital levels for the Banks than it did responsibilities under the Bank Act. 12 below. for Fannie Mae and Freddie Mac.8 U.S.C. 1422b. Safety and soundness One general concern noted was that Compare 12 U.S.C. 1426(a)(2), (a)(3), to concerns can arise in numerous the proposed rule failed to capture the 12 U.S.C. 4611, 4612. Nevertheless, the circumstances and have to be addressed correlation between credit and market Finance Board does not believe that the on a case-by-case basis or for the Bank risk. Under the rule as proposed, the capital requirements adopted herein are System as a whole. Section 932.3(b) of Banks would have been required to inconsistent with those governing the final rule is consistent with the determine their credit and market risk Fannie Mae or Freddie Mac, after taking duties and authority of the Finance requirements separately based upon into account the differences in the Board under the Bank Act and will be different historical stress events. This relevant statutes and the businesses of implemented as is necessary and approach is equivalent to assuming that the three GSEs. See 65 FR at 43426. authorized to carry out those duties. the risks are highly and positively Some commenters requested Overall, however, it is highly unlikely correlated, because the historical stress clarification on certain aspects of the that the authority under § 932.3(b) will periods for each of the two risks are minimum risk-based capital be used, given the degree of oversight treated as if they coincide, regardless of requirement. One Bank urged the exercised by the Finance Board, the whether they do in fact coincide. The Finance Board to specify that, for ability of the Banks to make adjustments Finance Board believes that this purposes of the minimum risk-based in their capital plans, the Finance assumption is prudent. The Finance capital requirement of § 932.3(a), Board’s flexibility to make adjustments Board notes that there is research that unrealized gains recorded as assets on to the capital requirements, and the the correlation in stress events the Bank’s balance sheet should receive presence of backstop provisions in the (extremes) between market and credit a risk-weighting of zero because ‘‘any capital rule, such as the market value of risk is positive. See Mark Carey, risks associated with these balances is capital test in the market risk capital ‘‘Dimensions of Credit Risk and Their adequately covered by the [risk-based requirement. Nonetheless, § 932.2(b) of Relationship to Economic Capital capital] requirements for credit risk.’’ the final rule is an additional safeguard Requirements, to be published in The minimum risk-based capital charge against unanticipated events that could Prudential Supervision: What Works, set forth at § 932.3 as adopted is the sum result in anticipated or actual and What Doesn’t, Frederic S. Mishkin, of a Bank’s credit, market and impairment of a Bank’s capital. ed. (NBER and UC Press, 2001). As the operations risk charges calculated in Examples of such events could include commenters noted, this approach accordance § 932.4, § 932.5 and § 932.6. a Bank’s risk profile evolving in such a ensures that any estimation bias Contrary to the commenter’s request, way that it is not adequately addressed associated with overstating the § 932.3 does not require a charge by the then-current capital correlation of credit and market risk independent of these components and requirements, or a Bank’s capital plan during stress periods will result in does not directly assign risk weights to failing to meet expectations and capital charges that are conservative assets. However, by way of clarification, generate sufficient capital given the rather than deficient. From a safety and the credit risk capital charge that will be risks faced by the Bank. soundness perspective, the Finance calculated under § 932.4, as adopted Board believes this conservative Section 932.4—Credit Risk Capital approach is reasonable at this time and herein, will apply to the underlying Requirement derivative contract or asset, and there is consistent with the OFHEO proposed General. Proposed § 932.4 set forth a 9 will be no additional credit risk capital rule on risk-based capital. Further, general formula for calculating the although a joint estimation of the credit 8 For example, the GLB Act requires that the credit risk capital charge for on-balance and market risk requirements would Finance Board develop a stress test that rigorously sheet assets and off-balance sheet items, seem more appealing theoretically in tests for changes in interest rates, interest rate including derivative contracts, held in a volatility and changes in the shape of the yield Bank’s portfolio. For an asset or item, 9 Because the OFHEO model examines both an curve, while the statutory requirements governing the credit risk capital charge would upward and downward interest-rate shock, but with Fannie Mae and Freddie Mac set forth specific each subject to the same benchmark credit loss scenarios for downward and upward shocks in have been equal to the book value of the scenario, one of the two interest-rate shocks must interest rates. asset or the credit risk equivalent be positively correlated with the credit risk losses.
VerDate 11
that the correlation between credit and the Banks’ balance sheets.10 The would be zero. However, recognizing market risk can be better measured, as Finance Board has adopted § 932.4 of that advances are not totally risk free, a a practical matter, joint estimation the final rule with the changes minimum capital requirement of seven during stress periods is, for now, discussed below. basis points was set to ensure that the untested and more challenging Table 1.1. The credit risk percentage Banks would hold sufficient capital, analytically, and would not provide a requirements for Bank advances in the particularly in view of the GLB Act’s technically sound basis for estimating proposed rule were based on the general recent amendments to the Bank Act capital charges at this time. Thus, the methodology used to set credit risk which expanded the types of collateral Finance Board believes that the percentage requirements for credit available to support advances. See 12 conservative approach of the proposed exposures of rated assets, off-balance U.S.C. 1430(a)(3); 65 FR 44414 (July 18, rule best assures that the Banks will sheet items or derivative contracts other 2000). Further, as calculated for the remain adequately capitalized and will than advances and residential mortgages proposed rule, the requirement for continue to operate in a safe and sound (Table 1.3). As discussed in more detail maturities greater than 10 years would manner throughout periods of future in the discussion of Table 1.3 below, the have been 50 basis points. However, market stress. general methodology was based on the because the estimated capital charge for Another commenter stated that the highest estimated (proportional) credit triple-A-rated residential mortgage Finance Board did not provide in the losses by rating category and maturity assets (as presented in proposed Table proposed rule sufficient detail of the class observable over a two-year period 1.2) was less than 50 basis points, and parameters for internal credit models, during the interval 1970 to 1999. because advances clearly have a better which models, the commenter believed, Several adjustments were made to the credit loss history than residential will be heavily relied upon by the general methodology in setting the mortgages, advances with a remaining Banks. However, neither the proposed credit risk percentage requirements for maturity of greater than 10 years were rule nor the final rule allow a Bank to advances. The general methodology was assigned a credit risk percentage calculate its credit risk capital based on default and downgrade data on requirement equivalent to the requirement using an internal credit risk corporate bonds. For advances, only requirement for triple-A-rated model. In two narrow circumstances, default data was used. Downgrade data residential mortgage assets. In the final the rule, both as proposed and adopted, really has no meaning because advances rule, the requirement for advances with allows a Bank to use an internal model are fully collateralized and the Banks remaining maturities greater than 10 to calculate the potential future credit can require additional collateral at any years was adjusted to reflect the revised exposure (PFE) on a derivative contract time. Because the Banks have never methodology used to calculate credit or the credit equivalent amount on incurred credit losses on their advances risk requirement percentages for certain off-balance sheet items as an to a member, the Finance Board residential mortgage assets for Table 1.2. assumed, for purposes of establishing a alternative to using the tables and and is set at 35 basis points. The credit default rate for advances, that advances formulas provided in the rule for risk percentage requirement of 20 basis would exhibit the same default patterns estimating those values. In both cases, points for remaining maturities greater as the highest investment grade (triple- the Finance Board would review the than 4 years up to 7 years was based on A) corporate bonds and that advances models and the assumptions before actual default rates and remains the would have a recovery rate of 90 percent allowing a Bank to employ the model. same in the final rule. For maturities of (i.e., a loss severity rate of 10 percent). Moreover, neither the derivative greater than 7 years up to 10 years, the A 90 percent recovery rate was contracts nor the off-balance sheet items credit risk percentage requirement, if considered consistent with the over- in question represent a large amount of based on actual default rates, would collateralization and other protections the Banks’ balance sheets. have been 40 basis points. In the final afforded advances. A credit risk horizon rule, however, the credit risk percentage Based on the comments received, the equal to the remaining maturity of the Finance Board made a number of requirement was reduced to 30 basis advance was deemed more appropriate points to conform with the 35 basis changes to the credit risk capital than imposing the maximum two-year requirement in the final rule. These point requirement for maturities greater horizon used in the general than 10 years. changes, which are discussed in detail methodology, because advances are In the proposed rule, the Finance below, include refinements to the unique products of the Banks that Board specifically requested comment methodologies used in estimating the cannot readily be sold in the on the methodology that should be used credit risk percentage requirements for marketplace like most of the other for setting the credit risk percentage Table 1.1, Table 1.2, and Table 1.3. The investments of the Banks and, therefore, requirements for advances and whether Finance Board also has changed in the would have to remain on the books until a more satisfactory analytical framework final rule the method used to calculate maturity. The probability of default was exists that could be used to determine the credit risk charge for derivative then measured as the maximum more appropriate credit risk percentage contracts and expanded the situations in probability of a triple-A corporate issuer requirements for advances. which the Bank may reduce its capital default, but over a period extending to The Finance Board received several charge for an asset hedged with a credit the maturity of the advance. comments on the proposed credit risk derivative. As explained below, while Adjustments also were made to the percentage requirements for advances. the Finance Board believes that the new credit risk percentage requirements One commenter was supportive of method adopted for calculating the assigned to the shortest and longest treating advances independently of credit risk capital charge for derivatives remaining maturity classes. As underlying collateral; another stated better captures the true risk of the calculated, the requirement for advances that the less-than-four-year maturity Banks’ exposure to these instruments, with a maturity of four years or less advance percentage requirement was the Finance Board does not believe that reasonable. However, commenters the change will have much practical 10 As of December 31, 1999, the Banks’ combined generally questioned whether the effect on the level of the credit risk maximum credit exposure to derivative contracts Finance Board had given adequate capital requirement because derivative was approximately $2 billion. This was a small amount compared to the Banks’ assets of $633 consideration to the nature of member contracts represent a very small part of billion or their capital of $30 billion. borrowers, the strong collateral position
VerDate 11
of the Banks and the additional security This view is based upon, among other been extremely infrequent and that provided by the capital stock for things, the fact that advances are well there have been proportionately fewer advances in developing the credit risk collateralized and are provided downgrades on RMBS than on percentage requirements for advances. additional safeguards under the Bank otherwise similar corporate bonds. The Two Banks commented on a possible Act. Further, as is addressed in greater magnitude of the difference in credit alternative analytical framework, which detail in the discussion of Table 1.2, the performance appeared relevant, even was suggested by a consultant to the Finance Board has considered available given the short history of the RMBS Banks that could be used to derive the mortgage data in developing the credit market. credit risk percentage requirements for risk percentage requirements for The Finance Board also found that the advances. The consultant reviewed residential mortgage assets other than factors that affect rated RMBS are not rating agency data and concluded that advances. Because this new approach typical of those that affect the credit financial institution default rates are lowered the credit risk percentage quality of corporate bonds. Factors that roughly 30 percent to 40 percent of requirements for these residential appear to generally benefit the credit corporate bond default rates. The mortgages assets, the credit risk quality of rated RMBS include: The consultant further reasoned that because percentage requirements for advances relative stability of home prices; the Bank members are regulated financial with remaining maturities in the diversification in the underlying institutions, and not corporate categories of more-than-seven-years-to- collateral; and the relatively predictable borrowers, default rates based on ten-years and over-ten-years in Table 1.1 performance of the collateral pools. The corporate borrowers were overstated. also have been lowered so that the Finance Board found these arguments Additionally, the Banks believed that credit risk percentage requirements for persuasive and, as explained more fully using recovery rates of 90 percent advances remain below the below, has applied in the final rule a understates the value of collateral requirements for other residential different basis on which to determine pledged to support advances, which mortgage assets. Thus, the final rule the capital charges for residential when properly accounted for on an continues to recognize that advances mortgage assets. estimated market value approach, have less credit risk than other mortgage Commenters also expressed the view would yield a value in excess of the assets. that the capital charges in the proposed underlying advances. One Bank Further, the Finance Board does not rule for BBB and lower rated residential suggested that the Finance Board believe that it will be realistic to mortgage assets exceeded the risk of consider requiring that collateral eliminate credit risk charges for these assets, some noting that bank and portfolios be further subjected to stress advances, as some commenters have thrift depositories are only required to testing as an alternative input into the urged. Given that advances are a large hold four percent risk based capital credit risk percentage requirement part of the Banks’ total assets, the credit against unenhanced residential calculations for credit exposures arising risk capital requirement—and the risk- mortgages. The Finance Board generally from advances. The Bank also argued based capital requirements more took this view into account in that the proposed rule did not take generally—would not be credible if risk- developing a new basis for determining account of the fact that by statute, the based capital were not held against the the capital charges in the final rule, but capital stock investment of a member credit risk of advances. Nor have the notes that Banks are only allowed to acts as additional security for advances. commenters provided enough invest in investment grade assets and The Bank believed that recognition of information on other suggested therefore the capital charges in the the collateral and capital values approaches for estimating the credit risk proposed rule for residential mortgage available to the Banks should reduce the percentage requirements for the Finance assets rated below investment grade credit risk from advances to zero. The Board to implement these would have applied only if the assets Bank further stated that from a safety methodologies at this time. The Finance were downgraded. The Finance Board and soundness perspective, the Finance Board believes that the credit risk also adopted in the final rule a lower Board and the Banks themselves should percentage requirements adopted in but still stringent credit risk percentage be more concerned with the adequacy of Table 1.1 recognize the unique requirement for residential mortgage collateral methods and practices than in characteristics of advances while, given assets rated below B. This final credit trying to determine a capital current available information, still risk percentage requirement still requirement from inappropriate provide a conservative estimation of the accounts for the fact that these assets statistics. The Bank asserted that risks presented by these assets. The may only reside on the books of the mortgage data, which is available and Finance Board will consider amending Banks as a result of being downgraded frequently analyzed, should be the basis its current methodology as better from investment grade and are for determining credit exposures from information and theoretical approaches presumed to have some material credit secured advances. become available. quality issue. The Finance Board has considered all Table 1.2. The credit risk percentage The Finance Board also recognizes comments and believes that the requirements in the proposed rule for that some of the concern with the credit methodology, described above, used to residential mortgage assets were based risk percentage requirements for lower- determine credit risk percentage on a quantitative analysis of the default rated mortgage assets may have been requirements for advances does and downgrade experience of rated prompted by a lack of clarity in the adequately consider the unique corporate bonds. However, the Finance proposed rule. The proposed rule did characteristics of advances. The fact that Board received comments expressing not make clear that the credit risk the credit risk percentage requirements the view that the credit quality of rated percentage requirements would be for advances set forth in Table 1.1 of the residential mortgage backed instruments assigned for AMA based on the credit final rule are lower than those for other (RMBS) is generally better than rating after application of the credit residential mortgage assets set forth in corporate bonds with similar ratings and enhancement required under the Table 1.2 of the final rule demonstrates tenor. The Finance Board, therefore, Finance Board rules or application of that the Finance Board explicitly reviewed available information on rated any additional enhancements obtained recognizes that advances have less RMBS downgrades and defaults. This by the Bank. Section 932.4(e)(2)(ii)(E) credit risk than other mortgage assets. information indicated that defaults have has been added to the final rule to
VerDate 11
clarify this point. The final rule assumes a conservative benchmark relative to the performing, well diversified, prime- the adequacy of the credit enhancement residential mortgage assets covered by quality, conforming residential mortgage provided by members under the AMA Table 1.2 of the final rule. loan pools. requirements, and no credit risk capital In contrast with the residential loan The Finance Board also has decided charge need be applied to any potential portfolio risk-based requirement, to use the general rating scheme and exposures arising from these member- commercial banks and thrifts are only certain aspects of the RMBS rating provided credit enhancements. The required to hold 1.6 percent risk-based process to determine the credit risk Finance Board may, however, require a capital for GSE-issued MBS. The fact percentage requirements for residential Bank to apply a credit risk capital that many banks and thrift originators mortgage assets. The Finance Board has charge to any credit enhancement do not take advantage of this ability to found that the RMBS rating process obtained by a Bank for AMA beyond transfer virtually all of their credit employs useful standards for that required under § 955.3(b) if the exposure on conforming loans to Fannie understanding the relative risk of Finance Board believes that there are Mae and Freddie Mac may indicate that residential mortgage pools. The rating deficiencies associated with those the banks and thrifts view the 2.4 process generally relies upon additional enhancements. percentage point credit risk differential parameters for foreclosures and losses While the final rule no longer relies as larger than the actual difference in on residential mortgages under various upon quantitative data on the credit the credit exposure between conforming economic stress scenarios. The rating performance of rated corporate bonds as loan pools and GSE MBS. process is typically systematic and an indicator of the credit risk on The Finance Board also reviewed appears to be based on a comprehensive mortgage assets, the Finance Board was information regarding the credit review of information bearing on unable to identify any adequate similar enhancement required to raise residential mortgage credit losses. quantitative data to substitute for rated unenhanced loan pools to the highest Moreover, the Finance Board has found RMBS to conduct a similar analysis. The credit rating as an indication of the that the rating process for RMBS has data is not readily available and, capital charge for unenhanced loan relatively wide acceptance in the debt because of the brief history of the RMBS pools. For example, whole loan RMBS market, among secondary market market, such data as could be found typically have AAA credit enhancement participants and with mortgage insurers. would not provide a robust information requirements ranging from four percent The Finance Board was informed that, source regarding periods of economic to seven percent. However, this may be during stable, moderately favorable stress. The Finance Board, therefore, has a conservative indicator relative to the economic conditions, the unenhanced adopted in a final rule a significantly assets covered by this rule because whole loan pools underlying RMBS different approach than that employed many whole loan RMBS have non- could be considered to have credit in the proposed rule—one that is conforming collateral due to loan size or quality in a range between BB and CCC. necessarily less mechanical in applying credit issues, or the loans are adjustable The Finance Board believes that, in historical credit losses and one that rate mortgages (ARMs) or the collateral general, prime-quality, conforming loan considers the practices of other may have some element of geographic pools typically should have more regulators and market participants. concentration. These factors are favorable credit quality than RMBS More specifically, the credit risk associated with higher loss experience. whole-loan pools. Given this, the percentage requirements set forth in In contrast to whole loan RMBS, the Finance Board has decided that, for Table 1.2 of the final rule are based on Finance Board has observed that the purposes of the final rule, well- an approach that considers: (1) The risk- AAA credit enhancement requirement diversified conforming loan pools based capital charges employed by on many Bank AMA pools falls below should be considered to have an regulated banks and thrifts for 4 percent. exposure benchmark similar to a BB residential mortgage loan portfolios and The Finance Board also noted the 0.45 rating. for agency mortgage-backed securities percent statutorily-based minimum Based on the assumptions that well- (MBS); (2) the minimum MBS capital capital requirement for Fannie Mae and diversified, prime-quality, conforming charges for Fannie Mae and Freddie Freddie Mac MBS guarantees on residential mortgage loan pools have a Mac; and (3) the capital charges conforming loans. This requirement on credit risk percentage requirement of 2.4 implicitly employed by the nationally loans with no credit support is less than percent, and that such pools may be recognized statistical rating the Finance Board’s credit risk assumed to have credit quality similar organizations (NRSRO) when rating percentage requirement for all but the to a BB-rated mortgage asset, the RMBS and mortgage insurance highest rated mortgage asset. However, Finance Board has used the relative companies. The Finance Board also comparison between the OFHEO and credit support required by the RMBS drew from the NRSRO’s approach for the Finance Board requirements is rating process to assign the credit determining the charges for the different difficult because of the different risk- charges for the other rating categories. rating categories in developing Table 1.2 based approaches of the two regulators. Using this approach, the credit risk of the final rule. Moreover, the OFHEO requirement may percentage requirements are derived The capital required for performing not be indicative of a true risk-based based on the relative amount of credit residential mortgage loans varies charge. The 0.45 percent requirement is support that is generally provided for widely. Commercial banks and thrifts part of the statutory minimum total the different rating grades as a are required to hold 4 percent risk-based capital requirement for Fannie Mae and percentage of the BB benchmark. capital against these loans. This Freddie Mac. 12 U.S.C. 4612(a). In this Table 1.2 of the final rule presents the requirement was enacted after the respect, it is more comparable to the credit risk percentage requirements for severe residential mortgage credit minimum total capital leverage FHLBanks’ residential mortgage-related problems of the 1980s. Also, it is requirements of the GLB Act than a risk- exposures. The credit risk percentage applied uniformly to well-diversified, based charge. Based on the foregoing, requirements presented in the final rule conforming loan portfolios and to the the Finance Board has decided to adopt are based on the assumption that often riskier, non-diversified and non- in the final rule a benchmark exposure, residential mortgage assets will conforming portfolios. As such, the 4 and therefore a credit risk percentage typically consist of conforming, prime- percent requirement may be viewed as requirement, of 2.4 percent for quality loans with loan-to-value (LTV)
VerDate 11
ratios below 80 percent or loans with over a two-year period during the market place as well as by other higher LTV ratios that have appropriate interval 1970 to 1999. The Finance regulators. Of course, not all assets are levels of mortgage insurance. The Board received only one comment on rated by NRSROs, but most Bank Finance Board further assumes that the the methodology described in the investments either are rated by an performance of any credit enhancement proposed rule used to arrive at the NRSRO or can be evaluated internally is assured in all relevant economic requirements listed in Table 1.3. That and assigned a credit rating using stress scenarios, and that the Banks’ commenter identified two concerns. models or other methods consistent portfolios of residential mortgage assets First, only 30 years of performance data with the rating methodologies used by will have appropriate diversification, were used, whereas 80 years of NRSROs. In keeping with the standards and will not have geographic or other performance data are available. Second, established by NRSROs,11 the following concentration factors that increase and more importantly, single-year rating categories were used in the base credit risk. Finally, the credit risk maximum default rates rather than long- analysis: percentage requirements for mortgage run average default rates were used. The • AAA Highest investment grade. assets adopted in the final rule take into commenter added that the single-year • AA Second highest investment account that the Banks are required to maximum approach would identify grade. invest in mortgage-backed assets that maximum default rates based on outlier • A Third highest investment grade. have credit quality no less than that of results, hence the resulting rates need • BBB Fourth highest investment the fourth highest credit rating class. not be representative of the true relative grade. A uniform application of the standard differences in proportionate market • BB Highest below investment adopted in the final rule, however, value losses by rating class—the goal of grade. • would fail to address the fact that the a ratings-based approach. B Second highest below credit risk of pooled residential The Finance Board continues to investment grade. mortgages may be concentrated in believe that the most recent 30 years of • CCC–C Substantial risk of default. subordinated classes and support Moody’s data includes a sufficient Credit ratings do not, however, reflect tranches. Support classes may also have number of observations that are how the credit risk of a rated asset might longer weighted average lives than the representative of the modern era. The vary according to its remaining senior classes they support. To address Finance Board does see some merit in maturity. For example, actual data this concern, the Finance Board adopted the single-year (actually a two-year indicate that the credit risk of a AA- a more stringent capital standard for period is presented in the proposed rule rated asset with a one-year maturity is such asset classes. It was further but the point is the same) versus long- clearly less than that of an AA-rated observed that AAA and AA classes were run average concern. Not all of the asset with a 10-year maturity. In fact, much less likely to feel the effect of changes recommended in this comment other financial regulators have begun to subordination. For these reasons, it was have been adopted in the final rule recognize the term structure of credit determined that, for subordinated because basing requirements only on risk in their risk-based capital residential mortgage assets below AA, long-run averages would result in too requirements.12 Consequently, each of the credit risk percentage requirements little capital being available to support the 7 credit rating grades was expanded should be the same as those for Rated credit risk during periods of economic to reflect 14 different remaining Assets or Rated Items Other Than stress. However, the methodology for maturity classes resulting in 98 credit Advances or Residential Mortgage the final rule has been modified to risk categories overall. The maturity Assets in the 3 to 7 year maturity class eliminate the single-year concern, thus classes were selected to show how of Table 1.3 of the final rule. Table 1.2 preserving the true differences in significantly credit risk percentage of the final rule has been modified to proportionate market value losses by requirements might change given add specific credit risk percentage rating class, while retaining a capital modest changes in remaining maturity. requirements for these subordinated requirement sufficient to support credit They also capture the entire term classes and support tranches of risk during periods of economic stress. structure of credit spreads, but primarily residential mortgage assets. Under the modified approach, the long- include maturities for which data is The above-described approach best run average default and downgrade rate more readily available because there is accommodates the information now of each rating category/maturity class is sufficient trading activity. The available to the Finance Board. multiplied by a factor that represents an remaining maturities used were six and However, the Finance Board will average (over rating category and nine months, and 1, 1.5, 2, 3, 4, 5, 7, 10, continue to gather and analyze data on maturity class) of stress-period increases 15, 20, 25, and 30 years. the performance of residential mortgage in those rates. This method of For each of the 98 credit risk loan pools and RMBS, and intends to determining the credit risk percentage categories, credit losses from defaults amend these capital charges if more requirements in the final rule is and downgrades were determined as a complete and representative described in detail below, and resulted proportion of face value for each two- information and analysis becomes in modest changes in both directions to year horizon between 1970 and 1999. available. the proposed credit risk percentage Furthermore, to simplify the analysis, Table 1.3. In the proposed rule, the requirements. beginning dates for each horizon were credit risk percentage requirements in Two factors were considered in Table 1.3 for credit exposures of rated selecting credit risk categories for assets 11 Each category used by the NRSROs has assets, off-balance sheet items or on which to impose distinct credit risk modifiers, either plus and minus or 1, 2 or 3. derivative contracts other than advances capital requirements in percentage However, the derivation of credit risk percentage requirements described here does not take such and residential mortgages were terms: an objective measure of the credit modifiers into consideration because consideration calculated from Moody’s data on risk of the asset, and the term structure, of modifiers would triple the number of credit risk corporate bond performance. or maturity, of the asset. The credit categories and significantly reduce the historical Specifically, the requirements were ratings assigned by NRSROs were used time period for which data on defaults and credit downgrades is available. To achieve more robust based on the highest estimated as an objective standard upon which to estimates of actual credit losses by category, the (proportional) credit losses by rating categorize assets by credit risk. Such modifiers are ignored. category and maturity class observable ratings are generally accepted in the 12 See 65 FR at 43421.
VerDate 11
limited to the first day of each month in recovery rate (based on market prices) endpoints, such that the 3 year loss rates the sample period. Thus, the first for bonds in default has been observed were included in the averaging to arrive historical period covered January 1, as low as 21 percent and 30 percent in at the 1 to 3 year and 3 to7 year maturity 1970 through December 31, 1971, the 1932 and 1990, respectively, class loss rates. Loss rate means, second historical period covered corresponding to peaks in corporate distributions, and maximum values February 1, 1970 through January 31, default activity.15 Furthermore, the were then calculated for each of the 30 1972, etc., and the last extended from average recovery rate for senior remaining credit risk categories (five January 1, 1998 through December 31, unsecured public debt was $51.31 per maturity classes for each of the top 6 1999, for a total of 336 periods $100 defaulted face value with a credit ratings). The loss rate examined for each credit risk category. standard deviation of 26.30 percent distributions were not normally A two-year historical period horizon during the 1977–98 period. distributed. In addition, no isolated is a more conservative assumption than Credit losses associated with observations that could be considered the one-year horizon, which is perhaps downgrades were determined based on outliers were observed. Consequently, a more commonly assumed by approximations of the proportionate common stress level of loss rates was commercial banks. As stated by the difference between the initial market determined by averaging (for the 30 Federal Reserve System Task Force on value (corresponding to the initial credit credit risk categories) the distance from Internal Credit Risk Models, ‘‘[I]t is rating) and the market value subsequent the mean of the maximum loss rate often suggested that one year represents to the downgrade. These divided by the standard deviation. The a reasonable interval over which a approximations were derived from the common stress level estimate was 3.22. bank—in the normal course of maximum loss in market value The credit risk percentage requirements business—could mitigate its credit associated with downgrades, by credit for Table 1.3 were then determined for exposures.’’ 13 Also, according to a rating category, observed in data each of the 30 credit risk categories as survey conducted by the BCBS, most of covering 1992–2000. Pre-1992 data were equal to the corresponding mean loss the responding commercial banks used not available. For example, the rate plus 3.22 times the corresponding a one-year horizon for calculating maximum shift in credit spread for a 10- standard deviation. These percentage economic capital for credit risk in the year bond from AAA to AA was requirements, as they appear in Table 14 banking book. Nonetheless, the survey observed to be 29 basis points over the 1.3 in the final rule, have been rounded did provide some support for a longer period 1992–2000. Similarly, the shifts to the nearest 5 hundredths, or, if below historical period horizon. For example, from AA to A, and A to BBB, were 57 investment grade, to the nearest whole some responding banks used a five-year and 70 basis points, respectively. Shifts percent. horizon or modeled losses over the of more than one credit rating within a maturity of the exposure. In addition, period, such as from AAA to A, were Table 1.4. The proposed rule set forth based on experience in the U.S. and derived as the sum of the corresponding credit risk percentage requirements for elsewhere, more than one year is often single rating shifts, or in this case the certain unrated assets in Table 1.4. needed to resolve asset-quality problems sum of the shift in spreads from AAA These assets, which included cash, at troubled banks. Therefore, the to AA and AA to A, or 86 basis points. premises, plant and equipment, and Finance Board believes that the two- For downgrades to CCC–C rating certain debt and equity investments, year horizon would better assure that categories, a loss in market value of 100 had no relevant loss experience from adequate capital is maintained against percent was assumed based on the which to calculate a credit risk the credit risks faced by the Banks than historical evidence that, over a specific percentage requirement. In the proposed would a shorter time horizon. three-month horizon, all of the U.S.- rule, cash was assigned a credit risk All historical data on defaults and based issuers rated CCC–C in the percentage requirement of zero percent, downgrades were obtained from Moody’s database actually did default.16 as it was deemed not to present any Moody’s Default Risk Service. The For each of the 336 periods examined credit risk to the Bank. All of a Bank’s Moody’s database contains information for each of the 98 credit risk categories, tangible assets, premises, plant and on defaults, rating downgrades and losses generated by downgrades and equipment, as well as any unrated debt market prices for bonds in default, i.e., defaults were added to gains from or equity investments made by the recovery rates, that span multiple credit ratings increases (determined in a like Banks pursuant to § 940.3(e) and (f),17 cycles from 1970 to the present and manner to losses from downgrades) to were assigned an eight percent credit covers over 8,000 corporate issuers, determine a change in value. Each risk percentage requirement. See 65 FR 66,000 corporate bonds, 196,000 ratings change in value was then divided by the at 43423–24. As described below, the actions, and 1,200 defaulted bonds. The corresponding face value to arrive at a Finance Board received a few comments data set was restricted to U.S.-based loss rate. The resulting loss rates were on proposed Table 1.4 but has not entities, because the Banks are not aggregated to reduce the number of revised the table in the final rule. permitted to invest in instruments maturity classes from 14 to 5. issued by non-U.S. entities, except U.S. Specifically, for each credit rating, 17 Table 1.4 of the proposed rule made a reference branches and agency offices of foreign maturity classes of less than or equal to to unrated, targeted investments made under 1 year, more than 1 year to 3 years, more § 940.3(a)(5) of the Finance Board’s regulations. banks. This reference was based on the types of targeted Credit losses associated with defaults than 3 years to 7 years, more than 7 investments proposed in § 940.3. See 65 FR 25676 were assumed to be 100 percent of the years to 10 years, and over 10 years (May 3, 2000.) The Finance Board, when it adopted issues’ face value. According to a study were created. The loss rates were § 940.3 in final rule form, listed the relevant of defaults by Moody’s, the average aggregated in the maturity classes by targeted investments in § 940.3(e), and altered the provision somewhat. See 65 FR 43969, 43972–74, simple averaging with overlapping 43981 (July 17, 2000). Table 1.4 of this final rule 13 See ‘‘Credit Risk Models at Major U.S. Banking has been corrected to conform its reference to the Institutions: Current State of the Art and 15 See ‘‘Historical Default Rates of Corporate Bond relevant targeted investments to the final version of Implications for Assessment of Capital Adequacy,’’ Issuers, 1920–1998,’’ Moody’s Investors Service, § 940.3 adopted by the Finance Board and to Federal Reserve System Task Force on Internal January 1999. include unrated investments in Small Business Credit Risk Models, May 1998, p. 10. 16 Based on Moody’s Default Risk Service Investment Companies (SBICs) as set forth in 14 See ‘‘Credit Risk Modeling: Current Practices database, all issuers rated CCC–C defaulted between § 940.3(f) which were inadvertently omitted from and Applications’’, BCBS, April 1999. March 1, 1984 and May 31, 1984. the proposed rule.
VerDate 11
One commenter expressed concern any risk to the safety and soundness of corresponding to the remaining maturity that the credit risk percentage the System, but would greatly encourage of the derivative contract and the credit requirement for unrated assets made by the Banks to make and become rating of the counterparty. This the Banks would discourage certain new comfortable with targeted investments. proposed approach was adopted programs that have been initiated by the The commenter’s second approach to directly from the Finance Board’s Banks, such as programs to purchase overcome concerns about whether the FMMA proposed rulemaking. 64 FR portions of loans for community Banks would make targeted investments 52163 (September 27, 1999). The economic projects or to fund given an 8 percent credit risk percentage FMMA, however, did not consider the community development. The requirement was that the Finance Board term structure of credit risk when commenter believed that the Banks permit a much lower capital calculating credit risk capital charges. would have been required to hold requirement for senior debt investments Because § 932.4 of the final rule does capital dollar-for-dollar for such in community development funds that consider the term structure of credit investments. However, under both the raise at least a dollar of equity for every risk, the Finance Board has adopted an proposed and the final rule, the Banks two dollars of such investments. approach to calculating the credit risk are required to hold only 8 percent According to the commenter, the capital charge for derivative contracts capital for targeted investments made community development entity could that recognizes the term structure of pursuant to § 940.3(e) of the Finance use the proceeds of the Bank credit risk. Board’s regulations. 12 CFR 940.3(e). investments to finance activities eligible Under § 932.4(d) of the final rule, the These investments appear to include the under § 940.3(e)(3), and the structure credit risk capital charge for a derivative investments described by the would be similar to that for SBICs. The contract will be the sum of two commenter.18 The 8 percent credit risk commenter posited that the community components. The first component will percentage requirement for targeted development fund would have to lose equal the product of the current credit investments made under § 940.3(e) is its entire equity stake before the Bank’s exposure of the derivative contract consistent with the capital requirements senior debt investment would be multiplied by the applicable credit risk applicable to national banks with regard jeopardized, so that a much smaller risk- percentage requirement for the to public welfare investments. The based capital requirement would be derivative instrument. However, in targeted investments included in Table justified. assigning the correct credit risk 1.4 would be certain debt or equity The Finance Board believes that the percentage requirement, the current investments that advance specific fact that targeted investments are credit exposure will be assumed to have public welfare goals. See 65 FR 43969, included as Core Mission Activities will a maturity of less than one year, 43972–74 (July 17, 2000). In general, serve as adequate encouragement for the regardless of the actual remaining under the final version of the capital Banks to make such investments, maturity of the derivative contract. This rule, the Banks are required to hold 100 regardless of the credit risk capital approach is consistent with the fact that percent capital only when rated charges. See 12 CFR part 940. Further, the current credit exposure of a investments or residential mortgage the Finance Board believes that it is derivative contract represents the assets are downgraded to below single- imperative to the safety and soundness current market value of the derivative B after the Bank has purchased the of the Bank System that the Banks hold contract, and that the value will investment. sufficient capital to cover the risks of generally change over the short term. Another commenter expressed permissible investments. As discussed The Finance Board believes that it is concern that the proposed capital above, the 8 percent credit risk reasonable, therefore, to treat the current requirement of 8 percent for percentage requirement for targeted credit exposure on a derivative contract investments made under § 940.3(e) of investments made under § 940.3(e) is as a short-term exposure. the Finance Board’s regulations could consistent with the capital requirements The second component of the credit greatly discourage the Banks from applicable to national banks with regard risk capital charge for a derivative making these innovative, mission- to public welfare investments. The contract will equal the product of the oriented investments. The commenter targeted investments included in Table PFE for a derivative contract multiplied believes that the 8 percent requirement 1.4 would be certain debt or equity by the assigned credit risk percentage for such investments relative to the investments that advance specific requirement. For purposes of calculating capital requirement of only 0.35 percent public welfare goals. the capital charge on the PFE, the credit for long-term advances may cause the Derivative contracts. As already risk percentage requirement under the Banks to consider making these discussed, the final rule has been final rule will be assigned based on the investments prohibitive. The changed to reflect the fact that remaining maturity of the derivative commenter suggested two approaches implementation of SFAS 133 means that contract and the credit rating of the for remedying this concern. First, the derivative contracts cannot solely be counterparty. This approach is commenter suggested that the Finance described as off-balance sheet items. consistent with the fact that the PFE Board permit each Bank to hold a More importantly, however, and for represents the highest future market substantially lower level of capital for a reasons unrelated to SFAS 133, the value that the derivative contract may limited volume or range of targeted method of calculating the credit risk attain during its remaining life. investments. The commenter believed capital charge and assigning the credit Although the highest future market that a modest volume of from $200 risk percentage requirements for value for a derivative contract rarely million to $300 million would not pose derivative contracts has been changed, will occur at the end of the derivative as discussed below. contract’s life, the Finance Board is 18 Moreover, if the commenter intended to Under the proposed rule, the credit adopting a conservative approach to describe investments that were not included in risk capital charge for a derivative estimating the credit risk capital charge § 940.3(e) and (f), the Finance Board does not contract would have been calculated by and is assuming that it will occur at the believe, based on its understanding of the comment, adding the current credit exposure to end of the life of the derivative contract. that the Banks would have authority to make such investments because the Banks are not generally the PFE and then multiplying that sum Thus, the credit risk percentage allowed to invest in assets that are rated below by the credit risk percentage requirement applied to the PFE of a investment grade. requirement from Table 1.3 derivative contract will correspond to
VerDate 11
the remaining maturity of the derivative which are discussed in more detail into a derivative contract by multipliers contract. below. Collateral cannot be used to or other means and therefore provides a The proposed rule also did not reduce the credit risk capital charge more accurate basis for calculating a differentiate between a derivative calculated for a derivative contract’s Bank’s credit exposure under a contract entered into with a PFE. This approach is consistent with derivative contract.21 counterparty that was a member of the the fact that the Banks and derivative Further, a change in the final rule has Bank, and one entered into with a dealers more generally hold collateral been made with regard to the credit counterparty that was not a member of against the current credit exposure and conversion factor from Table 3 that the Bank. In the final rule, however, the not against the PFE. would be applied in order to calculate Finance Board has determined to treat The final rule also contains a the PFE of a credit derivative. Under the the credit exposure arising from a technical change to clarify how the proposed rule, the credit conversion derivative contract with a member calculation of the net PFE for derivative factor used for interest rate contracts institution like an advance, because the contracts subject to a qualifying bilateral would have also been applied to Banks generally apply the same netting agreement should be applied 20 calculate the PFE on credit derivative collateral requirements to these Under the proposed rule, one net PFE contracts. The Federal Reserve System exposures, and the legal rights with value would have been calculated for all (Federal Reserve), however, applies regard to the collateral are comparable the derivative contracts subject to the factors applicable to equity or other to those with regard to the collateral for same qualifying bilateral netting commodity contracts when calculating advances. See e.g., 12 U.S.C. 1430(e) agreement, even though those contracts the PFE for credit derivatives. See SR (1994). Thus, the credit risk from the all may have had different remaining 97–18 (Gen.), Division of Banking derivative contract should be similar to maturities. The proposed rule failed to Supervision and Regulations, Board of that from an advance. Under direct how this single, net sum could be Governors of the Federal Reserve § 932.4(d)(2) of the final rule, the credit allocated among the different contracts System (June 13, 1997). In effect, the risk capital charge for derivative when assigning the credit risk Federal Reserve is treating the credit contracts entered into between a Bank percentage requirement from Table 1.3 derivative contracts as riskier and one of its member institutions will (which would have been assigned based instruments than did the Finance Board be calculated as the sum of the credit in part on remaining maturity of the in the proposed rule. Given the risk capital charges on the current credit derivative contracts) and calculating the conservative approach taken by the exposure and the PFE, as described credit risk capital charges. The Finance Finance Board in developing these above, except that the applicable credit Board has addressed this omission in capital requirements, the final rule risk percentage requirements will be the final rule by clarifying that the PFE calculates the PFE for credit derivative found in Table 1.1, which sets forth the for derivative contracts subject to a contracts using the same approach as credit risk percentage requirements for qualifying bilateral netting agreement that used by the Federal Reserve. advances. For example, the credit risk should be calculated on a contract-by- Collateral. Section 932.4(d)(2)(ii)(B) of percentage requirements applicable to contract basis. However, the calculation the proposed rule provided that, when the current credit exposure for a of the PFE for derivative contracts an asset or item was not directly rated derivative contract entered into with a subject to the bilateral netting by a NRSRO, the credit rating of an member institution would be that in agreement, both as proposed and in the obligor counterparty, third party obligor Table 1.1 corresponding to an advance final rule, is based on the same or of the collateral backing the asset or with a remaining maturity less than or theoretical approach recommended by item would have to be used to assign the equal to four years, and the credit risk the BCBS and federal banking applicable credit risk percentage percentage requirement applicable to regulators. See e.g., 12 CFR part 3, requirement.22 For derivative contracts, the PFE for the same derivative contract Appendix A (2000) (regulation of the which are generally not directly rated by would be that in Table 1.1 Office of the Comptroller of the an NRSRO, the proposed provision corresponding to an advance with the Currency, Department of the Treasury). would have allowed a Bank to use the same remaining maturity as the As such, the formula for calculating the credit rating of the counterparty or of derivative contract.19 PFE in the final rule still allows for the the collateral, whichever rating was In addition, § 932.4(d) of the final rule beneficial effects of netting to reduce the more favorable. However, substituting provides that collateral held against the PFE. the credit rating of the counterparty, credit exposure arising from a derivative Certain additional technical changes third party obligor, or collateral would contract can only be applied to reduce were made to the provisions in the final have been allowed only to the extent the credit risk capital charge calculated rule concerning the applications of the that the collateral or guarantee backed for the current credit exposure. The credit conversion factors given in Table the underlying credit exposure. Further, collateral must be held and the reduced 3 of part 932 that are used to calculate collateral would had to have been held credit risk capital charge calculated in the PFE for a single derivative contract. in accordance with the specific accordance with the provisions of Under the final rule, the PFE for a single requirements set forth in proposed § 932.4(e)(2)(ii)(B) of the final rule, derivative contract (not subject to a § 932.4(d)(2)(ii) to receive the treatment qualifying bilateral netting contract) is afforded by that provision. While the 19 For a derivative contract with a nonmember, found by multiplying the effective Finance Board has made some clarifying the applicable credit risk percentage requirement notional amount of the contract, rather would be found in Table 1.3. For the current credit 21 For example, if a derivative contract is exposure, the applicable credit risk percentage than just the notional amount as in the referenced to a multiple of an interest rate index, requirement under the final rule will be assigned proposed rule, by the correct credit the contract would contain greater leverage (and based on the credit rating of the counterparty and conversion factor from Table 3. The therefore be potentially riskier) than a derivative the assumption that the applicable remaining effective notional amount takes account contract without the multiplier. In such a case, the maturity is less than or equal to one year (unless, effective notional value would be greater than the as discussed elsewhere in this section, the exposure of any added leverage that may be built notional value to account for the higher credit is collateralized). For the PFE, the applicable credit exposure under the more highly leveraged contract. risk percentage requirement will be based on the 20 A qualifying bilateral netting agreement must 22 Because § 932.4 of the final rule has been remaining maturity of the derivative contract and meet the requirements set forth at § 932.4(h)(3) of reorganized, the collateral provision is found at the credit rating of the counterparty. the final rule. § 932.4(e)(2)(ii)(B) of the final rule.
VerDate 11
changes to the collateral provision in substituting the credit risk associated the credit risk percentage requirement as the final rule, it has adopted this with the collateral for that associated shown in Table 1.3 for the highest provision substantially as proposed. with the counterparty to the derivative investment grade credit rating and a The Finance Board received several 23 remaining maturity equal to one year or less. contract. In practice, however, under To calculate the credit risk capital charge on comments on the proposed collateral both the proposed and final rule, if the the PFE, the PFE would be calculated under provision. A number of the commenters collateral backing the credit exposure § 932.4(g) or (h) of the final rule, as requested clarification of how collateral arising from a derivative contract is cash applicable, and that amount would be should be applied to reduce the credit or U.S. government securities, both of multiplied by the credit risk percentage risk capital charge for an instrument. which carry a credit risk percentage requirement from Table 1.3 corresponding to One commenter asked specifically if the requirement of zero, the credit risk the highest investment grade and a remaining provision would allow for the reduction capital charge for that portion of the maturity equal to 5 years (i.e., the remaining of the credit risk capital charge for maturity category in Table 1.3 of greater than credit exposure backed by the collateral 3 years up to and including 7 years). advances if it could be demonstrated would be zero. Example 2: Assume the same facts as in that the mortgages backing the advances The Finance Board also has made Example 1 but instead the Bank holds U.S. met an AAA or AA rating standard. The revisions in the final rule to the government securities valued at $12 million Finance Board did not intend that the conditions that must be met before an after applying the appropriate haircut. The collateral provision would be applied to asset, item or derivative contract will be collateral would be sufficient to cover the advances. The credit risk percentage deemed to be backed by collateral. First, total current credit exposure so that the requirements for advances provided in § 932.4(e)(2)(ii)(B)(1) of the final rule current credit exposure would be multiplied Table 1.1 of both the proposed and final by the credit risk percentage requirement for was changed to make clear that government securities, which is zero. The rule were developed based on the collateral could be held by an affiliate resulting capital risk credit charge on the assumption that advances are well- of a member if permitted under the current credit exposure would be zero. The collateralized. No additional reduction Bank’s collateral agreement. This fact that the exposure is overcollateralized in the credit risk capital requirement for change is in line with practices does not affect the calculation of the credit advances was contemplated. In effect, concerning collateral otherwise allowed risk capital charge for the PFE, which must the collateral provision is intended to by the Finance Board and was made in be calculated as required in Example 1. apply only to assets, items or derivative Example 3: Assume the same facts as response to a request by a commenter. under Example 1, but assume that the contracts covered by Table 1.3 (i.e., See 12 CFR 950.7 (as amended by 65 FR rated assets or items other than collateral is not held in accordance with 44414, 44429–30 (July 18, 2000)). The § 932.4(e)(2)(ii)(B)(1)–(5). In this case, the advances or residential mortgage assets). Finance Board also has changed the current credit exposure would be deemed not The final rule has been changed to make final rule to make clear that to be to be collateralized and the credit risk capital this clear. acceptable under the final rule, the charge for the current credit exposure would Further, as already discussed, the required discount, or haircut, applied to be calculated based on the credit risk final rule treats credit exposures arising the value of the collateral must be percentage requirement in Table 1.3 corresponding to the credit rating of the from derivative contracts entered into sufficient to protect against price between a Bank and its member as an counterparty (i.e., the highest investment declines during the holding period and grade) and a remaining maturity less than or advance for the purposes of assigning to cover the likely costs of liquidation the credit risk percentage requirement. equal to one year. The credit risk capital of the collateral. A Bank must apply a charge for the PFE would be calculated as in This treatment would not make it haircut to the value of the collateral Example 1. advantageous for a Bank to apply the before calculating the portion of the collateral provision when calculating Short term credit rating. The proposed credit exposure that is deemed to be the credit risk capital charge for rule did not provide specific credit risk backed by the collateral. derivative contracts with a member, percentage requirements for assets, such To better illustrate how the collateral as commercial paper, that have stated unless the collateral was cash or U.S. provision in the final rule will be government securities. Where a member maturities of less than one year and, applied, the Finance Board is providing therefore, may have a short-term credit provides cash or government securities the following examples. to collateralize a derivative exposure, in rating from an NRSRO. Generally, accordance with the requirements of the Example 1: Assume that a Bank entered a NRSROs use three short-term credit derivative contract with a counterparty rated ratings that are considered investment collateral provision, the Finance Board at the highest investment grade by all will allow a Bank to apply the credit NRSROs. The remaining maturity on the grade, including A–1, A–2 or A–3 (used risk percentage requirement for cash or derivative contract is 5 years. Assume further by S&P), or P–1, P–2 or P–3 (used by government securities to that portion of that at the time the credit risk capital charge Moody’s). Research done by Moody’s the current credit exposure that is was being calculated, the derivative contract demonstrates that the three investment backed by the collateral. had a current credit exposure equal to $10 grade short-term credit ratings Some commenters believed that million and the Bank held U.S. government correspond to the four investment grade collateral held against derivative securities valued at $4 million after applying long-term credit ratings. See an acceptable haircut to those securities, to ‘‘Commercial Paper Defaults and Rating contracts should either reduce the collateralize that derivative exposure. In this current credit exposure of the derivative case, the collateral would be deemed to back Transactions,’’ 1972–1998, Moody’s contract dollar-for-dollar, or reduce the $4 million of the current credit exposure. To Investors Service (May 1998); ‘‘Moody’s credit risk capital charge for a derivative calculate the credit risk capital charge on the Credit Opinions: Financial Institutions,’’ contract dollar-for-dollar. The Finance current credit exposure, the $4 million of the Moody’s Investors Service (December Board disagrees. Obtaining collateral to credit equivalent amount backed by collateral 1999). In rating short-term commercial back an asset, item or derivative would be multiplied by the credit risk paper, Moody’s assigns the highest contract does not eliminate credit risk percentage requirements assigned to U.S. short-term credit rating (P–1) to issuers for the Bank, as would be implied if the government securities, which is zero. The that have long-term senior unsecured remaining $6 million would be multiplied by Finance Board allowed a dollar ratings ranging from the highest reduction in the credit exposure or the 23 This argument would apply to any asset, item investment grade (Aaa) to the third credit risk capital charge for each dollar or derivative contract backed by a guarantee or highest investment grade (A), and of collateral posted. Instead, the Bank is collateral. assigns the second highest short-term
VerDate 11
rating (P–2) to long-term credit ratings the instrument’s credit risk capital percentage requirement in Table 1.3 ranging from the third highest charge. The proposed rule would have (Requirement for Rated Assets or Rated investment grade to the fourth highest allowed the Banks to use Finance Board Items other than Advances or investment grade. Id. The lowest approved internal models to convert Residential Mortgage Assets). The investment grade short-term rating (P–3) some or all off-balance sheet credit commenter argued that because SLOCs is reserved solely for the fourth highest exposures into on-balance sheet credit are in fact ‘‘contingent advances,’’ the long-term credit rating. Id. A equivalents. For Banks that lack credit risk percentage requirement comparison of U.S. financial appropriate internal models, the should be the same as advances as institutions’ short-term ratings by proposed rule provided a table of credit presented in Table 1.1 (Requirement for Moody’s shows that the highest short- conversion factors for off-balance sheet Advances). The Finance Board intended term credit rating (P–1) is more items. The Finance Board received no that the credit risk percentage commonly associated with the third comments on the specific credit requirement for SLOCs would be highest long-term credit rating (A) than conversion factors in Table 2 of the determined from Table 1.1. In fact, the the highest (Aaa) or second highest (Aa) proposed rule. The Finance Board, proposed SUPPLEMENTARY INFORMATION long-term credit-ratings. Id. Based on however, has incorporated certain section of the proposed rule indicated this research and the fact that credit risk changes to Table 2, as discussed below, that SLOCs were given a 50 percent percentage requirements for long-term and has adopted § 932.4(f) with these conversion factor, rather than the 100 credit risk ratings have been developed, changes. percent conversion factor assigned to the Finance Board has added Table 2 in the proposed rule provided SLOCs by federal banking regulators, § 932.4(e)(2)(ii)(C) to the final rule to a 100 percent credit conversion factor because SLOCs issued by the Banks are address assets with short-term credit for four separate categories: asset sales rarely drawn down and if drawn down, ratings. Under this new provision, the with recourse where the credit risk would convert to an advance. See 65 FR applicable credit risk percentage remains with the Bank, sale and at 43425. The Finance Board concurs requirement from Table 1.3 for an asset repurchase agreements, forward asset with the commenter, and the final rule with a short-term credit rating from a purchases, and commitments to make has been changed to clarify that Table given NRSRO will be based on the advances or other loans. However, if a 1.1 should be used in determining the remaining maturity of the asset and the Bank treats sale and repurchase credit risk percentage requirement long-term credit rating assigned by the agreements as an off-balance sheet item, applicable to the credit equivalent same NRSRO to the issuer of the asset. then the Bank would actually report amount of any Bank SLOCs. such agreements as asset sales with Although highly unlikely, there are Reduced credit risk charge for assets also occasional situations where the recourse where the credit risk remains with the Bank. Because any off-balance hedged with credit derivatives. The issuer of a short-term instrument with a proposed rule would have allowed short-term credit rating from an NRSRO sheet sale and repurchase agreements are reported under the category ‘‘asset assets hedged with credit derivatives to does not issue long-term instruments or be assigned a zero credit risk capital has not obtained a long-term credit sales with recourse where the credit risk remains with the Bank,’’ a separate charge under limited circumstances. rating for any long-term instruments These were: (1) if the asset referenced in and, therefore, will not have a long-term category in Table 2 for ‘‘sale and repurchase agreements’’ is redundant the credit derivative (referenced asset) credit rating from an NRSRO. In this and the hedged asset were the same and situation, § 932.4(e)(2)(ii)(C) of the final and has been removed. Additionally, under SFAS 133, forward asset the remaining maturity of the hedged rule states that the long-term equivalent asset and the credit derivative was the rating will be determined as follows: purchases will qualify as derivative contracts and will appear on the balance same; (2) the hedged asset and the (1) The highest short-term rating shall be sheet. In any case, derivative contracts referenced asset were the same but the equivalent to the third highest long-term are addressed independently of off- remaining maturity of the hedged asset rating; (2) The second highest short-term balance sheet items under § 932.4(d). and the credit derivative were different, rating shall be equivalent to the fourth but only if the remaining maturity of the highest long-term rating; (3) The third highest Therefore, the forward asset purchases short-term rating shall be equivalent to the category has also been removed from credit derivative was two years or more; fourth highest long-term rating; and (4) If the Table 2. and (3) if the remaining maturity of the short-term rating is downgraded to below Commitments to make advances or hedged asset and the credit derivative investment grade after acquisition by the other loans has been expanded into two contract was the same, and the hedged Bank, the short-term rating shall be categories: commitments to make asset and the referenced asset were equivalent to the second highest below advances, and commitments to make or different but only if certain additional investment grade long-term rating. purchase other loans. This change conditions were met. In all these cases, This approach is consistent with the recognizes the fact that under AMA the proposed rule would have required research discussed above. The provision programs, the Banks may enter into the applicable credit risk capital charge regarding downgrades of short-term certain commitments to purchase loans for the credit derivative contract to be credit ratings is also consistent with the that may be recorded as off-balance applied. The Finance Board requested way that downgrades of long-term sheet items. general comments regarding the ratings are addressed under Table 1.3. The Finance Board received one treatment of credit derivatives and Credit equivalent amounts for off- comment regarding standby letters of specific comments regarding the balance sheet items. As proposed, credit (SLOCs), an off-balance sheet methodology that should be used to § 932.4(f), would have required the item included in Table 2 with a credit incorporate the benefit of credit Banks to convert all off-balance sheet conversion factor of 50 percent. The derivatives that did not meet the three credit exposures into equivalent on- commenter apparently believed that circumstances described above. See 65 balance sheet credit exposures or credit under the proposed rule, the credit risk FR at 43426. The Finance Board equivalent amounts, determine the type percentage requirement for this off- received no specific comments of the item, and then apply the balance sheet item would be determined regarding its treatment of credit appropriate credit risk percentage by applying the credit conversion factor derivatives in the proposed capital rule. requirement from the tables to estimate and finding the appropriate credit risk However, the Finance Board has
VerDate 11
realized that its approach may have treatment afforded relatively believes that the one-year minimum been somewhat inconsistent with its straightforward credit derivative requirement is in line with the generally approach to collateral and third parties instruments under most circumstances. conservative approach adopted in this guarantees, which allowed for a Under the final rule, as in the rule. proportional reduction in the credit risk proposed rule, credit derivatives that are Further, the beneficial treatment capital charge on an asset if the referenced to an asset that perfectly allowed when calculating a hedged collateral or guarantee did not cover 100 matches the asset being hedged may asset’s credit risk capital charge if the percent of the book value of the asset. fully offset the credit risk capital charge applicable credit derivative contract has The Finance Board, therefore, has of the hedged asset, if the credit a remaining maturity less than that of refined its approach to credit derivatives derivative has a remaining maturity the hedged asset may be applied if the in the final rule to allow a similar equal to or greater than that of the hedged asset and the referenced asset proportional reduction in the credit risk hedged asset. A credit risk capital are the same. This treatment may also be capital charge for assets partially hedged charge for the credit derivative must applied if the hedged asset and the with a credit derivative, under still be applied, however to account for referenced asset are different but only if appropriate conditions. This refinement the Bank’s credit exposure to the credit the referenced asset ranks pari passu or is based on discussions with other derivative counterparty. For example, if junior to the hedged on-balance sheet financial regulators and a review of a Bank purchases a triple-B-rated asset, is subject to a cross-default clause proposals by organizations representing corporate bond with a remaining with the hedged on-balance sheet asset capital market participants, such as the maturity of five years and at the same and has the same maturity as the hedged International Swaps and Derivatives time enters into a 5-year credit default asset. Where the above conditions are Association (ISDA). The final rule option contract based on the same bond, met, the credit risk capital charge for an otherwise retains an emphasis on the credit risk capital charge for the asset hedged with a credit derivative recognizing credit derivative activities underlying asset will be zero. The net that has a remaining maturity less than only if they are undertaken in a clear credit risk capital charge for the pair that of the hedged asset will equal the and straightforward manner and used to will equal the credit risk capital charge sum of the capital charges for the reduce the credit risk of specific assets. for the credit exposure on the derivative unhedged portion of the asset and the For example, the new approach does not contract. hedged portion of the asset. incorporate the use of internal credit This same treatment may be accorded For example, assume a Bank holds a models. Further, while the change adds positions in which the credit derivative triple-B-rated corporate bond with a to the consistency in treatment in the contract references a different obligation remaining maturity of 5 years and has capital rule between credit derivatives from the same obligor but only if: (1) the hedged that position with a credit credit derivative contract has the same derivative that is referenced to the same and other types of credit enhancements, or a longer remaining maturity as the corporate bond but that has a remaining such as collateral and third party hedged asset; and (2) the referenced maturity of two years. Under the final guarantees, the change adopted in the asset ranks pari passu or junior to the rule, the capital charge for the unhedged final rule, in practical terms, is likely to hedged asset, is subject to a cross- portion of the asset would equal the have little or no effect on the Banks’ default clause with the hedged asset and credit risk percentage requirement for overall credit risk capital requirement at has the same maturity as the hedged the asset, assigned based on its credit this time, because the Banks presently asset. These conditions on the rating (BBB) and remaining maturity (5 have few, if any, credit derivatives on referenced asset are the same in the final years), multiplied by the book value of their balance sheets. rule as in the proposed rule except for the asset minus the product of the credit The Finance Board also adopted in one new condition that the referenced risk percentage requirement for the the final rule an additional general asset and the hedged asset have the asset, assigned based on its credit rating condition governing whether a credit same remaining maturity. This new (BBB) but on the remaining maturity of derivative can be used to reduce the condition helps assure that the value of the credit derivative contract (2 years), capital charge on an asset. Specifically, the hedged asset and the credit multiplied by the book value of the the final rule requires a credit derivative derivative will move in a similar asset. The credit risk capital charge for contract to provide substantial fashion. the hedged portion of the asset will protection against credit losses before The final rule expands upon the relief equal the credit risk capital charge for the reduction can be taken. Because offered in the proposed rule by allowing the credit derivative contract, calculated credit derivative contracts are bilaterally a Bank to take a proportionally reduced in accordance with § 932.4(d) of the negotiated, the Finance Board believes capital charge for an asset hedged with final rule. that in some rare circumstances a credit derivative even if the remaining As in the proposed rule, where the conditions may be added to the contract maturity of the credit derivative is less on-balance sheet asset and the asset that may call into question the ability of than that of the hedged asset. However, referenced in the credit derivative have the Bank to collect, under all likely the credit derivative must have a been issued by different obligors, the scenarios, the amount expected under remaining maturity of at least one year final rule does not provide capital relief the credit derivative contract, if there for this new provision to be applied. for the underlying asset. See 65 FR at were a default on the hedged asset. The requirement that credit derivatives 43426. In the SUPPLEMENTARY Further, there may be questions as to the with a shorter remaining maturity than INFORMATION section of the proposed ability of the counterparty to actually the hedged asset have at least a one-year rule, the Finance Board requested fulfill the terms of the credit derivative minimum remaining maturity is more comment on whether it should allow contract. The Finance Board, therefore, strict than the six month minimum Banks to petition for relief on a case-by- has added as a safeguard, the condition remaining maturity that has been case basis on the credit risk capital that the credit derivative contract suggested in work done by ISDA for charge applied to assets hedged with provide substantial protection against similar circumstances, but is less strict credit derivatives but that do not meet credit losses. As already discussed, the than the two-year minimum the specific conditions set forth in the Finance Board does not think that this requirement that was applied under the rule, if the petition is accompanied by condition would affect the beneficial proposed rule. The Finance Board adequate data and analysis. Id.
VerDate 11
Although no specific comments were When using an internal market risk (VAR) model for calculating the capital received in response to this request, the model, the proposed rule further charge. Almost all commenters also Finance Board believes that Banks stipulated that the Bank’s capital charge expressed opposition to the 95 percent should be allowed to seek such relief. would equal the sum of two test for a number of reasons, including The Finance Board emphasizes that any components: the capital charge that the test ‘‘double charged’’ the Banks petition for relief must be accompanied estimated by the Bank’s internal market for market risks and that the ‘‘artificial’’ by evidence that demonstrates with a risk or cash flow model plus the amount volatility in GAAP earnings created by high degree of certainty that the credit by which the current market value of a implementation of SFAS 133 could derivative contract will provide Bank’s total capital was less than 95 make it difficult for Banks to comply protection should there be a default on percent of the value of the Bank’s total with the 95 percent test. Comments the hedged asset. The Finance Board capital calculated in accordance with were also received on a number of other also emphasizes that it will be the GLB Act (the 95 percent test). The aspects of the proposed market risk conservative in its approach when proposed rule also would have required requirement. The Finance Board has reviewing such petitions and will the Banks to conduct an annual, considered all the comments received consider all available evidence independent validation of its internal on proposed § 932.5 and will address including any information about how market risk model or internal cash flow these comments in more detail below. the situation may be handled by other model and submit the results of the Furthermore, the Finance Board has financial regulators before making any validation to the Finance Board. determined to make a number of decision. The proposed rule also established changes to the proposed rule both in Reduced charges for derivative broad parameters and standards for the response to comments and based upon contracts. As was proposed, the final internal risk model and for the stress its reconsideration of certain aspects of rule also allows foreign exchange rate testing that would be performed using the proposal. The Finance Board contracts with an original maturity of 14 that model. In general, the proposed discusses these changes more fully rule would have required the Bank’s below. Among the more important calendar days or less to be assigned a internal risk model to cover all material changes, the final rule has revised the zero credit risk capital charge. Gold risks arising from a Bank’s portfolio of 95 percent test so that it now requires contracts would not be considered assets, liabilities and off-balance sheet a Bank to calculate its market risk exchange rate contracts. Derivative items, including derivative contracts capital charge by adding the market contracts that are traded on regulated and options. As contemplated by the value of its portfolio at risk and the exchanges that require daily collection proposed rule, the Bank would have amount, if any, by which the market of variation margin for the contract also used the internal market risk model first value of the Bank’s total capital, would be assigned a zero credit risk to estimate the market value of its estimated using its internal market risk capital charge. portfolio as of the last business day of model, falls below 85 percent of the Section 932.5—Market Risk Capital the month for which the market risk value of the Bank’s total capital as Requirement capital charge was being calculated and defined in the GLB Act (85 percent test). then to stress that baseline market value In addition, the final rule explicitly General. As proposed, § 932.5 set to calculate the market value of its states that the Finance Board may forth the basic requirements for portfolio at risk. The proposed rule also exercise flexibility in determining the calculating each Bank’s market risk required that the stress test account for appropriate minimum number of capital charge. Under the proposed rule, changes in interest rates, interest rate scenarios that shall be used in each Bank would be required to develop volatility, the shape of the yield curve estimating the market value of their either an internal market risk model, or and changes in market prices equivalent portfolio at risk. The Finance Board, as an alternative, a cash flow model, to those that have been observed over however, anticipates increasing the that would calculate the Bank’s market 120 business-day periods of market minimum number of required risk capital charge and to have the stress. Under the proposed rule, the simulations in proportion to the nature model reviewed and approved by the relevant historic observation period and level of market risk taken by the Finance Board. The proposed rule would have begun at the end of the Banks, and as the Banks gain expertise required the Bank to use its internal month prior to the month for which the in using their models and available market risk model to estimate the market risk charge was being calculated modeling techniques become more market value of its portfolio at risk. As and extend back to 1978. Further, if the sophisticated. Furthermore, as with proposed, the market value of the Bank had issued consolidated other provisions, the final rule has Bank’s portfolio at risk would have been obligations denominated in foreign revised § 932.5 to reflect the fact that defined as the maximum loss in market currency or linked to equity or because of SFAS 133, derivatives value of a Bank’s portfolio under commodity prices, the proposed rule contracts can no longer be considered various stress scenarios. This loss would would have required the Bank to strictly off-balance sheet items. have been measured from a base line estimate the market value of its portfolio Internal cash flow model. Many case such that the probability of loss at risk due to changes in foreign commenters expressed a concern that greater than that estimated was not more exchange rates, and equity and the proposed rule was unclear regarding than one percent. If a Bank opted to use commodity prices as relevant. the conditions under which an internal the alternate cash flow model, the The Finance Board received a large cash flow model could be substituted proposed rule would have required the number of comments on proposed for an internal risk model. Additionally, Bank to demonstrate that the cash flow § 932.5. Generally, most commenters commenters indicated a preference for model subjected the Bank’s portfolio to objected to a market risk capital charge the final rule to include explicit a degree of stress comparable to that based on changes in market value of a requirements about the parameters that required for the internal market risk Bank’s portfolio as inappropriate given would be required for such a model. model and to demonstrate how the Bank that the Banks hold their assets to In response to these comments, the intended to measure its market risk maturity. For similar reasons, Finance Board has clarified in capital charge using the cash flow commenters objected to the Finance § 932.5(a)(2) of the final rule that a Bank approach. Board requiring use of a value-at-risk may use an internal cash flow model in
VerDate 11
place of an internal market risk model, internal cash flow model. The Finance VAR-like approach over a cash flow provided that the Bank obtains prior Board will reject an internal cash flow approach. Finance Board approval of the internal model if after consideration of all In proposing § 932.5, the Finance cash flow model and of the imbedded relevant factors, it believes that the Board did not intend to imply that the assumptions in the model. In principle, model fails to calculate an adequate Banks were required to use any because both the internal market risk market risk capital charge for a given specified or ‘‘typical’’ VAR approach to model and the alternate internal cash Bank. calculate the market value of their flow model calculate loss estimates The Finance Board also notes that portfolios at risk. Instead, the Finance based upon the present value of the cash under the final rule the internal cash Board intends that each Bank uses its flows of the current assets and flow model will be used to calculate internal market risk model to undertake liabilities, the market risk capital only the market risk capital a stress test. As envisioned by the requirement should be the same requirements. A Bank using an internal Finance Board, the test is applied such whichever model is used. However, cash flow model will still calculate its that each Bank will first use its internal even though the Finance Board expects credit risk capital requirements market risk model to estimate a base the two methods to be theoretically pursuant to § 932.4 of the final rule. case market value for its portfolio, consistent, it recognizes that, in Thus, in developing an internal cash where the portfolio would consist of all practice, it is unlikely that the market flow model, a Bank would want to use of the Bank’s assets and liabilities, off- risk capital requirements calculated by the expected cash flows from its assets balance sheet items and derivative an approved internal cash flow model and not simulate changes in cash flows contracts. In estimating this base case would be exactly the same as the that would come from changes in credit market value, each Bank’s internal risk requirement calculated by an internal quality. The expected cash flows, models could employ actual market market risk model. Further, and however, could still take into account prices, and assumptions and contrary to the perception of some the credit quality of the asset, e.g., the methodologies for estimating the value commenters, the Finance Board is not expected cash flows from a triple A or prices of instruments that would be requiring a Bank to develop both an rated bond would be greater than the consistent with approaches that are internal market risk model and an expected cash flows from a similar generally accepted in the financial internal cash flow model to verify that single B rated bond. industry. Then, each Bank will use the the market risk capital charges Measurement of market value at risk internal market risk model to apply calculated by each are equivalent. under a Bank’s internal market risk market shock scenarios that are based Instead, the Finance Board will model. The Finance Board received on historical scenarios and data, as review the assumptions and time many comments concerning the specified in § 932.5(b)(4) and (b)(5) of horizon chosen by a Bank in its internal requirements for the internal market risk the final rule. The model-derived cash flow model to assure that the model and its proposed approach for portion of the market risk capital charge model captures all material risks faced estimating the market value of the (i.e., the market value of a Bank’s by the Bank and that the stress applied Banks’ portfolios at risk, including portfolio at risk) equals the loss in the by the model is comparable to that comments from all of the Banks, two market value of a Bank’s portfolio required by the modeling parameters trade groups, and a housing GSE. measured from a base line case, as and by the 85 percent test set forth in Commenters generally expressed determined from market-value loss § 932.5(a)(1), (b) and (c) of the final rule. opposition and confusion regarding the calculations that are based on more than However, the final rule does not require type of internal market risk model 20 years of historical experience and a Bank to apply separately the 85 contemplated under the proposed rule. that must include an adequate number percent test if the Bank uses an Several commenters asked for of stress scenarios derived from these alternative cash flow model. clarification of the definition of market historically stressful periods, such that The Finance Board’s review of a value at risk. Most commenters opposed the probability of loss greater than the Bank’s proposed internal cash flow the use of a traditional VAR framework determined amount is not more than model will focus on the assumptions of to measure market risk for the Banks. one percent. This approach generally the cash flow model concerning future They expressed concern that the VAR differs from the traditional VAR business activities, e.g., the acquisition framework, which federal banking approach, which estimates the potential of new assets and their financing. The regulators require commercial banks to loss of a portfolio given relatively more assumptions concerning future business use for their trading portfolios under current market conditions. activities must be well defined, prudent, certain conditions, was inappropriate Furthermore, the Finance Board and consistent with the Bank’s practice. for the held-to-maturity portfolios that believes that estimating the market risk The Finance Board has determined, are more characteristic of the Banks. charge based on a stress test of the kind however, that with respect to the More generally and for similar reasons, described above is reasonable, even internal cash flow model approach, the a number of commenters felt that it was when, as the commenters stated, the final rule adopted herein should not inappropriate to base the market risk Banks’ portfolios consist largely of include specific assumptions, capital charge on changes in the market ‘‘held-to-maturity’’ instruments. From a parameters, or time horizon value of the Banks’ portfolios. Several regulatory perspective, the Finance requirements in recognition of the commenters also expressed concern that Board is concerned that the Banks hold possibility that such inputs need not be using a traditional VAR model would sufficient capital to withstand constant across different portfolios and/ result in the Banks holding significantly historically extreme market conditions or business plans. The Finance Board more capital for market risk than that may persist over multi-year periods. may judge the adequacy of the model’s OFHEO requires under its proposed The market-value approach adopted in output in various ways including capital regulations for Fannie Mae and this final rule satisfies this regulatory comparing the estimates produced by Freddie Mac, a result that could put the concern. Specifically, the measure of a the internal cash flow model to Banks at a competitive disadvantage to decline in market value during a stress modeling results from other Banks the other housing GSEs. A number of period incorporates the decline in long- which may display similar risk profiles commenters also urged the Finance term earnings that would result, all to the Bank seeking approval of an Board not to express a preference for the things being equal, from such market
VerDate 11
changes. In this respect, the market- federal bank regulatory agencies for the Commenters have also asked for value approach parallels the way the VAR models used in their market risk guidance on how the Finance Board debt markets bid up or down the value test, which, once the mandated intends to define material risks. In of a financial instrument based on its multiplier is taken into account, is general, a material risk is any risk that expected earnings relative to the yield effectively between 90 and 160 days.25 has a potential, substantive effect on a expectations of similar instruments in Moreover, the Finance Board believes Bank’s earnings or capital portfolio, or the current market. The arguments that the 120 business day holding could potentially have a significant voiced by commenters that the Finance period is reasonable given the goal impact on the Bank’s market risk capital Board’s approach misstates the capital underlying the market risk capital charge from a regulatory prospective. A charge for ‘‘held-to-maturity’’ assets, charge discussed above. For these determination concerning the relies on the expectation that a Bank reasons, the Finance Board remains materiality of specific risks would could regain lost market value if satisfied that the mandated 120 business include consideration of a Bank’s markets ‘‘returned to normal’’ following day holding period stipulated for the general risk profile and relevant historic any stressful conditions. The weakness internal market risk model is the correct data and experience. of this argument is that a Bank must risk approach. Along these same lines, some further declines in market value in order A number of commenters requested commenters expressed concern that the to position itself to gain from clarification as to when a Bank should Finance Board has not provided ‘‘expected’’ market corrections. Thus, apply the required stress test using a sufficient technical specifications for for the purposes of the Market Risk historical simulation approach or when the internal market risk model. As a Capital Requirement, it is irrelevant that it should use a path-generating result, some commenters felt that the the Bank may generally hold its assets approach such as Monte Carlo Banks cannot be sure if the models used to maturity because the regulator is simulations. In both the proposed and for day-to-day risk management concerned with, and must address, the final rule, § 932.5(b)(2) provides that a purposes would be sufficient for calculating the market risk capital likelihood that the market will not Bank may use any ‘‘generally accepted charge, and at least one commenter behave ‘‘as expected’’ and that the measurement technique’’ in its believed that without more specificity it losses in market value will eventually modeling approach. The choice of an would be impossible to judge the be realized through earnings over time. approach is subject to the general adequacy of the market risk capital By requiring that an acceptable internal requirement that the internal market requirements. The quantitative cash flow model subject a Bank’s risk model be able to capture all modeling parameters provided by the portfolio to a comparable degree of material market risks faced by the Bank. Finance Board in the proposed and final stress as that required for the internal In this regard, the Finance Board has rule are consistent with those provided market risk model, the Finance Board determined that simulations of also intends to ensure that these by other Bank regulators for required historical market changes will comply market risk models. See 61 FR 47358 regulatory goals are met if a Bank with the regulation. Historical decides to use an internal cash flow (Sept. 6, 1996). The Finance Board simulations may assume rate changes as believes that the quantitative model to estimate its market risk capital a percentage of the prior rate level rather charge. As was explained in the specifications set forth in the final rule than as changes in the absolute level of provide a degree of flexibility for the discussion of the Minimum Risk-Based the index in question. The Finance Capital Requirement, the Finance Board Banks in developing their models, yet Board has also determined that such ensures that the Banks will hold a also does not believe that the market- simulations should encompass market value approach will lead to an onerous prudential level of capital with respect changes for all instruments and indexes. to their market risk and that the market market risk capital charge. Given its In doing so, such simulation will regulatory goals, the Finance Board, risk capital charges will be consistent address general changes in interest rates across the twelve Banks. Further, the therefore, continues to believe that its and basis differences. general approach to the internal market adequacy of both the models and the risk model adopted in the final rule is The parameters for a Monte Carlo rate estimates of the market risk produced by reasonable.24 path generating process would be those models will be assured through A few commenters believed that the derived from and consistent with supervisory oversight and the 120 business day holding period periods of market stress identified from requirement that the Finance Board stipulated for the stress test in proposed the same historical time-frame and data, approve both the Banks’ internal models § 932.5 was excessive. At least one which stretches from 1978 to the month and any subsequent material adjustment commenter based this view on the fact prior to the month for which a market to the models. In addition, the Finance that most VAR models stipulate a risk capital charge is being calculated, Board expects that there will be on- holding period of only one or two days. as provided in § 932.5(b)(4) and (5) of going dialogue between the staffs of the As already discussed, § 932.5 of the the final rule, that would be used in a Finance Board and the Banks during the final rule does not mandate a specific historical simulation. The process developments of the internal risk-based VAR approach for estimating the market should generate a sufficient number of models so that formal or informal value of its portfolio at risk. paths to estimate the 99th percentile in guidance may be provided on issues Nevertheless, the 120 business day the distribution of losses for the market such as the sufficiency of individual horizon is also within the range of the value of a Bank’s portfolio at risk using modeling efforts. holding periods adopted by other the same types of calculations as those The Finance Board has also used in an historical simulation. reconsidered some aspects of proposed 24 The Finance Board provides additional § 932.5 and has determined to make background information about the modeling 25 The federal bank regulatory agencies (Office of some changes in the final rule. requirement in the SUPPLEMENTARY INFORMATION the Comptroller of the Currency (OCC), Federal Primarily, the Finance Board has section of the Federal Register release proposing Reserve Board (FRB), and Federal Deposit Insurance changed the criteria in proposed the capital rule. This information helps further Corporation (FDIC)) issued a joint final rule in clarify the Finance Board’s reasoning for adopting September 1996 to incorporate a measure for market § 932.5(b)(4)(ii) regarding the data time the internal market risk model approach in this risk, effective as of January 1, 1998. See 61 FR series from which a Bank must draw the final rule. See 65 FR at 43427–29. 47358 (Sept. 6, 1996). relevant historical scenarios in
VerDate 11
executing a stress test. The change choice meets the requirements of received many comments on the provides greater flexibility for the § 932.5(b)(4)(ii). proposed 95 percent test. All Finance Board to determine an A similar change has been made to commenters were generally opposed to appropriate minimum number of 932.5(b)(5)(iii) to conform the the inclusion of the 95 percent test in scenarios to be used in the modeling requirements for the stress scenarios the market risk capital requirement, exercise, but intends that the minimum used to model foreign exchange, and often claiming that the proposed test number of scenarios shall be increased equity and commodity price risk to was not required by other financial as the Bank’s risk exposure increases those used for interest rate risks. Section institutions or was unnecessary from a and as the Bank’s expertise and the 932.5(b)(5)(iii), however, only applies if safety and soundness perspective. general sophistication of available a Bank has issued consolidated One commenter stated that if the modeling technology improves. As obligations denominated in a foreign intention of the requirement was to proposed, the criteria in § 932.5(b)(4)(ii) currency or linked to equity or ensure that Bank management takes required an unspecified number of tests commodity prices, and the resulting appropriate action when a Bank’s to cover the relevant data period from relevant foreign exchange or equity or market value of capital falls below some 1978 until the present.26 The Finance commodity price risk is material. threshold, the proposed requirement Board recognizes that this requirement The Finance Board has also changed may actually exacerbate the problem. If may have created a great hardship for the final rule to remove a reference the Bank were forced to increase its which suggested that a Bank had to seek the Banks as they try to conform their market risk capital requirement when its specific approval for empirical modeling technology and capabilities to market value deteriorates, then, correlations included in its model (i.e., the requirements of the capital rule. The according to the commenter, the Bank approval beyond that required in the changes to § 932.5(b)(4)(ii) in the final would have the incentive to further final rule under § 932.5(d)). Instead, the rule are intended to allow the Finance increase risk to generate an acceptable Finance Board intends to review the Board to require a Federal Home Loan return on the additional capital.27 theoretical and empirical basis for Bank to use a minimum acceptable but Commenters suggest that rather than including any correlations among manageable number of scenarios. The including the 95 percent market to book variables in the internal model as part periods chosen, however, must be value test in the rule, the Finance Board of its initial approval of the model or its satisfactory to the Finance Board, should consider requiring that each encompass the periods of the greatest subsequent approval of any material adjustments to the model. In general, Bank’s Risk Management Policy potential market stress, given a Bank’s establish a threshold market to book portfolio and the data from the period additions of, or adjustments to, correlations used in the model would be value of capital ratio that would require of 1978 to the month prior to the month the Bank’s board of directors to review for which the market risk capital charge considered a material adjustment by the and determine a plan of action if is being calculated, and be Finance Board. necessary. comprehensive given the modeling Basis Risk. In the proposed rule, the capabilities available to the Bank. The Finance Board specifically requested Several commenters stated that while Finance Board will judge whether a comment on how best to treat basis risk such a requirement may have some Bank’s given choice of historic scenarios in the final rule. The Finance Board conceptual appeal, potential adverse is comprehensive, based not only on the received several comments on basis risk. effects outweighed any benefits. They Bank’s internal capabilities at any point One commenter suggested that basis risk argued that the required test forces a in time, but also on the state-of-the-art is not significant enough to require mark-to-market accounting framework modeling technology and theory special modeling and capital charges. on the Banks which are primarily employed by other Banks and within Another commenter suggested that each required to report their financial the financial industry, generally. In Bank should establish its own basis risk condition on an accrual basis under addition, the Banks will be expected to management framework, and the GAAP and that the conflicting increase steadily over time the number Finance Board should review this requirements to reconcile accounting of scenarios used in calculating the framework as part of its examination conventions to market valuation could market risk capital charge. The Finance process. However, a review of historical lead to adverse consequences. They cite Board will monitor compliance with the rate changes indicated that some the implementation of SFAS 133 where requirements of § 932.5(b)(4)(ii) through periods of stressful markets were a Bank may face asymmetrical its general supervisory oversight, and a characterized, not only by changes in accounting of its hedged positions that Bank will not be required to seek the general level of rates, but also by could lead to an increase in book value specific Finance Board approval each significant changes in the relative without any change in a Bank’s market time it increases the number of spread between indices that affect value and, therefore, a decrease in the scenarios used unless the change financial positions held by the Banks. Bank’s market to book value below the involves a material adjustment to the The Finance Board, therefore, has 95 percent requirement without any model. However, Banks will be determined that basis risk is a material change in its underlying economic risk. expected to defend their choice of stress risk for the Banks and should be One commenter, however, agreed that it scenarios and document that their incorporated into the stress tests. was ‘‘prudent to mandate that capital be Furthermore, the Finance Board held to assure an adequate market to 26 As proposed and adopted, the relevant believes that the historical simulation book value capital ratio,’’ but suggested historical period set forth in the capital rule by the approach that the Banks are most likely that the test should require a ratio of Finance Board would encompass the period from to employ, at least initially, can market to book value of 85 percent. the beginning of 1978 to the end of the month prior to the month for which the capital charge is being reasonably incorporate the changes in calculated. Each 120 business day period would the different market indexes that most 27 The commenter failed to recognize that if a start at the first of each month. Thus, the first stress affect the Banks’ financial strength, and Bank actually engaged in the type of behavior period would run from January 1, 1978 forward 120 thereby can adequately incorporate described, its risk-based capital requirement would business days, the second, February 1, 1978 forward rise in relation to the added risk incurred. Thus, the 120 business days, etc. The 1978 date was selected basis risk into the required stress tests. Finance Board does not believe that the 85 percent to ensure that the most stressful period in recent The 95 percent test. As discussed test adopted in the final rule will create a perverse times is included. 65 FR at 43429. briefly above, the Finance Board incentive as described by the commenter.
VerDate 11
The Finance Board finds merit in adequately protect for a decline in the stated that the requirement to validate some of the concerns expressed by the market value of a Bank’s total and the model annually was excessive and commenters, especially those related to permanent capital. As discussed above, suggested that conducting the validation the potential effects of SFAS 133 on the the market value of a Bank’s portfolio at every two years would be more Banks’ balance sheets. Therefore, the risk equals the maximum loss between practical. Another commenter suggested Finance Board has adopted the one a baseline calculation, which estimates that the rule should explicitly allow the commenter’s suggestion and has the current market value of a Bank’s validation to be performed by either an changed the final rule so that in portfolio as of a certain date, and the outside party or the Bank’s internal calculating the market risk capital worst case loss derived from among all audit department as long as whoever charge a Bank will have to add to the the shock scenarios, where the performs the validation demonstrates market risk charge estimated by its probability of loss greater than that appropriate expertise. Another internal market risk model the amount, estimated does not exceed one percent. commenter asked whether a letter from if any, that the market value of its total Because the baseline starting point for a recognized expert in the area of market capital falls below 85 percent of the the stress test is based on current market risk will satisfy the validation book value of its total capital. value, the stress test does not account requirement or whether each Bank must The final rule has also been changed for any decline that may have occurred provide a detailed report. to make clear that in applying the 85 between the book value of capital and Given that each Bank most likely will percent test, what the proposed rule the market value of capital as estimated have a market risk model that is referred to as ‘‘the book value of total for the baseline starting point. However, customized to its needs and given the capital’’ is the value of total capital the 85 percent test, as adopted in the expected evolution of sophistication in required to be reported to the Finance final rule, is stipulated so that the market risk modeling, the Finance Board under § 932.7 of the final rule and market value of total capital used in the Board does not believe that it is for other regulatory purposes. The test equals the market value of total appropriate to provide a list of Finance Board also wishes to clarify that capital determined by the model for the minimum criteria for the validation in applying the 85 percent test, the baseline (pre-shock) case. process in the rule. However, in view of market value of total capital should be Based on the above reasoning, the the comments, following is a general calculated using the Bank’s internal Finance Board believes that the 85 discussion of the validation process as market risk model and should be equal percent test, as adopted, covers the Bank contemplated by the Finance Board at to the value of total capital as estimated against excessive declines in the current this time. for the base case market value of a market value of capital while being The Banks should establish a Bank’s portfolio (i.e., the value before flexible enough to assure that normal systematic validation procedure. This applying the required stress scenarios). fluctuations in market values do not procedure should take into account the While the Finance Board has made lead to excessive volatility in the complexity and sensitivity of the Banks’ some changes to the proposed market- required market risk capital charge. instruments, the level of overall market to-book value capital test in the final Independent validation of a Bank’s risk and the Banks’ proximity to capital rule, the Finance Board continues to internal market risk model or cash flow limits. The procedure should include believe that a capital charge is needed model. Section 932.5(c) of the proposed testing, review of input procedures, to protect against a significant rule would have required each Bank to review of specific modeling impairment in a Bank’s market value of conduct, on an annual basis, an assumptions, and review of modeling capital, to the extent that it is not independent validation of its internal methodology. Some longer-term reflected in the reported values of total market risk model or internal cash flow planning should also be involved in the and permanent capital. The provisions model. The validation would have to be validation process so that over a two or of the final rule require a Bank to carried out by personnel not reporting to three year cycle all major assumptions measure and report its capital adequacy the business line responsible for and components of the model are based upon the book value of total or conducting business transactions for the subject to review and rigorous testing. permanent capital, calculated in Bank or by an outside party qualified to Further, the Finance Board expects that accordance with GAAP. It is precisely make such determinations. The Banks will treat the validation exercise because the Banks have large portfolios proposed rule would have required the as an on-going process throughout the of long-term on- and off-balance sheet results of the independent validation to year and not confine the exercise to a positions that are held-to maturity, be reviewed by each Bank’s board of narrow, few-week period. which under GAAP would generally be directors and provided to the Finance The Finance Board also does not valued at historic cost, that a Bank’s Board. As discussed below, the Finance intend that Banks back-test the full financial strength, expressed by its Board has considered the comments model, as is often required for market value of capital, can decline received on the validation requirement traditional VAR models. However, the significantly without that decline being and continues to believe that the Banks should have criteria and reflected in the Bank’s book value of validation requirement is necessary to procedures for reviewing significant capital. A market-to-book value capital assure the continued adequacy of each variations between the estimations test assures that the reported values of Bank’s internal market risk model or generated by the model and actual total and permanent capital are internal cash flow model. In addition, changes in the value of the Bank’s representative of the value of the capital the Finance Board does not view the portfolio or its income. In general, available to absorb losses should a Bank requirement as unduly burdensome significant unexplained variances have to liquidate or unwind its given the critical function that the should result in an expansion of the positions at any given point in time. internal models perform. Therefore, the scope of the validation and review Moreover, contrary to some annual validation requirement has been process. The validation process should comments, the portion of capital charge adopted as proposed. be documented, including documenting calculated using the internal market risk Generally, commenters asked for any reviewer-recommended action, model (i.e., the market value of the clarification of the minimum criteria findings, analysis, or any responses to Bank’s portfolio at risk) does not, in the that should be used in the model identified problems taken by the Bank absence of the 85 percent test, validation process. One commenter and any other relevant supporting
VerDate 11
information. However, the Finance requirement, although one trade lessened the potential for losses from Board would expect each Bank only to association supported the proposal as such risks, or reduced the importance of submit a letter confirming that the reasonable. One of the most often voiced mandating an adequate operations risk required validation exercise has been comment was that the Finance Board capital charge. Further, while many completed for a given year and lacked a sound theoretical basis for commenters questioned the theoretical highlighting any problems that may linking operations risk to market and basis for the operations risk charge, have been identified and any actions credit risk. One commenter noted, none provided alternative empirical that were taken by the board of directors however, that this approach had some methods or analysis for quantifying in response. The more extensive support in regulatory circles. A number operations risk or assessing an adequate documentation, however, should be of commenters felt that a charge equal operations risk charge. available for inspection by Finance to 30 percent of the market and credit Given the difficulties in measuring Board staff. As with other aspects of the risk charges was too onerous, either as operations risk, the Finance Board § 932.5 requirements, the Finance Board a percentage or in absolute terms. A few proposed to use the same approach to expects that the staff of the Banks and commenters welcomed the flexibility operations risk as that provided for the Finance Board will maintain an on- afforded by proposed § 932.6(b) to allow Fannie Mae and Freddie Mac by statute, going discussion of the validation the Banks to develop alternative 12 U.S.C. 4611(c)(2), reasoning that process so that the Banks can be methods of measuring the operations Congress considered and deemed provided with informal or formal risk capital charge. A substantial reasonable for regulatory purposes a guidance on issues that arise. number of commenters also requested linkage between an operations risk The final rule also retains the that the operations risk charge be charge and credit and market risk requirement that the independent eliminated from the capital regulation charges. The Finance Board continues to valuation must be conducted by altogether. After considering all of the believe that the statutory requirement personnel not reporting to the business comments received, the Finance Board established for the other housing GSEs line responsible for conducting business is not persuaded that the operations risk provides a reasonable basis for assessing transactions for the Bank or by an charge should be eliminated and has an operations risk charge. Further, in outside party qualified to make such decided to adopt the regulation as allowing a Bank to reduce its operations determinations. The Finance Board proposed. risk charge by providing an alternative believes that this language implies that In the proposed rule, the Finance method for calculating the operation the validation may be conducted by Board stated that although not required risk charge, the regulation affords the personnel from the Bank’s internal audit by the GLB Act, the operations risk Banks an opportunity to demonstrate department, if qualified, and that it is capital charge was necessary to assure that their operations are less risky than not necessary to explicitly state so in the that the Banks remained adequately the other housing GSEs or that their rule. Given the newness of the modeling capitalized and able to operate in a safe business lines present little operations requirement and the rapid evolution of and sound manner. The Finance Board risk, and thereby, qualify for a lower model sophistication, the Finance Board noted that the credit and market risk operations risk charge. does not consider the validation capital charges in the proposed rule One of the housing GSEs criticized requirement as clarified here to be were not meant to cover unexpected the provision of the proposed rule that overly burdensome. losses that may arise from operations would allow the Banks to reduce their failures, and that a separate capital operations risk charges, stating that it Section 932.6—Operations Risk. charge was needed to protect the Banks would significantly reduce a Bank’s Operations risk is the risk of an from such losses. See 65 FR at 43420– capital. Instead, the GSE suggested that unexpected loss resulting from human 21. The Finance Board continues to the Finance Board compare the Banks’ error, fraud, unenforceability of legal believe that an operations risk capital operations risks to those of leading contracts, or deficiencies in internal charge is a necessary part of any financial institutions and allow for a controls or information systems. As complete and adequate risk-based reduction in the operations risk charge proposed, § 932.6 provided that each capital regulation, and therefore, that it only if a Bank could demonstrate that it Bank’s operations risk capital is authorized to adopt the operations exceeds best practices with regard to requirement would equal 30 percent of risk capital charge in fulfillment of its controlling such risks. In response to the sum of the Bank’s credit and market statutory duties to assure that the Banks this comment, the Finance Board wishes risk capital requirements, but would ‘‘operate in a financially safe and sound to clarify that before it will approve an have allowed a Bank to substitute an manner’’ and ‘‘remain adequately alternative methodology for measuring alternative methodology for calculating capitalized.’’ 12 U.S.C. 1422a(a)(3)(A) operations risk under § 932.6(b) of the the operations risk charge if such and (B), 1422b. final rule, it will expect a Bank to methodology was approved by the Moreover, in proposing the operations demonstrate, using a comprehensive, Finance Board. The proposed rule also risk charge, the Finance Board empirically-based approach, that the allowed a Bank, with Finance Board recognized that there are theoretical alternative methodology adequately approval, to reduce the operations risk difficulties in measuring operations risk. quantifies the Bank’s operations risk. capital requirement by obtaining As a number of commenters pointed Any analysis would have to take into insurance to cover it for operations risk. out, the Finance Board stated in the account the complexity of a particular In no event, however, would a Bank preamble to the proposed regulation Bank’s business and hedging activities have been permitted to reduce its that there was ‘‘currently no generally as well as its internal controls, in-house capital charge for operations risk to less accepted methodology for measuring the expertise and other factors that relate to than 10 percent of the sum of its credit magnitude of operations risk.’’ 65 FR at operations risks. Similarly, in order to and market risk requirements. 43429. However, in acknowledging a receive a reduction in the operations Almost all of the comments received lack of consensus concerning a risk charge for insurance, the Bank by the Finance Board addressed the methodology for quantifying operations would have to demonstrate that the proposed operations risk capital charge. risk, the Finance Board was not in any insurance covers the specific risks faced Commenters generally disagreed with at way conceding that difficulties in by the Bank and provide a least some aspect of the proposed measuring operations risk either comprehensive analysis to justify the
VerDate 11
reduction in the operations risk solely on a supervisory approach to requirement by component amounts, requirement sought by the Bank. While guard against such losses. and its actual total capital amount and the Finance Board will be flexible in the In support of their requests for a permanent capital amount. These types of approaches that it is willing to reduced operations risk capital charge, reported values would have been consider under § 932.6(b), it expects some Banks also cited a study done by calculated as of the last day of the rigorous analysis to support any Bank one of their consultants that estimated preceding month. In the proposed rule, claims before it will approve a reduced an operations risk capital charge at the Finance Board also reserved the capital charge for operations risk, and about ten percent of credit and market right to require the Banks to report this will in every case require the Banks to risk (Study). The Study relied on loss information more frequently. Comments hold operations risk capital equal to at estimates from a small number of received on the reporting requirement least ten percent of credit and market publicly acknowledged operations risk indicated that commenters found risk. Therefore, the Finance Board failures and made some broad reporting capital requirements by the believes that the flexibility provided in assumptions about the Banks’ 15th day of each month to be 932.6(b) will be consistent with operations. The Finance Board has unrealistic. Most commenters suggested achieving sound levels of capital for the reviewed the Study, which is a useful that a reporting date later in the month Banks. initial attempt to measure the Banks’ would be more practical. Several A few commenters also criticized the operations risk. However, while commenters recommended eliminating approach proposed in § 932.6(b) as not recognizing the time constraints under the requirement, but said that if the being flexible enough and suggested that which the Study was completed and the Finance Board retained the requirement, that the regulation should allow a Bank inherent difficulties of measuring it should be moved to the final calendar to decrease its operations risk charge to operations risk, the Finance Board finds day of the month. One commenter zero, where justified. They believed that that the Study is not comprehensive, or recommended moving the reporting the ten percent minimum charge would more specifically, that the data used is requirement to the 20th of the month. create a disincentive for the Banks to incomplete and many of the The Finance Board believes that it is insure against operations risk or take assumptions made were not adequately important to monitor the capital added steps to control operations risk. supported by empirical evidence. Thus, requirements of the Banks to ensure that However, in general, a business can not the Finance Board does not believe that they remain in compliance with the realistically expect to identify or the results of the Study provide a requirements and to identify any eliminate all potential losses from sufficient basis for changing the potential situations that may require computer ‘‘glitches,’’ human error, proposed rule. remedial action, but recognizes that fraud, natural disasters or other similar Along similar lines, some commenters sufficient time must be provided if the unforeseen, and in many cases, argued that the proposed capital charge reported information is to be accurate. was too onerous given the Banks’ uncontrollable events. Nor does it As a result, the Finance Board has historical lack of losses from operational appear possible to insure against events retained the reporting requirement in problems. However, without having to that may arise as part of new the final rule, but has changed the address the accuracy of such views, it is technology, new business processes or reporting date from the 15th day of the clear that the Banks recently have that otherwise may not be identified at month to the 15th business day of the received additional investment any point in time. Thus, the Finance month providing more time for the authority and are entering into new Board believes that it would be Banks to prepare their capital unrealistic, and in the long-run unsafe, business areas. See, e.g., 65 FR 43969 calculations. Currently, the Banks report to remove the minimum operations risk (July 17, 2000) (adopting rules duration of equity and market value of charge contained in the rule. Further, governing acquired member asset equity calculations for the previous the Finance Board believes that the ten- program), 65 FR 44414 (July 18, 2000) month to the Finance Board on the 15th percent floor is in keeping with its (adopting rules expanding eligible business day of each month. The change conservative approach to assessing collateral to support advances and in the reporting date in the final rule to capital charges. procedures for approval of new business A substantial number of commenters activities). While these new activities the 15th business day would add felt that the operations risk charge was may not present new or unique credit or approximately five days providing more too high and should be reduced or market risks, they are likely to result in time for the Banks to prepare their eliminated. A number of commenters changes in existing business and calculations and would be in urged the Finance Board to delete the hedging operations and in the conformance with current reporting operations risk charge and instead, to development of new or more complex requirements for the Banks for market rely on its supervisory oversight to operational processes. The Finance risk measures. Except for the change in protect the Bank System against this Board believes that the likelihood of the reporting date, the Finance Board is risk. While supervision is an important such changes further supports the adopting § 932.7 as proposed. component of any regulatory system, the conservative approach embodied in the Section 932.8—Minimum liquidity changes mandated by the GLB Act operations risk capital charge as requirements require a Bank to hold capital against adopted. Moreover, as with all aspects As proposed, § 932.8 would require the losses from the risks that it faces. of the capital regulation, the Finance each Bank to hold contingency This assures that the enterprise, i.e., the Board is willing to consider changes to liquidity 28 in an amount sufficient to Bank System, and not taxpayers the operations risk capital requirements generally, will bear the risk associated if it is presented with sufficient 28 Contingency liquidity, as defined in the with the Banks’ activities and evidence to justify such amendments. Finance Board regulations, means the sources of operations. Thus, consistent with this cash a Bank may use to meet its operational goal of the GLB Act, the Finance Board Section 932.7—Reporting Requirements requirements when its access to the capital markets believes that permanent capital should Section 932.7 of the proposed rule is impeded, and includes: (1) marketable assets with a maturity of one year or less; (2) self- be held by a Bank against potential would have required each Bank to liquidating assets with a maturity of seven days or losses arising from operations risk, and report to the Finance Board by the 15th less; (3) assets that are generally accepted as that the Finance Board should not rely day of each month its risk-based capital collateral in the repurchase agreement market; and
VerDate 11
enable it to cover its liquidity risk, the Finance Board has decided not to alternative site. A back-up data tape assuming a period of not less than five require a specific liquidity risk capital from OF’s main location is sent and business days of inability to borrow in for the Banks, as suggested by the stored off-site on a daily basis. the capital markets. This requirement is commenter. Rating agencies also consider in addition to meeting the deposit The Banks currently operate under adequate liquidity an important liquidity requirements contained in two general liquidity requirements, both component in a financial institution’s § 965.3 of the Finance Board’s of which are easily met by the Banks. rating. Liquid investments held by the regulations. 12 CFR 965.3. Proposed Under § 965.3 of the Finance Board Banks are stated by Moody’s as one of § 932.8 also specifically stated that an rules, which implements 12 U.S.C. the reasons behind the triple-A rating asset that has been pledged under a 1431(g), the Banks must maintain for the Banks.30 Thus, the Finance repurchase agreement cannot be used to investments in obligations of the United Board believes that the contingency satisfy the contingency liquidity States, deposits in banks or trusts, or liquidity requirement set forth in § 932.8 requirement. As discussed below, the advances to members that mature in 5 is important to maintaining a sound Finance Board received several years or less in an amount equal to the credit rating for the Banks and assuring comments on proposed § 932.8, but did total deposits received from its continued safe and sound operation of not alter the proposed provision in members. In addition, the Banks must the Bank System and access to the response. The Finance Board is, meet a liquidity requirement set forth in capital markets. therefore, adopting § 932.8 as proposed. the FMP that requires each Bank to In the SUPPLEMENTARY INFORMATION Generally, commenters indicated that maintain a daily average liquidity level section of the proposed rule, the because there are already regulations each month in an amount not less than Finance Board asked for comment on that require each Bank to develop a 20 percent of the sum of the Bank’s whether the rule should address the liquidity policy, additional liquidity daily average demand and overnight issue of operational liquidity, and if so, requirements are not necessary. One deposits and other overnight borrowings how it should do so. One commenter commenter indicated that if the Finance during the month, plus 10 percent of the specifically addressed the question Board determines to have additional sum of the Bank’s daily average term posed in the SUPPLEMENTARY liquidity requirements, such a deposits, COs, and other borrowings INFORMATION section of the proposed regulation should be postponed until that mature within one year. See FMP rule. The commenter stated that each after the capital regulation is finalized. section III.C. In addition to these Bank should establish its own Another commenter stated that if the specific requirements, each Bank also operational liquidity policy and that the liquidity regulation is adopted, then the must set standards in its risk Finance Board should not specify a Finance Board should provide guidance management policy for day-to-day specific requirement. After further on how to measure compliance with the operational liquidity 29 and contingency consideration, the Finance Board regulation. In this regard, the Finance liquidity needs that enumerate the believes that the requirements in § 917.3 Board believes that the analytical specific types of investments to be held and § 965.3 of the Finance Board’s framework on liquidity measurement for such liquidity needs and establish regulations sufficiently cover and management specified in the 1992 the methodology to be used for operational liquidity and will not Basle paper serves as a useful guide in determining the Bank’s operational and address it further in its regulations at the measurement of contingency contingency liquidity needs. 12 CFR this time. 12 CFR 917.3, 965.3. liquidity. See ‘‘A Framework for 917.3(b)(3)(iii). Measuring and Managing Liquidity,’’ Neither of the existing liquidity Section 932.9—Limits on Unsecured Basle Committee on Banking requirements is structured to meet the Extensions of Credit Supervision (September 1992). Bank’s liquidity needs should their Section 932.9 of the proposed rule Another commenter believed that the access to the capital markets be limited established maximum capital exposure proposed § 932.8 requirement would not in the short term for any reason. The limits for unsecured extensions of credit be sufficient to avoid the risk that a requirement adopted in § 932.8 is meant by a Bank to a single counterparty or to Bank’s operations would be disrupted to address principally events that may affiliated counterparties and reporting during a significant financial crisis and temporarily disrupt a Bank’s access to requirements for total unsecured credit recommended that to adhere to the credit markets. It may be viewed as exposures and total secured and Basle Accord Capital Standards, the conservative when examined in the unsecured credit exposures to single Bank should hold sufficient capital context of events which could impair counterparties and affiliated against liquidity risk to withstand a the normal operations of the Office of counterparties that exceed certain period of one-to-three months’ inability Finance (OF). The likelihood that there thresholds. to access debt markets. The contingency would be no access to the capital The proposed rule provided that liquidity requirement set forth in § 932.8 markets for as long as five business days unsecured credit exposure by a Bank to is not intended to fully resolve a is extremely remote, given OF’s a single counterparty that would arise situation where the Bank System’s contingency plans to be back in from authorized Bank investments or access to the capital markets is operation within the same business day hedging transactions must not exceed effectively limited for a period of time following a disaster. The OF the maximum capital exposure percent extended more than a few days. See 65 contingency plans include back-up limit applicable to such counterparty, as FR at 43430–31. Furthermore, neither power sources and two back-up set forth in Table 4 of the proposed rule, the Basle Committee nor the banking facilities, plus procedures to back-up multiplied by the lesser of: (i) the Bank’s regulators in the U.S. have indicated their databases at both their main total capital; or (ii) the counterparty’s any desire to propose risk-based capital location as well as the primary Tier 1 capital, or total capital if standards for liquidity risk. Therefore, information on Tier 1 capital is not 29 Operational liquidity, as defined in the Finance available. The maximum capital (4) irrevocable lines of credit from financial Board’s regulations, means sources of cash from institutions rated not lower than the second highest both a Bank’s ongoing access to the capital markets credit rating category by a credit rating organization and its holdings of liquid assets to meet operational 30 ‘‘Moody’s Investor Service, Global Credit regarded as a NRSRO by the Securities and requirements in a Bank’s normal course of business. Research, Moody’s Credit Opinions—Financial Exchange Commission. 12 CFR 917.1. 12 CFR 917.1. Institutions’’, (June 1999).
VerDate 11
exposure percent limits applicable to have a principal regulator) and allows a counterparty or group of affiliated specific counterparties in Table 4 Bank to use some other comparable counterparties. The Finance Board is ranged from a high of 15 percent, for measurement such as equity, owners not imposing System-wide limits due to counterparties with the highest equity, or net worth. the operational difficulties in tracking investment grade rating, to a low of one Most of the commenters that and allocating exposure and thus feels percent for counterparties with a below addressed this section of the proposed that the limits applied to individual investment grade rating. rule opposed the implementation of Banks must be low enough to limit The proposed rule also provided that unsecured credit limits. One commenter System exposure. The Finance Board where a counterparty has received indicated that the limits are tolerable, may solicit additional comments different credit ratings for its but not necessary. Others commented regarding the appropriateness of the transactions with short-term and long- that this section is not pertinent to the limits in a future rulemaking and may term maturities: (i) the higher credit restructuring of Bank capital and consider revising them at that time. rating shall apply for purposes of therefore should be eliminated from the determining the allowable maximum final rule, and one indicated a belief G. Part 933—Bank Capital Structure capital exposure limit under Table 4 that limits on unsecured extensions of Plans applicable to the total amount of credit should be established by each Submission of Plans. Section 933.1(a) unsecured credit extended by the Bank Bank’s board of directors, subject to of the proposed rule would have to such counterparty; and (ii) the lower review by the Finance Board during the required the board of directors of each credit rating shall apply for purposes of examination process. Bank to submit to the Finance Board determining the allowable maximum The Finance Board has long within 270 days after the date of capital exposure limit under Table 4 maintained limits on unsecured publication of the final rule a capital applicable to the amount of unsecured extensions of credit, which currently are plan that complies with part 931 and credit extended by the Bank to such contained in the FMP, and other that, when in effect, would provide the counterparty for the transactions with financial institution regulatory agencies Bank with sufficient total and maturities governed by that rating. The also limit the amount of credit that can permanent capital to meet the minimum proposed rule also provided that if a be extended to one borrower. As regulatory capital requirements counterparty is placed on a credit watch explained in the proposed rule, established by part 932. The proposed for a potential downgrade by an NRSRO, concentrations of unsecured credit by a rule also would have allowed the the Bank would use the credit rating Bank with a limited number of Finance Board to approve a reasonable from that NRSRO at the next lower counterparties or group of affiliated extension of the 270-day period upon a grade. The proposed rule also required counterparties raise safety and demonstration of good cause. As set that the total amount of unsecured soundness concerns because unsecured forth in the GLB Act, the proposal extensions of credit by a Bank to all credit extensions are more likely to would have required a Bank to receive affiliated counterparties may not result in limited recoveries in the event Finance Board approval prior to exceed: (i) the maximum capital of default that secured extensions of implementing its capital plan or any exposure limit applicable under Table 4 credit. Significant credit exposures to a subsequent amendment to the plan. based on the highest credit rating of the few counterparties increase the Proposed § 933.1(b) also stated that if affiliated counterparties; (ii) multiplied probability that a Bank may experience a Bank, for any reason, were to fail to by the lesser of: (A) the Bank’s total a catastrophic loss in the even of default submit a capital plan to the Finance capital; or (B) the combined Tier 1 by one of the counterparties. In contrast, Board within the 270-day period, capital, or total capital if information on holding small credit exposures in a large including any Finance Board approved Tier 1 capital is not available, of all of number of counterparties reduces the extension, the Finance Board would be the affiliated counterparties. probability of a catastrophic loss to a authorized to establish a capital plan for The proposed rule required that the Bank. that Bank, and the Finance Board also Banks report monthly to the Finance Concentrations of credit by multiple would have the discretion to take any Board the amount of the Bank’s total Banks in a few counterparties also may enforcement action against the Bank, its secured and unsecured credit exposures raise safety and soundness concerns at directors, or its executive officers to any single counterparty or group of the Bank System level. It is conceivable authorized by section 2B(a) of the Bank affiliated counterparties that exceeds 5 that some counterparties spread their Act, 12 U.S.C. 1422b(a), or to merge the percent of the Bank’s total assets. exposure among several Banks, which Bank in accordance with section 26 of The principal change made by the may result in large aggregate credit the Bank Act, 12 U.S.C. 1446, into Finance Board in the final rule refined exposures for the Bank System. Such another Bank that has submitted a the calculation of the maximum exposures raise concerns regarding the capital plan. allowable credit exposure to a liquidity of such debt in the event of The Finance Board is adopting counterparty. The proposed rule adverse information regarding a § 933.1(a) and (b) without any material required that the determination be made counterparty. changes, though it has added a new on the basis of the counterparty’s Tier Because the risk-based capital § 933.1(c), which deals with Finance 1 capital, or if Tier 1 capital is not requirement does not take into account Board consideration of the capital plans. available, total capital (as defined by the the increase in credit risk associated Section 933.1(c) provides that upon counterparty’s principal regulator). The with concentrations of credit exposures, receipt of a capital plan from a Bank, the final rule adds another option in the Finance Board believes it is Finance Board may return the plan to situations where Tier 1 capital and necessary, for safety and soundness the Bank if it does not comply with regulatory capital are not available and reasons, to impose separate limits on section 6 of the Bank Act or with any allows a Bank to use in these cases some unsecured credit exposures of a Bank to regulatory requirement, or if it is comparable measure identified by the single counterparties and to affiliated incomplete or materially deficient in Bank. This was added in recognition counterparties. The Finance Board also any other respect. If the Finance Board that there may be unregulated believes that the limits established in accepts a plan for review, it still may counterparties that don’t have this rule are appropriate in order to require the Bank to submit additional regulatory capital (because they do not limit Bank System exposure to a information, as needed to review the
VerDate 11
plan, or to amend the plan, as necessary among commenters, who sought Bank’s capital plan and to deal with to comply with the statute or coordination of the final capital plans unforeseen issues that may arise during regulations. The final rule also provides across the Bank System to avoid a the review period without imperiling that the Finance Board may approve the potentially destabilizing competition the quality of its review. capital plan conditionally, i.e., the and arbitrage of membership and to Contents of Plans. Section 933.2 of approval is contingent upon the Bank preserve the cooperative nature of the the proposed rule would have complying with certain conditions Bank System. The Finance Board implemented the GLB Act provisions stated in the approval resolution from intends to assess the issue of regarding the contents of capital plans the Finance Board. It is well established commonality as part of the approval by requiring each Bank’s capital plan to that an agency’s authority to deny a process, and will consider, for example, address, at a minimum, the classes of regulatory submission includes the differences between the plans on capital stock, capital stock issuance, authority to approve an application matters such as the minimum membership investment or fee structure, subject to certain conditions, which the investment, including both membership transfer of capital stock, termination of Finance Board will do as circumstances and activity-based stock purchase membership, independent review of the dictate. The final rule further provides requirements, dividend policy, and capital plan, and implementation of the that the Finance Board may require that voting preferences. It is only by making plan. The Finance Board received the capital plans for all twelve Banks such comparisons that the Finance relatively few comments on this take effect on the same date. This issue Board will be able to assess accurately provision. Among those parties was raised by several commenters, who the possibility that the differences commenting, one Bank contended that contended that the joint-and-several among the plans might encourage the GLB Act requirement that members liability of the Banks on their members of one Bank to relocate to promptly comply with any amendments consolidated obligations may require another Bank in order to benefit from to the minimum investment would that the individual Banks not operate what they perceive to be a more constitute an ‘‘unlimited capital call’’ on under materially different capital advantageous Bank capital structure. the assets of the members should the financial condition of the Bank structures, as such an arrangement The Finance Board has not imposed deteriorate. Other commenters could result in some Banks bearing a any time limits for its review of the recommended that the final rule require portion of the risks created by the other individual capital plans. Though the Banks. The Finance Board believes that each Bank to submit the capital plans to Congress spoke precisely to when the its members for their approval prior to the concern expressed by the Finance Board must promulgate the commenters merits some consideration submitting the plan to the Finance final rule and when the Banks must Board, and that the plans themselves be and has addressed the issue by reserving submit their capital plans for review, it to itself the right to set a uniform subject to public comment. Most of the was silent on the issue of Finance Board revisions made in the final rule have effective date for the capital plans of all review of the individual plans. Given of the Banks. The Finance Board will been added in order to conform § 933.2 that silence, and the possible variables to the revisions that have been made to decide whether to do so after reviewing that could affect the Finance Board’s the plans submitted by the Banks, and part 931 of the final rule. The most review of each plan, the Finance Board significant change to § 933.2 is the is not prepared to mandate in the final is not prepared to establish time periods rule that all of the plans must take effect inclusion of § 933.2(a), which relates to in the final rule within which it must the minimum investment that each on the same date. Most of the comments act on the capital plans. The length of Bank must establish for its members. on § 933.1 dealt with timeframes for time that it will take the Finance Board Generally speaking, those changes review of capital plans, and the to review each capital plan will depend reflect the amendments made to § 931.3 ‘‘commonality’’ of plans. Two Bank on a number of factors, including the of the final rule, which added the commenters suggested that the final rule quality of the initial submission, the minimum investment provisions to part impose a time limit for Finance Board timing of the submissions, and the 931 and which have been described review of the plans, while another Bank approval of certain models to be used by previously. The final rule provides that recommended a procedure and the Banks on which capital plan each Bank’s capital plan must require timeframe for addressing capital plan approvals are contingent. For all of each member to purchase and maintain amendments. Other commenters those reasons, and with so many a minimum investment in the capital suggested an expedited review process, unknown factors, the Finance Board stock of the Bank in accordance with or possibly pre-approval, for certain does not believe that it is in the best § 931.3, and must prescribe the manner types of amendments to the capital plan interest of the agency or the Banks to in which the minimum investment is to during the initial implementation establish a time limit for Finance Board be calculated. The capital plan must period and recommended that the rule review of the plans. Nonetheless, the require each member to maintain its require each Bank to include in its plan Finance Board is committed to minimum investment in the Bank’s provisions to address simply and reviewing each plan in as expeditious a stock for as long as it remains a member quickly any unintended consequences manner as is possible and encourages and, with regard to Bank stock that may arise as the Banks implement the Banks to communicate with the purchased to support an advance or their capital plans. Finance Board as issues arise during the other business activity, for as long as the Many commenters suggested, to development of their capital plans. The advance or business activity remains assure safety and soundness, Finance Board believes such outstanding. coordination of the System as a whole communication during the development The final rule also requires the capital and an appropriate degree of of the plans can aid immeasurably in plan to specify the amount and class (or commonality among plans, that the eliminating potential problems that classes) of Bank stock that an institution Finance Board approve all of the Banks’ might otherwise delay the Finance is required to own in order to become capital plans at the same time or not Board’s consideration of the capital and remain a member of the Bank, as approve any one plan until it has plans. That approach will ensure that well as the amount and class (or classes) received plans from all of the Banks. the Finance Board has the opportunity that a member must own in order to Commonality was a common theme to fully and completely review each obtain advances from, or to engage in
VerDate 11
other business transactions with, the A number of commenters criticized requirement to ‘‘comply promptly’’ with Bank. If a Bank issues both Class A and the provision in the proposed rule that the revised minimum investment is Class B stock and the board of directors would have required members to viewed by some as creating an open- of that Bank authorizes the members to ‘‘comply promptly’’ with any ended obligation on the part of the satisfy their minimum investment adjustment to the minimum investment members to guarantee the capital through the purchase of some required under the capital plan for a adequacy of the Banks. To those parties, combination of Class A and Class B Bank. The principal objection was that this obligation would effectively require stock, the capital plan must specify the provision is tantamount to an the members to pay to the Banks, for the what combinations of stock are ‘‘unlimited call’’ by the Bank on the purchase of additional Bank stock, authorized. If the Bank were to assets of the members to support the whatever amounts might be demanded authorize only one combination of Class capital of the Bank, which could by the Banks. The Finance Board does A and Class B stock for the members to discourage institutions from remaining not share the view of those commenters purchase, the members would be members after the capital plans take that this provision constitutes an limited to whatever combination had effect. As an initial matter, the ‘‘unlimited call’’ on the assets of the been approved by the Bank’s board of requirements that each capital plan members of each Bank. Although the directors. Consistent with part 931, as ‘‘impose a continuing obligation on the GLB Act does require the members of a well as with the GLB Act, § 933.2(a)(3) board of directors of the bank to review Bank to comply promptly with any of the final rule provides the Banks with and adjust the minimum investment increased minimum investment several alternatives for structuring their required of each member of that bank, requirement, it does not provide any minimum investment. Thus, a capital as necessary to ensure that the bank means for a Bank to compel payment plan may establish a minimum remains in compliance with applicable from any members that decline to investment that is calculated as a minimum capital levels’’ and to purchase the additional amounts of percentage of the total assets of the ‘‘require each member to comply Bank stock. Indeed, it is not clear that member, as a percentage of the advances promptly with any adjustments to the either the Banks or the Finance Board outstanding to the member, as a required minimum investment’’ are has any legal authority to compel a statutory requirements and the Finance percentage of the other business member to pay to its Bank any amounts Board cannot delete them from the final activities conducted with the member, that the member does not want to pay. rule. 12 U.S.C. 1426(c)(1)(D). In the absence of any ability of either on any other basis approved by the Historically, the amount of Bank stock Finance Board, or on any combination the Bank or the Finance Board to that each member must own was set by compel payment, the Finance Board of the above. This affords each Bank the statute as the greater of 1 percent of the latitude to tailor its minimum does not believe that this provision can member’s mortgage assets or 5 percent reasonably be construed to impose an investment to the needs of its members, of the advances outstanding to the and recognizes that each Bank may have unlimited call on the assets of any member. In the GLB Act, the Congress member. a different operating philosophy and repealed the statutory stock purchase may wish, for example, to establish requirements and replaced them with That is not to say that a member’s relatively lower activity-based stock provisions directing each Bank to refusal to comply promptly with the purchase requirements and relatively establish a ‘‘minimum investment’’ for stock purchase requirement of the higher membership stock purchase its members. Aside from giving the Bank’s capital plan would be without requirements, or vice versa. However a Banks different options for how the consequences for the member. For Bank decides to structure its minimum minimum investment could be instance, a member that refused to investment, the final rule requires that structured, Congress largely left the comply with an amended minimum the minimum investment be set at such details of the minimum investment to investment requirement would be in a level as to provide sufficient capital the Banks. That delegation to the Banks violation of section 6(c)(1)(D) of the for the Bank to comply with its was subject, however, to a statutory Bank Act, as well as with the provisions minimum capital requirements, as requirement that whatever method a of the capital regulations. If a member specified in part 932. The final rule also Bank chose for its minimum investment violates those provisions, it will provide requires the plan to require the board of must provide sufficient permanent and the Bank with grounds to terminate its directors of the Bank to monitor and, as total capital for the Bank to meet the membership involuntarily, in necessary, to adjust, the minimum risk-based and leverage capital accordance with section 6(d)(2) of the investment to ensure that the stock that requirements established by the GLB Bank Act, as amended by the GLB Act. the members are required to purchase Act. As a trade-off for allowing the 12 U.S.C. 1426(c)(1)(D), (d)(2). remains sufficient to allow the Bank to Banks to establish the details of the Moreover, depending on the terms of comply with its minimum capital minimum investment, the Congress the advances agreements or other requirements. The final rule further imposed two new requirements. One agreements between the Bank and its provides that the plan shall require each requirement imposed on the board of member, a refusal to comply with the member to comply with any such directors of each Bank a ‘‘continuing minimum investment may constitute an adjusted minimum investment, but may obligation’’ to review and, as necessary, event of default under such agreements permit a member a reasonable period of to adjust the minimum investment that would allow the Bank to take time within which to come into required of each member to ensure that certain other actions, such as calling compliance with the adjusted minimum the Bank remains in compliance with due all outstanding advances to that investment. The final rule expressly the GLB Act capital requirements. The member, liquidating its collateral, or provides that a Bank may permit a other requirement imposed on the suspending dividend payments to that member to comply with an adjusted members an obligation to ‘‘comply member, or may give the Bank grounds minimum investment by reducing its promptly’’ with any revisions to the for a civil action against the member. outstanding business with the Bank to a minimum investment established by How the Banks and members resolve level that would be fully supported by that Bank. these issues will depend in large part on its existing investment in the stock of As the Finance Board understands the the particular circumstances of each the Bank. criticisms of this aspect of the law, the case. As a fundamental matter, however,
VerDate 11
the Banks are cooperatives and as such or other transactions may mature or such retained earnings or paid-in must look solely to their members as the otherwise terminate in the short term. surplus of the Bank except through the source of the capital needed to support The Finance Board notes, however, that declaration of a dividend or a capital the business conducted by the Banks it would not be a safe or sound practice distribution approved by the board of with their members. As members of a for the Bank to carry undercapitalized directors of the Bank, or through the cooperative, the members of a Bank assets on its books for more than a liquidation of the Bank. have an obligation to provide the Bank relatively brief period, nor would it be Section 933.2(c) of the final rule with the capital that the Banks are equitable to other members that requires the capital plan to establish the required to hold in order to support the promptly purchase the additional stock manner in which the Bank will pay risks attendant to the business that they to allow disparate stock purchase dividends, if any, on each class or conduct with their members. Under the requirements to remain outstanding for subclass of stock, and shall provide that GLB Act, membership is voluntary for a significant period. the Bank may not declare or pay any all institutions, as are the transactions It also should be noted that a Bank dividends if it is not in compliance with that a member initiates with its Bank. If cannot unilaterally increase the any capital requirement or if, after an institution wishes to remain a minimum investment that it requires of paying the dividend, it would not be in member of a Bank, or if it wishes to its members. By law, the minimum compliance with any capital obtain (or retain) advances from its investment must be specified in the requirement. Bank, it simply cannot refuse to provide capital plan, which must be approved Section 933.2(d) of the final rule the Bank with the capital that the GLB by the Finance Board. Thus, in order for requires the capital plan to address Act requires the Bank to have for such a Bank to increase its minimum issues relating to initial issuance of the transactions. That does not mean that investment, the board of directors of the Class A and/or Class B capital stock, to the Bank has an unlimited call on the Bank would have to authorize the specify the date on which the Bank will assets of the member. It does mean that amendment to the capital plan and its implement the new capital structure, to the Banks will be required to manage submission to the Finance Board. establish the manner in which the Bank actively the important relationships Moreover, it is by no means certain that will issue stock to its existing members, they maintain with their members, and the Bank will ask to apply the increased as well as to eligible institutions that that members may be required, from minimum investment to all of its subsequently become members, and to time to time, to reevaluate the outstanding business with its members. address how the Bank will retire the economics of remaining a member of the Depending on the circumstances, it is stock that is outstanding as of the Bank. If the costs of continued possible that a Bank could ask that the effective date, including stock held by a membership exceed the benefits that the minimum investment be approved only member that does not affirmatively elect to convert or exchange its existing stock member expects to receive from being a for new business and that it could ask to either Class A or Class B stock, or member, then the member can withdraw for a transition period for the members some combination thereof. voluntarily from membership or can to adjust their stock holdings for their existing business with the Banks. Section 933.2(e) of the final rule allow the Bank to terminate its requires the capital plan to set forth the membership for noncompliance with Regardless of the content of the submission, the Finance Board would criteria for stock transactions, including the Bank Act. In either event, the the issuance, redemption, repurchase, decision of the member will be a review the amendment in the same manner as it reviews the initial capital transfer, and retirement of all Bank voluntary decision based on the plan and, presumably, would approve stock. The capital plan also must economics of the situation, which is the plan. It will only be after the provide that the Bank may not issue precisely the type of decision that the Finance Board has approved the stock other than in accordance with members make every day in the conduct amendment that the Bank could impose § 931.2; that the stock of the Bank may of their business. the revised minimum investment on its be issued only to and held only by the The Finance Board recognizes that members. members of that Bank; and that the ‘‘comply promptly’’ does not necessarily As required by the GLB Act, § 933.2(b) stock of the Bank may be transferred mean that a member must comply with of the final rule also requires that the only in accordance with § 931.6, and an adjusted minimum investment capital plan specify the class or classes may be traded only between the Bank immediately, and has included in the of stock (including subclasses, if any) and its members. The capital plan may final rule a provision that allows a Bank that the Bank will issue, and establish provide for a minimum investment for to establish a reasonable period of time the par value, rights, terms, and members that purchase Class B stock for the members to comply with the new preferences associated with each class that is lower than the minimum minimum investment. As a practical (or subclass) of stock. The final rule investment for members that purchase matter, this is most apt to be an issue allows a Bank to establish preferences Class A stock, provided that the level of only with regard to advances or other that are related to, but not limited to, the investment is sufficient for the Bank to transactions that are already on the dividend, voting, or liquidation rights comply with its regulatory capital books of the Bank at the time that the for each class or subclass of Bank stock. requirements. The capital plan must minimum investment is adjusted. With Any voting preferences established by specify the fee, if any, to be imposed on respect to advances and other the Bank pursuant to § 915.5 shall a member that cancels a request to transactions initiated subsequent to the expressly identify the voting rights that redeem Bank stock, and must specify revised minimum investment are conferred on each class of stock with the period of notice that the Bank will provisions, the Finance Board expects regard to the election of Bank directors. provide to a member before the Bank, on that the members will purchase the As specified in the GLB Act, the final its own initiative, determines to required amount of Bank stock prior to rule also requires that the capital plan repurchase any excess Bank stock from closing the new transaction. With provide that the owners of the Class B a member. respect to outstanding transactions, the stock own the retained earnings, and As required by the GLB Act, § 933.2(f) Bank will determine what constitutes a paid-in surplus of the Bank, but shall of the final rule requires the capital plan reasonable period of time, and may take have no right to withdraw or otherwise to address the manner in which the into consideration the fact that advances receive distribution of any portion of Bank will provide for the disposition of
VerDate 11
its capital stock that is held by that each Bank will submit its capital part 960 with part 956, which sets forth institutions that terminate their plan to the Finance Board on or before the authority for the Banks to make membership, and the manner in which the statutory deadline. specific investments. The items that the Bank will liquidate claims against would have been authorized as off- H. Parts 956, 960 and 966 its members, including claims resulting balance sheet transactions in proposed from the prepayment of advances prior The final rule amends § 966.8 by part 960 are now authorized under new to their stated maturity. adding new paragraph (d) which sets § 956.5. The Finance Board also made a Under § 933.2(g) of the final rule, each forth requirements for the issuance of conforming change to the list of Bank’s capital plan must demonstrate consolidated obligations denominated transactions authorized under § 956.5 of that the Bank has made a good faith in foreign currencies or linked to equity the final rule to recognize that under the determination that the Bank will be able or commodity prices. This provision AMA programs, Banks may enter into to implement the plan as submitted and was proposed in the capital regulation commitments to purchase loans that that the Bank will be in compliance as part of § 932.5(b)(5). Because § 932.5 may be recorded as off-balance sheet with its regulatory total capital generally addresses requirements items. requirement and its regulatory risk- governing the Banks’ internal market In addition, one comment was based requirement after the plan is risk capital models, the Finance Board received on proposed part 960. It implemented. As required by the GLB has determined that it would be more requested the Finance Board to add Act, the final rule requires each Bank to appropriate for these requirements standby bond purchase agreements to conduct a review of its plan by an relating to the issuance of consolidated the list of authorized off-balance sheet independent certified public accountant obligations to appear in part 966 of the transactions. Given the brevity of the prior to submission to the Finance Finance Board’s regulations, which comment, Finance Board staff has Board, to ensure, to the extent possible, concerns the issuance of consolidated sought additional information and that implementation of the plan would obligations. As such, the requirements clarification from the commenters on not result in the write-down of the governing the issuance of consolidated this request and is still studying the redeemable stock owned by its obligations denominated in foreign issues involved. Thus, the Finance members, and must conduct a separate currencies or linked to equity or Board has determined not to address review by at least one NRSRO to commodity prices that were proposed in this issue at this time but may do so at determine, to the extent possible, § 932.5(b) are being adopted in the final some future date. whether the implementation of the plan rule without substantive change as a The Finance Board did not receive would have a material effect on the new paragraph (d) to § 966.8. any specific comments on the credit rating of the Bank. The final rule Conforming changes to § 956.3(b), amendments to part 956 that were requires each Bank to submit a copy of which reference the requirements of proposed as part of the capital each report to the Finance Board at the new § 966.8(d), have also been adopted. regulation. These proposed amendments time it submits its proposed capital These conforming changes to § 956.3(b) were adopted with the changes plan. were not part of the proposed regulation discussed above. Though some commenters but do not alter the substance of III. Paperwork Reduction Act recommended that the final rule require recently adopted § 956.3. 65 FR 43969, the Banks to submit their capital plans 43986 (July 17, 2000). Instead, they As part of the notice of proposed to their members for approval prior to merely provide a cross reference to the rulemaking, the Finance Board submitting the plans to the Finance requirements in part 966. The Finance published a request for comments Board, the Finance Board has not Board also proposed to add new part concerning the collection of information included such a requirement in the final 960 of its regulations in the proposed contained in §§ 931.7 through 931.9 and rule. Nothing in the GLB Act requires capital regulation. The new part would 933.2(c)(2) of the proposed rule. The member approval of capital plans, nor have authorized the Banks to engage in Finance Board submitted the proposed indicates how such a vote would be specific off-balance sheet transactions, collection of information, and conducted. The Finance Board notes including derivative contracts, and set accompanying analysis, to the Office of that the interests of the members are forth requirements that the Banks must Management and Budget (OMB) for represented by the elected directors of document non-speculative use of any review in accordance with section each Bank, each of whom is an officer derivative instruments that do not 3507(d) of the Paperwork Reduction or a director of a member and who qualify as hedging instruments under Act, 44 U.S.C. 3507(d). The Finance collectively constitute a majority of the GAAP. These changes would have Board received no comments on the board of each Bank. Moreover, the GLB adopted authority that already existed proposed information collection. Act expressly charges the board of in the FMP. OMB has approved the proposed directors of each Bank with the As already discussed, recent changes information collection without responsibility for developing a capital in accounting standards for derivatives conditions and assigned control number plan that, among other things, ‘‘is best means that derivatives can no longer be 3069–0059 with an expiration date of suited for the condition and operation of considered purely off-balance sheet November 30, 2003. Likely respondents the bank and the interest of the items. Further, some of the other and/or record keepers will be Banks and members of the bank.’’ The Finance transactions that would have been Bank members. The Banks will use the Board further notes, however, that there authorized under proposed part 960 information collection to implement is nothing in the GLB Act that would could also be on-balance sheet under their new capital structures, determine prohibit a Bank from soliciting the certain circumstances. The Finance requirements for member ownership of views of its members in creating the Board did not wish to imply that if Bank stock, and determine whether capital plan or from seeking the accounting treatment required one of Bank members satisfy the statutory and approval of the members prior to the transactions listed in proposed part regulatory capital stock requirements. submitting the capital plan to the 960 to be on the Bank’s balance sheet See 12 U.S.C. 1426. Responses are Finance Board. Regardless of how a that the transaction would not be mandatory and are required to obtain or Bank addresses the issue of member authorized. Thus, in the final rule the retain a benefit. See 12 U.S.C. 1426. As involvement, the Finance Board expects Finance Board has combined proposed a result of reorganization and revision of
VerDate 11
certain proposed provisions in the final Reporting and recordkeeping accordance with the minimum rule, the information collections are requirements. investment established by the capital now located in §§ 931.3 and 933.2(e)(4) plan for that Bank, provided, however, 12 CFR Part 925 of the final rule. Proposed § 931.9, that for any members whose Bank stock which required a Bank and member to Credit, Federal home loan banks, is less than the minimum investment agree on a plan to divest Bank stock to Reporting and recordkeeping during a transition period, the amount meet certain concentration limits, is not requirements. of stock to be used in the designation of included in the final rule and, therefore, 12 CFR Parts 930, 931, 932 and 933 directorships shall be the number of there is no information collection shares of Bank stock actually owned by required in this connection. Capital, Credit, Federal home loan those members as of December 31st. In The final capital rule does not banks, Investments, Reporting and all cases, the Finance Board shall substantively or materially modify the recordkeeping requirements. designate the directorships by using the approved information collection. 12 CFR Part 956 information provided by the Banks in Potential respondents are not required the capital stock report required by Community development, Credit, to respond to the collection of § 915.4. The Finance Board shall Federal home loan banks, Housing, information unless the regulation allocate the elective directorships Investments, Reporting and collecting the information displays a among the states as follows: recordkeeping requirements. currently valid control number assigned * * * * * by OMB. See 44 U.S.C. 3512(a). 12 CFR Part 966 (3) If the number of elective The following is the estimated annual Federal home loan banks, Securities. directorships allocated to any State reporting and recordkeeping hour Accordingly, the Federal Housing pursuant to paragraphs (b)(1) and (b)(2) burden as approved by OMB: Finance Board amends title 12, chapter of this section is less than the number a. Number of respondents: 7,512 IX of the Code of Federal Regulations, allocated to that State on December 31, b. Total annual responses: 52,500 as follows: 1960, as specified in § 915.15, the Percentage of these responses collected Finance Board shall allocate such electronically: 0% PART 915—BANK DIRECTOR additional elective directorships to that c. Total annual hours requested: 900,648 ELIGIBILITY, APPOINTMENT AND State until the total allocated equals the The following is the estimated annual ELECTIONS number allocated to that State on reporting and recordkeeping cost December 31, 1960; burden as approved by OMB: 1. The authority citation for part 915 continues to read as follows: * * * * * a. Total annualized capital/startup costs: 3. Revise § 915.4 to read as follows: 0 Authority: 12 U.S.C. 1422a(a)(3), 1422b(a), b. Total annual costs (O&M): 0 1426, 1427, and 1432. § 915.4 Capital stock report. c. Total annualized cost requested: 2. Amend § 915.3 by revising the (a) On or before April 10 of each year, $46,717,758.48 introductory text of paragraph (b) and each Bank shall submit to the Finance Comments regarding the collection of paragraph (b)(3) to read as follows: Board a capital stock report that information may be submitted in indicates, as of the record date, the writing to the Finance Board at 1777 F § 915.3 Director elections. number of members located in each Street, N.W., Washington, D.C. 20006, * * * * * voting state in the Bank’s district, the and to the Office of Information and (b) Designation of elective number of shares of Bank stock that Regulatory Affairs of OMB, Attention: directorships. The Finance Board each member (identified by its docket Desk Officer for Federal Housing annually shall designate each elective number) was required to hold, and the Finance Board, Washington, D.C. 20503. directorship as representing the number of shares of Bank stock that all IV. Regulatory Flexibility Act members that are located in a particular members located in each voting state state. The Finance Board shall conduct were required to hold. If a Bank has The final rule would apply only to the the annual designation of directorships issued more than one class of stock, it Finance Board and to the Banks, which for each Bank based on the number of shall report the total shares of stock of do not come within the meaning of shares of Bank stock required to be held all classes required to be held by the small entities as defined in the by the members in each state as of members. The Bank shall certify to the Regulatory Flexibility Act (RFA). See 5 December 31 of the preceding calendar Finance Board that, to the best of its U.S.C. 601(6). Thus, in accordance with year. If a Bank has issued more than one knowledge, the information provided in section 605(b) of the RFA, 5 U.S.C. class of stock, the Finance Board shall the capital stock report is accurate and 605(b), the Finance Board hereby designate the directorships for that Bank complete, and that it has notified each certifies that the final rule will not have based on the combined number of member of its minimum capital stock a significant impact on a substantial shares required to be held by the holdings pursuant to § 925.22(b)(1) of number of small entities. members in each state. For purposes of this chapter. List of Subjects conducting the designation, if a Bank’s (b) If a Bank’s capital plan was not in capital plan was not in effect on the effect as of the record date, the number 12 CFR Part 915 immediately preceding December 31st, of shares of Bank stock that the Banks, banking, Conflict of interests, the number of shares of Bank stock that members are required to hold as of the Elections, Ethical conduct, Federal the members were required to hold as of record date shall be determined in home loan banks, Financial disclosure, that date shall be determined in accordance with § 925.20 and § 925.22. Reporting and recordkeeping accordance with § 925.20 and § 925.22. If a Bank’s capital plan was in effect as requirements. If a Bank’s capital plan was in effect on of the record date, the number of shares the immediately preceding December of Bank stock that the members were 12 CFR Part 917 31st, the number of shares of Bank stock required to hold as of that date shall be Community development, Credit, that the members were required to hold determined in accordance with the Federal home loan banks, Housing, as of that date shall be determined in minimum investment established by the
VerDate 11
capital plan for that Bank, provided, class of stock, the members with voting total assets at which the Bank intends to however, that for any members whose rights shall remain subject to the operate. The target operating capital-to- Bank stock is less than the minimum provisions of Section 7(b) of the Act that assets ratios to be specified in the risk investment during a transition period, prohibit any member from casting any management policy shall be in excess of the amount of Bank stock to be reported vote in excess of the average number of the minimum leverage and risk-based shall be the number of shares of Bank shares of stock required to be held by all capital ratios and may be expressed as stock actually owned by those members members in its state. a range of ratios or as a single ratio; as of the record date. 5. Amend § 915.6 by revising * * * * * 4. Revise § 915.5 to read as follows: paragraph (a)(3) to read as follows: 9. Amend § 917.9 by designating the existing text as paragraph (a) and adding § 915.5 Determination of member votes. § 915.6 Elective director nominations. a new paragraph (b) to read as follows: (a) In general. Each Bank shall (a) * * * determine, in accordance with this (3) An attachment indicating the § 917.9 Dividends. section, the number of votes that each name, location, and docket number of * * * * * member of the Bank may cast for each every member in the member’s voting (b) The requirement in paragraph (a) directorship that is to be filled by the state, and the number of votes each such of this section that dividends shall be vote of the members that are located in member may cast for each directorship computed without preference shall a particular state. to be filled in the election, as cease to apply to any Bank that has (b) Number of votes. For each determined in accordance with § 915.5. established any dividend preferences for directorship that is to be filled in an * * * * * one or more classes or subclasses of its election, each member that is located in capital stock as part of its approved the state to be represented by the 6. Amend § 915.7 by adding a new sentence at the end of paragraph (b)(2) capital plan, as of the date on which the directorship shall be entitled to cast one capital plan takes effect. vote for each share of Bank stock that to read as follows: the member was required to hold as of § 915.7 Eligibility requirements for elective PART 925—MEMBERS OF THE BANKS the record date. Notwithstanding the directors. 10. The authority citation for part 925 preceding sentence, the number of votes * * * * * continues to read as follows: that any member may cast for any one (b) * * * directorship shall not exceed the (2) * * * For purposes of this Authority: 12 U.S.C. 1422, 1422a, 1422b, average number of shares of Bank stock paragraph, the term appropriate federal 1423, 1424, 1426, 1430, 1442. that were required to be held by all regulator has the same meaning as the 11. Revise § 925.24 to read as follows: members located in that state as of the term ‘‘appropriate Federal banking record date. If a Bank has issued more agency’’ in section 3(q) of the Federal § 925.24 Consolidations involving members. than one class of stock, it shall calculate Deposit Insurance Act (12 U.S.C. the average number of shares separately 1813(q)), and, for federally insured (a) Consolidation of members. Upon for each class of stock and shall apply credit unions, shall mean the National the consolidation of two or more those limits separately in determining Credit Union Administration, and the institutions that are members of the the maximum number of votes that any term appropriate State regulator means same Bank into one institution member owning that class of stock may any State officer, agency, supervisor, or operating under the charter of one of the cast in the election. If a Bank’s capital other entity that has regulatory authority consolidating institutions, the plan was not in effect as of the record over, or is empowered to institute membership of the surviving institution date, the number of shares of Bank stock enforcement action against, a member. shall continue and the membership of that a member was required to hold as each disappearing institution shall of the record date shall be determined * * * * * terminate on the cancellation of its in accordance with § 925.20 and PART 917—POWERS AND charter. Upon the consolidation of two § 925.22. If a Bank’s capital plan was in RESPONSIBILITIES OF BANK or more institutions, at least two of effect as of the record date, the number BOARDS OF DIRECTORS AND which are members of different Banks, of shares of Bank stock that a member SENIOR MANAGEMENT into one institution operating under the was required to hold as of the record charter of one of the consolidating date shall be determined in accordance 7. The authority citation for part 917 institutions, the membership of the with the minimum investment is revised to read as follows: surviving institution shall continue and established by the Bank’s capital plan, the membership of each disappearing Authority: 12 U.S.C. 1422a(a)(3), provided, however, that for any 1422b(a)(1), 1426, 1427, 1432(a), 1436(a), institution shall terminate upon members whose Bank stock is less than 1440. cancellation of its charter, provided, the minimum investment during a however, that if more than 80 percent of transition period, the amount of Bank 8. Amend § 917.3(b)(1) to read as the assets of the consolidated institution stock to be used shall be the number of follows: are derived from the assets of a shares of Bank stock actually owned by disappearing institution, then the those members as of the record date. § 917.3 Risk management. consolidated institution shall continue (c) Voting preferences. If the board of * * * * * to be a member of the Bank of which directors of a Bank includes any voting (b) * * * that disappearing institution was a preferences as part of its approved (1) After the Finance Board has member prior to the consolidation, and capital plan, those preferences shall approved a Bank’s capital plan, but the membership of the other institutions supercede the provisions of paragraph before the plan takes effect, the Bank shall terminate upon the effective date (b) of this section that otherwise would shall amend its risk management policy of the consolidation. allow a member to cast one vote for each to describe the specific steps the Bank (b) Consolidation into nonmember— share of Bank stock it was required to will take to comply with its capital plan (1) In general. Upon the consolidation of hold as of the record date. If a Bank and to include specific target ratios of a member into an institution that is not establishes a voting preference for a total capital and permanent capital to a member of a Bank, where the
VerDate 11
consolidated institution operates under stock that the consolidated institution is cancellation notice to the Bank. A Bank the charter of the nonmember required to own shall be as provided in may impose a fee on a member that institution, the membership of the § 925.20 and § 925.22. If the capital plan cancels a notice of withdrawal, disappearing institution shall terminate for the Bank has taken effect, the provided that the fee or the manner of upon the cancellation of its charter. amount of stock that the consolidated its calculation is specified in the Bank’s (2) Notification. If a member has institution is required to own shall be capital plan. consolidated into a nonmember that has equal to the minimum investment (2) A Bank shall notify the Finance its principal place of business in a state established by the capital plan for that Board within 10 calendar days of receipt in the same Bank district as the former Bank. of any notice of withdrawal or notice of member, the consolidated institution (6) Disapproval of membership. If the cancellation of withdrawal from shall have 60 calendar days after the Bank disapproves the application for membership. cancellation of the charter of the former membership of the consolidated (b) Effective date of withdrawal. The member within which to notify the institution, the Bank shall require the membership of an institution that has Bank of the former member that the liquidation of any outstanding submitted a notice of withdrawal shall consolidated institution intends to indebtedness owed by, and the terminate as of the date on which the apply for membership in such Bank. If settlement of all other outstanding last of the applicable stock redemption the consolidated institution does not so business transactions with, the former periods ends, unless the institution has notify the Bank by the end of the period, member, and shall redeem or cancelled its notice of withdrawal prior the Bank shall require the liquidation of repurchase the Bank stock owned by the to that date. any outstanding indebtedness owed by former member in accordance with (c) Stock redemption periods. The the former member, shall settle all § 925.29. receipt by a Bank of a notice of outstanding business transactions with (c) Dividends on acquired Bank stock. withdrawal shall commence the the former member, and shall redeem or A consolidated institution shall be applicable 6-month and 5-year stock repurchase the Bank stock owned by the entitled to receive dividends on the redemption periods, respectively, for all former member in accordance with Bank stock that it acquires as a result of of the Class A and Class B stock held by § 925.29. a consolidation with a member in that member that is not already subject (3) Application. If such a consolidated accordance with § 931.4(a) of this to a pending request for redemption. In institution has notified the appropriate Chapter. the case of an institution the Bank of its intent to apply for (d) Stock transfers. With regard to any membership of which has been membership, the consolidated transfer of Bank stock from a terminated as a result of a merger or institution shall submit an application disappearing member to the surviving or other consolidation into a nonmember for membership within 60 calendar days consolidated member, as appropriate, or into a member of another Bank, the of so notifying the Bank. If the for which the approval of the Finance applicable stock redemption periods for consolidated institution does not submit Board is required pursuant to section any stock that is not subject to a an application for membership by the 6(f) of the Act, 12 U.S.C. 1426(f), as in pending notice of redemption shall be end of the period, the Bank shall require effect prior to November 12, 1999, such deemed to commence on the date on the liquidation of any outstanding transfer shall be deemed to be approved which the charter of the former member indebtedness owed by the former by the Finance Board by compliance in is cancelled. member, shall settle all outstanding all applicable respects with the (d) Certification. No institution may business transactions with the former requirements of this section. withdraw from membership unless, on member, and shall redeem or (The Office of Management and Budget has the date that the membership is to repurchase the Bank stock owned by the approved the information collection terminate, there is in effect a former member in accordance with contained in this section and assigned certification from the Finance Board § 925.29. control number 3069–0004 with an that the withdrawal of a member will (4) Outstanding indebtedness. If a expiration date of April 30, 2001.) member has consolidated into a not cause the Bank System to fail to nonmember institution, the Bank need § 925.25 [Removed] satisfy its requirements under 12 U.S.C. not require the former member or its 12. Remove § 925.25. 1441b(f)(2)(C) to contribute toward the interest payments owed on obligations successor to liquidate any outstanding 13. Revise § 925.26 to read as follows: indebtedness owed to the Bank or to issued by the Resolution Funding redeem its Bank stock, as otherwise may § 925.26 Voluntary withdrawal from Corporation. membership. be required under § 925.29, during: (The Office of Management and Budget has (i) The initial 60 calendar-day (a) In general. (1) Any institution may approved the information collection notification period; withdraw from membership by contained in this section and assigned (ii) The 60 calendar-day period providing to the Bank written notice of control number 3069–0004 with an following receipt of a notification that its intent to withdraw from expiration date of April 30, 2001.) the consolidated institution intends to membership. A member that has so 14. Revise § 925.27 to read as follows: apply for membership; and notified its Bank shall be entitled to (iii) The period of time during which have continued access to the benefits of § 925.27 Involuntary termination of the Bank processes the application for membership until the effective date of membership. membership. its withdrawal, but the Bank need not (a) Grounds. The board of directors of (5) Approval of membership. If the commit to providing any further a Bank may terminate the membership application of such a consolidated services, including advances, to a of any institution that: institution is approved, the consolidated withdrawing member that would mature (1) Fails to comply with any institution shall become a member of or otherwise terminate subsequent to requirement of the Act, any regulation that Bank upon the purchase of the the effective date of the withdrawal. A adopted by the Finance Board, or any amount of Bank stock required by member may cancel its notice of requirement of the Bank’s capital plan; section 6 of the Act. If a Bank’s capital withdrawal at any time prior to its (2) Becomes insolvent or otherwise plan has not taken effect, the amount of effective date by providing a written subject to the appointment of a
VerDate 11
conservator, receiver, or other legal which its membership terminated and it Exchange rate contracts include custodian under federal or state law; or divested all of its shares of Bank stock. cross-currency interest-rate swaps, (3) Would jeopardize the safety or (b) Exceptions. An institution that forward foreign exchange rate contracts, soundness of the Bank if it were to transfers membership between two currency options purchased, and any remain a member. Banks without interruption shall not be similar instruments that give rise to (b) Stock redemption periods. The deemed to have withdrawn from Bank similar risks. applicable 6-month and 5-year stock membership or had its membership GAAP means accounting principles redemption periods, respectively, for all terminated. Any institution that generally accepted in the United States. of the Class A and Class B stock owned withdrew from Bank membership prior General allowance for losses means an by a member and not already subject to to December 31, 1997, and for which the allowance established by a Bank in a pending request for redemption, shall 5-year period has not expired, may accordance with GAAP for losses, but commence on the date that the Bank apply for membership in a Bank at any which does not include any amounts terminates the institution’s membership. time, subject to the approval of the held against specific assets of the Bank. (c) Membership rights. An institution Finance Board and the requirements of Government Sponsored Enterprise, or whose membership is terminated this part 925. GSE, means a United States involuntarily under this section shall 18. In subchapter E, add new parts Government-sponsored agency or cease being a member as of the date on 930, 931, 932, and 933 to read as instrumentality originally established or which the board of directors of the Bank follows: chartered to serve public purposes acts to terminate the membership, and specified by the United States Congress, the institution shall have no right to PART 930—DEFINITIONS APPLYING but whose obligations are not obtain any of the benefits of TO RISK MANAGEMENT AND CAPITAL obligations of the United States and are membership after that date, but shall be REGULATIONS not guaranteed by the United States. entitled to receive any dividends Interest rate contracts include, single declared on its stock until the stock is Authority: 12 U.S.C. 1422a(a)(3), 1422b(a), currency interest-rate swaps, basis redeemed by the Bank. 1426, 1440, 1443, 1446. swaps, forward rate agreements, § 930.1 Definitions. interest-rate options, and any similar § 925.28 [Removed] instrument that gives rise to similar As used in this subchapter: 15. Remove § 925.28. Affiliated counterparty means a risks, including when-issued securities. 16. Revise § 925.29 to read as follows: counterparty that is an affiliate of Investment grade means: (1) A credit quality rating in one of another counterparty, as the term § 925.29 Disposition of claims. the four highest credit rating categories ‘‘affiliate’’ is defined in 12 U.S.C. (a) In general. If an institution by an NRSRO and not below the fourth 371c(b). withdraws from membership or its highest rating category by any NRSRO; membership is otherwise terminated, Capital plan means the capital structure plan required for each Bank by or the Bank shall determine an orderly Section 6(b) of the Act, 12 U.S.C. (2) If there is no credit quality rating manner for liquidating all outstanding 1426(b), as approved by the Finance by an NRSRO, a determination by a indebtedness owed by that member to Board, unless the context of the Bank that the issuer, asset or instrument the Bank and for settling all other claims regulation refers to the capital plan prior is the credit equivalent of investment against the member. After all such to its approval by the Finance Board. grade using credit rating standards obligations and claims have been Class A stock means capital stock available from an NRSRO or other extinguished or settled, the Bank shall issued by a Bank, including subclasses, similar standards. return to the member all collateral that has the characteristics specified by Market risk has the meaning set forth pledged by the member to the Bank to § 931.1(a) of this subchapter. in § 917.1 of this chapter. secure its obligations to the Bank. Class B stock means capital stock Marketable means, with respect to an (b) Bank stock. If an institution that issued by a Bank, including subclasses, asset, that the asset can be sold with has withdrawn from membership or that that has the characteristics specified by reasonable promptness at a price that otherwise has had its membership § 931.1(b) of this subchapter. corresponds reasonably to its fair value. terminated remains indebted to the Contingency liquidity has the meaning Market value at risk is the loss in the Bank or has outstanding any business set forth in § 917.1 of this chapter. market value of a Bank’s portfolio transactions with the Bank after the Credit derivative contract means a measured from a base line case, where effective date of its termination of derivative contract that transfers credit the loss is estimated in accordance with membership, the Bank shall not redeem risk. § 932.5 of this chapter. or repurchase any Bank stock that is Credit risk has the meaning set forth Minimum investment means the required to support the indebtedness or in § 917.1 of this chapter. minimum amount of Class A and/or the business transactions until after all Derivative contract means generally a Class B stock that a member is required such indebtedness and business financial contract the value of which is to own in order to be a member of a transactions have been extinguished or derived from the values of one or more Bank and in order to obtain advances settled. underlying assets, reference rates, or and to engage in other business 17. Revise § 925.30 to read as follows: indices of asset values, or credit-related activities with the Bank in accordance events. Derivative contracts include with § 931.3 of this chapter. § 925.30 Readmission to membership. interest rate, foreign exchange rate, Operations risk has the meaning set (a) In general. An institution that has equity, precious metals, commodity, forth in § 917.1 of this chapter. withdrawn from membership or and credit contracts, and any other Permanent capital means the retained otherwise has had its membership instruments that pose similar risks. earnings of a Bank, determined in terminated and which has divested all Excess stock means that amount of accordance with GAAP, plus the of its shares of Bank stock, may not be capital stock of a Bank held by a amount paid-in for the Bank’s Class B readmitted to membership in any Bank, member in excess of the minimum stock. or acquire any capital stock of any Bank, investment in Bank stock required by Redeem or Redemption means the for a period of 5 years from the date on § 931.3 of this chapter. acquisition by a Bank of its outstanding
VerDate 11
Class A or Class B stock at par value (1) Have a par value as determined by Bank’s capital plan and shall be following the expiration of the six- the board of directors of the Bank and sufficient to ensure that the Bank month or five-year statutory redemption stated in the Bank’s capital plan; remains in compliance with its period, respectively, for the stock. (2) Be issued, redeemed, and minimum capital requirements. A Bank Regulatory risk-based capital repurchased only at its stated par value; shall require each member to maintain requirement means the amount of and its minimum investment for as long as permanent capital that a Bank is (3) Be redeemable in cash only on six- the institution remains a member of the required to maintain in accordance with months written notice to the Bank. Bank and for as long as the member § 932.3 of this chapter. (b) Class B stock, which shall: engages in any activity with the Bank Regulatory total capital requirement (1) Have a par value as determined by against which the Bank is required to means the amount of total capital that the board of directors of the Bank and maintain capital. a Bank is required to maintain in stated in the Bank’s capital plan; (b) A Bank may establish the accordance with § 932.2 of this chapter. (2) Be issued, redeemed, and minimum investment required of each Repurchase means the acquisition by repurchased only at its stated par value; member as a percentage of the total (3) Be redeemable in cash only on a Bank of excess stock prior to the assets of the member, as a percentage of five-years written notice to the Bank; expiration of the six-month or five-year the advances outstanding to the and statutory redemption period for the member, as a percentage of any other (4) Confer an ownership interest in stock. business activity conducted with the the retained earnings, surplus, member, on any other basis that is Repurchase agreement means an undivided profits, and equity reserves of agreement between a seller and a buyer approved by the Finance Board, or any the Bank; and combination thereof. whereby the seller agrees to repurchase (c) Any one or more subclasses of (c) A Bank may require each member a security or similar securities at an Class A or Class B stock, each of which to satisfy the minimum investment agreed upon price, with or without a may have different rights, terms, requirement through the purchase of stated time for repurchase. conditions, or preferences as may be either Class A or Class B stock, or Total assets means the total assets of authorized in the Bank’s capital plan, through the purchase of one or more a Bank, as determined in accordance provided, however, that each subclass of combinations of Class A and Class B with GAAP. stock shall have all of the characteristics stock that have been authorized by the Total capital of a Bank means the sum of its respective class, as specified in board of directors of the Bank in its of permanent capital, the amounts paid- paragraph (a) or (b) of this section. in for Class A stock, the amount of any capital plan. A Bank, in its discretion, general allowance for losses, and the § 931.2 Issuance of capital stock. may establish a lower minimum amount of other instruments identified (a) In general. A Bank may issue investment for members that invest in in a Bank’s capital plan that the Finance either one or both classes of its capital Class B stock than is required for Board has determined to be available to stock (including subclasses), as members that invest in Class A stock, absorb losses incurred by such Bank. authorized by § 931.1, and shall not provided that such reduced investment Walkaway clause means a provision issue any other class of capital stock. A provides sufficient capital for the Bank in a bilateral netting contract that Bank shall issue its stock only to its to remain in compliance with its permits a nondefaulting counterparty to members and only in book-entry form, minimum capital requirements. make a lower payment than it would and the Bank shall act as its own (d) Each member of a Bank shall at all make otherwise under the bilateral transfer agent. All capital stock shall be times maintain an investment in the netting contract, or no payment at all, to issued in accordance with the Bank’s capital stock of the Bank in an amount a defaulter or the estate of a defaulter, capital plan. that is sufficient to satisfy the minimum even if the defaulter or the estate of the (b) Initial issuance. In connection investment required for that member in defaulter is a net creditor under the with the initial issuance of its Class A accordance with the Bank’s capital plan. bilateral netting contract. and/or Class B stock (or any subclass of (The Office of Management and Budget has either), a Bank may issue such stock in approved the information collection PART 931—FEDERAL HOME LOAN exchange for its existing stock, through contained in this section and assigned BANK CAPITAL STOCK a conversion of its existing stock, or control number 3069–0059 with an through any other fair and equitable expiration date of November 30, 2003.) Sec. transaction or method of distribution. 931.1 Classes of capital stock. § 931.4 Dividends. 931.2 Issuance of capital stock. As part of its initial stock issuance transaction, a Bank may distribute any (a) In general. A Bank may pay 931.3 Minimum investment in capital dividends on its capital stock only out stock. portion of its then-existing unrestricted 931.4 Dividends. retained earnings as shares of Class B of previously retained earnings or 931.5 Liquidation, merger, or consolidation. stock. current net earnings, and shall declare 931.6 Transfer of capital stock. and pay dividends only as provided by 931.7 Redemption and repurchase of capital § 931.3 Minimum investment in capital its capital plan. The capital plan may stock. stock. establish different dividend rates or 931.8 Capital impairment. (a) A Bank shall require each member preferences for each class or subclass of 931.9 Transition provision. to maintain a minimum investment in stock, which may include a dividend Authority: 12 U.S.C. 1422a(a)(3), 1422b(a), the capital stock of the Bank, both as a that tracks the economic performance of 1426, 1440, 1443, 1446. condition to becoming and remaining a certain Bank assets, such as Acquired member of the Bank and as a condition Member Assets. A member, including a § 931.1 Classes of capital stock. to transacting business with the Bank or member that has provided the Bank The authorized capital stock of a Bank obtaining advances and other services with a notice of intent to withdraw from shall consist of the following from the Bank. The amount of the membership or one whose membership instruments: required minimum investment shall be is otherwise terminated, shall be (a) Class A stock, which shall: determined in accordance with the entitled to receive any dividends that a
VerDate 11
Bank declares on its capital stock while stock that is in excess of the amount of plan shall be the date on which the the member owns the stock. that class of Bank stock that the member Bank first issues any Class A or Class B (b) Limitation on payment of is required to hold as a minimum stock. Prior to the effective date, the dividends. In no event shall a Bank investment, in accordance with the issuance and retention of Bank stock declare or pay any dividend on its capital plan of that Bank. A Bank shall be as provided in § 925.20 and capital stock if after doing so the Bank undertaking such a stock repurchase at § 925.22 of this chapter. would fail to meet any of its minimum its own initiative shall provide the (b) Transition period. (1) Bank capital requirements, nor shall a Bank member with reasonable notice prior to transition. A Bank that will not be in that is not in compliance with any of its repurchasing any excess stock, with the compliance with the minimum leverage minimum capital requirements declare period of such notice to be specified in and risk-based capital requirements or pay any dividend on its capital stock. the Bank’s capital plan, and shall pay specified in § 932.2 and § 932.3 of this the stated par value of that stock to the chapter as of the effective date of its § 931.5 Liquidation, merger, or member in cash. For purposes of this capital plan shall maintain compliance consolidation. section, any Bank stock owned by a with the leverage limit requirements in The respective rights of the Class A member shall be considered to be excess § 966.3(a) of this chapter and shall and Class B stockholders, in the event stock if the member is not required to include in its capital plan a description that the Bank is liquidated, or is merged hold such stock either as a condition of of the steps that the Bank will take to or otherwise consolidated with another remaining a member of the Bank or as achieve compliance with the minimum Bank, shall be determined in accordance a condition of obtaining advances or capital requirements specified in § 932.2 with the capital plan of the Bank. transacting other business with the and § 932.3 of this chapter. The period of time for compliance with the § 931.6 Transfer of capital stock. Bank. A member’s submission of a notice of intent to withdraw from minimum capital requirements shall be A member of a Bank may transfer any membership, or its termination of stated in the plan and shall not exceed excess capital stock of the Bank to membership in any other manner, shall three years from the effective date of the another member of that Bank or to an not, in and of itself, cause any Bank capital plan. When the Bank has institution that has been approved for stock to be deemed excess stock for achieved compliance with the leverage membership in that Bank and that has purposes of this section. requirement of § 932.2 of this chapter, satisfied all conditions for becoming a (c) Limitation. In no event may a Bank the leverage limit requirements of member, other than the purchase of the redeem or repurchase any stock if, § 966.3(a) of this chapter shall cease to minimum amount of Bank stock that it following the redemption or repurchase, apply to that Bank. is required to hold as a condition of the Bank would fail to meet any (2) Member transition. (i) Existing membership. Any such stock transfers minimum capital requirement, or if the members. A Bank’s capital plan shall shall be at par value and shall be member would fail to maintain its require any institution that was a effective upon being recorded on the minimum investment in the stock of the member on November 12, 1999, and appropriate books and records of the Bank, as required by § 931.3. whose investment in Bank stock as of Bank. the effective date of the capital plan will (The Office of Management and Budget has be less than the minimum investment § 931.7 Redemption and repurchase of approved the information collection required by the plan, to comply with the capital stock. contained in this section and assigned minimum investment by a date (a) Redemption. A member may have control number 3069–0004 with an expiration date of April 30, 2001.) specified in the Bank’s capital plan. The its capital stock in a Bank redeemed by length of the transition period shall be providing written notice to the Bank in § 931.8 Capital impairment. specified in the capital plan and shall accordance with this section. For Class A Bank may not redeem or repurchase not exceed three years. The capital plan A stock, a member shall provide six- any capital stock without the prior shall describe the actions that the months written notice, and for Class B written approval of the Finance Board if existing members are required to take to stock a member shall provide five-years the Finance Board or the board of achieve compliance with the minimum written notice. The notice shall indicate directors of the Bank has determined investment, and may require such the number of shares of Bank stock that that the Bank has incurred or is likely members to purchase additional Bank are to be redeemed, and a member shall to incur losses that result in or are likely stock periodically over the course of the not have more than one notice of to result in charges against the capital of transition period. redemption outstanding at one time for the Bank. This prohibition shall apply (ii) New members. A Bank’s capital the same shares of Bank stock. A even if a Bank is in compliance with its plan shall require any institution that member may cancel a notice of minimum capital requirements, and became a member after November 12, redemption by so informing the Bank in shall remain in effect for however long 1999, but prior to the effective date of writing, and the Bank may impose a fee the Bank continues to incur such the capital plan, to comply with the (to be specified in its capital plan) on charges or until the Finance Board minimum investment specified in the any member that cancels a pending determines that such charges are not Bank’s capital plan as of the effective notice of redemption. At the expiration expected to continue. date of the plan. A Bank’s capital plan of the applicable notice period, the Bank shall require any institution that shall pay the stated par value of that § 931.9 Transition provision. becomes a member after the effective stock to the member in cash. A Bank (a) In general. Each Bank shall comply date of the capital plan, to comply with shall not be obligated to redeem its with the minimum leverage and risk- the minimum investment upon capital stock other than in accordance based capital requirements specified in becoming a member. with this paragraph. § 932.2 and § 932.3 of this chapter, (3) New business. A Bank’s capital (b) Repurchase. A Bank, in its respectively, and each member shall plan shall require any member that discretion and without regard to the comply with the minimum investment obtains an advance or other services applicable redemption periods, may established in the capital plan, as of the from the Bank, or that initiates any other repurchase from a member any effective date of that Bank’s capital plan. business activity with the Bank against outstanding Class A or Class B capital The effective date of a Bank’s capital which the Bank is required to hold
VerDate 11
capital, after the effective date of the (b) For reasons of safety and calculated in accordance with paragraph capital plan to comply with the soundness, the Finance Board may (g) or (h) of this section, as applicable, minimum investment specified in the require an individual Bank to have and multiplied by the credit risk percentage Bank’s capital plan for such advance, maintain a greater amount of permanent requirement assigned to that derivative services, or activity at the time the capital than required by paragraph (a) of contract pursuant to paragraph (e)(2) of transaction occurs. this section. this section, where the actual remaining maturity of the derivative contract is PART 932—FEDERAL HOME LOAN § 932.4 Credit risk capital requirement. used to apply Table 1.1 or Table 1.3 of BANK CAPITAL REQUIREMENTS (a) General requirement. Each Bank’s this part. credit risk capital requirement shall be (2) Derivative contracts with a Sec. equal to the sum of the Bank’s credit member. Except as provided in 932.1 Risk management. risk capital charges for all assets, off- 932.2 Total capital requirement. paragraph (j) of this section, the credit 932.3 Risk-based capital requirement. balance sheet items and derivative risk capital charge for any derivative 932.4 Credit risk capital requirement. contracts. contract entered into between a Bank 932.5 Market risk capital requirement. (b) Credit risk capital charge for and one of its member institutions shall 932.6 Operations risk capital requirement. assets. Except as provided in paragraph be calculated in accordance with 932.7 Reporting requirements. (i) of this section, each Bank’s credit risk paragraph (d)(1) of this section. 932.8 Minimum liquidity requirements. capital charge for an asset shall be equal However, the credit risk percentage 932.9 Limits on unsecured extensions of to the book value of the asset multiplied requirements used in the calculations credit to one counterparty or affiliated by the credit risk percentage shall be found in Table 1.1 of this part, counterparties; reporting requirements requirement assigned to that asset which sets forth the credit risk for total extensions of credit to one pursuant to paragraph (e)(2) of this counterparty or affiliated counterparties. percentage requirements for advances. section. (e) Determination of credit risk Authority: 12 U.S.C. 1422a(a)(3), 1422b(a), (c) Credit risk capital charge for off- percentage requirements.—(1) Finance 1426, 1440, 1443, 1446. balance sheet items. Each Bank’s credit Board determination of credit risk § 932.1 Risk management. risk capital charge for an off-balance percentage requirements. The Finance Before its new capital plan may take sheet item shall be equal to the credit Board shall determine, and update effect, each Bank shall obtain the equivalent amount of such item, as periodically, the credit risk percentage approval of the Finance Board for the determined pursuant to paragraph (f) of requirements set forth in Tables 1.1 internal market risk model or the this section multiplied by the credit risk through 1.4 of this part applicable to a internal cash flow model used to percentage requirement assigned to that Bank’s assets, off-balance sheet items, and derivative contracts. calculate the market risk component of item pursuant to paragraph (e)(2) of this (2) Bank determination of credit risk its risk-based capital requirement, and section, except that the credit risk percentage requirements. (i) Each Bank for the risk assessment procedures and percentage requirement applied to the credit equivalent amount for a stand-by shall determine the credit risk controls (whether established as part of percentage requirement applicable to its risk management policy or letter of credit shall be that for an advance with the same remaining each asset, each off-balance sheet item otherwise) to be used to manage its and each derivative contract by credit, market, and operations risks. maturity as that stand-by letter of credit. (d) Derivative contracts. (1) Derivative identifying the category set forth in § 932.2 Total capital requirement. contracts with non-member Table 1.1, Table 1.2, Table 1.3 or Table (a) Each Bank shall maintain at all counterparties. Except as provided in 1.4 of this part to which the asset, item times: paragraph (j) of this section, each Bank’s or derivative belongs, given, if (1) Total capital in an amount at least credit risk capital charge for a specific applicable, its demonstrated credit equal to 4.0 percent of the Bank’s total derivative contract entered into between rating and remaining maturity (as assets; and a Bank and a non-member institution determined in accordance with (2) A leverage ratio of total capital to shall equal the sum of : paragraphs (e)(2)(ii) and (e)(2)(iii) of this total assets of at least 5.0 percent of the (i) The current credit exposure for the section). The applicable credit risk Bank’s total assets. For purposes of derivative contract, calculated in percentage requirement for an asset, off- determining the leverage ratio, total accordance with paragraph (g) or (h) of balance sheet item or derivative contract capital shall be computed by this section, as applicable, multiplied by shall be used to calculate the credit risk multiplying the Bank’s permanent the credit risk percentage requirement capital charge for such asset, item, or capital by 1.5 and adding to this product assigned to that derivative contract derivative contract in accordance with all other components of total capital. pursuant to paragraph (e)(2) of this paragraphs (b), (c) or (d) of this section (b) For reasons of safety and section, provided that: respectively. The relevant categories soundness, the Finance Board may (A) The remaining maturity of the and credit risk percentage requirements require an individual Bank to have and derivative contract shall be deemed to are provided in the following Tables 1.1 maintain a greater amount of total be less than one year for the purpose of through 1.4 of this part: capital than mandated by paragraph applying Table 1.1 or 1.3 of this part; (a)(1) of this section. and TABLE 1.1.—REQUIREMENT FOR (B) Any collateral held against an ADVANCES § 932.3 Risk-based capital requirement. exposure from the derivative contract (a) Each Bank shall maintain at all shall be applied to reduce the portion of Percentage times permanent capital in an amount at the credit risk capital charge Type of advances applicable least equal to the sum of its credit risk corresponding to the current credit to advances capital requirement, its market risk exposure in accordance with the Advances with: capital requirement, and its operations requirements of paragraph (e)(2)(ii)(B) of Remaining maturity <= 4 risk capital requirement, calculated in this section; plus years ...... 0.07 accordance with §§ 932.4, 932.5 and (ii) The potential future credit Remaining maturity > 4 years 932.6, respectively. exposure for the derivative contract to 7 years ...... 0.20
VerDate 11
TABLE 1.1.—REQUIREMENT FOR TABLE 1.2.—REQUIREMENT FOR TABLE 1.2.—REQUIREMENT FOR ADVANCES—Continued RATED RESIDENTIAL MORTGAGE AS- RATED RESIDENTIAL MORTGAGE AS- SETS—Continued SETS—Continued Percentage Type of advances applicable Percentage Percentage to advances applicable Type of residential mortgage Type of residential mortgage applicable asset to residen- to residen- Remaining maturity > 7 years tial mort- asset tial mort- to 10 years ...... 0.30 gage assets gage assets Remaining maturity > 10 years ...... 0.35 Third Highest Investment Second Highest Investment Grade ...... 0.86 Grade ...... 0.60 Fourth Highest Investment Third Highest Investment TABLE 1.2.—REQUIREMENT FOR Grade ...... 1.20 Grade ...... 1.60 RATED RESIDENTIAL MORTGAGE AS- If Downgraded to Below Invest- Fourth Highest Investment SETS ment Grade After Acquisition Grade ...... 4.45 By Bank: If Downgraded to Below Invest- Percentage Highest Below Investment ment Grade After Acquisition applicable Grade ...... 2.40 By Bank: Type of residential mortgage Second Highest Below In- asset to residen- Highest Below Investment tial mort- vestment Grade ...... 4.80 Grade ...... 13.00 gage assets All Other Below Investment Second Highest Below In- Grade ...... 34.00 vestment Grade ...... 34.00 Highest Investment Grade ...... 0.37 Subordinated Classes of Mort- All Other Below Investment Second Highest Investment gage Assets: Grade ...... 100.00 Grade ...... 0.60 Highest Investment Grade .... 0.37
TABLE 1.3.—REQUIREMENT FOR RATED ASSETS OR RATED ITEMS OTHER THAN ADVANCES OR RESIDENTIAL MORTGAGE ASSETS [Based on remaining maturity]
Applicable percentage
™ >1 yr to 3 >3 yrs to >7 yrs to 10 1 year yrs 7yrs yrs >10 yrs
U.S. Government Securities ...... 0.00 0.00 0.00 0.00 0.00 Highest Investment Grade ...... 0.15 0.40 0.90 1.40 2.20 Second Highest Investment Grade ...... 0.20 0.45 1.00 1.45 2.30 Third Highest Investment Grade ...... 0.70 1.10 1.60 2.05 2.95 Fourth Highest Investment Grade ...... 2.50 3.70 4.45 5.50 7.05 If Downgraded Below Investment Grade After Acquisition by Bank: Highest Below Investment Grade ...... 10.00 13.00 13.00 13.00 13.00 Second Highest Below Investment Grade ...... 26.00 34.00 34.00 34.00 34.00 All Other ...... 100.00 100.00 100.00 100.00 100.00
TABLE 1.4.—REQUIREMENT FOR corresponding obligor counterparty, deemed to be backed by collateral for UNRATED ASSETS third party guarantor, or collateral purposes of this paragraph if the backing the asset, item, or derivative, collateral is: (1) Actually held by the Bank or an Type of unrated asset Applicable the credit rating that shall apply to the percentage asset, item, or derivative, or portion of independent, third-party custodian, or, the asset, item, or derivative so if permitted under the Bank’s collateral Cash ...... 0.00 guaranteed or collateralized, shall be the agreement with such party, by the Premises, Plant, and Equip- ment ...... 8.00 credit rating corresponding to such Bank’s member or an affiliate of that Investments Under § 940.3(e) & obligor counterparty, third party member where the term ‘‘affiliate’’ has (f) ...... 8.00 guarantor, or underlying collateral, as the same meaning as in § 950.1 of this determined in accordance with chapter; (ii) When determining the applicable paragraph (e)(2)(iii) of this section. If (2) Legally available to absorb losses; credit risk percentage requirement from there are multiple obligor (3) Of a readily determinable value at Tables 1.2 or 1.3 of this part, each Bank counterparties, third party guarantors, which it can be liquidated by the Bank; shall apply the following criteria: or collateral instruments backing an (4) Held in accordance with the (A) For assets or items that are rated asset, item, or derivative not rated provisions of the Bank’s member directly by an NRSRO, the credit rating directly by an NRSRO, or any specific products policy established pursuant to shall be the NRSRO’s credit rating for portion thereof, then the credit rating § 917.4 of this chapter; and the asset or item as determined in that shall apply to that asset, item, or (5) Subject to an appropriate discount accordance with paragraph (e)(2)(iii) of derivative or specific portion thereof, to protect against price decline during this section. shall be the highest credit rating among the holding period, as well as the costs (B) When using Table 1.3 of this part, such obligor counterparties, third party likely to be incurred in the liquidation for an asset, off-balance sheet item, or guarantors, or collateral instruments, as of the collateral. derivative contract that is not rated determined in accordance with (C) When using Table 1.3 of this part, directly by an NRSRO, but for which an paragraph (e)(2)(iii) of this section. for an asset with a short-term credit NRSRO rating has been assigned to any Assets, items or derivatives shall be rating from a given NRSRO, the credit
VerDate 11
risk percentage requirement shall be be based on the rating of such pool after TABLE 2.—CREDIT CONVERSION FAC- based on the remaining maturity of the the supplemental credit enhancement, TORS FOR OFF-BALANCE SHEET asset and the long-term credit rating except that the Finance Board retains ITEMS—Continued provided for the issuer of the asset by the right to adjust the credit capital the same NRSRO. Should the issuer of charge to account for any deficiencies Credit con- the short-term asset not have a long- with the supplemental enhancement on Instrument version term credit rating, the long-term a case-by-case basis. factor (in percent) equivalent rating shall be determined as (iii) In determining the credit ratings follows: under paragraph (e)(2)(ii)(A), (e)(2)(ii)(B) Other commitments with origi- (1) The highest short-term credit and (e)(2)(ii)(C) of this section, each nal maturity of over one year rating shall be equivalent to the third Bank shall apply the following criteria: Other commitments with origi- highest long-term rating; (A) The most recent credit rating from nal maturity of one year or (2) The second highest short-term a given NRSRO shall be considered. If less ...... 20 rating shall be equivalent to the fourth only one NRSRO has rated an asset or highest long-term rating; item, that NRSRO’s rating shall be used. (2) Exceptions. The credit conversion (3) The third highest short-term rating If an asset or item has received credit factor shall be zero for Other shall be equivalent to the fourth highest ratings from more than one NRSRO, the Commitments With Original Maturity of long-term rating; and lowest credit rating from among those Over One Year and Other Commitments (4) If the short-term rating is NRSROs shall be used. With Original Maturity of One Year or downgraded to below investment grade (B) Where a credit rating has a Less, for which credit conversion factors after acquisition by the Bank, the short- modifier (e.g., A–1+ for short-term of 50 percent or 20 percent would term rating shall be equivalent to the ratings and A+ or A¥ for long-term otherwise apply, that are second highest below investment grade ratings) the credit rating is deemed to be unconditionally cancelable, or that long-term rating. the credit rating without the modifier effectively provide for automatic (D) For residential mortgage assets (e.g., A–1+ = A–1 and A+ or A–= A); cancellation, due to the deterioration in a borrower’s creditworthiness, at any and other assets or items, or relevant (f) Calculation of credit equivalent time by the Bank without prior notice. portion of an asset or item, that do not amount for off-balance sheet items. (1) (g) Calculation of current and meet the requirements of paragraphs General requirement. The credit potential future credit exposures for (e)(2)(ii)(A), (e)(2)(ii)(B) or (e)(2)(ii)(C) of equivalent amount for an off-balance single derivative contracts. (1) Current this section, and are not identified in sheet item shall be determined by a credit exposure. The current credit Tables 1.1 or Table 1.4 of this part, each Finance Board approved model or shall exposure for a derivative contract that is Bank shall determine its own credit be equal to the face amount of the not subject to a qualifying bilateral rating for such assets or items, or instrument multiplied by the credit netting contract described in paragraph relevant portion thereof, using credit conversion factor assigned to such risk (h)(3) of this section shall be: rating standards available from an category of instruments, subject to the (i) If the mark-to-market value of the NRSRO or other similar standards. This exceptions in paragraph (f)(2) of this contract is positive, the mark-to-market credit rating, as determined by the Bank, section, provided in the following Table value of the contract; or (ii) If the mark- shall be used to identify the applicable 2 of this part: credit risk percentage requirement to-market value of the contract is zero or negative, zero. under Table 1.2 of this part for TABLE 2.—CREDIT CONVERSION FAC- residential mortgage assets, or under (2) Potential future credit exposure. (i) TORS FOR OFF-BALANCE SHEET Table 1.3 of this part for all other assets The potential future credit exposure for or items. ITEMS a single derivative contract, including a (E) The credit risk percentage derivative contract with a negative Credit con- requirement for mortgage assets that are version mark-to-market value, shall be acquired member assets described in Instrument factor calculated using an internal model § 955.1(a) of this chapter shall be (in percent) approved by the Finance Board or, in assigned from Table 1.2 of this part the alternative, by multiplying the based on the rating of those assets after Asset sales with recourse effective notional amount of the where the credit risk remains derivative contract by one of the taking into account any credit with the Bank ...... 100 enhancement required by § 955.3 of this Commitments to make ad- assigned credit conversion factors, chapter. Should a Bank further enhance vances modified as may be required by a pool of loans through the purchase of Commitments to make or pur- paragraph (g)(2)(ii) of this section, for insurance or by some other means, the chase other loans the appropriate category as provided in credit risk percentage requirement shall Standby letters of credit ...... 50 the following Table 3 of this part:
TABLE 3.—CREDIT CONVERSION FACTORS FOR POTENTIAL FUTURE CREDIT EXPOSURE DERIVATIVE CONTRACTS [In percent]
Foreign Precious Residual maturity Interest rate exchange Equity metals ex- Other com- and gold cept gold modities
One year or less ...... 0 1 6 7 10 Over 1 year to five years ...... 5 5 8 7 12 Over five years ...... 1.5 7.5 10 8 15
VerDate 11
(ii) In applying the credit conversion (2) Potential future credit exposure. (A) The law of the jurisdiction by factors in Table 3 of this part the The potential future credit exposure for which the counterparty is chartered or following modifications shall be made: each individual derivative contract from the equivalent location in the case of (A) For derivative contracts with among a group of derivative contracts non-corporate entities, and if a branch multiple exchanges of principal, the that are executed with a single of the counterparty is involved, then conversion factors are multiplied by the counterparty and subject to a qualifying also under the law of the jurisdiction in number of remaining payments in the bilateral netting contract described in which the branch is located; derivative contract; and paragraph (h)(3) of this section shall be (B) The law of the jurisdiction that (B) For derivative contracts that calculated as follows: governs the individual derivative automatically reset to zero value Anet = 0.4 × Agross + (0.6 × NGR × Agross), contracts covered by the netting following a payment, the residual contract; and maturity equals the time until the next where: (i) A is the potential future credit (C) The law of the jurisdiction that payment; however, interest rate net exposure for an individual derivative governs the netting contract; contracts with remaining maturities of (v) The Bank establishes and contract subject to the qualifying greater than one year shall be subject to maintains procedures to monitor bilateral netting contract; a minimum conversion factor of 0.5 possible changes in relevant law and to (ii) Agross is the gross potential future percent. credit exposure, i.e., the potential future ensure that the netting contract (iii) If a Bank uses an internal model credit exposure for the individual continues to satisfy the requirements of to determine the potential future credit derivative contract, calculated in this section; and exposure for a particular type of (vi) The Bank maintains in its files accordance with paragraph (g)(2) of this derivative contract, the Bank shall use section but without regard to the fact documentation adequate to support the the same model for all other similar that the contract is subject to the netting of a derivative contract. (i) Credit risk capital charge for assets types of contracts. However, the Bank qualifying bilateral netting contract; may use an internal model for one type (iii) NGR is the net to gross ratio, i.e., hedged with credit derivatives—(1) of derivative contract and Table 3 of this the ratio of the net current credit Credit derivatives with a remaining part for another type of derivative exposure of all the derivative contracts maturity of one year or more. The credit contract. subject to the qualifying bilateral netting risk capital charge for an asset that is (iv) Forwards, swaps, purchased contract, calculated in accordance with hedged with a credit derivative that has options and similar derivative contracts paragraph (h)(1) of this section, to the a remaining maturity of one year or not included in the Interest Rate, gross current credit exposure; and more may be reduced only in Foreign Exchange and Gold, Equity, or (iv) The gross current credit exposure accordance with paragraph (i)(3) or (i)(4) Precious Metals Except Gold categories is the sum of the positive current credit of this section and only if the credit shall be treated as other commodities exposures of all the individual derivative provides substantial contracts when determining potential derivative contracts subject to the protection against credit losses. future credit exposures using Table 3 of qualifying bilateral netting contract, (2) Credit derivatives with a remaining this part. calculated in accordance with paragraph maturity of less than one year. The (v) If a Bank uses Table 3 of this part (g)(1) of this section but without regard credit risk capital charge for an asset to determine the potential future credit to the fact that the contract is subject to that is hedged with a credit derivative exposures for credit derivative the qualifying bilateral netting contract. that has a remaining maturity of less contracts, the credit conversion factors (3) Qualifying bilateral netting than one year may be reduced only in provided in Table 3 for equity contracts contract. A bilateral netting contract accordance with paragraph (i)(3) of this shall also apply to the credit derivative shall be considered a qualifying bilateral section and only if the remaining contracts entered into with investment netting contract if the following maturity on the credit derivative is grade counterparties. If the counterparty conditions are met: identical to or exceeds the remaining is downgraded to below investment (i) The netting contract is in writing; maturity of the hedged asset and the grade, the credit conversion factor (ii) The netting contract is not subject credit derivative provides substantial provided in Table 3 of this part for other to a walkaway clause; protection against credit losses. commodity contracts shall apply. (iii) The netting contract provides that (3) Capital charge reduced to zero. (h) Calculation of current and the Bank would have a single legal The credit risk capital charge for an potential future credit exposures for claim or obligation either to receive or asset shall be zero if a credit derivative multiple derivative contracts subject to to pay only the net amount of the sum is used to hedge the credit risk on that a qualifying bilateral netting contract— of the positive and negative mark-to- asset in accordance with paragraph (i)(1) market values on the individual or (i)(2) of this section, provided that: (1) Current credit exposure. The derivative contracts covered by the (i) The remaining maturity for the current credit exposure for multiple netting contract in the event that a credit derivative used for the hedge is derivative contracts executed with a counterparty, or a counterparty to whom identical to or exceeds the remaining single counterparty and subject to a the netting contract has been assigned, maturity for the hedged asset, and qualifying bilateral netting contract fails to perform due to default, either: described in paragraph (h)(3) of this insolvency, bankruptcy, or other similar (A) The asset referenced in the credit section, shall be calculated on a net circumstance; derivative is identical to the hedged basis and shall equal: (iv) The Bank obtains a written and asset; or (i) The net sum of all positive and reasoned legal opinion that represents, (B) The asset referenced in the credit negative mark-to-market values of the with a high degree of certainty, that in derivative is different from the hedged individual derivative contracts subject the event of a legal challenge, including asset, but only if the asset referenced in to a qualifying bilateral netting contract, one resulting from default, insolvency, the credit derivative and the hedged if the net sum of the mark-to-market bankruptcy, or similar circumstances, asset have been issued by the same values is positive; or the relevant court and administrative obligor, the asset referenced in the (ii) Zero, if the net sum of the mark- authorities would find the Bank’s credit derivative ranks pari passu to or to-market values is zero or negative. exposure to be the net amount under: more junior than the hedged asset and
VerDate 11
has the same maturity as the hedged days or less (gold contracts do not (b) Measurement of market value at asset, and cross-default clauses apply; qualify for this exception); and risk under a Bank’s internal market risk and (2) A derivative contract that is traded model. (1) Except as provided under (ii) The credit risk capital charge for on an organized exchange requiring the paragraph (a)(2) of this section, each the credit derivative contract calculated daily payment of any variations in the Bank shall use an internal market risk pursuant to paragraph (d) of this section market value of the contract. model that estimates the market value of is still applied. (k) Date of calculations. Unless the Bank’s assets and liabilities, off- (4) Capital charge reduction in certain otherwise directed by the Finance balance sheet items, and derivative other cases. The credit risk capital Board, each Bank shall perform all contracts, including any related options, charge for an asset hedged with a credit calculations required by this section and measures the market value of the derivative in accordance with paragraph using the assets, off-balance sheet items, Bank’s portfolio at risk of its assets and (i)(1) of this section shall equal the sum and derivative contracts held by the liabilities, off-balance sheet items, and of the credit risk capital charges for the Bank, and, if applicable, the values or derivative contracts, including related hedged and unhedged portion of the credit ratings of such assets, items, or options, from all sources of the Bank’s asset provided that: derivatives as of the close of business of market risks, except that the Bank’s (i) The remaining maturity for the the last business day of the month for model need only incorporate those risks credit derivative is less than the which the credit risk capital charge is that are material. remaining maturity for the hedged asset being calculated. (2) The Bank’s internal market risk and either: model may use any generally accepted (A) The asset referenced in the credit § 932.5 Market risk capital requirement. measurement technique, such as derivative is identical to the hedged (a) General requirement. (1) Each variance-covariance models, historical asset; or Bank’s market risk capital requirement simulations, or Monte Carlo (B) The asset referenced in the credit shall equal the sum of: simulations, for estimating the market derivative is different from the hedged (i) The market value of the Bank’s value of the Bank’s portfolio at risk, asset, but only if the asset referenced in portfolio at risk from movements in provided that any measurement the credit derivative and the hedged interest rates, foreign exchange rates, technique used must cover the Bank’s asset have been issued by the same commodity prices, and equity prices material risks. obligor, the asset referenced in the that could occur during periods of (3) The measures of the market value credit derivative ranks pari passu to or market stress, where the market value of of the Bank’s portfolio at risk shall more junior than the hedged asset and the Bank’s portfolio at risk is include the risks arising from the non- has the same maturity as the hedged determined using an internal market linear price characteristics of options asset, and cross-default clauses apply; risk model that fulfills the requirements and the sensitivity of the market value and of paragraph (b) of this section and that of options to changes in the volatility of (ii) The credit risk capital charge for has been approved by the Finance the options’ underlying rates or prices. the unhedged portion of the asset Board; and (4) The Bank’s internal market risk equals: (ii) The amount, if any, by which the model shall use interest rate and market (A) The credit risk capital charge for Bank’s current market value of total price scenarios for estimating the market the hedged asset, calculated as the book capital is less than 85 percent of the value of the Bank’s portfolio at risk, but value of the hedged asset multiplied by Bank’s book value of total capital, at a minimum: (i) The Bank’s internal market risk the hedged asset’s credit risk percentage where: model shall provide an estimate of the requirement assigned pursuant to (A) The current market value of the market value of the Bank’s portfolio at paragraph (e)(2) of this section where total capital is calculated by the Bank risk such that the probability of a loss the appropriate credit rating is that for using the internal market risk model greater than that estimated shall be no the hedged asset and the appropriate approved by the Finance Board under more than one percent; maturity is the remaining maturity of paragraph (d) of this section; and (ii) The Bank’s internal market risk the hedged asset; minus (B) The book value of total capital is model shall incorporate scenarios that the same as the amount of total capital (B) The credit risk capital charge for reflect changes in interest rates, interest reported by the Bank to the Finance the hedged asset, calculated as the book rate volatility, and shape of the yield Board under § 932.7 of this part. value of the hedged asset multiplied by curve, and changes in market prices, (2) A Bank may substitute an internal the hedged asset’s credit risk percentage equivalent to those that have been cash flow model to derive a market risk requirement assigned pursuant to observed over 120-business day periods capital requirement in place of that paragraph (e)(2) of this section where of market stress. For interest rates, the calculated using an internal market risk the appropriate credit rating is that for relevant historical observations should model under paragraph (a)(1) of this the hedged asset but the appropriate be drawn from the period that starts at section, provided that: maturity is deemed to be the remaining the end of the previous month and goes maturity of the credit derivative; and (i) The Bank obtains Finance Board back to the beginning of 1978; (iii) The credit risk capital charge for approval of the internal cash flow model (iii) The total number of, and specific the hedged portion of the asset is equal and of the assumptions to be applied to historical observations identified by the to the credit risk capital charge for the the model; and Bank as, stress scenarios shall be: credit derivative, calculated in (ii) The Bank demonstrates to the (A) Satisfactory to the Finance Board; accordance with paragraph (d) of this Finance Board that the internal cash (B) Representative of the periods of section. flow model subjects the Bank’s assets the greatest potential market stress given (j) Zero Credit risk capital charge for and liabilities, off-balance sheet items the Bank’s portfolio, and certain derivative contracts. The credit and derivative contracts, including (C) Comprehensive given the risk capital charge for the following related options, to a comparable degree modeling capabilities available to the derivative contracts shall be zero: of stress for such factors as will be Bank; and (1) A foreign exchange rate contract required for an internal market risk (iv) The measure of the market value with an original maturity of 14 calendar model. of the Bank’s portfolio at risk may
VerDate 11
incorporate empirical correlations (e) Date of calculations. Unless § 932.9 Limits on unsecured extensions of among interest rates. otherwise directed by the Finance credit to one counterparty or affiliated (5) For any consolidated obligations Board, each Bank shall perform any counterparties; reporting requirements for denominated in a currency other than total extensions of credit to one calculations or estimates required under counterparty or affiliated counterparties. U.S. Dollars or linked to equity or this section using the assets and (a) Unsecured extensions of credit to commodity prices, each Bank shall, in liabilities, off-balance sheet items, and addition to fulfilling the criteria of single counterparty. (1) General derivative contracts held by the Bank, requirement. Unsecured extensions of paragraph (b)(4) of this section, and if applicable, the values of any such calculate an estimate of the market credit by a Bank to a single counterparty holdings, as of the close of business of that arise from the Bank’s on-and off- value of its portfolio at risk due to the the last business day of the month for material foreign exchange, equity price balance sheet transactions shall not which the market risk capital or commodity price risk, such that, at a exceed the product of the maximum requirement is being calculated. minimum: capital exposure limit applicable to (i) The probability of a loss greater § 932.6 Operations risk capital such counterparty, as set forth in than that estimated shall not exceed one requirement. paragraph (a)(2) and Table 4 of this part, percent; multiplied by the lesser of: (ii) The scenarios reflect changes in (a) General requirement. Except as (i) The Bank’s total capital; or foreign exchange, equity, or commodity authorized under paragraph (b) of this (ii) The counterparty’s Tier 1 capital, market prices that have been observed section, each Bank’s operations risk or if Tier 1 capital is not available, total over 120-business day periods of market capital requirement shall at all times capital (as defined by the counterparty’s stress, as determined using historical equal 30 percent of the sum of the principal regulator) or some similar data that is from an appropriate period; Bank’s credit risk capital requirement comparable measure identified by the and and market risk capital requirement. Bank. (iii) The total number of, and specific (2) Bank determination applicable (b) Alternative requirements. With the historical observations identified by the maximum exposure limits. The approval of the Finance Board, each Bank as, stress scenarios shall be: applicable maximum capital exposure (A) Satisfactory to the Finance Board; Bank may have an operations risk limits for specific counterparties are (B) Representative of the periods of capital requirement equal to less than 30 assigned to each counterparty based greatest potential stress given the Bank’s percent but no less than 10 percent of upon the credit rating of the portfolio; and the sum of the Bank’s credit risk capital counterparty, as determined in (C) Comprehensive given the requirement and market risk capital accordance with paragraph (a)(3) of this modeling capabilities available to the requirement if: section, and are provided in the Bank; and (1) The Bank provides an alternative following Table 4 of this part: (iv) The measure of the market value methodology for assessing and of the Bank’s portfolio at risk may quantifying an operations risk capital TABLE 4.—MAXIMUM LIMITS ON UNSE- incorporate empirical correlations requirement; or CURED EXTENSIONS OF CREDIT TO A within or among foreign exchange rates, SINGLE COUNTERPARTY BY equity prices, or commodity prices. (2) The Bank obtains insurance to (c) Independent validation of Bank cover operations risk from an insurer COUNTERPARTY CREDIT RATING internal market risk model or internal rated at least the second highest CATEGORY cash flow model. (1) Each Bank shall investment grade credit rating by an NRSRO. Maximum conduct an independent validation of Credit rating of counterparty capital expo- its internal market risk model or § 932.7 Reporting requirements. category sure limit internal cash flow model within the (in percent) Bank that is carried out by personnel Each Bank shall report to the Finance not reporting to the business line Board by the 15th business day of each Highest Investment Grade ...... 15 responsible for conducting business Second Highest Investment month its risk-based capital requirement Grade ...... 12 transactions for the Bank. Alternatively, by component amounts, and its actual Third Highest Investment the Bank may obtain independent total capital amount and permanent Grade ...... 6 validation by an outside party qualified capital amount, calculated as of the Fourth Highest Investment to make such determinations. close of business of the last business day Grade ...... 1.5 Validations shall be done on an annual of the preceding month, or more Below Investment Grade or basis, or more frequently as required by frequently, as may be required by the Other ...... 1 the Finance Board. Finance Board. (2) The results of such independent (3) Bank determination of applicable validations shall be reviewed by the § 932.8 Minimum liquidity requirements. credit ratings. In determining the Bank’s board of directors and provided applicable credit rating category under promptly to the Finance Board. In addition to meeting the deposit Table 4 of this part, the following (d) Finance Board approval of Bank liquidity requirements contained in criteria shall be applied: internal market risk model or internal § 965.3 of this chapter, each Bank shall (i) The most recent credit rating from cash flow model. Each Bank shall obtain hold contingency liquidity in an amount a given NRSRO shall be considered. If Finance Board approval of an internal sufficient to enable the Bank to meet its only one NRSRO has rated the market risk model or an internal cash liquidity needs, which shall, at a counterparty, that NRSRO’s rating shall flow model, including subsequent minimum, cover five business days of be used. If a counterparty has received material adjustments to the model made inability to access the consolidated credit ratings from more than one by the Bank, prior to the use of any obligation debt markets. An asset that NRSRO, the lowest credit rating from model. Each Bank shall make such has been pledged under a repurchase among those NRSROs shall be used; adjustments to its model as may be agreement cannot be used to satisfy (ii) Where a credit rating has a directed by the Finance Board. minimum liquidity requirements. modifier, the credit rating is deemed to
VerDate 11
be the credit rating without the amount of the Bank’s total secured and conditions, and may require that the modifier; unsecured extensions of credit arising capital plans of all Banks take effect on (iii) If a counterparty has received from on- or off-balance sheet the same date. different credit ratings for its transactions to any single counterparty transactions with short-term and long- or group of affiliated counterparties that § 933.2 Contents of plan. term maturities: exceeds 5 percent of the Bank’s total The capital plan for each Bank shall (A) The higher credit rating shall assets. include, at a minimum, provisions apply for purposes of determining the addressing the following matters: allowable maximum capital exposure PART 933—BANK CAPITAL (a) Minimum investment. (1) The limit applicable to the total amount of STRUCTURE PLANS capital plan shall require each member unsecured credit extended by the Bank to purchase and maintain a minimum Sec. to such counterparty; and investment in the capital stock of the 933.1 Submission of plan. Bank, in accordance with § 931.3, of this (B) The lower credit rating shall apply 933.2 Contents of plan. for purposes of determining the 933.3 Independent review of capital plan. chapter and shall prescribe the manner allowable maximum capital exposure 933.4 Transition provisions. in which the minimum investment is to limit applicable to the amount of be calculated. The plan shall require Authority: 12 U.S.C. 1422a(a)(3), 1422b(a), each member to maintain its minimum unsecured credit extended by the Bank 1426, 1440, 1443, 1446. to such counterparty for the transactions investment in the Bank’s stock for as with maturities governed by that rating. § 933.1 Submission of Plan. long as it remains a member and, with (iv) If a counterparty is placed on a (a) In general. By no later than regard to Bank stock purchased to credit watch for a potential downgrade October 29, 2001, the board of directors support an advance or other business by an NRSRO, the credit rating from that of each Bank shall submit to the Finance activity, for as long as the advance or NRSRO at the next lower grade shall be Board a plan to establish and implement business activity remains outstanding. used; and a new capital structure for that Bank, (2) The capital plan shall specify the (v) If a counterparty is not rated by a which plan shall comply with part 931 amount and class (or classes) of Bank NRSRO, the Bank shall determine the of this chapter and under which, when stock that an institution is required to applicable credit rating by using credit implemented, the Bank shall have own in order to become and remain a rating standards available from an sufficient total and permanent capital to member of the Bank, and shall specify NRSRO or other similar standards. comply with the regulatory capital the amount and class (or classes) of (b) Unsecured extensions of credit to requirements established by part 932 of Bank stock that a member is required to affiliated counterparties. The total this chapter. The Finance Board, upon own in order to obtain advances from, amount of unsecured extensions of a demonstration of good cause or to engage in other business credit by a Bank to all affiliated submitted by the board of directors of a transactions with, the Bank. If a Bank counterparties shall not exceed the Bank, may approve a reasonable requires its members to satisfy its product of the maximum capital extension of the 270-day period for minimum investment through the exposure limit provided under Table 4 submission of the capital plan. A Bank purchase of one or more combinations of this part based upon the highest shall not implement its capital plan, or of Class A and Class B stock, the credit rating of the affiliated any amendment to the plan, without authorized combinations of stock shall counterparties, as determined in Finance Board approval. be specified in the capital plan, which accordance with paragraph (a)(3) of this (b) Failure to submit a capital plan. If shall afford the members the option of section, multiplied by the lesser of: a Bank fails to submit a capital plan to satisfying the minimum investment (1) The Bank’s total capital; or the Finance Board by October 29, 2001, through the purchase of any such (2) The combined Tier 1 capital, or if including any approved extension, the combination of stock. Tier 1 capital is not available, the Finance Board may establish a capital (3) The capital plan may establish a combined total capital (as defined by plan for that Bank, take any enforcement minimum investment that is calculated each affiliated counterparty’s principal action against the Bank, its directors, or as a percentage of the total assets of the regulator) or some similar comparable its executive officers authorized by member, as a percentage of the advances measure identified by the Bank, of all of section 2B(a) of the Act (12 U.S.C. outstanding to the member, as a the affiliated counterparties. 1422b(a)), or merge the Bank pursuant percentage of the other business (c) Reporting requirements—(1) Total to section 26 of the Act (12 U.S.C. 1446) activities conducted with the member, unsecured extensions of credit. Each into any other Bank that has submitted on any other basis approved by the Bank shall report monthly to the a capital plan. Finance Board, or on any combination Finance Board the amount of the Bank’s (c) Consideration of the plan. After of the above. total unsecured extensions of credit receipt of a Bank’s capital plan, the (4) The minimum investment arising from on- and off-balance sheet Finance Board may return the plan to established by the capital plan shall be transactions to any single counterparty the Bank if it does not comply with set at a level that, when applied to all or group of affiliated counterparties that section 6 of the Act (12 U.S.C. 1426) or members, provides sufficient capital for exceeds 5 percent of: any regulatory requirement or is the Bank to comply with its minimum (i) The Bank’s total capital; or otherwise incomplete or materially capital requirements, as specified in (ii) The counterparty’s, or affiliated deficient. If the Finance Board accepts part 932 of this chapter. The capital counterparties’ combined, Tier 1 capital, a capital plan for review, it may require plan shall require the board of directors or if Tier 1 capital is not available, total the Bank to submit additional of the Bank to monitor and, as capital (as defined by each information regarding its plan or to necessary, to adjust, the minimum counterparty’s principal regulator) or amend the plan, prior to determining investment to ensure that the stock some similar comparable measure whether to approve the plan. The required to be purchased and identified by the Bank. Finance Board may approve a capital maintained by the members is sufficient (2) Total secured and unsecured plan as submitted or as amended, or to allow the Bank to comply with its extensions of credit. Each Bank shall may condition its approval on the minimum capital requirements. The report monthly to the Finance Board the Bank’s compliance with certain stated plan shall require each member to
VerDate 11
comply promptly with any adjusted (2) Shall provide that the stock of the § 933.4 Transition provisions. minimum investment established by the Bank may be issued only to and held (a) The capital plan of a Bank may board of directors of the Bank, but may only by the members of that Bank; include a transition provision that allow a member a reasonable time to do (3) Shall provide that the stock of the would allow a period of time, not to so and may allow a member to reduce Bank may be transferred only in exceed three years, during which the its outstanding business with the Bank accordance with § 931.6 of this chapter, Bank shall increase its total and as an alternative to purchasing and may be traded only between the permanent capital to levels that are additional stock. Bank and its members; sufficient to comply with its minimum (b) Classes of capital stock. The (4) May provide for a minimum leverage capital requirement and its capital plan shall specify the class or investment for members that purchase minimum risk-based capital classes of stock (including subclasses, if Class B stock that is lower than the requirement. The capital plan of a Bank any) that the Bank will issue, and shall minimum investment for members that may also include a transition provision establish the par value, rights, terms, purchase Class A stock, provided that that would allow a period of time, not and preferences associated with each the level of investment is sufficient for to exceed three years, during which class (or subclass) of stock. A Bank may the Bank to comply with its regulatory institutions that were members of the establish preferences relating to, but not capital requirements; Bank on November 12, 1999, shall limited to, the dividend, voting, or (5) Shall specify the fee, if any, to be increase the amount of Bank stock to a liquidation rights for each class or imposed on a member that cancels a level that is sufficient to comply with subclass of Bank stock. Any voting request to redeem Bank stock; and the minimum investment established by preferences established by the Bank (6) Shall specify the period of notice the capital plan. The length of the pursuant to § 915.5 of this chapter shall that the Bank will provide to a member transition periods need not be identical. expressly state the voting rights of each before the Bank, on its own initiative, (b) Any transition provision shall class of stock with regard to the election determines to repurchase any excess comply with the requirements of of Bank directors. The capital plan shall Bank stock from a member. § 931.9. provide that the owners of the Class B stock own the retained earnings, (f) Termination of membership. The capital plan shall address the manner in PART 956—FEDERAL HOME LOAN surplus, undivided profits, and equity BANK INVESTMENTS reserves of the Bank, but shall have no which the Bank will provide for the right to receive any portion of those disposition of its capital stock that is held by institutions that terminate their 19. The authority citation for part 956 items, except through declaration of a is revised to read as follows: dividend or capital distribution membership, and the manner in which approved by the board of directors or the Bank will liquidate claims against Authority: 12 U.S.C. 1422a(a)(3), 1422b(a), through the liquidation of the Bank. its members, including claims resulting 1429, 1430, 1430b, 1431, 1436. from prepayment of advances prior to (c) Dividends. The capital plan shall their stated maturity. 20. Amend § 956.1 by removing the establish the manner in which the Bank (g) Implementation. The capital plan definition of the term ‘‘NRSRO’’ and by will pay dividends, if any, on each class shall demonstrate that the Bank has adding, in alphabetical order, or subclass of stock, and shall provide made a good faith determination that definitions of the term ‘‘derivative that the Bank may not declare or pay the Bank will be able to implement the contracts’’ and ‘‘repurchase agreement’’ any dividends if it is not in compliance plan as submitted and that the Bank will to read as follows: with any capital requirement or if after be in compliance with its regulatory paying the dividend it would not be in § 956.1 Definitions. total capital requirement and its compliance with any capital * * * * * regulatory risk-based capital requirement. requirement after the plan is Derivative contract has the meaning (d) Initial issuance. The capital plan implemented. set forth in § 930.1 of this chapter. shall specify the date on which the Bank * * * * * will implement the new capital (The Office of Management and Budget has approved the information collection Repurchase agreement has the structure, and shall establish the contained in this section and assigned meaning set forth in § 930.1 of this manner in which the Bank will issue control number 3069–0059 with an chapter. Class A and/or Class B stock to its expiration date of November 30, 2003.) existing members, as well as to eligible 21. Revise the last sentence of institutions that subsequently become § 933.3 Independent review of capital plan. paragraph (b) of § 956.3 to read as members. The capital plan shall address follows: Prior to submitting its capital plan, how the Bank will retire the stock that each Bank shall conduct a review of the is outstanding as of the effective date, § 956.3 Prohibited investments and plan by an independent certified public prudential rules. including stock held by a member that accountant to ensure, to the extent does not affirmatively elect to convert or * * * * * possible, that the implementation of the exchange its existing stock to either (b) * * * A Bank may participate in plan would not result in any write- Class A or Class B stock, or some consolidated obligations denominated down of the redeemable stock owned by combination thereof. in a currency other than U.S. Dollars or its members, and shall conduct a linked to equity or commodity prices, (e) Stock transactions. The capital separate review by at least one NRSRO provided that the Bank meets the plan shall establish the criteria for the to determine, to the extent possible, requirements of § 966.8(d) of this issuance, redemption, repurchase, whether the implementation of the plan chapter, and all other applicable transfer, and retirement of stock issued would have a material effect on the requirements related to issuing by the Bank. The capital plan also: credit rating of the Bank. The Bank shall consolidated obligations. (1) Shall provide that the Bank may submit a copy of each report to the not issue stock other than in accordance Finance Board as part of its proposed 22. Add a new § 956.5 to read as with § 931.2 of this chapter; capital plan. follows:
VerDate 11
§ 956.5 Authorization for derivative adjustments of collateral be made at § 966.8 Conditions for issuance of contracts and other transactions. least on a monthly basis; consolidated obligations. A Bank may enter into the following (ii) A statement that failure of a * * * * * types of transactions: counterparty to meet a collateral call (d) If a Bank participates in any CO (a) Derivative contracts; will result in an early termination event; (b) Standby letters of credit, pursuant denominated in a currency other than (iii) A description of early termination U.S. Dollars or linked to equity or to the requirements of 12 CFR part 961; pricing and methodology, with the (c) Forward asset purchases and sales; commodity prices, then the Bank shall methodology reflecting a reasonable meet the following requirements: (d) Commitments to make advances; estimate of the market value of the over- and the-counter derivative contract at (1) The relevant foreign exchange, (e) Commitment to make or purchase termination (standard International equity price or commodity price risks other loans. Swaps and Derivatives Association, Inc. associated with the CO must be hedged 23. Add a new § 956.6, to read as language relative to early termination in accordance with § 956.6 of this follows: pricing and methodology may be used chapter; § 956.6 Use of hedging instruments. to satisfy this requirement); and (2) If there is a default on the part of (a) Applicability of GAAP. Derivative (iv) A requirement that the Bank’s a counterparty to a contract hedging the instruments that do not qualify as consent be obtained prior to the transfer foreign exchange, equity or commodity hedging instruments pursuant to GAAP of an agreement or contract by a price risk associated with a CO, the may be used only if a non-speculative counterparty. Bank shall enter into a replacement use is documented by the Bank. contract in a timely manner and as soon PART 966—CONSOLIDATED as market conditions permit. (b) Documentation requirements. (1) OBLIGATIONS Transactions with a single counterparty Dated: December 20, 2000. shall be governed by a single master 24. The authority citation of part 966 By the Board of Directors of the Federal agreement when practicable. continues to read as follows: Housing Finance Board. (2) A Bank’s agreement with the William C. Apgar, counterparty for over-the-counter Authority: 12 U.S.C. 1422a, 1422b, and derivative contracts shall include: 1431. HUD Secretary Designee to the Board. (i) A requirement that market value 25. Revise § 966.8 by adding new [FR Doc. 01–1253 Filed 1–29–01; 8:45 am] determinations and subsequent paragraph (d) to read as follows: BILLING CODE 6725–01–P
VerDate 11
Part III
Department of Commerce International Trade Administration
Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Steel Concrete Reinforcing Bars; Notices
VerDate 11
DEPARTMENT OF COMMERCE of this investigation, the following questionnaire responses submitted by events have occurred. LM. International Trade Administration On August 14, 2000, the United States On November 9, 2000, the petitioner International Trade Commission (ITC) requested a postponement of the [A–449–804] preliminarily determined that there is a preliminary determinations in all reasonable indication that a regional concurrent rebar investigations. On Notice of Preliminary Determination of industry in the United States is November 21, 2000, the Department Sales at Less Than Fair Value and materially injured or threatened with published a Federal Register notice Postponement of Final Determination: material injury by reason of imports postponing the deadline for the Steel Concrete Reinforcing Bars From from Belarus, China, Indonesia, Korea, preliminary determination until January Latvia Latvia, Moldova, Poland, and Ukraine of 16, 2001. See Notice of Postponement of certain steel concrete reinforcing bars. Preliminary Antidumping Duty AGENCY: Import Administration, See Certain Steel Concrete Reinforcing Determinations: Steel Concrete International Trade Administration, Bars from Austria, Belarus, China, Reinforcing Bars from Belarus, Department of Commerce. Indonesia, Japan, Korea, Latvia, Indonesia, Latvia, Moldova, the People’s EFFECTIVE DATE: January 30, 2001. Moldova, Poland, Russia, Ukraine, and Republic of China, Poland, the Republic Venezuela, 65 FR 51329 (August 23, FOR FURTHER INFORMATION CONTACT: Keir of Korea, and Ukraine, 65 FR 69909 2000). With respect to subject imports Whitson or Gabriel Adler at (202) 482– (November 21, 2000). from Austria, Russia, and Venezuela, 1777 or (202) 482–3813, respectively; Postponement of the Final the ITC determined that imports from AD/CVD Enforcement, Office 5, Group Determination these countries during the period of II, Import Administration, Room 1870, investigation (POI) were negligible and, Section 735(a)(2) of the Act provides International Trade Administration, therefore, these investigations were that a final determination may be U.S. Department of Commerce, 14th terminated. The ITC also determined postponed until not later than 135 days Street and Constitution Avenue, NW, that there is no reasonable indication after the date of the publication of the Washington, DC 20230. that an industry in the United States is preliminary determination if, in the The Applicable Statute and Regulations materially injured or threatened with event of an affirmative preliminary material injury, by reason of subject determination, a request for such Unless otherwise indicated, all imports from Japan. Id. postponement is made by exporters who citations to the statute are references to On August 18, 2000, the Department account for a significant proportion of the provisions effective January 1, 1995, issued antidumping questionnaires to exports of the subject merchandise, or in the effective date of the amendments the only producer/exporter of subject the event of a negative preliminary made to the Tariff Act of 1930 (the Act) merchandise in Latvia, Liepajas determination, a request for such by the Uruguay Round Agreements Act Metalurgs (LM).2 postponement is made by the petitioner. (URAA). In addition, unless otherwise As of the date of initiation of this The Department’s regulations, at 19 CFR indicated, all citations to Department of investigation, Latvia was still 351.210(e)(2), require that requests by Commerce (Department) regulations considered a non-market economy respondents for postponement of a final refer to the regulations codified at 19 (NME) country. On August 24, 2000, the determination be accompanied by a CFR part 351 (April 2000). Department received a letter from request for extension of provisional Preliminary Determination Latvia’s Ministry of Foreign Affairs measures from a four-month period to requesting that the Department revoke not more than six months. We preliminarily determine that steel the NME status of Latvia under section On January 5, 2001, LM requested concrete reinforcing bars (rebar) from 771(18)(A) of the Act. After a thorough that, in the event of an affirmative Latvia are being sold, or are likely to be examination of all relevant information preliminary determination in this sold, in the United States at less than available to the Department, we have investigation, the Department postpone fair value (LTFV), as provided in section revoked Latvia’s NME status under its final determination until 135 days 733 of the Act. The estimated margins section 771(18)(A) of the Act. See after the publication of the preliminary of sales at LTFV are shown in the Memorandum from Holly A. Kuga to determination. LM made a separate Suspension of Liquidation section of Troy H. Cribb: Non-Market Economy request to extend the provisional this notice. Status Revocation (January 12, 2001). measures to not more than six months. Case History This preliminary determination is Accordingly, since we have made an therefore based on information affirmative preliminary determination, This investigation was initiated on contained in the market economy and LM is the sole producer of the 1 July 18, 2000. See Initiation of subject merchandise in Latvia, we have Antidumping Duty Investigations: Steel 2 Section A of the questionnaire requests general postponed the final determination for Concrete Reinforcing Bars from Austria, information concerning a company’s corporate Latvia until not later than 135 days after Belarus, Indonesia, Japan, Latvia, structure and business practices, the merchandise the date of the publication of the Moldova, the People’s Republic of under investigation that it sells, and the manner in which it sells that merchandise in all of its markets. preliminary determination. China, Poland, the Republic of Korea, Section B requests a complete listing of all home the Russian Federation, Ukraine, and market sales, or, if the home market is not viable, Period of Investigation Venezuela, 65 FR 45754 (July 25, 2000) of sales in the most appropriate third-country The POI is April 1, 1999, through (Initiation Notice). Since the initiation market (This section is not applicable to respondents in non-market economy (NME) cases). March 31, 2000. This period Section C requests a complete listing of U.S. sales. corresponds to the four most recent 1 The petitioner in these investigations is the Section D requests information on the cost of fiscal quarters prior to the month of the Rebar Trade Action Coalition (RTAC), and its production (COP) of the foreign like product and filing of the petition (i.e., June 2000). individual members, AmeriSteel, Auburn Steel Co., the constructed value (CV) of the merchandise Inc., Birmingham Steel Corp., Border Steel, Inc., under investigation. In NME cases, Section D Scope of Investigation Marion Steel Company, Riverview Steel, and Nucor requests information on factors of production. Steel and CMC Steel Group. (Auburn Steel was not Section E requests information on further For purposes of these investigations, a petitioner in the Indonesia case). manufacturing. the product covered is all rebar sold in
VerDate 11
straight lengths, currently classifiable in inasmuch as no country has issued a Determination Memorandum), dated the Harmonized Tariff Schedule of the finding of dumping against Latvian January 16, 2001. United States (HTSUS) under item rebar. Further, with respect to section In order to determine whether imports number 7214.20.00 or any other tariff 733(e)(1)(A)(ii) of the Act, the from Latvia have been massive, the item number. Specifically excluded are magnitude of the dumping margins Department requested that LM provide plain rounds (i.e., non-deformed or found in this preliminary determination its shipment data for the last three years. smooth bars) and rebar that has been is insufficient to conclude that the Based on our analysis of the shipment further processed through bending or person by whom, or for whose account, data reported, because imports have coating. HTSUS subheadings are the merchandise was imported knew or decreased during the comparison provided for convenience and Customs should have known that the exporter period, we preliminarily find that the purposes. The written description of the was selling the subject merchandise at criterion under section 733(e)(1)(B) of scope of this proceeding is dispositive. less than its fair value and that there the Act has not been met, i.e., there have not been massive imports of rebar from Critical Circumstances was likely to be material injury by reason of such sales. As such, we are LM over a relatively short time. See In the petition filed on June 28, 2000, issuing a preliminary negative critical Critical Circumstances Preliminary the petitioner alleged that there is a circumstances determination. Determination Memorandum. For this reasonable basis to believe or suspect Although unnecessary in this case, we reason, we preliminarily determine that that critical circumstances exist with have also examined whether imports critical circumstances do not exist for respect to imports of rebar from Latvia. have been massive over a ‘‘relatively imports of rebar produced by LM. On July 18, 2000, concurrent with the short period’’ of time, pursuant to Regarding the ‘‘all others’’ category, it initiations of the LTFV investigation on section 733(e)(1)(B) of the Act. To do so, is the Department’s practice to conduct imports of rebar from Latvia, the its critical circumstances analysis of the Department normally compares the Department announced its intention to companies in this category based on the import volume of the subject investigate the petitioner’s allegation experience of the investigated merchandise for three months that critical circumstances exist with companies. See Notice of Final immediately preceding the filing of the respect to imports of rebar from Latvia. Determination of Sales at Less Than petition (i.e., the base period), and three On August 14, 2000, the International Fair Value: Certain Steel Concrete months following the filing of the Trade Commission (ITC) determined Reinforcing Bars from Turkey (Rebar petition (i.e., the comparison period). that there is a reasonable indication of from Turkey), 62 FR 9737, 9741 (March However, as stated in section 351.206(i) material injury to the domestic industry 4, 1997) (the Department found that of the Department’s regulations, if the from imports of rebar from Latvia. critical circumstances existed for the Section 733(e)(1) of the Act provides Secretary finds that importers, majority of the companies investigated, that the Department will determine that exporters, or producers had reason to and therefore concluded that critical there is a reasonable basis to believe or believe, at some time prior to the circumstances also existed for suspect that critical circumstances exist, beginning of the proceeding, that a companies covered by the ‘‘all others’’ if: (A)(i) There is a history of dumping proceeding was likely, then the rate). However, the Department does not and material injury by reason of Secretary may consider a time period of automatically extend a critical dumped imports in the United States or not less than three months from that circumstances determination to elsewhere of the subject merchandise, or earlier time. Imports normally will be companies covered by the ‘‘all others’’ (ii) the person by whom, or for whose considered massive when imports rate. See Notice of Final Determination account, the merchandise was imported during the comparison period have of Sales at Less Than Fair Value: knew or should have known that the increased by 15 percent or more Stainless Steel Sheet and Strip in Coils exporter was selling the subject compared to imports during the base from Japan, 64 FR 30574, 30585 (June merchandise at less than its fair value period. 8, 1999) (Stainless Steel Sheet and Strip and that there was likely to be material In this case, the petitioner argues that from Japan). Instead, the Department injury by reason of such sales, and (B) importers, exporters, or producers of may consider the traditional critical there have been massive imports of the rebar from Latvia had reason to believe circumstances criteria with respect to subject merchandise over a relatively that an antidumping proceeding was the companies covered by the ‘‘all short period. Section 351.206(h)(1) of likely before the filing of the petition. others’’ rate. the Department’s regulations provides Based upon information contained in In determining whether imports from that, in determining whether imports of the petition, we found that press reports the ‘‘all others’’ category have been the subject merchandise have been and published statements were massive, the Department followed its ‘‘massive,’’ the Department normally sufficient to establish that, by December normal practice of conducting its will examine: (i) The volume and value 1999, importers, exporters, and foreign critical circumstances analysis of of the imports; (ii) seasonal trends; and producers knew or should have known companies in this category based on the (iii) the share of domestic consumption that a proceeding was likely concerning experience of the investigated accounted for by the imports. In rebar from Latvia. As a result, the companies. In this case, since we are addition, section 351.206(h)(2) of the Department has considered whether unaware of any other Latvian rebar Department’s regulations provides that there have been massive imports after producers, it is appropriate to extend an increase in imports of 15 percent or that time based on a comparison of the experience of LM to the ‘‘all others’’ more during the ‘‘relatively short periods immediately preceding and category. For this reason, we determine period’’ of time may be considered following the end of December 1999. that the second criterion under section ‘‘massive.’’ See Memorandum from Gary Taverman 733(e)(1) of the Act has not been met With respect section to section to Holly A. Kuga, Antidumping Duty and that there have not been massive 733(e)(1)(A)(i) of the Act, we do not find Investigations of Steel Concrete imports of rebar from the ‘‘all others’’ that there is a history of dumping and Reinforcing Bar from Latvia— category over a relatively short time. material injury by reason of dumped Preliminary Negative Determination of Therefore, pursuant to section 733(e) of imports in the United States or Critical Circumstances (Critical the Act and section 351.206(h) of the elsewhere of the subject merchandise, Circumstances Preliminary Department’s regulations, we
VerDate 11
preliminarily find that critical subject merchandise is first sold by the otherwise available in reaching the circumstances do not exist for imports exporter or producer outside the United applicable determination under this of rebar produced by the ‘‘all others’’ States to an unaffiliated purchaser for title.’’ The statute requires that certain category. exportation to the United States, before conditions be met before the the date of importation, or to an Department may resort to the facts Selection of Respondents unaffiliated purchaser for exportation to otherwise available. Where the Section 777A(c)(1) of the Act directs the United States. We calculated EP Department determines that a response the Department to calculate individual based on the packed, delivered, ex- to a request for information does not dumping margins for each known factory prices charged to the first comply with the request, section 782(d) exporter and producer of the subject unaffiliated purchaser in the United of the Act provides that the Department merchandise. Where it is not practicable States prior to importation. We made will so inform the party submitting the to examine all known producers/ deductions from the starting price for response and will, to the extent exporters of subject merchandise, movement expenses in accordance with practicable, provide that party the section 777A(c)(2) of the Act permits us section 772(c)(2)(A) of the Act. These opportunity to remedy or explain the to investigate either (1) a sample of include foreign movement expense deficiency. If the party fails to remedy exporters, producers, or types of (inland freight) and foreign brokerage the deficiency within the applicable products that is statistically valid based and handling. time limits, the Department may, subject on the information available at the time We note that, as explained below, we to section 782(e), disregard all or part of of selection, or (2) exporters and did not calculate dumping margins for the original and subsequent responses, producers accounting for the largest certain sales by LM to an affiliated as appropriate. Briefly, section 782(e) volume of the subject merchandise that customer based on the reported provides that the Department ‘‘shall not can reasonably be examined. LM is the databases. Instead, in accordance with decline to consider information that is only known producer/exporter of section 776(a) of the Act, we submitted by an interested party and is subject merchandise in Latvia. preliminarily relied on adverse facts necessary to the determination but does available in calculating the dumping not meet all the applicable requirements Product Comparisons margins for the transactions in question. established by the administering Pursuant to section 771(16) of the Act, On December 1, 2000, the Department authority’’ if the information is timely, all products produced by the issued a memorandum stating that, for can be verified, is not so incomplete that respondent covered by the description purposes of this investigation, it had it cannot be used, and if the interested in the Scope of Investigation section, found LM to be affiliated with one of its party acted to the best of its ability in above, and sold in the comparison customers. See Memorandum from providing the information. Where all of market during the POI are considered to Gabriel Adler to Gary Taverman: these conditions are met, and the be foreign like products for purposes of Antidumping Investigation of Steel Department can use the information determining appropriate product Concrete Reinforcing Bars from Latvia; without undue difficulties, the statute comparisons to U.S. sales. We have Affiliation (December 1, 2000). On requires it to do so. relied on three criteria to match U.S. December 4, 2000, the Department In selecting from among the facts sales of subject merchandise to issued a supplemental sales otherwise available, section 776(b) of comparison-market sales of the foreign questionnaire to LM requesting, in part, the Act authorizes the Department to like product: type of steel, yield that LM provide the downstream sales use an adverse inference, if the strength, and size. These characteristics data for all sales made during the POI Department finds that an interested have been weighted by the Department by its affiliated customer to unaffiliated party failed to cooperate by not acting where appropriate. Where there were no parties in the United States. On to the best of its ability to comply with sales of identical merchandise in the December 6, 2000, LM stated that, while the request for information. See, e.g., comparison market to compare to U.S. it did not view itself as affiliated with Certain Welded Carbon Steel Pipes and sales, we compared U.S. sales to sales of the customer in question, it had Tubes from Thailand: Final Results of the next most similar foreign like requested that its customer provide Antidumping Duty Administrative product on the basis of the downstream sales data for its sales made Review, 62 FR 53808, 53819–20 characteristics listed above. to the United States during the POI. LM (October 16, 1997). Finally, section further stated that the affiliate was not 776(b) states that an adverse inference Fair Value Comparisons willing to provide the Department with may include reliance on information To determine whether sales of rebar the requested information. On December derived from the petition. See also from Latvia were made in the United 8, 2000, LM again stated that it could Statement of Administrative Action States at LTFV, we compared the export not provide this data to the Department. accompanying the URAA, H.R. Rep. No. price (EP) to the normal value (NV), as Section 776(a)(2) of the Act provides 103–316 at 870 (1994). described in the Export Price and that ‘‘if an interested party or any other While LM has been generally Normal Value sections of this notice. In person (A) withholds information that cooperative over the course of this accordance with section has been requested by the administering antidumping proceeding, it has not been 777A(d)(1)(A)(i) of the Act, we authority, (B) fails to provide such cooperative in responding to the calculated weighted-average EPs and, information by the deadlines for the Department’s specific request for subsequently, compared these to submission of the information or in the downstream sales data. As a result, we weighted-average home market or third- form and manner requested, subject to are applying the facts otherwise country prices, as appropriate. subsections (c)(1) and (e) of section 782, available for all sales made to the (C) significantly impedes a proceeding United States through the affiliate in Export Price under this title, or (D) provides such question. Moreover, we are making an For the price to the United States, we information but the information cannot adverse inference with respect to this calculated an EP as defined in sections be verified as provided in section 782(i), determination. Specifically, for sales 772(a) and 772(b) of the Act, the administering authority and the made through this affiliated customer, respectively. Section 772(a) of the Act Commission shall, subject to section we have assigned a margin calculated defines EP as the price at which the 782(d) and (e) of the Act, use the facts on the basis of the lowest net U.S. price
VerDate 11
reported for any sale not involving the In deriving NV, we made adjustments were sufficient to permit the recovery of affiliate, and the highest normal value as detailed in the Calculation of Normal all costs within a reasonable period of calculated for any product reported by Value Based on Third-Country Market time. the respondent.3 Prices section below. On a model-specific basis, we We note that, since most U.S. sales compared the revised COP to the third- were made through the affiliate in B. Cost of Production Analysis country prices, less any applicable question, the use of facts otherwise On October 26, 2000, the petitioner movement charges. available extends to the majority of the made a sales below cost allegation 3. Results of the COP Test. Pursuant respondent’s U.S. sales. In reaching this against LM. Based on this allegation and to section 773(b)(2)(C) of the Act, where preliminary determination, we are in accordance with section less than 20 percent of a respondent’s mindful that a respondent’s failure to 773(b)(2)(A)(i) of the Act, we found sales of a given product were at prices report the appropriate sales prices for reasonable grounds to believe or suspect less than the COP, we did not disregard the majority of U.S. sales might warrant that sales of rebar manufactured by LM any below-cost sales of that product wholesale rejection of the submitted were made at prices below the COP. As because we determined that the below- responses, and reliance entirely on the a result, the Department has conducted cost sales were not made in ‘‘substantial facts otherwise available. In view of the an investigation to determine whether quantities.’’ We found that no models of specific circumstances presented in this LM made sales in its third-country rebar sold by LM failed the 20 percent case, however, we preliminarily believe comparison market at prices below the test and, therefore, we did not disregard at this time that it is more appropriate COP during the POI, within the meaning any third-country sales in calculating to base the dumping margins in part on of section 773(b) of the Act. We NV. that portion of the reported sales conducted the COP analysis described C. Calculation of Normal Value Based database that is not directly in question below. on Third-Country Market Prices as a result of the respondent’s omission. 1. Calculation of Cost of Production. Given the nature of control between LM In accordance with section 773(b)(3) of We based third-country market prices and its affiliate (where the affiliate has the Act, we calculated a weighted- on the packed prices to unaffiliated some measure of control over LM, but average COP based on the sum of the purchasers in Germany. We adjusted the LM lacks control over its affiliate), the cost of materials and fabrication for the starting price for foreign inland freight failure of the affiliate to provide foreign like product, plus amounts for and international freight. We made no requested sales data, while warranting the home market general and other adjustments. an adverse inference with respect to administrative (G&A) expenses, selling We note that LM claimed a credit those sales, does not necessarily impugn expenses, packing expenses and interest revenue for sales made to the United LM’s compliance in reporting sales to expenses. States and Germany. In its questionnaire other customers. While the factors above We relied on the COP data submitted responses, LM characterized this do not excuse the affiliate’s failure to by LM in its cost questionnaire revenue as arising from prepayment submit the requested sales information, responses, except, as noted below, in made to LM by certain customers. For they do provide a context in which it is specific instances where the submitted this preliminary determination, we have appropriate to limit the use of adverse costs were not appropriately quantified not allowed this claimed credit revenue facts available to that specific omission. or valued. We made company-specific as a circumstance of sale adjustment, as the respondent does not appear to be Normal Value for Market Economy adjustments to the reported COP as receiving prepayment from its Analysis follows. First, we adjusted LM’s reported G&A expense to include customers. Instead, the respondent is A. Selection of Comparison Markets for certain non-operating income and apparently obtaining funds from banks Market Economy Countries expense amounts that relate to the in order to finance production, and Section 773(a)(1) of the Act directs general operations of the company. arranging for customers to cancel this that NV be based on the price at which Second, we adjusted the cost of goods obligation directly with the banks after the foreign like product is sold in the sold amount used as the denominator in the merchandise is shipped. While the home market, provided that the LM’s G&A and interest expense rate respondent has the use of the money to merchandise is sold in sufficient calculations by excluding certain non- finance production, it must pay an quantities (or value, if quantity is operating income and expense amounts interest fee to the banks, which offsets inappropriate) and that there is no included in the numerator of the G&A any imputed revenue that might arise particular market situation that prevents expense rate calculation. Finally, we from such an arrangement. LM has not a proper comparison with the EP or excluded packing expenses from the demonstrated that these fees have been CEP. The statute contemplates that calculation of LM’s G&A and interest properly reported to the Department. As quantities (or value) will normally be expenses. a result, we have denied the claimed considered insufficient if they are less 2. Test of Home Market Sales Prices. credit revenue for U.S. and third- than five percent of the aggregate We compared the adjusted weighted- country sales for purposes of this quantity (or value) of sales of the subject average COP to the third-country market preliminary determination. We intend merchandise to the United States. sales of the foreign like product, as to examine this issue further at For the Latvia case, we found that LM required under section 773(b) of the Act, verification. does not have a viable home market for in order to determine whether these D. Level of Trade sales of rebar. Therefore, the respondent sales had been made at prices below the submitted data for sales to Germany, its COP within an extended period of time LM made only EP sales to the United largest third-country market, for (i.e., a period of one year) in substantial States. LM’s EP and third-country sales were made to trading companies and purposes of the calculation of NV. quantities 4 and whether such prices resellers. In both cases, the selling 3 Because we have relied on the respondent’s own 4 In accordance with section 773(b)(2)(C)(i) of the functions performed by LM for the sales data as facts available, it is not necessary to Act, we determined that sales made below the COP corroborate such information under section 776(c) were made in substantial quantities if the volume volume of sales under consideration for the of the Act. of such sales represented 20 percent or more of the determination of NV.
VerDate 11
different customer types and channels in effect on the dates of the U.S. sales, Public Comment of distribution were limited in both as obtained from the Federal Reserve markets to price and quantity Bank (the Department’s preferred source Case briefs for this investigation must negotiation, packing, and loading. The for exchange rates). be submitted no later than one week selling functions were virtually after the issuance of the verification Verification identical in both markets. reports. Rebuttal briefs must be filed In accordance with section In accordance with section 782(i) of within five days after the deadline for 773(a)(1)(B) of the Act, to the extent the Act, we intend to verify all submission of case briefs. A list of practicable, we determine NV based on information relied upon in making our authorities used, a table of contents, and sales in the comparison market at the final determination. an executive summary of issues should same level of trade as the EP Final Critical Circumstances accompany any briefs submitted to the transaction.5 The NV level of trade is Determination Department. Executive summaries that of the starting-price sales in the should be limited to five pages total, We will make a final determination comparison market. For EP sales, the including footnotes. Further, we would concerning critical circumstances for U.S. level of trade is also the level of the appreciate it if parties submitting Latvia when we make our final starting-price sale, which is usually written comments would provide the determination regarding sales at LTFV from exporter to importer. Department with an additional copy of To determine whether NV sales are at in this investigation, which will be no the public version of any such a different level of trade than EP later than 135 days after the publication comments on diskette. transactions, we examine stages in the of this notice in the Federal Register. Section 774 of the Act provides that marketing process and selling functions Suspension of Liquidation along the chain of distribution between the Department will hold a hearing to the producer and the unaffiliated In accordance with section 733(d) of afford interested parties an opportunity customer. If the comparison market the Act, we are directing the U.S. to comment on arguments raised in case sales are at a different level of trade and Customs Service to suspend liquidation or rebuttal briefs, provided that such a the difference affects price of all entries of steel concrete hearing is requested by any interested comparability, as manifested in a reinforcing bars from Latvia that are party. If a request for a hearing is made pattern of consistent price differences entered, or withdrawn from warehouse, in an investigation, the hearing will between the sales on which NV is based for consumption on or after the date of tentatively be held two days after the publication of this notice in the Federal and comparison market sales at the level deadline for submission of the rebuttal Register. We are also instructing the of trade of the export transaction, we briefs, at the U.S. Department of make a level-of-trade adjustment under Customs Service to require a cash deposit or the posting of a bond equal Commerce, 14th Street and Constitution section 773(a)(7)(A) of the Act. Avenue, NW, Washington, DC 20230. In In implementing these principles in to the dumping margin, as indicated in the event that the Department receives this investigation, we obtained the chart below. These instructions requests for hearings from parties to information from LM about the suspending liquidation will remain in more than one rebar case, the marketing stages involved in the effect until further notice. reported U.S. and third-country market Department may schedule a single sales, including a description of the Margin hearing to encompass all those cases. Manufacturer/exporter (percent) selling activities performed by the Parties should confirm by telephone the time, date, and place of the hearing 48 respondent for each channel of Liepajas Metalurgs ...... 17.37 distribution. In identifying levels of All Others ...... 17.37 hours before the scheduled time. trade for EP and third-country market Interested parties who wish to request sales we considered the selling Disclosure a hearing, or to participate if one is functions reflected in the starting price The Department will disclose requested, must submit a written before any adjustments. request within 30 days of the LM reported that its customers in both calculations performed within five days of the date of publication of this notice publication of this notice. Requests the United States and Germany were should specify the number of trading companies and resellers. LM to the parties of the proceedings in these investigations in accordance with 19 participants and provide a list of the further reported that its selling issues to be discussed. Oral functions in both markets were identical CFR 351.224(b). presentations will be limited to issues and very limited (primarily to the International Trade Commission raised in the briefs. provision of freight services), and did Notification not include inventory maintenance, As noted above, we will make our In accordance with section 733(f) of technical advice, warranty services, or final determination no later than 135 the Act, we have notified the ITC of our advertising. Given this, we found a days after the date of publication of this sales at LTFV and negative critical single level of trade for EP sales, and a preliminary determination. circumstances preliminary single, identical level of trade in the determinations. If our final antidumping This determination is issued and comparison market. Therefore no determination is affirmative, the ITC published pursuant to sections 733(f) adjustment for level of trade is will determine whether the imports and 777(i)(1) of the Act. warranted or granted. covered by that determination are Dated: January 16, 2001. Currency Conversions materially injuring, or threaten material Troy H. Cribb, We made currency conversions into injury to, the U.S. industry. The deadline for the ITC determination Assistant Secretary for Import U.S. dollars in accordance with section Administration. 773A of the Act based on exchange rates would be the later of 120 days after the date of this preliminary determination [FR Doc. 01–2518 Filed 1–29–01; 8:45 am] BILLING CODE 3510–DS–P 5 As noted above, LM had only EP sales in the or 45 days after the date of our final United States during the POI. determination.
VerDate 11
DEPARTMENT OF COMMERCE of this investigation, the following People’s Republic of China, Poland, the events have occurred: Republic of Korea and Ukraine, 65 FR International Trade Administration On August 14, 2000, the United States 69909 (November 21, 2000). International Trade Commission (ITC) [A–822–804] preliminarily determined that there is a Postponement of the Final reasonable indication that imports of the Determination Notice of Preliminary Determination of products subject to this investigation are Section 735(a)(2) of the Act provides Sales at Less Than Fair Value and threatening material injury or materially that a final determination may be Postponement of Final Determination: injuring a regional industry in the postponed until not later than 135 days Steel Concrete Reinforcing Bars From United States producing the domestic after the date of the publication of the Belarus like product. See Certain Steel Concrete preliminary determination if, in the AGENCY: Import Administration, Reinforcing Bars From Austria, Belarus, event of an affirmative preliminary International Trade Administration, China, Indonesia, Japan, Korea, Latvia, determination, a request for such Department of Commerce. Moldova, Poland, Russia, Ukraine, and postponement is made by exporters who Venezuela, 65 FR 51329 (August 23, account for a significant proportion of EFFECTIVE DATE: January 30, 2001. 2000). With respect to subject imports exports of the subject merchandise, or in FOR FURTHER INFORMATION CONTACT: from Austria, Russia, and Venezuela, the event of a negative preliminary Alexander Amdur or Karine Gziryan at the ITC determined that imports from determination, a request for such (202) 482–5346 or (202) 482–4081, these countries during the period of postponement is made by the petitioner. respectively; AD/CVD Enforcement, investigation (POI) were negligible and, The Department’s regulations, at 19 CFR Office 4, Group II, Import therefore, these investigations were 351.210(e)(2), require that requests by Administration, Room 1870, terminated. The ITC also determined respondents for postponement of a final International Trade Administration, that there is no reasonable indication determination be accompanied by a U.S. Department of Commerce, 14th that an industry in the United States is request for extension of provisional Street and Constitution Avenue, NW., materially injured or threatened with measures from a four-month period to Washington, DC 20230. material injury, by reason of subject not more than six months. The Applicable Statute and Regulations imports from Japan. Id. On November 15, 2000, BSW On August 18, 2000, we sent the requested that, in the event of an Unless otherwise indicated, all antidumping questionnaire to the affirmative preliminary determination citations to the statute are references to Embassy of the Republic of Belarus with in this investigation, the Department the provisions effective January 1, 1995, a letter requesting that it forward the postpone its final determination until the effective date of the amendments questionnaire to all exporters who had 135 days after the publication of the made to the Tariff Act of 1930 (the Act) shipments of rebar to the United States preliminary determination. BSW also by the Uruguay Round Agreements Act during the POI.2 We received responses included a request to extend the (URAA). In addition, unless otherwise from one company, Byelorussian Steel provisional measures to not more than indicated, all citations to Department of Works (BSW). We have reason to believe six months. Accordingly, since we have Commerce (the Department) regulations that this company accounted for all made an affirmative preliminary refer to the regulations codified at 19 shipments of rebar from Belarus to the determination, we have postponed the CFR part 351 (April 2000). United States during the POI. We issued final determination until not later than Preliminary Determination supplemental questionnaires to BSW, 135 days after the date of the where appropriate. publication of the preliminary We preliminarily determine that steel On November 9, 2000, the petitioner determination. concrete reinforcing bars (rebar) from requested a postponement of the Belarus are being sold, or are likely to preliminary determination in this Period of Investigation be sold, in the United States at less than investigation. On November 21, 2000, The POI is October 1, 1999, through fair value (LTFV), as provided in section the Department published a Federal March 31, 2000. This period 733 of the Act. The estimated margins Register notice postponing the deadline corresponds to the two most recent of sales at LTFV are shown in the for the preliminary determination until fiscal quarters prior to the month of the Suspension of Liquidation section of January 16, 2001. See Notice of filing of the petition (i.e., June 2000). this notice. Postponement of Preliminary Scope of Investigation Case History Antidumping Duty Determinations: Steel Concrete Reinforcing Bars from For purposes of these investigations, This investigation was initiated on Belarus, Indonesia, Latvia, Moldova, the the product covered is all rebar sold in July 18, 2000.1 See Initiation of straight lengths, currently classifiable in Antidumping Duty Investigations: Steel 2 Section A of the questionnaire requests general the Harmonized Tariff Schedule of the Concrete Reinforcing Bars from Austria, information concerning a company’s corporate United States (HTSUS) under item Belarus, Indonesia, Japan, Latvia, structure and business practices, the merchandise number 7214.20.00 or any other tariff Moldova, the People’s Republic of under investigation that it sells, and the manner in item number. Specifically excluded are which it sells that merchandise in all of its markets. China, Poland, the Republic of Korea, Section B requests a complete listing of all home plain rounds (i.e., non-deformed or the Russian Federation, Ukraine, and market sales, or, if the home market is not viable, smooth bars) and rebar that has been Venezuela, 65 FR 45754 (July 25, 2000) of sales in the most appropriate third-country further processed through bending or (Initiation Notice). Since the initiation market (This section is not applicable to coating. HTSUS subheadings are respondents in non-market economy (NME) cases). Section C requests a complete listing of U.S. sales. provided for convenience and Customs 1 The petitioner in these investigations is the Section D requests information on the cost of purposes. The written description of the Rebar Trade Action Coalition (RTAC), and its production (COP) of the foreign like product and scope of this proceeding is dispositive. individual members, AmeriSteel, Auburn Steel Co., the constructed value (CV) of the merchandise Inc., Birmingham Steel Corp., Border Steel, Inc., under investigation. In NME cases, Section D Critical Circumstances Marion Steel Company, Riverview Steel, and Nucor requests information on factors of production. Steel and CMC Steel Group. (Auburn Steel was not Section E requests information on further In a letter filed on August 22, 2000, a petitioner in the Indonesia case). manufacturing. the petitioner alleged that there is a
VerDate 11
reasonable basis to believe or suspect percent or more compared to imports reason, we preliminarily determine that that critical circumstances exist with during the base period. critical circumstances do not exist for respect to imports of rebar from Belarus. In this case, the petitioner argues that imports of rebar from Belarus. Under section 733(e)(1) of the Act, when importers, exporters, or producers of Non-Market Economy Status for Belarus critical circumstances allegations are rebar from Belarus had reason to believe submitted more than 20 days before the that an antidumping proceeding was In accordance with section 771(18)(C) scheduled date of the preliminary likely before the filing of the petition. of the Act, any determination that a determination, the Department shall Based upon information contained in foreign country has at one time been determine on the basis of information the petition, we found that press reports considered a non-market economy available whether there is a reasonable and published statements were (NME) shall remain in effect until basis to believe or suspect that critical sufficient to establish that, by the end of revoked. This status covers the circumstances exist. December 1999, importers, exporters, geographic area of the former U.S.S.R., Section 733(e)(1) of the Act provides and foreign producers knew or should each part of which retains the NME that the Department will determine that have known that a proceeding was status of the former U.S.S.R. Therefore, there is a reasonable basis to believe or likely concerning rebar from Belarus. As Belarus will be treated as a NME suspect that critical circumstances exist a result, pursuant to section 351.206(i) country unless and until its NME status if: (A)(i) There is a history of dumping of the Department’s regulations, the is revoked (see Preliminary and material injury by reason of Department has considered whether Determinations of Sales at Less Than dumped imports in the United States or there have been massive imports after Fair Value: Uranium From Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine elsewhere of the subject merchandise, or that time based on a comparison of and Uzbekistan; and Preliminary (ii) the person by whom, or for whose periods immediately preceding and Determinations of Sales at Not Less account, the merchandise was imported following the end of December 1999 Than Fair Value: Uranium From knew or should have known that the (i.e., April 1999 through December Armenia, Azerbaijan, Belarus, Georgia, exporter was selling the subject 1999, and January 2000 through Moldova and Turkmenistan, 57 FR merchandise at less than its fair value September 2000, respectively). See 23380 (June 3, 1992)). and that there was likely to be material Memorandum from Tom Futtner to The respondent in this investigation injury by reason of such sales, and (B) Holly A. Kuga, Antidumping Duty has not requested a revocation of there have been massive imports of the Investigations of Steel Concrete Reinforcing Bar from Belarus— Belarus’s NME status. We have, subject merchandise over a relatively Preliminary Negative Determination of therefore, preliminarily continued to short period. Section 351.206(h)(1) of Critical Circumstances (Critical treat Belarus as a NME. the Department’s regulations provides Circumstances Preliminary When the Department is investigating that, in determining whether imports of Determination Memorandum), dated imports from a NME country, section the subject merchandise have been January 16, 2000. 773(c)(1) of the Act directs us to base ‘‘massive,’’ the Department normally In its critical circumstances normal value (NV) on the NME will examine: (i) The volume and value allegation, the petitioner also alleges producer’s factors of production, valued of the imports; (ii) seasonal trends; and that rebar is a product for which in a comparable market economy that is (iii) the share of domestic consumption demand is subject to seasonal shifts, and a significant producer of comparable accounted for by the imports. In that it is appropriate to use a seasonal merchandise. The sources of individual addition, section 351.206(h)(2) of the methodology to examine whether an factor prices are discussed under the Department’s regulations provides that import surge occurred with respect to Normal Value section, below. an increase in imports of 15 percent or Belarus. We disagree with the Separate Rates more during the ‘‘relatively short petitioner’s analysis of massive imports period’’ of time may be considered based on seasonality because the It is the Department’s policy to assign ‘‘massive.’’ evidence on the record does not all exporters of subject merchandise in In determining whether there are substantiate that imports of rebar from a NME country a single rate, unless an ‘‘massive imports’’ over a ‘‘relatively Belarus are subject to seasonal shifts. exporter can demonstrate that it is short period,’’ pursuant to section See Critical Circumstances Preliminary sufficiently independent so as to be 733(e)(1)(B) of the Act, the Department Determination Memorandum. entitled to a separate rate. BSW has normally compares the import volume In order to determine whether imports submitted separate rates information in of the subject merchandise for three from Belarus have been massive, the its section A responses, and has months immediately preceding the Department requested that BSW, the requested a separate, company-specific filing of the petition (i.e., the base only Belorussian producer and exporter rate. BSW has stated that it is wholly period), and three months following the to the United States of the subject owned by the Ministry of Industry of the filing of the petition (i.e., the merchandise,3 provide its shipment data Republic of Belarus, but that is not comparison period). However, as stated for the last three years. Based on our controlled by the Government of the in section 351.206(i) of the Department’s analysis of the shipment data reported, Republic of Belarus. regulations, if the Secretary finds that because imports have decreased during The Department’s separate rates test is importers, exporters, or producers had the comparison period, we preliminarily not concerned, in general, with reason to believe, at some time prior to find that the criterion under section macroeconomic/border-type controls the beginning of the proceeding, that a 733(e)(1) of the Act has not been met, (e.g., export licenses, quotas, and proceeding was likely, then the i.e., there have not been massive minimum export prices), particularly if Secretary may consider a time period of imports of rebar from BSW over a these controls are imposed to prevent not less than three months from that relatively short time. See Critical dumping. Rather, the test focuses on earlier time (i.e., from that time prior to Circumstances Preliminary controls over export-related investment, the beginning of the proceeding). Determination Memorandum. For this pricing, and output decision-making Imports normally will be considered process at the individual firm level. See massive when imports during the 3 See section of this notice on the Belarus-wide Certain Cut-to-Length Carbon Steel Plate comparison period have increased by 15 rate. from Ukraine: Final Determination of
VerDate 11
Sales at Less Than Fair Value, 62 FR Belarus that support its claims, and that has the authority to negotiate and sign 61754, 61757 (November 19, 1997); demonstrate the absence of de jure contracts, it appears that BSW does not Tapered Roller Bearings and Parts control. While BSW’s Charter may have autonomy from the government in Thereof, Finished and Unfinished, from provide for the company to operate selecting its management: BSW’s the People’s Republic of China: Final independently in some respects, the Directors, appointees of the Ministry of Results of Antidumping Duty Charter (which BSW placed on the Industry, select the management. Administrative Review, 62 FR 61276, record) is subject to the laws of Belarus Furthermore, BSW does not have 61279 (November 17, 1997); and Honey (which BSW did not submit), and does complete operational control over either from the People’s Republic of China: not by itself prove the absence of de jure the proceeds of its export sales or its Preliminary Determination of Sales at control. Therefore, without any profits. Other record evidence, Less Than Fair Value, 60 FR 14725, documentary proof of the absence of de including BSW’s Charter, indicates that 14726 (March 20, 1995). jure control, BSW has not overcome the in general, BSW’s relevant activities are To establish whether a firm is presumption of de jure control. under the jurisdiction of its owner, the sufficiently independent to be entitled Ministry of Industry of the Republic of 2. Absence of De Facto Control to a separate rate, the Department Belarus. In view of BSW’s relationship analyzes each exporting entity under the The Department typically considers with the Ministry of Industry of the test established in Final Determination four factors in evaluating whether each Republic of Belarus, BSW has not of Sales at Less Than Fair Value: respondent is subject to de facto overcome the presumption of de facto Sparklers from the People’s Republic of governmental control of its export government control. Due to the China, 56 FR 20588 (May 6, 1991), and functions: (1) Whether the export prices proprietary nature of these issues, for amplified in Final Determination of are set by or subject to the approval of further details, see Memorandum on Sales at Less Than Fair Value: Silicon a governmental authority; (2) whether Whether to Grant BSW a Separate Rate Carbide from the People’s Republic of the respondent has authority to dated January 16, 2001. China, 59 FR 22585 (May 2, 1994) negotiate and sign contracts and other The failure to demonstrate either the (Silicon Carbide). Under this test, the agreements; (3) whether the respondent absence of de jure or de facto control Department assigns separate rates in has autonomy from the government in makes an exporter ineligible for a NME cases only if an exporter can making decisions regarding the separate rate. In this case, we have affirmatively demonstrate the absence of selection of management; and (4) preliminarily determined that BSW has both (1) de jure and (2) de facto whether the respondent retains the failed to demonstrate the absence of governmental control over export proceeds of its export sales and makes both de jure and de facto control. activities. See Silicon Carbide and Final independent decisions regarding Therefore, the Department preliminarily Determination of Sales at Less Than disposition of profits or financing of determines that BSW is not eligible to Fair Value: Furfuryl Alcohol from the losses. receive a separate rate. People’s Republic of China, 60 FR 22545 BSW reports that it has authority to The Belarus-Wide Rate (May 8, 1995). negotiate and sign contracts, and claims that no organization outside BSW As in all NME cases, the Department 1. Absence of De Jure Control reviews or approves any aspect of implements a policy whereby there is a The Department considers the BSW’s export sales transactions. In rebuttable presumption that all following de jure criteria in determining addition, the submitted sales exporters or producers comprise a single whether an individual company may be documentation shows no government exporter under common government granted a separate rate: (1) An absence involvement in setting export prices. In control, the ‘‘NME entity.’’ The of restrictive stipulations associated regard to management selection, BSW Department assigns a single NME rate to with an individual exporter’s business states that the Ministry of Industry of the NME entity, unless an exporter can and export licenses; (2) any legislative the Republic of Belarus appoints the demonstrate eligibility for a separate enactments decentralizing control of Directors of BSW. Then, in consultation rate. Information on the record of this companies; and (3) any other formal with the General Director of BSW, the investigation indicates that BSW was measures by the government Directors appoint the management of the only Belorussian producer and decentralizing control of companies. BSW. BSW notes that the General exporter to sell the subject merchandise In its questionnaire response, BSW Director also must notify the to the United States during the POI. asserts that under its Charter, it operates Government of any change in the Since the only Belorussian producer as an independent economic unit with position of Chief Engineer, the second and exporter of the subject merchandise those rights accorded to a legal entity, most senior position in the company. responded to the Department’s including the ownership of property, In regard to export revenue and questionnaire, and we have no reason to and independent responsibility for its profits, BSW reports that it has no believe that there are other non- sales. BSW also states that its owner, the restrictions on the use of its export responding exporters/producers of the Ministry of Industry of the Republic of revenue, but states that by special subject merchandise during the POI, we Belarus, does not control the company’s decrees of the Republic of Belarus, it is calculated a Belarus-wide rate based on export activities. BSW further claims required to sell a certain percentage of the weighted-average margin that there are no licensing requirements, its export revenue. BSW also claims that determined for BSW. quotas, or any other restrictions or the management of BSW is solely controls by the Government of Belarus responsible for the disposition of Fair Value Comparisons on exports of subject merchandise to the profits. However, proprietary To determine whether sales of rebar United States or any other destination. documents on the record of this from Belarus were made in the United However, despite requests by the investigation indicate that the Ministry States at less than fair value, we Department in its original and of Industry of the Republic of Belarus compared export price (EP) to a NV supplemental questionnaires, BSW did influences the allocation of BSW’s calculated using our NME methodology, not place on the record any legislative profit. as described below. In accordance with enactments or other formal measures by While the record evidence indicates section 777A(d)(1)(A)(i) of the Act, we the Government of the Republic of that BSW sets its own export prices and calculated weighted-average EPs.
VerDate 11
Export Price for the POI. To calculate NV, we steel products comparable to the subject We used EP methodology in multiplied the reported per-unit merchandise. Although Sahaviriya does accordance with section 772(a) of the quantities by publicly available not produce rebar, we used Sahaviriya’s Act because the merchandise was sold, surrogate values from Thailand. statement because Sahaviriya is a Thai prior to importation, by BSW to an In selecting the surrogate values, we producer of comparable steel products, unaffiliated purchaser for exportation to considered the quality, specificity, and and we could not locate a financial the United States, and constructed contemporaneity of the data. As statement of a Thai rebar producer from export price (CEP) methodology was not appropriate, we included freight costs in which we could calculate a positive otherwise warranted based on the facts input prices to make them delivered amount of profit. We only included on the record. At the time of sale, BSW prices. Specifically, we added to the depreciation in our overhead surrogate values a surrogate freight cost knew that its reported sales of the calculation because Sahaviriya’s using the reported distance from the subject merchandise were destined for financial statement does not separately domestic supplier to the factory where the United States. list other factory overhead expenses. We calculated EP based on the this distance was shorter than the To value railway freight rates, we packed, delivered-at-frontier (DAF) and distance from the nearest seaport to the used a November 1999 rate from the free-carrier (FCA) prices charged to the factory. This adjustment is in State Railway of Thailand. first unaffiliated customer for accordance with the Court of Appeals Verification exportation to the United States. Where for the Federal Circuit’s decision in Sigma Corp. v. United States, 117 F. 3d appropriate, we made deductions from In accordance with section 782(i) of 1401 (Fed. Cir. 1997). Where a producer the starting price (gross unit price) for the Act, we intend to verify all did not report the distance between the inland freight from the factory to the information relied upon in making our domestic supplier and the factory, we frontier. Because inland freight was final determination. used as facts available the longest provided by NME companies, we based distance reported, i.e., the distance from Final Critical Circumstances freight charges on surrogate freight rates the nearest seaport to the factory. For Determination from Thailand (see the Normal Value those values not contemporaneous with section for further discussion). the POI, we adjusted the values to We will make a final determination Normal Value account for inflation using wholesale concerning critical circumstances for price indices published in the Belarus when we make our final A. Surrogate Country International Monetary Fund’s determination regarding sales at LTFV Section 773(c)(4) of the Act requires International Financial Statistics. in this investigation, which will be no the Department to value the NME We valued material inputs and later than 135 days after the date of producer’s factors of production, to the packing materials (including steel scrap, publication of the preliminary LTFV extent possible, in one or more market ferroalloys, lime, limestone, coke, determination. economy countries that: (1) Are at a dolomite, haydite, fluorspar, wire with Suspension of Liquidation level of economic development silicon calcium powder, electrodes, comparable to that of the NME country; nitrogen, oxygen, argon, wire, and We are directing the Customs Service and (2) are significant producers of labels) using values from the to suspend liquidation of any entries of comparable merchandise. The appropriate Harmonized Tariff Schedule rebar from Belarus entered, or Department initially determined that (HTS) number, from 1997, 1998, and withdrawn from warehouse, for Colombia, Ecuador, Namibia, South 1999 Thai imports statistics reported in consumption on or after the date on Africa, and Thailand were the countries the United Nations Commodity Trade which this notice is published in the most comparable to Belarus in terms of Statistics. Where a material input was Federal Register. We are instructing the overall economic development (see the purchased in a market-economy Customs Service to require a cash August 31, 2000, memorandum, currency from an unaffiliated market- deposit or the posting of a bond equal Antidumping Duty Investigation of Steel economy supplier, we valued such to the weighted-average amount by Concrete Reinforcing Bars (Rebar) from material input at the actual purchase which the NV exceeds the EP, as Belarus: Nonmarket Economy Status price in accordance with section indicated in the chart below. These and Surrogate Country Selection). 351.408 (c)(1) of the Department’s instructions suspending liquidation will Because of a lack of necessary factor regulations. For a complete analysis of remain in effect until further notice. price information from the other surrogate values, see Surrogate Value The weighted-average dumping potential surrogate countries that are Memorandum. margins are provided below: significant producers of products We valued labor using the method described in 19 CFR 351.408(c)(3). comparable to the subject merchandise, Manufacturer/exporter (percent) Margin we have relied, where possible, on To value electricity, we used the 1997 (percent) information from Thailand, the source Thai electricity rates, as adjusted, of the most complete information from reported in the publication Energy Belarus-Wide Rate ...... 73.98 among the potential surrogate countries. Prices and Taxes, fourth quarter 1999. Accordingly, we have calculated NV by We based the value of natural gas on The Belarus-wide rate applies to all applying Thai values to BSW’s factors of 1993 Thai prices reported in Coal and entries of the subject merchandise from production. See Factors of Production Natural Gas Competition in APEC Belarus. Valuation Memorandum, dated January Economies, published by the Asian Disclosure 16, 2001 (Surrogate Value Institute of Technology in August 1999. Memorandum). We based our calculation of selling, The Department will disclose general and administrative (SG&A) calculations performed within five days B. Factors of Production expenses, overhead, and profit on the of the date of publication of this notice In accordance with section 773(c) of 1999 financial statement of Sahaviriya to the parties of the proceedings in this the Act, we calculated NV based on the Steel Industries Public Company investigation in accordance with 19 CFR factors of production reported by BSW Limited (Sahaviriya), a Thai producer of 351.224(b).
VerDate 11
International Trade Commission after the date of the publication of the Antidumping Duty Investigations: Steel Notification preliminary determination. Concrete Reinforcing Bars from Austria, This determination is issued and In accordance with section 733(f) of Belarus, Indonesia, Japan, Latvia, published pursuant to sections 733(f) the Act, we have notified the ITC of our Moldova, the People’s Republic of and 777(i)(1) of the Act. affirmative sales at less than fair value China, Poland, the Republic of Korea, and negative critical circumstances Dated: January 16, 2001. the Russian Federation, Ukraine, and preliminary determinations. If our final Troy H. Cribb, Venezuela, 65 FR 45754 (July 25, 2000) antidumping determination is Assistant Secretary for Import (Initiation Notice). Since the initiation affirmative, the ITC will determine Administration. of this investigation, the following whether these imports are materially [FR Doc. 01–2519 Filed 1–29–01; 8:45 am] events have occurred. injuring, or threaten material injury, to BILLING CODE 3510–DS–P On August 14, 2000, the United States the U.S. industry. The deadline for that International Trade Commission (the ITC determination would be the later of ITC) preliminarily determined that there 120 days after the date of this DEPARTMENT OF COMMERCE is a reasonable indication a regional preliminary determination or 45 days industry in the United States is International Trade Administration after the date of our final determination. materially injured or threatened with Public Comment [A–841–804] material injury by reason of imports from Belarus, China, Indonesia, Korea, Case briefs for this investigation must Notice of Preliminary Determination of Latvia, Moldova, Poland, and Ukraine of be submitted no later than one week Sales at Less Than Fair Value: Steel certain steel concrete reinforcing bars. after the issuance of the verification Concrete Reinforcing Bars From See Certain Steel Concrete Reinforcing report. Rebuttal briefs must be filed Moldova Bars From Austria, Belarus, China, within five days after the deadline for Indonesia, Japan, Korea, Latvia, submission of case briefs. A list of AGENCY: Import Administration, International Trade Administration, Moldova, Poland, Russia, Ukraine, and authorities used, a table of contents, and Venezuela, 65 FR 51329 (August 23, an executive summary of issues should Department of Commerce. EFFECTIVE DATE: January 30, 2001. 2000). With respect to subject imports accompany any briefs submitted to the from Austria, Russia, and Venezuela, FOR FURTHER INFORMATION CONTACT: Department. Executive summaries the ITC determined that imports from Nithya Nagarajan or Michele Mire at should be limited to five pages total, these countries during the period of (202) 482–5253 or (202) 482–4711, including footnotes. Further, we would investigation (POI) were negligible and, appreciate it if parties submitting respectively; AD/CVD Enforcement, therefore, these investigations were written comments would provide the Office 4, Group II, Import terminated. The ITC also determined Department with an additional copy of Administration, Room 1870, that there is no reasonable indication the public version of any such International Trade Administration, that an industry in the United States is comments on diskette. U.S. Department of Commerce, 14th materially injured or threatened with Section 774 of the Act provides that Street and Constitution Avenue, NW, material injury, by reason of subject the Department will hold a hearing to Washington, DC 20230. imports from Japan. Id. afford interested parties an opportunity The Applicable Statute and Regulations to comment on arguments raised in case On August 18, 2000, we sent the or rebuttal briefs, provided that such a Unless otherwise indicated, all antidumping questionnaire to the hearing is requested by any interested citations to the statute are references to Embassy of the Republic of Moldova party. If a request for a hearing is made the provisions effective January 1, 1995, with a letter requesting that it forward in an investigation, the hearing will the effective date of the amendments the questionnaire to all exporters who tentatively be held two days after the made to the Tariff Act of 1930 (the Act) had shipments of rebar to the United deadline for submission of the rebuttal by the Uruguay Round Agreements Act States during the POI.2 We received briefs, at the U.S. Department of (URAA). In addition, unless otherwise responses from one company, Moldova Commerce, 14th Street and Constitution indicated, all citations to Department of Steel Works (MSW). We have reason to Avenue, NW, Washington, DC 20230. In Commerce (the Department) regulations believe that MSW is the only exporter the event that the Department receives refer to the regulations codified at 19 to the United States during the POI. We requests for hearings from parties to CFR Part 351 (2000). more than one rebar case, the Preliminary Determination Inc., Birmingham Steel Corp., Border Steel, Inc., Department may schedule a single Marion Steel Company, Riverview Steel, and Nucor hearing to encompass all the cases. We preliminarily determine that steel Steel and CMC Steel Group. (Auburn Steel was not a petitioner in the Indonesia case). Parties should confirm by telephone the concrete reinforcing bars (rebar) from Moldova are being sold, or are likely to 2 Section A of the questionnaire requests general time, date, and place of the hearing 48 information concerning a company’s corporate hours before the scheduled time. be sold, in the United States at less than structure and business practices, the merchandise Interested parties who wish to request fair value (LTFV), as provided in section under investigation that it sells, and the manner in a hearing, or to participate if one is 733 of the Act. The estimated margins which it sells that merchandise in all of its markets. of sales at LTFV are shown in the Section B requests a complete listing of all home requested, must submit a written market sales, or, if the home market is not viable, request within 30 days of the Suspension of Liquidation section of of sales in the most appropriate third-country publication of this notice. Requests this notice. market (This section is not applicable to respondents in non-market economy (NME) cases). should specify the number of Case History Section C requests a complete listing of U.S. sales. participants and provide a list of the This investigation was initiated on Section D requests information on the cost of issues to be discussed. Oral production (COP) of the foreign like product and July 18, 2000.1 See Initiation of presentations will be limited to issues the constructed value (CV) of the merchandise under investigation. In NME cases, Section D raised in the briefs. 1 The petitioner in these investigations is the requests information on factors of production. As noted above, the final Rebar Trade Action Coalition (RTAC), and its Section E requests information on further determination will be issued 135 days individual members, AmeriSteel, Auburn Steel Co., manufacturing.
VerDate 11
issued several supplemental questionnaires. We note that at each MSW’s September 23, 2000, October 20, questionnaires to MSW, as appropriate. stage of the process, MSW failed to 2000, and November 8, 2000 responses On August 18, 2000, in the provide the requested information even to the non-market economy section A Department’s original questionnaire, we after receiving extensions from the questionnaire. requested MSW to provide copies of Department. For example, with regard to On October 27, 2000, the Department legislation and other documentation to translations and discussions of issued its supplemental section C and D substantiate its claim for a separate rate. legislation issued by the Government of questionnaire, requesting MSW to On September 22, 2000, MSW Moldova and ‘‘TMR,’’ the Department provide information to substantiate its responded to the Department’s original made multiple requests for information. claims for date of sale, affiliation issues, Section A questionnaire and claimed However, as evidenced by the and also to provide a complete list of all that the company was located in the submissions on the record, MSW the factors of production which MSW ‘‘Transdniestrian region of Moldova’’ repeatedly filed responses stating that it had omitted in its original Section C and (TMR).3 Accordingly, MSW stated that would provide the requested D responses filed on October 13, 2000. any discussion regarding separate rates information at some undisclosed future The response to this supplemental or copies of documentation and date. Finally, after numerous requests, questionnaire was received on legislation would concern only the MSW filed translated copies of the November 3, 2000. relationship between ‘‘TMR’’ and MSW. requested legislation on November 22, On November 3, 2000, the petitioner Currently, the United States 2000, nearly three months after these alleged, in conjunction with MSW’s Government does not recognize the documents were initially requested in MOI request, that MSW’s sales were ‘‘TMR’’ as a separate political state. On the Department’s original questionnaire. sold below the cost of production. October 3, 2000, the Department, issued Nonetheless, recognizing MSW’s Pending the Department’s determination a supplemental questionnaire, attempts to respond to the Department’s with respect to MSW’s MOI request, the requesting that MSW provide complete information requests, and in light of its Department initiated a sales-below cost answers to the separate rates section of claimed unique difficulties, we believe investigation on November 7, 2000, and the questionnaire as it relates to the that it is appropriate to use the issued a section D questionnaire to Republic of Moldova. On October 20, information placed on the record for MSW. Responses to this questionnaire 2000, MSW responded, claiming that it this preliminary determination, subject were submitted on December 6, 2000, is not under the jurisdiction of the to verification. after the Department granted MSW’s Republic of Moldova and would In a letter filed on August 22, 2000, request for an extension. therefore only provide information as it the petitioner alleged that there is a related to ‘‘TMR.’’ Finally, on October reasonable basis to believe or suspect On November 9, 2000, the Department 31, 2000, the Department issued a that critical circumstances exist with received a timely request for second supplemental section A respect to imports of rebar from postponement of the preliminary questionnaire, requesting MSW to Moldova. On November 27, 2000, the determination from the petitioner in provide copies of documentation and Department preliminarily determined accordance with 19 CFR 351.205(e). The other supporting evidence for its claim that there is a reasonable basis to believe Department postponed the preliminary for a separate rate, its claim for treating or suspect that critical circumstances determination, pursuant to section U.S. sales as export price (EP) exist for imports of rebar from Moldova. 733(c)(1)(A) of the Act, until January 16, transactions, and supporting See Preliminary Determinations of 2001. See Notice of Postponement of discussions on several issues regarding Critical Circumstances: Steel Concrete Preliminary Antidumping Duty affiliations with its customers. This Reinforcing Bars from Ukraine and Determinations: Steel Concrete second supplemental questionnaire was Moldova, 65 FR 70696 (November 27, Reinforcing Bars from Belarus, issued by the Department due to MSW’s 2000). Indonesia, Latvia, Moldova, the People’s failure to respond to several questions On October 13, 2000, in a cover letter Republic of China, Poland, the Republic in its October 20, 2000 response on accompanying its unsolicited market of Korea, and Ukraine, 65 FR 69909 these same issues. A response to the economy Section B and C response, (November 21, 2000). second supplemental questionnaire was MSW requested that the Department Period of Investigation filed on November 8, 2000. find the concrete reinforcing bar During the course of this proceeding, industry in Moldova to be a market- The POI is October 1, 1999, through MSW requested, and the Department oriented industry (MOI), but failed to March 31, 2000. This period granted, several extensions to enable provide a market economy section A corresponds to the two most recent MSW to respond to the Department’s response. The petitioner submitted fiscal quarters prior to the month of the questions. The issues of primary comments to the Department on October filing of the petition (i.e., June 2000). importance in this investigation are 18, 2000, objecting to the MOI claim Scope of Investigation separate rates, the proper universe of made by the responding company on U.S. sales, and any potential affiliations the grounds that neither the Republic of For purposes of these investigations, with customers. These topics were Moldova nor ‘‘TMR’’ can be described the product covered is all rebar sold in addressed in the Department’s original, as operating under market principles. straight lengths, currently classifiable in first supplemental section A, and Subsequently, the Department issued a the Harmonized Tariff Schedule of the second supplemental section A supplemental questionnaire to MSW on United States (HTSUS) under item October 20, 2000, requesting any number 7214.20.00 or any other tariff 3 Although Moldova became independent in additional information relevant to the item number. Specifically excluded are 1991, the population east of the Dniester river has MOI request, including a request for a plain rounds (i.e., non-deformed or proclaimed a ‘‘Transdniestrian’’ republic, referred to in this case as ‘‘TMR.’’ See CIA World Factbook, market economy section A response. On smooth bars) and rebar that has been Moldova. The United States Government does not November 8, 2000, we received further processed through bending or recognize ‘‘TMR’’ as a legitimate governmental responses from MSW providing coating. HTSUS subheadings are body, i.e., ‘‘country’’ within the meaning of section documentation which it claimed provided for convenience and Customs 773(c)(1)(A) of the Act. The United States only recognizes the Republic of Moldova as an supported its MOI claim, but in essence purposes. The written description of the independent political entity. merely referred the Department to scope of this proceeding is dispositive.
VerDate 11
Critical Circumstances MOI request on October 20, 2000. This As noted above, MSW responded to the On August 22, 2000, the petitioner supplemental questionnaire requested Department’s supplemental MOI alleged that critical circumstances exist that MSW address the criteria for questionnaire by providing generic with respect to imports of rebar from determining whether an MOI exists. statements and cross-references to prior Moldova. On November 27, 2000, the Specifically, this questionnaire submissions, which the Department had requested MSW to provide information separately found to be deficient. For Department preliminary determined regarding the level of governmental example, MSW responded with the that there is a reasonable basis to believe involvement in setting prices and same unsupported assertion from its or suspect that critical circumstances production quantities, and the section A response that the ‘‘TMR’’ does exist for imports of rebar from Moldova. relationship between MSW and its not exercise control over its use and See Preliminary Determinations of owners; to describe the ownership acquisition of capital. Therefore, Critical Circumstances: Steel Concrete structure of the rebar industry; and to applying the facts before us with respect Reinforcing Bars From Ukraine and demonstrate that market determined to the first two criteria listed above, and Moldova, 65 FR 70696 (November 27, prices are paid for all significant inputs based upon an examination of the 2000) (Critical Circumstances Notice). used in the production process. information submitted on the record by Non-Market Economy Status for Furthermore, the Department sought MSW, we find that there is insufficient Moldova clarifying information with regard to evidence to determine that: (1) There is MSW’s responses to section B and C of virtually no government involvement in In accordance with section 771(18)(C) the Department’s market economy setting prices or amounts to be of the Act, any determination that a questionnaire (including discussions on produced; and (2) the industry under foreign country has at one time been the proper comparison market), and review is characterized by private or considered a non-market economy requested that MSW respond to a collective ownership. With regard to the (NME) shall remain in effect until market economy section A third factor, the record evidence revoked. This status covers the questionnaire to address concerns demonstrates that market-determined geographic area of the former Union of regarding affiliation, ownership, and prices are not paid for all significant Soviet Socialist Republics (U.S.S.R.), distribution systems. On November 8, inputs, whether material or non- each part of which retains the NME 2000, MSW responded to the material. In fact, Exhibit 3 of MSW’s status of the former U.S.S.R. Therefore, Department’s questionnaire by October 13, 2000 Section D response, Moldova will be treated as an NME providing generic statements and cross- and page 33 of MSW’s November 3, unless and until its NME status is references to prior submissions, which 2000 supplemental response, revoked by the Department. See the Department had separately found to demonstrate that only a few minor Preliminary Determinations of Sales at be deficient. Nevertheless, the inputs were purchased from market Less Than Fair Value: Uranium From Department undertook an examination economy suppliers and paid for in Kazakhstan, Kyrgyzstan, Russia, of the information placed on the record. market economy currencies. Thus, the Tajikistan, Ukraine and Uzbekistan; The criteria for determining whether information on the record of this and Preliminary Determinations of Sales a MOI exists are: (1) Virtually no investigation does not support at Not Less Than Fair Value: Uranium government involvement in setting Moldova’s claim that its rebar industry From Armenia, Azerbaijan, Belarus, prices or amounts to be produced; (2) is a MOI. Therefore, we preliminarily Georgia, Moldova and Turkmenistan, 57 the industry producing the merchandise determine that the Moldovan rebar FR 23380 (June 3, 1992). under review should be characterized industry does not meet the criteria for The respondent in this investigation by private or collective ownership; and an affirmative MOI finding. has not requested a revocation of (3) market determined prices must be Moldova’s NME status. We have, paid for all significant inputs, whether Separate Rates therefore, preliminarily continued to material or non-material, and for all but It is the Department’s policy to assign treat Moldova as a NME country. an insignificant portion of all inputs all exporters of subject merchandise in When the Department is investigating accounting for the total value of the a NME country a single rate, unless an imports from a NME country, section merchandise. See Chrome-Plated Lug exporter can demonstrate that it is 773(c)(1) of the Act directs us to base Nuts from the People’s Republic of sufficiently independent so as to be normal value (NV) on the NME China; Final Results of Administrative entitled to a separate rate. MSW has producer’s factors of production, valued Review, 61 FR 58514, 58516 (November submitted separate rates information in in a comparable market economy that is 15, 1996) (Lug Nuts). In addition, in its section A responses, and has a significant producer of comparable order to make an affirmative requested a separate, company-specific merchandise. The sources of individual determination that an industry in a rate. MSW has stated that it is partially factor prices are discussed under the NME country is a MOI, the Department owned by the ‘‘State Property Normal Value section below. requires information on virtually the Committee of TMR,’’ 4 but claimed that this entity is neither associated with, Market Oriented Industry entire industry. See Freshwater Crawfish Tailmeat from the People’s nor endorsed by, the Government of the As indicated above, the single Republic of China, Final Determination Republic of Moldova. Despite the Moldovan producer, MSW, requested of Sales at Less than Fair Value, 62 FR Department’s requests for documents that the Department find the concrete 41347, 41353 (August 1, 1997) discussing the relationship between reinforcing bar industry in Moldova to (Crawfish). A MOI claim, and be a MOI. We note at the outset that supporting evidence, must cover 4 MSW made references in its responses to the MSW did not request MOI status until producers that collectively constitute ‘‘State Property Committee of TMR,’’ the ‘‘State Committee on Property of TMR,’’ and the ‘‘State October 13, 2000, well after our NME the industry in question; otherwise, the Committee of Property of TMR.’’ As these three questionnaires were issued, leaving the MOI claim is dismissed. See id. names are almost identical, we believe that these Department little time to conduct its We preliminarily find in this names all refer to the same entity. For the purposes analysis. Nevertheless, the Department investigation that the Moldovan rebar of this notice, we will use a single name, the ‘‘State Property Committee of TMR,’’ in place of the three issued a supplemental questionnaire industry does not meet the Department’s names that MSW used in its responses to refer to regarding information relevant to the criteria for an affirmative MOI finding. this entity.
VerDate 11
MSW and the Republic of Moldova, the absence of both (1) de jure and (2) by the Government of the Republic of MSW only provided copies of legislative de facto governmental control over Moldova nor ‘‘TMR,’’ its provisions are enactments and other supporting export activities. See Silicon Carbide not dispositive in the de jure analysis. documentation discussing the and Final Determination of Sales at Less Therefore, without any documentary relationship between MSW and the Than Fair Value: Furfuryl Alcohol from proof of the absence of de jure control, ‘‘TMR,’’ an entity not recognized by the the People’s Republic of China, 60 FR we preliminarily determine that MSW United States as a ‘‘country’’ within the 22545 (May 8, 1995). has failed to overcome the presumption meaning of section 773(c)(1)(A) of the of de jure control. 1. Absence of De Jure Control Act. See Case History section above for 2. Absence of De Facto Control a full discussion. We note that, although The Department considers the the United States does not recognize following de jure criteria in determining Having failed to overcome the ‘‘TMR’’ as a country, even if the whether an individual company may be presumption of de jure control, the Department were to entertain, arguendo, granted a separate rate: (1) An absence Department need not address MSW’s MSW’s analysis of its relationship to of restrictive stipulations associated claim that it is not de facto controlled ‘‘TMR’’ under section 773(c) of the Act, with an individual exporter’s business by either the Republic of Moldova or the the information provided does not and export licenses; (2) any legislative ‘‘TMR.’’ However, we note that the support MSW’s claim. An examination enactments decentralizing control of information supplied would also be of the submitted documents alleged to companies; and (3) any other formal insufficient to establish an absence of de establish the independence of MSW measures by the government facto control as discussed below. from the ‘‘TMR’’ reveals that MSW has decentralizing control of companies. The Department typically considers failed to provide sufficient During the course of this four factors in evaluating whether each documentation to support its claim for investigation, MSW has failed to respondent is subject to de facto a separate rate. Consequently, as provide any legislation or other governmental control of its export discussed in detail below, we documentation issued by the Republic functions: (1) Whether the export prices preliminarily determine, based on the of Moldova regarding the absence of de are set by or subject to the approval of facts on the record, that MSW has failed jure control. For purposes of this a governmental authority; (2) whether to meet the separate rates test both in investigation, we preliminarily the respondent has authority to relation to the Government of Moldova, determine that MSW has not provided negotiate and sign contracts and other as well as the ‘‘TMR.’’ sufficient documentary proof of the agreements; (3) whether the respondent The Department’s separate rates test is absence of de jure control by the has autonomy from the government in not concerned, in general, with Republic of Moldova. As a consequence, making decisions regarding the macroeconomic/border-type controls we find that MSW fails to overcome the selection of management; and (4) (e.g., export licenses, quotas, and presumption of de jure control. whether the respondent retains the minimum export prices), particularly if Although the Republic of Moldova is proceeds of its export sales and makes these controls are imposed to prevent the only country recognized by the independent decisions regarding dumping. Rather, the test focuses on United States for the purposes of this disposition of profits or financing of controls over export-related investment, investigation, for the sake of argument losses. pricing, and output decision-making we have addressed MSW’s claims with In its responses, MSW failed to process at the individual firm level. See respect to ‘‘TMR.’’ Given the fact that discuss the extent, if any, to which the Notice of Final Determination of Sales MSW only provided documentation Republic of Moldova exercised de facto at Less than Fair Value: Certain Cut-to- regarding its relationship with the control over its export functions. As Length Carbon Steel Plate from Ukraine, ‘‘State Property Committee of TMR,’’ the such, the Department was prevented 62 FR 61754, 61757 (November 19, Department examined this information from conducting a thorough analysis of 1997); Tapered Roller Bearings and to determine the extent to which there the four afore-mentioned factors Parts Thereof, Finished and Unfinished, is any governmental control, regional or regarding the absence of de facto control from the People’s Republic of China: otherwise, over the operations of MSW. by the Government of Moldova. In view Final Results of Antidumping Duty MSW asserts in its questionnaire of MSW’s failure to provide Administrative Review, 62 FR 61276, response that under its Charter, it documentation regarding its 61279 (November 17, 1997); and Notice operates as an independent economic relationship with the Government of the of Preliminary Determination of Sales at unit with those rights accorded to a Republic of Moldova, MSW fails to Less than Fair Value: Honey from the legal entity, including the ownership of overcome the presumption of de facto People’s Republic of China, 60 FR property. MSW claims that it bears governmental control. 14725, 14728 (March 20, 1995). independent responsibility for its sales MSW did provide certain information To establish whether a firm is and that the ‘‘State Property Committee in relation to the de facto control by the sufficiently independent to be entitled of TMR,’’ does not control the ‘‘TMR,’’ which, as discussed above, we to a separate rate, the Department company’s export activities. MSW also are addressing solely for the sake of analyzes each exporting entity under the claims that there are no licensing argument. MSW reported that it has test established in the Final requirements, quotas, or any other authority to negotiate and sign contracts Determination of Sales at Less Than restrictions or controls by the ‘‘TMR’’ on without express ‘‘TMR’’ approval, and Fair Value: Sparklers from the People’s exports of subject merchandise to the claimed that no organization outside Republic of China, 56 FR 20585–87 United States or any other destination. MSW reviews or approves any aspect of (May 6, 1991), and amplified in Final Despite having made such claims, and MSW’s export sales transactions. In Determination of Sales at Less-Than- despite several requests by the addition, although MSW failed to Fair-Value: Silicon Carbide from the Department, MSW failed to submit discuss the Republic of Moldova’s People’s Republic of China, 59 FR 22588 adequate translations and original control over MSW’s export functions, (May 2, 1994) (Silicon Carbide). Under language copies of the legislation of the the submitted sales documentation this test, the Department assigns ‘‘TMR.’’ MSW provided the Department showed no involvement by either the separate rates in NME cases only if an with a copy of its Charter, but since this Government of Moldova or ‘‘TMR’’ in exporter can affirmatively demonstrate document is neither a formal measure setting export prices.
VerDate 11
In regards to management selection, The Moldova-Wide Rate Normal Value MSW stated that the shareholders of A. Surrogate Country MSW elect the Board of Directors which As in all NME cases, the Department in turn elects the Governing Board (i.e., implements a policy whereby there is a Section 773(c)(4) of the Act requires the company management). The rebuttable presumption that all the Department to value the NME documentation on the record did not exporters or producers comprise a single producer’s factors of production, to the reference the Government of Moldova, exporter under common government extent possible, in one or more market but indicated that the ‘‘State Property control, the ‘‘NME entity.’’ The economy countries that: (1) Are at a Committee of TMR’’ is a shareholder Department assigns a single NME rate to level of economic development that exercises veto power over several the NME entity, unless an exporter can comparable to that of the NME country; aspects of the operational control of demonstrate eligibility for a separate and (2) are significant producers of MSW. This includes the power to veto rate. Information on the record of this comparable merchandise. The any ventures, associations, and investigation indicates that MSW was Department initially determined that agreements entered into by MSW for the only Moldovan producer and India, Pakistan, Indonesia, and Sri export sales. exporter to sell the subject merchandise Lanka were the countries most In regards to export revenue and to the United States during the POI. comparable to Moldova in terms of profits, MSW reported that it has no Since the only Moldovan producer and overall economic development. See the internal restrictions on the use of its exporter of the subject merchandise memorandum regarding Antidumping export revenue, but stated that by responded to the Department’s Duty Investigation of Steel Concrete special decrees of the ‘‘TMR,’’ it is questionnaire, and we have no reason to Reinforcing Bars (Rebar) from Moldova: required to sell a certain percentage of believe that there are other non- Nonmarket Economy Status and its export revenue. responding exporters/producers of the Surrogate Country Selection, dated In addition, MSW further claimed that subject merchandise during the POI, we August 31, 2000. the management of MSW is solely calculated a Moldova-wide rate based Furthermore, the Department responsible for the disposition of the on the weighted-average margin determined, based on information profits. However, MSW’s Charter determined for MSW. derived from publicly available sources, indicates that the ‘‘State Property that India is a significant producer of Committee of TMR’’ influences the Fair Value Comparisons products comparable to the subject allocation of MSW’s profit. merchandise. Therefore, we have relied, While the record evidence indicates To determine whether sales of rebar where possible, on information from that MSW sets its own export prices and from Moldova were made in the United India, and calculated NV by applying has the authority to negotiate and sign States at less than fair value, we Indian values to virtually all of MSW’s contracts, it appears that, assuming the compared export price (EP) to a normal factors of production. Where no Indian validity of the regional entity ‘‘TMR,’’ value (NV) calculated using our NME values were available, we used MSW does not have autonomy from the methodology, as described below. In information from Indonesia, the second- ‘‘State Property Committee of TMR’’ in accordance with section most complete source of information selecting its management, since the 777A(d)(1)(A)(i) of the Act, we from among the potential surrogate regional ‘‘State Property Committee of calculated weighted-average EPs. countries. See Surrogate Value TMR’’ assists in appointing MSW’s Export Price Memorandum, dated January 16, 2001. Directors, who in turn select the B. Factors of Production management. In addition, MSW does We used EP methodology in not have complete operational control accordance with section 772(a) of the In accordance with section 773(c) of over either the proceeds of its export Act because the merchandise was sold, the Act, we calculated NV based on sales or its profits. prior to importation, by MSW to an factors of production (e.g. steel scrap, Furthermore, other record evidence, unaffiliated purchaser for exportation to ferroalloys, labor, energy, and packing including MSW’s Charter, indicates that the United States, and constructed materials) reported by MSW for the POI. in general, MSW is under the export price (CEP) methodology was not To calculate NV, we multiplied the jurisdiction of the ‘‘State Property otherwise warranted based on the facts reported per-unit factor quantities by Committee of TMR.’’ In view of MSW’s on the record. At the time of sale, MSW publicly available surrogate values from failure to provide documentation knew that its reported sales of the India, and where necessary, from Indonesia. regarding its relationship with the subject merchandise were destined for Government of the Republic of In selecting the surrogate values, we the United States. Moldova, MSW fails to overcome the considered the quality, specificity, and presumption of de facto governmental We calculated EP based on the freight- contemporaneity of the data. As control. Moreover, even if ‘‘TMR’’ were on-board (FOB) prices charged to the appropriate, we include freight costs in a recognized government, MSW’s first unaffiliated customer for input prices to make them delivered numerous ties to the ‘‘State Property exportation to the United States. Where prices. Specifically, we added to the Committee of TMR’’ would justify a appropriate, we made deductions from surrogate values of inputs a surrogate finding of de facto government control. the starting price (gross unit price) for freight cost using the shorter of the The failure to demonstrate either the inland freight from the factory to the reported distance from the domestic absence of de jure or de facto control port of export and domestic brokerage supplier to the factory or the distance makes an exporter ineligible for a and handling expenses. Because inland from the port of export to the factory. separate rate. In this case, we have freight and brokerage and handling This adjustment is in accordance with preliminary determined that MSW has services were provided by NME the Court of Appeals for the Federal failed to demonstrate the absence of companies, we based freight and Circuit’s decision in Sigma Corp. v. both de jure and de facto control. brokerage charges on surrogate freight United States, 117 F. 3d 1401, 1408–11 Therefore, the Department preliminarily and brokerage rates from India. See (Fed. Cir. 1997). Where MSW did not determines that MSW is not eligible to Normal Value section for further report the distance between the material receive a separate rate. discussion. supplier and the factory, we used, as
VerDate 11
facts available, the longest distance Final Critical Circumstances Public Comment reported, i.e., the distance between the Determination port of export and the factory. For those Case briefs for this investigation must values not contemporaneous with the We will make a final determination be submitted no later than seven days POI, we adjusted the values to account concerning critical circumstances for after the issuance of the verification for inflation using wholesale price Moldova when we make our final report. Rebuttal briefs must be filed indices published in the International determination regarding sales at LTFV within five days after the deadline for Monetary Fund’s International Financial in this investigation, which will be no submission of case briefs. A list of Statistics. later than 75 days after the date of authorities used, a table of contents, and publication of the preliminary LTFV an executive summary of issues should We valued material inputs and determination. packing materials (i.e., metal scrap, accompany any briefs submitted to the ferromanganese, silicomanganese, Suspension of Liquidation Department. Executive summaries ferrosilicon, lime, limestone, coke, should be limited to five pages total, Because of our preliminary aluminum powder, aluminum, including footnotes. Further, it would affirmative critical circumstances electrodes, wire rod, paint, etc.) using be appreciated if parties submitting finding, we are directing the Customs values from the appropriate Harmonized written comments would provide the Service to suspend liquidation of all Tariff Schedule (HTS) number, from Department with an additional copy of entries of rebar from Moldova entered, imports statistics reported in the the public version of any such or withdrawn from warehouse, for Monthly Statistics on Foreign Trade for comments on diskette. consumption on or after the date which India for the partial year 1998, or in the is 90 days prior to the date on which Section 774 of the Act provides that TradeStat Web data for the period this notice is published in the Federal the Department will hold a hearing to October 1999 to March 2000. For a Register. See Critical Circumstances afford interested parties an opportunity complete analysis of surrogate values, Notice, dated November 27, 2000. We to comment on arguments raised in case see Surrogate Value Memorandum. are instructing the Customs Service to or rebuttal briefs, provided that such a We valued labor using the method require a cash deposit or the posting of hearing is requested by any interested described in 19 CFR 351.408(c)(3). a bond equal to the weighted-average party. If a request for a hearing is made To value electricity, we used the 1997 amount by which the NV exceeds the in an investigation, the hearing will electricity rates, as adjusted, for India EP, as indicated in the chart below. tentatively be held two days after the reported in the publication Energy These instructions suspending deadline for submission of the rebuttal Prices and Taxes, fourth quarter 1999. liquidation will remain in effect until briefs, at the U.S. Department of We based the value of natural gas on the further notice. Commerce, 14th Street and Constitution value calculated in the final The weighted-average dumping Avenue, NW, Washington, DC 20230. In determination of Polyvinyl Alcohol margins are provided below: the event that the Department receives from the People’s Republic of China. requests for hearings from parties to Finally we valued oxygen, nitrogen, and Margin more than one rebar case, the Manufacturer/exporter (percent) argon on the import statistics reported Department may schedule a single in the Monthly Statistics of Foreign Moldova-Wide Rate ...... 277.62 hearing to encompass all the cases. Trade for India for the partial year 1998. Parties should confirm by telephone the We based our calculation of factory The Moldova-wide rate applies to all time, date, and place of the hearing 48 overhead and selling, general and entries of the subject merchandise from hours before the scheduled time. administrative (SG&A) expenses, and Moldova. Interested parties who wish to request profit on the 1999–2000 financial a hearing, or to participate if one is statement of TATA Steel Company, an Disclosure Indian producer of products comparable requested, must submit a written to the subject merchandise. The Department will disclose request within 30 days of the calculations performed within five days publication of this notice. Requests To value railway freight rates, we of the date of publication of this notice should specify the number of used a 1998 rate provided by the Indian to the parties to the proceeding in this participants and provide a list of the Railway Conference Association. For investigation in accordance with 19 CFR issues to be discussed. Oral truck transportation, we valued truck 351.224(b). presentations will be limited to issues rates using information from a prior investigation, as adjusted for inflation. International Trade Commission raised in the briefs. See Surrogate Value Memorandum. Notification If this investigation proceeds normally, we will make our final For each of the material inputs, In accordance with section 733(f) of energy, and transportation surrogate determination no later than 75 days the Act, we have notified the ITC of our after the date of the preliminary values selected for use in the affirmative sales at LTFV and critical determination. Department’s calculation, we inflated circumstances preliminary the values using appropriate inflators determinations. If our final antidumping This determination is issued and when these values were not from a determination is affirmative, the ITC published pursuant to sections 733(f) period concurrent with the POI. See will determine whether these imports and 777(i)(1) of the Act. Surrogate Value Memorandum. are materially injuring, or threaten Dated: January 16, 2001. material injury, to the U.S. industry. Verification Troy H. Cribb, The deadline for that ITC determination In accordance with section 782(i) of would be the later of 120 days after the Assistant Secretary for Import Administration. the Act, we intend to verify all date of this preliminary determination information relied upon in making our or 45 days after the date of our final [FR Doc. 01–2520 Filed 1–29–01; 8:45 am] final determination. determination. BILLING CODE 3510–DS–P
VerDate 11
DEPARTMENT OF COMMERCE of this investigation, the following addition, on August 18, 2000, we sent events have occurred. the questionnaire to the Chinese International Trade Administration In the petition, filed on June 28, 2000, exporter/producer Laiwu Steel Group, the petitioner alleged that there is a Ltd. (Laiwu), which had contacted us [A–570–860] reasonable basis to believe or suspect through counsel, with instructions to that critical circumstances exist with complete and return the questionnaire Notice of Preliminary Determination of respect to imports of rebar from the by the given deadline. We received a Sales at Less Than Fair Value and PRC. On August 30, 2000, the response only from Laiwu. Postponement of Final Determination: Department preliminarily determined Subsequently, we issued supplemental Steel Concrete Reinforcing Bars From that critical circumstances exist with questionnaires to, and received the People’s Republic of China respect to exports of rebar from the PRC. responses from Laiwu. AGENCY: Import Administration, See Memorandum to Holly A. Kuga Re: On September 13, 2000, we invited International Trade Administration, Preliminary Affirmative Determinations interested parties to provide comments Department of Commerce. of Critical Circumstances (August 30, on the surrogate country selection and publicly available information for EFFECTIVE DATE: January 30, 2001. 2000); see also Preliminary Determinations of Critical valuing the factors of production. We FOR FURTHER INFORMATION CONTACT: Circumstances: Steel Concrete received comments from the petitioner Magd Zalok or Charles Riggle at (202) Reinforcing Bars From the People’s between October 16 and November 13, 482–4162 or (202) 482–0650, Republic of China and Poland, 65 FR 2000, and from Laiwu on October 23, respectively; AD/CVD Enforcement, 54228 (September 7, 2000). 2000. Office 5, Group II, Import On November 9, 2000, the petitioner Administration, Room 1870, On August 14, 2000, the United States International Trade Commission (ITC) requested a postponement of the International Trade Administration, preliminary determination in this U.S. Department of Commerce, 14th preliminarily determined that there is a reasonable indication that a regional investigation. On November 21, 2000, Street and Constitution Avenue, NW, the Department published a Federal Washington, DC 20230. industry in the United States is materially injured or threatened with Register notice postponing the deadline The Applicable Statute and Regulations material injury by reason of imports for the preliminary determination until from Belarus, China, Indonesia, Korea, January 16, 2001. See Notice of Unless otherwise indicated, all Postponement of Preliminary citations to the statute are references to Latvia, Moldova, Poland, and Ukraine of certain steel concrete reinforcing bars. Antidumping Duty Determinations: the provisions effective January 1, 1995, Steel Concrete Reinforcing Bars from the effective date of the amendments See Certain Steel Concrete Reinforcing Bars From Austria, Belarus, China, Belarus, Indonesia, Latvia, Moldova, the made to the Tariff Act of 1930 (the Act) People’s Republic of China, Poland, the by the Uruguay Round Agreements Act Indonesia, Japan, Korea, Latvia, Moldova, Poland, Russia, Ukraine, and Republic of Korea and Ukraine, 65 FR (URAA). In addition, unless otherwise 69909 (November 21, 2000). indicated, all citations to Department of Venezuela, 65 FR 51329 (August 23, Commerce (the Department) regulations 2000). With respect to subject imports Postponement of Final Determination refer to the regulations codified at 19 from Austria, Russia, and Venezuela, Pursuant to section 735(a)(2) of the CFR part 351 (April 2000). the ITC determined that imports from Act, on December 28, 2000, Laiwu these countries during the period of Preliminary Determination requested that, in the event of an investigation (POI) were negligible and, affirmative preliminary determination We preliminarily determine that steel therefore, these investigations were in this investigation, the Department concrete reinforcing bar (rebar) from the terminated. The ITC also determined postpone its final determination. In its People’s Republic of China (PRC) is that there is no reasonable indication request, Laiwu also requested that the being sold in the United States at less that an industry in the United States is Department extend by 60 days the than fair value (LTFV), as provided in materially injured or threatened with application of the provisional measures section 733 of the Act. The estimated material injury, by reason of subject prescribed under paragraphs (1) and (2) margins of sales at LTFV are shown in imports from Japan. Id. of section 773(d) of the Act. In the Suspension of Liquidation section of On August 18, 2000, we issued the accordance with 19 CFR 351.210(b), this notice. antidumping questionnaire to the because (1) our preliminary Chinese Ministry of Foreign Trade & Case History determination is affirmative, (2) the Economic Cooperation (MOFTEC) with requesting exporters account for a This investigation was initiated on a letter requesting that it forward the significant proportion of exports of the 1 July 18, 2000. See Initiation of questionnaire to all exporters of rebar subject merchandise, and (3) no 2 Antidumping Duty Investigations: Steel who had shipments during the POI. In compelling reasons for denial exist, we Concrete Reinforcing Bars from Austria, are granting the respondent’s request 2 Belarus, Indonesia, Japan, Latvia, Section A of the questionnaire requests general and are postponing the final Moldova, the People’s Republic of information concerning a company’s corporate structure and business practices, the merchandise determination until no later than 135 China, Poland, the Republic of Korea, under investigation that it sells, and the manner in days after the publication of this notice the Russian Federation, Ukraine, and which it sells that merchandise in all of its markets. in the Federal Register. Suspension of Venezuela, 65 FR 45754 (July 25, 2000) Section B requests a complete listing of all home liquidation will be extended (Initiation Notice). Since the initiation market sales, or, if the home market is not viable, of sales in the most appropriate third-country accordingly. market (This section is not applicable to 1 The petitioner in these investigations is the respondents in non-market economy (NME) cases). Period of Investigation Rebar Trade Action Coalition (RTAC), and its Section C requests a complete listing of U.S. sales. The POI is October 1, 1999, through individual members, AmeriSteel, Auburn Steel Co., Section D requests information on the cost of Inc., Birmingham Steel Corp., Border Steel, Inc., production (COP) of the foreign like product and March 31, 2000. This period Marion Steel Company, Riverview Steel, and Nucor the constructed value (CV) of the merchandise Steel and CMC Steel Group. (Auburn Steel was not under investigation. In NME cases, Section D Section E requests information on further a petitioner in the Indonesia case). requests information on factors of production. manufacturing.
VerDate 11
corresponds to the two most recent controlled by the general assembly of measures by the government fiscal quarters prior to the month of the workers and employees. Laiwu further decentralizing control of companies. filing of the petition (i.e., June 2000). claims that it does not maintain any Laiwu has placed on the record a corporate relationship with the central, number of documents to demonstrate Scope of Investigation provincial, and local government in absence of de jure control, including the For purposes of these investigations, terms of production, management, and ‘‘Foreign Trade Law of the People’s the product covered is all rebar sold in operations. As stated in the Final Republic of China,’’ promulgated on straight lengths, currently classifiable in Determination of Sales at Less-Than- May 12, 1994, the ‘‘Law of the People’s the Harmonized Tariff Schedule of the Fair-Value: Silicon Carbide from the Republic of China on Industrial United States (HTSUS) under item People’s Republic of China, 59 FR 22585 Enterprises Owned By the Whole number 7214.20.00 or any other tariff (May 2, 1994) (Silicon Carbide), and People,’’ adopted on April 13, 1988, and item number. Specifically excluded are Final Determination of Sales at Less the ‘‘Regulations for Transformation of plain rounds (i.e., non-deformed or Than Fair Value: Furfuryl Alcohol, 60 Operational Mechanism of State-Owned smooth bars) and rebar that has been FR 22545 (May 8, 1995) (Furfuryl Enterprises,’’ effective as of July 23, further processed through bending or Alcohol), ownership of a company by 1992. In prior cases, the Department has coating. HTSUS subheadings are ‘‘all the people’’ does not require the analyzed these laws and found that they provided for convenience and Customs application of a single rate. The establish an absence of de jure control. purposes. The written description of the Department’s separate rate test is not See, e.g., Notice of Final Determination scope of this proceeding is dispositive. concerned, in general, with of Sales at Less Than Fair Value: Non-market Economy Status for the macroeconomic/border-type controls Certain Partial-Extension Steel Drawer People’s Republic of China (e.g., export licenses, quotas, and Slides with Rollers from the People’s minimum export prices), particularly if Republic of China, 60 FR 54472 The Department has treated the PRC these controls are imposed to prevent (October 24, 1995). We have no new as a non-market economy (NME) dumping. Rather, the test focuses on information in this proceeding which country in all past antidumping controls over the export-related would cause us to reconsider this investigations (see, e.g., Notice of Final investment, pricing, and output determination. Determination of Sales at Less Than decision-making process at the As stated in previous cases, there is Fair Value: Bulk Aspirin From the individual firm level. See Certain Cut- some evidence that the provisions of the People’s Republic of China, 65 FR 33805 to-Length Carbon Steel Plate from above-cited 1988 Law and 1992 (May 25, 2000), and Notice of Final Ukraine: Final Determination of Sales at Regulations regarding enterprise Determination of Sales at Less Than Less than Fair Value, 62 FR 61754, autonomy have not been implemented Fair Value: Certain Non-Frozen Apple 61757 (November 19, 1997); Tapered uniformly among different sectors and/ Juice Concentrate from the People’s Roller Bearings and Parts Thereof, or jurisdictions in the PRC, (see ‘‘PRC Republic of China, 65 FR 19873 (April Finished and Unfinished, from the Government Findings on Enterprise 13, 2000). A designation as a NME People’s Republic of China: Final Autonomy,’’ in Foreign Broadcast remains in effect until it is revoked by Results of Antidumping Duty Information Service-China-93–133 (July the Department (see section 771(18)(C) Administrative Review, 62 FR 61276, 14, 1993)). Therefore, the Department of the Act). The respondent in this 61279 (November 17, 1997); and Honey has determined that an analysis of de investigation has not requested a from the People’s Republic of China: facto control is critical in determining revocation of the PRC’s NME status. We Preliminary Determination of Sales at whether respondents are, in fact, subject have, therefore, preliminarily Less Than Fair Value, 60 FR 14725, to a degree of governmental control determined to continue to treat the PRC 14726 (March 20, 1995). which would preclude the Department as a NME. When the Department is To establish whether a firm is from assigning separate rates. investigating imports from a NME, sufficiently independent to be entitled 2. Absence of De Facto Control section 773(c)(1) of the Act directs us to to a separate rate, the Department base the normal value (NV) on the NME analyzes each exporting entity under the The Department typically considers producer’s factors of production, valued test established in the Final four factors in evaluating whether each in a comparable market economy that is Determination of Sales at Less Than respondent is subject to de facto a significant producer of comparable Fair Value: Sparklers from the People’s governmental control of its export merchandise. The sources of individual Republic of China, 56 FR 20588 (May 6, functions: (1) Whether the export prices factor prices are discussed under the 1991), and amplified in Silicon Carbide. are set by or are subject to the approval Normal Value section, below. Under this test, the Department assigns of a governmental agency; (2) whether separate rates in NME cases only if an the respondent has authority to Separate Rates exporter can affirmatively demonstrate negotiate and sign contracts and other It is the Department’s policy to assign the absence of both (1) de jure and (2) agreements; (3) whether the respondent all exporters of merchandise subject to de facto governmental control over has autonomy from the government in investigation in a NME country a single export activities. See Silicon Carbide making decisions regarding the rate, unless an exporter can demonstrate and Furfuryl Alcohol. selection of management; and (4) that it is sufficiently independent so as whether the respondent retains the to be entitled to a separate rate. Laiwu, 1. Absence of De Jure Control proceeds of its export sales and makes the only responding company that has The Department considers the independent decisions regarding submitted a questionnaire response, has following de jure criteria in determining disposition of profits or financing of provided the requested company- whether an individual company may be losses. specific separate rates information and granted a separate rate: (1) An absence Laiwu asserted the following: (1) It has stated that there is no element of of restrictive stipulations associated establishes its own export prices government ownership or control. In its with an individual exporter’s business independently of the government and questionnaire response, Laiwu states and export licenses; (2) any legislative without the approval of a government that it is an independent company enactments decentralizing control of authority; (2) it negotiates contracts, ‘‘owned by all the people’’ and companies; and (3) any other formal without guidance from any
VerDate 11
governmental entities or organizations; import statistics and customs data, and for inland freight, insurance, brokerage (3) it makes its own personnel decisions information obtained from interested and handling, and ocean freight were including the selection of management; parties during the particular provided by NME companies, we based and (4) it retains the proceeds of its investigation (see SAA at 870). those charges on surrogate rates from export sales, and utilizes profits In order to determine the probative India. (See Memorandum from the according to its business needs. value of the margins in the petitions for Team to the File, dated January 16, 2001 Based on the information provided, use as adverse facts available for (Surrogate Value Memorandum).) we preliminarily determine that Laiwu purposes of this determination, we has met the criteria for the application examined evidence supporting the Normal Value of separate rates. We will examine this calculations in the petitions. In 1. Surrogate Country matter further at verification. accordance with section 776(c) of the Section 773(c)(4) of the Act requires Since Laiwu is the only responding Act, to the extent practicable, we producer/exporter, we preliminarily examined the key elements of the (EP) the Department to value the NME determine, as facts available, that all and normal value (NV) calculations on producer’s factors of production, to the other non-responsive producers/ which the margins in the petitions were extent possible, in one or more market exporters have not met the criteria for based. Our review of the EP and NV economy countries that: (1) Are at a application of separate rates. calculations indicated that the level of economic development comparable to that of the NME country; The People’s Republic of China-Wide information in the petitions has probative value, as certain information and (2) are significant producers of Rate and Use of Facts Otherwise comparable merchandise. The Available included in the margin calculations in the petitions is from public sources Department initially determined that All exporters were given the concurrent, for the most part, with the India, Pakistan, Indonesia, Sri Lanka, opportunity to respond to the POI. For purposes of the preliminary and Philippines were the countries most Department’s questionnaire. As determination, we attempted to further comparable to the PRC in terms of explained above, we received a timely corroborate the information in the overall economic development (see the response from only Laiwu, for which we petition. We re-examined the EP and NV August 31, 2000, memorandum, have calculated a company-specific rate. data which formed the basis for the Antidumping Duty Investigation of Steel Our review of U.S. import statistics from highest margin in the petition in light of Concrete Reinforcing Bars (Rebar) from the PRC, however, reveals that Laiwu information obtained during the the People’s Republic of China (PRC): did not account for all imports into the investigation and, to the extent Nonmarket Economy Status and United States from the PRC. For this practicable, found that it has probative Surrogate Country Selection). reason, we preliminarily determine that value (see the January 16, 2001, Because of a lack of the necessary some PRC exporters of steel concrete memoranda to the file regarding factor price information from the other reinforcing bars failed to respond to our Corroboration of the Petition Data for potential surrogate countries that are questionnaire. In accordance with our the People’s Republic of China on file in significant producers of comparable standard practice, as adverse facts the Central Records Unit, Room B–099, products to the subject merchandise, we available, we are assigning as the PRC- of the Main Commerce Department have relied, where possible, on wide rate the higher of: (1) The highest building). information from India, the source of margin stated in the notice of initiation; the most complete information from or (2) the margin calculated for Laiwu Fair Value Comparisons among the potential surrogate countries. (see, e.g., Final Determination of Sales To determine whether sales of rebar Accordingly, we have calculated NV by at Less Than Fair Value: Certain Cold- from the PRC were made in the United applying Indian values to Laiwu’s Rolled Flat-Rolled Carbon Quality Steel States at less than fair value, we factors of production for virtually all Products From The People’s Republic of compared export price (EP) to NV based factors. See Surrogate Value China 64 FR 34660 (May 31, 2000). In on a NME analysis, as described below. Memorandum. this case, the preliminary adverse facts In accordance with section 2. Factors of Production available margin is 59.98 percent, which 777A(d)(1)(A)(i) of the Act, we is the highest margin stated in the notice calculated weighted-average EPs. In accordance with section 773(c) of of initiation. the Act, we calculated NV based on Section 776(b) of the Act states that an Export Price factors of production reported by Laiwu adverse inference may include reliance We used EP methodology in for the POI. To calculate NV, the on information derived from the accordance with section 772(a) of the reported per-unit factor quantities were petition. See also SAA at 829–831. Act, because Laiwu sold the subject multiplied by publicly available Indian Section 776(c) of the Act provides that, merchandise directly to unaffiliated surrogate values. when the Department relies on customers in the United States prior to In selecting the surrogate values, we secondary information (such as the importation, and constructed export considered the quality, specificity, and petition) in using the facts otherwise price (CEP) methodology was not contemporaneity of the data. As available, it must, to the extent otherwise appropriate. We calculated EP appropriate, we adjusted input prices by practicable, corroborate that information based on packed free-on-board (FOB) or, including freight costs to make them from independent sources that are where appropriate, cost and freight delivered prices. We added to Indian reasonably at its disposal. (C&F) prices to the first unaffiliated surrogate values a surrogate freight cost The SAA clarifies that ‘‘corroborate’’ purchaser in the United States. Where using the shorter of the reported means that the Department will satisfy appropriate, we made deductions from distance from the domestic supplier to itself that the secondary information to the starting price (gross unit price) for the factory or the distance from the be used has probative value (see SAA at inland freight from the plant/warehouse nearest seaport to the factory. This 870). The SAA also states that to the port of embarkation, insurance, adjustment is in accordance with the independent sources used to corroborate brokerage and handling in China, ocean Court of Appeals for the Federal such evidence may include, for freight and marine insurance. Because Circuit’s decision in Sigma Corp. v. example, published price lists, official certain domestic charges such as those United States, 117 F. 3d 1401 (Fed. Cir.
VerDate 11
1997). Where a producer did not report information relied upon in making our Public Comment the distance between the material final determination. supplier and the factory, we used as Case briefs for this investigation must Final Critical Circumstances facts available the longest distance be submitted no later than one week Determination reported, i.e., the distance between the after the issuance of the verification PRC seaport and the producer’s We will make a final determination reports. Rebuttal briefs must be filed location. For those values not concerning critical circumstances for within five days after the deadline for contemporaneous with the POI, we the PRC when we make our final submission of case briefs. A list of adjusted for inflation using wholesale determination regarding sales at LTFV authorities used, a table of contents, and price indices published in the in this investigation, which will be no an executive summary of issues should International Monetary Fund’s later than 135 days after the publication accompany any briefs submitted to the International Financial Statistics. of this notice in the Federal Register. Department. Executive summaries We valued material inputs and Suspension of Liquidation should be limited to five pages total, packing materials (e.g., where including footnotes. Further, we would appropriate, coal, iron ore, limestone, Because of our preliminary appreciate it if parties submitting white ash, permanganese, aluminum affirmative critical circumstances written comments would provide the manganese, ferro-silicon, silico-calcium, findings, we are directing the Customs Department with an additional copy of aluminum, steel strip, and wire rod) by Service to suspend liquidation of all the public version of any such Harmonized Tariff Schedule (HTS) unliquidated entries of rebar from the comments on diskette. number, using primarily imports PRC entered, or withdrawn from statistics from the Monthly Statistics of warehouse, for consumption on or after Section 774 of the Act provides that the Foreign Trade of India and the the date which is 90 days prior to the the Department will hold a hearing to United Nations Commodity Trade date on which this notice is published afford interested parties an opportunity Statistics. Where a material input was in the Federal Register. We are to comment on arguments raised in case purchased in a market-economy instructing the Customs Service to or rebuttal briefs, provided that such a currency from a market-economy require a cash deposit or the posting of hearing is requested by any interested supplier, we valued such a material a bond equal to the weighted-average party. If a request for a hearing is made input at the actual purchase price in amount by which the NV exceeds the in an investigation, the hearing will accordance with section 351.408 (c)(1) EP, as indicated in the chart below. tentatively be held two days after the of the Department’s regulations. These instructions suspending deadline for submission of the rebuttal We valued labor using the method liquidation will remain in effect until briefs, at the U.S. Department of described in 19 CFR 351.408(c)(3). further notice. Commerce, 14th Street and Constitution To value electricity, we used the 1997 The weighted-average dumping Avenue, NW, Washington, DC 20230. In electricity rates, as adjusted for margins are provided below: the event that the Department receives inflation, for India as reported in the requests for hearings from parties to publication Energy Prices and Taxes, Manufacturer/exporter Margin 4th quarter 1999. (percent) more than one rebar case, the We based our calculation of factory Department may schedule a single overhead, selling, general and Laiwu Steel Group, Ltd ...... 20.89 hearing to encompass all the cases. administrative (SG&A) expenses, and PRC-Wide Rate ...... 59.98 Parties should confirm by telephone the profit on the 1999/2000 financial time, date, and place of the hearing 48 statements of The TATA Iron and Steel The China-wide rate applies to all hours before the scheduled time. entries of the subject merchandise Company Limited, an Indian producer Interested parties who wish to request of products comparable to the subject except for entries from the exporter/ factory that is identified above. a hearing, or to participate if one is merchandise. requested, must submit a written To value truck freight rates, we used Disclosure request within 30 days of the freight costs based on price quotes The Department will disclose publication of this notice. Requests obtained by the Department in should specify the number of November 1999 from trucking calculations performed within five days participants and provide a list of the companies in India. For rail of this determination to the parties of issues to be discussed. Oral transportation, we valued rail rates the proceedings in this investigation in using information published by the accordance with 19 CFR 351.224(b). presentations will be limited to issues raised in the briefs. Indian Railway Conference Association International Trade Commission in June 1998, as adjusted for inflation. Notification As noted above, the final For brokerage and handling, we used determination for the PRC will be issued the recent publicly available source In accordance with section 733(f) of no later than 135 days after the date of which is the public version of a U.S. the Act, we have notified the ITC of our the publication of the preliminary sales at LTFV and our affirmative sales listing reported in the determination. questionnaire response submitted by critical circumstances preliminary This determination is issued and Viraj Impoexpo in the New Shipper determinations. If our final antidumping published pursuant to sections 733(f) Review of Stainless Steel Wire Rod from determination is affirmative, the ITC India, 63 FR 48184 (September 9, 1998). will determine whether these imports and 777(i)(1) of the Act. For a complete analysis of surrogate are materially injuring, or threaten Dated: January 16, 2001. material injury to, the U.S. industry. values, see Surrogate Value Troy H. Cribb, Memorandum. The deadline for that ITC determination would be the later of 120 days after the Assistant Secretary for Import Verification date of this preliminary determination Administration. In accordance with section 782(i) of or 45 days after the date of our final [FR Doc. 01–2521 Filed 1–29–01; 8:45 am] the Act, we intend to verify all determination. BILLING CODE 3510–DS–P
VerDate 11
DEPARTMENT OF COMMERCE of the investigations, the following additional Indonesian steel companies events have occurred. in order to gather adequate quantity and International Trade Administration On August 14, 2000, the United States value information to make a respondent International Trade Commission (ITC) selection determination in that [A–455–803; A–560–811; A–823–809] preliminarily determined that there is a investigation. For a further discussion of reasonable indication that a regional the respondent selection process for Notice of Preliminary Determinations industry in the United States is Indonesia, see the Indonesia section, of Sales at Less Than Fair Value: Steel materially injured or threatened with below. Concrete Reinforcing Bars From material injury by reason of imports In the petition, filed on June 28, 2000, Poland, Indonesia, and Ukraine from Belarus, China, Indonesia, Korea, the petitioner alleged that there is a Latvia, Moldova, Poland, and Ukraine of reasonable basis to believe or suspect AGENCY: Import Administration, certain steel concrete reinforcing bars. that critical circumstances exist with International Trade Administration, See Certain Steel Concrete Reinforcing respect to imports of rebar from Poland. Department of Commerce. Bars From Austria, Belarus, China, On August 30, 2000, the Department EFFECTIVE DATE: January 30, 2001. Indonesia, Japan, Korea, Latvia, preliminarily determined that critical circumstances exist with respect to FOR FURTHER INFORMATION CONTACT: Moldova, Poland, Russia, Ukraine, and exports of rebar from Poland. See Valerie Ellis at (202) 482–2336 (for Venezuela, 65 FR 51329 (August 23, 2000). With respect to subject imports Memorandum to Holly A. Kuga Re: Poland), Maisha Cryor at (202) 482– Preliminary Affirmative Determinations 5831 (for Indonesia), or Keir Whitson at from Austria, Russia, and Venezuela, the ITC determined that imports from of Critical Circumstances (August 30, (202) 482–1777 (for Ukraine), AD/CVD 2000); see also Preliminary Enforcement, Import Administration, these countries during the period of investigation (POI) were negligible and, Determinations of Critical Room 1870, International Trade Circumstances: Steel Concrete Administration, U.S. Department of therefore, these investigations were terminated. The ITC also determined Reinforcing Bars From the People’s Commerce, 14th Street and Constitution Republic of China and Poland, 65 FR Avenue, NW, Washington, DC 20230. that there is no reasonable indication that an industry in the United States is 54228 (September 7, 2000). The Applicable Statute and Regulations materially injured or threatened with In a letter filed on August 22, 2000, the petitioner alleged that there is a Unless otherwise indicated, all material injury, by reason of subject imports from Japan. Id. reasonable basis to believe or suspect citations to the statute are references to that critical circumstances exist with the provisions effective January 1, 1995, On August 18, 2000, the Department issued complete antidumping respect to imports of rebar from the effective date of the amendments Ukraine. On November 27, 2000, the made to the Tariff Act of 1930 (the Act) questionnaires to all known producers/ exporters of subject merchandise in Department preliminarily determined by the Uruguay Round Agreements Act 2 that there is a reasonable basis to believe (URAA). In addition, unless otherwise Poland and Ukraine. In the case of Indonesia, the complete antidumping or suspect that critical circumstances indicated, all citations to Department of exist for imports of rebar from Ukraine. Commerce (Department) regulations questionnaire was issued to PT The Master Steel Manufacturing Co.3 (Master See Preliminary Determinations of refer to the regulations codified at 19 Critical Circumstances: Steel Concrete CFR part 351 (April 2000). Steel), and partial Section A questionnaires4 were issued to several Reinforcing Bars From Ukraine and Preliminary Determinations Moldova, 65 FR 70696 (November 27, 2 Because the Department considers Ukraine to be 2000). We preliminarily determine that steel a non-market economy, and because the number of On November 9, 2000, the petitioner concrete reinforcing bars (rebar) from producers/exporters identified in Ukraine did not requested a postponement of the Poland, Indonesia, and Ukraine are appear to preclude an examination of each exporter preliminary determinations in these being sold, or are likely to be sold, in and that exporter’s suppliers, we determined to examine all exports to the United States from investigations. On November 21, 2000, the United States at less than fair value Ukraine in accordance with our general practice. the Department published a Federal (LTFV), as provided in section 733 of See Memorandum to Holly A. Kuga Re: Selection of Register notice postponing the deadline the Act. The estimated margins of sales Respondents (August 25, 2000). In the case of for the preliminary determinations until at LTFV are shown in the Suspension of Poland, a market economy, we found that only one producer in Poland exported subject merchandise January 16, 2001. See Notice of Liquidation section of this notice. to the United States during the POI. We therefore Postponement of Preliminary Case History determined to examine all exports from Poland Antidumping Duty Determinations: during the POI, in accordance with our general Steel Concrete Reinforcing Bars from These investigations were initiated on practice. Id. 3 Belarus, Indonesia, Latvia, Moldova, the 1 Section A of the questionnaire requests general July 18, 2000. See Initiation of information concerning a company’s corporate People’s Republic of China, Poland, the Antidumping Duty Investigations: Steel structure and business practices, the merchandise Republic of Korea and Ukraine, 65 FR Concrete Reinforcing Bars from Austria, under investigation that it sells, and the manner in 69909 (November 21, 2000). Belarus, Indonesia, Japan, Latvia, which it sells that merchandise in all of its markets. Section B requests a complete listing of all home Period of Investigations Moldova, the People’s Republic of market sales, or, if the home market is not viable, China, Poland, the Republic of Korea, of sales in the most appropriate third-country For Poland and Indonesia, the POI is the Russian Federation, Ukraine and market (this section is not applicable to respondents April 1, 1999, through March 31, 2000. Venezuela, 65 FR 45754 (July 25, 2000) in non-market economy (NME) cases). Section C This period corresponds to the four requests a complete listing of U.S. sales. Section D most recent fiscal quarters prior to the (Initiation Notice). Since the initiation requests information on the cost of production (COP) of the foreign like product and the month of the filing of the petition (i.e., 1 The petitioner in these investigations is the constructed value (CV) of the merchandise under June 2000). Because Ukraine is a non- Rebar Trade Action Coalition (RTAC), and its investigation. In NME cases, Section D requests market economy, the POI for Ukraine individual members, AmeriSteel, Auburn Steel Co., information on factors of production. Section E corresponds to the two most recent Inc., Birmingham Steel Corp., Border Steel, Inc., requests information on further manufacturing. Marion Steel Company, Riverview Steel, and Nucor 4 The partial Section A questionnaire requests fiscal quarters prior to the month of the Steel and CMC Steel Group. (Auburn Steel was not information on the quantity and value of home and filing of the petition; namely, October 1, a petitioner in the Indonesia case). U.S. market sales. 1999 through March 31, 2000.
VerDate 11
Scope of Investigations preliminarily determine that the use of pursuant to section 782(d) of the Act, to For purposes of these investigations, total adverse facts available is warranted obtain, inter alia, Stalexport’s the product covered is all rebar sold in with respect to Huta Ostrowiec S.A. and unreported sales by its affiliated straight lengths, currently classifiable in Stalexport (collectively, Stalexport). resellers, Stalexport failed to respond. In the Harmonized Tariff Schedule of the On August 18, 2000, the Department addition, without the supplemental United States (HTSUS) under item issued an antidumping questionnaire to questionnaire responses, we are unable number 7214.20.00 or any other tariff Stalexport. On October 6, 2000, we to determine the extent of unreported item number. Specifically excluded are received a section A questionnaire home market sales, whether Stalexport plain rounds (i.e., non-deformed or response from Stalexport, and on provided the appropriate date of sale for smooth bars) and rebar that has been October 10, 2000, we received the the sales that it did report, and whether further processed through bending or responses to sections B through D of our Stalexport’s home market and U.S. sales coating. HTSUS subheadings are questionnaire. We reviewed these initial are reported on an equivalent weight provided for convenience and Customs responses and found that a substantial basis for comparison purposes. As a purposes. The written description of the portion of the sales in Stalexport’s home result, we do not have a reliable home scope of this proceeding is dispositive. market sales listing were sales to an market listing to use for comparison affiliated reseller, rather than the resales purposes in accordance with our general Facts Available to the first unaffiliated customer. This practice, nor are we able to confirm the 1. Application of Facts Available resulted not only in an incomplete and appropriate date of sale for any of the unreliable home market sales listing, but submitted sales. Section 776(a)(2) of the Act provides also in an inaccurate total quantity and We further find that the application of that, if an interested party (A) withholds value for Stalexport’s POI sales. In order section 782(e) of the Act, we are unable information requested by the to address this and other deficiencies, to use the company-specific information Department, (B) fails to provide such we issued a supplemental section A contained in the responses we did information by the deadline, or in the questionnaire on October 6, 2000. The receive, given that the deadline for form or manner requested, (C) response was initially due on October submitting the necessary information significantly impedes a proceeding, or 20, 2000. However, Stalexport never has passed, and the responses currently (D) provides information that cannot be retrieved the supplemental on the record are so incomplete that verified, the Department shall use, questionnaire from our courier office. they cannot serve as a reliable basis for subject to sections 782(d) and (e) of the Therefore, we re-issued the reaching the applicable determination. Act, facts otherwise available in supplemental section A questionnaire See sections 782(e)(1), (3) and (4) of the reaching the applicable determination. on October 25, 2000, along with Act. We further note that Stalexport did Pursuant to section 782(e) of the Act, supplemental section B and section C not notify the Department that it would the Department shall not decline to questionnaires. This gave Stalexport an be unable to submit the requested consider submitted information if all of additional eighteen days to complete its information, nor did it provide any the following requirements are met: (1) response to section A, i.e., until explanation or propose an alternate The information is submitted by the November 7, 2000, and until November form of submitting the required data, established deadline; (2) the information 13, 2000, to respond to supplemental pursuant to section 782(c)(1) of the Act. can be verified; (3) the information is section B and section C questionnaires. Because the information that Stalexport not so incomplete that it cannot serve as We also issued a supplemental section failed to report is critical for purposes a reliable basis for reaching the D questionnaire on October 27, 2000, of the preliminary dumping applicable determination; (4) the with a response due date of November calculations, the Department must resort interested party has demonstrated that it 9, 2000. to facts otherwise available in reaching acted to the best of its ability; and (5) Although we provided Stalexport its preliminary determination, pursuant the information can be used without with additional time to complete the to section 776(a)(2)(A), (B) and (C). undue difficulties. supplemental section A questionnaire, We also find that the application of an In selecting from among the facts the company did not submit a response. adverse inference in this case is otherwise available, section 776(b) of Stalexport also did not respond to the appropriate, pursuant to section 776(b) the Act authorizes the Department to section B, C or D supplementals by the of the Act. As discussed above, use an adverse inference, if the respective due dates, nor did the Stalexport failed to provide the critical Department finds that an interested company request that the Department data pertaining to the company’s party failed to cooperate by not acting grant any extension of the deadline to affiliated party transactions and date of to the best of its ability to comply with respond. On November 9, 2000, we sale, despite the Department’s clear the request for information. See, e.g., phoned counsel for Stalexport to inquire directions in both the original and Certain Welded Carbon Steel Pipes and as to whether the respondent was aware supplemental questionnaires and Tubes From Thailand: Final Results of that the deadlines for responding to the numerous conversations with the Antidumping Duty Administrative supplemental questionnaire responses company’s counsel. Furthermore, Review, 62 FR 53808, 53819–20 had passed. Counsel for Stalexport Stalexport made no effort to provide any (October 16, 1997). Finally, section indicated that he was indeed aware that explanation or propose an alternate 776(b) of the Act states that an adverse the deadline had passed, and offered no form of submitting the required data. inference may include reliance on explanation for Stalexport’s failure to For these reasons, we find that information derived from the petition. meet the response deadline. See Stalexport did not act to the best of its See also Statement of Administrative Memorandum to the File from Charles ability in responding to the Action (SAA) accompanying the URAA, Riggle, dated November 13, 2000. Department’s request for information, H.R. Rep. No. 103–316 at 870 (1994). As described above, Stalexport failed and that, consequently, an adverse to provide, within the applicable inference is warranted under section Poland deadlines, its responses to the 776(b) of the Act. See, e.g., Notice of In accordance with section 776(a)(2), Department’s supplemental Final Determination of Sales at Less 776(b), and 782(d) and (e) of the Act, for questionnaires. Despite the than Fair Value: Circular Seamless the reasons explained below, we Department’s repeated attempts, Stainless Steel Hollow Products from
VerDate 11
Japan, 65FR42985 (July 12, 2000) (the two FA letters, the first addressing no Master Steel’s failure to provide this Department applied total adverse facts response and the second addressing late information resulted in an incomplete available where respondent failed to response. and unreliable cost response and home respond to the antidumping On September 6, 2000, the market and U.S. sales listings, and an questionnaires). Department notified the following five inaccurate total quantity and value for Master Steel’s POI sales. In order to Indonesia companies that their ‘‘no shipment’’ responses were subject to verification address these and other deficiencies, we In accordance with section 776 of the and that, if shipments were ultimately issued supplemental questionnaires on Act, for the reasons explained below, we discovered, the Department may have to October 23, and November 2, 2000, as preliminarily determine that the use of rely upon facts available in making its noted above. On November 7, 2000, total adverse facts available is warranted determinations in this proceeding: Master Steel submitted a timely with respect to Indonesia. The Kyoei, Inter World, Megah Utama, response to the Department’s October Department issued partial section A Gahapi, and Garuda. In addition, on 23, 2000, section A supplemental antidumping duty questionnaires September 6, 2000, the Department questionnaire. On November 9, 2000, (partial A questionnaires) to the notified the following six non- via email, Master Steel requested an following thirteen respondents on responsive companies that the eighteen day extension of time for filing August 18 and August 23, 2000: PT Department had not received their its response to the Department’s Gunung Gahapi Sakti (Sakti), PT Jakarta partial section A questionnaire November 2, 2000, supplemental Kyoei Steel Works Ltd. (Jakarta Steel responses and that, as a result, the questionnaire (supplemental Group) (Kyoei), PT The Master Steel Department would have to rely upon FA questionnaire). On November 14, 2000, Manufacturing Co., (Master Steel), PT in making its determinations in this in response to Master Steel’s November Hanil Jaya Metal Works (Hanil), PT proceeding: Sakti, Bhirma, Krakatau, 9, 2000, extension request, and after Bhirma Steel (Bhirma), PT Inter World Perdana, Hanil, and Pulogadung. receiving several improperly submitted Steel Mills Indonesia (Inter World), On September 13, 2000, the submissions (i.e. submissions that were Jakarta Steel Megah Utama (Jakarta Steel Department notified Tunggal, presented via facsimile and email), the Group) (Megah Utama), PT Jakarta Steel Department sent Master Steel a letter Perdana Industri (Jakarta Steel Group) Pulogadung and Hanil, that the Department had not received their granting it an extension until November (Perdana), Krakatau Wajatama 20, 2000. In addition, the letter once (Krakatau), PT Jakarta Cakra Tunggal partial A responses by the August 28, 2000, deadline and that, as a result, the again reiterated the Department’s (Tunggal), PT Pulogadung Steel requirement that all documents (Pulogadung), PT Gunung Gahapi Department would have to rely upon FA in making its determinations in this submitted to the Department must be Bahara (Gahapi), and PT Gunung properly filed and served on all proceeding. Garuda (Garuda). On August 18, 2000, interested parties, in accordance with 19 In October 2000, Master Steel the Department issued a partial section CFR 351.103 (b) and 19 CFR 351.303. submitted its sections A, B, C, and D A questionnaire to the Association of The Department informed Master Steel Indonesian Steel Billet and Concrete questionnaire responses. In the initial that it would no longer accept Producers and requested that it forward response to our antidumping submissions that were not officially the questionnaire to any other known questionnaire, we found that substantial submitted to and stamped by the Central producers/exporters of rebar. The information in the questionnaire Records Unit (CRU) with the date and Department established August 28, remained unanswered. Master Steel time of receipt. See Letter from the 2000, as the deadline for responding to failed to provide: (1) The transfer price, Department of Commerce (November the partial section A questionnaires. cost of production or market price of the 14, 2000). The November 14, 2000, By the August 28, 2000, deadline, the major input received from its affiliate, letter, as well as the Department’s Department had received responses (2) product-specific costs, (3) the previous letters, also advised Master from the following six companies: quantity of each control number Steel of the potential repercussions (i.e., Kyoei, Inter World, Megah Utama, produced during the POI, (4) POI rejection of responses, use of FA) that Gahapi, Garuda and Master Steel. Of the specific costs, (5) costs on the same could occur from its failure to abide by six timely responding companies, weight and currency basis as home the Department’s filing requirements. Master Steel was the only company to market sales, (6) worksheets showing its On November 17, 2000, Master Steel, report exports of rebar to the United calculation of the general and via facsimile, requested yet another States during the POI. We conducted a administrative expense ratio and the extension of time to file its Customs data query and confirmed the financial expense ratio, (7) an supplemental questionnaire response. no shipments claims made by the explanation concerning affiliation Although this extension request was remaining five companies listed above. issues, (8) accurate control numbers improperly submitted, the Department On August 30, 2000, the Department (CONNUMs), (9) an explanation of zero decided to grant it until November 27, issued a complete antidumping values for certain selling expenses, (10) 2000, in case Master Steel had not questionnaire to Master Steel. In clarification concerning the received the Department’s November 14, addition, on August 30, 2000, the appropriateness of the reported U.S. 2000, letter prior to sending its Department received a no shipment sales date, (11) home market (HM) November 17, 2000, facsimile requesting response from Tunggal. shipment dates, (12) accurate HM an extension. On September 4, 2000, Pulogadung payment dates, (13) an explanation and On November 23, 2000, Master Steel, mailed a no shipment response to the reconciliation of HM and U.S. imputed via facsimile, requested another Department. However, the response did credit expenses, (14) an explanation of extension of time to file its response to not reach the appropriate Department missing product specifications, (15) the Department’s November 2, 2000, officials until September 7, 2000. On clarification concerning U.S. inland supplemental questionnaire. On September 11, 2000, Hanil sent a no freight, and (16) an explanation of its November 30, 2000, the Department shipment response to the Department. reported packing expenses. See October granted Master Steel an extension until Therefore, as discussed below, the 23, 2000, and November 2, 2000, December 1, 2000, to file its response. Department sent Pulogadung and Hanil supplemental questionnaires. In addition, the November 30, 2000,
VerDate 11
letter noted the improper submission of repeated attempts, pursuant to section is warranted under section 776(b) of the Master Steel’s most recent extension 782(d) of the Act, to obtain the missing Act. See Master Steel FA Memo. request and stated that this extension information, Master Steel failed to Ukraine would be the last extension granted for respond in a timely manner. As a result, Master Steel to respond to the we do not have a reliable home market In accordance with sections 776(a) Department’s supplemental or U.S. sales listing to use for and (b) of the Act, for the reasons questionnaire. The Department comparison purposes in accordance explained below, we preliminarily explained that it was not in a position with our practice. In addition, we also determine that the use of total adverse to grant any further extensions to Master question whether Master Steel provided facts available is warranted with respect Steel because of the impending deadline the appropriate date of sale for its to Krovoi Rog State Mining and Metal for publication of the preliminary reported U.S. sales. Moreover, Master Works (Krivorozhstal). On August 18, determination, the fact that there would Steel submitted an incomplete cost 2000, the Department issued a not be sufficient time to analyze the response, with deficiencies concerning nonmarket economy questionnaire to Master Steel responses, and the such issues as product specific costs, the Embassy of Ukraine in Washington, inadequate time to issue supplemental costs for major inputs received from DC and, concurrently, to the five known questionnaires regarding any affiliated parties, and the quantity of Ukrainian producers of rebar. information that Master Steel would specific CONNUMs produced during Questionnaires were sent, specifically, have submitted. the POI. See Master Steel FA Memo. to Dneprovsky Iron and Steel Works However, despite the Department’s Master Steel did not notify the (Dneprovsky), Makeevsky Iron and Steel explanation of the proper filing Department that it would be unable to Works, Kramatorsk Iron and Steel requirements in its previous extension submit the requested information, nor Works, Yenakievsky Iron and Steel letters, on December 5, 2000, Master did it provide any explanation or Works, and Krivorozhstal. By the Steel submitted an untimely response to propose an alternate form of submitting extended September 22, 2000, deadline sections B, C, and D of the Department’s the required data, pursuant to section for responding to the Department’s supplemental questionnaire. 782(c)(1) of the Act. See Master Steel FA section A questionnaire, we received In accordance with section 776(a) of Memo. responses from Dneprovsky and the Act, we have determined that the Krivorozhstal. Dneprovsky stated that We are unable, under the application use of adverse FA is warranted for Sakti, the company does not export rebar to of section 782(e), to use the company- Bhirma, Krakatau, Perdana, Hanil, the United States. The Department specific information contained in the Pulogadung, Tunggal and Master Steel. received quantity and value data from responses we did receive from Master Sakti, Bhirma, Krakatau, and Perdana Krivorozhstal and selected Steel, given that the deadline for failed to respond to the Department’s Krivorozhstal as the sole mandatory submitting the supplemental partial A questionnaire. Hanil, respondent in the Ukraine case. questionnaire responses has passed, and Pulogadung and Tunggal failed to Krivorozhstal, over the course of this the responses currently on record are so respond to the Department’s partial proceeding, has not provided the section A questionnaire by the incomplete that they cannot serve as a Department with complete, applicable deadline. Because these reliable basis for reaching the applicable documented, product-specific factors of respondents failed to provide the determination. See Master Steel FA production information. Accordingly, requested quantity and value Memo. we are relying on the facts otherwise information by the applicable deadline, Because the information that Master available for purposes of the the Department must use FA, in Steel failed to report is critical for preliminary determination. accordance with section 776(a) of the purposes of the preliminary dumping The questionnaire sent to Act. The Department has also calculations, the Department must resort Krivorozhstal on August 18, 2000, determined that because these to facts otherwise available in reaching described in detail how respondents companies either failed to respond to its preliminary determination, pursuant should report factors of production data the partial section A questionnaire, or to sections 776(a)(2)(A), (B), and (C) of for intermediate products produced by failed to respond in a timely manner to the Act. separate production processes. On the partial section A questionnaire, they We also find that the application of an October 10, 2000, Krivorozhstal did not act to the best of their ability to adverse inference in this case is submitted a section D questionnaire comply with the Department’s request appropriate. Master Steel failed to response with incomplete factors of for information. Without completed provide critical data regarding COP, production data. On October 26, questionnaire responses, the affiliations, accurate control numbers, pursuant to section 782(d) of the Act, Department lacks critical information explanation of zero values for certain the Department issued a supplemental that is necessary to the dumping selling expenses, HM shipment dates, questionnaire and reminded calculation and cannot determine an accurate HM payment dates, and inter Krivorozhstal of its obligation to provide accurate dumping margin. Therefore, in alia clarification regarding its choice for complete factors of production data. On accordance with section 776(b) of the date of sale. Moreover, despite the November 9, 2000, Krivorozhstal Act, the Department has used an Department’s directions in the responded to the Department’s adverse inference in determining a questionnaires and the numerous supplemental questionnaire and, again, margin for these companies. extensions granted, Master Steel made failed to provide complete factors of With respect to Master Steel, Master no effort to provide any explanation or production information. Krivorozhstal’s Steel failed to provide, within the propose an alternate form of submitting November 9, 2000, response, while applicable deadlines, its responses to the data. See Master Steel FA Memo. For providing some additional data, did not the Department’s supplemental these reasons, we find that Master Steel properly document and support with questionnaires. See Memorandum did not act to the best of its ability in narrative explanation these additional Regarding the Application of Adverse responding to the Department’s requests factors of production data, again did not Facts Available to Master Steel, dated, for information, see, e.g., Circular provide the Department with product- January 16, 2001 (Master Steel FA Stainless Steel Hollow Products, and specific factors of production and, Memo). Despite the Department’s that, consequently, an adverse inference finally, did not propose an appropriate
VerDate 11
alternative methodology for deriving attempted to further corroborate the All Others—Poland and Indonesia. product-specific factors of production. information in the petition. We re- Section 735(c)(5)(B) of the Act provides See Decision Memorandum to Troy examined the EP and NV data which that, where the estimated weighted- Cribb Regarding the Use of Facts formed the basis for the highest margin average dumping margins established Available for the Antidumping in the petition in light of information for all exporters and producers Investigation of Steel Concrete obtained during the investigation and, individually investigated are zero or de Reinforcing Bars from Ukraine (Ukraine to the extent practicable, found that it minimis margins, or are determined FA Memo) (January 16, 2001) for further has probative value (see the January 16, entirely under section 776 of the Act, detail regarding the inadequacy of 2001, memoranda to the file regarding the Department may use any reasonable Krivorozhstal’s submitted data. Application of Facts Available for Huta method to establish the estimated ‘‘all Because Krivorozhstal has refused to Ostroweic, S.A. and Stalexport, S.A.; others’’ rate for exporters and producers provide the Department with a full Master Steel FA Memo; Corroboration of not individually investigated. This accounting of its factors of production, the Petition Data for Indonesia at provision contemplates that we weight- the Department must use facts available section C; and Ukraine FA Memo on file average margins other than facts under sections 776(a)(2)(A) of the Act, in the Central Records Unit, Room B– available margins to establish the ‘‘all and (B) of the Act. In addition, we 099, of the Main Commerce Department others’’ rate. Where the data do not consider that Krivorozhstal has not building). permit weight-averaging such rates, the acted to the best of its ability to provide Accordingly, in selecting adverse facts SAA, at 873, provides that we may use complete factors of production available with respect to Stalexport, the other reasonable methods. With respect information, since, as explained above, Department determined to apply a to Poland and Indonesia, because there Krivorozhstal has failed to provide basic constructed value margin rate of 52.07 is no other information on the record on information readily at its disposal. percent, the highest margin alleged for which to base an ‘‘all others’’ rate, Poland in the petitioner’s July 10, 2000, 2. Selection and Corroboration of Facts consistent with the Department’s addendum to the petition. For Available practice, we have based the ‘‘all others’’ Indonesia, as FA for Sakti, Bhirma, rate on the simple average of the rates Section 776(b) of the Act states that an Krakatau, Perdana, Hanil, Pulogadung provided by the petitioner. See, e.g., adverse inference may include reliance and Master Steel, the Department Notice of Final Determinations of Sales on information derived from the applied a constructed value margin rate at Less Than Fair Value: Certain Cold- petition. See also SAA at 829–831. of 71.01 percent, the highest margin Rolled Flat-Rolled Carbon-Quality Steel Section 776(c) of the Act provides that, alleged for Indonesia in the petitioner’s Products From Argentina, Japan and when the Department relies on July 10, 2000, addendum to the petition. Thailand, 65 FR 5520, 5528 (February 4, secondary information (such as the For Ukraine, inasmuch as we have been 2000). petition) in using the facts otherwise unable to rely on Krivorozhstal’s available, it must, to the extent questionnaire responses, we have not Final Critical Circumstances practicable, corroborate that information determined whether Krivorozhstal Determinations from independent sources that are warrants a separate rate. We have We will make a final determination reasonably at its disposal. assigned to all exports of subject rebar concerning critical circumstances for The SAA clarifies that ‘‘corroborate’’ from the Ukraine a country-wide rate of means that the Department will satisfy 41.69 percent, the single margin alleged Poland and Ukraine when we make our itself that the secondary information to in the petitioner’s July 10, 2000, final determination regarding sales at be used has probative value (see SAA at addendum to the petition. LTFV in this investigation, which will 870). The SAA also states that Separate Rates—Ukraine. It is the be no later than 75 days after the independent sources used to corroborate Department’s policy to assign all publication of this notice in the Federal such evidence may include, for exporters of merchandise subject to Register. example, published price lists, official investigation in a NME country a single Suspension of Liquidation import statistics and customs data, and rate, unless an exporter can demonstrate information obtained from interested that it is sufficiently independent from In accordance with section 733(d) of parties during the particular government control so as to be entitled the Act, we are directing the U.S. investigation (see SAA at 870). to a separate rate. In the case involving Customs Service to suspend liquidation In order to determine the probative Ukraine, the single respondent of all entries of rebar from Indonesia value of the margins in the petitions for company, Krivorozhstal, has claimed to that are entered, or withdrawn from use as adverse facts available for be sufficiently independent to warrant a warehouse, for consumption on or after purposes of this determination, we separate rate. However, since, as the date of publication of this notice in examined evidence supporting the explained above, Krivorozhstal has the Federal Register. In the case of calculations in the petitions. In impeded the Department’s investigation, Poland and Ukraine, because of our accordance with section 776(c) of the we have not made a determination as to preliminary affirmative critical Act, to the extent practicable, we whether Krivorozhstal merits a separate circumstances findings in these cases, examined the key elements of the (EP) rate, and are assigning a single country- and in accordance with section 733(e) of and normal value (NV) calculations on wide rate for all exporters of subject the Act, we are directing the U.S. which the margins in the petitions were merchandise from Ukraine.5 Customs Service to suspend liquidation based. Our review of the EP and NV of all entries of rebar from Poland and calculations indicated that the 5 We note that, inasmuch as the petition contains Ukraine that are entered, or withdrawn information in the petitions has only a single margin, the same rate would apply to from warehouse, for consumption on or Krivorozhstal and all other exporters of subject probative value, as certain information merchandise from Ukraine, even if Krivorozhstal after the date which is 90 days prior to included in the margin calculations in had been assigned a separate rate. In the event that the date of publication of this notice in the petitions is from public sources the Department is able to base its final the Federal Register. For Poland, concurrent, for the most part, with the determination on the data submitted by Indonesia and Ukraine, we are also Krivorozhstal rather than on the facts otherwise relevant POI. For purposes of the available, the Department will determine whether instructing the Customs Service to preliminary determination, we Krivorozhstal merits a separate rate. require a cash deposit or the posting of
VerDate 11
a bond equal to the dumping margin, as rebuttal briefs, provided that such a Street and Constitution Avenue, NW, indicated in the chart below. hearing is requested by any interested Washington, DC 20230. These instructions suspending party. If a request for a hearing is made The Applicable Statute and Regulations liquidation will remain in effect until in an investigation, the hearing will further notice. tentatively be held two days after the Unless otherwise indicated, all deadline for submission of the rebuttal citations to the statute are references to Manufacturer/exporter Margin briefs, at the U.S. Department of the provisions effective January 1, 1995, (percent) Commerce, 14th Street and Constitution the effective date of the amendments Avenue, NW, Washington, DC 20230. In made to the Tariff Act of 1930 (the Act) Poland: by the Uruguay Round Agreements Act Huta Ostrowiec S.A. the event that the Department receives (‘‘Stalexport’’) ...... 52.07 requests for hearings from parties to (URAA). In addition, unless otherwise All Others ...... 47.13 several rebar cases, the Department may indicated, all citations to Department of Indonesia: schedule a single hearing to encompass Commerce (the Department) regulations Sakti ...... 71.01 all those cases. Parties should confirm refer to the regulations codified at 19 Bhirma ...... 71.01 by telephone the time, date, and place CFR part 351 (2000). Krakatau ...... 71.01 of the hearing 48 hours before the Preliminary Determination Perdana ...... 71.01 scheduled time. Hanil ...... 71.01 Interested parties who wish to request We preliminarily determine that steel Pulogadung ...... 71.01 a hearing, or to participate if one is concrete reinforcing bars (rebar) from Tunggal ...... 71.01 the Republic of Korea (Korea) are being Master Steel ...... 71.01 requested, must submit a written All Others ...... 60.46 request within 30 days of the sold, or are likely to be sold, in the Ukraine: publication of this notice. Requests United States at less than fair value Ukraine-Wide Rate ...... 41.69 should specify the number of (LTFV), as provided in section 733 of participants and provide a list of the the Act. The estimated margins of sales Disclosure issues to be discussed. Oral at LTFV are shown in the SUSPENSION OF LIQUIDATION section of this notice. The Department will disclose presentations will be limited to issues calculations performed within five days raised in the briefs. If these Case History of the date of publication of this notice investigations proceed normally, we will make our final determinations in This investigation was initiated on to the parties of the proceedings in these 1 the investigations of steel concrete July 18, 2000. See Initiation of investigations in accordance with 19 Antidumping Duty Investigations: Steel CFR 351.224(b). reinforcing bars from Poland, Indonesia and Ukraine no later than 75 days after Concrete Reinforcing Bars from Austria, ITC Notification the date of this preliminary Belarus, Indonesia, Japan, Latvia, Moldova, the People’s Republic of In accordance with section 733(f) of determination. This determination is issued and China, Poland, the Republic of Korea, the Act, we have notified the ITC of our the Russian Federation, Ukraine, and determinations. If our final antidumping published pursuant to sections 733(f) and 777(i)(1) of the Act. Venezuela, 65 FR 45754 (July 25, 2000) determinations are affirmative, the ITC (Initiation Notice). Since the initiation will determine whether these imports Dated: January 16, 2001. of these investigations, the following are materially injuring, or threaten Troy H. Cribb, events have occurred. material injury to, the U.S. industry. Assistant Secretary for Import On August 14, 2000, the United States The deadline for that ITC determination Administration. International Trade Commission (ITC) would be the later of 120 days after the [FR Doc. 01–2522 Filed 1–29–01; 8:45 am] preliminarily determined that there is a date of these preliminary BILLING CODE 3510–DS–P reasonable indication that imports of the determinations or 45 days after the date products subject to this investigation are of our final determinations. threatening material injury or materially DEPARTMENT OF COMMERCE Public Comment injuring a regional industry in the United States producing the domestic For the investigations of steel concrete International Trade Administration like product. See Certain Steel Concrete reinforcing bars from Poland, Indonesia, [A–580–844] Reinforcing Bars From Austria, Belarus, and Ukraine, case briefs must be China, Indonesia, Japan, Korea, Latvia, submitted no later than 35 days after the Notice of Preliminary Determination of Moldova, Poland, Russia, Ukraine, and publication of this notice in the Federal Sales at Less Than Fair Value and Venezuela, 65 FR 51329 (August 23, Register. Rebuttal briefs must be filed Postponement of Final Determination: 2000). With respect to subject imports within five business days after the Steel Concrete Reinforcing Bars From from Austria, Russia, and Venezuela, deadline for submission of case briefs. A the Republic of Korea the ITC determined that imports from list of authorities used, a table of these countries during the period of AGENCY: Import Administration, contents, and an executive summary of investigation (POI) were negligible and, International Trade Administration, issues should accompany any briefs therefore, these investigations were Department of Commerce. submitted to the Department. Executive terminated. The ITC also determined summaries should be limited to five EFFECTIVE DATE: January 30, 2001. that there is no reasonable indication pages total, including footnotes. Public FOR FURTHER INFORMATION CONTACT: that an industry in the United States is versions of all comments and rebuttals Mark Manning or Jeff Pedersen at (202) should be provided to the Department 482–3936 and (202) 482–4195, 1 The petitioner in these investigations is the and made available on diskette. Section respectively; AD/CVD Enforcement, Rebar Trade Action Coalition (RTAC), and its 774 of the Act provides that the Office 4, Group II, Import individual members, AmeriSteel, Auburn Steel Co., Department will hold a hearing to afford Inc., Birmingham Steel Corp., Border Steel, Inc., Administration, Room 1870, Marion Steel Company, Riverview Steel, and Nucor interested parties an opportunity to International Trade Administration, Steel and CMC Steel Group. (Auburn Steel was not comment on arguments raised in case or U.S. Department of Commerce, 14th a petitioner in the Indonesia case).
VerDate 11
materially injured or threatened with requested that they be allowed to report Postponement of the Final material injury, by reason of subject the upstream sale from DSM to KISCO, Determination imports from Japan. Id. and vice versa, while being allowed to The Department issued antidumping exclude the downstream sale to the Section 735(a)(2) of the Act provides questionnaires to the three mandatory unaffiliated customer. that a final determination may be respondents in Korea on August 18, Second, DSM and KISCO stated in postponed until not later than 135 days 2000.2 We received responses from two their section A responses that they have after the date of the publication of the companies, Dongkuk Steel Mill Co., Ltd. not reported their home market sales of preliminary determination if, in the (DSM) and Korea Iron & Steel Co., Ltd. rebar purchased from unaffiliated event of an affirmative preliminary (KISCO). The third respondent, Hanbo suppliers because such rebar does not determination, a request for such Iron & Steel Co., Ltd. (Hanbo) did not fall within the definition of the ‘‘foreign postponement is made by exporters who respond to our questionnaire. We like product.’’ DSM and KISCO contend account for a significant proportion of confirmed with Federal Express that that ‘‘foreign like product’’ is defined as exports of the subject merchandise, or in Hanbo did receive our questionnaire merchandise ‘‘produced in the same the event of a negative preliminary (see Memorandum from Jeff Pedersen to country by the same person as the determination, a request for such the File, dated January 16, 2001). On subject merchandise.’’ Since they did postponement is made by the petitioner. September 14, 2000, we notified Hanbo not produce the rebar in question, DSM The Department’s regulations, at 19 CFR that we had not received its and KISCO did not include these home 351.210(e)(2), require that requests by questionnaire response and that, as a market sales in their reported sales respondents for postponement of a final result, the Department may have to rely listing. determination be accompanied by a on facts available in making our Lastly, in the September 20, 2000, request for extension of provisional determinations in this proceeding. We submission, KISCO requested that it be measures from a four-month period to issued supplemental questionnaires allowed to exclude certain U.S. market not more than six months. pertaining to sections A, B, C, and D of sales of rebar that were cut to length and On December 28, 2000, DSM and the antidumping questionnaire to DSM then repacked in Korea by its affiliate, and KISCO in September, October, Pusan Steel Mill Co., Ltd. (PSM), prior KISCO requested that, in the event of an November, and December 2000. DSM to export. According to KISCO, these affirmative preliminary determination and KISCO responded to these sales account for a tiny portion of its in this investigation, the Department supplemental questionnaires in October, U.S. market sales, are not typical of postpone its final determination until November, and December 2000. KISCO’s normal course of business, and 135 days after the publication of the DSM and KISCO requested that they would complicate the Department’s preliminary determination. DSM and not be required to report certain dumping analysis. KISCO also included a request to extend information requested in the On September 29, 2000, the the provisional measures to not more questionnaires. Specifically they Department issued to DSM and KISCO than 135 days after the publication of requested that they be permitted to a supplemental questionnaire the preliminary determination. exclude three types of data. First, on concerning these exclusion requests. We Accordingly, since we have made an September 20, 2000, DSM and KISCO received their joint response on October affirmative preliminary determination, reported that they each purchased a 23, 2000. The information contained in and the requesting parties account for a small quantity of rebar from each other, this response, in addition to information significant proportion of exports of the which was resold to unaffiliated home contained in DSM and KISCO’s subject merchandise, we have market customers. DSM and KISCO also responses to the antidumping postponed the final determination until reported that they purchased a small questionnaire, indicated that the sales not later than 135 days after the date of quantity of rebar from unaffiliated covered by these exclusion requests the publication of the preliminary suppliers, which was resold to were not representative of normal determination. unaffiliated home market customers. selling behavior, were made in such Since their accounting systems do not small volumes that they would have an Period of Investigation identify which resales of purchased insignificant effect on the calculation, The POI for this investigation is April rebar related to purchases from affiliated and, if not excluded, would unduly 1, 1999, through March 31, 2000. This suppliers and which related to complicate the Department’s analysis. period corresponds to the four most Therefore, we granted the three purchases from unaffiliated suppliers, recent fiscal quarters prior to the month exclusion requests discussed above. See DSM and KISCO stated that their of the filing of the petition (i.e., June Letter from Thomas F. Futtner, Acting accounting systems prevent them from 2000). reporting the downstream sales of rebar Office Director, to DSM and KISCO, purchased from affiliated suppliers (i.e., dated November 6, 2000. Scope of Investigations each other). Therefore, DSM and KISCO On November 9, 2000, the petitioner requested a postponement of the For purposes of these investigations, 2 Section A of the questionnaire requests general preliminary determination in this the product covered is all rebar sold in information concerning a company’s corporate investigation. On November 21, 2000, straight lengths, currently classifiable in structure and business practices, the merchandise the Department published a Federal the Harmonized Tariff Schedule of the under investigation that it sells, and the manner in which it sells that merchandise in all of its markets. Register notice postponing the deadline United States (HTSUS) under item Section B requests a complete listing of all home for the preliminary determination until number 7214.20.00 or any other tariff market sales, or, if the home market is not viable, January 16, 2001. See Notice of item number. Specifically excluded are of sales in the most appropriate third-country plain rounds (i.e., non-deformed or market (this section is not applicable to respondents Postponement of Preliminary in non-market economy (NME) cases). Section C Antidumping Duty Determinations: smooth bars) and rebar that has been requests a complete listing of U.S. sales. Section D Steel Concrete Reinforcing Bars from further processed through bending or requests information on the cost of production Belarus, Indonesia, Latvia, Moldova, the coating. HTSUS subheadings are (COP) of the foreign like product and the provided for convenience and Customs constructed value (CV) of the merchandise under People’s Republic of China, Poland, the investigation. Section E requests information on Republic of Korea and Ukraine, 65 FR purposes. The written description of the further manufacturing. 69909 (November 21, 2000). scope of this proceeding is dispositive.
VerDate 11
Selection of Respondents the deficiency. If the party fails to In this proceeding, we considered the Section 777A(c)(1) of the Act directs remedy the deficiency within the petition information the most the Department to calculate individual applicable time limits, the Department appropriate record information to use to dumping margins for each known may, subject to section 782(e), disregard establish the dumping margins for this exporter and producer of the subject all or part of the original and subsequent uncooperative respondent because, in merchandise. Where it is not practicable responses, as appropriate. Briefly, the absence of verifiable data provided to examine all known producers/ section 782(e) provides that the by Hanbo, the petition information is exporters of subject merchandise, Department ‘‘shall not decline to the best approximation available to the section 777A(c)(2) of the Act permits us consider information that is submitted Department of Hanbo’s pricing and to investigate either (1) a sample of by an interested party and is necessary selling behavior in the U.S. market. In to the determination but does not meet accordance with section 776(c) of the exporters, producers, or types of all the applicable requirements Act, we sought to corroborate the data products that is statistically valid based established by the administering contained in the petition. We reviewed on the information available at the time authority’’ if the information is timely, the adequacy and accuracy of the of selection, or (2) exporters and can be verified, is not so incomplete that information in the petition during our producers accounting for the largest it cannot be used, and if the interested pre-initiation analysis of the petition, to volume of the subject merchandise that party acted to the best of its ability in the extent appropriate information was can reasonably be examined. Using providing the information. Where all of available for this purpose (e.g., import company-specific export data for all of these conditions are met, and the statistics and foreign market research 1999 and the first half of 2000, which Department can use the information reports). See Initiation Notice. we obtained from the American without undue difficulties, the statute For purposes of this preliminary Embassy in Seoul, we found that four requires it to do so. determination, we attempted to Korean exporters shipped rebar to the In this proceeding, Hanbo declined to corroborate the information in the United States during that time period. respond at all to the Department’s petition with information gathered since Due to limited resources we determined antidumping questionnaire. Because the initiation. We compared the export that we could investigate only the three Hanbo provided no information price (EP) and CV data which formed largest producers. See Memorandum whatsoever, sections 782(d) and (e) of the basis for the highest margin in the from Valerie Ellis and Paige Rivas to the Act are not relevant, and the petition to the price and expense data Holly A. Kuga, Selection of Department must resort to the use of provided by DSM and KISCO during the Respondents, dated August 25, 2000. facts available for this respondent, in investigation and, to the extent Therefore, we designated DSM, KISCO, accordance with 776(a) of the Act. practicable, found that it had probative and Hanbo as mandatory respondents Moreover, we note that at no time did value (see Facts Available and sent them the antidumping Hanbo contact the Department and state Memorandum). questionnaire. On September 18, 2000, that it was having difficulty responding Critical Circumstances we received section A questionnaire to the questionnaire or otherwise responses from DSM and KISCO. We explain why it could not provide the In the petition filed on June 28, 2000, did not, however, receive a response requested information. Thus, we have the petitioner alleged that there is a from Hanbo. also determined that this respondent reasonable basis to believe or suspect that critical circumstances exist with Facts Available (FA) has not cooperated to the best of its ability. Therefore, pursuant to 776(b) of respect to imports of rebar from Korea. Section 776(a) of the Act provides that the Act, we used an adverse inference On July 18, 2000, concurrent with the ‘‘if an interested party or any other in selecting a margin from the FA. As initiation of the LTFV investigations on person—(A) withholds information that FA, the Department has applied a imports of rebar from Korea and other has been requested by the administering margin rate of 102.28 percent, the countries, the Department announced authority, (B) fails to provide such highest alleged margin for Korea in the its intention to investigate the information by the deadlines for the petition. See Memorandum from Holly petitioner’s allegation that critical submission of the information or in the A. Kuga to Troy H. Cribb, Antidumping circumstances exist with respect to form and manner requested, subject to Investigation of Steel Concrete imports of rebar from Korea. On August subsections (c)(1) and (e) of section 782, Reinforcing Bars From The Republic of 14, 2000, the ITC determined that there (C) significantly impedes a proceeding Korea—The Use of Facts Available for is a reasonable indication of material under this title, or (D) provides such Hanbo Iron & Steel Co. Ltd., and injury to a regional domestic industry information but the information cannot Corroboration of Secondary Information, from imports of rebar from Korea. be verified as provided in section 782(i), dated January 16, 2001 (Facts Available Section 733(e)(1) of the Act provides the administering authority and the Memorandum). that the Department will preliminarily Commission shall, subject to section Section 776(c) of the Act provides that determine that there is a reasonable 782(d), use the facts otherwise available where the Department selects from basis to believe or suspect that critical in reaching the applicable among the facts otherwise available and circumstances exist, if: (A)(i) There is a determination under this title.’’ The relies on ‘‘secondary information,’’ such history of dumping and material injury statute requires that certain conditions as the petition, the Department shall, to by reason of dumped imports in the be met before the Department may resort the extent practicable, corroborate that United States or elsewhere of the subject to the facts otherwise available. Where information from independent sources merchandise, or (ii) the person by the Department determines that a reasonably at the Department’s disposal. whom, or for whose account, the response to a request for information The Statement of Administrative Action merchandise was imported knew or does not comply with the request, accompanying the URAA, H.R. Doc. should have known that the exporter section 782(d) of the Act provides that No.316, 103d Cong., 2d Sess. (1994) was selling the subject merchandise at the Department will so inform the party (hereinafter, the SAA) states that less than its fair value and that there submitting the response and will, to the ‘‘corroborate’’ means to determine that was likely to be material injury by extent practicable, provide that party the information used has probative reason of such sales, and (B) there have the opportunity to remedy or explain value. See SAA at 870. been massive imports of the subject
VerDate 11
merchandise over a relatively short find that there is a reasonable basis to entity DSM/KISCO. See Notice of Final period. Section 351.206(h)(1) of the believe or suspect that importers knew Determination of Sales at Less Than Department’s regulations provides that, or should have known that rebar Fair Value: Certain Cold-Rolled Flat- in determining whether imports of the imports from Hanbo were being sold at Rolled Carbon-Quality Steel Products subject merchandise have been less than fair value and there was likely From Brazil, 65 FR 5554, 5561 (February ‘‘massive,’’ the Department normally to be material injury by reason of such 4, 2000). Based on our analysis of the will examine: (i) The volume and value sales. shipment data reported, because of the imports; (ii) seasonal trends; and In determining whether there are imports have decreased during the (iii) the share of domestic consumption ‘‘massive imports’’ over a ‘‘relatively comparison period, we preliminarily accounted for by the imports. In short period,’’ pursuant to section find that the criterion under section addition, section 351.206(h)(2) of the 733(e)(1)(B) of the Act, the Department 733(e)(1) of the Act has not been met, Department’s regulations provides that normally compares the import volume i.e., there have not been massive an increase in imports of 15 percent of the subject merchandise for three imports of rebar from DSM/KISCO over during the ‘‘relatively short period’’ of months immediately preceding the a relatively short time. See Critical time may be considered ‘‘massive.’’ filing of the petition (i.e., the base Circumstances Preliminary Because we are not aware of any period), and three months following the Determination Memorandum. For this existing antidumping order in any filing of the petition (i.e., the reason, we preliminarily determine that country on rebar from Korea, we do not comparison period). However, as stated critical circumstances do not exist for find a history of dumping from Korea, in section 351.206(i) of the Department’s imports of rebar produced by DSM/ pursuant to section 733(e)(1)(A)(i) of the regulations, if the Secretary finds that KISCO. Act. Further, with respect to section importers, exporters, or producers had With respect to imports of this 733(e)(1)(A)(i) of the Act, the magnitude reason to believe, at some time prior to merchandise from producers in the ‘‘all of the dumping margins found in this the beginning of the proceeding, that a others’’ category, it is the Department’s preliminary determination with respect proceeding was likely, then the normal practice to conduct its critical to DSM, Kisco, and the producers of Secretary may consider a time period of circumstances analysis of companies in subject merchandise in the ‘‘all others’’ not less than three months from that this category based on the experience of category, are insufficient to conclude earlier time. Imports normally will be the investigated companies. See Notice that the person by whom, or for whose considered massive when imports of Final Determination of Sales at Less account, the merchandise was imported during the comparison period have Than Fair Value: Certain Steel Concrete knew or should have known that the increased by 15 percent or more Reinforcing Bars from Turkey, (Rebar exporter was selling subject compared to imports during the base from Turkey) 62 FR 9737, 9741 (Mar. 4, merchandise at LTFV and that there was period. 1997). In Rebar from Turkey, the likely to be material injury by reason of In this case, the petitioner argues that Department found critical such sales. importers, exporters, or producers of circumstances for the ‘‘all others’’ With respect to DSM, KISCO and rebar from Korea had reason to believe category because it found critical producers of subject merchandise in the that an antidumping proceeding was circumstances for three of the four ‘‘all others’’ category, we find (see likely before the filing of the petition. companies investigated. However, as we below) that they do not satisfy the Based upon information contained in more recently determined in Notice of statutory criterion regarding massive the petition, we found that press reports Final Determination of Sales at Less imports necessary for an affirmative and published statements were Than Fair Value: Hot-Rolled Flat-Rolled finding of critical circumstances, section sufficient to establish that, by December Carbon-Quality Steel Products from 733(e)(1)(B) of the Act. Therefore, we 1999, importers, exporters, and foreign Japan, 64 FR 24329 (May 6, 1999) (Hot- did not address the issue of whether producers knew or should have known Rolled Steel from Japan), we are importers had knowledge that DSM, that a proceeding was likely concerning concerned that literally applying that KISCO and the ‘‘all others’’ companies rebar from Korea. As a result, the approach could produce anomalous were selling the subject merchandise at Department has considered whether results in certain cases. Thus, in less than its fair value. there have been massive imports after deciding whether critical circumstances As mentioned above, Hanbo was that time, based on a comparison of apply to companies covered by the ‘‘all selected as a mandatory respondent in periods immediately preceding and others’’ rate, the Department also this investigation and did not respond following the end of December 1999. considers the traditional critical to our antidumping questionnaire, nor See Memorandum from Tom Futtner to circumstances criteria. provide the requested shipment data Holly A. Kuga, Antidumping Duty In determining whether imports from necessary for our critical circumstances Investigation of Steel Concrete the ‘‘all others’’ category have been analysis. On September 14, 2000, we Reinforcing Bars from Korea— massive, the Department followed its notified Hanbo that we had not received Preliminary Determination of Critical normal practice of conducting its its questionnaire response and that, as a Circumstances (Critical Circumstances critical circumstances analysis of result, the Department may have to rely Preliminary Determination companies in this category based on the on facts available in making our Memorandum), dated January 16, 2001. experience of the investigated determinations in this proceeding. With In order to determine whether imports companies. In this case, we note that respect to imports of subject from Korea have been massive, the DSM/KISCO account for the majority of merchandise sold by Hanbo, we have Department requested that DSM, KISCO rebar exports from Korea. See Critical determined the preliminary dumping and Hanbo provide their shipment data Circumstances Preliminary margin to be 102.28 percent (based on for the last three years. We note that we Determination Memorandum. For this adverse facts available). This margin have collapsed DSM and KISCO into a reason, it is appropriate to extend the exceeds the 25 percent threshold used single entity for purposes of this experience of DSM/KISCO to the ‘‘all by the Department to impute knowledge antidumping investigation (see the others’’ category and determine that that the subject merchandise was Collapsing section below). Therefore, there have not been massive imports of causing injury. Therefore, pursuant to we conducted our analysis on the rebar from the ‘‘all others’’ category over section 733(e)(1)(A)(ii) of the Act, we shipment volumes from the collapsed a relatively short time. Since the second
VerDate 11
criterion under section 733(e)(1) of the organization.’’ Furthermore, under amount of rebar to each other in the Act has not been met, we find that section 351.401(f) of the Department’s home market, which entailed the critical circumstances do not exist for regulations, we will treat ‘‘two or more sharing of certain sales information, and imports of rebar produced by the ‘‘all affiliated producers as a single entity used the same affiliated transportation others’’ category. where those producers (1) have company for certain home market sales. With regard to Hanbo, we note that production facilities for similar or Based on these reasons, we find that since Hanbo refused to respond to the identical products that would not DSM and KISCO are affiliated producers Department’s antidumping require substantial retooling of either with similar or identical production questionnaire, there is no verifiable facility in order to restructure facilities that would not require information on the record with respect manufacturing priorities and (2) the substantial retooling of either facility in to Hanbo’s export volumes. For this Secretary concludes that there is order to restructure manufacturing reason, we must use the facts available significant potential for the priorities. We also find that there exists in accordance with section 776(a) of the manipulation of price or production’’ a significant potential for the Act in determination of whether there based on factors such as: (a) The level manipulation of price or production. were massive imports of merchandise of common ownership; (b) the extent to For further discussion, see Decision produced by Hanbo. With regard to which managerial employees or board Memorandum: Whether to Collapse aggregate import statistics, these data do members of one firm sit on the board of Dongkuk Steel Mill Co., Ltd. and Korea not permit the Department to ascertain the other firm; and (c) whether Iron and Steel Co., Ltd. Into a Single the import volumes for any individual operations are intertwined (e.g., through Entity, dated December 5, 2000. company that failed to provide sharing of sales information, Therefore, we have collapsed DSM and verifiable information. Nor do these data involvement in production and pricing KISCO, and are treating them as a single reasonably preclude an increase in decisions, sharing facilities/employees, entity (hereafter referred to as DSM/ shipments of 15 percent or more within and/or significant transactions between KISCO) for purposes of the preliminary a relatively short period for Hanbo. As the two affiliated producers). determination in this antidumping a result, in accordance with section In this case, it is undisputed that DSM investigation. 776(b) of the Act, we have used an owns over 5 percent of KISCO’s adverse inference in applying facts Fair Value Comparisons outstanding equity. Thus, DSM and available, and determine that there were To determine whether sales of rebar KISCO are affiliated as defined by massive imports from Hanbo. Since we from Korea were made in the United also find that, pursuant to section section 771(33)(E) of the Act. Regarding States at LTFV, we compared the EP or 733(e)(1)(A)(ii) of the Act, there is a the first collapsing criterion listed in the constructed export price (CEP) to the reasonable basis to believe or suspect section 351.401(f) of the Department’s normal value (NV), as described in the that importers knew or should have regulations, DSM and KISCO stated that EP and CEP and NV sections of this both companies ‘‘produce the same known that rebar imports from Hanbo { } notice. In accordance with section were being dumped and there was likely grades of rebar . . . and there were no 777A(d)(1)(A)(i) of the Act, we to be material injury by reason of such grades that were produced by one calculated weighted-average EPs and sales, we preliminary determine that company but not the other.’’ In addition, CEPs. We compared these to weighted- critical circumstances exist with respect both companies stated that ‘‘there are no average home market prices. to imports of rebar produced by Hanbo. significant differences in the production processes used by DSM and KISCO to EP and CEP Product Comparisons produce rebar.’’ See DSM and KISCO’s For the price to the United States, we In accordance with section 771(16) of October 23, 2000, submission at 46 and used, as appropriate, EP or CEP as the Act, all products produced by the 47. In addition, we note that DSM and defined in sections 772(a) and 772(b) of respondents covered by the description KISCO’s U.S. market sales of rebar (by the Act, respectively. Section 772(a) of in the Scope of Investigation section, quantity) are not large percentages of the Act defines EP as the price at which above, and sold in Korea during the POI their total home market sales of rebar. the subject merchandise is first sold by are considered to be foreign like For this reason, we conclude that both the exporter or producer outside the products for purposes of determining companies potentially have the capacity United States to an unaffiliated appropriate product comparisons to to absorb the other’s export market purchaser for exportation to the United U.S. sales. We have relied on three sales, in the event they were to shift States, before the date of importation, or criteria to match U.S. sales of subject export sales to the company with a to an unaffiliated purchaser for merchandise to comparison-market lower margin. In analyzing whether exportation to the United States. sales of the foreign like product or CV: there exists the potential for Section 772(b) of the Act defines CEP Type of steel, yield strength, and size. manipulation of price or production, we as the price at which the subject Where there were no sales of identical note that in addition to DSM’s direct merchandise is first sold inside the merchandise in the home market to ownership of KISCO, DSM has a United States before or after the date of compare to U.S. sales, we compared significant level of indirect ownership importation, by or for the account of the U.S. sales to the next most similar of KISCO through the Chang family, producer or exporter of the foreign like product on the basis of the which founded both DSM and KISCO. merchandise, or by a seller affiliated characteristics listed above. Concerning the extent to which DSM with the producer or exporter, to an and KISCO have shared managerial unaffiliated purchaser, as adjusted Collapsing employees and board members, we note under subsections 772(c) and (d) of the Section 771(33)(E) of the Act provides that two of KISCO’s current senior Act. that ‘‘affiliated persons’’ include ‘‘any managers are former senior managers at For DSM/KISCO, we calculated EP person directly or indirectly owning, DSM, and that one of DSM’s current and CEP, as appropriate, based on the controlling, or holding with power to senior managers was a former director at packed prices charged to the first vote, 5 percent or more of the KISCO. Lastly, we note that DSM and unaffiliated customer in the United outstanding voting stock or shares of KISCO have intertwined operations States. During the POI, DSM/KISCO any organization and such because both companies sold a small made both EP and CEP transactions. We
VerDate 11
calculated an EP for sales where DSM/ expenses (commissions and credit costs) these affiliated party sales satisfied the KISCO sold the merchandise directly to and indirect selling expenses. We arm’s-length test, we used them in our unaffiliated U.S. customers and where adjusted the reported credit expense to analysis. Sales to affiliated customers in DSM/KISCO sold the merchandise to reflect a more accurate shipping period. the home market which were not made unaffiliated Korean companies, with See Preliminary Calculation at arm’s-length prices were excluded knowledge that these companies in turn Memorandum. Finally, in accordance from our analysis because we sold the merchandise to U.S. customers. with section 772(d)(3) of the Act, we considered them to be outside the We also calculated an EP for sales to made a deduction for CEP profit. ordinary course of trade. See 19 CFR PSM,3 an affiliated Korean company, 351.102. NV who in turn sold the merchandise to To test whether these sales were made U.S. customers. We calculated a CEP for A. Selection of Comparison Market at arm’s-length prices, we compared on sales where DSM/KISCO sold the a model-specific basis the starting prices Section 773(a)(1) of the Act directs of sales to affiliated and unaffiliated merchandise to its U.S. affiliate, that NV be based on the price at which Dongkuk International Inc. (DKA), who customers net of all discounts and the foreign like product is sold in the rebates, movement charges, direct then resold the merchandise to home market, provided that the unaffiliated U.S. customers. We also selling expenses, commissions, and merchandise is sold in sufficient home market packing. Where, for the calculated a CEP for sales made by quantities (or value, if quantity is DSM/KISCO to an affiliated home tested models of subject merchandise, inappropriate) and that there is no prices to the affiliated party were on market company, Dongkuk Industries particular market situation that prevents Co. Ltd. (DKI), who in turn sold the average 99.5 percent or more of the a proper comparison with the EP or price to the unaffiliated parties, we merchandise to DKA, who then sold the CEP. The statute contemplates that merchandise to unaffiliated U.S. determined that sales made to the quantities (or value) will normally be affiliated party were at arm’s-length. See customers. considered insufficient if they are less We calculated EP in accordance with 19 CFR 351.403(c) and 62 FR at 27355, than five percent of the aggregate Preamble—Department’s Final section 772(c)(1)(B) of the Act, by quantity (or value) of sales of the subject adding, where applicable, to the starting Antidumping Regulations (May 19, merchandise to the United States. 1997). price an amount for duty drawback. We For this investigation, we found that also deducted from the starting price, DSM/KISCO has a viable home market A. COP Analysis where applicable, amounts for discounts of rebar. The respondents submitted On June 28, 2000, the petitioner and rebates. We made deductions, home market sales data for purposes of alleged that sales of rebar in the home where applicable, from the starting price the calculation of NV. market of Korea were made at prices for movement expenses in accordance In deriving NV, we made adjustments below the fully absorbed COP, and with section 772(c)(2)(A) of the Act. as detailed in the Calculation of NV accordingly, requested that the These include, where appropriate, Based on Home Market Prices and Department conduct a country-wide foreign inland freight, international Calculation of NV Based on CV, sections sales-below-COP investigation. Based freight, foreign and U.S. brokerage and below. upon the comparison of the adjusted handling charges, insurance, U.S. duties prices from the petition for the foreign and U.S. inland freight. We adjusted the B. Affiliated-Party Transactions and Arm’s-Length Test like product to its COP, and in reported credit expense to reflect a more accordance with section 773(b)(2)(A)(i) accurate shipping period. See During the POI, DSM sold a small of the Act, we found reasonable grounds Calculation Memorandum of the amount of rebar to KISCO, who then to believe or suspect that sales of rebar Preliminary Determination for the resold the merchandise to unaffiliated manufactured in Korea were made at Investigation of Dongkuk Steel Mill Co., home market customers. Similarly, prices below the COP. See Initiation Ltd., and Korea Iron & Steel Co., Ltd., KISCO sold a small amount of rebar to Notice. As a result, the Department has January 16, 2001 (Preliminary DSM, who then resold the merchandise conducted an investigation to determine Calculation Memorandum). to unaffiliated home market customers. whether DSM/KISCO made sales in the We calculated CEP, in accordance Since we have collapsed these two home market at prices below its COP with section 772(c)(2)(A) of the Act, by companies into a single entity, we during the POI within the meaning of adding, where applicable, to the starting requested that DSM and KISCO remove section 773(b) of the Act. We conducted price an amount for duty drawback. We these sales, which we considered to be the COP analysis described below. also deducted from the starting price, inter-company sales, from their home 1. Calculation of COP. In accordance where applicable, amounts for discounts market sales database. with section 773(b)(3) of the Act, we and rebates, and movement expenses During the POI, DSM/KISCO also had calculated a weighted-average COP from the starting price. Movement home market sales to other affiliated based on the sum of the cost of materials expenses include, where appropriate, companies. Both DSM and KISCO had and fabrication for the foreign like foreign inland freight, international home market sales to DKI, an affiliated product, plus amounts for the home freight, foreign and U.S. brokerage and Korean company that consumed rebar in market general and administrative handling charges, insurance, U.S. its construction division, while KISCO (G&A) expenses and interest expenses. duties, and U.S. inland freight. In had home market sales to PSM, an We relied on the COP data submitted accordance with section 772(d)(1) of the affiliated home market company that by DSM and KISCO in their cost Act, we deducted from the starting price also consumed rebar during the POI. See questionnaire responses, except, as those selling expenses associated with DSM/KISCO’s September 18, 2000, noted below, in specific instances where economic activities occurring in the section A response at 3. We applied the the submitted costs were not United States, including direct selling arm’s-length test to sales from DSM/ appropriately quantified or valued. KISCO to these affiliated companies by Since we collapsed DSM and KISCO, 3 Although the Department granted DSM/KISCO its exclusion request concerning its U.S. sales comparing them to sales of identical and are treating them as a single entity through PSM, DSM/KISCO reported these sales in merchandise from DSM/KISCO to for the purposes of this antidumping its U.S. sales database. unaffiliated home market customers. If investigation, we merged their
VerDate 11
separately reported cost databases into a because we determined that the below- models of rebar for which we could not single, combined cost database by cost sales were not made in ‘‘substantial determine the NV based on comparison- weight-averaging DSM and KISCO’s quantities.’’ Where 20 percent or more market sales, either because there were individually reported costs. We used the of a respondent’s sales of a given no sales of a comparable product or all combined costs in our dumping product during the POI were at prices sales of the comparison products failed analysis. See Preliminary Calculation less than the COP, we determined such the COP test, we based NV on CV. Since Memorandum. sales to have been made in ‘‘substantial there were contemporaneous home DSM. We adjusted DSM’s G&A quantities’’ within an extended period market sales of identical merchandise expense ratio to exclude gain on of time in accordance with section for all U.S. market EP and CEP sales, we disposal of land, freight revenue, gain 773(b)(2)(B) or the Act. In such cases, did not resort to CV in this on equity method investments and gain because we compared prices to POI investigation. on insurance settlement and to include average costs, we also determined that 3. Level of Trade (LOT)/CEP Offset. In donation expenses in the calculation of such sales were not made at prices that accordance with section 773(a)(1)(B) of the G&A expense ratio. would permit recovery of all costs the Act, to the extent practicable, we In addition, we adjusted DSM’s within a reasonable period of time, in determine NV based on sales in the financial expense ratio to exclude the accordance with section 773(b)(2)(D) of comparison market at the same LOT as long-term portion of exchange gains and the Act. Therefore, we disregarded the the EP or CEP transaction. The NV LOT losses generated by foreign currency below-cost sales. is that of the starting-price sales in the denominated debt. See Memorandum We found that, for certain models of comparison market or, when NV is from Robert Greger, dated January 16, rebar, more than 20 percent of the home based on CV, that of the sales from 2001. market sales by DSM/KISCO were made which we derive SG&A expenses and within an extended period of time at KISCO profit. For EP sales, the U.S. LOT is also prices less than the COP. Further, the the level of the starting-price sale, We adjusted KISCO’s G&A expense prices did not provide for the recovery which is usually from exporter to ratio to: (1) Exclude the ‘‘non-operating of costs within a reasonable period of importer. For CEP transactions, it is the income from the gain on equity method time. We therefore disregarded these level of the constructed sale from the valuation,’’ from the miscellaneous below-cost sales and used the remaining exporter to the importer. gains section of KISCO’s financial sales as the basis for determining NV, in To determine whether NV sales are at statement; and (2) included donation accordance with section 773(b)(1) of the a different LOT than EP or CEP expenses in the calculation of the G&A Act. expense ratio. 1. Calculation of NV Based on Home transactions, we examine stages in the Further, we adjusted KISCO’s Market Prices. We determined price- marketing process and selling functions financial expense ratio to exclude the based NVs for DSM/KISCO as follows. along the chain of distribution between long-term portion of exchange gains and We made adjustments for any the producer and the unaffiliated losses generated by foreign currency differences in packing, and we deducted customer. If the comparison market denominated debt. See Memorandum movement expenses pursuant to section sales are at a different LOT and the from Michael Harrison, dated January 773(a)(6)(B)(ii) of the Act. In addition, difference affects price comparability, as 16, 2001. where applicable, we made adjustments manifested in a pattern of consistent 2. Test of Home Market Sales Prices. for differences in circumstances of sale price differences between the sales on We compared the adjusted weighted- (COS) pursuant to section which NV is based and comparison average COP to the home market sales 773(a)(6)(C)(iii) of the Act. We also market sales at the LOT of the export of the foreign like product, as required made adjustments, pursuant to 19 CFR transaction, we make a LOT adjustment under section 773(b) of the Act, in order 351.410(e), for indirect selling expenses under section 773(a)(7)(A) of the Act. to determine whether these sales had incurred on comparison-market or U.S. For CEP sales, if the NV level is more been made at prices below the COP sales where commissions were granted remote from the factory than the CEP within an extended period of time (i.e., on sales in one market but not in the level and there is no basis for a period of one year) in substantial other (the commission offset). determining whether the difference in quantities 4 and whether such prices We based home market prices on the the levels between NV and CEP affects were sufficient to permit the recovery of packed prices to unaffiliated purchasers price comparability, we adjust NV all costs within a reasonable period of in Korea. We adjusted, where under section 773(a)(7)(B) of the Act time. applicable, the starting price for (the CEP-offset provision). See Notice of On a model-specific basis, we discounts and rebates and movement Final Determination of Sales at Less compared the revised COP to the home expenses (foreign inland freight and Than Fair Value: Certain Cut-to-Length market prices, less any applicable warehousing). We also made COS Carbon Steel Plate from South Africa, discounts and rebates, movement adjustments, where applicable, by 62 FR 61731 (November 19, 1997). charges, selling expenses, commissions, deducting direct selling expenses In implementing these principles in and packing. incurred for home market sales (credit this investigation, we obtained 3. Results of the COP Test. Pursuant expense and warranty). For comparisons information from the respondents about to section 773(b)(2)(C) of the Act, where made to EP sales, we made COS the marketing stages involved in the less than 20 percent of a respondent’s adjustments by adding U.S. direct reported U.S. and home market sales, sales of a given product were at prices selling expenses. For comparisons made including a description of the selling less than the COP, we did not disregard to CEP sales, we did not add U.S. direct activities performed by the respondents any below-cost sales of that product selling expenses. No other adjustments for each channel of distribution. In to NV were claimed or allowed. identifying LOTs for EP and home 4 In accordance with section 773(b)(2)(C)(i) of the 2. Calculation of NV Based on CV. market sales we considered the selling Act, we determined that sales made below the COP Section 773(a)(4) of the Act provides functions reflected in the starting price were made in substantial quantities if the volume of such sales represented 20 percent or more of the that, where NV cannot be based on before any adjustments. For CEP sales, volume of sales under consideration for the comparison-market sales, NV may be we considered only the selling activities determination of NV. based on CV. Accordingly, for those reflected in the price after the deduction
VerDate 11
of expenses pursuant to section 772(d) LOT Memorandum. We then compared Suspension of Liquidation of the Act. LOT1 (the LOT for EP sales) to the home In accordance with section 733(d) of In this investigation, DSM/KISCO market LOT and found that EP sales are the Act, we are directing the U.S. reported that it sold subject provided at a different LOT than the Customs Service to suspend liquidation merchandise to three types of customers home market sales. We also compared of all entries of rebar from Korea that are (distributors, end-users, and government LOT2 (the LOT for CEP sales) to the entered, or withdrawn from warehouse, entities) in the home market. Further, it home market and found that CEP sales for consumption on or after the date of indicated that, for each of the two are provided at the same LOT as the publication of this notice in the Federal originally reported channels of home market transactions. Thus, no Register. In the case of rebar produced distribution, it provided the same types LOT adjustment is warranted for CEP by Hanbo, because of our preliminary of selling functions (market research, comparisons. affirmative critical circumstances price negotiations, order processing, finding, and in accordance with section sales calls, interactions with customers, Section 773(7)(A)(ii) of the Act states 733(e) of the Act, we are directing the inventory maintenance, technical that the Department will grant a LOT U.S. Customs Service to suspend advice, warranty services, Korean adjustment only ‘‘if the difference in the liquidation of all entries of rebar inland freight, and advertising) at the level of trade is demonstrated to affect produced by Hanbo that are entered, or same levels of intensity for each of the price comparability, based on a pattern withdrawn from warehouse, for three types of customers. Since all three of consistent price differences between consumption on or after the date which types of customers received the same sales at different levels of trade in the is 90 days prior to the date of selling functions, at the same levels of country in which normal value is publication of this notice in the Federal intensity, we determine that there is a determined.’’ Although we find that the Register. We will instruct the Customs single LOT in the home market. See U.S. market LOT1 (EP sales) is different Service to require a cash deposit or the Memorandum from Ronald Trentham to from the home market LOT, we are posting of a bond equal to the weighted- Thomas F. Futtner, Level of Trade unable to calculate ‘‘a pattern of average amount by which the NV Analysis: Dongkuk Steel Mill Co., Ltd. consistent price differences between exceeds the EP or CEP, as indicated in and Korea Iron & Steel Co., Ltd. (LOT sales at different levels of trade in the the chart below. These suspension-of- Memorandum), dated January 16, 2001. country in which normal value is DSM/KISCO also reported that it determined’’ because there is only one liquidation instructions will remain in made EP and CEP sales of subject LOT in the home market. Thus, in this effect until further notice. The merchandise to three types of customers instance, we have also not granted weighted-average dumping margins are (Korean trading companies, U.S. DSM/KISCO a LOT adjustment to NV as follows: distributors, and U.S. end-users) for EP comparisons. Margin through four channels of distribution in Section 773(a)(7)(B) of the Act (percent) the U.S. market. The four channels are provides for a CEP offset to NV when as follows: (1) sales from DSM directly NV is established at a more advanced Manufacturer/exporter: to unaffiliated U.S. distributors and end- Dongkuk Steel Mill Co., Ltd/ LOT than the LOT of CEP. Since, in this Korea Iron & Steel Co., Ltd 21.70 users, (2) sales from DSM to unaffiliated instance, we have found that the U.S. Korean trading companies, who then Hanbo Iron & Steel Co., Ltd ... 102.28 market LOT2 (CEP sales) is the same as All Others ...... 21.70 resold the merchandise to U.S. the home market LOT, we have not customers,5 (3) sales from DSM to DKA, granted DSM/KISCO a CEP offset to NV. who then resold the merchandise to Disclosure For a further discussion, see LOT unaffiliated U.S. distributors and end- The Department will disclose Memorandum. users, and (4) sales from DSM to DKI, calculations performed within five days who then resold the merchandise to Currency Conversions of the date of publication of this notice DKA, who then resold the merchandise to the parties of the proceedings in these to unaffiliated U.S. distributors and end- We made currency conversions into investigations in accordance with 19 users. Further, DSM/KISCO indicated U.S. dollars in accordance with section CFR 351.224(b). that it provided certain types of selling 773A of the Act based on exchange rates in effect on the dates of the U.S. sales, International Trade Commission functions (market research, price Notification negotiations, order processing, sales as obtained from the Federal Reserve calls, interactions with customers, Bank (the Department’s preferred source In accordance with section 733(f) of inventory maintenance, technical for exchange rates). the Act, we have notified the ITC of our sales at LTFV determination. If our final advice, warranty services, Korean Verification inland freight, and advertising) for each antidumping determination is of the three types of customers. We In accordance with section 782(i) of affirmative, the ITC will determine examined the types of selling functions the Act, we intend to verify all whether the imports covered by that determination are materially injuring, or provided in each of the four U.S. market information relied upon in making our threaten material injury to, the U.S. channels of distribution, and the level of final determinations. intensity with which each function is industry. The deadline for that ITC provided, and determined, based upon Final Critical Circumstances determination would be the later of 120 the selling functions performed, that EP Determination days after the date of this preliminary sales and CEP sales are sold at two determination or 45 days after the date We will make a final determination different LOTs, specifically, LOT1 for of our final determination. concerning critical circumstances for EP sales, and at a more remote level of Korea when we make our final Public Comment selling activity, LOT2, for CEP sales. See determination regarding sales at LTFV Case briefs for this investigation must in this investigation, which will be no be submitted no later than one week 5 DSM did not report the types of U.S. customers to which the unaffiliated Korean trading companies later than 135 days after the publication after the issuance of the verification resold the subject merchandise. of this notice in the Federal Register. reports. Rebuttal briefs must be filed
VerDate 11
within five days after the deadline for party. If a request for a hearing is made publication of this notice. Requests submission of case briefs. A list of in an investigation, the hearing will should specify the number of authorities used, a table of contents, and tentatively be held two days after the participants and provide a list of the an executive summary of issues should deadline for submission of the rebuttal issues to be discussed. Oral accompany any briefs submitted to the briefs, at the U.S. Department of presentations will be limited to issues Department. Executive summaries Commerce, 14th Street and Constitution raised in the briefs. should be limited to five pages total, Avenue, NW, Washington, DC 20230. In As noted above, the final including footnotes. Further, we would the event that the Department receives determination will be issued 135 days appreciate it if parties submitting requests for hearings from parties to after the date of the publication of the written comments would provide the more than one rebar case, the preliminary determination. Department with an additional copy of Department may schedule a single This determination is issued and the public version of any such hearing to encompass all those cases. published pursuant to sections 733(f) comments on diskette. Parties should confirm by telephone the and 777(i)(1) of the Act. Section 774 of the Act provides that time, date, and place of the hearing 48 Dated: January 16, 2001. the Department will hold a hearing to hours before the scheduled time. Troy H. Cribb, afford interested parties an opportunity Interested parties who wish to request Assistant Secretary for Import to comment on arguments raised in case a hearing, or to participate if one is Administration. or rebuttal briefs, provided that such a requested, must submit a written [FR Doc. 01–2523 Filed 1–29–01; 8:45 am] hearing is requested by any interested request within 30 days of the BILLING CODE 3510–DS–P
VerDate 11
Reader Aids Federal Register Vol. 66, No. 20 Tuesday, January 30, 2001
CUSTOMER SERVICE AND INFORMATION CFR PARTS AFFECTED DURING JANUARY
Federal Register/Code of Federal Regulations At the end of each month, the Office of the Federal Register General Information, indexes and other finding 202–523–5227 publishes separately a List of CFR Sections Affected (LSA), which aids lists parts and sections affected by documents published since the revision date of each title. Laws 523–5227 3 CFR 7402...... 7855 7403...... 7861 Presidential Documents Executive Orders: Administrative Orders: Executive orders and proclamations 523–5227 9066 *See Proc. Presidential Determinations The United States Government Manual 523–5227 7395) ...... 7347 No. 2001–05 of 12543 (continued by December 15, Other Services Notice of January 4, 2000 ...... 223 Electronic and on-line services (voice) 523–4534 2001) ...... 1251 No. 2001–06 of Privacy Act Compilation 523–3187 12544 (continued by December 15, Public Laws Update Service (numbers, dates, etc.) 523–6641 Notice of January 4, 2000 ...... 225 TTY for the deaf-and-hard-of-hearing 523–5229 2001) ...... 1251 No. 2001–07 of 12640 (revoked by EO December 19, 13187) ...... 3857 ELECTRONIC RESEARCH 2000 ...... 1013 12947 (see Notice of No. 2001–08 of World Wide Web January 19, 2001)...... 7371 December 27, 13078 (amended by Full text of the daily Federal Register, CFR and other 2000 ...... 1561 EO 13187)...... 3857 publications: No. 2001–09 of 13088 (amended by January 3, 2001 ...... 2193 http://www.access.gpo.gov/nara EO 13192)...... 7379 Memorandums: Federal Register information and research tools, including Public 13099 (see Notice of Memorandum of March Inspection List, indexes, and links to GPO Access: January 19, 2001)...... 7371 3, 2000 ...... 3851 13111 (amended by Notices: http://www.nara.gov/fedreg EO 13188)...... 5419 January 4, 2001...... 1251 E-mail 13121 (see EO Notice of January 19, 13192) ...... 7379 PENS (Public Law Electronic Notification Service) is an E-mail 2000 (see Notice of 13178 (amended by service for notification of recently enacted Public Laws. To January 19, 2001)...... 7371 EO 13196)...... 7395 subscribe, send E-mail to Notice of January 19, 13184...... 697 2001 ...... 7371 [email protected] 13185...... 701 with the text message: 13186...... 3853 5 CFR 13187...... 3857 subscribe PUBLAWS-L your name 330...... 6427 13188...... 5419 537...... 2790 Use [email protected] only to subscribe or unsubscribe to 13189...... 5421 731...... 7863 PENS. We cannot respond to specific inquiries. 13190...... 5424 792...... 705 Reference questions. Send questions and comments about the 13191...... 7271 2604...... 3439 13192...... 7379 Federal Register system to: Proposed Rules: 13193...... 7387 575...... 5491 [email protected] 13194...... 7389 The Federal Register staff cannot interpret specific documents or 13195...... 7391 7 CFR regulations. 13196...... 7395 2...... 8149 13197...... 7853 54...... 1190 FEDERAL REGISTER PAGES AND DATE, JANUARY Proclamations: 59...... 8151 3443 (see Proc. 215...... 2195 1–226...... 2 7392) ...... 7335 225...... 2195 227–704...... 3 7350 (see proc. 226...... 2195 705–1012...... 4 7400) ...... 7373 245...... 2195 1013–1252...... 5 7351 (see proc. 271...... 2795 1253–1560...... 8 7400) ...... 7373 272...... 4438 1561–1806...... 9 7388 (see proc. 273...... 4438 1807–2192...... 10 7400) ...... 7373 278...... 2795 2193–2794...... 11 7389...... 703 301...... 6429 2795–3438...... 12 7390...... 5417 302...... 1015 3439–3852...... 16 7391...... 7205 760...... 2800 3853–4606...... 17 7392...... 7335 761...... 7565 4607–5420...... 18 7393...... 7339 762...... 7565 5421–6426...... 19 7394...... 7343 770...... 1563 6427–7372...... 22 7395...... 7347 905...... 227 7373–7564...... 23 7396...... 7351 930...... 229, 232 7565–7702...... 24 7397...... 7354 944...... 227 7703–7862...... 25 7398...... 7359 989...... 705 7863–8076...... 26 7399...... 7364 1436...... 4607 8077–8150...... 29 7400...... 7373 1446...... 1807 8151–8356...... 30 7401...... 7375 1823...... 1563
VerDate 11-MAY-2000 19:59 Jan 29, 2001 Jkt 194001 PO 00000 Frm 00001 Fmt 4712 Sfmt 4712 E:\FR\FM\30JACU.LOC pfrm11 PsN: 30JACU ii Federal Register / Vol. 66, No. 20 / Tuesday, January 30, 2001 / Reader Aids
1901...... 7565 533...... 2052 19 CFR 25 CFR 1902...... 1563 748...... 8152 12...... 7399 15...... 7068 1910...... 1570 915...... 8262 103...... 3861 1941...... 1570, 7565 917...... 8262 20 CFR 114...... 7068 1943...... 7565 925...... 8262 401...... 2805 115...... 7068 1945...... 7565 930...... 8262 402...... 2805 162...... 7068 1951...... 1563 931...... 8262 403...... 2805 166...... 7068 1955...... 7565 932...... 8262 645...... 269 151...... 3452 1956...... 1563 933...... 8262 655...... 1375 170...... 1576 1965...... 7565 956...... 8262 Proposed Rules: Proposed Rules: 966...... 8262 26 CFR 369...... 314 300...... 6489 1501...... 257 1 ...... 268, 279, 280, 713, 715, 301...... 3505 1780...... 709 404...... 1059, 5494 416...... 1059, 5494 723, 1034, 1038, 1040, 319...... 6489 Proposed Rules: 422...... 5494 1837, 2215, 2219, 2241, 929...... 2838 1...... 8178 2252, 2256, 2811, 2817, 930...... 1909 7...... 8178 21 CFR 4661 955...... 1915 23...... 8178 7...... 2256, 2821 10...... 6466 1721...... 1604 225...... 307 20...... 1040 14...... 1257, 6466 1501...... 307 25...... 1040 8 CFR 16...... 6466 53...... 2144 13 CFR 120...... 6138 3...... 6436, 8149 54...... 1378, 1843 178...... 6469 103...... 7863 108...... 7218 301 ...... 725, 2144, 2257, 2261, 201...... 7864 208...... 7863 126...... 4643 2817 207...... 5447 210...... 7863 602 ...... 280, 2144, 2219, 2241, 14 CFR 291...... 4076 212 ...... 235, 1017, 3440, 6436, 2252, 4661 7863 25...... 261, 8162 314...... 1832 39...... 1, 2, 5, 7, 263, 264, 265, 510...... 7577 Proposed Rules: 235...... 7863 1.....66, 76, 315, 319, 747, 748, 267, 1031, 1253, 1255, 520...... 7579 240...... 6436 1066, 1923, 2373, 2852, 1574, 1827, 1829, 2212, 522...... 711 241...... 7863 2854, 3888, 3903, 3916, 3448, 3859, 3861, 4646, 524...... 712, 7577 244...... 7863 3920, 3924, 3925, 3928, 4648, 4649, 4651, 4654, 558...... 1832 245a...... 7863 3954, 4738, 4746, 4751, 4656, 4659, 6446, 6449, 606...... 1834 Proposed Rules: 5754 6451, 6453, 6454, 7568, 640...... 1834 212...... 1053 7...... 2856 7575, 7576, 8077, 8079, 807...... 5447 31...... 3925, 3956 8081, 8082, 8085, 8165, 1271...... 5447 9 CFR 53...... 2173 8167 1306...... 2214 1...... 6492 54 ...... 1421, 1435, 1437, 3928 71 ...... 1033, 1831, 2214, 2801, Proposed Rules: 2...... 236 301 ...... 77, 749, 2173, 2373, 6456, 6457, 6458, 8168, 1...... 6503 3...... 239 2854, 3959, 7867 8170, 8171, 8172, 8173 14...... 1276 331...... 2206 601...... 3954 91...... 1002 381...... 1750, 2206 16...... 3523 93...... 1002 441...... 1750 20...... 4688 27 CFR 97...... 2802, 2803 192...... 4706 Proposed Rules: 121...... 1002 312...... 4688 17...... 5469 317...... 4970 135...... 1002 592...... 4706 18...... 5469 381...... 4970, 8178 405...... 2176 601...... 4688 20...... 5472 406...... 2176 807...... 3523 21...... 5472 10 CFR 22...... 5472 Proposed Rules: 1271...... 1508 25...... 5477 5...... 708 23...... 6493 30...... 5480 34...... 1573 39...57, 59, 61, 64, 1054, 1057, 22 CFR 36...... 1573 1271, 1273, 1607, 1609, 41...... 1033 28 CFR 39...... 1573 1612, 1917, 1919, 3382, 72 ...... 1573, 3444, 8149 Proposed Rules: Ch. VIII...... 1259 3511, 3515, 3516, 3518, 41...... 1064 50...... 5427 3521, 6495, 6497, 6498, 16...... 6470 150...... 5441 25...... 6471 6500, 7433, 8184 23 CFR 430 ...... 3314, 4474, 7170 71 ...... 1921, 2850, 3886, 3887, 655...... 1446 29 CFR 431...... 3336 7435 490...... 2207 777...... 8089 4...... 5328 719...... 4616 15 CFR 940...... 1446 1904...... 5916 830...... 1810 1910...... 5318 335...... 6459 24 CFR 1040...... 4628 340...... 6459 1926...... 5196 1042...... 4628 740...... 5443, 6459 5...... 6218, 8174 1952...... 5916 1044...... 4629 742...... 5443 15...... 6964, 8175 1956...... 2265 Proposed Rules: 748...... 5443, 6459 92...... 6218, 8174 2590...... 1378, 8076 50...... 3886 902...... 3450 200...... 6218, 8174 4022...... 2822 430...... 6768 922...... 4268 221...... 5912, 8175 4044...... 2822 236...... 6218, 8174 Proposed Rules: 12 CFR 17 CFR 574...... 6218, 8174 552...... 5481 35...... 2052 1...... 1375 582...... 6218, 8174 2590...... 1421 201...... 2211 140...... 1574 583...... 6218, 8174 4003...... 2857 207...... 2052 239...... 3734 888...... 162 4007...... 2857 225...... 257, 400 240...... 3734 891...... 6218, 8174 4071...... 2857 268...... 7703 270...... 3734 982...... 6218, 8174 303...... 1018 274...... 3734 1003...... 4578, 8176 30 CFR 337...... 1018 Proposed Rules: Proposed Rules: 346...... 2052 18 CFR 203...... 2851 57...... 5526 362...... 1018 381...... 3451 941...... 1008 72...... 5526
VerDate 11-MAY-2000 19:59 Jan 29, 2001 Jkt 194001 PO 00000 Frm 00002 Fmt 4712 Sfmt 4712 E:\FR\FM\30JACU.LOC pfrm11 PsN: 30JACU Federal Register / Vol. 66, No. 20 / Tuesday, January 30, 2001 / Reader Aids iii
256...... 1277 435...... 6850 43 CFR 4...... 2117 870...... 6511 745...... 1206, 1726 3100...... 1883 5...... 2117 914...... 2374 1610...... 1050 3106...... 1883 6...... 2117 931...... 4672 Proposed Rules: 3108...... 1883 7...... 2117 944...... 1616 2...... 2870 3130...... 1883 8...... 2117 948...... 335, 2866 52 ...... 1796, 1925, 1927, 4756, 3160...... 1883 9...... 2117 6524 11...... 2117 31 CFR 3162...... 1883 63...... 1618 3165...... 1883 13...... 2117 501...... 2726 70...... 84, 85 14...... 2117 538...... 2726 112...... 8186 44 CFR 15...... 2117 17...... 2117 540...... 3304 122...... 2960, 5524 64...... 2825 19...... 2117, 2140 545...... 2726 123...... 4768 65...... 1600 136...... 3526 22 ...... 2117, 2140, 5349 Proposed Rules: Proposed Rules: 141...... 3526 23...... 2117 10...... 3276 67...... 1618 143...... 3526 24...... 2117 32 CFR 271...... 85, 86 45 CFR 26...... 2117 27...... 2117 Proposed Rules: 300...... 2380 46...... 3878 28...... 2117 326...... 1280 412 ...... 2960, 5524, 8186 413...... 424 146...... 1378 29...... 2117 303...... 8074 33 CFR 433...... 424 30...... 2136 1310...... 5296 31...... 2117 66...... 8 438...... 424 463...... 424 Proposed Rules: 32...... 2117 95...... 1859 146...... 1421 33...... 2117 100...... 1044, 1580 464...... 424 467...... 424 34...... 2117 117 .....1045, 1262, 1583, 1584, 46 CFR 35...... 2117 1863, 3466, 6474, 7402 471...... 424 745...... 7208 Proposed Rules: 36...... 2117 155...... 3876 66...... 2385 37...... 2117 165...... 6476, 6477 41 CFR 110...... 1283 39...... 2117 177...... 1859 101-6...... 5362 111...... 1283 42 ...... 2117, 2136, 2137, 2139, 323...... 4550 101-17...... 5362 2140 47 CFR Proposed Rules: 101-18...... 5362 43...... 2117 117 ...... 1281, 1923, 6516 101-19...... 5362 0...... 8090 44...... 2117 167...... 6517 101-20...... 5362 1 ...... 33, 2322, 3499, 6483 47...... 2117 207...... 7436 101-33...... 5362 2...... 7402, 7579 48...... 2117 15...... 7402, 7579 49...... 2117 34 CFR 101-47...... 5362 102-71...... 5362 51...... 2335 50...... 2117 300...... 1474 102-72...... 5362 64...... 2322, 7865 52...... 2117, 5349 361...... 4380, 7250 102-73...... 5362 68...... 2322, 7579 53...... 2140 606...... 1262 102-74...... 5362 73 ...... 737, 2336, 3883, 3884, Ch. 3 ...... 4220 7589, 7865, 8149, 8176 36 CFR 102-75...... 5362 Proposed Rules: 102-76...... 5362 74...... 3884 2...... 7166 7...... 6519 102-77...... 5362 76...... 7410 7...... 7166 219...... 1864 102-78...... 5362 90...... 33 8...... 2752 212...... 3206 102-79...... 5362 301...... 4771 10...... 7166 261...... 3206 102-80...... 5362 Proposed Rules: 11...... 7166 294...... 3244 102-81...... 5362 1 ...... 86, 341, 1622 12...... 7166 295...... 3206 102-82...... 5362 2 ...... 341, 7438, 7443 39...... 7166 Proposed Rules: 301...... 6482 3...... 1283 52...... 2752 7...... 1069, 6519 5...... 1283 931...... 4616 42 CFR 13...... 8149 970...... 4616 38 CFR 8...... 4076 20...... 8149 Proposed Rules: 400...... 6228 22...... 8149 49 CFR 3...... 2376 411...... 856, 3497 24...... 8149 1...... 2827 413 ...... 1599, 3358, 3497 25...... 3960 40...... 3884, 7590 40 CFR 416...... 4674 26...... 8149 213...... 1894 9...... 3770, 6481, 422...... 3358 27...... 8149 229...... 4104 31...... 3782 424...... 856 36...... 7725, 7867 231...... 4104 35 ...... 1726, 2823, 3782 430...... 6228 54...... 7725, 7867 232...... 4104 52 ...... 8, 586, 634, 666, 730, 431...... 2490, 6228 61...... 7725 390...... 2756 1046, 1866, 1868, 1871 433...... 2490 64 ...... 1622, 7725, 8093 575...... 3388 63 ...... 1263, 1584, 3180, 6922 434...... 6228 65...... 7725 1247...... 1051 69...... 5002 435 ...... 2316, 2490, 6228 69...... 7725, 7867 Proposed Rules: 70...... 16 436...... 2490 73 ...... 2395, 2396, 7606, 7607, 10...... 1294 80...... 5002, 8089 438...... 6228 7872 171...... 6942 81...... 1268 440...... 6228 80...... 8149 172...... 6942 82...... 1462 441...... 7148 87...... 8149 173...... 6942 86...... 5002 447...... 3148, 6228 90 ...... 86, 7443, 8149 174...... 2870 136...... 3466 457...... 2490 95...... 8149 177...... 2870, 6942 141 ...... 2273, 3466, 3466, 6922 482...... 4674 97...... 8149 178...... 6942 142...... 3770, 6922 483...... 7148 101...... 7607, 8149 214...... 1930 143...... 3466 485...... 4674 229...... 136 180 ...... 296, 298, 1242, 1592, 489...... 1599, 3497 48 CFR 385...... 2767 1875, 2308 Proposed Rules: Ch. I...... 2116, 2141, 5352 390...... 2767 232...... 4550 413...... 3377 1...... 1117, 2140 398...... 2767 271....22, 23, 28, 33, 733, 8090 422...... 7593 2...... 2117 534...... 6527 372...... 4500 489...... 7593 3...... 2117 554...... 6535
VerDate 11-MAY-2000 19:59 Jan 29, 2001 Jkt 194001 PO 00000 Frm 00003 Fmt 4712 Sfmt 4712 E:\FR\FM\30JACU.LOC pfrm11 PsN: 30JACU iv Federal Register / Vol. 66, No. 20 / Tuesday, January 30, 2001 / Reader Aids
567...... 90 50 CFR 229...... 2336, 5489 Proposed Rules: 17 ...... 345, 1295, 1628, 1631, 571...... 968, 3527 13...... 6483 600...... 2338 622...... 7591 1633, 3964, 4782, 4783 573...... 6535 17...... 2828, 6483 576...... 6535 635...... 55, 1907 216...... 2872 18...... 1901 229...... 6549 591...... 90 648...... 8091 20...... 737, 1052 660...... 2338 648...... 91, 1634 592...... 90 86...... 5282 679 ...... 742, 1375, 3502, 7276, 660...... 1945, 2873 594...... 90 223...... 1601 7327 679...... 3976
VerDate 11-MAY-2000 19:59 Jan 29, 2001 Jkt 194001 PO 00000 Frm 00004 Fmt 4712 Sfmt 4712 E:\FR\FM\30JACU.LOC pfrm11 PsN: 30JACU Federal Register / Vol. 66, No. 20 / Tuesday, January 30, 2001 / Reader Aids v
REMINDERS movement; comments due markets development; Liquid noxious substances The items in this list were by 2-5-01; published 1-5-01 regulatory barriers and obsolete and current editorially compiled as an aid Plant-related quarantine, elimination; correction; hazardous materials in to Federal Register users. domestic: comments due by 2-9-01; bulk; comments due by 2- Inclusion or exclusion from Citrus canker; comments published 1-29-01 6-01; published 11-8-00 this list has no legal due by 2-5-01; published Radio stations; table of Drawbridge operations: significance. 12-7-00 assignments: Florida; comments due by DEFENSE DEPARTMENT Minnesota; comments due 2-6-01; published 12-8-00 by 2-5-01; published 12- Ports and waterways safety: RULES GOING INTO Privacy Act; implementation; 27-00 Macy’s July 4th Fireworks, EFFECT JANUARY 30, comments due by 2-5-01; published 12-5-00 HEALTH AND HUMAN East River, NY; safety 2001 SERVICES DEPARTMENT ENVIRONMENTAL zone; comments due by PROTECTION AGENCY Food and Drug 2-9-01; published 12-26- AGRICULTURE Administration 00 Air pollutants, hazardous; DEPARTMENT Human drugs: national emission standards: Tampa Bay, FL; safety Agricultural Marketing Applications for FDA zone; comments due by Generic Maximum Service approval to market new 2-5-01; published 12-6-00 Achievable Control Livestock mandatory reporting drug; postmarketing Technology (GMACT); TRANSPORTATION program; establishment; reporting requirements; comments due by 2-5-01; DEPARTMENT published 12-1-00 comments due by 2-5-01; published 12-6-00 Federal Aviation COMMERCE DEPARTMENT published 11-7-00 Polyvinyl chloride and Administration HOUSING AND URBAN National Oceanic and copolymers production; Airworthiness directives: DEVELOPMENT Atmospheric Administration comments due by 2-6-01; Airbus; comments due by 2- DEPARTMENT Fishery conservation and published 12-8-00 8-01; published 1-9-01 Civil money penalties; certain management: Air pollution control; new prohibited conduct: Bell; comments due by 2-9- Northeastern United States motor vehicles and engines: 01; published 12-11-00 Triple damage for failure to fisheries— Nonroad large spark ignition engage in loss mitigation; Boeing; comments due by Summer flounder, scup, engines, marine and land- comments due by 2-5-01; 2-5-01; published 12-21- and black sea bass; based recreational published 12-6-00 00 published 1-29-01 engines, and highway INTERIOR DEPARTMENT Eurocopter France; ENVIRONMENTAL motorcycles; emissions comments due by 2-6-01; Fish and Wildlife Service PROTECTION AGENCY control; comments due by published 12-8-00 Endangered and threatened Air pollution; standards of 2-5-01; published 12-7-00 Pilatus Aircraft Ltd.; species: performance for new Air programs; State authority comments due by 2-5-01; stationary sources: delegations: Critical habitat published 1-2-01 designations— Commercial and industrial Oklahoma; comments due SOCATA-Groupe San Bernardino kangaroo solid waste incineration by 2-8-01; published 1-9- AEROSPATIALE; rat; comments due by units; published 12-1-00 01 comments due by 2-5-01; 2-6-01; published 12-8- SECURITIES AND Air quality implementation published 1-2-01 00 EXCHANGE COMMISSION plans; approval and Turbomeca S.A.; comments Yellow-billed cuckoo; status Securities: promulgation; various due by 2-5-01; published review; comments due by Order routing and execution States: 12-6-00 2-8-01; published 1-9-01 practices; disclosure; California; comments due by Airworthiness standards: JUSTICE DEPARTMENT published 12-1-00 2-9-01; published 1-10-01 Special conditions— Drug Enforcement TRANSPORTATION Pennsylvania; comments Administration Eurocopter France Model DEPARTMENT due by 2-9-01; published Schedules of controlled EC-130 helicopters; Federal Aviation 1-10-01 substances: comments due by 2-5- Administration FEDERAL 01; published 12-20-00 Dichloralphenazone; Airworthiness directives: COMMUNICATIONS Commercial space COMMISSION placement into List IV; Boeing; published 12-26-00 comments due by 2-9-01; transportation: Digital television stations; table published 12-11-00 Civil penalty actions; of assignments: COMMENTS DUE NEXT LABOR DEPARTMENT comments due by 2-9-01; Montana; comments due by published 1-10-01 WEEK Occupational Safety and 2-5-01; published 12-18- TRANSPORTATION 00 Health Administration AGRICULTURE DEPARTMENT Radio services; special: Safety and health standards: DEPARTMENT Research and Special Maritime services— Cotton dust; occupational Agricultural Marketing exposure; comments due Programs Administration Service Automated Maritime by 2-5-01; published 12-7- Pipeline safety: Milk marketing orders: Telecommunications 00 Hazardous liquid Systems and high seas Northeast et al.; comments transportation— public coast stations; NATIONAL AERONAUTICS due by 2-5-01; published comments due by 2-6- AND SPACE Hazardous liquid and 12-7-00 01; published 12-8-00 ADMINISTRATION carbon dioxide Onions (Vidalia) grown in— Acquisition regulations: pipelines; corrosion Radio spectrum, efficient use control standards; Georgia; comments due by promotion; secondary Emergency medical services 2-9-01; published 1-10-01 and evacuation; comments due by 2-6- markets development; 01; published 12-8-00 AGRICULTURE regulatory barriers comments due by 2-5-01; DEPARTMENT elimination; comments due published 12-7-00 TREASURY DEPARTMENT Animal and Plant Health by 2-9-01; published 12-26- TRANSPORTATION Comptroller of the Currency Inspection Service 00 DEPARTMENT Corporate activities: District of Columbia; plants Radio spectrum, efficient use Coast Guard Federal branches and and plant products; promotion; secondary Bulk dangerous cargoes: agencies; operating
VerDate 11-MAY-2000 19:59 Jan 29, 2001 Jkt 194001 PO 00000 Frm 00005 Fmt 4712 Sfmt 4711 E:\FR\FM\30JACU.LOC pfrm11 PsN: 30JACU vi Federal Register / Vol. 66, No. 20 / Tuesday, January 30, 2001 / Reader Aids
subsidiaries; comments VETERANS AFFAIRS public law during the next into law during the next due by 2-5-01; published DEPARTMENT session of Congress. session of Congress. 12-5-00 Loan guaranty: A cumulative List of Public National banks; fiduciary Advertising and solicitation Laws was published in Part II This service is strictly for E- activities; comments due by requirements; comments of the Federal Register on mail notification of new laws. 2-5-01; published 12-5-00 due by 2-6-01; published January 16, 2001. The text of laws is not TREASURY DEPARTMENT 12-8-00 available through this service. Thrift Supervision Office PENS cannot respond to Savings and loan holding LIST OF PUBLIC LAWS Public Laws Electronic specific inquiries sent to this companies: Notification Service address. Significant transactions or Note: The List of Public Laws (PENS) activities and capital for the 106th Congress, adequacy review; Second Session has been comments due by 2-9-01; completed and will resume Note: PENS will resume published 12-12-00 when bills are enacted into service when bills are enacted
VerDate 11-MAY-2000 19:59 Jan 29, 2001 Jkt 194001 PO 00000 Frm 00006 Fmt 4712 Sfmt 4711 E:\FR\FM\30JACU.LOC pfrm11 PsN: 30JACU