6–27–02 Thursday Vol. 67 No. 124 June 27, 2002 Pages 43217–43524
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1 II Federal Register / Vol. 67, No. 124 / Thursday, June 27, 2002
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2 III
Contents Federal Register Vol. 67, No. 124
Thursday, June 27, 2002
Agriculture Department Customs Service See Food and Nutrition Service RULES See Food Safety and Inspection Service Merchandise, special classes: See Forest Service Import restrictions— NOTICES Peru; archaeological and ethnological materials; Agency information collection activities: correction, 43247 Submission for OMB review; comment request, 43270– 43271 Defense Department See Air Force Department RULES Air Force Department Federal Acquisition Regulation (FAR): NOTICES Claim definition and termination terms, 43512–43514 Privacy Act: Federal Supply Schedule order disputes and incidental Systems of records, 43294 items, 43513–43516 Introduction, 43511–43513 Alcohol, Tobacco and Firearms Bureau Relocation costs, 43515–43520 PROPOSED RULES Small Entity Compliance Guide, 43520–43521 Alcoholic beverages: Technical amendments, 43519–43521 Malt beverages; labeling and advertising, 43495–43509 PROPOSED RULES Federal Acquisition Regulation (FAR): Individuals with disabilities; Section 508 contract Antitrust Division clauses, 43523–43524 NOTICES NOTICES National cooperative research notifications: Arms sales notification; transmittal letter, etc., 43286–43290 3M Co. et al., 43342–43343 Federal Acquisition Regulation (FAR): J Consortium, Inc., 43343 Agency information collection activities— PKI Forum, Inc., 43343 Submission for OMB review; comment request, 43290– Wireless Application Protocol Forum, Ltd., 43343–43344 43291 Meetings: Actuaries Retirement Board, 43291 Arts and Humanities, National Foundation Education Benefits Board of Actuaries, 43291 See National Foundation on the Arts and the Humanities Medicare-Eligible Retiree Health Care Board of Actuaries, 43291 Centers for Disease Control and Prevention Privacy Act: NOTICES Systems of records, 43291–43294 Agency information collection activities: Proposed collection; comment request, 43321–43322 Drug Enforcement Administration Committees; establishment, renewal, termination, etc.: NOTICES Diabetes Prevention and Control Programs Translation Applications, hearings, determinations, etc.: Advisory Committee; charter renewal, 43322 Mallinckrodt, Inc., 43344 Meetings: Rhodia Chirex America, 43345 Disease, Disability, and Injury Prevention and Control Economic Development Administration Special Emphasis Panels, 43322–43323 NOTICES Trade adjustment assistance eligibility determination Coast Guard petitions: RULES MJM International, Inc., et al., 43276–43277 Drawbridge operations: Florida, 43252–43253 Education Department Navigation and navigable waters: NOTICES Captain of the Port Zones for Hampton Roads and Agency information collection activities: Wilmington, NC, 43252 Proposed collection; comment request, 43294–43295 Submission for OMB review; comment request, 43295– 43296 Commerce Department Grants and cooperative agreements; availability, etc.: See Economic Development Administration Federal Pell Grant, Perkins Loan, Work-Study, See International Trade Administration Supplemental Educational Opportunity Grant, See National Oceanic and Atmospheric Administration Family Education Loan, and William D. Ford Programs— Commodity Futures Trading Commission Federal need analysis methodology for 2003-2004 NOTICES award year; correction, 43388 Agency information collection activities: Jacob K. Javits Gifted and Talented Students Education Proposed collection; comment request, 43285–43286 Program; correction, 43296–43297
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Meetings: MDU Resources Group, Inc., 43302–43303 Foreign Medical Education and Accreditation National Committee, 43297 Federal Maritime Commission NOTICES Energy Department Agreements filed, etc., 43316 See Federal Energy Regulatory Commission Ocean transportation intermediary licenses: NOTICES Air Sea Containers, Inc., et al., 43316–43317 Floodplain and wetlands protection; environmental review Binex Line Corp., et al., 43317 determinations; availability, etc.: Trimex Logistics, Inc., et al., 43317–43318 Los Alamos National Laboratory, NM, 43298–43302 Meetings: Federal Reserve System Environmental Management Site-Specific Advisory RULES Board— Home mortgage disclosure (Regulation C): Oak Ridge Reservation, TN, 43302 Miscellaneous amendments; staff interpretation, 43218– 43227 Environmental Protection Agency Telephone application rule; technical amendment, RULES 43217–43218 Pesticide programs: NOTICES Cyhalofop-butyl; correction, 43255–43256 Banks and bank holding companies: NOTICES Change in bank control, 43318 Pesticide,food, and feed additive petitions:, 43310–43314 Formations, acquisitions, and mergers, 43318 Pesticides; emergency exemptions, etc.: Privacy Act: Carbofuran, 43314–43316 Systems of records, 43318–43320 Federal Aviation Administration Food and Drug Administration RULES RULES Airworthiness directives: Animal drugs, feeds, and related products: CFM International, 43232–43234 Chlortetracycline, 43248–43252 General Electric Co.; correction, 43229–43230 Sponsor name and address changes— MD Helicopters, Inc., 43227–43229 Church & Dwight Co., Inc., 43247–43248 Teledyne Continental Motors, 43230–43232 NOTICES NOTICES Agency information collection activities: Environmental statements; availability, etc.: T.F. Green Airport, RI; scoping meeting, 43382 Proposed collection; comment request, 43323–43324 Meetings: Food additive petitions: RTCA Inc., 43382–43383 Cyanotech Corp., 43324–43325 Passenger facility charges; applications, etc.: Food for human consumption: Snobomish County Airport/Paine Field, WA, 43383 Identity standards deviation; market testing permits— Del Monte Corp., 43325 Federal Communications Commission Iceberg Industries Corp., iceberg water, 43325–43326 RULES Grants and cooperative agreements; availability, etc.: Television broadcasting: Assuring Radiation Protection, 43326–43330 Cable television relay service; eligibility requirements, Reports and guidance documents; availability, etc.: 43257–43263 Prescription drug samples; donations to free clinics; draft PROPOSED RULES guidance, 43330–43331 Radio broadcasting: Providing regulatory submissions in electronic format; Broadcast and cable EEO rules and policies; en banc industry guidance, 43331–43332 hearing, 43265 Veterinary Medicinal Products, International Cooperation on Harmonisation of Technical Requirements for Federal Energy Regulatory Commission Registration— NOTICES Anthelmintics effectiveness; general and specific Electric rate and corporate regulation filings: recommendations, 43332–43333 Mt. Camel Cogen, Inc., et al., 43303–43305 San Diego Gas & Electric Co. et al., 43305 Food and Nutrition Service Hydroelectric applications, 43305–43307 RULES Meetings: Child nutrition programs: Office of Energy Projects staff; site visit to St. Lawrence- Child and Adult Care Program— FDR Power Project, 43307 Strengthen program integrity; legislative reform National Register of Historic Places: implementation, 43447–43494 Programmatic agreement for managing properties; restricted service list— Food Safety and Inspection Service Alabama Power Co., 43307–43309 NOTICES Practice and procedure: Agency information collection activities: Off-the-record communications, 43309 Proposed collection; comment request, 43271–43273 Reports and guidance documents; availability, etc.: Northeast Independent Systems Operator; Seams Forest Service Resolution timeline and report; correction, 43309 NOTICES Applications, hearings, determinations, etc.: Environmental statements; notice of intent: ANR Pipeline Co. et al., 43302 Manti-La Sal National Forest, UT, 43273–43274
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Mt. Hood National Forest, OR, 43274–43276 Polyethylene terephthalate film, sheet, and strip from— Meetings: India and Taiwan, 43340 Resource Advisory Committees— Structural steel beams from— Madera County, 43276 Various countries, 43340 Siskiyou County, 43276 Justice Department General Services Administration See Antitrust Division RULES See Drug Enforcement Administration Federal Acquisition Regulation (FAR): NOTICES Claim definition and termination terms, 43512–43514 Pollution control; consent judgments: Federal Supply Schedule order disputes and incidental Fruit of the Loom, Inc., 43341 items, 43513–43516 Magnan, Henry J., 43341 Introduction, 43511–43513 Senior Executive Service: Relocation costs, 43515–43520 Performance Review Boards; membership, 43341–43342 Small Entity Compliance Guide, 43520–43521 Technical amendments, 43519–43521 Labor Department PROPOSED RULES See Occupational Safety and Health Administration Federal Acquisition Regulation (FAR): Maritime Administration Individuals with disabilities; Section 508 contract clauses, 43523–43524 NOTICES NOTICES Agency information collection activities: Federal Acquisition Regulation (FAR): Submission for OMB review; comment request, 43383– Agency information collection activities— 43384 Submission for OMB review; comment request, 43290– Coastwise trade laws; administrative waivers; deadline, 43291 43384–43385 Merit Systems Protection Board Government Ethics Office NOTICES NOTICES Opportunity to file amicus briefs: Criminal conflict of interest statutes; review, 43321 Abrahamsen, Kevin D. v. Department of Veterans, 43347– Health and Human Services Department 43349 See Centers for Disease Control and Prevention National Aeronautics and Space Administration See Food and Drug Administration RULES See Substance Abuse and Mental Health Services Federal Acquisition Regulation (FAR): Administration Claim definition and termination terms, 43512–43514 NOTICES Federal Supply Schedule order disputes and incidental Meetings: items, 43513–43516 Vital and Health Statistics National Committee, 43321 Introduction, 43511–43513 Interior Department Relocation costs, 43515–43520 See National Indian Gaming Commission Small Entity Compliance Guide, 43520–43521 NOTICES Technical amendments, 43519–43521 Meetings: PROPOSED RULES Delaware & Lehigh National Heritage Corridore Federal Acquisition Regulation (FAR): Commission, 43337 Individuals with disabilities; Section 508 contract clauses, 43523–43524 International Trade Administration NOTICES Federal Acquisition Regulation (FAR): NOTICES Agency information collection activities— Antidumping: Submission for OMB review; comment request, 43290– Folding metal tables and chairs from— 43291 China, 43277–43278 Fresh tomatoes from— National Archives and Records Administration Mexico, 43278–43280 RULES Export trade certificates of review, 43280–43281 Public availability and use: Grants and cooperative agreements; availability, etc.: NARA facilities; addresses and hours, 43254–43255 International Buyers Program; domestic trade shows Technical amendments, 43253–43254 support (FY 2004), 43281–43283 NOTICES Applications, hearings, determinations, etc.: Agency records schedules; availability, 43350–43356 Cold-rolled carbon steel flat products from— Netherlands, 43280 National Foundation on the Arts and the Humanities NOTICES International Trade Commission Meetings: NOTICES Leadership Initiatives Advisory Panel, 43356–43357 Import investigations: Clay target throwing machines and components thereof, National Indian Gaming Commission 43337 RULES Integrated circuits, processes for making same, and Management contract provisions: products containing same, 43338–43340 Minimum internal control standards, 43389–43445
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National Oceanic and Atmospheric Administration Substance Abuse and Mental Health Services PROPOSED RULES Administration Fishery conservation and management: NOTICES Atlantic highly migratory species— Grant and cooperative agreement awards: Atlantic bluefin tuna, 43266–43269 Brigham and Women’s Hospital, Harvard University, Magunuson-Stevens Act provisions— 43333 Domestic fisheries; exempted fishing permit National Families in Action, Inc., 43333–43334 applications, 43265–43266 Grants and cooperative agreements; availability, etc.: NOTICES Mental Health Services Center— Meetings: Targeted Capacity Expansion; National Technical Gulf of Mexico Fishery Management Council, 43283 Assistance Center for Mental Health Services Permits: Needs of Older Adults, 43334–43335 Marine mammals, 43283–43285 National Center for Child Traumatic Stress, 43335–43337
Nuclear Regulatory Commission Transportation Department NOTICES See Coast Guard Agency information collection activities: See Federal Aviation Administration Proposed collection; comment request, 43357 See Maritime Administration Submission for OMB review; comment request, 43357– See Transportation Statistics Bureau 43358 Applications, hearings, determinations, etc.: Transportation Statistics Bureau Foster Wheeler Environmental Corp., 43358–43359 NOTICES Grants and cooperative agreements; availability, etc.: Occupational Safety and Health Administration Transportation Statistics Research Program, 43385–43386 NOTICES Agency information collection activities: Treasury Department Proposed collection; comment request, 43345–43347 See Alcohol, Tobacco and Firearms Bureau See Customs Service Public Health Service See Centers for Disease Control and Prevention Veterans Affairs Department See Food and Drug Administration NOTICES See Substance Abuse and Mental Health Services Agency information collection activities: Administration Submission for OMB review; comment request, 43386– 43387 Railroad Retirement Board NOTICES Agency information collection activities: Proposed collection; comment request, 43359–43360 Separate Parts In This Issue
Securities and Exchange Commission Part II RULES Interior Department, National Indian Gaming Commission, Securities: 43389–43445 Security futures products trading; application of Federal securities laws provisions, 43234–43247 Part III NOTICES Agriculture Department, Food and Nutrition Service, Meetings; Sunshine Act, 43363–43364 43447–43494 Self-regulatory organizations; proposed rule changes: National Association of Securities Dealers, Inc., 43364– Part IV 43367 Treasury Department, Alcohol, Tobacco and Firearms Pacific Exchange, Inc., 43367–43372 Bureau, 43495–43509 Philadelphia Stock Exchange, Inc., 43372–43377 Applications, hearings, determinations, etc.: Part V Jackson National Life Insurance Co. of New York, et al., Defense Department; General Services Administration; 43360–43363 National Aeronautics and Space Administration, 43511–43521 State Department PROPOSED RULES Part VI Exchange Visitor Program: Defense Department; General Services Administration; Professor and research scholar participation, 43264– National Aeronautics and Space Administration, 43265 NOTICES 43523–43524 Grants and cooperative agreements; availability, etc.: Mexico; post-secondary educational opportunities, 43379–43382 Reader Aids Mexico, Central America and the Caribbean Regional Consult the Reader Aids section at the end of this issue for Educational Advising Coordinator Program, 43377– phone numbers, online resources, finding aids, reminders, 43379 and notice of recently enacted public laws.
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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 226...... 43448 12 CFR 203 (2 documents) ...... 43217, 43218 14 CFR 39 (4 documents) ...... 43227, 43229, 43230, 43232 17 CFR 231...... 43234 241...... 43234 19 CFR 12...... 43247 21 CFR 510...... 43247 520...... 43247 558...... 43248 22 CFR Proposed Rules: 62...... 43264 25 CFR 542...... 43390 27 CFR Proposed Rules: 7...... 43496 33 CFR 3...... 43252 117...... 43252 36 CFR 1228...... 43253 1250...... 43253 1253...... 43254 1254...... 43253 40 CFR 180...... 43255 47 CFR 78...... 43257 Proposed Rules: 73...... 43265 76...... 43265 48 CFR Chapter 1 (2 documents) ...... 43512, 43521 2...... 43513 8...... 43514 17...... 43513 31 (2 documents) ...... 43513, 43516 33...... 43513 49...... 43513 51...... 43514 52 (2 documents) ...... 43513, 43520 Proposed Rules: 39...... 43524 52...... 43524 50 CFR Proposed Rules: 600...... 43265 635...... 43266
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Rules and Regulations Federal Register Vol. 67, No. 124
Thursday, June 27, 2002
This section of the FEDERAL REGISTER Board subsequently delayed the List of Subjects in 12 CFR Part 203 contains regulatory documents having general effective date of the amendments from applicability and legal effect, most of which Banks, banking, Mortgages, Reporting January 1, 2003, until January 1, 2004. and recordkeeping requirements. are keyed to and codified in the Code of 67 FR 30771, May 8, 2002. Federal Regulations, which is published under At the same time that the final rule For the reasons set forth in the 50 titles pursuant to 44 U.S.C. 1510. was published, the Board issued a preamble, the Board amends 12 CFR The Code of Federal Regulations is sold by proposed rule for comment on three Part 203 as follows: the Superintendent of Documents. Prices of items related to the final rule: (1) The PART 203—HOME MORTGAGE new books are listed in the first FEDERAL appropriate thresholds for purposes of REGISTER issue of each week. reporting pricing data on loan DISCLOSURE (REGULATION C) originations; (2) whether lenders should 1. The authority citation for part 203 report lien status; and (3) whether continues to read as follows: FEDERAL RESERVE SYSTEM lenders should be required to ask Authority: 12 U.S.C. 2801–2810. applicants for monitoring information 12 CFR Part 203 on ethnicity, race, and sex in 2. Appendix A is amended by revising [Regulation C; Docket No. R–1120] applications taken entirely by Paragraph V.D.2. to read as follows: telephone. 67 FR 7252, February 15, Home Mortgage Disclosure 2002. Appendix A to Part 203—Form and The Board has issued a final rule, Instructions for Completion of HMDA AGENCY: Board of Governors of the adopting the three proposed items, in a Loan/Application Register Federal Reserve System. notice published elsewhere in today’s * * * * * ACTION: Final rule; technical Federal Register. For reasons discussed V. Instructions for Completion of Loan/ amendment. in that notice, the revised rule regarding Application Register the collection of monitoring information * * * * * SUMMARY: The Board is publishing about ethnicity, race, and sex is effective D. Applicant Information—Race or amendments to Regulation C (Home as of January 1, 2003. Because the final National Origin, Sex, and Income Mortgage Disclosure). The amendments rule published today amends the * * * * * require lenders to ask applicants their revised regulation—which does not take 2. Mail, Internet, or Telephone race or national origin and sex in effect until January 1, 2004—the Board Applications. All loan applications, applications taken by telephone, is publishing a rule with respect to including applications taken by mail, conforming the telephone application monitoring information, set forth in this Internet, or telephone, must use a collection rule to the rule applicable to mail and form similar to that shown in appendix B notice, to cover the period from January Internet applications. regarding race or national origin and sex. For 1, 2003, to December 31, 2003. The rule applications taken by telephone, the DATES: The amendments are effective amends the portions of the current information in the collection form must be January 1, 2003. Appendices A and B to Regulation C stated orally by the lender, except for FOR FURTHER INFORMATION CONTACT: John that set forth instructions for collecting information that pertains uniquely to C. Wood, Counsel, Kathleen C. Ryan, monitoring information in telephone applications taken in writing. If the applicant Senior Attorney, or Dan S. Sokolov, applications. does not provide these data in an application Attorney, Division of Consumer and Thus, for applications taken taken by mail, Internet or telephone, enter Community Affairs, Board of Governors beginning January 1, 2003, lenders must the code for ‘‘information not provided by of the Federal Reserve System, applicant in mail or telephone application’’ ask telephone applicants for monitoring specified in paragraphs V.D.3. and 4. of this Washington, DC 20551, at (202) 452– information under Appendix A, appendix. (See appendix B for complete 3667 or (202) 452–2412. For users of Paragraph V.D.2, and Appendix B, information on the collection of these data in Telecommunications Device for the Deaf Paragraph I.B.4., as revised by the Board mail, Internet, or telephone applications.) (TDD) only, contact (202) 263–4869. in this notice. For these applications, * * * * * lenders must use the race or national SUPPLEMENTARY INFORMATION: 3. Appendix B is amended by revising origin categories in current Appendix A, paragraph I.B.4. to read as follows: I. Background Paragraph V.D.3., and in the sample The Home Mortgage Disclosure Act data collection form in current Appendix B to Part 203—Form and (HMDA) requires certain depository and Appendix B. For applications taken on Instructions for Data Collection on Race for-profit nondepository institutions to or after January 1, 2004, lenders are or National Origin and Sex collect, report, and publicly disclose required to ask telephone applicants for * * * * * data about originations and purchases of monitoring information under I. Instructions on collection of data on race home mortgage and home improvement Appendix A, Paragraph I.D.2., and or national origin and sex loans. Institutions must also report data Appendix B, Paragraph II.A., as revised * * * * * about applications that do not result in in the notice published elsewhere in B. Procedures originations. The Board’s Regulation C today’s Federal Register, using the * * * * * implements HMDA. revised ethnicity and race categories in 4. You must ask the applicant for this On January 23, 2002, the Board Appendix A, Paragraphs I.D.3. and 4., information (but you cannot require the approved a final rule amending and the sample data collection form in applicant to provide it) whether the Regulation C, effective January 1, 2003. Appendix B approved by the Board on application is taken in person, by mail or 67 FR 7222, February 15, 2002. The January 23, 2002. telephone, or on the Internet. For
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applications taken by telephone, the SUPPLEMENTARY INFORMATION: At the same time that the final rule information in the collection form must be was published, the Board issued a I. Background stated orally by the lender, except for that proposed rule for comment on whether information which pertains uniquely to The Home Mortgage Disclosure Act thresholds of 3 percentage points above applications taken in writing. You need not (HMDA) (12 U.S.C. 2801–2810) has the yield on comparable Treasury provide the data when you take an three purposes. One is to provide the securities for first-lien loans and 5 application by mail or telephone or on the public and government officials with Internet, if the applicant fails to answer. You percentage points for subordinate-lien should indicate whether an application was data that will help show whether loans (which generally have a higher received by mail, telephone, or the Internet, lenders are serving the housing needs of APR) are appropriate thresholds for if it is not otherwise evident on the face of the neighborhoods and communities in identifying the loans for which financial the application. which they are located. A second institutions must report loan pricing * * * * * purpose is to help public officials target data. 67 FR 7252, February 15, 2002. public investment to promote private The Board also proposed to require By order of the Board of Governors of the investment where it is needed. A third Federal Reserve System, acting through the lenders (1) to report the lien status on Secretary of the Board under delegated purpose is to provide data that assist in loans and applications and (2) to ask authority, June 21, 2002. identifying possible discriminatory telephone applicants their ethnicity, Jennifer J. Johnson, lending patterns and enforcing race, and sex. antidiscrimination statutes. The Board received approximately Secretary of the Board. HMDA accordingly requires certain 250 comments on the proposed rule; [FR Doc. 02–16189 Filed 6–26–02; 8:45 am] depository and for-profit nondepository commenters were generally divided on BILLING CODE 6210–01–P lenders to collect, report, and publicly the issues. Industry commenters disclose data about originations and provided differing views on the purchases of loans secured by appropriate thresholds for reporting FEDERAL RESERVE SYSTEM residential real property and of home pricing data and on the burden 12 CFR Part 203 improvement loans. Lenders must also associated with reporting lien status. report data about applications that did They were generally opposed to the [Regulation C; Docket No. R–1120] not result in originations. proposed collection of applicants’ The Board’s Regulation C implements ethnicity, race, and sex in telephone Home Mortgage Disclosure HMDA. Regulation C generally requires applications. AGENCY: that lenders report data about: Commenters representing community Board of Governors of the • Federal Reserve System. Each application or loan, including groups, researchers, and state, local and the application date; the action taken tribal officials generally urged the Board ACTION: Final rule; staff interpretation. and the date of that action; the loan to require lenders to report pricing SUMMARY: The Board is publishing amount; the loan type and purpose; and, information on all loans. These if the loan is sold, the type of purchaser; commenters supported the reporting of amendments to Regulation C (Home • Mortgage Disclosure). The amendments Each applicant or borrower, lien status for originations and establish the thresholds for determining including ethnicity, race, sex, and applications, and argued for extending income; and the requirement to purchased loans. the loans for which financial • institutions must report loan pricing Each property, including location They believed that lenders should be data (the spread between the annual and occupancy status. required to ask for applicants’ ethnicity, Lenders report this information to percentage rate on a loan and the yield race, and sex in telephone applications. their supervisory agencies on an on comparable Treasury securities) as Many industry commenters, in application-by-application basis using a required under a final rule approved in addition to commenting on the loan application register format (HMDA/ January 2002; the thresholds are a proposed rule, also requested a delay in LAR). Lenders must make their HMDA/ spread of 3 percentage points for first- the effective date of the final rule LARs—with certain fields redacted to lien loans and 5 percentage points for published on February 15, 2002. On preserve applicants’ privacy—available subordinate-lien loans. The May 2, 2002, the Board delayed the to the public. The Federal Financial amendments require lenders to report effective date of the final rule to January Institutions Examination Council the lien status of a loan or application. 1, 2004. Lenders must, however, use the (FFIEC), acting on behalf of the The amendments also require that census tract numbers and corresponding supervisory agencies, compiles the lenders ask applicants their ethnicity, geographic areas from the 2000 Census reported information and prepares an race, and sex in applications taken by for all applications and loans recorded individual disclosure statement for each telephone; this monitoring requirement on their 2003 HMDA/LAR and reported institution. The FFIEC also aggregates is made applicable as of January 1, 2003, to the supervisory agencies by March 1, data and prepares reports for all lenders through a rule published elsewhere in 2004. 67 FR 30771, May 8, 2002. in each metropolitan area and for the Industry commenters also requested today’s Federal Register. nation. These disclosure statements and guidance on how to collect and report DATES: The amendments are effective reports are available to the public. data when an application is received January 1, 2004. On January 23, 2002, the Board before—and final action is taken after— FOR FURTHER INFORMATION CONTACT: John approved amendments to Regulation C January 1, 2004, the effective date of the C. Wood, Counsel, Kathleen C. Ryan, after a comprehensive review of the revised rule. In some instances, several Senior Attorney, or Dan S. Sokolov, regulation. 67 FR 7222, February 15, months may elapse between application Attorney, Division of Consumer and 2002. Among other things, the final rule and final action, and applications taken Community Affairs, Board of Governors requires lenders to report the spread in 2003 may not be acted upon until of the Federal Reserve System, between the APR on loans and the yield 2004. Washington, DC 20551, at (202) 452– on Treasury securities with comparable Lenders generally must comply with 3667 or (202) 452–2412. For users of maturity periods, if the spread meets or the revised rules for all applications Telecommunications Device for the Deaf exceeds certain thresholds specified by upon which final action is taken on and (TDD) only, contact (202) 263–4869. the Board. after January 1, 2004. The Board plans
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to issue guidance later this year to solicited comment on the appropriate Some commenters urged the Board to alleviate the burden on lenders to ‘‘look thresholds before finalizing them. adopt the thresholds for HOEPA back’’ at all applications taken in 2003 Information on the following specific coverage (8 percentage points for first- but acted on in 2004. For example, the issues and questions was also solicited: lien loans and 10 percentage points for Board could establish that for • Whether the rule for determining subordinate-lien loans) for reporting applications taken before a certain coverage under the Home Ownership pricing information under Regulation C. date—such as November 1, 2003—a and Equity Protection Act (HOEPA) Others suggested thresholds of 5 lender would not be required to use the should be used to determine whether percentage points and 7 percentage revised rules. rate spread information must be points for first- and subordinate-lien reported under HMDA—specifically, loans, respectively, so as to capture only II. Section-by-Section Analysis of the whether the 15th day of the month what they believe to be higher-priced Final Rule preceding the month in which the loans. The following discussion generally application for the loan was received In addition to commenting on the tracks the regulation (including should be used for determining the APR proposed thresholds, many industry appendices) as amended by the Board. spread. commenters urged the Board to reverse Revisions to the staff commentary are • The proportion of loan originations its decision to require lenders to report addressed under the sections of the (by number of loans) reported under pricing information under HMDA. Some regulation that they interpret. HMDA that would fall above and below of these commenters stated that, in the various thresholds, segregated by risk alternative, the Board should allow Section 203.2—Definitions class (for example, A, A-minus, and B) lenders the option of reporting the APR 2(i) Manufactured Home and lien status. on a loan and having the Board • Commenters asked whether the Circumstances or special credit calculate the spread. They said that definition of a manufactured home in products that might be particularly reporting the spread would be more § 203.2(i) includes modular, panelized, subject to misclassification, as loans burdensome than reporting the APR, associated with a higher credit risk than and pre-cut homes. The definition in because lenders do not track the yield prime loans, should the proposed § 203.2 refers to the federal building on Treasury securities and may have thresholds be implemented. For code for factory-built housing difficulty obtaining the correct example, are there product lines in established by the Department of information to use in calculating the which loans with very little credit risk Housing and Urban Development spread. Commenters were concerned nonetheless have high APRs? (HUD). The HUD code requires that lenders could make inadvertent Alternatively, are there product lines in generally that housing be essentially errors in calculating the spread and, if which loans with relatively high credit ready for occupancy upon leaving the the errors were pervasive, could incur risk nonetheless have low APRs? the costs of resubmission of HMDA data factory and being transported to a • Is the 2-percentage point difference building site. Modular homes that meet or civil money penalties. between the proposed thresholds for A few industry commenters urged the all of the HUD code standards are first- and subordinate-lien loans Board not to use the yield on Treasury included in the definition because they appropriate? securities for calculating the spread. are ready for occupancy upon leaving Some industry commenters supported They suggested that lenders be the factory. Other factory-built homes, the thresholds of 3 and 5 percentage permitted to use other indices for such as panelized and pre-cut homes, points, although they objected to calculating the spread, such as the generally do not meet the HUD code reporting any pricing data. These LIBOR (London Inter-Bank Offered Rate) because they require a significant commenters stated that, based on their index, that they said play a more direct amount of construction on site before experience, the tentative thresholds role in their pricing. they are ready for occupancy. Loans and would exclude nearly all prime loans Still others—community groups, applications relating to manufactured from the pricing-data reporting. Nearly researchers, and state, local, and tribal homes that do not meet the HUD code all industry commenters—whether or officials—urged the Board to require should not be identified as not they supported thresholds of 3 and pricing information on all loans manufactured housing under HMDA. 5 percentage points—indicated that a 2- reported under HMDA, and not just Comment 203.2(i)–1 contains this percentage point difference between those that meet or exceed certain guidance. thresholds is appropriate. thresholds. These commenters believed Section 203.4—Compilation of Loan Many industry commenters argued that requiring pricing information only Data that the proposed thresholds were too on higher-priced loans would allow low, based on a belief that the discrimination and other abusive 4(a)(12) Rate Spread Information thresholds would capture a significant lending practices to go undetected in The Board proposed a reporting number of prime loans. Some the prime market. Some of these threshold of 3 percentage points above commenters stated that the proposed commenters also argued that the APR, the yield on Treasury securities of thresholds would include loans that and not the spread, should be reported comparable maturity for first-lien loans they believe are not higher-priced loans, to facilitate fair lending enforcement. and 5 percentage points for subordinate- for example, short-term loans with Some community groups, while lien loans (which generally have a balloon payments, loans involving preferring pricing information on all higher APR). The thresholds are manufactured homes, and FHA-insured loans, stated that the thresholds of 3 and intended to ensure, to the extent and VA-guaranteed loans. These 5 percentage points were appropriate. possible, that pricing data for higher- commenters did not, however, provide The Board is adopting the proposed cost loans are collected and disclosed. data to support their views. Industry thresholds of 3 and 5 percentage points The data available to the Board when it commenters also expressed concern that for first- and subordinate-lien loans, proposed the thresholds indicated that stigma would attach to loans that meet respectively. In January 2002, the Board these thresholds would exclude the vast the pricing thresholds and that adopted the requirement to report the majority of prime loans and include the responsible subprime lending would spread only for loans over specific vast majority of other loans. The Board consequently be curtailed. thresholds in order to adjust pricing
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data for changes in market conditions Many industry commenters, including compliance burden associated with the over time, focus on higher-cost loans, the banking trade associations, requirement. and limit reporting burden (because supported use of the application date for Section 4(a)(12) is also modified to fewer loans would be subject to the identifying the applicable Treasury clarify that lenders must report the rate reporting requirement). The data security yield. They noted that adopting spread on a loan if the spread equals or supplied by commenters tended to the HOEPA rule would ease compliance exceeds the thresholds. This change confirm the data available to the Board burden, as lenders whose loans are conforms the regulation to the indicating that the proposed thresholds covered by HOEPA are already familiar instructions for reporting rate-spread would avoid capturing the vast majority with this rule. Other industry information in Appendix A, Paragraph of prime loans while capturing the vast commenters suggested that the ‘‘lock I.G.1. majority of other loans. date,’’ or date that the lender sets the 4(a)(14) Lien Status The Board believes that the thresholds interest rate for the loan, would result will not result in misclassification of the in a more accurate determination of The Board proposed to require products mentioned by some whether a loan was a prime loan or a lenders to report whether a loan is or commenters—for example, FHA-insured higher-priced loan. A small number of would be (1) secured by a first lien on loans, VA-guaranteed loans and industry commenters suggested using a dwelling; (2) secured by a subordinate manufactured home loans. While the the date of origination or lien on a dwelling; or (3) not secured by spread on many manufactured home consummation. a lien on a dwelling. The Board solicited comment on these reporting categories loans may exceed the thresholds, these The Board is adopting the date the (and also on whether reporting of lien loans tend to have elevated credit risk final interest rate is set as the date for status should be required for purchased and are generally not considered prime determining the yield on comparable loans). Data on lien status may help loans. The thresholds should exclude Treasury securities. The rule provides explain some pricing disparities, most FHA-insured loans and VA- that lenders use the 15th-of-the-month because interest rates, and therefore guaranteed loans. Moreover, Regulation prior to the date the final rate is set. For C requires lenders to distinguish FHA APRs, vary according to lien status. example, if the lender sets the interest Rates on first-lien loans are generally and VA loans from other loan types on rate for the final time before the loan their HMDA/LARs; and under the final lower than rates on subordinate-lien or closing on September 3, 2004, the unsecured loans. In addition, lien status rules, lenders will also be required to relevant date for use of the Board’s table distinguish loans for manufactured would enable data users to better is August 15, 2004; if the lender sets the analyze information on secured and homes from loans for site-built homes. rate for the final time before closing on Thus, even if these loans are unsecured home improvement loans. September 17, 2004, the relevant date is Most industry commenters—although misclassified as higher-priced loans, September 15, 2004. If the rate is set on data users can treat these loans as opposed generally to reporting more September 15, 2004, the relevant date is distinct product lines in their analyses. data under HMDA—stated that lien September 15, 2004. These instructions The Board will take steps to minimize status was closely linked to pricing and any difficulties lenders may have in have been incorporated into Appendix that it would not be unduly burdensome calculating the spread and also to A, Paragraphs I.G.1. and 2. for them to report this information for minimize the risk of errors. These steps The date the final rate is set more originations on their HMDA/LAR. Most include publishing the applicable accurately reflects the lender’s pricing industry commenters, however, Treasury yields for common maturity decision than a date related to the date opposed a requirement to collect and periods on the FFIEC’s Internet web site, of application or to the date of report these data for purchased loans, in addition to making the information consummation. A date related to the because they believe the additional available by fax upon request. Lenders date of application or consummation burden is not warranted. Some will be required to use only the rates might reflect a different rate commenters stated that lien status published by the Board—and not the H– environment than existed when the should not be required for applications 15 or the Treasury auction results, final interest rate was established, and that do not result in loans; they which lenders may use for HOEPA could result in inaccurate and suggested that an application might be purposes—to ensure consistent and misleading data for periods when denied before the lender knows what accurate calculations for HMDA data interest rates are volatile. the lien status of the loan would have collection and reporting. An interactive Using the date the final rate is set may been. tool could also be available on the impose additional burden on some Other industry commenters opposed FFIEC Web site to calculate the rate lenders, as many lenders do not the requirement to report lien status spread for a loan, based on information systematically track the date the interest even for originations as unduly input by the lender. rate is set or locked. In contrast, using burdensome. These commenters stated The final regulation approved in the HOEPA rule (a date measured from that while they know when a loan they January set an ‘‘application date’’ rule the application date) may impose less make is secured, they often do not know for determining whether the rate spread burden on lenders that currently make their lien position with certainty. They must be reported. That is, lenders would HOEPA loans or routinely monitor their were concerned that a final rule would compare the APR on a loan at loans for HOEPA coverage (although it require title searches for all reportable consummation with the yield on does not pose that advantage for lenders loans. Some commenters stated that Treasury securities of comparable that do not make HOEPA loans); and the they generally assume they will have a maturity as of the 15th day of the month dates of application and consummation first lien for all home purchase preceding the month in which the loan also may be less burdensome because applications and loans; but for other application was received. This is the these dates are already collected and home mortgages, often they do not know rule used to determine HOEPA reported under HMDA. On balance, their lien position even if the loan is coverage. The Board solicited comment however, the Board believes that the originated, and base their pricing on whether HOEPA’s application date benefits of increasing the accuracy of decisions on the assumption that they rule is appropriate in calculating the pricing information by selecting the date will have a subordinate lien. A few spread for HMDA purposes. the final interest rate is set outweigh the commenters suggested that the Board
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should allow lenders to report lien example, a lender would report a loan substantial decline in response rates status based on these assumptions. origination as secured by a subordinate regarding race and ethnicity. From 1993 Community groups, researchers, and lien if the application states that there to 2000, the proportion of home state, local, and tribal officials stated is a mortgage on the property (and the mortgage loan applications of all types that lien status was critical to mortgage will not be paid off as part of with missing race or ethnicity data interpreting pricing data and the transaction). If the same application increased from about 8 percent to about distinguishing secured from unsecured did not result in an origination—for 28 percent. (Missing data about the home improvement loans, and many example, because the application is applicant’s sex have increased in a argued that lien status should be denied or withdrawn—the lender would similar fashion.) At least part of this reported for purchased loans as well. report the application as an application decline may be explained by an Some of these commenters suggested for a subordinate-lien loan. apparent increase in lenders’ use of the that the data collection might serve to The final rule does not require lenders telephone to take applications. The deter lenders from persuading to collect and report lien status for loans Board solicited comment on the benefits consumers to consolidate a small first that they purchase. Pricing information and burdens of this proposal. mortgage and unsecured debt into a new is not required for purchased loans, nor Commenters were divided on whether first mortgage (when a second mortgage is information on ethnicity, race, and lenders should be required to ask for or an unsecured loan might be more in sex. Thus, the utility of lien-status data ethnicity, race, and sex in telephone the consumer’s interest). Some also on purchased loans would be limited applications. Community groups, stated that data on lien status for and would not justify the additional researchers, and state, local, and tribal purchased loans would facilitate reporting burden. officials urged the Board to require monitoring of the activities of subprime lenders to ask for such information on Appendix A to Part 203—Form and lenders that purchase loans which may telephone applications. Many of these Instructions for Completion of HMDA be unfairly priced, and for which little commenters pointed out that without Loan/Application Register data are available. the information, fair lending analyses The final rule requires lenders to In the final rules, the instructions for based on HMDA data are less effective. report lien status on applications and completing the HMDA/LAR provide These commenters also believe that the originations, but not on purchased three codes for indicating whether a number of applications taken by loans. Conforming changes have been loan or application relates to a telephone will continue to grow and, made to the HMDA/LAR and the preapproval request as defined in thus, that the rate of applications and HMDA/LAR Code Sheet in Appendix A. § 203.2(b). Codes 1 and 2 indicate loans missing information about Lien status on loan originations will whether a preapproval for a home ethnicity, race, and sex will increase as help the public and the agencies purchase loan was requested. Because well. Some industry commenters interpret the pricing information. only preapprovals for home purchase supported the proposal, stating that it Collecting lien status on loan loans are covered under the final rule, was simpler to have one rule on originations will enable data users to lenders use code 3, ‘‘not applicable,’’ for collection of ethnicity, race, and sex that differentiate between secured and refinancings and home improvement applies regardless of the manner in unsecured home improvement loans, loans and applications and for which an application is taken. and will facilitate fair lending data purchased loans of any type. On the other hand, many other analysis. Commenters asked what code should be industry commenters opposed the Lien status for applications that do used for home purchase applications proposal because they believe that not result in originations is also and loans if a lender does not have a applicants will resent the intrusion into important information in the analysis of preapproval program as defined in an area they regard as confidential or acceptance and denial ratios for § 203.2(b). Appendix A has been sensitive. Some commenters believe that borrowers of different races. Disparities changed to clarify that code 3 should be applicants will fear discrimination, and by race or ethnicity in acceptance and used for home purchase loans and will not pursue an application, will denial ratios that initially suggest applications if the lender does not offer refuse to supply the information, or will unlawful discrimination are often covered preapprovals. supply incorrect information. Still explained by differences in the lien Instructions for calculating the rate others said that requiring lenders to ask status of the loan for which application spread and for reporting lien status have for information about ethnicity, race, was made, but only after significant been added to Appendix A, as discussed and sex would raise the cost of taking effort is expended to retrieve above under §§ 203.4(a)(12) and (14). telephone applications. A few information on lien status from The HMDA/LAR and the HMDA/LAR commenters asked the Board to provide individual loan files. Code Sheet have been modified to a script for requesting the information in Lenders are required to report the lien reflect the requirement in § 203.4(a)(14) telephone applications. status according to the best information to report lien status. Appendix A has The final rule requires lenders to ask readily available to them at the time also been modified to reflect the revised for applicants’ ethnicity, race, and sex final action is taken on an application. rules regarding collection of ethnicity, in telephone applications. This A comment has been added to the staff race, and sex in applications taken by amendment will serve the fair lending commentary, clarifying that Regulation telephone, discussed under Appendix B enforcement purpose of HMDA by C does not require lenders to conduct below. improving the data obtained on title searches solely for HMDA reporting ethnicity, race, and sex; the Board purposes. Lenders may rely on the title Appendix B to Part 203—Form and believes this benefit outweighs the costs search they routinely require for home Instructions for Data Collection on of compliance. purchase loans; lenders may also rely on Ethnicity, Race, and Sex The Board is making the amended other information readily available to The Board proposed to conform the rule applicable as of January 1, 2003, them and that they reasonably believe to telephone application rule regarding through a rule published elsewhere in be accurate, such as the applicant’s ethnicity, race, and sex to the rule today’s Federal Register. Although for credit report or the applicant’s applicable to mail and Internet at least some lenders the cost of statement on the application. For applications. There has been a implementing the telephone rule in
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2003 may be somewhat greater than the metropolitan areas whose assets are hours per institution, averaging 260 cost of implementing it in 2004, the below an asset size threshold (currently hours for state member banks and 200 Board believes that the cost difference is $32 million) that adjusts yearly are not hours for mortgage banking subsidiaries justified by the need to try to stem the required to comply. Under the and other respondents. Therefore, the increasing rate of missing data. Paperwork Reduction Act the Federal annual burden of the information The final rule conforms the Reserve accounts for the burden of the collection under Regulation C is procedures for requesting applicant paperwork associated with the estimated to be approximately 155,000 information in telephone applications to regulation only for state member banks, total annual hours for Federal Reserve those for applications taken by mail or their subsidiaries, subsidiaries of bank supervised respondents. on the Internet. Generally, loan holding companies, U.S. branches and The present rule changes will also applicants must be advised that agencies of foreign banks (other than cause respondents to incur a modest requesting information about ethnicity, federal branches, federal agencies, and programming cost in addition to the race, and sex is mandated by the federal insured state branches of foreign banks), programming cost associated with the government to assist in the enforcement commercial lending companies owned January 2002 amendments. In of fair lending laws. In addition, or controlled by foreign banks, and particular, institutions will have to applicants must be advised that the organizations operating under section program their systems to add a new lenders are prohibited from 25 or 25A of the Federal Reserve Act (12 field to the HMDA/LAR for lien status; discriminating on the basis of the U.S.C. 601–604a; 611–631). Other and institutions that do not now collect information provided, or on the basis of federal agencies account for the ethnicity, race, and sex on telephone the applicant’s choosing to provide or paperwork burden for the institutions applications may have to reprogram not provide the information. they supervise. Respondents must their systems to enable such collection. For applications taken beginning maintain their HMDA/LARs and The Board believes that these additional January 1, 2003, lenders are required to modified HMDA/LARs for three years, costs will fit within the broad cost ask telephone applicants for monitoring and their disclosure statements for five ranges the Board estimated applied to information using the national origin or years. the January 2002 amendments. For race categories in the current The final rule has three principal convenience, those ranges are Appendices A and B, as set forth in a elements. In January 2002, the Board reproduced here: Institutions that use notice published elsewhere in today’s approved several amendments to vendor-provided software systems (the Federal Register. For applications taken Regulation C, including one that bulk of reporting institutions) will face by telephone on or after January 1, 2004, requires lenders to report the spread costs averaging around $2,000–$5,000; lenders are required to ask for between the APR on a loan and the institutions that purchase and adapt off- monitoring information using the yield on Treasury securities of the-shelf applications will face costs ethnicity and race categories in revised comparable maturity when the spread averaging between $20,000–$50,000; Appendices A and B. exceeds a certain threshold. The final and institutions that use mainframe rule sets the reporting threshold (which III. Paperwork Reduction Act systems (the largest institutions) will depends on lien status) at the level face costs averaging between $120,000– In accordance with the Paperwork proposed by the Board in January 2002. $270,000. Using the maximum cost for Reduction Act of 1995 (44 U.S.C. 3506; The final rule also adds a field to the each of the three ranges to calculate a 5 CFR 1320 Appendix A.1), the Board HMDA/LAR for lien status, which must weighted average, it is estimated that reviewed the rule under the authority be reported for loans and applications, the average covered financial institution delegated to the Board by the Office of but not for purchased loans. Finally, the will incur a total cost from the January Management and Budget. The Federal final rule requires lenders to ask 2002 amendments and the present Reserve may not conduct or sponsor, telephone applicants their ethnicity, amendments of approximately $17,500. and an organization is not required to race, and sex. The public comments on The Board’s Legal Division has respond to, this information collection these issues are summarized above in determined that HMDA data collection unless it displays a currently valid OMB the SUPPLEMENTARY INFORMATION. and reporting are required by law; control number. The OMB control When the Board adopted the January completion of the loan/application number is 7100–0247 for the Federal 2002 amendments, it estimated the register, submission to the Federal Reserve’s information collection under annual burden for the information Reserve, and disclosure to the public Regulation C. collection as varying from 12 to 12,000 upon request are mandatory. After the The mandatory collection of hours, averaging 242 hours for state data are redacted as required by the information that is revised by this member banks and 192 hours for statute and regulation, they are made rulemaking is found in 12 CFR part 203, mortgage banking subsidiaries and other publicly available and are not which implements 12 U.S.C. 2801– respondents. (These estimates were considered confidential. Data that the 2810. Public officials use this based on the number of HMDA data statute and regulation require be information to determine whether submissions by Federal Reserve redacted (loan number, date the financial institutions are serving the supervised respondents that were application is received, and the date the housing needs of their communities; to required to report calendar year 2000 action is taken) are given confidential help target public investment to data in March 2001.) Two items in the treatment under exemption 6 of the promote private investment where it is present amendments will increase the Freedom of Information Act (5 U.S.C. needed; and to identify possible annual burden: The requirement to 552(b)(6)). discriminatory lending patterns for report lien status and the requirement to The Board has a continuing interest in enforcement of antidiscrimination ask telephone applicants their ethnicity, the public’s opinions of its collections statutes. race, and sex. The Board estimates that of information. At any time, comments The respondents are all financial the addition of these two items will regarding the burden estimate, or any institutions, depositories and non- increase the burden by 7 percent. other aspect of this collection of depositories, that meet the tests for Accordingly, the Board estimates that information, including suggestions for coverage under the regulation. the annual burden for the information reducing the burden, may be sent to: Depository institutions with offices in collection varies from 13 to 12,840 Secretary, Board of Governors of the
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Federal Reserve System, 20th and C Although the final rule offers a Appendix A to Part 203—Form and Streets, NW., Washington, DC 20551; number of benefits, it also will require Instructions for Completion of HMDA and to the Office of Management and covered lenders, including small Loan/Application Register Budget, Paperwork Reduction Project institutions, to change their current * * * * * (7100–0247), Washington, DC 20503. procedures and systems for collecting and reporting required data. The Board I. Instructions for Completion of Loan/ IV. Regulatory Flexibility Analysis believes the benefits outweigh these Application Register In accordance with section 3(a) of the added costs. * * * * * Regulatory Flexibility Act (5 U.S.C. A. Application or Loan Information List of Subjects in 12 CFR Part 203 604(a)), the Board has prepared a final * * * * * regulatory analysis of these revisions. A Banks, Banking, Mortgages, Reporting 8. Request for Preapproval of a Home copy of the analysis may be obtained and recordkeeping requirements. Purchase Loan from Publications Services, Board of Indicate whether the application or loan For the reasons set forth in the Governors of the Federal Reserve involved a request for preapproval of a home preamble, the Board amends 12 CFR purchase loan by entering the applicable System, Washington, DC 20551, at (202) part 203 as follows: code from the following: 452–3245. A summary of the analysis Code 1—Preapproval requested follows. PART 203—HOME MORTGAGE Code 2—Preapproval not requested The final rule is a consequence of DISCLOSURE (REGULATION C) Code 3—Not applicable Board policy to review its regulations a. Enter code 2 if your institution has a periodically and a desire to update the 1. The authority citation for part 203 covered preapproval program but the regulation to reflect mortgage markets continues to read as follows: applicant does not request a preapproval. more clearly and enhance consumer Authority: 12 U.S.C. 2801–2810. b. Enter code 3 if your institution does not protection. have a preapproval program as defined in The Board received no comments 2. Section 203.4 is amended by: § 203.2(b). a. Revising paragraph (a)(12); and c. Enter code 3 for applications or loans for specifically responding to the initial home improvement or refinancing, and for regulatory analysis published in b. Adding a new paragraph (a)(14). purchased loans. conjunction with the proposed rule. As § 203.4 Compilation of loan data. * * * * * discussed in Sections I and II, however, D. Applicant Information—Ethnicity, Race, some comments the Board received (a) Data format and itemization. Sex, and Income *** discussed the burden arising from * * * * * particular aspects of the proposed rule. (12) For originated loans subject to 2. Mail, Internet, or Telephone Such comments are summarized Regulation Z, 12 CFR part 226, the Applications. All loan applications, throughout Sections I and II, as are the difference between the loan’s annual including applications taken by mail, Board’s responses. Section II also percentage rate (APR) and the yield on Internet, or telephone must use a collection discusses alternative measures the Treasury securities having comparable form similar to that shown in appendix B Board considered. periods of maturity, if that difference is regarding ethnicity, race, and sex. For The changes under the final rule equal to or greater than 3 percentage applications taken by telephone, the information in the collection form must be require more data on certain covered points for loans secured by a first lien stated orally by the lender, except for transactions. Some of the changes will on a dwelling, or equal to or greater than information that pertains uniquely to affect all institutions currently within 5 percentage points for loans secured by applications taken in writing. If the applicant the scope of the regulation, including a subordinate lien on a dwelling. The does not provide these data in an application covered small institutions; others will lender shall use the yield on Treasury taken by mail or telephone or on the Internet, affect only certain institutions, securities as of the 15th day of the enter the code for ‘‘information not provided depending upon the interest rates and preceding month if the rate is set by applicant in mail, Internet, or telephone fees they charge and on whether they between the 1st and the 14th day of the application’’ specified in paragraphs I.D.3., 4., and 5. of this appendix. (See appendix B take applications by telephone. month and as of the 15th day of the for complete information on the collection of It is difficult to quantify the benefits current month if the rate is set on or these data in mail, Internet, or telephone and costs associated with the final rule. after the 15th day, as prescribed in applications.) The new information will provide data appendix A to this part. * * * * * to help identify possible discriminatory * * * * * G. Pricing-Related Data lending patterns and assist regulators in (14) The lien status of the loan or 1. Rate Spread conducting examinations under the application (first lien, subordinate lien, a. For a home purchase loan, a refinancing, Community Reinvestment Act and other or not secured by a lien on a dwelling). or a dwelling-secured home improvement laws. Additional data on covered loan that you originated, report the spread * * * * * transactions will allow for more precise between the annual percentage rate (APR) differentiation among loan products and 3. Appendix A is amended by: and the applicable Treasury yield if the spread is equal to or greater than 3 reduce the potential bias that results a. Revising paragraph I.A.8.; percentage points for first-lien loans or 5 when dissimilar loan products are b. Revising paragraph I.D.2.; percentage points for subordinate-lien loans. jointly classified. The data will also c. Revising paragraph I.G.1.; To determine whether the rate spread meets help inform the public about this threshold, use the Treasury yield for d. Redesignating paragraph I.G.2. as developments in the mortgage market by securities of a comparable period of maturity paragraph I.G.3. and adding a new revealing pricing information on higher- as of the 15th day of a given month, paragraph I.G.2.; cost home loans, and improve local depending on when the interest rate was set, governments’ ability to use HMDA data e. Adding a new paragraph I.H.; and use the APR for the loan, as calculated f. Revising the Loan/Application and disclosed to the consumer under to help guide local investments. More §§ 226.6 or 226.18 of Regulation Z (12 CFR complete data about applicant Register; and part 226). Use the 15th day of a given month characteristics in telephone applications g. Revising the Loan/Application for any loan on which the interest rate was will improve fair lending analysis. Register Code Sheet. set on or after that 15th day through the 14th
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day of the next month. (For example, if the figure or truncate the digits beyond two agreement is executed, then the relevant date rate is set on September 17, 2004, use the decimal places. is the date on which the institution sets the Treasury yield as of September 15, 2004; if e. If the difference between the APR and rate for the final time before closing. the interest rate is set on September 3, 2004, the Treasury yield is less than 3 percentage * * * * * use the Treasury yield as of August 15, 2004). points for a first-lien loan and less than 5 To determine the applicable Treasury percentage points for a subordinate-lien loan, H. Lien Status security yield, the financial institution must enter ‘‘NA.’’ Use the following codes for loans that you use the table published on the FFIEC’s Web 2. Date the interest rate was set. The originate and for applications that do not site (http://www.ffiec.gov/hmda) entitled relevant date to use to determine the result in an origination: ‘‘Treasury Securities of Comparable Maturity Treasury yield is the date on which the loan’s Code 1—Secured by a first lien. under Regulation C.’’ interest rate was set by the financial Code 2—Secured by a subordinate lien. b. If the loan is not subject to Regulation institution for the final time before closing. Code 3—Not secured by a lien. Z, or is a home improvement loan that is not If an interest rate is set pursuant to a ‘‘lock- Code 4—Not applicable (purchased loan). dwelling-secured, or is a loan that you in’’ agreement between the lender and the a. Use Codes 1 through 3 for loans that you purchased, enter ‘‘NA.’’ borrower, then the date on which the originate, as well as for applications that do c. Enter ‘‘NA’’ in the case of an application agreement fixes the interest rate is the date not result in an origination (applications that that does not result in a loan origination. the rate was set. If a rate is re-set after a lock- are approved but not accepted, denied, d. Enter the rate spread to two decimal in agreement is executed (for example, withdrawn, or closed for incompleteness). places, and use a leading zero. For example, because the borrower exercises a float-down b. Use Code 4 for loans that you purchase. enter 03.29. If the difference between the option or the agreement expires), then the APR and the Treasury yield is a figure with relevant date is the date the rate is re-set for * * * * * more than two decimal places, round the the final time before closing. If no lock-in BILLING CODE 6210–01–P
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BILLING CODE 6210–01–C
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4. Appendix B is amended by revising loan maturity. The applicable Treasury yield DEPARTMENT OF TRANSPORTATION Paragraph II.A to read as follows: date will depend on the date on which the financial institution set the interest rate on Federal Aviation Administration Appendix B to Part 203—Form and the loan for the final time before closing. See Instructions for Data Collection on Appendix A, Paragraphs I.G.1. and 2. 14 CFR Part 39 Ethnicity, Race, and Sex * * * * * [Docket No. 2001–SW–40–AD; Amendment * * * * * Paragraph 4(a)(14) Lien status. 39–12793; AD 2002–13–05] II. Procedures 1. Determining lien status for applications and loans originated. i. Lenders are required RIN 2120–AA64 A. You must ask the applicant for this to report lien status for loans they originate information (but you cannot require the and applications that do not result in Airworthiness Directives; MD applicant to provide it) whether the originations. Lien status is determined by application is taken in person, by mail or Helicopters, Inc. Model 369D, 369E, telephone, or on the Internet. For reference to the best information readily 369F, and 369FF Helicopters applications taken by telephone, the available to the lender at the time final action AGENCY: Federal Aviation information in the collection form must be is taken and to the lender’s own procedures. stated orally by the lender, except for that Thus, lenders may rely on the title search Administration, DOT. information which pertains uniquely to they routinely perform as part of their ACTION: Final rule. applications taken in writing. underwriting procedures—for example, for * * * * * home purchase loans. Regulation C does not SUMMARY: This amendment adopts a new airworthiness directive (AD) for 5. In Supplement I to Part 203: require lenders to perform title searches a. Under Section 203.2—Definitions, a solely to comply with HMDA reporting specified MD Helicopters, Inc. (MDHI) new heading 2(i) Manufactured Home requirements. Lenders may rely on other helicopters with a tailboom modified and a new paragraph 1 are added. information that is readily available to them according to Aerometals Supplemental b. Under Section 203.4—Compilation at the time final action is taken and that they Type Certificate (STC) SH5055NM or of Loan Data, under Paragraph 4(a)(12), reasonably believe is accurate, such as the SH4801NM. This AD requires an paragraph 1 is revised; and a new applicant’s statement on the application or inspection to identify the part number heading Paragraph 4(a)(14) and a new the applicant’s credit report. For example, (P/N) of the bolts that attach the tail paragraph 1 are added. where the applicant indicates on the rotor gearbox to the tailboom and application that there is a mortgage on the replacing any bolt of inadequate grip Supplement I to Part 203—Staff property or where the applicant’s credit length with an airworthy bolt. This AD Commentary report shows that the applicant has a also requires determining the number of * * * * * mortgage—and that mortgage is not going to bolt threads protruding from each be paid off as part of the transaction—the Section 203.2—Definitions nutplate and adding an additional lender may assume that the loan it originates washer if more than four threads * * * * * is secured by a subordinate lien. If the same protrude. This amendment is prompted 2(i) Manufactured home. application did not result in an origination— 1. Definition of a manufactured home. The by the discovery that bolts of inadequate definition in § 203.2(i) refers to the federal for example, because the application is grip length were specified to attach the building code for factory-built housing denied or withdrawn—the lender would tail rotor gearbox to the tailboom. The established by the Department of Housing report the application as an application for a actions specified by this AD are and Urban Development (HUD). The HUD subordinate-lien loan. intended to prevent loss of a tail rotor code requires generally that housing be ii. Lenders may also consider their gearbox due to attaching bolts of essentially ready for occupancy upon leaving established procedures when determining inadequate grip length and subsequent the factory and being transported to a lien status for applications that do not result loss of control of the helicopter. building site. Modular homes that meet all of in originations. For example, a consumer DATES: Effective August 1, 2002. the HUD code standards are included in the applies to a lender to refinance a $100,000 definition because they are ready for first mortgage; the consumer also has a home FOR FURTHER INFORMATION CONTACT: John occupancy upon leaving the factory. Other equity line of credit for $20,000. If the Cecil, Aviation Safety Engineer, FAA, factory-built homes, such as panelized and Los Angeles Aircraft Certification pre-cut homes, generally do not meet the lender’s practice in such a case is to ensure HUD code because they require a significant that it will have first-lien position—through Office, Airframe Branch, 3960 amount of construction on site before they a subordination agreement with the holder of Paramount Blvd., Lakewood, California are ready for occupancy. Loans and the mortgage on the home equity line—then 90712–4137, telephone (562) 627–5228, applications relating to manufactured homes the lender should report the application as an fax (562) 627–5210. that do not meet the HUD code should not application for a first-lien loan. SUPPLEMENTARY INFORMATION: A be identified as manufactured housing under * * * * * proposal to amend 14 CFR part 39 to HMDA. include an AD for the specified MDHI * * * * * By order of the Board of Governors of the helicopters was published in the Section 203.4—Compilation of Loan Data Federal Reserve System, June 21, 2002. Federal Register on December 27, 2001 Jennifer J. Johnson, 4(a) Data Format and Itemization. *** (66 FR 66821). That action proposed Paragraph 4(a)(12) Rate spread Secretary of the Board. requiring the following: information. [FR Doc. 02–16191 Filed 6–26–02; 8:45 am] • Identifying the P/N of the bolts that 1. Treasury securities of comparable BILLING CODE 6210–01–P attach the tail rotor gearbox to the maturity. To determine the yield on a tailboom; Treasury security, lenders must use the table • Replacing any bolt that is not a entitled ‘‘Treasury Securities of Comparable NAS1304–26 part-numbered bolt with a Maturity under Regulation C,’’ which will be NAS1304–26 bolt; published on the FFIEC’s Web site (http:// • www.ffiec.gov/hmda) and made available in Replacing any bolt of inadequate paper form upon request. This table will grip length; and provide, for the 15th day of each month, • Determining the number of bolt Treasury security yields for every available threads protruding from each nutplate
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and adding an additional washer if more on these figures, we estimate the total 2002–13–05 MD Helicopters, Inc.: than four threads protrude. cost impact of the AD on U.S. operators Amendment 39–12793. Docket No. Aerometals issued Service Bulletin to be $19,000. 2001–SW–40–AD. SB–001, dated August 3, 2000 (SB), The regulations adopted herein will Applicability: Model 369D, 369E, 369F, which describes procedures for not have a substantial direct effect on and 369FF helicopters, modified in verifying that the proper attaching bolts the States, on the relationship between accordance with Aerometals Supplemental are used to install the tail rotor gearbox the national Government and the States, Type Certificate (STC) SH5055NM or to the tailboom. or on the distribution of power and SH4801NM, certificated in any category. Interested persons have been afforded responsibilities among the various Note 1: This AD applies to each helicopter an opportunity to participate in the levels of government. Therefore, it is identified in the preceding applicability making of this amendment. Due determined that this final rule does not provision, regardless of whether it has been consideration has been given to the have federalism implications under otherwise modified, altered, or repaired in comment received. Executive Order 13132. the area subject to the requirements of this The one commenter states that the For the reasons discussed above, I AD. For helicopters that have been modified, applicability of the AD should be certify that this action (1) is not a altered, or repaired so that the performance limited to certain part-numbered ‘‘significant regulatory action’’ under of the requirements of this AD is affected, the tailbooms with serial number (S/N) Executive Order 12866; (2) is not a owner/operator must request approval for an 5001–5032 specified in the FAA- ‘‘significant rule’’ under DOT alternative method of compliance in approved Aerometals SB. The FAA Regulatory Policies and Procedures (44 accordance with paragraph (c) of this AD. disagrees because the specified FR 11034, February 26, 1979); and (3) The request should include an assessment of tailbooms, S/N 5001–5032, installed will not have a significant economic the effect of the modification, alteration, or with the affected bolts, may not have impact, positive or negative, on a repair on the unsafe condition addressed by remained on the same helicopters. Any substantial number of small entities this AD; and if the unsafe condition has not of the helicopters listed in the proposed under the criteria of the Regulatory been eliminated, the request should include AD may have had bolts with inadequate Flexibility Act. A final evaluation has specific proposed actions to address it. grip length installed per Aerometals been prepared for this action and it is Compliance: Required as indicated, unless STC SH5055NM or SH4801NM and contained in the Rules Docket. A copy accomplished previously. must be inspected and, if required, of it may be obtained from the FAA, To prevent loss of the tail rotor gearbox modified. Office of the Regional Counsel, due to attaching bolts of inadequate grip After careful review of the available Southwest Region, 2601 Meacham length and subsequent loss of helicopter data, including the comment noted Blvd., Room 663, Fort Worth, Texas. control, accomplish the following: above, the FAA has determined that air (a) Within 25 hours time-in-service (TIS), List of Subjects in 14 CFR Part 39 safety and the public interest require the conduct the following inspections: adoption of the rule as proposed. Air transportation, Aircraft, Aviation (1) For each tail rotor gearbox attaching However, we have added introductory safety, Safety. bolt (bolt): language for Figure 1 and placed Figure Adoption of the Amendment (i) Determine the part number (P/N). 1 directly after the AD paragraph in (ii) If the P/N cannot be determined or if which it is referenced. We have Accordingly, pursuant to the the bolt is not P/N NAS1304–26, before determined that these changes will authority delegated to me by the further flight, replace the bolt with bolt, P/ neither increase the economic burden Administrator, the Federal Aviation N NAS1304–26. on any operator nor increase the scope Administration amends part 39 of the (iii) Torque the bolt to 100–110 in-lbs and of the AD. Federal Aviation Regulations (14 CFR apply a slippage mark. The FAA estimates that this AD will: • part 39) as follows: (2) Remove the tailboom control rod and Affect 500 helicopters of U.S. determine the number of bolt threads registry; PART 39—AIRWORTHINESS protruding from each nutplate on the internal • 1 Require ⁄2 work hour per helicopter DIRECTIVES surface of the aft tailboom frame casting, P/ to determine whether a helicopter has N 369D23503, as shown in Figure 1 of this 1. The authority citation for part 39 been modified by either STC; and AD. At least one thread must protrude. If • continues to read as follows: Require 1 work hour to inspect and more than four threads protrude, add an replace the bolts for each of Authority: 49 U.S.C. 106(g), 40113, 44701. additional washer, P/N AN960D416, under approximately 40 helicopters modified the bolt head. Torque the bolt to 100–110 in- § 39.13 [Amended] by the STC’s. lbs, and reapply a slippage mark. See Figure The average labor rate is $60 per work 2. Section 39.13 is amended by 1: hour. Required parts will cost adding a new airworthiness directive to approximately $40 per helicopter. Based read as follows: BILLING CODE 4910–13–P
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BILLING CODE 4910–13–C compliance with this AD, if any, may be DEPARTMENT OF TRANSPORTATION (b) Between 2 and 10 hours TIS after obtained from the LAACO. accomplishing the requirements of paragraph (d) Special flight permits will not be Federal Aviation Administration (a) of this AD, inspect the torque on each bolt issued. by applying 100 in-lbs. If any bolt movement (e) This amendment becomes effective on 14 CFR Part 39 occurs, retorque the bolt to 100–110 in-lbs and reapply a slippage mark. Reinspect the August 1, 2002. [Docket No. 99–NE–49–AD; Amendment 39– torque between 2 and 10 hours TIS thereafter Issued in Fort Worth, Texas, on June 18, 12670; AD 2002–05–02] until no bolt movement occurs. 2002. RIN 2120–AA64 Note 2: Aerometals Service Bulletin SB– Eric Bries, 001, dated August 3, 2000, pertains to the Acting Manager, Rotorcraft Directorate, Airworthiness Directives; General subject of this AD. Aircraft Certification Service. Electric Company CF34–3A1 and –3B1 (c) An alternative method of compliance or Series Turbofan Engines; Correction adjustment of the compliance time that [FR Doc. 02–16057 Filed 6–26–02; 8:45 am] provides an acceptable level of safety may be BILLING CODE 4910–13–P AGENCY: Federal Aviation used if approved by the Manager, Los Administration, DOT. Angeles Aircraft Certification Office ACTION: Final rule; correction. (LAACO), FAA. Operators shall submit their requests through an FAA Principal SUMMARY: This document makes a Maintenance Inspector, who may concur or correction to Airworthiness Directive comment and then send it to the Manager, (AD) 2002–05–02, applicable to General LAACO. Electric Company (GE) CF34–3A1 and Note 3: Information concerning the –3B1 series turbofan engines. AD 2002– existence of approved alternative methods of 05–02 was published in the Federal
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Register on March 8, 2002 (67 FR 520–AE series reciprocating engines. magneto if it falls within the specified 10606). Information in the Mandatory That action required within 10 flight serial number range, an inspection of Inspections Requirements Table is hours after receipt of that AD, the removed magneto to verify that the incorrect in two places. In all other replacement of certain magnetos if they stop pin is still in place, and, if the stop respects, the original document remains fall within the specified serial number pin is not in place, an inspection of the the same. range, inspection of the removed engine gear train. That action was EFFECTIVE DATE: April 12, 2002. magneto to verify that the stop pin is prompted by reports of engine failures FOR FURTHER INFORMATION CONTACT: still in place, and, if the stop pin is not on certain TCM reciprocating engines. Barbara Caufield, Aerospace Engineer, in place, inspection of the engine gear This amendment requires the same Engine Certification Office, FAA, Engine train. This amendment requires the replacement and inspections and adds and Propeller Directorate, 12 New same replacement and inspections and TCM C–125 and C145 series England Executive Park, Burlington, MA adds TCM C–125 and C145 series reciprocating engines to the 01803–5299; telephone (781) 238–7146; reciprocating engines to the applicability, which were inadvertently fax (781) 238–7199. applicability, which were inadvertently omitted from the emergency AD. This omitted from the emergency AD. This SUPPLEMENTARY INFORMATION: A final condition, if not corrected, could result amendment is prompted by reports of rule airworthiness directive FR DOC. in engine failure and subsequent loss of engine failures on certain TCM 02–5527, applicable to General Electric control of the airplane. reciprocating engines. The actions Company (GE) CF34–3A1 and –3B1 specified by this AD are intended to FAA’s Determination of an Unsafe series turbofan engines, was published prevent engine failure and loss of Condition and Required Actions in the Federal Register on March 8, control of the airplane due to migration Since the unsafe condition described 2002 (67 FR 10606). The following of the magneto impulse coupling stop is likely to exist or develop on other correction is needed: pin out of the magneto frame and into engines of the same type design, this AD § 39.13 [Corrected] the gear train of the engine. is being issued to prevent engine failure and loss of control of the airplane due On page 10608, in AD 2002–05–02, in DATES: Effective July 12, 2002. Comments for inclusion in the Rules to migration of the magneto impulse Table 804 Mandatory Inspection Docket must be received on or before coupling stop pin out of the magneto Requirements, in the Part nomenclature August 26, 2002. frame and into the gear train of the column, fourth line, ‘‘HPT Rotor Outer engine. This requires: Torque Coupling (all)’’ is corrected to ADDRESSES: Submit comments in • Replacement of the magneto within read ‘‘HPT Rotor Outer Torque triplicate to the Federal Aviation 10 flight hours after the effective date, Coupling’’ and in the eleventh line, Administration (FAA), New England of this AD, if it falls within the specified ‘‘Stage 3–8 Compressor Rotor Spool Region, Office of the Regional Counsel, serial number range, and (all)’’, in the Mandatory inspection Attention: Rules Docket No. 2000–NE– 19–AD, 12 New England Executive Park, • Inspection of the removed magneto column for that line, ‘‘All Areas (FPI)’’ to verify that the stop pin is still in is corrected to read ‘‘All Non-coated Burlington, MA 01803–5299. Comments may be inspected at this location, by place, and Areas (FPI)’’. • appointment, between 8:00 a.m. and If the stop pin is not in place, Issued in Burlington, MA, on June 17, 4:30 p.m., Monday through Friday, inspection of the engine gear train. 2002. except Federal holidays. Comments may Immediate Adoption of This AD Jay J. Pardee, also be sent via the Internet using the Manager, Engine and Propeller Directorate, following address: ‘‘9-ane- Since it was found that immediate Aircraft Certification Service. [email protected]’’. Comments sent corrective action was required, notice [FR Doc. 02–16175 Filed 6–26–02; 8:45 am] via the Internet must contain the docket and opportunity for prior public comment thereon were impracticable BILLING CODE 4910–13–P number in the subject line. The service information referenced in this AD may and contrary to the public interest, and be obtained from Teledyne Continental good cause existed to make the AD DEPARTMENT OF TRANSPORTATION Motors, PO Box 90, Mobile, AL 36601; effective immediately on June 7, 2000 to telephone (888) 200–7565. Information all known U.S. owners and operators of Federal Aviation Administration regarding this action may be examined Teledyne Continental Motors (TCM) O– at the FAA, New England Region, Office 300, IO–360, TSIO–360, and LTSIO– 14 CFR Part 39 of the Regional Counsel, 12 New 520–AE series reciprocating engines. [Docket No. 2000–NE–19–AD; Amendment England Executive Park, Burlington, TCM C–125 and C145 series 39–12792; AD 2002–13–04] MA. reciprocating engines are added to the applicability, which were inadvertently RIN 2120–AA64 FOR FURTHER INFORMATION CONTACT: omitted from the emergency AD. These Michael Downs, Aerospace Engineer, conditions still exist, and the AD is Airworthiness Directives; Teledyne Chicago Aircraft Certification Office, hereby superseded in the Federal Continental Motors FAA, 2300 East Devon Avenue, Des Register as an amendment to Section AGENCY: Federal Aviation Plaines, IL 60018; telephone (847) 294– 39.13 of part 39 of the Federal Aviation Administration, DOT. 7870, fax (847) 294–7834. Regulations (14 CFR part 39) to make it ACTION: Final rule, request for SUPPLEMENTARY INFORMATION: On June 7, effective to all persons. comments. 2000, the Federal Aviation Administration (FAA) issued Comments Invited SUMMARY: This amendment supersedes Emergency airworthiness directive (AD) Although this action is in the form of emergency airworthiness directive (AD) 2000–11–51, applicable to TCM O–300, a final rule that involves requirements 2000–11–51 that was sent previously to IO–360, TSIO–360, and LTSIO–520–AE affecting flight safety and, thus, was not all known U.S. owners and operators of series reciprocating engines, which preceded by notice and an opportunity Teledyne Continental Motors (TCM) O– requires, within 10 flight hours after the for public comment, comments are 300, IO–360, TSIO–360, and LTSIO– receipt of that AD, replacement of the invited on this rule. Interested persons
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are invited to comment on this rule by of it, if filed, may be obtained from the Compliance submitting such written data, views, or Rules Docket at the location provided Compliance with this AD is required arguments as they may desire. under the caption ADDRESSES. within 10 flight hours after the effective date Communications should identify the of this AD, unless already done. List of Subjects in 14 CFR Part 39 Rules Docket number and be submitted To prevent engine failure and loss of in triplicate to the address specified Air transportation, Aircraft, Aviation control of the airplane due to migration of the magneto impulse coupling stop pin out of the under the caption ADDRESSES. All safety, Safety. magneto frame and into the gear train of the communications received on or before Adoption of the Amendment engine, do the following: the closing date for comments will be considered, and this rule may be Accordingly, pursuant to the Replacement of Magneto amended in light of the comments authority delegated to me by the (a) Replace any magneto that has a SN of received. Factual information that Administrator, the Federal Aviation 99110001 through 99129999, inclusive, with supports the commenter’s ideas and Administration amends part 39 of the a magneto that does not have a serial number in that range. suggestions is extremely helpful in Federal Aviation Regulations (14 CFR evaluating the effectiveness of the AD part 39) as follows: Inspections action and determining whether (b) Inspect each removed magneto to verify additional rulemaking action would be PART 39—AIRWORTHINESS that the impulse coupling stop pin is present. needed. DIRECTIVES If the pin is missing, do the following: Comments are specifically invited on (1) For C–125, C145, O–300, IO–360, and the overall regulatory, economic, 1. The authority citation for part 39 TSIO–360 series engines, do the following: environmental, and energy aspects of continues to read as follows: (i) Remove magnetos, alternator or the rule that might suggest a need to Authority: 49 U.S.C. 106(g), 40113, 44701. generator, and starter adapter from the modify the rule. All comments accessory case. submitted will be available, both before § 39.13 [Amended] (ii) Remove the accessory case from the crankcase and oil sump. and after the closing date for comments, 2. Section 39.13 is amended by (iii) Visually inspect the entire engine gear in the Rules Docket for examination by adding a new airworthiness directive, train for damaged or broken gears and gear interested persons. A report that Amendment 39–12792, to read as teeth. summarizes each FAA-public contact follows: (iv) Inspect visible portions of the engine concerned with the substance of this AD 2002–13–04 Teledyne Continental Motors: crankcase and accessory case for damage due to the stop pin becoming lodged between the will be filed in the Rules Docket. Amendment 39–12792. Docket No. engine gear train and the crankcase or Commenters wishing the FAA to 2000–NE–19–AD. acknowledge receipt of their comments accessory case. submitted in response to this notice Applicability (v) If the accessory case is damaged, repair This airworthiness directive (AD) is or replace the accessory case. must submit a self-addressed, stamped (vi) If the engine crankcase is damaged, postcard on which the following applicable to Teledyne Continental Motors (TCM) C–125, C145, O–300, IO–360, TSIO– disassemble the engine, and repair or replace statement is made: ‘‘Comments to the crankcase. Docket Number 2000–NE–19–AD.’’ The 360, and LTSIO–520-AE series reciprocating engines with Unison Industries (Slick) (vii) Inspect the oil pump drive gear teeth postcard will be date stamped and Magnetos, models 6314, 6324, and 6364, with and inner cam gear teeth for damage. Replace any engine drive train component that has returned to the commenter. magneto serial numbers of 99110001 through been damaged. 9912999 inclusive. These engines are used Regulatory Analysis (viii) Replace any damaged gear, and on, but not limited to Cessna 170, 170A, magnaflux the mating gears using the This final rule does not have 170B, 172, 172A through 172H, 172XP, 336, applicable engine overhaul manual. federalism implications, as defined in 337, and T303, Beagle B242–C, Cirrus SR20 (2) For LTSIO–520-AE series engines, do Executive Order 13132, because it and SR22, Globe Swift GC–1A and GC–1B, the following: Maule M4, Piper PA–28R–201T and PA–34, would not have a substantial direct (i) Remove the starter adapter, fuel pump, and Reims (Cessna) FA172, F337, and FR172. effect on the States, on the relationship vacuum pumps, accessory drive pads, and between the national government and Note 1: The magneto serial number (SN) both magnetos. the States, or on the distribution of can be found in logbooks or other (ii) Visually inspect the entire engine gear power and responsibilities among the maintenance records. If the magneto was train for damaged or broken gears and gear various levels of government. installed, or if the engine was assembled teeth. new, rebuilt, or overhauled before October (iii) If any damage has occurred, remove Accordingly, the FAA has not consulted 31, 1999, it is likely that a suspect magneto with state authorities prior to the engine from the airplane, disassemble the is not installed on the engine. engine, and inspect it for damage. If any publication of this final rule. Note 2: This airworthiness directive (AD) damage is found, repair as necessary. The FAA has determined that this (iv) Replace any damaged gear, and regulation is an emergency regulation applies to each engine identified in the preceding applicability provision, regardless magnaflux the mating gears using the that must be issued immediately to of whether it has been modified, altered, or applicable engine overhaul manual. correct an unsafe condition in aircraft, repaired in the area subject to the (v) Inspect the interior portions of the and is not a ‘‘significant regulatory requirements of this AD. For engines that engine crankcase for damage due to the stop action’’ under Executive Order 12866. It have been modified, altered, or repaired so pin becoming lodged between the gear train has been determined further that this that the performance of the requirements of and the crankcase. If the crankcase is action involves an emergency regulation this AD is affected, the owner/operator must damaged, repair or replace the crankcase. under DOT Regulatory Policies and request approval for an alternative method of (c) After the effective date of this AD, do compliance in accordance with paragraph (d) not install any Unison Industries magnetos, Procedures (44 FR 11034, February 26, model 6314, 6324, or 6364 that have a SN of 1979). If it is determined that this of this AD. The request should include an assessment of the effect of the modification, 99110001 through 99129999 inclusive, on emergency regulation otherwise would alteration, or repair on the unsafe condition any engine. be significant under DOT Regulatory addressed by this AD; and, if the unsafe Note 3: A cross-reference for part numbers Policies and Procedures, a final condition has not been eliminated, the (P/N’s) for Unison magneto model 6314 regulatory evaluation will be prepared request should include specific proposed (TCM P/N 653271), model 6324 (TCM P/N and placed in the Rules Docket. A copy actions to address it. 653292), and model 6364 (TCM P/N 649696)
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can be found in TCM Mandatory Service airworthiness maintenance program to • For LPT Shaft, change Inspection Bulletin 00–6A, dated June 8, 2000. incorporate additional inspections of from FPI to MPI. Alternative Methods of Compliance selected critical life-limited parts at The FAA agrees and has corrected each piece-part exposure. This these typographical errors in the final (d) An alternative method of compliance or amendment is prompted by an FAA adjustment of the compliance time that rule. study of in-service events involving provides an acceptable level of safety may be Concern for Lead Time used if approved by the Manager, Chicago uncontained failures of critical rotating Aircraft Certification Office (CHIACO). parts. The actions specified by this AD One commenter is concerned that for Operators must submit their requests through are intended to prevent critical life- operators to put procedures and tooling an appropriate FAA Principal Maintenance limited rotating engine part failure, in place in time to comply with the AD, Inspector, who may add comments and then which could result in an uncontained the manufacturer should release the send it to the Manager, CHIACO. engine failure and damage to the Engine Manual time limit and Note 4: Information concerning the airplane. procedural changes by Temporary existence of approved alternative methods of Revision before the issuance of the AD, compliance with this airworthiness directive, DATES: Effective date August 1, 2002. if any, may be obtained from the CHIACO. ADDRESSES: Information regarding this or, revise the AD compliance time to action may be examined, by state compliance to be within 30 days Special Flight Permits appointment, at the Federal Aviation after the issuance of the Engine Manual (e) Special flight permits may be issued in Administration (FAA), New England revision (or Temporary Revision). accordance with §§ 21.197 and 21.199 of the Region, Office of the Regional Counsel, The FAA understands the Federal Aviation Regulations (14 CFR 21.197 commenter’s concern. The FAA is aware and 21.199) to operate the aircraft to a 12 New England Executive Park, Burlington, MA. that the manufacturer has not yet issued location where the requirements of this AD Temporary Revisions to the Engine FOR FURTHER INFORMATION CONTACT: can be done. Manual time limits section. However, Diane Cook, Aerospace Engineer, Engine Effective Date the existing AD and this final rule allow Certification Office, FAA, Engine and the manufacturer up to 30 days after the (f) This amendment becomes effective July Propeller Directorate, 12 New England effective date of the AD to issue the 12, 2002. Executive Park, Burlington, MA 01803– necessary revisions to the time limits Issued in Burlington, Massachusetts, on 5299; telephone (781) 238–7133, fax section. Therefore, no action is June 17, 2002. (781) 238–7199. Jay J. Pardee, necessary to address the commenter’s SUPPLEMENTARY INFORMATION: A observation. Manager, Engine and Propeller Directorate, proposal to amend part 39 of the Federal Aircraft Certification Service. Aviation Regulations (14 CFR part 39) Question on Model Effectivity [FR Doc. 02–16174 Filed 6–26–02; 8:45 am] by superseding AD 2000–12–01, One commenter asks why the BILLING CODE 4910–13–P Amendment 39–11779 (65 FR 37031, proposed rule does not affect the June 13, 2000), which is applicable to various models of the CFM56–5A certain CFMI CFM56 series turbofan DEPARTMENT OF TRANSPORTATION engine. The FAA understands that the engines, was published in the Federal commenter is referring to the CFM56–5– Register on October 5, 2001, (66 FR Federal Aviation Administration A engine in the proposed rule and in the 50910). That action proposed to modify final rule that is an engine subset the airworthiness limitations section of 14 CFR Part 39 covered under the -5 series. The -5 the manufacturer’s manual and an air series is listed in the Applicability [Docket No. 98–ANE–38–AD; Amendment carrier’s approved continuous section, and therefore, the CFM56–5–A 39–12790; AD 2002–13–03] airworthiness maintenance program to engine is included in the applicability RIN 2120–AA64 incorporate additional inspection of this AD. requirements. After careful review of the available Airworthiness Directives; CFM Comments data, including the comments noted International (CFMI) CFM56–2, –2A, Interested persons have been afforded above, the FAA has determined that air –2B, –3, –3B, –3C, –5, –5B, –5C, and safety and the public interest require the –7B Series Turbofan Engines an opportunity to participate in the making of this amendment. Due adoption of the rule with the changes AGENCY: Federal Aviation consideration has been given to the described previously. The FAA has Administration, DOT. comments received. determined that these changes will ACTION: Final rule. neither increase the economic burden Typographical Errors on any operator nor increase the scope SUMMARY: This amendment supersedes Four commenters requested of the AD. an existing airworthiness directive (AD), typographical errors be corrected in the Economic Analysis that is applicable to certain CFM Mandatory Inspections Table as follows: International (CFMI) CFM56 series • For HPT Disk, change Engine The FAA estimates that 5,100 CFM56 turbofan engines. That AD currently Manual Section from 75–72–02 to 75– engines installed on airplanes of US requires revisions to the Airworthiness 52–02. registry would be affected by this AD Limitations Section of applicable Engine • For HPC Rear (CDP) Air Seal, and that there are approximately 2,300 Shop Manuals (ESM’s) to include change Engine Manual Section from 72– piece part annual inspections that required enhanced inspection of 52–03 to 72–31–08. would be required. It would take selected critical life-limited parts at • For LPT Stub Shaft, change Engine approximately 2,775 work hours to do each piece-part exposure. This Models from All to -2, -2A, -2B, -3, -3B, these inspections. The average labor rate amendment requires revisions to the and -3C. is $60 per work hour. The total Airworthiness Limitations Section of • For LPT Stub Shaft, change Engine estimated annual cost of the new the applicable manufacturer’s manuals Manual Section from 72–52–03 to 72– inspections on US operators is expected and air carrier’s approved continuous 55–02. to be approximately $166,500.
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Regulatory Analysis Administration amends part 39 of the requirements of this AD is affected, the owner/operator must request approval for an This final rule does not have Federal Aviation Regulations (14 CFR part 39) as follows: alternative method of compliance in federalism implications, as defined in accordance with paragraph (c) of this AD. Executive Order 13132, because it PART 39—AIRWORTHINESS The request should include an assessment of would not have a substantial direct DIRECTIVES the effect of the modification, alteration, or effect on the States, on the relationship repair on the unsafe condition addressed by between the national government and 1. The authority citation for part 39 this AD; and, if the unsafe condition has not the States, or on the distribution of continues to read as follows: been eliminated, the request should include power and responsibilities among the specific proposed actions to address it. various levels of government. Authority: 49 U.S.C. 106(g), 40113, 44701. Compliance Accordingly, the FAA has not consulted § 39.13 [Amended] with state authorities prior to Compliance with this AD is required as 2. Section 39.13 is amended by publication of this final rule. indicated, unless already accomplished. For the reasons discussed above, I removing Amendment 39–11779 (65 FR To prevent critical life-limited rotating certify that this action (1) is not a 3731, June 13, 2000), and by adding a engine part failure, which could result in an ‘‘significant regulatory action’’ under new airworthiness directive, uncontained engine failure and damage to Executive Order 12866; (2) is not a Amendment 39–12790, to read as the airplane, accomplish the following: follows: ‘‘significant rule’’ under the DOT Inspections 2002–13–03 CFM International: Regulatory Policies and Procedures (44 (a) Within the next 30 days after the Amendment 39–12790. Docket No. 98– FR 11034, February 26, 1979); and (3) if effective date of this AD, revise the ANE–38–AD. Supersedes AD 2000–12– promulgated, will not have a significant Airworthiness Limitations Section (chapter 01, Amendment 39–11779. economic impact, positive or negative, 05–00–00) of Engine Shop Manual (ESM) on a substantial number of small entities Applicability CFMI–TP.SM.4, for CFM56–2 series engines, under the criteria of the Regulatory This airworthiness directive (AD) is ESM CFMI–TP.SM.6, for CFM56–2A/–2B Flexibility Act. A final evaluation has applicable to CFM International (CFMI) series engines, ESM CFMI–TP.SM.5, for been prepared for this action and it is CFM56–2, –2A, –2B, –3, –3B, –3C, –5, –5B, CFM56–3/–3B/–3C series engines, ESM contained in the Rules Docket. A copy –5C, and –7B series turbofan engines, CFMI–TP.SM.7 for CFM56–5 series engines, of it may be obtained by contacting the installed on but not limited to McDonnell ESM CFMI–TP.SM.9 for CFM56–5B series engines, ESM CFMI–TP.SM.8 for CFM56–5C Rules Docket at the location provided Douglas DC–8 series, Boeing 737 series, Airbus Industrie A319, A320, A321, and series engines, and ESM CFMI–TP.SM.10 for under the caption ADDRESSES. A340 series, as well as Boeing C–135, E–3, CFM56–7B series engines, and for air carrier List of Subjects in 14 CFR Part 39 E–6, KC–135, KE–3, and RC–135 (military) operations, revise the approved continuous series airplanes. airworthiness maintenance program, by Air transportation, Aircraft, Aviation Note 1: This AD applies to each engine adding the following: safety, Safety. identified in the preceding applicability ‘‘MANDATORY INSPECTIONS Adoption of the Amendment provision, regardless of whether it has been (1) Perform inspections of the following modified, altered, or repaired in the area parts at each piece-part opportunity in Accordingly, pursuant to the subject to the requirements of this AD. For accordance with the Inspection/Check authority delegated to me by the engines that have been modified, altered, or section instructions provided in the Administrator, the Federal Aviation repaired so that the performance of the applicable manual sections listed below:
Engine Engine models Part name manual Inspection section
All Models ...... Fan Disk (All Part Numbers (P/N)) ...... 72–21–03 Disk Fluorescent Penetrant Inspection (FPI) and Disk Bore and Dovetail Eddy Current Inspection (ECI).
All Models ...... Fan Shaft (All P/N) ...... 72–22–01 Magnetic Particle Inspection (MPI).
CFM56–2, –2A, –2B, –3, –3B, HPT Disk (All P/N) ...... 72–52–02 FPI, Disk Bore ECI and Disk Rim Bolt Hole(s) and –3C. ECI.
CFM56–5,–5B, –5C, and –7B ..... HPT Disk (All P/N) ...... 72–52–02 FPI, Disk Bore ECI.
CFM56–2 ...... HPT Front Rotating Air Seal (All P/N) ...... 72–52–03 FPI, Seal Bore ECI and Bolt Hole(s) or Focused FPI as applicable.
CFM56–2A, –2B, –3, –3B, and HPT Front Rotating Air Seal (All P/N) ...... 72–52–03 FPI, Seal Bore ECI and Bolt Hole(s) ECI. –3C.
CFM56–5, –5B, –5C, and –7B .... HPT Front Rotating Air Seal (All P/N) ...... 72–52–03 FPI, Seal Bore ECI and Bolt Hole(s) Focused FPI.
All Models ...... HPC Stage 1–2 Spool (All P/N) ...... 72–31–04 FPI.
All Models ...... HPC Stage 3 Disk (All P/N) ...... 72–31–05 FPI.
All Models ...... HPC Stage 4–9 Spool (All P/N) ...... 72–31–06 FPI.
All Models ...... HPC Front Shaft (All P/N) ...... 72–31–07 FPI
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Engine Engine models Part name manual Inspection section
All Models ...... HPC Rear (CDP) Air Seal (All P/N) ...... 72–31–08 FPI.
All Models ...... LPT Stage 1 Disk (All P/N) ...... 72–54–03 FPI.
All Models ...... LPT Stage 2 Disk (All P/N) ...... 72–54–03 FPI.
All Models ...... LPT Stage 3 Disk (All P/N) ...... 72–54–03 FPI
All Models ...... LPT Stage 4 Disk (All P/N) ...... 72–54–03 FPI.
CFM56–5C...... LPT Stage 5 Disk (All P/N) ...... 72–54–03 FPI.
All Models ...... LPT Rotor Support (All P/N) ...... 72–54–05 FPI.
All Models ...... LPT Shaft (All P/N) ...... 72–55–01 MPI.
CFM56–2, –2A, –2B, –3, –3B LPT Stub Shaft (All P/N) ...... 72–55–02 FPI. and –3C.
(2) For the purposes of these mandatory result from revising the Airworthiness SECURITIES AND EXCHANGE inspections, piece-part opportunity means: Limitations Section of the applicable ESM COMMISSION (i) The part is considered completely and the air carrier’s continuous airworthiness disassembled when accomplished in program. Alternatively, certificated air 17 CFR Parts 231 and 241 accordance with the disassembly instructions carriers may establish an approved system of in the manufacturer’s engine manual; and record retention that provides a method for (ii) The part has accumulated more than [Release Nos. 33–8107; 34–46101; File No. 100 cycles in service since the last piece-part preservation and retrieval of the maintenance S7–23–02] opportunity inspection, provided that the records that include the inspections resulting part was not damaged or related to the cause from this AD, and include the policy and Commission Guidance on the for its removal from the engine.’’ procedures for implementing this alternate Application of Certain Provisions of (b) Except as provided in paragraph (c) of method in the air carrier’s maintenance the Securities Act of 1933, the this AD, and notwithstanding contrary manual required by § 121.369(c) of the Securities Exchange Act of 1934, and provisions in § 43.16 of the Federal Aviation Federal Aviation Regulations (14 CFR Rules Thereunder to Trading in Regulations (14 CFR 43.16), these mandatory 121.369 (c)); however, the alternate system Security Futures Products inspections must be performed only in must be accepted by the appropriate PMI and accordance with the Time Limits section of require the maintenance records be AGENCY: Securities and Exchange the manufacturer’s ESM. maintained either indefinitely or until the Commission. Alternative Methods of Compliance work is repeated. Records of the piece-part ACTION: Interpretation; request for (c) An alternative method of compliance or inspections are not required under comments. adjustment of the compliance time that § 121.380(a)(2)(vi) of the Federal Aviation provides an acceptable level of safety may be Regulations (14 CFR 121.380(a)(2)(vi)). All SUMMARY: The Commission is used if approved by the Manager, Engine other operators must maintain the records of publishing its views regarding the Certification Office. Operators must submit mandatory inspections required by the application of certain provisions of the their request through an appropriate FAA applicable regulations governing their Principal Maintenance Inspector, who may federal securities laws to trading in operations. add comments and then send it to the security futures products. We also are Manager, Engine Certification Office. Note 3: The requirements of this AD have soliciting comment. been met when the ESM changes are made Note 2: Information concerning the DATES: Effective Date: The guidance is and air carriers have modified their existence of approved alternative methods of effective on June 27, 2002. compliance with this airworthiness directive, continuous airworthiness maintenance plans if any, may be obtained from the Engine to reflect the requirements in the applicable ADDRESSES: Comments should be Certification Office. ESM. submitted in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Special Flight Permits Effective Date Commission, 450 5th Street, NW., (d) Special flight permits may be issued in (f) This amendment becomes effective on Washington, DC 20549–0609. accordance with §§ 21.197 and 21.199 of the August 1, 2002. Comments also may be submitted Federal Aviation Regulations (14 CFR 21.197 electronically at the following E-mail and 21.199) to operate the airplane to a Issued in Burlington, Massachusetts, on address: [email protected]. All location where the requirements of this AD June 17, 2002. can be accomplished. comment letters should refer to File No. Jay J. Pardee, S7–23–02; this file number should be Continuous Airworthiness Maintenance Manager, Engine and Propeller Directorate, included on the subject line if E-mail is Program Aircraft Certification Service. used. All comments received will be (e) FAA-certificated air carriers that have [FR Doc. 02–16173 Filed 6–26–02; 8:45 am] available for public inspection and an approved continuous airworthiness BILLING CODE 4910–13–P copying in the Commission’s Public maintenance program in accordance with the Reference Room, 450 5th Street, NW., record keeping requirement of § 121.369(c) of the Federal Aviation Regulations (14 CFR Washington, DC 20549–0102. 121.369(c)) of this chapter must maintain Electronically submitted comment records of the mandatory inspections that letters will be posted on the
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Commission’s Internet site (http:// With respect to discussions Accordingly, security futures products www.sec.gov).1 concerning other broker-dealer issues must be traded on trading facilities and FOR FURTHER INFORMATION CONTACT: administered by the Division of Market through intermediaries that are With respect to discussions concerning Regulation contact Catherine McGuire, registered with both the Commission Securities Act and director, officer, and Chief Counsel, Paula Jenson, Deputy and the CFTC. Given this new principal stockholder issues Chief Counsel, Kenneth Rosen, Special regulatory framework, various industry administered by the Division of Counsel, or Christina McGlosson, participants have requested guidance Corporation Finance, contact Robert Special Counsel, (202) 942–0073, Office regarding the application of certain Plesnarski, Special Counsel (Securities of Chief Counsel, Division of Market provisions of the federal securities laws Act Rule 144) or Anne Krauskopf, Regulation, Securities and Exchange to trading in security futures products. Special Counsel (rules under Exchange Commission, 450 Fifth Street, NW., Section II.A. below addresses some of Act Section 16), (202) 942–2900, Office Washington, DC 20549–1001. the questions that may arise under of Chief Counsel, Division of SUPPLEMENTARY INFORMATION: certain statutory provisions and rules administered by the Commission’s Corporation Finance, Securities and I. Background Exchange Commission, 450 Fifth Street, Division of Corporation Finance. NW., Washington, DC 20549–0402. On December 21, 2000, Congress Section II.B. addresses some of the enacted the Commodity Futures With respect to discussions questions that may arise under certain Modernization Act of 2000 (‘‘CFMA’’),2 concerning mergers and acquisitions statutory provisions and rules addressing the regulation of security issues administered by the Division of administered by the Commission’s futures products.3 Security futures Corporation Finance, contact Pamela Division of Market Regulation. Because products are securities for purposes of Carmody, Special Counsel, (202) 942– security futures products are new the federal securities laws, including the 2920, Office of Mergers & Acquisitions, products, the guidance provided is Securities Act of 1933 (‘‘Securities Act’’) Division of Corporation Finance, based on how we expect markets in and the Securities Exchange Act of 1934 Securities and Exchange Commission, these products to operate. As these (‘‘Exchange Act’’), and are ‘‘futures’’ for 450 Fifth Street, NW., Washington, DC markets develop and we learn more purposes of the Commodity Exchange 20549–0303. about their operations and security Act (‘‘CEA’’).4 Because these products futures products themselves, we may With respect to general questions are both securities and futures, the need to revisit some of the guidance about the interpretive positions CFMA established a framework for the provided today or provide guidance on expressed by the Division of joint regulation of these products by the additional issues.6 Corporation Finance in this release, Securities and Exchange Commission contact N. Sean Harrison, Special (‘‘SEC’’ or ‘‘Commission’’) and the II. Discussion Counsel, (202) 942–2910, Office of Commodity Futures Trading A. Guidance on Statutory Provisions Rulemaking, Division of Corporation Commission (‘‘CFTC’’). and Rules Administered by the Division Finance, Securities and Exchange In creating this framework, the CFMA of Corporation Finance Commission, 450 Fifth Street, NW., exempted security futures products, as Washington, DC 20549–0310. well as certain security futures products 1. Securities Act and Director, Officer, With respect to discussions intermediaries and markets, from and Principal Stockholder Issues concerning market supervision issues certain provisions of the Securities Act, a. Securities Act Registration and administered by the Division of Market the Exchange Act, and the CEA, and Exemptions From Registration: Regulation contact Theodore Lazo, directed the Commission and the CFTC Securities Act Rule 144 Senior Special Counsel, or Andrew to coordinate in certain aspects the Shipe, Special Counsel, (202) 942–0160, regulation of dually regulated persons.5 Every offer or sale of a security in Office of Market Supervision, Division interstate commerce or by use of the of Market Regulation, Securities and 2 See Pub. L. 106–554, 114 Stat. 2763. mails must either be registered under Exchange Commission, 450 Fifth Street, 3 See Exchange Act section 3(a)(56) (15 U.S.C. the Securities Act or exempt from NW., Washington, DC 20549–1001. 78c(a)(56)), Securities Act Section 2(a)(16) (15 U.S.C. 77b(a)(16)), and CEA section 1a(32) (7 U.S.C. 15(b)(12) of the Exchange Act. The CFMA also With respect to discussions 1a(32)) define ‘‘secruity futures product’’ as a requires the Commission, in consultation with the concerning trading practices issues security future or an option on a security future. CFTC, to issue rules, regulations, or orders as administered by the Division of Market 4 Exchange Act section 3(a)(10) (15 U.S.C. necessary to avoid duplicative or conflicting Regulation contact James Brigagliano, 78c(a)(10)) defines a ‘‘security’’ to include a security regulations applicable to firms that are subject to all future. The Securities Act defines a ‘‘security’’ to of the provisions of the Exchange Act and the CEA Assistant Director, Nancy Oremland, include a security future in section 2(a)(1) (15 with respect to the treatment of customer funds, Special Counsel (Regulation M and U.S.C. 77b(a)(1)). The term ‘‘security future’’ is securities, or property, maintenance of books and Exchange Act Rule 14e–5), Kevin defined in Exchange Act section 3(a)(55) and in records, financial reporting, or other financial Campion, Special Counsel (Exchange CEA section 1a(31) (7 U.S.C. 1a(31)) as a contract responsibility rules involving security futures of sale for future delivery of a single security or of products. See Exchange Act section 15(c)(3)(B) [15 Act Rule 14e–4), Joan Collopy, Special a narrow-based security index. See also Securities U.S.C. 78o(c)(3)(B)]; CEA section 4d(c) (7 U.S.C. Counsel (Exchange Act Rule 10b–18), or Act section 2(a)(16) (15 U.S.C. 77b(a)(16)). 6d(c)). Greg Dumark, Special Counsel 5 Specifically, certain markets and intermediaries 6 In addition, some of the guidance provided in (Exchange Act Rule 10a–1 and Rule 3b– that are registered with only the CFTC may register this release relates to security futures instead of all 3), (202) 942–0772, Office of Trading with the SEC by submitting a written notice that is security futures products. As noted above, security effective upon filing. Exchange Act §§ 6(g) and futures products are a broader set of instruments Practices, Division of Market 15(b)(11) (15 U.S.C. 78f(g) and 78o(b)(11)). Cf. CEA that include options on security futures as well as Regulation, Securities and Exchange §§ 5f and 4f(a)(2) (7 U.S.C. 7b–1 and 6f(a)(2)). A security futures themselves. See supra note 3. Commission, 450 Fifth Street, NW., ‘‘notice-registered’’ (as opposed to a fully registered) Should the Commission in coordination with the Washington, DC 20549–1001. broker-dealer is exempt from provisions specified CFTC permit the trading of such instruments in the in section 15(b)(11)(B) of the Exchange Act. A future, see section 6(h)(6) of the Exchange Act (15 ‘‘notice-registered’’ exchange is exempt from U.S.C. 78f(h)(6)), at that time, the Commission 1 We do not edit personal, identifying provisions specified in section 6(g)(4) of the could look at the function of such instruments to information, such as name or e-mail addresses, from Exchange Act, and certain floor brokers on such determine whether this guidance for security electronic submissions. Submit only information exchanges are exempt from broker-dealer futures is appropriate for options on security you wish to make publicly available. registration and the provisions specified in section futures.
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registration.7 Securities Act Rule 144 8 circumvent the registration of the underlying securities would provides a nonexclusive safe harbor for requirements of Section 5 with respect either have to be registered or satisfy the the unregistered resale of restricted 9 to the issuer’s securities underlying the conditions of an exemption from and other securities held by affiliates of security futures product. As amended, registration. The non-affiliate seller of an issuer, as well as for the unregistered Section 2(a)(3) provides ‘‘[a]ny offer or restricted securities must, therefore, resale of restricted securities by non- sale of a security futures product by or establish that it is not an ‘‘underwriter’’ affiliates of the issuer. The Rule sets on behalf of the issuer of the securities of the underlying securities. The non- forth specific standards that, if met, underlying the security futures product, affiliate seller may rely on Rule 144 to permit persons who hold such securities an affiliate of the issuer, or an establish that it is not an ‘‘underwriter’’ to sell them publicly without being underwriter, shall constitute a contract of the securities. deemed to be ‘‘underwriters’’ under the for sale of, sale of, offer for sale, or offer Q3: In analyzing whether a seller of Securities Act 10 and in reliance on the to sell the underlying securities.’’ securities that are sold by virtue of the Securities Act section 4(1) exemption Accordingly, a transaction in a security sale of a security future may rely on from registration.11 futures product on a security of an Rule 144 in connection with that sale, The CFMA amended the Securities issuer by such persons also is a when should the sale of the underlying Act in the following manner: transaction in the issuer’s underlying securities be deemed to have occurred? • It amended Section 2(a)(1) 12 to security that must be registered unless A3: The transaction in the underlying include security futures products within an exemption from registration is securities is deemed to have occurred at the definition of ‘‘security.’’ available.20 • It added section 3(a)(14) 13 to the same time as the transaction in the Q1: May an affiliate of an issuer rely related security future. Accordingly, in exempt the offer and sale of a security upon Rule 144 in connection with the futures product from the registration determining the ability to rely on Rule offer or sale of securities of that issuer 144, a seller should assess that reliance requirements of Section 5 if the security that occurs by virtue of the affiliate’s futures product is: (1) Traded on a at the time of the sale of the security offer or sale of a security future? future.21 national securities exchange or a A1: Yes. Section 2(a)(3) provides that national securities association registered Q4: How should a seller of a security the offer or sale of the security future by under section 15A(a) of the Exchange future assess his or her reliance on Rule the affiliate also is a concurrent offer or Act 14 and (2) cleared by a clearing 144 in connection with the offer or sale sale of the underlying securities. agency that is either registered under of the securities underlying that security Accordingly, the concurrent offer or sale section 17A of the Exchange Act 15 or future? of the underlying securities would exempt from registration under section A4: The seller should analyze the either have to be registered or satisfy the 17A(b)(7) of the Exchange Act.16 transaction for purposes of Rule 144 as conditions of an exemption from • It amended section 2(a)(3) 17 to if it were a transaction in the underlying registration. The affiliate may rely on ensure that security futures products securities themselves. Rule 144 to establish the availability of could not be used by an issuer,18 its Q5: May a non-affiliate settle a affiliates 19 or underwriters to the section 4(1) exemption. Q2: May a person who is not an security future transaction with affiliate of the issuer rely upon Rule 144 restricted securities? 7 See section 5 of the Securities Act (15 U.S.C. A5: A non-affiliate may settle a 77e). in connection with the offer or sale of 8 17 CFR 230.144. restricted securities of the issuer that security future transaction with 9 The term ‘‘restricted securities’’ is defined in occurs by virtue of the person’s offer or restricted securities only if it could rely Rule 144(a)(3) (17 CFR 230.144(a)(3)). sale of a security future? upon Rule 144 to offer and sell the 10 Section 2(a)(11) of the Securities Act (15 U.S.C. underlying restricted securities at the 77b(a)(11)) defines an ‘‘underwriter’’ as ‘‘[a]ny A2: Yes. If the non-affiliate is an person who has purchased from an issuer with a ‘‘underwriter’’ of the underlying time it offered and sold the security view to, or offers or sells for an issuer in connection securities, its offer or sale of the security future. with, the distribution of any security, or future also is a concurrent offer or sale Q6: What information should be participates or has a direct or indirect participation in any such undertaking, or participates or has a of the underlying securities. provided in the Form 144 filed for participation in the direct or indirect underwriting Accordingly, the concurrent offer or sale securities of the issuer that underlie a of any such undertaking * * *’’ The definition security future? applies to any person. No distinction is made 20 All security futures establish obligations on the A6: The Form 144 should be between professional securities dealers and purchaser and seller of the security futures to individual investors; any person who performs one completed to cover the sale of either: (i) Deliver the underlying securities (in the of the specified functions in relation to an offering case of a seller of a security future) or accept underlying securities. Persons filing the of securities is an underwriter within the meaning Form 144 should make reference to the of section 2(a)(11). delivery of the underlying securities (in the case of a purchaser of a security future); or (ii) make or security future in the ‘‘Remarks’’ 11 Securities Act section 4(1) (15 U.S.C. 77d(1)) accept a cash payment at maturity of the security states that the section 5 registration requirements section. For example, disclosure could future to settle any gains or losses based on the shall not apply to transactions by any person other difference between the settlement price of the read: ‘‘This Form 144 reflects the than an issuer, underwriter, or dealer. security future on the last trading day and the price intended deemed sale of 10,000 shares 12 15 U.S.C. 77b(a)(1). of the security future when the security future was 13 of ABC issuer’s securities that underlie 15 U.S.C. 77c(a)(14). originated. The terms of the security future dictate (describe security future’s material 14 15 U.S.C. 78o–3(a). whether it is settled by physical delivery of the 15 15 U.S.C. 78q–1. underlying securities or by cash payment. terms).’’ 16 15 U.S.C. 78q–l(b)(7). Issues related to settlement method are raised 17 15 U.S.C. 77b(a)(3). throughout this interpretive release. However, 21 The provision in section 2(a)(3) stating that 18 The term ‘‘issuer’’ is defined in section 2(a)(4) settlement method may or may not affect the ‘‘(a)ny offer or sale of a security futures product by of the Securities Act and includes ‘‘every person application of particular statutory provisions or or on behalf of the issuer of the securities who issues or proposes to issue any security * * *’’ rules. This release delineates where settlement underlying the security futures product, an affiliate (15 U.S.C. 77b(a)(4)). method would affect the guidance provided. The of the issuer, or an underwriter, shall constitute a 19 An ‘‘affiliate’’ of an issuer is defined as a Commission typically does not view settlement contract for sale of, sale of, offer for sale, or offer ‘‘person that directly, or indirectly through one or method of a derivative product as determinative of to sell the underlying securities(,)’’ applies more intermediaries, controls, or is controlled by, whether such product is or is not a security. See, regardless of whether a security future calls for or is under common control with, such issuer’’ (17 e.g., infra note 97 (citing Caiola amicus curiae physical delivery of the underlying security or cash CFR 230.405). brief). settlement.
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b. Disclosure Requirements and Short thereunder.29 Would the equity underlying equity security increases, Swing Profit Recovery: Exchange Act securities underlying a security future including, but not limited to, a long Section 16 be counted for purposes of determining convertible security, a long call option, The CFMA amended section 16 of the whether the purchaser of the security or a short put option position. Is the Exchange Act so that it covers future is a ‘‘beneficial owner’’ of more purchase of a security future by an ownership of, and transactions in, than ten percent of a class of equity insider, or a long security future security futures products.22 Section 16 security? position, a ‘‘call equivalent position?’’ applies to every person who is the A7: Yes. A person is deemed to be the A9: Yes. Because the purchaser of a beneficial owner of more than 10% of beneficial owner of the equity securities security future, regardless of whether underlying a security future that the security future calls for cash or any class of equity security registered 30 under section 12 of the Exchange Act, requires physical settlement of the physical settlement, would benefit from and each officer and director long security future if the security future an increase in value of the underlying is held within 60 days of the last trading equity security, the purchase of a (collectively ‘‘insiders’’) of the issuer of 31 such security. Generally: day of the security future. However, security future establishes a call • Section 16(a) requires an insider to the purchaser of a cash-settled security equivalent position. file an initial report with the future (i.e., a security future that, by its Q10: Exchange Act Rule 16a–1(h) 36 Commission disclosing his or her terms, must be settled by a cash defines a ‘‘put equivalent position’’ as a beneficial ownership of all equity payment) is not deemed to beneficially derivative security position that securities of the issuer upon becoming own the securities underlying that increases in value as the value of the an insider. To keep this information security future for purposes of underlying equity decreases, including, current, section 16(a) also requires determining whether the purchaser is a but not limited to, a long put option or insiders to report changes in such ‘‘beneficial owner’’ of more than ten a short call option position. Is the sale holdings with respect to each month in percent of the underlying class of equity of a security future by an insider, or a which such a change occurs.23 security, because he or she does not short security future position, a put • Section 16(b) provides the issuer (or have the right to acquire beneficial equivalent position? 32 shareholders suing on behalf of the ownership of the underlying security. A10: Yes. Because the seller of a Q8: Is a security future on an equity issuer) a private right of action to security future, regardless of whether security or a narrow-based security recover from an insider any profit the security future calls for cash or index 33 a ‘‘derivative security’’ under realized by the insider from any physical settlement, would benefit from purchase and sale (or sale and purchase) the Section 16 rules? A8: Yes. Exchange Act Rule 16a– a decrease in value in the underlying of any equity security of the issuer 34 equity security, the sale of a security within any period of less than six 1(c) generally defines the term ‘‘derivative securities’’ as ‘‘any option, future establishes a put equivalent months.24 position. • warrant, convertible security, stock Section 16(c) makes it unlawful for Q11: Exchange Act Rule 16b–6(a) 37 an insider to sell any equity security of appreciation right or similar right with an exercise or conversion privilege at a states that the establishment of, or the issuer if the insider: (1) Does not increase, in a call equivalent position, or own the security sold; or (2) owns the price related to an equity security, or similar securities with a value derived liquidation of, or decrease, in a put security, but does not deliver it against equivalent position shall be deemed a 25 from the value of an equity security,’’ the sale within specified time periods. purchase of the underlying security for The following responses address how subject to specific exclusions. A security future on an equity security or a narrow- purposes of section 16(b). Conversely, section 16 would apply to security Rule 16b–6(a) states that the 26 based security index would be a futures in some common situations. establishment of, or increase, in a put Q7: Section 16 applies to every person ‘‘similar security with a value derived equivalent position, or liquidation of, or who is directly or indirectly the from the value of an equity security’’ decrease, in a call equivalent position beneficial owner of more than ten and thus a ‘‘derivative security’’ within shall be deemed a sale of the underlying percent of any class of equity security the meaning of Rule 16a–1(c), regardless securities for purposes of section 16(b). (other than an exempted security) of whether the security future calls for How would purchases and sales of registered under section 12 of the physical or cash settlement. 35 security futures be subject to matching Exchange Act.27 Exchange Act Rule Q9: Exchange Act Rule 16a–1(b) for Section 16(b) short-swing profit 16a–1(a)(1) 28 provides that for purposes defines a ‘‘call equivalent position’’ as a recovery purposes? of determining whether a person is a derivative security position that A11: The purchase of a security future ‘‘beneficial owner’’ of more than ten increases in value as the value of the (‘‘call equivalent position’’) would be percent of any class of equity securities, 29 See infra Section II.A.2. matchable with any of the following the term ‘‘beneficial owner’’ shall mean 30 See supra note 20. transactions within any period of less any person who is deemed a ‘‘beneficial 31 The last trading day is the day on which the than six months: owner’’ pursuant to section 13(d) of the security future terminates trading, i.e., the last day • Any disposition of the equity Exchange Act and the rules in which an open position in a security future, either a long or short position, can be closed or security underlying the security future; liquidated either by buying or selling an opposite • Any liquidation or decrease in a 22 Exchange Act section 16(f) (15 U.S.C. 78p(f)). position. Any security future that has not been 23 ‘‘call equivalent position’’ on the same Exchange Act section 16(a) (15 U.S.C. 78p(a)). liquidated by the close of trading for that security 24 class of equity security underlying the Exchange Act section 16(b) (15 U.S.C. 78p(b)). future on the last trading day must be settled 25 pursuant to the terms of the security future. security future; or Exchange Act section 16(c) (15 U.S.C. 78p(c)). • 26 These examples and other examples in this 32 See infra Section II.A.2 (discussing the Any establishment or increase of a section are for purposes of section 16 of the application of the beneficial ownership rules of ‘‘put equivalent position’’ on the same Exchange Act only and do not address any other Regulation 13D). class of equity security underlying the issues under the Exchange Act or the Securities Act. 33 The term ‘‘narrow-based security index’’ is For a discussion of the Securities Act, see Section defined in section 3(a)(55) of the Exchange Act [15 security future. II.A.1.a. U.S.C. 78c(a)(55)]. 27 15 U.S.C. 78l. 34 17 CFR 240.16a–1(c). 36 17 CFR 240.16a–1(h). 28 17 CFR 240.16a–1(a)(1). 35 17 CFR 240.16a–1(b). 37 17 CFR 240.16b–6(a).
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The sale of a security future (‘‘put Example 3: For purposes of this at a fixed exercise price due to the equivalent position’’) would be example, assume that W owns 10,000 exercise or conversion of a call matchable with any of the following shares of XYZ common stock. On equivalent position, or the disposition transactions within any period of less January 3, 2003, W sells 100 June of underlying securities at a fixed than six months: delivery security futures on XYZ exercise price due to the exercise of a • Any acquisition of the equity common stock. On April 3, 2003, W put equivalent position.41 The Rule security underlying the security future; sells put options overlying 10,000 further provides, however, that the • Any liquidation or decrease in a shares of XYZ common stock. acquisition of underlying securities ‘‘put equivalent position’’ on the same Interpretation: W’s January sale of the from the exercise of an out-of-the- class of equity security underlying the security futures established a ‘‘put money 42 option, warrant or right shall security future; or equivalent position’’ with respect to not be exempt. • Any establishment or increase of a 10,000 shares of XYZ common stock. (a) Would the settlement of a security ‘‘call equivalent position’’ on the same W’s subsequent sale of the put options future through delivery or receipt of the class of equity security underlying the established a ‘‘call equivalent position’’ underlying equity security be exempted security future. (W is obligated to purchase the XYZ by Rule 16b–6(b)? (b) Would cash settlement of a Examples. For purposes of the shares underlying the put options if the security future be exempted by Rule following four examples, assume that holder of the options exercises them) and is matchable with his January sale 16b–6(b)? the common stock of Company XYZ is A12: (a) The disposition of a security registered under section 12 of the of the security futures. Example 4: On January 3, 2003, W future and delivery or receipt of the Exchange Act. purchases 100 September delivery underlying security upon settlement Example 1: On January 3, 2003, W, an security futures on XYZ common stock. would be exempted by Rule 16b–6(b). officer of Company XYZ, purchases On February 10, 2003, W purchases The provision in Rule 16b–6(b) that 10,000 shares of XYZ common stock. On 10,000 shares of XYZ common stock. On excludes from the exemption the September 3, 2003, W purchases 100 September 5, 2003, W sells 100 exercise of out-of-the-money options December delivery security futures on September delivery security futures on would not apply. Unlike certain option XYZ common stock. Each security XYZ common stock, to offset 39 the contracts, where the holder of the future is on 100 shares of XYZ common security futures purchased in January. option can choose whether or not and stock. This purchase establishes a ‘‘call Interpretation: Because W’s sale of the (in the case of American style options) equivalent position’’ with respect to security futures occurred more than six when to exercise the option, a security 10,000 shares of XYZ common stock. On months after both his January purchase future creates an obligation either to November 3, 2003, W sells 10,000 of the security futures and his February purchase or sell the underlying shares of XYZ common stock. purchase of the XYZ common stock, the securities at a specified future date. Interpretation: W’s September purchase offsetting sale would not be matchable Accordingly, the physical settlement of of the security futures would be with either purchase. However, the a security future is more similar to a matchable with W’s November sale of offsetting sale would be matchable with conversion for purposes of Rule 16b– the XYZ shares. Exchange Act Rule 16b- W’s purchase of the XYZ shares in 6(b). An out-of-the-money conversion 38 6(c)(2) would apply to the February, if it occurred within six that otherwise complies with Rule 16b– determination of recoverable profits. months of the February purchase, and it 6(b) is exempt under that Rule. Example 2: On January 3, 2003, W would be matchable with either the (b) For purposes of section 16, cash purchases 100 September delivery January or February purchase settlement of a security future, like the security futures on XYZ common stock. (depending upon which transaction had cash settlement of any other derivative On April 3, 2003, W sells call options the lowest purchase price) if it occurred security, involves the deemed sale of the on 5,000 shares of XYZ common stock. within six months of the January underlying securities in addition to the Interpretation: W’s January purchase of purchase.40 transactions described in (a) above that the security futures established a ‘‘call Q12: Exchange Act Rule 16b–6(b) take place upon physical settlement.43 equivalent position’’ with respect to exempts from Section 16(b) the closing Where an insider holds a long security 10,000 shares of XYZ common stock. of a derivative security position as a future position, cash settlement would W’s subsequent sale of the call options result of its exercise or conversion, and involve the insider’s deemed sale of the established a ‘‘put equivalent position’’ the acquisition of underlying securities underlying securities back to the with respect to 5,000 shares of XYZ counterparty. Where an insider holds a common stock and is matchable with 39 Offset refers to the method of closing or short security future position, cash his purchase of 50 of the September liquidating an outstanding long or short security settlement would involve the insider’s future position through an opposite trade (i.e., an delivery security futures. equal and opposite transaction to the one that deemed repurchase of the underlying opened the position). Offset will occur only if the securities from the counterparty. Rule 38 17 CFR 240.16b–6(c)(2). Exchange Act Rule purchase or sale matches the original security 16b-6(b) exempts only the transactions 16b-6(c)(2) sets forth the methods for determining future transaction with respect to the underlying described in (a) above, and does not the profits recoverable under section 16(b) from security, number of security futures, and delivery short-swing transactions involving derivative month. Once a party has offset his or her securities with different characteristics but related outstanding security future position, the party has 41 17 CFR 240.16b–6(b). to the same underlying security (e.g., the purchase no further obligations with respect to the original 42 For a person who has a long security future and sale of call options with different strike prices transaction or the offsetting transaction. position, the security future would be ‘‘out-of-the- and expiration dates), and from short-swing 40 See, for example, Smolowe v. Delendo Corp., money,’’ as that term is used in Rule 16b–6(b), if transactions involving derivative securities and the 136 F.2d 231 (2d Cir. 1943), cert. denied 320 U.S. the settlement price of the security future is above underlying security. Under Rule 16b–6(c)(2), profits 751 (1943), regarding ‘‘lowest price in highest price the market price of the underlying security on the from short-swing transactions involving derivative out’’ profit computation. Under this method, settlement date. Conversely, a short security future securities having different characteristics but recoverable profit is computed by matching the position would be ‘‘out-of-the money’’ if the related to the same underlying security, or highest sale price with the lowest purchase price settlement price of the security future is above the involving derivative securities and the underlying within six months, the next highest sale price with market price of the underlying security on the security, cannot exceed the difference in price of the next lowest purchase price within six months, settlement date. the underlying security on the date of purchase or and so on, until all shares have been included in 43 See Securities Exchange Act Release No. 28869 sale and the date of sale or purchase. the computation. (February 8, 1991), 56 FR 7242 (February 21, 1991).
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exempt either of these additional amount of the underlying securities 2003). S wishes to buy put options on transactions. sufficient to cover his or her delivery 1000 shares of XYZ common stock on or Q13: Generally, persons subject to the obligations under the security future. In after December 19, 2003. Interpretation: reporting requirements of section 16 computing the amount of underlying S becomes obligated to accept delivery must file a report on Form 4 within ten securities otherwise owned, an insider of the 1000 XYZ common shares days after the close of any month in may include securities of the same class underlying the 10 December delivery which a change in beneficial ownership as the underlying securities on deposit security futures after the close of trading has occurred in the equity securities of in a margin account. on December 19, 2003. Accordingly, as the subject issuer. Unlike most Example: The common stock of of the close of trading on December 19, transactions exempt from section 16(b), Company XYZ is registered under 2003, S is deemed to otherwise own which are eligible for deferred reporting section 12 of the Exchange Act. On May those 1000 XYZ common shares for on Form 5, exercises and conversions of 5, 2003, S, an officer of Company XYZ, purposes of Rule 16c–4. Therefore, S’s derivative securities that are exempt owns 10,000 shares of XYZ common purchase of put options on 1000 shares from section 16(b) must be reported on stock. On May 5, 2003, S sells 100 of XYZ common stock after the close of Form 4.44 General Instruction 8 of Form December delivery security futures on trading on December 19, 2003, would be 4 specifies transaction codes that should XYZ common stock. This sale exempt from Section 16(c) pursuant to be used to identify the type of establishes a ‘‘put equivalent position’’ Rule 16c–4. with respect to 10,000 shares of XYZ transaction being reported. What codes 2. Mergers and Acquisitions Issues should be used to identify insiders’ common stock (each security future is transactions in security futures? on 100 shares of Company XYZ Beneficial Ownership Disclosure A13: Transactions in security futures common stock). S deposits 2,000 shares Requirements: Exchange Act Regulation should be reported as follows: of Company XYZ common stock as 13D 45 • Purchase of a security future should margin on the security futures. Rule 13d–1 of the Exchange Act 46 be identified in Table II, column 4 of the Interpretation: Including the 2,000 requires any person who becomes a form with transaction code ‘‘P.’’ shares of XYZ common stock S beneficial owner of more than five • Sale of a security future should be deposited for margin, S otherwise owns percent of a class of equity security 47 to identified in Table II, column 4 of the a sufficient amount of XYZ shares to file a statement containing the form with transaction code ‘‘S.’’ cover his obligation to deliver 10,000 • information required by either Schedule Physical settlement of a long XYZ shares upon settlement of the 13D or Schedule 13G.48 Under security future should be identified in security futures within the meaning of Exchange Act Rule 13d–3(a),49 a person Table I, column 3 and Table II, column Rule 16c–4. S must continue to 4 with transaction code ‘‘C.’’ otherwise own 10,000 shares of XYZ 45 Regulation 13D also encompasses the Schedule • Physical settlement of a short common stock for the duration of the 13G requirements. security future should be identified in put equivalent position with respect to 46 17 CFR 240.13d–1. Table I, column 3 and Table II, column the 100 December delivery security 47 For the purpose of Regulation 13D, the term 4 with transaction code ‘‘C.’’ futures. ‘‘equity security’’ is defined in Rule 13d–1(i) (17 • Q15: Are the securities underlying a CFR 240.13d–1(i)) as any equity security of a class Cash settlement of a long security which is registered under section 12 of the future should be identified in Table I, long security future that calls for Exchange Act (15 U.S.C. 78l), or any equity security column 3 and Table II, column 4 with physical settlement considered of any insurance company which would have been transaction code ‘‘C,’’ and with ‘‘otherwise owned’’ for purposes of Rule required to be registered under the Exchange Act 16c–4? except for the exemption contained in section transaction code ‘‘S’’ on a separate line 12(g)(2)(G) of the Exchange Act (15 U.S.C. in Table I, column 3 (to report the A15: An insider who is long a security 78l(g)(2)(G)), or any equity security issued by a deemed sale of the underlying future does not ‘‘otherwise own’’ the closed-end investment company registered under securities). securities underlying the security future the Investment Company Act of 1940 (15 U.S.C 80a • until he or she is obligated to accept et seq.). The term does not include securities of a Cash settlement of a short security class of non-voting securities. future should be identified in Table I, delivery under the security future (i.e., 48 17 CFR 240.13d–101 or 240.13d–102. Unless column 3 and Table II, column 4 with if the security future is not offset prior otherwise exempt, a person acquiring more than the transaction code ‘‘C,’’ and with to the close of trading for that security five percent of a class of equity security must file future on the last trading day). Once an a Schedule 13D within 10 days of the acquisition. transaction code ‘‘P’’ on a separate line A Schedule 13D filer must disclose, among other in Table I, column 4 (to report the insider is obligated to accept delivery, things, his or her identity and background, the deemed repurchase of the underlying he or she may include the securities source and amount of funds used to acquire the security). underlying the security future in securities, the purpose of the acquisition and any Q14: Exchange Act Rule 16c–4 computing the amount of underlying plans or proposals of the filer concerning the issuer. securities ‘‘otherwise owned.’’ An Institutional investors who acquire more than five provides that establishing or increasing percent of a class of equity security in the ordinary a put equivalent position is exempt from insider who is long a cash-settled course of business, and not with the purpose or section 16(c) so long as the amount of security future does not ‘‘otherwise effect of changing or influencing control of the securities underlying the put equivalent own’’ the underlying securities. issuer, may file the short-form Schedule 13G, in Example: The common stock of lieu of the Schedule 13D, within 45 days after the position does not exceed the amount of end of the calendar year. Passive investors who underlying securities otherwise owned Company XYZ is registered under acquire more than 5% of a class of equity security, by the insider. How would Rule 16c–4 Section 12 of the Exchange Act. S, an but less than 20% of the class, and not with the apply to an insider’s sale of a security officer of Company XYZ, does not own purpose or effect of changing or influencing control any shares of XYZ common stock. On of the issuer, may file the short-form Schedule 13G, future? in lieu of the Schedule 13D, within 10 days after A14: For the duration of the insider’s May 5, 2003, S purchases 10 December the acquisition. A Schedule 13G filer must disclose, put equivalent position pursuant to the delivery security futures on XYZ among other things, his or her identity, residence security future, an insider who sells a common stock. Each security future is and citizenship, and amount of securities on 100 shares of XYZ common stock. beneficially owned. security future must otherwise own an 49 17 CFR 240.13d–3(a). The Rule states that The last trading day of the December voting power includes the power to vote or to direct 44 Exchange Act Rule 16a–3(f)(1)(i)(A) [17 CFR delivery security futures is the third the voting of the security, and that investment 240.16a–3(f)(1)(i)(A)]. Friday in December (December 19, Continued
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is deemed to be the beneficial owner of of Company XYZ common stock. The for purposes of determining beneficial a security, for purposes of sections 13(d) last trading day of the December ownership under Regulation 13D, and 13(g) of the Exchange Act,50 if that delivery contracts is December 20, 2002. would the securities underlying a person has or shares voting and/or Before his acquisition of the security security future that is purchased to investment power with respect to the futures, W was not required to file a liquidate or offset an existing security security. The Rule deems a person to be beneficial ownership report on either future position be counted for purposes the beneficial owner of a security if that Schedule 13D or 13G. Interpretation: On of determining beneficial ownership? person has the right to acquire the purchase date, June 3, 2002, W does A19: No, but only to the extent that beneficial ownership of the security not have to count the shares of the offsetting purchase does not within 60 days, including, but not Company XYZ common stock establish a new security future position. limited to, a right to acquire it through underlying the security futures contracts If a purchaser buys a security future to exercise of an option, warrant, right or for purposes of determining beneficial offset an outstanding short position, the through the conversion of another ownership under Rule 13d–3 because purchaser has no obligation to accept security.51 Any person who acquires the this date is more than 60 days from the delivery of the securities underlying the right to acquire a security in this last trading day of the security futures.56 long security future.58 manner with the purpose or effect of If W has not offset the security futures Q20: Other than for purposes of changing or influencing control of the on or before October 21, 2002, W would determining beneficial ownership, how issuer of the security is immediately count the shares of XYZ common stock does the purchase or sale of a security deemed to be the beneficial owner of the underlying the security futures for future affect Schedule 13D disclosure? security upon acquisition of the right to purposes of determining whether he is A20: As with other derivative acquire the security, regardless of when subject to the Regulation 13D beneficial contracts overlying an ‘‘equity security’’ the right is exercisable.52 ownership reporting requirements. under Rule 13d-1(i), a purchaser or Q16: Is a security future an ‘‘equity Example 2: Same facts as in Example seller of a security future who is subject security’’ that is reportable under 1 above, except W purchases the to Schedule 13D reporting requirements Regulation 13D? December delivery security futures with respect to the underlying security A16: No. Security futures are not (with the last trading day of December may have to amend Schedule 13D to covered by the Rule 13d–1(i) definition 20, 2002) on Company XYZ common disclose his or her transactions in of ‘‘equity security’’ 53 because they are stock on October 23, 2002. The amount security futures on securities of a class exempt from registration under section of Company XYZ common stock of equity security beneficially owned by 12 of the Exchange Act.54 beneficially owned by W before his such person, whether settled by Q17: Would the equity securities purchase of the security futures, physical delivery or in cash. For underlying a security future that combined with the shares of Company example, the purchase or sale of a requires physical settlement of the XYZ common stock underlying the security future may represent a change security future be counted for purposes contracts, brings W above the five in the source of funds under Item 3 of of determining whether the purchaser of percent beneficial ownership threshold. Schedule 13D, a possible shift in the security future is subject to the Interpretation: W must file a Schedule purpose under Item 4 (particularly to Regulation 13D beneficial ownership 13D or 13G within 10 days after his the extent that the transaction is part of reporting requirements? purchase of the security futures.57 a plan or proposal to dispose of A17: Yes, but only during the period Q18: Would the equity securities Company XYZ securities that W did not when there are 60 or fewer days before underlying a security future that disclose previously), or a ‘‘transaction’’ the last trading day, or immediately requires cash settlement be counted for in the subject security under Item 5. upon purchase of the security future if purposes of determining whether the Furthermore, the security future would it was acquired for the purpose of purchaser of the contract is subject to be a ‘‘contract, agreement, changing or influencing control of the the Regulation 13D beneficial understanding, or issuer of the underlying securities.55 ownership reporting requirements? relationship***with respect Example 1: On June 3, 2002, W A18: No. A purchaser of a cash-settled to***securities of the issuer’’ under purchases 100 security futures for security future (i.e., a security future Item 6. A Schedule 13G filer would December delivery. Each security future that, by its terms, must be settled by a disclose transactions in security futures calls for physical delivery of 100 shares cash payment) would not count the in accordance with Regulation 13D and equity securities underlying the contract the item requirements of Schedule 13G. power includes the power to dispose, or to direct for purposes of determining whether he the disposition of the security. 50 or she is subject to the Regulation 13D B. Guidance on Statutory Provisions and 15 U.S.C. 78m(d) and (g). reporting requirements, because he or 51 Rule 13d–3(d)(1)(i) (17 CFR 240.13d–3(d)(1)(i)). Rules Administered by the Division of Additionally, the Rule deems a person to be the she does not have the right to acquire Market Regulation beneficial owner of a security if the person has the beneficial ownership of the underlying right to acquire beneficial ownership of the security security. 1. Market Supervision Issues within 60 days pursuant to the power to revoke a Q19: If the equity securities trust, discretionary account, or similar arrangement The Duty of Best Execution underlying a security future that through the termination of a trust, discretionary Broker-dealers have long been subject account or similar arrangement. See Rule 13d– requires physical settlement are counted 3(d)(1)(i)(C) and (D) (17 CFR 240.13d–3(d)(1)(i)(C) to a duty of best execution when effecting securities transactions for and (D)). 56 This example assumes that the security futures 52 Rule 13d–3(d)(1) (17 CFR 240.13d–3(d)(1)). were not purchased with the purpose or effect of customers. This duty derives from 53 See supra note . changing or influencing control of the issuer. 54 Exchange Act section 12(a) (15 U.S.C. 78l(a)) 57 In this example, W would be eligible to file on 58 See supra note . A transaction is not an exempts security futures traded on a national the short-form Schedule 13G if he is an institutional offsetting transaction if it does not liquidate the securities exchange from registration under both or passive investor and can certify that he did not previously established security future position. sections 12(b) and section 12(g) of the Exchange Act purchase the security futures for the purpose of Once a security future has been offset, the (15 U.S.C. 78l(b) and (g)). Exchange Act section changing control of Company XYZ, and the obligation to accept or make delivery of the 12(g) clarifies that security futures are not equity purchase did not have the effect of changing control underlying securities or to accept or make payment securities of the issuer of the underlying securities. of Company XYZ. See Rule 13d–1(b) and (c) (17 of the value of the underlying securities (in the case 55 See supra note. CFR 240.13d–1(b) and (c)). of a cash settled security future) is canceled.
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common law agency principles and Commission recognizes that it would be A24: No. In authorizing the trading of fiduciary obligations, and has been difficult to apply these principles to futures contracts involving single stocks incorporated in self-regulatory contracts that are materially different as and narrow-based security indices, organization rules and, through judicial to their terms. If the customer has Congress exempted security futures and Commission decisions, in the specified the market or contract in products from the operation of Section enforcement of the antifraud provisions which to trade, the broker-dealer must 10(a)(1) of the Exchange Act under of the federal securities laws. Questions seek to achieve the best possible which Rule 10a–1 is adopted.68 have arisen as to the applicability of this execution within that market. If the Q25: Does a security future convey duty to security futures products. customer has not specified the market or ownership under Rule 3b–3 for the Q21: Does the duty of best execution contract, the Commission reminds purposes of short sale regulation? apply to security futures products? broker-dealers that, even with respect to A25: A person who holds a security A21: Yes. The duty of best execution contracts that are materially different, future obligating him to take delivery of requires a broker-dealer ‘‘to seek the they should consider the applicability of the underlying securities by physical most favorable terms reasonably other agency or fiduciary duties, settlement would not be considered available under the circumstances for a including suitability. long these securities for the purposes of customer’s transaction.’’59 The duty of Rule 3b–3 until the security future 64 best execution is not limited by the type 2. Trading Practices Issues terminates trading.69 This interpretation of transaction or security involved and a. Short Sale Regulation: Exchange Act is consistent with the way Rule 3b–3 applies equally to security futures Rules 10a–1 and 3b–3 addresses several instances where a products. person owns a security that entitles a Q22: Are broker-dealers expected to A short sale is the sale of a security person to acquire securities underlying comply with the duty of best execution that the seller does not own or that the the instrument, e.g., options, rights, in the absence of national market system seller owns but does not deliver. The warrants, and convertibles. In those mechanisms for security futures Commission has plenary authority to instances, Rule 3b–3 requires the products? regulate short sales of securities option, right, warrant, or convertible to A22: Yes. While the national market registered on a national securities be exercised, tendered, or converted system mechanisms adopted under the exchange (listed securities) as necessary before the person can be considered as Exchange Act were designed in part ‘‘to to protect investors under Section 10(a) having a long position in the underlying assure***the practicability of of the Exchange Act.65 The Commission 66 security. These provisions also brokers executing investors’’ orders in adopted Exchange Act Rule 10a–1 to implicitly contemplate that the person the best market,’’60 the duty of best restrict short selling in a declining 67 will shortly acquire the security being execution predates the national market market. Specifically, Rule 10a–1(a)(1) sold. For a physically-settled security system provisions of the federal provides that, subject to certain future, the holder will obtain the securities laws. Accordingly, the exceptions, a listed security may be sold underlying security only after the Commission has never considered the short: (i) At a price above the price at security future terminates trading. A duty of best execution to be contingent which the immediately preceding sale security future settled by receipt of cash on the existence of such mechanisms.61 was effected (plus tick), or (ii) at the last has no effect on a person’s long Best execution obligations, for example, sale price if it is higher than the last position. also apply to securities for which different price (zero-plus tick). national market system plans do not Conversely, short sales are not b. Safe Harbor for Issuer Repurchases: exist, such as government securities and permitted on minus ticks or zero-minus Exchange Act Rule 10b–18 62 corporate debt. ticks, subject to narrow exceptions. The Exchange Act Rule 10b–18 70 Q23: Are broker-dealers expected to operation of these provisions constitute provides a non-exclusive ‘‘safe harbor’’ comply with the duty of best execution what is commonly described as the from liability for manipulation under with respect to instruments that may not ‘‘tick test.’’ sections 9(a)(2) and 10(b) of the be standardized or fungible across Exchange Act Rule 3b–3 defines the Exchange Act, and Rule 10b–5 under markets? term ‘‘short sale’’ as any sale of a the Exchange Act, when an issuer or its A23: As noted above, the duty of best security that the seller does not own or affiliated purchaser bids for or execution requires a broker-dealer to any sale that is consummated by the purchases shares of the issuer’s common seek the most favorable terms delivery of a security borrowed by, or reasonably available under the stock in accordance with the Rule’s for the account of, the seller. Rule manner, timing, price, and volume circumstances for a customer’s 3b–3 also defines specific instances transaction. In the absence of specific conditions. Because Rule 10b–18 is a when a person shall be deemed to own voluntary safe harbor, an issuer is not instructions from a customer, a broker- a security, i.e., a long position. dealer has an obligation to use required to comply with the provisions Q24: Will sales of security futures be of the Rule when making market reasonable efforts to execute customer subject to Rule 10a–1? orders in the market that maximizes the purchases, and no adverse inference economic benefit to the customer.63 The about manipulation may be drawn if an 64 Exchange Act Rules 15c2–4 and 15c2–8 [17 issuer’s purchases do not satisfy the CFR 240.15c2–4 and 240.15c2–8] apply to sales of Rule’s conditions or are not covered by 59 Securities Exchange Act Release No. 37619A security futures by brokers and dealers that (September 6, 1996), 61 FR 48290, 48322 constitute distributions. We anticipate that security the Rule. Rule 10b–18’s conditions are (September 12, 1996). futures will be issued by clearing agencies, and 60 15 U.S.C. 78k–1(a)(1)(C)(iv). brokers and dealers therefore will not participate in 68 See 15 U.S.C. 78j(a)(2). 61 See Securities Exchange Act Release No. 43591 distributions of security futures. If brokers and 69 Termination of trading is the moment at which (November 17, 2000), 65 FR 75439, 75439–40 dealers, however, participate in a distribution of an open position in a security future, either a long (December 1, 2000) (discussing best execution security futures, we will address any questions or short position, can no longer be closed or obligations with respect to exchange-listed options). regarding Rules 15c2–4 and 15c2–8 at that time. liquidated either by buying or selling an opposite 62 See NASD Rule 2320. 65 15 U.S.C. 78j(a). position. Similarly, a person obligated to deliver 63 See Newton v. Merrill, Lynch, Pierce, Fenner & 66 17 CFR 240.10a–1. would be considered short at the termination of Smith, Inc., 135 F.3d 266, 270 (3d Cir. 1998) (en 67 See Securities Exchange Act Release No. 1548 trading. banc); NASD Rule 2320. (January 24, 1938), 3 FR 213 (January 26, 1938). 70 17 CFR 240.10b–18.
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designed to limit the market impact of A27: A person who holds a security stated amount of consideration offered the issuer’s repurchase activity. In so future obligating him to take delivery of for the subject security. A security doing, Rule 10b–18 provides a measure a subject security by physical settlement future settled by receipt of cash has no of assurance to investors that a will be considered to be long the subject effect on the person’s short position.75 security’s market price is based on security for the purposes of Rule 14e– d. Purchases Outside of a Tender Offer: independent market forces and not 4 only after the security future Exchange Act Rule 14e–5 influenced in a manipulative manner by terminates trading.74 This interpretation the issuer. is consistent with the treatment of In connection with a tender offer for Q26: Is the Rule 10b–18 safe harbor standardized options positions in Rule equity securities, Rule 14e–5 of the available for issuer repurchase 14e–4. The owner of a standardized Exchange Act 76 generally prohibits a transactions involving security futures option in a subject security is not covered person from directly or (including the receipt of securities considered to be long the underlying indirectly purchasing or arranging to underlying such futures)? security under Rule 14e–4 for tendering purchase outside of the tender offer (i) A26: No. Rule 10b–18 only applies to purposes until the standardized option the securities or class of securities that what is defined as a ‘‘Rule 10b–18 is exercised. A security future settled by are sought to be acquired in the purchase.’’ 71 A Rule 10b–18 purchase receipt of cash has no effect on the transaction or that are otherwise the encompasses only purchases by an shareholder’s long position. subject of the transaction (‘‘subject issuer or its affiliate of its common Q28: How should a security future be securities’’), or (ii) securities that are stock. It does not apply to any other considered in calculating a person’s immediately convertible into, type of security—even if related to the short position for the purposes of Rule exchangeable for, or exercisable for common stock (e.g., transactions in 14e–4 when the underlying security is subject securities (‘‘related derivative securities such as warrants, the subject of a partial tender offer? securities’’).77 options, or security futures that are A28: In order to prevent hedged Q29: Would Rule 14e–5 apply to the physically-settled).72 Thus, consistent tendering and over-tendering, Rule 14e– purchase by a covered person of with the treatment of options under 4 requires a person tendering into a security futures during a tender offer for Rule 10b–18, we view the term ‘‘Rule partial tender offer to include in the the securities underlying the security 10b–18 purchase’’ as not including calculation of his or her short position futures? issuer repurchase transactions involving the amount of subject securities such A29: The security futures would not security futures (including the receipt of person is obligated to deliver pursuant be subject securities. Nor would the securities underlying such futures). to a security future that was entered into security futures be related securities on or after the date that a tender offer because they would not be c. The Short Tender Rule: Exchange Act is first publicly announced or otherwise ‘‘immediately convertible into, Rule 14e–4 made known by the bidder to the exchangeable for, or exercisable for’’ the Exchange Act Rule 14e–4,73 holders of the security to be acquired, if subject securities (i.e., the underlying commonly referred to as the ‘‘short the security future terminates trading at securities). However, if the security tender rule,’’ is generally designed to or before the end of the proration futures provide for physical settlement, preclude persons from tendering more period. If one or more tender offers for and the security futures will terminate shares than they own in order to avoid the same security are ongoing on such trading 78 prior to expiration of the or reduce the risk of pro rata acceptance date, the announcement date shall be tender offer, the purchase of the security in a partial tender offer. A person may that of the first announced offer. This futures would be prohibited under Rule tender shares into a partial tender offer requires inclusion of the amount of such 14e–5 as an arrangement (i.e., the only if both at the time of tender and at subject securities in the person’s short security future contract) to purchase the end of the proration period the position, regardless of the price of the subject securities (i.e., the underlying person has a ‘‘net long position’’ in the security future relative to the price of securities) during the tender offer. subject security or an equivalent the subject security underlying the Q30: Would Rule 14e–5 prohibit the security equal to or greater than the security future, because (in contrast to physical settlement of a long security amount tendered into the partial tender an option, discussed below) the security futures position by a covered person offer. Under Rule 14e–4, a person’s ‘‘net future requires the person to deliver the during a tender offer for the underlying long position’’ in a subject security securities upon maturity. security? equals the excess, if any, of such This interpretation is consistent with A30: The acquisition of the person’s ‘‘long position’’ over a person’s the treatment of standardized options underlying securities upon physical ‘‘short position.’’ The calculation of the positions in Rule 14e–4. Rule 14e–4 settlement of a long security futures net long position must be done both at requires a person tendering into a position would be considered a the time of tender and at the end of the partial tender offer to include in the purchase of subject securities. Rule 14e– proration period, or period during calculation of his or her short position 5(b)(1), however, permits transactions which securities are accepted by lot, the amount of subject securities that the by covered persons to convert, including any extension thereof. person is obligated to deliver upon exchange, or exercise related securities Q27: How should a security future be exercise of a standardized in-the-money owned before public announcement of considered in calculating a person’s call option that was sold on or after the long position for the purposes of Rule date that a tender offer is first publicly 75 Further, the holder of a cash-settled futures 14e–4 when the underlying security is contract is not considered to own the subject announced or otherwise made known securities underlying the contract for purposes of the subject of a partial tender offer? by the bidder to the holders of the Rule 14e–4, and so cannot tender shares on the security to be acquired. For purposes of basis of the security future. As such, security 71 See Exchange Act Rule 10b–18(a)(3) (17 CFR Rule 14e–4, in-the-money call options futures settled by receipt of cash have no effect on the number of subject securities eligible to be 240.10b–18(a)(3)). are those options with strike prices 72 Rule 10b–18 also would not apply to security tendered into an offer. futures that are cash-settled, as these products do below the highest tender offer price or 76 17 CFR 240.14e–5. not result in a purchase of the common stock for 77 Relevant terms are defined in paragraph (c) of purposes of the Rule. 74 See supra note 69 (explaining termination of Rule 14e–5. 73 17 CFR 240.14e–4. trading). 78 See supra note 69.
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the tender offer into subject securities. their affiliated purchasers. Regulation M settlement of a long security future is Because the acquisition of subject prohibits such persons from directly or substantially similar to the acquisition securities upon the physical settlement indirectly bidding for, purchasing, or of a covered security upon the exercise of security futures is substantially attempting to induce any person to bid of an option, warrant, right, or similar to acquisitions of subject for or purchase, any security that is the conversion privilege, the acquisition is securities by conversion, exchange or subject of a distribution (a ‘‘subject within the exceptions in Rules 101(b)(4) exercise of other securities, the security’’), or any ‘‘reference security’’ and 102(b)(4). acquisition of underlying securities that (together, ‘‘covered securities’’), until Q36: Would Regulation M apply to are the subject of a tender offer upon after the applicable restricted period.80 the cash settlement of a long security physical settlement of a long security Q33: Would Regulation M apply to futures position? futures position is within the Rule 14e– the purchase of security futures during A36: No. Regulation M would not 5(b)(1) exception, if the covered person a distribution of the securities prohibit the cash settlement of a long owned the security futures before public underlying the security futures? security futures position. announcement of the tender offer. A33: Yes. The purchase of the Q31: Would Rule 14e–5 prohibit the security futures would be considered 3. Other Broker-Dealer Issues acquisition of subject securities to within the prohibition against directly a. Eligible OTC Derivative Instruments: satisfy an obligation to deliver those or indirectly bidding for, purchasing, or Exchange Act Rule 3b–13 securities upon physical settlement of a attempting to induce any person to bid short position in security futures? for or purchase, a covered security (i.e., OTC derivatives dealers are a class of A31: The acquisition of the the underlying securities) because, at a registered dealers that limit their trading underlying securities in order to minimum, the purchase of the security to eligible over-the-counter derivative physically settle a short position in futures would be an indirect purchase of products and certain related security futures would be considered a a covered security. transactions.83 Registration with the purchase of subject securities. Rule 14e– Q34: Is the actively-traded securities Commission as an OTC derivatives 5(b)(6), however, permits purchases that exception available in connection with dealer is an alternative to registration as are made to satisfy an obligation to acquisitions of security futures during a full broker-dealer.84 OTC derivatives deliver a subject security arising from distributions of the underlying stock? dealers may engage in dealer activities the exercise of an option by a non- A34: The actively-traded securities in ‘‘eligible OTC derivative covered person or a short sale, provided exception under Rule 101(c)(1) would instruments,’’ as that term is defined in that (i) the short sale or option was be available to acquisitions of security Exchange Act Rule 3b–13.85 OTC established before public announcement futures by distribution participants and derivatives dealers may also engage in of the tender offer, and (ii) the short sale their affiliated purchasers where the certain additional securities activities or option transaction was made in the underlying securities are actively-traded related to conducting an OTC ordinary course of business and not to securities. However, that exception is derivatives business.86 facilitate the offer. Because the not available to purchases of security Q37: Would security futures products acquisition of subject securities upon futures by issuers, selling security be eligible OTC derivative instruments the physical settlement of a short holders, or affiliated purchasers of the as defined in Exchange Act Rule 3b–13? security futures position is substantially underlying securities who are governed A37: No. Exchange Act Rule 3b– similar to the acquisition of subject by Rule 102(d)(1).81 13(b)(2)(i) defines an eligible OTC securities in a covering transaction Q35: Would Regulation M prohibit derivative instrument, and specifically arising from a short sale or the exercise the physical settlement of a long excludes from the definition of eligible of an option by a non-covered person, security futures position during a OTC derivative instrument a security the acquisition is within the Rule 14e– distribution of the underlying security? that is listed or traded on a securities 5(b)(6) exception, provided the A35: The acquisition of the exchange. Security futures products are obligation to settle by physical delivery underlying security upon physical was established before public settlement of a long security futures 83 See 17 CFR 240.3b–12. announcement of the tender offer and position would be considered the 84 See Securities Exchange Act Release No. 40594 the security future transaction was made purchase of a covered security. Rules (October 23, 1998), 63 FR 59362 (November 3, 101(b)(4) and 102(b)(4), however, permit 1998). in the ordinary course of business and 85 distribution participants, and issuers 17 CFR 240.3b–13. not to facilitate the offer. 86 Id. In particular, an OTC derivatives dealer Q32: Would Rule 14e–5 apply to the and selling shareholders, respectively, must limit its securities activities to: (1) Engaging cash settlement by a covered person of to acquire a covered security through in dealer activities in eligible OTC derivative a long security futures position? the exercise of any option, warrant, instruments (as defined in Rule 3b–13) that are right, or any conversion privileges set securities; (2) issuing and reacquiring securities that A32: No. The cash settlement of a are issued by the dealer, including warrants on long security futures position would not forth in the instrument governing a securities, hybrid securities, and structured notes; involve an acquisition of the securities security. In adopting these exceptions, (3) engaging in cash management securities underlying the security futures. the Commission stated that it believes activities (as defined in Rule 3b–14); (4) engaging that exercises or conversions of in ancillary portfolio management securities e. Anti-manipulation Rules Regarding derivative securities generally have an activities (as defined in Rule 3b–15); and (5) Distributions: Regulation M engaging in such other securities activities that the uncertain and attenuated manipulative Commission designates by order pursuant to Rule Regulation M79 is intended to potential.82 Because the acquisition of 15a–1(b)(1). 17 CFR 240.3b–12(a). In addition, such preclude manipulative conduct by underlying securities upon physical dealer’s securities activities must consist primarily of those described in categories (1) through (3), 17 persons with an interest in the outcome CFR 240.3b–12(b), and do not consist of any other of an offering of securities. It governs 80 Relevant terms, including ‘‘distribution,’’ securities activities, including engaging in any the activities of underwriters, issuers, ‘‘reference security,’’ and ‘‘restricted period,’’ are transaction in any security that is not an eligible selling security holders, and others that defined in Rule 100 of Regulation M. OTC derivative instrument, except as permitted in 81 See 17 CFR 242.102. categories (3) through (5). 17 CFR 240.3b–12(c). participate in the offering, as well as 82 Securities Exchange Act Release No. 38067 Moreover, an OTC derivatives dealer must also be (December 20, 1996), 62 FR 520, 528 (January 3, affiliated with a fully regulated broker-dealer. 17 79 17 CFR 242.100–242.105. 1997). CFR 240.3b–12.
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exchange listed instruments.87 Because of their activities on those notice- acquire or sell an equity security’’ so as a security futures product is a security registered exchanges, but are subject to to permit stock-to-futures, options-to- that is listed on a registered national a similar restriction.91 futures and futures-to-futures hedging securities exchange, it is excluded from Congress enacted section 11(a) to transactions? the definition of an eligible OTC encourage fair dealing and fair access in A38: Yes. Security futures are classic derivative instrument.88 Accordingly, the exchange markets by reducing the futures contracts—agreements to buy or an OTC derivatives dealer that wishes to conflicts arising from an exchange sell a specific amount of a security at a engage in activities involving security member trading for its own account in particular price on a stipulated future futures products would be limited to the public exchange markets.92 Exempt date. Whether settlement on that date is those activities permissible in securities from this prohibition are certain types of done by cash or by physical delivery of that are not eligible OTC derivative transactions that ‘‘* * * contribute to the underlying securities, such an instruments—activities such as ancillary the fairness and orderliness of exchange instrument can be used as a hedging portfolio management securities markets or which have not given rise to vehicle. activities.89 serious problems.’’93 For instance, From a regulatory perspective, cash- section 11(a)(1)(A) provides an settlement is not a determinative factor b. Addressing Conflicts Associated With in this context. The Commission has Proprietary Trading and Trading for exemption from the prohibitions of section 11(a) for any transaction by a long considered security options that Discretionary Accounts by Exchange are cash-settled, as opposed to Members: Exchange Act Section 11(a) dealer acting in the capacity of a market maker.94 Another type of transaction physically-settled, to be ‘‘options on 90 Section 11(a) of the Exchange Act specifically exempted from section 11(a) securities’’ within the definition of prohibits a member of a national is ‘‘any bona fide hedge transaction security in Exchange Act section 97 securities exchange (other than a notice- involving a long or short position in an 3(a)(10). Such an approach helps to registered exchange) from effecting equity security and a long or short ‘‘meet the countless and variable transactions on that exchange for its position in a security entitling the schemes devised by those who seek the own account, the account of an holder to acquire or sell such equity use of money of others on the promise 98 associated person, or an account over security. * * *’’95 The Commission of profits.’’ For similar reasons, which it or its associated person implemented this exemption in 1979 by whether cash or physically-settled, exercises investment discretion, unless adopting Exchange Act Rule 11a1– security futures are securities ‘‘entitling an exemption applies. Members of 3(T).96 the holder to acquire or sell an equity notice-registered futures exchanges are Q38: Are both cash-settled and security’’ as contemplated by Rule exempt from section 11(a) for purposes physically-settled security futures 11a1–3(T). Moreover, Congress did not intend to securities ‘‘entitling the holder to 87 See Exchange Act Sections 6(h)(1) [15 U.S.C. impose excessively rigid limits on the 78f(h)(1)]. activities of arbitrageurs and other 91 As directed by the CFMA, the CFTC recently 88 Exchange Act Rule 3b–13(b)(2)(i) specifically specialized traders in connection with excludes from the definition of eligible OTC adopted rules that prohibit futures intermediaries derivative instrument a contract, agreement or from trading for accounts in which they have any transactions of the types listed in transaction that provides, in whole or in part, on interest, during the same trading session that they section 11(a)(1)(D), which includes bona a firm or contingent basis, for the purchase or sale also trade for the accounts of customers, the same fide hedge transactions.99 Section security futures product on the same designated of, or is based on the value of, or any interest in, 11(a)(1) was not designed to narrow or any security, (or group or index of securities), and contract market or registered derivatives transaction is listed on, or traded on or through, a national execution facility. These rules also specifically unduly complicate arbitrage activities 100 securities exchange or registered national securities require electronic markets to adopt rules to prohibit and hedging transactions. Because association or a facility or market thereof. See 17 the execution of customer orders through systems that provide an unfair advantage to market CFR 240.3b–13(b)(2)(i). 97 Exchange Act section 3(a)(10) (15 U.S.C. intermediaries. That unfair advantage may be a time 89 Exchange Act Rule 3b–15 defines ancillary 78c(a)(10)). See, e.g., Brief of the SEC, Amicus and place advantage, or the ability to influence or portfolio management securities activities. As the Curae, in Support of Appellant on Issues Addressed guide an order once the order enters the system. See Commission explained in adopting the Rule: at 10–11, Louis S. Caiola v. Citibank, N.A., On Commodity Exchange Act Release No. 3038–AB83 Appeal from the United States District Court for the These securities activities must be limited to (March 1, 2002), 67 FR 11223 (March 13, 2002). transactions in connection with the OTC derivatives Southern District of New York (No. 01–7545) 92 See Securities Act Amendments of 1975, dealer’s dealer activities in eligible OTC derivative (explaining that Congress did not intend to exclude Report of the Senate Comm. on Banking, Housing instruments, the issuance of securities by the cash-settled options on securities from the and Urban Affairs to Accompany S. 249, S. Rep. No. dealer, or such other securities activities that the definition of ‘‘security’’ in the Exchange Act). 94–75, 9th Cong., 1st Sess. 99 (1975). Commission designates by order. They must also (1) 98 SEC v. W.J. Howey Co., 328 U.S. 293, 299 93 be conducted for the purpose of reducing the Securities Acts Amendments of 1975, Report of (1946). dealer’s market or credit risk or consist of incidental the Senate Comm. on Banking, Housing and Urban 99 See Securities Acts Amendments of 1975, trading activities for portfolio management Affairs to Accompany S. 249, S. Rep. No. 94–75, 9th Report of the Senate Comm. on Banking, Housing purposes; and (2) be limited to risk exposures Cong., 1st Sess. 99 (1975). and Urban Affairs to Accompany S.249, S. Rep. No. within the market, credit, leverage, or liquidity risk 94 See Exchange Act section 11(a)(1)(A) (15 U.S.C. 94–75, 9th Cong., 1st Sess. 99 (1975). parameters set forth in the trading authorizations 78k(a)(1)(A)); Exchange Act Section 3(a)(38) (15 100 See id. The exemption for bona fide hedge granted to the associated person (or to the U.S.C. 78c(a)(38)) (defining market maker). transactions in Exchange Act Rule 11a1–3(T) was associated person’s supervisor) who executes the 95 Exchange Act section 11(a)(1)(D) (15 U.S.C. drafted broadly to encompass the variety and transaction for the dealer, and in the written 78k(a)(1)(D)). complexity of hedging techniques. As the guidelines approved by the dealer’s governing body 96 Exchange Act Rule 11a1–3(T) provides that: Commission noted when it adopted Rule 11a1–3(T): and included in the dealer’s internal risk (a) bona fide hedge transaction effected on a The question whether particular combinations of management control system (as required under new national securities exchange by a member for its stock positions and options positions result in risk (Exchange Act) Rule 15c3–4). Rule 3b–15 also own account or an account of an associated person reduction in each of the positions involves requires that ancillary portfolio management thereof and involving a long or short position in a subjective judgments as to the volatility and risk securities activities be conducted only by associated security entitling the holder to acquire or sell an characteristics of those positions. * * * The persons of the dealer who perform substantial equity security, and a long or short position in one Commission recognizes that the calculation of duties for the dealer in connection with its dealer or more other securities entitling the holder to volatility and risk can only be approximate, and activities in eligible OTC derivative instruments. acquire or sell such equity security, shall be believes that, for purposes of section 11(a)(1)(D), the See Securities Exchange Act Release No. 40594 deemed to be of a kind which is consistent with the determination of what constitutes an offset may be (October 23, 1998), 63 FR 59362 (November 3, purposes of section 11(a)(1) of the Act, the made by the use of any responsible method of 1998); 17 CFR 240.3b–15. See also supra note protection of investors, and the maintenance of fair calculating the risk of stock and options positions. (noting generally other permissible activities). and orderly markets. Securities Exchange Act Release No. 15533 90 15 U.S.C. 78k(a). 17 CFR 240.11a1–3(T). (January 29, 1979), 44 FR 6093 (January 31, 1979).
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the bona fide hedge exemptions in significant, because floor traders Q40: Would a security future section 11(a)(1)(D) and Rule 11a1–3(T) generally buy and sell securities for constitute an extension of credit under were intended to be interpreted broadly their own benefit and interest, unless section 11(d) of the Exchange Act and to encompass the variety and the market imposes obligations to serve for purposes of the disclosure complexity of hedging techniques, we the market or public interest. Thus, only requirements of Rule 10b–16? interpret section 11(a)(1)(D) of the to the extent a floor trader is acting A40: A security future itself is not an Exchange Act and Rule 11a1–3(T) to subject to the type of exchange imposed extension of credit. The value of a permit cash-to-futures, options-to- obligations applicable to market makers security future can fluctuate throughout futures and futures-to-futures hedging in other securities, including dual the life of the contract based on the with security futures. trading restrictions, will such floor value of the underlying security, with Q39: Would floor traders effecting trader be deemed acting in a market each party to the contract exposed to transactions in security futures products making capacity in a security futures such fluctuations. Traditionally, on a fully registered national securities product on a fully registered national marking to market of futures contracts exchange qualify for the market making securities exchange. allows gains and losses on futures exemption under section 11(a)(1)(A)? contracts to be transferred regularly c. Extensions of Credit: Exchange Act A39: Section 11(a)(1)(A) of the between contract parties throughout the Section 11(d) and Exchange Act Rule Exchange Act exempts from the general life of the contract. While this practice 10b–16 prohibitions of section 11(a) any could in a sense be viewed as involving transaction by a dealer acting in the Section 11(d) of the Exchange Act 104 only partial payment for a security, we capacity of a market maker, as that term generally prohibits any person that does believe that it actually reflects the is defined in section 3(a)(38) of the nature of a futures contract, and not an 101 business as both a broker and a dealer Exchange Act. This exemption from extending credit to a customer on attempt to extend credit in the sense reflects the special role of market any security that was part of a new issue contemplated by section 11(d) or Rule makers in our securities markets. when the broker-dealer participated in 10b–16. As one commentator on futures Section 3(a)(38) defines a market maker the distribution of the new issue within explained, ‘‘margin in futures accounts as ‘‘any specialist permitted to act as a thirty days prior to the customer’s does not represent partial payment of dealer, any dealer acting in the capacity transaction.105 Exchange Act Rule 10b- the security as it does in stock of block positioner, and any dealer who, 16 106 prohibits the extension of credit transactions. No loan is involved. with respect to a security, holds himself by a broker-dealer to a customer in Margin in futures contracts simply out (by entering quotations in an connection with any securities represents a good faith deposit against interdealer communications system or transaction unless the broker-dealer has performance.’’108 otherwise) as being willing to buy and established procedures to ensure that Q41: Would extensions of credit in sell such security for his own account the customer is given, at the time the relation to a security future be on a regular or continuous basis.’’ As a account is opened and periodically considered extensions of credit in practical matter, consistent with this thereafter, specified information with relation to a new issue for purposes of definition of ‘‘market maker,’’ fully respect to the amount of and reasons for section 11(d)(1)? registered national securities credit charges.107 A41: No. We expect security futures exchanges—i.e., those not registered A security future potentially raises to be issued by clearing agencies and pursuant to Exchange Act section not underwritten or distributed by 6(g)102—have established both various issues related to the extension of credit. For instance, questions may arise broker-dealers. Although credit may be affirmative and negative obligations, extended in relation to security futures including appropriate dual trading as to whether the contract should be viewed as an instrument in and of itself, (e.g., advance funds to meet margin calls restrictions, for specialists and other or make periodic variation payments), market makers.103 Such obligations are or viewed as a down payment on ownership of the underlying security. such extensions of credit are intended to support the margining system for 101 We provide guidance about the security See 15 U.S.C. 78e(a)(38). futures contracts, a system set up to 102 15 U.S.C. 78f(g). future itself and extensions of credit in 103 For example, registered traders in options on relation to that instrument. manage risk in the clearance and the American Stock Exchange (‘‘Amex’’) are subject settlement system for this particular to Amex Rule 958, prohibiting them from initiating Exchange, a transaction for an account in which he type of instrument. It is generally options transactions for any account in which they has an interest and execute as broker an off-Floor recognized that section 11(d)(1) is have an interest except in accordance with the order in the same stock during the same trading Rule’s provisions. Moreover, section (c) of Rule 958 primarily intended to prohibit ‘‘share session.’’) (incorporated into the option rules by generally requires that when a registered trader pushing’’ by broker-dealers engaged in a Amex Rule 950(c)). enters a trading crowd in other than a floor distribution of a new issue of non- 104 15 U.S.C. 78k(d). brokerage capacity, or is called upon by a Floor exempted securities.109 Further, section Official or a Floor Broker acting in an agency 105 See H. R. Rep. No. 1383, 73d Cong., 2d Sess. capacity, the registered trader ‘‘is required to make (1934) 22; see also S. Rep. No. 792, 73d Cong., 2d 11(d)(1) serves a related customer competitive bids and offers as reasonably necessary Sess. (1934) 12. Congress stated that section 11(d) protection purpose by precluding the to contribute to the maintenance of a fair and ‘‘* * * strikes at one of the greatest potential evils overextension of customers with respect orderly market and shall engage, to a reasonable inherent in the combination of the broker and to new issue securities. As stated by the degree under the existing circumstances, in dealer function in the same person, by assuring that dealings for his own account when there exists a he will not induce his customers to buy on credit, staff of the Federal Reserve Bank of New lack of price continuity, a temporary disparity securities which he has undertaken to distribute to York, ‘‘inducing customers to buy new between the supply of and demand for option the public.’’ Id. This prohibition applies to the issues on margin was perceived as a contracts of a particular series, or a temporary direct or indirect extension or maintenance of sales technique used by underwriters to distortion of the price relationships between option credit, as well as arranging for the extension or contracts of the same class.’’ See Amex Rule 958(c); maintenance of credit. See also supra note reduce rapidly their exposure to risk see also Amex Rule 958, cmt. .01 (designating (concerning expectation that security futures will be registered trader engaging in Exchange options issued by clearing agencies and not broker-dealers). 108 See New York Institute of Finance, Stocks transactions as a Specialist for purposes of certain 106 17 CFR 240.10b-16. Bonds Options Futures, Investments and Their provisions of the Exchange Act and the rules and 107 See Securities Exchange Act Release No. 8773 Markets 184 (Stuart R. Veale, ed. 1987). regulations thereunder); Amex Rule 111(c) (‘‘No (December 8, 1969), 34 FR 19717 (December 16, 109 See VII Loss & Seligman, Securities Regulation Registered Trader shall effect, on the Floor of the 1969). 3290 n.420 (3d ed. 1991).
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and as a technique that had resulted in dealers.114 In providing for notice the equity securities underlying such credit-financed purchases which were registration, Congress envisioned that a indexes without registering as broker- not always appropriate for the buyers of notice-registered broker-dealer would dealers.119 The intermediaries new issues.’’110 For purposes of section engage in only security futures product themselves may determine whether to 11(d)(1), we expect markets in security activities.115 Limiting the scope of such register fully as broker-dealers in order futures issued by clearing agencies to notice registrants’ activities serves the for them to expand the scope of their operate more like secondary markets public interest because a wide array of securities activities. The Commission than markets in new issues. Moreover, broker-dealer regulations aimed at stands ready to address requests for leverage in such markets should derive protecting investors and maintaining exemptive relief, consistent with the more from the nature of the instrument fair and orderly securities markets are public interest and the protection of than from a desire for broker-dealers to not applied to notice-registered broker- investors, for highly delineated extend credit to induce additional sales dealers.116 Moreover, protections securities activities, where the services to deplete an underwriting inventory. afforded by those notice registrants’ of a fully registered broker-dealer are Thus, the traditional public policy other regulator, the CFTC, focus on unavailable and full registration is concerns underlying section 11(d)(1)’s futures, not securities markets.117 impractical. limitations on credit activities in Should additional securities activities III. Solicitation of Comments relation to new issues do not appear to be necessary in conjunction with be present for security futures. In the security futures products transactions, a As noted above, security futures event private parties or broker-dealers notice-registered broker-dealer could products are new products and markets begin to issue security futures, we might direct customers to a fully registered in these products have only begun to revisit extensions of credit in relation to broker-dealer or could fully register develop. Guidance provided necessarily such instruments. itself.118 is based on how we expect security Q42: Does Rule 10b–16 apply to Of note, futures commission futures products markets to operate. extensions of credit related to security merchants already offer futures on Accordingly, we solicit comment to futures, including an extension of credit broad-based stock indexes without identify market developments that to fund a margin obligation? special relief to engage in activities in might make it necessary to revisit our A42: Yes. While the future itself is not guidance or to provide guidance on an extension of credit, Rule 10b–16 114 The Commission already has addressed the additional issues. issue of a notice-registered broker-dealer handling applies to all extensions of credit, certain securities upon expiration of a security List of Subjects in 17 CFR Parts 231 and directly or indirectly, to any customer in future that is physically-settled. As we stated when 241 connection with any securities we adopted rules to permit notice registration, a transaction, including a security future. notice-registered broker-dealer that accepts and Securities. occasionally delivers the underlying securities Investors in security futures, including upon the expiration of a security future is not acting Amendments to the Code of Federal those extended credit in connection as a broker or a dealer with respect to those Regulations with margining, should benefit from the securities. It therefore is not required to register as transparency of credit terms fostered by a full broker-dealer. Because most futures For the reasons set forth above, the transactions are generally closed out by offsetting this Rule. transactions, and not by physical settlement, this Commission is amending title 17, should not be an issue for most notice-registered chapter II of the Code of Federal d. Ancillary Securities Activities by broker-dealers. A futures commission merchant that Regulations as set forth below: Notice-Registered Broker-Dealers routinely closes out its transactions in security Under the Exchange Act, only broker- futures products by physical delivery, however, PART 231—INTERPRETATIVE should register as a full broker-dealer. See RELEASES RELATING TO THE dealers that limit their securities Securities Exchange Act Release No. 44730 (August activities to security futures products 21, 2001), 66 FR 45138 (August 27, 2001). SECURITIES ACT OF 1933 AND and government securities pursuant to 115 See 15 U.S.C. 78o(b)(11)(A). The fact that GENERAL RULES AND REGULATIONS Exchange Act Rules 3a43–1 111 and certain financial intermediaries could want to THEREUNDER engage in a wider range of activities that would 112 3a44–1 can be ‘‘notice-registered,’’ as require both full broker-dealer and full futures 1. Part 231 is amended by adding opposed to fully registered broker- commission merchant registration is reflected in the Release No. 8107 and the release date of 113 statute as well. See, e.g., 15 U.S.C. 78o(c)(3)(B); dealers. Some have suggested June 21, 2002, to the list of interpretive identifying additional securities supra note 5. In addition, previously when Congress releases. activities that would not trigger the need specifically envisioned the exemption of CFTC to fully register. registrants from broker-dealer registration solely for PART 241—INTERPRETIVE RELEASES Q43: Will the Commission provide an government securities activities incidental to their RELATING TO THE SECURITIES exemption from full broker-dealer futures business, Congress explicitly provided a EXCHANGE ACT OF 1934 AND statutory basis for such action. See Securities registration for notice-registered broker- Exchange Act Release No. 24726 (July 22, 1987), 52 GENERAL RULES AND REGULATIONS dealers that engage in ancillary FR 27962 (July 24, 1987) (adopting Exchange Act THEREUNDER activities in securities other than, but in Rules 3a43–1 and 3a44–1 implementing relation to, security futures products? amendments to Section 3(a)(43) and 3(a)(44) of the 2. Part 241 is amended by adding Exchange Act defining government securities broker A43: At this time, we do not believe and government securities dealer contained in the Release No. 46101 and the release date broad exemptive relief is necessary for Government Securities Act of 1986). of June 21, 2002 to the list of any additional ancillary securities 116 See supra note 5. interpretive releases. activities of notice-registered broker- 117 See, e.g., CEA Section 16(e) [7 U.S.C. 20(e)]. 118 In addition, in connection with the 119 Exchange Act Rules 3a43–1 and 3a44–1 management of its proprietary account, a notice- provide some relief from broker-dealer registration 110 See Federal Reserve Bank of New York Staff registered broker-dealer itself could effect related to a future commission merchant’s ancillary Study: Securities Credit Regulations of the Board of transactions in equity securities in its own account government securities activities. See 17 CFR Governors of the Federal Reserve System, pt. 1, at with a fully registered broker-dealer. Such activities 240.3a43–1; 240.3a44–1. However, such rules are 126 (1979). generally would not independently trigger the need inapposite to notice-registered broker-dealers 111 17 CFR 240.3a43–1. to fully register as a broker-dealer unless they wishing to engage in equity securities activities in 112 17 CFR 240.3a44–1. constituted activities of a ‘‘dealer’’ as that term is addition to activities in security futures products. 113 See supra note 5. defined in the federal securities laws. See supra note 115.
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By the Commission. Materials from Peru, which describes it has transferred ownership of, and all Dated: June 21, 2002. the materials covered by the import rights and interest in, NADA 101–497 Margaret H. McFarland, restrictions, and an accompanying for TINY TIGER (dichlorophene/ Deputy Secretary. image database. The document also toluene) Worming Capsules, NADA [FR Doc. 02–16211 Filed 6–26–02; 8:45 am] clarifies that the beginning date of the 101–498 for LK (dichlorophene/toluene) BILLING CODE 8010–01–P five year extension is June 9, 2002, by Worming Capsules, and ANADA 200– changing the effective date of the 028 for EVICT (pyrantel pamoate) regulation to June 9, 2002. Liquid Wormer to Church & Dwight Co., Inc., 469 North Harrison St., Princeton, DEPARTMENT OF THE TREASURY Corrections NJ 08543–5297. Accordingly, the agency In rule FR Doc. 02–14219, published Customs Service is amending the regulations in on June 6, 2002 (67 FR 38877), make the §§ 520.580 and 520.2043 (21 CFR following corrections: 19 CFR PART 12 520.580 and 520.2043) to reflect the 1. On page 38877, in the first column, transfer of ownership. [T.D. 02—30] the EFFECTIVE DATE section should read Church & Dwight Co., Inc., has not as follows: RIN 1515–AD12 been previously listed in the animal EFFECTIVE DATE: June 9, 2002. drug regulations as a sponsor of an Extension of Import Restrictions 2. On page 38877, in the third approved application. Following these Imposed on Archaeological and column, the first full sentence should changes of sponsorship, Lambert-Kay is Ethnological Materials From Peru; read as follows: no longer the sponsor of any approved Correction The list and accompanying image applications. Accordingly, 21 CFR database may also be found at the 510.600(c)(1) and (c)(2) is being AGENCY: Customs Service, Treasury. following Internet web site address: amended to add entries for Church & http://exchanges.state.gov/culprop. ACTION: Final rule; correction. Dwight Co., Inc., and to remove the Dated: June 24, 2002. entries for Lambert-Kay. Also, SUMMARY: This document contains Sandra L. Bell, corrections to the final rule (T.D. 02–30) § 520.2043 is being revised to reflect a that was published in the Federal Acting Assistant Commissioner, Office of current format. Regulations and Rulings. Register on June 6, 2002. The final rule This rule does not meet the definition extended for a period of five years from [FR Doc. 02–16235 Filed 6–26–02; 8:45 am] of ‘‘rule’’ in 5 U.S.C. 804(3)(A) because June 9, 2002, the import restrictions that BILLING CODE 4820–02–P it is a rule of ‘‘particular applicability.’’ were already in place for certain Therefore, it is not subject to the archaeological and ethnological congressional review requirements in 5 materials from Peru. This document DEPARTMENT OF HEALTH AND U.S.C. 801–808. HUMAN SERVICES corrects the Internet web site address for List of Subjects accessing the Designated List of Food and Drug Administration Archaeological and Ethnological 21 CFR Part 510 Materials from Peru to which the import 21 CFR Parts 510 and 520 Administrative practice and restrictions apply and an accompanying procedure, Animal drugs, Labeling, image database. The document also New Animal Drugs; Change of Sponsor Reporting and recordkeeping clarifies that the beginning date of the requirements. five year extension is June 9, 2002. AGENCY: Food and Drug Administration, 21 CFR Part 520 EFFECTIVE DATE: June 9, 2002. HHS. Animal drugs. FOR FURTHER INFORMATION CONTACT: ACTION: Final rule. (Regulatory Aspects) Joseph Howard, Therefore, under the Federal Food, SUMMARY: The Food and Drug Drug, and Cosmetic Act and under Intellectual Property Rights Branch Administration (FDA) is amending the authority delegated to the Commissioner (202) 927–2336; (Operational Aspects) animal drug regulations to reflect a of Food and Drugs and redelegated to Al Morawski, Trade Operations (202) change of sponsor for two approved new the Center for Veterinary Medicine, 21 927–0402. animal drug applications (NADAs) and CFR parts 510 and 520 are amended as SUPPLEMENTARY INFORMATION: an approved abbreviated new animal follows: Background drug application (ANADA) from Lambert-Kay, A Division of Carter- PART 510—NEW ANIMAL DRUGS A final rule document, published as Wallace, Inc., to Church & Dwight Co., T.D. 02–30 in the Federal Register (67 Inc. The drug labeler code for Church & 1. The authority citation for 21 CFR FR 38877) on Thursday June 6, 2002, Dwight Co., Inc., is also being listed. part 510 continues to read as follows: extended for a period of five years from DATES: This rule is effective June 27, June 9, 2002, the import restrictions that Authority: 21 U.S.C. 321, 331, 351, 352, 2002. were already in place for certain 353, 360b, 371, 379e. archaeological and ethnological FOR FURTHER INFORMATION CONTACT: 2. Section 510.600 is amended in the materials from Peru. The final rule Lonnie W. Luther, Center for Veterinary table in paragraph (c)(1) by removing amended section 12.104g(a), Customs Medicine (HFV–101), Food and Drug the entry for ‘‘Lambert-Kay, A Division Regulations (19 CFR 12.104g(a)). Administration, 7500 Standish Pl., of Carter-Wallace, Inc.’’ and by This document corrects an error in the Rockville, MD 20855, 301–827–0209, e- alphabetically adding an entry for Background section of the document mail: [email protected]. ‘‘Church & Dwight Co., Inc.’’ and in the regarding the Internet web site address SUPPLEMENTARY INFORMATION: Lambert- table in paragraph (c)(2) by removing that was set forth to enable the public Kay, A Division of Carter-Wallace, Inc., the entry ‘‘011615’’ and by numerically to access the Designated List of P.O. Box 1001, Half Acre Rd., Cranbury, adding an entry for ‘‘010237’’ to read as Archaeological and Ethnological NJ 08512–0181, has informed FDA that follows:
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§ 510.600 Names, addresses, and drug (c) * * * labeler codes of sponsors of approved applications. (1) * * * * * * * *
Firm name and address Drug labeler code
******* Church & Dwight Co., Inc., 469 North Harrison St., Princeton, NJ 08543–5297 010237 *******
(2) * * *
Drug labeler code Firm name and address
******* 010237 Church & Dwight Co., Inc., 469 North Harrison St., Princeton, NJ 08543–5297 *******
PART 520—ORAL DOSAGE FORM usual grain ration, or by stomach tube DEPARTMENT OF HEALTH AND NEW ANIMAL DRUGS or dose syringe. HUMAN SERVICES (ii) Indications for use. For the 3. The authority citation for 21 CFR removal and control of infections from Food and Drug Administration part 520 continues to read as follows: the following mature parasites: Large Authority: 21 U.S.C. 360b. strongyles (Strongylus vulgaris, S. 21 CFR Part 558 edentatus, S. equinus), small strongyles, § 520.580 [Amended] pinworms (Oxyuris), and large New Animal Drugs for Use in Animal 4. Section 520.580 Dichlorophene and roundworms (Parascaris). Feeds; Chlortetracycline toluene capsules is amended by (iii) Limitations. Not for use in horses AGENCY: Food and Drug Administration, removing footnote 1 every place it and ponies to be slaughtered for food HHS. appears in the section and in paragraph purposes. When the drug is for ACTION: Final rule. (b)(1) by removing ‘‘011615’’ and by administration by stomach tube, it shall adding in its place ‘‘010237’’. be labeled: ‘‘Federal law restricts this SUMMARY: The Food and Drug 5. Section 520.2043 is revised to read drug to use by or on the order of a Administration (FDA) is amending the as follows: licensed veterinarian.’’ animal drug regulations to reflect § 520.2043 Pyrantel pamoate suspension. (2) Dogs. It is used as follows: approval of a supplemental new animal (i) Dogs and puppies—(A) Amount. drug application (NADA) filed by (a) Specifications. (1) Each milliliter 2.27 mg/lb body weight as a single dose Alpharma, Inc. The supplemental (mL) contains pyrantel pamoate in the animal’s feed bowl by itself or NADA provides for the administration equivalent to 50 milligrams (mg) mixed in a small quantity of food. of Type C medicated feeds containing pyrantel base. (B) Indications for use. For the chlortetracycline to cattle as a top dress (2) Each mL contains pyrantel removal of large roundworms (Toxocara on feed for the treatment of enteritis and pamoate equivalent to 2.27 or 4.54 mg canis and Toxascarias leonina) and pneumonia. pyrantel base. hookworms (Ancylostoma caninum and DATES: This rule is effective June 27, (3) Each mL contains pyrantel Uncinaria stenocephala). pamoate equivalent to 4.54 mg pyrantel 2002. (C) Limitations. Additional treatment base. FOR FURTHER INFORMATION CONTACT: may be required and should be Janis R. Messenheimer, Center for (b) Sponsors. See sponsors in confirmed by fecal examination within Veterinary Medicine (HFV–135), Food § 510.600(c) of this chapter for uses as 2 to 4 weeks. in paragraph (d) of this section. and Drug Administration, 7500 Standish (ii) Dogs, puppies, and lactating Pl., Rockville, MD 20855, 301–827– (1) Nos. 000069 and 059130 for use of bitches after whelping—(A) Amount. 7578, e-mail: [email protected]. the product described in paragraph 2.27 mg/lb body weight. (a)(1) as in paragraph (d)(1) of this (B) Indications for use. To prevent SUPPLEMENTARY INFORMATION: Alpharma, section. reinfections of T. canis. Inc., One Executive Dr., P.O. Box 1399, (2) Nos. 000069, 010237, and 059130 (C) Limitations. Administer to Fort Lee, NJ 07024, filed a supplement for use of the products described in puppies at 2, 3, 4, 6, 8, and 10 weeks to NADA 48–761 for AUREOMYCIN 50, paragraph (a)(2) as in paragraph (d)(2) of of age. Administer to lactating bitches 2 90, or 100 (chlortetracycline) Type A this section. to 3 weeks after whelping. Adult dogs medicated articles. The supplemental (3) No. 023851 for use of the product kept in heavily contaminated quarters NADA provides for the administration described in paragraph (a)(3) as in may be treated at monthly intervals. of Type C medicated feeds containing paragraph (d)(2) of this section. chlortetracycline to calves, beef and (c) Special considerations. See Dated: May 24, 2002. nonlactating dairy cattle as a top dress § 500.25 of this chapter. Andrew J. Beaulieu, on feed to deliver 10 milligrams (mg) (d) Conditions of use—(1) Horses and Acting Director, Office of New Animal Drug chlortetracycline per pound of body ponies. It is used as follows: Evaluation, Center for Veterinary Medicine. weight daily. These medicated feeds are (i) Amount. 3 mg per pound (/lb) body [FR Doc. 02–16050 Filed 6–26–02; 8:45 am] used for the treatment of bacterial weight as a single dose mixed with the BILLING CODE 4160–01–S enteritis caused by Escherichia coli and
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bacterial pneumonia caused by residue studies) required for the § 558.128 Chlortetracycline. Pasteurella multocida susceptible to approval and conducted or sponsored (a) Specifications. Type A medicated chlortetracycline. The supplemental by the applicant. articles containing either NADA is approved as of January 24, The agency has determined under 21 chlortetracycline calcium complex 2002, and the regulations are amended CFR 25.33(a)(1) that this action is of a equivalent to chlortetracycline in 21 CFR 558.128 to reflect the type that does not individually or hydrochloride or, for products intended approval. The basis of approval is cumulatively have a significant effect on for use in milk replacer, discussed in the freedom of information the human environment. Therefore, chlortetracycline hydrochloride. summary. neither an environmental assessment (b) Approvals. See sponsors in Section 558.128 is also being nor an environmental impact statement § 510.600(c) of this chapter for use as in amended to relocate a recently assigned is required. paragraph (e) of this section. withdrawal time (64 FR 23539, May 3, This rule does not meet the definition 1999) to the ‘‘Limitations’’ column of of ‘‘rule’’ in 5 U.S.C. 804(3)(A) because (1) Nos. 046573, 053389, and 066104: the table describing conditions of use. it is a rule of ‘‘particular applicability.’’ 50 to 100 grams per pound (g/lb) of This is being done to improve the Therefore, it is not subject to the Type A medicated article. readability of the regulations. congressional review requirements in 5 (2) No. 017519: 50 g/lb of Type A In accordance with the freedom of U.S.C. 801–808. medicated article. information provisions of 21 CFR part * * * * * List of Subjects in 21 CFR Part 558 20 and 514.11(e)(2)(ii), a summary of (d) Special considerations. (1) In milk safety and effectiveness data and Animal drugs, Animal feeds. replacers or starter feed; include on information submitted to support Therefore, under the Federal Food, labeling the warning: ‘‘A withdrawal approval of this supplemental Drug, and Cosmetic Act and under period has not been established for this application may be seen in the Dockets authority delegated to the Commissioner product in preruminating calves. Do not Management Branch (HFA–305), Food of Food and Drugs and redelegated to use in calves to be processed for veal.’’ and Drug Administration, 5630 Fishers the Center for Veterinary Medicine, 21 (2) Manufacture for use in free-choice Lane, rm. 1061, Rockville, MD 20852, CFR part 558 is amended as follows: feeds as in paragraph (e)(4)(iii) of this between 9 a.m. and 4 p.m., Monday section must conform to § 510.455 of through Friday. PART 558—NEW ANIMAL DRUGS FOR Under section 512(c)(2)(F)(iii) of the USE IN ANIMAL FEEDS this chapter. Federal Food, Drug, and Cosmetic Act (3) When manufactured for use as in (21 U.S.C. 360b(c)(2)(F)(iii)), this 1. The authority citation for 21 CFR paragraph (e)(5)(iv) of this section, approval for food-producing animals part 558 continues to read as follows: include on labeling the warning: qualifies for 3 years of marketing Authority: 21 U.S.C. 360b, 371. ‘‘Psittacosis, avian chlamydiosis, or exclusivity beginning January 24, 2002, 2. Section 558.128 is amended by ornithosis is a reportable communicable because the application contains redesignating paragraphs (a), (b), and (d) disease, transmissible between wild and substantial evidence of the effectiveness as paragraphs (b), (c), and (e), domestic birds, other animals, and man. of the drug involved, any studies of respectively; by adding new paragraphs Contact appropriate public health and animal safety or, in the case of food- (a) and (d); and by revising newly regulatory officials.’’ producing animals, human food safety redesignated paragraphs (b) and (e) to (e) Conditions of use—(1) Chickens. It studies (other than bioequivalence or read as follows: is used as follows:
Chlortetracycline amount Indications for use Limitations Sponsor
(i) 10 to 50 g/ton Chickens: For increased rate of weight gain and im- ...... 046573. proved feed efficiency. . 017519, Do not feed to chickens producing eggs for 046573, human consumption. 053389, 066104.
(ii) 100 to 200 g/ton Chickens: For control of infectious synovitis caused 1. Feed continuously for 7 to 14 d. 046573. by Mycoplasma synoviae susceptible to chlor- tetracycline. 2. Feed continuously for 7 to 14 d; do not 017519, feed to chickens producing eggs for 046573, human consumption. 053389, 066104.
(iii) 200 to 400 g/ton Chickens: For the control of chronic respiratory dis- 1. Feed continuously for 7 to 14 d. 046573. ease (CRD) and air sac infection caused by M. gallisepticum and Escherichia coli susceptible to 2. Feed continuously for 7 to 14 d; do not 017519, chlortetracycline. feed to chickens producing eggs for 046573, human consumption. 053389, 066104.
(iv) 500 g/ton Chickens: For the reduction of mortality due to E. 1. Feed for 5 d. 046573. coli infections susceptible to chlortetracycline. 2. Feed for 5 d; do not feed to chickens 017519, producing eggs for human consumption. 046573, 053389, 066104.
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(2) Turkeys. It is used as follows:
Chlortetracycline amount Indications for use Limitations Sponsor
(i) 10 to 50 g/ton Growing turkeys: For increased rate of weight gain Do not feed to turkeys producing eggs for 017519, and improved feed efficiency. human consumption. 046573, 053389, 066104.
(ii) 200 g/ton Turkeys: For control of infectious synovitis caused Feed continuously for 7 to 14 d; do not 017519, by M. synoviae susceptible to chlortetracycline. feed to turkeys producing eggs for 046573, human consumption. 053389, 066104.
(iii) 400 g/ton 1. Turkeys: For control of hexamitiasis caused by Feed continuously for 7 to 14 d; do not 017519, Hexamita meleagrides susceptible to chlortetra- feed to turkeys producing eggs for 046573, cycline. human consumption. 053389, 066104.
2. Turkey poults not over 4 weeks of age: For re- 017519, duction of mortality due to paratyphoid caused by 046573, Salmonella typhimurium susceptible to chlortetra- 053389, cycline. 066104.
(iv) 25 mg/lb of body weight Turkeys: For control of complicating bacterial orga- Feed continuously for 7 to 14 d; do not 017519, nisms associated with bluecomb (transmissible feed to turkeys producing eggs for 046573, enteritis; coronaviral enteritis) susceptible to human consumption. 053389, chlortetracycline. 066104.
(3) Swine. It is used as follows:
Chlortetracycline amount Indications for use Limitations Sponsor
(i) 10 to 50 g/ton Growing swine: For increased rate of weight gain 017519, and improved feed efficiency. 046573, 053389, 066104.
(ii) 50 to 100 g/ton Swine: For reducing the incidence of cervical 017519, lymphadenitis (jowl abscesses) caused by Group 046573, E. Streptococci susceptible to chlortetracycline. 053389, 066104.
(iii) 400 g/ton Breeding swine: For the control of leptospirosis (re- Feed continuously for not more than 14 d. 017519, ducing the incidence of abortion and shedding of 046573, leptospirae) caused by Leptospira pomona sus- 053389, ceptible to chlortetracycline. 066104.
(iv) 10 mg/lb of body weight 1. Swine: For the treatment of bacterial enteritis Feed approximately 400 g/t, varying with 017519, caused by E. coli and S. choleraesuis and bac- body weight and feed consumption to 046573, terial pneumonia caused by Pasteurella multocida provide 10 mg/lb per day. Feed for not 053389, susceptible to chlortetracycline. more than 14 d; withdraw 5 d prior to 066104. slaughter for sponsor 017519.
2. Swine: For the control of porcine proliferative Feed for not more than 14 d. 046573. enteropathies (ileitis) caused by Lawsonia intracellularis susceptible to chlortetracycline.
(4) Cattle. It is used as follows:
Chlortetracycline amount Indications for use Limitations Sponsor
(i) 0.1 mg/lb of body weight Calves (up to 250 lb): For increased rate of weight See paragraph (d)(1) of this section. 017519, daily. gain and improved feed efficiency. 046573, 053389, 066104.
(ii) 0.5 mg/lb of body weight Beef cattle (over 700 lb); control of active infection Withdraw 48 h prior to slaughter. To spon- 017519, daily. of anaplasmosis caused by Anaplasma marginale sor No. 046573: zero withdrawal time. To 046573, susceptible to chlortetracycline. sponsor No. 053389: 1 d withdrawal 053389, time. 066104.
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Chlortetracycline amount Indications for use Limitations Sponsor
(iii) 0.5 to 2.0 mg/lb of body Beef cattle and nonlactating dairy cattle: As an aid In free-choice cattle feeds such as feed 046573. weight daily. in the control of active infection of anaplsmosis blocks or salt-mineral mixes manufac- caused by A. marginale susceptible to chlortetra- tured from approved Type A articles. See cycline. paragraph (d)(2) of this section.
(iv) 10 mg/lb of body weight 1. Calves, beef and nonlactating dairy cattle; treat- Feed approximately 400 g/ton, varying with 017519, daily. ment of bacterial enteritis caused by E. coli and body weight and feed consumption to 046573, bacterial pneumonia caused by P. multocida or- provide 10 mg/lb per day. Treat for not 053389, ganisms susceptible to chlortetracycline. more than 5 d; in feed including milk re- 066104. placers; withdraw 10 d prior to slaughter. To sponsor No. 053389: 1 d withdrawal time. To sponsor No. 046573: zero with- drawal time. See paragraph (d)(1) of this section.
2. Calves (up to 250 lb): For the treatment of bac- See paragraph (d)(1) of this section. 017519, terial enteritis caused by E. coli susceptible to 046573, chlortetracycline. 053389, 066104.
(v) 4,000 to 20,000 g/ton Calves, beef and nonlactating dairy cattle; treatment As a top dress, varying with body weight 046573. of bacterial enteritis caused by E. coli and bac- and feed consumption, to provide 10 mg/ terial pneumonia caused by P. multocida orga- lb per day. Treat for not more than 5 nisms susceptible to chlortetracycline. days. See paragraph (d)(1) of this sec- tion.
(vi) 25 to 70 mg/head/day Calves (250 to 400 lb): For increased rate of weight See paragraph (d)(1) of this section. 017519, gain and improved feed efficiency. 046573, 053389, 066104.
(vii) 70 mg/head/day Growing cattle (over 400 lb): For increased rate of See paragraph (d)(1) of this section. 017519, weight gain, improved feed efficiency, and reduc- 046573, tion of liver condemnation due to liver abscesses. 053389, 066104.
(viii) 350 mg/head/day 1. Beef cattle: For control of bacterial pneumonia Withdraw 48 h prior to slaughter. For spon- 017519, associated with shipping fever complex caused sor 046573: zero withdrawal time. For 046573, by Pasteurellaspp. susceptible to chlortetra- sponsor 053389: 1 d withdrawal time. 053389, cycline. 066104.
2. Beef cattle (under 700 lb): For control of active Withdraw 48 h prior to slaughter. For spon- 017519, infection of anaplasmosis caused by A. marginale sor 046573: zero withdrawal time. For 046573, susceptible to chlortetracycline. sponsor 053389: 1 d withdrawal time. 053389, 066104.
(5) Minor species. It is used as follows:
Chlortetracycline amount Indications for use Limitations Sponsor
(i) 20 to 50 g/ton Growing sheep; increased rate of weight gain and 046573, improved feed efficiency. 053389, 066104.
(ii) 80 mg/head/day Breeding sheep; reducing the incidence of 046573, (vibrionic) abortion caused by Campylobacter 053389, fetus infection susceptible to chlortetracycline. 066104.
(iii) 200 to 400 g/ton Ducks: For the control and treatment of fowl cholera Feed in complete ration to provide from 8 046573. caused by P. multocida susceptible to chlortetra- to 28 mg/lb of body weight per day de- cycline. pending upon age and severity of dis- ease, for not more than 21 d. Do not feed to ducks producing eggs for human consumption.
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Chlortetracycline amount Indications for use Limitations Sponsor
(iv) 10 mg/g of finished feed Psittacine birds (cockatoos, macaws, and parrots) Feed continuously for 45 d; each bird 046573. daily. suspected or known to be infected with psitta- should consume daily an amount of cosis caused by Chlamydia psittaci sensitive to medicated feed equal to one fifth of its chlortetracycline. body weight.
See paragraph (d)(3) of this section.
(6) Chlortetracycline. It may be used SUMMARY: We are revising the effective in this new area of responsibility by in accordance with this section in date of two sections of a technical September 2002. Therefore, we are combinations as follows: amendments rule published June 18, making the revisions to 33 CFR 3.25– (i) Amprolium in accordance with 2002, that will become effective June 28, 10(b) and 33 CFR 3.25–20(b) effective § 558.55. 2002. That rule makes technical and October 1, 2002. (ii) Amprolium plus ethopabate in organizational amendments to Coast Dated: June 21, 2002. accordance with § 558.58. Guard navigation and navigable waters Joseph J. Angelo, (iii) Bacitracin methylene disalicylate regulations. The two sections of the rule Director of Standards, Marine Safety, Security in accordance with § 558.76. that revise the boundaries between and Environmental Protection. (iv) Clopidol in accordance with Hampton Roads Marine Inspection/ [FR Doc. 02–16237 Filed 6–26–02; 8:45 am] § 558.175. Captain of the Port Zone and the (v) Decoquinate in accordance with Wilmington Marine Inspection/Captain BILLING CODE 4910–15–P § 558.195. of the Port Zone, will not become (vi) Hygromycin B in accordance with effective until October 1, 2002. This rule DEPARTMENT OF TRANSPORTATION § 558.274. changes the effective date for just those (vii) Monensin in accordance with two sections. Coast Guard § 558.355. DATES: The effective date for the (viii) Robenidine hydrochloride in revisions to 33 CFR 3.25–10(b) and 33 CFR Part 117 accordance with § 558.515. 3.25–20(b), published at 67 FR 41331, (ix) Roxarsone in accordance with June 18, 2002, is delayed from June 28, [CGD07–02–070] § 558.530. 2002, until October 1, 2002. (x) Salinomycin alone or with FOR FURTHER INFORMATION CONTACT: If Drawbridge Operation Regulations; roxarsone in accordance with § 558.550. you have questions on this rule, call Atlantic Intracoastal Waterway, Mile (xi) Tiamulin in accordance with Robert Spears, Project Manager, 1074.0 at Hallandale Beach, Broward § 558.600. Standards Evaluation and Development County, FL (xii) Zoalene in accordance with Division, (G–MSR–2), Coast Guard, at AGENCY: Coast Guard, DOT. § 558.680. 202–267–1099. If you have questions on Dated: May 29, 2002. viewing, or submitting material to the ACTION: Notice of temporary deviation from regulations. Andrew J. Beaulieu, docket, call Dorothy Beard, Chief, Acting Director, Office of New Animal Drug Dockets, Department of Transportation, SUMMARY: The Commander, Seventh Evaluation, Center for Veterinary Medicine. at 202–366–5149. Coast Guard District, has approved a [FR Doc. 02–16161 Filed 6–26–02; 8:45 am] SUPPLEMENTARY INFORMATION: On June temporary deviation from the BILLING CODE 4160–01–S 18, 2002, in Volume 67 of Federal regulations governing the operation of Register Number 117, pages 41329– the New Hallandale Beach Boulevard 41334, the Coast Guard published a bridge, mile 1074.0 at Hallandale Beach, DEPARTMENT OF TRANSPORTATION final rule entitled ‘‘Navigation and Florida. This deviation allows this Navigable Waters—Technical bridge to only open a single-leaf from Coast Guard Amendments, Organizational Changes, July 1, 2002, to August 29, 2002. This Miscellaneous Editorial Changes and action is necessary to facilitate workers’ 33 CFR Part 3 Conforming Amendments.’’ The final safety during construction of the new [USCG–2002–12471] rule made editorial and technical bridge. changes throughout title 33 of the Code DATES: RIN 2115–AG44 of Federal Regulations (CFR) to update This deviation is effective from the title before recodification on July 1, 12:01 a.m. on July 1, 2002, until 11 p.m. Navigation and Navigable Waters— 2002. The final rule updated on August 29, 2002. Technical Amendments, organization names and addresses, and ADDRESSES: Material received from the Organizational Changes, made conforming amendments and public, as well as documents indicated Miscellaneous Editorial Changes and technical corrections. in this preamble as being available in Conforming Amendments; Delay of Two revisions changed the the docket, will become part of this Effective Date for Certain Amendments boundaries between the Hampton Roads docket and will be available for Relating to the Marine Inspection Marine Inspection/Captain of the Port inspection or copying at Commander Zones and Captain of the Port Zones Zone (33 CFR 3.25–10(b)) and the (obr), Seventh Coast Guard District, 909 for Hampton Roads and Wilmington Wilmington Marine Inspection/Captain SE. 1st Avenue, Room 432, Miami, FL (NC) of the Port Zone (33 CFR 3.25–20(b)) (67 33131 between 7:30 a.m. and 4 p.m., Monday through Friday, except Federal AGENCY: Coast Guard, DOT. FR 41331). We anticipate that Coast Guard Marine Safety Office Wilmington holidays. ACTION: Final rule; delay of effective will have a fully staffed, operation-ready FOR FURTHER INFORMATION CONTACT: Mr. date for certain amendments. detachment in place to serve the public Michael Lieberum, Project Officer,
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Seventh Coast Guard District, Bridge availability and use of records and add in its place the Web site Section at (305) 415–6744. regulations. This final rule will affect address ‘‘http://www.archives.gov/ SUPPLEMENTARY INFORMATION: The Federal agencies and the public. records_management/publications/ Hallandale Beach Boulevard (SR 824) EFFECTIVE DATE: June 27, 2002. disposition_of_federal_records/ bridge, mile 1074.0 at Hallandale Beach, FOR FURTHER INFORMATION CONTACT: Kim index.html.’’ Broward County, Florida will continue Richardson at telephone number 301– § 1228.22 [Amended] to operate on schedule. The existing 837–2902, or fax number 301–837–0319. operating regulations in 33 CFR 117.261 SUPPLEMENTARY INFORMATION: NARA has 3. In the introductory paragraph of (kk) require the bridge to open on signal; redesigned its public Web site and its § 1228.22, remove the Web site address except that, from 7:15 a.m. to 6:15 p.m., Web site address is changed from ‘‘http://www.nara.gov/records/pubs/’’ the draw need open only on the quarter www.nara.gov to www.archives.gov. and add in its place the Web site hour and three-quarter hour. The new Parts 1228, 1250, and 1254 contain address ‘‘http://www.archives.gov/ _ Hallandale Beach Boulevard bridge, references to the NARA Web site. These records management/publications/ _ _ _ mile 1074.0 at Hallandale Beach, references need to be corrected to reflect disposition of federal records/ Broward County, Florida will be erected the new Web site address. This final index.html.’’ in the down position. When the first leaf rule contains technical amendments § 1228.150 [Amended] is installed it will provide a horizontal such as references to NARA Web sites. clearance of 60 feet between the down This rule is effective upon publication 4. In paragraph (a) of § 1228.150 span and the fender system. for ‘‘good’’ cause as permitted by the remove the Web site address ‘‘http:// The contractors notified the Coast Administrative Procedure Act (5 U.S.C. www.nara.gov’’ and add in its place the Guard on May 28, 2002, that the work 553(d)(3)). NARA believes that delaying Web site address ‘‘http:// on the new bascule leaves would start the effective date for 30 days is www.archives.gov/facilities/ on July 1, 2002, and due to a safety issue unnecessary as this rule represents index.html.’’ involving welding deck plates, and minor technical amendments. Moreover, § 1228.160 [Amended] pouring concrete, they requested that as the public benefits immediately being the new bascule bridge be able to only provided with accurate Web site 5. In paragraph (f) of § 1228.160 open a single-leaf of the bridge from July addresses for NARA’s public Web site, remove the Web site address ‘‘http:// 1, 2002 until August 29, 2002. This any delay in the effective date would be www.nara.gov’’ and add in its place the action will not significantly hinder contrary to the public interest. Web site address ‘‘http:// navigation, as a horizontal clearance of This final rule is not a significant www.archives.gov.’’ 60 feet will be available during the regulatory action for the purposes of § 1228.166 [Amended] construction. Executive Order 12866 and has not been The District Commander has granted reviewed by the Office of Management 6. In paragraph (b) of § 1228.166 a temporary deviation from the and Budget. As required by the remove the Web site address ‘‘http:// operating requirements listed in 33 CFR Regulatory Flexibility Act, I certify that www.nara.gov/regional/cpr.html’’ and 117.5 to construct the new drawbridge. this final rule will not have a significant add in its place the Web site address Under this deviation, the New impact on a substantial number of small ‘‘http://www.archives.gov/facilities/mo/ Hallandale Beach Boulevard bridge, entities. This regulation does not have st_louis.html.’’ mile 1074.0 at Hallandale Beach, need any federalism implications. only open a single-leaf from 12:01 a.m. PART 1250—PUBLIC AVAILABILITY on July 1, 2002, until 10 p.m. on August List of Subjects AND USE OF FEDERAL RECORDS 29, 2002. 36 CFR Part 1228 1. The authority citation for Part 1250 Dated: June 18, 2002. Archives and records. continues to read as follows: Greg Shapley, 36 CFR Part 1250 Chief, Bridge Administration Branch, Seventh Authority: 44 U.S.C. 2104(a), 2204; 5 Coast Guard District. Confidential business information, U.S.C. 552; E.O. 12600, 52 FR 23781, 3 CFR, 1987 Comp., p. 235. [FR Doc. 02–16238 Filed 6–26–02; 8:45 am] Freedom of information. BILLING CODE 4910–15–P 36 CFR Part 1254 § 1250.12 [Amended] Archives and records, Confidential 2. In paragraph (c) of § 1250.12 remove the Web site address ‘‘http:// NATIONAL ARCHIVES AND RECORDS business information, Freedom of information, Micrographics. www.nara.gov/foia’’ and add in its place ADMINISTRATION the Web site address ‘‘http:// For the reasons set forth in the www.archives.gov/research_room/ 36 CFR Parts 1228, 1250, and 1254 preamble, NARA amends parts 1228, foia_reading_room/ 1250, and 1254 of title 36, Code of RIN 3095–AB15 foia_reading_room.html.’’ Federal Regulations, as follows: NARA Regulations; Technical § 1250.24 [Amended] Amendments PART 1228—DISPOSITION OF FEDERAL RECORDS 3. In § 1250.24 remove the Web site AGENCY: National Archives and Records address ‘‘[email protected]’’ and add in Administration (NARA). 1. The authority citation for Part 1228 its place the Web site address ‘‘http:// continues to read as follows: _ ACTION: Final rule. www.archives.gov/global pages/ Authority: 44 U.S.C. chs. 21, 29, and 33. inquire_form.html.’’ SUMMARY: NARA is correcting references § 1250.76 [Amended] to NARA Web sites in its regulations. § 1228.12 [Amended] References to NARA Web sites are 2. In the introductory paragraph of 4. In § 1250.76 remove the Web site currently in our records management § 1228.12, remove the Web site address address ‘‘[email protected]’’ and add in regulations and in our public ‘‘http://www.nara.gov/records/pubs/’’ its place the Web site address ‘‘http://
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www.archives.gov/global_pages/ FOR FURTHER INFORMATION CONTACT: Kim MO 64050–1798. The phone number is inquire_form.html.’’ Richardson at telephone number 301– 816–833–1400 and the fax number is 713–7360, ext. 240, or fax number 301– 816–833–4368. The e-mail address is PART 1254—AVAILABILITY OF 713–7270. [email protected]. RECORDS AND DONATED SUPPLEMENTARY INFORMATION: The (d) Dwight D. Eisenhower Library is HISTORICAL MATERIALS proposed rule was published in the located at 200 SE Fourth Street, Abilene, KS 67410–2900. The phone number is 1. The authority citation for Part 1254 April 15, 2002, Federal Register (67 FR 785–263–4751 and the fax number is continues to read as follows: 18146) for a 60-day comment period. NARA did not receive any comments. 785–263–4218. The e-mail address is Authority: 44 U.S.C. 2101–2118; 5 U.S.C. This rule is effective upon publication [email protected]. 552; and E.O. 12600, 52 FR 23781, 3 CFR, for ‘‘good’’ cause as permitted by the (e) John Fitzgerald Kennedy Library is 1987 Comp., p. 235. Administrative Procedure Act (5 U.S.C. located at Columbia Point, Boston, MA 2. In § 1254.2, revise paragraph (a) to 553(d)(3)). NARA believes that delaying 02125–3398. The phone number is 617– read as follows: the effective date for 30 days is 929–4500 and the fax number is 617– § 1254.2 Location of documents and hours unnecessary as this rule represents 929–4538. The e-mail address is of use. minor technical amendments. Moreover, [email protected]. (f) Lyndon Baines Johnson Library is (a) Researchers should identify the as the public benefits immediately being provided with corrections to email located at 2313 Red River St., Austin, location of the documents needed. TX 78705–5702. The phone number is Information about the location of addresses for the Presidential libraries, phone and fax numbers, and in some 512–916–5137 and the fax number is records may be obtained by writing to 512–916–5171. The e-mail address is the National Archives and Records cases, modifications to the hours that these facilities are open for research, [email protected]. Administration (NWCC1), Washington, (g) Gerald R. Ford Museum is located DC 20408; by sending an e-mail message any delay in the effective date would be contrary to the public interest. at 303 Pearl St., Grand Rapids, MI to http://www.archives.gov/ 49504–5353. The phone number is 616– _ _ This rule is not a significant global pages/inquire form.html; 451–9263 and the fax number is 616– sending a fax request to (301) 837–0483; regulatory action for the purposes of Executive Order 12866 and has not been 451–9570. The e-mail address is or calling (202) 501–5400 or (301) 837– [email protected]. Gerald R. Ford 2000. reviewed by the Office of Management and Budget. As required by the Library is located at 1000 Beal Avenue, * * * * * Regulatory Flexibility Act, I certify that Ann Arbor, MI 48109–2114. The phone Dated: June 21, 2002. this rule will not have a significant number is 734–741–2218 and the fax John W. Carlin, impact on a substantial number of small number is 734–741–2341. The e-mail Archivist of the United States. entities. This regulation does not have address is [email protected]. any federalism implications. (h) Jimmy Carter Library is located at [FR Doc. 02–16165 Filed 6–26–02; 8:45 am] 441 Freedom Parkway, Atlanta, GA BILLING CODE 7515–01–P List of Subjects in 36 CFR Part 1253 30307–1498. The phone number is 404– Archives and records. 331–3942 and the fax number is 404– NATIONAL ARCHIVES AND RECORDS For the reasons set forth in the 730–2215. The e-mail address is ADMINISTRATION preamble, NARA amends part 1253 of [email protected]. title 36, Code of Federal Regulations, (i) Ronald Reagan Library is located at 36 CFR Part 1253 chapter XII, as follows: 40 Presidential Dr., Simi Valley, CA 93065–0699. The phone number is 800– RIN 3095–AB08 PART 1253—LOCATION OF RECORDS 410–8354 or 805–522–8444 and the fax AND HOURS OF USE number is 805–522–9621. The e-mail NARA Facilities; Addresses and Hours address is [email protected]. 1. The authority citation for Part 1253 (j) George Bush Library is located at AGENCY: National Archives and Records continues to read as follows: Administration (NARA). 1000 George Bush Drive West, College Authority: 44 U.S.C. 2104(a). Station, TX 77845. The phone number ACTION: Final rule. 2. Amend § 1253.3 by revising is 979–260–9554 and the fax number is SUMMARY: The National Archives and paragraphs (a) through (j) to read as 979–260–9557. The e-mail address is Records Administration is amending its follows: [email protected]. 3. Revise § 1253.5 to read as follows: regulation that lists NARA facilities and § 1253.3 Presidential Libraries. hours when the public and other * * * * * § 1253.5 National Personnel Records Federal agency staff may use the records Center. in those facilities. This final rule (a) Herbert Hoover Library is located (a) Military Personnel Records. includes corrections to email addresses at 210 Parkside Dr., West Branch, IA NARA—National Personnel Records for the Presidential libraries, corrections (mailing address: PO Box 488, West Center—Military Personnel Records is to phone and fax numbers, and in some Branch, IA 52358–0488). The phone located at 9700 Page Ave., St. Louis, MO cases, modifies the hours that these number is 319–643–5301 and the fax 63132–5100. The hours are 7:30 a.m. to facilities are open for research. In number is 319–643–5825. The e-mail 3:45 p.m., Monday through Friday, addition, NARA is also implementing a address is [email protected]. (b) Franklin D. Roosevelt Library is except Federal holidays. uniform policy on research room facility located at 4079 Albany Post Rd., Hyde (b) Civilian Personnel Records. closings for Federal holidays in order to Park, NY 12538–1999. The phone NARA—National Personnel Records standardize them throughout NARA. number is 845–229–8114 and the fax Center—Civilian Personnel Records is This final rule affects members of the number is 845–229–0872. The e-mail located at 111 Winnebago St., St. Louis, public who do research at NARA address is [email protected]. MO 63118–4199. The hours are 7:30 facilities. (c) Harry S. Truman Library is located a.m. to 3:45 p.m., Monday through EFFECTIVE DATE: June 27, 2002. at 500 W. US Hwy 24, Independence, Friday, except Federal holidays.
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4. Amend § 1253.6 by revising Monday through Friday. The telephone Saturday will be closed on the Saturday paragraphs (a) through (f), and (h) number is 650–876–9001. as well as the Friday. through (l) to read as follows: (l) NARA—Pacific Region (Laguna Dated: June 21, 2002. Niguel, CA) is located at 24000 Avila John W. Carlin, § 1253.6 Records Centers. Rd., 1st Floor East Entrance, Laguna * * * * * Niguel, CA (mailing address: PO Box Archivist of the United States. (a) NARA—Northeast Region (Boston) 6719, Laguna Niguel, CA 92607–6719). [FR Doc. 02–16166 Filed 6–26–02; 8:45 am] is located at the Frederick C. Murphy The hours are 8 a.m. to 4:30 p.m., BILLING CODE 7515–01–P Federal Center, 380 Trapelo Rd., Monday through Friday. The telephone Waltham, MA 02452–6399. The hours number is 949–360–2626. are 8 a.m. to 4:30 p.m., Monday through * * * * * Friday. The telephone number is 781– ENVIRONMENTAL PROTECTION 647–8104. 5. Amend § 1253.7 by revising AGENCY (b) NARA—Northeast Region paragraphs (b), (d), (g), (h), and (i) to (Pittsfield, MA) is located at 10 Conte read as follows: 40 CFR Part 180 Drive, Pittsfield, MA 01201–8230. The § 1253.7 Regional Archives. hours are 8 a.m. to 4:30 p.m., Monday [OPP–2002–0087; FRL–7185–1] * * * * * through Friday. The telephone number (b) NARA—Northeast Region Cyhalofop-butyl; Pesticide Tolerance is 413–445–6885. (Pittsfield, MA) is located at 10 Conte (c) NARA—Mid Atlantic Region Technical Correction Drive, Pittsfield, MA 01201–8230. The (Northeast Philadelphia) is located at hours are 8 a.m. to 4:30 p.m., Monday 14700 Townsend Rd., Philadelphia, PA AGENCY: Environmental Protection through Friday. The telephone number 19154–1096. The hours are 8 a.m. to Agency (EPA). is 413–445–6885. 4:30 p.m., Monday through Friday. The ACTION: Technical correction. telephone number is 215–671–9027. * * * * * (d) NARA—Southeast Region (d) NARA—Mid Atlantic Region SUMMARY: EPA issued a final rule in the (Atlanta) is located at 1557 St. Joseph (Center City Philadelphia) is located at Federal Register of June 4, 2002 Ave., East Point, GA 30344–2593. The 900 Market St., Philadelphia, PA 19107– establishing time-limited tolerances for hours are 7 a.m. to 4 p.m., Monday 4292. The hours are 8 a.m. to 5 p.m., cyhalofop-butyl in § 180.579. However, through Friday. The telephone number Monday through Friday. The telephone time-limited tolerances for cyhalofop- is 404–763–7474. number is 215–597–3000. butyl were previously established under (e) NARA—Great Lakes Region * * * * * § 180.576. This document is being (Dayton) is located at 3150 Springboro (g) NARA—Central Plains Region issued to amend 40 CFR 180.576 and to Rd., Dayton, OH 45439–1883. The hours (Kansas City) is located at 2312 E. remove § 180.579. are 7 a.m. to 4:30 p.m., Monday through Bannister Rd., Kansas City, MO 64131– DATES: This regulation is effective June Friday. The telephone number is 937– 3060. The hours are 7:30 a.m. to 4 p.m., 27, 2002. Objections and requests for 225–2852. Monday through Friday. The telephone hearings, identified by docket ID (f) NARA—Great Lakes Region number is 816–926–6920. number OPP–2002–0087, must be (Chicago) is located at 7358 S. Pulaski (h) NARA—Southwest Region (Fort received on or before August 26, 2002. Rd., Chicago, IL 60629–5898. The hours Worth) is located at 501 West Felix St., are 8 a.m. to 4:30 p.m., Monday through Bldg. 1, Dock 1, Fort Worth, TX (mailing ADDRESSES: Comments may be Friday. The telephone number is 773– address: P.O. Box 6216, Fort Worth, TX, submitted by mail, electronically, or in 581–7816. 76115–0216). The hours are 6:30 a.m. to person. Please follow the detailed instructions for each method as * * * * * 4 p.m., Monday through Friday. The (h) NARA—Central Plains Region telephone number is 817–334–5525. provided in Unit II. of the (Lee’s Summit, MO) is located at 200 (i) NARA—Rocky Mountain Region SUPPLEMENTARY INFORMATION. To ensure Space Center Drive, Lee’s Summit, MO (Denver) Textual Research room is proper receipt by EPA, it is imperative 64064–1182. The hours are 8 a.m. to 4 located at Building 48, Denver Federal that you identify docket ID number p.m., Monday through Friday. The Center, West 6th Ave. and Kipling OPP–2002–0087 in the subject line on telephone number is 816–823–6272. Street, Denver, CO. The Microfilm the first page of your response. (i) NARA—Southwest Region (Fort Research room is located at Building 46, FOR FURTHER INFORMATION CONTACT: By Worth) is located at 501 West Felix St., Denver Federal Center, West 6th Ave. mail: Joanne I. Miller, Registration Bldg. 1, Fort Worth, TX (mailing and Kipling Street, Denver, CO. (The Division (7505C), Office of Pesticide address: P.O. Box 6216, Fort Worth, TX mailing address: PO Box 25307, Denver, Programs, Environmental Protection 76115–0216). The hours are 8 a.m. to CO 80225–0307). The hours are 7:30 Agency, 1200 Pennsylvania Ave., 2:00 p.m., Monday through Friday. The a.m. to 3:45 p.m., Monday through NW.,Washington, DC 20460; telephone telephone number is 817–334–5515. Friday. The telephone number is 303– number: (703) 305–6224; e-mail address: (j) NARA—Rocky Mountain Region 236–0817. [email protected] (Denver) is located at Building 48, * * * * * SUPPLEMENTARY INFORMATION: Denver Federal Center, West 6th Ave. 6. Add § 1253.8 to read as follows: and Kipling Street, Denver, CO (mailing I. General Information § 1253.8 Are NARA research room address: PO Box 25307, Denver, CO A. Does this Action Apply to Me? 80225–0307). The hours are 7:30 a.m. to facilities closed on Federal holidays? 4 p.m., Monday through Friday. The (a) NARA research room facilities are You may be affected by this action if telephone number is 303–236–0804. closed on all Federal holidays. you are an agricultural producer, food (k) NARA—Pacific Region (San (b) When a Federal holiday is on a manufacturer, or pesticide Francisco) is located at 1000 Saturday but the official observance is manufacturer. Potentially affected Commodore Dr., San Bruno, CA 94066– on the preceding Friday, the research categories and entities may include, but 2350. The hours are 7:30 a.m. to 4 p.m., rooms that are normally open on are not limited to:
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Branch (PIRIB), Rm. 119, Crystal Mall or expanding exemptions might NAICS Examples of poten- Categories codes tially affected enti- #2, 1921 Jefferson Davis Hwy., adversely impact small entities and ties Arlington, VA, from 8:30 a.m. to 4 p.m., concluded, as a generic matter, that Monday through Friday, excluding legal there is no adverse economic impact. Industry 111 Crop production 112 Animal production holidays. The PIRIB telephone number The factual basis for the Agency’s 311 Food manufacturing is (703) 305–5805. generic certification for tolerance 32532 Pesticide manufac- III. What Does this Technical actions published on May 4, 1981 (46 turing Correction Do? FR 24950), and was provided to the Chief Counsel for Advocacy of the Small This listing is not intended to be Time-limited tolerances for Business Administration. exhaustive, but rather provides a guide cyhalofop-butyl on various commodities List of Subjects in 40 CFR Part 180 for readers regarding entities likely to be were published in the Federal Register affected by this action. Other types of on June 4, 2002 (67 FR 38407) (FRL– Environmental protection, entities not listed in the table could also 7178–5)] under 40 CFR 180.579. Administrative practice and procedure, be affected. The North American However, time-limited tolerances for Agricultural commodities, Pesticides Industrial Classification System cyhalofop-butyl were previously and pests, Reporting and recordkeeping (NAICS) codes have been provided to established under § 180.576. This requirements. assist you and others in determining document is being issued to update 40 whether or not this action might apply CFR 180.576 and to remove § 180.579. Dated: June 20, 2002. to certain entities. If you have questions IV. Do Any of the Regulatory Debra Edwards, regarding the applicability of this action Assessment Requirements Apply to this Acting Director, Registration Division, Office to a particular entity, consult the person Action? of Pesticide Programs. listed under FOR FURTHER INFORMATION This action corrects tolerances Therefore, 40 CFR part 180 is CONTACT. established under FFDCA section corrected as follows: B. How Can I Get Additional 408(e). The Office of Management and Information, Including Copies of this Budget (OMB) has exempted these types PART 180—[AMENDED] Document and Other Related of actions from review under Executive Documents? Order 12866, entitled Regulatory 1. The authority citation for part 180 continues to read as follows: 1. Electronically.You may obtain Planning and Review (58 FR 51735, electronic copies of this document, and October 4, 1993). Because this technical Authority: 21 U.S.C. 321(q), 346(a) and certain other related documents that correction has been exempted from 374. might be available electronically, from review under Executive Order 12866 2. Section 180.576 is revised to read the EPA Internet Home Page at http:// due to its lack of significance, this as follows: www.epa.gov/. To access this technical correction is not subject to document, on the Home Page select Executive Order 13211, entitled Actions § 180.576 Cyhalofop-butyl; tolerances for ‘‘Laws and Regulations,’’ ‘‘Regulations Concerning Regulations That residues. and Proposed Rules,’’ and then look up Significantly Affect Energy Supply, (a) General. Time-limited tolerances the entry for this document under the Distribution, or Use (66 FR 28355, May are established for combined residues of ‘‘Federal Register—Environmental 22, 2001). In addition, this technical cyhalofop (cyhalofop-butyl, R-(+)-n- Documents.’’ You can also go directly to correction does not contain any butyl-2-(4(4-cyano-2-fluorophenoxy)- the Federal Register listings at http:// information collections subject to OMB phenoxy)propionate, plus cyhalofop www.epa.gov/fedrgstr/. A frequently approval under the Paperwork acid, R-(+)-2-(4(4-cyano-2- updated electronic version of 40 CFR Reduction Act, 44 U.S.C. 3501 et seq., fluorophenoxy)-phenoxy)propionic part 180 is available at http:// or impose any enforceable duty or acid) and the di-acid metabolite, (2R)-4- www.access.gpo.gov/nara /cfr/ contain any unfunded mandate as [4-(1-carboxyethoxy)phenoxy]-3- cfrhtml_00/Title_40/40cfr180_00.html, a described under Title II of the Unfunded fluorobenzoic acid, from the application beta site currently under development. Mandates Reform Act of 1995 (Public of the herbicide cyhalofop-butyl in or on 2. In person. The Agency has Law 104–4). Nor does it require any the following raw agricultural established an official record for this prior consultation as specified by commodities: action under docket ID number OPP– Executive Order 12875, entitled 2002–0087. The official record consists Enhancing the Intergovernmental Commodity Parts per Expiration/Rev- of the documents specifically referenced Partnership (58 FR 58093, October 28, million ocation Date in this action, and other information 1993), or special considerations as related to this action, including any required by Executive Order 12898, Rice, grain 0.03 6/1/2007 information claimed as Confidential entitled Federal Actions to Address Rice, straw 8.0 6/1/2007 Business Information (CBI). This official Environmental Justice in Minority record includes the documents that are Populations and Low-Income (b) Section 18 emergency exemptions. physically located in the docket, as well Populations (59 FR 7629, February 16, [Reserved] as the documents that are referenced in 1994), or require OMB review in (c) Tolerances with regional those documents. The public version of accordance with Executive Order 13045, registrations. [Reserved] the official record does not include any entitled Protection of Children from (d) Indirect or inadvertent residues. information claimed as CBI. The public Environmental Health Risks and Safety [Reserved] version of the official record, which Risks (62 FR 19885, April 23, 1997). includes printed, paper versions of any In addition, under the Regulatory § 180.579 [Removed] electronic comments submitted during Flexibility Act (5 U.S.C. 601 et seq.), the 3. Section 180.579 is removed. an applicable comment period is Agency previously assessed whether available for inspection in the Public establishing tolerances, exemptions [FR Doc. 02–16279 Filed 6–26–02; 8:45 am] Information and Records Integrity from tolerances, raising tolerance levels, BILLING CODE 6560–50–S
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FEDERAL COMMUNICATIONS submitted to Judith B. Herman, Federal Final Regulatory Flexibility Analysis COMMISION Communications Commission, Room 1- As required by the Regulatory C804, 445 12th Street, SW, Washington, Flexibility Act (‘‘RFA’’), an Initial 47 CFR Part 78 DC 20554, or via the Internet to Regulatory Flexibility Analysis [CS Docket No. 99–250, FCC 02–149] [email protected]. (‘‘IRFA’’) was incorporated in the Notice The Notice of Proposed Rule Making of Proposed Rulemaking (‘‘NPRM’’) in Cable Television Relay Service (NPRM) in this proceeding may be CS Docket No. 99–250, FCC 99–166. The AGENCY: Federal Communications found at 64 FR 41899, August 2, 1999. Commission sought written public Commission. comment on the proposals in the NPRM, Synopsis of the Report and Order including comment on the IRFA. This ACTION: Final rule. All Multichannel Video Programming Final Regulatory Flexibility Analysis SUMMARY: The Commission amends its Distributors (MVPDs) will now be (‘‘FRFA’’) conforms to the RFA. rules to expand eligibility for licenses in eligible for licenses to operate A. Need for, and Objectives of, this the Cable Television Relay Service microwave facilities in the Cable Report and Order (CARS) to all Multichannel Video Television Relay Service (CARS). The Commission undertook this Programming Distributors (‘‘MVPDs’’). Currently, franchised cable systems and proceeding in response to a petition for This action will enhance opportunities wireless cable systems are eligible for for additional competition to incumbent rulemaking filed by OpTel, Inc. The CARS licenses, but private cable NPRM sought comment on OpTel’s cable operators. It will increase the operators (PCOs), Direct Broadcast number of frequencies available to more request that we expand the definition of Satellite (DBS), Open Video Systems entities eligible to use the 12 GHz Cable MVPDs and treat all MVPDs equally for (OVS) and others are not. This action access to microwave frequencies. Thus, Television Relay Service (‘‘CARS’’) enhances opportunities for additional frequency band to include private cable all MVPDs will have the opportunity to competition to incumbent cable use CARS frequencies to support their operators (‘‘PCOs’’). CARS is a operators by making MVPDs eligible to microwave radio service used delivery of video services in a balanced use all CARS frequencies, including competitive environment. predominantly by cable systems to frequencies in the 12 GHz CARS band provide video links between portions of DATES: Effective July 29, 2002, except (12.70 to 13.20 GHz). It also increases their systems. PCOs provide a video for § 78.13(f), which contains the number of frequencies available to service similar to cable systems, for information collection requirements that PCOs and other MVPDs for video example, to apartment buildings, but have not been approved by OMB. The programming distribution in the 18 GHz PCOs do not use public rights-of-way. Federal Communications Commission band (17.70 to 18.58 GHz), in addition By its own motion, the Commission will publish a document in the Federal to those on which they may currently expanded the NPRM to include other Register announcing the effective date. operate under part 101 of the multichannel video programming FOR FURTHER INFORMATION CONTACT: Commission’s rules. Thus, all MVPDs distributors (‘‘MVPDs’’). MVPDs are Wayne T. McKee, 202–418–2355, or will have the opportunity to use CARS anyone who provides multiple channels John P. Wong, 202–418–7012. For frequencies to provide video services in of video programming to subscribers. additional information concerning the a balanced competitive environment in This Report and Order adopts rules information collection(s) contained in which all MVPDs share microwave which will increase competition to this document, contact Judith B. spectrum. incumbent, franchised cable operators, Herman at 202–418–0214, or via the particularly with regard to video Internet at [email protected]. CARS licensees may now use the frequency band segment from 13.20 to programming service to multi-dwelling SUPPLEMENTARY INFORMATION: This is a 13.25 GHz for delivery of video units, by expanding eligibility to use the summary of the Commission’s Report programming on a secondary basis. CARS band to PCOs and other MVPDs, and Order (R&O) in CS Docket No. 99– CARS license applicants need no longer such as direct broadcast satellite 250; FCC 02–149, adopted May 21, apply for waivers for minor variations in (‘‘DBS’’) and open video systems 2002, and released May 21, 2002. The the frequency of channels. They may (‘‘OVS’’). This Report and Order complete text of this R&O is available apply for the usual channel changes as promotes competition in multichannel for inspection and copying during video programming distribution by an alternate channel regime. A normal business hours in the FCC allowing new services to compete with frequency coordinator suggested that Reference Information Center, Courtyard existing services by giving those new CARS should use the same frequency Level, 445 12th Street, SW., services access to the same technologies coordination procedures as other Washington, DC, and also may be as existing services while balancing the services that share these frequencies; purchased from the Commission’s copy interests of incumbent distributors by this suggestion is adopted. contractor, Qualex International, Portals not hampering their use of those II, 445 12th Street, SW., Room CY–B402, Paperwork Reduction Act technologies. Washington, DC 20554, telephone 202– 863–2893, facsimile 202–863–2898, or This Report and Order contains a B. Summary of Significant Issues Raised via e-mail at [email protected]. modified information collection. The by Public Comments in Response to Alternative formats (computer diskette, Commission, as part of its continuing IRFA large print, audio cassettes, and Braille) effort to reduce paperwork burdens, We received one comment in direct are available to persons with disabilities invites the general public to comment response to the IRFA. The Society of by contacting Brian Millin at 202–418– on the information collection(s) Broadcast Engineers (‘‘SBE’’) states that 7426, TTY 202–418–7365, or at bmillin contained in this Report and Order as the Commission analysis in the IRFA of @fcc.gov. In addition to filing comments required by the Paperwork Reduction the impact on small entities did not with the Office of the Secretary, a copy Act of 1995, Public Law 104–13. Public include the needs for production of any comments on the information and agency comments are due August spectrum of television broadcasters and collection(s) contained herein should be 26, 2002. Local Television Transmission Service
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(‘‘LTTS’’). Although the IRFA did not 85,006 governmental entities, we The Communications Act also specifically mention broadcasters or estimate that 81,600 (96%) are small contains a definition of a small cable LTTS providers, the Commission did entities. Below, we further describe and system operator, which is ‘‘a cable request comment concerning the impact estimate the number of small entity operator that, directly of through an on small businesses, small licensees and regulatees that may be affiliate, serves in the aggregate fewer organizations, and small business affected by these rules. than 1% of all subscribers in the United concerns. In addition, the NPRM The rules we adopt as a result of the States and is not affiliated with any requested comment on ‘‘the Report and Order will add PCOs and entity or entities whose gross annual compatibility of shared use of the other MVPDs to those entities eligible to revenues in the aggregate exceed spectrum between fixed PCOs and use the 12 GHz CARS frequency band. $250,000,000.’’ The Commission has mobile [broadcast auxiliary stations]’’ The 12 GHz CARS frequency band, determined that there are 61,700,000 and on ‘‘any existing or future impact 12.70 GHz–13.25 GHz, is currently used subscribers in the United States. this sharing may have with BAS, by franchised cable, licensees and Therefore, a cable operator serving especially as it relates to the required conditional licensees of channels in the fewer than 617,000 subscribers shall be digital transition for broadcasters.’’ SBE Multipoint Distribution Service deemed a small operator, if its annual and others discussed this specific issue (‘‘MDS’’), Multichannel, Multipoint revenues, when combined with the total in their comments. Briefly, SBE opposes Distribution Service (‘‘MMDS’’), and annual revenues of all of its affiliates, do use of the spectrum from 13.20 GHz to Instructional Television Fixed Services not exceed $250 million in the 13.25 GHz by PCOs as proposed by the (‘‘ITFS’’). The 12 GHz CARS spectrum, aggregate. Based on available data, we PCOs. The Order addresses and pays all 12 GHz–12.35 GHz, is also used by find that the number of cable operators due deference to the concerns and television broadcasters for both fixed serving 617,000 subscribers or less totals issues raised. The PCOs are allocated and short-range mobile transmissions by approximately 1450. Although it seems the spectrum only as secondary users of Broadcast Auxiliary Stations (‘‘BAS’’). certain that some of these cable system the spectrum from 13.20 GHz to 13.25 Small MVPDs. SBA has developed a operators are affiliated with entities GHz, which means they cannot cause definition of small entities for cable and whose gross annual revenues exceed interference to television broadcasters or other pay television services, which $250,000,000, we are unable at this time LTTS providers. includes such companies generating $11 to estimate with greater precision the C. Description and Estimate of the million or less in annual receipts. This number of cable system operators that Number of Small Entities to Which the definition includes cable system would qualify as small cable operators Rules Will Apply operators, closed circuit television under definition in the Communications Act. It should be further noted that The RFA directs the Commission to services, direct broadcast satellite recent industry estimates project that provide a description of and, where services, multipoint distribution there will be a total of 64,000,000 feasible, an estimate of the number of systems, satellite master antenna subscribers and we have based our fee small entities that will be affected by the systems, and subscription television revenue estimates on that figure. rules adopted herein. The RFA defines services. According to the Census the term ‘‘small entity’’ as having the Bureau, there were 1,423 such cable and Private Cable Operators/Satellite same meaning as the terms ‘‘small other pay television services generating Master Antenna Systems. Based on our business,’’ ‘‘small organization,’’ and less than $11 million in revenue. We most recent information, we estimate ‘‘small governmental jurisdiction’’ address below services individually to that there are 3400 private cable under section 3 of the Small Business provide a more precise estimate of small operators serving multiple dwelling Act. Under the Small Business Act, a entities. units that qualify as small cable small business concern is one which: (1) The Commission has developed, with companies. Some of those companies Is independently owned and operated; SBA’s approval, its own definition of a may have grown to serve from 800,000 (2) is not dominant in its field of small cable system operator for the to 1.6 million subscribers, and others operation; and (3) satisfies any purposes of rate regulation. Under the may have been involved in transactions additional criteria established by the Commission’s rules, a ‘‘small cable that caused them to be combined with Small Business Administration company’’ is one serving fewer than other cable operators. Consequently, we (‘‘SBA’’). A small organization is 400,000 subscribers nationwide. Based estimate that there are fewer than 3,400 generally ‘‘any not-for-profit enterprise on our most recent information, we small entity private cable system which is independently owned and estimate that there were 1439 cable operators that may be affected by the operated and is not dominant in its operators that qualified as small cable decisions and rules we are adopting. field.’’ Nationwide, as of 1992, there companies at the end of 1995. Since Open Video System (‘‘OVS’’). The were approximately 275,801 small then, some of those companies may Commission has certified eleven OVS organizations. ‘‘Small government have grown to serve over 400,000 operators. Of these eleven, only two are jurisdiction’’ generally means subscribers, and others may have been providing service. Affiliates of ‘‘governments of cities, counties, towns, involved in transactions that caused residential Communications Network, townships, villages, school districts, or them to be combined with other cable Inc. (‘‘RCN’’) received approval to special districts, with a population of operators. The Commission’s rules operate OVS systems in New York City, less than 50,000.’’ As of 1992, there define a ‘‘small system,’’ for the Boston, Washington, D.C., and other were approximately 85,006 purposes of rate regulation, as a cable areas. RCN has sufficient revenues to governmental entities in the United system with 15,000 or fewer subscribers. assure us that they do not qualify as States. This number includes 38,978 The Commission does not request nor small business entities. Little financial counties, cities, and towns: of these, does the Commission collect information is available for the other 37,566, or 96%, have populations of information concerning cable systems entities authorized to provide OVS fewer than 50,000. The Census Bureau serving 15,000 or fewer subscribers and service that are not yet operational. estimates that this ratio is thus is unable to estimate, at this time, Given that other entities have been approximately accurate for all the number of small cable systems authorized to provide OVS service but governmental entities. Thus, of the nationwide. have not yet begun to generate revenues,
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we conclude that at least some of the (3) the use of performance rather than with respect to the Paperwork OVS operators qualify as small entities. design standards; and (4) an exemption Reduction Act of 1995 and found to Multichannel, Multipoint Distribution from coverage of the rule, or any part impose new or modified reporting or Service (‘‘MMDS’’). The Commission thereof, for such small entities.’’ record keeping requirements or burdens refined the definition of ‘‘small entity’’ This Report and Order creates on the public. Implementation of these for the auction of MMDS as an entity opportunities for small entities, such as new or modified reporting or record that, together with its affiliates, has PCOs and other MVPDs, to compete keeping requirements will be subject to average gross revenues that are not more with incumbent providers of video approval by the Office of Management than $40 million for the proceeding programming in the 12 GHz CARS and Budget (OMB) as prescribed by the three calendar years. This definition of frequency band. The Commission’s Paperwork Reduction Act. a small entity, in the context of the decision will allow new entrants, many Consequently, amendments to § 78.13 of Commission’s decision concerning of whom are deemed to be small the Commission’s rules WILL NOT MMDS auctions, has been approved by entities, to have access to the 12 GHz BECOME EFFECTIVE until OMB the SBA. The Commission completed its CARS frequency band on an equal basis approval of the modified reporting or MMDS auction in March 1996 for with franchised cable operators and record keeping requirements. authorization in 493 basic trading areas other users. No significant alternatives IT IS FURTHER ORDERED that the (‘‘BTAs’’). Of the 67 winning bidders, 61 were considered other than to examine Consumer and Governmental Affairs qualified as small entities. Five winners whether the options currently available Bureau, Reference Information Center, indicated that they were minority- to the entities currently not eligible for SHALL SEND a copy of this Report and owned and four winners indicated that CARS licenses are adequate for their Order, including the Final Regulatory they were women-owned businesses. needs. These options are use of 18 GHz Flexibility Analysis, to the Chief MMDS is an especially competitive frequencies or 23 GHz frequencies Counsel for Advocacy of the Small service, with approximately 1573 under part 101 of the Commission’s Business Administration. previously authorized and proposed rules. In the Order, the Commission has MMDS facilities. Information available decided that because the 12 GHz CARS List of Subjects in 47 CFR Part 78 to us indicates that no MMDS facility band provides greater range at a reduced generates revenue in excess of $11 cost, that the petitioning PCOs should Cable television, Communications million annually. We conclude that be given the relief requested. On its own equipment, Radio, Reporting and there are approximately 1634 small motion, the Commission extended the recordkeeping requirements. MMDS providers as defined by the SBA eligibility to use the 12 GHz CARS band Federal Communications Commission. and the Commission’s auction rules. to all MVPDs. Further, the Commission Marlene H. Dortch, made these entities eligible to use all D. Description of Projected Reporting, Secretary. CARS frequencies, rather than just the Record Keeping And other Compliance 12 GHz band. This will eliminate a Rule Changes Requirements significant barrier to entry into the For the reasons discussed in the This Report and Order makes an MVPD market for small entities and will preamble, the Federal Communications additional class that will be eligible for lessen the cost of expansion for others. Commission amends 47 CFR part 78 as CARS licenses. As such, they will be Small entities, from a regulatory follows: subject to the reporting, record keeping, standpoint, will now be on a par with and other compliance requirements of wireless cable operators and, in this PART 78—CABLE TELEVISION RELAY CARS. These newly eligible entities will sense, with cable systems. SERVICE be required to file an application, FCC Report to Congress. We will send a Form 327, to obtain a license and to copy of this Report and Order, including 1. The authority for part 78 continues modify or renew that license. They will this FRFA, in a report to Congress to read as follows: also be required to maintain certain pursuant to the Congressional Review station records related to maintenance Act of 1996, 5 U.S.C. 801(a)(1)(A). A Authority: Secs. 2, 3, 4, 301, 303, 307, 308, of the technical parameters of the 309, 48 Stat., as amended, 1064, 1065, 1066, copy of this report and Order and FRFA 1081, 1082, 1083, 1084, 1085; 47 U.S.C. 152, station, as specified in § 78.69 of the (or summary thereof) will also be 153, 154, 301, 303, 307, 308, 309. Commission’s rules. published in the Federal Register, E. Steps Taken To Minimize the Impact pursuant to 5 U.S.C. 604(b), and will be 2. In § 78.13, add paragraph (f) to read on Small Entities, and Significant sent to the Chief Counsel for Advocacy as follows: of the Small Business Administration. Alternatives Considered § 78.13 Eligibility for license. The RFA requires an agency to Ordering Clauses * * * * * describe any significant alternatives that Accordingly, IT IS ORDERED that, (f) To private cable operators and it has considered in developing its pursuant to authority found in sections other multichannel video programming approach, which may include the 4(i)–(j) of the Communications Act of distributors not specifically identified in following four alternatives (among 1934, as amended, 47 U.S.C. 154(i)–(j), this section. others): ‘‘(1) The establishment of 303(c), (f), and (r), and 309(j), the differing compliance or reporting Commission’s rules ARE AMENDED as 3. In § 78.18, revise the tables in requirements or timetables that take into set forth in this Order. paragraph (a)(2) and add paragraph (m) account the resources available to small IT IS FURTHER ORDERED that the to read as follows: entities; (2) the clarification, amendments to §§ 78.18 and 78.36 of § 78.18 Frequency assignments. consolidation, or simplification of the Commission’s rules WILL BECOME compliance and reporting requirements EFFECTIVE July 29, 2002. The action (a) * * * under the rule for such small entities; contained herein has been analyzed (2) * * *
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GROUP C CHANNELS
Alternate channel Designation Channel boundaries boundaries (GHz) [Ca (GHz) [C channels] channels]
C01 1 ...... 12.7005–12.7065 12.7005–12.7065 C02 1 ...... 12.7065–12.7125 12.7065–12.7125 C03 1 ...... 12.7125–12.7185 12.7125–12.7185 C04 1 ...... 2 12.7185–12.7225 12.7185–12.7245 C05 1 ...... 12.7225–12.7285 12.7225–12.7305 C06 1 ...... 12.7285–12.7345 12.7285–12.7365 C07 1 ...... 12.7345–12.7405 12.7345–12.7425 C08 1 ...... 12.7405–12.7465 12.7405–12.7485 C09 1 ...... 12.7465–12.7525 12.7465–12.7545 C10 1 ...... 2 12.7525–12–7545 N/A C11 1 ...... 12.7545–12.7605 12.7545–12.7605 C12 1 ...... 12.7605–12.7665 12.7605–12.7665 C13 1 ...... 12.7665–12.7725 12.7665–12.7725 C14 1 ...... 12.7725–12.7785 12.7725–12.7785 C15 1 ...... 12.7785–12.7845 12.7785–12.7845 C16 1 ...... 12.7845–12.7905 12.7845–12.7905 C17 1 ...... 12.7905–12.7965 12.7905–12.7965 C18 1 ...... 12.7965–12.8025 12.7965–12.8025 C19 1 ...... 12.8025–12.8085 12.8025–12.8085 C20 1 ...... 12.8085–12.8145 12.8085–12.8145 C21 1 ...... 12.8145–12.8205 12.8145–12.8205 C22 1 ...... 12.8205–12.8265 12.8205–12.8265 C23 1 ...... 12.8265–12.8325 12.8265–12.8325 C24 1 ...... 12.8325–12.8385 12.8325–12.8385 C25 1 ...... 12.8385–12.8445 12.8385–12.8445 C26 1 ...... 12.8445–12.8505 12.8445–12.8505 C27 1 ...... 12.8505–12.8565 12.8505–12.8565 C28 1 ...... 12.8565–12.8625 12.8565–12.8625 C29 1 ...... 12.8625–12.8685 12.8625–12.8685 C30 1 ...... 12.8685–12.8745 12.8685–12.8745 C31 1 ...... 12.8745–12.8805 12.8745–12.8805 C32 1 ...... 12.8805–12.8865 12.8805–12.8865 C33 1 ...... 12.8865–12.8925 12.8865–12.8925 C34 1 ...... 12.8925–12.8985 12.8925–12.8985 C35 1 ...... 12.8985–12.9045 12.8985–12.9045 C36 1 ...... 12.9045–12.9105 12.9045–12.9105 C37 1 ...... 12.9105–12.9165 12.9105–12.9165 C38 1 ...... 12.9165–12.9225 12.9165–12.9225 C39 1 ...... 12.9225–12.9285 12.9225–12.9285 C40 1 ...... 12.9285–12.9345 12.9285–12.9345 C41 1 ...... 12.9345–12.9405 12.9345–12.9405 C42 1 ...... 12.9405–12.9465 12.9405–12.9465 C43 1 ...... 12.9465–12.9525 12.9465–12.9525 1 See footnote 1 following GROUP A CHANNELS. 2 For transmission of pilot subcarriers or other authorized narrow band signals.
GROUP D CHANNELS
Alternate channel Designation Channel boundaries boundaries (GHz) [Da (GHz) [D channels] channels]
D01 1 ...... 12.7597–12.7657 12.7597–12.7657 D02 1 ...... 12.7657–12.7717 12.7657–12.7717 D03 1 ...... 12.7717–12.7777 12.7717–12.7777 D04 1 ...... 2 12.7777–12.7817 12.7777–12.7837 D05 1 ...... 12.7817–12.7877 12.7837–12.7897 D06 1 ...... 12.7877–12.7937 12.7897–12.7957 D07 1 ...... 12.7937–12.7997 12.7957–12.8017 D08 1 ...... 12.7997–12.8057 12.8017–12.8077 D09 1 ...... 12.8057–12.8117 12.8077–12.8137 D10 1 ...... 2 12.8117–12–12.8137 N/A D11 1 ...... 12.8137–12.8197 12.8137–12.8197 D12 1 ...... 12.8197–12.8257 12.8197–12.8257 D13 1 ...... 12.8257–12.8317 12.8257–12.8317 D14 1 ...... 12.8317–12.8377 12.8317–12.8377 D15 1 ...... 12.8377–12.8437 12.8377–12.8437 D16 1 ...... 12.8437–12.8497 12.8437–12.8497 D17 1 ...... 12.8497–12.8557 12.8497–12.8557 D18 1 ...... 12.8557–12.8617 12.8557–12.8617
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GROUP D CHANNELS—Continued
Alternate channel Designation Channel boundaries boundaries (GHz) [Da (GHz) [D channels] channels]
D19 1 ...... 12.8617–12.8677 12.8617–12.8677 D20 1 ...... 12.8677–12.8737 12.8677–12.8737 D21 1 ...... 12.8737–12.8797 12.8737–12.8797 D22 1 ...... 12.8797–12.8857 12.8797–12.8857 D23 1 ...... 12.8857–12.8917 12.8857–12.8917 D24 1 ...... 12.8917–12.8977 12.8917–12.8977 D25 1 ...... 12.8977–12.9037 12.8977–12.9037 D26 1 ...... 12.9037–12.9097 12.9037–12.9097 D27 1 ...... 12.9097–12.9157 12.9097–12.9157 D28 1 ...... 12.9157–12.9217 12.9157–12.9217 D29 1 ...... 12.9217–12.9277 12.9217–12.9277 D30 1 ...... 12.9277–12.9337 12.9277–12.9337 D31 1 ...... 12.9337–12.9397 12.9337–12.9397 D32 1 ...... 12.9397–12.9457 12.9397–12.9457 D33 1 ...... 12.9457–12.9517 12.9457–12.9517 D34 1 ...... 12.9517–12.9577 12.9517–12.9577 D35 1 ...... 12.9577–12.9637 12.9577–12.9637 D36 1 ...... 12.9637–12.9697 12.9637–12.9697 D37 1 ...... 12.9697–12.9757 12.9697–12.9757 D38 1 ...... 12.9757–12.9817 12.9757–12.9817 D39 1 ...... 12.9817–12.9877 12.9817–12.9877 D40 1 ...... 12.9877–12.9937 12.9877–12.9937 D41 1 ...... 12.9937–12.9997 12.9937–12.9997 D42 1 ...... 12.9997–13.0057 12.9997–13.0057 D43 1 ...... 13.0057–13.0117 13.0057–13.0117 1 See footnote 1 following GROUP A CHANNELS. 2 For transmission of pilot subcarriers or other authorized narrow band signals.
GROUP E CHANNELS
Channel bound- Alternate channel Designation aries (GHz) [E boundaries (GHz) channels] [Ea channels]
E01 1 ...... 12.9525–12.9585 12.9525–12.9585 E02 1 ...... 12.9585–12.9645 12.9585–12.9645 E03 1 ...... 12.9645–12.9705 12.9645–12.9705 E04 1 ...... 2 12.9705–12.9745 12.9705–12.9765 E05 1 ...... 12.9745–12.9805 12.9765–12.9825 E06 1 ...... 12.9805–12.9865 12.9825–12.9885 E07 1 ...... 12.9865–12.9925 12.9885–12.9945 E08 1 ...... 12.9925–12.9985 12.9945–13.0005 E09 1 ...... 12.9985–13.0045 13.0005–13.0065 E10 1 ...... 2 13.0045–13.0065 N/A E11 1 ...... 13.0065–13.0125 13.0065–13.0125 E12 1 ...... 13.0125–13.0185 13.0125–13.0185 E13 1 ...... 13.0185–13.0245 13.0185–13.0245 E14 1 ...... 13.0245–13.0305 13.0245–13.0305 E15 1 ...... 13.0305–13.0365 13.0305–13.0365 E16 1 ...... 13.0365–13.0425 13.0365–13.0425 E17 1 ...... 13.0425–13.0485 13.0425–13.0485 E18 1 ...... 13.0485–13.0545 13.0485–13.0545 E19 1 ...... 13.0545–13.0605 13.0545–13.0605 E20 1 ...... 13.0605–13.0665 13.0605–13.0665 E21 1 ...... 13.0665–13.0725 13.0665–13.0725 E22 1 ...... 13.0725–13.0785 13.0725–13.0785 E23 1 ...... 13.0785–13.0845 13.0785–13.0845 E24 1 ...... 13.0845–13.0905 13.0845–13.0905 E25 1 ...... 13.0905–13.0965 13.0905–13.0965 E26 1 ...... 13.0965–13.1025 13.0965–13.1025 E27 1 ...... 13.1025–13.1085 13.1025–13.1085 E28 1 ...... 13.1085–13.1145 13.1085–13.1145 E29 1 ...... 13.1145–13.1205 13.1145–13.1205 E30 1 ...... 13.1205–13.1265 13.1205–13.1265 E31 1 ...... 13.1265–13.1325 13.1265–13.1325 E32 1 ...... 13.1325–13.1385 13.1325–13.1385 E33 1 ...... 13.1385–13.1445 13.1385–13.1445 E34 1 ...... 3 13.1445–13.1505 3 13.1445–13.1505 E35 1 ...... 3 13.1505–13.1565 3 13.1505–13.1565 E36 1 ...... 3 13.1565–13.1625 3 13.1565–13.1625
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GROUP E CHANNELS—Continued
Channel bound- Alternate channel Designation aries (GHz) [E boundaries (GHz) channels] [Ea channels]
E37 1 ...... 3 13.1625–13.1685 3 13.1625–13.1685 E38 1 ...... 3 13.1685–13.1745 3 13.1685–13.1745 E39 1 ...... 3 13.1745–13.1805 3 13.1745–13.1805 E40 1 ...... 3 13.1805–13.1865 3 13.1805–13.1865 E41 1 ...... 3 13.1865–13.1925 3 13.1865–13.1925 E42 1 ...... 3 13.1925–13.1985 3 13.1925–13.1985 1 See footnote 1 following GROUP A CHANNELS. 2 For transmission of pilot subcarriers or other authorized narrow band signals. 3 See paragraph (l) of this section.
GROUP F CHANNELS
Channel bound- Alternate channel Designation aries (GHz) [F boundaries (GHz) channels] [Fa channels]
F01 1 ...... 13.0125–13.0185 13.0125–13.0185 F02 1 ...... 13.0185–13.0245 13.0185–13.0245 F03 1 ...... 13.0245–13.0305 13.0245–13.0305 F04 1 ...... 2 13.0305–13.0345 13.0305–13.0365 F05 1 ...... 13.0345–13.0405 13.0365–13.0425 F06 1 ...... 13.0405–13.0465 13.0425–13.0485 F07 1 ...... 13.0465–13.0525 13.0485–13.0545 F08 1 ...... 13.0525–13.0585 13.0545–13.0605 F09 1 ...... 13.0585–13.0645 13.0605–13.0665 F10 1 ...... 2 13.0645–13.0665 N/A F11 1 ...... 13.0665–13.0725 13.0665–13.0725 F12 1 ...... 13.0725–13.0785 13.0725–13.0785 F13 1 ...... 13.0785–13.0845 13.0785–13.0845 F14 1 ...... 13.0845–13.0905 13.0845–13.0905 F15 1 ...... 13.0905–13.0965 13.0905–13.0965 F16 1 ...... 13.0965–13.1025 13.0965–13.1025 F17 1 ...... 13.1025–13.1085 13.1025–13.1085 F18 1 ...... 13.1085–13.1145 13.1085–13.1145 F19 1 ...... 13.1145–13.1205 13.1145–13.1205 F20 1 ...... 13.1205–13.1265 13.1205–13.1265 F21 1 ...... 13.1265–13.1325 13.1265–13.1325 F22 1 ...... 13.1325–13.1385 13.1325–13.1385 F23 1 ...... 13.1385–13.1445 13.1385–13.1445 F24 1 ...... 3 13.1445–13.1505 3 13.1445–13.1505 F25 1 ...... 3 13.1505–13.1565 3 13.1505–13.1565 F26 1 ...... 3 13.1565–13.1625 3 13.1565–13.1625 F27 1 ...... 3 13.1625–13.1685 3 13.1625–13.1685 F28 1 ...... 3 13.1685–13.1745 3 13.1685–13.1745 F29 1 ...... 3 13.1745–13.1805 3 13.1745–13.1805 F30 1 ...... 3 13.1805–13.1865 3 13.1805–13.1865 F31 1 ...... 3 13.1865–13.1925 3 13.1865–13.1925 F32 1 ...... 3 13.1925–13.1985 3 13.1925–13.1985 1 See footnote 1 following GROUP A CHANNELS. 2 For transmission of pilot subcarriers or other authorized narrow band signals. 3 See paragraph (l) of this section.
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* * * * * exhausted all spectrum available to it in § 78.36 Frequency coordination. (m) CARS stations may be authorized the 12.70 to 13.20 GHz band. Coordination of fixed and mobile Applications for use of this band must use of the band from 13.20 to 13.25 GHz assignments will be in accordance with specify whether the channels are 6 on a secondary basis to Television the procedure established in MHz, 12.5 MHz, or 25 MHz wide and Broadcast Auxiliary Stations. Any CARS § 101.103(d) of this chapter. application seeking authorization for give the upper and lower boundaries use of the 13.20 to 13.25 GHz band must and the polarization for each channel. [FR Doc. 02–16093 Filed 6–26–02; 8:45 am] demonstrate that the applicant has 4. Revise § 78.36 to read as follows: BILLING CODE 6412–01–P
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Proposed Rules Federal Register Vol. 67, No. 124
Thursday, June 27, 2002
This section of the FEDERAL REGISTER suggesting that the period of program scholar. However, 22 CFR 62.20(d)(ii) contains notices to the public of the proposed duration for professors and research does provide exceptions to the issuance of rules and regulations. The scholars should be greater than three application of the twelve-month bar purpose of these notices is to give interested years. In recent consultation with the including one for prospective persons an opportunity to participate in the academic community, there has once participants who have previously rule making prior to the adoption of the final rules. again been great interest in extending participated in the Exchange Visitor the program duration for this category. Program as short-term scholars. Accordingly, the Department The Department invites comments DEPARTMENT OF STATE proposes to amend existing regulatory regarding this proposed rule. The provisions under the professor and Department will accept comments for 30 22 CFR Part 62 research scholar category at section 22 days following publication of this [Public Notice 4054] CFR 62.20(i) to permit a maximum proposed rule. A final rule will be duration of program participation of five adopted following Department review of Participation in the Exchange Visitor years. Calculation of the five years shall all comments received and coordination Program as Professor and Research begin from the initial program start date with the adoption of the Student and Scholar listed on the DS–2019 pursuant to Exchange Visitor Information System which professor or research scholar (SEVIS). AGENCY: Department of State. participant status is acquired and shall Regulatory Analysis and Notices ACTION: Proposed rule with request for end five years from that date. (Example: comment. July 1, 2002–July 1, 2007). It shall Administrative Procedure Act include time spent outside the United SUMMARY: The Department is proposing The Department is publishing this to amend its existing regulations States. With this change to the length of rule as a proposed rule, with a 30-day governing participation in the Exchange program duration, the Department is of provision for post-promulgation public Visitor Program as a professor and the opinion that extensions beyond the comments, based on the ‘‘good cause’’ research scholar. These proposed proposed five-year maximum period of exceptions set forth at 5 U.S.C. amendments will extend the duration of program duration will be inappropriate. 553(b)(3)(B) and 553(d)(3). The program participation from three years Therefore, the Department proposes the proposed changes will provide notice to five years and eliminate program deletion of section 22 CFR 62.20(j) and a comment period prior to adoption extensions beyond the five-year period. regarding extensions to the professor of this rule. Limitations governing the eligibility for and research category. If adopted, these Regulatory Flexibility Act program participation of professor and amendments would also permit program research scholar participants are also sponsors to extend a current The Department of State, in included. These limitations enhance the participant’s program up to the accordance with the Regulatory integrity and programmatic maximum program duration of five Flexibility Act (5 USC 605(b)), has effectiveness of the Exchange Visitor years. Extensions beyond the duration reviewed this regulation and, by Program. of participation are not permitted under approving it, certifies that this rule is this category. not expected to have a significant DATES: Written comments regarding this The Department also proposes to limit rule will be accepted until July 29, 2002. economic impact on a substantial repeated program participation. No number of small entities. ADDRESSES: Comments regarding this individual who has been afforded a five- rule must be presented in duplicate and year period of program participation as Unfunded Mandates Reform Act of 1995 addressed as follows: U.S. Department a professor or research scholar will be This rule will not result in the of State, Office of Exchange eligible for repeat participation in the expenditure by State, local and tribal Coordination and Designation, Bureau professor or research scholar category governments, in the aggregate, or by the of Educational and Cultural Affairs, 301 for a period of two years from the end private sector, of $100 million in any 4th Street, SW., Room 852, Washington, date of his/her prior program. This year and it will not significantly or DC 20547. provision is proposed to ensure that the uniquely affect small governments. FOR FURTHER INFORMATION CONTACT: reciprocal exchange objectives Therefore, no actions were deemed Stanley S. Colvin, Acting Director, underlying the Exchange Visitor necessary under the provisions of the Office of Exchange Coordination and Program are met, and that the exchange Unfunded Mandates Reform Act of Designation, U.S. Department of State, visitor’s visa is not misused for long- 1995. 301 Fourth Street, SW., Room 852, term employment purposes. Washington, DC 20547; telephone (202) The twelve-month bar will remain as Small Business Regulatory Enforcement 401–9810; fax (202) 401–9809. stated in section 22 CFR 62.20(d)(ii). Fairness Act of 1996 SUPPLEMENTARY INFORMATION: Since This regulation places a twelve-month This rule is not a major rule as 1949, a three-year period of program bar from continued program defined by section 804 of the Small duration has been afforded to professors participation upon individuals who Business Regulatory Enforcement Act of and research scholars participating in have been physically present in the 1996. This rule will not result in an Department-designated exchange visitor United States for all or part of the annual effect on the economy of $100 programs. During the development of twelve months immediately preceding million or more; a major increase in comprehensive rules published in 1993, their commencement of program costs or prices; or significant adverse numerous comments were received participation as a professor or research effects on competition, employment,
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investment, productivity, innovation, or participation for a professor or research ADDRESSES: The hearing will be held at on the ability of United States-based scholar shall be as follows: the Federal Communications companies to compete with foreign- (1) General limitation. The professor Commission, 445 12th Street, SW., based companies in domestic and and research scholar shall be authorized Washington, DC in the Commission export markets. to participate in the Exchange Visitor Meeting Room (Room TW–C305). Program for the length of time necessary Executive Order 12866 FOR FURTHER INFORMATION CONTACT: to complete his or her program, which Jamila Bess Johnson, Media Bureau. The Department of State does not time shall not exceed five years. The (202) 418–7200. consider this rule to be a ‘‘significant five-year period of permitted program SUPPLEMENTARY INFORMATION: regulatory action’’ under Executive participation shall begin with the initial 1. By a document dated and released Order 12866, section 3(f), Regulatory program start date listed on the DS– June 20, 2002, the Federal Planning and Review. In addition, the 2019 pursuant to which professor or Communications Commission Department is exempt from Executive research scholar participant status is announced that it will hold an en banc Order 12866 except to the extent that it acquired and shall end five years from hearing open to the public. The purpose is promulgating regulations in such date. It shall include time spent of the en banc is to assist the conjunction with a domestic agency that outside the United States. Commission in its examination of the are significant regulatory actions. The (2) Repeat Participation. Individuals EEO rules applicable to broadcast and Department has nevertheless reviewed who have entered the United States cable entities. the regulation to ensure its consistency under the Exchange Visitor Program as 2. The en banc hearing was with the regulatory philosophy and a professor or research scholar, or who previously announced in Public Notice principles set forth in that Executive have acquired such status while in the DA 02–1025 (May 3, 2002), but that Order. United States shall not be eligible for public notice inadvertently was not Executive Order 13132 repeat participation as a professor or published in the Federal Register. research scholar for a period of two Accordingly, the Commission re- This regulation will not have years. released the public notice pursuant to substantial direct effects on the States, (3) Change of category. A change § 0.605(e) of its rules, 47 CFR 0.605(e). on the relationship between the national between the categories of professor and The Commission determined that to the government and the States, or on the research scholar shall not extend an extent the previous public notice was distribution of power and exchange visitor’s permitted period of insufficient for purposes of § 0.605, the responsibilities among the various participation beyond five years. prompt and orderly conduct of the levels of government. Therefore, in (4) Extensions beyond the duration of Commission’s business required that accordance with section 6 of Executive participation are not permitted under this notice be issued less than one week Order 13132, it is determined that this this category. prior to the en banc hearing and that rule does not have sufficient federalism Dated: June 4, 2002. earlier notice was not practicable, since implications to require consultations or Patricia S. Harrison, the failure to publish the earlier public warrant the preparation of a federalism notice was just discovered. summary impact statement. Assistant Secretary, Bureau of Educational and Cultural Affairs, Department of State. Federal Communications Commission. Paperwork Reduction Act [FR Doc. 02–16157 Filed 6–26–02; 8:45 am] W. Kenneth Ferree, This rule does not impose any new BILLING CODE 4710–05–P Chief, Media Bureau. reporting or record-keeping [FR Doc. 02–16190 Filed 6–26–02; 8:45 am] requirements subject to the Paperwork BILLING CODE 6712–01–P Reduction Act, 44 U.S.C. Chapter 35. FEDERAL COMMUNICATIONS List of Subjects in 22 CFR Part 62 COMMISSION DEPARTMENT OF COMMERCE Cultural exchange programs. 47 CFR Parts 73 and 76 Accordingly, 22 CFR part 62 is National Oceanic and Atmospheric proposed to be amended as follows: [MM Docket No. 98–204; DA 02–1025] Administration PART 62—EXCHANGE VISITOR En Banc Hearing on Broadcast and 50 CFR Part 600 PROGRAM Cable EEO Rules and Policies [I.D. 061102B] 1. The authority citation for part 62 AGENCY: Federal Communications continues to read as follows: Commission. Magnuson-Stevens Act Provisions; ACTION: Proposed rule; clarification. General Provisions for Domestic Authority: 8 U.S.C. 1101(a)(15)(J), 1182, Fisheries; Application for Exempted 1184, 1258; 22 U.S.C. 1431–1442, 2451–2460; Fishing Permits (EFPs) Foreign Affairs Reform and Restructuring Act SUMMARY: On June 20, 2002, the Commission released a document of 1998, Pub. L. 105–277, 112 Stat. 2681 et AGENCY: National Marine Fisheries seq.; Reorganization Plan No. 2 of 1977, 3 announcing the June 24, 2002, en banc Service (NMFS), National Oceanic and CFR, 1977 Comp. p.200; E.O.12048 of March hearing to discuss issues and views on Atmospheric Administration (NOAA), 27, 1978; 3 CFR, 1978 Comp. p. 168. the Commission’s proceeding to Commerce. promulgate new broadcast and cable 2. Amend § 62.20 by revising ACTION: equal employment opportunity (EEO) Notification of a proposal for paragraph (i) and removing paragraph (j) EFPs to conduct experimental fishing; to read as follows: rules. The intended effect of this action is to clarify the public notification of the request for comments. § 62.20 Professors and research scholars. Commission’s en banc hearing. SUMMARY: The Administrator, Northeast * * * * * DATES: The en banc hearing will Region, NMFS (Regional Administrator) (i) Duration of participation. The convene from 10 a.m. to 1 p.m. on June has made a preliminary determination permitted duration of program 24, 2002. that the subject EFP application
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contains all the required information not be landed, and would be returned to Authority: 16 U.S.C. 1801 et seq. and warrants further consideration. The the water as soon as practicable. Dated: June 21, 2002. Regional Administrator has also made a The project will compare differences Virginia M. Fay, preliminary determination that the in the escapement of undersized black Acting Director, Office of Sustainable activities authorized under the EFP sea bass (less than 11 inches (27.94 cm)) Fisheries, National Marine Fisheries Service. would be consistent with the goals and between currently mandated single, 2– [FR Doc. 02–16281 Filed 6–26–02; 8:45 am] objectives of the Summer Flounder, inch (5.08-–cm) square escape vents and BILLING CODE 3510–22–S Scup and Black Sea Bass Fishery an experimental design in which the Management Plan (FMP). However, entire parlor section of the trap is further review and consultation may be constructed of 2–inch (5.08–cm) square DEPARTMENT OF COMMERCE necessary before a final determination is mesh. The objective of the research is to made to issue an EFP. Therefore, NMFS investigate the effectiveness of the National Oceanic and Atmospheric announces that the Regional experimental trap design at reducing the Administration Administrator proposes to issue an EFP retention and discard of sublegal black that would allow one vessel to conduct sea bass, without affecting the retention 50 CFR Part 635 fishing operations otherwise restricted rate of legal-sized black sea bass. by the regulations governing the [Docket No. 020612146–2146–01; I.D. Traps with a single, 2–inch (5.08–cm) 042602F] fisheries of the Northeastern United square escape vent would serve as States. The EFP would allow for an controls. The experiment would use a RIN 0648–AP90 exemption to the black sea bass, randomized survey whereby three traps Atlantic Highly Migratory Species; Centropristis striata, closure (one control and two experimental) are Atlantic Bluefin Tuna Quota requirements of the FMP. The connected by rope at regular intervals Specifications and General Category experiment, coordinated by the Virginia and deployed. One rope, or ‘‘string,’’ of Effort Controls Institute of Marine Sciences (VIMS), traps would be deployed at 10 different proposes to conduct fishing activities to fishing sites per trip. These sites will be AGENCY: National Marine Fisheries compare black sea bass retention and in close enough proximity to allow the Service (NMFS), National Oceanic and discard rates using two different black traps to be hauled twice per day. Sixty Atmospheric Administration (NOAA), sea bass pot escape vent configurations. traps per day are proposed to be hauled Commerce. Regulations under the Magnuson- (3/traps/string, 1 string/site, and 10 sites ACTION: Proposed initial 2002 quota Stevens Fishery Conservation and hauled twice daily). Approximately 15 specifications and General category Management Act require publication of day-long research fishing trips are effort controls; public hearings; request this notification to provide interested proposed for the project during the for comments. parties the opportunity to comment on autumn months of 2002. The fishing applications for proposed EFPs. activity will occur primarily between SUMMARY: NMFS proposes initial DATES: Comments on this document Wachapreague, VA, and Ocean City, specifications for the Atlantic bluefin must be received on or before 5 p.m. MD. tuna (BFT) fishery to set BFT quota and EST July 12, 2002. To facilitate the collection of data General category effort controls for the fishing year beginning June 1, 2002. The ADDRESSES: Written comments should during periods with the greatest proposed initial quota specifications be sent to Patricia A. Kurkul, Regional potential for fishing success, the EFP and effort controls are necessary to Administrator, NMFS, Northeast would exempt one commercial vessel implement the 1998 recommendation of Regional Office, 1 Blackburn Drive, from the closure regulations specified at the International Commission for the Gloucester, MA 01930. Mark the outside 50 CFR part 648, subpart I, and allow Conservation of Atlantic Tunas (ICCAT) of the envelope ‘‘Comments on BSB the vessel to fish for and possess black establishing a rebuilding program for Escape Vent EFP Proposal.’’ Comments sea bass during periods when the Western Atlantic BFT, which is required may also be sent via facsimile (fax) to commercial fishery is closed due to by the Atlantic Tunas Convention Act (978) 281–9135. attainment of the quarterly quota. VIMS researchers will be onboard the (ATCA), and to achieve domestic FOR FURTHER INFORMATION CONTACT: participating vessel during all research management objectives under the Richard A. Pearson, Fishery Policy trips. Any black sea bass harvested Magnuson-Stevens Fishery Analyst, 978–281–9279. during a closure period would not be Conservation and Management Act SUPPLEMENTARY INFORMATION: An allowed to be landed, and would be (Magnuson-Stevens Act). NMFS will application for an EFP was submitted to returned to the water as soon as hold public hearings to receive NMFS by VIMS on April 23, 2002. The practicable after measurement of the comments from fishery participants and EFP is being requested to facilitate a fish. The commercial vessel that would other members of the public regarding research project that would compare participate in the research project has the proposed initial quota specifications black sea bass retention and discard two live tanks onboard, which should and effort controls. rates using two different escape vent reduce any discard mortality to black DATES: Written comments must be configurations in black sea bass pots. sea bass that could occur during a received on or before July 24, 2002. Approximately 15 fishing trips would closure. Therefore, the catch levels The public hearings dates are: be conducted off the coasts of Maryland during closed seasons are not expected 1. July 8, 2002, 7 p.m.—9 p.m., and Virginia during the autumn of 2002. to have a detrimental impact on the Gloucester, MA. To provide the greatest potential for black sea bass resource. Any landings 2. July 9, 2002, 2 p.m.—4 p.m., Silver fishing success, it would be necessary to that would occur during an open season Spring, MD. allow the vessel to fish for, and possess, would be reported in the Vessel Trip 3. July 10, 2002, 7 p.m.—9 p.m., black sea bass during closures that may Report, as required, because the Atlantic Beach, NC. be implemented due to the attainment participating vessel possesses a ADDRESSES: Written comments on the of the commercial quota. Black sea bass commercial black sea bass moratorium proposed initial quota specifications harvested during closure periods would permit. and General category effort controls
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should be sent to Christopher Rogers, NMFS will issue final initial Given estimated catch rates and Chief, Highly Migratory Species specifications and publish them in the available quota, the Angling Longline, Management Division, Office of Federal Register. The final initial quota Trap, and Harpoon category fisheries Sustainable Fisheries (F/SF1), NMFS, specifications may subsequently be will remain open through May 31, 2002. 1315 East-West Highway, Silver Spring, adjusted during the course of the fishing As NMFS anticipates publication of MD 20910–3282. Comments also may be year, consistent with the provisions of final BFT quota specifications for the sent via facsimile (fax) to (301) 713– the HMS FMP. Notice of any such 2002 fishing year prior to the 1917. Comments will not be accepted if adjustments will be published in the availability of final 2001 landings submitted via e-mail or the Internet. Federal Register. figures for these three categories, best The public hearing locations are: estimates will be used to determine Domestic Quota Allocation 1. Fuller Elementary School, 4 School carryover amounts, if any. To date, House Road, Gloucester, MA 01930. The HMS FMP and the implementing Harpoon category landings are less than 2. Silver Spring NOAA Science regulations established baseline the adjusted Harpoon category quota by Center, 1301 East-West Highway, Silver percentage quota shares of the ICCAT- 22.0 mt and the Angling category has Spring, MD 20910. recommended U.S. BFT quota for each the following underharvests for the 2001 3. Atlantic Beach Sheraton Atlantic of the domestic fishing categories. These fishing year: School BFT—84.6 mt; large Beach Oceanfront Hotel, 2717 W. Fort percentage shares were based on school/small medium BFT—70.3 mt; Macon Road, Atlantic Beach, NC 28512. allocation procedures that had been and large medium/giant BFT—1.0 mt. In FOR FURTHER INFORMATION CONTACT: Brad developed by NMFS over several years. addition, 20.1 mt remains in the school McHale (978) 281–9260. The baseline percentage quota shares reserve. To date, 56.6 mt remain in the Longline category. The final initial 2002 SUPPLEMENTARY INFORMATION: Atlantic established in the HMS FMP for fishing BFT quota specifications will be issued tunas are managed under the dual years beginning June 1, 1999 are as based on updated 2001 landings. authority of the Magnuson-Stevens Act follows: General category— 47.1 percent; Harpoon category—3.9 percent; Should adjustments to the final initial and ATCA. ATCA authorizes the 2002 BFT quota specifications be Secretary of Commerce (Secretary) to Purse Seine category—18.6 percent; Angling category—19.7 percent; required based on the final 2001 BFT implement binding recommendations of landings figures, NMFS will publish a ICCAT. The authority to issue Longline category—8.1 percent; Trap category—0.1 percent; and Reserve Federal Register notice adjusting the regulations under the Magnuson- final initial 2002 fishing year quota Stevens Act and ATCA has been —2.5 percent. The current ICCAT BFT quota specifications. delegated from the Secretary to the In accordance with the regulations recommendation allows, and U.S. Assistant Administrator for Fisheries, regarding annual adjustments at regulations require, the addition or NOAA (AA). § 635.27(a)(9)(ii), NMFS proposes subtraction, as appropriate, of any specifications for the 2002 fishing year Background underharvest or overharvest in a fishing that include carryover adjustments. The year to the following fishing year, On May 28, 1999, NMFS published in proposed quotas are: General category— provided that such carryover does not the Federal Register (64 FR 29090) final 647.2 mt; Harpoon category—76.1 mt; result in overharvest of the total annual regulations, effective July 1, 1999, Purse Seine category—317.7 mt; implementing the Fishery Management quota and is consistent with all Angling category—429.1 mt; Longline Plan for Atlantic Tunas, Swordfish, and applicable ICCAT recommendations, category—148.9 mt; and Trap category— Sharks (HMS FMP) that was adopted including restrictions on landings of 2.3 mt. Additionally, 75.3 mt would be and made available to the public in school BFT. Therefore, NMFS proposes reserved for inseason allocations or to April 1999. The proposed initial to adjust the 2002 fishing year quota cover scientific research collection and specifications are necessary to specifications for the BFT fishery to potential overharvest in any category implement the 1998 ICCAT account for underharvest and except the Purse Seine category. recommendation, establishing a overharvest in the 2001 fishing year. Regulations at 50 CFR 635.27(a)(9)(i) rebuilding program for Western Atlantic The General and Purse Seine category require Purse Seine category under or BFT, which is required by ATCA, and fisheries for BFT have been closed for overharvests be subtracted from or to achieve domestic management the remainder of the 2001 fishing year added to each individual vessel’s quota objectives under the Magnuson-Stevens (June 1, 2001 - May 31, 2002). The allocation, as appropriate. These Act. The proposed initial quota landings figures are still preliminary, proposed quotas include provisions for specifications would allocate the total however, and may be updated before the each category to carry forward any ICCAT-recommended quota among the 2002 specifications are finalized. For the underharvest from 2001 to the 2002 several established fishing categories, 2001 fishing year, NMFS has fishing year. The exception to this is would carryover any unharvested 2001 preliminarily determined that General that the unused school reserve fishing year quota, and would be category landings were higher than the (approximately 20.1 mt) from 2001, consistent with the BFT rebuilding adjusted General category quota by 13.0 along with an additional 20.0 mt of program as set forth in the HMS FMP. mt and Purse Seine category landings unused Longline South subcategory NMFS proposes the 2002 fishing year were fewer than the adjusted Purse quota would be placed into the Reserve. (June 1, 2002—May 31, 2003) BFT Seine category quota by 59.7 mt. Based This additional reserve quota would be initial quota specifications under the on the estimated amount of Reserve that allocated among the domestic fishing annual and inseason adjustment NMFS is maintaining for the landing of categories, as appropriate during the procedures of the HMS FMP. Also, in BFT taken during ongoing scientific 2002 fishing year, in accordance with accordance with the HMS FMP, NMFS research projects, NMFS estimates that the inseason transfer criteria in the HMS proposes the General category effort 6.9 mt of Reserve remains unharvested regulations. control schedule, including time-period from the 2001 fishing year. This As part of the BFT rebuilding subquotas and restricted fishing days remaining Reserve quota will be used to program, ICCAT recommended an (RFDs), for the upcoming fishing season. partially cover the General category allowance for dead discards. The U.S. After consideration of public comment, overharvest in 2001. dead discard allowance is 68 mt. The
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2000 preliminary estimate of U.S. dead opportunities, to assist with distribution respect the ground rules, and, if they do discards, as reported in pelagic longline and achievement of optimum yield, to not, they will be asked to leave the vessel logbooks, totaled 67.0 mt (U.S. allow for a late season fishery, and to hearing. National Report to ICCAT 2001). As improve market conditions and The public hearing sites are estimates of BFT dead discards for the scientific monitoring. physically accessible to people with 2001 fishing year will not be available The HMS FMP divides the annual disabilities. Requests for sign language General category quota into three time- for some time, the estimate for the 2000 interpretation or other auxiliary aids period subquotas as follows: 60 percent calendar year was used to calculate the should be directed to Brad McHale (see for June-August, 30 percent for amount to be added to, or subtracted FOR FURTHER INFORMATION CONTACT) at September, and 10 percent for October- from, the U.S. BFT landings quota for least 7 days prior to the hearing. 2002 as a result of dead discards. December. These percentages would be Estimates of dead discards from other applied to the adjusted 2002 coastwide Classification gear types and fishing sectors that do quota for the General category of 637.2 not use the pelagic longline vessel mt, with the remaining 10.0 mt being These proposed specifications and logbook are unavailable at this time and reserved for the New York Bight fishery. effort controls are published under the thus are not included in this Therefore, coastwide, 382.3 mt would authority of the Magnuson-Stevens Act, calculation. As U.S. fishing activity is be available in the period beginning 16 U.S.C. 1801 et seq., and the Atlantic estimated to have resulted in less dead June 1 and ending August 31; 191.2 mt Tunas Convention Act, 16 U.S.C. 971 et discards than its allowance, the ICCAT would be available in the period seq. Preliminarily, the AA has recommendation and U.S. regulations beginning September 1 and ending determined that the proposed state that the U.S. may add one half of September 30; and 63.7 mt would be specifications and the effort controls are the difference between the amount of available in the period beginning consistent with the HMS FMP, the dead discards and the allowance (i.e., October 1 and ending December 31, Magnuson-Stevens Act, and the 1998 68.0 mt - 67.0 mt = 1.0 mt, 1.0 mt/2 = 2001. ICCAT BFT catch recommendation. 0.5 mt) to its total allowed landings for In addition to time period subquotas, The Chief Counsel for Regulation of the following year, or to individual NMFS also has implemented General the Department of Commerce has fishing categories or to the Reserve. category RFDs to extend the fishing certified to the Chief Counsel for NMFS proposes to allocate the 0.5 mt to season throughout the summer and fall. Advocacy of the Small Business the Reserve quota, which could than be The RFDs are consistent with the Administration that the proposed allocated to individual fishing objectives of the HMS FMP and are specifications and effort controls would categories as necessary during the designed to address the same issues not have a significant economic impact fishing year. addressed by time-period subquotas. For on a substantial number of small entities Based on the proposed initial the 2002 fishing year, NMFS proposes a as follows: specifications, the Angling category schedule of RFDs that is similar to that The current level of participation in the quota of 429.1 mt would be divided as implemented in 2001, adjusted as Atlantic BFT fisheries has remained follows: School BFT—175.1 mt, with necessary to coordinate with Japanese relatively consistent over the last couple of 98.1 mt to the northern area (north of market holidays. years since the HMS FMP was finalized. For 39° 18′ N. latitude), 77.0 mt to the As proposed, persons aboard vessels instance, in 2001 there were 22,289 vessels southern area (south of 39° 18′ N. permitted in the General category would that possessed either an Atlantic tunas latitude), plus 20.5 mt held in reserve; be prohibited from fishing, including permit or a HMS CHB permit. In 2000 and in 1999 there were 24,845 and 23,005 vessel large school/small medium BFT— 226.2 tag-and-release, for BFT of all sizes on the following days: August 10, 11, and permits respectively. The number of Atlantic mt, with 120.5 mt to the northern area tunas permit holders in each quota category and 105.7 mt to the southern area; and 12; September 1, 2, 4, 8, 9, 11, 15, 16, 18, 22, 23, 25, 29, and 30; October 2, 6, has also remained relatively consistent since large medium/giant BFT—7.3 mt, with the HMS FMP was finalized. For example, in 3.1 mt to the northern area and 4.2 mt 7, and 9. These proposed RFDs would 2000 there were 9,468 vessels that possessed to the southern area. These subquotas improve distribution of fishing either a General category Atlantic tunas reflect the adjusted north-south dividing opportunities without increasing BFT permit or a HMS Charter/Headboat permit, in line (39° 18′ N. latitude) and percentage mortality. 2001 there were 9,332 vessels permitted in quota allocations in the northern and either the General category Atlantic tunas Public Hearings and Special permit or the HMS Charter/Headboat permit southern areas for the Angling category, Accommodations as implemented by NMFS through a category. The similarity in number of vessels The public is reminded that NMFS participating in a particular quota category final rule on August 15, 2001 (66 FR from year to year holds true for the remaining 42801). expects participants at the public hearings to conduct themselves category types (Angling, Longline, Harpoon, The Longline category quota of 148.9 Purse Seine, and Trap) as well. In addition, mt would be subdivided as follows: 30.9 appropriately. At the beginning of each public hearing, a NMFS representative according to the 2002 SAFE report, the value mt to longline vessels landing BFT of the BFT fishery has increased from north of 34° N. latitude and 118.0 mt to will explain the ground rules (e.g., $17,488,624 in 1996 to $18,810,704 in 2000. longline vessels landing BFT south of alcohol is prohibited from the hearing Due to the fact that the value of the BFT 34° N. latitude. room; attendees will be called to give fishery is increasing, the overall U.S. Atlantic their comments in the order in which baseline BFT quota has not changed, the General Category Effort Controls they registered to speak; each attendee domestic breakdown of the U.S. Atlantic For the last several years, NMFS has will have an equal amount of time to baseline BFT quota has not changed, and the implemented General category time- speak; and attendees should not level of participation in the U.S. Atlantic BFT period subquotas to increase the interrupt one another). The NMFS fishery has remained relatively consistent likelihood that fishing would continue representative will attempt to structure since the original economic analyses were conducted in the HMS FMP, as reflected throughout the late summer and early the hearing so that all attending more recently in the 2002 SAFE report, fall fishing seasons. The subquotas are members of the public will be able to NMFS has determined the Proposed Initial consistent with the objectives of the comment, if they so choose, regardless 2002 Quota Specifications and General HMS FMP and are designed to address of the controversial nature of the Category Effort Controls, if implemented, concerns regarding allocation of fishing subject(s). Attendees are expected to would not have a significant economic
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impact on a substantial number of small operation of the Atlantic pelagic The area in which this proposed entities. longline fishery is likely to jeopardize action is planned has been identified as As mentioned above, NMFS has certified to the continued existence of endangered EFH for species managed by the New the Small Business Administration that the England Fishery Management Council, proposed rule is not significant. As a result and threatened sea turtle species under of this certification, an Initial Regulatory NMFS jurisdiction. NMFS is currently the Mid-Atlantic Fishery Management Flexibility Analysis was not prepared for this implementing the reasonable and Council, the South Atlantic Fishery action. prudent alternative required by the Management Council, the Gulf of Because of this certification, an Initial BiOp. These proposed quota Mexico Fishery Management Council, Regulatory Flexibility Analysis was not specifications and effort controls would the Caribbean Fishery Management prepared. not have any additional impact on sea Council, and the Highly Migratory Species Division of the Office of These proposed quota specifications turtles as these actions would not likely Sustainable Fisheries at NMFS. It is not and General category effort controls increase or decrease pelagic longline anticipated that this action will have have been determined to be not effort, nor are they expected to shift any adverse impacts to EFH and, significant for purposes of Executive effort into other fishing areas. No therefore, no consultation is required. Order 12866. irreversible or irretrievable On September 7, 2000, NMFS commitments of resources are expected Dated: June 24, 2002. reinitiated formal consultation for all from this proposed action that would William T. Hogarth, HMS commercial fisheries under have the effect of foreclosing the Assistant Administrator for Fisheries, section 7 of the Endangered Species Act. implementation of the requirements of National Marine Fisheries Service. A Biological Opinion (BiOp) issued June the BiOp. [FR Doc. 02–16264 Filed 6–24–02; 3:07 pm] 14, 2001, concluded that continued BILLING CODE 3510–22–S
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Notices Federal Register Vol. 67, No. 124
Thursday, June 27, 2002
This section of the FEDERAL REGISTER displays a currently valid OMB control Animal and Plant Health Inspection contains documents other than rules or number. Service proposed rules that are applicable to the public. Notices of hearings and investigations, Farm Service Agency Title: Application for Inspection and committee meetings, agency decisions and Certification of Animal Byproducts. rulings, delegations of authority, filing of Title: Storage of Honey Forfeited to OMB Control Number: 0579–0008. petitions and applications and agency CCC by Honey Producers. Summary of Collection: The Animal statements of organization and functions are OMB Control Number: 0560–0216. and Plant Health Inspection Service examples of documents appearing in this (APHIS) on behalf of the Secretary of section. Summary of Collection: Public Law Agriculture has been delegated the 80–806, the Commodity Credit authority (7 U.S.C. 1622, 1624) to Corporation (CCC) Charter Act, establish and implement a system for DEPARTMENT OF AGRICULTURE authorizes CCC to enter into storage verifying that the importation and contracts with commercial warehouse commercial distribution of certain Submission for OMB Review; operators. The Act permits CCC to enter animal byproducts have been processed Comment Request into various types of contracts as are according to the condition and June 21, 2002. necessary in the conduct of its business requirements of the importing country. and directs CCC to utilize the usual and The Department of Agriculture has The laws and regulations that govern customary channels, facilities and the importation and commercial submitted the following information arrangements of trade and commerce in collection requirement(s) to OMB for distribution of certain animal its functions of purchasing, byproducts in some foreign countries review and clearance under the warehousing, transporting, processing, Paperwork Reduction Act of 1995, may require the U.S. exporter to furnish or handling of agricultural commodities. certificates that have been issued or Public law 104–13. Comments regarding The CCC must maintain a List of (a) whether the collection of information endorsed by APHIS’ Veterinary Service. Approved Warehouses to store CCC These certificates attest to the class and is necessary for the proper performance owned or loan honey. The use of of the functions of the agency, including quality of these products, and also attest warehouses on this list reduces the risk to the procedures used to process these whether the information will have of loss faced by CCC by using only those practical utility; (b) the accuracy of the products for exportation to the receiving facilities that meet the financial, country. APHIS will collect information agency’s estimate of burden including physical, and managerial requirements the validity of the methodology and using VS Form 16–24, ‘‘Application for of CCC and have met the Standards of Inspection and Certification of Animal assumptions used; (c) ways to enhance Approval of Dry and Cold Storage the quality, utility and clarity of the Byproducts.’’ Warehouses Processed Agricultural Need and Use of the Information: information to be collected; (d) ways to Commodities, Extracted Honey, and APHIS collects information from minimize the burden of the collection of Bulk Oils. The purpose of requiring applicants requesting that APHIS information on those who are to warehouses to meet the Standards for monitor the processing of the product. respond, including through the use of Approval is to assure that CCC-owned After monitoring the processing appropriate automated, electronic, or loan honey is stored and handled by technique, APHIS certifies that the mechanical, or other technological qualified warehouse operators with the product was processed according to the collection techniques or other forms of necessary financial resources and conditions and requirements of the information technology should be managerial skills. The Farm Service importing country. A copy of the form addressed to: Desk Officer for Agency (FSA) will collect information then accompanies the shipment. Agriculture, Office of Information and using several forms. Without this certification, the importing Regulatory Affairs, Office of country would not accept the product, Management and Budget (OMB), Need and Use of the Information: FSA and the applicant would be unable to Washington, DC 20503 and to will collect information that will allow conduct business with that country. Departmental Clearance Office, USDA, CCC to contract for warehouse storage Description of Respondents: Business OCIO, Mail Stop 7602, Washington, DC and related services and to monitor and or other for-profit. 20250–7602. Comments regarding these enforce all honey provisions of 7 CFR Part 1423. The information is also Number of Respondents: 20. information collections are best assured Frequency of Responses: Reporting: required to establish and maintain the of having their full effect if received On occasion. Approved List, follow accepted within 30 days of this notification. Total Burden Hours: 10. Copies of the submission(s) may be warehousing practices, and represent obtained by calling (202) 720–6746. the minimum burden to carry out Animal and Plant Health Inspection An agency may not conduct or various mandatory price support Service sponsor a collection of information programs. Title: User Fee Regulation, 7 CFR part unless the collection of information Description of Respondents: Business 354 and 9 CFR part 130. displays a currently valid OMB control or other for-profit. OMB Control Number: 0579–0094. number and the agency informs Number of Respondents: 75. Summary of Collection: The Food, potential persons who are to respond to Agriculture, Conservation and Trade the collection of information that such Frequency of Responses: Act of 1990, authorizes the Secretary of persons are not required to respond to Recordkeeping; Reporting: On occasion. Agriculture and the Animal and Plant the collection of information unless it Total Burden Hours: 2,539. Health Inspection Service (APHIS) to
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prescribe and collect fees to cover the to enforce the Animal Welfare Act and at their plant(s) and the actual slaughter cost of providing certain Agricultural the provisions of 9 CFR, Chapter 1, of the previous day. The report is used Quarantine and Inspection (AQI) Subchapter A, which implements the to make market outlook projections and services. The Act gives the Secretary the Animal Welfare Act. APHIS will collect maintain statistical data. The authority to charge for the inspection of information through the use of reports information must be collected and international passengers, commercial and records that are kept for a period of disseminated by an impartial third vessels, trucks, aircraft, and railroad at least one year to ensure that the party. Since the government is a large cars, and to recover the costs of animals are cared for in the prescribed purchaser of meat, a system to monitor providing the inspection of plants and manner that is required by regulations. the collection and reporting of data is plant products offered for export. The Need and Use of the Information: needed. Collecting this information less Secretary is authorized to use the APHIS will collect information on the frequently would hinder the timely use revenue to provide reimbursements to review and evaluation of program of this data. any appropriation accounts that incur compliance by regulated facilities, and Description of Respondents: Business costs associated with the AQI services provide a workable enforcement system or other for-profit; Individuals or provided. APHIS will collect to carry out the requirements of the households; Farms; Federal information using several APHIS forms. AWA, and the intent of Congress, on a Government; State, Local or Tribal Need and Use of the Information: practical daily basis without resorting to Government. APHIS collects information, which more detailed and stringent regulations Number of Respondents: 72. includes the taxpayer identification and standards which could be more Frequency of Responses: Reporting; number, name, and address and burdensome to regulated facilities. Weekly; Other: Daily. telephone number to collect fees. The Description of Respondents: Business Total Burden Hours: 624. procedures and the information or other for-profit; Not-for-profit requested for the passengers and institutions. Sondra A. Blakey, aircrafts are used to ensure that the Number of Respondents: 3,190. Departmental Information Clearance Officer. correct users fees are collected and Frequency of Responses: [FR Doc. 02–16171 Filed 6–26–02; 8:45 am] remitted in full in a timely manner. Recordkeeping; Reporting: On occasion; BILLING CODE 3410–01–M Without the information from the Semi-annually. respondents, APHIS would not be able Total Burden Hours: 15,607. DEPARTMENT OF AGRICULTURE to ensure substantial compliance with Agricultural Marketing Service the statute. Noncompliance with the Title: Plan for Estimating Daily Food Safety and Inspection Service statute could result in misappropriation Livestock Slaughter Under Federal of public funds and lost revenue to the Inspection. [Docket No. 01–039N2] Federal Government. OMB Control Number: 0581–0050. Description of Respondents: Business Summary of Collection: The Notice of Request for New Information or other for-profit; Not-for-profit Agriculture Marketing Act of 1946 (7 Collection Regarding Consumer institutions; Individuals or households; U.S.C. 1621) Section 203(g), directs and Practices, Concerns, and Awareness Federal Government; State, Local or authorizes the collection and Specific to Meat, Poultry, and Egg Tribal Government. dissemination of marketing information Products Number of Respondents: 88,453. Frequency of Response: including adequate outlook information, AGENCY: Food Safety and Inspection Recordkeeping; Reporting: On occasion. on a market area basis, for the purpose Service, USDA. Total Burden Hours: 7,640. of anticipating and meeting consumer requirements aiding in the maintenance ACTION: Notice and request for Animal and Plant Health Inspection of farm income and to bring about a comments. Service balance between production and SUMMARY: In accordance with the Title: Animal Welfare, 9 CFR part 3, utilization. Livestock and Grain News Paperwork Reduction Act of 1995 and Marine Mammals. provides a timely exchange of accurate the Office of Management and Budget OMB Control Number: 0579–0115. and unbiased information on a current (OMB) regulations, this notice Summary of Collection: The marketing conditions (supply, demand, announces the Food Safety and Laboratory Animal Welfare Act (AWA). prices, trends, movement, and other Inspection Service’s (FSIS) intention to (Public Law 89–544) enacted August 24, information) affecting trade in livestock, request information collection regarding 1966, and amended December 24, 1970 meats, grain, and wool. Administered by consumer food safety practices, (Public Law 91–579); April 22, 1976 the U.S. Department of Agriculture’s concerns, and awareness, specific to (Public Law 94–279); and December 23, Agricultural Marketing Service (AMS), meat, poultry, and egg products. Also, 1985 (Public Law 99–198) requires the this nationwide market news program is in this same issue of the Federal U.S. Department of Agriculture (USDA) conducted in cooperation with Register, FSIS is publishing a notice of to regulate the humane care and approximately 30 State departments of request for new information collection handling of most warm-blooded agriculture. The up-to-the minute regarding industry practices specific to animals, including marine mammals, reports collected and disseminated by meat, poultry, and egg products. used for research or exhibition professional market reporters are DATES: Comments on this notice must be purposes, sold as pets, or transported in intended to provide both buyers and received on or before August 26, 2002. commerce. This legislation and its sellers with the information necessary amendments were the result of for making intelligent, informed ADDITIONAL INFORMATION OR COMMENTS: extensive demand by organized animal marketing decisions, thus putting Contact Lee Puricelli, Paperwork welfare groups and private citizens everyone in the marketing system in an Specialist, Food Safety and Inspection requesting a Federal law to protect such equal bargaining position. Service, USDA, 300 12th Street, SW., animals. USDA, Animal and Plant Need and Use of the Information: Room 109, Washington, DC 20250– Health Inspection Service (APHIS), AMS will collect information on 3700, (202) 720–0346. Animal Care (AC) has the responsibility estimation of the current day’s slaughter SUPPLEMENTARY INFORMATION:
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Title: Consumer Data to Support Risk FSIS is requesting OMB approval of a and persons with disabilities are aware Assessments, Regulation Development, new Information Collection Request to of this notice, FSIS will announce it and and Food Safety Education Initiatives. conduct consumer surveys that use the make copies of this Federal Register Expiration Date of Approval: 3 years. web-enabled panel survey methodology. publication available through the FSIS Type of Request: Regular. Specifically, the initial survey will Constituent Update. FSIS provides a Abstract: FSIS has been delegated the include questions on: weekly Constituent Update, which is authority to exercise the functions of the • How consumers store, handle, and communicated via Listserv, a free e-mail Secretary as provided in the Federal prepare specific meat, poultry, and egg subscription service. In addition, the Meat Inspection Act (FMIA) (21 U.S.C. products; update is available on-line through the • 601 et seq.), the Poultry Products How well consumers understand FSIS web page located at http:// Inspection Act (PPIA) (21 U.S.C. 451, et and follow the 4 Fight BAC!TM food www.fsis.usda.gov. The update is used seq.), and the Egg Products Inspection safety messages and other safe food to provide information regarding FSIS Act (EPIA) (21 U.S.C. 1031–1056). These handling instructions; policies, procedures, regulations, • statutes provide that FSIS is to protect Consumers’ expectations and Federal Register notices, FSIS public concerns regarding labeling; and meetings, recalls, and any other types of the public by ensuring that meat, • poultry, and egg products are safe, Consumers’ awareness of food information that could effect or would wholesome, unadulterated, and safety rules related to residues. be of interest to our constituents/ properly labeled and packaged. Estimate of Burden: The public stakeholders. The constituent Listserv reporting burden for this collection of To accomplish this objective, several consists of industry, trade, and farm information is estimated to average .25 program areas within FSIS need groups, consumer interest groups, allied hours (15 minutes) per response. consumer data. The Office of Public health professionals, scientific Respondents: Adult household food Health and Science (OPHS) needs professionals, and other individuals that preparers in the United States who consumer behavior data for food safety have requested to be included. Through prepare meat or poultry products at risk assessments. The Office of Policy, the Listserv and web page, FSIS is able least three times a week. to provide information to a much Program Development, and Evaluation Estimated Number of Respondents: (OPPDE) needs data on consumer broader, more diverse audience. 2400. For more information contact the practices and expectations for regulatory Estimated Number of Responses per impact analyses and policy Congressional and Public Affairs Office, Respondent: 1. at (202) 720–9113. To be added to the development. The Food Safety Estimated Total Annual Burden on free e-mail subscription service Education and Communications Staff Respondents: 600 hours. (Listserv) go to the ‘‘Constituent needs data on consumer knowledge and Copies of this information collection Update’’ page on the FSIS web site at behavior to identify food safety assessment can be obtained from Lee http://www.fsis.usda.gov/oa/update/ education needs and to develop and Puricelli. See ADDITIONAL INFORMATION update.htm. Click on the ‘‘Subscribe to evaluate educational campaigns. Since OR COMMENTS. FSIS now works in a risk analysis policy Comments are invited on: (a) Whether the Constituent Update Listserv’’ link, framework, the timeliness and the proposed collection of information then fill out and submit the form. comprehensiveness of consumer data is is necessary for the proper performance Done at Washington, DC, on: May 31, 2002. increasingly important to achieve the of FSIS’ functions, including whether William J. Hudnall, Agency goal of protecting the public the information will have practical Acting Administrator. health by significantly reducing the utility; (b) the accuracy of FSIS’ estimate [FR Doc. 02–16193 Filed 6–26–02; 8:45 am] prevalence of foodborne hazards from of the burden of the proposed collection BILLING CODE 3410–DM–P meat, poultry, and egg products. of information, including the validity of To meet the Agency’s need for timely the methodology and assumptions used; consumer data related to meat, poultry, (c) ways to enhance the quality, utility, DEPARTMENT OF AGRICULTURE and egg products, FSIS has considered and clarity of the information to be three options: (1) Depending on other collected; and (d) ways to minimize the Food Safety and Inspection Service recurring government surveys, (2) burden of the collection of information [Docket No. 01–039N] conducting surveys via the Internet, and on those who are to respond, including (3) conducting probability web-enabled through use of appropriate automated, Notice of Request for New Information panel surveys. The first option, adding electronic, mechanical, or other Collection Regarding Industry questions to other recurring government technological collection techniques, or Practices surveys, is not feasible because FSIS other forms of information technology. requires specific consumer data Comments may be sent to both Lee AGENCY: Food Safety and Inspection obtained in a timely manner. These Puricelli at the address provided above, Service, USDA. surveys usually occur only periodically and the Desk Officer for Agriculture, ACTION: Notice and request for and limit the content and quantity of Office of Information and Regulatory comments. questions that FSIS may add. The Affairs, Office of Management and second option, Internet surveys, does Budget, Washington, DC 20253. SUMMARY: In accordance with the not provide statistically valid results All responses to this notice will be Paperwork Reduction Act of 1995 and that are representative of the U.S. summarized and included in the request the Office of Management and Budget population. The third option, web- for OMB approval. All comments will (OMB) regulations, this notice enabled panel surveys, is the best option also become a matter of public record. announces the intention of Food Safety because it has the speed of Internet and Inspection Service (FSIS) to request surveys, but, unlike Internet surveys, it Additional Public Notification information collection regarding is based on true probability sampling Public awareness of all segments of industry practices specific to meat, and is a research method that produces rulemaking and policy development is poultry, and egg products. Also, in this reliable information for decision- important. Consequently, in an effort to same issue of the Federal Register FSIS making. better ensure that minorities, women, is publishing a notice of request for new
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information collection regarding Copies of this information collection Update’’ page on the FSIS web site at consumer practices, concerns, and assessment can be obtained from Lee http://www.fsis.usda.gov/oa/update/ awareness, specific to meat, poultry, Puricelli. See ADDITIONAL INFORMATION update.htm. Click on the ‘‘Subscribe to and egg products. OR COMMENTS. the Constituent Update Listserv’’ link, DATES: Comments on this notice must be Comments are invited on: (a) Whether then fill out and submit the form. received on or before August 26, 2002. the proposed collection of information Done at Washington DC, on May 31, 2002. is necessary for the proper performance ADDITIONAL INFORMATION OR COMMENTS: of FSIS’ functions, including whether William J. Hudnall, Contact Lee Puricelli, Paperwork the information will have practical Acting Administrator. Specialist, Food Safety and Inspection utility; (b) the accuracy of FSIS’ estimate [FR Doc. 02–16194 Filed 6–26–02; 8:45 am] Service, USDA, 300 12th Street, SW, of the burden of the proposed collection BILLING CODE 3410–DM–P Room 109, Washington, DC 20250– of information, including the validity of 3700, (202) 720–0346. the methodology and assumptions used; SUPPLEMENTARY INFORMATION: (c) ways to enhance the quality, utility, DEPARTMENT OF AGRICULTURE Title: Industry Stakeholder Survey. and clarity of the information to be Forest Service Expiration Date of Approval: 3 years. collected; and (d) ways to minimize the Type of Request: Regular. burden of the collection of information Abstract: FSIS has been delegated the Manti-La Sal National Forest, Utah Oak on those who are to respond, including Creek Ridge Aspen Project authority to exercise the functions of the thorough use of appropriate automated, Secretary as provided in the Federal electronic, mechanical, or other AGENCY: Forest Service, USDA. Meat Inspection Act (FMIA) (21 U.S.C. technological collection techniques, or ACTION: Notice of intent to prepare an 601 et seq.), the Poultry Products other forms of information technology. environmental impact statement. Inspection Act (PPIA) (21 U.S.C. 451, et Comments may be sent to both Lee seq.), and the Egg Products Inspection Puricelli at the address provided above, SUMMARY: The Forest Service will Act (EPIA) (21 U.S.C. 1031–1056). These and the Desk Officer for Agriculture, prepare an Environmental Impact statutes provide that FSIS is to protect Office of Information and Regulatory Statement (EIS) to document the the public by ensuring that meat, Affairs, Office of Management and analysis and disclose the environmental poultry, and egg products are safe, Budget, Washington, DC 20253. impacts of proposed actions to: wholesome, unadulterated, and All responses to this notice will be 1. Harvest approximately 1 MMBF of properly labeled and packaged. summarized and included in the request aspen/mixed conifer on approximately Executive Order 12866, the for OMB approval. All comments will 125 acres. Burning of slash Regulatory Flexibility Act (RFA), and also become a matter of public record. concentrations and fencing will follow the Small Business Regulatory treatment. Enforcement Fairness Act of 1996 Additional Public Notification 2. Chainsaw fell conifers on (SBREFA) direct Federal agencies to Public awareness of all segments of approximately 75 acres of existing conduct regulatory impact analysis, and rulemaking and policy development is young aspen stands. to consider flexible regulatory important. Consequently, in an effort to 3. Reconstruction (culvert approaches. In order to perform these better ensure that minorities, women, replacement) of approximately 2.5 miles mandatory analyses it is often necessary and persons with disabilities are aware FDR 138. to survey regulated industry to of this notice, FSIS will announce it and DATES: Comments concerning the scope determine existing practices, and the make copies of this Federal Register of the analysis must be received by changes in those practices, likely under publication available through the FSIS August 1, 2002. The draft environmental various policy options. Constituent Update. FSIS provides a impact statement is expected October FSIS is seeking OMB clearance to weekly Constituent Update, which is 2002 and the final environmental conduct surveys to implement communicated via Listserv, a free e-mail impact statement is expected March Executive Order 12866, RFA, and subscription service. In addition, the 2003. SBREFA. Participation in the surveys update is available on-line through the will be voluntary. FSIS will use the FSIS web page located at http:// ADDRESSES: Send written comments to: information gathered from these surveys www.fsis.usda.gov. The update is used Diane M. Cote, Sanpete Ranger District, to identify current business practices. to provide information regarding FSIS Manti-LaSal National Forest, 540 North FSIS projects 1 survey per year, with a policies, procedures, regulations, Main, Emphraim, Utah 84627, sample of about 200 to 1,000 Federal Register notices, FSIS public [email protected]. respondents for each mail survey. FSIS meetings, recalls, and any other types of For further information, mail will target the questions to the information that could effect or would correspondence to: Diane M. Cote, appropriate sample population to be of interest to our constituents/ Sanpete Ranger District, Manti-LaSal reduce response burden. stakeholders. The constituent Listserv National Forest, 540 North Main, Estimate of Burden: The public consists of industry, trade, and farm Ephraim, Utah 84627, [email protected]. reporting burden for this collection of groups, consumer interest groups, allied FOR FURTHER INFORMATION CONTACT: See information is estimated to average 1⁄2 health professionals, scientific above addresses: hour per response. professionals, and other individuals that SUPPLEMENTARY INFORMATION: The Oak Respondents: regulated industry, have requested to be included. Through Ridge Project area includes portions of health and science professionals, the Listerv and web page, FSIS is able the Oak Creek and Dry Creek. These consumers. to provide information to a much areas are managed as Range (RNG) Estimated Number of Respondents: broader, more diverse audience. under the Manti-La Sal National Forest 3000. For more information contact the Land and Resource Management Plan Estimated Number of Responses per Congressional and Public Affairs Office, (USDA, 1986). Respondent: 1. at (202) 720–9113. To be added to the The project area encompasses Estimated Total Annual Burden on free e-mail subscription service approximately 615 total acres. The Respondents: 1500 hours. (Listserv) go to the ‘‘Constituent project area contains about 463 acres of
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aspen and aspen/mixed conifer types Price, Utah 84501, phone: 435–637– environmental review process. First, that could be silviculturally treated to 2817. reviewers of draft environmental impact provide a more diverse ecosystem. statements must structure their Nature of Decision To Be Made Drainages within the project area participation in the environmental include Dry and Oak Creek. The Oak The Forest Supervisor of the Manti- review of the proposal so that it is Creek Inventories Roadless Area is LaSal must decide whether to conduct meaningful and alerts an agency to the within and adjacent to the project area. vegetation management activities now reviewer’s position and contentions. Approximately 125 acres of the or to defer management until a later Vermont Yankee Nuclear Power Corp. v. proposed treatments are within the Oak time. NRDC, 435 U.S. 519, 553 (1978). Also, Creek Inventoried Roadless Area. If she decides to apply vegetation environmental objections that could be Forest development road (FDR) 50138 management activities now, she must raised at the draft environmental impact provides access through the area and to decide the following specific statement stage but that are not raised a parcel of state owned land. The management activities: until after completion of the final proposed treatment units are adjacent to • Which acres to treat environmental impact statement may be • this road. This proposal has been What, if any, acres to treat with waived or dismissed by the courts. City developed through consultation with harvest of Angoon v. Hodel, 803 F.2d 1016, • Forest Service specialists, and other What, if any, acres to treat with 1022 (9th Cir. 1986) and Wisconsin individuals and agencies with interest conifer removal Heritages, Inc. v. Harris, 490 F. Supp. • in the resources of the area. What mitigation and/or monitoring 1334, 1338 (E.D. Wis. 1980). Because of measures to implement to meet Forest these court rulings, it is very important Purpose and Need for Action standards and minimize resource that those interested in this proposed Purpose #1—Move towards damage • action participate by the close of the restoration of the ecological structure, Whether to close roads not needed August 10, 2002 comment period so that function, processes, and composition of for resource management. substantive comments and objections the aspen component of the landscape. Scoping Process are made available to the Forest Service Need: Eighty-three percent of the at a time when it can meaningfully Agency representatives and other aspen/mixed conifer stands (463 acres) consider them and respond to them in interested people are invited to visit in the Oak Creek Ridge Project Area are the final environmental impact with Forest Service officials at any time in a mid-aged to mature condition, the statement. other 75 acres is in a young structural during the EIS process. Two specific To assist the Forest Service in stage. Conifers are encroaching in these time periods are identified for the identifying and considering issues and aspen stands and crowding the shade- receipt of formal comments on the concerns on the proposed action, intolerant aspen. Fire exclusion and analysis. The two comment periods are: comments on the draft environmental lack of any alternate regeneration (1) During the scoping process, the next impact statement should be as specific treatment over the past 100 years has 30 days following publication of this as possible. It is also helpful if caused the decline of these stands and notice in the Federal Register, and (2) comments refer to specific pages or changed the distribution of the During the formal review period of the chapters of the draft statement. structural stages. Converting the mature Draft EIS. The comment period on the Comments may also address the aspen/mixed conifer stands to a draft environmental impact statement adequacy of the draft environmental seedling/sapling structure will move the will be 45 days from the date the impact statement or the merits of the project area closer to the desired future Environmental Protection Agency alternatives formulated and discussed in condition discussed in the NFMA publishes the notice of availability in the statement. Reviewers may wish to (National Forest Management Act) the Federal Register. refer to the Council on Environmental analysis. Preliminary Issues Quality Regulations for implementing Proposed Action Possible impacts to the Oak Creek the procedural provisions of the 1. Harvest approximately 1 MMBF of Inventoried roadless Area if the project National Environmental Policy Act at 40 aspen/mixed conifer on approximately is implemented as stated in the CFR 1503.3 in addressing these points. 125 acres. Burning of slash proposed action. (Authority: 40 CFR 1501.7 and 1508.22; concentrations and fencing will follow Comment Request Forest Service Handbook 1909.15, Section treatment. 21). 2. Chainsaw fell conifers on This notice of intent initiates the Dated: June 21, 2002. scoping process which guides the approximately 75 acres of existing Elaine J. Zieroth, young aspen stands. development of the environmental impact statement. Forest Supervisor. 3. Reconstruction (culvert [FR Doc. 02–16228 Filed 6–27–02; 8:45 am] replacement) of approximately 2.5 miles Early Notice of Importance of Public FDR (Forest Development Road) 138. Participation in Subsequent BILLING CODE 3410–11–M Environmental Review: A draft Possible Alternatives environmental impact statement will be DEPARTMENT OF AGRICULTURE No additional alternatives other than prepared for comment. The comment ‘‘No Action’’ have been identified at this period on the draft environmental Forest Service time. impact statement will be 45 days from the date the Environmental Protection Responsible Official Juncrock Timber Sale, Mt. Hood Agency publishes the notice of National Forest, Wasco County, OR The Forest Supervisor, Elaine Zieroth availability in the Federal Register. is the responsible official for this The Forest Service believes, at this AGENCY: Forest Service, USDA. project. The Forest Supervisor’s office of early stage, it is important to give ACTION: Notice of intent to prepare an the Manti-La Sal National Forest is reviewers notice of several court rulings environmental impact statement. located at 599 West Price River Drive, related to public participation in the
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SUMMARY: The Forest Service, USDA, Approximately 12 miles of roads not proposed action participate by the close will prepare an environmental impact needed for future management would be of the 45-day comment period so that statement (EIS) on a proposal to closed. substantive comments and objections improve forest health on approximately The planning area is located are made available to the Forest Service 550 acres of land, using commercial approximately 38 miles south of Hood at a time when it can meaningfully thinning and individual tree selection River, Oregon in portions of Sections 1, consider them and respond to them in treatments, and to reconstruct 12, & 13, of T.5 S., R.9 E., and portions the final EIS. approximately 1.5 miles, and close of Sections 3, 4, 5, 6, 7, 8, 9, 10, 17, & To assist the Forest Service in approximately 22 miles of roads within 18, of T.5 S., R. 10 E., Willamette identifying and considering issues and the planning area. The proposed action Meridian, Wasco County, Oregon. The concerns on the proposed action, will be in compliance with the 1990 Mt. planning area does not include any comments on the draft EIS should be as Hood National Forest Land and wilderness, RARE II inventoried specific as possible. It is also helpful if Resource Management Plan (Forest roadless, or other unroaded areas. It is comments refer to specific pages or Plan) as amended by the Northwest outside the White River Wild and chapters of the draft EIS. Comments Forest Plan, which establishes the Scenic River corridor as identified in may also address the adequacy of the overall goals and guidelines for the ‘‘White River Wild and Scenic River draft EIS or the merits of the alternatives management of this area. The proposed Plan.’’ The planning area is immediately formulated and discussed in the action is within the White River adjacent to the White River late statement. Reviewers may wish to refer watershed on the Barlow Ranger successional reserve (LSR). The to the Council on Environmental District. It is scheduled for planning area is identified as a Tier 2 Quality Regulations for implementing implementation in fiscal years 2003 and Key Watershed in the Northwest Forest the procedural provisions of the 2004. The Mt. Hood National Forest Plan. The Juncrock Timber Sale is National Environmental Policy Act at 40 invites written comments and included in the C–1, Timber Emphasis CFR 1503.3 in addressing these points. suggestions on the scope of the analysis. allocation, and the B–2, Scenic The draft EIS is planned to be filed The agency will give notice of the full Viewshed allocation, of the Forest Plan. with the Environmental Protection environmental analysis and decision- Two preliminary issues have been Agency (EPA) and available for public making process so interested and identified; the impacts from removing review in August 2002. At that time, affected people may be able to mature and over-mature trees, and the copies of the draft EIS will be participate and contribute in the final impacts from extending existing roads. distributed to interested and affected decision. This analysis will evaluate a range of agencies, organizations, Indian Tribes, alternatives for implementation of the and members of the public for their DATES: Comments concerning the scope project activities including a no-action review and comment. The EPA will of the analysis should be postmarked by alternative. publish a Notice of Availability (NOA) July 31, 2002. Since the summer issue of 1998, the of the draft EIS in Federal Register. The ADDRESSES: Send written comments and Juncrock Planning Area has been comment period on the draft EIS will be suggestions concerning the proposed identified in ‘‘Sprouts’’, the Mt. Hood 45 days from the date the NOA appears action in this area to Becky Nelson, National Forest quarterly publication in the Federal Register. NEPA Coordinator, 780 N.E. Court that lists upcoming proposed projects. The Forest Service is seeking Street, Dufur, Oregon (phone: 541–467– There have been two field trips with information, comments, and assistance 2291). Comments may also be sent by interested public groups. Future scoping from other agencies, organizations, FAX (541–467–2271). Include your will include continued inclusion in Indian Tribes, and individuals who may name and mailing address with your ‘‘Sprouts’’, and continued identification be interested in or affected by the comments so documents pertaining to and clarification of issues, identification proposed action. Your comments are this project may be mailed to you. of key issues to be analyzed in depth, appreciated throughout the analysis FOR FURTHER INFORMATION CONTACT: and identification of potential process. Questions about the proposed action environmental effects of the proposed Comments received in response to and EIS should be directed to Becky action and alternatives. this proposed action, including names Nelson (address and phone number The Forest Service believes, at this and addresses of those who comment, listed above), or to Mike Redmond, early stage, it is important to give will be considered part of the public Environmental Coordination, 16400 reviewers notice of several court rulings record on this proposed action and will Champion Way, Sandy, Oregon 97055– related to public participation in the be available for public inspection. 7248 (phone: 503–668–1776). environmental review process. First, Comments submitted anonymously will SUPPLEMENTARY INFORMATION: The reviewers of draft EIS must structure be accepted and considered; however, proposed action would promote forest their participation in the environmental those who submit anonymous health by removing trees that are dead, review of the proposal so that it is comments will not have standing to or affected by insects, disease, meaningful and alerts an agency to the appeal the subsequent decision under overstocking, or defects on reviewer’s position and contentions. 36 CFR parts 214 or 217. Additionally, approximately 550 acres. This treatment Vermont Yankee Nuclear Power Corp. v. pursuant to 7 CFR 1.27(d), any person would help reach the goal of creating NRDC, 435 U.S. 519, 553 (1978). Also, may request the agency to withhold a multi-storied, disease resistant, stands environmental objections that could be submission from the public record by in this area. raised at the draft EIS stage but are not showing how the Freedom of Existing roads would be extended raised until after completion of the final Information Act (FOIA) permits such approximately 0.5 miles where access is EIS may be waived or dismissed by the confidentiality. Persons requesting such needed. A total of 4 roads would be courts. City of Angoon v. Hodel, 803 confidentiality should be aware that, reconstructed for approximately 1 mile. F.2d 1016, 1022 (9th Cir. 1986) and under the FOIA, confidentiality may be Approximately 9 miles of wildlife Wisconsin Heritages, Inc. v. Harris, 490 granted in only very limited closures would occur on 18 roads. Two F. Supp. 1334, 1338 (E.D. Wis. 1980). circumstances, such as to protect trade segments of roads would be Because of these court rulings, it is very secrets. The Forest Service will inform decommissioned for about 1 mile. important that those interested in this the requestor of the agency’s decision
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regarding the request for confidentiality, sales; review of rating criteria and meeting will be a field review of and where the request is denied, the design for project evaluation; and a proposed projects in North Fork. agency will return the submission and presentation on the noxious weed issue. DATES: The Madera Resource Advisory notify the requestor that the comments DATES: The meeting will be held July 15, Committee meeting will be held may be resubmitted with or without 2002, from 4 p.m. to 7 p.m. Monday, July 15, 2002. The meeting names and address within thirty days. ADDRESSES: The meeting will be held at will be held from 7 p.m. to 9 p.m. The final EIS is scheduled to be the Yreka High School Liberty, Preece ADDRESSES: The Madera County RAC available by December 2002. In the final Way, Yreka, California. meeting will be held at the Forest EIS, the Forest Service is required to FOR FURTHER INFORMATION CONTACT: Service Headquarters, 57003 Road 225, respond to substantive comments Nancy Gibson, Klamath National Forest North Fork, CA 93643. received during the comment period for USDA, 1312 Fairlane Road, Yreka, the draft EIS. The responsible official is FOR FURTHER INFORMATION CONTACT: California, 96097, (530) 841–4412; E- Dave Martin, U.S.D.A., Sierra National Gary Larsen, Mt. Hood National Forest MAIL [email protected] Supervisor. The responsible official will Forest, 57003 Road 225, North Fork, CA SUPPLEMENTARY INFORMATION: The decide which, if any, of the alternatives 93643, (559) 877–2218 ext. 3100; e-mail: meeting is open to the public. Public [email protected]. will be implemented. The Juncrock comment opportunity will be provided SUPPLEMENTARY INFORMATION: Agenda Planning Area decision and rationale and individuals will have the will be documented in a Record of items to be covered include: (1) a field opportunity to address the Committee at review of current proposed resource Decision, which will be subject to Forest that time. Service Appeal Regulations (36 CFR project proposal, (2) public comments. part 215). Dated: June 20, 2002. The meeting is open to the public. Margaret J. Boland, Public input opportunity will be Dated: June 20, 2002. Forest Supervisor, Klamath National Forest. provided and individuals will have the Kathryn J. Silverman, [FR Doc. 02–16177 Filed 6–26–02; 8:45 am] opportunity to address the Committee at Deputy Forest Supervisor. BILLING CODE 3410–11–M that time. [FR Doc. 02–16231 Filed 6–26–02; 8:45 am] Dated: June 21, 2002. BILLING CODE 3410–11–M David W. Martin, DEPARTMENT OF AGRICULTURE District Ranger. DEPARTMENT OF AGRICULTURE Forest Service [FR Doc. 02–16225 Filed 6–26–02; 8:45 am] BILLING CODE 3410–11–M Forest Service Madera County Resource Advisory Committee Siskiyou County Resource Advisory AGENCY: Forest Service, USDA. Committee DEPARTMENT OF COMMERCE ACTION: Notice of Resource Advisory AGENCY: Forest Service, USDA. Committee Meeting. Economic Development Administration ACTION: Notice of meeting. SUMMARY: Pursuant to the authorities in Notice of Petitions by Producing Firms SUMMARY: The Siskiyou County the Federal Advisory Committee Act of for Determination of Eligibility To Resource Advisory Committee (RAC) 1972 (Public Law 92–463) and under the Apply for Trade Adjustment will meet on July 15, 2002, in Yreka, secure Rural Schools and Community Assistance California. The focus of this meeting Self-Determination Act of 2000 (Public will be to discuss the following topics: Law 106–393) the Sierra National AGENCY: Economic Development Approval of previous Meeting Minutes; Forest’s Resource Advisory Committee Administration (EDA). second round of project proposals; for Madera County will meet on ACTION: To give all interested parties an outcome of the proponent assistance Monday, July 15, 2002. The Madera opportunity to comment. workshop held July 12th; County Resource Advisory Committee will meet Supervisors’ response to RAC at the Forest Service Headquarters Petitions have been accepted for filing presentation; CEQA/NEPA compliance office, 57003 Road 225, North Fork, on the dates indicated from the firms requirements; merchantable materials California 93643. The purpose of the listed below.
LIST OF PETITION ACTION BY TRADE ADJUSTMENT ASSISTANCE FOR PERIOD MAY 17, 2002–JUNE 19, 2002
Date Firm name Address petition Product accepted
MJM International, Inc ...... 2003 North I Road, San Juan, TX 78589 05/28/02 Medical furniture of PVC pipes and fabric. Compton Wood Products, Inc ...... 901Holley Drive, Martinsville, VA 24112 .. 05/28/02 Furniture frames, moldings, panel doors, drawer slides, tables, etc. of wood. Unico Foods, Inc ...... 13006 Darrington Road, El Paso, Texas 05/28/02 Chorizo. 79928. Inland Tool & Manufacturing Co ...... 630 South 5th Street, Kansas City, KS 05/28/02 Industrial tooling and die fabrication. 66105. Austro Mold, Inc ...... 3 Rutter Street, Rochester, NY 14606 ..... 05/28/02 Injection or compression type molds for rubber or plastic for the manufacture of semiconductor devices. Co-planar, Inc ...... 100 Round Hill Drive, Rockaway, NJ 06/30/02 Metal lead frames, auto connectors and 07866. contacts and electric razor metal parts. Catskill Craftsmen, Inc...... 15 West End Avenue, Stamford, NY 06/12/02 Kitchen workstations of wood. 12167.
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LIST OF PETITION ACTION BY TRADE ADJUSTMENT ASSISTANCE FOR PERIOD MAY 17, 2002–JUNE 19, 2002—Continued
Date Firm name Address petition Product accepted
R. J. Zeman Tool & Mfg. Co ...... W228 N575 W. Mound Dr., Waukesha, 06/13/02 Machined metal molds for injection mold- WI 53186. ing of plastic and die casting of metal. Circuits Engineering, Inc ...... 1832 180th Street SE, Bothell, WA 98012 06/13/02 Printed circuit boards. Douglas & Harper Manufacturing Co., Inc 1126 South Main Street, Baxley, GA 06/13/02 Textile based health care items, i.e. moist 31515. heat packs, halter traction devices, padded toilet seat risers, sanitary belts, lumbar support belts, etc. Sussex Wire, Inc ...... 4 Danforth Drive, Easton, PA 18045 ...... 06/14/02 Wire leads used in the semiconductor in- dustry. IKKA Technology, Inc ...... 5 Barber, Industrial Court, Villa Rica, GA 06/14/02 Video cassette cases. 30180. Plas-Tech Engineering, Inc ...... 281 E. Sheridan, Springs Rd., Lake Ge- 06/19/02 Injection molded plastic components for neva, WI 53147. non-electric medical instruments.
The petitions were submitted DEPARTMENT OF COMMERCE 24, 2002). On May 10, 2002, the pursuant to section 251 of the Trade Act Department issued its amended final of 1974 (19 U.S.C. 2341). Consequently, International Trade Administration determination in the antidumping duty the United States Department of [A–570–868] investigation of folding metal tables and Commerce has initiated separate chairs from the PRC. See Notice of investigations to determine whether Antidumping Duty Order: Folding Amended Final Determination of Sales increased imports into the United States Metal Tables and Chairs From the at Less Than Fair Value: Folding Metal of articles like or directly competitive People’s Republic of China Tables and Chairs from the People’s Republic of China, 67 FR 34898 (May with those produced by each firm AGENCY: Import Administration, 16, 2002) (‘‘Amended Final contributed importantly to total or International Trade Administration, Determination’’). In the Amended Final partial separation of the firm’s workers, Department of Commerce. Determination, the Department or threat thereof, and to a decrease in ACTION: Notice of antidumping duty amended the weighted-average margin sales or production of each petitioning order. firm. for Feili Furniture Development Co., Ltd. and Feili (Fujian) Co., Ltd. (‘‘Feili Any party having a substantial EFFECTIVE DATE: June 27, 2002. Group’’), Dongguan Shichang Metals interest in the proceedings may request FOR FURTHER INFORMATION CONTACT: John Factory Co. Ltd., and New-Tec Drury or Helen Kramer, Enforcement a public hearing on the matter. A Integration Co., Ltd. request for a hearing must be received Group III, Office 8, Import by Trade Adjustment Assistance, Room Administration, International Trade On June 4, 2002, the International 7315, Economic Development Administration, U.S. Department of Trade Commission notified the Administration, U.S. Department of Commerce, 1401 Constitution Avenue, Department of its final determination Commerce, Washington, DC 20230, no NW, Washington, DC 20230; telephone: pursuant to section 735(b)(1)(A)(i) of the later than the close of business of the (202) 482–0195 or (202) 482–0405, Act that an industry in the United States tenth calendar day following the respectively. is materially injured by reason of less- publication of this notice. than-fair-value imports of folding metal Applicable Statute and Regulations tables and chairs from the PRC. The The Catalog of Federal Domestic Unless otherwise indicated, all Commission also determined that Assistance official program number and title citations to the Tariff Act of 1930, as critical circumstances do not exist with of the program under which these petitions amended (‘‘the Act’’), are references to regard to imports of such merchandise are submitted is 11.313, Trade Adjustment the provisions effective January 1, 1995, that are subject to the Department’s Assistance. the effective date of the amendments affirmative critical circumstances Dated: June 21, 2002. made to the Act by the Uruguay Round finding. Anthony J. Meyer, Agreements Act. In addition, unless Scope of the Investigation Coordinator, Trade Adjustment and otherwise indicated, all citations to the Department’s regulations are to the Technical Assistance. The merchandise subject to this regulations at 19 CFR part 351 (2001). [FR Doc. 02–16229 Filed 6–26–02; 8:45 am] investigation consists of assembled and SUPPLEMENTARY INFORMATION: BILLING CODE 3510–24–P unassembled folding tables and folding Background chairs made primarily or exclusively from steel or other metal, as described On April 17, 2002, the Department issued its final determination in the below: antidumping duty investigation of (1) Assembled and unassembled folding metal tables and chairs from the folding tables made primarily or People’s Republic of China (‘‘PRC’’). See exclusively from steel or other metal Notice of Final Determination of Sales (‘‘folding metal tables’’). Folding metal at Less Than Fair Value: Folding Metal tables include square, round, Tables and Chairs from the People’s rectangular, and any other shapes with Republic of China, 67 FR 20090 (April legs affixed with rivets, welds, or any
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other type of fastener, and which are written description of the merchandise DEPARTMENT OF COMMERCE made most commonly, but not is dispositive. exclusively, with a hardboard top International Trade Administration Antidumping Duty Order covered with vinyl or fabric. Folding [A–201–820] metal tables have legs that mechanically In accordance with section 736(a)(1) fold independently of one another, and of the Act, the Department is directing Fresh Tomatoes From Mexico not as a set. The subject merchandise is Customs officers to assess, upon further commonly, but not exclusively, packed advice by the Department, antidumping AGENCY: Import Administration, singly, in multiple packs of the same duties equal to the amount by which the International Trade Administration, item, or in five piece sets consisting of normal value of the merchandise Department of Commerce. four chairs and one table. Specifically exceeds the export price of the ACTION: Notice of intent to terminate excluded from the scope of folding merchandise for all relevant entries of suspension agreement, intent to metal tables are the following: folding metal tables and chairs from the terminate the five-year sunset review, PRC. The antidumping duties will be intent to resume antidumping Lawn furniture; Trays commonly referred to as ‘‘TV assessed on all unliquidated entries of investigation, and request for comments trays’’; folding metal tables and chairs from the on the use of updated information: fresh Side tables; PRC entered, or withdrawn from tomatoes from mexico. warehouse, for consumption on or after Child-sized tables; SUMMARY: On May 31, 2002, Mexican Portable counter sets consisting of December 3, 2001, the date on which ″ the Department published its notice of tomato growers accounting for a large rectangular tables 36 high and percentage of all fresh tomatoes matching stools; and preliminary determination in the Federal Register. See Notice of imported into the United States from Banquet tables. A banquet table is a Preliminary Determination of Sales at Mexico provided written notice to the rectangular table with a plastic or Less Than Fair Value: Folding Metal Department of Commerce of their laminated wood table top approximately Tables and Chairs from the People’s withdrawal from the agreement 28″ to 36″ wide by 48″ to 96″ long and Republic of China, 66 FR 60185. On or suspending the antidumping with a set of folding legs at each end of after the date of publication of this investigation on fresh tomatoes from the table. One set of legs is composed notice in the Federal Register, customs Mexico. Because the suspension of two individual legs that are affixed officers must require, at the same time agreement will no longer cover together by one or more cross-braces as importers would normally deposit substantially all imports of fresh using welds or fastening hardware. In estimated duties on this merchandise, a tomatoes from Mexico when these contrast, folding metal tables have legs cash deposit equal to the estimated withdrawals become effective, the that mechanically fold independently of weighted-average dumping margins as Department of Commerce intends to one another, and not as a set. terminate the suspension agreement, (2) Assembled and unassembled noted below. The PRC-wide rate applies to all exporters of subject merchandise terminate the five-year sunset review, folding chairs made primarily or and resume the antidumping exclusively from steel or other metal from the PRC other than the companies named. The weighted-average dumping investigation. (‘‘folding metal chairs’’). Folding metal The Department of Commerce invites margins are as follows: chairs include chairs with one or more interested parties to submit comments cross-braces, regardless of shape or size, weighted- on whether it should use updated affixed to the front and/or rear legs with information to complete the Exporter/manufacturer average rivets, welds or any other type of margin per- antidumping investigation. Comments fastener. Folding metal chairs include: centage must be submitted to the Department of those that are made solely of steel or Commerce within five days from the other metal; those that have a back pad, Feili Furniture Development Co., Ltd. and Feili (Fujian) date of publication of this notice in the a seat pad, or both a back pad and a seat Co., Ltd ...... 13.72 Federal Register. pad; and those that have seats or backs Dongguan Shichang Metals FOR FURTHER INFORMATION CONTACT: made of plastic or other materials. The Factory Co. Ltd ...... 13.72 Yang Jin Chun or Mark Ross at (202) subject merchandise is commonly, but New-Tec Integration Co., Ltd ... 13.72 482–5760 or (202) 482–4794, not exclusively, packed singly, in Shin Crest Pte. Ltd ...... 00.00 respectively; Office of AD/CVD PRC-wide ...... 70.71 multiple packs of the same item, or in Enforcement 3, Import Administration, five piece sets consisting of four chairs International Trade Administration, and one table. Specifically excluded This notice constitutes the antidumping duty order with respect to U.S. Department of Commerce, 14th from the scope of folding metal chairs Street & Constitution Avenue, NW., are the following: folding metal tables and chairs from the PRC. Interested parties may contact the Washington, DC 20230. Folding metal chairs with a wooden Department’s Central Records Unit, back or seat, or both; Applicable Statute and Regulations Lawn furniture; room B–099 of the main Department of Unless otherwise indicated, all Stools; Commerce building, for copies of an citations to the statute are references to Chairs with arms; and updated list of antidumping duty orders the provisions effective January 1, 1995, Child-sized chairs. currently in effect. the effective date of the amendments This order is published in accordance made to the Tariff Act of 1930 (the Act) The subject merchandise is currently with section 736(a) of the Act. classifiable under subheadings by the Uruguay Round Agreements Act. 9401710010, 9401710030, 9401790045, Dated: June 14, 2002. In addition, unless otherwise indicated, 9401790050, 9403200010 and Faryar Shirzad, all citations to Department of Commerce 9403200030 of the HTSUS. Although Assistant Secretary for Import (Department) regulations refer to the the HTSUS subheadings are provided Administration. regulations codified at 19 CFR part 353 for convenience and U.S. Customs [FR Doc. 02–16199 Filed 6–26–02; 8:45 am] (1996). Service purposes, the Department’s BILLING CODE 3510–DS–P SUPPLEMENTARY INFORMATION:
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Background salad bars), and not accompanied by an Intent To Terminate the Five-Year On April 18, 1996, the Department FV–6 form are covered by the scope of Sunset Review this investigation. initiated an antidumping investigation On October 1, 2001, the Department All commercially grown tomatoes to determine whether imports of fresh initiated a five-year sunset review of the sold in the United States, both for the tomatoes from Mexico are being, or are suspended antidumping investigation fresh market and for processing, are likely to be, sold in the United States at on fresh tomatoes from Mexico pursuant classified as Lycopersicon esculentum. less than fair value (LTFV) (61 FR to section 751(c) of the Act (66 FR Important commercial varieties of fresh 18377, April 25, 1996). On May 16, 49926, October 1, 2001). On January 29, tomatoes include common round, 1996, the United States International 2002, the Department published its cherry, plum, and pear tomatoes, all of Trade Commission (ITC) notified the preliminary results of the sunset review which, with the exception of cocktail Department of its affirmative (67 FR 4237, January 29, 2002) tomatoes, are covered by this preliminary injury determination. (Preliminary Results). In the Preliminary investigation. Tomatoes imported from On October 10, 1996, the Department Results, the Department preliminarily Mexico covered by this investigation are and Mexican tomato growers initialed a found that termination of the suspended classified under the following proposed agreement suspending the antidumping duty investigation on fresh subheadings of the Harmonized Tariff antidumping investigation, and on tomatoes from Mexico would be likely Schedules of the United States October 28, 1996, the Department to lead to the continuation or recurrence (HTSUS), according to the season of preliminarily determined that imports of dumping. On May 13, 2002, the importation: 0702 and 9906.07.01 of fresh tomatoes from Mexico are being Department extended the deadline for through 9906.07.09. Although the sold at LTFV in the United States. See the final results of sunset review until HTSUS numbers are provided for Notice of Preliminary Determination of August 27, 2002 (67 FR 35099, May 17, convenience and customs purposes, our Sales at Less Than Fair Value and 2002). Postponement of Final Determination: written description of the scope of this Fresh Tomatoes from Mexico, 61 FR proceeding is dispositive. If the Department terminates the suspension agreement, there will no 56607 (November 1, 1996) (Preliminary Intent To Terminate Suspension Determination). On the same day, the longer be a suspended investigation for Agreement and Resume the which to perform a sunset review. Department and certain producers/ Antidumping Investigation exporters of fresh tomatoes from Mexico Therefore, the Department hereby signed the final suspension agreement. On May 31, 2002, Mexican tomato announces its intent to terminate the See Suspension of Antidumping growers accounting for a large sunset review of the suspended LTFV Investigation: Fresh Tomatoes from percentage of all fresh tomatoes investigation on fresh tomatoes from Mexico, 61 FR 56618 (November 1, imported into the United States from Mexico, effective July 30, 2002. 1996). On May 31, 2002, Mexican Mexico provided written notice to the Request for Comments on the Use of tomato growers accounting for a large Department of their withdrawal from Updated Information percentage of all fresh tomatoes the agreement suspending the imported into the United States from antidumping investigation on fresh Given the unusual nature of this Mexico submitted to the Department a tomatoes from Mexico. Pursuant to the proceeding (e.g., based on our analysis notice of their withdrawal from the terms of the suspension agreement, of U.S. Customs data, three of the agreement suspending the antidumping these withdrawals will become effective originally investigated companies have investigation on fresh tomatoes from 60 days after this notification to the not exported tomatoes to the United Mexico. Department, i.e., July 30, 2002. Because States in the last two years) and the the suspension agreement will no longer significant lapse of time since initiation Scope of the Investigation cover substantially all imports of fresh of the investigation (i.e., over six years), The products covered by this tomatoes from Mexico, the Department the Department is considering selecting investigation are all fresh or chilled intends to terminate the suspension new respondents and collecting updated tomatoes (fresh tomatoes) except for agreement effective July 30, 2002. information for use in completing the cocktail tomatoes and those tomatoes investigation of sales at LTFV. In the which are for processing. For purposes Intent To Resume Antidumping event we collect updated information, of this investigation, cocktail tomatoes Investigation the period of investigation will be from are greenhouse-grown tomatoes, With the termination of the April 1, 2001, through March 31, 2002. generally larger than cherry tomatoes suspension agreement on July 30, 2002, This period reflects the most recently and smaller than roma or common in accordance with section 734(i)(1)(B) completed four fiscal quarters before the round tomatoes, and are harvested and of the Act, the Department intends to Mexican tomato growers accounting for packaged on-the-vine for retail sale. For resume the underlying antidumping a large percentage of all fresh tomatoes purposes of this investigation, investigation. Pursuant to section imported into the United States from processing is defined to include 734(i)(1)(B) of the Act, the Department Mexico provided written notice to the preserving by any commercial process, intends to resume the investigation as if Department of their withdrawal from such as canning, dehydrating, drying or it had published the affirmative the suspension agreement. The the addition of chemical substances, or preliminary determination under Department invites interested parties to converting the tomato product into section 733(b) of the Act on July 30, submit comments on this issue. juices, sauces or purees. Further, 2002. As explained in the Preliminary Interested parties should submit imports of fresh tomatoes for processing Determination at 61 FR 56609, the comments to the U.S. Department of are accompanied by an ‘‘Importer’s Department postponed the final Commerce, Room 1870, 14th Street and Exempt Commodity Form’’ (FV–6) determination until the 135th day after Constitution Avenue, NW, Washington, (within the meaning of 7 CFR the date of the preliminary DC 20230, within five days of the date 980.501(a)(2) and 980.212(i)). Fresh determination. The Department of publication of this notice in the tomatoes that are imported for cutting therefore intends to make its final Federal Register. Interested parties must up, not further processed (e.g., tomatoes determination in the resumed file rebuttal comments within three days used in the preparation of fresh salsa or investigation by December 12, 2002. after the deadline for submission of
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comments. A list of authorities used, a DEPARTMENT OF COMMERCE determination regarding sales at LTFV table of contents, and an executive in this investigation (67 FR 31268). We summary of each comment should International Trade Administration preliminarily determined that certain accompany these submissions to the [A–421–810] cold-rolled carbon steel flat products Department. (cold-rolled steel) from the Netherlands Certain Cold-Rolled Carbon Steel Flat are being, or likely to be, sold in the International Trade Commission Products from The Netherlands: United States at LTFV, as provided in section 733(b) of the Tariff Act of 1930, The Department has notified the Postponement of Final Determination as amended. On May 1, 2002, Corus International Trade Commission (ITC) of of Sales at Less Than Fair Value Staal BV, the sole respondent in this its intent to terminate the suspension AGENCY: Import Administration, investigation, requested that the agreement and resume the LTFV International Trade Administration, Department postpone the final investigation. If the Department makes a Department of Commerce. determination to 135 days after the final affirmative determination, then the ACTION: Notice of Extension of Final publication of the preliminary ITC is scheduled to make its final Determination of Sales at Less Than Fair determination and requested that the determination concerning injury within Value. Department extend the provisional 45 days after publication of the measures period from four months to a Department’s final determination (by EFFECTIVE DATE: June 27, 2002. period not longer than 6 months. approximately January 27, 2003). If both FOR FURTHER INFORMATION CONTACT: the Department’s and the ITC’s final Geoffrey Craig or David Salkeld, AD/ Postponement of Final Determination determinations are affirmative, the CVD Enforcement Office VI, Group II, Given the fact that the Department Department will issue an antidumping Import Administration, International made an affirmative preliminary duty order. Trade Administration, U.S. Department determination and the largest exporter/ of Commerce, 14th Street and producer of imports during the period of Suspension of Liquidation Constitution Avenue, NW, Washington, investigation requested postponement DC 20230; telephone: (202) 482–4161 or The Department will instruct the U.S. and also asked that the Department (202) 482–1168, respectively. Customs Service (Customs) to suspend extend the provisional measures from a liquidation of entries of fresh tomatoes SUPPLEMENTARY INFORMATION: four month period to a period of not more than six months, as required by from Mexico that are entered, or Time Limits the Department’s regulations, we are withdrawn from warehouse, for Statutory Time Limits postponing the final determination until consumption on or after the effective no later than September 23, 2002 (i.e., date of the termination of the Section 735(a)(1) of the Tariff Act of 1930, as amended (the Act), requires the 135 days after the publication of the suspension agreement, which is July 30, preliminary determination). 2002. Customs shall require Department to issue (1) the final determination regarding sales at less This extension is in accordance with antidumping duty cash deposits or section 735(a)(2)(A) of the Act. bonds for entries of the subject than fair value (LTFV) in this merchandise based on the preliminary investigation within 75 days after the Dated: June 19, 2002. date of its preliminary determination. dumping margins, which range from Faryar Shirzad, However, section 735(a)(2) of the Act 4.16 to 188.45 percent. Assistant Secretary for Import states that the Department may Administration. Administrative Protective Order Access postpone the final determination until [FR Doc. 02–16290 Filed 6–26–02; 8:45 am] not later than 135 days after the date of BILLING CODE 3510–DS–S Administrative protective orders publication of the preliminary previously granted in the original determination if, in the case of a investigation will remain in effect. Any proceeding in which the preliminary DEPARTMENT OF COMMERCE necessary amendments for changes in determination by the administering staff must be submitted promptly. authority under section 733(b) was International Trade Administration This determination is issued and affirmative, a request in writing for such Export Trade Certificate of Review published in accordance with section a postponement is made by an exporter which accounts for a significant portion 733(f) of the Act (19 U.S.C. 1673b(f)) ACTION: Notice of Issuance of an Export and 19 CFR 353.15(1996). of the exports of the merchandise which is subject to the investigation. Section Trade Certificate of Review, Application Dated: June 19, 2002. 351.210 of the Department’s regulations No. 02–00001. Faryar Shirzad, further states that the exporter must also SUMMARY: request that the Department extend the The Department of Commerce Assistant Secretary for Import has issued an Export Trade Certificate of Administration. provisional measures from a four month period to a period of not more than 6 Review to ROCACO INC., (‘‘ROCACO’’) [FR Doc. 02–16198 Filed 6–26–02; 8:45 am] dba REIS Network and World Business BILLING CODE 3510–DS–P months. Alternatively, in the case of a proceeding in which the preliminary Exchange Network. This notice determination by the administering summarizes the conduct for which authority under section 733(b) was certification has been granted. negative, the request for postponement FOR FURTHER INFORMATION CONTACT: may be made in writing by the Jeffrey C. Anspacher, Director, Office of petitioner. Export Trading Company Affairs, International Trade Administration, by Background telephone at (202) 482–5131 (this is not On May 9, 2002, the Department a toll-free number), or by E-mail at published the preliminary [email protected].
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SUPPLEMENTARY INFORMATION: Title III of 1. Develop Export Trading Companies Review continue to comply with the the Export Trading Company Act of who provide and/or arrange for the standards of Section 303(a) of the Act. 1982 (15 U.S.C. Sections 4001–21) provision of Export Trade Facilitation Definitions authorizes the Secretary of Commerce to Services; issue Export Trade Certificates of 2. Engage in promotional and 1. ‘‘Member,’’ within the meaning of Review. The regulations implementing marketing activities and collect Section 325.2(1) of the Regulation, is Title III are found at 15 CFR part 325 information on trade opportunities in The REIS Foundation. (2001). the Export Markets and distribute such 2. ‘‘Supplier’’ means a person who The Office of Export Trading information to clients; produces, provides, or sells Products, Company Affairs (‘‘OETCA’’) is issuing 3. Enter into exclusive and/or non- Services and/or Technology Rights. this notice pursuant to 15 CFR 325.6(b), exclusive licensing and/or sales Protection Provided by the Certificate which requires the Department of agreements with Suppliers for the This Certificate protects ROCACO, its Commerce to publish a summary of the export of Products, Services, and/or Member, and their directors, officers, Certificate in the Federal Register. Technology Rights to Export Markets; and employees acting on their behalf Under section 305 (a) of the Act and 15 4. Enter into exclusive and/or non- from private treble damage actions and CFR 325.11(a), any person aggrieved by exclusive agreements with distributors government criminal and civil suits the Secretary’s determination may, and/or sales representatives in Export under U.S. federal and state antitrust within 30 days of the date of this notice, Markets; laws for the export conduct specified in bring an action in any appropriate 5. Allocate export sales or divide district court of the United States to set the Certificate and carried out during its Export Markets among Suppliers for the effective period in compliance with its aside the determination on the ground sale and/or licensing of Products, that the determination is erroneous. terms and conditions. Services, and/or Technology Rights; A copy of this certificate will be kept Description of Certified Conduct 6. Allocate export orders among in the International Trade Suppliers; Administration’s Freedom of Export Trade 7. Establish the price of Products, Information Records Inspection Facility 1. Products. All products. Services, and/or Technology Rights for Room 4102, U.S. Department of 2. Services. All services. sales and/or licensing in Export Commerce, 14th Street and Constitution 3. Technology Rights. All intellectual Markets; Avenue, NW., Washington, DC 20230. 8. Negotiate, enter into, and/or property rights associated with Products Dated: June 21, 2002. or Services, including, but not limited manage licensing agreements for the Jeffrey C. Anspacher, to: patents, trademarks, copyrights, and export of Technology Rights; trade secrets. 9. Enter into contracts for shipping; Director, Office of Export Trading, Company Affairs. 4. Export Trade Facilitation Services and (as they Relate to the Export of 10. Exchange information on a one-to- [FR Doc. 02–16195 Filed 6–26–02; 8:45 am] Products, Services, and Technology one basis with individual Suppliers BILLING CODE 3510–DR–P Rights). Export Trade Facilitation regarding inventories and near-term Services include professional services in production schedules for the purpose of DEPARTMENT OF COMMERCE the areas of government relations and determining the availability of Products assistance with state and federal for export and coordinating export with International Trade Administration programs; foreign trade and business its distributors. [Docket No. 020613147–2147–01 ] protocol; consulting; market research Terms and Conditions of Certificate and analysis; collection and International Buyer Program Support dissemination of information on trade 1. In engaging in Export Trade for Domestic Trade Shows opportunities; marketing; negotiations; Activities and Methods of Operation, joint ventures; export management; neither ROCACO nor its Member will AGENCY: International Trade export licensing; advertising; intentionally disclose, directly or Administration, Commerce. indirectly, to any Supplier any documentation and services related to ACTION: Notice and call for applications compliance with customs requirements; information about any other Supplier’s for the FY 2004 International Buyer insurance and financing; trade show costs, production, capacity, inventories, Program. exhibitions and seminars; organizational domestic prices, domestic sales, or U.S. development; management and labor business plans, strategies, or methods SUMMARY: This notice sets forth strategies; transfer of technology; and that are not already generally available objectives, procedures and application facilitating transportation and shipping. to the trade or public. review criteria associated with the 2. ROCACO and its Member will International Buyer Program (IBP) of the Export Markets comply with requests made by the U.S. Department of Commerce (DOC), to The Export Markets include all parts Secretary of Commerce on behalf of the support domestic trade shows. Selection of the world except the United States Secretary of Commerce or the Attorney is for the International Buyer Program (the fifty states of the United States, the General for information or documents for Fiscal Year 2004 (October 1, 2003 District of Columbia, the relevant to conduct under the through September 30, 2004). Commonwealth of Puerto Rico, the Certificate. The Secretary of Commerce The International Buyer Program was Virgin Islands, American Samoa, Guam, will request such information or established to bring international buyers the Commonwealth of the Northern documents when either the Attorney together with U.S. firms by promoting Mariana Islands, and the Trust Territory General or the Secretary of Commerce leading U.S. trade shows in industries of the Pacific Islands). believes that the information or with high export potential. The documents are required to determine International Buyer Program emphasizes Export Trade Activities and Methods of that the Export Trade, Export Trade cooperation between the DOC and trade Operation Activities, and Methods of Operation of show organizers to benefit U.S. firms ROCACO and/or its Member may: a person protected by this Certificate of exhibiting at selected events and
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provides practical, hands-on assistance industries with high export potential. Department, best meet the following such as export counseling and market Selection of a trade show is valid for criteria: analysis to U.S. companies interested in one event, i.e., a trade show organizer (a) Export Potential: The trade show exporting. The assistance provided to seeking selection for a recurring event promotes products and services from show organizers includes worldwide must submit a new application for U.S. industries that have high export overseas promotion of selected shows to selection for each occurrence of the potential, as determined by DOC potential international buyers, end- event. Even if the event occurs more sources, e.g., Commercial Service best users, representatives and distributors. than once in the 12-month period prospects lists and U.S. export statistics The worldwide promotion is executed covering this announcement, the trade (certain industries are rated as priorities through the offices of the DOC United show organizer must submit a separate by our domestic and international States and Foreign Commercial Service application for each event. commercial officers in their Country (hereinafter referred to as the The Commercial Service will select Commercial Guides). Commercial Service) in 74 countries approximately 28 events to support (b) International Interest: The trade representing America’s major trading between October 1, 2003, through show meets the needs of a significant partners, and also in U.S. Embassies in September 30, 2004. The Commercial number of overseas markets and countries where the Commercial Service Service will select those events that, in corresponds to marketing opportunities does not maintain offices. The its judgment, most clearly meet the as identified by the posts in their Department expects to select Commercial Service’s statutory mandate Country Commercial Guides (e.g. best approximately 28 shows for FY2004 to promote U.S. exports, especially prospect lists). Previous international from among applicants to the program. those of small and medium size attendance at the show may be used as Shows selected for the International enterprises and that best meet selection an indicator. Buyer Program will provide a venue for criteria articulated below. (c) U.S. Content of Show Exhibitors: Trade shows with exhibitors featuring a U.S. companies interested in expanding Successful show organizer applicants high percentage of U.S. products or their sales into international markets. will be required to enter into a products with a high degree of U.S. DATES: Applications must be received Memorandum of Understanding (MOU) content will be preferred. To be within August 26, 2002. Contributions with the DOC. The MOU constitutes an considered ‘‘U.S.’’, products and (discussed below) are for shows selected agreement between the DOC and the services to be exhibited must be and promoted during the period show organizer specifying which produced or manufactured in the U.S., between October 1, 2003, and responsibilities are to be undertaken by or if produced or manufactured outside September 30, 2004. DOC as part of the IBP and, in turn, of the U.S., the products or services ADDRESSES: Export Promotion Services/ which responsibilities are to be must contain more than 50% U.S. International Buyer Program, undertaken by the show organizer. content and must be marketed under the Commercial Service, International Trade Anyone who requests information name of a U.S. firm. Administration, U.S. Department of regarding applying will be sent a copy Commerce, 14th & Constitution Avenue, (d) Stature of the show: The trade of the MOU along with the application show is clearly recognized by the NW., H2116, Washington, DC 20230. package. The responsibilities to be Telephone: (202) 482–0146 (For industry it covers as a leading event for undertaken by DOC will be carried out the promotion of that industry’s deadline purposes, facsimile or email by the Commercial Service. applications will be accepted as interim products and services, both The Department selects trade shows domestically and internationally, and as applications, to be followed by signed to be IBP partners that it determines to original applications). a showplace for the latest technology or be leading international trade shows services in that industry or sector. FOR FURTHER INFORMATION CONTACT: Jim appropriate for participation by U.S. (e) Exhibitor Interest: There is Boney, Product Manager, International exporting firms and for promotion in demonstrated interest on the part of U.S. Buyer Program, Room 2116, Export overseas markets by U.S. Embassies and exhibitors in receiving international Promotion Services, U.S. and Foreign Consulates. Selection as an IBP partner business visitors during the trade show. Commercial Service, International Trade does not constitute a guarantee by the A significant number of U.S. exhibitors Administration, U.S. Department of U.S. Government of the show’s success. should be new-to-export or seeking to Commerce, 14th & Constitution Avenue, IBP partnership status is not an expand sales into additional NW., Washington, DC 20230. endorsement of the show organizer international markets. Telephone: (202) 482–0146; Fax: (202) except as to its international buyer (f) Overseas Marketing: There has 482–0115; Email: activities. Non-selection should not be been a demonstrated effort to market [email protected]. viewed as a finding that the event will prior shows overseas. In addition, the SUPPLEMENTARY INFORMATION: The not be successful in the promotion of applicant should describe in detail the Commercial Service is accepting U.S. exports. international marketing program to be applications for the International Buyer Exclusions: Trade shows that are conducted for the event, explaining how Program (IBP) for events taking place either first-time or horizontal (non- efforts should increase individual and between October 1, 2003, and industry specific) events will not be group international attendance. September 30, 2004. A contribution of considered. Annual trade shows will [Planned cooperation with Visit USA $7,000 for shows of five days or less is not be selected for this program more Committees overseas is desirable.] required. For shows more than five days than three times in any four-year period (g) Logistics: The trade show site, in duration, or requiring more than one (e.g., shows selected for fiscal years facilities, transportation services, and International Business Center, a 2001, 2002 and 2003 are not eligible for availability of accommodations are in contribution of $9,000 is required. inclusion in this program in fiscal year the stature of an international-class Under the IBP, the Commercial 2004, but can be considered in trade show. Service seeks to bring together subsequent years). (h) Cooperation: The applicant international buyers with U.S. firms by General Selection Criteria: The demonstrates a willingness to cooperate selecting and promoting U.S. domestic Department will select shows to be IBP with the Commercial Service to fulfill trade shows in international markets in partners that, in the judgment of the the program’s goals and to adhere to
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target dates set out in the MOU and the insufficient data. This document Alaska Region, NMFS, P.O. Box event timetable, both of which are provides additional important 21668, Juneau, AK 99802-1668; phone available from the program office (see information concerning these meetings.. (907)586–7221; fax (907)586–7249. ‘‘For Further Information’’ section above DATES: The meetings will be held on FOR FURTHER INFORMATION CONTACT: Jill on when, where, and how to apply). July 8–12, 2002. Lewandowski or Trevor Spradlin, Past experience in the IBP will be taken ADDRESSES: These meetings will be held (301)713–2289. into account in evaluating current at the Hyatt Sarasota Hotel, 1000 SUPPLEMENTARY INFORMATION: The applications to the program. Boulevard of the Arts, Sarasota, FL subject amendment to Permit No. 662– Legal Authority: The Commercial 34236; telephone: 941–953–1234. 1345–00, originally issued on May 30, Service has the legal authority to enter Council address: Gulf of Mexico 1997 (62 FR 13368), has been granted into MOUs with for-profit show Fishery Management Council, 3018 U.S. under the authority of the Marine organizers and other groups (partners) Highway 301 North, Suite 1000, Tampa, Mammal Protection Act of 1972, as under the provisions of the Mutual FL 33619. Educational and Cultural Exchange Act amended (16 U.S.C. 1361 et seq.), and FOR FURTHER INFORMATION CONTACT: of 1961 ((MECEA), as amended (22 the Regulations Governing the Taking U.S.C. Section 2455(f)) MECEA allows Wayne E. Swingle, Executive Director, and Importing of Marine Mammals (50 the Commercial Service to accept Gulf of Mexico Fishery Management CFR part 216). contribution of funds and services from Council; telephone: (813) 228–2815. The permit holder requested firms for the purposes of furthering its SUPPLEMENTARY INFORMATION: authorization to extend Permit No. 662– 1345–00 for an additional 12 months mission. The statutory program Correction authority for the Commercial Service to and change the annual report due date conduct the International Buyer In 67 FR Doc. 02–15885 of June 24, to December 31. The new expiration Program is 15 U.S.C. 4724. 2002, on page 42547, in the second date for the permit is May 31, 2003, and The Office of Management and Budget column, add the following information the new annual report due date is (OMB) has approved the information under the last entry for July 12, 2002, December 31 of each year the permit is collection requirements of the ‘‘Other Business’’ to read as follows: valid. The permit number has been application to this program under the 11:45–12 noon—Other Business. changed to No. 662–1345–01 to reflect provisions of the Paperwork Reduction The Council will consider a request that the permit has been amended. Act of 1995 (44 U.S.C. 3512 et seq.) from the South Atlantic Fishery Dated: June 20, 2002. Management Council (SAFMC) to the (OMB Control No. 0625–0151). Trevor Spradlin, Notwithstanding any other provision of Secretary of Commerce that the SAFMC be allowed to have their own Dolphin/ Acting Chief, Permits, Conservation and law, no person is required to respond to Education Division, Office of Protected nor shall a person be subject to a Wahoo Fishery Management Plan. Resources, National Marine Fisheries Service. penalty for failure to comply with a Dated: June 24, 2002. [FR Doc. 02–16282 Filed 6–26–02; 8:45 am] collection of information subject to the Theophilus R. Brainerd, BILLING CODE 3510–22–S requirements of the Paperwork Acting Director, Office of Sustainable Reduction Act unless that collection of Fisheries, National Marine Fisheries Service. information displays a currently valid [FR Doc. 02–16280 Filed 6–26–02; 8:45 am] DEPARTMENT OF COMMERCE OMB Control Number. BILLING CODE 3510–22–S National Oceanic and Atmospheric John Klingelhut, Administration Director, Office of Trade Event Programs, U.S. DEPARTMENT OF COMMERCE and Foreign Commercial Service, [I.D. 062002A] International Trade Administration, U.S. National Oceanic and Atmospheric Department of Commerce. Marine Mammals; Permit No. 358- Administration [FR Doc. 02–16258 Filed 6–26–02; 8:45 am] 1564–02, Permit No. 782–1532, File No. 1016–1651, File No. 800–1664, File No. BILLING CODE 3510–FP–P [I.D. 052102I] 434–1669, and File No. 881–1668 Marine Mammals; File No. 662–1345 AGENCY: National Marine Fisheries DEPARTMENT OF COMMERCE AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and National Oceanic and Atmospheric Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Administration Atmospheric Administration (NOAA), Commerce. Commerce. ACTION: Receipt of applications to [I.D. 061402C] ACTION: Issuance of permit amendment. amend permits, receipt of applications for scientific research permits, and Gulf of Mexico Fishery Management SUMMARY: Notice is hereby given that Council; Public Meetings; Correction availability of Environmental Dena Matkin, P.O. Box 22, Gustavus, Assessment. AGENCY: National Marine Fisheries Alaska 99826, has been issued an Service (NMFS), National Oceanic and amendment to scientific research Permit SUMMARY: Notice is hereby given of the Atmospheric Administration (NOAA), No. 662–1345–00. following actions regarding permits for Commerce. ADDRESSES: The amendment and related takes of Steller sea lions (Eumetopias ACTION: Notice of public meeting; documents are available for review jubatus) for the purposes of scientific correction. upon written request or by appointment research: NMFS has received permit in the following office(s): applications from Dr. Glenn SUMMARY: The Gulf of Mexico Fishery Permits, Conservation and Education VanBlaricom, Washington Cooperative Management Council published a Division, Office of Protected Resources, Fish and Wildlife Research Unit, School document in the Federal Register of NMFS, 1315 East-West Highway, Room of Aquatic and Fishery Sciences, June 24, 2002, convening public 13705, Silver Spring, MD 20910; phone University of Washington, Seattle, WA meetings. The document contained (301)713–2289; fax (301)713–0376; and 98195; Dr. Randall Davis, Department of
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Marine Biology, Texas A&M University, Applications to Amend Permits deferred a decision on these amendment Galveston, TX 77551; the Oregon requests pending its completion. Department of Fish and Wildlife A notice of receipt for a major Applications for Permits (ODFW), Corvallis, Oregon 97330 (PI: amendment to Permit No. 358–1564–00, Robin Brown); and the Alaska SeaLife issued to Alaska Department of Fish and Dr. Randall Davis (File No. 800–1664) Center (ASLC), Seward, Alaska 99664 Game on June 28, 2000 (65 FR 39878) proposes to take threatened and (PI: Don Calkins). NMFS has received was published on July 5, 2001 (66 FR endangered Steller sea lions in Alaska applications to amend Permit No. 782– 35412). Permit No. 358–1564–00 by capture, anesthesia, hot-branding, 1532, issued to The National Marine authorizes the permit holder to take tissue sampling (including blood, skin, Mammal Laboratory (NMML), National Steller sea lions of all ages and both and blubber), attachment of scientific Marine Fisheries Service, NOAA, sexes over a 5–year period in Alaska instruments (video system/data logger Seattle, WA 98115–0070 (PI: Dr. and British Columbia by aerial/boat and satellite transmitters), and Thomas Loughlin) and Permit No. 358– surveys, capturing, handling, tagging, accidental mortality to compare hunting 1564-02, issued to the Alaska blood/biopsy sampling, and branding. behavior and three-dimensional Department of Fish and Game (ADFG), The permit holder requested movements of free-ranging adult females Juneau, Alaska 99802–5526 (PI: Dr. authorization to: administer Evans blue (including pregnant animals) and Thomas Gelatt). dye, collect additional blood and tissue juveniles of both sexes at various samples from, and attach scientific rookeries, as it relates to prey DATES: Written or telefaxed comments on the new applications, amendment instruments to Steller sea lions already preferences and predator-prey requests or Environmental Assessment authorized to be captured and handled, relationships. Dr. Glenn VanBlaricom (File No. must be received on or before July 29, and increase the frequency of aerial 1016–1641) proposes to take threatened 2002. surveys and recaptures for purposes of scientific research. Subsequent to and endangered Steller sea lions in the ADDRESSES: The applications, publication of the Notice of Receipt to Aleutian Islands, Gulf of Alaska, and amendment requests and related amend this permit, the Permit Holder southeast Alaska by remote biopsy documents, and the Environmental submitted supplementary information darting, incidental harassment, and Assessment are available for review and requests for additional accidental mortality, to collect blubber upon written request, by downloading modifications to the permit, including samples for analysis to assess prey from the internet, or by appointment in an increase in the number of accidental selection. Some samples will be the following office(s): mortalities. exported to Canada for analysis. All documents: Permits, Conservation Northern fur seals (Callorhinus ursinus) A notice of receipt for a major and Education Division, Office of and harbor seals (Phoca vitulina amendment to Permit No. 782–1532, Protected Resources, NMFS, 1315 East- richardsi) may be incidentally harassed issued to NMFS, National Marine West Highway, Room 13705, Silver during biopsy sampling. Spring, MD 20910, (301)713–2289, or Mammal Laboratory on January 14, 2000 The Oregon Department of Fish and the Division’s web page at http:// (65 FR 2383) was published on June 8, Wildlife (File No. 434–1669) proposes to www.nmfs.noaa.gov/protlres/PR1/ 2001 (66 FR 30885). Permit No. 782– take threatened Steller sea lions in Permits/pr1permitslreview.html . 1532–01 authorizes the permit holder to California, Washington, and Oregon by For permit 782–1532 (NMML) and take Steller sea lions of all ages and both capture, hot-branding, flipper tagging, Files No. 1016–1651 (Univ. of sexes over a 5–year period in Alaska, collection of blood and tissue samples Washington) and 434–1669 (ODFW): California, Washington, and Oregon by from, attachment external scientific Northwest Region, NMFS, 7600 Sand aerial/boat surveys, capturing, handling, instruments to, harassment incidental to Point Way NE, BIN C15700, Bldg. 1, tagging, blood/biopsy sampling, and these activities and remote monitoring, Seattle, WA 98115–0700,(206)526–6150; branding. The permit holder requested and accidental mortality. The purpose and authorization to: increase the frequency of the research is to continue monitoring For permits 782–1532 (NMML), 358– of takes by aerial surveys; include the status of the Alaskan Steller sea lion 1564–02 (ADFG) and Files No. 1016– Southeast Alaska in monthly surveys; population and to identify causes of the 1651 (Univ. of Washington), 800–1664 increase the number of animals to be population decline so as to provide for (Davis), and 881–1668 (ASLC): Alaska incidentally harassed during scat the population’s recovery. Region, NMFS, P.O. Box 21668, Juneau, collection; and allow additional The Alaska SeaLife Center (File No. AK 99802–1668,(907)586–7221. procedures for animals already 881–1668) proposes to take threatened FOR FURTHER INFORMATION CONTACT: authorized for capture, including using and endangered Steller sea lions in Tammy Adams or Ruth Johnson, 301/ gas anesthesia, branding of any animal Alaska by capture, hot-branding, flipper 713–2289. captured, injecting Evan’s blue dye and tagging, collection of blood and tissue SUPPLEMENTARY INFORMATION: The deuterated water, collecting additional samples from, attachment of external subject permits and amendments are blood and tissue samples, and using scientific instruments to, implanting requested under the authority of the bioelectric impedance analysis. scientific instruments in, holding in Marine Mammal Protection Act of 1972, Subsequent to publication of the Notice captivity for up to 3 months, conducting as amended (MMPA; 16 U.S.C. 1361 et of Receipt to amend this permit, the controlled feeding and endocrinology seq.), the Regulations Governing the Permit Holder submitted supplementary experiments on, accidental mortality, Taking and Importing of Marine information and requests for additional and harassment incidental to these Mammals (50 CFR part 216), the modifications to the permit, including activities and remote monitoring. The Endangered Species Act of 1973, as an increase in the number of accidental overall purpose of the research is to amended (ESA; 16 U.S.C. 1531 et seq.), mortalities. collect information on the health status, the regulations governing the taking, Subsequent to publication of the physiology, life history, foraging importing, and exporting of endangered Notice of Receipt to amend these behavior and habitat use of Steller sea and threatened species (50 CFR parts permits, the NMFS determined that lions. 222–226), and the Fur Seal Act of 1966, preparation of an Environmental NOAA environmental review as amended (16 U.S.C. 1151 et seq.). Assessment (EA) was warranted and procedure provide that scientific
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research permits are generally amendment to scientific research Permit Federal agencies are required to publish categorically excluded from the No. 782–1645. notice in the Federal Register National Environmental Policy Act of ADDRESSES: The amendment and related concerning each proposed collection of 1969 (NEPA; 42 U.S.C. 4321 et seq.) documents are available for review information, including each proposed requirements to prepare an EA or upon written request or by appointment extension of an existing collection of environmental impact statement (EIS). in the following office(s): information, and to allow 60 days for However, because of the magnitude and Permits, Conservation and Education public comment in response to the intensity of proposed research, which is Division, Office of Protected Resources, notice. This notice solicits comments on largely related to the recent funding NMFS, 1315 East-West Highway, Room rules related to risk disclosure opportunities, and the intense public 13705, Silver Spring, MD 20910; phone concerning exchange traded commodity interest in this species, NMFS (301)713–2289; fax (301)713–0376; futures and options. determined that an EA was warranted. Northwest Region, NMFS, 7600 Sand DATES: Comments must be submitted on For additional information on recent Point Way NE, BIN C15700, Bldg. 1, or before August 26, 2002. funding, see the notice of availability of Seattle, WA 98115–0700; phone ADDRESSES: Comments may be mailed to funds for the Steller Sea Lion Research (206)526–6150; fax (206)526–6426; and Lawrence B. Patent, Division of Trading Initiative (66 FR 15842). An EA was Southwest Region, NMFS, 501 West and Markets, U.S. Commodity Futures prepared on the issuance of the Ocean Blvd., Suite 4200, Long Beach, Trading Commission, 1155 21st Street, proposed permits, resulting in a finding CA 90802–4213; phone (562)980–4001; NW., Washington, DC 20581. of no significant impact, and is available fax (562)980–4018. FOR FURTHER INFORMATION CONTACT: for review as a companion document to FOR FURTHER INFORMATION CONTACT: Lawrence B. Patent, (202) 418–5439; the scientific research permit Ruth Johnson or Carrie Hubard FAX: (202) 418–5536; E-mail: applications. The EA also considered (301)713–2289. [email protected]. proposed takes of Steller sea lions by aerial/vessel survey, harassment during SUPPLEMENTARY INFORMATION: On April SUPPLEMENTARY INFORMATION: Under the scat collection and behavioral 25, 2002, notice was published in the PRA, Federal agencies must obtain observations, as requested in an Federal Register (67 FR 20491) that an approval from the Office of Management application for a scientific research amendment of Permit No. 782–1645, and Budget (OMB) for each collection of permit submitted by the Aleutians East issued September 4, 2001 (66 FR 47016), information they conduct or sponsor. Borough, File No. 1010–1641. A notice had been requested by the above-named ‘‘Collection of information’’ is defined of receipt of this application was organization. The requested amendment in 44 U.S.C. 3502(3) and 5 CFR published on August 22, 2001 (66 FR has been granted under the authority of 1320.3(c) and includes agency requests 44120) and a decision was deferred the Marine Mammal Protection Act of or requirements that members of the pending preparation of the EA. 1972, as amended (16 U.S.C. 1361 et public submit reports, keep records, or Concurrent with the publication of seq.), and the Regulations Governing the provide information to a third party. this notice in the Federal Register, Taking and Importing of Marine Section 3506(c)(2)(A) of the PRA, 44 NMFS is forwarding copies of these Mammals (50 CFR part 216). U.S.C. 3506(c)(2)(A), requires Federal applications to the Marine Mammal The Permit was amended to allow agencies to provide a 60-day notice in Commission and its Committee of capture, tagging and sampling of Dall’s the Federal Register concerning each Scientific Advisors. porpoise in Washington, Oregon and proposed collection of information, California waters. Dated: June 21, 2002. including each proposed collection of information, including each proposed Trevor Spradlin, Dated: June 21, 2002. Trevor R. Spradlin, extension of an existing collection of Acting Chief, Permits, Conservation and information, before submitting the Education Division, Office of Protected Acting Chief, Permits, Conservation and Resources, National Marine Fisheries Service. Education Division, Office of Protected collection to OMB for approval. To comply with this requirement, the CFTC [FR Doc. 02–16283 Filed 6–26–02; 8:45 am] Resources, National Marine Fisheries Service. is publishing notice of the proposed BILLING CODE 3510–22–S [FR Doc. 02–16284 Filed 6–26–02; 8:45 am] BILLING CODE 3510–22–S collection of information listed below. With respect tot he following DEPARTMENT OF COMMERCE collection of information, the CFTC COMMODITY FUTURES TRADING invites comments on: • Whether the proposed collection of National Oceanic and Atmospheric COMMISSION Administration information is necessary for the proper performance of the functions of the [I.D. 061002B] Agency Information Collection Activities: Rules Related to Risk Commission, including whether the Marine Mammals; Permit No. 782– Disclosure Concerning Exchange information will have a practical use; • The accuracy of the Commission’s 1645–01 Traded Commodity Futures and Options estimate of the burden of the proposed AGENCY: National Marine Fisheries collection of information, including the Service (NMFS), National Oceanic and AGENCY: Commodity Futures Trading validity of the methodology and Atmospheric Administration (NOAA), Commission. assumptions used; • Commerce. ACTION: Notice. Ways to enhance the quality, ACTION: Issuance of permit amendment. usefulness, and clarity of the SUMMARY: The Commodity Futures information to be collected; and SUMMARY: Notice is hereby given that Trading Commission (CFTC) is • Ways to minimize the burden of the National Marine Mammal announcing an opportunity for public collection of information on those who Laboratory, Alaska Fisheries Science comment on the proposed collection of are to respond, including through the Center, 7600 Sand Point Way, N.E., BIN certain information by the agency. use of appropriate automated electronic, C15700, Seattle, WA 98115 (PI: Dr. Under the Paperwork Reduction act of mechanical, or other technological Robert DeLong) has been issued an 1995 (PRA), 44 U.S.C. 3501 et seq., collection techniques or other forms of
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information technology; e.g., permitting To provide their customers with to avoid fraud and misrepresentation. electronic submission of responses. standard risk disclosure statements This information collection contains the concerning the risk of trading recordkeeping and reporting Rules Related to Risk Disclosure commodity interests; and (2) to retain requirements needed to ensure Concerning Exchange Traded all promotional material and the source regulatory compliance with Commission Commodity Futures and Options, OMB of authority for information contained rules relating to this issue. Control Number 3038–0007—Extension therein. The purpose of these rules is to The Commission estimates the burden The rules require futures commission ensure that customers are advised of the of this collection of information as merchants and introducing brokers: (1) risks of trading commodity interests and follows:
ESTIMATED ANNUAL REPORTING BURDEN
Annual num- 17 CFR section ber of re- Total annual Hours per re- Total hours spondents responses sponse
33.7 and 33.8 ...... 415 20,380 0.39 7,985
There are no capital costs or operating DEPARTMENT OF DEFENSE FOR FURTHER INFORMATION CONTACT: Ms. and maintenance costs associated with J. Hurd, DSCA/COMPT/RM, (703) 604– this collection. Office of the Secretary 6575. Dated: June 20, 2002. [Transmittal No. 02–26] The following is a copy of a letter to Jean A. Webb, the Speaker of the House of 36(b)(1) Arms Sales Notification Secretary of the Commission. Representative, Transmittal 02–26 with attached transmittal, policy justification, [FR Doc. 02–16202 Filed 6–26–02; 8:45 am] AGENCY: Department of Defense, Defense and Sensitivity of Technology. BILLING CODE 6351–01–M Security Cooperation Agency. ACTION: Notice. Dated: June 20, 2002. Patricia L. Toppings, SUMMARY: The Department of Defense is Alternate OSD Federal Register Liaison publishing the unclassified text of a Officer, Department of Defense. section 36(b)(1) arms sales notification. This is published to fulfill the BILLING CODE 5001–08–M requirements of section 155 of Public Law 104–164 dated 21 July 1996.
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[FR Doc. 02–16182 Filed 6–26–02; 8:45 am] request to review and approve an including suggestions for reducing this BILLING CODE 5001–08–M extension of a currently approved burden to: FAR Desk Officer, OMB, information collection requirement Room 10102, NEOB, Washington, DC concerning economic price adjustment. 20503, and a copy to the General DEPARTMENT OF DEFENSE A request for public comments was Services Administration, FAR published in the Federal Register at 67 Secretariat (MVP), 1800 F Street, NW, GENERAL SERVICES FR 18179, April 15, 2002. No comments ADMINISTRATION Room 4035, Washington, DC 20405. were received. Please cite OMB Control No. 9000–0068, Public comments are particularly NATIONAL AERONAUTICS AND Economic Price Adjustment, in all invited on: Whether this collection of correspondence. SPACE ADMINISTRATION information is necessary for the proper [OMB Control No. 9000–0068] performance of functions of the FAR, FOR FURTHER INFORMATION CONTACT: Julia and whether it will have practical Wise, Acquisition Policy Division, GSA Federal Acquisition Regulation; utility; whether our estimate of the (202) 208–1168. Submission for OMB Review; public burden of this collection of Economic Price Adjustment information is accurate, and based on SUPPLEMENTARY INFORMATION: valid assumptions and methodology; AGENCIES: Department of Defense (DOD), A. Purpose ways to enhance the quality, utility, and General Services Administration (GSA), clarity of the information to be Afixed-price contract with economic and National Aeronautics and Space collected; and ways in which we can price adjustment provides for upward Administration (NASA). minimize the burden of the collection of and downward revision of the stated ACTION: Notice of request for public information on those who are to contract price upon occurrence of comments regarding an extension to an respond, through the use of appropriate specified contingencies. In order for the existing OMB clearance. technological collection techniques or contracting officer to be aware of price SUMMARY: Under the provisions of the other forms of information technology. changes, the firm must provide Paperwork Reduction Act of 1995 (44 DATES: Submit comments on or before pertinent information to the U.S.C. Chapter 35), the Federal July 29, 2002. Government. The information is used to Acquisition Regulation (FAR) ADDRESSES: Submit comments regarding determine the proper amount of price Secretariat has submitted to the Office this burden estimate or any other aspect adjustments required under the of Management and Budget (OMB) a of this collection of information, contract.
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B. Annual Reporting Burden DEPARTMENT OF DEFENSE Notice of this meeting is required under the Federal Advisory Committee Respondents: 5,346. Office of the Secretary Act. Responses Per Respondent: 1. Education Benefits Board of Actuaries; DATES: August 23, 2002, 9:30 a.m. to 1 Annual Responses: 5,346. Notice of Meeting p.m. Hours Per Response: .25. AGENCY: ADDRESSES: The Pentagon, Room 1E801. Total Burden Hours: 1,337. DoD. ACTION: Notice of meeting. FOR FURTHER INFORMATION CONTACT: Bill Obtaining Copies of Proposals Klunk, DoD Office of the Actuary, 1555 SUMMARY: A meeting of the Board has Wilson Boulevard, Suite 701, Arlington, Requesters may obtain a copy of the been scheduled to execute the VA 22209–2405, (703) 696–7404. information collection documents from provisions of Chapter 101, Title 10, Dated: June 21, 2002. the General Services Administration, United States Code (10 U.S.C. 2006). FAR Secretariat (MVP), Room 4035, The Board shall review DoD actuarial Patricia L. Toppings, 1800 F Street, NW, Washington, DC methods and assumptions to be used in Alternate OSF Federal Register Liaison 20405, telephone (202) 501–4755. Please the valuation of the G.I. Bill. Persons Officer, Department of Defense. cite OMB Control No. 9000–0068, desiring to: (1) Attend the DoD [FR Doc. 02–16185 Filed 6–26–02; 8:45 am] Economic Price Adjustment, in all Education Benefits Board of Actuaries BILLING CODE 5001–08–M correspondence. meeting or, (2) make an oral Dated: June 18, 2002. presentation or submit a written DEPARTMENT OF DEFENSE Al Matera, statement for consideration at the Director, Acquisition Policy Division. meeting must notify Inger Pettygrove at Defense Threat Reduction Agency [FR Doc. 02–15938 Filed 6–26–02; 8:45 am] (703) 696–7413 by July 24, 2002. BILLING CODE 6820–EP–P Notice of this meeting is required Privacy Act of 1974; System of under the Federal Advisory Committee Records Act. DEPARTMENT OF DEFENSE DATES: September 6, 2002; 10 a.m. to 1 AGENCY: Defense Threat Reduction p.m. Agency, DoD. Office of the Secretary ADDRESSES: The Pentagon, Room 1E801. ACTION: Notice to delete a system of Notice of Meeting FOR FURTHER INFORMATION CONTACT: records. Inger Pettygrove, DoD Office of the AGENCY: Retirement Board of Actuaries, Actuary, 1555 Wilson Boulevard, Suite SUMMARY: The Defense Threat Reduction DOD. 701, Arlington, VA 22209–2405, (703) Agency is deleting one system of 696–7413. records notice in its existing inventory ACTION: Notice of meeting. Dated: June 21, 2002. of record systems subject to the Privacy Act of 1974, (5 U.S.C. 552a), as SUMMARY: A meeting of the Board has Patricia L. Toppings, amended. been scheduled to execute the Alternate OSD Federal Register Liaison provisions of Chapter 74, Title 10, Officer, Department of Defense. DATES: This proposed action would be United States Code (10 U.S.C. 1464 et [FR Doc. 02–16183 Filed 6–26–02; 8:45 am] effective without further notice on July seq.). The Board shall review DoD BILLING CODE 5001–08–M 29, 2002 unless comments are received actuarial methods and assumptions to which result in a contrary be used in the valuation of the Military determination. Retirement System. Persons desiring to: DEPARTMENT OF DEFENSE (1) Attend the DoD Retirement Board of ADDRESSES: Chief, Information Support Actuaries meeting or, (2) make an oral Office of the Secretary Branch, Defense Threat Reduction presentation or submit a written Agency (ADF), 6801 Telegraph Road, Medicare-Eligible Retiree Health Care Alexandria, VA 22310–3398. statement for consideration at the Board of Actuaries; Notice of Meeting meeting, must notify Inger Pettygrove at FOR FURTHER INFORMATION CONTACT: Ms. (703) 696–7413 by July 24, 2002. Notice AGENCY: DoD. Sandy Ford at (703) 325–1205. of this meeting is required under the ACTION: Notice of meeting. Federal Advisory Committee Act. SUPPLEMENTARY INFORMATION: The SUMMARY: A meeting of the Board has Defense Threat Reduction Agency DATES: September 5, 2002, 1 p.m. to 5 been scheduled to execute the systems of records notices subject to the p.m. provisions of Chapter 56, Title 10, Privacy Act of 1974, (5 U.S.C. 552a), as ADDRESSES: The Pentagon, Room 1E801. United States Code (10 U.S.C. 1114 et amended, have been published in the seq.). The Board shall review DoD Federal Register and are available from FOR FURTHER INFORMATION CONTACT: the address above. Inger Pettygrove, DoD Office of the actuarial methods and assumptions to Actuary, 1555 Wilson Boulevard, Suite be used in the valuation of benefits The specific changes to the records 701, Arlington, VA 22209–2405, (703) under DoD retiree health care programs systems being amended are set forth 696–7413. for Medicare-eligible beneficiaries. below followed by the notices, as Persons desiring to: (1) Attend the DoD amended, published in their entirety. Dated: June 21, 2002. Medicare-Eligible Retiree Health Care The proposed amendments are not Patricia L. Toppings, Board of Actuaries meeting or, (2) make within the purview of subsection (r) of Alternate OSD Federal Register Liaison an oral presentation or submit a written the Privacy Act of 1974, (5 U.S.C. 552a), Officer, Department of Defense. statement for consideration at the as amended, which requires the [FR Doc. 02–16184 Filed 6–26–02; 8:45 am] meeting, must notify Bill Klunk at (703) submission of a new or altered system BILLING CODE 5001–08–M 696–7404 by July 12, 2002. report.
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Dated: June 21, 2002. Management and Budget (OMB) including administrative wage Patricia L. Toppings, pursuant to paragraph 4c of Appendix I garnishment (AWG) in accordance with Alternate OSD Federal Register Liaison to OMB Circular No. A–130, ‘Federal the Debt Collection Improvement Act of Officer, Department of Defense. Agency Responsibilities for Maintaining 1996 (Pub. L. 104–134), 31 U.S.C. Records About Individuals,’ dated 3720D, and 31 CFR part 285, to recover HDTRA 018 February 8, 1996 (February 20, 1996, 61 moneys owed to the U.S. Government.’ SYSTEM NAME: FR 6427). * * * * * Travel Management Program Dated: June 21, 2002. T7332 (December 14, 1998, 63 FR 68736). Patricia L. Toppings, REASON: Alternate OSD Federal Register Liaison SYSTEM NAME: Records are now being maintained Officer, Department of Defense. Defense Debt Management System. under the Defense Finance and T7332 Accounting Service system of records SYSTEM LOCATION: T7333, Travel Payment System (August SYSTEM NAME: Defense Finance and Accounting 22, 2000, 65 FR 50973). Defense Debt Management System Service-Denver Center, 6760 East (April 8, 1997, 62 FR 16793). Irvington Place, Denver, CO 80279– [FR Doc. 02–16186 Filed 6–26–02; 8:45 am] 8000. BILLING CODE 5001–08–P CHANGES: * * * * * CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM: DEPARTMENT OF DEFENSE SYSTEM LOCATION: Delete entry and replace with Individuals who are indebted to a Defense Finance and Accounting ‘Defense Finance and Accounting Department of Defense (DoD) agency Service; Privacy Act of 1974; System Service-Denver Center, 6760 East that have transferred debts to the of Records Irvington Place, Denver, CO 80279– Defense Debt Management System 8000.’ serviced by the Defense Finance and AGENCY: Defense Finance and Accounting Service. Accounting Service, DoD. CATEGORIES OF INDIVIDUALS COVERED BY THE ACTION: Notice of altered System of SYSTEM: EXCLUSION: Records. Delete ‘contractors’ from entry. This system does not include individuals who are indebted to a DoD SUMMARY: The Defense Finance and CATEGORIES OF RECORDS IN THE SYSTEM: First paragraph, first sentence, add agency and who have been identified as Accounting Service proposes to alter an currently receiving pay from DoD. existing system of records notice in its ‘billing and follow-up’ between ‘debt’ inventory of record systems subject to and ‘collection’. In second sentence CATEGORIES OF RECORDS IN THE SYSTEM: replace ‘amount of debt or’ with the Privacy Act of 1974, (5 U.S.C. 552a), Information varies depending on the as amended. The alteration consists of ‘original debt principal and the’, and add ‘late payment charges’, and ‘due debtor and the related history of debt adding a new routine use to permit the billing and follow-up collection activity. release of information to the Department process notice, and records of e-mail, telephone, or written’ to entry. These records may include name, Social of the Treasury for administrative wage Security Number, mailing address, garnishment. Third paragraph, replace first sentence with ‘Correspondence with original debt principal and the DATES: This action will be effective delinquent amount, basis of the debt, without further notice on July 29, 2002, other Federal agencies requesting administrative offset from payments date debt arose, late payment charges, unless comments are received that office referring the debt, collection would result in a contrary owed to the debtor.’ Fourth paragraph, add ‘U.S. efforts, credit reports, collection letters, determination. Department of Justice’ to entry. due process notice, and records of e- ADDRESSES: FOIA/PA Program Manager, Delete paragraphs six and nine. mail, telephone, or written Defense Finance and Accounting * * * * * correspondence to or from the debtor Service—Denver Center, Specialized relating to the debt. Legal Support Division, Office of PURPOSE(S): Correspondence with other Federal General Counsel, 6760 E. Irvington Delete the fourth paragraph. agencies to initiate the collection of Place, Denver, CO 80279–8000. Delete fifth paragraph and replace debts through voluntary or involuntary FOR FURTHER INFORMATION CONTACT: Ms. with ‘To determine the validity of offset procedures against the indebted Linda Krabbenhoft on (303) 676–7514. waivers or to make referrals to the employees’ salaries or compensation Defense Office of Hearings and Appeals SUPPLEMENTARY INFORMATION: The due a retiree. complete inventory of Defense Finance (DOHA).’ Correspondence with other Federal and Accounting Service records system ROUTINE USES OF RECORDS MAINTAINED IN THE agencies requesting administrative offset notices subject to the Privacy Act of SYSTEM, INCLUDING CATEGORIES OF USERS AND from payments owed to the debtor. 1974 (5 U.S.C. 552a), as amended, have THE PURPOSES OF SUCH USES: These records may include individual’s been published in the Federal Register Delete paragraphs five and nine. name, rank, date of birth, Social and are available from the address Add a new paragraph ‘To the U.S. Security Number, debt amount, above. Department of Treasury (DOT) for documentation establishing The proposed system report, as centralized administrative or salary overpayment status, military pay required by 5 U.S.C. 552a(r) of the offset, including the offset of Federal records, financial status affidavits, Privacy Act of 1974, as amended, was income tax refunds, for the purpose of credit references, and substantiating submitted on June 19, 2002, to the collecting debts owed the U.S. documents such as military pay orders, House Committee on Government Government; to the DOT contracted pay adjustment authorizations, military Reform, the Senate Committee on private collection agencies for the master pay account printouts, records of Governmental Affairs, and the Office of purpose of obtaining collection services, travel payments, financial record data
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folders, miscellaneous vouchers, debtor confirming, canceling, or determining if the Debt Collection Improvement Act of financial records, credit reports, the debts are accurate or valid, and 1996 (Pub. L. 104–134), 31 U.S.C. promissory notes, and debtor financial whether the debt should be remitted or 3720D, and 31 CFR part 285, to recover statements. waived. moneys owed to the U.S. Government. Information on U.S. Treasury All records in this system are subject To the U.S. Department of Veteran Department, Internal Revenue Service to use in authorized computer matching Affairs for administration of laws (IRS), U.S. Department of Justice, and programs within DoD and with other pertaining to veterans’ benefits. U.S. General Accounting Office (GAO) Federal agencies or non-Federal To any Federal agency for the purpose inquiries, judicial proceedings regarding agencies as regulated by the Privacy Act of accomplishing the administrative bankruptcy, pay account histories, and of 1974 (5 U.S.C. 552a), as amended. procedures to collect or dispose of a token payment information. debt owed to the U.S. Government. This Applications for waiver of erroneous ROUTINE USES OF RECORDS MAINTAINED IN THE includes, but is not limited to, the Office SYSTEM, INCLUDING CATEGORIES OF USERS AND payment or for remission of of Personnel Management for personnel THE PURPOSES OF SUCH USES: indebtedness with supporting management functions and the Internal documents including statements of In addition to those disclosures Revenue Service to obtain a mailing financial status (personal income and generally permitted under 5 U.S.C. address of a taxpayer for the purpose of expenses), statements of commanders or 552a(b) of the Privacy Act, these records locating such taxpayer to collect or Defense Accounting Officers, or information contained therein may compromise a Federal claim against the correspondence with debtors, or records specifically be disclosed outside the taxpayer pursuant to 26 U.S.C. of overpayments of Survivor Benefit DoD as a routine use pursuant to 5 1603(m)(2), and in accordance with 31 Plan benefits. U.S.C. 552a(b)(3) as follows: U.S.C. 3711, 3217, and 3718. The To the U.S. General Accounting Reports from probate courts regarding Internal Revenue Service may also Office, the U.S. Department of the the estates of deceased debtors. request locator service for delinquent Justice, Internal Revenue Service, U.S. Reports from bankruptcy courts accounts receivable in order to report Department of Treasury, or other regarding claims of the U.S. Government closed out accounts as taxable income, Federal agencies for further collection against debtors. including amounts compromised or action on any delinquent account when terminated, and accounts barred from AUTHORITY FOR MAINTENANCE OF THE SYSTEM: circumstances warrant. 5 U.S.C. 301, Departmental To commercial credit reporting litigation due to age. To any Federal, state, or local agency Regulations, 5512, 5513, 5514, and agencies for the purpose of adding debt for the purpose of conducting an 5584; 10 U.S.C. 1442, 1453, 2774, 2775, payment or non-payment data to a authorized computer-matching program 9835; 31 U.S.C. 3325, 3342, 3526, 3701, credit history file on an individual for to identify and locate delinquent 3702, 3711, 3716–3718; 32 U.S.C. 710, use in the administration of debt debtors for recoupment of debts owed 716; 37 U.S.C. 1007(c); 40 U.S.C. 721, collection. Delinquent debt information DoD. 723, 725, 726, 727, 728, 729; the Debt may be furnished for the purpose of Collection Act of 1982 (Pub. L. 97–365, To publish or otherwise publicly establishing an inducement for debtors disseminate information regarding the as amended by Pub. L. 104–134, the to pay their obligations to the U.S. Debt Collection Improvement Act of identity of the debtor and the existence Government. of the non-tax debt, subject to review by 1996); Pub. L. 89–508; E.O. 9397 (SSN); To any Federal agency where the and DoD 7000.14–R, Department of the Secretary of the Treasury. debtor is employed or receiving some The DoD ‘Blanket Routine Uses’ Defense Financial Management type of payment from that agency for the Regulation, Volume 5, Part Two. published at the beginning of the DFAS purpose of collecting debts owed the compilation of record system notices PURPOSE(S): U.S. Government by non-centralized also apply to this system. To administratively manage the offset. Non-centralized offset collection of debts owed to the encompasses an offset program DISCLOSURE TO CONSUMER REPORTING AGENCIES: Department of Defense (DoD). These administered by any Federal agency debts include, but are not limited to, other than the U.S. Department of Disclosures pursuant to 5 U.S.C. past due loan payments, overpayments, Treasury. The agency holding the 552a(b)(12) may be made from this fines, interest, penalties, administrative payment subject to offset will use the system to ‘consumer reporting agencies’ fees, and amounts derived from indebtedness information for collection as defined in the Fair Credit Reporting damages, leases, and sales of real or purposes after counseling the debtor. Act (15 U.S.C. 1681a(f)) or the Federal personal property. The collection may be accomplished Claims Collection Act of 1966 (31 U.S.C. To implement the salary offset either voluntarily or involuntarily by 3701(a)(3)). The purpose of this provisions of 5 U.S.C. 5514, the initiating administrative or salary offset disclosure is to aid in the collection of administrative offset provisions of 31 procedures under the provisions of the outstanding debts owed to the Federal U.S.C. 3711 and 3716–3718, and the Debt Collection Act of 1982 (Pub. L. 97– government, typically to provide an provisions of the Federal Claims 365, as amended by Pub. L. 104–134, incentive for debtors to repay Collection Standards (31 CFR parts 900– the Debt Collection Improvement Act of delinquent Federal government debts by 904), that apply to personal debts. 1996). making these debts part of their credit To permit collection of delinquent To the U.S. Department of Treasury records. claims and debts owed to the U.S. (DOT) for centralized administrative or The disclosure is limited to Government under any program or salary offset, including the offset of information necessary to establish the service administered by any creditor Federal income tax refunds, for the identity of the individual, including DoD Component. purpose of collecting debts owed the name, address, and taxpayer To determine the validity of waivers U.S. Government; to the DOT contracted identification number (Social Security or to make referrals to the Defense private collection agencies for the Number); the amount, status, and Office of Hearings and Appeals (DOHA). purpose of obtaining collection services, history of the claim; and the agency or To maintain records of investigations including administrative wage program under which the claim arose conducted for the purpose of garnishment (AWG) in accordance with for the sole purpose of allowing the
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consumer reporting agency to prepare a The individuals should furnish their within the purview of subsection (r) of commercial credit report. name, Social Security Numbers, and the Privacy Act of 1974, (5 U.S.C. 552a), reasonably describe the information as amended, which requires the POLICIES AND PRACTICES FOR STORING, they are seeking. submission of a new or altered system RETRIEVING, ACCESSING, RETAINING, AND report. DISPOSING OF RECORDS IN THE SYSTEM: CONTESTING RECORD PROCEDURES: Dated: June 21, 2002. STORAGE: The DFAS rules for accessing records, Patricia L. Toppings, Records are maintained on computer for contesting contents and appealing disks, magnetic tape, microfiche, and initial agency determinations are Alternate OSD Federal Register Liaison Officer, Department of Defense. paper file folders. published in DFAS Regulation 5400.11– R; 32 CFR part 324; or may be obtained F044 AFSG B RETRIEVABILITY: from the Privacy Act Officer at any Retrieved by name, Taxpayer DFAS Center. SYSTEM NAME: Identification Number, other Bioenvironmental Engineer Personnel RECORD SOURCE CATEGORIES: identification number or system Career Information System (June 11, identifier, or name of accountable Records are obtained from the debtor, 1997, 62 FR 31793). disbursing office in whose custody the DFAS centers, other DoD organizations, Reason: Information is now public funds were entrusted when the and agencies of Federal, state, and local maintained under the system of records debt arose. governments, as applicable or F036 AF PC C, Military Personnel appropriate for processing the case. Records System. Therefore, this notice SAFEGUARDS: is obsolete. Records are accessed by the custodian EXEMPTIONS CLAIMED FOR THE SYSTEM: of the record system and by personnel None. F044 AF SG P responsible for servicing the record [FR Doc. 02–16188 Filed 6–26–02; 8:45 am] SYSTEM NAME: system in performance of their official BILLING CODE 5001–08–P duties. Records are stored in locked Nursing Skill Inventory (June 11, cabinets or rooms, or in guarded 1997, 62 FR 31793). buildings. DEPARTMENT OF DEFENSE Reason: Records no longer maintained because the requirement was cancelled. RETENTION AND DISPOSAL: Department of the Air Force All cases will remain active until F065 AF SG A Privacy Act of 1974; System of settled by full payment, waiver, write- SYSTEM NAME: off, or close out. The system contains Records Control Logs (June 11, 1997, 62 FR records requiring a retention period of AGENCY: Department of the Air Force, 31793). up to 10 years after final action. Records DoD. Reason: Records no longer exist are retired to National Records Centers. ACTION: Notice to delete Systems of because requirement was cancelled. Destruction is accomplished by tearing, Records. shredding, pulping, macerating, or F031 497IG C burning. SUMMARY: The Department of the Air SYSTEM NAME: SYSTEM MANAGER(S) AND ADDRESS: Force is deleting four systems of records notices in its existing inventory of Security File for Foreign Intelligence Chief, Debt Management Systems record systems subject to the Privacy Collection (June 11, 1997, 62 FR 31793). Division, Directorate of Debt and Claims Act of 1974, (5 U.S.C. 552a), as Reason: Records no longer exist; Management, Defense Finance and amended. organization deactivated. Accounting Service—Denver Site, 6760 [FR Doc. 02–16187 Filed 6–26–02; 8:45 am] East Irvington Place, Denver, CO 80279– DATES: This proposed action would be 8000. effective without further notice on July BILLING CODE 5001–08–P 29, 2002, unless comments are received NOTIFICATION PROCEDURE: which result in a contrary Individuals seeking to determine determination. DEPARTMENT OF EDUCATION whether information about themselves ADDRESSES: Send comments to the Air is contained in this system should Notice of Proposed Information Force Privacy Act Manager, Office of the Collection Requests address written inquiries to the Defense Chief Information Officer, AF–CIO/P, Finance and Accounting Service— 1155 Air Force Pentagon, Washington, AGENCY: Department of Education. Denver Site, DFAS–GA/DE, 6760 East DC 20330–1155. SUMMARY: The Leader, Regulatory Irvington Place, Denver, CO 80279– FOR FURTHER INFORMATION CONTACT: Information Management Group, Office 8000. Mrs. Anne Rollins at (703) 601–4043. of the Chief Information Officer, invites The individuals should furnish their comments on the proposed information name, Social Security Number, and SUPPLEMENTARY INFORMATION: The Department of the Air Force systems of collection requests as required by the reasonably describe the information Paperwork Reduction Act of 1995. they are seeking. records notices subject to the Privacy Act of 1974, (5 U.S.C. 552a), as DATES: Interested persons are invited to RECORD ACCESS PROCEDURES: amended, have been published in the submit comments on or before August Individuals seeking access to Federal Register and are available from 26, 2002. information about themselves contained the address above. SUPPLEMENTARY INFORMATION: Section in this system of records should address The specific changes to the records 3506 of the Paperwork Reduction Act of written inquiries to the Defense Finance systems being amended are set forth 1995 (44 U.S.C. Chapter 35) requires and Accounting Service—Denver Site, below followed by the notices, as that the Office of Management and DFAS–GA/DE, 6760 East Irvington amended, published in their entirety. Budget (OMB) provide interested Place, Denver, CO 80279–8000. The proposed amendments are not Federal agencies and the public an early
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opportunity to comment on information the HEA. The institution must submit information collection, click on collection requests. OMB may amend or the form (1) initially when it first seeks ‘‘Download Attachments’’ to view. waive the requirement for public to become eligible for the Title IV Written requests for information should consultation to the extent that public programs; (2) when its program be addressed to Vivian Reese, participation in the approval process participation agreement expires Department of Education, 400 Maryland would defeat the purpose of the (recertification); (3) when it changes Avenue, SW, Room 4050, Regional information collection, violate State or ownership, merges, or changes from Office Building 3, Washington, DC Federal law, or substantially interfere structure; (4) to be reinstated in the Title 20202–4651 or to the e-mail address with any agency’s ability to perform its IV programs; (5) to notify the [email protected]. Requests may also statutory obligations. The Leader, Department when it makes certain be electronically mailed to the Internet Regulatory Information Management changes, e.g., name or address; and (5) address [email protected] or faxed to Group, Office of the Chief Information if it wishes to have a new program 202–708–9346. Please specify the Officer, publishes that notice containing (outside its current scope) or new complete title of the information proposed information collection location approved for Title IV purposes. collection when making your request. requests prior to submission of these Requests for copies of the proposed Comments regarding burden and/or requests to OMB. Each proposed information collection request may be the collection activity requirements information collection, grouped by accessed from http://edicsweb.ed.gov, should be directed to Joe Schubart at office, contains the following: (1) Type by selecting the ‘‘Browse Pending (202) 708–9266. Individuals who use a of review requested, e.g., new, revision, Collections’’ link and by clicking on telecommunications device for the deaf extension, existing or reinstatement; (2) link number 2048. When you access the (TDD) may call the Federal Information title; (3) summary of the collection; (4) information collection, click on Relay Service (FIRS) at 1–800–877– description of the need for, and ‘‘Download Attachments’’ to view. 9339. proposed use of, the information; (5) Written requests for information should [FR Doc. 02–16197 Filed 6–26–02; 8:45 am] be addressed to Vivian Reese, respondents and frequency of BILLING CODE 4000–01–M collection; and (6) reporting and/or Department of Education, 400 Maryland recordkeeping burden. OMB invites Avenue, SW, Room 4050, Regional public comment. The Department of Office Building 3, Washington, DC DEPARTMENT OF EDUCATION Education is especially interested in 20202–4651 or to the e-mail address public comment addressing the [email protected]. Requests may also Submission for OMB Review; following issues: (1) Is this collection be electronically mailed to the Internet Comment Request necessary to the proper functions of the address [email protected] or faxed to AGENCY: Department of Education. Department; (2) will this information be 202–708–9346. Please specify the processed and used in a timely manner; complete title of the information SUMMARY: The Leader, Regulatory (3) is the estimate of burden accurate; collection when making your request. Information Management Group, Office (4) how might the Department enhance Comments regarding burden and/or of the Chief Information Officer invites the quality, utility, and clarity of the the collection activity requirements comments on the submission for OMB information to be collected; and (5) how should be directed to Joe Schubart at review as required by the Paperwork might the Department minimize the (202) 708–9266. Individuals who use a Reduction Act of 1995. burden of this collection on the telecommunications device for the deaf DATES: Interested persons are invited to respondents, including through the use (TDD) may call the Federal Information submit comments on or before July 29, of information technology. Relay Service (FIRS) at 1–800–877– 2002. 8339. ADDRESSES: Dated: June 21, 2002. Written comments should be addressed to the Office of John Tressler, Federal Student Aid Information and Regulatory Affairs, Leader, Regulatory Information Management, Type of Review: New Collection. Attention: Karen Lee, Acting Desk Office of the Chief Information Officer. Title: Federal Family Education Loan, Officer, Department of Education, Office Federal Student Aid Direct Loan and Perkins Loan Total of Management and Budget, 725 17th Permanent Disability Discharge Form Street, NW., Room 10235, New Type of Review: Extension of a (JS). currently approved collection. Executive Office Building, Washington, Frequency: Other: One time. DC 20503 or should be electronically Title: Application for Approval to Affected Public: Businesses or other Participate in Federal Student Financial mailed to the internet address for-profit (primary); Individuals or [email protected]. Aid Programs. household. Frequency: On Occasion Other: Prior Reporting and Recordkeeping Hour SUPPLEMENTARY INFORMATION: Section to expiration of eligibility. Burden: 3506 of the Paperwork Reduction Act of Affected Public: Businesses or other Responses: 15000. 1995 (44 U.S.C. chapter 35) requires that for-profit; not-for-profit institutions. Burden Hours: 7500. the Office of Management and Budget Reporting and Recordkeeping Hour Abstract: This form will serve as the (OMB) provide interested Federal Burden: means of collecting the information to agencies and the public an early Responses: 2970. determine whether a FFEL, Direct Loan, opportunity to comment on information Burden Hours: 20830. or Perkins Loan borrower qualifies for a collection requests. OMB may amend or Abstract: The Higher Education Act of conditional discharge of their loan due waive the requirement for public 1965, as amended requires to total and permanent disability. consultation to the extent that public postsecondary institutions to complete Requests for copies of the proposed participation in the approval process and submit this application as a information collection request may be would defeat the purpose of the condition of eligibility for any of the accessed from http://edicsweb.ed.gov, information collection, violate State or Title IV student financial assistance by selecting the ‘‘Browse Pending Federal law, or substantially interfere programs and for the other Collections’’ link and clicking on link with any agency’s ability to perform its postsecondary programs authorized by number 2043. When you access the statutory obligations. The Leader,
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Regulatory Information Management Requests for copies of the submission 2002 Elementary and Secondary Civil Group, Office of the Chief Information for OMB review; comment request may Rights Compliance Report was Officer, publishes that notice containing be accessed from http:// published in the Federal Register. That proposed information collection ediscweb.ed.gov, by selecting the proposed data collection included three requests prior to submission of these ‘‘Browse Pending Collections’’ link and new tables regarding the collection of requests to OMB. Each proposed by clicking on link number 2001. When student performance assessment data. information collection, grouped by you access the information collection, The Department is no longer proposing office, contains the following: (1) Type click on ‘‘Download Attachments’’ to to collect this data as part of the 2002 of review requested, e.g. new, revision, view. Written requests for information Elementary and Secondary Civil Rights extension, existing or reinstatement; (2) should be addressed to Vivian Reese, Compliance Report which has been Title; (3) Summary of the collection; (4) Department of Education, 400 Maryland revised accordingly. Description of the need for, and Avenue, SW., Room 4050, Regional Requests for copies of the submissions proposed use of, the information; (5) Office Building 3, Washington, DC for OMB review; comment request may Respondents and frequency of 20202–4651 or to the e-mail address be accessed from http:// collection; and (6) Reporting and/or [email protected]. Requests may also edicsweb.ed.gov, by selecting the Recordkeeping burden. OMB invites be electronically mailed to the internet ‘‘Browse Pending Collections’’ link and public comment. address [email protected] or faxed to by clicking on link number 1902. When Dated: June 21, 2002. 202–708–9346. Please specify the you access the information collection, click on ‘‘Download Attachments’’ to John D. Tressler, complete title of this information collection when making your request. view. Written requests for information Leader, Regulatory Information Management, Comments regarding burden and/or should be addressed to Vivian Reese, Office of the Chief Information Officer. the collection activity requirements be Department of Education, 400 Maryland Office of Educational Research and directed to Kathy Axt at her internet Avenue, SW., Room 4050, Regional Improvement address [email protected]. Individuals Office Building 3, Washington, DC Type of Review: Reinstatement, with who use a telecommunications device 20202–4651 or to the e-mail address change, of a previously approved for the deaf (TDD) may call the Federal [email protected]. Requests may also collection for which approval has Information Relay Service (FIRS) at 1– be electronically mailed to the internet _ expired. 800–877–8339. address OCIO [email protected] or faxed to 202–708–9346. Please specify the Title: 2004 National Survey of Office of Civil Rights Postsectondary Faculty (NSOPF:04): List complete title of the information Type of Review: Reinstatement. Collection Procedures and Institution collection when making your request. Title: 2002 Elementary and Secondary Comments regarding burden and/or Questionnaire (KA). School Survey (also referred to as the Frequency: Other: One time. the collection activity requirements Elementary and Secondary School Civil should be directed to Jacqueline Affected Public: Not-for-profit Rights Compliance Report). institutions (primary). Montague at her internet address Frequency: Biennially. [email protected]. Individuals Reporting and Recordkeeping Hour Affected Public: State, local, or tribal Burden: who use a telecommunications device gov’t; SEAs or LEAs. for the deaf (TDD) may call the Federal Response: 100. Reporting and Recordkeeping Hour Burden Hours: 446. Information Relay Service (FIRS) at 1– Burden: 800–877–8339. Abstract: The fourth cycle of the Responses: 33,000. NSOPF is being conducted in response Burden Hours: 337,500. [FR Doc. 02–16196 Filed 6–26–02; 8:45 am] to a continuing need for data on faculty Abstract: The Elementary and BILLING CODE 4000–01–M and instructors. The study will provide Secondary School Survey (E&S Survey) information about faculty in is a biennial survey which collects data postsecondary institutions, which is key from schools and school districts on DEPARTMENT OF EDUCATION to learning about the quality of issues of interest to the Office for Civil [CFDA No.: 84.206A] education and research in these Rights, U.S. Department of Education. institutions. This study will expand the The E&S Survey is the instrument used Office of Elementary and Secondary information about faculty and by OCR to obtain trend data regarding Education instructional staff in two ways: allowing the nation’s public elementary and comparisons to be made over time and secondary schools. Data from the survey Jacob K. Javits Gifted and Talented examining critical issues surrounding is used by social scientists conducting Students Education Program; Notice faculty that have developed since the research on discrimination, and by civil Inviting Applications for New Awards first three studies. This clearance rights and other groups monitoring for Fiscal Year (FY) 2002; Correction request covers field test and full scale issues related to their programs. The On May 24, 2002, we published a activities for the first phase of the survey collects data related to Title VI notice in the Federal Register (67 FR study—collection of lists of current of the Civil Rights Act of 1964 (which 36583 through 36586) inviting faculty an instructors from sampled prohibits discrimination on the basis of applications for new awards for the postsecondary institutions and a race, color, or national origin), Title IX Jacob K. Javits Gifted and Talented questionnaire to be completed by of the Education Amendments of 1972 Students Education Program, with a institution administrative officials to (which prohibits discrimination on the Deadline for Intergovernmental Review provide information about the context of basis of sex) and Section 504 of the Date of June 24, 2002. The Deadline for the institution, such as hiring and Rehabilitation Act of 1973 (which Intergovernmental Review Date of ‘‘June promotion practices, policies on prohibits discrimination on the basis of 24, 2002’’ is corrected to read ‘‘August benefits, tenure, workload, etc. A handicap). 7, 2002’’. second clearance request will be On January 17, 2002 a Notice of FOR APPLICATIONS AND FURTHER submitted shortly covering the faculty Proposed Information Collection and INFORMATION CONTACT: Emily McAdams, survey materials. request for public comment for the Fall U.S. Department of Education, Room
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5W252, 400 Maryland Avenue, SW, When and Where Will the Meeting What Items Will Be on the Agenda for Washington, DC 20202. Telephone: Take Place? Discussion at the Meeting? (202) 260–8753 or the following e-mail The National Committee on Foreign or Internet address: We will hold the public meeting on Medical Education and Accreditation [email protected] September 5, 2002 beginning at 9 a.m. in Mt. Vernon Room at The Wyndham will review the standards of If you use a telecommunications City Center Hotel, 1143 New Hampshire accreditation applied to medical schools device for the deaf (TDD), you may call Avenue, NW, Washington, DC 20037. by several foreign countries to the Federal Information Relay service You may call the hotel at (202) 775– determine whether those standards are (FIRS) at 1–80–877.8339. comparable to the standards of 0800 or fax the hotel at (202) 887–9171 accreditation applied to medical schools Individuals with disabilities may to inquire about room accommodations. obtain this document in an alternative in the United States. Discussions of the format (e.g., Braille, large print, What Assistance Will Be Provided to standards of accreditation will be held audiotape, or computer diskette) on Individuals With Disabilities? in sessions open to the public. request to the contact person listed. Discussions that focus on specific The meeting site is accessible to determinations of comparability are Electronic Access to This Document individuals with disabilities. If you will closed to the public in order that each You may view this document, as well need an auxiliary aid or service to country may be properly notified of the as all other Department of Education participate in the meeting (e.g., decision. The countries tentatively documents published in the Federal interpreting service, assistive listening scheduled to be discussed at the Register, in text or Adobe Portable device, or materials in an alternate meeting include Belize, Costa Rica, Document Format (PDF) on the Internet format) notify the contact person listed Dominican Republic, Israel, Mexico, the at the following site: www.ed.gov/ in this notice at least two weeks before Philippines, Poland, St. Lucia, St. legislation/FedRegister the scheduled meeting date. Although Maarten, Sweden, and the United To use PDF you must have the Adobe we will attempt to meet a request Kingdom. Beginning August 22, you Acrobat Reader, which is available free received after that date, we may not be may call the contact person listed above at this site. If you have questions about able to make available the requested to obtain the final listing of the using PDF, call the U.S. Government auxiliary aid or service because of countries whose standards will be Printing Office (GPO) toll free, at 1–888– insufficient time to arrange it. discussed during this meeting. The listing of countries will also be posted 293–6498; or in the Washington, DC Who Is the Contact Person for the area at (202) 512–1530. on the Department of Education’s Web Meeting? site at the following address: http:// Note: The official version of this document www.ed.gov/offices/OPE/accreditation/ Please contact Ms. Bonnie LeBold, the is the document published in the Federal ncfmeetings.html. Register. Free Internet access to the official Executive Director of the National edition of the Federal Register and the Code Committee on Foreign Medical How May I Obtain Electronic Access to of Federal Regulations is available on GPO Education and Accreditation, if you This Document? Access at: http://www.access.gpo.gov/nara/ have questions about the meeting. You index/html. You may view this document, as well may contact her at the U.S. Department as all other Department of Education of Education, room 7007, MS 7563, 1990 Program Authority: 20 U.S.C. 7253 et seq. documents published in the Federal K St. NW., Washington, DC 20006, Register, in text or Adobe Portable Dated: June 24, 2002. telephone: (202) 219–7009, fax: (202) Document Format (PDF) on the Internet Susan B. Neuman, 219–7008, e-mail: at the following site: http://www.ed.gov/ Assistant Secretary for Elementary and [email protected]. legislation/FedRegister. Secondary Education. Individuals who use a To use PDF you must have Adobe [FR Doc. 02–16344 Filed 6–26–02; 8:45 am] telecommunications device for the deaf Acrobat Reader, which is available free BILLING CODE 4000–01–P (TDD) may call the Federal Information at this site. If you have questions about Relay Service at 1–800–877–8339. using PDF, call the U.S. Government Printing Office (GPO), toll free, at 1– DEPARTMENT OF EDUCATION What Are the Functions of the National 888–293–6498; or in the Washington, Committee? National Committee on Foreign DC, area at (202) 512–1530. Medical Education and Accreditation; The National Committee on Foreign Note: The official version of this document Meeting Medical Education and Accreditation is the document published in the Federal was established by the Secretary of Register. Free Internet access to the official AGENCY: National Committee on Foreign Education under section 102 of the edition of the Federal Register and the Code Medical Education and Accreditation, Higher Education Act of 1965, as of Federal Regulations is available on GPO Access at: http://www.access.gpo.gov/nara/ Department of Education. amended. The Committee’s index.html. What Is the Purpose of This Notice? responsibilities are to: • Authority: 5 U.S.C. Appendix 2. The purpose of this notice is to Evaluate the standards of announce the upcoming meeting of the accreditation applied to applicant Dated: June 20, 2002. National Committee on Foreign Medical foreign medical schools; and Sally L. Stroup, Education and Accreditation. Parts of • Determine the comparability of Assistant Secretary for Postsecondary this meeting will be open to the public, those standards to standards for Education. and the public is invited to attend those accreditation applied to United States [FR Doc. 02–16233 Filed 6–26–02; 8:45 am] portions. medical schools. BILLING CODE 4000–01–P
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DEPARTMENT OF ENERGY National Nuclear Security disposition of the seven permanent Administration, Albuquerque Field structures located within the boundaries Office of Los Alamos Site Operations, Office, Pennsylvania and H Street, of LANL is the subject of a separate National Nuclear Security Kirtland Air Force Base, Albuquerque, NEPA Environmental Assessment (EA). Administration; Notice of Floodplain NM 87116. Telephone (505) 845–6100, NNSA’s proposed disposition action for Involvement for the Proposed Future facsimile (505) 284–7107. these seven structures is to partially Disposition of Certain Cerro Grande For Further Information on General breach the above ground portions of the Fire Flood and Sediment Retention DOE Floodplain Environmental Review flood retention structure in Pajarito Structures at Los Alamos National Requirements, contact: Carol M. Canyon, remove the above ground Laboratory, Los Alamos, NM Borgstrom, Director, Office of NEPA portions of the steel flood diversion wall AGENCY: National Nuclear Security Policy and Compliance, EH–42, in Pajarito Canyon, and retain the Administration, Office of Los Alamos Department of Energy, 100 remaining five structures intact and Site Operations, DOE. Independence Avenue, SW., continue to routinely maintain these Washington DC 20585–0119. Telephone ACTION: Notice of floodplain structures into the foreseeable future (202) 586–4600 or (800) 472–2756, involvement. (which is defined for the purposes of facsimile (202) 586–7031. this proposal as being the next ten SUMMARY: The Department of Energy SUPPLEMENTARY INFORMATION: NNSA years). Routine maintenance of these (DOE), National Nuclear Security constructed several permanent flood structures may include accumulated Administration (NNSA), Office of Los and sediment retention structures sediment removal. Other alternatives Alamos Site Operations proposes to within various canyons across LANL considered are the No Action demolish the above ground portions of during the four months immediately Alternative (consisting of the retention two structures built to retain or divert following the devastating Cerro Grande of all the structures intact with on-going flood waters at Los Alamos National Fire that occurred in mid-2000. These continuation of routine maintenance) Laboratory (LANL) and retain five structures and their locations are as and the Disassembly of All Structures others intact with continuing follows: Alternative (consisting of the demolition maintenance, which could include • A substantial concrete flood of all above ground portions of all the periodic sediment removal actions; retention structure and a steel flood subject structures). these structures were constructed in the diversion wall were built within Pajarito wake of the Cerro Grande Fire in 2000 Canyon; In accordance with DOE regulations as emergency actions to address post • A low-head rock gabion weir for compliance with floodplain and fire danger to LANL facilities from together with a sediment detention wetlands environmental review floods and sediment movement. All of basin were built in Los Alamos Canyon; requirements (10 CFR part 1022), NNSA these structures are located in • Four concrete road reinforcement has also prepared a floodplain/wetland floodplains; one structure that is being areas were built along State Road 501 assessment for this action, which is part proposed for remaining intact, the Los and Anchor Ranch Road at their of the NEPA draft EA. The draft EA Alamos Canyon gabion weir, is crossings of Two-Mile, Pajarito and (containing the floodplain/wetland associated with an area that might Water Canyons; and assessment) is available by contacting develop into a wetland. In accordance • Reinforcements were made to the Elizabeth Withers at the previously with 10 CFR part 1022, DOE has Los Alamos Canyon Reservoir near the identified addresses, phone and prepared a floodplain/wetland head of Los Alamos Canyon [note: the facsimile numbers. The draft EA assessment and will perform this Reservoir is located on property (containing the floodplain/wetland proposed action in a manner so as to administered by the U.S. Department of assessment) is also available for review avoid or minimize potential harm to or Agriculture, Forest Service, Santa Fe at the DOE Reading Room at the Los within the affected floodplain. National Forest and is not subject to Alamos Outreach Center, 1619 Central DATES: Comments are due to the address DOE’s current proposal]. Avenue, Los Alamos, NM 878544; and below no later than July 12, 2002. These structures, along with other the DOE Reading Room at the ADDRESSES: Written comments should various actions and activities taken to Zimmerman Library, University of New be addressed to: Elizabeth Withers, extinguish the fire and as recovery Mexico, Albuquerque, NM 87131. The Department of Energy, National Nuclear actions in the wake of the fire were NNSA will publish a floodplain Security Administration, Los Alamos subject to the emergency provisions of statement of findings for this project in Area Office, 528 35th Street, Los the National Environmental Policy Act the Federal Register no sooner than July Alamos, NM 87544, or submit them to (NEPA); a Special Environmental 12, 2002. the Mail Room at the above address Analysis (DOE/SEA–03) was prepared between the hours of 8 a.m. and 4:30 to analyze the impacts of the actions Issued in Los Alamos, NM, on June 20, p.m., Monday through Friday. Written taken by NNSA rather than normal 2002. comments may also be sent NEPA documents. However, the E. Dennis Martinez, electronically to: [email protected] or ultimate disposition of these permanent Acting Director, U.S. Department of Energy, by facsimile to (505) 667–9998. structures was not identified and National Nuclear Security Administration, FOR FURTHER INFORMATION CONTACT: analyzed in the Special Environmental Office of Los Alamos Site Operations. Karen Agogino, Department of Energy, Analysis issued in September 2000. The BILLING CODE 6450–01–P
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[FR Doc. 02–16240 Filed 6–26–02; 8:45 am] wetland assessment and will perform would be located at the bottom of Los BILLING CODE 6450–01–C this proposed action in a manner so as Alamos Canyon parallel to an to avoid or minimize potential harm to intermittent stream and along an or within the affected floodplain. existing electric power line. Stream DEPARTMENT OF ENERGY DATES: Comments are due to the address crossings would be accomplished by below no later than July 12, 2002. tunneling under the streambed to avoid National Nuclear Security wetland areas. Portions of the gas line Administration, Office of Los Alamos ADDRESSES: Written comments should construction would occur in the 100- Site Operations; Notice of Floodplain be addressed to: Elizabeth Withers, Involvement for the Construction and Department of Energy, National Nuclear year floodplain. The floodplain/ Operation of a 12-inch Natural Gas Security Administration, Office of Los wetlands assessment will discuss Pipeline in Los Alamos Canyon at Los Alamos Site Operations, 528 35th Street, engineering best management practices Alamos National Laboratory, Los Los Alamos, NM 87544, or submit them that will be implemented to control Alamos, NM to the Mail Room at the above address erosion and sedimentation from the between the hours of 8 a.m. and 4:30 construction activities. Construction of AGENCY: National Nuclear Security p.m., Monday through Friday. Written the gas pipeline would begin in the Administration, Office of Los Alamos comments may also be sent spring of 2003 and be completed in Site Operations, Department of Energy. electronically to: [email protected] or approximately six months. ACTION: Notice of floodplain by facsimile to (505) 667–9998. In accordance with DOE regulations involvement. FOR FURTHER INFORMATION CONTACT: for compliance with floodplain and SUMMARY: The National Nuclear Milton West, Department of Energy, wetlands environmental review Security Administration (NNSA), Office National Nuclear Security requirements (10 CFR part 1022), NNSA of Los Alamos Site Operations at the Administration, Albuquerque has prepared a floodplain/wetland Department of Energy (DOE), plans to Operations Office, P.O. Box 5400, assessment for this action, which is grant an easement to the Public Service Building 388, Albuquerque, New available by contacting Elizabeth Company of New Mexico (PNM) to Mexico 87185–5400. Telephone (505) Withers at the previously identified construct, operate, and maintain a 845–4452, facsimile (505) 284–7191. addresses, phone and facsimile 15,000 foot, 12-inch diameter natural For further information on General numbers. The floodplain/wetland gas transmission line on DOE-owned DOE Floodplain Environmental Review assessment is available for review at the land at Los Alamos National Laboratory Requirements, contact: Carol M. DOE Reading Room at the Los Alamos (LANL). The new gas line would begin Borgstrom, Director, Office of NEPA Outreach Center, 1619 Central Avenue, at an existing valve station at the bottom Policy and Compliance, EH–42, Los Alamos, NM 87544; and the DOE of Los Alamos Canyon, cross under the Department of Energy, 1000 Reading Room at the Zimmerman streambed to avoid encroaching on Independence Avenue, SW., Library, University of New Mexico, wetlands, and continue upstream for Washington DC 20585–0119. Telephone Albuquerque, NM 87131. The NNSA about two miles. The gas line would (202) 586–4600 or (800) 472–2756, will publish a floodplain statement of then cross back under the stream to facsimile (202) 586–7031. findings for this project in the Federal connect with an existing gas line. The SUPPLEMENTARY INFORMATION: In August Register no sooner than July 12, 2002. proposed easement would be 50 feet 2001, NNSA considered a proposal for wide and would parallel an existing constructing a new 12-inch natural gas Issued in Los Alamos, NM, on June 20, electric power line. Portions of the gas pipeline to provide additional natural 2002. line will be constructed in the 100-year gas capacity to Los Alamos County and E. Dennis Martinez, floodplain of Los Alamos Canyon, as LANL. A 50-foot right-of-way would be Acting Director, U. S. Department of Energy, identified in the location map. cleared along the length of the easement National Nuclear Security Administration, In accordance with 10 CFR part 1022, to facilitate construction and operation Office of Los Alamos Site Operations. NNSA has prepared a floodplain/ of the gas line. The proposed project BILLING CODE 6450–01–P
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[FR Doc. 02–16241 Filed 6–26–02; 8:45 am] wishing to make public comment will Policy Act (NGPA), all as more fully set BILLING CODE 6450–01–C be provided a maximum of five minutes forth in the application which is on file to present their comments at the end of with the Commission and open to the meeting. public inspection. Copies of this filing DEPARTMENT OF ENERGY Minutes: Minutes of this meeting will are on file with the Commission and are be available for public review and available for public inspection. This Environmental Management Site- copying at the Department of Energy’s filing may be viewed on the web at Specific Advisory Board, Oak Ridge Information Resource Center at 105 http://www.ferc.gov using the ‘‘RIMS’’ Reservation Broadway, Oak Ridge, TN between 7:30 link, select ‘‘Docket #’’ from the RIMS AGENCY: Department of Energy. a.m. and 5:30 p.m. Monday through Menu and follow the instructions (call Friday, or by writing to Pat Halsey, (202) 208–2222 for assistance). ACTION: Notice of open meeting. Department of Energy Oak Ridge MDU requests a service area SUMMARY: This notice announces a Operations Office, P.O. Box 2001, EM– determination for the area it serves in meeting of the Environmental 922, Oak Ridge, TN 37831, or by calling Otter Tail and Wilkin Counties, Management Site-Specific Advisory her at (865) 576–4025. Minnesota, and Richland County, North Board (EM SSAB), Oak Ridge. The Issued at Washington, DC on June 20, 2002. Dakota in order to be able to enlarge or Federal Advisory Committee Act (Pub. Belinda G. Hood, extend its facilities for the purpose of L. 92–463, 86 Stat. 770) requires that Acting Deputy Advisory Committee supplying increased market demands public notice of these meetings be Management Officer. without the need to apply to the announced in the Federal Register. [FR Doc. 02–16242 Filed 6–26–02; 8:45 am] Commission for further authorization. MDU also requests a declaration that it DATES: Wednesday, July 10, 2002, 6 BILLING CODE 6450–01–P p.m.–9:30 p.m. qualifies as an LDC in the service area to be determined for the purposes of ADDRESSES: DOE Information Center, section 311 of the NGPA. In addition, 475 Oak Ridge Turnpike, Oak Ridge, DEPARTMENT OF ENERGY MDU requests a waiver of the regulatory TN. Federal Energy Regulatory requirements ordinarily applicable to FOR FURTHER INFORMATION CONTACT: Pat Commission natural gas companies under the NGA Halsey, Federal Coordinator, and the NGPA. It is asserted that MDU’s Department of Energy Oak Ridge [Docket Nos. CP97–319–004 and CP97–315– 006] operations are almost entirely in Operations Office, P.O. Box 2001, EM– intrastate commerce, with the exception 922, Oak Ridge, TN 37831. Phone (865) ANR Pipeline Company, Independence of a small portion extending across the 576–4025; Fax (865) 576–5333 or E- Pipeline Company; Errata Notice Minnesota-North Dakota border in order mail: [email protected]. to serve the Richland County market. It SUPPLEMENTARY INFORMATION: Purpose of June 19, 2002. is stated that MDU’s services and rates the Board: The purpose of the Board is On June 19, 2002, the Commission are regulated by the Minnesota Public to make recommendations to the issued a notice of its June 26, 2002 Utilities Commission and the North Department of Energy and its regulators meeting. Item No. C–8 lists ‘‘Docket No. Dakota Public Service Commission. in the areas of environmental CP97–319–004, ANR Pipeline Any questions regarding this restoration, waste management, and Company’’. Item No. C–8 should also amendment should be directed to related activities. include Docket No. CP97–315–006, Douglas W. Schultz, Senior Attorney, Tentative Agenda: Independence Pipeline Company. MDU Resources Group, Inc., at (701) 1. A presentation on the Oak Ridge Magalie R. Salas, 222–7613. Reservation Land Use Planning Process Secretary. There are two ways to become will be provided by Ms. Pat Parr, Project [FR Doc. 02–16151 Filed 6–26–02; 8:45 am] involved in the Commission’s review of Manager, Oak Ridge National this project. First, any person wishing to Laboratory. BILLING CODE 6717–01–P obtain legal status by becoming a party 2. Comments from the Deputy to the proceedings for this project Designated Federal Official and Ex- DEPARTMENT OF ENERGY should, on or before July 12, 2002, file officio with the Federal Energy Regulatory 3. Motions and recommendations for Federal Energy Regulatory Commission, 888 First Street, NE, consideration for Board approval. Commission Washington, DC 20426, a motion to 4. Public comment period intervene in accordance with the Public Participation: The meeting is [Docket No. CP02–386–000] requirements of the Commission’s Rules open to the public. Written statements MDU Resources Group, Inc.; Notice of of Practice and Procedure (18 CFR may be filed with the Committee either Application 385.214 or 385.211) and the Regulations before or after the meeting. Individuals under the NGA (18 CFR 157.10). A who wish to make oral statements June 21, 2002. person obtaining party status will be pertaining to agenda items should Take notice that on June 12, 2002, placed on the service list maintained by contact Pat Halsey at the address or MDU Resources Group, Inc.(MDU), 918 the Secretary of the Commission and telephone number listed above. East Divide Avenue, Bismarck, North will receive copies of all documents Requests must be received five days Dakota 58506, filed in Docket No. CP02– filed by the applicant and by all other prior to the meeting and reasonable 386–000 , an application pursuant to parties. A party must submit 14 copies provision will be made to include the Section 7(f) of the Natural Gas Act of filings made with the Commission presentation in the agenda. The Deputy (NGA) for a determination of a service and must mail a copy to the applicant Designated Federal Officer is area, a declaration that MDU qualifies as and to every other party in the empowered to conduct the meeting in a a local distribution company (LDC) and proceeding. Only parties to the fashion that will facilitate the orderly a waiver of the regulatory requirements proceeding can ask for court review of conduct of business. Each individual under the NGA and the Natural Gas Commission orders in the proceeding.
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However, a person does not have to Mount Carmel, Pennsylvania. (the Arkansas, Indiana, Kentucky, Louisiana, intervene in order to have comments Facility). Mt. Carmel states that electric Michigan, Ohio, Oklahoma, Tennessee, considered. The second way to energy produced from the Facility will Texas, Virginia and West Virginia. participate is by filing with the be sold by Mt. Carmel to the wholesale Comment Date: July 8, 2002. Secretary of the Commission, as soon as power market in the PJM. 5. BP Energy Company possible, an original and two copies of Comment Date: July 11, 2002. [Docket No. ER00–3614–002] comments in support of or in opposition 2. Carthage Energy, LLC to this project. The Commission will Take notice that on June 17, 2002, BP consider these comments in [Docket No. ER99–2541–003] Energy Company tendered for filing an determining the appropriate action to be Take notice that on June 14, 2002, updated market study in compliance taken, but the filing of a comment alone Carthage Energy LLC (Carthage Energy) with the Commission’s Order in Cleco will not serve to make the filer a party tendered a letter concerning its triennial Trading & Marketing, LLC, et al., 87 to the proceeding. The Commission’s market power review pursuant to an FERC (CCH) ¶ 61, 311 (1999). rules require that persons filing order issued by the Commission in Comment Date: July 8, 2002. comments in opposition to the project Docket No. ER99–2541 on June 17, 1999 6. Southern Company Services, Inc. provide copies of their protests only to granting Carthage Energy market-based the party or parties directly involved in rate authorization. [Docket No. ER02–851–005] the protest. Comment Date: July 8, 2002. Take notice that on May 1, 2002, Southern Company Services, Inc., acting Comments, protests and interventions 3. Cleco Power LLC, Cleco Marketing & as agent for Alabama Power Company, may be filed electronically via the Trading LLC, Cleco Evangeline LLC, Georgia Power Company, Gulf Power Internet in lieu of paper. See, 18 CFR Perryville Energy Partners, L.L.C., Company, Mississippi Power Company, 385.2001(a)(1)(iii) and the instructions Acadia Power Partners LLC on the Commission’s web site under the and Savannah Electric and Power ‘‘e-Filing’’ link. [Docket Nos. ER99–3855–002, ER99–2300– Company (collectively Southern If the Commission decides to set the 004, ER99–2928–001, ER01–1397–002, and Companies) are filing informational data ER 02–1406–001] application for a formal hearing before inputs to the formula rate adopted by an Administrative Law Judge, the Take notice that on June 17, 2002, Southern Companies and thereby Commission will issue another notice Cleco Corporation, on behalf of its establish updated charges for the use of public utility affiliates, Cleco Power describing that process. At the end of their bulk transmission facilities under LLC, Cleco Marketing & Trading LLC, the Commission’s review process, a their Open Access Transmission Tariff, Cleco Evangeline LLC, Perryville Energy final Commission order approving or FERC Electric Tariff, Fourth Revised Partners, L.L.C., and Acadia Power denying a certificate will be issued. Volume No. 5. Partners LLC, tendered for filing a Comment Date: July 11, 2002. Linwood A. Watson, Jr., combined notification of change in 7. Midwest Independent Transmission Deputy Secretary. status and a three-year updated System Operator, Inc. [FR Doc. 02–16248 Filed 6–26–02; 8:45 am] generation market analysis regarding the BILLING CODE 6717–01–P market-based rate schedules approved [Docket No. ER02–1420–002] in the following orders: Cleco Power Take notice that on June 17, 2002, the LLC, October 8, 1996, in Docket No. Southwestern Electric Power Company DEPARTMENT OF ENERGY ER96–2677–000 for Cleco Power’s and Public Service Company of predecessor-in-interest Central Oklahoma, operating companies of the Federal Energy Regulatory Louisiana Electric Company, Inc., Cleco American Electric Power System, filed a Commission Marketing & Trading LLC, 87 FERC letter advising the Federal Energy [Docket No. EG02–156–000, et al.] 62,313 (1999); Cleco Evangeline LLC, 88 Regulatory Commission (Commission) FERC 61,005 (1999); Perryville Energy why it should not be ordered to join the Mt. Camel Cogen, Inc., et al.; Electric Partners, L.L.C., Docket No. ER01–1397– Resulting Company as stated in its Rate and Corporate Regulation Filings 000, issued May 3, 2001; Acadia Power Order Conditionally Accepting Partners LLC, Docket No. ER02–1406– Proposed Tariff Revisions and Revised June 20, 2002. 000, issued May 28, 2002. Agreement and Conforming Regional The following filings have been made Comment Date: July 8, 2002. Transmission Organization Status, 99 with the Commission. The filings are 4. American Electric Power Service FERC ¶ 61,250 (2002). listed in ascending order within each A copy of the filing was served upon Corporation docket classification. the parties on the official Commission [Docket Nos. ER00–2413–007] 1. Mt. Carmel Cogen, Inc. service list in this docket. Take notice that on June 17, 2002, Comment Date: July 8, 2002. [Docket No. EG02–156–000] American Electric Power Service 8. Central Illinois Generation Take notice that on June 18, 2002, Mt. Corporation, on behalf of the operating Carmel Cogen, Inc. (Mt. Carmel), a companies of the American Electric [Docket No. ER02–1688–001] Delaware corporation with its principal Power System (collectively AEP) filed Take notice that on June 14, 2002, place of business in Mount Carmel, proposed amendments to its Open Central Illinois Generation (CIGI) Northumberland County, Pennsylvania, Access Transmission Tariff in tendered for filing with the Federal filed with the Federal Energy Regulatory compliance with the Commission’s May Energy Regulatory Commission Commission (Commission), an 16, 2002 Order in the above-referenced (Commission) additional information to application for determination of exempt dockets. support CIGI’s Application for Market- wholesale generator status pursuant to AEP requests an effective date of June Based Rate Authority, Waivers and Part 365 of the Commission’s 1, 2002 for the proposed amendments. Acceptance of Power Supply and regulations. Copies of AEP’s filing have been served Interconnection Agreements filed on Mt. Carmel owns and operates a 45- upon AEP’s transmission customers and May 1, 2002 in Docket No. ER02–1688– MW power generation facility located in the public service commissions of 000.
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Comment Date: July 5, 2002. 13. Arizona Public Service Company rate tariff, between Orion Power MidWest and Duquesne Light Company. 9. Progress Energy On behalf of [Docket No.ER02–2105–000] Comment Date: July 8, 2002. Carolina Power & Light Company Take notice that on June 17, 2002, [Docket No. ER02–2101–000] Arizona Public Service Company (APS) 18. Florida Power Corporation tendered for filing a Service Agreement [Docket Nos. ER02–2110–000] Take notice that on June 14, 2002, to provide point-to-point transmission Take notice that on June 17, 2002, Carolina Power & Light Company service to Southwest Transmission Florida Power Corporation (FPC) (CP&L) tendered for filing a Service Cooperative, Inc. under APS’’ Open tendered for filing two notices of Agreement for Network Integration Access Transmission Tariff. cancellation and two revised service Transmission Service and a Network A copy of this filing has been served agreement cover sheets (collectively, Operating Agreement with The City of on Southwest Transmission Cancellation Documents) to terminate Seneca, SC. Service to this Eligible Cooperative, Inc. and the Arizona two service agreements that were filed Customer will be in accordance with the Corporation Commission. under previous versions of FPC’s open- terms and conditions of the Open Comment Date: July 8, 2002. Access Transmission Tariff filed on access transmission tariff, FERC Electric behalf of CP&L. 14. Arizona Public Service Company Tariff, Second Revised Volume No. 6. Specifically, FPC is terminating Service CP&L is requesting an effective date of [Docket No. ER02–2106–000] May 16, 2002 for this Service Agreement No. 7 between FPC and Take notice that on June 17, 2002, Tampa Electric Company (TECO), Agreement. A copy of the filing was Arizona Public Service Company (APS) served upon Seneca, the North Carolina providing for Network Integration tendered for filing additions to the Transmission Service, that was filed and Utilities Commission and the South Interconnection and Operating Carolina Public Service Commission. accepted under FPC’s FERC Electric Agreements under its Open Access Tariff, Original Volume No. 6; and Comment Date: July 5, 2002. Transmission Tariff with Panda Gila Service Agreement No. 52 between FPC 10. Progress Energy On behalf of River, L.P. and Seminole Electric Cooperative, Inc. Carolina Power & Light Company A copy of this filing has been served (Seminole), providing for Network on Panda Gila River, L.P., the Western Contract Demand Transmission Service, [Docket No. ER02–2101–000] Electricity Coordinating Council and the that was filed and accepted under FPC’s Take notice that on June 14, 2002, Arizona Corporation Commission. FERC Electric Tariff, First Revised Carolina Power & Light Company Comment Date: July 8, 2002. Volume No. 6. The Cancellation (CP&L) tendered for filing a Service 15. Southern California Edison Documents are being filed because FPC Agreement for Network Integration Company is no longer providing transmission Transmission Service and a Network service under the service agreements. Operating Agreement with The City of [Docket No. ER02–2107–000] FPC respectfully requests that the Seneca, SC. Service to this Eligible Take notice that on June 17, 2002, Cancellation Documents become Customer will be in accordance with the Southern California Edison Company effective as of June 18, 2002, the day terms and conditions of the Open (SCE) filed an amendment to the Firm after filing. Copies of the filing were Access Transmission Tariff filed on Transmission Service Agreement served upon the Florida Public Service behalf of CP&L. (Victorville-Lugo/Midway) between SCE Commission, TECO and Seminole. CP&L is requesting an effective date of and M–S–R Public Power Agency, First Comment Date: July 8, 2002. May 16, 2002 for this Service Revised Rate Schedule FERC No. 339. 19. Public Service Company of New Agreement. A copy of the filing was The amendment amends the rates to be Mexico served upon Seneca, the North Carolina charged to the MSR Public Power Utilities Commission and the South Agency (MSR). A copy of this [Docket No. ER02–2111–000] Carolina Public Service Commission. amendment has been served on MSR Take notice that on June 14, 2002, Comment Date: July 5, 2002. and the California Public Utilities Public Service Company of New Mexico Commission. (PNM) submitted for filing an executed 11. Exelon Generation Company, LLC Comment Date: July 8, 2002. copy of the Amended and Restated [Docket No. ER02–2103–000] 16. Orion Power MidWest, L.P. Agreement for Electric Service dated June 7, 2002 (Agreement), between PNM Take notice that on June 17, 2002, [Docket No. ER02–2108–000] Exelon Generation Company, LLC and The City of Gallup, New Mexico Take notice that on June 17, 2002, (Exelon Generation), submitted for filing (Gallup). The Agreement which is being Orion Power MidWest, L.P. (Orion a power sales service agreement filed as Service Agreement No. 35 under Power MidWest) tendered for filing six between Exelon Generation and TXU PNM FERC Electric Tariff, First Revised copies of a First Revised Rate Schedule Energy Trading Company, LP, under Volume No. 3 (Power and Energy Sales FERC No. 10 under Orion Power Exelon Generation’s wholesale power Tariff), extends, modifies and MidWest’s market-based rate tariff, sales tariff, FERC Electric Tariff Original supersedes in its entirety, the existing between Orion Power MidWest and Volume No. 2. Contract for Electric Service between Duquesne Light Company. PNM and Gallup, and sets forth the Comment Date: July 8, 2002. Comment Date: July 8, 2002. terms and conditions under which PNM 12. DPL Energy 17. Orion Power MidWest, L.P. will provide all of the electric power and energy to Gallup (other than [Docket No. ER02–2104–000] [Docket No. ER02–2109–000] Gallup’s entitlement to an allocation of Take notice that on June 17, 2002, Take notice that on June 17, 2002, federal hydro-electric power or the DPL Energy (DPLE), tendered for filing Orion Power MidWest, L.P. (Orion replacement thereof from Western Area a long-term transaction agreement with Power MidWest) tendered for filing an Power Administration) to serve Gallup’s The Dayton Power and Light Company. Original Service Agreement No. 5 under McKinley County, New Mexico electric Comment Date: July 8, 2002. Orion Power MidWest’s market-based customers, from July 1, 2002 through
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June 30, 2013. PNM’s filing is available DEPARTMENT OF ENERGY DEPARTMENT OF ENERGY for public inspection at its offices in Albuquerque, New Mexico. Federal Energy Regulatory Federal Energy Regulatory Commission Copies of this filing have been served Commission upon Gallup, the New Mexico Public Notice of Application Accepted for Regulation Commission and the New [Docket No. EL00–95–061] Filing and Soliciting Comments, Mexico Attorney General. San Diego Gas & Electric Company Protests, and Motions To Intervene Comment Date: July 5, 2002. California Independent System June 21, 2002. 20. Kansas City Power & Light Operator Corporation California Power Take notice that the following Company Exchange Corporation; Notice of Filing hydroelectric application has been filed with the Commission and is available [Docket No. ER02–2112–000] June 21, 2002. for public inspection: Take notice that on June 17, 2002, Take notice that on May 28, 2002, a. Type of Application: Preliminary Kansas City Power & Light Company California Independent System Operator Permit. (KCPL) tendered for filing with the Corporation tendered for filing with the b. Project No.: 12174–000. Federal Energy Regulatory Commission Federal Energy Regulatory Commission c. Date filed: May 30, 2002. (Commission) a Facilities Agreement, (Commission), a compliance filing d. Applicant: Lexington Hydro, LLC. dated May 3, 2002 between Kansas City pursuant to the Commission’s February e. Name and Location of Project: The Power & Light Company(KCPL) and the 27, 2002 order issued in the above- Lexington Project would be located on Los Gatos Creek, a tributary of the city of Baldwin City, Kansas. KCPL proceeding. Guadalupe River in Santa Clara County, proposes an effective date of July 1, Any person desiring to intervene or to California. The project would be located 2002 and requests any necessary waiver protest this filing should file with the on an existing dam owned by Pacific of the Commission’s notice requirement. Federal Energy Regulatory Commission, Water & Power. The project would be Comment Date: July 8, 2002. 888 First Street, NE., Washington, DC partially located on lands owned by 20426, in accordance with Rules 211 Pacific Water & Power. Standard Paragraph and 214 of the Commission’s Rules of f. Filed Pursuant to:’’ Federal Power E. Any person desiring to intervene or Practice and Procedure (18 CFR 385.211 Act, 16 U.S.C. 791(a)—825(r). to protest this filing should file with the and 385.214). Protests will be g. Applicant contact: Mr. Brent L. Federal Energy Regulatory Commission, considered by the Commission in Smith, President, Northwest Power 888 First Street, NE., Washington, DC determining the appropriate action to be Services, Inc., P.O. Box 535, Rigby, ID 20426, in accordance with Rules 211 taken, but will not serve to make 83442, (208) 745–8630, fax (208) 745– and 214 of the Commission’s Rules of protestants parties to the proceeding. 7909. h. FERC Contact: Tom Papsidero, Practice and Procedure (18 CFR 385.211 Any person wishing to become a party (202) 219–2715. and 385.214). Protests will be must file a motion to intervene. All such i. Deadline for filing comments, considered by the Commission in motions or protests should be filed on or before the comment date, and, to the protests, and motions to intervene: 60 determining the appropriate action to be days from the issuance date of this taken, but will not serve to make extent applicable, must be served on the applicant and on any other person notice. protestants parties to the proceeding. All documents (original and eight designated on the official service list. Any person wishing to become a party copies) should be filed with: Magalie R. This filing is available for review at the must file a motion to intervene. All such Salas, Secretary, Federal Energy Commission or may be viewed on the motions or protests should be filed on Regulatory Commission, 888 First or before the comment date, and, to the Commission’s web site at http:// Street, NE., Washington, DC 20426. extent applicable, must be served on the www.ferc.gov using the ‘‘RIMS’’ link, Motions to intervene, protests, and applicant and on any other person select ‘‘Docket #’’ and follow the comments may be filed electronically designated on the official service list. instructions (call 202–208–2222 for via the internet in lieu of paper. See, 18 This filing is available for review at the assistance). Protests and interventions CFR 385.2001(a)(1)(iii) and the Commission or may be viewed on the may be filed electronically via the instructions on the Commission’s web Commission’s web site at http:// Internet in lieu of paper; see 18 CFR site under the ‘‘e-Filing’’ link. Please www.ferc.gov using the ‘‘RIMS’’ link, 385.2001(a)(1)(iii) and the instructions include the project number (P–12174– select ‘‘Docket #’’ and follow the on the Commission’s web site under the 000) on any comments or motions filed. instructions (call 202–208–2222 for ‘‘e-Filing’’ link. The Commission’s Rules of Practice assistance). Protests and interventions Comment Date: June 28, 2002. and Procedure require all interveners may be filed electronically via the filing documents with the Commission Linwood A. Watson, Jr., Internet in lieu of paper; see 18 CFR to serve a copy of that document on 385.2001(a)(1)(iii) and the instructions Deputy Secretary. each person in the official service list on the Commission’s web site under the [FR Doc. 02–16249 Filed 6–26–02; 8:45 am] for the project. Further, if an intervener files comments or documents with the ‘‘e-Filing’’ link. BILLING CODE 6717–01–P Commission relating to the merits of an Magalie R. Salas, issue that may affect the responsibilities Secretary. of a particular resource agency, they [FR Doc. 02–16247 Filed 6–26–02; 8:45 am] must also serve a copy of the document on that resource agency. BILLING CODE 6717–01–P j. Description of Project: The proposed project would use the existing Lexington Reservoir, impounded by an
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existing 810-foot-long, 205-foot-high o. Proposed Scope of Studies under agency’s comments must also be sent to earthfill dam, and having a surface area Permit—A preliminary permit, if issued, the Applicant’s representatives. of 450 acres and a storage capacity of does not authorize construction. The Linwood A. Watson, Jr., 21,430 acre-feet at normal maximum term of the proposed preliminary permit Deputy Secretary. water surface elevation 645 feet msl and would be 36 months. The work include: (1) A proposed powerhouse proposed under the preliminary permit [FR Doc. 02–16250 Filed 6–26–02; 8:45 am] with a total installed capacity of 1 would include economic analysis, BILLING CODE 6717–01–P megawatt, (2) a proposed 200-foot-long, preparation of preliminary engineering 3.5-foot-diameter penstock, (3) a plans, and a study of environmental DEPARTMENT OF ENERGY proposed 1-mile-long, 15 kv impacts. Based on the results of these transmission line, and (4) appurtenant studies, the Applicant would decide Federal Energy Regulatory facilities. The project would operate in whether to proceed with the preparation Commission a run-of-river mode and would have an of a development application to average annual generation of 8.76 GWh. construct and operate the project. Notice of License Amendment Request k. Copies of this filing are on file with p. Comments, Protests, or Motions to and Soliciting Comments, Motions To the Commission and are available for Intervene—Anyone may submit Intervene, and Protests public inspection. This filing may also be viewed on the web at http:// comments, a protest, or a motion to June 21, 2002. www.ferc.gov using the ‘‘RIMS’’ link, intervene in accordance with the Take notice that the following select ‘‘Docket #’’ and follow the requirements of Rules of Practice and application has been filed with the instructions (call 202–208–2222 for Procedure, 18 CFR 385.210, 385.211, Commission and is available for public assistance). 385.214. In determining the appropriate inspection: l. Preliminary Permit—Anyone action to take, the Commission will a. Application Type: Request for desiring to file a competing application consider all protests or other comments License Amendment. for preliminary permit for a proposed filed, but only those who file a motion b. Project No: 2833–086. project must submit the competing to intervene in accordance with the c. Date Filed: April 10, 2002. application itself, or a notice of intent to Commission’s Rules may become a d. Applicant: Lewis County Public file such an application, to the party to the proceeding. Any comments, Utility District. Commission on or before the specified protests, or motions to intervene must e. Name of Project: Cowlitz Falls comment date for the particular be received on or before the specified Hydroelectric Project application (see 18 CFR 4.36). comment date for the particular f. Location: The project is located on Submission of a timely notice of intent application. the Cowlitz River just below its allows an interested person to file the q. Filing and Service of Responsive confluence with the Cispus River in competing preliminary permit Documents—Any filings must bear in Lewis County, Washington. application no later than 30 days after all capital letters the title g. Filed Pursuant to: 18 CFR 4.200. the specified comment date for the ‘‘COMMENTS’’, ‘‘NOTICE OF INTENT h. Applicant Contact: Mr. David J. particular application. A competing TO FILE COMPETING APPLICATION’’, Muller, Lewis County Public Utility preliminary permit application must ‘‘COMPETING APPLICATION’’, District, P.O. Box 330, Chehalis, WA conform with 18 CFR 4.30(b) and 4.36. ‘‘PROTEST’’, or ‘‘MOTION TO 98532–0330, (360) 748–9261. m. Preliminary Permit—Any qualified INTERVENE’’, as applicable, and the i. FERC Contact: Any questions on development applicant desiring to file a Project Number of the particular this notice should be addressed to Mr. competing development application application to which the filing refers. Erich Gaedeke at (202) 208–0777, or e- must submit to the Commission, on or Any of the above-named documents mail address: [email protected]. before a specified comment date for the must be filed by providing the original j. Deadline for filing comments and or particular application, either a and the number of copies provided by motions: July 22, 2002. competing development application or a the Commission’s regulations to: The All documents (original and seven notice of intent to file such an Secretary, Federal Energy Regulatory copies) should be filed with: Magalie R. application. Submission of a timely Commission, 888 First Street, NE., Salas, Secretary, Federal Energy notice of intent to file a development Washington, DC 20426. An additional Regulatory Commission, 888 First application allows an interested person copy must be sent to Director, Division Street, NE, Washington DC 20426. to file the competing application no of Hydropower Administration and Please include the project number (P– later than 120 days after the specified Compliance, Federal Energy Regulatory 2833–086) on any comments or motions comment date for the particular Commission, at the above-mentioned filed. application. A competing license address. A copy of any notice of intent, k. Description of Request: The Lewis application must conform with 18 CFR County Public Utility District (licensee) competing application or motion to 4.30(b) and 4.36. filed an application to amend its intervene must also be served upon each n. Notice of Intent—A notice of intent approved Fish and Wildlife Mitigation representative of the Applicant must specify the exact name, business Plan for the Cowlitz Falls Hydroelectric specified in the particular application. address, and telephone number of the Project. The licensee requests prospective applicant, and must include r. Agency Comments—Federal, state, Commission approval to modify its an unequivocal statement of intent to and local agencies are invited to file Mitigation Trout Stocking Program in submit, if such an application may be comments on the described application. Lake Scanewa to better strike a balance filed, either a preliminary permit A copy of the application may be between meeting the project mitigation application or a development obtained by agencies directly from the catch rate and protecting Endangered application (specify which type of Applicant. If an agency does not file Species Act listed species. The application). A notice of intent must be comments within the time specified for Washington State Department of Fish served on the applicant(s) named in this filing comments, it will be presumed to and Wildlife has already approved the public notice. have no comments. One copy of an licensee’s proposal.
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l. Locations of the Application: A site at http://www.ferc.gov under the ‘‘e- Rules of Practice and Procedure copy of the application is available for Filing’’ link. provides that, to eliminate unnecessary expense or improve administrative inspection and reproduction at the Linwood A. Watson, Jr., Commission’s Public Reference Room, efficiency, the Secretary may establish a Deputy Secretary. located at 888 First Street, NE, Room restricted service list for a particular [FR Doc. 02–16254 Filed 6–26–02; 8:45 am] 1 2A, Washington, DC 20426, or by calling phase or issue in a proceeding. The (202) 208–1371. This filing may also be BILLING CODE 6717–01–P restricted service list should contain the viewed on the web at http:// names of persons on the service list www.ferc.gov using the ‘‘RIMS’’ link, who, in the judgment of the decisional DEPARTMENT OF ENERGY authority establishing the list, are active select ‘‘Docket#’’ and follow the participants with respect to the phase or instructions (call 202–208–2222 for Federal Energy Regulatory Commission issue in the proceeding for which the assistance). A copy is also available for list is established. inspection and reproduction at the [Project No. 2000–036 NY] The Commission staff is consulting address in item (h) above. with the Alabama and Georgia State m. Individuals desiring to be included Power Authority of the State of New Historic Preservation Officer on the Commission’s mailing list should York; Notice of Site Visit (hereinafter, SHPOs) and the Advisory Council on Historic Preservation so indicate by writing to the Secretary June 21, 2002. (hereinafter, Council) pursuant to the of the Commission. On July 10 and July 11, 2002, the Council’s regulations, 36 CFR part 800, Office of Energy Projects Staff (Staff) n. Comments, Protests, or Motions to implementing Section 106 of the will participate in an on-site visit of the Intervene—Anyone may submit National Historic Preservation Act, as St. Lawrence-FDR Power Project on the comments, a protest, or a motion to amended, (16 U.S.C. Section 470 f), to St. Lawrence River near Massena, in St. intervene in accordance with the prepare and execute a programmatic Lawrence County, New York. On July requirements of Rules of Practice and agreement for managing properties 10, 2002, the site visit will begin at 8:30 Procedure, 18 CFR 385.210, .211, .214. included in, or eligible for inclusion in, a.m., meeting at the New York Power In determining the appropriate action to the National Register of Historic Places take, the Commission will consider all Authority (NYPA) Robert Moses at Project Nos. 2146, 82, and 618. protests or other comments filed, but Powerhouse. The site visit conducted on The programmatic agreement, when only those who file a motion to July 11, 2002 is intended for Staff only, executed by the Commission, the to view areas in the project vicinity by intervene in accordance with the SHPOs, and the Council, would satisfy boat. Staff will be touring the project Commission’s Rules may become a the Commission’s Section 106 vicinity by boat on July 11, 2002. Due party to the proceeding. Any comments, responsibilities for all individual to public safety concerns and ex parte undertakings carried out in accordance protests, or motions to intervene must limitations, Staff will not be able to be received on or before the specified with the licenses until the licenses provide boating access for others. expire or are terminated (36 CFR comment date for the particular All interested parties and individuals application. 800.13[e]). The Commission’s are welcome to attend the site visit on responsibilities pursuant to Section 106 o. Filing and Service of Responsive July 10, 2002. Individuals interested in for the above projects would be fulfilled Documents—Any filings must bear in participating in the site tour on July 10, through the programmatic agreement, all capital letters the title 2002 must provide their own which the Commission proposes to draft ‘‘COMMENTS’’, transportation. Those planning to attend in consultation with certain parties ‘‘RECOMMENDATIONS FOR TERMS must contact Susan O’Brien at (202) listed below. The executed AND CONDITIONS’’, ‘‘PROTEST’’, OR 219–2840 or [email protected] no programmatic agreement would be ‘‘MOTION TO INTERVENE’’, as later than July 5, 2002. incorporated into any Orders issuing applicable, and the Project Number of Linwood A. Watson, Jr., licenses. the particular application to which the Deputy Secretary. Alabama Power Company, as licensee for Project Nos. 2146, 82, and 618, and filing refers. A copy of any motion to [FR Doc. 02–16251 Filed 6–26–02; 8:45 am] the Mississippi Band of Choctaw intervene must also be served upon each BILLING CODE 6717–01–P representative of the Applicant Indians, Jena Band of Choctaw Indians, specified in the particular application. Chickasaw Nation, Poarch Band of DEPARTMENT OF ENERGY Creek Indians, and the U.S. Bureau of p. Agency Comments—Federal, state, Indian Affairs have expressed an and local agencies are invited to file Federal Energy Regulatory interest in this preceding and are comments on the described application. Commission invited to participate in consultations to A copy of the application may be develop the programmatic agreement. obtained by agencies directly from the [Project Nos. 2146–090,82–019, and 618– For purposes of commenting on the Applicant. If an agency does not file 104—AlabamaCoosa River Project, Mitchell, programmatic agreement, we propose to Project, and Jordan Project] comments within the time specified for restrict the service list for the filing comments, it will be presumed to Alabama Power Company; Notice of aforementioned projects as follows: have no comments. One copy of an Proposed Restricted Service List for a Dr. Laura Henley Dean, Advisory agency’s comments must also be sent to Programmatic Agreement for Council on Historic Preservation, The the Applicant’s representatives. Managing Properties Included in or Old Post Office Building, Suite 803, q. Comments, protests and Eligible for Inclusion in the National 1100 Pennsylvania Avenue, NW., Register of Historic Places Washington, DC 20004. interventions may be filed electronically Amanda McBride, Alabama Historical via the Internet in lieu of paper. See, 18 June 21, 2002. Commission, 1500 Tower Building, CFR 385.2001(a)(1)(iii) and the Rule 2010 of the Federal Energy instructions on the Commission’s web Regulatory Commission’s (Commission) 1 18 CFR Section 385.2010.
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323 Center Street, Little Rock, AR DEPARTMENT OF ENERGY Engineers, and the U.S. Bureau of 72201. Indian Affairs have expressed an David Crass, Georgia Historic Federal Energy Regulatory interest in this preceding and are Preservation Division, 156 Trinity Commission invited to participate in consultations to Avenue SW., Suite 101, Atlanta, GA [Project No. 2165–015—Alabama Black develop the programmatic agreement. 30303–1040. Warrior River Project] For purposes of commenting on the Christine Norris, Tribal Historic programmatic agreement, we propose to Preservation Officer, Jena Band of Alabama Power Company; Notice of restrict the service list for the Choctaw Indians, P.O. Box 14, Jena, Proposed Restricted Service List for a aforementioned projects as follows: LA 71342. Programmatic Agreement for Dr. Laura Henley Dean, Advisory William Day, Tribal Historic Managing Properties Included in or Council on Historic Preservation, The Preservation Officer, Poarch Band of Eligible for Inclusion in the National Old Post Office Building, Suite 803, Creek Indians, 128 Olive St., Register of Historic Places 1100 Pennsylvania Avenue, NW., Pineville, LA 71360. June 21, 2002. Washington, DC 20004 Rena Duncan, Tribal Historic Rule 2010 of the Federal Energy Amanda McBride, Alabama Historical Preservation Officer, Chickasaw Regulatory Commission’s (Commission) Commission, 1500 Tower Building, Nation, P.O. Box 1548, Ada, OK Rules of Practice and Procedure 323 Center Street, Little Rock, AR 74820. provides that, to eliminate unnecessary 72201 Ken Carleton, Tribal Historic expense or improve administrative Christine Norris, Tribal Historic Preservation Officer, Mississippi Band efficiency, the Secretary may establish a Preservation Officer, Jena Band of of Choctaw Indians, P.O. Box 6257, restricted service list for a particular Choctaw Indians, P.O. Box 14, Jena, Choctaw, MS 39350. phase or issue in a proceeding.1 The LA 71342 Dr. James Kardatzke, Bureau of Indian restricted service list should contain the William Day, Tribal Historic Affairs, Eastern Region Office, 711 names of persons on the service list Preservation Officer, Poarch Band of Stewarts Ferry Pike, Nashville, TN who, in the judgment of the decisional Creek Indians, 128 Olive St., 37214. authority establishing the list, are active Pineville, LA 71360 Kelly Schaeffer, 6225 Brandon Avenue, participants with respect to the phase or Rena Duncan, Tribal Historic Suite 110, Springfield, VA 22150. issue in the proceeding for which the Preservation Officer, Chickasaw Barry Lovett, Alabama Power Company, list is established. Nation, P.O. Box 1548, Ada, OK P.O. Box 2641, Birmingham, AL The Commission staff is consulting 74820 35291. with the Alabama State Historic Ken Carleton, Tribal Historic John Harrington, Esq., Office of Preservation Officer (hereinafter, SHPO) Preservation Officer, Mississippi Band Solicitor, Southeast Regional Office, and the Advisory Council on Historic of Choctaw Indians, P.O. Box 6257, 75 Spring St., SW., Suite 304, Atlanta, Preservation (hereinafter, Council) Choctaw, MS 39350 GA 30303. pursuant to the Council’s regulations, 36 Dr. James Kardatzke, Bureau of Indian Any person on the official service list CFR part 800, implementing Section 106 Affairs, Eastern Region Office, 711 for the above-captioned proceedings of the National Historic Preservation Stewarts Ferry Pike, Nashville, TN may request inclusion on the restricted Act, as amended, (16 U.S.C. Section 470 37214 service list, or may request that a f), to prepare and execute a Robert Pasquill, United States Forest restricted service list not be established, programmatic agreement for managing Service, 2946 Chestnut St., by filing a motion to that effect within properties included in, or eligible for Montgomery, AL 36107–3010 15 days of this notice date. In a request inclusion in, the National Register of Elrand Denson, United States Forest for inclusion, please identify the Historic Places at Project No. 2165–015. Service, 2946 Chestnut St., reason(s) why there is an interest to be The programmatic agreement, when Montgomery, AL 36107–3010 included. Also please identify any executed by the Commission, the SHPO, Michael Eubanks, United States Army concerns about Historic Properties, and the Council, would satisfy the Corp of Engineers, 109 Saint Joseph including Traditional Cultural Commission’s Section 106 St., Mobile, AL 36628 Properties. If Historic Properties are to responsibilities for all individual Charles Gault, Esq., Office of Solicitor, be identified within the motion, please undertakings carried out in accordance 530 Gay St., Room 308, Knoxville, TN use a separate page, and label it NON- with the license until the license expires 37918 PUBLIC Information. or is terminated (36 CFR 800.13[e]). The Kelly Schaeffer, 6225 Brandon Avenue, An original and 8 copies of any such Commission’s responsibilities pursuant Suite 110, Springfield, VA 22150 motion must be filed with Magalie to Section 106 for the Black Warrior Barry Lovett, Alabama Power Company, Salas, the Secretary of the Commission River Project would be fulfilled through P.O. Box 2641, Birmingham, AL (888 First Street, NE., Washington, DC the programmatic agreement, which the 35291 20426) and must be served on each Commission proposes to draft in Any person on the official service list person whose name appears on the consultation with certain parties listed for the above-captioned proceeding may official service list. If no such motions below. The executed programmatic request inclusion on the restricted are filed, the restricted service list will agreement would be incorporated into service list, or may request that a be effective at the end of the 15 day any Order issuing a license. restricted service list not be established, period. Otherwise, a further notice will Alabama Power Company, as licensee by filing a motion to that effect within be issued ruling on any motion or for Project No. 2165, and the Mississippi 15 days of this notice date. In a request motions filed within the 15 day period. Band of Choctaw Indians, Jena Band of for inclusion, please identify the Choctaw Indians, Chickasaw Nation, reason(s) why there is an interest to be Linwood A. Watson, Jr., Poarch Band of Creek Indians, U. S. included. Also please identify any Deputy Secretary. Forest Service, U.S. Army Corp of concerns about Historic Properties, [FR Doc. 02–16252 Filed 6–26–02; 8:45 am] including Traditional Cultural BILLING CODE 6717–01–P 1 18 CFR Section 385.2010. Properties. If Historic Properties are to
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be identified within the motion, please of exempt and prohibited off-the-record requires. Any person identified below as use a separate page, and label it NON- communications. having made a prohibited off-the-record PUBLIC Information. Order No. 607 (64 FR 51222, communication should serve the An original and 8 copies of any such September 22, 1999) requires document on all parties listed on the motion must be filed with Magalie Commission decisional employees, who official service list for the applicable Salas, the Secretary of the Commission make or receive an exempt or a proceeding in accordance with Rule (888 First Street, NE., Washington, DC prohibited off-the-record 2010, 18 CFR 385.2010. 20426) and must be served on each communication relevant to the merits of person whose name appears on the a contested on-the-record proceeding, to Exempt off-the-record official service list. If no such motions deliver a copy of the communication, if communications will be included in the are filed, the restricted service list will written, or a summary of the substance decisional record of the proceeding, be effective at the end of the 15 day of any oral communication, to the unless the communication was with a period. Otherwise, a further notice will Secretary. cooperating agency as described by 40 be issued ruling on any motion or Prohibited communications will be CFR 1501.6, made under 18 CFR motions filed within the 15 day period. included in a public, non-decisional file 385.2201(e)(1)(v). Linwood A. Watson, Jr., associated with, but not part of, the The following is a list of exempt and Deputy Secretary. decisional record of the proceeding. prohibited off-the-record Unless the Commission determines that [FR Doc. 02–16253 Filed 6–26–02; 8:45 am] communications recently received in the prohibited communication and any BILLING CODE 6717–01–P the Office of the Secretary. Copies of responses thereto should become part of this filing are on file with the the decisional record, the prohibited off- Commission and are available for public DEPARTMENT OF ENERGY the-record communication will not be inspection. The documents may be considered by the Commission in viewed on the web at http:// reaching its decision. Parties to a Federal Energy Regulatory www.ferc.gov using the ‘‘RIMS’’ link, proceeding may seek the opportunity to Commission select ‘‘Docket#’’ and follow the respond to any facts or contentions [Docket No. RM98–1–000] made in a prohibited off-the-record instructions (call 202–208–2222 for assistance). Regulations Governing Off-the-Record communication, and may request that Communications; Public Notice the Commission place the prohibited communication and responses thereto June 21, 2002. in the decisional record. The This constitutes notice, in accordance Commission will grant such requests with 18 CFR 385.2201(h), of the receipt only when it determines that fairness so
EXEMPT
Docket No. Date filed Presenter or requester
1. Project No. 1354–000 ...... 6–11–02 Brandy Bradford. 2. Project No. 1354–000 ...... 6–11–02 Karen Miller. 3. Project No. 1494–032 ...... 6–12–02 Edward B. Leinbach. 4. Project No. 1494–237/240 and 241 ...... 6–12–02 Steve Naugle. 5. Project No. 2342–000 ...... 6–17–02 Gail Miller. 6. Project No. 2342–000 ...... 6–18–02 Olivia Romano (Nicholas Jayjack). 7. Project No. 2342–000 ...... 6–18–02 Ed Woodruff (Nicholas Jayjack). 8. Docket No. CP01–57–000 ...... 6–18–02 William Lavarco (Joel Zipp).
Linwood A. Watson, Jr., York Independent System Operator, Inc., Docket No. RM01–12–000, should be Deputy Secretary. Bangor Hydro-Electric Company, PJM added. Interconnection, L.L.C., and PJM [FR Doc. 02–16255 Filed 6–26–02; 8:45 am] In the first paragraph, the fourth and Interconnection, L.L.C. BILLING CODE 6717–01–P fifth sentences should read as follows: The ‘‘Notice of Request for Comments ‘‘The Federal Energy Regulatory on Timeline and Report by the Commission requested that these DEPARTMENT OF ENERGY Northeast Independent System independent system operators Operators on Seams Resolution’’ issued Federal Energy Regulatory incorporate the views of the state June 18, 2002,1 needs to be corrected as Commission commissions and affected stakeholders follows: into the seams resolution plan. Toward [Docket Nos. RM01–12–000 et al.] In the caption, Midwest Independent this end, the Federal Energy Regulatory System Operator, Docket No. RT01–87– Commission advised the independent Errata Notice 000 and Alliance Companies, Docket system operators to coordinate their June 19, 2002. No. EL02–65–000 should be deleted and efforts with the state commissions and Electric Market Design and Structure, affected stakeholders.’’ In the matter of: RM01–12–000, RT01–99– Magalie R. Salas, 000, 001, 002 and 003, RT01–95–000, 001 1 The ‘‘Notice of Request for Comments on and 002, RT01–86–000, 001 and 002, RT01– Timeline and Report by the Northeast Independent Secretary. 2–000, 001, 002 and 003, RT01–98–000; System Operators on Seams Resolution’’ issued on [FR Doc. 02–16246 Filed 6–26–02; 8:45 am] Electric Market Design and Structure, June 18, 2002, is scheduled to be published in the Regional Transmission Organizations, New Federal Register on Tuesday, June 25, 2002. BILLING CODE 6717–01–P
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ENVIRONMENTAL PROTECTION (NAICS) codes have been provided to number OPP–2002–0115 in the subject AGENCY assist you and others in determining line on the first page of your response. whether or not this action might apply [OPP–2002–0115; FRL–7183–2] 1. By mail. Submit your comments to: to certain entities. If you have questions Public Information and Records Notice of Filing a Pesticide Petition to regarding the applicability of this action Integrity Branch (PIRIB), Information to a particular entity, consult the person Establish a Tolerance fora Certain Resources and Services Division listed under FOR FURTHER INFORMATION Pesticide Chemical in or on Food (7502C), Office of Pesticide Programs CONTACT. AGENCY: Environmental Protection (OPP), Environmental Protection Agency (EPA). B. How Can I Get Additional Agency, 1200 Pennsylvania Ave., NW., Information, Including Copies of this ACTION: Notice. Washington, DC 20460. Document and Other Related 2. In person or by courier. Deliver Documents? SUMMARY: This notice announces the your comments to: Public Information initial filing of a pesticide petition 1. Electronically. You may obtain and Records Integrity Branch (PIRIB), proposing the establishment of electronic copies of this document, and Information Resources and Services regulations for residues of a certain certain other related documents that Division (7502C), Office of Pesticide pesticide chemical in or on various food might be available electronically, from Programs (OPP), Environmental commodities. the EPA Internet Home Page at http:// Protection Agency, Rm. 119, Crystal DATES: Comments, identified by docket www.epa.gov/. To access this Mall #2, 1921 Jefferson Davis Highway, control number OPP–2002–0115, must document, on the Home Page select Arlington, VA. The PIRIB is open from be received on or before July 29, 2002. ‘‘Laws and Regulations,’’ ‘‘Regulations 8:30 a.m. to 4 p.m., Monday through ADDRESSES: Comments may be and Proposed Rules,’’ and then look up Friday, excluding legal holidays. The submitted by mail, electronically, or in the entry for this document under the PIRIB telephone number is (703) 305– person. Please follow the detailed ‘‘Federal Register—Environmental 5805. instructions for each method as Documents.’’ You can also go directly to provided in Unit I.C. of the the Federal Register listings at http:// 3. Electronically. You may submit SUPPLEMENTARY INFORMATION. To ensure www.epa.gov/fedrgstr/. A frequently your comments electronically by e-mail proper receipt by EPA, it is imperative updated electronic version of 40 CFR to: [email protected], or you can that you identify docket control number part 180 is available at http:// submit a computer disk as described OPP–2002–0115 in the subject line on www.access.gpo.gov/nara/cfr/ above. Do not submit any information the first page of your response. cfrhtml_00/Title_40/40cfr180_00.html, a electronically that you consider to be FOR FURTHER INFORMATION CONTACT: By beta site currently under development. CBI. Avoid the use of special characters mail: Dani Daniel, Registration Support 2. In person. The Agency has and any form of encryption. Electronic Branch, Registration Division (7505C), established an official record for this submissions will be accepted in Office of Pesticide Programs, action under docket control number Wordperfect 6.1/8.0 or ASCII file Environmental Protection Agency, 1200 OPP–2002–0115. The official record format. All comments in electronic form Pennsylvania Ave., NW., Washington, consists of the documents specifically must be identified by docket ID number DC 20460; telephone number: (703) referenced in this action, any public OPP–2002–0115. Electronic comments 305–5409; e-mail address: comments received during an applicable may also be filed online at many Federal [email protected]. comment period, and other information Depository Libraries. SUPPLEMENTARY INFORMATION: related to this action, including any information claimed as confidential D. How Should I Handle CBI That I I. General Information business information (CBI). This official Want to Submit to the Agency? A. Does this Action Apply to Me? record includes the documents that are Do not submit any information You may be affected by this action if physically located in the docket, as well electronically that you consider to be you are an agricultural producer, food as the documents that are referenced in CBI. You may claim information that manufacturer or pesticide manufacturer. those documents. The public version of you submit to EPA in response to this the official record does not include any Potentially affected categories and document as CBI by marking any part or information claimed as CBI. The public entities may include, but are not limited all of that information as CBI. version of the official record, which to: Information so marked will not be includes printed, paper versions of any disclosed except in accordance with Examples of poten- electronic comments submitted during NAICS an applicable comment period, is procedures set forth in 40 CFR part 2. Categories codes tially affected enti- ties available for inspection in the Public In addition to one complete version of Information and Records Integrity the comment that includes any Industry 111 Crop production Branch (PIRIB), Rm. 119, Crystal Mall information claimed as CBI, a copy of 112 Animal production #2, 1921 Jefferson Davis Highway, the comment that does not contain the 311 Food manufac- information claimed as CBI must be turing Arlington, VA, from 8:30 a.m. to 4 p.m., 32532 Pesticide manufac- Monday through Friday, excluding legal submitted for inclusion in the public turing holidays. The PIRIB telephone number version of the official record. is (703) 305–5805. Information not marked confidential This listing is not intended to be will be included in the public version C. How and to Whom Do I Submit exhaustive, but rather provides a guide of the official record without prior Comments? for readers regarding entities likely to be notice. If you have any questions about affected by this action. Other types of You may submit comments through CBI or the procedures for claiming CBI, entities not listed in the table could also the mail, in person, or electronically. To please consult the person identified be affected. The North American ensure proper receipt by EPA, it is under FOR FURTHER INFORMATION Industrial Classification System imperative that you identify docket ID CONTACT.
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E. What Should I Consider as I Prepare a description of the analytical methods thiamethoxam per 100 kilograms of My Comments for EPA? available to EPA for the detection and seed. A 3X exaggerated rate trial was You may find the following measurement of the pesticide chemical also conducted to determine the suggestions helpful for preparing your residues or an explanation of why no magnitude of the residue in processed comments: such method is needed. field corn commodities. 1. Explain your views as clearly as PP 0F6142 Thirty-six field trials were conducted possible. EPA has received a pesticide petition in 19 states representing typical corn 2. Describe any assumptions that you (0F6142) from Syngenta Crop Protection growing areas of the United States, used. Inc., P.O. Box 18300, Greensboro, NC including 21 field corn, 12 sweet corn, 3. Provide copies of any technical 27419–8300 proposing, pursuant to and 3 popcorn field trials. There were information and/or data you used that section 408(d) of the Federal Food, no detectable residues (<0.01 ppm) of support your views. Drug, and Cosmetic Act (FFDCA), 21 either thiamethoxam or the major 4. If you estimate potential burden or U.S.C. 346a(d), to amend 40 CFR part metabolite in any grain, ear or field corn costs, explain how you arrived at the 180, by establishing a tolerance for processed fraction. The maximum estimate that you provide. residues of thiamethoxam and its residues in animal feed commodities 5. Provide specific examples to metabolite in or on the raw agricultural were 0.09 ppm in forage and 0.03 ppm illustrate your concerns. commodity corn forage at 0.10 parts per 6. Make sure to submit your in stover (total thiamethoxam million (ppm); corn stover at 0.05 ppm; equivalents). comments by the deadline in this and popcorn, corn grain and sweet corn notice. (kernal and cob with husk removed) at B. Toxicological Profile 7. To ensure proper receipt by EPA, 0.02 ppm. EPA has determined that the be sure to identify the docket ID number petition contains data or information 1. Acute toxicity. The acute oral LD50 assigned to this action in the subject regarding the elements set forth in for thiamethoxam in the rat is 1,563 line on the first page of your response. section 408(d)(2) of the FFDCA; milligrams/kilogram body weight (mg/ You may also provide the name, date, however, EPA has not fully evaluated kg bwt). The acute dermal LD50 of and Federal Register citation. the sufficiency of the submitted data at thiamethoxam is >2,000 mg/kg bwt. II. What Action is the Agency Taking? this time or whether the data support Thiamethoxam is non-toxic at granting of the petition. Additional data atmospheric concentrations of 3.72 mg/ EPA has received a pesticide petition may be needed before EPA rules on the L. Thiamethoxam is minimally irritating as follows proposing the establishment petition. to the eye, non-irritating to skin and is and/or amendment of regulations for not a dermal sensitizer. residues of a certain pesticide chemical A. Residue Chemistry in or on various food commodities 1. Plant metabolism. The primary In an acute neurotoxicity screening under section 408 of the Federal Food, metabolic pathways of thiamethoxam in study in rats (OPPTS 870.6200), the no Drug, and Cosmetic Act (FFDCA), 21 plants (corn, rice, pears, and cucumbers) observed adverse effect level (NOAEL) U.S.C. 346a. EPA has determined that were similar to those described for was 100 mg/kg/day with a NOAEL of this petition contains data or animals, with certain extensions of the 500 mg/kg/day based on drooped information regarding the elements set pathway in plants. Parent compound palpebral closure, decrease in rectal forth in section 408(d)(2); however, EPA and CGA–322704 were the major temperature and locomotor activity and has not fully evaluated the sufficiency residues in all crops. The metabolism of increase in forelimb grip strength (males of the submitted data at this time or thiamethoxam in plants and animals is only). At higher dose levels, mortality, whether the data support granting of the understood for the purposes of the abnormal body tone, ptosis, impaired petition. Additional data may be needed proposed tolerances. Parent respiration, tremors, longer latency to before EPA rules on the petition. thiamethoxam and the metabolite, first step in the open field, crouched CGA–322704, are the residues of over posture, gait impairment, hypo- List of Subjects concern for tolerance setting purposes. arousal, decreased number of rears, Environmental protection, 2. Analytical method. Syngenta Crop uncoordinated landing during the Agricultural commodities, Feed Protection Inc. has submitted practical righting reflex test, slight lacrimation additives, Food additives, Pesticides analytical methodology for detecting (females only) and higher mean average and pests, Reporting and recordkeeping and measuring levels of thiamethoxam input stimulus value in the auditory requirements. in or on raw agricultural commodities. startle response test (males only). The method is based on crop specific Dated: June 17, 2002. cleanup procedures and determination 2. Genotoxicty. In gene mutation Debra Edwards, by liquid chromatography with either studies with S. typhimurium and E. coli Acting Director, Registration Division, Office ultraviolet (UV) or mass spectroscopy (OPPTS 870.5100 and 870.5265, there of Pesticide Programs. (MS) detection. The limit of detection was no evidence of gene mutation when (LOD) for each analyte of this method is tested up to 5,000 µg/plate and there Summary of Petition 1.25 nanogram (ng) injected for samples was no evidence of cytotoxicity. The petitioner summary of the analyzed by UV and 0.25 ng injected for In a gene mutation study with chinese pesticide petition is printed below as samples analyzed by MS, and the limit hampster V79 cells at hypoxanthine required by section 408(d)(3) of the of quantitation (LOQ) is 0.005 ppm for guanine phophoribosyl transferase FFDCA. The summary of the petition milk and juices and 0.01 ppm for all (HGPRT) focus (OPPTS 870.5300), there was prepared by Sygenta Crop other substrates. was no evidence of of gene mutation Protection Inc. and represents the view 3. Magnitude of residues. A residue when tested up to the solubility limit. of Sygenta. EPA is publishing the program was performed for petition summary verbatim without thiamethoxam used as a seed treatment In a chinese hampster ovary (CHO) editing it in any way. The petition for corn. Seed was treated at label rates cell cytogenetics study (OPPTS summary announces the availability of of 100 to 450 (maximum) grams of 870.5375), there was no evidence of
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chromosomal aberrations when tested females, liver changes in females, all at and atrophy of seminiferous tubules in up to cytotoxic or solubility limit the LOAEL. A 90–day oral toxicity males. concentrations. study in mice (OPPTS 870.3100) In a mouse carcinogenicity study An in vivo mouse bone marrow resulted in an NOAEL of 1.41 (males), (OPPTS 870.4200), the NOAEL was 2.63 micronucleus study (OPPTS 870.5395) 19.2 (females) mg/kg/day. The LOAEL (male), 3.68 (female) mg/kg/day. The was negative when tested up to levels of was 14.3 (male) 231 (female) mg/kg/day LOAEL was 63.8 (male), 87.6 (female) toxicity in whole animals; however, no based on increased incidence of mg/kg/day based on hepatocyte evidence of target cell cytotoxicity. hepatocellular hypertrophy. At higher hypertrophy, single cell necrosis, An unscheduled DNA synthesis dose levels: Decrease in body weight inflammatory cell infiltration, pigment (UDS) assay (OPPTS 870.5550) was and body weight gain, necrosis of deposition, foci of cellular alteration, negative when tested up to precipitating individual hepatocytes, pigmentation of hyperplasia of kupffer cells and concentrations. Kupffer cells, and lymphocytic increased mitotic activity, also an 3. Reproductive and developmental infiltration of the liver in both sexes; increase in the incidence of toxicity. A prenatal developmental slight hematologic effects and decreased hepatocellular adenoma (both sexes). At study in the rat (OPPTS 870.3700) absolute and relative kidney weights in higher doses, there was an increase in resulted in maternal and developmental males; and ovarian atrophy, decreased the incidence of hepatocelluar NOAELs of 30 mg/kg/day and 200 mg/ ovary and spleen weights and increased adenocarcinoma (both sexes) and the kg/day, respectively. The maternal liver weights in females. number of animals with multiple lowest observed adverse effect level In a 90–day oral toxicity study in dogs tumors, evidence of carcinogenicity. (LOAEL) is 200 mg/kg/day based on (OPPTS 870.3150), the NOAEL is 8.23 In a combined chronic decreased body weight, body weight (males), 9.27 (females) mg/kg/day. The caricinogenicity study in rats (OPPTS gain and food consumption. The LOAEL is 32.0 (male), 33.9 (female) mg/ 870.4300), the NOAEL was 21.0 (male), developmental LOAEL was 750 mg/kg/ kg/day based on slightly prolonged 50.3 (female) mg/kg/day. The LOAEL day based on decreased fetal body prothrombin times and decreased was 63.0 (male), 255 (female) mg/kg/day weight and an increased incidence of plasma albumin and A/G ration (both based on increased incidence of skeletal anomalies. sexes); decreased calcium levels and lymphocytic infiltration of the renal A prenatal developmental study in pelvis and chronic nephropathy in ovary weights and delayed maturation the rabbit (OPPTS 870.3700) resulted in males and decreased body weight gain, in the ovaries (female); decreased maternal and developmental NOAELs of slight increase in the severity of cholesterol and phospholipid levels, 50 mg/kg/day. The maternal and hemosiderosis of the spleen, foci of testis weights, spermatogenesis, and developmental LOAEL is 150 mg/kg/ cellular alteration in liver and chronic spermatic giant cells in testes (male). day. The maternal LOAEL is based on tubular lesions in kidney in females. No maternal deaths, hemorrhagic discharge, In a 28–day dermal study in rats evidence of carcinogenicity. decreased body weight and food intake (OPPTS 870.3200), the NOAEL was 250 In a hepatic cell proliferation study in during the dosing period. The (male), 60 (female) mg/kg/day. The mice, the NOAEL was 16 (male), 20 developmental LOAEL is based on LOAEL was 1,000 (male), 250 (female) (female)mg/kg/day. The LOAEL was 72 decreased fetal body weights, increased mg/kg/day based on increased plasma (male), 87 (female) mg/kg/day based on incidence of post-implantation loss and glucose, triglyceride levels, and alkaline proliferative activity of hepatocytes. At a slight increase in the incidence of a phosphatase activity and inflammatory higher dose levels, increases in absolute few skeletal anomolies/variations. cell infiltration in the liver and necrosis and relative liver weights, speckled In a reproduction and fertility effects if single hepatocytes in females and liver, heptocellular glycogenesis/fatty study in rats (OPPTS 870.3800) the hyaline change in renal tubules and a change, heptocellular necrosis, parental/systemic NOAEL is 1.84 very slight reduction in body weight in apoptosis and pigmentation were (males), 202.06 (females) mg/kg/day; the males. At higher dose levels in females, observed. reproductive NOAEL is 0.61 (males), chronic tubular lesions in the kidneys In a 28–day feeding study to assess 202.06 (females) mg/kg/day; and the and inflammatory cell infiltration in the replicative DNA synthesis in the male offspring NOAEL is 61.25 (males), 79.20 adrenal cortex were observed. rat, the NOAEL was 711 mg/kg/day. The (females) mg/kg/day. The parental/ In a subchronic neurotoxicity LOAEL was not established. systemic LOAEL is 61.25 (males), not screening study in rats (OPPTS Immunohistochemical staining of liver determined (females) mg/kg/day based 870.6200), the NOAEL was 95.4 (male), sections from control and high dose on increased incidence of hyaline 216.4 (female) mg/kg/day, both at animals for proliferating cell nuclear change in renal tubules in F0 and F1 highest dose tested. The LOAEL was not antigen gave no indication for a males. The reproductive LOAEL is 1.84 determined. No treatment related treatment related increase in the fraction (males), not determined (females) mg/ observations at any dose level. LOAEL of DNA syntesizing hepatocytes in S- kg/day based on increased incidence was not achieved. May not have been phase. CGA293343 did not stimulate and severity of tubular atrophy observed tested at sufficiently high dose levels; hepatocyte cell proliferation in male in testes of the F1 generation males. The however, a new study is not required rats. offspring LOAEL is 158.32 (males), because the weight of the evidence from In a special study to assess liver 202.06 (females) mg/kg/day based on other toxicity studies indicates no biochemistry in the mouse, the NOAEL reduced body weight gain during the evidence of concern. was 17 (male), 92 (female)mg/kg/day. lactation period in all litters. 5. Chronic toxicity. In a chronic The LOAEL was 74 (male), 92 (female) 4. Subchronic toxicity. A 90–day oral toxicity study in dogs (OPPTS mg/kg/day based on marginal to slight toxicity study in rats (OPPTS 870.3100) 870.4100), the NOAEL was 4.05 (male), increases in absolute and relative liver resulted in a NOAEL of 1.74 (males), 4.49 (female) mg/kg/day. The LOAEL weights, a slight increase in the 92.5 (females) mg/kg/day. The LOAEL is was 21.0 (male), 24.6 (female) mg/kg/ microsomal protein content of the 17.64 (male), 182.1 (female) mg/kg/day day based on increase of creatinine in livers, moderate increases in the based on increased incidence of hyaline both sexes, transient decrease in food cytochrome P450 content, slight to change of renal tubules epithelium consumption in females, and occasional moderate increases in the activity of (males), fatty change in adrenal-gland of increase in urea levels, decrease in ALT, several microsomal enzymes, slight to
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moderate induction of cytosolic commodities will have minimal impact provide a coarse screen for sorting out glutathionw S-transfersase activity. on acute dietary risk and that the pesticides for which it is highly unlikely Treatment did not affect peroxisomal aggregate exposure will not exceed that drinking water concentrations fatty acid B-oxidation. 100% of the acute RfD. would ever exceed human health levels 6. Animal metabolism. The b. Chronic and lifetime risk. For the of concern. Based on the SCI-GROW and metabolism of thiamethoxam in rats and chronic and lifetime exposure PRZM/EXAMS models, EPA calculated livestock animals is adequately assessments, all of the DEEMTM inputs that estimated environmental understood. The residues of concern including residue and percent of crop concentrations (EECs) of thiamethoxam have been determined to be parent treated (%CT) for currently registered at the highest use rate of 0.125 pound thiamethoxam and its metabolite (N-(2- uses were from EPA’s August 28, 2000 active ingredient per acre (lb a.i./acre) chloro-thiazol-5-ylmethyl)-N′ methyl-N′- dietary exposure assessment on are 1.94 parts per billion (ppb) for acute nitro-guanidine. thiamethoxam (DP Barcode D268606, and chronic exposure to ground water 7. Metabolite toxicology. For risk PC Code 060109). For these and 8 ppb and 0.6 ppb for acute and assessment purposes, residues of the assessments, the 1996–1998 CSFII was chronic exposure, respectively, to metabolite corrected for molecular used and %CT value for apples was 2%. surface water. Based on both field and weight are considered to be All residue data were from field trials laboratory data, Syngenta predicts that toxicologically equivalent to parent where thiamethoxam was applied at the the potential exposure to ground water thiamethoxam. maximum intended use rate and the is much lower than that predicted by C. Aggregate Exposure samples were harvested at the minimum the conservative SCI-GROW model. EPA pre-harvest interval (PHI) to obtain determined EECs are used for 1. Dietary exposure. Permanent maximum expected residues. All values comparison to drinking water levels of tolerances have been established (40 from the EPA ‘‘baseline’’ assessment comparison (DWLOC). CFR 180.565) for the combined residues assumed one-half limit of quantitation (c a. Acute risk. Acute drinking water of the insecticide thiamethoxam, 3-[(2- LOQ) for all non-detects in the field trial levels of comparison were calculated chloro-5-thiazolyl) methyl] tetrahydro-5- samples. based on an acute populated adjusted methyl-N-nitro-4H-1,3,5-oxadiazin-4- c. Chronic risk. The chronic dietary dose (aPAD) of 0.1 mg/kg/day. For the imine and its metabolite (N-(2-chloro- exposure from food use indicated that acute assessment, the non-nursing ′ ′ thiazol-5-ylmethyl)-N -methyl-N -nitro- chronic dietary exposure from food infants (<1 year old) subpopulation guanidine), in or on a variety of RACs utilizes 3.5% of the chronic RfD for the generated the lowest acute DWLOC of at levels ranging from 0.02 ppm to 1.5 U.S. population and 7.9% of the chronic approximately 996 ppb. EPA has ppm (including barley, canola, cotton, RfD for children 1–6 years old. Addition determined that the surface water acute sorghum, wheat, cucurbit vegetables, of corn field trial residues to the EEC is 8 ppb and the ground water EEC fruiting vegetables, pome fruits and assessment caused a negligible increase is 1.94 ppb. Since the surface water livestock commodities). Pending in chronic exposure (0.1% for the U.S. value is greater than the ground water tolerances include coffee, grapes, population and 0.3% for children 1–6 value, the surface water value will be raisins, grape juice, pecans, peanut years old). Therefore, the proposed used for comparison purposes and will nutmeats, peanut hay, corn grain, sweet tolerances for corn commodities will protect for any concerns for ground corn (kernal with husk removed), pop have minimal impact on chronic dietary water concentrations. Since the acute corn, corn forage and stover, head and risk and that the aggregate exposure will DWLOC of 996 ppb is considerably stem brassica, leafy brassica greens and not exceed 100% of the chronic RfD. higher than the acute EEC of 8 ppb, EPA leafy vegetables. d. Lifetime risk. Results from the should not have a concern for acute risk i. Food—a. Acute risk. The acute lifetime dietary exposure analysis (food to either surface or ground water. dietary exposure evaluation (food only) only) show that there are acceptable b. Chronic risk. Chronic drinking for thiamethoxam (CGA–293343) was safety margins with respect to chronic water levels of comparison were based on a point residue (highest exposures incurred by the dietary calculated based on a chronic populated average field trial residue value) DEEM consumption of thiamethoxam-treated adjusted dose (cPAD) of 0.0006 mg/kg/ acute analysis. This assessment was commodities, including corn. Lifetime day. For the chronic assessment, the based on a Monte Carlo analysis (1,000 exposures to the U.S. population (48 non-nursing infants subpopulation iterations) and utilized an acute states, all seasons) resulted in a value of generated the lowest chronic DWLOC of endpoint of 100 mg/kg-bw/day (acute 8.13 x 10-7 which represents 81.3% of approximately 5.5 ppb. EPA has neurotoxicity study). Residue values for the lifetime risk limit of 1 x 10-6 This determined that the surface water thiamethoxam (CGA–293343) and its represents a slight increase (2.1%) in the chronic EEC is 0.6 ppb and the ground corresponding acid metabolite (CGA– lifetime risk of 7.92 x 10-7 (79.2%) water EEC is 1.94 ppb. Since the ground 322704) were compiled using data from associated with currently registered uses water value is greater than the surface field trial studies. For those field trial of thiamethoxam. water value, the ground water value will samples which had non-detectable ii. Drinking water. EPA used the be used for comparison purposes and residues, a value of c the statistically Pesticide Root Zone/Exposure Analysis will protect for any concerns for surface derived limit of detection (c sLOD) was Modeling System (PRZM/EXAMS) to water concentrations. Since the chronic used. Non-nursing infants (<1 year old) estimate pesticide concentrations in DWLOC of 5.5 ppb is higher than the were the most sensitive subpopulation surface water and SCI-GROW, which chronic EEC of 1.94 ppb, EPA should with a total exposure of 0.42% of the predicts pesticide concentrations in not have a concern for chronic risk to acute reference dose (aRfD). The next ground water. None of these models either surface or ground water. most sensitive subpopulation was all include consideration of the impact c. Cancer risk. Based on currently infants <1 year old) with an exposure of processing (mixing, dilution, or registered uses for thiamethoxam, EPA 0.37% of the aRfD. Acute exposure for treatment) of raw water for distribution has determined a drinking water level of the U.S. population was 0.12% of the as drinking water would likely have on comparison for cancer (cancer DWLOC) aRfD at the 99.9th percentile of exposure. the removal of pesticides from the of 2.14 ppb based upon a 2% market Therefore, it is expected that the source water. The primary use of these share for apples. Based on the addition proposed tolerances for corn models by the Agency at this stage is to of the proposed corn seed treatment use,
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the cancer DWLOC would be 2.12 ppb, information to indicate that toxic effects SUMMARY: EPA has received a specific representing only a minimal change. At produced by thiamethoxam would be exemption request from the Louisiana the currently registered maximum use cumulative with those of any other Department of Agriculture and Forestry rate of 0.125 lb. a.i./acre per growing chemical including another pesticide. to use the pesticide carbofuran (CAS No. season, EPA has used the SCI-GROW Therefore, Syngenta believes it is 1563–66–2) to treat up to 100,000 acres model to predict a ground water EEC of appropriate to consider only the of rice to control the rice weevil. 1.94 ppb; therefore, the cancer DWLOC potential risks of thiamethoxam in an Because this application for an (2.12 ppb) is not exceeded. For the aggregate risk assessment. emergency exemption program involves proposed corn seed treatment uses, the E. Safety Determination the use of a chemical which has been maximum use rate on a per acre basis the subject of a Special Review by EPA is 0.123 lb active ingredient. This 1. U.S. population. Syngenta under 40 CFR part 154, EPA is soliciting maximum rate (0.123 lb) would be concludes, as described above, that public comment on the exemption. applicable only to field corn and would there is reasonable certainty that no DATES: Comments, identified by docket represent only 0.18% of all corn acres harm to the U.S. population will result ID number OPP–2002–0124, must be grown. Ninety-seven percent of from aggregate acute or chronic dietary received on or before July 2, 2002. thiamethoxam treated corn (5.4% of all exposure to thiamethoxam residues corn acres grown) will be planted with including the proposed tolerances for ADDRESSES: Comments may be a maximum rate on a per acre basis of corn commodities. submitted by mail, electronically, or in 0.070 lbs a.i. per acre. Using EPA 2. Infants and children. Syngenta person. Please follow the detailed determined input values, the SCI-GROW concludes, as described above, that instructions for each method as model predicts an EEC of 1.90 ppb for there is reasonable certainty that no provided in Unit I. of the harm to infants and children will result the 0.123 lb rate and an EEC of 1.08 ppb SUPPLEMENTARY INFORMATION. To ensure from aggregate acute or chronic for the 0.070 lb rate. Neither of these proper receipt by EPA, it is imperative exposure to thiamethoxam residues EECs (1.90 or 1.08 ppb) exceeds the that you identify docket ID number including the proposed tolerances for cancer DWLOC (2.12 ppb). OPP–2002–0124 in the subject line on corn commodities. The SCI-GROW model uses extremely the first page of your response. conservative assumptions. However, F. International Tolerances FOR FURTHER INFORMATION CONTACT: Dan even when using the conservative SCI- There are no codex MRLs established GROW model, it can be concluded that Rosenblatt, Registration Division for residues of thiamethoxam on corn (7505C), Office of Pesticide Programs, the proposed corn seed treatment use of commodities. thiamethoxam presents a negligible risk Environmental Protection Agency, 1200 [FR Doc. 02–16276 Filed 6–26–02; 8:45 am] concern for exposure through drinking Pennsylvania Ave., NW., Washington, water. BILLING CODE 6560–50–S DC 20460; telephone number: (703) 2. Non-dietary exposure. 308–9366; fax number: (703) 308–5433; e-mail address: [email protected]. Thiamethoxam is not currently ENVIRONMENTAL PROTECTION registered for use on any sites that AGENCY SUPPLEMENTARY INFORMATION: would result in residential exposure. [OPP–2002–0124; FRL–7185–3] I. General Information D. Cumulative Effects A. Does this Action Apply to Me? The potential for cumulative effects of Carbofuran; Receipt of Application for thiamethoxam and other substances that Emergency Exemption, Solicitation of You may be potentially affected by have a common mechanism of toxicity Public Comment this action if you petition EPA for has also been considered. AGENCY: Environmental Protection emergency exemption under section 18 Thiamethoxam belongs to a new Agency (EPA). of FIFRA. Potentially affected categories pesticide chemical class known as the and entities may include, but are not ACTION: Notice. neonicotinoids. There is no reliable limited to:
Categories NAICS codes Examples of potentially affected entities
State government 9241 State agencies that petition EPA for section 18 pesticide exemption
This listing is not intended to be to a particular entity, consult the person and Proposed Rules,’’ and then look up exhaustive, but rather provides a guide listed under FOR FURTHER INFORMATION the entry for this document under the for readers regarding entities likely to be CONTACT. ‘‘Federal Register—Environmental regulated by this action. Other types of Documents.’’ You can also go directly to B. How Can I Get Additional entities not listed in the table in this the Federal Register listings at http:// Information, Including Copies of this unit could also be regulated. The North www.epa.gov/fedrgstr/. Document and Other Related American Industrial Classification Documents? 2. In person. The Agency has System (NAICS) codes have been established an official record for this provided to assist you and others in 1. Electronically. You may obtain action under docket ID number OPP– determining whether or not this action electronic copies of this document, and 2002–0124. The official record consists applies to certain entities. To determine certain other related documents that of the documents specifically referenced whether you or your business is affected might be available electronically, from in this action, any public comments by this action, you should carefully the EPA Internet Home Page at http:// received during an applicable comment examine the applicability provisions in www.epa.gov/. To access this period, and other information related to Unit II. If you have any questions document, on the Home Page select this action, including any information regarding the applicability of this action ‘‘Laws and Regulations,’’ ‘‘Regulations claimed as Confidential Business
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Information (CBI). This official record CBI. You may claim information that In the emergency exemption includes the documents that are you submit to EPA in response to this application, the Applicant asserts that physically located in the docket, as well document as CBI by marking any part or rice producers in Louisiana do not have as the documents that are referenced in all of that information as CBI. adequate alternatives to control the rice those documents. The public version of Information so marked will not be weevil and that carbofuran is the only the official record does not include any disclosed except in accordance with material that can be applied at this point information claimed as CBI. The public procedures set forth in 40 CFR part 2. in the growing season that will control version of the official record, which In addition to one complete version of this pest. The rice weevil has includes printed, paper versions of any the comment that includes any historically been an important pest for electronic comments submitted during information claimed as CBI, a copy of rice producers. The Applicant estimates an applicable comment period, is the comment that does not contain the that yield losses of 20 to 40% will be available for inspection in the Public information claimed as CBI must be experienced if this pest is not controlled Information and Records Integrity submitted for inclusion in the public by the requested emergency program. Branch (PIRIB), Rm. 119, Crystal Mall version of the official record. The Applicant asserts that there are #2, 1921 Jefferson Davis Hwy., Information not marked confidential weaknesses and limitations for the Arlington, VA, from 8:30 a.m. to 4 p.m., will be included in the public version alternative control measures that require Monday through Friday, excluding legal of the official record without prior use of carbofuran this growing season. holidays. The PIRIB telephone number notice. If you have any questions about In the past, granular carbofuran was is (703) 305–5805. CBI or the procedures for claiming CBI, commonly applied to control this pest C. How and to Whom Do I Submit please consult the person listed under in water-seeded rice. However, it is no Comments? FOR FURTHER INFORMATION CONTACT. longer registered for this use. The use of granular carbofuran, generally, was E. What Should I Consider as I Prepare You may submit comments through canceled following an agreement My Comments for EPA? the mail, in person, or electronically. To between FMC Corporation, the ensure proper receipt by EPA, it is You may find the following chemical’s manufacturer, and EPA in imperative that you identify docket ID suggestions helpful for preparing your 1991. For rice, use was permitted to number OPP–2002–0124 in the subject comments: continue until August 1999, after which line on the first page of your response. 1. Explain your views as clearly as 1. By mail. Submit your comments to: distribution, sale, and use of existing possible. stocks labeled for rice were not Public Information and Records 2. Describe any assumptions that you Integrity Branch (PIRIB), Information permitted. used. Since the cancellation of granular Resources and Services Division 3. Provide copies of any technical carbofuran, EPA has registered (7502C), Office of Pesticide Programs information and/or data you used that alternative chemicals for insect control (OPP), Environmental Protection support your views. on rice. Notably, an alternative rice Agency, 1200 Pennsylvania Ave., NW., 4. If you estimate potential burden or weevil product called fipronil (trade Washington, DC 20460. costs, explain how you arrived at the 2. In person or by courier. Deliver name, Icon) was approved by EPA in estimate that you provide. 1998. Fipronil is a contact and ingestion your comments to: Public Information 5. Provide specific examples to and Records Integrity Branch (PIRIB), insecticide that can be applied early in illustrate your concerns. the growing season to control rice Information Resources and Services 6. Offer alternative ways to improve Division (7502C), Office of Pesticide weevils. the notice. The main reason that the Applicant Programs (OPP), Environmental 7. Make sure to submit your Protection Agency, Rm. 119, Crystal believes this exemption is warranted is comments by the deadline in this the unexpected and novel efficacy Mall #2, 1921 Jefferson Davis Hwy., document. Arlington, VA. The PIRIB is open from failure of fipronil in many fields that 8. To ensure proper receipt by EPA, were treated this year with that 8:30 a.m. to 4 p.m., Monday through be sure to identify the docket ID number Friday, excluding legal holidays. The chemical. The efficacy issues connected assigned to this action in the subject to fipronil’s performance this year in PIRIB telephone number is (703) 305– line on the first page of your response. 5805. rice are believed to be connected with You may also provide the name, date, high levels of hydrogen sulfide gas 3. Electronically. You may submit and Federal Register citation. your comments electronically by e-mail which are building up in fields due to to: [email protected], or you can II. Background the presence of straw and stubble from the previous year’s rice crop. The submit a computer disk as described in A. What Action is the Agency Taking? Unit I.C.3. Do not submit any breakdown of this organic material information electronically that you Under section 18 of the Federal under anaerobic conditions (this consider to be CBI. Avoid the use of Insecticide, Fungicide, and Rodenticide involves water-seeded rice) is believed special characters and any form of Act (FIFRA) (7 U.S.C. 136p), at the to interfere with the performance of encryption. Electronic submissions will discretion of the Administrator, a fipronil. The high level of organic be accepted in WordPerfect 6.1/8.0 or Federal or State agency may be material in the fields is connected to ASCII file format. All comments in exempted from any provision of FIFRA reduced or no-till soil management electronic form must be identified by if the Administrator determines that practices. docket ID number OPP–2002–0124. emergency conditions exist which The Applicant also indicated that Electronic comments may also be filed require the exemption. Louisiana weather and equipment issues have online at many Federal Depository Department of Agriculture and Forestry prevented growers from using other Libraries. has requested the Administrator to issue alternative controls this year. Total yield a specific exemption for the use of loss estimates projected by the D. How Should I Handle CBI that I Want carbofuran on rice to control the rice Applicant range from $6.6 to $13.2 to Submit to the Agency? weevil. Information in accordance with million. Do not submit any information 40 CFR part 166 was submitted as part The Applicant proposed to make no electronically that you consider to be of this request. more than one application of a granular
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carbofuran product that contains 3% label provision for this use that requires Title: Japan/United States Eastbound active ingredient to 100,000 acres of rice a 60 day pre-harvest interval. Because of Freight Conference. in Louisiana. The proposed application these factors, EPA determined that a 15 Parties: rate called for 15 to 20 pounds of day comment period was not possible American President Lines, Ltd., product per acre (or 0.45 to 0.60 pound for this request. Hapag-Lloyd Container Linie, active ingredient per acre). Treatments The Agency is specifically seeking GmbH, may occur following permanent flood of input from the public and stakeholders Kawasaki Kisen Kaisha, Ltd., the rice fields, but, at minimum, 60 days on the scope and use terms of this Mitsui O.S.K. Lines, Ltd., prior to harvest. exemption connected to the acres that A.P. Moller-Maersk Sealand, Because EPA received additional might be treated but for which there is Nippon Yusen Kaisha, information from the Applicant in the currently no available product. In Orient Overseas Container Line days following the receipt of this particular, due to the product Limited, P&O Nedlloyd B.V., request which heightened the urgency availability issues mentioned above, a of this emergency exemption P&O Nedlloyd Limited, further determination related to the Wallenius Wilhelmsen Lines AS. application from the standpoint of the remaining 7,500 acres is needed. The Synopsis: The proposed agreement growers, the Agency has already public comments will help EPA amendment extends the suspension of authorized a limited number of rice determine whether the exemption the conference for another six months, producers who are currently should be revised to limit it to the 2,500 through January 31, 2003. experiencing a high level of pest acres or maintained up to the 10,000 infestation as a result of efficacy failure acre limit. Dated: June 21, 2002. following treatments of Icon (fipronil) to In order to obtain the greatest amount By Order of the Federal Maritime make treatments under this exemption. of input from this shortened comment Commission. Specifically, on June 19, 2002, EPA period, EPA is directly contacting Bryant L. VanBrakle, issued a section 18 authorization which several key affected stakeholders in Secretary. permits 6,000 pounds of carbofuran advance of this Federal Register [FR Doc. 02–16172 Filed 6–26–02; 8:45 am] active ingredient to be applied to 10,000 publication. In addition, EPA is BILLING CODE 6730–01–P acres of rice. The authorization limits preparing a general notification plan to treatments to those fields which were ensure that stakeholders are informed first treated with fipronil, but where, about this solicitation for comments. FEDERAL MARITIME COMMISSION nonetheless, high levels of pest The Agency will review and consider problems now exist. Information on this all comments received during the Ocean Transportation Intermediary exemption request, including the June comment period in determining License Revocations 19 authorization, is available at the whether to maintain the exemption as Docket. Since granular carbofuran is The Federal Maritime Commission granted on June 19, 2002 or modify the hereby gives notice that the following generally cancelled at this time, another specific exemption such that use is important factor that impacts the scope Ocean Transportation Intermediary limited to the 2,500 acres currently licenses have been revoked pursuant to of this exemption is the level of being treated with available product. available product. At this time, existing section 19 of the Shipping Act of 1984 stocks of granular carbofuran could List of Subjects (46 U.S.C. app. 1718) and the permit treatment to 2,500 acres of rice. regulations of the Commission Environmental protection, Pesticides pertaining to the licensing of Ocean New product would have to be and pests. manufactured for treatment of the Transportation Intermediaries, effective additional 7,500 acres. Carbofuran is Dated: June 24, 2002. on the corresponding date shown below: believed to be the only alternative Debra Edwards, License Number: 15837N. chemical means of control at this point Acting Director, Registration Division, Office Name: Air Sea Containers, Inc. in the growing season. of Pesticide Programs. Address: 2749 NW 82nd Avenue, Miami, FL 33122. EPA’s decision to permit treatments of [FR Doc. 02–16265 Filed 6–24–02; 3:07 pm] carbofuran for this use relates only to Date Revoked: May 12, 2002. growers able to certify that they BILLING CODE 6560–50–S Reason: Failed to maintain a valid experienced performance failure bond. connected to the use of fipronil. In License Number: 17180F. Name: American Logistic Co. Inc. addition, EPA anticipates that soil FEDERAL MARITIME COMMISSION management practices will be adopted Address: 10840 Warner Avenue, Suite that diminish the likelihood of Notice of Agreement(s) Filed 205, Fountain Valley, CA 92708. hydrogen sulfide build up in future Date Revoked: May 23, 2002. growing seasons. Therefore, EPA does The Commission hereby gives notice Reason: Failed to maintain a valid not anticipate that this emergency will of the filing of the following bond. be repeated. agreement(s) under the Shipping Act of License Number: 10743NF. EPA has decided to open a shortened 1984. Interested parties can review or Name: Edward M. Jones & Company, comment period and solicit input and obtain copies of agreements at the Inc. comments from the public for a 5 day Washington, DC offices of the Address: 2580 South 156th, period. In general, the length of a Commission, 800 North Capitol Street, Transiplex Bldg. A, Room 105, Seatac, comment period on an emergency NW., Room 940. Interested parties may WA 98158. exemption application is 15 days. submit comments on an agreement to Date Revoked: May 17, 2002. However, EPA is shortening this the Secretary, Federal Maritime Reason: Failed to maintain valid comment period to five days due to the Commission, Washington, DC 20573, bonds. limited time available to consider this within 10 days of the date this notice License Number: 16426N. request in light of the typical harvest appears in the Federal Register. Name: First Express International period for rice in Louisiana and also a Agreement No.: 011528–021. Corp.
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Address: 148–36 Guy R. Brewer Blvd., Reason: Failed to maintain valid License Number: 2308F. Suite 200, Jamaica, NY 11434. bonds. Name: United Van Lines Date Revoked: May 25, 2002. License Number: 15030N. International, Inc. Reason: Failed to maintain a valid Name: Super Container Line, Inc. Address: One United Drive, Fenton, bond. Address: 2801 NW 74th Avenue, MO 63026. License Number: 17200F. Suite 223, Box 49, Miami, FL 33122. Date Revoked: May 31, 2002. Name: Global Forwarding Corp. Date Revoked: May 12, 2002. Reason: Failed to maintain a valid Address: 10420 NW 37th Terrace, Reason: Failed to maintain a valid bond. Miami, FL 33178. bond. License Number: 17354N. Date Revoked: May 12, 2002. License Number: 4144F. Name: Wingar Logistics Inc. Reason: Failed to maintain a valid Name: Trade Management Services, bond. Address: 9690 Telstar Avenue, Suite Inc. 207, El Monte, CA 91731. License Number: 4297F. Address: 3105 Silby Memorial Hwy., Date Revoked: May 25, 2002. Name: Latin American Brokers, Inc. Eagan, MN 55121. Reason: Failed to maintain a valid Address: 1150 NW 72nd Avenue, Date Revoked: May 23, 2002. bond. #420, Miami, FL 33126. Reason: Failed to maintain a valid Date Revoked: May 25, 2002. bond. Sandra L. Kusumoto, Reason: Failed to maintain a valid License Number: 16237N. Director, Bureau of Consumer Complaints bond. Name: Trans-Union Container Line, and Licensing. License Number: 15102N. Inc. [FR Doc. 02–16207 Filed 6–26–02; 8:45 am] Name: Oceanic Cargo, Inc. Address: 5250 W. Century Blvd., BILLING CODE 6730–01–P Address: 10050 NW 116th Way, Suite Suite 312, Los Angeles, CA 90045. 15, Medley, FL 33178. Date Revoked: June 6, 2002. Date Revoked: May 15, 2002. Reason: Failed to maintain a valid FEDERAL MARITIME COMMISSION Reason: Failed to maintain a valid bond. Ocean Transportation Intermediary bond. License Number: 15460N. License; Reissuances License Number: 6053N. Name: Trident Line Corp. Name: Sino-Am Marine Company, Address: 1200 Fuller Road, Linden, Notice is hereby given that the Inc. NJ 07036. following Ocean Transportation Address: 601 East Linden Avenue, Date Revoked: May 12, 2002. Intermediary licenses have been Linden, NJ 07036. Reason: Failed to maintain a valid reissued by the Federal Maritime Date Revoked: May 25, 2002. bond. Commission pursuant to section 19 of Reason: Failed to maintain a valid License Number: 13778N. the Shipping Act of 1984, as amended bond. Name: Triton Shipping Co., Inc. by the Ocean Shipping Reform Act of License Number: 3610NF. Address: 8081 NW 67th Street, 1998 (46 U.S.C. app. 1718) and the Name: Sorenna. Miami, FL 33166. regulations of the Commission Address: 3051 E. Maria Street, Rancho Date Revoked: May 25, 2002. pertaining to the licensing of Ocean Dominguez, CA 90221. Reason: Failed to maintain a valid Transportation Intermediaries, 46 CFR Date Revoked: May 25, 2002. bond. 515.
License No. Name/address Date reissued
13354N ...... Binex Line Corp., 21818 S. Wilmington Avenue, Suite 404, Long Beach, CA 90810 ...... May 17, 2002. 14568F ...... Districargo, Inc., 8015 NW 29th Street, Miami, FL 33122 ...... May 1, 2002. 16267N ...... Trident Transport, International, Inc., 215 West Diehl Road, Naperville, IL 60563 ...... April 12, 2002. 15097N ...... United Globe Cargo, Inc., 2142 NW 99th Avenue, Miami, FL 33172 ...... May 12, 2002.
Sandra L. Kusumoto, as amended (46 U.S.C. app. 1718 and 46 Societe Monegasque de Transports Director, Bureau of Consumer Complaints CFR part 515). Maritimes, (Somotransma) dba Uni and Licensing. Persons knowing of any reason why Container Line (UCL), 14 Avenue [FR Doc. 02–16206 Filed 6–26–02; 8:45 am] the following applicants should not Crovetto, 98000 Monaco. Officers: BILLING CODE 6730–01–P receive a license are requested to Claudie Ballestra, Manager, contact the Office of Transportation (Qualifying Individual); Edmond Intermediaries, Federal Maritime Ruelle, Administrator. Intertech Associates (Atlantic) LLC, dba FEDERAL MARITIME COMMISSION Commission, Washington, DC 20573. I. T. Logistics, 52 Poplar Avenue, Fair Ocean Transportation Intermediary Non-Vessel Operating Common Carrier Haven, NJ 07704. Officers: Yong Zhao, License Applicants Ocean Transportation Intermediary Vice President, (Qualifying Applicants Individual); John Knapp, President. Notice is hereby given that the Benison Trans, Corp., 325 W. 38th following applicants have filed with the Trimex Group, Incorporated dba Street, #202, New York, NY 10019. Federal Maritime Commission an Trimex, Logistics, Inc. & Trimex Officers: Inho Cho, President, application for license as a Non-Vessel International, Inc., 28312 Industrial (Qualifying Individual); OK Y. Kim, Operating Common Carrier and Ocean Blvd., Suite C, Hayward, CA 94545. Secretary. Freight Forwarder—Ocean Officers: Kab Young Lee, Vice American Global Forwarding, LLC, 125 Transportation Intermediary pursuant to President, (Qualifying Individual); NE., 9th Street, Miami, FL 33132. section 19 of the Shipping Act of 1984 Edward S. Park, President. Officers: Richard G. Rovirosa,
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Managing Partner, (Qualifying the trust, Wolf Point, Montana; to gain Unless otherwise noted, comments Individual); Frank V. Rovirosa, control of Western Holding Company of regarding each of these applications Managing Partner. Wolf Point, Wolf Point, Montana, and must be received at the Reserve Bank ACX Logistics, Inc., 9133 S. La Cienega thereby indirectly gain control of indicated or the offices of the Board of Blvd., #260, Inglewood, CA 90301. Western Bank of Wolf Point, Wolf Point, Governors not later than July 22, 2002. Officer: Tsu-Wei Lin, President, Montana. A. Federal Reserve Bank of St. Louis (Qualifying Individual). B. Federal Reserve Bank of San (Randall C. Sumner, Vice President) 411 Non-Vessel Operating Common Carrier Francisco (Maria Villanueva, Consumer Locust Street, St. Louis, Missouri and Ocean Freight Forwarder Regulation Group) 101 Market Street, 63166–2034: Transportation Intermediary San Francisco, California 94105–1579: 1. First Delta Bankshares, Inc., Applicants 1. Frederick K. Freeman, Betty J. Blytheville, Arkansas; to acquire 100 Freeman, Suzanne L. McQuaid, Amy C. percent of the voting shares of Bank of VSH-United (U.S.A.) L.L.C., 8055 N.W. Schreck, and Bellevue Square Managers Trumann, Trumann, Arkansas. 77th Court, Suite #3, Medley, FL I Limited Partnership, Bellevue, 2. Mid-Missouri Bancshares, Inc., 33166. Officers: Jeanine M. Liong-A- Washington, to retain voting shares of Springfield, Missouri; to acquire 22.25 San, Office Manager, (Qualifying First Mutual Bancshares, Inc., Bellevue, percent of the voting shares of Central Individual); Patrick Healy, Manager. Washington, and thereby indirectly States Bancshares, Inc., Springfield, Universal Logistics Inc., 145–32 157th retain voting shares of First Mutual Missouri, and thereby indirectly acquire Street, Jamaica, NY 11434. Officers: Bank, Bellevue, Washington. voting shares of Webb City Bank, Webb Ming Wong, President, (Qualifying City, Missouri. Individual). Board of Governors of the Federal Reserve System, June 21, 2002. 3. Tri-County Bancshares, Inc., Beecher City, Illinois; to become a bank Ocean Freight Forwarder—Ocean Robert deV. Frierson, Transportation Intermediary holding company by acquiring 100 Deputy Secretary of the Board. Applicants percent of the voting shares of First [FR Doc. 02–16213 Filed 6–26–02; 8:45 am] State Bank of Beecher City, Beecher LCL America Inc., 29 Burgess Drive, BILLING CODE 6210–01–S Glendale Heights, IL 60139. Officers: City, Illinois. Kathleen A. Marston, Vice President, B. Federal Reserve Bank of Kansas City (Susan Zubradt, Assistant Vice (Qualifying Individual); Clayton D. FEDERAL RESERVE SYSTEM Lyman, President. President) 925 Grand Avenue, Kansas City, Missouri 64198–0001: Dated: June 21, 2002. Formations of, Acquisitions by, and Mergers of Bank Holding Companies 1. Nebraska Bankshares, Inc., Farnam, Bryant L. VanBrakle, Nebraska; to retain 12.7 percent and to Secretary. The companies listed in this notice acquire an additional .3 percent , for a [FR Doc. 02–16205 Filed 6–26–02; 8:45 am] have applied to the Board for approval, total of 13 percent of the voting shares BILLING CODE 6730–01–P pursuant to the Bank Holding Company of Stockmens Financial Corporation, Act of 1956 (12 U.S.C. 1841 et seq.) Rapid City, South Dakota, and thereby (BHC Act), Regulation Y (12 CFR part indirectly acquire additional voting FEDERAL RESERVE SYSTEM 225), and all other applicable statutes shares of Security First Bank, Sidney, and regulations to become a bank Nebraska; BW Holdings, Inc., Castle Change in Bank Control Notices; holding company and/or to acquire the Rock, Colorado; and BankWest, Castle Acquisition of Shares of Bank or Bank assets or the ownership of, control of, or Rock, Colorado. Holding Companies the power to vote shares of a bank or Board of Governors of the Federal Reserve The notificants listed below have bank holding company and all of the System, June 21, 2002. applied under the Change in Bank banks and nonbanking companies Robert deV. Frierson, Control Act (12 U.S.C. 1817(j)) and owned by the bank holding company, Deputy Secretary of the Board. § 225.41 of the Board’s Regulation Y (12 including the companies listed below. [FR Doc. 02–16212 Filed 6–26–02; 8:45 am] CFR 225.41) to acquire a bank or bank The applications listed below, as well BILLING CODE 6210–01–S holding company. The factors that are as other related filings required by the considered in acting on the notices are Board, are available for immediate set forth in paragraph 7 of the Act (12 inspection at the Federal Reserve Bank FEDERAL RESERVE SYSTEM indicated. The application also will be U.S.C. 1817(j)(7)). [Docket No. R–1124] The notices are available for available for inspection at the offices of immediate inspection at the Federal the Board of Governors. Interested Privacy Act of 1974; Notice of Reserve Bank indicated. The notices persons may express their views in Amendment of System of Records also will be available for inspection at writing on the standards enumerated in the office of the Board of Governors. the BHC Act (12 U.S.C. 1842(c)). If the AGENCY: Board of Governors of the Interested persons may express their proposal also involves the acquisition of Federal Reserve System. views in writing to the Reserve Bank a nonbanking company, the review also ACTION: Notice; amendment of one indicated for that notice or to the offices includes whether the acquisition of the system of records. of the Board of Governors. Comments nonbanking company complies with the must be received not later than July 11, standards in section 4 of the BHC Act SUMMARY: In accordance with the 2002. (12 U.S.C. 1843). Unless otherwise Privacy Act, the Board of Governors of A. Federal Reserve Bank of noted, nonbanking activities will be the Federal Reserve System (Board) is Minneapolis (Julie Stackhouse, Vice conducted throughout the United States. publishing notice of the amendment of President) 90 Hennepin Avenue, Additional information on all bank one system of records, entitled SCF- Minneapolis, Minnesota 55480–0291: holding companies may be obtained Survey of Consumer Finances (BGFRS– 1. The R.J. Doornek Trust and R.J. from the National Information Center 20). We invite public comment on this Doornek, as an individual and trustee of website at www.ffiec.gov/nic/. amended system of records.
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DATES: Comments must be received on records is being filed with the Chair of (b) A control file containing general or before July 29, 2002. the House Committee on Government geographic characteristics and technical ADDRESSES: Comments, which should Reform and Oversight, the Chair of the information describing survey refer to Docket No. R–1124, may be Senate Committee on Governmental participation. No identifying mailed to Ms. Jennifer J. Johnson, Affairs, and the Office of Management information is included in this category. Secretary, Board of Governors of the and Budget. This new system of records (c) For a part of the survey sample, Federal Reserve System, 20th Street and will become effective on August 1, 2002, information from statistical records Constitution Avenue, NW., Washington, without further notice, unless the Board derived from individual tax returns, DC 20551 or mailed electronically to publishes a notice to the contrary in the including a social security number but [email protected]. Federal Register. containing no other identifying Comments addressed to Ms. Johnson information. BGFRS–20 also may be delivered to the Board’s (d) Files of information matched to mail room between 8:45 a.m. and 5:15 SYSTEM NAME: the survey data by high-level p.m. weekdays and to the security SCF—Survey of Consumer Finances. characteristics, such as general location, control room outside of those hours. occupation, banking market, etc. No The mail room and the security control SECURITY CLASSIFICATION: identifying information is included in room are accessible from the Eccles None. this category. Building courtyard entrance, located on AUTHORITY FOR MAINTENANCE OF THE SYSTEM: 20th Street between Constitution SYSTEM LOCATION(S): Avenue and C Street, NW. Comments (1) National Opinion Research Center 12 U.S.C. 225a and 15 U.S.C. 1601 may be inspected in Room MP–500 at the University of Chicago (NORC), note. 155 East 60th Street, Chicago, IL 60637. between 9 a.m. and 5 p.m. on weekdays PURPOSE(S): pursuant to § 261.12, except as provided (2) Board of Governors of the Federal in § 261.14, of the Board’s Rules Reserve System, 20th & C Streets, NW, The data in the system described as Regarding Availability of Information, Washington, DC 20551. (1)(a) under ‘‘Categories of records in 12 CFR 261.12 and 261.14. the system’’ provide a basis for the CATEGORIES OF INDIVIDUALS COVERED BY THE statistical analysis of consumer financial FOR FURTHER INFORMATION CONTACT: SYSTEM: status and behavior. All other Arthur Kennickell, Project Director, Every three years beginning in 1983, information in the system is used for the Division of Research and Statistics (202/ the Board of Governors of the Federal statistical purposes of structuring, 452–2247); or Elaine M. Boutilier, Reserve System (Board) has sponsored a conducting, and processing the survey. Managing Senior Counsel, Legal survey of U.S. households to obtain Data in the system from (1)(a) and Division (202/452–2418), Board of information on the current state of (1)(b) and unidentified data from (1)(c) Governors of the Federal Reserve households’ finances. For each instance are used by staff at the Board to address System, 20th Street and Constitution of the survey, a national sample of policy and other statistical research Avenue, NW., Washington, DC 20551. approximately 10,000 households is questions in economics and topics of For users of the Telecommunications selected using two statistical sampling technical survey methodology. A Device for the Deaf (TDD) only, contact procedures. Approximately 5,000 version of the data described as (1)(a) 202/263–4869. households voluntarily agree to under ‘‘Categories of records in the SUPPLEMENTARY INFORMATION: The Board participate in a detailed interview, system’’ is further processed statistically is amending its system of records for the which is conducted either in person or to minimize the possibility of Survey of Consumer Finances (SCF), to by telephone at the convenience of the identification of survey participants reflect the change in the independent participant. based on characteristics or combinations contractor used to conduct the survey of characteristics in the data; that CATEGORIES OF RECORDS IN THE SYSTEM: and to update the description of the altered information is made available to records maintained in the system. This (1) NORC, the independent contractor the public. The public version of the system of records contains statistical for survey data collection, holds three data forms a key part of the national information regarding a periodic (every types of files: statistical system and provides a basis three years) survey that the Board has (a) Answers given by survey for a wide variety of government, sponsored since 1983 to obtain participants in the course of the academic, and other statistical research. information on the current state of U.S. administration of the survey The system is maintained for households’ finances. Approximately questionnaire. No identifying statistical purposes only and is not used 5000 households voluntarily agree to information is included in this category. in whole or in part in making any respond to a survey questionnaire, (b) Answers given by interviewers to determination about benefits or other which is administered through a questions about the administration, or rights of any identifiable individual. It detailed interview, conducted either in attempted administration, of the survey consist solely of ‘‘statistical records’’ as person or by telephone at the interview, and answers given by defined in the Privacy Act (5 U.S.C. convenience of the participant. The interviewers to questions about the area 552(a)(6)). names and addresses of each participant around the sample addresses. No are confidential, and extraordinary steps identifying information is included in ROUTINE USES OF RECORDS MAINTAINED IN THE are taken to uncouple the identities of this category. SYSTEM, INCLUDING CATEGORIES OF USERS AND the participants from the information (c) A control file containing the name, THE PURPOSE OF SUCH USES: they provide. The data collected provide address, other identifying or locating a. Prior to the completion of data a representative picture of what characteristics of members of the survey collection, the survey contractor uses Americans own—from houses and cars sample, and technical information information in the system to devise and to stocks and bonds—how and how describing survey participation. attempt to execute a plan to request an much they borrow and how they bank. (2) The Board holds five types of files: interview with all members of the In accordance with 5 U.S.C. 552a(r), a (a) All information included in (1)(a) survey sample; access to such report of this amended system of and (1)(b). information is available only to those
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involved in the sample design and its SAFEGUARDS: Simultaneously, with requesting implementation in the field. During periods of data collection, the notification of inclusion in the system of b. Upon completion of data collection, survey contractor limits access to records, the individual may request access by the contractor to the system is identifying information only to staff record access as described in the limited to the specific information directly engaged in data collection, following section ‘‘Record access necessary to complete the initial managing the survey, and processing the procedures.’’ processing of the data and to respond to data; access varies according to what is Arthur Kennickell, Project Director, requests from survey participants. needed to perform each task; identifying Survey of Consumer Finances, Monetary c. At the Board, access to data from information is maintained in files and Financial Studies Section, Division the system is available only to staff separate from other data. After the of Research and Statistics, Room M– members who have the primary completion of data collection, personnel 1412, Board of Governors of the Federal responsibility for conducting and at the facilities of the contractor are Reserve System, Washington, DC 20551. processing the survey. Access by those allowed to have access to information individuals is allowed for the following that would identify members of the RECORD ACCESS PROCEDURES: purposes: structuring, conducting, and survey sample only for specific Individuals who, through the preparing the survey data and purposes authorized by their project notification procedures set out above, performing statistical analysis of the director, and that are connected with have established that the system of data. A particularly important routine attempts to validate whether the correct records contains information pertaining activity of these responsible individuals person was interviewed, to address to them may request access to those is a close review of the individual other narrow statistical issues, or to records by writing to the government records described as (1)(a) under respond to requests from sample project director at the address given ‘‘Categories of records in the system’’ for members for information. All electronic above. The government project director preparation of a public version of the files are held in secure computer will notify the individual as to the place data that has been subjected to systems, and paper files are held in and time for access to the record(s). If statistical procedures to minimize the locked cabinets. the requester prefers, and if the possibility that any participant might be At the Board, all potentially information requested is not too identified by a characteristic or set of identifiable files are maintained in voluminous, the material may be characteristics in the data. secure computer systems, locked files, mailed. d. Disclosure may be made to a or locked cabinets, and access to those CONTESTING RECORD PROCEDURES: congressional office from the record of files is restricted to staff directly an individual in response to an inquiry responsible for the production of the Individuals who seek to contest from the congressional office on behalf survey. records in this system should contact of that individual. the government project director at the RETENTION AND DISPOSAL: address given above, reasonably identify DISCLOSURE TO CONSUMER REPORTING All files containing identifying the record(s), specify the information AGENCIES: information held by NORC are being contested and the rationale for the Not applicable. destroyed within three years of the challenge, and supply the information completion of work on a given to be substituted. POLICIES AND PRACTICES FOR STORING, execution of the SCF; all backup records RETRIEVING, ACCESSING, RETAINING, AND used to maintain the integrity of such RECORD SOURCE CATEGORIES: DISPOSING OF RECORDS IN THE SYSTEM: files are also destroyed. All files Answers to survey questions are STORAGE: maintained by the Board will be obtained from participants. Other maintained until such time as the Magnetic disks, CD–ROMs, magnetic information about the steps taken to survey may be discontinued, at which tape. obtain an interview, the progress of the time all files containing identifying interview, and the general RETRIEVABILITY: information will be destroyed except as characteristics of the neighborhood of otherwise required by law governing The contractor stores data described the sample address, is obtained from the preservation of archival records. A at (1)(a) and (1)(b) under ‘‘Categories of survey interviewers. Technical sample version of the SCF, statistically altered records in the system’’ in an electronic design information for a geographically to protect the identity of the survey form separately from identifying based part of the survey sample is participants, is placed in the public information described in (1)(c). A set of obtained from NORC; for sample domain. identification numbers generated for members in the other part of the sample, administrative purposes may be used to SYSTEMS MANAGER(S) AND ADDRESS: statistical records derived from individual tax returns are obtained from link these files, but access to linked Arthur Kennickell, Project Director, the Statistics of Income Division of the information is restricted to purposes Survey of Consumer Finances, Monetary Internal Revenue Service. necessary for the collection and and Financial Studies Section, Division preliminary processing of the survey of Research and Statistics, Board of SYSTEM EXEMPTED FROM CERTAIN PROVISIONS data. The responsible staff at the Board Governors of the Federal Reserve OF THE ACT: maintain files described at (2)(c) System, Washington, DC 20551. separately from other files. A set of None. identification numbers may be used to NOTIFICATION PROCEDURE: By order of the Board of Governors of the link the information described at (2)(c) An individual requesting notice as to Federal Reserve System, acting through the with the other information, and access whether this system contains Secretary of the Board under delegated to such information is restricted to those information pertaining to him or her authority, June 20, 2002. among the responsible staff with should write to the government project Jennifer J. Johnson, particular needs in structuring, director, at the address shown below, Secretary of the Board. conducting, preparing, and analyzing enclosing a notarized statement of his or [FR Doc. 02–16192 Filed 6–26–02; 8:45 am] the survey data. her full name and current address. BILLING CODE 6210–01–P
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OFFICE OF GOVERNMENT ETHICS Federal Ethics Law Reform (March determination of health disparities in racial 1989). Since that time, a number of and ethnic populations. The focus will be on Review of Criminal Conflict of Interest developments have occurred, including, State related issues in the collection and use Statutes; Opportunity for Comment among others: sustained Government of data on race and ethnicity. Invited efforts toward privatization of certain panelists will address State and local AGENCY: Office of Government Ethics collection of data and race and ethnicity, use (OGE). functions; a growing emphasis on commercialization of Government- of mixed race data, measurement of ethnic ACTION: Notice. developed products; ever-increasing identity and perspectives on variables beyond race and ethnicity needed to SUMMARY: reliance on personnel with scientific The Office of Government determine health disparities in racial and Ethics is conducting a review of the and technological expertise; and a series of decisions by the courts that have ethnic groups. criminal conflict of interest statutes, 18 Notice: In the interest of security, the U.S.C. 202–209. This notice provides called into question the appropriate scope of certain restrictions on the Department has instituted stringent the public and agencies an opportunity procedures for entrance to the Hubert H. to comment. outside activities of Federal employees, e.g., Van Ee v. EPA, 202 F.3d 296 (D.C. Humphrey building by non-government DATES: July 29, 2002. employees. Thus, persons without a Cir. 2000). The Office of Government government identification card will need to ADDRESSES: Send any comments to the Ethics’ own experience in applying have the guard call for an escort to the Office of Government Ethics, Suite 500, these laws over the years has led us to meeting. 1201 New York Avenue, NW., question whether some of the current Washington, DC 20005–3917, Attention: Contact Person for More Information: restrictions may be unnecessarily broad. Substantive program information as well as Mr. Stuart D. Rick. Comments also may At the same time, we also believe there be sent electronically to OGE’s Internet summaries of meetings and a roster of may be areas in which the current laws committee members may be obtained from E-mail address at [email protected]. For E- are too narrow to address real conflicts. mail messages, the subject line should Susan G. Queen, Ph.D., Deputy Director, As part of its review, OGE invites include the following reference— Division of Information and Analysis, Health members of the public to express their ’’Comments Regarding Criminal Conflict Resources and Services Administration, views concerning the need for change to of Interest Law Review.’’ Room 11–05, 5600 Fishers Lane, Rockville, the criminal conflict of interest statutes. MD 20857, telephone: (301) 443–1129; or FOR FURTHER INFORMATION CONTACT: Interested persons may submit written Marjorie S. Greenberg, Executive Secretary, Stuart D. Rick, Deputy General Counsel, comments to OGE by July 29, 2002. NCVHS, National Center for Health Statistics, Office of Government Ethics; Although numerous agency ethics Centers for Disease Control and Prevention, Telephone: 202–208–8000; TDD: 202– officials already have provided Room 1100, Presidential Building, 6525 208–8025; FAX: 202–208–8037. comments concerning this matter in Belcrest Road, Hyattsville, Maryland 20782, SUPPLEMENTARY INFORMATION: In a report written submissions and/or meetings telephone: (301) 458–4245. Information also to Congress last year, the Office of with OGE, any interested agencies also is available on the NCVHS home page of the Government Ethics announced its are invited to submit any additional HHS Web site: http://www.ncvhs.hhs.gov/ intention to examine whether the comments they may have in response to where an agenda for the meeting will be criminal conflict of interest laws could this notice. posted when available. be simplified or otherwise improved Approved: June 20, 2002. without sacrificing the necessary Dated: June 18, 2002. protection they provide for a fair and Amy L. Comstock, James Scanlon, impartial Government process. Office of Director, Office of Government Ethics. Director, Division of Data Policy, Office of Government Ethics, Report on [FR Doc. 02–16256 Filed 6–26–02; 8:45 am] the Assistant Secretary for Planning and Improvements to the Financial BILLING CODE 6345–01–P Evaluation. Disclosure Process for Presidential [FR Doc. 02–16180 Filed 6–26–02; 8:45 am] Nominees 21–22 (April 2001) (available BILLING CODE 4151–05–M on OGE’s website, www.usoge.gov, DEPARTMENT OF HEALTH AND under ‘‘Forms, Publications & Other HUMAN SERVICES Ethics Documents’’). Pursuant to its DEPARTMENT OF HEALTH AND authorities under section 402 of the National Committee on Vital and Health HUMAN SERVICES Ethics in Government Act of 1978, as Statistics: Meeting amended (5 U.S.C. appendix), the Office Centers for Disease Control and Pursuant to the Federal Advisory of Government Ethics is now Prevention Committee Act, the Department of conducting a review of these statutes, Health and Human Services announces which are codified at 18 U.S.C. 202– the following advisory committee [60Day–02–63] 209. meeting. The Office of Government Ethics is Proposed Data Collections Submitted evaluating whether the conflict of Name: National Committee on Vital and for Public Comment and interest laws are adequately tailored to Health Statistics (NCVHS), Subcommittee on Recommendations their legislative purposes, in light of the Populations. realities of modern Government. The Time and Date: 8:30 a.m. to 5 p.m., July 18, In compliance with the requirement conflict of interest statutes have existed 2002. of section 3506(c)(2)(A) of the Place: Hubert H. Humphrey Building, in more or less their current form for Room 705A, 200 Independence Avenue SW., Paperwork Reduction Act of 1995 for nearly 40 years, and the last Washington, DC 20201. opportunity for public comment on comprehensive examination of the Status: Open. proposed data collection projects, the conflict of interest statutes occurred in Purpose: The Subcommittee on Centers for Disease Control and 1989. See To Serve With Honor: Report Populations, NCVHS, is holding a hearing to Prevention (CDC) will publish periodic of the President’s Commission on discuss issues relating to statistics for the summaries of proposed projects. To
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request more information on the Program Reporting System, (OMB No. Assisted Reproductive Technology proposed projects or to obtain a copy of 0920–0556)—Extension—National (SART) to comply with the the data collection plans and Center for Chronic Disease Prevention requirements of the FCSRCA. The instruments, call the CDC Reports and Health Promotion (NCCDPHP), reporting system includes all ART Clearance Officer on (404) 498–1210. Centers for Disease Control and cycles initiated by any of the Comments are invited on: (a) Whether Prevention (CDC). approximately 400 ART programs in the the proposed collection of information Background: Section 2(a) of Pub. L. United States, and covers the pregnancy is necessary for the proper performance 102–493 (known as the Fertility Clinic outcome of each cycle, as well as a of the functions of the agency, including Success Rate and Certification Act of number of data items deemed important whether the information shall have 1992 (FCSRCA), 42 U.S.C. 263a–1(a)) to explain variability in success rates practical utility; (b) the accuracy of the requires that each assisted reproductive across clinics and across individuals. agency’s estimate of the burden of the technology (ART) program shall Data is to be collected through computer proposed collection of information; (c) annually report to the Secretary through software developed by SART in ways to enhance the quality, utility, and the Centers for Disease Control and consultation with CDC. clarity of the information to be Prevention—(1) pregnancy success rates collected; and (d) ways to minimize the achieved by such ART program, and (2) In developing the definition of burden of the collection of information the identity of each embryo laboratory pregnancy success rates and the list of on respondents, including through the used by such ART program and whether data items to be reported, CDC has use of automated collection techniques the laboratory is certified or has applied consulted with representatives of SART, or other forms of information for such certification under this act. the American Society for Reproductive technology. Send comments to Anne The Centers for Disease Control and Medicine, and RESOLVE, the National O’Connor, CDC Assistant Reports Prevention (CDC) is seeking to extend Infertility Association (a national, Clearance Officer, 1600 Clifton Road, approval of a reporting system for nonprofit consumer organization), as MS–D24, Atlanta, GA 30333. Written Assisted Reproductive Technology well as a variety of individuals with comments should be received within 60 (ART) Program from the Office of expertise and interest in this field. The days of this notice. Management and Budget (OMB). This average annual cost to the respondent, Proposed Project: Assisted reporting system has been designed in including data entry labor and fees, is Reproductive Technology (ART) collaboration with the Society for estimated to be $2,140.
Number of re- Average bur- Respondents Number of re- sponses/re- den/response Total burden spondents spondent (in hours) (in hours)
ART Clinics ...... 400 220 5/60 7,333
Total ...... 7,333
Dated: June 20, 2002. Committee for Diabetes Prevention and DEPARTMENT OF HEALTH AND Nancy E. Cheal, Control Programs, Centers for Disease HUMAN SERVICES Acting Deputy Director for Policy, Planning Control and Prevention, of the and Evaluation, Centers for Disease Control Department of Health and Human Centers for Disease Control and and Prevention. Services, 1600 Clifton Road, NE., m/s Prevention [FR Doc. 02–16178 Filed 6–26–02; 8:45 am] K–10, Atlanta, Georgia 30341–3724. Disease, Disability, and Injury BILLING CODE 4163–18–P Telephone (770) 488–5000, or fax (770) Prevention and Control Special 488–5966. Emphasis Panel: Traumatic Brain DEPARTMENT OF HEALTH AND The Director, Management Analysis Injury Follow-Up Registry and HUMAN SERVICES and Services Office, has been delegated Surveillance of Traumatic Brain Injury the authority to sign Federal Register in the Emergency Department, Centers for Disease Control and notices pertaining to announcements of Program Announcement #02073 Prevention meetings and other committee In accordance with section 10(a)(2) of management activities, for both the Translation Advisory Committee for the Federal Advisory Committee Act Centers for Disease Control and (Pub. L. 92–463), the Centers for Disease Diabetes Prevention and Control Prevention and the Agency for Toxic Programs: Notice of Charter Renewal Control and Prevention (CDC) Substances and Disease Registry. announces the following meeting: This gives notice under the Federal Dated: June 21, 2002. Name: Disease, Disability, and Injury Advisory Committee Act (Public Law John Burckhardt, Prevention and Control Special Emphasis 92–463) of October 6, 1972, that the Panel (SEP): Traumatic Brain Injury Follow- Translation Advisory Committee for Acting Director, Management Analysis and Services Office, Centers for Disease Control Up Registry and Surveillance of Traumatic Diabetes Prevention and Control and Prevention. Brain Injury in the Emergency Department, Programs of the Centers for Disease Program Announcement #02073. Control and Prevention, of the [FR Doc. 02–16223 Filed 6–26–02; 8:45 am] Times and Dates: 2 p.m.–2:15 p.m., July Department of Health and Human BILLING CODE 4163–18–P 12, 2002 (Open); 2:15 p.m.–4 p.m., July 12, Services, has been renewed for a 2-year 2002 (Closed). period extending through June 15, 2004. Place: Teleconference number: 800.713.1971. FOR FURTHER INFORMATION CONTACT: Status: Portions of the meeting will be Frank Vinicor, M.D., Executive closed to the public in accordance with Secretary, Translation Advisory provisions set forth in section 552b(c) (4) and
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(6), Title 5 U.S.C., and the Determination of Contact Person for More Information: one used in followup survey interviews the Director, Management Analysis and Theodore J. Meinhardt, Associate Director for with persons reported to the national Services Office, CDC, pursuant to Public Law Management and Operations, 4770 Buford Vaccine Adverse Event Reporting 92–463. Highway, MS–K38, Atlanta, Georgia 30341, System (VAERS) as having developed Matters To Be Discussed: The meeting will 770.488.2505. include the review, discussion, and The Director, Management Analysis and joint problems or arthropathy following evaluation of applications received in Services Office has been delegated the Lyme disease vaccine administration. response to PA# 02073. authority to sign Federal Register notices DATES: Submit written or electronic Contact Person for More Information: Dr. pertaining to announcements of meetings and comments on the collection of Richard Sattin, Associate Director for other committee management activities, for information by August 26, 2002. Science, National Center for Injury both the Centers for Disease Control and Prevention and Control, CDC, 2495 Flowers Prevention and the Agency for Toxic ADDRESSES: Submit electronic Road, Atlanta, Georgia 30341; 770.488.4330. Substances and Disease Registry. comments on the collection of The Director, Management Analysis and Dated: June 21, 2002. information to http:// Services Office has been delegated the John C. Burckhardt, www.accessdata.fda.gov/scripts/oc/ authority to sign Federal Register notices dockets/edockethome.cfm. Submit Acting Director, Management Analysis and pertaining to announcements of meetings and written comments on the collection of other committee management activities, for Services Office, Centers for Disease Control and Prevention (CDC). information to the Dockets Management both the Centers for Disease Control and Branch (HFA–305), Food and Drug Prevention and the Agency for Toxic [FR Doc. 02–16298 Filed 6–26–02; 8:45 am] Administration, 5630 Fishers Lane, rm. Substances and Disease Registry. BILLING CODE 4163–18–P 1061, Rockville, MD 20852. All Dated: June 21, 2002. comments should be identified with the John C. Burckhardt, DEPARTMENT OF HEALTH AND docket number found in brackets in the Acting Director, Management Analysis and HUMAN SERVICES heading of this document. Services Office, Centers for Disease Control and Prevention (CDC). FOR FURTHER INFORMATION CONTACT: Food and Drug Administration Jonna Capezzuto, Office of Information [FR Doc. 02–16224 Filed 6–26–02; 8:45 am] [Docket No. 02N–0259] Resources Management (HFA–250), BILLING CODE 4163–18–P Food and Drug Administration, 5600 Agency Information Collection Fishers Lane, Rockville, MD 20857, DEPARTMENT OF HEALTH AND Activities; Proposed Collection; 301–827–4659. HUMAN SERVICES Comment Request; Telephone SUPPLEMENTARY INFORMATION: Under the Questionnaire Administration to PRA (44 U.S.C. 3501–3520), Federal Centers for Disease Control and Control Subjects Recruited into FDA agencies must obtain approval from the Prevention Lyme Vaccine Safety Study, ‘‘A Case- Office of Management and Budget Control Study of HLA Type and T-Cell (OMB) for each collection of [Program Announcement #02003] Reactivity to Recombinant Outer information they conduct or sponsor. Surface Protein A and Human Disease, Disability, and Injury ‘‘Collection of information’’ is defined Leukocyte Function-Associated in 44 U.S.C. 3502(3) and 5 CFR Prevention and Control Special Antigen-1’’ Emphasis Panel: Community-Based 1320.3(c) and includes agency requests Participatory Prevention Research AGENCY: Food and Drug Administration, or requirements that members of the HHS. public submit reports, keep records, or In accordance with section 10(a)(2) of provide information to a third party. ACTION: Notice. the Federal Advisory Committee Act Section 3506(c)(2)(A) of the PRA (44 (Pub. L. 92–463), the Centers for Disease SUMMARY: The Food and Drug U.S.C. 3506(c)(2)(A)) requires Federal Control and Prevention (CDC) Administration (FDA) is announcing an agencies to provide a 60-day notice in announces the following meeting: opportunity for public comment on the the Federal Register concerning each Name: Disease, Disability, and Injury proposed collection of certain proposed collection of information, Prevention and Control Special Emphasis information by the agency. Under the before submitting the collection to OMB Panel (SEP): Community-Based Participatory Paperwork Reduction Act of 1995 (the for approval. To comply with this Prevention Research, Program PRA), Federal agencies are required to requirement, FDA is publishing notice Announcement #02003, Supplemental publish notice in the Federal Register of the proposed collection of Review. concerning each proposed collection of information set forth in this document. Times and Dates: 10 a.m.–10:25 a.m., July information, and to allow 60 days for With respect to the following 8, 2002 (Open), 10:30 a.m.–12 noon, July 8, 2002 (Closed). public comment in response to the collection of information, FDA invites Place: Teleconference number: notice. This notice solicits comments on comments on: (1) Whether the proposed 404.639.4100, Conference Code 935293. the use of a survey questionnaire to be collection of information is necessary Status: Portions of the meeting will be administered by telephone interview to for the proper performance of FDA’s closed to the public in accordance with control subjects recruited into and functions, including whether the provisions set forth in section 552b(c) (4) and participating in a vaccine safety study information will have practical utility; (6), Title 5 U.S.C., and the Determination of conducted by FDA to investigate reports (2) the accuracy of FDA’s estimate of the the Director, Management Analysis and of arthritis following administration of burden of the proposed collection of Services Office, CDC, pursuant to Public Law the Lyme disease vaccine. Informed information, including the validity of 92–463. Matters to be Discussed: The meeting will consent for administration of this the methodology and assumptions used; include the review, discussion, and questionnaire will have been received (3) ways to enhance the quality, utility, evaluation of applications received in prior to the interview, and the interview and clarity of the information to be response to PA# 02003. is to be conducted at a time specified by collected; and (4) ways to minimize the Note: Due to administrative oversight, this the control subject at the time of initial burden of the collection of information notice is being published less than fifteen recruitment into this study. This on respondents, including through the days prior to the meeting date. questionnaire is an abridged version of use of automated collection techniques,
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when appropriate, and other forms of powers (including conducting research) is to be conducted at a time specified by information technology. to carry out effectively the mission of the control subject at the time of initial FDA. These sections of the act enable recruitment into this study. Case and Telephone Questionnaire FDA to enhance consumer protection Administration to Control Subjects control subjects should have similar age, from risks associated with medical Recruited into FDA Lyme Vaccine gender, and ethnic backgrounds. products usage that are not foreseen or Safety Study, ‘‘A Case-Control Study of Specific genetic and immune factors apparent during the premarket HLA Type and T-Cell Reactivity to will be compared between case and notification and review process. Recombinant Outer Surface Protein A control subjects. This is a common, FDA’s regulations governing accepted type of epidemiological study and Human Leukocyte Function- application for agency approval to Associated Antigen-1’’ called a case-control study. Information market a new drug (21 CFR part 314) collected includes medical and Section 505 of the Federal Food, Drug, and regulations governing biological vaccination history, family history, and and Cosmetic Act (the act) (21 U.S.C. products (21 CFR part 600) implement possible exposures such as in the 355), requires that important safety these statutory provisions. workplace that may play a part in the information relating to all human Currently FDA monitors medical development of arthritis in some prescription drug products be made product related postmarket adverse patients. FDA will use the information available to FDA so that it can take events via both the mandatory and gathered from the use of this survey appropriate action to protect the public voluntary MedWatch reporting systems questionnaire to ensure appropriate health when necessary. Section 702 of using FDA forms 3500 and 3500A (OMB matching of cases and controls in the the act (21 U.S.C. 372) authorizes control number 0910–0291) and the study and to assess possible factors investigational powers to FDA for vaccine adverse event reporting system which may factor in the development of enforcement of the act. (VAERS) using form VAERS–1. Health this adverse event. This study was Under section 519 of the act (U.S.C. care providers and manufacturers are approved by the FDA Research 360i), FDA is authorized to require required by law (42 U.S.C. 300aa–25) to Involving Human Subjects Committee manufacturers to report medical device- report adverse events following on February 15, 2002 (RIHSC #01– related deaths, serious injuries, and vaccination listed in the vaccine injury 028B). This survey questionnaire is an malfunctions to FDA and to require user table. Reports for reactions to other abbreviated version of one used during facilities to report device-related deaths vaccines are voluntary, and are received enhanced surveillance followup of directly to FDA and to manufacturers, from vaccine recipients, their health adverse events following Lyme vaccine and to report serious injuries to the care providers, and other reporters. manufacturer. Section 522 of the act (21 FDA is seeking OMB clearance to administration reported to VAERS. The U.S.C. 360l) authorizes FDA to require collect vital information through the use use of the vital information gathered manufacturers to conduct postmarket of the proposed survey questionnaire for using this survey questionnaire will aid surveillance of medical devices. Section control subjects participating in this FDA in assessing risks that may be 705(b) of the act (21 U.S.C. 375(b)) vaccine safety study. The intended associated with vaccine product usage authorizes FDA to collect and respondents are control subjects that are not foreseen or apparent during disseminate information regarding previously recruited to participate in the premarket notification and review medical products or cosmetics in this study, and are matched with case process, so the agency may take situations involving imminent danger to subjects reported to VAERS who appropriate public health or regulatory health or gross deception of the developed arthritis following Lyme action including dissemination of this consumer. Section 903(d)(2) of the act vaccine administration. Informed information as necessary and (21 U.S.C. 393(d)(2)) authorizes the consent for administration of this appropriate. Commissioner of Food and Drugs (the questionnaire will have been received FDA estimates the burden of this Commissioner) to implement general prior to the interview, and the interview collection of information as follows:
TABLE 1.—ESTIMATED ANNUAL REPORTING BURDEN1
No. of Annual Total Annual Hours per Survey Frequency per Total Hours Respondents Response Responses Response
‘‘A Case-Control Study of HLA Type and T-Cell 225 1 225 0.5 112.5 Reactivity to Recombinant Outer Surface Pro- tein A and Human Leukocyte Function-Associ- ated Antigen-1’’ 1There are no capital costs or operating and maintenance costs associated with this collection of information.
FDA projects that there will be up to reported to VAERS. Respondents will DEPARTMENT OF HEALTH AND 75 case subjects recruited into this study only be contacted once during conduct HUMAN SERVICES with 3 control subjects recruited for of this study for the purposes of each case subject, with a total maximum collection of vital information using this Food and Drug Administration of 225 survey questionnaire survey questionnaire. [Docket No. 02F–0142] respondents. FDA also projects a Dated: June 21, 2002. response time no greater than 0.5 hours Margaret M. Dotzel, per response. This estimate is based on Cyanotech Corp.; Withdrawal of Food previous results experienced with the Associate Commissioner for Policy. Additive Petition [FR Doc. 02–16294 Filed 6–26–02; 8:45 am] instrument during enhanced AGENCY: Food and Drug Administration, surveillance followup of adverse events BILLING CODE 4160–01–S HHS.
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ACTION: Notice. acceptance of the products, identify this temporary marketing permit mass production problems, and assess provides for use of the term ‘‘chunky’’ SUMMARY: The Food and Drug commercial feasibility, in support of a in lieu of the styles (i.e., whole, sliced, Administration (FDA) is announcing the petition to amend the standard of diced, and wedges) required by the withdrawal, without prejudice to a identity for canned tomatoes. standard. Except for the use of a liquid future filing, of a food additive petition DATES: This permit is effective for 15 sweetener and the use of the alternative (FAP 2A4732) proposing that the food months, beginning on the date the food term ‘‘chunky’’ on some products, the additive regulations be amended to is introduced or caused to be introduced test products meet all the requirements provide for the safe use of into interstate commerce, but not later of the standard. Because test preferences Haematococcus algae astaxanthin as a than September 25, 2002. vary by area, along with social and nutrient supplement. FOR FURTHER INFORMATION CONTACT: Ritu environmental differences, the purpose FOR FURTHER INFORMATION CONTACT: Nalubola, Center for Food Safety and of this permit is to test the product James C. Wallwork, Center for Food Applied Nutrition (HFS–822), Food and throughout the United States. Safety and Applied Nutrition (HFS– Drug Administration, 5100 Paint Branch This permit provides for the 265), Food and Drug Administration, Pkwy., College Park, MD 20740, 301– temporary marketing of a total of 5.6 5100 Paint Branch Pkwy., College Park, 436–2371. million cases (5 million pounds or 2.3 MD 20740, 202–418–3078. million kilograms in weight) of the SUPPLEMENTARY INFORMATION: In SUPPLEMENTARY INFORMATION: In a notice above-mentioned canned tomato accordance with 21 CFR 130.17 published in the Federal Register of products. The test products will be concerning temporary permits to April 11, 2002 (67 FR 17700), FDA manufactured by Del Monte Corp. at announced that a food additive petition facilitate market testing of foods 10652 Jackson Ave., Hanford, CA 93230. (FAP 2A4732) had been filed by deviating from the requirements of the The products will be distributed by Del Cyanotech Corp., c/o T. Todd Lorenz, standards of identity issued under Monte Corp. in the United States. The 11034 West Ocean Air Dr., ι 252, San section 401 of the Federal Food, Drug, information panel of the labels will bear Diego, CA 92130 (currently 73–4460 and Cosmetic Act (21 U.S.C. 341), FDA nutrition labeling in accordance with 21 Queen Kaahumanu Hwy., ι 102, Kailua- is giving notice that a temporary permit CFR 101.9. Each of the ingredients used Kona, HI 96740). The petition proposed has been issued to Del Monte Corp., One in the food must be declared on the to amend the food additive regulations Market @ The Landmark, P.O. Box labels as required by the applicable in Part 172 Food Additives Permitted for 193575, San Francisco, CA 94119–3575. sections of 21 CFR part 101. This permit The permit covers limited interstate Direct Addition to Food for Human is effective for 15 months, beginning on marketing tests of products identified as Consumption (21 CFR part 172) to the date the food is introduced or ‘‘Stewed Tomatoes, Original Recipe,’’ provide for the safe use of caused to be introduced into interstate ‘‘Chunky Tomatoes, Pasta Style,’’ Haematococcus algae astaxanthin as a commerce, but not later than September ‘‘Diced Tomatoes, basil, garlic & nutrient supplement. Cyanotech Corp. 25, 2002. oregano,’’ ‘‘Diced Tomatoes, garlic & has now withdrawn the petition without onion,’’ ‘‘Diced Tomatoes, green pepper Dated: June 19, 2002. prejudice to a future filing (21 CFR & onion,’’ ‘‘Tomato Wedges,’’ ‘‘Zesty Christine Taylor, 171.7(a)). Chunky Tomatoes, Chili Style,’’ Dierector, Office Nutritional Products, Dated: June 3, 2002. ‘‘Stewed Tomatoes, Cajun Recipe with Labeling and Dietary Supplements, Center for Laura M. Tarantino, pepper, garlic, and Cajun spices,’’ Food Safety and Applied Nutrition. Deputy Director, Office of Food Additive ‘‘Stewed Tomatoes, Italian Recipe with [FR Doc. 02–16164 Filed 6–26–02; 8:45 am] Safety, Center for Food Safety and Applied basil, garlic & oregano,’’ ‘‘Stewed BILLING CODE 4160–01–S Nutrition. Tomatoes, Mexican Recipe with garlic, [FR Doc. 02–16162 Filed 6–26–02; 8:45 am] cumin, and jalapen˜ os’’ and ‘‘Stewed BILLING CODE 4160–01–S Tomatoes, no salt added.’’ These canned DEPARTMENT OF HEALTH AND tomato products may deviate from the HUMAN SERVICES U.S. standard of identity for canned Food and Drug Administration DEPARTMENT OF HEALTH AND tomatoes (21 CFR 155.190) in two ways. HUMAN SERVICES First, a liquid carbohydrate sweetener, [Docket No. 00P–1439] either corn syrup or high fructose corn Food and Drug Administration syrup, is used as an optional ingredient Iceberg Water Deviating From Identity [Docket No. 02N–0178] in lieu of dry nutritive carbohydrate Standard; Extension of Temporary sweeteners. The liquid carbohydrate Permit for Market Testing Canned Tomatoes Deviating From sweetener, corn syrup or high fructose AGENCY: Food and Drug Administration, Identity Standard; Temporary Permit corn syrup, is used in a quantity for Market Testing HHS. reasonably necessary to compensate for ACTION: Notice. AGENCY: Food and Drug Administration, the tartness resulting from added HHS. organic acids, except that such addition SUMMARY: The Food and Drug ACTION: Notice. of the liquid sweetener, in no case, may Administration (FDA) is announcing the result in a finished canned tomato extension of a temporary permit issued SUMMARY: The Food and Drug product with a tomato soluble solids to Iceberg Industries Corp., to market Administration (FDA) is announcing content of less than 5.0 percent by test products designated as ‘‘Borealis that a temporary permit has been issued weight as defined in 21 CFR 155.3(e) Iceberg Water,’’ a name not otherwise to Del Monte Corp. to market test (which accounts for any added salt) and permissible under the U.S. standard of canned tomato products that deviate accounting for the soluble solids of the identity for bottled water. The extension from the U.S. standard of identity for liquid sweetener. The feasibility of this will allow the permit holder to continue canned tomatoes. The purpose of the tomato soluble solids requirement will to collect data on consumer acceptance temporary permit is to allow the be assessed during the temporary of products while the agency takes applicant to measure consumer marketing of the test products. Second, action on a petition to amend the
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standard of identity for bottled water, extended market test must notify, in SUMMARY: The Food and Drug which was submitted by the permit writing, the Team Leader, Conventional Administration (FDA), Center for holder. Foods Team, Division of Standards and Devices and Radiological Health DATES: The new expiration date of the Labeling Regulations, Office of (CDRH), is announcing the availability permit will be either the effective date Nutritional Products, Labeling and of approximately $500,000 in total fiscal of a final rule amending the standard of Dietary Supplements, Center for Food year (FY) 2002 funds. These funds will identity for bottled water that may result Safety and Applied Nutrition (HFS– be used to support one cooperative from the permit holder’s petition or 30 822), Food and Drug Administration, agreement for the coordination of days after denial of the petition, 5100 Paint Branch Pkwy., College Park, Federal and State actions to assure whichever the case may be. MD 20740. The notification must radiation protection of the American FOR FURTHER INFORMATION CONTACT: include a description of the test public. Loretta A. Carey, Center for Food Safety products to be distributed, justification DATES: Submit applications by July 29, and Applied Nutrition (HFS–822), Food for the amount requested, the area of 2002. and Drug Administration, 5100 Paint distribution, and the labeling that will be used for the test product (i.e., a draft ADDRESSES: Completed applications Branch Pkwy., College Park, MD 20740, should be submitted to: Maura C. 301–436–2371. label for each size of container and each brand of product to be market tested). Stephanos, Grants Management SUPPLEMENTARY INFORMATION: In The information panel of the label must Specialist, Grants Management Staff accordance with § 130.17 (21 CFR (HFS–520), Division of Contracts and 130.17), FDA issued a temporary permit bear nutrition labeling in accordance with 21 CFR 101.9. Each of the Procurement Management, Food and to Iceberg Industries Corp., 16 Forest Drug Administration, 5600 Fishers Rd., suite 300, St. John’s, ingredients used in the food must be declared on the label as required by the Lane, rm. 2129, Rockville, MD 20857, Newfoundland, Canada, A1C 2B9, to 301–827–7183, FAX 301–827–7101, e- market test products identified as applicable sections of 21 CFR part 101. Therefore, under the provisions of mail: [email protected]. Application ‘‘iceberg water’’ a name that is not forms are available either from Maura C. permitted under the U.S. standard of § 130.17(i), FDA is extending the temporary permit granted to Iceberg Stephanos or on the Internet at http:// identity for bottled water in § 165.110 grants.nih.gov/grants/funding/pjs398/ (21 CFR 165.110) (65 FR 54283, Industries Corp., 16 Forest Rd., suite 300, St. John’s, Newfoundland, Canada, phs398.html/. Note: Do not send September 7, 2000). The agency issued applications to the Center for Scientific the permit to facilitate market testing of A1C 2B9 to provide for continued market testing on an annual basis of Research (CSR), National Institutes of products whose labeling differs from the Health (NIH). requirements of the standard of identity 150,000 cases of the 24 x 350 milliliters (mL), 150,000 cases of the 12 x 1 liters FOR FURTHER INFORMATION CONTACT: for bottled water issued under section Regarding the administrative and 401 of the Federal Food, Drug, and (L), and another 100,000 cases of the 24 x 500 mL giving 400,000 cases in total. financial management aspects of Cosmetic Act (21 U.S.C. 341). The this notice, contact Maura C. permit covers limited interstate market The total fluid weight of the test product Stephanos (see ADDRESSES). testing of products that deviate from the will be 1,124,024 gallons or 4,260,000 L. The test products will bear the name Regarding the programmatic aspects standard for bottled water in § 165.110 of this notice, contact Penny R. in that they are identified as ‘‘iceberg ‘‘Borealis Iceberg Water.’’ FDA is extending the expiration date of the Boyce, Center for Devices and water’’ rather than as ‘‘bottled water’’ or Radiological Health (HFZ–240), one of the other names specified in permit so that the permit expires either on the effective date of a final rule Food and Drug Administration, § 165.110(a)(2). The test product meets 1350 Piccard Dr., Rockville, MD all the requirements of the standard amending the standard of identity for bottled water that may result from the 20850, 301–594–3650, FAX 301– with the exception of this deviation. 594–3306; e-mail: On September 28, 2001, Iceberg permit holder’s petition or 30 days after [email protected]. Industries Corp. requested that its denial of the petition, whichever the temporary permit be extended to allow case may be. All other conditions and SUPPLEMENTARY INFORMATION: FDA is for additional time for the market testing terms of this permit remain the same. announcing its intention to accept and of its products under the permit in order Dated: June 18, 2002. consider applications for a cooperative to gain additional information in Christine Taylor, agreement in support of coordination of support of its petition. The petitioner Director, Office of Nutritional Products, Federal and State action to protect the requests FDA to amend the standard of Labeling and Dietary Supplements, Center for American public from exposure to identity for bottled water to provide for Food Safety and Applied Nutrition. radiation. The cooperative agreement a new kind of bottled water, ‘‘iceberg [FR Doc. 02–16291 Filed 6–26–02; 8:45 am] covered by this notice will be in water,’’ and to require icebergs in a BILLING CODE 4160–01–S furtherance of FDA’s responsibilities marine environment as its source. under section 532 of the Federal Food, The agency finds that it is in the Drug, and Cosmetic Act (21 U.S.C. interest of consumers to issue an DEPARTMENT OF HEALTH AND 360ii) to establish and carry out a extension of the time period for the HUMAN SERVICES comprehensive radiation control market testing of products identified as program. FDA’s authority to enter into iceberg water to gain information on Food and Drug Administration grants and cooperative agreements is set consumer expectations and acceptance. out in section 301 of the Public Health FDA is inviting interested persons to Assuring Radiation Protection; Service Act (42 U.S.C. 241). FDA’s participate in the market test under the Availability of a Cooperative research program is described in the conditions that apply to Iceberg Agreement; Request for Applications Catalog of Federal Domestic Assistance Industries Corp. (e.g., the composition AGENCY: Food and Drug Administration, No. 93.103. Before entering into of the test product), except for the HHS. cooperative agreements, FDA carefully designated area of distribution. Any considers the benefits such agreements ACTION: Notice. person who wishes to participate in the will provide to the public.
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The Public Health Service (PHS) and discuss the results of the studies should be considered in terms of strongly encourages all award recipients conducted. The annual meetings also practice guidelines, quality assurance to provide a smoke-free workplace and include workshops to more carefully procedures, and patient exposure to discourage the use of all tobacco define new problems and areas of evaluation. In the area of patient products. This is consistent with the mutual concern in radiation control, exposure, the recipient will be PHS mission to protect and advance the and clinics to demonstrate mutually responsible for conducting an annual physical and mental health of the beneficial radiological health survey of a representative sample of American people. techniques, procedures, and systems. medical x-ray facilities conducting one FDA is committed to achieving the The annual meeting lasts approximately specific diagnostic x-ray procedure health promotion and disease 4 days, with an average attendance of (from a set of predefined procedures prevention objectives of ‘‘Healthy 350 participants. that will be the subject of the survey People 2010,’’ a national effort designed 3. Additional educational activities over time). to reduce morbidity and mortality and have been provided for the benefit of b. Mammography to improve quality of life. Applicants members of State programs having may obtain a paper copy of the ‘‘Healthy radiation control responsibilities and The recipient will be responsible for People 2010’’ objectives, vols. I and II, the general public to acquaint them with providing advice and recommendations for $70 ($87.50 foreign) S/N 017–000– radiation exposure problems and the to FDA on issues related to the 00550–9 by writing to the proposed solutions. Methods used have implementation of the Mammography Superintendent of Documents, P.O. Box included videotapes, publications, and Quality Standards Act (MQSA). 371954, Pittsburgh, PA 15250–7954. training courses. Consideration should be given to issues Telephone orders can be placed to 202– related to: The training of those II. Goals and Objectives 512–2250. The document is also conducting MQSA inspections; the available in CD–ROM format, S/N 017– The objective of this cooperative results of the ongoing FDA Inspection 001–00549–5 for $19 ($23.50 foreign) as agreement will be to coordinate Federal Demonstration Program under MQSA; well as on the Internet at http:// and State activities to achieve effective and informing mammography facilities health.gov/healthypeople. Internet solutions to present and future radiation about the results of MQSA inspections viewers should proceed to control problems. The recipient of this nationwide and steps that they can take ‘‘Publications.’’ cooperative agreement award will be to improve their performance under I. Background expected to obtain the States’ MQSA. cooperation and participation on Since 1968, FDA has taken the lead in committees and working groups 2. Application of Medical/Nonmedical working with the Nuclear Regulatory established to deal with individual Ionizing Radiation Commission (NRC) and its predecessor problems. The recipient will also plan organizations, the Environmental and facilitate an annual meeting, and The recipient will also address issues Protection Agency (EPA), the Federal develop and offer educational activities in the nonmedical applications of Emergency Management Agency to demonstrate mutually beneficial ionizing radiation as well as the medical (FEMA), and the Department of Energy techniques, procedures, and systems and nonmedical applications of (DOE), to provide financial support for relevant to the mission of assuring nonionizing radiation, particularly a forum established to foster the radiation protection. ultraviolet radiation. exchange of ideas and information The recipient will establish among the States and the Federal 3. Managing the Disposition of committees to address, evaluate, and Government concerning radiation Unwanted Radioactive Materials offer solutions for a wide range of control. This forum has made it possible (Orphan Sources) radiation health and protection issues. for State and Federal agencies to work Examples of relevant areas already The recipient will develop, together to study existing and potential identified to be of interest include, but implement, and manage a national radiological health problems of mutual are not limited to: (1) The application of program to identify, handle, and dispose interest and to apply their increasingly x-rays to the healing arts; (2) the of unwanted radioactive materials limited resources with maximum application of medical/nonmedical (orphan sources). The responsibilities efficiency in seeking ways to address ionizing radiation; (3) the development these problems. for this task include: (1) Clarifying the of a system for managing the disposition Three major mechanisms traditionally State and Federal jurisdictional and of unwanted radioactive materials have been used to achieve this regulatory responsibilities; (2) (orphan sources); and (4) the control coordination between State and Federal establishing agreements with interested and mitigation of radiation exposure agencies: NRC Agreement and non-Agreement 1. When certain radiation control from all sources. These areas are States to identify and dispose of discrete issues warrant specific consideration, explained more fully in the following orphan sources; (3) establishing cost committees and other working groups paragraphs. guidelines for disposal of discrete comprised of representatives of State A. Areas of Interest orphan sources; and (4) reimbursing radiation control programs and liaison States for recovery, recycling, members from the concerned Federal 1. Application of X-Rays to the Healing arrangements for reuse, and disposal agencies have been formed to evaluate Arts costs of these sources. Additionally, the these issues and recommend ways to The recipient’s activities related to x- recipient will study, evaluate, and address them. The recommendations of rays in the healing arts should include develop actions on issues related to the committees are evaluated by a issues related to general diagnostic radioactive waste disposal, radioactive central management board and final radiology and mammography. contamination, contaminated sites, and recommended actions are relayed to the international radiation protection as a. General Diagnostic Radiology appropriate Federal and State agencies. recommended by working groups and 2. Annual meetings of Federal and Issues related to radiography, subcommittees established by the State officials are convened to present fluoroscopy, and computed tomography recipient.
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4. Control and Mitigation of Radiation and Federal agencies. Areas for which III. Reporting Requirements Exposure groups may be needed include, but are An annual program progress report, a The recipient will be responsible for not limited to, radioactive materials and report detailing progress made under developing criteria relevant to the radiation exposure problems in the the National Orphan Source Program, control and mitigation of radiation environment, in the healing arts, in and an annual Financial Status Report exposure from all sources. Specific areas industry, and in, or related to, consumer (FSR) (SF–269) are required. An original to be addressed include: Responding to products. and two copies of these reports shall be radiation accidents or incidents; E. Annual Meeting submitted to FDA’s Grants Management evaluating the adequacy of State Officer within 90 days of the budget radiation control programs, controlling The recipient will be required to plan, expiration date of the cooperative residual radioactivity levels from conduct, and handle all administrative agreement. Failure to file these reports decontamination and decommissioning functions for an annual meeting. This in a timely fashion may be grounds to of nuclear facilities, determining the meeting will offer an opportunity for withhold continued support of the propriety of delegating implementation member States and other interested cooperative agreement and/or suspend authority for Federal standards for parties to convene to exchange concerns or terminate the agreement. The control of radionuclides as hazardous and ideas for problem solving. The recipient will be advised of the air pollutants, and implementing the recipient should consult with suggested format for the annual Program Indoor Radon Abatement Act. The stakeholders to determine priority Progress Report and the National recipient will also be required to review agenda items and topics of interest. Orphan Source Program report at the and provide comments on issues related General sessions of this annual meeting time an award is made. to radiological emergency preparedness. should include workshops to define A final program progress report and new problems, and discussions and FSR will be due within 90 days after the B. Suggested State Regulations for the lectures on mutually beneficial Control of Radiation (SSRCR) expiration of the project period as noted radiological health techniques, on the Notice of Grant Award. Updating and maintaining the SSRCR procedures, and systems. Identified Reports generated by the task forces, will be an integral aspect of this areas of mutual concern in radiation committees, and workshops should cooperative agreement. These control should be considered for include recommendations for the regulations will be disseminated to the assignment to a task force or committee resolution of problem areas as well as States for the purpose of promoting comprised of experts. The recipient will cost/benefit evaluations. These reports uniformity between the States. The be expected to publish the meeting will be reviewed by the recipient’s regulations will address issues relevant proceedings in hardcopy and on the governing body before final to controlling radiation exposure from recipient’s web site for limited dissemination to Federal and/or State all sources such as low-level waste, dissemination to member States and officials. Any publications supported by radioactive contamination, radioactive relevant Federal personnel. Federal funds must include a statement materials, radon, and x-rays in the In conjunction with the annual acknowledging Federal support, as well healing arts. meeting, the recipient will be required as a disclaimer that the information C. Committee Oversight and to hold training sessions. These sessions presented is not necessarily the view of Management should demonstrate mutually beneficial the supporting agency. techniques, procedures, and systems The recipient should anticipate Program monitoring of the recipient that have been developed by the oversight and management will be conducted by FDA on an sponsoring agencies or the recipient. responsibilities for approximately 45 ongoing basis through telephone The recipient may also be requested by committees. In some instances, the conversations between the FDA Project FDA to provide instructors for Federal recipient will be required to provide Officer and/or the FDA Grants training courses with a radiological representatives to certain Federal Management Specialist and the component held outside of the annual radiation committees, such as the principal investigator. Periodic site meeting. Federal Radiological Preparedness visits with appropriate officials of the Coordinating Committee (FRPCC) and Additionally, the recipient of this recipient organization may also be its subcommittees (overseen by FEMA). cooperative agreement award will be conducted. The results of these Federal representatives will be expected to provide the leadership to communications and visits will be appointed to these committees and refresh and update previously- recorded in the official cooperative other working groups dealing with developed consensus guidance agreement file and may be available to problems related to the agency mission. documents and SSRCR to provide States the recipient upon request consistent These representatives will participate in with up-to-date assistance in effective with FDA disclosure regulations. the discussions leading to any management of radiological hazards. The recipient will also provide a recommendations developed by the A Web site will be maintained by the periodic newsletter that will be made committees and working groups. They recipient for the benefit of the States available to member States and relevant will be primarily responsible for and other interested parties; the FDA Federal personnel on the Web site. The assuring that such recommendations are Project Officer and other designated newsletter should include updates on in accordance with Federal policy and Federal personnel will be given projects and programs relevant to the regulations. The Federal representatives complete and full access to all mission of, and supported by, the will also act as investigators, information posted on the site that is contributing Federal agencies. The FDA collaborators, or resource personnel, as relevant to the work supported by FDA Project Officer and liaisons from other appropriate. and other supporting agencies. The agencies supporting this Agreement will information and materials posted on the be provided access to secured D. Special Projects site should be reviewed and updated at information on the Web site via The recipient will also occasionally regular intervals. Expertise in Web site passwords. implement special projects as maintenance and security is required to The recipient will maintain a database determined by the participating State fulfill this task. of personnel responsible for radiological
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health programs in the member States Any application received that exceeds be submitted in accordance with and Federal agencies. This database will $500,000 (direct plus indirect costs) per sections IV.B. ‘‘Eligibility,’’ VII. be updated annually and published for year will not be considered responsive ‘‘Submission Requirements,’’ and distribution by the recipient. Two paper and will be returned to the applicant VIII.A. ‘‘Submission Instructions’’ of copies of the directory and a without being reviewed. After the first this notice; (3) not exceed the noncopyright electronic version will be year, additional years of noncompetitive recommended funding amount stated in provided to all contributing Federal support are predicated upon acceptable section IV.D of this document; (4) agencies. performance during the preceding year address the specific requirements of the and the availability of Federal funds. project stated in section II. ‘‘Goals and IV. Mechanism of Support Objectives’’ of this document; and (5) V. Delineation of Substantive A. Award Instrument bear the original signatures of both the Involvement Principal Investigator and the Support for this program will be in Substantive involvement by the the form of a cooperative agreement Institution’s/Organization’s Authorized awarding agency is inherent in the Official. If applications are found to be award. This award will be subject to all cooperative agreement award. policies and requirements that govern nonresponsive, they will be returned to Accordingly, FDA will have a the applicants without further the research grant programs of PHS, substantive involvement in the including the provisions of 42 CFR part consideration. programmatic activities of the project Responsive applications will be 52 and 45 CFR parts 74 and 92. The funded by the cooperative agreement. regulations issued under Executive reviewed and evaluated for scientific Substantive involvement includes, and technical merit by an ad hoc panel Order 12372 do not apply to this but is not limited to, the following: program. The National Institutes of of experts. This review will be (1) Priorities on issues to be addressed competitive. The final funding decision Health’s (NIH) modular grant program will be jointly agreed to by the recipient does not apply to this FDA program. will be made by the Commissioner of and FDA in coordination with the Food and Drugs. B. Eligibility Federal liaisons of agencies providing funding to FDA under an Interagency B. Review Criteria This cooperative agreement is Agreement. The FDA Project Officer available to any domestic private or The application will be reviewed and will be invited to all planning meetings public nonprofit organization (including evaluated according to the following of the central management board or State and local units of government) and criteria that are of equal value: committee of the recipient of the award. to any domestic for-profit organization. These meetings must be held on normal 1. The application clearly For-profit organizations must exclude business days during normal business demonstrates an understanding of the fees or profit from their requested hours. The Project Officer will purpose and objectives of the support. Organizations described in participate in the making of decisions cooperative agreement regarding the section 501(c)(4) of the Internal Revenue with respect to the annual meeting coordination of Federal and State Code of 1968 that engage in lobbying are (including the topics to be discussed activities to assure radiation protection not eligible to receive awards. and meeting site selection), committee of the American public. C. Length of Support organization and mission, and other 2. The application clearly describes the steps and a proposed schedule for The length of support will be for up activities under this award. (2) Senior Federal liaisons from all planning, implementing, and to 5 years. Funding beyond the first year contributing Federal agencies will also accomplishing the activities to be will be noncompetitive and will depend be named and will regularly attend the carried out under the cooperative on: (1) Acceptable programmatic planning meetings of the central agreement. The application presents a performance during the preceding year, management board or committee, and clear plan and schedule of steps to and (2) the availability of Federal fiscal will communicate with the other accomplish the goals of the cooperative year funds. liaisons from their agency who are agreement. D. Funding Plan members of the task forces and related 3. The application establishes the applicant’s ability to perform the Federal funds are currently available committees. These Senior Federal responsibilities under the cooperative from FDA for this program. However, an Liaisons will also regularly attend the agreement, including the availability of award is subject to the condition that, in annual meeting. Through the FDA appropriate staff and the ability to carry addition to FDA funds, augmenting Project Officer, the recipient will out the stated goals and objectives of the funds are transferred to FDA from other communicate with agencies on major cooperative agreement within the Federal agencies to fully support this policy and regulatory issues relevant to established funding constraints stated in program. As the lead Federal agency, the work of FDA and the supporting this notice. FDA intends to collect funds from all agencies. other contributing Federal agencies (3) FDA will collaborate with the 4. The application specifies the through Interagency Agreements (IAGs) recipient on data analysis, interpretation manner in which interactions with FDA and fund one award for up to $500,000 of findings, and, where appropriate, will be maintained throughout the in total costs (including both direct and coauthor publications. lifetime of the project. indirect costs). Support of this VI. Review Procedures and Criteria 5. The application specifies how the cooperative agreement may be for up to recipient will monitor the progress of 5 years in duration with the total budget A. Review Procedures the work required under the cooperative amount not to exceed $500,000 (direct FDA’s grants management and agreement, and how the progress will be plus indirect costs) per year or a total of program staff will review all reported to FDA. $2,500,000 for a 5-year award. Funds applications submitted in response to 6. The application shall include a obligated through IAGs will be this notice for responsiveness. To be detailed and fully-justified budget that immediately transferred to FDA for use responsive, an application must: (1) Be includes anticipated costs for personnel, in support of this agreement. received by the specified due date; (2) travel, equipment, and supplies.
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VII. Submission Requirements the exception of the receipt dates and the potential impact of its regulations on the mailing label address. free clinics. The original and two copies of the The face page of the application DATES: Submit written or electronic completed Grant Application Form PHS should reflect the request for 398 (Rev. 4/98 or Rev. 5/01) or the comments on the draft guidance by applications number, RFA–FDA– September 25, 2002. General comments original and two copies of PHS 5161–1 CDRH–02–1. Data and information (Rev. 7/00) for State and local on agency guidance documents are included in the application, if identified welcome at any time. governments, with copies of the by the applicant as trade secret or appendices for each of the copies, confidential commercial information. ADDRESSES: Submit written requests for should be delivered to Maura Stephanos Will be given confidential treatment to single copies of the draft guidance to (see ADDRESSES). State and local the extent permitted by the Freedom of Division of Drug Information (HFD– governments may choose to use the PHS Information Act (5 U.S.C. 552(b)(4)) and 240), Center for Drug Evaluation and 398 application form in lieu of PHS FDA’s implementing regulations (21 Research, Food and Drug 5161–1. The application receipt date is CFR 20.61). Administration, 5600 Fishers Lane, July 29, 2002. No supplemental or Information collection requirements Rockville, MD 20857. Send one self- addendum material will be accepted requested on Form PHS 398 and the addressed adhesive label to assist that after the receipt date. The outside of the instructions have been submitted by office in processing your requests. mailing package and item 2 of the PHS to the Office of Management and Submit written comments on the draft application face page should be labeled: Budget (OMB) and were approved and guidance to the Dockets Management ‘‘Response to RFA FDA CDRH–02–1.’’ assigned OMB control number 0925– Branch (HFD–305), Food and Drug Administration, 5630 Fishers Lane, rm. VIII. Method of Application 0001. The requirements requested on Form PHS 5161–1 were approved and 1061, Rockville, MD 20857. Submit A. Submission Instructions assigned OMB control number 0348– electronic comments to http:// www.fda.gov/dockets/ecomments. See Applications will be accepted during 0043. the SUPPLEMENTARY INFORMATION section normal business hours, 8 a.m. to 4:30 Dated: June 21, 2002. for electronic access to the draft p.m., Monday through Friday, on or Margaret M. Dotzel, guidance document. before the established receipt date. Associate Commissioner for Policy. Applications will be considered FOR FURTHER INFORMATION CONTACT: Lee [FR Doc. 02–16293 Filed 6–26–02; 8:45 am] received on time if sent or mailed on or D. Korb, Office of Regulatory Policy before the receipt date as evidenced by BILLING CODE 4160–01–S (HFD–7), Center for Drug Evaluation a legible U.S. Postal Service dated and Research, 5600 Fishers Lane, Rockville, MD 20857, 301–594–2041. postmark or a legible dated receipt from DEPARTMENT OF HEALTH AND a commercial carrier, unless they arrive HUMAN SERVICES SUPPLEMENTARY INFORMATION: too late for orderly processing. Private I. Background metered postmarks shall not be Food And Drug Administration acceptable as proof of timely mailing. FDA is announcing the availability of Applications not received on time will [Docket No. 02D–0260] a draft guidance for industry entitled not be considered for review and will be Draft Guidance for Industry on ‘‘Prescription Drug Marketing Act returned to the applicant. (Applicants Prescription Drug Marketing Act Regulations for Donation of Prescription should note that the U.S. Postal Service Regulations for Donation of Drug Samples to Free Clinics.’’ Section does not uniformly provide dated Prescription Drug Samples to Free 203.39 (21 CFR 203.39) of the agency’s postmarks. Before relying on this Clinics; Availability regulations sets forth requirements for method, applicants should check with donation of prescription drug samples their local post office.) Do not send AGENCY: Food and Drug Administration, to charitable institutions. ‘‘Charitable applications to the Center for Scientific HHS. institution or charitable organization’’ is Research (CSR), NIH. Any application ACTION: Notice. defined in § 203.3(f) (21 CFR 203.3(f)) as that is sent to NIH, and is then ‘‘a nonprofit hospital, health care entity, forwarded to FDA and not received in SUMMARY: The Food and Drug organization, institution, foundation, time for orderly processing will be Administration (FDA) is announcing the association, or corporation that has been deemed not responsive and returned to availability of a draft guidance for granted an exemption under section the applicant. Applications must be industry entitled ‘‘Prescription Drug 501(c)(3) of the Internal Revenue Code submitted via mail or hand delivered as Marketing Act Regulations for Donation of 1954, as amended.’’ Under § 203.39, stated above. FDA is unable to receive of Prescription Drug Samples to Free a charitable institution may receive drug applications electronically. Applicants Clinics.’’ The draft guidance provides samples donated by a licensed are advised that FDA does not adhere to information for free clinics that receive practitioner or another charitable the page limitations or the type size and donated prescription drug samples from institution for dispensing to its patients, line spacing requirements imposed by licensed practitioners or other charitable or may donate a drug sample to another the NIH on its applications. institutions. The draft guidance charitable institution for dispensing to B. Format for Application discusses concerns that have been its patients, provided certain expressed by certain individuals requirements are met. These Submission of the application must be regarding regulatory requirements of requirements include, among other on Grant Application Form PHS 398 FDA’s regulations for drug sample things, that a drug sample donated to a (Rev. 4/98 or Rev. 5/01) or on either donations. The draft guidance charitable institution must be inspected form PHS 398 or PHS 5161–1 (Rev. 7/ announces that FDA, in the exercise of by a licensed practitioner or registered 00) for State and local government its enforcement discretion, does not pharmacist, and that drug sample applicants. All ‘‘General Instructions’’ intend to object if a free clinic fails to receipt and distribution records be and ‘‘Specific Instructions’’ in the comply with the requirements in the maintained by the institution and application kit should be followed with regulations, while the agency studies retained for a minimum of 3 years.
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The draft guidance announces that DEPARTMENT OF HEALTH AND signatures regulation, which provided FDA, in the exercise of its enforcement HUMAN SERVICES for the voluntary submission of parts or discretion, does not intend to object if all of an application, as defined in the a free clinic fails to comply with the Food and Drug Administration relevant regulations, in electronic requirements in § 203.39 while the [Docket No. 01D–0475] format without an accompanying paper agency studies the potential impact of copy (21 CFR part 11). The agency also this regulation on the ability of free Guidance for Industry on Providing established public Docket No. 92S–0251 clinics to receive and distribute Regulatory Submissions in Electronic to provide a list of the agency units that prescription drug samples. For the Format—ANDAs; Availability are prepared to receive electronic purposes of the draft guidance, a ‘‘free submissions and the specific types of clinic’’ is a charitable institution or AGENCY: Food and Drug Administration, records and submissions that can be organization under § 203.3(f) that HHS. accepted in electronic format (62 FR actually provides health care services ACTION: Notice. 13430 at 13467). In the Prescription and relies in whole or part on drug Drug User Fee Act as amended by the donations and volunteer help to achieve SUMMARY: The Food and Drug Food and Drug Administration its goals. Thus, charitable institutions Administration (FDA) is announcing the Modernization Act of 1997 (Public Law that receive donated drug samples, but availability of a guidance for industry 105–115), the agency stated its plans to do not provide health care services, or entitled ‘‘Providing Regulatory develop and update its information that provide health care services, but do Submissions in Electronic Format— management capabilities to allow not rely at least in part on drug ANDAs.’’ This guidance provides electronic submissions by 2002. In the donations and volunteer help to provide information for applicants on how to Federal Register of January 28, 1999, those services, would not be considered submit abbreviated new drug the agency announced the availability of free clinics and are expected to comply applications (ANDAs) in electronic two guidances for industry entitled with § 203.39. format. ‘‘Providing Regulatory Submissions in Electronic Format—NDAs’’ (64 FR 4432) This draft guidance is being issued DATES: Submit written or electronic and ‘‘Providing Regulatory Submissions consistent with FDA’s good guidance comments on agency guidances at any in Electronic Format—General practices regulation (21 CFR 10.115). time. Considerations’’ (64 FR 4433). These The draft guidance, when finalized, will ADDRESSES: Submit written requests for guidances were the first two of a series represent the agency’s current thinking single copies of this guidance to the of guidances for industry on making on enforcement of Prescription Drug Division of Drug Information (HFD– regulatory submissions in electronic Marketing Act Regulations for Donation 240), Center for Drug Evaluation and format. This guidance should be used in of Prescription Drug Samples to Free Research, Food and Drug conjunction with ‘‘Providing Regulatory Clinics. It does not create or confer any Administration, 5600 Fishers Lane, Submissions in Electronic Format— rights for or on any person and does not Rockville, MD 20857. Send one self- NDAs’’ and ‘‘Providing Regulatory operate to bind FDA or the public. An addressed adhesive label to assist that Submissions in Electronic Format— alternative approach may be used if office in processing your requests. General Considerations.’’ such approach satisfies the Submit written comments on the The Center for Drug Evaluation and requirements of the applicable statutes guidance to the Dockets Management Research (CDER) has encouraged the and regulations. Branch (HFA–305), Food and Drug electronic submission of some types of II. Comments Administration, 5630 Fishers Lane, rm. data on a voluntary basis since 1997. 1061, Rockville, MD 20857. Submit However, these electronic submissions Interested persons may submit to the electronic comments to http:// could not previously be archived and Dockets Management Branch (see www.fda.gov/dockets/ecomments. See could only be made in addition to a ADDRESSES) written or electronic the SUPPLEMENTARY INFORMATION section complete paper submission. In the comments on the draft guidance by for electronic access to the guidance Federal Register of November 16, 2001 September 25, 2002. Two copies of any document. (66 FR 57721), CDER announced the comments are to be submitted, except availability of a draft guidance entitled FOR FURTHER INFORMATION CONTACT: that individuals may submit one copy. ‘‘Providing Regulatory Submissions in Ruth A. Warzala, Center for Drug Comments are to be identified with the Electronic Format—ANDAs.’’ This Evaluation and Research (HFD–600), docket number found in brackets in the guidance provided new information on Food and Drug Administration, 7500 heading of this document. The draft submitting a complete archival copy of Standish Pl., Rockville, MD 20855, 301– guidance and received comments may the ANDA in electronic format. The 827–5845, e-mail: be seen in the Dockets Management comment period closed on January 15, [email protected]. Branch between 9 a.m. and 4 p.m., 2002, and the agency considered the Monday through Friday. SUPPLEMENTARY INFORMATION: received comments as it finalized this guidance. As in the past, applicants III. Electronic Access I. Background planning to make submissions in Persons with access to the Internet FDA is announcing the availability of electronic format should consult public may obtain the document at either http:/ a guidance for industry entitled Docket No. 92S–0251 to determine /www.fda.gov/cder/guidance.index.htm ‘‘Providing Regulatory Submissions in which agency units are prepared to or http://www.fda.gov/ohrms/dockets/ Electronic Format—ANDAs.’’ receive electronic submissions and the default.htm. Traditionally, FDA has required that specific types of documents that can be regulatory submissions, such as ANDAs submitted in electronic format. Dated: June 17, 2002. and new drug applications, be This guidance is being issued Margaret M. Dotzel, submitted as paper documents. In the consistent with FDA’s good guidance Associate Commissioner for Policy. Federal Register of March 20, 1997 (62 practices (GGPs) regulation (21 CFR [FR Doc. 02–16160 Filed 6–26–02; 8:45 am] FR 13430), FDA published the 10.115). The guidance represents the BILLING CODE 4160–01–S electronic records and electronic agency’s current thinking on providing
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regulatory submissions in electronic Recommendations for Equine’’ (VICH among regulatory agencies in different format for ANDAs. It does not create or GL15), ‘‘Effectiveness of Anthelmintics: countries. confer any rights for or on any person Specific Recommendations for Porcine’’ FDA has actively participated in the and does not operate to bind FDA or the (VICH GL16), and ‘‘Effectiveness of International Conference on public. An alternative approach may be Anthelmintics: Specific Harmonisation (ICH) of Technical used if such approach satisfies the Recommendations for Canine’’ (VICH Requirements for Registration of requirements of the applicable statutes GL19). These related guidance Pharmaceuticals for Human Use for or regulations. documents have been developed by the several years to develop harmonized technical requirements for the approval II. Comments International Cooperation on Harmonisation of Technical of human pharmaceutical and biological Interested persons may, at any time, Requirements for Registration of products among the European Union, submit written or electronic comments Veterinary Medicinal Products (VICH). Japan, and the United States. The VICH on the guidance to the Dockets They are intended to standardize and is a parallel initiative for veterinary Management Branch (see ADDRESSES). simplify methods used in the evaluation medicinal products. The VICH is Two copies of any comments are to be of new anthelmintics submitted for concerned with developing harmonized submitted, except that individuals may approval to the European Union, Japan, technical recommendations for the submit one copy. Comments are to be and the United States. approval of veterinary medicinal identified with the docket number products in the European Union, Japan, DATES: Submit written or electronic found in brackets in the heading of this and the United States, and includes document. The guidance and received comments on the final guidance input from both regulatory and industry comments are available for public documents at any time. representatives. examination in the Dockets ADDRESSES: Submit written requests for The VICH Steering Committee is Management Branch between 9 a.m. and single copies of the final guidance composed of member representatives 4 p.m., Monday through Friday. documents to the Communications Staff from the European Commission; (HFV–12), Center for Veterinary European Medicines Evaluation Agency; III. Electronic Access Medicine, Food and Drug European Federation of Animal Health; Persons with access to the Internet Administration, 7500 Standish Pl., Committee on Veterinary Medicinal may obtain the document at either http:/ Rockville, MD 20855. Send one self- Products; the U.S. FDA; the U.S. /www.fda.gov/cder/guidance/index.htm addressed adhesive label to assist that Department of Agriculture; the Animal or http://www.fda.gov/ohrms/dockets/ office in processing your requests. See Health Institute; the Japanese Veterinary default.htm. the SUPPLEMENTARY INFORMATION section Pharmaceutical Association; the Dated: June 11, 2002. for electronic access to the final Japanese Association of Veterinary Margaret M. Dotzel, guidance document. Biologics; and the Japanese Ministry of Associate Commissioner for Policy. Submit written comments on the final Agriculture, Forestry, and Fisheries. Two observers are eligible to [FR Doc. 02–16163 Filed 6–26–02; 8:45 am] guidance documents to the Dockets Management Branch (HFA–305), Food participate in the VICH Steering BILLING CODE 4160–01–S and Drug Administration, 5630 Fishers Committee: One representative from the Lane, rm. 1061, Rockville, MD 20852. Government of Australia/New Zealand DEPARTMENT OF HEALTH AND Submit electronic comments to http:// and one representative from the HUMAN SERVICES www.fda.gov/dockets/ecomments. industry in Australia/New Zealand. The Comments should be identified with the VICH Secretariat, which coordinates the Food and Drug Administration full title of the final guidance and the preparation of documentation, is docket number found in brackets in the provided by the Confe´deration [Docket No. 00D–1532] heading of this document. Mondiale de L’Industrie de la Sante´ Animale (COMISA). A COMISA International Cooperation on FOR FURTHER INFORMATION CONTACT: representative also participates in the Harmonisation of Technical Thomas Letonja, Center for Veterinary VICH Steering Committee meetings. Requirements for Registration of Medicine (HFV–135), Food and Drug Veterinary Medicinal Products (VICH); Administration, 7500 Standish Pl., II. Final Guidance on Effectiveness of Final Guidances for Industry on Rockville, MD 20855, 301–827–7576, e- Anthelmintics ‘‘Effectiveness of Anthelmintics: mail: [email protected]. In the Federal Register on October 19, Specific Recommendations for SUPPLEMENTARY INFORMATION: 2000 (65 FR 62723), FDA published the Equine’’ (VICH GL15), ‘‘Effectiveness of I. Background notice of availability of these VICH draft Anthelmintics: Specific guidances, giving interested persons Recommendations for Porcine’’ (VICH In recent years, many important until December 18, 2000, to submit GL16), and ‘‘Effectiveness of initiatives have been undertaken by comments. FDA received no comments. Anthelmintics: Specific regulatory authorities and industry The final guidance was submitted to the Recommendations for Canine’’ (VICH associations to promote the VICH Steering Committee. At a meeting GL19); Availability international harmonization of held on June 28, 2001, the VICH AGENCY: Food and Drug Administration, regulatory requirements. FDA has Steering Committee endorsed the three HHS. participated in efforts to enhance final guidances for industry, VICH ACTION: Notice. harmonization and has expressed its GL15, VICH GL16, and VICH GL19. commitment to seek scientifically based The three final guidances VICH GL15, SUMMARY: The Food and Drug harmonized technical procedures for the VICH GL16, and VICH GL19 should be Administration (FDA) is announcing the development of pharmaceutical read in conjunction with the availability of three final guidances for products. One of the goals of ‘‘Effectiveness of Anthelmintics: industry (Nos. 109, 110, and 111 harmonization is to identify and then General Recommendations (EAGR)’’ respectively) entitled ‘‘Effectiveness of reduce the differences in technical announced in the Federal Register on Anthelmintics: Specific requirements for drug development April 6, 2001 (66 FR 18257). The final
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guidances for equine, porcine, and Dated: June 17, 2002. information, as well as duplication of canine are part of the EAGR, and the Margaret M. Dotzel, previously completed work. aim of these three separate final Associate Commissioner for Policy. The Catalog of Federal Domestic guidances is to: (1) Be more specific for [FR Doc. 02–16292 Filed 6–26–02; 8:45 am] Assistance (CFDA) number for this program certain issues not discussed in the BILLING CODE 4160–01–S is 93.243. general guidance, (2) highlight CONTACT: For more information about differences with the EAGR on this program, contact: Betsy McDonel effectiveness data recommendations, DEPARTMENT OF HEALTH AND Herr, Ph.D., Government Project Officer, and (3) give explanations for disparities HUMAN SERVICES Community Support Branch, Division of between the EAGR and these Knowledge Development and Systems Substance Abuse and Mental Health documents. Change, Center for Mental Health Services Administration Services (CMHS), SAMHSA, Room 11C– These final level 1 guidance 22 Parklawn Building, 5600 Fishers documents, developed under the VICH Single Source Cooperative Agreement Lane, Rockville, MD 20857, (301) 594– process, are consistent with FDA’s good Award to the Brigham and Women’s 2197, [email protected]. guidance practices regulation (21 CFR Hospital, Harvard University, Boston, Dated: June 20, 2002. 10.115). These documents do not create MA Richard Kopanda, or confer any rights for or on any person and will not operate to bind FDA or the AGENCY: Center for Mental Health Executive Officer, SAMHSA. public. An alternative method may be Services (CMHS), Substance Abuse and [FR Doc. 02–16322 Filed 6–25–02; 1:58 pm] Mental Health Services Administration used as long as it satisfies the BILLING CODE 4162–20–P (SAMHSA), HHS. requirements of applicable statutes and ACTION: regulations. (Information collected is Notice of intent to award a DEPARTMENT OF HEALTH AND covered under OMB control number single source cooperative agreement to HUMAN SERVICES 0910–0032.) Brigham and Women’s Hospital, Harvard University, to support a Substance Abuse and Mental Health III. Comments program expansion and extension for Services Administration the PRISMe multisite study As with all of FDA’s guidances, the Coordinating Center. Single Source Grant Award to the public is encouraged to submit written National Families in Action, Inc., or electronic comments with new data SUMMARY: The Center for Mental Health Atlanta, GA or other new information pertinent to Services (CMHS), Substance Abuse and AGENCY: these guidances. FDA will periodically Mental Health Services Administration Center for Substance Abuse review the comments in the docket and, (SAMHSA), is publishing this notice to Prevention (CSAP), Substance Abuse where appropriate, will amend the provide information to the public and Mental Health Services guidances. The agency will notify the concerning a planned single source Administration (SAMHSA), HHS. public of any such amendments through cooperative agreement award in the ACTION: Notice of intent to award a a notice in the Federal Register. amount of $500,000 in FY 2002, and single source grant to National Families in Action, Inc. to support updating, Interested persons may submit to the $500,000 in FY 2003 for a project period pilot testing and adaptation for different Dockets Management Branch (see of two years to the Brigham and target audiences of the Basic Training I ADDRESSES) written or electronic Women’s Hospital, Harvard University. This is not a formal request for module for the National Parent Drug comments regarding these guidance Prevention Corps. documents at any time. Two copies of applications. Assistance will be any comments are to be submitted, provided only to Brigham and Women’s SUMMARY: The Center for Substance except that individuals may submit one Hospital based on the receipt of a Abuse Prevention (CSAP), Substance copy. Comments are to be identified satisfactory application that is approved Abuse and Mental Health Services with the docket number found in by an independent review group. Administration (SAMHSA), is brackets in the heading of this Authority/Justification: The grant will publishing this notice to provide document. A copy of the final guidance be made under the authority of Section information to the public concerning a documents and received comments are 520A of the Public Health Service Act, planned single source grant award in available for public examination in the as amended. The award is intended to the amount of $100,000 in FY 2002 for Dockets Management Branch between 9 complete data analyses and write-up of a project period of one year to the a.m. and 4 p.m., Monday through the PRISMe multisite study findings, to National Families in Action (NFIA). Friday. complete the program manuals for the This is not a formal request for PRISMe study findings, and to produce applications. Assistance will be IV. Electronic Access an archive of the study database suitable provided only to NFIA based on the for public use at the end of the project receipt of a satisfactory application that Copies of the final guidance period. This award is being made on a is approved by an independent review documents entitled ‘‘Effectiveness of single source basis because Brigham and group. Anthelmintics: Specific Women’s Hospital has coordinated the Authority/Justification: The grant will Recommendations for Equine’’ (VICH design and implementation of the be made under the authority of section GL15), ‘‘Effectiveness of Anthelmintics: PRISMe multisite study from which the 516 of the Public Health Service Act, as Specific Recommendations for Porcine’’ additional data analyses, write-ups of amended. The award is intended to (VICH GL16), and ‘‘Effectiveness of study findings, program manuals, and support updating, pilot testing, Anthelmintics: Specific archived database will be drawn. adaptation for different target audiences Recommendations for Canine’’ (VICH Making the award to another entity of the Basic Training I module that will GL19) may be obtained on the Internet would require additional start-up time be used in the National Parent Drug at http://www.fda.gov/cvm. and costs, significant loss of critical Prevention Corps activities that CSAP
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anticipates for FY 2003. This award is Rockwall II, Room 800, 5600 Fishers for the Mental Health Services Needs of being made on a single source basis Lane, Rockville, MD 20857, (301) 443– Older Adults. because NFIA has developed the 0315. original curriculum on which the Basic Dated: June 20, 2002. SUMMARY: The Substance Abuse and I training will be based and has the Richard Kopanda, Mental Health Services Administration necessary training consultants and Executive Officer, SAMHSA. (SAMHSA) Center for Mental Health infrastructure in place to complete the [FR Doc. 02–16295 Filed 6–26–02; 8:45 am] Services (CMHS) announces the pilot testing and refinement of the Basic BILLING CODE 4162–20–P availability of FY 2002 funds for a I training curriculum prior to the start cooperative agreement for the following of the 2003 initiative. Making the award activity. This notice is not a complete to another entity would require DEPARTMENT OF HEALTH AND description of the activity; potential additional start-up time and costs, as HUMAN SERVICES applicants must obtain a copy of the well as duplication of previously Guidance for Applicants (GFA), completed work. Substance Abuse and Mental Health including Part I, Targeted Capacity The Catalog of Federal Domestic Services Administration Expansion: National Technical Assistance (CFDA) number for this Assistance Center for the Mental Health Fiscal Year (FY) 2002 Funding program is 93.243. Services Needs of Older Adults (SM 02– Opportunities FOR FURTHER INFORMATION CONTACT: For 016), and Part II, General Policies and more information about this program, AGENCY: Substance Abuse and Mental Procedures Applicable to all SAMHSA contact: Dr. Alvera Stern, Acting Health Services Administration, HHS. Applications for Discretionary Grants Director, Division of Prevention, ACTION: Notice of Funding Availability and Cooperative Agreements, before Application and Education, Center for for Targeted Capacity Expansion: preparing and submitting an Substance Abuse Prevention, SAMHSA, National Technical Assistance Center application.
Est. funds Est. number Activity Application deadline FY 2002 of awards Project period
Older Adult Technical Assistance ...... July 24, 2002 ...... $900,000 1 3 years.
The actual amount available for the and application deadline instructions, • District of Columbia. award may vary, depending on are included in the application kit. • Guam. unanticipated program requirements Purpose: The Substance Abuse and • Commonwealth of Puerto Rico. • and the number and quality of Mental Health Services Administration Northern Mariana Islands. (SAMHSA), Center for Mental Health • Virgin Islands. applications received. This program is • authorized under Section 520A of the Services (CMHS) announces the American Samoa. • Trust Territory of the Pacific Islands Public Health Service Act. SAMHSA’s availability of fiscal year (FY) 2002 (now Palau, Micronesia, and the policies and procedures for peer review funds for increasing service capacity for older persons with mental health needs. Marshall Islands). and Advisory Council review of grant Interested parties who do not meet and cooperative agreement applications One type of award will be made under the current announcement for a these criteria, are encouraged to partner were published in the Federal Register with an agency or organization that is (Vol. 58, No. 126) on July 2, 1993. National Technical Assistance Center for the Mental Health Needs of Older eligible to apply as the lead agency. General Instructions: Applicants must Applicants are encouraged to form Adults. The National Technical use application form PHS 5161–1 (Rev. partnerships with consumer, family, Assistance Center will identify, 7/00). The application kit contains the and consumer-supporter groups who are synthesize and disseminate the two-part application materials focused on the needs of older persons, knowledge base for mental health (complete programmatic guidance and both in the areas of mental health and outreach, prevention, early intervention, instructions for preparing and the general issues of aging. submitting applications), the PHS 5161– assessment, and treatment services for Applicants who applied for a Group 1 which includes Standard Form 424 older persons. I award as the lead organization under Eligibility: Eligibility to apply for the (Face Page), and other documentation the program described under GFA No. National Technical Assistance Center and forms. Application kits may be SM 02–009 cannot apply as the lead will be limited to public and private obtained from: Knowledge Exchange organization for the Technical Network (KEN), P.O. Box 42490, nonprofit entities. For example, the following are Assistance Center under this Washington, DC 20015, Telephone: 1– announcement. eligible to apply: 800–789–2647. Availability of Funds: It is estimated • State agencies or departments. The PHS 5161–1 application form and • County agencies. that a total of $900,000 will be available the full text of the grant announcement • City agencies. to support one award for a National are also available electronically via • State regional agencies. Technical Assistance Center under this SAMHSA’s World Wide Web Home Indian tribes or tribal organizations GFA in FY 2002. Actual funding levels Page: http://www.samhsa.gov (Click on (as defined in Section 4(b) and Section will depend on the availability of funds. ‘‘Grant Opportunities’’) 4(c) of the Indian Self-determination Support may be requested for a period When requesting an application kit, and Education Assistance Act). of up to 3 years for the National the applicant must specify the particular • Private, not-for-profit agencies. Technical Assistance Center award (in announcement number for which • Public or private universities. three budget periods of 1 year each). detailed information is desired. All States are defined in Section 2 of the Period of Support: An award may be information necessary to apply, PHS Act and include, in addition to the requested for a project period of up to including where to submit applications 50 States, the: 3 years.
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Criteria for Review and Funding a. A copy of the face page of the any State review process General Review Criteria: Competing application (Standard form 424). recommendations directly to: Division applications requesting funding under b. A summary of the project (PHSIS), of Extramural Activities, Policy, and this activity will be reviewed for not to exceed one page, which provides: Review, Substance Abuse and Mental technical merit in accordance with (1) A description of the population to Health Services Administration, established PHS/SAMHSA peer review be served. Parklawn Building, Room 17–89, 5600 (2) A summary of the services to be procedures. Review criteria that will be Fishers Lane, Rockville, Maryland provided. used by the peer review groups are 20857. (3) A description of the coordination specified in the application guidance The due date for State review process planned with the appropriate State or material. recommendations is no later than 60 Award Criteria for Scored local health agencies. State and local governments and days after the specified deadline date for Applications: Applications will be Indian Tribal Authority applicants are the receipt of applications. SAMHSA considered for funding on the basis of not subject to the Public Health System does not guarantee to accommodate or their overall technical merit as Reporting Requirements. Application explain SPOC comments that are determined through the peer review guidance materials will specify if a received after the 60-day cut-off. group and the appropriate National Dated: June 20, 2002. Advisory Council review process. particular FY 2002 activity is subject to Availability of funds will also be an the Public Health System Reporting Richard Kopanda, award criterion. Additional award Requirements. Executive Officer, SAMHSA. PHS Non-use of Tobacco Policy criteria specific to the programmatic [FR Doc. 02–16321 Filed 6–25–02; 1:58 pm] Statement: The PHS strongly encourages activity may be included in the BILLING CODE 4162–20–P application guidance materials. all grant and contract recipients to Catalog of Federal Domestic provide a smoke-free workplace and Assistance Number: 93.243. promote the non-use of all tobacco DEPARTMENT OF HEALTH AND Program Contact: For questions products. In addition, Public Law 103– HUMAN SERVICES concerning program issues, contact: 227, the Pro-Children Act of 1994, Betsy McDonel Herr, PhD., Government prohibits smoking in certain facilities Substance Abuse and Mental Health Project Officer (GPO), Center for Mental (or in some cases, any portion of a Services Administration Health Services, SAMHSA, Room 11C– facility) in which regular or routine Fiscal Year (FY) 2002 Funding 22 Parklawn Building, 5600 Fishers education, library, day care, health care, Opportunities Lane, Rockville, Maryland 20857, (301) or early childhood development services are provided to children. This 594–2197, E-mail: AGENCY: is consistent with the PHS mission to Substance Abuse and Mental [email protected]. Health Services Administration, HHS. For questions regarding grants protect and advance the physical and management issues, contact: Steve mental health of the American people. ACTION: Notice of funding availability Hudak, Division of Grants Management, Executive Order 12372: Applications for a supplement to expand and extend OPS/SAMHSA, Rockwall II, 6th floor, submitted in response to the FY 2002 the Cooperative Agreement for the 5600 Fishers Lane, Rockville, MD activity listed above are subject to the National Center for Child Traumatic 20857, (301) 443–9666, e-mail: intergovernmental review requirements Stress (NCCTS). [email protected]. of Executive Order 12372, as Public Health System Reporting implemented through DHHS regulations SUMMARY: The Substance Abuse and Requirements: The Public Health at 45 CFR Part 100. E.O. 12372 sets up Mental Health Services Administration System Impact Statement (PHSIS) is a system for State and local government (SAMHSA) Center for Mental Health intended to keep State and local health review of applications for Federal Services (CMHS) announces the officials apprised of proposed health financial assistance. Applicants (other availability of FY 2002 funds for a grant services grant and cooperative than Federally recognized Indian tribal for the following activity. This notice is agreement applications submitted by governments) should contact the State’s not a complete description of the community-based nongovernmental Single Point of Contact (SPOC) as early activity; potential applicants must organizations within their jurisdictions. as possible to alert them to the obtain a copy of the Guidance for Community-based nongovernmental prospective application(s) and to receive Applicants (GFA), including Part I, service providers who are not any necessary instructions on the State’s Supplement to Expand and Extend the transmitting their applications through review process. For proposed projects Cooperative Agreement for the National the State must submit a PHSIS to the serving more than one State, the Center for Child Traumatic Stress (SM head(s) of the appropriate State and applicant is advised to contact the SPOC 02–014), and Part II, General Policies local health agencies in the area(s) to be of each affected State. A current listing and Procedures Applicable to all affected not later than the pertinent of SPOCs is included in the application SAMHSA Applications for Discretionary receipt date for applications. This guidance materials or on SAMHSA’s Grants and Cooperative Agreements, PHSIS consists of the following website under ‘‘Assistance with Grant before preparing and submitting an information: Applications’’. The SPOC should send application.
Est. Number Project Activity Application deadline Est. funds FY 2002 of awards period
Cooperative Agreement for the National Center for July 24, 2002 ...... $5.3 million ...... 1 2 years. Child Traumatic Stress—Supplement.
The actual amount available for the unanticipated program requirements applications received. This program is award may vary, depending on and the number and quality of authorized under Section 582 of the
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Public Health Service Act. SAMHSA’s The NCCTS has proven capable and Terrorism, Division of Program policies and procedures for peer review effective in carrying out activities in Development, Special Populations and and Advisory Council review of grant pursuit of the goals of the NCTSI. This Projects, Center for Mental Health and cooperative agreement applications success is reflected in the expansion Services, SAMHSA, Room 17C–26, were published in the Federal Register and supplementation of funding for Parklawn Building, 5600 Fishers Lane, (Vol. 58, No. 126) on July 2, 1993. NCTSI for FY 2002. The government’s Rockville, MD 20857, (301) 443–2940, General Instructions: Applicants must interest in building on capacity and E-Mail: [email protected]. use application form PHS 5161–1 (Rev. infrastructure already developed with For questions regarding grants 7/00). The application kit contains the Government funds is a compelling management issues, contact: Steve two-part application materials argument for continuing the NCTSI Hudak, Division of Grants Management, (complete programmatic guidance and coordination activities through the OPS/SAMHSA, Rockwall II, 6th floor, instructions for preparing and UCLA-Duke NCCTS. Further, 5600 Fishers Lane, Rockville, MD submitting applications), the PHS 5161– duplication of effort and substantial 20857, (301) 443–9666, E-Mail: 1 which includes Standard Form 424 confusion would result if a second [email protected]. (Face Page), and other documentation ‘‘National Center’’ were established with Public Health System Reporting and forms. Application kits may be a primary mission of networking and Requirements: The Public Health obtained from: Knowledge Exchange collaboration building in the NCTSI. For System Impact Statement (PHSIS) is Network (KEN), P.O. Box 42490, these reasons only the currently funded intended to keep State and local health Washington, DC 20015, Telephone: 1– NCCTS, operated by UCLA, may apply officials apprised of proposed health 800–789–2647. for this award. services grant and cooperative The PHS 5161–1 application form and Availability of Funds: Approximately agreement applications submitted by the full text of the activity are also $5.3 million will be available for FY community-based nongovernmental available electronically via SAMHSA’s 2002 (both direct and indirect costs). organizations within their jurisdictions. World Wide Web Home Page: http:// Approximately $1.8 million of the Community-based nongovernmental www.samhsa.gov. award will be available (in FY 2002 service providers who are not When requesting an application kit, only) to address child traumatic stress transmitting their applications through the applicant must specify the particular resulting from disasters and terrorism. the State must submit a PHSIS to the activity for which detailed information In FY 2002 and FY 2003 approximately head(s) of the appropriate State and is desired. All information necessary to $2.55 million will be available to apply, including where to submit local health agencies in the area(s) to be expand the general operations of the affected not later than the pertinent applications and application deadline NCCTS (the Network is already instructions, are included in the receipt date for applications. This expected to double in size in FY 2002) PHSIS consists of the following application kit. and approximately $950,000 of the Purpose: The Substance Abuse and information: award is expected to be put towards the a. A copy of the face page of the Mental Health Services Administration expansion of the National Resource (SAMHSA), Center for Mental Health application (Standard form 424). Center. The actual level will depend on b. A summary of the project (PHSIS), Services (CMHS) announces the appropriated funds and the availability of fiscal year (FY) 2002 not to exceed one page, which provides: application’s budget justification. (1) A description of the population to funds for a supplement to expand and Period of Support: An award may be be served. extend the cooperative agreement to requested for a project period of up to (2) A summary of the services to be develop and implement the National 2 years. Center for Child Traumatic Stress Criteria for Review and Funding: provided. (NCCTS). The NCCTS currently General Review Criteria: Competing (3) A description of the coordination coordinates the National Child applications requesting funding under planned with the appropriate State or Traumatic Stress Network (NCTSN) and this activity will be reviewed for local health agencies. provides leadership and focus for 5 technical merit in accordance with State and local governments and Intervention Development and established PHS/SAMHSA peer review Indian Tribal Authority applicants are Evaluation Centers (IDE) and 12 procedures. Review criteria that will be not subject to the Public Health System Community Treatment and Service used by the peer review groups are Reporting Requirements. Application Centers (CTS). These funds will enable specified in the application guidance guidance materials will specify if a NCCTS to (1) expand its Network and material. particular FY 2002 activity is subject to collaboration support for currently Award Criteria for Scored the Public Health System Reporting funded programs and extend this Applications: Applications will be Requirements. support to all new National Child considered for funding on the basis of PHS Non-use of Tobacco Policy Traumatic Stress Initiative (NCTSI) their overall technical merit as Statement: The PHS strongly encourages grantees funded in FY 2002; (2) determined through the peer review all grant and contract recipients to comprehensively address the group and the appropriate National provide a smoke-free workplace and understanding, evaluation, and Advisory Council review process. promote the non-use of all tobacco treatment of child traumatic stress Availability of funds will also be an products. In addition, Public Law 103– resulting from disasters and terrorism; award criteria. Additional award criteria 227, the Pro-Children Act of 1994, and (3) bring the knowledge gained and specific to the programmatic activity prohibits smoking in certain facilities lessons learned from NCTSN to the may be included in the application (or in some cases, any portion of a nation through the National Resource guidance materials. facility) in which regular or routine Center on Child Traumatic Stress. Catalog of Federal Domestic education, library, day care, health care, Eligibility: Eligibility is limited to the Assistance Number: 93.243. or early childhood development University of California at Los Angeles Program Contact: For questions services are provided to children. This (UCLA). UCLA (in partnership with concerning program issues, contact: is consistent with the PHS mission to Duke University) has operated the Robert DeMartino, M.D., Associate protect and advance the physical and currently funded NCCTS in its first year. Director for Program in Trauma and mental health of the American people.
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Executive Order 12372: Applications National Heritage Corridor and State Esq., Office of the General Counsel, U.S. submitted in response to the FY 2002 Heritage Park. The Commission was International Trade Commission, activity listed above are subject to the established to assist the Commonwealth telephone (202) 205–3095 or (202) 205– intergovernmental review requirements of Pennsylvania and its political 3105. Copies of the ALJ’s ID and all of Executive Order 12372, as subdivisions in planning and other nonconfidential documents filed implemented through DHHS regulations implementing an integrated strategy for in connection with this investigation are at 45 CFR Part 100. E.O. 12372 sets up protecting and promoting cultural, or will be available for inspection a system for State and local government historic and natural resources. The during official business hours (8:45 a.m. review of applications for Federal Commission reports to the Secretary of to 5:15 p.m.) in the Office of the financial assistance. Applicants (other the Interior and to Congress. Secretary, U.S. International Trade than Federally recognized Indian tribal SUPPLEMENTARY INFORMATION: The Commission, 500 E Street, SW., governments) should contact the State’s Delaware & Lehigh National Heritage Washington, DC 20436, telephone (202) Single Point of Contact (SPOC) as early Corridor Commission was established 205–2000. Hearing-impaired persons are as possible to alert them to the by Public Law 100–692, November 18, advised that information on this matter prospective application(s) and to receive 1988 and extended through Public Law can be obtained by contacting the any necessary instructions on the State’s 105–355, November 13, 1998. Commission’s TDD terminal on (202) 205–1810. General information review process. For proposed projects FOR FURTHER INFORMATION CONTACT: C. concerning the Commission may also be serving more than one State, the Allen Sachse, Executive Director, applicant is advised to contact the SPOC obtained by accessing its Internet server Delaware & Lehigh National Heritage (http://www.usitc.gov). The public of each affected State. A current listing Corridor Commission, 10 E. Church of SPOCs is included in the application record of this investigation may be Street, Room A–208, Bethlehem, PA viewed on the Commission’s electronic guidance materials. The SPOC should 18018, (610) 861–9345. send any State review process docket (EDIS–ON–LINE) at http:// recommendations directly to: Division Dated: June 21, 2002. dockets.usitc.gov/eol/public. of Extramural Activities, Policy, and C. Allen Sachse, SUPPLEMENTARY INFORMATION: This Review, Substance Abuse and Mental Executive Director, Delaware & Lehigh investigation was instituted on August Health Services Administration, National Heritage Corridor Commission. 7, 2001, to determine whether there is Parklawn Building, Room 17–89, 5600 [FR Doc. 02–16227 Filed 6–26–02; 8:45 am] a violation of section 337 of the Tariff Fishers Lane, Rockville, Maryland BILLING CODE 6820–PE–M Act of 1930, as amended, in the 20857. importation into the United States, sale The due date for State review process for importation, or the sale within the recommendations is no later than 60 INTERNATIONAL TRADE United States after importation of days after the specified deadline date for COMMISSION certain clay target throwing machines the receipt of applications. SAMHSA and components thereof by reason by does not guarantee to accommodate or [Investigation No. 337–TA–461] infringement of claims 1 or 6 of U.S. Letters Patent 5,249,563, or claims 1, 9, explain SPOC comments that are In the Matter of Certain Clay Target received after the 60-day cut-off. 10, 15, or 16 of U.S. Letters Patent Throwing Machines and Components 6,176,229 and whether an industry in Dated: June 20, 2002. Thereof; Notice of Commission the United States exists as required by Richard Kopanda, Determination Not To Review an Initial subsection (a)(2) of section 337. 66 FR Executive Officer, SAMHSA. Determination Granting a Joint Motion 42168 (2001). On March 13, 2002, [FR Doc. 02–16296 Filed 6–26–02; 8:45 am] To Terminate the Investigation as to All complainant and respondents filed a BILLING CODE 4162–20–P Respondents on the Basis of a Joint Motion for Termination of Settlement Agreement; Termination of Investigation As to [Respondents] Based Investigation Upon a Settlement Agreement and DEPARTMENT OF THE INTERIOR AGENCY: International Trade License. On March 22, 2002, the Commission. Commission investigative attorney filed Office of the Secretary a response in support of the joint ACTION: Notice. motion. On June 6, 2002, the presiding Delaware & Lehigh National Heritage ALJ issued an ID (Order No. 5) granting Corridor Commission Meeting SUMMARY: Notice is hereby given that the U.S. International Trade the joint motion based on the settlement AGENCY: Department of the Interior. Commission has determined not to agreement and a non-exclusive patent license. There being no other ACTION: Notice of meeting. review an initial determination (‘‘ID’’) of the presiding administrative law judge respondents in the investigation, the SUMMARY: This notice announces an (‘‘ALJ’’) granting the joint motion of ALJ ordered the investigation upcoming meeting of the Delaware & complainant Stuart Patenaude terminated in its entirety. No party Lehigh National Heritage Corridor (‘‘complainant’’) and respondents Go¨sta petitioned for review of the ID. This action is taken under the Commission. Notice of this meeting is Gustafssons Mekaniska Vekstad AB, of authority of section 337 of the Tariff Act required under the Federal Advisory Arboga, Sweden; GMV Superstar AB, of of 1930, as amended, 19 U.S.C. 1337, Committee Act (Public Law 92463). Arboga, Sweden; and Gert Holmqvist and Commission rule 210.42(h), 19 CFR MEETING DATE AND TIME: Friday, July 12, Enterprises, Ltd., of Okotoks, Alberta, 210.42(h). 2002, Time: 1:30 p.m. to 4 p.m. Canada (‘‘respondents’’) to terminate the Issued: June 21, 2002. ADDRESSES: Hanna’s Ugly Mug investigation as to respondents on the Restaurant, 217219 Main Street, White basis of a settlement agreement. By order of the Commission. Haven, PA 18661. Termination of these respondents Marilyn R. Abbott, The agenda for the meeting will focus terminates the investigation. Secretary to the Commission. on implementation of the Management FOR FURTHER INFORMATION CONTACT: [FR Doc. 02–16239 Filed 6–26–02; 8:45 am] Action Plan for the Delaware & Lehigh Michael Diehl, Esq. or Andrea Casson, BILLING CODE 7020–02–P
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INTERNATIONAL TRADE by reason of infringement of claims 1, 2, (1) the ALJ’s findings and conclusions COMMISSION and 8 of U.S. Letters Patent 5,559,352 of law regarding the ’352 patent with (‘‘the ′352 patent’’) and claims 1, 3–16, respect to infringement of the asserted [Inv. No. 337–TA–450] and 19–21 of U.S. Letters Patent claims and domestic industry under the ′ Certain Intergrated Circuits, Processes 6,117,345 (‘‘the 345 patent’’). Id. doctrine of equivalents; for Making Same, and Products On November 2, 2001, the presiding (2) the ALJ’s finding that respondents’ Containing Same; Notice of ALJ issued an ID (ALJ Order No. 15) old E5 model ESD transistor does not Commission Decision to Review granting complainants’ motion for infringe any asserted claim of the ’352 Portions of an Initial Determination summary determination on the issue of patent, either literally or equivalently; importation and denying respondents’ (3) the ALJ’s claim construction of the Finding No Violation of Section 337 of motion for summary determination of limitations ‘‘an ESD protection device’’ the Tariff Act of 1930 lack of importation. That ID was not (claims 1, 2, and 8 of the ’352 patent), AGENCY: International Trade reviewed by the Commission. A tutorial ‘‘a gate’’ (claims 1 and 2), ‘‘gates’’ (claim Commission. session was held on November 5, 2001, 8), and ‘‘source/drain regions * * * ACTION: Notice. and an evidentiary hearing was held with each source/drain region from November 7, 2001, through comprising’’ (claims 1, 2, and 8), and SUMMARY: Notice is hereby given that November 16, 2001, and from December the ALJ’s invalidity, domestic injury, the U.S. International Trade 10, 2001, through December 12, 2001. and infringement findings and Commission has determined to review The ALJ issued his final ID on May 6, conclusions of law with respect to those certain portions of a final initial 2002, concluding that there was no limitations; determination (ID) of the presiding violation of section 337. With respect to (4) the ALJ’s finding that claim 8 of administrative law judge (ALJ) finding the ’352 patent, the ALJ found that: the ’352 patent is invalid as made no violation of section 337 of the Tariff complainants have not established that obvious by a combination of prior art Act of 1930, as amended, in the above- the domestic industry requirement is references; captioned investigation. met; none of respondents’ accused (5) whether the economic prong of the devices practice any asserted claim of domestic industry requirement is met FOR FURTHER INFORMATION CONTACT: Clara Kuehn, Esq., Office of the General the ’352 patent literally or under the with respect to the ’352 patent; (6) the ALJ’s findings that the ‘‘second Counsel, U.S. International Trade doctrine of equivalents; and claims 1 antireflective coating’’ (claim 1 and Commission, 500 E Street, SW., and 2 of the ’352 patent are invalid as anticipated under 35 U.S.C. 102 and asserted dependent claims 3–8 of the Washington, DC 20436, telephone (202) claim 8 of the ’352 patent is invalid for ’345 patent) and ‘‘cap layer’’ (claims 9– 205–3012. Hearing-impaired persons are obviousness under 35 U.S.C. 103. The 16, 19–20, and 21 of the ’345 patent) are advised that information on this matter ALJ found each of the ’345 patent claims disclosed in the Tobben patent, and can be obtained by contacting the listed in the notice of investigation, i.e., consequently (a) the ALJ’s findings with Commission’s TDD terminal on 202– claims 1, 3–16, 19–20, and 21, invalid respect to etching the second 205–1810. General information as anticipated by and made obvious by antireflective coating or cap layer concerning the Commission may also be certain prior art. The ALJ stated that, in (claims 4 and 12), (b) the ALJ’s ultimate obtained by accessing its Internet server their post-hearing filings, complainants finding that the Tobben patent (http://www.usitc.gov.) asserted only claims 1, 3–5, 9, 11–13, anticipates claims 1, 3–16, 19–20, and Copies of the public version of the and 20–21 of the ’345 patent against 21 of the ’345 patent, and (c) the ALJ’s ALJ’s ID and all other nonconfidential respondents. He found that, if valid, conclusion that claim 13 is made documents filed in connection with this each of the asserted claims of the ’345 obvious by the Tobben patent and other investigation are or will be available for patent, i.e., claims 1, 3–5, 9, 11–13, and prior art; inspection during official business 20–21, is literally infringed by SiS’s (7) the ALJ’s conclusion that claim 13 hours (8:45 a.m. to 5:15 p.m.) in the existing (or old) SiON manufacturing of the ’345 patent is invalid as obvious Office of the Secretary, U.S. process, but that respondents’ new N2O in light of the Tobben patent; and International Trade Commission, 500 E process does not infringe any asserted (8) the ALJ’s conclusion that claims 1, Street, SW., Washington, D.C. 20436, claim of the ’345 patent. The ALJ further 3–16, 19–20, and 21 of the ’345 patent telephone 202–205–2000. found that a domestic industry exists are invalid as made obvious by the SUPPLEMENTARY INFORMATION: The with respect to the ’345 patent. On May Abernathey patent in combination with Commission instituted this investigation 13, 2002, the ALJ issued his the Pan, Yagi, and/or Yota publications. by notice published in the Federal recommended determination on remedy The Commission has determined not Register on March 6, 2001. 66 FR 13567 and bonding. to review the remainder of the ID, (2001). The complainants are United On May 17, 2002, complainants and including the ID’s conclusions and Microelectronics Corporation, Hsinchu the Commission investigative attorney findings of fact with respect to whether City, Taiwan; UMC Group (USA), (‘‘IA’’) petitioned for review of the the Tobben patent is prior art to the ’345 Sunnyvale, CA; and United Foundry subject ID, and respondents filed a patent, infringement of the asserted Service, Inc., Hopewell Junction, NY. Id. contingent petition for review. On May claims of the ’345 patent, domestic The Commission named two 24, 2002, complainants, the IA, and industry concerning the ’345 patent, and respondents, Silicon Integrated Systems respondents filed responses. failure to disclose the best mode of Corp., Hsinchu City, Taiwan, and Having examined the record in this practicing the invention of the ’345 Silicon Integrated Systems Corporation, investigation, including the ID, the patent. Sunnyvale, CA (collectively, ‘‘SiS’’). Id. petitions for review, and the responses On review, the Commission requests The complaint, as supplemented, thereto, the Commission has determined briefing based on the evidentiary record alleged violations of section 337 in the to review and clarify that the ALJ found on all issues under review and is importation, the sale for importation, claim 13 of the ’345 patent made particularly interested in receiving and the sale within the United States obvious, but not anticipated, by the answers to the following questions, with after importation of certain integrated Tobben patent. The Commission has all answers cited to the evidentiary circuits and products containing same also determined to review: record:
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1. Have complainants established the 9. Assuming that claim 9 of the ’345 the Secretary of the Treasury. The economic prong of the domestic patent is anticipated by the Tobben Commission is therefore interested in industry requirement with respect to the patent, is claim 13 obvious? receiving submissions concerning the ’352 patent? 10. For purposes of obviousness amount of the bond that should be 2. Should the term ‘‘an ESD under 35 U.S.C. 103, does the imposed. protection device’’ in claims 1, 2, and 8 Abernathey patent teach one of ordinary On May 6, 2002, the ALJ issued Order of the ’352 patent be construed to skill in the relevant art a barrier layer No. 24 granting in part complainants’ require a protection device that is that serves as an ‘‘antireflective September 13, 2001, motion for separate and apart from the circuit it coating’’? In your response please sanctions. Pursuant to rule 210.25(d) of protects? address how one of ordinary skill in the the Commission’s Rules of Practice and 3. Assuming that the term ‘‘a gate’’ art would understand the thickness of Procedure, 19 CFR 210.25(d), the refers to a single, particular gate for a the silicon dioxide barrier layer Commission has specified below the specific FET (but without excluding disclosed in the Abernathey patent. schedule for the filing of any petitions multiple-FET ESD protection devices) 11. Was the issue of the publication appealing Order No. 24 and the (ID at 14–15), should the limitation dates of the Yota, Pan, and Yagi responses thereto. ‘‘source/drain regions * * * with each references (see complainants’ petition Written Submissions source/drain region comprising’’ be for review at 77) raised before the ALJ? construed as excluding from the In connection with the final The parties to the investigation are disposition of this investigation, the claimed ESD protection device source/ requested to file written submissions on Commission may issue (1) an order that drain regions that lack one or more of the issues under review. The could result in the exclusion of the the three implants (i.e., the ‘‘first lightly submission should be concise and subject articles from entry into the implanted region,’’ ‘‘heavier implanted thoroughly referenced to the record in United States, and/or (2) cease and region,’’ and ‘‘second lightly implanted this investigation, including references desist orders that could result in region’’)? In responding to this question to exhibits and testimony. Additionally, respondents being required to cease and please address the ‘‘open’’ transition in the parties to the investigation, desist from engaging in unfair acts in claim 1 of the ’352 patent (‘‘An ESD interested government agencies, and any the importation and sale of such protection device * * * comprising’’). other interested persons are encouraged articles. Accordingly, the Commission is to file written submissions on the issues 4. In light of your answers to interested in receiving written questions 2 and 3, are claims 1, 2, or 8 submissions that address the form of of remedy, the public interest, and of the ’352 patent infringed (literally or remedy, if any, that should be ordered. bonding. Such submissions should under the doctrine of equivalents)? Have If a party seeks exclusion of an article address the ALJ’s May 13, 2002, complainants established the technical from entry into the United States for recommended determination on remedy prong of the domestic industry purposes other than entry for and bonding. Complainant and the requirement with respect to the ’352 consumption, the party should so Commission investigative attorney are patent? In your response, please address indicate and provide information also requested to submit proposed Festo Corp. v. Shoketsu Kinzoku Kogyo establishing that activities involving remedial orders for the Commission’s Kabushiki Co., 122 S.Ct. 1831 (2002). other types of entry that either are consideration. The written submissions 5. Does respondents’ old E5 model adversely affecting it or are likely to do and proposed remedial orders must be ESD transistor infringe any asserted so. For background information, see the filed no later than the close of business claim of the ’352 patent? In your Commission Opinion, In the Matter of on July 5, 2002. Reply submissions must response, please address Symbol Certain Devices for Connecting be filed no later than the close of Technologies, Inc. v. Opticon, Inc., 935 Computers via Telephone Lines, Inv. business on July 12, 2002. No further F.2d 1569 (Fed. Cir. 1991). No. 337–TA–360. If the Commission submissions will be permitted unless 6. In light of your answers to contemplates some form of remedy, it otherwise ordered by the Commission. questions 2 and 3, are claims 1, 2, or 8 must consider the effects of that remedy Any petitions appealing Order No. 24 of the ’352 patent invalid? upon the public interest. The factors the must be filed no later than close of 7. In light of the ALJ’s construction of Commission will consider include the business on July 26, 2002. Reply the term ‘‘antireflective coating’’ to effect that an exclusion order and/or submissions must be filed no later than require, inter alia, ‘‘an antireflective cease and desist orders would have on the close of business on August 2, 2002. effect * * *. whether through (1) the public health and welfare, (2) Persons filing written submissions absorption or interference * * * competitive conditions in the U.S. must file with the Office of the Secretary significant to the purposes of the economy, (3) U.S. production of articles the original and 14 true copies thereof invention’’ (ID at 79), does the Tobben that are like or directly competitive with on or before the deadlines stated above. patent’s planarization layer disclose the those that are subject to investigation, Any person desiring to submit a ‘‘second antireflective coating’’ of claim and (4) U.S. consumers. The document (or portion thereof) to the 1 (and dependent claims 3–8) of the Commission is therefore interested in Commission in confidence must request ’345 patent? receiving written submissions that confidential treatment unless the 8. In light of the ALJ’s construction of address the aforementioned public information has already been granted the term ‘‘cap layer’’ of independent interest factors in the context of this such treatment during the proceedings. claims 9 and 21 of the ’345 patent (ID investigation. All such requests should be directed to at 119–20), does the Tobben patent If the Commission orders some form the Secretary of the Commission and disclose a cap layer that acts as either of remedy, the President has 60 days to must include a full statement of the (a) an ‘‘antireflective coating’’ or (b) a approve or disapprove the reasons why the Commission should protector for the top corners of metal Commission’s action. During this grant such treatment. See 19 CFR 201.6. wiring lines during the HDPCVD period, the subject articles would be Documents for which confidential process? With respect to (a), above, entitled to enter the United States under treatment is granted by the Commission please address column 3, lines 6–20 of a bond, in an amount to be determined will be treated accordingly. All the Tobben patent. by the Commission and prescribed by nonconfidential written submissions
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will be available for public inspection at section 703(b) of the Act (19 U.S.C. subheadings 7216.32.00 and 7216.33.00 the Office of the Secretary. 1671b(b)) and that imports of PET film of the Harmonized Tariff Schedule of This action is taken under the from India and Taiwan were being sold the United States, that have been found authority of section 337 of the Tariff Act at LTFV within the meaning of section by the Department of Commerce to be of 1930, as amended (19 U.S.C. 1337), 733(b) of the Act (19 U.S.C. 1673b(b)). sold in the United States at less than fair and in sections 210.25 and 210.42–.45 Notice of the scheduling of the final value (LTFV). of the Commission’s Rules of Practice phase of the Commission’s Background and Procedure (19 CFR 210.25, 210.42– investigations and of a public hearing to .45). be held in connection therewith was The Commission instituted these given by posting copies of the notice in investigations effective May 23, 2001, Issued: June 21, 2002. following receipt of petitions filed with By order of the Commission. the Office of the Secretary, U.S. International Trade Commission, the Commission and Commerce by the Marilyn R. Abbott, Washington, DC, and by publishing the Committee for Fair Beam Imports and Secretary. notice in the Federal Register of its individual members Northwestern [FR Doc. 02–16243 Filed 6–26–02; 8:45 am] February 1, 2002 (67 FR 4995). The Steel & Wire Co., Sterling IL; Nucor BILLING CODE 7020–02–P hearing was held in Washington, DC, on Corp., Charlotte, NC; Nucor-Yamato May 9, 2002, and all persons who Steel Co., Blytheville, AR; and TXI- requested the opportunity were Chaparral Steel Co., Midlothian, TX. INTERNATIONAL TRADE permitted to appear in person or by The final phase of the investigations COMMISSION counsel. was scheduled by the Commission [Investigations Nos. 701–TA–415 and 731– The Commission transmitted its following notification of preliminary TA–933–934 (Final)] determinations in these investigations to determinations by Commerce that the Secretary of Commerce on June 18, imports of certain structural steel beams Polyethylene Terephthalate Film, 2002. The views of the Commission are from China, Germany, Russia, South Sheet, and Strip From India and contained in USITC Publication 3518 Africa, and Taiwan were being sold at Taiwan (June 2002), entitled Polyethylene LTFV within the meaning of section 733(b) of the Act (19 U.S.C. 1673b(b)). Determinations Terephthalate Film, Sheet, and Strip from India and Taiwan: Investigations Although Commerce made negative On the basis of the record 1 developed preliminary determinations with respect Nos. 701–TA–415 and 731–TA–933–934 3 in the subject investigations, the United (Final). to imports from Luxembourg and States International Trade Commission Spain, the Commission decided, for determines, pursuant to sections 705(b) By order of the Commission. purposes of efficiency, to proceed and 735(b) of the Tariff Act of 1930 (19 Issued: June 24, 2002. concurrently with the final phase of all U.S.C. 1671d(b) and 19 U.S.C. 1673d(b)) Marilyn R. Abbott, the investigations. Notice of the (the Act), respectively, that an industry Secretary to the Commission. scheduling of the final phase of the in the United States is materially [FR Doc. 02–16312 Filed 6–26–02; 8:45 am] Commission’s investigations and of a injured by reason of imports from India BILLING CODE 7020–02–P public hearing to be held in connection of polyethylene terephthalate film, therewith was given by posting copies sheet, and strip (PET film), provided for of the notice in the Office of the in subheading 3920.62.00 of the INTERNATIONAL TRADE Secretary, U.S. International Trade Harmonized Tariff Schedule of the COMMISSION Commission, Washington, DC, and by United States, that have been found by publishing the notice in the Federal [Investigations Nos. 731–TA–935–936 and Register of February 7, 2002 (67 FR the Department of Commerce to be 938–942 (Final)] subsidized by the Government of India 5851). The hearing was held in and by reason of imports from India and Certain Structural Steel Beams From Washington, DC, on May 15, 2002, and Taiwan of PET film that have been China, Germany, Luxembourg, Russia, all persons who requested the found by the Department of Commerce South Africa, Spain, and Taiwan opportunity were permitted to appear in to be sold in the United States at less person or by counsel. The Commission transmitted its than fair value (LTFV). Determinations determinations in these investigations to On the basis of the record 1 developed Background the Secretary of Commerce on June 28, in the subject investigations, the United 2002. The views of the Commission are The Commission instituted these States International Trade Commission contained in USITC Publication 3522 investigations effective May 17, 2001, determines,2 pursuant to section 735(b) (June 2002), entitled Certain Structural following receipt of a petition filed with of the Tariff Act of 1930 (19 U.S.C. Steel Beams from China, Germany, the Commission and Commerce by 1673d(b)) (the Act), that an industry in Luxembourg, Russia, South Africa, DuPont Teijin Films, Wilmington, DE, the United States is not materially Mitsubishi Polyester Film of America, Spain, and Taiwan: Investigations Nos. injured or threatened with material 731–TA–935–936 and 938–942 (Final). Greer, SC, and Toray Plastics (America), injury, and the establishment of an Inc., North Kensington, RI. The final industry in the United States is not Issued: June 24, 2002. phase of the investigations was materially retarded, by reason of By order of the Commission. scheduled by the Commission following imports from China, Germany, Marilyn R. Abbott, notification of preliminary Luxembourg, Russia, South Africa, Secretary to the Commission. determinations by Commerce that Spain, and Taiwan of certain structural [FR Doc. 02–16305 Filed 6–26–02; 8:45 am] imports of PET film from India were steel beams, provided for in BILLING CODE 7020–02–P being subsidized within the meaning of 1 The record is defined in sec. 207.2(f) of the 3 Although Commerce initially made an 1 The record is defined in sec. 207.2(f) of the Commission’s Rules of Practice and Procedure (19 affirmative dumping determination, it published an Commission’s Rules of Practice and Procedure (19 CFR § 207.2(f)). amended preliminary determination of sales at not CFR 207.2(f)). 2 Commissioner Lynn M. Bragg dissenting. less than fair value on January 31, 2002.
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DEPARTMENT OF JUSTICE comments received no later than July 9, and implement certain mitigation 2002. Comments should be addressed to measures restricting livestock use of the Notice Relating to Public Comment the Assistant Attorney General of the riparian area. Period on Environmental Settlement in Environment and Natural Resources The Department of Justice will accept In Re Fruit of the Loom, Inc. Division, Department of Justice, P.O. written comments relating to this Notice is hereby given of an extension Box 7611, Ben Franklin Station, proposed Consent Decree for thirty (30) of the period for public comment with Washington, DC 20044, and should refer days from the date of publication of this respect to the St. Louis Facility, to In re Fruit of the Loom, Inc., D.J. Ref. notice. Please address comments to Breckenridge Facility, and Hollywood No. 90–11–2–07096. Copies of the Joseph R. Perella, Assistant United Dump Facility under the proposed proposed settlements may be examined States Attorney, United States settlement entered into by the United at the Office of the United States Attorney’s Office, P.O. Box 570, States on behalf of U.S. EPA, Attorney for the District of Delaware, Burlington, Vermont 05402, and refer to Department of Interior, National 1201 Market Street, Suite 1100, United States v. Magnan, Civ. No. 1:01– Oceanic and Atmospheric Wilmington, DE, the United States CV–333 (D.VT). Administration of the Department of Environmental Protection Agency, The proposed Consent Decree may be Commerce, and the Nuclear Regulatory Region 2, 290 Broadway, 17th Floor, examined at the Clerk’s Office, United Commission, the States of Illinois, New York, New York, the United States States District Court for the District of Environmental Protection Agency, Michigan, New Jersey, and Tennessee, Vermont, 204 Main St., Brattleboro, Region 4, 61 Forsyth Street, SW., Debtors Fruit of the Loom, Inc. and NWI Vermont. In addition, the proposed Atlanta, Georgia, and the United States Land Management Corp., and Velsicol consent decree may be viewed on the Environmental Protection Agency, Chemical Corporation and True World Wide Web at http:// Region 5, 77 West Jackson Blvd., 14th Specialty Corporation, which was filed www.usdoj.gov/enrd/enrd-home.html. Floor, Chicago, Illinois. Copies of the on April 17, 2002 in In re Fruit of the proposed settlements may also be Scott A. Schachter, loom, Inc., No. 99–4497 (PJW) with the obtained by request addressed to the United States Bankruptcy Court for the Assistant Chief Environmental Defense Department of Justice Consent Decree Section. District of Delaware. The public Library, P.O. Box 7611, Ben Franklin comment period has been extended [FR Doc. 02–16215 Filed 6–26–02; 8:45 am] Station, Washington, DC 20044. In BILLING CODE 4410–15–M until July 9, 2002 but only with respect requesting a copy of the proposed to comments relating to the St. Louis settlements, please enclose a check in Facility in St. Louis, Michigan; the the amount of $24.75 for (25 cents per DEPARTMENT OF JUSTICE Breckenridge Facility in St. Louis/ page for reproduction costs), payable to Breckenridge, Michigan; and the the United States Treasurer. Membership of the 2002 Senior Hollywood Dump Facility in Memphis, Executive Service Performance Review Tennessee. The proposed settlement Bruce S. Gelber, Boards would, inter alia, resolve certain claims Section Chief, Environmental Enforcement of the Governmental Parties against the Section, Environment and Natural Resources AGENCY: Department of Justice Division. settling parties under the ACTION: Notice of Department of Comprehensive Environmental [FR Doc. 02–16214 Filed 6–26–02; 8:45 am] Justice’s 2002 Senior Executive Service Response Compensation and Liability BILLING CODE 4410–15–M Performance Review Boards. Act, 42 U.S.C. 9601 et seq., Section 7003 of the Resource Conservation and SUMMARY: Pursuant to the requirements Recovery Act (‘‘RCRA’’), 42 U.S.C. 6973, DEPARTMENT OF JUSTICE of 5 U.S.C. 4314(c)(4), the Department of and the Atomic Energy Act, 42 U.S.C. Notice of Lodging Proposed Consent Justice announces the membership of its §§ 2011 et seq., relating to those Decree Senior Executive Service (SES) Facilities. Under the settlement, inter Performance Review Boards (PRBs). The alia, the following will be dedicated to In accordance with Departmental purpose of the PRBs is to provide fair fund response action or costs and Policy, 28 CFR 50.7, notice is hereby and impartial review of SES natural resource damage assessment or given that a proposed consent decree in performance appraisals and bonus restoration at certain Facilities: (1) United States v. Henry J. Magnan, Civil recommendations. The PRBs will make $4,292,808 to be paid in full as an Action No. 1:01–CV–333 (D.VT), was recommendations regarding the final Allowed Administrative Expense; (2) lodged with the United States District performance ratings to be assigned and certain proceeds from general liability Court for the District of Vermont on SES bonuses to be awarded. insurance claims; (3) certain future June 14, 2002. This proposed Consent FOR FURTHER INFORMATION CONTACT: recoveries from preferred shares of stock Decree concerns a complaint filed by Debra M. Tomchek, Director, Personnel in True Specialty Corporation; and (4) the United States against Henry J. Staff, Justice Management Division, certain proceeds from Fruit of the Magnan, pursuant to Sections 301(a) Department of Justice, Washington, DC Loom’s and Velsicol’s ‘‘cost cap’’ and and 404 of the Clean Water Act, 33 20530; (202) 514–6788. pollution legal liability insurance U.S.C. 1311(a) and 1344, and imposes policies. civil penalties against Defendant Henry Department of Justice, 2002 Senior The United States published notice of J. Magnan, for the unauthorized Executive Service Performance Review the lodging of the Settlement Agreement discharge of dredged or fill material into Board Members in the Federal Register on May 2, 2002. waters of the United States located in Office of the Solicitor General 67 Fed. Reg. 22108 (2002). In response wetlands on property in Farfield, to requests for an extension of the Vermont. Lawrence G. Wallace, Deputy Solicitor public comment period, the United The proposed Consent Decree General States has elected to extend the requires the payment of civil penalties Office of Legal Counsel comment period with respect to these in the amount of $5,000 and requires three Facilities and to accept public Henry J. Magnan to restore the wetland Paul P. Colborn, Special Counsel
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Office of Professional Responsibility Leon J. Lofthus, Director Finance Staff Executive Office for United States Judith B. Wish, Deputy Counsel on Theodius McBurrows, Director, Equal Trustees Professional Responsibility Employment Opportunity Staff Jeffrey M. Miller, Associate Director James E. Price, Director, Computer Edward F. Cincinnati, Executive Officer Office of Intelligence Policy and Review Services Staff Robert O. Davis, Deputy Counsel for National Drug Intelligence Center Tax Division Intelligence Policy Michael T. Horn, Director, National Stephen J. Csontos, Senior Legislative Drug Intelligence Center Office of Policy Development Counsel Valerie M. Willis, Kevin R. Jones, Deputy Assistant David A. Hubert, Chief, Civil Trial Attorney General Executive Secretary, Senior Executive Section, Eastern Region Resources Board. Robert S. Watkins, Chief, Civil Trial Office of Information and Privacy [FR Doc. 02–16218 Filed 6–26–02; 8:45 am] Section, Central Region Daniel J. Metcalfe, Director (Policy and Joseph E. Young, Executive Officer BILLING CODE 4410–AR–M Litigation) Bureau of Prisons Antitrust Division DEPARTMENT OF JUSTICE Norman Familant, Chief, Economic Robin L. Beusse, Chief, Budget Litigation Section Development Administration Division Antitrust Division Roger W. Fones, Chief, Transportation, Joyce K. Conley, Senior Assistant Notice Pursuant to the National Energy, and Agriculture Section Director, Administration Division Thomas D. King, Executive Officer Michael W. Garrett, Senior Deputy Cooperative Research and Production J. Robert Kramer, Chief, Litigation II Assistant Director, Program Review Act of 1993—Chemical, Biological and Section Division Radiological Technology Alliance John C. Hardwick, Deputy Assistant (‘‘CBRTA’’) Civil Division Director, Information, Policy, and Notice is hereby given that, on May JoAnn J. Bordeaux, Deputy Director, Public Affairs 29, 2002, pursuant to section 6(a) of the Torts Branch Maryellen Thoms, Assistant Director National Cooperative Research and Jeanne E. Davidson, Deputy Director, Health Services Division Production Act of 1993, 15 U.S.C. 4301 Commercial Litigation Branch John M. Vanyur, Senior Deputy et seq. (‘‘the Act’’), 3M Company (‘‘3M’’) Douglas N. Letter, Appellate Litigation Assistant Director, Correctional has filed written notifications Counsel, Appellate Staff Programs Division Eugene M. Thirolf, Director, Office of simultaneously with the Attorney Consumer Litigation Immigration and Naturalization Service General and the Federal Trade Commission disclosing (1) the identities Civil Rights Division J. Scott Blackman, Regional Director, of the parties and (2) the nature and James S. Angus, Deputy Assistant Eastern Region objectives of the venture. The Attorney General Michael D. Cronin, Assistant notifications were filed for the purpose David K. Flynn, Chief, Appellate Commissioner for Policy and of invoking the Act’s provisions limiting Section Inspection the recovery of antitrust plaintiffs to Albert N. Moskowitz, Chief, Criminal Janis A. Sposato, Assistant Deputy actual damages under specified Section Executive Associate Commissioner for circumstances. Pursuant to section 6(b) John L. Wodatch, Chief, Disability Immigration Services of the Act, the identities of the parties Rights Section William T. Veal, Chief Patrol Agent, San are 3M Company, St. Paul, MN; Becton Diego Sector Dickinson and Company, acting through Criminal Division William R. Yates, Deputy Executive its BD Biosciences Business Unit, Sandra J. Bright, Executive Officer Associate Commissioner for Franklin Lakes, NJ; BV Solutions Group, Joseph E. Gangloff, Senior Counsel, Immigration Services Inc., Overland Park, KS; Calspan-UB Office of International Affairs David A. Yentzer, Assistant Research Center, Buffalo, NY; Cargill Julie E. Samuels, Director, Office of Commissioner, Administration Incorporated, Wayzata, MN; General Policy and Legislation Dynamics Government Systems Patty M. Stemler, Chief Appellate United States Marshals Service Corporation, Thousand Oaks, CA; Section Gary E. Mead, Assistant Director for Honeywell International Inc., Mary I. Warlow, Director, Office of Business Services Minneapolis, MN; Johns Hopkins International Affairs University Applied Physics Laboratory, Mary Lee Warren, Deputy Assistant Office of Justice Programs Laurel, MD; Lucent Technologies Inc., Attorney General Carolyn A. Hightower, Deputy Director, McLeansville, NY; Mayo Clinic Environment and Natural Resources Office for Victims of Crime Rochester, Rochester, NY; Motorola, Division Gary N. Silver, Director, Office of Schaumburg, IL; RAE, Inc., Arlington, Robert L. Bruffy, Executive Officer Administration VA; Syracuse Research Corporation, Syracuse, NY; and Veridian Virginia, P. Butler, Chief, Land Executive Office of Immigration Review Acquisition Section Corporation, Arlington, VA. The Eileen Sobeck, Deputy Assistant Charles Adkins-Blanch, General fourteen parties formed a consortium Attorney General Counsel called the ‘‘Chemical, Biological, and Jean E. Williams, Chief, Wildlife and Margaret M. Philbin, Deputy Director Radiological Technology Alliance’’ Marine Resources Section (‘‘CBRTA’’). The purpose of the CBRTA Executive Office for United States is to develop technologies that will Justice Management Division Attorneys provide detection, identification, and Mary A. Braden, Director, Department Steven J. Parent, Deputy Director for warning systems for defense against Ethics Office Financial Management chemical, biological, and radiological
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attacks. The CBRTA is performing the Register pursuant to section 6(b) of the Register pursuant to section 6(b) of the technology development under Act on March 8, 2002 (67 FR 10760). Act on April 22, 2002 (67 FR 19588). Government R&D Contract No. Constance K. Robinson, Constance K. Robinson, NMA401–02–9–2002, awarded by the Director of Operations, Antitrust Division. Director of Operations, Antitrust Division. U.S. Department of Defense’s National [FR Doc. 02–16220 Filed 6–26–02; 8:45 am] [FR Doc. 02–16222 Filed 6–26–02; 8:45 am] Imagery and Mapping Agency (NIMA) BILLING CODE 4410–11–M to the CBRTA. BILLING CODE 4410–11–M Constance K. Robinson, DEPARTMENT OF JUSTICE Director of Operations, Antitrust Division. DEPARTMENT OF JUSTICE [FR Doc. 02–16221 Filed 6–26–02; 8:45 am] Antitrust Division Antitrust Division BILLING CODE 4410–11–M Notice Pursuant to the National Notice Pursuant to the National Cooperative Research and Production Cooperative Research and Production DEPARTMENT OF JUSTICE Act of 1993—PKI Forum, Inc. Act of 1993—Wireless Application Protocol Forum, Ltd. Antitrust Division Notice is hereby given that, on June 10, 2002, pursuant to section 6(a) of the Notice is hereby given that, on May 3, Notice Pursuant to the National National Cooperative Research and 2002, pursuant to section 6(a) of the Cooperative Research and Production Production Act of 1993, 15 U.S.C. 4301 National Cooperative Research and Act of 1993—J Consortium, Inc. et seq. (‘‘the Act’’), PKI Forum, Inc. has Production Act of 1993, 15 U.S.C. 4301 filed written notifications et seq. (‘‘the Act’’), Wireless Application Notice is hereby given that, on May simultaneously with the Attorney Protocol Forum, Ltd. (‘‘WAP’’) has filed written notifications simultaneously 30, 2002, pursuant to section 6(a) of the General and the Federal Trade with the Attorney General and the National Cooperative Research and Commission disclosing changes in its Federal Trade Commission disclosing Production Act of 1993, 15 U.S.C. 4301 membership status. The notifications were filed for the purpose of extending changes in its membership status. The et seq. (‘‘the Act’’), J. Consortium, Inc. notifications were filed for the purpose has filed written notifications the Act’s provisions limiting the recovery of antitrust plaintiffs to actual of extending the Act’s provisions simultaneously with the Attorney limiting the recovery of antitrust damages under specified circumstances. General and the Federal Trade plaintiffs to actual damages under Specifically, 724 Solutions, Toronto, Commission disclosing changes in its specified circumstances. Specifically, Ontario, Canada; Aladdin Knowledge membership status. The notifications Aplix Corporation, Tokyo, Japan; Systems Ltd., Tel Aviv, Israel; Andes were filed for the purposes of extending CoCoNet AG, Erkrath, Germany; Sky Networks, Inc., Mountain View, CA; the Act’s provisions limiting the Think Corporation Co., LTD., Osaka, Authentica, Inc., Waltham, MA; recovery of antitrust plaintiffs to actual Japan; and The Walt Disney Company CardBase Technologies Limited, Dun damages under specified circumstances. Limited, London, United Kingdom, have Laoghaire, Dublin, Ireland; Cisco been added as parties to this venture. Specifically. S. Jayaraman (individual Systems, San Jose, CA; Cylink Telphia, Inc., San Francisco, CA has member), Saratoga, CA; Andrei Corporation, Santa Clara, CA; Diversinet Netchitaliouk (individual member), acquired Mspect Inc., Sunnyvale, CA. Corporation, Toronto, Ontario, Canada; Telefonica Mobiles, Madrid, Spain has Sunnyvale, CA; Leung Nim Ho Rickey Enterasys Networks, Andover, MA; (individual member), Clearwater Bay, acquired Terra Mobile, Madrid, Spain. Fannie Mae, Washington, DC; Diversinet Corporation, Toronto, Hong Kong-China; Charathram GlobalSign SA/NV, Brussels, Belgium; Ranganathan (individual member), Ontario, Canada has changed its name Litronic Inc., Irvine, CA; Nortel to Diversinet Corp. Ericsson Mobile, Santa Clara, CA; and Yomie Chan Networks Corporation, Kanata, Ontario, Research Triangle Park, NC has changed (individual member), Clearwater Bay, Canada; Pricewaterhouse Coopers LLP, its name to Ericsson Radio Systems AB. Hong Kong-China have been added as McLean, VA; Secude GmbH, Darmstadt, Sony International, Stockholm, Sweden parties to this venture. Germany; and Sonera SmartTrust AB, has changed its name to Sony Ericsson No other changes have been made in Stockholm, Sweden have been dropped Mobile Communications. UBS AB, either the membership or planned as parties to this venture. Postfach, Switzerland has changed its activity of the group research project. No other changes have been made in name to UBS AG. Membership in this group research either the membership or planned The following companies had their project remains open, and J. activity of the group research project. memberships cancelled: 724 Solutions, Consortium, Inc. intends to file Membership in this group research Inc., Toronto, Ontario, Canada; project remains open, and PKI Forum, additional written notification Accenture, Chicago, IL; Air-Go Inc. intends to file additional written disclosing all changes in membership. Technologies Corp., San Francisco, CA; notification disclosing all changes in Algorithmic Research, Petach-Tikva, On August 6, 1999, J. Consortium, Inc. membership. Israel; Amdocs Ltd., Ra’anana, Israel; filed its original notification pursuant to On April 2, 2001, PKI Forum, Inc. Arthur Anderson LLP, Atlanta, GA; Bull section 6(a) of the Act. The Department filed its original notification pursuant to CP8, Louveciennes, France; CacheFlow, of Justice published a notice in the section 6(a) of the Act. The Department Inc., Tokyo, Japan; CellPoint Systems Federal Register pursuant to section of Justice published a notice in the AB, Sollentua, Sweden; Conduit 6(b) of the Act on March 21, 2000 (65 Federal Register pursuant to section Software, Dublin, Ireland; Critical Path, FR 15175). 6(b) of the Act on May 3, 2001 (66 FR San Francisco, CA; Dialogue The last notification was filed with 22260). Communications Limited, Sheffield, the Department on January 30, 2002. A The last notification was filed with South Yorkshire, United Kingdom; notice was published in the Federal the Department on March 13, 2002. A Digital Boardwalk, Inc., Santa Monica, notice was published in the Federal CA; earthport plc, London, United
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Kingdom; EC-Gate NV, Toronto, International, Waterloo, Belgium; DEPARTMENT OF JUSTICE Ontario, Canada; EdgeMatrix Pte Ltd., Everypath, San Jose, CA; Geoworks Singapore, Singapore; Emblaze Systems Corporation, Alameda, CA; Go2 Drug Enforcement Administration Ltd., Givataim, Israel; Enition Systems, Inc., Irvine, CA; ICL, Helsinki, Incorporated, Santa Clara, CA; Equifax, Finland; iDini Corporation, San Jose, Manufacturer of Controlled Atlanta, GA; Excite@Home, Redwood CA; Impronta Communications, S.L., Substances; Notice of Registration City, CA; Extensity, Inc., Emeryville, Madrid, Spain; Inventec Electronics CA; Fidelity Investments, Boston, MA; (Shanghai) Co., Ltd., Shanghai, People’s By Notice dated December 28, 2001, Finetix Limited, London, United Republic of China; J-Phone East Co., and published in the Federal Register Kingdom; iConverse, Waltham, MA; Ltd., Tokyo, Japan; Mobilocity, Inc., on March 18, 2002, (67 FR 12049), Inktomi Corporation, Foster City, CA; New York, NY; NetManage, Inc., Mallinckrodt, Inc., Mallinckrodt & LG Electronics Inc., Seoul, Republic of Cupertino, CA; Nocom AB, Uppsala, Second Streets, St. Louis, Missouri Korea; LG TeleCom, Ltd., Seoul, Sweden; OneName Corporation, Seattle, 63147, made application by letter to the Republic of Korea; Lightbridge, Inc., WA; OpenGrid, Inc., San Jose, CA; Drug Enforcement Administration Burlington, MA; Logical Design Opt(e)way, Paris France; ParaRede (DEA) to be registered as a bulk Solutions, Inc., Morristown, NJ; Technologies Ltd., Lisboa, Portugal; manufacturer of the basic classes of Macromedia, San Francisco, CA; Purple Technologies Ltd., London, controlled substances listed below: Micropole, Nanterre, France; MobiApps, United Kingdom; Real Names Corp., Inc., McLean, VA; MobileWay, Puteauz, Redwood City, CA; room33AB, Drug Schedule France; MTI, Ltd., Tokyo, Japan; Stockholm, Sweden; RTSe, Espoo, Netegrity Inc., Waltham, MA; Netfish Finland; Seagull, Dordrecht, The Codeine-N-oxide (9053) ...... I Technologies, Inc., Santa Clara, CA; Netherlands; Sila Communications Ltd., Difenoxin (9168) ...... I Netlife AG, Hamburg, Germany; London, United Kingdom; SkyTel Morphine-N-oxide (9307) ...... I Netonomy, Paris, France; NextCom K.K., Communications, Jackson, MS; Solid Normorphine (9313) ...... I Tokyo, Japan; Nextron, Inc., San Jose, Information Technology, Ltd., Helsinki, Norlevorphanol (9634) ...... I CA; Northstream AB, Solna, Sweden; Finland; Soprano Design Pty Ltd, North Benzoylecgonine (9180) ...... II Omnitel Pronto Italia, Milan, Italy; Sydney, New South Wales, Australia; OnMobile Systems, Inc., Fremont, CA; space2go.com GmbH & Co., Berlin, The firm plans to manufacture the Orsus Solution Ltd., Or yuhuda, Israel; Germany; Speedia, Llc., Brooklyn, NY; controlled substances as analytical PacketVideo Corporation, San Diego, Swisscom AG, Berne, Switzerland; reference standards to be utilized CA; Proteus, Inc., Washington, DC; Tegaron Telematics GmbH, Bonn, internally and for sale to other Ripcord Systems, Inc., London, United Germany; Telsim Mobil companies. Kingdom; @Road, Inc., Fremont, CA; Telekomunikayson, Istanbul, Turkey; No comments or objections were Sanoma-WSOY Oyj, Helsinki, Finland; The PhonePages of Sweden AB, Kista, received. DEA has considered the Sanyo Electric Co., Ltd., Osaky, Japan; Sweden; Ubizen, Leuven, Belgium; factors in Title 21, United States Code, SecureSoft Inc., Seoul, Republic of Vignetter Corporation, Austin, TX; Korea; Sinotone Datacom Ltd., Hong Section 823(a) and determined that the Webtiss Technologies, Paris, France; registration of Mallinckrodt, Inc. to Kong, Hong Kong-China; SkyGo.com, WIPRO Technologies-Global R & D manufacture listed controlled Redwood City, CA; Smart421, Welwyn Bangalore, India; WorldCom, Clinton, substances is consistent with the public Garden City, Herts, United Kingdom; MS; worldzap, Zug, Switzerland; interest at this time. DEA has Synapta, Palo Alto, CA; Synovial Inc., ZKEY.Com, Los Angeles, CA; and Zsigo investigated Mallainckrodt, Inc. on a Fremont, CA; TD Waterhouse Group, Wireless Technologies, East Lansing, Inc., New York, NY; Telemig Celular MI. regular basis to ensure that the Participacoes S.A., Brasilia, Brazil; company’s continued registration is No other changes have been made in Telephia, Inc., San Francisco, CA; consistent with the public interest. either the membership or planned Telocity, Inc., Cupertino, CA; Tibco These investigations have included activity of the group research project. Softwares Inc., Palo Alto, CA; Unisys inspection and testing of the company’s Membership in this group research Corporation, London, United Kingdom; physical security systems, verification project remains open, and WAP intends Vettro Corporation, New York, NY; of the company’s compliance with state to file additional written notifications Vitria Technology, Inc., Sunnyvale, CA; and local laws, and a review of the disclosing all changes in membership. Wiral Ltd., Espoo, Finland; Wmode, company’s background and history. Inc., Calgary, Alberta, Canada; Wysdom, On March 18, 1998, WAP filed its Therefore, pursuant to 21 U.S.C. 823 Richmond Hill, Ontario, Canada; and original notification pursuant to section and 28 CFR 0.100 and 0.104, the Deputy YacCom, Chantepie, France. 6(a) of the Act. The Department of Assistant Administrator, Office of The following companies have Justice published a notice in the Federal Diversion Control, hereby orders that resigned: ACE*COMM Corporation, Register pursuant to section 6(b) of the the application submitted by the above Gaithersburg, MD; Add2Phone Ltd., Act on December 31, 1998 (63 FR firm for registration as a bulk Helsinki, Finland; Appolis AG, Munich, 72333). manufacturer of the basic classes of the Germany; Arcot Systems, Inc., Santa The last notification was filed with controlled substances listed above is Clara, CA; Blue Martini Sofeware, San the Department on January 28, 2002. A granted. Mateo, CA; Brightpoint, Inc., notice was published in the Federal Dated: June 14, 2002. Indianapolis, IN; Business Objects SA, Register pursuant to section 6(b) of the Levalois Perret, France; Casio Soft Co., Act on April 4, 2002 (67 FR 16125). Laura M. Nagel, Ltd., Tokyo, Japan; Convergys, Deputy Assistant Administrator, Office of Cincinnati, OH; Dolphin Constance K. Robinson, Diversion Control, Drug Enforcement Telecommunications, Basingstake, Director of Operations, Antitrust Division. Administration. Hants, United Kingdom; EncrypTix, [FR Doc. 02–16219 Filed 6–26–02; 8:45 am] [FR Doc. 02–16287 Filed 6–26–02; 8:45 am] Inc., El Segundo, CA; Europay BILLING CODE 4410–11–M BILLING CODE 4410–09–M
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DEPARTMENT OF JUSTICE injury by ensuring that portable fire signature of the person who performed extinguishers are in operating condition. the test, and the serial number (or other Drug Enforcement Administration DATES: Submit written comments on or identifier) to the fire extinguisher that before August 26, 2002. was tested. The certification record Importation of Controlled Substances; must be made available to the Assistant Notice of Withdrawal of Application ADDRESSES: Submit written comments to the Docket Office, Docket No. ICR– Secretary or his/her representative upon As set forth in the Federal Register 1218–0218(2002), OSHA, U.S. request. The certification records (FR Doc. 01–8551) Vol. 66, No. 67 at Department of Labor, Room N–2625, provide assurance to employers, page 18309, dated March 29, 2001, 200 Constitution Avenue, NW., employees, and OSHA compliance Chirex Technology Center, Inc., DBA Washington, DC 20210; telephone (202) officers that the fire extinguishers have Chirex Cauldron, which has changed its 693–2350. Commenters may transmit been hydrostatically tested in name to Rhodia Chirex America, 383 written comments of 10 pages or less by accordance with and at the intervals Phoenixville Pike, Malvern, facsimile to (202) 693–1648. specified in the Standard, thereby Pennsylvania 19355, made application FOR FURTHER INFORMATION CONTACT: ensuring that they will operate properly by renewal to the Drug Enforcement Theda Kenney, Directorate of Safety in the event employees need to use Administration (DEA) to be registered as Standards Programs, OSHA, U.S. them. These records also provide the an importer of phenylacetone (8501), a Department of Labor, Room N–3609, most efficient means for the compliance basic class of controlled substance listed 200 Constitution Avenue, NW., officers to determine that an employer is in Schedule II. Washington, DC 20210; telephone (202) complying with the Standard. By letter dated May 30, 2002, Rhodia 693–2222. A copy of the Agency’s II. Special Issues for Comment Chirex America requested that their Information-Collection Request (ICR) OSHA has a particular interest in application to import phenylacetone be supporting the need for the information comments on the following issues: withdrawn. Therefore, Rhodia Chirex collection specified by the Portable Fire • Whether the proposed information- America’s application to import Extinguishers Standard is available for collection requirements are necessary phenylacetone is hereby withdrawn. inspection and copying in the Docket for the proper performance of the Dated: June 14, 2002. Office, or by requesting a copy from Agency’s functions, including whether Laura M. Nagel, Theda Kenney at (202) 693–2222, or the information is useful; Deputy Assistant Administrator, Office of Todd Owen at (202) 693–2444. For • The accuracy of OSHA’s estimate of Diversion Control, Drug Enforcement electronic copies of the ICR, contact the burden (time and costs) of the Administration. OSHA on the Internet at http:// information-collection requirements, [FR Doc. 02–16286 Filed 6–26–02; 8:45 am] www.osha.gov and select ‘‘Information including the validity of the Collection Requests.’’ BILLING CODE 4410–09–M methodology and assumptions used; SUPPLEMENTARY INFORMATION: • The quality, utility, and clarity of I. Background the information collected; and • Ways to minimize the burden on DEPARTMENT OF LABOR The Department of Labor, as part of its employers who must comply; for continuing effort to reduce paperwork example, by using automated or other Occupational Safety and Health and respondent (i.e., employer) burden, Administration technological information-collection conducts a preclearance consultation and -transmission techniques. program to provide the public with an [Docket No. ICR–1218–0218(2002) opportunity to comment on proposed III. Proposed Action Hydrostatic Testing Provision of the and continuing information-collection OSHA proposes to extend the Office Portable Fire Extinguishers Standard; requirements in accordance with the of Management and Budget’s (OMB) Extension of the Office of Management Paperwork Reduction Act of 1995 approval of the collection-of- and Budget’s Approval of Information- (PRA–95) (44 U.S.C. 3506(c)(2)(A)). This information requirements specified by Collection (Paperwork) Requirements program ensures that information is in the hydrostatic testing provision of the the desired format, reporting burden Portable Fire Extinguishers Standard. AGENCY: Occupational Safety and Health (time and cost) is minimal, collection The Agency will summarize the Administration (OSHA), Labor. instruments are understandable, and comments submitted in response to this ACTION: Request for comment. OSHA’s estimate of the information- notice, and will include this summary collection burden is correct. in its request to OMB to extend the SUMMARY: OSHA requests comment The following section describes who approval of these information-collection concerning its proposed extension of the uses the information on the hydrostatic requirements. information-collection requirement testing of portable fire extinguishers that Type of Review: Extension of a specified by the hydrostatic testing is collected under the records currently approved information- provision of the Portable Fire requirement (29 CFR 1910.157(f)(16)), as collection requirement. Extinguishers Standard (29 CFR well as how they use it. The purpose of Title: Hydrostatic Testing Provision of 1910.157). The paperwork provision of the requirement is to reduce employees’ the Portable Fire Extinguishers the hydrostatic testing provision risk of death or serious injury by (Certification Record) (29 CFR specifies requirements for developing ensuring that portable fire extinguishers 1910.157). and maintaining certification records to are in safe operating condition. OMB Number: 1218–0218. demonstrate that portable fire Test records (paragraph (f)(16)). Affected Public: Business or other for- extinguishers have been tested in Paragraph (f)(16) of the Standard profit; not-for-profit institutions; Federal accordance with and at intervals requires employers to develop and government; State, local, or tribal specified by the Standard (29 CFR maintain a certification record of governments. 1910.157(f)(16)). The purpose of the hydrostatic testing of portable fire Number of Respondents: 8,780,500. records requirement is to reduce extinguishers. The certification record Frequency of Recordkeeping: Varies employees’ risk of death or serious must include the date of inspection, the from 5 to 12 years.
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Average Time per Response: Varies FOR FURTHER INFORMATION CONTACT: • Paragraph (e)(1)(ii) requires from 2 (.03 hour) to 35 minutes (.58 Theda Kenney, Directorate of Safety employers to inspect and test each press hour). Standards Programs, OSHA, U.S. no less than weekly to determine the Total Annual Hours Requested: Department of Labor, Room N–3609– condition of the clutch/brake 131,708. 200 Constitution Avenue, NW., mechanism, antirepeat feature, and Total Annual Costs (O&M): Washington, DC 20210; telephone (202) single-stroke mechanism. Employers $11,941,480. 693–2222. A copy of the Agency’s must perform and complete necessary Information-Collection Request (ICR) maintenance or repair or both before the IV. Authority and Signature supporting the need for the information press is operated. In addition, John L. Henshaw, Assistant Secretary collections specified in the Standard on employers must maintain a record of of Labor for Occupational Safety and Mechanical Power Presses is available inspections, tests, and maintenance Health, directed the preparation of this for inspection and copying in the work. The record must include the date notice. The authority for this notice is Docket Office, or by requesting a copy of the date of the inspection, test, or the Paperwork Reduction Act of 1995 from Theda Kenney at (202) 693–2222 maintenance; the signature of the person (44 U.S.C. 3506), and Secretary of or Todd Owen at (202) 693–2444. For who performed the inspection; and the Labor’s Order No. 3–2000 (65 FR electronic copies of the ICR, contact serial number, or other identifier, of the 50017). OSHA on the Internet at http:// press that was inspected, tested, or Signed at Washington, DC on June 21, www.osha.gov and select ‘‘Information maintained. 2002. Collection Requests.’’ The certification records required in John L. Henshaw, SUPPLEMENTARY INFORMATION: 29 CFR 1910.217(e)(1)(i) and (e)(1)(ii) Assistant Secretary of Labor. are necessary to ensure compliance with 1. Background [FR Doc. 02–16262 Filed 6–26–02; 8:45 am] the requirement to inspect mechanical BILLING CODE 4510–26–M The Department of Labor, as part of its power presses. The inspection of continuing effort to reduce paperwork mechanical power presses is critical to and respondent (i.e., employer) burden, ensuring that employers maintain the DEPARTMENT OF LABOR conducts a preclearance consultation presses in safe operating condition for program to provide the public with an employees. These records also provide Occupational Safety and Health opportunity to comment on proposed the most efficient means for the Administration and continuing information-collection compliance officers to determine that an employer is complying with the [Docket No. ICR–1218–0229(2002)] requirements in accordance with the Paperwork Reduction Act of 1995 Standard. Standard on Mechanical Power (PRA–95) (44 U.S.C. 3506(c)(2)(A)). This II. Special Issues for Comment Presses; Extension of the Office of program ensures that information is in Management and Budget’s Approval of the desired format, reporting burden OSHA has a particular interest in Information-Collection (Paperwork) (time and costs) is minimal, collection comments on the following issues: • Requirements instruments are clearly understandable, Whether the proposed information- and OSHA’s estimate of the collection are necessary for the proper AGENCY: Occupational Safety and Health information-collection burden is correct. performance of the Agency’s functions, Administration (OSHA), Labor. The Mechanical Power Presses including whether the information is ACTION: Request for comment. Standard specifies two paperwork useful; requirements. The following paragraphs • The accuracy of OSHA’s estimate of SUMMARY: OSHA request comment describe who uses the information the burden (time and costs) of the concerning its proposed extension of the collected under each requirement, as information-collection requirements, information-collection requirements well as how they use it. The purpose of including the validity of the contained in the Standard on these requirements is to reduce methodology and assumptions used; Mechanical Power Presses (29 CFR employees’ risk of death or serious • The quality, utility, and clarity of 1910.217). The paperwork provisions of injury by ensuring that employers the information collected; and the Standard specify requirements for maintain the mechanical power presses • Ways to minimize the burden on developing and maintaining records to used by the employees in safe operating employers who must comply; for certify that employers are inspecting condition. (Based on previous ICR example, by using automated or other presses as required by the Standard. The approvals by OMB, OSHA determined technological information-collection purpose of these requirements is to that the training requirement in and -transmission techniques. reduce employees’ risk of death or paragraph (f)(2) of the Standard is not a III. Proposed Actions serious injury by ensuring that collection of information under the employers maintain the mechanical Paperwork Reduction Act of 1995.) OSHA proposes to extend the Office power presses used by the employees in • Paragraph (e)(1)(i) requires of Management and Budget’s (OMB) safe operating condition. employers to establish and follow a approval of the collection-of- DATES: Submit written comments on or program of periodic and regular information requirements specified in before August 26, 2002. inspections of power presses to ensure the Standard on Mechanical Power ADDRESSES: Submit written comments that all their parts, auxiliary equipment, Presses (29 CFR 1910.217). OSHA will to the Docket Office, Docket No. ICR– and safeguards are in safe operating summarize the comments submitted in 1218–0229(2002), OSHA, U.S. condition and adjustment. Employers response to this notice, and will include Department of Labor, Room N–2625, must maintain a certification record of this summary in its request to OMB to 200 Constitution Avenue, NW., inspections that includes the date of extend the approval of these Washington, DC 20210; telephone (202) inspection, the signature of the person information-collection requirements. 693–2350. Commenters may transmit who performed the inspection, and the Type of Review: Extension of a written comments of 10 pages or less by serial number, or other identifier, of the currently approved information- facsimile to (202) 693–1648. power press that was inspected. collection requirement.
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Title: Mechanical Power Presses (29 basis of the application package VETS notified the appellant that it was CFR 1910.217). submitted, rated on the quality and closing his case, ‘‘indicating no merit.’’ OMB Number: 1218–0229. extent of their total accomplishments, Id. Affected Public: Business or other for- experience, and/or education, and On January 25, 2000, the appellant profit; not-for-profit institutions; Federal ranked on the basis of the degree to filed an appeal under the Veterans government; State, local, or tribal which each candidate’s background Employment Opportunities Act (VEOA), governments. matched the skills and ability 5 U.S.C. 3330a, in which he claimed Number of Respondents: 191,750 requirements identified for the position. that the agency violated his veterans’ (assuming one mechanical power press Id. The vacancy announcement further preference rights. IAF, Tab 1. per employer). provided that individuals could apply Specifically, the appellant claimed that Frequency of Recordkeeping: On for these positions if they met the the agency misapplied the Outstanding occasion. criteria for one of the following Scholar program when it selected the Average Time per Response: Varies recruitment categories: (1) Outstanding four candidates that appeared on the from 5 minutes (.08 hour) to 20 minutes Scholars; (2) Veterans Readjustment Act Outstanding Scholar program (.33 hour). (VRA) eligibles; (3) 30% or more memorandum because the agency’s use Total Annual Hours Requested: disabled veterans; (4) Preference of this program ‘‘as a primary tool and 1,372,930. eligibles and veterans separated after 3 not as a supplement did not allow the or more years of continuous active IV. Authority and Signature full entitlement of veterans preference service; (5) Chapter 31 veterans; (6) when the selections were made.’’ Id. John L. Henshaw, Assistant Secretary Handicapped eligibles; and (7) VA The administrative judge issued an of Labor for Occupational Safety and CTAP or Interagency CTAP eligibles. Id. acknowledgement order requiring the Health, directed the preparation of this The appellant submitted an appellant to submit evidence and notice. The authority for this notice is application for the vacancies in the argument to show that the agency the Paperwork Reduction Act of 1995 Muskogee office and attached a letter violated his rights under a specific (44 U.S.C. 3506) and Secretary of from the agency certifying his status as statute or regulation relating to veterans’ Labor’s Order No. 3–2000 (65 FR a 30% or more disabled veteran. Id., preference. IAF, Tab 2. In his response 50017). Subtab 4b. After the vacancy to this order, the appellant alleged that announcement closed, the agency’s Signed at Washington, DC, on June 21st, the agency violated 5 U.S.C. 2302(b)(1), Human Resources Center provided the 2002. (b)(11)(A) and (B), and (b)(12), as well selecting official with several John L. Henshaw, as 38 U.S.C. 4214(a)(1). IAF, Tab 3. In memoranda, each of which related to a its response to the appeal, the agency Assistant Secretary of Labor. specific recruitment category listed in argued that veterans’ preference does [FR Doc. 02–16263 Filed 6–26–02; 8:45 am] the vacancy announcement, listing the not apply to appointment made under BILLING CODE 4510–26–M candidates who were eligible for the Outstanding Scholar program and consideration under the corresponding that the Board lacks jurisdiction over recruitment category. Id. Subtab 4c. The any allegation that the agency abused or MERIT SYSTEMS PROTECTION memoranda listed the candidates in misused the program. IAF, Tab 4. BOARD alphabetical order by last name, and On March 22, 2000, the [MSPB Docket No. DA–3443–00–0217–I–1] there is no indication that the candidates were rated or ranked. The administrative judge issued an initial decision dismissing the appeal for lack Opportunity to File Amicus Briefs in agency included the appellant’s name of jurisdiction, finding that the Kevdin D. Abrahamsen v. Department on a memorandum of VRA eligibles. On appellant failed to meet his burden of of Veterans Affairs June 1, 1999, the selecting official noted his selections on the memoranda and proof on the issue of jurisdiction. Initial AGENCY: Merit Systems Protection returned them to the Human Resources Decision (ID) at 4–5; see 5 CFR Board. Center. Each of the selected candidates 1201.56(a)(2)(1). The administrative ACTION: The Merit Systems Protection had been included on the memorandum judge found that the Outstanding Board is providing interested parties corresponding to the Outstanding Scholar program hiring authority with an opportunity to submit amicus Scholar program, although one of the permitted the agency to hire individuals briefs in the above referenced appeal. selectees also had been included on the without regard to veterans’ preference The issues to be addressed in such memorandum of VRA eligibles. By letter and stated that the appellant failed to briefs are set forth in the Board’s June dated June 4, 1999, the agency notified identify a specific statute or regulation 18, 2002, Order, which is reprinted in the appellant that he had not been relating to his veterans’ preference its entirety in the Summary below. selected. IAF, Tab 4, Subtab 4d. rights which the agency violate when it On November 12, 1999, the appellant used the Outstanding Scholar hiring SUMMARY: wrote the agency requesting further authority as a basis for its selections. ID information regarding his nonselection.1 at 4–5. The appellant has filed a timely Order In its response, the agency asserted that petition for review in which he states The agency issued a vacancy applications were accepted from special that the Outstanding Scholar program is announcement in which it solicited categories of applicants, as authorized outside the Board’s jurisdiction but applications to fill several positions as by the Office of Personnel Management argues that the administrative judge a Veterans Service Representative, GS– (OPM), and that veterans’ preference erred in concluding that the agency did 0996–07 with promotion potential to the was applied within each of these special not violate his veterans’ preference GS–10 grade, in various agency offices, groups as required by law. IAF, Tab 1. rights under 38 U.S.C. 4214(a)(1). including four positions to be filled in The appellant filed a complaint with the Petition for Review File (PFRF), Tab 1. the agency’s Muskogee, Oklahoma Department of Labor’s Veterans’ The agency has filed a response in office, IAF, Tab 4, Subtab 4a. The Employment and Training Service which it argues that 38 U.S.C. 4214(a)(1) vacancy announcement stated that (VETS) concerning his non-selection,2 is not a statute relating to veterans’ applicants would be evaluated on the and, by letter dated January 7, 2000, preference. PFRF, Tab 3.
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The Board has previously discussed these three candidates without instrument, the specialized qualification the issue presented by this case in obtaining OPM’s approval to pass over questions can be modified, but the rating Augustine v. Department of Veterans the appellant. As the Board pointed out questions cannot be changed. Agencies that wish to consider developing an alternative Affairs, 88 M.S.P.R. 407 (2001). In in Augustine, however, OPM’s official examining instrument must obtain approval Augustine, the Board found that the guidance concerning the Outstanding from the Department of Justice and the Veterans Service Representative Scholar program states: plaintiffs prior to implementation. Agencies position is a competitive service Under the terms of the Luevano [v. should also be aware that there are data position, and it discussed the means by Campbell, 93 F.R.D. 68 (D.D.C. 1981)] collection and reporting requirements that go which veterans’ preference is applied in consent decree the Outstanding Scholar along with examining for Luevano positions. the competitive examining process. program was established as a supplement to The Outstanding Scholar provision of the Augustine, 88 M.S.P.R. 407, ¶¶ 8, 10–11. the competitive examining process where Luevano decree is still available as a under-representation of Blacks and Hispanics supplement to a formal competitive In order to qualify for an appointment examination. to a competitive service position, an exists. This authority was not intended to replace competitive examining, nor to Id., § 1.2(B) (emphasis in the original). applicant must pass an examination or become the primary method of hiring. This be specifically excepted from It appears that the positions at issue authority allows agencies to appoint in this case meet most of the Luevano examination under section 3302 of title Outstanding Scholars [meeting specified criteria identified in the OPM 5, United States Code. 5 U.S.C. 3304(b). college grade-point or class standing criteria] In this case, there is no indication that as an exception to normal competitive handbook. The 0996 classification series is identified in Appendix B of the any of the candidates the agency procedures, that is, the rule of three [5 U.S.C. handbook, and the vacancy referred to the selecting official passed 3318(a)] and veterans’ preference [5 U.S.C. 3318(b)] do not apply. announcement indicated that the an examination for the Veterans Service positions were being filled at the grade Representative position.3 However, Office of Personnel Management, of GS–7 with promotion potential to the when the competitive examining Delegated Examining Operations GS–10 grade. However, the job title process is used to fill vacancies for Handbook, § 2.8(A). Therefore, by identified in Appendix B of the OPM competitive service positions other than considering the selected candidates handbook for the 0996 classification scientific and professional positions in under the non-competitive Outstanding series is ‘‘Veterans Claims Examining,’’ the grades of GS–09 or higher, disabled Scholar program, the agency deprived while the job title of the advertised veterans who have a compensable the appellant of a significant advantage he would have had over these positions in this case was ‘‘Veterans service-connected disability of 10 Service Representative.’’ In addition, it percent or more, such as the appellant, candidates if the agency had used competitive examining procedures. is unclear whether the position of are entered onto registers and referred ‘‘Veterans Service Representative’’ is on certificates of eligibles in order of While an agency generally has the discretion to fill a vacancy through any classified in 2-grade intervals. their ratings ahead of all remaining Therefore, to the extent that the agency applicants. 5 U.S.C. 3313(2), 3317(a). authorized method, see Sherwood v. Department of Veterans Affairs, 88 relied on authority delegated from OPM Furthermore, the appointing authority is to appoint Outstanding Scholar program required to select for appointment to M.S.P.R. 208, ¶ 10 (2001), the record does not establish that the agency was candidates to positions covered by the each vacancy from the highest three Luevano consent decree, the record, as eligibles available for appointment on authorized to use the Outstanding Scholar program in this case. The it currently stands, does not establish the certificate of eligibles provided by that the positions at issue were covered the examining authority. 5 U.S.C. Delegated Examining Operations Handbook lists the criteria that by that decree. 3318(a). If the appointing authority Furthermore, even if the positions positions must meet before they are proposes to pass over a preference were covered by the Luevano consent covered under the Luevano consent eligible on a certificate in order to select decree, the record does not show that an individual who is not preference decree: the agency’s use of the Outstanding eligible, the appointing authority must There are two additional limitations on the Scholar program in this case was file written reasons for the pass over types of occupations for which agencies can consistent with OPM’s requirement that with OPM and obtain OPM’s approval. examine: the program be invoked ‘‘as a 5 U.S.C. 3318(b)(1). In the case of a 1. Positions Covered Under the Luevano supplement to the competitive preference eligible veteran with a Consent Decree (formerly called Administrative Careers With America— examining process where the under- service-connected disability of 30% or ACWA) Defined. The series and job titles representation of Blacks and Hispanics ore, such as the appellant, the veteran covered under the Luevano Consent Decree exists.’’ Delegated Examining is entitled to notice of the proposed pass are listed in Appendix B. In addition to the Operations Handbook, § 2.8(A); see over and an opportunity to respond to series being one of those listed in the Augustine, 88 M.S.P.R. 407, ¶ 18. As OPM. 5 U.S.C. 3318(b)(2). Appendix, a covered position must also meet mentioned previously, the record does It appears that only one of the ALL of the following criteria: not indicate that the agency conducted candidates the agency selected was a (a) it is being filled at either GS–5 or GS– a competitive examination before 7; veteran, and there is no indication that (b) it is classified at 2-grade intervals; and selecting the four individuals to fill the any of the selected candidates were (c) it must have promotion potential to GS– vacancies at issue in this case. If it had, preference eligible.4 Thus, had the 9, or higher. preference eligible candidates who agency used competitive examining Agencies are reminded that the Luevano should have taken and passed the procedures to fill the positions at issue consent decree required the establishment competitive examination presumably in this case, the appellant, as a and application of an approved rating would have been afforded their preference eligible veteran with a procedure for entry into these covered veterans’ preference rights, at least with service-connected disability of 10 positions. OPM continues to administer an respect to the positions filled through approved examining instrument on a case-by- percent or more, would have been case basis; alternatively, OPM will the competitive examining process. ranked ahead of at least three of the administer the written test developed for the Furthermore, the record contains no candidates the agency selected, and the Luevano positions for an agency, upon evidence to support the proposition that agency could not have selected any of request. When using the approved rating the agency invoked the Outstanding
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Scholar appointing authority in this that the agency’s use of the Outstanding 4 As mentioned previously, one of the case to ameliorate ‘‘under- Scholar hiring authority violated the candidates selected appeared on the representation of Blacks and appellant’s veterans’ preference rights Outstanding Scholar program memorandum Hispanics.’’ See Augustine, 88 M.S.P.R. by allowing the agency to appoint non- and the VRA memorandum. Persons 407, ¶ 18. preference eligible candidates without qualified for a VRA appointment include With respect to the three selectees affording the appellant the opportunity veterans of the Vietnam era and veterans who who were not included on the VRA to compete against these candidates and first became a member of the Armed Forces memoranda, the agency has not exercise the veterans’ preference rights or first entered on active duty as a member identified any authority, other than the he would have been afforded in a of the Armed Forces after May 7, 1975, and Outstanding Scholar program, that competitive examining process. were discharged or released from active duty would have allowed these candidates to Within 30 days of the date of this under conditions other than dishonorable. 38 be appointed to the positions for which order, the agency shall submit evidence U.S.C. 4214(b)(2). However, veterans who are eligible for VRA appointments are not they were selected without passing an and argument which (1) identifies the necessarily preference eligible. Still, it is examination. Therefore, if the agency rules governing the use of the possible that this candidate was preference was not authorized to use the Outstanding Scholar appointing Outstanding Scholar hiring authority in eligible. See 5 U.S.C. 2108(3)(A), (B), (C) method, both in general, and when, as (defining the veterans who are preference this case, it could not have properly in this case, a qualified individual with hired these candidates without eligible). veterans’ preference applies for a 5 The names of 36 applicants appear on the conducting an examination. 5 U.S.C. competitive service position; and (2) 6 memoranda the agency Human Resources 3304(b) (‘‘An individual may be establishes that the agency’s use of the Center provided the selecting official. IAF, appointed in the competitive service Outstanding Scholar hiring authority in Tab 4, Subtab 4c. The first merit system only if he has passed an examination or this case complied with the rules principle states that ‘‘[r]ecruitment should be is specifically excepted from identified in (1). The appellant may from qualified individuals * * * after fair examination under section 3302 of this respond to the agency’s submission and open competition which assures that all title.’’). In addition, because at least 36 within 30 days of the date of the service receive equal opportunity,’’ 5 U.S.C. applicants applied for the four of the agency’s argument and evidence. 2301(b)(1), but the statute provides that the vacancies, it appears that any The Clerk is directed to cause this President may prescribe rules which shall examination the agency may have order to be printed in the Federal provide for noncompetitive examinations administered should have been an open, Register, and to advice any interested when competent applicants do not compete competitive examination in which the party that it may submit an amicus brief after notice has been given of the existence appellant and other preference eligible on the issues identified above, within 30 of the vacancy. 5 U.S.C. 3304(a)(2). candidates would have had the days of the date of publication. The DATES: All briefs in response to this opportunity to compete with the notice shall instruct amici to file two selected candidates. 5 U.S.C. 3304(a)(1). notice shall be filed with the Clerk of copies of their briefs with the Clerk of the Board on or before July 29, 2002. Following such an examination, the the Board, and shall include instruction agency would have been required to for service of briefs on the agency. The ADDRESSES: All briefs shall include the augment the ratings of any preference Clerk will serve copies of amicus briefs case name and docket number noted eligible candidates who passed the on the appellant. above (Kevin D. Abrahamsen v. examination by the appropriate number The agency and the appellant may Department of Veterans Affairs, MSPB of veterans’ preference points. 5 U.S.C. respond to any amicus briefs filed Docket No. DA–3443–00–0217–I–1) and 3309. In addition, if the appellant had within 20 days from the latest date an be entitled ‘‘ Amicus Brief,’’ and shall taken and passed the examination, his amicus brief is served, but in any case be submitted in duplicate. Briefs shall name would have been entered ahead of no later than 60 days from the date of be filed with the Office of the Clerk, the names of any of the candidates who publication of the notice in the Federal Merit Systems Protection Board, 1615 M were not disabled veterans with a Register. St., NW., Washington, DC 20419. compensable service-connected Because of possible mail delays caused disability of 10 percent or more, and the 1 Although the record does not include a copy of the appellant’s letter to the agency, by the closure of the Brentwood Mail agency would have had to obtain OPM’s facility, respondents are encouraged to approval to pass over the appellant to the agency’s response identified the date of the letter and briefly summarized its contents file with the Clerk by facsimile select any of the candidates it actually as a request for ‘‘information regarding your transmittal to (202) 653–7130. A copy of selected who did not qualify for a non- nonselection as a 30 percent or greater any amicus brief that is submitted must competitive appointment under some disabled veteran for the position of Veterans also be served on Stephanie R. Darr, other statutory or regulatory authority. 5 Service Representative in our Veterans Esq., Office of Regional Counsel, U.S.C. 3313(2), 3318(a), (b). Service Center, at the Muskogee VA Regional Department of Veterans Affairs, 125 Accordingly, the agency’s use of the Office.’’ IAF, Tab 1. South Main Street, Muskogee, OK 2 Outstanding Scholar hiring authority Because the record does not include a 74401. essentially precluded the appellant from copy of the complaint the appellant filed exercising any veterans’ preference with VETS, it is not clear when the appellant FOR FURTHER INFORMATION CONTACT: rights he may have had in relation to the filed his complaint with the Department of Shannon McCarthy, Deputy Clerk of the Labor. Outstanding Scholar candidates. 3 Board, or Matthew Shannon, Legal Because the record as it currently OPM requires written and/or performance tests for positions at the grades of GS–05 and Counsel to the Clerk, at (202) 653–7200. stands, does not establish that the GS–07 in the 0996 occupational series. Office Dated: June 21, 2002. agency was properly authorized to use of Personnel Management Operating Manual, Bentley M. Roberts, Jr., the Outstanding Scholar program when Qualification Standards for General Clerk of the Board. it filled the vacancies at issue in this Schedule Positions, § 5,
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NATIONAL ARCHIVES AND RECORDS Relationship of This Draft GRS to GRS Overall, agencies found that the ADMINISTRATION 20, Electronic Records schedule draft they reviewed in 2000 This schedule does not duplicate or generally fits their records and could be RIN 3095–ZA04 replace GRS 20, Electronic Records. The implemented without undue difficulty. proposed new schedule addresses the In response to specific comments about General Records Schedule 24, administrative records generated by terminology, apparent redundancies, Information Technology Operations units responsible for technical and retention periods for some items, and Management Records; Request for management of IT resources. The NARA consolidated some items and provided other clarifications to address Comments functions covered by the proposed GRS the concerns. NARA believes the 24 are comparable to the administrative AGENCY: National Archives and Records schedule is now at the appropriate level functions relating to budgeting, Administration. of detail. Given the agencies’ interest in contracting, human resources, and having more flexibility in applying ACTION: Notice of proposed records property management that are covered disposition standards for temporary schedule; request for comments. by other GRS. The proposed GRS 24 records, NARA eliminated the cutoff does not apply to system data or SUMMARY: instructions and reworded some of the As required by statute (44 information content, which must be disposition instructions to allow U.S.C. 3303a(d)), the National Archives scheduled separately by submitting an agencies disposition options based on and Records Administration (NARA) SF 115, Request for Records Disposition issues General Records Schedules (GRS) their internal procedures and Authority, to NARA. operations. NARA clarified that the to provide disposal authority for GRS 20 remains in effect to cover the temporary administrative records schedule covers only the temporary records described in that schedule. GRS administrative records described in the common to several or all agencies of the 20 records include certain files Federal Government. The GRS include various items. It does not cover all associated with temporary data base records maintained by Information records relating to civilian personnel, management systems such as print files, fiscal accounting, procurement, Technology (IT) management extract files, source records, and certain organizations. Agency responsibilities to communications, printing, and other disposable electronic records produced common functions. NARA has schedule records documenting unique by end users in office automation agency programs should now be more developed a new General Records applications. NARA will conduct a Schedule, Information Technology apparent. separate review concerning the On the advice of the Office of Operations and Management Records, to continuation of GRS 20 disposition provide disposal authority for certain Management and Budget, in October authorities as part of its comprehensive 2001 NARA requested one last Federal administrative records generated in or review of the policies and procedures acquired by agency components agency review of this notice containing for scheduling and appraisal of records the proposed schedule and explanatory responsible for developing and in all formats. operating network infrastructure and information for each item. This systems. Background—Development of This information includes the records appraisal analysis normally provided in NARA invites public comments on Draft GRS a separate appraisal memorandum. this proposed new general records In late 1997, the Archivist established Based on comments received in schedule, as required by 44 U.S.C. an interagency Electronic Records Work October, NARA made some changes for 3303a(a). Because of the widespread Group to review General Records clarification and elimination of interest in the management of electronic Schedule 20 and recommend revisions redundancies. Federal agencies should records, NARA is publishing the full to that schedule or other practical note that the disposition instructions for text of the schedule with additional solutions for the scheduling of items 1a and b, 2, 9b, 12b, and 13b, and information on each item. electronic records. In 1998, the work the description for items 1b, 3b, 4a and DATES: Comments must be received in group submitted its final report to the b, 6a and b, 9a and b, 12a, and 13 were writing on or before August 26, 2002. Archivist (http://www.nara.gov/records/ modified in response to the comments ADDRESSES: Comments should be sent to grs20/reprt914.html) recommending, on the October 2001 draft. In addition, Modern Records Programs (NWM), among other things, that NARA issue a former item 8b was incorporated into National Archives at College Park, 8601 new general records schedule for former item 9, and former items 8a and Adelphi Road, College Park, MD 20740– information technology operations and 11 were deleted. The remaining 6001, faxed to 301–837–3697 or 301– management records to supplement, not schedule items were renumbered 837–3698, or sent to the following replace, GRS 20. accordingly. Internet address: [email protected]. Building on the efforts of the Work Throughout the process of developing Group, NARA drafted a new GRS for and refining this new GRS, NARA FOR FURTHER INFORMATION CONTACT: common administrative records relating representatives consulted with agency Michael L. Miller, Director, Modern to operation and management of records officers and IT officials to Records Programs, 301–837–1980. information technology and related resolve questions and clarify coverage of SUPPLEMENTARY INFORMATION: In 1978, services. Federal agencies reviewed the items. NARA analysts also reviewed use of the GRS was made legally draft in the summer of 1999. The draft, records both within NARA and in a mandatory. A Federal agency must revised in response to agency number of other agencies to ascertain destroy records in accordance with the comments, was discussed at a January the content of files. The information GRS to the greatest extent possible. If an 2000 focus group meeting with agency gathered during these consultations and agency wishes to apply a different records management and information examination of records is reflected in retention period for any series of records technology management officials. NARA the appraisal analysis following each included in the GRS, the records officer made appropriate changes in response item. must submit a Standard Form (SF) 115 to comments made at the meeting and Given the multiple reviews by Federal providing justification for the desired in June 2000 again requested comments agencies, NARA believes that this deviation. from Federal agencies. schedule will be useful and relevant to
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agencies. NARA now invites public alternatives to GRS 20 and will develop performance surveys, and benefit-cost comment on this proposed new General revised requirements as it explores new analyses. Agencies may also maintain Records Schedule for Information approaches to managing electronic other compliance reviews including Technology Operations and records. related analyses such as histograms Management Records. Following is the illustrating trends across time for 1. Oversight and Compliance Files complete text of the proposed GRS. The various groups, activities, and systems, explanatory information and appraisal Records in offices with agency-wide and follow-up correspondence and analysis is provided in brackets at the or bureau-wide responsibility for corrective action reports. end of each item. managing IT operations relating to The proposed dispositions for these compliance with IT policies, directives, will ensure the availability of records General Records Schedule 24— and plans including recurring and for a period of time that is sufficient to Information Technology Operations special reports, responses to findings allow adequate systems management and Management Records and recommendations, and reports of and will also ensure the preservation of Introduction follow-up activities. records identifying problems until the a. Performance measurements and problems have been resolved.] This schedule provides disposal benchmarks. authorization for certain files created Destroy/delete when 5 years old or 1 2. IT Facility, Site Management, and and maintained in the operation and year after responsible office determines Equipment Support Services Records. management of information technology that there are no unresolved issues, Records maintained by offices (IT) and related services. As defined in whichever is longer. responsible for the control and the Information Technology b. All other oversight and compliance operation of buildings and rooms where Management Reform Act of 1996 (now records including: IT equipment, systems, and storage the Clinger-Cohen Act), ‘‘information • Certification and accreditation of media are located including: technology’’ includes computers, equipment • Files identifying IT facilities and ancillary equipment, software, firmware • Quality assurance reviews and sites, and and similar procedures, services reports • Files concerning implementation of (including support services), and related • Reports on implementation of plans IT facility and site management and resources. • Compliance reviews equipment support services provided to This GRS does not cover all records • Data measuring or estimating specific sites, including reviews, site relating to information technology impact and compliance visit reports, trouble reports, equipment operations and management. Offices Destroy/delete when 3 years old or 1 service histories, reports of follow-up with responsibility for IT operations year after responsible office determines actions, and related correspondence. also maintain administrative records that there are no unresolved issues, Destroy/delete when 3 years old, or covered by other GRS and records not whichever is longer. when superseded or obsolete, in the GRS that must be scheduled by whichever is longer. the agency. In addition, this GRS does [Note: See item 3b for performance files [Appraisal analysis: These records relating to systems.] not apply to system data or information document the control and operation of content, which must be scheduled [Appraisal analysis: Item 1a covers buildings and rooms where IT separately by submitting an SF 115, such records as statistical performance equipment, systems, and storage media Request for Records Disposition data concerning system (and network) are located. Files include listings of Authority, to NARA. operations, including process steps or facilities, trouble reports, reports on site The disposition instructions apply to paths, time required for completion, and visits and inspections, and service records regardless of physical form or event or error indicators. These records histories for equipment. Also included characteristics. Records may be include system availability reports that are copies of agency directives and lines maintained on paper, in microform, or draw upon sample performance of authority relating to such matters as electronically. Dispositions apply, indicators to measure overall system facility operations, physical security of however, only to records that are performance. The retention period for facilities, environmental security, maintained as described in each item or this item relates to the ‘‘5 year plans’’ including documents on fire prevention subitem. If documents are part of a typically associated with IT systems. and control, electric power supply larger case file or recordkeeping system Item 1b covers such materials as target protection, magnetism protection, and that contains records not covered in this IT architecture reports, systems ‘‘good housekeeping’’ procedures for GRS, agencies must separately schedule development lifecycle handbooks, protection against dust, dirt, and fire that file or system by submitting an SF computer network assessments and hazards. 115 to NARA. If records covered by follow-up documentation, authority to These records need only to be kept for more than one item in this schedule are operate records, and certification and a relatively short period of time to maintained together in one file or accreditation of equipment. These satisfy administrative and operational recordkeeping system, agencies must records are critical to the proper needs. The proposed three-year retain the records for the longest functioning of systems. Network retention period is adequate to ensure retention period authorized for those assessments, for example, are conducted that IT operations are carried out in an items. at regular intervals, and in cases where environment that meets all applicable Note that GRS 20, Electronic Records, performance is found to be in need of standards. remains in effect. GRS 20 covers certain improvement, the agency institutes a Records documenting control and temporary files associated with data process to change or upgrade network operation of facilities that are base management. This new schedule equipment, configuration, or other maintained by units responsible for supplements GRS 20 by providing components. Records under this item facilities management and physical disposal authority for temporary records typically take the form of structured security are retained for varying periods relating to overall IT management, as reports. Examples include contractor of time in accordance with other GRS opposed to the operation and use of evaluation reports and other quality items (e.g., GRS 18, items 9 and 10) and specific systems. NARA is reviewing assurance records, market analyses and individual agency schedules.]
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3. IT Asset and Configuration acquisition and implementation of new may also include substantive data Management Files. systems. separately covered under GRS 20, item The proposed retention period in item 8). Item 4b applies to Tape Library a. Inventories of IT assets, network 3a is appropriate since only current records including automated files and circuits, and building or circuitry inventories are needed. Note that manual records controlling location diagrams, including equipment control documents (or sections of documents) maintenance, and disposition in a tape systems such as databases of barcodes that are unchanged from prior library of the records covered by item affixed to IT physical assets. Destroy/ inventories but that remain valid are 4a, including lists of holdings and delete 1 year after completion of the kept in conjunction with current control logs. These records include next inventory. inventories. The proposed disposition ‘‘vault lists,’’ and other reports listing all b. Records created and retained for instructions for item 3b(1) reflects the back-up medium, documents certifying asset management, performance and business need to retain for the life of a the completion of backup processes, and capacity management, system system detailed reports and data other run tasks and differential backup management, configuration and change concerning the implementation, activities. Tape libraries also maintain management, and planning, follow-up, modification, and upgrading of systems the addresses of offsite storage facilities, and impact assessment of operational infrastructure. For item 3b(2), the and ‘‘bin’’ location within storage networks and systems. Includes, but is proposed disposition enables disposal facilities. not limited to: of system maintenance records when Agencies may produce backups for (1) Data and detailed reports on three years old or one year after purposes other than system restoration. implementation of systems, applications termination of the system, whichever is Master file and database backups, which and modifications; application sizing, sooner. This will enable the agencies to are produced to ensure against the loss resource and demand management; ensure that proper maintenance of documents and other data, remain documents identifying, requesting, and procedures have been followed and to covered by GRS 20, item 8, Backups of analyzing possible changes, authorizing allow for any follow-up activities. If any Files. Item 4a of this schedule pertains changes, and documenting maintenance activities have a major to backups implemented by systems implementation of changes; impact on a system, or lead to a administrators to ensure the ability to documentation of software distribution significant change, those activities restore the entire system in the event of and release or version management. should be documented in item 3b(1).] a major network failure. Destroy/delete 1 year after The proposed GRS provides that termination of system. 4. System Backups and Tape Library Records. incremental back-up tapes be destroyed (2) Records of IT maintenance on the when superseded or when no longer network infrastructure documenting a.Backup tapes maintained for needed for system restoration. This preventative, corrective, adaptive and potential system restoration in the event disposition instruction allows agencies perfective (enhancement) maintenance of a system failure or other to keep only the current incremental actions, including requests for service, unintentional loss of data. backup or to retain it as long as the work orders, service histories, and (1) Delete/destroy incremental backup agency considers it may be needed for related records. tapes when superseded by a full backup, system restoration. Agencies will keep Destroy/delete when 3 years old or 1 or when no longer needed for system at least one additional backup of the full year after termination of system, restoration, whichever is later. system, for security purposes. As for the whichever is sooner. (2) Delete/destroy full backup tapes incremental backups, agencies decide if when second subsequent backup is [Appraisal analysis: This item covers the basic retention period is sufficient verified as successful or when no longer routine administrative records relating and may keep full backups for as long needed for system restoration, to existing IT systems, such as as they may be needed for system whichever is later. inventories of assets, including restoration. The disposition instruction equipment control systems, databases of [Note: See GRS 20, item 8, for backups of for records used to control the location, barcodes affixed to physical assets, work master files and databases.] maintenance, and disposition of orders and service histories on b. Tape library records including magnetic media in a tape library maintenance of network infrastructure, automated files and manual records provides for destruction when they are and reports and other files relating to used to control the location, superseded, obsolete, or no longer system implementation and maintenance, and disposition of needed. This authorization is modification. Detailed information is magnetic media in a tape library appropriate because agencies need only found in bar code reports, asset including list of holdings and control the current, accurate information on the management guides, requests for logs. location and status of backup tapes.] services, requisitions for equipment, Destroy/delete when superseded or 5. Files Related to Maintaining the leases, change orders, purchase orders, obsolete. Security of Systems and Data. property transfer control systems, flow [Appraisal analysis: This item reconfiguration requests, pertains to records accumulated to a. System Security Plans and Disaster standardization requests and ensure the ability to resume operations Recovery Plans. justifications. Other records include in the event of a system failure. Item 4a Destroy/delete 1 year after system is listings of devices such as routers, hubs, covers incremental and full system superseded. switches, and servers, described by backup tapes maintained for potential b. Documents identifying IT risks and make and model, location, and pertinent system restoration. It is distinguished analyzing their impact, risk capacity and configuration information. from GRS 20, item 8, Backups of Files, measurements and assessments, actions These records differ from those covered which covers security copies of the to mitigate risks, implementation of risk by item 11. The records under item 3 substantive contents of master files and action plan, service test plans, test files relate to the ongoing maintenance and databases. The GRS 24 item applies to and data. management of existing IT assets. The an IT shop’s backups of system software Destroy/delete 1 year after system is records under item 11 relate to the (which, due to system configuration, superseded.
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[Appraisal analysis: Item 5a provides systems requiring special 8. IT Operations Records disposal authority for records that accountability, such as systems a. Workload schedules, run reports, outline official procedures for securing containing information that is security and schedules of maintenance and and maintaining IT infrastructure, classified. The item authorizes the support activities. typically system security plans, disaster destruction of records concerning user Destroy/delete when 1 year old. recovery plans, and continuity of identification six years after a user b. Problem reports, proposals for operations plans. The files include such account is terminated or password is changes and related decision documents records as published computer technical altered, or when it is no longer needed manuals and guides, examples and relating to the software infrastructure of for security purposes, whichever is the network or system. references used to produce guidelines later. This will permit agencies to retain covering security issues related to Destroy/delete 1 year after problem is user identification records associated resolved. specific systems and equipment, records with highly sensitive or potentially on disaster exercises and resulting c. Reports on operations, including vulnerable systems in order to provide measures of benchmarks, performance evaluations, network vulnerability historical data that may be needed in assessments, risk surveys, and other indicators, and critical success factors, support of investigations or litigation error and exception reporting, self- studies, such as formal security arising from inappropriate access. vulnerability assessments conducted by assessments, performance monitoring; IG offices. These records relate to the Records covered under item 6b and management reports. specific systems for which they were include records such as user passwords Destroy/delete when 3 years old. written. System replacements will have and profiles for those systems not [Appraisal analysis: Item 8a includes new security and risk management requiring special accountability. The workload schedules, run reports, requirements that may be totally records in these systems are typically including cycle time reports, schedules different because of the architecture of system generated according to preset of maintenance, and related records. It the replacement system. The disposition requirements. A system may, for is generally agreed within the Federal IT instruction for item 5a provides for example, prompt users for new community that the value of these maintenance of the records to ensure a passwords every 90 days for all users. voluminous records expires after one continuity of security controls These records are covered by GRS 20, year. throughout the life of the system. Item 1c.] Item 8b covers problem reports, proposals for changes and related Item 5b covers analysis of security 7. Computer Security Incident policies, processes, and guidelines, as decision documents relating to the Handling, Reporting and Follow-up software infrastructure of a network or well as system risk management and Records vulnerability analyses. Examples of system. The retention period proposed specific documents are automated Destroy/delete 3 years after all for these records will satisfy the information systems security directives necessary follow-up actions have been administrative and operational needs of and computer virus handbooks. Records completed. IT offices by ensuring the retention of covered by GRS 18, item 27 may appear records relating to issues until they have [Appraisal analysis: This item covers similar, but GRS 18 relates to plans been resolved. records relating to attempted or actual developed to protect life and property Item 8c covers reports on operations, system security breaches, including and GRS 24 covers records relating including measures of benchmarks, break-ins (‘‘hacks’’), virus threats, specifically to the security of IT performance monitoring, and improper staff usage, failure of security systems. The retention period for these management reports. Agencies indicated provisions or procedures, and records reflects the need to retain that the proposed retention period potentially compromised information records while a system is current and would meet their administrative and assets. provides for review of documentation operational requirements for these for superseded systems in connection These records typically consist of routine files.] narrative reports and background with ensuring adequate protection for 9. Financing of IT Resources and documentation relating to individual new systems.] Services events or issues. These records include 6. User Identification, Profiles, references to unauthorized intrusions, Authorizations, and Password Files Note: Copies of records needed to support web site defacement, misuse of system contracts should be filed in procurement EXCLUDES records relating to resources, and other incidents noted by files, which are scheduled under GRS 3.] electronic signatures. the Federal Computer Incident a. Systems requiring special a. Agreements formalizing Response Center (FedCIRC, http:// performance criteria for quantity and accountability, e.g., those containing www.fedcirc.gov). information that may be needed for quality of service, including definition Retaining records for 3 years after all audit or investigative purposes and of responsibilities, response times and those that contain classified records. follow-up actions, including judicial volumes, charging, integrity guarantees, Destroy/delete inactive file 6 years procedures, have been completed and non-disclosure agreements. after user account is terminated or ensures the availability of active case Destroy/delete 3 years after agreement is password is altered, or when no longer records and provides an adequate superseded or terminated. needed for investigative or security amount of time after a case is closed for b. Files related to managing third- purposes, whichever is later. any necessary follow-up action. Any party services, including records that b. Routine systems, i.e., those not significant incidents (e.g., a major document control measures for covered by item 6a. system failure or compromise of critical reviewing and monitoring contracts and See GRS 20, item 1c. government data) would be documented procedures for determining their [Appraisal analysis: Item 6a provides in program records, such as those in the effectiveness and compliance. Destroy/ disposition instructions for user office of the Inspector General, which delete 3 years after control measures or identification records, including user must be scheduled separately by procedures are superseded or profiles and passwords associated with submitting an SF 115 to NARA.] terminated.
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c. Records generated in IT trouble reports, customer queries, shared applications (e.g., electronic mail, management and service operations to feedback records, and trend analyses. word processing, and database programs). identify and allocate charges and track These document end-user inquiries and The services necessary to design, implement, payments for computer usage, data requests for assistance. test, validate, and maintain such components processing and other IT services These voluminous records are critical are also considered part of an agency’s IT EXCLUDING records that are part of the to the effective operation of IT systems. infrastructure. However, records relating to agency’s cost accounting system, which However, they have administrative specific systems that support or document are covered in GRS 8, items 6 and 7. value for only a brief period of time. mission goals are not covered by this item Destroy/delete records with no This item will authorize destruction of and must be scheduled individually by the outstanding payment issues when 3 customer service records such as agency by submission of an SF 115 to years old. pamphlets and lists of ‘‘frequently asked NARA.] [Appraisal analysis: These records questions’’ (FAQs) one year after the [Appraisal analysis: These records include agreements formalizing record is superseded or obsolete and pertain to individual new enterprise performance criteria for quantity and that help desk logs and other files projects designed to provide and quality of service, files related to related to customer query, feedback, and support agency IT infrastructure. IT managing third-party services, and analysis be destroyed when one year infrastructure includes the basic records generated in IT management old. The recommended disposition systems and services used to supply the and service operations, financial records instructions will satisfy the agency and its staff with access to including service level agreements administrative and operational needs of computers and data defining service and support levels in IT offices, including the need to dispose telecommunications. Included are quantified terms workload, hardware, of these files in a timely fashion.] hardware, software, and the services software, as well as ad hoc reports necessary to design, implement, and documenting the continued validity of 11. IT Infrastructure Design and maintain such components. This item financial agreements. Records also Implementation Files covers records concerning the include documentation related to Records of individual projects infrastructure of IT operations. These contractor award fee for superior designed to provide and support new records do not document programs service. agency IT infrastructure (see Note), fundamental to an agency’s mission nor These records relate to financial systems, and services. Includes records the IT systems utilized by agencies in management, not IT equipment and documenting: carrying out their distinctive functions. services per se, and should be kept for • Requirements for and Rather, these records are clearly three years after agreements, implementation of functions such as administrative in nature and are of the procedures, and payment issues are —Maintaining network servers, desktop same character throughout the superseded, terminated, or resolved, as computers, and other hardware Government. Records include applicable. This retention period —Installing and upgrading network developmental records such as quality reflects normal audit cycles. These files operating systems and shared assurance plans, requirement are kept by IT offices to support their applications specifications, technology refresh plans, role in the acquisition of and payment —Providing data telecommunications operational support and test plans, final for computer software and services. • Infrastructure development and operational support plan, and post Records pertaining to these subjects that maintenance such as installation reviews and briefings. These are needed to protect legal rights, —Acceptance/accreditation of records differ from those found in Item address fiscal concerns, and/or provide 3 above. Item 3 is concerned with the Government accountability are infrastructure components —Analysis of component options, ongoing maintenance and management maintained in procurement and finance of existing IT assets. Item 11 is offices in accordance with other GRS feasibility, costs and benefits —Work associated with concerned with the acquisition and items or agency schedules.] implementation, modification, and implementation of new operating 10. IT Customer Service Files troubleshooting systems. a. Records related to providing help • Models, diagrams, schematics, and The disposition instruction for item desk information to customers, technical documentation 11a provides that records for projects including pamphlets, responses to • Quality assurance reviews and test that are not implemented be destroyed/ ‘‘Frequently Asked Questions,’’ and plans, data, and results. deleted one year after a final decision other documents prepared in advance to a. Records for projects that are not has been made. This retention period is assist customers. Destroy/delete 1 year implemented. Destroy/delete 1 year appropriate. If a proposed project is after record is superseded or obsolete. after final decision is made. rejected, there is no need to retain the b. Help desk logs and reports and b. Records for projects that are related records for an extended period other files related to customer query and implemented. of time. In accordance with Item 11b, problem response; query monitoring Destroy/delete 5 years after project is records for projects that are and clearance; and customer feedback terminated. implemented are to be destroyed five records; and related trend analysis and c. Installation and testing records. years after the project terminates. This reporting. Destroy/delete when 1 year Destroy/delete 3 years after final proposed retention period will ensure old or when no longer needed for decision on acceptance is made. that records germane to a requirement review and analysis, whichever is later. [Note: IT Infrastructure means the basic are available while the requirement is [Appraisal analysis: The records systems and services used to supply the still current and for a period of time covered by Item 10 relate to providing agency and its staff with access to computers thereafter for use in developing new and data telecommunications. Components customer service and individual support include hardware such as printers, desktop projects. In item 11c, installation and to customers. Included are such records computers, network and web servers, routers, testing records are proposed for as pamphlets and Frequently Asked hubs, and network cabling, as well as destruction or deletion 3 years after the Questions, help desk logs and incident software such as operating systems (e.g., final decision on acceptance is made. reports, ‘‘help desk tickets,’’ user guides, Microsoft Windows and Novell NetWare) and This retention period will ensure the
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availability of records should problems Dated: May 16, 2002. agency which submitted the schedule, develop and is also consistent with Michael J. Kurtz, and must provide a mailing address. audit cycles.] Assistant Archivist for Records Services— Those who desire appraisal reports Washington DC. should so indicate in their request. 12. Electronic Mail and Word [FR Doc. 02–16158 Filed 6–26–02; 8:45 am] FOR FURTHER INFORMATION CONTACT: Processing System Copies BILLING CODE 7515–01–P Marie Allen, Director, Life Cycle Electronic copies of records that are Management Division (NWML), created on electronic mail and word National Archives and Records NATIONAL ARCHIVES AND RECORDS processing systems and used solely to Administration, 8601 Adelphi Road, ADMINISTRATION generate a recordkeeping copy of the College Park, MD 20740–6001. records covered by the other items in Telephone: (301) 837–3635. E-mail: Records Schedules; Availability and [email protected]. this schedule. Also includes electronic Request for Comments copies of records created on electronic SUPPLEMENTARY INFORMATION: Each year mail and word processing systems that AGENCY: National Archives and Records Federal agencies create billions of are maintained for updating, revision, or Administration (NARA). records on paper, film, magnetic tape, dissemination. ACTION: Notice of availability of and other media. To control this a. Copies that have no further proposed records schedules; request for accumulation, agency records managers comments. administrative value after the prepare schedules proposing retention periods for records and submit these recordkeeping copy is made. Includes SUMMARY: The National Archives and copies maintained by individuals in schedules for NARA’s approval, using Records Administration (NARA) the Standard Form (SF) 115, Request for personal files, personal electronic mail publishes notice at least once monthly Records Disposition Authority. These directories, or other personal directories of certain Federal agency requests for schedules provide for the timely transfer on hard disk or network drives, and records disposition authority (records into the National Archives of copies on shared network drives that are schedules). Once approved by NARA, historically valuable records and used only to produce the recordkeeping records schedules provide mandatory authorize the disposal of all other copy. Destroy/delete within 180 days instructions on what happens to records records after the agency no longer needs after the recordkeeping copy has been when no longer needed for current them to conduct its business. Some produced. Government business. They authorize schedules are comprehensive and cover b. Copies used for dissemination, the preservation of records of all the records of an agency or one of its revision, or updating that are continuing value in the National major subdivisions. Most schedules, maintained in addition to the Archives of the United States and the however, cover records of only one recordkeeping copy. Destroy/delete destruction, after a specified period, of office or program or a few series of when dissemination, revision, or records lacking administrative, legal, records. Many of these update updating is completed. research, or other value. Notice is previously approved schedules, and published for records schedules in some include records proposed as [Appraisal analysis: This item will which agencies propose to destroy provide disposal authority for electronic permanent. records not previously authorized for No Federal records are authorized for mail (email) and word processing disposal or reduce the retention period records used solely to produce records destruction without the approval of the of records already authorized for Archivist of the United States. This described in GRS 24, after a disposal. NARA invites public recordkeeping copy has been produced, approval is granted only after a comments on such records schedules, as thorough consideration of their and electronic copies of records required by 44 U.S.C. 3303a(a). described in GRS 24 used solely for administrative use by the agency of DATES: Requests for copies must be dissemination, revision, or updating origin, the rights of the Government and received in writing on or before August of private persons directly affected by that are maintained in addition to the 12, 2002. Once the appraisal of the recordkeeping copy. In 1998 NARA the Government’s activities, and records is completed, NARA will send whether or not they have historical or added an item with the same wording a copy of the schedule. NARA staff as this item 12 to GRS 1–16, 18, and 23. other value. usually prepare appraisal Besides identifying the Federal Item 12 is in keeping with the authority memorandums that contain additional agencies and any subdivisions that exists throughout the GRS to information concerning the records requesting disposition authority, this dispose of email and word processing covered by a proposed schedule. These, public notice lists the organizational copies of records within the scope of too, may be requested and will be unit(s) accumulating the records or each GRS. provided once the appraisal is indicates agency-wide applicability in Agencies should use agency specific completed. Requesters will be given 30 the case of schedules that cover records schedules developed following the days to submit comments. that may be accumulated throughout an guidance in NARA Bulletin 2001–03 or ADDRESSES: To request a copy of any agency. This notice provides the control GRS 20 Items 13 and 14 to dispose of records schedule identified in this number assigned to each schedule, the email and word processing copies of notice, write to the Life Cycle total number of schedule items, and the other information technology records Management Division (NWML), number of temporary items (the records (i.e., records not covered by this GRS) National Archives and Records proposed for destruction). It also that are not required for recordkeeping Administration (NARA), 8601 Adelphi includes a brief description of the purposes. Please note that neither this Road, College Park, MD 20740–6001. temporary records. The records item in GRS 24, the identical items in Requests also may be transmitted by schedule itself contains a full other GRS, nor GRS 20, items 13 and 14, FAX to 301–837–3698 or by e-mail to description of the records at the file unit apply to the copies of email and word [email protected]. Requesters must level as well as their disposition. If processing records that are designated cite the control number, which appears NARA staff has prepared an appraisal for recordkeeping purposes.] in parentheses after the name of the memorandum for the schedule, it too
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includes information about the records. connection with the Medical Product correspondence providing informal Further information about the Surveillance System Pilot. Included are advice, interpretations and/or opinions disposition process is available on such records as paper source presented by Commission staff, and request. documents, electronic data, and output electronic copies of documents created reports relating to injuries caused by using electronic mail and word Schedules Pending medical devices and to malfunctions of processing. Official opinions were 1. Department of the Army, Agency- such devices. Also included are files previously approved for permanent wide (N1–AU–02–21, 4 items, 2 relating to pilot administration and retention. temporary items). Records relating to electronic copies of records created 11. National Archives and Records notification rosters for continuity of using electronic mail and word Administration (N1–64–02–10, 5 items, operations emergency relocation groups. processing. Paper copies of these files 4 temporary items). Administrative Included are files on contact were previously approved for disposal. records and work papers relating to a information, member responsibilities, 6. Department of Health and Human records management initiative project. and relocation assignments. Also Services, Office of the General Counsel Also included are electronic copies of included are electronic copies of (N1–468–02–1, 3 items, 3 temporary records created using electronic mail documents created using electronic mail items). Case files pertaining to litigation and word processing. Proposed for and word processing. Recordkeeping that does not establish a precedent. Also permanent retention are recordkeeping copies of emergency plans and reports included are electronic copies of records copies of project program records. are proposed for permanent retention. created using electronic mail and word 12. Office of Personnel Management, This schedule authorizes the agency to processing relating to litigation cases. Office of the Chief Information Officer apply the proposed disposition 7. Department of the Interior, U.S. (N1–478–02–4, 12 items, 9 temporary instructions to any recordkeeping Geological Survey (N1–57–02–2, 227 items). Records relating to agency medium. items, 225 temporary items). Records oversight of Federal Executive Boards, 2. Department of the Army, Agency- relating to information resources including administrative guidance, wide (N1–AU–02–22, 2 items, 2 management, administrative support project files, and the Federal Executive temporary items). General matters, personnel management, equal Board web site. Also included are correspondence, including comments employment opportunity, and payroll. electronic copies of records created provided to other offices on their Included are records relating to such using electronic mail and word issuances, requests for information and matters as the agency web site, foreign processing. Proposed for permanent replies, reference copies of records, and reimbursable travel, self-service retention are recordkeeping copies of informal reports, recommendations and stores, file plans, library operations, historical files, annual reports, and suggestions, work control records, and network operations, policy development project files. other records of a general, routine, and telecommunications, audits, personnel administrative nature. Also included are recruitment, position classification, Dated: June 20, 2002. electronic copies of documents created training, time and attendance, and Michael J. Kurtz, using electronic mail and word awards. Also included are reading and Assistant Archivist for Record Services— processing. This schedule authorizes the chronological files, administrative Washington, DC. agency to apply the proposed databases, and electronic copies of [FR Doc. 02–16159 Filed 6–26–02; 8:45 am] disposition instructions to any records created using electronic mail, BILLING CODE 7515–01–P recordkeeping medium. spreadsheet, and word processing 3. Department of the Army, Agency- applications. Proposed for permanent wide (N1–AU–02–23, 5 items, 5 retention are recordkeeping copies of NATIONAL FOUNDATION ON THE temporary items). Records relating to records management filing systems ARTS AND THE HUMANITIES radiation safety. Included are training records and regulations case files. attendance records and test results, 8. Environmental Protection Agency, National Endowment for the Arts; source accounting records, instrument Office of Inspector General (N1–412– Leadership Initiatives Advisory Panel and source calibration files, and routine 02–1, 2 items, 2 temporary items). reports. Also included are electronic Reports of internal reviews of Office of Pursuant to section 10(a)(2) of the copies of documents created using Inspector General (OIG) procedures or Federal Advisory Committee Act (Public electronic mail and word processing. programs for economy, efficiency, and Law 92–463), as amended, notice is This schedule authorizes the agency to compliance with OIG policies and hereby given that a meeting of the apply the proposed disposition professional standards. Also included Leadership Initiatives Advisory Panel, instructions to any recordkeeping are electronic copies of records created Design Section (New Public Works medium. using electronic mail and word category), will be held by teleconference 4. Department of Defense, Defense processing. from 12 p.m.–3:45 p.m. on Tuesday, Intelligence Agency (N1–373–02–2, 7 9. Environmental Protection Agency, July 2, 2002 in Room 730 at the Nancy items, 7 temporary items). Records Office of Inspector General (N1–412– Hanks Center, 1100 Pennsylvania relating to the use of International 02–2, 2 items, 2 temporary items). Avenue, NW., Washington, DC, 20506. Merchants Purchase Authority Card Records relating to Hotline complaints, This meeting is for the purpose of (IMPAC) credit cards, including including forms, correspondence, Panel review, discussion, evaluation, authorization letters, reports, account synopses of cases, and reports. Also and recommendations on financial records, and electronic copies of records included are electronic copies of records assistance under the National created using electronic mail and word created using electronic mail and word Foundation on the Arts and the processing. processing. Humanities Act of 1965, as amended, 5. Department of Health and Human 10. Federal Energy Regulatory including information given in Services, Food and Drug Administration Commission, Agency-wide (N1–138– confidence to the agency. In accordance (N1–88–02–1, 14 items, 14 temporary 02–1, 3 items, 3 temporary items). with the determination of the Chairman items). Records of the Center for Devices Records relating to interpretations and of May 2, 2002, these sessions will be and Radiological Health accumulated in advisory opinions. Included are closed to the public pursuant to
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subsection (c)(4), (6) and (9)(B) of requests for waivers or reductions in U.S.C. Chapter 35). The NRC hereby section 552b of Title 5, United States searching or copying fees; or to justify informs potential respondents that an Code. expedited processing. agency may not conduct or sponsor, and Further information with reference to Submit, by August 26, 2002, that a person is not required to respond this meeting can be obtained from Ms. comments that address the following to, a collection of information unless it Kathy Plowitz-Worden, Panel questions: displays a currently valid OMB control Coordinator, National Endowment for 1. Is the proposed collection of number. the Arts, Washington, DC, 20506, or call information necessary for the NRC to 1. Type of submission, new, revision, 202/682–5691. properly perform its functions? Does the or extension: Revision. Dated: June 21, 2002. information have practical utility? 2. The title of the information 2. Is the burden estimate accurate? collection: 48 CFR 20, U.S. Nuclear Kathy Plowitz-Worden, 3. Is there a way to enhance the Regulatory Commission Acquisition Panel Coordinator. quality, utility, and clarity of the Regulation (NRCAR). [FR Doc. 02–16297 Filed 6–26–02; 8:45 am] information to be collected? 3. The form number if applicable: Not BILLING CODE 7537–01–P 4. How can the burden of the applicable. information collection be minimized, 4. How often the collection is including the use of automated required: On occasion; one time. NUCLEAR REGULATORY collection techniques or other forms of 5. Who will be required or asked to COMMISSION information technology? report: Offerors responding to NRC A copy of the draft supporting solicitations and contractors receiving Agency Information Collection statement may be viewed free of charge awards from NRC. Activities: Proposed Collection; at the NRC Public Document Room, One 6. An estimate of the number of Comment Request White Flint North, 11555 Rockville responses: 3,504. Pike, Room O–1 F23, Rockville, MD 7. The estimated number of annual AGENCY: Nuclear Regulatory 20852. OMB clearance requests are Commission (NRC). respondents: 355. available at the NRC worldwide web 8. An estimate of the number of hours ACTION: Notice of pending NRC action to site: http://www.nrc.gov/public-involve/ needed annually to complete the submit an information collection doc-comment/omb/index.html. The requirement or request: 26,088 hours request to OMB and solicitation of document will be available on the NRC (7.3 hours per response). public comment. home page site for 60 days after the 9. An indication of whether Section signature date of this notice. 3507(d), Pub. L. 104–13 applies: Not SUMMARY: The NRC is preparing a Comments and questions about the submittal to OMB for review of applicable. information collection requirements 10. Abstract: The mandatory continued approval of information may be directed to the NRC Clearance collections under the provisions of the requirements of the NRCAR implement Officer, Brenda Jo. Shelton, U.S. Nuclear and supplement the government-wide Paperwork Reduction Act of 1995 (44 Regulatory Commission, T–6 E6, U.S.C. chapter 35). Federal Acquisition Regulation, and Washington, DC 20555–0001, by ensure that the regulations governing Information pertaining to the telephone at 301–415–7233, or by requirement to be submitted: the procurement of goods and services Internet electronic mail at within the NRC satisfy the needs of the 1. The title of the information [email protected]. collection: 10 CFR part 9, Public agency. Records. Dated at Rockville, Maryland, this 21st day A copy of the final supporting 2. Current OMB approval number: of June, 2002. statement may be viewed free of charge 3150–0043. For the Nuclear Regulatory Commission. at the NRC Public Document Room, One 3. How often the collection is Beth St. Mary, White Flint North, 11555 Rockville required: On occasion. Acting NRC Clearance Officer, Office of the Pike, Room O–1 F23, Rockville, MD 4. Who is required or asked to report: Chief Information Officer. 20852. OMB clearance requests are Individuals requesting access to records [FR Doc. 02–16245 Filed 6–26–02; 8:45 am] available at the NRC worldwide web under the Freedom of Information or BILLING CODE 7590–01–P site: http://www.nrc.gov/public-involve/ Privacy Acts, or to records that are doc-comment/omb/index.html. The already publicly available in the NRC’s document will be available on the NRC Public Document Room. NUCLEAR REGULATORY home page site for 60 days after the 5. The number of annual respondents: COMMISSION signature date of this notice. 11,272. Comments and questions should be 6. The number of hours needed Agency Information Collection directed to the OMB reviewer listed annually to complete the requirement or Activities: Submission for the Office of below by July 29, 2002. Comments request: 2,832. Management and Budget (OMB) received after this date will be 7. Abstract: 10 CFR part 9 establishes Review; Comment Request considered if it is practical to do so, but assurance of consideration cannot be information collection requirements for AGENCY: U.S. Nuclear Regulatory given to comments received after this individuals making requests for records Commission (NRC). date. under the Freedom of Information Act ACTION: Notice of the OMB review of Bryon Allen, (FOIA) or Privacy Act (PA). It also information collection and solicitation Office of Information and Regulatory contains requests to waive or reduce of public comment. fees for searching for and reproducing Affairs (3150–0169), records in response to FOIA requests; SUMMARY: The NRC has recently NEOB–10202, and requests for expedited processing of submitted to OMB for review the Office of Management and Budget, requests. The information required from following proposal for the collection of Washington, DC 20503. the public is necessary to identify the information under the provisions of the Comments can also be submitted by records they are requesting; to justify Paperwork Reduction Act of 1995 (44 telephone at (202) 395–3084.
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The NRC Clearance Officer is Brenda By thirty (30) days from the date of required evaluations, issue the materials Jo. Shelton, 301–415–7233. publication of this notice in the Federal license without further prior notice. Dated at Rockville, Maryland, this 19th day Register, the applicant may file a As required by 10 CFR 2.714, a of June, 2002. request for a hearing; and any person petition for leave to intervene shall set For the Nuclear Regulatory Commission. whose interest may be affected by this forth with particularity the interest of proceeding and who wishes to the petitioner in the proceeding and Brenda Jo. Shelton, how that interest may be affected by the NRC Clearance Officer, Office of the Chief participate as a party in the proceeding must file a written request for a hearing results of the proceeding. The petition Information Officer. should specifically explain the reasons [FR Doc. 02–16203 Filed 6–26–02; 8:45 am] and a petition for leave to intervene with respect to the subject materials why intervention should be permitted BILLING CODE 7590–01–P license. Requests for a hearing and with particular reference to the petitions for leave to intervene shall be following factors: (1) The nature of the filed in accordance with the petitioner’s right under the Act to be NUCLEAR REGULATORY made a party to the proceeding; (2) the Commission’s ‘‘Rules of Practice for COMMISSION nature and extent of the petitioner’s Domestic Licensing Proceedings’’ in 10 property, financial, or other interest in CFR part 2. Interested persons should [Docket No. 72–25] the proceeding; and (3) the possible consult a current copy of 10 CFR 1 effect of any order that may be entered Foster Wheeler Environmental 2.714 , which is available at the in the proceeding on the petitioner’s Corporation, Idaho Spent Fuel Facility; Commission’s Public Document Room interest. The petition should also Notice of Docketing, Notice of (PDR), located at One White Flint North, identify the specific aspect(s) of the Consideration of Issuance, and Notice 11555 Rockville Pike (first floor), subject matter of the proceeding as to of Opportunity for a Hearing for a Rockville, Maryland, or electronically which the petitioner wishes to Materials License for the Idaho Spent on the Internet at the NRC Web site intervene. Any person who has filed a Fuel Facility http://www.nrc.gov/reading-rm/doc- petition for leave to intervene or who collections/cfr. If there are problems in The Nuclear Regulatory Commission has been admitted as a party may amend accessing the document, contact the a petition, without requesting leave of (NRC or Commission) is considering an PDR Reference staff at 1–800–397–4209, the Atomic Safety and Licensing Board application dated November 19, 2001, 301–415–4737, or by e-mail to up to 15 days prior to the holding of the for a materials license under the [email protected]. If a request for hearing or first pre-hearing conference scheduled provisions of 10 CFR part 72, from petition for leave to intervene is filed by in the proceeding, but such an amended Foster Wheeler Environmental the above date, the Commission or an petition must satisfy the specificity Corporation (the applicant or FWENC) Atomic Safety and Licensing Board requirements described above. for the receipt, possession, storage and designated by the Commission or by the Not later than fifteen (15) days prior transfer of spent fuel and other Chairman of the Atomic Safety and to the first pre-hearing conference radioactive materials associated with Licensing Board Panel will rule on the scheduled in the proceeding, a spent fuel at its proposed Idaho Spent petitioner shall file a supplement to the Fuel Facility, an independent spent fuel request and/or petition, and the Secretary or the designated Atomic petition to intervene which must storage installation (ISFSI), to be located include a list of contentions which are on the Idaho National Engineering and Safety and Licensing Board will issue a notice of hearing or an appropriate sought to be litigated in the matter. Each Environmental Laboratory site in Butte contention must consist of a specific County, Idaho. If granted, the license order. In the event that no request for hearing or petition for leave to intervene statement of the issue of law or fact to will authorize the applicant to store be raised or controverted. In addition, spent fuel in a dry storage system at the is filed by the above date, the NRC may, upon satisfactory completion of all the petitioner shall provide a brief applicant’s Idaho Spent Fuel Facility explanation of the bases of the site. Pursuant to the provisions of 10 contention and a concise statement of CFR part 72, the term of the license for 1 The most recent version of Title 10 of the Code of Federal Regulations, published January 1, 2002, the alleged facts or expert opinion the ISFSI would be twenty (20) years. inadvertently omitted the last sentence of 10 CFR which support the contention and on This application was docketed under 2.714(d) and subparagraphs (d)(1) and (2), regarding which the petitioner intends to rely in 10 CFR part 72; the ISFSI Docket No. is petitions to intervene and contentions. Those proving the contention at the hearing. 72–25. provisions are extant and still applicable to petitions to intervene. Those provisions are as The petitioner must also provide Prior to issuance of the requested follows: ‘‘In all other circumstances, such ruling references to those specific sources and license, the Commission will have made body or officer shall, in ruling on— documents of which the petitioner is the findings required by the Atomic (1) A petition for leave to intervene or a request aware and on which the petitioner Energy Act of 1954, as amended (the for a hearing, consider the following factors, among intends to rely to establish those facts or Act), and the Commission’s regulations. other things: (i) The nature of the petitioner’s right under the expert opinion. Petitioner must provide The issuance of the materials license Act to be made a party to the proceeding. sufficient information to show that a will not be approved until the NRC has (ii) The nature and extent of the petitioner’s genuine dispute exists with the reviewed the application and has property, financial, or other interest in the applicant on a material issue of law or concluded that approval of the license proceeding. fact. Contentions shall be limited to will not be inimical to the common (iii) The possible effect of any order that may be matters within the scope of the action entered in the proceeding on the petitioner’s defense and security and will not interest. under consideration. The contention constitute an unreasonable risk to the (2) The admissibility of a contention, refuse to must be one which, if proven, would health and safety of the public. The NRC admit a contention if: entitle the petitioner to relief. A will complete an environmental impact (i) The contention and supporting material fail to petitioner who fails to file such a statement in accordance with 10 CFR satisfy the requirements of paragraph (b)(2) of this supplement which satisfies these section; or part 51. This action will be the subject (ii) The contention, if proven, would be of no requirements with respect to at least one of a subsequent notice in the Federal consequence in the proceeding because it would contention will not be permitted to Register. not entitle petitioner to relief.’’ participate as a party.
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Those permitted to intervene become For further details with respect to this for Medicare; and Form AA–8, Widow/ parties to the proceeding, subject to any application, see the application dated Widower Application for Medicare; to limitations in the order granting leave to November 19, 2001, which is available obtain the information needed to intervene, and have the opportunity to for public inspection at the determine whether individuals who participate fully in the conduct of the Commission’s Public Document Room, have not yet filed for benefits under the hearing. One White Flint North Building, 11555 RRA are qualified for Medicare A request for a hearing or petition for Rockville Pike, Rockville, MD or from payments provided under Title XVIII of leave to intervene must be filed with the the publicly available records the Social Security Act. Secretary of the Commission, U.S. component of NRC’s document system Further, in order for RRB to determine Nuclear Regulatory Commission, (ADAMS). ADAMS is accessible from if a qualified railroad retirement Washington, DC 20555, Attention: the NRC Web site at http://www.nrc.gov/ beneficiary who is claiming Document Control Desk or may be reading-rm/adams.html (the Public supplementary medical insurance delivered to the Commission’s Public Electronic Reading Room). Persons who coverage under Medicare is entitled to Document Room, One White Flint North do not have access to ADAMS or who a Special Enrollment Period (SEP) and/ Building, 11555 Rockville Pike, encounter problems in accessing the or premium surcharge relief because of Rockville, MD, by the above date. documents located in ADAMS, should coverage under an Employer Group Because of continuing disruptions in contact the NRC PDR Reference staff by Health Plan (EGHP), is needs to obtain delivery of mail to United States telephone at 1–800–397–4209, 301– information regarding the claimant’s Government offices, it is requested that 415–4737 or by e-mail to [email protected]. EGHP coverage, if any. The RRB uses petitions for leave to intervene and Form RL–311–F, Evidence of Coverage Dated at Rockville, Maryland, this 18th day Under An Employer Group Health Plan, requests for hearing be transmitted to of June, 2002. to obtain the basic information needed the Secretary of the Commission either For the Nuclear Regulatory Commission. by means of facsimile transmission to by the RRB to establish EGHP coverage E. William Brach, for a qualified railroad retirement 301–415–1101 or by e-mail to Director, Spent Fuel Project Office, Office of [email protected]. A copy of the beneficiary. Completion of the forms is Nuclear Material Safety and Safeguards. required to obtain a benefit. One request for hearing and petition for [FR Doc. 02–16244 Filed 6–26–02; 8:45 am] leave to intervene should also be sent to response is requested of each BILLING CODE 7590–01–P the Office of the General Counsel, U.S. respondent. The RRB proposes revisions to Forms Nuclear Regulatory Commission, AA–6, AA–7 and AA–8 to incorporate a Washington, DC 20555, and because of RAILROAD RETIREMENT BOARD new item needed to determine continuing disruptions in delivery of eligibility due to the 5-year vesting mail to United States Government Proposed Collection; Comment provision under the Railroad Retirement offices, it is requested that copies be Request and Income Security Act of 2001. No transmitted either by means of facsimile changes were proposed to Form RL– SUMMARY: In accordance with the transmission to 301–415–3725 or by e- 311–F. The RRB estimates that 180 requirement of section 3506(c)(2)(A) of mail to [email protected]. A copy Form AA–6’s, 50 Form AA–7’s, and 10 the Paperwork Reduction Act of 1995 of the request for hearing and petition Form AA–8’s are completed annually. for leave to intervene should also be which provides opportunity for public The completion time for Forms AA–6, sent to Mr. Donald I. Rogers, Jr., comment on new or revised data AA–7 and AA–8 is estimated at 8 Executive Vice President and Chief collections, the Railroad Retirement minutes. The completion time for Form Operating Officer, Foster Wheeler Board (RRB) will publish summaries of RL–311–F is estimated at 10 minutes. Environmental Corporation, 1000 The proposed data collections. The RRB estimates that 800 RL–311–F’s Comments are invited on: (a) Whether American Road, Morris Plains, NJ are completed annually. 07950. Where petitions are filed during the proposed information collection is Additional Information or Comments: the last ten (10) days of the notice necessary for the proper performance of To request more information or to period, it is requested that the petitioner the functions of the agency, including obtain a copy of the information promptly so inform the NRC by a toll- whether the information has practical collection justification, forms, and/or free telephone call (800–368–5642 utility; (b) the accuracy of the RRB’s supporting material, please call the RRB Extension 415–8500) to E. William estimate of the burden of the collection Clearance Officer at (312) 751–3363. Brach, Director, Spent Fuel Project of the information; (c) ways to enhance Comments regarding the information Office, Office of Nuclear Material Safety the quality, utility, and clarity of the collection should be addressed to and Safeguards, with the following information to be collected; and (d) Ronald J. Hodapp, Railroad Retirement message: petitioner’s name and ways to minimize the burden related to Board, 844 North Rush Street, Chicago, telephone number; date petition was the collection of information on Illinois 60611–2092. Written comments mailed; facility name; and publication respondents, including the use of should be received within 60 days of date and page number of this Federal automated collection techniques or this notice. Register notice. other forms of information technology. Non-timely filings of petitions for Title and purpose of information Chuck Mierzwa, leave to intervene, amended petitions, collection: Clearance Officer. supplemental petitions, and/or requests Medicare; OMB 3220–0082 [FR Doc. 02–16179 Filed 6–26–02; 8:45 am] for hearing will not be entertained Under Section 7(d) of the Railroad BILLING CODE 7095–01–M absent a determination by the Retirement Act (RRA), the Railroad Commission, the presiding Officer, or Retirement Board (RRB) administers the the presiding Atomic Safety and Medicare program for persons covered RAILROAD RETIREMENT BOARD Licensing Board that the petition and/or by the railroad retirement system. The Proposed collection; comment request request should be granted based upon a RRB uses Form AA–6, Employee balancing of the factors specified in 10 Application for Medicare; Form AA–7, SUMMARY: In accordance with the CFR 2.714(a)(1)(i)–(v) and 2.714(d). Spouse/Divorced Spouse Application requirement of Section 3506(c)(2)(A) of
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the Paperwork Reduction Act of 1995 disability annuitants whose work Inc. (‘‘Distributor,’’ and collectively, which provides opportunity for public activity and/or recent medical history ‘‘Applicants’’). comment on new or revised data warrants a more extensive review and SUMMARY OF APPLICATION: Applicants collections, the Railroad Retirement thus completion of Form G–254. The seek an order under Section 6(c) of the Board (RRB) will publish periodic RRB proposes non-burden impacting Act to the extent necessary to permit the summaries of proposed data collections. editorial and formatting changes to recapture, under specified Comments are invited on: (a) Whether Form G–254a for clarification purposes. circumstances, of certain contract the proposed information collection is One response is requested of each enhancements applied to purchase necessary for the proper performance of respondent to Form G–254 and G–254a. payments made under the deferred the functions of the agency, including Completion is required to retain a variable annuity contracts described whether the information has practical benefit. herein that Jackson National will issue utility; (b) the accuracy of the RRB’s The estimated annual respondent through the Separate Account (the estimate of the burden of the collection burden is as follows: ‘‘Contracts’’), as well as other contracts of the information; (c) ways to enhance that Jackson National may issue in the the quality, utility, and clarity of the ESTIMATE OF ANNUAL RESPONDENT future through their existing or future information to be collected; and (d) BURDEN separate accounts (‘‘Other Accounts’’) ways to minimize the burden related to that are substantially similar in all the collection of information on Annual re- Time Burden material respects to the Contracts Form #(s) sponses (min) (hrs) respondents, including the use of (‘‘Future Contracts’’). Applicants also automated collection techniques or request that the order being sought other forms of information technology. G–254 ...... 1,500 5–55 956 extend to any other National Title and Purpose of information G–254a ...... 1,500 5 125 collection: Association of Securities Dealers, Inc. Additional Information or Comments: (‘‘NASD’’) member broker-dealer Continuing Disability Report; OMB To request more information or to controlling or controlled by, or under 3220–0187 obtain a copy of the information common control with, Jackson National, Under Section 2 of the Railroad collection justification, forms, and/or whether existing or created in the Retirement Act, an annuity is not supporting material, please call the RRB future, that serves as distributor or payable or is reduced for any month in Clearance Officer at (312) 751–3363. principal underwriter for the Contracts which the annuitant works for a railroad Comments regarding the information or Future Contracts (‘‘Affiliated Broker- or earns more than prescribed dollar collection should be addressed to Dealers’’), and any successors in interest amounts from either non-railroad Ronald J. Hodapp, Railroad Retirement to the Applicants. employment or self-employment. Board, 844 N. Rush Street, Chicago, FILING DATE: The Application was filed Certain types of work may indicate an Illinois 60611–2092. Written comments on January 25, 2002 and amended on annuitant’s recovery from disability. should be received within 60 days of April 26, 2002. The provisions relating to the reduction this notice. HEARING OR NOTIFICATION OF HEARING: An or non-payment of annuities by reasons Chuck Mierzwa, order granting the application will be of work and an annuitant’s recovery Clearance Officer. issued unless the Commission orders a from disability for work are prescribed hearing. Interested persons may request [FR Doc. 02–16216 Filed 6–26–02; 8:45 am] in 20 CFR 220.17–220.20. The RRB a hearing by writing to the Secretary of conducts continuing disability reviews BILLING CODE 7905–01–M the Commission and serving Applicants (CDR) to determine whether annuitants with a copy of the request, in person or continue to meet the disability by mails. Hearing requests should be requirements of the law. Provisions SECURITIES AND EXCHANGE received by the Commission by 5:30 relating to when and how often the RRB COMMISSION p.m. on July 12, 2002, and should be conducts CDR’s are prescribed in 20 [Release No. IC–25620; File No. 812–12769] accompanied by proof of service on the CFR 220.186. Applicants, in the form of an affidavit Form G–254, Continuing Disability Jackson National Life Insurance or, for lawyers, a certificate of service. Report, is currently used by the RRB to Company of New York, et al.; Notice of Hearing requests should state the nature develop information for CDR Application of the writer’s interest, the reason for the determinations, including request, and the issues contested. AGENCY: Securities and Exchange determinations prompted by a report of Persons who wish to be notified of a Commission (‘‘SEC’’ or ‘‘Commission’’). work, return of railroad service, hearing may request notification by allegations of medical improvement, or ACTION: Notice of Application for an writing to the Secretary of the routine disability call-up. The RRB order under Section 6(c) of the Commission. proposes to modify an item that requests Investment Company Act of 1940 (the earnings information on Form G–254. ‘‘Act’’) granting exemptions from the ADDRESSES: Secretary, Securities and The current version requests earnings provisions of Sections 2(a)(32) and Exchange Commission, 450 Fifth Street, information on specific months in 27(i)(2)(A) of the Act and Rule 22c–1 NW, Washington, DC 20549–0609. which a disability annuitant earns more thereunder to permit the recapture of Applicants, Jackson National Life than a specified amount. The proposed contract enhancements applied to Insurance Company, 1 Corporate Way, version will request all earnings purchase payments made under certain Lansing, Michigan 48951, Attn: Susan information over a specified period of deferred variable annuity contracts. Rhee, Esq.; copies to Joan E. Boros, Esq., time. Non-burden impacting editorial Jorden Burt LLP, 1025 Thomas Jefferson and formatting changes to Form G–254 APPLICANTS: Jackson National Life Street, NW, Suite 400 East, Washington, for clarification purposes are also Insurance Company of New York DC 20007–0805. proposed. (‘‘Jackson National’’), JNLNY Separate FOR FURTHER INFORMATION CONTACT: Form G–254a, Continuing Disability Account—I (the ‘‘Separate Account’’) Harry Eisentein, Senior Counsel, at Update Report, is used to help identify and Jackson National Life Distributors, (202) 942–0552, or William J. Kotapish,
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Assistant Director, at (202) 942–0670, 5. The Contracts permit owners to Enhancement had not been elected. Office of Insurance Products, Division of accumulate contract values on a fixed However, the interest rate will never go Investment Management. basis through allocations to the below three percent. SUPPLEMENTARY INFORMATION: The Guaranteed Fixed Accounts (‘‘Fixed 10. Jackson National will recapture all following is a summary of the Account’’) which offers guaranteed or a portion of any Contract application. The complete application is crediting rates for a specified period for Enhancements, regardless of a decline available for a fee from the SEC’s Public one year. Guaranteed periods of other value, by imposing a recapture charge Reference Branch, 450 Fifth Street, NW, durations may be added from time to whenever an owner; (i) makes a total Washington, DC 20549–0102 ((202) time. withdrawal within the recapture charge 942–8090). 6. The Contracts also permit owners period (three years after a first year to accumulate contract values on a payment) or a partial withdrawal of Applicants’ Representations variable basis, through allocations to corresponding premiums within the 1. Jackson National is a stock life one or more of the investment divisions recapture charge period in excess of insurance company organized under the of the Separate Account (the those permitted under the Contracts’ laws of the state of New York in July ‘‘Investment Divisions,’’ collectively free withdrawal provisions, unless the 1995. Its legal domicile and principal with the Fixed Accounts, the withdrawal is made for certain health- business address is 12900 Westchester ‘‘Allocation Options’’). 43 Investment related emergencies specified in the Avenue, Purchase, New York 10577. Divisions are expected to be offered Contracts; (ii) elects to receive payments Jackson National is admitted to conduct under the Contracts, but additional under in income option within the life insurance and annuity business in Investment Divisions may be offered in recapture charge period; or (iii) returns the Delaware, Michigan and New York. the future and some of those currently the Contract during the free look period. Jackson National is ultimately a wholly- expected to be offered could be 11. The amount of the recapture owned subsidiary of Prudential plc eliminated or combined with other charge varies, depending upon when the (London, England). Investment Divisions in the future. charge is imposed, as follows: 2. The Separate Account was Similarly, Future Contracts may offer established by Jackson National on additional or different Investment CONTRACT ENHANCEMENT RECAPTURE September 12, 1997, pursuant to the Divisions. CHARGE provisions of New York law and the 7. Transfers among the Investment [As a percentage of first year premium authority granted under a resolution of Divisions are permitted. The first 15 payments] Jackson National’s Board of Directors. transfers in a contract year are free; Jackson National is the depositor of the subsequent transfers cost $25. Certain Completed Years Separate Account. The Separate transfers to, from and among the Fixed Since Receipt of Account meets the definition of a Account are also permitted during the Premium ...... 0123+ ‘‘separate account’’ under the federal Contract’s accumulation phase, but are Recapture Charge securities laws and is registered with subject to certain adjustments and (%) ...... 2 1.5 .75 0 the Commission as a unit investment limitations. Dollar cost averaging and trust under the Act (File No. 811– rebalancing transfers are offered at no 12. The recapture charge percentage 08401). The Separate Account will fund charge and do not count against the 15 will be applied to the corresponding the variable benefits available under the free transfers permitted each year. premium reflected in the amount Contracts. The offering of the Contracts 8. If the optional Contract withdrawn or the amount applied to will be registered under the Securities Enhancement endorsement is elected, income payments that means subject to Act of 1933 (the ‘‘1933 Act’’). each time an owner makes a premium a withdrawal charge. Recapture charges 3. The Distributor is a wholly-owned payment during the first contract year, only apply to premiums received in the subsidiary of Jackson National and serve Jackson National will add an additional first Contract Year. as the distributor of the Contracts. The amount to the owner’s contract value (a 13. Recapture charges will be waived Distributor is registered with the ‘‘Contract Enhancement’’). All Contract upon death or exercise of a Nursing Commission as a broker-dealer under Enhancements are paid from Jackson Home claim. Recapture charges will be the Securities Exchange Act of 1934 (the National’s general account assets. The waived on minimum required ‘‘1934 Act’’) and is a member of the Contract Enhancement is equal to two distributions. Recapture charges will be NASD. The Distributor enters into percent of the premium payment. applied upon annuitization, even in a selling group agreements with affiliated Jackson National will allocate the situation where the Withdrawal Charge and unaffiliated broker-dealers. The Contract Enhancement to the is waive. The amount recaptured will be Contracts are sold by licensed insurance Guaranteed Accounts and/or Investment taken from the Investment Divisions and agents, where the Contracts may be Divisions in the same proportion as the the Fixed Account in the same lawfully sold, who are registered premium payment allocation. The proportion as the withdrawal charge. representatives of broker-dealer that are Contract Enhancement is not credited to Partial withdrawals will be deemed to registered under the 1934 Act and are any premiums received after the first remove premium payments on a first-in- members of the NASD. contract year. first-out basis (the order that entails 4. The Contracts require a minimum 9. There is an asset-based charge for payment of the lowest withdrawal and initial payment of $10,000 under most each of the Contract Enhancements. The recapture charges). circumstances ($2,000 for a qualified Contract Enhancement has a 0.67% 14. Jackson National does not assess plan contract). Subsequent payments charge that applies for three years. the recapture charge on any payments may be made at any time during the These charges will also be assessed paid out as: death benefits; withdrawals accumulation phase. Each subsequent against any amounts an owner has necessary to satisfy the minimum payment must be at least $500 ($50 allocated to the Fixed Account, distribution requirements of the Internal under an automatic payment plan). resulting in a credited interest rate of Revenue Code; if permitted by the Prior approval by Jackson National is 0.67% less than the annual credited owner’s state, withdrawals of up to required for aggregate premium interest rate that would apply to the $250,000 from the Fixed Account in payments of over $1,000,000. Fixed Account if the Contract connection with the owner’s terminal
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illness or if the owner needs extended WITHDRAWAL CHARGE—Continued security, other than short-term paper, hospital or nursing home care as [As a percentage of premium payments] under the terms of which the holder, provided in the Contract. upon presentation to the issuer, is 15. The contract value will reflect any Withdrawal Charge entitled to receive approximately his gains or losses attributable to a Contract (%) ...... 8 7 6 0 proportionate share of the issuer’s Enhancement described above. Contract current net assets, or the cash equivalent Enhancements, and any gains or losses 20. The withdrawal charge is waived thereof. attributable to a Contract Enhancement, upon withdrawals to satisfy the 3. Applicants submit that the distributed under the Contract will be minimum distribution requirements of recapture of the Contract Enhancement considered earnings under the Contract the Internal Revenue Code and, to the in the circumstances set forth in the for tax purposes and for purposes of extent permitted by state law, the application would not deprive an owner calculating free withdrawal amounts. withdrawal fee is waived in connection of his or her proportionate share of the with withdrawals of up of $250,000 16. The Contracts have a ‘‘free look’’ issuer’s current net assets. A Contract from the Investment Divisions or the period of twenty days after the owner owner’s interest in the amount of the Guaranteed Fixed Accounts of the receives the Contract. Contract value, Contract Enhancement allocated to his Contracts in connection with the without the deduction for any sales or her Contract value upon receipt of a terminal illness of the owner of a charges, is returned upon exercise of premium payment is not fully vested Contract, or in connection with free look rights by an owner unless state until three complete years following a extended hospital or nursing home care law required the return of premiums premium. Until or unless the amount of for the owner. paid. The Contract Enhancement any Contract Enhancement is vested, recapture charge reduces the amount Applicants’ Legal Analysis Jackson National retains the right and returned. interest in the Contract Enhancement 1. Section 6(c) of the Act authorizes amount, although not in the earnings 17. In addition to the Contract the Commission to exempt any person, Enhancement charges and the Contract attributable to that amount. Thus, security or transaction, or any class or Applicants urge that when Jackson Enhancement recapture charges, the classes of persons, securities or Contracts have the following charges: National recaptures any Contract transactions from the provisions of the Enhancement it is simply retrieving its mortality and expense risk charge of Act and the rules promulgated own assets, and because a Contract 1.50% for the first six years and 1.30% thereunder if and to the extent that such owner’s interest in the Contract thereafter (each as an annual percentage exemption is necessary or appropriate Enhancement is not vested, the Contract of average daily account value); in the public interest and consistent owner has not been deprived of a administration charge of 0.15% (as an with the protection of investors and the proportionate share of the Separate annual percentage of average daily purposes fairly intended by the policy Account’s assets, i.e., a share of the account value); contract maintenance and provisions of the Act. Applicants Separate Account’s assets proportionate charge of $35 per year (waived if request that the Commission pursuant to to the Contract owner’s contract value. contract value is $50,000 or more at the Section 6(c) of the Act grant the 4. In addition, Applicants state that it time that charge is imposed); transfer fee exemptions requested below with would be patently unfair to allow a of $25 for each transfer in excess of 15 respect to the Contracts and any Future Contract owner exercising the free-look in a contract year (for purposes of which Contracts funded by the Separate privilege to retain the Contract dollar cost averaging and rebalancing Account or Other Accounts that are Enhancement amount under a Contract transfer are excluded); a commutation issued by Jackson National and that has been returned for a refund after fee that applies only upon withdrawals underwritten or distributed by the a period of only a few days. If Jackson from income payments for a fixed Distributor or Affiliated Broker-Dealers. National could not recapture the period; and a withdrawal charge that Applicants undertake that Future Contract Enhancement, Applicants applies to total withdrawals, to certain Contracts funded by the Separate claim that individuals could purchase a partial withdrawals, and on the income Account or Other Accounts, in the Contract with no intention of retaining date (the date income payments future, will be substantially similar in it and simply return it for a quick profit. commence) if the income date is within all material respects to the Contracts. Furthermore, Applicants state that the 13 months of the date the Contract was Applicants believe that the requested recapture of the Contract Enhancement issued. exemptions are appropriate in the relating to withdrawals or receiving 18. In addition, the contracts have public interest and consistent with the income payments within the first three certain other charges for various protection of investors and the purposes years of a premium contribution is optional features. These include an fairly intended by the policy and designed to protect Jackson National Earnings Protection Benefit charge of provisions of the Act. against Contract owners not holding the 0.30% (as an annual percentage of daily 2. Subsection (i) of Section 27 of the Contract for a sufficient time period. account value) and an optional death Act provides that Section 27 does not According to Applicants, it would benefit charge of 0.15% (as an annual apply to any registered separate account provide Jackson National with percentage of daily account value). funding variable insurance contracts, or insufficient time to recover the cost of 19. The withdrawal charge for the to the sponsoring insurance company the Contract Enhancement, to its Contracts varies, depending upon the and principal underwriter of such financial detriment. contribution year of the premium account, except as provided in 5. Applicants represent that it is not withdrawn as follows: paragraph (2) of the subsection. administratively feasible to track the Paragraph (2) provides that it shall be Contract Enhancement amount in the WITHDRAWAL CHARGE unlawful for such a separate account or Separate Accounts after the Contract [As a percentage of premium payments] sponsoring insurance company to sell a Enhancement(s) is applied. contract funded by the registered Accordingly, the asset-based charges Completed Years separate account unless such contract is applicable to the Separate Accounts will Since Receipt of a redeemable security. Section 2(a)(32) be assessed against the entire amounts Premium ...... 0123+ defines ‘‘redeemable security’’ as any held in the Separate Accounts,
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including any Contract Enhancement 1 was intended to eliminate or reduce namely, that the exemptions requested amounts. As a result, the aggregate as far as reasonably practicable, namely: are necessary or appropriate in the asset-based charges assessed will be (i) the dilution of the value of public interest and consistent with the higher than those that would be charged outstanding redeemable securities of protection of investors and the purposes if the Contract owner’s Contract value registered investment companies fairly intended by the policy and did not include any Contract through their sale at a price below net provisions of the Act and that, therefore, Enhancement. Jackson National asset value or repurchase at a price the Commission should grant the nonetheless represents that the above it; and (ii) other unfair results, requested order. Contracts’ fees and charges, in the including speculative trading practices. For the Commission, by the Division of aggregate, are reasonable in relation to To effect a recapture of a Contract Investment Management, pursuant to service rendered, the expenses expected Enhancement, Jackson National will delegated authority. to be incurred, and the risks assumed by redeem interests in a Contract owner’s Margaret H. McFarland, Jackson National. Contract value at a price determined on Deputy Secretary. 6. Applicants submit that the the basis of the current net asset value provisions for recapture of any Contract of the Separate Accounts. The amount [FR Doc. 02–16209 Filed 6–26–02; 8:45 am] Enhancement under the Contracts do recaputr4ed will be less than or equal to BILLING CODE 8010–01–M not violate Sections 2(a)(32) and the amount of the Contract 27(i)(2)(A) of the Act. Applicants assert Enhancement that Jackson National paid SECURITIES AND EXCHANGE that the application of a Contract out of its general account assets. COMMISSION Enhancement to premium payments Although Contract owners will be made under the Contracts should not entitled to retain any investment gains Sunshine Act Meetings raise any questions as to compliance by attributable to the Contract Jackson National with the provisions of Enhancement and to bear any Notice is hereby given, pursuant to Section 27(i). However, to avoid any investment losses attributable to the the provisions of the Government in the uncertainty as to full compliance with Contract Enhancement, the amount of Sunshine Act, Pub. L. 94–409, that the the Act, Applicants request an such gains or losses will be determined Securities and Exchange Commission exemption from Sections 2(a)(32) and on the basis of the current net asset will hold the following meetings during 27(i)(2)(A), to the extent deemed values of the Separate Accounts. Thus, the week of July 1, 2002: necessary, to permit the recapture of any no dilution will occur upon the A Closed Meeting will be held on Contract Enhancement under the recapture of the Contract Enhancement. Monday, July 1, 2002, at 1:00 p.m., and circumstances described in the Applicants also submit that the second an Open Meeting will be held on Application, without the loss of relief harm that Rule 22c–1 was designed to Tuesday, July 2, 2002, at 1:00 p.m., in from Section 27 provided by Section address, namely, speculative trading Room 1C30, the William O. Douglas 27(i). practices calculated to take advantage of Room. 7. Section 22(c) of the Act authorizes backward pricing, will not occur as a Commissioner Hunt, as duty officer, the Commission to make rules and result of the recapture of the Contract determined that no earlier notice thereof regulations applicable to registered Enhancement. Applicants assert that, was possible. investment companies and to principal because neither of the harms that Rule Commissioners, Counsel to the underwriters of, and dealers in, the 22c–1 was meant to address is found in Commissioners, the Secretary to the redeemable securities of any registered the recapture of the Contract Commission, and recording secretaries investment company to accomplish the Enhancement, Rule 22c–1 should not will attend the closed meeting. Certain same purposes as contemplated by apply to any Contract Enhancement. staff members who have an interest in Section 22(a). Rule 22c–1 under the Act However, to avoid any uncertainty as to the matters may also be present. prohibits a registered investment full compliance with Rule 22c–1, The General Counsel of the company issuing an redeemable Applicants request an exemption from Commission, or his designee, has security, a person designated in such the provisions of Rule 22c–1 to the certified that, in his opinion, one or issuer’s prospectus as authorized to extent deemed necessary to permit them more of the exemptions set forth in 5 consummate transactions in any such to recapture the Contract Enhancement U.S.C. 552b(c)(3), (5), (7), (9)(B), and security, and a principal underwriter of, under the Contracts. (10) and 17 CFR 200.402(a)(3), (5), (7), or dealer in, such security, from selling, 9. Applicants submit that extending (9)(ii) and (10), permit consideration of redeeming, or repurchasing any such the requested relief to encompass Future the scheduled matters at the closed security except at a price based on the Contracts and Other/Accounts is meeting. current net asset value of such security appropriate in the public interest The subject matter of the Closed which is next computed after receipt of because it promotes competitiveness in Meeting scheduled for Monday, July 1, a tender of such security for redemption the variable annuity market by 2002, will be: or of an order to purchase or sell such eliminating the need to file redundant Formal orders of investigation; security. exemptive applications prior to Institution and settlement of injunctive 8. It is possible that someone might introducing new variable annuity actions; view Jackson National’s recapture of the contracts. Applicants assert that Institution and settlement of Contract Enhancements as resulting in investors would receive no benefit or administrative proceedings of an the redemption of redeemable securities additional protection by requiring enforcement nature; and for a price other than one based on the Applicants to repeatedly seek exemptive Opinion. current net asset value of the Separate relief that would present no issues The subject matter of the Open Accounts. Applicants contend, under the Act not already addressed in Meeting scheduled for Tuesday, July 2, however, that the recapture of the the Application. 2002, will be: Contract Enhancement does not violate Applicants further submit, for the 1. The Commission will consider Rule 22c–1. The recapture of some or all reasons stated herein, that their whether to adopt amendments to Rule of the Contract Enhancement does not exemptive request meets the standards 31–1 under the Securities Exchange Act involve either of the evils that Rule 22c– set out in Section 6(c) of the Act, of 1934 to clarify how to calculate
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assessments that are required to be paid (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 margin account. Before trading stocks in by national securities exchanges and notice is hereby given that on May 30, a margin account, you should carefully national securities associations pursuant 2002, the National Association of review the margin agreement provided to Section 31(d) of the Exchange Act for Securities Dealers, Inc. (‘‘NASD’’ or by your firm. Consult your firm security futures transactions. The ‘‘Association’’), through its wholly regarding any questions or concerns you proposed amendments to Rule 31–1 also owned subsidiary, NASD Regulation, may have with your margin accounts. provide guidance on how to calculate Inc. (‘‘NASD Regulation’’), filed with the When you purchase securities, you fees that are required to be paid by Securities and Exchange Commission may pay for the securities in full or you national securities exchanges and (‘‘SEC’’ or ‘‘Commission’’) the proposed may borrow part of the purchase price national securities associations pursuant rule change as described in Items I, II, from your brokerage firm. If you choose to Sections 31(b) and (c) of the Exchange and III below, which Items have been to borrow funds from your firm, you Act, respectively, for sales of securities prepared by NASD Regulation. The will open a margin account with the that result from the physical settlement Commission is publishing this notice to firm. The securities purchased are the of security futures. solicit comments on the proposed rule firm’s collateral for the loan to you. If 2. The Commission will consider change from interested persons. the securities in your account decline in proposed rules to be issued jointly by value, so does the value of the collateral I. Self-Regulatory Organization’s the Commission and the Department of supporting your loan, and, as a result, Statement of the Terms of Substance of the Treasury implementing section 326 the firm can take action, such as issue the Proposed Rule Change of the Uniting and Strengthening a margin call and/or sell securities or America by Providing Appropriate NASD Regulation is proposing to other assets in any of your accounts Tools Required to Intercept and amend NASD Rules 2341 and 2361 to held with the member, in order to Obstruct Terrorism Act of 2001. Section require the posting of certain investor maintain the required equity in the 326 requires the Secretary of the disclosure statements on members’ Web account. Treasury to jointly prescribe with the sites. Specifically, the proposed rule It is important that you fully Commission regulations that, at a change would amend: (1) Rule 2341 understand the risks involved in trading minimum, require broker-dealers and (Margin Disclosure Statement) to require securities on margin. These risks members that permit customers to open include the following: mutual funds to implement reasonable • procedures to (1) verify the identity of accounts on-line or to engage in You can lose more funds than you any person seeking to open an account, transactions in securities on-line to post deposit in the margin account. A to the extent reasonable and practicable, the margin disclosure statement on their decline in the value of securities that are purchased on margin may require you to (2) maintain records of the information Web sites; and (2) Rule 2361 (Day- provide additional funds to the firm that used to verify the person’s identity, and Trading Risk Disclosure Statement) to has made the loan to avoid the forced (3) determine whether the person require members that promote a day- sale of those securities or other appears on any lists of known or trading strategy to post the day-trading securities or assets in your account(s). suspected terrorists or terrorist risk disclosure statement on their Web • sites. Below is the text of the proposed The firm can force the sale of organizations provided to the broker- securities or other assets in your dealer or mutual fund by any rule change. Proposed new language is in italics; proposed deletions are in account(s). If the equity in your account government agency. falls below the maintenance margin At times, changes in Commission brackets. requirements, or the firm’s higher priorities require alterations in the 2341. Margin Disclosure Statement ‘‘house’’ requirements, the firm can sell scheduling of meeting items. For further the securities or other assets in any of information and to ascertain what, if (a) No member shall open a margin your account held at the firm to cover any, matters have been added, deleted account, as specified in Regulation T of the margin deficiency. You also will be or postponed, please contact: The Office the Board of Governors of the Federal responsible for any short fall in the of the Secretary at (202) 942–7070. Reserve System, for or on behalf of a non-institutional customer, unless, prior account after such a sale. • Dated: June 25, 2002. to or at the time of opening the account, The firm can sell your securities or Margaret H. McFarland, the member has furnished to the other assets without contacting you. Deputy Secretary. customer, individually, in writing or Some investors mistakenly believe that [FR Doc. 02–16345 Filed 6–25–02; 11:58 am] electronically, and in a separate a firm must contact them for a margin BILLING CODE 8010–01–P document, the [following] margin call to be valid, and that the firm cannot disclosure statement[:] specified in this liquidate securities or other assets in paragraph (a). In addition, any member their accounts to meet the call unless SECURITIES AND EXCHANGE that permits non-institutional customers the firm has contacted them first. This COMMISSION either to open accounts on-line or to is not the case. Most firms will attempt engage in transactions in securities on- to notify their customers of margin calls, [Release No. 34–46097; File No. SR–NASD– but they are not required to do so. 2002–69] line must post such margin disclosure statement on the member’s Web site in However, even if a firm has contacted a Self-Regulatory Organizations; Notice a clear and conspicuous manner. customer and provided a specific date of Filing of Proposed Rule Change by by which the customer can meet a Margin Disclosure Statement National Association of Securities margin call, the firm can still take Dealers, Inc. Relating to Posting of Your brokerage firm is furnishing this necessary steps to protect its financial Margin Disclosure and Day-Trading document to you to provide some basic interests, including immediately selling Risk Disclosure Statements on Web facts about purchasing securities on the securities without notice to the Sites margin, and to alert you to the risks customer. involved with trading securities in a • You are not entitled to choose June 20, 2002. which securities or other assets in your Pursuant to Section 19(b)(1) of the 1 15 U.S.C. 78s(b)(1). account(s) are liquidated or sold to meet Securities Exchange Act of 1934 2 17 CFR 240.19b–4. a margin call. Because the securities are
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collateral for the margin loan, the firm funds that you use for day-trading. In the funds you originally placed at risk. has the right to decide which security to particular, you should not fund day- A decline in the value of the securities sell in order to protect its interests. trading activities with retirement that are purchased may require you to • The firm can increase its ‘‘house’’ savings, student loans, second provide additional funds to the firm to maintenance margin requirements at mortgages, emergency funds, funds set avoid the forced sale of those securities any time and is not required to provide aside for purposes such as education or or other securities in your account. you advance written notice. These home ownership, or funds required to Short selling as part of your day-trading changes in firm policy often take effect meet your living expenses. Further, strategy also may lead to extraordinary immediately and may result in the certain evidence indicates that an losses, because you may have to issuance of a maintenance margin call. investment of less than $50,000 will purchase a stock at a very high price in Your failure to satisfy the call may cause significantly impair the ability of a day order to cover a short position. the member to liquidate or sell trader to make a profit. Of course, an Potential Registration Requirements. securities in your account(s). investment of $50,000 or more will in Persons providing investment advice for • You are not entitled to an extension no way guarantee success. others or managing securities accounts of time on a margin call. While an Be cautious of claims of large profits for others may need to register as either extension of time to meet margin from day-trading. You should be wary an ‘‘Investment Advisor’’ under the requirements may be available to of advertisements or other statements Investment Advisors Act of 1940 or as customers under certain conditions, a that emphasize the potential for large a ‘‘Broker’’ or ‘‘Dealer’’ under the customer does not have a right to the profits in day-trading. Day-trading can Securities Exchange Act of 1934. Such extension. also lead to large and immediate activities may also trigger state financial losses. registration requirements. * * * * * Day-trading requires knowledge of (b) In lieu of providing the disclosure (c) In lieu of providing the disclosures securities markets. Day-trading requires statement specified in paragraph (a), a specified in paragraphs (a) and (b), a in-depth knowledge of the securities member that is promoting a day-trading member may provide to the customer markets and trading techniques and strategy may provide to the customer, and, to the extent required under strategies. In attempting to profit individually, in writing or paragraph (a) post on its Web site, an through day-trading, you must compete electronically, prior to opening the alternative disclosure statement, with professional, licensed traders account, and post on its Web site, an provided that the alternative disclosures employed by securities firms. You alternative disclosure statement, shall be substantially similar to the should have appropriate experience provided that: disclosures specified in paragraphs (a) before engaging in day-trading. (1) The alternative disclosure and (b). Day-trading requires knowledge of a statement shall be substantially similar * * * * * firm’s operations. You should be to the disclosure statement specified in 2361. Day-Trading Risk Disclosure familiar with a securities firm’s business paragraph (a); and practices, including the operation of the (2) The alternative disclosure Statement firm’s order execution systems and statement shall be filed with the (a) Except as provided in paragraph procedures. Under certain market Association’s Advertising Department (b), no member that is promoting a day- conditions, you may find it difficult or (Department) for review at least 10 days trading strategy, directly or indirectly, impossible to liquidate a position prior to use (or such shorter period as shall open an account for or on behalf quickly at a reasonable price. This can the Department may allow in particular of a non-institutional customer unless, occur, for example, when the market for circumstances) for approval and, if prior to opening the account, the a stock suddenly drops, or if trading is changes are recommended by the member has furnished to each customer, halted due to recent news events or Association, shall be withheld from use individually, in writing or unusual trading activity. The more until any changes specified by the electronically, the [following] disclosure volatile a stock is, the greater the Association have been made or, if statement[:] specified in this paragraph likelihood that problems may be expressly disapproved, until the (a). In addition, any member that is encountered in executing a transaction. alternative disclosure statement has promoting a day-trading strategy, In addition to normal market risks, you been refiled for, and has received, directly or indirectly, must post such may experience losses due to system Association approval. The member must disclosure statement on the member’s failures. provide with each filing the anticipated Web site in a clear and conspicuous Day-trading will generate substantial date of first use. manner. commissions, even if the per trade cost * * * * * is low. Day-trading involves aggressive Day-Trading Risk Disclosure Statement trading, and generally you will pay II. Self-Regulatory Organization’s You should consider the following commissions on each trade. The total Statement of the Purpose of, and points before engaging in a day-trading daily commissions that you pay on your Statutory Basis for, the Proposed Rule strategy. For purposes of this notice, a trades will add to your losses or Change ‘‘day-trading strategy’’ means an overall significantly reduce your earnings. For In its filing with the Commission, trading strategy characterized by the instance, assuming that a trade costs $16 NASD Regulation included statements regular transmission by a customer of and an average of 29 transactions are concerning the purpose of and basis for intra-day orders to effect both purchase conducted per day, an investor would the proposed rule change and discussed and sale transactions in the same need to generate an annual profit of any comments it received on the security or securities. $111,360 just to cover commission proposed rule change. The text of these Day-trading can be extremely risky. expenses. statements may be examined at the Day-trading generally is not appropriate Day-trading on margin or short places specified in Item IV below. for someone of limited resources and selling may result in losses beyond your NASD Regulation has prepared limited investment or trading initial investment. When you day trade summaries, set forth in Sections A, B, experience and low risk tolerance. You with funds borrowed from a firm or and C below, of the most significant should be prepared to lose all of the someone else, you can lose more than aspects of such statements.
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A. Self-Regulatory Organization’s Posting of Disclosure Statements on While many firms currently post the Statement of the Purpose of, and Web Sites margin and day-trading risk disclosure Statutory Basis for, the Proposed Rule While Rules 2341 and 2361 currently statements on their Web sites on a Change require that the disclosure statements be voluntary basis, NASD Regulation believes that the investing public could 1. Purpose delivered individually to each covered customer, either in writing or further benefit from the information Introduction electronically, the Rules do not require contained in the statements if additional on-line and day-trading firms were to Rules 2341 and 2361 were developed firms to post the statements on their post them on their Web sites. to provide investors with additional and Web sites. Rather, in developing Rules Accordingly, NASD Regulation is specific risk disclosures concerning 2341 and 2361, NASD Regulation proposing this rule change which will margin and day-trading, respectively. focused on ensuring that each address the GAO’s recommendations Rule 2341, which was adopted in April individual investor received the and enable a broader array of persons to 2001,3 is designed to provide investors required risk disclosure statements. review the information regarding margin with information concerning the NASD Regulation believed that requirements and day-trading risks operation and risks associated with mandating specific delivery of the risk disclosure statements would be the most contained in the mandated disclosure margin trading. NASD Regulation statements. believed that investors’ misconceptions effective means of ensuring that customers received the required Consistent with the general about margin requirements, particularly recommendations raised in the GAO with respect to maintenance margin, disclosures. In 2001, following the adoption of Reports, the proposed rule change could cause investors to underestimate would amend: (1) Rule 2341 to require the risks of margin trading and to Rule 2341 and Rule 2361, the General Accounting Office (‘‘GAO’’) issued a member firms that permit customers to misunderstand the operation of and open accounts on-line or to engage in reasons for margin calls. Accordingly, report that discusses, among other things, actions taken by securities transactions in securities on-line to post NASD Regulation adopted Rule 2341 the margin disclosure statement on their requiring members to deliver to non- industry regulators to address on-line trading issues.5 The 2001 GAO Report Web sites; and (2) Rule 2361 to require institutional customers a specified member firms that promote a day- disclosure statement that discusses the recognized that Rules 2341 and 2361 require broker/dealers to furnish trading strategy, directly or indirectly, to operation of margin accounts and the post the day-trading risk disclosure risks associated with trading on margin. investors with certain key investor protection disclosures. It also noted that statement on their Web sites. The firms Each member is required to deliver the would be required to post the margin disclosure statement to the the margin disclosure statement required under Rule 2341 provides statements specified in Rules 2341 or customer prior to or at the opening of 2361, as applicable, or the alternate a margin account. Rule 2341 also substantial information that is very helpful to investors to understand the statements permitted by the Rules. requires that the margin disclosure Under the proposal, the disclosure statement, or an abbreviated version of risks of trading on margin. The GAO expressed concern, however, that while statements must be displayed on the the statement as set forth in the Rule, be Web site in a ‘‘clear and conspicuous provided to margin customers annually. customers covered by Rules 2341 and 2361 were receiving the margin and manner,’’ or in a clearly identified Rule 2361, which was adopted in July day-trading risk disclosure statements, location that is readily accessible to 2000,4 is designed to provide investors investors. While compliance with the additional benefits could be achieved if with information concerning unique ‘‘clear and conspicuous’’ standard the disclosures also were provided on- risks arising from day-trading activities. would be based on the facts and line, noting that many investors who Rule 2361 requires firms promoting a circumstances surrounding each trade on-line may prefer to review day-trading strategy to provide their member’s Web site, NASD Regulation’s information in that medium and that a non-institutional customers with a day- primary concern is that firms not post Web site posing also would make the trading risk disclosure statement prior the disclosure statements in a remote information available to other on-line to opening an account. The day-trading place on their Web sites, where investors who are thinking about risk disclosure statement discusses investors or potential investors would engaging in the activities covered by the several factors that a customer should be unlikely to locate them. disclosure statements. In this regard, the consider before engaging in day-trading, Importantly, the proposed rule change 2001 GAO Report recommended that including that the customer should be does not affect a member firm’s existing the SEC take steps to ensure broker/ prepared to lose all of the funds that he requirements under Rules 2341 and dealers disclose additional information or she uses for day-trading and that day- 2361 to deliver individually to each on their Web sites regarding, among trading on margin may result in losses customer covered by the Rules, either in other things, margin requirements and beyond the initial investment. writing or electronically, the disclosure trading risks.6 Both Rules further permit member statements mandated under the Rules. In addition, while NASD Regulation is firms to develop an alternative 5 See On-Line Trading, Investor Protections Have disclosure statement substantially Improved but Continued Attention is Needed, not at this time proposing to require on- similar to the ones provided in the Report to Congressional Requesters, GAO, 01–858 line firms that do not promote a day- Rules. In the case of Rule 2361, the (July 2001) (the ‘‘2001 GAO Report’’). The 2001 trading strategy as defined in Rule 2361 GAO Report is a follow-up to a GAO report issued alternate day-trading risk disclosure to post the day-trading risk disclosure in 2000 (On-Line Trading, Better Investor Protection statement in addition to the margin statement must be filed with, and Information Needed on Brokers’ Web Sites, Report approved by, NASD Regulation’s to Congressional Requesters, GAO, General disclosure statement on their Web sites, Advertising Department. Government Division, 00–43 (May 2000) (the ‘‘2000 NASD Regulation encourages all on-line GAO Report’’)) that examined how on-line broker/ dealers addressed investor protection issues. risks they are taking or the rules and procedures for 3 See Securities Exchange Act Release No. 44223 6 Similarly, noting that the SEC has determined trading, the 2000 GAO Report also recommended (April 26, 2001), 66 FR 22274 (May 3, 2001). from customer complaints it has received that many that the SEC ensure that broker/dealers with on-line 4 See Securities Exchange Act Release No. 43021 investors who traded on-line did not understand trading systems include certain investor protection (July 10, 2000), 65 FR 44408 (July 17, 2000). margin requirements and may not understand the information on their Web sites.
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firms to do so. NASD Regulation rule change, along with a brief SR–NASD–2002–69 and should be believes that on-line traders may benefit description and text of the proposed submitted by July 18, 2002. from the information provided in the rule change, at least five business days For the Commission, by the Division of day-trading risk disclosure statement prior to the date of filing of the Market Regulation, pursuant to delegated regardless of whether the on-line firm proposed rule change, or such shorter authority.13 whose Web site the trader is visiting or time as designated by the Commission, Margaret H. McFarland, using promotes a day-trading strategy. the proposed rule change has become Deputy Secretary. effective pursuant to Section 19(b)(3)(A) [FR Doc. 02–16257 Filed 6–26–02; 8:45 am] 2. Statutory Basis of the Act 9 thereunder.10 NASD Regulation believes that the A proposed rule change filed under BILLING CODE 8010–01–P proposed rule change is consistent with Rule 19b–4(f)(6) 11 requires that a self- the provisions of Section 15A(b)(6) of regulatory organization give the SECURITIES AND EXCHANGE the Act, which requires, among other Commission written notice of its intent COMMISSION things, that the Association’s rules must to file the proposed rule change, along be designed to prevent fraudulent and with a brief description and text of the [Release No. 34–46096; File No. SR–PCX– manipulative acts and practices, to proposed rule change, at least five 2001–17] promote just and equitable principles of business days prior to the date of filing Self-Regulatory Organizations; Notice trade, and, in general, to protect the proposed rule change. However, of Filing of Proposed Rule Change and 12 investors and the public interest. NASD Rule 19b–4(f)(6)(iii) permits the Amendment No. 1 Thereto by the Regulation believes that the proposed Commission to designate a shorter time. Pacific Exchange, Inc. Relating to rule change requiring certain member NASD Regulation seeks to have the five- Auto-Ex Price Improvement Incentive firms to post the margin disclosure and business-day pre-filing requirement for Market Makers day-trading risk disclosure statements waived with respect to the proposed on their Web sites will help protect rule change. The Commission has June 20, 2002. investors and the public interest in a determined to waive the five-business- Pursuant to section 19(b)(1) of the trading environment where increasing day pre-filing requirement. The Securities Exchange Act of 1934 numbers of investors are trading on-line Commission notes that NASD proposes (‘‘Act’’),1 and Rule 19b–4 thereunder,2 or accessing broker/dealers through Web to make the proposed rule change notice is hereby given that on January sites. operative on July 1, 2002. 16, 2002, the Pacific Exchange, Inc. At any time within 60 days of this (‘‘PCX’’ or ‘‘Exchange’’) filed with the B. Self-Regulatory Organization’s filing, the Commission may summarily Securities and Exchange Commission Statement on Burden on Competition abrogate this proposal if it appears to (‘‘Commission’’) the proposed rule NASD Regulation does not believe the Commission that such action is change as described in Items I, II, and that the proposed rule change will result necessary or appropriate in the public III below, which Items have been in any burden on competition that is not interest, for the protection of investors, prepared by the Exchange. On May 3, necessary or appropriate in furtherance or otherwise in furtherance of the 2002, the Exchange filed Amendment of the purposes of the Act. purposes of the Act. No. 1 to the proposed rule change.3 On June 14, 2002, the Exchange filed C. Self-Regulatory Organization’s IV. Solicitation of Comments Amendment No. 2 to the proposed rule Statement on Comments on the Interested persons are invited to change.4 The Commission is publishing Proposed Rule Change Received from submit written data, views, and this notice to solicit comments on the Members, Participants, or Others arguments concerning the foregoing. proposed rule change, as amended, from Written comments were neither Persons making written submissions interested persons. solicited nor received. should file six copies thereof with the Secretary, Securities and Exchange I. Self-Regulatory Organization’s III. Date of Effectiveness of the Commission, 450 Fifth Street, NW., Statement of the Terms of Substance of Proposed Rule Change and Timing for Washington, DC 20549. Copies of the the Proposed Rule Change Commission Action submission, all subsequent The PCX proposes a rule change that The proposed rule change has been amendments, all written statements is intended to encourage competition filed by the Association as a ‘‘non- with respect to the proposed rule among Market Makers for trades on its controversial’’ rule change under change that are filed with the automatic execution system for options Section 19(b)(3)(A) of the Act,7 and Rule Commission, and all written (‘‘Auto-Ex’’) by rewarding individual 19b–4(f)(6) thereunder.8 Because the communications relating to the foregoing proposed rule change: (1) proposed rule change between the 13 17 CFR 200.30–3(a)(12). Does not significantly affect the Commission and any person, other than 1 15 U.S.C. 78s(b)(1). protection of investors or the public those that may be withheld from the 2 17 CFR 240.19b–4. interest; (2) does not impose any 3 See letter from Cindy L. Sink, Senior Attorney, public in accordance with the Regulatory Policy, PCX, to Deborah L. Flynn, significant burden on competition; and provisions of 5 U.S.C. 552, will be Assistant Director, Division of Market Regulation (3) does not become operative for 30 available for inspection and copying in (‘‘Division’’), Commission, dated May 2, 2002 days after the date of filing, or such the Commission’s Public Reference (‘‘Amendment No. 1’’). Amendment No. 1 replaced shorter time as the Commission may in its entirety the proposed rule text and the Room. Copies of such filing will also be Exchange’s statement regarding the proposed rule designate if consistent with the available for inspection and copying at change. protection of investors and the public the principal office of the NASD. All 4 See letter from Michael D. Pierson, Vice interest, provided that NASD Regulation submissions should refer to File No. President, Regulatory Policy, PCX, to Steven G. has given the Commission written Johnston, Special Counsel, Division, Commission, dated June 13, 2002 (‘‘Amendment No. 2’’). notice of its intent to file the proposed 9 15 U.S.C. 78(b)(3)(A). Amendment No. 2 deleted language from Rule 10 17 CFR 240.19b–4(f)(6). 6.87(k)(2)(c)(ii) and Commentary .04 to Rule 6.87 to 7 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b–4(f)(6). reflect changes to PCX’s Rules approved by the 8 17 CFR 240.19b–4(f)(6). 12 17 CFR 240.19b–4(f)(6)(iii). Commission.
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Market Makers who improve the (iv) If the LMM matches the improved (3) Interim Price Improvement Incentive disseminated market. quote via Auto-Quote or QTX after one Program The text of the proposed rule change second, then inbound orders will be (A) A Market Maker who improves the is set forth below. New text is italicized. assigned pursuant to Rule 6.87(k)(1), but disseminated quote will receive Priority Rule 6.87 only after Market Makers with Priority Status as provided below. * * * * * Status have first been satisfied. (i) To receive Priority Status, a Market (k) (D) The following provisions apply if Maker must improve the disseminated * * * * * the improved quote is further improved: quote via open outcry by a size that is at least the lesser of ten contracts or the (2) Auto-Ex Price Improvement (i) If the improved quote is improved disseminated size. Incentive Program by Auto-Quote or QTX, then inbound (ii) The improved quote will be keyed (A) A Market Maker who improves the orders will be assigned pursuant to Rule into POETS by the Order Book Official disseminated quote will be given 6.87(k)(1). (‘‘OBO’’) and will be disseminated via Priority Status on the Auto-Ex System as (ii) If a Market Maker improves the OPRA. provided below. improved quote, the Market Maker who (iii) When a Market Maker improves (i) To receive priority, a Market Maker subsequently improved the quote will be the quote in a particular series, orders must improve the disseminated market given Priority Status. in that series will be routed to Floor Broker Hand Held Terminals for by inputting the improved quote into a (E) Order Allocation Process. Market Maker Hand Held Terminal and execution. However, if the LMM has set simultaneously by vocalizing the (i) A Market Maker with Priority Auto-Ex to execute incoming orders at improved bid or offer. The improved Status who quotes alone at the best the NBBO pursuant to Rule 6.87(i), and market will be disseminated via the price will be allocated 100% of the a Market Maker has improved the PCX Options Price Reporting Authority incoming orders up to the size of the BBO but not the NBBO, then incoming (‘‘OPRA’’). Market Maker’s quote. orders may be executed automatically at the NBBO pursuant to Rule 6.87(k)(1). If (ii) The improved quote must be in a (ii) If more than one Market Maker incoming orders are not automatically size that is at least the lesser of ten improves the quote, then such Market contracts or the disseminated size. executed at the NBBO in such Makers will be allocated contracts as circumstances (e.g., because they exceed (iii) The Market Maker who improved follows: the disseminated market must remain in a size parameter), then they will be re- the crowd and will be responsible for (a) Market Makers with Priority Status routed to a Floor Broker Hand-Held filling orders in the crowd until that will be on parity and will be allocated Terminal for execution. When that Market Maker no longer has priority. 40% of the next incoming order or occurs, the Market Maker who improved (iv) If orders are re-routed to Floor orders on an equal distribution basis, up the PCX BBO (but not the NBBO) will Broker Hand-Held Terminals for to their quoted sizes. The 40% have Priority Status at the PCX BBO execution pursuant to Commentary .07, allocation will be effected only after all price. If the PCX BBO becomes the Floor Brokers will identify the improved public customer orders at the same NBBO, that Market Maker will have quote by an alert in the system and will price have first been executed. Orders Priority Status. (iv) Floor Brokers will identify the use their best efforts to assure that will continue to be allocated in this improved quote by an alert in the Market Makers with Priority Status manner until the total number of system and must use their best efforts to receive allocations of contracts as contracts allocated pursuant to this identify the Market Makers with Priority provided in subsection (E), below. subsection equals or exceeds 20 Status and assure that such Market (B) The Market Maker’s priority for contracts, at which time Priority Status Makers receive allocations of contracts both automatic and manual executions will no longer apply. For example, as provided in this subsection (E), will continue until one of the following Priority Status will no longer apply once below. occurs: a Market Maker has been allocated 40 (v) The Market Maker who improved (i) the Market Maker’s commitment contracts based on an allocation of 40% the disseminated market must remain in size is filled; of a single 100-contract order, pursuant the trading crowd and will be (ii) the Market Maker’s better price is to this subsection. Likewise, Priority responsible for filling orders in the improved; or Status will no longer apply once a crowd until that Market Maker no longer (iii) the Market Maker removes the bid Market Maker has been allocated a total has priority. or offer that improved the disseminated of 24 contracts based on three (B) The Market Maker’s Priority Status quote. subsequent allocations of 8 contracts, will continue until one of the following (C) The following provisions apply if each of which are based on allocations occurs: the improved quote is matched: of 40% of 20 contracts. (i) the Market Maker’s commitment (i) Market Makers who match the (b) All other outstanding bids and size is filled; improved quote immediately (i.e., offers at the improved price, as well as (ii) the Market Maker’s better price is within one second) will be deemed to any bids and offers representing the improved; or have Priority Status and will be remaining sizes of Market Maker quotes (iii) the Market Maker removes the bid allocated contracts as provided in with Priority Status, will then receive or offer that improved the disseminated subsection (E), below. allocations on a size pro rata basis. quote; (ii) Market Makers who match the (C) The following provisions apply if improved market, but who do not match (c) LMMs quoting at the improved the improved quote is matched: it immediately, will not be given Priority price will be eligible to receive (i) Market Makers who match the Status. guaranteed participation in connection improved quote immediately (i.e., (iii) An incoming order in a size with allocations made pursuant to within one second) will be deemed to greater than the size of the market subsection (b), above, but not for have Priority Status and will be improvement, including any matching allocations made pursuant to subsection allocated contracts as provided in quotes, will receive split price execution. (a), above. subsection (E) below.
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(ii) Market Makers who match the with allocations made pursuant to statements concerning the purpose of improved market, but who do not match subsection (b), above, but not for and basis for the proposed rule change it immediately, will not be given Priority allocations made pursuant to subsection and discussed any comments it received Status. (a), above. on the proposed rule change. The text (iii) An incoming order in a size of these statements may be examined at Commentary greater than the size of the market the places specified in Item IV below. improvement, including any matching * * * * * The Exchange has prepared summaries, quotes, will receive split price execution .02 For purposes of Rules 6.87(k)(2) set forth in sections A, B, and C below, in the trading crowd. and 6.87(k)(3), references to Market of the most significant aspects of such (iv) If the LMM matches the improved Makers include Lead Market Makers. statements. quote via Auto-Quote or QTX after one .03 Rules 6.87(k)(2) and 6.87(k)(3) A. Self-Regulatory Organization’s second, then inbound orders will be apply to all classes and series of option Statement of the Purpose of, and assigned pursuant to 6.87(k)(1), but only contracts traded on the Exchange. Statutory Basis for, the Proposed Rule after Market Makers with Priority Status .04 The Auto-Ex guaranteed size is Change have first been satisfied. the size the LMM has guaranteed to the (D) The following provisions apply if Options Allocation Committee. 1. Purpose .05 Split price execution refers to an the improved quote is further improved: Background. The proposed rule (i) If a Market Maker improves the execution of a trade where some of the contracts in the order will receive an change is intended to substantially improved quote, the Market Maker who enhance incentives for PCX Market subsequently improved the quote will be execution at the best available price, and the remainder of the contracts in Makers to quote competitively and given Priority Status. substantially reduce disincentives for (ii) If the improved quote is improved the order will be executed at the next market participants to act by Auto-Quote or QTX, then inbound best available price. Under Rule competitively.5 Currently, changes to orders will be assigned pursuant to 6.87(k)(2), an incoming order will be the PCX’s disseminated quote are 6.87(k)(1). filled at the improved price until the effected either by Auto-Quote, by the (E) Order Allocation Process improved quote and quotes matching proprietary quote feed (‘‘QTX’’) of an (i) A Market Maker with Priority the improved quote have been satisfied. Lead Market Maker (‘‘LLM’’), or by Status who quotes alone at the best The balance of the incoming order will manual input. First, in Pacific Options price will be allocated 100% of the be executed at the next best price. In the Exchange Trading System (‘‘POETS’’) 6 incoming orders up to the size of that interim program, the balance of the or QTX processing, Auto-Quote Market Maker’s quote. order will be executed in the trading parameters are established and (ii) If more than one Market Maker crowd. In the permanent program, split maintained by the LMM. As the price of improves the quote, then such Market price execution will be automated. the underlying security changes, the Makers will be allocated contracts as .06 Rule 6.87(k)(3), the Interim Price system recalculates the bid/ask prices of follows: Improvement Incentive Program, will each option series. This recalculated (a) Market Makers with Priority Status become operative on or before July 15, bid/ask price establishes the published will be on parity and will be allocated 2002 and will continue to apply until price for inbound orders and defines the 40% of the next incoming order or Rule 6.87(k)(2) becomes operative. Rule execution price for trades effected orders on an equal distribution basis, up 6.87(k)(2) will be rolled out gradually through the automatic execution system. to their quoted sizes. The 40% until such time that it is implemented allocation will be effected only after all floor wide. The PCX estimates that Rule 5 The PCX’s settlement with the Commission public customer orders at the same 6.87(k)(2) will commence operation in requires the PCX, among other things, to adopt rules price have first been executed. Orders December 2002 and will become concerning its automated quotation and execution will continue to be allocated in this completely operative by the third systems which substantially enhance incentives to manner until the total number of quarter of 2003. At that time, Rule quote competitively and substantially reduce disincentives for market participants to act contracts allocated pursuant to this 6.87(k)(2) will supercede Rule 6.87(k)(3). competitively. See Securities Exchange Act Release subsection equals or exceeds 20 .07 POETS re-routes orders to Floor- No. 43268 (September 11, 2000), Administrative contracts, at which time Priority Status Broker Hand-Held terminals if: (i) the Proceeding File No. 3–10282. The Exchange notes will no longer apply. For example, inbound order exceeds the established that the Commission previously has approved a PCX rule change proposal that the Exchange Priority Status will no longer apply once size parameter for automatic execution; believes serves to encourage its Market Makers to a Marker Maker has been allocated 40 (ii) the order is for the account of a quote more competitively and to be rewarded with contracts based on an allocation of 40% broker-dealer and the Exchange has not trades executed on Auto-Ex. See Securities of a single 100-contract order, pursuant designated broker-dealer orders as Exchange Act Release No. 44847 (September 25, 2001), 66 FR 50237 (October 2, 2001) (File No. SR to this subsection. Likewise, Priority eligible for automatic execution in the –PCX–2001–05) (Accelerated approval of proposal Status will no longer apply once a issue; (iii) the Auto-Ex system has been to assign orders to Market Makers who are logged- Market Maker has been allocated a total suspended pursuant to Rule 6.87(i); (iv) on Auto-Ex, based on the percentage of their in- of 24 contracts based on three the NBBO is crossed or locked and the person agency contracts traded in a particular issue.). Pursuant to the approved rule change, Auto- subsequent allocations of 8 contracts, Auto-Ex system has been set to re-route Ex orders are assigned to Market Makers according each of which are based on allocations orders pursuant to Rule 6.87(j); or (v) to the number of in-person agency contracts they of 40% of 20 contracts. the order would otherwise receive an have traded (excluding Auto-Ex contracts traded) in (b) All other outstanding bids and execution at a price that is inferior to a particular issue compared to all of the Market offers at the improved price, as well as Maker in-person contracts (excluding Auto-Ex the NBBO. contracts) during a review period. The review any bids and offers representing the II. Self-Regulatory Organization’s period is determined by the Options Floor Trading remaining sizes of Market Maker quotes Committee and may be no longer than two weeks. with Priority Status, will then receive Statement of the Purpose of, and 6 POETS is the Exchange’s automated trading allocations on a size pro rata basis. Statutory Basis for, the Proposed Rule system comprised of an options order routing Change system, an automatic execution system (‘‘Auto-Ex’’), (c) LMMs quoting at the improved an on-line limit order book system and an price will be eligible to receive In its filing with the Commission, the automatic market quote update system (‘‘Auto- guaranteed participation in connection self-regulatory organization included Quote’’).
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Second, the bid and ask prices for who improved the disseminated market QTX after one second, then inbound options of a particular series may also would be required to remain in the orders would be assigned pursuant to be changed manually by an exchange or crowd and would be responsible for PCX Rule 6.87(k)(1),14 but only after LMM employee, who enters new quotes filling orders in the crowd until that Market Makers with Priority Status have of floor members that are vocalized in Market Maker no longer has priority. first been satisfied.15 the trading crowd by public outcry. If orders are re-routed to Floor Broker The following provisions would apply Currently, inbound electronic orders Hand-Held Terminals for execution,12 if the improved quote is further that are executed on Auto-Ex are Floor Brokers would identify the improved: If the improved quote is assigned to the Market Makers who are improved quote by an alert in the improved by Auto-Quote or QTX, then logged on to Auto-Ex by rotation.7 The system and would use their best efforts inbound orders would be assigned number of contracts assigned to Market to assure that Market Makers with pursuant to PCX Rule 6.87(k)(1).16 If a Makers on Auto-Ex is based upon the Priority Status receive allocations of Market Maker improves the improved number of their in-person agency contracts as provided in proposed PCX quote, the Market Maker who contracts traded in an issue (excluding Rule 6.87(k)(2)(E), setting forth the order subsequently improved the quote would Auto-Ex contracts traded) compared to allocation process. be given Priority Status. all of the Market Maker in-person The Market Maker’s priority for both Order Allocation Process. Proposed agency contracts traded in the issue automatic and manual executions PCX Rule 6.87(k)(2)(E) provides that a (excluding Auto-Ex contracts traded) would continue until one of the Market Maker with Priority Status who 8 during a review period. following occurs: the Market Maker’s quotes alone at the best price would be Auto-Ex Price Improvement Incentive commitment size is filled; the Market allocated 100% of the incoming orders Program. The proposed rule change Maker’s better price is improved; or the up to the size of the Market Maker’s provides an incentive for Market Market Maker removes the bid or offer 9 quote. However, if more than one Makers to improve the disseminated that improved the disseminated quote. Market Maker improves the quote, then prices on the PCX by assigning priority The following provisions would apply such Market Makers would be allocated on Auto-Ex to the Market Maker who if the improved quote is matched: 10 contracts as follows: First, under improved the disseminated quote. A Market Makers who match the improved subsection (E)(ii)(a) to proposed PCX Market Maker who improves the quote immediately (i.e., within one Rule 6.87(k)(2), Market Makers with disseminated quote would be given second) would be deemed to have Priority Status would be on parity and Priority Status on the Auto-Ex System as Priority Status and would be allocated would be allocated 40% of the next follows. contracts as provided in proposed PCX incoming order or orders on an equal To receive priority, a Market Maker Rule 6.87(k)(2)(E). Market Makers who distribution basis, up to their quoted would be required to improve the match the improved market, but who do sizes. The 40% allocation would be disseminated market by inputting the not match it immediately, would not be effected only after all public customer improved quote into a Market Maker given Priority Status. An incoming order orders at the same price have first been Hand Held Terminal and in a size greater than the size of the executed. Orders would continue to be simultaneously by vocalizing the market improvement, including any allocated in this manner until the total improved bid or offer. The improved matching quotes, would receive split number of contracts allocated pursuant market would be disseminated via the 13 price execution. If the LMM matches to this subsection equals or exceeds 20 Options Price Reporting Authority the improved quote via Auto-Quote or contracts, at which time Priority Status (‘‘OPRA’’). The improved quote would would no longer apply.17 be required to be in a size that is at least conversation between Michael D. Pierson, Vice the lesser of ten contracts or the President, PCX, and Steven G. Johnston, Special 14 disseminated size.11 The Market Maker Counsel, Division, Commission, on June 6, 2002. See supra note 7. An exception would be made 12 As noted in proposed Commentary .07, POETS in the case where incoming orders would be will re-route orders to Floor-Broker Hand-Held assigned to Floor-Broker Hand-Held Terminals 7 PCX Rule 6.87(k)(1) governs the rotational terminals if: (i) the inbound order exceeds the pursuant to proposed Commentary .07 (See supra assignment of Auto-Ex orders. See supra note 5. established size parameter for automatic execution; note 12). In that situation, Market Makers with 8 See supra note 5. (ii) the order is for the account of a broker-dealer Priority Status would retain priority at the 9 For purposes of this proposal, references to and the Exchange has not designated broker-dealer improved price until filled, but additional incoming Market Makers include Lead Market Makers. See orders as eligible for automatic execution in the orders would be allocated to crowd members proposed Commentary .02. issue; (iii) the Auto-Ex system has been suspended consistent with current PCX rules, including rules 10 The proposed rule changes set forth in this pursuant to PCX Rule 6.87(i), which permits the governing open outcry trading. Telephone filing cover all classes and series of option contracts Options Floor Trading Committee to designate conversation between Michael D. Pierson, Vice traded on the Exchange. See proposed Commentary orders in certain option issues for default manual President, PCX, and Steven G. Johnston, Special .03. representation in the trading crowd if an order Counsel, Division, Commission, on May 9, 2002. 11 Under PCX Rule 6.86(c)(1)(A), the Exchange would be executed at a price more than one trading 15 If the LMM matches the improved quote via may, under certain circumstances, disseminate a increment away from the PCX market; (iv) the Auto-Quote or QTX within one second, then no size less than the guaranteed size (the guaranteed NBBO is crossed or locked and the Auto-Ex system Market Makers would have priority status and size is the minimum firm quote size for which the has been set to re-route orders pursuant to PCX Rule inbound orders would be assigned pursuant to PCX LLM has, during the allocation process, pledged to 6.87(j); or (v) the order would otherwise receive an Rule 6.87(k)(1). Telephone conversation among make markets). See Securities Exchange Act Release execution at a price that is inferior to the NBBO. Michael D. Pierson, Vice President, and Cindy L. No. 46029, June 4, 2002 (Federal Register 13 Split price execution refers to an execution of Sink, Senior Attorney, Regulatory Policy, PCX; and publication pending). Assume, for example, that the a trade where some of the contracts in the order will Elizabeth K. King, Associate Director, Division, LLM is disseminating a market of 2 bid, 2.20 asked, receive an execution at the best available price, and Commission, and Steven G. Johnston, Special in a particular option series for which the the remainder of the contracts in the order will be Counsel, Division, Commission, on May 28, 2002. guaranteed size is twenty contracts. Then assume executed at the next best available price. Under 16 See supra note 7. that a customer order to buy one contract for 2.10 Proposed PCX Rule 6.87(k)(2), an incoming order 17 For example, Priority Status would no longer is entered on the Exchange, making the new best would be filled at the improved price until the apply once a Market Maker has been allocated 40 bid and offer on the Exchange 2.10 bid, 2.20 asked. improved quote and quotes matching the improved contracts based on an allocation of 40% of a single In this situation, the Exchange disseminates the true quote have been satisfied. The balance of the 100-contract order, pursuant to this subsection. size of the customer order for one contract. Under incoming order would be executed at the next best Likewise, Priority Status would no longer apply the instant proposed rule change, under the price. In the interim program, the balance of the once a Market Maker has been allocated a total of circumstances above, one contract would become order would be executed in the trading crowd. In 24 contracts based on three subsequent allocations the minimum amount by which a Market Maker the permanent program, split price execution would of 8 contracts, each of which are based on could improve the disseminated quote. Telephone be automated. allocations of 40% of 20 contracts.
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Second, under proposed subsection executed at the NBBO (e.g., because orders would be assigned pursuant to (E)(ii)(b) to proposed PCX Rule they exceed a size parameter), orders PCX Rule 6.87(k)(1). 6.87(k)(2), all other outstanding bids would be re-routed to a Floor Broker Order Allocation Process for the 19 and offers at the improved price, as well Hand-Held Terminal for execution. Interim Program. Under proposed PCX as any bids and offers representing the When that occurs, the Market Maker Rule 6.87(k)(3), a Market Maker with remaining sizes of Market Maker quotes who improved the PCX BBO (but not Priority Status who quotes alone at the with Priority Status, would then receive the NBBO) would have Priority Status at allocations on a size pro rata basis. the PCX BBO price. If the PCX BBO best price would be allocated 100% of With regard to LMM guaranteed becomes the NBBO, that Market Maker the incoming orders up to the size of the participation under PCX Rule 6.82(d), would have Priority Status. Market Maker’s quote. However, if more LMMs quoting at the improved price Floor Brokers would identify the than one Market Maker improves the would be eligible to receive guaranteed improved quote by an alert in the quote, then such Market Makers would participation in connection with system and would be required to use be allocated contracts as follows: First, allocations made under subsection their best efforts to identify the Market under proposed subsection (E)(ii)(a) to (E)(ii)(b) to proposed PCX Rule Makers with Priority Status and assure proposed PCX Rule 6.87(k)(3), Market 6.87(k)(2), but not under subsection that such Market Makers receive Makers with Priority Status would be on (E)(ii)(a) of the proposed rule. allocations of contracts as provided in parity and would be allocated 40% of The PCX estimates that the proposed PCX Rule 6.87(k)(3)(E), the the next incoming order or orders on an technology changes necessary to begin order allocation process. The Market equal distribution basis, up to their implementing the proposed rule and Maker who improved the disseminated quoted sizes. The 40% allocation would make its provisions operative would market would be required to remain in be effected only after all public take approximately 10 months. The the trading crowd and would be customer orders at the same price have proposed rule would be implemented responsible for filling orders in the first been executed. Orders would gradually until such time that it is crowd until that Market Maker no continue to be allocated in this manner implemented floor wide. The PCX longer has priority. estimates that the proposed rule would The Market Maker’s Priority Status until the total number of contracts commence operation in December 2002 would continue until one of the allocated pursuant to this subsection and would become completely operative following occurs: the Market Maker’s equals or exceeds 20 contracts, at which by the third quarter of 2003. However, commitment size is filled; the Market time Priority Status would no longer the Exchange is proposing to adopt an Maker’s better price is improved; or the apply.23 Second, under subsection interim program, described below, to Market Maker removes the bid or offer (E)(ii)(b) to proposed PCX Rule reward Market Makers who improve the that improved the disseminated quote. 6.87(k)(3), all other outstanding bids disseminated market until this program The following provisions would apply and offers at the improved price, as well is available. Once the permanent if the improved quote is matched: as any bids and offers representing the program set forth above is operative, it Market Makers who match the improved remaining sizes of Market Maker quotes would supersede the interim program. quote immediately (i.e., within one with Priority Status, would then receive Interim Price Improvement Incentive second) would be deemed to have allocations on a size pro rata basis. Program. The Exchange proposes to Priority Status and would be allocated adopt an interim rule change to become contracts as provided in proposed PCX With regard to LMM guaranteed operative on or before July 15, 2002 and Rule 6.87(k)(3)(E). Market Makers who participation under PCX Rule 6.82(d), to remain operative until the above- match the improved market, but who do LMMs quoting at the improved price described rule change becomes not match it immediately, would not be would be eligible to receive guaranteed operative. Under the interim program, a given Priority Status. An incoming order participation in connection with Market Maker who improves the in a size greater than the size of the allocations made under subsection disseminated quote would receive market improvement, including any (E)(ii)(b) to proposed PCX Rule Priority Status as follows. matching quotes, would receive split 6.87(k)(3), but not under subsection To receive Priority Status, a Market price execution in the trading crowd.20 (E)(ii)(a) to proposed PCX Rule Maker would be required to improve the If the LMM matches the improved quote 6.87(k)(3). disseminated quote via open outcry by via Auto-Quote or QTX after one a size of ten contracts or the second, then inbound orders would be 2. Statutory Basis 18 disseminated size, whichever is less. assigned pursuant to PCX Rule The Exchange believes that this 21 The improved quote would be keyed 6.87(k)(1), but only after Market proposal is consistent with section 6(b) into POETS by the Order Book Official Makers with Priority Status have first of the Act 24 in general, and furthers the (‘‘OBO’’) and would be disseminated via been satisfied.22 objectives of section 6(b)(5),25 in OPRA. When a Market Maker improves The following provisions would apply particular, in that it is designed to the quote in a particular series, orders if the improved quote were further in that series would be routed to Floor improved: If a Market Maker improves facilitate transactions in securities, to Broker Hand Held Terminals for the improved quote, the Market Maker promote just and equitable principles of execution. However, if the LMM has set who subsequently improved the quote trade, to foster cooperation and Auto-Ex to execute incoming orders at would be given Priority Status. If the coordination with persons engaged in the NBBO pursuant to PCX Rule 6.87(i), improved quote were improved by facilitation transactions in securities, and a Market Maker has improved the Auto-Quote or QTX, then inbound and to remove impediments to and PCX BBO but not the NBBO, then perfect the mechanism of a free and incoming orders would be permitted to 19 See supra note 12. Telephone conversation open market and a national market execute automatically at the NBBO. between Cindy L. Sink, Senior Attorney, Regulatory system. Policy, PCX and Steven G. Johnston, Special However, in circumstances where Counsel, Division, Commission, on May 29, 2002. incoming orders are not automatically 20 See supra note 13. 23 See supra note 17. 21 See supra note 14. 24 15 U.S.C. 78f(b). 18 See supra note 11. 22 See supra note 15. 25 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization’s For the Commission, by the Division of April 2, 2002, the Exchange filed Statement on Burden on Competition Market Regulation, pursuant to delegated Amendment No. 4 to the proposed rule 26 authority. change.6 On May 16, 2002, the The PCX does not believe that the Margaret H. McFarland, proposed rule change will impose any Exchange filed Amendment No. 5 to the Deputy Secretary. proposed rule change.7 On June 12, burden on competition that is not [FR Doc. 02–16200 Filed 6–26–02; 8:45 am] necessary or appropriate in furtherance 2002, the Exchange filed Amendment BILLING CODE 8010–01–P of the purposes of the Act. No. 6 to the proposed rule change. On June 19, 2002, the Exchange filed C. Self-Regulatory Organization’s Amendment No. 7 to the proposed rule Statement on Comments on the SECURITIES AND EXCHANGE 8 COMMISSION change. The Commission is publishing Proposed Rule Change Received From this notice to solicit comments on the Members, Participants or Others [Release No. 34–46095; File No. SR–Phlx– proposed rule change from interested 2002–04] No written comments were either persons. solicited or received. Self-Regulatory Organizations; Notice I. Self-Regulatory Organization’s III. Date of Effectiveness of the of Filing of Proposed Rule Change and Statement of the Terms of Substance of Proposed Rule Change and Timing for Amendments Nos. 1 through 7 thereto the Proposed Rule Change Commission Action by the Philadelphia Stock Exchange, Inc. Relating to Electronic Interface The Philadelphia Stock Exchange, Within 35 days of the date of With AUTOM for Phlx Specialists and Inc. (‘‘Phlx’’ or ‘‘Exchange’’), pursuant publication of this notice in the Federal Registered Options Traders to Rule 19b–4 of Act, proposes to amend Register or within such longer period (i) Phlx Rule 1080, Philadelphia Stock as the Commission may designate up to June 20, 2002. Pursuant to section 19(b)(1) of the Exchange Automated Options Market 90 days or such date if it finds such (AUTOM) and Automatic Execution longer period to be appropriate and Securities Exchange Act of 1934 publishes its reasons for so finding or (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 (ii) as to which the Exchange consents, notice is hereby given that on January the Commission will: 15, 2002, the Philadelphia Stock (A) By order approve such proposed Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) rule change, or, filed with the Securities and Exchange Commission (‘‘Commission’’) the of orders under the proposed rule change; and (2) (B) Institute proceedings to determine proposed rule change as described in corrected a typographical error in the proposed rule text. whether the proposed rule change Items I, II, and III below, which Items should be disapproved. 6 See letter from Richard S. Rudolph, Director and have been prepared by the Phlx. On Counsel, Phlx, to Nancy J. Sanow, Assistant IV. Solicitation of Comments March 6, 2002, the Exchange filed Director, Division, Commission, dated April 1, 2002 Amendment No. 1 to the proposed rule (‘‘Amendment No. 4’’). Amendment no. 4: (1) Interested persons are invited to change.3 On March 14, 2002, the clarified the Exchange’s commitment to modify its submit written data, views, and Exchange filed Amendment No. 2 to the systems to automatically execute eligible incoming arguments concerning the proposed rule proposed rule change.4 On March 26, orders against price-improving orders placed on the change and Amendment No. 1 thereto, 2002, the Exchange filed Amendment limit order book pursuant to the proposed rule; (2) including whether the proposed rule No. 3 to the proposed rule change.5 On clarified the proposal’s approach to allocating change is consistent with the Act. remaining contracts after an execution or executions have filled a price-improving order or Persons making written submissions 26 17 CFR 200.30–3(a)(12). price-improving orders; (3) established that a price- 1 should file six copies thereof with the 15 U.S.C. 78s(b)(1). improving ROT or specialist shall not be required 2 Secretary, Securities and Exchange 17 CFR 240.19b–4. to participate in a trade above its stated size; (4) Commission, 450 Fifth Street, NW., 3 See letter from Richard S. Rudolph, Director and specified the specialist’s responsibility to ensure Washington, DC 20549–0609. Copies of Counsel, Phlx, to Nancy J. Sanow, Assistant that incoming price-improving orders are filled up Director, Division of Market Regulation to their stated size; and (5) eliminated the the submission, all subsequent (‘‘Division’’), Commission, dated March 5, 2002 amendments, all written statements (‘‘Amendment No. 1’’). Amendment No. 1: (1) requirement that eligibility for order delivery be with respect to the proposed rule clarified provisions relating to the minimum size of subject to Options Committee approval. 7 change that are filed with the an on-floor order for the proprietary account of a See letter from Richard S. Rudolph, Director and Registered Options Traders (‘‘ROTs’’) or specialist; Counsel, Phlx, to Nancy J. Sanow, Assistant Commission, and all written (2) specified how contracts that remain after Price Director, Division, Commission, dated May 15, 2002 communications relating to the Improving ROTs and specialists have received their (‘‘Amendment No. 5’’). Amendment No. 5: (1) proposed rule change between the entitlement will be allocated; and (3) stipulated the clarified terminology and definitions; (2) stipulated timeframe for implementing proposed system when and how crowd participants may match Commission and any person, other than changes. price-improving orders; and (3) established a those that may be withheld from the 4 See letter from Richard S. Rudolph, Director and public in accordance with the Counsel, Phlx, to Nancy J. Sanow, Assistant Special Allocation that provides that a Price provisions of 5 U.S.C. 552, will be Director, Division, Commission, dated March 13, Improving ROT/Specialist is entitled to receive the available for inspection and copying in 2002 (‘‘Amendment No. 2’’). Amendment No. 2 largest number of contracts among all crowd clarified: (1) the responsibility for allocating participants at that price and how long such Special the Commission’s Public Reference incoming orders to ROTs pursuant to the proposed Allocation would remain in effect. Room, 450 Fifth Street, NW., rule change; (2) the relationship between current 8 See letter from Richard S. Rudolph, Director and Washington, DC 20549–0609. Copies of Phlx rules pertaining to the precedence of orders Counsel, Phlx, to Nancy J. Sanow, Assistant the proposed rule change and under the proposed rule change; and (3) plans to Director, Division, Commission, dated June 11, make an electronic interface available to member 2002 (‘‘Amendment No. 6’’) and dated June 18, amendments will also be available for firms. 2002 (‘‘Amendment No. 7’’). Amendments No. 6 inspection and copying at the principal 5 See letter from Richard S. Rudolph, Director and office of the PCX. All submissions Counsel, Phlx, to Nancy J. Sanow, Assistant and No. 7 corrected the marked changes to the should refer to File No. SR–PCX–2001– Director, Division, Commission, dated March 25, proposed rule text to reflect current Phlx rules, 2002 (‘‘Amendment No. 3’’). Amendment No. 3: (1) reinserted the proposed rule text in the 3rd 17 and should be submitted by July 18, clarified that certain Phlx rules pertaining to the paragraph of Rule 1080 commentary .04, and 2002. precedence of orders would not apply to allocation corrected a typographical error.
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System (AUTO–X),9 to enable a ROT 10 submitted to either improve the Phlx in Commentary .04 of this Rule. Orders or specialist to improve the Phlx bid or bid or offer or to match such improved up to 1,000 contracts, depending on the offer by means of enhanced access to bid or offer.14 option, are eligible for AUTOM order place limit orders on the electronic limit The text of the proposed rule change delivery. The following types of orders order book 11 through electronic is set forth below. New text is italicized; for the proprietary account(s) of ROTs interface with AUTOM (‘‘Price deleted text is bracketed. and specialists are eligible for entry via Improving ROT/Specialist’’). Rule 1080. Philadelphia Stock electronic interface with AUTOM: day Under the proposal, on-floor orders Exchange Automated Options Market limit and simple cancel. for the proprietary accounts of (AUTOM) and Automatic Execution * * * * * specialists and ROTs, up to 1,000 System (AUTO–X) (ii) The Exchange’s Options contracts, may be entered for delivery Committee may determine to accept through AUTOM, through the use of (a) General—AUTOM is the additional types of orders as well as to Exchange approved proprietary systems Exchange’s electronic order delivery discontinue accepting certain types of to interface with AUTOM. The and reporting system, which provides orders. following types of orders for the for the automatic entry and routing of (iii) Orders may not be unbundled for proprietary account(s) of specialists and Exchange-listed equity options and the purposes of eligibility for AUTOM ROTs would be eligible for AUTOM: index options orders to the Exchange and AUTO–X, nor may a firm solicit a day and simple cancel. By January 2004, trading floor. Orders delivered through customer to unbundle an order for this the Phlx’s systems will be capable of AUTOM may be executed manually, or purpose. certain orders are eligible for AUTOM’s automatically executing eligible * * * * * incoming orders against Price- automatic execution feature, AUTO–X, Improving ROT/Specialist orders in accordance with the provisions of Commentary this Rule. Equity option and index entered via electronic interface with * * * * * option specialists are required by the AUTOM. The system change necessary .04 Price-improving ROT and Exchange to participate in AUTOM and to facilitate the automatic execution of specialist price-improving orders via its features and enhancements. Option these orders will be fully deployed over electronic interface with AUTOM. On- 12 orders entered by Exchange member a 15-month period. Following full floor orders for the proprietary accounts organizations into AUTOM are routed to implementation of this system change, of ROTs or specialists that result in an the appropriate specialist unit on the the proposed rule will apply to all series improvement in the then prevailing Exchange trading floor. and classes of options traded on the market disseminated by the Exchange 13 This Rule shall govern the orders, exchange. (i.e., raise the bid or lower the offer) may In conjunction with the proposed rule execution reports and administrative messages (‘‘order messages’’) be entered for delivery through AUTOM, change to Phlx Rule 1080, the Exchange through the use of Exchange approved also proposes to amend Phlx Rule 1014, transmitted between the offices of member organizations and the trading proprietary systems to interface with Obligations and Restrictions Applicable AUTOM to be placed on the specialist’s to Specialists and Registered Options floors of the Exchange through AUTOM. All references to ‘‘ROTs’’ in this Rule limit order book. In order to be Traders, to provide for special parity displayed, on-floor price improving and priority rules and procedures 1080 are to Phlx Registered Options Traders as defined in Exchange Rule orders for the proprietary accounts of concerning orders for the account(s) of ROTs or specialists delivered via Phlx ROTs and specialists entered 1014(b). (b) Eligible Orders [-] electronic interface with AUTOM shall through electronic interface with be for a minimum size of at least the AUTOM, where those orders are (i) The following types of orders are eligible for entry into AUTOM: [(i) lesser of the AUTO–X guarantee for the option that is the subject of such an 9 AUTOM is the Exchange’s electronic order Generally, only agency orders may be delivery and reporting system, which provides for entered.] order, or 20 contracts. Inbound orders the automatic entry and routing of equity option (A) Agency orders up to the maximum eligible for execution against price- and index option orders to the Exchange trading number of contracts permitted by the improving ROT or specialist price- floor. Orders delivered through AUTOM may be Exchange. Agency orders up to 1000 improving orders entered into AUTOM executed manually, or certain orders are eligible for AUTOM’s automatic execution feature, AUTO–X. contracts, depending on the option, are via electronic interface and orders that Equity option and index option specialists are eligible for AUTOM order delivery, match such price-improving orders via required by the Exchange to participate in AUTOM subject to the approval of the Options electronic interface with AUTOM, shall and its features and enhancements. Option orders Committee. The following types of be executed by the specialist and shall entered by Exchange members into AUTOM are routed to the appropriate specialist unit on the agency orders are eligible for AUTOM: be allocated by the person required to Exchange trading floor. day, GTC, market, limit, stop, stop limit, do so pursuant to Exchange rules. The 10 A ROT is a regular member or a foreign all or none, or better, simple cancel, Exchange will make electronic interface currency options participant of the Exchange simple cancel to reduce size (cancel with AUTOM available to member located on the trading floor who has received firms, and will notify all members on the permission from the Exchange to trade in options leaves), cancel to change price, cancel for his own account. See Phlx Rule 1014(b). with replacement order, market close, Options Floor when it has completed 11 The electronic ‘‘limit order book’’ is the market on opening, limit on opening, the development of appropriate Exchange’s automated specialist limit order book, limit close, and possible duplicate interfaces for such proprietary systems which automatically routes all unexecuted AUTOM orders. on the Options Floor, and when the use orders to the book and displays orders real-time in order of price-time priority. Orders not delivered (B) On-floor orders for the proprietary of such electronic interfaces may through AUTOM may also be entered onto the limit account(s) of ROTs and specialists via commence. Thereafter, ROTs and order book. See Phlx Rule 1080, Commentary .02. electronic interface with AUTOM, up to specialists must connect with these 12 See Amendments Nos. 3 and 4. the maximum number of contracts interfaces with their own proprietary 13 Telephone conversation between Richard permitted by the Exchange, subject to devices. Rudolph, Director and Counsel, Phlx, and Steven Johnston, Special Counsel, Division, Commission, the restrictions on order entry set forth The Exchange shall modify its AUTO– March 21, 2002 (‘‘March 21, 2002 Telephone X system not later than January 2004, so Conversation’’). 14 March 21, 2002 Telephone Conversation. that it shall automatically execute
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eligible incoming orders against Phlx specialist is referred to, in this rule, as contracts required under Rule 1080, Price Improving ROT and specialist a Price Improving ROT/Specialist. Commentary .04; price improving orders and orders Matching—The other crowd (b) the Price Improving ROT/ matching such price-improving orders participants, including ROTs and/or the Specialist cancels the price improving entered via electronic interface with specialist, may match such price order; improving order via electronic interface AUTOM resting on the limit order book. (c) the original price improving order with AUTOM and by loudly and audibly The Exchange will deploy the modified is superceded by a new price improving announcing their intention to do so, and system over a 15-month period. order, unless that new price improving indicating their size, at any time. If An ROT or specialist that posts a bid order is cancelled before at least one Auto-Quote or Specialized Quote Feed or offer through electronic interface with contract executes at that price (in which matches the price associated with a AUTOM and elects to cancel such a bid case the original price improving order price improving order, the specialist and or offer must cancel such bid or offer remains subject to special allocation crowd participants shall be deemed to through the electronic interface. until one of these three conditions be matching the price improving order occur). Rule 1014. Obligations and Restrictions under this paragraph. Applicable to Specialists and Further Improvement—the other (3) Once the Special Allocation is no Registered Options Traders crowd participants may improve the longer in effect, all contracts remaining * * * * * price improving order by entering an to be executed at the originally (g) Equity Option and Index Option order via an electronic interface with improved price (including those Priority and Parity AUTOM. remaining of the price improving order) (i) (A) Exchange Rules 119 and 120 Trade Allocation—Among the Price shall be considered on parity and direct members in the establishment of Improving ROT/Specialist and matching allocated in accordance with Exchange priority of orders on the floor. In crowd participants, trades shall be Rule 1014(g)(ii)–(iv). Thus, if the addition, equity option and index allocated as follows: specialist is among the crowd option orders of controlled accounts are (1) Special Allocation: a Price participants remaining on parity, the required to yield priority to customer Improving ROT/Specialist shall be specialist shall be entitled to receive an orders when competing at the same entitled to receive the largest number of Enhanced Specialist Participation in price, as described below. contracts among all crowd participants eligible options. The Special Allocation For the purpose of paragraph (g) of that have matched such price improving may apply to part of an incoming order this Rule, an account type is either a order, subject to size, as follows: (up to the minimum number permitted controlled account or a customer (a) When a price improving order is by Rule 1080, Commentary .04 i.e., 20 account. A controlled account includes matched by one single crowd contracts), with the rest of an incoming any account controlled by or under participant via electronic interface with order subject to allocation under Rules common control with a broker-dealer. AUTOM, the Price Improving ROT/ 1014(g)(ii)–(iv). Specialist accounts of PHLX Option Specialist shall be entitled to receive (4) In no event shall a Price Improving Specialists, however, are not subject to 60% of an incoming order, and the ROT/Specialist or crowd participant yielding requirements placed upon matching crowd participant shall be that matches a price improving order be controlled accounts by this Rule. entitled to receive 40% of an incoming required to participate in a trade above Customer accounts are all other order. such Price Improving ROT or crowd (b) When a price improving order is participant’s stated size. accounts. matched via electronic interface with (5) Notwithstanding the first sentence Orders of controlled accounts must AUTOM by two or more crowd of Rule 1014(g)(i), neither Rule 119(a)– yield priority to customer orders, except participants, the Price-Improving ROT/ (d) and (f), nor Rule 120 (insofar as it that PHLX ROTs closing in-person are Specialist shall be entitled to receive incorporates those provisions by not required to yield priority to orders 40% of an incoming order. If one of the reference) shall apply to the allocation of customer accounts. matching crowd participants is the of trades executed against price- Orders of controlled accounts are not specialist, the specialist shall be entitled improving orders and orders matching required to yield priority to other to receive of 30% of an incoming order, such price improving orders. The controlled account orders, except that and any other ROT(s) that matched the Special Allocation set forth above shall when both an order of a PHLX ROT Price Improving ROT’s order shall be apply only to price improving orders closing in-person and some other order entitled to receive 30% of an incoming and orders matching such price of a controlled account are established order, in the aggregate. in the crowd at the same price, and then (c) When a Price Improving ROT/ improving orders. No other rule relating a customer order is established at that Specialist’s price improving order is to the allocation of contracts shall apply price, the order of the controlled matched via electronic interface with to price improving orders until the account must yield to the customer AUTOM by two or more other ROTs in Special Allocation ends, which is order while the order of the PHLX ROT the crowd, the Price Improving ROT/ determined above. The person closing in-person does not have to so Specialist shall be entitled to receive responsible for allocation of orders shall yield. 40% of an incoming order, and any use best efforts to ensure that price (B) ROT Access—Pursuant to Rule other ROT(s) that matched the Price improving orders and crowd 1080(b)(i)(B) and Commentary .04 Improving ROT’s order shall be entitled participants that match such price thereto, a Phlx ROT or specialist may to receive 60% of an incoming order, in improving orders are allocated contracts enter an order that results in the the aggregate. in accordance with this Rule. improvement of the prevailing bid and/ (d) Any partial contracts shall be II. Self-Regulatory Organization’s or offer disseminated by the Exchange rounded up in favor of the Price Statement of the Purpose of, and through an electronic interface with Improving ROT/Specialist. Statutory Basis for, the Proposed Rule AUTOM (‘‘price improving order’’) and (2) The Special Allocation set forth in Change must announce, loudly and audibly in (a)–(c) above shall remain in effect until: the crowd, that he has improved the (a) the price improving order has been In its filing with the Commission, the displayed market. Such ROT or executed up to the minimum number of self-regulatory organization included
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statements concerning the purpose of The proposal would also allow to use his or her best efforts to ensure and basis for the proposed rule change specialists to improve the prevailing that price-improving orders and orders and discussed any comments it received market by placing price-improving that match price-improving orders are on the proposed rule change. The text orders via a similar electronic interface allocated contracts pursuant to the of these statements may be examined at with AUTOM as that used by ROTs. The allocation formula in the proposed the places specified in Item IV below. use of a specific electronic interface is rule.20 No later than January 2004, the The Exchange has prepared summaries, intended to distinguish the specialists’ Exchange will modify the AUTO–X set forth in sections A, B, and C below, price improving orders under the system and will automatically execute of the most significant aspects of such instant proposed rule from their general incoming orders against ROT and statements. two-sided quoting, including by Auto- specialist orders that improve the Quote or specialized quote feed.17 The disseminated price, as well as orders A. Self-Regulatory Organization’s Exchange believes that this provision that match such price-improving Statement of the Purpose of, and substantially enhances the incentives orders.21 Statutory Basis for, the Proposed Rule for all crowd participants engaged as It is inherent in the specialist system Change options market-makers, including (the Phlx uses the specialist system) that 1. Purpose and Overview specialists, to quote competitively. the specialist controls the limit order Under existing Phlx rules, Phlx ROTs book and also the operation of the Auto- The purpose of the proposed rule 22 change is to permit Phlx ROTs to place are able to improve the Phlx market Quote. Currently, Phlx ROTs cannot orders directly on the specialist’s limit with respect to a given option series by directly place orders on the electronic order book, and to encourage Phlx ROTs verbally announcing their trading limit order book or cause the displayed and specialists to quote competitively in interest in a loud and audible fashion. market to reflect a price-improving bid, options in which they are registered,15 A Phlx ROT (or a floor broker on the offer or booked order of the ROT, except by allowing such ROTs to interface ROT’s behalf) may also ask the by asking the specialist to do so. Thus, electronically with, and to submit specialist to place an order for an ROT’s specialists could be perceived to have a proprietary orders through, AUTOM. account on the limit order book major technological advantage over Currently, Phlx Rule 1080 provides maintained by the specialist. In either ROTs, which could be seen as a that, generally, only agency orders may case, the Phlx ROT may establish competitive advantage. Because of the be entered into AUTOM.16 The proposal priority with respect to an incoming ROT’s dependence on the hearing and would provide that on-floor orders for order if the ROT’s quote or order is first reactions of the specialist, the absence the proprietary account(s) of ROTs, up in time.18 of electronic interface with AUTOM for to the maximum number of contracts Inbound orders eligible for execution ROTs might be regarded as an permitted by the Exchange, are eligible against ROT or specialist orders entered impediment to vigorous quoting by for delivery via AUTOM. This is into AUTOM via electronic interface ROTs, especially in busy trading intended to provide ROTs with would be executed by the specialist and crowds, where ROTs might be additional means to enter orders while allocated initially by the individual concerned that specialists might not on the floor of the Exchange other than responsible for allocating trades under hear them or properly recognize the through open outcry while physically existing Exchange rules. Currently, time sequence in which an ROT has present in the trading crowd, or through under the Exchange’s Option Floor vocalized a quote. Moreover, this might a floor broker. Procedure Advice (‘‘OFPA’’) F–2, the be seen as an opportunity for a Currently, only Exchange options largest participant in a trade is specialist who did not wish an ROT to specialists may access the limit order responsible for allocating contracts to better the market through price book electronically. The Exchange crowd participants. In a separate rule competition to consciously ignore an believes that allowing Phlx ROTs to proposal, the Exchange has proposed ROT’s quote or order, even if properly place orders directly on the limit order amendments to OFPA F–2 and Rule verbalized. book via electronic interface with 1014(g)(iv) that the Phlx represents The Exchange believes that the AUTOM should level the playing field would further delineate this enhanced ROT access to the AUTOM by eliminating any actual or perceived responsibility.19 The person responsible system contemplated in this proposal technological advantage the specialist for allocating orders would be required would substantially enhance the may have respecting the ability to place incentives of ROTs to quote orders directly on the limit order book, 17 A specialist may establish a specialized competitively because they will be able and thus would provide incentives for connection with AUTOM, known as a specialized to improve the Phlx market quote feed, which enables the specialist to provide electronically, and thereby increase all crowd participants to quote quotations based on a proprietary pricing model, competitively. by-passing the Exchange’s Auto-Quote System. See their prospects for trade participation, Phlx Rule 1080, Commentary .01(c). rather than merely passively staying on 15 The Exchange notes that the Commission has 18 See Securities Exchange Act Release No. 35033 the disseminated market and waiting to directed that the options markets adopt new, or (November 30, 1994), 59 FR 63152 (December 7, receive their allocated participation in amend existing, rules concerning its automated 1994) (File No. SR–Phlx–94–32). AUTO–X trades on the ‘‘Wheel.’’ 23 By quotation and execution systems which 19 Under the separate rule proposal, if a trade substantially enhance incentives to quote involved a floor broker, the floor broker would be 20 competitively and reduce disincentives for market responsible for allocating contracts among crowd See Amendments Nos. 4 and 5. participants to act competitively. See Securities participants but could delegate the responsibility to 21 See Amendment No. 1. March 21, 2002 Exchange Act Release No. 43268 (September 11, the specialist or an assistant to the specialist under Telephone Conversation. 2000), Administrative Proceeding File No. 3–10282. the specialist’s supervision (‘‘Assistant’’), provided 22 Auto-Quote is the Exchange’s electronic 16 The Exchange has defined an agency order as that the specialist (or Assistant) would be options pricing system, which enables specialists to any order entered on behalf of a public customer, responsible for allocating trades. If neither the automatically monitor and instantly update and does not include any order entered for the specialist nor floor broker is involved, but there is quotations, based on incremental changes in the account of a broker-dealer, or any account in which more than one buyer or seller, the largest price of the security underlying the option. See a broker-dealer or an associated person of a broker- participant would be responsible for allocating Phlx Rule 1080, Commentary .01(a). dealer has any direct or indirect interest. See, e.g., trades. If neither the specialist nor floor broker is 23 The ‘‘Wheel’’ is a feature of AUTOM that Phlx Rule 229.02. See also, Securities Exchange Act involved, and there is only one buyer and seller, the provides an automated mechanism for assigning Release No. 40970 (January 25, 1999), 64 FR 4922 seller would be responsible for allocating trades. specialists and ROTs signed on the Wheel for a (February 1, 1999) (File No. SR–Phlx–98–44). See File No. SR–Phlx–2001–28. Continued
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providing a means of quote that other crowd participants (including participant that matches a price- improvement that is not dependent on the specialist) are alerted to the fact that improving order be required to the hearing, reaction time, and perhaps the specialist or an ROT in the crowd participate in a trade above that Price ‘‘good will’’ of the specialist, the has improved the market, thus enabling Improving ROT/Specialist’s crowd or Exchange believes that the proposed such other crowd participants to quote participant’s size.27 rule change substantially reduces ROTs’ competitively by entering matching The Special Allocation would remain actual or perceived disincentives to act orders through electronic interface with in effect until one of the following takes competitively. AUTOM and verbalizing their intention place: (1) the lesser of 20 contracts or Nothing in this proposal would to join in such an improved market, or the AUTO–X guarantee for the option eliminate the current ability of Phlx to better the price (see Section 3.C., that is the subject of the price-improving ROTs to price improve through the below). quote, have been executed against the customary method of open outcry (or to The proposal would require that an price-improving quotes eligible to submit orders through Phlx floor ROT or specialist that posts a bid or receive an allocation; (2) the ROT or brokers) or alter the priority of Phlx offer through electronic interface with specialist who improved the price ROT bids/offers verbalized in the crowd AUTOM, and subsequently elects to cancels the price-improving order; or (3) or submitted through floor brokers. cancel such a bid or offer, must cancel the original price-improving order is Rather, the proposal offers Phlx ROTs such bid or offer through the electronic superseded by a new price-improving an additional method of price interface. The purpose of this provision order.28 If any of those conditions are competition, by means of order entry via is to eliminate the necessity for a satisfied, the special allocation formula electronic interfaces. specialist to cancel such an order would no longer be in effect, and crowd members with orders that have not been 2. Procedural Requirements manually upon verbal notification of the cancellation, thereby freeing the filled would be considered to be on The proposal provides for some specialist to continue maintaining fair parity. If the specialist were one of the procedural requirements and limitations and orderly markets. crowd members, the specialist would, applicable to orders entered via the consistent with applicable exchange electronic interface. The proposal also 3. Price-Improving, ‘‘Matching’’ and rules, be entitled to receive an Enhanced includes a rule pertaining to priority, Special Parity Rule Specialist Participation in eligible parity, and precedence of orders, The other crowd participants options.29 applicable solely to Phlx specialist and (including the specialist) may match a Further, proposed Commentary .04 to ROT orders that are entered via price-improving order through an Phlx Rule 1080 provides that the electronic interface and either improve electronic interface with AUTOM, but Exchange will notify all members on the the displayed Phlx marker or match must loudly and audibly announce their Options Floor when it has completed another order that has improved the intention to do so, as well as their size. the development of appropriate displayed market.24 If Auto-Quote or Specialized Quote interfaces for such proprietary systems In order to be displayed, on-floor and/or deployed such terminals on the orders for the proprietary accounts of Feed matches a price-improving order, the specialist and crowd participants on Options Floor, and when the use of such ROTs delivered via AUTOM must be for electronic interfaces and/or terminals a minimum size of at least the lesser of that quote would be deemed to be matching the price-improving order. In may commence. This provision is the AUTO–X guarantee for the option included in the proposed rule change that is the subject of such an order, or such a situation, the ‘‘Special Allocation’’ in proposed Phlx Rule because, in the event that the 20 contracts.25 This is to reduce the Commission approves this proposal, the potential logjam of orders entered 1014(g)(i)(B)(1) would apply until terminated as set forth in Rule Exchange’s ability to deploy such electronically on the specialist’s limit interfaces may not coincide with the 1014(g)(i)(B)(2). Specifically, a ‘‘Special order book. The Exchange believes that effective date of the rule. The Exchange Allocation’’ entitles the Price Improving this requirement would enable believes that the interfaces should be ROT/Specialist to receive the largest specialists to continue to meet their able to be deployed in or around the number of contracts among all crowd obligation to make fair and orderly third quarter 2002. markets. participants that have matched a price- 26 Finally, the Exchange has determined Paragraph (g) of Phlx Rule 1014 improving order, subject to size. Any to work towards the development of a provides that a Price-Improving ROT/ partial contracts would be rounded up proposal for an alternative model for Specialist that enters an order through in favor of the Price Improving ROT/ ROT access, which would involve an electronic interface with AUTOM Specialist. In no event shall a Price giving ROTs the ability to electronically that results in an improvement in the Improving ROT/Specialist or crowd post their own quotations in then prevailing market disseminated by competition with the specialist and to the Exchange (i.e., raises the bid or 26 The proposal would entitle a Price Improving ROT/Specialist to participate in at least 60% of the have their own quotation generation lowers the offer) must announce, loudly contracts in the transaction if his or her order is models (which might be supplied by the and audibly in the crowd, that he has matched by one single crowd participant. If the Exchange or third parties, or be improved the displayed market. The Price Improving ROT/Specialist’s order is matched independently developed), as opposed purpose of this provision is to ensure by two or more crowd participants (including the specialist), the Price Improving ROT/Specialist would be entitled to participate in at least 40% of 27 See Amendment No. 4. given listed option, on a rotating basis, as contra- the contracts in the transaction; a matching 28 Unless the new price-improving order is side participants to trades executed via AUTO–X. specialist would be entitled to participate in 30%, cancelled before at least one contract executes at the See Phlx Rule 1080(g) and Options Floor Procedure and other crowd participants on parity with the price of the new price-improving order. See Advice F–24. Price Improving ROT/Specialist would be entitled proposed Phlx Rule 1014(g)(B)(2). The Exchange 24 March 21, 2002 Telephone Conversation. to participate in 60% of the contracts in the represents that the purpose of this third condition 25 See Amendment No. 1. This requirement transaction, in the aggregate. If a Price Improving is to eliminate the possibility that a crowd applies only to Phlx ROT and specialist orders ROT/Specialist order is matched by two or more participant could, by placing and then immediately entered via electronic interface. This requirement is crowd participants (but not the specialist), the Price canceling a price-improving order, cause a Price distinguished from the display requirement for all Improving ROT/Specialist would be entitled to Improving ROT/Specialist to lose their entitlement other orders set forth in Options Floor Procedure participate in 60% of the contracts in the under the Special Allocation. Advice A–1. transaction, in the aggregate. 29 See Amendment No. 5.
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to having their electronic access be IV. Solicitation of Comments consultation with U.S. Embassies and limited to sending limit orders on a Interested persons are invited to ECA. The REAC program works to strike-by-strike basis (the ‘‘Independent submit written data, views and support educational information centers 30 Quoting Model’’). arguments concerning the proposed rule in the region and to assist in their This Independent Quoting Model change and Amendments Nos. 1–7 professional development. These would involve the Exchange adopting a thereto. Persons making written activities include the sharing of new trade allocation rule similar to that submissions should file six copies information and materials with the International Securities Exchange thereof with the Secretary, Securities region’s advising centers, (‘‘ISE’’) Rule 713. Subject to approval and Exchange Commission, 450 Fifth communicating trends in U.S. education under the governance requirements set Street, NW, Washington, DC 20549. and regional exchange, disseminating forth in the Exchange’s rules and in the Copies of the submission, all subsequent information on the latest developments Act, the Exchange would, if so amendments, all written statements in technology and providing direct approved, submit the same to the with respect to the proposed rule guidance through site visits, Commission as the ultimate solution to change that are filed with the internships, training and workshops in compliance with Section IV.B.h.(aa) of Mexico, Central America and the 31 Commission, and all written the Order. communications relating to the Caribbean. The region contains 46 4. Statutory Basis proposed rule change between the advising centers in the U.S. Department Commission and any person, other than of State-affiliated network. These For these reasons, the proposed rule centers provide comprehensive and change is consistent with Section 6 of those that may be withheld from the public in accordance with the unbiased information to interested the Act in general, and with Section students, scholars, and other 6(b)(5) of the Act specifically, in that it provisions of 5 U.S.C. 552, will be available for inspection and copying in individuals about study opportunities in is designed to perfect the mechanisms of the U.S. a free and open market and the national the Commission’s Public Reference market system, protect investors and the Section, 450 Fifth Street, NW, Program Information Washington, DC 20549. Copies of such public interest and promote just and Overview equitable principles of trade by filing will also be available for providing Phlx ROTs with increased inspection and copying at the principal The Regional Educational Advising electronic access to the specialist’s limit office of the Phlx. All submissions Coordinator (REAC) organization will be order book, which should provide should refer to File No. SR–Phlx–2002– responsible for providing on-site incentive for Phlx ROTs to quote 04 and should be submitted by July 18, technical assistance and training to competitively, and which in turn should 2002. centers in the Mexico, Central America, result in competitive pricing and For the Commission by the Division of and the Caribbean Region (MCAC) and enhanced liquidity on the Exchange Market Regulation, pursuant to delegated for coordinating the establishment of specifically, and in the options markets authority.32 any new advising centers, as directed by in general. Margaret H. McFarland, individual embassies in consultation Deputy Secretary. with the Branch. The REAC will support B. Self-Regulatory Organization’s [FR Doc. 02–16210 Filed 6–26–02; 8:45 am] all U.S. Department of State-affiliated Statement on Burden on Competition BILLING CODE 8010–01–P centers located in the following The Phlx does not believe that the countries and locations: Mexico, Belize, proposed rule change will impose any Costa Rica, Cuba, El Salvador, inappropriate burden on competition. DEPARTMENT OF STATE Guatemala, Honduras, Nicaragua, Panama, Guyana, Suriname, Anguilla, C. Self-Regulatory Organization’s [Public Notice 4055] Antigua, Aruba, Bahamas, Barbados, Statement on Comments on the British Virgin Islands, Cayman Islands, Proposed Rule Change Received From Bureau of Educational and Cultural Dominica, Dominican Republic, Members, Participants or Others Affairs Request for Grant Proposals: Grenada, Haiti, Jamaica, Martinique, Mexico, Central America, and the No written comments were either Montserrat, Nevis, St. Kitts, St. Lucia, Caribbean (MCAC) Regional solicited or received. St. Vincent and the Grenadines, and Educational Advising Coordinator Trinidad and Tobago. The MCAC REAC III. Date of Effectiveness of the (REAC) Program Proposed Rule Change and Timing for organization should work impartially Commission Action SUMMARY: The Educational Information with all non-governmental and Resources Branch (ECA/A/S/A) of organizations, binational centers (such Within 35 days of the date of the Bureau of Educational and Cultural as the Instituto Guatemalteco- publication of this notice in the Federal Affairs (ECA) announces an open Americano or Centro Cultural Register or within such longer period (i) Costarricense-Norteamericano), Public as the Commission may designate up to competition for the Mexico, Central Affairs Sections located in U.S. 90 days or such date if it finds such America, and the Caribbean (MCAC) embassies and consulates overseas, longer period to be appropriate and Regional Educational Advising universities, libraries, etc. involved in publishes its reasons for so finding or Coordinator (REAC) Program. Public educational advising to enable advisers (ii) as to which the Phlx consents, the and private non-profit organizations Commission will: meeting the provisions described in to provide accurate and timely (A) By order approve such proposed Internal Revenue Code section 26 U.S.C. information on U.S. higher educational rule change, or, 501(c)(3) may submit proposals. The opportunities. The REAC must work (B) Institute proceedings to determine REAC organization facilitates the closely with the Branch and Public whether the proposed rule change provision of expertise and information Affairs Sections throughout the region should be disapproved. through the regional coordinator to to help establish priorities for educational advisers in the region in educational advising. Responsibilities 30 See Amendment No. 5. for organization for the MCAC REAC 31 Id. 32 17 CFR 200.30–3(a)(12). will include:
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1. Making site visits to advising proposed program staff, clearly the RFGP deadline has passed, Bureau centers to provide training and conduct demonstrating appropriate expertise. staff may not discuss this competition needs assessment; Provisions which the organization will with applicants until the proposal 2. Providing information and take to maintain communication review process has been completed. guidance in response to specific between the coordinator, the advising To Download a Solicitation Package via questions related to educational centers, and ECA/A/S/A should be Internet advising, as requested by advising clearly described. centers; The entire Solicitation Package may 3. Production of a newsletter, Guidelines be downloaded from the Bureau’s electronic bulletin board or other Pending awarding of funds, the period website at http://exchanges.state.gov/ methods of sharing information among of this grant is October 1, 2002 to education/RFGPs. Please read all centers, and oversight of regional September 30, 2003. information before downloading. Final awards cannot be made until listserv REAC-MCAC; Deadline for Proposals 4. Organization and oversight of funds have been appropriated by internship training programs for Congress, allocated and committed All proposal copies must be received beginning and intermediate advisers to through internal ECA procedures. at the Bureau of Educational and be held in one of the larger, well-staffed, Programs must comply with J–1 visa Cultural Affairs by 5 p.m. Washington, well-trained advising centers, as regulations. Please refer to Solicitation DC time on Thursday, August 1, 2002. necessary; Package for further information. Faxed documents will not be accepted at any time. Documents postmarked the 5. Conducting in-country and sub- Budget Guuidelines regional workshops as needed, as due date but received on a later date determined in consultation with Branch Applicants must submit a will not be accepted. Each applicant and Public Affairs Sections; comprehensive budget for the entire must ensure that the proposals are 6. Consultations with Embassies and program, not to exceed $56,000. There received by the above deadline. the Branch on the direction and must be a summary budget as well as Applicants must follow all priorities of educational advising; breakdowns reflecting both instructions in the Solicitation Package. 7. Evaluation and Follow-up administrative and program budgets. The original and 6 copies of the Qualifications required for the Applicants may provide separate sub- application should be sent to: U.S. coordinator position within the REAC budgets for each program component, Department of State, SA–44, Bureau of organization include all of the phase, location, or activity to provide Educational and Cultural Affairs, Ref.: following: clarification. The Bureau encourages ECA/A/S/A–03–02, Program 1. Fluent Spanish language ability; applicants to provide maximum levels Management, ECA/EX/PM, Room 534, 2. Knowledge of educational advising of cost-sharing and funding from private 301 4th Street, SW., Washington, DC programs and centers; sources in support of its programs. 20547. 3. Experience living and traveling in Allowable costs for the program Applicants must also submit the the region, and a demonstrated include the following: ‘‘Executive Summary’’ and ‘‘Proposal willingness and ability to undertake an (1) Salary and benefits Narrative’’ sections of the proposal on a ambitious travel schedule; (2) Budget for REAC travel and per 3.5″ diskette, formatted for DOS. These 4. Knowledge of the system of higher diem documents must be provided in ASCII education in the U.S., including such (3) Costs for training materials text (DOS) format with a maximum line issues as accreditation, distance (4) Costs for training events length of 65 characters. The Bureau will learning, the admissions process, (5) Office supplies and expenses transmit these files electronically to the standardized testing, and financial aid; (6) Indirect costs Public Affairs section at the U.S. 5. Organizational skills needed to Please refer to the Solicitation Embassy for its review, with the goal of administer both the internship programs Package for complete budget guidelines reducing the time it takes to get embassy and conferences; and formatting instructions. comments for the Bureau’s grants 6. Excellent time management skills, Announcement Title and Number: All review process. communication skills, and computer/ correspondence with the Bureau Diversity, Freedom and Democracy internet/listserv skills; concerning this RFGP should reference 7. Experience in public speaking and the above title and number ECA/A/S/A– Guidelines in professional training activities; 03–02. Pursuant to the Bureau’s authorizing 8. U.S. Citizenship. FOR FURTHER INFORMATION CONTACT: The legislation, programs must maintain a The coordinator should plan a Educational Information and Resources non-political character and should be rigorous travel schedule at the Branch, ECA/A/S/A, room 349 U.S. balanced and representative of the beginning of his or her tenure in Department of State, 301 4th Street, diversity of American political, social, consultation with the Branch and with SW., Washington, DC 20547, telephone and cultural life. ‘‘Diversity’’ should be advising centers/embassies to be visited, (202) 619–5434, fax (202) 401–1433, interpreted in the broadest sense and in order to conduct site visits consistent [email protected] to request a encompass differences including, but with Branch and Public Affairs Section Solicitation Package. The Solicitation not limited to ethnicity, race, gender, priorities. The proposal should contain Package contains detailed award religion, geographic location, socio- a tentative travel plan and should criteria, required application forms, economic status, and physical clearly delineate the ability of the specific budget instructions, and challenges. Applicants are strongly organization to make reliable travel standard guidelines for proposal encouraged to adhere to the arrangements under adverse conditions preparation. Please specify Bureau advancement of this principle both in as well as the willingness and ability of Program Officer Sharen Sheehan on all program administration and in program the REAC to undertake a rigorous other inquiries and correspondence. content. Please refer to the review itinerary. Please read the complete Federal criteria under the ‘Support for Diversity’ The proposal should describe all Register announcement before sending section for specific suggestions on members of the REAC organization’s inquiries or submitting proposals. Once incorporating diversity into the total
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proposal. Public Law 104–319 provides 4. Institutional Capacity: Proposed provided by the Bureau that contradicts that ‘‘in carrying out programs of personnel and institutional resources published language will not be binding. educational and cultural exchange in should be adequate and appropriate to Issuance of the RFGP does not countries whose people do not fully achieve the program or project’s goals. constitute an award commitment on the enjoy freedom and democracy,’’ the 5. Institution’s Record/Ability: part of the Government. The Bureau Bureau ‘‘shall take appropriate steps to Proposals should demonstrate an reserves the right to reduce, revise, or provide opportunities for participation institutional record of successful increase proposal budgets in accordance in such programs to human rights and exchange programs, including with the needs of the program and the democracy leaders of such countries.’’ responsible fiscal management and full availability of funds. Awards made will Public Law 106–113 requires that the compliance with all reporting be subject to periodic reporting and governments of the countries described requirements for past Bureau grants as evaluation requirements. above do not have inappropriate determined by Bureau Grant Staff. The influence in the selection process. Bureau will consider the past Notification Proposals should reflect advancement of performance of prior recipients and the Final awards cannot be made until these goals in their program contents, to demonstrated potential of new funds have been appropriated by the full extent deemed feasible. applicants. Congress, allocated and committed 6. Project Evaluation: Proposals through internal Bureau procedures. Review Process should include a plan to evaluate the Dated: June 25, 2002. The Bureau will acknowledge receipt activity’s success, both as the activities Rick A. Ruth, of all proposals and will review them unfold and at the end of the program. A for technical eligibility. Proposals will draft survey questionnaire or other Principal Deputy Assistant Secretary, Bureau be deemed ineligible if they do not fully of Educational and Cultural Affairs, technique plus description of a Department of State. adhere to the guidelines stated herein methodology to use to link outcomes to [FR Doc. 02–16156 Filed 6–26–02; 8:45 am] and in the Solicitation Package. All original project objectives is eligible proposals will be reviewed by recommended. Successful applicants BILLING CODE 4710–05–P the program office, as well as the Public will be expected to submit intermediate Diplomacy section overseas, where reports after each project component is DEPARTMENT OF STATE appropriate. Eligible proposals will be concluded or quarterly, whichever is subject to compliance with Federal and less frequent. [Public Notice 4056] Bureau regulations and guidelines and 7. Cost-effectiveness: The overhead forwarded to Bureau grant panels for and administrative components of the Bureau of Educational and Cultural advisory review. Proposals may also be proposal should be kept as low as Affairs Request for Grant Proposals: reviewed by the Office of the Legal possible. All other items should be Educational Advising in Mexico City Adviser or by other Department necessary and appropriate. SUMMARY: The Educational Information elements. Final funding decisions are at 8. Cost-sharing: Proposals should and Resources Branch of the Bureau of the discretion of the Department of maximize cost-sharing through other Educational and Cultural Affairs (ECA) State’s Assistant Secretary for private sector support as well as announces an open competition to Educational and Cultural Affairs. Final institutional direct funding conduct educational advising in Mexico technical authority for grants resides contributions. City about post-secondary educational with the Bureau’s Grants Officer. Authority opportunities in the U.S. Public and private non-profit organizations meeting Review Criteria Overall grant making authority for the provisions described in Internal this program is contained in the Mutual Technically eligible applications will Revenue Code section 26 U.S.C. Educational and Cultural Exchange Act be competitively reviewed according to 501(c)(3) may submit proposals for of 1961, Public Law 87–256, as the criteria stated below. These criteria administering educational advising amended, also known as the Fulbright- are not rank ordered and all carry equal activities in Mexico City, Mexico. The Hays Act. The purpose of the Act is ‘‘to weight in the proposal evaluation: educational advising effort in Mexico 1. Program planning: Detailed agenda enable the Government of the United City would be part of the network of and relevant work plan should States to increase mutual understanding over 400 Department of State-affiliated demonstrate substantive undertakings between the people of the United States advising centers worldwide. These and logistical capacity. Agenda and plan and the people of other countries * * *; centers provide comprehensive and should adhere to the program overview to strengthen the ties which unite us unbiased information and guidance to and guidelines described above. with other nations by demonstrating the all interested students and scholars 2. Ability to achieve program educational and cultural interests, about accredited study opportunities in objectives: Objectives should be developments, and achievements of the the U.S. reasonable, feasible, and flexible. people of the United States and other Proposals should clearly demonstrate nations * * *and thus to assist in the Program Information how the institution will meet the development of friendly, sympathetic Overview program’s objectives and plan. and peaceful relations between the 3. Support of Diversity: Proposals United States and the other countries of The size of the university population should demonstrate substantive support the world.’’ The funding authority for in Mexico City and its proximity to the of the Bureau’s policy on diversity. the program above is provided through U.S. make it a critical location for Achievable and relevant features should legislation. providing accurate, unbiased be cited in both program administration information about how to gain access to (selection of participants, program Notice educational opportunities in the U.S. venue and program evaluation) and The terms and conditions published Services provided by the center must program content (orientation and wrap- in this RFGP are binding and may not include group and/or individual up sessions, program meetings, resource be modified by any Bureau advising informational sessions. The materials and follow-up activities). representative. Explanatory information advising center should provide accurate
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information and advising on the special requests for information from Budget Guidelines following topics: U.S. colleges, the MCAC REAC or the Bureau’s universities, and other accredited higher Educational Information and Resources The Bureau anticipates awarding one education institutions; the application Branch. The proposal should also grant in the amount of $70,000 to process to U.S. universities; majors and explain how the center will work with support program and administrative fields of study; testing requirements; life the Public Affairs and consular sections costs required to implement this in the U.S.; scholarship programs and of the U.S. Embassy in Mexico City to program. The Bureau encourages financial aid; and pre-departure collect information on the usage of the applicants to provide maximum levels orientation. Advisers will be eligible for center from applicants for student visas. of cost-sharing and funding from private training opportunities sponsored by the sources in support of its programs. Bureau, which will also provide a Fund-Raising/Cost Defrayment Grants awarded to eligible organizations with less than four years of experience limited selection of reference books and The proposal should explain what materials to the center. in conducting international exchange measures the advising center will take programs will be limited to $60,000. The proposal should describe in to generate income and to reduce detail the center’s location, facilities Applicants must submit a operating costs. A general introduction comprehensive budget for the entire (including the size and capacity of its to study opportunities in the U.S. and public spaces) and hours of operation, program, not to exceed $70,000. There access to basic resources must be must be a summary budget as well as staffing pattern (including percentage of available to all interested persons free of time each employee will devote to breakdowns reflecting both charge. To help cover the costs of administrative and program budgets. advising activities, and a description of operation, the center may charge a fee their functions and responsibilities), an for specialized services (such as Allowable costs for the program estimated budget for the office, and individual advising or test preparation include the following: information delineating the services that materials), that is reasonable by local (1) Salaries and benefits will be provided by the center. The standards to keep services accessible to (2) Office supplies and expenses, center should be capable of serving the majority of the population. including rent, communications, approximately 4,000 or more client Examples of cost-defrayment strategies postage and shipping inquiries per month, including visits, which centers are encouraged to (3) Outreach and publicity costs emails, faxes, and phone calls. The implement include using volunteers and proposal should also include a (4) Indirect costs charging for photocopying. The Please refer to the Solicitation description of what methods the center proposal should clearly indicate how and its headquarters or sponsoring Package for complete budget guidelines savings/income will be applied to the and formatting instructions. office will pursue to find additional operating costs of the advising center. sources of funding to supplement ECA Announcement Title and Number funding for operating costs. Coordination and Communication The proposal should also include All correspondence with the Bureau information about any websites that will The Mexico City educational advising concerning this RFGP should reference be developed to support the overall center should help to coordinate major the above title and number ECA/A/S/A– educational advising effort in Mexico. events such as adviser training 03–03. workshops and advising fairs with other In addition, the following elements FOR FURTHER INFORMATION CONTACT: The should be addressed in the proposal: educational advising centers in the region to prevent overlap and provide Educational Information and Resources Outreach visiting representatives of U.S. Branch, ECA/A/S/A, room 349 U.S. The center is encouraged to reach a institutions the opportunity to Department of State, 301 4th Street, wider and more diverse audience by participate in multiple advising fairs on SW., Washington, DC 20547, telephone organizing lectures and events outside the same trip. (202) 619–5434, fax (202) 401–1433, the center. These outreach activities [email protected] to request a The center should participate in Solicitation Package. The Solicitation should provide general information appropriate listservs and maintain about study opportunities in the U.S. Package contains detailed award contact with other educational advisers criteria, required application forms, and about the additional services and in MCAC and other regions. resources that may be obtained by specific budget instructions, and visiting the advising center. Proposals Professional Standards, Guidelines and standard guidelines for proposal should include outreach programs for Development preparation. Please specify Bureau the center and a detailed description of Program Officer Sharen Sheehan on all Educational advisers should adhere to other inquiries and correspondence. activities along with a proposed the OSEAS Standards of Ethical schedule of visits. Outreach activities Please read the complete Federal Conduct adopted by NAFSA: Register announcement before sending should include emphasis on reaching Association of International Educators. diverse and younger (secondary school inquiries or submitting proposals. Once age) populations. Guidelines the RFGP deadline has passed, Bureau staff may not discuss this competition Statistics Pending availability of funds, the with applicants until the proposal The center must submit monthly period of this grant is October 1, 2002 review process has been completed. statistics on the numbers of clients to September 30, 2003. Final awards cannot be made until funds have been To Download a Solicitation Package via served to the Mexico, Central American, Internet and Caribbean (MCAC) Regional appropriated by Congress, allocated and Educational Advising Coordinator committed through internal ECA Bureau The entire Solicitation Package may (REAC). The statistics should track procedures. be downloaded from the Bureau’s visitors to the center, phone calls, faxes, Programs must comply with J–1 visa website at http://exchanges.state.gov/ letters, emails, and website hits. The regulations. Please refer to Solicitation education/RFGPs. Please read all center must also be responsive to Package for further information. information before downloading.
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Deadline for Proposals influence in the selection process. 6. Institution’s Record/Ability: All proposal copies must be received Proposals should reflect advancement of Proposals should demonstrate an at the Bureau of Educational and these goals in their program contents, to institutional record of successful Cultural Affairs by 5 p.m. Washington, the full extent deemed feasible. exchange programs, including responsible fiscal management and full DC time on Thursday, August 1, 2002. Review Process Faxed documents will not be accepted compliance with all reporting at any time. Documents postmarked the The Bureau will acknowledge receipt requirements for past Bureau grants as due date but received on a later date of all proposals and will review them determined by Bureau Grant Staff. The Bureau will consider the past will not be accepted. Each applicant for technical eligibility. Proposals will performance of prior recipients and the must ensure that the proposals are be deemed ineligible if they do not fully demonstrated potential of new received by the above deadline. adhere to the guidelines stated herein applicants. Applicants must follow all and in the Solicitation Package. All 7. Project Evaluation: Proposals instructions in the Solicitation Package. eligible proposals will be reviewed by should include a plan to evaluate the The original and 6 copies of the the program office, as well as the Public Diplomacy section overseas, where activity’s success, both as the activities application should be sent to: U.S. unfold and at the end of the program. A Department of State, SA–44, Bureau of appropriate. Eligible proposals will be subject to compliance with Federal and draft survey questionnaire or other Educational and Cultural Affairs, Ref.: technique plus description of a ECA/A/S/A–03–03, Program Bureau regulations and guidelines and forwarded to Bureau grant panels for methodology to use to link outcomes to Management, ECA/EX/PM, Room 534, original project objectives is 301 4th Street, SW., Washington, DC advisory review. Proposals may also be reviewed by the Office of the Legal recommended. Successful applicants 20547. will be expected to submit intermediate Applicants must also submit the Adviser or by other Department elements. Final funding decisions are at reports after each project component is ‘‘Executive Summary’’ and ‘‘Proposal concluded or quarterly, whichever is Narrative’’ sections of the proposal on a the discretion of the Department of ″ State’s Assistant Secretary for less frequent. 3.5 diskette, formatted for DOS. These 8. Cost-effectiveness: The overhead documents must be provided in ASCII Educational and Cultural Affairs. Final technical authority for assistance and administrative components of the text (DOS) format with a maximum line proposal should be kept as low as length of 65 characters. The Bureau will awards grants resides with the Bureau’s Grants Officer. possible. All other items should be transmit these files electronically to the necessary and appropriate. Public Affairs Section at the US Review Criteria 9. Cost-sharing: Proposals should Embassy for its review, with the goal of maximize cost-sharing through other reducing the time it takes to get embassy Technically eligible applications will be competitively reviewed according to private sector support as well as comments for the Bureau’s grants institutional direct funding review process. the criteria stated below. These criteria are not rank ordered and all carry equal contributions. Diversity, Freedom and Democracy weight in the proposal evaluation: Authority Guidelines 1. Program planning: Detailed agenda Overall grant making authority for Pursuant to the Bureau’s authorizing and relevant work plan should this program is contained in the Mutual legislation, programs must maintain a demonstrate substantive undertakings Educational and Cultural Exchange Act non-political character and should be and logistical capacity. Plan should of 1961, Public Law 87–256, as balanced and representative of the adhere to the program overview and amended, also known as the Fulbright- diversity of American political, social, guidelines described above. Hays Act. The purpose of the Act is ‘‘to and cultural life. ‘‘Diversity’’ should be 2. Ability to achieve program enable the Government of the United interpreted in the broadest sense and objectives: Objectives should be States to increase mutual understanding encompass differences including, but reasonable, feasible, and flexible. between the people of the United States not limited to ethnicity, race, gender, Proposals should clearly demonstrate and the people of other countries * * *; religion, geographic location, socio- how the institution will meet the to strengthen the ties which unite us economic status, and physical program’s objectives and plan. with other nations by demonstrating the challenges. Applicants are strongly 3. Multiplier effect/impact: Proposed educational and cultural interests, encouraged to adhere to the programs should strengthen long-term developments, and achievements of the advancement of this principle both in mutual understanding, including people of the United States and other program administration and in program maximum sharing of information and nations * * * and thus to assist in the content. Please refer to the review establishment of long-term institutional development of friendly, sympathetic criteria under the ‘Support for Diversity’ and individual linkages. and peaceful relations between the section for specific suggestions on 4. Support of Diversity: Proposals United States and the other countries of incorporating diversity into the total should demonstrate substantive support the world.’’ The funding authority for proposal. Public Law 104–319 provides of the Bureau’s policy on diversity. the program above is provided through that ‘‘in carrying out programs of Achievable and relevant features should legislation. educational and cultural exchange in be cited in both program administration countries whose people do not fully (selection of participants, program Notice enjoy freedom and democracy,’’ the venue and program evaluation) and The terms and conditions published Bureau ‘‘shall take appropriate steps to program content (orientation and wrap- in this RFGP are binding and may not provide opportunities for participation up sessions, program meetings, resource be modified by any Bureau in such programs to human rights and materials and follow-up activities). representative. Explanatory information democracy leaders of such countries.’’ 5. Institutional Capacity: Proposed provided by the Bureau that contradicts Public Law 106–113 requires that the personnel and institutional resources published language will not be binding. governments of the countries described should be adequate and appropriate to Issuance of the RFGP does not above do not have inappropriate achieve the program or project’s goals. constitute an award commitment on the
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part of the Government. The Bureau extension of Runway 16–34, potential DEPARTMENT OF TRANSPORTATION reserves the right to reduce, revise, or extension of Runway 5R–23L, potential increase proposal budgets in accordance closure of Runway 5L–23R, taxiway Federal Aviation Administration with the needs of the program and the improvements, terminal development, availability of funds. Awards made will and associated ancillary development. RTCA Special Committee 199: Airport be subject to periodic reporting and Additional development that may be Security Access Control Systems evaluation requirements. assessed in this EIS include the AGENCY: Federal Aviation Notification expansion of the aircraft Remain Overnight areas and vehicle parking, Administration (FAA), DOT. Final awards cannot be made until and peripheral roadway improvements. funds have been appropriated by ACTION: Notice of RTCA Special Congress, allocated and committed Alternatives assessed in the EIS may Committee 199 meeting. through internal Bureau procedures. include, but may not be limited to: No- Build/No-Action; Reconstruct and SUMMARY: The FAA is issuing this notice Dated: June 20, 2002. shorten Runway 16/34 to accommodate to advise the public of a meeting of Rick A. Ruth, standard safety areas within the existing RTCA Special Committee 199: Airport Principal Deputy Assistant Secretary, Bureau [airport] footprint and construct Security Access Control Systems. of Educational and Cultural Affairs, associated terminal and roadway Department of State. DATES: projects; Reconstruct Runway 16/34 at The meeting will be held on July [FR Doc. 02–16155 Filed 6–26–02; 8:45 am] its existing pavement length with 12, 2002 starting at 9 a.m. BILLING CODE 4710–05–P standard safety areas and construct ADDRESSES: The meeting will be held at associated terminal and roadway RTCA, Inc., 1828 L Street, NW, Suite projects; and Extend Runway 16/34 and 805, Washington, DC 20036. DEPARTMENT OF TRANSPORTATION Runway 5R–23L, with standard safety FOR FURTHER INFORMATION CONTACT: Federal Aviation Administration areas and construct associated terminal and roadway projects. RTCA Secretariat, 1828 L Street, NW, Suite 805, Washington, DC 20036; Intent To Prepare Environmental The Rhode Island Airport Corporation Impact Statement and Hold telephone (202) 833–9339; fax (202) has convened a Study Resource 833–9434; Web site http://www.rtca.org. Environmental Scoping Meetings for Committee for community Airport Master Plan Development at representation during the continued SUPPLEMENTARY INFORMATION: Pursuant T.F. Green Airport, Warwick, RI development of the Airport Master Plan to section 10(a)(2) of the Federal AGENCY: Federal Aviation Update. To ensure that the full range of Advisory Committee Act (Pub. L. 92– Administration, DOT. issues related to the future Master Plan 463, 5 U.S.C., Appendix 2), notice is ACTION: Notice of intent to prepare are addressed and that all significant hereby given for a Special Committee Environmental Impact Statement and issues are identified, FAA intends to 199 meeting. The agenda will include: consult and coordinate with federal, hold environmental scoping meetings. • July 12: state and local agencies which have SUMMARY: The Federal Aviation jurisdiction by law or have specific • Opening Session (Welcome, Administration announces that it will expertise with respect to any Introductory and Administrative prepare an Environmental Impact environmental impacts that may result Remarks, Agenda Overview, Review Statement (EIS) for projects proposed in from any selected projects. An Minutes of Previous Meeting, the Airport Master Plan for T.F. Green environmental scoping meeting for Action Items from Last Meeting) Airport in Warwick, Rhode Island. these agencies will be held at the T.F. • Workgroup Reports, New Standard Public scoping meetings will be held to Green Airport, in the Mary Brennan Text, and Comments from ensure that all significant issues related Board Room located behind the Delta Members, as appropriate (Document to the proposed projects are identified. ticket counter at the Airport, at 1 p.m. Sections 1–4, Biometrics FOR FURTHER INFORMATION CONTACT: Mr. on Thursday, July 25, 2002. FAA will workgroup, Smart card workgroup, John Silva, Federal Aviation also solicit input from the public with Database workgroup) Administration, Airports Division, a public scoping meeting on Thursday, • ANE–600, 12 New England Executive July 25, 2002, from 5 p.m. to 8 p.m at Transportation Security Park, Burlington, MA 01803; Telephone Toll Gate High School, 575 Centerville Administration—Activity Review 781–238–7602. Road, Warwick, Rhode Island. In • Closing Session (Any Other SUPPLEMENTARY INFORMATION: The addition to providing input at the Business, Establish Agenda for Next Rhode Island Airport Corporation scoping meetings, agencies and the Meeting, Date and Place of Next (RIAC) is preparing an Airport Master public may submit written comments on Meeting) Plan and related Airport Layout Plan to the scope of the environmental study to • Workgroups Breakout Session identify and depict future the address identified in the FOR improvements to T.F. Green Airport in FURTHER INFORMATION CONTACT section of Attendance is open to the interested Warwick, Rhode Island. The Federal this notice. Comments must be public but limited to space availability. Aviation Administration will prepare an submitted by August 9, 2002. With the approval of the chairmen, EIS prior to approval of RIAC’s Airport members of the public may present oral Issued in Burlington, Massachusetts, on statements at the meeting. Persons Layout Plan or funding development June 12, 2002. depicted thereon. wishing to present statements or obtain Projects identified in the Airport Vincent A. Scarano, information should contact the person Master Plan that will be assessed in the Manager, Airports Division, New England listed in the FOR FURTHER INFORMATION EIS include reconstruction of Runway Region, Federal Aviation Administration. CONTACT section. Members of the public 16–34, provision for full Run way Safety [FR Doc. 02–16167 Filed 6–26–02; 8:45 am] may present a written statement to the Areas for Runway 16–34, potential BILLING CODE 4910–13–M commitment at any time.
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Issued in Washington, DC, on June 17, whole or in part, no later than July 22, Administration’s (MARAD’s) intentions 2002. 2002. to request extension of approval for Norman T. Fujisaki, The following is a brief overview of three years of a currently approved Deputy Director, System Architecture and the request. information collection. Investment Analysis. The Smohomish County Airport/ DATES: Comments should be submitted [FR Doc. 02–16168 Filed 6–26–02; 8:45 am] Paine Field requests the release of 14.50 on or before August 26, 2002. acres of non-aeronautical airport BILLING CODE 4910–13–M FOR FURTHER INFORMATION CONTACT: property to the Snohomish County Parks Department. The purpose of this Kathleen Dunn, Maritime Administration, Office of Ports and DEPARTMENT OF TRANSPORTATION release is to transfer land, which has been predominately leased by the Parks Domestic Shipping, 400 Seventh Street Federal Aviation Administration Department from the airport for nearly Southwest, Washington, DC 20590. 20 years. The Parks Department plans to Telephone: 202–366–2307, FAX: 202– Notice of Intent To Rule on Request To continue to use the property as a little 366–6988; or E-mail: Release Airport Property at the league ballpark facility. The parcel [email protected]. Copies Snohomish County Airport/Paine Field, proposed for sale has not been used for of this collection can also be obtained Everett, WA aviation purposes and no aeronautical from that office. SUPPLEMENTARY INFORMATION: AGENCY: use of the property is planned or Federal Aviation Title of Collection: Application for Administration (FAA), DOT. anticipated. Snohomish County, a political subdivision of the State of Waiver of the Coastwise Trade Laws for ACTION: Notice of request to release Washington, on behalf of the Small Passenger Vessels. airport property. Snohomish County Airport/Paine Field Type of Request: Extension of SUMMARY: The FAA proposes to rule and requests the release from the terms, currently approved information invite public comment on the release of conditions, reservations, and collection. land at Snohomish County Airport/ restrictions imposed upon the property OMB Control Number: 2133–0529. Form Numbers: None. Paine Field under the provisions of deeded to the Airport by the United Expiration Date of Approval: Section 125 of the Wendell H. Ford States of America, and the release of the December 31, 2002. Aviation Investment Reform Act for the subject property from any assurances of Summary of Collection of 21st Century (AIR 21). the County as sponsor as contained in any FAAP, ADAP, or AIP grant Information: Owners of ship vessels DATES: Comments must be received on desiring waiver of the coastwise trade or before July 22, 2002. agreement. The release of the property will benefit the users of the airport as laws affecting small passenger vessels ADDRESSES: Comments on this the fair market value revenues generated will be required to file a written application may be mailed or delivered from the sale of this property will be application and justification for waiver to the FAA at the following address: Mr. applied to offset costs incurred by the to the Maritime Administration J. Wade Bryant, Manager, Federal airport for the 2000 Runway Safety Area (MARAD). The agency will review the Aviation Administration, Northwest Project. Any person may inspect the application and make a determination Mountain Region, Seattle Airports request in person at the FAA office whether to grant the requested waiver. District Office, 1601 Lind Avenue, SW., listed under FOR FURTHER INFORMATION Need and Use of the Information: Suite 250, Renton, Washington 98055– CONTACT. MARAD requires the information in 4056. In addition, any person may, upon order to process applications for waivers In addition, one copy of any request, inspect the application, notice of the coastwise laws and to determine comments submitted to the FAA must and other documents germane to the the effect of waivers of the coastwise be mailed or delivered to Mr. Dave application in person at the Snohomish trade laws on United States vessel Waggoner, Airport Director, 3220–100th County Airport, 3220—100th Street, builders and United States-built vessel Street, SW., Everett, Washington 98204– SW., Everett, Washington 98204–1390. coastwise trade businesses. 1390. Description of Respondents: Small FOR FURTHER INFORMATION CONTACT: Mr. Issued in Renton, Washington on May 30, passenger vessel owners desirous of 2002. Jeff Winter, Project Manager, Federal operating in the coastwise trade. Aviation Administration, Northwest J. Wade Bryant, Annual Responses: one. Mountain Region, Seattle Airports Manager, Seattle Airports District Office. Annual Burden: one hour. District Office, 1601 Lind Avenue, SW., [FR Doc. 02–16169 Filed 6–26–02; 8:45 am] Comments: Comments should refer to Suite 250, Renton, Washington 98055– BILLING CODE 4910–13–M the docket number that appears at the 4056. top of this document. Written comments The request to release property may may be submitted to the Docket Clerk, be reviewed in person at this same DEPARTMENT OF TRANSPORTATION U.S. DOT Dockets, Room PL–401, 400 location, by appointment. Maritime Administration Seventh Street, SW., Washington, DC SUPPLEMENTARY INFORMATION: The FAA 20590. Comments may also be invites public comment on the request [Docket No. MARAD–2002–12545] submitted by electronic means via the to release property at the Snohomish Internet at http://dmses.dot.gov/submit. Information Collection Available for County Airport/Paine Field under the Specifically address whether this Public Comments and provisions of the AIR 21. information collection is necessary for On May 30, 2002, the FAA Recommendations proper performance of the functions of determined that the request to release ACTION: Notice and request for the agency and will have practical property at Snohomish County Airport/ comments. utility, accuracy of the burden Paine Field submitted by the county met estimates, ways to minimize this the procedural requirements of the SUMMARY: In accordance with the burden, and ways to enhance the Federal Aviation Regulations, Part 155. Paperwork Reduction Act of 1995, this quality, utility, and clarity of the The FAA may approve the request, in notice announces the Maritime information to be collected. All
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comments received will be available for In order to implement the law, a set must be signed and contain the examination at the above address of procedures has been established to following information: between 10 a.m. and 5 p.m. EDT (or expedite waiver processing. As part of (a) Name of vessel including official EST), Monday through Friday, except the application procedure MARAD or state registration number, and owner Federal Holidays. An electronic version requires a period of public notice, for which waiver is requested. of this document is available on the which includes the publication of (b) Size, capacity and tonnage of World Wide Web at http://dms.dot.gov. applications for a waiver for 30 days for vessel (state whether tonnage is Dated: June 21, 2002. public review in the Federal Register. measured pursuant to 46 U.S.C. 14502, By Order of the Maritime Administrator. After the public notice period or otherwise, and if otherwise, how Joel C. Richard, MARAD uses all sources available to measured). determine if there will be an ‘‘undue Secretary, Maritime Administration. adverse affect’’ on existing operators (c) Intended use for vessel, including [FR Doc. 02–16204 Filed 6–27–02; 8:45 am] and boat builders. The waiver will not geographic region of intended operation BILLING CODE 4910–81–P be issued if it is determined by MARAD and trade. [A good definition of the that the action will unduly adversely geographic region is important because affect operators of U.S.-built vessels or it will assist MARAD in determining if DEPARTMENT OF TRANSPORTATION U.S. shipyards. Lastly, there is a review the issuance of a waiver will have an adverse impact on current operators. Maritime Administration procedure and a waiver revocation process if the vessel’s use changes The waiver, if granted, will limit the substantially after the waiver is issued operation of the vessel to the geographic [Docket Number: MARAD–2002–12540] and the change causes adverse impact. area specified by the applicant.] (d) Date and place of construction and Requested Administrative Waiver of It is MARAD’s goal to make all waiver (if applicable) rebuilding. (If applicant is the Coastwise Trade Laws decisions by September 16, 2002 to include the Maritime Administrator’s unable to determine the origin of the AGENCY: Maritime Administration, 10-day recision period before waiver vessel, foreign construction will be Department of Transportation. authority expires September 30, 2002. assumed). ACTION: Notice of deadline for Basic Eligibility Requirements (e) Name, address, and telephone submitting waiver applications under number of vessel owner. existing waiver authority. (a) The vessel must have been built (f) A statement on the impact this outside the United States and be at least waiver will have on other commercial SUMMARY: Pursuant to Public Law 105– three years old. passenger vessel operators, including a (b) The vessel will not be allowed to 383, the Secretary of Transportation, as statement describing the operations of carry more than 12 passengers. represented by the Maritime existing operators. Administration (MARAD), is authorized (c) The vessel must be of at least 5 net (g) A statement on the impact this to grant waivers of the U.S.-build tons and not registered under the laws waiver will have on U.S. shipyards. requirement of the coastwise laws under of a foreign country. certain circumstances. However, (d) The vessel’s ownership must meet You must enclose a non-refundable MARAD’s authority to grant waivers U.S. citizenship requirements. application fee for each waiver expires September 30, 2002. To allow (e) The vessel must meet all other U.S. requested, in the form of a check or adequate time for application processing Coast Guard requirements for a money order for $300, made out to the and public comment, all new Coastwise Trade Endorsement before it order of ‘‘Maritime Administration— applications should be received by can engage in commercial service. It is Transportation.’’ MARAD as soon as possible but no later the responsibility of the applicant to MARAD may ask additional questions than August 1, 2002. Any certificate or ensure a proposed vessel meets these of the applicant and, as part of the endorsement already issued shall standards. For information, please application review process, consider continue in effect until otherwise contact the Coast Guard’s National public comment, internal investigation invalidated or revoked under chapter Vessel Documentation Center on 1–800– and analysis, or any other sources or 121 of title 46, United States Code. 799–8362. information deemed appropriate. FOR FURTHER INFORMATION CONTACT: How to Make Application Process Kathleen Dunn, U.S. Department of Applications should reach us no later Your waiver request will be published Transportation, Maritime than August 1, 2002 since our waiver in the Federal Register as soon as Administration, MAR–832 Room 7201, authority expires September 30, 2002. practicable for a period of 30 days for 400 Seventh Street, SW., Washington, Also, because US Postal Service mail public comment. After the 30-day DC 20590. Telephone 202–366–2307. has been delayed in reaching our office public comment period, MARAD will SUPPLEMENTARY INFORMATION: Title V of since October 2001 you may wish to use review all information available and Public Law 105–383 provides authority an alternate carrier to submit your issue a decision. It is our goal to make to the Secretary of Transportation to request. Please apply in writing to the a decision on every application by administratively waive the U.S.-build Maritime Administration at the September 16, 2002. requirements of the Jones Act, Section following address. Secretary, Maritime 27 of the Merchant Marine Act of 1920, Administration, MAR–120 Room 7210, A complete copy of the formal rule as amended, 46 App. U.S.C. 883, and 400 7th Street, SW., Washington, DC regarding this program can be found on other statutes, for small commercial 20590. the World Wide Web at http:// passenger vessels (no more than 12 The application will be for an dms.dot.gov. Once into the Document passengers). This authority has been administrative waiver of the coastwise Management System, ‘‘search’’ under delegated to the Maritime laws of the United States for an eligible docket number 5915, the final rule Administration per 49 CFR § 1.66, vessel to carry no more than twelve (12) appears as the last document entered, Delegations to the Maritime passengers for hire. The application document 6. Administrator, as amended. need not be in any particular format, but Dated: June 24, 2002.
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By Order of the Maritime Administrator. 21) (Public Law 105–178 (1998), What Projects Are Eligible for Funding? Joel C. Richard, codified at 49 U.S.C. 111(g)). BTS Proposals should serve the broad Secretary, Maritime Administration. anticipates awarding up to $500,000 per transportation interests of the country, [FR Doc. 02–16267 Filed 6–26–02; 8:45 am] year in grants for projects that (1) and we are particularly interested in BILLING CODE 4910–81–P support development of the field of high-quality proposals that treat one or transportation statistics; and/or (2) more of the following areas: advance research or development in (1) Measuring the vulnerability of the DEPARTMENT OF TRANSPORTATION transportation statistics. transportation system and its users to BTS is a separate operating crime and terrorism; Bureau of Transportation Statistics administration within the U.S. (2) Visualizing and mining of Department of Transportation (DOT). Its Grant Program for Research and transportation databases; mission is to lead in developing Development in the Field of (3) Aggregating and analyzing transportation data and information of Transportation Statistics databases maintained by DOT agencies, high quality, and to advance their especially where the research involves AGENCY: Bureau of Transportation effective use in public and private multiple modes of transportation; Statistics (BTS), DOT. transportation decision-making. In (4) Improving the quality and ACTION: Notice of new grant cycle. accomplishing this mission, BTS works usability of federal transportation to improve six key attributes of statistics; SUMMARY: The BTS supports its goal of transportation data and analysis— (5) Designing and analyzing advancing the field of transportation quality, comparability, completeness, transportation surveys; statistics through the Transportation timeliness, relevance, and utility. (6) Developing exposure measures Statistics Research Grants program. This Our ultimate goal is to make (e.g., vehicle miles traveled) for use in notice solicits applications for projects transportation better—to enhance safety, risk analyses; that support the development of the mobility, economic growth, the human (7) Improving the statistical use of field of transportation statistics; and/or and natural environment, and national geographic information systems to better involve research or development in security (the five strategic goals of the understand and quantify travel transportation statistics. It outlines the Department of Transportation). BTS’s behavior; purpose, goals, and general procedures role in this goal is to provide data and (8) Developing performance measures for application and award. For this information that others need to make for the transportation system; cycle, BTS will make available up to decisions concerning transportation. We (9) Applying small area estimation approximately $256,000 in grant funds collect data and compile, analyze, and techniques to transportation; to eligible organizations. publish statistics. BTS is seeking (10) Improving data quality and data DATES: For BTS to consider your assistance in building and developing collection; and application, we must receive it by this knowledge base. (11) Enhancing or extending the August 7, 2002, at 5 p.m. Eastern While there are many excellent National Transportation Library to Standard Time. Applications received transportation data programs and many better express or incorporate statistical after August 7, 2002, will be held for the excellent statistics programs, few are analyses. next cycle, which is anticipated to be devoted to the intersection of these two This list is not exhaustive, and we are every six to twelve months, unless you disciplines. Bringing a better eager to consider any innovative request in writing that your application understanding of statistics to proposal that supports the development be returned. transportation data will improve data of the field of transportation statistics or ADDRESSES: You must send six copies of quality, increase utility (e.g., by involves research and development in the application package to the BTS improving measures of travel), and transportation statistics. In this cycle, Grants Program, Room 3117, Bureau of reduce costs (e.g., by using techniques we will give priority consideration to Transportation Statistics, U.S. to make data collection, analysis, and proposals for innovative research on the Department of Transportation, 400 dissemination more efficient). BTS security of our transportation system. Seventh Street, SW., Washington, DC wants to foster the transportation What Are the Cost Sharing 20590. statistics discipline and increase its Requirements? FOR FURTHER INFORMATION CONTACT: quality and usefulness to the transportation community. This grants For awards of $100,000 or more, the Promod Chandhok, Office of Statistical recipient shall fund at least 50 percent Programs, Bureau of Transportation program is one way BTS is working toward this goal. of the project’s costs. The nonfederal Statistics, Room 3117, 400 Seventh match must come from sources other Street, SW., Washington, DC 20590; II. Eligibility Requirements than the project sponsor, and must be phone (202) 366–2158; fax: (202) 493– What Organizations May Apply? cash contributions rather than in-kind 0568; e-mail: contributions. In reviewing all [email protected]. BTS invites applications from public applications, even those requesting less SUPPLEMENTARY INFORMATION: and private non-profit entities. We than $100,000, the degree of cost- strongly encourage Minority Serving sharing will be considered, with more I. Background—Advancing the Institutions, which have been weight given to cash contributions than Discipline of Transportation Statistics traditionally under-represented in in-kind services. The purpose of this grant program is transportation statistics, to submit to provide financial assistance to applications. If organizations partner on III. Application Contents eligible organizations to help advance a project, the participants should submit For more information about the discipline of transportation a single application. You may submit submitting your application, please refer statistics. These grants are authorized by more than one application as long as the to the ADDRESSES and DATES sections section 5109 of the Transportation applications are for separate and listed above. In order to be considered Equity Act for the 21st Century (TEA– distinct projects. for funding under this program, your
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application package must include the solicitation. While BTS will select the has not established minimum or following: most meritorious proposals, we may maximum funding levels. (1) A Project Narrative. This must not choose to not award all available funds. Given the amount of funds available, exceed eight letter-size pages, single- Upon receiving an application, BTS applicants are strongly encouraged to sided and double-spaced. Use at least will conduct an initial review to seek other funding opportunities to 12-point type and one inch margins. In determine if it meets the eligibility supplement the federal funds. general, the information you provide criteria and contains all of the items Preference will be given to applicants should be in sufficient detail so BTS specified under the Application with cost sharing proposals from within understands the proposed work and its Contents section of this announcement. or outside their organizations. anticipated benefits. It should also A BTS evaluation committee will then The period of time of awards will vary demonstrate that you have the necessary review each complete application from with the complexity of the project and experience and resources to accomplish an eligible recipient using the it is possible that grants will be awarded it. The narrative must identify the evaluation criteria listed below (the for periods greater than one year. organization; how it meets the eligibility order of criteria does not designate VI. BTS Involvement criteria; its experience and priority) and the BTS Director will BTS involvement, if any, will vary by accomplishments in collecting, select the final grants. The evaluation award. If you anticipate BTS analyzing, and/or disseminating criteria are: transportation data; and the involvement, you must note this in your (1) How well does the proposal project narrative and any support BTS qualifications of the principals proposed support BTS’s strategic goals of to conduct the activities. The narrative provides will be specified in the award improving the quality, comparability, agreement. BTS will assign a liaison to must also describe the proposed completeness, timeliness, relevance, activity, including how you would serve as the primary contact regarding and utility of transportation data? How the grant. accomplish it, a timeline listing major well does the proposal serve the broad milestones associated with the project, transportation interests of the United VII. Terms and Conditions of Award and a list of specific products and/or States? (1) Prior to award, each grantee will services with the dates they will be (2) How innovative is the proposed be required to complete additional delivered. activity? To what extent is the work (2) An Application for Federal government application forms, such as being accomplished elsewhere? Assistance. Submit OMB SF–424 OMB SF–424B (Assurances— (3) How much experience has the (Application for Federal Assistance), Nonconstruction Programs) and with applicant demonstrated in one or more which is the official form required for the certification requirements of 49 CFR of the following areas—collecting, all federal grants. It requests basic Part 20, Department of Transportation analyzing, storing, or disseminating information about the grantee and the New Restrictions on Lobbying, and 49 transportation data, particularly data proposed project. Under Part 10 of this CFR Part 29, Department of collected or disseminated by BTS, and form, use 20.920 and Transportation Transportation Government-Wide working with theoretical statistical Statistics Research Grants for the Debarment and Suspension (Non- issues concerning transportation data? Catalog of Federal Domestic Assistance Procurement) and Government-Wide Number and Title. Also submit OMB (4) Does the applicant have the Requirements for Drug Free Workplace SF–424A (Budget Information— professional qualifications and team (Grants). (2) Each grantee shall submit a Nonconstruction Programs). You can members necessary for satisfactory program implementation plan no more download these forms from the OMB performance of the proposed activity? than one month after award. The BTS Internet site at http:// (5) How well does the technical liaison will review and comment, if www.whitehouse.gov/omb/grants. approach and proposed costs reflect an (3) An Evaluation Plan. Include a brief understanding of the procedures necessary. (3) Each grantee shall submit description of how you will evaluate necessary to complete the required quarterly progress reports, a draft final and measure the success of the project, tasks? report, and a final report that reflects the including the anticipated benefits and (6) To what degree does the proposal BTS liaison’s comments. challenges in completing it. This can be include cost-sharing? More weight will Thank you for your interest in our part of the Project Narrative. be given to proposals with cash Transportation Statistics Research (4) Resumes. Include resumes from up contributions than in-kind services. For Grants program. to three key personnel who would be awards of $100,000 or more, BTS significantly involved in the project. requires cash contributions of 50 Ashish Sen, (5) Letters of Commitment. If your percent toward the total project’s cost. Director. proposal includes the significant V. Amount of Funds Available and [FR Doc. 02–16181 Filed 6–26–02; 8:45 am] involvement of other eligible Period of Support BILLING CODE 4910–HY–P organizations, your application must include letters of commitment from We anticipate that approximately them. $500,000 per year will be designated to support grants over the next five years, DEPARTMENT OF VETERANS IV. Application Review Process and subject to the availability of AFFAIRS Selection Criteria appropriated funds. This estimate does [OMB Control No. 2900–0545] The Transportation Statistics not bind BTS to a specific number of Research Grants program uses a offers or awards, nor to a specific Agency Information Collection competitive process and applications amount of funding support for Activities Under OMB Review will be evaluated based on the merit and particular awards or awards in AGENCY: Veterans Benefits relevance of the proposed project in aggregate. It is anticipated that Administration, Department of Veterans relation to the other applications individual award amounts, based upon Affairs. received. BTS anticipates making demonstrated needs, will likely range ACTION: Notice. multiple awards based on this from $50,000 to $200,000, though BTS
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SUMMARY: In compliance with the [email protected]. Please unless it displays a currently valid OMB Paperwork Reduction Act (PRA) of 1995 refer to ‘‘OMB Control No. 2900–0545.’’ control number. The Federal Register (44 U.S.C., 3501 et seq.), this notice Send comments and Notice with a 60-day comment period announces that the Veterans Benefits recommendations concerning any soliciting comments on this collection Administration (VBA), Department of aspect of the information collection to of information was published on April Veterans Affairs, has submitted the VA’s OMB Desk Officer, OMB Human 15, 2002, at page 18306. collection of information abstracted Resources and Housing Branch, New Affected Public: Individuals or below to the Office of Management and Executive Office Building, Room 10235, households. Washington, DC 20503 (202) 395–7316. Budget (OMB) for review and comment. Estimated Annual Burden: 7,500 Please refer to ‘‘OMB Control No. 2900– The PRA submission describes the hours. 0545’’ in any correspondence. nature of the information collection and Estimated Average Burden Per its expected cost and burden; it includes SUPPLEMENTARY INFORMATION: Title: Report of Medical, Legal, and Respondent: 45 minutes. the actual data collection instrument. Other Expenses Incident to Recovery for Frequency of Response: On occasion. DATES: Comments must be submitted on Injury or Death, VA Form 21–8416b. Estimated Number of Respondents: or before July 29, 2002. OMB Control Number: 2900–0545. 10,000. Type of Review: Extension of a Dated: June 18, 2002. FOR FURTHER INFORMATION OR A COPY OF currently approved collection. THE SUBMISSION CONTACT: Denise Abstract: The data collected is used to By direction of the Secretary: McLamb, Information Management report expenses incident to recovery of Genie McCully, Service (045A4), Department of benefits for injury or death. Acting Director, Information Management Veterans Affairs, 810 Vermont Avenue, An agency may not conduct or Service. NW., Washington, DC 20420, (202) 273– sponsor, and a person is not required to [FR Doc. 02–16288 Filed 6–26–02; 8:45 am] 8030, FAX (202) 273–5981 or e-mail: respond to a collection of information BILLING CODE 8010–01–P
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Corrections Federal Register Vol. 67, No. 124
Thursday, June 27, 2002
This section of the FEDERAL REGISTER DEPARTMENT OF EDUCATION Friday, May 31, 2002, make the contains editorial corrections of previously following correction: published Presidential, Rule, Proposed Rule, Federal Pell Grant, Federal Perkins On page 38080, in the table at the top and Notice documents. These corrections are Loans, Federal Work-Study, Federal of the page, under the heading Number prepared by the Office of the Federal Supplemental Educational Opportunity in College--, in the third column, in the Register. Agency prepared corrections are Grant, Federal Family Education Loan, issued as signed documents and appear in fourth line, ‘‘23,900 ’’ should read the appropriate document categories and William D. Ford Federal Direct ‘‘23,990 ’’. Loan Programs elsewhere in the issue. [FR Doc. C2–13704 Filed 6–26–02; 8:45 am] Correction BILLING CODE 1505–01–D In notice document 02–13704 beginning on page 38079 in the issue of
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Part II
National Gaming Commission 25 CFR Part 542 Minimum Internal Control Standards; Final Rule
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NATIONAL INDIAN GAMING solicited input and guidance from our Director, Morongo Gaming Agency, COMMISSION own employees, many of whom work Morongo Band of Mission Indians; Lisa closely with Indian country to monitor B. Whetzel, Director, Kaw Nation 25 CFR Part 542 compliance with the existing regulation. Enterprise Development Authority, Kaw RIN 3141–AA24 In addition to receiving input from our Nation; and Saunie K. Wilson, senior staff within the Washington, DC Executive Secretary, Oglala Sioux Tribal Minimum Internal Control Standards office, we also obtained input from staff Gaming Commission, Oglala Sioux. The working directly with Tribal gaming Advisory Committee also included the AGENCY: National Indian Gaming operations. This gathering of following Commission representatives: Commission. information culminated with a series of Teresa E. Poust, Commissioner; Joe H. ACTION: Final rule. conference calls with our Regional Smith, Acting Director of Audits; Offices and auditing staff where we Michele F. Mitchell, Attorney; Timothy SUMMARY: In response to the inherent reviewed each provision of the B. Russ, Financial Analyst; and Denise risks and the need for effective controls regulation. Also reviewed were the Desiderio, Assistant to the Commission. in tribal gaming operations, the numerous comments received in Also important to the success of this Commission, in 1999, developed response to the advance notice of process was the involvement of a Minimum Internal Control Standards proposed rulemaking. Comments and professional facilitator, Juliette A. (MICS). Since their original suggestions received from our Falkner, of Carr, Falkner & Swanson. implementation, it has become obvious employees, emanating from actual, Ms. Falkner was instrumental in that the MICS require technical hands-on experience with the MICS, keeping the Committee focused on our adjustments and revisions so that they helped identify certain areas with which goals and realizing our optimistic may continue to be effective in Commission employees had found timeframe for completion. protecting tribal assets, while allowing difficulty. This input proved critical The tribal and federal representatives Tribes to utilize technological advances over the next several months as we on the Advisory Committee worked in the gaming industry. To that end, this worked to revise the regulation. together as a team, guided by a final rule contains numerous revisions In keeping with its commitment to Partnership Agreement developed at its to the Commission’s existing MICS that consultation and recognizing the first meeting. An important component provide clarification of the rules and the government-to-government relationship of this Partnership Agreement was that flexibility to allow tribal gaming it shares with Tribes, the Commission decision-making would be done by operations to make use of technological solicited nominations of individuals consensus. Without concurrence from advances. interested in serving on an Advisory all Committee members on a proposed DATES: Effective Date: July 29, 2002. Committee designed to assist in revising change, none would be made. While a Compliance Date: Each Tribal gaming the MICS. Ten (10) tribal representatives particular change may not be regulatory authority shall, in accordance were selected based on several factors, representative of an individual’s first with the Tribal gaming ordinance, including the experiences and preference, it was something found to be establish and implement tribal internal backgrounds of the individuals within acceptable limits. As such, this control standards within six (6) months nominated, the size(s) of their gaming rule represents a series of compromises of June 27, 2002, that satisfy the operation(s), the types of games played made by all members of the Advisory requirements of § 542.3 herein. For at their gaming operation(s), and the Committee after much discussion. those Tribes whose tribal internal areas of the country their gaming The Commission worked closely with control standards already satisfy the operation(s) are located. The selection the Advisory Committee to address their requirements of § 542.3, no action is process was a difficult one as numerous concerns about the existing MICS and to necessary. highly qualified individuals expressed address the nearly one hundred an interest in serving on this important comments received in response to the FOR FURTHER INFORMATION CONTACT: Joe Committee. As expected, the value advanced notice of proposed H. Smith, 202–632–7003 or 503–326– added by involving tribal rulemaking. Between May and 7050. representatives who work daily with the November 2001, the Commission SUPPLEMENTARY INFORMATION: MICS was immeasurable. sponsored six working meetings. During Those participating on the behalf of these meetings, every clause of the Background Tribes as members of this Advisory existing MICS was reviewed and every On January 5, 1999, the Commission Committee were: Jamie Hummingbird, comment submitted to the Commission first published its Minimum Internal Director, Cherokee Nation Gaming was considered. Each meeting was held Control Standards (MICS) as a Final Commission, Cherokee Nation; Patrick in a different region of the country, rule. Since this time, as gaming Tribes H. Lambert, Executive Director, Eastern enabling visits to a number of tribal and the Commission gained practical Band of Cherokee Gaming Commission, gaming operations. These visits experience with the MICS, it became Eastern Band of Cherokee; Stephen R. provided valuable, first-hand experience apparent that some of the standards Lewis, Commissioner, Gila River with technological advances and required clarification or modification to Gaming Commission, Gila River Indian concerns expressed during the comment operate as the Commission had Community; Kristin L. Lumley, period. Changes were made to the intended. Also recognizing the changes Executive Director, Yakama Nation existing MICS based on comments, and advances in Indian gaming and Gaming Commission, Yakama Nation; input from Advisory Committee gaming technology since John Monforte, Executive Director, members, and data gathered during site implementation, on November 27, 2000, Acoma Gaming Commission, Pueblo of visits. At the conclusion of this process, the Commission published an advanced Acoma; Kevin F. O’Toole, Executive the Commission published the Proposed notice of proposed rulemaking Director, Oneida Nation Gaming Rule in the Federal Register on requesting public comments on the Commission, Oneida Nation of New December 26, 2001. implementation of the MICS. York; Sandra Plawman, Treasurer, Ho- On February 5, 2002, the Commission Along with requesting public Chunk Nation Gaming Commission, Ho- hosted a public hearing on the Proposed comments, the Commission also Chuck Nation; Jerome J. Schultze, Rule. This hearing provided an
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excellent opportunity for individuals to minimum internal control standards are provides the clearest guidance to Tribes provide comment about the regulation necessary, and that the promulgation of of their obligations under the MICS. to both the Commission and to members these standards is a permissible exercise The Commission recognizes that some of the Advisory Committee. A total of of its statutory authority to promulgate Tribes may find it beneficial to have twenty (20) individuals presented such regulations and guidelines as it separate internal control standards for testimony at this hearing. deems appropriate to implement the class II and class III games. The most The Commission received provisions of IGRA. effective method of tailoring these MICS approximately ninety (90) comments in The lengthy discussion amongst for class II and/or class III operations is response to publication of the Proposed members of the Advisory Committee in the development of tribal internal Rule. During the final meeting of the regarding authority also included a control standards as discussed below. Advisory Committee, held in April discussion as to whether the MICS Tribal Internal Control Standards 2002, each comment was reviewed and should be promulgated as recommended utilized to draft a Final Rule. The full guidelines versus a mandatory rule. Indian gaming is and always will be Commission then approved this Final Several commenters also made this very diverse. The Commission therefore Rule. proposal. The Commission continues to recognizes that developing one set of MICS to address all situations in every believe that the MICS should be issued General Comments tribal gaming operation is not possible. as a rule. Authority It is not intended for Tribes to simply MICS Structure adopt these MICS verbatim as tribal More than half of the commenters, as internal control standards. Instead, During both comment periods, several well as members of the Advisory Tribal gaming regulatory authorities suggested that the Commission develop Committee, question the Commission’s should utilize the following to develop separate MICS for class II and class III authority to promulgate this rule, their own internal control standards as gaming. Along these lines, several particularly as it pertains to class III provided for in § 542.3(c) of this part. gaming. Members of the Advisory Advisory Committee members For example, a number of commenters Committee agreed to participate in the submitted proposals structuring the suggested removing § 542.15 process of revising the MICS, despite MICS so that the document itself was (establishing minimum internal control their position that the Commission may divided into class II and class III MICS. standards for credit) from the MICS be without authority to promulgate During consideration, a second because their operation does not extend minimum internal controls for class III alternative was discussed: that is, credit, or because they are prohibited gaming. The Commission acknowledges separating the MICS based upon tiers. A from doing so by their Tribal-State that the participation of tribal common complaint of tier A and B compact. Similarly, many operations do representatives in this process does not operations is that the existing MICS are not participate in pari-mutuel wagering, in any way indicate concurrence in the confusing as to which requirements or offer roulette. The Commission Commission’s determination that it does apply and which do not. realizes that gaming operations do not have the statutory authority to establish As with the original rule, this rule is play all games or utilize all procedures and enforce these regulations. not designed to classify games into class contained herein, and it is for this Internal controls are the primary II or class III. Rather, the MICS address reason that we do not call for wholesale procedures used to protect the integrity the control issues related to the adoption of these MICS. of casino funds and games, and are a particular game. Pull tabs, for example, If an operation does not utilize credit, vitally important part of properly can be played as a class II or a class III these provisions of the MICS do not regulated gaming. Inherent in gaming game depending on the nature and have to be included in the tribal internal operations are problems of customer circumstances of their play. Section control standards. If craps, roulette, or and employee access to cash, 542.8 pertaining to pull tabs applies poker, are not offered, standards unrecorded cash transactions at table regardless of whether they are being regarding these games do not have to be games, questions of the fairness of played as class II or class III gaming. included in the tribal internal control games, and the threat of collusion to After extensive discussion, the standards. If the Tribal gaming circumvent controls. Internal control Committee reached consensus on regulatory authority prefers having standards are therefore commonplace in dividing the MICS along tier lines rather separate internal controls for class II and the gaming industry and the than game classification, recognizing class III games, the tribal internal Commission recognizes that many that the requirements placed upon tribal control standards can be written in this Tribes had sophisticated internal gaming operations should differ based fashion. Tribal internal control control standards in place prior to the upon their annual gross gaming standards should be developed in a Commission’s original promulgation of revenue. A number of commenters on manner that addresses the particular the MICS. the proposed rule indicated that they needs and desires of the Tribe. Doing so For the Commission to appropriately found this new structure helpful. allows tailoring of the MICS to meet the fulfill it responsibilities under the This final rule is organized essentially individual needs of a diverse industry. Indian Gaming Regulatory Act (IGRA), it in two parts. Sections 542.1 through It is also within the tribal internal follows that there must exist some rules 542.18 contain both general provisions control standards that the Tribal gaming for the handling of cash and the tracking and standards relating to particular regulatory authority can elect to develop of transactions that occur with great categories of games. Beginning with standards that are more stringent than frequency in a gaming operation. These § 542.20, the rule is then divided based those contained herein. Many MICS are designed to establish baseline, upon tier. Sections 542.20 through commenters made recommendations or minimum standards, required of 542.23 apply only to Tier A gaming that would increase the minimum Indian gaming operations. There is no operations; §§ 542.30 through 542.33 standards set by this regulation. doubt that the MICS provide the apply only to Tier B operations; and Although the Commission appreciates Commission with a significant tool for §§ 542.40 through 542.43 apply only to and commends the desire of some to achieving the stated purposes of IGRA. Tier C operations. The Commission increase the stringency of these The Commission firmly believes that continues to believe that this structure standards, these MICS are considered
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minimums; the base upon which tribal was reviewed from multiple gaming to this final rule. Therefore, regulators should build their regulatory jurisdictions indicating that such grandfathering was not incorporated. structure. It was the Commission’s standards are a typical element of a Language Clarification determination that some of the gaming regulatory framework. After suggestions exceeded the minimum much consideration, it was the Several commenters suggested standards appropriate for all gaming Committee’s consensus that language and grammatical changes to operations, and they therefore were not promulgation of accounting standards clarify certain provisions of these incorporated. should be reserved for the Tribal gaming standards. The Commission agrees with many of these recommendations and Tribal Gaming Regulatory Authority regulatory authority. Furthermore, it was recommended that the Commission appropriate changes have been made. One of the terms used throughout the provide guidance to the Tribes in the Improvement to Existing MICS rule is ‘‘Tribal gaming regulatory development of the standards and that authority.’’ Tribes are responsible for such guidance be in the form of a A number of commenters stated that the primary, day-to-day regulation of bulletin. the proposed rule was a great their operations, and the Commission improvement over the existing MICS recognizes that tribal governments have Technological Advances in Gaming and commended the Committee for its chosen different approaches of One of the most widely mentioned work. Commenters indicated that both exercising their regulatory authority. A issues was that of technological the structure and content was more vast majority of Tribes have advances. Many commenters felt that understandable and better organized. implemented independent tribal gaming the existing MICS did not adequately Section 542.2 Definitions commissions, which in most cases the address those areas in which new Many commenters suggested changes Commission believes to be the most computer technology provides a level of effective way of ensuring the proper to the definitions section of the MICS. control that equals or exceeds the regulation of gaming operations. Changes were made in response to these standards set forth in this part. The Alternate regulatory structures have also comments to clarify the meaning of a Commission and the Committee have been developed, such as utilizing number of terms used. Definitions for attempted to address this issue in two existing tribal governments, business, or ‘‘Tribal gaming regulatory authority’’ ways. First, where appropriate, specific economic development agencies, when and ‘‘weigh scale calibration module’’ sections of the MICS were modified to determined to be more appropriate to were added to the standard. The accommodate technological advances. the needs of the Tribe. The term ‘‘Tribal definitions for ‘‘bank or bankroll,’’ Second, language was added to each gaming regulatory authority’’ is ‘‘document acceptor,’’ and ‘‘gaming section increasing flexibility by intended to refer to the tribally machine fill’’ have been deleted. allowing use of computer applications designated entity responsible for gaming Two commenters requested a change that provide at least the level of control regulation. to ‘‘sufficient clarity.’’ Industry In order to clarify the role of Tribal described by the standards in that standards were examined in developing gaming regulatory authorities and section. Such usage would have to first the definition used in the proposed rule recognize their immense value, the be approved by the Tribal gaming and this definition is believed to be requirement that the Tribal gaming regulatory authority. A variance would appropriate. The Commission disagrees regulatory authority approve not be necessary, so long as the level of with the need for any change. procedures, in a manner as determined control required by the MICS is In some instances, commenters by the Tribe, before being implemented maintained and conflict with another requested that definitions be developed by the gaming operation has been added standard is not created. for terms that are not used in the body where appropriate. While the MICS Investigation Results of the MICS. The Commission decided require prior approval, it is important to that this may create confusion and note that they do not specify the manner In several instances throughout the chose not to add definitions of terms not in which the Tribal gaming regulatory MICS, the gaming operation is required used in the body of the MICS. to conduct investigations of statistical authority should carry out this approval. Section 542.3 Compliance The type of approval process fluctuations. Several commenters implemented is a decision to be made suggested requiring that the results of One commenter asked whether the by the Tribe. Some may desire issuance these investigations be brought to the determination of tier level discussed in of an approval letter, while some may attention of the Tribal gaming regulatory § 542.3(b) would be made based on the stipulate that failure to object within a authority. The Commission agrees and collective annual gross gaming revenues specified period of time signifies has added appropriate language. of all gaming operations operated by a approval. Others may wish to prescribe Grandfathering Tribe (for those Tribes operating more varying degrees of approval based upon than one gaming operation). This is not the significance of the individual One commenter asked that their the intent of the Commission. Rather, procedure. Regardless, this flexibility operation be ‘‘grandfathered,’’ and not the determination of tier level will be further enables the Tribe to tailor the be required to comply with this final made on a per operation basis. In other MICS to their particular needs. rule. The Commission believes that in words, if a Tribe operates two separate Overall, commenters commend the most instances, the standards included gaming operations, one with annual fact that revisions to the MICS in the revised MICS have not been gross gaming revenues of $4 million, specifically acknowledge that Tribes are increased. Any gaming operation in and the other with gross gaming responsible for the primary regulation of compliance with the existing MICS revenues of $14 million, the $4 million their gaming operation. should, in most respects, be in operation would be treated as a Tier A compliance with this final rule. Further, operation, and the $14 million operation Accounting Standards the Commission has increased the time would be treated as a Tier B operation. Information was presented to the for gaming operations to come into The two would not be combined to Commission regarding the addition of compliance with any new tribal internal require compliance with Tier C accounting standards to the MICS. Data control standards developed in response standards.
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Several commenters requested that generally accepted auditing standards the speed bingo game verify the ball the time limits contained within should be utilized, and therefore do not drawn. It is not necessary that this § 542.3(c) be extended. The Commission need to be included in the MICS. CPA person is an employee, and in fact, some agrees in part and extends the deadline guidelines continue to be available by small operations use a customer for this contained within § 542.3(c)(4) to nine request from the Commission. purpose. This would meet the level of (9) months by which a gaming operation Several commenters suggested adding control required by the standard. must come into compliance with the language that tribal administrative Modification has been made to more tribal internal control standards. remedies should be exhausted prior to clearly state the intent of this standard. Modification was also made to the any enforcement action being taken by It is worth noting, however, that ability of the Tribal gaming regulatory the Commission. It is not the § 542.7(b)(9), requiring ‘‘personnel authority to extend this nine (9) month Commission’s practice to take independent of the transaction’’ to period by an additional six (6) months. enforcement action without first approve payouts in excess of $1,200, Rather than requiring that a Tribal informing the Tribe and Tribal gaming does require utilization of an employee gaming regulatory authority request regulatory authority of deficiencies and of the gaming operation. permission from the Commission to allowing a reasonable period of time for One commenter suggested that only extend this time frame, the Tribal resolution. Unless the deficiencies promotional payouts or awards gaming regulatory authority now need create an immediate and severe threat to exceeding a fair-market value of over only notify the Commission of its the integrity of the gaming operation, $100.00 be recorded. The Commission decision to extend the deadline. the Commission will work with the believes that, for purposes of One commenter suggested that the Tribe and Tribal gaming regulatory accountability and reconciliation, all language used in § 542.3(c)(1) requiring authority to remedy the deficiencies. It such payouts should be recorded, standards adopted by Tribal gaming is only after failure to address noted regardless of dollar value. Therefore, no regulatory authorities be ‘‘at least as deficiencies within a reasonable period changes were made to § 542.7(c). stringent as those set forth in this part,’’ of time that the Commission would One commenter suggested adding the should be changed to ‘‘provide a level contemplate enforcement action. In requirement that a ‘‘blind count’’ be of control that equals or exceeds those response to these comments, the performed under § 542.7(d)(2). Another set forth in this part.’’ The Commission Commission has added language at suggested that two signatures be agrees that this language more clearly § 542.3(g) recognizing this practice. required by § 542.7(c)(1)(iv) to authorize states the objective of the MICS as promotional payouts with a high dollar minimum standards. Section 542.4 Tribal-State Compacts value. While the Commission decided Within § 542.3(c)(2), several Commenters and members of the not to require these higher standards of commenters requested that the Committee requested clarification on all gaming operations, the Commission Commission develop and adopt the effect of the MICS on internal continues to encourage implementation standards that provide additional control standards contained within a of higher standards of control where guidance for currency transaction Tribal-State compact. Advisory desired. reporting under 31 CFR part 103. While Committee members put forth wording One commenter suggested that a the Commission recognizes the that would require standards within a department independent of the bingo importance of standards for currency Tribal-State compact to take priority department should be responsible for transaction reporting, it does not believe over these MICS. The Commission does the securing and inventorying of bingo it is the proper source of such guidance. not fully support this approach because paper, as required by § 542.7(e)(4). The Instead, gaming operations and Tribal some compacts do not contain internal Commission agrees with another gaming regulatory authorities should control standards, or contain only commenter that this would place an consult directly with the Internal limited standards insufficient alone to undue burden on small gaming Revenue Service to obtain assistance adequately protect the integrity of operations. It is sufficient that personnel with 31 CFR part 103. Indian gaming. independent of bingo sales be assigned Regarding the requirement of A number of Tribal-State compacts, this function. § 542.3(f) that a certified public however, do contain detailed internal accountant (CPA) perform independent control standards. In recognition, Section 542.8 Pull Tabs testing of the tribal internal control § 542.4 has been restructured to provide As in bingo, several commenters standards, several commenters deference to internal control standards suggested adding the requirement that suggested that, to save expense, the CPA within a Tribal-State compact where an independent department be required should only perform testing of they provide ‘‘a level of control that to verify the accuracy of the ending pull compliance with the Commission MICS. equals or exceeds the level of control tab balance, as required by § 542.8(b)(5). Both the Commission and the under an internal control standard or This increased level of control is Committee agree that testing only requirement set forth in this part.’’ The encouraged but not required by these against the Commission MICS would Commission believes this language standards, as it would place an undue not be useful to those Tribes who have provides appropriate deference to burden on small gaming operations. In adopted tribal internal control standards Tribal-State compacts containing response to another commenter, this tailored to meet the needs of their detailed internal control standards, section was clarified by stating that ‘‘a operation, particularly where certain while also addressing those situations person or persons independent of the standards have been made more where compacts contain more limited pull tab sales and inventory control’’ stringent. As the primary regulator of standards. shall be assigned this responsibility. their gaming operation, Tribal gaming The Commission agrees with a regulatory authorities are equally, if not Section 542.7 Bingo commenter that weighing pull tabs is an more, concerned with compliance with Several commenters asked for acceptable alternative to the counting of tribal internal control standards. clarification of the term ‘‘independent pull tabs specified in § 542.8(b)(5). Several commenters asked that person’’ as used in § 542.7(b)(5). It is Accordingly, the word ‘‘counting’’ was auditing standards be included in the intended that a person independent of changed to the broader term MICS. The Commission believes that the bingo caller responsible for calling ‘‘reconciling.’’
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Section 542.9 Card Games § 542.10(c)(1)(vi) regarding the since they affect the calculation of funds Several commenters suggested inspection of keno balls in use. The to and/or from the service provider. One commenter suggested removing allowing the use of fill and credit slips commenter indicated that some have the ‘‘on a weekly basis’’ designation for in lieu of lammers for the transfer of interpreted the standard to require the audit testing required at cash equivalents between card tables inspection of keno balls while inside the § 524.11(h)(3). The Commission and the bank as discussed in drawing equipment. The standard, as disagrees. Weekly review of the § 542.9(c)(2). The Commission did not currently written, does not require such inspection. Customarily, keno balls are information provided by the operator is adopt this change given that the fill and removed from the keno equipment at necessary to ensure that the Tribe is credit process for execution of transfers the end of each session and transported receiving its contractually agreed upon between tables and the card room bank to a secure location. Standard practice is percentage of the handle. represents a process exceedingly more for keno balls to be inspected once cumbersome than that stipulated in the Section 542.12 Table Games during each session of keno, generally MICS. The use of the fill and credit as the balls are being reinserted into the One commenter suggested that process in this instance does however keno equipment prior to the standards be included for debit card represent an acceptable alternative commencement of play. transactions at gaming tables. The procedure. One commenter suggested that the Commission believes that, should a One commenter asked whether personnel access listing at gaming operation choose to utilize this § 542.9(d)(2) requires the Tribal gaming § 542.10(j)(3)(vi) should require either technology, the Tribal gaming regulatory regulatory authority to physically mark an employee name or an identifying authority would be responsible for or destroy playing cards. It does not. number. The Commission agrees and developing controlling standards. Instead, the Tribal gaming regulatory made this change. Several commenters suggested authority must approve the process of One commenter suggested removing removing references to credit in this marking or destroying the cards. In fact, § 542.10(p) regarding manual keno. The section. As discussed earlier, the industry practice indicates that security Commission maintained this standard Commission realizes that there are personnel typically perform this because it believes some gaming certain standards contained within the function. operations continue to offer manual MICS that do not apply to all gaming In reference to §§ 542.9(d) and (e), one keno. operations. Gaming operations that do commenter suggested that requiring the not utilize credit are not required to washing of plastic cards every seventy- Section 542.11 Pari-Mutuel Wagering adopt standards specifically relating to two (72) hours of use makes no sense if Commenters indicated that this credit. non-plastic cards can be used for up to section is largely improved from the Several commenters stated that seven (7) days with no action. Typically, existing MICS. Several commenters reference to the standards for drop and most operations use non-plastic playing requested an additional exemption from count of table games found at cards for no more than twenty-four (24) the MICS for those operations that § 542.12(b) should be worded the same hours, and this was presumed in utilize an independent simulcast as the reference to drop and count for developing these standards. Another provider that is not a state-regulated gaming machines. The Commission commenter suggested adding language racetrack. The Commission believes that agrees and has made this change. requiring cancellation of plastic cards the information required by the MICS, One commenter stated that the showing wear. After consideration, the which must be obtained from the requirement at § 542.12(c)(4) that the pit Commission agrees that it would provider, is essential to the ability of the supervisor authorize a credit or fill was provide better protection for the MICS gaming operation to be able to too stringent. The Commission agrees to require routine inspection of plastic determine whether it is receiving its that intermediary gaming supervisors playing cards and allow the Tribal guaranteed share of the handle. Thus, could authorize credits or fills and has gaming regulatory authority to no additional exemption was added. changed the language to ‘‘pit determine how often they should be Several commenters also suggested supervisory personnel’’ to clarify this washed. fully exempting pari-mutuel wagering point. Several commenters suggested that conducted pursuant to a Tribal-State Several commenters stated that the the standards for promotional compact, where the Tribe is responsible process of obtaining signatures on the progressive pots and pools at § 542.9(h) for security and other ancillary services, copies of credit and fill slips was be changed to allow for the collection of but not for the receipt, payment, and unclear. Section 542.12(c)(13) was a commission or administrative fee. The custody of all funds of the operation. reworded to clarify the signature Commission disagrees and believes that The Commission believes that the progression required for these funds contributed by the playing public exemption contained in § 542.11(a) transactions. In addition, the standard to these pools should be returned to the would include those Tribes operating was changed to allow a boxperson to public. It is worth noting, however, that under such an agreement pursuant to sign for chip transactions at craps tables. there is nothing in the standard limiting their compact. While some commented favorably the amount collected as a house rake, as One commenter suggested removing about no longer requiring the counting long as players are made aware of the the requirement at § 542.11(h)(9) that of table banks of table games that were amount collected from each pot. the gaming operation verify purged not opened during a shift, others One commenter suggested adding key ticket information. The Commission suggested that § 542.12(d) should controls for duplicate keys to §§ 542.9(i) believes that this information is continue to require that table banks be and (j). Such an addition is unnecessary necessary to verify that the purging of counted, whether opened or not. The as key control standards apply to all unpaid tickets is appropriate and is not Commission believes the new standard keys whether duplicate or original. being performed in an arbitrary manner allows for flexibility, particularly for that could impact winning patrons of small gaming operations. If a Tribal Section 542.10 Keno the gaming operation. Likewise, gaming regulatory authority believes One commenter requested reviewing purged ticket data is that all tables should be counted clarification to the language at important to the participating locations regardless of whether they were opened,
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they can include this higher standard in § 542.13(d)(1) be reduced. The commenter felt that requiring the their tribal internal control standards. Commission finds the documentation counting of the gaming machine drop Commenters stated that the requirements for single jackpot payouts and hopper contents when machines requirement to ‘‘mark and remove cards to be appropriate due to IRS were temporarily removed from the and dice from play’’ places an requirements that single jackpots in floor was of little value, and suggested unnecessary burden on the Tribal excess of $1,199.99 be documented. reverting to the existing language. The gaming regulatory authority. The Section 542.13(d)(1)(vi)(B) permits Commission agrees and the language language in § 542.12(f) was clarified to jackpot payouts of less than $1,200 with was modified accordingly. indicate that, as long as used cards and the signature of only one employee if an Commenters disagreed about whether dice are secured, it is not necessary to on-line accounting system is utilized. booth employees should handle lost mark them immediately after removal Several commenters stated that hopper player club cards. Some felt that they from play. It is also worth noting that fills should be treated similarly. The should be able to return lost cards to this standard does not specify which Commission agrees that the risks players, while others felt that booth entity is responsible for the task, only associated with hopper fills is greatly employees should under no that the Tribal gaming regulatory reduced when an on-line accounting circumstances have access to lost player authority, or the gaming operation as system is in use that confirms the fill cards. The Commission believes that the approved by the Tribal gaming transaction, and has therefore modified language at § 542.13(j)(iii), which allows regulatory authority, establish a time this section to include hopper fills. booth employees to receive lost player frame (not to exceed seven (7) days) for Many commenters mentioned the club cards, provided that they are the marking, canceling, or destruction of positive attributes of on-line accounting immediately deposited into a secured cards and dice. systems. Recognizing their ability to container to which they do not have One commenter felt that the daily provide adequate protection for many access, is an acceptable minimum level recap requirement of § 542.12(i)(6) as it transactions, several changes were of control. At least one commenter saw relates to pit credit was originally made, including for example, the this language as an appropriate modeled after the Nevada MICS, and reduction in signature requirements in compromise. only important for the purpose of § 542.13(d)(2) for short-pays and Several commenters suggested that determining monthly taxes paid to the accumulated credit payouts of less than the thresholds contained in state. The Commission agrees that these $3,000. §§ 542.13(m)(5) and (7), whereby requirements serve little if any value in Several commenters stated that they investigation of coin and currency drop Indian country and they therefore have believe multi-denominational machines variances is necessary, were been deleted. are not covered by the MICS. While it inappropriate. The Commission feels One commenter suggested allowing is true that the MICS are silent with these amounts are a reasonable non-supervisory personnel to sign regard to specific mention of multi- reflection of industry standards. Again, customer markers in § 542.12(j)(1). The denominational machines, it is not for those commenters that believe these Commission disagrees, but has changed necessary that each type of machine be amounts should be lower, it is suggested the term to ‘‘pit supervisory personnel’’ specifically addressed in order to be that this be done in the development of rather than ‘‘pit supervisor’’ to clarify included within the MICS. Multi- tribal internal control standards. that supervisors other than the pit denominational machines are subject to Section 542.13(n)(3) discusses the supervisor may also perform this the MICS as they are applicable to redemption of cash-out tickets. Remote function. gaming machines. validation systems are a technological Two commenters suggested One commenter suggested eliminating advance providing a reasonable level of prohibiting rim credit, indicating either the requirement at § 542.13(h)(10) that control. The proposed rule recognized that it is not used in tribal gaming in-meter reading data be retained for 5 this new technology, but limited its use operations, or that it may lead to years because it is excessive. The to tickets not exceeding $1,199. Based collusion between a player and a dealer. Commission agrees and has made this on comments and relevant research, the While the Commission tends to agree, it change. $1,199 limitation was increased to believes that the Tribal gaming One commenter suggested that the $2,999 per cash-out transaction. regulatory authority should determine investigation of large variances between The language throughout § 542.13(n) the suitability of rim credit. Tribal theoretical and actual hold required by referring to a ‘‘cashier’’ has been gaming regulatory authorities not § 542.13(h)(19), should be performed by clarified to include a ‘‘redeemer’’ to wishing to permit rim credit can make a department independent of the gaming reflect use of a remote validation this determination in their tribal machine department and that the results system. It is worth mentioning that in internal control standards. of the investigation should be provided the event the system goes down, cash- to the Tribal gaming regulatory out tickets must be redeemed at a Section 542.13 Gaming Machines authority. The Commission agrees with change booth or cashier’s cage in Several commenters discussed on-line this recommendation and the language accordance with § 542.13(n)(8) to ensure accounting systems. Several were has been changed accordingly. adequate surveillance to protect the concerned that the MICS require such a Furthermore, because the Tribal gaming integrity of the transaction. system. Others felt that an on-line regulatory authority bears the primary Two commenters opposed the accounting system should be required. regulatory responsibility, language prohibition by § 542.13(p) of smart While the Commission encourages the regarding the sharing of investigative cards. With smart cards, there is no use of an on-line accounting system, findings with the Tribal gaming duplicate record of the information such system is not required for coin regulatory authority has been added stored on the card, placing both the drop devices. throughout the MICS. customer and the operation at risk. If, in A number of comments were received At § 542.13(i), the Commission the future, technology is developed that on § 542.13(d), resulting in changes to proposed consolidating hopper contents would alleviate these concerns, a both the content and structure of the standards when gaming machines are gaming operation wishing to utilize the section. Several asked that the either temporarily or permanently system may request a variance from the documentation requirements of removed from the gaming floor. One Commission.
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Section 542.14 Cage diverse industry. Tribes that do not greater degree to attract or retain patrons One commenter asked whether the extend credit are not required to include than a gaming operation in a market check cashing standards of § 542.14 credit standards in their tribal internal with little local competition. When apply to independent check cashing control standards. implemented properly, a gaming operation’s use of comps will improve companies. They do not. However, the Section 542.16 Information revenues and profitability, and ensure Commission strongly recommends that Technology that the operation is competing the Tribal gaming regulatory authority Section 542.16(a)(1)(i) requires that all adopt regulations that will ensure effectively for the gaming customers new vendor hardware and software within its market. persons employed by such companies agreements contain language requiring a A number of commenters and are suitable to work in the gaming vendor to adhere to tribal internal members of the Advisory Committee industry. Likewise, the Commission control standards. Two commenters objected to § 542.17 being included in recommends that the Tribal gaming opposed this requirement stating that the MICS. Most view complimentaries regulatory authority install surveillance such a requirement may create too few as a business decision and outside the cameras over appropriate counter areas companies willing to do business with scope of the Commission’s authority. to ensure that the interests of its the Tribe. The Commission believes While the Commission agrees that the customers are adequately protected. It is that, in order to protect the integrity of use of comps involves important also important for the tribal regulators to the systems provided by third-party business decisions, it also recognizes require that the service provider has vendors, this standard is necessary. that abuse can amount to adopted necessary internal controls to One commenter suggested adding the misappropriation of gaming revenues. ensure compliance with Title 31. language ‘‘applicable to the goods or Given that the issuance of a One commenter stated that the Tribal services the vendor is providing’’ to the complimentary results in an expense to gaming regulatory authority, rather than end of § 542.16(a)(1)(i) to clarify what the operation, misuse negatively the Commission, should determine the information is required. The language impacts gaming revenues. This lowering adequate minimum bankroll. The was added. of gaming revenues leads directly to a Commission agrees. The bankroll is the One commenter asked whether reduction in the amount of revenues amount of cash or cash equivalents kept § 542.16(f)(1)(iii) requires a gaming available for transfer to the Tribal on hand to ensure that the gaming operation to send computer hardware to government, and in turn, a reduction in operation can satisfy its obligations to the Commission for the purpose of the overall services a Tribe can provide customers. Industry practice is for the performing auditing procedures. It does to its members. Misuse of gaming operation to determine the not. This standard instead requires that complimentaries thereby thwarts the required bankroll. Section 542.14(d)(4) the Commission have access to principle that gaming revenues should requires only that the Tribal gaming hardware while on site. benefit the Tribal community as a regulatory authority approve the whole, and not individuals. Without Section 542.17 Complimentary formula utilized for this determination. clearly defined procedures for the Services or Items The bankroll formula available from the authorization, issuance, and tracking of Commission is merely recommended The use of complimentary services or complimentaries, the potential for abuse guidance issued in response to repeated items, commonly known as ‘‘comps,’’ is can escalate. requests from gaming operations. customary throughout the gaming Several comments prompt a One commenter asked whether chips, industry. This is true not only of discussion about the difference between because they are a component of cage commercial gaming, but also of Indian complimentaries and expenditures by a accountability, should be included in gaming. The Commission does not Tribal government. Most Tribes have a the bankroll formula. Chips, while they prohibit the use of comps in Indian number of businesses or enterprises must be accounted for in the cage, are gaming. To the contrary, the operated for economic development. It not cash equivalents for the purpose of Commission believes that tribal gaming is customary that at some point during paying customers. operations should possess the same the year, each of these businesses or business tools as commercial gaming so enterprises transfer a portion of their net Section 542.15 Credit they can compete on an equal footing. revenues to the Tribal government in A number of commenters suggest Complimentaries are typically used order to fund governmental operations. removing this section from the MICS for marketing or promotional purposes. Some commenters expressed concern because they do not extend credit, or They can be used to entice new that the Commission has placed because they are prohibited from doing customers, reward continuing restrictions upon the manner in which so by their Tribal-State compact. The customers, or promote community a Tribal government can spend these Commission recognizes that not all goodwill. Because the issuance of a revenues. The Commission has not. gaming operations play all games or comp amounts to the provision of goods Instead, the Congress stipulated such utilize all procedures contained herein. or services, comps result in a cost to the limitations when they enacted the Again, this is where the process of gaming operation. As such, a Indian Gaming Regulatory Act (IGRA). developing tribal internal control complimentary generally should not be Revenues transferred to a Tribal standards becomes important. It is not issued unless it provides an economic government from a gaming operation intended for Tribes to simply adopt benefit, real or potential, to the must be spent as specified by the these MICS verbatim as tribal standards. operation. Congress within the IGRA. Instead, Tribes should utilize the MICS Determining how much of a gaming It is also important to note that to develop their own internal control operation’s resources should be expenditures of net gaming revenues by standards that provide a level of control expended on comps, as well as to whom Tribal governments are not that equals or exceeds those set forth in they should be awarded, is a decision ‘‘complimentaries.’’ ‘‘Complimentaries’’ this part and that address the particulars dictated by market conditions and is a term used to define certain types of of their gaming operation(s). Doing so unique to each operation. A gaming expenditures of a gaming operation, not allows the opportunity of tailoring the operation in a tightly competitive expenditures of a Tribal government. MICS to meet the individual needs of a market may rely on comps to a much Because expenditures of net gaming
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revenues by a Tribal government are not gaming regulatory authority and the applicable only to the operation comps, they are therefore outside the Tribe is important, but also believes that receiving concurrence. scope of these MICS. it is an internal matter better addressed The Committee expressed concern In response to numerous comments, by the Tribe than through the MICS. that nowhere is it clearly indicated to the requirement that certain data be One commenter suggested that a whom requests for variances should be obtained for all complimentary services gaming operation be able to appeal a sent. The Commission agrees with this or items that exceed $50.00 has been Tribal gaming regulatory authority’s concern and has in the past modified to state that the collection of denial of a variance request directly to recommended that requests for such data is not required for the Commission. Again, the variances be clearly marked both on the complimentary services or items below Commission believes that this is an request itself and on the outside of the a ‘‘reasonable amount’’ to be established internal issue, best addressed by the envelope. The Committee asked that the by the Tribal gaming regulatory Tribe. Commission issue clear guidance about authority. It is the Commission’s view Several commenters stated that the the procedures that should be followed that for some large operations in a Commission should not be involved in in requesting a variance concurrence. competitive market, $100 may be a the variance process and that such Section 542.20 Tier A Gaming reasonable amount. For others, $20 may decisions should be left entirely to the Operations be more appropriate. In any case, the Tribal gaming regulatory authority. Commission recognizes that the Tribal While acknowledging the vital role Several commenters requested that gaming regulatory authority can most Tribal gaming regulatory authorities the upper limit for Tier A be raised. appropriately establish this amount. play in the primary regulation of Based upon earlier comments and input gaming, the Commission would find it from the Advisory Committee, the upper Section 542.18 Variances problematical to review compliance of limit for Tier A gaming operations has This section was restructured to gaming operations if each were being been increased from the current level of provide clarity and to recognize that the operated under different variances. In $3 million to $5 million. The Tribal gaming regulatory authority, in addition to being time-consuming and Commission believes that further the first instance, should determine an unnecessary waste of Commission adjustment of the upper limit may result whether the gaming operation should be resources, such a process could also in an unacceptable risk to tribal assets. granted a variance. Clearly, tribal lead to a situation where the Sections 542.21, 542.31, and 542.41 regulators who are most familiar with a Commission disagrees with the level of Drop and Count for Tier A, B, and C gaming operation are best equipped to control provided by a variance after make these initial determinations. The implementation, resulting in Gaming Operations Commission would then be requested to unnecessary expense to the gaming One commenter asked that the clause concur with the variance. If the operation. Furthermore, the MICS are regarding computer applications, Commission does not agree, it must the Commission’s regulation and it included elsewhere in the MICS, be justify its objection. The new process therefore follows that the Commission added to drop and count. The also allows for an appeal to the full should ultimately be responsible for Commission agrees and has added such Commission. A number of commenters review of variances. language at §§ 542.21(a), 542.31(a), and agreed that the changes to this section Several commenters requested that 542.41(a). are an improvement. the effective date of a variance, While some commented favorably Many commenters believe that the discussed in § 542.17(e), be changed to about no longer requiring the drop of ninety (90) day time frame for the date approved by the Tribal gaming tables that were not opened during a Commission action in § 542.18(b) is too regulatory authority. The Commission shift, others suggested that long. Previous experience has shown believes that the gaming operation §§ 542.21(b)(2)(ii), 542.31(b)(2)(ii), and that review of a variance approval can should comply with standards that 542.41(b)(2)(ii) should continue to be lengthy, particularly where the achieve a level of control sufficient to require that tables be dropped, whether variance is somewhat complicated or accomplish the purpose of the standard opened or not. The Commission involves new technology. The it is to replace until such time as the believes the new standard allows for Commission has a shortage of staff able Commission objects. flexibility, particularly for small gaming to review variance approvals, and such A commenter requested that the operations. If a Tribal gaming regulatory activity requires reassignment from Commission publish approved authority believes that all tables should current workload. In many cases, review variances. This issue was considered in be dropped, regardless of whether they may also entail travel to the gaming developing the proposed rule and were opened, they can include this operation, as well as review of rejected because of concerns that a higher standard in their tribal internal equivalent standards in comparable variance (often based on intimate control standards. gaming jurisdictions. In response to the knowledge of the requesting gaming Several commenters indicated that numerous comments, however, the operation) that works for one operation, they use computerized bar codes to Commission has shortened its response may not be sufficient to meet the needs mark table game drop boxes. The time to sixty (60) days. Further of another. Even so, the Commission Commission agrees that use of such shortening of this time frame was not agrees that having the ability to review technology satisfies the requirements of entertained out of fear that it may lead approved variances may be of benefit to §§ 542.21(b)(5), 542.31(b)(5), and to lack of concurrence simply because of other Tribal gaming operations. The 542.41(b)(5). insufficient time for review, as opposed Commission agrees to make public on One commenter suggested that no one to concern with the variance itself. its web page a list of Tribes who have other than count room personnel should One commenter suggested a standard received a variance concurrence, be permitted to enter or exit the count whereby the Commission would notify including the particular standard of the room during the count. The Commission a Tribe if its Tribal gaming regulatory MICS it addressed. Tribal gaming was concerned that this could be authority requests a variance. The regulatory authorities may then contact interpreted to include gaming Commission believes that each other for specific details of the regulators, which is not the intent of communication between the Tribal variance. A variance continues to be §§ 542.21(c)(2), 542.31(c)(2), and
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542.41(c)(2). Therefore, no change was for internal audit testing. The better suited to make this determination. made. commenter suggested that while annual As such, these sections are meant only Several commenters were concerned testing was appropriate for Tier A to specify the required areas of coverage. about lack of independence if a dealer operations, in some instances, Tiers B To help alleviate any confusion, the or cage cashier is used as a member of and C should complete testing on a beginning of the section was changed by the count team, as permitted by more frequent basis. While the deleting the word ‘‘each.’’ Similar §§ 542.21(c)(4), 542.31(c)(4), and Commission supports testing on a more changes were also made to other 542.41(c)(4). The Commission tends to frequent basis, it is believed that the comparable sections of the MICS. agree, but is concerned about how approach specified in these standards is Some commenters requested removing this provision would impact an appropriate minimum standard. clarification of the meaning of ‘‘base small gaming operations. Therefore, the Language was also added at payout amount’’ as used in ability to utilize a dealer or cage cashier §§ 542.22(b)(1)(xi), 542.32(b)(1)(xi), and §§ 542.23(n)(2) and (3), 542.33(q)(2) and was removed only from § 542.41(c)(4). 542.42(b)(1)(xi), that expands the (3), and 542.43(r)(2) and (3). The base One commenter stated that the second entities entitled to ask for additional payout amount is the jackpot reset count required by §§ 542.21(d)(4)(ii), internal audits to include the Tribe, amount. Clarifying language has been 542.31(d)(4)(ii), and 542.41(d)(4)(ii) Tribal gaming regulatory authority, added to §§ 542.23(n)(2), 542.33(q)(2), should be conducted of each box. The audit committee, or any other entity and 542.43(r)(2). By way of example, an standard requires only that a second designated by the Tribe. in-house progressive machine offering a count of the entire drop be conducted, base payout (jackpot reset) amount of Sections 542.23, 542.33, and 542.43 which is believed to be an appropriate $90,000 that increases to $200,000, is Surveillance for Tier A, B, and C minimum standard. A second not required to be monitored and Gaming Operations commenter asked if an automated recorded by a dedicated camera under currency counting machine meets the Several commenters requested this section because the base payout requirements of this standard. The clarification that Tier A gaming amount of $90,000 is less than the Commission agrees that utilization of operations require only the ‘‘recording’’ $100,000 threshold. this type of technology is appropriate, of areas under surveillance, not One commenter questioned why the so long as the system is capable of ‘‘monitoring.’’ The Commission agrees. surveillance standards are less stringent conducting two independent counts. Unlike Tier B and C gaming operations, for wide-area progressive machines, in Yet another commenter suggested Tier A gaming operations are not that the base payout amount requiring requiring a blind second count. The required to maintain a staffed dedicated camera coverage is set at $1.5 Commission would agree that this surveillance room. Therefore, million. (§§ 542.23(n)(3), 542.33(q)(3), provides an additional layer of security, ‘‘monitoring’’ is not required of Tier A 542.43(r)(3)) The Commission believes but would not require blind counts of gaming operations. that because these games are monitored all operations. Similar comments and Several commenters also requested by independent vendors, primary changes were also made to clarification of the meaning of the word payouts are made by independent §§ 542.21(f)(4)(ii), 542.31(f)(4)(ii), and ‘‘monitor.’’ The Commission agrees that vendors, and they utilize an on-line 542.41(f)(4)(ii). it should be read as the ‘‘ability to monitoring system, the threat to tribal The standard at §§ 542.31(e)(3)(i) and monitor.’’ Surveillance personnel must gaming operations’ assets are reduced 542.41(e)(3)(i) regarding a surveillance continuously prioritize their activities and therefore, the surveillance log has been moved to the surveillance as events unfold within the operation. requirements should be less stringent. section upon a recommendation that To require ‘‘continuous monitoring’’ of Several commenters objected to the surveillance would be the department one area or of one event may in fact standard contained within responsible for keeping the log. divert attention from more pressing §§ 542.23(p)(3), 542.33(v)(3), and Several commenters indicated that matters. The Commission does not 542.43(w)(3) requiring that an original they use computerized bar codes to expect continuous monitoring, only that surveillance tape or digital recording be mark bill acceptor canisters. The surveillance personnel be able to provided to the Commission. The Commission agrees that use of such monitor the particular area or event in standard was changed to allow technology satisfies the requirements of the manner specified. Commission access to a duly §§ 542.21(e)(4), 542.31(e)(5), and One commenter indicated concern authenticated copy instead of an 542.41(e)(5). with the camera coverage required by original. One commenter recommended §§ 542.23(m), 542.33(p), and 542.43(q). modification to §§ 542.21(f)(11), The commenter believes that if camera Section 542.30 Tier B Gaming 542.31(f)(11), and 542.41(f)(11) to allow coverage is set so that card values and Operations authorized personnel access to stored suits can be clearly identified (as Several commenters requested that bill acceptor canisters in an emergency required by §§ 542.23(m)(1)(i), the upper limit for Tier B be raised. for the resolution of a problem. The 542.33(p)(1)(i), and 542.43(q)(1)(i)), it Based upon earlier comments and input Commission agrees and appropriate may not be possible to also maintain an from the Advisory Committee, the upper language was added. overall view of the entire table (as limit for Tier B gaming operations has One commenter suggested required by §§ 542.23(m)(1)(ii)), been increased from the current level of modification to the on-the-floor drop 542.33(p)(1)(ii)), and 542.43(q)(1)(ii)). $10 million to $15 million. The system standards at §§ 542.21(i)(2)(i), These sections are not meant to specify Commission believes that further 542.31(i)(2)(i), and 542.41(i)(2)(i). These the number or types of cameras that adjustment of the upper limit may result changes were accepted. should be utilized. While several in an unacceptable risk to tribal assets. commenters suggested that the Sections 542.22, 542.32, and 542.42 Commission should set a specific Section 542.40 Tier C Gaming Internal Audit for Tier A, B, and C number and type of camera required for Operations Gaming Operations each standard, the Commission believes Several commenters requested that One commenter recommended that a that the Tribal gaming regulatory the threshold at which gaming tiered approach should be considered authority and gaming operation are operations become Tier C be raised.
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Based upon earlier comments and input incur many, if not all, of the same regulatory framework. The Commission from the Advisory Committee, the level regulatory expenses. The same firmly believes that any future changes at which gaming operations become Tier commenter suggested that the to this regulation be made in a fully C has been increased from $10 million Commission should consider the effect consultative process, similar to the one to $15 million. The Commission of all of the Commission’s regulatory utilized in developing this final rule. believes that further adjustment may activities in determining economic result in an unacceptable risk to tribal impact. The Commission is aware of its Regulatory Matters assets. obligations under the Regulatory Regulatory Flexibility Act One commenter suggested requiring Flexibility Act and will continue to that all Tier C gaming operations install comply with the Act in fitting regulatory The Commission certifies that the on-line accounting systems. While the and informational requirements to the Minimum Internal Control Standards Commission believes that on-line scale of entities subject to its contained within this regulation will systems provide a higher level of regulations. For example, as stated in not have a significant economic impact protection of assets, we do not agree the request for public comment dated on small entities, 5 U.S.C. 605(b). The that, as a minimum standard, this April 23, 2002, the Commission has factual basis for this certification is as system should be required. tiered this regulation to take into follows: Regulatory Flexibility Act account the needs of large and small gaming operations. The Commission’s Of the 315 Indian gaming operations On April 23, 2002, the Commission advisory committee consisted of across the country, approximately 100 published for public comment its representatives from both large and of the operations have gross revenues of certification that the proposed small gaming operations. The less than $5 million. Of these, regulation would not have a significant Commission also requested and approximately 50 operations have gross impact on small entities. In response the responded to public comments in the revenues of under $1 million. Since the Commission received nineteen form of written comments and held a proposed revisions will not apply to comments. A majority of the comments public hearing. gaming operations with gross revenues received were similar, stating that the One commenter stated that the under $1 million, only 50 small Commission had violated the Regulatory Commission’s proposal to exempt operations may be affected. While this Flexibility Act by failing to prepare an gaming operations grossing under $1 is a substantial number, the Commission analysis. The Commission disagrees. million from compliance with these believes that the regulations will not The Regulatory Flexibility Act allows an regulations was commendable, but have a significant economic impact on agency to certify that a proposed rule asked that the Commission consider these operations for several reasons. will not have a significant economic exempting all gaming operations First, internal controls are essential to impact on small entities subject to the grossing less than $5 million from gaming operations in order to protect rule as long as the agency provides an regulatory compliance. The Commission assets. The costs involved in explanation of the factual basis for the believes that such an exemption would implementing these controls are part of certification. 5 U.S.C. § 605(b). The jeopardize the integrity of Indian the regular business costs incurred by Commission provided this basis in its gaming as a whole; and exempting such such an operation. The Commission also notice dated April 23, 2002, and again a large group of gaming operations from believes that many Indian gaming certifies in this final rule. federal oversight would be a shirking of operations have already implemented A majority of the commenters also the responsibilities of the Commission. internal control standards that are more disagree with the Commission’s The Commission does, however, realize stringent than those contained in these determination that it possesses the that the costs of compliance with regulations. statutory authority to promulgate this minimum internal control standards Under the proposed revisions, small regulation. That issue is considered and should reflect the risk of loss to Indian gaming operations grossing under $1 addressed elsewhere in this preamble. gaming operations. Because of this, the million are exempted from MICS One commenter objected to the Commission has reduced the compliance. Tier A facilities (those with Commission’s definition of ‘‘small requirements of Tier A gaming facilities. gross revenues between $1 and $5 entity’’ under the Regulatory Flexibility In addition, tribal gaming regulatory million) are subject to the yearly Act. The Commission, in determining authorities may request a variance from that gaming operations with gross these requirements if adequate requirement that independent certified revenues under $5 million may qualify alternative controls are put in place. The public accountant testing occur. The as ‘‘small businesses’’ and, therefore as Commission believes that the flexibility purpose of this testing is to measure the ‘‘small entities,’’ relied, as does the of the new regulation adequately gaming operation’s compliance with the Regulatory Flexibility Act, on the addresses the concerns of smaller tribe’s internal control standards. The definitions contained with the Small gaming operations, while fulfilling its cost of compliance with this Business Act, and associated statutory obligation of the federal requirement for a small gaming regulations. 15 U.S.C. 632; 13 CFR oversight of Indian gaming. operation is estimated at between 121.201. Therefore, the Commission $3,000 and $5,000. The cost of this disagrees with this comment. Future Revisions to the MICS report is minimal and does not create a The same commenter disagreed with Indian gaming, like commercial significant economic effect on gaming the Commission’s certification that this gaming, is an ever-changing industry. operations. What little impact exists is regulation does not impose significant As new technology emerges and the further offset because other regulations economic costs to affected Indian industry itself continues to mature, this require a yearly independent financial gaming operations. The Commission regulation will likewise require audit that can be conducted at the same disagrees. As stated in its certification, evolution. The MICS are a technical time. For these reasons, the Commission internal controls are requirements that regulation greatly impacting all Tribal has concluded that the proposed rule are mandated by the nature of gaming gaming operations. As such, input from will not have a significant economic operations. In the absence of federal those most affected is critical to impact on those small entities subject to regulations, Tribes would continue to developing a mutually beneficial the rule.
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Small Business Regulatory Enforcement Since beginning formulation of this PART 542—MINIMUM INTERNAL Fairness Act final rule, the Commission spoke at CONTROL STANDARDS several tribal association meetings. The This rule is not a major rule under 5 Commission will develop guidance Sec. U.S.C. 804(2), the Small Business materials that will include guidelines 542.1 What does this part cover? Regulatory Enforcement Fairness Act. for CPA firms who must audit gaming 542.2 What are the definitions for this part? 542.3 How do I comply with this part? This rule does not have an annual effect operations to determine compliance on the economy of $100 million or 542.4 How do these regulations affect with tribal internal control standards. minimum internal control standards more. This rule will not cause a major The Commission also held a public increase in costs or prices for establish in a Tribal-State compact? hearing on the proposed regulation prior 542.5 How do these regulations affect state consumers, individual industries, to development and publication of a Federal, state or local government jurisdiction? final rule. The Commission and the 542.6 Does this part apply to small and agencies or geographic regions, and does Tribal Advisory Committee met one last charitable gaming operations? not have a significant adverse effect on time to discuss the public comments 542.7 What are the minimum internal competition, employment, investment, received as a result of publication of the control standards for bingo? productivity, innovation, or the ability proposed rule and to develop a 542.8 What are the minimum internal of U.S. based enterprises to compete recommendation regarding the final control standards for pull tabs? with foreign-based enterprises. rule. The Commission also plans on 542.9 What are the minimum internal control standards for card games? Unfunded Mandates Reform Act continuing its policy of providing technical assistance, through its field 542.10 What are the minimum internal The Commission is an independent control standards for keno? offices, to Tribes to assist in complying 542.11 What are the minimum internal regulatory agency and, as such, is not with the MICS. subject to the Unfunded Mandates control standards for pari-mutuel wagering? Reform Act. Even so, the Commission Takings 542.12 What are the minimum internal has determined that this final rule does In accordance with Executive Order control standards for table games? not impose an unfunded mandate on 12630, the Commission has determined 542.13 What are the minimum internal State, local, or tribal governments, or on that this rule does not have significant control standards for gaming machines? the private sector, of more than $100 takings implications. A takings 542.14 What are the minimum internal million per year. Thus, it is not a implication assessment is not required. control standards for the cage? ‘‘significant regulatory action’’ under 542.15 What are the minimum internal the Unfunded Mandates Reform Act, 2 Civil Justice Reform control standards for credit? U.S.C. 1501 et seq. In accordance with Executive Order 542.16 What are the minimum internal The Commission has, however, 12988, the Office of General Counsel has control standards for information technology? determined that this final rule may have determined that this rule does not 542.17 What are the minimum internal a unique effect on tribal governments unduly burden the judicial system and control standards for complimentary (this rule applies exclusively to tribal meets the requirements of sections 3(a) services or items? governments) whenever they undertake and 3(b)(2) of the Order. 542.18 How does a gaming operation apply the ownership, operation, regulation, or Paperwork Reduction Act for a variance from the standards of this licensing of gaming operations on part? Indian lands as defined by the Indian This final rule requires an information 542.20 What is a Tier A gaming operation? Gaming Regulatory Act. The collection under the Paperwork 542.21 What are the minimum internal Commission has therefore undertaken Reduction Act 44 U.S.C. 3501 et seq., as control standards for drop and count for the following actions: on two occasions, did the regulation it replaces. There is Tier A gaming operations? made a request for public comment on no change to the paperwork 542.22 What are the minimum internal changes to the regulation; formed a requirements created by this control standards for internal audit for Tribal Advisory Committee to assist in amendment. The Commission’s OMB Tier A gaming operations? writing the new regulation; held Control number for this regulation is 542.23 What are the minimum internal control standards for surveillance for discussions with Tribal leaders and 3141–0009. Tier A gaming operations? Tribal associations about desired National Environmental Policy Act 542.30 What is a Tier B gaming operation? changes to the regulation; prepared 542.31 What are the minimum internal guidance material and model The Commission has determined that control standards for drop and count for documents; held a public hearing; and this final rule does not constitute a Tier B gaming operations? continues to provide technical major Federal action significantly 542.32 What are the minimum internal assistance. affecting the quality of the human control standards for internal audit for Between May and November 2001, environment and that no detailed Tier B gaming operations? the Commission and the Tribal statement is required pursuant to the 542.33 What are the minimum internal Advisory Committee met six times to National Environmental Policy Act of control standards for surveillance for 1969 (42 U.S.C. 4321 et. seq). Tier B gaming operations? develop a regulatory proposal. In 542.40 What is a Tier C gaming operation? selecting Committee members, List of Subjects in 25 CFR Part 542 542.41 What are the minimum internal consideration was placed on the control standards for drop and count for Accounting, Auditing, Gambling, applicant’s experience in this area, as Tier C gaming operations? well as the size of the Tribe the nominee Indian-lands, Indian-tribal government, 542.42 What are the minimum internal represented, geographic location of the Reporting and record keeping control standards for internal audit for Tribe’s gaming operation, and the size requirements. Tier C gaming operations? and type of gaming conducted. The For reasons stated in the preamble, 542.43 What are the minimum internal Commission believes it assembled a the National Indian Gaming control standards for surveillance for a diverse Committee representative of Commission revises 25 CFR part 542 to Tier C gaming operation? Indian gaming interests. read as follows: Authority: 25 U.S.C. 2702(c), 2706(b)(10).
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§ 542.1 What does this part cover? Breakage means the difference Coin room inventory means coins and This part establishes the minimum between actual bet amounts paid out by tokens stored in the coin room that are internal control standards for gaming a racetrack to bettors and amounts won generally used for gaming machine operations on Indian land. due to bet payments being rounded up department operation. or down. For example, a winning bet Commission means the National § 542.2 What are the definitions for this that should pay $4.25 may be actually Indian Gaming Commission. part? paid at $4.20 due to rounding. Complimentary means a service or The definitions in this section shall Cage means a secure work area within item provided at no cost, or at a reduced apply to all sections of this part unless the gaming operation for cashiers and a cost, to a customer. otherwise noted. storage area for the gaming operation Count means the total funds counted Account access card means an bankroll. for a particular game, gaming machine, instrument used to access customer Cage accountability form means an shift, or other period. accounts for wagering at a gaming itemized list of the components that Count room means a room where the machine. Account access cards are used make up the cage accountability. coin and cash drop from gaming in connection with a computerized Cage credit means advances in the machines, table games, or other games account database. form of cash or gaming chips made to are transported to and counted. Accountability means all items of customers at the cage. Documented by Count team means personnel that cash, chips, coins, tokens, plaques, the players signing an IOU or a marker perform either the count of the gaming receivables, and customer deposits similar to a counter check. machine drop and/or the table game constituting the total amount for which Cage marker form means a document, drop. the bankroll custodian is responsible at signed by the customer, evidencing an Counter check means a form provided a given time. extension of credit at the cage to the by the gaming operation for the Accumulated credit payout means customer by the gaming operation. customer to use in lieu of a personal credit earned in a gaming machine that Calibration module means the section check. is paid to a customer manually in lieu of a weigh scale used to set the scale to Credit means the right granted by a of a machine payout. Actual hold percentage means the a specific amount or number of coins to gaming operation to a customer to defer percentage calculated by dividing the be counted. payment of debt or to incur debt and Call bets means a wager made without win by the drop or coin-in (number of defer its payment. cash or chips, reserved for a known credits wagered). Can be calculated for Credit limit means the maximum customer and includes marked bets individual tables or gaming machines, dollar amount of credit assigned to a (which are supplemental bets made type of table games, or gaming machines customer by the gaming operation. on a per day or cumulative basis. during a hand of play). For the purpose Credit slip means a form used to Ante means a player’s initial wager or of settling a call bet, a hand of play in record either: predetermined contribution to the pot craps is defined as a natural winner (1) The return of chips from a gaming before the dealing of the first hand. (e.g., seven or eleven on the come-out table to the cage; or Betting station means the area roll), a natural loser (e.g., a two, three (2) The transfer of IOUs, markers, or designated in a pari-mutuel area that or twelve on the come-out roll), a seven- negotiable checks from a gaming table to accepts wagers and pays winning bets. out, or the player making his point, a cage or bankroll. Betting ticket means a printed, serially whichever comes first. Customer deposits means the amounts numbered form used to record the event Card game means a game in which placed with a cage cashier by customers upon which a wager is made, the the gaming operation is not party to for the customers’ use at a future time. amount and date of the wager, and wagers and from which the gaming Deal means a specific pull tab game sometimes the line or spread (odds). operation receives compensation in the that has a specific serial number Bill acceptor means the device that form of a rake, a time buy-in, or other associated with each game. accepts and reads cash by denomination fee or payment from a player for the Dealer means an employee who in order to accurately register customer privilege of playing. operates a game, individually or as a credits. Card room bank means the operating part of a crew, administering house Bill acceptor canister means the box fund assigned to the card room or main rules and making payoffs. attached to the bill acceptor used to card room bank. Dedicated camera means a video contain cash received by bill acceptors. Cash-out ticket means an instrument camera required to continuously record Bill acceptor canister release key of value generated by a gaming machine a specific activity. means the key used to release the bill representing a cash amount owed to a Deskman means a person who acceptor canister from the bill acceptor customer at a specific gaming machine. authorizes payment of winning tickets device. This instrument may be wagered at and verifies payouts for keno games. Bill acceptor canister storage rack key other machines by depositing the cash- Draw ticket means a blank keno ticket means the key used to access the storage out ticket in the machine bill acceptor. whose numbers are punched out when rack where bill acceptor canisters are Chips means cash substitutes, in balls are drawn for the game. Used to secured. various denominations, issued by a verify winning tickets. Bill acceptor drop means cash gaming operation and used for Drop (for gaming machines) means contained in bill acceptor canisters. wagering. the total amount of cash, cash-out Bill-in meter means a meter included Coin-in meter means the meter that tickets, coupons, coins, and tokens on a gaming machine accepting cash displays the total amount wagered in a removed from drop buckets and/or bill that tracks the number of bills put in the gaming machine that includes coins-in acceptor canisters. machine. and credits played. Drop (for table games) means the total Boxperson means the first-level Coin meter count machine means a amount of cash, chips, and tokens supervisor who is responsible for device used in a coin room to count removed from drop boxes, plus the directly participating in and supervising coin. amount of credit issued at the tables. the operation and conduct of a craps Coin room means an area where coins Drop box means a locked container game. and tokens are stored. affixed to the gaming table into which
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the drop is placed. The game type, table Gaming machine analysis report determined as the difference between number, and shift are indicated on the means a report prepared that compares the total posted jackpot amount and the box. theoretical to actual hold by a gaming coins paid out by the machine. May also Drop box contents keys means the key machine on a monthly or other periodic be the total amount of the jackpot. used to open drop boxes. basis. Lammer button means a type of chip Drop box release keys means the key Gaming machine booths and change that is placed on a gaming table to used to release drop boxes from tables. banks means a booth or small cage in indicate that the amount of chips Drop box storage rack keys means the the gaming machine area used to designated thereon has been given to the key used to access the storage rack provide change to players, store change customer for wagering on credit before where drop boxes are secured. aprons and extra coin, and account for completion of the credit instrument. Drop bucket means a container jackpot and other payouts. Lammer button may also mean a type of located in the drop cabinet (or in a Gaming machine count means the chip used to evidence transfers between secured portion of the gaming machine total amount of coins, tokens, and cash table banks and card room banks. in coinless/cashless configurations) for removed from a gaming machine. The Linked electronic game means any the purpose of collecting coins, tokens, amount counted is entered on the game linked to two (2) or more gaming cash-out tickets, and coupons from the Gaming Machine Count Sheet and is operations that are physically separate gaming machine. considered the drop. Also, the and not regulated by the same Tribal Drop cabinet means the wooden or procedure of counting the coins, tokens, gaming regulatory authority. metal base of the gaming machine that and cash or the process of verifying Main card room bank means a fund of contains the gaming machine drop gaming machine coin and token cash, coin, and chips used primarily for bucket. inventory. poker and pan card game areas. Used to Earned and unearned take means race Gaming machine pay table means the make even cash transfers between bets taken on present and future race reel strip combinations illustrated on various games as needed. May be used events. Earned take means bets received the face of the gaming machine that can similarly in other areas of the gaming on current or present events. Unearned identify payouts of designated coin operation. take means bets taken on future race amounts. Marker means a document, signed by events. Gaming operation accounts receivable the customer, evidencing an extension EPROM means erasable programmable (for gaming operation credit) means of credit to him by the gaming read-only memory or other equivalent credit extended to gaming operation operation. game software media. customers in the form of markers, Marker credit play means that players Fill means a transaction whereby a returned checks, or other credit are allowed to purchase chips using supply of chips, coins, or tokens is instruments that have not been repaid. credit in the form of a marker. transferred from a bankroll to a table Gross gaming revenue means annual Marker inventory form means a form game or gaming machine. total amount of cash wagered on class maintained at table games or in the Fill slip means a document II and class III games and admission fees gaming operation pit that are used to evidencing a fill. (including table or card fees), less any track marker inventories at the Flare means the information sheet amounts paid out as prizes or paid for individual table or pit. provided by the manufacturer that sets prizes awarded. Marker transfer form means a form forth the rules of a particular pull tab Hold means the relationship of win to used to document transfers of markers game and that is associated with a coin-in for gaming machines and win to from the pit to the cage. specific deal of pull tabs. The flare shall drop for table games. Master credit record means a form to contain the following information: Hub means the person or entity that record the date, time, shift, game, table, (1) Name of the game; is licensed to provide the operator of a amount of credit given, and the (2) Manufacturer name or pari-mutuel wagering operation signatures or initials of the persons manufacturer’s logo; information related to horse racing that extending the credit. (3) Ticket count; and is used to determine winners of races or Master game program number means (4) Prize structure, which shall payoffs on wagers accepted by the pari- the game program number listed on a include the number of winning pull tabs mutuel wagering operation. gaming machine EPROM. by denomination, with their respective Internal audit means persons who Master game sheet means a form used winning symbols, numbers, or both. perform an audit function of a gaming to record, by shift and day, each table Future wagers means bets on races to operation that are independent of the game’s winnings and losses. This form be run in the future (e.g., Kentucky department subject to audit. reflects the opening and closing table Derby). Independence is obtained through the inventories, the fills and credits, and the Game server means an electronic organizational reporting relationship, as drop and win. selection device, utilizing a random the internal audit department shall not Mechanical coin counter means a number generator. report to management of the gaming device used to count coins that may be Gaming machine means an electronic operation. Internal audit activities used in addition to or in lieu of a coin or electromechanical machine which should be conducted in a manner that weigh scale. contains a microprocessor with random permits objective evaluation of areas Meter means an electronic (soft) or number generator capability which examined. Internal audit personnel may mechanical (hard) apparatus in a allows a player to play games of chance, provide audit coverage to more than one gaming machine. May record the some of which may be affected by skill, operation within a Tribe’s gaming number of coins wagered, the number of which machine is activated by the operation holdings. coins dropped, the number of times the insertion of a coin, token or cash, or by Issue slip means a copy of a credit handle was pulled, or the number of the use of a credit, and which awards instrument that is retained for coins paid out to winning players. game credits, cash, tokens, or replays, or numerical sequence control purposes. MICS means minimum internal a written statement of the player’s Jackpot payout means the portion of control standards in this part 542. accumulated credits, which written a jackpot paid by gaming machine Motion activated dedicated camera statements be redeemable for cash. personnel. The amount is usually means a video camera that, upon its
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detection of activity or motion in a as it is played (i.e., deferred payout). insufficient to satisfy the requirement of specific area, begins to record the The payoff amount is accumulated, sufficient clarity. activity or area. displayed on a machine, and will Surveillance room means a secure Multi-game machine means a gaming remain until a player lines up the location(s) in a gaming operation used machine that includes more than one jackpot symbols that result in the primarily for casino surveillance. type of game option. progressive amount being paid. Surveillance system means a system Multi-race ticket means a keno ticket Progressive jackpot means deferred of video cameras, monitors, recorders, that is played in multiple games. payout from a progressive gaming video printers, switches, selectors, and On-line gaming machine monitoring machine. other ancillary equipment used for system means a system used by a Progressive table game means table casino surveillance. gaming operation to monitor gaming games that offer progressive jackpots. Table games means games that are machine meter readings and/or other Promotional payout means banked by the house or a pool whereby activities on an on-line basis. merchandise or awards given to players the house or the pool pays all winning Order for credit means a form that is by the gaming operation based on a bets and collects from all losing bets. used to request the transfer of chips or wagering activity. Table inventory means the total coins, markers from a table to the cage. The Promotional progressive pots and/or chips, and markers at a table. order precedes the actual transfer pools means funds contributed to a table Table inventory form means the form transaction that is documented on a game by and for the benefit of players. used by gaming operation supervisory credit slip. Funds are distributed to players based personnel to document the inventory of Outstation means areas other than the on a predetermined event. chips, coins, and tokens on a table at the main keno area where bets may be Rabbit ears means a device, generally beginning and ending of a shift. placed and tickets paid. V-shaped, that holds the numbered balls Table tray means the container Par percentage means the percentage selected during a keno or bingo game so located on gaming tables where chips, of each dollar wagered that the house that the numbers are visible to players coins, or cash are stored that are used wins (i.e., gaming operation advantage). and employees. in the game. Par sheet means a specification sheet Rake means a commission charged by Take means the same as earned and unearned take. for a gaming machine that provides the house for maintaining or dealing a Theoretical hold means the intended machine hold percentage, model game such as poker. hold percentage or win of an individual number, hit frequency, reel Rake circle means the area of a table gaming machine as computed by combination, number of reels, number where rake is placed. reference to its payout schedule and reel of coins that can be accepted, and reel Random number generator means a strip settings or EPROM. strip listing. device that generates numbers in the Theoretical hold worksheet means a Pari-mutuel wagering means a system absence of a pattern. May be used to worksheet provided by the of wagering on horse races, jai-alai, determine numbers selected in various manufacturer for all gaming machines greyhound, and harness racing, where games such as keno and bingo. Also that indicate the theoretical percentages the winners divide the total amount commonly used in gaming machines to that the gaming machine should hold wagered, net of commissions and generate game outcome. based on adequate levels of coin-in. The operating expenses, proportionate to the Reel symbols means symbols listed on worksheet also indicates the reel strip individual amount wagered. reel strips of gaming machines. settings, number of credits that may be Rim credit means extensions of credit Payment slip means that part of a played, the payout schedule, the that are not evidenced by the immediate marker form on which customer number of reels and other information payments are recorded. preparation of a marker and does not descriptive of the particular type of Payout means a transaction associated include call bets. gaming machine. with a winning event. Runner means a gaming employee Tier A means gaming operations with PIN means the personal identification who transports chips/cash to or from a annual gross gaming revenues of more number used to access a player’s gaming table and a cashier. than $1 million but not more than $5 account. SAM means a screen-automated million. Pit podium means a stand located in machine used to accept pari-mutuel Tier B means gaming operations with the middle of the tables used by gaming wagers. SAM’s also pay winning tickets annual gross gaming revenues of more operation supervisory personnel as a in the form of a voucher, which is than $5 million but not more than $15 workspace and a record storage area. redeemable for cash. million. Pit supervisor means the employee Shift means an eight-hour period, Tier C means gaming operations with who supervises all games in a pit. unless otherwise approved by the Tribal annual gross gaming revenues of more Player tracking system means a gaming regulatory authority, not to than $15 million. system typically used in gaming exceed twenty-four (24) hours. Tokens means a coin-like cash machine departments that can record Shill means an employee financed by substitute, in various denominations, the gaming machine play of individual the house and acting as a player for the used for gambling transactions. customers. purpose of starting or maintaining a Tribal gaming regulatory authority Post time means the time when a pari- sufficient number of players in a game. means the tribally designated entity mutuel track stops accepting bets in Short pay means a payoff from a responsible for gaming regulation. accordance with rules and regulations of gaming machine that is less than the Vault means a secure area within the the applicable jurisdiction. listed amount. gaming operation where tokens, checks, Primary and secondary jackpots Soft count means the count of the cash, coins, and chips are stored. means promotional pools offered at contents in a drop box or a bill acceptor Weigh/count means the value of coins certain card games that can be won in canister. and tokens counted by a weigh addition to the primary pot. Sufficient clarity means use of machine. Progressive gaming machine means a monitoring and recording at a minimum Weigh scale calibration module gaming machine, with a payoff of twenty (20) frames per second. means the device used to adjust a coin indicator, in which the payoff increases Multiplexer tape recordings are weigh scale.
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Weigh scale interface means a shall, in accordance with the Tribal recommended CPA Guidelines available communication device between the gaming ordinance, establish and upon request. weigh scale used to calculate the implement tribal internal control (g) Enforcement of Commission amount of funds included in drop standards that shall: Minimum Internal Control Standards. buckets and the computer system used (1) Provide a level of control that (1) Each Tribal gaming regulatory to record the weigh data. equals or exceeds those set forth in this authority is required to establish and Weigh tape means the tape where part; implement internal control standards weighed coin is recorded. (2) Contain standards for currency pursuant to paragraph (c) of this section. Wide area progressive gaming transaction reporting that comply with machine means a progressive gaming 31 CFR part 103; Each gaming operation is then required, machine that is linked to machines in (3) Establish standards for games that pursuant to paragraph (d) of this other operations and play on the are not addressed in this part; and section, to develop and implement an machines affect the progressive amount. (4) Establish a deadline, which shall internal control system that complies As wagers are placed, the progressive not exceed nine (9) months from June with the Tribal internal control meters on all of the linked machines 27, 2002, by which a gaming operation standards. Failure to do so may subject increase. must come into compliance with the the Tribal operator of the gaming Win means the net win resulting from tribal internal control standards. operation, and/or the management all gaming activities. Net win results However, the Tribal gaming regulatory contractor, to penalties under 25 U.S.C. from deducting all gaming losses from authority may extend the deadline by an 2713. all wins prior to considering associated additional six (6) months if written (2) Recognizing that Tribes are the operating expenses. notice is provided to the Commission no primary regulator of their gaming Win-to-write hold percentage means later than two weeks before the win divided by write to determine hold operation(s), enforcement action by the expiration of the nine (9) month period. Commission will not be initiated under percentage. (d) Gaming operations. Each gaming Wrap means the method of storing this part without first informing the operation shall develop and implement Tribe and Tribal gaming regulatory coins after the count process has been an internal control system that, at a completed, including, but not limited authority of deficiencies in the internal minimum, complies with the tribal controls of its gaming operation and to, wrapping, racking, or bagging. May internal control standards. allowing a reasonable period of time to also refer to the total amount or value (1) Existing gaming operations. All address such deficiencies. Such prior of the counted and stored coins. gaming operations that are operating on notice and opportunity for corrective Write means the total amount wagered or before June 27, 2002, shall comply action is not required where the threat in keno, bingo, pull tabs, and pari- with this part within the time mutuel operations. requirements established in paragraph to the integrity of the gaming operation Writer means an employee who writes (c) of this section. In the interim, such is immediate and severe. keno, bingo, pull tabs, or pari-mutuel operations shall continue to comply tickets. A keno writer usually also § 542.4 How do these regulations affect with existing tribal internal control makes payouts. minimum internal control standards standards. established in a Tribal-State compact? § 542.3 How do I comply with this part? (2) New gaming operations. All (a) If there is a direct conflict between (a) Compliance based upon tier. (1) gaming operations that commence operations after August 26, 2002, shall an internal control standard established Tier A gaming operations must comply in a Tribal-State compact and a standard with §§ 542.1 through 542.18, and comply with this part before or requirement set forth in this part, §§ 542.20 through 542.23. commencement of operations. then the internal control standard (2) Tier B gaming operations must (e) Submission to Commission. Tribal comply with §§ 542.1 through 542.18, regulations promulgated pursuant to established in a Tribal-State compact and §§ 542.30 through 542.33. this part shall not be required to be shall prevail. (3) Tier C gaming operations must submitted to the Commission pursuant (b) If an internal control standard in comply with §§ 542.1 through 542.18, to 25 CFR 522.3(b). a Tribal-State compact provides a level and §§ 542.40 through 542.43. (f) CPA testing. (1) An independent of control that equals or exceeds the (b) Determination of tier. (1) The certified public accountant (CPA) shall level of control under an internal determination of tier level shall be made be engaged to perform procedures to control standard or requirement set based upon the annual gross gaming verify, on a test basis, that the gaming forth in this part, then the Tribal-State revenues indicated within the gaming operation is in material compliance compact standard shall prevail. operation’s audited financial statements. with the tribal internal control (c) If an internal control standard or Gaming operations moving from one tier standards or a tribally approved a requirement set forth in this part to another shall have nine (9) months variance that has received Commission provides a level of control that exceeds from the date of the independent concurrence. The procedures may be certified public accountant’s audit performed in conjunction with the the level of control under an internal report to achieve compliance with the annual audit. The CPA shall report its control standard established in a Tribal- requirements of the new tier. findings to the Tribe, Tribal gaming State compact, then the internal control (2) The Tribal gaming regulatory regulatory authority, and management. standard or requirement set forth in this authority may extend the deadline by an The Tribe shall submit a copy of the part shall prevail. report to the Commission within 120 additional six (6) months if written § 542.5 How do these regulations affect notice is provided to the Commission no days of the gaming operation’s fiscal state jurisdiction? later than two weeks before the year end. expiration of the nine (9) month period. (2) CPA Guidelines. In connection Nothing in this part shall be (c) Tribal internal control standards. with the CPA testing pursuant to construed to grant to a state jurisdiction Within six (6) months of June 27, 2002, paragraph (f)(1) of this section, the in class II gaming or extend a state’s each Tribal gaming regulatory authority Commission shall develop jurisdiction in class III gaming.
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§ 542.6 Does this part apply to small and are permitted to announce the serial payout form/documentation shall charitable gaming operations? numbers of winning cards. include the following information: (a) Small gaming operations. This part (2) All sales of bingo cards shall be (i) Date and time; shall not apply to small gaming documented by recording at least the (ii) Dollar amount of payout or operations provided that: following: description of personal property (e.g., (1) The Tribal gaming regulatory (i) Date; jacket, toaster, car, etc.), including fair authority permits the operation to be (ii) Shift (if applicable); market value; exempt from this part; (iii) Session (if applicable); (iii) Type of promotion; and (2) The annual gross gaming revenue (iv) Dollar amount; (iv) Signature of at least one employee of the operation does not exceed $1 (v) Signature, initials, or identification authorizing and completing the million; and number of at least one seller (if transaction. (3) The Tribal gaming regulatory manually documented); and (2) [Reserved] authority develops and the operation (vi) Signature, initials, or (d) Accountability form. (1) All funds complies with alternate procedures that: identification number of a person used to operate the bingo department (i) Protect the integrity of games independent of the seller who has shall be recorded on an accountability offered; and randomly verified the card sales (this form. (ii) Safeguard the assets used in requirement is not applicable to (2) All funds used to operate the bingo connection with the operation. locations with $1 million or less in department shall be counted (b) Charitable gaming operations. annual write). independently by at least two persons This part shall not apply to charitable (3) The total win and write shall be and reconciled to the recorded amounts gaming operations provided that: computed and recorded by shift (or at the end of each shift or session. (1) All proceeds are for the benefit of session, if applicable). (e) Bingo equipment. (1) Access to a charitable organization; (4) The Tribal gaming regulatory controlled bingo equipment (e.g., (2) The Tribal gaming regulatory authority, or the gaming operation as blower, balls in play, and back-up balls) authority permits the charitable approved by the Tribal gaming shall be restricted to authorized persons. organization to be exempt from this regulatory authority, shall establish and (2) The procedures established by the part; the gaming operation shall comply with Tribal gaming regulatory authority, or (3) The charitable gaming operation is procedures that ensure the correct the gaming operation as approved by the operated wholly by the charitable calling of numbers selected in the bingo Tribal gaming regulatory authority, shall organization’s employees or volunteers; game. include standards relating to the (4) The annual gross gaming revenue (5) Each ball shall be shown to a inspection of new bingo balls put into of the charitable gaming operation does camera immediately before it is called play as well as for those in use. not exceed $100,000; so that it is individually displayed to all (3) Bingo equipment shall be (i) Where the annual gross gaming customers. For speed bingo games not maintained and checked for accuracy on revenues of the charitable gaming verified by camera equipment, each ball a periodic basis. operation exceed $100,000, but are less drawn shall be verified by a person (4) The bingo card inventory shall be than $1 million, paragraph (a) of this independent of the bingo caller controlled so as to assure the integrity section shall also apply; and responsible for calling the speed bingo of the cards being used as follows: (ii) [Reserved] game. (i) Purchased paper shall be (5) The Tribal gaming regulatory (6) For all coverall games and other inventoried and secured by a person or authority develops and the charitable games offering a payout of $1,200 or persons independent of the bingo sales; gaming operation complies with more, as the balls are called the (ii) The issue of paper to the cashiers alternate procedures that: numbers shall be immediately recorded shall be documented and signed for by (i) Protect the integrity of the games by the caller and maintained for a the person responsible for inventory offered; and minimum of twenty-four (24) hours. control and a cashier. The document log (ii) Safeguard the assets used in (7) Controls shall be present to assure shall include the series number of the connection with the gaming operation. that the numbered balls are placed back bingo paper; (c) Independent operators. Nothing in into the selection device prior to calling (iii) A copy of the bingo paper control this section shall exempt gaming the next game. log shall be given to the bingo ball caller operations conducted by independent (8) The authenticity of each payout for purposes of determining if the operators for the benefit of a charitable shall be verified by at least two persons. winner purchased the paper that was organization. A computerized card verifying system issued for sale that day (electronic may function as the second person verification satisfies this standard); § 542.7 What are the minimum internal verifying the payout if the card with the (iv) At the end of each month, a control standards for bingo? winning numbers is displayed on a person or persons independent of bingo (a) Computer applications. For any reader board. sales and inventory control shall verify computer applications utilized, (9) Payouts in excess of $1,200 shall the accuracy of the ending balance in alternate documentation and/or require written approval, by personnel the bingo paper control by reconciling procedures that provide at least the independent of the transaction, that the the paper on-hand; level of control described by the bingo card has been examined and (v) A monthly comparison for standards in this section, as approved verified with the bingo card record to reasonableness shall be made of the by the Tribal gaming regulatory ensure that the ticket has not been amount of paper sold from the bingo authority, will be acceptable. altered. paper control log to the amount of (b) Game play standards. (1) The (10) Total payout shall be computed revenue recognized. functions of seller and payout verifier and recorded by shift or session, if (f) Standards for statistical reports. (1) shall be segregated. Employees who sell applicable. Records shall be maintained, which cards on the floor shall not verify (c) Promotional payouts or awards. (1) include win, write (card sales), and a payouts with cards in their possession. If the gaming operation offers win-to-write hold percentage, for: Floor clerks who sell cards on the floor promotional payouts or awards, the (i) Each shift or each session;
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(ii) Each day; (viii) Prize amounts at start and end (3) All player transactions shall be (iii) Month-to-date; and of game. maintained, chronologically by account (iv) Year-to-date or fiscal year-to-date. (j) Host requirements/sales number, through electronic means on a (2) A manager independent of the information (for linked electronic data storage device. These transaction bingo department shall review bingo games). (1) Providers of any linked records shall be maintained on-line statistical information on at least a electronic game(s) shall maintain throughout the active game and for at monthly basis and investigate any large complete records of sales data for a least twenty-four (24) hours before they or unusual statistical fluctuations. period of one (1) year from the date the can be stored on an ‘‘off-line’’ data (3) Investigations shall be games are played (or a time frame storage media. documented, maintained for inspection, established by the Tribal gaming (4) The game software shall provide and provided to the Tribal gaming regulatory authority). This data may be the ability to, upon request, produce a regulatory authority upon request. kept in an archived manner, provided printed account history, including all (g) Electronic equipment. (1) If the the information can be produced within transactions, and a printed game gaming operation utilizes electronic twenty-four (24) hours upon request. In summary (total purchases, deposits, equipment in connection with the play any event, sales data for the preceding wins, debits, for any account that has of bingo, then the following standards ten (10) days shall be immediately been active in the game during the shall also apply. preceding twenty-four (24) hours). (i) If the electronic equipment accessible. Summary information must (5) The game software shall provide a contains a bill acceptor, then § 542.21(d) be accessible for at least 120 days. ‘‘player account summary’’ at the end of and (e), § 542.31(d) and (e), or (2) Sales information required shall every game. This summary shall list all § 542.41(d) and (e) (as applicable) shall include: accounts for which there were any apply. (i) Daily sales totals by location; (ii) If the electronic equipment uses a (ii) Commissions distribution transactions during that game day and bar code or microchip reader, the reader summary by location; include total purchases, total deposits, shall be tested periodically by a person (iii) Game-by-game sales, prizes, total credits (wins), total debits (cash- or persons independent of the bingo refunds, by location; and outs) and an ending balance. department to determine that it is (iv) Daily network summary, by game § 542.8 What are the minimum internal correctly reading the bar code or the by location. control standards for pull tabs? microchip. (k) Remote host requirements (for (a) Computer applications. For any (iii) If the electronic equipment linked electronic games). (1) Linked computer application utilized, alternate returns a voucher or a payment slip to electronic game providers shall documentation and/or procedures that the player, then § 542.13(n) (as maintain on-line records at the remote provide at least the level of control applicable) shall apply. host site for any game played. These described by the standards in this (2) [Reserved] records shall remain on-line until the (h) Standards for linked electronic section, as approved by the Tribal conclusion of the session of which the gaming regulatory authority, will be games. Management shall ensure that all game is a part. Following the conclusion agreements/contracts entered into after acceptable. of the session, records may be archived, (b) Pull tab inventory. (1) Pull tab June 27, 2002 to provide linked but in any event, must be retrievable in inventory (including unused tickets) electronic games shall contain language a timely manner for at least seventy-two shall be controlled to assure the requiring the vendor to comply with the (72) hours following the close of the integrity of the pull tabs. standards in this section applicable to session. Records shall be accessible (2) Purchased pull tabs shall be the goods or services the vendor is through some archived media for at inventoried and secured by a person or providing. least ninety (90) days from the date of persons independent of the pull tab (i) Host requirements/game the game. information (for linked electronic sales. (2) Game information required (3) The issue of pull tabs to the games). (1) Providers of any linked includes date and time of game start and cashier or sales location shall be electronic game(s) shall maintain game end, sales totals, cash distribution documented and signed for by the complete records of game data for a (prizes) totals, and refund totals. person responsible for inventory control period of one (1) year from the date the (3) Sales information required and the cashier. The document log shall games are played (or a time frame includes cash register reconciliations, include the serial number of the pull established by the Tribal gaming detail and summary records for tabs issued. regulatory authority). This data may be purchases, prizes, refunds, credits, and (4) Appropriate documentation shall kept in an archived manner, provided game/sales balance for each session. be given to the redemption booth for the information can be produced within (l) Standards for player accounts (for purposes of determining if the winner twenty-four (24) hours upon request. In proxy play and linked electronic purchased the pull tab from the pull any event, game data for the preceding games). (1) Prior to participating in any tabs issued by the gaming operation. seventy-two (72) hours shall be game, players shall be issued a unique Electronic verification satisfies this immediately accessible. player account number. The player requirement. (2) Data required to be maintained for account number can be issued through (5) At the end of each month, a person each game played includes: the following means: (i) Date and time game start and game or persons independent of pull tab sales (i) Through the use of a point-of-sale end; and inventory control shall verify the (ii) Sales information by location; (cash register device); accuracy of the ending balance in the (iii) Cash distribution by location; (ii) By assignment through an pull tab control by reconciling the pull (iv) Refund totals by location; individual play station; or tabs on hand. (v) Cards-in-play count by location; (iii) Through the incorporation of a (6) A monthly comparison for (vi) Identification number of winning ‘‘player tracking’’ media. reasonableness shall be made of the card(s); (2) Printed receipts issued in amount of pull tabs sold from the pull (vii) Ordered list of bingo balls drawn; conjunction with any player account tab control log to the amount of revenue and should include a time/date stamp. recognized.
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(c) Access. Access to pull tabs shall be (iii) If the electronic equipment (ii) [Reserved] restricted to authorized persons. returns a voucher or a payment slip to (4) A card control log shall be (d) Transfers. Transfers of pull tabs the player, then § 542.13(n)(as maintained that documents when cards from storage to the sale location shall be applicable) shall apply. and dice are received on site, secured and independently controlled. (2) [Reserved] distributed to and returned from tables (e) Winning pull tabs. (1) Winning and removed from play by the gaming pull tabs shall be verified and paid as § 542.9 What are the minimum internal operation. follows: control standards for card games? (e) Plastic cards. Notwithstanding (i) Payouts in excess of a dollar (a) Computer applications. For any paragraph (d) of this section, if a gaming amount determined by the gaming computer applications utilized, operation uses plastic cards (not plastic- operation, as approved by the Tribal alternate documentation and/or coated cards), the cards may be used for gaming regulatory authority, shall be procedures that provide at least the up to three (3) months if the plastic verified by at least two employees. level of control described by the cards are routinely inspected, and (ii) Total payout shall be computed standards in this section, as approved washed or cleaned in a manner and time and recorded by shift. by the Tribal gaming regulatory frame approved by the Tribal gaming (iii) The winning pull tabs shall be authority, will be acceptable. regulatory authority. voided so that they cannot be presented (b) Standards for drop and count. The (f) Standards for shills. (1) Issuance of for payment again. procedures for the collection of the card shill funds shall have the written (2) Personnel independent of pull tab game drop and the count thereof shall approval of the supervisor. operations shall verify the amount of comply with § 542.21, § 542.31, or (2) Shill returns shall be recorded and winning pull tabs redeemed each day. § 542.41 (as applicable). verified on the shill sign-out form. (f) Accountability form. (1) All funds (c) Standards for supervision. (1) (3) The replenishment of shill funds used to operate the pull tab game shall Supervision shall be provided at all shall be documented. be recorded on an accountability form. times the card room is in operation by (g) Standards for reconciliation of (2) All funds used to operate the pull personnel with authority equal to or card room bank. (1) The amount of the tab game shall be counted greater than those being supervised. main card room bank shall be counted, independently by at least two persons (2) Exchanges between table banks recorded, and reconciled on at least a and reconciled to the recorded amounts and the main card room bank (or cage, per shift basis. at the end of each shift or session. if a main card room bank is not used) (2) At least once per shift, the table (g) Standards for statistical reports. in excess of $100.00 shall be authorized banks that were opened during that shift (1) Records shall be maintained, which by a supervisor. All exchanges shall be shall be counted, recorded, and include win, write (sales), and a win-to- evidenced by the use of a lammer unless reconciled by a dealer or other person, write hold percentage as compared to the exchange of chips, tokens, and/or and a supervisor, and shall be attested the theoretical hold percentage derived cash takes place at the table. to by their signatures on the check-out from the flare, for each deal or type of (3) Exchanges from the main card form. game, for: room bank (or cage, if a main card room (h) Standards for promotional (i) Each shift; progressive pots and pools. (1) All funds (ii) Each day; bank is not used) to the table banks shall be verified by the card room dealer and contributed by players into the pools (iii) Month-to-date; and shall be returned when won in (iv) Year-to-date or fiscal year-to-date the runner. (4) If applicable, transfers between the accordance with the posted rules with as applicable. no commission or administrative fee (2) A manager independent of the pull main card room bank and the cage shall be properly authorized and withheld. tab operations shall review statistical (2) Rules governing promotional pools documented. information at least on a monthly basis shall be conspicuously posted and and shall investigate any large or (5) A rake collected or ante placed shall be done in accordance with the designate: unusual statistical fluctuations. These (i) The amount of funds to be posted rules. investigations shall be documented, contributed from each pot; maintained for inspection, and provided (d) Standards for playing cards. (1) (ii) What type of hand it takes to win to the Tribal gaming regulatory Playing cards shall be maintained in a the pool (e.g., what constitutes a ‘‘bad authority upon request. secure location to prevent unauthorized beat’’); (3) Each month, the actual hold access and to reduce the possibility of (iii) How the promotional funds will percentage shall be compared to the tampering. be paid out; theoretical hold percentage. Any (2) Used cards shall be maintained in (iv) How/when the contributed funds significant variations (3%) shall be a secure location until marked, scored, are added to the jackpots; and investigated. or destroyed, in a manner approved by (v) Amount/percentage of funds (h) Electronic equipment. (1) If the the Tribal gaming regulatory authority, allocated to primary and secondary gaming operation utilizes electronic to prevent unauthorized access and jackpots, if applicable. equipment in connection with the play reduce the possibility of tampering. (3) Promotional pool contributions of pull tabs, then the following (3) The Tribal gaming regulatory shall not be placed in or near the rake standards shall also apply. authority, or the gaming operation as circle, in the drop box, or commingled (i) If the electronic equipment approved by the Tribal gaming with gaming revenue from card games contains a bill acceptor, then § 542.21(d) regulatory authority, shall establish and or any other gambling game. and (e), § 542.31(d) and (e), or the gaming operation shall comply with (4) The amount of the jackpot shall be § 542.41(d) and (e)(as applicable) shall a reasonable time period, which shall conspicuously displayed in the card apply. not exceed seven (7) days, within which room. (ii) If the electronic equipment uses a to mark, cancel, or destroy cards from (5) At least once a day, the posted bar code or microchip reader, the reader play. pool amount shall be updated to reflect shall be tested periodically to determine (i) This standard shall not apply the current pool amount. that it is correctly reading the bar code where playing cards are retained for an (6) At least once a day, increases to or microchip. investigation. the posted pool amount shall be
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reconciled to the cash previously (2) The information on the ticket shall (i) The random number generator counted or received by the cage by be recorded on a restricted transaction shall be linked to the computer system personnel independent of the card log or computer storage media and shall directly relay the numbers room. concurrently with the generation of the selected into the computer without (7) All decreases to the pool must be ticket. manual input. properly documented, including a (3) Keno personnel shall be precluded (ii) Keno personnel shall be precluded reason for the decrease. from having access to the restricted from access to the random number (i) Promotional progressive pots and transaction log or computer storage generator. pools where funds are displayed in the media. (2) [Reserved] card room. (1) Promotional funds (4) When it is necessary to void a (e) Winning tickets. Winning tickets displayed in the card room shall be ticket, the void information shall be shall be verified and paid as follows: placed in a locked container in plain inputted in the computer and the (1) The sequence number of tickets view of the public. computer shall document the presented for payment shall be inputted (2) Persons authorized to transport the appropriate information pertaining to into the computer, and the payment locked container shall be precluded the voided wager (e.g., void slip is amount generated by the computer shall from having access to the contents keys. issued or equivalent documentation is be given to the customer. (3) The contents key shall be generated). (2) The Tribal gaming regulatory maintained by personnel independent (5) Controls shall exist to prevent the authority, or the gaming operation as of the card room. writing and voiding of tickets after a approved by the Tribal gaming (4) At least once a day, the locked game has been closed and after the regulatory authority, shall establish and container shall be removed by two number selection process for that game the gaming operation shall comply with persons, one of whom is independent of has begun. procedures that preclude payment on the card games department, and (6) The controls in effect for tickets tickets previously presented for transported directly to the cage or other prepared in outstations (if applicable) payment, unclaimed winning tickets secure room to be counted, recorded, shall be identical to those in effect for (sleepers) after a specified period of and verified. the primary keno game. time, voided tickets, and tickets that (5) The locked container shall then be (c) Rabbit ear or wheel system. (1) The have not been issued yet. returned to the card room where the following standards shall apply if a (3) All payouts shall be supported by posted pool amount shall be updated to rabbit ear or wheel system is utilized: the customer (computer-generated) copy reflect the current pool amount. (i) A dedicated camera shall be of the winning ticket (payout amount is (j) Promotional progressive pots and utilized to monitor the following both indicated on the customer ticket or a pools where funds are maintained in the prior to, and subsequent to, the calling payment slip is issued). cage. (1) Promotional funds removed of a game: (4) A manual report or other from the card game shall be placed in (A) Empty rabbit ears or wheel; documentation shall be produced and a locked container. (B) Date and time; maintained documenting any payments (2) Persons authorized to transport the (C) Game number; and made on tickets that are not authorized locked container shall be precluded (D) Full rabbit ears or wheel. by the computer. from having access to the contents keys. (ii) The film of the rabbit ears or (5) Winning tickets over a specified (3) The contents key shall be wheel shall provide a legible dollar amount (not to exceed $10,000 for maintained by personnel independent identification of the numbers on the locations with more than $5 million of the card room. balls drawn. annual keno write and $3,000 for all (4) At least once a day, the locked (iii) Keno personnel shall other locations) shall also require the container shall be removed by two immediately input the selected numbers following: persons, one of whom is independent of in the computer and the computer shall (i) Approval of management the card games department, and document the date, the game number, personnel independent of the keno transported directly to the cage or other the time the game was closed, and the department, evidenced by their secure room to be counted, recorded, numbers drawn. signature; and verified, prior to accepting the (iv) The Tribal gaming regulatory (ii) Review of the video recording funds into cage accountability. authority, or the gaming operation as and/or digital record of the rabbit ears (5) The posted pool amount shall then approved by the Tribal gaming or wheel to verify the legitimacy of the be updated to reflect the current pool regulatory authority, shall establish and draw and the accuracy of the draw amount. the gaming operation shall comply with ticket (for rabbit ear or wheel systems procedures that prevent unauthorized only); § 542.10 What are the minimum internal access to keno balls in play. (iii) Comparison of the winning control standards for keno? (v) Back-up keno ball inventories customer copy to the computer reports; (a) Computer applications. For any shall be secured in a manner to prevent (iv) Regrading of the customer copy computer applications utilized, unauthorized access. using the payout schedule and draw alternate documentation and/or (vi) The Tribal gaming regulatory information; and procedures that provide at least the authority, or the gaming operation as (v) Documentation and maintenance level of control described by the approved by the Tribal gaming of the procedures in this paragraph. standards in this section, as approved regulatory authority, shall establish and (6) When the keno game is operated by the Tribal gaming regulatory the gaming operation shall comply with by one person, all winning tickets in authority, will be acceptable. procedures for inspecting new keno excess of an amount to be determined (b) Game play standards. (1) The balls put into play as well as for those by management (not to exceed $1,500) computerized customer ticket shall in use. shall be reviewed and authorized by a include the date, game number, ticket (2) [Reserved] person independent of the keno sequence number, station number, and (d) Random number generator. (1) department. conditioning (including multi-race if The following standards shall apply if a (f) Check out standards at the end of applicable). random number generator is utilized: each keno shift. (1) For each writer
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station, a cash summary report (count (3) The documentation shall include, (vi) Review system exception sheet) shall be prepared that includes: at a minimum: information on a daily basis for (i) Computation of net cash proceeds (i) Ticket information (as described in propriety of transactions and unusual for the shift and the cash turned in; and paragraph (b)(1) of this section); occurrences including changes to the (ii) Signatures of two employees who (ii) Payout information (date, time, personnel access listing; have verified the net cash proceeds for ticket number, amount, etc.); (vii) If a random number generator is the shift and the cash turned in. (iii) Game information (number, ball used, then at least weekly review the (2) [Reserved] draw, time, etc.); numerical frequency distribution for (g) Promotional payouts or awards. (1) (iv) Daily recap information, potential patterns; and If a gaming operation offers promotional including: (viii) Investigate and document results payouts or awards, the payout form/ (A) Write; of all noted improper transactions or documentation shall include the (B) Payouts; and unusual occurrences. following information: (C) Gross revenue (win); (5) When the keno game is operated (i) Date and time; (v) System exception information, by one person: (ii) Dollar amount of payout or including: (i) The customer copies of all winning description of personal property (e.g., (A) Voids; tickets in excess of $100 and at least 5% jacket, toaster, car, etc.), including fair (B) Late pays; and of all other winning tickets shall be (C) Appropriate system parameter market value; regraded and traced to the computer information (e.g., changes in pay tables, (iii) Type of promotion; and payout report; ball draws, payouts over a (iv) Signature of at least one employee (ii) The video recording and/or digital predetermined amount, etc.); and authorizing and completing the record of rabbit ears or wheel shall be (vi) Personnel access listing, transaction. randomly compared to the computer (2) [Reserved] including: game information report for at least 10% (h) Standards for statistical reports. (A) Employee name or employee of the games during the shift; and (1) Records shall be maintained that identification number; and (iii) Keno audit personnel shall include win and write by individual (B) Listing of functions employee can review winning tickets for proper writer for each day. perform or equivalent means of (2) Records shall be maintained that identifying same. authorization pursuant to paragraph include win, write, and win-to-write (k) Keno audit standards. (1) The (e)(6) of this section. hold percentage for: keno audit function shall be (6) In the event any person performs (i) Each shift; independent of the keno department. the writer and deskman functions on the (ii) Each day; (2) At least annually, keno audit shall same shift, the procedures described in (iii) Month-to-date; and foot the write on the restricted copy of paragraphs (k)(5)(i) and (ii) of this (iv) Year-to-date or fiscal year-to-date the keno transaction report for a section (using the sample sizes as applicable. minimum of one shift and compare the indicated) shall be performed on tickets (3) A manager independent of the total to the total as documented by the written by that person. keno department shall review keno computer. (7) Documentation (e.g., a log, statistical data at least on a monthly (3) For at least one shift every other checklist, etc.) that evidences the basis and investigate any large or month, keno audit shall perform the performance of all keno audit unusual statistical variances. following: procedures shall be maintained. (4) At a minimum, investigations shall (i) Foot the customer copy of the (8) A manager independent of the be performed for statistical percentage payouts and trace the total to the payout keno department shall review keno fluctuations from the base level for a report; and audit exceptions, and perform and month in excess of ±3%. The base level (ii) Regrade at least 1% of the winning document investigations into shall be defined as the gaming tickets using the payout schedule and unresolved exceptions. These operation’s win percentage for the draw ticket. investigations shall be documented, previous business year or the previous (4) Keno audit shall perform the maintained for inspection, and provided twelve (12) months. following: to the Tribal gaming regulatory (5) Such investigations shall be (i) For a minimum of five games per authority upon request. documented, maintained for inspection, week, compare the video recording and/ (9) When a multi-game ticket is part and provided to the Tribal gaming or digital record of the rabbit ears or of the sample in paragraphs (k)(3)(ii), regulatory authority upon request. wheel to the computer transaction (k)(5)(i) and (k)(6) of this section, the (i) System security standards. (1) All summary; procedures may be performed for ten keys (including duplicates) to sensitive (ii) Compare net cash proceeds to the (10) games or ten percent (10%) of the computer hardware in the keno area audited win/loss by shift and investigate games won, whichever is greater. shall be maintained by a department any large cash overages or shortages (l) Access. Access to the computer independent of the keno function. (i.e., in excess of $25.00); system shall be adequately restricted (2) Personnel independent of the keno (iii) Review and regrade all winning (i.e., passwords are changed at least department shall be required to tickets greater than or equal to $1,500, quarterly, access to computer hardware accompany such keys to the keno area including all forms that document that is physically restricted, etc.). and shall observe changes or repairs proper authorizations and verifications (m) Equipment standards. (1) There each time the sensitive areas are were obtained and performed; shall be effective maintenance planned accessed. (iv) Review the documentation for to service keno equipment, including (j) Documentation standards. (1) payout adjustments made outside the computer program updates, hardware Adequate documentation of all computer and investigate large and servicing, and keno ball selection pertinent keno information shall be frequent payments; equipment (e.g., service contract with generated by the computer system. (v) Review personnel access listing for lessor). (2) This documentation shall be inappropriate functions an employee (2) Keno equipment maintenance restricted to authorized personnel. can perform; (excluding keno balls) shall be
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independent of the operation of the establish and the gaming operation shall (ii) Gaming operation name (or keno game. comply with standards that ensure that identification number) and station (3) Keno maintenance personnel shall the gaming operation receives, from the number; report irregularities to management racetrack, its contractually guaranteed (iii) Race track, race number, horse personnel independent of the keno percentage of the handle. identification or event identification, as department. (2) Gaming operations that contract applicable; (4) If the gaming operation utilizes a directly with a state regulated racetrack (iv) Type of bet(s), each bet amount, barcode or microchip reader in as a simulcast service provider, but total number of bets, and total take; and connection with the play of keno, the whose on-site pari-mutuel operations (v) Date and time. reader shall be tested at least annually are conducted wholly or in part by tribal (5) All tickets shall be considered by personnel independent of the keno gaming operation employees, shall not final at post time. department to determine that it is be required to comply with paragraphs (6) If a gaming operation voids a correctly reading the barcode or (h)(5) thru (h)(9) of this section. betting ticket written prior to post time, microchip. (i) If any standard contained within it shall be immediately entered into the (n) Document retention. (1) All this section conflicts with state law, a system. (7) Future wagers shall be accepted documents (including computer storage tribal-state compact, or a contract, then and processed in the same manner as media) discussed in this section shall be the gaming operation shall document regular wagers. retained for five (5) years, except for the the basis for noncompliance and shall (d) Payout standards. (1) Prior to following, which shall be retained for at maintain such documentation for making payment on a ticket, the writer/ least seven (7) days: inspection by the Tribal gaming cashier shall input the ticket for (i) Video recordings and/or digital regulatory authority and the verification and payment authorization. records of rabbit ears or wheel; Commission. (ii) All copies of winning keno tickets (2) The computer shall be incapable of (ii) In addition, the Tribal gaming of less than $1,500.00. authorizing payment on a ticket that has regulatory authority, or the gaming (2) [Reserved] been previously paid, a voided ticket, a operation as approved by the Tribal (o) Multi-race tickets. (1) Procedures losing ticket, or an unissued ticket. gaming regulatory authority, shall shall be established to notify keno (e) Checkout standards. (1) Whenever establish and the gaming operation shall personnel immediately of large multi- the betting station is closed or the comply with standards that ensure that race winners to ensure compliance with writer/cashier is replaced, the writer/ the gaming operation receives, from the standards in paragraph (e)(5) of this cashier shall sign off and the computer racetrack, its contractually guaranteed section. shall document the gaming operation (2) Procedures shall be established to percentage of the handle. name (or identification number), station ensure that keno personnel are aware of (b) Computer applications. For any number, the writer/cashier identifier, multi-race tickets still in process at the computer applications utilized, the date and time, and cash balance. end of a shift. alternate documentation and/or (2) For each writer/cashier station a (p) Manual keno. For gaming procedures that provide at least the summary report shall be completed at operations that conduct manual keno level of control described by the the conclusion of each shift including: games, alternate procedures that provide standards in this section, as approved (i) Computation of cash turned in for at least the level of control described by by the Tribal gaming regulatory the shift; and the standards in this section shall be authority, will be acceptable. (ii) Signatures of two employees who developed and implemented. (c) Betting ticket and equipment have verified the cash turned in for the standards. (1) All pari-mutuel wagers shift. § 542.11 What are the minimum internal shall be transacted through the pari- (f) Employee wagering. Pari-mutuel control standards for pari-mutuel mutuel satellite system. In case of employees shall be prohibited from wagering? computer failure between the pari- wagering on race events while on duty, (a) Exemptions. (1) The requirements mutuel book and the hub, no tickets including during break periods. of this section shall not apply to gaming shall be manually written. (g) Computer reports standards. (1) operations who house pari-mutuel (2) Whenever a betting station is Adequate documentation of all wagering operations conducted entirely opened for wagering or turned over to pertinent pari-mutuel information shall by a state licensed simulcast service a new writer/cashier, the writer/cashier be generated by the computer system. provider pursuant to an approved tribal- shall sign on and the computer shall (2) This documentation shall be state compact if: document gaming operation name (or restricted to authorized personnel. (i) The simulcast service provider identification number), station number, (3) The documentation shall be utilizes its own employees for all the writer/cashier identifier, and the created for each day’s operation and aspects of the pari-mutuel wagering date and time. shall include, but is not limited to: operation; (3) A betting ticket shall consist of at (i) Unique transaction identifier; (ii) The gaming operation posts, in a least two parts: (ii) Date/time of transaction; location visible to the public, that the (iii) Type of wager; simulcast service provider and its (i) An original, which shall be (iv) Animal identification or event employees are wholly responsible for transacted and issued through a printer identification; the conduct of pari-mutuel wagering and given to the customer; and (v) Amount of wagers (by ticket, offered at that location; (ii) A copy that shall be recorded writer/SAM, track/event, and total); (iii) The gaming operation receives a concurrently with the generation of the (vi) Amount of payouts (by ticket, predetermined fee from the simulcast original ticket either on paper or other writer/SAM, track/event, and total); service provider; and storage media (e.g., tape or diskette). (vii) Tickets refunded (by ticket, (iv) In addition, the Tribal gaming (4) Upon accepting a wager, the writer, track/event, and total); regulatory authority, or the gaming betting ticket that is created shall (viii) Unpaid winners/vouchers operation as approved by the Tribal contain the following: (‘‘outs’’) (by ticket/voucher, track/event, gaming regulatory authority, shall (i) A unique transaction identifier; and total);
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(ix) Voucher sales/payments (by (6) All winning tickets and vouchers (3) When a fill/credit slip is voided, ticket, writer/SAM, and track/event); shall be physically removed from the the cashier shall clearly mark ‘‘void’’ (x) Voids (by ticket, writer, and total); SAM’s for each day’s play. across the face of the original and first (xi) Future wagers (by ticket, date of (7) In the event a SAM does not copy, the cashier and one other person event, total by day, and total at the time balance for a day’s play, the auditor independent of the transactions shall of revenue recognition); shall perform the following procedures: sign both the original and first copy, and (xii) Results (winners and payout (i) Foot the winning tickets and shall submit them to the accounting data); vouchers deposited and trace to the department for retention and (xiii) Breakage data (by race and track/ totals of SAM activity produced by the accountability. event); system; (4) Fill transactions shall be (xiv) Commission data (by race and (ii) Foot the listing of cashed vouchers authorized by pit supervisory personnel track/event); and and trace to the totals produced by the before the issuance of fill slips and (xv) Purged data (by ticket and total). system; transfer of chips, tokens, or cash (4) The system shall generate the (iii) Review all exceptions for equivalents. The fill request shall be following reports: propriety of transactions and unusual communicated to the cage where the fill (i) A reconciliation report that occurrences; slip is prepared. summarizes totals by track/event, (iv) Review all voids for propriety; (5) At least three parts of each fill slip including write, the day’s winning (v) Verify the results as produced by shall be utilized as follows: ticket total, total commission and the system to the results provided by an (i) One part shall be transported to the breakage due the gaming operation, and independent source; pit with the fill and, after the net funds transferred to or from the (vi) Regrade 1% of paid (cashed) appropriate signatures are obtained, gaming operation’s bank account; tickets to ensure accuracy and propriety; deposited in the table game drop box; (ii) An exception report that contains and (ii) One part shall be retained in the a listing of all system functions and (vii) When applicable, reconcile the cage for reconciliation of the cashier overrides not involved in the actual totals of future tickets written to the bank; and writing or cashing of tickets, including totals produced by the system for both (iii) For computer systems, one part sign-on/off, voids, and manually input earned and unearned take, and review shall be retained in a secure manner to paid tickets; and the reports to ascertain that future insure that only authorized persons may (iii) A purged ticket report that wagers are properly included on the day gain access to it. For manual systems, contains a listing of the unique of the event. one part shall be retained in a secure (8) At least annually, the auditor shall transaction identifier(s), description, manner in a continuous unbroken form. foot the wagers for one day and trace to ticket cost and value, and date purged. (6) For Tier C gaming operations, the the total produced by the system. (h) Accounting and auditing part of the fill slip that is placed in the (9) At least one day per quarter, the functions. A gaming operation shall table game drop box shall be of a auditor shall recalculate and verify the perform the following accounting and different color for fills than for credits, change in the unpaid winners to the auditing functions: unless the type of transaction is clearly total purged tickets. (1) The parimutuel audit shall be distinguishable in another manner (the conducted by personnel independent of § 542.12 What are the minimum internal checking of a box on the form shall not the parimutuel operation. control standards for table games? be a clearly distinguishable indicator). (2) Documentation shall be (a) Computer applications. For any (7) The table number, shift, and maintained evidencing the performance computer applications utilized, amount of fill by denomination and in of all parimutuel accounting and alternate documentation and/or total shall be noted on all copies of the auditing procedures. procedures that provide at least the fill slip. The correct date and time shall (3) An accounting employee shall level of control described by the be indicated on at least two copies. review handle, commission, and standards in this section, as approved (8) All fills shall be carried from the breakage for each day’s play and by the Tribal gaming regulatory cashier’s cage by a person who is recalculate the net amount due to or authority, will be acceptable. independent of the cage or pit. from the systems operator on a weekly (b) Standards for drop and count. The (9) The fill slip shall be signed by at basis. procedures for the collection of the table least the following persons (as an (4) The accounting employee shall game drop and the count thereof shall indication that each has counted the verify actual cash/cash equivalents comply with § 542.21, § 542.31, or amount of the fill and the amount agrees turned in to the system’s summary § 542.41 (as applicable). with the fill slip): report for each cashier’s drawer (c) Fill and credit standards. (1) Fill (i) Cashier who prepared the fill slip (Beginning balance, (+) fills (draws), (+) slips and credit slips shall be in at least and issued the chips, tokens, or cash net write (sold less voids), (¥) payouts triplicate form, and in a continuous, equivalent; (net of IRS withholding), (¥) cashbacks prenumbered series. Such slips shall be (ii) Runner who carried the chips, (paids), (=) cash turn-in). concurrently numbered in a form tokens, or cash equivalents from the (5) An accounting employee shall utilizing the alphabet and only in one cage to the pit; produce a gross revenue recap report to series at a time. The alphabet need not (iii) Dealer or boxperson who received calculate gross revenue for each day’s be used if the numerical series is not the chips, tokens, or cash equivalents at play and for a month-to-date basis, repeated during the business year. the gaming table; and including the following totals: (2) Unissued and issued fill/credit (iv) Pit supervisory personnel who (i) Commission; slips shall be safeguarded and adequate supervised the fill transaction. (ii) Positive breakage; procedures shall be employed in their (10) Fills shall be broken down and (iii) Negative breakage; distribution, use, and control. Personnel verified by the dealer or boxperson in (iv) Track/event fees; from the cashier or pit departments public view before the dealer or (v) Track/event fee rebates; and shall have no access to the secured boxperson places the fill in the table (vi) Purged tickets. (control) copies of the fill/credit slips. tray.
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(11) A copy of the fill slip shall then (20) Cross fills (the transfer of chips regulatory authority, shall establish and be deposited into the drop box on the between table games) and even cash the gaming operation shall comply with table by the dealer, where it shall appear exchanges are prohibited in the pit. a reasonable time period, which shall in the soft count room with the cash (d) Table inventory forms. (1) At the not exceed seven (7) days, within which receipts for the shift. close of each shift, for those table banks to mark, cancel, or destroy cards and (12) Table credit transactions shall be that were opened during that shift: dice from play. authorized by a pit supervisor before the (i) The table’s chip, token, coin, and (i) This standard shall not apply issuance of credit slips and transfer of marker inventory shall be counted and where playing cards or dice are retained chips, tokens, or other cash equivalent. recorded on a table inventory form; or for an investigation. The credit request shall be (ii) If the table banks are maintained (ii) [Reserved] communicated to the cage where the on an imprest basis, a final fill or credit (4) A card control log shall be credit slip is prepared. shall be made to bring the bank back to maintained that documents when cards (13) At least three parts of each credit par. and dice are received on site, slip shall be utilized as follows: (2) If final fills are not made, distributed to and returned from tables (i) Two parts of the credit slip shall beginning and ending inventories shall and removed from play by the gaming be transported by the runner to the pit. be recorded on the master game sheet operation. After signatures of the runner, dealer, for shift win calculation purposes. (g) Plastic cards. Notwithstanding and pit supervisor are obtained, one (3) The accuracy of inventory forms paragraph (f) of this section, if a gaming copy shall be deposited in the table prepared at shift end shall be verified by operation uses plastic cards (not plastic- game drop box and the original shall the outgoing pit supervisor and the coated cards), the cards may be used for accompany transport of the chips, dealer. Alternatively, if the dealer is not up to three (3) months if the plastic tokens, markers, or cash equivalents available, such verification may be cards are routinely inspected, and from the pit to the cage for verification provided by another pit supervisor or washed or cleaned in a manner and time and signature of the cashier. another supervisor from another gaming frame approved by the Tribal gaming (ii) For computer systems, one part department. Verifications shall be regulatory authority. shall be retained in a secure manner to evidenced by signature on the inventory (h) Standards for supervision. Pit insure that only authorized persons may form. supervisory personnel (with authority gain access to it. For manual systems, (4) If inventory forms are placed in equal to or greater than those being one part shall be retained in a secure the drop box, such action shall be supervised) shall provide supervision of manner in a continuous unbroken form. performed by a person other than a pit all table games. (14) The table number, shift, and the supervisor. (i) Analysis of table game (e) Table games computer generated amount of credit by denomination and performance standards. (1) Records documentation standards. (1) The in total shall be noted on all copies of shall be maintained by day and shift computer system shall be capable of the credit slip. The correct date and indicating any single-deck blackjack generating adequate documentation of time shall be indicated on at least two games that were dealt for an entire shift. all information recorded on the source copies. (2) Records reflecting hold percentage (15) Chips, tokens, and/or cash documents and transaction detail (e.g., by table and type of game shall be equivalents shall be removed from the fill/credit slips, markers, etc.). maintained by shift, by day, cumulative table tray by the dealer or boxperson (2) This documentation shall be month-to-date, and cumulative year-to- and shall be broken down and verified restricted to authorized personnel. date. by the dealer or boxperson in public (3) The documentation shall include, (3) This information shall be view prior to placing them in racks for at a minimum: presented to and reviewed by transfer to the cage. (i) System exception information (e.g., (16) All chips, tokens, and cash appropriate system parameter management independent of the pit equivalents removed from the tables and information, corrections, voids, etc.); department on at least a monthly basis. markers removed from the pit shall be and (4) The management in paragraph carried to the cashier’s cage by a person (ii) Personnel access listing, which (h)(3) of this section shall investigate who is independent of the cage or pit. includes, at a minimum: any unusual fluctuations in hold (17) The credit slip shall be signed by (A) Employee name or employee percentage with pit supervisory at least the following persons (as an identification number (if applicable); personnel. indication that each has counted or, in and (5) The results of such investigations the case of markers, reviewed the items (B) Listing of functions employees can shall be documented, maintained for transferred): perform or equivalent means of inspection, and provided to the Tribal (i) Cashier who received the items identifying the same. gaming regulatory authority upon transferred from the pit and prepared (f) Standards for playing cards and request. the credit slip; dice. (1) Playing cards and dice shall be (j) Accounting/auditing standards. (1) (ii) Runner who carried the items maintained in a secure location to The accounting and auditing procedures transferred from the pit to the cage; prevent unauthorized access and to shall be performed by personnel who (iii) Dealer who had custody of the reduce the possibility of tampering. are independent of the transactions items prior to transfer to the cage; and (2) Used cards and dice shall be being audited/accounted for. (iv) Pit supervisory personnel who maintained in a secure location until (2) If a table game has the capability supervised the credit transaction. marked, scored, or destroyed, in a to determine drop (e.g., bill-in/coin- (18) The credit slip shall be inserted manner as approved by the Tribal drop meters, bill acceptor, computerized in the drop box by the dealer. gaming regulatory authority, to prevent record, etc.) the dollar amount of the (19) Chips, tokens, or other cash unauthorized access and reduce the drop shall be reconciled to the actual equivalents shall be deposited on or possibility of tampering. drop by shift. removed from gaming tables only when (3) The Tribal gaming regulatory (3) Accounting/auditing employees accompanied by the appropriate fill/ authority, or the gaming operation as shall review exception reports for all credit or marker transfer forms. approved by the Tribal gaming computerized table games systems at
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least monthly for propriety of (vii) When marker documentation pit, it shall also include the table transactions and unusual occurrences. (e.g., issue slip and payment slip) is number where paid, date and time of (4) All noted improper transactions or inserted in the drop box, such action payment, nature of settlement (cash, unusual occurrences shall be shall be performed by the dealer or chips, etc.), and amount of payment. investigated with the results boxperson at the table. The payment slip shall also include the documented. (viii) A record shall be maintained signature of pit supervisory personnel (5) Evidence of table games auditing that details the following (e.g., master acknowledging payment, and the procedures and any follow-up credit record retained at the pit signature or initials of the dealer or performed shall be documented, podium): boxperson receiving payment, unless maintained for inspection, and provided (A) The signature or initials of the this information is included on another to the Tribal gaming regulatory person(s) approving the extension of document verifying the payment of the authority upon request. credit (unless such information is marker. (6) A daily recap shall be prepared for contained elsewhere for each issuance); (xvi) When partial payments are made the day and month-to-date, which shall (B) The legible name of the person in the pit, a new marker shall be include the following information: receiving the credit; completed reflecting the remaining (i) Drop; (C) The date and shift of granting the balance and the marker number of the (ii) Win; and credit; marker originally issued. (iii) Gross revenue. (D) The table on which the credit was (xvii) When partial payments are (k) Marker credit play. (1) If a gaming extended; made in the pit, the payment slip of the operation allows marker credit play (E) The amount of credit issued; marker that was originally issued shall (exclusive of rim credit and call bets), (F) The marker number; be properly cross-referenced to the new the following standards shall apply: (G) The amount of credit remaining marker number, completed with all (i) A marker system shall allow for after each issuance or the total credit information required by paragraph credit to be both issued and repaid in available for all issuances; (j)(1)(xv) of this section, and inserted the pit. (H) The amount of payment received into the drop box. (ii) Prior to the issuance of gaming and nature of settlement (e.g., credit slip (xviii) The cashier’s cage or another credit to a player, the employee number, cash, chips, etc.); and independent source shall be notified extending the credit shall contact the (I) The signature or initials of the when payments (full or partial) are cashier or other independent source to person receiving payment/settlement. made in the pit so that cage records can determine if the player’s credit limit has (ix) The forms required in paragraphs be updated for such transactions. been properly established and there is (j)(1)(v), (vi), and (viii) of this section Notification shall be made no later than sufficient remaining credit available for shall be safeguarded, and adequate when the customer’s play is completed the advance. procedures shall be employed to control or at shift end, whichever is earlier. (iii) Proper authorization of credit the distribution, use, and access to these (xix) All portions of markers, both extension in excess of the previously forms. established limit shall be documented. (x) All credit extensions shall be issued and unissued, shall be (iv) The amount of credit extended initially evidenced by lammer buttons, safeguarded and procedures shall be shall be communicated to the cage or which shall be displayed on the table in employed to control the distribution, another independent source and the public view and placed there by use and access to the forms. amount documented within a supervisory personnel. (xx) An investigation shall be reasonable time subsequent to each (xi) Marker preparation shall be performed to determine the cause and issuance. initiated and other records updated responsibility for loss whenever marker (v) The marker form shall be prepared within approximately one hand of play forms, or any part thereof, are missing. in at least triplicate form (triplicate form following the initial issuance of credit to These investigations shall be being defined as three parts performing the player. documented, maintained for inspection, the functions delineated in the standard (xii) Lammer buttons shall be and provided to the Tribal gaming in paragraph (j)(1)(vi) of this section), removed only by the dealer or regulatory authority upon request. with a preprinted or concurrently- boxperson employed at the table upon (xxi) When markers are transferred to printed marker number, and utilized in completion of a marker transaction. the cage, marker transfer forms or numerical sequence. (This requirement (xiii) The original marker shall contain marker credit slips (or similar shall not preclude the distribution of at least the following information: documentation) shall be utilized and batches of markers to various pits.) (A) Marker number; such documents shall include, at a (vi) At least three parts of each (B) Player’s name and signature; minimum, the date, time, shift, marker separately numbered marker form shall (C) Date; and number(s), table number(s), amount of be utilized as follows: (D) Amount of credit issued. each marker, the total amount (A) Original shall be maintained in (xiv) The issue slip or stub shall transferred, signature of pit supervisory the pit until settled or transferred to the include the same marker number as the personnel releasing instruments from cage; original, the table number, date and the pit, and the signature of cashier (B) Payment slip shall be maintained time of issuance, and amount of credit verifying receipt of instruments at the in the pit until the marker is settled or issued. The issue slip or stub shall also cage. transferred to the cage. If paid in the pit, include the signature of the person (xxii) All markers shall be transferred the slip shall be inserted in the table extending the credit, and the signature to the cage within twenty-four (24) game drop box. If not paid in the pit, the or initials of the dealer or boxperson at hours of issuance. slip shall be transferred to the cage with the applicable table, unless this (xxiii) Markers shall be transported to the original; information is included on another the cashier’s cage by a person who is (C) Issue slip shall be inserted into the document verifying the issued marker. independent of the marker issuance and appropriate table game drop box when (xv) The payment slip shall include payment functions (pit clerks may credit is extended or when the player the same marker number as the original. perform this function). has signed the original. When the marker is paid in full in the (2) [Reserved]
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(l) Name credit instruments accepted beyond one hand of play shall be § 542.13 What are the minimum internal in the pit. (1) For the purposes of this prohibited; and control standards for gaming machines? paragraph, name credit instruments (iv) The removal of the lammer (a) Standards for gaming machines. means personal checks, payroll checks, button, chips, or other identifiable (1) For this section only, credit or counter checks, hold checks, traveler’s designation shall be performed by the customer credit means a unit of value checks, or other similar instruments that dealer/ boxperson upon completion of equivalent to cash or cash equivalents are accepted in the pit as a form of the call bet transaction. deposited, wagered, won, lost, or credit issuance to a player with an (2) [Reserved] redeemed by a customer. approved credit limit. (n) Rim credit. (1) The following (2) Coins shall include tokens. (2) The following standards shall standards shall apply if rim credit is (3) For all computerized gaming apply if name credit instruments are extended in the pit: machine systems, a personnel access accepted in the pit: (i) Rim credit shall be evidenced by listing shall be maintained, which (i) A name credit system shall allow the issuance of chips to be placed in a includes at a minimum: for the issuance of credit without using neutral zone on the table and then (i) Employee name or employee markers; extended to the customer for the identification number (or equivalent); (ii) Prior to accepting a name credit customer to wager, or to the dealer to and instrument, the employee extending the wager for the customer, and by the (ii) Listing of functions employee can credit shall contact the cashier or placement of a lammer button or other perform or equivalent means of another independent source to identifiable designation in an amount identifying same. determine if the player’s credit limit has equal to that of the chips extended; and (b) Computer applications. For any been properly established and the (ii) Rim credit shall be recorded on computer applications utilized, remaining credit available is sufficient player cards, or similarly used alternate documentation and/or for the advance; documents, which shall be: procedures that provide at least the (iii) All name credit instruments shall (A) Prenumbered or concurrently level of control described by the be transferred to the cashier’s cage numbered and accounted for by a standards in this section, as approved (utilizing a two-part order for credit) department independent of the pit; by the Tribal gaming regulatory immediately following the acceptance of (B) For all extensions and subsequent authority, will be acceptable. (c) Standards for drop and count. The the instrument and issuance of chips (if repayments, evidenced by the initials or procedures for the collection of the name credit instruments are transported signatures of a supervisor and the dealer gaming machine drop and the count accompanied by a credit slip, an order attesting to the validity of each credit thereof shall comply with § 542.21, for credit is not required); extension and repayment; (C) An indication of the settlement § 542.31, or § 542.41 (as applicable). (iv) The order for credit (if applicable) method (e.g., serial number of marker (d) Jackpot payouts, gaming machines and the credit slip shall include the issued, chips, cash); fills, short pays and accumulated credit customer’s name, amount of the credit (D) Settled no later than when the payouts standards. (1) For jackpot instrument, the date, time, shift, table customer leaves the table at which the payouts and gaming machine fills, number, signature of pit supervisory card is prepared; documentation shall include the personnel releasing instrument from pit, (E) Transferred to the accounting following information: and the signature of the cashier department on a daily basis; and (i) Date and time; verifying receipt of instrument at the (F) Reconciled with other forms (ii) Machine number; cage; utilized to control the issuance of pit (iii) Dollar amount of cash payout or (v) The procedures for transacting credit (e.g., master credit records, table gaming machine fill (both alpha and table credits at standards in paragraphs cards). numeric) or description of personal (c)(12) through (19) of this section shall (2) [Reserved] property awarded, including fair market be strictly adhered to; and (o) Foreign currency. (l) The following value. Alpha is optional if another (vi) The acceptance of payments in standards shall apply if foreign currency unalterable method is used for the pit for name credit instruments shall is accepted in the pit: evidencing the amount of the payout; be prohibited. (i) Foreign currency transactions shall (iv) Game outcome (including reel (m) Call bets. (1) The following be authorized by a pit supervisor/ symbols, card values, suits, etc.) for standards shall apply if call bets are boxperson who completes a foreign jackpot payouts. Game outcome is not accepted in the pit: currency exchange form before the required if a computerized jackpot/fill (i) A call bet shall be evidenced by the exchange for chips or tokens; system is used; placement of a lammer button, chips, or (ii) Foreign currency exchange forms (v) Preprinted or concurrently printed other identifiable designation in an include the country of origin, total face sequential number; and amount equal to that of the wager in a value, amount of chips/token extended (vi) Signatures of at least two specific location on the table; (i.e., conversion amount), signature of employees verifying and witnessing the (ii) The placement of the lammer supervisor/boxperson, and the dealer payout or gaming machine fill (except as button, chips, or other identifiable completing the transaction; otherwise provided in paragraphs designation shall be performed by (iii) Foreign currency exchange forms (d)(1)(vi)(A), (B), and (C) of this section). supervisory/boxperson personnel. The and the foreign currency shall be (A) Jackpot payouts over a placement may be performed by a dealer inserted in the drop box by the dealer; predetermined amount shall require the only if the supervisor physically and signature and verification of a observes and gives specific (iv) Alternate procedures specific to supervisory or management employee authorization; the use of foreign valued gaming chips independent of the gaming machine (iii) The call bet shall be settled at the shall be developed by the Tribal gaming department (in addition to the two end of each hand of play by the regulatory authority, or the gaming signatures required in paragraph preparation of a marker, repayment of operation as approved by the Tribal (d)(1)(vi) of this section). Alternatively, the credit extended, or the payoff of the gaming regulatory authority. if an on-line accounting system is winning wager. Call bets extending (2) [Reserved] utilized, only two signatures are
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required: one employee and one booths and change banks that are active section shall include the following supervisory or management employee during the shift, shall be counted down information: independent of the gaming machine and reconciled each shift utilizing (i) Date; department. This predetermined appropriate accountability (ii) Machine number (source and amount shall be authorized by documentation. destination); management (as approved by the Tribal (2) The wrapping of loose gaming (iii) Manufacturer; gaming regulatory authority), machine booth and cage cashier coin (iv) Program number; documented, and maintained. shall be performed at a time or location (v) Personnel involved; (vi) Reason for duplication; (B) With regard to jackpot payouts that does not interfere with the hard (vii) Disposition of any permanently and hopper fills, the signature of one count/wrap process or the removed EPROM, or other equivalent employee is sufficient if an on-line accountability of that process. game software media; accounting system is utilized and the (3) A record shall be maintained (viii) Seal numbers, if applicable; and jackpot or fill is less than $1,200. evidencing the transfers of wrapped and (ix) Approved testing lab approval (C) On graveyard shifts (eight-hour unwrapped coins and retained for seven numbers, if available. maximum) payouts/fills less than $100 (7) days. (6) EPROMS, or other equivalent game can be made without the payout/fill (g) EPROM control standards. (1) At software media, returned to gaming being witnessed by a second person. least annually, procedures shall be devices shall be labeled with the (2) For short pays of $10.00 or more, performed to insure the integrity of a program number. Supporting and payouts required for accumulated sample of gaming machine game documentation shall include the date, credits, the payout form shall include program EPROMs, or other equivalent program number, information identical the following information: game software media, by personnel to that shown on the manufacturer’s (i) Date and time; independent of the gaming machine label, and initials of the person (ii) Machine number; department or the machines being replacing the EPROM, or other (iii) Dollar amount of payout (both tested. equivalent game software media. alpha and numeric); and (2) The Tribal gaming regulatory (h) Standards for evaluating (iv) The signature of at least one (1) authority, or the gaming operation theoretical and actual hold percentages. employee verifying and witnessing the subject to the approval of the Tribal (1) Accurate and current theoretical payout. gaming regulatory authority, shall hold worksheets shall be maintained for (A) Where the payout amount is $50 develop and implement procedures for each gaming machine. or more, signatures of at least two (2) the following: (2) For those gaming machines or employees verifying and witnessing the (i) Removal of EPROMs, or other groups of identical machines (excluding payout. Alternatively, the signature of equivalent game software media, from multi-game machines) with differences one (1) employee is sufficient if an on- devices, the verification of the existence in theoretical payback percentage line accounting system is utilized and of errors as applicable, and the exceeding a 4% spread between the the payout amount is less than $3,000. correction via duplication from the minimum and maximum theoretical (B) [Reserved] master game program EPROM, or other payback, an employee or department (3) Computerized jackpot/fill systems equivalent game software media; independent from the gaming machine shall be restricted so as to prevent department shall perform a weighted unauthorized access and fraudulent (ii) Copying one gaming device program to another approved program; average calculation to periodically payouts by one person as required by adjust theoretical as follows: § 542.16(a). (iii) Verification of duplicated EPROMs before being offered for play; (i) On a quarterly basis, record the (4) Payout forms shall be controlled meters that contain the number of plays and routed in a manner that precludes (iv) Receipt and destruction of EPROMs, or other equivalent game by wager (i.e., one coin, two coins, etc.); any one person from producing a (ii) On an annual basis, calculate the software media; and fraudulent payout by forging signatures theoretical hold percentage based on the (v) Securing the EPROM, or other or by altering the amount paid out distribution of plays by wager type; subsequent to the payout and equivalent game software media, (iii) On an annual basis, adjust the misappropriating the funds. duplicator, and master game EPROMs, machine(s) theoretical hold percentage (e) Promotional payouts or awards. (1) or other equivalent game software in the gaming machine statistical report If a gaming operation offers promotional media, from unrestricted access. to reflect this revised percentage; and payouts or awards that are not reflected (3) The master game program number, (iv) The adjusted theoretical hold on the gaming machine pay table, then par percentage, and the pay table shall percentage shall be within the spread the payout form/documentation shall be verified to the par sheet when between the minimum and maximum include: initially received from the theoretical payback percentages. (i) Date and time; manufacturer. (3) For those gaming operations that (ii) Machine number and (4) Gaming machines with potential are unable to perform the weighted denomination; jackpots in excess of $100,000 shall average calculation as required by (iii) Dollar amount of payout or have the game software circuit boards paragraph (h)(2) of this section, the description of personal property (e.g., locked or physically sealed. The lock or following procedures shall apply: jacket, toaster, car, etc.), including fair seal shall necessitate the presence of a (i) On at least an annual basis, market value; person independent of the gaming calculate the actual hold percentage for (iv) Type of promotion (e.g., double machine department to access the each aming machine; jackpots, four-of-a-kind bonus, etc.); and device game program EPROM, or other (ii) On at least an annual basis, adjust (v) Signature of at least one employee equivalent game software media. If a the theoretical hold percentage in the authorizing and completing the seal is used to secure the board to the gaming machine statistical report for transaction. frame of the gaming device, it shall be each gaming machine to the previously (2) [Reserved] pre-numbered. calculated actual hold percentage; and (f) Gaming machine department funds (5) Records that document the (iii) The adjusted theoretical hold standards. (1) The gaming machine procedures in paragraph (g)(2)(i) of this percentage shall be within the spread
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between the minimum and maximum randomly verified quarterly for all randomly verified on a monthly basis by theoretical payback percentages. gaming machines and bill acceptors by employees independent of the gaming (4) For multi-game machines with a a person other than the regular in-meter machine department. four percent (4%) or greater spread reader. (21) Updates to the on-line gaming between minimum and maximum (13) Upon receipt of the meter reading machine monitoring system to reflect theoretical payback percentages, an summary, the accounting department additions, deletions, or movements of employee or department independent of shall review all meter readings for gaming machines shall be made at least the gaming machine department shall: reasonableness using pre-established weekly prior to in-meter readings and (i) Weekly, record the total coin-in parameters. the weigh process. (14) Prior to final preparation of meter; (i) Gaming machine hopper contents (ii) Quarterly, record the coin-in statistical reports, meter readings that standards. (1) When machines are meters for each game contained in the do not appear reasonable shall be temporarily removed from the floor, machine; and reviewed with gaming machine (iii) On an annual basis, adjust the department employees or other gaming machine drop and hopper theoretical hold percentage in the appropriate designees, and exceptions contents shall be protected to preclude gaming machine statistical report to a documented, so that meters can be the misappropriation of stored funds. weighted average based upon the ratio repaired or clerical errors in the (2) When machines are permanently of coin-in for each game. recording of meter readings can be removed from the floor, the gaming (5) The adjusted theoretical hold corrected. machine drop and hopper contents shall percentage for multi-game machines (15) A report shall be produced at be counted and recorded by at least two may be combined for machines with least monthly showing month-to-date, employees with appropriate exactly the same game mix throughout year-to-date (previous twelve (12) documentation being routed to the the year. months data preferred), and if accounting department for proper (6) The theoretical hold percentages practicable, life-to-date actual hold recording and accounting for initial used in the gaming machine analysis percentage computations for individual hopper loads. reports should be within the machines and a comparison to each (j) Player tracking system. (1) The performance standards set by the machine’s theoretical hold percentage following standards apply if a player manufacturer. previously discussed. tracking system is utilized: (7) Records shall be maintained for (16) Each change to a gaming (i) The player tracking system shall be each machine indicating the dates and machine’s theoretical hold percentage, secured so as to prevent unauthorized type of changes made and the including progressive percentage access (e.g., changing passwords at least recalculation of theoretical hold as a contributions, shall result in that quarterly and physical access to result of the changes. machine being treated as a new machine computer hardware, etc.). (8) Records shall be maintained for in the statistical reports (i.e., not (ii) The addition of points to each machine that indicate the date the commingling various hold percentages), members’ accounts other than through machine was placed into service, the except for adjustments made in actual gaming machine play shall be date the machine was removed from accordance with paragraph (h)(2) of this sufficiently documented (including operation, the date the machine was section. substantiation of reasons for increases) placed back into operation, and any (17) If promotional payouts or awards and shall be authorized by a department changes in machine numbers and are included on the gaming machine independent of the player tracking and designations. statistical reports, it shall be in a gaming machines. Alternatively, (9) All of the gaming machines shall manner that prevents distorting the addition of points to members’ accounts contain functioning meters that shall actual hold percentages of the affected may be authorized by gaming machine record coin-in or credit-in, or on-line machines. supervisory employees if sufficient gaming machine monitoring system that (18) The statistical reports shall be documentation is generated and it is captures similar data. reviewed by both gaming machine randomly verified by employees (10) All gaming machines with bill department management and independent of the gaming machine acceptors shall contain functioning bill- management employees independent of department on a quarterly basis. in meters that record the dollar amounts the gaming machine department on at or number of bills accepted by least a monthly basis. (iii) Booth employees who redeem denomination. (19) For those machines in play for points for members shall be allowed to (11) Gaming machine in-meter more than six (6) months, large receive lost players club cards, provided readings shall be recorded at least variances (three percent (3%) that they are immediately deposited into weekly (monthly for Tier A and Tier B recommended) between theoretical hold a secured container for retrieval by gaming operations) immediately prior to and actual hold shall be investigated independent personnel. or subsequent to a gaming machine and resolved by a department (iv) Changes to the player tracking drop. On-line gaming machine independent of the gaming machine system parameters, such as point monitoring systems can satisfy this department with the findings structures and employee access, shall be requirement. However, the time documented and provided to the Tribal performed by supervisory employees between readings may extend beyond gaming regulatory authority upon independent of the gaming machine one week in order for a reading to request in a timely manner. department. Alternatively, changes to coincide with the end of an accounting (20) Maintenance of the on-line player tracking system parameters may period only if such extension is for no gaming machine monitoring system data be performed by gaming machine longer than six (6) days. files shall be performed by a department supervisory employees if sufficient (12) The employee who records the independent of the gaming machine documentation is generated and it is in-meter reading shall either be department. Alternatively, maintenance randomly verified by supervisory independent of the hard count team or may be performed by gaming machine employees independent of the gaming shall be assigned on a rotating basis, supervisory employees if sufficient machine department on a monthly unless the in-meter readings are documentation is generated and it is basis.
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(v) All other changes to the player required in paragraph (1)(3) of this (10) All gaming machine auditing tracking system shall be appropriately section shall be generated and retained. procedures and any follow-up documented. (m) Accounting/auditing standards. performed shall be documented, (2) [Reserved] (1) Gaming machine accounting/ maintained for inspection, and provided (k) In-house progressive gaming auditing procedures shall be performed to the Tribal gaming regulatory machine standards. (1) A meter that by employees who are independent of authority upon request. shows the amount of the progressive the transactions being reviewed. (n) Cash-out tickets. For gaming jackpot shall be conspicuously (2) For on-line gaming machine machines that utilize cash-out tickets, displayed at or near the machines to monitoring systems, procedures shall be the following standards apply. This which the jackpot applies. performed at least monthly to verify that standard is not applicable to Tiers A (2) At least once each day, each the system is transmitting and receiving and B. Tier A and B gaming operations gaming operation shall record the data from the gaming machines properly shall develop adequate standards amount shown on each progressive and to verify the continuing accuracy of governing the security over the issuance jackpot meter at the gaming operation the coin-in meter readings as recorded of the cash-out paper to the gaming except for those jackpots that can be in the gaming machine statistical report. machines and the redemption of cash- paid directly from the machine’s (3) For weigh scale and currency out slips. hopper; interface systems, for at least one drop (1) In addition to the applicable (3) Explanations for meter reading period per month accounting/auditing auditing and accounting standards in decreases shall be maintained with the employees shall make such comparisons paragraph (m) of this section, on a progressive meter reading sheets, and as necessary to the system generated quarterly basis, the gaming operation where the payment of a jackpot is the count as recorded in the gaming shall foot all jackpot cash-out tickets explanation for a decrease, the gaming machine statistical report. Discrepancies equal to or greater than $1,200 and trace operation shall record the jackpot shall be resolved prior to generation/ totals to those produced by the host payout number on the sheet or have the distribution of gaming machine reports. validation computer system. number reasonably available; and (4) For each drop period, accounting/ (2) The customer may request a cash- (4) Each gaming operation shall auditing personnel shall compare the out ticket from the gaming machine that record the base amount of each coin-to-drop meter reading to the actual reflects all remaining credits. The cash- progressive jackpot the gaming drop amount. Discrepancies should be out ticket shall be printed at the gaming operation offers. resolved prior to generation/distribution machine by an internal document (5) The Tribal gaming regulatory of on-line gaming machine monitoring printer. The cash-out ticket shall be authority shall approve procedures system statistical reports. valid for a time period specified by the specific to the transfer of progressive (5) Follow-up shall be performed for Tribal gaming regulatory authority, or amounts in excess of the base amount to any one machine having an unresolved the gaming operation as approved by the other gaming machines. Such variance between actual coin drop and Tribal gaming regulatory authority. procedures may also include other coin-to-drop meter reading in excess of Cash-out tickets may be redeemed for methods of distribution that accrue to three percent (3%) and over $25.00. The payment or inserted in another gaming the benefit of the gaming public via an follow-up performed and results of the machine and wagered, if applicable, award or prize. investigation shall be documented, during the specified time period. (l) Wide area progressive gaming (3) The customer shall redeem the maintained for inspection, and provided machine standards. (1) A meter that cash-out ticket at a change booth or to the Tribal gaming regulatory shows the amount of the progressive cashiers’ cage. Alternatively, if a gaming authority upon request. jackpot shall be conspicuously operation utilizes a remote computer (6) At least weekly, accounting/ displayed at or near the machines to validation system, the Tribal gaming auditing employees shall compare the which the jackpot applies. regulatory authority, or the gaming bill-in meter reading to the total bill (2) As applicable to participating operation as approved by the Tribal acceptor drop amount for the week. gaming operations, the wide area gaming regulatory authority, shall Discrepancies shall be resolved before progressive gaming machine system develop alternate standards for the the generation/distribution of gaming shall be adequately restricted to prevent maximum amount that can be machine statistical reports. unauthorized access (e.g., changing redeemed, which shall not exceed passwords at least quarterly, restrict (7) Follow-up shall be performed for $2,999.99 per cash-out transaction. access to EPROMs or other equivalent any one machine having an unresolved (4) Upon presentation of the cash-out game software media, and restrict variance between actual currency drop ticket(s) for redemption, the following physical access to computer hardware, and bill-in meter reading in excess of shall occur: etc.). $200.00. The follow-up performed and (i) Scan the bar code via an optical (3) The Tribal gaming regulatory results of the investigation shall be reader or its equivalent; or authority shall approve procedures for documented, maintained for inspection, (ii) Input the cash-out ticket the wide area progressive system that: and provided to the Tribal gaming validation number into the computer. (i) Reconcile meters and jackpot regulatory authority upon request. (5) The information contained in payouts; (8) At least annually, accounting/ paragraph (n)(4) of this section shall be (ii) Collect/drop gaming machine auditing personnel shall randomly communicated to the host computer. funds; verify that EPROM or other equivalent The host computer shall verify the (iii) Verify jackpot, payment, and game software media changes are authenticity of the cash-out ticket and billing to gaming operations on pro-rata properly reflected in the gaming communicate directly to the redeemer of basis; machine analysis reports. the cash-out ticket. (iv) System maintenance; (9) Accounting/auditing employees (6) If valid, the cashier (redeemer of (v) System accuracy; and shall review exception reports for all the cash-out ticket) pays the customer (vi) System security. computerized gaming machine systems the appropriate amount and the cash- (4) Reports, where applicable, on a daily basis for propriety of out ticket is electronically noted ‘‘paid’’ adequately documenting the procedures transactions and unusual occurrences. in the system. The ‘‘paid’’ cash-out
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ticket shall remain in the cashiers’’ bank (ii) A network of contiguous player (5) Deposit of credits standards. (i) for reconciliation purposes. The host terminals with touch-screen or button- The cashier shall sign-on with a unique validation computer system shall controlled video monitors connected to password to a cashier terminal equipped electronically reconcile the cashier’s an electronic selection device and the with peripherals required to complete banks for the paid cashed-out tickets. central computer via a communications the credit transactions. Passwords are (7) If invalid, the host computer shall network; issued and can only be changed by notify the cashier (redeemer of the cash- (iii) One or more electronic selection information technology personnel at the out ticket). The cashier (redeemer of the devices, utilizing random number discretion of the department director. cash-out ticket) shall refuse payment to generators, each of which selects any (ii) The customer shall present cash, the customer and notify a supervisor of combination or combinations of chips, coin or coupons along with their the invalid condition. The supervisor numbers, colors, and/or symbols for a account access card to a cashier to shall resolve the dispute. network of player terminals. deposit credits. (8) If the host validation computer (2) Player terminals standards. (i) The (iii) The cashier shall complete the system temporarily goes down, cashiers player terminals are connected to a transaction by utilizing a card scanner may redeem cash-out tickets at a change game server; that the cashier shall slide the booth or cashier’s cage after recording (ii) The game server shall generate customer’s account access card through. the following: and transmit to the bank of player (iv) The cashier shall accept the funds (i) Serial number of the cash-out terminals a set of random numbers, from the customer and enter the ticket; colors, and/or symbols at regular appropriate amount on the cashier (ii) Date and time; intervals. The subsequent game results terminal. (iii) Dollar amount; are determined at the player terminal (v) A multi-part deposit slip shall be (iv) Issuing gaming machine number; and the resulting information is generated by the point of sale receipt (v) Marking ticket ‘‘paid’’; and transmitted to the account server; printer. The cashier shall direct the (vi) Ticket shall remain in cashier’s (iii) The game server shall be housed customer to sign the deposit slip receipt. bank for reconciliation purposes. in a game server room or a secure locked (9) Cash-out tickets shall be validated One copy of the deposit slip shall be cabinet. given to the customer. The other copy as expeditiously as possible when the (3) Customer account maintenance host validation computer system is of the deposit slip shall be secured in standards. (i) A central computer acting the cashier’s cash drawer. restored. as an account server shall provide (10) The Tribal gaming regulatory (vi) The cashier shall verify the customer account maintenance and the authority, or the gaming operation as customer’s balance before completing deposit/withdrawal function of those approved by the Tribal gaming the transaction. The cashier shall secure account balances; regulatory authority, shall establish and the funds in their cash drawer and (ii) Customers may access their return the account access card to the the gaming operation shall comply with accounts on the computer system by procedures to control cash-out ticket customer. means of an account access card at the (vii) Alternatively, if a kiosk is paper, which shall include procedures player terminal. Each player terminal utilized to accept a deposit of credits, that: may be equipped with a card reader and (i) Mitigate the risk of counterfeiting the Tribal gaming regulatory authority, personal identification number (PIN) of cash-out ticket paper; or the gaming operation as approved by (ii) Adequately control the inventory pad or touch screen array for this the Tribal gaming regulatory authority, of the cash-out ticket paper; and purpose; shall establish and the gaming operation (iii) Provide for the destruction of all (iii) All communications between the shall comply with procedures that unused cash-out ticket paper. player terminal, or bank of player safeguard the integrity of the kiosk (iv) Alternatively, if the gaming terminals, and the account server shall system. operation utilizes a computer validation be encrypted for security reasons. (6) Prize standards. (i) Winners at the system, this standard shall not apply. (4) Customer account generation gaming machines may receive cash, (11) If the host validation computer standards. (i) A computer file for each prizes redeemable for cash or system is down for more than four (4) customer shall be prepared by a clerk, merchandise. hours, the gaming operation shall with no incompatible functions, prior to (ii) If merchandise prizes are to be promptly notify the Tribal gaming the customer being issued an account awarded, the specific type of prize or regulatory authority or its designated access card to be utilized for machine prizes that may be won shall be representative. play. The customer may select his/her disclosed to the player before the game (12) These gaming machine systems PIN to be used in conjunction with the begins. shall comply with all other standards account access card. (iii) The redemption period of account (as applicable) in this part including: (ii) The clerk shall sign-on with a access cards, as approved by the Tribal (i) Standards for bill acceptor drop unique password to a terminal equipped gaming regulatory authority, shall be and count; with peripherals required to establish a conspicuously posted in the gaming (ii) Standards for coin drop and count; customer account. Passwords are issued operation. and and can only be changed by information (7) Credit withdrawal. The customer (iii) Standards concerning EPROMS or technology personnel at the discretion shall present their account access card other equivalent game software media. of the department director. to a cashier to withdraw their credits. (o) Account access cards. For gaming (iii) After entering a specified number The cashier shall perform the following: machines that utilize account access of incorrect PIN entries at the cage or (i) Scan the account access card; cards to activate play of the machine, player terminal, the customer shall be (ii) Request the customer to enter their the following standards shall apply: directed to proceed to the Gaming PIN, if the PIN was selected by the (1) Equipment. (i) A central computer, Machine Information Center to obtain a customer; with supporting hardware and software, new PIN. If a customer forgets, (iii) The cashier shall ascertain the to coordinate network activities, provide misplaces or requests a change to their amount the customer wishes to system interface, and store and manage PIN, the customer shall proceed to the withdraw and enter the amount into the a player/account database; Gaming Machine Information Center. computer;
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(iv) A multi-part withdrawal slip shall operation after deposit, re-deposit, and (5) All customer deposits and be generated by the point of sale receipt write-off authorization. withdrawal transactions at the cage printer. The cashier shall direct the (3) When counter checks are issued, shall be recorded on a cage customer to sign the withdrawal slip; the following shall be included on the accountability form on a per-shift basis. (v) The cashier shall verify that the check: (6) Only cash, cash equivalents, chips, account access card and the customer (i) The customer’s name and and tokens shall be accepted from match by: signature; customers for the purpose of a customer (A) Comparing the customer to image (ii) The dollar amount of the counter deposit. on the computer screen; check (both alpha and numeric); (7) The Tribal gaming regulatory (B) Comparing the customer to image (iii) Customer’s bank name and bank authority, or the gaming operation as on customer’s picture ID; or account number; approved by the Tribal gaming (C) Comparing the customer signature (iv) Date of issuance; and regulatory authority, shall establish and on the withdrawal slip to signature on (v) Signature or initials of the person the gaming operation shall comply with the computer screen. approving the counter check procedures that verify the customer’s (vi) The cashier shall verify the transaction. identity, including photo identification. customer’s balance before completing (4) When traveler’s checks or other (8) A file for customers shall be the transaction. The cashier shall pay guaranteed drafts such as cashier’s prepared prior to acceptance of a the customer the appropriate amount, checks are presented, the cashier shall deposit. issue the customer the original comply with the examination and (d) Cage and vault accountability withdrawal slip and return the account documentation procedures as required standards. (1) All transactions that flow access card to the customer; by the issuer. through the cage shall be summarized (vii) The copy of the withdrawal slip (c) Customer deposited funds. If a on a cage accountability form on a per shall be placed in the cash drawer. All gaming operation permits a customer to shift basis and shall be supported by account transactions shall be accurately deposit funds with the gaming operation documentation. tracked by the account server computer at the cage, the following standards (2) The cage and vault (including coin system. The copy of the withdrawal slip shall apply. room) inventories shall be counted by (1) The receipt or withdrawal of a shall be forwarded to the accounting the oncoming and outgoing cashiers. customer deposit shall be evidenced by department at the end of the gaming These employees shall make individual at least a two-part document with one day; and counts for comparison of accuracy and copy going to the customer and one (viii) In the event the imaging maintenance of individual copy remaining in the cage file. function is temporarily disabled, accountability. Such counts shall be (2) The multi-part receipt shall customers shall be required to provide recorded at the end of each shift during contain the following information: positive ID for cash withdrawal which activity took place. All (i) Same receipt number on all copies; transactions at the cashier stations. discrepancies shall be noted and (p) Smart cards. All smart cards (i.e., (ii) Customer’s name and signature; investigated. cards that possess the means to (iii) Date of receipt and withdrawal; (3) The gaming operation cash-on- electronically store and retrieve data) (iv) Dollar amount of deposit/ hand shall include, but is not limited to, that maintain the only source of account withdrawal; and the following components: data are prohibited. (v) Nature of deposit (cash, check, chips); however, (i) Currency and coins; § 542.14 What are the minimum internal (vi) Provided all of the information in (ii) House chips, including reserve control standards for the cage? paragraph (c)(2)(i) through (v) is chips; (a) Computer applications. For any available, the only required information (iii) Personal checks, cashier’s checks, computer applications utilized, for all copies of the receipt is the receipt counter checks, and traveler’s checks for alternate documentation and/or number. deposit; procedures that provide at least the (3) The Tribal gaming regulatory (iv) Customer deposits; level of control described by the authority, or the gaming operation as (v) Chips on tables; standards in this section, as approved approved by the Tribal gaming (vi) Hopper loads (coins put into by the Tribal gaming regulatory regulatory authority, shall establish and machines when they are placed in authority, will be acceptable. the gaming operation shall comply with service); and (b) Personal checks, cashier’s checks, procedures that: (vii) Fills and credits (these payroll checks, and counter checks. (1) (i) Maintain a detailed record by documents shall be treated as assets and If personal checks, cashier’s checks, customer name and date of all funds on liabilities, respectively, of the cage payroll checks, or counter checks are deposit; during a business day. When win or loss cashed at the cage, the Tribal gaming (ii) Maintain a current balance of all is recorded at the end of the business regulatory authority, or the gaming customer cash deposits that are in the day, they are removed from the operation as approved by the Tribal cage/vault inventory or accountability; accountability). gaming regulatory authority, shall and (4) The Tribal gaming regulatory establish and the gaming operation shall (iii) Reconcile this current balance authority, or the gaming operation as comply with appropriate controls for with the deposits and withdrawals at approved by the Tribal gaming purposes of security and integrity. least daily. regulatory authority, shall establish and (2) The Tribal gaming regulatory (4) The gaming operation, as approved the gaming operation shall comply with authority, or the gaming operation as by the Tribal gaming regulatory a minimum bankroll formula to ensure approved by the Tribal gaming authority, shall describe the sequence of the gaming operation maintains cash or regulatory authority, shall establish and the required signatures attesting to the cash equivalents (on hand and in the the gaming operation shall comply with accuracy of the information contained bank, if readily accessible) in an amount procedures for the acceptance of on the customer deposit or withdrawal sufficient to satisfy obligations to the personal checks, collecting and form ensuring that the form is signed by gaming operation’s customers as they recording checks returned to the gaming the cashier. are incurred. A suggested bankroll
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formula will be provided by the (b) Credit standards. The following (c) Payment standards. (1) All Commission upon request. standards shall apply if the gaming payments received on outstanding (e) Chip and token standards. The operation authorizes and extends credit credit instruments shall be recorded in Tribal gaming regulatory authority, or to customers: ink or other permanent form of the gaming operation as approved by the (1) At least the following information recordation in the gaming operation’s Tribal gaming regulatory authority, shall shall be recorded for customers that records. establish and the gaming operation shall have credit limits or are issued credit (2) When partial payments are made comply with procedures for the receipt, (excluding personal checks, payroll on credit instruments, they shall be inventory, storage, and destruction of checks, cashier’s checks, and traveler’s evidenced by a multi-part receipt (or gaming chips and tokens. checks): another equivalent document) that (f) Coupon standards. Any program (i) Customer’s name, current address, contains: for the exchange of coupons for chips, and signature; (i) The same preprinted number on all (ii) Identification verifications; tokens, and/or another coupon program copies; (iii) Authorized credit limit; (ii) Customer’s name; shall be approved by the Tribal gaming (iv) Documentation of authorization regulatory authority prior to (iii) Date of payment; by a person designated by management (iv) Dollar amount of payment (or implementation. If approved, the to approve credit limits; and gaming operation shall establish and remaining balance if a new marker is (v) Credit issuances and payments. issued), and nature of settlement (cash, comply with procedures that account (2) Prior to extending credit, the for and control such programs. chips, etc.); customer’s gaming operation credit (v) Signature of employee receiving (g) Accounting/auditing standards. (1) record and/or other documentation shall payment; and The cage accountability shall be be examined to determine the following: (vi) Number of credit instrument on reconciled to the general ledger at least (i) Properly authorized credit limit; which partial payment is being made. (ii) Whether remaining credit is monthly. (3) Unless account balances are sufficient to cover the credit issuance; (2) A trial balance of gaming operation routinely confirmed on a random basis and accounts receivable, including the name by the accounting or internal audit of the customer and current balance, (iii) Identity of the customer (except for known customers). departments, or statements are mailed shall be prepared at least monthly for by a person independent of the credit active, inactive, settled or written-off (3) Credit extensions over a specified dollar amount shall be approved by transactions and collections thereon, accounts. and the department receiving payments (3) The trial balance of gaming personnel designated by management. (4) Proper approval of credit cannot access cash, then the following operation accounts receivable shall be extensions over ten percent (10%) of the standards shall apply: reconciled to the general ledger each previously established limit shall be (i) The routing procedures for month. The reconciliation and any documented. payments by mail require that they be follow-up performed shall be (5) The job functions of credit received by a department independent documented, maintained for inspection, approval (i.e., establishing the of credit instrument custody and and provided to the Tribal gaming customer’s credit worthiness) and credit collection; regulatory authority upon request. extension (i.e., advancing customer’s (ii) Such receipts by mail shall be (4) On a monthly basis an evaluation credit) shall be segregated for credit documented on a listing indicating the of the collection percentage of credit extensions to a single customer of customer’s name, amount of payment, issued to identify unusual trends shall $10,000 or more per day (applies nature of payment (if other than a be performed. whether the credit is extended in the pit check), and date payment received; and (5) All cage and credit accounting or the cage). (iii) The total amount of the listing of procedures and any follow-up (6) If cage credit is extended to a mail receipts shall be reconciled with performed shall be documented, single customer in an amount exceeding the total mail receipts recorded on the maintained for inspection, and provided $2,500, appropriate gaming personnel appropriate accountability form by the to the Tribal gaming regulatory shall be notified on a timely basis of the accounting department on a random authority upon request. customers playing on cage credit, the basis (for at least three (3) days per (h) Extraneous items. The Tribal applicable amount of credit issued, and month). gaming regulatory authority, or the the available balance. (d) Access to credit documentation. gaming operation as approved by the (7) Cage marker forms shall be at least (1) Access to credit documentation shall Tribal gaming regulatory authority, shall two parts (the original marker and a be restricted as follows: establish and the gaming operation shall payment slip), prenumbered by the (i) The credit information shall be comply with procedures to address the printer or concurrently numbered by the restricted to those positions that require transporting of extraneous items, such computerized system, and utilized in access and are so authorized by as coats, purses, and/or boxes, into and numerical sequence. management; out of the cage, coin room, count room, (8) The completed original cage (ii) Outstanding credit instruments and/or vault. marker shall contain at least the shall be restricted to persons authorized following information: by management; and § 542.15 What are the minimum internal (i) Marker number; (iii) Written-off credit instruments control standards for credit? (ii) Player’s name and signature; and shall be further restricted to persons (a) Computer applications. For any (iii) Amount of credit issued (both specified by management. computer applications utilized, alpha and numeric). (2) [Reserved] alternate documentation and/or (9) The completed payment slip shall (e) Maintenance of credit procedures that provide at least the include the same marker number as the documentation. (1) All extensions of level of control described by the original, date and time of payment, cage credit, pit credit transferred to the standards in this section, as approved amount of payment, nature of settlement cage, and subsequent payments shall be by the Tribal gaming regulatory (cash, chips, etc.), and signature of documented on a credit instrument authority, will be acceptable. cashier receiving the payment. control form.
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(2) Records of all correspondence, (ii) Physical security measures shall (iv) Recovery procedures, which are transfers to and from outside agencies, exist over computer, computer tested on a sample basis at least and other documents related to issued terminals, and storage media to prevent annually with documentation of results. credit instruments shall be maintained. unauthorized access and loss of (9) Adequate information technology (f) Write-off and settlement standards. integrity of data and processing. system documentation shall be (1) Written-off or settled credit (iii) Access to systems software and maintained, including descriptions of instruments shall be authorized in application programs shall be limited to hardware and software, operator writing. authorized personnel. manuals, etc. (2) Such authorizations shall be made (iv) Access to computer data shall be (b) Independence of information by at least two management officials limited to authorized personnel. technology personnel. (1) The who are from departments independent (v) Access to computer information technology personnel shall of the credit transaction. communications facilities, or the be independent of the gaming areas (g) Collection agency standards. (1) If computer system, and information (e.g., cage, pit, count rooms, etc.). credit instruments are transferred to transmissions shall be limited to Information technology personnel collection agencies or other collection authorized personnel. procedures and controls should be representatives, a copy of the credit (vi) Standards in paragraph (a)(1) of documented and responsibilities instrument and a receipt from the this section shall apply to each communicated. (2) Information technology personnel collection representative shall be applicable department within the shall be precluded from unauthorized obtained and maintained until the gaming operation. access to: original credit instrument is returned or (2) The main computers (i.e., payment is received. (i) Computers and terminals located hardware, software, and data files) for in gaming areas; (2) A person independent of credit each gaming application (e.g., keno, race transactions and collections shall (ii) Source documents; and and sports, gaming machines, etc.) shall (iii) Live data files (not test data). periodically review the documents in be in a secured area with access (3) Information technology personnel paragraph (g)(1) of this section. restricted to authorized persons, shall be restricted from: (h) Accounting/auditing standards. including vendors. (i) Having unauthorized access to cash (1) A person independent of the cage, (3) Access to computer operations or other liquid assets; and credit, and collection functions shall shall be restricted to authorized (ii) Initiating general or subsidiary perform all of the following at least personnel to reduce the risk of loss of ledger entries. three (3) times per year: integrity of data or processing. (c) Gaming program changes. (1) (i) Ascertain compliance with credit (4) Incompatible duties shall be Program changes for in-house developed limits and other established credit adequately segregated and monitored to systems should be documented as issuance procedures; prevent error in general information follows: (ii) Randomly reconcile outstanding technology procedures to go undetected (i) Requests for new programs or balances of both active and inactive or fraud to be concealed. program changes shall be reviewed by accounts on the accounts receivable (5) Non-information technology the information technology supervisor. listing to individual credit records and personnel shall be precluded from Approvals to begin work on the program physical instruments; having unrestricted access to the shall be documented; (iii) Examine credit records to secured computer areas. (ii) A written plan of implementation determine that appropriate collection (6) The computer systems, including for new and modified programs shall be efforts are being made and payments are application software, shall be secured maintained, and shall include, at a being properly recorded; and through the use of passwords or other minimum, the date the program is to be (iv) For a minimum of five (5) days approved means where applicable. placed into service, the nature of the per month, partial payment receipts Management personnel or persons change, a description of procedures shall be subsequently reconciled to the independent of the department being required in order to bring the new or total payments recorded by the cage for controlled shall assign and control modified program into service the day and shall be numerically access to system functions. (conversion or input of data, installation procedures, etc.), and an indication of accounted for. (7) Passwords shall be controlled as (2) [Reserved] who is to perform all such procedures; follows unless otherwise addressed in (iii) Testing of new and modified the standards in this section. § 542.16 What are the minimum internal programs shall be performed and control standards for information (i) Each user shall have their own documented prior to implementation; technology? individual password; and (a) General controls for gaming (ii) Passwords shall be changed at (iv) A record of the final program or hardware and software. (1) Management least quarterly with changes program changes, including evidence of shall take an active role in making sure documented; and user acceptance, date in service, that physical and logical security (iii) For computer systems that programmer, and reason for changes, measures are implemented, maintained, automatically force a password change shall be documented and maintained. and adhered to by personnel to prevent on a quarterly basis, documentation (2) [Reserved] unauthorized access that could cause shall be maintained listing the systems (d) Security logs. (1) If computer errors or compromise data or processing and the date the user was given access. security logs are generated by the integrity. (8) Adequate backup and recovery system, they shall be reviewed by (i) Management shall ensure that all procedures shall be in place that information technology supervisory new gaming vendor hardware and include: personnel for evidence of: software agreements/contracts contain (i) Frequent backup of data files; (i) Multiple attempts to log-on, or language requiring the vendor to adhere (ii) Backup of all programs; alternatively, the system shall deny user to tribal internal control standards (iii) Secured off-site storage of all access after three attempts to log-on; applicable to the goods and services the backup data files and programs, or other (ii) Unauthorized changes to live data vendor is providing. adequate protection; and files; and
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(iii) Any other unusual transactions. (b) At least monthly, accounting, sixty (60) days to concur with or object (2) This paragraph shall not apply to information technology, or audit to the approval of the variance. personal computers. personnel that cannot grant or receive (2) Any objection raised by the (e) Remote dial-up. (1) If remote dial- complimentary privileges shall prepare Commission shall be in the form of a up to any associated equipment is reports that include the following written explanation based upon the allowed for software support, the information: following criteria: gaming operation shall maintain an (1) Name of customer who received (i) There is no valid explanation of access log that includes: the complimentary service or item; why the gaming operation should have (i) Name of employee authorizing (2) Name(s) of authorized issuer of the received a variance approval from the modem access; complimentary service or item; Tribal gaming regulatory authority on (ii) Name of authorized programmer (3) The actual cash value of the the enumerated standard; or or manufacturer representative; complimentary service or item; (ii) The variance as approved by the (iii) Reason for modem access; (4) The type of complimentary service Tribal gaming regulatory authority does (iv) Description of work performed; or item (i.e., food, beverage, etc.); and not provide a level of control sufficient and (5) Date the complimentary service or to accomplish the purpose of the (v) Date, time, and duration of access. item was issued. standard it is to replace. (2) [Reserved] (3) If the Commission fails to object in (f) Document storage. (1) Documents (c) The report required by paragraph writing within sixty (60) days after the may be scanned or directly stored to an (b) of this section shall not be required date of receipt of a complete unalterable storage medium under the to include complimentary services or submission, the variance shall be following conditions. items below a reasonable amount to be (i) The storage medium shall contain established by the Tribal gaming considered concurred with by the the exact duplicate of the original regulatory authority, or the gaming Commission. (4) The 60-day deadline may be document. operation as approved by the Tribal (ii) All documents stored on the gaming regulatory authority. extended, provided such extension is storage medium shall be maintained (d) The internal audit or accounting mutually agreed upon by the Tribal with a detailed index containing the departments shall review the reports gaming regulatory authority and the gaming operation department and date. required in paragraph (b) of this section Commission. (c) Curing Commission objections. (1) This index shall be available upon at least monthly. These reports shall be Following an objection by the request by the Commission. made available to the Tribe, Tribal (iii) Upon request and adequate notice gaming regulatory authority, audit Commission to the issuance of a by the Commission, hardware (terminal, committee, other entity designated by variance, the Tribal gaming regulatory printer, etc.) shall be made available in the Tribe, and the Commission upon authority shall have the opportunity to order to perform auditing procedures. request. cure any objections noted by the (iv) Controls shall exist to ensure the Commission. § 542.18 How does a gaming operation (2) A Tribal gaming regulatory accurate reproduction of records up to apply for a variance from the standards of and including the printing of stored authority may cure the objections raised this part? by the Commission by: documents used for auditing purposes. (a) Tribal gaming regulatory authority (v) The storage medium shall be (i) Rescinding its initial approval of approval. (1) A Tribal gaming regulatory retained for a minimum of five years. the variance; or (vi) Original documents must be authority may approve a variance for a (ii) Amending its initial approval and retained until the books and records gaming operation if it has determined re-submitting it to the Commission. have been audited by an independent that the variance will achieve a level of (3) Upon any re-submission of a certified public accountant. control sufficient to accomplish the variance approval, the Commission (2) [Reserved] purpose of the standard it is to replace. shall have thirty (30) days to concur (2) For each enumerated standard for with or object to the re-submitted § 542.17 What are the minimum internal which the Tribal gaming regulatory variance. control standards for complimentary authority approves a variance, it shall (4) If the Commission fails to object in services or items? submit to the Commission, within thirty writing within thirty (30) days after the (a) Each Tribal gaming regulatory (30) days, a detailed report, which shall date of receipt of the re-submitted authority or gaming operation shall include the following: variance, the re-submitted variance shall establish and the gaming operation shall (i) A detailed description of the be considered concurred with by the comply with procedures for the variance; Commission. authorization, issuance, and tracking of (ii) An explanation of how the (d) Appeals. (1) Upon receipt of complimentary services and items, variance achieves a level of control objections to a re-submission of a including cash and non-cash gifts. Such sufficient to accomplish the purpose of variance, the Tribal gaming regulatory procedures must be approved by the the standard it is to replace; and authority shall be entitled to an appeal Tribal gaming regulatory authority and (iii) Evidence that the Tribal gaming to the full Commission in accordance shall include, but shall not be limited regulatory authority has approved the with the following process: to, the procedures by which the gaming variance. (i) Within thirty (30) days of receiving operation delegates to its employees the (3) In the event that the Tribal gaming an objection to a re-submission, the authority to approve the issuance of regulatory authority or the Tribe Tribal gaming regulatory authority shall complimentary services and items, and chooses to submit a variance request file its notice of appeal. the procedures by which conditions or directly to the Commission, it may do so (ii) Failure to file an appeal within the limits, if any, which may apply to such without the approval requirement set time provided by this section shall authority are established and modified forth in paragraph (a)(2)(iii) of this result in a waiver of the opportunity for (including limits based on relationships section. an appeal. between the authorizer and recipient), (b) Commission concurrence. (1) (iii) An appeal under this section and shall further include effective Following receipt of the variance shall specify the reasons why the Tribal provisions for audit purposes. approval, the Commission shall have gaming regulatory authority believes the
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Commission’s objections should be document which tables were open (ii) A second count shall be performed reviewed, and shall include supporting during the shift. by an employee on the count team who documentation, if any. (4) The transporting of table game did not perform the initial count. (iv) Within thirty (30) days after drop boxes shall be performed by a (iii) Corrections to information receipt of the appeal, the Commission minimum of two persons, at least one of originally recorded by the count team shall render a decision based upon the whom is independent of the pit shift on soft count documentation shall be criteria contained within paragraph being dropped. made by drawing a single line through (b)(2) of this section unless the (5) All table game drop boxes shall be the error, writing the correct figure appellant elects to provide the posted with a number corresponding to above the original figure, and then Commission additional time, not to a permanent number on the gaming obtaining the initials of at least two exceed an additional thirty (30) days, to table and marked to indicate game, table count team members who verified the render a decision. number, and shift. change, unless the count team only has (v) In the absence of a decision within (c) Soft count room personnel. (1) The two (2) members in which case the the time provided, the Tribal gaming initials of only one (1) verifying member regulatory authority’s re-submission table game soft count and the gaming machine bill acceptor count shall be is required. shall be considered concurred with by (5) If cash counters are utilized and performed by a minimum of two the Commission and become effective. the count room table is used only to employees. (2) [Reserved] empty boxes and sort/stack contents, a (e) Effective date of variance. The (2) Count room personnel shall not be count team member shall be able to gaming operation shall comply with allowed to exit or enter the count room observe the loading and unloading of all standards that achieve a level of control during the count except for emergencies cash at the cash counter, including sufficient to accomplish the purpose of or scheduled breaks. At no time during rejected cash. the standard it is to replace until such the count, shall there be fewer than two (6) Table game drop boxes, when time as the Commission objects to the employees in the count room until the empty, shall be shown to another Tribal gaming regulatory authority’s drop proceeds have been accepted into member of the count team, or to another approval of a variance as provided in cage/vault accountability. person who is observing the count, or to paragraph (b) of this section. (3) Count team members shall be surveillance. rotated on a routine basis such that the (7) Orders for fill/credit (if applicable) § 542.20 What is a Tier A gaming count team is not consistently the same operation? shall be matched to the fill/credit slips. two persons more than four (4) days per Fills and credits shall be traced to or A Tier A gaming operation is one with week. This standard shall not apply to annual gross gaming revenues of more recorded on the count sheet. gaming operations that utilize a count (8) Pit marker issue and payment slips than $1 million but not more than $5 team of more than two persons. (if applicable) removed from the table million. (4) The count team shall be game drop boxes shall either be: § 542.21 What are the minimum internal independent of transactions being (i) Traced to or recorded on the count control standards for drop and count for reviewed and counted. The count team sheet by the count team; or Tier A gaming operations? shall be independent of the cage/vault (ii) Totaled by shift and traced to the (a) Computer applications. For any departments, however, a dealer or a cage totals documented by the computerized computer applications utilized, cashier may be used if this person is not system. Accounting personnel shall alternate documentation and/or allowed to perform the recording verify the issue/payment slip for each procedures that provide at least the function. An accounting representative table is accurate. level of control described by the may be used if there is an independent (9) Foreign currency exchange forms standards in this section, as approved audit of all soft count documentation. (if applicable) removed from the table by the Tribal gaming regulatory (d) Table game soft count standards. game drop boxes shall be reviewed for authority, will be acceptable. (1) The table game soft count shall be the proper daily exchange rate and the (b) Table game drop standards. (1) performed in a soft count room or other conversion amount shall be recomputed The setting out of empty table game equivalently secure area with by the count team. Alternatively, this drop boxes and the drop shall be a comparable controls. may be performed by accounting/ continuous process. (2) Access to the count room during auditing employees. (2) At the end of each shift: the count shall be restricted to members (10) The opening/closing table and (i) All locked table game drop boxes of the drop and count teams, with the marker inventory forms (if applicable) shall be removed from the tables by a exception of authorized observers, shall either be: (i) Examined and traced to or person independent of the pit shift supervisors for resolution of problems, recorded on the count sheet; or being dropped; and authorized maintenance personnel. (ii) A separate drop box shall be (ii) If a computerized system is used, placed on each table opened at any time (3) If counts from various revenue accounting personnel can trace the during each shift or a gaming operation centers occur simultaneously in the opening/closing table and marker may utilize a single drop box with count room, procedures shall be in inventory forms to the count sheet. separate openings and compartments for effect that prevent the commingling of Discrepancies shall be investigated with each shift; and funds from different revenue centers. the findings documented and (iii) Upon removal from the tables, (4) The table game drop boxes shall be maintained for inspection. table game drop boxes shall be individually emptied and counted in (11) The count sheet shall be transported directly to the count room such a manner to prevent the reconciled to the total drop by a count or other equivalently secure area with commingling of funds between boxes team member who shall not function as comparable controls and locked in a until the count of the box has been the sole recorder. secure manner until the count takes recorded. (12) All members of the count team place. (i) The count of each box shall be shall sign the count document or a (3) If drop boxes are not placed on all recorded in ink or other permanent form summary report to attest to their tables, then the pit department shall of recordation. participation in the count.
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(13) All drop proceeds and cash (3) If counts from various revenue (i) Authorized members of the drop equivalents that were counted shall be centers occur simultaneously in the and count teams; and turned over to the cage or vault cashier count room, procedures shall be in (ii) Authorized personnel in an (who shall be independent of the count effect that prevent the commingling of emergency for resolution of a problem. team) or to an authorized person/ funds from different revenue centers. (12) All bill acceptor canisters shall be employee independent of the revenue (4) The bill acceptor canisters shall be posted with a number corresponding to generation and the count process for individually emptied and counted in a permanent number on the gaming verification. Such person shall certify by such a manner to prevent the machine. signature as to the accuracy of the drop commingling of funds between canisters (g) Gaming machine coin drop proceeds delivered and received. until the count of the canister has been standards. (1) A minimum of two (14) The count sheet, with all recorded. employees shall be involved in the supporting documents, shall be (i) The count of each canister shall be removal of the gaming machine drop, at delivered to the accounting department recorded in ink or other permanent form least one of whom is independent of the by a count team member or a person of recordation. gaming machine department. independent of the cashiers department. (ii) A second count shall be performed (2) All drop buckets shall be removed Alternatively, it may be adequately by an employee on the count team who only at the time previously designated secured (e.g., locked container to which did not perform the initial count. by the gaming operation and reported to only accounting personnel can gain (iii) Corrections to information the Tribal gaming regulatory authority, access) until retrieved by the accounting originally recorded by the count team except for emergency drops. department. on soft count documentation shall be (3) Security shall be provided over the (15) Access to stored, full table game made by drawing a single line through buckets removed from the gaming drop boxes shall be restricted to the error, writing the correct figure machine drop cabinets and awaiting authorized members of the drop and above the original figure, and then transport to the count room. count teams. obtaining the initials of at least two (4) As each machine is opened, the (e) Gaming machine bill acceptor count team members who verified the contents shall be tagged with its drop standards. (1) A minimum of two change. respective machine number if the employees shall be involved in the (5) If cash counters are utilized and bucket is not permanently marked with removal of the gaming machine drop, at the count room table is used only to the machine number. The contents shall least one of whom is independent of the empty canisters and sort/stack contents, be transported directly to the area gaming machine department. a count team member shall be able to designated for the counting of such drop (2) All bill acceptor canisters shall be observe the loading and unloading of all proceeds. If more than one trip is removed only at the time previously cash at the cash counter, including required to remove the contents of the designated by the gaming operation and rejected cash. machines, the filled carts of coins shall reported to the Tribal gaming regulatory (6) Canisters, when empty, shall be be securely locked in the room designed authority, except for emergency drops. shown to another member of the count for counting or in another equivalently (3) The bill acceptor canisters shall be team, or to another person who is secure area with comparable controls. removed by a person independent of the observing the count, or to surveillance. There shall be a locked covering on any gaming machine department then (7) The count sheet shall be carts in which the drop route includes transported directly to the count room reconciled to the total drop by a count passage out of doors. or other equivalently secure area with team member who shall not function as (i) Alternatively, a smart bucket comparable controls and locked in a the sole recorder. system that electronically identifies and secure manner until the count takes (8) All members of the count team tracks the gaming machine number, and place. shall sign the count document or a facilitates the proper recognition of (i) Security shall be provided over the summary report to attest to their gaming revenue, shall satisfy the bill acceptor canisters removed from the participation in the count. requirements of this paragraph. gaming machines and awaiting transport (9) All drop proceeds and cash (ii) [Reserved] to the count room. equivalents that were counted shall be (5) Each drop bucket in use shall be: (ii) The transporting of bill acceptor turned over to the cage or vault cashier (i) Housed in a locked compartment canisters shall be performed by a (who shall be independent of the count separate from any other compartment of minimum of two persons, at least one of team) or to an authorized person/ the gaming machine and keyed whom is independent of the gaming employee independent of the revenue differently than other gaming machine machine department. generation and the count process for compartments; and (4) All bill acceptor canisters shall be verification. Such person shall certify by (ii) Identifiable to the gaming machine posted with a number corresponding to signature as to the accuracy of the drop from which it is removed. If the gaming a permanent number on the gaming proceeds delivered and received. machine is identified with a removable machine. (10) The count sheet, with all tag that is placed in the bucket, the tag (f) Gaming machine bill acceptor supporting documents, shall be shall be placed on top of the bucket count standards. (1) The gaming delivered to the accounting department when it is collected. machine bill acceptor count shall be by a count team member or a person (6) Each gaming machine shall have performed in a soft count room or other independent of the cashiers department. drop buckets into which coins or tokens equivalently secure area with Alternatively, it may be adequately that are retained by the gaming machine comparable controls. secured (e.g., locked container to which are collected. Drop bucket contents shall (2) Access to the count room during only accounting personnel can gain not be used to make change or pay the count shall be restricted to members access) until retrieved by the accounting hand-paid payouts. of the drop and count teams, with the department. (7) The collection procedures may exception of authorized observers, (11) Access to stored bill acceptor include procedures for dropping gaming supervisors for resolution of problems, canisters, full or empty, shall be machines that have trays instead of drop and authorized maintenance personnel. restricted to: buckets.
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(h) Hard count room personnel. (1) system, and this camera must be added (5) The following functions shall be The weigh/count shall be performed by in such a way as to eliminate tampering. performed in the counting of the gaming a minimum of two employees. (D) Prior to the drop, the drop/count machine drop: (2) At no time during the weigh/count team shall ensure the scale batteries are (i) Recorder function, which involves shall there be fewer than two employees charged; the recording of the gaming machine in the count room until the drop (E) Prior to the drop, a videotape shall count; and proceeds have been accepted into cage/ be inserted into the VCR used to record (ii) Count team supervisor function, vault accountability. the drop in conjunction with the which involves the control of the (i) If the gaming machine count is security camera system and the VCR gaming machine weigh and wrap conducted with a continuous shall be activated; process. The supervisor shall not (F) The weigh scale test shall be mechanical count meter that is not reset perform the initial recording of the performed prior to removing the unit during the count and is verified in weigh/count unless a weigh scale with from the hard count room for the start writing by at least two employees at the a printer is used. start and end of each denomination of the weigh/drop/count; count, then one employee may perform (G) Surveillance shall be notified (6) The gaming machine drop shall be the wrap. when the weigh/drop/count begins and counted, wrapped, and reconciled in (ii) [Reserved] shall be capable of monitoring the entire such a manner to prevent the (3) Count team members shall be process; commingling of gaming machine drop rotated on a routine basis such that the (H) An observer independent of the coin with coin (for each denomination) count team is not consistently the same weigh/drop/count teams (independent from the next gaming machine drop two persons more than four (4) days per observer) shall remain by the weigh until the count of the gaming machine week. This standard shall not apply to scale at all times and shall observe the drop has been recorded. If the coins are gaming operations that utilize a count entire weigh/drop/count process; not wrapped immediately after being team of more than two persons. (I) Physical custody of the key(s) weighed or counted, they shall be (4) The count team shall be needed to access the laptop and video secured and not commingled with other independent of transactions being compartment shall require the coins. reviewed and counted. The count team involvement of two persons, one of (i) The amount of the gaming machine shall be independent of the cage/vault whom is independent of the drop and drop from each machine shall be departments, unless they are non- count team; recorded in ink or other permanent form supervisory gaming machine employees (J) The mule key (if applicable), the of recordation on a gaming machine and perform the laborer function only laptop and video compartment keys, count document by the recorder or (A non-supervisory gaming machine and the remote control for the VCR shall mechanically printed by the weigh employee is defined as a person below be maintained by a department scale. the level of gaming machine shift independent of the gaming machine (ii) Corrections to information supervisor). A cage cashier may be used department. The appropriate personnel originally recorded by the count team if this person is not allowed to perform shall sign out these keys; on gaming machine count the recording function. An accounting (K) A person independent of the documentation shall be made by representative may be used if there is an weigh/drop/count teams shall be drawing a single line through the error, independent audit of all count required to accompany these keys while writing the correct figure above the documentation. they are checked out, and observe each original figure, and then obtaining the (i) Gaming machine coin count and time the laptop compartment is opened; initials of at least two count team wrap standards. (1) Coins shall include (L) The laptop access panel shall not members who verified the change. tokens. be opened outside the hard count room, (A) If a weigh scale interface is used, (2) The gaming machine coin count except in instances when the laptop corrections to gaming machine count and wrap shall be performed in a count must be rebooted as a result of a crash, data shall be made using either of the room or other equivalently secure area lock up, or other situation requiring following: with comparable controls. immediate corrective action; (1) Drawing a single line through the (i) Alternatively, an on-the-floor drop (M) User access to the system shall be error on the gaming machine document, system utilizing a mobile scale shall limited to those employees required to writing the correct figure above the satisfy the requirements of this have full or limited access to complete original figure, and then obtaining the paragraph, subject to the following the weigh/drop/count; and initials of at least two count team conditions: (N) When the weigh/drop/count is (A) The gaming operation shall utilize completed, the independent observer employees. If this procedure is used, an and maintain an effective on-line shall access the laptop compartment, employee independent of the gaming gaming machine monitoring system, as end the recording session, eject the machine department and count team described in § 542.13(m)(3); videotape, and deliver the videotape to shall enter the correct figure into the (B) Components of the on-the-floor surveillance. computer system prior to the generation drop system shall include, but not be (ii) [Reserved] of related gaming machine reports; or limited to, a weigh scale, a laptop (3) Access to the count room during (2) During the count process, correct computer through which weigh/count the count shall be restricted to members the error in the computer system and applications are operated, a security of the drop and count teams, with the enter the passwords of at least two camera available for the mobile scale exception of authorized observers, count team employees. If this procedure system, and a VCR to be housed within supervisors for resolution of problems, is used, an exception report shall be the video compartment of the mobile and authorized maintenance personnel. generated by the computer system scale. The system may include a mule (4) If counts from various revenue identifying the gaming machine cart used for mobile weigh scale system centers occur simultaneously in the number, the error, the correction, and locomotion. count room, procedures shall be in the count team employees attesting to (C) The gaming operation must obtain effect that prevent the commingling of the correction. the security camera available with the funds from different revenue centers. (B) [Reserved]
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(7) If applicable, the weight shall be of whom is a member of the count team (v) At the conclusion of the converted to dollar amounts prior to the and the other is independent of the reconciliation, at least two count team reconciliation of the weigh to the wrap. weigh/count and wrap procedures; members and the cage/vault employee (8) If a coin meter is used, a count (B) The count in paragraph (j)(1)(i)(A) shall sign the summary report attesting team member shall convert the coin of this section shall be recorded on an to its accuracy; and count for each denomination into appropriate inventory form; (vi) The wrapped coins (exclusive of dollars and shall enter the results on a (ii) Upon completion of the wrap of proper transfers) shall be transported to summary sheet. the gaming machine drop: the cage, vault or coin vault after the (9) The recorder and at least one other (A) At least two members of the count reconciliation of the weigh/count to the count team member shall sign the weigh team (wrap team), independently from wrap. tape and the gaming machine count each other, shall count the ending coin (k) Transfers during the gaming document attesting to the accuracy of room inventory; machine coin count and wrap. (1) the weigh/count. (B) The counts in paragraph Transfers may be permitted during the (10) All members of the count team (j)(1)(ii)(A) of this section shall be count and wrap only if permitted under shall sign the count document or a recorded on a summary report(s) that the internal control standards approved summary report to attest to their evidences the calculation of the final by the Tribal gaming regulatory participation in the count. wrap by subtracting the beginning authority. (11) All drop proceeds and cash inventory from the sum of the ending (2) Each transfer shall be recorded on equivalents that were counted shall be inventory and transfers in and out of the a separate multi-part form with a turned over to the cage or vault cashier coin room; preprinted or concurrently-printed form (who shall be independent of the count (C) The same count team members number (used solely for gaming team) or to an authorized person/ shall compare the calculated wrap to the machine count transfers) that shall be employee independent of the revenue weigh/count, recording the comparison subsequently reconciled by the generation and the count process for and noting any variances on the accounting department to ensure the verification. Such person shall certify by summary report; accuracy of the reconciled gaming signature as to the accuracy of the drop (D) A member of the cage/vault machine drop. proceeds delivered and received. department shall count the ending coin (3) Each transfer must be counted and (12) All gaming machine count and room inventory by denomination and signed for by at least two members of wrap documentation, including any shall reconcile it to the beginning the count team and by a person applicable computer storage media, inventory, wrap, transfers, and weigh/ independent of the count team who is shall be delivered to the accounting count; and responsible for authorizing the transfer. department by a count team member or (E) At the conclusion of the (l) Gaming machine drop key control a person independent of the cashier’s reconciliation, at least two count/wrap standards. (1) Gaming machine coin department. Alternatively, it may be team members and the verifying drop cabinet keys, including duplicates, adequately secured (e.g., locked employee shall sign the summary shall be maintained by a department container to which only accounting report(s) attesting to its accuracy. independent of the gaming machine personnel can gain access) until (iii) The functions described in department. retrieved by the accounting department. (13) If the coins are transported off the paragraph (j)(1)(ii)(A) and (C) of this (2) The physical custody of the keys property, a second (alternative) count section may be performed by only one needed to access gaming machine coin procedure shall be performed before the count team member. That count team drop cabinets, including duplicates, coins leave the property. Any variances member must then sign the summary shall require the involvement of two shall be documented. report, along with the verifying persons, one of whom is independent of (14) Variances. Large (by employee, as required under paragraph the gaming machine department. denomination, either $1,000 or 2% of (j)(1)(ii)(E). (3) Two employees (separate from key the drop, whichever is less) or unusual (2) If the count room is segregated custodian) shall be required to (e.g., zero for weigh/count or patterned from the coin room, or if the coin room accompany such keys while checked for all counts) variances between the is used as a count room and the coin out and observe each time gaming weigh/count and wrap shall be room inventory is secured to preclude machine drop cabinets are accessed. investigated by management personnel access by the count team, all of the (m) Table game drop box key control independent of the gaming machine following requirements shall be standards. (1) Tier A gaming operations department, count team, and the cage/ completed, at the conclusion of the shall be exempt from compliance with vault functions on a timely basis. The count: this paragraph if the Tribal gaming results of such investigation shall be (i) At least two members of the count/ regulatory authority, or the gaming documented, maintained for inspection, wrap team shall count the final wrapped operation as approved by the Tribal and provided to the Tribal gaming gaming machine drop independently gaming regulatory authority, establishes regulatory authority upon request. from each other; and the gaming operation complies with (j) Security of the coin room inventory (ii) The counts shall be recorded on a procedures that maintain adequate key during the gaming machine coin count summary report; control and restricts access to the keys. and wrap. (1) If the count room serves (iii) The same count team members (2) Procedures shall be developed and as a coin room and coin room inventory (or the accounting department) shall implemented to insure that is not secured so as to preclude access compare the final wrap to the weigh/ unauthorized access to empty table by the count team, then the following count, recording the comparison, and game drop boxes shall not occur from standards shall apply: noting any variances on the summary the time the boxes leave the storage (i) At the commencement of the report; racks until they are placed on the tables. gaming machine count the following (iv) A member of the cage/vault (3) The involvement of at least two requirements shall be met: department shall count the wrapped persons independent of the cage (A) The coin room inventory shall be gaming machine drop by denomination department shall be required to access counted by at least two employees, one and reconcile it to the weigh/count; stored empty table game drop boxes.
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(4) The release keys shall be precluded from having simultaneous be exempt from compliance with this separately keyed from the contents keys. access to the bill acceptor canister paragraph if the Tribal gaming (5) At least two count team members contents keys and release keys. regulatory authority, or the gaming are required to be present at the time (5) For situations requiring access to operation as approved by the Tribal count room and other count keys are a bill acceptor canister at a time other gaming regulatory authority, establishes issued for the count. than the scheduled drop, the date, time, and the gaming operation complies with (6) All duplicate keys shall be and signature of employee signing out/ procedures that maintain adequate key maintained in a manner that provides in the release key must be documented. control and restricts access to the keys. the same degree of control as is required (p) Table game drop box storage rack (2) The physical custody of the keys for the original keys. Records shall be keys. (1) Tier A gaming operations shall needed for accessing stored, full bill maintained for each key duplicated that be exempt from compliance with this acceptor canister contents shall require indicate the number of keys made and paragraph if the Tribal gaming involvement of persons from two destroyed. regulatory authority, or the gaming separate departments, with the (7) Logs shall be maintained by the operation as approved by the Tribal exception of the count team. custodian of sensitive keys to document gaming regulatory authority, establishes (3) Access to the bill acceptor canister authorization of personnel accessing and the gaming operation complies with contents key at other than scheduled keys. procedures that maintain adequate key count times shall require the (n) Table game drop box release keys. control and restricts access to the keys. involvement of at least two persons (1) Tier A gaming operations shall be (2) Persons authorized to obtain table from separate departments, one of exempt from compliance with this game drop box storage rack keys shall be whom must be a supervisor. The reason paragraph if the Tribal gaming precluded from having simultaneous for access shall be documented with the regulatory authority, or the gaming access to table game drop box contents signatures of all participants and operation as approved by the Tribal keys, with the exception of the count observers. gaming regulatory authority, establishes team. (4) Only the count team members and the gaming operation complies with (q) Bill acceptor canister storage rack shall be allowed access to bill acceptor procedures that maintain adequate key keys. (1) Tier A gaming operations shall canister contents keys during the count control and restricts access to the keys. be exempt from compliance with this process. (2) The table game drop box release paragraph if the Tribal gaming (t) Emergency drop procedures. keys shall be maintained by a regulatory authority, or the gaming Emergency drop procedures shall be department independent of the pit operation as approved by the Tribal developed by the Tribal gaming department. gaming regulatory authority, establishes regulatory authority, or the gaming (3) Only the person(s) authorized to and the gaming operation complies with operation as approved by the Tribal remove table game drop boxes from the procedures that maintain adequate key gaming regulatory authority. tables shall be allowed access to the control and restricts access to the keys. (u) Equipment standards for gaming table game drop box release keys; (2) Persons authorized to obtain bill machine count. however, the count team members may acceptor canister storage rack keys shall (1) A weigh scale calibration module have access to the release keys during be precluded from having simultaneous shall be secured so as to prevent the soft count in order to reset the table access to bill acceptor canister contents unauthorized access (e.g., prenumbered game drop boxes. keys, with the exception of the count seal, lock and key, etc.). (4) Persons authorized to remove the team. table game drop boxes shall be (r) Table game drop box contents (2) A person independent of the cage, precluded from having simultaneous keys. (1) Tier A gaming operations shall vault, gaming machine, and count team access to the table game drop box be exempt from compliance with this functions shall be required to be present contents keys and release keys. paragraph if the Tribal gaming whenever the calibration module is (5) For situations requiring access to regulatory authority, or the gaming accessed. Such access shall be a table game drop box at a time other operation as approved by the Tribal documented and maintained. than the scheduled drop, the date, time, gaming regulatory authority, establishes (3) If a weigh scale interface is used, and signature of employee signing out/ and the gaming operation complies with it shall be adequately restricted so as to in the release key must be documented. procedures that maintain adequate key prevent unauthorized access (o) Bill acceptor canister release keys. control and restricts access to the keys. (passwords, keys, etc.). (1) Tier A gaming operations shall be (2) The physical custody of the keys (4) If the weigh scale has a zero exempt from compliance with this needed for accessing stored, full table adjustment mechanism, it shall be paragraph if the Tribal gaming game drop box contents shall require physically limited to minor adjustments regulatory authority, or the gaming the involvement of persons from at least (e.g., weight of a bucket) or physically operation as approved by the Tribal two separate departments, with the situated such that any unnecessary gaming regulatory authority, establishes exception of the count team. adjustments to it during the weigh and the gaming operation complies with (3) Access to the table game drop box process would be observed by other procedures that maintain adequate key contents key at other than scheduled count team members. control and restricts access to the keys. count times shall require the (5) The weigh scale and weigh scale (2) The bill acceptor canister release involvement of at least two persons interface (if applicable) shall be tested keys shall be maintained by a from separate departments, including by a person or persons independent of department independent of the gaming management. The reason for access shall the cage, vault, and gaming machine machine department. be documented with the signatures of departments and count team at least (3) Only the person(s) authorized to all participants and observers. quarterly. At least annually, this test remove bill acceptor canisters from the (4) Only count team members shall be shall be performed by internal audit in gaming machines shall be allowed allowed access to table game drop box accordance with the internal audit access to the release keys. contents keys during the count process. standards. The result of these tests shall (4) Persons authorized to remove the (s) Bill acceptor canister contents be documented and signed by the bill acceptor canisters shall be keys. (1) Tier A gaming operations shall person or persons performing the test.
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(6) Prior to the gaming machine count, sensitive key location and control, and (3) Whenever possible, internal audit at least two employees shall verify the a review of keno auditing procedures; observations shall be performed on an accuracy of the weigh scale with varying (v) Pari-mutual wagering, including unannounced basis (i.e., without the weights or with varying amounts of write and payout procedures, and pari- employees being forewarned that their previously counted coin for each mutual auditing procedures; activities will be observed). denomination to ensure the scale is (vi) Table games, including but not Additionally, if the independent properly calibrated (varying weights/ limited to, fill and credit procedures, pit accountant also performs the internal coin from drop to drop is acceptable). credit play procedures, rim credit audit function, the accountant shall (7) If a mechanical coin counter is procedures, soft drop/count procedures perform separate observations of the used (instead of a weigh scale), the and the subsequent transfer of funds, table games/gaming machine drops and Tribal gaming regulatory authority, or unannounced testing of count room counts to satisfy the internal audit the gaming operation as approved by the currency counters and/or currency observation requirements and Tribal gaming regulatory authority, shall interface, location and control over independent accountant tests of controls establish and the gaming operation shall sensitive keys, the tracing of source as required by the American Institute of comply, with procedures that are documents to summarized Certified Public Accountants guide. equivalent to those described in documentation and accounting records, (c) Documentation. (1) Documentation paragraphs (u)(4), (u)(5), and (u)(6) of and reconciliation to restricted copies; (e.g., checklists, programs, reports, etc.) this section. (vii) Gaming machines, including but shall be prepared to evidence all (8) If a coin meter count machine is not limited to, jackpot payout and internal audit work performed as it used, the count team member shall gaming machine fill procedures, gaming relates to the requirements in this record the machine number machine drop/count and bill acceptor section, including all instances of denomination and number of coins in drop/count and subsequent transfer of noncompliance. ink on a source document, unless the funds, unannounced testing of weigh (2) The internal audit department meter machine automatically records scale and weigh scale interface, shall operate with audit programs, such information. unannounced testing of count room which, at a minimum, address the (i) A count team member shall test the currency counters and/or currency MICS. Additionally, the department coin meter count machine prior to the interface, gaming machine drop cabinet shall properly document the work actual count to ascertain if the metering access, tracing of source documents to performed, the conclusions reached, device is functioning properly with a summarized documentation and and the resolution of all exceptions. predetermined number of coins for each accounting records, reconciliation to Institute of Internal Auditors standards denomination. restricted copies, location and control are recommended but not required. (ii) [Reserved] over sensitive keys, compliance with (d) Reports. (1) Reports documenting EPROM duplication procedures, and audits performed shall be maintained § 542.22 What are the minimum internal compliance with MICS procedures for and made available to the Commission control standards for internal audit for Tier gaming machines that accept currency A gaming operations? upon request. or coin(s) and issue cash-out tickets or (2) Such audit reports shall include (a) Internal audit personnel. (1) For gaming machines that do not accept the following information: Tier A gaming operations, a separate currency or coin(s) and do not return (i) Audit objectives; internal audit department must be currency or coin(s); (ii) Audit procedures and scope; maintained. Alternatively, designating (viii) Cage and credit procedures (iii) Findings and conclusions; personnel (who are independent with including all cage, credit, and collection (iv) Recommendations, if applicable; respect to the departments/procedures procedures, and the reconciliation of and being examined) to perform internal trial balances to physical instruments on (v) Management’s response. audit work satisfies the requirements of a sample basis. Cage accountability shall (e) Material exceptions. All material this paragraph. be reconciled to the general ledger; exceptions resulting from internal audit (2) The internal audit personnel shall (ix) Information technology functions, work shall be investigated and resolved report directly to the Tribe, Tribal including review for compliance with with the results of such being gaming regulatory authority, audit information technology standards; documented and retained for five years. committee, or other entity designated by (x) Complimentary service or item, (f) Role of management. (1) Internal the Tribe in accordance with the including but not limited to, procedures audit findings shall be reported to definition of internal audit in § 542.2. whereby complimentary service items management. (b) Audits. (1) Internal audit are issued, authorized, and redeemed; (2) Management shall be required to personnel shall perform audits of all and respond to internal audit findings major gaming areas of the gaming (xi) Any other internal audits as stating corrective measures to be taken operation. The following shall be required by the Tribe, Tribal gaming to avoid recurrence of the audit reviewed at least annually: regulatory authority, audit committee, exception. (i) Bingo, including but not limited to, or other entity designated by the Tribe. (3) Such management responses shall bingo card control, payout procedures, (2) In addition to the observation and be included in the internal audit report and cash reconciliation process; examinations performed under that will be delivered to management, (ii) Pull tabs, including but not paragraph (b)(1) of this section, follow- the Tribe, Tribal gaming regulatory limited to, statistical records, winner up observations and examinations shall authority, audit committee, or other verification, perpetual inventory, and be performed to verify that corrective entity designated by the Tribe. accountability of sales versus inventory; action has been taken regarding all (iii) Card games, including but not instances of noncompliance cited by § 542.23 What are the minimum internal limited to, card games operation, cash internal audit, the independent control standards for surveillance for Tier A exchange procedures, shill transactions, accountant, and/or the Commission. gaming operations? and count procedures; The verification shall be performed (a) Tier A gaming operations must, at (iv) Keno, including but not limited within six (6) months following the date a minimum, maintain and operate an to, game write and payout procedures, of notification. unstaffed surveillance system in a
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secured location whereby the areas (j) Card games. The surveillance and (n)(3) of this section, gaming under surveillance are continually system shall record the general activities machines offering a payout of more than recorded. in each card room and be capable of $250,000 shall be recorded by a (b) The entrance to the secured identifying the employees performing dedicated camera(s) to provide coverage location shall be located so that it is not the different functions. of: readily accessible by either gaming (k) Keno. The surveillance system (i) All customers and employees at the operation employees who work shall record the keno ball-drawing gaming machine; and primarily on the casino floor, or the device, the general activities in each (ii) The face of the gaming machine, general public. keno game area, and be capable of with sufficient clarity to identify the (c) Access to the secured location identifying the employees performing payout line(s) of the gaming machine. shall be limited to surveillance the different functions. (2) In-house progressive machine. In- personnel, designated employees, and (l) Table games. (1) Operations with house progressive gaming machines other persons authorized in accordance four (4) or more table games. Except as offering a base payout amount (jackpot with the surveillance department otherwise provided in paragraphs (l)(3), reset amount) of more than $100,000 policy. Such policy shall be approved (l)(4), and (l)(5) of this section, the shall be recorded by a dedicated by the Tribal gaming regulatory surveillance system of gaming camera(s) to provide coverage of: authority. operations operating four (4) or more (i) All customers and employees at the (d) The surveillance system shall table games shall provide at a minimum gaming machine; and include date and time generators that one (1) pan-tilt-zoom camera per two (2) (ii) The face of the gaming machine, possess the capability to display the tables and surveillance must be capable with sufficient clarity to identify the date and time of recorded events on of taping: payout line(s) of the gaming machine. video and/or digital recordings. The (i) With sufficient clarity to identify (3) Wide-area progressive machine. displayed date and time shall not customers and dealers; and Wide-area progressive gaming machines significantly obstruct the recorded view. (ii) With sufficient coverage and offering a base payout amount of more (e) The surveillance department shall clarity to simultaneously view the table than $1.5 million and monitored by an strive to ensure staff is trained in the use bank and determine the configuration of independent vendor utilizing an on-line of the equipment, knowledge of the wagers, card values, and game outcome. progressive computer system shall be games, and house rules. (iii) One (1) dedicated camera per recorded by a dedicated camera(s) to (f) Each camera required by the table and one (1) pan-tilt-zoom camera provide coverage of: standards in this section shall be per four (4) tables may be an acceptable (i) All customers and employees at the installed in a manner that will prevent alternative procedure to satisfy the gaming machine; and it from being readily obstructed, requirements of this paragraph. (ii) The face of the gaming machine, tampered with, or disabled by (2) Operations with three (3) or fewer with sufficient clarity to identify the customers or employees. table games. The surveillance system of payout line(s) of the gaming machine. (g) Each camera required by the gaming operations operating three (3) or (4) Notwithstanding paragraph (n)(1) standards in this section shall possess fewer table games shall: of this section, if the gaming machine is the capability of having its picture (i) Comply with the requirements of a multi-game machine, the Tribal recorded. The surveillance system shall paragraph (l)(1) of this section; or gaming regulatory authority, or the include sufficient numbers of recorders (ii) Have one (1) overhead camera at gaming operation subject to the to simultaneously record multiple each table. approval of the Tribal gaming regulatory gaming and count room activities, and (3) Craps. All craps tables shall have authority, may develop and implement record the views of all dedicated two (2) dedicated cross view cameras alternative procedures to verify payouts. cameras and motion activated dedicated covering both ends of the table. (o) Currency and coin. The cameras. (4) Roulette. All roulette areas shall surveillance system shall record a (h) Reasonable effort shall be made to have one (1) overhead dedicated camera general overview of all areas where repair each malfunction of surveillance covering the roulette wheel and shall currency or coin may be stored or system equipment required by the also have one (1) dedicated camera counted. standards in this section within seventy- covering the play of the table. (p) Video recording and/or digital two (72) hours after the malfunction is (5) Big wheel. All big wheel games record retention. (1) All video discovered. The Tribal gaming shall have one (1) dedicated camera recordings and/or digital records of regulatory authority shall be notified of viewing the wheel. coverage provided by the dedicated any camera(s) that has malfunctioned (m) Progressive table games. (1) cameras or motion-activated dedicated for more than twenty-four (24) hours. Progressive table games with a cameras required by the standards in (1) In the event of a dedicated camera progressive jackpot of $25,000 or more this section shall be retained for a malfunction, the gaming operation and/ shall be recorded by dedicated cameras minimum of seven (7) days. or the surveillance department shall, that provide coverage of: (2) Recordings involving suspected or upon identification of the malfunction, (i) The table surface, sufficient that confirmed gaming crimes, unlawful provide alternative camera coverage or the card values and card suits can be activity, or detentions by security other security measures, such as clearly identified; personnel, must be retained for a additional supervisory or security (ii) An overall view of the entire table minimum of thirty (30) days. personnel, to protect the subject with sufficient clarity to identify (3) Duly authenticated copies of video activity. customers and dealer; and recordings and/or digital records shall (2) [Reserved] (iii) A view of the progressive meter be provided to the Commission upon (i) Bingo. The surveillance system jackpot amount. If several tables are request. shall record the bingo ball drawing linked to the same progressive jackpot (q) Video library log. A video library device, the game board, and the meter, only one meter need be recorded. log, or comparable alternative procedure activities of the employees responsible (2) [Reserved] approved by the Tribal gaming for drawing, calling, and entering the (n) Gaming machines. (1) Except as regulatory authority, shall be balls drawn or numbers selected. otherwise provided in paragraphs (n)(2) maintained to demonstrate compliance
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with the storage, identification, and (5) All table game drop boxes shall be (i) The count of each box shall be retention standards required in this posted with a number corresponding to recorded in ink or other permanent form section. a permanent number on the gaming of recordation. (r) Malfunction and repair log. (1) table and marked to indicate game, table (ii) A second count shall be performed Surveillance personnel shall maintain a number, and shift. by an employee on the count team who log or alternative procedure approved (6) Surveillance shall be notified did not perform the initial count. by the Tribal gaming regulatory when the drop is to begin so that (iii) Corrections to information authority that documents each surveillance may monitor the activities. originally recorded by the count team malfunction and repair of the (c) Soft count room personnel. (1) The on soft count documentation shall be surveillance system as defined in this table game soft count and the gaming made by drawing a single line through section. machine bill acceptor count shall be the error, writing the correct figure (2) The log shall state the time, date, performed by a minimum of two above the original figure, and then and nature of each malfunction, the employees. obtaining the initials of at least two efforts expended to repair the (i) The count shall be viewed live, or count team members who verified the malfunction, and the date of each effort, on video recording and/or digital change, unless the count team only has the reasons for any delays in repairing record, within seven (7) days by an two (2) members in which case the the malfunction, the date the employee independent of the count. initials of only one (1) verifying count malfunction is repaired, and where (ii) [Reserved] team member is required. applicable, any alternative security (2) Count room personnel shall not be (5) If currency counters are utilized measures that were taken. allowed to exit or enter the count room and the count room table is used only during the count except for emergencies to empty boxes and sort/stack contents, § 542.30 What is a Tier B gaming operation? or scheduled breaks. At no time during a count team member shall be able to the count, shall there be fewer than two observe the loading and unloading of all A Tier B gaming operation is one with employees in the count room until the currency at the currency counter, gross gaming revenues of more than $5 drop proceeds have been accepted into including rejected currency. million but not more than $15 million. cage/vault accountability. Surveillance (6) Table game drop boxes, when § 542.31 What are the minimum internal shall be notified whenever count room empty, shall be shown to another control standards for drop and count for personnel exit or enter the count room member of the count team, or to another Tier B gaming operations? during the count. person who is observing the count, or to (a) Computer applications. For any (3) Count team members shall be surveillance, provided the count is computer applications utilized, rotated on a routine basis such that the monitored in its entirety by a person alternate documentation and/or count team is not consistently the same independent of the count. procedures that provide at least the two persons more than four (4) days per (7) Orders for fill/credit (if applicable) level of control described by the week. This standard shall not apply to shall be matched to the fill/credit slips. standards in this section, as approved gaming operations that utilize a count Fills and credits shall be traced to or by the Tribal gaming regulatory team of more than two persons. recorded on the count sheet. authority, will be acceptable. (4) The count team shall be (8) Pit marker issue and payment slips (b) Table game drop standards. (1) independent of transactions being (if applicable) removed from the table The setting out of empty table game reviewed and counted. The count team game drop boxes shall either be: drop boxes and the drop shall be a shall be independent of the cage/vault (i) Traced to or recorded on the count continuous process. departments, however, a dealer or a cage sheet by the count team; or (2) At the end of each shift: cashier may be used if this person is not (ii) Totaled by shift and traced to the (i) All locked table game drop boxes allowed to perform the recording totals documented by the computerized shall be removed from the tables by a function. An accounting representative system. Accounting personnel shall person independent of the pit shift may be used if there is an independent verify the issue/payment slip for each being dropped; audit of all soft count documentation. table is accurate. (ii) A separate drop box shall be (d) Table game soft count standards. (9) Foreign currency exchange forms placed on each table opened at any time (1) The table game soft count shall be (if applicable) removed from the table during each shift or a gaming operation performed in a soft count room or other game drop boxes shall be reviewed for may utilize a single drop box with equivalently secure area with the proper daily exchange rate and the separate openings and compartments for comparable controls. conversion amount shall be recomputed each shift; and (2) Access to the count room during by the count team. Alternatively, this (iii) Upon removal from the tables, the count shall be restricted to members may be performed by accounting/ table game drop boxes shall be of the drop and count teams, with the auditing employees. transported directly to the count room exception of authorized observers, (10) The opening/closing table and or other equivalently secure area with supervisors for resolution of problems, marker inventory forms (if applicable) comparable controls and locked in a and authorized maintenance personnel. shall either be: secure manner until the count takes (3) If counts from various revenue (i) Examined and traced to or place. centers occur simultaneously in the recorded on the count sheet; or (3) If drop boxes are not placed on all count room, procedures shall be in (ii) If a computerized system is used, tables, then the pit department shall effect that prevent the commingling of accounting personnel can trace the document which tables were open funds from different revenue centers. opening/closing table and marker during the shift. (4) The table game drop boxes shall be inventory forms to the count sheet. (4) The transporting of table game individually emptied and counted in Discrepancies shall be investigated with drop boxes shall be performed by a such a manner to prevent the the findings documented and minimum of two persons, at least one of commingling of funds between boxes maintained for inspection. whom is independent of the pit shift until the count of the box has been (11) The count sheet shall be being dropped. recorded. reconciled to the total drop by a count
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team member who shall not function as equivalently secure area with delivered to the accounting department the sole recorder. comparable controls. by a count team member or a person (12) All members of the count team (2) Access to the count room during independent of the cashiers department. shall sign the count document or a the count shall be restricted to members Alternatively, it may be adequately summary report to attest to their of the drop and count teams, with the secured (e.g., locked container to which participation in the count. exception of authorized observers, only accounting personnel can gain (13) All drop proceeds and cash supervisors for resolution of problems, access) until retrieved by the accounting equivalents that were counted shall be and authorized maintenance personnel. department. turned over to the cage or vault cashier (3) If counts from various revenue (11) Access to stored bill acceptor (who shall be independent of the count centers occur simultaneously in the canisters, full or empty, shall be team) or to an authorized person/ count room, procedures shall be in restricted to: employee independent of the revenue effect that prevent the commingling of (i) Authorized members of the drop generation and the count process for funds from different revenue centers. and count teams; and verification. Such person shall certify by (4) The bill acceptor canisters shall be (ii) Authorized personnel in an signature as to the accuracy of the drop individually emptied and counted in emergency for the resolution of a proceeds delivered and received. such a manner to prevent the problem. (14) The count sheet, with all commingling of funds between canisters (12) All bill acceptor canisters shall be supporting documents, shall be until the count of the canister has been posted with a number corresponding to delivered to the accounting department recorded. a permanent number on the gaming by a count team member or a person (i) The count of each canister shall be machine. independent of the cashiers department. recorded in ink or other permanent form (g) Gaming machine coin drop Alternatively, it may be adequately of recordation. standards. (1) A minimum of two secured (e.g., locked container to which (ii) A second count shall be performed employees shall be involved in the only accounting personnel can gain by an employee on the count team who removal of the gaming machine drop, at access) until retrieved by the accounting did not perform the initial count. least one of who is independent of the department. (iii) Corrections to information gaming machine department. (15) Access to stored, full table game originally recorded by the count team (2) All drop buckets shall be removed drop boxes shall be restricted to on soft count documentation shall be only at the time previously designated authorized members of the drop and made by drawing a single line through by the gaming operation and reported to count teams. the error, writing the correct figure the Tribal gaming regulatory authority, (e) Gaming machine bill acceptor above the original figure, and then except for emergency drops. drop standards. (1) A minimum of two obtaining the initials of at least two (3) Surveillance shall be notified employees shall be involved in the count team members who verified the when the drop is to begin in order that removal of the gaming machine drop, at change. surveillance may monitor the activities. least one of who is independent of the (5) If currency counters are utilized (4) Security shall be provided over the gaming machine department. and the count room table is used only buckets removed from the gaming (2) All bill acceptor canisters shall be to empty canisters and sort/stack machine drop cabinets and awaiting removed only at the time previously contents, a count team member shall be transport to the count room. designated by the gaming operation and able to observe the loading and (5) As each machine is opened, the reported to the Tribal gaming regulatory unloading of all currency at the contents shall be tagged with its authority, except for emergency drops. currency counter, including rejected respective machine number if the (3) Surveillance shall be notified currency. bucket is not permanently marked with when the drop is to begin so that (6) Canisters, when empty, shall be the machine number. The contents shall surveillance may monitor the activities. shown to another member of the count be transported directly to the area (4) The bill acceptor canisters shall be team, to another person who is designated for the counting of such drop removed by a person independent of the observing the count, or to surveillance, proceeds. If more than one trip is gaming machine department then provided that the count is monitored in required to remove the contents of the transported directly to the count room its entirety by a person independent of machines, the filled carts of coins shall or other equivalently secure area with the count. be securely locked in the room designed comparable controls and locked in a (7) The count sheet shall be for counting or in another equivalently secure manner until the count takes reconciled to the total drop by a count secure area with comparable controls. place. team member who shall not function as There shall be a locked covering on any (i) Security shall be provided over the the sole recorder. carts in which the drop route includes bill acceptor canisters removed from the (8) All members of the count team passage out of doors. gaming machines and awaiting transport shall sign the count document or a (i) Alternatively, a smart bucket to the count room. summary report to attest to their system that electronically identifies and (ii) The transporting of bill acceptor participation in the count. tracks the gaming machine number, and canisters shall be performed by a (9) All drop proceeds and cash facilitates the proper recognition of minimum of two persons, at least one of equivalents that were counted shall be gaming revenue, shall satisfy the who is independent of the gaming turned over to the cage or vault cashier requirements of this paragraph. machine department. (who shall be independent of the count (ii) [Reserved] (5) All bill acceptor canisters shall be team) or to an authorized person/ (6) Each drop bucket in use shall be: posted with a number corresponding to employee independent of the revenue (i) Housed in a locked compartment a permanent number on the gaming generation and the count process for separate from any other compartment of machine. verification. Such person shall certify by the gaming machine and keyed (f) Gaming machine bill acceptor signature as to the accuracy of the drop differently than other gaming machine count standards. (1) The gaming proceeds delivered and received. compartments; and machine bill acceptor count shall be (10) The count sheet, with all (ii) Identifiable to the gaming machine performed in a soft count room or other supporting documents, shall be from which it is removed. If the gaming
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machine is identified with a removable (i) Alternatively, an on-the-floor drop (M) User access to the system shall be tag that is placed in the bucket, the tag system utilizing a mobile scale shall limited to those employees required to shall be placed on top of the bucket satisfy the requirements of this have full or limited access to complete when it is collected. paragraph, subject to the following the weigh/drop/count; and (7) Each gaming machine shall have conditions: (N) When the weigh/drop/count is drop buckets into which coins or tokens (A) The gaming operation shall utilize completed, the independent observer that are retained by the gaming machine and maintain an effective on-line shall access the laptop compartment, are collected. Drop bucket contents shall gaming machine monitoring system, as end the recording session, eject the not be used to make change or pay described in § 542.13(m)(3); videotape, and deliver the videotape to hand-paid payouts. (B) Components of the on-the-floor surveillance. (8) The collection procedures may drop system shall include, but not be (ii) [Reserved] include procedures for dropping gaming limited to, a weigh scale, a laptop (3) Access to the count room during machines that have trays instead of drop computer through which weigh/count the count shall be restricted to members buckets. applications are operated, a security of the drop and count teams, with the (h) Hard count room personnel. (1) camera available for the mobile scale exception of authorized observers, The weigh/count shall be performed by system, and a VCR to be housed within supervisors for resolution of problems, a minimum of two employees. the video compartment of the mobile and authorized maintenance personnel. (i) The count shall be viewed either scale. The system may include a mule (4) If counts from various revenue live, or on video recording and/or cart used for mobile weigh scale system centers occur simultaneously in the digital record within seven (7) days by locomotion. count room, procedures shall be in an employee independent of the count. (C) The gaming operation must obtain effect that prevent the commingling of (ii) [Reserved] the security camera available with the funds from different revenue centers. (2) At no time during the weigh/count system, and this camera must be added (5) The following functions shall be shall there be fewer than two employees in such a way as to eliminate tampering. performed in the counting of the gaming in the count room until the drop (D) Prior to the drop, the drop/count machine drop: proceeds have been accepted into cage/ team shall ensure the scale batteries are (i) Recorder function, which involves vault accountability. Surveillance shall charged; the recording of the gaming machine be notified whenever count room (E) Prior to the drop, a videotape shall count; and personnel exit or enter the count room be inserted into the VCR used to record (ii) Count team supervisor function, during the count. the drop in conjunction with the which involves the control of the (i) If the gaming machine count is security camera system and the VCR gaming machine weigh and wrap conducted with a continuous shall be activated; process. The supervisor shall not mechanical count meter that is not reset (F) The weigh scale test shall be perform the initial recording of the during the count and is verified in performed prior to removing the unit weigh/count unless a weigh scale with writing by at least two employees at the from the hard count room for the start a printer is used. start and end of each denomination of the weigh/drop/count; (6) The gaming machine drop shall be count, then one employee may perform (G) Surveillance shall be notified counted, wrapped, and reconciled in the wrap. when the weigh/drop/count begins and such a manner to prevent the (ii) [Reserved] shall be capable of monitoring the entire commingling of gaming machine drop (3) Count team members shall be process; coin with coin (for each denomination) rotated on a routine basis such that the (H) An observer independent of the from the next gaming machine drop count team is not consistently the same weigh/drop/count teams (independent until the count of the gaming machine two persons more than four (4) days per observer) shall remain by the weigh drop has been recorded. If the coins are week. This standard shall not apply to scale at all times and shall observe the not wrapped immediately after being gaming operations that utilize a count entire weigh/drop/count process; weighed or counted, they shall be team of more than two persons. (I) Physical custody of the key(s) secured and not commingled with other (4) The count team shall be needed to access the laptop and video coin. independent of transactions being compartment shall require the (i) The amount of the gaming machine reviewed and counted. The count team involvement of two persons, one of drop from each machine shall be shall be independent of the cage/vault whom is independent of the drop and recorded in ink or other permanent form departments, unless they are non- count team; of recordation on a gaming machine supervisory gaming machine employees (J) The mule key (if applicable), the count document by the recorder or and perform the laborer function only laptop and video compartment keys, mechanically printed by the weigh (A non-supervisory gaming machine and the remote control for the VCR shall scale. employee is defined as a person below be maintained by a department (ii) Corrections to information the level of gaming machine shift independent of the gaming machine originally recorded by the count team supervisor). A cage cashier may be used department. The appropriate personnel on gaming machine count if this person is not allowed to perform shall sign out these keys; documentation shall be made by the recording function. An accounting (K) A person independent of the drawing a single line through the error, representative may be used if there is an weigh/drop/count teams shall be writing the correct figure above the independent audit of all count required to accompany these keys while original figure, and then obtaining the documentation. they are checked out, and observe each initials of at least two count team (i) Gaming machine coin count and time the laptop compartment is opened; members who verified the change. wrap standards. (1) Coins shall include (L) The laptop access panel shall not (A) If a weigh scale interface is used, tokens. be opened outside the hard count room, corrections to gaming machine count (2) The gaming machine coin count except in instances when the laptop data shall be made using either of the and wrap shall be performed in a count must be rebooted as a result of a crash, following: room or other equivalently secure area lock up, or other situation requiring (1) Drawing a single line through the with comparable controls. immediate corrective action; error on the gaming machine document,
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writing the correct figure above the investigated by management personnel following requirements shall be original figure, and then obtaining the independent of the gaming machine completed, at the conclusion of the initials of at least two count team department, count team, and the cage/ count: employees. If this procedure is used, an vault functions on a timely basis. The (i) At least two members of the count/ employee independent of the gaming results of such investigation shall be wrap team shall count the final wrapped machine department and count team documented, maintained for inspection, gaming machine drop independently shall enter the correct figure into the and provided to the Tribal gaming from each other; computer system prior to the generation regulatory authority upon request. (ii) The counts shall be recorded on a of related gaming machine reports; or (j) Security of the coin room inventory summary report; (2) During the count process, correct during the gaming machine coin count (iii) The same count team members the error in the computer system and and wrap. (1) If the count room serves (or the accounting department) shall enter the passwords of at least two as a coin room and coin room inventory compare the final wrap to the weigh/ count team employees. If this procedure is not secured so as to preclude access count, recording the comparison, and is used, an exception report shall be by the count team, then the following noting any variances on the summary generated by the computer system standards shall apply: report; identifying the gaming machine (i) At the commencement of the (iv) A member of the cage/vault number, the error, the correction, and gaming machine count the following department shall count the wrapped the count team employees attesting to requirements shall be met: gaming machine drop by denomination the correction. (A) The coin room inventory shall be and reconcile it to the weigh/count; (B) [Reserved] counted by at least two employees, one (v) At the conclusion of the (7) If applicable, the weight shall be of whom is a member of the count team reconciliation, at least two count team converted to dollar amounts before the and the other is independent of the members and the cage/vault employee reconciliation of the weigh to the wrap. weigh/count and wrap procedures; shall sign the summary report attesting (8) If a coin meter is used, a count (B) The count in paragraph (j)(1)(i)(A) to its accuracy; and team member shall convert the coin of this section shall be recorded on an (vi) The wrapped coins (exclusive of count for each denomination into appropriate inventory form; proper transfers) shall be transported to dollars and shall enter the results on a (ii) Upon completion of the wrap of the cage, vault or coin vault after the summary sheet. the gaming machine drop: reconciliation of the weigh/count to the (9) The recorder and at least one other (A) At least two members of the count wrap. count team member shall sign the weigh team (wrap team), independently from (k) Transfers during the gaming tape and the gaming machine count each other, shall count the ending coin machine coin count and wrap. (1) document attesting to the accuracy of room inventory; Transfers may be permitted during the the weigh/count. (B) The counts in paragraph count and wrap only if permitted under (10) All members of the count team (j)(1)(ii)(A) of this section shall be the internal control standards approved shall sign the count document or a recorded on a summary report(s) that by the Tribal gaming regulatory summary report to attest to their evidences the calculation of the final authority. participation in the count. wrap by subtracting the beginning (2) Each transfer shall be recorded on (11) All drop proceeds and cash inventory from the sum of the ending a separate multi-part form with a equivalents that were counted shall be inventory and transfers in and out of the preprinted or concurrently-printed form turned over to the cage or vault cashier coin room; number (used solely for gaming (who shall be independent of the count (C) The same count team members machine count transfers) that shall be team) or to an authorized person/ shall compare the calculated wrap to the subsequently reconciled by the employee independent of the revenue weigh/count, recording the comparison accounting department to ensure the generation and the count process for and noting any variances on the accuracy of the reconciled gaming verification. Such person shall certify by summary report; machine drop. signature as to the accuracy of the drop (D) A member of the cage/vault (3) Each transfer must be counted and proceeds delivered and received. department shall count the ending coin signed for by at least two members of (12) All gaming machine count and room inventory by denomination and the count team and by a person wrap documentation, including any shall reconcile it to the beginning independent of the count team who is applicable computer storage media, inventory, wrap, transfers and weigh/ responsible for authorizing the transfer. shall be delivered to the accounting count; and (l) Gaming machine drop key control department by a count team member or (E) At the conclusion of the standards. (1) Gaming machine coin a person independent of the cashier’s reconciliation, at least two count/wrap drop cabinet keys, including duplicates, department. Alternatively, it may be team members and the verifying shall be maintained by a department adequately secured (e.g., locked employee shall sign the summary independent of the gaming machine container to which only accounting report(s) attesting to its accuracy. department. personnel can gain access) until (iii) The functions described in (2) The physical custody of the keys retrieved by the accounting department. paragraph (j)(1)(ii)(A) and (C) of this needed to access gaming machine coin (13) If the coins are transported off the section may be performed by only one drop cabinets, including duplicates, property, a second (alternative) count count team member. That count team shall require the involvement of two procedure shall be performed before the member must then sign the summary persons, one of whom is independent of coins leave the property. Any variances report, along with the verifying the gaming machine department. shall be documented. employee, as required under paragraph (3) Two employees (separate from key (14) Variances. Large (by (j)(1)(ii)(E). custodian) shall be required to denomination, either $1,000 or 2% of (2) If the count room is segregated accompany such keys while checked the drop, whichever is less) or unusual from the coin room, or if the coin room out and observe each time gaming (e.g., zero for weigh/count or patterned is used as a count room and the coin machine drop cabinets are accessed, for all counts) variances between the room inventory is secured to preclude unless surveillance is notified each time weigh/count and wrap shall be access by the count team, all of the keys are checked out and surveillance
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observes the person throughout the and signature of employee signing out/ accessed. Such access shall be period the keys are checked out. in the release key must be documented. documented and maintained. (m) Table game drop box key control (p) Table game drop box storage rack (3) If a weigh scale interface is used, standards. (1) Procedures shall be keys. Persons authorized to obtain table it shall be adequately restricted so as to developed and implemented to insure game drop box storage rack keys shall be prevent unauthorized access that unauthorized access to empty table precluded from having simultaneous (passwords, keys, etc.). game drop boxes shall not occur from access to table game drop box contents (4) If the weigh scale has a zero the time the boxes leave the storage keys with the exception of the count adjustment mechanism, it shall be racks until they are placed on the tables. team. physically limited to minor adjustments (2) The involvement of at least two (q) Bill acceptor canister storage rack (e.g., weight of a bucket) or physically persons independent of the cage keys. Persons authorized to obtain bill situated such that any unnecessary department shall be required to access acceptor canister storage rack keys shall adjustments to it during the weigh stored empty table game drop boxes. be precluded from having simultaneous process would be observed by other (3) The release keys shall be access to bill acceptor canister contents count team members. separately keyed from the contents keys. keys with the exception of the count (5) The weigh scale and weigh scale (4) At least two count team members team. interface (if applicable) shall be tested are required to be present at the time (r) Table game drop box contents by a person or persons independent of count room and other count keys are keys. (1) The physical custody of the the cage, vault, and gaming machine issued for the count. keys needed for accessing stored, full departments and count team at least (5) All duplicate keys shall be table game drop box contents shall quarterly. At least annually, this test maintained in a manner that provides require the involvement of persons from shall be performed by internal audit in the same degree of control as is required at least two separate departments, with accordance with the internal audit for the original keys. Records shall be the exception of the count team. standards. The result of these tests shall maintained for each key duplicated that (2) Access to the table game drop box be documented and signed by the indicate the number of keys made and contents key at other than scheduled person or persons performing the test. destroyed. count times shall require the (6) Logs shall be maintained by the involvement of at least two persons (6) Prior to the gaming machine count, custodian of sensitive keys to document from separate departments, including at least two employees shall verify the authorization of personnel accessing management. The reason for access shall accuracy of the weigh scale with varying keys. be documented with the signatures of weights or with varying amounts of (n) Table game drop box release keys. all participants and observers. previously counted coin for each (1) The table game drop box release keys (3) Only count team members shall be denomination to ensure the scale is shall be maintained by a department allowed access to table game drop box properly calibrated (varying weights/ independent of the pit department. contents keys during the count process. coin from drop to drop is acceptable). (2) Only the person(s) authorized to (s) Bill acceptor canister contents (7) If a mechanical coin counter is remove table game drop boxes from the keys. (1) The physical custody of the used (instead of a weigh scale), the tables shall be allowed access to the keys needed for accessing stored, full Tribal gaming regulatory authority, or table game drop box release keys; bill acceptor canister contents shall the gaming operation as approved by the however, the count team members may require involvement of persons from Tribal gaming regulatory authority, shall have access to the release keys during two separate departments, with the establish and the gaming operation shall the soft count in order to reset the table exception of the count team. comply with procedures that are game drop boxes. (2) Access to the bill acceptor canister equivalent to those described in (3) Persons authorized to remove the contents key at other than scheduled paragraphs (u)(4), (u)(5), and (u)(6) of table game drop boxes shall be count times shall require the this section. precluded from having simultaneous involvement of at least two persons (8) If a coin meter count machine is access to the table game drop box from separate departments, one of used, the count team member shall contents keys and release keys. whom must be a supervisor. The reason record the machine number (4) For situations requiring access to for access shall be documented with the denomination and number of coins in a table game drop box at a time other signatures of all participants and ink on a source document, unless the than the scheduled drop, the date, time, observers. meter machine automatically records and signature of employee signing out/ (3) Only the count team members such information. in the release key must be documented. shall be allowed access to bill acceptor (i) A count team member shall test the (o) Bill acceptor canister release keys. canister contents keys during the count coin meter count machine before the (1) The bill acceptor canister release process. actual count to ascertain if the metering keys shall be maintained by a (t) Emergency drop procedures. device is functioning properly with a department independent of the gaming Emergency drop procedures shall be predetermined number of coins for each machine department. developed by the Tribal gaming denomination. (2) Only the person(s) authorized to regulatory authority, or the gaming (ii) [Reserved] remove bill acceptor canisters from the operation as approved by the Tribal gaming machines shall be allowed gaming regulatory authority. § 542.32 What are the minimum internal access to the release keys. (u) Equipment standards for gaming control standards for internal audit for Tier (3) Persons authorized to remove the machine count. (1) A weigh scale B gaming operations? bill acceptor canisters shall be calibration module shall be secured so (a) Internal audit personnel. (1) For precluded from having simultaneous as to prevent unauthorized access (e.g., Tier B gaming operations, a separate access to the bill acceptor canister prenumbered seal, lock and key, etc.). internal audit department must be contents keys and release keys. (2) A person independent of the cage, maintained. Alternatively, designating (4) For situations requiring access to vault, gaming machine, and count team personnel (who are independent with a bill acceptor canister at a time other functions shall be required to be present respect to the departments/procedures than the scheduled drop, the date, time, whenever the calibration module is being examined) to perform internal
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audit work satisfies the requirements of a sample basis. Cage accountability shall (e) Material exceptions. All material this paragraph. be reconciled to the general ledger; exceptions resulting from internal audit (2) The internal audit personnel shall (ix) Information technology functions, work shall be investigated and resolved report directly to the Tribe, Tribal including review for compliance with with the results of such being gaming regulatory authority, audit information technology standards; documented and retained for five years. committee, or other entity designated by (x) Complimentary service or item, (f) Role of management. (1) Internal the Tribe in accordance with the including but not limited to, procedures audit findings shall be reported to definition of internal audit in § 542.2. whereby complimentary service items management. (b) Audits. (1) Internal audit are issued, authorized, and redeemed; (2) Management shall be required to personnel shall perform audits of all and respond to internal audit findings major gaming areas of the gaming (xi) Any other internal audits as stating corrective measures to be taken operation. The following shall be required by the Tribe, Tribal gaming to avoid recurrence of the audit reviewed at least annually: regulatory authority, audit committee, exception. (i) Bingo, including but not limited to, or other entity designated by the Tribe. (3) Such management responses shall bingo card control, payout procedures, (2) In addition to the observation and be included in the internal audit report and cash reconciliation process; examinations performed under that will be delivered to management, (ii) Pull tabs, including but not paragraph (b)(1) of this section, follow- the Tribe, Tribal gaming regulatory limited to, statistical records, winner up observations and examinations shall authority, audit committee, or other verification, perpetual inventory, and be performed to verify that corrective entity designated by the Tribe. accountability of sales versus inventory; action has been taken regarding all (iii) Card games, including but not instances of noncompliance cited by § 542.33 What are the minimum internal limited to, card games operation, cash internal audit, the independent control standards for surveillance for Tier B gaming operations? exchange procedures, shill transactions, accountant, and/or the Commission. and count procedures; The verification shall be performed (a) The surveillance system shall be (iv) Keno, including but not limited within six (6) months following the date maintained and operated from a staffed to, game write and payout procedures, of notification. surveillance room and shall provide sensitive key location and control, and (3) Whenever possible, internal audit surveillance over gaming areas. a review of keno auditing procedures; observations shall be performed on an (b) The entrance to the surveillance (v) Pari-mutual wagering, including unannounced basis (i.e., without the room shall be located so that it is not write and payout procedures, and pari- employees being forewarned that their readily accessible by either gaming mutual auditing procedures; activities will be observed). operation employees who work (vi) Table games, including but not Additionally, if the independent primarily on the casino floor, or the limited to, fill and credit procedures, pit accountant also performs the internal general public. credit play procedures, rim credit audit function, the accountant shall (c) Access to the surveillance room procedures, soft drop/count procedures perform separate observations of the shall be limited to surveillance and the subsequent transfer of funds, table games/gaming machine drops and personnel, designated employees, and unannounced testing of count room counts to satisfy the internal audit other persons authorized in accordance currency counters and/or currency observation requirements and with the surveillance department interface, location and control over independent accountant tests of controls policy. Such policy shall be approved sensitive keys, the tracing of source as required by the American Institute of by the Tribal gaming regulatory documents to summarized Certified Public Accountants guide. authority. The surveillance department documentation and accounting records, (c) Documentation. (1) Documentation shall maintain a sign-in log of other and reconciliation to restricted copies; (e.g., checklists, programs, reports, etc.) authorized persons entering the (vii) Gaming machines, including but shall be prepared to evidence all surveillance room. not limited to, jackpot payout and internal audit work performed as it (d) Surveillance room equipment gaming machine fill procedures, gaming relates to the requirements in this shall have total override capability over machine drop/count and bill acceptor section, including all instances of all other satellite surveillance drop/count and subsequent transfer of noncompliance. equipment located outside the funds, unannounced testing of weigh (2) The internal audit department surveillance room. scale and weigh scale interface, shall operate with audit programs, (e) The surveillance system shall unannounced testing of count room which, at a minimum, address the include date and time generators that currency counters and/or currency MICS. Additionally, the department possess the capability to display the interface, gaming machine drop cabinet shall properly document the work date and time of recorded events on access, tracing of source documents to performed, the conclusions reached, video and/or digital recordings. The summarized documentation and and the resolution of all exceptions. displayed date and time shall not accounting records, reconciliation to Institute of Internal Auditors standards significantly obstruct the recorded view. restricted copies, location and control are recommended but not required. (f) The surveillance department shall over sensitive keys, compliance with (d) Reports. (1) Reports documenting strive to ensure staff is trained in the use EPROM duplication procedures, and audits performed shall be maintained of the equipment, knowledge of the compliance with MICS procedures for and made available to the Commission games, and house rules. gaming machines that accept currency upon request. (g) Each camera required by the or coin(s) and issue cash-out tickets or (2) Such audit reports shall include standards in this section shall be gaming machines that do not accept the following information: installed in a manner that will prevent currency or coin(s) and do not return (i) Audit objectives; it from being readily obstructed, currency or coin(s); (ii) Audit procedures and scope; tampered with, or disabled by (viii) Cage and credit procedures (iii) Findings and conclusions; customers or employees. including all cage, credit, and collection (iv) Recommendations, if applicable; (h) Each camera required by the procedures, and the reconciliation of and standards in this section shall possess trial balances to physical instruments on (v) Management’s response. the capability of having its picture
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displayed on a monitor and recorded. (2) The surveillance system shall (q) Gaming machines. (1) Except as The surveillance system shall include monitor and record general activities in otherwise provided in paragraphs (q)(2) sufficient numbers of monitors and each keno game area with sufficient and (q)(3) of this section, gaming recorders to simultaneously display and clarity to identify the employees machines offering a payout of more than record multiple gaming and count room performing the different functions. $250,000 shall be monitored and activities, and record the views of all (n) Pari-mutuel. The surveillance recorded by a dedicated camera(s) to dedicated cameras and motion activated system shall monitor and record general provide coverage of: dedicated cameras. activities in the pari-mutuel area, to (i) All customers and employees at the (i) Reasonable effort shall be made to include the ticket writer and cashier gaming machine, and repair each malfunction of surveillance areas, with sufficient clarity to identify (ii) The face of the gaming machine, system equipment required by the the employees performing the different with sufficient clarity to identify the standards in this section within seventy- functions. payout line(s) of the gaming machine. two (72) hours after the malfunction is (o) Table games. (1) Operations with (2) In-house progressive machine. In- discovered. The Tribal gaming four (4) or more table games. Except as house progressive gaming machines regulatory authority shall be notified of otherwise provided in paragraphs (o)(3), offering a base payout amount (jackpot any camera(s) that has malfunctioned (o)(4), and (o)(5) of this section, the reset amount) of more than $100,000 for more than twenty-four (24) hours. surveillance system of gaming shall be monitored and recorded by a (1) In the event of a dedicated camera operations operating four (4) or more dedicated camera(s) to provide coverage malfunction, the gaming operation and/ table games shall provide at a minimum of: or surveillance department shall one (1) pan-tilt-zoom camera per two (2) (i) All customers and employees at the immediately provide alternative camera tables and surveillance must be capable gaming machine; and coverage or other security measures, of taping: (ii) The face of the gaming machine, such as additional supervisory or (i) With sufficient clarity to identify with sufficient clarity to identify the security personnel, to protect the subject customers and dealers; and payout line(s) of the gaming machine. activity. (ii) With sufficient coverage and (3) Wide-area progressive machine. (2) [Reserved] clarity to simultaneously view the table Wide-area progressive gaming machines (j) Bingo. (1) The surveillance system bank and determine the configuration of offering a base payout amount of more shall possess the capability to monitor wagers, card values, and game outcome. than $1.5 million and monitored by an the bingo ball drawing device or random (iii) One (1) dedicated camera per independent vendor utilizing an on-line number generator, which shall be table and one (1) pan-tilt-zoom camera progressive computer system shall be recorded during the course of the draw per four (4) tables may be an acceptable monitored and recorded by a dedicated by a dedicated camera with sufficient alternative procedure to satisfy the camera(s) to provide coverage of: clarity to identify the balls drawn or requirements of this paragraph. (i) All customers and employees at the numbers selected. (2) Operations with three (3) or fewer gaming machine; and (2) The surveillance system shall table games. The surveillance system of (ii) The face of the gaming machine, monitor and record the game board and gaming operations operating three (3) or with sufficient clarity to identify the the activities of the employees fewer table games shall: payout line(s) of the gaming machine. responsible for drawing, calling, and (i) Comply with the requirements of (4) Notwithstanding paragraph (q)(1) entering the balls drawn or numbers paragraph (o)(1) of this section; or of this section, if the gaming machine is selected. (ii) Have one (1) overhead camera at (k) Card games. The surveillance each table. a multi-game machine, the Tribal system shall monitor and record general (3) Craps. All craps tables shall have gaming regulatory authority, or the activities in each card room with two (2) dedicated cross view cameras gaming operation subject to the sufficient clarity to identify the covering both ends of the table. approval of the Tribal gaming regulatory employees performing the different (4) Roulette. All roulette areas shall authority, may develop and implement functions. have one (1) overhead dedicated camera alternative procedures to verify payouts. (l) Progressive card games. (1) covering the roulette wheel and shall (r) Cage and vault. (1) The Progressive card games with a also have one (1) dedicated camera surveillance system shall monitor and progressive jackpot of $25,000 or more covering the play of the table. record a general overview of activities shall be monitored and recorded by (5) Big wheel. All big wheel games occurring in each cage and vault area dedicated cameras that provide coverage shall have one (1) dedicated camera with sufficient clarity to identify of: viewing the wheel. employees within the cage and (i) The table surface, sufficient that (p) Progressive table games. (1) customers and employees at the counter the card values and card suits can be Progressive table games with a areas. clearly identified; progressive jackpot of $25,000 or more (2) Each cashier station shall be (ii) An overall view of the entire table shall be monitored and recorded by equipped with one (1) dedicated with sufficient clarity to identify dedicated cameras that provide coverage overhead camera covering the customers and dealer; and of: transaction area. (iii) A view of the posted jackpot (i) The table surface, sufficient that (3) The surveillance system shall amount. the card values and card suits can be provide an overview of cash (2) [Reserved] clearly identified; transactions. This overview should (m) Keno. (1) The surveillance system (ii) An overall view of the entire table include the customer, the employee, shall possess the capability to monitor with sufficient clarity to identify and the surrounding area. the keno ball-drawing device or random customers and dealer; and (s) Fills and credits. (1) The cage or number generator, which shall be (iii) A view of the progressive meter vault area in which fills and credits are recorded during the course of the draw jackpot amount. If several tables are transacted shall be monitored and by a dedicated camera with sufficient linked to the same progressive jackpot recorded by a dedicated camera or clarity to identify the balls drawn or meter, only one meter need be recorded. motion activated dedicated camera that numbers selected. (2) [Reserved] provides coverage with sufficient clarity
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to identify the chip values and the retention standards required in this during each shift or a gaming operation amounts on the fill and credit slips. section. may utilize a single drop box with (2) Controls provided by a (x) Malfunction and repair log. (1) separate openings and compartments for computerized fill and credit system may Surveillance personnel shall maintain a each shift; and be deemed an adequate alternative to log or alternative procedure approved (iii) Upon removal from the tables, viewing the fill and credit slips. by the Tribal gaming regulatory table game drop boxes shall be (t) Currency and coin. (1) The authority that documents each transported directly to the count room surveillance system shall monitor and malfunction and repair of the or other equivalently secure area with record with sufficient clarity all areas surveillance system as defined in this comparable controls and locked in a where currency or coin may be stored or section. secure manner until the count takes counted. (2) The log shall state the time, date, place. (2) The surveillance system shall and nature of each malfunction, the (3) If drop boxes are not placed on all provide for: efforts expended to repair the tables, then the pit department shall (i) Coverage of scales shall be malfunction, and the date of each effort, document which tables were open sufficiently clear to view any attempted the reasons for any delays in repairing during the shift. manipulation of the recorded data. the malfunction, the date the (4) The transporting of table game (ii) Monitoring and recording of the malfunction is repaired, and where drop boxes shall be performed by a table game drop box storage rack or area applicable, any alternative security minimum of two persons, at least one of by either a dedicated camera or a measures that were taken. whom is independent of the pit shift motion-detector activated camera. (y) Surveillance log. (1) Surveillance being dropped. (iii) Monitoring and recording of all personnel shall maintain a log of all (5) All table game drop boxes shall be areas where coin may be stored or surveillance activities. posted with a number corresponding to counted, including the hard count room, (2) Such log shall be maintained by a permanent number on the gaming all doors to the hard count room, all surveillance room personnel and shall table and marked to indicate game, table scales and wrapping machines, and all be stored securely within the number, and shift. areas where uncounted coin may be surveillance department. (6) Surveillance shall be notified (3) At a minimum, the following stored during the drop and count when the drop is to begin so that information shall be recorded in a process. surveillance may monitor the activities. surveillance log: (c) Soft count room personnel. (1) The (iv) Monitoring and recording of soft (i) Date; count room, including all doors to the (ii) Time commenced and terminated; table game soft count and the gaming room, all table game drop boxes, safes, (iii) Activity observed or performed; machine bill acceptor count shall be and counting surfaces, and all count and performed by a minimum of three team personnel. The counting surface (iv) The name or license credential employees. area must be continuously monitored number of each person who initiates, (2) Count room personnel shall not be and recorded by a dedicated camera performs, or supervises the surveillance. allowed to exit or enter the count room during the soft count. (4) Surveillance personnel shall also during the count except for emergencies (v) Monitoring and recording of all record a summary of the results of the or scheduled breaks. At no time during areas where currency is sorted, stacked, surveillance of any suspicious activity. the count, shall there be fewer than counted, verified, or stored during the This summary may be maintained in a three employees in the count room until soft count process. separate log. the drop proceeds have been accepted (u) Change booths. The surveillance into cage/vault accountability. system shall monitor and record a § 542.40 What is a Tier C gaming Surveillance shall be notified whenever general overview of the activities operation? count room personnel exit or enter the occurring in each gaming machine A Tier C gaming operation is one with count room during the count. change booth. annual gross gaming revenues of more (3) Count team members shall be (v) Video recording and/or digital than $15 million. rotated on a routine basis such that the record retention. (1) All video § 542.41 What are the minimum internal count team is not consistently the same recordings and/or digital records of control standards for drop and count for three persons more than four (4) days coverage provided by the dedicated Tier C gaming operations? per week. This standard shall not apply cameras or motion-activated dedicated (a) Computer applications. For any to gaming operations that utilize a count cameras required by the standards in computer applications utilized, team of more than three persons. this section shall be retained for a alternate documentation and/or (4) The count team shall be minimum of seven (7) days. procedures that provide at least the independent of transactions being (2) Recordings involving suspected or level of control described by the reviewed and counted. The count team confirmed gaming crimes, unlawful standards in this section, as approved shall be independent of the cage/vault activity, or detentions by security by the Tribal gaming regulatory departments, however, an accounting personnel, must be retained for a authority, will be acceptable. representative may be used if there is an minimum of thirty (30) days. (b) Table game drop standards. independent audit of all soft count (3) Duly authenticated copies of video (1) The setting out of empty table documentation. recordings and/or digital records shall game drop boxes and the drop shall be (d) Table game soft count standards. be provided to the Commission upon a continuous process. (1) The table game soft count shall be request. (2) At the end of each shift: performed in a soft count room or other (w) Video library log. A video library (i) All locked table game drop boxes equivalently secure area with log, or comparable alternative procedure shall be removed from the tables by a comparable controls. approved by the Tribal gaming person independent of the pit shift (2) Access to the count room during regulatory authority, shall be being dropped; the count shall be restricted to members maintained to demonstrate compliance (ii) A separate drop box shall be of the drop and count teams, with the with the storage, identification, and placed on each table opened at any time exception of authorized observers,
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supervisors for resolution of problems, (ii) If a computerized system is used, who is independent of the gaming and authorized maintenance personnel. accounting personnel can trace the machine department. (3) If counts from various revenue opening/closing table and marker (5) All bill acceptor canisters shall be centers occur simultaneously in the inventory forms to the count sheet. posted with a number corresponding to count room, procedures shall be in Discrepancies shall be investigated with a permanent number on the gaming effect that prevent the commingling of the findings documented and machine. funds from different revenue centers. maintained for inspection. (f) Gaming machine bill acceptor (4) The table game drop boxes shall be (11) The count sheet shall be count standards. (1) The gaming individually emptied and counted in reconciled to the total drop by a count machine bill acceptor count shall be such a manner to prevent the team member who shall not function as performed in a soft count room or other commingling of funds between boxes the sole recorder. equivalently secure area with until the count of the box has been (12) All members of the count team comparable controls. recorded. shall sign the count document or a (2) Access to the count room during (i) The count of each box shall be summary report to attest to their the count shall be restricted to members recorded in ink or other permanent form participation in the count. of the drop and count teams, with the of recordation. (13) All drop proceeds and cash exception of authorized observers, (ii) A second count shall be performed equivalents that were counted shall be supervisors for resolution of problems, by an employee on the count team who turned over to the cage or vault cashier and authorized maintenance personnel. did not perform the initial count. (who shall be independent of the count (3) If counts from various revenue (iii) Corrections to information team) or to an authorized person/ centers occur simultaneously in the originally recorded by the count team employee independent of the revenue count room, procedures shall be in on soft count documentation shall be generation and the count process for effect that prevent the commingling of made by drawing a single line through verification. Such person shall certify by funds from different revenue centers. the error, writing the correct figure signature as to the accuracy of the drop (4) The bill acceptor canisters shall be above the original figure, and then proceeds delivered and received. individually emptied and counted in obtaining the initials of at least two (14) The count sheet, with all such a manner to prevent the count team members who verified the supporting documents, shall be commingling of funds between canisters change. delivered to the accounting department until the count of the canister has been (5) If currency counters are utilized by a count team member or a person recorded. (i) The count of each canister shall be and the count room table is used only independent of the cashiers department. recorded in ink or other permanent form to empty boxes and sort/stack contents, Alternatively, it may be adequately of recordation. a count team member shall be able to secured (e.g., locked container to which (ii) A second count shall be performed observe the loading and unloading of all only accounting personnel can gain by an employee on the count team who currency at the currency counter, access) until retrieved by the accounting did not perform the initial count. including rejected currency. department. (6) Table game drop boxes, when (iii) Corrections to information (15) Access to stored, full table game empty, shall be shown to another originally recorded by the count team drop boxes shall be restricted to member of the count team, or to another on soft count documentation shall be authorized members of the drop and person who is observing the count, or to made by drawing a single line through count teams. surveillance, provided the count is the error, writing the correct figure (e) Gaming machine bill acceptor monitored in its entirety by a person above the original figure, and then drop standards. (1) A minimum of three independent of the count. obtaining the initials of at least two (7) Orders for fill/credit (if applicable) employees shall be involved in the count team members who verified the shall be matched to the fill/credit slips. removal of the gaming machine drop, at change. Fills and credits shall be traced to or least one of who is independent of the (5) If currency counters are utilized recorded on the count sheet. gaming machine department. and the count room table is used only (8) Pit marker issue and payment slips (2) All bill acceptor canisters shall be to empty canisters and sort/stack (if applicable) removed from the table removed only at the time previously contents, a count team member shall be game drop boxes shall either be: designated by the gaming operation and able to observe the loading and (i) Traced to or recorded on the count reported to the Tribal gaming regulatory unloading of all currency at the sheet by the count team; or authority, except for emergency drops. currency counter, including rejected (ii) Totaled by shift and traced to the (3) Surveillance shall be notified currency. totals documented by the computerized when the drop is to begin so that (6) Canisters, when empty, shall be system. Accounting personnel shall surveillance may monitor the activities. shown to another member of the count verify the issue/payment slip for each (4) The bill acceptor canisters shall be team, or to another person who is table is accurate. removed by a person independent of the observing the count, or to surveillance, (9) Foreign currency exchange forms gaming machine department then provided that the count is monitored in (if applicable) removed from the table transported directly to the count room its entirety by a person independent of game drop boxes shall be reviewed for or other equivalently secure area with the count. the proper daily exchange rate and the comparable controls and locked in a (7) The count sheet shall be conversion amount shall be recomputed secure manner until the count takes reconciled to the total drop by a count by the count team. Alternatively, this place. team member who shall not function as may be performed by accounting/ (i) Security shall be provided over the the sole recorder. auditing employees. bill acceptor canisters removed from the (8) All members of the count team (10) The opening/closing table and gaming machines and awaiting transport shall sign the count document or a marker inventory forms (if applicable) to the count room. summary report to attest to their shall either be: (ii) The transporting of bill acceptor participation in the count. (i) Examined and traced to or canisters shall be performed by a (9) All drop proceeds and cash recorded on the count sheet; or minimum of two persons, at least one of equivalents that were counted shall be
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turned over to the cage or vault cashier gaming revenue, shall satisfy the (i) Gaming machine coin count and (who shall be independent of the count requirements of this paragraph. wrap standards. (1) Coins shall include team) or to an authorized person/ (ii) [Reserved] tokens. employee independent of the revenue (6) Each drop bucket in use shall be: (2) The gaming machine coin count generation and the count process for (i) Housed in a locked compartment and wrap shall be performed in a count verification. Such person shall certify by separate from any other compartment of room or other equivalently secure area signature as to the accuracy of the drop the gaming machine and keyed with comparable controls. proceeds delivered and received. differently than other gaming machine (i) Alternatively, an on-the-floor drop (10) The count sheet, with all compartments; and system utilizing a mobile scale shall supporting documents, shall be (ii) Identifiable to the gaming machine satisfy the requirements of this delivered to the accounting department from which it is removed. If the gaming paragraph, subject to the following by a count team member or a person machine is identified with a removable conditions: independent of the cashiers department. tag that is placed in the bucket, the tag (A) The gaming operation shall utilize Alternatively, it may be adequately shall be placed on top of the bucket and maintain an effective on-line secured (e.g., locked container to which when it is collected. gaming machine monitoring system, as only accounting personnel can gain (7) Each gaming machine shall have described in § 542.13(m)(3); access) until retrieved by the accounting drop buckets into which coins or tokens (B) Components of the on-the-floor department. that are retained by the gaming machine drop system shall include, but not be (11) Access to stored bill acceptor are collected. Drop bucket contents shall limited to, a weigh scale, a laptop canisters, full or empty, shall be not be used to make change or pay computer through which weigh/count restricted to: hand-paid payouts. applications are operated, a security (i) Authorized members of the drop (8) The collection procedures may camera available for the mobile scale and count teams; and include procedures for dropping gaming system, and a VCR to be housed within (ii) Authorized personnel in an machines that have trays instead of drop the video compartment of the mobile emergency for the resolution of a buckets. scale. The system may include a mule problem. (h) Hard count room personnel. (1) cart used for mobile weigh scale system (12) All bill acceptor canisters shall be The weigh/count shall be performed by locomotion. posted with a number corresponding to a minimum of three employees. (C) The gaming operation must obtain a permanent number on the gaming (2) At no time during the weigh/count the security camera available with the machine. shall there be fewer than three system, and this camera must be added (g) Gaming machine coin drop employees in the count room until the in such a way as to eliminate tampering. standards. (1) A minimum of three drop proceeds have been accepted into (D) Prior to the drop, the drop/count employees shall be involved in the cage/vault accountability. Surveillance team shall ensure the scale batteries are removal of the gaming machine drop, at shall be notified whenever count room charged; least one of who is independent of the personnel exit or enter the count room (E) Prior to the drop, a videotape shall gaming machine department. during the count. be inserted into the VCR used to record (2) All drop buckets shall be removed (i) If the gaming machine count is the drop in conjunction with the only at the time previously designated conducted with a continuous security camera system and the VCR by the gaming operation and reported to mechanical count meter that is not reset shall be activated; the Tribal gaming regulatory authority, during the count and is verified in (F) The weigh scale test shall be except for emergency drops. writing by at least three employees at performed prior to removing the unit (3) Surveillance shall be notified the start and end of each denomination from the hard count room for the start when the drop is to begin in order that count, then one employee may perform of the weigh/drop/count; surveillance may monitor the activities. the wrap. (G) Surveillance shall be notified (4) Security shall be provided over the (ii) [Reserved] when the weigh/drop/count begins and buckets removed from the gaming (3) Count team members shall be shall be capable of monitoring the entire machine drop cabinets and awaiting rotated on a routine basis such that the process; transport to the count room. count team is not consistently the same (H) An observer independent of the (5) As each machine is opened, the three persons more than four (4) days weigh/drop/count teams (independent contents shall be tagged with its per week. This standard shall not apply observer) shall remain by the weigh respective machine number if the to gaming operations that utilize a count scale at all times and shall observe the bucket is not permanently marked with team of more than three persons. entire weigh/drop/count process; the machine number. The contents shall (4) The count team shall be (I) Physical custody of the key(s) be transported directly to the area independent of transactions being needed to access the laptop and video designated for the counting of such drop reviewed and counted. The count team compartment shall require the proceeds. If more than one trip is shall be independent of the cage/vault involvement of two persons, one of required to remove the contents of the departments, unless they are non- whom is independent of the drop and machines, the filled carts of coins shall supervisory gaming machine employees count team; be securely locked in the room designed and perform the laborer function only (J) The mule key (if applicable), the for counting or in another equivalently (A non-supervisory gaming machine laptop and video compartment keys, secure area with comparable controls. employee is defined as a person below and the remote control for the VCR shall There shall be a locked covering on any the level of gaming machine shift be maintained by a department carts in which the drop route includes supervisor). A cage cashier may be used independent of the gaming machine passage out of doors. if this person is not allowed to perform department. The appropriate personnel (i) Alternatively, a smart bucket the recording function. An accounting shall sign out these keys; system that electronically identifies and representative may be used if there is an (K) A person independent of the tracks the gaming machine number, and independent audit of all count weigh/drop/count teams shall be facilitates the proper recognition of documentation. required to accompany these keys while
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they are checked out, and observe each initials of at least two count team coins leave the property. Any variances time the laptop compartment is opened; members who verified the change. shall be documented. (L) The laptop access panel shall not (A) If a weigh scale interface is used, (14) Variances. Large (by be opened outside the hard count room, corrections to gaming machine count denomination, either $1,000 or 2% of except in instances when the laptop data shall be made using either of the the drop, whichever is less) or unusual must be rebooted as a result of a crash, following: (e.g., zero for weigh/count or patterned lock up, or other situation requiring (1) Drawing a single line through the for all counts) variances between the immediate corrective action; error on the gaming machine document, weigh/count and wrap shall be (M) User access to the system shall be writing the correct figure above the investigated by management personnel limited to those employees required to original figure, and then obtaining the independent of the gaming machine have full or limited access to complete initials of at least two count team department, count team, and the cage/ the weigh/drop/count; and employees. If this procedure is used, an vault functions on a timely basis. The (N) When the weigh/drop/count is employee independent of the gaming results of such investigation shall be completed, the independent observer machine department and count team documented, maintained for inspection, shall access the laptop compartment, shall enter the correct figure into the and provided to the Tribal gaming end the recording session, eject the computer system prior to the generation regulatory authority upon request. videotape, and deliver the videotape to of related gaming machine reports; or (j) Security of the count room surveillance. (2) During the count process, correct inventory during the gaming machine (ii) [Reserved] the error in the computer system and coin count and wrap. (1) If the count (3) Access to the count room during enter the passwords of at least two room serves as a coin room and coin the count shall be restricted to members count team employees. If this procedure room inventory is not secured so as to of the drop and count teams, with the is used, an exception report shall be preclude access by the count team, then exception of authorized observers, generated by the computer system the following standards shall apply: supervisors for resolution of problems, identifying the gaming machine (i) At the commencement of the and authorized maintenance personnel. number, the error, the correction, and gaming machine count the following (4) If counts from various revenue the count team employees attesting to requirements shall be met: centers occur simultaneously in the the correction. (A) The coin room inventory shall be count room, procedures shall be in (B) [Reserved] counted by at least two employees, one effect that prevent the commingling of (7) If applicable, the weight shall be of whom is a member of the count team funds from different revenue centers. converted to dollar amounts before the and the other is independent of the (5) The following functions shall be reconciliation of the weigh to the wrap. weigh/count and wrap procedures; performed in the counting of the gaming (8) If a coin meter is used, a count (B) The count in paragraph (j)(1)(i)(A) machine drop: team member shall convert the coin of this section shall be recorded on an (i) Recorder function, which involves count for each denomination into appropriate inventory form; the recording of the gaming machine dollars and shall enter the results on a (ii) Upon completion of the wrap of count; and summary sheet. the gaming machine drop: (ii) Count team supervisor function, (9) The recorder and at least one other (A) At least two members of the count which involves the control of the count team member shall sign the weigh team (wrap team), independently from gaming machine weigh and wrap tape and the gaming machine count each other, shall count the ending coin process. The supervisor shall not document attesting to the accuracy of room inventory; perform the initial recording of the the weigh/count. (B) The counts in paragraph weigh/count unless a weigh scale with (10) All members of the count team (j)(1)(ii)(A) of this section shall be a printer is used. shall sign the count document or a recorded on a summary report(s) that (6) The gaming machine drop shall be summary report to attest to their evidences the calculation of the final counted, wrapped, and reconciled in participation in the count. wrap by subtracting the beginning such a manner to prevent the (11) All drop proceeds and cash inventory from the sum of the ending commingling of gaming machine drop equivalents that were counted shall be inventory and transfers in and out of the coin with coin (for each denomination) turned over to the cage or vault cashier coin room; from the next gaming machine drop (who shall be independent of the count (C) The same count team members until the count of the gaming machine team) or to an authorized person/ shall compare the calculated wrap to the drop has been recorded. If the coins are employee independent of the revenue weigh/count, recording the comparison not wrapped immediately after being generation and the count process for and noting any variances on the weighed or counted, they shall be verification. Such person shall certify by summary report; secured and not commingled with other signature as to the accuracy of the drop (D) A member of the cage/vault coin. proceeds delivered and received. department shall count the ending coin (i) The amount of the gaming machine (12) All gaming machine count and room inventory by denomination and drop from each machine shall be wrap documentation, including any shall reconcile it to the beginning recorded in ink or other permanent form applicable computer storage media, inventory, wrap, transfers, and weigh/ of recordation on a gaming machine shall be delivered to the accounting count; and count document by the recorder or department by a count team member or (E) At the conclusion of the mechanically printed by the weigh a person independent of the cashier’s reconciliation, at least two count/wrap scale. department. Alternatively, it may be team members and the verifying (ii) Corrections to information adequately secured (e.g., locked employee shall sign the summary originally recorded by the count team container to which only accounting report(s) attesting to its accuracy. on gaming machine count personnel can gain access) until (2) If the count room is segregated documentation shall be made by retrieved by the accounting department. from the coin room, or if the coin room drawing a single line through the error, (13) If the coins are transported off the is used as a count room and the coin writing the correct figure above the property, a second (alternative) count room inventory is secured to preclude original figure, and then obtaining the procedure shall be performed before the access by the count team, all of the
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following requirements shall be observes the person throughout the (4) For situations requiring access to completed, at the conclusion of the period the keys are checked out. a bill acceptor canister at a time other count: (m) Table game drop box key control than the scheduled drop, the date, time, (i) At least two members of the count/ standards. (1) Procedures shall be and signature of employee signing out/ wrap team shall count the final wrapped developed and implemented to insure in the release key must be documented. gaming machine drop independently that unauthorized access to empty table (p) Table game drop box storage rack from each other; game drop boxes shall not occur from keys. (1) A person independent of the (ii) The counts shall be recorded on a the time the boxes leave the storage pit department shall be required to summary report; racks until they are placed on the tables. accompany the table game drop box (iii) The same count team members (2) The involvement of at least two storage rack keys and observe each time (or the accounting department) shall persons independent of the cage table game drop boxes are removed from compare the final wrap to the weigh/ department shall be required to access or placed in storage racks. count, recording the comparison and stored empty table game drop boxes. (2) Persons authorized to obtain table noting any variances on the summary (3) The release keys shall be game drop box storage rack keys shall be report; separately keyed from the contents keys. precluded from having simultaneous (iv) A member of the cage/vault (4) At least three (two for table game access to table game drop box contents department shall count the wrapped drop box keys in operations with three keys with the exception of the count gaming machine drop by denomination tables or fewer) count team members are team. and reconcile it to the weigh/count; required to be present at the time count (q) Bill acceptor canister storage rack (v) At the conclusion of the room and other count keys are issued keys. (1) A person independent of the reconciliation, at least two count team for the count. gaming machine department shall be members and the cage/vault employee (5) All duplicate keys shall be required to accompany the bill acceptor shall sign the summary report attesting maintained in a manner that provides canister storage rack keys and observe to its accuracy; and the same degree of control as is required each time canisters are removed from or (vi) The wrapped coins (exclusive of for the original keys. Records shall be placed in storage racks. proper transfers) shall be transported to maintained for each key duplicated that (2) Persons authorized to obtain bill the cage, vault or coin vault after the indicate the number of keys made and acceptor canister storage rack keys shall reconciliation of the weigh/count to the destroyed. be precluded from having simultaneous wrap. (6) Logs shall be maintained by the access to bill acceptor canister contents (k) Transfers during the gaming keys with the exception of the count machine coin count and wrap. (1) custodian of sensitive keys to document authorization of personnel accessing team. Transfers may be permitted during the (r) Table game drop box contents keys. count and wrap only if permitted under keys. (1) The physical custody of the (n) Table game drop box release keys. the internal control standards approved keys needed for accessing stored, full (1) The table game drop box release keys by the Tribal gaming regulatory table game drop box contents shall shall be maintained by a department authority. require the involvement of persons from independent of the pit department. (2) Each transfer shall be recorded on at least two separate departments, with a separate multi-part form with a (2) Only the person(s) authorized to the exception of the count team. preprinted or concurrently-printed form remove table game drop boxes from the (2) Access to the table game drop box number (used solely for gaming tables shall be allowed access to the contents key at other than scheduled machine count transfers) that shall be table game drop box release keys; count times shall require the subsequently reconciled by the however, the count team members may involvement of at least three persons accounting department to ensure the have access to the release keys during from separate departments, including accuracy of the reconciled gaming the soft count in order to reset the table management. The reason for access shall machine drop. game drop boxes. be documented with the signatures of (3) Each transfer must be counted and (3) Persons authorized to remove the all participants and observers. signed for by at least two members of table game drop boxes shall be (3) Only count team members shall be the count team and by a person precluded from having simultaneous allowed access to table game drop box independent of the count team who is access to the table game drop box content keys during the count process. responsible for authorizing the transfer. contents keys and release keys. (s) Bill acceptor canister contents (l) Gaming machine drop key control (4) For situations requiring access to keys. (1) The physical custody of the standards. (1) Gaming machine coin a table game drop box at a time other keys needed for accessing stored, full drop cabinet keys, including duplicates, than the scheduled drop, the date, time, bill acceptor canister contents shall shall be maintained by a department and signature of employee signing out/ require involvement of persons from independent of the gaming machine in the release key must be documented. two separate departments, with the department. (o) Bill acceptor canister release keys. exception of the count team. (2) The physical custody of the keys (1) The bill acceptor canister release (2) Access to the bill acceptor canister needed to access gaming machine coin keys shall be maintained by a contents key at other than scheduled drop cabinets, including duplicates, department independent of the gaming count times shall require the shall require the involvement of two machine department. involvement of at least three persons persons, one of whom is independent of (2) Only the person(s) authorized to from separate departments, one of the gaming machine department. remove bill acceptor canisters from the whom must be a supervisor. The reason (3) Two employees (separate from key gaming machines shall be allowed for access shall be documented with the custodian) shall be required to access to the release keys. signatures of all participants and accompany such keys while checked (3) Persons authorized to remove the observers. out and observe each time gaming bill acceptor canisters shall be (3) Only the count team members machine drop cabinets are accessed, precluded from having simultaneous shall be allowed access to bill acceptor unless surveillance is notified each time access to the bill acceptor canister canister contents keys during the count keys are checked out and surveillance contents keys and release keys. process.
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(t) Emergency drop procedures. predetermined number of coins for each over sensitive keys, compliance with Emergency drop procedures shall be denomination. EPROM duplication procedures, and developed by the Tribal gaming (ii) [Reserved] compliance with MICS procedures for regulatory authority, or the gaming gaming machines that accept currency operation as approved by the Tribal § 542.42 What are the minimum internal or coin(s) and issue cash-out tickets or control standards for internal audit for Tier gaming regulatory authority. C gaming operations? gaming machines that do not accept (u) Equipment standards for gaming currency or coin(s) and do not return machine count. (1) A weigh scale (a) Internal audit personnel. (1) For currency or coin(s); calibration module shall be secured so Tier C gaming operations, a separate (viii) Cage and credit procedures as to prevent unauthorized access (e.g., internal audit department shall be including all cage, credit, and collection prenumbered seal, lock and key, etc.). maintained whose primary function is procedures, and the reconciliation of (2) A person independent of the cage, performing internal audit work and that trial balances to physical instruments on vault, gaming machine, and count team is independent with respect to the a sample basis. Cage accountability shall functions shall be required to be present departments subject to audit. be reconciled to the general ledger; whenever the calibration module is (2) The internal audit personnel shall (ix) Information technology functions, accessed. Such access shall be report directly to the Tribe, Tribal including review for compliance with documented and maintained. gaming regulatory authority, audit information technology standards; (3) If a weigh scale interface is used, committee, or other entity designated by (x) Complimentary service or item, it shall be adequately restricted so as to the Tribe in accordance with the including but not limited to, procedures prevent unauthorized access definition of internal audit in § 542.2. whereby complimentary service items (passwords, keys, etc.). (b) Audits. (1) Internal audit are issued, authorized, and redeemed; (4) If the weigh scale has a zero personnel shall perform audits of all and adjustment mechanism, it shall be major gaming areas of the gaming (xi) Any other internal audits as physically limited to minor adjustments operation. The following shall be required by the Tribe, Tribal gaming (e.g., weight of a bucket) or physically reviewed at least annually: regulatory authority, audit committee, situated such that any unnecessary (i) Bingo, including but not limited to, or other entity designated by the Tribe. adjustments to it during the weigh bingo card control, payout procedures, (2) In addition to the observation and process would be observed by other and cash reconciliation process; examinations performed under count team members. (ii) Pull tabs, including but not paragraph (b)(1) of this section, follow- (5) The weigh scale and weigh scale limited to, statistical records, winner up observations and examinations shall interface (if applicable) shall be tested verification, perpetual inventory, and be performed to verify that corrective by a person or persons independent of accountability of sales versus inventory; action has been taken regarding all the cage, vault, and gaming machine (iii) Card games, including but not instances of noncompliance cited by departments and count team at least limited to, card games operation, cash internal audit, the independent quarterly. At least annually, this test exchange procedures, shill transactions, accountant, and/or the Commission. shall be performed by internal audit in and count procedures; The verification shall be performed accordance with the internal audit (iv) Keno, including but not limited within six (6) months following the date standards. The result of these tests shall to, game write and payout procedures, of notification. be documented and signed by the sensitive key location and control, and (3) Whenever possible, internal audit person or persons performing the test. a review of keno auditing procedures; observations shall be performed on an (6) Prior to the gaming machine count, (v) Pari-mutual wagering, including unannounced basis (i.e., without the at least two employees shall verify the write and payout procedures, and pari- employees being forewarned that their accuracy of the weigh scale with varying mutual auditing procedures; activities will be observed). weights or with varying amounts of (vi) Table games, including but not Additionally, if the independent previously counted coin for each limited to, fill and credit procedures, pit accountant also performs the internal denomination to ensure the scale is credit play procedures, rim credit audit function, the accountant shall properly calibrated (varying weights/ procedures, soft drop/count procedures perform separate observations of the coin from drop to drop is acceptable). and the subsequent transfer of funds, table games/gaming machine drops and (7) If a mechanical coin counter is unannounced testing of count room counts to satisfy the internal audit used (instead of a weigh scale), the currency counters and/or currency observation requirements and Tribal gaming regulatory authority, or interface, location and control over independent accountant tests of controls the gaming operation as approved by the sensitive keys, the tracing of source as required by the American Institute of Tribal gaming regulatory authority, shall documents to summarized Certified Public Accountants guide. establish and the gaming operation shall documentation and accounting records, (c) Documentation. (1) Documentation comply with procedures that are and reconciliation to restricted copies; (e.g., checklists, programs, reports, etc.) equivalent to those described in (vii) Gaming machines, including but shall be prepared to evidence all paragraphs (u)(4), (u)(5), and (u)(6) of not limited to, jackpot payout and internal audit work performed as it this section. gaming machine fill procedures, gaming relates to the requirements in this (8) If a coin meter count machine is machine drop/count and bill acceptor section, including all instances of used, the count team member shall drop/count and subsequent transfer of noncompliance. record the machine number funds, unannounced testing of weigh (2) The internal audit department denomination and number of coins in scale and weigh scale interface, shall operate with audit programs, ink on a source document, unless the unannounced testing of count room which, at a minimum, address the meter machine automatically records currency counters and/or currency MICS. Additionally, the department such information. interface, gaming machine drop cabinet shall properly document the work (i) A count team member shall test the access, tracing of source documents to performed, the conclusions reached, coin meter count machine before the summarized documentation and and the resolution of all exceptions. actual count to ascertain if the metering accounting records, reconciliation to Institute of Internal Auditors standards device is functioning properly with a restricted copies, location and control are recommended but not required.
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(d) Reports. (1) Reports documenting all areas covered by dedicated cameras. employees performing the different audits performed shall be maintained Auxiliary or backup power sources such functions. and made available to the Commission as a UPS System, backup generator, or (m) Progressive card games. (1) upon request. an alternate utility supplier, satisfy this Progressive card games with a (2) Such audit reports shall include requirement. progressive jackpot of $25,000 or more the following information: (f) The surveillance system shall shall be monitored and recorded by (i) Audit objectives; include date and time generators that dedicated cameras that provide coverage (ii) Audit procedures and scope; possess the capability to display the of: (iii) Findings and conclusions; date and time of recorded events on (i) The table surface, sufficient that (iv) Recommendations, if applicable; video and/or digital recordings. The the card values and card suits can be and displayed date and time shall not clearly identified; (v) Management’s response. significantly obstruct the recorded view. (ii) An overall view of the entire table (e) Material exceptions. All material (g) The surveillance department shall with sufficient clarity to identify exceptions resulting from internal audit strive to ensure staff is trained in the use customers and dealer; and work shall be investigated and resolved of the equipment, knowledge of the (iii) A view of the posted jackpot with the results of such being games, and house rules. amount. documented and retained for five years. (h) Each camera required by the (2) [Reserved] (f) Role of management. (1) Internal standards in this section shall be (n) Keno. (1) The surveillance system audit findings shall be reported to installed in a manner that will prevent shall possess the capability to monitor management. it from being readily obstructed, the keno ball-drawing device or random (2) Management shall be required to tampered with, or disabled by number generator, which shall be respond to internal audit findings customers or employees. recorded during the course of the draw stating corrective measures to be taken (i) Each camera required by the by a dedicated camera with sufficient to avoid recurrence of the audit standards in this section shall possess clarity to identify the balls drawn or exception. the capability of having its picture numbers selected. (3) Such management responses shall displayed on a monitor and recorded. (2) The surveillance system shall be included in the internal audit report The surveillance system shall include monitor and record general activities in that will be delivered to management, sufficient numbers of monitors and each keno game area with sufficient the Tribe, Tribal gaming regulatory recorders to simultaneously display and clarity to identify the employees authority, audit committee, or other record multiple gaming and count room performing the different functions. entity designated by the Tribe. activities, and record the views of all (o) Pari-mutuel. The surveillance dedicated cameras and motion activated system shall monitor and record general § 542.43 What are the minimum internal dedicated cameras. activities in the pari-mutuel area, to control standards for surveillance for a Tier (j) Reasonable effort shall be made to include the ticket writer and cashier C gaming operation? repair each malfunction of surveillance areas, with sufficient clarity to identify (a) The surveillance system shall be system equipment required by the the employees performing the different maintained and operated from a staffed standards in this section within seventy- functions. surveillance room and shall provide two (72) hours after the malfunction is (p) Table games. (1) Operations with surveillance over gaming areas. discovered. The Tribal gaming four (4) or more table games. Except as (b) The entrance to the surveillance regulatory authority shall be notified of otherwise provided in paragraphs (p)(3), room shall be located so that it is not any camera(s) that has malfunctioned (p)(4), and (p)(5) of this section, the readily accessible by either gaming for more than twenty-four (24) hours. surveillance system of gaming operation employees who work (1) In the event of a dedicated camera operations operating four (4) or more primarily on the casino floor, or the malfunction, the gaming operation and/ table games shall provide at a minimum general public. or the surveillance department shall one (1) pan-tilt-zoom camera per two (2) (c) Access to the surveillance room immediately provide alternative camera tables and surveillance must be capable shall be limited to surveillance coverage or other security measures, of taping: personnel, designated employees, and such as additional supervisory or (i) With sufficient clarity to identify other persons authorized in accordance security personnel, to protect the subject customers and dealers; and with the surveillance department activity. (ii) With sufficient coverage and policy. Such policy shall be approved (2) [Reserved] clarity to simultaneously view the table by the Tribal gaming regulatory (k) Bingo. (1) The surveillance system bank and determine the configuration of authority. The surveillance department shall possess the capability to monitor wagers, card values, and game outcome. shall maintain a sign-in log of other the bingo ball drawing device or random (iii) One (1) dedicated camera per authorized persons entering the number generator, which shall be table and one (1) pan-tilt-zoom camera surveillance room. recorded during the course of the draw per four (4) tables may be an acceptable (d) Surveillance room equipment by a dedicated camera with sufficient alternative procedure to satisfy the shall have total override capability over clarity to identify the balls drawn or requirements of this paragraph. all other satellite surveillance numbers selected. (2) Operations with three (3) or fewer equipment located outside the (2) The surveillance system shall table games. The surveillance system of surveillance room. monitor and record the game board and gaming operations operating three (3) or (e) In the event of power loss to the the activities of the employees fewer table games shall: surveillance system, an auxiliary or responsible for drawing, calling, and (i) Comply with the requirements of backup power source shall be available entering the balls drawn or numbers paragraph (p)(1) of this section; or and capable of providing immediate selected. (ii) Have one (1) overhead camera at restoration of power to all elements of (l) Card games. The surveillance each table. the surveillance system that enable system shall monitor and record general (3) Craps. All craps tables shall have surveillance personnel to observe the activities in each card room with two (2) dedicated cross view cameras table games remaining open for play and sufficient clarity to identify the covering both ends of the table.
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(4) Roulette. All roulette areas shall (s) Cage and vault. (1) The occurring in each gaming machine have one (1) overhead dedicated camera surveillance system shall monitor and change booth. covering the roulette wheel and shall record a general overview of activities (w) Video recording and/or digital also have one (1) dedicated camera occurring in each cage and vault area record retention. covering the play of the table. with sufficient clarity to identify (1) All video recordings and/or digital (5) Big wheel. All big wheel games employees within the cage and records of coverage provided by the shall have one (1) dedicated camera customers and employees at the counter dedicated cameras or motion-activated viewing the wheel. areas. dedicated cameras required by the (q) Progressive table games. (1) (2) Each cashier station shall be standards in this section shall be Progressive table games with a equipped with one (1) dedicated retained for a minimum of seven (7) progressive jackpot of $25,000 or more overhead camera covering the days. shall be monitored and recorded by transaction area. (2) Recordings involving suspected or dedicated cameras that provide coverage (3) The surveillance system shall confirmed gaming crimes, unlawful of: provide an overview of cash activity, or detentions by security (i) The table surface, sufficient that transactions. This overview should the card values and card suits can be personnel, must be retained for a include the customer, the employee, minimum of thirty (30) days. clearly identified; and the surrounding area. (ii) An overall view of the entire table (3) Duly authenticated copies of video (t) Fills and credits. (1) The cage or with sufficient clarity to identify recordings and/or digital records shall vault area in which fills and credits are customers and dealer; and be provided to the Commission upon (iii) A view of the progressive meter transacted shall be monitored and request. jackpot amount. If several tables are recorded by a dedicated camera or (x) Video library log. A video library linked to the same progressive jackpot motion activated dedicated camera that log, or comparable alternative procedure meter, only one meter need be recorded. provides coverage with sufficient clarity approved by the Tribal gaming (2) [Reserved] to identify the chip values and the regulatory authority, shall be (r) Gaming machines. (1) Except as amounts on the fill and credit slips. maintained to demonstrate compliance otherwise provided in paragraphs (r)(2) (2) Controls provided by a with the storage, identification, and and (r)(3) of this section, gaming computerized fill and credit system retention standards required in this machines offering a payout of more than maybe deemed an adequate alternative section. $250,000 shall be monitored and to viewing the fill and credit slips. (y) Malfunction and repair log. (1) recorded by a dedicated camera(s) to (u) Currency and coin. (1) The Surveillance personnel shall maintain a provide coverage of: surveillance system shall monitor and log or alternative procedure approved (i) All customers and employees at the record with sufficient clarity all areas by the Tribal gaming regulatory gaming machine, and where currency or coin may be stored or authority that documents each (ii) The face of the gaming machine, counted. malfunction and repair of the with sufficient clarity to identify the (2) Audio capability of the soft count surveillance system as defined in this payout line(s) of the gaming machine. room shall also be maintained. section. (2) In-house progressive machine. In- (3) The surveillance system shall house progressive gaming machines (2) The log shall state the time, date, provide for: and nature of each malfunction, the offering a base payout amount (jackpot (i) Coverage of scales shall be reset amount) of more than $100,000 efforts expended to repair the sufficiently clear to view any attempted malfunction, and the date of each effort, shall be monitored and recorded by a manipulation of the recorded data. dedicated camera(s) to provide coverage the reasons for any delays in repairing (ii) Monitoring and recording of the the malfunction, the date the of: table game drop box storage rack or area (i) All customers and employees at the malfunction is repaired, and where by either a dedicated camera or a applicable, any alternative security gaming machine; and motion-detector activated camera. (ii) The face of the gaming machine, measures that were taken. (iii) Monitoring and recording of all with sufficient clarity to identify the (z) Surveillance log. (1) Surveillance areas where coin may be stored or payout line(s) of the gaming machine. personnel shall maintain a log of all counted, including the hard count room, (3) Wide-area progressive machine. surveillance activities. all doors to the hard count room, all Wide-area progressive gaming machines (2) Such log shall be maintained by scales and wrapping machines, and all offering a base payout amount of more surveillance room personnel and shall areas where uncounted coin may be than $1.5 million and monitored by an be stored securely within the stored during the drop and count independent vendor utilizing an on-line surveillance department. progressive computer system shall be process. (iv) Monitoring and recording of soft (3) At a minimum, the following monitored and recorded by a dedicated information shall be recorded in a camera(s) to provide coverage of: count room, including all doors to the room, all table game drop boxes, safes, surveillance log: (i) All customers and employees at the (i) Date; gaming machine; and and counting surfaces, and all count (ii) The face of the gaming machine, team personnel. The counting surface (ii) Time commenced and terminated; with sufficient clarity to identify the area must be continuously monitored (iii) Activity observed or performed; payout line(s) of the gaming machine. and recorded by a dedicated camera and (4) Notwithstanding paragraph (r)(1) during the soft count. (iv) The name or license credential of this section, if the gaming machine is (v) Monitoring and recording of all number of each person who initiates, a multi-game machine, the Tribal areas where currency is sorted, stacked, performs, or supervises the surveillance. gaming regulatory authority, or the counted, verified, or stored during the (4) Surveillance personnel shall also gaming operation subject to the soft count process. record a summary of the results of the approval of the Tribal gaming regulatory (v) Change booths. The surveillance surveillance of any suspicious activity. authority, may develop and implement system shall monitor and record a This summary may be maintained in a alternative procedures to verify payouts. general overview of the activities separate log.
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Signed at Washington, DC, this 17th day of June, 2002. Montie R. Deer, Chairman. Elizabeth L. Homer, Vice-Chair. Teresa E. Poust, Commissioner. [FR Doc. 02–15644 Filed 6–26–02; 8:45 am] BILLING CODE 7565–01–P
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Part III
Department of Agriculture Food and Nutrition Service
7 CFR Part 226 Child and Adult Care Food Program; Implementing Legislative Reforms To Strengthen Program Integrity; Final Rule
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DEPARTMENT OF AGRICULTURE Room 634, Alexandria, Virginia 22302– Based on input from this group, that 1594. Comments will also be accepted identified the most critical and Food and Nutrition Service via E Mail sent to vulnerable aspects of Program [email protected]. All management in day care homes and 7 CFR Part 226 written submissions will be available for child care centers, we developed and public inspection at this location disseminated guidance on management RIN 0584–AC94 Monday through Friday, 8:30 a.m.–5 improvement in the CACFP to all State Child and Adult Care Food Program; p.m. agencies in 1997 and 1998. In the Implementing Legislative Reforms To FOR FURTHER INFORMATION CONTACT: Mr. meantime, we continued work on Strengthen Program Integrity Edward Morawetz or Ms. Melissa proposed regulations designed to Rothstein at the above address or by address the problems identified in State AGENCY: Food and Nutrition Service, telephone at (703) 305–2620. A and Federal reviews and in audit USDA. regulatory impact analysis was findings from OIG. ACTION: Interim rule. completed as part of the development of What Was the Legislative Response to this interim rule. Copies of this analysis the Review and Audit Findings? SUMMARY: This rule incorporates in the may be requested from Mr. Morawetz or The William F. Goodling Child Child and Adult Care Food Program Ms. Rothstein. regulations the changes mandated by Nutrition Reauthorization Act of 1998 SUPPLEMENTARY INFORMATION: the Agricultural Risk Protection Act of (Pub. L. 105–336, October 31, 1998) 2000 and the Grain Standards and Background earmarked a portion of the CACFP Warehouse Improvement Act of 2000. appropriation for Fiscal Years 1999 What Led to the Increased Focus on through 2003 to provide training and The changes made by these laws that Program Management and Integrity in affect the Child and Adult Care Food technical assistance to State agencies to the Child and Adult Care Food improve program management and Program were enacted due to concerns Program? resulting from the findings of State and oversight (42 U.S.C. 1766(q)(3)). With Federal Program reviews and from In recent years, State and Federal this funding, we developed a formal audits and investigations conducted by reviews of the Child and Adult Care training package that incorporated and the Department’s Office of Inspector Food Program (CACFP or Program) have expanded upon the written management General. The changes made by this rule found a number of cases of improvement guidance issued in 1997– are in several broad Program areas: the mismanagement, abuse, and, in some 1998. In the fall and winter of 1999– basic eligibility criteria for participation instances, fraud by institutions and 2000, we conducted sessions around the by institutions; procedures for denying facilities participating in the CACFP. country during which over 500 State institutions’ applications and for (‘‘Institution’’ means an independent agency staff involved in various aspects terminating agreements with center or a sponsoring organization that of Program administration received institutions and day care homes that do holds an agreement with the State training in these management not meet Program requirements; agency to administer CACFP. ‘‘Facility’’ improvement techniques. We also administrative review procedures for will be defined in this rule to mean any intensified our efforts to monitor the institutions and day care homes; State center or day care home participating in CACFP in every State in fiscal years agency and sponsoring organization CACFP under a sponsoring 2000 and 2001. We will use the results monitoring requirements; limits on the organization. ‘‘Center’’ will be defined of these reviews to inform us in amount of reimbursable administrative in this rule to include child care centers, developing additional training and costs for sponsors of centers; and State adult day care centers, and outside- guidance on the most problematic agency controls on day care home school-hours centers). These reviews aspects of Program operations and participation. The changes are designed revealed critical weaknesses in State administration, and to help us target to improve Program operations and agency and institution management areas of State-level Program monitoring at the State agency and controls over Program operations, and management for more intensive review institution levels. examples of regulatory noncompliance in the future. by institutions and facilities, including On June 20, 2000, the Agricultural DATES: The effective date for this rule is improper use of Program funds. In Risk Protection Act of 2000 (Pub. L. July 29, 2002. For sponsoring addition, audits and investigations 106–224, (ARPA)) was enacted. ARPA organizations participating in the conducted by the Department’s Office of made a number of changes to the Program as of the date of publication, Inspector General (OIG) raised serious CACFP statute (section 17 of the the provision at § 226.16(b)(1) relating to concerns regarding the adequacy of Richard B. Russell National School the appropriate level of monitoring staff financial and administrative controls in Lunch Act (42 U.S.C. 1766) (NSLA)) must be implemented no later than July CACFP and documented instances of designed to improve Program integrity. 29, 2003. To be assured of mismanagement and, in some cases, Shortly after that, the Grain Standards consideration, comments must be fraud, by Program participants. Finally, and Warehouse Improvement Act of postmarked on or before December 24, the General Accounting Office 2000 (Pub. L. 106–472, November 9, 2002. Comments will also be accepted conducted a review of the CACFP which 2000) (Grain Standards Act) modified via E Mail if sent to raised questions concerning Federal and one of the amendments made by ARPA. [email protected] no State administration of the Program. The ARPA and Grain Standards Act later than 11:59 p.m. on December 24, amendments are the basis for this rule What Did the Department Do in 2002. and are discussed in more detail below. ADDRESSES: Comments should be Response to These Audits, addressed to Mr. Robert Eadie, Chief, Investigations, and Reviews? Why Is the Department Publishing Policy and Program Development In 1995, we convened a working These Changes in an Interim Rule? Branch, Child Nutrition Division, Food group of State and Federal Program We are publishing this as an interim and Nutrition Service, Department of administrators to address the issues rule because of the requirements of Agriculture, 3101 Park Center Drive, raised in these reviews and audits. ARPA. Section 263(a) of ARPA required
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the Secretary to publish rules as soon as After we receive public comment on we will continue to conduct intensive practicable without regard to the notice this interim rule, we will analyze monitoring in future years as well. As and comment requirements of section comments on both the proposed and part of this effort, we revised the CACFP 553 of the Administrative Procedure interim rules. We then intend to publish management evaluation guidance used Act, the Secretary of Agriculture’s a single rule that implements the by regional offices in order to ensure policies relating to public participation provisions of the proposed rule and that an in-depth evaluation of each State in rulemaking, and the Paperwork makes any necessary changes to the agency’s Program administration was Reduction Act. Therefore, we are provisions being implemented in this conducted. The management evaluation required to publish a rule incorporating interim rule. guidance will be further revised to add these changes to CACFP as Readers should note that in order to compliance with the new provisions of expeditiously as possible. The make the changes necessary to this rule as a key element of amendments made by section 307 of the implement the provisions of ARPA and management evaluations conducted Grain Standards Act are essential to full the Grain Standards Act relating to after this rule’s publication. implementation of the ARPA provisions institution eligibility, we had to How Is the Remainder of This Preamble and we have thus found that good cause reorganize the provisions relating to Organized? exists to publish those amendments State agency approval of institution applications in 7 CFR 226.6(b) of the without first taking public comment. Because of the overlap between some current regulations. We had already provisions of the interim and proposed Has the Department Issued Any proposed to amend several of these rules, we have organized this preamble Guidance on the Amendments Made by provisions in the September 12, 2000, into three parts, using approximately ARPA and the Grain Standards Act? rule (e.g., eliminating the requirements the same organization we used in the that State agencies notify an institution Yes. To help State agencies proposed rule. This organization of the of an incomplete application within 15 implement these provisions until a rule preamble is intended to facilitate the calendar days and that State agencies could be published, we issued the later publication of a single rule both provide technical assistance to following items: finalizing the provisions of the proposed • July 20, 2000—‘‘Implementing institutions in completing their rule and making any necessary Statutory Changes to the CACFP applications). In order to avoid modifications to this interim rule. The Mandated by the Agricultural Risk confusion and to provide us the preamble is organized as follows: Protection Act of 2000 (Pub. L. 106– opportunity to evaluate any comments 224)’’ on these proposed changes, we have not Part I. Basic Institution Eligibility Criteria, • October 16, 2000—‘‘Monitoring included the proposed changes in this Review and Approval of Institutions’ Requirements for Sponsoring interim rule. Therefore, in making the Applications; Serious Deficiency Organizations in the Child and Adult necessary reorganization of § 226.6(b), Determinations, Corrective Action, Care Food Program (CACFP)’’ we repeated these provisions as they Suspension, Termination, and • October 17, 2000—Letter to State exist in the current rules, and not as we Disqualification; and Administrative Reviews agency directors on termination of proposed changing them in the A. Basic requirements for institution institutions and day care homes September 12, 2000, rule. eligibility • April 12, 2001—‘‘Effects of the The same circumstances occurred in 1. Limits on outside employment Agricultural Risk Protection Act, Pub. L. other parts of this interim rule as well. (§§ 226.6(b)(16) and 226.16(b)(7)) 106–224, on termination of the For the most part, we have avoided 2. Bonding (§§ 226.6(b)(17) and agreements of day care home providers incorporating any of the changes 226.16(b)(4)) proposed on September 12, 2000, in this 3. Tax exempt status (§§ 226.12(b)(2)(i), in the CACFP’’ 226.15(a), 226.17(b)(2), 226.19(b)(2) and These items were sent to all State rule unless two conditions applied: (a) 226.19a(b)(4)) agencies and are also available on our Commenters on the proposed rule were 4. Past performance (§§ 226.6(b)(12)–(14), website at www.fns.usda.gov/cnd. overwhelmingly in favor of the 226.15(b), 226.15(b)(7)–(8) and 226.16(b)) In addition, in December of 2000, we proposed change; and (b) making the B. Standards for State agency review of an conducted training for all Food and change in this rule was essential to institution’s application (§ 226.6(b)(18)) Nutrition Service (FNS) regional staff on implementation of the provisions of C. Additional condition for State agency the ‘‘suspension’’ provisions in the ARPA and the Grain Standards Act. approval of a new sponsoring Grain Standards Act. Provisions from the proposed rule that organization’s application (§§ 226.6(b)(11) 226.6(b)(18)(ii)(A) What Is the Relationship Between This have been incorporated in this interim rule are explicitly noted in this D. Serious deficiency determination, Rule and the Proposed Rule on corrective action, suspension, Improving Management and Program preamble. termination, and disqualification Integrity in CACFP? What Is the Department’s Role in (§§ 226.2 and 226.6(c)) 1. Denial of an application from a new or Enactment of ARPA meant that some Ensuring Proper Implementation of the Many Changes Mandated by This Rule? renewing institution (§§ 226.6(c)(1) and of the provisions that we had originally (2)) planned to include in the proposed We will continue to monitor, and 2. Actions based on serious deficiency rulemaking are now mandated by § 17 of provide technical assistance to, State determinations (§§ 226.6(c)(1), (c)(2), and the NSLA. As a result of ARPA’s agencies to assure proper (c)(3)) enactment, we deleted provisions that implementation of this rule’s 3. Corrective action timeframes we originally intended to include in the provisions. Specific funding for CACFP (§ 226.6(c)(4)) proposed rule that was ultimately training and technical assistance is 4. Suspension of participation for an published on September 12, 2000 (65 FR institution (§§ 226.2 and 226.6(c)(5)) being utilized, in part, to conduct more, 5. FNS determination of serious deficiency 55101). The provisions deleted from the and more comprehensive, management (§ 226.6(c)(6)) proposed rule, as well as other evaluations of State agencies’ Program 6. National disqualified list (§§ 226.2 and provisions relating to the amendments administration. 226.6(c)(7)) made by ARPA and the Grain Standards In Fiscal Years 2000–2001, we 7. State agency list (§§ 226.2 and Act, are addressed in this interim rule. conducted reviews in every State, and 226.6(c)(8))
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E. Administrative reviews for institutions and A. Basic Requirements for Institution interferes with the responsibilities and responsible principals and responsible Eligibility duties of the employees of the individuals (§§ 226.2 and 226.6(k)) organization with respect to the Prior to ARPA, What Were the Basic Part II. State Agency and Institution Review program. * * *’’ This requirement was Requirements for Institution Eligibility? and Oversight Requirements prompted by several OIG audits which A. Unannounced reviews The NSLA sets forth certain basic uncovered examples of sponsoring 1. Unannounced reviews by sponsoring eligibility requirements that institutions organizations’ executive directors or organizations (§§ 226.2 and 226.16(d)(4)) must meet prior to their participation in other employees who received full-time 2. Unannounced reviews by State agencies CACFP. Before enactment of ARPA, salaries paid out of CACFP (§ 226.6(m)) these were set forth at §§ 17(a) and 17(d) administrative funds while also being 3. Notification requirements (§§ 226.6(f)(1), of the NSLA. In addition to employed in a full-time capacity by 226.16(d)(4)(v), and 226.18(d)(1)) requirements specific to different types another organization. This rule adds B. Sponsor monitoring staff (§§ 226.6(f)(2), of institutions, the law stated that no § 226.6(b)(16), which requires 226.16(b)(1), and 226.16(d)(4)) institution was eligible to participate sponsoring organizations not C. State review cycle (§ 226.6(m)(4)) unless it accepted final administrative participating as of July 29, 2002 to Part III. Other Operational Provisions and financial responsibility for the submit their outside employment policy A. Definition of institution (§ 226.2) Program’s operation, and had not been to the State agency as part of their B. Ceiling on administrative reimbursements seriously deficient in its administration Program applications, and to have for sponsors of centers (§§ 226.6(f)(3) and of CACFP or other child nutrition sponsoring organizations participating 226.16(b)(1)) programs. as of July 29, 2002 submit an outside C. State agency limits on transfers by family What Changes Did ARPA Make to These employment policy to the State agency day care homes (§§ 226.6(p) and Requirements? not later than August 26, 2002. This rule 226.18(b)(13)) also makes a parallel change to D. Notice to parents/guardians of enrolled Section 243(a)(8) of ARPA added § 226.16(b)(7). participants (§ 226.16(b)(5)) three new eligibility requirements for E. Procedures for recovery of funds disbursed sponsoring organizations: (1) Is the Department Regulating the to institutions (§ 226.14(a)) Employment of an appropriate number Content of These Outside Employment F. Disqualification and administrative of monitoring staff, based on regulations Policies? reviews for family day care homes promulgated by the Department; (2) (§§ 226.16(l) and 226.6(l)) We will not, except to establish establishment of a policy that prohibits certain broad parameters for State Part I. Basic Institution Eligibility sponsoring organization employees from agencies’ use in reviewing such policies. Criteria; Review and Approval of having other employment that interferes Outside employment policies must Institutions’ Applications; Serious with their Program responsibilities and apply to all employees of the sponsoring Deficiency Determinations, Corrective duties; and, (3) for new sponsoring organization who have responsibilities Action, Suspension, Termination, and organizations, compliance with any relating to the operation of CACFP. We Disqualification; and Administrative State law, regulation, or policy requiring acknowledge that these policies do not Reviews them to be bonded. In addition, § 243(b) have to bar sponsoring organization made two changes to basic eligibility employees from holding second jobs; In order to improve Program requirements for all institutions by: (1) however, a full-time employee cannot management in the CACFP, it is critical modifying the tax exempt status reasonably be expected to perform his/ that an institution (i.e., an independent provision of the NSLA by eliminating her Program duties while holding a center or a sponsoring organization of the participation of any private second full-time job. Therefore, in day care homes and/or centers) be nonprofit institution which has not yet establishing limits on outside required to demonstrate in its Program obtained (i.e., is ‘‘moving towards’’) tax employment, such policies should take application that it is capable of exempt status; and (2) broadening the into account the number of work hours administering the Program in requirements for satisfactory past being charged to the CACFP (e.g., is the accordance with the regulations. performance by all institutions. employee being paid for 8 hours of work Similarly, when an institution These new eligibility requirements per week related to CACFP, or 40?) and participating in the Program is found to (except for sponsor monitor staffing the nature of the sponsor-related duties have serious management problems and standards, discussed in Part II of this the employee performs which are paid fails to take corrective action within a preamble) are discussed in this section out of CACFP funds. In addition, such reasonable period, it has demonstrated (Part I(A)) of the preamble. Other policies must specifically restrict any that it is not qualified to continue eligibility criteria pertaining to an outside employment that constitutes a participating. In both cases, State institution’s viability, capability, and real or apparent conflict of interest. agencies must have clear minimum accountability, as well as a special 2. Bonding (§§ 226.6(b)(17) and Federal guidelines for taking action to requirement pertaining to new 226.16(b)(4)) deny an institution’s application or to sponsoring organizations, were added to terminate the institution’s Program the NSLA by § 243(b) of ARPA and are Section 243(a)(8)(D) of ARPA further participation. Part I of this preamble discussed in Parts I(B) and I(C) of this amended § 17(a) [§ 17(a)(6)(F), as discusses the new ARPA and Grain preamble, respectively. amended] of the NSLA to require that Standards Act requirements that are any new sponsoring organization intended to improve State agencies’ 1. Limits on Outside Employment applying to enter the program obtain a ability to approve or renew only (§§ 226.6(b)(16) and 226.16(b)(7)) bond if such bond is required ‘‘under qualified applicant institutions; to Section 243(a)(8)(D) of ARPA State law, regulation, or policy. * * *’’ restrict or eliminate certain institutional amended § 17(a) [§ 17(a)(6)(E), as Because ARPA refers to State law, practices deemed problematic by State amended] of the NSLA to require that regulation, or policy, it is apparent that and Federal reviews and OIG audits; all sponsoring organizations have in States should be accorded broad and to terminate institutions’ effect ‘‘a policy that restricts other discretion in this area. However, the law agreements when necessary. employment by employees that is clear that such bonding requirements
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may only be applied to new (i.e., those amended] by adding that institutions sponsoring organization’s application that apply for initial participation on or must not have been ‘‘determined to be on behalf of a facility if either the after the date of enactment of ARPA: ineligible to participate in any publicly facility or any of its principals is on the June 20, 2000) sponsoring organizations. funded program by reason of violation National disqualified list. These This provision does not preclude a State of the requirements of the program’’ for prohibitions are in §§ 226.6(b)(12) and agency from requiring an institution to a period of time specified by the (b)(13) of this rule. Related changes are obtain a bond as part of a corrective Secretary. made by this rule in §§ 226.15(b) and action plan. Section 243(c) of ARPA also added 226.16(b). These changes are necessary Accordingly, this rule adds § 17(d)(5)(B)(i) to the NSLA, which to comply with the requirements of §§ 226.6(b)(17) and 226.16(b)(4) to requires us to establish procedures for ARPA for establishing a National require that sponsoring organizations terminating the participation of an disqualified list that includes applying for initial participation in institution or day care home provider disqualified institutions, day care home CACFP on or after June 20, 2000, submit that, among other things, conceals a providers, and individuals. a bond if such bond is required by State criminal background. This provision law, regulation, or policy. In order to indirectly establishes another eligibility How Does This Rule Incorporate the analyze this provision’s impact, requirement with regard to criminal Requirement Concerning Past § 226.6(b)(12) also requires that any backgrounds. Performance in Other Publicly Funded State agencies with such a requirement Programs? Why Does This Rule Revise the provide to the appropriate Food and This rule places the new eligibility Requirement Concerning Past Nutrition Service regional office criterion concerning past performance Performance in the Child Nutrition (FNSRO) a copy of their State’s law, in other publicly funded programs in Programs? regulation, or policy establishing § 226.6(b). In order to assist State bonding requirements for new CACFP Currently, the requirement that a State agencies in evaluating whether an sponsors, as well as a list of the agency may not enter into an agreement institution is ineligible to participate in organizations that have posted a bond as with an institution that has been any other publicly funded program by a result of such a requirement. seriously deficient in its operation of the reason of violating that program’s CACFP or any other child nutrition requirements, this rule adds new 3. Tax Exempt Status (§§ 226.12(b)(2)(i), program is contained in § 226.6(c). §§ 226.6(b)(13) and 226.15(b)(7) that 226.15(a), 226.17(b)(2), 226.19(b)(2), and These institutions are placed on what require, as a part of each application, 226.19a(b)(4)) has been known as the FNS list of that the institution list all publicly Prior to enactment of ARPA, § 17(d)(1) ‘‘seriously deficient institutions’’ (this funded programs in which the of the NSLA required that nonprofit list is renamed the National disqualified institution and its principals institutions have tax exempt status list by this rule). The institution remains participated in the past seven years and under the Internal Revenue Code of ineligible for the Program until FNS, in that the institution certify that neither it 1986 or, ‘‘under conditions established consultation with the appropriate State nor any of its principals is ineligible to by the Secretary, [be] moving toward agency, determines that the serious participate in those programs by reason compliance with the requirements for deficiency that resulted in the ineligible of violation of the requirements of those tax exempt status. * * *’’ A previous status has been corrected. programs during that period. Instead of amendment to the NSLA had limited to As discussed further in Part I(D) of the such a certification, the institution may 180 days the period during which most preamble, this rule reorganizes submit documentation that the institutions could participate in CACFP § 226.6(c). As part of this reorganization, institution or the principal previously in a ‘‘moving towards tax exempt’’ we moved the provision that requires determined ineligible was later fully status. However, § 243(b) of ARPA State agencies to deny applications from reinstated in, or is now eligible to amended § 17(d)(1) [§ 17(d)(1)(B) as institutions that have been seriously participate in, the program, including amended] to require nonprofit deficient in the CACFP or other child the payment of any debts owed. institutions to have tax exempt status nutrition programs to § 226.6(b). This provision is really a requirement for What Is the Effect of a Criminal under the Internal Revenue Code of Background? 1986 prior to the start of their Program Program eligibility rather than a basis participation. for a new determination of serious As noted above, in order to Accordingly, this rule amends deficiency (that is, if an institution incorporate the ARPA requirement that §§ 226.12(b)(2)(i), 226.15(a), applying to participate was determined we establish procedures for terminating 226.17(b)(2), 226.19(b)(2), and to be on the National disqualified list, the participation of an institution or day 226.19a(b)(4) to require that nonprofit its application would be denied, but it care home provider that conceals a organizations have tax exempt status would not be declared seriously criminal background, we must also prior to their participation in CACFP. deficient and placed on the list again). establish an application eligibility As such, it is more properly placed in requirement with regard to criminal 4. Past Performance (§§ 226.6(b)(12)– § 226.6(b), which is the section that backgrounds. This rule amends (14), 226.15(b), 226.15(b)(7)–(8), and addresses application approval. We § 226.6(b) to prohibit State agencies 226.16(b)) have also reworded the provision to from approving an institution’s Prior to enactment of ARPA, make it clear that State agencies are application if the institution or any of § 17(a)(2)(B) of the NSLA stated that, in prohibited from approving an its principals have been convicted of order to be eligible to participate in application submitted by an institution any activity that occurred during the CACFP, an institution must not have that is on the National disqualified list. past seven years and that indicated a been ‘‘seriously deficient in its This rule also makes clear that State lack of business integrity. Convictions operation of the child care food agencies are prohibited from approving indicating a lack of business integrity program, or any other’’ child nutrition an institution’s application if any of the include fraud, antitrust violations, program ‘‘for a period of time specified institution’s principals is on the embezzlement, theft, forgery, bribery, by the Secretary.’’ Section 243(a)(8)(A) National disqualified list, and are falsification or obstruction of justice, or of ARPA amended § 17(a)(6)(B) [as prohibited from approving the any other activity indicating a lack of
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business integrity as defined by the settlement agreements for fraud, principals. Although State agencies are State agency. As with the requirement antitrust violations, violation of terms of not required to conduct background concerning past performance in other a public contract, and similar acts. checks or otherwise investigate the past publicly funded programs, the rule adds Under the debarment regulations, performance of institutions and their to new § 226.6(b)(14) a requirement that companies and individuals may be principals, nothing in this rule prohibits institutions include with their debarred—banned—from participating such efforts. Further, if a State agency applications a certification concerning in both procurement and has reason to believe that the institution the criminal backgrounds of the nonprocurement transactions with or one of its principals may have been institution and its principals. A related Federal agencies, grantees and determined ineligible for a publicly amendment is made in § 226.15(b)(8). subgrantees, for a period of 3 years and, funded program, § 226.6(b)(13)(iii) in some circumstances, 5 years. This Are There Any Other Changes to the requires the State agency to follow up suggested that a more time-limited ban Program Application Resulting From with the entity administering the on Program participation by an These ‘‘Past Performance’’ Provisions publicly funded program to gather institution would be reasonable under Mandated by ARPA? additional information. Also, if a State the new regulations for the Program. agency later discovers that either Yes. We have also amended However, we also concluded that being certification made by the institution is § 226.6(b)(13) and (b)(14) to require that placed on the CACFP National false, the State agency must declare the the Program application include, as part disqualified list differed from the institution seriously deficient for of these two certification requirements, debarment provisions in impact due to providing false information on its language stating that institutions and the breadth of a debarment action’s application (see §§ 226.6(c)(1)(ii)(A), individuals providing false effect. While debarment prevents an 226.6(c)(2)(ii)(A), and 226.6(c)(3)(ii)(A), certifications will be placed on the entity from entering into any which are discussed in more detail in National disqualified list and will be transactions with any Federal agency Part I(D) of the preamble). subject to any other applicable civil or and many grantees and subgrantees, criminal penalties. This language will being placed on the CACFP list merely B. Standards for State Agency Review of help to deter the submission of affects participation in FNS Child an Institution’s Application applications by ineligible institutions Nutrition Programs. Debarment’s impact (§ 226.6(b)(18)) and individuals, and will also provide is potentially more significant than a Prior to ARPA, What Other Criteria Did the institution and individuals with ban on participation from a single Institutions Need To Meet in Order To notice regarding the consequences of program or set of programs. Be Approved for Program Participation? submitting false certifications. On balance, we established the seven- year ban to underscore the importance The statutory language mentioned in Why Did the Department Establish Part I(A) of this preamble, above (that no Seven Years as the Period of Time for of ensuring Program integrity—the fundamental focus for Congress in institution was eligible to participate in the Past Performance and Criminal the Program unless it ‘‘accepts final Background Eligibility Criteria? creating the statutory provisions we are implementing in this rule. At the same administrative and financial Prior to this rulemaking, an time, we wanted to afford individuals responsibility for management of an institution that had its participation and institutions with a ‘‘second chance’’ effective food service. * * *’’) required terminated as a result of an uncorrected to participate in CACFP following a State agencies to analyze each serious deficiency in its operation of predictable period of time. We institution’s administrative and any FNS Child Nutrition Program was determined that a seven-year period financial capability to successfully placed on the National disqualified list. gives institutions terminated from operate the CACFP. The Program Once on the list, an institution was Program participation an opportunity to regulations at §§ 226.6(b), 226.6(f)(3), barred indefinitely from participating in correct deficiencies and re-apply for 226.7(g) and 226.15(b)(3) pertaining to the CACFP. Removal from the list Program participation. Within seven the content and review of the budgets occurred only when FNS, in years, institutions interested in annually submitted by all institutions, consultation with a State agency, reapplication could re-pay Federal and at §§ 226.6(b)(5) and 226.6(f)(2) determined that the original serious funds, institute fiscal and food service pertaining to the management plans deficiency had been corrected. In changes, retain and train sufficient staff, submitted by all sponsoring establishing criteria for participation for and establish a proven record of organizations, provided the bases for this rule, we considered whether an business integrity. This rule establishes State agencies to make this indefinite ban on participation a seven-year period for both the past determination of financial and accomplished the goal of ensuring performance and criminal background administrative capability. Program integrity. We also considered eligibility criteria. (Note: Placement on, How Did ARPA Modify the whether an indefinite ban was a and removal from, the National reasonable consequence of serious past Requirements for State Agency Disqualified list is discussed in Part Assessment of an Institution’s performance problems by an individual I(C)(6) of this preamble, below. or organization, and whether it was ‘‘Administrative and Financial reasonable for those with a criminal Will State Agencies Routinely Be Capability’’? background. Required To Research the Past The results of recent reviews and We examined similar regulations Performance of Institutions in Other audits suggest that the existing criteria providing a bar to participation, the Publicly Funded Programs, or To for application review have not government-wide nonprocurement Perform Criminal Background Checks? provided specific enough guidance to suspension and debarment provisions, No. State agencies may rely on the State agencies for their use in codified for the Department at 7 CFR institution’s certification as to its determining whether an institution’s part 3017. Companies and individuals participation in publicly funded application demonstrates its capability may be debarred when determined not programs and its criminal convictions, to administer the Program in accordance presently responsible based on actions and the participation in publicly funded with the regulations. To that end, ARPA such as criminal convictions or civil programs and criminal convictions of its made changes designed to reinforce the
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Management Improvement Training would enable them to operate in help a State agency to measure an FNS provided to State agencies on how accordance with the performance institution’s potential ability to deliver they must review a Program application standards. Renewing institutions would the Program’s benefits to children in in order to assess an institution’s be required—through their application accordance with generally accepted qualifications to operate the CACFP. and through the most recent State business practices and all applicable Section 243(b)(1) of ARPA amended evaluation of their Program operations— regulations and guidance. We wish to § 17(d) of the NSLA by requiring that all to continue to operate in conformance emphasize that these standards do not institutions demonstrate that they meet with the performance standards. The replace existing regulatory requirements three broad criteria documenting their definitions of ‘‘new’’ and ‘‘renewing’’ on institutions’ applications; rather, ability to operate the Program. These institutions which were proposed in the they supplement these requirements criteria, which must be documented in rule published on September 12, 2000 and provide State agencies with a better the Program application, are that ‘‘the (65 FR 55101) are promulgated in this means of fully evaluating an institution— rule to facilitate implementation of institution’s ability to participate in (i) is financially viable; these ARPA requirements. CACFP in accordance with Program (ii) is administratively capable of regulations. operating the program (including What Are ‘‘Performance Standards’’, whether the sponsoring organization has and How Will They Improve the First Standard: Financial Viability/ business experience and management Application Review Process? Financial Management plans appropriate to operate the Recently-completed reviews and The first standard for evaluating an program) described in the application of audits of CACFP institutions have institution’s application measures the institution; and demonstrated conclusively that the whether it is financially viable, and (iii) has internal controls in effect to mere submission of certain documents whether it will expend and account for ensure program accountability.’’ with the application provides little funds according to financial State agency staff will recognize these assurance that an applicant is capable of management requirements set forth in as the same criteria—viability, administering the Program in Program regulations, the Department’s capability, and accountability (or accordance with regulations. The Uniform Financial Management ‘‘VCA’’)—that were described in the requirement to measure the Requirements (7 CFR parts 3015 and Management Improvement Training application’s content against specific, 3016), and FNS Instruction 796–2, FNS provided to them during the fall performance-based measurements ‘‘Financial Management—Child and and winter of 1999–2000. (‘‘performance standards’’) should Adult Care Food Program.’’ This rule In Light of ARPA’s Addition of These change the focus of the State agency’s requires State agencies to evaluate Criteria to the Law, How Are You application review process from institutions’ applications as to whether: checking to see that certain documents (1) A new sponsoring organization has Changing the Requirements for State have been submitted to evaluating the documented in its management plan Agency Review of Institution applicant’s understanding and ability to that there is a need for its services. This Applications? implement the Program’s requirements, means that its participation will help The existing application process does based on the substantive information ensure the delivery of Program benefits not always provide State agencies with contained in those documents. to otherwise unserved facilities or a clear enough way of determining For example, institutions are participants, in accordance with criteria whether an institution meets the law’s currently required to submit an developed by the State agency pursuant VCA criteria. Current regulatory administrative budget with their to paragraph (b)(11) of this section. All requirements at § 226.6(b), which only applications. A ‘‘performance standard’’ sponsoring organizations must list the minimum information that must which states that all items in the budget demonstrate that they will use be included in an application, may have must conform to government-wide, appropriate practices for recruiting inadvertently encouraged some State Departmental, and Program-specific facilities, consistent with paragraph (p) agencies to adopt a ‘‘checklist financial management requirements of this section and any State agency approach’’ to application review. Such emphasizes, both to institutions and to requirements; an approach stressed checking to ensure State agency budget reviewers, that each (2) The institution has adequate that all of the required components were item of cost in the budget must be financial resources to operate the in the application, but did not always reasonable, necessary and allowable, Program on a daily basis, based on result in a critical analysis of the and that the budget as a whole must Program administrative earnings and content of some vital parts of the demonstrate that the applicant will non-Program resources (if any) the application, especially the budget and devote sufficient resources to ensure the institution plans to devote to Program (for sponsoring organizations) the proper, efficient, and effective administration, and can document management plan. management of the Program. financial viability (e.g., through audits In order to implement ARPA’s intent and financial statements); and that only institutions which have VCA What Are the Three ‘‘Performance (3) Costs in the institution’s budget be approved for participation, this Standards’’, and How Do They Relate to are necessary, reasonable, allowable, interim rule requires at § 226.6(b)(18) the Process of Establishing in the and properly documented. that all institutions demonstrate in their Application That Each Institution Is The determination of whether the applications that they will meet, or are ‘‘Viable, Capable, and Accountable’’? institution is ‘‘financially viable’’ will meeting, the three ‘‘performance These three standards are based on be based upon its budget (and, for a standards’’ addressed in FNS’s the NSLA’s requirement that only sponsoring organization, its Management Improvement Training and institutions which have VCA may management plan), and will vary based added to the law. New institutions with participate. The standards—which differ on the size of the institution, the no recent record of CACFP performance slightly according to whether the number of facilities it proposes to serve, would be required to show that they institution is a sponsor of day care the number of staff it needs to carry out have management systems in place and homes and/or centers, or is an all Program responsibilities, and the business/management experience which independent center—are designed to non-CACFP resources (if any) to be used
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in the organization’s operation of the (2) If a sponsoring organization, safeguards and controls in place to CACFP. document in their management plan prevent and detect improper financial With regard to recruitment practices, that they employ staff sufficient to meet activities by sponsoring organization readers should note that this standard the ratio of monitors to facilities set employees; and ensure the timely and will require State agencies to review the forth in § 226.16(b)(1) and the factors accurate payment of claims to all facility recruitment practices of any established by the State agency pursuant sponsored facilities; and sponsoring organization, whether it to § 226.6(f)(2); and (6) Has a system that assures that administers the Program only in homes, (3) If a sponsoring organization, have sponsored facilities will comply with only in centers, or in both homes and written policies and procedures that the Program meal pattern, licensure/ centers. Although sponsors of centers assign Program responsibilities and that approval, civil rights, claims, and rarely recruit new facilities in the same ensure compliance with civil rights and recordkeeping requirements. manner, or with the same rapidity, as other Program requirements. The third standard primarily measures whether the applications of sponsors of day care homes, the results Third Standard: Program Accountability of some of the OIG audits have led us independent centers and sponsoring to re-examine the recruitment practices The third standard requires the State organizations assure that they will utilized by some center sponsors. agency to review the application of any accountably and appropriately operate Therefore, if a sponsor proposes to institution to determine that the the Program to provide nutritious meals recruit child care or adult day care institution can ensure the accountability to participants and meet all other centers, this rule requires State agencies of Program funds, as well as the Program requirements. to apply the recruitment element to nutritional adequacy of the Program Will the Department Provide More them as well. meal service. To this end, all Detailed Descriptions of the Individual With regard to the recruitment of day institutions will be required to Elements of the Three Performance document that: care homes by a sponsoring organization • Standards in This Proposal? already participating in CACFP, we There is adequate oversight of the Program by the institution’s governing No. Including detailed guidance in wish to emphasize that ‘‘appropriate this rulemaking would make the recruitment practices’’ are those board of directors; • There is a financial management preamble and regulatory language too designed to add non-participating day system in place with management cumbersome. Additionally, we could care homes to the Program, not those controls specified in writing; not take into account all of the State- that are designed to encourage • Program records are maintained level factors that will affect participating homes to change that are sufficient to document implementation. Instead, we have sponsorships. From time to time, some compliance with Program requirements, presented guidance to State Program day care home providers may wish to including budgets, approved budget administrators in the Management change sponsors for valid reasons. amendments, and audited financial Improvement Guidance issued in 1997– However, a sponsoring organization’s statements; and 1998 and the training conducted during costs related to marketing their • They will follow practices that the fall and winter of 1999–2000. In sponsorship to providers already result in the operation of the Program in addition, we will continue to issue participating in CACFP under another accordance with the meal service, Program guidance, and to provide sponsorship are not allowable Program recordkeeping, and other requirements management improvement training, to costs, under the ‘‘reasonable and of this part. State agencies on an ongoing basis. State necessary’’ requirements of government- In addition, when the institution is a agencies, in turn, are also required to wide cost principles and FNS sponsoring organization, the State disseminate this written guidance to Instruction 796–2, ‘‘Financial agency will also review the sponsoring their institutions, and to train Management—Child and Adult Care organization’s management plan to institutions on management Food Program.’’ We also wish to remind determine whether the sponsoring improvement regulations and guidance State agencies that they must ensure organization: as quickly as possible. that a non-participating provider (1) Maintains on file valid and An exception to the statement that we understands that it may choose among complete facility applications and other will not provide detailed explanations approved sponsors if more than one appropriate records of provider of the standards in this rule relates to sponsor serves the area of the State in operations; the establishment of sponsor staffing which the provider resides. (2) Will adequately train sponsoring standards for monitoring. Such staffing Second Standard: Administrative organization and facilities in proper standards were recommended in the Capability operation of the Program; OIG audits and are now statutorily (3) Will monitor each facility’s mandated as a result of ARPA. The The second standard for evaluating an compliance with Program requirements rationale for these standards is institution’s application measures at § 226.16(d)(4); discussed in greater detail in Part II(B) whether it is administratively capable (4) If a sponsor of day care homes, of this preamble, below; the new and can effectively manage the Program. will correctly classify tier I and tier II regulatory requirement appears in Appropriate and effective management day care homes; § 226.16(d) on sponsors’ monitoring practices must be in effect to ensure that (5) Has a financial system and responsibilities, and is only cross- the Program operates in accordance management controls specified in referenced in the second performance with regulations. State agencies will writing that assure fiscal integrity and standard. review all institutions’ applications to accountability for all funds and property determine whether, once they are received, held, and disbursed; assure What if an Institution’s Application operating the CACFP, they: the integrity and accountability of all Does Not Demonstrate That It Will Meet (1) Have an adequate number and expenses incurred; assure that funds These Performance Standards? type of qualified staff to ensure and property are used, and expenses Unless the State agency determines operation of the Program in accordance incurred, for authorized Program that an institution has demonstrated its with this part; purposes; describe a system of ability to fully meet each of these
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standards, the institution’s application delivery of benefits to otherwise centers. This rule requires State must be denied and the institution must unserved’’ facilities or children. agencies to disseminate the criteria to have the opportunity to request an This provision of ARPA requires a new sponsoring organizations when administrative review of the denial, as new sponsor to demonstrate to the State they request information about applying specified in § 226.6(k). This new agency’s satisfaction that it will make to the Program and requires new language strengthens the Program’s CACFP available to currently-unserved sponsoring organizations to submit long-standing requirement that, prior to facilities or children. It addresses a documentation that they meet the State approving an institution for Program concern frequently expressed by State agency’s criteria. This rule also makes participation, the State agency must agencies and participating sponsoring this requirement part of Performance make a positive determination that the organizations—that, prior to ARPA, no Standard 1 (§ 226.6(b)(18)(i)(A)). institution’s application demonstrates clear legal basis existed for a State to D. Serious Deficiency Determination, its ability to properly manage and prohibit a new sponsoring organization Corrective Action, Suspension, operate the Program. from entering CACFP by recruiting an existing sponsor’s facilities, sometimes Termination, and Disqualification Accordingly, to provide greater (§§ 226.2 and 226.6(c)) assurance that State agencies approve by promising lax enforcement of only those institutions which are Program rules. What Impact Did ARPA and the Grain capable of operating CACFP in With regard to the law’s requirement Standards Act Have on the Process of accordance with the regulations, we are that each State agency establish criteria Terminating an Institution’s CACFP revising §§ 226.2, 226.6(b), 226.15(b) for determining whether a new sponsor Agreement? will provide benefits to unserved and 226.16(b) to: ARPA added provisions to the NSLA • Add definitions of ‘‘new’’ and facilities and/or children, the statute implicitly recognizes the possibility of that for the first time set statutory ‘‘renewing’’ institutions; some variation among States’ criteria. At standards for the process of suspending • Require that all participating the same time, we remind State agencies the participation of institutions and institutions meet the VCA criteria by that, in developing these criteria, they terminating the agreements of demonstrating in their Program must abide by the law’s intent that such institutions and day care home applications that they comply with the criteria apply to new sponsoring providers. Shortly thereafter, the Grain three performance standards discussed organizations only (either sponsoring Standards Act amended those above; provisions. ARPA also added new • organizations applying for the first time Require that State agencies evaluate or applying after a lapse in requirements concerning the timing of all applicant institutions against these participation). Additionally, State administrative reviews relating to performance standards, in order to agencies must understand that the terminations and suspensions and the assess their qualifications to administer criteria they develop to implement the availability of administrative reviews for the Program properly, efficiently, and statutory language regarding unserved day care home providers in certain effectively; and facilities and/or children must be cases. As a result of the statutory • Require that State agencies deny the administered consistent with current requirements pertaining to termination, application of any institution which Program rules providing new day care we had to revise the rules governing the fails to demonstrate that they meet the home sponsoring organizations with entire process leading up to a possible performance standards and the other access to startup funding. termination—determining an institution application requirements set forth in Any State agency requirement that a ‘‘seriously deficient,’’ providing an § 226.6(b). new sponsoring organization must have opportunity to take corrective action, C. Additional Condition for State a minimum number of homes is and determining whether the deficiency Agency Approval of a New Sponsoring contrary to the law. We fully understand is satisfactorily corrected. that a new sponsoring organization with Organization’s Application What Changes Do ARPA and the Grain no financial resources other than (§§ 226.6(b)(11) and 226.6(b)(18)(ii)(A)) Standards Act Require? CACFP administrative funding will In addition to the application need to sponsor enough homes to Section 243(c) of ARPA added a new approval criteria embodied in the three generate reimbursement that supports § 17(d)(5) to the NSLA that requires us performance standards described in Part the hiring of staff and the purchase or to ‘‘establish procedures for the I(B) of the preamble above, the law rental of equipment necessary to termination of participation by establishes an additional condition for successfully operate the Program. institutions and family or group day the approval of a new sponsoring However, multi-purpose organizations care home providers under the organization’s application to participate that have other sources of funding may program.’’ Section 17(d)(5) (as further in CACFP. Section 243(b)(1) of ARPA be willing to use some of these funds to amended by § 307(c) of the Grain further amended § 17(d) pay for CACFP costs in excess of Standards Act) sets forth certain [§ 17(d)(1)(C)(i)(II), as amended] of the reimbursements in order to provide the parameters for these procedures. NSLA by mandating that a State agency Program’s benefits to a small number of Specifically, the procedures must: may approve a new sponsoring homes in an unserved area or areas. • Include standards for terminating organization’s application ‘‘only if the Accordingly, this rule further amends the participation of an institution or day State agency determines that * * * the revised § 226.6(b)(11) to require State care home provider that ‘‘engages in participation of the institution will help agencies to develop criteria for unlawful practices, falsifies information to ensure the delivery of benefits to determining whether a new sponsoring provided to the State agency, or otherwise unserved family or group day organization’s participation will help conceals a criminal background’’ or that care homes or centers or to unserved ensure the delivery of benefits to ‘‘substantially fails to fulfill the terms of children in an area.’’ This section of otherwise unserved facilities or its agreement with the State agency’’; ARPA also requires each State agency to participants. For the sake of consistency • Allow an institution or day care establish criteria to determine whether a and simplicity, we made clear that this home provider to have an opportunity new sponsoring organization’s requirement applies to both sponsors of to take corrective action prior to participation ‘‘will help to ensure the child care facilities and adult day care commencement of termination
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procedures, except if the institution or to termination procedures mandated by ‘‘renewing institution.’’ New day care home provider engages in ARPA and the Grain Standards Act, and institutions are those applying to practices that pose an imminent threat ARPA’s requirement that we develop participate in the Program for the first to participants’ health or safety or to the procedures for all aspects of the serious time or applying after a lapse in public health or safety, as discussed in deficiency/corrective action/termination Program participation. These definitions Part I(D)(4) below; process, provided us with the enable us to distinguish between the • Provide for the suspension of an opportunity for such a reorganization three groups of institutions (‘‘new institution’s Program participation if the and clarification. institutions,’’ ‘‘renewing institutions,’’ State agency determines that the and ‘‘participating institutions’’) as we institution has submitted ‘‘false or How Does This Rule Reorganize discuss the standards for approving and fraudulent claims’’ and if a suspension § 226.6(c)? denying Program applications and review determines that the The steps that must be followed to terminating Program agreements. These ‘‘preponderance of the evidence’’ deny the application of a new definitions were included in the supports the State agency’s institution, to deny the application of a proposed integrity rule and received determination; renewing institution, and to terminate widespread commenter support. • Provide an institution or day care the participation of a participating When Must a State Agency Deny the home provider with an administrative institution differ. For example, the review ‘‘prior to any determination to Application of a New or Renewing actions that lead to a serious deficiency Institution? terminate’’ an institution’s or day care determination for a new institution (i.e., home’s agreement; and an institution applying to participate in The current wording and organization • Include the Department’s the Program for the first time, or after a of § 226.6(c) is somewhat unclear with maintenance of a National list of lapse in participation) are different than regard to the process for denying ‘‘institutions, sponsored family or group for a participating institution. In applications. For example, because this day care homes, and individuals that addition, different procedures must be paragraph deals with both the denial of have been terminated or otherwise followed when a State agency takes an institution’s application and with the disqualified from participation in the action to determine an institution termination of the agreement of a program * * *’’ and dissemination of seriously deficient versus when FNS participating institution, some State the list to State agencies for use in takes such an action. In order to agencies may have been deterred from approving applications for participation. accommodate these differences, this denying the application of an institution The changes related to the serious rule reorganizes § 226.6(c) as follows: that failed to demonstrate the ability to deficiency determination, corrective operate the Program, because they may • § 226.6(c)(1)—Denial of a new action, suspension, termination, and have believed that they were required to disqualification of institutions and institution’s application first determine that the institution was • § 226.6(c)(2)—Denial of a renewing responsible principals and responsible ‘‘seriously deficient’’. individuals are discussed in this part of institution’s application State agency administrators are aware • § 226.6(c)(3)—Termination of a the preamble (Part I(D)). Part I(D) also that, if a new institution applies to participating institution’s agreement discusses FNS determinations of serious CACFP and is determined unqualified • § 226.6(c)(4)—Corrective action deficiency, the National disqualified to participate (e.g., it is found to lack the timeframes list, and related State agency lists. financial and administrative capability • § 226.6(c)(5)—Suspension of Revisions to the administrative review to operate the Program), it does not participation for an institution procedures for institutions are mean that the institution is ‘‘seriously • § 226.6(c)(6)—FNS determination of addressed in Part I(E) of this preamble, deficient’’ in the same sense that a serious deficiency and provisions relating to the currently participating institution is • § 226.6(c)(7)—National disqualified disqualification of day care homes and ‘‘seriously deficient’’ when it is found to list have mismanaged the Program or administrative reviews for day care • § 226.6(c)(8)—State agency list homes follow in Part III(F). misappropriated Program funds. Rather, In an effort to simplify the process, it may be the case that, by hiring more How Does This Rule Amend the Current each part of revised § 226.6 provides or better qualified staff or by improving Regulations at § 226.6(c) To Include step-by-step instructions that the State its management plan in other ways, a These Required Procedures? agency must follow in order to take the new institution could subsequently be The current regulations at specified action. As a result, this section approved for participation. Thus, new § 226.6(c)(1)–(11) list some of the of the preamble does not repeat these institutions whose applications to reasons for denying applications and for detailed instructions. Instead, the participate are denied should not terminating institutions’ agreements as a preamble focuses on the issues that raise normally be determined seriously result of their failure to correct serious unusual questions and the reasons for deficient and placed on the National deficiencies. The regulations at taking a particular approach to different disqualified list. Being placed on the § 226.6(c) also establish the procedures types of actions. In order to best National disqualified list would prohibit to be used in denying applications or understand these new provisions, we them from participating in CACFP until terminating agreements with urge readers to carefully read the new they were removed from the list. In fact, institutions. § 226.6(c) before reading this part of the an assumption that a new institution Over the past several years, based on preamble. whose application is denied will input from State agencies, we have 1. Denial of an Application From a New normally be placed on the National considered reorganizing and clarifying or Renewing Institution (§§ 226.6(c)(1) disqualified list could deter institutions the regulations dealing with serious and (2)) from applying to participate and State deficiencies, corrective action, the agencies from denying applications, termination of CACFP institutions’ What Is the Difference Between a New because the consequence of agreements, and the placement of and Renewing Institution? disapproving the application (placement institutions and individuals on the This rule amends § 226.2 to add on the National disqualified list) would National disqualified list. The changes definitions of ‘‘new institution’’ and be so severe.
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This rule makes clear in used to refer to institutions at two very facilities are serving meals that meet the §§ 226.6(c)(1)(i) and 226.6(c)(2)(i) that different stages of a process: initially, an Program’s meal pattern but lack variety, the State agency must deny the institution is notified by its State agency we anticipate that the State agency applications of new and renewing that it is ‘‘seriously deficient’’ in its would suggest ways for the sponsor to institutions if the applications do not operation of CACFP and is given an help facilities have greater variety in meet all of the requirements for Program opportunity to take corrective action; their menus. Similarly, if a State agency applications in §§ 226.6(b), 226.15(b) later, if the institution fails to take discovered that the institution made and 226.16(b). Only if, in reviewing the corrective action during the specified occasional recordkeeping errors, it application, the State agency determines time, its agreement is terminated by the would require correction of the that the institution has committed one State agency and it is placed on a list procedures giving rise to these errors, or or more serious deficiency as identified of ‘‘seriously deficient institutions.’’ additional training of the staff making in §§ 226.6(c)(1)(ii) and 226.6(c)(2)(ii), Thus, in the current regulations, the errors. Neither of these examples must the State agency initiate action to ‘‘seriously deficient’’ is used to describe would warrant determining the disqualify the institution and the institutions that have been told by the institution seriously deficient. principals and individuals responsible State agency that they have a serious There is, however, a point at which for the serious deficiency(ies). management problem, and also to institutions experiencing continued describe institutions that have failed to problems of this sort indicate serious What Action Must the State Agency correct such a problem and whose mismanagement and therefore a serious Take if It Determines a New Institution Program agreements have been deficiency. Problems that initially Is Not Capable of Meeting the terminated. appear manageable may become serious Performance Standards? ARPA uses the term ‘‘disqualified’’ to deficiencies if not corrected within a If the State agency determines that a refer to institutions that were reasonable period of time. new institution is not capable of determined to be seriously deficient, Is There Any Room for the Exercise of meeting the performance standards, the failed to take corrective action, and Discretion by the State Agency in State agency must deny the application whose agreements were terminated after Deciding Whether an Institution Is without making a serious deficiency completion of an administrative review Seriously Deficient? determination. (appeal), or when no review was requested. This rule adopts this Yes. As discussed above, a State How Does This Differ From a State agency should differentiate between Agency’s Determination That a terminology and amends § 226.2 to add definitions of ‘‘seriously deficient’’ and occasional administrative errors and Renewing Institution Is Not Meeting the systemic management problems. A Performance Standards? ‘‘disqualified.’’ This allows us to distinguish, more clearly than in the single instance of some of the actions The result for a renewing institution current regulations, between (1) those listed as serious deficiencies in this rule is different from that of a new ‘‘seriously deficient’’ institutions that (for example, the misclassification of institution. Normally, we would expect have been informed of a serious several tier II homes when the sponsor that a State agency would discover that deficiency and will have an opportunity administers 500 or 1,000 homes) would a participating institution is not to correct the deficiency and (2) those not be a basis for a determination of operating in conformance with the ‘‘disqualified’’ institutions that have serious deficiency, whereas a single performance standards during a review. failed to take satisfactory corrective occurrence of other actions (for In that case, the State agency must take action within the allotted period of example, submission of a false claim) immediate action to initiate a process time, have had their Program agreement would be. A sponsoring organization of that could ultimately lead to the terminated, and have been placed on the day care homes that misclassifies two of termination of the institution’s National disqualified list. its 1,000 homes as tier I due to clerical agreement, including declaration of errors must be viewed differently than serious deficiency and the opportunity What Is the Difference Between an a sponsor with widespread to take corrective action. However, on Institution Making Administrative misclassification due to fundamental occasion a State agency might not detect Errors, and an Institution that Is errors in the organization’s operation of such a failure until a renewing Seriously Deficient? tiering or due to its improper use of institution submits its application. It is critical to discuss the school, census, or household income Again, the State agency must initiate circumstances warranting a data. Similarly, a sponsor that fails to action to deny the renewal application, determination of serious deficiency. To pay two of its 1,000 providers on a including declaration of serious understand how and when a timely basis due to a clerical error must deficiency and the opportunity to take determination of serious deficiency be treated differently than a sponsor that corrective action. must be issued, State agencies must be fails to pay a significant number of its 2. Actions Based on Serious Deficiency able to distinguish between providers within five days, as required Determinations (§§ 226.6(c)(1), (c)(2), administrative errors and ‘‘serious by the regulations, or is found to have and (c)(3)) deficiencies’’ because, once an used provider reimbursements to pay institution is determined to be seriously for administrative expenses. Thus, a What Do You Mean by ‘‘Seriously deficient, the process can culminate in State agency must consider both the Deficient’’ and ‘‘Disqualified’? only two outcomes: the correction of the type and the magnitude of the problem We believe that the terminology used serious deficiency to the State agency’s when deciding whether it warrants in current regulations may have satisfaction within stated timeframes, or determining the institution to be confused some State agency Program the State agency’s proposed termination seriously deficient. Similarly, as administrators and contributed to errors of the institution’s agreement. discussed in the previous portion of this in responding to institutions with In monitoring institutions, State preamble, when reviewing an serious operational problems. For agencies routinely discover management incomplete renewal application, a State example, in current regulations, the problems that warrant various types of agency would generally request the phrases ‘‘serious deficiency’’ and responses. If, for example, the State submission of more or better ‘‘seriously deficient institution’’ are agency discovers that child care information to complete the application
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or to demonstrate that the institution • Conviction for any activity that May an Individual Be Determined To Be was viable, capable, and accountable. If occurred during the past seven years Seriously Deficient? the renewing institution proved unable and that indicated a lack of business No. Only institutions may be to document its compliance with one or integrity. A lack of business integrity determined to be seriously deficient and more aspect of the performance includes fraud, antitrust violations, given the opportunity to take corrective standards, then the State agency would embezzlement, theft, forgery, bribery, action. In most cases, an institution’s make a determination that the falsification or destruction of records, completion of successful corrective institution is seriously deficient. making false statements, receiving action would cause a State agency to We recognize that State agencies may stolen property, making false claims, rescind the declaration of serious encounter examples that are not readily obstruction of justice, or any other deficiency against the institution and identifiable as either ‘‘administrative activity indicating a lack of business discontinue any potential action that errors’’ or ‘‘serious deficiencies.’’ We integrity as defined by the State agency. might be taken to place responsible urge State agencies with questions principals or responsible individuals on regarding the proper application of The additional items reflect changes in the CACFP regulations and the National disqualified list. these concepts to consult their FNSROs However, ARPA requires us to for technical assistance. underscore the importance of particular management functions, the failure or maintain a list of institutions, day care Why Are the Lists of Serious nonperformance of which reviews and home providers, and individuals (i.e., responsible principals and responsible Deficiencies Not Identical for These audits have identified as common individuals, as defined in the preamble, Three Types of Action? problems among institutions whose below) that have been terminated or In order to simplify and clarify the participation was ultimately terminated otherwise disqualified from Program serious deficiency process, this rule for mismanagement. In addition, the establishes separate lists of serious participation. It has long been our final two items reflect statutory changes practice to include institutions and deficiencies applicable to new to the NSLA resulting from the ARPA. institutions (§ 226.6(c)(1)(ii)), renewing individuals on the ‘‘serious deficiency’’ We wish to emphasize that State list. This step is necessary to recognize institutions (§ 226.6(c)(2)(ii)), and agencies must not attempt to review participating institutions that the individuals responsible for the another public entity’s decision to serious deficiencies in one corporation (§ 226.6(c)(3)(ii). terminate or declare ineligible an The current list of serious deficiencies may, if not disqualified, simply form a institution from a publicly funded new corporation in order to return to the at § 226.6(c) forms the basis for the list program for violating that program’s of serious deficiencies for participating Program. requirements. Similarly, State agencies institutions. This rule revises the In addition, there are circumstances must not review a court’s action in existing language to expand and clarify under which an institution might convicting an institution or its the types of problems that would lead correct its serious deficiencies while an a State agency to determine an principals of a business-related offense. individual employee might not. This is institution seriously deficient in order The NSLA’s intent in this area is to why the rule permits State agencies to to fully meet our responsibilities under require the CACFP State agency to specify different corrective action for ARPA. The changes for participating initiate action to terminate an the institution and for the responsible institutions are at § 226.6(c)(3)(ii) and institution’s participation based on a principals or responsible individuals. include as serious deficiencies: final determination made by another For example, an institution in which the • Failure to properly implement and public entity or a court. accountant has embezzled Program administer the day care home funds might take corrective action by Are There Any Serious Deficiencies removing the accountant from his termination and administrative review That Are Not Included in the Lists? procedures set forth at §§ 226.6(l) and position and re-paying Program funds; 226.16(l); This rule clarifies that the list of depending on the circumstances of the • Use of provider funds to pay the serious deficiencies for all three embezzlement, that action and action to amend the institution’s internal fiscal sponsoring organization’s categories of institutions is not meant to controls might constitute adequate administrative expenses; be all-inclusive. Any problem that • corrective action for the institution. Failure to comply with the results in, or otherwise demonstrates, an However, the accountant’s corrective performance standards at § 226.6(b)(14); institution’s failure to perform its • action would necessarily involve Failure to repay disallowed administrative or financial repayment of the embezzled funds to expansion funds to the State agency; responsibilities under the regulations, • Failure to correctly classify day care the institution, so that the institution requires a State agency to determine the homes as tier I or tier II; could re-pay the State agency. If the • Failure to properly train or monitor institution seriously deficient. Thus, the embezzled funds were not repaid, the sponsored facilities; final item in the list of serious State agency would continue to pursue • Failure to pay sponsored facilities deficiencies for all three types of disqualification of the accountant, so in accordance with the regulations; institutions (‘‘any other action affecting that he/she would be placed on the • The fact that the institution or any the institution’s ability to administer the National disqualified list and be barred of the institution’s principals have been Program in accordance with Program from participating in CACFP until the declared ineligible for any other requirements’’) is intended to provide accountant completed corrective action publicly funded program by reason of State agencies with the ability to declare (i.e., has repaid the funds owed under violating that program’s requirements an institution seriously deficient when the Program). (however, this prohibition does not the institution engages in action that apply if the institution or the principal rises to the level of a serious deficiency, What Is a ‘‘Responsible Principal or has been fully reinstated in, or is now but is not specifically enumerated in the Responsible Individual’? eligible to participate in, that program, applicable list of serious deficiencies for To address these situations and to including the payment of any debts new, renewing, or participating comply with the ARPA requirements, owed); and institutions. this rule amends § 226.2 to define
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‘‘responsible principal or responsible agency must complete its review of the If an Institution Terminates Its individual’’ as a principal or other application within 30 days of receiving Agreement After Being Determined individual employed by or under a complete application. We expect that Seriously Deficient, What Action Must a contract with an institution, or an in most cases the review of a State Agency Take? uncompensated individual, who is resubmitted application would be faster Occasionally, after being notified that determined to have responsibility for an than 30 days given that the State agency it is seriously deficient, an institution institution’s serious deficiency. will have already made a preliminary terminates its CACFP agreement Responsible principals and responsible review of the application. voluntarily, ‘‘for convenience.’’ Since individuals must be identified in the What if the State Agency Determines the institution withdrew from the notice of serious deficiency, must That a Renewing Institution’s Corrective Program before being terminated, some receive a copy of the notice of serious Action Is Inadequate Just Before the State agencies have been uncertain of deficiency, and must be provided an Institution’s Existing Agreement their authority to ask FNS to place the opportunity for an administrative Expires? Couldn’t the State Agency institution on the disqualified list. This review of their proposed Simply Allow the Existing Agreement rule clarifies that when this situation disqualification (if adequate corrective To Expire, Regardless of Whether the occurs, State agencies must disqualify action has not been taken by the Institution Chooses To Pursue an the institution for failing to correct the institution and/or the individual). Part Administrative Review? serious deficiency, after which FNS will I(E) of the preamble discusses the No. To allow the existing agreement place the institution on the National special procedures for administrative disqualified list. This will prevent an review of the proposed disqualification with a renewing institution to expire would not be consistent with the ARPA institution with serious deficiencies of responsible principals and from using termination for convenience responsible individuals. requirement that an institution have the opportunity for an administrative as a means to avoid being placed on the What Is the Effect of Determining That review prior to the termination of its National disqualified list. In order to a New Institution Is Seriously Deficient, agreement, nor would it be consistent provide institutions notice of the Considering That the Institution Had with the statute’s intent that, once an consequence of a voluntary termination Not Yet Entered Into an Agreement With institution is declared seriously of an agreement, this rule requires State the State Agency? deficient, it must either correct the agencies to disclose this consequence in As noted above, a State agency would deficiency or be terminated and placed the notices of serious deficiency, determine that a new institution is on the National Disqualified list. Thus, suspension, proposed termination, and seriously deficient only in rare this rule requires the State agency to proposed disqualification. circumstances, such as the submission provide a short-term extension of the 3. Corrective Action Timeframes of false information on its application. existing agreement, pending the (§ 226.6(c)(4)) In such a case, the outcome of this outcome of the administrative review. If process (if the new institution failed to the administrative review official rules How Long Does an Institution Have To correct the serious deficiency) is denial in favor of the State agency, the State Correct a Serious Deficiency? of the application and disqualification agency must then deny the renewal In general, this rule establishes a 90 of the institution and the principal(s) application, terminate the extended day limit on the time a State agency may and individual(s) responsible for the agreement, and disqualify the allot for corrective action. However, a serious deficiency (unless the institution and the responsible State agency may allow no longer than institution prevailed in an principals and responsible individuals. 30 days if the serious deficiency is based on a finding that the institution administrative review). Disqualification In Effect, Doesn’t This Mean That the engaged in unlawful practices, prevents these parties from participating State Agency’s Denial of an Application submitted a false or fraudulent claim or in the Program as part of a different From a Renewing Institution Has No information to the State agency, or has corporation or in a different State. Effect on the Institution’s Participation, Also, a new institution may not been convicted of or concealed a Pending the Outcome of Its participate in the Program pending criminal background. Nothing in this Administrative Review? completion of an administrative review section is intended to permit an of its proposed disqualification. ARPA’s That is correct. Denial of the renewal institution to submit an invalid claim requirement that, under most application has no impact on the for reimbursement during the period of circumstances (see Part I(E) below for institution’s participation in CACFP corrective action, or for the State agency further discussion), institutions be until either (1) the time allotted for the to pay such a claim. permitted to participate pending institution to request an administrative May a State Agency Ever Provide an completion of their administrative review expires without the institution Institution With More Than 90 Days To review does not apply because the new requesting an administrative review or Correct a Serious Deficiency? institution was not participating in the (2) the administrative review official Program at the time of the denial of its rules in favor of the State agency, at Yes. For serious deficiencies requiring application. which time the extended agreement the long-term revision of management must be terminated. This approach systems or processes, the State agency What Happens if the State Agency provides consistency with the treatment may permit the institution to have more Determines That a New Institution Has of participating institutions determined than 90 days to complete the corrective Successfully Corrected the Serious to be seriously deficiency mid- action, as long as a corrective action Deficiency? agreement. It also may discourage a plan is submitted to and approved by If the State agency determines that the State agency from inappropriately the State agency within 90 days (or such institution has taken corrective action to waiting to deny the application of a shorter deadline as the State agency may fully and permanently correct the renewing institution instead of taking establish). The corrective action plan serious deficiency, the State agency earlier action to terminate the must include milestones and a definite must offer the institution an opportunity institution’s agreement based on a completion date that the State agency to resubmit its application. The State serious deficiency. will monitor. The finding of serious
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deficiency will remain in effect until the 4. Suspension of an Institution’s How Long May a Suspension Last? State agency determines that the Participation (§ 226.6(c)(5)) A suspension remains in effect until institution has corrected the serious May a State Agency Ever Terminate a the serious deficiency is corrected (in deficiencies within the allotted time. Participating Institution’s Agreement the case of a suspension based on a false May a State Agency Provide an Before Completion of Its Administrative or fraudulent claim) or the completion Institution With Less Than 30 or 90 Review? of any administrative review of the proposed termination. However, this Days To Correct a Serious Deficiency? Section 243(c) of ARPA amended rule stipulates that in no case may a Yes. Thirty and 90 days are only the § 17(d)(5)(D)(i) of the NSLA to state that, suspension last longer than 120 days. maximum amount of time a State ‘‘An institution * * * shall be provided Although the 120-day limit in § 17 of a fair hearing * * * prior to any agency may provide an institution to the NSLA is linked to a suspension for determination to terminate participation correct various types of serious false or fraudulent claims, we have by the institution * * *’’ This means deficiencies (except for serious adopted this limit as a reasonable period that if an institution requests an of suspension for health and safety deficiencies requiring the long-term administrative review of a proposed revision of management systems or reasons as well. After 120 days, we termination, its Program agreement may would expect the appeal process to be processes as discussed above). not be terminated until the completion concluded and would further expect Depending on the nature or severity of of the administrative review. This is that, in the case of an imminent threat the problem, State agencies may more fully discussed in Part I(E) of the to health and safety, the appropriate establish shorter periods for corrective preamble below. licensing officials would have taken action. For example, a sponsoring However, §§ 17(d)(5)(C)(ii) and action to suspend or revoke an organization that fails to pay its 17(d)(5)(D)(ii)(I) of the NSLA (as institution’s license. providers in accordance with the amended by § 243(c) of ARPA and regulations at § 226.16(g) should be May the State Agency Later Reimburse § 307(c) of the Grain Standards Act) given only the time until it receives and the Institution for Meals Served and provide for the ‘‘suspension’’ of an disburses the next month’s provider Administrative Costs Incurred if the institution’s participation prior to any payments to rectify the situation, not 90 Institution Prevails in Its Administrative administrative review of the proposed Review? days. Even when the maximum termination in two situations: corrective action periods are used, a • Yes. The institution may continue to State agency may also establish interim If the State agency determines that operate at its own risk during the period deadlines (e.g., 30- and 60-day reports) there is imminent threat to the health or of suspension. If the suspended for the institution to document its safety of a participant, or the entity institution prevails in the administrative progress toward correcting deficiencies. engages in any activity that poses a review, the State agency must pay any threat to the public health or safety, the claims for reimbursement for eligible How Can the State Agency Tell if an State agency must suspend the meals served and allowable Institution’s Corrective Action Will institution’s participation, without the administrative costs incurred during the ‘‘Fully and Permanently Correct’’ the opportunity for corrective action; and suspension period. Serious Deficiency? • If the State agency alleges that an If the Suspended Institution Is a institution has knowingly submitted At a minimum, the State agency must Sponsoring Organization, Will Its false or fraudulent claims for Sponsored Facilities Lose Their Program review documentation submitted by the reimbursement, the State agency may institution that demonstrates the serious Benefits During the Period of the suspend the institution’s participation Suspension? deficiency has been corrected in such a after completion of an independent manner that it is unlikely to recur. review, but prior to the conclusion of No. Amended § 17(d)(5)(ii)(III)(ee) of Often, the State agency will have to the administrative review of the the NSLA requires the State agency ‘‘to conduct an onsite review to determine proposed termination. ensure that payments continue to whether the corrective action has been sponsored centers and family and group The NSLA recognizes that, in some taken and whether it fully and day care homes meeting program instances, continued participation permanently corrected the serious requirements’’ during the period of their pending completion of the termination deficiency. sponsor’s suspension. proceedings and any administrative Some corrective actions ‘‘look good review would be inappropriate due to What Does ‘‘Immediate Suspension’’ on paper,’’ but do not permanently the danger to participants, to the public, Mean When ‘‘Public Health or Safety’’ Is resolve the longer-term problem which or to the Program’s integrity. The Threatened? gave rise to the serious deficiency that suspension of day care homes is Because an institution (except for a was identified. If, for example, a discussed in Part III. family day care home sponsoring sponsoring organization documented What Is ‘‘Suspension’’? organization, which does not actually that it had assigned additional staff to provide care to children) may not monitoring to address an inability to This rule amends § 226.2 to define participate in CACFP without a license perform the required number of facility ‘‘suspended’’ as the status under which or alternate approval, and because the reviews, but did so by transferring an institution or day care home is law uses the phrase ‘‘imminent threat’’ claims staff and compromising its temporarily ineligible for Program to health or safety, we believe that ability to properly process claims, it participation (including Program Congress intended to provide State would have addressed one deficiency by payments). Although the Program agencies with the authority to suspend creating another. Therefore, we urge agreement has not been formally participation prior to formal revocation State agencies, whenever possible, to terminated, the institution or day care of the institution’s license or approval. make onsite visits to verify and evaluate home may not participate in the Thus, if State health or licensing an institution’s implementation of Program during the period of officials have cited an independent corrective action. suspension. center for serious health or safety
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violations, the State agency must What Is the Purpose of This What if the Suspension Review Official immediately suspend the center’s ‘‘Independent Review’’ (Referred to as a Upholds the State Agency, but the CACFP participation prior to any formal ‘‘Suspension Review’’ in This Rule)? Administrative Review Official Later action to revoke the independent Upholds the Institution? center’s licensure or approval. However, The purpose of the suspension review if a State agency finds unhealthy or is to allow the State agency and the In that case, the institution may claim unsafe conditions that pose an institution an opportunity to present retroactive reimbursement for eligible imminent threat to health or safety written documentation relating to the meals served and any allowable when conducting a review, and the allegation of a false or fraudulent claim expenses incurred during the licensing agency cannot make an prior to the suspension of Program suspension period. immediate onsite visit, there may be a payments. The law requires the 5. FNS Determination of Serious delay before the State CACFP agency suspension review official to Deficiency (§ 226.6(c)(6)) can act. In these cases, this rule requires ‘‘determine, based on the review, the State agency to immediately notify whether the State agency has Under the current regulations at the appropriate State or local licensing established, based on a preponderance § 226.6(c), FNS may independently and health authorities and to take action of the evidence, that such institution determine that an institution is that is consistent with the has knowingly submitted a false or seriously deficient. This rule retains this recommendations and requirements of fraudulent claim for reimbursement.’’ authority, but moves it to § 226.6(c)(6). those authorities. This rule calls such a review the This rule also revises the procedures for In situations involving threats to ‘‘suspension review’’ to distinguish it FNS determinations of serious public health or safety, there is no from the administrative review that an deficiency to make them parallel to the opportunity for the independent center institution may seek once a suspension revised procedures for State agencies’ to take corrective action, nor would for false or fraudulent claims has been determinations of serious deficiency there be a ‘‘notice of intent to suspend imposed. and adds procedures for FNS payments’’ (see the next question and suspending an institution if there is an answer below for applicability in Does the Law Stipulate Procedures Pertaining to the Suspension Review? imminent threat to the health and safety suspensions for submission of false or of participants or the institution has fraudulent claims). This approach Yes. The law requires that, in making submitted a false or fraudulent claim. recognizes the seriousness of these his or her determination, the suspension We do not envision the frequent use situations. Instead, the State agency review official consider written of this authority. Generally, State must simultaneously provide the documentation submitted by the State agencies will be in the best position to independent center with a notice of agency and the institution. This rule detect and take action with respect to serious deficiency; a notice of intent to requires State agencies to give seriously deficient institutions. Even terminate participation and disqualify institutions at least ten days to request when dealing with serious deficiencies the institution and any responsible an initial suspension review and to detected during audits or investigations principals or responsible individuals; submit written documentation opposing conducted by USDA’s Office of and a notice that Program payments the suspension. Inspector General, it is the State agency, have been suspended pending the and not FNS, that will declare the completion of the administrative review What Happens if the Suspension institution seriously deficient, monitor (if one is requested by the independent Review Official Determines That the corrective action, and take any center). Proposed Suspension Is Not Appropriate? additional actions that may be How Does the Process for Suspensions warranted. However, in dealing with Based on False or Fraudulent Claims No action is taken to suspend the multi-State or multi-regional Differ From Those Based on Imminent institution’s Program participation. institutions, FNS may be in the best Threats to Health or Safety? However, the State agency’s serious position to coordinate actions in The law now mandates suspensions deficiency determination remains in response to the serious deficiency. In whenever a State agency determines effect and the institution must still take addition, because we are now more that there is imminent threat to health corrective action within the specified likely to participate with State agencies or safety and specifies that there is no timeframe. If the State agency in joint reviews of institutions, it is opportunity for corrective action in determines that the corrective action did possible that we would declare a serious these cases. The law specifies a not fully and permanently correct the deficiency if the State agency was somewhat different approach for cases serious deficiency, the State agency unwilling to do so. in which a State agency determines that would proceed to send a notice of 6. National Disqualified List (§§ 226.2 an institution has knowingly submitted proposed termination and proposed and 226.6(c)(7)) false or fraudulent claims for disqualification. The institution would reimbursement. In these cases, State then have the opportunity to request an The current regulations state that FNS agencies are authorized, but not administrative review of the proposed will maintain a list of institutions whose required, to suspend Program actions. The suspension review is a participation has been terminated or participation. In addition, suspensions limited review at a preliminary stage whose application has been denied due based on allegations of false or and only determines whether Program to serious deficiencies. Section 243(c) of fraudulent claims may be made only participation and Program payments ARPA added a new § 17(d)(5)(E) to the after a review by an ‘‘independent and continue. The suspension review does NSLA, which expands the list’s scope impartial official.’’ The law defines an not resolve the question of whether the by requiring the Secretary to ‘‘maintain independent and impartial official as a institution has been seriously deficient, a list of institutions, sponsored family or person ‘‘other than, and not accountable whether the corrective action is group day care homes, and individuals to, any person involved in the adequate, or whether the proposed that have been terminated or otherwise determination to suspend the termination of the institution’s disqualified from participation in the institution.’’ agreement is justified. program,’’ and make the list available to
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State agencies for their use in reviewing § 226.6(c)(3)(i) (disqualifications by rule, if the institution or individual on applications to participate. another State agency). the existing list fails to repay debts owed under the Program, they will What Is the National Disqualified List? How Long Will an Entity Remain on the remain on the list until the debt has List? As discussed in Part I(D)(2) of this been repaid. Institutions and responsible preamble, this rule adopts ARPA’s What Happens to Sponsored Facilities approach of distinguishing between principals and responsible individuals will remain on the list until FNS, in When Their Sponsoring Organization’s seriously deficient institutions and Agreement Is Terminated? disqualified institutions, individuals, consultation with the appropriate State and day care homes. In furtherance of agency, determines that the serious After the State agency issues a notice this approach, this rule amends § 226.2 deficiency(ies) that led to their of proposed termination to a sponsoring to define the list of institutions, placement on the list has(ve) been organization, it will work with other responsible principals and responsible corrected, or until seven years have sponsoring organizations in the State to individuals, and day care homes elapsed since they were disqualified ensure that there is no disruption of disqualified from Program participation from participation. Day care homes will Program benefits to sponsored facilities as the ‘‘National disqualified list.’’ remain on the list until the State agency that will be affected when their determines that the serious sponsoring organization’s agreement is How Does an Entity Get Put on the List? deficiency(ies) that led to their terminated. As noted in Part III(C) of placement on the list has(ve) been this preamble, below, ARPA’s An institution or day care home will corrected, or until seven years after they restriction on day care home transfers be placed on the list only after having were disqualified from participation. from one sponsoring organization to been declared seriously deficient, Similar to the past performance and another specifically allows a State having an opportunity for corrective criminal background eligibility criteria agency to waive the provision for a day action, failing to take corrective action, discussed in Part I(A)(4) of the care home when its sponsoring and losing an administrative review (or preamble, above, we established seven organization’s Program agreement has failing to request an administrative years as the maximum period of an been terminated. review in a timely manner). Similarly, institution’s or individual’s responsible principals and responsible disqualification. As noted previously in What About Sponsored Centers? individuals must first be named as this preamble, the seven-year period ARPA did not require us to establish responsible for an institution’s serious underscores the importance of ensuring a procedure for terminating the deficiency(ies), receive an opportunity Program integrity, while recognizing the agreements of centers that participate for corrective action, fail to take need to provide these individuals and under a sponsoring organization. corrective action, and lose an institutions with a ‘‘second chance’’ at However, in some instances the person administrative review (or fail to request potential Program participation responsible for a sponsoring an administrative review in a timely following a predictable period of time. organization’s serious deficiency(ies) manner). At this point, the institution, However, if the institution, responsible might be a person employed by or day care home, or responsible principal principal or responsible individual, or otherwise associated with a sponsored or responsible individual is disqualified day care home has failed to repay debts center, rather than with the sponsoring from Program participation and placed owed under the Program, they will organization itself. Similarly, an on the National disqualified list, and is remain on the list until the debt has institution that is on the National prohibited from participating in the been repaid. disqualified list as an independent Program as an institution, sponsored center should not be able to avoid the center, day care home, or principal until What Will Happen to the Institutions effect of that disqualification by re- removed from the list. and Individuals on the Prior FNS List? entering the Program as a sponsored What if an Institution Participating in Institutions and individuals placed on center. Finally, an individual who is on Several States Is Disqualified by FNS or the FNS list of ‘‘seriously deficient’’ the National disqualified list should not a State Agency in Another State? institutions prior to publication of this be permitted to participate in the rule will be transferred to the new Program as a family day care home If an institution that participates in National disqualified list and will provider or as a principal in a sponsored the Program in more than one State is remain on that list until FNS center or an independent center. disqualified from the Program by FNS or determines, with the concurrence of the Therefore, this rule makes two another State agency, any State agency appropriate State agency, that the changes designed to prevent such holding an agreement with the serious deficiency(ies) that led to their situations, any of which pose a threat to institution must also terminate the placement on the list has(ve) been the Program’s integrity. First, this rule institution’s agreement. This action corrected, or until July 29, 2009 (i.e. amends § 226.2 to further define must be taken within 45 days of the date seven years after the effective date of ‘‘responsible principal or responsible of the disqualification by FNS or the this rule). As noted previously in this individual’’ to include a principal or other State agency. Because the preamble, establishing the seven year individual associated with a sponsored institution will have already had the period for institutions and individuals center who is responsible for the center opportunity for an administrative already on the list brings the previous sponsor’s serious deficiency(ies). This review covering the failure to correct the list into conformance with the means that anyone responsible for the serious deficiencies that led to the requirements being promulgated in this center sponsor’s serious deficiency(ies) initial disqualification, other State rule, and provides these institutions and is subject to a proposed disqualification, agencies are prohibited from offering the individuals with a bar on their Program regardless of whether he or she is institution an administrative review of participation for a predictable period of associated with the sponsoring the termination action to be taken by the time, before automatic removal from the organization of centers, or with a other State agencies. These list. As with the institutions or sponsored center. Second, this rule requirements are in § 226.6(c)(6)(ii)(G) individuals placed on the National amends §§ 226.16(b) and 226.6(b)(12) to (disqualifications by FNS) and disqualified list after publication of this prohibit a sponsoring organization from
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submitting an application on behalf of a preamble, below) and those institutions regarding the implementation of the sponsored facility (or a State agency and responsible principals and ARPA provisions. from approving such an application) if responsible individuals in the State that Why Is It Necessary for State Agencies the facility itself or one of its principals have been declared seriously deficient. and FNS To Have This Information? is on the National disqualified list. This In the interest of preserving flexibility will prevent family day care homes or for State agencies, the list may be kept The changes to serious deficiency, sponsored centers on the National in paper form, electronic form, or in corrective action, administrative review disqualified list from re-entering the retrievable, individual case files within and termination procedures mandated Program. It will also prevent an the State agency. In the case of by ARPA were extensive, and had the individual on the list for actions institutions and responsible principals potential to profoundly impact the committed while associated with a and responsible individuals, the list will Program. FNS must be able to quantify sponsor of centers from re-entering the include information about all of the the impact of these changes, in order to Program as a sponsored center, or an possible results after the State agency’s assess the frequency with which certain individual on the list for actions transmission of a notice of serious actions are being taken, as well as the committed while a principal in a deficiency (along with an identification effectiveness of the changes. State sponsored center from re-entering the of the principals and/or individuals agencies must also be able to have data Program as a principal in another responsible for the serious deficiency): that will allow them to assess their own institution (an independent center or a successful corrective action; implementation of these changes, sponsoring organization of homes and/ unsuccessful corrective action followed identify any additional changes needed, or centers). by notification of proposed termination and identify trends and training needs and/or disqualification; suspension; Why Not Just Include Day Care Homes for State agency or institution staff. administrative review; and agreement and Sponsored Centers on Separate termination. This rule amends § 226.2 to What Must Be Done When the Rule State-Level Lists? add a definition of ‘‘State agency list’’ Requires the State Agency To ‘‘Update’’ In most cases, a State-level list would (either as actual lists or retrievable the State Agency List? be sufficient to ensure that disqualified records) and adds § 226.6(c)(8), which For each institution declared institutions, sponsored centers, day care requires each State agency to maintain seriously deficient, and for each homes, and responsible principals and a State agency list. institution filing a request for an responsible individuals do not administrative review, the State agency participate in the Program, either Why Bother With a Separate State-Level List? will ‘‘update’’ the list whenever the next directly or as a principal. In some cases, stage of action occurs. For example, though, these entities may attempt to A State-based list will be useful for when an institution is declared evade their disqualification by seeking analytic purposes. Although the seriously deficient, the State agency is to participate in the Program in a National disqualified list will provide a required to add the institution to the different State. In order to address this complete picture of all institutions, State agency list, as well as the basis for situation, and for consistency and individuals, and day care homes that the determination of serious deficiency. simplicity, all disqualified entities will have been disqualified and are ineligible Then, if the institution fully and be included on a single National-level for Program participation, the National permanently corrects the serious list. For the same reason, this rule list will not capture a great deal of deficiency within the allotted time, the requires State agencies and sponsoring additional information that is necessary State agency records on the list that the organizations to check the National for State agencies and FNS to assess the corrective action is complete. Similarly, disqualified list (rather than a State- full impact of the ARPA provisions. For an institution requesting an level list) before approving an example, many institutions will be administrative review of an overclaim application from an institution, declared seriously deficient but will would be placed on the list, as well as sponsored center, or day care home. never appear on the National list, either the result of the administrative review. As noted in § 226.6(c)(7), we will because they successfully completed What About State Agencies That make the National disqualified list corrective action or because an available to all State agencies and all Already Have Lists of Disqualified Day administrative review official Care Homes? sponsoring organizations. This will overturned the State agency’s proposed permit State agencies and sponsoring termination of the institution’s Any State agency that has a list of organizations to consult a single list agreement. In order to properly assess disqualified day care homes on July 29, when determining whether an ARPA’s impact on Program management 2002 may continue to prohibit institution, sponsored center, or day and integrity, it is critical for State participation by those day care homes. care home is eligible for Program agencies and FNS to have information However, as with those institutions and participation. To facilitate use of the about the number of institutions individuals on the prior FNS list of National disqualified list, we are declared seriously deficient that were ‘‘seriously deficient’’ institutions, the currently pursuing plans to make the never placed on the National State agency must remove a day care list available in a password-protected disqualified list, as well as the ways in home from its prior list no later than the electronic format. which serious deficiencies were time at which the State agency 7. State Agency List (§§ 226.2 and ultimately resolved short of termination. determines that the serious 226.6(c)(8)) The State agency list established in this deficiency(ies) that led to their rule will capture information about the placement on the list has(ve) been What Is the State Agency List? ultimate disposition of each case in corrected, or July 29, 2009 (i.e. seven The State agency list will include which an institution was declared years after the effective date of this those day care homes terminated for seriously deficient. The State agency list rule). However, if the day care home has cause (see discussion of serious will be made available to FNS by the failed to repay debts owed under the deficiency and termination procedures State agency upon request, so that it is Program, it must remain on the list until for day care homes in Part III(F) of the possible to analyze National trends the debt has been repaid.
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E. Administrative Reviews for that a seriously deficient institution that the recovery of an advance is Institutions and Responsible Principals failed to take the required corrective subject to administrative review (see the and Responsible Individuals (§§ 226.2 action within the allotted time, it additional discussion of the recovery of and 226.6(k)) notifies the institution that the State advances under ‘‘What is the effect of agency is proposing to terminate the the State agency action while the What Changes to the Administrative institution’s agreement and proposing to administrative review is pending?’’) Review Procedures for Institutions Were disqualify the institution and the Mandated by ARPA? Are There Any Actions That Are Not responsible principals and responsible Subject to Administrative Review? Before ARPA, § 17(e) of the NSLA individuals. The State agency must also required State agencies administering notify the institution and the Yes. Even under the current CACFP to ‘‘provide, in accordance with responsible principals and responsible regulations State agencies are not regulations issued by the Secretary, a individuals that they may seek an required to provide an administrative fair hearing and a prompt determination administrative review of the proposed review of all actions. However, State to any institution aggrieved by the actions. However, if an administrative agencies have informed us that, absent action of the State as it affects the review is requested, the State agency a clear delineation in the regulations of participation of such institution * * * must continue to pay any valid unpaid what is and is not appealable, they or its claim for reimbursement under claims for reimbursement for eligible sometimes find themselves defending this section.’’ Current CACFP meals served and allowable actions that were not intended to be regulations at § 226.6(k) establish the administrative expenses incurred, appealable. This rule clarifies which minimum requirements for such unless the institution has been actions are not subject to administrative administrative reviews. However, suspended from participation based on review and groups them together in § 243(c) of ARPA added § 17(d)(5)(D)(i) health or safety violations or false or § 226.6(k)(3). to the NSLA to require that, ‘‘An fraudulent claims (as discussed in Part institution or family or group day care Are Serious Deficiency Determinations I(D)(4) of this preamble). Even if Subject to Administrative Review? home shall be provided a fair hearing in Program payments are suspended, the accordance with subsection (e)(1) actual termination of the institution’s No. Currently, seriously deficient [§ 17(e)(1) of the NSLA] prior to any agreement does not occur until after the determinations are not subject to determination to terminate participation administrative review official’s decision administrative review. This does not by the institution or family or group day is rendered. change as a result of ARPA, which care home under the program’’ anticipates an administrative review (emphasis added). This provision Did ARPA Change the Actions That Are only after an institution is notified that substantially changes the sequence of Subject to Administrative Review? its corrective actions to resolve a serious events leading up to an institution or Yes. As noted above, the new deficiency were incomplete or day care home’s termination from the procedures mandated by ARPA require inadequate. A serious deficiency finding Program and for the first time State agencies to offer an administrative only serves to inform an institution that establishes a requirement to offer review to an institution prior to the it is out of compliance with Program administrative reviews to day care termination of its agreement. This requirements and that certain other homes. The effect of this change on day change requires several revisions to actions will occur if the institution fails care homes is discussed in Part III(F) of § 226.6(k) dealing with the actions that to take corrective action within the this preamble, while the effect on the are subject to administrative review. allotted time. There is no effect on the termination of institutions’ agreements These mandated changes also provide institution’s valid claim for is discussed here. an opportunity to reorganize § 226.6(k) reimbursement or participation unless it Under regulations in effect until and to make other necessary changes to fails to take corrective action to correct October 18, 2000 (the required § 226.6(k) governing administrative the serious deficiency within the implementation date for ARPA’s CACFP reviews. allotted time. amendments on termination and First, this rule groups all actions that administrative reviews), if an institution are subject to administrative review in Do State Agencies Have To Provide was determined seriously deficient and § 226.6(k)(2). Second, this rule clarifies Administrative Reviews to Responsible failed to complete the required that it is the notice of proposed Principals and Responsible Individuals? corrective actions within the allotted termination of an institution’s Yes. As noted above, this rule clarifies time, the State agency notified the agreement that is subject to in § 226.6(k)(2)(iv) that State agencies institution that its Program agreement administrative review. The termination must provide responsible principals and was terminated and that the institution of the agreement does not occur until responsible individuals an could seek an administrative review of after the administrative review, and administrative review of any notice of this action. All Program payments to the then only if the institution did not proposed disqualification. However, in institution ceased on the effective date prevail. As a result of ARPA, the actual most instances the institution’s of the termination notice. If the termination of the institution’s underlying serious deficiencies will be institution sought an administrative agreement is no longer subject to inextricably connected with the review of the termination, and its administrative review because the proposed disqualification of the participation was restored as a result of administrative review has already responsible principal or responsible the administrative review, it could seek occurred. individual. As a result, this rule reimbursement for eligible meals served Third, this rule clarifies in specifies in § 226.6(k)(8) that the State and allowable administrative costs § 226.6(k)(2)(iv) that State agencies must agency must in most instances combine incurred during the period between the provide responsible principals and the administrative review for the effective date of the termination and the responsible individuals an responsible principal or responsible decision on the administrative review. administrative review of any proposed individual with the administrative Under the new procedures mandated disqualification (see below for a further review for the institution. by ARPA, a different sequence of events discussion of this issue). Finally, this There may be rare instances in which takes place. If a State agency determines rule makes clear in § 226.6(k)(2)(viii) the interests of the institution and the
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responsible principal or responsible official issuing the termination decision, seven years that indicated a lack of individual conflict. This might occur or because the institution can only business integrity (§§ 226.6(b)(14) and when the person responsible for the contact the hearing official by first 226.15(b)(8)). In each of these cases, the institution’s serious deficiency acted contacting the State agency. It has long institution or the principals will have wholly without the knowledge of any of been our position that the mere fact that already had an opportunity to refute the the institution’s principals and without an administrative review official is in charge (i.e. the action that led to the benefit to the institution. In such cases, the same organization as the official placement on the National disqualified and at the administrative review who issued the action under review list, the ineligibility determination for official’s discretion, separate does not, by itself, undermine the the other public program, or the administrative reviews may be held if administrative review official’s criminal conviction). To offer a ‘‘full’’ the institution does not request an impartiality. This rule makes clear in administrative review in this case administrative review or if either the § 226.6(k)(4)(vii) that ‘‘independent and would lead to a false expectation that institution or the responsible principal impartial’’ means that a person is the institution or responsible principal or responsible individual demonstrates prohibited from serving as an or responsible individual would get a that their interests conflict. administrative review officer in any case second chance to prove that the in which he or she was involved in the When Handling an Administrative underlying action did not occur. These action that is the subject of the Review, Are There Standard Procedures issues will have been fully reviewed by administrative review, or if he or she That All State Agencies Must Follow? the appropriate authority and we do not has a direct personal or financial intend to permit a second Yes. The current CACFP regulations interest in the outcome of the administrative review. Nor do we see permit State agencies either to establish administrative review. This rule also the benefit of requiring a ‘‘full’’ their own administrative review requires State agencies to permit administrative review in cases in which procedures (subject to several basic institutions and responsible principals the only issue will be whether or not the requirements) or to follow the more and responsible individuals to contact affected party is really the same party detailed administrative review the administrative review official that appears on the National procedures set out in § 226.6(k)(1)–(12). directly if they so desire. disqualified list, was declared ineligible This has caused some confusion over Section 226.6(k)(7) currently requires for another publicly funded program, or the years. This rule requires State that State review officials base their was convicted. agencies to develop their own determinations on materials provided The second type of action is the administrative review procedures by the appellant and the State agency denial of a new or renewing institution’s consistent with certain requirements and on Program regulations. Some application or the termination of a specified by this rule. The majority of administrative review officials have participating institution’s agreement those requirements are the same as are read this to mean that they did not need based on the submission of false found in § 226.6(k)(1)–(12) of the to follow requirements in the statute or information on the institution’s current regulations. We hope that this in other Federal regulations or Federal application, including the concealment approach will result in greater or State interpretations of those of a criminal background uniformity throughout the Nation, while requirements (such as policy (§§ 226.6(c)(1)(ii)(A), (c)(2)(ii)(A), still permitting State agencies some memoranda or guidance). This (c)(3)(ii)(A)). Again, these cases present flexibility. This uniformity will help provision was meant to make clear that only a narrow factual issue of whether ensure consistent action in all cases administrative review officials are to the information submitted is indeed involving violations of Program base their decision solely on the requirements, and should lessen the application of Program requirements to false. This issue can be adequately chances of having administrative review the facts in the case, as reflected in the addressed through written submissions. decisions overturned by the courts. submissions by the institution and the For these reasons, this rule limits the Uniform practice will be especially State agency. It is not the administrative administrative review of these areas to useful to institutions operating in more review official’s role to determine the a review of written submissions than one State and is imperative at a validity of existing Federal or State concerning the accuracy of the State time when we are working with State requirements. These are legal issues for agency’s determination that: (1) the agencies to improve Program the courts. We have clarified this point institution, one of its sponsored management. These uniform standards in this rule (§ 226.6(k)(4)(viii)). facilities, or one of the principals of the institution or its facilities is on the are set forth at newly-reorganized What Is an ‘‘Abbreviated’’ § 226.6(k)(5). National disqualified list, has been Administrative Review? determined ineligible to participate in Are There Any Changes to the Current ARPA does not specify the type of another publicly funded program, or has Administrative Review Procedures? ‘‘fair hearing’’ that must be provided to been convicted of an offense indicating Yes. In addition to requiring all State institutions. We have determined that a lack of business integrity; or (2) agencies to comply with the procedures there are two types of actions for which information submitted on the in §§ 226.6(k)(1)–(12) of the current requiring a ‘‘full’’ administrative review institution’s application is, in fact, false. regulations, this rule makes minor (with the right to a hearing, etc.) is not We call this an ‘‘abbreviated’’ changes to the language set forth at warranted. The first is the denial of a administrative review. new or renewing institution’s current §§ 226.6(k)(6) and (7), as Part II. State Agency and Institution application because the institution or discussed below. Review and Oversight Requirements Section 226.6(k)(6) currently requires any of its principals are on the National that State review officials be disqualified list (§ 226.6(b)(12)), have ARPA mandated three changes to independent and impartial. Institutions been declared to be ineligible for State agency and sponsoring have sometimes argued that the another publicly funded program during organization monitoring requirements. administrative review officials are not the prior seven years (§§ 226.6(b)(13) These changes require that: truly ‘‘impartial’’, either because they and 226.15(b)(7)), or have been • Sponsoring organizations conduct are in the same organization as the convicted of an activity in the past at least one unscheduled (unannounced)
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review of each facility they sponsor in many sponsors in other States use The primary purpose of this provision a three-year period; scheduled reviews as opportunities to is to spare sponsoring organizations • Sponsoring organizations employ provide Program training and nutrition unwarranted expense in conducting ‘‘an appropriate number of monitoring education. Promulgating a Federal unannounced reviews and not finding personnel based on the number and requirement to make all reviews the provider at home, especially when characteristics’’ of facilities they unannounced would take away this the sponsor monitor must travel long sponsor; and flexibility for State agencies, a concern distances to conduct the review. In • State agencies review each especially in day care homes where addition, the requirement to notify the institution in their State no less providers need advance notice in order sponsoring organization when a frequently than once every three years. to participate in training during a provider is planning to be out of her These changes are discussed below. monitoring review. Therefore, this rule home during the meal service period is A. Unannounced reviews amends § 226.16(d)(4) to require that essential to Program integrity because it two of the three annually required will allow the sponsor the option to Was It the Intent of ARPA To Reduce reviews of sponsored facilities be review the off-site meal service if it so Current Requirements for Sponsoring unannounced. If the third review is desires. Organization Reviews of Their scheduled, rather than unannounced, Does This Rule Impose Any Other Facilities? then the sponsor may use that visit to Requirements Relating to Unannounced No. Section 243(b) of ARPA amended provide any needed training. If the Reviews? § 17(d)(2) of the NSLA to require us to sponsor chooses to make all three Yes. This rule amends establish a policy under which annual reviews unannounced, or the § 226.16(d)(4)(iv) to address the unannounced reviews are made to State agency requires that all reviews be situation in which a sponsoring sponsored facilities at least once every unannounced, the training needs of the organization detects one or more serious three years, and at least one review is sponsored center or day care home may deficiency in a review of a facility. made to each facility each year. be met in another manner (e.g., by Serious deficiencies are those listed in Currently, § 226.16(d) of the regulations providing training at a convenient location outside of normal business § 226.16(l)(2), regardless of the type of requires sponsoring organizations to facility. In such cases, this rule requires review each facility they sponsor at least hours, or by providing on-line training through the Internet), or by making an the next review of the facility to be three times each year, unless they obtain unannounced. permission to perform an average of additional visit to the facility to provide three reviews for all of their facilities. training. What Procedures Must Be Followed When a Sponsoring Organization Makes When considering the Conference Will Unannounced Reviews Be an Unannounced Review? Report on ARPA, Senator Lugar, then- Effective? What if the Provider Is Not Chairman of the Senate Agriculture Home When the Unannounced Review In recognition of the unique nature of Committee, emphasized that the Is Made? providing day care, especially in one’s Department should view the monitoring private residence, and in order to requirements in ARPA as minimums, A day care home provider’s protect the privacy of Program operators and may strengthen the requirements as unexplained absence could indicate a and the children they serve, this rule necessary (Congressional Record, May serious accountability problem that the establishes several procedural 25, 2000, S. 4439). This rule retains the sponsor needs to address. In order to requirements for unannounced reviews. current regulatory requirement of three minimize this possibility, this rule adds We also strongly recommend that State reviews per facility per year. § 226.18(b)(14) to require that a provider agencies consult their legal counsel to notify their sponsoring organization in What Is an Unannounced Review? ensure that any State statutes or advance whenever the day care home administrative rules are reflected in the This rule adds a definition to § 226.2 provider is planning to be out of their State agency’s procedures for stating that an ‘‘unannounced review’’ is home with the children during the meal conducting unannounced reviews in the a review for which no prior notice is service period. This will better enable CACFP. However, at a minimum, the given to the facility or institution. We sponsoring organizations to plan their requirements pertaining to also wish to stress that State agencies unannounced reviews in the most cost- unannounced reviews specified in this and sponsoring organizations should effective manner possible. If a provider regulation must be met. Thus, this rule not routinely follow the same cycle in fails to notify the sponsor and an amends § 226.16(d)(4)(vi) to specify that conducting unannounced reviews (e.g., unannounced review is made during a unannounced reviews must be made always reviewing providers in a scheduled meal time, claims for meals only during the facility’s normal hours particular town or neighborhood during that would have been served during the of child or adult care operations, and the last two weeks of a calendar unannounced review must be monitors making such reviews must quarter). Instead, the pattern of disallowed. provide photo identification that unannounced reviews should be Sponsoring organizations or State demonstrates that they are employees of unpredictable, to ensure that the review agencies may establish additional the sponsoring organization. is genuinely unannounced. requirements regarding unannounced 2. Unannounced Reviews by State 1. Unannounced Reviews by Sponsoring reviews. Sponsoring organizations Agencies (§ 226.6(m)) Organizations (§§ 226.2 and facing high travel costs to review day Will This Rule Require That State 226.16(d)(4)) care homes, and sponsoring organizations concerned about the Agencies Make Unannounced Reviews Must a Sponsoring Organization Make potential for Program abuse by to Facilities? All of Its Facility Reviews providers who routinely claim to Yes. However, a State agency making Unannounced? provide meal service to children outside unannounced facility reviews could No. Although some State agencies their homes, may choose to impose experience greater difficulty than a require sponsoring organizations to more stringent requirements than those sponsoring organization would in make all facility reviews unannounced, promulgated in this rule. making the same review. These
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difficulties largely stem from the fact such reviews must show photo monitoring personnel based on the that State agencies are generally located identification that demonstrates that number and characteristics of child care farther away from the facilities being they are employees of one of these centers and family or group day care reviewed than are sponsors, thus entities. homes sponsored by the organization, as increasing the review’s potential cost. approved by the State (in accordance 3. Notification Requirements Nevertheless, OIG’s audit and (§§ 226.6(f)(1), 226.16(d)(4)(v), and with regulations promulgated by the investigative work strongly suggests the 226.18(d)(1)) Secretary), to ensure effective oversight need for some level of unannounced of the child care centers and family or facility reviews by State agencies as Are There Any Notification group day care homes. * * *’’ well, because those sponsors that pay Requirements Related to Unannounced inadequate attention to accountability Visits? What Approaches Were Considered To Implement This Requirement? issues are less likely to uncover serious Yes. This rule requires in Program irregularities at their sponsored §§ 226.6(f)(1), 226.16(d)(4)(v), and In assessing alternative means of facilities. Therefore, this rule requires 226.18(d)(1) that State agencies and implementing this requirement, the State agencies to conduct some sponsoring organizations notify Department considered four possible unannounced facility reviews as part of approaches: institutions and facilities that they are • their larger review of a sponsoring subject to unannounced visits by the Requiring a specific number of organization. sponsoring organization, the State facilities that each sponsor monitor would be responsible for reviewing (e.g., What Percentage of Facility Reviews agency, the Department, or other State or Federal officials. State agencies must each monitor must review 50 facilities); Conducted by a State Agency Must Be • Requiring a ceiling on the number Unannounced? include this notice in their agreements with institutions. For sponsors of day of facilities each sponsor monitor would In recognition of the potential care homes, this rule amends be responsible for reviewing (e.g., each difficulties State agencies may face in § 226.18(b)(1) to require sponsoring monitor may review no more than 75 conducting unannounced reviews of facilities per year); organizations to include in their • sponsored facilities, this rule amends sponsor-day care home agreements a Setting no numeric requirements, § 226.6(m) [previously § 226.6(l)] to provision stating that they will be but requiring each State agency to assess require that a minimum of 15 percent of reviewed on an unannounced basis, that the adequacy of staff and resources a State agency’s required facility they will make unannounced reviews devoted to the monitoring function reviews be unannounced. Thus, in a only during the facility’s normal hours when reviewing the sponsor’s State with 10,000 participating of child care operations, and that management plan; or sponsored facilities, with a requirement • Establishing a broad range of monitors conducting unannounced to conduct at least 800 facility reviews facilities per monitor, and requiring the reviews will have photo identification in a year, this rule requires that a State agency to determine where, within which demonstrates that they are minimum of 120 of those reviews (15 that range, each sponsor’s ratio of employees of the sponsoring percent of 800) be unannounced. The monitors to facilities should fall. organization. Sponsoring organizations State agency could decide whether it must amend their agreements with day Which of These Approaches Does This would be better to conduct a care homes that are participating in the Rule Incorporate, and Why? proportionate share of these reviews as a part of each sponsor review, or Program on July 29, 2002 to include this Although each of these alternatives whether facilities sponsored by notice of unannounced reviews no later has certain strengths, we chose the last organizations with problematic Program than August 29, 2002. alternative—setting a range of facilities Because sponsors of centers are not records might be more in need of per monitor and requiring the State required to enter into agreements with unannounced reviews. agency to determine where, within that their sponsored centers, this rule range, each sponsor’s ratio of facilities Does This Rule Require State Agencies amends § 226.16(d)(4)(vii) to require should fall. This approach provides To Conduct Unannounced Reviews of such sponsors to provide their centers State agencies and sponsoring Institutions? written notification of this information organizations with flexibility in meeting No. However, we encourage State about unannounced visits. For the requirement, while still setting some agencies to conduct unannounced sponsored centers participating on July broad numerical parameters for reviews of institutions when 29, 2002, the notice must be sent no sponsors and State agencies to work appropriate. The results of OIG’s audits later than August 29, 2002. For within. This rule establishes slightly have persuaded us that unannounced sponsored centers that are approved different staffing requirements for reviews of institutions can be very after July 29, 2002, the sponsoring sponsoring organizations of day care effective at detecting serious organization must provide the notice homes (50 to 150) and centers (25 to management and accountability issues before meal service under the Program 150), as explained below. that might be difficult to detect if the begins. Given the different administrative review were announced. Therefore, this B. Sponsor Monitoring Staff demands faced by sponsors in different rule adds the requirement that State (§§ 226.6(f)(2), 226.16(b)(1), and areas, we do not believe that either of agencies modify their current 226.16(d)(4)) the first two alternatives—establishing a agreements with institutions to notify single number of homes per monitor, or institutions of the right of the State What Are ARPA’s Requirements setting a ‘‘ceiling’’ on the number of agency, the Department, and other State Regarding the Staffing of the Monitoring facilities to be monitored—could be or Federal officials to make announced Function by Sponsoring Organizations? productively applied to every or unannounced reviews of their Section, § 243(a)(8)(B) of ARPA sponsoring organization across the operations; that unannounced reviews amended § 17(a) of the law to require country. For example, due to travel will be held during the institution’s that, ‘‘in the case of a sponsoring time, sponsoring organizations that normal hours of child or adult care organization, the organization shall recruit in rural areas (as encouraged by operations; and that anyone making employ an appropriate number of § 17(f)(3) of the NSLA) could need more
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monitors to properly monitor the same we estimate that day care home amount of time that home sponsors number of homes than a solely urban- sponsoring organizations will, on spend in monitoring their providers: based sponsoring organization would average, spend about 12–15 hours per roughly 12–15 hours per year, including need to properly monitor the same home annually implementing the review preparation and follow-up. number of providers. Similarly, minimum monitoring requirements Therefore, this rule amends the sponsoring organizations with larger being promulgated in this rule: three introductory text of § 226.16(d)(4), and numbers of new and/or non-English reviews per year, two of which are §§ 226.16(d)(4)(v) and 226.6(f)(2), to speaking providers would likely incur unannounced, including pre-review require a sponsoring organization of higher per-home costs in monitoring scheduling and preparation, travel centers to employ one full-time monitor than sponsors without such homes. related to the review, conduct of the for every 25–150 centers it sponsors. Finally, although the third alternative review, and post-review work. The provision of a lower end of this provides maximum flexibility to State Using a 2,080 hour work year (less range recognizes that center sponsors agencies, it does not represent a time off for vacation, illness, and administering the Program in larger meaningful change from pre-ARPA holidays), we estimate that the average centers necessarily spend more time per requirements and lacks the specificity full-time monitor would be able to review due to their review of household that some State agencies desire, and that perform a minimum of three thorough free and reduced price applications on we believe Congress intended, in reviews per year, which include all the file. We especially invite comment on passing this provision. review elements being proposed in this this requirement from center sponsors rule, for between 120–160 day care and State agencies, but ask that these What Is the Specific Requirement for homes. However, taking into account comments provide us with a detailed Sponsoring Organizations of Day Care the possible variation in the types of day account of the amount of review time Homes? care homes being sponsored, this rule typically devoted to CACFP and non- This rule amends § 226.16(b)(1) to requires that each full-time monitor be CACFP related topics at a sponsored require that every sponsoring responsible for reviewing between 50 center. organization devote the equivalent of and 150 day care homes per year, one full-time staff person to monitoring depending on the geographic How Will State Agencies Implement for each 50–150 day care homes it dispersion, experience level, and overall This Requirement for a Specific administers. composition of the sponsoring Sponsoring Organization? Our decision to specify a range of How Did USDA Decide on 50–150 as organization’s providers. facilities that each monitor could review the Appropriate Range for Sponsoring What Is the Staffing Standard for means there will be room for some Organizations of Day Care Homes? Monitoring by Sponsoring variation in each State agency’s We started by estimating the amount Organizations of Centers? application of this requirement. of time that a day care home sponsoring Although the Early Childhood and However, to ensure that there is at least organization would spend carrying out Child Care Study states that center broad uniformity among State agencies the Program’s review requirements (an sponsors currently spend about 60 in implementing this provision, this average of three reviews per home per hours per year monitoring each rule further amends § 226.16(b)(1) to year, two of which are unannounced). sponsored child care center, this figure clarify that the monitoring standard is The Early Childhood and Child Care seems implausible compared to the based on ‘‘the equivalent of one full- Study (1997) reported that, on average, estimates of time spent by sponsors in time staff person’’ (i.e. 2080 hours/year, day care home sponsoring organizations monitoring each day care home. Part of less an average employee’s time off for made five reviews or visits per home per the difference is accounted for by factors paid holidays and leave) and that the year. If this is accurate, sponsoring extraneous to the CACFP. For example, monitoring staff equivalent may include organizations of day care homes may Head Start centers participating in time spent on scheduling, travel, the respond to the unannounced review CACFP (which account for about a third review itself, follow-up and report- requirement in this rule, and the other of all CACFP centers) are visited an writing for one full-time staff year [2,080 changes in the proposed rule published average of 26 times per year (or hours]. We also wish to emphasize that on September 12, 2000, by making approximately once for every week and this time may be split among more than fewer, but more extensive, reviews and a half of operation, since many Head one person, depending on each person’s devoting more time to the review and Start centers do not operate on a year- other duties and the amount of time analysis of accountability-related round basis). However, these reviews or spent on these duties, as documented in documents such as daily meal counts, visits focus on Head Start, rather than the sponsor’s management plan. daily attendance logs, and enrollment CACFP, requirements; the proportion of In addition, this rule amends forms. In addition, the conduct of review time devoted to CACFP meal § 226.6(f)(2) to require each State agency unannounced reviews may add some service and recordkeeping requirements to develop factors (e.g., rural vs. urban, time to the performance of a typical is not known, but is likely to account for geographic dispersion of facilities, review, since some providers will not be a fairly small fraction of the overall time literacy and language proficiency of home when reviews are conducted and spent on the review. Similarly, a providers) that the State agency will others will not have required records in significant minority of center sponsors consider in determining whether a order prior to the review. In urban areas, reported reviewing or visiting their sponsoring organization has sufficient a provider’s unavailability is less likely centers once or more per week, but this monitoring staff. State agencies must to be a major problem, since other day was due to the fact that the sponsor and use these factors and the staffing ranges care homes in the vicinity can be center were co-located (i.e., housed at established by this rule when they reviewed. However, in rural areas, the same location). review and approve sponsoring where day care homes may be more We believe that, once Head Start and organizations’ management plans and widely dispersed, a provider’s co-located centers are removed from the budgets. unexpected absence could add a equation, the average center sponsor can In implementing this requirement, significant amount of time to the complete the requirement for three State agencies must carefully review the conduct of the average review. Overall, reviews per year in about the same sponsoring organization’s budget and
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management plan to ensure that they are the cycle for verifying free and reduced specifically included in the regulatory analyzing this ratio in terms of full-time price applications set forth in definition of ‘‘institution’’ at § 226.2. monitoring staff equivalents. Because § 226.23(h). Therefore, it is not necessary for us to many sponsoring organizations hire amend this definition as a result of this Were Other Aspects of the Review geographically-dispersed, part-time change to the statute. Requirements Changed as Well? monitors, State agencies will need to However, this rule does amend the know the duties and responsibilities of Yes. Audit and review findings have definition of ‘‘institution’’ for another each sponsoring organization employee underscored that, although sponsoring reason. Prior to enactment of the involved in monitoring in order to organizations of centers administer William F. Goodling Child Nutrition ensure that they are truly evaluating the CACFP in fewer facilities than large Reauthorization Act of 1998 (Pub. L. number of full-time staff years sponsors of day care homes, they should 105–336, October 31, 1998), emergency committed to the monitoring function. still be reviewed more frequently than shelters received meal reimbursements independent centers or smaller sponsors under a separate ‘‘Homeless Child How Much Time Will Sponsors Have To (i.e., sponsors of fewer than 100 Implement This Provision? Nutrition Program’’ that was directly facilities). In addition, some State administered by USDA and was not a Participating sponsors will have until agencies and sponsoring organizations part of any specific child nutrition July 29, 2003 to submit a new have reported a tendency of some less- program. No reference to them was management plan or an amendment to well-managed day care home made in the regulatory definition of their management plan that complies sponsoring organizations to keep their ‘‘institution.’’ Public Law 105–336 with the new monitor staffing total number of sponsored day care expanded participation in that program requirements. However, all management homes below 200 to avoid more to children through the age of 12, made plans submitted by new sponsoring frequent State agency oversight. In order the program a part of the CACFP, and organizations applying for participation to ensure adequate State agency amended the definition of ‘‘institution’’ after the effective date of this rule must oversight, this rule further amends in § 17(a) of the NSLA to include demonstrate a level of staffing devoted § 226.6(m)(4) by lowering the threshold emergency shelters. Accordingly, this to monitoring that falls within the for biennial review for both types of rule adds a new definition of home-to-monitor range specified in this sponsoring organization (home and ‘‘emergency shelter’’ to § 226.2 and rule at § 226.16(b)(1). center) from 200 to 100 facilities. amends the definition of ‘‘institution’’ to C. State Review Cycle (§ 226.6(m)(4)) What Related Changes Are Made by include emergency shelters serving homeless children. What are the Current Regulatory This Rule, and Why? Requirements for the Frequency of State In addition, this rule makes one other B. Ceiling on Administrative Agency Review of Institutions? change designed to fully address the Reimbursements for Sponsors of Centers Section 226.6(l) of the current integrity provisions of ARPA and the (§§ 226.6(f)(3), 226.7(g), 226.16(b)(1)) regulations [redesignated § 226.6(m) in types of problems documented in Why Does the Law Establish a Ceiling this rule] requires State agencies to management evaluations and the OIG on Center Sponsors’ Reimbursable monitor at least one-third of all audits. This rule requires at Administrative Costs? institutions in their State each year, and § 226.6(m)(2) that State agencies target to review each institution at least once for more frequent review those OIG audits and State and Federal every four years (except for sponsors of institutions whose prior review reviews uncovered a number of 200 or more day care homes, which included a finding of serious deficiency, situations in which sponsors of centers must be reviewed every other year). as defined in § 226.6(c). This will ensure were using too high a percentage of the that State agencies continue to monitor meal reimbursement to cover their How did ARPA Change These administrative expenses. When this Requirements? institutions that have been seriously deficient and ensure that successful occurs, less of the meal reimbursement ARPA specified that each institution corrective action has been fully and is received by the sponsored center, be reviewed no less frequently than permanently implemented. making it less likely that a high-quality, once every three years, instead of once nutritious meal that meets the Program’s every four years as required by the Part III. Other Operational Provisions meal pattern requirements is being current regulations. This does not A. Definition of Institution (§ 226.2) served to participants. require a change to the requirement that In response to these findings, the State agency review at least one- How and Why Was the Definition of Congress capped the reimbursable third of all institutions in each year, but ‘‘Institution’’ Modified by ARPA? administrative costs of center sponsors requires us to revise the frequency of the Section 243(a)(1)-(7) of ARPA at 15 percent of the total meal reviews. Accordingly, this rule amends restructured § 17(a) of the NSLA, which reimbursements earned by their 226.6(m)(4)(i) of this rule to require defines an ‘‘institution’’ and sets forth sponsored centers. Accordingly, this State agencies to review each institution the basic requirements for Program rule amends § 226.16(b)(1) to require (other than certain sponsors) at least participation, such as licensing or that the administrative budget once every three years, rather than once approval. The primary purpose of this submitted by a sponsoring organization every four years. This means that State restructuring was to make these of centers, and the actual administrative agencies may not allow more than three requirements for institution eligibility costs of such a sponsoring organization, fiscal years to elapse between institution easier to understand. In addition, the not exceed 15 percent of the meal reviews. Thus, an institution reviewed definition of ‘‘institution’’ was revised reimbursements estimated to be earned in October of 2000 (Fiscal Year 2001), to include sponsors of centers. Until by its sponsored centers during the would have to be reviewed again no enactment of ARPA, sponsors of child budget year, unless the State agency later than the end of Fiscal Year 2004 care centers had not been specifically grants a waiver. Thus, if the centers (September of 2004). In order to mentioned in § 17(a) of the NSLA. sponsored by a particular sponsoring implement this provision of ARPA, this However, center sponsors have long organization earn $1 million per year in rule also makes a conforming change to participated in CACFP and are meal reimbursements, the sponsored
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centers must receive at least $850,000 eligibility determinations, Program in 50 centers with an average for their operating costs (i.e. the cost of recordkeeping). Therefore, there should daily attendance of 2,000 for 22 serving their food service), and will receive be few, if any, administrative expenses days of lunch and breakfast. If 80 more than $850,000 if the sponsoring incurred by the sponsored center, and percent of the children in Sponsor A’s organization’s budget is approved for they should not detract from the 85 centers were eligible for paid meals and less than $150,000 in reasonable, percent of meal reimbursement reserved 20 percent were eligible for free meals, necessary, and allowable administrative for the food service under the 15 percent Sponsor A’s total meal reimbursement costs. ceiling. If any of the primary for the month would be $42,944 (based administrative functions were being on rates in effect as of May, 2002). In Does This Mean That a State Agency performed by the sponsored center, it contrast, if 80 percent of the children in can Require a Center Sponsor To Retain would remove the need for the sponsor Sponsor B’s centers were eligible for less Than 15 Percent of its Centers’ and would provide the sponsoring free meals and 20 percent were eligible Reimbursements to Cover its organization of centers with a means of for paid meals, Sponsor B’s total meal Administrative Expenses? evading the cap by shifting reimbursement for the month would be Yes. The 15 percent figure is a ceiling, administrative costs to their sponsored $117,656. Because the free meal not a floor. In other words, a center centers. reimbursement is so much higher than sponsor may use up to 15 percent of the the paid reimbursement, the total meal Couldn’t the 15 Percent Limit Be meal reimbursement for administrative reimbursement on which the maximum Evaded if a Sponsored Center Became costs only if its budget, as approved by allowable administrative costs are the State agency, includes this amount an Independent Center, but Then calculated is far smaller for Sponsor A of allowable, reasonable, and necessary Contracted With its Former Sponsoring than Sponsor B. Therefore, Sponsor A administrative expenses. Organization To Perform Administrative would probably be justified in retaining Services, and Paid the Former Sponsor a higher percentage of its sponsored Could a State Agency Choose to set a More Than 15 Percent of the Meal centers meal reimbursements than Statewide Limit of less Than 15 Percent Reimbursement To Perform These would Sponsor B. The law provides for all Center Sponsors? Administrative Duties? State agencies with the ability to take No. State agencies are not permitted No. Although contracting out is these types of factors into account when to set Statewide ceilings below 15 generally permissible, the current considering a center sponsor’s request percent for all sponsoring organizations regulations at § 226.15(c) prohibit for a waiver of the 15 percent ceiling. of centers. Each sponsoring institutions from contracting out for State agencies are also encouraged to organization’s budget must be evaluated management of the Program. If the contact their FNSROs when analyzing individually to determine the former sponsor were hired to perform requests for such waivers. appropriate level of administrative all of its previous duties related to funding. application processing, claims How will FNS Determine Whether State submission, and recordkeeping, the Agencies are Properly Using Their What Constitutes an ‘‘Administrative Waiver Authority? Cost’’? now-independent center would be in violation of this regulatory prohibition. We will include in management Section 226.2 of the current evaluations a review of the State regulations defines both ‘‘administrative Could a State Agency Approve a Center agency’s center sponsor administrative costs’’ and ‘‘operating costs.’’ Sponsor’s Budget for Administrative budget review and approval process. In Administrative costs are those incurred Expenses in Excess of 15 Percent? addition, this rule amends § 226.6(f)(3) by an institution related to planning, Yes. The law permits a State agency to require State agencies to submit organizing, and managing a food service to waive the 15 percent ceiling if the copies of center sponsor waiver under the program. For sponsors of center sponsor ‘‘provides justification to approvals and denials to their FNSRO. centers, the primary administrative the State that the organization requires costs would be claim preparation, free funds in excess of 15 percent . . . to pay Are the Rules Different if the Sponsored and reduced price eligibility the administrative expenses of the Centers are ‘‘Affiliated’’ With Their determinations, and monitoring and organization.’’ Sponsoring Organization (i.e., Centers training of the sponsored facilities. That are Owned by, or are Part of the Operating costs are those expenses What Types of Circumstances Would Same Legal Entity as, the Sponsor)? incurred by an institution in serving Justify a Waiver? No. Congress makes no distinction meals to participants. In the case of ARPA permits a State agency to waive among types of center sponsors. This sponsors of centers, this funding would the 15 percent ceiling in recognition of means that a sponsoring organization of ‘‘pass through’’ to their sponsored the higher costs faced by certain center affiliated centers must ensure that at centers to cover the cost of food service. sponsors. For example, if a sponsor runs least 85 percent of the meal the Program in 50 centers scattered reimbursement is devoted to operating Does the 15 Percent cap Apply To across ten rural counties spanning costs. Administrative Costs Incurred By several hundred miles, its travel costs Sponsored Centers? for monitoring would necessarily be Won’t a Sponsor Selling Meals to its Yes. The 15 percent cap applies to all much higher than those incurred by a Centers—Whether Affiliated or administrative costs, whether incurred sponsor administering the Program in Unaffiliated—Retain Over 15 Percent of by the sponsoring organization or the 50 centers located in a single urban area. the Total Reimbursement? sponsored centers. It is our expectation Similarly, a sponsor with non-English- Most likely, yes, because it will retain that, if a center chooses to be sponsored speaking staff at sponsored centers up to 15 percent of the meal in CACFP, it makes that choice due to might face higher administrative costs reimbursement for its administrative an unwillingness or inability to perform resulting from language barriers and the costs, and will retain additional funds to the administrative tasks required under cost of translations. cover the cost of preparing and Program regulations (claims Finally, consider the case of two delivering meals to its sponsored preparation, free and reduced price sponsors, each of which administers the centers. However, this still fulfills the
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law’s intent that no more than 15 D. Notice to Parents or Guardians of translations into any other language percent of the total reimbursement be Enrolled Participants (§ 226.16(b)(5)) which is commonly spoken in the households of enrolled children. used to pay administrative costs. What Information Does ARPA Require Would the Rules be Different for That Parents or Guardians of E. Procedures for Recovery of Funds Proprietary Center Sponsors Because of Participants Enrolled in CACFP Disbursed to Institutions (§ 226.14(a)) Their Profit-Making Nature? Receive? Section 243(d) of ARPA amended Section 243(b)(4) of the ARPA further § 17(f)(1) of the NSLA to establish No. The law still requires that at least amended § 17(d) of the NSLA by adding certain requirements pertaining to the 85 percent of the reimbursement be a new § 17(d)(3) to require that a recovery of funds that have been used for operating costs (i.e. the cost of sponsored center, a day care home, or disbursed to institutions. The law the meal service). In addition, all the home or center’s sponsoring provided that such recovery ‘‘shall not institutions must maintain a nonprofit organization provide basic Program be paid from funds used to provide food service. information to parents or guardians of meals and supplements,’’ may be repaid enrolled participants. For children and over a period of one or more years, and What if, Despite Having an Approved adults participating in CACFP at the Budget for less Than 15 Percent of Total must include an opportunity for an time of ARPA’s enactment (June 20, administrative review for the institution Reimbursements, a Sponsor of Centers 2000), this information was to be prior to the recovery of funds. Expends More Than 15 Percent of Total provided within 90 days of enactment. Reimbursements for Administrative For participants enrolled after Are Child Care Facilities Covered by Costs During the Course of a Year? enactment, the law requires that the This Provision? information be provided to parents or No. The law refers only to The law limits the actual guardians at the time of enrollment. disbursements to institutions by the reimbursable administrative expenses of This rule amends §§ 226.16(b)(5), State agency. Thus, if either a sponsor a sponsoring organization of centers to 226.17(d), and 226.18(b)(16) to require or a State agency uncovers invalid a maximum of 15 percent of the meal that any sponsor, either itself or through claims in its conduct of a facility reimbursement. Thus, sponsoring its sponsored facilities, must ensure that review, or a sponsor makes such a organizations of centers and their State the required information is distributed discovery in editing the facility’s claim, agencies must monitor the 15 percent to the parents or guardians of enrolled the facility’s claim may be adjusted limit throughout the year to ensure that participants in accordance with the law. without offering an administrative unexpected variations in participation (For the sake of consistency and review. do not result in administrative simplicity, we made clear that this expenditures over the 15 percent requirement applies to all Program How do These Requirements Differ threshold. If, when a State agency participants, not just to participating From Current Requirements in the CACFP Regulations? reviews a sponsoring organization’s children.) The prohibition on repaying claims end-of year expenditures, it discovers How can the Sponsor or Facility Obtain that the 15 percent ceiling has been out of Program funds of any kind (meal This Information Quickly in Order To or administrative funds) already exists, exceeded, the State agency must take Meet This Requirement? appropriate fiscal action. as does the institution’s opportunity for We have developed and distributed to an administrative review of any action C. State Agency Limits on Transfers by State agencies a brochure that provides that affects its reimbursement Day Care Homes (§§ 226.6(p) and basic information about the CACFP and (§§ 226.14(a) and 226.6(k)). The 226.18(b)(13)) its benefits. The names and telephone provision pertaining to repayment numbers of the sponsor and the State schedules is new, although some State ARPA also addressed the issue of agency must be added to the brochure agencies already permit repayment State agency-level controls on to meet the requirements of the law. We schedules when collecting overclaims participation by day care homes. have also developed and distributed a from institutions. Section 243(f) of ARPA amended one-page flyer that includes this basic § 17(f)(3)(ii)(D) of the NSLA to require Program information, and that will be Are Repayment Schedules of at Least a State agencies to limit day care home less costly to reproduce than the Year Now Required? transfers from one sponsoring brochure. Because the flyer was No. The law says that recovered organization to another to no more than distributed electronically, it can easily amounts ‘‘may’’ be paid to the State one time per year, except under be amended to include the name and agency over a period of one or more extenuating circumstances such as the telephone number of the appropriate years. It leaves to the State agency the termination or withdrawal from the State agency and the sponsor. discretion of whether and how to use a repayment schedule. It should also be Program of a day care home’s Some Urban Sponsors Deal With noted that, although the law provides sponsoring organization. This rule Providers and Households Speaking a State agencies with this option, FNS amends redesignated § 226.6(p) Large Number of Languages. How can may still insist on immediate repayment (formerly § 226.6(o)) to require the State These Sponsors Meet the law’s in full from a State agency, regardless of agency to establish a transfer policy Requirement To Provide the Information whether the State agency has chosen to consistent with the ARPA provision. In in a Language Easily Understandable to provide an institution with a repayment addition, this rule further amends the Household? schedule. redesignated § 226.6(p) and adds a new We have made the informational 226.18(b)(13) to require the sponsoring brochure available in English and Does This Rule Include Other organization-day care home agreement Spanish and the flyer available in Requirements Pertaining to the to specify the State agency’s transfer English, Spanish, and 18 other Recovery of Disbursed Funds? policy. languages. We urge State agencies and Yes. This rule makes clear our current sponsors to work together to obtain position that State agencies must assess
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interest during the period of repayment, responsibilities under the agreement. How Should the Law’s Provisions Be including the period of administrative These are not the types of actions that Implemented With Regard to the review, unless the administrative review ARPA intended to address. ‘‘Suspension’’ of Program Payments to officer overturns the State agency’s ARPA’s focus is on situations in Providers Based on an Imminent Threat action. In addition, State agencies must which a sponsoring organization acts to to Health or Safety? maintain lists of all funds recovery terminate a day care home’s agreement Several aspects of the process for actions (excluding routine claim because the day care home has violated suspending providers who engage in adjustments). In the interest of conduct that poses an imminent threat preserving flexibility for State agencies, the agreement and therefore did not to health or safety merit discussion. the list may be kept in paper form, operate in accordance with Program requirements. If the sponsoring First, § 17(d)(5)(C) states the electronic form, or in retrievable, Department may establish procedures individual case files within the State organization’s proposed termination of a requiring immediate suspension for agency. day care home’s agreement is upheld in institutions and day care homes Accordingly, this rule amends an administrative review, or if the day ‘‘without the opportunity for corrective § 226.14(a) to specifically refer to the care home fails to request an action, if the State agency determines State agency’s option to collect administrative review, the day care that there is an imminent threat to the overpayments over a period of one or home will be disqualified. This type of health or safety of a participant at the more years and to require State agencies termination is commonly called to maintain lists or retrievable records of entity or the entity engages in any termination ‘‘for cause.’’ In order to activity that poses a threat to public all funds recovery activities. This rule distinguish between these two types of adds provisions in §§ 226.6(k)(10) and health or safety.’’ This language was action in the context of day care homes repeated in implementation guidance 226.14(a) to clarify our position on the and their sponsors, this rule amends collection of interest on overpayments. we issued on July 20, 2000, and October § 226.2 to add definitions of 17, 2000. However, recognizing that the F. Disqualification and Administrative ‘‘termination for convenience’’ and State agency would not have an Reviews for Day Care Homes ‘‘termination for cause.’’ agreement with a day care home, we (§§ 226.16(l) and 226.6(l)) What Process Must a Sponsor Use in clarified this statement in guidance issued on April 12, 2001, and in the As previously mentioned in Part I(D) Terminating a Day Care Home’s language of this rule at § 226.16(l)(4). of this preamble, § 243(c) of ARPA Agreement for Cause? added a new § 17(d)(5) to the NSLA that Sponsoring organizations, not State requires us to establish procedures for This rule adds a new § 226.16(l), agencies, will bear the responsibility for the termination of participation of day which requires a sponsoring making these decisions for the day care care homes (in addition to institutions). organization to initiate action to homes they sponsor. These procedures must provide day care terminate the agreement of a day care Second, to parallel the provisions homes with an administrative review home for cause if the sponsoring promulgated for the State agency’s suspension of an institution based on an ‘‘prior to any determination to organization determines the day care imminent threat to health or safety, this terminate’’ a day care home’s home has committed one or more participation. However, this rule requires that, if State or local health serious deficiency. Section 226.16(l)(2) requirement to offer an administrative or licensing officials have cited a day lists the serious deficiencies for day care review is limited to proposed care home for serious health or safety homes and § 226.16(l)(3) sets out the termination actions. The requirement violations, the sponsoring organization does not extend to any other action requirements for the termination must immediately suspend the home’s taken by a sponsor, including a process. This process is quite similar, CACFP participation prior to any formal sponsor’s collection of overpayments though not identical, to that used by action to revoke the home’s licensure or from a day care home (see discussion in State agencies in dealing with seriously approval. However, if a sponsoring Part III(E) above). On April 12, 2001, we deficient institutions, as revised by this organization finds unhealthy or unsafe issued guidance on the effects of ARPA rule (see Part I(D) of this preamble). conditions that pose an imminent threat on the termination of the agreements of Do the Law’s Provisions Regarding to health or safety when conducting a home review, and the licensing agency day care homes. This preamble contains ‘‘Suspension’’ of Program Payments cannot make an immediate onsite visit, a general discussion of the issues related Based on Submission of False Claims to the termination of day care home there may be a delay before the sponsor Apply to Providers as Well as agreements, but does not repeat the can act. In these cases, this rule requires Institutions? detailed discussions contained in that the sponsoring organization to memorandum (which is available at No. The law requires suspension of immediately notify the appropriate State www.fns.usda.gov/cnd). Program payments (without the or local licensing and health authorities and to take action that is consistent with Why Do the Parts of the Rule Relating opportunity for corrective action) if the provider has engaged in conduct that the recommendations and requirements to Actions To Terminate a Day Care of those authorities. Home’s Agreement Use the Term poses an imminent threat to children’s Termination ‘‘for Cause’? health or safety or to public health or Who Must Hold the Administrative Program regulations at § 226.18(b)(8) safety. There is no other provision Review? have long permitted sponsors and day authorized by law for suspension of This rule requires in § 226.6(l)(1) that care homes to terminate the sponsor- provider payments. This rule addresses State agencies ensure that day care home agreement ‘‘for convenience.’’ the suspension of provider funds due to homes are provided an opportunity for Termination for convenience occurs health or safety violations in an administrative review of a proposed when the sponsor or day care home § 226.16(l)(4). termination. State agencies may do this terminates the agreement for either by offering State-level considerations unrelated to either administrative review or by requiring party’s performance of Program the sponsoring organization to offer an
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administrative review. If a State agency May Providers Still Terminate Their homes). The vast majority of institutions elects to provide a State-level Agreements With a Sponsor ‘‘for and facilities participating in CACFP are administrative review to one day care Convenience’? ‘‘small entities’’. However, the changes home, it must do so for all day care Yes. Providers may still terminate mandated by Public Laws 106–224 and homes in the State. their agreement with a sponsor ‘‘for 106–472 and implemented in this convenience.’’ However, depending on interim rule will not have a significant What Options Does a Sponsoring the timing of this action and the nature economic impact, except where Organization Have in Offering of the State agency’s implementation of improved monitoring procedures lead Administrative Reviews? ARPA’s requirement for an annual State agencies to terminate institutions’ transfer policy, the provider’s agreements or sponsoring organizations If a State agency chooses to require terminate the agreements of day care sponsoring organizations to provide the termination for convenience could result in a lapse in their Program homes. In short, there will be little or no administrative reviews, it is the impact on those entities administering sponsoring organization’s responsibility participation. Providers having questions on this subject should refer to the Program in accordance with the to ensure that the administrative review the State agency for further guidance. CACFP regulations, since the changes to is provided in accordance with the the law were largely intended to requirements for day care home How Will State Agencies Be Able To improve compliance with existing administrative reviews added by this Monitor Sponsors’ Compliance With regulations. rule in § 226.6(l). A sponsoring These New Termination and Appeal This rule will primarily affect the organization may do this by holding the Procedures? procedures used by State agencies in administrative review itself, or by This rule establishes the minimum reviewing applications submitted by contracting with someone to provide the requirements for sponsoring institutions that are participating or that administrative review (such as a organizations to use when determining wish to participate in the Child and sponsor’s association). a day care home seriously deficient, Adult Care Food Program; in monitoring proposing to terminate a day care the performance of participating Are the Procedural Requirements the home’s agreement for cause, and institutions; and in ensuring that Same for an Administrative Review offering day care homes administrative appropriate and timely action is taken to Conducted by a State Agency and One reviews of such actions (§ 226.6(l)). This correct serious deficiencies noted in an Conducted by a Sponsoring rule amends § 226.16(b)(6) to require institution’s operation of the Program. Organization? sponsoring organizations to submit, as The rule will also impact sponsoring part of their Program applications, any organizations, by requiring that they Yes. The minimum procedural supplemental procedures the conduct unannounced reviews of their requirements for day care home sponsoring organization has established sponsored facilities, and some administrative reviews are the same for taking these actions and for sponsoring organizations of centers, regardless of whether it is the State providing administrative reviews (if the whose level of reimbursable Program agency or the sponsor conducting the sponsor has been charged with administrative expenses will be capped review. The procedures are a conducting the administrative reviews). at 15 percent of total meal streamlined version of the procedures In addition, this rule amends reimbursements. Institutions, State agencies must follow for redesignated § 226.6(m)(3)(iii) to require individuals, and day care home administrative reviews for institutions. State agency reviews of sponsoring providers will be affected by the organizations to evaluate provision of an administrative review What Will Happen if a Sponsor Uses implementation of procedures relating prior to their loss of Program benefits or Termination for Convenience When to serious deficiency, termination, and the termination of their Program They Should Use Termination for administrative review. agreements. Those changes will not, in Cause? the aggregate, have a significant Executive Order 12866 economic impact. Because the law clearly intends that This interim rule has been determined Regulatory Impact Analysis poorly-performing and fraudulent to be significant and was reviewed by providers be placed on a list which the Office of Management and Budget This rule implements a number of would disqualify them from Program under Executive Order 12866. changes to existing Program regulations. participation, we believe it is necessary These changes are mandated by the Regulatory Flexibility Act to underscore the importance of NSLA, as amended by Public Laws 106– sponsoring organizations making This rule has been reviewed with 224 and 106–472, and are designed to meaningful distinctions between the regard to the requirements of the improve management and financial bases for termination. To that end, this Regulatory Flexibility Act (5 U.S.C. integrity in the CACFP. These changes rule requires State agencies to include 601–612). Eric M. Bost, Under Secretary will affect all entities involved in as part of their review of a sponsor’s for Food, Nutrition, and Consumer CACFP, including USDA, State operation their proper implementation Services, has certified that this rule will agencies, institutions, facilities, and not have a significant economic impact participating children and their of this provision (see revised and on a substantial number of small households. The entities most affected redesignated § 226.6(m)(3)(iii)). The rule entities. will be State agencies, institutions, and also requires State agencies to determine The CACFP is administered by State facilities. that a sponsoring organization is agencies and by over 19,000 institutions Despite the conduct of numerous OIG seriously deficient when it has (sponsoring organizations and audits and State and FNS reviews, there terminated providers for convenience independent child and adult care is no statistically representative when a termination for cause was the centers) in over 210,000 child and adult information available on CACFP appropriate course of action (see care facilities (child care centers, integrity. OIG reports have focused on § 226.6(c)(3)(ii)(R), as added by this outside-school-hours care centers, adult purposively selected CACFP institutions rule). day care centers, and family day care and facilities, and ‘‘management
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evaluations’’ conducted by State been significant weaknesses in oversight provisions was estimated by FNS, the agencies and FNS are not designed to by some State agencies and institutions, Congressional Budget Office, and the capture representative information for neither the OIG reports nor any other Office of Management and Budget when the purpose of developing Nationally- data sources estimate the prevalence or Public Law 106–224 was enacted, only valid estimates of fraud or magnitude of CACFP fraud and abuse. a few of the provisions were estimated mismanagement. While the OIG reports This lack of information makes it to produce Program savings. Those clearly illustrate that there are difficult for USDA to estimate the estimates appear in the Regulatory significant weaknesses in parts of the amount of CACFP reimbursement lost Impact Analysis in Table ES–2, which is Program regulations, and that there have due to fraud and abuse. For that reason, summarized below: when the fiscal impact of these
TABLE ES–2.—ESTIMATED SAVINGS OF RULE ($ IN MILLIONS)
Provision 2001 2002 2003 2004 2005 2001–2005 2006–2010 2001–2010
Tax-exempt, Prior ineligi-bility in other public programs, eliminate participation ‘‘entitlement’’ for instituitions ...... ¥3.2 ¥3.4 ¥3.7 ¥4.0 ¥4.2 ¥18.5 ¥25.8 ¥44.3 New sponsors must demonstrate need for services ...... ¥0.0 ¥0.5 ¥1.0 ¥1.4 ¥1.4 ¥4.3 ¥7.1 ¥11.4 15% cap on center sponsor admin- istrative earnings ...... ¥13.8 ¥17.3 ¥21.6 ¥26.4 ¥31.9 ¥110.9 ¥279.1 ¥390.0 Limit facility transfers between spon- sors ...... ¥0.0 ¥0.9 ¥1.0 ¥1.0 ¥1.1 ¥4.0 ¥6.5 ¥10.5
FNS had very little flexibility in CACFP is a State administered, Nature of Concerns and Need To Issue implementing most of the provisions Federally funded program, our regional This Rule mandated by ARPA and the Grain offices regularly have formal and The issuance of a regulation is Standards Act. As discussed throughout informal discussions with State and required as a result of statutory changes the preamble, above, and under local officials regarding Program enacted in Public Laws 106–224 and ‘‘Executive Order 13132’’, below, where implementation and performance. This 106–472. Many of the individual possible, we have made every attempt to allows State and local agencies to provisions in these statutes were ensure that the statutory provisions, as contribute input that helps to influence discussed in the meetings with State implemented in this interim rule, our discretionary rulemaking proposals, and local cooperators mentioned above, safeguard Program funds without the implementation of statutory and the Department, State agencies, and unnecessarily limiting access to the provisions, and even our own local sponsoring organizations all Program by institutions, facilities, or Departmental legislative proposals. In provided input to the congressional children. addition, over the past seven years, our authorizing committees that drafted Executive Order 12372 headquarters staff informally consulted these statutory changes. Although State This Program is listed in the Catalog with State administering agencies, agencies and local sponsoring of Federal Domestic Assistance under Program sponsors, and CACFP organizations have some concerns about No. 10.558 and is subject to the advocates on ways to improve Program the implementation of the new provisions of Executive Order 12372, management and integrity in CACFP. termination and appeal procedures which requires intergovernmental Discussions with State agencies took mandated by these laws, Congress consultation with State and local place in the joint Management attempted to balance the demonstrable officials (7 CFR Part 3015, Subpart V, Improvement Task Force meetings held need to improve Program compliance in and final rule related notice published between 1995 and 2000; in three CACFP with the protection of in 48 FR 29114, June 24, 1983, and 49 biennial National meetings of State and institutions and day care homes’ ability FR 22676, May 31, 1984). Federal CACFP administrators (1996 in to receive due process prior to having their Program participation terminated. Executive Order 13132 Seattle, 1998 in New Orleans, and 2000 in Chicago); at the December 1999 Extent to Which We Meet Those Executive Order 13132 requires meeting of State Child Nutrition Concerns Federal agencies to consider the impact Program administrators in New Orleans; of their regulatory actions on State and FNS has considered the impact of and in a variety of other small- and local governments. Where such actions these statutory changes on State and large-group meetings. Discussions with have ‘‘federalism implications,’’ local administering agencies, and has agencies are directed to provide a Program advocates and sponsors followed congressional intent in statement for inclusion in the preamble occurred in the Management attempting to balance Program integrity to the regulation describing the agency’s Improvement Task Force meetings held concerns with the need to maintain considerations in terms of the three in 1999–2000; in annual National Program access for capable institutions categories enumerated in section 6(a)(B) meetings of the Sponsors Association, and family day care homes. The of Executive Order 13132: the CACFP Sponsors Forum, and the preamble above contains a more Western Regional Office-California detailed discussion of our attempt to Prior Consultation With State Officials Sponsors Roundtable from 1996–2000; balance integrity and access concerns, Prior to drafting this interim rule, we and in a variety of other small- and while implementing these provisions in received input from State and local large-group meetings. a manner consistent with both the letter agencies at various times. Since the and the intent of the law.
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Public Law 104–4 are seeking public comment on all of its requirements from their comments on Title II of the Unfunded Mandates provisions and will make any the remainder of the interim rule. OMB is required to make a decision Reform Act of 1995 (UMRA), Pub. L. appropriate changes based on the concerning the collection of information 104–4, requires Federal agencies to comments when the final rule is required by this rule between 30 to 60 assess the effects of their regulatory published. days after its publication in the Federal actions on State, local, and tribal Executive Order 12988 Register. Therefore, a comment to OMB governments and the private sector. This rule has been reviewed under is most likely to be considered if OMB Under Section 202 of the UMRA, the Executive Order 12988, Civil Justice receives it within 30 days of the Food and Nutrition Service must Reform. This rule is intended to have publication of this rule. This does not usually prepare a written statement, preemptive effect with respect to any affect the 60-day deadline for the public including a cost-benefit analysis, for State or local laws, regulations, or to comment to the Department on the proposed and final rules with ‘‘Federal policies which conflict with its substance of the rule. mandates’’ that may result in new provisions or which would otherwise Comments are invited on: (a) Whether annual expenditures of $100 million or impede its full implementation. This the collection of information is more by State, local, or tribal rule is not intended to have retroactive necessary for the Agency to perform its governments or the private sector. When effect unless so specified in the DATES functions of the agency and will have such a statement is needed, section 205 section of the preamble of the final rule. practical utility; (b) the accuracy of the of the UMRA requires the Food and All available administrative procedures Agency’s estimate of the burden of Nutrition Service to identify and must be exhausted prior to any judicial collecting the information, including consider regulatory alternatives that challenge to the provisions of this rule whether its methodology and would achieve the same result. or the application of its provisions. This assumptions are valid; (c) ways to This rule contains no Federal includes any administrative procedures enhance the quality, utility, and clarity mandates (as defined in Title II of the provided by State or local governments. of the information to be collected; and UMRA) that would lead to new annual In the CACFP, the administrative (d) ways to minimize the burden of the expenditures exceeding $100 million for procedures are set forth at: (1) 7 CFR information collection, including the State, local, or tribal governments or the §§ 226.6(k), 226.6(l), and 226.16(l) use of appropriate automated, private sector. Therefore, the rule is not which establish administrative review electronic, mechanical, or other subject to the requirements of sections procedures for institutions, individuals, technological collection techniques or 202 and 205 of the UMRA. and day care homes; and (2) 7 CFR other forms of information technology. Public Participation Section 226.22 and 7 CFR 3015, which The title and description of the address administrative review information collections are shown As noted in the SUPPLEMENTARY procedures for disputes involving below with an estimate of the annual INFORMATION section of this preamble, procurement by State agencies and reporting and recordkeeping burdens. we are publishing this interim rule institutions. Included in the estimate is the time for without the prior notice or public reviewing instructions, searching Paperwork Reduction Act comment generally required under existing data sources, gathering and section 553 of the Administrative In accordance with § 3507(j) of the maintaining the data needed, and Procedure Act (APA). Section 263(a) of Paperwork Reduction Act of 1995 (44 completing and reviewing the collection ARPA specified that the Secretary must U.S.C. 3501 et seq.), the information of information. publish rules implementing ARPA’s collection and recordkeeping Title: 7 CFR Part 226, Child and Adult amendments to the CACFP provisions of requirements included in this interim Care Food Program. the NSLA as soon as practicable, and rule have been submitted for emergency OMB Number: 0584–0055. without regard to the APA, approval to the Office of Management Type of request: Revision of existing Departmental policy regarding public and Budget (OMB). OMB has assigned collections. participation, or the Paperwork control number 0584–0055 to the Abstract: This rule revises: State Reduction Act. We are therefore information collection and agency criteria for approving and required to publish a rule incorporating recordkeeping requirements. FNS renewing institution applications and the ARPA changes without following intends to request continuation of that for terminating agreements with the usual rulemaking procedures. approval for three years and invites the institutions; State- and institution-level We are also publishing in this interim general public and other public agencies monitoring requirements; State agency rule provisions implementing section to comment on the information and sponsoring organization follow-up 307 of the Grain Standards Act. Section collection impact of implementing this to ensure that appropriate and timely 307 incorporated amendments to the interim rule. action is taken to correct serious hearing requirements established by Written comments on the information deficiencies noted in an institution or section 243 of ARPA. It would be collection requirements must be day care home’s operation of the impractical to implement the provisions received on or before August 26, 2002 Program; the level of reimbursable of ARPA without the inclusion of the by the Office of Information and Program administrative expenses for modifications to the appeal process Regulatory Affairs, Office of sponsoring organizations of centers; and instituted in accordance with section Management and Budget (OMB), 3208 the administrative review procedures 307 of the Grain Standards Act. For New Executive Office Building, for institutions, individuals, and day these reasons, we have determined in Washington, DC 20503, Attention: Ms. care homes. The provisions of law that accordance with 5 U.S.C. 553(b)(3) that Lauren Whittenberg, Desk Officer for the are implemented in this interim rule good cause exists for the promulgation Food and Nutrition Service. A copy of and are likely to have the greatest of the provisions of this rule these comments may also be sent to Mr. potential impact will require: State implementing section 307 of the Grain Robert Eadie at the address listed in the agencies to evaluate all Program standards Act without prior notice and ADDRESSES section of this preamble. applications in light of three public comment. In order to improve Commenters are asked to separate their ‘‘performance standards’; time limits on administration of the rule, however, we remarks on information collection the completion of corrective action by
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institutions and day care homes that a. New definitions of Administrative of an institution designed to reasonably have been declared seriously deficient; review, Administrative review official, assure that: payments to continue to seriously Center, Days, Disqualified, Emergency (a) The Program achieves its intended deficient institutions and homes until shelter, Facility, Internal controls, result; the conclusion of the appeal process, National disqualified list, New (b) Program resources are used in a unless payments to the institution or institution, Notice, Principal, Renewing manner that protects against fraud, home have been suspended for reasons institution, Responsible principal or abuse, and mismanagement and in related to health or safety concerns or responsible individual, Seriously accordance with law, regulations, and the submission of a false or fraudulent deficient, State agency list, Suspended, guidance; and claim; responsible principals and Suspension review, Suspension review (c) Timely and reliable Program responsible individuals, as well as official, Termination for cause, information is obtained, maintained, family day care homes whose Termination for convenience, and reported, and used for decision-making. agreements have been terminated for Unannounced review are added in * * * * * cause, to be placed on the National alphabetical order; and National disqualified list means the disqualified list; all State agencies to b. The definition of Institution is list, maintained by the Department, of follow uniform procedures for amended by adding the words ’’, institutions, responsible principals and administrative reviews (appeals); the emergency shelter’’ after the words responsible individuals, and day care establishment of an appeals process for ‘‘outside-school-hours care center’’. homes disqualified from participation in family day care homes; sponsoring The additions read as follows: the Program. organizations annually to conduct a New institution means an institution minimum of two unannounced visits to § 226.2 Definitions. * * * * * applying to participate in the Program each of their sponsored facilities; State for the first time, or an institution agencies to perform 15 percent of their Administrative review means the fair hearing provided upon request to: applying to participate in the Program required facility reviews unannounced; after a lapse in participation. sponsoring organizations to meet (a) An institution that has been given minimum staffing requirements for notice by the State agency of any action * * * * * performance of the monitoring function; or proposed action that will affect their Notice means a letter sent by certified and sponsors of centers to retain a participation or reimbursement under mail, return receipt (or the equivalent maximum of 15 percent of Program the Program, in accordance with private delivery service), by facsimile, funds for administrative expenses, § 226.6(k); or by email, that describes an action unless a waiver is obtained from the (b) A principal or individual proposed or taken by a State agency or State agency. These changes are responsible for an institution’s serious FNS with regard to an institution’s primarily designed to improve Program deficiency after the responsible Program reimbursement or operations and monitoring at the State principal or responsible individual has participation. Notice also means a letter and institution levels. been given a notice of intent to sent by certified mail, return receipt (or Estimated Total Annual Burden on disqualify them from the Program; and the equivalent private delivery service), Respondents: (c) A day care home that has been by facsimile, or by email, that describes Total Existing Burden Hours: given a notice of proposed termination an action proposed or taken by a 5,076,428. for cause. sponsoring organization with regard to a Total Proposed Burden Hours: Administrative review official means day care home’s participation. The 5,093,852. the independent and impartial official notice must specify the action being Total Difference: 17,424. who conducts the administrative review proposed or taken and the basis for the The changes in these information held in accordance with § 226.6(k). action, and is considered to be received by the institution or day care home collection requirements will not be in * * * * * when it is delivered, sent by facsimile, effect until approved by OMB. Center means a child care center, an or sent by email. If the notice is adult day care center, or an outside- List of Subjects in 7 CFR Part 226 undeliverable, it is considered to be school-hours care center. Accounting, Aged, Day care, Food and received by the institution, responsible Nutrition Service, Food assistance * * * * * principal or responsible individual, or programs, Grant programs, Grant Days means calendar days unless day care home five days after being sent programs—health, Indians, Individuals otherwise specified. to the addressee’s last known mailing with disabilities, Infants and children, * * * * * address, facsimile number, or email Intergovernmental relations, Loan Disqualified means the status of an address. programs, Reporting and recordkeeping institution, a responsible principal or * * * * * requirements, Surplus agricultural responsible individual, or a day care Principal means any individual who commodities. home that is ineligible for participation. holds a management position within, or Accordingly, 7 CFR Part 226 is * * * * * is an officer of, an institution or a amended as follows: Emergency shelter means a public or sponsored center, including all private nonprofit organization whose members of the institution’s board of PART 226—CHILD AND ADULT CARE primary purpose is to provide directors or the sponsored center’s FOOD PROGRAM temporary shelter and food services to board of directors. homeless families with children. 1. The authority citation for Part 226 * * * * * is revised to read as follows: * * * * * Renewing institution means an Facility means a sponsored center or institution that is participating in the Authority: Secs. 9, 11, 14, 16, and 17, a family day care home. Richard B. Russell National School Lunch Program at the time it submits a renewal Act, as amended (42 U.S.C. 1758, 1759a, * * * * * application. 1762a, 1765 and 1766). Internal controls means the policies, Responsible principal or responsible 2. In § 226.2: procedures, and organizational structure individual means:
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(a) A principal, whether compensated Suspension review official means the days of receipt of the application and or uncompensated, who the State independent and impartial official who must provide technical assistance, if agency or FNS determines to be conducts the suspension review. necessary, to the institution for the responsible for an institution’s serious Termination for cause means the purpose of completing its application. deficiency; termination of a day care home’s Any disapproved applicant must be (b) Any other individual employed Program agreement by the sponsoring notified of the procedures for seeking an by, or under contract with, an organization due to the day care home’s administrative review (in accordance institution or sponsored center, who the violation of the agreement. with paragraphs (k) or (l) of this section, State agency or FNS determines to be Termination for convenience means as appropriate). The application responsible for an institution’s serious termination of a day care home’s procedures must include or conform to deficiency; or Program agreement by either the the following requirements: (c) An uncompensated individual sponsoring organization or the day care (1) Agreements. The State agency, by who the State agency or FNS determines home, due to considerations unrelated written consent of the State agency and to be responsible for an institution’s to either party’s performance of Program the institutions, must renew agreements serious deficiency. responsibilities under the agreement. with institutions not less frequently * * * * * * * * * * than annually. The State agency is prohibited from entering into an Seriously deficient means the status of Unannounced review means an on- agreement that is effective during two an institution or a day care home that site review for which no prior fiscal years, but may nevertheless has been determined to be non- notification is given to the facility or establish an ongoing renewal process for compliant in one or more aspects of its institution. the purpose of reviewing and approving operation of the Program. * * * * * 3. In § 226.6: applications from participating * * * * * a. Paragraphs (b) and (c) are revised; institutions throughout the fiscal year; State agency list means an actual b. Paragraph (d)(3) is amended in the (2) Participant eligibility information. paper or electronic list, or the last sentence by removing the reference Centers must submit current retrievable paper records, maintained by ‘‘226.6(n)’’ and adding in its place the information on the number of enrolled the State agency, that includes a reference ‘‘226.6(o)’; participants who are eligible for free, synopsis of information concerning c. Paragraph (f)(1) is amended by reduced price, and paid meals; seriously deficient institutions and adding a new sentence at the end of the (3) Enrollment information. providers terminated for cause in that paragraph; Sponsoring organizations of day care State. The list must be made available d. Paragraph (f)(2) is amended by homes must submit the current total to FNS upon request, and must include removing the third sentence and adding number of children enrolled, with an the following information: in its place four new sentences; assurance that day care home providers’ (a) Institutions determined to be e. Paragraph (f)(3) is amended by own children enrolled in the Program seriously deficient by the State agency, adding three new sentences at the end are eligible for free or reduced price including the names and mailing of the paragraph; meals; addresses of the institutions, the basis f. Paragraph (k) is revised; (4) Nondiscrimination statement. for each serious deficiency g. Paragraphs (l)–(p) are redesignated Institutions must issue a non- determination, and the status of the as paragraphs (m)-(q) and a new discrimination policy statement and institutions as they move through the paragraph (l) is added; media release; possible subsequent stages of corrective h. Newly redesignated paragraph (m) (5) Management plan. Sponsoring action, proposed termination, is revised; organizations must submit a suspension, agreement termination, i. Newly redesignated paragraph (p) is management plan; and/or disqualification, as applicable; amended by adding two new sentences (6) Administrative budget. Institutions (b) Responsible principals and after the first sentence; and must submit an administrative budget; responsible individuals who have been j. Newly redesignated paragraph (q) is (7) Licensing/approval. Institutions disqualified from participation by the amended by removing the reference must document that each facility for State agency, including their names, ‘‘226.6(l)’’ and adding in its place the which application is made meets mailing addresses, and dates of birth; reference ‘‘226.6(m)’’. Program licensing/approval and The additions and revisions specified requirements; (c) Day care home providers whose above read as follows: (8) Proprietary centers. Institutions must document that each proprietary agreements have been terminated for 226.6 State agency administrative cause by a sponsoring organization in center for which application is made responsibilities. meets the definition of a proprietary the State, including their names, * * * * * mailing addresses, and dates of birth. title XIX center or a proprietary title XX (b) Application Approval. Each State center, as applicable and as set forth at * * * * * agency must establish an application § 226.2; Suspended means the status of an procedure to determine the eligibility (9) Commodites/Cash-in-lieu of institution or day care home that is under this part of applicant institutions, commodities. Institutions must state temporarily ineligible for participation and facilities for which applications are their preference to receive cash or cash- (including Program payments). submitted by sponsoring organizations. in-lieu of commodities; Suspension review means the review Any institution applying for (10) Advance payments. Institutions provided, upon the institution’s request, participation in the Program must be must state their preference to receive all, to an institution that has been given a notified of approval or disapproval by part, or none of the advance payment; notice of intent to suspend participation the State agency in writing within 30 (11) Unserved facilities or (including Program payments), based on days of filing a complete and correct participants. a determination that the institution has application. If an institution submits an (i) Criteria. The State agency must knowingly submitted a false or incomplete application, the State agency develop criteria for determining fraudulent claim. must notify the institution within 15 whether a new sponsoring
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organization’s participation will help including the payment of any debts employee’s performance of Program- ensure the delivery of benefits to owed; and related duties and responsibilities, otherwise unserved facilities or (iii) Follow-up. If the State agency has including outside employment that participants, and must disseminate reason to believe that the institution or constitutes a real or apparent conflict of these criteria to new sponsoring its principals were determined interest. Sponsoring organizations that organizations when they request ineligible to participate in another are participating on July 29, 2002 must information about applying to the publicly funded program by reason of submit an outside employment policy Program; and violating that program’s requirements, not later than September 27, 2002. The (ii) Documentation. The new the State agency must follow up with policy shall be effective unless sponsoring organization must submit the entity administering the publicly disapproved by the State agency; documentation that its participation funded program to gather sufficient (17) Bond. Sponsoring organizations will help ensure the delivery of benefits evidence to determine whether the applying for initial participation on or to otherwise unserved facilities or institution or its principals were, in fact, after June 20, 2000, must submit a bond, participants in accordance with the determined ineligible; if such bond is required by State law, State agency’s criteria. (14) Criminal convictions. regulation, or policy. If the State agency (12) National disqualified list. A State (i) General. A State agency is requires a bond for sponsoring agency is prohibited from approving an prohibited from approving an organizations pursuant to State law, institution’s application if the institution’s application if the regulation, or policy, the State agency institution or any of its principals has institution or any of its principals is on must submit a copy of that requirement been convicted of any activity that the National disqualified list, and is and a list of sponsoring organizations occurred during the past seven years prohibited from approving an posting a bond to the appropriate and that indicated a lack of business application submitted by a sponsoring FNSRO on an annual basis; and integrity. A lack of business integrity organization on behalf of a facility if the (18) Each new or renewing institution includes fraud, antitrust violations, facility or any of its principals is on the must submit information sufficient to embezzlement, theft, forgery, bribery, National disqualified list; document that it is financially viable, is falsification or destruction of records, administratively capable of operating (13) Other publicly funded programs. making false statements, receiving the Program in accordance with this (i) General. A State agency is prohibited stolen property, making false claims, part, and has internal controls in effect from approving an institution’s obstruction of justice, or any other to ensure accountability. To document application if, during the past seven activity indicating a lack of business this, any new institution must years, the institution or any of the integrity as defined by the State agency; demonstrate in its application that it is institution’s principals have been and capable of operating in conformance declared ineligible for any other (ii) Certification. As part of an with the following performance publicly funded program by reason of application, institutions must submit a standards, and any renewing institution violating that program’s requirements. certification regarding any criminal must demonstrate in its application that However, this prohibition does not convictions. The certification shall it currently operates in conformance apply if the institution or the principal include language stating that with the following performance has been fully reinstated in, or institutions and individuals providing standards. The State agency must only determined eligible for, that program, false certifications will be placed on the approve the applications of those including the payment of any debts National disqualified list and will be institutions that meet these performance owed; subject to any other applicable civil or standards, and must deny the (ii) Certification. As part of an criminal penalties. This certification applications of those institutions that do application, institutions must submit a will state that neither the institution nor not meet the standards. certification regarding their past any of its principals has been convicted (i) Performance Standard 1— performance in other publicly funded of any activity that occurred during the Financial viability and financial programs. The certification shall past seven years and that indicated a management. The new or renewing include language stating that lack of business integrity. A lack of institution must be financially viable. institutions and individuals providing business integrity includes fraud, Program funds must be expended and false certifications will be placed on the antitrust violations, embezzlement, accounted for in accordance with the National disqualified list and will be theft, forgery, bribery, falsification or requirements of this part, FNS subject to any other applicable civil or destruction of records, making false Instruction 796–2 (‘‘Financial criminal penalties. This certification statements, receiving stolen property, Management in the Child and Adult will include: making false claims, obstruction of Care Food Program’’), and 7 CFR Parts (A) A statement listing the publicly justice, or any other activity indicating 3015 and 3016. To demonstrate funded programs in which the a lack of business integrity as defined by financial viability, the new or renewing institution and its principals have the State agency; institution must document that it meets participated in the past seven years; and (15) Truth of applications and names the following criteria: (B) A certification that, during the and addresses. Institutions must submit (A) Description of Need/Recruitment. past seven years, neither the institution a certification that all information on A new sponsoring organization must nor any of its principals have been the application is true and correct, along demonstrate in its management plan declared ineligible to participate in any with the name, mailing address, and that its participation will help ensure other publicly funded program by date of birth of the institution’s the delivery of Program benefits to reason of violating that program’s executive director and chairman of the otherwise unserved facilities or requirements; or board of directors; participants, in accordance with criteria (C) In lieu of the certification, (16) Outside employment policy. developed by the State agency pursuant documentation that the institution or Sponsoring organizations must submit to paragraph (b)(11) of this section. All the principal previously declared an outside employment policy. The sponsoring organizations must ineligible was later fully reinstated in, policy must restrict other employment demonstrate that they will use or determined eligible for, the program, by employees that interferes with an appropriate practices for recruiting
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facilities, consistent with paragraph (p) (2) The integrity and accountability of requirements in paragraph (b) of this of this section and any State agency all expenses incurred; section and in §§ 226.15(b) and requirements; (3) That claims are processed 226.16(b), the State agency must deny (B) Fiscal Resources and Financial accurately, and in a timely manner; the application. If, in reviewing a new History. An institution must (4) That funds and property are used, institution’s application, the State demonstrate that it has adequate and expenses incurred, for authorized agency determines that the institution financial resources to operate the Program purposes; and has committed one or more serious CACFP on a daily basis, has adequate (5) That a system of safeguards and deficiency listed in paragraph (c)(1)(ii) sources of funds to withstand temporary controls is in place to prevent and of this section, the State agency must interruptions in Program payments and/ detect improper financial activities by initiate action to: or fiscal claims against the institution, employees; (A) Deny the new institution’s and can document financial viability (C) Recordkeeping. Maintains application; and (for example, through audits, financial appropriate records to document (B) Disqualify the new institution and statements, etc.); and compliance with Program requirements, the responsible principals and (C) Administrative Budgets. Costs in including budgets, approved budget responsible individuals (e.g., the person the institution’s administrative budget amendments, and, if applicable, who signs the application). must be necessary, reasonable, management plans and appropriate (ii) List of serious deficiencies for new allowable, and appropriately records on facility operations; institutions. The list of serious documented; (D) Sponsoring organization deficiencies is not identical for each (ii) Performance Standard 2— operations. A sponsoring organization category of institution (new, renewing, Administrative capability. The new or must document in its management plan participating) because the type of renewing institution must be that it will: information likely to be available to the administratively capable. Appropriate (1) Provide adequate and regular State agency is different, depending on and effective management practices training of sponsoring organization staff whether the State agency is reviewing a must be in effect to ensure that the and sponsored facilities in accordance new or renewing institution’s Program operates in accordance with with §§ 226.15(e)(13) and 226.16(d); application or is conducting a review of (2) Perform monitoring in accordance this part. To demonstrate administrative a participating institution. Serious with § 226.16(d), to ensure that capability, the new or renewing deficiencies for new institutions are: sponsored facilities accountably and institution must document that it meets (A) Submission of false information appropriately operate the Program; on the institution’s application, the following criteria: (3) If applicable, accurately classify (A) Has an adequate number and type including but not limited to a day care homes as tier I or tier II in determination that the institution has of qualified staff to ensure the operation accordance with § 226.15(f); and of the Program in accordance with this concealed a conviction for any activity (4) Have a system in place to ensure that occurred during the past seven part; that administrative costs funded from (B) If a sponsoring organization, years and that indicates a lack of Program reimbursements do not exceed business integrity. A lack of business documents in its management plan that regulatory limits set forth at §§ 226.12(a) it employs staff sufficient to meet the integrity includes fraud, antitrust and 226.16(b)(1); and violations, embezzlement, theft, forgery, ratio of monitors to facilities set forth in (E) Facility level operations. All bribery, falsification or destruction of § 226.16(b)(1), and the factors independent centers and sponsored records, making false statements, established by the State agency in facilities must follow practices which receiving stolen property, making false accordance with § 226.6(f)(2); and result in the operation of the Program in (C) If a sponsoring organization, has accordance with the meal service, claims, obstruction of justice, or any Program policies and procedures in recordkeeping, and other operational other activity indicating a lack of writing that assign Program requirements of this part. These business integrity as defined by the responsibilities and duties, and ensure practices must be documented in the State agency; or (B) Any other action affecting the compliance with civil rights independent center’s application or in institution’s ability to administer the requirements; and the sponsoring organization’s Program in accordance with Program (iii) Performance Standard 3— management plan and must demonstrate requirements. Program accountability. The new or that independent centers or sponsored renewing institution must have internal (iii) Serious deficiency notification facilities will: procedures for new institutions. If the controls and other management systems (1) Provide meals that meet the meal State agency determines that a new in effect to ensure fiscal accountability patterns set forth in § 226.20; and to ensure that the Program operates (2) Comply with licensure or approval institution has committed one or more in accordance with the requirements of requirements set forth in paragraph (d) serious deficiency listed in paragraph this part. To demonstrate Program of this section; (c)(1)(ii) of this section, the State agency accountability, the new or renewing (3) Have a food service that complies must use the following procedures to institution must document that it meets with applicable State and local health provide the institution and the the following criteria: and sanitation requirements; responsible principals and responsible (A) Board of directors. Has adequate (4) Comply with civil rights individuals with notice of the serious oversight of the Program by its requirements; deficiency(ies) and an opportunity to governing board of directors; (5) Maintain complete and take corrective action. (B) Fiscal accountability. Has a appropriate records on file; and (A) Notice of serious deficiency. The financial system with management (6) Claim reimbursement only for State agency must notify the controls specified in writing. For eligible meals. institution’s executive director and sponsoring organizations, these written (c) Denial of applications and chairman of the board of directors that operational policies must assure: termination of agreements. (1) Denial of the institution has been determined to (1) Fiscal integrity and accountability a new institution’s application. be seriously deficient. The notice must for all funds and property received, (i) General. If a new institution’s identify the responsible principals and held, and disbursed; application does not meet all of the responsible individuals (e.g., for new
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institutions, the person who signed the update the State agency list to indicate (2) Denial of a renewing institution’s application) and must be sent to those that the serious deficiency(ies) has(ve) application. persons as well. The State agency may been corrected and provide a copy of (i) General. If a renewing institution’s specify in the notice different corrective the notice to the appropriate FNSRO; application does not meet all of the action, and time periods for completing and requirements in paragraph (b) of this the corrective action, for the institution (iii) if the new institution has section and in §§ 226.15(b) and and the responsible principals and corrected the serious deficiency(ies), 226.16(b), the State agency must deny responsible individuals. At the same offer it the opportunity to resubmit its the application. If, in reviewing a time the notice is issued, the State application. If the new institution renewing institution’s application, the agency must add the institution to the resubmits its application, the State State agency determines that the State agency list, along with the basis agency must complete its review of the institution has committed one or more for the serious deficiency determination, application within 30 days after serious deficiency listed in paragraph and provide a copy of the notice to the receiving a complete and correct (c)(2)(ii) of this section, the State agency appropriate FNSRO. The notice must application. must initiate action to deny the also specify: (C) Application denial and proposed renewing institution’s application and (1) The serious deficiency(ies); disqualification. If timely corrective initiate action to disqualify the (2) The actions to be taken to correct action is not taken to fully and renewing institution and the responsible the serious deficiency(ies); permanently correct the serious principals and responsible individuals. (3) The time allotted to correct the deficiency(ies), the State agency must (ii) List of serious deficiencies for serious deficiency(ies) in accordance notify the institution’s executive renewing institutions. The list of serious with paragraph (c)(4) of this section. director and chairman of the board of deficiencies is not identical for each (4) That the serious deficiency directors, and the responsible principals category of institution (new, renewing, determination is not subject to and responsible individuals, that the participating) because the type of administrative review; institution’s application has been information likely to be available to the (5) That failure to fully and denied. At the same time the notice is State agency is different, depending on permanently correct the serious issued, the State agency must also whether the State agency is reviewing a deficiency(ies) within the allotted time update the State agency list and provide new or renewing institution’s will result in denial of the institution’s a copy of the notice to the appropriate application or is conducting a review of application and the disqualification of FNSRO. The notice must also specify: a participating institution. Serious the institution and the responsible (1) That the institution’s application deficiencies for renewing institutions principals and responsible individuals; has been denied and the State agency is are: and proposing to disqualify the institution (A) Submission of false information (6) That the State agency will not pay and the responsible principals and on the institution’s application, any claims for reimbursement for responsible individuals; including but not limited to a eligible meals served or allowable (2) The basis for the actions; and determination that the institution has administrative expenses incurred until (3) The procedures for seeking an concealed a conviction for any activity the State agency has approved the administrative review (in accordance that occurred during the past seven institution’s application and the with paragraph (k) of this section) of the years and that indicates a lack of institution has signed a Program application denial and proposed business integrity. A lack of business agreement. integrity includes fraud, antitrust (B) Successful corrective action. disqualifications. (1) If corrective action has been taken (D) Program payments. The State violations, embezzlement, theft, forgery, to fully and permanently correct the agency is prohibited from paying any bribery, falsification or destruction of serious deficiency(ies) within the claims for reimbursement from a new records, making false statements, allotted time and to the State agency’s institution for eligible meals served or receiving stolen property, making false satisfaction, the State agency must: allowable administrative expenses claims, obstruction of justice, or any (i) notify the institution’s executive incurred until the State agency has other activity indicating a lack of director and chairman of the board of approved its application and the business integrity as defined by the directors, and the responsible principals institution and State agency have signed State agency; and responsible individuals, that the a Program agreement. (B) Failure to operate the Program in State agency has rescinded its serious (E) Disqualification. When the time conformance with the performance deficiency determination; and for requesting an administrative review standards set forth in paragraph (b)(18) (ii) offer the new institution the expires or when the administrative of this section; opportunity to resubmit its application. review official upholds the State (C) Failure to comply with the bid If the new institution resubmits its agency’s denial and proposed procedures and contract requirements of application, the State agency must disqualifications, the State agency must applicable Federal procurement complete its review of the application notify the institution’s executive regulations; within 30 days after receiving a director and chairman of the board of (D) Use of a food service management complete and correct application. directors, and the responsible principals company that is in violation of health (2) If corrective action is complete for and responsible individuals that the codes; the institution but not for all of the institution and the responsible principal (E) Failure by a sponsoring responsible principals and responsible and responsible individuals have been organization of day care homes to individuals (or vice versa), the State disqualified. At the same time the notice properly classify day care homes as tier agency must: is issued, the State agency must also I or tier II in accordance with (i) continue with the actions (as set update the State agency list and provide § 226.15(f); forth in paragraph (c)(1)(iii)(C) of this a copy of the notice and the mailing (F) Failure by a sponsoring section) against the remaining parties; address and date of birth for each organization to properly train or (ii) at the same time the notice is responsible principal and responsible monitor sponsored facilities in issued, the State agency must also individual to the appropriate FNSRO. accordance with § 226.16(d);
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(G) Failure to perform any of the other State agency after having been notified temporarily-extended agreement and to financial and administrative that it is seriously deficient will still disqualify the institution and the responsibilities required by this part; result in the instituion’s formal responsible principals and responsible (H) Failure to properly implement and termination by the State agency and individuals; administer the day care home placement of the institution and its (2) The basis for the actions; termination and administrative review responsible principals and responsible (3) That, if the institution voluntarily provisions set forth at paragraph (l) of individuals on the National disqualified terminates its agreement after receiving this section and § 226.16(l); or list. the notice of the proposed termination, (I) any other action affecting the (B) Successful corrective action. the institution and the responsible institution’s ability to administer the (1) If corrective action has been taken principals and responsible individuals Program in accordance with Program to fully and permanently correct the will be disqualified; requirements. serious deficiency(ies) within the (4) The procedures for seeking an (iii) Serious deficiency notification allotted time and to the State agency’s administrative review (in accordance procedures for renewing institutions. If satisfaction, the State agency must: with paragraph (k) of this section) of the the State agency determines that a (i) Notify the institution’s executive application denial and proposed renewing institution has committed one director and chairman of the board of disqualifications; and or more serious deficiency listed in directors, and the responsible principals (5) That the institution may continue paragraph (c)(2)(ii) of this section, the and responsible individuals, that the to participate in the Program and State agency must use the following State agency has rescinded its serious receive Program reimbursement for procedures to provide the institution deficiency determination; and eligible meals served and allowable and the responsible principals and (ii) Offer the renewing institution the administrative costs incurred until its responsible individuals notice of the opportunity to resubmit its application. administrative review is completed. serious deficiency(ies) and an If the renewing institution resubmits its (D) Program payments and extended opportunity to take corrective action. application, the State agency must agreement. If the renewing institution’s (A) Notice of serious deficiency. The complete its review of the application agreement expires before the end of the State agency must notify the within 30 days after receiving a time allotted for corrective action, and/ institution’s executive director and complete and correct application. or the conclusion of any administrative (2) If corrective action is complete for chairman of the board of directors that review requested by the renewing the institution but not for all of the the institution has been determined to institution: responsible principals and responsible be seriously deficient. The notice must (1) The State agency must temporarily individuals (or vice versa), the State identify the responsible principals and extend its current agreement with the agency must: responsible individuals and must be renewing institution and continue to sent to those persons as well. The State (i) continue with the actions (as set forth in paragraph (c)(2)(iii)(C) of this pay any valid unpaid claims for agency may specify in the notice reimbursement for eligible meals served different corrective action, and time section) against the remaining parties; (ii) at the same time the notice is and allowable administrative expenses periods for completing the corrective incurred; and action, for the institution and the issued, the State agency must also (2) The actions set forth in paragraph responsible principals and responsible update the State agency list to indicate (c)(2)(iii)(D)(1) of this section must be individuals. At the same time the notice that the serious deficiency(ies) has(ve) taken either until the serious is issued, the State agency must add the been corrected and provide a copy of deficiency(ies) is corrected or until the institution to the State agency list, along the notice to the appropriate FNSRO; institution’s agreement is terminated, with the basis for the serious deficiency and including the period of any determination, and provide a copy of (iii) if the renewing institution has administrative review; the notice to the appropriate FNSRO. corrected the serious deficiency(ies), (E) Agreement termination and The notice must also specify: offer it the opportunity to resubmit its (1) The serious deficiency(ies); application. If the renewing institution disqualification. When the time for (2) The actions to be taken to correct resubmits its application, the State requesting an administrative review the serious deficiency(ies); agency must complete its review of the expires or when the administrative (3) The time allotted to correct the application within 30 days after review official upholds the State serious deficiency(ies) in accordance receiving a complete and correct agency’s denial of the institution’s with paragraph (c)(4) of this section; application. application, the proposed termination, (4) That the serious deficiency (C) Application denial and proposed and the proposed disqualifications, the determination is not subject to disqualification. If timely corrective State agency must: administrative review. action is not taken to fully and (1) Notify the institution’s executive (5) That failure to fully and permanently correct the serious director and chairman of the board of permanently correct the serious deficiency(ies), the State agency must directors, and the responsible principals deficiency(ies) within the allotted time notify the institution’s executive and responsible individuals, that the will result in the State agency’s denial director and chairman of the board of temporarily-extended agreement has of the institution’s application, the directors, and the responsible principals been terminated and that the institution proposed termination of the institution’s and responsible individuals, that the and the responsible principals and agreement (if the State agency has institution’s application has been responsible individuals have been temporarily extended the agreement denied. At the same time the notice is disqualified; pursuant to paragraph (c)(2)(iii)(D) of issued, the State agency must update the (2) Update the State agency list at the this section) and the proposed State agency list and provide a copy of time such notice is issued; and disqualification of the institution and the notice to the appropriate FNSRO. (3) Provide a copy of the notice and the responsible principals and The notice must also specify: the mailing address and date of birth for responsible individuals; and (1) That the institution’s application each responsible principal and (6) That the institution’s voluntary has been denied and the State agency is responsible individual to the termination of its agreement with the proposing to terminate the institution’s appropriate FNSRO.
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(3) Termination of a participating (D) Failure to comply with the bid has been fully reinstated in, or is now institution’s agreement. (i) General. If procedures and contract requirements of eligible to participate in, that program, the State agency holds an agreement applicable Federal procurement including the payment of any debts with an institution operating in more regulations; owed; than one State that has been disqualified (E) Failure to return to the State (T) Conviction of the institution or from the Program by another State agency any advance payments that any of its principals for any activity that agency and placed on the National exceeded the amount earned for serving occurred during the past seven years disqualified list, the State agency must eligible meals, or failure to return and that indicates a lack of business terminate the institution’s agreement disallowed start-up or expansion integrity. A lack of business integrity effective no later than 45 days of the payments; includes fraud, antitrust violations, date of the institution’s disqualification (F) Failure to maintain adequate embezzlement, theft, forgery, bribery, by the other State agency. At the same records; falsification or destruction of records, time the notice of termination is issued, (G) Failure to adjust meal orders to making false statements, receiving the State agency must add the conform to variations in the number of stolen property, making false claims, institution to the State agency list and participants; obstruction of justice, or any other indicate that the institution’s agreement (H) Claiming reimbursement for meals activity indicating a lack of business has been terminated and provide a copy not served to participants; integrity as defined by the State agency; of the notice to the appropriate FNSRO. (I) Claiming reimbursement for a or If the State agency determines that a significant number of meals that do not (U) Any other action affecting the participating institution has committed meet Program requirements; institution’s ability to administer the one or more serious deficiency listed in (J) Use of a food service management Program in accordance with Program paragraph (c)(3)(ii) of this section, the company that is in violation of health requirements. codes; State agency must initiate action to (iii) Serious deficiency notification (K) Failure of a sponsoring terminate the agreement of a procedures for participating institutions. organization to disburse payments to its participating institution and initiate If the State agency determines that a facilities in accordance with the action to disqualify the institution and participating institution has committed regulations at § 226.16(g) and (h) or in any responsible principals and one or more serious deficiency listed in accordance with its management plan; responsible individuals. paragraph (c)(3)(ii) of this section, the (ii) List of serious deficiencies for (L) Claiming reimbursement for meals State agency must use the following participating institutions. The list of served by a proprietary title XX child procedures to provide the institution serious deficiencies is not identical for care center during a calendar month in and the responsible principals and each category of institution (new, which less than 25 percent of its responsible individuals notice of the renewing, participating) because the enrolled children, or 25 percent of its serious deficiency(ies) and an type of information likely to be available licensed capacity, whichever is less, to the State agency is different, were title XX beneficiaries; opportunity to take corrective action. depending on whether the State agency (M) Claiming reimbursement for However, if the serious deficiency(ies) is reviewing a new or renewing meals served by a proprietary title XIX constitutes an imminent threat to the institution’s application or is or title XX adult day care center during health or safety of participants, or the conducting a review of a participating a calendar month in which less than 25 institution has engaged in activities that institution. Serious deficiencies for percent of its enrolled adult participants threaten the public health or safety, the participating institutions are: were title XIX or title XX beneficiaries; State agency must follow the procedures (A) Submission of false information (N) Failure by a sponsoring in paragraph (c)(5)(i) of this section on the institution’s application, organization of day care homes to instead of the procedures below. including but not limited to a properly classify day care homes as tier Further, if the serious deficiency is the determination that the institution has I or tier II in accordance with submission of a false or fraudulent concealed a conviction for any activity § 226.15(f); claim, in addition to the procedures that occurred during the past seven (O) Failure by a sponsoring below, the State agency may suspend years and that indicates a lack of organization to properly train or the institution’s participation in business integrity. A lack of business monitor sponsored facilities in accordance with paragraph (c)(5)(ii) of integrity includes fraud, antitrust accordance with § 226.16(d); this section. violations, embezzlement, theft, forgery, (P) Use of day care home funds by a (A) Notice of serious deficiency. The bribery, falsification or destruction of sponsoring organization to pay for the State agency must notify the records, making false statements, sponsoring organization’s institution’s executive director and receiving stolen property, making false administrative expenses; chairman of the board of directors that claims, obstruction of justice, or any (Q) Failure to perform any of the other the institution has been determined other activity indicating a lack of financial and administrative seriously deficient. The notice must business integrity as defined by the responsibilities required by this part; identify the responsible principals and State agency; (R) Failure to properly implement and responsible individuals and must be (B) Permitting an individual who is administer the day care home sent to those persons as well. The State on the National disqualified list to serve termination and administrative review agency may specify in the notice in a principal capacity with the provisions set forth at paragraph (l) of different corrective action and time institution or, if a sponsoring this section and § 226.16(l); periods for completing the corrective organization, permitting such an (S) The fact the institution or any of action for the institution and the individual to serve as a principal in a the institution’s principals have been responsible principals and responsible sponsored center or as a day care home; declared ineligible for any other individuals. At the same time the notice (C) Failure to operate the Program in publicly funded program by reason of is issued, the State agency must add the conformance with the performance violating that program’s requirements. institution to the State agency list, along standards set forth in paragraph (b)(18) However, this prohibition does not with the basis for the serious deficiency of this section; apply if the institution or the principal determination, and provide a copy of
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the notice to the appropriate FNSRO. agency must complete its review of the the responsible principals and The notice must also specify: application within 30 days after responsible individuals have been (1) The serious deficiency(ies); receiving a complete and correct disqualified; (2) The actions to be taken to correct application. (2) Update the State agency list at the the serious deficiency(ies); (C) Proposed termination and time such notice is issued; and (3) The time allotted to correct the proposed disqualification. If timely (3) Provide a copy of the notice and serious deficiency(ies) in accordance corrective action is not taken to fully the mailing address and date of birth for with paragraph (c)(4) of this section; and permanently correct the serious each responsible principal and (4) That the serious deficiency deficiency(ies), the State agency must responsible individual to the determination is not subject to notify the institution’s executive appropriate FNSRO. administrative review. director and chairman of the board of (4) Corrective action timeframes. (5) That failure to fully and directors, and the responsible principals (i) General. Except as noted in this permanently correct the serious and responsible individuals, that the paragraph (c)(4), the State agency is deficiency(ies) within the allotted time State agency is proposing to terminate prohibited from allowing more than 90 will result in the State agency’s the institution’s agreement and to days for corrective action from the date proposed termination of the institution’s disqualify the institution and the the institution receives the serious agreement and the proposed responsible principals and responsible deficiency notice. disqualification of the institution and individuals. At the same time the notice (ii) Unlawful practices. If the State the responsible principals and is issued, the State agency must also agency determines that the institution responsible individuals; and update the State agency list and provide has engaged in unlawful practices, (6) That the institution’s voluntary a copy of the notice to the appropriate submitted false or fraudulent claims or termination of its agreement with the FNSRO. The notice must also specify: other information to the State agency, or State agency after having been notified (1) That the State agency is proposing been convicted of or concealed a that it is seriously deficient will still to terminate the institution’s agreement criminal background, the State agency is result in the instituion’s formal and to disqualify the institution and the prohibited from allowing more than 30 termination by the State agency and responsible principals and responsible days for corrective action. placement of the institution and its individuals; (iii) Long-term changes. For serious responsible principals and responsible (2) The basis for the actions; deficiencies requiring the long-term individuals on the National disqualified (3) That, if the institution voluntarily revision of management systems or list. terminates its agreement after receiving processes, the State agency may permit (B) Successful corrective action. the notice of proposed termination, the more than 90 days to complete the (1) If corrective action has been taken institution and the responsible corrective action as long as a corrective to fully and permanently correct the principals and responsible individuals action plan is submitted to and serious deficiency(ies) within the will be disqualified. approved by the State agency within 90 allotted time and to the State agency’s (4) The procedures for seeking an days (or such shorter deadline as the satisfaction, the State agency must: administrative review (in accordance State agency may establish). The (i) Notify the institution’s executive with paragraph (k) of this section) of the corrective action must include director and chairman of the board of application denial and proposed milestones and a definite completion directors, and the responsible principals disqualifications; and date that the State agency will monitor. and responsible individuals, that the (5) That, unless participation has been The determination of serious deficiency State agency has rescinded its serious suspended, the institution may continue will remain in effect until the State deficiency determination; and to participate and receive Program agency determines that the serious (ii) Offer the renewing institution the reimbursement for eligible meals served deficiency(ies) has(ve) been fully and opportunity to resubmit its application. and allowable administrative costs permanently corrected within the If the renewing institution resubmits its incurred until its administrative review allotted time. application, the State agency must is completed. (5) Suspension of an institution’s complete its review of the application (D) Program payments. Unless participation. A State agency is within 30 days after receiving a participation has been suspended, the prohibited from suspending an complete and correct application. State agency must continue to pay any institution’s participation (including all (2) If corrective action is complete for valid unpaid claims for reimbursement Program payments) except for the the institution but not for all of the for eligible meals served and allowable reasons set forth in this paragraph (c)(5). responsible principals and responsible administrative expenses incurred until (i) Public health or safety. individuals (or vice versa), the State the serious deficiency(ies) is corrected (A) General. If State or local health or agency must: or the institution’s agreement is licensing officials have cited an (i) Continue with the actions (as set terminated, including the period of any institution for serious health or safety forth in paragraph (c)(3)(iii)(C) of this administrative review. violations, the State agency must section) against the remaining parties; (E) Agreement termination and immediately suspend the institution’s (ii) At the same time the notice is disqualification. When the time for Program participation, initiate action to issued, the State agency must also requesting an administrative review terminate the institution’s agreement, update the State agency list to indicate expires or when the administrative and initiate action to disqualify the that the serious deficiency(ies) has(ve) review official upholds the State institution and the responsible been corrected and provide a copy of agency’s proposed termination and principals and responsible individuals the notice to the appropriate FNSRO; disqualifications, the State agency must: prior to any formal action to revoke the and (1) Notify the institution’s executive institution’s licensure or approval. If the (iii) If the renewing institution has director and chairman of the board of State agency determines that there is an corrected the serious deficiency(ies), directors, and the responsible principals imminent threat to the health or safety offer it the opportunity to resubmit its and responsible individuals, that the of participants at an institution, or that application. If the renewing institution institution’s agreement has been the institution has engaged in activities resubmits its application, the State terminated and that the institution and that threaten the public health or safety,
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the State agency must immediately suspension, proposed termination, and (B) Proposed suspension of notify the appropriate State or local proposed disqualifications; and participation. If the State agency licensing and health authorities and (6) That, if the administrative review decides to propose to suspend an take action that is consistent with the official overturns the suspension, the institution’s participation due to the recommendations and requirements of institution may claim reimbursement for institution’s submission of a false or those authorities. An imminent threat to eligible meals served and allowable fraudulent claim, it must notify the the health or safety of participants and administrative costs incurred during the institution’s executive director and engaging in activities that threaten the suspension period. chairman of the board of directors that public health or safety constitute serious (C) Agreement termination and the State agency intends to suspend the deficiencies; however, the State agency disqualification. When the time for institution’s participation (including all must use the procedures in this requesting an administrative review Program payments) unless the paragraph (c)(5)(i) (instead of the expires or when the administrative institution requests a review of the procedures in paragraph (c)(3) of this review official upholds the State proposed suspension. At the same time section) to provide the institution notice agency’s proposed termination and the notice is issued, the State agency of the suspension of participation, disqualifications, the State agency must: must also update the State agency list serious deficiency, proposed (1) Notify the institution’s executive and provide a copy of the notice to the termination of the institution’s director and chairman of the board of appropriate FNSRO. The notice must agreement, and proposed directors, and the responsible principals identify the responsible principals and disqualification of the responsible and responsible individuals, that the responsible individuals and must be principals and responsible individuals. institution’s agreement has been sent to those persons as well. The notice (B) Notice of suspension, serious terminated and that the institution and must also specify: deficiency, proposed termination, and the responsible principals and (1) That the State agency is proposing proposed disqualification. The State responsible individuals have been to suspend the institution’s agency must notify the institution’s disqualified; participation; executive director and chairman of the (2) update the State agency list at the (2) That the proposed suspension is board of directors that the institution’s time such notice is issued; and based on the institution’s submission of participation (including Program (3) provide a copy of the notice and a false or fraudulent claim, as described payments) has been suspended, that the the mailing address and date of birth for in the serious deficiency notice; institution has been determined to be each responsible principal and (3) The effective date of the seriously deficient, and that the State responsible individual to the suspension (which may be no earlier agency proposes to terminate the appropriate FNSRO. than 10 days after the institution institution’s agreement and to disqualify (D) Program payments. The State receives the suspension notice); (4) The name, address and telephone the institution and the responsible agency is prohibited from paying any number of the suspension review principals and responsible individuals. claims for reimbursement from a official who will conduct the The notice must also identify the suspended institution. However, if the suspension review; and responsible principals and responsible suspended institution prevails in the individuals and must be sent to those (5) That if the institution wishes to administrative review of the proposed have a suspension review, it must persons as well. At the same time this termination, the State agency must pay notice is sent, the State agency must add request a review and submit to the any claims for reimbursement for suspension review official written the institution and the responsible eligible meals served and allowable principals and responsible individuals documentation opposing the proposed administrative costs incurred during the suspension within 10 days of the to the State agency list, along with the suspension period. basis for the serious deficiency institution’s receipt of the notice. (ii) False or fraudulent claims. (C) Suspension review. If the determination and provide a copy of the (A) General. If the State agency institution requests a review of the State notice to the appropriate FNSRO. The determines that an institution has agency’s proposed suspension of notice must also specify: knowingly submitted a false or participation, the suspension review (1) That the State agency is fraudulent claim, the State agency may must be heard by a suspension review suspending the institution’s initiate action to suspend the official who must: participation (including Program institution’s participation and must (1) Be an independent and impartial payments), proposing to terminate the initiate action to terminate the person other than, and not accountable institution’s agreement, and proposing institution’s agreement and initiate to, any person involved in the decision to disqualify the institution and the action to disqualify the institution and to initiate suspension proceedings; responsible principals and responsible the responsible principals and (2) Immediately notify the State individuals; responsible individuals (in accordance agency that the institution has contested (2) The serious deficiency(ies); with paragraph (c)(3) of this section). the proposed suspension and must (3) That, if the institution voluntary The submission of a false or fraudulent obtain from the State agency its notice terminates its agreement with the State claim constitutes a serious deficiency as of proposed suspension of participation, agency after having been notified of the set forth in paragraph (c)(3)(ii) of this along with all supporting proposed termination, the institution section, which lists serious deficiencies documentation; and and the responsible principals and for participating institutions. If the State (3) Render a decision on suspension responsible individuals will be agency wishes to suspend the of participation within 10 days of the disqualified; institution’s participation, it must use deadline for receiving the institution’s (4) That the serious deficiency the following procedures to issue the documentation opposing the proposed determination is not subject to notice of proposed suspension of suspension. administrative review; participation at the same time it issues (D) Suspension review decision. If the (5) The procedures for seeking an the serious deficiency notice, which suspension review official determines administrative review (consistent with must include the information described that the State agency’s proposed paragraph (k) of this section) of the in paragraph (c)(3)(iii)(A) of this section. suspension is not appropriate, the State
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agency is prohibited from suspending (ii) Serious deficiency notification information necessary to support these participation. If the suspension review procedures. If FNS determines that an actions and, in the case of a false and official determines, based on a institution has committed one or more fraudulent claim, will provide an preponderance of the evidence, that the serious deficiency listed in paragraph individual to serve as the suspension State agency’s action was appropriate, (c)(3)(ii) of this section (the list of review official if requested by the State the State agency must suspend the serious deficiencies for participating agency. institution’s participation (including all institutions), FNS will use the following (C) Successful corrective action. Program payments), effective on the procedures to provide the institution (1) If corrective action has been taken date of the suspension review decision. and the responsible principals and to fully and permanently correct the The State agency must notify the responsible individuals with notice of serious deficiency(ies) within the institution’s executive director and the serious deficiency(ies) and an allotted time and to FNS’s satisfaction, chairman of the board of directors, and opportunity to take corrective action. FNS will notify the institution’s the responsible principals and (A) Notice of serious deficiency. FNS executive director and chairman of the responsible individuals, that the will notify the institution’s executive board of directors, and the responsible institution’s participation has been director and chairman of the board of principals and responsible individuals, suspended. At the same time the notice directors that the institution has been that it has rescinded its serious is issued, the State agency must also found to be seriously deficient. The deficiency determination; and update the State agency list and provide notice will identify the responsible (2) If corrective action is complete for a copy of the notice to the appropriate principals and responsible individuals the institution but not for all of the FNSRO. The notice must also specify: and will be sent to them as well. FNS responsible principals and responsible (1) That the State agency is may specify in the notice different individuals (or vice versa), FNS will suspending the institution’s corrective action and time periods for continue with the actions (as set forth in participation (including Program completing the corrective action, for the paragraph (c)(6)(ii)(D) of this section) payments); institution and the responsible against the remaining parties. (2) The effective date of the principals and responsible individuals. (D) Proposed disqualification. If suspension (the date of the suspension The notice will also specify: timely corrective action is not taken to (1) The serious deficiency(ies); review decision); fully and permanently correct the (2) The actions to be taken to correct (3) The procedures for seeking an serious deficiency(ies), FNS will notify the serious deficiency(ies); the institution’s executive director and administrative review (in accordance (3) The time allotted to correct the with paragraph (k) of this section) of the chairman of the board of directors, and serious deficiency(ies) in accordance the responsible principals and suspension; and with paragraph (c)(4) of this section; (4) That if the administrative review responsible individuals, that FNS is (4) That failure to fully and proposing to disqualify them. The official overturns the suspension, the permanently correct the serious institution may claim reimbursement for notice will also specify: deficiency(ies) within the allotted time, (1) That FNS is proposing to eligible meals served and allowable or the institution’s voluntary disqualify the institution and the administrative costs incurred during the termination of its agreement(s) with any responsible principals and responsible suspension period. State agency after having been notified individuals; (E) Program payments. A State agency that it is seriously deficient, will result (2) The basis for the actions; is prohibited from paying any claims for in the proposed disqualification of the (3) That, if the institution seeks to reimbursement submitted by a institution and the responsible voluntarily terminate its agreement after suspended institution. However, if the principals and responsible individuals receiving the notice of proposed institution suspended for the and the termination of its agreement(s) disqualification, the institution and the submission of false or fraudulent claims with all State agencies; and responsible principals and responsible is a sponsoring organization, the State (5) That the serious deficiency individuals will be disqualified; agency must ensure that sponsored determination is not subject to (4) The procedures for seeking an facilities continue to receive administrative review. administrative review (in accordance reimbursement for eligible meals served (B) Suspension of participation. If with paragraph (k) of this section) of the during the suspension period. If the FNS determines that there is an proposed disqualifications; suspended institution prevails in the imminent threat to the health or safety (5) That unless participation has been administrative review of the proposed of participants at an institution, or that suspended, the institution may continue termination, the State agency must pay the institution has engaged in activities to participate and receive Program any valid unpaid claims for that threaten the public health or safety, reimbursement for eligible meals served reimbursement for eligible meals served any State agency that holds an and allowable administrative costs and allowable administrative costs agreement with the institution must incurred until its administrative review incurred during the suspension period. suspend the participation of the is completed; and (F) Maximum time for suspension. institution. If FNS determines that the (6) That if the institution does not Under no circumstances may the institution has submitted a false or prevail in the administrative review, suspension of participation remain in fraudulent claim, it may require any any State agency holding an agreement effect for more than 120 days following State agency that holds an agreement with the institution will be required to the suspension review decision. with the institution to initiate action to terminate that agreement and the (6) FNS determination of serious suspend the institution’s participation institution is prohibited from seeking an deficiency. (i) General. FNS may for false or fraudulent claims in administrative review of the termination determine independently that a accordance with paragraph (c)(5)(ii) of of the agreement by the State participating institution has committed this section (which deals with an agency(ies). one or more serious deficiency listed in institution’s suspension by a State (E) Disqualification. When the time paragraph (c)(3)(ii) of this section, agency for submission of false or for requesting an administrative review which lists serious deficiencies for fraudulent claims). In both cases, FNS expires or when the administrative participating institutions. will provide the State agency the review official upholds FNS’s proposed
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disqualifications, FNS will notify the this section, the State agency must disqualified from participation. institution’s executive director and terminate the agreement of any However, if the institution, principal or chairman of the board of directors, and participating institution that is individual has failed to repay debts the responsible principals and disqualified by another State agency or owed under the Program, they will responsible individuals, that the by FNS. remain on the list until the debt has institution and the responsible principal (iii) Effect on sponsored centers. No been repaid. or responsible individual have been organization on the National (vi) Removal of day care homes from disqualified. disqualified list may participate in the the list. Once included on the National (F) Program payments. If the State Program as a sponsored center. As noted disqualified list, a day care home will agency holds an agreement with an in § 226.16(b) and paragraph (b)(12) of remain on the list until such time as the institution that FNS has determined to this section, a sponsoring organization State agency determines that the serious be seriously deficient, the State agency is prohibited from submitting an deficiency(ies) that led to its placement must continue to pay any valid unpaid application on behalf of a sponsored on the list has(ve) been corrected, or claims for reimbursement for eligible facility (and a State agency is prohibited until seven years have elapsed since its meals served and allowable from approving such an application) if agreement was terminated for cause. administrative expenses incurred until the facility is on the National However, if the day care home has the serious deficiency(ies) is corrected disqualified list. failed to repay debts owed under the or the State agency terminates the (iv) Effect on individuals. No Program, it will remain on the list until institution’s agreement, including the individual on the National disqualified the debt has been repaid. period of any administrative review, list may serve as a principal in any (8) State agency list. (i) Maintenance unless participation has been institution or facility or as a day care of the State agency list. The State agency suspended. home provider. must maintain a State agency list (in the (G) Required State agency action. (1) (A) Principal for an institution or a form of an actual paper or electronic list Disqualified institutions. If the State sponsored facility. As noted in or retrievable paper records). The list agency holds an agreement with an paragraph (b)(12) of this section, the must be made available to FNS upon institution that FNS determines to be State agency must deny the application request, and must include the following seriously deficient and subsequently of a new or renewing institution if any information: disqualifies, the State agency must of the institution’s principals is on the (A) Institutions determined to be terminate the institution’s agreement National disqualified list. As noted in seriously deficient by the State agency, effective no later than 45 days after the paragraphs (c)(3)(ii)(B) and including the names and mailing date of the institution’s disqualification (c)(6)(ii)(G)(2) of this section, the State addresses of the institutions and the by FNS. As noted in paragraph (k)(3)(iv) agency must declare an institution status of the institutions as they move of this section, the termination is not seriously deficient and initiate action to through the possible subsequent stages subject to administrative review. At the terminate the institution’s agreement of corrective action, proposed same time the notice of termination is and disqualify the institution if the termination, suspension, agreement issued, the State agency must add the institution permits an individual who is termination, and/or disqualification, as institution to the State agency list and on the National disqualified list to serve applicable; provide a copy of the notice to the in a principal capacity for the (B) Responsible principals and appropriate FNSRO. institution or one of its facilities. individuals who have been disqualified (2) Disqualified principals. If the State (B) Principal for a sponsored facility. from participation by the State agency, agency holds an agreement with an As noted in § 226.16(b) and paragraph including their names, mailing institution whose principal FNS (b)(12) of this section, a sponsoring addresses, and dates of birth; and determines to be seriously deficient and organization is prohibited from (C) Day care home providers whose subsequently disqualifies, the State submitting an application on behalf of a agreements have been terminated for agency must determine the institution to sponsored facility (or a State agency cause by a sponsoring organization in be seriously deficient and initiate action from approving such an application) if the State, including their names, to terminate and disqualify the any of the facility’s principals are on the mailing addresses, and dates of birth. institution in accordance with the National disqualified list. (ii) Referral of disqualified day care procedures in paragraph (c)(3) of this (C) Serving as a day care home. As homes to FNS. Within 10 days of section. The State agency must initiate noted in § 226.16(b) and paragraph receiving a notice of termination and these actions no later than 45 days after (b)(12) of this section, a sponsoring disqualification from a sponsoring the date of the principal’s organization is prohibited from organization, the State agency must disqualification by FNS. submitting an application on behalf of a provide the appropriate FNSRO the (7) National disqualified list. sponsored facility (and a State agency is name, mailing address, and date of birth (i) Maintenance and availability of prohibited from approving such an of each day care home provider whose list. FNS will maintain the National application) if the facility is on the agreement is terminated for cause on or disqualified list and make it available to National disqualified list. after July 29, 2002. all State agencies and all sponsoring (v) Removal of institutions, principals, (iii) Prior lists of disqualified day care organizations. and individuals from the list. Once homes. If on July 29, 2002 the State (ii) Effect on institutions. No included on the National disqualified agency maintains a list of day care organization on the National list, an institution and responsible homes that have been disqualified from disqualified list may participate in the principals and responsible individuals participation, the State agency may Program as an institution. As noted in remain on the list until such time as continue to prohibit participation by paragraph (b)(12) of this section, the FNS, in consultation with the those day care homes. However, the State agency must deny the application appropriate State agency, determines State agency must remove a day care of a new or renewing institution if the that the serious deficiency(ies) that led home from its prior list no later than the institution is on the National to their placement on the list has(ve) time at which the State agency disqualified list. In addition, as noted in been corrected, or until seven years determines that the serious paragraphs (c)(3)(i) and (c)(6)(ii)(G)(1) of have elapsed since they were deficiency(ies) that led to the day care
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home’s placement on the list has(ve) must provide a copy of all such letters (viii) Recovery of advances. Recovery been corrected or July 29, 2009 (unless to the appropriate FNSRO. of all or part of an advance in excess of the day care home has failed to repay * * * * * the claim for the applicable period. The debts owed under the Program). If the (k) Administrative reviews for recovery may be through a demand for day care home has failed to repay its institutions and responsible principals full repayment or an adjustment of debt, the State agency may keep the day and responsible individuals. subsequent payments (see care home on its prior list until the debt (1) General. The State agency must § 226.10(b)(3)); has been repaid. develop procedures for offering (ix) Claim denial. Denial of all or a part of an institution’s claim for * * * * * administrative reviews to institutions and responsible principals and reimbursement (except for a denial (f) * * * responsible individuals. The procedures based on a late submission under (1) * * * The Program agreement must be consistent with paragraph (k) of § 226.10(e)) (see §§ 226.10(f) and must also notify the institution of the this section. 226.14(a)); right of the State agency, the (2) Actions subject to administrative (x) Claim deadline exceptions and Department, and other State or Federal review. Except as provided in § 226.8(g), requests for upward adjustments to a officials to make announced or the State agency must offer an claim. Decision by the State agency not unannounced reviews of their administrative review for the following to forward to FNS an exception request operations during the institution’s actions: by an institution for payment of a late normal hours of child or adult care (i) Application denial. Denial of a new claim, or a request for an upward operations and that anyone making such or renewing institution’s application for adjustment to a claim (see § 226.10(e)); (xi) Overpayment demand. Demand reviews must show photo identification participation (see paragraph (b) of this for the remittance of an overpayment that demonstrates that they are section, on State agency review of an (see § 226.14(a)); and employees of one of these entities. institution’s application; and paragraphs (xii) Other actions. Any other action (2) * * * The State agency must (c)(1) and (c)(2) of this section, on State of the State agency affecting an establish factors, consistent with agency denial of a new or renewing institution’s participation or its claim § 226.16(b)(1), that the State agency will institution’s application); for reimbursement. consider in determining whether a (ii) Denial of sponsored facility (3) Actions not subject to sponsoring organization has sufficient application. Denial of an application administrative review. The State agency staff to perform required monitoring submitted by a sponsoring organization is prohibited from offering responsibilities at all of its sponsored on behalf of a facility; administrative reviews of the following facilities. As part of its review of the (iii) Notice of proposed termination. actions: management plan, the State agency Proposed termination of an institution’s (i) FNS decisions on claim deadline must determine the appropriate level of agreement (see paragraphs (c)(2)(iii)(C), exceptions and requests for upward staffing for each sponsoring (c)(3)(iii)(C), and (c)(5)(i)(B) of this adjustments to a claim. A decision by organization, consistent with the section, dealing with proposed FNS to deny an exception request by an staffing range of monitors set forth in termination of agreements with institution for payment of a late claim, § 226.16(b)(1) and the factors it has renewing institutions, participating or for an upward adjustment to a claim established. The State agency must institutions, and participating (see § 226.10(e)); ensure that each new sponsoring institutions suspended for health or (ii) Determination of serious organization applying for participation safety violations); deficiency. A determination that an after July 29, 2002 meets this (iv) Notice of proposed institution is seriously deficient (see requirement. The State agency must disqualification of a responsible paragraphs (c)(1)(iii)(A), (c)(2)(iii)(A), principal or responsible individual. ensure that each currently participating (c)(3)(iii)(A), and (c)(5)(i)(B) of this Proposed disqualification of a sponsoring organization meets this section, dealing with proposed responsible principal or responsible requirement no later than July 29, 2003. disqualification of responsible individual (see paragraphs (c)(1)(iii)(C), principals or responsible individuals in (3) * * * For a sponsoring (c)(2)(iii)(C), (c)(3)(iii)(C), and (c)(5)(i)(B) new, renewing, and participating organization of centers, the State agency of this section, dealing with proposed institutions, and participating is prohibited from approving the disqualification of responsible institutions suspended for health or sponsoring organization’s principals or responsible individuals in safety violations); administrative budget, or any new, renewing, and participating (iii) Disqualification and placement amendments to the budget, if the institutions, and participating on State agency list and National administrative budget shows that the institutions suspended for health or disqualified list. Disqualification of an Program will be charged for safety violations); institution or a responsible principal or administrative costs in excess of 15 (v) Suspension of participation. responsible individual, and the percent of the meal reimbursements Suspension of an institution’s subsequent placement on the State estimated to be earned during the participation (see paragraphs (c)(5)(i)(B) agency list and the National disqualified budget year. However, the State agency and (c)(5)(ii)(D) of this section, dealing list (see paragraphs (c)(1)(iii)(E), may waive this limit if the sponsoring with suspension for health or safety (c)(2)(iii)(E), (c)(3)(iii)(E), and (c)(5)(i)(C) organization provides justification that reasons or submission of a false or of this section, dealing with proposals to it requires Program funds in excess of 15 fraudulent claim); disqualify related to new, renewing, and percent to pay its administrative costs (vi) Start-up or expansion funds participating institutions, and in and if the State agency is convinced that denial. Denial of an institution’s institutions suspended for health or the institution will have adequate application for start-up or expansion safety violations); or funding to provide meals meeting the payments (see § 226.7(h)); (iv) Termination. Termination of a requirements of § 226.20. The State (vii) Advance denial. Denial of a participating institution’s agreement, agency must document all waiver request for an advance payment (see including termination of a participating approvals and denials in writing, and § 226.10(b)); institution’s agreement based on the
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disqualification of the institution by to be considered, written documentation may not be used as a basis for another State agency or FNS (see must be submitted to the administrative overturning the State agency’s action if paragraphs (c)(3)(i) and (c)(7)(ii) of this review official not later than 30 days a decision is not made within the section). after receipt of the notice of action. specified timeframe. (4) Provision of administrative review (vi) Hearing. A hearing must be held (x) Final decision. The determination procedures to institutions and by the administrative review official in made by the administrative review responsible principals and responsible addition to, or in lieu of, a review of official is the final administrative individuals. The State agency’s written information only if the determination to be afforded the administrative review procedures must institution or the responsible principals institution and the responsible be provided: and responsible individuals request a principals and responsible individuals. (i) Annually to all institutions; hearing in the written request for an (6) Federal audit findings. FNS may (ii) To an institution and to each administrative review. If the assert a claim against the State agency, responsible principal and responsible institution’s representative, or the in accordance with the procedures set individual when the State agency takes responsible principals or responsible forth in § 226.14(c), when an any action subject to an administrative individuals or their representative, fail administrative review results in the review as described in paragraph (k)(2) to appear at a scheduled hearing, they dismissal of a claim against an of this section; and waive the right to a personal appearance institution asserted by the State agency (iii) Any other time upon request. before the administrative review official, based upon Federal audit findings. (5) Procedures. Except as described in unless the administrative review official (7) Record of result of administrative paragraph (k)(9) of this section, which agrees to reschedule the hearing. A reviews. The State agency must sets forth the circumstances under representative of the State agency must maintain searchable records of all which an abbreviated administrative be allowed to attend the hearing to administrative reviews and their review is held, the State agency must respond to the testimony of the disposition. follow the procedures in this paragraph institution and the responsible (8) Combined administrative reviews (k)(5) when an institution or a principals and responsible individuals for responsible principals and responsible principal or responsible and to answer questions posed by the responsible individuals. The State individual appeals any action subject to administrative review official. If a agency must conduct the administrative administrative review as described in hearing is requested, the institution, the review of the proposed disqualification paragraph (k)(2) of this section. responsible principals and responsible of the responsible principals and (i) Notice of action. The institution’s individuals, and the State agency must responsible individuals as part of the executive director and chairman of the be provided with at least 10 days administrative review of the application board of directors, and the responsible advance notice of the time and place of denial, proposed termination, and/or principals and responsible individuals, the hearing. proposed disqualification of the must be given notice of the action being (vii) Administrative review official. institution with which the responsible taken or proposed, the basis for the The administrative review official must principals or responsible individuals are action, and the procedures under which be independent and impartial. This associated. However, at the the institution and the responsible means that, although the administrative administrative review official’s principals or responsible individuals review official may be an employee of discretion, separate administrative may request an administrative review of the State agency, he/she must not have reviews may be held if the institution the action. been involved in the action that is the does not request an administrative (ii) Time to request administrative subject of the administrative review, or review or if either the institution or the review. The request for administrative have a direct personal or financial responsible principal or responsible review must be submitted in writing not interest in the outcome of the individual demonstrates that their later than 15 days after the date the administrative review. The institution interests conflict. notice of action is received, and the and the responsible principals and (9) Abbreviated administrative review. State agency must acknowledge the responsible individuals must be The State agency must limit the receipt of the request for an permitted to contact the administrative administrative review to a review of administrative review within 10 days of review official directly if they so desire. written submissions concerning the its receipt of the request. (viii) Basis for decision. The accuracy of the State agency’s (iii) Representation. The institution administrative review official must determination if the application was and the responsible principals and make a determination based solely on denied or the State agency proposes to responsible individuals may retain legal the information provided by the State terminate the institution’s agreement counsel, or may be represented by agency, the institution, and the because: another person. responsible principals and responsible (i) The information submitted on the (iv) Review of record. Any individuals, and based on Federal and application was false (see paragraphs information on which the State agency’s State laws, regulations, policies, and (c)(1)(ii)(A), (c)(2)(ii)(A), and (c)(3)(ii)(A) action was based must be available to procedures governing the Program. of this section); the institution and the responsible (ix) Time for issuing a decision. (ii) The institution, one of its principals and responsible individuals Within 60 days of the State agency’s sponsored facilities, or one of the for inspection from the date of receipt receipt of the request for an principals of the institution or its of the request for an administrative administrative review, the facilities is on the national disqualified review. administrative review official must list (see paragraph (b)(12) of this (v) Opposition. The institution and inform the State agency, the institution’s section); the responsible principals and executive director and chairman of the (iii) The institution, one of its responsible individuals may refute the board of directors, and the responsible sponsored facilities, or one of the findings contained in the notice of principals and responsible individuals, principals of the institution or its action in person or by submitting of the administrative review’s outcome. facilities is ineligible to participate in written documentation to the This timeframe is an administrative any other publicly funded program by administrative review official. In order requirement for the State agency and reason of violation of the requirements
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of the program (see paragraph (b)(13) State agency or the sponsoring on Federal and State laws, regulations, and (c)(3)(ii)(S) of this section); or organization must develop procedures polices, and procedures governing the (iv) The institution, one of its for offering and providing these Program. sponsored facilities, or one of the administrative reviews, and these (vi) Time for issuing a decision. The principals of the institution or its procedures must be consistent with this administrative review official must facilities has been convicted for any paragraph (l). inform the sponsoring organization and activity that indicates a lack of business (2) Actions subject to administrative the day care home of the administrative integrity (see paragraphs (b)(14) and review. The State agency or sponsoring review’s outcome within the period of (c)(3)(ii)(T) of this section). organization must offer an time specified in the State agency’s or (10) Effect of State agency action. The administrative review to a day care sponsoring organization’s State agency’s action must remain in home that appeals a notice of intent to administrative review procedures. This effect during the administrative review. terminate their agreement for cause or a timeframe is an administrative The effect of this requirement on suspension of their participation (see requirement for the State agency or particular State agency actions is as §§ 226.16(l)(3)(iii) and (l)(4)(ii)). sponsoring organization and may not be follows. (3) Actions not subject to used as a basis for overturning the (i) Overpayment demand. During the administrative review. Neither the State termination if a decision is not made period of the administrative review, the agency nor the sponsoring organization within the specified timeframe. State agency is prohibited from taking is required to offer an administrative (vii) Final decision. The action to collect or offset the review for reasons other than those determination made by the overpayment. However, the State agency listed in paragraph (l)(2) of this section. administrative review official is the must assess interest beginning with the (4) Provision of administrative review final administrative determination to be initial demand for remittance of the procedures to day care homes. The afforded the day care home. overpayment and continuing through administrative review procedures must (m) Program assistance. the period of administrative review be provided: (1) General. The State agency must unless the administrative review official (i) Annually to all day care homes; provide technical and supervisory overturns the State agency’s action. (ii) To a day care home when the assistance to institutions and facilities (ii) Recovery of advances. During the sponsoring organization takes any to facilitate effective Program administrative review, the State agency action subject to an administrative operations, monitor progress toward must continue its efforts to recover review as described in paragraph (l)(2) achieving Program goals, and ensure advances in excess of the claim for of this section; and compliance with all requirements of reimbursement for the applicable (iii) Any other time upon request. title VI of the Civil Rights Act of 1964, period. The recovery may be through a (5) Procedures. The State agency or title IX of the Education amendments of demand for full repayment or an sponsoring organization, as applicable 1972, Section 504 of the Rehabilitation adjustment of subsequent payments. (depending on the State agency’s Act of 1973, the Age Discrimination Act (iii) Program payments. The election pursuant to paragraph (l)(1) of of 1975, and the Department’s availability of Program payments during this section) must follow the procedures regulations concerning an administrative review of the denial of in this paragraph (l)(5) when a day care nondiscrimination (7 CFR Parts 15, 15a, a new institution’s application, denial of home requests an administrative review and 15b). The State agency must a renewing institution’s application, of any action described in paragraph maintain documentation of supervisory proposed termination of a participating (l)(2) of this section. assistance activities, including reviews institution’s agreement, and suspension (i) Uniformity. The same procedures conducted, corrective actions of an institution are addressed in must apply to all day care homes. prescribed, and follow-up efforts. paragraphs (c)(1)(iii)(D), (c)(2)(iii)(D), (ii) Representation. The day care (2) Review priorities. In choosing (c)(3)(iii)(D), (c)(5)(i)(D), and (c)(5)(ii)(E), home may retain legal counsel, or may institutions for review, in accordance respectively, of this section. be represented by another person. with paragraph (m)(4) of this section, (l) Administrative reviews for day care (iii) Review of record and opposition. the State agency must target for more homes. The day care home may review the frequent review institutions whose prior (1) General. The State agency must record on which the decision was based review included a finding of serious ensure that, when a sponsoring and refute the action in writing. The deficiency. organization proposes to terminate its administrative review official is not (3) Review content. Reviews must: Program agreement with a day care required to hold a hearing. (i) Assess institutional compliance home for cause, the day care home is (iv) Administrative review official. with the provisions of this part and with provided an opportunity for an The administrative review official must any applicable instructions of FNS and administrative review of the proposed be independent and impartial. This the Department; termination. The State agency may do means that, although the administrative (ii) Evaluate the documentation used this either by electing to offer a State- review official may be an employee of by sponsoring organizations to classify level administrative review, or by the State agency or an employee or their day care homes as tier I day care electing to require the sponsoring board member of the sponsoring homes; and organization to offer an administrative organization, he/she must not have been (iii) Evaluate sponsoring review. The State agency must notify involved in the action that is the subject organizations’ implementation of the appropriate FNSRO of its election of the administrative review or have a serious deficiency and termination under this option, or any change it later direct personal or financial interest in procedures and, if delegated to makes under this option, by September the outcome of the administrative sponsoring organizations pursuant to 25, 2002 or within 30 days of any review; paragraph (l)(1) of this section, the subsequent change under this option. (v) Basis for decision. The administrative review procedures for The State agency must make the same administrative review official must day care homes. election with regard to who offers the make a determination based on the (4) Review frequency. The State administrative review to any day care information provided by the sponsoring agency must annually review 33.3 home in the Program in that State. The organization and the day care home and percent of all institutions. At least 15
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percent of the total number of facility the words ‘‘in § 226.6(k)’’ are added in State agency with its application all reviews required must be unannounced. their place. information required for its approval as The State agency must review 6. In § 226.12, paragraph (b)(2)(i) is set forth in §§ 226.6(b) and 226.6(f). institutions according to the following revised to read as follows: Such information must demonstrate that schedule: the institution has the administrative (i) Independent centers and § 226.12 Administrative payments to and financial capability to operate the sponsoring organizations of 1–100 sponsoring organizations for day care Program in accordance with this part facilities must be reviewed at least once homes. and with the performance standards set every three years. A review of a * * * * * forth at § 226.6 (b)(18). The State agency sponsoring organization must include (b) * * * must deny the application of any 10 percent of its facilities; (2) * * * institution that does not demonstrate in (ii) Sponsoring organizations with (i) Public status or tax exempt status its application that it is administratively more than 100 facilities must be under the Internal Revenue Code of and financially capable of operating the reviewed at least once every two years. 1986; Program in accordance with this part, These reviews must include reviews of * * * * * and may approve only those applicant 5 percent of the first 1,000 facilities and 7. In § 226.14, paragraph (a) is institutions that meet the performance 2.5 percent of the facilities in excess of amended by adding five new sentences standards. No institution may submit an 1,000; and after the second sentence to read as application if the institution or any of (iii) New institutions that are follows: its principals is on the National sponsoring organizations of five or more disqualified list, and no sponsoring facilities must be reviewed within the § 226.14 Claims against institutions. organization may submit an application first 90 days of Program operation. (a) * * * The State agency may on behalf of a facility if the facility or * * * * * permit institutions to pay overclaims any of its principals is on the National (p) * * * The State agency must also over a period of one or more years. disqualified list. At a minimum, such include in this agreement its policy to However, the State agency must assess information must include: restrict transfers of day care homes interest beginning with the initial * * * * * between sponsoring organizations. The demand for remittance. Further, when (7) A list of the publicly funded policy must restrict the transfers to no an institution requests and is granted an programs in which the institution and more frequently than once per year, administrative review of the State its principals have participated in the except under extenuating agency’s overpayment demand, the past seven years and a certification that, circumstances, such as termination of State agency is prohibited from taking during the preceding seven years, the sponsoring organization’s agreement action to collect or offset the neither the institution nor any of its or other circumstances defined by the overpayment until the administrative principals has been declared ineligible State agency. * * * review is concluded. The State agency to participate in any publicly funded * * * * * must maintain searchable records of program by reason of violating that 4. In § 226.7, paragraph (g) is funds recovery activities. If the State program’s requirements. Instead of such amended by adding two new sentences agency determines that a sponsoring a certification, the institution may after the second sentence to read as organization of centers has spent more submit documentation that the follows: than 15 percent of its meal institution or the principal previously reimbursements for a budget year for declared ineligible was later fully § 226.7 State agency responsibilities for administrative costs (or more than any reinstated in, or determined eligible for, financial management. higher limit established pursuant to a the program, including the payment of * * * * * waiver granted under § 226.6(f)(3)), the any debts owed; (g) * * * For sponsoring State agency must take appropriate (8) A statement certifying that neither organizations of centers, the State fiscal action. * * * the institution nor any of its principals agency is prohibited from approving the * * * * * has been convicted of any activity that sponsoring organization’s 8. In § 226.15: occurred during the past seven years administrative budget, or any a. Paragraph (a) is revised; and that indicated a lack of business amendments to the budget, if the b. The heading and introductory text integrity. A lack of business integrity administrative budget shows the of paragraph (b) are revised; includes fraud, antitrust violations, Program will be charged for c. The word ‘‘and’’ is removed at the embezzlement, theft, forgery, bribery, administrative costs in excess of 15 end of paragraph (b)(5), the period at the falsification or destruction of records, percent of the meal reimbursements end of paragraph (b)(6) is removed, and making false statements, receiving estimated to be earned during the a semicolon is added in its place; and stolen property, making false claims, budget year. However, the State agency b. New paragraphs (b)(7) through obstruction of justice, or any other may waive this limit if the sponsoring (b)(9) are added. activity indicating a lack of business organization provides justification that The revisions and additions specified integrity as defined by the State agency; it requires Program funds in excess of 15 above read as follows: and percent to pay its administrative costs (9) A statement certifying that all and if the State agency is convinced that § 226.15 Institution provisions. information on the application is true the institution will have adequate (a) Tax exempt status. Except for and correct, along with the name, funding to provide meals meeting the proprietary title XIX and title XX mailing address, and date of birth of the requirements of § 226.20. * * * centers, and sponsoring organizations of institution’s executive director and * * * * * such centers, institutions must be chairman of the board of directors. public, or have tax exempt status under * * * * * § 226.8 [Amended] the Internal Revenue Code of 1986. 9. In § 226.16: 5. In § 226.8(g), the words ‘‘in (b) New applications and renewals. a. The introductory text of paragraph § 226.6(j) of this part’’ are removed and Each institution must submit to the (b) is amended by adding a new
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sentence at the beginning of the Program may not exceed 15 percent of employment that constitutes a real or paragraph; the meal reimbursements estimated or apparent conflict of interest; and b. Paragraph (b)(1) is revised; actually earned during the budget year, (8) For sponsoring organizations of c. Paragraph (b)(2) is amended by unless the State agency grants a waiver day care homes, the name, mailing removing the word ‘‘and’’ at the end of in accordance with § 226.6(f)(3). A address, and date of birth of each the paragraph; sponsoring organization of centers must provider. d. Paragraph (b)(3) is amended by include in its administrative budget all * * * * * removing the period at the end of the administrative costs, whether incurred (d) Each sponsoring organization must paragraph and adding in its place a by the sponsoring organization or its provide adequate supervisory and semicolon; sponsored centers. If at any point a operational personnel for the effective e. New paragraphs (b)(4) through sponsoring organization determines that management and monitoring of the (b)(8) are added; the meal reimbursements estimated to program at all facilities it sponsors. Each f. The introductory text of paragraph be earned during the budget year will be sponsoring organization must employ (d) is revised; lower than that estimated in its monitoring staff sufficient to meet the g. Paragraph (d)(4) is revised; and administrative budget, the sponsoring requirements of paragraph (b)(1) of this h. A new paragraph (l) is added. organization must amend its section. At a minimum, Program The additions and revisions specified administrative budget to stay within the above read as follows: assistance must include: 15 percent limitation (or any higher * * * * * § 226.16 Sponsoring organization limit established pursuant to a waived (4) Reviews of food service operations provisions. granted under § 226.6(f)(3)) or seek a to assess compliance with meal pattern, * * * * * waiver. Failure to do so will result in recordkeeping, and other Program (b) A sponsoring organization is appropriate fiscal action in accordance requirements. prohibited from submitting an with § 226.14(a). (i) Reviews of sponsored centers. application on behalf of a facility if * * * * * Reviews must be made at least three either the facility or any of its principals (4) For sponsoring organizations times each year at each center. In is on the National disqualified list. applying for initial participation on or addition: *** after June 20, 2000, if required by State (A) At least two of the three reviews (1) A sponsoring organization law, regulation, or policy, a bond in the must be unannounced; management plan and administrative form prescribed by such law, regulation, (B) At least one unannounced review budget, in accordance with § 226.6(f)(2), or policy; must include observation of a meal which includes information sufficient to (5) A copy of the sponsoring service; document the sponsoring organization’s organization’s notice to parents, in a (C) At least one review must be made compliance with the performance form and, to the maximum extent during the center’s first six weeks of standards set forth at § 226.6(b)(18). As practicable, language easily Program operation; and part of its management plan, a understandable by the participant’s (D) Not more than six months may sponsoring organization of day care parents or guardians. The notice must elapse between reviews. homes must document that, to perform inform them of their facility’s (ii) Reviews of day care homes. monitoring, it will employ the participation in CACFP, the Program’s Reviews must be made at least three equivalent of one full-time staff person benefits, the name and telephone times each year at each day care home, for each 50 to 150 day care homes it number of the sponsoring organization, except as described at paragraph sponsors. As part of its monitoring plan, and the name and telephone number of (d)(4)(iii) of this section. In addition: a sponsoring organization of centers the State agency responsible for (A) At least two of the three reviews must document that, to perform administration of CACFP; must be unannounced; monitoring, it will employ the (B) At least one unannounced review equivalent of one full-time staff person (6) If the sponsoring organization must include observation of a meal for each 25 to 150 centers it sponsors. chooses to establish procedures for service; It is the State agency’s responsibility to determining a day care home seriously (C) At least one review must be made determine the appropriate level of deficient that supplement the during the day care home’s first four staffing for monitoring for each procedures in paragraph (l) of this weeks of Program operation; and sponsoring organization, consistent with section, a copy of those supplemental (D) Not more than six months may the specified ranges and the factors procedures. If the State agency has made elapse between reviews. established by the State agency in the sponsoring organization responsible (iii) Variation for sponsoring accordance with § 226.6(f)(2). The for the administrative review of a organizations of day care homes. If the monitoring staff equivalent may include proposed termination of a day care State agency believes that improved the employee’s time spent on home’s agreement for cause, pursuant to efficiency and more effective scheduling, travel time, review time, § 226.6(l)(1), a copy of the sponsoring management will result, and subject to follow-up activity, and report writing. organization’s administrative review FNSRO approval, the State agency may Sponsoring organizations that are procedures. The sponsoring allow a sponsoring organization to participating in the Program on July 29, organization’s supplemental serious conduct reviews an average of at least 2002 must submit a management plan or deficiency and administrative review three times each year per day care plan amendment that meets the procedures must comply with paragraph home, provided that: monitoring staffing requirement no later (l) of this section and § 226.6(l); (A) Each day care home receives at than July 29, 2003. For sponsoring (7) A copy of their outside least two unannounced reviews; organizations of centers, the portion of employment policy. The policy must (B) At least one review is made during the administrative costs to be charged to restrict other employment by employees each day care home’s first four weeks of the Program as shown on the that interferes with an employee’s Program operations; and administrative budget and the actual performance of Program-related duties (C) No more than six months elapse administrative costs charged to the and responsibilities, including outside between reviews;
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(iv) Follow-up reviews. If, in a review (vii) A determination that the day care notified that it is seriously deficient will of a facility, a sponsoring organization home has been convicted of any activity still result in the day care home’s formal detects one or more serious deficiency, that occurred during the past seven termination by the State institution and the next review of that facility must be years and that indicated a lack of placement of the day care home and its unannounced. Serious deficiencies are business integrity. A lack of business principals on the National disqualified those set forth at paragraph (l)(2) of this integrity includes fraud, antitrust list. section, regardless of the type of violations, embezzlement, theft, forgery, (ii) Successful corrective action. If the sponsored facility. bribery, falsification or destruction of day care home corrects the serious (v) Notification. Sponsoring records, making false statements, deficiency(ies) within the allotted time organizations must provide each receiving stolen property, making false and to the sponsoring organization’s sponsored center written notification of claims, obstruction of justice, or any satisfaction, the sponsoring organization the right of the sponsoring organization, other activity indicating a lack of must notify the day care home that it the State agency, the Department, and business integrity as defined by the has rescinded its determination of other State and Federal officials to make State agency, or the concealment of such serious deficiency. The sponsoring announced or unannounced reviews of a conviction; or organization must also provide a copy of their operations during the center’s (viii) Any other circumstance related the notice to the State agency. normal hours of child or adult care to non-performance under the (iii) Proposed termination of operations, and must also notify sponsoring organization-day care home agreement and proposed sponsored centers that anyone making agreement, as specified by the disqualification. If timely corrective such reviews must show photo sponsoring organization or the State action is not taken to fully and identification that demonstrates that agency. permanently correct the serious they are employees of one of these (3) Serious deficiency notification deficiency(ies) cited, the sponsoring entities. For sponsored centers procedures. If the sponsoring organization must issue a notice participating July 29, 2002, the organization determines that a day care proposing to terminate the day care sponsoring organization must provide home has committed one or more home’s agreement for cause. The notice this notice sent no later than August 29, serious deficiency listed in paragraph must explain the day care home’s 2002. For sponsored centers that are (l)(2) of this section, the sponsoring opportunity for an administrative approved after July 29, 2002, the organization must use the following review of the proposed termination in sponsoring organization must provide procedures to provide the day care accordance with § 226.6(l). The the notice before meal service under the home notice of the serious sponsoring organization must provide a Program begins. Sponsoring deficiency(ies) and offer it an copy of the notice to the State agency. organizations must provide day care opportunity to take corrective action. The notice must: homes notification of unannounced However, if the serious deficiency(ies) (A) Inform the day care home that it visits in accordance with § 226.18(b)(1). constitutes an imminent threat to the may continue to participate and receive (vi) Other requirements pertaining to health or safety of participants, or the Program reimbursement for eligible unannounced reviews. Unannounced day care home has engaged in activities meals served until its administrative reviews must be made only during the that threaten the public health or safety, review is concluded; facility’s normal hours of child or adult the sponsoring organization must follow (B) Inform the day care home that care operations, and monitors making the procedures in paragraph (l)(4) of this termination of the day care home’s such reviews must show photo section instead of those in this agreement will result in the day care identification that demonstrates that paragraph (l)(3). home’s termination for cause and they are employees of the sponsoring (i) Notice of serious deficiency. The disqualification; and organization. sponsoring organization must notify the (C) State that if the day care home seeks to voluntarily terminate its * * * * * day care home that it has been found to (l) Termination of agreements for be seriously deficient. The sponsoring agreement after receiving the notice of cause. (1) General. The sponsoring organization must provide a copy of the intent to terminate, the day care home organization must initiate action to serious deficiency notice to the State will still be placed on the National terminate the agreement of a day care agency. The notice must specify: disqualified list. (iv) Program payments. The home for cause if the sponsoring (A) The serious deficiency(ies); sponsoring organization must continue organization determines the day care (B) The actions to be taken by the day to pay any claims for reimbursement for home has committed one or more care home to correct the serious eligible meals served until the serious serious deficiency listed in paragraph deficiency(ies); deficiency(ies) is corrected or the day (l)(2) of this section. (C) The time allotted to correct the (2) List of serious deficiencies for day serious deficiency(ies) (as soon as care home’s agreement is terminated, care homes. Serious deficiencies for day possible, but not to exceed 30 days); including the period of any care homes are: (D) That the serious deficiency administrative review. (i) Submission of false information on determination is not subject to (v) Agreement termination and the application; administrative review. disqualification. The sponsoring (ii) Submission of false claims for (E) That failure to fully and organization must immediately reimbursement; permanently correct the serious terminate the day care home’s (iii) Simultaneous participation under deficiency(ies) within the allotted time agreement and disqualify the day care more than one sponsoring organization; will result in the institution’s proposed home when the administrative review (iv) Non-compliance with the Program termination of the day care home’s official upholds the sponsoring meal pattern; agreement and the proposed organization’s proposed termination and (v) Failure to keep required records; disqualification of the day care home proposed disqualification, or when the (vi) Conduct or conditions that and its principals; and day care home’s opportunity to request threaten the health or safety of a (F) That the day care home’s an administrative review expires. At the child(ren) in care, or the public health voluntary termination of its agreement same time the notice is issued, the or safety; with the institution after having been sponsoring organization must provide a
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copy of the termination and (E) State that if the day care home Department, and other State and Federal disqualification letter to the State seeks to voluntarily terminate its officials to make announced or agency. agreement after receiving the notice of unannounced reviews of the day care (4) Suspension of participation for proposed termination, the day care home’s operations and to have access to day care homes. home will still be terminated for cause its meal service and records during its (i) General. If State or local health or and disqualified. normal hours of child care operations. licensing officials have cited a day care (iii) Agreement termination and For day care homes participating July home for serious health or safety disqualification. The sponsoring 29, 2002, the sponsoring organization violations, the sponsoring organization organization must immediately must amend the current agreement no must immediately suspend the home’s terminate the day care home’s later than August 29, 2002; CACFP participation prior to any formal agreement and disqualify the day care * * * * * action to revoke the home’s licensure or home when the administrative review (13) The State agency’s policy to approval. If the sponsoring organization official upholds the sponsoring restrict transfers of day care homes determines that there is an imminent organization’s proposed termination, or between sponsoring organizations; threat to the health or safety of when the day care home’s opportunity (14) The responsibility of the day care participants at a day care home, or that to request an administrative review home to notify their sponsoring the day care home has engaged in expires. organization in advance whenever they activities that threaten the public health (iv) Program payments. A sponsoring are planning to be out of their home or safety, and the licensing agency organization is prohibited from making during the meal service period. The cannot make an immediate onsite visit, any Program payments to a day care agreement must also state that, if this the sponsoring organization must home that has been suspended until any procedure is not followed and an immediately notify the appropriate State administrative review of the proposed unannounced review is conducted or local licensing and health authorities termination is completed. If the when the children are not present in the and take action that is consistent with suspended day care home prevails in day care home, claims for meals that the recommendations and requirements the administrative review of the would have been served during the of those authorities. An imminent threat proposed termination, the sponsoring unannounced review will be to the health or safety of participants organization must reimburse the day disallowed; and engaging in activities that threaten care home for eligible meals served (15) The day care home’s opportunity the public health or safety constitute during the suspension period. to request an administrative review if a serious deficiencies; however, the 10. In § 226.17: sponsoring organization issues a notice sponsoring organization must use the a. Paragraph (b)(2) is amended by of proposed termination of the day care procedures in this paragraph (l)(4) (and removing the comma and all text that home’s Program agreement, or if a not the procedures in paragraph (l)(3) of follows the words ‘‘the Internal Revenue sponsoring organization suspends this section) to provide the day care Code of 1986’’ and adding a period in participation due to health and safety home notice of the suspension of its place; and concerns, in accordance with participation, serious deficiency, and b. A new paragraph (d) is added. § 226.6(1)(2); and proposed termination of the day care The addition above reads as follows: (16) If so instructed by its sponsoring home’s agreement. § 226.17 Child care center provisions. organization, the day care home’s (ii) Notice of suspension, serious responsibility to distribute to parents a deficiency, and proposed termination. * * * * * (d) If so instructed by its sponsoring copy of the sponsoring organization’s The sponsoring organization must notify notice to parents. the day care home that its participation organization, a sponsored center must * * * * * has been suspended, that the day care distribute to parents a copy of the sponsoring organization’s notice to home has been determined seriously § 226.19 [Amended] parents. deficient, and that the sponsoring 12. In § 226.19, paragraph (b)(2) is organization proposes to terminate the 11. In § 226.18: a. A new sentence is added to the amended by removing the comma and day care home’s agreement for cause, all text that follows the words ‘‘the and must provide a copy of the notice introductory text of paragraph (b) after the third sentence; Internal Revenue Code of 1986’’ and to the State agency. The notice must: adding a period in its place. (A) Specify the serious deficiency(ies) b. Paragraph (b)(1) is revised; c. Remove the word ‘‘and’’ at the end found and the day care home’s of paragraph (b)(8); § 226.19a [Amended] opportunity for an administrative d. Remove the period at the end of 13. In § 226.19a, paragraph (b)(4) is review of the proposed termination in paragraphs (b)(9), (b)(10), (b)(11), and amended by removing the comma and accordance with § 226.6(l); (b)(12) and add a semicolon in its place; all text that follows the words ‘‘the (B) State that participation (including and Internal Revenue Code of 1986’’ and all Program payments) will remain e. New paragraphs (b)(13), (b)(14), adding a period in its place. suspended until the administrative (b)(15), and (b)(16) are added. review is concluded; The revision and additions specified § 226.23 [Amended] (C) Inform the day care home that if above read as follows: 14. In § 226.23: the administrative review official a. The introductory text of paragraph overturns the suspension, the day care § 226.18 Day care home provisions. (h) is amended by removing the word home may claim reimbursement for * * * * * ‘‘four’’ in the second sentence and eligible meals served during the (b) * * * The agreement must be adding in its place the word ‘‘three’’, suspension; signed by the sponsoring organization and by removing the reference (D) Inform the day care home that and the provider and must include the ‘‘226.6(l)’’ and adding the reference termination of the day care home’s provider’s full name, mailing address, ‘‘226.6(m)’’ in their place. agreement will result in the placement and date of birth. * * * b. Paragraph (h)(1) is amended by of the day care home on the National (1) The right of the sponsoring removing the words ‘‘section 226.6(l) of disqualified list; and organization, the State agency, the this Part’’ in the second sentence and
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adding the words ‘‘§ 226.6(m)’’ in their Dated: June 7, 2002. place. Eric M. Bost, Under Secretary for Food, Nutrition, and Consumer Services. [FR Doc. 02–15776 Filed 6–26–02; 8:45 am] BILLING CODE 3410–30–P
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Part IV
Department of the Treasury Bureau of Alcohol, Tobacco, and Firearms
27 CFR Part 7 Labeling and Advertising of Malt Beverages (2000R–107P); Proposed Rule
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DEPARTMENT OF THE TREASURY SUPPLEMENTARY INFORMATION: Background Bureau of Alcohol, Tobacco and Public Participation—Submission of This is a plain language revision of 27 Firearms Comments CFR part 7, Labeling and Advertising of Malt Beverages. We issued the original We request comments from all 27 CFR Part 7 requirements in part 7 after an interested persons. We will carefully opportunity for notice and comment in [Notice No. 946] consider all comments we receive on or the rulemaking process. Since we are before August 26, 2002. We will give the RIN 1512–AC10 making only stylistic changes and minor same consideration to comments we technical amendments, we are limiting Labeling and Advertising of Malt receive after that date if it is practical to comments to the plain language issue in Beverages (2000R–107P) do so, but we give assurance of this proposed rule. As this revision consideration only to comments we adopts the plain language style, there is AGENCY: Bureau of Alcohol, Tobacco receive on or before the closing date. no change in the intent or effect of the and Firearms (ATF), Treasury. Because we intend that this regulations from the existing part 7. ACTION: Notice of proposed rulemaking. rulemaking revise only the style of There are no changes to the authority, language, and not the effect of the scope, or effect of the regulations. The SUMMARY: This proposed rule revises the regulations, we solicit comments on that regulations regarding the labeling and authority for these requirements basis only. Accordingly, comments remains 27 U.S.C. 205. advertising of malt beverages in should be limited to the following accordance with plain language questions: Does this language have the Discussion principles. These changes also same effect as the old regulations? Does incorporate minor technical What Is ATF Doing About the Interim the plain language format effect the Regulation on Alcohol Content? amendments. There are no changes in operation of the regulations? Is this new requirements from the existing style helpful or useful? We will not This revision combines the existing regulations. The Bureau of Alcohol, consider in this rulemaking any sections that concern alcohol content. Tobacco and Firearms (ATF) is making comments that go beyond this scope. We omit the old § 7.26, a section we this change in order to more clearly suspended on April 19, 1993, in T.D. communicate the existing requirements. Will ATF Treat My Comments as ATF–339. Instead, we simply state the Because we are amending these Confidential? current ‘‘interim’’ requirements found at regulations to conform to the plain No. We will not recognize any § 7.71. The plain language requirements language style, we are limiting material in comments as confidential. are in new §§ 7.100 through 7.108. comments to the effects of this change Your comments may be disclosed to the in the regulations’ language. While we Why Is ATF Issuing Part 7 in Plain public. You should not include any Language? welcome comments on any aspect of material that you consider to be these regulations, we will consider in confidential or inappropriate for public We intend for this revision to provide this rulemaking only those comments disclosure. We may disclose the name of greater clarity to part 7. It is one of the that bear on the change in language. any person submitting a comment. first revisions of our regulations to DATES: We must receive your written adopt the plain language style. As one comments not later than August 26, May I Submit a Comment by Facsimile of the smaller parts in title 27, it is one 2002. Transmission? that is more easily revised. This change ADDRESSES: You must send written Yes. You may submit comments by gives us a plain language version to comments to: Chief, Regulations facsimile transmission to (202) 927– serve as a model for future revisions. Division, Notice No. 946, Bureau of 8602. Facsimile comments must meet How Does This Revision Change Part 7? Alcohol, Tobacco and Firearms, P.O. these guidelines. They must: There are no changes to the current Box 50221, Washington, DC 20091– 1. Be legible when printed on 81⁄2 x requirements. There are no additions or 0221. 11″ paper; See also the heading entitled ‘‘Public deletions from regulatory provisions. 2. Contain the notice number and a However, we are amending part 7 in Participation—Submission of written signature; and Comments’’ in the SUPPLEMENTARY several ways. 3. Be three pages or less in length. INFORMATION portion of this notice for We are expanding section headings, information about submitting comments We will not accept FAX comments moving material from subordinate by FAX or by electronic mail. longer than three pages. We will not sections to main section numbers, Anyone may examine copies of acknowledge receipt of FAX reorganizing for easier reading, and written comments to this notice of transmittals. We will treat facsimile simplifying language. proposed rulemaking, including comments as originals. We are combining identical comments submitted by FAX or by May I Submit Comments by Electronic requirements for labeling and electronic mail. Comments will be Mail? advertising. We had previously listed available for public inspection during nearly identical requirements for normal business hours at: ATF Reading Yes. You may submit comments by labeling and advertisement in separate Room, Room 6480, 650 Massachusetts electronic mail to subparts. We are now combining similar Avenue NW., Washington, DC 20226; [email protected] or through the requirements that apply to both labeling telephone 202–927–7890. ATF home page at http:// and advertising. Where requirements FOR FURTHER INFORMATION CONTACT: You www.atf.treas.gov. Electronic mail differ, we make those distinctions in may contact Charles N. Bacon, Program comments must include: separate sections. Manager, Bureau of Alcohol, Tobacco 1. A reference to this document’s ATF We are stating requirements in a more and Firearms, 10 Causeway Street, notice number; logical, clearly identified order. Room 701, Boston, MA 02222; 2. Your e-mail address; and 1. New subpart C lists requirements telephone 617–557–1323. 3. Your name and post office address. for labeling malt beverages.
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2. New subpart D lists requirements CROSS REFERENCE TABLE—PREVIOUS CROSS REFERENCE TABLE—PREVIOUS for advertising malt beverages. PART 7 SECTIONS TO REVISED SEC- PART 7 SECTIONS TO REVISED SEC- 3. New subpart E lists prohibited TIONS—Continued TIONS—Continued practices for labeling and advertising of malt beverages. Previous section Revised section Previous section Revised section
To What Extent Does This Regulation 7.21 ...... 7.60 7.40 ...... 7.3 Apply? 7.21(a) ...... 7.61 7.41(a) ...... 7.20 These regulations apply to the 7.21(b) ...... 7.62 7.41(a) ...... 7.22 labeling and advertising of malt 7.21(c) ...... 7.63 7.41(b) ...... 7.26 beverages to the extent that State law 7.22(a) ...... 7.40 7.42 ...... 7.23 7.22(a)(3) ...... 7.80 7.50 ...... 7.3 applies to these issues. Some States 7.22(b)(1) ...... 7.41 7.50 ...... 7.200 have adopted the Federal Alcohol 7.22(b)(2) ...... 7.42 7.50 ...... 7.201 Administration Act (FAA) requirements. 7.22(b)(3) ...... 7.43 7.51 ...... 7.11 Other States have different 7.22(b)(4) ...... 7.44 7.51 ...... 7.12 requirements, including: 7.22(b)(5) ...... 7.45 7.51(a) ...... 7.13 Specific State alcohol beverage 7.22(b)(6) ...... 7.46 7.51(b) ...... 7.14 regulations, 7.22(b)(7) ...... 7.47 7.52 ...... 7.210 7.23(a) ...... 7.50 7.52(a) ...... 7.211 General incorporation of the Federal 7.23(b) ...... 7.51 rules as State rules, or 7.52(b) ...... 7.212 7.23(b) ...... 7.52 7.52(c) ...... 7.213 Other requirements, such as 7.23(c) ...... 7.53 7.53(a) ...... 7.220 regulation of alcohol beverages as food. 7.24(a) ...... 7.70 7.53(b) ...... 7.221 If your State requires that you label 7.24(b) ...... 7.71 7.53(c) ...... 7.222 your malt beverages, whether through a 7.24(c) ...... 7.72 7.53(d) ...... 7.223 malt beverage-specific law, or through a 7.24(d) ...... 7.73 7.53(e) ...... 7.224 more general law, such as a requirement 7.24(e) ...... 7.74 7.54 ...... 7.300 to label as a food product, then these 7.24(f) ...... 7.75 7.54(a)(1) ...... 7.301 7.24(f) ...... 7.77 7.54(a)(2) ...... 7.302 labeling regulations apply to you. 7.24(f) ...... 7.78 Likewise, if your State consumer 7.54(a)(3) ...... 7.303 7.24(g) ...... 7.76 7.54(a)(4) ...... 7.304 protection or unfair merchandise 7.24(h) ...... 7.79 7.54(a)(5) ...... 7.305 practices impose similar requirements 7.25(a)(1) ...... 7.81 7.54(a)(5) ...... 7.306 on advertising malt beverages, then 7.25(a)(2) ...... 7.82 7.54(a)(6) ...... 7.307 these advertising regulations apply to 7.25(b) ...... 7.83 7.54(a)(6) ...... 7.308 you. 7.25(c) ...... 7.84 7.54(a)(7) ...... 7.309 7.26 ...... Omitted 7.54(b)(1) ...... 7.330 Is My Internet Advertisement Covered 7.27 ...... 7.90 7.54(b)(2) ...... 7.331 by These Regulations? 7.27(a) ...... 7.91 7.54(c)(1) ...... 7.313 7.27(b) ...... 7.91 7.54(c)(1) ...... 7.314 Yes. If you are subject to part 7, your 7.27(c) ...... 7.90 Internet advertisement is subject to 7.54(c)(2) ...... 7.332 7.28(a) ...... 7.31 7.54(c)(3) ...... 7.333 these rules. The old part 7 makes it clear 7.28(b)(1) ...... 7.33 7.54(d)(1) ...... 7.334 that any medium is covered. When 7.28(b)(2) ...... 7.33 7.54(d)(2) ...... 7.335 these regulations were first issued in 7.28(b)(1) ...... 7.32 7.54(e) ...... 7.312 1936, the Internet did not exist. This 7.28(c) ...... 7.34 7.54(f) ...... 7.336 revision of part 7 makes it clear that the 7.28(c) ...... 7.35 7.54(g) ...... 7.310 7.28(c) ...... 7.36 Internet is a covered medium. 7.54(g) ...... 7.311 7.28(d) ...... 7.37 7.54(h) ...... 7.337 How Can I Find a New Section From an 7.28(e) ...... 7.38 7.55(a) ...... 7.340 ‘‘Old’’ Section in the Revised Part 7? 7.29(a) ...... 7.300 7.55(b)(1) ...... 7.350 7.29(a)(1) ...... 7.301 7.55(b)(2) ...... 7.351 This chart is a cross-reference 7.29(a)(2) ...... 7.302 7.55(b)(3) ...... 7.353 7.29(a)(3) ...... 7.303 between the previous section numbers 7.60 ...... 7.9 7.29(a)(4) ...... 7.304 and the new section numbers: 7.71(a) ...... 7.100 7.29(a)(5) ...... 7.305 7.71(b)(1) ...... 7.101 7.29(a)(5) ...... 7.306 CROSS REFERENCE TABLE—PREVIOUS 7.71(b)(2) ...... 7.102 7.29(a)(6) ...... 7.320 7.71(b)(3) ...... 7.102 PART 7 SECTIONS TO REVISED SEC- 7.29(a)(6) ...... 7.321 7.71(c)(1) ...... 7.103 TIONS 7.29(b) ...... 7.307 7.71(c)(2) ...... 7.104 7.29(b) ...... 7.308 7.71(c)(3) ...... 7.103 Previous section Revised section 7.29(c) ...... 7.309 7.29(d) ...... 7.310 7.71(c)(3) ...... 7.105 7.1 ...... 7.1 7.29(d) ...... 7.311 7.71(d) ...... 7.106 7.2 ...... 7.2 7.29(e) ...... 7.312 7.71(e) ...... 7.107 7.3 ...... 7.15 7.29(f) ...... 7.313 7.71(f) ...... 7.108 7.3(a) ...... 7.4 7.29(f) ...... 7.314 7.3(b) ...... 7.5 7.29(g) ...... 7.322 How Can I Find an ‘‘Old’’ Section From 7.4 ...... 7.6 7.29(h) ...... 7.323 the New Section in the Revised Part 7? 7.10 ...... 7.10 7.30 ...... 7.3 7.20(a) ...... 7.3 7.31(a) ...... 7.20 This chart shows the derivation of the 7.20(b) ...... 7.8, 7.30 7.31(a) ...... 7.21 new language from the old. It is a cross- 7.20(c)(1) ...... 7.110 7.31(b) ...... 7.24 reference between the revised section 7.20(c)(1) ...... 7.111 7.31(c) ...... 7.25 numbers and the previous section 7.20(c)(2) ...... 7.112 7.31(d) ...... 7.26 numbers.
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DERIVATION REFERENCE TABLE—RE- DERIVATION REFERENCE TABLE—RE- ATF officer who is responsible for VISED PART 7 SECTIONS TO PRE- VISED PART 7 SECTIONS TO PRE- certain actions. These changes VIOUS SECTIONS VIOUS SECTIONS—Continued incorporate references to the ‘‘appropriate ATF officer’’ and to ATF Revised section Previous section Revised section Previous section delegation orders. These changes are necessary to more effectively administer Omitted ...... 7.26 7.84 ...... 7.25(c) these rules with the continued prospect 7.1 ...... 7.1 7.90 ...... 7.27, 7.27(c) 7.2 ...... 7.2 7.91 ...... 7.27(a), 7.27(b) of organizational changes. We have 7.3 ...... 7.20(a), 7.30, 7.40, 7.50 7.100 ...... 7.71(a) frequently found that our regulatory 7.4 ...... 7.3(a) 7.101 ...... 7.71(b)(1) requirements do not match our 7.5 ...... 7.3(b) 7.102 ...... 7.71(b)(2), 7.71(b)(3) organizational alignment. Sometimes we 7.6 ...... 7.4 7.103 ...... 7.71(c)(1), 7.71(c)(3) have made several reorganizational 7.7 ...... Part 7 references to prior 7.104 ...... 7.71(c)(2) rulemaking decisions. 7.105 ...... 7.71(c)(3) changes before the regulations are 7.8 ...... 7.20(b) 7.106 ...... 7.71(d) changed to reflect the current 7.9 ...... 7.60 7.107 ...... 7.71(e) responsibilities. In the case of these 7.10 ...... 7.10 7.108 ...... 7.71(f) regulations, there are named ATF 7.11 ...... 7.51 7.110 ...... 7.20(c)(1) officials whose titles are more than 10 7.12 ...... 7.51 7.111 ...... 7.20(c)(1) years outdated. It is not unusual for the 7.13 ...... 7.51(a) 7.112 ...... 7.20(c)(2) 7.14 ...... 7.51(b) 7.200 ...... 7.50 rules to require actions by officers 7.15 ...... 7.3 7.201 ...... 7.50 whose title or function has changed 7.20 ...... 7.31(a), 7.41(a) 7.210 ...... 7.52 several times. By amending the rules to 7.21 ...... 7.31(a) 7.211 ...... 7.52(a) cite ‘‘appropriate ATF officer’’ we can 7.22 ...... 7.41(a) 7.212 ...... 7.52(b) then make the necessary changes more 7.23 ...... 7.42 7.213 ...... 7.52(c) 7.24 ...... 7.31(b) 7.220 ...... 7.53(a) easily in an ATF delegation order that 7.25 ...... 7.31(c) 7.221 ...... 7.53(b) we make available through our 7.26 ...... 7.31(d), 7.41(b) 7.222 ...... 7.53(c) Distribution Center and publish on our 7.30 ...... 7.30 7.223 ...... 7.53(d) Internet website. This ATF order 7.31 ...... 7.28(a) 7.224 ...... 7.53(e) delegates specific responsibilities to the 7.32 ...... 7.28(b)(1) 7.300 ...... 7.29(a), 7.54 ‘‘appropriate’’ ATF officer. We express 7.33 ...... 7.28(b)(1), 7.28(b)(2) 7.301 ...... 7.29(a)(1), 7.54(a)(1) 7.34 ...... 7.28(c) 7.302 ...... 7.29(a)(2), 7.54(a)(2) these requirements in a new § 7.15. 7.35 ...... 7.28(c) 7.303 ...... 7.29(a)(3), 7.54(a)(3) What Changes Is ATF Making for Cross- 7.36 ...... 7.28(c) 7.304 ...... 7.29(a)(4), 7.54(a)(4) 7.37 ...... 7.28(d) 7.305 ...... 7.29(a)(5), 7.54(a)(5) References to Previous Rulemaking 7.38 ...... 7.28(e) 7.306 ...... 7.29(a)(5), 7.54(a)(5) Decisions? 7.40 ...... 7.22(a) 7.307 ...... 7.29(b), 7.54(a)(6) 7.41 ...... 7.22(b)(1) 7.308 ...... 7.29(b), 7.54(a)(6) We are moving cross-references for 7.42 ...... 7.22(b)(2) 7.309 ...... 7.29(c), 7.54(a)(7) previous Treasury Decisions to a new 7.43 ...... 7.22(b)(3) 7.310 ...... 7.29(d), 7.54(g) § 7.7. This cross-reference facilitates 7.44 ...... 7.22(b)(4) 7.311 ...... 7.29(d), 7.54(g) future updates of this important 7.45 ...... 7.22(b)(5) 7.312 ...... 7.29(e), 7.54(e) research tool for those who need this 7.46 ...... 7.22(b)(6) 7.313 ...... 7.29(f), 7.54(c)(1) information. 7.47 ...... 7.22(b)(7) 7.314 ...... 7.29(f), 7.54(c)(1) 7.50 ...... 7.23(a) 7.320 ...... 7.29(a)(6) Paperwork Reduction Act 7.51 ...... 7.23(b) 7.321 ...... 7.29(a)(6) 7.52 ...... 7.23(b) 7.322 ...... 7.29(g) The provisions of the Paperwork 7.53 ...... 7.23(c) 7.323 ...... 7.29(h) Reduction Act of 1995, Public Law 104– 7.330 ...... 7.54(b)(1) 7.60 ...... 7.21 13, 44 U.S.C. chapter 35, and its 7.61 ...... 7.21(a) 7.331 ...... 7.54(b)(2) 7.62 ...... 7.21(b) 7.332 ...... 7.54(c)(2) implementing regulations, 5 CFR part 7.63 ...... 7.21(c) 7.333 ...... 7.54(c)(3) 1320, do not apply to this notice of 7.70 ...... 7.24(a) 7.334 ...... 7.54(d)(1) proposed rulemaking because there are 7.71 ...... 7.24(b) 7.335 ...... 7.54(d)(2) no new or revised recordkeeping or 7.72 ...... 7.24(c) 7.336 ...... 7.54(f) reporting requirements. 7.73 ...... 7.24(d) 7.337 ...... 7.54(h) 7.74 ...... 7.24(e) 7.340 ...... 7.55(a) The Office of Management and Budget 7.75 ...... 7.24(f) 7.350 ...... 7.55(b)(1) has previously approved the collections 7.76 ...... 7.24(g) 7.351 ...... 7.55(b)(2) of information contained in this notice 7.77 ...... 7.24(f) 7.353 ...... 7.55(b)(3) of proposed rulemaking, in accordance 7.78 ...... 7.24(f) with the requirements of the Paperwork 7.79 ...... 7.24(h) What Are the Technical Amendments Reduction Act of 1980 or the Paperwork 7.80 ...... 7.22(a)(3) ATF Is Making in This Rule? 7.81 ...... 7.25(a)(1) Reduction Act of 1995. The collection of 7.82 ...... 7.25(a)(2) We are making minor technical information in this regulation is in the 7.83 ...... 7.25(b) amendments to clarify the appropriate following sections:
INFORMATION COLLECTIONS IN PART 7
OMB sontrol For the purpose of . . . Old section New section No.
Declaration of sulfites ...... § 722.(b)(6) .. § 7.46 ...... 1512–0469
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INFORMATION COLLECTIONS IN PART 7—Continued
OMB sontrol For the purpose of . . . Old section New section No.
Name and address ...... § 7.25 ...... §§ 7.81–7.84 1512–0474
Regulatory Flexibility Act List of Subjects in 27 CFR Part 7 7.21 When must I obtain a certificate of label approval from ATF for an imported The provisions of the Regulatory Advertising, Authority delegations, malt beverage? Flexibility Act (5 U.S.C. 601 et seq.) do Beer, Consumer protection, Customs 7.22 How do I obtain a certificate of label not apply because this notice of duties and inspection, Imports, approval? proposed rulemaking will not have a Labeling, Packaging and Containers, 7.23 When must I exhibit a certificate of significant economic impact on a Reporting and recordkeeping label approval? substantial number of small entities. requirements. 7.24 Must imported malt beverage labels be Any final rule published as a result of identical to the label on the certificate of this notice will not impose, or otherwise Proposed Rule label approval? 7.25 What if my imported malt beverage cause, a significant increase in For the reasons set forth in the labels do not conform to my certificate reporting, recordkeeping, or other preamble, we propose to amend title 27, of label approval? compliance burdens on a substantial Code of Federal Regulations, by revising 7.26 Where do I find the ATF procedures number of small entities. part 7 in its entirety as follows: for certificates of label approval? We do not expect the final rule to General Label Requirements have a significant secondary or PART 7—LABELING AND incidental effect on a substantial ADVERTISING OF MALT BEVERAGES 7.30 Why must I label my malt beverages? 7.31 Must I use a contrasting background? number of small entities. Accordingly, Par. 1. To incorporate the principles 7.32 What size of type is acceptable for the we certify under the provisions of alcohol content statement? section 3 of the Regulatory Flexibility of plain language, revise part 7 to read as follows: 7.33 What size of type is acceptable for Act (5 U.S.C. 605(b)) that this notice mandatory information other than the will not have a significant economic PART 7—LABELING AND alcohol content? impact on a substantial number of small ADVERTISING OF MALT BEVERAGES 7.34 Is English required for the label? entities. 7.35 May I make statements in foreign Pursuant to section 7805(f) of the Subpart A—What Is the Scope of The languages? Internal Revenue Code of 1986, we have Regulations in This Part? 7.36 May I use Spanish for malt beverages destined for Puerto Rico? Sec. submitted this regulation to the Chief 7.37 How must I attach my labels to the 7.1 What do the regulations in this part Counsel for Advocacy of the Small containers? cover? Business Administration for comment 7.38 May I state information that is not 7.2 To which jurisdictions do the on its impact on small business. required? regulations in this part apply? Executive Order 12866 7.3 How does State law affect the Mandatory Label Information regulations in this part? 7.40 What information is required on my We determined that this rule is not a 7.4 What ATF Forms must I use? significant regulatory action because it brand label? 7.5 Where do I get ATF Forms? 7.41 What additional information is will not: 7.6 What other regulations apply? required for an imported malt beverage? 1. Have an annual effect on the 7.7 Which Treasury Decisions preceded the 7.42 What additional information is revision of this part? economy of $100 million or more or required for malt beverages I bottle or 7.8 Who must comply with the regulations adversely affect in a material way the pack for another person? in this part? 7.43 Am I required to include the alcohol economy, a sector of the economy, 7.9 Do these regulations apply to malt content? productivity, competition, jobs, the beverages I export in bond? environment, public health or safety, or 7.44 How must I label my malt beverage State, local or tribal governments or Subpart B—Definitions made with FD&C Yellow No. 5? communities; 7.10 What terms must I know to understand 7.45 How must I label my malt beverage if these regulations? saccharin is present? 2. Create a serious inconsistency or 7.46 How must I label my malt beverage if otherwise interfere with an action taken 7.11 What is a malt beverage ‘‘advertisement?’ it contains sulfites? or planned by another agency; 7.12 What are examples of malt beverage 7.47 How must I label my malt beverage if 3. Materially alter the budgetary advertisements? it contains aspartame? impact of entitlements, grants, user fees, 7.13 Is my malt beverage label an Brand Names or loan programs or the rights and advertisement? 7.50 What is the brand name? obligations of recipients thereof; or 7.14 Is a news article an advertisement?’’ 7.15 Who is the ‘‘appropriate ATF officer’’ 7.51 What is a misleading brand name? 4. Raise novel legal or policy issues 7.52 How can I fix a misleading brand arising out of legal mandates, the for malt beverage labeling and advertising? name? President’s priorities, or the principles 7.53 Are certain trade or brand names of set forth in Executive Order 12866. Subpart C—Labeling Requirements for Malt foreign origin exempt from § 7.51? Beverages Drafting Information Misbranding Requirements for Certificates of Label 7.60 What is ‘‘misbranding?’’ The principal author of this document Approval 7.61 What if my label doesn’t have all the is William H. Foster, Regulations 7.20 When must I obtain a certificate of mandatory information? Division, Bureau of Alcohol, Tobacco label approval from ATF for a domestic 7.62 On my cartons or cases may I use and Firearms. malt beverage? material that is prohibited on labels?
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7.63 May I use containers that are 7.201 Are there exceptions to advertising Additional Malt Beverage Advertisement permanently marked with someone requirements? Practices else’s name? Mandatory Advertising Statements 7.330 You must not use advertisement Class and Type statements inconsistent with your malt 7.210 What statements are mandatory for beverage labeling. 7.70 What is class and type? malt beverage advertisements? 7.331 You must not use an unapproved 7.71 What is the class for a reconstituted 7.211 What information is required about label in an advertisement. malt beverage? the responsible advertiser? 7.332 You may depict an approved label 7.72 What is ‘‘half and half?’’ 7.212 What information is required for malt with alcohol content in a malt beverage 7.73 What class designation may I use to beverage class? advertisement. label malt beverages with less than one- 7.213 Is there any exception to mandatory 7.333 You may use an advertisement with half of 1 percent alcohol by volume? information? an actual container showing an approved 7.74 What rules apply to class for ale, alcohol content label. porter, and stout? Legibility of Mandatory Information 7.334 You must not use misleading class 7.75 What are the requirements for 7.220 What are the requirements for statements. geographical names for distinctive types legibility of mandatory information? 7.335 You must not use ale, porter, or stout of malt beverages? designations in a misleading manner. 7.76 What is a generic geographical name 7.221 What are the requirements for legibility on signs, billboards, or 7.336 Your advertisement must not confuse for distinctive types of malt beverages? brands. 7.77 What are examples of distinctive types displays? 7.222 May I place mandatory information in 7.337 You must not use deceptive of malt beverages with geographical advertising techniques. names that are not generic? a separate part of my advertisement? 7.78 How may I designate Pilsner beer that 7.223 May I combine mandatory Comparative Advertisements I produce in the United States? information for more than one product? 7.340 May I use comparative advertising? 7.79 How may I use a geographical name on 7.224 How apparent must the mandatory other than a distinctive malt beverage information be to viewers? Taste Tests in Advertisements type? Subpart E—Prohibited Practices for 7.350 May I use taste tests in malt beverage Name and Address Labeling and Advertising advertisements? 7.351 What scientific procedures must I use 7.80 Where must I state my name and 7.300 What is covered by these for taste tests? address? prohibitions? 7.352 Must I list the name and address of 7.81 What name and address is required for the taste test administrator? domestic malt beverages? Malt Beverage Labeling and Advertisements 7.82 What name and address is acceptable 7.301 You must not use false or misleading Authority: 27 U.S.C. 205. if I pack or bottle for someone else? statements. Subpart A—What Is the Scope Of The 7.83 What name and address is required for 7.302 You must not disparage a imported malt beverages? competitor’s products. Regulations in This Part? 7.84 What type of address must I state on 7.303 You must not use obscene or indecent my label? § 7.1 What do the regulations in this part material. cover? 7.304 You must not use statements about Net Contents Statement The regulations in this part relate to testing and analyses that may mislead 7.90 Where must I state the net contents of consumers. the labeling and advertising of malt my container? beverages. 7.91 How must I state net contents? 7.305 You must not use misleading statements about guarantees. § 7.2 To which jurisdictions do the Alcohol Content 7.306 You may use a statement for a money- regulations in this part apply? back guarantee. 7.100 When may I state the alcohol content This part applies to the States of the of my malt beverage? 7.307 You must not mislead consumers as 7.101 What measurement do I use to state to government authority for your malt United States, the District of Columbia, alcohol content? beverage processes. and the Commonwealth of Puerto Rico. 7.102 How do I state alcohol content? 7.308 You may use a municipal or State § 7.3 How does State law affect the 7.103 What tolerance is permitted between permit number. regulations in this part? actual alcohol content and the label 7.309 You must not mislead consumers as statement of alcohol content? to government supervision of your malt These regulations apply to malt 7.104 What is the acceptable tolerance for beverage business. beverage labeling and advertising in ‘‘low’’ or ‘‘reduced’’ alcohol malt 7.310 You must not use United States flags interstate commerce only to the extent beverages? or other insignia. that State law imposes similar 7.105 What is the tolerance for a malt 7.311 You must not use flags or insignia in requirements on malt beverages that are beverage I label with a ‘‘0.0%’’ alcohol a misleading manner. exclusively intrastate. You must comply content? 7.312 You must not use curative or with these regulations to the extent that 7.106 When may I use the terms ‘‘low therapeutic claims. alcohol’’ or ‘‘reduced alcohol?’’ the State imposes similar requirements 7.313 You must not use words that may 7.107 When may I use the term ‘‘non- on malt beverages that you remove for mislead as to alcoholic strength. alcoholic?’’ consumption or sale only in that State. 7.314 What is not misleading as to alcoholic 7.108 When may I use the term ‘‘alcohol § 7.4 What ATF Forms must I use? free?’’ strength? Additional Malt Beverage Labeling Practices The Director prescribes all forms Relabeling Malt Beverages required by these regulations. Follow 7.110 May I alter a malt beverage label 7.320 Your brand and trade names must not the instructions on each form and include misleading endorsements. already on the container? furnish all of the required information. 7.111 May I relabel a malt beverage? 7.321 What is an acceptable brand or trade name labeling endorsement? If you fail to follow instructions or to 7.112 How do I get permission to relabel a provide the information that we require, malt beverage? 7.322 You must not use numerals that are misleading as to alcoholic content. you may not receive the service or Subpart D—Advertising of Malt Beverages 7.323 You must not use prohibited labeling benefit that you request. To comply 7.200 Who must comply with these statements on coverings, cartons, or with labeling regulations use: regulations? cases. Application for and Certification/
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Exemption of Label/Bottle Approval, § 7.9 Do these regulations apply to malt Packer. Any person who places malt ATF Form 5100.31. beverages I export in bond? beverages in containers of a capacity in No, these regulations do not apply to excess of one gallon. § 7.5 Where do I get ATF Forms? malt beverages you export in bond. Person. Any individual, partnership, You can download ATF forms from joint-stock company, business trust, our website at www.atf.treas.gov. You Subpart B—Definitions association, corporation, or other form of business enterprise, including a may also request forms by mail from the § 7.10 What terms must I know to ATF Distribution Center. The mailing understand these regulations? receiver trustee, or liquidating agent, address is: ATF Distribution Center, and including an officer or employee of These terms have specific meanings P.O. Box 5950, Springfield, VA 22150– any agency of a State or political for malt beverage labeling and 5950. subdivision thereof. advertising. State. Any State of the United States § 7.6 What other regulations apply? Act. The Federal Alcohol including the District of Columbia and Administration Act. You may find other related the Commonwealth of Puerto Rico. regulations in these parts of title 27, Advertisement. See § 7.11. These regulations. Part 7, title 27, Code of Federal Regulations (27 CFR): Appropriate ATF officer. See § 7.15. Code of Federal Regulations (27 CFR Brand label. The label carrying, in the part 7). Part 1—Basic Permit Requirements Under the usual distinctive design, the brand name United States: The several States, the Federal Alcohol Administration Act. of the malt beverage. District of Columbia, and the Part 4—Labeling and Advertising of Wine. Part 5—Labeling and Advertising of Distilled Bottler. Any person who places malt Commonwealth of Puerto Rico. Spirits. beverages in containers of a capacity of We. In these regulations ‘‘we’’ refers Part 13—Labeling Proceedings. one gallon or less. to the Bureau of Alcohol, Tobacco and Part 16—Alcoholic Beverage Health Warning Certificate of label approval. An ATF Firearms. Statement. Form, the Application for and You and I. ‘‘You’’ and ‘‘I’’ refer to the Part 25—Beer. Certification/Exemption of Label/Bottle person who must comply with these Part 26—Liquors and Articles from Puerto Approval, ATF Form 5100.31. regulations. Rico and the Virgin Islands. Container. Any can, bottle, barrel, Part 27—Importation of Distilled Spirits, § 7.11 What is a malt beverage Wines and Beer. keg, or other closed receptacle, in any ‘‘advertisement? Part 71—Rules of Practice in Permit size or material, for the sale of malt A malt beverage ‘‘advertisement’’ Proceedings. beverages at retail. includes any written, broadcast, or Director. The Director, Bureau of verbal statement, illustration, or § 7.7 Which Treasury Decisions preceded Alcohol, Tobacco and Firearms, the revision of this part? depiction in any medium that is: Department of the Treasury, (a) In interstate or foreign commerce, We issued these Treasury Decisions in Washington, DC. or earlier rulemaking concerning malt Gallon. A U.S. gallon of 231 cubic (b) Calculated to induce sales in ° ° beverage labeling and advertising: inches at 39.1 F (4 C). All other liquid interstate or foreign commerce, or measures used are subdivisions of the (c) Disseminated by mail. Treasury Federal gallon as defined. decision Register Date § 7.12 What are examples of malt beverage (T.D.) citation Interstate or foreign commerce. Offering for sale, selling, shipping, advertisements? 6521 ...... 25 FR 13859 Dec. 29, 1960. delivering for sale or for shipment, This list does not include all forms of 6672 ...... 28 FR 9637 Aug. 31, 1963. removing from U.S. Customs custody, or advertisement, but includes examples. 29 FR 3572 Mar. 20, 1964. otherwise introducing malt beverages ‘‘Advertisement’’ includes all ATF–48 .... 43 FR 13534 Mar. 31, 1978. into commerce between any State and material(s): written, printed, graphic, or ATF–66 .... 45 FR 40552 June 13, 1980. any place outside the State, or between any other media, including those in: ATF–92 .... 46 FR 46912 Sept. 23, 1981. points within the same State but (a) Newspapers, magazines, trade ATF–94 .... 46 FR 55097 Nov. 6, 1981. through any place outside the State, or booklets, menus, wine cards, leaflets, ATF–180 .. 49 FR 61374 Aug. 8, 1984. commerce within the District of circulars, mailers, book inserts, catalogs, ATF–224 .. 51 FR 7673 Mar. 5, 1986. promotional materials, sales pamphlets, ATF–225 .. 51 FR 8492 Mar. 12, 1986. Columbia. ATF–249 .. 52 FR 5956 Feb. 27, 1987. Malt beverage. A beverage made by periodical literature, or similar ATF–280 .. 54 FR 3594 Jan. 25, 1989. the alcoholic fermentation of an publications; ATF–294 .. 55 FR 5421 Feb. 14, 1990. infusion, decoction, or combination of (b) Matter accompanying malt ATF–339 .. 58 FR 21231 April 19, 1993. both, in potable brewing water, of beverage containers; ATF–344 .. 58 FR 40354 July 28, 1993. malted barley with hops, or their parts (c) Representations made on cases, in ATF–372 .. 61 FR 20723 May 8, 1996. or products, and with or without: any billboard, sign, other outdoor (1) Other malted cereals, advertisement, public transit card, or § 7.8 Who must comply with the (2) The addition of unmalted or similar material; (d) Radio or television broadcasts or regulations in this part? prepared cereals, Internet or other electronic (3) Other carbohydrates or You must mark, brand, or label your communications; malt beverage containers and comply carbohydrate products prepared, (e) Any other media. with these regulations if you are a malt (4) The addition of carbon dioxide, beverage brewer, wholesaler, or and § 7.13 Is my malt beverage label an importer, directly or indirectly, or (5) Other wholesome products advertisement? through an affiliate, and you introduce suitable for human food consumption. No, labels on containers are not malt beverages into interstate Other terms. Any other term defined advertising under these regulations. commerce, or you receive malt in the Federal Alcohol Administration However, you must comply with the beverages in interstate or foreign Act and used in this part has the same labeling requirements of these commerce. meaning assigned to it by the Act. regulations when you affix any label to
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any malt beverage container, coverings, (a) Bottle or pack malt beverages, or § 7.25 What if my imported malt beverage cartons, or cases of containers you use labels do not conform to my certificate of (b) Remove malt beverages from the label approval? for sale at retail. plant where they are bottled or packed. If the labels for your imported malt § 7.14 Is a news article an advertisement? § 7.21 When must I obtain a certificate of beverages in U.S. Customs custody do No, we do not consider unpaid and label approval from ATF for an imported not conform to certificates of label unsolicited news material to be malt beverage? approval issued by us, then you must advertisements. For example, most relabel the malt beverages: You must obtain an approved articles, editorials, and news releases (a) Prior to release, and are not advertisements. We do, however, certificate of label approval in order to (b) Under the supervision and consider news material, articles, obtain release of bottled imported malt direction of the U.S. Customs officers of editorials, and news releases to be beverages in containers from U.S. the port at which the malt beverages are advertisements if you: Customs custody. You must deposit the located. (a) Pay or promise to pay for the original or a copy of an approved material, directly or indirectly, or certificate of label approval, ATF Form § 7.26 Where do I find the ATF procedures (b) Direct the material to be written. 5100.31, with the appropriate U.S. for certificates of label approval? Customs officer at the port of entry. You will find the procedures § 7.15 Who is the ‘‘appropriate ATF regarding the issuance, denial, and officer’’ for malt beverage labeling and § 7.22 How do I obtain a certificate of label revocation of certificates of label advertising? approval? approval, as well as appeal procedures The ‘‘appropriate ATF officer’’ is the To obtain a certificate of label in part 13 of this chapter. officer or employee of the Bureau of Alcohol, Tobacco and Firearms (ATF) approval, you must submit an General Label Requirements application to the appropriate ATF who is authorized to perform the § 7.30 Why must I label my malt beverage? function that is required by a particular officer (see § 7.15) on Application for regulation. The Director delegates and Certification/Exemption of Label/ The Federal Alcohol Administration authorities in these regulations to Bottle Approval, ATF Form 5100.31. If Act requires that, in compliance with certain ATF officers. You will find the we approve your label, we will issue these regulations, you must label, mark, specific ‘‘appropriate ATF officer’’ in your approved certificate to you. and brand all malt beverages that you the delegation order for part 7. As introduce into interstate or foreign § 7.23 When must I exhibit a certificate of commerce. For beverages that move needed, we may periodically update the label approval? delegation order. On the effective date only within a State, the Act requires you of this regulation the current delegation You must exhibit your certificate of to take these actions to the extent that order is ATF O 1130.2A, Delegation label approval upon the demand of any similar State law requires you to label, mark, and brand malt beverages. Order ‘‘ Delegation of the Director’s duly authorized representative of the Authorities in 27 CFR Part 4, 5, and 7, United States Government or any duly § 7.31 Must I use a contrasting Labeling and Advertising of Wine, authorized representative of a State or background? Distilled Spirits, and Malt Beverages. political subdivision of the State. You Yes. You must design your labels so You may obtain the current delegation may exhibit an original or duplicate that all statements required by these order: original of a certificate of label approval. regulations are readily legible under (a) By mail from: ATF Distribution ordinary conditions, and all such Center, P.O. Box 5950, Springfield, § 7.24 Must imported malt beverage labels statements are on a contrasting Virginia 22150–5190; or be identical to the label on the certificate of background. This applies to all label approval? (b) By Internet at: http:// mandatory information under these www.atf.treas.gov. Yes, except for certain permissible regulations. changes, your certificate of label Subpart C—Malt Beverage Labeling § 7.32 What size of type is acceptable for Requirements approval must match the actual labels. the alcohol content statement? You must present the original or copy You must state all portions of the Requirements for Certificates of Label of an approved certificate of label Approval alcohol content statement in the same approval to obtain release from U.S. size and kind of lettering and of equally § 7.20 When must I obtain a certificate of Customs custody. The certificate of label conspicuous color. Unless State law label approval from ATF for a domestic malt approval permits certain changes to requires otherwise, you must make the beverage? labels. See the back of Certificate of statement of alcohol content in script, You must obtain a certificate of label Label Approval (ATF Form 5100.31) for type, or printing. Use a size of type in approval from us if you: details. accordance with these requirements.
Then the size of the script, type, or printing of the alcohol content must If the container is: be:
(a) 8 fluid ounces or less ...... Not smaller than 1 millimeter. (b) More than 8 fl. oz ...... Not smaller than 2 millimeters. (c) 40 fl. oz. or less ...... Not larger than 3 millimeters. (d) Larger than 40 fl. oz ...... Not larger than 4 millimeters.
§ 7.33 What size of type is acceptable for mandatory information other than the alcohol content? For mandatory information other than the alcohol content you must use a size of type in accordance with these requirements.
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Then the size of the script, type, or printing of all mandatory informa- If . . . tion must be:
(a) The mandatory information is stated among other descriptive or ex- More conspicuous than that of the descriptive or explanatory informa- planatory information. tion that it appears with. (b) The container is one-half pint or less ...... Not smaller than 1 millimeter. (c) The container is more than one-half pint ...... Not smaller than 2 millimeters.
§ 7.34 Is English required for the label? address of the importer on the brand § 7.47 How must I label my malt beverage Yes, on malt beverage labels you must label or on a separate front or back label if it contains aspartame? use the English language for all in accordance with § 7.83. (a) When the malt beverage contains mandatory information other than the aspartame you must include the § 7.42 What additional information is brand name. required for malt beverages that I bottle or following statement in accordance with pack for another person? Food and Drug Administration (FDA) § 7.35 May I make statements in foreign regulations, in capital letters, separate languages? If you bottle or pack malt beverages and apart from all other information: Yes, you may make additional for a permit holder or retailer, you must statements in foreign languages if the include your name and address as the PHENYLKETONURICS: CONTAINS PHENYLALANINE statements do not conflict with or bottler or packer on the brand label or contradict the requirements of these on a separate back or front label in (b) This statement may appear on the regulations. accordance with § 7.82. brand label, or any front or back label. § 7.36 May I use Spanish for malt § 7.43 Am I required to include the alcohol Brand Names beverages destined for Puerto Rico? content? § 7.50 What is the brand name? Yes, you may use Spanish instead of If required by State law, you must list The ‘‘brand name’’ is the trade name English for malt beverage labels on the alcohol content on the brand label you use when you sell your malt containers you bottle or pack for or on a separate back or front label in beverage. You must have a brand name consumption in Puerto Rico. If you use accordance with §§ 7.100 through 7.108. for your malt beverage. If you do not Spanish, you must also state the net Nothing in this section relieves you develop a brand name to sell your malt contents in English. from complying with State law. beverage, then you must use your name § 7.37 How must I attach my labels to the § 7.44 How must I label a malt beverage as the brand name for the purpose of containers? made with FD&C Yellow No. 5? these regulations. You must firmly affix labels. You If you use this coloring material, then § 7.51 What is a misleading brand name? must attach the labels to containers of you must include the statement: malt beverages in such a way that they A brand name is misleading if it ‘‘Contains FD&C Yellow No. 5.’’ on the creates any erroneous impression or cannot be removed without a thorough brand label or on a separate back or application of water or other solvents. inference as to the age, origin, identity, front label. or other characteristics of the malt § 7.38 May I state information that is not § 7.45 How must I label my malt beverage beverage. We may find a brand name required? if saccharin is present? misleading by itself or in association Yes, your labels may contain When saccharin is present in the with other printed or graphic matter. information other than the mandatory finished product, you must include the You must not use a misleading brand label information required by these following statement, separate and apart name. regulations if the information: from all other information, on the brand (a) Complies with the requirements of § 7.52 How can I fix a misleading brand label or a back or front label: name? these regulations, and (b) Does not conflict with, or in any Use of this malt beverage may be One way to fix a misleading brand manner qualify, statements required by hazardous to your health. This malt beverage name so that it does not convey an these regulations. contains saccharin which has been erroneous impression as to the age, determined to cause cancer in laboratory origin, identity, or other characteristics animals. Mandatory Label Information of the malt beverage is to qualify your § 7.40 What information is required on my § 7.46 How must I label my malt beverage misleading brand name by adding the brand label? if it contains sulfites? word ‘‘brand.’’ On your brand label you must state (a) Where sulfur dioxide or a sulfiting § 7.53 Are certain trade or brand names of your: agent is detected at a level of 10 or more foreign origin exempt from § 7.51? (a) Brand name, in accordance with parts per million, measured as total Some trade or brand names of foreign §§ 7.50 through 7.53, sulfur dioxide, you must include one of origin are exempt from the misleading (b) Class, in accordance with §§ 7.70 these: prohibition in § 7.51. You may use a through 7.79, (1) ‘‘Contains sulfites’’ or trade or brand name of foreign origin (c) Name and address in accordance (2) ‘‘Contains (a) sulfiting agent(s)’’ or that meets these conditions: with §§ 7.80 through 7.84, and (3) A statement identifying the (a) It was registered in the United (d) Net contents in accordance with specific sulfiting agent. § 7.90 through 7.91. States Patent Office on or before August (b) The sulfite declaration may appear 29, 1935; § 7.41 What additional information is on a strip label or neck label instead of (b) It was used by you or your required for an imported malt beverage? appearing on the front or back label. predecessors in the United States for a In the case of imported malt (Approved by the Office of Management and period of at least 5 years immediately beverages, you must state the name and Budget under Control No. 1512–0469.) preceding August 29, 1935;
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(c) The trade or brand name is name, together with an adequate and (c) Is produced with no coloring or qualified by the name of the location in truthful statement of the composition of flavoring materials other than those the United States where you produce the malt beverage. We consider this recognized in standard brewing the malt beverage; and statement to be a statement of class and practices. (d) The qualification is as type for the purposes of these conspicuous as the trade name or brand. regulations. § 7.75 What are the requirements for geographical names for distinctive types of Misbranding § 7.71 What is the class for a reconstituted malt beverages? malt beverage? § 7.60 What is ‘‘misbranding?’’ You may use geographical names for Regulations permit you to reconstitute distinctive types of malt beverages only The Act provides that malt beverage any malt beverage that you have if: containers must bear the labels required concentrated by the removal of water. (a) The malt beverage is produced in by these regulations. If your labels do You may reconstitute the malt beverage the particular region indicated by the not conform to these requirements then only by the addition of water and name; the law provides that your containers carbon dioxide. You must label these (b) We find under § 7.76 that the name are misbranded. reconstituted malt beverages in the same is generic; or § 7.61 What if my label doesn’t have all the manner as malt beverages that have not (c) The malt beverage conforms to the mandatory information? been concentrated and reconstituted. designated type and together with the Your malt beverage is misbranded if However, you must show the class name, and in lettering equally visible as the container does not have a brand designation of these beverages in the name, there must appear: label (or a brand label and other accordance with these conditions. You (1) The word ‘‘type,’’ permitted labels) that: must: (2) The word ‘‘American,’’ or (a) Contains the mandatory label (a) Show the statement: ‘‘PRODUCED (3) Some other statement indicating information as required by §§ 7.40 FROM lll CONCENTRATE’’ the true place of production. together with the class designation, through 7.47, and § 7.76 What is a generic geographical (b) Conforms to the general (b) Use the appropriate class designation in the blank, and name for distinctive types of malt requirements specified in these beverages? regulations. (c) Show all parts of the class designation in lettering of substantially A generic geographical name is one § 7.62 On my cartons or cases may I use the same size and kind. that by usage and common knowledge material that is prohibited on labels? has lost its geographical significance as No, your malt beverage is misbranded § 7.72 What is ‘‘half and half?’ a place of origin for the product. We if you use any material intended for You may designate a malt beverage as determine which geographical names retail use that contains any statement, ‘‘half and half’’ only if it is composed of are generic. An example of a generic design, device, or graphic, pictorial, or equal parts of two classes of malt geographical name is ‘‘India Pale Ale.’’ emblematic representation that is beverages. You must conspicuously state the names of both together with the § 7.77 What are examples of distinctive prohibited by these regulations. types of malt beverages with geographical Examples of materials include: designation ‘‘half and half.’’ names that are not generic? (a) Containers, § 7.73 What class designation may I use to These are examples of distinctive (b) Caps on containers, label malt beverages with less than one-half types of beer with geographical names (c) Labels on the containers, or any of 1 percent alcohol by volume? that are not generic: carton, case, or other covering of the (a) For malt beverages containing less Dortmund, Dortmunder, Vienna, container, and than one-half of 1 percent (0.5%) of Wien, Wiener, Bavarian, Munich, (d) Any written, printed, graphic, or alcohol by volume you must list the Munchner, Salvator, Kulmbacher, other matter accompanying the class as one of the following: Wurtzburger. container to the consumer. (1) ‘‘Malt beverage,’’ § 7.78 How may I designate Pilsner beer § 7.63 May I use containers that are (2) ‘‘Cereal beverage,’’ or that I produce in the United States? permanently marked with someone else’s (3) ‘‘Near beer.’’ If you use the name? designation ‘‘near beer,’’ both words You may designate beer you produce No, your containers are misbranded if must appear in the same size and style in the United States as ‘‘Pilsen,’’ they are marked, branded, or burned of type, in the same color of ink, and on ‘‘Pilsener,’’ or ‘‘Pilsner’’ without further with the name of a person other than the the same color background. modification if it conforms to that type. name required for the brand label. (b) You must not use the class designations ‘‘beer,’’ ‘‘lager beer,’’ § 7.79 How may I use a geographical name Class and Type on other than a distinctive malt beverage ‘‘lager,’’ ‘‘ale,’’ ‘‘porter,’’ or ‘‘stout,’’ or type? § 7.70 What is class and type? any other class or type designations that are commonly applied to malt beverages (a) You may use geographical names You must state on your brand label containing one-half of 1 percent (0.5%) that are not names for distinctive types the class of your malt beverage, and if or more of alcohol by volume. of malt beverages if: desired, you may state the type of malt (1) The malt beverage is produced in beverage. Class is a designation of malt § 7.74 What rules apply to class for ale, the particular place or region indicated beverage known to the trade, such as porter, and stout? in the name; or ‘‘beer,’’ ‘‘ale,’’ ‘‘porter,’’ ‘‘stout,’’ ‘‘lager,’’ You must not use ‘‘ale,’’ ‘‘porter,’’ or (2) We determine the brand name is or ‘‘malt liquor.’’ You may also further ‘‘stout’’ unless your malt beverage: not misleading as to origin of the malt distinguish a malt beverage by using (a) Is fermented at comparatively high beverage. names known to the trade. If the malt temperature, (b) If we find that your geographical beverage is not known to the trade (b) Possesses the characteristics name is misleading you must not use under a particular designation, you generally attributed to ‘‘ale,’’ ‘‘porter,’’ the name. One method to prevent a must state a distinctive or fanciful or ‘‘stout,’’ and name from being misleading is to
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qualify the geographical name by adding § 7.82 What name and address is § 7.84 What type of address must I state the word ‘‘brand.’’ acceptable if I pack or bottle for someone on my label? else? (a) You must state your post-office Name and Address If you bottle or pack malt beverages address. You may omit your street address and use only your city and (Approved by the Office of Management for another person you: state. and Budget under control number 1512– (a) Must state your name and address, (b) You may state additional 0474) and addresses if: (b) May state the name and address of § 7.80 Where must I state my name and (1) You are actively engaged in malt the other person immediately after the address? beverage business at the additional words ‘‘bottled for,’’ ‘‘distributed by,’’ or addresses, and some other similar appropriate phrase. You must state your name and (2) You state, together with the address: § 7.83 What name and address is required additional address, an appropriate (a) On the brand label, or for imported malt beverages? description of the business you conduct at that location. (b) By blowing, branding, or burning If you are importing malt beverages as it into the container. a permittee who is the importer, an Net Contents Statement exclusive agent, a sole distributor, or § 7.90 Where must I state the net contents § 7.81 What name and address is required any other person responsible for the for domestic malt beverages? of my container? importation, then you: You must state the net contents of On labels of containers of domestic (a) Must state on labels of containers malt beverages you must state your your container on the brand label or by of imported malt beverages the words blowing, branding, or burning it into the name as the bottler or packer and the ‘‘imported by’’ or a similar appropriate container. You do not need to state the place where you bottle or pack. You phrase followed immediately by the net contents on any label if you have the may show your principal place of name of the importer and the importer’s net contents blown, branded, or burned business instead of the actual place principal place of business in the in the container in plainly legible where you bottle or pack if the address United States, and characters, which are clear and not you show is a location where you also (b) May state the name and principal obscured in any way. bottle or pack. We may disapprove your place of business of the foreign listing of a principal place of business manufacturer, bottler, packer, or § 7.91 How must I state net contents? if its use creates a false or misleading shipper. If State or foreign law requires You must state net contents in impression as to the geographic origin of the name and place of business, then accordance with this chart. Express the malt beverage. they must appear on the label. fractions in their lowest denominations.
NET CONTENTS STATEMENTS
If your container is: Then you must state net contents:
(a) Less than 1 ...... in fluid ounces, or fractions of a pint. (b) 1 pint ...... 1 pint. (c) More than 1 pint, but less than 1 quart ...... in fractions of a quart, or in pints and fluid ounces. (d) 1 quart ...... 1 quart. (e) More than 1 quart, but less than 1 gallon ...... in fractions of a gallon, or in quarts, pints, and fluid ounces. (f) 1 gallon ...... 1 gallon. (g) More than 1 gallon ...... in gallons and fractions of a gallon.
Alcohol Content not use percent by weight, proof, ranges, (1) If your malt beverage contains 0.5 or maximums or minimums. percent alcohol by volume, you must § 7.100 When may I state the alcohol state alcohol content to the nearest one content of my malt beverage? § 7.102 How do I state alcohol content? tenth of a percent. (a) You may state the alcohol content State the alcohol content of your malt and the percentage and quantity of the beverage in accordance with these (2) If your malt beverage contains less original gravity or extract on a label. requirements: than 0.5 percent alcohol by volume, you When you state alcohol content you (a) You must use one of these options: may state alcohol content in one hundredths of a percent. must use: (1) ‘‘Alcohol___ percent by volume,’’ (1) The statement required by these (2) ‘‘Alcohol by volume ___ percent,’’ § 7.103 What tolerance is permitted regulations, or (3) ‘‘___ percent alcohol by volume,’’ between actual alcohol content and the (2) If it is different, the manner of or label statement of alcohol content? statement required under State law. (4) ‘‘___ percent alcohol/volume.’’ (b) Nothing in this section relieves We accept these listed tolerances (b) You may use these substitutions: you from complying with State law. between the actual alcohol content of (1) ‘‘Alc’’ for alcohol, your malt beverage and the alcohol § 7.101 What measurement do I use to (2) ‘‘Vol’’ for volume, and content you state on the label. state alcohol content? (3) ‘‘%’’ for percent. You must state the alcohol content in (c) State alcohol content as follows: percent of alcohol by volume. You must
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If your malt beverage: An acceptable tolerance is:
(a) Contains 0.5 percent or more alcohol by vol- any malt beverage you label as containing 0.5 percent or more alcohol by volume must not ume. contain less than 0.5 percent alcohol by volume, regardless of any tolerance. Otherwise, 0.3 percent, either above or below the stated percentage of alcohol. (b) Contains less than 0.5 percent alcohol by the actual alcoholic content must not exceed the labeled alcoholic content. volume.
§ 7.104 What is the acceptable tolerance or label on malt beverages you hold for § 7.201 Are there exceptions to advertising for ‘‘low’’ or ‘‘reduced’’ alcohol malt sale in interstate or foreign commerce, requirements? beverages? or after shipment in interstate or foreign There are two exceptions to these For malt beverages which you label as commerce, except as authorized by requirements. These regulations do not ‘‘low alcohol’’ or ‘‘reduced alcohol’’ the Federal law. You may relabel the malt apply to: actual alcohol content must not equal or beverage with prior permission from us. (a) Outdoor advertising in place on exceed 2.5 percent alcohol by volume, September 7, 1984: but the rules apply regardless of any tolerance permitted by § 7.111 May I relabel a malt beverage? upon replacement, restoration, or § 7.103. You may obtain permission to add renovation of that advertising; or § 7.105 What is the tolerance for a malt additional labeling or to relabel malt (b) The retailer, publisher, beverage I label with ‘‘0.0 %’’ alcohol beverages in containers if additional broadcaster, or provider of any content? labeling or relabeling is justified to advertising medium unless you are in There is no tolerance here. You may comply with: business as a malt beverage brewer, label a malt beverage with an alcoholic (a) These regulations, or wholesaler, bottler, or importer, directly or indirectly, or through an affiliate. content of 0.0 percent alcohol by (b) Requirements of State law. volume only if: Mandatory Advertising Statements (a) You also label it as ‘‘alcohol free,’’ § 7.112 How do I get permission to relabel and a malt beverage? § 7.210 What statements are mandatory for (b) It contains no alcohol. malt beverage advertisements? You must file a written application for All malt beverage advertisements permission to relabel. File with the § 7.106 When may I use the terms ‘‘low must comply with these regulations and alcohol’’ or ‘‘reduced alcohol?’ appropriate ATF officer (see § 7.15). You state the: must submit: You may use ‘‘low alcohol’’ or (a) Responsible advertiser (see ‘‘reduced alcohol’’ only on malt (a) Two complete sets of the old § 7.211), and beverages containing less than 2.5 labels, (b) Malt beverage class (see § 7.212). percent alcohol by volume. (b) Two complete sets of any § 7.211 What information is required about § 7.107 When may I use the term ‘‘non- proposed labels, and the responsible advertiser? alcoholic?’’ (c) A statement of the: The advertisement must state the You may use ‘‘non-alcoholic’’ on malt (1) Reasons for relabeling, name, city and state of the brewer, beverages only if you also use it together bottler, packer, wholesaler, or importer with the statement: ‘‘contains less than (2) Quantity and the location of the malt beverages, and responsible for its publication, 0.5 percent (or .5%) alcohol by broadcast, or Internet content. volume.’’ This statement must be in (3) Name and address of the person readily legible printing on a completely who will relabel. § 7.212 What information is required for contrasting background. malt beverage class? Subpart D—Advertising of Malt The advertisement must contain a § 7.108 When may I use the term ‘‘alcohol beverages free?’’ conspicuous statement of the class to which the malt beverage belongs, You may use ‘‘alcohol free’’ only on § 7.200 Who must comply with these regulations? corresponding to the statement of class malt beverages containing no alcohol. these regulations require to appear on Relabeling Malt Beverages You must comply with these the label of the product. (See §§ 7.70– regulations if you are a malt beverage 7.79) § 7.110 May I alter a malt beverage label brewer, wholesaler, or importer and you already on the container? publish or disseminate, or cause to be § 7.213 Is there any exception to No, the Act provides that it is published or disseminated, any malt mandatory information? unlawful to alter, mutilate, destroy, beverage advertisement, directly or Yes, there are these exceptions to obliterate, or remove any mark, brand, indirectly, or through an affiliate. mandatory information.
When your advertisement: You may:
(a) Refers to: A general malt beverage line, or all of the malt beverage state only the name and address of the responsible advertiser. products of one company, whether by the company name or by the brand name common to all the malt beverages in the line. (b) Refers to only one type of malt beverage marketed under the spe- not use the exception. State the name and address of the responsible cific brand name. advertiser and the class. (c) Is on consumer specialty items ...... state only: (1) the company name, or (2) brand name of the product.
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Legibility of Mandatory Information (a) Is false or untrue in any particular, (2) A statement that is required or or specifically authorized by Federal, § 7.220 What are the requirements for (b) Tends to create a misleading State, or municipal, law or regulation, legibility of mandatory information? consumer impression, whether or not and In any written, printed, or graphic the statement is true or false, either (3) A statement that is required or advertisement, all statements you make directly, by ambiguity, omission, specifically authorized by the laws or to comply with these regulations must inference, or by addition of irrelevant, regulations of the foreign country where be in lettering or type size sufficient to scientific or technical matter. the malt beverage is produced. be conspicuous and readily legible. § 7.302 You must not disparage a § 7.308 You may use a municipal or State § 7.221 What are the requirements for competitor’s products. permit number. legibility on signs, billboards, or displays? Your malt beverage labels and If you display a municipal or State In the case of signs, billboards, or advertisements must not disparage a permit number on your label or in displays your name and address may competitor’s products. advertisement, you may not use any appear in type size or lettering smaller additional statement to accompany the than the other mandatory information, § 7.303 You must not use obscene or permit number, except that you may use indecent material. provided that the information is legible an additional statement that is required upon closer examination of the sign or You must not use labels and by State law. billboard. advertisements with any statement, design, device, or representation that is § 7.309 You must not mislead consumers § 7.222 May I place mandatory information obscene or indecent. as to government supervision of your malt in a separate part of my advertisement? beverage business. No, you must clearly state mandatory § 7.304 You must not use statements You must not use malt beverage labels information as a part of the about testing and analyses that may or advertisements with statements that mislead consumers. advertisement. You must not separate imply governmental supervision over mandatory information in any manner You must not use any statement, production, bottling, or packing of malt from the remainder of the design, device, or representation beverages. Examples of these statements advertisement. relating to analyses, standards, or tests, include: whether these are true or false, that is (a) ‘‘Bonded’’ § 7.223 May I combine mandatory likely to mislead the consumer. information for more than one product? (b) ‘‘Bottled in bond’’ No, you must clearly separate § 7.305 You must not use misleading (c) ‘‘Aged in bond’’ statements of mandatory information for statements about guarantees. (d) ‘‘Bonded age’’ two or more products. You must not use any statement, (e) ‘‘Bottled under customs design, device, or representation supervision,’’ or § 7.224 How apparent must the mandatory relating to any guarantee, whether these (f) Phrases containing these or information be to viewers? are true or false, that is likely to mislead synonymous terms. You must state mandatory the consumer. information in print, electronic and § 7.310 You must not use United States audiovisual media so that it is readily § 7.306 You may use a statement for a flags or other insignia. apparent to the persons viewing the money-back guarantee. You must not use malt beverage labels advertisement. Malt beverage labels and or advertisements that contain any advertisements may include money- statement, design, device, or pictorial Subpart E—Prohibited Practices For back guarantee statements. representation that relate, directly or Labeling and Advertising indirectly, to: § 7.307 You must not mislead consumers (a) The armed forces of the United § 7.300 What is covered by these as to government authority for your malt States, prohibitions? beverage processes. (b) The United States flag, or These prohibitions may apply to: You must not use statements that may (c) Any emblem, seal, insignia, or (a) The use for sale to the consumer mislead consumers to believe that your decoration associated with the United of: malt beverage is manufactured or States flag or armed forces. (1) Containers of malt beverages, processed under any government (2) Labels on malt beverage authority. § 7.311 You must not use flags or insignia containers, (a) Such statements include: in a misleading manner. (3) Labels on shipping containers, (1) Simulations of government You must not use malt beverage labels (4) Cartons, cases, or individual stamps, or advertisements that contain coverings of malt beverage containers, (2) Designs that resemble or simulate misleading flags or insignia. Examples and a stamp of the United States include: flags, statements, designs, (5) Written, printed, graphic, or other Government or of any State or foreign devices, seals, coats of arms, crests, matter accompanying malt beverage government, and other insignia, or pictorial containers. (3) Any statement that your malt representations of these. Such labels or (b) Malt beverage advertisements. beverage is brewed, made, bottled, advertisements are misleading if a Malt Beverage Labeling and packed, labeled, or sold under, or in consumer may falsely believe the malt Advertisements accordance with, any municipal, State, beverage is: Federal, or foreign government (a) Endorsed by, § 7.301 You must not use false or authorization, law, or regulation. (b) Made by, misleading statements. (b) Your label may include: (c) Used by, For malt beverage labels and (1) A stamp authorized or required by (d) Produced by, advertisements you must not use any the United States Government or any (e) Produced under the supervision of, statement that: State or foreign government, or
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(f) Made in accordance with the (4) Any graphic, pictorial, or § 7.331 You must not use an unapproved specifications of the person whom the emblematic representation of these label in an advertisement. flag or insignia represents. individuals or organizations; and Any label you depict on a bottle in an (b) The use of the name is likely to advertisement must be a reproduction of § 7.312 You must not use curative and an approved label. therapeutic claims. mislead a consumer to falsely believe the individual or organization: You must not use malt beverage labels § 7.332 You may depict an approved label (1) Endorses, or advertisements with misleading with alcohol content in a malt beverage (2) Uses, advertisement. curative or therapeutic claims. Examples include any statements, (3) Produces, In any advertising media you may designs, representations, pictorial (4) Supervises production of, or depict an approved malt beverage label representations, or devices that (5) Gives specifications to produce the that bears a statement of alcoholic represent malt beverage consumption as malt beverage. content permitted under §§ 7.100 having curative or therapeutic effects. through 7.108. The statement of alcohol § 7.321 What is an acceptable brand or content on the label must not appear The claims are misleading if they: trade name labeling endorsement? (a) Are untrue in any way, or more prominently in the advertisement (b) Tend to create a misleading Brand or trade names are not than it does on the approved label. impression. misleading if you use the name of any person in business as a malt beverage § 7.333 You may use an advertisement with an actual container showing an § 7.313 You must not use words that may producer, importer, bottler, packer, approved alcohol content label. mislead as to alcoholic strength. wholesaler, retailer, or warehouseman. In any advertising media you may You may also use the name of any living Your labels and advertisements must display an actual malt beverage individual of public prominence, or an not use words that are misleading as to container showing the approved label existing private or public organization, the alcoholic strength of your malt bearing a statement of alcohol content provided that you or your predecessors beverage. You must not use misleading permitted under §§ 7.100 through 7.108. numerals, letters, characters, figures, or used the trade or brand name prior to similar words or statements. For August 29, 1935. § 7.334 You must not use misleading class example, you must not use these terms: statements. § 7.322 You must not use numerals that (a) ‘‘Strong,’’ are misleading as to alcoholic content. Your advertisements must not use (b) ‘‘Full strength,’’ misleading statements as to the class of (c) ‘‘Extra strength,’’ Your malt beverage labels must not your malt beverage. If your malt (d) ‘‘High test,’’ contain statements that consumers may beverage contains less than one-half of (e) ‘‘High proof,’’ consider as statements of alcoholic 1 percent alcohol by volume you must (f) ‘‘Pre-war strength,’’ or content. Examples include: statements, not use: (g) ‘‘Full old-time alcoholic strength.’’ designs, or devices, whether in the form (a) ‘‘Beer,’’ of numerals, letters, characters, figures, (b) ‘‘Lager beer,’’ § 7.314 What is not misleading as to or otherwise. However, you may use (c) ‘‘Lager,’’ alcoholic strength? statements as required by State law, or (d) ‘‘Ale,’’ You may use words or statements of as permitted by §§ 7.100 through 7.108. (e) ‘‘Porter’’ alcoholic strength or alcohol content (f) ‘‘Stout,’’ or under these conditions. § 7.323 You must not use prohibited (g) Any other class or type designation labeling statements on coverings, cartons, commonly applied to fermented malt (a) If State law requires you to include or cases. alcoholic strength or content statements beverages containing one-half of 1 on your labels or in your For retail packaging and other percent or more alcohol by volume. advertisements. materials you may use statements and graphics that are allowed by these § 7.335 You must not use ‘‘ale,’’ ‘‘porter,’’ (b) You may use the terms ‘‘low or ‘‘stout’’ designations in a misleading alcohol,’’ ‘‘reduced alcohol,’’ ‘‘non- regulations. You must not use any manner. statements, graphic pictorials, alcoholic,’’ and ‘‘alcohol-free,’’ in Your advertisements may use emblematic representations, or other accordance with §§ 7.106, 7.107, and designations for ‘‘ale,’’ ‘‘porter,’’ or matter, that are prohibited on labels or 7.108. ‘‘stout’’ only when your malt beverage: (c) You may use a malt beverage containers. For malt beverages these (a) Is fermented at a comparatively alcohol content statement in accordance prohibitions apply to: high temperature, with §§ 7.100 through 7.108. (a) Individual coverings, (b) Possesses the characteristics (b) Cartons, generally attributed to ‘‘ale,’’ ‘‘porter,’’ Additional Malt Beverage Labeling (c) Cases, or ‘‘stout,’’ and Practices (d) Other container wrappers, and (c) Is produced without the use of § 7.320 Your brand and trade names must (e) Any written, printed, graphic, or coloring or flavoring materials other not include misleading endorsements. other matter accompanying the than those recognized in standard You must not use a brand or trade container. brewing practices. name that is misleading. Brand or trade Additional Malt Beverage § 7.336 Your advertisement must not names are misleading if: Advertisement Practices confuse brands. (a) You use the name of: Your advertisement must not lead to (1) Any living individual of public § 7.330 You must not use advertisement brand confusion. prominence, statements inconsistent with your malt (a) This provision applies to your (2) An existing private or public beverage labeling. representations in: organization, You must not use malt beverage (1) One advertisement, (3) A name that is a simulation or an advertisement statements that are (2) Two or more advertisements in abbreviation of a living individual or inconsistent with your labeling one issue of a periodical or newspaper, organization, or statements. and
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(3) One piece of other written, cannot be perceived at a normal level of Testing Methods, ASTM Special printed, or graphic matter. awareness. Technical Publication 434, published by the American Society for Testing and (b) You must not advertise two or Comparative Advertisements more different malt beverage brands if Materials, 1916 Race Street, any of the following occur: § 7.340 May I use comparative Philadelphia, Pennsylvania 19103, advertising? (1) The advertisement tends to create ASTM, 1968, Library of Congress an impression that representations you Yes, you may use comparative Catalog Card Number 68–15545. make for one brand applies to the advertising that is not disparaging of a competitor’s product. § 7.352 Must I list the name and address of another brand; the taste test administrator? (2) The representations are contrary to Taste Tests in Advertisements Yes, if you use a taste test in your any provision of the regulations in this § 7.350 May I use taste tests in malt advertisement, you must also make a part; or beverage advertisements? statement in the advertisement (3) The representations are in any Yes, you may use taste test results in providing the name and address of the respect untrue. advertisements comparing competitors’ taste test administrator. § 7.337 You must not use deceptive products unless they are disparaging, Signed: August 17, 2001. deceptive, or likely to mislead the advertising techniques. Bradley A. Buckles, consumer. You must not use malt beverage Director. advertisements that use subliminal or § 7.351 What scientific procedures must I similar advertising techniques. These use for taste tests? Approved: May 14, 2002. prohibited advertisements include: the You must use a taste test procedure Timothy E. Skud, use of any device or technique that that meets scientifically accepted Deputy Assistant Secretary (Regulatory, Tariff conveys, or attempts to convey, a procedures. An example of a and Trade Enforcement). message to a person by means of images scientifically accepted procedure is [FR Doc. 02–16026 Filed 6–26–02; 8:45 am] or sounds of a very brief nature that outlined in the Manual on Sensory BILLING CODE 4810–31–P
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Part V
Department of Defense General Services Administration National Aeronautics and Space Administration 48 CFR Chapter 1, et al. Federal Acquisition Circular 2001–08; Final Rule
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DEPARTMENT OF DEFENSE ACTION: Summary presentation of final DATES: For effective dates and comment rules, and technical amendments and dates, see separate documents which GENERAL SERVICES corrections. follow. ADMINISTRATION SUMMARY: This document summarizes FOR FURTHER INFORMATION CONTACT: The NATIONAL AERONAUTICS AND the Federal Acquisition Regulation FAR Secretariat, Room 4035, GS SPACE ADMINISTRATION (FAR) rules agreed to by the Civilian Building, Washington, DC 20405, (202) Agency Acquisition Council and the 501–4755, for information pertaining to 48 CFR Chapter 1 Defense Acquisition Regulations status or publication schedules. For Council in this Federal Acquisition clarification of content, contact the Federal Acquisition Circular 2001–08; analyst whose name appears in the table Introduction Circular (FAC) 2001–08. A companion document, the Small Entity Compliance below in relation to each FAR case or AGENCIES: Department of Defense (DoD), Guide (SECG), follows this FAC. The subject area. Please cite FAC 2001–08 General Services Administration (GSA), FAC, including the SECG, is available and specific FAR case number(s). and National Aeronautics and Space via the Internet at http://www.arnet.gov/ Interested parties may also visit our Administration (NASA). far. website at http://www.arnet.gov/far.
Item Subject FAR case Analyst
I ...... Definition of ‘‘Claim’’ and Terms Relating to Termination ...... 2000–406 Klein. II ...... Federal Supply Schedule Order Disputes and Incidental Items ...... 1999–614 Nelson. III ...... Relocation Costs ...... 1997–032 Olson. IV ...... Technical Amendments
SUPPLEMENTARY INFORMATION: • Revises FAR 33.213(a) to clarify the assistance and for increased employee Summaries for each FAR rule follow. distinction between claims ‘‘arising income and Federal Insurance For the actual revisions and/or under a contract’’ and claims ‘‘relating Contributions Act taxes incident to amendments to these FAR cases, refer to to a contract’’ allowable reimbursed relocation costs, • the specific item number and subject set Revises the definition of ‘‘claim’’ in increasing the ceiling for allowance of forth in the documents following these the FAR clause at 52.233–1 to conform miscellaneous costs of relocation, and item summaries. to the definition at FAR 2.101; and making a number of editorial changes. FAC 2001–08 amends the FAR as • Makes other editorial revisions for specified below: clarity. Item IV—Technical Amendments Item I—Definition of ‘‘Claim’’ and Item II—Federal Supply Schedule These amendments update sections Terms Relating to Termination (FAR Order Disputes and Incidental Items and make editorial changes at FAR Case 2000–406) (FAR Case 1999–614) 52.202–1, 52.212–3, and 52.225–11. The purpose of this final rule is to This final rule amends the FAR to add Dated: June 19, 2002. clarify the applicability of definitions, policies on disputes and incidental Al Matera, eliminate redundant or conflicting items under Federal Supply Schedule definitions, and streamline the process contracts and to remove the requirement Director, Acquisition Policy Division. for locating definitions. This rule is not to notify GSA when a schedule Federal Acquisition Circular intended to change the meaning of any contractor refuses to honor an order FAR text or clause. Movement of placed by a Government contractor. Federal Acquisition Circular (FAC) various definitions to FAR 2.101 is not This rule affects all ordering offices 2001–08 is issued under the authority of intended to change the operation of the acquiring supplies or services subject to the Secretary of Defense, the cost principles and, specifically, the the procedures of FAR Subpart 8.4. Administrator of General Services, and movement of the definition of ‘‘claim’’ Item III—Relocation Costs (FAR Case the Administrator for the National to FAR 2.101 is not intended to change 1997–032) Aeronautics and Space Administration. the scope or context of FAR 31.205– Unless otherwise specified, all 47(f)(1). This final rule amends the relocation This final rule— cost principle at FAR 31.205–35. The Federal Acquisition Regulation (FAR) • Revises and moves the definitions rule will only affect contracting officers and other directive material contained of ‘‘claim’’ from FAR 33.201; that price contracts using cost analysis, in FAC 2001–08 are effective July 24, ‘‘continued portion of the contract,’’ or that are required by a contract clause 2002. ‘‘partial termination,’’ ‘‘terminated to use cost principles for the portion of the contract’’ from FAR determination, negotiation, or allowance 49.001; and ‘‘termination for of costs. convenience’’ from FAR 17.103; The relocation cost principle • Adds a definition of ‘‘termination addresses the allowability of costs for default’’ at FAR 2.101 and a new incurred by an existing contractor paragraph (d) at FAR 17.104 that employee incident to the permanent explains the distinction between change of the employee’s assigned work ‘‘termination for convenience’’ and location for a period of 12 months or ‘‘cancellation’’ that was deleted from the more, or upon recruitment of a new definition of ‘‘termination for employee. The final rule revises the cost convenience’’ that was moved from FAR principle by making allowable 17.103; payments for spouse employment
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Dated: June 18, 2002. intended to change the meaning of any Administration certify that this final Deidre A. Lee, FAR text or clause. Movement of rule will not have a significant Director, Defense Procurement. various definitions to FAR 2.101 is not economic impact on a substantial intended to change the operation of the number of small entities within the Dated: June 10, 2002. cost principles, and specifically the meaning of the Regulatory Flexibility David A. Drabkin, movement of the definition of ‘‘claim’’ Act, 5 U.S.C. 601, et seq., because the Deputy Associate Administrator, Office of to FAR 2.101 is not intended to change rule does not change policy. We did not Acquisition Policy, General Services the scope or context of FAR 31.205– receive any comments regarding this Administration. 47(f)(1). determination as a result of publication Dated: June 10, 2002. This final rule— of the proposed rule in the Federal • Tom Luedtke, Revises and moves the definitions Register on August 15, 2001 (66 FR of ‘‘claim’’ from 33.201; ‘‘continued Assistant Administrator for Procurement, 42922). portion of the contract,’’ ‘‘partial National Aeronautics and Space C. Paperwork Reduction Act Administration. termination,’’ ‘‘terminated portion of the The Paperwork Reduction Act does [FR Doc. 02–15939 Filed 6–26–02; 8:45 am] contract’’ from FAR 49.001; and ‘‘termination for convenience’’ from not apply because the changes to the BILLING CODE 6820–EP–P FAR 17.103; FAR do not impose information • Adds a definition of ‘‘termination collection requirements that require the DEPARTMENT OF DEFENSE for default’’ at FAR 2.101 and a new approval of the Office of Management paragraph 17.104(d) that explains the and Budget under 44 U.S.C. 3501, et GENERAL SERVICES distinction between ‘‘termination for seq. ADMINISTRATION convenience’’ and ‘‘cancellation’’ that List of Subjects in 48 CFR Parts 2, 17, was deleted from the definition of 31, 33, 49, and 52 NATIONAL AERONAUTICS AND ‘‘termination for convenience’’ that was Government procurement. SPACE ADMINISTRATION moved from FAR 17.103; • Revises FAR 33.213(a) to clarify the Dated: June 19, 2002. 48 CFR Parts 2, 17, 31, 33, 49, and 52 distinction between claims ‘‘arising Al Matera, under a contract’’ and claims ‘‘relating Director, Acquisition Policy Division. [FAC 2001–08; FAR Case 2000–406; Item to a contract’’; Therefore, DoD, GSA, and NASA I] • Revises the definition of ‘‘claim’’ in amend 48 CFR parts 2, 17, 31, 33, 49, the clause at FAR 52.233–1 to conform RIN 9000–AJ19 and 52 as set forth below: to the definition at FAR 2.101; and 1. The authority citation for 48 CFR Federal Acquisition Regulation; • Makes other editorial revisions for parts 2, 17, 31, 33, 49, and 52 continues Definition of ‘‘Claim’’ and Terms clarity. to read as follows: Relating to Termination DoD, GSA, and NASA published a proposed rule in the Federal Register at Authority: 40 U.S.C. 486(c); 10 U.S.C. AGENCIES: Department of Defense (DoD), 66 FR 42922, August 15, 2001, with a chapter 137; and 42 U.S.C. 2473(c). General Services Administration (GSA), request for comment. One respondent and National Aeronautics and Space PART 2—DEFINITIONS OF WORDS submitted two comments to the AND TERMS Administration (NASA). proposed rule. The Councils considered ACTION: Final rule. and accepted both comments. The rule 2. Amend section 2.101 by adding, in was modified as a result. The first SUMMARY: The Civilian Agency alphabetical order, the definitions comment recommended that the Acquisition Council and the Defense ‘‘Claim,’’ ‘‘Continued portion of the parenthetical reference at FAR Acquisition Regulations Council contract,’’ ‘‘Partial termination,’’ 31.205(f)(1) be changed to reflect the (Councils) have agreed on a final rule ‘‘Termination for convenience,’’ new location of the definition of amending the Federal Acquisition ‘‘Termination for default,’’ and ‘‘claim’’ at FAR 2.101. This was done. Regulation (FAR) to clarify and move ‘‘Terminated portion of the contract’’ to The second comment recommended the definitions of ‘‘claim’’ and certain read as follows: that a clarifying statement be added to terms relating to termination to the FAR the Federal Register notice stating that 2.101 Definitions. part regarding definitions. the movement of the various definitions * * * * * DATES: Effective Date: July 29, 2002. to FAR 2.101 is not intended to change Claim means a written demand or FOR FURTHER INFORMATION CONTACT: The the operation of the cost principles, and written assertion by one of the FAR Secretariat, Room 4035, GS specifically the movement of the contracting parties seeking, as a matter Building, Washington, DC, 20405, (202) definition of ‘‘claim’’ to FAR 2.101 is of right, the payment of money in a sum 501–4755, for information pertaining to not intended to change the scope of FAR certain, the adjustment or interpretation status or publication schedules. For 31.205–47(f)(1). This was also done. of contract terms, or other relief arising clarification of content, contact Ms. This is not a significant regulatory under or relating to the contract. Linda Klein, Procurement Analyst, at action, and therefore, was not subject to However, a written demand or written (202) 501–3775. Please cite FAC 2001– review under Section 6(b) of Executive assertion by the contractor seeking the 08, FAR case 2000–406. Order 12866, Regulatory Planning and payment of money exceeding $100,000 SUPPLEMENTARY INFORMATION: Review, dated September 30, 1993. This is not a claim under the Contract rule is not a major rule under 5 U.S.C. Disputes Act of 1978 until certified as A. Background 804. required by the Act. A voucher, invoice, The purpose of this rule is to clarify or other routine request for payment the applicability of definitions, B. Regulatory Flexibility Act that is not in dispute when submitted is eliminate redundant or conflicting The Department of Defense, the not a claim. The submission may be definitions, and streamline the process General Services Administration, and converted to a claim, by written notice for locating definitions. This rule is not the National Aeronautics and Space to the contracting officer as provided in
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33.206(a), if it is disputed either as to PART 33—PROTESTS, DISPUTES, certain, the adjustment or interpretation of liability or amount or is not acted upon AND APPEALS contract terms, or other relief arising under in a reasonable time. or relating to this contract. However, a 33.201 [Amended] written demand or written assertion by the * * * * * Contractor seeking the payment of money Continued portion of the contract 6. Amend section 33.201 by removing exceeding $100,000 is not a claim under the means the portion of a contract that the the definition ‘‘Claim.’’ Act until certified. A voucher, invoice, or contractor must continue to perform 7. Amend section 33.213 by revising other routine request for payment that is not following a partial termination. paragraph (a) to read as follows: in dispute when submitted is not a claim * * * * * under the Act. The submission may be 33.213 Obligation to continue converted to a claim under the Act, by Partial termination means the performance. complying with the submission and termination of a part, but not all, of the (a) In general, before passage of the certification requirements of this clause, if it work that has not been completed and Act, the obligation to continue is disputed either as to liability or amount or accepted under a contract. performance applied only to claims is not acted upon in a reasonable time. * * * * * arising under a contract. However, the * * * * * Termination for convenience means Act, at 41 U.S.C. 605(b), authorizes Alternate I (Dec 1991). As prescribed in the exercise of the Government’s right to agencies to require a contractor to 33.215, substitute the following paragraph (i) completely or partially terminate continue contract performance in for paragraph (i) of the basic clause: performance of work under a contract accordance with the contracting officer’s * * * * * when it is in the Government’s interest. decision pending a final resolution of Termination for default means the any claim arising under, or relating to, [FR Doc. 02–15940 Filed 6–26–02; 8:45 am] exercise of the Government’s right to the contract. (A claim arising under a BILLING CODE 6820–EP–P completely or partially terminate a contract is a claim that can be resolved contract because of the contractor’s under a contract clause, other than the DEPARTMENT OF DEFENSE actual or anticipated failure to perform clause at 52.233–1, Disputes, that its contractual obligations. provides for the relief sought by the Terminated portion of the contract GENERAL SERVICES claimant; however, relief for such claim ADMINISTRATION means the portion of a contract that the can also be sought under the clause at contractor is not to perform following a 52.233–1. A claim relating to a contract partial termination. For construction NATIONAL AERONAUTICS AND is a claim that cannot be resolved under SPACE ADMINISTRATION contracts that have been completely a contract clause other than the clause terminated for convenience, it means at 52.233–1.) This distinction is 48 CFR Parts 8 and 51 the entire contract, notwithstanding the recognized by the clause with its completion of, and payment for, Alternate I (see 33.215). [FAC 2001–08; FAR Case 1999–614; individual items of work before * * * * * Item II] termination. * * * * * PART 49—TERMINATION OF RIN 9000–AJ01 CONTRACTS PART 17—SPECIAL CONTRACTING Federal Acquisition Regulation; METHODS 49.001 [Amended] Federal Supply Schedule Order Disputes and Incidental Items 17.103 [Amended] 8. Amend section 49.001 by removing the definitions ‘‘Claim,’’ ‘‘Continued AGENCIES: 3. Amend section 17.103 by removing Department of Defense (DoD), portion of the contract,’’ ‘‘Partial General Services Administration (GSA), the definition ‘‘Termination for termination,’’ and ‘‘Terminated portion convenience.’’ and National Aeronautics and Space of the contract.’’ Administration (NASA). 4. Amend section 17.104 by adding ACTION: paragraph (d) to read as follows: PART 52—SOLICITATION PROVISIONS Final rule. AND CONTRACT CLAUSES 17.104 General. SUMMARY: The Civilian Agency 52.213–4 [Amended] Acquisition Council and the Defense * * * * * Acquisition Regulations Council (d) The termination for convenience 9. Amend section 52.213–4 by (Councils) have agreed on a final rule procedure may apply to any revising the date of the clause to read amending the Federal Acquisition Government contract, including ‘‘(7/02)’’; and by removing from Regulation (FAR) to incorporate policies multiyear contracts. As contrasted with paragraph (a)(2)(v) ‘‘(Dec 1998)’’ and for disputes in schedule contracts and cancellation, termination can be effected adding ‘‘7/02’’ in its place. the handling of incidental items, and to at any time during the life of the 10. Amend section 52.233–1 by remove the requirement to notify GSA contract (cancellation is effected revising the date and paragraph (c) of when a schedule contractor refuses to between fiscal years) and can be for the the clause; and by revising the honor an order placed by a Government total quantity or partial quantity (where introductory paragraph of Alternate I to contractor. as cancellation must be for all read as follows: subsequent fiscal years’ quantities). DATES: Effective Date: July 29, 2002. 52.233–1 Disputes. FOR FURTHER INFORMATION CONTACT: The PART 31—CONTRACT COST * * * * * FAR Secretariat, Room 4035, GS PRINCIPLES AND PROCEDURES Building, Washington, DC, 20405, (202) Disputes (7/02) 501–4755, for information pertaining to 31.205–47 [Amended] * * * * * status or publication schedules. For 5. Amend section 31.205–47 in (c) Claim, as used in this clause, means a clarification of content, contact Ms. paragraph (f)(1) by removing ‘‘(see written demand or written assertion by one Linda Nelson, Procurement Analyst, at 33.201)’’ and adding ‘‘(see 2.101)’’ in its of the contracting parties seeking, as a matter (202) 501–1900. Please cite FAC 2001– place. of right, the payment of money in a sum 08, FAR case 1999–614.
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SUPPLEMENTARY INFORMATION: 33.214)’’), the language should be 8.401 General. revised to cite the policy statement as it A. Background * * * * * is set forth in FAR 33.204, that ADR (d) For administrative convenience, DoD, GSA, and NASA published a should be used ‘‘to the maximum extent an ordering office contracting officer proposed rule in the Federal Register at practicable.’’ The respondent further may add items not on the Federal 65 FR 79702, December 19, 2000. Nine suggested that either FAR 33.204 be Supply Schedule (also referred to as respondents submitted comments in cited alone, or that 33.204 be cited in open market items) to a Federal Supply response to the Federal Register notice. addition to 33.214. Since the language Schedule blanket purchase agreement The public comments were received in FAR 33.204 speaks to policy (BPA) or an individual task or delivery from contractors, professional regarding the use of ADR, while 33.214 order only if— associations, and Federal agencies. provides additional information (1) All applicable acquisition Clarifying revisions have been made to regarding ADR, the Councils agreed FAR 8.401(d) and 8.405–7(d) of the rule regulations pertaining to the purchase of that, for clarity, both citations be the items not on the Federal Supply as a result of the public comments. A included in the final rule, and that the summary of the significant comments Schedule have been followed (e.g., language in FAR 8.405–7(d) be revised. publicizing (Part 5), competition and concerns expressed by respondents This is not a significant regulatory is summarized below. requirements (Part 6), acquisition of action, and therefore, was not subject to • Addition of Open Market, commercial items (Part 12), contracting review under Section 6(b) of Executive Noncontract Items on a Schedule Order. methods (Parts 13, 14, and 15), and Some respondents believed that the Order 12866, Regulatory Planning and small business programs (Part 19)); Review, dated September 30, 1993. This intent regarding the incorporation of (2) The ordering office contracting rule is not a major rule under 5 U.S.C. open market, noncontract items on a officer has determined the price for the 804. schedule order needed further items not on the Federal Supply clarification and recommended B. Regulatory Flexibility Act Schedule is fair and reasonable; alternative language. The Councils The Department of Defense, the (3) The items are clearly labeled on agreed that absent a definition of ‘‘open the order as items not on the Federal market’’ or ‘‘noncontract’’ items in the General Services Administration, and the National Aeronautics and Space Supply Schedule; and FAR further clarification is needed. (4) All clauses applicable to items not Accordingly, it has substituted the Administration certify that this final rule will not have a significant on the Federal Supply Schedule are expression ‘‘items not on the Federal included in the order. Supply Schedule’’ to best characterize economic impact on a substantial what these items mean. number of small entities within the 3. Revise section 8.405–7 to read as • Inclusion of FAR Part 19 in the meaning of the Regulatory Flexibility follows: Listing of Applicable Acquisition Act, 5 U.S.C. 601, et seq., because the 8.405–7 Disputes. Regulations. One respondent expressed rule addresses internal Government concern regarding the omission of a administrative procedures and does not (a) Disputes pertaining to the reference to FAR Part 19, Small impose any additional requirements on performance of orders under a schedule Business Programs, in the proposed Government offerors or contractors. contract. (1) Under the Disputes clause language in FAR 8.401(d) for adding C. Paperwork Reduction Act of the schedule contract, the ordering open market, noncontract items to a office contracting officer may— Federal Supply Schedule BPA. The The Paperwork Reduction Act does (i) Issue final decisions on disputes respondent believes that the omission of not apply because the changes to the arising from performance of the order FAR Part 19 in the list of applicable FAR do not impose information (but see paragraph (b) of this section); or acquisition regulations an agency must collection requirements that require the (ii) Refer the dispute to the schedule follow will allow ordering offices to approval of the Office of Management contracting officer. and Budget under 44 U.S.C. 3501, et circumvent the requirement that all (2) The ordering office contracting seq. procurements valued between $2,500 officer shall notify the schedule and $100,000 be set aside for small List of Subjects in 48 CFR Parts 8 and contracting officer promptly of any final business concerns. 51 decision. The Councils agreed that FAR Part 19 should be included in the list of Government procurement. (b) Disputes pertaining to the terms applicable regulations in FAR and conditions of schedule contracts. Dated: June 19, 2002. The ordering office contracting officer 8.401(d)(1). Even though FAR Al Matera, 13.003(b)(1) addresses small business shall refer all disputes that relate to the Director, Acquisition Policy Division. set-asides for acquisitions above the contract terms and conditions to the micro-purchase threshold, the inclusion Therefore, DoD, GSA, and NASA schedule contracting officer for of FAR Part 19, in addition to FAR Part amend 48 CFR parts 8 and 51 as set resolution under the Disputes clause of 13, further emphasizes that ordering forth below: the contract and notify the schedule offices must consider small business 1. The authority citation for 48 CFR contractor of the referral. programs when acquiring items not on parts 8 and 51 continues to read as (c) Appeals. Contractors may appeal the Federal Supply Schedule. follows: final decisions to either the Board of • FAR Reference to Alternative Contract Appeals servicing the agency Authority: 40 U.S.C. 486(c); 10 U.S.C. that issued the final decision or the U.S. Dispute Resolution (ADR) Procedures chapter 137; and 42 U.S.C. 2473(c). for Schedule Disputes. One respondent Court of Federal Claims. suggested that in lieu of the proposed PART 8—REQUIRED SOURCES OF (d) Alternative dispute resolution. The language in FAR 8.405–7(d) (‘‘The SUPPLIES AND SERVICES contracting officer should use the contracting officer should use the alternative dispute resolution (ADR) alternative dispute resolution (ADR) 2. Amend section 8.401 by adding procedures, to the maximum extent procedures, when appropriate (see paragraph (d) to read as follows: practicable (see 33.204 and 33.214).
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PART 51—USE OF GOVERNMENT • Remove the numerous ceilings developing the final rule. A discussion SOURCES BY CONTRACTORS imposed on individual relocation cost of the major comments follows: elements; • Inadequate Analysis. One 51.103 [Amended] • Recognize the growing commercial commenter expressed the opinion that 4. Amend section 51.103 by removing practice of reimbursing relocation costs ‘‘the proposed changes to FAR 31.205– paragraph (b); and by redesignating on a lump-sum basis in certain 35 have not been adequately researched paragraph (c) as (b). situations; and the potential impact has not been • Make allowable payments for documented.’’ The commenter went on [FR Doc. 02–15941 Filed 6–26–02; 8:45 am] employment assistance for spouses and to suggest that all of the proposed BILLING CODE 6820–EP–P for increased employee income and changes, except for the lump-sum FICA taxes incident to allowable payment option, have been carefully considered by the FAR drafters in the DEPARTMENT OF DEFENSE reimbursed relocation costs; • Increase the ceiling for allowable past and that those previous decisions GENERAL SERVICES miscellaneous relocation costs; and should not be overturned lightly and ADMINISTRATION • Make a number of editorial changes. without thorough research and The final rule amends the FAR to— documentation that demonstrate how NATIONAL AERONAUTICS AND • Increase the limit for miscellaneous the conditions have changed to make SPACE ADMINISTRATION expenses when a lump-sum approach is previously rejected proposed changes used. The current FAR requires the now acceptable. In a related comment, another commenter cautioned that ‘‘the 48 CFR Part 31 reimbursement of miscellaneous expenses to be limited to actual councils should carefully review the expenses or $1,000 (if the lump-sum information provided in response to the [FAC 2001–08; FAR Case 1997–032; Item questions directed to industry III] approach is used). The proposed rule removed the $1,000 limitation in its respondents to determine that the administrative time and cost savings entirety. To reduce the Government’s RIN 9000–AH96 will offset increased costs before risk in this area, the final rule maintains eliminating the ceilings.’’ Federal Acquisition Regulation; a ceiling for miscellaneous expenses Response to Comments: As an integral Relocation Costs when a contractor uses the lump-sum part of its review of the public payment method, but increases the limit comments submitted in response to this AGENCIES: Department of Defense (DoD), from $1,000 to $5,000. The cost General Services Administration (GSA), proposed rule, current industry principle continues to have no ceiling relocation practices were carefully and National Aeronautics and Space for miscellaneous expenses when Administration (NASA). analyzed (primarily using data compiled reimbursement is based on actual by the ERC in its 1998 report entitled ACTION: Final rule. expenses; ‘‘Relocation Assistance: • Add two new categories of SUMMARY: The Civilian Agency Transferred Employees’’), together allowable relocation costs. Consistent Acquisition Council and the Defense with the past regulatory history of the with the proposed rule, the final rule Acquisition Regulations Council relocation cost principle. makes allowable two categories of • (Councils) have agreed on a final rule Disagree With Removing Ceilings. expenses that are currently unallowable: amending the Federal Acquisition Four commenters opposed the removal (1) Payments for increased employee Regulation (FAR) ‘‘relocation costs’’ cost of the current ceilings on individual income and FICA taxes incident to principle by making allowable relocation cost elements, while two of allowable reimbursed relocations costs, payments for spouse employment them added that ‘‘if the current and (2) payments for spouse employee assistance and for increased employee limitations are not adequate, they assistance. Since contractors incur these income and Federal Insurance should be adjusted but not eliminated.’’ types of costs in a good faith effort to Contributions Act (FICA) (26 U.S.C. These two commenters disagreed with keep transferred employees from being chapter 21) taxes incident to allowable the Federal Register justification that adversely affected by the relocation, it reimbursed relocation costs, increasing the ‘‘ceilings represent unnecessary appears equitable to reimburse the ceiling for allowance of micromanagement of contractor contractors for these types of costs. In miscellaneous costs of relocation, and business practices.’’ One stated that addition, the Employee Relocation making a number of editorial changes. ‘‘cost ceilings are a means of controlling Council (ERC) data showed that it is a business expenses reimbursed with DATES: Effective Date: July 29, 2002. common industry practice to reimburse taxpayer dollars,’’ and the other argued FOR FURTHER INFORMATION CONTACT: The relocating employees for both of these that ‘‘the ceilings merely represent the FAR Secretariat, Room 4035, GS costs; and maximum the Government believes is Building, Washington, DC, 20405, (202) • Make a number of editorial changes, reasonable.’’ The commenter continued: 501–4755, for information pertaining to including revising the ‘‘compensation ‘‘The FAR ceilings were initially status or publication schedules. For for personal services’’ cost principle at implemented to assure that clarification of content, contact Mr. FAR 31.205–6(e)(2) to clarify that the reasonableness determinations were Jeremy Olson at (202) 501–3221. Please differential allowances paid to consistently applied to all contractors cite FAC 2001–08, FAR case 1997–032. compensate for increased taxes on and that unreasonable costs would not SUPPLEMENTARY INFORMATION: employee compensation is unallowable, be paid because the cost principle is too but that the payments to compensate for general or unenforceable.’’ A. Background increased taxes incident to allowable One commenter stated that ‘‘the DoD, GSA, and NASA published a reimbursed relocation costs is ceilings * * * are necessary to protect proposed rule in the Federal Register at allowable. the Government from liability for 64 FR 28330, May 25, 1999, that revised Twenty-two respondents submitted reimbursement of excessive costs.’’ the cost principle at FAR 31.205–35, public comments. The Councils Another maintained that since the 14 Relocation costs, to— considered all comments when percent limitation on closing costs and
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the continuing costs of ownership of a reasonable relocation costs without $1,000 is already permitted) would former residence (FAR 31.205–35(a)(3) ready access to the necessary make it virtually impossible to assure and (4)) and the 5 percent limitation on information to make this determination. that the lump-sum payment does not costs for purchasing a new home (FAR By performing the necessary market include unallowable costs.’’ While not 31.205–35(a)(6)(ii)) were based on research and setting reasonable ceilings directly opposing an expanded use of commercial industry standards, there is in this cost principle, the Government the lump-sum approach, three other no justification for their removal. avoids the inefficient process of having commenters expressed concerns that ‘‘in Another stated that these 14 percent and hundreds of different procurement the absence of a database that 5 percent caps appeared reasonable, but personnel performing various levels of establishes what constitutes reasonable added that waivers ‘‘may be acceptable research and making inconsistent relocation expenses in various locations, on a case-by-case basis.’’ determinations. The ceilings should be contracting officers will have difficulty Response to Comments: Three set at a level that allows contractors to negotiating advance agreements on a alternatives were evaluated during be reimbursed for reasonable relocation broad range of relocation expenses.’’ consideration of this issue: removal of costs that are not unallowable. One commenter added: ‘‘Without some the ceilings, adjustment of the ceilings, Alternative 3—Retain Current Ceilings objective data, it is unreasonable to and retention of the current ceilings. but Reevaluate. impose the burden of determining The alternatives are discussed below: The basis for this alternative is that reasonableness on the contracting Alternative 1—Remove Ceilings as the rationale supporting a shift either to officer.’’ Reflected in the Proposed Rule. The ERC eliminate or to adjust the ceilings is Response to Comments: Review of the data indicated that some of the current incomplete, and a reasoned policy ERC data found that there is no current FAR ceilings on individual relocation change cannot be made at this time. industry practice of using lump-sum cost elements were too low. One There is sufficient information to justify reimbursements for the purchase or sale alternative to eliminating this evaluation of whether a policy change of a home. It appears inappropriate for relationship is for the ceilings to be should be considered, but there is not the cost principle to recognize lump- eliminated as shown in the proposed sufficient information to determine sum payments for these types of rule, rather than adjusted. This what a better policy might be. This is relocation costs if there is no evidence alternative would be a fundamental shift the approach adopted by the FAR of such an industry practice. in how the Government evaluates the Council. Additionally, an industry association allowability of contractor relocation • Lump-Sum Approach. commenter noted that in its survey of costs. An argument can be made that Lump-Sum Approach Would Result in member companies, ‘‘no respondent this change is consistent with promoting Savings. Nine commenters argued that used the lump-sum approach on all greater acceptance of commercial an expanded lump-sum approach would relocation costs.’’ Accordingly, the practices. Under this approach, the result in significant savings for broad lump-sum reimbursement Government would place greater contractors and the Government. One approach was removed from the rule. reliance upon contractors’ individual stated that at a Government business The lump-sum reimbursement corporate relocation policies to limit segment using a lump-sum approach, approach covering miscellaneous such costs to reasonable amounts, rather instead of an actual and reasonable expenses only that is currently in the than continuing to micromanage method, savings achieved for the FAR was retained, but the ceiling contractor business practices. This temporary living portion of relocation amount was increased from $1,000 to would involve a systems approach costs averaged $4,432 per relocated $5,000. An unlimited lump-sum for requiring greater use of professional employee for a total savings on miscellaneous expenses could easily judgment by our auditors and Government contracts of almost become a sub rosa vehicle for contracting officers to ensure that $200,000 per year. Similarly, another reimbursing unallowable costs (such as relocation costs in total are reasonable, indicated that it is experiencing savings a loss on the sale of a home) or for which is more difficult than utilizing a of $6.4 million per year by offering a awarding a hidden bonus to the series of caps to determine cost lump-sum option for reimbursement of relocating employee. While some allowability. This alternative would temporary living expenses to relocated commenters contend that contractors tend to satisfy those who believe that employees in its commercial segments. and the Government will share in cost the various ceilings on individual This commenter projected that it has reductions through use of lump-sum relocation cost elements have made the ‘‘the potential to save an additional $1 payments, others believe the opposite current cost principle unnecessarily million per year by offering the same will occur. No convincing data were detailed. option within its businesses that sell found one way or the other. This is Alternative 2—Retain Ceilings With goods and services to the U. S. further bolstered by indications from Appropriate Adjustments. This Government.’’ Another commenter ERC that companies use lump-sum alternative is more consistent with the indicated an estimated saving of reimbursements primarily to improve argument that the rationale behind the between $400,000 and $500,000 per employee morale and to reduce numerous past decisions to retain the year due to the lump-sum relocation administrative costs. The net cost ceilings was sound. That is, (1) industry option. impact is unclear. This issue may be practice varies widely, (2) Disagree With Lump-Sum Approach. pursued again in a separate FAR case to reasonableness determinations should One commenter objected ‘‘to the lump- determine if there is a clear answer be consistently applied to all sum payment as proposed because it justifying adoption of a broader lump- contractors, and (3) the cost principle would increase administrative cost with sum approach. without ceilings is too general and no evident benefit for the Government.’’ • Remove Mandatory Advance unenforceable. Further, the Federal The commenter added that ‘‘few Agreement Requirement for Lump-Sum procurement process argues for the contractors use a lump-sum approach Approach. Eight commenters retention of the ceilings. Without these for total relocation cost,’’ and expressed recommended that the requirement for stated ceilings, contracting officers concern that ‘‘expanding the lump-sum an advance agreement with the would be put in the unenviable position approach beyond miscellaneous Government prior to using the lump- of determining what constitutes expenses (for which a lump-sum up to sum payment option be eliminated.
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Some argued that ‘‘the requirement for • Delete FAR 31.205–35 (a)(1) thru intention to grant tax relief to contractor an advance agreement is not necessary’’ (a)(9). Three commenters, noting that employees, but that it was the intent to because ‘‘lump-sum payments are an the proposed rule would remove the grant such relief to Federal employees accepted commercial practice’’ and ‘‘are specific references to mortgage interest in order to reduce the out-of-pocket more cost effective than actual cost differential and rental differential costs heretofore being borne by Federal tracking.’’ One added that ‘‘at times, payments, expressed concern ‘‘that employees.’’ That commenter also whether or not an advance agreement is Government auditors may assert that pointed out that past Cost Principles executed depends on subjective rather these costs are now unallowable, Committee reports have concluded tax than objective factors.’’ It added that notwithstanding the statements gross-ups are actually a compensation ‘‘inconsistent actions concerning the pertaining to them included in the cost, and not a relocation cost. Finally, execution of an advance agreement on background section of this proposed the commenter disagreed ‘‘with the lump-sum payments could put rule.’’ To avoid such disputes over these theory that contractors should be companies on an unequal footing when and other relocation costs not reimbursed for these types of costs bidding on Government contracts.’’ specifically mentioned under paragraph merely because Federal employees are.’’ Another observed that ‘‘formal (a), they suggested that the whole list of In support of this position, the acceptance by the contracting officer of allowable relocation costs at FAR commenter cited OFPP’s 1986 ‘‘Study of what is likely to be a case-by-case 31.205–35(a) (1) thru (a)(9) be deleted. Relocation Costs,’’ which found that implementation of lump-sums is not Response to Comments: The Councils ‘‘the policies governing the payment for consistent with streamlining or agree that removing the specific contractor relocation should remain acceptance of commercial practices.’’ references to mortgage interest separate from the policies governing the Another stated that the mandatory differential and rental differential relocation benefits paid to Federal advance agreement requirement ‘‘is payments from the cost principle could employees.’’ contrary to the spirit of Acquisition create confusion about the future Response to Comments: The ERC data Reform’’ and ‘‘creates another allowability of such costs, and they have showed that it is a common industry administrative burden.’’ added both of these types of payments practice to reimburse relocating Response to Comments: The original back into the paragraph (a) list of employees for both of these costs. The rationale for including a mandatory allowable relocation costs. The Councils Councils believe they are bona fide advance agreement requirement in the are also convinced there is great benefit relocation costs and that it is fair to proposed rule was to give the in making it absolutely clear that the make them allowable now on Government additional control over the listed types of relocation costs in Government contracts, just as it was fair broadly worded lump-sum guidance. paragraph (a) are allowable and do not to begin reimbursing Federal employees think this list should be deleted. for them. However, we have revised paragraph • Agree/Disagree With Making • Apparent Conflict Between Tax (b)(2) of FAR 31.205–35 to delete the Spouse Employment Assistance Gross-Ups and Taxes Cost Principle. mandatory advance agreement Payments and Tax Gross-Ups One commenter noted an apparent requirement, since we have removed the Allowable. Eight commenters agreed conflict between the new language lump-sum approach from the rule. • with the equitable treatment rationale in allowing tax gross-ups for reimbursed Disagree/Agree With Removing the Federal Register for making two relocation costs and the taxes cost Mortgage Interest Differential and new categories of relocation costs principle provision that makes Federal Rental Differential Payments. Two allowable: (1) Payments for spouse income taxes unallowable (FAR 31.205– commenters saw no reason for removing employment assistance, and (2) 41(b)(1)). the specific references to mortgage payments for increased employee Response to Comments: The Councils interest differential and rental income and FICA taxes incident to do not see a conflict. The taxes cost differential payments currently found at allowable reimbursed relocation costs principle makes contractor Federal paragraphs (a)(7) and (a)(8) of FAR (commonly referred to as ‘‘tax gross- income tax payments unallowable, not 31.205–35. One stated: ‘‘Our survey ups’’). Several commenters ‘‘applauded’’ contractor reimbursements to an data, along with analysis of published this change which, as one commenter employee for the relocating employee’s relocation survey data, did not put it, ‘‘acknowledges that contractors increased tax liability. demonstrate any significant difference find it necessary to make such payments • Federal Employees Do Not Get Tax in conditions that exist now versus to avoid unfairly penalizing the Gross-Ups on FICA. One commenter conditions that existed when these relocating employee.’’ noted that ‘‘Government employees are provisions were included in the cost On the other hand, another reimbursed income taxes on relocation principle. Therefore, we cannot commenter found it ‘‘illogical’’ to use reimbursements, but not FICA. determine the basis for the statement the ‘‘good faith effort’’ rationale to allow Employees, particularly employees of that coverage of these types of costs is these costs, but not the other private contractors, theoretically receive no longer needed.’’ Conversely, another unallowable relocation costs. However, a future benefit from increased FICA commenter expressed its belief that after noting that ‘‘there is some evidence contributions. Therefore, reimbursement ‘‘eliminating paragraphs FAR 31.205– that spousal employment assistance is of FICA could be considered 35(a)(7) and (8) will provide the becoming a general industry practice,’’ inappropriate, and we would advantage of simplification without that commenter stated that it does ‘‘not recommend reimbursement of income adding costs to the Government.’’ object to the reconsideration of the taxes, but not FICA.’’ Response to Comments: Although allowability of spouse employment Response to Comments: The Councils interest rates are currently very low and assistance (subject to reasonable disagree with this recommendation. the impact of interest differential is now limitations) after adequate research and They do not believe the allowability of very limited, interest rates could analysis is performed.’’ contractor relocation costs must always increase in the future. We have added Regarding tax gross-ups, that parallel the treatment afforded both of these types of payments back commenter quoted from a 1985 Cost relocating Federal employees; nor do into the paragraph (a) list of allowable Principles Committee report: ‘‘We they see uncertain future benefits as a relocation costs. believe that there was no Congressional valid reason for excluding FICA from
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allowable contractor tax gross-ups. The Government; but, they have no way to and Budget under 44 U.S.C. 3501, et Councils believe this is a bona fide quantify these anticipated impacts. seq. relocation cost, which should be made They do not consider an increase in the List of Subjects in 48 CFR Part 31 allowable. Government’s administrative effort, by • Administrative Costs Will Decrease/ itself, to be a valid reason for retaining Government procurement. Increase. Thirteen commenters agreed the existing FAR language. • Dated: June 19, 2002. with the Federal Register rationale that Relocation Costs Will Increase. Al Matera, the proposed rule would reduce Three commenters argued against the administrative costs. As one commenter proposed rule because they believed it Director, Acquisition Policy Division. put it: ‘‘We believe that the proposed will result in higher relocation costs Therefore, DoD, GSA, and NASA changes would result in savings to both being claimed under Government amend 48 CFR part 31 as set forth contractors and the Government by contracts. Based on its own analysis of below: reducing or eliminating a number of more than 50 Government contractors, burdensome administrative processes. one commenter projected that ‘‘the PART 31—CONTRACT COST For instance, with the elimination of proposed rule may result in more than PRINCIPLES AND PROCEDURES thresholds, contractors would no longer $130 million in additional relocation 1. The authority citation for 48 CFR need to track applicable costs separately costs claimed by Government part 31 continues to read as follows: and compare them to artificial contractors annually.’’ However, thresholds. Detailed training on how to another commenter countered that Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c). apply the thresholds would no longer be ‘‘concerns about added costs or required. We believe that, to the extent potential savings that may result from a 2. Revise paragraph (e)(2) of section that contractors find it otherwise policy change should be irrelevant to 31.205–6 to read as follows: appropriate and feasible to adopt lump- the objective at hand; i.e., ensuring that 31.205–6 Compensation for personal sum practices, record-keeping the Government pays fair and services. requirements would be reduced for both reasonable expenses under the contractor and the relocating noncompetitive and cost reimbursable * * * * * (e)(1) * * * employee. Finally, internal and external contracts.’’ oversight requirements would be Response to Comments: While (2) Differential allowances for streamlined.’’ relocation costs claimed on Government additional Federal, State, or local In contrast, two commenters contracts may increase if the proposed income taxes resulting from domestic maintained that administrative costs rule is adopted, that is not a valid assignments are unallowable. (However, would increase under the proposed rule. argument for retaining the existing FAR payments for increased employee One argued that ‘‘audit effort will language. The Councils believe the cost income or Federal Insurance necessarily increase (as will the principles should ensure that Contributions Act taxes incident to contractor support of the increased contractors are treated fairly, consistent allowable reimbursed relocation costs audit effort) since instead of having with sound public policy. The cost are allowable under 31.205–35(a)(10).) stated reasonableness limitations, the principles should not be used as a cost * * * * * auditor will now be forced to evaluate containment mechanism. 3. Revise paragraphs (a), (b), (c), and individual contractor systems for This is not a significant regulatory (f)(1) of section 31.205–35 to read as assuring reasonableness.’’ The action, and therefore, was not subject to follows: commenter added that ‘‘using a broad review under Section 6(b) of Executive 31.205–35 Relocation costs. criterion such as reasonableness Order 12866, Regulatory Planning and naturally leads to differences of Review, dated September 30, 1993. This (a) Relocation costs are costs incident opinion,’’ which ‘‘will result in rule is not a major rule under 5 U.S.C. to the permanent change of assigned increased disputes which will increase 804. work location (for a period of 12 months the effort required by contractors, or more) of an existing employee or contracting officers, and the courts to B. Regulatory Flexibility Act upon recruitment of a new employee. settle these disputes.’’ Finally, the The Department of Defense, the The following types of relocation costs commenter stated: ‘‘Our survey of General Services Administration, and are allowable as noted, subject to the Government contractors found that the the National Aeronautics and Space limitations in paragraphs (b) and (f) of administrative cost incurred by Administration certify that this final this subsection: contractors to comply with the rule will not have a significant (1) Costs of travel of the employee and requirements of FAR 31.205–35 is economic impact on a substantial members of the employee’s immediate immaterial. Any potential savings number of small entities within the family (see 31.205–46) and would certainly be offset by the meaning of the Regulatory Flexibility transportation of the household and administrative cost involved in Act, 5 U.S.C. 601, et seq., because most personal effects to the new location. obtaining an advance agreement for the contracts awarded to small entities use (2) Costs of finding a new home, such use of lump-sum payments.’’ The other simplified acquisition procedures or are as advance trips by the employee or the commenter expressed concern that awarded on a competitive, fixed-price spouse, or both, to locate living quarters, ‘‘without the ceilings, we anticipate basis and do not require application of and temporary lodging during the contracting officers will need to perform the cost principles contained in this transition period for the employee and a greater amount of analysis to rule. members of the employee’s immediate determine the reasonableness of a family. contractor’s proposed relocation costs.’’ C. Paperwork Reduction Act (3) Closing costs incident to the Response to Comments: The Councils The Paperwork Reduction Act does disposition of the actual residence expect that adoption of the rule will not apply because the changes to the owned by the employee when notified result in reduced administrative burden FAR do not impose information of the transfer (e.g., brokerage fees, legal for contractors and increased collection requirements that require the fees, appraisal fees, points, and finance administrative burden for the approval of the Office of Management charges), except that these costs, when
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added to the costs described in (10) Payments for increased employee DEPARTMENT OF DEFENSE paragraph (a)(4) of this subsection, shall income or Federal Insurance not exceed 14 percent of the sales price Contributions Act (26 U.S.C. chapter 21) GENERAL SERVICES of the property sold. taxes incident to allowable reimbursed ADMINISTRATION (4) Continuing costs of ownership of relocation costs. NATIONAL AERONAUTICS AND the vacant former actual residence being (11) Payments for spouse employment SPACE ADMINISTRATION sold, such as maintenance of building assistance. and grounds (exclusive of fixing up expenses), utilities, taxes, property (b) The costs described in paragraph 48 CFR Part 52 (a) of this subsection must also meet the insurance, and mortgage interest, after [FAC 2001–08; Item IV] the settlement date or lease date of a following criteria to be considered new permanent residence, except that allowable: Federal Acquisition Regulation; these costs, when added to the costs (1) The move must be for the benefit Technical Amendments described in paragraph (a)(3) of this of the employer. subsection, shall not exceed 14 percent AGENCIES: Department of Defense (DoD), (2) Reimbursement must be in General Services Administration (GSA), of the sales price of the property sold. accordance with an established policy (5) Other necessary and reasonable and National Aeronautics and Space or practice that is consistently followed Administration (NASA). expenses normally incident to by the employer and is designed to ACTION: Final rule. relocation, such as disconnecting and motivate employees to relocate connecting household appliances; promptly and economically. SUMMARY: This document makes automobile registration; driver’s license amendments to the Federal Acquisition and use taxes; cutting and fitting rugs, (3) The costs must not be otherwise Regulation in order to update references draperies, and curtains; forfeited utility unallowable under subpart 31.2. and make editorial changes. fees and deposits; and purchase of (4) Amounts to be reimbursed shall DATES: insurance against damage to or loss of not exceed the employee’s actual Effective Date: July 29, 2002. personal property while in transit. expenses, except that for miscellaneous FOR FURTHER INFORMATION CONTACT: The (6) Costs incident to acquiring a home costs of the type discussed in paragraph FAR Secretariat, Room 4035, GS in the new work location, except that— (a)(5) of this subsection, a flat amount, Building, Washington, DC 20405, (202) (i) These costs are not allowable for not to exceed $5,000, may be allowed in 501–4755. Please cite FAC 2001–08, existing employees or newly recruited lieu of actual costs. Technical Amendments. employees who were not homeowners (c) The following types of costs are List of Subjects in 48 CFR Part 52 before the relocation; and unallowable: (ii) The total costs shall not exceed 5 Government procurement. percent of the purchase price of the new (1) Loss on the sale of a home. Dated: June 19, 2002. home. (2) Costs incident to acquiring a home Al Matera, (7) Mortgage interest differential in the new location as follows: Director, Acquisition Policy Division. payments, except that these costs are (i) Real estate brokers’ fees and Therefore, DoD, GSA, and NASA not allowable for existing or newly commissions. amend 48 CFR part 52 as set forth recruited employees who, before the below: relocation, were not homeowners and (ii) Costs of litigation. the total payments are limited to an (iii) Real and personal property PART 52—SOLICITATION PROVISIONS amount determined as follows: insurance against damage or loss of AND CONTRACT CLAUSES (i) The difference between the property. 1. The authority citation for 48 CFR mortgage interest rates of the old and (iv) Mortgage life insurance. new residences times the current part 52 continues to read as follows: balance of the old mortgage times 3 (v) Owner’s title policy insurance Authority: 40 U.S.C. 486(c); 10 U.S.C. years. when such insurance was not chapter 137; and 42 U.S.C. 2473(c). previously carried by the employee on (ii) When mortgage differential 52.202–1 [Amended] payments are made on a lump-sum basis the old residence. (However, the cost of 2. Amend section 52.202–1 by and the employee leaves or is a mortgage title policy is allowable.) removing from Alternate I ‘‘(Mar 2001)’’ transferred again in less than 3 years, (vi) Property taxes and operating or and adding ‘‘(May 2001)’’ in its place. the amount initially recognized shall be maintenance costs. proportionately adjusted to reflect (3) Continuing mortgage principal 52.212–3 [Amended] payments only for the actual time of the payments on a residence being sold. 3. Amend section 52.212–3 in the relocation. (4) Costs incident to furnishing equity provision heading by removing ‘‘(May (8) Rental differential payments or nonequity loans to employees or 2002)’’ and adding ‘‘(July 2002)’’ in its covering situations where relocated making arrangements with lenders for place; removing from paragraph employees retain ownership of a employees to obtain lower-than-market (c)(10)(i) of the provision ‘‘principal vacated home in the old location and rate mortgage loans. place of ownership’’ and adding rent at the new location. The rented ‘‘principal office’’ in its place; and * * * * * quarters at the new location must be removing from the first sentence of comparable to those vacated, and the (f) * * * paragraph (c)(10)(ii) ‘‘on the joint’’ and allowable differential payments may not (1) The term of employment is 12 adding ‘‘in the joint’’ in its place. exceed the actual rental costs for the months or more; new home, less the fair market rent for 52.225–11 [Amended] the vacated home times 3 years. * * * * * 4. Amend section 52.225–11 in the (9) Costs of canceling an unexpired [FR Doc. 02–15942 Filed 6–26–02; 8:45 am] clause heading by removing ‘‘(May lease. BILLING CODE 6820–EP–P 2002)’’ and adding ‘‘(July 2002)’’ in its
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place; and in the third sentence of and National Aeronautics and Space further information regarding these paragraph (b)(1) of the clause by Administration (NASA). rules by referring to FAC 2001–08 removing ‘‘and Balance of Payments ACTION: Small Entity Compliance Guide. which precedes this document. These Program’’. documents are also available via the [FR Doc. 02–15943 Filed 6–26–02; 8:45 am] SUMMARY: This document is issued Internet at http://www.arnet.gov/far. BILLING CODE 6820–EP–P under the joint authority of the FOR FURTHER INFORMATION CONTACT: Secretary of Defense, the Administrator Laurie Duarte, FAR Secretariat, (202) of General Services and the 501–4225. For clarification of content, DEPARTMENT OF DEFENSE Administrator for the National contact the analyst whose name appears Aeronautics and Space Administration. GENERAL SERVICES This Small Entity Compliance Guide has in the table below. ADMINISTRATION been prepared in accordance with Section 212 of the Small Business NATIONAL AERONAUTICS AND Regulatory Enforcement Fairness Act of SPACE ADMINISTRATION 1996 (Public Law 104–121). It consists of a summary of rules appearing in 48 CFR Chapter 1 Federal Acquisition Circular (FAC) Federal Acquisition Regulation; Small 2001–08 which amend the FAR. An Entity Compliance Guide asterisk (*) next to a rule indicates that a regulatory flexibility analysis has been AGENCIES: Department of Defense (DoD), prepared in accordance with 5 U.S.C. General Services Administration (GSA), 604. Interested parties may obtain
LIST OF RULES IN FAC 2001–08
Item Subject FAR case Analyst
I ...... Definition of ‘‘Claim’’ and Terms Relating to Termination ...... 2000–406 Klein. II ...... Federal Supply Schedule Order Disputes and Incidental Items ...... 1999–614 Nelson. III ...... Relocation Costs ...... 1997–032 Olson. IV ...... Technical Amendments
Item I—Definition of ‘‘Claim’’ and convenience’’ that was moved from FAR or that are required by a contract clause Terms Relating to Termination (FAR 17.103; to use cost principles for the Case 2000–406) • Revises FAR 33.213(a) to clarify the determination, negotiation, or allowance The purpose of this final rule is to distinction between claims ‘‘arising of costs. clarify the applicability of definitions, under a contract’’ and claims ‘‘relating The relocation cost principle to a contract’’; addresses the allowability of costs eliminate redundant or conflicting • definitions, and streamline the process Revises the definition of ‘‘claim’’ in incurred by an existing contractor for locating definitions. This rule is not the FAR clause at 52.233–1 to conform employee incident to the permanent to the definition at FAR 2.101; and change of the employee’s assigned work intended to change the meaning of any • FAR text or clause. Movement of Makes other editorial revisions for location for a period of 12 months or various definitions to FAR 2.101 is not clarity. more, or upon recruitment of a new employee. The final rule revises the cost intended to change the operation of the Item II—Federal Supply Schedule principle by making allowable cost principles and, specifically, the Order Disputes and Incidental Items payments for spouse employment movement of the definition of ‘‘claim’’ (FAR Case 1999–614) to FAR 2.101 is not intended to change assistance and for increased employee This final rule amends the FAR to add the scope or context of FAR 31.205– income and Federal Insurance policies on disputes and incidental 47(f)(1). Contributions Act taxes incident to items under Federal Supply Schedule This final rule— allowable reimbursed relocation costs, contracts and to remove the requirement • Revises and moves the definitions increasing the ceiling for allowance of to notify GSA when a schedule of ‘‘claim’’ from FAR 33.201; miscellaneous costs of relocation, and contractor refuses to honor an order ‘‘continued portion of the contract,’’ making a number of editorial changes. placed by a Government contractor. ‘‘partial termination,’’ ‘‘terminated This rule affects all ordering offices Item IV—Technical Amendments portion of the contract’’ from FAR acquiring supplies or services subject to 49.001; and ‘‘termination for These amendments update sections the procedures of FAR Subpart 8.4. convenience’’ from FAR 17.103; and make editorial changes at FAR • Adds a definition of ‘‘termination Item III—Relocation Costs (FAR Case 52.202–1, 52.212–3, and 52.225–11. for default’’ at FAR 2.101 and a new 1997–032) Dated: June 19, 2002. paragraph (d) at FAR 17.104 that This final rule amends the relocation Al Matera, explains the distinction between cost principle at FAR 31.205–35. The Director, Acquisition Policy Division. ‘‘termination for convenience’’ and rule will only affect contracting officers [FR Doc. 02–15944 Filed 6–26–02; 8:45 am] ‘‘cancellation’’ that was deleted from the that price contracts using cost analysis, BILLING CODE 6820–EP–P definition of ‘‘termination for
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Part VI
Department of Defense General Services Administration National Aeronautics and Space Administration 48 CFR Parts 39 and 52 Federal Acquisition Regulation; FAR Case 2001–033, Section 508 Contract Clause; Proposed Rule
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DEPARTMENT OF DEFENSE SUPPLEMENTARY INFORMATION: Section certification unless it is required by 508 of the Rehabilitation Act of 1973 statute, or approved on an exception GENERAL SERVICES requires that when Federal departments basis by the agency head after the senior ADMINISTRATION or agencies develop, procure, maintain, procurement executive provides written or use electronic and information justification.) NATIONAL AERONAUTICS AND technology (EIT), they must ensure that As part of the implementation effort SPACE ADMINISTRATION the EIT allows (1) Federal employees some have suggested a need for with disabilities to have access to and additional guidance. For example, some 48 CFR Parts 39 and 52 use of information and data that is assert that the inclusion of an EIT clause comparable to the access and use of in the FAR will promote greater Federal Acquisition Regulation; FAR information and data by other Federal consistency and reduce confusion in the Case 2001–033, Section 508 Contract employees; and (2) members of the implementation of Section 508 by Clause public with disabilities seeking avoiding the proliferation of agency AGENCIES: Department of Defense (DoD), information from an agency to have specific clauses. By contrast, others General Services Administration (GSA), access to and use of information and contend that EIT standards are a and National Aeronautics and Space data that is comparable to the access ‘‘requirements issue’’ and are best Administration (NASA). and use of information and data by addressed through the statement of other members of the public who are not ACTION: Advance notice of proposed work or other specifications instead of individuals with disabilities. The a clause. rulemaking. Councils agreed to amend the Federal The Councils are seeking the SUMMARY: The Civilian Agency Acquisition Regulation (FAR) under FAR Case 1999–607, Electronic and following input to help them determine Acquisition Council and the Defense the best approach to promote more Acquisition Regulations Council Information Technology Accessibility, to implement Section 508 (see Federal consistent and effective implementation (Councils) are considering whether of Section 508. there is a need at this time for changes Register published at 66 FR 20894, April 25, 2001). The final rule became 1. Need for additional guidance. The to the Federal Acquisition Regulation or Councils ask that respondents discuss other acquisition guidance to promote effective on June 25, 2001. The FAR final rule incorporated whether additional acquisition guidance more consistent and effective standards developed by the to implement Section 508 is needed at implementation of Section 508 of the Architectural and Transportation this time. Respondents are encouraged Rehabilitation Act of 1973 and, if so, Barriers Compliance Board (also to discuss potential advantages and what specific changes are needed. The referred to as the ‘‘Access Board’’). disadvantages. Councils request that interested parties Among other things, the standards set provide comments. 2. Form of guidance. To the extent forth the technical and functional additional guidance is desired, the DATES: Interested parties should submit performance criteria for EIT Councils ask respondents to identify if comments in writing on or before accessibility. While only Federal such guidance should be in the form of August 26, 2002 to be considered in the agencies must comply with the a FAR clause, a solicitation provision, formulation of a proposed rule. requirements of Section 508; vendors other FAR coverage, or non-regulatory ADDRESSES: Submit written comments interested in selling EIT to the Federal guidance. If a clause is desirable, to—General Services Administration, government are responsible for respondents are encouraged to identify FAR Secretariat (MVP), 1800 F Street, providing products or services that meet the types of EIT purchases on which a NW, Room 4035, ATTN: Laurie Duarte, the applicable Access Board standards clause should focus (e.g., all EIT Washington, DC 20405. (and will be bound by the terms and purchases, EIT services only). The non- Submit electronic comments via the conditions of the contract into which regulatory guidance may be in the form Internet to— farnotice.2001– they enter). of reference material or frequently asked [email protected] The FAR rule implementing Section questions on the web site at http:// Please submit comments only and cite 508 does not require vendors to certify www.section508.gov. Respondents are FAR Case 2001–033, Section 508 that offered products or services comply encouraged to discuss potential Contract Clause (Notice) in all with the requirements of Section 508. advantages and disadvantages of the correspondence related to this case. Agencies are not to require such form of guidance they suggest and why FOR FURTHER INFORMATION CONTACT: The certification as a matter of policy, unless they believe other forms of guidance FAR Secretariat, Room 4035, GS they have followed the procedures set would be less beneficial or not Building, Washington, DC, 20405, at forth in (i) FAR Subpart 1.3 on agency appropriate. (202) 501–4755 for information acquisition rulemaking, implementing 3. Content of guidance. The Councils pertaining to status or publication section 22 of the Office of Federal invite respondents’ ideas regarding what schedules. The TTY Federal Relay Procurement Policy Act (OFPP Act), 41 should be included in the guidance. Number for further information is 1– U.S.C. 418b, and (ii) section 29 of the 800–877–8973. For clarification of OFPP Act, 41 U.S.C. 425, addressing Dated: June 20, 2002. content, contact Ms. Linda Nelson, contractor certification requirements. Al Matera, Procurement Analyst, at (202) 501– (Section 29(c)(2) of the OFPP Act Director, Acquisition Policy Division. 1900. Please cite FAR Case 2001–033, prohibits an executive agency from [FR Doc. 02–15976 Filed 6–26–02; 8:45 am] Section 508 Contract Clause (Notice). promulgating a regulation requiring BILLING CODE 6820–EP–P
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Reader Aids Federal Register Vol. 67, No. 124 Thursday, June 27, 2002
CUSTOMER SERVICE AND INFORMATION CFR PARTS AFFECTED DURING JUNE
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 Laws 523–5227 the revision date of each title. Presidential Documents 3 CFR 1651...... 42856 Executive orders and proclamations 523–5227 1653...... 42856 Proclamations: The United States Government Manual 523–5227 1655...... 42856 7568...... 38583 1690...... 42856 Other Services 7569...... 38585 Electronic and on-line services (voice) 523–3447 7570...... 39241 7 CFR Privacy Act Compilation 523–3187 7571...... 39595 226...... 43448 Public Laws Update Service (numbers, dates, etc.) 523–6641 7572...... 40137 271...... 41589 TTY for the deaf-and-hard-of-hearing 523–5229 7573...... 40139 272...... 41589 7574...... 42177 273...... 41589 ELECTRONIC RESEARCH Executive Orders: 275...... 41589 12345 (Revoked by 277...... 41589 World Wide Web EO 13265)...... 39841 300...... 41155 Full text of the daily Federal Register, CFR and other publications 13159 (see Notice of 301 ...... 41307, 41754, 41809, is located at: http://www.access.gpo.gov/nara June 18, 2002)...... 42181 41810 13180 (Amended by 318...... 41155 Federal Register information and research tools, including Public 13264) ...... 39243 723...... 41310 Inspection List, indexes, and links to GPO Access are located at: 13219 (See Notice of 761...... 41311 http://www.nara.gov/fedreg June 21, 2002 ...... 42703 905...... 40837 E-mail 13264...... 39243 916...... 42707 13265...... 39841 FEDREGTOC-L (Federal Register Table of Contents LISTSERV) is 927...... 39634 13266...... 42467 an open e-mail service that provides subscribers with a digital 930...... 39637 13267...... 42469 form of the Federal Register Table of Contents. The digital form 948...... 40844 of the Federal Register Table of Contents includes HTML and Administrative Orders: 955...... 41811 PDF links to the full text of each document. Notices: 981...... 41816 Notice of June 18, 989...... 42471 To join or leave, go to http://listserv.access.gpo.gov and select 2002 ...... 42181 1280...... 39249 Online mailing list archives, FEDREGTOC-L, Join or leave the list Notice of June 21, 1467...... 39254 (or change settings); then follow the instructions. 2002 ...... 42703 Proposed Rules: PENS (Public Law Electronic Notification Service) is an e-mail Presidential 319...... 40874 service that notifies subscribers of recently enacted laws. Determinations: 330...... 41868 To subscribe, go to http://hydra.gsa.gov/archives/publaws-l.html No. 2002-19 of May 911...... 40876 and select Join or leave the list (or change settings); then follow 27, 2002 ...... 39245 983...... 43045 the instructions. No. 2002-20 of May 987...... 40876 30, 2002 ...... 39247 999...... 40879 FEDREGTOC-L and PENS are mailing lists only. We cannot No. 2002-21 of June 3, 1033...... 39871 respond to specific inquiries. 2002 ...... 40833 1951...... 41869 Reference questions. Send questions and comments about the No. 2002-22 of June 3, Federal Register system to: [email protected] 2002 ...... 40835 8 CFR The Federal Register staff cannot interpret specific documents or No. 2002-23 of June 100...... 38341 regulations. 14, 2002 ...... 42705 103...... 38341, 39255 212...... 39255 5 CFR FEDERAL REGISTER PAGES AND DATE, JUNE 214...... 40581 534...... 39249 236...... 38341, 39255 38193–38340...... 3 550...... 40837 238...... 39255 38341–38582...... 4 553...... 40837 239...... 39255 38583–38840...... 5 591...... 39249 240...... 39255 38841–39240...... 6 890...... 41305 241...... 39255 39241–39594...... 7 930...... 39249 245a...... 38341 39595–39840...... 10 Proposed Rules: 264...... 40581 39841–40136...... 11 831...... 38210 274a...... 38341 40137–40580...... 12 842...... 38210 287...... 39255 40581–40832...... 13 870...... 38210 299...... 38341 40833–41154...... 14 890...... 38210 Proposed Rules: 41155–41304...... 17 1600...... 42856 214...... 40985 41305–41588...... 18 1601...... 42856 241...... 38324 41589–41808...... 19 1603...... 42856 264...... 40985 41809–42182...... 20 1604...... 42856 42183–42466...... 21 1605...... 42856 9 CFR 42467–42702...... 24 1606...... 42856 77...... 38841 42703–42980...... 25 1640...... 42856 42981–43216...... 26 1645...... 42856 10 CFR 43217–43524...... 27 1650...... 42856 72...... 39260
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170...... 42612 Proposed Rules: 23 CFR 38919 171...... 42612 50...... 38445 172...... 40149 31 CFR 430...... 38324 16 CFR Proposed Rules: Proposed Rules: Proposed Rules: 450...... 41648 50...... 38427, 40622 305...... 39269, 42478 1...... 40253 24 CFR 501...... 41658 11 CFR 17 CFR 200...... 39238 32 CFR 100...... 38353, 40586 3...... 38869, 41166 1006...... 40774, 42185 199...... 42717 104...... 38353, 40586 4...... 42709 1007...... 40774, 42185 11...... 39473 341...... 42722 109...... 40586 Proposed Rules: 113...... 38353 40...... 38379 Proposed Rules: 50...... 43208 199...... 40597 Proposed Rules: 231...... 43234 58...... 43208 241...... 43234 320...... 38448 100...... 40881 245...... 41582 806b...... 38450 Proposed Rules: 574...... 43208 12 CFR 228...... 42914 582...... 43208 33 CFR 229...... 42914 25...... 38844 583...... 43208 1...... 38386, 41329 232...... 41877 28...... 41619 970...... 43208 3...... 41329, 43252 203...... 43217, 43218 240 ...... 38610, 39642, 39647, 25 CFR 26...... 41329 208...... 38844 41877, 42914 81...... 41329 369...... 38844 249...... 41877, 42914 502...... 41166 89...... 41329 542...... 43390 Ch. IX...... 39791 18 CFR 100 ...... 41829, 41830, 41832, 1710...... 38361 26 CFR 41834, 42481 Proposed Rules: 35...... 39272 110...... 41329 550...... 39886 Proposed Rules: 1 ...... 38199, 40157, 41324 117 ...... 38388, 40606, 41174, 551...... 39886 284...... 39315 301...... 41324, 41621 41329, 42997, 43252 Proposed Rules: 120...... 41329 702...... 38431 19 CFR 741...... 38431 1 ...... 38214, 40629, 40896, 127...... 41329 747...... 38431 10...... 39286 41362, 41653, 41892, 42210 128...... 41329 951...... 41872 12...... 38877, 43247 41...... 38913 148...... 41329 1720...... 42200 122...... 42710 48...... 38913 151...... 41329 Proposed Rules: 145...... 38913 153...... 41329 13 CFR 133...... 39321 301 ...... 39915, 41362, 41892 154...... 41329 Proposed Rules: 141...... 39322 602...... 41892 155...... 41329 156...... 41329 121...... 39311 151...... 39322 27 CFR 201...... 38614 157...... 41329 14 CFR 204...... 38614 Proposed Rules: 158...... 41329 4...... 38915 159...... 41329 23 ...... 39261, 39262, 39264 206...... 38614 207...... 38614 7...... 43496 160...... 41329 25 ...... 40587, 41157, 42478 164...... 41329 39 ...... 38193, 38371, 38587, 20 CFR 28 CFR 165 ...... 38389, 38390, 38394, 38849, 38852, 39265, 39267, 105...... 41140 38590, 38593, 38595, 39292, 39843, 39844, 40141, 40143, 217...... 42713 416...... 38381 Proposed Rules: 39294, 39296, 39299, 39597, 40145, 40147, 40589, 41312, 16...... 39838 39598, 39600, 39846, 39848, Proposed Rules: 41315, 41318, 41323, 41818, 105...... 41147 39850, 39852, 40162, 40608, 218...... 41205 42106, 42183, 42981, 42983, 40610, 40611, 40613, 40615, 220...... 41205 42985, 42989, 43227, 43229, 29 CFR 40617, 40851, 40853, 40854, 225...... 41205 43230, 43232 1979...... 40597 40856, 40858, 40859, 40861, 404...... 39904 71 ...... 39473, 40591, 40592, 4022...... 40850 40863, 40865, 41175, 41177, 416...... 39904 40985, 41160, 41819, 42477 4044...... 40850 41329, 41334, 41335, 41337, 73...... 41820 21 CFR Proposed Rules: 41339, 41341, 41625, 41836, 97 ...... 38195, 38197, 40594, 35...... 39830 41838, 41845, 42483, 42486, 173...... 42714 40595 42722, 42723 310...... 42992 129...... 42450 30 CFR 175...... 42488 187...... 42462 352...... 41821 18...... 38384 510 ...... 41823, 42717, 42997, Proposed Rules: 1260...... 38855 42...... 42314 66...... 42512 43247 Proposed Rules: 44...... 38384 110...... 38625 52043247 39 ...... 38212, 39311, 39314, 46...... 38384, 42314 155...... 40254 522...... 41823 39640, 39900, 40239, 40249, 47...... 42314 160...... 41659 40623, 40626, 40894, 41355, 529...... 41823 48...... 38384, 42314 165 ...... 38451, 39917, 39919, 41357, 41640, 41875, 42202, 558...... 43248 49...... 38384 39922, 39924, 41911, 42741 42204, 42207, 42739, 43056, 822...... 38878 56...... 38384, 42314 43058 884...... 40848 57...... 38384, 42314 36 CFR 47...... 41302 1308...... 42479 70...... 38384 242...... 42185 71 ...... 40252, 40627, 40896, Proposed Rules: 71...... 38384 1206...... 42493 42511 101...... 38913 75...... 38384 1228...... 43253 201...... 41360, 43068 77...... 42314 1230...... 39473 15 CFR 211...... 41360, 43068 90...... 38384 1250...... 43253 732...... 38855 312...... 41642 917...... 39290, 41622 1253...... 43254 734...... 38855 601...... 41360, 43068 926...... 41825 1254...... 43253 738...... 38855 880...... 41890 Proposed Rules: Proposed Rules: 740...... 38855 875...... 41756 1190...... 41206 22 CFR 742...... 38855 917...... 41653 1191...... 41206 748...... 38855 41...... 38892, 40849 950...... 41656 1228...... 43069 770...... 38855 42...... 38892, 40849 772...... 38855 Proposed Rules: 31 CFR 38 CFR 774...... 38855 62...... 43264 917 ...... 38446, 38621, 38917, 3...... 40867
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17...... 41178 141...... 38222 535...... 39858 35...... 42174 Proposed Rules: 258...... 39662 540...... 39858 39...... 43524 20...... 40255 260...... 39927, 40508 550...... 39858 52...... 38552, 43524 261...... 39927, 40508 551...... 39858 1813...... 38904 39 CFR 264...... 40508 555...... 39858 1847...... 38908 20...... 38596 268...... 40508 560...... 39858 1852...... 38904, 38909 111...... 40164 270...... 40508 Proposed Rules: 271...... 40260, 41207 298...... 40260 49 CFR 40 CFR 273...... 40508 105...... 42948 300...... 39326, 41914 47 CFR 19...... 41343 106...... 42948 413...... 38752 1...... 41847 27...... 41343 107...... 42948 433...... 38752 2 ...... 39307, 39862, 41847, 51...... 39602 171...... 42948 438...... 38752 42730 52 ...... 38396, 38894, 39473, 238...... 42892 450...... 42644 15 ...... 38903, 39632, 42730 39616, 39619, 39854, 39856, 350...... 41196 463...... 38752 25 ...... 39307, 39308, 39862, 39858, 40867, 41840, 42500, 385...... 41196 464...... 38752 43031 42726, 42729, 42999, 43002, 571...... 38704, 41348 467...... 38752 27...... 41847 43004, 43006, 43013, 590...... 38704 471...... 38752 52...... 40619 61...... 39622 595...... 38423 54...... 41862, 42504 62...... 39628, 41179 624...... 40100, 41579 41 CFR 63...... 41181 63 ...... 38200, 39301, 39622, 1540...... 41635 Ch. 301 ...... 38604 64...... 39863 39794, 40044, 40478, 40578, 1544...... 41635 40814, 41118 101-9...... 38896 69...... 42730 70...... 39630 101-192...... 38896 73 ...... 38206, 38207, 38423, Proposed Rules: 541...... 43075 71...... 38328 39864, 42198, 42506, 42507 571...... 41365 72...... 40394 42 CFR 76...... 40870 75...... 40394 400 ...... 40988, 40989, 42609 78...... 43257 80 ...... 38338, 38398, 40169 430 ...... 40988, 40989, 42609 87...... 39862, 41847 50 CFR 81...... 42688, 43013 431 ...... 40988, 40989, 42609 90...... 41847 11...... 38208 122...... 42501 434 ...... 40988, 40989, 42609 95...... 41847, 42507 16...... 39865 144...... 38403, 39584 435 ...... 40988, 40989, 42609 101...... 43031 17...... 40790, 41367 146...... 38403 438 ...... 40988, 40989, 42609 301...... 41182 37...... 38208 180 ...... 38407, 38600, 40185, 440 ...... 40988, 40989, 42609 Proposed Rules: 100...... 42185 40189, 40196, 40203, 40211, 447 ...... 40988, 40989, 42609 2...... 40898 222...... 41196 40219, 41628, 41802, 41843, Proposed Rules: 32...... 42211 223...... 41196 42392, 43255 83...... 42962 53...... 42211 600...... 40870 261...... 42187 64...... 39929, 42211 635...... 39869 271 ...... 38418, 40229, 43027 43 CFR 73 ...... 38244, 38456, 38924, 648...... 38608, 38909 Proposed Rules: 422...... 38418 39932, 39933, 39934, 39935, 660 ...... 39632, 40232, 40870 9...... 41668 3730...... 38203 40632, 40907, 41363, 41364, 679...... 40621, 41639 19...... 41363 3820...... 38203 42215, 42216, 42524, 43265 Proposed Rules: 27...... 41363 3830...... 38203 76...... 42524, 43265 17 ...... 39106, 39206, 39936, 52 ...... 38218, 38453, 38626, 3850...... 38203 97...... 40898 40633, 40657, 41669, 41918, 38630, 38924, 39658, 39659, 42217 48 CFR 39926, 39927, 40891, 41914, 44 CFR 18...... 39668 42516, 42519, 42743, 43071, 64...... 42501 Chapter 1...... 43512, 43521 20...... 40128 43072, 43073 Proposed Rules: 2...... 43513 25...... 41918 61...... 39661 67...... 43073 8...... 43514 32...... 41918 62...... 39661 17...... 43513 223 ...... 38459, 39328, 40679 63 ...... 38810, 39324, 39661, 45 CFR 31...... 43513, 43516 224...... 39328 41125, 41136, 41138, 42103, 1626...... 42198 33...... 43513 226...... 39106, 40679 42400 49...... 43513 600...... 43265 70...... 39662 46 CFR 51...... 43514 622...... 40263 80...... 38453, 40256 45...... 41847 52...... 43513, 43520 635...... 43266 81 ...... 42697, 43072, 43073 502...... 39858 Proposed Rules: 648...... 39329, 41936 122...... 41668, 42644 503...... 39858 Ch. 1 ...... 42172 654...... 42744 123...... 41668 515...... 39858 2...... 42174 660 ...... 38245, 39330, 42525, 124...... 41668 520...... 39858 29...... 38552 42750 125...... 41668 530...... 39858 31...... 40136, 42174 679...... 40680
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REMINDERS SECURITIES AND Puerto Rico and U.S. Regional haze rule; The items in this list were EXCHANGE COMMISSION Virgin Islands; Western States and editorially compiled as an aid Reports and guidance environmental impact eligible Indian Tribes; to Federal Register users. documents; availability, etc.: statement; scoping sulfur dioxide Inclusion or exclusion from Application of certain meetings; comments milestones and this list has no legal provisions of the federal due by 7-1-02; backstop emissions significance. securities laws to trading published 5-31-02 [FR trading program; in security futures 02-13707] comments due by 7-5- products; published 6-27- COMMERCE DEPARTMENT 02; published 5-6-02 RULES GOING INTO 02 National Oceanic and [FR 02-10872] EFFECT JUNE 27, 2002 TRANSPORTATION Atmospheric Administration Air quality implementation DEPARTMENT Fishery conservation and plans; approval and promulgation; various AGRICULTURE Federal Aviation management: States: DEPARTMENT Administration Northeastern United States Alaska; comments due by Agricultural Marketing Airworthiness directives: fisheries— 7-3-02; published 6-3-02 Service Northeast multispecies; Boeing; published 5-23-02 [FR 02-13698] Cotton research and Eurocopter France; comments due by 7-5- ENVIRONMENTAL promotion order: published 6-12-02 02; published 6-5-02 [FR 02-14050] PROTECTION AGENCY Cotton Board Rules and General Electric Co.; Regulations; amendments; published 5-23-02 COMMERCE DEPARTMENT Air quality implementation plans; approval and published 5-28-02 Pratt & Whitney; published National Oceanic and Atmospheric Administration promulgation; various AGRICULTURE 5-23-02 States: DEPARTMENT TRANSPORTATION Fishery conservation and management: California; comments due by Food and Nutrition Service DEPARTMENT 7-5-02; published 6-4-02 West Coast States and Child nutrition programs: National Highway Traffic [FR 02-13798] Safety Administration Western Pacific National school lunch, fisheries— ENVIRONMENTAL school breakfast, and Motor vehicle safety Western Pacific pelagic; PROTECTION AGENCY child and adult care food standards: comments due by 7-3- Air quality implementation programs— Air brake systems— 02; published 6-3-02 plans; approval and Infant meal program; Trailer test rig [FR 02-13854] promulgation; various whole cow’s milk modifications; technical States: amendments; published DEFENSE DEPARTMENT eliminated as option in California; comments due by reimbursable meals for 5-28-02 Grant and agreement regulations: 7-5-02; published 6-4-02 infants under one year [FR 02-13799] of age; published 5-28- COMMENTS DUE NEXT Technology investment 02 agreements; comments ENVIRONMENTAL WEEK due by 7-1-02; published PROTECTION AGENCY ENVIRONMENTAL 4-30-02 [FR 02-10280] PROTECTION AGENCY Air quality implementation AGRICULTURE ENERGY DEPARTMENT plans; approval and Pesticide programs: DEPARTMENT Aquisition regulations: promulgation; various Cyhalofop-butyl; correction; Animal and Plant Health States: published 6-27-02 Inspection Service Classified information security violations; civil Indiana; comments due by HEALTH AND HUMAN Livestock and poultry disease penalties assessment; 7-1-02; published 5-31-02 SERVICES DEPARTMENT control: procedural rules; [FR 02-13516] Food and Drug Foot-and-mouth disease; comments due by 7-1-02; ENVIRONMENTAL Administration indemnification; comments published 4-1-02 [FR 02- PROTECTION AGENCY due by 7-1-02; published Animal drugs, feeds, and 07764] Air quality implementation 5-1-02 [FR 02-10724] related products: ENERGY DEPARTMENT plans; approval and Chlortetracycline; published AGRICULTURE Federal Energy Regulatory promulgation; various 6-27-02 DEPARTMENT Commission States: Sponsor name and adress Animal and Plant Health Natural Gas Policy Act: Indiana; comments due by Inspection Service changes— Short-term and interstate 7-1-02; published 5-31-02 Church & Dwight Co., Plant-related quarantine, natural gas transportation [FR 02-13517] Inc.; published 6-27-02 domestic: services; regulation; Montana; comments due by Karnal bunt; comments due INTERIOR DEPARTMENT comments due by 6-30- 7-1-02; published 5-2-02 by 7-1-02; published 5-1- 02; published 6-7-02 [FR [FR 02-10333] Fish and Wildlife Service 02 [FR 02-10723] 02-14176] Montana; correction; Endangered and threatened COMMERCE DEPARTMENT ENVIRONMENTAL comments due by 7-1-02; species: Census Bureau PROTECTION AGENCY published 6-14-02 [FR 02- Critical habitat Document certification Air programs: 15091] designations— process; comments due by Fuels and fuel additives— FEDERAL Robust spineflower; 7-5-02; published 6-4-02 COMMUNICATIONS published 5-28-02 Reformulated gasoline [FR 02-13603] covered area provisions; COMMISSION NATIONAL ARCHIVES AND COMMERCE DEPARTMENT modifications; comments Common carrier services: RECORDS ADMINISTRATION National Oceanic and due by 7-5-02; Satellite communications— Public availablity and use: Atmospheric Administration published 6-4-02 [FR Alaska; domestic satellite NARA facilities; addresses Fishery conservation and 02-13977] earth stations licensing and hours; published 6- management: Air quality implementation in bush communities; 27-02 Caribbean, Gulf of Mexico, plans: comments due by 7-1- Technical amendments; and South Atlantic Preparation, adoption, and 02; published 5-30-02 published 6-27-02 fisheries— submittal— [FR 02-13298]
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Telecommunications Act of Appalachian elktoe; Air Tractor, Inc.; comments Side and rear impact 1996; implementation— comments due by 7-1- due by 7-5-02; published safety protection Universal service; rural 02; published 5-16-02 6-4-02 [FR 02-13423] requirements; comments health care support [FR 02-12175] Air Tractor, Inc.; correction; due by 7-1-02; mechanism; comments INTERIOR DEPARTMENT comments due by 7-5-02; published 5-1-02 [FR due by 7-1-02; National Park Service published 6-20-02 [FR 02-10506] published 5-15-02 [FR Special regulations: C2-13423] TRANSPORTATION 02-12096] Assateague Island National TRANSPORTATION DEPARTMENT Digital television stations; table Seashore, MD and VA; DEPARTMENT Research and Special of assignments: personal watercraft use; Federal Aviation Programs Administration South Dakota; comments comments due by 7-5-02; Administration Hazardous materials: published 5-6-02 [FR 02- due by 7-1-02; published Airworthiness directives: Hazardous materials 11046] transportation— 5-15-02 [FR 02-11975] Boeing; comments due by INTERIOR DEPARTMENT Television broadcasting: 7-1-02; published 5-15-02 Offerors and transporters; Surface Mining Reclamation security requirements; Digital television construction [FR 02-12068] and Enforcement Office correction; comments deadline extension Permanent program and TRANSPORTATION due by 7-3-02; requests; denial policy; abandoned mine land DEPARTMENT published 5-23-02 [FR comments due by 7-5-02; reclamation plan Federal Aviation 02-13003] published 6-4-02 [FR 02- submissions: Administration 13908] TREASURY DEPARTMENT Kentucky; comments due by Airworthiness directives: Currency and financial HEALTH AND HUMAN 7-5-02; published 6-4-02 Eurocopter France; transactions; financial SERVICES DEPARTMENT [FR 02-13986] comments due by 7-1-02; reporting and recordkeeping Food and Drug LABOR DEPARTMENT published 5-2-02 [FR 02- requirements: Administration Employment and Training 10649] USA PATRIOT Act; Human drugs: Administration McDonnell Douglas; implementation— Labeling of drug products Aliens: comments due by 7-1-02; Anti-money laundering (OTC)— Labor certification for published 5-2-02 [FR 02- programs for certain Standardized format; permanent employment in 10248] foreign accounts; due compliance dates U.S.; new system TRANSPORTATION diligence policies, partially delayed; implementation; comments DEPARTMENT procedures, and due by 7-5-02; published comments due by 7-5- Federal Aviation controls; comments due 5-6-02 [FR 02-10570] 02; published 4-5-02 Administration by 7-1-02; published 5- LABOR DEPARTMENT 30-02 [FR 02-13411] [FR 02-08193] Airworthiness directives: HEALTH AND HUMAN Occupational Safety and VETERANS AFFAIRS Health Administration McDonnell Douglas; SERVICES DEPARTMENT comments due by 7-1-02; DEPARTMENT Wendell H. Ford Aviation Food and Drug published 5-15-02 [FR 02- Fisher Houses and other Investment and Reform Act Administration 12070] temporary lodging; veterans for 21st Century; use; comments due by 7-1- Medical devices: implementation: TRANSPORTATION 02; published 4-30-02 [FR Dental devices— Discrimination complaints; DEPARTMENT 02-10597] Intraoral devices for handling procedures; Federal Aviation snoring and/or comments due by 6-30- Administration obstructive sleep apnea; 02; published 6-13-02 [FR Airworthiness directives: LIST OF PUBLIC LAWS classification; comments 02-14950] Raytheon; comments due by This is a continuing list of due by 7-5-02; NUCLEAR REGULATORY 7-5-02; published 5-29-02 published 4-5-02 [FR COMMISSION public bills from the current [FR 02-13289] session of Congress which 02-08347] Rulemaking communications TRANSPORTATION have become Federal laws. It improvements; comments HEALTH AND HUMAN DEPARTMENT may be used in conjunction SERVICES DEPARTMENT due by 7-1-02; published 5- 30-02 [FR 02-13468] Federal Aviation with ‘‘PLUS’’ (Public Laws Health insurance reform: Administration Update Service) on 202–523– Health Insurance Portability SOCIAL SECURITY 6641. This list is also ADMINISTRATION Bell; comments due by 7-1-02; and Accountability Act of published 4-30-02 [FR 02- available online at http:// Supplemental security income: 1996— 10533] www.nara.gov/fedreg/ Aged, blind, and disabled— Electronic transactions plawcurr.html. Access to information held TRANSPORTATION and code sets by financial institutions; DEPARTMENT The text of laws is not standards; modifications; comments due by 7-1- National Highway Traffic published in the Federal comments due by 7-1- 02; published 5-2-02 Safety Administration Register but may be ordered 02; published 5-31-02 [FR 02-10842] in ‘‘slip law’’ (individual [FR 02-13614] Confidential business TRANSPORTATION information; comments due pamphlet) form from the Transactions and code set DEPARTMENT by 7-1-02; published 4-30- Superintendent of Documents, standards for electronic Coast Guard 02 [FR 02-10181] U.S. Government Printing transactions; Ports and waterways safety: Motor vehicle safety Office, Washington, DC 20402 modifications; comments (phone, 202–512–1808). The Buffalo Captain of Port standards: due by 7-1-02; text will also be made Zone, NY; security zones; Child restraint systems— published 5-31-02 [FR available on the Internet from comments due by 7-1-02; 02-13615] Improved test dumies, GPO Access at http:// published 5-30-02 [FR 02- INTERIOR DEPARTMENT new or revised injury www.access.gpo.gov/nara/ 13515] criteria, and extended Fish and Wildlife Service nara005.html. Some laws may TRANSPORTATION child restraints not yet be available. Endangered and threatened DEPARTMENT standards; comments species: Federal Aviation due by 7-1-02; S. 2431/P.L. 107–196 Critical habitat Administration published 5-1-02 [FR Mychal Judge Police and Fire designations— Airworthiness directives: 02-10507] Chaplains Public Safety
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Officers’ Benefit Act of 2002 of Terrorism, to combat with the following text (June 24, 2002; 116 Stat. terrorism and defend the message: Public Laws Electronic 719) Nation against terrorist acts, Notification Service H.R. 3275/P.L. 107–197 and for other purposes. (June SUBSCRIBE PUBLAWS-L (PENS) To implement the International 25, 2002; 116 Stat. 721) Your Name. Convention for the Suppression of Terrorist Last List June 21, 2002 PENS is a free electronic mail Note: This service is strictly Bombings to strengthen notification service of newly for E-mail notification of new criminal laws relating to enacted public laws. To laws. The text of laws is not attacks on places of public subscribe, go to http:// available through this service. use, to implement the hydra.gsa.gov/archives/ PENS cannot respond to International Convention of the publaws-l.html or send E-mail specific inquiries sent to this Suppression of the Financing to [email protected] address.
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